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Exhibit 10.23
DATED JULY 6, 2000
IASIAWORKS (HK) LIMITED
AND
PILLER GmbH GERMANY
_____________________________________________
TURNKEY SYSTEM AGREEMENT
_____________________________________________
Squire, Sanders & Dempsey
Rooms 1101-4, St. George's Building
2 Ice House Street
Central, Hong Kong
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TABLE OF CONTENTS
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<TABLE>
<S> <C>
1 DEFINITIONS AND INTERPRETATION 4
2 SCOPE OF AGREEMENT 7
3 OBLIGATIONS AND REPRESENTATIONS OF THE CUSTOMER 8
4 OBLIGATIONS AND REPRESENTATIONS OF THE SUPPLIER 9
5 TITLE TO AND RISK IN THE SYSTEMS 12
6 SYSTEMS WARRANTYS 12
7 PRICES AND TERMS OF PAYMENT 13
8 ASSIGNMENT 14
9 INDEMNIFICATION & LIMITATION OF LIABILITY 14
10 FORCE MAJEURE 14
11 CONFIDENTIALITY 15
12 TERM OF AGREEMENT 16
13 DISPUTE RESOLUTION 16
14 ENTIRE UNDERSTANDING 17
15 FURTHER ASSURANCE 18
16 GOVERNING LAW AND JURISDICTION 18
17 INCONSISTENCY 18
18 TIME OF THE ESSENCE, INCENTIVES AND LIQUIDATED DAMAGES 18
19 NOTICES 19
20 PUBLIC ANNOUNCEMENTS 19
21 SEVERABILITY 19
22 TERMINATION 20
23 VARIATION 22
24 WAIVER 22
25 OTHER PROVISIONS 22
</TABLE>
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ANNEXES
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I. SPECIFICATIONS
II. SYSTEMS AND PRICES
III. DELIVERY SCHEDULE
IV. DOCUMENTATION
V. HONG KONG PREMISES
VI. MAINTENANCE AGREEMENT
VII. SCOPE OF WORK
VIII. SYSTEM STANDARDS & STANDARD TESTING PROCEDURES CHECKLIST
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THIS AGREEMENT is made July 6, 2000 (the "Execution Date").
BETWEEN
IASIAWORKS (HK) LIMITED a company organized under the laws of Hong Kong with
offices at 27th Floor, Hongkong Telecom Tower, 979 King's Road, Quarry Bay,
Hong Kong ("Customer", which term shall, unless excluded by or repugnant to the
subject or context, include its executors, administrators, successors and
permitted assigns);
AND
PILLER GmbH GERMANY, a company organized under the laws of Germany with offices
at Abgunst 24, 37520 Osterode, Germany. ("Supplier", which term shall, unless
excluded by or repugnant to the subject or context, include its executors,
administrators, successors and permitted assigns).
RECITALS
(A) The Supplier represents that it is fully experienced, properly qualified,
duly registered, licensed, organized and equipped to design, sell, deliver,
install, test, and service the Systems.
(B) The Supplier desires to sell, and the Customer to purchase, nine (9)
Systems which shall be designed, manufactured, delivered, installed, tested
and thereafter serviced upon the Customer's request by the Supplier at the
Designated Premises under the terms and conditions of this Agreement.
(C) Each of the Systems to be installed in each of the Designated Premises will
be delivered, installed and tested in accordance with conditions set forth
in subcontracts with the Principal Contractors tasked with the construction
of the buildings at the relevant Designated Premises, in respect of which
the Customer may assign its rights and obligations under this Agreement on
a System-by-System basis.
(D) The Customer has agreed to assign the three (3) Systems destined for Hong
Kong and more particularly described in Annex I ("Hong Kong Systems") and
all rights, obligations and benefits under this Agreement relating to the
Hong Kong Systems to Weelek Company Limited (the "Hong Kong Assignee"),
such Systems to be installed at the Designated Premises in Hong Kong more
particularly set out in Annex V ("the Hong Kong Premises"), and the
Supplier has consented to such an assignment.
(E) It is the intention of the Customer, the Supplier and the relevant assignee
that such parties enter into a novation agreement (containing terms and
conditions approved by the parties thereto) to effect any assignment
contemplated under this Agreement ("Novation Agreement").
AGREEMENT
1. DEFINITIONS AND INTERPRETATION
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1.1 Definitions
Unless the context otherwise requires, in this Agreement and the recitals:
"Agreement"
means this document, any Variation and any Annex to it;
"Annex"
means the initial Annexes attached to this Agreement and also any
amendments thereto, any Annex substituted for an existing Annex or any
new Annex expressly adopted by the parties in accordance with the
provisions of this Agreement;
"Business Day"
means a day that is not a Saturday, Sunday or any other day which is a
public holiday or a bank holiday in the place where an act is to be
performed or a payment is to be made;
"CIF Terms"
means the terms for Cost, Insurance and Freight as contained in
INCOTERMS 2000 (as published by the International Chamber of Commerce
(the "ICC") in September, 1999) which, except as varied by this
Agreement, are expressly deemed to be incorporated into this
Agreement;
"Confidential Information"
means any information (whether in the form of audio, data, text,
images or a combination thereof) that one party may disclose to
another party during the term of this Agreement, whether orally (to be
confirmed in writing within 24 hours) or in writing, regarding the
structure, business, assets, liabilities, operations, budgets and/or
strategies of the disclosing party;
"Delivery Schedule"
means the schedule for completion of production of the Systems ex
works, shipping, placement and achieving operational status of the
Systems as described Annex III;
"Designated Premises"
means such places in Hong Kong, South Korea (likely to be in Seoul),
Taiwan (the Neihu District of Taipei), and Melbourne, Australia as
the Customer shall notify the Supplier at least ninety (90) days
before the applicable scheduled Placement Dates as set forth in Annex
III;
"Dispute"
means a dispute or disagreement arising out of this Agreement;
"Documentation"
means the documentation described in Annex IV as developed or to be
supplied by the Supplier or third parties in respect of or incidental
to the Systems;
"Final Acceptance"
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means the date upon which the Customer or its duly authorized
representative issues a written notice certifying that there are no
reasonably identifiable deficiencies in the functionality of the
Systems as such functionality is set forth in the Specifications, or
that all deficiencies in functionality (which are not of a service or
revenue affecting nature) identified in the course of Provisional
Acceptance have been resolved to its reasonable satisfaction;
"Hong Kong"
means the Hong Kong Special Administrative Region of the People's
Republic of China;
"Maintenance Agreement"
means the agreement contained in Annex VI setting forth the terms and
conditions for the maintenance of the Systems by the Supplier;
"Operational Dates"
means the dates set forth in the Delivery Schedule on which the
Customer shall issue Provisional Acceptance of the Systems;
"Placement Dates"
means the dates set forth in the Delivery Schedule by which the
Supplier shall place the Systems within the relevant Designated
Premises;
"Principal Contractors"
means the persons with primary control over the construction of the
buildings at the relevant Designated Premises, or that are otherwise
so designated, and to whom the Customer may assign its rights and
obligations under this Agreement on a System-by-System basis;
"Provisional Acceptance"
means the completion of acceptance tests performed in a manner
reasonably satisfactory to the Customer, during which the Systems
shall be tested to ensure conformance with the applicable
Specifications;
"Scope of Work"
means the general list of obligations to be performed by the Supplier
as set forth in Annex VII.
"Specifications"
means the technical specifications and performance parameters of
Systems as described in Annex I;
"Standard Testing Procedures"
means the Supplier's standard testing procedures for the Systems as
described in detail in Annex VIII;
"Systems"
means the diesel rotary UPS systems described in the Specifications,
including any corresponding software and programs as may be required
for the diesel rotary UPS systems to function as required and/or
represented; and
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"Variation"
means a variation agreed in accordance with clause 23.
"Warranty Period"
means the period of eighteen (18) months from the Shipping Dates (as
defined in the Delivery Schedule) or twelve (12) months from
Provisional Acceptance of the relevant Systems, whichever is later,
during which the Supplier shall provide a warranty to repair or
replace free of charge any defective components of the Systems at the
sole cost of the Supplier, including any incidental costs related
thereto.
1.2 Interpretation
In this Agreement, reference to:
(a) one gender includes the other genders;
(b) the singular includes the plural and the plural includes the singular;
(c) a person includes individuals, bodies corporate (wherever
incorporated), unincorporated associations and partnerships; and
(d) a statute, regulation or provision of a statute or regulation
("Statutory Provision") includes:
(i) that Statutory Provision as amended or re-enacted from time to
time;
(ii) a statute, regulation or provision enacted in replacement of that
Statutory Provision.
1.3 All monetary amounts are in US Dollars unless otherwise stated and all
payments are to be paid in US Dollars.
1.4 "Including" and similar expressions are not words of limitation.
1.5 Where a word or expression is given a particular meaning, other parts of
speech and grammatical forms of that word or expression have a
corresponding meaning.
1.6 Headings are for convenience only and do not affect the interpretation or
form part of this Agreement.
1.7 If an act must be done on a specified day that is not a Business Day, the
act must be done instead on the next Business Day.
1.8 All references to days and months mean calendar days and calendar months
unless otherwise specified.
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1.9 If any agreement, approval or consent is required or to be given or
obtained under or pursuant to this Agreement, such agreement, approval or
consent must not be unreasonably conditioned, delayed or withheld.
2. SCOPE OF AGREEMENT
The Supplier agrees to sell and the Customer to purchase nine (9) Systems
which the Supplier shall design, manufacture, deliver, install and test at
the Designated Premises, pursuant to the terms and conditions of this
Agreement.
3. OBLIGATIONS AND REPRESENTATIONS OF THE CUSTOMER
The Customer shall:
3.1 make payment to the Supplier in accordance with clause 7, upon the Supplier
performing its corresponding obligations as set forth therein or otherwise
provided in this Agreement.
3.2 bear its own costs and charges of complying with its obligations under this
Agreement.
3.3 give to the Supplier such information that the Supplier may reasonably
require or request so as to enable the Supplier to perform its obligations
under this Agreement, including the provision of information regarding the
locations of the Designated Premises.
The Customer represents and warrants to the Supplier that:
3.4 the Customer shall give Provisional Acceptance upon the completion of
acceptance tests confirming performance of the relevant Systems in
accordance with the Specifications, and shall give Final Acceptance upon
the satisfaction of conditions contained in the definition of Final
Acceptance.
