Exhibit 10.12
CONTRACT
BETWEEN
FLAG ATLANTIC LIMITED
FLAG ATLANTIC USA LIMITED
FLAG ATLANTIC FRANCE SARL
FLAG ATLANTIC UK LIMITED
AND
ALCATEL SUBMARINE NETWORKS
ALCATEL SUBMARINE NETWORKS INC.
ALCATEL SUBMARINE NETWORKS LIMITED
------------------------------
Confidential Treatment has been requested with respect to the portions of
this agreement marked with three asterisks (***) and the redacted material
has been filed separately with the Securities and Exchange Commission.
TABLE OF CONTENTS
1 DEFINITIONS...........................................................4
2 PROVISION OF THE SYSTEM...............................................5
3 VESTING AND WARRANTY OF TITLE.........................................6
4 INSPECTION............................................................7
5 DELIVERY, PACKAGING, CUSTOMS CLEARANCE AND WASTE DISPOSAL.............8
6 ACCEPTANCE PROCEDURES.................................................8
7 LIQUIDATED DAMAGES FOR DELAY IN PERFORMANCE..........................10
8 INJURY TO PERSONS AND DAMAGE TO PROPERTY.............................11
9 DAMAGE TO THE SYSTEM AND THE EQUIPMENT...............................11
10 LOSS DUE TO ACTS OF PURCHASER........................................12
11 OVERALL RESPONSIBILITY...............................................12
12 WARRANTIES...........................................................13
13 SUPPLIER SUPPORT.....................................................16
14 FORCE MAJEURE........................................................16
15 SUSPENSION OF WORK...................................................17
16 CHANGES OR ADDITIONAL WORK...........................................18
17 TERMINATION FOR DEFAULT..............................................18
18 TERMINATION BY NOTICE................................................19
19 SAFEGUARDING INFORMATION AND TECHNOLOGY..............................22
20 INFRINGEMENT.........................................................22
21 SOFTWARE.............................................................23
22 PAYMENT..............................................................24
23 KEEPING OF BOOKS.....................................................26
24 INSURANCE............................................................27
25 AGENTS AND REPRESENTATIVES OF THE PURCHASER..........................31
26 REMOVAL OF PERSONS EMPLOYED ON CONTRACT..............................31
27 SEVERABILITY.........................................................31
28 SUCCESSORS BOUND.....................................................31
29 RELATIONSHIP OF THE PARTIES TO EACH OTHER............................31
30 RESPONSIBILITY FOR OBTAINING PERMITS AND LOCAL LAWS..................31
31 CONSENTS.............................................................32
32 LIMITATION OF LIABILITY..............................................33
33 ALLOCATION OF DUTIES.................................................33
34 NOTICES..............................................................33
35 CAPTIONS.............................................................34
36 LAW AND ARBITRATION..................................................34
37 PRECEDENCE...........................................................35
38 WAIVER...............................................................35
39 RECOVERY OF SUMS DUE.................................................35
40 WATCHING, LIGHTING AND PROTECTION OF SITE............................35
41 PROVISION OF ANCILLARY APPARATUS.....................................35
42 DIARY AND REPORTING..................................................35
43 PROPERTY OF THE PURCHASER............................................36
44 SERVICES RENDERED BY THE PURCHASER...................................37
45 FACILITIES FOR OTHER WORKS...........................................37
46 PUBLICITY............................................................37
47 ENTIRE CONTRACT......................................................37
48 LETTER OF PERFORMANCE GUARANTEE, GUARANTORS..........................38
49 CONTRACT EFFECTIVENESS...............................................38
50 CORRUPT PRACTICES....................................................39
51 SAFETY...............................................................39
Annexes: 1 - Price Schedule
2 - Schedule of Progress Payments
3 - Plan of Work
4 - Technical Specification
5 - Confidentiality Agreement
0 - Xxxx Xxxx Xxxxxxx
0 - Xxx Xxxxx 6 Definition
THIS CONTRACT, MADE AND ENTERED INTO THIS 20TH DAY OF SEPTEMBER, 1999.
BETWEEN:
FLAG Atlantic Limited, whose registered office is at The Emporium
Building, 69 Front Street-4th Floor, Xxxxxxxx HM12, Bermuda.
FLAG Atlantic USA Limited, whose registered office is at 9 East
Loockerman Street Dover, Delaware USA.
FLAG Atlantic France Sarl, whose registered office is at 00 xxx xx
Xxxxxxxx Xxxxx-Xxxxxx 00000 Xxxxx Xxxxxx.
FLAG Atlantic UK Limited, whose registered office is at 000 Xxxxx
Xxxxxx, Xxxxxx X0X 0XX XX, hereinafter called the "Purchaser"
AND:
Alcatel Submarine Networks, whose registered office is at 00 xxxxxx xx
xx Xxxxxxx 00000 Xxxxxxxx, Xxxxxx.
Alcatel Submarine Networks Inc., whose registered office is at 00000
Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxx Xxxxxx XXX.
Alcatel Submarine Networks Limited, whose registered office is at
Xxxxxxxxxxxx Xxx, Xxxxxxxxx, Xxxxxx XX00 OAG UK.
hereinafter called the "Supplier" and, together with the Purchaser, each a
"Party" and collectively, the "Parties".
WHEREAS, the Purchaser proposes to provide an integrated optical fibre cable
system linking North America and Europe (hereinafter called the "FLAG Atlantic
Fibre Optic Cable System"); and
WHEREAS this Contract will supercede the contract for a FLAG Atlantic-1 Fibre
Optic Cable System signed on 12 January 1999, between FLAG Atlantic Limited and
Alcatel Submarine Networks; and
WHEREAS the FLAG Atlantic Fibre Optic Cable System is to be as described in the
Technical Specification, Annex 4, forming part of this Contract; and
WHEREAS, the Supplier has been selected to engineer, provide, install, test,
commission and warrant the System as defined in Article 1 hereof; and
WHEREAS, the Purchaser is authorised to enter into this Contract with the
Supplier; and
WHEREAS, the Parties to this Contract now desire to define the terms and
conditions upon which the System will be engineered, provided, installed,
tested, commissioned and warranted by the Supplier.
NOW, THEREFORE, the Parties hereto, in consideration of the mutual covenants
herein expressed, covenant and agree with each other as follows:
Page 3
1 DEFINITIONS
The following definitions and those contained in the Annexes shall
apply throughout this Contract:
1.1 "Ancillary Apparatus" means all materials, tools, plant,
appliances and other things which are for the time being on
the Site for use or otherwise in connection with the Work but
which are not intended for incorporation in the System.
1.2 "Commissioning Report" means the report provided by the
Supplier to the Purchaser following system commissioning which
is part of the acceptance handbook.
1.3 "Contract Sum" means the price payable for the full and proper
performance of this Contract, including any and all Contract
Variations, in accordance with these Terms and Conditions. The
breakdown of the Contract Sum is included in Annex 1 hereof.
The Contract Sum is for DDU (Incoterms 1990) delivery
conditions.
1.4 "Contract Variation(s)" means any modification to this
Contract, consisting of additions, deletions or changes hereto
which may affect either the Contract Sum, the Plan of Work,
the Technical Specification or any other provision of this
Contract and which shall be the object of a formal amendment
to this Contract executed by both Parties hereto.
1.5 "Design Life" means that period of time extending for a period
of twenty-five (25) years from the date of RFPA hereunder for
the System.
1.6 "Equipment" means all materials, equipment and things
including Software supplied or procured or to be supplied or
procured by the Supplier for incorporation in the System and
includes all spares.
1.7 "Factory Release Certificate" or "Release Certificate" means a
certificate confirming the Purchaser's acceptance of an item
and indicating clearance for billing and/or dispatch to the
designated Site.
1.8 "Laying Report" means a report by the Supplier to the
Purchaser following each marine operation.
1.9 "Phase" means each of Phase 1 and Phase 2as described in
Annex 4.
1.10 "Plan of Work" means the detailed programme of manufacturing,
delivery, installation, testing and commissioning of the
System contained in Annex 3 hereof which the Supplier has
agreed to implement. A more detailed project implementation
plan shall be provided to the Purchaser by the Supplier and
agreed between the Parties within 30 days from the date of
signature hereof.
1.11 "Quality Assurance Procedures" means all procedures referred
in the Supplier's QA Manual including qualification,
certification and manufacturing test and acceptance procedures
reviewed and accepted by the Purchaser.
1.12 "Ready for Provisional Acceptance (RFPA)" means the date on
which a Certificate of Provisional Acceptance is issued
pursuant to the Terms and Conditions of this Contract.
Page 4
1.13 "Site(s)" means the buildings and/or land and/or other places
allocated to the Supplier by the Purchaser for the purposes of
this Contract.
1.14 "Software" means all programs, data, source code, object code,
documentation and operating systems, whether in writing, in
firmware, or in any other form, which are necessary for the
purposes of the System; including documentation, any support
tools which are not commercially available, and data connected
with the development and support as well as any upgrade or
enhancement thereto that may be required under the warranty
provisions hereof.
1.15 "Supplier's Premises" means any place or location including
any vessel where the Supplier or any of its sub-contractors
carries out or performs in whole or in part its obligations
under this Contract, other than Sites.
1.16 "System" means the whole of the submerged plant and associated
terminal equipment of the FLAG Atlantic Fibre Optic Cable
System provided between and among, and including the System
Interfaces in, the cable stations at:
Lands End, Long Island north shore, Long Island south shore
and St Brieuc.
The System (including the Phases) is more specifically defined
in the Technical Specification, Annex 4 hereof.
1.17 "System Interface" means the nominal STM-4 (1x1 protected)
digital Input/output ports on the digital distribution frame
where the System connects with other transmission facilities
or equipment.
1.18 "Unusually Severe Weather Conditions" means weather that is
worse than Sea State 6. Sea State 6 is as defined by the chart
shown in Annex 7.
1.19 "Warranty Period" has the meaning set forth in Article 12.
1.20 "Work" means all work set out in the Plan of Work which is
necessary to be carried out in the performance of the
Supplier's obligations under this Contract, and includes the
supply of all Equipment necessary for the provision of the
System.
2 PROVISION OF THE SYSTEM
2.1 The Supplier agrees to develop, engineer, provide, install,
test and commission, or cause to be developed, engineered,
provided, installed, tested and commissioned, and to warrant
the System as well as to carry out and complete the route
survey in accordance with this Contract which includes the
Price Schedule contained in Annex 1, the Schedule of Progress
Payments contained in Annex 2, the Plan of Work contained in
Annex 3, the Technical Specification contained in Annex 4, the
Confidentiality Agreement contained in Annex 5 and the Long
Term support contained in Annex 6.
2.2 The Supplier shall not, without prior consent of the
Purchaser, such consent not to be unreasonably withheld,
assign this Contract or sub-contract any significant part of
the Work, or assign, mortgage, charge or encumber any benefit
whatsoever arising or which may arise under this Contract. In
any event, the Supplier shall not
Page 5
be relieved of the responsibility under this Contract for such
parts of the Work as are sub-contracted and the Supplier shall
be responsible and liable for the acts or defaults of any
sub-contractor or their employees, servants and agents, as
fully as if they were the acts or defaults of the Supplier or
the Supplier's employees, servants and agents. The Supplier
shall ensure that any sub-contracts entered into by the
Supplier shall contain such provisions of this Contract as
should be made applicable to such sub-contracts. Without
limiting the generality of the foregoing, the Purchaser shall
have the right to approve all vessels employed in the
performance of the Work.
