EXHIBIT 10.6
[SRT LOGO] [STAMP OF SAUDI TELECOM CO]
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MASTER PURCHASE AGREEMENT
FOR
450K PROJECT
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SAUDI TELECOM COMPANY [STAMP OF SAUDI TELECOM CO]
NO :
Date :
S.R.T
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1 600K NETWORK EXPANSION TENDER 14/5/2001
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2 450K NETWORK EXPANSION TENDER 20/5/2001
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3 450K NETWORK EXPANSION TENDER 21/5/2001
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4 TEP450K PROJECT TENDER 21/5/2001
NETWORK AND PRICING PROPOSAL
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5 450K NETWORK EXPANSION TENDER 23/5/2001
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6 SRS BEST AND FINAL WITH STC 24/5/2001
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7 SRS BEST AND FINAL WITH STC 25/5/2001
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SAUDI TELECOM COMPANY [STAMP OF SAUDI TELECOM CO]
NO :
DATE :
MASTER PURCHASE AGREEMENT FOR TELEPHONE NETWORK EXPANSION
PROJECT NO. 221145
THIS CONTRACT has been entered into in Riyadh city this day corresponding
to between:
First: SAUDI TELECOM COMPANY, A Saudi Company registered at Riyadh Commercial
Registration under number (1010150269), represented in signing this Contract by
its President Eng. Khaled Bin ▇▇▇▇▇▇▇▇ ▇▇-▇▇▇▇▇▇ Hereafter referred to as the
Company - First Party
Second: SRTELECOM (SRT), a Canadian company established under the laws of Canada
and having its branch office in the Kingdom of Saudi Arabia rabia at the address
▇.▇. ▇▇▇ (▇▇), ▇▇▇▇▇▇ ▇▇▇▇▇ and represented in the signature of this Contract by
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, its Regional Vice President.
Hereinafter referred to as the Contractor - Second Party.
WHEREAS the Company intends to carry out an expansion of its SRS network and has
invited tenders for the supply of these Works
and
WHEREAS the Contractor has submitted his offer to carryout and complete these
works after reviewing the tender conditions, specifications and all attached
documents,
And
WHEREAS the Company accepted the offer submitted by the Contractor,
NOW, THEREFORE, the parties agree as follows:
ARTICLE (1): PURPOSE OF THE CONTRACT:
This Contract is a Master Purchase Agreement that provides the terms and
conditions and Unit Prices under which the Company may order and the Contractor
shall supply Works as may be specified from time to time in Purchase Orders in
connection with Company's requirements for the expansion of its SRS network.
The Scope of Work Schedule attached to this Contract specifies the Works to be
supplied under Purchase Order No. 1 of this Contract for the Total Ceiling Value
stipulated in Article (6) of this Schedule, based on the Unit Prices and
estimated ▇▇▇▇ of Quantities.
ARTICLE (2): CONTRACT DOCUMENTS
2.1. This Contract shall consist of the following schedules:
A. This Main Contract Document.
B. Special Contract Conditions
C. General Contract Conditions
D. The Scope of Work
E. The Unit Price Schedule
F. ▇▇▇▇ of Quantities
G. Project Implementation Plan
H. The Company's Generic Specifications
I. The Company's Letter of Award (LOA) No. 393 date 21/03/1422H
J. The Contractor's OfferNo. (SRQ-B222) dated 04/11/2000G and
Contractor's subsequent letters referenced in the Letter of
Award and the agreed negotiation documents.
K. Project Technical Specifications
2.2. These documents shall constitute an integral unit and each document
shall be considered part of the Contract so they explain and complement
each other.
2.3. In case of any contradiction between the Contract documents the
precedent document shall prevail over the one following it in the order
stated in Article (2.1) above. In case of different versions of the
same document, the most recent document agreed by both parties shall
prevail.
ARTICLE (3) : TOTAL CONTRACT PERIOD
Without prejudice to Articles 35 and 36 of the General Conditions:
3.1. The Total Contract Period shall commence on the Effective Date of the
Contract and end sixty (60) Gregorian months after the Effective Date
but in no event expire before Final Acceptance of the last part of any
Works supplied under this Contract. The Effective Date shall be the
date of the first Site Hand Over.
3.2 The Contractor shall supply all Works described in Contract Purchase
Orders within a period of forty eight (48) Gregorian months from the
effective Date of the Contract, which shall be
termed the Total Contract Implementation Period. The Implementation
Period shall commence on the Effective Date and be completed by
Provisional Acceptance of all Works supplied under this Contract.
3.3 The Contractor shall supply all Works described under Purchase Order
No.l within a period of eighteen (18) Gregorian months from the
Effective Date of the Contract. This period shall be termed the
Implementation Period of Purchase Order No.l.
3.4 Works may be ordered to be supplied by further Purchase Orders during
the Contract Implementation Period defined in (3.2) above in accordance
with the terms and conditions of Article (3) of the Special Contract
Conditions.
3.5 Provisional Acceptance shall be followed by a minimum period of twelve
(12) Gregorian months during which each accepted SRS System or Part of
System (as the case may be) is taken under approval and maintained
under Warranty by the Contractor in accordance with this Contract, but
in no event shall this period expire before the Final Acceptance of
each SRS System or Part of System. In this period, during which the
accepted SRS System may be put in service, Technical Maintenance
support services for each accepted SRS System
or Part of System shall be provided by the Contractor as specified in
other Contract documents.
3.6 In case of goods, which are designated for delivery to warehouse only,
their Acceptance shall be followed by a Warranty in accordance with
this Contract for a period of twelve (12) months unless otherwise
stated to be longer in other Contract documents.
3.7 Taking into account circumstances beyond the Contractor's reasonable
control and expectation, if the Contractor fails to supply the Works of
a Purchase Order within the periods mentioned in its Project
Implementation Plan or relevant MoPs, he shall be subject to the delay
penalty stipulated in Article (39) of the General Contract Conditions
and the supervision costs stipulated in Article (40) applied to the
delayed SRS Systems or parts thereof.
ARTICLE (4): WARRANTY PERIOD
The Contractor shall guarantee that all Works are in accordance with the
Contract and its documents for the period commencing from the Provisional
Acceptance date and expiring on the Final Acceptance date except as otherwise
specifically stated to be longer in other Contract documents taking into account
Article (41) of the General
Contract Conditions and Article (27) of the Special Contract Conditions.
