Senin, 07 Juli 2008

AGREEMENT FOR THE CONSTRUCTION OF WORKSHOP, MAINTENANCE CENTER AND GUARD POST

This Agreement is made and entered into as of this ____________ year ____________ by and among:

1. ____________, a limited liability company established under the laws of the Republic of Indonesia, having its office at ____________ (hereinafter referred to as the “Employer”, which expression shall include any of its successors, representatives and assigns); and

2. ____________,a limited liability company established under the laws of the Republic of Indonesia, having its office at ____________ (hereinafter referred to as “____________”)(____________ hereinafter referred to as the “Contractor”, which expression shall include any of its successors, representatives and assigns).

The Employer and the Contractor hereinafter individually referred to as the “Party” and collectively the “Parties”.

WHEREAS

A. The Employer is desirous of having a workshop, maintenance center and guard post constructed at ____________ (hereinafter referred to as the “Project”), and has caused Drawings and Specifications showing and describing the work for architecture, finishes and structure to be done, under direction of the Employer, by [name of design architect, civil engineer, mechanical and electrical engineer engaged for this Project].

B. The Employer has accepted a proposal from the Contractor for the execution and completion of the Works as herein below defined, and the remedying of any defects therein.

C. The Contractor and the Employer have entered into a Letter of Intent dated ____________ (hereinafter referred to as the “LOI”), which serves as a formal acceptance by the Employer of the tender and confirmation of the appointment of the Contractor to perform the Works set out herein.

Now It Is Hereby Agreed As Follows:

Article 1

DEFINITION

1.1 The terms written in capital letters stated in this Agreement shall have the meaning as follows:

(a) Agreement” shall mean collectively the Agreement, the Appendices to this Agreement and such other documents related to the Works as may be agreed in writing between the Parties from time to time.

(b) Bank Guarantee” shall mean a bank guarantee to be provided by the Contractor to guarantee the proper performance of the Works.

(c) “Certificate of Final Acceptance” shall mean the certificate issued by the Employer certifying that the Works have reached the stage of Final Acceptance as described in Article 20 hereof. Such certifications shall not be unreasonably withheld.

(d) Construction Schedule” shall mean the schedule for the commencement, execution and completion of the whole Project which contains the Work Schedules of the Contractor and the Sub-contractors.

(e) Contractor” shall mean ____________

(f) “Contractor’s Equipment” shall mean all appliances and things of whatsoever nature (other than Temporary Works) required for the execution of the Works and the remedying any defects therein, but does not include Plant, materials or other things intended to form part of the Permanent Works.

(g) “Drawings” shall mean the Employer’s drawings of the Works as listed in Appendix B.

(h) Employer” shall mean ____________.

(i) “Field Staff and Start Up Personnel” shall mean all personnel furnished by the Contractor for the construction of the Project, as listed in Appendix C and who have been approved by the Employer as herein provided.

(j) “Final Acceptance” shall mean the state when the Works have reached a stage of completion in accordance with the Agreement and can be reasonably used for the purpose for which they were intended and have been so certified by the Employer.

(k) Final Contract Bill of Quantities” shall mean the bills containing the list of the quantities and descriptions of the Works measured based on the Final Contract Drawings and the Final Contract Specifications.

(m) LOI” shall the meaning as defined in recital D of this Agreement

(n) Lump Sum Fixed Price” shall have the meaning as defined in Article 6.1 hereof.

(o) Party” shall mean Contractor or Employer

(p) Parties” shall mean Contractor and Employer

(q) Project” shall mean Workshop, Maintenance Center and the Guard Post.

(r) “Permanent Works” shall mean the permanent works to be executed in accordance with the Agreement.

(s) “Plant” shall mean machinery, apparatus and the like intended to form or forming part of the Permanent Works.

(t) Project Insurance” shall have the meaning as defined in Article 18.2 of this Agreement.

(u) Site” shall mean the area at ____________ as designated by Employer where the Project will be located.

(v) “Specifications” shall mean the specifications of the Works included in the Appendix A and any modification thereof or addition thereto as made by the Employer or submitted by the Contractor and approved by the Employer.

(w) Sub-contractor(s)” shall mean any person or company approved by Employer, to whom a part of the Works is subcontracted by Contractor for the purpose of carrying out the works.

(x) “Temporary Works” shall mean all temporary works of whatever kind (other than Contractor’s Equipment) required in on or about the execution and completion of the Works and the remedying of any defects therein but not forming part of the Permanent Works.

(y) Works” shall have the meaning as defined in Article 2 below

(z) “Work Schedule” shall mean the schedules for the commencement, execution and completion of the respective Scope of Works of the Contractor and the Sub-contractor which all together form the Construction Schedule.

1.2 Reference to any Article or Appendix must be referred to Article of, or Appendix to, this Agreement;

1.3 If it is deemed necessary by the context of the sentence, a singular includes plural, vice versa, and a gender includes all genders.

Article 2

SCOPE OF WORK

The scope of works of this Agreement shall cover the provision of all labor, material, plant, equipment, supervision, detailing, calculations, shop drawings, setting out, temporary works, and testing for the construction of the structure and architectural work [maintenance center/guard post], with machine rooms, management offices and operation facilities] (as described in the Drawings) and including all structural, architectural and all builders work including interior and furniture in connection with the Works, whether or not shown on the Drawings but reasonably inferred from the Drawings and including ancillary works and external works; the planning, preparation, management and coordination of the Construction Schedule, including but not limited to:

(to be filled in accordance with the drawing and project specifications)

collectively referred to as the “Works

Article 3

EFFECTIVE DATE

3.1 The Effective Date of the Agreement shall be date on which all of the following conditions have been fulfilled:

a. the Agreement has been signed by the Parties;

b. Contractor has furnished to Employer the Bank Guarantee referred to in Article 8 hereof;

c. [advance payment has been made by the Employer as evidenced by the signing of the (LOI)].