2.3 The Purchaser shall have the option to nominate the marine
subcontractor in accordance with the terms and conditions of
this contract to perform the marine installation, together
with defined scope of work and price . In the event of such
nomination ASN shall enter into negotiations, in good faith,
to agree terms, including but not limited to contract terms
and schedule. In the event that terms cannot be agreed, which
as a minimum shall be a flowdown of the head contract terms
and at prices agreed with the Purchaser, within a reasonable
time, then the Purchaser shall have the right to nominate
another subcontractor or give the Supplier the option to
appoint a subcontractor of their own choice. The Parties shall
co-operate with each other to ensure timely agreement of the
appointment of the marine installer.
2.4 The Purchaser has the right, at its discretion, to attend or
participate in any activity of the Work. For this purpose, the
Supplier shall provide, or cause to be provided,
accommodation, food and communications facilities for two (2)
Purchaser representatives aboard any vessel and offices,
supplies and communication facilities on all other sites. Such
attendance or participation on the part of the Purchaser shall
not relieve the Supplier from its obligation to carry out and
complete the Work in accordance with the provisions of this
Contract.
3 VESTING AND WARRANTY OF TITLE
3.1 Except for Software, which is subject to Article 21, title
(free and clear of all liens other than those deriving through
or from the Purchaser) to any Equipment provided by the
Supplier for incorporation in or attachment to the System
shall pass to and vest in the Purchaser upon completion of the
manufacture of said Equipment or part thereof and payment
therefor, as set out in Article 22.1.2. Title (free and clear
of all liens other than those deriving through or from the
Purchaser) to Equipment and to each part of the System shall
otherwise pass upon issuance of a Certificate of Provisional
Acceptance or a Certificate of Commercial Acceptance covering
such Equipment and such part of the System as provided in
Article 6, as the case may be. The Supplier shall keep records
to identify Equipment where title has passed to the Purchaser,
and shall afford the Purchaser the right to review such
records.
3.2 Upon transfer of title to the Purchaser of any part of the
System, and of any Equipment furnished by the Supplier or its
sub-contractors, the Supplier warrants that such part of the
System, and such Equipment furnished by the Supplier or its
sub-contractors hereunder, are free from claims liens,
encumbrances and security interests arising by and through the
Supplier or such sub-contractors but not otherwise. For any
part of the System or Equipment, title to which has been
transferred to the Purchaser prior to the issuance of a
Certificate of Provisional Acceptance or a Certificate of
Commercial Acceptance covering such part of the
Page 6
System or such Equipment, as relevant, is issued, the Supplier
warrants that upon issuance of such certificate for part of
the System and/or such Equipment, as relevant, is free from
claims, liens, encumbrances and security interests arising by
and through the Supplier or such sub-contractors but not
otherwise.
4 INSPECTION
4.1 The Purchaser shall at all times have full and free access to
the Supplier's Premises for the purposes of inspection; and
the Supplier shall afford all such reasonable accommodation
and facilities including equipment, materials and labour for
such purposes.
4.2 To the extent required by the Purchaser, the Supplier shall
assist the Purchaser to carry out the following inspection
activities:
4.2.1 to audit the Supplier's quality assurance procedures
and their application to the work carried out under
this Contract, including without limitation,
manufacture, development, and raw materials and
components provision; and
4.2.2 to inspect all parts of the Equipment including the
process of manufacture in all its stages, the
examining and testing of every article and the
material used in the manufacture thereof and the
examining of the Supplier's testing procedures and
the Supplier's books and records relating to the
manufacture, inspection and testing of the Equipment
and to any other service to be rendered under this
Contract, to permit the Purchaser to gain assurance
that the quality is sufficient to meet the
requirements of the Technical Specification, Annex 4.
4.3 At any time during manufacture and installation, if any part
of the Work or the Equipment does not, or will not, comply
with this Contract, the Purchaser may reject the same by
notice in writing. Upon rejection, the Supplier shall
forthwith at its own expense rectify the non-compliance in
accordance with any directions of the Purchaser and no charges
shall be made by the Supplier in respect thereof.
4.4 The Supplier shall secure rights of access for the Purchaser
to the premises of all its sub-contractors.
4.5 No part of the Equipment shall be shipped until a Release
Certificate has been issued for it in accordance with Annex 10
of Section 1 to Annex 4.
4.6 The release of parts of the Equipment in accordance with
Article 4.5 above shall not in any way prejudice any right or
remedy which the Purchaser may have against the Supplier, or
relieve the Supplier of any of its responsibilities under this
Contract.
4.7 Any expression of satisfaction made by or on behalf of the
Purchaser in respect of any aspect of the Work, carried out or
proposed by the Supplier, shall not relieve the Supplier of
any of its responsibilities under this Contract.
Page 7
5 DELIVERY, PACKAGING, CUSTOMS CLEARANCE AND WASTE DISPOSAL
5.1 The Supplier shall at its own expense and its own
responsibility carry out all loading and unloading of the
Equipment, and its transportation to the Sites and to the
nominated storage premises for the spare cable and repeaters,
which will be indicated prior to shipment by the Purchaser.
5.2 The Supplier shall be responsible for supplying packaging for
the Equipment. This packaging must be suitable for the safe
transportation of the Equipment by land, sea or air as
appropriate.
5.3 The Supplier shall be responsible for performing all import
formalities for and on behalf of the Purchaser and for paying
VAT, customs duties or other levies and duties due to such
formalities, to the relevant authorities on behalf of and for
the Purchaser.
5.4 The Supplier shall be responsible to dispose of all waste
materials in accordance with any local or national
environmental and/or other regulations. The Supplier shall
keep the Site(s) free from waste materials or rubbish caused
by the performance of the Work or its employees and upon
completion of the Work the Supplier shall leave the Site(s) in
a clean and orderly condition.
5.5 Customs declarations shall be made for and on behalf of the
Purchaser who agrees to be or designate the Importer of
Record.
6 ACCEPTANCE PROCEDURES
6.1 General
6.1.1 All references to test periods in this Article and
all references to tests shall be to the test periods
and tests defined in, Annex 10 of Section 1 to Annex
4 hereof, respectively.
6.2 Acceptance Procedures
The System will be accepted as described in the following articles.
6.2.1 PROVISIONAL ACCEPTANCE
6.2.1.1 The System, Phase 1 and Phase 2 shall be
provisionally accepted and a certificate
therefor promptly issued when:
6.2.1.1.1 the commission results of Annex 10
of Section 1 to Annex 4 hereof
indicate conformance of the
relevant Phase ; and
6.2.1.1.2 in the case of the System, the
Supplier has carried out the Work
required by this Contract (other
than minor deficiencies, which
will not affect the operation and
maintenance of the System in
accordance with Annex 4).
Page 8
6.2.1.1.3 The Certificate of Provisional
Acceptance shall bear the actual
date the System or relevant Phase,
as appropriate, is Ready for
Provisional Acceptance, which
shall be the date when
Articles 6.2.1.1.1 and 6.2.1.1.2
have been satisfied and may
contain a written list of any
outstanding items required by
this Contract which do not affect
the operation and maintenance of
the System or relevant Phase, as
applicable, in accordance with
Annex 4. The Supplier shall remedy
such items in accordance with a
program to be mutually agreed upon
at that time.
6.2.1.2 In the event that a Certificate of
Commercial Acceptance under Article 6.2.3
hereof is issued, the relevant Phase, as
applicable, must conform fully to Annex 4,
as indicated by the satisfactory completion
of tests in accordance with, Annex 10 of
Section 1 to Annex 4 hereof before a
Certificate of Provisional Acceptance is
issued. If the test results indicate that
the relevant Phase conforms to Annex 4, the
relevant Phase shall be provisionally
accepted. Promptly thereafter, the Purchaser
may issue a Certificate of Provisional
Acceptance.
6.2.1.3 Unless title has already passed to the
Purchaser, title to the relevant Phase or
the System, as applicable, shall pass to the
Purchaser when the Certificate of
Provisional Acceptance is issued.
6.2.2 FINAL ACCEPTANCE
The Purchaser shall issue a Certificate of Final Acceptance
after the expiration of the Supplier's Warranty Period
provided that, at the expiration of the Supplier's Warranty
Period, the System conforms fully to Annex 4 or such other
performance requirements which may have been agreed between
the Purchaser and the Supplier. Final Acceptance will be
based upon the results of the Final Acceptance Tests
conducted by the end of the Supplier's Warranty Period or,
if the Purchaser decides not to perform Final Acceptance
Tests, a Certificate of Final Acceptance shall be granted
promptly following the end of the Supplier's Warranty
Period. The issuance of the Certificate of Final Acceptance
will not be unreasonably withheld or delayed, but in the
event that a pattern of failure or pattern of degradation
develops that is likely to cause the System to fail to meet
the requirements of Annex 4 or such other performance
requirements which may have been agreed between the
Purchaser and the Supplier to cover the Design Life, Final
Acceptance may be withheld until it can be reasonably
demonstrated that such pattern of failures or pattern of
degradation will not continue and the Supplier shall
promptly take all reasonable steps to that effect.
6.2.3 COMMERCIAL ACCEPTANCE
6.2.3.1 In the event that the relevant Phase does
not meet the requirements of Article 6.2.1
for the issuance of a Certificate of
Page 9
Provisional Acceptance, but the relevant
Phase is nevertheless acceptable for use by
the Purchaser, then the Purchaser may, with
the agreement of the Supplier, issue a
Certificate of Commercial Acceptance for the
relevant Phase.
6.2.3.2 The Certificate of Commercial Acceptance
will contain a list of outstanding work
items on which corrective action will be
expected to be undertaken in order to place
the relevant Phase in conformity with Annex
4.
6.2.3.3 When the Certificate of Commercial
Acceptance is issued, title to the relevant
Phase, as applicable, and responsibility for
maintenance thereof shall pass to the
Purchaser, if such responsibility has not
already passed. The Supplier shall remain
responsible for any damage or loss to the
System occurring as a result of the
negligent or intentional acts or omissions
of the Supplier, its agents or
sub-contractors.
6.2.3.4 The issuance of a Certificate of Commercial
Acceptance shall not constitute a waiver of
the Supplier's obligation to provide the
relevant Phase in compliance with the
requirements of Annex 4. In the event that
prior to RFPA for the relevant Phase the
performance of the part of the System that
was acceptable deteriorates from the
performance established at the time of
Commercial Acceptance, the Supplier shall be
responsible for re-establishing promptly
performance of such part to at least the
level of performance at the time of
Commercial Acceptance and bearing all costs
of those corrective actions.
6.2.3.5 Following the issuance of a Certificate of
Commercial Acceptance, the Supplier shall as
soon as practicable remedy all outstanding
work items so as to allow tests to be
conducted in accordance with, Annex 10 of
Section 1 to Annex 4 hereof.
7 LIQUIDATED DAMAGES FOR DELAY IN PERFORMANCE
7.1 If the RFPA for any Phase does not occur by the applicable
date defined below or any extension thereto allowed or agreed
to by the Purchaser hereunder, then and in such case the
Supplier shall pay to the Purchaser as liquidated damages for
delay in performance a sum calculated as follows per 24 hour
period or part thereof and subject to the maximum set out in
Article 7.2.
