o
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Title of each class
Ordinary Shares, NIS 0.20 nominal value
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Name of each exchange on which registered
NASDAQ Global Select Market
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
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x
U.S. GAAP
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o
International Financial Reporting Standards
as issued by the International Accounting
Standards Board
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o
Other
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1
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1
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1
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1
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A.
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Selected Consolidated Financial Data
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1
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B.
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Capitalization and Indebtedness
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2
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C.
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Reasons for the Offer and Use of Proceeds
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2
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D.
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Risk Factors
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2
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22 | ||
A.
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History and Development of the Company
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22
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B.
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Business Overview
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23
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C.
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Organizational Structure
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40 |
D.
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Property, Plants and Equipment
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40 |
40
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||
40
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||
A.
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Operating Results
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40
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B.
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Liquidity and Capital Resources
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57
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C.
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Research and Development
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59
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D.
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Trend Information
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60
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E.
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Off-Balance Sheet Arrangements
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61
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F.
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Tabular Disclosure of Contractual Obligations
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61
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62
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A.
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Directors and Senior Management
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62
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B.
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Compensation of Directors and Officers
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66
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C.
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Board Practices
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68
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D.
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Employees
|
76
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E.
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Share Ownership
|
77
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79
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||
A.
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Major Shareholders
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79
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B.
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Related Party Transactions.
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81
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C.
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Interests of Experts and Counsel.
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81
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81
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82
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A.
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Offer and Listing Details
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82
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B.
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Plan of Distribution
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83
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C.
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Markets
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83
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D.
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Selling Shareholders
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83
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E.
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Dilution
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83
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F.
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Expense of the Issue
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83
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83
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A.
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Share Capital
|
83
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B.
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Memorandum and Articles of Association
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83
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C.
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Material Contracts
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88
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D.
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Exchange Controls
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89
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E.
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Taxation
|
89
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F.
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Dividend and Paying Agents
|
96
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G.
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Statement by Experts
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96
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H.
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Documents on Display
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96
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I.
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Subsidiary Information
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97
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97
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98
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98
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98
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98
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99
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100
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100
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100
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100
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101
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101
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101
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101
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101
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101
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101
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101
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102
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103
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ITEM
1:
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IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
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Not Applicable.
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ITEM
2:
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OFFER STATISTICS AND EXPECTED TIMETABLE
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Not Applicable.
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ITEM
3:
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KEY INFORMATION
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A.
|
Selected Consolidated Financial Data
|
2015
|
2014
|
2013
|
2012
|
2011
|
||||||||||||||||
U.S. dollars in thousands, except for share data
|
||||||||||||||||||||
Revenues:
|
||||||||||||||||||||
Products
|
128,970 | 157,531 | 133,554 | 155,691 | 174,313 | |||||||||||||||
Services
|
68,573 | 77,602 | 101,312 | 115,875 | 71,018 | |||||||||||||||
Total
|
197,543 | 235,133 | 234,866 | 271,566 | 245,331 | |||||||||||||||
Cost of revenues:
|
||||||||||||||||||||
Products
|
94,683 | 106,905 | 86,304 | 96,805 | 93,989 | |||||||||||||||
Services
|
48,635 | 44,593 | 68,906 | 76,832 | 48,409 | |||||||||||||||
Impairment of long lived assets
|
10,137 | - | - | - | - | |||||||||||||||
Total Cost of revenues
|
153,455 | 151,498 | 155,210 | 173,637 | 142,398 | |||||||||||||||
Gross profit
|
44,088 | 83,635 | 79,656 | 97,929 | 102,933 | |||||||||||||||
Operating expenses:
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||||||||||||||||||||
Research and development, net
|
22,412 | 25,158 | 27,900 | 29,241 | 31,701 | |||||||||||||||
Selling and marketing
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24,823 | 32,537 | 32,214 | 34,988 | 35,370 | |||||||||||||||
General and administrative
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18,644 | 20,903 | 23,071 | 23,618 | 24,738 | |||||||||||||||
Restructuring costs
|
1,508 | - | 564 | 315 | 398 | |||||||||||||||
Goodwill impairment
|
20,402 | - | - | 31,879 | 17,846 | |||||||||||||||
Total Operating expenses
|
87,789 | 78,598 | 83,749 | 120,041 | 110,053 | |||||||||||||||
Operating income (loss)
|
(43,701 | ) | 5,037 | (4,093 | ) | (22,112 | ) | (7,120 | ) | |||||||||||
Financial expenses, net
|
(7,243 | ) | (3,837 | ) | (6,239 | ) | (3,432 | ) | (3,235 | ) | ||||||||||
Other income
|
- | - | - | 2,729 | 8,074 | |||||||||||||||
Income (loss) before taxes on income
|
(50,944 | ) | 1,200 | (10,332 | ) | (22,815 | ) | (2,281 | ) | |||||||||||
Taxes on income (tax benefit)
|
1,190 | 1,901 | (755 | ) | (1,893 | ) | (430 | ) | ||||||||||||
Loss from continuing operations
|
(52,134 | ) | (701 | ) | (9,577 | ) | (20,922 | ) | (1,851 | ) | ||||||||||
Loss from discontinued operations
|
(200 | ) | (795 | ) | (8,320 | ) | (2,270 | ) | (3,999 | ) | ||||||||||
Loss
|
(52,334 | ) | (1,496 | ) | (17,897 | ) | (23,192 | ) | (5,850 | ) | ||||||||||
Loss per share (basic and diluted) from continuing operations
|
(1.19 | ) | (0.02 | ) | (0.23 | ) | (0.51 | ) | (0.04 | ) | ||||||||||
Loss per share (basic and diluted) from discontinued operations
|
(0.00 | ) | (0.02 | ) | (0.20 | ) | (0.05 | ) | (0.10 | ) | ||||||||||
Loss per share (basic and diluted)
|
(1.19 | ) | (0.04 | ) | (0.43 | ) | (0.56 | ) | (0.14 | ) |
B.
|
Capitalization and Indebtedness
|
C.
|
Reasons for the Offer and Use of Proceeds
|
D.
|
Risk Factors
|
|
·
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issuance of equity securities as consideration for acquisitions that would dilute our current shareholders’ percentages of ownership;
|
|
·
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significant acquisition costs;
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·
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decrease of our cash balance;
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·
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the incurrence of debt and contingent liabilities;
|
|
·
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difficulties in the assimilation and integration of operations, personnel, technologies, products and information systems of the acquired companies;
|
|
·
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diversion of management’s attention from other business concerns;
|
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·
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contractual disputes;
|
|
·
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risks of entering geographic and business markets in which we have no or only limited prior experience;
|
|
·
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potential loss of key employees of acquired organizations.
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·
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the possibility that business cultures will not be compatible;
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|
·
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the difficulty of incorporating acquired technology and rights into our products and services;
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·
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unanticipated expenses related to integration of the acquired companies;
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·
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difficulties in implementing and maintaining uniform standards, controls and policies;
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|
·
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dissatisfaction of our customers with our products and/or the services we provide or our inability to provide or install additional products or requested new applications on a timely basis;
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|
·
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customers’ default on payments due;
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·
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our failure to comply with financial covenants in our contracts;
|
|
·
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the cancellation of the underlying project by the sponsoring government body; or
|
|
·
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the loss of existing contracts or a decrease in the number of renewals of orders or a decrease in the number of new large orders.
|
|
·
|
our reputation or relationship with government agencies is impaired;
|
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·
|
we are suspended or otherwise prohibited from contracting with a domestic or foreign government or any significant law enforcement agency;
|
|
·
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levels of government expenditures and authorizations for law enforcement and security related programs decrease or shift to program in areas where we do not provide products and services;
|
|
·
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we are prevented from entering into new government contracts or extending existing government contracts based on violations or suspected violations of laws or regulations, including those related to procurement;
|
|
·
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we are not granted security clearances that are required to sell our products to domestic or foreign governments or such security clearances are deactivated;
|
|
·
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there is a change in government procurement procedures or conditions of remuneration; or
|
|
·
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there is a change in the political climate that adversely affects our existing or prospective relationships.
|
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·
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adverse changes in the public and private equity and debt markets and our ability, as well as the ability of our customers and suppliers, to obtain financing or to fund working capital and capital expenditures;
|
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·
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adverse changes in the credit ratings of our customers and suppliers;
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·
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adverse changes in the market conditions in our industry and the specific markets for our products;
|
|
·
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access to, and the actual size and timing of, capital expenditures by our customers;
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·
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inventory practices, including the timing of product and service deployment, of our customers;
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·
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the amount of network capacity and the network capacity utilization rates of our customers, and the amount of sharing and/or acquisition of new and/or existing network capacity by our customers;
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|
·
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the overall trend toward industry consolidation and rationalization among our customers, competitors, and suppliers;
|
|
·
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price reductions by our direct competitors and by competing technologies including, for example, the introduction of HTS satellite systems by our direct competitors which could significantly drive down market prices or limit the availability of satellite capacity for use with our VSAT systems;
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|
·
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conditions in the broader market for communications products, including data networking products and computerized information access equipment and services;
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|
·
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governmental regulation or intervention affecting communications or data networking;
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|
·
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monetary instability in the countries where we operate; and
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|
·
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the effects of war and acts of terrorism, such as disruptions in general global economic activity, changes in logistics and security arrangements, and reduced customer demand for our products and services.
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|
·
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imposition of governmental controls, regulations and taxation which might include a government’s decision to raise import tariffs or license fees in countries in which we do business;
|
|
·
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government regulations that may prevent us from choosing our business partners or restrict our activities;
|
|
·
|
the U.S. Foreign Corrupt Practices Act, or the FCPA, and applicable anti-corruption laws in other jurisdictions, which include anti-bribery provisions. Our policies mandate compliance with these laws. Nevertheless, we may not always be protected in cases of violation of the FCPA or other applicable anti-corruption laws by our employees or third-parties acting on our behalf. A violation of anti-corruption laws by our employees or third-parties during the performance of their obligations for us may have a material adverse effect on our reputation, operating results and financial condition;
|
|
·
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tax exposures in various jurisdictions relating to our activities throughout the world;
|
|
·
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political and/or economic instability in countries in which we do or desire to do business. Such unexpected changes could have an adverse effect on the gross margin of some of our projects. This includes similar risks from potential or current political and economic instability as well as volatility of foreign currencies in countries such as Colombia, Brazil, Venezuela and certain countries in East Asia;
|
|
·
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difficulties in staffing and managing foreign operations that might mandate employing staff in various countries to manage foreign operations. This requirement could have an adverse effect on the profitability of certain projects;
|
|
·
|
longer payment cycles and difficulties in collecting accounts receivable;
|
|
·
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foreign exchange risks due to fluctuations in local currencies relative to the dollar; and
|
|
·
|
relevant zoning ordinances that may restrict the installation of satellite antennas and might also reduce market demand for our service. Additionally, authorities may increase regulation regarding the potential radiation hazard posed by transmitting earth station satellite antennas’ emissions of radio frequency energy that may negatively impact our business plan and revenues.
|
|
·
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A significant portion of our expenses, principally salaries and related personnel expenses, are incurred in NIS, and to a lesser extent, other non-U.S. dollar currencies, whereas the currency we use to report our financial results is the U.S. dollar and a significant portion of our revenue is generated in U.S. dollars. A significant strengthening of the NIS against the U.S. dollar can considerably increase the U.S. dollar value of our expenses in Israel and our results of operations may be adversely affected;
|
|
·
|
A portion of our international sales is denominated in currencies other than the U.S. dollar, including the Colombian Peso, Australian Dollar, Brazilian Real, Peruvian Sol, Russian Ruble and the Mexican Peso, therefore we are exposed to the risk of devaluation of such currencies relative to the dollar which could have a negative impact on our revenues;
|
|
·
|
We have assets and liabilities that are denominated in non-U.S. dollar currencies. Therefore, significant fluctuation in these other currencies could have significant effect on our results; and
|
|
·
|
A portion of our U.S. dollar revenues are derived from customers operating in local currencies which are different from the U.S. dollar. Therefore, devaluation in the local currencies of our customers relative to the U.S. dollar could cause our customers to cancel or decrease orders or delay payment.
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|
·
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the timing, size and composition of requests for proposals or orders from customers;
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·
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the timing of introducing new products and product enhancements by us and the level of their market acceptance;
|
|
·
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the mix of products and services we offer; and
|
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·
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the changes in the competitive environment in which we operate.
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·
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economic instability;
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·
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announcements of technological innovations;
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·
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customer orders or new products or contracts;
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|
·
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competitors’ positions in the market;
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·
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changes in financial estimates by securities analysts;
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|
·
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conditions and trends in the VSAT and other technology industries relevant to our businesses;
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·
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our earnings releases and the earnings releases of our competitors; and
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|
·
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the general state of the securities markets (with particular emphasis on the technology and Israeli sectors thereof).
|
A.
|
History and Development of the Company
|
B.
|
Business Overview
|
|
·
|
Communications satellite – Typically a satellite in geostationary orbit (synchronized with the earth’s orbit) with a fixed coverage of a portion of the earth (up to approximately one third).
|
|
·
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Satellite communications ground station equipment – These are devices that have a combination of datacom and RF (Radio Frequency) elements designed to deliver data via communication satellites. Examples of ground station equipment are remote site terminals, such as VSATs, and central hub station systems. We are a leading provider of VSAT ground station equipment. Ground station equipment is typically comprised of the following elements: modem, amplifiers, BUCs and antennas.
|
|
·
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Modem – This is the device that modulates the digital data into an analog RF signal for delivery to the upconverter, and demodulates the analog signals from the downconverter back into digital data. The modem, which is typically located indoors, performs data processing functions such as traffic management and prioritization and provides the digital interfaces (Ethernet port/s) for connecting to the user’s equipment (PC, switch, etc.).
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|
·
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Amplifiers and BUCs – These are the components that connect the ground station equipment with the antenna. The purpose of the amplifiers and BUCs is to amplify the power and convert the frequency of the transmitted RF signal. Wavestream is a leading provider of high power SSPAs and BUCs.
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·
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Antenna – Antennas can vary quite significantly in size, power and complexity depending on the ground equipment they are connected to, and their application. For example, antennas connected to remote sites generally are in the range of one meter in diameter while those connected to the central hub system can be in the range of ten meters in diameter. Antennas used on moving vehicles need to be compact and have an auto-pointing mechanism so that they can remain locked onto the satellite during motion. We are a leading provider of low-profile in-motion satellite antennas.
|
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·
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Universal availability
- VSATs provide service to any location within a satellite footprint.
|
|
·
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Timely implementation -
Large VSAT networks with thousands of remote sites can be deployed within a few weeks.
