CONTRACT OF SERVICES FOR ELECTION RESULTS SECURE TRANSMISSION SOLUTIONS, MANAGEMENT AND RELATED SERVICES (ERSTSMRS) INCLUDING DATA CENTER REQUIREMENTS FOR THE MAY 13, 2019 NATIONAL AND LOCAL ELECTIONS | (SBAC REFERENCE NO. AES2019NLE-04-ERS) KNOW ALL MEN BY THESE PRESENTS: ‘This Contract, made and entered into this 9 day of November 2018, in the City of Manila, Philippines, by and between: THE COMMISSION ON ELECTIONS, 2n independent ‘constitutional agency of the Republic of the Philippines mandated to enforce and administer election laws, with office address at Palacio del Gobernador, Postigo Street, Intramuros, Manila, Philippines, hereinafter referred to as “COMELEC’, represented herein by its Chairman, HON. SHERIFF M. ABAS; and SMARTMATIC TIM CORPORATION, a corporation duly organized and existing under and by virtue of the laws of the Republic of the Philippines, with office address at 16" Floor, ACCRALAW Tower, Second Avenue comer 30" Street, Bonifacio Global City, Taguig City, hereinafter referred to as the “PROVIDER’, represented herein by its Director and Authorized Representative, JANE V. COO; ‘The COMELEC and the PROVIDER shall hereinafter be individually referred to as a “Party” and collectively as the 4 patties” WITNESSETH Committee (SBAC) conducted the Opening of Bids for Election Results Secure Transmission "Solutions, Management. and Related Services, Including [Data Center Requirements for the AES 2019 (the "ERSTSMRS Project’) Paget 30 \ | WHEREAS, on July 18, 2018, the Special Bids and Awards éWHEREAS, per notice dated July 30, 2018, the SBAC declared the PROVIDER as the bidder wit the single calculated bid for the ERSTSMRS Project; WHEREAS, per SBAC Resolution No. 09-2018 dated September 11, 2018, the SBAC deciared the PROVIDER as the Bidder with the Single Calculated Responsive Bid and, accordingly, recommended to. the COMELEC Ein banc the issuance of the corresponding Notice of Award, after its eligiblity documents had been validated and verified, and its compliance with the legal, financial and technical requirements of the bid had been ascertained during the post-qualification process; miseReas through its Minute Resolution No. 18-0813. dated September 12, 2018, the COMELEC &7 Banc approved SBAC Resolution No. (09-2018 dated September 11, 2018, awarding, among others, the contract for the ERSTSMRS Project to the PROVIDER in the amount of One Billion One Hundred Seventy Eight Million Twenty Two Thousand Four Hundred Twenty Seven Pesos and 11/100 (PHP 4,478,022,427.11); WHEREAS, the PROVIDER received the Notice of Award (Annex "A” Of this Contract) on September 27, 2018 and posted the corresponding performance security on October 8, 2018in the form of a Letter of Credit Issued by ANZ Bank emounling W Fifty Elght Million Nine Hundred One Thousand and One Hundred Twenty Two Pesos (PhPS58,901,122.00), copy of which is attached as Annex "B"; NOW, THEREFORE, for and in consideration of the foregoing premises and the mutual covenants hereinafter set forth, the parties herein aes as flow: | ARTICLE 1 DEFINITIONS The words and phrases herein used shall have the following meanings: 11 Acceptance refers to the acceptance of the rendered Services and Equipment after the conduct of the applicable inspection and testing procedures for all the Services and Goods under this Contract, and the issuance of the corresponding acceptance forms as provided in ‘Annex "C", ie, cettcate of acceptance, upon which such Services and Goods shall be considered accepted. Page 2 030 4 a \12 13 14 15 16 17 18 ‘Annexes of this Contract refer to the following documents: ae Annex "D1" + Bidding Documents issued by the COMELEC nex "E” ~ Bill of Materials pit iT were, Seta neares — fear fnnexW" = Operational spony Mate Automated Election System (AES) refers (0 a system using ae technology which has been demonstrated in the voting, counting, consolidating, canvassing, and transmission of election Its, and other electoral processes. Bill of Materials refers to the list of Goods, their descriptions and quantities attached as Annex "E" Certificate of Final Acceptance refers to the document to be issued by the COMELEC within twenty (20) working days from the ‘submission by the PROVIDER of the billing for the last milestone, Provided that all certificates of acceptance have been issued for all the milestones. ‘Commercial Confidentiality refers to safeguarding the privacy of sensitive or confidential commercial information such as intellectual property, trade secrets, commercial confidences and the like. Contract refers to this agreement for the ERSTSMRS Project ieen the Parties, inclusive of all the Annexes, Contingency Plan refers to the list of contingency measures, and the policies for activation of such, that are put in place to ensure the ». Page 3 0f 30 \\ 4)1.9 Contract Price refers to the price payable to the PROVIDER under Article 4.1.1 of this Contract for the full and proper performance of its ‘contractual obligations, 110 Data Center refers to the crrlzed repostry of the stage a ond ether deve ous nthe ASTON foe AS me 11 Delay refers o any csurbance or terupton anor visit OF any Serves to be prod or Good be several sad od Wa ees forthe ESTEMNS Pro eer do i eyof eon cae ) failure to provide and deliver any of the Services and Goods to adequately meet the requirements in the Procurement Documents; b) non-availability of other ERSTSMRS Project-related resources; 2) Sherine sore tea obs ROMER | loc Cone of ther cuss dey arta o Fouts erento hse ‘causes beyond the control of the COMELEC and the PROVIDER. 1.12 Designated Warehouse refers to the central warehouse and data Center of the COMELEC where the PROVIDER will deliver the Goods for 7 Purpose of Acceptance. 1.13 Election Day refers to May 13, 2019. 4) 1.14 ERSTSMRS Project refers to COMELEC’s Election Results Secure Transmission Solutions, Management and Related Services, including Data Center Requirements for the AES 2019. 1.15 Financial Proposal refers to the financial bid submitted by the PROVIDER to COMELEC during the bidding process attached as Annex "D3". 