Document:

Exhibit 10.3

IWAVE 1 Confidential I Dated: 1st of August 2013 

 

 

 

MESSAGING SERVICES AGREEMENT

IWave, Inc. | TelUPay (Philippines) Inc.

©2013 IWave

 

IWAVE 1 Confidential I Dated: 1st of August 2013 

MESSAGING SERVICES AGREEMENT IWave, Inc. I TelUPay (Philippines) Inc.

 

This Messaging Services Agreement (the "Agreement")

dated the 1st August 2013.

is made and entered into between

IWave Inc., a Company registered in Philippines and whose registered office is situated at 9/F Philippine AXA Life Centre, 1286 Sen. Gil J. Puyat Avenue, 1200 Makati City, Philippines, duly represented by Mr. Cezar P. Gaon, President & COO, hereinafter referred to as "IWave",

and

TelUPay (Philippines), Inc., a company registered in the Philippines and whose registered office is at 6th Floor, King's Court II Building, 2129 Chino Roces Avenue corner Dela Rosa Street, Makati City, Philippines and duly represented by Rosariot D. Carrillo hereinafter referred to as "CLIENT", and together with IWave, the "PARTIES"

Whereas

(A)   IWave represents INFOBIP, a company which runs the business of international messaging services

(B)   CLIENT intends to avail such messaging services from IWave

Now therefore, the PARTIES hereby agree as follows:

IWAVE 1 Confidential I Dated: 1st of August 2013 

MESSAGING SERVICES AGREEMENT IWave, Inc. I TelUPay (Philippines) Inc.

1.        DEFINITIONS

In this Agreement, unless the context otherwise requires, the following definitions shall apply:

"Affiliate(s)" means (i) subsidiary or parent company of the Party to this Agreement, or (ii) any other entity whose assets are linked with either Party to this Agreement, or (iii) any entity controlled or controlling either Party to this Agreement. or (iv) any entity directly or indirectly controlled or controlling any subsidiary or parent company of either Party to this Agreement. For these purposes, an entity shall be treated as being controlled by another if that other entity has fifty per-cent (50%) or more of votes in such entity, is able to direct its affairs and/or to control the composition of its board of directors or equivalent body;

"Agreement" means this Messaging Services Agreement, the Addenda and Schedules set forth in this Messaging Service Agreement, attached hereto and made a part hereof, and any subsequent Addenda, Schedules, or Service Order Forms executed by the Parties, as such may be amended from time to time by written agreement between the Parties;

"Chargeable Event" means SM$ sent by CLIENT to IWAVE which is subject to Successful Submit by IWAVE to destination Network Operator;

"CLIENT Content" means any information, data, or messages provided to IWAVE by or on behalf of the CLIENT, any Third Party Provider. or an End-User using CLIENT Services for transmission by IWAVE to a Network Operator;

"CLIENT Covered Claim" has the meaning as defined in Section 16 hereof;

"CLIENT Services" means the service(s) operated by CLIENT for distributing or sending CLIENT Content to End-Users; "Commencement Date" means the date when this Agreement is signed by and becomes binding on the parties; "Disclosing Party" means as set out in Section 9 hereof;

"Dispute Notification" means the notification of dispute regarding the invoiced amounts given by the CLIENT to IWAVE in accordance with Clause 4.5 hereof;

"Due Charges" means the undisputed portion of the payment owed by the CLIENT to IWAVE for the services rendered under this Agreement as described in detail in Section 4 hereof;

"End-User" means any customer of the CLIENT who uses CLIENT Services in order to receive CLIENT Content;

"IWAVE Charges" means amount payable by CLIENT to IWAVE for use of IWAVE Services as described in details in Schedule 1 to this Agreement;

"IWAVE Data" means data which is provided or generated in the course of provision of IWAVE Services;

"IWAVE Rights" means all Intellectual Property Rights owned by or licensed to IWAVE prior to or after the Commencement Date, including but not limited to those Intellectual Property Rights involved in any aspect of IWave Services, Platform or any device, software or data used in connection therewith, including without limitation the IWAVE Data;

"IWAVE Services" means mobile infrastructure services and/or other services provided by IWAVE to the CLIENT as expressly described in Schedule 3 hereof ("Service Description") and each Service Addenda attached hereto or mutually executed by the Parties;

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MESSAGING SERVICES AGREEMENT IWave, Inc. I TelUPay (Philippines) Inc.

"Intellectual Property Rights" means all copyright (including but not limited to rights in computer software), patents, trademarks, trade names, trade secrets, registered and unregistered design rights, database rights and topography rights. all rights to bring an action for passing off, any other similar form of intellectual property or proprietary rights, statutory or otherwise, whether registerable or not and shall include applications for any of them, all rights to apply for protection in respect of any of the above rights and all other forms of protection of a similar nature or having equivalent or similar effect to any of these which may subsist anywhere in the world;

"Messaging Transaction" or "SMS" means the short text message sent to and from 'telephones which text comprises words or numbers or an alphanumeric combination up to one hundred and sixty (160) characters;

"MT" or "Mobile Terminated" shall mean the short text message sent by IWAVE from the Platform to a Network Operator's mobile network and finally to End-Users telephone devices which text comprises words or numbers or an alphanumeric combination up to one hundred and sixty (160) characters;

"Network Operator" means any company operating a GSM-based mobile telephony network, offering mobile telephony services to its subscriber base;

"Network Operator Change" means any change in the services, prices, conditions or terms for services provided to IWAVE or the CLIENT by a Network Operator;

"Operator Network" means the infrastructure, software and hardware enabling a Network Operator to support wireless communications between and among its subscribers and third parties;

"Platform" means the mobile application services platform and any associated systems, network connections and interfacing capabilities, owned and operated by IWAVE or by suppliers or partners of IWAVE which is used to provide IWave Services;

"Prepaid Charge" if applicable, means an amount payable by CLIENT to IWAVE in advance of IWAVE performing IWAVE Services for which IWAVE Charges are applicable, as set forth in any Addenda or Schedule hereof;

"Privacy Laws" has the meaning as set-out in Clause 6.2 hereof;

"Proprietary Information" has the meaning as given in Section 9 hereof;

"Protocol Specification" means the protocols to be used by the CLIENT in order to access IWAVE Services, as the CLIENT shall be notified by IWAVE from time to time;

"Receiving Party" means as set out in Section 9 hereof;

"Service Interface" means the method to be used by the CLIENT to connect to the Platform;

"Service Level Agreement" or "SLA" means an Addendum attached hereto or mutually executed by the Parties and attached to and made a part of this Agreement, specifying IWAVE Services to be provided to CLIENT; 

"Schedule" means the schedule(s) attached to this Agreement from time to time by mutual agreement of the Parties that (i) describes the Services; (ii) details fees and charges for the Services and administration costs related thereto, and (iii) any other terms and conditions or Addendum relevant to matters contemplated by this Agreement;

"Service Specifications" means IWave documentation detailing the features of IWAVE Services; "SPAM SMS" has the meaning as given in Clause 6.3 hereof;

"SPAM SMS" has the meaning as given in Clause 6.3 hereof; 

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MESSAGING SERVICES AGREEMENT IWave, Inc. I TelUPay (Philippines) Inc.

"Successful Submit" means IWave accepts the SMS sent from the CLIENT and validate the SMS before submitting SMS for onward routing. IWAVE shall return Successful Submit to the CLIENT to register SMS has been successfully submitted for routing SMS which does not pass IWAVE's validation tests are rejected and error message returned to the CLIENT and SMS not charged;

"Taxes" means any federal, state, local or foreign government tax, fee, duty, surcharge, or other tax-like charge that is required or permitted by applicable law to be collected from the CLIENT by IWAVE for the rendered IWave Services;

"Term" means the duration of this Agreement, as set forth in Section 3 of this Agreement;

"Third Party" means any and all persons or entities not a Party to this Agreement;

"Third Party Provider" means any Third Party that has entered into an agreement with CLIENT to provide any or all of the CLIENT Services.

2.        SCOPE OF AGREEMENT

2.1        At the request of CLIENT, IWave has agreed to provide CLIENT with the IWave Services, subject to and based upon the terms and conditions contained hereunder.

2.2        IWave shall notify the CLIENT in writing of Network Operator Change within 48 hours from IWAVE's notification by the Network Operator of the Network Operator Change.

3.        TERM AND TERMINATION

3.1        This Agreement shall become effective on Commencement Date and shall, unless sooner terminated as provided below or extended as provided for in Item 3.2, remain in effect for twelve (12) months after the Commencement Date.

3.2        This Agreement shall automatically and continuously be renewed for a successive twelve (12) months period, unless either Party provides written notice of termination at least thirty (30) days prior to the expiration of the term mentioned above in Clause 3.1 or any of the successive periods following thereon.

3.3        Either Party may terminate this Agreement upon written notice to the other Party:
3.3.1        Immediately, in the event the other Party becomes insolvent, files a petition for bankruptcy or makes an assignment for the benefit of its creditors;

3.3.2        Immediately, if either Party materially breaches its obligations under this Agreement and if curable, fails to cure the breach within three (3) days after receiving written notice.

3.4        CLIENT shall be entitled to terminate in writing this Agreement
3.4.1        If IWAVE purports to amend this Agreement unilaterally, provided that such notice of termination is provided to IWave no later than fourteen (14) days from the date on which CLIENT is notified of the projected amendment.

3.5        IWAVE shall have the right- at its sole discretion- to terminate this Agreement immediately by providing the CLIENT with as much prior notice as reasonably practicable in the event that:
3.5.1        One or more of the Network Operators upon which the provision of IWave Services hereunder is dependent terminates its provision of services to IWave and no other network operator is available to provide the IWave Services; or

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3.5.2        Any modification to IWAVE's existing Network Operator contracts, to the Mobile Marketing Association Code of Conduct. or any change in all applicable foreign, federal, state, and local laws, rules and regulations as they may be amended from time to time, which makes the rendering of IWave Services illegal or contrary to a law, regulation, or the Mobile Marketing Association Code of Conduct

4.        PRICE, PAYMENT AND SERVICES

4.1        All payments by CLIENT to IWave in respect of the IWave Services shall be made in accordance with terms set out in this Section 4 and Schedule 1 hereof.

4.2        Payments shall be made based on the monthly statement of the logs generated from IWAVE's data which indicate the volume of CLIENT Content successfully submitted to IWave Platform for the delivery to the End-Users.

4.3        The invoice and/or statement set forth in Schedule 1 which will be paid by the CLIENT shall include the following amounts:
4.3.1        All charges and fees relating to such payments (including, without limitation, those levied by the paying and payee bank or other financial institutions); and

4.3.2        Any applicable Taxes, which shall be paid in addition at the rate and in the manner required by law.

Upon payment of relevant taxes proof thereof shall be furnished the CLIENT within 5 days from payment thereof without need of demand.

4.4        Suspension for non-payment. In the event that Due Charges have not been paid by the CLIENT, then IWAVE shall after written notice to the CLIENT be titled to suspend (i.e. stop) the rendering of IWave Services until full due payment has been made by the CLIENT. There shall be no suspension of services in case there is a dispute involving Section 4.3 and the same has not been resolved as provided for in Section 4.6.

4.5        Late Payment Charge. In the event that any undisputed amount due under this Agreement is not paid on the due date for payment and no notice of dispute is sent by CLIENT, IWAVE will notify the CLIENT of such delay in payment and shall be entitled to charge a late payment charge of one per cent (1%) monthly or twelve per cent (12%) annually from the date due or from any extended grace period given until such amount is paid.

4.6        Dispute Notification and Resolution. The Parties agree to the dispute resolution procedures as follows:

In the event the CLIENT disputes in good faith any "portion of IWAVE's invoice, the CLIENT may withhold payment for such amounts until the dispute is resolved as stipulated herein., However it must pay all undisputed amounts on the due date or within the grace period given by IWAVE if any. CLIENT shall inform IWAVE of the dispute within seven (7) days from the date of receipt of the invoice ("Dispute Notification").

The Parties will exercise reasonable efforts to resolve the dispute within thirty (30) days from the date of the Dispute Notification. In the event that the Parties are not successful in resolving the dispute pursuant to this provision, the parties are entitled to refer such dispute to a court of competent jurisdiction under Section 13 hereof.

5.        OBLIGATIONS OF THE CLIENT

5.1        CLIENT represents and warrants to IWAVE that:

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5.1.1        It has the power and authority to enter into this Agreement and to perform its obligations hereunder, including providing the CLIENT Content in the manner described in this Agreement;

5.1.2        It is under no contractual or other legal obligation, which shall in any way interfere with its full, prompt and complete performance of its obligations hereunder;

5.1.3        None of the CLIENT Content, the Client Services or the provision of the IWAVE Services contravene any applicable law, regulation or code;

5.1.4        It will assist in the compliance by any of its agents, subcontractors, Third Party Providers or Affiliates (and their employees, agents or representatives), with all applicable laws, regulations and codes relevant to the CLIENT Content, CLIENT Services and IWAVE Services; and

5.1.5        It will not use IWAVE Services in a way which is fraudulent, unlawful or unauthorized.

5.2        CLIENT shall conform to the Protocol Specification for the relevant Service Interface as provided to CLIENT by IWAVE.

5.3        CLIENT shall connect only to the Service Interface specified for CLIENT by IWAVE using only the names and passwords provided to CLIENT by IWAVE.

5.4        CLIENT shall designate in Schedule 2 CLIENT employees who will act as technical, financial and commercial coordinators and IWAVE's contact points in order to coordinate the delivery of the IWAVE Services, and inform IWAVE in writing of any future changes to such coordinators.

5.5        CLIENT shall ensure that the coordinators specified in Schedule 2 and each member of the CLIENT personnel (including employees and contractors) follow the service administration and fault reporting procedures provided to CLIENT by IWAVE.

5.6        CLIENT shall supply complete and accurate instructions and information to IWAVE, sufficient for the performance of the IWAVE Services, in accordance with such timescales as IWAVE may reasonably require.

