SCHEDULE 9
This is Schedule 9 comprising the Collateral Agreements referred to in the Public Private Partnership
Agreement entered into
between
City of Tshwane Metropolitan Municipality
and
[Private Party (Proprietary) Limited]
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Page 1 of 17
February 2014
SCHEDULE 9
This is Schedule 9 comprising the Collateral Agreements referred to in the Public Private Partnership
Agreement entered into
between
City of Tshwane Metropolitan Municipality
and
[Private Party (Proprietary) Limited]
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Page 2 of 17
February 2014
Part 1 – Construction Subcontractor's Collateral Agreement
Private & Confidential
DATED
2014
[CONSTRUCTION SUBCONTRACTOR]
and
[CITY OF TSHWANE METROPOLITAN MUNICIPALITY]
and
[PRIVATE PARTY (PROPRIETARY) LIMITED]
CONSTRUCTION SUBCONTRACTOR’S
COLLATERAL AGREEMENT
in relation to CoT’s Public Private Partnership
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Page 3 of 17
February 2014
THIS AGREEMENT is made on the
day of
2013.
BETWEEN:
(1)
[CONSTRUCTION SUBCONTRACTOR]
(a company registered in accordance with the laws of the Republic of South Africa under
registration No_________________________)
and
(2)
CITY OF TSHWANE MEROPOLITAN MUNICIPALITY
("CoT")
and
(3)
[PRIVATE PARTY (PROPRIETARY) LIMITED
(a company registered in accordance with the laws of the Republic of South Africa under
registration No__________________________)
("the Private Party")
WHEREAS:
(A)
The CoT and [____________] ("Private Party") [whose registered office is at [________]
have entered into an agreement dated [
] (the "PPP Agreement") whereby the Private
Party has agreed to finance, design, construct, operate and maintain new head office facilities
for CoT pursuant to CoT’s public private partnership initiative (the "Project").
(B)
The Private Party and the Construction Subcontractor have entered into an agreement dated
[__________] (the "Construction Subcontract") whereby the Construction Subcontractor has
agreed to carry out and complete that part of the Project, comprising the design, construction,
testing and commissioning of the new facilities including all necessary infrastructure and
landscaping all as more particularly described in the Construction Subcontract.
(C)
It is a condition of the Construction Subcontract that the Construction Subcontractor enters
into this Agreement for the benefit of the CoT.
NOW THIS AGREEMENT WITNESSES the Construction Subcontractor acknowledges as follows:-
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Page 4 of 17
February 2014
1.
INTRODUCTION
1.1
Unless the context otherwise requires, words and expression defined in the PPP Agreement
have the same meaning in this Agreement as in the PPP Agreement.
1.2
The headings in this Agreement do not affect its interpretation.
1.3
Unless the context otherwise requires, all references to clauses and schedules are
references to clauses and schedules to this Agreement.
2.
DUTY OF CARE
The Construction Subcontractor warrants to CoT that it has with effect from the date upon
which it has commenced with the Works carried out and shall carry out the duties and
obligations on its part to be performed under and in connection with the Project in
accordance with and subject to the terms of the Construction Subcontract and that in
performing the same it has used and shall use all the professional skill and care and
diligence reasonably to be expected of suitably qualified and experienced consultants
performing services the like of those undertaken by the Construction Subcontractor under
the Construction Subcontract in relation to projects of similar size, scale and character as the
Project. This warranty shall only be effective from the date of the service by the CoT of the
notice in accordance with clause 5.3.
3.
WARRANTY AGREEMENTS FROM CONSULTANTS/SUBCONTRACTOR
The Construction Subcontractor shall procure that any consultant or sub-contractor with a
design responsibility and/or who has entered into a contract for an annual value of
R40 000 000,00 (forty million Rand) and above in relation to the Project shall execute and
deliver to the CoT an agreement in a form substantially in the form set out in Part 2 of this
Schedule 9, which shall be entered into by such a consultant or a subcontractor with the
CoT.
4.
CoT's RIGHTS ON TERMINATION OF THE PPP AGREEMENT
4.1
The Construction Subcontractor warrants to the CoT that it shall not terminate or treat as
terminated its employment under the Construction Subcontract, or discontinue the
construction of the Project, without first giving to the CoT not less than twenty (20) Business
Days’ prior notice of the Construction Subcontractor's intention to do so, specifying the
grounds for so doing.
4.2
If the CoT serves on the Construction Subcontractor a notice in accordance with clause 4.3,
the Construction Subcontractor shall not terminate or treat as terminated its employment, or
discontinue the performance of any of its obligations, under the Construction Subcontract but
service of such notice shall not prejudice any other right or remedy the Construction
Subcontractor may have under, or in connection with, the Construction Subcontract.