1.16 Fortuitous Event refers to events which could not be foreseen, or Which, though foreseen, are inevitable. For this Contract, it shall include events considered as force majeure. Such events may include, but not timited to, “acts of government Page 9 \ |agences/strumertates in Its sovereign capacity, wars or lutions, fires, floods, epidemics, quarantine restrictions, and freight embargoes. It shal not include ordinary unfavorable weather condtions; and any other cause the effects of which could have been avoided with the exercise of reasonable digence by the PROVIDER, 117 ul-Tme Bass fs tothe operon of the ERSTSHRS Projet ‘+ During business hours on working days, in accordance with the ‘schedule of the COMELEC, except for the Data Center activities which will require extended working hours as needed, in respect of the period from the Date of effectivity of this Contract until May 11,2019; From May 12, 2019 until May 14, 2019, which shall be for ‘twenty four (24) hours a day; and During business hours on working days, in accordance wth the 7 sthedie of COMELEC, 2s moy be remired bythe ERSTSMRS Project, In respect of the perod tom May 15, 2019 unt preclaaton by the. National Board of ‘Camassers of the Sosng oF the 2019 NLE 1.38 General Instructions refer (u Uw rules and regulations issued by tthe COMELEC fn Banc for the implementation of Republic Act No. ‘9369 (RA 9369) with respect to the 2019 NLE. 1.19 Goods refer to the servers, electronic transmission devices, and Cother related equipment, both hardware and software, including all deliverable supplies, as presented by PROVIDER in their Technical {and Financial Proposals, and all other materials necessary to carry ‘out the ERSTSMRS Project; 120 implementing Unit far tothe CONELEC Project Management 4) Office (PMO). ‘and in an amount equal to a percentage of the total contract price furnished to the COMELEC to guarantee the full and faithful Performance of the PROVIDER of its obligations under this Contract, in accordance with the Procurement Documents. 1.21 Performance Security refers tothe security, in an acceptable form M SOMELEC, including all bet bulletins, and the Technical and Financial Proposals of the PROVIDER attached as Annexes *D1” to "D3" respectively. | Page $0620 \ | 1.22 ee Documents refer to the Bidding Documents issued y123 Project Implementation Calendar ofthe COMELEC fs othe ERSTSMRS Project timeline in relation to the calendar of activities of the COMELEC for the 2019 NLE as described in Annex "F”. 1.24 Project Site refers to the place or places named or designated by the COMELEC as stated in the Procurement Documents. 1.25 Services refer to all acts to be performed or provided by the PROVIDER to COMELEC, in connection with the ERSTSMRS Project Covered under this Contract and specifically defined in the Technical ‘and Financial Proposals, in accordance with the Procurement Documents. 1.26 Service Level Agreement refers to the commitment of the Parties for the implementation of the ERSTSMRS Project attached as Annex “er 127 re refers to the program or set of instructions contained in the System. 1.28 Technical Proposal refers to the technical bid submitted by PROVIDER to COMELEC during the bidding process attached as ‘Annex "D2" 1.29 Transmission refers to the ac of electronical transiting election rests "over ‘stances using. the tarsmsion” medio “and, the tansmisson network fr each Tansmissen Node, 2s sete nthe Procurement Documents. Transmssion Includes fornarang of the manual uped VEN rests rom the pen evel tte CCS tnd From the CCS to the sever 1.30 Transmission Media is any wireless, wired or satellite-based ‘connection, or 2 combination thereof; 1.31 Transmission Failure refers to the unsuccessful Transmission of election results using the Transmission Media, within twenty (20) Calendar days from the close of polls or upon proclamation of the winning candidates for Senators and Party-list by the COMELEC National Board of Canvassers, whichever is earlier. 1.32 Transmission Node refers to the Vote Counting Machine (VCM) and Consolidation/Canvassing System (CCS) servers where a transmission ‘media, as stated in the Procurement Documents, is attached in order to connect to the transmission network for purposes of transmitting election results. | Page 6 00 | 4) % \| 1.33 Updates refer to changes made to the Software, upon prior approval Of COMELEC, to improve the efficiency or effectiveness ofthe current Software functions including fies to existing or reasonably foreseeable technical bugs or errors. 1.34 Upgrades refer to changes made to the Software and/or hardware, ‘upon prior approval of COMELEC, which add one (1) or more new functions or a new version to the current Software and/or hardware that enhances the efficiency or effectiveness thereof, Unit to the Head of the COMELEC setting forth its findings as to the ce of grounds or causes for termination and explicitly stating its recommendation for the issuance of a Notice to Terminate. 1.35 vies Report refers to the report submitted by the Implementing 1,36 2039 NLE refers to the May 13, 2019 National and Local Elections. 2.1 This Contract shall take effect ("Date of Effectivity”) upon receipt by the PROVIDER ofthe Noi Lo Proved om COMELEC. ARTICLE 2 EFFECTIVITY 22 Theterm of this Contract begins from the Date of Eectvty and shal automatically expire upon the release ofthe Performance Secury, that Prejudice tothe surviving provisions of ts Contract ARTICLE 3 | SCOPE OF THE ERSTSMRS PROJECT 4) 3.1. ‘The scope of the ERSTSMRS Project shall include: (2) The provision of Services and Goods as listed in the Procurement Documents; (b) | Such other Goods, Services, and improvements to the above as may be necessary for the proper and timely execution and implementation of the ERSTSMRS Project as required in the Procurement Documents 3.2 The PROVIDER shall perform the Services and provide the Goods in ‘accordance with the Procurement Documents. Tt shall provide competent Project management support, technical manpower and efficient services. It ,shall ensure the proper, satisfactory and timely execution and completion of the ERSTSMRS Project in accordance with the Procurement Documents. ‘The PROVIDER shall be liable for al its obligations under this ERSTSMRS Project, and the performance of portions thereof by other persons or entities not parties to this Contract but subcontracted by the PROVIDER shall not relieve the PROVIDER of said obligations and concomitant liabilities, 33 ‘The PROVIDER agrees to deliver 100% secured electronic transmission from all: 3.3.1 Polling places to canvassing centers; Central Server and ‘Transparency Server; 3.3.2 Canvassing Server to the next level of canvassing and Central Server; 3.3.3 Central Server to Website server and back-up server; and 3.3.4 Transparency server to back-up server; 3.4 he following are considered sold to the COMELEC after the 2019 NNLE, upon delivery by Ue PROVIDER Trom the Designated Warehouse to the COMELEC: 3.4.1 Items identified in the Bill of Materials such as: Servers, Firewalls, Load balancers, and Switches. annicue 4 CONTRACT PRICE AND PAYMENT 4 4.1 CONTRACT PRICE 4.1.1 The COMELEC shall pay the PROVIDER the aggregate Contract Price of One Billion One Hundred Seventy Eight Million Twenty Two Thousand Four Hundred Twenty Seven Pesos and 11/100 (PHP 1,178,022,427.14), inclusive of all applicable taxes, subject to pertinent BIR rulings, for the purchase of the Services ‘and/or Goods under this Contract, as presented in the Technical and Financial Proposals. 