underwriting agreement (1)

UNDERWRITING AGREEMENT

This Underwriting Agreement (the “Agreement”), made and entered into this ___ day of ___________, at __________, by and between:

___________________________________, a corporation duly organized and existing under Philippine laws, with principal office located at _____________________, represented herein by its duly authorized ________________, Mr. ___________________ (the “Company”);

- and -

_________________________, a corporation duly organized and existing under Philippine laws, with principal office located at __________________________, represented herein by its duly authorized _____________, Mr. _____________ (the “Underwriter”);

(with the Company and the Underwriter being collectively referred to herein as the “Parties” and, individually, a “Party”)

W i t n e s s e t h :

WHEREAS, the Company intends to issue, publicly offer and sell by way of a stock rights an initial public offering up to a maximum of _______________ (_____________) of its common shares, at an offer price of ______ (Php ______) per share, to its stockholders of record the public through and in accordance with the rules and regulations of the Philippine Stock Exchange, Inc. (the “Exchange”) and requires the services of an underwriter who will underwrite and take up all of the offer shares remaining unsubscribed after the offer period to ensure full subscription thereof, in compliance with the Philippine securities laws and the requirements of the Exchange;

WHEREAS, the Underwriter is an Investment House registered as an Underwriter of Securities under The Investment Houses Law (Presidential Decree No. 129) and has agreed to underwrite on a firm basis the offering, distribution and sale of the Securities as defined hereunder under the terms and conditions of this Agreement;

NOW, THEREFORE, for and in consideration of the foregoing premises, and of the terms and conditions hereinafter set forth, the Parties herein hereby agree as follows:

[1.] The Securities. The Securities covered and governed by this Agreement shall refer to __________ (__________) common shares of the Company, which shall be issued out of the Company’s authorized capital stock of __________ Pesos (Php __________), with a par value of __________ Pesos (Php __________) per share (hereinafter the “Offer Shares”), to be offered to the public in accordance with the rules and regulations of the PSE (hereinafter the “Offering”) stockholders of record of the Company as of a determined record date, under a rights offering (hereinafter the “Rights

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Offering”). The Rights Offering entitles each eligible stockholder to subscribe to __________ (__________) Offer Shares for every __________ (______) common share of the Company held on record date, at the offer price of __________ Pesos (Php __________) per Offer Share (hereinafter the “Offer Price”). The Offer Shares to be sold in the Rights Offering and underwritten by the Underwriter under this Agreement shall be referred to in this Agreement as the “Securities.”

[2.] Purchase and Sale. Subject to the terms and conditions and the representations and warranties set forth in this Agreement, the Company agrees to sell to the Underwriter, and the Underwriter agrees to purchase or deliver a purchaser, at the Offer Price, all of the Offer Shares not subscribed or procured by stockholders during the Rights Offering in accordance with such procedures of the Rights Offering agreed upon by and between the Company and the issue manager which is contained in the Registration Statement and Prospectus, and as approved by the Securities and Exchange Commission (the “SEC” or the “Commission”) and/or the Exchange.

[3.] Fees of Underwriter. For and in consideration of Underwriter’s services of underwriting the Securities, the Company shall pay the Underwriter on _____________ the amount equivalent to [•] percent (•%) of the gross proceeds of the Rights Offering, exclusive of any and all taxes which shall be for the exclusive account of the Company, or the amount of __________ Pesos (Php __________) (the “Exit Fee”) in the event that the Rights Offering does not proceed for reasons not attributable to the Underwriter, which fee shall not exceed [•] percent (•%) of amounts underwritten by the Underwriter for the Company. Reasonable out-of-pocket expenses incurred or to be incurred by the Underwriter in the performance of its obligations under this Agreement, such as but not limited to photocopying, communication, travel and accommodation, representation, and meals, up to the amount of ____________ Pesos (Php _________) shall be for the exclusive account of the Company. Any out-of-pocket expense exceeding the said amount shall, before incurring the same, be subject to the prior written approval of the Company. The Fees of the Underwriter stipulated herein, including all out-of-pocket expenses incurred and fees and expenses of counsel for the Underwriter under Section 4 below, shall, within five (5) days from deposit thereof in escrow and delivery of a Statement of Account to the escrow agent covering the said fees and expenses, be released to the Underwriter.

[4.] Costs and Expenses. The Company agrees to pay all costs and expenses attributable and incidental to the performance of its obligations hereunder including, without limitation, those related to the preparation of the Registration Statement and Prospectus and any sales efforts, as follows: (i) the preparation, printing or reproduction, and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), the Prospectus, and each amendment or supplement to the Registration Statement and/or Prospectus; (ii) the printing or (reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, the Prospectus and all amendments or supplements to any of the said documents as may be reasonably requested by the Underwriter for use in connection with the Rights Offering; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Securities, including any stamp taxes in connection with the original issuance and sale of the Securities; (iv) the printing (or reproduction) and delivery of this Agreement; (v) the registration of the Securities under the Securities Regulation Code (the “ SRC”) and the listing of the

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Securities on the Exchange; and (vi) the fees and expenses of the Company's and the Underwriter’s counsels and accountants.