4.3
Unless the employment of the Construction Subcontractor under the Construction
Subcontract shall have been determined or terminated previously (and whether or not the
Construction Subcontractor shall have served notice on the CoT pursuant to clause 4.1) the
CoT shall subject to clauses 4.3.1 and 4.3.2, be entitled at any time to serve upon the
Construction Subcontractor a notice requiring the Construction Subcontractor to thereafter
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New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Page 5 of 17
February 2014
accept the instructions of the CoT or its nominee under and in connection with the
Construction Subcontract ("Collateral Agreement Enforcement Notice") and the Construction
Subcontractor shall comply with such notice. The CoT shall be only entitled to serve the
Collateral Agreement Enforcement Notice in terms of this clause 4.3 following, -
4.4
4.3.1
the service of a notice of termination of the PPP Agreement other than in the case
of Private Party Default referred to in clause 4.3.2 below upon and such
termination becoming effective; or
4.3.2
the service of a notice of default on the Private Party in terms of clause 43.1.3(ii) of
the PPP Agreement and the Private Party having failed to rectify the relevant
Private Party Default within the time provided for such rectification or to provide or
implement a rectification programme (where applicable in terms of the PPP
Agreement) in accordance with its terms and the terms of the PPP Agreement; or
4.3.3
the service of a notice to terminate the PPP Agreement in terms of Clause 44.1
[Force Majeure] where the CoT and Construction Subcontractor agree or it is
determined pursuant to a Fast Track Dispute Resolution Procedure that
performance under the Construction Subcontract is possible notwithstanding the
Force Majeure.
As from the date of service of the Collateral Agreement Enforcement Notice under clause
4.3, such notice to be served not less than fifteen (15) days before the proposed Termination
Date or such longer period as the Construction Subcontractor may agree, acting reasonably,
the CoT shall notify the Construction Subcontractor that the CoT requires:
4.4.1
that the Construction Subcontractor should continue to perform its obligations
under the Construction Subcontract, notwithstanding the termination of the PPP
Agreement; and
4.4.2
that it assumes all the rights and perform all the obligations of the Private Party
under the Construction Subcontract including any obligations of the Private Party
which remain to be performed and/or accrue after the date of the service of the
notice, provided that this shall not affect or derogate from any right of action the
Private Party may have against the Construction Subcontractor in respect of any
breach by the Construction Subcontractor of its obligations under the Construction
Subcontract happening prior to the date of service of the Collateral Agreement
Enforcement Notice by the CoT under clause 4.3, and the Construction
Subcontract shall remain in force subject to the following terms and conditions:
(a)
[the CoT shall accept liability and responsibility for the obligations of the
Private Party under the Construction Subcontract (including any
insurance obligations) and shall as soon as practicable thereafter,
remedy any outstanding breach by the Private Party, including any nonpayment of sums due to the Construction Subcontractor;
(b)
[the CoT shall, from the date of service of the notice in accordance with
clause 4.3 above, be responsible for all sums properly payable to the
Construction Subcontractor in terms of the Construction Subcontract,
accruing after the service of the notice in accordance with clause 5.3
above, provided that the CoT shall, in paying such sums be entitled to the
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Page 6 of 17
February 2014
same rights of set-off and deduction as would have applied to the Private
Party in terms of the Construction Subcontract;
(c)
the Construction Subcontractor shall, notwithstanding any clause in this
agreement and/or any payments made in terms hereof, not be obliged to
comply with any direction or instruction from the CoT unless the
Collateral Agreement Enforcement Notice in terms of clause 4.3 above
has been issued;
(d)
the Parties recognise that the Construction Subcontract has been
prepared on the basis that it is a subcontract to the PPP Agreement
which agreement is a principal agreement, following a Collateral
Agreement Enforcement Notice the CoT and the Construction
Subcontractor shall enter into good faith discussions with regard to the
conclusion of an amendment agreement, on terms acceptable to the
Parties, to ensure that:
(i)
the Construction Subcontract becomes a principal agreement;
(ii)
those provisions in the PPP Agreement that affect the
implementation of the Construction Subcontract or any
obligation of the Private Party to comply with its obligations
under the Construction Subcontract or exercise of any right
under the Construction Subcontract or any entitlement to relief
in the Construction Subcontract being subject to such relief
being obtained by the Private Party under the PPP Agreement
are incorporated into the Construction Subcontract with the
necessary amendments
(iii)
the CoT is substituted for the Private Party in terms of such
Construction Subcontract and that the CoT is in a no better, no
worse position in relation to the position that the Private Party
enjoyed under the Construction Subcontract prior to issuance of
a Collateral Agreement Enforcement Notice;
(iv)
the Construction Subcontractor is in a no better, no worse
position as a result of the issuance of the Collateral Agreement
Enforcement Notice; and
(v)
the risk transfer between the parties to the Construction
Subcontract prior to the issue of a Collateral Agreement
Enforcement Notice is maintained.; and
4.5
If the CoT and Construction Subcontractor fail to conclude the amendment agreement within
120 (one hundred and twenty) days of Termination Date, either CoT or the Construction
Subcontractor shall refer the matter to Fast Track Dispute Resolution for an award ensuring
that the provisions of clause 4.4.2(d) above are realised. Pending agreement or Fast Track
Dispute Resolution Procedure, the provisions of clause 4.6 below shall apply.