4.1.2 The Contract Price shall be paid for Accepted Services and ‘Goods folowing the Schedule of Deliveries and Payment Milestones rsa \Cattached as Annex "H” pursuant to the Project Implementation Calendar of COMELEC and the Procurement Documents, ‘The delivery dates are subject to modifications as approved by the COMELEC Chairman or the Implementing Unit. 4.1.3 No payment, partial or final, shall be made except upon a certificate of acceptance issued by the COMELEC Chairman or the designated authorized signatory to the effect that the Services and Goods have been accepted, 4.1.4 Progress payment shall be made after the complete submission following documents: @ invoice billing or statement of account by the PROVIDER, together with progress reports on the works, Services and Goods completed to date; and b. certificate of acceptance issued by the COMELEC Chairman or | the Iter Unt wenn tn Gd) worng Gs om receipt ofthe invoice, ‘The Parties, recognizing the tight timelines and complex nature of this ERSTSMRS Project, shall endeavour to avoid any Delays in the delivery, billng and payient processes, 4.1.5 Payments shall be made within fifteen (15) working days by the COMELEC after submission of the invoice and milestone completion report by the PROVIDER, 4.1.6 The currency of payment to the PROVIDER under this Contract, shall be in Philippine pesos. ARTICLE 5 RESPONSIBILITIES OF THE PROVIDER 5.1 The PROVIDER shall deliver to COMELEC the Services and Goods as described in Article 3.1. 5.2. The PROVIDER shall deliver the Services and Goods in accordance with the Procurement Documents, attached as Annexes “D1” 5.3. The PROVIDER shall maintain and operate the ERSTSMRS Project on | Page 9 oF 30 o5.4. ‘The PROVIDER shall deliver the Goods to the Designated Warehouse ‘and/or the Designated Data Centers. Delivery of the Goods may be in partial shipments, and the first and full deliveries shall be done in ‘accordance with the Schedule of Deliveries and Payment Milestones. 5.5 The PROVIDER shall install the Goods and integrate its various ‘components related to the Contract at the Project Sites, in accordance with the Project Implementation Calendar of COMELEC for 2019 NLE. The PROVIDER shall provide the Services and Goods for use in all test activities, as laid out in the Procurement Documents, and which dates are set out in the Project Implementation Calendar of COMELEC. 5.6 The PROVIDER shall submit the recommended transmission media and distribution plan at least seven (7) calendar days before the Pre Logical ‘Acceptance Test (PRE-LAT), Contingency Plan, and policies for activation thereof that will be put in place to ensure continuous operation of the ERSTSMRS components Covered in this ERSTSMRS Project. The PROVIDER shall provide for the development, provisioning, and operationalization of said Contingency Plan, in So far as provided by the Procurement Documents, to cover risks at all points lo ernsure Ue success of transmissions, whether at the preparatory, voting, ccunting and canvassing stages. 57 iby Pa shall formulate, in coordination with COMELEC, a 5.8 The PROVIDER shall ensure that the ERSTSMRS shall be designed to include such Contingency Plan in case of system breakdown or any such ‘eventuality which shall result in the Delay, obstruction or non-performance Of the required services in accordance with the Procurement Documents. ‘Activation of such Contingency Plan shall be in accordance with the General aio / 5.9 The PROVIDER shall create its own project team called the project ‘management support team (PMST) in accordance with the Procurement Documents. 5.10 The PROVIDER shall bear the costs of notarial fees and other fees relative to the execution of this Contract. 5.11 The PROVIDER shall coordinate with COMELEC and the other providers in all requirements necessary to effectively carry out the integration of all systems and to ensure the full implementation of the ERSTSMRS Project, at no cost to COMELEC. In dealing with the other providers, the COMELEC and the PROVIDER shall observe the procedures | age tor \set forth in the Protocol of Engagement tached as Annex “I” to this Contac, 5.12 In case of substantial changes in the timelines of the transmission related deliverables of COMELEC, the PROVIDER will stil work for the successful implementation of the ERSTSMRS Project, in which case the provisions of Article 23.2 may apply, but the PROVIDER shall in no case be penalized for any failure or Delay in the ERSTSMRS Project resulting from substantial changes in the timelines not attributable to the actions of the PROVIDER or its employees, representatives, agents and subcontractors. 5.13 The PROVIDER, including but not limited to its employees, Fepresentatives, agents and subcontractors, shall not make any direct or indirect contact with any political party, candidate, partisan organization or {group at! any given time with respect to the ERSTSMRS Project for the uration of this Contract, except as provided by law to present technical demonstrations or as may be authorized by COMELEC. 5.14 The PROVIDER shall turnover to COMELEC all logs, with documentation, from all servers such as but not limited to DNS servers, central server, transparency server, telephone companies’ servers inside the Meet-me-Room and Data Centers, that were used during transmission 5.15 The PROVIDER shall unly operate any systems, applications and databases in the Meet-me-Room and Data Centers in accordance with the protocols defined by COMELEC and agreed by both parties 5.16 The PROVIDER shall secure approval from the COMELEC of the detailed transmission design before its implementation, ARTICLE 6 ‘COMELEC’S RESPONSIBILITIES 6.1 The COMELEC agrees to pay the PROVIDER the Contract Price in accordance with the made and terms of payment set forth in Article 4 of this Contract. 6.2. Whenever the performance of the obligations in this Contract requires that the PROVIDER obtain permits, approvals, import/export, and other licenses from national and local public authorities, the COMELEC shall, if $0 requested by the PROVIDER, provide assistance to the PROVIDER in complying with such requirements in a timely and expeditious manne. Page Mo 30 a) \6.3 Except as otherwise provided under Article 3.4, all transportation and related expenses for moving the Goods for the period after Acceptance and Until a notification from the COMELEC that the Goods may be pulled-out by the PROVIDER from the Designated Warehouse shall be bore by ‘COMELEC. 