3.2 Employer shall advise Contractor of the Effective Date promptly after its occurrence by sending to Contractor written notice hereof.

3.3 In the event the Effective Date has not occurred within [7] days from the date first above stated for reasons other than item (b) above, the Parties shall convene and discuss the appropriate course of action to be adopted.

Article 4

VARIATIONS

4.1 The Employer may issue instructions requiring a variation and it may sanction in writing any variation made by the Contractor otherwise than pursuant to an instruction of the Employer. No variation required by the Employer or subsequently sanctioned by him shall vitiate any of the Agreement.

4.2 The term “variation” as used in this Agreement means the alteration or modification of the design, design criteria, quality or quantity of the Works which deviate from the Final Contract Drawings and Final Contract Specifications and includes the addition, omission or substitution of any part of the Works, the alteration of the kind or standard of any of the materials or goods to be used in the Works, changing the levels, lines, positions or dimensions of any part of the Works, and removal from the Site of any part of the Works, materials or goods executed or brought thereon by the Contractor for the purposes of the Works other than work, materials or goods that are not in accordance with the Contract. Notwithstanding the foregoing, any change technically required to implement the design shall not be deemed as variation.

4.3 Upon receipt of a notice or instruction in writing from the Employer advising the Contractor of a proposed variation, the Contractor shall respond to this instruction within 7 (seven) days. The Contractor shall within reasonable time:

(a) advise the Employer of the effect which the Contractor anticipates that the variation shall have on the construction program and timing; and

(b) provide an estimate of the cost (including delay costs, if any) of the proposed variation.

4.4 Unless the Employer and the Contractor agree upon the price for a variation, the variation directed or approved by the Employer under Sub-paragraph 4.3 of this Condition of Contract shall be valued under Sub-clause 4.5.

4.5 All variations required in writing by the Employer or subsequently sanctioned by him and by the Employer in the case of variations resulting in substantial extra costs shall be measured and valued by the Employer who shall give to the Contractor an opportunity of being present at the time of such measurement and of taking such notes and measurements as the Contractor may require. The valuation of variations, unless otherwise agreed shall be made in accordance with the following rules:

(a) The prices in the Final Contract Bill of Quantities shall determine the valuation of work of similar character executed under similar conditions as work priced therein;

(b) The said prices, where work is not of a similar character or executed under similar conditions as aforesaid, shall be the basis of prices for the same so far as may be reasonable, failing which a fair determination thereof shall be made by the Employer;

(c) Where the work related to extra costs incurred by the Contractor for delay or disruption, the valuation shall include a reasonable amount for overhead, but shall not include profit or loss of profit;

(d) Where work can not properly be measured and valued, the Contractor shall be allowed to apply day work rates on the prices prevailing when such work is carried out (unless otherwise provided in the Final Contract Bill of Quantities);

(e) The prices in the Final Contract Bill of Quantities shall determine the valuation of items omitted; provided that if omissions substantially vary the conditions under which any remaining items of the Works are carried out the prices for such remaining items shall be valued under rule (b) of this paragraph 4.5.

4.6 Effect shall be given to the measurement and valuation of variations under paragraph 4.5 of this Agreement by adjustment of the Lump Sum Fixed Price.

4.7 If, on the issue of Certificate of Final Acceptance for the whole of the Works, it is found that as a result of:

(a) all varied work valued under paragraph 4.5 of this Agreement; and

(b) all adjustments upon measurement of the estimated quantities set out in the bill of quantities, excluding adjustments of the Lump Sum Fixed Price made under Article 6 and Article 15.4,

but not from any other cause, there have been additions to or deductions from the Lump Sum Fixed Price which taken together are in excess of 2% of the Lump Sum Fixed Price then and in such event, there shall be added to or deducted from the Lump Sum Fixed Price such further sum as may be agreed between the Employer and Contractor.

Article 5

CONSTRUCTION SCHEDULE

5.1 The duration of the execution and completion of the Works shall be ____________ months from the Effective Date.

5.2 The Construction Schedule which shall contain the Work Schedules of the Contractor shall be prepared by the Contractor, approved by the Employer and shall be an integral part of this Agreement as Appendix D.

Article 6

LUMP SUM FIXED PRICE

6.1 The contract sum is US$____________ and Rp____________ excluding Value Added Tax but inclusive of Income Tax shall be a lump sum fixed price (“Lump Sum Fixed Price”) and no variation in this price shall be accepted prior to “Ready for Construction”; except for the following circumstances:

(a) If there is any change of Government regulation which materially affects the cost of the Contractor, such as devaluation. If there is a devaluation, the remaining value of the Rupiah portion of the Lump Sum Fixed Price for parts of the Works which have not been executed shall be adjusted accordingly as mutually agreed by the Parties.

(b) If there is any change of design, the Lump Sum Fixed Price shall be adjusted accordingly as mutually agreed by the Parties.

However, any change and/or additional work and services required to satisfactorily complete the Works pursuant to the Agreement provided that such change is required not due to the result of the change of design, shall not change the Lump Sum Fixed Price.

Article 7

TERMS OF PAYMENT

7.1 An advance payment equal to ____________% (____________ percent) of the Lump Sum Fixed Price shall be paid by the Employer to the Contractor upon the signing of the LOI; but subject also to:

(c) acceptance of the Bank Guarantee,

(d) acceptance of the first invoice for the advance payment; and

(e) acceptance of the Bank Guarantee for the same amount as the final payment.

