WITNESSETH:

WHEREAS, there is a need to improve the efficiency of processing,

analyzing and storing of the data collected and retained by the Land
Transportation Office through a modern management information system;

WHEREAS, the _____ is establishing its INFORMATION TECHNOLOGY

PROJECT, hereinafter referred to as the “IT Facilities”, pursuant to the
Medium Term Philippine Development Plan and the National Information
Technology Plan 2000;

WHEREAS, the _____ has secured the approval of the President of the
Republic of the Philippines upon the recommendation of the _____ and the
_____ for the implementation of the infrastructure facilities of the IT
Facilities (the “PROJECT”) under Republic Act No. 6957, as amended by
Republic Act No. 7718, otherwise known as the Build-Operate-Transfer Law,
and its Implementing Rules and Regulations on a Build-Own-Transfer (BOT)
scheme;

WHEREAS, the _____ Pre-qualification, Bids and Awards Committee

(PBAC) has conducted the pre-qualification and public bidding for the IT
Facilities pursuant to the Implementing Rules and Regulations of the BOT
Law;

WHEREAS; several contractors responded and _____ was among

those that pre-qualified and submitted its Technical and Financial Proposals
during the Public Bidding held on November 17, 1997 at the Land
Transportation Office, East Avenue, Quezon City;

WHEREAS, _____ bid was found by _____ to be the most responsive

and advantageous to the government;

WHEREAS, pursuant to _____ PBAC Resolution dated 11 December

1997 and Notice of Award dated 15 December 1997, the PBAC recommended
the award of the IT Facilities BOT Contract to the _____;

WHEREAS, for purposes of undertaking the Project, _____ formed and

incorporated the _____;
 NOW THEREFORE, for and in consideration of the foregoing premises
and all other commitments, obligations and undertakings herein assumed
and accepted by the Parties, the Parties have agreed as follows:

ARTICLE 1
DEFINITIONS

SEC 1.1 Build-Own-Transfer (BOT) – A contractual arrangement whereby

a project proponent is authorized to finance, construct, own, transfer and
maintain an infrastructure or development facility from which the proponent
is allowed to recover its total investment, operating and maintenance cost
plus a reasonable return thereon by collecting fees, rentals or other charges
from facility users: Provided, that all such projects upon recommendation of
the _____ of the _____ shall be approved by the President of the Philippines.
Under this project, the proponent which owns the assets of the facility mat
assign its operation and maintenance to a facility operator.

SEC 1.3 Commencement of the Project - _____ shall commence work

under this Agreement within 30 days from issuance of Notice to Proceed
(NTP), otherwise the project shall be considered as abandoned by the
Operator.

SEC 1.4 Completion of the Project – Completion of the Project shall be

defined as complete delivery, testing and operation of all components as
evidenced by the issuance of the final CAIF subject to the conditions as
stipulated in Article 16.

SEC 1.6 Effective Date of Agreement – The Agreement shall be made

effective upon compliance with all conditions precedent or REQUIRED as
may be provided in this Agreement.

SEC 1.7 “Force Majeure” shall have the meaning specified in Article 17.
ARTICLE 2
SCOPE OF WORK

Sec 2.1 DESIGN, CONSTRUCTION, OPERATION AND MAINTENANCE OF

INFORMATION TECHNOLOGY SYSTEM. CONTRACTOR shall cause and be
responsible for the design, installation, adaptation, customization,
completion, testing and commissioning, operation, and maintenance of the
entire information system that is constructed and installed in accordance
with this Agreement and is capable of operation in accordance with the
Operating Parameters. The details and the scope of the Project to be
undertaken including all preliminary specifications are set out in further detail
in ANNEX “A” (Project Scope and Specifications). However, the parties
hereby agree that the Data Base shall remain the property of _____
throughout and after the term of this Agreement and ownership thereof shall
not transfer to the CONTRACTOR. The CONTRACTOR merely has access to
the Data Base and can use the Data Base for the operation of the IT Facility.

SEC 2.2 COST OF CONSTRUCTION AND INSTALLATION. All costs of the

CONTRACTOR in connection with the construction, installation and operation
and maintenance of the IT Facilities as provided above shall be borne by the
CONTRACTOR. All necessary funding including any available preferential
credits shall be arranged by and be the responsibility of the CONTRACTOR.

Following the In Service Date, the IT Facilities shall be capable

of operating within the Operating Parameters set out in ANNEX “A”
(Operating Parameters).

ARTICLE 4
MAIN UNDERTAKINGS

Sec 4.1 Through and subject to the terms and conditions of this BOO
Agreement, _____ hereby grants the CONTRACTOR the exclusive right TO
PROVIDE IT SERVICES TO DOTC/LTO on a BOT scheme for a Concession
Period of 10 years commencing from the In-Service Date of the IT Facilities.
Unless renewed or extended the concession period shall end on the tenth
(10th) anniversary year of the In-Service Date.
 AT THE OPTION OF _____, this BOT Agreement ma be extended
through negotiation and mutual agreement between the _____ and
CONTRACTOR but the total concession period shall not exceed 50 years,
such extension to be subject to the Implementing Rules and Regulations of
the BOT Law. The execution of a renewal or extension Agreement shall be
effective upon the approval of the DOTC Secretary.

FOR PURPOSES HEREOF, THE PARTY INTERESTED TO RENEW

THIS AGREEMENT SHALL INDICATE IN WRITING ITS DESIRE TO RENEW
THE AGREEMENT BEYOND ITS TEN-YEAR TERM AT LEAST TWELVE
MONTHS PRIOR O THE EXPIRY OF THE ORIGINAL CONRACT. IF THE
REQUEST IS COMING FROM THE CONTRACTOR, _____ SHALL WITHIN
THIRTY DAYS DECIDE WHETHER IT WANTS TO RENW THE AGREEMENT.
IF SO, BOTH PARITES WILL SIT DOWN IMMEDIATELY TO NEGOTIATE IN
GOOD FAITH TO ARRIVE AT A MUTUALLY ACCEPTABLE AGREEMENT.

