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CONTRACT FOR

THE

PROVISION

AUTOMATED ELECTION SYSTEM

FOR

THE

MAY

10,2010

SYNCHRONIZED NATIONAL

AND

LOCAL ELECTIONS

KNOW

ALL

MEN

THESE

PRESENTS:

This Contract, made and entered into this 10th day of July,2009, in Manila, Philippines, by and between:THE COMMISSION ON ELECTIONS,

independentconstitutional agency of the Republic of the Philippinesmandated to enforce and administer election laws, withprincipal ofice address

Palacio del Gobernador, PostigoStreet, Intramuros, Manila, Philippines, hereinafter referredto

"COMELEC", represented herein by its Chairman, Hon.Jose

Melo,SMARTMATIC TIM CORPORATION,

corporation dulyorganized and existing under and by virtue of the laws of theRepublic of the Philippines, with office address at GroundFloor, King's Court Building

2129 Dela Rosa St., DonChino Roces Avenue, Makati City, hereinafter referred to

the "PROVIDER", represented herein by its duly authorizedrepresentative and Chairman of the Board, Mr. Juan

Villa,

Jr..WITNESSETH

WHEREAS, COMELEC is undertaking a modernizationprogram of the Philippine Electoral Systemwhich includes theautomation of the counting, transmission and canvassing of votesfor the May

10, 2010

Synchronized National and Local Elections,

with

systems integration and over-all project management

comprehensive and well-managed manner consisting of three

(3)

Components, (hereinafter called the "Project")

follows:Component

Paper-Based Automated ElectionSystem (AES)1-A. Electioh Management System (EMS)1-B. Precinct-Count Optical Scan [PCOS) System1-C. Consolidation/ Canvassing System (CCS)

Component

Provision for Electronic,Transmission of

Election

Results

using

Public

Telecommunications Network

nAn

/Pic

Execution

Copy

component

Overall Project Management

WHEREAS,

the joint venture of Total InformationManagement Corporation

(TIM)

and Smartrnatic InternationalCorporation (SMARTMATIC) has passed the eligibility, technicaland financial screening conducted. by the Special Bids and AwardsCommittee (SBAC) and its Technical Working Group (TWG)composed of members from COMELEC, Department of Scienceand Teclinology (DOST) and the National Computer Center (NCC)in an open, competitive, public bidding;WHEREAS; on June

2009, COMELEC promulgatedResolution No. 8608 approving "the report/recommendation of

the

SBAC dated June

2009 confirming TIM/SMARTMATIC

thebidder with the 'Lowest Calculated Responsive Bid' and awarding"the contract for the automation of the elections on May

10,

2010to said joint ventyre";

WHEREAS,

pursuant to the Joint Venture Agreementsubmitted by TIM and SMARTMATIC

part of their EligibilityDocuments, TIM and SMARTMATIC incorporated

joint venturecompany, the PROVIDER herein, to enter into this Contract withCOMELEC for the Project;

NOW,

HEREFORE, for and in consideration of the foregoingpremises and the mutual covenants hereinafter set forth, theparties agree

follows:

ARTICLE

DEFINITIONS

The words and phrases herein used shall have the followingmeanings:

1.1

Bidding DocumentsBidding Documents

refers to the Request for Proposal

(RFP),

alsoknown

the Terms of Reference, issued by COMELEC, includingall Bid Bulletins.

1.2

Contract

refers to this agreement by and between COMELEC, onone hand, and the PROVIDER, on the other hand, together with allits Annexes .or "Contract Documents", for the Project.

1.3

Continuity PlanContinuity Plan

list of contingency measures, and the policiesfor activation of Such, that are put in place to ensure continuousoperation of the AES.

shall

cover rislts to the AES at all points inthe process such that a failure of elections, whether

voting,counting or consolidation may be avoided.

Execution Copy

is also

logistical plan that presents

how

he parties will recoverand restore partially or completely' interrupted critical and/orurgent functions within a predetermined time after

disaster orextended disruption.

Customization

means -modification, conversion or adaptation ofthe software to suit the requirements of Philippine laws and generalinstructions of COMELEC on the conduct of

the

elections.

1.5

DelayDelay

means any disturbance or interruption and/or unavailabilityof any Service to be used and necessary for the Project'srequirements, caused

any of the following:

malfunction of any portion of the Project and/or theinability of any of the leased or purchased Equipmentto provide Services adequate to meet its requirementsin any precinct or canvassing center; orb)failure occurring in any of the leased or purchasedEquipment; orc)non-availability of other Project-related resources; ord)other causes directly attributable to the fault of thePROVIDER and/or COMELEC; or

other causes directly attributable to

Force

Majeure.

1'6

Development SetDevelopment set

refers to the set of twenty

(20)

Precinct CountOptical Scan

(PCOS)