Preparatory Contract

8/10/2019 Preparatory Contract

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PREPARATOY AGREEMENT FOR JOINT VENTURE CONTRACT

This Agreement (the Agreement) is executed this _____ day of _____, 2012 by and

between:

ALRECO INNOVATIVE CONSTRUCTION SERVICE, a Single Proprietorship entity duly

organized and existing under and by virtue of the laws of the Republic of the Philippines,

with office address at Unit 108, 8760 Santol, San Antonio, Makati City, hereinafter referred

to as ALRECOand represented in this act by its owner ALBERTO R. COLLANTES;

- and -

MONOCRETE REALTY AND DEVELOPMENT CORPORATION, a corporation organized

and existing under the laws of the Republic of the Philippines with principal office located

at Lot 8356, C6 Menville Subdivision, Palingon, Taguig City, hereinafter referred to as

MONOCRETEand represented in this act by its President-CEO ELIZABETH MENDOZA;

REPRESENTATIONS

A. ALRECO and MONOCRETE desires to form a business partnership to carry on the

purpose of their respective business and expertise jointly;

B. ALRECO is engaged as innovator, technology provider as well as outsourcing and

consultant in the construction industry. Its products herein represented includes but

may not be limited to the lightweight concrete, such as the Light Interlocking HollowBlock and Precast Panel (products), its machineries, chemicals, technicians and

technology;

C. MONOCRETE is engaged in building, purchasing, owning, sub-diving, selling, and

renting real estate among others. Its products herein represented include concrete,

labor supply, warehouse and equipments among others.

D. ALRECO through its Owner and General Manager, Mr. ALBERTO R. COLLANTES

bought the product technologies from an Australian based company and therefore

has the sole intellectual property rights not only on this technology but also over the

use of the most essential equipments for the production of Lightweight Interlocking

Hollow Block and Precast Panel that maybe available for sale to consumers and end-

users.

E. ALRECO initially presented a business program wherein it will be responsible for the

procurement of projects, where its aforementioned main products will be used. That

Monocrete with its existing resources and capabilities will be responsible for the

manufacture and supply of the products as the case maybe in accordance to

project requirement. That contract(s) entered into for this purpose on the supply

and/or installation of these products will be under the name of ALRECO as the

exclusive technology provider.

F. MONOCRETE through its President-CEO Elizabeth Mendoza manifested its interest and

required ALRECO to immediately submit the details of its business program by which

ALRECO immediately prepare. MONOCRETE on its part will commence to prepare itspart after submission of details of the business program.

G. ALRECO and MONOCRETE agreed that the degree of financial capitalization will be

determined thereafter for a possible JOINT VENTURE AGREEMENT.

NOW, THEREFORE, for and in consideration of the above premises and reciprocal

obligations and undertakings contained herein, the parties agree:

1. CREATION OF THE ALRECO AND MONOCRETE JOINT VENTURE


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ALRECO INNOVATIVE CONSTRUCTION SERVICE & MONOCRETE REALTY AND

DEVELOPMENT CORPORATION hereby associates themselves together as Joint

Venture (JV) partners for the specific purpose of contracting, manufacturing,

supply and installation of its products and as hereunto represented.

2.

JOINT VENTURE BOARD OF DIRECTORS & OFFICERS

The Board of Directors (Board) of the JV shall be as follows:

2.01 Chairman Of The Board -

2.02 President & CEO -

2.03 Technical & Operation -

2.04 Accounting & Administration -

2.05 Finance -

The party who has the larger capital investment shall be holding the majority

membership in the Board.

The members of the Board maybe replaced at any time for gross violation of their

respective duties and responsibilities determined by the an independent body

elected and chosen by the Board, resignation, declaration of absence in

accordance with the requirements of the Civil Code, death, imprisonment of more

than six (6) months, or termination of employment by their respective employers,

removal or replacement by their respective employers with the approval of the

Board.