--------------------- ------------------------ -------------------------------------------- -----------------
Delayed Work RFPA Date LD Base LD rate
--------------------- ------------------------ -------------------------------------------- -----------------
Phase 1 31 March 2001 Contract Sum for Phase 1 ("CS1") 0.05%
*CS1/day
--------------------- ------------------------ -------------------------------------------- -----------------
Phase 2 30 June 2001 Contract Sum ("CS") 0.05%
*CS/day
--------------------- ------------------------ -------------------------------------------- -----------------
--------------------- ------------------------ -------------------------------------------- -----------------
Page 10
N.B. Liquidated damages cannot be paid for delay of more than one Phase at
the same time. In the event more than one Phase is delayed payment will
be at the higher applicable base.
7.2 Liquidated damages for delay in performance pursuant to this
Article 7 shall not in any circumstances exceed 10% of the
Contract Sum.
7.3 The right of the Purchaser to recover liquidated damages for
delay in performance as provided in Articles 7.1 and 7.2 above
shall not be waived by any concession granted or certificate
given or payment made to the Supplier.
7.4 Payment of liquidated damages shall be in full satisfaction of
the Supplier's liability for delay.
8 INJURY TO PERSONS AND DAMAGE TO PROPERTY
8.1 The Supplier assumes responsibility for, and shall indemnify
and save the Purchaser harmless from, any and all claims,
losses, expenses and damages for injuries to or death of any
persons including the employees of the Supplier and those of
its sub-contractors or agents and the employees of the
Purchaser, and for damage to property except as provided in
Article 9 (but excluding consequential, special or indirect
damages such as those arising as a result of interruption of
telecommunications services provided by the Purchaser, its
representatives, agents, lessees, customers and
correspondents), where such injuries, deaths, damages, claims,
losses and/or expenses result from the negligent or
intentional acts or omissions of the Supplier, its
sub-contractors, or agents in the provision or construction by
the Supplier, its sub-contractors or agents, of the System.
The Supplier in any case assumes responsibility for, and shall
indemnify and save the Purchaser harmless from, any and all
claims for injuries to or death of any of the employees of the
Supplier and those of its sub-contractors or agents and for
damage to property of such employees or of the Supplier, its
sub-contractor or agents.
8.2 In the event of any claim being made or action brought against
the Purchaser arising out of the matters referred to in this
Article the Supplier shall be promptly notified thereof, and
may at its own expense conduct all negotiations for the
settlement of the same and any litigation that may arise
therefrom. The Purchaser shall not, unless and until the
Supplier or its Insurers shall have failed, within a
reasonable period of time but in any event no more than 30
days after any such action, to take over or diligently carry
on the conduct of the negotiations or litigation, make any
admission which might be prejudicial thereto. The Purchaser
shall, at the request of the Supplier, afford all available
assistance for the purpose of contesting any such claim or
action and shall be repaid by the Supplier any expenses
incurred in so doing.
9 DAMAGE TO THE SYSTEM AND THE EQUIPMENT
9.1 Notwithstanding the transfer of title to the Purchaser in
accordance with Article 3, the Supplier assumes responsibility
for all damage to or loss of the Equipment up to the date of
the Certificate of Provisional Acceptance or Certificate of
Commercial Acceptance, whichever is the earlier, for such
Equipment.
Page 11
9.2 The Supplier shall, with all possible speed, repair or replace
any such loss or damage and notwithstanding such loss or
damage the Supplier shall proceed with the performance of the
Work and completion thereof in accordance with this Contract.
The cost of such repair or replacement shall be at the expense
of the Supplier, save that the Purchaser shall be liable to
the extent that such loss or damage results from the
negligence or default of employees, agents, or contractors
(other than the Supplier and the Supplier's employees, agents
or sub-contractors) of the Purchaser acting in the course of
their employment as such.
9.3
9.3.1 Where any such loss or damage is caused by a third
party to a part of any Equipment which, although
vested in the Purchaser, remains at the risk of the
Supplier, the Purchaser shall, on demand, assign to
the Supplier in writing the benefits of any right or
remedy which the Purchaser may have or allege to have
against such third party, whether in contract, tort
or otherwise, arising out of such loss or damage, in
order that the Supplier may initiate proceedings
against such third party in its own name.
9.3.2 The Supplier agrees to fully indemnify the Purchaser
against all actions, costs, claims, demands, charges,
expenses or losses which the Purchaser may incur or
for which it may become liable, arising from such
assignment or from any proceedings brought by the
Supplier arising therefrom.
10 LOSS DUE TO ACTS OF PURCHASER
10.1 The Supplier shall not be responsible for any loss, damage,
delay or failure of performance resulting directly or
indirectly from the acts or failure to act of the Purchaser,
not requested by the Supplier.
10.2 If any such loss, damage, delay or failure causes an increase
in the cost of performance or the time required for
performance of any of the Supplier's duties of obligations
under this Contract, the Supplier shall be entitled to an
equitable adjustment in the time for completion of the Work
hereunder and to an equitable adjustment in the Contract Sum
provided that the increased cost is not recoverable from
insurance proceeds. The Supplier shall use its reasonable best
efforts to provide all necessary documentation required to
fully substantiate and support any claim pursuant to the
foregoing and shall use its reasonable best efforts to
minimise the effect on the Contract Sum and the time for
completion of the Work.
10.3 The Supplier shall inform the Purchaser promptly of any
occurrence covered under this Article 10.
11 OVERALL RESPONSIBILITY
11.1 The Supplier shall be held by the acceptance of this Contract
to approve of the System in the whole and in detail and shall
accept responsibility for the satisfactory performance of the
System on completion of the whole process of manufacture,
supply and installation thereof and the Supplier shall remain
responsible for the execution of this Contract, for the
overall working of the System and for its guarantee.
Page 12
11.2 If the Supplier is of the opinion that any part of the Work
undertaken by the Purchaser would adversely affect the
Supplier's ability to execute this Contract, whether as a
result of the negligence or default of the Purchaser or for
any other reason, the Supplier shall immediately notify the
Purchaser in writing. Such notice shall be supported by the
Supplier's reasons for so opining.
11.3 The Supplier shall only be relieved for time and cost under
this Article if the Purchaser has not taken appropriate action
within a reasonable time in response to a notification from
the Supplier in accordance with Article 11.2.
11.4 The Supplier shall be solely responsible for the design of the
System and for the adequacy thereof and shall not claim any
additional payment nor be relieved from any obligation imposed
on it by this Contract on grounds of misunderstanding or
incorrect or insufficient information received from and/or
supplied by the Purchaser on any matter whatsoever related to
this Contract.
11.5 The Supplier's responsibility for the design of the System
shall not in any way be diminished nor shall its design
approach be restricted or limited by the Purchaser's
acceptance of the Supplier's guidance or recommendations as to
engineering standards and design specifications or by the
Purchaser's suggestions or recommendations on any aspect of
the said design.
11.6 If in the opinion of either Party any part of the Work as
detailed in the Plan of Work is, or is likely to be, delayed
(including any development or qualification being undertaken)
then the Parties shall meet in order to agree a work around
plan in order to assure the timely completion of the Work. If
the delay is attributable to the Supplier then any agreed work
around plan shall be at the Suppliers cost.
12 WARRANTIES
12.1 The Supplier warrants that the System shall be designed so
that (i) the performance of the System shall be in accordance
with the Technical Specification, Annex 4 for the Design Life
and (ii) during the Design Life, no pattern of failure or
pattern of degradation shall develop that is likely to cause
the System to fail to meet the requirements of Annex 4 (or
such other performance requirements which may have been agreed
between the Purchaser and the Supplier) over the Design Life
(such warranty hereinafter called the "Design Life Warranty").
For the purpose of this Contract the warranty period
("Warranty Period") for each Phase shall commence at RFPA of
the relevant Phase and continue for a period of two (2) years
for terminal equipment and five (5) years for submerged plant
from the RFPA of Phase 2 .
The Supplier in addition warrants that during the Warranty
Period the System, including the spares set forth in Annex 1,
shall conform fully to the performance requirements set forth
in the Technical Specification, Annex 4, or such other
performance requirements mutually agreed upon as acceptable by
the Supplier and the Purchaser (hereinafter called the
"Defects Warranty"). However, the Warranty Period of any items
not provided or requiring repair or replacement at the date of
RFPA of Phase 2 shall start from the date(s) such items are
provisionally accepted by the Purchaser, if later than RFPA of
Phase 2.
Page 13
Ships costs associated with repairs to the submerged plant in
years 3 through 5 shall be to the Purchaser's account.
12.2 During the Warranty Period for the relevant item, the
Purchaser may elect, at its sole option, to undertake the
following repairs which are covered by the Defects Warranty:
12.2.1 System repairs, involving the repair of cable or the
replacement of cable and/or repeaters and branching
units, whether at-sea or on-land provided that such
repairs are carried out in accordance with the
Supplier's declared procedures which will be detailed
and provided in the relevant Supplier's maintenance
handbook or, at the option of the Purchaser, in
accordance with other procedures which have been
approved by the Supplier; and
12.2.2 The substitution of spare cards in cable station
equipment, provided that such substitutions are
carried out in accordance with the Supplier's
declared procedures which will be detailed and
provided in the relevant Supplier's maintenance
handbook or, at the option of the Purchaser, in
accordance with other procedures which have been
approved by the Supplier.
12.2.3 Except as otherwise provided in the last sentence of
Article 12.1, the Supplier shall reimburse the
Purchaser for the cost of such repairs, subject only
to the limitation of liability specified in Article
32. For the purpose of this provision, the cost of
repair shall include, but not be limited to, the cost
of any additional equipment necessary to effect the
repair, the cost of making the repair, including all
costs of the cable repair ship(s) that may be
required to make the repair, the cost of re-burying
the portion of the System that was previously buried,
the cost of labour and engineering assistance
required to make the repair, and all associated
costs, such as, but not limited to, shipping,
permits, customs duties and taxes. To the extent that
the Purchaser uses its spare equipment in making the
repair, the Supplier shall replace, in kind, such
spare equipment used by the Purchaser to effect such
repair. The replacement of such spare equipment shall
be made at a time mutually agreed to by the Purchaser
and the Supplier, but in any event no later than the
end of the period indicated in Annex 6.
12.2.4 Any equipment that is discovered to be defective or
faulty and is recovered during a Defects Warranty
repair by the Purchaser shall be retrieved by the
Supplier.
12.2.5 The Supplier shall be entitled to have a
representative present on board ship to observe
at-sea repairs.
12.3
12.3.1 The Supplier shall perform all warranty repairs other
than those that the Purchaser elects to perform
pursuant to Article 12.2. Except as otherwise
provided in the last sentence of Article 12.1, the
Supplier shall bear the costs of each such repair
required during the Warranty Period subject only to
the limitation of liability specified in Article 32.
For the purposes of this provision, the cost of
repair shall include, but not be
Page 14
limited to, the cost of any component, equipment or
materials requiring replacement, the cost of any
additional equipment necessary to effect the repair,
the cost of making the repair, and including all
costs of cable repair ships that may be required to
make the repair, the cost of re burying the portion
of the system that was previously buried, the cost of
labour and engineering assistance required to make
the repair, and all associated costs, such as, but
not limited to, shipping, permits, customs duties and
taxes.
12.3.2 The timing and method of repair shall be agreed
between the Parties and the Supplier shall effect all
such warranty repairs through the use of repair
materials supplied by it. However, the Supplier may
use, with the agreement of the Purchaser, the
materials needed to effect a repair from the
Purchaser's available spare materials. The Supplier
shall replace, in kind, such materials supplied from
the Purchaser's spare materials. The replacement of
such materials shall be made at a time mutually
agreed by the Purchasers and the Supplier, but in any
event not later than the end of the period indicated
in Annex 6.