4.6
The CoT and the Construction Subcontractor agree that the Construction Subcontract has
been prepared in connection with the Project and on the basis that it is a subcontract to the
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Page 7 of 17
February 2014
PPP Agreement. Following the service of the Collateral Agreement Enforcement Notice, the
Construction Subcontract shall be interpreted in a manner so as not to prejudice the
Construction Subcontractor in view of any reference in the Construction Subcontractor to the
PPP Agreement or any obligation on the Private Party to comply with its obligations in terms
of the PPP Agreement or exercise any right in terms of the PPP Agreement or any
entitlement to relief in the Construction Subcontract being subject to such relief being
obtained by the Private Party under the PPP Agreement. This provision shall apply until the
Parties have concluded the amendment agreement.
5.
SERVICE OF NOTICES
5.1
All notices under this Agreement shall be in writing and all certificates, notices or written
instructions to be given under the terms of this Agreement shall be served by hand, by
facsimile transmission or by email to the address and/or facsimile number set out below:
If to the Private Party
Address:
Fax No:
If to the CoT
Address:
Fax No:
If to the Construction Subcontractor
Address:
Fax No:
5.2
Any party to this Agreement may change its nominated address, facsimile number or email
address by prior written notice to the other parties.
5.3
Notices will be deemed to have been received:
5.3.1
If delivered by hand, upon delivery;
5.3.2
If sent by facsimile transmission, when there is confirmation of uninterrupted
transmission by a transmission report and where there has been no telephonic
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New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Page 8 of 17
February 2014
communication by the recipient to the senders that the facsimile has not been
received in legible form:
6.
(a)
within two (2) hours after sending, if sent on a Business Day between the
hours of 8am and 3pm; or
(b)
by 11am on the next following Business Day, if sent after 3pm on a
Business Day but before 8am on that next following Business Day; and
LIABILITY
The Construction Subcontractor shall owe no greater duties to the CoT under this
Agreement than it would have owed to the CoT had the CoT been named as "employer" in
the Construction Subcontract.
7.
ASSIGNMENT
7.1
This Agreement shall be capable of assignment only by the Construction Subcontractor with
the prior written consent of the CoT which consent shall not be unreasonably withheld.
7.2
The CoT shall only assign the benefit of this Agreement to the person to whom the PPP
Agreement is assigned by the CoT in terms of Clause 48.1.2.
8.
SEVERABILITY
If any provision of this Agreement shall be or become illegal, invalid or unenforceable, the
effectiveness of the remaining provisions of this Agreement shall not be prejudiced or
impaired.
9.
GOVERNING LAW AND JURISDICTION
This Agreement shall be subject to the laws of the Republic of South Africa and the Courts of
the Republic of South Africa shall have exclusive jurisdiction to hear and settle any action,
suit, or proceeding or dispute in connection with this Agreement and the parties to this
Agreement irrevocably submit to the jurisdiction of these Courts.
10.
WAIVER
Any failure of or delay by a party in relation to the exercise of its rights under this Agreement
shall not constitute a waiver of any such rights and any waiver in respect of one act or
omission shall not constitute a waiver in respect of any other or future acts or omissions.
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Page 9 of 17
February 2014
IN WITNESS whereof the respective Parties have signed and executed this Agreement as a
Agreement the day and year first above written.
SIGNED at
on
2014
For:
PRIVATE PARTY
________________________________
Signatory:
Capacity:
Authority:
SIGNED at
on
2014
For:
CONSTRUCTION SUBCONTRACTOR
________________________________
Signatory:
Capacity:
Authority:
SIGNED at
on
2014
For:
CoT
________________________________
Signatory:
Capacity:
Authority:
SIGNED at
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
on
2014
Page 10 of 17
February 2014
Part 2 – Design Consultant Collateral Agreement
Private & Confidential
DATED
2014
[CONSULTANT]
and
[CITY OF TSHWANE METROPOLITAN MUNICIPALITY]
and
[CONSTRUCTION SUBCONTRACTOR] (“Appointing Contractor”)
DESIGN CONSULTANT’S COLLATERAL
AGREEMENT
in relation to CoT’s Public Private
Partnership
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Page 11 of 17
February 2014
THIS AGREEMENT is made on the
day of
2014.