SEC 4.2 Notwithstanding any provision in this Agreement to the contrary,

_____ reserves the right to exercise full regulatory control over the IT
Facilities in the discharge of its mandates under the law. The CONTRACTOR
shall not be allowed to keep any copy thereof after the term of this
Agreement.

SEC 4.3 The CONTRACTOR shall be responsible for and shall bear all
costs incurred by it in connection with the performance of its obligations
hereunder.

SEC 4.4 Throughout the entire duration of this Agreement, the

CONTRACTOR shall, directly or indirectly, own the IT FACILITIES and all
other equipment, fixtures and fittings used in connection with the IT
FACILITIES and supplied by the CONTRACTOR at its own cost.

ARTICLE 5
UNDERTAKINGS OF THE CONTRACTOR

SEC 5.1 Non-Disruption – Public transaction shall not be hampered during

the period of concession or reduced to the minimum when necessary.
 The CONTRACTOR shall be responsible for the financing
development, construction, supply, operation, maintenance, and
management of the IT Facilities of _____. The CONTRACTOR shall see to it
that that IT Facilities are in compliance with the technical and operating
specifications as stated in the Annex “A”.

SEC 5.2 The CONTRACTOR shall complete the IT Facilities within the
timeframe as stated in ANNEXT “D” (PROJECT MILESTONE DATES) hereof
and upon such completion, present the IT Facilities to the _____ along with
an application requesting of a Certification of Acceptance of an IT Facility
(CAIF) as defined in Article 16.4 herein. Except when delays occur due to
events as defined in Article 17.1(a) and 17.1(b), herein or unless otherwise
approved by the DOTC/LTO, the schedule stipulated for the completion of
the IT Facilities shall not be extended. All attendant costs due to delay,
except for delays defined in Article 17.1(a) and 17.1(b), shall be borne by
the contractor. In the event the CONTRACTOR requests for an extension of
time the same shall be made at least 90 days before the deadline expires.

SEC 5.3 Upon receipt of the first CAIF from _____, the CONTRACTOR
shall commence to operate, maintain and manage the IT Facilities and to
provide the IT-based Services so required by the _____ and in accordance
with the schedule set forth in Annex “D”.

SEC 5.4 The CONTRACTOR may not, without the consent of _____
transfer all or any of its obligations hereunder. However, the CONTRACTOR
may, for purposes of arranging or rearranging, financing for the IT Facilities,
assign or transfer to any person providing financing to the IT Facilities all or
any part of its rights and benefits hereunder but not its obligations. _____
shall duly acknowledge any such assignment or transfer to which it is given
notice.

ARTICLE 6
PERFORMANCE SECURITY

SEC 6.1 The CONTRACTOR shall post two performance securities in the
form of cash, manager’s check, cashier’s check, bank draft confirmed by a
local bank acceptable to _____, irrevocable Letter of Credit issued by a
reputable bank acceptable to _____, provided that if a Letter of Credit is
issued by a foreign bank, it must be confirmed by a local bank or off-shore
banking unit, a surety bond callable upon demand and issued by _____ or
by surety and insurance companies accredited by the Insurance Commission;
or a combination thereof. The issuing bank, surety or insurance company
concerned if of foreign nationality shall be required to submit itself to
Philipippine courts. Failure of the CONTRACTOR to post Performance
Securities shall be sufficient ground for _____to cancel this agreement.
Should _____, under any of the conditions stipulated under Article 19 of this
Agreement (Termination) terminate this Agreement, the Performance
Securities shall be forfeited in favor of _____, without any need for judicial
action. Furthermore, any changes in this Agreement shall not require the
prior approval of the surety and shall in no way annul, release or affect the
liability of the CONTRACTOR. The following conditions shall also be followed
in relation to the Performance Securities, namely that:

a. Upon signing of this Agreement, the CONTRACTOR shall post one

performance Security in Philippine Currency equivalent to _____, which shall
remain valid and in full effect until the issuance of the final CAIF as defined
in Article 16.4. It shall answer for and guarantee the completion of the
Project in accordance with the performance standards and the timetable in
Annex “D”.

b. Upon issuance of the first CAIF, the CONTRACTOR shall post on

performance Security in Philippine Currency equivalent to _____ which shall
remain valid and in full effect for a concession period of ten (10) years
commencing from the first In-Service date of the IT Facilities.

c. Each Performance Security may be released by _____ after the issuance

of the Certificate of Completion, provided that there are no claims filed
against the CONTRACTOR or the surety company.

d. The right to institute action on the penal bond pursuant to R.A. 3688 of
any individual, firm, partnership, corporation and/or association supplying
the CONTRACTOR in relation with the execution of the IT Facilities shall
apply.

e. In the event the scheduled deadline is extended as referred to in Article 3

Section 2 herein, the Performance Bond shall be extended accordingly.
ARTICLE 7
FINANCING AND OPERATION

SEC 7.1 For purposes of financing the construction and operations of the
IT Facilities, the CONTRACTOR has the option to assign its rights and
benefits under this BOT Agreement to the financial institutions that will
provide financing provided by the Lenders, and the Parties as may be
required, shall enter into such agreements as may be necessary and
appropriate to give effect to this Section.

SEC 7.2 Subject to the prior approval of DOTC/LTO, the CONTRACTOR

has the option to subcontract another entity to operate, maintain and
manage the whole or a portion of the IT facilities and that entity shall
hereinafter be referred to as the “Facility Operator”.

SEC 7.3 Subject to the prior approval of _____, the CONTRACTOR has
the option to subcontract to another entity or entities acceptable to the
_____ the construction, design, and installation of a portion or the whole of
the IT Facilities, provided that the IT Facilities are completed in compliance
with the technical requirements and specifications as stated in ANNEX “D”,
and provided further that subcontracting of some or all of the construction,
design and installation of the IT Facilities shall not excuse or avoid the
primary liability of the CONTRACTOR to the _____ under this Agreement.

