EXHIBIT 10.22
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PROJECT SERVICES AGREEMENT
DATED AS OF JANUARY 11, 1999
BETWEEN
VIATEL, INC.
AND
BECHTEL LIMITED
CIRCE CABLE PROJECT
CIRCE 2 SYSTEM
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TABLE OF CONTENTS
PAGE NO.
SECTION 1. DEFINITIONS; INTERPRETATION..............................1
1.1 Defined Terms............................................1
1.2 Rules Of Construction....................................1
SECTION 2. RESPONSIBILITIES OF THE PARTIES..........................2
2.1 Program Manager's Responsibilities.......................2
2.2 Owner's Responsibilities.................................3
SECTION 3. COMPLIANCE WITH LAWS; PERMITS............................6
3.1 Compliance With Laws.....................................6
3.2 No Liability Of Owner Persons............................6
3.3 Variations Required By Law...............................6
3.4 Permits 6
SECTION 4. SUPPLIER CONTRACTS.......................................7
4.1 Generally................................................7
4.2 Terms And Conditions Of Supplier Contracts...............7
4.3 Approval7
4.4 Extension Of Time........................................7
4.5 Agency 7
SECTION 5. WAYLEAVES................................................8
5.1 Generally................................................8
5.2 Approval By The Owner....................................8
SECTION 6. INTELLECTUAL PROPERTY RIGHTS.............................9
6.1 Supplies.................................................9
6.2 Owner Contracts And Overall System Design................9
6.3 New Developments By the Program Manager..................9
6.4 The Program Manager's Existing Intellectual Property.....9
SECTION 7. REIMBURSABLE COSTS, FEES AND PAYMENTS TO THE
PROGRAM MANAGER.........................................10
7.1. Reimbursable Costs......................................10
7.2 Service Fees............................................10
7.3 Payments Generally......................................11
SECTION 8. MAINTENANCE OF BOOKS AND RECORDS........................14
8.1 System Records..........................................14
8.2 The Program Manager's Records...........................15
8.3 Access To Records.......................................15
SECTION 9. TAXES...................................................15
9.1 Responsibility For Taxes................................15
9.2 Exemption From Taxes....................................15
SECTION 10. CHANGE ORDERS...........................................15
10.1 Equitable Relief........................................15
10.2 Reduction in Scope of Services..........................17
10.3 Effect of Changes.......................................17
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10.4 Procedure For Implementing Change Order Amendments......18
SECTION 11. GUARANTEED RFS DATE, DELAY DAMAGES, PERFORMANCE BONUS...18
11.1 Guaranteed RFS Date.....................................18
11.2 Effect of Schedule Incentive Fee........................18
11.3 Minimising Delay........................................19
SECTION 12. FORCE MAJEURE...........................................19
12.1 Definition..............................................19
12.2 Notice 20
12.3 Effect Of Force Majeure.................................20
SECTION 13. REPRESENTATIVES OF THE PARTIES..........................20
SECTION 14. INSPECTION RIGHTS.......................................21
14.1 Generally...............................................21
14.2 No Relief...............................................22
SECTION 15. SUSPENSION BY OWNER OR PROGRAM MANAGER..................22
15.1 Suspension By the Owner.................................22
15.2 Suspension By Program Manager...........................23
15.3 Extension Of Time And Stand-by Costs....................23
15.4 The Program Manager's Duties Upon Suspension............23
15.5 The Program Manager's Duties After Suspension...........24
SECTION 16. OPTIONAL TERMINATION....................................24
16.1 Termination.............................................24
16.2 Termination Date........................................24
16.3 Payment.................................................24
SECTION 17. EVENTS OF DEFAULT AND REMEDIES..........................24
17.1 Events Of Default By Program Manager....................24
17.2 No Prejudice............................................26
SECTION 18. DUTIES UPON TERMINATION BY OWNER........................26
18.1 Generally...............................................26
SECTION 19. LIMITATION OF LIABILITY.................................27
19.1 Supplies, Services, Work, Etc. Provided By Others.......27
19.2 Aggregate Cap On Liability..............................28
19.3 Loss Or Damage To The System............................28
19.4 Consequential Loss, Etc.................................29
19.5 Scope Of Limitations....................................29
19.6 Hazardous Waste Or Materials............................29
SECTION 20. WARRANTIES..............................................29
20.1 General Warranty of Services............................29
20.2 Liability In Respect Of The Services....................29
20.3 Alternative Remedy......................................29
20.4 Defects And Deficiencies................................30
SECTION 21. PERFORMANCE TESTS AND RFS CERTIFICATES..................30
21.1 Performance Testing Generally...........................30
21.2 Issuance Of RFS Certificates............................30
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21.3 Punch List..............................................31
21.4 Effect of System RFS Certificate........................31
21.5 Final Acceptance........................................31
SECTION 22. REPRESENTATIONS AND WARRANTIES..........................31
22.1 The Program Manager's Representations And Warranties....31
22.2 The Owner's Representations And Warranties..............32
SECTION 23. INSURANCE...............................................33
23.1 Insurance Generally.....................................33
SECTION 24. CONFIDENTIALITY AND PROPRIETARY INFORMATION.............34
24.1 Confidentiality.........................................34
24.2 Publicity...............................................35
SECTION 25. CORRUPT GIFTS AND THE PAYMENT OF COMMISSIONS............35
25.1 Gifts, Etc..............................................35
25.2 Payments................................................35
25.3 Foreign Corrupt Practices Act...........................36
25.4 Permitted Activities....................................36
25.5 Materiality.............................................36
SECTION 26. RELATIONSHIP OF THE PARTIES.............................36
26.1 Generally...............................................36
26.2 Capacity Of Suppliers...................................36
SECTION 27. NOTICES.................................................36
27.1 Methods And Effectiveness...............................36
27.2 Addresses...............................................37
27.3 English Language........................................37
SECTION 28. DISPUTE RESOLUTION; CONSENT TO JURISDICTION.............38
28.1 Mutual Discussions......................................38
28.2 Resolution By Independent Senior Management.............38
28.3 Mediation...............................................38
28.4 Consent To Jurisdiction.................................38
SECTION 29. MISCELLANEOUS...........................................39
29.1 Headings................................................39
29.2 Governing Law...........................................39
29.3 Severability............................................39
29.4 Integration.............................................39
29.5 Amendments And Waivers..................................39
29.6 Further Assurances......................................39
29.7 Counterparts............................................39
29.8 Successors And Assigns..................................39
EXHIBITS
EXHIBIT A Defined Terms
EXHIBIT B Scope of Services
EXHIBIT C Technical Specification
EXHIBIT D Fee Schedule
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EXHIBIT E Recoverable Costs
EXHIBIT F Insurance Schedule
EXHIBIT G Supplier Contracts
EXHIBIT G-1 MATERIAL TERMS AND CONDITIONS OF SUPPLIER CONTRACTS
EXHIBIT G-2 FORM OF SUPPLIER CONTRACT
EXHIBIT H Form of Certificate of Payment and Final Release
EXHIBIT I Form of Lien Release
EXHIBIT J Schedule of Key Program Manager Personnel
EXHIBIT K Target Cost Assumptions
EXHIBIT L Wayleave Criteria
EXHIBIT M Owner Security
PROJECT SERVICES AGREEMENT
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THIS PROJECT SERVICES AGREEMENT is made this 11th day of January, 1999
BETWEEN:
(1) VIATEL, INC., a Delaware corporation (the "Owner"); and
(2) BECHTEL LIMITED, a United Kingdom limited liability company (the
"Program Manager").
WHEREAS:
(A) The Owner is developing the System (as hereinafter defined); and
(B) The Owner seeks to obtain, and the Program Manager desires to provide,
certain services for the program management and administration of
design, engineering, procurement, permitting, construction,
installation and testing of the System, with a view toward the delivery
to the Owner of an operable System incorporating network equipment and
other System components, as identified in the Technical Specification,
to be provided by contractors and suppliers engaged by the Owner.
NOW, THEREFORE, the Parties, in consideration of the mutual covenants herein
expressed, covenant and agree with each other as follows:
SECTION 1. DEFINITIONS; INTERPRETATION
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1.1 DEFINED TERMS. As used in this Contract, capitalised terms shall have the
meanings ascribed thereto in Exhibit A hereto.
1.2 RULES OF CONSTRUCTION. In the interpretation of this Contract, unless the
context otherwise requires:
(a) The singular includes the plural and vice versa and, in particular
(but without limiting the generality of the foregoing), any word or expression
defined in the singular has the corresponding meaning used in the plural and
vice versa.
(b) The term "or" is not exclusive;
(c) The term "including" shall mean "including, without limitation."
(d) Any reference to any gender includes the other gender.
(e) Any reference to any agreement, instrument, contract or other
document shall:
(i) include all appendices, exhibits, annexes and schedules
thereto; and
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(ii) be a reference to such agreement, instrument, contract or
other document as amended, supplemented, modified, suspended, restated or
novated from time to time.
(f) Any reference to any Law or Codes and Standards shall include all
statutory and administrative provisions consolidating, amending or replacing
such Law or Codes and Standards, and shall include all rules and regulations
promulgated thereunder.
(g) Any reference to "hereof , "hereto", "herein", "hereunder" or any
other similar term is a reference to this Contract as a whole, and not to any
particular provision or part of this Contract.
(h) Any reference to any Person includes its permitted successors and
assigns.
(i) Unless otherwise specified, a reference to a Section or Exhibit is
to the Section or Exhibit of this Contract.
(j) Unless otherwise specified, any right may be exercised at any time
and from time to time.
(k) If an index or similar reference referred to in this Contract is
changed or no longer published or reported by the Person (or such Person's
successor) who, on the date hereof, publishes or reports such index or
reference, then the Parties shall use their best efforts to replace such index
with the best substitute for the changed or no-longer published index or
reference.
SECTION 2. RESPONSIBILITIES OF THE PARTIES
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2.1 PROGRAM MANAGER'S RESPONSIBILITIES.
(a) THE SERVICES. The Program Manager shall provide certain services of
the types identified in Exhibit B hereto (the "Services") for the program
management and administration of design, engineering, procurement, permitting
(including obtaining of Wayleaves and Permits), construction, installation and
testing of the System with a view toward the delivery to the Owner of an
operable System incorporating the Services, the Supplies, the Procured Services
and the Owner-Procured Equipment, in each case, to the extent specified in the
Technical Specification.
(i) SCOPE OF SERVICES. The scope of the Services is more fully
described in Exhibit B to this Contract and the Target Cost Assumptions set
forth in Exhibit K hereto.
(b) THE PROGRAM MANAGER'S PERSONNEL. The Program Manager shall employ
in connection with performance of this Contract only such Program Manager
Personnel who are safety-conscious, suitably skilled and experienced, and shall
agree to provide to the Owner, subject to the Owner's assumption of appropriate
confidentiality undertakings in respect thereof, all such resumes and other
relevant biographical and employment data as of such date on file with the
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Program Manager for the Program Manager Personnel as the Owner may reasonably
request. The Owner or the Owner's Project Representative may, but not
unreasonably or vexatiously, object to and direct the Program Manager to remove
within [REDACTED] any Program Manager Personnel from the Sites or the
performance of the Services; PROVIDED, that the Owner shall be entitled to
review to its satisfaction and pre-approve all Key Program Manager Personnel
proposals or appointments, and may, in its sole discretion upon reasonable
notice to the Program Manager, reject or remove any such Persons so proposed or
appointed. Any Person subject to removal or rejection by the Owner in accordance
with this Section 2.1 shall not be employed again for any portion of the
Services hereunder without the prior approval of the Owner's Project
Representative.
(c) LIMITATIONS ON PERSONNEL NUMBERS. Within the first [REDACTED] Days
after commencement of the Services, the Program Manager shall submit for the
approval of the Owner's Project Representative a staffing plan with respect to
the Full-Time Equivalent Personnel to be utilized by the Program Manager for the
duration of the Services. At the time of submission, on or before the [REDACTED]
calendar month, of each of the Program Manager's monthly progress reports, the
Program Manager may request an adjustment to the number of Full-Time Equivalent
Personnel as set forth in such staffing plan, and if the Owner's Project
Representative concurs with such adjustment, an appropriate revision will be
made thereto. In addition, the Program Manager may request an interim adjustment
to the staffing plan, as follows:
(i) if at any time the Program Manager reasonably believes that
the limitation on Full-Time Equivalent Personnel set forth in any staffing plan
is likely to cause a failure to meet the Guaranteed RFS Date, the Program
Manager shall so notify the Owner, and such notification shall set out the
Program Manager's proposal (containing work-around plans demonstrating with
reasonable specificity the nature, cause and likelihood of anticipated delays)
for an increase in the number of Full-Time Equivalent Personnel authorized by
the relevant staffing plan; and
(ii) to the extent that the Owner consents to any such proposed
increase in personnel numbers it shall do so in writing; PROVIDED, that any
increase so authorized shall relate exclusively to the calendar month covered by
the relevant staffing plan and shall, upon development of each successive
staffing plan, be subject to full review and adjustment by the Parties, which
adjustment may include a reduction in the quantity of Full-Time Equivalent
Personnel down to such level as was in effect prior to any approved increase.
2.2 OWNER'S RESPONSIBILITIES.
(a) INFORMATION AND ITEMS TO BE FURNISHED BY OWNER. The Owner shall
furnish to the Program Manager in writing data and design criteria and other
information necessary to provide the basis upon which the Program Manager shall
perform the Services. The Program Manager shall be entitled to rely upon such
data, criteria and information in its performance of the Services. The Owner
shall grant or obtain permission for the Program Manager Personnel, Owner
Contractors and Suppliers to enter the Sites and such of the Owner's facilities
as to which any such Person may render System-related services.
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The Owner shall furnish to the Program Manager or secure the items
required to be furnished or secured by it, including, but not limited to, the
Owner-Procured Equipment, at such times and in such manner as may be required to
enable the Program Manager to perform the Services within the Target Cost and by
the Guaranteed RFS Date. In any case where the Owner is to review work or
respond to requests from the Program Manager, it shall do so promptly,
reasonably and in good faith so as not to delay performance of the Services.
(b) OWNER CONTRACTORS. The Owner will enter into contracts with (each
of the following, an "OWNER CONTRACTOR"):
(i) [REDACTED] for the procurement of the Fiber Optic Cable;
(ii) [REDACTED] or other vendor with respect to the engineering,
acquisition, installation, commissioning and testing of electronics and
equipment for the POPs and the Repeater Facilities; and
(iii) Colliers or other commercial realtor for POP acquisition.
The Owner shall procure that each of the Owner Contractors will
cooperate with the Program Manager and will not interfere with or impede the
Program Manager in carrying out the Services.
(c) TELECOMS LICENCES. The Owner shall obtain any and all Telecoms
Licences required by applicable Law for it to act as a telecommunications
operator or to install telecommunications facilities in [REDACTED].
(d) WAYLEAVES. In relation to any application for, or the granting of,
any Wayleave required for the installation of the Duct, the Fiber Optic Cable or
the Repeater Facilities in accordance with the Technical Specification, the
Owner shall, to the extent that each of the Program Manager's submissions and
proposals complies in all respects with the applicable Wayleave Criteria and the
other requirements of this Contract,
(i) sign and deliver all Wayleave-related documentation submitted
to it by the Program Manager for signature (unless the Program Manager is duly
authorized to sign on the Owner's behalf) within:
(A) [REDACTED], in the case of Public Forms; or
(B) [REDACTED], in the case of Public Contracts; or
(C) [REDACTED], in the case of Alternative Wayleaves;
and
(ii) take such other steps as may be necessary (including payment
of any fees, premiums or rents), within such time periods as specified in the
relevant Wayleave documents or as otherwise necessary for the expeditious
granting thereof.
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(e) POINTS OF PRESENCE. The Owner shall be fully responsible for
finding buildings for the POPs and acquiring a legal interest in such buildings,
and in relation to each such building the Owner shall:
(i) promptly notify the Program Manager of its location;
(ii) obtain the Program Manager's approval of its general
suitability (such approval not to be unreasonably withheld by the Program
Manager) (but, for the avoidance of doubt, the Program Manager shall not carry
out a detailed survey of the building);
(iii) obtain any landlord's consent or authorization of any
Governmental Authority that may be required for the required refurbishment
works, change of use or operation of the Owner's telecommunications facilities;
and
(iv) give the Program Manager access to the building to allow
commencement of the refurbishment work in accordance with the current project
schedule.
(f) SYSTEM DESIGN AND TECHNOLOGY. The Owner shall be responsible for
overall system design and for the technology used.