6.4 In| addition to its obligations under the Procurement Documents, ‘COMELEC shall be responsible for: 6.4.1 Notifying the PROVIDER of the polling precincts and canvassing centers, including the specific locations thereat as may be mutually determined where the Goods shall be installed during the conduct of the different tests; 6.4.2 Notifying the PROVIDER of the polling precincts and canvassing centers, including the specific locations thereat as may be mutually determined where the Goods shall be installed by the COMELEC designated personnel during Election Day except the very small aperture terminal (VSAT) and the digital subscriber line (DSL) which will be installed by the PROVIDER personnel at the canvassing centers prior to Election Day; the Project Sites aiid sel-up of Ue Guous and Services in accordance with the Procurement Documents. For the duration of the ERSTSMRS. Project, COMELEC shall provide continuing reasonable assistance to the PROVIDER on the needs of the ERSTSMRS Project to ensure full and timely project implementation; ss Closely coordinating with the PROVIDER in the preparation of 6.4;4 Supplying the PROVIDER with necessary functional information (on the Philippine electoral system to ensure full and timely project Implementation; 6.4.5 Ensuring full cooperation of COMELEC's officials, personnel and third party providers; 6.4,6 Making available the policies, procedures, reports, data, source documents and other information as may be needed by the PROVIDER’s PMST; 647 Ceing ts vm plat tam ore pre of, nora Sigs oats Oe estas cen ad iio a So PROVIDE ass coe me a Catefreee ey ears meee ates Services and Goods and accepting the Services and Goods based on the Acceptance criteria of the designated COMELEC unit following the ‘general guidelines of RA 9369, the Procurement Documents and COA rues; 6.4.9 Where the personnel of the PROVIDER will be deployed by ‘COMELEC in declared election hot spots in the country, they shall be included in the usual security arrangements of COMELEC with the id Forces of the Philippines and the Philippine National Police; an 6.4.10 The COMELEC, together with the PROVIDER, shall implement the Contingency Pian. 65 Suet to the provisions of the General Instructions to be issued by the COMELEC £n Banc, the entire processes of transmission and canvassing shall be conducted by COMELEC's personnel and officials, according to ERSTSMRS Project requirements and consistent with the Procurement Documents. 6.6 The coueiec shal rtum to the Designated Warehouse and turn over to the PROVIDER fifty per centum (50%) of the BGANs forty-five (45) days from election day. The remaining fity per cerium (50%) Uf Une BGANS wil be turned over to the PROVIDER thirty (30) days from the time all election results have been transmitted. Save in cases of Fortuitous Events, the COMELEC shall pay the PROVIDER the replacement cost to be determined by a third party appraiser chosen by the Parties for any BGANs which may be lost, destroyed or damaged while in the custody and possession of COMELEC or any of its personnel or agents. For purposes of this Contract, custody and possession of the Goods will be with COMELEC from the Acceptance of the same at the Designated Warehouse until receipt of the Goods by the PROVIDER; provided that, the COMELEC shall be liable forall damages to the BGANs due to the following causes: 6.6.1 Inherent structural defects ofthe Designated Warehouse; and 6 Be Al negligent acts or wilful and fraudulent acts causing damage to the Equi ipment which are directly attributable to the COMELEC or its warehouse provider. 6.6 The COMELEC shall provide the final Project of Precincts (POP) to the PROVIDER not later than December 15, 2018. ARTICLE 7 DATA PRIVACY, SECURITY AND NON-DISCLOSURE CLAUSE Page 13 0f 307. cues tht the PROVIDER shal ech rom th COMELEC in the course of the ERSTSMRS Project are deemed confidential information, In the event that the PROVIDER receives information from the COMELEC which contains personal information and sensitive Personal information, it shall comply with the relevant provisions of the Data Privacy Act of 2012. 7.2. The PROVIDER shall keep all confidential information secret and shall ‘ot disclose said confidential information except to those personnel involved in this ERSTSMRS Project. Such personnel are bound by obligations of confidentiality no less effective than those contained in this Contract and applicable law and rules. All of the PROVIDER's employees and/or personnel involved in the ERSTSMRS Project shall individually sign a Non-Disclosure Agreement, substantially in the form ‘attached hereto as Annex “O", within two (2) weeks from the ‘execution of the Contract, for existing employees and/or personnel, ‘and within two (2) weeks from hiring/start of employment, for new ‘employees and/or personnel. 7.3, The PROVIDER shall use the confidential information only to the extent necessary in connection with the purpose of the ERSTSMRS Project. 7.4 The PROVIDER shall use the standard under the Data Privacy Act of 2012 to establish and maintain satisfactory security measures to Juard the confidential information from unauthorized access or 7.5 The) PROVIDER undertakes not to make any copy, record or duplication of any of the confidential information or reduce it into writing or in any medium if disclosed orally, without the prior written Consent of the COMELEC, except to the extent that is reasonably necessary for the ERSTSMRS Project. 7.6 ‘The PROVIDER shall be liable for inadvertent, deliberate or nagar dose and improper use of eaters writin under pertinent laws and rules, except for acts beyond the control of the | PROVIDER, after the PROVIDER's implementation of all organization, technical, and physical measures, as provided under the Data Privacy Act of 2012. 