[5.] Delivery and Payment. Within ___ day/s from and after the end of the period of the Rights Offering (the “Offer Period”), the Underwriter shall deliver to the escrow account required by the SEC and/or the Exchange, all payments for all Securities not taken or subscribed by a stockholder during the Offer Period together with the subscription agreements corresponding to such payments and a statement of account covering. all amounts remaining unpaid and to which it is entitled to under this Agreement, including the Fees and expenses of the Underwriter and the fees and expenses of the Underwriter’s legal counsel. The corresponding escrow agent shall, within _____ days from receipt of the said statement of account, release to the Underwriter the said unpaid amounts. All such subscriptions of the Underwriter or purchaser/s solicited by the Underwriter shall form part of all subscribers to the Securities and shall receive their shares of stock in the Company in accordance with the rules and procedures of the Rights Offering as contained in the Registration Statement and Prospectus and all amendments and supplements thereto.

1.[6.] Representations and Warranties. The Company hereby makes the following representations and warranties to the Underwriter as of the date of this Agreement and until completion of the transactions contemplated herein.

[6.1.] The Company shall, for and in connection with the Rights Offering, with the assistance, prior clearance and approval of the Underwriter, prepare a Registration Statement and Prospectus in accordance with the SRC, the rules and regulations implementing the SRC (the “SRC Rules”), applicable rules, regulations and orders of the SEC (the “SEC Rules”) (the SRC, the SRC Rules and the SEC Rules shall collectively be referred to as the “Applicable Laws”) and the rules and regulations of the Exchange (the “Exchange Rules”), and such Registration Statement and Prospectus shall be validly amended when necessary to ensure compliance with the Applicable Laws and Exchange Rules. Such Registration Statement and Prospectus shall be distributed to the stockholders of the Company and other persons, entities, companies or locations as may be required by the Applicable Laws and Exchange Rules, before the commencement of the Offer Period. Copies of such Registration Statement and Prospectus, including any amendments thereto shall, upon filing, be delivered to the Underwriter and its named counsel. The term "Registration Statement" means the Registration Statement required to be filed, and filed, under Sections 8 and 12 of the SRC and the SRC Rules, for the registration of the Securities, which includes financial statements and all exhibits and any information deemed by the Applicable Laws to be included in such Registration Statement and any amendments and supplements filed thereafter with the approval of the Commission and shall include the documents incorporated by reference therein. The effective date of the Registration Statement shall be the date the same is rendered or declared effective by the SEC (the “Effective Date”). The term "Prospectus" means, collectively, the prospectus being part of the Registration Statement, any separate prospectus based on the Registration Statement allowed under the Applicable Laws and filed with the Exchange, any prospectus supplement, in the respective forms allowed under the Applicable Laws and Exchange Rules. Any reference herein to the terms "amend," "amendment" or "supplement" with respect to the Registration Statement or the Prospectus shall

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be deemed to refer to and include the filing of any document with the Commission and/or the Exchange after filing of the Registration Statement and Prospectus with the Commission and/or Exchange and approved by the said bodies to be incorporated therein by reference.

6.1.[6.2.] Each part of the Registration Statement, on Effective Date, and the Prospectus and any amendment or supplement thereto, on the date the same is approved by the Commission and/or the Exchange, will: (a) conform in all material respects with the requirements of the Applicable Laws and Exchange Rules; (b) not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (c) contain a description of all contracts and documents of a character required to be described therein; and d) be filed with contracts and documents as exhibits of a character required to be filed therewith. The foregoing shall not apply to statements in or omissions from any such document in reliance upon, and in conformity with, written information furnished to the Company by the Underwriter, specifically for use in the preparation thereof, unless the written information furnished by the Underwriter is sourced from or based on documents or information provided by the Company or the inaccuracy or incorrectness thereof is rooted in the failure of the Company to disclose material information or documents to the Underwriter during the conduct of the Underwriter’s due diligence examination of the Company (hereinafter the “Due Diligence”) or on such other occasions.

The Company has granted to the Underwriter full access to all of the corporate books and records of the Company and its subsidiaries and has disclosed to the Underwriter all material contracts, documents and information required to ensure that the Registration Statement and Prospectus comply with the Applicable Laws and the Exchange Rules.

6.2.[6.3.] The financial statements and schedules included in the Registration Statement and the Prospectus set forth fairly the financial condition of the Company and the respective entity or entities presented as of the dates indicated and the results of operations and changes in financial position for the periods therein specified in conformity with generally accepted accounting principles consistently applied in the Philippines throughout the periods involved (except as otherwise stated therein). Any pro forma financial statements, financial and operational data of the Company included in the Registration Statement and the Prospectus comply in all material respects with the applicable requirements of the SRC and SRC Rules and the pro forma adjustments have been properly applied to the historical amounts in the compilation of such statements.

6.3.[6.4.] The Company has been duly organized and is validly existing as a corporation, is in good standing, under Philippine laws, has the power and authority to conduct its business as described in the Registration Statement and Prospectus, and is duly qualified to do business in each jurisdiction in which it owns or leases real property or in which the conduct of its business requires such qualification, except where the failure to be so qualified, considering all such cases in the aggregate, does not involve and will not involve a material risk to the business, properties, financial position or results of operations of the Company

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and its subsidiaries and related companies identified in the Registration Statement and Prospectus (hereinafter “Subsidiaries”) taken as a whole.

