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 11
February 2014
Part 3 – Operations Subcontractor Collateral Agreement
Private & Confidential
DATED
2014
OPERATIONS SUBCOTNRACTOR
and
CITY OF TSHWANE METROPOLITAN MUNICIPALITY
and
PRIVATE PARTY
OPERATIONS SUBCONTRACTOR COLLATERAL
AGREEMENT
in relation to the CoT's Public Private Partnership
Initiative
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Page 2 of 11
February 2014
THIS AGREEMENT is made on the
day of
2014
BETWEEN:
(1)
OPERATION SUBCONTRACTOR;
(2)
CITY OF TSHWANE METROPOLITAN MUNICIPALITY (the "CoT"); and
(3)
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 Operations Subcontractor have entered into an agreement
dated
[__________]
(the
"Operations
Subcontract")
whereby the
Operations
Subcontractor has agreed to carry out the Services in relation to the Project, as more
particularly described in the Operations Subcontract.
(C)
It is a condition of the Operations Subcontract that the Operations Subcontractor enters
into this Agreement for the benefit of the CoT.
NOW IT IS HEREBY AGREED as follows:
1.
Definitions, Interpretation, and Construction
1.1
Definitions
Subject to clause 1.2 in this Agreement, the following words and expressions shall have
the following meanings, insofar as the context shall admit:
"Operations
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New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
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February 2014
1.2
Subcontractor”
has the same definition assigned to it in the PPP
Agreement]
“Agreement"
means this agreement dated
2014 and made between the Private Party (1)
and the Operations Subcontractor (2) and the CoT (3);
"PPP Agreement"
means the agreement made between the CoT (1) and
the Private Party (2) dated
2014 in terms of which the Private Party has agreed to
finance and construct the Facilities, to operate and
maintain the Facilities, entailing the provision of
accommodation services, the management of and the
equipping, to the extent agreed, of the Facilities for the
CoT Public Private Partnership initiative (the "Project");
"Party"
means either the CoT, the Private Party or the
Operations Subcontractor and "Parties" shall include all
of them; and
“Successor Private Party”
means an entity appointed by the CoT to succeed the
Private Party with regard to the operation of the
Facilities;
Interpretation
1.2.1
In this Agreement, unless the context otherwise requires or save as expressly
defined or provided in this Agreement, where words and expressions appear
in capitalised terms, such words and expressions shall unless defined herein
have the same meaning as given to such words and expressions under the
PPP Agreement and shall be deemed to be incorporated into this Agreement.
1.2.2
In this Agreement, a reference to:
(a)
a "person" includes its successors and its permitted transferees and
assigns; and
(b)
a "document" is to that document as amended from time to time.
2.
CoT's RIGHTS ON TERMINATION OF THE PPP AGREEMENT
2.1
Following –
2.1.1
the service of a notice to terminate the PPP Agreement pursuant to a Private
Party Default and the Private Party having failed to rectify such relevant
Private Party Default within the time provided for such rectification in the PPP
Agreement (if applicable); or
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New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
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February 2014
2.1.2
the service of a notice to terminate the PPP Agreement in terms of Clause
45.1 [Force Majeure] where the CoT and the Operation Subcontractor agree
or it is determined pursuant to a Fast Track Dispute Resolution Procedure
that performance under the Operation Subcontract is possible
notwithstanding the Force Majeure,
and notwithstanding such giving of any notice of termination the CoT may at any time
by written notice to the Private Party and the Operations Subcontractor, such notice to
be served not less than fifteen (15) Business Days before the proposed Termination
Date ("Collateral Agreement Enforcement Notice"), notify the Operations
Subcontractor that notwithstanding the provisions of the Operations Subcontract, the
CoT requires (a) that the Operations Subcontractor should continue to perform its
obligations under the Operations Subcontract, notwithstanding the termination of the
PPP Agreement and (b) that the CoT will thenceforth become the Private Party under
the Operations Subcontract to the exclusion of the Private Party and thereupon the
Operations Subcontractor will admit that the CoT is the Private Party under the
Operations Subcontract and the Operations Subcontract will be and remain in full force
and effect subject to the following terms and conditions:
(a)
during the first two (2) Contract Months following the Collateral
Agreement Enforcement Notice payment for Services rendered shall
not be subject to any Deductions for any Contract Month falling