ARTICLE 8
WARRANTIES OF THE CONTRACTOR

SEC 8.1 The CONTRACTOR warrants to the _____ that:

a. It is a corporation duly organized and validly existing under
the laws of the Republic of the Philippines and has all requisite power,
authority and legal right to carry on the business which it now conducts or
proposes to conduct.

b. It has full power, authority and legal right to execute and

deliver this BOT Agreement and to perform its obligations hereunder, and
has taken all appropriate and necessary corporate and legal action and
obtained all necessary permits and approvals for the execution, delivery and
performance of this Agreement and all other agreements, instruments or
documents contemplated hereunder.

c. The CONTRACTOR’s signatory to this BOT Agreement is of

age, has full legal capacity and has been duly authorized by the board of
directors of the CONTRACTOR to sign, execute and delivery this BOT
Agreement for and on behalf of the CONTRACTOR.

d. This BOT Agreement constitutes the legal, valid and binding

obligation of the CONTRACTOR, enforceable against the CONTRACTOR in
accordance with its terms. This BOO Agreement is in satisfactory and proper
legal form under the laws of the Republic of the Philippines.

e. The execution, delivery and performance of this Agreement

and the other documents herein referred to do not violate any provision of
law, rule, regulation or order of decree of any court, tribunal or government
authority, bureau or agency, or of the charter, by-laws or corporate rules of
any corporation, or any indenture contract or other undertaking to which the
contractor is a party.

SEC 8.2 The CONTRACTOR further warrants to the _____ that:

a. The equipment to be provided by the CONTRACTOR for the
IT Facilities are brand new. The CONTRACTOR further warrants that all
materials which the OCNTRACTOR shall furnish, supply, manufacture, or
deliver under this BOT Agreement are of good quality and are genuine.

b. The equipment and facilities which the CONTRACTOR shall

furnish as stated under the appropriate portions of the Contract Documents
shall be in such quantities and with such capacities as would make the same
capable of operating in accordance with the Operating Parameters in Annex
“A”.

c. The CONTRACTOR shall make available for the IT Facilities the

replacement spare parts, improvements, modifications and/or new models
of the equipment, software and peripherals as agreed upon and specified in
the Contract Documents.
 d. If, after the acceptance of all the IT Facilities, the equipment
provided by the CONTRACTOR shall prove unsatisfactory by not meeting the
Operating Parameters set forth in Annex “A” (this is the Annex “A” referred
to in Sec. 5.1), the CONTRACTOR shall replace, at its own cost, the existing
equipment and secure equipment of better quality and capacity as world
enable the IT Facilities to meet the operating Parameters.

e. The CONTRACTOR shall not make or cause any alteration or

change in specifications in the IT Facilities during the term of this Agreement
without the written consent of the DOTC/LTO;

SEC 8.3 The Contractor also warrants to the _____ that:

a. The CONTRACTOR shall be primarily responsible for the
importation into the Philippines of the items needed to be imported as
determined by the CONTRACTOR and as may be stated in the appropriate
portions of the Contract Documents.

b. The CONTRACTOR has not given or promised to give any gift

or consideration to any employee or official of the _____ or of any Philippine
government instrumentality to obtain this BOT Agreement, and that the acts
performed in good faith in accordance with this BOT Agreement shall not
result directly or indirectly in any violation of the Anti-Graft and Corrupt
Practice Act.

SEC 8.4 The parties shall determine and agree upon a set of procedures
for problem determination, problem analysis and warranty service requests.
The CONTRACTOR will promptly respond to all requests in line with servicing
the IT Facilities in order to meet the specifications set out in the Operating
Parameters.

ARTICLE 9
RESPONSIBILITIES OF THE CONTRACTOR

SEC 9.1 LIMIT OF LIABILITY. The CONTRACTOR’s liability to _____

arising from any breach of this Agreement or otherwise in connection with
the IT Facilities shall be limited to payments as provided in Article 19.
SEC 9.2 CONTRACTOR’s INDEMNITY. CONTRACTOR shall indemnify and
hold the _____, its officers and employees harmless against any claims of
any person who directly or indirectly suffers as a result of (i) an interruption
of the operations of the IT Facilities or any other disruption arising out of or
in connection with this Agreement and (ii) any of the DOTC/LTO’s officers or
employees’ actions or omissions in connection with the same; provided, that
the said interruption of the operations directly results from the
CONTRACTOR’s act or omission; and provided, further that the _____, its
officers and employees are not at furl or negligent. CONTRACTOR shall
indemnify _____ against any loss, cost or expense resulting from damage to
the IT Facilities or from any interruption or disruption in the operations of
the IT Facilities directly resulting from the CONTRACTOR’s act or omissions;
provided that the _____, its officers and employees are not at fault or
negligent.

SEC 9.3 CROSS INDEMNITY. _____ and the CONTRACTOR shall each
indemnify, defend and save harmless the other, its directors, officers,
employees and agents (including but not limited to affiliates and contractors
and their employees) from and against all liabilities, damages, losses,
penalties, claims, demands, suits, costs, expenses and proceeding of any
nature whatsoever for bodily injury (including death) or property damage
(but not economic loss or any other consequential damage) that result from
the performance under this Agreement by or on behalf of that party. This
indemnity shall include, with respect to the CONTRACTOR, the design,
construction, financing, purchase acquisition, acceptance, delivery,
ownership, leasing, maintenance, repair, reconditioning, return,
abandonment or other application or disposition of the IT Facilities and any
equipment , materials or supplies used therein, except to the extent that
such injury and/or any damage is attributable to the negligent or intentional
act or omission of the party seeking to be indemnified or its directors,
officers, employees, representatives or agents in the event such injury or
damage results from the joint or concurrent negligent or intentional act or
omission of the parties each shall be liable under this indemnification in
proportion to its relative degree of fault.