5.7        CLIENT shall provide all reasonable assistance to IWAVE, including providing copies of relevant documentation, books and records, in connection with CLIENT or IWAVE's compliance with any requirements or conditions which are at any time imposed by any law and/or governmental or other relevant state authority and which are applicable to or affect the CLIENT Services, CLIENT Content and/or IWAVE Services.

5.8        CLIENT shall provide any governmental or other relevant state authority or IWAVE (free of any charge) with such information or material relating to the CLIENT Services or a future CLIENT Service as any Governmental Body may reasonably request in order to carry out any investigation in connection with (i) the CLIENT Services or (ii) CLIENT's relationship with IWAVE or with a Third Party Provider.

5.9        CLIENT shall be solely responsible for its Third Party Providers and subcontractors and their compliance with the terms of this Agreement. CLIENT agrees that IWAVE shall not be responsible for making any payments to any Third Party Provider or CLIENT subcontractor.

6.        MESSAGE CONTENTS AND ANTI SPAMMING POLICY

6.1        CLIENT will be solely responsible for any legal liability arising out of or relating to the CLIENT Content and CLIENT Services (whether transmitted on its own or on any Third Party's behalf). If IWAVE is notified or otherwise becomes aware of CLIENT Content which violates the requirements of this Agreement, IWAVE may (but shall not be required to) investigate the allegation and determine, in its sole discretion, whether to remove or to request removal of such CLIENT Content from the CLIENT Services. If CLIENT refuses such request, IWAVE may (but shall not be required to), in its sole discretion immediately block CLIENT Content, suspend CLIENT Services, or terminate this Agreement. IWAVE shall not be liable for any damages (including any consequential loss) incurred by CLIENT because of any action taken in accordance with this Section 6, unless there is fault or negligence on the part of IWAVE, its employees, agents or authorized representative.

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6.2        CLIENT shall ensure that its collection, access, use and disclosure of End-User information comply with all applicable foreign, federal, state, and local laws, rules and regulations as they may be amended from time to time, laws governing marketing by telephone, direct mail, email, wireless text messaging, fax, and any other mode of communication (collectively, "Privacy Laws"). CLIENT shall at all times perform its obligations hereunder and make the CLIENT Services and CLIENT Content available in compliance with and in such a manner as not to cause IWAVE to be in material violation of any applicable laws or regulations, including any Privacy Laws.

6.3        CLIENT agrees that CLIENT and its Third Party Providers will not offer or provide CLIENT Services, or use IWAVE Services in a way, that (collectively "SPAM SMS"):
6.3.1        Transmit or allow to be transmitted any CLIENT Content that violates the requirements of any Network Operator through which CLIENT Content is transmitted;

6.3.2        Transmit or allow to be transmitted any CLIENT Content that is false, inaccurate, misleading, unlawful, harmful, threatening. abusive, harassing, tortuous, defamatory, vulgar, obscene, invasive of another's privacy, hateful, or racially, ethnically, or otherwise objectionable;

6.3.3        Transmit or allow to be transmitted any CLIENT Content that harms minors in any way;

6.3.4        Transmit or allow to be transmitted any CLIENT Content that it does not have a right to make available under any law or under contractual or fiduciary relationships;

6.3.5        Transmit or allow to be transmitted any CLIENT Content that infringes any patent, trademark. trade secret, copyright, or other proprietary rights or rights of publicity or privacy of any party;

6.3.6        Utilize any unsolicited or unauthorized advertising, promotional materials, "junk mail", "spam", or any other forms of solicitation;

6.3.7        Violate any codes or standards of practice published or endorsed by the GSMA Association or the Mobile Marketing Association;

6.3.8        Interfere with or disrupt IWAVE Services or servers or Network Operator networks connected to the IWAVE Services, or disobey any requirements, procedures, policies, or regulations of networks connected to IWAVE Services;

6.3.9        Transmit or utilize any (a) viruses, worms, Trojan horses, or other code that might disrupt, disable, harm, erase memory, or otherwise impede the operation, features, or functionality of any software, firmware, hardware, wireless device, computer system or network, (b) traps, time bombs, or other code that would disable any software based on the elapsing of a period of time, advancement to a particular date or other numeral, (c) code that would permit any third party to interfere with or surreptitiously access any End-User personal information, or (d) content that causes disablement or impairment of IWAVE or Network Operator services or equipment.

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6.3.10        Intentionally or unintentionally violate any applicable local, state, national or international law. or any regulations having the force of law;

6.3.11        Collect or store personal data about End-Users in connection with the prohibited conduct and activities set forth hereinabove.

6.4        Upon written request from IWAVE, CLIENT shall as soon as practicable, with reasonable detail provide:
6.4.1        Certification of compliance with this Section 6 by the CLIENT, and

6.4.2        Volume forecasts for use of IWAVE Services, anticipated CLIENT support information and such other relevant information that IWAVE may reasonably request concerning future CLIENT Services (provided that any forecasts given will not be contractually binding and/or oblige the CLIENT to purchase and/or order IWave Services).

6.5        The Parties agree to work together in good faith to establish CLIENT Services and IWave Services.

7.        SUSPENSION OF SERVICES

7.1        IWave may- in its sole discretion but for justifiable grounds- suspend the rendering of any or all of the IWave Services at any time in the event that:
7.1.1        It is required to do so by law;

7.1.2        IWAVE is entitled to terminate this Agreement as provided under Section 3 hereto;

7.1.3        IWAVE is obliged or advised to comply with an order, instruction, directive or request of a governmental be other relevant state authority or Network Operator which necessitates that it does so, in the judgment of IWAVE. IWave shall notify the CLIENT of the reasons for such suspension within 24 hours from the receipt of such order, instruction, directive or request.

7.1.4        IWAVE has reason to believe that the CLIENT is in breach of any of its obligations under this Agreement;

7.1.5        One or more of the Network Operators upon which the provision of IWAVE Services hereunder is dependent suspends its provision of those services to IWAVE; or

7.1.6        Subject to Section 4 hereto any payment due to IWave hereunder is not paid after the due date for payment.

7.2        IWAVE has no obligation to review or filter CLIENT Content, however, the CLIENT agrees that IWAVE and Network Operators shall have the right to access and review CLIENT Content transmitted through the IWAVE Services as necessary to identify a potential breach of the terms of this Agreement, including Section 6 hereto. To the extent that IWAVE discovers an actual or potential breach. IWave may suspend its Services to CLIENT for as long as it deems necessary, in its sole discretion, to ensure compliance with this Agreement by CLIENT. Any CLIENT Content viewed by IWave in accordance with this Section 7 will be kept confidential.

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7.3        Where IWAVE determines in its discretion it is practicable to do so, then IWAVE shall put into effect any such suspension only in respect of those CLIENT Services which are affected by the matters referred to in this Section 7. IWAVE shall notify CLIENT within 12 hours from the occurrence of any of the events stated under Section 7 of any impending suspension of the CLIENT Services affected under this Agreement.

7.4        Should CLIENT's account utilized in the provision of IWAVE Service be inactive through a period of 6 (six) months it remains in IWAVE's discretion to suspend IWAVE Services to the CLIENT. Absence of any Chargeable Events through the period of 6 (six) months shall be considered as inactivity subject to suspension.

CLIENT can reactivate its account with a request to IWAVE sent 3 (three) working days prior to required reactivation.

8.        IWAVE SUPPORT, SYSTEM, MAINTENANCE

8.1        IWave shall provide the username and the password required to use IWAVE Services to the CLIENT.

8.2        IWave shall use commercially reasonable efforts to make its appropriate technical personnel available to the CLIENT in order to assist the latter as needed to resolve any network problem within the targeted resolution period.

8.3        All problems reported shall be in English unless otherwise agreed to in writing by the Parties.

8.4        IWAVE shall notify CLIENT of scheduled maintenance of the IWAVE Messaging Platforms or Network. IWave will use commercially reasonable efforts to notify CLIENT of schedule downtime outside its maintenance windows.

9.        CONFIDENTIALITY

9.1        Each Party may make available or otherwise disclose to the other Party during the negotiation or performance of this Agreement certain business information, including information that is proprietary to a Third Party. Except as otherwise stated herein, all such information shall be considered the confidential and proprietary information of the Party disclosing such information ("Disclosing Party") if when disclosed in writing or orally, it is clearly identified as confidential or proprietary ("Proprietary Information"). For the purposes of this Agreement, Receiving Party shall mean the Party and its employees, advisors and Affiliates to whom Proprietary Information is disclosed ("Receiving Party").

9.2        Proprietary Information shall not include:
9.2.1        Information that was independently developed by the Receiving Party without reference to or knowledge of the Disclosing Party's Proprietary Information;

9.2.2        Information that was known to the Receiving Party prior to disclosure by the Disclosing Party and that is free from any obligation to keep it confidential;

9.2.3        Information that is within the public domain through no action on the part of the Receiving Party;

9.2.4        Information that was received from a Third Party who was under no obligation to keep such information confidential.

9.3        Neither Party shall disclose the Proprietary Information of the other Party, except to its directors, officers, employee s, consultants and attorneys, or Affiliates who have a legitimate need to know such Proprietary Information for negotiation or performance of this Agreement and who have agreed to maintain the confidentiality of such Proprietary Information as provided herein.

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9.4        If a demand under legal or regulatory authority of competent jurisdiction or a requirement of law for the discovery or disclosure of Proprietary Information is made known to the Receiving Party, the Receiving Party shall give the Disclosing Party notice of the demand or requirement prior to disclosing the Proprietary Information and shall, upon the request and at the expense of the Disclosing Party, obtain or cooperate in any efforts by the Disclosing Party to seek reasonable arrangements to protect the confidential and proprietary nature of such Proprietary Information.

9.5        The obligations described in this Section 9 shall survive the termination of this Agreement for a period of 5 (five) years.

9.6        Both Parties agree that a breach of any of the obligations set forth in this Section 9 would irreparably damage and create undue hardships for the other Party. Therefore, the non-breaching Party shall be entitled to immediate court ordered injunctive relief to stop any apparent breach of this Section 9, such remedy being in addition to any other remedies available to such non-breaching Party, including, but not limited to, damages

10.        INTELLECTUAL PROPERTY RIGHTS

10.1        Ownership of all IWAVE Rights shall vest in and remain with IWAVE. Subject to Clause 10.2 hereof, IWAVE does not by this Agreement grant CLIENT any right, title, license or interest in or to any IWave Rights, including any software or documentation, or in any related patents, copyrights, trade secrets or other proprietary intellectual property. CLIENT shall acquire no rights of any kind in or to any IWAVE trademark, service mark, trade name, logo or product or service designation under which IWAVE products or services were or are marketed (whether or not registered) and shall not use the same for any reason except as expressly authorized in writing by IWAVE prior to such use, but in no event for a period longer than the Term.

10.2        Notwithstanding the foregoing, IWAVE shall give license to the CLIENT for the duration of the Term to use of IWAVE Rights as is directly and unavoidably required by the CLIENT in order to be able to use the IWave Services (including any documentation or software which IWAVE makes available to the CLIENT for use pursuant to this Agreement) during the Term.

10.3        Any license granted under this Section 10 shall be non-transferable, non-sub licensable, nonexclusive and royalty free and shall be limited to the Term in respect of the IWAVE Services or CLIENT Services to which the license relates and shall be granted only for the purpose of fulfilling the respective Party's rights and obligations under this Agreement.

10.4        Neither Party shall reverse engineer, decompile or disassemble any software comprised in the other Party's Intellectual Property Rights.

10.5        CLIENT represents and warrants to IWAVE that no Third Party Intellectual Property Rights will be infringed during the provision of CLIENT Services and that the CLIENT Content does not infringe any Third Party Intellectual Property Rights. In the event that the CLIENT becomes aware that the CLIENT Services or any CLIENT Content is, or it likely to become the subject of an infringement claim, CLIENT must immediately notify IWAVE of this in writing and IWAVE may, in its sole discretion, cease providing IWAVE Services in relation to such CLIENT Content.

Likewise, IWAVE represents and warrants to CLIENT that no Third Party Intellectual Property Rights will be infringed during the provision of CLIENT Services. In the event that the IWAVE becomes aware that the CLIENT Services is, or it likely to become the subject of an infringement claim, IWAVE must immediately notify CLIENT of this in writing and CLIENT may, in its sole discretion, terminate this Agreement without any cost to it.

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11.        NOTICES

Any notice or other communication required or permitted to be given under this Agreement shall be given in writing and delivered in person, sent via registered mail, sent via facsimile or electronic mail with machine generated confirmation of transmission or delivered by recognized courier service, without charge to the receiving Party at its address specified in Schedule 2 below, and shall be deemed effective upon receipt of such notice.

12.        MUTUAL COOPERATION

By signing this Agreement, the Parties acknowledge that problems and difficulties may arise from time to time. This being the case, the Parties agree to work together in a spirit of mutual co-operation to resolve and to use all reasonable endeavours to achieve a fair and equitable solution to any such problems and difficulties as may arise.

13.        GOVERNING LAW

This Agreement shall be governed by and construed in accordance with laws of Philippines and the parties hereto submit to the non-exclusive jurisdiction of the courts of Makati City for the purpose of enforcing any claim arising hereunder.

14.        INCORPORATION OF APPENDICES AND SCHEDULES

All appendices, addendums and schedules attached to this Agreement are integral parts of this Agreement and are incorporated into this Agreement by this reference.

15.        WARRANTIES / DISCLAIMERS

15.1        Each Party represents and warrants to the other Party that:
15.1.1        It has the full corporate right, power, and authority to enter into this Agreement and to perform its obligations hereunder;

15.1.2        Its execution of this Agreement and performance hereunder do not and will not violate any agreement to which it is a party or by which it is bound; and

15.1.3        When executed and delivered, this Agreement will constitute the legal, valid and binding obligation of such Party, enforceable against it in accordance with its terms.

