Unless the context otherwise requires, the following terms whenever used in this Agreement shall have the following meanings:
"Accounting Principles" means the generally accepted accounting principles applicable from time to time in the Philippines, as determined by the Financial Reporting Standards Council or its successor body.
"Affiliate" means, with respect to any specified person, any other person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such specified person. For purposes of this definition, "control" means the ownership, directly or indirectly, or as trustee, personal representative, or executor, of more than fifty percent (50%) of the outstanding capital stock of such person or other equity interests having the power to elect a majority of the board of directors, or similar body governing the affairs of such person, or the power to direct or cause the direction of the business affairs or management of such person.
"Agency Event of Default" is defined in Section 15.2.
"Agency Parties" is defined in Section 14.1.
"Agency Rectification Plan" is defined in Section 21.1.1(c).
"Agency Step-in Rights" is defined in Section 18.1.
"Agreement" means this [Name of Agency] Information and Communications Technology Modernization Project Agreement signed by the Parties on the Signature Date, including any amendments that may be made from time to time in accordance with its terms.
"Auditors" means the independent public accountants appointed by the Company with the prior written approval of the Agency.
"Billing Month" means (i) the period from the Provisional In-Service Date until the last Day of the calendar month in which the Provisional In-Service Date occurs; (ii) each successive period of one (1) calendar month thereafter, exclusive of the calendar month in which the Termination Date occurs; and (iii) the period from the first Day of the calendar month in which the Termination Date occurs until the Termination Date.
"BOT Law" means Republic Act No. 6957, as amended, and its Implementing Rules and Regulations.
"Business Day" means any Day other than a Saturday, a Sunday, and any Day which is a legal non-working holiday in [●], Philippines or any Day when commercial banks in [●], Philippines are closed.
"Certificate of Acceptance of the New ICT Services and Facilities" or "CAIF" means the certification issued in accordance with Section 5.6 of this Agreement indicating the completion and acceptance of the New ICT Services and Facilities.
"Change-in-Law" means any of the following events occurring as a result of any action by any Government Authority of the Philippines:
(a) A change in or repeal of a Legal Requirement;
(b) An enactment or making of a new Legal Requirement; or
(c) A change in the interpretation or the application of a Legal Requirement, which in any case was not reasonably foreseeable at the Signature Date, but not a change in Taxation and an improvement in ICT or operational policies or practices which are generally regarded by developers and regulatory authorities in advanced jurisdictions as appropriate for service providers to have to make.
"Change of Ownership" means:
(a) any sale, transfer or disposal of any legal, beneficial or equitable interest in any or all of the shares in the Company, including control over (i) the exercise of voting rights conferred on those shares, (ii) the right to elect, appoint or remove directors, or (iii) the right to declare dividends; and
(b) any other arrangements that have or may have or which result in the same effect as paragraph (a) above.
"Claims" means with respect to any person, any and all suits, sanctions, legal proceedings, claims, assessments, judgments, damages, penalties, fines, liabilities, demands, reasonable out-of-pocket expenses of whatever kind (including reasonable attorneys' fees and expenses) and losses incurred or sustained by or against such person but excluding any lost profits or other special, incidental, indirect, punitive, or consequential damages suffered by such person.
"Clients" means those persons who from time to time make use or avail of the different services or products provided by the Agency that are generated, processed or improved by the New ICT Services and Facilities.
"COA" means the Commission on Audit.
"Company Event of Default" is defined in Section 15.1.
"Company Fee" is defined in Section 8.1.
"Company Invoice" is defined in Section 8.4.
"Company Parties" is defined in Section 14.2.
"Company Rectification Plan" is defined in Section 21.1.1(b).
"Confidential Information" is defined in Section 22.4.1.
"Consent" means any permit, license, approval, concession, right, award, registration, certification, waiver, exemption, or other authorization, including any amendments thereto, that is required from any Government Authority under the terms of or in connection with this Agreement.
"Contract Year" means (i) initially, the period starting on the Provisional In-Service Date and continuing until the end of that calendar year (such initial period being "Contract Year 1") and (ii) thereafter, each successive period consisting of twelve (12) consecutive monthly Billing Months (the first such period being "Contract Year 2" and so on), provided that the last Contract Year shall end on the Termination Date.
"Database" means a collection of recorded information in a form capable of, and for the purpose of, being stored in, processed, and operated on by a computer, and includes all information, data, facts and documents supplied by the Agency, or persons dealing with the Agency, that are inputted, stored, categorized and processed by both the New and Existing ICT Services and Facilities.