7.2 ____________% of the Lump Sum Fixed Price shall be spread and paid monthly based on progress of the Works by [telegraphic transfer] to a bank designated by Contractor. Bank transfer charges to Contractor’s designated bank shall be for [Employer’s account]. Employer shall not be responsible for any delays by Contractor’s designated bank in crediting fund remitted by Employer.

Monthly progress of the Works shall be jointly assessed and agreed by the Contractor and Employer at the end of each month, and an Employer’s acceptance signed by the Board of Directors of the Employer shall be issued confirming the agreed progress.

If this Agreement is terminated, payment shall be made in accordance with Article 24 hereof.

7.3 Without prejudice to the provisions of Article 7 hereof, upon Final Acceptance, Employer shall pay to Contractor the final ____________ percent (____________%) of the Lump Sum Fixed Price, less any sum that may be necessary to settle any unsettled claims which Sub-contractors or other third parties may have against Contractor. Prior to such payment, and as a condition thereof, Employer and Contractor shall have settled, and Contractor shall have paid, any claims outstanding as of the date of such payment of Employer against Contractor hereunder or Contractor shall have provided to Employer a bank guarantee issued by a reputable international or national bank registered or licensed to do business in Indonesia acceptable to the Employer in the amount of the final payment in the form attached hereto as Appendix H, which guarantee may be drawn against any written claim by Employer at any time during its validity period.

7.4 At the time of issuance of the notice of Final Acceptance, and of the payment under Article 7.3, and as a condition thereof, Employer shall have received from Contractor:

(a) A written declaration, together with such supporting documents as Employer may reasonably require, that the Contractor thereby releases Employer from, and that Contractor has obtained from its sub-contractor and any persons claiming by, through, under or against Employer who might have an interest in the Works adverse to Employer legally effective releases of, all claims and liens against Employer, the Project and/or the Works arising under, or by virtue of this Agreement; and

(b) A written declaration, together with such supporting documents as Employer may reasonably require, that all claims and demands by third parties against, and debts incurred by Contractor in respect of this Agreement have been settled and that all tax returns and declarations required to be filed by Contractor have been filed with the appropriate taxing authorities and all such taxes imposed by any such taxing authority have been paid or otherwise provided for, if it is contested in good faith

Article 8

BANK GUARANTEE

8.1 Bank Guarantee issued by a reputable international or national bank registered or licensed to do business in Indonesia acceptable to the Employer, and substantially in a form satisfactory to the Employer, equal to ____________% of the Lump Sum Fixed Price is to be provided prior to the Effective Date, unless agreed otherwise by the Employer.

8.2 The Bank Guarantee shall be issued prior to the Effective Date and remain valid for ____________ calendar months from the date of the Certificate of Final Acceptance.

8.3 ____________% of the Bank Guarantee shall be released upon issuance of certificate of [Final Acceptance] and the remaining ____________% shall be released [12] calendar months after the date of the Certificate of Final Acceptance.

Article 9

READY FOR CONSTRUCTION

The term “Ready for Construction” shall mean the completion of the Appendices as listed in Article 13 hereunder. [All Appendices including Drawings and Specifications shall be agreed and signed by the Employer and the Contractor.]

Article 10

COMPOSITION OF FIELD STAFF PERSONNEL AND START UP PERSONNEL

10.1 The personnel to be supplied by the Contractor, hereinafter referred to as Field Staff Personnel, shall comprise the personnel listed in Appendix C. Such personnel shall be subject to approval by Employer as provided for in Article 11 hereof. Appendix C shall also set forth the classification, projected number and duration of services of Field Staff Personnel which Contractor shall provide.

10.2 Subject to the provisions of Articles 11.2 and 11.3, Contractor may make reasonable adjustments to the classification, number and duration of all services of such personnel as are required for the Project, provided that Contractor must demonstrate that any change in the number qualifications or classification stay of such personnel shall not (i) be detrimental to the timely completion of the Project, (ii) result in a substitution of less qualified personnel in the classifications set forth in Appendix C hereto, or (iii) result in Works of lower quality.

10.3 Contractor's Start Up Personnel for supervision of initial operation is also listed in Appendix C which sets forth classification, projected number and duration of service of such personnel.

10.4 Compensation and all other expenses for Field Staff Personnel, Start Up Personnel and any additional personnel required by Contractor, whether supervisory or otherwise, are included in the Lump Sum Fixed Price set forth in Article 6 hereof.

10.5 Such Field Staff Personnel and Start-Up Personnel will be assigned by Contractor in such order and as promptly as necessary to assure the most diligent prosecution of the Works.

Article 11

APPROVAL AND TERMINATION OF FIELD STAFF AND START UP PERSONNEL

11.1 All Field Staff and Start Up Personnel shall be competent in their respective field of specialization and shall have adequate experience and qualifications for their assignment. Contractor shall be responsible for determining that such personnel and their dependents are physically fit before assignment.

11.2 No Start Up or key Field Staff Personnel shall be assigned by Contractor until Contractor has submitted for approval by Employer, and Employer has approved, a statement of the classification, qualifications, experience and expected length of service of each of the persons proposed for such assignment.

11.3 None of the Start Up or key Field Staff Personnel shall be withdrawn from their assignment there under prior to the conclusion of such assignment without the prior approval of Employer.

At the request of Employer, Contractor shall dismiss any Field Staff or Start Up Personnel which Employer deems incompetent, careless or insubordinate or whose continued employment is deemed by Employer as detrimental to the public interest. Such request shall be in writing and shall state the reasons therefor. Contractor shall promptly replace such personnel and the costs of such replacement shall be borne by Contractor.