3. CONTRIBUTION / PARTICIPATION / MANAGEMENT RESPONSIBILITIES OF THE PARTIES

3.1 ALRECO INNOVATIVE CONSTRUCTION SERVICE

3.1.1 ALRECO being the Technology owner & partner to the JV, shall be theBusiness & Project Development Partnerand shall perform the following

duties and responsibilities:

3.1.1.1 ALRECO through its marketing networks, contacts and resources

shall develop the communication link and representation with

the client bids and/or awards committee in behalf of the _____

JV;

3.1.1.2 ALRECO shall have a project development fund for the

preliminary expenses during bidding works in favor of the JV;

3.1.1.3 ALRECO shall be responsible for the project development workssuch as but not limited to representation, flights, hotel expenses,

documentation preparation and others in relation to its pursuit of

the contract by its representatives;

3.1.1.4 ALRECO after such identification shall secure all necessary

commercial and technical documents from the client bids

and/or awards committee and officially endorse the same to

the Board for evaluation, estimate, costing and assessment of its

viability;

3.1.1.5 ALRECO shall brief and orient the Board on all commercial,

technical and financial aspects of the project for proper

inclusion on the preparation of the estimate and costing of thebid for the project;

3.1.1.6 ALRECO shall assist in facilitating entry of skilled personnel for the

project and shall be jointly responsible for their administration in

relation to the project;

3.2 MONOCRETE REALTY AND DEVELOPMENT CORPORATION

3.2.1 MONOCRETE having a wide capability and credibility to manufacture

by mass production and partner to the JV shall be the Production,

Construction & Logistic Support Partner for the particular undertaking.


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3.2.2 After the final checking of all the technical designs, drawings of job

orders among others, and with the final approval of the Board and

endorsement of the President & CEO, MONOCRETE shall perform the

following duties and responsibilities:

3.2.2.1 To be fully responsible for the production of all job orders

endorsed by ALRECO as has been duly approved by thePresident& CEO;

3.2.2.2 Ensure that the all products manufactured on the plant shall be

of the acceptable quality standard represented to clients;

3.2.2.3 Ensure that all delivery schedules and accomplishment shall be

on time as agreed upon in accordance to the contract

agreement with the clients;

3.2.2.4 To be fully equipped with all materials and manpower

reasonably required at site and inside the plant;

3.2.2.5

To guarantee that all job orders coming from the JV shall have

its corresponding written approval of the President & CEO;

3.2.2.6 To guarantee that every job orders has its corresponding

contracts with the JV.

3.2.3 MONOCRETE likewise having its pool of Technical and Engineering

experts shall be the Engineering and Project Management for the JV

and shall further perform the following responsibilities:

3.2.3.1 After ALRECOsidentification and endorsement of the projects

to the Bord for further evaluation and approval, it will be

officially endorsed to MONOCRETE technical group to performthe following works:

3.2.3.1.1 To coordinate with ALRECO for the required site inspection

and necessary works for the pre qualification as bidder and

as part of the project development works;

3.2.3.1.2 To prepare labor cost estimates of the projects upon

receipt of the Bill of Quantities (BOQ) and/or costing or

other requirements endorsed by ALRECO;

3.2.3.1.3 To make available the technical team for the bid

preparation but not limited to the Engineering Manager,Engineer, Supervisors, and surveyors as required in the

project;

3.2.3.1.4 Assist ALRECO in briefing and orienting for production to

installation works;

3.2.3.1.5 Provide documents and assist in the processing of the pre

qualification documents for the JV with the bid committee

of the clients;

3.2.3.1.6 Mobilize the required project management, administrative

& accounting personnel on site who will handle, manage

and administer workers, payroll and welfare facilities on site.

3.2.3.1.7 To make use of its project and construction management

experience and technical expertise for the project, such

that services shall meet the specified requirements and

objectives of the client.

3.2.3.1.8 To comply with existing statutory requirement for

Environment Safety as well as that of the Occupational

Safety and Health Standards.

4. WORKING CAPITAL / FINANCIAL CONTRIBUTION


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As will be required under the JV Agreement, the JV shall provide the required credit

line for each member.

Note : It has also been agreed that MONOCRETE shall provide the capital investment

for the required Molds for the production of Lightweight Interlocking Hollow Block with

an approximate import value of not less than Two Million Pesos (PHP 2,000,000.00) in

favor of the JV as it will be treated as credit which may include a correspondinglawful interest that shall be agreed later upon by the parties concerned.

5. APPLICATION AND SHARING OF PROFITS & FINANCIAL COMMITMENT

ALRECO INNOVATIVE CONSTRUCTION SERVICE & MONOCRETE REALTY AND

DEVELOPMENT CORPORATION being partners shall assume a share of

____________________ of the benefits from this undertaking.

Should the Joint Venture be awarded the contract, the proceeds of the JV shall be

applied and allocated for the following:

Cost of Workers Mobilization;

Workers compensation, benefits and other mandatory expenses as required

by law;

Overhead and Administrative expenses;

Office and Consumables Supplies;

Taxes;

Management Fees;

Capital Depreciation/amortization if any;

Other operational expenses.