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·
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Broadcast and multicast capabilities
- Satellite is an optimal solution for broadcast and multicast transmission as the satellite signal is simultaneously received by any group of users in the satellite footprint.
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·
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Reliability and service availability
- VSAT network availability is high due to the satellite and ground equipment reliability, the small number of components in the network and terrestrial infrastructure independence.
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·
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Scalability
- VSAT networks scale easily from a single site to thousands of locations.
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|
·
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Cost-effectiveness
- The cost of VSAT networks is independent of distance and therefore it is a cost-effective solution for networks comprised of multiple sites in remote locations.
|
|
·
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Applications delivery
– VSAT networks offer a wide variety of customer applications such as e-mail, virtual private networks, video, voice, Internet access, distance learning, cellular backhaul and financial transactions.
|
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·
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Portability and Mobility
- VSAT solutions can be mounted on vehicles for communications on the move, or deployed rapidly for communications in fixed locations and then relocated or moved as required.
|
|
·
|
SkyEdge II-c Gemini
is a family of compact high-throughput routers, designed to enable high speed broadband services while meeting cost efficiencies required by residential customers and businesses. Gemini enables fast web browsing, video streaming, IPTV, VoIP, and other bandwidth intensive services. This solution comes in variations for enterprise applications such as retail, banking, automatic teller machines, or ATMs, lotteries and USO/USF government-funded programs aimed to expand broadband connectivity to underserved regions
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|
·
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SkyEdge II-c Libra
empowers mobile operators, ISPs and Direct to Home, or DTH service providers by combining satellite and cellular technologies. This hybrid terminal provides a low-cost solution for underserved areas where existing mobile network infrastructure or DSL cannot provide reliable high-speed broadband Internet. Libra offers satellite download speeds as fast as 20 Mbps. Meanwhile, upload traffic remains within the customer’s existing network, even if speeds of only a few Kbps are available. Libra enables MNOs and DTH providers to leverage their existing infrastructure to provide broadband service to the home.
|
|
·
|
SkyEdge II-c Capricorn
is the latest addition to the SkyEdge II-c family of high-performance satellite routers. Capricorn has been designed to deliver ultra-high-speed broadband services while satisfying the need for cost efficiencies. Capricorn is a full-featured IP router, supporting Ku/Ka/C bands with throughput of up to 200Mbps and patent pending acceleration techniques. It is suitable for high performance and high bandwidth-hungry applications such as ultra-fast web browsing, video streaming, IPTV, VoIP, cellular backhauling, and IP trunks. Capricorn comes in various versions including a telco-grade rack-mounted version and an outdoor version.
|
|
·
|
SkyEdge II-c Taurus
will manage the entire in-flight Satcom connectivity
with simultaneous support for broadband IFC and IPTV and will be a key component of our Ku/Ka aeronautical Satcom solution, as Gilat's ultra-high-performance aero-modem manager (MODMAN) for in-flight connectivity.
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|
·
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Project management – accompanying the customer through all stages of a project and ensuring that the project objectives are within the predefined scope, time and budget;
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·
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Satellite network design – translating the customer’s requirements into a system to be deployed, performing the sizing and dimensioning of the system and evaluating the available solutions;
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·
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Deployment logistics – transportation and rapid installation of equipment in all of the network sites;
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·
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Implementation and integration – combining our equipment with third party equipment such as solar panel systems and surveillance systems as well as developing tools to allow the customer to monitor and control the system;
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·
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Operational services – providing professional services, program management, network operations and field services; and
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|
·
|
Maintenance and support – providing 24/7 helpdesk services, on-site technician support and equipment repairs and updates.
|
|
·
|
Outsourced operations such as VSAT installation, service commissioning and hub operations;
|
|
·
|
Proactive troubleshooting, such as periodic network analysis, to identify symptoms in advance; and
|
|
·
|
Training and certification to ensure customers and local installers are proficient in VSAT operation.
|
•
|
a single accountable partner for all of their Satcom network needs;
|
•
|
high credibility and experience;
|
•
|
local presence and partnerships;
|
•
|
industry-leading technology and system integration;
|
•
|
flexibility and customization; and
|
•
|
proven ability to deliver innovative end-to-end solutions.
|
|
•
|
Military - strategic military advantage by supporting the transfer of real-time intelligence while on-the-move with a small, low profile, hard to track antenna;
|
|
•
|
Digital satellite news gathering – always on, no set up time, real-time streaming video;
|
|
•
|
First responders - supports vehicles’ mobility, agility and stability required for teams to be the first to reach the scene; and
|
|
•
|
Search and exploration teams, close-to-shore vessels etc.
|
|
·
|
RaySat SR300
(X, Ka, Ku) antennas feature an advanced flat-panel array which covers both the Rx and Tx. Minimal size, weight and power (SWaP) permit installation on small vehicles or marine vessels. The antenna’s light weight ensures easy and safe mounting for quick and easy operation by non-technical personnel.
|
|
·
|
RaySat ER5000
(Ka, Ku) has a sturdy structure and compact size allowing for implementation on a wide range of vehicles. ER5000 antennas maximize throughput using high-efficiency waveguide panel technology. The low profile, ruggedized two-way antenna system enables real-time Ka- and Ku-band satellite communications for video, voice and data transfer.
|
|
·
|
RaySat ER7000
maximizes throughput using high-efficiency waveguide panel technology and the antenna’s light weight ensures easy and safe vehicle mounting. It has been widely deployed worldwide on trains and large vehicles.
|
|
·
|
RaySat ER6000
will be a high capacity versatile dual-band airborne satellite two-way antenna for IFC that is capable of being switched between Ka and Ku bands during flight, and can operate in either band as required. This solution will enable aeronautical real-time broadband satellite communications for video, voice and data. The antenna is designed to maximize throughput by using high-efficiency waveguide panel technology. Its low profile and light weight will permit easy and safe mounting on aircraft. The rugged antenna structure will be particularly suited for operation in challenging environments, providing reliable, continuous, in-flight broadband communications.
|
|
·
|
Electronically-Steered-Array, Phased-Array Antenna (ESA/PAA)
is an ultra-slim (low-profile) antenna with no moving parts that will electronically steer the transmission and reception beams towards the satellite, allowing operation even around the equator. The antenna design will be highly scalable, with array dimensions that can be changed to optimally match specific gain requirements, making it suitable for a wide range of mobile platforms (aerial, land and maritime) and various throughput performance needs. Owing to its scalability and ultra-low profile, the antenna will be particularly suited to supporting SOTM connectivity for platforms that are constrained by size and weight.
|
|
·
|
Defense Communications - satellite-based airborne and highly secured point-to-point. This market is typically categorized by customers requiring high quality products – at times for mission critical communications in extreme environmental conditions. The satellite terminals (
e.g
., VSAT, Single Channel Per Carrier, or SCPC) are usually provided to the defense agencies via system integrators, and not directly from the power amplifier suppliers;
|
|
·
|
Government - public safety, emergency response and disaster recovery. Similar to the market for defense agencies, though usually less demanding in terms of environmental conditions, these terminals are provided to various local, state and federal agencies that need to manage emergency communications. The satellite terminals (e.g., VSAT, SCPC) are usually provided via system integrators or service providers and not directly from the power amplifier suppliers;
|
|
·
|
Commercial terminals - A high power amplifier is used with high-end VSAT terminals for various applications where there is the requirement to transmit large amounts of data. Examples include airborne terminals in commercial airplanes for Internet access;
|
|
·
|
Commercial broadcast - Broadcast providers and teleport operators require high power amplifiers in order to transmit large carriers, such as for TV broadcast, multicast of video and high-speed IP connectivity.
|
|
·
|
Manpack Solution
|
|
·
|
Unmanned Aircraft Systems (UAS) and Unmanned Surface Vehicles (USV) Solutions
|
|
o
|
Unmanned Aircraft Systems (UAS)
|
|
o
|
Unmanned Surface Vehicles( USVs)
Our BlackRay Maritime 300 is a compact system that can be quickly implemented to deliver high-throughput communication, even for small USVs. The BlackRay Maritime 300 has been designed to meet minimal size, weight and power (SWaP) requirements, yet can transmit more than 2Mbps for any IP-based video or data BLoS application. This maritime terminal delivers spectrum-efficient IP connectivity, adaptive in real time to varying link conditions.
|
Years Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Latin America
|
51 | % | 47 | % | 36 | % | ||||||
Asia and Asia Pacific
|
24 | % | 22 | % | 39 | % | ||||||
North America
|
14 | % | 18 | % | 11 | % | ||||||
Europe
|
8 | % | 7 | % | 10 | % | ||||||
Africa
|
3 | % | 6 | % | 4 | % | ||||||
Total
|
100 | % | 100 | % | 100 | % |
C.
|
Organizational Structure
|
Country/State
|
||||
Significant Subsidiaries
|
of Incorporation
|
% ownership
|
||
1. Gilat Satellite Networks (Holland) B.V.
|
Netherlands
|
100%
|
||
2. Gilat Colombia S.A. E.S.P
|
Colombia
|
100%
|
||
3. Gilat to Home Peru S.A
|
Peru
|
100%
|
||
4. Gilat do Brazil Ltda.
|
Brazil
|
100%
|
||
5. Gilat Satellite Networks (Mexico) S.A. de C.V.
|
Mexico
|
100%
|
||
6. Wavestream Corporation
|
Delaware
|
100%
|
||
7. Gilat Networks Peru S.A
|
Peru
|
100%
|
||
8. Gilat Australia Pty Ltd.
|
Australia
|
100%
|
||
9.
Gilat Satellite Networks (Eurasia) Limited
|
Russia
|
100%
|
||
10. Gilat Satellite Networks MDC (Moldova)
|
Moldova
|
100%
|
||
11. Raysat Bulgaria EOOD
|
Bulgaria
|
100%
|
||
12. Gilat Satellite Communication Technology (Beijing) Ltd.
|
China
|
100%
|
ITEM 4A
:
|
UNRESOLVED STAFF COMMENTS
|
ITEM
5:
|
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|
A.
|
Operating Results
|
|
·
|
Commercial Division
-
provides VSAT networks, satellite communication products, small cell solutions and associated professional services and comprehensive turnkey solutions. Our customers include service providers, satellite operators, MNOs, Telcos, and large enterprises worldwide. We are focusing on HTS initiatives worldwide and are driving meaningful partnerships with satellite operators to leverage our technology and breadth of services to deploy and operate the ground segment
.
|
|
·
|
Mobility Division
- provides on-the-Move/on-the-Pause satellite communication products and solutions to IFC service providers, system integrators, defense and homeland security organizations, as well as to other commercial entities worldwide. The division provides solutions on land, sea and air, while placing major focus on the high-growth commercial IFC market, with its unique leading technology. In addition, the division includes the operations of Wavestream, whose sales are primarily to IFC integrators as well as defense integrators.
|
|
·
|
Services Division
– provides managed network and services for rural broadband access via its subsidiaries in Peru and Colombia. Our connectivity solutions have been implemented in large and national scale projects. Our terrestrial and satellite networks provide Internet and telephony services to thousands of rural communities and schools worldwide. Our turnkey solutions start with supplying network infrastructure, continue through ensuring high-quality, reliable connectivity and include full network support and maintenance, as well as support for applications that run on the installed network.