3.5 (a) (i) the area within the Designated Premises will have suitable access
through December 5, 2000, and after the completion of the occupation
permit inspection process, so as to enable the entry of and placing of
the relevant Systems therein, including any temporary structures
starting from the exterior wall and including the interior of the
Designated Premises necessary therefor, and for the avoidance of
doubt, if the Supplier fails to place the Systems on site by the
relevant Placement Date, the Customer shall have the right to deny
access until after the completion of the occupation permit inspection
process, (ii) the building will sustain the weight of the relevant
Systems and strengthening beams and the like are in the proper
position to support the relevant Systems, (iii) the Designated
Premises are large enough in height and area to accommodate the
relevant Systems, (iv) sufficient electrical power is provided to
operate the relevant Systems and the electrical supply is of the
correct voltage and frequency for the relevant Systems at the input
and can easily be connected to the Systems, and (v) the correct
environmental conditions exist to enable the relevant Systems to
operate properly in accordance with the Specifications. For the Hong
Kong Systems, the Supplier acknowledges that the height of 2.7 meters
from the supporting structure to the underside of the
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overhead beam is sufficient to accommodate the Hong Kong Systems; and
Weelek Company Limited shall bear the cost of any temporary structure
that may be required to support the weight of the Hong Kong Systems
during off-loading at or in the vicinity of the Designated Premises;
(b) there will be sufficient temporary lighting and power to enable the
relevant Systems to be properly installed. A sufficient and proper
site load will be available for testing or a suitable dummy load will
be provided;
(c) the outputs required for the relevant Systems will be indicated in a
timely manner so as to be incorporated into the design of the Systems;
and
(d) upon placement on site and completion of the inventory checklist, the
Customer, its assignees or Principal Contractors shall provide
reasonable security and safety measures, including a locked secure
area for the relevant Systems at the site of the Designated Premises.
For the avoidance of doubt, the ultimate responsibility for the safety
and security of the relevant Systems shall rests on the Supplier until
Provisional Acceptance and the ultimate responsibility to resolve any
deficiencies in the functionality of the Systems identified upon
Provisional Acceptance shall remain with the Supplier until Final
Acceptance.
3.5 it will ensure that the area allocated for the Systems within the relevant
Designated Premises is complete and ready for the placing and installation
of the relevant Systems equipment in accordance with item 3.4 by the
relevant delivery dates of the Systems on site.
3.6 it has obtained all necessary approvals, consents and authorizations to
enter into this Agreement and to perform and carry out its obligations
hereunder.
3.7 the persons executing this Agreement on its behalf have express authority
to do so.
3.8 the execution, delivery and performance of this Agreement does not violate
any provision of any bylaw, charter, regulation, or any other governing
authority of the Customer; nor does it violate any obligation pursuant to
any contractual agreement between the Customer and a third party to which
the Customer is bound at the time of the Execution Date.
4. OBLIGATIONS AND REPRESENTATIONS OF THE SUPPLIER
The Supplier shall:
4.1 deliver the relevant Systems to the address notified by the Customer for
cranage into and placement in position within the respective Designated
Premises (including, without limitation, the provision of any necessary
temporary structures outside the exterior wall of the Designated Premises)
by the relevant Placement Dates and the achievement of full functionality
by the relevant Operational Dates, assume full responsibility and all
related costs for the storage and protection of the Systems while the
Systems are in the vicinity of the Designated Premises and awaiting
installation in the Premises, and install, commission and ensure the full
functionality and servicing of the Systems in accordance with the
Specifications and the Maintenance Agreement.
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4.2 use best practices as currently exist in the Supplier's area of
specialization and all reasonable care, professional skill and diligence to
perform its obligations under this Agreement, including compliance with the
CIF Terms, the Specifications and the Delivery Schedule.
4.3 conduct at its own cost, such reviews, inspections and tests in accordance
with the Supplier's Standard Testing Procedures, described in detail in
Annex VIII, so as to allow the Customer to issue Provisional Acceptance and
Final Acceptance in respect of each System.
4.4 give the Customer reasonable prior notice of the expected delivery dates of
the Systems to the Designated Premises. In the event the Supplier, at any
time, anticipates that it shall not be able to comply with the Delivery
Schedule, it shall immediately so notify the Customer, submit proposed
revisions to the Delivery Schedule which reflect its best estimates of what
can be realistically achieved and continue to work under the original
Delivery Schedule until otherwise agreed in writing with the Customer. For
the avoidance of doubt, such notification does not relieve the Supplier of
its obligations under this Agreement.
4.5 promptly supply to Customer, throughout the term of this Agreement, design
support to the Customer's nominated engineering representatives and/or
contractors.
4.6 promptly supply to the Customer sufficient electrical control and
synchronization panels and other spare parts pursuant to the Maintenance
Agreement so as to enable the Customer to exploit the full potential of the
Systems.
4.7 supply to the Customer upon request, from time to time and throughout the
term of this Agreement, the number of copies of the Documentation
designated in Annex IV. All Documentation must be in the English language,
unless otherwise agreed between the Supplier and the Customer. The
Documentation supplied to the Customer shall be the property of the
Customer upon Provisional Acceptance.
4.8 grant to the Customer a royalty-free license, in perpetuity and on a non-
transferable basis (except as qualified in clauses 8.1 and 8.2
hereinafter), to use the Documentation (which grant shall be deemed to have
occurred and become effective upon Provisional Acceptance) and shall:
(a) provide at a nominal and reasonable price such further copies of the
Documentation as the Customer may reasonably request from time to
time; and
(b) during its warranty obligations promptly provide, free of charge to
the Customer, such revised and/or updated versions of the
Documentation that are made from time to time, and at a reasonable
price upon the expiration of its warranty obligations.
4.9 diligently and promptly furnish such information which the Customer may
reasonably request from time to time in respect of and concerning the
timely performance of the Supplier's obligations and responsibilities under
this Agreement, including (i) compliance with the Delivery Schedule, (ii) a
detailed methods statement setting forth
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the manner in which the Systems will be delivered to site, offloaded,
craned and positioned within the relevant Designated Premises, and (iii) by
August 15, 2000 for the Hong Kong Systems and six (6) weeks after
confirmation of the location of the Designated Premises for the Taiwan,
South Korea and Australia Systems, furnish detailed engineering and layout
drawings for the installation.
4.10 diligently and promptly provide the Customer with responses to technical
queries within two (2) Business Days.
4.11 diligently and promptly inform the Customer of any relevant defects,
modifications, or future product development or enhancements which may be
or may have been discovered in or made to or in respect of the Systems from
time to time, after the Execution Date.
4.12 ensure that all the Systems shall be manufactured, stored and tested in
accordance with the Specifications and properly packed and secured for
delivery to the Customer at the specified locations in the Designated
Premises in an undamaged condition.
4.13 upon receiving notice to such effect from the Customer, repair or replace
free of charge any part of the Systems damaged or lost in transit. Due
delivery of the Systems shall not be deemed to have taken place until
replacement or repaired Systems have been delivered by the Supplier to the
Customer. The Customer reserves the right to hold such damaged Systems at
the Supplier's risk or to return them at the risk and expense of the
Supplier.
4.14 procure a contract of carriage and insure the Systems from dispatch until
delivery on terms currently in the trade to the benefit of the Customer,
and promptly tender to the Customer a clean bill of lading, the insurance
policy and invoice in respect of each part of the Systems to each of the
Designated Premises; and maintain general liability insurance that is
satisfactory to the Customer.
4.15 abide by all safety regulations and reasonable instructions or directions
given by the Customer or its assignees, their site supervisors or
authorized representatives, at the relevant Designated Premises, and shall
not do anything that may affect the issuance of the occupation permit or
such other permits, approvals or consents relating to, or other
construction works in, the relevant Designated Premises.
4.16 pay all withholding taxes, other taxes, levies, duties and assessments of
every nature due in connection with this Agreement required by applicable
law, in accordance with Annex II.
4.17 execute and deliver to the Customer the Novation Agreement, as and when the
Customer reasonably requires.
The Supplier represents and warrants to the Customer that:
4.18 unless agreed to the contrary, all Systems shall be new, of merchantable
quality, fit for the purposes notified by the Customer or set out in the
Specifications, comply with best and current international standards, and
will be delivered, installed, made operational
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and serviced in accordance with this Agreement, including the
Specifications, the Delivery Schedule, and the Maintenance Agreement.
4.19 it has title to the Systems consistent with the rights granted to the
Customer under the terms and conditions of this Agreement.
4.20 the title to the Systems shall be free and unencumbered and, where the
Customer has complied with its material obligations hereunder, the Customer
shall enjoy the unencumbered title to and quiet possession of all Systems.
4.21 the Documentation shall, by itself, be sufficiently comprehensive to
enable relevant persons, suitably trained and certified by the Supplier or
such other parties which the Supplier may approve, to operate and maintain
the same (including first-level diagnosis and rectification of problems).
4.22 it is (and its employees, agents and permitted subcontractors are) fully
experienced, properly qualified, registered, licensed, equipped, organized,
and financed to perform the Supplier's obligations under this Agreement.
The Supplier shall act as an independent contractor and not as the agent of
the Customer in performing its obligations under this Agreement,
maintaining complete control over its employees and all of its suppliers.
4.23 it will fulfill all applicable requirements from all relevant governing
authorities, and will obtain and maintain all necessary approvals, permits,
licenses, consents or authorizations:
(a) which may be required to export the Systems from the point of origin
or manufacture;
(b) which may be required to import the Systems to the jurisdictions in
which the Designated Premises are located and to deliver and install
the same; and
(c) to enter into this Agreement and to perform and carry out its
obligations hereunder.
4.24 the persons executing this Agreement on its behalf have express authority
to do so.
4.25 the execution, delivery and performance of this Agreement does not violate
any provision of any of its bylaws, charters, regulations or any other
governing authority; nor does it violate any obligation pursuant to any
contractual agreement between the Supplier and a third party to which the
Supplier is bound at the time of the Execution Date.
4.26 the Systems and all related goods and services provided hereunder do not
violate or in any way infringe upon the intellectual property rights of
third parties.
4.27 it will immediately notify the Customer of any developments and reasons
that might affect the Supplier's ability to fully perform and carry out its
obligations under this Agreement.
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4.28 it will notify the Customer in writing, before November 31, 2000, of the
name and address of its local agents who will provide services in Hong
Kong.
5. TITLE TO AND RISK IN THE SYSTEMS
Title to all Systems to be supplied under this Agreement shall pass to the
Customer at the same time that risk passes under the CIF Terms. For the
purposes of this Agreement the CIF Terms are hereby varied to the extent
that risk shall pass to the Customer upon delivery to each of the
Designated Premises.
6. SYSTEMS WARRANTYS
6.1 The Supplier warrants that the Systems shall perform in accordance with the
relevant Specifications during the Warranty Period.
6.2 In the event of any breach of clause 6.1, the Supplier shall, at its own
cost, promptly do such things as may be necessary (including redesign,
modification and/or replacement) to ensure compliance with the relevant
Specifications. In addition, the Customer has the right to request and
obtain specific performance. Any further rights and remedies beyond to the
scope of clause 6.1 shall be excluded.