ARTICLE (5): PERFORMANCE GUARANTEE
A Performance Guarantee (5% of the Total Purchase Order Value) stipulated in
Article (9) of the General Conditions shall be provided by the Contractor to the
Company within 10 days of Contract Signature for Purchase Order No. 1 and within
10 days of Purchase Order signature for any subsequent Purchase Order as
security for his proper execution of the Contract. The Guarantee shall remain
valid and shall not be released until the Final Acceptance of the last part of
the Works supplied under the relevant Purchase Order which shall be after the
Contractor has executed and completed the Works and remedied any defects therein
in accordance with the Contract. If at any stage during the period of the
Contract, the Contractor fails to abide by the Contract satisfactorily, the
Performance Guarantee may be called. Termination of the Contract due to a
failure on the Contractor's part will automatically be grounds for surrender of
the Guarantee.
ARTICLE (6): TOTAL PURCHASE ORDER VALUE
6.1. The Total Ceiling Value of Purchase Order No.l is SAR 87,200,000
(Eighty Seven Million Two Hundred Thousand Saudi Arabian Riyals).
6.2. The Total Value of any Purchase Order is subject to increase and
decrease based on any change in the Scope of Work to be supplied by the
Contractor in accordance with the Contract and its documents, and based
on the additional and complementary Works and amendments made on the
request of the Company within the limits stated in the Contract's
Conditions.
6.3. The Total Value of any subsequent Purchase Order shall be determined in
accordance with the terms and conditions of Article (3) of the Special
Contract Conditions.
ARTICLE (7): PAYMENT
The Company shall pay the Contractor for Works supplied by him in fulfillment of
his obligations under this Contract according to its terms and conditions and as
stipulated in the Special Contract Conditions Articles (2) and (4) and the
General Contract Conditions Article (50).
ARTICLE (8): DISCLOSURE
Without prejudice to the provisions of other regulations the Contractor shall
acknowledge that he did not pay and will not pay any money or
give any other value, or promise anything to obtain this Contract. If proven
otherwise, any amount already paid or promised to be paid shall be deducted from
the Contractor's payments due and the Company shall have the right to terminate
the Contract without any compensation and the Contractor and its employees shall
be held responsible for such acts.
ARTICLE (9): APPLICABLE LAW
This Contract shall be subject to the prevailing laws and regulations of the
Kingdom. It shall be interpreted, implemented, and its disputes settled
according to such regulations.
ARTICLE (10): ENTIRE AGREEMENT
This Contract and its documents constitute the entire agreement of the parties
with respect to the subject matter hereof. This Contract may only be amended by
an agreement in writing signed by both parties hereto.
In Witness hereof this Contract has been signed at the place and time stated
above.
For/First Party For/Second Party
/s/ Khaled Bin Abullah AI-Mulhem /s/ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Eng./khaled Bin Abullah AI-Mulhem ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
President, Saudi Telecom Company SR Telecom
Vice President
SPECIAL CONTRACT CONDITIONS
1- DEFINITIONS AND ABBREVIATIONS
1-I Definitions
Goods:
Any equipment, products or materials including licensed materials
(e.g. software, etc) supplied under this Contract
Services:
Any type of labor or work (e.g. installation, etc) supplied under
this Contract.
Works:
Goods, services or any combination of goods and complementary services
as specified in the Scope of Work of a Purchase Order.
Supply:
Implement or deliver Works as appropriate under this Contract.
Unit Price:
A Unit Price is the stated price of a single Contract Unit or in case
it is stated as a percentage it is a derived price calculated as a
percentage of other Unit prices.
Contract Unit:
Any item in the Unit Price Schedule which has a unique description,
defined deliverable and a Unit Price.
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▇▇▇▇ of Quantities:
A list of Contract Units, with quantities and Unit Prices the total
cost of each Contract Unit and the total cost of all items.
Lump Sum:
Any value in the Contract which does not represent deliverables defined
in terms of a ▇▇▇▇ of Quantities.
1-2 Abbreviations
The following abbreviations, wherever mentioned in the Contract
documents, shall have the associated corresponding meaning:
CU Contract Unit
CUL Contract Unit List
FA Final Acceptance
FAC Final Acceptance Certificate
FT Factory Test
MOP Method of Procedure
MPA Master Purchase Agreement
PIP Project Implementation Plan
OIL Outstanding Item List
O&M Operations and Maintenance
PA Provisional Acceptance
PAC Provisional Acceptance Certificate
▇▇▇ Provisional Acceptance Test
PO Purchase Order
RFP Request for Purchases
SASO Saudi Arabian Standards Organization
TM Technical Maintenance support
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2- CURRENCY, PRICING AND PAYMENT PRINCIPLES
2-1 All prices (unit and total prices) shall be stated in Saudi Riyal (SR)
only, without any correlation with the exchange rate of any other
currency.
2-2 The payment between the Company and the Contractor shall be carried out
according to the actually implemented works which have been approved by
the Company both at the planning stage and in their execution, i.e. the
value of the actually implemented works shall be calculated according
to their quantities used in the implementation multiplied by the unit
prices as included in the Contract.
2-3 The Unit Prices shall cover all costs incurred by the Contractor in
pursuance of the implementation of the tasks of the Contract with him
including the taxes, customs duties, customs clearance charges, other
local dues, transportation and storage charges, social insurance
installments, and any obligations the Contractor may bear in pursuance
of the implementation of the tasks of the Contract.
2-4 Unit Prices (including discount formulas) stated in this Contract shall
remain fixed for the whole Contract Period.
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2-5 Embedded Costs
The value of all overheads, indirect expenses, Project Management,
Planning, Survey, Design and Engineering, SRS Network Integration
Documentation and Administration costs are embedded into the Contract
Unit Prices. These embedded costs exclude the costs of COM/IS
Integration and Survey, Engineering and Administration Services for
Equipment supplied by the Company which are payable in accordance with
the relevant sections of Article (4) of this Schedule.
2-6 Interpretation of Tender Models
The Contract Units included in the Contractor's Offer in response to
each of the Models described in the Tender Scope of Work shall be
considered as the only necessary Contract Units to implement any
equivalent model functionality or part of model functionality under
this Contract.
3- PURCHASE ORDERS UNDER THE MPA
3-1 Terms and Conditions for Purchase Orders
All Works under this Contract shall be supplied by Purchase Order and
shall be subject to all the terms and conditions prevailing in this
Contract.