6.4.[6.5.] The only Subsidiaries of the Company are those identified in the Registration Statement and Prospectus. Each of the Company's Subsidiaries existing as of Effective Date is a corporation duly organized, validly existing and in good standing under Philippine laws. Each of the Company's Subsidiaries existing as of the Effective Date has the power and authority to conduct its business as described in the Registration Statement and Prospectus and is and will be on Effective Date, duly qualified to do business in each jurisdiction in which it owns or leases, or will own or lease, real property or in which the conduct of its business requires such qualification except where the failure to be so qualified, considering all such cases in the aggregate, does not involve and will not involve a material risk to the business, properties, financial position or results of operations of the Company or any of the said subsidiaries and related companies taken as a whole. Except for the interests in the Subsidiaries as disclosed in the Registration Statement and Prospectus, the Company does not own, directly or indirectly, any shares of stock or any other equity or long-term debt securities of any corporation or have any equity interest in any firm, partnership, joint venture, trust, association or other entity. Complete and correct copies of the articles of incorporation and by-laws of each of the said Subsidiaries, and all other agreements or documents evidencing the existence and arrangements of the Company under any partnership, joint venture, trust, association or other similar relationships with any other entity have been delivered to the Underwriter, and no changes therein have been made and will be made after delivery of the said copies, except as heretofore disclosed in writing to the Underwriter and considered in the preparation of the Registration Statement and Prospectus. Except as otherwise described in the Registration Statement or the Prospectus, all of the issued and outstanding capital stock of each of the Subsidiaries of the Company has been duly authorized and validly issued, fully paid and non-assessable, and owned by the Company or the relevant Subsidiary, as the case may be, in each case free and clear of any security interest, mortgage, pledge, lien, charge, encumbrance, claim, restriction or equity interest (each of the foregoing, a "Lien").

6.5.[6.6.] The Securities, when issued and delivered to the Underwriter or any other person or entity which the Underwriter after the Offer Period has agreed with and named as subscriber to such Securities or any portion thereof, against full payment therefor as provided by this Agreement will be, validly issued, fully paid and non-assessable by the Company and conform to the description thereof in the Registration Statement and Prospectus. No shareholder shall have any preemptive or similar rights to Securities unsubscribed after the Offer Period. As of Effective Date, the Company does not have any outstanding option to purchase, or any rights or warrants to subscribe for, or any securities or obligations convertible into, or any contracts or commitments to issue or sell, any securities, any shares of capital stock of any subsidiary or any such warrants, convertible securities or obligations.

[6.7.] Except as disclosed to the Underwriter before filing of the Registration Statement and Prospectus with the SEC and the Exchange, or those indicated in or clearly contemplated in the Registration Statement and the

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Prospectus, subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus and as of completion of the Rights Offering and listing of the Offer Shares, the Company and its Subsidiaries have not incurred any liabilities or obligations, direct or contingent, or entered into any transactions, not in the ordinary course of business, that are material to the Company and its Subsidiaries taken as a whole, and there has not been any material change in the capital stock, interests, short-term debt or long-term debt of the Company or any of its Subsidiaries, or any material adverse change, or any development involving a prospective material adverse change, in the condition (financial or other), business prospects, net worth or results of operations of the Company and its Subsidiaries.

6.6.[6.8.] Except as disclosed to the Underwriter before filing of the Registration Statement and Prospectus with the SEC and the Exchange, or set forth in the Registration Statement and Prospectus, as of Effective Date, there is no pending or, to the knowledge of the Company, threats of any action, suit or proceeding against or affecting the Company or any of its Subsidiaries or any of their respective directors and officers in their capacity as such, or any of the mining permits and applications identified in the Prospectus before the Mines and Geosciences Bureau, the Department of Environment and Natural Resources, or before any court, the Commission, the Exchange, any other regulatory body, administrative agency or other governmental body, domestic or foreign, wherein an unfavorable ruling, decision or finding might result in any material adverse change in the condition (financial or other), business prospects, net worth or results of operations of the Company and its Subsidiaries taken as a whole, or materially and adversely affect the properties or assets of the Company and its Subsidiaries taken as a whole.

[6.9.] Since the respective dates as to which information may have been given in the Registration Statement and the Prospectus, as of the completion of the Rights Offering and listing of the Offer Shares, and except as otherwise stated therein, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock.

6.7.[6.10.] All Contracts executed and delivered on or before the date hereof and as of Effective Date, to which the Company or any Subsidiary of the Company is a party have been duly authorized, executed and delivered by the Company or such Subsidiary, constitute valid and binding agreements of the Company or such Subsidiary and are enforceable against the Company or such Subsidiary in accordance with the terms thereof, constitute valid and binding agreements of the Company or such Subsidiary and be enforceable against the Company or such Subsidiary in accordance with the terms thereof, except as disclosed or discussed in the Registration Statement and the Prospectus.