6.3 In the event that any System (or any component thereof) is repaired,
replaced or modified during the Warranty Period, the System or component
thereof which is repaired, replaced or modified shall be warranted for a
further period of six (6) months from the date of repair, replacement or
modification; provided, however, that under no circumstance shall the
additional warranty period exceed the initial Warranty Period by more than
six (6) months. The termination of this Agreement shall not adversely
affect any Systems warranty which has been activated, and such warranty
shall continue for such period as may be specified in this clause 6.
6.4 The Supplier acknowledges that the Customer shall not be deemed to have
accepted any part of the Systems until after the Customer (or its nominated
contractor) has actually inspected and tested the Systems and ascertained
that they are in accordance with the Specifications; provided, however,
that if the Customer puts the Systems into operation without the prior
permission of the Supplier, such permission not to be unreasonably
withheld, any such Systems shall be deemed to have been given Final
Acceptance. Further, the Customer may reject, by notice to the Supplier,
any part of the Systems which is not in accordance with the Specifications
within a reasonable time after inspection and testing in accordance with
the Standard Testing Procedures. Unless within a reasonable time of
receipt of notice of rejection the Supplier collects such System, or any
relevant part thereof, the Customer may dispose of such rejected System, or
any part thereof, as the Customer shall think fit without prejudice to the
Customer's right to claim for breach of this Agreement. If any of the
Systems supplied to the Customer are not in accordance with the
Specifications, the Supplier shall at the option of the Customer forthwith
upon notice being given either repair or replace such Systems. If it is
necessary to open up or dismantle any of the works or assemblies to permit
such repair or replacement then the Supplier shall bear the costs of such
opening
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up or dismantling, reassembly and making good after repairs, replacements
and testing of such Systems to the Customer's reasonable satisfaction.
7. PRICES AND TERMS OF PAYMENT
7.1 The Customer shall pay promptly the amounts set out in Annex II, upon each
of the corresponding events therein and upon the Supplier complying with
its material obligations under this Agreement.
7.2 Any invoices to be delivered shall be delivered by the Supplier to the
Customer and be supported by such standard delivery and order documents
(including bills of lading, airway bills or dispatch notes) as may be
reasonably requested by the Customer and/or customary in Hong Kong, South
Korea, Taiwan, or Australia as applicable to the given shipment.
7.3 If the Customer objects to an invoice and/or any of the supporting
documents provided therewith, the Customer shall raise an objection within
twenty (20) days of receipt of the relevant documents; otherwise the
invoice shall be deemed as accepted by the Customer and the Customer shall
pay the amount of such invoice within thirty (30) days from receipt of such
invoice.
8. ASSIGNMENT
8.1 Except as expressly provided in this Agreement, a party may not assign its
rights or delegate its obligations under any part of this Agreement except
with the prior consent of the other party.
8.2 Notwithstanding clause 8.1, the Customer may assign its rights and
obligations under this Agreement (a) on a System-by-System basis to the
Principal Contractors and (b) in the case of merger, acquisition, or sale
of all, or substantially all of the Customer's equity securities or assets,
the Customer may assign this Agreement, provided, however, that such
acquiring party or resultant entity shall agree to unconditionally accept
all rights and obligations hereunder. The Customer may also at any time
assign this Agreement to any entity controlled by, controlling or under
common control with the Customer. The Supplier may transfer this Agreement
to any third party who acquires all or substantially all of the Supplier's
assets or equity securities provided that such acquiring party agrees to
unconditionally accept all rights and obligations hereunder.
8.3 Upon the Customer assigning any of its rights and obligations under this
Agreement, the Supplier will promptly and in good faith negotiate any
Variation of this Agreement that is reasonably required by the assignee
that has been entered into in respect of the Designated Premises, including
insurance requirements, safety procedures, and security measures.
9. INDEMNIFICATION & LIMITATION OF LIABILITY
9.1 Each party shall fully indemnify, defend and hold harmless the other party
and its subsidiaries and affiliates, and the officers, agents, employees,
successors and assigns
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and authorized representatives of all the foregoing, from and against any
and all suits, actions, legal or administrative proceedings, claims,
demands, damages, liabilities, interest, attorney's fees, costs, expenses,
and losses of whatsoever kind or nature in connection with or incidental to
any material breach of this Agreement by such party, whether arising before
or after Final Acceptance of all the Systems hereunder.
9.2 Notwithstanding clause 9.1, neither party shall be liable for any indirect
and/or consequential damages including, but not limited to, loss of profit,
loss of production or loss of interest.
10. FORCE MAJEURE
Outbreak of war, whether declared or not, revolutions, general strikes,
lockouts, labor disputes, governmental acts, outbreak of epidemics,
earthquakes, inundations and unusual floods, unprecedented droughts and
raging fires not due to the Supplier and in general any event the removal
or prevention of which is (i) beyond the Supplier's control and (ii) beyond
the ability of a prudent and experienced seller to control, shall be
regarded as Force Majeure, and the Supplier shall not be responsible for
delays arising out of the foregoing events.
11. CONFIDENTIALITY
11.1 From time to time during the performance of this Agreement, the parties
may deem it necessary to provide each other with Confidential Information.
The parties each agree:
(a) to maintain the confidentiality of such Confidential Information and
not to disclose the same to any third party, except as authorized by
the original disclosing party in writing;
(b) to restrict disclosure of Confidential Information to employees who
have a "need to know". Such Confidential Information shall be
maintained in strict confidence;
(c) to take precautions necessary and appropriate to guard the
confidentiality of Confidential Information, including requiring its
employees who handle such Confidential Information to enter into
confidentiality agreements having terms substantially similar to those
contained herein;
(d) that Confidential Information is and shall at all times remain the
property of the disclosing party. No use of any Confidential
Information is permitted except as otherwise expressly provided herein
and no grant of any proprietary rights is hereby given or intended,
including any licence implied or otherwise; and
(e) to use such Confidential Information solely as required in performance
of its obligations under this Agreement.
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11.2 Except for necessary disclosures to professional advisers and bankers,
neither party shall disclose to any third party the contents of this
Agreement without the prior written consent of the other party.
11.3 Confidential Information will not include information that:
(a) is now, or hereafter becomes, through no act or failure to act on the
part of the receiving party, generally known or available to the
public;
(b) was acquired by the receiving party before receiving such information
from the disclosing party and without restriction as to use or
disclosure;
(c) is hereafter rightfully furnished to the receiving party by a third
party, without restriction as to use or disclosure;
(d) is information which the receiving party can prove was independently
developed by the receiving party;
(e) is required to be disclosed pursuant to law, provided the receiving
party provides the other party, to the extent legally permissible,
with prompt written notice of such requirement so that the other party
may seek an appropriate protective order with respect thereto; or
(f) is disclosed with the prior written consent of the disclosing party.
11.4 Upon the expiration or earlier termination of this Agreement, the affected
party shall immediately return all Confidential Information furnished
hereunder and further agree to either destroy and certify the destruction
of, or return to the other party within thirty (30) days following the
expiration or termination date, all complete or partial copies of
Confidential Information in the receiving party's possession or control,
including any copies such party may have photocopied or otherwise
duplicated on its own.
11.5 Notwithstanding any other provision in this Agreement, persons authorized
to access Confidential Information may develop their general knowledge,
skills and experience in respect of and concerning the other party's
business and this, in itself, shall not constitute a breach of this clause
11.
11.6 This clause shall survive the expiration or termination of this Agreement
for a period of three (3) years.
12. TERM OF AGREEMENT
This Agreement shall be effective from the Execution Date until the
expiration of System warranties given under this Agreement, or sooner if
validly terminated pursuant to other provisions in this Agreement.
13. DISPUTE RESOLUTION
13.1 A party shall not move to commence arbitration or court proceedings
(except proceedings seeking interlocutory or injunctive relief) in respect
of a Dispute unless it has first complied with this clause 13.
16
<PAGE>
13.2 The party claiming that a Dispute has arisen shall notify the other party
with a brief description of the size and nature of the Dispute.
13.3 Within seven (7) days after a notice is given under clause 13.2 the
parties shall each nominate representative authorized to settle the Dispute
on their behalf, and promptly notify the other party accordingly.
13.4 The parties shall ensure that, during the twenty (20) day period after
notice is given under clause 13.2, their respective representatives use
their best efforts with the other nominated representative:
(a) to resolve the Dispute; or
(b) to agree on:
(i) a process to resolve all or at least part of the Dispute
without arbitration or court proceedings (including
mediation, conciliation, executive appraisal or independent
expert determinations);
(ii) the selection and payment of any third party to be engaged
by the parties and the involvement of any dispute resolution
organization;
(iii) any procedural rules;
(iv) the timetable, including any exchange of relevant
information and documents; and
(v) the place where the meetings shall be held.
13.5 The role of any third party shall be to assist in negotiating a resolution
of the Dispute. A third party may not make a decision that is binding on
the parties unless the parties' respective representatives have so agreed
in writing.
13.6 Any information or documents disclosed by a representative under this
clause shall be kept confidential and may not be used by the parties or any
third party except to attempt to settle the Dispute.
13.7 Each party shall bear its own administration costs of resolving the same
under this clause and unless the parties otherwise agree in accordance with
clause 13.4, they must bear equally the costs of any agreed third party
that has been engaged.
13.8 After the twenty (20) day period referred to in clause 13.4, a party that
has complied with clauses 13.2-13.4 may terminate the dispute resolution
process and proceed to arbitration proceedings by giving notice to the
other party.
13.9 Unless the parties otherwise agree in writing, all disputes arising out of
or in connection with this Agreement will be referred to and resolved by
final and binding arbitration in London in the English language in
accordance with the Rules of the ICC, Paris. The party initiating
arbitration proceedings will pay for the related expenses of the other
party, excluding incidental business losses due to the arbitration
proceedings, to the extent that such other party obtains a favorable final
ruling. Any arbitration will be
17
<PAGE>
conducted by three arbitrators, two of which shall be appointed by
the parties, respectively, and the third of which shall be jointly
appointed by the other two arbitrators, and failing agreement to be
nominated by the ICC. The arbitrators shall be experienced in
conducting arbitration in the engineering sector. The parties agree
that, except as required by applicable law or regulation, they will
keep confidential the existence and outcome of any arbitration
proceeding, as well as the contents thereof, and will require the
arbitrators to adhere to the same obligation of confidentiality. Such
obligations of confidentiality shall survive the termination or
expiration of this Agreement.
13.10 Prior to the settlement of any Dispute in accordance with this
clause, the parties shall abide by their obligations under this
Agreement without prejudice to a final adjustment in accordance with
an award rendered in an arbitration or conciliation settling the
Dispute.