2.3 OWNER-CAUSED DELAY. Any of the following events or circumstances, to the
extent having an actual and adverse effect upon the Program Manager's ability,
despite the exercise of Prudent Practices in its performance of the Services
hereunder, to meet the Guaranteed RFS Date and/or the Target Cost, shall
constitute Owner-Caused Delay (each such event or circumstance, an "Owner-Caused
Delay") subject to the equitable relief provisions of Section 10 hereof:
(i) acts or omissions of Owner Persons or Owner Contractors (A) causing
any casualty or damage to the System or any Owner-Procured Equipment, Services,
Procured Services or Supplies, or (B) wrongfully interfering with the provision
of the Services, Procured Services or Supplies; or
(ii) except to the extent that any relevant obligation of the Owner is
governed by another express provision (including, without limitation, clause
(iii) of this Section 2.3) of this Contract, the Owner's or any Owner Person's
failure to furnish any item of Owner-Procured Equipment (including the Owner's
or any Owner Person's failure to furnish items of Owner-Procured Equipment that
are free from defects and deficiencies) or any information (including the
Owner's failure to provide accurate and complete information) that it is
required to provide hereunder, which failure, in each case (A) relates to an
item that is necessary to the Program Manager in order to complete the Services
by the Guaranteed RFS Date and for the Target Cost and (B) continues (without
the Owner's furnishing thereof or accommodation therefor) for a period in excess
of [REDACTED] after the Program Manager's notice to the Owner thereof; or
(iii) the Owner's unreasonable refusal to review or approve, or any
unreasonable delay in its review, approval, signature or delivery of, any item
of Services (including, without limitation, the Wayleave-related documentation
specified in Sections 2.2 and 5 hereof) complying with this Contract, in each
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case, within the time periods specified in this Contract for such review or
approval; or
(iv) the failure by the Owner to make available to the Program Manager
and the Suppliers the Sites (including any such failure with respect to the POPs
to be delivered to the Program Manager in accordance with Section 2.2(e)) on a
timely basis, or any interruption (except for purposes of reasonable inspection
as envisioned by this Contract) in the availability to the Program Manager or
any Supplier of any such Site caused by any Owner Person (including by virtue of
the Owner's commercial use or operation of the System or any portion thereof);
or
(v) the Owner's exercise of suspension rights pursuant to Section 15.1
hereof.
SECTION 3. COMPLIANCE WITH LAWS; PERMITS
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3.1 COMPLIANCE WITH LAWS. The Program Manager shall comply with all Laws and
Codes and Standards of the countries, provinces and territories in which any
part of the Services are to be performed and with all international treaties in
any way affecting this Contract or applicable to any of the Services. For the
purpose of performing the Services, the Program Manager shall, as agent for the
Owner:
(a) give all notices required by Law to be given to any Governmental
Authority;
(b) perform or permit the performance by authorised Persons of any
inspection required by Law; and
(c) pay all fees, charges, impositions or any other moneys payable to
any Governmental Authority or any public officer in respect of the Services (and
all such fees, charges, impositions and other moneys shall constitute
Recoverable Costs);
in each case, except to the extent that the Owner is responsible hereunder for
doing so (pursuant to Section 2.2), or as the Owner may otherwise instruct.
3.2 NO LIABILITY OF OWNER PERSONS. No Owner Person shall be responsible for any
act or omission of the Program Manager that violates any Law. The Program
Manager shall indemnify and hold harmless each Owner Person from and against any
and all liabilities to third parties arising as a result of any such violation
by the Program Manager.
3.3 VARIATIONS REQUIRED BY LAW. The Program Manager shall, before making any
variation from any design, drawing, plan, procedure or other matter that may be
necessitated by complying with any Change in Law, give to the Owner written
notice, specifying the variations proposed to be made, and the reasons for
making them, and make proposals for a Change Order in accordance with Section
10.
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3.4 PERMITS. The Program Manager shall procure, as agent for the Owner, all
Permits necessary for System completion in accordance with this Contract, and
shall deliver such Permits and all related documentation to the Owner on or
before the System RFS Date. The Program Manager shall, in performing its
obligations under this Section 3.4, identify and present to the Owner for its
approval a detailed list of all Permits potentially required hereunder, and the
Owner shall promptly advise the Program Manager in writing of the Owner's
requirements and recommendations with respect to the procurement of the Permits
so identified by the Program Manager.
SECTION 4. SUPPLIER CONTRACTS
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4.1 GENERALLY. The Program Manager shall, as agent for the Owner, negotiate and
prepare the Supplier Contracts, and in the case of any [REDACTED], the Program
Manager shall present the same to the Owner for approval. Where any [REDACTED],
the Program Manager shall be free to enter into the Supplier Contract, as agent
for the Owner, without obtaining the prior approval of the Owner.
4.2 TERMS AND CONDITIONS OF SUPPLIER CONTRACTS. Each Supplier Contract prepared
and negotiated by the Owner shall utilize the format, to the extent applicable,
of the form of Supplier Contract annexed as Exhibit G-2 to this Contract. The
Program Manager shall, subject to this Section 4.2, ensure that each Supplier
Contract presented to the Owner for approval incorporates all terms and
conditions (or terms and conditions offering protections that are equivalent to
or in excess of those) specified in Exhibit G-1 hereto as are applicable to such
Supplier Contract. If, despite the Program Manager's use of Prudent Practices,
it is not practicable (taking account of the cost implications and all other
relevant considerations) to incorporate into any Supplier Contract the terms and
conditions (or equivalent terms and conditions) specified in Exhibit G-1 hereto,
the Program Manager shall present to the Owner for its approval a Supplier
Contract incorporating the most favourable alternate terms (including the most
favourable alternate warranties in favour of the Owner) the Program Manager was
able to procure in its exercise of Prudent Practices.
4.3 APPROVAL. The Owner shall, within [REDACTED] of receiving a Supplier
Contract for approval, by written notice to the Program Manager either:
(a) approve the Supplier Contract; or
(b) specify in what respect it does not approve the Supplier Contract
and the steps that it requires the Program Manager to take in relation thereto;
and in the latter case the Program Manager shall employ Prudent Practices to
take all steps required by the Owner and, having done so, shall re-submit the
Supplier Contract to the Owner for approval, and the provisions of this Section
4.3 shall apply in respect thereof. The Owner's failure to provide any written
notice within the time period specified in this Section 4.3 shall result in the
relevant Supplier Contract being deemed for purposes of this Contract approved
in all respects by the Owner.
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4.4 EXTENSION OF TIME. If (i) the Owner requires the Program Manager to take
measures pursuant to Section 4.3(b), and (ii) the taking of such steps is likely
to cause the Program Manager delay in meeting the Guaranteed RFS Date, then,
unless the necessity for such measures or delay results from the Program
Manager's failure to [REDACTED] or comply with applicable Technical Requirements
in performing its obligations under this Section 4, the Program Manager shall be
entitled to an extension of time by means of a Change Order executed and
delivered in accordance with Section 10.
4.5 AGENCY. The Parties acknowledge and agree that:
(a) the Program Manager shall, unless otherwise directed by the Owner,
act as the Owner's agent in entering into and administering each Supplier
Contract, and shall, in such connection, perform the obligations (including
making payments on the Owner's behalf to Suppliers, subject to the Owner's
compliance with its payment obligations to the Program Manager under Section 7
hereof) and exercise the rights of the Owner thereunder; and
(b) notwithstanding the Program Manager's entry into Supplier Contracts
as agent for the Owner, the Program Manager shall not have any liability to the
relevant Suppliers under such Supplier Contracts, and all obligations owed to
the Supplier under the Supplier Contract shall be owed by the Owner.
SECTION 5. WAYLEAVES
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5.1 GENERALLY. As soon as practicable, the Program Manager shall, as agent for
the Owner, identify, conduct preliminary negotiations concerning, and present to
the Owner proposed terms and conditions for all such Public Wayleaves as are
necessary for the installation and operation of the Fiber Optic Cable, the Duct
and the Repeater Facilities. Each Public Wayleave so presented by the Program
Manager to the Owner shall satisfy all Wayleave Criteria applicable thereto, or,
if any such Public Wayleave is not available to the Owner due to a Change in
Law, Wayleave or Permit Failure, Owner-Caused Delay or Force Majeure Event, the
Program Manager shall prepare and present to the Owner a work-around plan
identifying alternative wayleaves or other System access rights ("Alternative
Wayleaves") complying with the Wayleave Criteria applicable thereto and the
other requirements of this Contract. All costs incurred by the Program Manager
in the preparation and submission to the Owner of Alternative Wayleave and
work-around proposals shall, to the extent that each relevant proposal has been
prepared and submitted in accordance with Prudent Practices, the Wayleave
Criteria and the requirements of this Contract, be reimbursed to the Program
Manager as Recoverable Costs.
5.2 APPROVAL BY THE OWNER. The Program Manager shall consult on an ongoing basis
with (and at all times during which Wayleave procurement is proceeding, report
on a weekly basis to) the Owner as to each Wayleave that it proposes to the
Owner. The Owner may reject any such proposal (or may instruct the Program
Manager to cease any further activity with respect thereto) if it determines
that the proposed Wayleave does not (or in the Owner's reasonable judgment, will
not) meet applicable Wayleave Criteria and, in the case of Alternative
Wayleaves, that the route, price or other commercial terms and conditions on
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which such Alternative Wayleave is or may be available will not be desirable in
light of the Technical Specification and the other requirements of the System.
In the case of proposals so rejected, terminated or suspended by the Owner, the
Program Manager shall be entitled to (i) reimbursement, as Recoverable Costs, of
any costs incurred as of the relevant rejection, termination or suspension date
(PROVIDED, in the case of suspension, that the Program Manager shall be entitled
to Reimbursable Costs for its resumption of Services with respect to any such
suspended Wayleave proposal) by the Program Manager in the negotiation,
preparation and presentation to the Owner of such rejected, terminated or
suspended Wayleave and (ii) schedule relief to the extent specified in Section
10 hereof, PROVIDED, that the Program Manager shall not be entited to such
schedule relief if the failure of any Wayleave proposal to meet the Wayleave
Criteria is the result of the Program Manager not having performed its
obligations in accordance with the General Warranty in light of such Wayleave
Criteria.
In the event of the Owner's refusal to grant schedule relief claimed by the
Program Manager in connection with any Wayleave proposal rejected in accordance
with this Section 5.2, the Program Manager may, upon written notice to the Owner
within [REDACTED] after such refusal, require that the matter be referred,
within [REDACTED] thereafter, to an independent expert appointed by the Parties'
respective senior management for resolution within [REDACTED] after such
referral.
SECTION 6. INTELLECTUAL PROPERTY RIGHTS
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6.1 SUPPLIES. The Program Manager shall endeavour to procure that each Supplier
Contract, pursuant to which Supplies are provided for the System, contains
provisions whereby:
(a) the Owner is granted a licence in respect of Intellectual Property
Rights in the Supplies to the extent that such a licence is necessary for the
ownership, operation, maintenance and marketing of the System;
(b) the Supplier in question agrees to indemnify, protect, defend and
hold harmless the Owner and Program Manager from and against any liability to
third persons based upon, arising out of or otherwise related to an infringement
or claimed infringement of Intellectual Property Rights in the Supplies by
reason of the Owner's ownership, operation, maintenance or marketing of the
System.
Provided that if any Supplier shall refuse to agree to the
incorporation of such provisions despite the Program Manager's use of Prudent
Practices to secure such agreement, the Program Manager shall consult with the
Owner to agree on an appropriate course of action.
6.2 OWNER CONTRACTS AND OVERALL SYSTEM DESIGN. The Owner shall be responsible
for obtaining any licences which it requires in respect of Intellectual Property
Rights in the Owner-Procured Equipment or the overall network design for the
System and shall indemnify, protect, defend and hold harmless the Program
Manager from and against any liability to third persons based upon, arising out
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of or otherwise related to an infringement or claimed infringement of any such
Intellectual Property Rights by reason of the Program Manager's performance of
its obligations in accordance with Prudent Practices and the terms of this
Contract.
6.3 NEW DEVELOPMENTS BY THE PROGRAM MANAGER. If, in performing Services for
which the Program Manager is compensated by way of Recoverable Costs, the
Program Manager develops any new items or processes which are independent of
items or processes developed by the Program Manager otherwise than pursuant to
this Contract, any Intellectual Property Rights therein shall belong to the
Owner, and the Program Manager shall have a non-exclusive royalty-free licence
to use the same for any purposes, including the right to grant sub-licences in
respect thereof.
6.4 THE PROGRAM MANAGER'S EXISTING INTELLECTUAL PROPERTY. All Intellectual
Property Rights in items or processes developed by the Program Manager otherwise
than pursuant to this Contract shall remain the property of the Program Manager,
but to the extent that the Program Manager uses any such items or processes in
performing the Services, the Owner shall have a non-exclusive, royalty-free
license to use the same for any purpose connected with the System, including the
right to grant sub-licences for any such purpose.
SECTION 7. REIMBURSABLE COSTS, FEES AND PAYMENTS TO THE PROGRAM
MANAGER
----------------------------------------------------------
7.1. REIMBURSABLE COSTS. The Owner shall, within [REDACTED] after the Program
Manager's submission to the Owner of its Reimbursement Invoice in respect
thereof, reimburse the Program Manager for the full amount of all Reimbursable
Costs expended or disbursed by the Program Manager in performing the Services,
subject the Program Manager's compliance with the provisions of this Section 7.
The Program Manager shall be entitled to submit no more than 2 Reimbursement
Invoices in any calendar month.
(a) OWNER SECURITY. The Owner shall establish for the benefit of the
Program Manager, a letter of credit or equivalent escrow account (the "Owner
Security") on terms and with a bank reasonably acceptable to the Program Manager
as security for payment of the Reimbursable Costs. The Owner Security shall be
issued and outstanding at all times during performance of the Services in an
amount necessary to meet the monthly cash-flow requirements set forth in Exhibit
M hereto. Prior to exercising any rights against the Owner Security, the Program
Manager shall notify the Owner that the Owner has failed to pay, within the
period specified for such payment, an amount due and payable to the Program
Manager in respect of a Reimbursement Invoice duly submitted by the Program
Manager in accordance with this Section 7. The Owner shall, to the extent that
no Event of Default nor other event entitling the Owner to withhold payments to
the Program Manager has occurred and is continuing, reimburse the requested
amount to the Program Manager by the close of business on the [REDACTED] next
succeeding the Program Manager's notice, whereupon the Owner's failure to do so,
shall entitle the Program Manager to draw upon the Owner Security in the amount
of such outstanding payment.
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7.2 SERVICE FEES. The Program Manager shall be entitled to Service Fees as
follows:
(a) [REDACTED]
(b) INCENTIVE FEE. [REDACTED]
(i) SCHEDULE COMPONENT. A portion (the [REDACTED]) of the
Incentive Fee equal to [REDACTED] payable in respect of the Program Manager's
achievement of the System RFS Date by the Guaranteed RFS Date, which Schedule
Incentive Fee shall be subject, as applicable, to:
(A) reduction by an amount [REDACTED] of such Schedule
Incentive Fee, for each Day that shall elapse after the 15th Day following the
Guaranteed RFS Date until the System RFS Date up to a limit of the full amount
of such Schedule Incentive Fee; or
(B) increase by an amount [REDACTED] of such Schedule
Incentive Fee for each Day following the System RFS Date up to and including the
Guaranteed RFS Date, up to a limit of one half of such Schedule Incentive Fee;
and
(ii) COST COMPONENT. A portion (the [REDACTED]) of the Incentive
Fee equal to [REDACTED] payable in respect of the Program Manager's completion
of all Services for a Total Completion Cost equivalent to the Target Cost, which
Cost Incentive Fee shall be subject, as applicable, to:
(A) [REDACTED]
(B) [REDACTED]
7.3 PAYMENTS GENERALLY.
(a) PAYMENTS IN DOLLARS OR OTHER CURRENCY. All payments to the Program
Manager shall be made in Dollars except that, where the Program Manager incurs
12
Reimbursable Costs in another currency, it may report and be reimbursed in the
original currency of expenditure.
(b) INTEREST. Any overpayment, late payment or disputed amount later
determined to have been due and payable shall, to the extent that such payment
or amount has not been paid or reimbursed within [REDACTED] the due date
therefor, accrue interest at the Interest Rate for each Day occurring after the
relevant due date until payment or reimbursement of such amount, together with
applicable interest, is made in full.
(c) TAXES. All payments to be made to the Program Manager hereunder
shall be made free and clear of any and all Taxes; provided, however, that:
(i) If the Owner:
(A) receives a notice, order or instruction from a competent
Governmental Authority that a Tax is required to be withheld by
Law; or
(B) otherwise has a reasonable belief that any tax is
required to be withheld from any payment due to the Program
Manager
then the Owner shall promptly so inform the Program
Manager as far in advance of any proposed withholdings as
practicable.
(ii) The Program Manager shall use its best efforts to obtain
documentary evidence from the relevant taxing authorities reasonably
satisfactory to the Owner that the Owner is not required to withhold such Tax.
If the Program Manager is unable to obtain such documentary evidence on a timely
basis, then the Owner shall proceed to withhold any such Tax. Thereafter, the
Owner shall, at the Program Manager's expense, provide any documentation or
other co-operation as may be reasonably requested by the Program Manager to
permit the Program Manager to recover any withheld amounts to which the Program
Manager is entitled.
(iii) The Program Manager shall protect, defend, indemnify in full
and hold harmless each Owner Person from and against any Losses based upon,
arising out of or otherwise related to Taxes that are owed by the Program
Manager to any taxing authority.
(c) EFFECT OF PAYMENT. No payment (final or otherwise) made under or in
connection with this Contract shall be conclusive evidence of the performance of
the Services, or of this Contract, in whole or in part, and no such payment
shall be construed:
(i) to constitute the acceptance of any Services that have not
been performed by the Program Manager in accordance with Prudent Practices or
any requirement of this Contract applicable thereto; or
(ii) to release the Program Manager from any of its obligations
under this Contract.