6.8.[6.11.] The Company has the corporate power and authority to enter into this Agreement. This Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and binding agreement of the Company and is enforceable against the Company in accordance with the terms hereof. The execution, delivery and the performance of this Agreement and the consummation of the transactions herein contemplated will not result in the creation or imposition of any lien, charge or encumbrance upon the properties or

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any of the assets of the Company or any of its Subsidiaries pursuant to the terms or provisions of, or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or give any other party a right to terminate any of its obligations under, or result in the acceleration of any obligation under, the articles of incorporation of the Company or by-laws of the Company, the articles of incorporation or by-laws of any of the Company's Subsidiaries, or any Contract, or violate or conflict with any judgment, ruling, decree, order, statute, rule or regulation of any court or other governmental agency or body applicable to the Company, or any of its Subsidiaries, or business or properties of the Company or any of its subsidiaries, except insofar as would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. No consent, approval, authorization or order of, or filing with, any court or governmental agency or body, is required for the consummation of the transactions contemplated by this Agreement or in connection with the issuance or sale of the Securities by the Company, except such as may be required under the Applicable Laws and Exchange Rules, and except where failure to so obtain would not have a material adverse effect on the Company and its Subsidiaries taken as a whole. The Company has the power and authority to authorize, issue, offer and sell the Securities, as contemplated by this Agreement.

6.9.[6.12.] Each of the Company and its Subsidiaries has, as of the date of execution of this Agreement and the completion of the Rights Offering and listing of the Offer Shares, complied in all material respects with all laws, regulations and orders applicable to it or their respective businesses and properties where the failure to comply would, individually or in the aggregate, have a material adverse effect on the Company and its Subsidiaries taken as a whole; neither the Company nor any of its Subsidiaries is, and upon consummation of the Rights Offering, none of them will be, in default under any Contract, the violation of which would individually or in the aggregate have a material adverse effect on the Company and its Subsidiaries taken as a whole, and no other party under any such Contract to which the Company or any of its Subsidiaries is a party is, to the knowledge of the Company, in default in any material respect thereunder; the Company is not in violation of its articles of incorporation or by-laws; except as disclosed in the Prospectus, the Company and each of its subsidiaries and related companies have all governmental licenses, permits, consents, orders, approvals and other authorizations required to carry on its business as contemplated in the Prospectus, and none of them has received any notice of proceedings relating to the revocation or modification of any such governmental license, permit, consent, order, approval or other authorization which, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would materially and adversely affect the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its Subsidiaries.

6.10.[6.13.] The Company and its Subsidiaries, as applicable, as of Effective Date, have good title to its assets including mining permits and mining rights and are free from any and all liens, charges, encumbrances, claims or restrictions whatsoever.

[6.14.] As of the date hereof and the completion of the Rights Offering and listing of the Offer Shares, there is no pending or, to the Company's

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knowledge, threatened condemnation, zoning change, environmental or other proceeding or action that will in any material respect affect the size of, use of, improvements on, construction on, or access to the exploration permit/s, mining permit/s, and areas covered thereby or any other application for mining permits and licenses, except for such proceedings or actions disclosed to the Underwriter before filing of the Registration Statement and Prospectus with the SEC and the Exchange, that would not individually or in the aggregate have a material adverse effect on the condition, financial or otherwise, or on the earnings, business affairs or business prospects of the Company and its Subsidiaries taken as a whole.

6.11.[6.15.] As of Effective Date, the Company and each of its Subsidiaries (i) will be in compliance in all material respects with any and all applicable laws and regulations relating to the protection of human health and safety (hereinafter “Environmental Laws”), including those relating the Hazardous Materials (as defined below); (ii) will have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) will be in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals are otherwise disclosed in the Prospectus.

6.12.[6.16.] As of the date hereof and the completion of the Rights Offering and listing of the Offer Shares, none of the Company or any or its Subsidiaries has at any time, handled, buried, stored, retained, refined, transported, processed, manufactured, generated, produced, spilled, allowed to seep, leak, escape or leach, or be pumped, poured, emitted, emptied, discharged, released, injected, dumped, transferred or otherwise disposed of or dealt with, Hazardous Materials (as hereinafter defined) on, to, above under, in, into or from its properties and areas covered by any exploration permit, mining permit and applications therefore held or filed by the Company or any of its Subsidiaries, except as disclosed in the environmental reports previously delivered to the Underwriter or its counsel or referred to in the Prospectus, or such as would not individually or in the aggregate have a material adverse effect on the Company and its Subsidiaries. Neither the Company nor any of its Subsidiaries intends to use its properties or areas covered by any of their exploration permit/s and mining permit/s and applications, for the purpose of handling, burying, storing, retaining, refining, transporting, processing, manufacturing, generating, producing, spilling, seeping, leaking, escaping, leaching, pumping, pouring, emitting, emptying, discharging, releasing, injecting, dumping, transferring or otherwise disposing of or dealing with Hazardous Materials, except as allowed by law and described or disclosed in the Prospectus.