|
Year Ended
|
Year Ended
|
|||||||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||||||
2015
|
2014
|
Percentage
|
2015
|
2014
|
||||||||||||||||
U.S. dollars in thousands
|
change
|
Percentage of revenues
|
||||||||||||||||||
Commercial
|
||||||||||||||||||||
Products
|
65,666 | 82,488 | (20.4 | )% | 33.2 | % | 35.1 | % | ||||||||||||
Services
|
35,269 | 47,818 | (26.2 | )% | 17.9 | % | 20.3 | % | ||||||||||||
100,935 | 130,306 | (22.5 | )% | 51.1 | % | 55.4 | % | |||||||||||||
Mobility
|
||||||||||||||||||||
Products
|
38,746 | 51,318 | (24.5 | )% | 19.6 | % | 21.8 | % | ||||||||||||
Services
|
2,366 | 3,499 | (32.4 | )% | 1.2 | % | 1.5 | % | ||||||||||||
41,112 | 54,817 | (25.0 | )% | 20.8 | % | 23.3 | % | |||||||||||||
Services
|
||||||||||||||||||||
Products
|
24,558 | 23,725 | 3.5 | % | 12.4 | % | 10.1 | % | ||||||||||||
Services
|
30,938 | 26,285 | 17.7 | % | 15.7 | % | 11.2 | % | ||||||||||||
55,496 | 50,010 | 11.0 | % | 28.1 | % | 21.3 | % | |||||||||||||
Total
|
||||||||||||||||||||
Products
|
128,970 | 157,531 | (18.1 | )% | 65.3 | % | 67.0 | % | ||||||||||||
Services
|
68,573 | 77,602 | (11.6 | )% | 34.7 | % | 33.0 | % | ||||||||||||
Total
|
197,543 | 235,133 | (16.0 | )% | 100.0 | % | 100.0 | % |
Year Ended
|
Year Ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
U.S. dollars in thousands
|
Percentage of revenues per division
|
|||||||||||||||
Commercial
|
||||||||||||||||
Products
|
17,943 | 25,184 | 27.3 | % | 30.5 | % | ||||||||||
Services
|
19,567 | 27,535 | 55.5 | % | 57.6 | % | ||||||||||
37,510 | 52,719 | 37.2 | % | 40.5 | % | |||||||||||
Mobility
|
||||||||||||||||
Products
|
9,443 | 15,688 | 24.4 | % | 30.6 | % | ||||||||||
Services
|
954 | 2,106 | 40.3 | % | 60.2 | % | ||||||||||
10,397 | 17,794 | 25.3 | % | 32.5 | % | |||||||||||
Services
|
||||||||||||||||
Products
|
6,901 | 9,756 | 28.1 | % | 41.1 | % | ||||||||||
Services
|
(583 | ) | 3,366 | (1.9 | )% | 12.8 | % | |||||||||
Impairment of long lived assets
|
(10,137 | ) | - | (18.3 | )% | - | ||||||||||
(3,819 | ) | 13,122 | (6.9 | )% | 26.2 | % | ||||||||||
Total
|
||||||||||||||||
Products
|
34,287 | 50,628 | 26.6 | % | 32.1 | % | ||||||||||
Services
|
19,938 | 33,007 | 29.1 | % | 42.5 | % | ||||||||||
Impairment of long lived assets
|
(10,137 | ) | - | (5.1 | )% | - | ||||||||||
Total
|
44,088 | 83,635 | 22.3 | % | 35.6 | % |
Year Ended
|
Year Ended
|
|||||||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||||||
2015
|
2014
|
Percentage
|
2015
|
2014
|
||||||||||||||||
U.S. dollars in thousands
|
change
|
Percentage of revenues per division
|
||||||||||||||||||
Commercial
|
||||||||||||||||||||
Expenses incurred
|
16,698 | 19,099 | (12.6 | )% | 16.5 | % | 14.7 | % | ||||||||||||
Less - grants
|
2,523 | 2,015 | 25.2 | % | 2.5 | % | 1.5 | % | ||||||||||||
14,175 | 17,084 | (17.0 | )% | 14.0 | % | 13.1 | % | |||||||||||||
Mobility
|
||||||||||||||||||||
Expenses incurred
|
8,254 | 8,536 | (3.3 | )% | 20.1 | % | 15.6 | % | ||||||||||||
Less - grants
|
17 | 462 | (96.3 | )% | 0.0 | % | 0.8 | % | ||||||||||||
8,237 | 8,074 | 2.0 | % | 20.0 | % | 14.7 | % | |||||||||||||
Total, net (*)
|
22,412 | 25,158 | (10.9 | )% | 15.8 | % | 13.6 | % |
Year Ended
|
Year Ended
|
|||||||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||||||
2015
|
2014
|
Percentage
|
2015
|
2014
|
||||||||||||||||
U.S. dollars in thousands
|
change
|
Percentage of revenues per division
|
||||||||||||||||||
Commercial
|
16,839 | 23,401 | (28.0 | )% | 16.7 | % | 18.0 | % | ||||||||||||
Mobility
|
6,947 | 7,809 | (11.0 | )% | 16.9 | % | 14.2 | % | ||||||||||||
Services
|
1,037 | 1,327 | (21.9 | )% | 1.9 | % | 2.7 | % | ||||||||||||
Total
|
24,823 | 32,537 | (23.7 | )% | 12.6 | % | 13.8 | % |
Year Ended
|
Year Ended
|
|||||||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||||||
2015
|
2014
|
Percentage
|
2015
|
2014
|
||||||||||||||||
U.S. dollars in thousands
|
change
|
Percentage of revenues per division
|
||||||||||||||||||
Commercial
|
6,622 | 7,808 | (15.2 | )% | 6.6 | % | 6.0 | % | ||||||||||||
Mobility
|
6,271 | 5,961 | 5.2 | % | 15.3 | % | 10.9 | % | ||||||||||||
Services
|
5,751 | 7,134 | (19.4 | )% | 10.4 | % | 14.3 | % | ||||||||||||
Total
|
18,644 | 20,903 | (10.8 | )% | 9.4 | % | 8.9 | % |
Year Ended
|
Year Ended
|
|||||||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||||||
2014
|
2013
|
Percentage
|
2014
|
2013
|
||||||||||||||||
U.S. dollars in thousands
|
change
|
Percentage of revenues
|
||||||||||||||||||
Commercial
|
||||||||||||||||||||
Products
|
82,488 | 85,405 | (3.4 | )% | 35.1 | % | 36.4 | % | ||||||||||||
Services
|
47,818 | 56,171 | (14.9 | )% | 20.3 | % | 23.9 | % | ||||||||||||
130,306 | 141,576 | (8.0 | )% | 55.4 | % | 60.3 | % | |||||||||||||
Mobility
|
||||||||||||||||||||
Products
|
51,318 | 41,893 | 22.5 | % | 21.8 | % | 17.8 | % | ||||||||||||
Services
|
3,499 | 6,318 | (44.6 | )% | 1.5 | % | 2.7 | % | ||||||||||||
54,817 | 48,211 | 13.7 | % | 23.3 | % | 20.5 | % | |||||||||||||
Services
|
||||||||||||||||||||
Products
|
23,725 | 6,256 | 279.2 | % | 10.1 | % | 2.7 | % | ||||||||||||
Services
|
26,285 | 38,823 | (32.3 | )% | 11.2 | % | 16.5 | % | ||||||||||||
50,010 | 45,079 | 10.9 | % | 21.3 | % | 19.2 | % | |||||||||||||
Total
|
||||||||||||||||||||
Products
|
157,531 | 133,554 | 18.0 | % | 67.0 | % | 56.9 | % | ||||||||||||
Services
|
77,602 | 101,312 | (23.4 | )% | 33.0 | % | 43.1 | % | ||||||||||||
Total
|
235,133 | 234,866 | 0.1 | % | 100.0 | % | 100.0 | % |
Year Ended
|
Year Ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
U.S. dollars in thousands
|
Percentage of revenues per division
|
|||||||||||||||
Commercial
|
||||||||||||||||
Products
|
25,184 | 30,340 | 30.5 | % | 35.5 | % | ||||||||||
Services
|
27,535 | 16,270 | 57.6 | % | 29.0 | % | ||||||||||
52,719 | 46,610 | 40.5 | % | 32.9 | % | |||||||||||
Mobility
|
||||||||||||||||
Products
|
15,688 | 9,383 | 30.6 | % | 22.4 | % | ||||||||||
Services
|
2,106 | 5,055 | 60.2 | % | 80.0 | % | ||||||||||
17,794 | 14,438 | 32.5 | % | 29.9 | % | |||||||||||
Services
|
||||||||||||||||
Products
|
9,756 | 7,527 | 41.1 | % | 120.3 | % | ||||||||||
Services
|
3,366 | 11,081 | 12.8 | % | 28.5 | % | ||||||||||
13,122 | 18,608 | 26.2 | % | 41.3 | % | |||||||||||
Total
|
||||||||||||||||
Products
|
50,628 | 47,250 | 32.1 | % | 35.4 | % | ||||||||||
Services
|
33,007 | 32,406 | 42.5 | % | 32.0 | % | ||||||||||
Total
|
83,635 | 79,656 | 35.6 | % | 33.9 | % |
Year Ended
|
Year Ended
|
|||||||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||||||
2014
|
2013
|
Percentage
|
2014
|
2013
|
||||||||||||||||
U.S. dollars in thousands
|
change
|
Percentage of revenues per division
|
||||||||||||||||||
Commercial
|
||||||||||||||||||||
Expenses incurred
|
19,099 | 18,403 | 3.8 | % | 14.7 | % | 13.0 | % | ||||||||||||
Less - grants
|
2,015 | 1,203 | 67.5 | % | 1.5 | % | 0.8 | % | ||||||||||||
17,084 | 17,200 | (0.7 | )% | 13.1 | % | 12.2 | % | |||||||||||||
Mobility
|
||||||||||||||||||||
Expenses incurred
|
8,536 | 11,088 | (23 | )% | 15.6 | % | 23.0 | % | ||||||||||||
Less - grants
|
462 | 388 | 19 | % | 0.8 | % | 0.8 | % | ||||||||||||
8,074 | 10,700 | (24.5 | )% | 14.7 | % | 22.2 | % | |||||||||||||
Total, net (*)
|
25,158 | 27,900 | (9.8 | )% | 13.6 | % | 14.7 | % |
Year Ended
|
Year Ended
|
|||||||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||||||
2014
|
2013
|
Percentage
|
2014
|
2013
|
||||||||||||||||
U.S. dollars in thousands
|
change
|
Percentage of revenues per division
|
||||||||||||||||||
Commercial
|
23,401 | 22,759 | 2.8 | % | 18.0 | % | 16.1 | % | ||||||||||||
Mobility
|
7,809 | 8,139 | (4.1 | )% | 14.2 | % | 16.9 | % | ||||||||||||
Services
|
1,327 | 1,316 | 0.8 | % | 2.7 | % | 2.9 | % | ||||||||||||
Total
|
32,537 | 32,214 | 1 | % | 13.8 | % | 13.7 | % |
Year Ended
|
Year Ended
|
|||||||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||||||
2014
|
2013
|
Percentage
|
2014
|
2013
|
||||||||||||||||
U.S. dollars in thousands
|
change
|
Percentage of revenues per division
|
||||||||||||||||||
Commercial
|
7,808 | 9,973 | (21.7 | )% | 6.0 | % | 7.0 | % | ||||||||||||
Mobility
|
5,961 | 7,744 | (23.0 | )% | 10.9 | % | 16.1 | % | ||||||||||||
Services
|
7,134 | 5,354 | 33.2 | % | 14.3 | % | 11.9 | % | ||||||||||||
Total
|
20,903 | 23,071 | (9.4 | )% | 8.9 | % | 9.8 | % |
B.
|
Liquidity and Capital Resources
|
Years Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
U.S. Dollars
in thousands
|
||||||||||||
Net cash provided by (used in) continuing operating activities
|
(14,787 | ) | (16,162 | ) | 16,397 | |||||||
Net cash provided by (used in) continuing investing activities
|
12,340 | (26,753 | ) | (30,908 | ) | |||||||
Net cash provided by (used in) continuing financing activities
|
(5,867 | ) | 12,389 | (16,387 | ) | |||||||
Net cash used in discontinued operating activities
|
- | - | (5,996 | ) | ||||||||
Net cash provided by discontinued investing activities
|
- | - | 15,791 | |||||||||
Net cash provided by discontinued financing activities
|
- | - | 12,884 | |||||||||
Total cash flows from discontinued operations
|
- | - | 22,679 | |||||||||
Effect of exchange rate changes on cash and cash equivalents
|
(977 | ) | (172 | ) | (325 | ) | ||||||
Net decrease in cash and cash equivalents
|
(9,291 | ) | (30,698 | ) | (8,544 | ) | ||||||
Cash and cash equivalents at beginning of the period
|
27,726 | 58,424 | 66,968 | |||||||||
Cash and cash equivalents at end of the period
|
18,435 | 27,726 | 58,424 |
C.
|
Research and Development
|
Years Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
(U.S. dollars in thousands)
|
||||||||||||
Gross research and development costs
|
24,952 | 27,635 | 29,491 | |||||||||
Less:
|
||||||||||||
Grants
|
2,540 | 2,477 | 1,591 | |||||||||
Research and development costs - net
|
22,412 | 25,158 | 27,900 |
D.
|
Trend Information
|
E.
|
Off-Balance Sheet Arrangements
|
F.
|
Tabular Disclosure of Contractual Obligations
|
Contractual Obligations
|
Payments due by period (in U.S. dollars in thousands)
|
|||||||||||||||||||
Total
|
2016
|
2017-2018 | 2019-2020 | 2021 | ||||||||||||||||
Long-term loans *
|
26,035 | 4,542 | 8,965 | 8,528 | 4,000 | |||||||||||||||
Operating lease (mainly space segment)
|
20,744 | 9,799 | 10,856 | 89 | - | |||||||||||||||
Purchase commitments (mainly inventory)
|
14,213 | 14,213 | - | - | - | |||||||||||||||
Other long-term debt
|
3,915 | 884 | 3,031 | - | - | |||||||||||||||
Total contractual cash obligations
|
64,907 | 29,438 | 22,852 | 8,617 | 4,000 |
|
ITEM 6
:
|
DIRECTORS AND SENIOR MANAGEMENT
|
Name
|
Age
|
Position(s)
|
||
Dov Baharav (1)
|
65
|
Chairman of the Board of Directors and interim Chief Executive Officer
|
||
Amiram Boehm (4)
|
44
|
Director
|
||
Dafna Cohen (2)(3)(5)(6)
|
46
|
Director
|
||
Ishay Davidi
|
54
|
Director
|
||
Gilead Halevy (2)(5)
|
50
|
Director
|
||
Dr. Zvi Lieber (2)(3)(5)(6)
|
73
|
Director
|
||
Amir Ofek (4)
|
40
|
Director
|
||
Kainan Rafaeli (2)(3)(5)
|
60
|
Director
|
||
Michal Aharonov
|
44
|
Vice President, Global Accounts & Telecom Services
|
||
Nirit Barnea
|
48
|
Vice President, Human Resources
|
||
Zeev Botzer
|
56
|
Vice President, Delivery and Operations
|
||
Yona Ovadia(1)
|
57
|
Vice President, Services and Commercial Divisions
|
||
Russell Ribeiro
|
57
|
Vice President, Americas
|
||
Arieh Rohrstock
|
41
|
Vice President, Peru
|
||
Adi Sfadia
|
45
|
Chief Financial Officer
|
||
Ran Tal
|
41
|
Vice President, General Counsel
|
||
Moshe (Chico) Tamir
|
51
|
Vice President, Mobility Division
|
||
Alik Shimelmits
|
54
|
Vice President, Research & Development
|
|
(1)
|
Mr. Ovadia was appointed as Chief Executive Officer effective as of March 31, 2016.
|
|
(2)
|
Member of our Audit Committee.
|
|
(3)
|
Member of our Compensation and Stock Option Committee.
|
|
(4)
|
“Independent Director” under the applicable NASDAQ Marketplace Rules (see explanation below)
|
|
(5)
|
“Independent Director” under the applicable NASDAQ Marketplace Rules and the applicable rules of the U.S. Securities and Exchange Commission (the “SEC”) (see explanation below)
|
|
(6)
|
“External Director” as required by Israel’s Companies Law (see explanation below)
|
B.
|
Compensation of Directors and Officers
|
Salaries, Fees, Directors’ Fees,
Commissions and Bonuses(1)
|
Amounts Set Aside for Pension, Retirement and
Similar Benefits
|
|||||||
All directors and officers as a group (25 persons)(2)
|
$ | 3,475,168 | $ | 610,201 |
|
(1)
|
Includes bonuses and equity-based compensation accrued in 2015, but does not include business travel, professional and business association dues and expenses reimbursed to our directors and officers, and other benefits commonly reimbursed or paid by companies in Israel.
|
|
(2)
|
Includes seven officers that ceased to hold office during 2015 and eight officers that joined us during 2015.