SEC 9.4 In the event of loss or damage to any equipment of the IT

Facilities the CONTRACTOR shale provide temporary replacement pending
the repair of damaged equipment in order that the IT Facilities shall continue
to meet the Operating Parameters. The CONTRACTOR shall be responsible
for all damages to any property belonging to the government or third parties
which are directly attributable to the gross negligence of the CONTRACTOR.

SEC 9.5 Unless caused by Force Majeure events as defined n this

Agreement, the CONTRACTOR shall be allowed a maximum of one (1) day
downtime every month preferably during non-work days/hours. A portion of
this downtime may be scheduled by CONTRACTOR in order to provide
maintenance and repair services to the IT Facilities. The CONTRACTOR shall
give the _____ at least 24 hours notice prior to any scheduled downtime. In
case the CONTRACTOR exceeds by 20% in a year the allowable downtime
indicated above, such an occurrence will constitute an event of default under
Article 18.

SEC 9.6 The CONTRACTOR shall, upon the expiration of this Agreement,
be responsible for withdrawing its facilities from the premises and/or site/s
and for cleaning up the same within a reasonable period, the costs for which
shall be shouldered by the CONTRACTOR.

ARTICLE 10
UNDERTAKINGS OF THE _____

SEC 10.1 The _____ shall assist the CONTRACTOR in obtaining any and all
Philippines governmental and/or other authorizations, approvals, licenses,
permits, and /or consents which may be required and/or necessary to enable
the CONTRACTOR to perform its obligations under this BOT Agreement.

SEC 10.2 The _____ shall assist the CONTRACTOR in obtaining any and all
Philippines governmental authorizations, approvals, licenses, permits, and or
consents which may be required for the financing of this Project including
without limitation any authorization, approval, license, permit, and/or
consent from the Bangko Stntral ng Pilipinas and/or the Department of
Finance.

SEC 10.3 The _____ shall assist the CONTRACTOR in availing of any
incentives or privileges or the like provided under Philippine law, including
without limitation, the Philippine Omnibus Investments Code.
SEC 10.4 The _____ shall be deemed to have complied with its
undertakings under Sections 10.2 and 10.3 whether the _____ efforts at
assisting the CONTRACTOR produces the intended out come so long as in
assisting the CONTRACTOR the _____ acts in good faith and exercises its
best endeavors.

ARTICLE 11
PAYMENT SCHEDULE

SEC 11.1 The _____ shall pay the CONTRACTOR in Philippine currency in
a local bank within 30 calendar days from receipt of billing, based on the
number of motor vehicles registration and the number of drivers’ licensing
transaction handled, the inspection report and other documents which may
be required by _____ and the _____. There shall be no more than two
billings a month. Upon final payment under this Agreement, the
CONTRACTOR shall issue a certificate releasing _____ from any further
obligation under this Contract.

SEC 11.2 Any and all payments made to the CONTRACTOR under this
Agreement shall be subject to a retention fee of five percent (5%) (herein
referred to as the “Retention Fee”). Such retention shall be based on the
total amount due to the CONTRACTOR, prior to any deduction, and shall be
taken from every progress payment until the end of the first year of
operation or until such time as the funds accumulated from the retention fee
has reached _____ whichever comes first.

The funds accumulated from the retention fee may be used by

the CONTRACTOR to undertake exclusively the necessary and appropriate
design and performance standards prescribed in Annex “A” (this is the Annex
“A” referred to in Sec. 5.1 – Operating Parameters) in order to ensure that
the IT Facility operates at the desired level of service. The fund will maintain
a minimum balance of _____. As such, any drawdown from the fund will be
replenished through a resumption of the collection of a retention fee. The
aforementioned retention money shall be deposited for the account of the
CONTRACTOR on a bank agreed upon by _____ and the CONTRACTOR,
which bank shall hold the same in escrow in favor of the _____. The interest
earned on said account shall accrue to the CONTRACTOR.
 The total retention money shall be released to CONTRACTOR sixty (60
days after the last day of the concession period, subject to the
CONTRACTOR’s compliance with the clean-up requirement in Section 9.6
hereof.

ARTICLE 12
DISPUTES

ARTICLE 13
WARRANTIES AND RESPONSIBILITES OF THE _____

SEC 13.1 The _____ warrants to the CONTRACTOR:

a. That the _____ is duly organized and validly existing as an
agency of the Philippine Government and has all requisite power, authority
and legal right to execute and deliver this BOT Agreement and to perform
its obligations thereunder.

b. That _____ has taken all appropriate legal and/or other action
which may be required and/or appropriate to authorize the execution,
delivery and performance of this BOT Agreement and any and all other
agreements, instruments, or documents contemplated hereunder.

c. That this BOT Agreement constitutes the legal, valid and biding
obligation of the _____, enforceable against the _____ in accordance with
its terms. This BOT Agreement is in satisfactory and proper legal form under
the laws of the Republic of the Philippines.

d. That the _____ is subject to civil and commercial law with

respect to its obligations under this BOT Agreement or any other document
contemplated hereunder, and that the _____ does not enjoy any rights of
immunity from suit, judgment or execution or from any rights of immunity
from suit, judgment or execution or from any other legal process in respect
of its obligations under this BOT Agreement or any other document
contemplated hereunder.

Notwithstanding the foregoing, the _____ does not waive any

such immunity in respect of the assets of the Republic of the Philippines
which are (i) used by a diplomatic or consular mission of the Philippines, (ii)
of a military character and under control of a military authority or defense
agency, and (iii) located in the Philippines and dedicated to a public or
governmental use as distinguished from a patrimonial asset, banking asset,
industrial asset or asset dedicated to commercial use.