[6.17.] As of the date hereof and the completion of the Rights Offering and listing of the Offer Shares, none of the Company or any of its Subsidiaries, except as described or disclosed in the Prospectus, has received notice of, or has knowledge of any occurrence or circumstance which, with notice or passage of time or both, would give rise to, any claim under or pursuant to any Environmental Law, pertaining to Hazardous Materials, hazardous or toxic waste

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or substances on or originating from any of its properties or the areas covered by its exploration permit/s, mining permit/s and applications.

As used herein, "Hazardous Materials" shall include, without limitation, any flammable materials or explosives, petroleum or petroleum-based products, radioactive materials, hazardous wastes, hazardous or toxic substances, or related materials, asbestos or any material prohibited by any applicable law to be used on, applied, stored or kept within, properties of the Company and its Subsidiaries or areas covered by its exploration permit/s, mining permit/s and applications.

6.13.[6.18.] As of the date hereof and the completion of the Rights Offering and listing of the Offer Shares, in the ordinary course of its business, each of the Company and its Subsidiaries conducts a periodic review of the effect of Environmental Laws on its business, operations and properties in the course of which it identifies and evaluates associated costs and liabilities (including, without limitation, any capital or operating expenditures required for investigation, clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties). On the basis of the said reviews conducted, the Company has reasonably concluded that such associated costs and liabilities would not individually or in the aggregate, have a material adverse effect on the Company and its Subsidiaries taken as a whole.

6.14.[6.19.] The Company has not distributed and will not distribute any offering material in connection with the Offering other than the Registration Statement, the Prospectus or other materials, if any, permitted by the Commission and the Exchange and approved by the Underwriter.

[6.20.] The Company, as of the date hereof, maintains and, until completion of the Rights Offering and listing of Offer Shares, shall maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (iii) access to financial and corporate books and records is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

6.15.[6.21.] All statistical or market-related data included in the Registration Statement and the Prospectus, if any, are based on or derived from sources that the Company reasonably believes to be reliable and accurate, and the Company has obtained the written consent to the use of such data from such sources to the extent required.

6.16.[6.22.] The section entitled “Management’s discussion and analysis” in the Registration Statement and the Prospectus describes accurately and fully the Company’s financial condition and results of operation in accordance with the Applicable Laws and Exchange Rules.

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6.17.[6.23.] The Company has filed an application for listing of the Securities in the Exchange covering the Securities which application is as of signing hereof pending and not denied or rejected.

6.18.[6.24.] Neither the Company nor any of its Subsidiaries is involved in any material labor dispute nor, to the best knowledge of the Company after due inquiry and investigation, is any such dispute threatened.

2.[7.] Covenants. The Company covenants and agrees with the Underwriter that:

7.1. The Company shall, upon receiving the conformity of the Underwriter, cause the Registration Statement and Prospectus to be filed as required under Section 6.1 hereof; it will notify the Underwriter promptly of the time when any subsequent amendment to the Registration Statement has become effective or any supplement to the Prospectus has been filed and of any request by the SEC and/or the Exchange, as the case may be, for any amendment or supplement to the Registration Statement or Prospectus or for additional information; it will prepare and file with the SEC and/or the Exchange promptly upon the Underwriter's request, any amendments or supplements to the Registration Statement or Prospectus that, in the Underwriter's opinion, may be necessary or advisable in connection with the Rights Offering or the distribution of the Securities by the Underwriter; and it will not file any amendment or supplement to the Registration Statement or Prospectus without the written conformity or consent of the Underwriter.

7.2. The Company shall advise the Underwriter, promptly after it shall receive notice or obtain knowledge thereof, of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceeding intended to produce like effect; and shall promptly use its best efforts to prevent the issuance of any stop order or to obtain the withdrawal of any stop order issued.

7.3. Within the time during which the Registration Statement and Prospectus relating to the Securities is required to be delivered and disseminated under the Applicable Laws and Exchange Rules, the Company shall comply with all requirements imposed upon it by the Applicable Laws and Exchange Rules, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Securities as contemplated by this Agreement, the Registration Statement and the Prospectus. If during such period any event occurs as a result of which the Registration Statement or Prospectus would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances then existing, not misleading, or if during such period it is necessary to amend or supplement the Registration Statement or Prospectus to comply with any law or legal requirement, or the Exchange Rules, the Company shall promptly notify the Underwriter and will amend or supplement the Registration Statement or Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance.

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7.4. As soon as the same is available, and thereafter from time to time for such period as in the opinion of the Underwriter a prospectus is required by the Applicable Laws and/or Exchange Rules to be delivered in connection with sales by the Underwriter of the Securities, the Company shall expeditiously deliver to the Underwriter and its counsel and any stock broker or dealer, when reasonably requested by the Underwriter, without charge, as many copies of the Prospectus (and of any amendment or supplement thereto). The Company consents to the use of the Registration Statement and Prospectus (and of any amendment or supplement thereto) in accordance with the Applicable Laws and Exchange Rules, both in connection with the Rights Offering and for such period of time thereafter as the Registration Statement or Prospectus is required by law or Exchange Rules to be delivered in connection with sales of the Securities by the Underwriter or any stock broker or dealer.