3-2 Purchase Order No. 1
Purchase Orders shall be sequentially numbered starting with Purchase
Order No.l. Purchase Order No.l is considered to be contained in this
signed Contract wherein the Works to be supplied are described in the
Scope of Work and ▇▇▇▇ of Quantities Schedules and an Implementation
Period and Total Value are specified in Schedule A.
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3-3 Request for Purchases
Prior to any Purchase Order being placed with the Contractor
subsequent to Purchase Order No.l, the Company shall issue a Request
for Purchases (RfP) to be delivered over a stipulated period. The
Contractor shall respond with a complete offer within 30 days of
receiving said request.
3-4 Contents of Offer
The offer shall include the following:
- An estimated ▇▇▇▇ of Quantities using Contract Units and their
Unit Prices taking into consideration all applicable discounts.
- The estimated amounts to be invoiced against each of the Payment
terms of Article 4.2.2 of this Schedule.
- A full description of the Scope of Work.
- Delivery times for Works.
- A detailed Project Implementation Plan.
- Any new Contract Units and their Unit Prices necessary to supply
or implement any new Scope of Work of a type essentially
different from that anticipated at the time of Contract Signature
so that existing Unit Prices cannot be applied. Full description
and justification shall be provided. The inclusion of such
Contract Units and Unit Prices in the Contract shall be dependent
on an approved Change Order.
3-5 Delivery Times
Offered delivery times in any subsequent Purchase Orders shall be
consistent with and shall not exceed those committed to in Purchase
Order No. 1 for the delivery of similar Works.
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3-6 Acceptance of Offer
The Company shall notify the Contractor in writing upon its approval
and acceptance of his offer. The approved documents shall constitute
the documents of the relevant Purchase Order.
The documents of any approved Purchase Order following Purchase Order
No. 1 shall be attached to the Contract as annexes to the relevant
Contract Schedules.
Acceptance of any offer shall not relieve the Contractor of any of his
obligations under this Contract. Any terms and conditions, which are
added expressly or implicitly in a Purchase Order shall be considered
void and have no effect.
3-7 Authorized Signatories
Purchase Orders will be approved upon signature by both Presidents of
the Company and the Contractor or their authorized representatives
thereof.
3-8 Effective Date of Purchase Order
The date of written approval by the Company shall be considered as the
Effective Date of the Purchase Order, except for Purchase Order No.l,
which shall have the Effective Date of this Contract. The overall
delivery time mentioned in the accepted offer shall then become the
relevant Implementation Period for the Purchase Order which shall
commence on the Effective Date of the Purchase Order.
3-9 Determination of Works
All Works to be supplied within the specified period of a Purchase
Order shall be determined in MOPs issued during the Implementation
Period of the Purchase Order.
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3-10 Total Purchase Order Period
Every Purchase Order shall have a Total Period stipulated from its
effective date until Final Acceptance of its related Works. The Total
Period of any Purchase Order shall not fall outside the Total Contract
Period.
3-11 Implementation Period
Every Purchase Order shall have an Implementation Period stipulated
from its Effective Date until Provisional Acceptance of its related
Works.
In no event shall any Purchase Order Implementation Period fall
outside the Contract Implementation Period.
3-12 No Obligation to Make Purchases
Following Purchase Order No. 1, there shall be no obligation on the
Company to make any further purchases nor shall there be a minimum
value on further individual Purchase Orders.
3-13 Cancellation and Termination
In case the Company decides not to make any further purchases under
the Contract the Company shall promptly give notice to the Contractor
that this Contract shall terminate on Final Acceptance of all work
under any current Purchase Order.
4 - TERMS OF PAYMENT FOR THE CONTRACTOR'S ENTITLEMENTS
4-1 After scrutinization of the amounts due, against the supplied Works
under the Contract, and certified by the Company's representative,
cheques shall be prepared and issued by the Company with the amounts
to be paid according to the payment program directly drawn on a Saudi
Bank.
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4-2 The Company shall pay the Contractor's entitlements as follows:
4-2-1 The Contractor shall invoice the Company based on Contract Unit
Prices and supplied quantities in accordance with the Contract Terms
and Conditions, and Specifications.
4-2-2 Actually supplied Works shall be invoiced as follows:
A) Imported Goods
The Contractor has the sole responsibility to match the
imported equipment with the requested (PIP) work.
Payment on Delivery
Imported goods cleared through customs shall be invoiced at
30% of their Contract value as contained in the detailed ▇▇▇▇
of Quantities (BoQ) of an approved MoP once the MoP has been
approved. The company representative will only certify that
this type of equipment is defined in the Contract and/or its
amendments.
In case of any spare parts, test equipment and any other goods
specified for delivery to designated Company warehouse only,
these shall be invoiced at 100% of their value based on a
receipt signed by the company ("Proof of Delivery")and
supported by a certificate from the Company's representative.
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Payment on Acceptance
The remaining 70% of the value of imported goods shall be
invoiced after a successful ▇▇▇ certified by the signed
Acceptance Test Report and an agreed as-built Contract Unit
List.
By the end of the Implementation Period of the relevant
Purchase Order, original shipping documents and customs
clearance documents shall be supplied for all imported goods.
B) Locally Purchased Goods
The Contractor has the sole responsibility to match the
locally purchased goods with the requested (PIP) work.
Payment on Delivery
Locally purchased goods shall be invoiced at 30% of their
contract value as contained in the detailed ▇▇▇▇ Of Quantities
(BOQ) of an approved MOP once the MOP has been approved. The
company representative will only certify that this type of
equipment is defined in the contract and/or its amendments.
In case of any spare parts, test equipment and any other goods
specified for delivery to designated Company warehouse only,
these shall be invoiced at 100% of their value based on a
receipt signed by the company ("Proof of Delivery")and
supported by a certificate from the Company's representative.
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Payment on Acceptance
The remaining 70% of the value of the locally purchased goods
shall be invoiced after a successful ▇▇▇ certified by the
signed Acceptance Test Report and an agreed as-built Contract
Unit List.
C) Installation Services
Installation services shall be invoiced after successful ▇▇▇
certified by the signed Acceptance Test Report and an agreed
as-built Contract Unit List.