SEC 13.2 The _____ shall be responsible for providing the CONTRACTOR
with access to the premises of the _____ and availability of sites for setting
up IT facilities. _____ likewise warrants its full cooperation in providing the
materials from which the database shall be created. Furthermore, when any
of the services performed in line with this BOT Agreement by the
CONTRACTOR includes the use by the CONTRACTOR of any premises,
hardware, software or other items provided by the _____, the _____
warrants that:

a. Unless otherwise notified by the _____, it has all the necessary

rights, expressed or otherwise, to enable such premises to be altered and
such items to be moved, used, copied or distributed by the CONTRACTOR,
as necessary, during the course of this BOT Agreement without infringing on
any third party rights. Should any facilities of a permanent nature be built by
the CONTRACTOR under this Agreement on a land rented by _____, the
CONTRACTOR should not be held liable for disruptions in operations caused
by the need to relocate and set up facilities anew after the expiration of the
lease period.

b. Unless otherwise notified by the _____, the use or disclosure

of such premises, hardware, software or other items by the CONTRACTOR
during the course of this BOT Agreement will not involve any breach of any
confidential or contractual obligations.

ARTICLE 15
INSURANCE

SEC 15.1 The CONTRACTOR shall be responsible for ensuring that there is
insurance effected as provided in the Insurance Code of the Philippines and
shall provide _____ certified true copies of all policies of insurance effected
by it. Unless _____ has failed to perform any of its payment obligations
hereunder and such failure is continuing, the proceeds of claims against such
insurance, except third party liability and workmen’s compensation insurance
with respect to damage or other Breakdown in the IT Facilities shall b applied
by the CONTRACTOR to the extent necessary to repair or restore the IT
Facilities to its previous conditions.

SEC 15.2 In the event that this Agreement is revoked, canceled, or

terminated by the GOVERNMENT through no fault of the CONTRACTOR or
by mutual agreement, _____ through the _____ shall compensate the
CONTRACTOR for its actual expenses incurred n the Project plus a
reasonable rate of return thereon not exceeding that stated in this
Agreement as of date of termination, provided that the interest of the
Government in these instances shall be duly insured with the Government
Service Insurance System, provided further that the cost of the insurance
coverage shall be included in the terms and conditions of the approved
contract.

ARITCLE 17
FORCE MAJEURE

SEC 17.1 FORCE MAJEURE. No failure or omission to carry out or observe

any of the terms, provisions or conditions of this Agreement shall give rise
to any claim by any party hereto against any other party hereto, or be
deemed to be a breach of this Agreement, if the same shall be caused by or
arise out of:

a. Other than as referred to in paragraph (b) below, any war,

declared or not, or hostilities, or belligerence, blockade, revolution,
insurrection, riot, public disorder, expropriation, requisition, confiscation or
nationalization, export or import restrictions by any governmental
authorities, closing of harbors, docks, canals, or other assistance or adjuncts
of the shipping or navigation of or within any place, rationing or allocation
whether imposed by law, decree or regulation by, or by compliance of
industry at the insistence of any governmental authority or fire, earthquake,
unusual flood, volcanic activity, storm, typhoons, lightning, tide (other than
normal tides), tsunamis, perils of the sea, accidents of navigation or
breakdown or injury of vessels, accidents to harbors, docks, canals, or other
assistance to or adjuncts of shipping or navigation, epidemic, quarantine
strikes or combination of workmen, lockouts or other labor disturbances or
any other event, matter or thin, wherever occurring, which shall not be
within the reasonable control of either party hereto; or

b. war, declared or not or hostilities occurring in or involving the

Republic of the Philippines, or of belligerence blockade revolution,
insurrection, riot, public disorder, expropriation, requisition, confiscation or
nationalization by or occurring in or involving the Republic of the Philippines,
export or import restrictions by any governmental, regional or municipal
authorities of or within the Republic of the Philippines, closing of harbors,
docks, canals, or other assistance to or adjuncts of the shipping or navigation
of or within the Republic of the Philippines, rationing or allocation, whether
imposed by law, decree or regulation by, or by compliance of, industry at
the insistence of any governmental authority o or within the Republic of the
Philippines, or any other event, matter or thing, wherever occurring, which
shall be within the reasonable control of _____ or _____ or any agency or
regional or municipal authority thereof, each of the foregoing events,
matters or things being called “Force Majeure” in this Agreement.

SEC 17.2 EXCEPTIONS. Notwithstanding Article 17.1 _____ (i) shall not be
entitled to invoke for itself Force Majeure in the cases mention in sub-
paragraph (b) of Article 17.1; and (ii) shall not be relieved of its obligation
to make payments of fees as provided in Article 14 by the occurrence of any
Force Majeure mentioned in sub-paragraph (b) of Article 17.1 whether
affecting _____ or the CONTRACTOR.

SEC 17.3 PROCEDURE. The party invoking Force Majeure shall:

a. notify the other party as soon as reasonably possibly by telex,
fax or cable of the nature of the Force Majeure and the extent to which the
Force Majeure suspends the affected party’s obligations under this
Agreement; and

b. resume performance of tis obligations as soon as possible after

the Force Majeure condition no longer exists, and shall formally notify the
other party of such resumption.

SEC 17.4 REVISED TIMETABLE. If Force Majeure applies prior to the In

Service Date the parties will meet to discuss a revised timetable for the
completion of the Projects indicating the proposed completion dates of the
IT Facilities. IF the Force Majeure has lasted for a period in excess of 180
days and such Force Majeure falls under sub-paragraph (b) of Article 17.1
then the provisions of Article 17.6 shall apply.

SEC 17.5 COOPERATION PERIOD. If Force Majeure applies by the

occurrence of any Force Majeure mentioned in sub-paragraph (a0 of Article
17.1 during the Cooperation Period, the Cooperation Period shall be
extended by a period equal to that during which the effect of the Force
Majeure applies, provided that if such effect lasts for a period in excess of
180 days, then the parties hereto will meet to discuss the basis and terms
upon which the arrangements set out in this Agreement may be continued.

SEC 17.6 CONSULTATION. The parties hereto will consult with each other
and take all reasonable steps to minimize the losses of either party resulting
from Force Majeure.