14. ENTIRE UNDERSTANDING
This Agreement:
(a) contains the entire agreement and understanding between the
parties on everything connected with the subject matter of this
Agreement; and
(b) except where provided to the contrary in this Agreement,
supersedes any prior agreement or understanding, whether written
or oral, express or implied, on anything connected with the
subject matter of this Agreement.
15. FURTHER ASSURANCE
Each party agrees that it shall at its own cost do all things
(including executing all documents) necessary to give full effect to
this Agreement, although not specifically provided for.
16. GOVERNING LAW AND JURISDICTION
Unless otherwise agreed between the relevant parties in writing, this
Agreement shall be governed by the laws of Hong Kong.
17. INCONSISTENCY
18
<PAGE>
To the extent there is any inconsistency between a provision of this
document, another provision in any Annex of this document and any other
document referred to in this Agreement:
(a) a specific provision takes precedence over a general provision; and
(b) the following order of precedence shall apply:
(i) this document;
(ii) Annexes.
18. TIME OF THE ESSENCE, INCENTIVES AND LIQUIDATED DAMAGES
18.1 Time is of the essence of this Agreement.
18.2 If the parties agree to vary a time requirement, the time requirement so
varied is of the essence of this Agreement.
18.3 An agreement to vary a time requirement contained in this Agreement shall
be in writing.
18.4 In the event that a System achieves Provisional Acceptance prior to the
scheduled Operational Date (as defined and specified in Annex III),
Customer shall make an incentive payment of up to one half of one percent
(0.5%) of the contract price of the System per week that qualifies for such
payment (as provided for in Annex II) to the Supplier or, in the event of
early achievement of Provisional Acceptance the number of days of which is
not divisible by seven (7), the product of (i) one half of one percent
(0.5%) and (ii) the number of days of the delay divided by seven (7).
18.5 In the event of any delay in the Operational Dates, the Supplier shall pay
liquidated damages to the Customer, which shall be one half of one percent
(0.5%) of the total contracted prices (as specified in Annex II) of the
relevant Systems delayed per week or, in the event of a delay the number of
days of which is not divisible by seven (7), the product of (i) one half of
one percent (0.5%) and (ii) the number of days of the delay divided by
seven (7). The liquidated damages provided for herein shall be in lieu of
any other rights or remedies that the Customer may have for damages against
the Supplier in connection with any delay. Liquidated damages shall not
exceed five percent (5%) of the total contracted prices of the relevant
Systems. The Supplier hereby acknowledges and agrees that the liquidated
damages the Supplier may be required to pay pursuant to this clause are a
fair and reasonable pre-estimate of damages that the Customer would suffer
in the event of delay of the Operational Dates, and permanently waives any
rights it may have to argue, claim and/or plead that the liquidated damages
that are payable under this clause constitute a penalty or are otherwise
unenforceable for any reason whatsoever.
19. NOTICES
19
<PAGE>
Notices required to be given by one party to another (including invoices)
shall be in the English language unless expressly agreed otherwise, must be
reduced to writing and personally delivered or transmitted by registered or
certified post or electronic mail to the corresponding addresses specified
below, and shall be effective upon receipt.
(a) The Supplier shall send notices to the Customer at the address first
above written, or as may be advised by Customer in writing from time
to time.
(b) The Supplier shall send notices to the Hong Kong Assignee as follows:
Weelek Company Limited
45th Floor, Sun Hung Kai Centre
30 Harbour Road, Wan Chai
Hong Kong
Attn: Mr. Simon Kwok
(c) Customer shall send notices to the Supplier as follows:
Piller GmbH
Abgunst 24
37520 Osterode
Germany
A party may change the addresses for giving notice from time to time by
written instructions to the other of such change of address.
20. PUBLIC ANNOUNCEMENTS
Unless required by law, an announcement, circular or other public
disclosure of the contents of this Agreement must not be made or permitted
by a party without the prior written approval of the other party.
21. SEVERABILITY
If any term of this Agreement, or the application of such term to any
person or circumstance, shall be held invalid, the remainder of this
Agreement, or the application of such term to person or circumstances other
than those to which it is held invalid, shall not be affected thereby.
22. TERMINATION
22.1 The Customer may terminate this Agreement at any time by written notice to
the Supplier if any of the following occurs:
(a) the Supplier fails to carry out any obligation under this Agreement,
the failure or breach is capable of remedy and the Supplier does not
remedy that failure or breach within fourteen (14) days after written
notice to the Supplier requiring it to be remedied, including without
limitation the Supplier's failure to achieve the full functionality of
the Hong Kong Systems within ten (10) weeks of the relevant
Operational Date;
20
<PAGE>
(b) the Supplier convenes a meeting of its creditors or proposes or enters
into a scheme of arrangement (except for the purpose of reconstruction
or amalgamation) or a composition with any of its creditors;
(c) an application or order is made to or by a court or a resolution is
passed for the winding up of the Supplier or notice of intention to
propose such a resolution is given and such application or notice is
not dismissed or rescinded within sixty (60) days thereafter;
(d) a receiver, or receiver and manager, or other similar controller or
administrator is appointed in respect of the Supplier or the whole or
any part of its undertaking, property or assets or any steps are taken
for the appointment of such person;
(e) an entity holding a security interest in the assets of the Supplier
enters into possession of or takes control of any of those assets or
takes any steps to enter into possession of or take control of any of
those assets;
(f) one or more of the representations made by the Supplier in subclauses
4.19, 4.20, 4.23, 4.24, 4.25 and 4.26 of this Agreement is materially
incorrect and any such representation is not made correct within
fourteen (14) days after written notice to the Supplier requiring it
to be made correct;
(g) a breach of any collateral agreements has occurred which gives rise to
a right of termination of this Agreement thereunder; or
(h) if it becomes unlawful for the Supplier to perform its obligations
under this Agreement.
22.2 The Supplier may terminate this Agreement at any time by written notice to
the Customer if any of the following occurs:
(a) The Customer does not pay the Supplier the amounts due at stage
payments according to the Payment Schedule within twenty-one (21) days
after receipt of written notice.
(b) the Customer fails to carry out any obligation under this Agreement,
the failure or breach is capable of remedy and the Customer does not
remedy that failure or breach within fourteen (14) days after written
notice to the Customer requiring it to be remedied;
(c) the Customer convenes a meeting of its creditors or proposes or enters
into a scheme of arrangement (except for the purpose of reconstruction
or amalgamation) or a composition with any of its creditors;
(d) an application or order is made to or by a court or a resolution is
passed for the winding up of Customer or notice of intention to
propose such a resolution is given and such application or notice is
not dismissed or rescinded within sixty (60) days thereafter;
21
<PAGE>
(e) a receiver, or receiver and manager, or other similar controller or
administrator is appointed in respect of the Customer or the whole or
any part of its undertaking, property or assets or any steps are taken
for the appointment of such person;
(f) an entity holding a security interest in the assets of the Customer
enters into possession of or takes control of any of those assets or
takes any steps to enter into possession of or take control of any of
those assets;
(g) one or more of the representations made by the Customer in subclauses
3.6, 3.7 or 3.8 of this Agreement is materially incorrect and such
representation is not made correct within fourteen (14) days after
written notice to the Customer requiring it to be made correct;
(h) a breach of any collateral agreements has occurred which gives rise to
a right of termination of this Agreement thereunder; or
(i) if it becomes unlawful for the Customer to perform its obligations
under this Agreement.
22.3 Upon termination of this Agreement under clause 22.1, the Supplier shall
return forthwith to the Customer such part of the price or other
considerations paid by the Customer to the Supplier pursuant to clause 7
without prejudice against any rights the Customer may have against the
Supplier.
22.4 Termination of this Agreement under clauses 22.1 or 22.2 does not affect
any claim either party may have against the other under this Agreement at
the date of the termination.
22.5 The parties may by mutual written agreement terminate this Agreement.
22.6 In the event a Force Majeure Event should last more than six (6)
consecutive months or one hundred eighty (180) days, either party shall be
entitled to terminate the Agreement.
22.7 In the event that any part of this Agreement is assigned to an assignee,
the right of termination of a party under this clause shall only apply to
the extent defined in this Agreement and to such party that is affected by
the events specified in this clause. This Agreement shall remain in full
force and effect between the other relevant parties hereto to the extent
that a right of termination under this clause does not arise in relation to
such other relevant parties.
23. VARIATION
23.1 No amendment or Variation shall be effective unless it is in writing and
signed by the parties.
23.2 In the event a Variation is reasonably requested by the Customer and the
parties are unable to agree to all relevant modifications to this Agreement
within thirty (30) days
22
<PAGE>
of the date that the Customer submits a request for Variation, the parties
shall negotiate in good faith the necessary modifications to this
Agreement. The Supplier shall use its best efforts to minimize any adverse
effects a Variation may have upon the Supplier's obligations under this
Agreement. Any additional expenditure the Supplier may incur pursuant to a
Variation shall be reasonable and equitable, taking into account all
relevant facts, matters and circumstances, and shall be paid for by the
Customer within the times specified in Annex II, or within thirty (30) days
after Final Acceptance of the Variation, whichever is later. Where a
Variation shall result in a cost saving, that saving shall be fully passed
on to the Customer, by way of a corresponding reduction of the Customer's
payment obligations under this Agreement. If such Variation causes a delay
in time, such delay shall be taken into consideration by the Customer, but
only to the extent that such Variation is performed in a timely manner.
24. WAIVER
24.1 A party's failure or delay to exercise a power or right does not operate
as a waiver of that power or right.
24.2 The exercise of a power or right does not preclude either its exercise in
the future or the exercise of any other power or right.
24.3 A waiver is not effective unless it is in writing.
24.4 Waiver of a power or right is effective only in respect of the specific
instance to which it relates and for the specific purpose for which it is
given.
25. OTHER PROVISIONS
25.1 This Agreement has been created jointly by the parties, and no rule of
construction requiring interpretation against the drafter of this Agreement
shall apply in its interpretation.
25.2 If anything in this Agreement is unenforceable, illegal or void then it
shall be severed from this Agreement and the rest of this Agreement shall
remain in full force and effect.
25.3 This Agreement shall be signed in two original copies. One shall be
provided to each party.
23
<PAGE>
EXECUTED as an agreement on the date set out at the commencement of the
Agreement.
SIGNED by )
)
on behalf of )
)
IASIAWORKS (HK) LIMITED )
SIGNED by )
)
on behalf of )
)
PILLER GmbH Germany )
24
<PAGE>
Annex I
-------
SPECIFICATIONS
1. A PILLER UNIBLOCK T Diesel System, either Type A or Type B below. Three (3)
sets of Type A are destined for Hong Kong, two (2) sets of Type B are
destined for Taiwan, two (2) sets of Type B are destined for South Korea,
and two (2) sets of Type B are destined for Melbourne, Australia.