12.3.3 The Supplier shall make every reasonable effort to
make all such warranty repairs to the System to
minimise the period of time that the FLAG Atlantic
Fibre Optic Cable System is out-of-service for
testing and repair. In the event that the Supplier
fails to make the repair promptly or to make every
reasonable effort to minimise the period of time that
the FLAG Atlantic Fibre Optic Cable System is
out-of-service for repair, the Purchaser may repair
the System and collect the full costs of such repair
from the Supplier. The Purchaser agrees to co-operate
with the Supplier to facilitate the Supplier's repair
activity.
12.4
12.4.1 All materials used to repair the System, which are
not supplied from the Purchaser's spare stock, shall
be warranted:
12.4.1.1 for a period of two (2) years for terminal
equipment and five (5) years for submerged
plant from the date of repair or
replacement; or
12.4.1.2 from the date of repair or replacement until
a date four (4) years for terminal equipment
and seven (7) years for submerged plant from
the date of issuance of the Certificate of
Provisional Acceptance for the System,
whichever period is completed first.
12.4.1.3 All materials supplied to replenish the
Purchaser's spare stock, in accordance with
Article 12.2.3 or 12.3.2, shall be
warranted:
12.4.1.4 for a period of two (2) years for terminal
equipment and five (5) years for submerged
plant from the date of repair or
replacement; or
12.4.1.5 from the date of repair or replacement until
a date four (4) years for terminal equipment
and seven (7) years for submerged plant
Page 15
from the date of issuance of the Certificate
of Provisional Acceptance for the System,
whichever period is completed first.
12.5 If during the Warranty Period defects are found on frequent
occasions in any part(s) of the Work, such part(s) shall not
be repaired but shall be replaced by new part(s) which are
fully compatible with the System and have characteristics
equal or equivalent to the part(s) originally provided.
12.6 The warranty of the System shall not apply to failures to
conform to Annex 4 which result from damage caused by
negligent acts or omissions of the Purchaser, its agents or
representatives (including that resulting from the negligent
or improper use of the System or from repair of the System by
the Purchaser not in accordance with the Supplier's declared
procedures or other procedures approved by the Supplier), or
which result from the causes set forth in Articles 10 and 14
hereof.
13 SUPPLIER SUPPORT
13.1 In addition to the Design Life Warranty and the Defects
Warranty provided in the preceding Article, the Supplier
further warrants that for the Design Life of the System, the
Supplier will supply such spare parts, replacement equipment
and repair service, and Software support for the System as may
be necessary for its operation, maintenance or repair. Where
identical parts cannot be supplied, the Supplier shall provide
fully compatible parts with characteristics equal or
equivalent to those originally provided. Unless provided for
in Annex 6 such parts, equipment and services shall be
supplied under reasonable conditions of price and delivery.
13.2 Notwithstanding Article 13.1, if for any reason the Supplier
and /or any of its sub-contractors intends to cease
manufacturing identical spare parts and replacement equipment,
the Supplier shall give a minimum one (1) year's prior written
notice to the Purchaser to allow the Purchaser to order from
the Supplier any required spare parts and replacement
equipment, and shall forthwith provide full details of the
arrangements to provide equivalents.
13.3 In the event that the Supplier fails to comply with the
provisions of Article 13.1 or 13.2 or this Contract is
terminated for default, the Purchaser may require the Supplier
to provide the Purchaser with any and all manufacturing
drawings and related specifications as well as bills of
materials giving the description, in-house numbers and/or code
numbers for all such parts or equipment or to give, in cases
where the parts or equipment were not manufactured by the
Supplier, the manufacturer's name, description of the parts or
equipment and code numbers, and to give tolerances for
matching of parts or equipment and finally, for matched parts
or equipment, to give lists of matched parameters and
tolerances and the Purchaser shall have the right to use the
same only for the purpose of continual maintenance, repair and
support of the System. In the case of Software the Supplier
will provide Source Code together with documentation to enable
the Purchaser to maintain the System.
14 FORCE MAJEURE
Page 16
14.1 Neither Party shall be in default if any failure to perform
this Contract arises from any cause which is beyond its
reasonable control and without its fault or negligence and
could not have been avoided through reasonable efforts,
including, but not limited to, acts of God or of the public
enemy, acts or failure to act of any governmental authority,
war, warlike operations, insurrections or riots, epidemics,
quarantine restrictions, strikes, Unusually Severe Weather
Conditions but no other weather conditions, fires, floods,
trawler or anchor damage, damage caused by other marine
activity both natural and man-made, such as, but not limited
to, fishing, marine research and marine development, or
defaults by any of the Supplier's suppliers or sub-contractors
due to any such causes.
14.2 If any such Force Majeure by itself causes an increase in the
time required to reach RFPA for any Phase and/or the System
the Supplier shall be entitled to an equitable adjustment to
the time to reach such RFPA.
14.3 The Supplier shall inform the Purchaser promptly, but in any
event within 3 (three) working days, of any occurrence covered
under this Article 14.
14.4 With regard to Unusually Severe Weather Conditions in Article
14.1 above, the following will apply:
14.4.1 A claim for an extension of time due to force majeure
may only be made in respect of Unusually Severe
Weather Conditions to the extent that the number of
days such conditions are experienced exceeds the
number of unused days of weather contingency included
in the Plan of Work for the relevant Phase.
14.4.2 The time period for making claims of force majeur in
respect of Unusually Severe Weather Conditions, shall
be 7 days after completion of marine operations for
each Phase.
14.4.3 Any such claim is subject to the provisions of 14.2
and the Supplier must demonstrate that the number of
days of Unusually Severe Weather Conditions not only
exceed the number of unused weather contingency days
but also that it has resulted or will result in an
increase in the time required to reach RFPA for the
relevant Phase.
15 SUSPENSION OF WORK
15.1 The Purchaser may, at its convenience, order the Supplier to
suspend all or part of the Work for such period of time as the
Purchaser determines to be appropriate provided that such
suspension shall not continue for a cumulative period of
twelve (12) months or for any period of six (6) consecutive
months. Where as a result of such suspension the Supplier
incurs additional costs or where such a suspension causes loss
to the Supplier in the discharge of its responsibilities under
this Contract, and where such suspension or losses and costs
are not caused by the Supplier's negligence and could not have
been reasonably prevented by the Supplier, the Supplier shall
be allowed an equitable adjustment to the applicable prices
and an equitable extension in the time required for
performance.
15.2 In the event that the Purchaser is unable to make Payment due
hereunder to the Supplier, then the Supplier shall be entitled
to give the Purchaser Notice to arrange such Payment within 30
days and thereafter, if Payment is not received, may
Page 17
Suspend all or part of the Work and such suspension shall be
deemed to be Suspension under Article 15.1
16 CHANGES OR ADDITIONAL WORK
16.1 No change shall be made to this Contract except by Contract
Variation.
16.2 The Purchaser may, with the Supplier's agreement, specify
modifications to the Work. The Supplier shall not unreasonably
refuse to agree to such modifications.
16.3 The Purchaser shall have the right to make any variation to
the Work by not more than 10 %, in quantity, of any product
type and this shall have no impact on the Plan of Work. The
latest date for making such change shall be the RFPA date for
the relevant Phase or as such date may be extended pursuant
hereto, minus the lead time for any item as set forth in
Annex 6.
16.4 The Purchaser shall have the right at any time by a written
order to demand variations within the scope of delivery of any
of the following:
16.4.1 drawings, designs or specifications, where supplies
to be furnished are to be specially manufactured for
the Purchaser;
16.4.2 method of shipment or packing, including methods of
preservation; and
16.4.3 place of delivery.
16.5 The Supplier may propose modifications to the Work if it
considers that such modifications will result in improved
manufacturing processes or manufacturing time, reduction in
costs, technical improvements of the product(s) or imply
maintenance advantages or give better technical applicability.
16.6 If any proposed change and/or order in accordance with
Articles 16.2, 16.3 and/or 16.4 above causes an increase or a
decrease in the price of the Work and/or in the time required
for the execution of the Supplier's obligations under this
Contract, it shall so inform the Purchaser no later than
fourteen (14) days after it has received the proposed change
and/or order.
16.7 Information about any increase or decrease in the price of the
Work and/or in the time required for the execution of the
Supplier's obligations under this Contract shall be contained
in any proposed change in accordance with Article 16.5 above.
16.8 Adjustments mentioned in this Article 16 which contain items
included in the Price Schedule (Annex 1) shall be costed using
the unit prices stated for these items in Annex 1. Where
adjustments mentioned in this Article contain items which are
not specified or sufficiently defined in Annex 1 then these
items shall be costed on an equitable basis.
16.9 The Purchaser shall not unreasonably refuse to agree to a
Contract Variation to reflect the Supplier's recommendation of
route and cable types arising as a result of the Route Survey.
17 TERMINATION FOR DEFAULT
Page 18
17.1 The Purchaser may, by written notice of termination for
default to the Supplier, terminate the whole or any part of
this Contract in any one of the following circumstances, such
termination to be effective immediately upon receipt of said
notice, or at such later date as it may specify in such
notice:
17.1.1 if the Supplier materially fails to comply with Annex
4 or any written amendment thereto, and does not
remedy such failure within a period of thirty (30)
days, or such longer period as the Purchaser may
authorise in writing, after receipt of notice from
the Purchaser specifying such failure; or
17.1.2 if the Supplier materially fails to perform an
essential requirement of this Contract, and does not
remedy such failure within a period of thirty (30)
days , or such longer period as the Purchaser may
authorise in writing, after receipt of notice from
the Purchaser specifying such failure; or
17.1.3 if the Supplier becomes insolvent, files for
bankruptcy, takes advantage of any legal scheme for
the relief of debtors, adopts a resolution for the
liquidation of its assets, or if a petition in
bankruptcy, for receivership or for winding-up is
taken against it and is not rejected or withdrawn
within thirty (30) days from its inception.
17.2 The Supplier shall not be in default if any failure to perform
this Contract arises out of the causes stipulated in Articles
10.1 and 14.1.
17.3 If this Contract is terminated as provided in Article 17.1 the
Supplier shall comply with Articles 18.2.1 - 18.2.7 and 18.2.9
and the Purchaser, in addition to any other rights provided in
this Article 17, may require the Supplier to transfer title
and deliver to the Purchaser in the manner and to the extent
directed by the Purchaser, any completed cable, equipment,
material or supplies and such partially completed cable,
equipment, materials or supplies, and any parts, tools, dies,
jigs, fixtures, plans, drawings, information and contract
rights (hereinafter in this Article 17 called "manufacturing
material") as the Supplier has had specifically produced or
specifically acquired for the performance of such part of this
Contract as has been terminated and which if this Contract had
been completed would have been required to be furnished to the
Purchaser, and the Supplier shall, upon the direction of the
Purchaser, protect and preserve property in the Supplier's
possession in which the Purchaser has an interest. The
Supplier shall be paid the prices specified in Annex 1 for
completed cable, equipment, material and supplies delivered
and services performed, the amount to be agreed upon by the
Purchaser and the Supplier for manufacturing material
delivered to and approved by the Purchaser and the Supplier's
reasonable costs incurred for the protection and preservation
of property.