SEC 17.7 If an event of Force Majeure results in damage to the IT

Facilities, the CONTRACTOR shall be responsible for taking such actions and
precautions as may be required or necessary to mitigate any resulting
damage or loss. Insurance proceeds should first be applied to the restoration
of the facilities.

SEC 17.8 If the CONTRACTRO serves notice on the _____ that the
CONTRACTOR is unable to raise funds for any required reconstruction,
replacement, and or repair work on the damaged IT Facilities, _____ may
undertake or perform such reconstruction, replacement and or repair work
in order to reinstate the damaged IT Facilities to the condition prior to the
occurrence of the Force Majeure, subject to reimbursement by the
CONTRACTOR and without prejudice to the payment of such reasonable just
compensation to the CONTRACTOR as the parties may agree upon under
Article 4.1

SEC 17.9 In order to avoid any doubt, the Parties agree that upon
occurrence of any event of Force Majeure affecting the CONTRACTOR’s
obligations relating to the operation, maintenance and or management of
the IT Facilities the CONTRACTOR shall nonetheless continue to be
responsible for performing such of its obligations relating to the operation,
maintenance and or management as are still possible of performance,
whether wholly or partially. Irrespective of the occurrence of an event of
Force Majeure, the CONTRACTOR shall continue to be responsible for the
safety of the IT Facilities and its users. Unless otherwise agreed upon by the
Parties, the occurrence of an event of Force Majeure affecting the
CONTRACTOR’s obligations relating to the operation, maintenance and
management of the IT Facilities shall not result in the closure of the damaged
IT Facilities, provided that if a temporary closure is unavoidable so as to
make possible the performance of any required reconstruction, replacement
and or repair work, the affected IT Facilities shall be made operational as
soon as possible by taking such measures and precautions as are necessary
under the circumstances.

ARTICLE 18
DEFAULT

SEC 18.1 CONTRACTOR’S DEFAULT. The occurrence f any of the following

events shall constitute CONTRACTOR’s Default:
a. CONTRACTOR shall fail to perform any material covenant,
agreement or obligation hereunder within 45 days after receipt by
CONTRACTOR of a notice of default specifying the same; provided, however
that such period shall be extended if the matter complained of in such notice
may be corrected but cannot reasonably be corrected within 45 days and
CONTRACTOR begins to correct such matter within such 45 days and
thereafter prosecutes the correction to completion with reasonable diligence.

b. CONTRACTOR in its reports to be submitted to _____ shall

have knowingly and intentionally misrepresented or omitted any material
information required to be included in such reports and shall fail to correct
the same within 45 days after receipt by CONTRACTOR of the notice of
default; provided, however, that such period shall be extended if the matter
complained of in such notice may be corrected but cannot reasonably be
corrected within 45 days and CONTRACTOR begins to correct such matter
within such 45 days and thereafter prosecutes the correction to completion
with reasonable diligence.

c. An involuntary case or other proceeding shall have been

commenced against CONTRACTOR seeking liquidation, reorganization,
dissolution, winding up, a composition or arrangement with creditors, a
readjustment of debts, or other relief with respect to CONTRACTOR or
CONTRACTOR’s debts under any bankruptcy, insolvency, or other similar law
now or hereafter in effect or seeking the appointment of a trustees, receiver,
liquidator, or custodian, or other similar official for the CONTRACTOR or any
substantial part of CONTRACTO’s assets, or like relief, or the issuance of a
writ of attachment, execution, or similar process involving the majority
portions of the CONTRACTOR’s assets and such involuntary case or other
proceeding shall not be contested by CONTRACTOR in good faith or shall
remain undismissed and unstayed for a period of ninety days.

d. In case of delay in construction in excess of 20% of the

stipulated construction period, or failure of the CONTRACTOR to finish the
IT Facility in accordance with the Project Scope and Specifications.

e. In the event of a pattern of continuing or repeated non-

compliance, willful violation, or non-performance of other terms and
conditions hereof which is hereby deemed a material breach of this
Agreement.

f. In case of any representation or warranty made by

CONTRACTOR and relied upon by _____ to its detriment turning out to be
false in any material respect.

SEC 18.2 _____ DEFAULT The occurrence of any of the following events
shall constitute _____ Default:
a. _____ terminates or cancels this Agreement or any other
Agreements executed pursuant to this Project without valid cause.

b. Any representation or warranty made by _____ and relied

upon by CONTRACTOR to its detriment shall be false in any material respect.

c. _____ shall fail to perform any material covenant, agreement

or obligation hereunder or under any related Agreement within 45 days after
receipt of a notice of default specifying the same; provided, however, that
such period shall be extended if the matter complained of in such notice may
be corrected but cannot reasonably be corrected within 45 days and _____
begins to correct such matter within such 45 days and thereafter prosecutes
the correction to completion with reasonable diligence.
 d. The promulgation of any law or regulation by the Republic of
the Philippines, or any agency or other body under the control of the
Government of the Republic of the Philippines, or any regional or municipal
authority thereof, coming to effect after 1998 as a result of which any law
or regulation (including any official interpretation thereof) upon which the
CONTRACTOR has relied in entering into this Agreement at the date hereof
is amended, modified or repealed, materially reducing, prejudicing,
otherwise adversely affecting the interest of the CONTRACTOR in the IT
Facilities and/or the CONTRACTOR’s financial returns (net of tax or other
imposition, including, without limitation any withholding or remittance tax on
the payment of dividends) on its investment, including without limitation,
any restriction on its ability to remit funds in foreign currency outside the
Philippines, or otherwise rendering the CONTRACTOR incapable of
performing its undertakings under this Agreement, in which event the parties
hereto shall meet and endeavor to agree on amendments to this Agreement,
and if after 90 days no such agreement has been reached, the provisions of
Article 21 (Disputes) shall apply.