|
Information Regarding the Covered Executive in US dollars
(1)
|
||||||||||||||||||||
Name and Principal Position
(2)
|
Base Salary
|
Benefits and
Perquisites
(3)
|
Variable Compensation
(4)
|
Equity-Based
Compensation
(5)
|
Total
|
|||||||||||||||
Dov Baharav,
Chairman of the Board and
interim CEO
|
272,374 | 104,876 | 140,383 | 517,633 | ||||||||||||||||
Assaf Eyal,
Former VP, Commercial Division
|
208,630 | 49,411 | 84,539 | 342,580 | ||||||||||||||||
Erez Antebi,
Former Chief Executive Officer
|
76,662 | 13,701 | 56,080 | 173,954 | 320,397 | |||||||||||||||
Moshe (Chico) Tamir,
VP, Mobility Division
|
220,325 | 42,827 | 44,928 | 308,080 | ||||||||||||||||
Gai Berkovich,
Former Chief Operating Officer
|
196,009 | 51,793 | 42,243 | 290,045 |
(1)
|
All amounts reported in the table are in terms of cost to our company, as recorded in our financial statements.
|
||||||
(2)
|
All current executive officers listed in the table are employed or provide services on a full-time basis during their employment period.
|
||||||
(3)
|
Amounts reported in this column include benefits and perquisites, including those mandated by applicable law. Such benefits and perquisites may include, to the extent applicable to each executive, payments, contributions and/or allocations for savings funds, pension, severance, vacation, car or car allowance, medical insurances and benefits, risk insurances (e.g., life, disability, accident), convalescence pay, payments for social security and other benefits and perquisites consistent with our guidelines, but do not include business travel, relocation, professional and business association dues and expenses reimbursed to our directors and officers.
|
||||||
(4)
|
Amounts reported in this column refer to Variable Compensation such as commission, incentive and bonus payments as recorded in our financial statements for the year ended December 31, 2015.
|
||||||
(5)
|
Amounts reported in this column represent the expense recorded in our financial statements for the year ended December 31, 2015, with respect to equity-based compensation granted to the Covered Executive.
|
|
·
|
the majority includes at least a majority of the shares voted by shareholders other than our controlling shareholders or shareholders who have a personal interest in the adoption of the Executive Compensation Policy; or
|
|
·
|
the total number of shares held by non-controlling shareholders and disinterested shareholders that voted against the adoption of the Executive Compensation Policy does not exceed 2% of the aggregate voting rights of our company.
|
C.
|
Board Practices
|
External Directors
and Independent Directors
|
|
·
|
such majority includes at least two-thirds of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such appointment, present and voting at such meeting; or
|
|
·
|
the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such appointment voting against such appointment does not exceed two percent of the aggregate voting rights in the company.
|
|
·
|
a breach by the office holder of his fiduciary duty unless the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;
|
|
·
|
a breach by the office holder of his duty of care if such breach was done intentionally or recklessly
;
|
|
·
|
any act or omission done with the intent to derive an illegal personal gain; or
|
|
·
|
any fine or penalty levied against the office holder as a result of a criminal offense.
|
D.
|
Employees
|
E.
|
Share Ownership
|
ITEM 7
:
|
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|
|
·
|
each person who we believe beneficially owns 5% or more of our outstanding ordinary shares, and
|
|
·
|
all of our directors and executive officers as a group.
|
Name
|
Number of Shares
|
Percent
|
||||||
FIMI Funds (1).
|
15,042,672 | 33.8 | % | |||||
Itshak Sharon (Tshuva) (2)
|
5,222,218 | 11.8 | % | |||||
Mivtah Shamir Holdings Ltd. (3)
|
4,398,256 | 9.9 | % | |||||
Meitav Dash Investments Ltd. (4)
|
2,365,786 | 5.3 | % | |||||
All directors and executive officers as a group (18 persons) (5)
|
1,347,521 | 3.0 | % |
|
(1)
|
Based on a Schedule 13D/A filed on December 4, 2014 with the SEC and information provided to the Company, FIMI Opportunity IV, L.P., FIMI Israel Opportunity IV, Limited Partnership (the “FIMI IV Funds”), FIMI Opportunity V, L.P., FIMI Israel Opportunity Five, Limited Partnership (the "FIMI V Funds" and together with the FIMI IV Funds, the "FIMI Funds"), FIMI IV 2007 Ltd., FIMI FIVE 2012 Ltd., Shira and Ishay Davidi Management Ltd. and Mr. Ishay Davidi share voting and dispositive power with respect to the 15,042,672 shares held by the FIMI Funds. FIMI IV 2007 Ltd. is the managing general partner of the FIMI IV Funds. FIMI FIVE 2012 Ltd. is the managing general partner of the FIMI V Funds. Shira and Ishay Davidi Management Ltd. controls FIMI IV 2007 Ltd. and FIMI FIVE 2012 Ltd. Mr. Ishay Davidi controls Shira and Ishay Davidi Management Ltd. and is the Chief Executive Officer of all the entities listed above. These holdings include options to purchase 100,000 ordinary shares held by FIMI IV 2007 Ltd., which are currently exercisable or are exercisable within 60 days of the date hereof granted to it by our company in connection with the service of its executives, Ishay Davidi and Amiram Boehm, as members of our Board. The principal business address of each of the above entities and of Mr. Davidi is c/o FIMI IV 2007 Ltd., Electra Tower, 98 Yigal Alon St., Tel-Aviv 6789141, Israel.
|
|
(2)
|
Based on a Schedule 13G/A filed on June 2, 2015 with the SEC by Itshak Sharon (Tshuva), Delek Group Ltd. and The Phoenix Holding Ltd and other information provided to us by such shareholders. The ordinary shares are beneficially owned by various direct or indirect, majority or wholly-owned subsidiaries of the Phoenix Holding Ltd. (“the Subsidiaries”). The Subsidiaries manage their own funds and/or the funds of others, including for holders of exchange-traded notes or various insurance policies, members of pension or provident funds, unit holders of mutual funds, and portfolio management clients. Each of the Subsidiaries operates under independent management and makes its own independent voting and investment decisions. The Phoenix Holding Ltd. is a majority-owned subsidiary of Delek Group Ltd. The majority of Delek Group Ltd.'s outstanding share capital and voting rights are owned, directly and indirectly, by Itshak Sharon (Tshuva) through private companies wholly-owned by him, and the remainder is held by the public. The principal business address of Itshak Sharon (Tshuva) and Delek Investments and Properties Ltd. is 7 Giborei Israel Street, P.O.B. 8464, Netanya, 4250407, Israel. The principal business address of the Phoenix Holding Ltd. is Derech Hashalom 53, Givataim, 5345433, Israel.
|
|
(3)
|
Based on a Schedule 13G/A filed on December 15, 2015 by Mivtah Shamir Holdings Ltd. The principal office of Mivtah Shamir Holdings Ltd. is 27 Habarzel Street, Tel-Aviv.
|
|
(4)
|
Based on a Schedule 13G filed on January 6, 2016, Meitav Dash Investments Ltd. (“Meitav”) is controlled by: (1) BRM Group Ltd. (“BRM Group”) which holds Meitav’s shares through BRM Finance Ltd., a wholly owned subsidiary of BRM Group. The shareholders of BRM Group are Messrs. Eli Barkat, Nir Barkat (Messrs. Eli Barkat and Nir Barkat are brothers) and Yuval Rakavy, each holds 33.3% through his controlled companies; and (2) Mr. Zvi Stepak who holds Meitav’s shares through Maya Holdings (Ye'elim) Ltd. (“Maya holdings”) a company which he controls and Nili (Amir) Holdings Ltd. (a wholly owned subsidiary of Maya Holdings). Meitav holds 2,365,786 ordinary shares as follows: (i) 518,882 ordinary shares owned by Mutual Funds of Meitav Dash Investments LTD group; (ii) 1,228,438 ordinary shares owned by Provident Funds of Meitav Dash Investments LTD group; (iii) 570,271 ordinary shares owned by ETFs of Meitav Dash Investments LTD group, and (iv) 48,195 ordinary shares owned by the Portfolio Management of Meitav Dash Investments LTD group. The principal business address of Meitav is 30 Derekh Sheshet Ha-yamim, Bene-Beraq, Israel.
|
|
(5)
|
As of March 21, 2016 all directors and executive officers as a group (18 persons) held 495,832 options that are vested or that vest within 60 days of March 21, 2016.
|
B.
|
Related Party Transactions.
|
C.
|
Interests of Experts and Counsel.
|
ITEM
8:
|
FINANCIAL INFORMATION
|
A.
|
Consolidated Statements
|
ITEM
9:
|
THE OFFER AND LISTING
|
A.
|
Offer and Listing Details
|
NASDAQ
|
TASE
|
|||||||||||||||
Year
|
High
|
Low
|
High
|
Low
|
||||||||||||
2011
|
$ | 5.89 | $ | 3.04 | $ | 5.94 | $ | 3.10 | ||||||||
2012
|
$ | 5.60 | $ | 2.31 | $ | 5.61 | $ | 2.40 | ||||||||
2013
|
$ | 6.20 | $ | 4.09 | $ | 6.00 | $ | 4.05 | ||||||||
2014
|
$ | 5.71 | $ | 4.50 | $ | 5.68 | $ | 4.45 | ||||||||
2015
|
$ | 7.07 | $ | 3.11 | $ | 6.93 | $ | 3.09 |
NASDAQ
|
TASE
|
|||||||||||||||
High
|
Low
|
High
|
Low
|
|||||||||||||
2014
|
||||||||||||||||
First quarter
|
$ | 5.71 | $ | 4.60 | $ | 5.68 | $ | 4.55 | ||||||||
Second quarter
|
$ | 5.11 | $ | 4.50 | $ | 5.24 | $ | 4.45 | ||||||||
Third quarter
|
$ | 5.13 | $ | 4.51 | $ | 5.17 | $ | 4.51 | ||||||||
Fourth quarter
|
$ | 5.18 | $ | 4.65 | $ | 5.18 | $ | 4.57 | ||||||||
2015
|
||||||||||||||||
First quarter
|
$ | 6.10 | $ | 4.42 | $ | 6.23 | $ | 4.39 | ||||||||
Second quarter
|
$ | 7.07 | $ | 5.23 | $ | 6.93 | $ | 5.21 | ||||||||
Third quarter
|
$ | 5.75 | $ | 3.36 | $ | 5.88 | $ | 3.31 | ||||||||
Fourth quarter
|
$ | 4.06 | $ | 3.11 | $ | 4.10 | $ | 3.09 |
2016
|
||||||||||||||||
First quarter (through March 20, 2016)
|
$ | 4.38 | $ | 3.28 | $ |
4.45
|
$ |
3.22
|
NASDAQ
|
Tel Aviv Stock Exchange
|
|||||||||||||||
High
|
Low
|
High
|
Low
|
|||||||||||||
October 2015
|
$ | 3.85 | $ | 3.41 | $ | 3.88 | $ | 3.41 | ||||||||
November 2015
|
$ | 4.06 | $ | 3.11 | $ | 4.10 | $ | 3.09 | ||||||||
December 2015
|
$ | 3.96 | $ | 3.30 | $ | 4.03 | $ | 3.26 | ||||||||
January 2016
|
$ | 3.60 | $ | 3.28 | $ | 3.70 | $ | 3.22 | ||||||||
February 2016
|
$ | 4.02 | $ | 3.51 | $ | 4.03 | $ | 3.43 | ||||||||
March 2016 (through March 20, 2016)
|
$ | 4.38 | $ | 3.84 | $ |
4.45
|
$ |
3.81
|
B.
|
Plan of Distribution
|
C.
|
Markets
|
D.
|
Selling Shareholders
|
E.
|
Dilution
|
F.
|
Expense of the Issue
|
ITEM
10:
|
ADDITIONAL INFORMATION
|
A.
|
Share Capital
|
B.
|
Memorandum and Articles of Association
|
C.
|
Material Contracts
|
D.
|
Exchange Controls
|
|
E.
|
Taxation
|
|
·
|
broker-dealers;
|
|
·
|
financial institutions;
|
|
·
|
certain insurance companies;
|
|
·
|
investors liable for alternative minimum tax;
|
|
·
|
regulated investment companies, real estate investment trusts, or grantor trusts;
|
|
·
|
dealers or traders in securities, commodities or currencies;
|
|
·
|
tax-exempt organizations;
|
|
·
|
non-resident aliens of the United States or taxpayers whose functional currency is not the U.S. dollar;
|
|
·
|
persons who hold ordinary shares through partnerships or other pass-through entities;
|
|
·
|
persons who acquire their ordinary shares through the exercise or cancellation of employee stock options or otherwise as compensation for services;
|
|
·
|
direct, indirect or constructive owners of investors that actually or constructively own 10% or more of our shares by vote or value; or
|
|
·
|
investors holding ordinary shares as part of a straddle, appreciated financial position, a hedging transaction or conversion transaction.
|
|
·
|
an individual who is a citizen or, for U.S. federal income tax purposes, a resident of the United States;
|
|
·
|
a corporation or other entity taxable as a corporation created or organized in or under the laws of the United States or any political subdivision thereof;
|
|
·
|
an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
|
|
·
|
a trust if such trust has validly elected to be treated as a U.S. person for U.S. federal income tax purposes or if (1) a court within the United States is able to exercise primary supervision over its administration and (2) one or more U.S. persons have the authority to control all of the substantial decisions of such trust.
|
|
|
|
|
F.
|
Dividend and Paying Agents
|
G.
|
Statement by Experts
|
H.
|
Documents on Display
|
I.
|
Subsidiary Information
|
ITEM
11:
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Expected Maturity Dates
|
||||||||||||||||||||
2016
|
2017
|
2018
|
2019
|
2020 and thereafter
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Assets:
|
||||||||||||||||||||
Restricted cash - in U.S. dollars
|
85,915 | - | - | - | - | |||||||||||||||
Weighted interest rate
|
0.20 | % | - | - | - | - | ||||||||||||||
In other currency
|
14,864 | - | - | - | 179 | |||||||||||||||
Weighted interest rate
|
0.16 | % | - | - | - | 5.84 | % | |||||||||||||
Restricted cash held by Trustees
In other currency
|
8,524 | |||||||||||||||||||
Weighted interest rate
|
0.40 | % | ||||||||||||||||||
Liabilities:
|
||||||||||||||||||||
Long-term loans (including current maturities)
|
||||||||||||||||||||
In U.S. dollars
|
4,000 | 4,000 | 4,000 | 4,000 | 8,000 | |||||||||||||||
Weighted interest rate
|
4.77 | % | 4.77 | % | 4.77 | % | 4.77 | % | 4.77 | % | ||||||||||
In other currency
|
542 | 529 | 435 | 435 | 94 | |||||||||||||||
Weighted interest rate
|
3.46 | % | 3.38 | % | 2.62 | % | 2.62 | % | 2.62 | % |
ITEM
12:
|
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|
ITEM
13:
|
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|
ITEM
14:
|
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|
ITEM
15:
|
CONTROLS AND PROCEDURES
|
|
·
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transaction and dispositions of the assets of the company;
|
|
·
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
|
|
·
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use of disposition of the company’s assets that could have a material effect on the financial statements.