(a) HONG KONG SYSTEMS
-----------------
Type A Diesel System - PILLER UNIBLOCK T Diesel System - 3 Units
Model No.: PILLER Dynamic UPS Standard model 1600 LV, 380V, 50 Hz
(isolated redundancy configuration)
UPS Type: UNIBLOCK 1600TD including POWERBRIDGE
Capacity: 16.5 MWs
Autonomy: 12 seconds
Clutch SSS46 for Diesel UPS 1600 kVA
Diesel Engine Type: Caterpillar 3512 B HD DI-TA, 1500 rpm (50Hz)
(suitable for the supply of 1600 kVA UBTD)
Other remarks: - Mounted on a rigid base frame on vibration dampers
together with the Uniblock-Machine SSS overhaul clutch
and SAE flange
- Electrical or mechanical driver radiators in front of
the diesel engine
- Electrical starting device including battery charger
- Diesel control cubicle
(b) SYSTEMS DESTINED FOR TAIWAN
---------------------------
Type B Diesel System - PILLER UNIBLOCK T Diesel System - 2 Units
Model No.: PILLER Dynamic UPS Standard model 1300 LV, 480V, 60 Hz
(isolated redundancy configuration for the supply of
1300 kVA critical load and 1000 kVA essential load)
UPS Type: UNIBLOCK 1300/1000TD including POWERBRIDGE
Capacity: 16.5 MWs
Autonomy: 12 seconds
Clutch SSS46 for Diesel UPS 1300 kVA
Diesel Engine Type: Caterpillar 3516 B-DI TA, 1800 rpm (60Hz)
(suitable for the supply of 1600 kVA UBTD)
Other remarks: - Mounted on a rigid base frame on vibration dampers
together with the Uniblock-Machine SSS overhaul clutch
and SAE flange
- Electrical or mechanical driver radiators in front of
the diesel engine
- Electrical starting device including battery charger
- Diesel control cubicle
25
<PAGE>
(c) SYSTEMS DESTINED FOR SOUTH KOREA
--------------------------------
Type B Diesel System - PILLER UNIBLOCK T Diesel System - 2 Units
Model No.: PILLER Dynamic UPS Standard model 1300 LV, 380V, 60 Hz
(isolated redundancy configuration for the supply of
1300 kVA critical load and 1000 kVA essential load)
UPS Type: UNIBLOCK 1300/1000TD including POWERBRIDGE
Capacity: 16.5 MWs
Autonomy: 12 seconds
Clutch SSS46 for Diesel UPS 1300 kVA
Diesel Engine Type: Caterpillar 3516 B-DI TA, 1800 rpm (60Hz)
(suitable for the supply of 1600 kVA UBTD)
Other remarks: - Mounted on a rigid base frame on vibration dampers
together with the Uniblock-Machine SSS overhaul clutch
and SAE flange
- Electrical or mechanical driver radiators in front of
the diesel engine
- Electrical starting device including battery charger
- Diesel control cubicle
2. Exhaust Silencers
Diesel engine exhaust silencer. Outdoor noise level 85dB(A) at 1.5 meter
distance.
3. Fuel for Commissioning
Estimated 30,000 liters of fuel, first fill is included in the cost.
4. Offloading, cranage, positioning and installation
Operations must be efficient, non-disruptive, and risk free, using industry
best standards.
5. Supervisory engineers from Piller Germany
Sufficiently qualified engineers to supervise and ensure that all
operations on site, including construction, installation, testing,
commissioning and handover, are carried out smoothly, efficiently, error-
free and on schedule using industry best standards for each location.
26
<PAGE>
Annex II
--------
SYSTEMS AND PRICES
Among other things, this Annex II sets out prices for items listed in Annex I.
1. The Hong Kong System
Fixed Costs items:
-----------------
SUPPLY ONLY CIF (ex-shipside, packing extra at cost)
1. Type A - PILLER UNIBLOCK T Diesel System 3 Units $ 2,550,168.60
The above cost includes all interconnection components, wiring fixtures and
fittings required to provide fully operation Systems at each Designated
Premises. Apart from non-fixed items below, all other costs are inclusive in
the fixed cost above.
Non-Fixed items (inclusive for three units):
-------------------------------------------
The following non-fixed items are not included in price above. The payable
prices shall be finalized and priced when full parameters become known, subject
to assessment by independent third party jointly appointed by the Customer and
the Hong Kong Assignee. The Supplier shall not in any event charge actual prices
above those of the prices indicated below (if any), and shall provide the
Customer with an itemized list of cost components upon request. The items
listed below are only to be ordered at the sole option of the Customer.
Price
-----
1. Import taxes charges, duties, etc. (if any) At cost, if
required by local government or other competent any
regulatory authorities of Customer
2. Offloading, cranage, insurance, delivery and $ 136,805.60
placing of units in Designated Premises
3. Exhaust Silencers $ 183,221.80
4. Output Distribution Unit $ 180,778.80
5. Upper Transfer Switches $ 24,427.20
per unit,
including
installation costs
6. Installation (mechanical and electrical) and $ 244,295.70
coolant
7. Fuel for Commissioning $ 14,657.70
8. Supervisory engineers from Piller Germany (at $ 83,060.50
competitive market rates), commissioning and
testing
9. Training Courses $ 39,087.30
excluding
travel and
accomodations
27
<PAGE>
10 Maintenance Fee $ 151,700 per year
11 Spare Parts $ 12,200 per year
2. Systems destined for Taiwan
---------------------------
Fixed Costs items:
------------------
SUPPLY ONLY CIF (ex-shipside, packing extra at cost)
1. Type B - PILLER UNIBLOCK T Diesel System 2 Units $ 1,872,462.65
Further units will be priced at
the same fixed unit price,
unless varied by a subsequent
term contract.
The above cost includes all interconnection components, wiring fixtures and
fittings required to provide fully operation Systems at each Designated
Premises. Apart from non-fixed items below, all other costs are inclusive in
the fixed cost above.
Non-Fixed items (inclusive for two units):
------------------------------------------
The following non-fixed items are not included in price above. The payable
prices shall be finalized and priced when full parameters become known, subject
to assessment by an independent third party appointed by the Customer. The
Supplier shall not in any event charge actual prices above the prices indicated
below (if any), and shall provide the Customer with an itemized list of cost
components upon request. The items listed below are only to be ordered at the
sole option of the Customer.
Price
-----
1. Import taxes charges or duties etc. (if any) At cost
required by local government or other competent
authority of the Customer
2. Offloading, cranage, insurance, delivery and To be
placing of units in Designated Premises confirmed
3. Exhaust Silencers $280,940.00
4. Low Voltage Distribution Cubicles $112,376.00
5. Installation (electrical and mechanical) and To be
coolant confirmed
6. Fuel for Commissioning $ 11,237.60
7. Supervisory engineers from Piller Germany (at $ 84,282.00
competitive market rates), commissioning and
testing
8. Training Courses $ 39,087.30
excluding
travel and
accomodations
9. Maintenance Fee $165,000.00
per year
28
<PAGE>
10 Spare Parts $12,200 per
year
11 Soot Filter To be
confirmed
12 Transfer Switches To be
confirmed
Within eight (8) weeks of the Execution Date of the Turnkey System
Agreement, the Supplier shall submit a lump sum price and detailed price
breakdowns for the works contained in items (2) and (5) above.
3. Systems destined for South Korea
--------------------------------
Fixed Costs items:
-----------------
SUPPLY ONLY CIF (ex-shipside, packing extra at cost)
1. Type B - PILLER UNIBLOCK T Diesel System 2 units $1,872,462.65
Further units will be priced at
the same fixed unit price, unless
varied by a subsequent term
contract.
The above cost includes all interconnection components, wiring fixtures and
fittings required to provide fully operation Systems at each Designated
Premises. Apart from non-fixed items below, all other costs are inclusive in
the fixed cost above.
Non-Fixed items (inclusive for two units):
------------------------------------------
The following non-fixed items are not included in price above. The provisional
prices are estimates only and shall be finalized and priced when full parameters
become known, subject to assessment by independent third party appointed by the
Customer. The Supplier shall not in any event charge actual prices above those
of the prices indicated below (if any), and shall provide the Customer with an
itemized list of cost components upon request. The items listed below are only
to be ordered at the sole option of the Customer.
Price
-----
1. Import taxes charges or duties etc. (if any) At cost
required by local government or other competent
regulatory authority of the Customer
2. Offloading, cranage, insurance, delivery and To be
placing of units in Designated Premises confirmed
3. Exhaust Silencers $280,940.00
4. Low Voltage Distribution Cubicles $112,376.00
5. Installation (electrical and mechanical) and To be
coolant confirmed
6. Fuel for Commissioning $ 11,237.60
7. Supervisory engineers from Piller Germany (at $ 84,282.00
competitive market rates), commissioning and
testing
29
<PAGE>
8. Training Course $ 39,087.30
excluding
travel and
accomodations
9. Maintenance Fee $165,000 per
year
10 Spare Parts $ 12,200 per
year
10 Soot Filter To be
confirmed
11 Transfer Switches To be
confirmed
Within six (6) weeks after notification to the Supplier of the Korea Designated
Premises, the Supplier shall submit a lump sum price and detailed price
breakdowns for the works contained in items (2) and (5) above.
Payment Schedule
----------------
Payments by Customer under this Agreement shall be made by stages in accordance
with the following schedule:
(a) twenty-five percent (25%) of the Fixed Costs Items within seven (7) days of
the Execution Date;
(b) a further twenty-five percent (25%) of the Fixed Costs Items when all the
goods are ex works ready for collection as certified by the Customer in
writing following testing on the Supplier's premises; provided, however,
that the Supplier shall notify the Customer in writing thirty (30) days in
advance of such testing of the relevant Systems so as to enable the
Customer to send a representative to observe testing at the Supplier's
facilities and certify in writing at the Supplier's facilities that the
goods are ex works ready for collection. If the Customer does not send a
representative to observe testing, then the Supplier shall certify in
writing that all the goods are ex works ready for collection;
(c) a further thirty percent (30%) of the Fixed Costs Items upon confirmation
and acknowledgement by the Customer's nominated representative of
successful delivery of all the relevant ordered Systems to the relevant
Designated Premises;
(d) a further ten percent (10%) of the Fixed Costs Items after achieving Final
Acceptance of all the relevant Systems for a Designated Premise;
(e) a further five percent (5%) of the Fixed Costs Items upon delivery of all
final version of Documentation after Final Acceptance; and
(f) the final five percent (5%) of the Fixed Costs Items at the expiration of
the Warranty Period as may be extended by virtue of Clause 6.3 of this
Agreement.
The Customer shall take out two letters of credit, one for the payment described
in (b) above and one for the payments described in (c) and (d) above, with a
bank acceptable to both parties.