within the first two (2) Contract Months. After the expiry of the first
two (2) Contract Months the provisions of this Clause (a) shall no
longer apply and payment for Services rendered shall be subject to
Deductions in accordance with the provisions of the Operations
Subcontract;
(b)
the CoT shall accept liability for and be responsible for compliance
with the Private Party’s obligations under the Operations
Subcontract (including any insurance obligations) and will as soon
as practicable thereafter remedy any outstanding breach by the
Private Party including for the avoidance of doubt any non-payment
of sums due to the Operations Subcontractor to the extent that such
liabilities are due and have not been discharged or fulfilled by the
Private Party or, in the case of amounts due and payable, such
amounts have not been included in the compensation amount for
termination of the PPP Agreement pursuant to a Private Party
Dispute, or termination in terms of Schedule 16 [Compensation on
Termination]. The CoT shall not be liable for amounts that the
Private Party has intentionally or diligently failed to recover from third
parties; and
(c)
the CoT will from the service of such notice become responsible for
all sums properly payable to the Operations Subcontractor under the
Operations Subcontract accruing due after the service of the CoT’s
notice, provided that the Private Party has not prepaid such sums to
the Operations Subcontractor and that the CoT will in paying such
sums be entitled to the same rights of set-off and deduction as
would have applied to the Private Party under the Operations
Subcontract.
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
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February 2014
(d)
notwithstanding anything contained in this Agreement and
notwithstanding any payments which may be made by the CoT to
the Operations Subcontractor, the Operations Subcontractor will not
be under any duty to obey any direction or instruction from the CoT
unless and until the CoT has given the Collateral Agreement
Enforcement Notice;
(e)
the Parties recognise that the Operations 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 Operations
Subcontractor shall enter into good faith discussions with regard to
the conclusion of an amendment agreement on the terms
acceptable to the Parties to ensure that:
(i)
the Operation Subcontract becomes a principal agreement;
(ii)
those provisions in the PPP Agreement that affect the
implementation of the Operation Subcontract are
incorporated into the Operation Subcontract with the
necessary amendments;
(iii)
the provisions contemplated in clause 2.1.6 are amended
as appropriate to avoid the prejudice contemplated in such
clause;
(iv)
the CoT is substituted for the Private Party under the
Operations 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 Operation Subcontract prior to
issuance of a Collateral Agreement Enforcement Notice;
(v)
the Operations Subcontractor is in a no better, no worse
position as a result of the issuance of the Collateral
Agreement Enforcement Notice; and
(vi)
the risk transfer between the parties to the Operations
Subcontract prior to the issue of a Collateral Agreement
Enforcement Notice is maintained.
2.1.3
The Private Party acknowledges that the Operations Subcontractor will be
entitled to rely on a Collateral Agreement Enforcement Notice given to the
Operations Subcontractor by the CoT as conclusive evidence that the PPP
Agreement has been terminated by the CoT.
2.1.4
The CoT may by notice in writing to the Operations Subcontractor appoint
another person to exercise its rights under this clause subject to the CoT
remaining liable to the Operations Subcontractor as guarantor for its
appointee in respect of its obligations;
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New Municipal Headquarters Project
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February 2014
2.1.5
If the Parties fail to conclude the amendment agreement within 180 days of
the Termination Date either the CoT or the Operations Subcontractor shall
refer the matter to Fast Track Dispute Resolution for an award ensuring that
the provisions of clause 2.1.2(e) above are realised. Pending agreement or
Fast Track Dispute Resolution Procedure, the provisions of clause 2.1.6
below shall apply
2.1.6
The CoT and the Operations Subcontractor agrees that the Operations
Subcontract has been prepared on the basis that it is a subcontract to the
PPP Agreement. Following issuing of the Collateral Agreement Enforcement
Notice, the Operations Subcontract will be interpreted in a manner so that the
Operations Subcontractor is not prejudiced in view of any reference in the
Operations Subcontract to the PPP Agreement or any obligation on the
Private Party to comply with its obligations under the PPP Agreement or
exercise any right under the PPP Agreement or any entitlement to relief in the
Operations 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
3.