13
(d) CONDITIONS TO PAYMENTS. The Owner shall have no obligation to pay
for any portion of the Services (including the payment of any Incentive Fee) in
the following circumstances, and may withhold any payment to be made to the
Program Manager hereunder (subject, however, to the Owner's release of the full
amount of such withholdings upon the Program Manager's cure of the relevant
deficiency or breach) the extent that:
(i) such portion (or in the case of the Incentive Fee, any item of
Services) has not been performed in accordance with the requirements of this
Contract (including the General Warranty); PROVIDED that:
(A) the Owner shall have notified the Program Manager in
writing, stating such failure or non-compliance with reasonable
specificity; and
(B) such notification is given as soon as reasonably
practicable after the Owner's discovery thereof;
PROVIDED FURTHER that, except to the extent that the Owner is
not otherwise entitled to do so on account of an Event of Default
pursuant to Section 17.1(a) hereof, nothing contained in this
provision shall entitle the Owner to withhold any sums on the
grounds of delay in performance of the Services; or
(ii) the Program Manager has not delivered (or has not caused to
be delivered) to the Owner the documentation required for payment in respect of
such portion of the Services pursuant to Section 7.3(e) hereof (or in the case
of the Incentive Fee, any of the documentation specified in subparagraph (ii) of
such Section 7.3(e)).
(e) PAYMENT DOCUMENTATION. The Program Manager shall deliver (or cause
to be delivered) to the Owner the following documentation in connection with,
and as a condition to, its receipt of the following payments:
(i) REIMBURSABLE COSTS. On or before [REDACTED] calendar month,
the Program Manager shall prepare and submit to the Project Representative its
projection (identifying, in the form of Exhibit K hereto, anticipated items of
Services, Supplies and Procured Services together with the Reimbursable Costs
payable in respect thereof) of the following month's anticipated Reimbursable
Costs. The Program Manager shall notify the Owner of, and shall be entitled to
submit each Reimbursement Invoice upon, its actual expenditure or disbursement
of Reimbursable Costs subject to any such Reimbursement Invoice, and shall
attach to or include in each Reimbursement Invoice a statement (x) certifying to
the Owner that the full amount of the invoiced Reimbursable Costs have in fact
been expended or disbursed by the Program Manager as of the date of such
Reimbursement Invoice, and (y) allocating the Reimbursable Costs between
Supplier Costs and Recoverable Costs, and shall submit together therewith the
following documents:
(A) As to Supplier Costs,
14
(1) an itemized statement detailing each payment made to
Suppliers, with specific identification (by reference to the
relevant Supplier Contract) of items of Supply or Procured
Services for which reimbursement is claimed by the Program
Manager;
(2) a Lien Release executed by each Supplier with
respect to all Procured Services or Supplies having a
Supplier Cost (including all prior payments made to the
relevant Supplier in respect thereof) in [REDACTED] for which
the Program Manager has made payment and is seeking
reimbursement; and
(3) the Supplier Cost Verification as to Procured
Services or Supplies having a Supplier Cost (including all
prior payments made to the relevant Supplier in respect
thereof) in excess of $500,000 for which reimbursement of
Supplier Costs is sought; and
(B) As to Recoverable Costs,
(1) an itemized statement detailing each such
Recoverable Cost [REDACTED], identifying all relevant Persons
performing the Services with the dates of performance
thereof; and
(2) a Lien Release executed by the Program Manager,
certifying that each Person engaged by it to perform Services
hereunder has been paid in full and that there are no Liens
asserted with respect to the Services for which reimbursement
is sought.
(ii) INCENTIVE FEES. To the extent that any of the following have
not been delivered to the Owner on or prior to the System RFS Date, the Program
Manager shall deliver to the Owner, together with the relevant Incentive Fee
Invoice, the following documents:
(A) all Permits;
(B) Certificates of Payment and Final Release executed by the
Program Manager and each Supplier;
(C) copies of all technical documentation, drawings and
specifications forming a part of the Technical Requirements or
otherwise relating to the Services, the Procured Services or the
Supplies; and
(D) in respect of the Cost Incentive Fee, a final, itemised
statement of the Total Completion Cost prepared by the Program
Manager (which shall attach or enclose appropriate records and
documentary support, or shall otherwise reference the relevant
books, records and receipts, all of which shall be made available
15
to the Owner upon request in connection with the Owner's review of
such statement of the Total Completion Cost). If the Owner
believes that there is any error in the Program Manager's
statement of the final Total Completion Cost it shall so notify
the Program Manager within 10 Business Days after the Program
Manager's submission of such statement to the Owner, specifying
the grounds for its belief in sufficient detail to enable the
Program Manager to investigate the same.
SECTION 8. MAINTENANCE OF BOOKS AND RECORDS
--------------------------------
8.1 SYSTEM RECORDS. The Program Manager shall keep, and maintain for a period
ending upon the later of:
(a) [REDACTED]; and
(b) the date on which no claim based upon, arising out of or related to
this Contract is outstanding,
all books, records, vouchers and accounts pertaining to this Contract,
including such books, records, accounts and vouchers related to the Program
Manager's payments to Suppliers and the Reimbursement Invoices. All such books,
records, vouchers and accounts shall be maintained in accordance with generally
accepted accounting principles and practices consistently applied, and shall,
upon the Owner's prior instruction, be organised to allow for segregation of
System investment and related records as the Owner may direct. At the Owner's
request, all records required to be maintained pursuant to this Section 8.1
shall be delivered to the Owner on Final Acceptance, and the Program Manager
shall be entitled to keep copies thereof, subject to its confidentiality
obligations under Section 24 hereof.
8.2 THE PROGRAM MANAGER'S RECORDS. The Program Manager shall maintain its
customary fiscal records and books of account in accordance with generally
accepted accounting principles and practices consistently applied. Records
maintained pursuant to this Section 8.2 shall remain in the custody of the
Program Manager, but the Owner shall have access, upon reasonable notice, during
business hours to such records for the sole purpose of examination or
verification of the direct costs (excluding direct costs compensated by means of
established or standard allowances and rates) relating to performance of the
Services.
8.3 ACCESS TO RECORDS. The Program Manager shall give each Owner Person full
access, upon reasonable notice, during business hours, to all documentation and
records required to be kept, obtained and maintained pursuant to Section 8.1 and
shall not destroy any such documentation or records without affording the Owner
an opportunity to review or copy the same.
SECTION 9. TAXES
-----
9.1 RESPONSIBILITY FOR TAXES. The Owner acknowledges that any and all Taxes
payable in respect of the Services shall constitute Recoverable Costs, and that
16
any Taxes actually paid in respect of any Procured Services or the Supplies
shall constitute Supplier Costs.
9.2 EXEMPTION FROM TAXES. The Program Manager shall use all reasonable efforts
to have all Services, the Procured Services and the Supplies made exempt from
all Taxes, whether in the manufacture thereof, related to the importation or
location or installation thereof, and shall co-operate fully with the Owner in
this respect. The Program Manager hereby undertakes to make applications for
such revisions and for drawbacks, remissions, reclassifications or the like to
the appropriate Governmental Authorities, in accordance with the relevant Laws
then in force. Notwithstanding the foregoing, should the Owner be made aware of
any area of exemption from taxes or duties, then the Owner shall identify such
area to the Program Manager, which shall investigate the same.
SECTION 10. CHANGE ORDERS
-------------
10.1 EQUITABLE RELIEF. The Program Manager shall be entitled to equitable relief
with respect to the requirements of this Contract in the following circumstances
and in accordance with the following procedures:
(a) INCLUDED EVENTS. In the event that the Program Manager is, despite
the exercise of Prudent Practices and through no fault or omission of any
Program Manager Personnel, delayed or subjected to increased costs in its
performance of the Services, the Program Manager may, to the extent that such
delays or increased costs result directly from any of the following events or
circumstances (each such event or circumstance so affecting the Program
Manager's performance hereunder, a "Change Event") or any combination of Change
Events (excluding, however, the effect of any event or circumstance not
expressly set forth herein as a Change Event), be entitled to an adjustment (to
be reflected in a Change Order executed and delivered by the Parties) to the
Guaranteed RFS Date, the Target Cost or the Service Fees, as applicable:
(i) changes or additions to the general scope of this Contract,
changes to the method or manner of performance of the Services as
instructed by the Owner (including, without limitation, any direction
by the Owner to expand build-out of the System, whether within the
jurisdictions contemplated by this Contract or into neighbouring
countries);
(ii) any Force Majeure Event;
(iii) any Change in Law;
(iv) any Owner-Caused Delay;
(v) any Wayleave or Permit Failure;
(vi) the Program Manager's implementation of Owner-requested
measures in respect of Supplier Contracts in accordance with Sections
4.3 and 4.4 hereof;
17
(vii) to the extent specified in Section 14.2 hereof, delays
sustained by the Program Manager in connection with the Owner's
exercise of inspection rights hereunder;
(viii) the Program Manager's exercise of suspension rights in
accordance with Section 15.2 hereof;
(ix) the discharge or presence at any Site of any hazardous
materials (except to the extent caused by the negligent act or omission
of any of Program Manager's employees, agents or other personnel) or
the existence of unforeseen subsurface conditions at any Site (except
to the extent that such conditions should have been anticipated as of
the date of this Contract by the Program Manager in the exercise of
Prudent Practices); or
(x) any other grounds specifically referred to in the other
provisions of this Contract that expressly entitle the Program Manager
to equitable relief hereunder.
(b) [REDACTED]
(c) [REDACTED]
(i) INCREASE IN SERVICE FEES. Upon any increase in the Target Cost
implemented pursuant to this Section 10.1(c), the Service Fees shall be
increased by a percentage equal to the percentage increase in the
Target Cost effected by the relevant Change Order. Each such Change
Order shall set forth expressly the adjusted amount of the Service Fees
payable hereunder.
(ii) LIMITATION. Notwithstanding anything to the contrary set
forth herein, the Program Manager shall not be entitled to Target Cost
or Service Fee relief solely on account of delays:
(A) resulting solely from a Change Event of the type
described in subsection (vii) of such Section 10.1(a), except to
the extent that Target Cost or Service Fee relief is expressly
authorized in respect of such Change Event pursuant Section
18
14.2(a) on account of the Owner's repeated and unwarranted
interruptions in the Services in its exercise of inspection rights
hereunder; or
(B) otherwise arising in connection with performance of the
Services, except to the extent that the cause of any such delay
would otherwise constitute a Change Event hereunder.
10.2 REDUCTION IN SCOPE OF SERVICES. The Owner may from time to time issue
written notices to the Program Manager directing revisions to or deletions from
the scope of Services (as reflected in the Target Cost Assumptions) under this
Contract. The Program Manager shall give immediate effect to each such notice
and shall execute a Change Order in respect thereof; PROVIDED, that such notice
shall in no way limit the Program Manager's entitlement to Reimbursable Costs in
respect of Services performed, or Procured Services or Supplies procured or
committed to, by the Program Manager in its due prosecution of the Services
prior to the Owner's notice of deletion or reduction of the relevant item(s) of
Services.
(i) REDUCTION TO TARGET COST AND SERVICE FEES. In the case of any
limitations in the Services imposed by the Owner pursuant to this
Section 10.2 that have caused, or are likely to cause, a reduction in
the Total Completion Cost by an amount equal to or greater than
[REDACTED], the relevant Change Order entered into by the Parties shall
set forth the reduced amount, to be computed by reference to the Target
Cost Assumptions, of the Target Cost reflecting the deletion or
reduction of the Services hereunder. The aggregate Service Fees payable
shall be reduced by a percentage equal to the percentage reduction in
the Target Cost effected by the relevant Change Order. Each such Change
Order shall set forth expressly the adjusted amount of the Service Fees
payable hereunder.
10.3 EFFECT OF CHANGES. Any adjustment to the Contract necessitated by any
Change Event shall be recorded by means of a formal written amendment (a "Change
Order") agreed and executed by the Parties in accordance with the procedure set
forth in Section 10.4. No claim for adjustment to the Target Cost, the Service
Fees and/or the Guaranteed RFS Date shall be made, recognised or acceded to
unless such claim has been adopted and implemented in accordance with the
procedure set forth in Section 10.4 and recorded by means of a formal written
Change Order amendment as provided in this Section 10.3.
10.4 PROCEDURE FOR IMPLEMENTING CHANGE ORDER AMENDMENTS. In the event that the
Program Manager may be entitled to claim any equitable relief hereunder on
account of any Change Event, the Program Manager shall give Owner written notice
of its intent to submit a claim for a Change Order (which notice shall state the
basis of such claim and the general nature of the relief requested) within
[REDACTED] after it becomes aware of such Change Event. The Program Manager
shall submit to Owner its documented and substantiated claim for such
adjustment(s) as soon as practicable after giving such notice, but not later
than [REDACTED] after giving such notice, unless extended in writing by the
Owner. Such claim shall include an estimate of the impact of such proposed
relief on the Target Cost or the Guaranteed RFS Date, as applicable, as
supported by sufficient costing and description detail to allow the Owner to
19
make a reasonable determination as to such impact and the desirability of such
relief in light of available alternatives.
The Owner shall respond to the Program Manager's claim for a Change
Order amendment within [REDACTED] after receipt. If Owner agrees that the
Program Manager's claim should be implemented, Owner shall issue the formal
written Change Order amendment provided for in Section 10.3 incorporating such
claim.
If the Owner disagrees in any way with the Program Manager's claim for
the Change Order amendment, the Owner shall return the Program Manager's claim
marked-up to show Owner's modifications thereto. The Program Manager shall
within [REDACTED] of receipt of Owner's ▇▇▇▇-up, either advise Owner of its
agreement to Owner's modifications or request a meeting with the Owner to
resolve any and all disagreements with the modifications made by Owner. If the
latter option is taken, the Parties shall meet as soon as practicable to resolve
in good faith discussions any disagreements. In the event that the Parties are
unable to resolve any such dispute within [REDACTED] after commencement of
mutual discussions in respect thereof, either Party may, by written notice to
the other Party, require that the matter be referred immediately to an
independent expert appointed by the Parties' respective senior management for
resolution within [REDACTED] after such referral. The resolutions of all
disagreements shall be reflected in the formal written Change Order amendment to
be developed pursuant to Section 10.3.
SECTION 11. GUARANTEED RFS DATE, DELAY DAMAGES, PERFORMANCE BONUS
-----------------------------------------------------
11.1 [REDACTED]
11.2 [REDACTED]
20
11.3 MINIMISING DELAY. Because the Owner wishes the System to be available for
use as soon as possible, if the Program Manager becomes aware of circumstances
that will cause the System RFS Date to be delayed (if alternative strategies are
not adopted) the following provisions shall apply:
(a) the Program Manager shall inform the Owner of such circumstances;
(b) the Program Manager shall (unless otherwise agreed by the Owner)
develop all reasonable work-around plans, alternate sources or any other means
available with a view to avoiding or minimising the anticipated delay, and shall
present the same to the Owner for approval;
(c) the Program Manager's proposals presented to the Owner pursuant to
paragraph (b) above shall specify:
(i) any increase in the Full-Time Equivalent Personnel (in excess
of the limitation thereon set forth in Section 2.1 hereof) that would be
required to implement such proposals;
(ii) the Program Manager's estimate of the additional Reimbursable
Costs that would likely be incurred as a result of implementing the proposals;
and
(iii) the Program Manager's estimate of the impact on the
Guaranteed RFS Date:
(A) if its proposals are implemented; and
(B) if its proposals are not implemented.
(c) the Program Manager shall not implement the proposals without prior
written approval from the Owner.
SECTION 12. FORCE MAJEURE
-------------
12.1 DEFINITION.
(a) INCLUDED EVENTS. An event shall be a "Force Majeure Event" if such
event:
(i) is beyond the Program Manager's reasonable control despite the
exercise of Prudent Practices;
(ii) is not the result of any breach by the Program Manager of any
provision of this Contract;
(iii) was not caused by the negligent or careless act or omission
of the Program Manager, the Program Manager Personnel or any other
Person engaged by the Program Manager in connection with the
performance of any Services hereunder; and
21
(iv) is likely to result, despite the exercise of Prudent
Practices and commercially reasonable efforts in mitigation thereof, in
a failure by the Program Manager to comply with any of its obligations
under this Contract.
(b) EXCLUDED EVENTS
The following events are explicitly excluded from the term Force
Majeure Event and are solely the responsibility of the Program Manager:
(i) strikes, labour disputes and lockouts of any kind solely
involving employees of the Program Manager, any Supplier or any other Person
engaged by the Program Manager in connection with the performance of any
Services hereunder;
(ii) [REDACTED] ;
(iii) Defects or Deficiencies in, or the late delivery or late
performance of, Supplies or Procured Services by any Supplier (except to the
extent caused by a Force Majeure Event); and
(iv) [REDACTED] (except to the extent caused
by a Force Majeure Event).
12.2 NOTICE. The Program Manager shall advise the Owner's Project Representative
in reasonable detail of any Force Majeure Event within [REDACTED] after the
date on which the Program Manager first became aware (or, in the exercise of
Prudent Practices, should have been aware) of such Force Majeure Event.
12.3 EFFECT OF FORCE MAJEURE. The Program Manager shall not be considered in
default in the performance of its obligations under this Contract, except
obligations to make payment, to the extent that the performance of any such
obligation is prevented or delayed by a Force Majeure Event.
SECTION 13. REPRESENTATIVES OF THE PARTIES
------------------------------
Each Party shall designate in writing a project manager (a "Project
Representative") to be responsible for co-ordination and monitoring of the
Services on such Party's behalf. Each Party's Project Representative shall
provide the interface with the other Party on all technical and contractual
matters pertaining hereto, and shall have authority to act and make decisions on
behalf of, and be authorised to bind by contract or otherwise, the Party by
which it has been appointed. Either Project Representative may from time to time
authorise Persons to carry out specific tasks on the relevant Party's behalf,
and shall confirm any such authority by written notice to the other Party.