Article 12

COORDINATION

The Contractor shall manage and be responsible for the schedule of the implementation of its Scope of Works and shall be responsible for the coordination of the implementation of the schedules of the Sub-contractors in compliance with the Construction Schedule.

Article 13

CONTRACTOR’S OBLIGATIONS

13.1 The Contractor shall upon and subject to this Agreement carry out and complete the Works shown upon the Drawings and Specifications and described by or referred to in Appendix B in every respect to the reasonable satisfaction of the Employer.

13.2 If the Contractor shall find any discrepancy in or divergence between the Drawings and Specifications, it shall immediately give to the Employer a written notice specifying such discrepancy or divergence, and the Employer shall issue instructions in regard thereto. Generally, in the event of a discrepancy, the order of priority to be followed shall be:

- The Agreement

- Appendix A: Project Specifications

- Appendix B: Drawings and Specifications

- Appendix C: List of Field Staff and Start Up Personnel

- Appendix D: Construction Schedule

- Appendix E: Payment Schedule

- Appendix F: Insurance

- Appendix G: Form of Performance Bank Guarantee

- Appendix H: Form of Bank Guarantee for Final Payment

- Appendix I: Final Contract Specifications

- Appendix J: Final Contract Drawings

13.3 The Contractor acknowledges that the Employer may, after consultation with the Contractor, make changes in, and update the Construction Schedule prepared and issued and the consequences which may arise as the result of such changes shall be agreed upon by the Parties.

13.4 The Contractor shall confine operations at the Site to areas designated by the Employer, and permitted by law, ordinances, permits and the Agreement and shall not unreasonably encumber the Site with any materials or equipment.

13.5 If any part of the Works depends, for its proper execution or results, the Contractor shall, prior to proceeding with the Works, promptly provide a written report to the Employer detailing any apparent discrepancies or defects in such work that render it unsuitable for such proper execution and results.

13.6 If the Contractor is of the opinion that compliance with any directions or instructions of the Employer will adversely affect the design, contravene any building requirements, codes or other form of regulation, adversely affect any permit or license issued, or to be issued, in respect of the Works, it shall within 7 (seven) days of receipt of the direction or instruction make a written submission to the Employer explaining the adverse effect, and the direction or instruction shall not take effect unless confirmed by the Employer.

Article 14

EMPLOYER’S OBLIGATIONS

The Employer shall, in addition to complying with its other obligations hereunder:

(a) allow the Contractor to have access to the Site as required by the Contractor in the performance of its obligations under the Contract;

(b) examine and review all such studies, reports, drawings, schedules, cost estimates, proposals and other documents as may be presented from time to time by the Contractor to the Employer and make suggestions for improvements and give its approvals in writing pertaining thereto or state its rejections in the event of any inconsistency with the Agreement, all to be made within a reasonable time so as not to delay the completion of the Works; and

(c) give prompt written notice to the Contractor whenever the Employer notices or finds any defects in the Works.

Article 15

MATERIALS, GOODS AND WORKMANSHIP TO CONFORM TO DESCRIPTION, TESTING AND INSPECTION

15.1 All materials, goods and workmanship shall be of the respective kinds and standards described in Appendix I.

15.2 The Contractor shall upon the request of the Employer furnish it with vouchers to prove that the materials and goods comply with the preceding paragraph of this Article.

15.3 A stage inspection procedure shall be established on commencement of the Works by the Employer. Should the Contractor cover up any part of the Works which should have rightly been inspected before hand, it shall be responsible for all costs to open such part of the Works for inspection and the cost of subsequent rectification, provided that the response to the Contractor’s request for a stage inspection has not been unreasonably delayed by the Employer.

15.4 The Employer may issue instructions requiring the Contractor to open up for inspection any part of the Works covered up or to arrange for or carry out any test of any materials or goods (whether or not already incorporated in the Works) or of any executed part of the Works, and the cost of such opening up or testing (together with the cost of making good in consequence thereof) shall be added to the Lump Sum Fixed Price unless the inspection or test shows that the works, materials or goods are not in accordance with the Agreement, or the Employer was not notified of a request for a stage inspection.

15.5 The Employer may issue instructions in regard to the removal from the Site of any part of the Works, materials or goods which are not in accordance with the Agreement.

Article 16

LIMITATION OF LIABILITY AND CONSEQUESTIAL DAMAGES

16.1 Neither Employer nor Contractor shall be liable for loss of profits, loss of interest, loss of production, or any other indirect or consequential damages arising from their respective performance under this Agreement.

16.2 The aggregate total limit of Contractor’s liability under and in connection with the Agreement shall be [* %] of the Lump Sum Fixed Price.

16.3 Such limitation, however, shall not apply in the event of termination by Employer for Contractor’s default under Article 24.2 (c) or on the occurrence of any of the events in respect of which Contractor is liable to indemnify Employer as provided for in Article 17, or Contractor’s abandonment of the Works, or in the event of damage or injury is caused by Contractor’s gross negligence or willful act.

16.4 The limitation of Contractor’s liability hereunder relates solely to payments made by Contractor to Employer pursuant to this Article, and shall be without prejudice, and in addition to, any rights which Employer may have against any third parties, and any such recovery by Employer against any such third parties shall not diminish Contractor’s liability under this Article 16.

16.5 The limitations of this Article 16 shall extend to the benefit of Contractor’s parent and affiliated companies, which companies shall not be deemed to be “third parties” for the purposes of Article 16.4 above.