D) Civil Works, Buildings, Building Works, Building and Civil
Installation and Construction Due amounts of Civil Works,
Buildings, Building Works, Building and Civil Installation and
Construction, shall be invoiced in monthly progress payments
based on the work completed at the site during the month in
accordance with the Contract and based on a certificate from
the Company's representative.
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from the Company's representative.
E) Training
Value of Training shall be invoiced upon delivery of the
training based on a certificate from the Company evidencing
the completion of the training services invoiced.
F) Technical Maintenance
Value of Technical Maintenance support shall be invoiced in
monthly installments during the first twelve (12) months of
the applicable period which shall be from the date of
Provisional Acceptance to the date of Final Acceptance. A
monthly installment shall cover an elapse of days equivalent
to one calendar month.
G) Survey, Engineering and Administration Services for
Equipment supplied by the Company
The value of Survey, Engineering and Administration services
for equipment supplied by the Company shall be invoiced upon
the approval of the related design document (MoP) supported by
a certificate from the Company's representative.
H) COM/IS System Integration
Each phase of the COM/IS integration project under Purchase
Order No. 1 shall be invoiced as follows:
1. Value of Project Definition phase shall be invoiced upon
the Company's approval of the Project Definition document
prepared by the Contractor supported by a certificate
from the Company's representative.
2. Value of Detailed Design and Development phase shall be
invoiced upon the Company's approval of the detailed
design and development document prepared by the
Contractor supported by a certificate
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from the Company's representative.
3. Value of Integration and System Acceptance phase shall be
invoiced upon the successful completion of the
Integration and System Acceptance tests as defined in the
approved Project Definition and Detailed Design and
Development documents certified by the signed Acceptance
Test Report.
I) Commercial Power Connection
The costs of connecting commercial power shall be reimbursed
to the Contractor on presentation to the Company of valid site
related invoices attaching original receipts from the relevant
power company or its appointed Contractor.
J) Lump Sums
Any lump sums included in this Contract shall not be
considered as Contract Unit Prices for payment purposes.
K) Discounts
At the end of the Implementation Period of a Purchase Order,
any outstanding accrued discounts due to the Company shall be
promptly credited to the Company.
4-2-3 Invoices
Payment of Contractor's invoices shall be made within the calendar
month following the month in which the invoice was submitted to the
Company's representative. If within such a period the invoice documents
are found not to be correct, the invoices shall be returned to the
Contractor with the reasons for the rejection stated. It is required
that invoices be issued on a site related basis where applicable.
Free of Charge items shall be invoiced as for payable items but shall
not be paid.
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4-24 Retention
Payment of Contractor's entitlements under this Article (4) shall be
subject to the following:
Company shall only pay the Contractor up to 90% of the Total Value of
the relevant Purchase Order, until the Contractor clears his tax
position with the Zakat and Income Tax Authority against all
activities. Upon presentation of a clearance certificate from the Zakat
and Income Tax Authority certifying that the Contractor has settled the
Zakat or income Tax due on Works of the relevant Purchase Order, the
Company shall pay the remaining value of Contractor's entitlements.
5- FACTORY TEST AND INSPECTION
5-1 The Company shall have the right to inspect and test examples of all
equipment, materials and instruments manufactured for the Contract
prior to shipment. The Contractor shall provide the Company or its
representatives with all the required facilities and assistance to
observe the above testing without any additional charges to the
Company. The Company shall pay the travel and expenses of their
representatives.
5-2 The Contractor shall submit to the Company the manufacturing and
shipment schedules for all equipment and/or materials at least one
month prior to the time of packing for shipment as long as the lead
time available is sufficient or such shorter period as may fit the
actual circumstances. Should the Company's representatives fail to
attend on the specified date for inspection, the Contractor shall
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carry out the relevant tests itself and proceed with shipment. The
Contractor shall provide the Company with a copy of the recorded
factory results made under its cognizance before shipment.
5-3 If the test results show that the equipment and/or materials do not
comply with the specifications, such non-complying equipment and/or
materials shall be rejected and shall not be shipped until repaired or
replaced and tested again. In such case the Contractor shall be held
liable for any resulting delay.
5-4 In all cases, the Contractor shall be responsible for the Compliance of
his equipment and materials with the Contract's specifications.
5-5 The Company and the Contractor shall conclude an agreement on the
factory test and inspection procedures within two weeks from the
Contract signing.
6- DOCUMENTATION
6-1 The Contractor shall prepare the documentation relating to all of the
project's Works (e.g. design, plans, manuals, etc) and their related
computer software and he shall maintain them in a way which secures
their safety until officially handed over to the Company.
6-2 The Contractor shall provide complete sets of the installation and O&M
manuals for the civil works and telecom systems prior to Provisional
Acceptance and according to the applicable requirements in the Project
or Generic Specifications.
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6-3 Complete plans for all civil works including those parts relating to
the new buildings, modifications of the existing buildings, shelters,
power systems, calculations of the towers' design and lighting shall be
included in separate manuals in addition to the construction and cable
installation plans.
6-4 Notwithstanding anything else stated in this Contract to the contrary,
Documentation and related software developed by the Contractor
specifically for the project shall be the sole property of the Company.
6-5 All documentation shall be provided as both hard copy and data stored
on digital storage media together with any necessary software to access
the data on either the work stations supplied under this Contract or on
the Company's existing work stations.
7 COSTS OF THE CONSUMABLES
7-1 The Contractor shall bear the costs of all consumables, such as the
water, electricity and fuel, needed during the implementation of a site
up to the date of its Provisional Acceptance.
8 SPARE PARTS
8-1 Spare parts required for normal operation and maintenance of all
Project Elements shall be included. The quantities of the various spare
parts required shall be based on the fault rates of the equipment,
repair strategy, organization, etc., and shall be dimensioned
sufficient to fulfill the requirements of the O & M activities for each
of the Project Elements after the date of
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Provisional Acceptance until Final Acceptance. In case no such
calculation can be performed, an amount equivalent to 3% of the total
value of equipment, materials and software supplied for each of the
Project Elements shall be included.
8-2 The Contractor shall, during the first two months of the Implementation
Period, finalize the dimensioning of this part of the deliveries,
supported by the required scientific calculations, and submit his
proposal to the Company for approval.
8-3 Spare parts consumed before Final Acceptance shall be replenished at no
cost to the Company.