OBLIGATIONS TO ASSIST
3.1
Where the CoT does not require the provision of the Services the Operations
Subcontractor shall upon termination of the PPP Agreement (in circumstances where
the CoT does not require the provision of the Services) provide assistance to the CoT
with any transitional arrangements that may be required by the CoT to the extent
reasonable and necessary to achieve the minimum disruption to the provision of the
Services and an orderly handover and the implementation of an alternative to the
Services, whether provided by the CoT or a third party (or as the CoT shall direct). In
consideration of the provision of the assistance referred to in this clause 3.1 the
Operations Subcontractor shall be entitled to reimbursement of its proper and
reasonable costs and expenses in relation to the same.
3.2
For the purposes of clause 6.1 of this Agreement, the meaning of the term "co-operate"
shall include:
3.2.1
liaising with the CoT, the Successor Private Party and/or with such persons
as the CoT shall direct and providing reasonable assistance and advice
concerning the Services and their transfer to the CoT or to such Successor
Private Party or such persons as the CoT shall direct;
3.2.2
providing to the CoT, any Successor Private Party and/or any such person as
the CoT shall direct, such information concerning the Facilities and the
Services (including up to date copies of all manuals and procedures) which is
at its unrestricted disposal and is reasonably required for the efficient transfer
of responsibility for their performance.
4.
LIABILITY
4.1
In the event it exercises its rights under clause 2.1:
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New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
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February 2014
4.2
4.1.1
the CoT shall be responsible for all the duties, obligations and liabilities of the
Private Party to the Operations Subcontractor under the Operations
Subcontract relating to the Services;
4.1.2
The Operations Subcontractor shall owe no greater duties and shall have no
greater liabilities (which shall be subject to any limitations of the liability of the
Operations Subcontractor) to the CoT than it owed to the Private Party in the
Operations Subcontract
Prior to the CoT delivering a notice to the Private Party and the Operation
Subcontractor in terms of clause 3.1 4.2.1
the Operation Subcontractor shall have no obligation or liability to the CoT in
respect of rights, liabilities or obligations arising in respect of any Service or
Services provided by the Operations Subcontractor to the Private Party prior
to the Expiry Date or Termination Date, if earlier, and
4.2.2
The CoT shall have no obligation or liability to the other Parties in respect of
the acts, omissions or defaults of the Private Party pursuant to or in
connection with the Operations Subcontract
5.
SERVICE OF NOTICE
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 Operations Subcontractor
Address:
Fax No:
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Page 8 of 11
February 2014
5.2
Any party to this Agreement may change its nominated address, facsimile number or
email address by prior 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 communication by the recipient to the sender(s) that the facsimile
has not be received in legible form:
(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 but
before 8am on that next following Business Day; and
6.
ASSIGNMENT
6.1
This Agreement shall be capable of assignment only by the Operations Subcontractor
with the prior written consent of the CoT which consent shall not be unreasonably
withheld.
6.2
The CoT shall not assign the benefit of this Agreement to any third party without the
prior written consent of the Operations Subcontractor, provided that such consent shall
not be required in respect of the assignment by the CoT of this Agreement to any third
party to whom the PPP Agreement is assigned by the CoT in terms of Clause 49.1.28. .
7.
SUBCONTRACTING
The Operations Subcontractor shall not sub-contract its rights or obligations under this
Agreement in whole or in part without the written consent of the CoT.
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.
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.
10.
GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance with the laws of the
Republic of South Africa and the Courts of the Republic of South Africa shall have
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New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
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February 2014
exclusive jurisdiction to hear and settle any action, suit, or proceeding or dispute in
connection with this Agreement and the parties submit themselves to the exclusive
jurisdiction of the Courts of South Africa.
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
Page 10 of 11
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:
CITY OF TSHWANE METROPOLITAN
MUNICIPALITY
________________________________
Signatory:
Capacity:
Authority:
SIGNED at
on
2014
For:
OPERATIONS SUBCONTRACTOR
________________________________
Signatory:
Capacity:
Authority:
City of Tshwane
New Municipal Headquarters Project
Schedule 9 [Collateral Agreements]
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February 2014