"Day" means a 24-hour period beginning and ending at midnight, Philippine time.
"Delay Liquidated Damages" is defined in Section 5.8(a).
"Design and Technical Specifications" means the design and technical specifications set out in Schedule A to be followed and complied with by the Company in the systems design and development, supply, installation, testing, commissioning and operation, data conversion and creation of databases, rollout, as well as systems maintenance and upgrading of the Project.
"Dispute" means any difference or disagreement of any kind whatsoever arising between the Parties in connection with, arising out of, or relating to the interpretation, implementation, breach, termination, or validity of this Agreement.
"Dollar", "$", and "USD" mean the lawful currency of the United States of America.
"Effective Date" is defined in Section 2.1.
"Equity" means (i) the capital stock, of any class, of the Company subscribed to by the Shareholders of the Company, including (ii) indebtedness of the Company given to it by a Shareholder or an Affiliate of any Shareholder that is subordinated to any indebtedness incurred by the Company under the Financing Agreements.
"Event of Default" is defined in Section 15.
"Event of Loss" means any occurrence during the term of the Financing Agreements which results in all or a substantial portion of the New ICT Services and Facilities being damaged, destroyed, or rendered unfit for normal operation in accordance with this Agreement.
"Expert Panel" is defined in Section 20.2.2.
"Existing ICT Services and Facilities" means all existing hardware, Software, communications network equipment, systems, technology, and schemes owned, leased, outsourced or otherwise lawfully possessed or used by the Agency under any other legal right, for the implementation of its current application systems, administration activities or programs, including but not limited to computers, servers, machines, auxiliary equipment, peripherals, point-to-point lines, satellite links, other communications network equipment, end user support infrastructure, and related facilities. If the Company uses any part of the Existing ICT Services and Facilities in accordance with this Agreement, such services and facilities shall form part of the New ICT Services and Facilities.
"Financial Model" means the financial base case for the Project as reflected in the computer model prepared by the Company and submitted and agreed to by the Lenders, which model incorporates the forecast cash flow statements of the Company including all expenditure, revenues, taxation and financing of the Project together with the projected income statements and balance sheets for the Company over the Operating Period, and details of all assumptions, calculations and methodology used in the compilation thereof, as amended from time to time in accordance with the Financing Agreements.
"Financing Agreements" means the agreements or instruments that make available or extend loans, credit facilities, notes, bonds, subordinated debt, letters of credit, credit security, swaps, derivatives, hedging instruments, and other documents relating to the financing or refinancing of the Project provided by any Lender, including any amendments, supplements, extensions, and renewals of that financing or refinancing.
"Force Majeure Event" is defined in Section 13.1.1.
"Government Authority" means any government, department, commission, board, bureau, Agency, regulatory body, instrumentality, fiscal, legislative, judicial, or administrative, national or local, having jurisdiction or authority over the matter in question.
"Implementation Plan" is defined in Section 5.5.
"Independent Verifier" means the person appointed by the Parties to review the detailed design and to supervise the installation of the New ICT Services and Facilities pursuant to Section 5.4 (Independent Verifier) hereof.
"Information and Communications Technology" or "ICT" means the totality of means employed to systematically generate, send, receive, store or otherwise process electronic data messages, electronic documents, and electronic information of any kind encompassing the use on an integrated basis of computers, computer peripherals, computer operating systems and Software applications, telecommunications networks, communications devices of any type communications applications, and any other information and communications technology for the provision of information and value-added electronic services.
"Initial Shareholders" means all of the Shareholders of the Company as of the Signature Date, the names of which are set out in Schedule I (Company Shareholders).
"In-Service Date" means the Day on which a final acceptance certificate for the New ICT Services and Facilities is issued by the Agency to the Company in accordance with Section 5.6.2 (Final Acceptance).
"Intellectual Property Rights" means all rights of ownership recognized by law in inventions, technology, copyrighted material, computer Software, and firmware, including (a) patents, trade marks, service marks, rights in designs, trade names, copyrights, rights to trade secrets, proprietary information, and know-how in each case whether registered or not; (b) applications for their registration; (c) rights under licenses and consents in relation to any of them; and (d) all forms of protection of a similar nature or having equivalent or similar effect to any of them which may subsist anywhere in the world.
"Key Performance Indicator" or "KPI" means the pre-determined or desired performance benchmark or standard set to measure the efficiency and effectiveness of the Facilities and the Services as provided in Schedule F (Service Level Agreements).