9- TEST AND MEASUREMENT INSTRUMENTS AND SPECIAL WORK TOOLS
Test and measurement instruments and the work tools for the whole
elements of the project shall be included at the rate of 2% of the
total value of the equipment, materials and software imported from
abroad for each of the Project Elements. The Contractor shall, during
the first two months of the Implementation Period, determine the
equipment to be delivered and submit his proposal for approval by the
Company.
10- FUTURE AVAILABILITY OF SPARES
10-1 The Contractor shall guarantee the availability of the spare parts as
well as the test and measurement instrumentation and the special work
tools for the complete parts of the project and that he shall
manufacture them or their equivalent alternatives for the periods
stated in paragraph 10.2 below.
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The guarantee periods, for providing the spare parts, the instrumentation and
tools stated in paragraph 10.1 above, shall be as follows:
GUARANTEED PERIOD OF
TYPE AVAILABILITY IN YEARS
-------------------------------------------------------------------------------
Telephone exchange equipment 15
Transmission equipment 15
Power equipment 15
Fire prevention equipment 15
Alarm equipment 15
Building equipment, e.g., elevators & water pumps 15
Traditional batteries 18
Air-conditioning equipment 10
Operations software 10
Card phones 10
Terminals 7
Vehicles 7
Solar energy batteries 5
Different type of cables:
The life span duration of all type of cable
shall be 15 years except as otherwise stated
in the Contract.
NOTE: The said periods shall be effective from the date of Final
Acceptance.
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10-3 During the periods specified for the availability of the spare
parts, instrumentation and tools described in paragraph 10.2 above and
for the items so stipulated, the Contractor shall guarantee to supply
goods against any purchase order within a period not exceeding six
months from the date of the order made by the Company.
10-4 The Contractor shall provide in this Contract the method of
determining the future price of the above mentioned spare parts,
instrumentation and tools by a scientific formula with official
references for setting the said price otherwise the prices of the
Contract shall apply.
10-5 All replacement spare parts or replacement system parts shall
provide the same or equivalent functionality. The Contractor shall give
6 months notice in writing of any item, not manufactured by the
Contractor, in which production is about to cease.
11- OBTAINING PASSES AND PERMITS
The Contractor shall be responsible for obtaining all passes and
permits required by local authorities before the implementation of any
of the Contract's work. The Contractor shall bear any fees or charges
which may be required by those authorities against the issuance of such
passes or permits. The Company's role in this regard shall be
restricted providing the Contractor with every possible assistance to
facilitate the Project execution.
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12- LAWS, REGULATIONS, CUSTOMS & TRADITIONS
This Contract shall be subject to all laws, regulations, customs and
traditions prevailing in the Kingdom of Saudi Arabia. The Contractor
shall be aware of all these laws, regulations, customs and traditions
and shall not be excused for ignorance of them.
13- LIMITATION OF LIABILITY
The Contractor and its subcontractors or suppliers shall be liable for
direct damages and losses only and neither Contractor nor its
subcontractors or suppliers shall be liable for any indirect damages or
losses. The Company releases Contractor and its subcontractors and
suppliers from any such indirect damages except as may arise for third
party personal injury caused by Contractor or its subcontractor's
negligent acts or omissions. Notwithstanding any other provision of
this Contract, Contractor's total liability to the Company for all
damages and losses arising out of this Contract shall not exceed the
total Contract Value.
14- CALENDAR
The Gregorian calendar shall be used for all periods and dates referred
to in any of the Contract documents.
15- CONFIDENTIALITY
All business and technical information and data, software and related
documentation, in whatever form provided, recorded or unrecorded, which
the parties may furnish or have furnished to each other is considered
confidential and shall be treated as follows:
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a. shall be used solely for the purpose for which it was
furnished;
b. shall be treated in strict confidence and shall not be
provided to third parties;
c. shall not be reproduced, except as necessary for its
authorized use;
d. shall be returned to the other party, together with all copies
thereof, when no longer needed.
The obligations of confidentiality and restricted use are not
applicable to those portions of information that, free of any
obligation to keep confidential, were previously known to, or that fall
into the public domain without the fault of the disclosing party, or
those subject to its control, or to which the parties agree need not be
kept confidential.
16- FORCE MAJEURE AFFECTING THE IMPLEMENTATION
Neither party shall be liable for any loss, damage, delay or failure of
performance resulting from any force majeure, that is, any cause beyond
its reasonable control and which was unforeseen at Contract signature
or which is unavoidable, including acts of God, wars, invasion,
military operations, civil disturbance, earth quakes and volcanoes.
A party claiming the existence of force majeure shall notify the other
party within fifteen days of the force majeure and shall submit
evidence of its existence.
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If the force majeure delays the implementation of the Project Works for
a period not exceeding six (6) months, the implementation period shall
be extended up to a length of time resulting from the incident after
taking the actions required with the Company in accordance with the
applicable regulations. If the force majeure exists for a period of
more than six (6) months, both parties shall agree on the appropriate
measures to be taken.
17- RIGHT TO SUBSTITUTE ENHANCED PRODUCT
During the term of the Contract, telecommunications products, equipment
and software to be provided under this Contract shall be subject to
continuous modifications, upgrades and enhancements. In his performance
of the Works, the Contractor is required to substitute, where available
at the time of delivery, enhanced or upgraded products provided that
such substitute products provide, or exceed, the function to be
provided by the products identified in the Contract. The Contractor
shall also provide the Company with complete technical information
describing such enhancement, update or upgrade in the substitute
product and obtain the Company's approval for those products before
substitution at the same or less cost.
18- CONTRACT LANGUAGE
This Contract (and all its documents) shall be in both the Arabic and
English Languages. All invoices and contractual correspondence between
the parties shall be in both Arabic and English. In case of
contradiction, the Arabic version shall always prevail. All other
Contract correspondences and documents shall only be in English.
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19- ACCEPTANCE
Without prejudice to Articles (51) and (52) of the General Contract
Conditions:
19-1 Provisional Acceptance Tests (PATs) shall be carried out in respect of
each System or Part of System as the case may be.
19-2 The PATs are designed to verify that the System or Part of a System
will operate and perform in accordance with the Contract. PATs shall
also include visual inspections as necessary to verify compliance with
the Contract conditions.
19.3 The sequence and interrelation of the PATs shall be in accordance with
the Project Implementation Plan and the corresponding approved Design
documents.
19-4 The Contractor shall notify the Company in writing at the Date of
Completion, and minimum 5 working days prior to the ▇▇▇ start date,
that the System or Part of the System, as the case may be, is ready for
a complete ▇▇▇ of the System or Part of the System.