|
ITEM
16:
|
RESERVED
|
ITEM
16A
:
|
AUDIT COMMITTEE FINANCIAL EXPERT
|
ITEM
16B:
|
CODE OF ETHICS
|
Year Ended December 31,
|
||||||||||||||||
|
2015
|
2014
|
||||||||||||||
Services Rendered
|
Fees
|
Percentages
|
Fees
|
Percentages
|
||||||||||||
Audit fees (1)
|
$ | 869,146 | 91.68 | % | $ | 810,677 | 94.25 | % | ||||||||
Tax fees (2)
|
$ | 15,284 | 1.61 | % | $ | 32,841 | 3.82 | % | ||||||||
Other (3)
|
$ | 63,600 | 6.71 | % | $ | 16,639 | 1.93 | % | ||||||||
Total
|
$ | 948,030 | 100 | % | $ | 860,157 | 100 | % |
(1)
|
Audit fees are fees for audit services for each of the years shown in this table, including fees associated with the annual audit, services provided in connection with audit of our internal control over financial reporting and audit services provided in connection with other statutory or regulatory filings.
|
(2)
|
Tax fees are fees for professional services rendered by our auditors for tax compliance, tax planning and tax advice on actual or contemplated transactions.
|
(3)
|
Other fees are fees for professional services other than audit or tax related fees, rendered in connection with our business activities; such fees in 2015 were mainly related to other services provided in connection with regulatory filings and in 2014 were mainly related to certain certifications to government authorities.
|
ITEM
16D.
|
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
|
ITEM
16E:
|
PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|
ITEM
16G.
|
CORPORATE GOVERNANCE
|
|
·
|
The requirement to obtain shareholder approval for the establishment or material amendment of certain equity based compensation plans and arrangements, under which shares may be acquired by officers, directors, employees or consultants. Under Israeli law and practice, the approval of the board of directors is required for the establishment or material amendment of such equity based compensation plans and arrangements. However, any equity based compensation arrangement with a director or the Chief Executive Officer or the material amendment of such an arrangement must be approved by our Compensation and Stock Option Committee, Board of Directors and shareholders, in that order
|
|
·
|
The requirements regarding the director nominations process. We do not have a nomination committee. Under Israeli law and practice, our Board of Directors is authorized to recommend to our shareholders director nominees for election, and
certain of our shareholders
may nominate candidates for election as directors by the general meeting of shareholders.
|
ITEM
16H.
|
MINE SAFETY DISCLOSURE
|
ITEM
17:
|
FINANCIAL STATEMENTS
|
ITEM
18:
|
FINANCIAL STATEMENTS
|
ITEM
19:
|
EXHIBITS
|
1.1
|
Memorandum of Association, as amended. Previously filed as Exhibit 1.1 to our Annual Report on Form 20-F for the fiscal year ending December 31, 2000, which Exhibit is incorporated herein by reference.
|
1.2
|
Articles of Association, as amended and restated as of December 29, 2011. Previously filed as Exhibit 1.2 to our Annual Report on Form 20-F for the fiscal year ending December 31, 2011, which Exhibit is incorporated herein by reference.
|
4.1
|
Summary of material provisions of the loan documents between Gilat Satellite Networks Ltd. and First International Bank of Israel, dated December 14, 2010. Previously filed as Exhibit 4.4 to our Annual Report on Form 20-F for the fiscal year ending December 31, 2010, which Exhibit is incorporated herein by reference.
|
4.2
|
Summary of material provisions of an amendment dated
February 7, 2013
to the loan documents between Gilat Satellite Networks Ltd. and First International Bank of Israel, dated December 14, 2010. Previously filed as Exhibit 4.5 to our Annual Report on Form 20-F for the fiscal year ending December 31, 2012, which Exhibit is incorporated herein by reference.
|
4.3
|
English summary of material provisions of an amendment (in Hebrew) dated August 17, 2015 to the loan agreements between Gilat Satellite Networks Ltd. and First International Bank of Israel, dated December 14, 2010.
|
4.4
|
Gilat Satellite Networks Ltd. 2008 Share Incentive Plan (including the Israeli Sub-plan to the Gilat Satellite Networks Ltd. 2008 Share Incentive Plan), previously filed on April 8, 2009 as Exhibit 4.4 to the our Registration Statement on Form S-8 (File No. 333-158476), and incorporated herein by reference.
|
4.5
|
Gilat Satellite Networks Ltd. 2005 Share Incentive Plan (including the Israeli Sub-plan to the Gilat Satellite Networks Ltd. 2005 Share Incentive Plan), previously filed on April 8, 2009 as Exhibit 4.3 to our Registration Statement on Form S-8 (File No. 333-158476), and incorporated herein by reference.
|
4.6
|
Executive Compensation Plan previously filed as Exhibit A to the proxy statement filed on Form 6-K on August 7, 2013, which Exhibit is incorporated herein by reference.
|
4.7
|
English translation based on the English version published by FITEL of the Financing Agreement between FITEL and Gilat Networks Peru S.A. dated December 29, 2015, for Broadband Installation for Integral Connectivity and Social Development of the Cusco’s region and a non-literal English translation of the Economic Proposal annexed thereto.
|
4.8
|
English translation based on the English version published by FITEL of the Financing Agreement between the FITEL and Gilat Networks Peru S.A. dated May 27, 2015, for Broadband Installation for Integral Connectivity and Social Development of the Ayacucho’s region and a non-literal English translation of the Economic Proposal annexed thereto.
|
4.9
|
English translation based on the English version published by FITEL of the Financing Agreement between the FITEL and Gilat Networks Peru S.A. dated May 27, 2015, for Broadband Installation for Integral Connectivity and Social Development of the Apurímac’s region and a non-literal English translation of the Economic Proposal annexed thereto.
|
4.10
|
English translation based on the English version published by FITEL of the Financing Agreement between the FITEL and Gilat Networks Peru S.A. dated May 27, 2015, for Broadband Installation for Integral Connectivity and Social Development of the Huancavelica’s region and a non-literal English translation of the Economic Proposal annexed thereto.
|
4.11
|
Copy of Deed of Indemnity dated May 20, 2015 and Deed of Consent dated December 29, 2015, both entered into between Gilat Satellite Networks Ltd. and Amtrust Europe Limited.
|
4.12
|
Copy of Memorandum of Understanding and amendment thereto dated December 28, 2015 and January 28 2016, respectively, entered between Gilat Networks Peru SA, and Amtrust Insurance Spain, SL.
|
8.1
|
List of subsidiaries.
|
12.1
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
|
12.2
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
|
13.1
|
Certification by Chief Executive Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
|
13.2
|
Certification by Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
|
15.1
|
Consent of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global.
|
|
101.INS
|
XBRL Instance Document *.
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
|
101.PRE
|
XBRL Taxonomy Presentation Linkbase Document.
|
|
101.CAL
|
XBRL Taxonomy Calculation Linkbase Document.
|
|
101.LAB
|
XBRL Taxonomy Label Linkbase Document.
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
*
|
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
|
GILAT SATELLITE NETWORKS LTD.
|
|||
|
By: |
/s/ Dov Baharav
|
|
Dov Baharav
|
|||
Chairman and Interim Chief Executive Officer
|
Page
|
|
F-2
|
|
F-5 – F-6
|
|
F-7
|
|
F-8
|
|
F-9
|
|
F-10 - F-12
|
|
F-13- F-53
|
|
Kost Forer Gabbay & Kasierer
3 Aminadav St.
Tel-Aviv 6706703, Israel
|
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
|
Tel-Aviv, Israel
|
KOST FORER GABBAY & KASIERER
|
March 22, 2016
|
A Member of Ernst & Young Global
|
|
Kost Forer Gabbay & Kasierer
3 Aminadav St.
Tel-Aviv 6706703, Israel
|
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
|
|
Kost Forer Gabbay & Kasierer
3 Aminadav St.
Tel-Aviv 6706703, Israel
|
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
|
Tel-Aviv, Israel
|
KOST FORER GABBAY & KASIERER
|
March 22, 2016
|
A Member of Ernst & Young Global
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$ | 18,435 | $ | 27,726 | ||||
Restricted cash
|
100,779 | 25,983 | ||||||
Restricted cash held by trustees
|
8,524 | 15,441 | ||||||
Trade receivables, net
|
50,984 | 57,728 | ||||||
Inventories
|
25,358 | 25,112 | ||||||
Other current assets
|
16,223 | 14,760 | ||||||
Total
current assets
|
220,303 | 166,750 | ||||||
LONG-TERM INVESTMENTS AND RECEIVABLES:
|
||||||||
Severance pay funds
|
7,545 | 8,085 | ||||||
Long-term restricted cash
|
179 | 216 | ||||||
Other long-term receivables
|
221 | 12,124 | ||||||
Total
long-term investments and receivables
|
7,945 | 20,425 | ||||||
PROPERTY AND EQUIPMENT, NET
|
81,963 | 90,893 | ||||||
INTANGIBLE ASSETS, NET
|
17,154 | 22,970 | ||||||
GOODWILL
|
43,468 | 63,870 | ||||||
Total
assets
|
$ | 370,833 | $ | 364,908 |
Year ended
December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Revenues:
|
||||||||||||
Products
|
$ | 128,970 | $ | 157,531 | $ | 133,554 | ||||||
Services
|
68,573 | 77,602 | 101,312 | |||||||||
Total
revenues
|
197,543 | 235,133 | 234,866 | |||||||||
Cost of revenues:
|
||||||||||||
Products
|
94,683 | 106,905 | 86,304 | |||||||||
Services
|
48,635 | 44,593 | 68,906 | |||||||||
Impairment of long lived assets
|
10,137 | - | - | |||||||||
Total
cost of revenues
|
153,455 | 151,498 | 155,210 | |||||||||
Gross profit
|
44,088 | 83,635 | 79,656 | |||||||||
Operating expenses:
|
||||||||||||
Research and development, net
|
22,412 | 25,158 | 27,900 | |||||||||
Selling and marketing
|
24,823 | 32,537 | 32,214 | |||||||||
General and administrative
|
18,644 | 20,903 | 23,071 | |||||||||
Restructuring costs
|
1,508 | - | 564 | |||||||||
Goodwill impairment
|
20,402 | - | - | |||||||||
Total
operating expenses
|
87,789 | 78,598 | 83,749 | |||||||||
Operating income (loss)
|
(43,701 | ) | 5,037 | (4,093 | ) | |||||||
Financial expenses, net
|
(7,243 | ) | (3,837 | ) | (6,239 | ) | ||||||
Income (loss) before taxes on income
|
(50,944 | ) | 1,200 | (10,332 | ) | |||||||
Taxes on income (tax benefit)
|
1,190 | 1,901 | (755 | ) | ||||||||
Loss from continuing operations
|
(52,134 | ) | (701 | ) | (9,577 | ) | ||||||
Loss from discontinued operations
|
(200 | ) | (795 | ) | (8,320 | ) | ||||||
Loss
|
$ | (52,334 | ) | $ | (1,496 | ) | $ | (17,897 | ) | |||
Loss per share (basic and diluted):
|
||||||||||||
Continuing operations
|
$ | (1.19 | ) | $ | (0.02 | ) | $ | (0.23 | ) | |||
Discontinued operations
|
$ | (0.00 | ) | $ | (0.02 | ) | $ | (0.20 | ) | |||
Total loss per share
|
$ | (1.19 | ) | $ | (0.04 | ) | $ | (0.43 | ) | |||
Weighted average number of shares used in computing loss per share:
|
||||||||||||
Basic and diluted
|
43,655,309 | 42,444,482 | 41,960,925 |
Year ended
December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Loss
|
$ | (52,334 | ) | $ | (1,496 | ) | $ | (17,897 | ) | |||
Other comprehensive loss:
|
||||||||||||
Foreign currency translation adjustments
|
(3,022 | ) | (2,205 | ) | 90 | |||||||
Reclassification adjustments for realized loss (gain) on
hedging instruments, net
|
839 | 985 | (1,931 | ) | ||||||||
Unrealized gain (loss) on hedging instruments, net
|
(124 | ) | (1,791 | ) | 568 | |||||||
|
||||||||||||
Total comprehensive loss
|
$ | (54,641 | ) | $ | (4,507 | ) | $ | (19,170 | ) |
Number of
Ordinary shares
|
Share
capital
|
Additional
paid-in
capital
|
Accumulated
other
comprehensive
income (loss)
|
Accumulated
deficit
|
Total
shareholders'
equity
|
|||||||||||||||||||
Balance as of January 1, 2013
|
41,700,100 | $ | 1,909 | $ | 869,822 | $ | 2,864 | $ | (632,638 | ) | $ | 241,957 | ||||||||||||
Issuance of restricted share units (RSU)
|
271,176 | 15 | - | - | - | 15 | ||||||||||||||||||
Stock-based compensation of options and RSUs
|
- | - | 2,665 | - | - | 2,665 | ||||||||||||||||||
Exercise of stock options
|
154,498 | 8 | 558 | - | - | 566 | ||||||||||||||||||
Comprehensive loss
|
- | - | - | (1,273 | ) | (17,897 | ) | (19,170 | ) | |||||||||||||||
Balance as of December 31, 2013
|
42,125,774 | 1,932 | 873,045 | 1,591 | (650,535 | ) | 226,033 | |||||||||||||||||
Issuance of restricted share units (RSU)
|
332,650 | 19 | - | - | - | 19 | ||||||||||||||||||
Stock-based compensation of options and RSUs
|
- | - | 2,427 | - | - | 2,427 | ||||||||||||||||||
Exercise of stock options
|
272,000 | 15 | 1,152 | - | - | 1,167 | ||||||||||||||||||
Comprehensive loss
|
- | - | - | (3,011 | ) | (1,496 | ) | (4,507 | ) | |||||||||||||||
Balance as of December 31, 2014
|
42,730,424 | 1,966 | 876,624 | (1,420 | ) | (652,031 | ) | 225,139 | ||||||||||||||||
Issuance of restricted share units (RSU)
|
283,175 | 14 | - | - | - | 14 | ||||||||||||||||||
Stock-based compensation of options and RSUs
|
- | - | 1,901 | - | - | 1,901 | ||||||||||||||||||
Exercise of stock options
|
1,319,448 | 68 | 5,601 | - | - | 5,669 | ||||||||||||||||||
Comprehensive loss
|
- | - | - | (2,307 | ) | (52,334 | ) | (54,641 | ) | |||||||||||||||
Balance as of December 31, 2015
|
44,333,047 | $ | 2,048 | $ | 884,126 | $ | (3,727 | ) | $ | (704,365 | ) | $ | 178,082 |
Year ended
December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Cash flows from continuing operations
|
||||||||||||
Cash flows from operating activities
:
|
||||||||||||
Loss
|
$ | (52,334 | ) | $ | (1,496 | ) | $ | (17,897 | ) | |||
Loss from discontinued operations
|
(200 | ) | (795 | ) | (8,320 | ) | ||||||
Loss from continuing operations
|
(52,134 | ) | (701 | ) | (9,577 | ) | ||||||