15.2        CLIENT represents and covenants that neither CLIENT nor any Third Party Provider will access or use the IWave Services except in accordance with this Agreement, and that the CLIENT Services and CLIENT Content will comply with the requirements of this Agreement.

15.3        Notwithstanding anything herein to the contrary, IWave expressly disclaims, and CLIENT acknowledges and agrees, that IWAVE shall have no responsibility or any liability of any kind for:
15.3.1        Transmission errors in, corruption of or the security of CLIENT's Content carried over wire line or wireless telecommunication providers' facilities and networks including the Network Operators.

15.3.2        The acts or omissions of any Network Operator in connection with the IWave Services, CLIENT Content or CLIENT Services.

15.4        IWave covenants that the IWave Services shall be performed in conformity with the service objectives in this Agreement.

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MESSAGING SERVICES AGREEMENT IWave, Inc. I TelUPay (Philippines) Inc.

15.5        Notwithstanding anything else in this Agreement to the contrary, IWAVE's entire liability and CLIENT's sole and exclusive remedy for non-performance of the IWave Services shall be a refund or credit of any Monthly Service Fees (as set forth in an Addendum) for the period affected by such non-performance, and the termination of this Agreement as set forth in Section 3 of this Agreement.

15.6        Except for the express warranties set out in this Section 15, IWave disclaims any and all warranties concerning IWAVE Services, IWave technology, and/or platform, whether express or implied or statutory, including, without limitation, any implied warranty of merchantability, fitness for a particular purpose, title, non-infringement, quiet enjoyment, satisfactory quality, or accuracy. Without limiting the foregoing, IWAVE does not warrant that the IWave Services will be uninterrupted or error free, and IWAVE expressly disclaims:
15.6.1        Any liability for any special, incidental, indirect, punitive or consequential damages whatsoever, including, but not limited to, damages for: loss of profits or revenues, loss of confidential or other information, business interruption, personal injury, loss of privacy. corruption or loss of data, failures to transmit or receive data or any other pecuniary loss whatsoever arising out of or in any way related to the use of or inability to use the IWAVE Services or otherwise in connection with any provision of this Agreement;

15.6.2        Any liability resulting from any End-User or other mobile operator subscriber sending messages to an allocated number instead of another number or code, or vice versa; and

15.6.3        Any liability in respect of any CLIENT Content, or instructions supplied by CLIENT that are incorrect, inaccurate, illegible, out of sequence, or in the wrong form, or arising from their late arrival or non-arrival, or any other act or omission of CLIENT or any of its End-Users.

16.        INDEMNITY

16.1        Provided that IWave is not guilty of contributory negligence or fault, CLIENT, at its own expense, shall indemnify, defend, and hold harmless IWave, its Affiliates, and their respective employees, officers, directors, representatives and agents, from and against all losses, damages, liabilities, settlements, costs and expenses (including attorneys' and professionals' fees and other legal expenses) arising out of or related to any claim, demand, suit, action, or proceeding initiated by a Third Party arising out of or relating to:
16.1.1        Any breach by CLIENT of this Agreement;

16.1.2        A breach of any Third Party Intellectual Property Rights;

16.1.3        Any CLIENT Service, CLIENT Content or other materials or services provided by CLIENT or its Third Party Providers under this Agreement, or

16.1.4        An allegation that the IWAVE Services and/or CLIENT Content violates any law, regulation or code (collectively a "CLIENT Covered Claim").

16.2        IWAVE shall provide CLIENT with written notice of the CLIENT Covered Claim if IWAVE is made aware of any such claim, and IWAVE may, in its sole discretion, permit CLIENT to control the defence, settlement, adjustment or compromise of the CLIENT Covered Claim provided that CLIENT does not enter into any compromise or settlement negotiations on its own behalf or on behalf of IWAVE without IWAVE's prior written consent.

16.3        Notwithstanding the foregoing, IWAVE may, in its sole discretion employ separate legal counsel and participate in the defence of any CLIENT Covered Claim, and the CLIENT shall indemnify all reasonable costs incurred to IWAVE in such defence (such as reasonable attorney and third party fees and, to the extent permitted by law, fines and penalties etc.). CLIENT agrees to fully co-operate with IWAVE where required for the defence of any Client Covered Claim.

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MESSAGING SERVICES AGREEMENT IWave, Inc. I TelUPay (Philippines) Inc.

17.        FORCE MAJEURE

17.1        Either Party's performance of any part of this Agreement, other than payment obligations, shall be excused to the extent that it is hindered, delayed or otherwise made impractical by the acts or omissions of the other Party or any Network Operator, flood, fire, earthquake, strike, stoppage of work, or riot, failure or diminishment of power or of telecommunications or data networks or services not under the control of a Party, governmental or military acts or orders or restrictions, terrorist attack; or any other cause (whether similar or dissimilar to those listed) beyond the reasonable control of that Party and not caused by the negligence of the nonperforming Party (collectively referred to as "Force Majeure" below).

17.2        If any Force Majeure condition(s) occur(s), the nonperforming Party shall make reasonable efforts to notify the other Party of the nature of any such condition and the extent of the delay, and shall make reasonable, good faith efforts to resume performance as soon as possible.

18.        ASSIGNMENT

This Agreement is personal to the Parties hereto and shall not be assigned or transferred by either Party without the prior written consent of the other Party. However, either Party may assign this Agreement without consent to any affiliated entity or successor whether by merger, reorganization, or transfer of all or substantially all of its assets or otherwise; provided that the assigning party notifies the other Party of such assignment in writing and that the affiliated entity or successor affectively agrees to be bound by or assume the obligations imposed on the other Party under this Agreement.

19.        ENTIRE AGREEMENT

This Agreement constitutes the entire understanding and agreement of the Parties hereto with respect to the subject matter hereof. This Agreement supersedes all prior and contemporaneous agreements, representations and understandings between the Parties regarding the subject matter hereof.

20.        WAIVERS

No waiver of any provision of this Agreement by either Party shall be effective unless made in writing and signed by both parties. The waiver of either Party of any default or breach of this Agreement shall not constitute a waiver of any other or subsequent default or breach.

21.        INVALIDITY

In the event any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions of this Agreement will remain in full force. Further, if any provision of this Agreement, for any reason, is determined by a court of competent jurisdiction to be excessively broad or unreasonable as to scope or subject, such provision shall be enforced to the extent necessary to be reasonable under the circumstances and consistent with applicable law while reflecting as closely as possible the intent of the Parties as ex pressed in this Agreement.

22.        RELATIONSHIP OF THE PARTIES

The relationship of the Parties established by this Agreement is that of independent contractors, and this Agreement does not create an agency, employment, partnership or joint venture relationship between the Parties. Each Party acknowledges and agrees that the business relationship and activities contemplated by this Agreement are nonexclusive and that nothing in this Agreement prohibits either Party from participating with Third Parties in similar business arrangements as those described herein.

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IWAVE 1 Confidential I Dated: 1st of August 2013 

MESSAGING SERVICES AGREEMENT IWave, Inc. I TelUPay (Philippines) Inc.

23.        OTHER

23.1        This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. The Parties to this Agreement do not intend that any terms of this Agreement should be enforceable by any person or entity who or which is not a party to this Agreement.

23.2        For purposes of its obligations under this Agreement the acts or omissions of CLIENT's employees, agents, representatives, contractors, subcontractors, Third Party Providers, or Affiliates (and their employees, agents, representatives, contractors. or subcontractors) shall also be deemed to be the acts or omissions of CLIENT

24.        SCHEDULES AND ADDENDA

The following schedules and addenda are attached hereto and made part of this Agreement:
Schedule 1 - Fees

Schedule 2 - Contacts

Schedule 3 - SMS Service Description

_____________________________________________________________________________________________

WITNESS WHEREAS

the Parties have their duly authorised representatives signed this Agreement on the day and year set below:

Commencement Date: 1st of August 2013.

	
For and on behalf of:
	 	
For and on behalf of:

	
IWave
	 	
TelUPay (Philippines), Inc.

	
/s/ Cezar P. Gaon
	 	
/s/ Rosarito D. Carrillo 

	
______________________________

Signature
	 	
______________________________

Signature

	
Cezar P. Gaon
	 	
Rosarito D. Carrillo 

	
______________________________

Print Name
	 	
______________________________

Print Name

	
______________________________

Title 
	 	
______________________________

Title 

Page 14

IWAVE 1 Confidential I Dated: 1st of August 2013 

MESSAGING SERVICES AGREEMENT IWave, Inc. I TelUPay (Philippines) Inc.

SCHEDULE 1

Fees

PRICING AND TERMS

The currency used for any operations governed by this Agreement is PHP.

Agreed pricing is displayed below:

The PARTIES agree to have the price fixed per destination for initial 12 months from the date of the agreement to:

	
Country
	
PRICE

	
Philippines
	
PHP 0.53

	
Malaysia
	
PHP 1.23

	
Indonesia
	
PHP 0.83

In accordance with Section 4 of this Agreement, the price per each Chargeable Event other than stated above will be communicated to the CLIENT via e-mail in a coverage list Unless a fixed price has been expressly agreed, IWAVE is entitled to change agreed rates by email to the Client Changes shall apply immediately unless it is specified different on the rate list

The payment model is post-paid. IWave shall issue an invoice based on traffic details from transaction logs to CLIENT on a monthly basis. Invoices shall be issued on the first day of every month for the previous month.

Payment must be made within thirty (30) working days from the date the invoice was issued.

IWAVE is in every instance entitled to pass on price increases arising from an obligation pursuant to legislation and regulations, from an increase in the purchase price of messages or from rates changes effected by Network Operators. IWAVE shall make reasonable efforts to notify the CLIENT in advance of such price change. In the event that the CLIENT does not agree with the proposed changes, this Agreement can be terminated in accordance with Section 3 of the Agreement Notwithstanding the foregoing, the CLIENT has to pay all due charges to IWAVE including the late payment charge (if applicable) as provided in Clause 4.5 of this Agreement

_____________________________________________________________________________________________

WITNESS WHEREAS

the Parties have their duly authorised representatives signed this Agreement on the day and year set below:

Commencement Date: 1st of August 2013.

	
For and on behalf of:
	 	
For and on behalf of:

	
IWave
	 	
TelUPay (Philippines), Inc.

	
/s/ Cezar P. Gaon
	 	
/s/ Rosarito D. Carrillo 

	
______________________________

Signature
	 	
______________________________

Signature

	
Cezar P. Gaon
	 	
Rosarito D. Carrillo 

	
______________________________

Print Name
	 	
______________________________

Print Name

	
______________________________

Title 
	 	
______________________________

Title 

Page 15

IWAVE 1 Confidential I Dated: 1st of August 2013 

MESSAGING SERVICES AGREEMENT IWave, Inc. I TelUPay (Philippines) Inc.

 

 

SCHEDULE 2

Contacts

	
-
	
CLIENT
	
IWave

	
Authorized Person:
	
Mr. Marlon Portugal
	
Mr. Cezar P. Gaon / Mr. Miro Blazevic

	
Position:
	
Business Development Group
	
President & COO / VP Enterprise

	
Company Name:
	
TelUPay (Philippines) Inc.
	
IWave Inc. / Infobip Asia Pacific Sdn. Bhd.

	
Company Address:
	
6th Floor King's Court 2 Bldg., 2129 Chino

Roces Ave. Makati City, Philippines, 1230
	
Philippine AXA Life Centre, 1286 Sen. Gil J. Puyat Avenue, 1200 Makati City, Philippines

	
Email administration:
	
marlon.portugal@telupay.com,

info@telupay.com
	
sonny.geon@iwave.com.ph / miro.blazevic@.com

	
Phone administration:
	
+63 2 659 7595 / +63 917 853 5416
	
+63 917 817 6969 / +60 19 332 7314

	
Email tech support:
	
glenn.losentes@telupay.com
	
support@infobip.com

	
Phone tech support:
	
+63 917 717 0708
	
+44 (20) 3286 4235

_____________________________________________________________________________________________

WITNESS WHEREAS

the Parties have their duly authorised representatives signed this Agreement on the day and year set below:

Commencement Date: 1st of August 2013.

	
For and on behalf of:
	 	
For and on behalf of:

	
IWave
	 	
TelUPay (Philippines), Inc.

	
/s/ Cezar P. Gaon
	 	
/s/ Rosarito D. Carrillo 

	
______________________________

Signature
	 	
______________________________

Signature

	
Cezar P. Gaon
	 	
Rosarito D. Carrillo 

	
______________________________

Print Name
	 	
______________________________

Print Name

	
______________________________

Title 
	 	
______________________________

Title 

 

 

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IWAVE 1 Confidential I Dated: 1st of August 2013 

MESSAGING SERVICES AGREEMENT IWave, Inc. I TelUPay (Philippines) Inc.

SCHEDULE 3

SMS Service Description

1.        IWave Services (as defined in the Agreement) features a solution that will enable CLIENT to deliver mobile terminated SMS to multiple mobile networks worldwide through the Platform.

2.        IWAVE Services include:
a)        Connectivity between CLIENT's information system and the Platform;

b)        Configuration of the Platform to receive SMS traffic generated by CLIENT and the handling and routing of such SMS traffic to available Network Operators;        

c)        Billing of such SMS traffic processed by IWAVE; and

d)        Technical support.

3.        In the provision of the IWAVE Services, and in addition to the provisions set forth under the Agreement, IWAVE shall:
a)        Ensure that connectivity between CLIENT's information system and the Platform is tested and operational;

b)        Route SMS traffic generated by CLIENT to available Network Operators;

c)        Invoice CLIENT for all IWAVE Charges (as defined in the Agreement ) relative to the provision of the IWave;

d)        Manage all contractual relationships with Network Operators to ensure the operability of the IWAVE Services; and

e)        Provide technical support 24 hours x 7 days x 365 days per year.