ARTICLE 19
TERMINATION

SEC 19.1 In case a party commits an act constituting an event of default,

the non-defaulting party may terminate this Agreement by serving a written
notice to the defaulting party a period of 45 days within which to rectify the
default to the satisfaction of the non-defaulting party. If the default is not
remedied within this period to the satisfaction of the non-defaulting party,
then the latter will serve upon the former a written notice of termination
indicating the effective date of termination.

SEC 19.2 If this BOT Agreement is terminated by reason of the

CONRACTOR’s Default, _____ shall have the following options:

a. _____ may allow the CONTRACTOR’s Unpaid Creditors who

hold a lien on the IT Facility to foreclose on the Project and to terminate this
Agreement and/or designate a new Contractor for the Facility, provided the
designated Contractor is qualified under existing laws and acceptable to
_____. This new Contractor shall hereinafter be referred to as the “Substitute
Contractor”. The Substitutes Contractor shall assume all of the
CONTRACTOR’s rights and privileges as well as all of the CONTRACTOR’s
obligations, duties, and responsibilities hereunder; provided. However that
the _____ shall at all times, and at its sole option, have the right to invoke
and exercise any other remedy which may be available to the _____ under
any applicable laws, rules and or regulations which may be in effect at any
times and form time to time.

_____ Shall cooperate with the Creditors with a view to

facilitating the choice of a Substitute Contractor, who shall takeover the
operation, maintenance and management of the IT facilities, within 3 months
from the CONTRACTPR’s receipt of notice of termination from the _____. If
for any reason whatsoever, _____ and the Creditors should fail or be unable
to select the Substitute Contractor within the 3-month period contemplated
herein, _____ may select a Substitute Contractor. The Substituted Contactor
shall have all the rights and obligations of the previous CONTRACTOR as
contained in this Agreement.

b. If the Creditors waive their rights to foreclose the IT facilities

and terminate this Agreement and jointly with _____ to appoint and
Substitute Contractor or exercise any other remedy under the financing
agreements, then _____ may take over the Project and assume all remaining
liabilities of the Contractor. In this regard, the CONTRACTOR shall assign all
its rights and interests to the Project and under this Agreement to _____.
After said assignment, the CONTRACTOR shall have no other obligation to
the _____.

In all cases of termination due to the default of the

CONTRACTOR, the CONTRACTOR shall pay _____ actual and compensatory
damages which may be charged against the Performance Securities and, if
found insufficient, the _____ at its option may avail of such remedies through
arbitration proceedings under Article 21.

SEC 19.3 If this BOT Agreement is terminated by the CONTRACTOR by

reason of the _____ Default, the _____ shall:
a. Be obligated to take over the IT Facilities on an “as-is-where-
is” basis, and shall forthwith assume all attendant liabilities thereof; and
 b. Pay liquidated damages to the CONTRACTOR equivalent to
the following amounts, which may be charged to the insurance proceeds,
referred to in Section 15.2 hereof:
i. In the event of termination prior to completion of the
construction of the IT Facilities, damages shall be paid equivalent to the
Value of the Completed Construction, plus 10% thereof, minus the aggregate
amount of the attendant liabilities assumed by the _____. The amount of
such compensation shall be determined as of the date of the notice of
termination and shall become due and demandable 90 days after the date
of the notice of termination. Under this BOT Agreement, the term “Value of
the Completed Construction” shall mean the aggregate of all reasonable
costs and expenses incurred by the CONTRACTOR in connection with, in
relation to and or by reason of the IT Facilities, including without limitation
all interest and capitalized interest and other reasonable financing costs and
expenses incurred by the CONTRACTOR in connection with the Financiers,
as certified by a reputable accounting firm to be appointed by the
CONTRACTOR subject to the approval by the _____ which approval shall not
be unreasonably withheld.

ii. In the event of a termination after completion of

construction of the IT Facilities, Just Compensation shall be paid equivalent
to the present value of the net income which the CONTRACTOR expects to
earn or realize during the unexpired or remaining term of this BOT
Agreement using a discount rate of 15% as showing in the financial
projections of the CONTRAVTOR (Annex “E”).

SEC 19.4 For avoidance of doubt, the respective obligations of _____ and
the CONTRACTOR in respect of the termination of this BOT Agreement as
set forth in Article 19 herein shall survive the termination hereof.

SEC 19.5 Upon the expiration or earlier termination of this BOT

Agreement, and without prejudice to any obligations of the relevant party
under Article 19 herein or to any claims which any party may have against
the other Party prior to the termination date, all rights and entitlements of
the CONTRACTOR in respect of the Construction of the IT Facilities shall
revert to vest in our remain vested in the CONTRACTOR as the case may be
and:
 a. In the case of termination of this BOT Agreement prior to the
completion of the IT Facilities, the CONTRACTOR shall cease all construction
of the IT Facilities and remove from the areas of the construction all its
workmen, employees, agents and sub-contractors and vacate it completely;
and
b. The CONTRACTOR shall surrender to the _____ control and
physical possession of the completed portions of the IT Facilities upon
payment of Just Compensation.

ARTICLE 20
REQUISITON

SEC 20.1 In the event of a Requisition, this BOT Agreement shall be legally
terminated and such termination shall become effective upon fulfillment by
the _____ of its obligations as set forth in Section 19.3 herein. Under this
BOT Agreement, the term “Requisition” shall mean the taking by
governmental action of the ownership and or control of the CONTRACTOR,
and or a majority of the CONTRACTOR’s shares which may be issued and
outstanding at any time and from time to time as by nationalization,
expropriation, sequestration, confiscation, and or other equivalent process.

ARTICLE 21
DISPUTES

SEC 21.1 Any dispute or controversy of any kind whatsoever between the
_____ and the CONTRACTOR (such dispute or controversy being referred to
herein as a “Dispute”) which may arise out of or in connection with this BOT
Agreement, in the first instance shall be settled within 60 days by mutual
discussion as contemplated under Article 21 Section 1 herein, the Dispute
shall be settled with finality by an arbitral tribunal operating under
International Law, hereinafter referred to as the “Tribunal”, under the
UNCITRAL Arbitration Rules contained in Resolution 31/98 adopted by the
United Nations General Assembly on December 15, 1976 and entitled
“Arbitration Rules on the United Nations Commission on International Trade
Law”. The _____ and the CONTRACTOR undertake to abide by and
implement the arbitration award. The place of arbitration shall be Quezon
City, Philippines, or such other place as may mutually be agreed upon by
both parties. The arbitration proceeding shall be conducted in the English
Language.