BETWEEN:
(1)
[CONSULTANT] [of] [whose registered office is at] [
] (the "Consultant") which
expression shall include its permitted successors and assigns
and
(2)
CITY OF TSHWANE MEROPOLITAN MUNICIPALITY
and
(3)
[CONSTRUCTION SUBCONTRACTOR]
(a company registered in accordance with the laws of the Republic of South Africa under
registration No_________________________)
WHEREAS:
(A)
(B)
The CoT and [____________] ("Private Party") [whose registered office is at
[________] have entered into an agreement dated [
] (the "PPP Agreement")
whereby the Private Party has agreed to finance, design, construct, operate and maintain
new head office facilities for CoT pursuant to CoT’s public private partnership initiative
(the "Project").
(B)
The Private Party and the Construction Subcontractor have entered into an agreement
dated [__________] (the "Construction Subcontract") whereby the Construction
Subcontractor has agreed to carry out and complete that part of the Project, which
comprises the design, construction, testing and commissioning of the new facilities
including all necessary infrastructure and landscaping all as more particularly described
in the Construction Subcontract.
(C)
The Construction Subcontractor and the Consultant have entered into a [
] Contract
whereby the Design Consultant has agreed to carry out parts of the Works relating to the
design of the Facilities.
(E)_
It is a condition of the Appointment that the Consultant enters into a collateral agreement as
set out below.
NOW THIS AGREEMENT WITNESSES the Consultant acknowledges as follows:1.
DUTY OF CARE
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Page 12 of 17
February 2014
The Consultant warrants to the CoT that as at the date of the CoT exercising its rights in
terms of clause 3.2 it will observe and perform all of its duties and obligations expressed
in or arising out of the Appointment.
2.
UNDERTAKING
2.1
The Construction Subcontractor undertakes that it shall require the Consultant to deliver
its subcontract (“Appointment”).
2.2
The Consultant undertakes to deliver its Appointment to the CoT on signature of this
Collateral Agreement.
3.
CESSION
3.1
In the event that the Construction Subcontract is terminated, the Consultant undertakes,
without prejudice to its rights to payment in terms of the Appointment, that it shall not
terminate or treat as terminated the Appointment, or discontinue the performance of any
of its duties or obligations under the Appointment, and shall within a reasonable time
following such termination of the Construction Subcontract cede its Appointment from
the Construction Subcontractor to the CoT, upon CoT’s request.
3.2
In the event that the Construction Subcontract is terminated, the Construction
Subcontractor agrees to the aforegoing cession.
4.
SERVICE OF NOTICE
4.1
All notices under this Agreement shall be in writing and all certificates, notices or written
instructions to be given under the terms of this Agreement shall be served by sending
the same by first class post, facsimile or by hand, leaving the same at::
If to the Consultant
Address:
Fax No:
If to the CoT
Address:
Fax No:
If to the Construction Subcontractor
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Address:
Page 13 of 17
February 2014
Fax No:
4.2
Any party to this Agreement may change its nominated address or facsimile number by
prior written notice to the other parties.
4.3
Notices given by post shall be effective upon the earlier of (i) actual receipt, and (ii) five
(5) Business Days after mailing. Notices delivered by hand shall be effective upon
delivery. Notices given by facsimile shall be deemed to have been received where there
is confirmation of uninterrupted transmission by a transmission report and where there
has been no telephonic communication by the recipient to the senders (to be confirmed
in writing) that the facsimile has not been received in legible form:
5.
4.3.1
within two (2) hours after sending, if sent on a Business Day between the
hours of 9am and 4pm (all times GMT+2hours); or
4.3.2
by 11am on the next following Business Day, if sent after 4pm, on a
Business Day but before 9am on that next following Business Day (all times
GMT+2hours).
LIABILITY
The Consultant shall, other than for liability or duty otherwise provided for in this
Collateral Agreement, owe no greater duties or liabilities to the CoT under this
Agreement than it does to the Construction Subcontractor under the Appointment in
respect of the Works as detailed therein.
6.