30
<PAGE>
Letters of credit shall be established within four (4) weeks of receipt of a pro
forma invoice from the Supplier.
31
<PAGE>
Annex III
---------
DELIVERY SCHEDULE
<TABLE>
<CAPTION>
# of Ex Works Shipment Arrival Placement Operational
Destination Systems Dates Dates Dates Dates Dates
----------- ------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Hong Kong 3 10/24/2000 10/31/2000 11/24/2000 12/5/2000 1/5/2001
Taiwan 1 11/2/2000 11/7/2000 12/4/2000 12/12/2000 1/24/2001
Taiwan 1 11/9/2000 11/14/2000 12/11/2000 12/19/2000 1/24/2001
South Korea 2 11/16/2000 11/21/2000 12/23/2000 1/2/2001 2/6/2001
Australia 2 11/23/2000 11/28/2000 1/4/2001 1/11/2001 2/15/2001
</TABLE>
Nine (9) Systems are to be supplied in total: three (3) to the Designated
Premises in Hong Kong, two (2) to the Designated Premises in South Korea, two
(2) to the Designated Premises in Taiwan, and two (2) to the Designated Premises
in Melbourne, Australia.
Unless otherwise agreed by the parties, all Systems are to be supplied by sea
freight.
For the Hong Kong Systems, in the event that the Supplier is unable to ship the
Systems by the relevant Shipping Dates listed above, the Customer, at its sole
discretion, may demand that the Supplier provide air freight schedules and may
further demand that the Supplier air freight the Systems to Hong Kong. If the
Supplier reasonably believes that air freight is impracticable, a final
determination shall be subject to assessment by an independent third party
appointed by the Customer. The Supplier shall arrange for and pay the cost of
air freight, but only to the extent that such cost does not exceed three and
one-half percent (3.5%) of the total contracted price of the Hong Kong systems
as specified in Annex II, and the Customer shall waive its right to liquidated
damages pursuant to this Agreement. If the Customer chooses not to exercise its
right to air freight the Hong Kong Systems, then the Customer's right to
liquidated damages under this Agreement will not be waived. Weelek Company
Limited and iAdvantage Limited shall still be entitled to extend the February
14, 2001 commencement date for liquidated damages as set forth under the service
agreement, dated June 10, 2000 in respect of and concerning the property
described therein (the "Service Agreement"), if the placement of the Hong Kong
Systems occurs after the Placement Date (and is hence deemed a Force Majeure
event under the Service Agreement), regardless of whether the Hong Kong Systems
could have been placed by the Placement Date were Weelek to exercise its option
to air freight the Hong Kong Systems.
For the South Korea and Taiwan Systems, in the event that the Supplier
reasonably anticipates a delay ex works of eighteen (18) days or more, then the
Customer, at its sole discretion, may demand that the Supplier provide air
freight schedules and may further demand that the Supplier air freight the
Systems to South Korea and/or Taiwan, as the case may be. If the Supplier
reasonably believes that air freight is impracticable, a final determination
shall be subject to assessment by an independent third party appointed by the
Customer. In such event, the Supplier shall arrange for and pay the cost of air
freight, but only to the extent that such cost does not exceed three and one-
half percent (3.5%) of the total contracted price of the relevant Systems as
such prices are specified in Annex II, and the Customer shall waive its right to
liquidated damages pursuant to this Agreement. If the Customer chooses not to
exercise its right to air freight the Taiwan and/or South Korea Systems, the
Customer's right to liquidated damages under this Agreement shall not be waived.
32
<PAGE>
In the event that the Customer exercises its right to air freight the Systems
even though the Supplier is able to ship the Systems on time, and as a result
the new Arrival Date is earlier than the Arrival Date specified above, then the
Placement Date and Operational Date for the relevant System shall be moved
forward by the same number of days as the Arrival Date is moved forward.
A System will satisfy its Operational Date only after the Customer has issued
its Provisional Acceptance. The Supplier undertakes to supply adequate numbers
of professionally qualified full-time staff to be placed on the Designated
Premises to ensure that the proper site preparations, equipment installation,
and the subsequent testing, commissioning and handover of all the Systems to be
supplied and installed under this Agreement are supplied and installed in
accordance with this Agreement.
In the event that the Supplier incurs delays due to instruction from the
Customer to suspend work for the occupation permit process, and such delays in
the aggregate exceed ten (10) hours, then the Supplier shall be allowed to claim
an extension to the Operational Date that is equivalent to the additional time
required to make up for interrupted tasks, so that the Supplier is put in the
same position as if the interruption had not occurred. The Supplier shall
record all interruptions in writing, promptly provide the Customer written
notice along with its record of interruptions after the sum total of such
interruptions exceeds ten (10) hours, and thereafter provide the Customer with
prompt written notice after the occurrence of additional interruptions; such
notice shall include (i) the date of the relevant interruption, (ii) the length
of the relevant interruption, and (iii) in the event that the requested
extension to the Operational Date exceeds the length of the relevant
interruption, an explanation for such excess. The parties shall mutually agree
on the length of all such interruptions.
Upon written request of the Customer made at least twenty-four (24) hours in
advance, the Supplier shall perform testing and commissioning outside of normal
working hours, and the Customer shall pay the Supplier any resulting actual
overtime costs that result from such requests. The Supplier confirms that the
overtime premium above normal wages shall not exceed the following rates: DM
107.5 per hour per worker during weekdays; and DM 215 per hour per worker on
Saturdays, Sundays and German public holidays.
33
<PAGE>
Annex IV
--------
DOCUMENTATION
All documents (whether in electronic format or otherwise):
1. identifying specific design criteria relating to Systems that are to be
installed in the Designated Premises: ten (10);
2. comprising working drawings (including but not limited to all equipment
layout showing interconnecting cabling works, interconnecting ducting works
and interfacing e&m connection points and interfacing point schedule to
integrate with the Customer's building management system) and design
specifications to enable Customer to carry out all necessary design work to
accommodate the Systems within the Designated Premises;
3. containing specific lists of recommended spares with recommendations on the
level of spares to be held for each Site: ten (10);
4. describing the performance, operations, usage, design and maintenance of
the Systems that ought to be in the possession, control or custody of the
Customer, to permit the Customer to commercially utilize the Systems in the
manner notified to the Supplier or as may be reasonably expected, having
regard to all relevant facts, matters and circumstances: ten (10);
5. other matters that may be of relevance to this Agreement, including as-
built drawings, operating, maintenance and training manuals and other
training documents: ten (10); and
6. Sufficient technical parameters to enable the Customer to obtain all
requisite consents, permits, approvals and licences from the relevant
competent authorities.
34
<PAGE>
Annex V
-------
HONG KONG PREMISES
The Hong Kong Systems shall be delivered to the Hong Kong premises as follows:
The Hong Kong Assignee's designated location on the 6th Floor of the building
erected on All That piece or parcel of ground situate in Hong Kong and
registered at the Urban Land Registry as the Remaining Portion of Chai Wan
Inland Lot No. 30 (the "Hong Kong Premises").
35
<PAGE>
Annex VI
--------
ALL-INCLUSIVE MAINTENANCE AGREEMENT
(based on our sales and delivery conditions)
Clause 1: Purpose of the Agreement
----------------------------------
The purpose of this All-Inclusive Maintenance Agreement (the "Maintenance
Agreement") is the preventive and emergency maintenance of the Systems described
in the Turnkey System Agreement between iAsiaWorks (HK) Limited ("Customer",
which term shall, unless excluded by or repugnant to the subject or context,
include its executors, administrators, successors and permitted assigns) and
Piller GmbH Germany ("Supplier", which term shall, unless excluded by or
repugnant to the subject or context, include its executors, administrators,
successors and permitted assigns), dated July 6, 2000. This Maintenance
Agreement shall become valid immediately upon Provisional Acceptance as such
term is defined in the Turnkey System Agreement. The Maintenance Agreement
consists of these contract conditions, the Maintenance Agreement Schedule, and
the Standard Testing Procedures Checklist attached to the Turnkey System
Agreement as Annex VIII.
Clause 2: Scope of Work
-----------------------
The scope of work is fixed by the Maintenance Agreement Schedule and the
Standard Testing Procedures Checklist which are incorporated herein and integral
to this Maintenance Agreement. Work will be carried out at the times specified
therein.
All labor and spare parts costs shall be included in the contracted price for
this Maintenance Agreement. Replacement parts may be new or exchanged parts,
but exchanged parts shall be used only with the prior written consent of the
Customer.
This Maintenance Agreement will be valid for the Systems described in the
Turnkey System Agreement. This Maintenance Agreement may be extended to cover
additional equipment by negotiating and signing further Maintenance Agreement
Schedules.
Clause 3: Obligations of the Supplier
-------------------------------------
The Supplier is obligated to make available all necessary tools, assistance
and test equipment for carrying out the inspections in a proper manner. Any
faults discovered during a given inspection will be rectified during such
inspection if practicable.
Clause 4: Customer's Obligations
--------------------------------
The Customer shall be obligated to afford unhindered and safe access at the
agreed times to the staff of the Supplier. The Customer shall further ensure
that the relevant Systems are made available for the necessary work. Safety
regulations and other rules are only effective if the Supplier is advised of
them at the time of this Maintenance Agreement or if they are later incorporated
into the Maintenance Agreement as an attachment thereto.
Clause 5: Assignment and Subcontracting
---------------------------------------
Except as expressly provided in this Maintenance Agreement, a party may not
assign its rights or delegate its obligations under any part of this Maintenance
Agreement except with the prior consent of the other party.
36
<PAGE>
Notwithstanding the foregoing, the Customer may assign its rights and
obligations under this Agreement (i) to Weelek Limited or (ii) in the case of
merger, acquisition, or sale of all, or substantially all of the Customer's
equity securities or assets, the Customer may assign this Agreement, provided,
however, that such acquiring party or resultant entity shall agree to
unconditionally accept all rights and obligations hereunder. The Customer may
also at any time assign this Agreement to any entity controlled by, controlling
or under common control with the Customer. The Supplier may transfer this
Agreement to any third party who acquires all or substantially all of the
Supplier's assets or equity securities provided that such acquiring party agrees
to unconditionally accept all rights and obligations hereunder.
Clause 6: Inspection Appointments
---------------------------------
If no fixed dates for inspection have been agreed, inspection dates are to be
agreed upon in writing at least ten (10) Business Days (as such term is defined
in the Turnkey Systems Agreement) in advance. Postponement of inspection dates
may be made by either party up to three (3) Business Days in advance.
Agreements and postponements in regard to inspection dates shall be made between
the parties in writing.