7.5. If at anytime any event shall occur that in the judgment of the Company or in the opinion of counsel for the Underwriter is required to be set forth in the Prospectus (as then amended or supplemented) or should be set forth therein in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary to supplement or amend the Prospectus to comply with the Applicable Laws or any other law, or the Exchange Rules, the Company shall forthwith prepare and file with the Commission an appropriate supplement or amendment thereto, and will expeditiously furnish to the Underwriter reasonable number of copies thereof. In the event that the Registration Statement or Prospectus will be amended or supplemented, the Company, when requested by the Underwriter, shall promptly make the appropriate disclosures on the matters to be covered by the proposed amendment or supplement subject to such limitations provided by the Applicable Laws or any other law, and Exchange Rules.

[7.6.] The Company shall apply the net proceeds from the Rights Offering in the manner set forth in the Prospectus under "Use of Proceeds" or similar sections or provisions thereof; provided, that the Company may amend such "Use of Proceeds" in accordance with the requirements of Applicable Laws and Exchange Rules and as approved by the SEC and/or the Exchange.

7.6.[7.7.] The Company shall not at any time, directly or indirectly, take any action designed, or which might reasonably be expected to cause or result in, or which will constitute, artificial movement or stabilization of the price of the Securities to facilitate the sale or resale thereof.

[7.8.] The Company shall fully and strictly comply with the terms and conditions of the Rights Offering as contained in the Prospectus or any material distributed in connection with the Rights Offering, approved by the Underwriter, and allowed to be distributed by the SEC and the Exchange.

7.7.[7.9.] The Company shall, as soon as allowed by the SEC but in no case beyond five (5) days from the end of the Offer Period, file with the SEC the corresponding application, with complete supporting documents, for approval of the increase in the Company’s authorized capital stock to support the Rights Offering and the corresponding amendment of its Articles of Incorporation.

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3.[8.] Due Diligence

8.1 The Underwriter hereby acknowledges that the Underwriter, its advisors and representatives have conducted a due diligence inquiry with respect to the Company, its Subsidiaries, business/es and such other matters it has deemed relevant for purposes of the Registration Statement and Prospectus and of performing its obligations under this Agreement (the “Due Diligence”).

8.2 The Underwriter shall keep confidential and shall not disclose to any third party, the results of the Due Diligence, unless required by the SEC and/or the Exchange, and except when disclosure is made to legal, financial or technical advisers performing services to the Underwriter in connection with this Agreement and the Due Diligence; provided, however, that the Underwriter shall ensure that such advisers are bound by this confidentiality provision.

4.[9.] Indemnification and Contribution.

9.1. The Company hereby agrees to indemnify and hold harmless the Underwriter, the directors, officers, stockholders, and representatives thereof as follows:

[a)] Against any and all loss, liability, claim, actual damage and expense whatsoever, as incurred, arising out of any untrue statement of a material fact contained in the Registration Statement or the Prospectus (or any amendment thereto) or any material distributed by the Company in connection with the Rights Offering, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included in the Prospectus (or any amendment or supplement thereto), or the omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, resulting from the failure or refusal of the Company to provide documents or information required by the Underwriter for or during Due Diligence or required to fully inform the Underwriter of the conditions and transactions of the Company;

a)[b)] against any and all loss, liability, claim, actual damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced before, on or after execution of this Agreement, based upon any such untrue statement or omission, or any such alleged untrue statement or omission in the Registration Statement or Prospectus;

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b)[c)] against any and all expense whatsoever, as incurred (including the reasonable fees and disbursements of counsel chosen by the Underwriter), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding or any claim whatsoever commenced by any governmental agency or body, based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (a) or (b) above; provided, however, that the indemnities provided under paragraphs (a) to (c) above shall not apply to any loss, liability, claim, damage or expense to the extent (i) arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by the Underwriter expressly for use in the Registration Statement, Prospectus or material (or any amendment thereto), unless the written information was given on the basis of documents provided or not disclosed by the Company to the Underwriter, or (ii) resulting solely from an untrue statement of a material fact contained in, or the omission of a material fact from, the Registration Statement, Prospectus or other material, which untrue statement or omission was completely corrected in any amended Registration Statement, Prospectus or material if the Underwriter sold Securities to the person alleging such loss, claim, liability, expense or damage without sending or giving, at or prior to the written confirmation of such sale, a copy of the amended Registration Statement, Prospectus or other material copies of which were previously furnished by the Company to the Underwriter within a reasonable amount of time prior to such sale or such confirmation, and the Underwriters failed to deliver the corrected Registration Statement, Prospectus or other material, if required by law to have so delivered it and if delivered would have corrected the default giving rise to such loss, claim, liability expense or damage, or (iii) resulting solely from an untrue statement of a material fact contained in, or the omission of a material fact from, the Registration Statement, Prospectus or other material, which untrue statement or omission was previously disclosed prior to the filing of the Registration Statement and Prospectus with the SEC and the Exchange, or based on documents or information provided, to the Underwriter during Due Diligence or on such other occasions prior to the filing of the Registration Statement and Prospectus with the SEC and the Exchange; and

c)[d)] against any and all loss, liability, claim, actual damage and expense whatsoever, as incurred, arising out of or connected with the termination of this Agreement by the Underwriter under Sections 9.3 and 9.5 of this Agreement.