4.        Without prejudice to the obligations of the CLIENT (Section 5 of the Agreement),CLIENT further undertakes to:
a)        Provide all the configuration information through the proper completion of all technical forms provided by IWave;

b)        Ensure that its own information systems are properly configured to route SMS traffic to the Platform;

c)        Create and maintain at its own expense a database of End-Users receiving each SMS message processed by IWAVE;

d)        Ensure under no circumstances to send Unsolicited SMS (SPAM) as defined in the Agreement to the messaging Platform;

e)        Announce a larger volume of traffic a few days in advance; and

f)        Fulfil all its payment obligations as set out in the Agreement.

 

Page 17

IWAVE 1 Confidential I Dated: 1st of August 2013 

MESSAGING SERVICES AGREEMENT IWave, Inc. I TelUPay (Philippines) Inc.

_____________________________________________________________________________________________

WITNESS WHEREAS

the Parties have their duly authorised representatives signed this Agreement on the day and year set below:

Commencement Date: 1st of August 2013.

	
For and on behalf of:
	 	
For and on behalf of:

	
IWave
	 	
TelUPay (Philippines), Inc.

	
/s/ Cezar P. Gaon
	 	
/s/ Rosarito D. Carrillo 

	
______________________________

Signature
	 	
______________________________

Signature

	
Cezar P. Gaon
	 	
Rosarito D. Carrillo 

	
______________________________

Print Name
	 	
______________________________

Print Name

	
______________________________

Title 
	 	
______________________________

Title 

 

SUBSCRIBED AND SWORN TO BEFORE ME THIS DAY OF SEP 12, 2013 IN THE CITY OF MAKATI, PHILIPPINES. AFFIANT EXHIBITED TO ME HIS/HER VALID I.D. WITH NUMBER_______, ISSUED ON_________, ISSUED AT ______________.

Doc. No. 307

Page No. 43

Book No. 24

Series of 2013

 

ATTY. VIRGILIO R. BATALLA

NOTARY PUBLIC FOR MAKATI CITY

APPOINTMENT NO. M-35

UNTIL DECEMBER 31, 2014

ROLL OF ATTORNEY 48340

MOLE COMPLIANCE NO. III-21854

NO. 706762 LIFETIME MEMBER

PTR NO. 366-4329 JAN 2, 2013

EXECUTIVE BLDG. CENTER

MAKATI AVE., COR JUPITER ST

Page 18Exhibit 10.4

Konek2CARD OUTSOURCING PILOT AGREEMENT

(Formerly Mobile Financial Services)

KNOW ALL MEN BY THESE PRESENTS:
This Agreement made and entered into by and among:

CARD BANK, INC. (A Microfinance-Oriented Rural Bank), a corporation duly 

organized and existing under and by virtue of the laws of the Republic of the 

Philippines with principal place of business at 20 M. L. Quezon St., City 

Subdivision, San Pablo City, Laguna, the duly registered owner of the business 

name, herein represented by its President and CEO, DOLORES M. TORRES, 

duly authorized for the purpose, and hereinafter referred to as "CARD Bank";

- and -
CARD MRI INFORMATION TECHNOLOGY, INC., a corporation duly 

organized and existing under and by virtue of the laws of the Republic of the 

Philippines with address at 20 M. L. Quezon St., City Subdivision, San Pablo 

City, Laguna, represented in this act by its President, EDGAR V. CAUYAN, 

duly authorized for the purpose, and hereinafter referred to as "CMIT";

- and -
TELUPAY (PHILIPPINES) INC., a corporation duly organized and existing 

under Philippine laws, with principal office located at 6th Floor Kings Court, 

Building 2, 2129 Don Chino Roces Avenue corner Dela Rosa Street, Makati City 

1230, Philippines, herein represented by its President and CEO, Rosarito D. 

Carrillo, hereinafter referred to as "TELUPAY";

(CARD BANK, CMIT and TELUPAY may hereinafter be referred to collectively as "Parties")

WITNESSETH:

WHEREAS, CARD Bank is a banking corporation primarily engaged in the business of providing microfinance loans and deposit services to its customers through its branches, Micro-Banking Offices (MBOs) in various locations nationwide;

WHEREAS, CMIT is an information technology corporation that provides project management, technical consultancy, solutions development and implementation services to microfinance, micro-insurance, and other related service organizations;

WHEREAS, TELUPAY is a Service Provider engaged in the business of developing mobile application platforms and/or software for the provision of mobile phone banking services and has offered the use of its existing mobile application platform and/or software for mobile banking service requirements (the "TelUPay Services");

- 2 -

 

WHEREAS, CARD Bank is engaging into a project to utilize mobile application to enable mobile financial transactions and is requiring technology solutions that can integrate with its existing banking systems;

WHEREAS, CMIT has represented that it has the capability to provide such integrated solutions by engaging its Project Management Office to handle the technical aspects of the project and to implement technology solutions based on CARD Bank's business requirements;

WHEREAS, CARD Bank has agreed, in principle, to utilize the TelUPay Services for its commercial operations subject, however, to the CARD Bank and CMIT assessment of the acceptability of the TelUPay Services in terms of capability, reliability, usability, security, viability, scalability, performance, install-ability, compatibility and overall requirements of CARD Bank and its; system for a Mobile Financial System (MFS);

WHEREAS, TELUPAY has agreed to provide, and CARD Bank and CMIT has agreed to avail of the TelUPay Services, for a trial period to enable CARD Bank and CMIT to assess the acceptability of the TelUPay Services subject to and under the terms and conditions set forth herein;

WHEREAS, the Parties desire to enter into this Agreement to memorialize their respective responsibilities for implementing, conducting and monitoring the Pilot Program and to establish objective criteria for determining its success;

NOW, THEREFORE, in consideration of the premises and the terms and conditions set forth herein, the Parties hereto agree as follows:

1.        Objectives of the Pilot Program. The Pilot Program will establish the Mobile Financial Services link between CARD Bank CASA and the Pilot Providers, enabling CARD BANK and CMIT to evaluate the viability and compatibility of Ebanker Group of System, MFS Middleware (Socket, Agent, Listener and SMS Central) and TelUPay system.

2.        Scope of Services.
i.        TelUPay
TEIUPAY shall, during the Term of this Agreement, provide CARD Bank with the Services to enable CARD Bank and CMIT to assess the acceptability of the Services following the satisfactory performance of the System in the conduct of the Pilot implementation and the overall requirements of CARD Bank and its system for a MFS (the "Pilot Program"). The evaluation of the Pilot Program shall be based on the Key Performance Indicators agreed upon by the Parties as set forth in Clause 16 hereof.

The Services shall refer to the mobile application platform and/or software development services providing mobile phone banking and e-wallet services, including all updates, patches or enhancements thereto, training, maintenance and support services and other deliverables and information supplied by or on behalf of TELUPAY, which will enable specific transactions allowed by CARD Bank's system for its customers to conduct mobile transactions such as the following:

- 3 -

 
1.        Balance inquiries

2.        Cash-in

3.        Cash-out transactions (Request, Completion and Cancellation of Request)

4.        Loan payment (Client-Initiated and Agent-Assisted)         

5.        Revolving Credit Facility Loan (Request for drawdown and Repayment)

6.        Fund transfer (Matapat to Pledge and with Other Savings Account)

7.        Change MPIN

8.        Request for Mini-Statement

9.        Agent's Summary of Transactions

10.      Bills payment

11.      E-load purchases

12.      MBO/Tier 2 Agent (Cash-in and Cash-out transactions)

TelUPay Services shall also include all transactions necessary or incidental for the foregoing transactions such as:

	Enrollment/ registration/ activation / deactivation of a MFS account

	Security control

	Report generation

	Real-time notification and confirmation of customer transactions

	Back-up and recovery

	Other transactions which may be identified during the Pilot subject to mutual agreement between the Parties.

"TELUPAY System" means the TELUPAY Services and the Services Documentation. "TELUPAY Services Documentation" means the services manuals, user instructions, technical literature and all other related materials in eye readable form supplied to CARD Bank/CMIT by TELUPAY for aiding the use of the TELUPAY Services

ii.        CMIT
CMIT shall provide CARD Bank with the Services to enable CMIT to assess the acceptability of the Services following the satisfactory performance of the System in the conduct of the Pilot implementation and the overall requirements of CARD Bank and its system for an MFS (the "Pilot Program") and shall meet the following:

a.        Establish communication link between CARD Bank CASA system and the TelUPay system and successful processing of member transaction through mobile application;

b.        Achieve the level of functionality necessary when properly link with the TelUPay system and translate ISO messages to messaging used by TelUPay and CARD Bank CASA, or vice versa;

- 4 -

 
c.        Develop MFS Listener which communicates with CARD Bank MFS Agents to get an update in clients' accounts, generate text file, where SMS Central pulls provided data for outbound messaging. MFS Agent, on the other hand, liable for automated posting of weekly due at scheduled intervals;

d.        Develop middleware and modify the existing e*banker, e*system, cebanker in relation to MFS transaction;

e.        Implement security according to acceptable industry standards in the following areas: system security, application software security, database security, data transport security, user authentication and authorization, and transaction authentication;

f.        Acquire and install in CARD Bank the required servers, firewalls, communication links, network routers, and other equipment necessary to connect its host system at the CMIT Data Center. Said equipment shall be strictly in accordance with the standards and specifications set by CARD Bank's and CMIIT's information security policies;

g.        Provide appropriate training to authorized end-users of CARD Bank on matters pertaining to the use of the online savings system with emphasis on the technical, operations and security aspects of the project;

h.        Coordinate with TELUPAY to assist CARD Bank in making arrangements for installation of the wallet system;

i.        Readily provide CARD BANK with sufficient technical assistance for Pilot Program to utilize services of TELUPAY;

j.        Allocate the necessary manpower and hardware/software resources to address any questions in online savings system raised by the Testers and to ensure the successful implementation of the project;

k.        Perform a technical analysis of the hardware, software and platforms maintained. The result of the analysis will be used by CARD Bank in selecting MFS Platform for Commercial Pilot;

iii.        Pilot Responsibility of CARD Bank.  During the Pilot Period, CARD Bank shall:
a.        Define its business requirements in detail to enable CMIT and TELUPAY to design and deliver the appropriate solution;

b.        Establish the controlled group that will be included in the pilot;

c.        Provide knowledgeable manpower to answer all queries about transaction to be raised and resolved issues in day-to-day operations;

- 5 -

 
d.        Provide merchandising materials for KabaliCARD Agent as well as the training for all members, Agents and CARD Bank Staff include in Pilot Phase;

e.        Shoulder the registration fee of members' e-wallet payable to third-party provider;

f.        Communicate all technical problems to CMIT/TELUPAY to facilitate resolution in the agreed format. However, CARD Bank shall be accountable for determining and managing the impacts of such technical problems to roll-out and implementation schedules, and reputational risks;

g.        Examine the results of resolutions provided by CMIT/TELUPAY to reported problems and make business decisions there from.

3.        Pilot Period.  The Pilot Program shall be conducted for a period of five (5) months and shall commence on the date of this Agreement (the "Commencement Date") and ending on (the "Termination Date") or upon the earlier of (a) the parties' mutual determination that the Pilot Criteria have been satisfied or (b) 180 days after the Commencement Date. The Pilot Period will be subject to extension in accordance with the provisions of Section 4.

4.        Fees for the Pilot Program.  It is understood by the Parties herein that the installation, evaluation and testing of the TelUPay Services under this Agreement shall be at no cost to CARD Bank. The use of TelUPay Services by CARD Bank and its Members, however, shall be subject to the charges outlined in "Annex A" (FEES AND PAYMENT TERMS) hereof.

During each month of the Pilot Period, CARD Bank will pay CMIT the fees and charges stipulated in the Outsourcing Fees and Payment Terms, attached and made an integral part hereof as "Annex B".

In the event that TELUPAY fails to satisfy CARD Bank in any of its undertakings and the resulting delays impair the ability of CMIT to demonstrates its deliverables by the Termination Date, the Parties will entertain other Pilot Provider thus the Pilot Period will be extended for a period the length of those delays ("the Extension Period"). In that event, CARD Bank will continue to pay CMIT the foregoing monthly fees and charges throughout the Extension Period. However, if CMIT fails to timely satisfy any of its responsibility and delays occurs, CARD Bank will not be responsible for any monthly fees during the Pilot Extension Period. The Outsourcing Fees and Payment Terms shall be reviewed after the Pilot Period by CARD Bank and CMIT. If there is no review or agreement, the latest agreed upon fess shall continue to be in force and effect until a new fee structure is agreed upon between them.

5.        Production Programs.  Prior to or at the end of the Pilot Period, if the deliverables are satisfied; CARD Bank will provide reasonable assistance to CMIT in securing definitive agreements with MFS Plans for the implementation of Production Programs (the "Production Program Agreements").

- 6 -

 

6.        Segregation of data of the bank from the service provider/s.  CMIT and TELUPAY shall ensure that data of CARD Bank is segregated from their other clients' and from their own data, and that access to said data is provided to authorize users of CARD Bank;

7.        Access to Financial Information of the service provider/s.  Access of BSP to CMIT and TELUPAY's operations in relation to the outsourced activities/services are open for review by the Bangko Sentral ng Pilipinas (BSP). CMIT and/or TELUPAY shall immediately take the necessary corrective measures to satisfy the findings and recommendations of the BSP examiners and those of the internal and/or external auditors of CARD Bank.

8.        Access of the internal and external auditor to information on outsourced activities/services.

CARD Bank's internal and external auditors shall be given access to the information outsourced to the service providers or CMIT/TELUPAY in fulfillment of their respective duties.

9.        Disaster Recovery/Business Continuity and Contingency plans and procedures.

In the event of uncontrollable instances such as natural and man-made calamities, critical recovery period was set to ensure timely resumption of operation after such event base on the time frame set by the Parties with details below. This period will start on the identification of the extent of damage until full resumption to the normal operation.

Backup is provided for the continuity, restoration and recovery of critical data and systems.  CARD Bank shall ensure that critical data is backed up daily and copies are maintained at the CARD Bank Data Center and offline backups safeguarded by the Information Security.