Article 17

INJURY TO PERSONS AND PROPERTY AND EMPLOYER INDEMNITY

17.1 Insofar as compliance with the requirements of the Agreement permits, the Contractor shall in relation to the Works:

(a) provide all things and take all measures necessary to protect people and property;

(b) avoid unnecessary interference with the passage of people and vehicles; and

(c) prevent nuisance and unreasonable noise and disturbance.

17.2 The Contractor shall be liable for, and shall indemnify the Employer against, any expense, liability, loss, claim or proceedings whatsoever in respect of personal injury to or the death of any person whomsoever, except the employees of the Contractor or of its Sub-contractors, arising out of or in the course of or caused by the carrying out of the Works, unless due to any act or neglect of the Employer or of any person for whom the Employer is responsible.

17.3 The Contractor shall be liable for, and shall indemnify the Employer against, any expense, liability, loss, claim or proceedings whatsoever in respect of any injury to or death of any employees of the Contractor or of its Sub-Contractor or loss of or damage whatsoever to any property, real or personal, of the Contractor or of its Sub-contractor or of the employees of the Contractor or of Sub-contractor, in so far as such injury, death, loss or damage arises out of or in the course of or by reason of the carrying out of the Works.

17.4 The Contractor shall be liable for, and shall indemnify the Employer against any expense, liability, loss, claim or proceedings whatsoever in respect of any damage to or loss of property incurred by any third party, including the damage to or loss of the construction equipment of the Sub-contractor which are not covered by insurance(s) specified under Article 18 hereof (including any deductibles, exclusions or any amount in excess of the insured amount) arising out of the act or omission of the Contractor in carrying out the Works. For assuming the aforementioned expense, liability, loss or claim, the Employer shall have the right to deduct any amount due or become due to the Contractor.

Article 18

INSURANCE

18.1 The Contractor shall arrange, comply with and pay in full the JAMSOSTEK Insurance for all the Contractor’s workers involved in the Project.

18.2 The Contractor shall arrange Builder’s All Risk Insurance and Third Party Liability Insurance (collectively “the Project Insurance”) to cover the Project. The insurance shall be in the joint name of the Employer and the Contractor and shall satisfy all requirements of the Agreement. Copies of the Project Insurance policies shall be made available to the Employer before the Works are commenced at the Site.

Article 19

COMPLETION

The period for final measurement and valuation of the completion of the Project shall be ____________ from the date of Final Acceptance of the Works.

The Defects Liability period is ____________ from the day stated in the Certificate of Final Acceptance of the Works.

Article 20

FINAL ACCEPTANCE AND DEFECTS LIABILITY

20.1 The Contractor shall execute the Works to Final Acceptance by the Date of Final Acceptance.

20.2 When in the opinion of the Employer the Works have reached Final Acceptance state, it shall forthwith issue a certificate to that effect and Final Acceptance of the Works shall be deemed for all the purposes of this Agreement to have taken place on the day stated in such certificate. Upon the Date of Final Acceptance the Contractor shall give possession of the Site and Works to the Employer.

20.3 The Defects Liability period shall commence on the Date of Final Acceptance.

As soon as possible after the Date of Final Acceptance, the Contractor shall rectify any defects or omission in the Works under the Contract existing prior to, at or after Final Acceptance.

At any time prior to ____________ day after the expiration of the Defects Liability period, the Employer may direct the Contractor to rectify any omission or defect in the Works under the Contract existing prior to, at or after the Date of Final Acceptance which becomes apparent prior to the expiration of the Defects Liability period. The direction shall identify the omission or defect and state a date by which the Contractor shall complete the work of rectification and may state a date by which the work of rectification shall commence. The direction may provide that in respect of the work of rectification there shall be a separate Defects Liability period of a stated duration not exceeding the period of ____________ months. The separate Defects Liability period shall commence on the date the Contractor completes the work of rectification. This paragraph shall apply in respect of the work of rectification and the Defects Liability period for that work of rectification, provided that no Defects Liability period in respect of any part of the Works shall extend beyond ____________ [(____________) months] from the date the Employer certifies Final Acceptance for the whole of the Works, or the last Section thereof, provided further that Contractor shall commence the work of rectification within [____________ days] from the date the Employer directs the Contractor to rectify the defect.

If the work of rectification is not commenced or completed by the stated dates, the Employer may have the work of rectification carried out at the Contractor’s expense, but without prejudice to any other rights that the Employer may have against the Contractor with respect to such omission or defect and the cost of the work of rectification incurred by the Employer shall be a debt due by the Contractor, payable upon Employer’s demand.

If it is necessary for the Contractor to carry work of rectification, the Contractor shall do so at times and in a manner which cause as little inconvenience to the occupants or users of the Works as is reasonably possible.

20.4 When in the opinion of the Employer any defects, shrinkage or other faults which he may have required to be made good under this paragraph shall have been made good he shall issue a certificate to that effect, and completion of making goods defects shall be deemed for all purposes of this Agreement to have taken place in the day named in such certificates.

20.5 The Contractor shall keep the Site and the Works clean and tidy. The Contractor shall regularly remove all rubbish and surplus materials. The Contractor shall also coordinate the cleaning and removal of the rubbish and surplus materials of Sub-contractor at their respective costs.

Within ____________ (____________) days after the Date of Final Acceptance the Contractor shall remove all of its Temporary Works and the Contractor’s Equipment, except the Contractor’s Equipment necessary for maintenance of the Works.

20.6 If urgent actions are necessary to protect the Works under the Agreement, other property or people and the Contractor fails to take the action, the Employer may take the necessary action. If the action is an action which the Contractor should have taken at the Contractor’s cost, the cost incurred by the Employer shall be a debt due by the Contractor, payable upon Employer’s demand.