17.4 In the event of any termination of this Contract as provided
in Article 17.1 the Supplier shall not be relieved from any
liability for damages or otherwise which may have been
incurred by reason of any breach of this Contract.
17.5 The Supplier's liability hereunder shall be limited in
accordance with Article 32.
18 TERMINATION BY NOTICE
Page 19
18.1 The performance of work under this Contract may be terminated
by the Purchaser in whole, or from time to time in part,
whenever it shall so determine. The Purchaser shall deliver to
the Supplier a written notice of termination specifying the
extent to which performance of work under this Contract is
terminated, and the date upon which such termination becomes
effective.
18.2 After receipt of such notice of termination, and except as
otherwise directed by the Purchaser, the Supplier shall:
18.2.1 stop work under this Contract on the date and to the
extent specified in the notice of termination;
18.2.2 place no further orders or contracts for materials,
services or facilities except as may be necessary for
completion of such portion of the Work under this
Contract as is not terminated;
18.2.3 use its reasonable best efforts to terminate all
orders and contracts to the extent that they relate
to the performance of work terminated by the notice
of termination unless otherwise directed by the
Purchaser;
18.2.4 assign to the Purchaser, in the manner, at the time,
and to the extent directed by the Purchaser, all of
the Supplier's right, title and interest under the
orders and contracts so terminated;
18.2.5 use its reasonable best efforts to settle all
outstanding liabilities and all claims arising out of
such termination of orders and contracts, with the
Purchaser's approval or ratification to the extent it
may require, which approval or ratification shall be
final for all the purposes of this Article 18;
18.2.6 transfer title and deliver to the Purchaser in the
manner, at the time, and to the extent (if any)
directed by it ;
18.2.6.1 the fabricated or unfabricated parts, work
in process, completed work, supplies, and
other material produced as a part of, or
acquired in connection with the performance
of, the work terminated by the notice of
termination, and
18.2.6.2 the completed or partially completed plans,
drawings, information, and other property
which, if this Contract had been completed,
would have been required to be furnished to
the Purchaser;
18.2.7 use its reasonable best efforts to sell, in the
manner, at the times, to the extent, and at the price
or prices directed or authorised by the Purchaser,
any property of the types referred to in Article
18.2.6 provided, however, that the Supplier:
18.2.7.1 shall not be required to extend credit to
any buyer, and
18.2.7.2 may acquire any such property under the
conditions prescribed by and at a price
approved by the Purchaser; and provided
further that the proceeds of any such
transfer or disposition
Page 20
shall be applied in reduction of any
payments to be made by the Purchaser to the
Supplier under this Contract or paid in such
other manner as the Purchaser may direct;
18.2.8 complete performance of such part of the Work as
shall not have been terminated by the notice of
termination; and
18.2.9 take such action as may be necessary, or as the
Purchaser may direct, for the protection and
preservation of the property related to this Contract
which is in the Supplier's possession and in which
the Purchaser has, or may acquire, an interest.
18.3 After receipt of a notice of termination, the Supplier shall
submit to the Purchaser a written termination claim. Such
claim shall be submitted promptly, but in no event later than
six (6) months from the effective date of termination, unless
one or more extensions in writing are granted by the Purchaser
upon request made in writing within such six (6) month period
or any authorised extension thereof.
18.4 In the settlement of any such partial or total termination
claim, the Purchaser shall pay to the Supplier the total of:
18.4.1 that part of the Contract Sum relating to the
completed Work; and
18.4.2 a fair and reasonable proportion of the Contract Sum
relevant to partially completed Work, including work
in progress, produced or manufactured but not
delivered; and
18.4.3 the cost of materials and supplies purchased in
respect of this Contract but not yet incorporated
into the Work; and
18.4.4 the cost of settling and paying claims arising out of
the termination of work under the contracts and
orders, as provided in Article 18.2.5, which are
properly chargeable to the terminated portion of this
Contract; and
18.4.5 the reasonable costs of settlement including
accounting, legal, clerical and other expenses
reasonably necessary for the preparation of
settlement claims and supporting data with respect to
the terminated portion of this Contract and for the
termination and settlement of contracts thereunder,
together with reasonable storage, transportation and
other costs incurred in connection with the
protection and disposition of property allocatable to
this Contract.
18.5 In arriving at the amount due to the Supplier under this
Article 18, Purchaser shall deduct all payments made to the
Supplier under this Contract, any liabilities which the
Supplier may have to the Purchaser, and the agreed price for,
or the proceeds of sale of, any materials, supplies, or other
things produced or acquired by the Supplier and sold, pursuant
to the provisions of this Article 18, and not otherwise
recovered by or credited to the Purchaser.
18.6 If the termination hereunder be partial, prior to the
settlement of the terminated portion of this Contract, the
Supplier may file with the Purchaser a request in writing for
an equitable adjustment of the price or prices specified in
this Contract
Page 21
relating to the portion of this Contract not terminated and
such equitable adjustments as may be agreed upon shall be made
in such price or prices.
18.7 The Purchaser may, from time to time, under such terms and
conditions as it may prescribe, approve partial payments and
payments on account against costs incurred by the Supplier in
connection with the terminated portion of this Contract
whenever in the opinion of the Purchaser the aggregate of such
payments may be within the amount to which the Supplier will
be entitled hereunder. If the total of such payments is in
excess of the amount finally agreed or determined to be due
under this Article 18, such excess shall be payable by the
Supplier to the Purchaser upon demand.
18.8 For a period of five (5) years after final settlement under
this Contract, the Supplier shall preserve and make available
to the Purchaser at all reasonable times at the Supplier's
office, but without direct charge to the Purchaser, all books,
records, and documents required to be kept by Article 23
bearing on its costs and expenses under this Contract and
relating to the work terminated hereunder, or to the extent
approved by the Purchaser, photographs, photocopies, or other
authentic reproductions thereof.
18.9 Any payment made by the Purchaser to the Supplier pursuant to
this Article together with any amounts already paid under this
Contract shall in no circumstances exceed the Contract Sum.
19 SAFEGUARDING INFORMATION AND TECHNOLOGY
Any technical, manufacturing, commercial or other information furnished by the
Supplier to the Purchaser and any information provided by the Purchaser to the
Supplier hereunder or in contemplation hereof shall be subject to the FLAG
Atlantic Fibre Optic Cable System Confidentiality Agreement contained in Annex
5.
20 INFRINGEMENT
20.1 The Supplier shall fully indemnify the Purchaser against all
actions, claims, demands, costs, charges, expenses, and losses
arising from or incurred by reason of any infringement or
alleged infringement of any patent, copyright or other form of
intellectual property right in any country in the world, for
any material or software (or the manufacture of any material
or the normal use thereof) provided by the Supplier or on its
behalf pursuant to this Contract except such infringement or
alleged infringement arising from:
20.1.1 the Supplier's adherence to the Purchaser's
directions to use materials or parts of the
Purchaser's selection; or
20.1.2 such material or parts furnished to the Supplier by
the Purchaser, other than in each case, items of the
Supplier's design or selection or the same as any of
the Supplier's commercial merchandise or in processes
or machines of the Supplier's design or selection
used in the manufacture of such standard products or
parts thereof; or
20.1.3 such material or parts furnished to the Supplier by
other FLAG Atlantic Fibre Optic Cable System
suppliers (other than the Supplier's subcontractors);
or
Page 22
20.1.4 use of the Equipment other than for the purposes
indicated in, or reasonably to be inferred from, this
Contract.
20.2 The Purchaser will, at its own expense, defend all suits
against the Supplier for such excepted infringement or alleged
infringement, and save the Supplier harmless from all expense
of defending any such suit and from all payments by final
judgement therein assessed against the Supplier on account of
such excepted infringement.
20.3 If the System or any part of the Equipment supplied by the
Supplier is held to constitute infringement and is subject to
an injunction restraining its use or any order providing for
its delivery up or destruction, the Supplier shall forthwith
at its own expense either:
20.3.1 procure for the Purchaser the right to retain and
continue to use the System; or
20.3.2 modify the System within sixty (60) days or within
that period imposed by the third party being
infringed, whichever shall be the shortest, so that
it becomes non-infringing while ensuring the
compliance with the requirements of Annex 4.
20.4 In the event of any claim being made or action brought against
the Purchaser arising out of the matters referred to in this
Article, the Supplier shall be promptly notified, within a
reasonable period of time but in any event no more than 30
days after any such action, thereof, and may at its own
expense conduct all negotiations for the settlement of the
same, and any litigation that may arise therefrom. The
Purchaser shall not, unless and until the Supplier shall have
failed, within a reasonable time but in any event no more than
30 days after such notice, to take over the conduct of the
negotiations or litigation, make any admission which might be
prejudicial thereto.
21 SOFTWARE
21.1 The Supplier hereby grants to the Purchaser an irrevocable
non-exclusive royalty free license to use, copy, modify and
use as copied or modified all Software and related
documentation provided under this Contract, provided that this
license shall be limited to use of the Software with the
Equipment or with such other equipment (including any
surveillance centre) that is employed to operate and maintain
the System. Individual licenses shall commence from the date
of delivery of each item of Software and related documentation
to the Purchaser. The Purchaser may permit each operator of a
cable station, surveillance centre or other facility connected
to the System to use the Software in order to so operate such
station and is hereby granted the right to sub-licence as
appropriate.
21.2 The Supplier shall ensure that the documentation pertaining to
the Software provided hereunder shall always be complete and
up-to-date.
21.3 Should the Purchaser decide to modify the Software object
code, it shall be free to do so, provided that the Purchaser
shall not be entitled to decompile the Software or alter the
source code, or attempt to do the same.
Page 23
21.4 Where the Purchaser modifies the Software (either before or
after the expiry of the Warranty Period) then the Supplier
shall not be responsible for providing support insofar as the
Software is modified without the prior approval of the
Supplier and any warranty given in respect of the Software
shall not apply in respect of non approved modifications made.
21.5 The Supplier shall take suitable precautions to protect the
documentation and relevant source code against loss of any
kind. Up-to-date copies of the latest documentation and
relevant source code shall be stored by the Supplier in a safe
and secure location remote from its normal work premises for
the period of the Design Life of the System.
21.6 In addition to the above, if requested by the Purchaser the
Supplier shall enter into an escrow agreement with the
Purchaser and an escrow agent acceptable to the Purchaser and
the Supplier. The Supplier shall place in escrow thereunder
one copy of the source code and relevant high level design
documentation and keep updating each such copy each time when
a new version of the Software is issued both in human readable
format, if requested, and machine readable format, details of
host machines and sufficient documentation including tools to
enable modification of the Software and shall grant the
Purchaser an irrevocable, non-exclusive, non-transferable
(except that the Purchaser may assign such license in the
event its amalgamation or reconstruction), royalty free
license, to use the source code to modify, and use as modified
the Software (and permit the use of such Software by each
operator of a cable station, surveillance centre or other
facility connected to the System as set forth in Article
21.1), provided that such license is limited to the
circumstances defined in the Escrow Agreement.
22 PAYMENT
Payment to the Supplier of the Contract Sum of *** shall be made by the
Purchaser on the following basis:
22.1 Terms of Payment
22.1.1 INITIAL PAYMENT
***
22.1.2 PROGRESS PAYMENTS
*** of the Contract Sum shall be paid *** aggregating to a
cumulative amount not greater than that indicated in the
Schedule of Progress Payments in Annex 2 hereof in respect of
Equipment, works or services which have been supplied or
executed to the satisfaction of the Purchaser, and not
previously included in a request for payment, at the following
stages:
***
22.1.3 FINAL PAYMENT
The remainder of the Contract Sum plus any amounts in
respect of Contract Variations will be billed ***.