The net income shall be shared by the parties as follows:

ALRECO INNOVATIVE CONSTRUCTION SERVICE - _____%MONOCRETE REALTY AND DEVELOPMENT CORPORATION - _____%

6. JOINT VENTURE NAME AND TRADEMARK

The JV shall carry the tradenames of the contracting parties which shall be ALRECO &

MONOCRETE JOINT VENTURE.

The JV shall carry the trademarks and/or logo of the contracting parties and shall be

arranged and designed by the parties. (ANNEX ___).

Tradenames and trademarks of the parties shall be the official identification marking

to be carried on all JV commercial documents, property markings and identification,internal documentations among others, except that the Main Contract

documentations for the projects shall be under the name of ALRECO as the

intellectual property owner and provider.

JV name and trade may also be amended according to the change of the

respective tradenames and trademarks of the parties.

7. DISLOYALTY OF MEMBER OF THE BOARD OR ANY PARTY

Where a director by virtue of his office, aquires for himself a business opportunity

which should belong to the JV, thereby obtaining profits to the prejudice of the

Parties and the JV, he must account to the Party and/or JV by refunding the same,

unless his act has been ratified by the offended Party and/or JV.

8. INCLUSION OF ANOTHER PARTY TO THE JV

In any event wherein the Board may find it reasonable and necessary to further and

make the most effective and profitable opportunity in carrying on the undertaking of

the JV, a new partner may be accepted without modifying the terms of the JV

Agreement, except that if modification is reasonable and necessary for the benefit

of the parties and the JV.

This may also apply to exclusion of a party later included if otherwise condition will

manifest. Such may be decided by the decision of the original parties to the JV.

9. TERMINATION CLAUSE


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The parties may terminate the JV Agreement for any other cause upon reasonable

notice to the other party provided that its affectivity shall be after completion of any

existing projects and after complete liquidation. From the time of any notice for

termination by any party, business development activities shall likewise cease until

further notice from the Board.

If in case the business development activities is on-going and termination notice has

been properly served before any party and to the board, liabilities or damages that

may be incurred therefrom due to such termination shall be borne by the party who

has given notice except that if notice was sent simultaneously by both parties.

10.REMOVAL/AMENDEMENT/MODIFICATION CLAUSE

The contents of every representations and provisions above stated are still subject to

any removal, amendment and/or modification during this negotiation stage. In case

where any provision has not been change in accordance with this provision, the

contents of this preparatory agreement shall be included and shall become part of

the MEMORANDUM OF AGREEMENT forthe Joint Venture Agreement.

TERMINATION OF INTEREST UNDER THIS STAGE

The parties herein are in the negotiation stage for the purpose of investing to a

common fund the assets, expertise, technology and manpower to undertake a business

with a high potential demand for the market in the fast growing construction industry not

only locally but abroad.

As such with the efforts and costs incurred and employed by the parties involved

in this negotiation, any of parties cannot without any reasonable and acceptable

grounds withdraw therefrom. Withdrawal by any party shall be made by serving awritten notice either personally or by registered mail. The notice of withdrawal shall

indicate the facts and the basis for which the same has been based.

This PREPARATORY AGREEMENT FOR JOINT VENTURE AGREEMENT shall be

binding upon the parties hereto.

IN WITHESS WHEREOF, the parties hereto have set their hands at the bottom of this

page and on the left margin of all pages on this agreement.

Signature: Signature:

..

ALBERTO R.COLLANTES ELIZABETH MENDOZA

GENERAL MNGR./OWNER - ALRECO PESIDENT & CEO - MONOCRETE

Witnessess:

...................................................................... .................................................................


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ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES)

MAKATI CITY OF ____________)SS.

BEFORE ME, a Notary Public, this ______ day of ______________, 2012, personally

the following:

Name CTC Number Date/Place Issued

_________________ ______________________ __________________

_________________ ______________________ __________________

This instrument consisting of _____ page/s, including the page on which this

acknowledgement is written, has been signed on the left margin of each and

every page thereof by the concerned parties and their witness, and sealed with

my notarial seal. All known to me to be the same persons who executed the

foregoing instrument and acknowledged that the same is their free act and

voluntary deed.

WITNESS MY HAND AND SEAL in the place and on the date first above written.

NOTARY PUBLIC

Doc. No. _______

Page No. _______Book No. _______

Series of 2012


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