7.7 All confidential information of the COMELEC, including any copies, thereof, shall remain to be its property and shall be promptly returned by the PROVIDER upon the termination of this Contract. Upon such | Page 14 0f30 ” 4 & \imation, all copies made by the PROVIDER of the confidential Information shall be promptly sent by the PROVIDER to the COMELEC, 7.8 All proprietary rights in the confidential information of the COMELEC shall remain vested in it. The PROVIDER shall protect COMELEC'S proprietary information from disclosure with the same degree of care afforded by the PROVIDER to its own confidential information. All obligations and undertakings of the PROVIDER specified herein with respect to COMELEC's proprietary information shall survive the termination ofthis Contract. ‘The confidentiality obligations contained herein shall remain in force even after the termination of this Contract. In no case shall the PROVIDER retain any copy of the confidential information, ARTICLE 8 DELIVERY AND ACCEPTANCE 81 bday sas he Saves ns ee Cpa an pe Sa a ae Bee eh co ace Sil ot Pal at hy te ate yg enh hae en ms Soest ees a see yy acl mo ‘ ‘accordance with Article 3.1, 8.2. The custody and possession of the Goods at the Designated Warehouse shall remain with the PROVIDER until COMELEC’s Acceptance of the ‘The Parties shall agree on the security protocol for the Goods tuntil such Acceptance. The COMELEC shall allow a dedicated space in the Designated Warehouse for the storage of the Goods delivered by the PROVIDER and not yet accepted by the COMELEC. ARTICLE 9 PERFORMANCE SECURITY 9.1 Within ten (10) calendar days from receipt by the PROVIDER of the Notice of Award issued by the COMELEC, but in no case later than the signing of this Contract by both Parties, the PROVIDER shall furnish the Performance Security, In the amount and form prescribed in the RIRR of RA S184. Acceptance.eee upon delivery by the latter of the completion report after the successful ‘conduct of the ERSTSMRS of the 2019 NLE, and upon the COMELEC's issuance of Certificate of Final Acceptance, which shall be issued within twenty (20) working days from the submission by the PROVIDER of the billing for the last milestone as stated in Annex °H"; provided that certificates of acceptance have been issued for all milestones. anricie 10 WARRANTY 10.1 The PROVIDER represents and warrants that It shall undertake and complete the ERSTSMRS Project with reasonable diligence in an orderly {and workmanlike manner and shall strictly comply with industry standards and pertinent laws, government rules, and regulations and subject to the warranty period as specified in the Procurement Documents, the ERSTSMRS Project are compliant with the specifications in the The eer warrants that the quality of the Goods and Services used in Procuremjent Documents. 10.2 The PROVIDER warrants that all the Services and Goods comply with COMELEC’s specifications as contained in the Procurement Documents, and shall be covered by warranty against all defects including the replacement of defective components, entire units, or systems in accordance with the provisions of this Contract. 10.3 The PROVIDER shall, at its sole expense, repair or replace any Goods found to contain manufacturing defects within three (3) calendar days upon receipt of notice fom the COMELEC's authorized representative, The repair or replacement shall be made on the site indicated in the Bill of Materials (Annex "E”).. 10.4 If the accepted Goods already deployed are found to be defective, then the agreed Contingency Plan shall be followed. 10.5 After Acceptance of the Goods by the COMELEC, the warranty obligation of the PROVIDER shall not extend to: (2) Goods whose serial and/or model number or any other identification, marking, and security seal has been removed or rendered illegible by COMELEC personnel, without any authority from the PROVIDER or its technical personnel; | Page 16 0f30(9) Gods that ave Been dana males ms, certo tous Event (€)_ Goods, except for the compartments for the consumables and/or peripherals, which have been opened without the PROVIDER'S prior written approval; or (4) Goods wherein COMELEC or its agents have made changes to its physical, mechanical, electrical, Software or interconnection components without written authorization ofthe PROVIDER. 3.4.1, the obligation for the warranty shall be covered by retention money Of five percent (5%) of the value of said Goods, based on the Bill of Material set forth in Annex “E”. Such retention money shall be returned to the PROVIDER after the expiration of the warranty period based on the Bill of Matetials set forth in Annex °E". In lieu of retention money, the cant may opt to submit to the COMELEC a special bank guarantee 10.6 me Goods considered sold to COMELEC, as provided under Article equivalent to five percent (5%) of the value of the abovementioned Goods, ‘based on the Bill of Material set forth in Annex “E”. 10.7 The PROVIDER shall maintain in the COMELEC Designated Warehouse sufficient parts and test equipment which are deemed necessary Wy salsfy expected requirements. and to dlagnose electronic fallures effectively 10.8 The PROVIDER shall furnish Updates to COMELEC without charge, and the license referred to in Article 11 shall apply to such Updates, The PROVIDER shall provide Software fixes, as necessary, during the warranty period +! shall resolve any problem that affects the operation of the A) system, ARTICLE 11 ‘SOFTWARE AND LICENSE SUPPORT 11.1 The PROVIDER shall furnish all systems and Software provided in the Procurement Documents and grant to COMELEC a non-transferable lense 4 to use the Software, system and Goods in such other locations as ‘COMELEC may choose for the purpose of the ERSTSMRS for the 2019 NLE. 11.2 The PROVIDER shall furnish COMELEC the Software in such format as will allow COMELEC to utlize the same in accordance with this Contract. For the avoidance of doubt, under no circumstances shall COMELEC permit any party other than COMELEC of the PROVIDER to undertake Updates , | pre 190630 \and/or Upgrades related to the Goods’ primary purpose, namely for use of the ERSTSMRS for the 2019 NLE. 11.3 The COMELEC agrees that, except as otherwise authorized under this Contract, it shall not 0} sats, ahve, rate ti ve ote a Okt Fae ts oa (b} allow any third party to reverse engineer, disassemble, ‘decompile, modify or transmit the Software in any form or by ‘any means for any purpose other than for this ERSTSMRS Project; or (©) use any Software acquired hereunder for any purpose other than ERSTSMRS for the 2019 NLE. developed proprietary systems/applications/tools for review by COMELEC 11.4 The PROVIDER shall promptly make available the source code of its andjor by any interested party as authorized by the COMELEC. ARTICLE 12 INTELLECTUAL PROPERTY 12.1 The PROVIDER warrants that all intellectual property rights in or related to the Services and Goods, including but not limited to patents and ‘other know-how and copyright, both registered and unregistered, owned and/or otherwise used by the PROVIDER and/or any member of the ‘Smartmatic Group, and all goodwill related thereto are, and shall remain at all times, the exclusive property of the PROVIDER and/or any member of tthe Smartmatic Group as owner thereof, and COMELEC acknowledges the ‘same, and shall not reproduce or use the same except as expressly provided in this Contract. ee ee Sooo ee Se ce ene eo ae ee ay on Fan, | Page 18 0 0,122 a PROVIDER may at any time affix to the Equipment in any manne is trade name, service marks or trademarks, Except as expressly permite in this Contract, COMELEC shall not have any right, tile oF Interest to use any trademark, ether alone or in conjunction with other words gr names or in the goodwil thereof, without the PROVIDER'S ‘xpress ten consent in each instance. 