9.2. The Underwriter agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement, Prospectus or other material distributed in accordance with this

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Agreement, against any and all loss, liability, claim, damage and expense described in the indemnity contained in Subsection 8.1. above, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement, Prospectus or other material (or any amendment thereto), in reliance upon and in conformity with written information furnished to the Company by the Underwriter expressly for use in the Registration Statement, Prospectus or other material (or any amendment thereto), unless such written information furnished by the Underwriter is based on documents provided to the Underwriter during Due Diligence or material documents or information withheld by the Company from the Underwriter.

The Underwriter further agrees to indemnify and hold harmless the Company against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of or connected with the termination of this Agreement by the Company under Section 9.5 of this Agreement.

9.3. Each indemnified party shall give notice as promptly as reasonably practicable to the indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of the party indemnified pursuant to Subsection 8.1 above, counsel to the indemnified party shall be selected by the Underwriter, and, in the case of the party indemnified pursuant to Subsection 8.2 above, counsel to the indemnified party shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying party be liable for fees and expenses of more than one counsel (separate from its own counsel) for the indemnified party in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified party, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, or any claim whatsoever, commenced before, on or after the execution of this Agreement, unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim, and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

9.4. The indemnifying party shall be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, to assume the defense of the action, with counsel satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party shall not be liable to the indemnified party for any legal or other expenses except as provided below and except for the reasonable costs of investigation subsequently incurred

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by the indemnified party in connection with the defense. The indemnified party shall have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel shall be at the expense of such indemnified party unless (i) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (ii) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (iii) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party), or (iv) the indemnifying party has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party. An indemnifying party shall not be liable for any settlement of any action or claim effected without its written consent (which consent shall not be unreasonably withheld).

9.5. The relative fault of the Company on the one hand and the Underwriter on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriter and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

9.6. The aggregate amount of losses, liabilities, claims, actual damages and expenses incurred by an indemnified party and referred to above shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, or any claim whatsoever, commenced before, on or after the execution of this Agreement, based upon such untrue or alleged untrue statement or omission or alleged omission.

9.7. Notwithstanding the provisions of this Section 9, the Underwriter shall not be required to indemnify the Company any amount in excess of the amount by which the total price at which the Securities underwritten by it and offered exceeds the amount of any damages which the Underwriter has otherwise been required to pay.

5.[10.] Termination. This Agreement may be terminated, as follows:

10.1 Upon mutual agreement of the Parties.

[10.2.] By the Underwriter, upon written notice of termination to the Company, upon occurrence of any of the following: (i) any material adverse change or any development involving a prospective material adverse change in or affecting the condition, financial or otherwise, of the Company and its Subsidiaries taken as a whole or the earnings, business affairs, management or

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business prospects of the Company and its Subsidiaries taken as a whole, whether or not arising in the ordinary course of business, (ii) any outbreak or escalation of hostilities or other national or international calamity or crisis or change in economic or political conditions, if the effect of such outbreak, escalation, calamity, crisis or change on the financial markets of the Philippines, in the reasonable judgment of the Underwriter, make the Rights Offering or underwriting of the Securities impracticable, (iii) suspension of trading in the shares of stock of the Company on the Exchange or limitation on prices (other than limitations on hours or numbers of days of trading) for shares of stock of the Company on the Exchange, (iv) the enactment, publication, decree or other promulgation of any law, regulation, rule or order of any court or other governmental authority, or the Exchange, which in the reasonable opinion of the Underwriter materially and adversely affects or will materially or adversely affect the business or operations of the Company and its Subsidiaries taken as a whole, (v) declaration of a banking moratorium by Philippine authorities, (vi) a material disruption in commercial banking or securities settlement or clearance services in the Philippines, if in the reasonable opinion of the Underwriter, the effect of such disruption is so material or adverse that it makes the Rights Offering or delivery of the Securities on the terms and in the manner contemplated in the Prospectus impracticable, or (vii) the taking of any action by any Philippine government body or agency in respect of its monetary or fiscal affairs which in the reasonable opinion of the Underwriter has a material adverse effect on the securities markets in the Philippines.

10.2.[10.3.] By the Underwriter upon written notice to the Company, in the event of failure of the Company to make the amendment/s to the Registration Statement and/or the Prospectus in accordance with Sections 7.1 and 7.5 hereof.

10.3.[10.4.] By any Party upon written notice to the other, for breach of any obligation under this Agreement, upon the lapse of fifteen (15) days from receipt by the Party-in-breach of a notice of breach from the complaining Party without the Party-in-breach remedying the breach, unless the breach is incapable or remedy, to the satisfaction of the complaining Party.

6.[11.] Consequences of Termination. Upon termination of this Agreement by the Underwriter, and without prejudice to payment of fees of the Underwriter under Section 3 hereof, all obligations of the Underwriter under this Agreement shall cease and the Underwriter shall have no further obligations to the Company. In the event that termination by the Underwriter is made before approval by the Commission of the Registration Statement and Prospectus and by the Exchange of the Prospectus, the said Registration Statement and Prospectus shall be amended to change the underwriter of the Rights Offering to one other than the Underwriter herein, at the sole cost and expense of the Company and without liability whatsoever on the part of the Underwriter, and the Company shall in such event indemnify the Underwriter and render the Underwriter free and harmless from any penalties or other liabilities imposed upon it by the Commission, the Exchange or any other government agency or regulatory body, without prejudice to indemnification for damages under Section 8 hereof.