SEC 21.3 For the purpose of ensuring the effectiveness of this Agreement,
each party waives any right which it may now or hereafter have to
commence or maintain any suit or legal proceeding concerning a Dispute
until the same will have been determined in accordance with the arbitration
proceeding provided for herein, and then only for then enforcement of the
award or decision rendered in such arbitration proceeding.

SEC 21.4 The award rendered in any arbitration proceeding commenced

thereunder shall be final and conclusive and the award or decision rendered
pursuant to such proceeding may be registered with any court having
jurisdiction for its enforcement. Each party covenants that it will not contest
or appeal from any such award or decision, unless the same is vitiated by
fraud, accident, mistake or excusable negligence.

SEC 21.5 The cost of arbitration shall be funded initially by the claimant,
provided that the Tribunal may reallocate the liability for such cost to the
losing Party or apportion such cost among the Parties as the Tribunal may
consider reasonable. Without prejudice to the foregoing, each party shall
each fund its own legal and other expenses relating to such arbitration,
including the cost for the arbitrator appointed by each Party.

ARTICLE 22
MISCELLANEOUD PROVISIONS

SEC 22.1 This BOT Agreement shall come into force and become effective
upon and as of the date of the signing hereof by the authorized signatories
of the _____ and the CONTRACTOR.

SEC 22.2 None of the parties shall, at any time, before or after the
expiration or sooner termination of this BOT Agreement, without the consent
of the other, divulge or suffer or permit its officers, employees, agents or
contractors to divulge to any person, other than to any of its or their
respective officers or employees who require the same to enable them
properly to carry out their duties, any of the contents of this BOT Agreement
or any information relating to the negotiations concerning the operations,
contracts, commercial or financial arrangements or affairs of the other
parties hereto. Documents marked “CONFIDENTIAL” or the like, providing
that such material shall be kept confidential, shall constitute prima facie
evidence that such information contained therein is subject to the terms of
this provision.

SEC 22.3 The restrictions imposed in Section 22.2 herein shall not apply to
the disclosure of any information:
a. Which may now or hereafter come into public knowledge
otherwise than as a result of a breach of an undertaking of confidentiality,
or which is obtainable with no more than reasonable diligence from sources
other than any of the Parties hereto;

b. Which is required by law to be disclosed to any person who is

authorized by law to receive the same;

c. To a court, arbitrator or administrative tribunal in the course

of proceedings before it to which the disclosing party is a party; or

d. To any consultants, banks, financiers or advisors of the

disclosing party.

SEC 22.4 No public announcement or statement regarding the signature,

performance or termination of this BOT Agreement shall be issued or made,
unless prior thereto all Parties have been furnished with a copy thereof and
have approved the same. Such approval shall not be unreasonably withheld
or delayed.

SEC 22.5 Each party shall at all times and from time to time take all such
legal steps, do all such further acts and execute all such further deeds,
documents and or instruments as may be required, necessary and or
appropriate in order to give full effect to and carry out the terms of this BOT
Agreement.

SEC 22.6 At any time during the term of this BOT Agreement, the _____
and the CONTRACTOR shall consult with each other to determine whether
in light of all relevant circumstances, the provisions of this BOT Agreement
need revision. Such revision shall ensure that this BOT Agreement operates
equitably and without major detriment to the interest of any of the Parties.
Any consultation among the Parties pursuant to this Article shall be carried
out in a spirit of cooperation with due regard to the intent and objectives of
this BOT Agreement.

SEC 22.7 This BOT Agreement shall not be modified, amended or varied
in any manner unless such modification, amendment or variation is in writing
and executed by the Parties.

SEC 22.8 The documents forming this BOT Agreement are to be taken as
mutually explanatory of one another.

SEC 22.9 Each party shall upon request promptly provide to the requesting
Party and and all documents which such requesting Party may reasonably
request for the purposes of or in connection with this BOT Agreement.

SEC 22.10 The declaration of any provision of this BOT Agreement as void,
invalid or otherwise unenforceable shall not invalidate the remaining
provisions hereof, and the Parties shall promptly amend this BOT Agreement
and or execute such additional documents as may be necessary and or
appropriate to give legal effect to the void, invalid or otherwise
unenforceable provision in such a manner that when taken with the
remaining provisions will achieve the intended commercial purpose of the
void, invalid or otherwise unenforceable provision.

SEC 22.11 Any notice, request, report, approval, consent, or other

communication required or permitted to be given or made under this BOT
Agreement shall be in writing in English and delivered to the addresses of
the Parties at the beginning of the Contract; or to such other address, telex
or facsimile numbers as each Party may have notified the other. Such notice
shall be deemed to have been duly given or made if (a) in case of delivery
in person or by facsimile transmission, as of the date of actual delivery to
the recipient at such address or facsimile number which is duly
acknowledged, or (b) in case of telex, on receipt by the sender of the back
code of the recipient at the end of transmission.

SEC 22.13 Any and all costs incurred by the Parties in relation to and or by
reason of the preparation and closing of this BOT Agreement, including
without limitation stamp duties, shall be borne and paid exclusively by each
Party.

SEC 22.14 The failure of any Party to enforce any provision of this BOT
Agreement shall not be construed as a waiver of its right to enforce such
provision or any other provision in this BOT Agreement or as a waiver of any
continuing, succeeding or subsequent breach of any such provision or other
provisions of this BOT Agreement.

SEC 22.15 This BOT Agreement shall be deemed made under and be
governed by and construed in accordance with the laws of the Republic of
the Philippines.