Clause 7: Alteration and Interruption
-------------------------------------
If the work cannot be carried out on site for reasons under the control of the
Customer, the Supplier may charge half of the contracted price. In the event
that delays are caused by the Customer, the Supplier shall notify the Customer
of such delays in writing and charge the Customer according to the expenses
incurred by the Supplier under the Supplier's service price list. If the work
is interrupted because of circumstances under the control of the Customer, the
entire maintenance price will be charged.
Clause 8: Special Conditions for All-In Agreements
--------------------------------------------------
This Maintenance Agreement is an all-in contract, and therefore includes
necessary costs, including without limitation labor, travel, and spare parts.
Clause 9: Reimbursement, Terms of Payment, Changes
--------------------------------------------------
The contracted price is an annual charge as described in further detail in
the Maintenance Agreement Schedule.
Twenty-five percent (25%) of the contracted price shall be paid at each of the
payment dates set forth in the Maintenance Agreement Schedule. Payment shall be
due within thirty (30) days of the date of the receipt of the relevant invoice
by the Customer. In the event that the Customer does not make timely payment,
the Supplier shall be entitled to claim interest on such late payment of five
percent (5%) above the then current reference interest rate of the European
Central Bank.
The Customer shall only be entitled to balancing of accounts or retention if
counterclaims or notification of defects are agreed between the parties in
writing.
Clause 10: Validity of Agreement, Termination, Amendments
---------------------------------------------------------
This Agreement is valid for a period of five (5) years, and shall expire at
the end of five (5) years after its date of execution unless the parties
negotiate an extension at least two (2) months before the date of expiration.
Either party may terminate this Agreement if the other party commits a
material breach of this Maintenance Agreement and fails to remedy such breach
within fifteen (15) days
37
<PAGE>
following written notification thereof.
Termination shall be made in writing.
Clause 11: Liability
--------------------
The Supplier will accept liability for damage to any of the Systems to be
inspected under this Maintenance Agreement which is caused by the Supplier's
staff or by personnel acting on behalf of the Supplier.
The Supplier shall not be liable for any loss or damage to equipment not
included under the definition of Systems as such term is defined in the Turnkey
Systems Agreement.
The Supplier shall not be liable for any damages or loss arising after the
termination of this Maintenance Agreement, or for any damages or loss arising
from any illegal acts of other parties.
Neither party shall be liable to the other for any indirect or consequential
damages, including without limitation loss of profit, loss of production, loss
of interest and loss of performance.
The Supplier shall not be liable for any damages or loss as a result of faulty
installation or commissioning carried out by the Customer or third parties, or
the use of improper materials which do not meet the original specifications of
the Systems, or non-observance of the operation and maintenance instructions
supplied to the Customer by the Supplier, or improper or excessive use of
chemical, electrical or electro-chemical influences on the Systems outside the
control of the Supplier.
Clause 12: Guarantee
--------------------
All work performed by the Supplier under this Maintenance Agreement is
guaranteed for a period of six (6) months. Spare parts supplied under this
Maintenance Agreement are subject to the Supplier's guarantee.
Clause 13: Miscellaneous
------------------------
Employees of the Supplier are not permitted to make any amendments to this
Maintenance Agreement or any promises which differ from the terms and conditions
contained herein. Clauses 8, 10, 11, 13, 14, 15, 16, 17, 19, 21, 24 and 25 of
the Turnkey System Agreement are hereby incorporated in this Agreement by
reference.
38
<PAGE>
MAINTENANCE AGREEMENT SCHEDULE
For 3 off Uniblock T 1670 D
Serial numbers: ___________ to be determined
___________ to be determined
___________ to be determined
including these elements:
1. Preventive Maintenance for 3 x UB T 1670 D excluding
diesel engine.
Annual Maintenance
Semiannual Maintenance
Carried out by Piller according to our checklist.
Including travel Time, daily allowance, hotel
accommodations.
2. Preventive Maintenance for the diesel engines
Annual inspection
Carried out by Piller certified personnel according to
manufacturer specification (depending on diesel engine).
Including travel time, daily allowance, hotel accommodation.
(Assumes preventive maintenance to be conducted at all three sites on
single trips.)
3. Spare parts (Piller parts)
Piller will keep x Level III spare part kits on site
Customer has to provide required stock room
4. Spare parts (diesel kit)
5. Monthly diesel test (12/year)
(refill of diesel fuel to be done by Customer's local personnel)
6. Remote Diagnostic (Apoconnect)
within 24-hour Emergency Availability
including 2 x remote diagnostic checks/year
7. Emergency Support
a) Local Support
within 4 hours on-site response with Piller Level II certified service
personnel with remote backup from Piller Germany, who shall repair the
relevant System within 24 hours, failing which
Piller Germany shall carry out work as soon as possible and on the
next available flight.
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<PAGE>
b) Piller Germany Support with next available flight out of Germany
after 24 hours of local repair with telephone support from Piller GmbH
8. Extended Warranty includes necessary costs for working time, travel
costs and materials or trouble-shooting; batteries for the diesel
engine are covered as consumable parts.
9. Consumable Parts
Diesel engine
Oil (depending on usage)
10. Insurance premium paid by the Supplier.
TOTAL SUM $151,700
Plus $12,200 for spare parts
Prices: all prices are on an annual basis for this specific equipment and are
based upon a 5-year contract period commencing from Provisional
Acceptance by the Customer.
Payment: 4 quarterly installments, to be paid at the end of each quarter,
starting at Provisional Acceptance 30 days after date of invoice net
In the event that the Customer purchases additional Systems for any of the
Designated Premises, the following items shall be repriced to reflect any
additional costs to the Supplier: preventive maintenance; maintenance for the
diesel engines; monthly diesel test; consumable parts; insurance; and local
support.
After five years from the commencement of the warranty, the parties shall
negotiate in good faith to extend such warranty as required by the Customer,
subject to assessment by independent third party appointed by the Customer.
In the event of any conflict between this Maintenance Agreement Schedule and
the conditions in the All-Inclusive Maintenance Agreement, the Maintenance
Agreement Schedule shall prevail.
40
<PAGE>
Annex VII
---------
SCOPE OF WORK (HONG KONG SYSTEMS)
1.0 3 sets Rotary Diesel UPS
. UBTD 1600, 380V/50 Hz, with internal automatic bypass
. Powerbridge 16.5 MWs
. Diesel engine CAT 3512, mounted on a common base-frame together with
Piller rotary UB-machine via SSS overhaul-clutch.
. Noise and emissions as already specified by Piller GmbH, which has to
be confirmed by the customer
Electrical driven radiator for cooling of the diesel engine
. Exhaust-silencer for an exhaust noise-level of 85 dB(A) in 1.5 meters
distance outdoor
. Delivery, off-loading, cranage and placing into position on site.
2.0 24 sets Automatic Transfer-switches APOTRANS (as an option and priced
separately)
AT 630, 3-pole
3.0 1 Electrical installation, incl.
. Cable-works between UPS output and Transfer switch input, incl. the
required switchboards
. Interconnection between UPS's, transfer switches and diesel-
engine/diesel-control cubicle and for the internal communication of
our units.
. The supply of the cable length will be up to 10 meters each.
4.0 1 Mechanical installation, incl.
. Erection on site for UPS, switchboards, base-frames, transfer
switches, exhaust silencer and radiators
. Air ducts between UPS cubicles and UPS-machine, as well as air ducts
between UPS machine and outlet. This supply is based on a distance
between UPS-cubicle and the rotary converter of up to 7 meters.
Water-pipe work between radiator and diesel engine.
. Fuel-pipe work between day tank and diesel engines. These pipe works
will be supplied until a length of 20 meters each.
5.0 3 sets Diesel-engine silencer
. The exhaust silencer will be provided for an outdoor noise-level of 85
dB(A) in 1.5 meters.
. The delivery of these includes all pipes between diesel engine and
muffler and ends on the flange at the muffler exhaust outlet.
6.0 1 Fuel for commissioning
The fuel will be provided to the bulk storage tank.
7.0 1 Supervision for the erection, commissioning and testing-phase
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For a.m. works it is planned to send Piller GmbH's engineers on site
for the duration of the installation, commissioning and hand over.
8.0 5 sets Documentation
Including engineering drawings and manuals for the equipment and
maintenance.
The scope of supply also describes equipment and services to be provided by
Piller GmbH to include the design, manufacture, delivery to site, clearing of
customs, cranage, installation, off site and on-site testing, commissioning, and
demonstration to the Customer.
All interconnecting pipe work, support brackets, fixtures and fittings, cabling,
and ancillary equipment required to supply a fully operational system will be
included.
In addition to the a.m. items, the scope of supply is also shown in the attached
drawing (drw. No. 42.8.095.8354)
All Piller equipment will be delivered in accordance with the standards set
forth in Annex I.
Only for clarification, the following items are not included in the scope of
----------------------------------------------------------------------------
works.
------
1.0 The day tanks will be supplied and installed by the customer
2.0 All components/facilities/devices upstream of the UPS and downstream the
transfer switches will be provided by the customer. Transfer switches-
supply to be confirmed by the customer and given as a separate line-priced
item in the Turnkey System Agreement.
3.0 All cable work to feed to UPS and downstream the Transfer switches will be
provided by the customer.
4.0 Louvers and noise damping-equipment on the front walls of building to cover
the attenuator will be completely supplied and installed by the Customer.
The Customer shall remove and replace these louvers to allow access for
installation as required and agreed by both parties.
5.0 All required test loads, including the cable works, will be provided by the
Customer.
6.0 All cableways, traces and apertures in the existing structure and making
good, to allow for the installation of cable support systems and cable,
shall be provided by the customer.
7.0 The supply and preparation include free access to the cableways, which the
Customer must provide.
8.0 All reinforcements within the building to carry the load of the Piller
equipment shall be provided by the Customer. This shall also include all
access ways inside the building.
9.0 The Customer shall insure that side conditions e.g. temperature, humidity
and cleanness are in accordance with the requirements of the Piller
specifications. The figures shall not exceed:
42
<PAGE>
Temperature: 0-40C
Humidity: 0-95%
10. The Customer shall confirm and ensure that all external access points,
roads and standing areas to be used during off-loading and craning of the
equipment are all capable of withstanding the imposed loads of the
transportation equipment, cranage and Piller equipment during the delivery
period.
11. Exhaust pipe work downstream to the exhaust silencer.
12. Any further airducts as mentioned in item 4.0 in the scope of supply will
be supplied by the client.
13. If any Hong Kong government approvals or permissions are required, this has
to be handled by the Customer, except those approvals and permissions
related or incidental to the import, delivery and installation of the Hong
Kong Systems and the Supplier's staff. All required information concerning
the Piller equipment shall be provided within five (5) working days after
signing the Turnkey Systems Agreement.
14. The cost for flights, hotel and accommodation are not included in the
prices for the Piller supervisor and commissioning engineers, nor are they
included in the cost of customer training.