19-5 When the PATs have been performed with a successful result, the date
when all the tests were completed shall be the "▇▇▇ Completion Date".
This date shall be the date reflected in the Provisional Acceptance
Certificate (PAC).
19-6 The Contractor, witnessed by the Company and/or its Consultant, shall
carry out and complete the PATs, the result of which shall be accounted
for in a jointly signed protocol, Acceptance Test Report, designed to
clearly verify whether the PATs requirements are met or not.
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19-7 Within fifteen (15) days from completion of the PATs, the Company or
its Consultant shall give the Contractor a written or facsimile notice
stating whether or not the System or Part of System (as the case may
be), has successfully passed the tests. When the ▇▇▇ requirements are
met, the System or Part of System shall be deemed accepted.
19-8 If the System or Part of System is not accepted by the Company due to
the fact that the ▇▇▇ results verify that the System or Part of System
does not fulfill the requirements of the PATs, the above mentioned
written notice shall specify the particulars of the alleged deviation
from the PATs requirements and where the same is alleged to exist or to
have occurred. Contractor shall with all reasonable speed under the
circumstances and at his own expense remedy the deviation and the PATs
Procedure for the relevant or affected part shall, unless waived by the
Company, be repeated in accordance with the provisions of this Article
(19).
19-9 When the results of the PATs verify that the System or Part of System
operate and function in accordance with the PATs requirements, then the
System or Part of System shall be deemed to also operate and function
in accordance with the Specification unless otherwise proven.
19-10 Provisional Acceptance of the System or Part of System shall not be
refused because of minor deviations and/or shortages, which do not
prevent the System or Part of System to be put into operation (i.e.
non-service affecting items). However, this will not relieve Contractor
from his obligation to remedy said deviations without undue delay and
in no event later than three (3) months from the date of Provisional
Acceptance (PAC).
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In case the said remedying takes longer than three months the Warranty Period
and any applicable Technical Maintenance Periods shall be extended by the same
period that the rectification work was delayed. These minor deviations and
shortages shall be listed in an Outstanding Items List (OIL) and attached to the
▇▇▇ Report. An OIL Clearance Certificate shall be issued by the Contractor and
approved by the Company as soon as these outstanding items have been cleared.
19-11 If the Contractor has not received the said written or facsimile notice
from the Company or its representative stating whether or not the
System or Part of System has successfully passed the PATs, within
fifteen (15) days from completion of the PATs, the System or Part of
System shall be deemed accepted as of the last day of said period of
fifteen (15) days.
19-12 If the Company should take over or use the System or Part of System
prior to or without the above mentioned PATs, such take over or use
shall be deemed as Acceptance of the System or Part of System on that
date. Provided always that such System or Part of System is capable of
operating independently and constitutes a fully operational entity and
that non-functioning or partially functioning associated components
shall be excluded from such Acceptance. Such Acceptance shall be
verified with the satisfactory results of a later ▇▇▇ for the System or
Part of System. The requirement for a later successful ▇▇▇ shall be
waived only at the discretion of the Company. Such deemed
Acceptance shall not limit the responsibility of the Contractor to
finalize any outstanding work or remedy any deviations found.
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19-13 The Contractor shall require a signed authorization from the Company for
the specific System or Part of System before it is put into commercial service.
19-14 When according to the above, the System or Part of System is accepted or
deemed accepted, such acceptance shall be confirmed by the signature of the
Company on a PAC submitted by the Contractor. The PAC shall be signed and
returned without undue delay after Contractor's written request.
19-15 Provisional Acceptance of goods specified only for delivery to warehouse
shall occur on delivery to the Company's designated warehouse in Saudi Arabia
provided such goods are new and of merchantable quality on delivery and provided
that a receipt signed by the Company ("Proof of Delivery") has been obtained
supported by a certificate from the Company's representative. Final Acceptance
of such goods shall be deemed to occur on expiry of the twelve (12) month
Warranty period.
Definitions for this Article (19):
Provisional Acceptance Certificate (PAC): means the written
confirmation of acceptance by the Company in accordance with this
Article (19).
▇▇▇: means the test(s) to be carried out in accordance with this
Article (19) and the Generic Specification GS07.
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System: means either:
- The Hardware and Software to be supplied and installed for each new
complete SRS System which shall consist of one Central Station, the
appropriate number of Repeaters and Outstations as specified in the
relevant approved design document and all associated equipment and
works; or
- The complete COM/IS system to be supplied and installed for the SRS
Network
Part of System: means the Hardware and Software to be supplied and installed in
an existing SRS System which shall consist of the appropriate number of
Repeaters and/or Outstations as specified in the relevant approved design
document and all associated equipment and works.
Project Implementation Plan: means the time schedule agreed upon between the
Parties for the Implementation of the System or Part of System.
Implementation: means all the work performed in accordance with the Contract up
to Provisional Acceptance.
Date of Completion: means the date(s) specified in the Project Implementation
Plan and relevant Design document on which the System or Part of System, as the
case may be, shall be implemented and be notified ready for a complete ▇▇▇,
taking into account all appropriate extensions or postponements.
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20- NETWORK INTEGRATION
The Contractor shall be responsible to provide for the integration of
all equipment delivered under this Contract into the existing network
and associated systems. SRS Provisional Acceptance Certificates (PACs)
shall not be issued unless the equipment is fully integrated and
operational in the network.
The COM/IS System PAC shall be issued upon successful completion of the
COM/IS Integration and System Acceptance tests as defined in the
approved Project Definition and Detailed Design and Development
documents as certified by the signed Acceptance Test Report. If the
Integration cannot be fully implemented due to the unavailability of
the Company's COM/IS system then Provisional Acceptance shall be
granted on the basis of performing the appropriate agreed upon tests to
demonstrate that the integration requirements have been fully met.
The Contractor shall be responsible for identifying any work to be
completed by the Company or by any other Contractor which is required
to allow integration of his equipment into the network, and shall plan
and schedule his work to allow for these dependencies. The Contractor
shall ensure that the necessary coordination with other Contractors is
effected.