Page 24
22.2 General Terms of Payment
22.2.1 All payments to the Supplier shall be made in US
Dollars.
22.2.2 Full and properly itemised and issued requests for
progress payments, reimbursement of VAT, customs
duties and other taxes and duties shall be submitted
by the Supplier to the Purchaser not more than ***.
22.2.3 No payment shall be claimed earlier than that set out
in the Schedule of Progress Payments in Annex 2
hereof, unless otherwise specifically agreed to by
the Purchaser.
22.2.4 The monthly request for payment shall show the total
prices and charges for each item in accordance with
the Price Schedule contained in Annex 1 hereof. The
amounts due to the Supplier shall be computed in
accordance with Article 22.1.
22.2.5 Such requests for payment are to be accompanied by
all documentation necessary to demonstrate compliance
with the terms of this Contract including but not
limited to appropriate Release Certificates signed on
behalf of the Purchaser and relevant shipping papers.
22.2.6 On the basis of such requests for payment, the
Supplier shall be paid the full amount owed *** of
receipt of the request for payment by the Purchaser,
subject to applicable deduction or withholding
pursuant to this Contract.
22.2.7 In the event that one or more items, on any request
for payment, is questioned by the Purchaser or for
which the Purchaser requires additional information
prior to authorising its payment, the amount of such
item shall be deducted from the total amount of the
request for payment and payment of the balance of
such request for payment shall be made in accordance
with the terms of this Contract. Whenever such
questioning occurs, the Supplier shall be advised of
its nature and requested to furnish the information
required to permit the expeditious resolution of the
issue. The Purchaser shall act in a reasonable manner
in exercising this right.
22.2.8 No payment (final or otherwise) made under or in
connection with this Contract shall be conclusive
evidence of the performance of the Work, or of this
Contract, in whole or in part, and no such payment
shall be construed to constitute the acceptance of
defective, faulty of improper Work or Equipment, nor
shall it release the Supplier from any of its
obligations under this Contract.
22.3 Following issue of the Certificate of Provisional Acceptance
of the System, invoices will be issued by the Supplier to the
Purchaser in respect of the actual supply of Equipment and
related services under this Contract and the respective
amounts payable therefor (whether payable or paid), by
reference to the Appendix to Annex 1 (Price Schedule).
Page 25
22.4 Taxes
22.4.1 The Contract Sum is exclusive of VAT, sales taxes,
customs duties or other levies or duties applicable
in the FLAG Atlantic Fibre Optic Cable System landing
countries. For the avoidance of doubt, such taxes
shall be amounts relating to the importation of
Equipment into the landing countries and also
relating to the supply of the Equipment and related
services. The Purchaser shall pay to the Supplier
appropriate VAT, sales taxes, customs duties, or
other levies or duties applicable against submission
of the appropriate request for reimbursement within
30 days following the presentation of such
documentation (including appropriate tax invoices) to
the Purchaser, provided the requested amounts do not
exceed by more than *** the mounts the Parties will
agree within 30 days of signing this contract should
be levied by the relevant authorities, but excluding
any changes in legislation. The above amounts paid by
the Supplier shall be converted into US Dollars at
the rate in effect at the time of payment to the
relevant Tax Authorities.
22.4.2 The Supplier shall give the Purchaser all reasonable
assistance in the making of all appropriate
applications for revisions, exemptions, recoveries
and remission of taxes, duties and other levies in
accordance with the appropriate law. The Supplier
shall provide relevant documentary information in a
timely fashion to fully support the Purchaser in its
efforts to obtain any revision, exemption, recovery
or remission or to import the Equipment at the lowest
value possible and shall take such actions as the
Purchaser may reasonably request to obtain such
revisions, exemptions, recoveries and remissions and
to otherwise minimise the level of such taxes, duties
and other levies.
22.4.3 If withholding taxes are payable in the Purchaser's
country or in any country where any Site is located,
the Purchaser shall withhold the necessary amount
from the relevant payments hereunder and pay the
withheld amount to the relevant authorities in
accordance with the applicable laws, and provide
evidence of having done so to the Supplier. The
Purchaser shall not withhold any such amount without
having previously taken into consideration any
bilateral tax agreements concluded between the
Purchaser's country and the Supplier's country.
In any such case, the Purchaser shall promptly
provide to the Supplier, an original or copy of the
original tax receipt, certified by the tax
authorities, for any income tax which is retained
from any payment due to the Supplier. All such
receipts shall be in the name of the Supplier.
23 KEEPING OF BOOKS
23.1 For those items specified in Annex 1 as cost incurred items,
the Supplier shall keep and maintain books, records, vouchers
and accounts of all cost pertaining to the System until five
(5) years from RFPA for the System.
23.2 For those items specified in Annex 1 as fixed cost items, the
Supplier shall keep and maintain books, records, vouchers and
accounts with respect to its billing of those items to FLAG
Atlantic Fibre Optic Cable System until five (5) years from
RFPA for the System.
Page 26
23.3 The Supplier shall obtain from its suppliers and
sub-contractors such supporting records, for other than the
cost of fixed cost items, as may be reasonably required and
shall maintain such records for a period of five (5) years
from RFPA for the System.
23.4 The Supplier shall afford the Purchaser the right to review
and make copies, at no cost to the Purchaser, of the said
books, records, vouchers and accounts required to be kept,
maintained and obtained pursuant to this Article 23.
24 INSURANCE
The Insurance Coverage Requirements contained hereunder are not intended to
cover all of the Supplier's exposures to loss under this Contract. Any
additional risk management measures or additional insurance coverage the
Supplier may deem necessary to fulfil its obligations shall be at its own
discretion and expense.
The Supplier shall, at its own expense and at no cost to the Purchaser, procure
or cause to be procured and maintain in force from the Contract signature date
until the granting of Provisional Acceptance of the System the following
insurance coverage in a form and with Underwriters acceptable to the Purchaser:
24.1 "ALL RISKS PHYSICAL DAMAGE INSURANCE" COVERING THE WORK AT
SUPPLIERS PREMISES
This insurance is to be written on a replacement cost basis for the
full value at risk with loss if any, payable to the Purchaser and the
Supplier as their respective interests may appear, or as they may
direct. This coverage may terminate when the last shipment of the
completed Work is loaded on board any vehicle or carrier for the
purpose of transportation from the Supplier's premises.
24.2 "COMPREHENSIVE GENERAL LIABILITY INSURANCE"
General Liability insurance shall cover losses and claims arising from
injuries or death to any person (including any employee of the Supplier
or any subcontractor) or damage to any property (including that of the
Purchaser) under this Contract. This insurance shall cover liability
arising from all operations of the Supplier and be effected for a
Combined Single Limit of no less than three hundred million US Dollars
(US$300,000,000) per occurrence and in the annual aggregrate or such
greater amount as may be required by statute and is to include
Completed Operations, Contractual and Product liability coverages.
Coverage is also to include the Protective section with respect to
subcontractors and the liability arising from the operation of motor
vehicules owned and non-owned. The insurance policy(ies) is (are)
deemed to be written on an occurrence basis. For purposes of showing
evidence of insurance the Supplier shall be required to show evidence
of a Combined Single Limit of no less than two hundred million US
Dollars (US$200,000,000) per occurrence and in the annual aggregrate.
24.3 "WORKER'S COMPENSATION INSURANCE" OR EQUIVALENT PROTECTION
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. Territorial restriction to be amended so that employees
working at sea or in the area of operation are not excluded.
Page 27
24.4 "EMPLOYER'S LIABILITY INSURANCE"
This insurance shall cover claims presented by or on behalf of
employees or servants of the Supplier and related to employer's
liability whether the claim arises under statute or maritime law or
otherwise. The minimum limit of liability shall be no less than two
million US Dollars (US$2,000,000) per occurrence or as required by
applicable statute whichever is greater. This insurance shall be
scheduled to any and all applicable umbrella/excess liability policies
and is required by all contractors and subcontractors.
24.5 "CARGO AND INSTALLATION ALL RISKS ON GOODS OF THE CONTRACT"
The Supplier is required to procure and maintain in force an insurance
contract written on the latest edition of the Institute Cargo Clauses
"A", (All Risks Form), modified if required to pick-up the installation
exposures. This insurance is to cover the cable and equipment from the
point where the insurance required under Article 24.1 ceases, and to
continue until the date of the acceptance of the System by the
Purchaser. Such insurance is to include the perils of jettison, loss
overboard, xxx and labour, increased value by way of payment of duty,
the risks of war, strike, riot and civil commotion. The limit of such
insurance should be not less than the replacement value of any one
shipment at any time.
24.6 "INSURANCE COVERAGE TO BE MAINTAINED BY SHIP OWNER"
The Supplier shall, or shall require the Ship owner to provide and
maintain in force during the charter period the following coverage:
24.6.1.1
P&I (Protection and Indemnity) coverage from
one of the Mutual P&I Clubs subscribing to
the International Group Association Agreement
(IGA) as per Standard Rules with a US$2
billion liability limit for all risks covered
with the exception of Oil Pollution risks
where recovery may be limited to
US$500,000,000 for each separate accident or
occurrence or for each vessel owned or
chartered by the Supplier and used in the
performance of this Contract.
In the event of any vessel being used in the
performance of this Contract that is less
than 2,500 gross tons, the minimum limits of
liability carried for the risks of Protection
and Indemnity, including, but not limited to
Crew and Passenger Liability, Liability to
Cargo, Collision Liability, Pollution
Liability, War Risks and Removal of Wreck,
shall be US$25,000,000.
Such Protection and Indemnity coverage shall
be extended to include the Specialist
Operations Extension, where such operations
are to be performed and otherwise excluded by
the policy/entry, to a limit of no less than
US$25,000,000 for each separate accident or
occurrence and for each vessel.
24.6.2 Hull and Machinery Insurance including War Risks
cover on full conditions for a limit of no less than
the actual value of each vessel owned or chartered by
the Supplier and their subcontractors and used in the
performance of this Contract. The territorial
warranties of the policy should include the planned
cable route.
Page 28
24.6.3 Seabed or equivalent coverage is to be provided as
required to protect against all risks of physical
loss or damage to the submersible plant and equipment
ending with the Certificate of Provisional
Acceptance.
Where referenced in these Articles 24.6.1 and 24.6.2,
the word vessel or vessels shall be deemed to include
all sub-sea equipment (Sea Plough, Scarab and/or any
similar equipment) which the Supplier or their
subcontractors may be using in the performance of
this Contract.
24.7 GENERALITIES APPLICABLE TO INSURANCE COVERAGE
24.7.1 Coverage required under Articles 24.5 and 24.6 above
are to be arranged so that any general average and
salvage costs contribution from the part of the
Purchaser as well as subrogation rights be waived in
their favour by the Underwriters, except for
casualties arising from actions of Purchaser acting
in the capacity of Subcontractor to the Supplier.
24.7.2 On coverage required under Articles 24.1, 24.2, 24.5
and 24.6, the Purchaser is to be added as an
Additional Named Insured with the appropriate "Cross
Liability" and "Severability of Interests" clauses,
provided that the Purchaser shall not be liable for
any insurance premiums.