SECTION 14. INSPECTION RIGHTS
-----------------
14.1 GENERALLY. Each of the Owner Persons shall, upon reasonable prior notice to
the Program Manager, have access, within normal business hours, to the Sites,
22
the Services and all Procured Services and Supplies. The Program Manager shall
provide such facilities as the Project Representatives of the Parties shall
agree are appropriate for such access and for the purpose of inspection and
testing in accordance with the provisions of the Technical Requirements. Each
Owner Person shall upon reasonable prior notice to the Program Manager be
allowed full access, within normal business hours and in accordance with such
other rules and procedures as the Project Representatives may develop by mutual
agreement, to all project offices and Sites of the Program Manager and the
Suppliers to enable it to inspect the Services, Procured Services and Supplies
and to monitor progress. The Owner or Owner's Inspector shall have the right to
establish resident representative(s) at all Sites, and the Program Manager and
the Suppliers shall, at the request of the Owner's Project Representative, make
suitable office space and facilities available for such representative(s) and
any costs incurred in so doing shall constitute Reimbursable Costs. The Program
Manager shall endeavour to include in all of the Supplier Contracts such
provisions as may be necessary to secure such rights on behalf of the Owner
Persons and if any Supplier shall refuse to agree to their inclusion the Program
Manager shall consult with the Owner to agree on an appropriate course of
action. The Owner Persons' inspection activities may include:
(a) an audit of the Program Manager's and the Suppliers' quality
control system and practices and their application to the Services, the Procured
Services and the Supplies, including to the design, manufacture, transportation,
installation and testing thereof; and
(b) inspection of all parts of the Procured Services, Supplies and the
Services to ensure compliance with the Technical Requirements.
14.2 NO RELIEF. Except as provided by subsection (a) of this Section 14.2, no
inspection, audit or approval by or on behalf of the Owner or any other Owner
Person in respect of any aspect of the Services, Procured Services or Supplies
shall relieve the Program Manager of any of its responsibilities under this
Contract.
(a) EXCEPTION - LIMITED RELIEF. To the extent that the Program Manager
is required to interrupt performance of any portion of the Services on account
of the Owner's inspection of any Services, Procured Services or Supplies found
in such inspection to be in compliance with all requirements of this Contract,
the Program Manager shall be entitled to:
(i) in the first such instance, an extension of time equal to the
duration of such interruption to the extent specified in Section
10.1(b) hereof; and
(ii) upon each such unwarranted Owner inspection thereafter,
Target Cost and Service Fee relief to the extent specified in Section
10.1(c) hereof, which relief shall be in addition to any extension of
time to which the Program Manager may be entitled under the preceding
clause (i) of this Section 14.2(a).
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SECTION 15. SUSPENSION BY OWNER OR PROGRAM MANAGER
--------------------------------------
15.1 SUSPENSION BY THE OWNER. Should the Owner desire, in its sole discretion,
to suspend the whole or any part of the Services or suspend for a further period
Services already suspended pursuant to this Section 15, the Owner shall notify
the Program Manager, indicating the period of the proposed suspension or further
suspension. The Program Manager shall, within 10 Business Days after such
notice, furnish an itemised statement to the Owner's Project Representative
setting out:
(a) the extension of time to which the Program Manager believes it
would be entitled if the suspension were implemented; and
(b) the Program Manager's estimate of the additional Reimbursable Costs
which would result from the proposed suspension.
Upon receipt of such itemised statement (or if no such statement is received
within the stipulated 10-working-day period), the Owner's Project Representative
shall either confirm or cancel the proposal to suspend or further suspend the
Services or further question the Program Manager on the basis of such itemized
statement. Promptly after the Parties agree on any extension of time, they shall
execute a Change Order in respect thereof in accordance with Section 10 hereof.
15.2 SUSPENSION BY PROGRAM MANAGER. Notwithstanding any provision to the
contrary, if the Owner fails to make any undisputed payment within 7 Business
Days after the due date therefor (an "Owner Default"), the Program Manager shall
have the right, upon notice to the Owner, to suspend its performance of the
Services. In the event that any Owner Default continues for 20 consecutive Days
after the Program Manager's notice thereof, the Program Manager shall have the
right to terminate its Services hereunder and such termination shall be treated
as an Optional Termination for purposes of the Owner's obligation to make
payment to the Program Manager in the manner set forth in Section 16.3 hereof.
15.3 EXTENSION OF TIME AND STAND-BY COSTS. In the event of any suspension of the
Services in whole or in part pursuant to either Section 15.1 or 15.2 hereof:
(a) the Program Manager shall be entitled to Reimbursable Costs for
each of the Program Manager Personnel who would, but for such suspension, be
performing Services during the pendency thereof, together with any other costs
incurred by the Program Manager as a direct and necessary result of such
suspension (including, but not limited to, any payments that it is required to
make to any of the Suppliers); PROVIDED, that the Program Manager shall
endeavour to minimise such Reimbursable Costs to the extent that this is
reasonably practicable in the context of the period of suspension, and for this
purpose shall consult with the Owner;
(b) the Program Manager shall be entitled to an extension of the
Guaranteed RFS Date by means of a Change Order to the extent specified in
Section 10.1(b) hereof, and
(i) in the case of suspension of the Services in their entirety,
such extension shall equal the actual period of suspension, PLUS any period
actually required for remobilisation and resumption of performance following the
suspension;
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(ii) in the case of a partial suspension, such extension shall be
of a duration equal to the period by which the Program Manager can demonstrate
that the System RFS Date will be delayed by reason of the suspension; and
(c) in the case of a Program Manager suspension pursuant to Section
15.2, the Program Manager shall be entitled to Target Cost or Schedule Fee
relief to the extent specified in Section 10.1(c) hereof.
15.4 THE PROGRAM MANAGER'S DUTIES UPON SUSPENSION. During any such suspension,
the Program Manager shall:
(a) cease performance of the Services and place no further orders or
Supplier Contracts relating to the suspended Services;
(b) protect and care for all Services, Procured Services and Supplies
and materials, in transit to or from the Site or at storage areas for which it
is responsible; and
(c) give the Owner copies of all outstanding orders and Supplier
Contracts and take any action with respect to such orders and contracts as the
Owner may direct.
15.5 THE PROGRAM MANAGER'S DUTIES AFTER SUSPENSION. Upon the cessation of such
suspension, the Program Manager shall immediately take steps to resume
performance of the Services upon being directed to do so by the Owner.
SECTION 16. OPTIONAL TERMINATION
--------------------
16.1 TERMINATION. The Owner may at any time, upon [REDACTED] (a "Notice of
Optional Termination") to the Program Manager, terminate the Program Manager's
employment hereunder (an "Optional Termination"). An Optional Termination shall
not nullify this Contract but shall operate to terminate the Program Manager's
right to proceed with the Services. An Optional Termination shall not relieve
the Program Manager or the Owner from liability under applicable Law for damages
for any failure or omission to perform any portion of this Contract prior to
such termination or prejudice any legal rights of the Owner or the Program
Manager, whether those rights arise under this Contract or otherwise.
16.2 TERMINATION DATE. An Optional Termination shall be effective, and the
Program Manager's employment under this Contract shall be terminated [REDACTED]
after the Notice of Optional Termination is delivered to the Program Manager.
16.3 PAYMENT. Upon any Optional Termination, the Owner shall pay to the Program
Manager an amount equal to the sum of (i) all Reimbursable Costs incurred by the
Program Manager as of the effective date of the Optional Termination, (ii) those
Fixed Fees which have accrued as of the effective date of the Optional
Termination, [REDACTED] and Fixed Fees payable as of such termination,
(representing a liquidated and pro-rated payment in lieu of the Incentive Fee to
which the Program Manager would otherwise have been entitled but for such
termination); and (iii) the Program Manager's
25
reasonable and necessary costs incurred in connection with the termination of
the Supplier Contracts (and, to the extent that the Program Manager's
performance thereunder would otherwise have entitled it to the payment of
Reimbursable Costs, any other contracts entered into by the Program Manager in
connection with the Services), demobilisation from the Sites and the performance
of its duties upon termination as specified hereunder.
SECTION 17. EVENTS OF DEFAULT AND REMEDIES
------------------------------
17.1 EVENTS OF DEFAULT BY PROGRAM MANAGER. If at any time (any of the following,
an "Event of Default"):
(a) the Program Manager fails to carry out the Services at the rate of
progress required by and in accordance with this Contract that is likely to
result in a material breach of this Contract; or
(b) the Program Manager fails to make any undisputed payment hereunder
when due; or
(c) the Program Manager commits any material breach of, or fails in any
material respect to comply with and observe, any provision of this Contract; or
(d) the Program Manager abandons the Services for a period in excess of
10 Days, or intimates without lawful cause or justification that the Services
will not or cannot be completed; or
(e) the Program Manager shall make a general assignment for the benefit
of creditors, or any proceeding shall be instituted by the Program Manager
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganisation, arrangement, adjustment, protection, relief or
composition of the Program Manager or its debts under Law relating to
bankruptcy, insolvency or reorganisation or relief or the appointment of a
receiver, trustee or other similar official for the Program Manager or for any
substantial part of its property or the Program Manager shall take any corporate
action to authorise any of the actions set forth above in this Section 17.1(e);
or
(f) an involuntary petition shall be filed or an action or proceeding
otherwise commenced against the Program Manager seeking reorganisation,
arrangement or readjustment of the Program Manager's debts or for any other
relief under any bankruptcy or insolvency act or Law, now or hereafter existing
and remain undismissed or unvacated for a period of 30 Days; or
(g) a receiver, assignee, liquidator, trustee or similar officer for
the Program Manager or for all or any part of its property shall be appointed
involuntarily; or
(h) the Program Manager shall file a certificate of dissolution under
applicable Law or shall be liquidated, dissolved or wound up or shall commence
or have commenced against it any action or proceeding for dissolution, winding
up or liquidation, or shall take any corporate action in furtherance thereof; or
26
(i) the Program Manager either:
(A) intentionally fails to make prompt payment of an undisputed
invoice due to any Supplier for materials or labour; or
(B) repudiates or is in material default with respect to any of
its obligations to any Supplier; or
(j) any representation or warranty made by the Program Manager herein
or in any certificate, financial statement or other document furnished to the
Owner by or on behalf of the Program Manager shall prove to be false or
misleading in any material respect to the knowledge of the Program Manager as of
the time made, confirmed or furnished;
then, upon the occurrence of any Event of Default referred to in this Section
17.1, the Owner may, by notice in writing, advise the Program Manager of such
Event of Default and the Program Manager shall have [REDACTED] to correct such
Event of Default to the reasonable satisfaction of the Owner or, if it cannot
reasonably be corrected in such period, to demonstrate to the reasonable
satisfaction of the Owner that it has taken and has diligently pursued all
appropriate steps to correct the relevant Event of Default and to procure that
it will not be repeated. If the Program Manager fails to correct any such Event
of Default or to take such action to the reasonable satisfaction of the Owner
within such [REDACTED] period, or, fails to complete in any event the cure or
correction of any Event of Default within [REDACTED] after the occurrence
thereof, or, upon the occurrence of any other Event of Default, then the Owner
may, upon written notice (a "Notice of Exercise of Remedies") to the Program
Manager, exercise any or all of the following rights and remedies:
(a) suspend payment under this Contract in whole or in part;
(b) terminate the Program Manager's employment under this
Contract upon written notice to the Program Manager (such event,
a "Termination for Default"; such Notice of Exercise of Remedies,
a "Notice of Termination for Default"), which Termination for
Default shall be effective immediately upon the Program Manager's
receipt of the Notice of Termination for Default;
(c) apply any amount owing to the Program Manager hereunder
to the payment and performance of the obligations of the Program
Manager hereunder; or
(d) exercise any and all rights and remedies it may have
under law or equity, including seeking specific performance and
the recovery of damages, subject, in any event, to the provisions
of Section 19.
The foregoing remedies are cumulative, and the Owner may elect
one or more thereof without prejudice to any other right or
remedy the Owner may have.
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17.2 NO PREJUDICE. No action taken by the Owner under this Section 17 shall
prejudice any right of the Owner hereunder, and all sums of money that may
remain in the hands of the Owner with respect to this Contract may, at the
election of the Owner, may be withheld pending the final determination of the
rights and obligations of the Parties under this Contract.
SECTION 18. DUTIES UPON TERMINATION BY OWNER
--------------------------------
18.1 GENERALLY. Upon receipt of a Notice of Optional Termination or a Notice of
Termination for Default (each, a "Notice of Termination"), unless otherwise
directed by the Owner in such notice, the Program Manager shall:
(a) stop work under this Contract on the effective date of the Optional
Termination or, as the case may be, Termination for Default;
(b) place no further orders or contracts for materials, services or
facilities;
(c) unless otherwise directed by the Owner, use reasonable efforts to
terminate all orders and contracts and Supplier Contracts;
(d) assign to the Owner in the manner, at the time and to the extent
directed by the Owner, all of the Program Manager's right, title and interest,
if any, under all Permits and Wayleaves and under such orders, contracts and
Supplier Contracts, whether or not terminated;
(e) use reasonable efforts to settle all outstanding liabilities and
all claims arising out of such termination of orders and Supplier Contracts,
with the Owner's approval or ratification to the extent the Owner so requires;
(f) relinquish title, to the extent vested in the Program Manager, and
deliver, to the extent that the Program Manager has possession thereof, the
following to the Owner in the manner, at the time, at the place and to the
extent (if any) directed by the Owner:
(i) the fabricated or unfabricated parts, Services in process,
completed Services, Procured Services and Supplies and all other items
commenced, partly executed, produced or completed as part of, or acquired in
connection with, the performance of the Services terminated by the Notice of
Termination;
(ii) all materials, plant, tools, dies, jigs, fixtures and
implements purchased, used or to be used exclusively in connection with the
performance of the Services terminated by the Notice of Termination: and
(iii) to the extent that title is not already vested in the Owner,
the completed or partially completed plans, drawings, information, Permits,
Wayleaves and other property that, if this Contract had not been terminated,
would have been required to be furnished to the Owner;
28
(g) take such action as may be necessary, or which the Owner may
direct, for the protection and preservation of the property related to this
Contract that is under the Program Manager's control and in which the Owner has
or may acquire an interest;
(h) at the Owner's request, assist the Owner in preparing an inventory
of all equipment in use or in storage; and
(i) take such other actions in relation to termination of this Contract
that the Owner may reasonably request.
All costs associated with such actions shall constitute Reimbursable
Costs unless the termination is consequent upon an Event of Default as to which
the Program Manager has failed to timely effect and diligently pursue a cure.
SECTION 19. LIMITATION OF LIABILITY
-----------------------
19.1 SUPPLIES, SERVICES, WORK, ETC. PROVIDED BY OTHERS. Except to the extent of
any liability arising out of any breach by the Program Manager of the General
Warranty in its selection of Suppliers or the procurement, testing and
supervision of the Procured Services and Supplies, the Program Manager shall
have no liability for Defects and Deficiencies in the services, materials or
equipment furnished by others (including, but not limited to, Suppliers and
Owner Contractors). To the extent practicable, the Owner shall procure that all
indemnity, all release and all hold-harmless agreements contained in Owner
Contracts, whereby Owner Contractors agree to indemnify, release or hold the
Owner harmless shall extend like protection to the Program Manager.
19.2 AGGREGATE CAP ON LIABILITY. The total aggregate liability of the Program
Manager to all Owner Persons under or arising out of or in connection with this
Contract or otherwise with respect to the Services shall not in any
circumstances exceed [REDACTED], and for this purpose:
(a) the following shall be subject to (and shall accordingly be taken
into account in establishing the Program Manager's aggregate liability that is
subject to) the Aggregate Liability Cap:
(i) the cost of re-performing Services pursuant to Section 20.2
(or, as the case may be, the Program Manager's liability to make
reimbursement to the Owner pursuant to Section 20.3), and, for this
purpose, the cost of re-performing Services pursuant to Section 20.2
shall be calculated as the Recoverable Costs attributable thereto; and
(ii) any liability which the Program Manager may have to any Owner
Person arising out of or in connection with this Contract or the
Services, and, in such connection (because the Program Manager does not
have a contractual relationship with Owner Persons other than the
Owner), the Owner shall indemnify the Program Manager against any
Losses that the Program Manager may thereby suffer or incur in excess
of the Aggregate Liability Cap; and
29
(b) any proceeds of insurance (and, accordingly, any liability of the
Program Manager in respect of risks for which the Program Manager's liability is
limited to payments made by insurers in accordance with Section 19.4) shall not
be subject to, and accordingly shall not be taken into account in establishing
the Program Manager's aggregate liability that is subject to, the Aggregate
Liability Cap.
19.3 LOSS, INJURY OR DAMAGE TO PERSONS OR THE SYSTEM. The Program Manager's
liability for Loss of or damage to any elements of the System, or for any injury
to, or death or disease of, any Person, shall be limited to those payments made
on the Program Manager's behalf by the insurers affording the insurance
described in Section 23, and the Owner shall release the Program Manager from
any Loss, damage or expense in excess of those payments as a result of Loss of
or damage to other property of the Owner or in the custody of the Owner (or as a
result of any injury to, or death or disease of, any Person), except to the
extent that such Loss, injury or damage is not, in whole or in part, insurable
hereunder arising:
(a) on account of any injury to, or death or disease of, any Person, or
any damage to, or loss of use of, any property or asset based upon, arising
under or otherwise related to the willful, wanton or negligent act or omission
of the Program Manager, its employees and agents in connection with the
performance of this Contract; or
(b) in connection with any infringement by Program Manager, its
employees and agents or any claimed infringement by such Persons of Intellectual
Property Rights as described in Section 6 hereof; or
(c) from any act or omission of the Program Manager or its employees
and agents that violates any Law.