This policy is designed to protect the data of the softwares mentioned above in the event of an equipment failure, intentional destruction of data, or disaster.

Fire insurance premium for all hardware/software own by the bank and staff fidelity bond for CARD Bank employees shall be borne by CARD Bank and shall be regularly evaluated to ensure its adequacy.

10.        Remedies of the bank in the event of change of ownership, assignment, insolvency or receivership of the service provider.

CARD Bank shall be immediately notified in writing by CMIT/TELUPAY on any pertinent information that may affect the capability of CMIT/TELUPAY to continue its services to CARD Bank such as but not limited to: change ownership, assignment, attachment of assets, insolvency or receivership. Notification shall be given by CMIT/TELUPAY giving consideration on the sufficient time for CARD Bank to identify new service provider. Hence, CMIT/TELUPAY shall be responsible in assisting CARD Bank until such time that the CARD Bank identified other service provider.

- 7 -

 

11.        Confidentiality Undertaking.  The Parties acknowledge that their discussions and implementation of the Pilot program may entail the exchange of confidential information, including technical specifications and information about business methods, operations and prospects, costs, markets, pricing policies, technical processes and applications and confidential client records ("Information"). Each party agrees that for five years after the Commencement Date hereof, it will (a) keep all Information confidential, (b) refrain from disclosing any Information to any person or firm, other their respective employees and agents having a need to know and (c) refrain from using any Information, directly or indirectly, for its own benefit or the benefit of any affiliate. The parties further agree that all Confidential and Proprietary Information shall not be divulged, directly or indirectly, to any other person, firm, corporation, association or entity, for any purpose whatsoever, and shall not make use of such information, without the prior written consent of the other Party.

On termination of this Agreement, each Party agrees to promptly deliver to the other Party all Confidential and Proprietary Information of the other Party then in such Party's possession. Neither Party shall retain any Confidential and Proprietary Information of the other Party.

"Confidential and Proprietary Information" shall mean any and all technical and non-technical information, including but not limited to business plans, business forecasts, research, financial information, procurement requirements, purchasing requirements, manufacturing, customer lists, sales and merchandising efforts, marketing plans, experimental work, development, design details, specifications, engineering, patents, copyrights, trade secrets, proprietary information, methodologies, techniques, sketches, drawings, models, inventions, know-how, processes, apparatus, equipment, algorithms, software programs, software source documents, and formulae in any way related to the current, future and proposed business, products and services of either of the parties.

Confidential and Proprietary Information may be information disclosed to the receiving Party either orally, visually, in writing (including graphic material) or by way of consigned items. The receiving Party shall take all reasonable security precautions, including precautions at least as great as it takes to protect its own confidential information, to protect the secrecy of Confidential and Proprietary Information. The receiving Party may disclose Confidential and Proprietary Information only to its employees or consultants on a need-to-know basis. The receiving Party will have executed or shall execute appropriate written agreements with its employees and consultants sufficient to enable it to comply with all the provisions of the Agreement.

Information shall not be deemed Confidential and Proprietary Information if it is: (i) publicly available prior to the Agreement or becomes publicly available without a breach by the receiving Party; (ii) rightfully received by the receiving Party from third parties without accompanying confidentiality obligations; (iii) already in the receiving Party's possession and was lawfully received from sources other than the disclosing Party; (iv) independently developed by the receiving Party; or (v) approved by the disclosing Party for release;

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12.        Technology and Equipment. Except as otherwise provided in any applicable Work Order, TELUPAY/CMIT shall provide all non-generic software and any and all hardware or software, and any modifications or enhancements thereto, as may be required for the performance of the CMIT and TelUPay Services for CARD Bank.

13.        Intellectual Property. Except as otherwise provided in this Agreement, nothing herein shall be construed or interpreted to grant any license in favor of CMIT/CARD Bank over the TELUPAY's existing mobile application platforms and/or software used for the provision of the TelUPay Services.

14.        Prohibition on Reverse Engineering, Decompilation, Disassembly, etc.  Except with the prior written consent of TELUPAY, CMIT/CARD Bank shall not reproduce, copy, distribute, market, disclose, reverse engineer, decode, decompile, disassemble, license, assign, transfer, or allow the unauthorized use or disclosure of any part or the whole of the TELUPAY's mobile application platforms and/or software.

15.        Third Party Components.  The Parties shall specify in each Work Order any third party product, software, hardware or other material required for the performance of this Agreement by TELUPAY/CMIT ("Third Party Material") to be utilized for, incorporated into, or provided as part of, any services performed or deliverables provided under such Work Order. Unless expressly stated otherwise in the applicable Work Order, TELUPAY/CMIT shall be responsible for obtaining at its own expense all rights, licenses and consents necessary for the Parties to use such Third Party Materials.

16.        Personnel.  TELUPAY/CMIT shall assign Service Provider Personnel who are properly educated, trained and qualified for the services they are to perform. In no case shall the Service Provider Personnel become employees of CARD Bank by virtue of the execution of this Agreement and the performance of the obligations hereunder. TELUPAY/CMIT shall be exclusively responsible for the payment of salaries and benefits of such Service Provider Personnel and undertakes to indemnify the CARD Bank for any claims by such Service Provider Personnel relating to salaries, employment benefits and other reasonable cost arising from such claims.

The Parties hereby acknowledge that none of the them nor any of their respective subsidiaries or affiliates will extend or solicit an offer of employment to any employee of the herein Party. This prohibition shall survive for a period of two (2) years after the termination of this Agreement. Should there be a violation of this undertaking, TELUPAY shall be liable for three (3) times the total invoice paid by CARD Bank under this Agreement or P2,000,000.00, whichever is higher.

17.        Project Manager.
(a)        TELUPAY shall designate a Project Manager ("SP Project Manager") who will serve as the liaison between the CARD Bank and TELUPAY with respect to the services and deliverables to be provided under such Work Order. The SP Project Manager shall have: (i) day-to-day responsibility for supervising the performance of TELUPAY's obligations under the relevant Work Order; and (ii) responsibility for seeking all necessary approvals to commit TELUPAY to any course of action, undertaking, obligation or responsibility in connection with the TELUPAY's performance of the relevant Work Order.

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(b)        CARD bank shall also designate a Project Manager ("CB Project Manager") who will serve as the liaison between CARD Bank and TELUPAY with respect to the Services and Deliverables to be provided under such Work Order. The CB Project Manager shall have: (i) day-to-day responsibility for supervising the performance of the CARD Bank's obligations under the relevant Work Order; and (ii) responsibility for seeking all necessary approvals to commit CARD Bank to any course of action, undertaking, obligation or responsibility in connection with the execution of the relevant Work Order.

18.        Facilities.  In the event that TELUPAY is required to provide the TelUPay Services on-site, CARD Bank and CMIT shall provide TELUPAY and its personnel access to their facilities that may be reasonably required by TELUPAY for the latter to provide the TelUPay Services, including but not limited to computing resources, clerical support and reprographic facilities. All such facilities that are provided by CARD Bank, CMIT and its Members shall be utilized for the sole purpose of performing the TelUPay Services. The use of the facilities by TELUPAY shall not constitute any leasehold or other property interest in favor of TELUPAY or any exclusive right to occupy or use the said facilities transfer any title in the facilities to TELU PAY.

18.        Change Orders.  If CARD Bank/CMIT desires to modify the scope of the Services to be performed or the Deliverables to be provided under a Work Order, CARD Bank/CMIT shall provide to TELUPAY a detailed description of such proposed modifications. Within fifteen (15) days of TELUPAY's receipt of such proposal (or other period of time as agreed by the parties), TELUPAY shall in good faith develop and deliver to CARD Bank/CMIT a change order (each a "Change Order") setting forth the revised Work Order and the Services and Deliverables to be provided by TELUPAY and any other relevant changes to the applicable Work Order, including without limitation, any changes to the compensation to TELUPAY and the schedule for performance and delivery of the Services and Deliverables. Upon execution of the Change Order by an authorized representative of the Parties, such Change Order shall be effective and shall become a part of the Work Order. In the event the parties do not agree to the terms of a Change Order, the Work Order shall continue in effect as originally executed by the Parties. TELUPAY may also propose changes to the scope and/or compensation under a Work Order and CARD Bank/CMIT shall consider such proposed changes in good faith.

19.        KEY PERFORMANCE INDICATORS.  The CARD Bank/CMIT shall assess the acceptability of the TelUPay Services under the Pilot Program on the basis of the following:
19.1        TelUPay System Availability - the measure of the system's up-time record equivalent to 99.5% of the total time period of observation. The period of observation shall be from the time the Production Readiness Certificate is issued up to the end of the Pilot Program.

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19.2        TelUPay Response Time - the measurement of the period by which the Service Provider responds to a problem reported by CARD Bank/CMIT during the observation period.

19.3        TelUPay Resolution Time - the measurement of the period by which TELUPAY is able to resolve the problem reported by CARD Bank/CMIT during the observation period.

19.4        TelUPay System Transaction Threshold - the measurement of the maximum number of transactions during a specified period (peak and off-peak) that TELUPAY's system can handle.

For the avoidance of doubt, the tables outlining the problem severity and the TelUpay response and resolution time requirement, which needs to be observed during the observation period, are found in Sections 4.3 and 4.4 of Annex C (Service Level Agreement), made an integral part of this Agreement.

CARD Bank shall be entitled to claim from TELUPAY a percentage of the latter's Transaction Fees of the previous month as a consequence of TELUPAY's failure to meet the response times required under Annex C as described in Section 4.5 thereof.

20.        Problem Management and Escalation. The CMIT and TELUPAY shall conform to the Problem Management and Problem Escalation Workflow as stipulated in Annex C.

21.        Issuance of Acceptance Certificate.  Within fifteen (15) days from the completion of the Pilot Program on the target completion date, CARD Bank shall notify TELUPAY regarding the outcome of the evaluation and shall issue either an Acceptance Certificate signifying CARD Bank's acceptance of the CMIT and TelUPay Services as being compliant with the criteria and standards set and agreed upon by the Parties; or a Notice of Non-Acceptance if it finds that the such criteria and standards were not satisfied or complied with. If CARD Bank issues an Acceptance Certificate, the Pilot Program shall proceed to commercial operation, which shall be covered by a new agreement between the Parties, which terms and conditions shall be finalized within thirty (30) days before Pilot Completion.

22.        Exclusivity.  TELUPAY undertakes that it will not, directly or indirectly, within two (2) years from the Signing Date of this Agreement or upon the termination of this Agreement by mutual agreement of the parties, as provided in paragraph number 13 above, offer the CMIT and TelUPay Services or any modified or enhanced mobile application platforms and/or software to third parties, or entertain or solicit any offer of joint venture or partnership for the operation of the CMIT and TelUPay Services.

23.        Most Favored Nation Clause.  TELUPAY guarantees that all of the benefits and terms granted by TELUPAY herein are at least as favorable as the benefits and terms granted by it to CARD Bank. Should TELUPAY enters into any agreement with any other client as may be allowed under this Agreement which provides for benefits or terms more favorable than those contained herein, then this Agreement shall be deemed to be modified to provide CARD Bank with those more favorable benefits and terms. For this purpose, TELUPAY shall promptly notify CARD Bank of the existence of such more favorable benefits and terms and CARD bank shall have the right to receive the more favorable benefits and terms immediately. If requested in writing by CARD Bank, TELUPAY shall amend this Agreement to contain the more favorable terms and conditions.

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24.        Termination. Any of the Parties has the right to terminate this Agreement if any party materially breaches or is in default of any obligation hereunder which default is incapable of cure or which, being capable of cure, has not been cured within thirty (30) calendar days after receipt of a written notice of such default (or such additional period as the non-breaching party may authorize in writing).

The foregoing notwithstanding, CARD Bank shall have the right to terminate this Agreement for the following breaches, which shall be deemed incapable of cure:
1.        TelUpay System Availability falls below [99.5%] for a continuous period of at least [3 days].

2.        TelUpay System Availability falls below [95.0%] for a continuous period of at least [1 day].

3.        Continuous inability of TelUPay to meet the response time requirements under Annex B;

4.        Occurrence service incidents/issues with the following frequency:
a.        Severity 1-- exceeding five (5) times for any 30-day period;

b.        Severity 2 -- exceeding five (5) times for any 30-day period; or

c.        Severity 3 -- exceeding ten (10) times for any 30-day period.

25.        Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the Philippines;

26.        Dispute Resolution.  Any dispute, controversy or claim which may arise out of or in connection with this Agreement, or the breach, termination or invalidity thereof, shall, at the first instance, be settled by negotiation and consultation by the Parties in good faith.

In the event of such dispute, differences or disagreement cannot be settled by mutual agreement within the 60-day period, the same shall be settled finally by arbitration in the Philippines. The arbitration shall be conducted in accordance with the rules set forth by the Philippine Dispute Resolution Center, Inc. ("PDRCI").

Any arbitration proceedings or award rendered hereunder and the validity, effect and interpretation of this agreement to arbitrate shall be governed by the laws of the Republic of the Philippines and the rules of the PDRCI.

The award shall be final and binding upon the Parties, and shall be the sole and exclusive remedy between the Parties regarding any claims, counterclaims, issues, or accountings presented to the arbitral tribunal. Each of the Parties hereto waives any right to appeal any decision reached by the arbitrator(s). Judgment upon any award may be entered in any court having jurisdiction.

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This Agreement and the rights and obligations of the Parties hereunder shall remain in full force and effect pending the award in any arbitration proceeding.

This Agreement to arbitrate shall be binding upon the successors, assigns and any trustee or receiver of each Party.

27.        Separability. If any provision of this Agreement shall be prohibited by or become invalid under applicable laws, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement;

28.        Entire Agreement.  This Agreement constitutes and embodies the entire agreement between the Parties. No other terms and conditions, verbal or otherwise, not herein expressly contained shall effect, change or modify this Agreement or alter the provisions herein agreed upon, unless such change, modification, extension, addition or alteration be in writing, duly signed by both parties.