12.3 The PROVIDER shall, at its sole cost and expense, indemnify, defend, {and hold COMELEC harmless from and against any claim brought by a third party to the extent that such claims arise out of infringement by the Goods Of any patent, trade secret, copyright, trademark, proprietary information oF other intellectual property rights. ‘The COMELEC shall give prompt and timely notice of such clalms to PROVIDER. ARTICLE 13 ASSIGNMENT OF RIGHTS 13.1 ach Party shall not assign ts sights or obigatons under this Contract, in whole or in part, except with the prior written consent ofthe other Party. anne guna SO Sho eas 14,1 In the event of any default or any violation by the PROVIDER affecting the Project Implementation Calendar of COMELEC, the COMELEC shall, subject to the provisions of the Schedule of Delivery, the Service Level Agieement, the warranty provision under Article 10.3, impose the following liquidated damages without 2 need to prove it has incurred actual damages. 14.1.1 Deduct for every day of Delay in delivery after the stipulated Period for deliverables affecting the Project Implementation Calendar Of the COMELEC for the 2019 NLE, as stipulated in the Schedule of Delivery, the Service Level Agreement, and the warranty provision under Aticle 10.3, liquidated damages in the amount of one-tenth of ‘one per centum (1/10 of 0.01) of the cost of the unperformed portion of every day of delay. 14.1.2 In case of Transmission Failure, the provisions of Article 14.2 Of this Contract shall appy. 4 Page 19 of 30 «442 hans dhe haga aa a9 conan 14.13.1 Money due or which may become due to the PROVIDER; 14.1.3.2 Securities or warranties posted by the PROVIDER; and 14.1.3.3 Performance Security provided for in Article 9 of this Contract. In no case shall the total amount of the liquidated damages under this Contract exceed ten per centum (10%) of the Contract Price. the cumulative amount of liquidated damages reaches said 10%, the COMELEC may rescind this Contract in accordance with 14.1.2 of this Contract. 14.1.4 Subject to Article 19 of this Contract relating to the settlement Of disputes between the Parties, the COMELEC reserves the right to rescind this Contract and/or forfeit the Performance Security, once the value of liquidated damages reaches ten per centum (10%) of the total amount of the Contract Price and the PROVIDER has failed to correct oF rectify the Delay withit fieen (15) working days for all deliverables from receipt of the written demand from the COMELEC, without prejudice to other appropriate sanctions that may be Imposed over and above the liquidated damages. Tt is understood that rectification or correction of the Delay shall be made for delivery of Equipment and devices, before Election Day. 14.2 For every Transmission Failure, the COMELEC shall charge @ penalty equivalent to one of the following: a) b) 9 If the PROVIDER was successful in transmitting less than 90% of the Transmission Nodes, the Provider shall be liable to pay a penalty of (Php3,650.00) per Failed Transmission Node; If the PROVIDER was successful in transmitting from 90% to less ‘than 95% of the Transmission Nodes, the Provider shall be liable to pay @ penalty of 70% of (Php3,650.00) per Failed Transmission Node; or If the PROVIDER was successful in transmitting from 95% to less 100% of the Transmission Nodes, the Provider shall be liable to pay penalty of 25% of (Php3,650.00) per Failed Transmission Node; ok 4 4Before COMELEC will impose any liquidated damages or penalties because of any transmission failure, the COMELEC shall notify the PROVIDER within forty-five (45) days from Transmission Failure as defined in Article 1.30, together with the VCM logs and CCS logs which show that the COMELEC personnel, such as the BEI or BOC, followed all tie prescribed procedures to transmit the results of the elections, Within thirty (30) days from receipt by the PROVIDER of the notice from the ‘COMELEC together with the VCM logs and CCS logs, the parties shall mutually determine the amount of penalties or liquidated damages to be imposed by COMELEC against the PROVIDER. In ng case shall the PROVIDER be penalized for any Transmission Failure caused by the non-compliance by the COMELEC personnel of the prescribed procedures for the transmission of the election results as shown in the VCM logs or CCS logs. 14.3. The Parties acknowledge that there is a need to refine the required Preparations for the ERSTSMRS Project vis-d-vis the other facets required Of the ERSTSMRS Project which are not covered by this Contract such as logistics and deployment, training of the Board of Election Inspectors and Election Officers, Protocol for determining Transmission Fallure under this Contract, etc. Towards such end, within thity (30) days from the execution of this Contract, the Parties shall agree in writing on these matters. 14.4 In case of Transmission Failure, the Parties shall reasonably agree to ‘meet to determine the cause of the Transmission Failure bearing in mind the responsibilities of each of the Parties in the ERSTSMRS Project, as outline in Annex "N" hereof. COMELEC may impose the liquidated damages andjor penalties only after such determination and it is agreed that the ‘cause of the Transmission Failure is solely attributable to the PROVIDER'S fault. 145 In the event of termination of Contract due to the default of the PROVIDER pursuant to Article 14.1.2 hereof, COMELEC shall impose ‘administrative penalties pursuant to Section 69 of the 2016 Revised Rules ‘and Regulations of Republic Act No. 9184, ARTICLE 15 ‘TAXES AND DUTIES 415.1 Pursuant to RA 9369, COMELEC is authorized to procure, in ‘accordance with existing laws, by purchase, lease, rent or other forms of acquisition, supplies, equipment, materials, software, facilities and other services, from local or foreign sources, free from taxes and import duties. Page21 of 3015.2 These Goods shall include those to be brought in for replacement andjor tepair of defective parts covering the entire term of this Contract, including the warranty period. 