43
<PAGE>
Annex VIII
----------
SYSTEMS STANDARDS & STANDARD TESTING PROCEDURES CHECKLIST
44
<PAGE>
Dated the day of July 6, 2000
-----------------------------
IASIAWORKS (HK) LIMITED
and
WEELEK COMPANY LIMITED
and
PILLER GmbH GERMANY
________________________________________________
NOVATION AGREEMENT
________________________________________________
Woo, Kwan, Lee & Lo,
Solicitors & c.,
26th Floor Jardine House,
1 Connaught Place,
Central, Hong Kong
<PAGE>
THIS NOVATION AGREEMENT is made the day of July 6, 2000
BETWEEN
IASIAWORKS (HK) LIMITED a company organized under the laws of Hong Kong with
offices at 27/th/ Floor, Hongkong Telecom Tower, 979 King's Road, Quarry Bay,
Hong Kong ("the Assignor", which term shall, where the context so admits,
include its successors and assigns); and
WEELEK COMPANY LIMITED, a company incorporated in Hong Kong with offices at
45/th/ Floor, Sun Hung Kai Centre, 30 Harbour Road, Hong Kong ("the Assignee",
which term shall, where the context so admits, include its successors and
assigns); and
PILLER GmbH GERMANY, a company organized under the laws of Germany with offices
at Abgunst 24, 37520 Osterode, Germany ("the Supplier", which term shall, where
the context so admits, include its successors and assigns)
WHEREAS
(1) The Assignor, iAdvantage and the Assignee have entered into a services
agreement dated June 10, 2000 ("Controlling Agreement") in respect of and
concerning the long-term lease of the property described therein from the
Assignee to the Assignor.
(2) The Assignor and the Supplier have entered into a turn-key system agreement
of even date herewith ("the Turnkey Agreement") whereby the Supplier agreed
to supply, deliver and install three sets of PILLER UNIBLOCK T Diesel
Systems more particularly described in the Turnkey Agreement ("the
Systems") in Hong Kong. The Premises are more particularly described in
Annex V of the Turnkey Agreement ("the Premises").
(3) Pursuant to the Controlling Agreement and an amendment thereto, the
Assignor has agreed to assign to Weelek all the rights, obligations and
benefits of the Turnkey Agreement in so far as they relate to the Hong Kong
Systems and Weelek has agreed to accept such assignment and all
corresponding rights, obligations and benefits ("Rights").
NOW, THEREFORE, for good and valuable consideration and in consideration of the
mutual covenants and conditions hereby contained, the parties hereby agree as
follows:
THIS AGREEMENT WITNESSETH AS FOLLOWS:-
1. Interpretation
--------------
Words denoted the singular shall include the plural and vice versa, and
words denoting one gender shall include all other genders;
Words and expressions defined in the Turnkey Agreement shall, unless
otherwise defined, have the same meaning in this Agreement;
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<PAGE>
Marginal notes and headings are intended for guidance only and the
provisions herein shall not be in any way affected or limited thereby;
All references to "Hong Kong" shall mean the Hong Kong Special
Administrative Region, of the People's Republic of China and reference to
"the Government" shall mean the Government of Hong Kong.
2. Assignment
----------
2.1 In consideration of the Assignee's undertakings herein, the Assignor HEREBY
ASSIGNS unto the Assignee the full benefit of the Turnkey Agreement in
respect of the Hong Kong Systems and all rights, titles, benefits,
advantages, claims and demands whatsoever relating to the same to which the
Assignor is thereby or otherwise in any manner entitled TO HOLD the same to
the Assignee absolutely.
2.2 The Assignor shall perform all such lawful acts, assurances and things for
further or more perfectly assuring the Turnkey Agreement, or any part
thereof which may be still vested or may at any later date be vested in the
Assignor in so far as it relates to the Hong Kong Systems, to the Assignee
and to those deriving all rights, titles, benefits, advantages, claims and
demands whatsoever relating to the same under the Assignee, as shall from
time to time and at all times be reasonably requested by the Assignee, or
any person deriving title under it, to be executed and done at the costs of
the Assignee.
2.3 The Assignor represents and warrants to the Assignee that:
(a) it has not committed and shall not commit any breach of the Turnkey
Agreement;
(b) it has obtained all necessary approvals, consents and authorizations to
enter into this Agreement and to perform and carry out its obligations
hereunder;
(c) the persons executing this Agreement on its behalf have express authority
to do so;
(d) the execution, delivery and performance of this Agreement do not violate
any provision of any bylaw, charter, regulation, or any other governing
authority of the Assignor; nor do they violate any obligation pursuant to
any contractual agreement between the Assignor and a third party to which
the Assignor is bound as of the date hereof.
3. Supplier's consent and covenants
--------------------------------
3.1 In consideration of the Assignee's undertaking herein, the Supplier
consents to the assignment by the Assignor to the Assignee of the
Assignor's rights and obligations under the Turnkey Agreement in relation
to the Hong Kong Systems and covenants with the Assignee to perform the
obligations and comply with the terms and conditions of the Turnkey
Agreement as far as it relates to the Hong Kong Systems. The Supplier
shall exercise the same standard of skill and owe the same duty of care to
the Assignee in respect of the Hong Kong Systems to the same extent and in
like manner as to the Assignor under the Turnkey Agreement.
2
<PAGE>
3.2 The Supplier confirms that all indemnities, representations, guarantees and
warranties given by the Supplier to the Assignor under the Turnkey
Agreement shall extend to the Assignee to the extent of the Hong Kong
Systems.
3.3 To the extent that any copyright or any other property relating to the
Hong Kong Systems is now or at any later date vested in the Supplier, the
Supplier grants to the Assignee full and irrevocable licence to use the
same for all purposes in respect of the Hong Kong Systems.
3.4 In consideration of the Assignee's undertakings given in substitution of
the Assignor under this Agreement, the Supplier hereby releases and
discharges the Assignor unconditionally from all claims and demands in
respect of the Assignor's obligations under the Turnkey Agreement in so far
as such obligations relate to the Hong Kong Systems.
3.5 The Supplier represents and warrants to the Assignee that:
(a) it has not committed and shall not commit any breach of the Turnkey
Agreement so far as it relates to the Hong Kong Systems;
(b) it has obtained all necessary approvals, consents and authorizations to
enter into this Agreement and to perform and carry out its obligations
hereunder;
(c) the persons executing this Agreement on its behalf have express authority
to do so;
(d) the execution, delivery and performance of this Agreement does not violate
any provision of any bylaw, charter, regulation, or any other governing
authority of the Supplier; nor does it violate any obligation pursuant to
any contractual agreement between the Supplier and a third party to which
the Supplier is bound at the date hereof.
4. Assignee's covenants
--------------------
4.1 In consideration of the assignment under clause 2, and the Supplier's
consent and covenants under clause 3, the Assignee covenants with the
Supplier that it hereby accepts and agrees to perform the Turnkey Agreement
and be bound by the terms of the Turnkey Agreement as if the Assignee were
a party to the Turnkey Agreement in lieu of the Assignor but only to the
extent it relates to the Hong Kong Systems.
4.2 The Assignee agrees to reimburse the Assignor for any part of the Price in
respect of the Hong Kong Systems previously paid by the Assignor to the
Supplier pursuant to the Turnkey Agreement, free of interest, within
fourteen (14) days of receipt of a written demand of the Assignor.
4.3 The Assignee represents and warrants to the Assignor and the Supplier
that:-
(a) it shall not commit any breach of the Turnkey Agreement;
3
<PAGE>
(b) it has obtained all necessary approvals, consents and authorizations to
enter into this Agreement and to perform and carry out its obligations
hereunder;
(c) the persons executing this Agreement on its behalf have express authority
to do so;
(d) the execution, delivery and performance of this Agreement does not violate
any provision of any bylaw, charter, regulation, or any other governing
authority of the Assignee; nor does it violate any obligation pursuant to
any contractual agreement between the Assignee and a third party to which
the Assignee is bound at the date hereof.
5. Variation and inconsistency
---------------------------
5.1 Any amendment or variation of this Agreement is not effective unless it is
in writing and signed by the parties.
5.2 This Agreement shall be governed by the laws of Hong Kong. With respect to
dispute resolution, Clause 13 of the Turnkey Agreement, which is fully
known to the parties and of which a copy is attached to this Agreement,
shall apply accordingly. In the event that more than two parties are
involved in any arbitration, all three arbitrators shall be nominated by
the International Chamber of Commerce, Paris.
5.3 Notice required to be given by any party to another shall be in the English
language and shall be in writing and personally delivered or transmitted by
post to the corresponding address stated herein or as may otherwise be
notified by the party concerned. Notices relating to the Hong Kong Systems
to the Customer in the Turnkey Agreement shall be served to the Assignee
with a copy to Assignor at the address first above written. In particular,
unless the parties otherwise notify the other:
(a) The Supplier shall send notices to the Assignee as follows:
Weelek Company Limited
45 th Floor, Sun Hung Kai Centre
30 Harbour Road, Wan Chai
Hong Kong
Attn: Mr. Simon Kwok
(b) the Assignee shall send notices to the Supplier as follows:
Piller GmbH
Abgunst 24
37520 Osterode
Germany
5.4 For the avoidance of doubt, this Agreement shall apply to the Hong Kong
Systems in the Turnkey Agreement but no other Systems therein, and all
terms and conditions in respect of other Systems provided for in the
Turnkey Agreement shall remain unchanged and in full force and effect
between the Assignor and the Supplier. Any failure on the part of the
Assignor or the Supplier in performing their respective obligations and in
complying with the terms of the Turnkey Agreement in respect of other
Systems shall not affect the Assignee's rights and benefits in relation to
the
4
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Hong Kong Systems and the Turnkey Agreement, in so far as they relate to
the Hong Kong Systems and this Agreement, shall remain in full force and
effect.
5.5 If anything in this Agreement is unenforceable, illegal or void then it is
severed from this Agreement and the rest of this Agreement and the Turnkey
Agreement shall remain in force.
6. Limitation of Liability
-----------------------
6.1 The parties to this Agreement acknowledge and agree that the warranties and
liabilities of the Supplier are finally stipulated in the Turnkey
Agreement. Therefore, the Supplier does not undertake and shall not have
any additional liabilities under this Agreement.
6.2 None of the parties shall be liable towards the others for any indirect
and/or consequential damages, including but not limited to loss of profit,
loss of interest and loss of production.
5
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IN WITNESS WHEREOF, the parties have hereunto executed this Agreement as of the
day and year first above written.
SIGNED by )
)
for and on behalf of the Assignor )
in the presence of )
SIGNED by )
)
for and on behalf of the Assignee )
in the presence of )
SIGNED by )
)
for and on behalf of the Supplier )
in the presence of )
6