Where the services under any Work Order require modifications or enhancements to the TELUPAY's existing mobile application platforms and/or software, the computer code and other literary elements arising out of such modification or enhancement shall be the sole and exclusive property of TELUPAY.

However, TELUPAY may not offer the use of such modified or enhanced mobile application platforms and/or software to other clients until the earlier of (a) after two (2) years from the Signing Date of this Agreement or (b) upon the termination of this Agreement by mutual agreement of the Parties, unless otherwise agreed upon by the Parties in writing.

Where the services under any Work Order require modifications or enhancements to the CARD Bank's or its Members' existing system, including but not limited to maintenance, conversion, or reengineering services, the computer code and other literary elements comprising the deliverable shall be the sole and exclusive property of CARD Bank or its Member. Any title or license to the deliverable shall vest with the CARD Bank or its Members upon payment of the fees for such deliverable.

Notwithstanding the above, CARD Bank acknowledges that all or part of the TelUPay Services may contain general know-how and prior intellectual property of the Service Provider, which is used or useable in connection with providing of products and services by TELUPAY to other persons, firms and entities.

Accordingly, CARD Bank agrees that TELUPAY may use all such know-how and prior intellectual property in connection with the provision of products and services to third parties not earlier than two (2) years from the termination of this Agreement, unless the parties by mutual agreement provides otherwise.

In the event that any general know-how and prior intellectual property of TELUPAY is embedded as part of the deliverables, TELUPAY grants to CARD Bank a non-exclusive, non-transferable, royalty free, license co-terminus with the term of this Agreement to use such know-how and prior intellectual property that are embedded in such deliverable and form an integral of such deliverable to enable the use of such deliverables by CARD Bank and any other institution that is a member of the CARD MRI. Nothing contained in this clause shall be construed to grant the CARD Bank and its Members any right to use or exploit such prior intellectual property in its stand-alone form;

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29.        Assignability. This Agreement and a party's rights and obligations hereunder may not be assigned for any reason without the written consent of all the parties;

30.        Waive of Provisions. Any waiver hereunder must be express and in writing by the party agreeing to waive any right hereunder;

31.        Integration.  This Agreement contains the entire agreement of the parties with respect to the subject matter hereof;

32.        Amendment.  This Agreement shall not be amended or modified except by a written instrument signed by all parties;

33.        Binding Effect. The terms, conditions and provisions of this Agreement and all obligations of the parties shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors and permitted assigns;

34.        Notices.  Any notice given under this Agreement shall be made in writing and shall be deemed to have been duly given or made if delivered personally, or mailed to the parties;

35.        Counterparts.  This Agreement may be executed in any number of separate counterparts that together shall constitute but one and the same Agreement.

IN WITNESS WHEREOF, the parties hereto hereby cause their respective authorized representatives to affix their respective signatures this 23rd  day of July, 2014 in San Pablo City.

For

CARD Bank, Inc.

/s/ Dolores M. Torres

Mrs. Dolores M. Torres

President & CEO

Witnessed by:

Mrs. Lorenza DT. Baliez

Executive Vice-President

For

CARD MRI Information Technology, Inc.

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/s/ Edgar V. Cauyan

Mr. Edgar V. Cauyan

President & CEO

Witnessed by:

/s/ Roderick Mercado

Mr. Roderick Mercado

Vice-President

For

TELUPAY (PHILIPPINES), INC.

/s/ Rosarito D. Carillo

Ms. Rosarito D. Carrillo

President and CEO

 

Witnessed by:

/s/ Guiller E. Evite

Guiller E. Evite

Team Lead - Business Development Group 

 

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ACKNOWLEDGMENT

 

REPUBLIC OF THE PHILIPPINES

CITY OF MAKATI                                                     ) S.S.

            BEFORE ME, a Notary Public for and in CITY OF MAKATI, on this ______ day of July 23, 2014   , personally appeared the following with their respective Government Identification Numbers, to wit:

	
Name
	
Government IDs
	
Date and Place of Issue

	
MR. EDGAR V. CAUYAN
	 	 
	
MR. RODERICK MERCADO
	 	 
	
MRS. DOLORES M. TORRES
	 	 
	
MRS. LORENZA DT. BANEZ
	 	 
	
MS. ROSARITO D. CARRILLO
	
DL No. N16-84-025291 expiring on 27 March 2014
	 

known to me and to me known to be the same persons who executed the foregoing instrument consisting of thirteen (7) pages including this page wherein the acknowledgement is written duly signed by the parties and their instrumental witnesses at the spaces herein provided, and they acknowledge to me the same is their own voluntary act and deed and that of the corporations herein represented.

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

Doc. No. 185 

Page No. 38

Book No. 356

Series of 2014

 

ATTY. VIRGILIO R. BATALLA

NOTARY PUBLIC FOR MAKATI CITY

UNTIL DECEMBER 31, 2014

ROLL OF ATTORNEY 48340

MOLE COMPLIANCE NO. IV-0016333

NO. 706762 LIFETIME MEMBER

PTR NO. 4226606 JAN 2, 2014

APPOINTMENT NO. M-35

ANNEX A

 

CHARGES AND COSTS
A. General Provisions

1. All prices are quoted in Philippine Peso(s) and inclusive of Value-Added Taxes "VAT").

2. TelUPay represents and warrants that all fees and charges of the telecommunications companies which are incorporated in the prices quoted below are charged at cost to CMIT and its Members.

3. The fees provided herein shall be subject to review and renegotiation by the Parties within thirty (30) days prior to the lapse of six (6) months from Signing Date.

B. Transaction Fees

For every mobile transaction done by members using the mobile application on any channels available on the TelUPay System, CMIT shall pay the Service Provider Php 0.20 per transaction.
C. SMS Cost

All SMS System Reply Cost shall be for the account of CMIT. TelUpay shall apply a tiered level of SMS Cost as given in the table below:

	
Monthly SMS Volume
	
Cost per SMS

	
Less than 1 Million SMS
	
PhP 0.75

	
1 Million up to less than 2 Million
	
SMS Php 0.70

	
2 Million SMS or more
	
Php 0.65

For the avoidance of doubt, the applicable Costs per SMS shall be applied to the total Monthly SMS Volume. To illustrate, if the Monthly SMS Volume for a month is 1.2 Million SMS, the Costs per SMS that will be charged for the 1.2 Million SMS shall be Php 0.70.
D. USSD Session Cost

The cost of every USSD Session, for every user opting to use the USSD Channel/Service, shall be PhP 1.75.

_________________________

1"TELUPAY System" means the TELUPAY Services and the Services Documentation. "TELUPAY Services Documentation" means the services manuals, user instructions, technical literature and all other related materials in eye readable form supplied to the Client by the Service Provider for aiding the use of the TELUPAY Services.

 
E. Optional Charging

In lieu of the Transaction Fee per usage, CMIT may opt to pay a yearly activation fee as follows:

	
Number of Users, any channels (SMS or USSD)
	
Yearly Activation Fee
	
Payment Due Date

	
< 1 Million Users
	
Php 25.00/year/per user
	
For any user enrolled by CMIT under this Optional Charging, TelUpay shall bill CMIT for the yearly activation fee at the end of month of enrollment of such user.

	
1 Million Users or More
	
Php 20.00/year/per user
	
For any user enrolled by CMIT under this Optional Charging, TelUpay shall bill CMIT for the yearly activation fee at the end of month of enrollment of such user.

If the Number of Activated Users reaches 1 Million at any given month during the year, TelUpay shall reduce the Yearly Activation Fee to P20.00/user/year. Where CMIT has achieved a Number of Activated Users of 1 Million, for the next anniversary of CMIT's election of Optional Charging, TelUpay shall only charge a Yearly Activation Fee of only P20.00/user/year for all Activated Users of CMIT.

In this option, CMIT will only pay for the SMS Costs and the USSD Costs consumed by the transactions per usage. No transaction fees will be charged.

CMIT shall have the option of going back to paying Transaction Fee at any time, upon prior written notice to TelUpay.
F. Annual Maintenance Fee

TelUpay, in addition to the actual transaction costs, shall be entitled to collect an Annual Maintenance Fees follows:

	
Period
	
Annual Maintenance Fee
	
Invoicing Frequency

	
Year 1
	
Free
	
N/A

	
Year 2
	
Php 600,000
	
Quarterly in Advance, 4 equal quarters of Php 150,000 per Quarter

	
Year 3
	
Php 600,000
	
Quarterly in Advance, 4 equal quarters of Php 150,000 per Quarter

	
Year 4
	
Php 600,000
	
Quarterly in Advance, 4 equal quarters of Php 150,000 per Quarter

	
Year 5
	
Php 600,000
	
Quarterly in Advance, 4 equal quarters of Php 150,000 per Quarter

G. Bills Payment and eLoad Transactions Costs

TelUpay shall bill CMIT for the value of (1) bills payment and (2) eLoad transactions made through on a semi-monthly basis.
H. Changes in the Fees and Costs

The fees and costs described in this Annex A may be revised subject to the agreement in writing of both parties.

ANNEX B

 

CMIT FEES AND PAYMENT TERMS

A.   General Provisions

1.   All prices are quoted in Philippine Peso(s) and inclusive of Value-Added Taxes ("VAT").

2.   The fees provided herein shall be subject to review and renegotiation by the Parties within thirty (30) days prior to the lapse of six (6) months from Signing Date.

B.   Transaction Fees

For every mobile transaction done by members using the mobile application on any channels available on the MFS System, CARDBank shall pay the Service Provider Php 0.05 per transaction.

C.   Annual Maintenance Fee

CMIT, in addition to the actual transaction costs, shall be entitled to collect an Annual Maintenance Fee as follows:

	
Period
	
Annual Maintenance Fee
	
Invoicing Frequency

	
Year 1
	
Free
	
N/A

	
Year 2
	
Php 600,000
	
Quarterly in Advance, 4 equal quarters of Php 150,000 per Quarter

	
Year 3
	
Php 600,000
	
Quarterly in Advance, 4 equal quarters of Php 150,000 per Quarter

	
Year 4
	
Php 600,000
	
Quarterly in Advance, 4 equal quarters of Php 150,000 per Quarter

	
Year 5
	
Php 600,000
	
Quarterly in Advance, 4 equal quarters of Php 150,000 per Quarter

D.   Changes in the Fees and Costs

The fees and costs described in this Annex A may be revised subject to the agreement in writing of both parties.

ANNEX C

 

Service Level Agreement

1. INTRODUCTION
1.1 Purpose

The TelUPay Service Level Agreement ("SLA'') covers all the provisions and support for the Mobile Financial System ("MFS'') which utilizes the TelUPay Mobile Banking Technology ("TelUPay System''), including the services to be provided under the Memorandum of Agreement ("MOA") signed by TelUPay (Philippines), Inc. ("TelUPay") and CARD MRI Information Technology, Inc. ("Client") collectively known as the "Parties", hereto dated 26 February 2014; the billable service, the hours of service coverage, how service delivery will be measured and reported to Client, any financial obligations for which the Client is responsible for, severity level definitions and response time.

The services covered by this SLA will be provided to the Client when the system is fully installed, tested and operational which for all purposes is defined as the period when the Client and its selected accountholders uses the MFS ("PILOT") as per MOA.

This document clarifies all parties' responsibilities and procedures to ensure Client's needs are met in a timely manner. This SLA will remain valid for the duration of the term of the MOA until revised or modified by the parties in writing.

2. SCOPE OF SERVICE
2.1 Service Description

The Mobile Financial Service (MFS) is a complete comprehensive financial solution that aims to improve banking business by providing fast, effective and efficient way to do fund transfers and conduct business transactions for Client.

In addition to the MFS, this document shall have a limited coverage on the service level commitment of the SMS and USSD Gateway Facility known here in this document as 3rd Party Service Provider Service. The limited coverage means that the 3rd Party Service Provider Service shall only cover the SMS and USSD Gateway Platform availability only and shall by no means include availability of the Telecommunication Operators' availability.
2.2 Service Availability and Support Hour

Required availability for these services is 99.5 percent uptime per month twenty-four (24) hours and seven (7) days a week, not counting planned maintenance times. Availability will be measured everyday and averaged monthly, while the 3rd party Service Provider Service, shall be providing daily transactions and availability report.

The TelUPay shall provide:
1. Technical support to its Client during regular business hours: Monday - Friday, 9:00 A.M. to 6:00 P.M.

2. On-call and email support is available twenty-four (24) hours a day / seven (7) days a week.

If these service times are found to be unacceptable, the Client may request an SLA review for re-evaluation.
2.3 TelUPay Key Personnel

TelUpay will provide key personnel with different escalation levels as the primary contact points for the counterpart key personnel provided by the Client for various concerns as indicated in the 'Client Key Personnel' part of this SLA.

In case the personnel assigned for the first escalation priority is not available or cannot be contacted for some reason, the Client can move up the escalation priority list.

Should there be a change of key personnel from TelUPay, TelUPay will communicate the change to the Client immediately to ensure proper turnover.

	
Key Personnel
	
Escalation Level
	
Project Role
	
Contact Information

	
Ria Jane Gutierrez
	
1st level
	
Quality Assurance Team
	
ria.gutierrez@TelUPay.com

63918494-2027

6597595

	
Karlene Abainza
	
2nd level
	
Project Manager
	
Karlene.abainza@TelUPay.com

09177955602

6597595

	
Glenn Losentes
	
3rd level
	
Senior Manager
	
Glenn.losentes@TelUPay.com

09177170708 

6597595

2.4 Documentation

TelUPay will provide documentation to the Client in the form of user manuals for the developed modules and phone compatibility list upon delivery and acceptance of the product by the Client.
2.5 Out-of-Scope Services

TelUPay may provide out-of-scope services (OOSS) as may be required by the Client subject to approval by both Parties through a change request process.