Article 21

ACCESS FOR EMPLOYER TO THE WORKS

The Employer and its representatives shall at all reasonable times have access to the Site and the Works and to the workshops or other places of the Contractor where the Works are being prepared and when the Works are to be so prepared in workshops or other places of a Contractor’s contractor and subcontractor. The Contractor shall by a term in the sub-contract so far as possible secure a similar right of access to those workshops or places for the Employer and its representatives and shall do all things reasonably necessary to make such rights effective.

ARTICLE 22

CONTRACTOR’S ORGANIZATION

Upon the execution of the Agreement, Contractor shall submit to Employer a chart showing in general the corporate structure and the executive and administrative organization, duties and personnel to be employed in connection with the Works. The data furnished shall be supplemented as additional information becomes available.

Article 23

TERMINATION

24.1 Termination Prior To Effective Date

Employer shall have the right to terminate the Agreement at any time prior to the Effective Date. The termination of the Agreement prior to the Effective Date by Employer shall be effected by fourteen [(*) days] prior written notice to Contractor, upon the expiration of which time the Agreement shall be automatically canceled without obligation of either party to the other. Until the Effective Date, the parties shall not be obligated nor shall Contractor be authorized to commence performance hereunder, and they shall incur no financial obligation of any nature whatsoever to each other under the Agreement.

24.2 Termination By Employer After Effective Date

(a) General Provisions

Employer shall have the right to terminate the Agreement in whole or in part at any time for convenience whenever for any reason Employer shall determine that such termination is in the best interests of Employer by issuing a written notice to the Contractor that the Employer intends to terminate this Agreement upon the expiry of not less than [45 days] from the date of such notice. Employer shall also have the right to terminate the Agreement for default of Contractor. All such terminations shall be effected by delivery to Contractor of a notice of termination specifying whether such termination is for the default of Contractor or for convenience of Employer and the date upon which such termination becomes effective. On receipt of such notice of termination, Contractor shall, unless the notice directs otherwise, immediately discontinue all Works and the placing of orders for materials, equipment and supplies in connection with the performance of the Works, and shall, if requested, make every reasonable effort to procure cancellation of existing commitments upon terms satisfactory to Employer, and shall thereafter do only such work as may be necessary to preserve and protect Works already in progress and to protect material and equipment at the Site or in transit thereto. If requested by Employer, Contractor shall assist in disposing of Contractor’s equipment, tools and materials and supplies. If the Agreement is terminated under this Article, Employer may, upon written notice to Contractor, enter within normal working hours upon the Site and Contractor’s premises where the Works is being performed and, for the purpose of completing the Works, take possession of any or all documents, books, records, materials, tools, machinery, equipment and appliances which may be owned by or may be in the possession of Contractor, and which relate to the Project, and Employer shall have all rights and obligations thereafter of Contractor as provided in the rental agreements, and necessary or proper for the completion of the Works, and Employer may complete or employ any other person or persons to complete the Works.

(b) Termination for Convenience of Employer-Financial Consequences

Upon termination for convenience of the Agreement in whole or in part by Employer, final settlement of all claims of Contractor arising out of the Agreement and in respect of the termination shall be made as follows:

(i) Employer shall either (1) immediately cease all further Works, except such Works as the Employer may specify in the termination notice for the sole purpose of protecting that part of the Works already executed, (2) assume and become liable for obligations, commitments and claims which Contractor may have theretofore in good faith undertaken or incurred in connection with the Works and in accordance with the provisions of the Agreement, and Contractor, as a condition of receiving payment mentioned in this Article 24, shall execute and deliver all such documents and supplies and take such steps as Employer may require for the purpose of fully vesting in Employer the rights and benefits of Contractor under such obligations, or (3) instruct Contractor to cancel any such obligations and commitments and pay to Contractor such reasonable, proper and unavoidable cancellation charges that Contractor must pay to its sub-contractor and suppliers as a result of such cancellation.

(ii) Employer shall reimburse Contractor for such further expenditures after the date of termination for the storage, protection and disposal of Contractor’s property and for accounting services in connection with the settlement of the Agreement as are required or approved by Employer.

(iii) In the event Employer enters upon the Site for purpose of completing the Works as provided above, Employer shall pay reasonable rentals to Contractor for construction equipment which Contractor owns and controls and which is at the Site. Employer shall, on completion of the rental, return to Contractor said construction equipment in the condition it was in when such rental by Employer commenced, normal wear and tear excepted.

(iv) Employer will be paid that proportion of the Lump Sum Fixed Price which the Works actually completed bears at the date of termination to the entire Works under the Agreement less any such payments previously made and less any sum that may be necessary to settle any unsettled claims in connection with the Agreement including any claims Employer may have against Contractor under the Agreement.

(v) At the time of final payment and as a condition thereof, Contractor shall furnish releases as required in Article 7.4.

(c) Termination for Default of Contractor-Financial Consequences

If a petition in bankruptcy should be filed by or against Contractor, or if Contractor should make a general assignment for benefit of creditors, or if a receiver should be appointed on account of Contractor’s insolvency, or if Contractor shall fail to perform its obligations under the Agreement and should fail, neglect or refuse promptly to commence all necessary steps to remedy such default within [14] calendar days after receipt by Contractor of Employer’s written notice of such default, Employer may without prejudice to any other right or remedy available to Employer terminate the employment of Contractor. In such case Contractor shall not be entitled to receive any further payments except as may be authorized by Employer provided for in Paragraph 24.2 (b) (i) and (v) above. In no event shall Contractor be entitled to any further payment on account of the unearned portion of the Lump Sum Fixed Price. Contractor and its sureties shall be and remain liable to Employer for any excess costs reasonably incurred by Employer in completing the Works and for losses for any kind that Employer may have suffered by such default; and Employer may deduct any payment due to Employer, in respect of losses that Employer may have suffered due to Contractor’s default from the aforedescribed payments due to Contractor.