19.4 CONSEQUENTIAL LOSS, ETC. Except to the extent resulting from gross
negligence or willful misconduct, under no circumstances shall the Program
Manager be liable to the Owner for, nor shall the Owner make claim for,
consequential, special or indirect Loss or damage, or for any Loss or damage
resulting from loss of use, loss of profits or revenues, costs of capital, loss
of goodwill, claims of the Owner's customers or like items of Loss or damage,
and the Owner shall release the Program Manager therefrom.
19.5 SCOPE OF LIMITATIONS. Except to the extent otherwise specifically provided
herein, the waiver and disclaimers of liability, releases from liability,
limitations and allocations of liability and exclusive remedy provisions
expressed in this Contract shall apply even in the event of the fault,
negligence (in whole or in part), strict liability, breach of contract, or
otherwise of the Party released or whose liability is waived, disclaimed,
limited, apportioned or fixed by such exclusive remedy provision, and shall
extend to such Party's Affiliates and the directors, officers, employees and
agents of such Party or its Affiliates.
19.6 HAZARDOUS WASTE OR MATERIALS.
The Program Manager shall have no liability for or in respect of
hazardous waste or materials that may be encountered in carrying out the
Services, and the Owner shall indemnify the Program Manager against any
additional costs and any liabilities to third parties that the Program Manager
may incur as a consequence of such waste or materials being encountered.
SECTION 20. WARRANTIES
----------
20.1 GENERAL WARRANTY OF SERVICES. The Program Manager hereby warrants (the
"General Warranty") to the Owner that the Services will in all respects be
performed in accordance with Prudent Practices upon diligent examination of, and
in compliance with, all requirements of this Contract applicable to such
Services.
20.2 LIABILITY IN RESPECT OF THE SERVICES. If any aspect of the Services is not
performed in accordance with the General Warranty, the Program Manager shall,
subject to Section 20.3, re-perform, at its expense, that aspect of the
Services, provided that:
30
(a) the Owner has notified the Program Manager in writing, stating with
reasonable specificity the reasons why the Owner believes that the Services were
not performed in accordance with the General Warranty; and
(b) such notification is given within a reasonable time after the
discovery of the facts or circumstances giving rise to the Owner's belief and
within the General Warranty Period.
20.3 ALTERNATIVE REMEDY. If for any reason the Program Manager does not, within
a reasonable time after the Owner's notice given in accordance with Section 20.2
above, re-perform the relevant Services in accordance with Section 20.2 to the
reasonable satisfaction of the Owner, the Owner may, at its election within 4
Business Days after notice to the Program Manager of such failure, assess,
demand or withhold the amount of Reimbursable Costs that the Owner has
calculated as attributable to the aspect of the Services which has not been
performed in accordance with the General Warranty.
20.4 DEFECTS AND DEFICIENCIES. Prior to the System RFS Date, the Program Manager
shall as part of the Services administer and enforce against the Suppliers, as
agent for the Owner, the Supplier Contracts (including the Supplier Warranty
provisions thereof). If, on or after the System RFS Date, any Defects and
Deficiencies shall be identified in any of the Procured Services or the
Supplies:
(a) the Owner shall pursue its rights against the relevant Supplier
(pursuant to the warranties in favour of the Owner under the relevant Supplier
Contract) and the Program Manager shall, accordingly, not have any liability in
respect of any such Defects or Deficiencies;
(b) if the Owner shall so request, the Program Manager shall assist the
Owner in pursuing its rights against any of the Suppliers under the applicable
Supplier Warranties; PROVIDED that:
(i) any costs incurred by the Program Manager in so doing shall be
Reimbursable Costs;
(ii) the Program Manager's obligations under this Section 20.4
shall cease at the expiry of the General Warranty Period.
20.5 SCOPE OF LIABILITY FOR DEFECTS AND DEFICIENCIES. Except to the extent that
the Owner may have a remedy pursuant to Section 19.3 hereof, the remedies
specified in this Section 20 are the Owner's sole and exclusive remedies for
Defects and Deficiencies arising out of or in connection with the Program
Manager's performance under this Contract. There are no standards of
performance, guarantees or warranties with respect to Defects and Deficiencies
other than those expressed in this Section 20.
SECTION 21. PERFORMANCE TESTS AND RFS CERTIFICATES
--------------------------------------
21.1 PERFORMANCE TESTING GENERALLY. The Program Manager shall administer and
coordinate the required Performance Tests in connection with the achievement of
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the System RFS Date, in accordance with the Technical Specification and such
performance testing standards that the Program Manager shall develop and the
Owner shall approve.
21.2 ISSUANCE OF RFS CERTIFICATES. Within 10 Days of the Program Manager's
notice to the Owner that the System has been completed and tested in accordance
with the Technical Requirements, the Owner shall issue an RFS Certificate to the
Program Manager in respect of the System, provided that the Owner is reasonably
satisfied that:
(a) all Performance Test results furnished by the Program Manager in
connection with its application for the RFS Certificate indicate that each
Performance Guarantee set forth the Technical Requirements has been met or
exceeded;
(b) the System has been tested on an integrated basis throughout the
entire route thereof and has, on the basis of the Performance Test results
delivered to the Owner, met or exceeded the Performance Guarantees; and
(c) all Permits, Wayleaves and other items required to be delivered to
the Owner hereunder have so been delivered.
21.3 PUNCH LIST. The existence of minor Defects and Deficiencies that do not
materially affect the use of the System shall not delay the issuance of the
System RFS Certificate; PROVIDED that such minor Defects and Deficiencies are
specified in a Punch List prepared by the Program Manager and agreed to in
writing by the Owner. The Program Manager shall administer the remedying of any
such Defects and Deficiencies by the relevant Suppliers or, as the case may be,
Owner Contractors as soon as reasonably practicable after the System RFS Date.
21.4 EFFECT OF SYSTEM RFS CERTIFICATE. Upon the issue of the System RFS
Certificate all of the Program Manager's obligations in relation to the
performance of the Services shall cease save for those under Sections 6, 8, 19,
20, 21.3 and 24 hereof.
21.5 FINAL ACCEPTANCE. Final Acceptance shall occur as soon as the General
Warranty Period shall have expired and there are no outstanding claims by the
Owner in respect of the Services. The Owner shall issue a Certificate of Final
Acceptance confirming that, and as soon as practicable after, Final Acceptance
has occurred. The Program Manager's liability for all purposes under this
Contract shall end at Final Acceptance.
SECTION 22. REPRESENTATIONS AND WARRANTIES
------------------------------
22.1 THE PROGRAM MANAGER'S REPRESENTATIONS AND WARRANTIES. The Program Manager
hereby represents and warrants that:
(a) ORGANISATION, POWER AND AUTHORITY. It is a limited liability
company duly organised, validly existing and in good standing under the Laws of
the United Kingdom and is qualified (whether directly or by acting through
Affiliate(s) in any relevant jurisdiction) to do business in each applicable
32
jurisdiction, including the Netherlands, Germany and France, in which the nature
of the business conducted by it makes such qualification necessary, and has all
requisite legal power and authority to execute this Contract and to perform the
terms, conditions and provisions thereof.
(b) AUTHORISATION. The execution and delivery by the Program Manager of
this Contract has been duly authorised by all requisite corporate action.
(c) ENFORCEABILITY. This Contract constitutes the legal, valid and
binding obligation of the Program Manager, enforceable in accordance with the
terms thereof except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganisation, moratorium or other similar Laws affecting
creditors' rights generally and to the extent that the remedies of specific
performance, injunctive relief and other forms of equitable relief are subject
to equitable defences, the discretion of the court before which any proceeding
therefor may be brought, and the principles of equity in general.
(d) NO CONFLICT. Neither the execution, delivery or performance by the
Program Manager of this Contract, nor the consummation of the transactions
contemplated thereby, will result in:
(i) a violation of, or a conflict with, any provision of the
organisational documents of the Program Manager;
(ii) a contravention or breach of, or a default under, any term or
provision of any material contract, agreement or instrument to which the Program
Manager is a party or by which it or its property may be bound, which
contravention, breach or default could be reasonably expected to have a material
adverse effect on the ability of the Program Manager to perform its obligations
under this Contract to consummate the transactions contemplated by this
Contract; or
(iii) a violation by the Program Manager of any Law.
(e) NO VIOLATION OF LAW. It is not in violation of any Law promulgated,
or judgment entered, by any Governmental Authority, which violations,
individually or in the aggregate, would adversely affect it or its performance
of any obligations hereunder.
(f) LITIGATION. There are no actions, suits or proceedings, now pending
or (to its best knowledge) threatened against it before any court or
administrative body or arbitral tribunal that might materially adversely affect
the ability of the Program Manager or any Supplier to perform its obligations
hereunder.
(g) LICENCES. It will hold (whether directly or through Affiliate(s) in
any relevant jurisdiction) all national, provincial, local and other Permits
required to allow it to operate or conduct its business now and as contemplated
by this Contract.
(h) QUALIFICATIONS. It has:
33
(i) examined this Contract thoroughly and has become familiar with
its terms;
(ii) full experience and proper qualifications to perform the
Services and to administer construction of the System; and
(iii) taken reasonable steps to ascertain the nature and location
of the Services, the general character and accessibility of the System
build-out, the existence of above-ground major obstacles to construction and
other general and local conditions (including labour, safety and environmental)
that might affect its performance of the Services or the Service Fees but, for
the avoidance of doubt, the Program Manager has not carried out a detailed
survey of the proposed route and has not established whether unconditional
Wayleaves will be available for the whole of the proposed route; accordingly,
the Program Manager does not warrant that the whole of the proposed route will
be suitable or feasible and does not warrant the precise nature or scope of the
work which will be required.
22.2 THE OWNER'S REPRESENTATIONS AND WARRANTIES. The Owner hereby represents and
warrants that:
(a) ORGANISATION, POWER AND AUTHORITY. It is a corporation duly
organised, validly existing and in good standing under the Laws of Delaware and
is qualified (whether directly or by acting through Affiliate(s) in any relevant
jurisdiction) to do business in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary, and has all
requisite legal power and authority to execute this Contract and to perform the
terms, conditions and provisions thereof.
(b) AUTHORISATION. The execution and delivery by the Owner of this
Contract has been duly authorised by all requisite corporate action.
(c) ENFORCEABILITY. This Contract constitutes the legal, valid and
binding obligation of the Owner, enforceable in accordance with the terms
thereof except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganisation, moratorium or other similar Laws affecting
creditors' rights generally and to the extent that the remedies of specific
performance, injunctive relief and other forms of equitable relief are subject
to equitable defences, the discretion of the court before which any proceeding
therefor may be brought, and the principles of equity in general.
(d) OWNERSHIP OF SYSTEM. It is the sole and exclusive owner (whether
directly or through its Affiliates) of (i) the physical assets and properties
constituting (or, upon System completion, to constitute) the System, and (ii)
all of the Owner's rights pursuant to or accruing under this Contract.
SECTION 23. INSURANCE
---------
23.1 INSURANCE GENERALLY. The Program Manager shall procure and maintain in
effect insurance coverage with respect to its performance of the Services in the
amounts and coverage types identified in the Insurance Schedule annexed as
Exhibit F hereto and the costs of doing so shall be Reimbursable Costs.
34
(a) GENERALLY. Unless otherwise stipulated in writing between the
Parties, the Program Manager shall in respect of the System maintain all
insurance in full force and effect until the System RFS Date. The Program
Manager shall, immediately upon the Owner's request, name the Owner as an
additional insured under any policy required to be maintained hereunder.
(b) CANCELLATION, NON-RENEWAL OR REDUCTION IN COVERAGE. Each insurance
policy shall provide that no cancellation, non-renewal, reduction in coverage or
other material change shall be effective in the absence of [REDACTED] written
notice to the Owner.
(c) COPIES. At the Owner's request, the Program Manager shall furnish
the Owner with certified copies of insurance policies or certificates of
insurance that provide sufficient information to verify that the Program Manager
has complied with its insurance obligations hereunder.
(d) FAILURE TO MAINTAIN INSURANCE. If the Program Manager fails to
effect or keep in force any of the insurance required under this Contract, the
Owner may, without prejudice to any other rights it may have hereunder, effect
and keep in force any such insurance or take out new insurance satisfactory to
the Owner.
23.2 OWNER'S ELECTION. The Owner may by notice in writing to the Program Manager
given [REDACTED] in advance of insurance placement by the Program Manager
elect to procure and maintain any of the insurance coverage referred to Exhibit
F hereto, in which case, the Owner shall, immediately upon the Program Manager's
request, name the Program Manager as an additional insured (and shall provide
the Program Manager with the documentation and non-cancellation rights otherwise
available to the Owner hereunder in the case of Program Manager-procured
insurance) under any policy and the Program Manager shall not be entitled to
payment of Reimbursable Costs or Service Fees in respect of any insurance so
procured directly by the Owner.
SECTION 24. CONFIDENTIALITY AND PROPRIETARY INFORMATION
-------------------------------------------
24.1 CONFIDENTIALITY.
(a) GENERALLY. All drawings, diagrams, specifications or other
information supplied in connection with this Contract by or on behalf of either
Party (such disclosing Party or person acting or its behalf, the "Disclosing
Party") to the other Party (such recipient Party, together with its directors,
officers, employees, agents or subcontractors or any of their respective
directors, officers, employees, agents or subcontractors, the "Recipients")
shall be used solely in assisting the Recipients in performance of this
Contract. Until the expiry of three years after the System RFS Date all
information which has been designated in writing by the Disclosing Party as
being confidential and proprietary shall not be disclosed by the Recipients to
any third party without the prior written consent of the Disclosing Party,
except as expressly permitted under clause (b) of this Section 24.1. Each Party
hereto shall ensure that each potential Recipient under its control or acting on
its behalf in connection with this Contract is subject to appropriate
confidentiality undertakings with respect to all information disclosed
hereunder.
35
(b) LIMITATION. Notwithstanding the absence of the Disclosing Party's
prior written consent, any Recipient may disclose information furnished
hereunder:
(i) as necessary for the performance of this Contract (and then
only under conditions of confidentiality as set forth herein);
(ii) as required by Law or pursuant to court order;
(iii) if it is or becomes generally available to the public by
publication or otherwise, other than by disclosure in violation of this Section
24;
(iv) if it was within any Recipient's possession prior to being
furnished to a Recipient by or on behalf of the Disclosing Party;
(v) if it becomes available to the Recipient on a non-confidential
basis; or
(vi) if it was independently developed by the Recipient without
reference to the information provided by or on behalf of the Disclosing Party.
To the extent practicable, any Recipient shall give reasonable
advance notice to the Disclosing Party prior to any disclosure pursuant to
Section 24.1 (b)(ii) hereof.
24.2 PUBLICITY. No publicity relating to this Contract or the Services shall be
published in any newspaper, magazine, journal or any other written, oral or
visual medium without the prior written approval of the Owner's Project
Representative.
SECTION 25. CORRUPT GIFTS AND THE PAYMENT OF COMMISSIONS
--------------------------------------------
25.1 GIFTS, ETC. The Program Manager:
(a) represents and warrants that none of its employees, agents or
affiliates has undertaken to; and
(b) covenants that none of its employees, agents or affiliates shall,
offer or give or agree to give to any Owner Person any gift,
commission, rebate or consideration of any kind as an inducement or reward for
doing, influencing or carrying out any act in relation to the obtaining or
execution of this Contract or for showing any favour or disfavour to any Person
in relation to this Contract.
25.2 PAYMENTS. The Program Manager covenants that neither it, nor any of its
agents or affiliates, shall, directly or indirectly:
(a) offer, pay, promise to pay or authorise the payment of any money,
or offer, give, promise to give or authorise the giving of anything of value to
36
any foreign (non-US) government official or any foreign political party,
official thereof or candidate for political office for purposes of influencing
any act or decision of such government official or political party, official or
candidate, or inducing such government official or political party, official or
candidate to use its or its intelligence with the government or instrumentality
thereof to influence any act or decision of such government or instrumentality;
(b) offer, pay, promise to pay or authorise the payment of any money, or
offer, give, promise to give or authorise the giving of anything of value to any
Person while knowing or having a reason to know that all or a portion of such
money or thing of value will be offered or given to any such government official
or any such political party, official thereof or candidate for political office
for purpose of influencing any act or decision of such government official or
political party, official or candidate, or inducing such government official or
political party, official or candidate to use its influence with respect to any
act or decision of such government or instrumentality;
(c) use fictitious, inflated, duplicate, anonymous, inadequate,
unrecorded or otherwise false accounts, transfers, records, reports, documents
or bookkeeping entries for the purpose of (i) concealing, mislabelling,
misstating, omitting or otherwise falsifying the existence, source or
application of funds for the uses proscribed by Section 25.2(a) or 25.2(b)
hereof; (ii) excluding them from the Owner's usual system of financial
accountability or (iii) obtaining approval by the Owner of any activities
proscribed by Section 25.2(a) or 25.2(b) hereof.
25.3 FOREIGN CORRUPT PRACTICES ACT. The Program Manager acknowledges that the
prohibitions set forth in Section 25.2 hereof conform to the requirements of the
US Foreign Corrupt Practices Act of 1977, as amended, and shall apply to all
activities of the Program Manager, its agents and affiliates notwithstanding the
fact that such activities may be permitted by the standards or customs of
countries other than the United States.