Change Request for out-of-scope services shall be accomplished by the Client describing the scope of the requirement. TelUPay then shall provide the quotation for the OOSS outlining the impact of the request - timeline, downtime requirement, improvement in the service, additional hardware or software requirement, and the amount required for the OOSS to be accomplished.

TelUPay shall only proceed with the OOSS with an approval from the Client of the quotation through issuance of a purchase order.

Should the OOSS be a minor change request, meaning work can be done in less than 1 man-day (i.e., minor aesthetic or text revisions in UI), TelUPay shall waive the fees for the service request.

3. PERFORMANCE TRACKING AND REPORTING
3.1 Service Level Reporting

TelUPay shall provide a weekly summary report to ensure that no issue has been left unresolved and the requirements of the SLA are met on all the agreed issues/problems.

The report shall include statistics on how many issues have been reported, resolved and still open among others. This report should be available for printing from the TelUPay Bug Tracker directly.
3.2 Service Review Meeting

This SLA is valid within the term of the MOA, as services and technologies changer the SLA may change to reflect the improvements and/or changes. This SLA will be reviewed as per mutual agreement and updated as necessary. When updates are deemed necessary, the Client will be asked to review and approve the changes. In the absence of the completion of a review, the current SLA will remain in effect.

4. PROBLEM MANAGEMENT 

Problem Management is structured to address the causes of incidents that pose the greatest risk. The main goal of problem management activities is to ascertain the root causes of incidents and to minimize their impact on the business operations of the Client (and hence eliminating repeat problems).
4.1 Incident Management

The TelUPay Helpdesk Team will respond to each service incidents/ issues reported that affects the continuity of the business operation as per defined in the 'Support and Service Desk' section of this SLA. Issues are received in the form of a ticket created in the TelUPay Bug Tracking System.

Issues are categorized according to its type (i.e. Architectural, Software, Application, Data Input and Change Request) and assessed its severity to determine the cause of the interruption. As soon as these two aspects occur, the problem is changed to a known error.

Known errors are cross-referenced to see if there exists a record on the TelUPay Bug Tracker. If so, the new incident will either be closed or tagged as a child issue with reference to the existing one. However, if the known error doesn't match any existing ticket, it will be assigned to key personnel for corresponding solutions.
4.2 Severity Level

Severity Level can be defined based on the following description:

	
Severity Level
	
Description

	
Severity 1: Urgent
	
During SEVERITY ONE incidences, MFS ceases to function and Business cannot continue.

	
USSD and/or SMS Gateway is totally unavailable due to fault of the 3rd Party platform

	
Severity 2: Major

	
During SEVERITY TWO incidences, major elements of MFS are running on a degraded functionality making some features not available 

	
USSD and/or SMS Gateway experiencing significant degradation or any of the telco is not available

	
Severity 3: Minor
	
During SEVERITY THREE incidences, all business functions are working as required, but at a slower performance output. 

	

	
Severity 4: Trivial

	
MFS or its significant elements are exhibiting errors that do not have direct influence on all or part of the activities connected to the MFS.

During SEVERITY FOUR incidences e.g. aesthetic errors all business functions are working as required and there is no impact on the operations of MFS.

 
4.3 Support and Service Desk

The TelUPay Team will respond to service incidents that affect the business based on the following metrics on Severity level.

	
Severity
	
Response Time
	
Target system restore time (Workaround)
	
Target Resolution
	
Status Call

	
Severity 1

MFS
	
30 minutes after ticket report
	
2 hours after ticket report
	
1 business day after issuing response
	
Every 60 mins until resolution

	
Severity 1

SMS/USSD
	
30 minutes after ticket report
	
3 hours after ticket report
	
6 hours after ticket report
	
Every 60 mins until resolution

	
Severity 2
	
1 hour after ticket report
	
4 hours after ticket report
	
1 - 2 business days
	
Every 4 hours until resolution

	
Severity 2

SMS/USSD
	
1 hour after ticket report
	
12 hours after ticket report
	
24 hours after ticket report
	
Every 4 hours until resolution

	
Severity 3
	
3 hours after ticket report
	
8 hours after issuing response
	
5 - 10 business days
	
Every day after first update until resolution

	
Severity 3

SMS/USSD
	
3 hours after ticket report
	
1-2 days after issuing response
	
5 - 10 business days
	
Every day after first update until resolution

	
Severity 4
	
5 hours after ticket report
	
12 hours after issuing response
	
Per agreed - to plan
	
Upon closure

 
4.4 Problem Escalation Workflow

1. That Client has done its first level troubleshooting and isolated the issue to be with the MFS. The basis of the troubleshooting and isolation will be the MFS Administration Manual.

2. Problems/ Issues should be created as a ticket in the TelUPay Bug Tracker.
- Application Administrator will access http://TeIUPay.bugtrack.com or may ask TelUpay Helpdesk to access on his/her behalf.

- Application Administrator will create a ticket and submits in TelUPay bugtrack or may ask TelUpay Helpdesk to access on his/her behalf. 

3. Only key personnel from both TelUPay and Client can report, assess and update the issue in the TelUPay Bug Tracker.
- The Application Administrator from Client

- The Project Manager for Client

- The Application Manager for Client

- The Quality Assurance Team for TelUpay

- The Project Manager for TelUpay

- Senior Manager for TelUpay

Process:
l. Client Application Administrator reports issues through the TelUPay Bug Tracker in the form of a ticket. Issues are categorized according to its type and assessed according to its severity. Application manager will also notify TelUPay via email of the issue and the ticket. Ticket can be addressed to the QA, Project manager and Application Administrator.

2. TelUPay Quality Assurance (QA) will cross-reference reported issue if there exists a record on the TelUPay Bug Tracker. If so, the new incident will either be closed or tagged as a child issue with reference to the existing one. However, if the known error doesn't match any existing ticket, it will be assigned to key personnel (Project Manager; Developer) for corresponding solutions.
a. Project Manager - Change request and uncontrolled variables.

b. Developer

3. Key Personnel will re-assess ticket. If issue can be replicated, resolution or fixes will be applied. However, if the issue forwarded cannot be replicated, ticket will be re-assigned to the Client representative for re-evaluation or closing.

4. Fixed ticket will be forwarded to QA for regression testing.

5. If ticket has passed the testing, QA will forward ticket to PM. If not, ticket will be re-assigned to the Key Personnel for re-fixing.

6. PM will tag ticket as RESOLVED, if verified successful. If not, ticket will be re-assigned to the QA.

7. Client will re-test issue and if confirmed resolved, will tag ticket as CLOSED. However, if still not addressed, will re-assign issue to QA for possible resolution until Client will tag it solved.

8. TelUPay shall submit a post-mortem report to the Application Manager for Client not later than three (3) days after the incident.

4.5 Consequences of Failure to Respond and KPI of System Availability not met

1. In the event that the TelUPay fails to meet any of the response times, workaround times or target resolution times required for Severity Levels 1, 2 and 3 identified in the Section 4.3 except for the Status Calls of this Annex B, the Client shall be entitled to claim from TelUPay the following:
a. Severity 1 failure to comply (except for Status Call) - twenty percent (20%) of the total Transaction Fee of the previous month only.

b. Severity 2 failure to comply (except for Status Call) - fifteen percent (15%) of the total Transaction Fee of the previous month only.

c. Severity 3 failure to comply (except for Status Call) - ten percent (10%) of the total Transaction Fee of the previous month only.

This provision shall be in effect starting from three (3) months after date of the 1st transaction of a member in the production environment or three (3) months after the date of the signing of the Memorandum of Agreement (MOA) whichever is earlier.

2. In the event that the TelUpay fails to maintain a 99.5% TelUpay System Availability as prescribed in Section 14.1 of the Agreement, Client is entitled to claim from TelUPay as compensation from the Availability not being met, twenty percent (20%) of the Transaction Fees only of the previous month only. Such amount shall be independent of the claims the Client has made in item 1 above and without prejudice to the Client's remedies under Section 20 of the Agreement.

5. DUTIES AND RESPONSIBILITIES
5.1 Hardware and Infrastructure Dependencies

TelUPay will provide the hardware as required for the implementation of the MFS. The CMIT must ensure that the hardware is located in a secured environment agreed upon by both Parties. TelUPay will provide support and maintenance for the TelUPay-owned provided hardware ("TelUPay Hardware"). TelUPay will provide any required upgrades or Changes in the specs of the TelUPay Hardware.
5.2 Other Projects of the Client

In the event that the Client will develop other projects on its own, either through in-house development or through another third-party vendor, and use the functionalities of MFS to function properly, the Client will ensure that the other projects will have the means to properly communicate with MFS and that the other projects will not disrupt the operations of MFS in any way.

TelUPay will consider the accommodation of further customization of MFS for the other project subject to a new agreement.
5.3 Client Key Personnel

The Client will provide key personnel ("Client Key Personnel") with different escalation levels as the primary contact points for the counterpart key personnel provided by TelUPay for various concerns as indicated in the 'TelUPay Key Personnel' part of this SLA.

The Client Key Personnel will provide the proper support by assigning the designated manpower, sufficient facilities and other required resources for the operations of the MFS.

The Client Key Personnel will adhere to the problem escalation process set by TelUPay to properly execute the problem management. This includes providing the complete information by filling in required forms and submitting complete report.

Should there be a change of Client Key Personnel from the Client, the Client will communicate the change to TelUPay to immediately ensure proper turnover.

	
Key Personnel
	
Escalation Level
	
Project Role
	
Contact Information

	
CAMILLE JOYCE DE MESA

	
1st
	
Application Administrator
	
(049) 503-1547

(049) 562-4309 loc 124

cj.demesa@cardbankph.com

	
VASHILYN MANALO
	
2nd
	
Project Manager
	
(049) 503-1547

(049) 562-4309 loc 124

vashilyn.manalo@cardbankph.com

	
ALEXANDER SANCIANGCO
	
3rd
	
Application Manager
	
(049) 503-1547

(049) 562-4309 loc 124

Alex.sanciangco@cardbankph.com

 
5.4 Approvals and Information

Both TelUPay and Client Key Personnel will participate, when requested in all decision-making that involves technical, administrative and procedural that may affect the integrity of the Client application and database.

They will provide all information necessary to assist TelUPay in coming up with the proper solution. This shall include procurement of additional hardware to scale up the system when usage rises and replacement of faulty hardware.

6. SECURITY
6.1 Location

The Client shall provide a secure location to house the MFS. A secured location is defined as a space where the following criteria are met:

	Regulated and monitored access.

	Safe from the elements. e.g. dust free with proper ventilation and not exposed to the harmful rays of the sun.

	Safe from natural calamities. e.g. flood and earthquake.

	Safe from man-made calamities. e.g. Fire and power outage.

	Safe from theft.

6.2 Accessibility

CMIT shall provide a secured network that will be used as the sole connection of the MFS to the Telecommunication companies (TELCO) subject to commitment letter by TelUPay for its share of the cost of the 2nd DSL Connection.

7. HARDWARE INVENTORY

 

HP Bladesystem c3000, 508665-B21
- 4 x 1200W Power Supply

- 6 HP Active Cool Fans

- 1 x HP Blc GbE2c LY 2/3 Switch, 438030-B21

2 x HP BL460c G6 E55306G, 507780-B21
- Intel Xeon E5530 quad core (2.4Ghz 4M Cache, 8MB l3 Cache 80W)

- 12gb PC-3 800 Memory

- 4 x HP 300GB 3G SAS 10K 2.5in DP ENT HDD 492620-B21

- 6 x HP 2gb 2rx8 PC3-10600R-9 kit 500656-B21

2 x HP BL280C G6 E5502 2G 507788-B21
- Intel Xeon E5502 G6

- 2gb PC3-800 Memory

- 2 x HP 250GB 3G SATA NHP 460357-B21

2 HP Bl280C G6 CTO Blade
Sn.SGH031XRAY, SGH031XRBO

2 HP E5506 Bl280C G6 FIO Kit

2 HP 2gb 2RX8-PC3 10600R-9-Kit

2 HP Factory Integrated- (PN500656-B21/0D1)

2 HP 146GB SAS 10k 2.5IN NHP DP

ENT Hard Disk Drive

Sn.3SD30RHD, 3SD30MP4

2 HP Factory Integrated- (PN:537807-B21/0D1)

2 Smart Array P712M/ZM Controller

2 HP Factory Integrated (PN:484299-B21/0D1)

GLOSSARY

	
Term
	
Definition

	
Key Personnel
	
This refer to individuals responsible assigned for the development, administration or advise on the MFS operation. They consist of high-ranking personnel that need to be contacted in cases needed of decision making.

	
Client
	
Refer to the bank company or other engaging party availing of the services of TelUPay

	
Service
	
Refers to the provision of a discrete function within a systems environment

	
Service Catalog
	
Refers to the list of services that an TelUPay will provide to the Client

	
Incident/ Issue
	
Any unplanned outcome from the operation of an information system. Incidents interrupt the IT service which the Client receives.

	
Known error
	
Refers to the identified root cause of a Problem

	
Ticket
	
Formal incident report created by Client in the TelUpay Bug Tracker.

	
Workaround
	
Refers to the bypass of a recognized problem in a system. A workaround is typically a temporary fix that implies that a genuine solution to the problem is needed. Frequently workarounds are as creative as true solutions, involving out of the box thinking in their creation.

	
Severity Level
	
These are assessment made for each identified problem to establish the service level requirement

	
Helpdesk Facility Program
	
The application set-up by TelUPay to accommodate incident reports from Client during the UAT or Production phase.

	
Bank System Project Manager
	
The Key Personnel responsible for assessing and monitoring the status of all reported problems. He is the only authorized person to report problems in the TelUPay bug tracker. He is the one who directs non-application problem to the Bank System Team upon assessing that the problem is beyond application. Guidelines will be provided by TelUPay through the Trouble Shooting document.

	
Bank System Team
	
They are bank personnel responsible for resolving non-application problems and are required to provide report to the Bank System Project Manager.

	
TelUPay Bug Tracker
	
The application to be used by both the Client and the TelUPay to communicate the problem reporting and monitoring.