24.3 Termination By Contractor For Cause

In the event that Employer shall fail to perform the obligations to be performed on its part as specified in this Agreement, and if Contractor shall fail, neglect or refuse to commence appropriate measures to remedy such default within [14] calendar days from the date of receipt by Employer of Contractor’s written notice of such default, then and in such event Contractor shall have the right to terminate the Agreement upon giving written notice of termination to Employer specifying the reasons for termination and the date on which such termination becomes effective. Upon such date, or an earlier date if so requested by Employer, Contractor shall immediately discontinue all Works and the placing of orders for materials, equipment and supplies in connection with the Works, and shall, if requested, make every reasonable effort to procure cancellation of all existing commitments upon terms satisfactory to Employer, and shall thereafter do only such work as may be necessary to preserve and protect Works already in progress and to protect the material and equipment at the Site or in transit thereto. If requested by Employer, Contractor shall assist in disposing of Employer’s equipment, tools, materials and supplies. If the Agreement is terminated by Contractor under this Article, Employer may, upon prior written notice to Contractor, enter within normal working hours upon the Site and Employer’s premises where the Works is being performed, and, for the purpose of completing the Works, take possession of any or all documents, materials, tools, machinery, equipment and appliances, which may be owned by or may be in the possession of Contractor, and which relate to the Project, and Employer shall have all rights, obligations and liabilities thereafter of Contractor as provided in rental agreements and necessary of proper for the completion of Works, and Employer may complete the Works. Upon such termination of the Agreement by Contractor, final settlement of all claims of Contractor arising out of the Agreement shall, subject to the claims of Employer hereunder, be made as provided in Paragraph 24.2 (b) (i) through (iv) of this Article 24. At the time of final payment, and as a condition thereof, Contractor shall furnish releases as required in Paragraph 7.4.

24.4 In the event of termination hereunder for any reason, Employer may request Contractor to complete any of the Works or other services on terms to be mutually agreed.

24.5 Employer and Contractor waive the provisions of Article 1266 of the Indonesian Civil Code only to the extent required to terminate this Agreement without the need for a prior court order.

24.6 Contractor hereby agrees that the termination amounts payable to Contractor under Article 24.2 (b) or Article 24.3 as the result of termination of this Agreement pursuant to Article 24.2 (b) or Article 24.3 hereof constitute fair and reasonable compensation for any loss damage, costs and expenses and overhead cost it may suffer and loss of potential profits as a result of termination of this Agreement; and Contractor shall accept the payment of the termination amount specified in this Article 24 as a full discharge of the Employer’s obligations under this Agreement resulting from the termination of this Agreement for any reason.

Article 24

FORCE MAJEURE

25.1 Contractor shall be exonerated for delays in performance hereunder and shall not be charged with liquidated or other damages or liability as provided in the Agreement because of any delays in the completion of the Works due to force majeure defined herein as unforeseeable causes beyond the control and without the fault or negligence of Contractor, including, but not restricted to acts of God, declared or undeclared war, riots, civil commotion, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, despite Contractor’s best efforts and Contractor’s compliance with all necessary documentary requirements, or unusual severe weather, or delays of Sub-contractor or suppliers due to such causes, or failure of Employer to approve plans or to provide ingress or egress to the Site as herein required; provided that Contractor shall, within [10] days from the beginning of any such delay, notify Employer in writing of the causes of delay. Employer shall examine the facts and the extent of the delay and the time for completing the Works shall be extended to the extent justified by the above mentioned causes.

25.2 Employer shall be exonerated for delays in performance hereunder, and Contractor shall not be entitled to terminate the Agreement, nor shall Employer be charged with damages or other liability, because of force majeure defined herein as unforeseeable causes beyond the control or without the fault or negligence of Employer, including but not restricted to acts of God, declared or undeclared war, riots and civil commotion, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, or unusual severe weather, or delays of sub-contractor or suppliers due to such causes, or failure of Contractor to perform any obligations on its part; provided that Employer shall, within ten [10] days from the beginning of any such delay, notify Contractor in writing of the causes of delay. Contractor shall examine the facts and the extent of the delay and the time of Employer for performance of its obligations shall be extended to the extent justified by the above mentioned causes and the time for completion of the Works by the Contractor shall be extended to the extent justified by the above mentioned causes.

25.3 In the event that force majeure shall cause a complete cessation of all Works for a continuous period of one hundred eighty (180) days, the parties hereto, upon termination of force majeure, and upon recommencement of Works, shall equitably make such adjustments as may be necessary to reflect any altered circumstances as a result of such force majeure. In case further implementation of the Agreement is impossible or a time when implementation may be possible cannot be reasonably foreseen, then either party may terminate the Agreement but without prejudice to both parties rights and obligations prior to such termination. In the event that either the Contractor or the Employer terminates the Agreement under the provisions of this Article, the Contractor and the Employer shall endeavor to agree on an equitable settlement within [90] days of the date of notification of termination and if such settlement is duly agreed, the Contractor and the Employer shall then agree on an amount, if any, due to Contractor or Employer.