24.7.3 The Supplier will notify the Insurers promptly and
shall supply all necessary information concerning any
occurrence which may give rise to a claim under the
above insurance policies in order to expedite the
processing of the claims. With respect to coverage
under 24.1, 24.2, 24.5 and 24.6, it will keep the
Purchaser informed of the details of the occurrences
and of the progress of the claim treatment by the
Underwriters.
24.7.4 All deductibles or self-insured retentions in the
above insurance coverage are for the account of the
Supplier and/or the Ship owner as the case may be and
shall under no circumstance be the responsibilty of
the Purchaser.
24.7.5 If the Supplier is to charter, operate or use any
aircraft, helicopter or other flying craft in the
performance of this Contract, it engages itself to
procure or cause to be procured and maintain in force
all the necessary insurance covering the aviation
liability and hull exposures with a minimum of
US$100,000,000 of Liability Insurance and scheduled
to the excess liability policies. If the Supplier
charters, operates or uses any aircraft, helicopter
or other flying craft in the performance of this
Contract evidence of this required insurance shall be
furnished prior to use of any aircraft, helicopter or
other flying craft. It will also ensure that any such
craft is holder of a current airworthiness
certificate.
24.7.6 On coverage required under Articles 24.1 and 24.5,
provision should be made for loss, if any, to be
payable to the Purchaser and the Supplier as their
respective interests may appear.
24.7.7 The insolvency, liquidation, bankruptcy or failure of
any Insurer providing insurance for the Supplier or
its sub-contractors, or failure of
Page 29
any such Insurer to pay claims accruing, shall not be
considered a waiver of nor shall it excuse the
Supplier from complying with any of the provisions of
this Contract.
24.7.8 The Supplier shall furnish the Purchaser with
certified copies of insurance policies or
certificates of insurance which provide sufficient
information to verify that the Supplier has complied
with the insurance requirements.
If any of the insurance coverage required herein are
not procured or maintained pursuant to the
specifications, the Purchaser, at its option, may
notify the Supplier that the failure to provide the
insurance is a material omission whereupon it is
agreed that the Purchaser, at its sole option, shall
have the right either to purchase similar coverage,
the cost thereof to be reimbursed by the Supplier
forthwith to the Purchaser or, alternatively to be
deducted by the Purchaser from any sum due or
thereafter becoming due to the Supplier from the
Purchaser or to terminate this Contract in accordance
with the provisions of Article 17 hereof. In the
event of Purchaser supplied insurance, the Supplier
will notify Purchaser immediately by facsimile, telex
or telephone of any loss or damage covered by these
policies and shall co-operate fully in gathering,
assembling and presenting claim documentation to
Underwriters. All insurance proceeds will then be
paid solely to the Purchaser.
24.7.9 Following a loss or damage, the Supplier shall remedy
any such loss or damage with due diligence and
dispatch and shall not wait for any insurance
proceeds to effect the repairs.
24.7.10 All of the above insurance coverage should provide
that prior to any cancellation or material change
thereto initiated by the Underwriters, a 90 days
notice will be forwarded to:
FLAG Atlantic Limited
The Emporium Xxxxxxxx
00 Xxxxx Xxxxxx - 0xx Xxxxx
Xxxxxxxx XX00, Xxxxxxx.
Attention: Co-Chairmen
Telephone: x0 000 000 0000
Facsimile: x0 000 000 0000
With a copy to:
FLAG Telecom Limited
0xx Xxxxx, Xxxxxxxxx Xxxxx
635 Sipson Road, West Drayton
Middlesex UB7 OJE
UK.
Attention: Program Manager
Telephone: x00 000 000 0000
Facsimile:x00 000 000 0000
Page 30
24.7.11 Furthermore, any certificate or other similar
document the Supplier is required to submit to the
Purchaser under this Article 24 shall be forwarded to
FLAG Atlantic Limited at the address appearing in
Article 24.7.10 above.
24.7.12 The Supplier or the Purchaser, as the case may be,
shall promptly give to the other party notice in
writing of any claim made or proceedings commenced
for which the Supplier or the Purchaser claims to be
entitled to indemnification under this Contract and
shall confer with the other party concerning the
defence of any such claim or proceedings, shall
permit such other party to be represented by counsel
in defence thereof and shall not effect settlement of
or compromise any such claim or proceedings without
the other's prior written agreement.
25 AGENTS AND REPRESENTATIVES OF THE PURCHASER
The Purchaser may nominate such agents or representatives, as it may desire, to
carry out any of its responsibilities or to exercise any of its rights under
this Contract. The Purchaser shall notify the Supplier in writing of any such
nominations.
26 REMOVAL OF PERSONS EMPLOYED ON CONTRACT
If and whenever the Purchaser for any reason considers that the continued
employment by the Supplier of any person in connection with this Contract is
undesirable, it may so inform the Supplier who shall thereupon cease to employ
that person in that connection.
27 SEVERABILITY
If any of the provisions 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 not
containing the particular invalid or unenforceable provision or provisions, and
the rights and obligations of the parties shall be construed and enforced
accordingly.
28 SUCCESSORS BOUND
This Contract shall be binding on the Parties and their respective successors
and permitted assigns.
29 RELATIONSHIP OF THE PARTIES TO EACH OTHER
The relationship of the Parties to this Contract shall not be that of partners
and nothing herein contained shall be deemed to constitute a partnership between
them.
30 RESPONSIBILITY FOR OBTAINING PERMITS AND LOCAL LAWS
30.1 The Purchaser shall be responsible for obtaining, maintaining
and complying with all appropriate permits, licences,
consents, authorisations and approvals as well as for the
payment of all costs related thereto, in connection with its
ownership and operation of the FLAG Atlantic Fibre Optic Cable
System, its ownership and operation, its landing in each
territory as well as its transoceanic route, including,
without limitation, permits, licences, authorities and
approvals therefor and for the
Page 31
cable to cross other telecommunication cables, pipelines, and
the like, to rest or be buried in any inland waters,
territorial waters, continental shelf, contiguous zones,
Exclusive Economic Zones and permissions to cross any beach or
land at any shore end. The cost of any related fisherman's
compensation will also be to the Purchaser's account.
30.2 The Supplier shall, at no additional cost to the Purchaser, be
responsible for obtaining, maintaining and complying with all
permits, licences, consents, authorisations and approvals
required for carrying out the installation activities
including, without limitation, obtaining harbour and port
clearances and approvals to operate the vessel(s) wherever
required to duly carry out the route survey and installation
activities as well as the route survey in the due performance
of its obligations under this Contract.
30.3 The Supplier shall comply with all laws, by-laws and
regulations applicable to the Work in force in the localities
within which this Contract is to be performed. The Supplier
shall, before making any variations from the designs,
drawings, plans or procedures that may be necessitated by so
complying, give to the Purchaser written notice, specifying
the variation proposed to be made, and the reasons for making
it, and apply for instructions thereon. The Supplier shall be
responsible for the payment of any and all costs incurred as a
result of a need to vary design, drawings, plans or
procedures. The Supplier shall give all notices required by
the said laws, by-laws and regulations to be given to any
authority, perform or permit the performance by authorised
persons of any inspection required by the said legislation,
rules, regulations, by-laws, orders and proclamations and pay
all fees, charges, impositions, or any other amounts payable
to any such authority, or to any public officer in respect of
the Work.
30.4 The Purchaser shall not be responsible for any acts or
omissions of the Supplier that violate, the laws, by-laws or
regulations of any locality in which the work is carried out.
30.5 The Supplier shall indemnify the Purchaser against any such
act or omission or any claims, demands, actions, suits,
proceedings, prosecutions, fines, penalties, damages or
expenses arising out of the same or any of them, and against
the fees payable by the Supplier to any authority or public
officer pursuant to this Article 30.
30.6 The Supplier and Purchaser shall give each other such
assistance as may be reasonably required to obtain the permits
hereinbefore mentioned
31 CONSENTS
Whenever under this Contract either Party's consent or approval is
required, such Party shall not unreasonably withhold such consent or
approval and shall not unreasonably delay in granting or denying such
consent or approval. If such Party has not denied such consent or
approval within 30 days after such consent or approval is requested,
such Party shall be deemed to have granted such consent or approval.
Page 32
32 LIMITATION OF LIABILITY
32.1 The Supplier shall not be liable to the Purchaser in any event
howsoever arising, whether in contract, tort or otherwise, for
any consequential, incidental or special damages, nor for any
loss of profits, loss of revenue or the costs of, or
associated with the use of, restoration facilities resulting
from the failure of the Supplier to perform pursuant to the
terms of this Contract.
32.2 The maximum amount payable as damages or by way of indemnity
by the Supplier to the Purchaser for whatever reason under
this Contract or arising upon its termination shall in no
circumstances exceed 100% of the Contract Sum.
33 ALLOCATION OF DUTIES
33.1 Allocation of the principal duties and obligations of the
Parties shall be in accordance with the Appendix to the Price
Schedule.
33.2 Notwithstanding the provisions of Article 33.1, Alcatel
Submarine Networks and FLAG Atlantic Limited respectively
shall be and remain principally liable for and in respect of
all duties and obligations of:
33.2.1 Alcatel Submarine Networks Inc. and Alcatel Submarine
Networks Limited, in the case of Alcatel Submarine
Networks; and
33.2.2 FLAG Atlantic USA Limited, Flag Atlantic France sarl
and FLAG Atlantic UK Limited, in the case of FLAG
Atlantic Limited.
34 NOTICES
34.1 All notices pertaining to this Contract shall be in writing
and shall be sent to the respective parties at the following
postal addresses or facsimile numbers:
For Purchaser:
FLAG Atlantic Limited
The Emporium Xxxxxxxx
00 Xxxxx Xxxxxx - 0xx Xxxxx
Xxxxxxxx XX00, Xxxxxxx
Attention: Co-Chairmen
Telephone: x0 000 000 0000
Facsimile: x0 000 000 0000
with a copy to:
FLAG Telecom Limited
000 Xxxxx Xxxxxx
Xxxxxx X0X 0XX
XX
Attention: General Counsel
Facsimile: x00 000 000 0000
Page 33
with a copy to:
GTS Xxxxxxxxxxxxxxxxx 0X
0000 Xxxxxxxxx
Xxxxxxx
Attention: Legal Director
Facsimile: x000 000 0000
For Supplier:
Alcatel Submarine Networks
00 xxxxxx xx xx Xxxxxxx
00000 Xxxxxxxx
Xxxxxx
Attention: General Counsel
Facsimile: x00 0 0000 0000
34.2 Either Party may change its designated nominee or the address
for notices to be sent hereunder, at any time by giving the
other Party thirty (30) days prior written notice.
34.3 Any notice to be given to the Supplier under the terms of this
Contract shall, without prejudice to any other way of serving
it, be sufficiently given if sent by recorded delivery to the
Supplier's last know place of business or registered office
and shall be deemed to be given at the time when it was
delivered in the ordinary course of post.
35 CAPTIONS
The captions of the Articles do not form part of this Contract and shall not
have any affect on the interpretation thereof.
36 LAW AND ARBITRATION
36.1 This Contract shall be considered as a contract made in
England and subject to English law.
36.2 The Parties to this Contract shall try to solve by
negotiations any disagreement which may arise in connection
with this Contract. In case of a dispute arising after
negotiations have failed, the dispute shall be resolved by
arbitration under the Rules of Arbitration of the
International Chamber of Commerce in effect on the date that
the arbitration is initiated.