	
TelUPay Team
	
The TelUPay Technologies Philippines, Inc personnel responsible for resolving all reported problems in the TelUPay Bug Tracker.

	
Country Partner (Helpdesk)
	
They are one of the Key Personnel assigned by TelUPay to accommodate issues/problems raised by Country Clients. They will serve as TelUPay's representative in their corresponding local area.

TERM SHEET - JOINT VENTURE COMPANY

This Term Sheet is being issued for discussion/exploratory purposes only and shall not be construed as a binding offer or proposal, unless the Parties have executed the definitive agreements specifically and expressly embodying the terms and conditions agreed upon by both parties.

	
Parties
	
The following terms and conditions shall be executed by and between:

	TELUPAY(PHILIPPINES), INC. ("TELUPAY"), a corporation duly organized and existing under Philippine laws with principal office located at 6th Floor Kings Court Building 2, 2129 Don Chino Roces Avenue corner Dela Rosa Street, Makati City 1230, Philippines, herein represented by its President and CEO, Jose Luis Romero-Salas; and

	CARD MRI INFORMATION TECHNOLOGY INC. ("CMIT"), a corporation duly organized and existing under Philippines Laws with principal office located at 20 M. L. Quezon St., City Subdivision, San Pablo City, Laguna) herein represented by its President and CEO, Edgar Cauyan.

(TELUPAY and CMIT may hereinafter be referred to individually as a "Party" and collectively as "Parties")

	
Objective of the Parties
	
The Parties have agreed in principle to the utilization of TELUPAY's mobile application platform and/or software development services ("TELUPAY Services") for CMIT and its Members' mobile banking service requirements. For this purpose, the Parties shall establish a joint venture company which shall serve as the Service Provider of the TELUPAY Services ("JV Co") subject to the terms and conditions provided herein.

	
Condition Precedent
	
The establishment of the JV Co shall be subject to and conditioned upon the successful completion of a Pilot Program wherein the TELUPAY Services will be made available to CMIT and its Members for a limited period from ______ to _______ , during which period CMIT shall determine the TELUPAY Services' capability, reliability, usability, security, viability, scalability, performance, install-ability, compatibility and conformity with the overall requirements of CMIT for the implementation of a Mobile Financial System ("MFS"). The successful implementation of the Pilot Program and the acceptability of the TELUPAY Services shall be confirmed by CMIT through the issuance of an Acceptance Certificate, within fifteen (15) days from the end date of the Pilot Program.

	
Establishment of a Joint Venture Company
	
Upon the satisfaction of the Condition Precedent, the Parties shall cause the formation and registration of a joint venture company (the "Company") with the Philippine Securities and Exchange Commission ("SEC").

The Company shall be established for the purpose of providing TELUPAY Services to CMIT and other entities that CMIT will decide to include. "TELUPAY Services" refer to the mobile application platform and/or software development services providing mobile phone banking and e-wallet services, including all updates, patches or enhancements thereto, training, maintenance and support services add other deliverables and information supplied by or on behalf of TELUPAY, which will enable specific transactions allowed by CMIT's system for its customers to conduct mobile transactions such as but not limited to the following: 

	Balance inquiries

	Cash-in

	Cash-out transactions (Request, Completion and Cancellation of Request)

	Loan payment (Client-Initiated and Agent-Assisted) 

	Revolving Credit Facility Loan (Request for drawdown and Repayment)

	Fund transfer (Matapat to Pledge and with Other Savings Account) 

	Change MPIN

	Request for Mini-Statement

	Agent Summary of Transactions

	Bills payment

	E-load purchases

	MBO/ Tier 2 Agent (Cash-in and Cash-out transactions)

TelUPay Services shall also include all transactions necessary or incidental for the foregoing transactions such as, but not limited to:

	Enrollment/ registration/ activation / deactivation of a MFS account

	Security control

	Report generation

	Real-time notification and confirmation of customer transactions

	Back- up and recovery

	Source code management

	
Authorized Capital Stock of the Company
	
The authorized capital stock of the Company shall initially be Ten Million Philippine Pesos(PhP l0,000,000.00) consisting of [x] Common (Voting) Shares with a par value of One Peso (PhP 1.00) per share, and [x] Preferred (Non-voting) Shares with a par value of One Peso(PhP1.00) per share.

	
Ownership Interest in the Company
	
The ownership interest of TELUPAY and CMIT in the Company shall be as follows:

	
Shareholder
	
% of voting shares
	
% of non-voting shares

	
TELUPAY and its Nominees
	
30%
	
30%

	
CMIT and its Nominees
	
70%
	
70%

	
TOTAL
	
100%
	
100%

	
Governance; Composition of the Board of Directors
	
The Board of Directors of the Company shall consist of seven (7) directors. For as long as CMIT holds or owns at least Seventy Percent (70%) of the voting stock of the Company, CMIT shall be entitled to nominate Five (5) directors to the Board. For as long as TELUPAY holds or owns at least ___% of the voting stock of the Company, TELUPAY shall be entitled to nominate ___(__) directors to the Board. The Parties agree to pool and cast their votes to procure the election of their nominees as members of the Board in accordance with this clause.

In the event of a vacancy in the Board of Directors, the party who nominated the vacating director shall have the right to nominate the successor director for the unexpired term of the vacating director. Any director elected shall be entitled to continue in office until expiration of his term or until removal by the Board of Directors. The Party which originally nominated such director shall be entitled to nominate another in his place. 

	
Meetings of the Board of Directors; Quorum; Voting Requirements
	
The Board shall hold regular meetings at least once every quarter or as often as the Board may deem necessary on such dates and at such times and places as may be determined by the Chairman of the Board, or the President, or upon the request of at least a majority of the members of the Board. A director may attend the meeting via teleconference or videoconference and be counted for quorum purposes.

In any meeting of the Board, at least a majority, or four (4) members of the Board, must be present to constitute a quorum.

The affirmative vote of a majority of the directors present during a meeting at which there is a quorum shall be sufficient to constitute a valid corporate act.

	
Shareholders' Meetings, Quorum; Voting Requirements
	
The regular meetings of the shareholders shall be held at the principal office of the Company every so often as may be provided in the By-Laws of the Company. 

Special meetings of the shareholders may be held on such dates and at such times as may be determined by the Chairman, or the President, or upon the request of shareholders representing at least a majority of the Company's outstanding capital stock.

Except where the law requires the presence of a greater number, the presence of shareholders representing at least a majority of the Company's outstanding capital stock shall constitute a quorum at any shareholders' meeting. If no quorum is constituted, the meeting shall be adjourned until a quorum is achieved.

The affirmative vote of the shareholders representing at least a majority of the Company's outstanding voting shares shall be sufficient to constitute a valid corporate act, except where the Corporation Code requires the affirmative vote of at least two-thirds (2/3) of the Company's outstanding capital stock.

	
Rights of Preferred Shares
	
Preferred shares shall be non-voting, non-cumulative, participatory, and shall be entitled to preference in liquidation and distribution.

Where dividends are declared, holders of Preferred Stock shall be entitled to receive a fixed dividend at the rate of Five Percent (5%), payable as may be authorized by the Board of Directors before any dividend shall be set apart or paid on the Common Stock. After all accrued and unpaid dividends on the Preferred Stock have been fully paid or declared and provided for, the holders of Preferred Stock shall then be entitled to participate in the retained earnings of the Company equally with the holders of the Common Stock, so that the holders of the Preferred Stock, in addition to the Five Percent (5%) preferred dividends above provided, shall receive a further amount per share of Preferred Stock equal to the amount per share of Common Stock to be received by the holders of the Common Stock. The dividend rate on the Preferred Shares may be changed subject to the decision of the Board.

In the event of any liquidation or dissolution or winding up to the Company, whether voluntary or involuntary, the holders of the Preferred Stock shall be entitled to be paid in full both the par value of their shares and the unpaid dividends accrued thereon, before any amount shall be paid to the holders of the Common Stock. After such payment to the holders of the Preferred Stock, the remaining assets of the Company shall be divided pro rata among the holders of both Common Stock and Preferred Stock

	
Pre-Emptive Rights
	
Each holder of Common Stock shall be entitled to pre-emptive rights as to all issues of Common Stock, and each holder of Preferred Stock as to all issues of Preferred Stock, whether such issues are to be made out of present authorized capital stock or out of a proposed increase of authorized capital stock of from treasury.

	
Right of First Refusal

	
(a) If any Party ( "Transferring Shareholder") wishes to sell, assign, or otherwise transfer its shares in the Company ("Transfer Shares") it shall first offer to sell such shares to the other Party ("Non-transferring Shareholder") through a written notice specifying the price, terms and conditions of its offer ("Transfer Notice").

(b) The Non-transferring Shareholder, within 60 calendar days from receipt of the Transfer Notice ("Exercise Period"), shall have the right to exercise the Right of First Refusal. If the Non-transferring Shareholder rejects the offer, or fails or otherwise refuses to accept the offer within the 60-day period, the Transferring Shareholder shall have the right to sell the Transfer Shares to a third party at a price and subject to terms and conditions no less favorable than those stated in the Transfer Notice, within 60 days from the lapse of the Exercise Period, or from receipt of a notice of rejection by the Non-transferring Shareholder, whichever is earlier ("Transfer Period").

	
Tag-Along Right
	
In the event that either Party agrees to sell all or part of its shares in the Company to a third party, and provided the other Party has not exercised its Right of First Refusal, the other Party has the right to join the transaction and sell its shares at the same terms to the third party.

	
Drag-Along Right
	
In the event that either Party agrees to sell all of its shares in the Company to a third party and the other party does not exercise its Right of First Refusal or Tag-Along Right, the selling Party has the right to force the other party to join in the sale of its shares in the Company at the same terms to the third party.

	
Prohibited Pledges and Involuntary Transfers
	
To the maximum extent permitted by applicable laws, each Party covenants and agrees that it shall not pledge or otherwise encumber its shares to, or in favor of, any financial institution or other person without the prior written consent of the other Party.

	
Other Restrictions on Transfer
	
No Party may transfer its shares to any person whose business competes with the business of the Company, unless with prior written consent of the other Party.

	
License over the TELUPAY Service
	
TELUPAY undertakes to grant to the Company, for the term of the joint venture and within the Philippines, an exclusive, royalty-free, and sublicenseable right and license to use and exploit the TELUPAY Services for the purpose of providing TELUPAY Services to CMIT other entities CMIT may decide to include, and to such other clients as may be agreed upon by the Parties. 

TELUPAY warrants that it has complete and absolute right, title and interest in the TELUPAY Services and all intellectual property rights thereto (including but not limited to any trademarks, patents, designs, copyrights, know-how) and is entitled to license the intellectual property rights in the TELUPAY Services to CMIT. TELUPAY further warrants and represents that the TELUPAY Services and the use by CMIT and/or its Members and sublicensees of the know-how and technical information or processes relating to the TELUPAY Services, will not infringe on the intellectual property rights of third parties.

	
Most Favored Licensee
	
The rate granted to the Company in consideration for the grant of license to use and exploit the TELUPAY Services shall be no less favorable than those granted to any other licensee of TELUPAY. In the event TELUPAY offers more favorable terms to another such licensee, TELUPAY will notify the Company promptly and provide the Company the option of amending the license agreement accordingly.

Should the Company avail of any other product/service of TELUPAY, the rate to be charged to the Company shall be no less favorable than those granted to any other licensee of TELUPAY for the same product/service. In the event TELUPAY offers more favorable terms to another such licensee, TELUPAY will notify the Company promptly and the Company shall have the right to substitute the more favorable rate granted to such third party.

	
No Competition
	
Each Party agrees that for as long as both Parties are stockholders of the Company, no Party will engage, directly or indirectly, either as proprietor, stockholder, partner, or otherwise, in the same or similar activities as were performed for the Company in any business in the Philippines which distributes or sells products or provides services similar to those distributed, sold, or provided by the Company at any time.

For a period of [three (3) years] after a Party ceases to be a stockholder of the Company, the said Party will not, directly or indirectly, either as proprietor, stockholder, partner, or otherwise, distribute, sell, offer to sell, or solicit any orders for the purchase or distribution of any products or services which are similar to those distributed, sold or provided by the Company, to or from any person, firm or entity in the Philippines which was a customer of the Company.

	
Termination/Cancellation
	
This agreement shall be automatically terminated/ cancelled if the SEC:(a) does not approve the incorporation of the Company within sixty (60) days from the signing of the Joint Venture Agreement; (b) denies the application for incorporation of the Company; or (c) requires amendment of the Articles of Incorporation and By-Laws of the Company which either Party deems unacceptable in its good faith business judgment.

	
Governing Law
	
This Agreement shall be governed by, and construed in accordance with, the laws of the Philippines.

	
Dispute Resolution
	
Any dispute, controversy or claim which may arise out of or in connection with the Agreement, or the breach, termination or invalidity thereof, shall, at the first instance, be settled by negotiation and consultation by the parties in good faith.

In the event of such dispute, differences or disagreement cannot be settled by mutual agreement within the 60-day period, the same shall be settled finally by arbitration in the Philippines. The arbitration shall be conducted in accordance with the rules set forth by the Philippine Dispute Resolution Center, Inc. ("PDRCI").

Any arbitration proceedings or award rendered hereunder and the validity, effect and interpretation of this agreement to arbitrate shall be governed by the laws of the Republic of the Philippines and the rules of the PDRCI.

The award shall be final and binding upon the Parties, and shall be the sole and exclusive remedy between the Parties regarding any claims, counterclaims, issues, or accountings presented to the arbitral tribunal. Each of the Parties hereto waives any right to appeal any decision reached by the arbitrator(s). Judgment upon any award may be entered in any court having jurisdiction.

This Agreement and the rights and obligations of the Parties hereunder shall remain in full force and effect pending the award in any arbitration proceeding. 

This Agreement to arbitrate shall be binding upon the successors, assigns and any trustee or receiver of each Party.

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