CONFIDENTIALITY
6.1
Subject to clause 7.2 the Consultant warrants that, with respect to all Confidential
Information released to it by any other Party, it shall:
6.1.1
keep the Confidential Information in strict confidence and secrecy and not
disclose the Confidential Information to any third party (save as permitted by
clause 7.2 );
6.1.2
not use the Confidential Information save for complying with its obligations
under the Appointment;
6.1.3
restrict the disclosure of the relevant parts of the Confidential Information to
such of its employees, sub-contractors, professional advisers and other
persons as may be expressly required by the Appointment who, to the extent
necessary to enable the Consultant to perform its obligations under the
Appointment, need such information in the performance of their duties as
envisaged by the Appointment and, in such circumstances, to ensure that
such employees, sub-contractors, professional advisers and others are aware
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New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Page 14 of 17
February 2014
of the confidential nature of the Confidential Information and keep the same
strictly confidential.
6.2
The obligation to maintain the confidentiality of the Confidential Information shall not
apply to Confidential Information:
6.2.1
which the CoT confirms in writing is not required to be treated as Confidential
Information;
6.2.2
which is or comes into the public domain otherwise than through any
disclosure prohibited by this Agreement;
6.2.3
to the extent the Consultant is required to disclose such Confidential
Information by any applicable Laws or the rules of a recognised stock
exchange or any regulatory or government authority (but only to that extent);
6.2.4
to the extent required to be disclosed in order for Private Party to comply with
its duties to disclose information for the purposes of the CoT’s auditing
requirements under the PPP Agreement.
6.3
The obligations of this clause 6 shall continue to be in force notwithstanding the
termination of the Appointment.
7.
CORRUPT GIFTS AND PAYMENTS
7.1
The Consultant shall use its best endeavours to procure that it or its agents shall not:
7.1.1
offer, give or agree to give to the CoT or any public authority or to any person
employed by or on behalf of the CoT or any other public authority any gift or
consideration of any kind as an inducement or reward:
(a)
for doing or not doing or for having done or not having done any act
in relation to the obtaining or performance of the PPP Agreement,
the Construction and/or Operations Subcontracts or the Appointment
or any other agreement with the CoT or any other public authority; or
(b)
for showing or not showing favour or disfavour to any person in
relation to the PPP Agreement, the Construction and/or the
Operations Subcontracts or the Appointment or any other agreement
with the CoT or any other public authority;
7.1.2
enter into the Appointment or any other agreement with the CoT or any other
public authority in connection with which commission has been paid or has
been agreed to be paid by the Consultant or on its behalf, or to its knowledge,
unless before the relevant agreement is entered into particulars of any such
commission and of the terms and conditions of any such agreement for the
payment of such commission have been disclosed in writing to the CoT;
7.1.3
commit any offence:
(a)
under the Corruption Act 94 of 1992;
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New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Page 15 of 17
February 2014
7.1.4
(b)
under any Laws creating offences in respect of fraudulent acts; or
(c)
at common law, in respect of fraudulent acts in relation to the
Appointment or any other agreement with the CoT or any other
public authority;
defraud or attempt to defraud or conspiring to defraud the CoT or any other
public authority.
7.2
The Consultant warrants that it has not committed any of the acts forbidden by clauses
7.1.1, 7.1.2, 7.1.3 and 7.1.4.
8.
ASSIGNMENT
8.1
The benefit of this Agreement is not assignable by the Consultant.
8.2
The CoT shall only assign the benefit of this Agreement to whom the PPP Agreement is
assigned by the CoT in terms of Clause 49.1.2.
9.
GOVERNING LAW AND JURISDICTION
This Agreement shall be subject to the laws of South Africa and the Courts of South
Africa shall have exclusive jurisdiction to hear and settle any action, suit, or proceeding
or dispute in connection with this Agreement and the parties to this Agreement
irrevocably submit to the jurisdiction of these Courts.
10.
SEVERABILITY
If any provision of this Agreement shall be or become illegal, invalid or unenforceable,
the effectiveness of the remaining provisions of this Agreement shall not be prejudiced
or impaired.
11.
WAIVER
Any failure of or delay by a Party in relation to the exercise of its rights under this
Agreement shall not constitute a waiver of any such rights and any waiver in respect of
one act or omission shall not constitute a waiver in respect of any other or future acts or
omissions.
IN WITNESS whereof the respective Parties have signed and executed this Agreement as a
Agreement the day and year first above written.
SIGNED at
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
on
2014
Page 16 of 17
February 2014
For:
CONSULTANT
________________________________
Signatory:
Capacity:
Authority:
SIGNED at
on
2014
For:
CoT
________________________________
Signatory:
Capacity:
Authority:
SIGNED at
on
2014
For:
CONSTRUCTION SUBCONTRACTOR
________________________________
Signatory:
Capacity:
Authority:
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Page 17 of 17
February 2014