36.3 Arbitration shall be by arbitrators appointed under the said
rules by three arbitrators, unless the Parties agree to use a
single Arbitrator.
36.4 The place of arbitration shall be London.
Page 34
36.5 Responsibility for paying the costs of the arbitration,
including the costs incurred by the Parties themselves in
preparing and presenting their cases, shall be apportioned by
the tribunal.
36.6 The award shall state the reasons upon which it is based.
36.7 The award shall be final and binding on the Parties as from
the date it is made.
36.8 Judgement upon the award rendered may be entered in any court
having jurisdiction, or application may be made to such court
for a judicial acceptance of the award and an order of
enforcement, as the case may be.
36.9 The fact that a dispute is brought to arbitration does not
relieve either Party from its obligation to fulfil its
commitments as provided in this Contract and the Parties shall
continue to perform this Contract notwithstanding a dispute or
arbitration thereof.
37 PRECEDENCE
In the event of any inconsistency between the Articles and Annexes of this
Contract, such inconsistency shall be resolved by giving precedence to the
Articles and the Annexes shall be in the order indicated in Article 47.
38 WAIVER
No failure to exercise and no delay in exercising, on the part of either Party,
any right, power or privilege hereunder will operate as a waiver thereof, nor
will any single or partial exercise of any right, power or privilege hereunder
preclude further exercise of any other right hereunder.
39 RECOVERY OF SUMS DUE
Whenever under this Contract any sum of money shall be recoverable from or
payable by the Supplier and the Supplier has not paid the sum due within a
reasonable time, the same may be deducted from any sum then due, or which at any
time thereafter may become due to the Supplier, under this Contract.
40 WATCHING, LIGHTING AND PROTECTION OF SITE
For the protection of the Site, the System, and all Equipment and Ancillary
Apparatus and for the prevention of danger to persons on or near the Site and to
shipping, the Supplier shall, unless the Purchaser otherwise agrees, take all
usual and reasonable steps to ensure that the System, the Equipment, the Site
and all things on Site are properly watched, secured, protected, marked and lit.
41 PROVISION OF ANCILLARY APPARATUS
Except where this Contract provides otherwise, the Supplier shall provide, at
its own expense, the Ancillary Apparatus necessary to carry out the Work
properly and efficiently.
42 DIARY AND REPORTING
42.1 The Supplier shall keep written records or diaries of all
activities undertaken in the performance of the Work,
including details of any variations or additional work
Page 35
and the routine and non-routine events, alarms, faulty units
and equipment and other kind of problems as well as the
remedial actions taken. The Supplier shall make the records or
diaries available for inspection and confirmation by the
Purchaser, or any authorised representative of the Purchaser,
at any time during the progress of the Work and for a
reasonable period thereafter, and at all events, for a minimum
period of five (5) years from RFPA for the System.
42.2 The Supplier shall conform to the Plan of Work.
42.3 The Supplier shall attend at such times and places as may be
required by the Purchaser co-ordination meetings with the
Purchaser's representatives to discuss the general progress of
the Work.
42.4 The Supplier shall render such reports of the progress of the
Work, in such form, as may be called for by the Purchaser. The
submission and acceptance of these reports shall not prejudice
the rights of the Purchaser under Article 6 or 7 or elsewhere
in this Contract.
42.5 The Purchaser shall meet with the Supplier on a quarterly
basis to review and discuss the fiscal position of the
Purchaser with regard to its obligations under this Contract.
43 PROPERTY OF THE PURCHASER
43.1 Any property of the Purchaser issued in connection with this
Contract, and anything supplied by the Purchaser whether for
incorporation in the System or not, shall remain the property
of the Purchaser and shall not be used other than in the
execution of this Contract without the prior written consent
of the Purchaser.
43.2 No such property or things shall be removed from the place
where they are normally used or stored for the purposes of
this Contract without the Purchaser's consent.
43.3 The Supplier shall keep readily available records of all such
property and things in order to enable the Purchaser to check
from time to time the quantities in use, used, and available
for use, against those delivered to the Supplier's charge.
43.4 Neither the Supplier nor any other person shall have a lien on
any such property or things for any sum due. The Supplier
shall take all reasonable steps to ensure that the Purchaser's
title and the exclusion of liens are brought to the notice of
all persons dealing with such property and things.
43.5 All such property and things shall be deemed to be in good
condition when received by or on behalf of the Supplier unless
the Supplier notifies the Purchaser to the contrary within
fourteen (14) days of receipt.
43.6 All such property and things which are not for incorporation
in the System shall be duly returned by the Supplier. Between
the time of delivery to the Supplier and of return to the
Purchaser, the Supplier shall be responsible for all damage
thereto except for normal wear and tear resulting from proper
use in the execution of this Contract.
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43.7 Any test equipment provided by the Purchaser shall be
re-calibrated immediately prior to its return.
44 SERVICES RENDERED BY THE PURCHASER
If the Purchaser shall accept delivery of any articles, materials, or stores, in
connection with this Contract on behalf of the Supplier and shall pay any
charges upon such articles, materials, or stores, either for demurrage,
handling, storage, cartage or carriage, or for the price of such materials or
stores, or if the Purchaser shall at the express or implied request of the
Supplier perform any other services for the Supplier any expense so incurred by
the Purchaser shall be recoverable from the Supplier upon demand by the
Purchaser.
45 FACILITIES FOR OTHER WORKS
45.1 The Purchaser shall have power at any time to execute other
works (whether or not in connection with the Work) on the Site
(except for Cableships) concurrently with the execution of the
Work and the Supplier shall give reasonable facilities for
such purpose.
45.2 Should interference arise between the work of the Supplier and
the work of other suppliers engaged by the Purchaser then the
co-ordination between such different work will be prepared and
agreed in meetings to be held with the Purchaser, the Supplier
and such other supplier(s). The minutes of those meetings
shall be binding on the respective parties and shall be
considered contractual documents providing such conclusions
are not at variance with the Supplier's obligations under this
Contract.
45.3 The Supplier shall co-operate with the Purchaser and other
suppliers in their employ in the execution of their work. The
Supplier shall immediately bring to the attention of the
Purchaser any conflict between its work and that of any
supplier employed by the Purchaser.
46 PUBLICITY
No publicity relating to this Contract shall be published in any newspaper,
magazine, journal or any written or visual media without the prior written
consent of the Purchaser.
47 ENTIRE CONTRACT
47.1 This Contract consists of Articles 1 through 51 and the
following documents which are attached hereto:
Annex 4 Technical Specification
Annex 1 Price Schedule
Annex 3 Plan of Work
Annex 2 Schedule of Progress Payments
Annex 6 Long Term Support
Annex 5 Confidentiality Agreement
Annex 7 Sea State 6 Definition
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47.2 This Contract supersedes all prior oral or written
understandings between the Supplier and the Purchaser with
respect to the subject matter of this Contract, including (but
not limited to) the contract signed on 12 January 1999,
between FLAG Atlantic Limited and Alcatel Submarine Networks,
and constitutes the entire agreement between them with respect
to said subject matter.
48 LETTER OF PERFORMANCE GUARANTEE, GUARANTORS
48.1 In order to guarantee the good and timely execution of all the
contractual obligations, the Supplier shall, at its own cost,
provide in time for the Purchaser to obtain financing for this
Contract, a Performance Guarantee for a value equal to ten
percent (10 %) of the Contract sum in favour of the Purchaser
in the form of an irrevocable and unconditional Bank Guarantee
in the format to be agreed with the Purchaser and if necessary
its lenders. The Performance Guarantee shall be issued by a
bank acceptable to the Purchaser. Upon the issuance of the
Certificate of Provisional Acceptance of the System, the value
of the Performance Guarantee shall be reduced to five
percent (5%).
48.2 The Performance Guarantee shall remain in force until the
issuance of the Certificate of Final Acceptance.
48.3 In the event of default by the Supplier in carrying out its
responsibilities under this Contract, the Purchaser, at its
discretion, shall have the right from time to time, to call in
all or part of the amount represented by the Performance
Guarantee.
48.4 The Supplier agrees to cause its ultimate parent company to
execute and deliver a guaranty to the Purchaser, in time for
the Purchaser to obtain financing for this Contract, and in a
form to be mutually agreed with the Purchaser and if necessary
its lenders.
49 CONTRACT EFFECTIVENESS
49.1 This Contract shall be effective as at the date of signature.
49.2 It is the intention of the Purchaser to ensure that as soon as
possible thereafter financing is in place ("Financial
Closure"). In the event that such financing is not in place,
by 20 October 1999, then the Supplier shall have the option:
49.2.1 as long as the financing is not available, and up to
31 December 1999, to suspend this Contract and be
entitled to claim only an equitable extension of
time; and
49.2.2 as long as the financing continues not to be
available, and up to 30 June 2000, to continue to
suspend this Contract and be entitled to claim an
equitable extension of time as well as costs in
accordance with Article 15 of this Contract; and
49.2.3 in the event that financing is not available after 30
June 2000 then the Supplier shall be entitled to
terminate this Contract in which case the Purchaser's
total liability shall be limited to the Supplier's
out of pocket expenses to a maximum of the amount
payable under Article 22.1.1. In such circumstances
the title in the desk top study and the marine route
survey report shall transfer to the Purchaser.
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50 CORRUPT PRACTICES
50.1 The Supplier shall at all times comply with all applicable
laws and regulations and shall conduct its business in
accordance with the US Foreign Corrupt Practices Act of 1977,
as amended.
50.2 The Supplier shall not offer or give or agree to give to any
person associated with this Agreement, whether employed by
Purchaser or not, 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 or persons in relation to
this Contract.
51 SAFETY
The Supplier shall at all times comply, and ensure that all of its employees,
contractors and agents comply, with all regulations (governmental or otherwise),
laws etc. relating to both the safety of personnel and the operations themselves
and all associated activities that are undertaken in the Supplier's performance
of its obligations under this Contract, and the Supplier hereby indemnifies and
holds the Purchaser harmless from and against any consequences that may result
from the Supplier having failed to do so.
Page 39
IN WITNESS THEREOF the parties to this Contract have signed:
FLAG Atlantic Limited
By: /s/ Name of Signatory By: /s/ Name of Signatory
---------------------- -----------------------
Date: 20/9/99 Title: CO Chairman
Date: 20/9/99
FLAG Atlantic USA Limited
By: /s/ Name of Signatory By: /s/ Name of Signatory
---------------------- -----------------------
Date: 22 Sept. 1999 Title: Co Secretary
Date: 20 Sept. 1999
By: /s/ Name of Signatory
-----------------------
Date: 20 Sept. 1999
FLAG Atlantic France Sarl
By: /s/ Name of Signatory By: /s/ Name of Signatory
---------------------- -----------------------
Date: 20/09/99 Date: 22 Sept. 1999
FLAG Atlantic UK Limited
By: /s/ Name of Signatory By: /s/ Name of Signatory
---------------------- -----------------------
Date: 20/9/99 Title: Title of Signatory
Date: 22 Sept. 1999
Page 40
By: /s/ Name of Signatory
-----------------------
Date: 20 Sept. 1999
Alcatel Submarine Networks
By: /s/ Name of Signatory
----------------------
Title: Chief Operating Officer
Date: 20/9/99
Alcatel Submarine Networks Inc.
By: /s/ Xxxxxx X. Xxxxx
----------------------
Title: President
Date: 20/9/99
Alcatel Submarine Networks Limited
By: /s/ Name of Signatory
----------------------
Date: 20/9/99
Page 41