Reconciliation of loss to net cash provided by (used in) operating activities:
|
||||||||||||
Depreciation and amortization
|
15,072 | 15,951 | 17,559 | |||||||||
Goodwill impairment
|
20,402 | - | - | |||||||||
Impairment of long lived assets
|
10,137 | - | - | |||||||||
Stock-based compensation of options and RSUs
|
1,901 | 2,427 | 2,268 | |||||||||
Accrued severance pay, net
|
(111 | ) | 300 | (38 | ) | |||||||
Accrued interest and exchange rate differences on restricted cash and deposits, net
|
842 | 858 | 307 | |||||||||
Exchange rate differences on long-term loans
|
(288 | ) | (416 | ) | 157 | |||||||
Capital loss from disposal of property and equipment
|
82 | 430 | 48 | |||||||||
Deferred income taxes, net
|
1 | 7 | (2,733 | ) | ||||||||
Decrease (increase) in trade receivables, net
|
4,553 | (2,457 | ) | (4,228 | ) | |||||||
Decrease (increase) in other assets (including short-term, long-term and deferred charges)
|
998 | (20,251 | ) | 10,740 | ||||||||
Increase in inventories
|
(2,821 | ) | (445 | ) | (6,502 | ) | ||||||
Increase in restricted cash directly related to operating activities, net
|
(87,004 | ) | - | - | ||||||||
Increase (decrease) in trade payables
|
(5,133 | ) | 2,226 | (1,225 | ) | |||||||
Increase (decrease) in accrued expenses
|
2,935 | 5,401 | (4,703 | ) | ||||||||
Increase (decrease) in advances from customers
|
79,884 | (25,935 | ) | 25,249 | ||||||||
Increase (decrease) in advances from customers held by trustees, net
|
(2,243 | ) | 14,068 | (4,448 | ) | |||||||
Decrease in other current liabilities and other long-term liabilities
|
(1,860 | ) | (7,625 | ) | (6,477 | ) | ||||||
Net cash provided by (used in) operating activities
|
(14,787 | ) | (16,162 | ) | 16,397 |
Year ended
December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Cash flows used in investing activities:
|
||||||||||||
Purchase of property and equipment
|
(3,930 | ) | (12,630 | ) | (4,063 | ) | ||||||
Investment in restricted cash (including long-term)
|
(22,717 | ) | (12,788 | ) | (25,961 | ) | ||||||
Proceeds from restricted cash (including long-term)
|
34,120 | 11,228 | 2,975 | |||||||||
Investment in restricted cash held by trustees
|
(16,634 | ) | (24,869 | ) | (17,587 | ) | ||||||
Proceeds from restricted cash held by trustees
|
21,501 | 12,306 | 13,744 | |||||||||
Purchase of intangible assets
|
- | - | (16 | ) | ||||||||
Net cash provided by (used in) investing activities
|
12,340 | (26,753 | ) | (30,908 | ) | |||||||
Cash flows used in financing activities:
|
||||||||||||
Capital lease payments
|
(609 | ) | (234 | ) | - | |||||||
Issuance of restricted stock units and exercise of stock option
|
5,683 | 1,186 | 581 | |||||||||
Payment of obligation related to the purchase of intangible asset
|
(500 | ) | (500 | ) | (500 | ) | ||||||
Short-term bank credit, net
|
(5,897 | ) | 16,570 | (3,518 | ) | |||||||
Repayment of long-term loans
|
(4,544 | ) | (4,633 | ) | (12,950 | ) | ||||||
Net cash provided by (used in) financing activities
|
(5,867 | ) | 12,389 | (16,387 | ) | |||||||
Cash flows from discontinued operations
|
||||||||||||
Net cash used in operating activities
|
- | - | (5,996 | ) | ||||||||
Net cash provided by investing activities
|
- | - | 15,791 | |||||||||
Net cash provided by financing activities
|
- | - | 12,884 | |||||||||
- | - | 22,679 | ||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
(977 | ) | (172 | ) | (325 | ) | ||||||
Decrease in cash and cash equivalents
|
(9,291 | ) | (30,698 | ) | (8,544 | ) | ||||||
Cash and cash equivalents at the beginning of the year
|
27,726 | 58,424 | 66,968 | |||||||||
Cash and cash equivalents at the end of the year
|
$ | 18,435 | $ | 27,726 | $ | 58,424 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Year ended
December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Supplementary cash flow activities
:
|
||||||||||||
(1)
Cash paid during the year for continuing operations:
|
||||||||||||
Interest
|
$ | 1,507 | $ | 1,681 | $ | 2,154 | ||||||
Income taxes
|
$ | 517 | $ | 1,582 | $ | 730 | ||||||
(2)
Non-cash transactions:
|
||||||||||||
Reclassification from inventories to property and equipment
|
$ | 2,519 | $ | 2,857 | $ | 3,778 | ||||||
Reclassification from property and equipment to inventories
|
$ | 114 | $ | 381 | $ | 691 | ||||||
Capital lease
|
$ | 26 | $ | 1,123 | $ | - |
NOTE 1:
|
GENERAL
|
|
a.
|
Organization:
|
|
b.
|
Goodwill impairment
:
|
NOTE 1:
|
GENERAL (Cont.)
|
|
c.
|
Impairment of long-lived assets in Colombia
:
|
|
d.
|
Discontinued Operation:
|
NOTE 1:
|
GENERAL (Cont.)
|
Year ended
December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Revenues
|
$ | - | $ | - | $ | 67,865 | ||||||
Cost of revenues
|
- | - | 54,996 | |||||||||
Gross profit
|
- | - | 12,869 | |||||||||
Operating costs and expenses:
|
||||||||||||
Selling and marketing
|
- | - | 7,753 | |||||||||
General and administrative
|
- | - | 11,758 | |||||||||
Total operating expenses
|
- | - | 19,511 | |||||||||
Operating loss
|
- | - | (6,642 | ) | ||||||||
Loss from disposal of subsidiary
|
(200 | ) | (795 | ) | (1,385 | ) | ||||||
Financial income (expenses), net
|
- | - | (255 | ) | ||||||||
Loss before taxes on income
|
(200 | ) | (795 | ) | (8,282 | ) | ||||||
Taxes on income
|
- | - | 38 | |||||||||
Loss
|
$ | (200 | ) | $ | (795 | ) | $ | (8,320 | ) |
|
e.
|
The Company depends on a major supplier to supply certain components and services for the production of its products or providing services. If this supplier fails to deliver or delays the delivery of the necessary components or services, the Company will be required to seek alternative sources of supply. A change in suppliers could result in manufacturing delays or services delays which could cause a possible loss of sales and, or, additional incremental costs and, consequently, could adversely affect the Company's results of operations and financial position.
|
|
a.
|
Use of estimates:
|
|
b.
|
Functional currency:
|
|
c.
|
Principles of consolidation:
|
|
d.
|
Cash equivalents:
|
|
e.
|
Short-term and long-term restricted cash:
|
|
f.
|
Restricted cash held by trustees:
|
|
g.
|
Inventories:
|
|
h.
|
Property and equipment, net:
|
Years
|
|
Buildings
|
50
|
Computers, software and electronic equipment
|
3 - 12
|
Office furniture and equipment
|
3 - 17
|
Vehicles
|
3 - 7
|
|
i.
|
Intangible assets:
|
|
j.
|
Impairment of long-lived assets
|
|
k.
|
Goodwill:
|
|
l.
|
Contingencies
|
|
n.
|
Revenue recognition:
|
|
o.
|
Shipping and advertising expenses:
|
|
p.
|
Warranty costs:
|
|
q.
|
Research and development expenses, net:
|
|
r.
|
Research and development grants:
|
|
s.
|
Accounting for stock-based compensation:
|
|
t.
|
Income taxes:
|
|
u.
|
Concentrations of credit risks:
|
|
v.
|
Employee related benefits:
|
|
v.
|
Fair value of financial instruments:
|
|
Level 1 -
|
Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.
|
|
Level 2 -
|
Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
|
|
Level 3 -
|
Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
|
|
w.
|
Restructuring Costs:
|
|
x.
|
Loss per share:
|
|
y.
|
Derivatives and hedging activities:
|
|
z.
|
Comprehensive income (loss):
|
Year ended
December 31, 2015
|
||||||||||||
Foreign currency translation adjustments
|
Unrealized gains (losses) on cash flow hedges
|
Total
|
||||||||||
Beginning balance
|
$ | (614 | ) | $ | (806 | ) | $ | (1,420 | ) | |||
Other comprehensive loss before reclassifications
|
(3,022 | ) | (124 | ) | (3,146 | ) | ||||||
Amounts reclassified from accumulated other comprehensive loss
|
- | 839 | 839 | |||||||||
Net current-period other comprehensive loss
|
(3,022 | ) | 715 | (2,307 | ) | |||||||
Ending balance
|
$ | (3,636 | ) | $ | (91 | ) | $ | (3,727 | ) |
Year ended
December 31, 2014
|
||||||||||||
Foreign currency translation adjustments
|
Unrealized gains (losses) on cash flow hedges
|
Total
|
||||||||||
Beginning balance
|
$ | 1,591 | $ | - | $ | 1,591 | ||||||
Other comprehensive loss before reclassifications
|
(2,205 | ) | (1,791 | ) | (3,996 | ) | ||||||
Amounts reclassified from accumulated other comprehensive loss
|
- | 985 | 985 | |||||||||
Net current-period other comprehensive loss
|
( 2,205 | ) | (806 | ) | (3,011 | ) | ||||||
Ending balance
|
$ | (614 | ) | $ | (806 | ) | $ | (1,420 | ) |
|
aa.
|
Impact of recently issued accounting pronouncements:
|
NOTE 3:-
|
INVENTORIES
|
|
a.
|
Inventories are comprised of the following:
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
Raw materials, parts and supplies
|
$ | 7,084 | $ | 8,130 | ||||
Work in progress
|
7,471 | 5,477 | ||||||
Finished products
|
10,803 | 11,505 | ||||||
$ | 25,358 | $ | 25,112 |
|
b.
|
Inventory write-offs totaled $ 2,054, $ 1,002 and $ 2,080 in 2015, 2014 and 2013, respectively.
|
NOTE 4:-
|
PROPERTY AND EQUIPMENT, NET
|
|
a.
|
Composition of property and equipment, grouped by major classifications, is as follows:
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
Cost:
|
||||||||
Buildings and land
|
$ | 93,499 | $ | 93,094 | ||||
Computers, software and electronic equipment
|
70,590 | 67,874 | ||||||
Equipment leased to others
|
73,798 | 75,606 | ||||||
Office furniture and equipment
|
7,782 | 7,823 | ||||||
Vehicles
|
436 | 455 | ||||||
Leasehold improvements
|
2,330 | 2,747 | ||||||
248,435 | 247,599 | |||||||
Accumulated depreciation and impairment *)
|
166,472 | 156,706 | ||||||
Depreciated cost
|
$ | 81,963 | $ | 90,893 |
|
*)
|
During the year ended December 31, 2015, the Company recorded an impairment loss of $4,106. The impairment loss was recorded as reduction of the cost of equipment leased to others and computers, software and electronic equipment in the amount of $4,030 and $76, respectively (see also note 1c).
|
|
b.
|
Depreciation expenses totaled $ 9,256, $ 10,091 and $ 9,162 in 2015, 2014 and 2013, respectively.
|
NOTE 4:-
|
PROPERTY AND EQUIPMENT, NET (Cont.)
|
|
c.
|
At December 31, 2015 and 2014, property and equipment under capital leases consisted of assets with a depreciated cost of $ 787 and $ 986, respectively. Depreciation expenses under capital leases totaled $ 225, $ 110 and $ 0 for the years ended December 31, 2015, 2014 and 2013, respectively.
|
|
d.
|
As for pledges and securities, see also note 12d.
|
NOTE 5:-
|
INTANGIBLE ASSETS, NET
|
|
a.
|
Composition of intangible assets, grouped by major classifications, is as follows:
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
Original amounts:
|
||||||||
Technology
|
$ | 42,504 | $ | 42,504 | ||||
Customer relationships
|
4,466 | 4,466 | ||||||
Marketing rights and patents
|
3,421 | 3,421 | ||||||
Backlog
|
432 | 432 | ||||||
50,823 | 50,823 | |||||||
Accumulated amortization:
|
||||||||
Technology
|
28,271 | 23,299 | ||||||
Customer relationships
|
3,419 | 2,795 | ||||||
Marketing rights and patents
|
1,547 | 1,327 | ||||||
Backlog
|
432 | 432 | ||||||
33,669 | 27,853 | |||||||
$ | 17,154 | $ | 22,970 |
|
b.
|
Amortization expenses amounted to $ 5,816, $ 5,860 and $ 8,397 for the years ended December 31, 2015, 2014 and 2013, respectively.
|
|
c.
|
Estimated amortization expenses for the following years is as follows:
|
Year ending December 31,
|
||||
2016
|
$ | 5,771 | ||
2017
|
5,674 | |||
2018
|
3,275 | |||
2019
|
911 | |||
2020
|
441 | |||
2021 and thereafter
|
1,082 | |||
$ | 17,154 |
NOTE 6:-
|
GOODWILL
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
Goodwill *)
|
$ | 105,647 | $ | 105,647 | ||||
Accumulated impairment losses **)
|
(62,179 | ) | (41,777 | ) | ||||
$ | 43,468 | $ | 63,870 |
|
*)
|
The carrying amount of the goodwill is associated with the Mobility Division.
|
|
**)
|
During the year ended December 31, 2015, the Company recorded an impairment loss of $ 20,402 (see also note 1b).
|
NOTE 7:-
|
COMMITMENTS AND CONTINGENCIES
|
|
a.
|
Lease commitments:
|
Lease
|
||||
Year ending December 31,
|
Commitments
|
|||
2016
|
$ | 1,337 | ||
2017
|
343 | |||
2018
|
287 | |||
2019
|
89 | |||
$ | 2,056 |
|
b.
|
Commitments with respect to space segment services:
|
Year ending December 31,
|
||||
2016
|
$ | 8,462 | ||
2017
|
8,098 | |||
2018
|
2,128 | |||
$ | 18,688 |
NOTE 7:-
|
COMMITMENTS AND CONTINGENCIES (Cont.)
|
|
c.
|
In 2015 and 2014, the Company's primary material purchase commitments were with inventory suppliers. The Company's material inventory purchase commitments are based on purchase orders, or on outstanding agreements with some of the Company's suppliers of inventory. As of December 31, 2015 and 2014, the Company's major outstanding inventory purchase commitments amounted to $ 14,213 and $ 29,747, respectively, all of which were orders placed or commitments made in the ordinary course of its business. As of December 31, 2015 and 2014, $ 3,789 and $ 2,774, respectively, of these orders and commitments, were from suppliers which can be considered sole or limited in number.
|
|
d.
|
Royalty commitments:
|
|
1.
|
The Company is committed to pay royalties to the Office of the Chief Scientist ("OCS") of the Ministry of Economy of the Government of Israel on proceeds from sales of products resulting from the research and development projects in which the OCS participated with royalty bearing grants. In the event that development of a specific product in which the OCS participated is successful, the Company will be obligated to repay the grants through royalty payments at the rate of 3% to 5% based on the sales of the Company, up to 100% of the grants received linked to the dollar. Grants are subject to interest at a rate equal to the 12 month LIBOR rate. The obligation to pay these royalties is contingent upon actual sales of the products and, in the absence of such sales, no payment is required.