The provisions of this Section 11 shall apply only in cases of termination of the Agreement by the Underwriter in accordance with Sections 10.2, 1.3, and 10.4 of this Agreement.

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7.[12.] Representations and Indemnities to Survive. Except where a period or a limited time has been expressly provided to govern the provisions of this Agreement, the respective agreements, representations, warranties, indemnities and other statements of the Company or its officers, and of the Underwriter set forth in or made pursuant to this Agreement shall remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or any of their officers, directors, and shall survive delivery of and payment for the Securities.

8.[13.] No Fiduciary Relationship. The Parties hereby acknowledge that the Underwriter is acting solely as underwriter in connection with the purchase and sale of the Securities acting pursuant to a contractual relationship created solely by this Agreement entered into on an arm’s length basis, and in no event do the Parties intend that the Underwriter act or be responsible as a fiduciary to the Company or any shareholder of the Company or any other person in connection with any activity that the Underwriter may undertake or have undertaken in furtherance of the purchase and sale of the Securities, either before or after the date hereof. The Underwriter hereby expressly disclaim any fiduciary or similar obligations to the Company or and shareholder thereof, either in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions. The Parties agree that they are each responsible for making their own independent judgments with respect to any such transactions and that any opinions or views expressed by the Underwriter to the Company regarding such transactions, including, but not limited to, any opinions or views with respect to the price or market for the Company’s securities, do not constitute advice or recommendations to the Company or any stockholder thereof. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company or any stockholder thereof may have against the Underwriter with respect to any breach or alleged breach of any fiduciary or similar duty to the Company or any stockholder thereof in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions.

9.[14.] Miscellaneous Provisions.

14.1 The headings in this Agreement are inserted for convenience of reference only and shall not limit or affect the interpretation of the provisions hereof. Words denoting the singular shall include the plural, when the context so requires, and vice versa.

14.2 Any notice, demand or other communication to be given or made under this Agreement shall be in writing and delivered or sent to each Party during office hours on a business day by personal delivery at its address set out below, or such other address as the addressee has by three [3] days’ prior written notice specified to the other Party:

To the Company: COMPANY NAMEAddress

Attention : The President

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To the Underwriter: UNDERWRITER NAMEAddress

Attention: The President

Any notice, demand or other communication so addressed to the relevant Party shall be deemed to have been delivered if given by letter, when actually delivered to the relevant address.

14.3 If at any time any provision of this Agreement or any document executed in connection herewith is or becomes illegal, invalid or unenforceable in any respect under any law, the legality, validity or enforceability of the remaining provisions under this Agreement shall not be affected thereby; provided, however, that the transactions contemplated in this Agreement may still be fully completed and implemented.

14.4 Any amendment or waiver of any provision of this Agreement shall only be effective if made in writing and signed by the Parties.

14.5 No Party may assign its rights and/or obligations hereunder without the prior written consent of the other Party.

14.6 This Agreement and the rights and obligations of the Parties hereunder shall be governed by and construed in accordance with the laws of the Republic of the Philippines.

14.7 This Agreement has been jointly prepared by the Parties and the terms hereof shall not be construed in favor of or against any Party on account of his/her participation in such preparation.

14.8 This Agreement shall be binding upon and inure to the benefit of the Parties, their successors-in-interest and assigns.

14.9 This Agreement sets forth the entire agreement and understanding between the Parties, and supersedes any and all other inconsistent understandings, negotiations or agreements with respect to the subject hereof.

14.10 This Agreement may be signed in any number of counterparts. Any single counterpart or a set of counterparts signed, in either case, by the Parties hereto shall constitute a full and original agreement for all purposes.

IN WITNESS WHEREOF, this Agreement has been executed on the date and at the place first above-written.

COMPANY

By:

UNDERWRITER

By:

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Witnesses:

____________________________ ______________________________

REPUBLIC OF THE PHILIPPINES ))S.S.

ACKNOWLEDGMENT

BEFORE ME, a Notary Public for and in __________, this ____ day of __________, personally appeared the following persons:

Name Competent evidence of Identity

ID No.(with signature &

photograph)

Com. Tax Cert. No./Issued At/On

Companyrepresented by:

Underwriterrepresented by:

known to be and to me known to be the same persons who executed the foregoing Underwriting Agreement and who acknowledged to me that the same is their free and voluntary act and deed and official act of the corporations represented.

The said instrument, consisting of ______ (___) pages, including this page where the Acknowledgment is written, has been signed by the Parties and their instrumental witnesses on each and every page thereof and sealed with my notarial seal.

WITNESS MY HAND AND SEAL, on the date and at the place first above-written.

Doc. No. ______;Page No. ______;Book No. ______;Series of ______.

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underwriting agreement (1)

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