21- CHANGE ORDERS
Subject to Articles 43 and 44 of the General Contract Conditions, the
only valid mechanism provided between the parties for contract
amendments are Change Orders, which shall be used in the following
cases:
a. A change to the Implementation Period of a Purchase Order or
to the Total Contract Implementation Period;
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b. A change to the Total Value of a Purchase Order;
c. A new Unit Price to be introduced for work which is new and
for which it could not be reasonably anticipated that such a
Contract Unit would be required at the time of Contract
signature;
d. A change to Contract Terms and Conditions.
A Change Order shall not be approved by the Company unless it is
satisfied that it has been given, by the Contractor, complete and
accurate financial and technical information, including full technical
and contractual justification, in the contents of the Change Order such
that the cost impact on the work affected is accurately known. Change
Orders shall be submitted prior to the implementation of the related
work.
22- TITLE
Title for all goods and services supplied under the Contract shall pass
in perpetuity to the Company upon Provisional Acceptance of same.
23- CONTRACTOR'S RESPONSIBILITY FOR PLANNING, ENGINEERING AND DESIGN
23-1 Except as noted otherwise in Contract documents the Contractor shall be
responsible for engineering and design which includes site surveys,
drawings and plans, etc. This shall be subject to review and approval
by the Company and/or its Consultant before implementation. Such
approval shall not relieve the Contractor from his obligations to
implement the Works in accordance with this Contract.
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The Contractor's plans shall always be provided with good and detailed estimates
of the costs of the planned work and accumulated costs after its completion,
good technical justification, and, where necessary, good contractual
justification.
All planned work shall be for complete systems capable of being implemented
within the allowed budgets. Systems unable to be completed due to poor
planning by the Contractor within the limits set by the Contract shall not
be accepted and nor shall any payment be made for uncompleted systems.
The Contractor shall submit quarterly audits of all the work completed
(as-built) in the project with detailed and accurate information on
accumulated costs up to the end of the relevant quarter. The audits shall
also include the details and total cost of work in progress.
Work plans shall always use the latest project audit results as the baseline for
future work.
The work shall be planned efficiently in a sequential manner so that all
necessary parts of the network shall be put in place to support the next
part coming into operation.
24- PROJECT SPECIFIC DRAWINGS, DATA COLLECTION AND PLANS
Regardless of anything else contained in this Contract, the copyright
to any drawings, data collection or plans (such as but not limited to
network plans and transmission plans) produced by the Contractor
specifically for the performance of this Contract and only usable for
that purpose and excluding any
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material or part thereof which was produced prior to the signing of
this Contract without relation to this Contract by the Contractor or
any of its sub-Contractors, shall belong to the Company. It is
provided that the Company allows the Contractor the right to use, for
the Contractor's performance of this Contract, such drawings, data
collections and plans as well as any other documents of the same
nature that is in the possession of the Company.
Nothing contained in this Contract shall prevent the Company
disclosing such material mentioned above, after Provisional
Acceptance, to third parties that are to perform complementary work on
the Company's network.
25- METHOD OF PROCEDURE (MOP)
25-1 A MoP is a design document which shall contain all necessary plans and
engineering data relevant to a site's function relative to the overall
system design and site's practical construction. It shall contain a
time schedule for starting and completing the work.
25-2 A separate MoP shall be provided for each complete SRS system design
and it shall need to be submitted and approved prior to any subsystem
MoP related to it including civil works MoPs.
25-3 Any approved Method of Procedure (MoP) document shall include a priced
and detailed Contract Unit List with quantities and a total cost to do
the work. All MoPs shall contain committed dates for Provisional
Acceptance Testing of the works described therein and if not meeting
those dates the Contractor shall be subject to Article 39 of the
General Contract Conditions, Delay Penalty.
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26- LICENCES
26-1 Subject to the terms and conditions set forth in this Article (26), the
Company is hereby granted a non-exclusive, irrevocable, transferable
and restricted license to use the Software and Documentation, for the
Company's own operation and maintenance of the System or Part of System
in accordance with this Contract.
26-2 Unless otherwise stated in this Contract and except for any software
developed by the Contractor solely under this Contract which shall be
the sole property of the Company, it is understood that the Company
receives no title or ownership rights to the Software or Documentation,
and all such rights shall remain with Contractor or its suppliers.
26-3 In pursuance of the foregoing, except as provided otherwise in this
Contract, the Company shall:
26-4 only make copies of supplied software and documentation for itself
sufficient to use the works or materials supplied under this Contract;
26-5 when making permitted copies transfer to the copy/copies any copyright
or other marking on the Software or Documentation;
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26-6 not modify, de-compile, translate, adapt, arrange or error correct or
make any other alteration of the Software or Documentation;
26-7 not use the Software or Documentation for any other purpose than
permitted in this Article;
26-8 grant the Contractor the right to use and modify software solely
developed for this Contract.
26-9 The Company and any successor to the Company's title to the Hardware or
part of Hardware, shall have the right without further consent of
Contractor to transfer this license to a third party which acquires the
System or Part of System, provided any such third party agrees in
writing to abide by all the terms and conditions of this license.
26-10 The obligations of the Company under this Article (26), shall survive
the termination or expiration of this Contract for any reason.
26-11 Software means any such computer program, software module or package
or any part thereof in binary code form and included in the System
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27- WARRANTY
Without prejudice to the periods of extended warranty to be provided
for various categories of deliverables as required by the Generic
Specification, GS06, etc.:
27-1 The System Or Part Of System
27-1-1 Contractor warrants to repair, correct or replace the System or Part of
System, for a period from its Provisional Acceptance to its Final
Acceptance, if the System or Part of System would not conform to and
function and operate in accordance with the Contract conditions by
reason of defective material, design or workmanship, as appropriate.
27-2 Hardware And Spare Parts
27-2-1 Contractor shall, for a period from its Provisional Acceptance to its
Final Acceptance, at his option repair or replace, without expense to
the Company, any part of the Hardware or Spare Parts found not to be in
conformity with the Contract by reason of defective material, design or
workmanship
27-2-2 Such repairs or replacements of the Hardware or Spare Parts shall be
made without undue delay from the date the Company notifies any defect
to the Contractor in writing before Final Acceptance.
27-2-3 Any repaired or replaced Hardware or Spare Parts will be warranted for
the remainder of the original warranty period.
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Software
Contractor shall, for a period from its Provisional Acceptance to its
Final Acceptance, at his option correct or replace, without expense to
the Company, any part of Software found measurably not to function in
conformity with the Contract by reason of defective design.