As of December 31, 2015 and 2014, the Company had a contingent liability to pay royalties in the amount of approximately $ 749 and $ 744, respectively.
The Company did not pay or accrue any amounts for such royalties during the years ended December 31, 2015, 2014 and 2013.
|
|
2.
|
Research and development projects undertaken by the Company were partially financed by the Binational Industrial Research and Development Fund ("BIRD") Foundation. The Company is committed to pay royalties to the BIRD Foundation at a rate of 5% of sales proceeds generating from projects for which the BIRD Foundation provided funding up to 150% of the sum financed by the BIRD Foundation.
The obligation to pay these royalties is contingent on actual sales of the products and in the absence of such sales, no payment is required.
As of December 31, 2015 and 2014, the Company had a contingent liability to pay royalties in the amount of approximately $ 121 and $ 85, respectively.
|
NOTE 7:-
|
COMMITMENTS AND CONTINGENCIES (Cont.)
|
|
e.
|
Litigations
:
In 2003, the Brazilian tax authority filed a claim against the Company's subsidiary in Brazil (an inactive company), for the payment of taxes allegedly due by the subsidiary. Several legal proceedings with respect to this matter were carried out in the Brazilian courts. These proceedings were concluded with a final unfavorable decision against the subsidiary in February and March 2016, except with respect to a small portion of the claim. As of December 31, 2015, the total amount of this claim, including interest, penalties and legal fees, is approximately $ 7,000, of which approximately $1,000 is principal. Based on the Company’s external legal counsel's opinion, the Company believes that any foreclosure procedures against the subsidiary cannot be legally redirected to any of the Group’s entities and managers. Accordingly, the chances that such redirection will lead to a loss recognition are remote and therefore, the Company did not record any accrual related to this litigation.
|
|
f.
|
Pledges and securities - see note 12d.
|
|
g.
|
Guarantees:
|
NOTE 8:-
|
DERIVATIVE INSTRUMENTS
|
Fair value of derivative instruments
|
|||||||||
December 31,
|
|||||||||
Balance sheet line item
|
2015
|
2014
|
|||||||
Derivative:
|
|||||||||
Foreign exchange forward contracts
|
Other current assets (liabilities)
|
$ | (57 | ) | $ | 1,949 | |||
Option contracts to hedge payroll expenses
|
Other current liabilities
|
$ | (91 | ) | $ | (806 | ) |
December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Cost of revenues of products
|
$ | (100 | ) | $ | (107 | ) | $ | 339 | ||||
Cost of revenues of services
|
(55 | ) | (76 | ) | 148 | |||||||
Research and development, net
|
(291 | ) | (337 | ) | 717 | |||||||
Selling and marketing
|
(180 | ) | (166 | ) | 297 | |||||||
General and administrative
|
(187 | ) | (201 | ) | 402 | |||||||
$ | (813 | ) | $ | (887 | ) | $ | 1,903 |
NOTE 9:-
|
EQUITY
|
|
a.
|
Share capital:
Ordinary shares confer upon their holders voting rights, the right to receive cash dividends and the right to share in excess assets upon liquidation of the Company.
|
|
b.
|
Stock Option Plans:
|
NOTE 9:-
|
EQUITY (Cont.)
|
Year ended
December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Risk free interest
|
1.24-1.61 | % | 1.43-1.73 | % | 0.90 | % | ||||||
Dividend yields
|
0 | % | 0 | % | 0 | % | ||||||
Volatility
|
33-34 | % | 34-36 | % | 46 | % | ||||||
Expected term (in years)
|
4.8 | 4.8 | 5 |
Number of options
|
Weighted-average exercise price
|
Weighted- average remaining contractual term
(in years)
|
Aggregate intrinsic value
(in thousands)
|
|||||||||||||
Outstanding at January 1, 2015
|
4,431,383 | $ | 5.0 | 2.2 | $ | 1,405 | ||||||||||
Granted
|
570,000 | $ | 5.5 | |||||||||||||
Exercised
|
(1,307,448 | ) | $ | 4.3 | ||||||||||||
Expired
|
(1,209,005 | ) | $ | 5.7 | ||||||||||||
Forfeited
|
(983,830 | ) | $ | 5.5 | ||||||||||||
Outstanding at December 31, 2015
|
1,501,100 | $ | 5.0 | 4.3 | $ | 74 | ||||||||||
Exercisable at December 31, 2015
|
555,182 | $ | 4.7 | 3.3 | $ | 41 | ||||||||||
Vested and expected to vest at December 31, 2015
|
1,379,691 | $ | 4.9 | 4.2 | $ | 74 |
NOTE 9:-
|
EQUITY (Cont.)
|
Year ended
December 31,
|
||||||||||||||||
2014
|
2013
|
|||||||||||||||
|
Number
of options
|
Weighted
average
exercise
price
|
Number
of options
|
Weighted
average
exercise
price
|
||||||||||||
Options outstanding at beginning of year
|
5,374,000 | $ | 5.0 | 5,879,798 | $ | 5.0 | ||||||||||
Granted
|
600,000 | $ | 5.2 | 40,000 | $ | 5.3 | ||||||||||
Exercised
|
(272,000 | ) | $ | 4.0 | (154,498 | ) | $ | 4.2 | ||||||||
Expired
|
(21,750 | ) | $ | 6.5 | (151,900 | ) | $ | 5.0 | ||||||||
Forfeited
|
(1,248,867 | ) | $ | 5.2 | (239,400 | ) | $ | 6.0 | ||||||||
Options outstanding at end of year
|
4,431,383 | $ | 5.0 | 5,374,000 | $ | 5.0 | ||||||||||
Options exercisable at end of year
|
3,357,465 | $ | 5.2 | 4,097,913 | $ | 5.4 |
Options
|
Weighted
|
Options
|
Weighted
|
|||||||||||||||||||
outstanding
|
average
|
Weighted
|
exercisable
|
average exercise
|
||||||||||||||||||
Ranges of
|
as of
|
remaining
|
Average
|
as of
|
price of
|
|||||||||||||||||
Exercise
|
December 31,
|
contractual
|
Exercise
|
December 31,
|
exercisable
|
|||||||||||||||||
Price
|
2015
|
life (years)
|
Price
|
2015
|
options
|
|||||||||||||||||
$ | 3.00-4.00 | 376,100 | 3.8 | $ | 3.4 | 149,600 | $ | 3.3 | ||||||||||||||
$ | 4.54-6.77 | 1,075,000 | 4.4 | $ | 5.5 | 405,582 | $ | 5.2 | ||||||||||||||
$ | 7.01 | 50,000 | 5.3 | $ | 7.0 | - | - | |||||||||||||||
1,501,100 | 4.3 | $ | 5.0 | 555,182 | $ | 4.7 |
NOTE 9:-
|
EQUITY (Cont.)
|
Year ended December 31,
|
||||||||||||||||||||||||
2015
|
2014
|
2013
|
||||||||||||||||||||||
Number of RSUs
|
Weighted
average
grant date
fair value
|
Number of RSUs
|
Weighted
average
grant date
fair value
|
Number of RSUs
|
Weighted
average
grant date
fair value
|
|||||||||||||||||||
RSUs outstanding at the beginning of the year
|
571,625 | $ | 4.1 | 991,276 | $ | 4.1 | 1,348,452 | $ | 4.1 | |||||||||||||||
Granted
|
- | - | 47,000 | $ | 5.8 | |||||||||||||||||||
Vested
|
(281,675 | ) | $ | 4.0 | (323,650 | ) | $ | 4.1 | (262,426 | ) | $ | 4.3 | ||||||||||||
Forfeited
|
(45,750 | ) | $ | 3.9 | (96,001 | ) | $ | 4.1 | (141,750 | ) | $ | 4.3 | ||||||||||||
RSUs outstanding at the end of the year
|
244,200 | $ | 4.1 | 571,625 | $ | 4.1 | 991,276 | $ | 4.1 |
|
c.
|
In July 2014, the Company approved the grant of 250,000 stock options to its Chairman of the Board of Directors at an exercise price of $ 5.06 per share. In May 2015, the Company approved the grant of 150,000 stock options to its Chairman of the Board of Directors for his additional position as interim CEO at an exercise price of $ 6.72 per share. These options vest ratably, each quarter, over a four-year period. This grants are included in the above tables as employee grants.
|
NOTE 9:-
|
EQUITY (Cont.)
|
|
d
|
Dividends:
|
|
1.
|
In the event that cash dividends are declared by the Company, such dividends will be declared and paid in Israeli currency. Under current Israeli regulations, any cash dividend in Israeli currency paid in respect of ordinary shares purchased by non-residents of Israel with non-Israeli currency, may be freely repatriated in such non-Israeli currency, at the exchange rate prevailing at the time of repatriation. The Company does not expect to pay cash dividends in the foreseeable future.
|
|
2.
|
Pursuant to the terms of a credit line from a bank (see also note 12d), the Company is restricted from paying cash dividends to its shareholders without initial approval from the bank.
|
NOTE 10:-
|
RESTRUCTURING COSTS
|
NOTE 11:-
|
TAXES ON INCOME
|
|
a.
|
Accounting for uncertainty in income taxes:
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
Balance at beginning of year
|
$ | 1,214 | $ | 4,752 | ||||
Reductions for prior years' tax position
|
(343 | ) | (3,571 | ) | ||||
Additions for current year's tax position
|
- | 36 | ||||||
Balance at the end of year
|
$ | 871 | $ | 1,214 |
NOTE 11:-
|
TAXES ON INCOME (Cont.)
|
|
b.
|
Israeli taxation:
|
|
1.
|
Corporate tax rates:
|
|
2.
|
Tax benefits under the Law for the Encouragement of Capital Investments, 1959 ("the Law"):
|
NOTE 11:-
|
TAXES ON INCOME (Cont.)
|
|
c.
|
Income taxes on non-Israeli subsidiaries:
|
NOTE 11:-
|
TAXES ON INCOME (Cont.)
|
|
d.
|
Carryforward tax losses and credits:
|
|
e.
|
Deferred income taxes:
|
December 31,
|
|||||||||
2015
|
2014
|
||||||||
1. |
Provided in respect of the following:
|
||||||||
Carryforward tax losses
|
$ | 30,352 | $ | 26,274 | |||||
Temporary differences relating to property, equipment and intangibles
|
3,980 | 2,501 | |||||||
Other
|
7,448 | 8,517 | |||||||
Gross deferred tax assets
|
41,780 | 37,292 | |||||||
Valuation allowance
|
(36,393 | ) | (30,120 | ) | |||||
Net deferred tax assets
|
5,387 | 7,172 | |||||||
Gross deferred tax liabilities
|
|||||||||
Temporary differences relating to property, equipment and intangibles
|
(5,319 | ) | (7,103 | ) | |||||
Net deferred tax assets (foreign)
|
$ | 68 | $ | 69 | |||||
2. |
Deferred taxes are included in the consolidated balance sheets, as follows:
|
||||||||
Current assets
|
$ | 68 | $ | 69 |
NOTE 11:-
|
TAXES ON INCOME (Cont.)
|
|
3.
|
As of December 31, 2015, the Group increased the valuation allowance by approximately $ 6,273, resulting from changes in temporary differences relating to property, equipment and intangibles and from carryforward tax losses. The Company provided valuation allowance for a significant portion of the deferred tax regarding the carryforwards losses and other temporary differences that management believes is not expected to be realized in the foreseeable future.
|
|
4.
|
The functional and reporting currency of the Company and certain of its subsidiaries is the dollar. The difference between the annual changes in the NIS/dollar exchange rate causes a further difference between taxable income and the income before taxes shown in the financial statements. In accordance with ASC 740, the Company has not provided deferred income taxes on the difference between the functional currency and the tax basis of assets and liabilities.
|
|
f.
|
Reconciling items between the statutory tax rate of the Company and the effective tax rate:
|
Year ended
December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Income (loss) before taxes, as reported in the consolidated statements of operations
|
$ | (50,944 | ) | $ | 1,200 | $ | (10,332 | ) | ||||
Statutory tax rate
|
26.5 | % | 26.5 | % | 25 | % | ||||||
Theoretical tax expenses (income) on the above amount at the Israeli statutory tax rate
|
$ | (13,500 | ) | $ | 318 | $ | (2,583 | ) | ||||
Currency differences
|
1,709 | 2,545 | 1,395 | |||||||||
Tax adjustment in respect of different tax rates and "Benefitted Enterprise" status
|
(131 | ) | 1,425 | 3,041 | ||||||||
Changes in valuation allowance
|
6,273 | (14,781 | ) | (17,580 | ) | |||||||
Stock compensation relating to options per ASC 718
|
291 | 471 | 364 | |||||||||
Changes in valuation allowance related to capital gains
|
54 | (222 | ) | (2,067 | ) | |||||||
Forfeiture of carryforward tax losses
|
929 | 13,549 | 16,542 | |||||||||
Wavestream goodwill impairment
|
6,937 | - | - | |||||||||
Exempt revenues - subsidy
|
(2,573 | ) | (2,561 | ) | (1,089 | ) | ||||||
Nondeductible expenses and other differences
|
1,201 | 1,157 | 1,222 | |||||||||
$ | 1,190 | $ | 1,901 | $ | (755 | ) |
NOTE 11:-
|
TAXES ON INCOME (Cont.)