25.4 PERMITTED ACTIVITIES. Section 25.2 hereof does not prohibit:
(a) the normal extension of those common courtesies and social
amenities (including meals, holiday gifts and tips of nominal amounts)
consistent with ethical business practices that are offered and received on a
basis of friendship or hospitality, and without the expectation of anything in
return, and are of too little value, duration or frequency to give even the
appearance of impropriety; provided that the cost thereof is properly identified
and disclosed on the books of the Owner;
(b) the payment of commissions or fees to responsible and qualified
consultants, agents. marketing representatives, attorneys and others for
necessary and legitimate services actually performed; provided that the amount
paid is reasonably related to the value of such services or the benefits
resulting therefrom;
(c) payments to Persons whose duties are essentially ministerial or
clerical, which are not intended to influence the misuse of official position,
but rather are intended to encourage the lawful use of official position to
expedite a matter or to act with respect to matters not involving any
discretion; or
37
(d) any payment to a government official, employee or agency that is
specifically required by Law, regulation or decree equally applicable to all
similarly situated companies.
25.5 MATERIALITY. Breach of this Section 25 may render the Program Manager, the
Suppliers and agents liable to punishment by Law, and any such breach shall
constitute an Event of Default.
SECTION 26. RELATIONSHIP OF THE PARTIES
---------------------------
26.1 GENERALLY. The relationship between the Parties shall not be that of
partners or joint venturers and nothing herein contained shall be deemed to
constitute a partnership or joint venture among them. Neither Party shall have
authority or power to act unilaterally as agent for the other.
26.2 CAPACITY OF SUPPLIERS. No Supplier or any of its employees, representatives
or agents shall be deemed or construed to be employees, representatives or
agents of the Owner.
SECTION 27. NOTICES
-------
27.1 METHODS AND EFFECTIVENESS. All notices, requests, consents and other
communications hereunder (each, a "Notice") shall be in writing and shall be
delivered by one or more of the following methods:
METHOD DATE OF EFFECTIVENESS
------ ---------------------
Personal delivery Date delivered
Facsimile with return confirmation of Date sent; provided that
transmission original received by mail
or courier service
within 5 days thereafter
Nationally recognised overnight courier service Business Day after the
date sent
First-class certified mail, postage prepaid and Fifth (5th) day after the
return receipt requested date sent
27.2 ADDRESSES. Unless otherwise notified in writing, for the purposes of this
Section 27, the addresses and facsimile numbers of the Parties are:
(a) THE PROGRAM MANAGER. If to the Program Manager, at the following
addresses:
Bechtel Limited
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Facsimile: 44 181 846 4938
Copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ - same details as above.
38
(b) THE OWNER. If to the Owner, at the following address:
Viatel, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Attention: General Counsel
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
or to such other place and with such other copies as either Party may designate
as to itself by written notice to the other Party.
27.3 ENGLISH LANGUAGE. Except where otherwise provided, all documents relating
to this Contract and all communications between the Parties shall be in the
English language.
SECTION 28. DISPUTE RESOLUTION; CONSENT TO JURISDICTION
-------------------------------------------
28.1 MUTUAL DISCUSSIONS. If a dispute or difference of any kind whatsoever shall
arise between the Parties in connection with, relating to or arising out of this
Contract, including the interpretation, performance, non-performance or
termination of this Contract, the Parties shall attempt, for a period of
[REDACTED], to settle such dispute by mutual good-faith discussions between the
Project Representatives of the Parties.
28.2 RESOLUTION BY INDEPENDENT SENIOR MANAGEMENT. If a dispute or difference is
not resolved within a period of [REDACTED] in accordance with Section 28.1, or
such longer time as is mutually agreed, the dispute or difference shall be
submitted for resolution to responsible senior management of each Party who are
not directly involved with this Contract or the System, who shall endeavour to
resolve the same within [REDACTED] of the matter being referred to them.
28.3 MEDIATION. In the event that any dispute or difference is not resolved
pursuant to Section 28.1 or Section 28.2 within the relevant periods specified
in those sections, or such longer periods as the Parties may agree, the Parties
shall endeavour to settle the same by non-binding mediation under the
Construction Industry Mediation Rules of the American Arbitration Association
prior to any litigation in respect thereof. Notwithstanding any other provision
of this Contract to the contrary, the Parties may, but shall not be required to,
agree in writing to any other form of final and binding dispute resolution in
connection with any particular dispute arising hereunder.
28.4 CONSENT TO JURISDICTION. The Parties agree that, without limiting the
ability of either Party to appeal an order of any such court, the United States
District Court for the Southern District of New York and state courts located in
the State of New York shall have exclusive jurisdiction to enforce the terms of
this Contract and to decide any claims or disputes that may arise or result
from, or be connected with, this Contract and any superseding agreement, any
breach or default hereunder or thereunder, or the transactions contemplated
herein or therein. Any and all claims, actions, causes of action, suits or
39
proceedings relating to the foregoing shall be filed and maintained only in such
courts, and the Parties hereto hereby irrevocably consent and submit to the
jurisdiction of such courts. If an action, suit or proceeding is instituted in
the United States District Court for the Southern District of New York or a
state court located in the State of New York, each Party agrees not to assert,
by way of motion, as a defense or otherwise, in any such action, suit or
proceeding, any claim that:
(a) it is not subject personally to the jurisdiction of such court;
(b) such action, suit or proceeding is brought in an inconvenient
forum;
(c) the venue of such action, suit or proceeding is improper; or
(d) this Contract and any superseding agreement or the subject matter
hereof or thereof may not be enforced in or by such court.
Any and all service of process, and any other notice in any such
action, shall be given personally or by registered or certified mail, return
receipt requested, or by any other means of mail that requires a signed receipt,
postage prepaid, mailed to such a Party as herein provided. The Parties agree to
and submit to enforcement of interim judgments issued in any such court.
SECTION 29. MISCELLANEOUS
-------------
29.1 HEADINGS. For the purposes of interpretation, the headings of the Sections
hereof shall not be deemed to form part of this Contract.
29.2 GOVERNING LAW. This Contract shall be construed and governed in accordance
with the Laws in force in the State of New York, United States, applicable to
agreements made and to be performed wholly within such State.
29.3 SEVERABILITY. If any provision of this Contract shall be invalid or
unenforceable, such invalidity or unenforceability shall not invalidate or
render unenforceable the entire Contract, but rather the entire Contract shall
be construed as if not containing the particular invalid or unenforceable
provision or provisions, and rights and obligations of the Owner and the Program
Manager shall be construed and enforced accordingly.
29.4 INTEGRATION. This Contract supersedes all prior oral or written
understandings between the Parties and constitutes the entire agreement with
respect to the subject matter of this Contract.
29.5 AMENDMENTS AND WAIVERS.
(a) AMENDMENTS. This Contract and any of its provisions may be amended,
supplemented or otherwise modified by another agreement in writing signed by a
duly authorised person on behalf of each Party.
40
(b) WAIVERS. Any provision of this Contract may be waived if, and only
if, such waiver is in writing and signed by the Party against whom the waiver is
to be enforced. No failure or delay by any Party in exercising any right, power
or privilege hereunder shall operate as waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any right, power or privilege.
29.6 FURTHER ASSURANCES. The Program Manager shall provide any and all such
co-operation and assistance as the Owner may reasonably request in connection
with the implementation of this Contract and the engineering, procurement and
construction of the System. Specifically, the Program Manager shall promptly
provide any technical, engineering, financial or other information that the
Owner is entitled to under this Contract, whenever requested by the Owner,
including in connection with any requests by, filings to, or regulatory
requirements of Governmental Authorities.
29.7 COUNTERPARTS. This Contract may be executed in one or more counterparts,
each of which when so executed shall be deemed to be an original. Such
counterparts together shall constitute but one Contract.
29.8 SUCCESSORS AND ASSIGNS. This Contract shall be binding upon each Party, its
successors and permitted assignees. Neither Party may assign or transfer any or
all of its rights under this Contract without the prior express written consent
of the other Party; PROVIDED that either Party may effect such assignment or
transfer to an Affiliate of such Party without any such requirement of prior
consent.
IN WITNESS WHEREOF, the Parties have duly executed this Contract as of the date
first set forth above.
BECHTEL LIMITED
---------------
By _______________________
Name:
Title:
VIATEL, INC.
------------
By _______________________
Name:
Title:
EXHIBIT A
DEFINED TERMS
-------------
"Affiliate" of any Person means any other Person that, directly or
indirectly through one or more intermediaries, controls the first Person, or any
other Person that is controlled by or under common control with the first
Person. For the purposes of this definition, the term "CONTROL" shall be defined
as direct or beneficial ownership of greater than fifty percent (50%) of the
equity interests or greater than fifty percent (50%) of the voting control of an
entity.
"Aggregate Liability Cap" has the meaning ascribed thereto in Section
19.2 of the Contract.
"Alternative Wayleave" has the meaning ascribed thereto in Section 5.1
of the Contract.
"Business Day" means any Day, other than a Saturday, Sunday or national
or statutory holiday in any of the United Kingdom, France, Germany, the
Netherlands or the United States.
"Certificate of Payment and Final Release" means the certificate
delivered by the Program Manager or, as applicable, each Supplier to the Owner
in the form of Exhibit H to the Contract.
"Change in Law" means (a) the adoption, enactment or application to
either Party or the System of any Law or any Codes and Standards of the United
Kingdom, the Netherlands, Germany, France or the United States not existing or
applicable to such Party or System as of the date of the Contract; or (b) any
change in any Law or any Codes and Standards of the United Kingdom, the
Netherlands, Germany, France or the United States or in the application thereof
by a Governmental Authority after the date of the Contract, but not including
any Law or any Codes and Standards or application thereof in existence as of the
date of the Contract that, by its terms, becomes or will become effective and
applicable to either Party or the System after the date of the Contract.
"Change Event" has the meaning ascribed thereto in Section 10.1 of the
Contract.
"Change Order" has the meaning ascribed thereto in Section 10.3 of the
Contract.
"Codes and Standards" means Governmental Authority requirements
pertaining to or relating to the System and the Services including rules,
regulations, codes, standards and Permits emanating from a Governmental
Authority.
"Contract" means the Project Services Agreement, dated January 11,
1999, between the Program Manager and the Owner, including all Exhibits thereto.
"Cost Incentive Fee" has the meaning ascribed thereto in Section 7.2(b)
of the Contract.
"Day" means the 24-hour period beginning and ending at 00.00 hours
Greenwich Mean Time.
A-2
"Defects and Deficiencies" means:
(a) when used with respect to Supplies, such items that are not:
(i) of good quality or free from improper workmanship and
deficiencies;
(ii) fit for the particular purpose for which they are provided
under the applicable Supplier Contract; or
(iii) free from errors or omissions in design or manufacture in
light of the Technical Requirements; and
(b) when used with respect to the Procured Services or any portion
thereof:
(i) such is not in accordance with the Technical Requirements;
(ii) such is not provided in a workmanlike manner; or
(iii) any materials, equipment, tools or supplies, or any design,
engineering, start-up, installation or quality-control activity that,
in the Owner's reasonable judgment:
(A) does not conform to the Technical Requirements or is of
improper or inferior workmanship; or
(B) would adversely affect the ability of the System to meet
any Performance Guarantee or warranty requirement referenced
hereunder;
(c) when used with respect to the Services or any portion thereof, any
respects in which they have not been performed in accordance with the
General Warranty.
"Disclosing Party" has the meaning ascribed thereto in Section 24.1 of
the Contract.
"Dollars" or "$" means the lawful currency of the United States.
"Duct" means, as described in the Technical Requirements, the duct to
be installed as part of the System to carry the Fiber Optic Cable.
"Event of Default" has the meaning ascribed thereto in Section 17.1 of
the Contract.
"Fiber Optic Cable" means, as described in the Technical Requirements,
the fiber optic cable to be supplied for the System pursuant to an Owner
Contract.
A-3
"Fixed Fee" has the meaning ascribed thereto in Section 7.2(a) of the
Contract.
"Force Majeure Event" has the meaning ascribed thereto in Section 12.1
of the Contract.
"Full-Time Equivalent Personnel" means the quotient of:
(x) total number of Hours Worked charged to the Owner during any
calendar month, DIVIDED BY
(y) [REDACTED],
where [REDACTED] is the anticipated monthly per-person expenditure of Hours
Worked for Program Manager Personnel performing the Services, assuming a
commitment of 48 hours per week, multiplied by [REDACTED] per month.
"General Warranty Period" means a period of two (2) years commencing
from the System RFS Date.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government.
"Guaranteed RFS Date" means [REDACTED], as such date may be extended in
accordance with Section 10 of the Contract.
"Hours Worked" has the meaning ascribed thereto in Exhibit E to the
Contract.
"Incentive Fee" has the meaning ascribed thereto in Section 7.2(b) of
the Contract.
"Incentive Fee Invoice" has the meaning ascribed thereto in Section
7.2(b) of the Contract.
"Interest Rate" means the lesser of (i) the LIBOR Rate plus four per
cent and (ii) the maximum interest rate permitted by applicable Law.
"Intellectual Property Rights" means all patent, trade ▇▇▇▇, copyright
and other industrial and intellectual property rights.
"Invoice" means the System RFS Invoice and each Incentive Fee Invoice.
"Key Program Manager Personnel" means any Person named in, or at any
time occupying any position or serving any function identified in, Exhibit J
hereto.
"Law" means any federal, state, provincial or local constitution,
charter, act, statute, law, ordinance, code, rule, regulation, order or other
legislative action of any Governmental Authority to the extent having the force
of law.
A-4
"LIBOR Rate" means, for any Day, the one-month London Interbank Offered
Rate (LIBOR) published in London edition of The Financial Times.
"Lien" means any mortgage, pledge, lien, deed of trust, claim, charge,
security interest, attachment or encumbrance of any kind, or any other similar
type of preferential arrangement including materialmen's, labourers',
mechanics', Suppliers' and vendors' liens, and including any agreement to give
any of the foregoing, any conditional sale or other title retention agreement,
any lease in the nature thereof.
"Lien Release" means the lien release executed and delivered by the
Program Manager or any Supplier in the form of Exhibit I to the Contract.
"Losses" means all damages, obligations, debts, deficiencies, demands,
judgments, causes of action, costs, charges, fines, penalties, claims, actions,
proceedings, liabilities, losses, demands, suits, prosecutions or expenses
(including reasonable attorney's fees, disbursements, costs, expenses and other
charges).
"Nortel" has the meaning ascribed thereto in Section 2.2(b) of the
Contract.
"Notice" has the meaning ascribed thereto in Section 27.1 of the
Contract.
"Notice of Exercise of Remedies" has the meaning ascribed thereto in
Section 17.1 of the Contract.
"Notice of Optional Termination" has the meaning ascribed thereto in
Section 16.1 of the Contract.
"Notice of Termination" has the meaning ascribed thereto in Section
18.1 of the Contract.
"Notice of Termination for Default" has the meaning ascribed thereto in
Section 17.1 of the Contract.
"Optional Termination" has the meaning ascribed thereto in Section 16.1
of the Contract.
"Owner" has the meaning ascribed thereto in the preamble to the
Contract.
"Owner-Caused Delay" has the meaning ascribed thereto in Section 2.3 of
the Contract.
"Owner Contract" means a contract entered into between the Owner and an
Owner Contractor.
"Owner Contractor" has the meaning ascribed thereto in Section 2.2(b)
of the Contract.
A-5
"Owner Default" has the meaning ascribed thereto in Section 15.2(b) of
the Contract.
"Owner Person" means:
(a) the Owner, the Owner's Project Representative and the Owner's
Inspector;
(b) anyone else acting on behalf of the Owner (other than the
Program Manager) in connection with this Contract; and
(c) the successors (including any Person acquiring any ownership
interest in System assets or properties, or in the Owner's rights under
the Contract), assigns, employees, agents, officers, directors and
affiliates of any of the foregoing.
"Owner-Procured Equipment" means any and all materials, plant,
machinery, equipment, hardware and other items provided by any Owner Contractor
pursuant to an Owner Contract.
"Owner Security" means has the meaning ascribed thereto in Section 7.1
of the Contract.
"Owner's Inspector" means a qualified Person designated as the
authorised representative of the Owner to:
(a) make all necessary inspections of the Services, the Procured
Services and the Supplies furnished or being furnished under this
Contract;
(b) to report on progress in the performance of the Services; and
(c) to review the Performance Tests, the Reimbursement Invoices,
the Invoices, the issuance of RFS Certificates and other matters
relating to the Contract.
"Parties" means the Owner and the Program Manager.
"Performance Guarantees" means the performance parameters for the
System, as set forth in the Technical Specification, and as may be developed by
the Program Manager and approved by the Owner.
"Performance Tests" means the tests to be conducted in accordance with
the Technical Specification and the terms and conditions of the Contract.
"Permits" means all:
(a) permits, "no objections", permissions-in-principle,
authorisations, consents, registrations, certificates, licenses,
orders, work authorisations/visas, permissions for the operation of
field equipment (including vehicles, machinery and communications
equipment and facilities) and similar authorisations; and
A-6
(b) consents, licenses, waivers, privileges, acknowledgements,
agreements, concessions, approvals from and all other filings with and
applications submitted to, any Governmental Authority or any other
Person,
but not including Wayleaves, Telecoms Licences or any of the foregoing which
relate to the POPs.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, trust, unincorporated organisation or Governmental
Authority.