"Legal Requirements" means all laws, statutes, orders, decrees, injunctions, Consents, agreements, and regulations of any Government Authority having jurisdiction over the matter in question.
"Lender" means any person providing loans or other financing or refinancing to the Company under the Financing Agreements, including its successors, assignees, agents and trustees, but not including any Shareholder or Affiliate of a Shareholder with respect to any indebtedness of the Company that constitutes Equity in the Company.
"Lien" means any mortgage, pledge, lien, security interest, option agreement, claim, charge, or encumbrances of any kind.
"Lock-in Period" is defined in Section 19.3.2.
"Maintenance Schedule" is defined in Section 6.5.
"New ICT Services and Facilities" means all necessary services, hardware, basic Software, communications network equipment, systems, technology, and schemes provided, installed, tested, commissioned, supplied, operated, maintained, and/or upgraded by the Company for the implementation of the Project, including but not limited to computers, machines, auxiliary equipment, peripherals, point-to-point lines and satellite links, necessary to operate and process all Agency applications in addition to all operators and communications technicians responsible for hardware, basic Software and communications equipment development, maintenance and operation, specified in this Agreement.
"Non-Political Force Majeure Event" is defined in Section 13.1.3.
"Notice of Agency Event of Default" is defined in Section 21.1.1(c).
"Notice of Company Event of Default" is defined in Section 21.1.1(b).
"Open System" means a system with characteristics that comply with specified, publicly maintained, readily available technical standards and specifications so that the system can be connected to and, subject to access rules and permissions, work interoperable with other systems that also comply with these same technical standards and specifications.
"Operating Period" means the period commencing on the Provisional In-Service Date and ending on the Termination Date.
"Operating Security" is defined in Section 6.3.
"Party" means the Agency or the Company, as the case may be, and "Parties" means both the Agency and the Company.
"Penalty Rate" means [●] percent ([●]%) per annum.
"Performance Security" is defined in Section 5.7.
"Performance Security Issuer" means (i) if the Performance Security is in the form of an irrevocable standby letter of credit, a universal or commercial bank reasonably acceptable to the Agency whose issuer credit rating or long-term unsecured debt obligations are rated at least PRS A by PhilRatings, or (ii) if the Performance Security is in the form of a surety bond callable on demand, a reputable surety company reasonably acceptable to the Agency which is duly licensed and ranked by the Insurance Commission in its latest official publication to be among the top ten (10) surety firms in the Philippines in terms of net worth.
"Peso", "P", and "PHP" mean the lawful currency of the Republic of the Philippines.
"Philippines" means the Republic of the Philippines.
"Planned Downtime" means any normal maintenance, replacement or servicing of equipment, or other work that is planned or scheduled pursuant to Section 6.5 that causes a temporary interruption of or reduction in the volume, rate, or quality of service of the New ICT Services and Facilities provided by the Company.
"Planned Downtime Period" is defined in Section 6.5(b).
"Political Force Majeure Event" is defined in Section 13.1.2.
"Project" means the undertaking, in line with the terms and conditions of this Agreement and all Legal Requirements, to prepare, develop, finance, design, engineer, procure, install, supply, startup, test, commission, implement, own, operate, manage, and maintain the New ICT Services and Facilities and to provide the Services.
"Project Agreements" means:
(a) this Agreement;
(b) the Shareholders' Agreement;
(c) the Financing Agreements; and
(d) Any other material agreement entered into by the Company pursuant to the agreements listed in sub-clause (a) through (c) above, for the purposes of the implementation of the Project, including any agreement or subcontract for the management, operation and maintenance, and provision of technical assistance for the Project.
"Project Milestones" means (i) the Effective Date; (ii) the Provisional In-Service Date; and (iii) the In-Service Date.
"Project Milestone Schedule" means the timetable or required dates for completing all the Project Milestones set out in Schedule B, as may be amended from time to time in accordance with this Agreement.
"Project Report" is defined in Section 10.2 (Project Reports).
"Provisional In-Service Date" means the Day on which a provisional acceptance certificate is issued to the Company after successful testing and commissioning of the New ICT Services and Facilities following the testing procedures provided in Schedule C (Testing and Commissioning).