27-3-2 Such corrections or replacements (by the supply of Software Updates) of
the Software shall be made without undue delay from the date the
Company notifies any defect to the Contractor in writing before its
Final Acceptance.
27-3-3 In the event of non-conformity of an Emergency character,Contractor
shall perform temporary corrections or replacements, as the case may
be, without undue delay after the Company's notification thereof to
Contractor. Definitive corrections or replacements (by the supply of
Software Updates), shall thereafter be performed in accordance with the
above.
27-3-4 Any corrected or replaced Software will be warranted for the remainder
of the original warranty period.
27-3-5 During the warranty period the implementation of corrections and/or the
implementation of replacement Software Updates shall be made by
Contractor without expense to the Company.
27-3-6 Documentation of corrected or replacement Software Updates will be
furnished without expense to the Company.
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27-3-7 For additional software, the same Software warranty shall apply as
described in this Article with the exception that the warranty shall
only apply with respect to new functions in the additional software (as
specified in the additional software specification) and that the
warranty period is calculated from the receipt by the Company of the
additional software.
27-3-8 Software Updates means corrections of the Software based on
Contractor's and users fault reports and which are issued as Software
Updates by Contractor. The Software Update shall contain the
appropriate load file, implementation instructions and user
documentation.
27-4 General
Any warranty above in this Article (27), shall apply only if:
27-4-1 The System or Part of System is used under normal conditions and in
accordance with the Documentation, information and advice furnished by
Contractor and the Training provided under this Contract
27-4-2 The Company has given Contractor notice of such defects,
non-conformities or deviations before the expiration of the applicable
warranty period
27-4-3 Such defect, non-conformity or deviation was not caused by
inter-working equipment not supplied under this Contract or any
engineering or implementation not carried out by Contractor
27-4-4 The Company has given Contractor every opportunity to inspect and
remedy such defect, non-conformity and deviation
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27-4-5 The warranty given in this Article (27), shall not apply to any failure
caused by modification of the Hardware or Software without Contractor's
written approval.
27-4-6 All transportation costs and risk of loss incurred with respect to the
repair and/or replacement of defective goods shall be borne by the
Contractor.
27-4-7 The Company undertakes to comply with Contractor's instructions
concerning disposal of defective Hardware and Software. The warranty
given in this Article (27), shall survive inspection and acceptance.
28- INTELLECTUAL PROPERTY RIGHTS INFRINGEMENT
Article 21 of the General Contract Conditions, Patent Rights and
its Possession, shall apply subject to the following:
The Contractor shall promptly, at his option and own expense,
either;
28-1 procure for the 'Company and its customer the rights for continued
use of the System, or
28-2 replace or modify the System so that it no longer infringes any
such rights, where in all cases the functionality of the replaced or
modified system shall not be substantially inferior to the originally
supplied system, or
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28-3 if such remedies are not reasonably or economically feasible,
Contractor may request the Company to return the System and refund to
the Company the purchase price, provided always:
28-4 that the System is properly used in accordance with the
Documentation and the purposes contemplated by this Contract; and
28-5 that the Company without delay informs Contractor in writing of
any claim made by reason of alleged infringement as aforesaid and
refrains from acting on account of such claim without previous approval
of Contractor; and
28-6 that the Company without delay informs Contractor in writing if
legal action is taken by any third party on account of such claim and
that Contractor shall have full authority to defend or settle the same
through its counsel; and
28-7 that Contractor is informed of all circumstances which may be of
relevance to the legal action taken and the Company refrains from all
steps in relation to the legal action taken which may prejudice
Contractor; and
28-8 that the Company gives Contractor every reasonable assistance
which may be required to settle or defend the legal action taken; and
28-9 that the infringement or alleged infringement is not arising out
of the use of the System in combination or conjunction with any other
item or the use thereof not supplied or manufactured by
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Contractor; and
that the infringement or alleged infringement is not arising out of any
modifications of the System by the Company not approved by Contractor.
29- LOSS OF SERVICE PENALTY.
If any System or Part of System fails to operate according to the
Contract between Provisional Acceptance and Final Acceptance such that
service is interrupted, and it is proven that such interruption is not
due to operational reasons or is not due to normal system or equipment
failures or reasons not under the Contractor's control, then the
Contractor shall compensate the Company at the rate:
SR 10 per day per out of service subscriber voice connection or per 64
Kb/s subscriber data connection
SR 3,750 per day per out of service 2 Mb/s end to end circuit capacity
up to a maximum of five percent (5%) of the Total Purchase Order Value.
30- WAIVER OF RIGHTS
If any rights under this Contract have not been exercised by the
Company or the Contractor then this shall not set a precedent that any
such rights shall be waived thereafter.
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31- ASSIGNMENT
The Contractor shall have no right to release this Contract or any part
thereof, or any profit or advantage as a result of it, without
obtaining the prior written approval from the Company. The Parties
agree however that, subject to the last sentence of this Article (31),
such approval shall be given in case Contractor wishes to assign this
contract or any part thereof to a subsidiary in the Kingdom of Saudi
Arabia. However, the Contractor shall fulfill all obligations and meet
all liabilities of this Contract jointly and severally with the party
to whom the Contract is released towards the Company, in the execution
of this Contract.
32- RE-EXPORT CONTROL
The Company shall not re-export any of the products supplied under this
Contract to any other country without first obtaining written consent
from the Contractor.
33- TERMINATION
Either party may terminate this Contract for any of the reasons set
forth hereunder:
33-1 Either party becomes bankrupt or insolvent, or is declared
bankrupt, or is unable to pay its creditors, or submits a petition for
insolvency or compounds with its creditors.
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33-2 If the Contractor gives or attempts to give any gift, loan, reward
or advantage whatsoever to any officer, director or employee of the
Company or any Government official or servant who has any relation
direct or indirect with the performance of this Contract.
If either party, in spite of a notice given to it by the non-breaching
party in writing, commits a substantial breach of the provisions of
this Contract.
If the breaching party fails to cure such breach, or fails to take
steps to cure such breach, then the non-breaching party may cancel the
Contract by a further notice in writing sent by fax, hand delivered or
by registered mail to the notice party address as designated in this
Contract without summons, court order or any further formality. The
consequences of such cancellation shall be:
A. The Company may call the performance guarantee if the
breaching party is the Contractor.
B. The breaching party shall be responsible to the non-
breaching party for any damages or losses subject to the terms
and conditions of this Contract.
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