"POP" or "Point of Presence" means each facility designed to house
termination and switching equipment for the System, as more particularly
described in the Technical Specification.
"Procured Services" means any and all services to be provided by any
Supplier pursuant to a Supplier Contract.
"Program Manager" has the meaning ascribed thereto in the preamble to
the Contract.
"Program Manager Personnel" means any Person at any time directly
performing Services under this Contract and:
(a) meeting the description of Key Program Manager Personnel; or
(b) engaged by the Program Manager (or by a parent or subsidiary
company of the Program Manager) as a full-time employee subject to the
Program Manager's (of the relevant parent's or subsidiary's) standard
conditions of employment for the relevant position or locality.
"Project Representative" has the meaning ascribed thereto in Section 13
of the Contract.
"Prudent Practices" means:
(a) in respect of any Services constituting engineering or
construction-management services, those practices, methods, specifications and
standards of safety and performance, as the same may change from time to time,
as are commonly used by professional firms regularly performing engineering and
construction-management services in Europe for facilities of the type and size
similar to the System, and
(b) in respect of any Services constituting procurement or
contract-administration services, those practices, methods, equipment,
specifications and standards of safety and performance, as the same may change
from time to time, as are commonly used by professional firms regularly
performing engineering and construction services in Europe for facilities of the
type and size similar to the System,
A-7
which, in each case, in the exercise of reasonable judgment and in the light of
the facts known at the time the decision was made, are considered professional,
safe and prudent practice in connection with the supervision of design,
construction, installation and use of equipment, facilities and improvements,
with commensurate standards of safety, performance, dependability, efficiency
and economy.
"Public Contract" means any instrument or document relating to any
Public Wayleave setting forth negotiated terms and conditions differing from, or
supplemental to, the statutory terms and conditions applicable to Public Forms.
"Public Form" means any standard-form application, instrument or other
document issued or utilized by, or required for submission to, any Governmental
Authority that does not contain or require any negotiated provision or other
special term or condition to any Public Wayleave not otherwise set forth in
applicable Laws and Codes and Standards.
"Public Wayleave" means any Wayleave that is (i) subject to official
grant by any appropriate Governmental Authority, and (ii) available to the
general public upon uniform terms and conditions (or, in the case of Public
Contracts, upon substantially uniform terms and conditions, subject to limited
negotiation of certain provisions) as expressly set forth in applicable Laws and
Codes and Standards.
"Recipients" has the meaning ascribed thereto in Section 24.1 of the
Contract.
"Recoverable Costs" means all items listed in Exhibit E to the
Contract.
"Reimbursable Costs" means the Supplier Costs and the Recoverable
Costs.
"Repeater Facilities" means all equipment, materials, facilities and
locations described in, and meeting the requirements of, Section 8 of the
Technical Specification.
"RFS Certificate" means the certificate to be issued by the Owner in
respect of the System in accordance with Section 21 of the Contract.
"Schedule Incentive Fee" has the meaning ascribed thereto in Section
7.2(b) of the Contract.
"Service Fees" means, collectively, the Fixed Fee and the Incentive
Fees.
"Services" has the meaning ascribed thereto in Section 2.1 of the
Contract.
"Site" means any location or locations at which the Program Manager or
any Supplier (or any employee or agent of either) is at any time performing
services or providing supplies in connection with this Contract.
A-8
"Supplier" means any contractor, vendor or supplier entering into a
Supplier Contract to perform services or provide equipment, supplies or material
for the System.
"Supplier Contract" means any contract that the Program Manager enters
into as agent for the Owner with any contractor, vendor or supplier.
"Supplier Cost" means any payment actually disbursed pursuant to any
Supplier Contract by the Program Manager to Suppliers in respect of Supplies or
Procured Services.
"Supplier Cost Verification" means the certification executed by the
Program Manager representing and confirming to the Owner that (i) the Program
Manager has, in fact, paid to the relevant Supplier(s) the full amount of
Supplier Costs as to which such Supplier Cost Verification relates and, (ii) to
the best of the Program Manager's knowledge and based on its full inspection as
required hereunder, the relevant Procured Services and Supplies are in
accordance with the Technical Requirements and have been completed and delivered
to the extent required under the Technical Requirements and the relevant
Supplier Contract for payment in respect thereof.
"Supplies" means any and all materials, plant, machinery, equipment,
hardware and other items provided by any Supplier pursuant to a Supplier
Contract.
"System" means the whole of each fiber optic telecommunications link
(including all equipment, Supplies, Permits, Wayleaves and other items, as more
precisely described in the Technical Specification, requisite for the
transmission of communications thereon) extending between and including all POPs
at the locations identified in the Technical Specification.
"System RFS Date" means the date on which a RFS Certificate is issued
in respect of the System in accordance with Section 21.2 of the Contract.
"Target Cost" [REDACTED]
"Target Cost Assumptions" means the schedule annexed as Exhibit K to
the Contract setting forth (i) categorical descriptions of the types and
quantities of Services anticipated by the Parties as necessary to achieve the
System RFS Date within the Target Cost and by the Guaranteed RFS Date and (ii)
the assumptions upon which such descriptions are based.
"Taxes" means all taxes and duties of any type, including
sales-of-goods taxes, value added taxes, customs duties or other levies and
duties applicable to the performance or delivery of the Services, the Procured
Services and the Supplies, but excluding any tax, duty or other charge levied on
or attributable to property owned, income earned or personnel engaged by the
Program Manager or any Supplier.
"Technical Requirements" means the following documents:
A-9
(a) the Technical Specification;
(b) the manufacturers' specifications and warranties relating to
any Procured Services and Supplies.
"Technical Specification" means Exhibit C to the Contract.
"Telecoms Licence" means any licence or similar authorization of any
Governmental Authority that a Person must hold in order to act as the owner or
operator of telecommunications facilities in a relevant jurisdiction.
"Termination for Default" has the meaning ascribed thereto in Section
17.1 of the Contract.
"Total Completion Cost" means the total amount of the Reimbursable
Costs paid or payable to the Program Manager prior to the System RFS Date.
"United States" means the United States of America.
"Wayleave" means any right-of-way, easement, license, franchise,
crossing, joint-use arrangement or other access right (but excluding leases of
existing transmission capacity or fiber optic cable from other
telecommunications service providers) that may be identified to the Owner by the
Program Manager, and entered into by or on behalf of the Owner, in connection
with the installation, maintenance, operation and ownership of the Fiber Optic
Cable, the Duct and the Repeater Facilities.
"Wayleave Criteria" means the technical criteria and applicable terms
and conditions set forth in Exhibit L to the Contract for Public Wayleaves and
Alternative Wayleaves.
"Wayleave or Permit Failure" means any refusal, delay or conditional
mandate by any Governmental Authority with respect to any application by the
Program Manager, duly submitted in full compliance with all applicable Laws,
Codes and Standards and the Wayleave Criteria, for any Public Wayleave or
Permit, which refusal, delay or mandate (i) is contrary to, or inconsistent
with, applicable Law or Codes and Standards, (ii) imposes conditions
supplemental to, or more onerous than, the express terms of such Laws or Codes
and Standards, or (iii) represents an arbitrary or capricious act or omission by
any relevant Governmental Authority in the conduct of its official duties.
EXHIBIT B
DESCRIPTION OF SERVICES
-----------------------
DESIGN REVIEW AND PLANNING
--------------------------
- Ongoing review of plans and specifications throughout conceptual
development, implementation and testing.
- Make recommendations for potential Suppliers of equipment and materials and
design, engineering and construction services for the System, including
preparation of proposals as to the allocation of System completion
activities among the various Supplier Contracts and the coordination of
such activities among Suppliers.
- Analyze proposed System components in terms of their technical suitability
(excepting network design, which is the responsibility of the Owner
Contractor supplying the network electronic equipment), initial cost and
life-cycle investment, and provide recommendations to the Owner with
respect to the foregoing.
- Evaluate new or innovative developments and advise the Owner as to
potential time- or cost-savings that are consistent with, or would improve
upon, quality standards.
- Review System design for adaptability to staged construction, develop bar
chart and milestone schedules that highlight critical decisions for the
Owner, and arrange early commitments for the purchase and fabrication of
long-lead and early-start items.
- Evaluate System design in terms of construction feasibility and cost, and
analyze and advise on the use of available labor-saving techniques, such as
off-Site fabrication and pre-assembly of System components.
- Review all specifications for conformity with current trade practices and
appropriate allocation of equipment purchases and work assignments.
- Prepare comprehensive, categorized project budgets and schedules at various
stages of design, engineering and construction.
- Develop a project implementation plan to analyze special requirements and
conditions.
- Identify opportunities for fast-tracking the overall System completion
schedule and evaluate costs and benefits of such strategies.
- Identify requirements for overtime work programs and shutdowns, and prepare
recommendations for the Owner on appropriate work-around plans.
PROCUREMENT SUPPORT
-------------------
- Advise the Owner of current pricing and availability of labor and materials
at the relevant Sites.
- Confirm potential Suppliers' availability, reputation and capacity for
reliable performance, bondability and other information as to their
suitability to provide the Procured Services and the Procured Supplies.
B-2
- Advise on jurisdictional assignments, labor agreement obligations, trade
restrictions and local work practices.
- Prepare and review bid packages to facilitate that alternate systems,
components, materials and techniques are clearly specified so as to obtain
proper bidder response.
- Where appropriate, develop bidding alternatives on materials, construction
techniques, fabrication and installation methods in order to take advantage
of current conditions in the construction marketplace.
- Review the bid packages and the scope of services and supplies therein to
confirm that every detail of work is properly and fully assigned.
- Review and tailor the bidding format and instructions for each type of
Procured Services and Procured Supply to help facilitate proper response to
base bids, specific alternate bids and unit price requests.
- Review early purchase bid packages. In major installation packages, confirm
inclusion of all requirements for special receipt, handling and
installation of materials and equipment to be furnished by others.
- Interview qualified potential Suppliers to confirm their interest in the
bidding process to help in the determination that there exists effective
competition among bidders.
- Establish the recommended bidders list for major elements of the Procured
Services and Supplies.
- Participate in prebid conferences and assist in responding to questions
raised during the bidding period.
- Evaluate base bids, alternate proposals, unit prices and all other
pertinent data.
- Review all cost proposals in relation to known local and current markets
for similar services and supplies, using extensive in-house cost data and
recent buy-out information.
- Organize and conduct meetings with bidders to discuss their bids and
proposed approach regarding project logistics, manpower and sequence of
operations in order to ascertain that they conform to the completion
schedules.
- Make a complete and independent evaluation of the bids and post-bid
discussions, subcontractor selection, alternates to be accepted and unit
prices to be included. Prepare detailed recommendations for award.
- On behalf of the Owner, negotiate contracts with potential Suppliers, with
a view toward reduction of the overall costs and delivery lead time for the
Procured Services and the Supplies.
B-3
CONTRACT MANAGEMENT
-------------------
- Update and confirm project budgets by developing a detailed independent
cost review using current market experience, current Supplier costs and
labor availability data.
- Develop and maintain a master project schedule. Solicit schedule updates
from all Suppliers as work progresses and integrate them into the master
schedule. Coordinate with the Owner as to matters affecting milestone
dates. Provide all other administrative, management and related services to
coordinate scheduled activities and responsibilities of the Suppliers, both
among themselves and in relation to the activities of the Program Manager
and the Owner Persons to secure System completion in accordance with the
latest cost estimates and completion schedules.
- Develop and implement procedures satisfactory to the Owner for the review
and processing of Suppliers' applications for payment.
- Prepare, produce and maintain a cost reporting and forecasting system to
track project costs and keep the Owner apprised of changes and revisions
that impact project costs. Provide monthly reports, with complete back-up,
on the Total Completion Cost.
- Control costs by anticipating potential problem areas and resolving them
such that additional costs are minimized. This process shall include
initiating input from the Suppliers and the Owner's Project Representative
for low-cost, yet high quality, responses to field changes.
- Use commercially reasonable efforts to obtain satisfactory performance from
each Supplier and recommend courses of action to the Owner when the
requirements of any Supplier Contract are not being fulfilled.
- Compile and review all required documentation and make recommendations to
the Owner regarding payments to Suppliers, and perform all accounting and
maintain all records required under the Contract.
- Monitor and evaluate any Supplier claims and advise the Owner with respect
to same.
PERMITTING AND WAYLEAVE SUPPORT
-------------------------------
- Review the Owner's Wayleave and Permit documentation and comment on
compatibility with System objectives.
- Recommend and agree with the Owner on supplemental criteria for Wayleave
selection.
- Identify routing options, assess and select preferred route, also
alternative routes, where appropriate, based upon agreed criteria
consistent with the Contract.
- Collect routing information and coordinate with relevant statutory
authorities, landowners and other relevant entities to produce
documentation necessary for Wayleave and Permits applications.
B-4
- Plan and negotiate Wayleaves and Permits of occupation of the route
including preparation of necessary plans, drawings and documents.
- Submit applications for Wayleaves and Permits on behalf of the Owner and
expedite their approval.
- Liase with the Owner's Contractors and make recommendations to the Owner to
achieve a coordinated approach to Wayleave and Permits.
TESTING, FIELD MANAGEMENT AND REPORTING
---------------------------------------
- Maintain project documentation systems at all appropriate Sites and in one
centralized location; organize and administer document updates and keep
Suppliers informed of the latest design conditions.
- Expedite and assist in the administration of Supplier Contracts. Provide
additional information as required to facilitate Supplier decisions in the
field.
- Review all work-in-progress at the Sites to confirm that it is in
accordance with the Technical Requirements.
- Perform or require, upon the Owner's written authorization, additional
testing or inspection of incomplete or unsatisfactory Procured Services and
Supplies, whether or not the same are fabricated, installed or completed.
Reject and require, at no additional cost, re-performance or redelivery of
any item of services or supplies that is incomplete or contains Defects and
Deficiencies.
- When any Procured Services or Supplies (or portions thereof) are, in the
Program Manager's judgment, substantially complete, coordinate with the
relevant Supplier(s) to inspect such services or supplies and prepare for
the Owner a list of incomplete or unsatisfactory items and a schedule for
their completion. Coordinate completion of any such items and any Punch
List items, and notify and assist the Owner at such time as such items are
ready for final inspection.
- Compile, verify and deliver to the Owner's Project Representative weekly
progress reports for the System.
- Recommend and retain on behalf of the Owner (with the Owner's approval)
special consultants or inspectors as needed.
- Arrange for the delivery, storage, protection and security of
Owner-purchased materials, systems and equipment to be integrated into the
System.
- Develop integrated testing standards and procedures for the Owner's
approval and administer the testing and delivery to the Owner of the
System.
- Develop and implement a Site-specific safety program or programs designed
to enhance the safety of workers, the public and property, and perform the
following safety-related functions:
B-5
- Maintenance of a fire/emergency evacuation plan;
- Maintenance of appropriate records at Site field offices;
- Providing all on-site Suppliers with a "road map" for movement of personnel
and materials;
- Establishment of a chain of command between the Program Manager and the
Suppliers in the pursuit of a safe and healthy work environment;
- Reinforcement of safety awareness and procedures at all Supplier meetings;
- Mandatory monthly Site safety meetings for project personnel; and
- Weekly walk-throughs to check the quality control and safety level of work
being performed.
EXHIBIT C
TECHNICAL SPECIFICATION
-----------------------
[REDACTED]
EXHIBIT D
FEE SCHEDULE
------------
[REDACTED]
EXHIBIT E
RECOVERABLE COSTS
-----------------
[REDACTED]
EXHIBIT F
INSURANCE REQUIREMENTS
----------------------
[REDACTED]
EXHIBIT G-1
MATERIAL TERMS AND CONDITIONS OF SUPPLIER CONTRACTS
---------------------------------------------------
A. WARRANTIES
----------
1.) GENERAL WARRANTIES. Each Supplier shall warrant for the benefit of the
Owner that (together with such other warranties as may be set forth in
any Supplier Contract, the "SUPPLIER WARRANTIES"):
(a) All items included in the Procured Services or Supplies, as
applicable, shall:
(i) meet or exceed the Performance Guarantees;
(ii) be performed or furnished in accordance with:
(A) Prudent Practices (as applicable to each Supplier
Contract);
(B) Applicable Laws and Codes and Standards;
(C) Specifications and instructions of manufacturers,
vendors and subcontractors applicable to any item of
such Supplies; and
(D) All other requirements of this Contract and such
Supplier Contract; and
(b) All items of Supply shall:
(i) be new;
(ii) be fit for the particular purpose of this Contract (as
described in the Technical Specification);
(iii)be fully capable of (and be installed and maintained to be
capable of) integration into the System, such that, assuming
that the Procured Services and Supplies provided by other
Suppliers conforms to the Technical Requirements, the System,
on an integrated basis, shall meet the Performance
Guarantees.
2.) SUBCONTRACTOR WARRANTIES. Any and all warranties furnished to any
Supplier by subcontractors or vendors shall be consistent with the
relevant Supplier Warranties, and shall, as requested by the Owner, be
subject to conditional assignment to the Owner on or after the System
RFS Date.
3.) WARRANTY PERIODS. [REDACTED]
G1-2
B. PAYMENTS
--------
1.) PROGRESS PAYMENTS AND RETAINAGE.
(a) Each Supplier Contract shall, to the maximum extent practicable,
provide that payments shall be deferred until testing and
acceptance of the relevant items of Procured Services or Supplies
has occurred. Each Supplier shall, as a condition to final payment
for the Procured Services or Supplies, execute and deliver a
Certificate of Payment and Final Release in favor of the Owner. In
the case of Supplier Contracts providing for payment on a
percentage-of-completion basis, each Supplier shall execute and
deliver Lien Releases in favor of the Owner with respect to
Procured Services or Supplies having an aggregate Supplier Cost in
excess of [REDACTED].