"Prudent Utility Practice" means applying, in relation to the manner in which the development obligations and the performance of Services are rendered under this Agreement, the standards, practices, methods and procedures conforming to all Legal Requirements, and exercising that degree of skill, care, diligence, prudence and foresight that would reasonably and ordinarily be expected from a skilled and experienced person engaged in a similar type of undertaking under similar circumstances, including taking reasonable steps to ensure that:
(a) adequate materials, resources, and supplies are available to meet the New ICT Services and Facilities' needs under normal conditions and reasonably anticipated abnormal conditions;
(b) sufficient and duly licensed operating personnel (i) are available, (ii) are adequately experienced and trained to operate the New ICT Services and Facilities properly and efficiently taking into consideration manufacturers' guidelines and specifications in full compliance with the provisions of Section 6.4 of this Agreement, and (iii) are capable of responding to abnormal conditions;
(c) preventive, routine, and non-routine maintenance and repairs (i) are performed on a basis that ensures reliable long-term and safe operation taking into account manufacturers' recommendations and (ii) are performed by knowledgeable, trained, and experienced personnel who are duly licensed and are using proper equipment, tools, and procedures;
(d) appropriate monitoring and testing is done to ensure the New ICT Services and Facilities are functioning as designed and in accordance with applicable SLAs and to ensure that equipment will function properly under both normal and abnormal conditions; and
(e) equipment is operated in a manner safe to workers, the general public, and the environment.
"Required Effective Date" means the date prescribed in the Project Milestone Schedule for the occurrence of the Effective Date, as such date may be changed from time to time in accordance with this Agreement.
"Required In-Service Date" means the date prescribed in the Project Milestone Schedule for the occurrence of the In-Service Date, as such date may be changed from time to time following the terms of this Agreement.
"Required Provisional In-Service Date" means the date prescribed in the Project Milestone Schedule for the occurrence of the Provisional In-Service Date, as such date may be changed from time to time in accordance with this Agreement.
"SEC" means the Philippine Securities and Exchange Commission.
"Service Level Agreement" or "SLA" means the required levels of service, contractual commitments, and operating standards for the Project that are stipulated in relevant provisions of this Agreement and specifically referred to in Section 7.3 and Schedule F (Service Level Agreements), or as may be further developed, revised or amended in accordance with this Agreement.
"Services" means the operational services to be provided by or on behalf of the Company for the Agency as set forth in Section 7 (Supply of Services) and Schedule F (Service Level Agreements).
"Shareholder" means any person owning any of the outstanding capital stock (of any class) of the Company, including any of the Initial Shareholders.
"Signature Date" means the date of signing of this Agreement as indicated in the preamble.
"Software" means (1) computer programs that comprise a series of instructions, rules, routines, or statements, regardless of the media in which recorded, that allow or cause a computer to perform a specific operation or series of operations; and (2) recorded information comprising source code listings, design details, algorithms, processes, flow charts, formulas, and related material that would enable the computer program to be produced, created, or compiled.
"Software Documentation" means owner's manuals, user's manuals, installation instructions, operating instructions, and other similar items, regardless of storage medium, that explain the capabilities of the computer Software or provide instructions for using the Software.
"Sponsor" means each of the Initial Shareholders and any transferee of the direct or indirect ownership of the outstanding capital stock of the Company.
"Tax" means any net income, gross income, gross receipts, sales, use, transfer, gains, ad valorem, franchise, profits, capital gains, license, value-added, withholding, payroll, employment, professional, business, excise, stamp, occupation, premium, property, environmental, windfall profit, documentary, registration, severance, custom duty, governmental fee, other like assessment or charge of any kind whatsoever imposed pursuant to the laws of any national, local, or foreign jurisdiction or by any political subdivision or taxing authority, together with any interest, penalty or other payment charged, and any liability for such amounts under all applicable laws as a result either of being a member of a combined, consolidated, unitary or affiliated group or of a contractual obligation to indemnify any person or other entity.
"Termination Date" means the date when any of the following events occurs first:
(a) termination of this Agreement pursuant to Section 2.3.1 (Termination due to Non-Occurrence of Effective Date);
(b) termination of this Agreement pursuant to Section 21.1 (Termination due to an Event of Default);
(c) termination of this Agreement pursuant to Section 21.2 (Termination due to Prolonged Force Majeure Events); or
(d) on the [●] ([●]th) anniversary of the Provisional Operations Start Date.
"Termination Notice" is defined in Section 21.1.1(a).
"Total Project Cost" has the meaning given to it in the BOT Law, which amount shall be calculated on the basis of information reasonably satisfactory to the Agency that may be provided by the Company.
"Unplanned Downtime" means any temporary loss of function of the New ICT Services and Facilities that is not a Planned Downtime and is not the result of a breach by the Company or its subcontractors of any of its obligations under this Agreement.
"Unplanned Downtime Period" is defined in Section 6.6.
"User Fee" means any amount charged to and paid by the Clients.