Article 25

LAW AND LANGUAGE OF THE AGREEMENT

26.1 The Agreement shall be construed under and governed by the laws of the Republic of Indonesia.

25.2 The official language of this Agreement shall be English. Except as specifically otherwise agreed by the Parties documents furnished by either party to the other, for approval or otherwise, shall be in English. Except as specifically otherwise agreed by the Parties communications between the parties shall be in English.

Article 26

DISPUTES AND ARBITRATION

27.1 Any dispute, controversy or claim arising out of or relating to the Agreement or the breach, validity of termination thereof, which cannot amicably be settled by the parties hereto, shall be settled by arbitration to be conducted in English in accordance with the Rules of Arbitration and Conciliation of the Republic Indonesia (BANI), before a board of three arbitrators, appointed in accordance with said Rules. The place of arbitration shall be in Jakarta, Indonesia.

27.2 The arbitration shall be final, conclusive and binding upon both parties, and each party shall honor and abide by such award. The parties hereby renounce their rights to appeal from the decisions of the arbitrators and agree that neither party shall appeal to any court from the decision of the arbitrators and accordingly the parties hereby waive the applicability of any provision of Indonesian applicable law which would otherwise give the rights to appeal the decisions of the arbitrators, the parties further renounce their rights to apply to the court to determine any question of law. Judgment 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.

27.3 As far as applicable, performance of the Agreement shall continue during arbitration proceedings unless the Employer or Contractor terminates the Agreement. No payments due or payable by the Employer shall be withheld on account of a pending reference to arbitration unless the Employer’s liability to make such payment or payments is in issue in such arbitration. The Arbitrators shall not make an award which is inconsistent with Article 15 hereof.

27.4 The cost for arbitration shall be allocated between the parties in accordance with the arbitration award.

Article 27

ASSIGNMENT AND SUBCONTRACTS

28.1 Assignment

Neither party shall assign, pledge or make other disposition of the Agreement without first obtaining the prior written consent of the other, provided that such consent is not requested if the Agreement is to be assigned by Employer to its affiliate company or to the lenders providing financing for the Project and the Contractor shall promptly acknowledge any nature of such tendered to the Contractor, as the case may be.

28.3 Approval Of Subcontracts By Employer

Contractor shall not enter into any subcontracts without the prior written consent of Employer and such consent shall not believe the Contractor from any liability or obligation of the Contractor’s under the Agreement.

28.4 Responsibility Of Contractor For Sub-contractor

Contractor agrees that it shall be fully responsible to Employer for the acts, omissions, defaults and neglects of its Sub-contractor, agents, servants or workmen as if the work performed by Sub-contractor, agents, servants or workmen were performed directly by Contractor.

Article 29

SUSPENSION OF WORK

29.1 Contractor shall at any time on receiving written notice from Employer suspend the whole or any portion of the Works as may be directed by Employer, and such suspension shall not in any way terminate the Agreement. The Construction Schedule shall be appropriately extended as mutually agreed to reflect such suspension, and the extra cost, if any, incurred by Contractor by reason of suspension of the Works as requested by Employer shall be borne and paid for by Employer unless the suspension is:

(a) necessary for the safety of the Works or any part thereof; or

(b) necessary as a result of some breach of Agreement on the part of Contractor in which the extra cost and all losses and damages incurred shall be the responsibility of Contractor; or

(c) necessary for inspection or testing of equipment, materials and workmanship, provided the delay is no longer than is required by the provisions of the Agreement or than is necessary for its administration in a reasonable manner.

29.2 In case a suspension lasts for more than 180 consecutive days, the parties shall consult as to the course of action to be followed.

Article 30

CAPTIONS

The captions used in the Agreement are inserted only as a matter of convenience and reference and do not affect interpretation and are not a part of the Agreement and in no way define, limit or prescribe the scope of the Agreement, nor the intent of any provisions thereof.

Article 31

NOTICES AND LEGAL ADDRESS

Any written notice hereunder may be given by either Employer or Contractor to the other either by personal delivery or by facsimile addressed to the other party at the address below specified or to such other address which may be specified in writing from time to time.

EMPLOYER

In the case of EMPLOYER:

PT. ____________

____________th Floor, ____________

Jl. ____________

____________

Telephone : ____________

Telex : ____________

Telefax : ____________

Attn. : ____________

CONTACTOR

In the case of CONTRACTOR:

Telephone :

Telefax :

Attn. :

Any notice, demand or other communication given or made shall be deemed duly given or made if personally delivered against written receipt or if transmitted and clearly received by facsimile transmission (as confirmed by a transmission report stating the correct facsimile number and number of pages and that such transmission was successfully transmitted).

Both parties shall notify the other party any changes to their address, before such notification is made, any announcement, notice and demand to the other party shall be valid if they are sent to above addressed.

Article 32

ENTIRETY OF CONTRACT: AMENDEMNT

The Agreement executed by Employer and Contractor shall constitute the full agreement between the parties hereto. No verbal representation of any officer, agent or employees of either party either before or after the execution of the Agreement shall affect or modify any right or obligation hereunder and no promises or representations made by personnel of either party shall be binding unless confirmed in writing and signed by authorized representatives of the Employer or Contractor as the case may be.

Article 33

SEVERABILITY

In the event any provision of the Agreement shall be found to be in contradiction to any statute, regulation or decree of the Republic of Indonesia, the same shall not invalidate the remainder of the Agreement and the parties shall mutually agree on a substitute provision which shall be in accordance with the requirements of Indonesian law and consistent with the intent of the original provision.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed and signed in triplicate originals in their respective names by their duly authorized representatives on the date first above written.

For and on behalf of For and on behalf of

CONTRACTOR ____________

___________________________________

Name:

Title:




_________________________________

Name:

Title:

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