(b) All payments made to Suppliers prior to testing and acceptance of
the relevant Procured Services or Supplies shall be subject to
retainage in amounts usual and customary in respect of such
services and supplies. To the extent that retainage security is
unavailable, inadequate or undesirable in the context of any
particular Supplier Contract, such Supplier Contract shall provide
for an alternative form of security such as a performance bond or
bank guarantee in favor of, and in form and substance satisfactory
to, the Owner.
2.) WITHHOLDING AND OFFSET OF PAYMENTS. The Supplier Contracts shall
entitle the Owner to withhold payment on account of:
(a) the Supplier's failure to remedy Defects and Deficiencies;
(b) the existence of Liens, claims or other charges in favor of third
parties against the System, the Owner or the Supplier;
(c) the Supplier's failure to:
(i) maintain all required insurance;
(ii) provide all required documentation;
(iii)pay, when due, any liquidated damages, other damages or any
payments owed to the Supplier; or
(iv) make all payments to subcontractors, vendors and suppliers in
accordance with their respective contracts with the Supplier;
or
G1-3
(d) a finding by the Owner that the amount of any prior progress
payment made to a Supplier exceeded the amount that should have
been payable in respect of the Procured Services or Supplies
actually delivered by such Supplier.
Supplier Contracts shall provide that the Owner may, upon notice to the
relevant Supplier of its intention to do so, apply any payments
withheld or moneys to become due to such Supplier to satisfy, discharge
or secure the release of such claims that the Supplier has failed to
settle within 30 Days after notice thereof from the Owner. Any such
application shall be deemed payment to the Supplier.
3.) PUNCH LISTS. Supplier Contracts shall require, in connection with
applications for any RFS Certificate, that the Supplier deliver to the
Owner for its approval a written punch list (the "PUNCH LIST") of items
of Supply or Procured Services to be completed or supplied, which shall
specify estimated cost to complete or supply each such item. Upon the
Owner's approval of any Punch List, the Owner may withhold from the
retainage or any other amount paid to the Supplier upon the issuance of
the applicable RFS Certificate, an amount (the "PUNCH LIST RESERVE")
equal to [REDACTED]of the cost of completing or correcting all items
identified on the relevant Punch List.
C. TITLE; NO LIENS
---------------
1.) TITLE. Each Supplier shall represent and warrant to the Owner that:
(a) prior to the transfer of any property to the Owner, such Supplier
has good and marketable title to, and ownership of, all materials,
work and equipment to be incorporated into the System or forming a
part of the Procured Services or the Supplies;
(b) upon the delivery of the Procured Services and the Supplies or the
transfer of any other property to the Owner, the Owner shall have
the absolute and exclusive right, title and interest to all
materials, work and equipment to be incorporated into the System
or otherwise forming a part of the Procured Services or the
Supplies (and, to the extent that the Supplier delivers to the
Owner any Procured Services or the Supplies involving Intellectual
Property Rights, that all requirements of Section 6 of the
Contract applicable to such Intellectual Property Rights have been
complied with); and
(c) such title shall pass to the Owner free and clear of any and all
Liens.
2.) NO LIENS; REMOVAL OF LIENS. Each Supplier shall:
(a) Keep the System, the Site, the Supplies and the Procured Services
free and clear of any and all Liens (including posting a bond)
other than Liens created directly by the Owner; and
(b) Indemnify each Owner Person from and against any and all Losses in
any way arising from such Supplier's breach of the foregoing
covenant.
G1-4
D. DEFAULT AND REMEDIES
--------------------
1.) EVENTS OF DEFAULT. Each Supplier Contract shall provide that each of
the following shall be an Event of Default ("EVENT OF DEFAULT"):
(a) the Supplier has failed to carry out engineering, fabrication,
supply, delivery, installation or testing the Procured Services or
Supplies at the rate of progress required by and in accordance
with such Supplier Contract that is likely to result in a material
breach thereof; or
(b) the Supplier fails to make any payment under the Supplier Contract
when due; or
(c) the Supplier commits any material breach of, or fails in any
material respect to comply with and observe, any provision of the
Supplier Contract; or
(d) the Supplier abandons performance of the Procured Services or the
Supplies for a period in excess of [REDACTED] , or intimates
without lawful cause or justification that such will not or cannot
be completed; or
(e) the Supplier shall make a general assignment for the benefit of
creditors, or any proceeding shall be instituted by the Supplier
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of the Supplier or its debts
under Law relating to bankruptcy, insolvency or reorganization or
relief or the appointment of a receiver, trustee or other similar
official for the Supplier or for any substantial part of its
property or the Supplier shall take any corporate action to
authorize any of the actions set forth above in this Section; or
(f) an involuntary petition shall be filed or an action or proceeding
otherwise commenced against the Supplier seeking reorganization,
arrangement or readjustment of the Supplier's debts or for any
other relief under any bankruptcy or insolvency act or Law, now or
hereafter existing and remain undismissed or unvacated for a
period of [REDACTED]; or
(g) a receiver, assignee, liquidator, trustee or similar officer for
the Supplier or for all or any part of its property shall be
appointed involuntarily; or
(h) the Supplier shall file a certificate of dissolution under
applicable Law or shall be liquidated, dissolved or wound up or
shall commence or have commenced against it any action or
proceeding for dissolution, winding up or liquidation, or shall
take any corporate action in furtherance thereof; or
G1-5
(i) the Supplier either:
(i) fails to make prompt payment of any undisputed invoice due to
any subcontractor, vendor or supplier, or otherwise for
materials or labor; or
(ii) repudiates or is in default with respect to any of its
obligations to any subcontractor, vendor or supplier; or
(j) the Supplier fails, after being notified thereof by the Owner, to
promptly correct any Defects or Deficiencies prior to the System
RFS Date or within the relevant Warranty Period; or
(k) any representation or warranty made by the Supplier in the
Supplier Contract or in any certificate, financial statement or
other document furnished to the Owner by or on behalf of the
Supplier shall prove to be false or misleading in any material
respect as of the time made, confirmed or furnished.
2.) REMEDIES. Each Supplier Contract shall entitle the Owner to take the
following actions upon the occurrence and continuance of any Event of
Default:
(a) suspend payment under the Supplier Contract in whole or in part;
(b) take the performance of the Supplier Contract, including any
Supplies or Procured Services not yet delivered to Owner, wholly
or partly out of the control of the Supplier or any other Person
and cause the same to be completed, whereupon the Supplier shall
reimburse the Owner for any additional costs incurred by the Owner
in connection with such completion;
(c) exercise rights against the retainage, performance bond or bank
guarantee, as applicable, provided by the Supplier;
(d) apply any amount owning to the Supplier to the payment and
performance of its obligations; or
(e) exercise any and all rights and remedies it may have under law or
equity, including seeking specific performance and the recovery of
damages.
The foregoing remedies shall be cumulative, and the Owner shall be
entitled to elect one or more thereof without prejudice to any other
right or remedy it may have.
E. INSURANCE; INDEMNITY
--------------------
1.) INSURANCE.
(a) GENERALLY. Each Supplier Contract shall require that the Supplier
procure, at its own cost and expense, and maintain in effect
adequate insurance coverage against all risks normally insurable
G1-6
and insured in accordance with industry standards relating to the
Procured Services and the Supplies. Unless otherwise stipulated
between Owner and the Program Manager, such insurance shall be
maintained in effect for the duration of all applicable Warranty
Periods and, if requested by the Owner, shall name the Owner and
the Program Manager as an additional insured. Each Supplier shall,
to the extent applicable, provide the following insurance (in the
maximum coverage amounts, and subject to the deductibles as Owner
and the Program manager shall agree in respect of each Supplier
Contract):
(i) COMPREHENSIVE PERSONAL INJURY AND PROPERTY DAMAGE LIABILITY
INSURANCE. This insurance shall (i) cover all activities of
the Supplier, its employees, agents, subcontractors and
vendors (collectively, the "SUPPLIER PERSONS"), (ii) state
that it is primary coverage and not subject to contribution
from other insurance maintained by the Supplier, and (iii) be
maintained in effect for [REDACTED].
(ii) BUILDER'S RISK AND COURSE OF CONSTRUCTION INSURANCE. This
insurance shall be written on a replacement cost basis for
the full value at risk, and shall include, without
limitation:
(A) physical damage insurance covering the Supplies or
Procured Services at the Supplier's premises; and
(B) transportation and installation all risks covering the
Supplies or Procured Services.
(iii)WORKER'S COMPENSATION INSURANCE. This insurance shall cover
all employees and servants of the Supplier for all
compensation and other benefits required by any applicable
Law or by Governmental Authority in respect of injury, death,
sickness or disease. The territorial restriction shall be
amended so that employees working in the area of operations
are not excluded.
(b) NOTICE OF CANCELLATION. All of the Supplier's insurance coverages
shall provide that, prior to any cancellation or material change
thereto initiated by the insurers, a [REDACTED] notice shall be
forwarded to the Owner.
(c) COPIES. At the Owner's request, the Supplier shall furnish the
Owner with certified copies of insurance policies or certificates
of insurance that provide sufficient information to verify that
the Supplier has complied with the insurance requirements under
the Supplier Contract.
(d) FAILURE TO MAINTAIN INSURANCE. If the Supplier fails to effect or
keep in force any of the insurance required by the Supplier
G1-7
Contract, the Owner may, without prejudice to any other rights it
may have under the Supplier Contract, effect and keep in force any
such insurance and pay the premium due or take out new insurance
satisfactory to the Owner, in which event any amounts so paid by
the Owner shall become immediately due and payable by the Supplier
to the Owner. Should the Supplier fail to make any payment to the
Owner upon its request therefor, the Owner may deduct the amount
of such payment from any payment that is, or may become, due to
the Supplier.
2.) INDEMNITY. Each Supplier Contract shall provide that the Supplier shall
be liable for, and shall indemnify, protect, defend and hold harmless
each Owner Person from and against, all Losses:
(a) in respect of any injury to, or death or disease of, any person,
or any damage to, or loss of use of, any property or asset based
upon, arising under or otherwise related to the act, omission or
negligence of the Supplier, its employees, agents, subcontractors
and vendors (collectively, the "SUPPLIER PERSONS") in connection
with the performance of this Contract; or
(b) arising in connection with any infringement or claimed
infringement of Intellectual Property Rights forming a part of the
Procured Services or the Supplies; or
(c) arising from any act or omission of any Supplier Person that
violates any Law; or
(d) to the extent not covered by items (a) through (c) above, in
respect of any injury to, or death or disease of, any person, or
any damage to, or loss of use of, any property as a result of the
discharge or presence of any environmentally hazardous substance,
which discharge or presence was caused in any manner by the act,
omission or negligence of any Supplier Person; or
(e) arising from any breach by the Supplier of a Supplier Warranty; or
(f) otherwise stipulated as indemnifiable under any other provision of
the Supplier Contract,
except for such Losses solely due to the willful misconduct or gross negligence
of such Owner Person.
EXHIBIT G-2
FORM OF SUPPLIER CONTRACT
-------------------------
[REDACTED]
EXHIBIT H
FORM OF CERTIFICATE OF PAYMENT AND FINAL RELEASE
------------------------------------------------
CERTIFICATE OF PAYMENT AND FINAL RELEASE
----------------------------------------
Dated _____________
CIRCE CABLE PROJECT
Circe 2 System
Reference is made to the [PROJECT SERVICES AGREEMENT / RELEVANT SUPPLIER
CONTRACT] dated as of [_____________ ___, ____] (as amended, supplemented or
otherwise modified from time to time, the "CONTRACT"), between [VIATEL, INC.]
(the "OWNER") and [BECHTEL LIMITED / RELEVANT SUPPLIER] (the ["CONTRACTOR"] /
["SUPPLIER"]). Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed thereto in the Contract.
1. RELEASE AND WAIVER. In consideration of, and subject to, the Owner's
remittance of the final payment owed to the [PROGRAM MANAGER] / [SUPPLIER] in
connection with the Contract, the [PROGRAM MANAGER] / [SUPPLIER] hereby and
forever releases, waives, and discharges:
1.1. any rights, Liens or other claims that the [PROGRAM MANAGER] /
[SUPPLIER] has or may have against any Owner Person arising out of or relating
to the System or any Services, Procured Services or Supplies (including any
materials, equipment or supplies forming a part thereof, or furnished in
connection therewith, the "CONTRACT ITEMS") performed or delivered pursuant to
the Contract or any other agreement or contract relating to the System; and
1.2. any other legal or equitable claim or right that the [PROGRAM
MANAGER] / [SUPPLIER] may have against any Owner Person or the System (or any
portion thereof) in any manner arising out of or relating to the performance of
the Contract and the delivery of any Contract Items.
2. CERTIFICATIONS. The [PROGRAM MANAGER] / [SUPPLIER] certifies that:
2.1. acceptance of the Final Payment by the [PROGRAM MANAGER] /
[SUPPLIER] shall represent the [PROGRAM MANAGER'S] / [SUPPLIER'S] complete
satisfaction with the final compensation for all claims and the Contract Items;
2.2. there are no expected or known Liens arising out of or in
connection with the performance or delivery by the [PROGRAM MANAGER] /
[SUPPLIER] of any Contract Items;
2.3. all Taxes and insurance premiums for which the [PROGRAM MANAGER] /
[SUPPLIER] is responsible under the Contract that have accrued to date in
connection with any Contract Items have been fully paid and discharged.
IN WITNESS WHEREOF, the [PROGRAM MANAGER] / [SUPPLIER] has
executed this Certificate of Payment and Final Release as of _______________,
19___.
[BECHTEL LIMITED / RELEVANT SUPPLIER]
By
----------------------------------
Name:
Title:
EXHIBIT I
FORM OF LIEN RELEASE
--------------------
LIEN RELEASE
------------
Dated ______________
CIRCE CABLE PROJECT
Circe 2 System
Reference is made to the [PROJECT SERVICES AGREEMENT / RELEVANT
SUPPLIER CONTRACT] dated as of [_____________ ___, ____] (as amended,
supplemented or otherwise modified from time to time, the "CONTRACT"), between
[VIATEL, INC.] (the "OWNER") and [BECHTEL LIMITED / RELEVANT SUPPLIER] (the
["CONTRACTOR"] / ["SUPPLIER"]). Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed thereto in the Contract.
1. RELEASE AND WAIVER. In consideration of, and subject to, the Owner's
payment for the [SERVICES] / [SUPPLIES] described in the [PROGRAM
MANAGER] / [SUPPLIER] Invoice, dated as of the date hereof (the
"CURRENT INVOICE"), the [PROGRAM MANAGER] / [SUPPLIER] hereby and
forever releases, waives, and discharges any rights, Liens or other
claims (other than claims that are subject to the dispute-resolution
provisions of Section [___] of the Contract) that the [PROGRAM MANAGER]
/ [SUPPLIER] has or may have against any Owner Person arising out of or
relating to the System or such Services, Procured Services, Supplies or
other items heretofore performed, delivered or otherwise subject to the
Current Invoice (collectively, the "INVOICED ITEMS"), including any
materials, equipment or supplies forming a part of, or furnished in
connection with, any Invoiced Items.
2. CERTIFICATIONS. The [PROGRAM MANAGER] / [SUPPLIER] certifies that:
2.1. there are no expected or known Liens on the System (or any
portion thereof) or on any Invoiced Items arising out of or in
connection with the performance or delivery by the [PROGRAM
MANAGER] / [SUPPLIER] of the Invoiced Items; and
2.2. all Taxes (excluding any income taxes) and insurance premiums
for which the [PROGRAM MANAGER] / [SUPPLIER] is responsible
under the Contract that have accrued to date in connection
with the Invoiced Items have been fully paid and discharged,
or, to the extent accrued but not yet payable, such Taxes and
premiums will be paid and discharged out of the payment(s)
made by the Owner to the [PROGRAM MANAGER] / [SUPPLIER] in
respect of the Current Invoice.
IN WITNESS WHEREOF, the [PROGRAM MANAGER] / [SUPPLIER] has executed
this Lien Release as of this ____ day of __________________, ______.
[BECHTEL LIMITED / RELEVANT SUPPLIER]
By
----------------------------------
Name:
Title:
EXHIBIT J
SCHEDULE OF KEY PROGRAM MANAGER PERSONNEL
-----------------------------------------
1.0 INTRODUCTION
------------
1.0 The Program Manager's Project Representative, as approved by the
Owner, being an employee of the Program Manager, shall direct and
control the overall performance of the Services as set forth in the
Contract. Such Project Representative, or any replacement approved by
the Owner, shall be the primary Program Manager contact for the Owner
for official directions, correspondence, and instructions.
2.0 KEY PERSONNEL
-------------
[REDACTED]
3.0 REMOVAL OF KEY PERSONNEL
------------------------
[REDACTED]
4.0 PERSONNEL
---------
4.1 The following positions are identified as Key Program Manager
Personnel positions and will require the Owner's written approval of
individuals who fill these roles;
[REDACTED]
EXHIBIT K
TARGET COST ASSUMPTIONS
-----------------------
BASIS OF CIRCE 2 COSTING
------------------------
[REDACTED]
EXHIBIT L
WAYLEAVE CRITERIA
-----------------
[REDACTED]
EXHIBIT M
OWNER SECURITY
--------------
[REDACTED]