15.3 There wil be no retention of any coresponding amount for said ‘taxes by COMELEC, except those taxes which shall be withheld by COMELEC pursuet to Revenue’ Memorandum Order No. 23-2014 of 20 dune 2044" and other pertinent rules issued by the Bureau of Internal Revenu 15.4 For tax and duty exemptions, COMELEC shall seek a certification from the Department of Finance, Bureau of Customs, and Bureau of Internal Revenue, 15.5 Except as herein above provided, the PROVIDER shall be entirely responsible for all the necessary taxes, stamp duties, license fees, and ‘other such levies imposed for the implementation of this ERSTSMRS Project. | ARTICLE 16 ‘COMELEC EXEMPTION FROM LABOR CLAIMS 16.1 The PROVIDER shall hold COMELEC free from any labor claims and mandatoty benefits of all employees hired by the PROVIDER in the implementation of the ERSTSMRS Project, and the PROVIDER shall comply with all existing labor and pertinent social legislation laws, ARTICLE 17 NOTICES 17.1 All fequests, reports, recommendations, and general correspondence between the Parties shall be in writing, and sent either by personal delivery, Facsimile, registered mail or electronic mail at the numbers or addresses indicated below: To COMELEC: PROJECT MANAGEMENT OFFICE DIRECTOR 7® Floor, Palacio del Gobernador | Intramuros, Manila Telephone’: 5272771 Facsimile 5273925, Email chairman@comelec.gov.ph nena \(‘To PROVIDER: MR. PRAVIR DAHIYA | 16" Floor, ACCRALAW Tower | ‘Second Avenue comer 30” Street Bonifacio Global City, Taguig City Telephone : 6431200 Facsimile 6431299 Email: 2019nle@smartmatic.com All requests, reports, recommendations, and general correspondence between the Parties shall be: a. setved by personal delivery and duly received at the address of the Party to. whom the notice is given during the office hours from 8:00 ‘a.m, to 5:00 p.m., on any business day; or 5. sant by facsimile and emai within the above period of time, provided that if service shall be made on a non-business day, or outside office hhours on business days, prior notice shall be made to the other Party to whom the notice, request or any analogous document shall be seived; provided further that sald notice, request, consent or document shall also be served by personal delivery during the office hours of the next business day. Either Party may change its address for purposes of receiving notices and ‘ther communications upon prior notice to the other Party ARTICLE 18 DELAY IN PERFORMANCE 18.1 Performance of the Services and delivery of the Goods shall be made by the PROVIDER in accordance with the Project Implementation Calendar of COMELEC. 18.2 At any time during the performance of this Contract and before the PROVIDER actually encounters Delay, if the PROVIDER or its subcontractors should encounter conditions that will impede timely performance of the Services and the delivery of the Goods, the PROVIDER shall, no jater than twenty four (24) hours upon discovery of the cause of Delay, notify the COMELEC in writing of the fact of the Delay, its likely duration and its cause(s) and request an extension for delivery of Goods or performance of the Services. AS soon as practicable ater recelpt of the 230130PnoMOERS ace and ee, the COMELEC sa eve te shiton Sd oy ote MOWERS er petomence wah cata Sirah cab aed Oy te Pos OF oe mee Ses sro wih re Nethe cone 18.3 Solutions to problems encountered in the performance of the Services, shall be performed by the PROVIDER as stated in Articles 3 and 5 Of this Contract, The Procurement Documents, the Service Level ‘Agreement, the Schedule of Delivery, the Contingency Pian and other related documents in accordance with the Project Implementation Calendar of the COMELEC for the 2019 NLE. 18.4 In spite of any Delay in the transmission of election results, the PROVIDER shall continue its Services until 100% completion. Securty,aated damage, peas, or tamination for Jtol aro the eden that Daay'n performance or her furs to perme cations under the Contract thereat of Fortius Even or beyond the coo ofthe PROVIDER. Coresponinghy, the COMELEC shal ss0 rot be lable for any amagesarsing ro he Bly fre to pron ‘its obligations where such failure results from a Fortuitous Event or is beyond the control of the COMELEC. 185 a PROVIDER shall not be liable for forfeiture of its Performance | ARTICLE 19 | ‘SETTLEMENT OF DISPUTES 19.1 If any dispute shall arise between the Parties in connection with or arising out of this Contract, the Parties shall make every effort to resolve ‘amicably Such dispute by mutual consultation, 19.2 If after thirty (30) days the Parties failed to resolve their dispute by ‘such mutual consultation, then either Party may give notice to the other Party of its intention to commence arbitration, as hereinafter provided, as to the matter in dispute, and no arbitration in respect of this matter may 'be commenced unless such notice is given, arbitration has been given in accordance with this Article shall be settied by 4 19.3 Any dispute in respect of which a notice of intention to commence 4 arbitration by an arbitral tribunal composed of three (3) arbitrators. The first arbitrator will be appointed by the Party giving notice of its intention to Commence arbitration, the second arbitrator, except for the case as specified hereinafter, will be appointed by the other party within fifteen (15) days after the date on which the latter has received notice of arbitration, and the third arbitrator, who will act as Chairman of the arbitral Page 24 030Se nl be dnd oy mal arent of te oo a aeady| ported by the Parts within sen (5) dye ater be sppomert of the second aaron fling such agreomont by the Preset of the Disp Resolution Cents Ine CPORCE). Tre Present OF the FORCT shal aso designate () the socond arbtrator I the party Tecan the natce of eritaton as Tal to pominote the scond arise; and) the reacemert of any arta who i uncle Uning 0 acre the appinent oto continue. sein Se sich Attain may be commenced rr to or atte performance of the Services andthe delveryof the Geode uncar ts Conroe 19.4 In the case of a dispute between the Parties, the dispute shall be resolved in accordance with RA 9285, otherwise known as the Alternative Dispute Resolution Act of 2004. The arbitration proceeding shall be conducted within Metro Manila only and the proceedings shall be ‘conducted in English. The decision of the arbitral tribunal shall be final and binding upon the Parties, 19.5. Notwithstanding any reference to arbitration herein, the Parties shall Continue to perform their respective obligations under this Contract unless they otherwise agree, and the COMELEC shall pay the PROVIDER any monies die the PROVIDER. ARTICLE 20 FORTUITOUS EVENT 20.1 In the event of a Fortuitous Event, the Schedule of Deliveries and Payment Milestones shall be extended accordingly by agreement of the Patties. 20.2 The Party affected by any Fortuitous Event shall promptly notify the other Party in writing within twenty-four (24) hours from the occurrence of such event: the date of its commencement, expected duration, date of cessation, and the proposed necessary extension 20.3 The Party affected by Fortuitous Event shall do its best to avoid or Femove causes of Delay, resume delivery and performance of obligations {a5 soon a$ possible, and exert every reasonable effort to reduce the effect of Fortuitaus Event to a minimum, 204 In all cases of Fortutous Events that prevent the completion ofthe ERSTSHRS Project on Elton ‘Day, tie PROVIDER. shal fish Contingenty Plans and render ll necessary services and suppot ntl actual completion ofthe ERSTSMRS Project the affected areas in which case the isions of Article 24.2 of this Contract may apply. & | Page 28 0 30 4 6 X20.5 _Fortuitous Event shall have legal effect only in the area where it occurs, provided that should such event occurs in the relevant areas of manufacturing, production, delivery or shipment of the Goads and Services, the provisions ofthis Article shall apply. | 20.6 The PROVIDER shall not be liable for forfelture of the equivalent Portion of its Performance Security or liquidated damages, for every day of Delay caused by Fortuitous Event or caused by the COMELEC. 207 tls tere dre bythe COVELE In tg, he PROVIDER Zl comes © enn ang CEE rt ROMER Face ac ea ae er eee, rks mb Pete nape eee | ARTICLE 21 CONTRACT AMENDMENT 21.1 Subject to applicable laws, no variation in or modification of the terms of this Contract shall be made except by written amendment signed by the Parties. ARTICLE 22 | ‘SEVERABILITY 22.1 If any provision in this Contract is declared illegal, unenforceable or void, the Parties shall negotiate in good faith to agree upon a substitute provision that is legal and enforceable and consistent with the intentions of the ERSTSMRS Project. The rest of this Contract not materially affected by such declaration shall remain valid, binding and enforceable. ARTICLE 23 | CONTRACT ANNEXES 23.1 The es are hereby incorporated in and made integral parts of this Contract. execution and completion of the ERSTSMRS Project for the ERSTSMRS for 232 zs of the Parties is the proper, satisfactory and timely the 2019 NLE é Page 26 30222 The Gntnd ond the Ames cose te exe armen beet te Fates ad hl bbe te tay, ee Rede Crt | ARTICLE 24 REPEAT AND AMENDMENT TO ORDERS: 24.1 REPEAT ORDER a 1 Pursuant to Section 51 of RA 9184, the COMELEC ves the right to purchase Goods up to twenty’ five per centum (2596) of each item at the same unit price on a repeat order basis whenever there arises a need to add other items procured under this Contract. Any Repeat Order shall be in accordance with Section 51 of RA 9184 and the 2016 Revised IRR. 24.2 AMENDMENT TO ORDER 24.2.1. The COMELEC reserves the right to issue an amendment to order (in the form attached hereto as Annex °M") to cover any Necessary adjustment within the general scope of this Contract in any one or more of the following aspects to fully meet the requirements of the CRSTSMRS Pruject. Any Amendment to Order shall be in accordance with Annex D of the 2016 Revised IRR. Te PROVIDER ay count an amanimer to oder by sbmting 2 wien request inthe form attached as Annex °M to the COMELE Chakman or the Implementing Unt. 243 The Parties agree that should the COMELEC fail to act on the PROVIDER's written request for an amendment to order within seventy two (72) hours from receipt thereof by the COMELEC Chairman or his authorized representative, the request shall be deemed denied and cannot be implemented until both Parties subsequently approve the amendment to order. 244 Any repeat order or amendment to order shall be issued by the COMELEC Chairman or the Implementing Unit. | ARTICLE 25 | CONTINUING REVIEW 25.1 In order to ensure the successful implementation of the ERSTSMRS Project, there shall be a continuing review of the original schedules, revised timelines, and procedures by the Parties. , Page 27 030 4 425.2 The Parties are aware that every situation cannot be provided for in this Contract, and upon the occurrence of such situation for which there Is NO specific provision in this Contract or there is no agreement in the application thereof, the Parties shall forthwith meet and attempt to resolve the matter immediately, amicably and in good faith for the successful implementation ofthe ERSTSMRS Projet In acordance with the av 25.3 The Patties shall at all times exercise good faith In the performance Of their obligations and the exercise of their rights under this Contract and ‘no termination hereof shall be availed of except in case of serious and ‘material breach, so that no Party may be unduly deprived of Its rights under this Contract. ARTICLE 26 TERMINATION 26.1 In case COMELEC cancels or terminates this Contract before Election ay, provisions of Annex I on the Guidelines on Termination of Contracts under 2016 Revised IRR shall apply. ARTICLE 27 NON RELEASE FROM LIABILITY 27.1 Termination of this Contract before Election Day pursuant to Annex Ton the Guidelines on Termination of Contracts under 2016 Revised IRR shall not release a Party from any labilty for all obligations ensued at the time of termination, or which may thereafter accrue in respect of any act or ‘omission prior to such termination eter he PEMDER gute tothe CONELE ha ry 4» Stal rt forthe durin ofthe EASTENRS Projet on ntl eter 3, Souo, went sre or rte ter respecte corse 6 Sry aa pry ood the Spee IN WITNESS HEREOF, the Parties, acting through thelr duly ‘authorized representatives hereby sign this Contract this 9° day of 4 aca 2018, in the City of Manila, Philippines. Page 28 of 0 XCOMMISSION ON ELECTIONS — SMARTMATIC TIMCORPORATION by; By: ol inns v.coo Chairman Director: ized Representative ‘SIGNED IN THE PRESENCE OF: Te ‘ACKNOWLEDGMENT eee City of Mania )ss. BEFORE ME, a Notary Public for and in the City of Manila, this —LiL22 [121g personally appeared: | name Identification Date/Piace of Issuance a0 om M, ABAS bo. 99-0019) a0 JANE V.,COO BIR TIN No. 128-820- 07-30-2013/DOF,BIR 201-000 all known to me and to me known to be the same persons who executed the foregoing instrument and acknowledged to me that the same is of thelr ‘own free volition and voluntary act and deed, as well as of the entities represent. ‘This Contract of Services for the Election Results Secure Transmission Solutions, Management and Related Services Including Data Center Page 29 of 30 XRequirements for the AES 2019, consisting of thirty (30) pages, including the page upon which this acknowledgement is written (but excluding the Annexes), has been signed by the Parties and their instrumental witnesses (on each and every page hereof of the main Contract, except for the title page and the Annexes. WITNESS MY HAND AND SEAL on the date and place above written. Doc. No. i Hosoi Ee © yrs ee ae Book No, ‘hist mem ane Series of 2018. “ntti Page 30 of 30