|
|
g.
|
Taxes on income included in the consolidated statements of operations:
|
Year ended
December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Current
|
$ | 1,108 | $ | 1,562 | $ | 2,046 | ||||||
Prior years
|
81 | 332 | (68 | ) | ||||||||
Deferred
|
1 | 7 | (2,733 | ) | ||||||||
$ | 1,190 | $ | 1,901 | $ | (755 | ) | ||||||
Domestic
|
$ | 679 | $ | 800 | $ | 648 | ||||||
Foreign
|
511 | 1,101 | (1,403 | ) | ||||||||
$ | 1,190 | $ | 1,901 | $ | (755 | ) |
|
h.
|
Income (loss) before taxes on income from continuing operations:
|
Year ended
December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Domestic
|
$ | (12,273 | ) | $ | (9,568 | ) | $ | (14,021 | ) | |||
Foreign
|
(38,671 | ) | 10,768 | 3,689 | ||||||||
$ | (50,944 | ) | $ | 1,200 | $ | (10,332 | ) |
NOTE 12:-
|
SUPPLEMENTARY BALANCE SHEET INFORMATION
|
|
a.
|
Other current assets:
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
VAT receivables
|
$ | 2,691 | $ | 2,755 | ||||
Prepaid expenses
|
4,765 | 1,707 | ||||||
Deferred charges
|
2,316 | 1,735 | ||||||
Tax receivables
|
1,094 | 843 | ||||||
Employees
|
96 | 215 | ||||||
Grants receivable
|
1,540 | 725 | ||||||
Advance payments to suppliers
|
2,875 | 3,611 | ||||||
Deferred taxes
|
68 | 69 | ||||||
Derivative instruments
|
- | 1,949 | ||||||
Other
|
778 | 1,151 | ||||||
$ | 16,223 | $ | 14,760 |
NOTE 12:-
|
SUPPLEMENTARY BALANCE SHEET INFORMATION (Cont.)
|
|
b.
|
Short-term bank credit:
|
Weighted average
interest rate
|
||||||||||||||||
December 31, | December 31, | |||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
%
|
||||||||||||||||
In U.S. dollars
|
1.05 | % | 2.43 | % | $ | 7,000 | $ | 15,857 |
|
c.
|
Other current liabilities:
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
Payroll and related employee accruals
|
4,815 | 6,793 | ||||||
Deferred revenue
|
4,819 | 3,987 | ||||||
Provision for vacation pay
|
4,222 | 5,101 | ||||||
Derivative instruments
|
148 | 806 | ||||||
Government authorities
|
1,167 | 1,173 | ||||||
Other
|
1,042 | 727 | ||||||
$ | 16,213 | $ | 18,587 |
|
d.
|
Long-term loans:
|
Interest rate for
|
December 31,
|
||||||||||||||||||||
2015
|
2014
|
2015
|
2014
|
||||||||||||||||||
Linkage
|
%
|
%
|
Maturity
|
||||||||||||||||||
Loans from banks:
|
|||||||||||||||||||||
(a)
|
U.S.dollars
|
4.77 | % | 4.77 | % | 2016-2022 | $ | 24,000 | $ | 28,000 | |||||||||||
(b)
|
Euro
|
EURIBOR +2.75
|
% |
EURIBOR +2.75
|
% | 2016-2020 | 1,835 | 2,534 | |||||||||||||
(c)
|
Euro
|
6.0 | % | 7.9 | % | 2016-2017 | 200 | 332 | |||||||||||||
26,035 | 30,866 | ||||||||||||||||||||
Less - current maturities
|
4,542 | 4,595 | |||||||||||||||||||
$ | 21,493 | $ | 26,271 |
|
(a)
|
The Company entered into a loan agreement with an Israeli bank. The loan is secured
by a floating charge on the assets of the Company, and is further secured by a fixed pledge (mortgage) on the Company's real estate in Israel. In addition, there are financial covenants associated with the loan. As of December 31, 2015 the Company is in compliance with these covenants.
|
NOTE 12:-
|
SUPPLEMENTARY BALANCE SHEET INFORMATION (Cont.)
|
|
(b)
|
A Dutch subsidiary of the Company entered into a mortgage and loan agreement with a German bank. The amount of the mortgage is collateralized by the subsidiary's facilities in Germany.
|
|
(c)
|
Raysat BG entered into a mortgage business loan with a Bulgarian bank. The amount of the mortgage is collateralized by Raysat BG building in Bulgaria.
|
|
e.
|
Long-term debt maturities for loans after December 31, 2015, are as follows:
|
Year ending December 31,
|
||||
2016
|
$ | 4,542 | ||
2017
|
4,530 | |||
2018
|
4,435 | |||
2019
|
4,435 | |||
2020
|
4,093 | |||
2021 and thereafter
|
4,000 | |||
$ | 26,035 |
|
f.
|
Other long-term liabilities:
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
Long-term tax accrual
|
$ | 871 | $ | 1,174 | ||||
Deferred revenue
|
15 | 32 | ||||||
Other
|
3,092 | 3,973 | ||||||
$ | 3,978 | $ | 5,179 |
NOTE 13:-
|
SELECTED STATEMENTS OF OPERATIONS DATA
|
|
a.
|
Allowance for doubtful accounts:
|
Year ended
December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Balance at beginning of year
|
$ | 2,476 | $ | 3,179 | $ | 3,602 | ||||||
Increase during the year
|
1,369 | 218 | 808 | |||||||||
Amounts collected
|
(85 | ) | (130 | ) | (235 | ) | ||||||
Write-off of bad debts
|
(1,594 | ) | (791 | ) | (996 | ) | ||||||
Balance at the end of year
|
$ | 2,166 | $ | 2,476 | $ | 3,179 |
NOTE 13:-
|
SELECTED STATEMENTS OF OPERATIONS DATA (Cont.)
|
|
b.
|
Financial expenses, net:
|
Year ended
December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Income:
|
||||||||||||
Interest on cash equivalents, bank deposits and restricted cash
|
$ | 549 | $ | 288 | $ | 411 | ||||||
Other
|
- | 1,390 | - | |||||||||
549 | 1,678 | 411 | ||||||||||
Expenses:
|
||||||||||||
Interest with respect to short-term bank credit and other
|
302 | 240 | 138 | |||||||||
Interest with respect to long-term loans
|
1,237 | 1,553 | 1,854 | |||||||||
Exchange rate differences
|
3,887 | 2,501 | 3,269 | |||||||||
Bank Charges
|
2,344 | 1,221 | 748 | |||||||||
Other
|
22 | - | 641 | |||||||||
7,792 | 5,515 | 6,650 | ||||||||||
Total financial expenses, net
|
$ | (7,243 | ) | $ | (3,837 | ) | $ | (6,239 | ) |
NOTE 14:-
|
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION
|
|
·
|
Commercial Division - provides VSAT networks, satellite communication products, small cell solutions and associated professional services and comprehensive turnkey solutions. The Commercial Division’s customers are: service providers, satellite operators, mobile network operators, telecommunication companies, and large enterprises worldwide.
|
|
·
|
Mobility Division - provides on-the-Move/on-the-Pause satellite communication products and solutions to in flight connectivity (“IFC”) service providers, system integrators, defense and homeland security organizations, as well as to other commercial entities worldwide. The division provides solutions on land, sea and air. In addition, the division includes the operations of Wavestream, whose sales are primarily to IFC integrators as well as defense integrators.
|
NOTE 14:-
|
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION (Cont.)
|
|
·
|
Services Division – provides managed network and services for rural broadband access through the Company’s subsidiaries in Peru and Colombia. The Company’s connectivity solutions have been implemented in large and national scale projects. Gilat's terrestrial and satellite networks provide Internet and telephony services to rural communities. The Company’s turnkey solutions start with supplying network infrastructure, continue through, providing connectivity and include full network support and maintenance, as well as support for applications that run on the installed network.
|
|
a.
|
Information on the reportable segments:
|
|
1.
|
The measurement of the reportable operating segments is based on the same accounting principles applied in these financial statements which includes certain corporate overhead allocations. During 2014, the Company revised the measurement of each segment, due to a new allocation of corporate overhead that was based on new key performance indicators determined by Company's management as reviewed by the Chief Operating Decision Maker (“CODM”). Applying the same method of corporate overhead allocations used in 2014 to the results of the year ended December 31, 2013 would have resulted in an operating income (loss) of $ (2,292), $ (10,738) and $ 8,937 for the Commercial, Mobility and Services Divisions, respectively.
|
Year ended
December 31, 2015
|
||||||||||||||||
Commercial
|
Mobility
|
Services
|
Total
|
|||||||||||||
Revenues
|
100,935 | 41,112 | 55,496 | 197,543 | ||||||||||||
Cost of Revenues
|
63,425 | 30,715 | 49,178 | 143,318 | ||||||||||||
Impairment of long lived assets
|
- | - | 10,137 | 10,137 | ||||||||||||
Gross profit (loss)
|
37,510 | 10,397 | (3,819 | ) | 44,088 | |||||||||||
Research and development, net
|
14,175 | 8,237 | - | 22,412 | ||||||||||||
Selling and marketing
|
16,839 | 6,947 | 1,037 | 24,823 | ||||||||||||
General and administrative
|
6,622 | 6,271 | 5,751 | 18,644 | ||||||||||||
Restructuring costs
|
1,078 | 421 | 9 | 1,508 | ||||||||||||
Goodwill impairment
|
- | 20,402 | - | 20,402 | ||||||||||||
Operating loss
|
(1,204 | ) | (31,881 | ) | (10,616 | ) | (43,701 | ) | ||||||||
Financial expenses, net
|
(7,243 | ) | ||||||||||||||
Loss before taxes
|
(50,944 | ) | ||||||||||||||
Taxes on income
|
1,190 | |||||||||||||||
Loss from continuing operations
|
(52,134 | ) | ||||||||||||||
Loss from discontinued operations
|
(200 | ) | ||||||||||||||
Loss
|
(52,334 | ) | ||||||||||||||
Depreciation and amortization expenses
|
4,546 | 7,322 | 3,204 | 15,072 |
NOTE 14:-
|
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION (Cont.)
|
Year ended
December 31, 2014
|
||||||||||||||||
Commercial
|
Mobility
|
Services
|
Total
|
|||||||||||||
Revenues
|
130,306 | 54,817 | 50,010 | 235,133 | ||||||||||||
Cost of Revenues
|
77,587 | 37,023 | 36,888 | 151,498 | ||||||||||||
Gross profit
|
52,719 | 17,794 | 13,122 | 83,635 | ||||||||||||
Research and development, net
|
17,084 | 8,074 | - | 25,158 | ||||||||||||
Selling and marketing
|
23,401 | 7,809 | 1,327 | 32,537 | ||||||||||||
General and administrative
|
7,808 | 5,961 | 7,134 | 20,903 | ||||||||||||
Operating income (loss)
|
4,426 | (4,050 | ) | 4,661 | 5,037 | |||||||||||
Financial expenses, net
|
(3,837 | ) | ||||||||||||||
Income before taxes
|
1,200 | |||||||||||||||
Taxes on income
|
1,901 | |||||||||||||||
Loss from continuing operations
|
(701 | ) | ||||||||||||||
Loss from discontinued operations
|
(795 | ) | ||||||||||||||
Loss
|
(1,496 | ) | ||||||||||||||
Depreciation and amortization expenses
|
4,885 | 8,220 | 2,846 | 15,951 |
Year ended
December 31, 2013
|
||||||||||||||||
Commercial
|
Mobility
|
Services
|
Total
|
|||||||||||||
Revenues
|
141,576 | 48,211 | 45,079 | 234,866 | ||||||||||||
Cost of Revenues
|
94,966 | 33,773 | 26,471 | 155,210 | ||||||||||||
Gross profit
|
46,610 | 14,438 | 18,608 | 79,656 | ||||||||||||
Research and development, net
|
17,200 | 10,700 | - | 27,900 | ||||||||||||
Selling and marketing
|
22,759 | 8,139 | 1,316 | 32,214 | ||||||||||||
General and administrative
|
9,973 | 7,744 | 5,354 | 23,071 | ||||||||||||
Restructuring costs
|
406 | 158 | - | 564 | ||||||||||||
Operating income (loss)
|
(3,728 | ) | (12,303 | ) | 11,938 | (4,093 | ) | |||||||||
Financial expenses, net
|
(6,239 | ) | ||||||||||||||
Loss before taxes
|
(10,332 | ) | ||||||||||||||
Tax benefit
|
(755 | ) | ||||||||||||||
Loss from continuing operations
|
(9,577 | ) | ||||||||||||||
Loss from discontinued operations
|
(8,320 | ) | ||||||||||||||
Loss
|
(17,897 | ) | ||||||||||||||
Depreciation and amortization expenses
|
4,996 | 8,469 | 4,094 | 17,559 |
NOTE 14:-
|
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION (Cont.)
|
|
b.
|
Revenues by geographic areas:
|
Year ended
December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
South America and Central America
|
$ | 100,443 | $ | 110,825 | $ | 84,048 | ||||||
Asia and Asia Pacific
|
47,843 | 51,983 | 91,616 | |||||||||
North America
|
28,242 | 41,951 | 26,155 | |||||||||
Europe
|
16,101 | 16,393 | 23,096 | |||||||||
Africa
|
4,914 | 13,981 | 9,951 | |||||||||
$ | 197,543 | $ | 235,133 | $ | 234,866 |
|
c.
|
Revenues from a major Service Division customer located in Peru accounted for 11% of the total consolidated revenues for the year ended December 31, 2015.
During 2014, the Group did not have any customer generating revenues exceeding 10% of the Group's total revenues.
Revenues from a major Commercial Division customer located in Australia accounted for 21% of total consolidated revenues for the year ended December 31, 2013.
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
Israel
|
$ | 64,628 | $ | 66,457 | ||||
Latin America
|
4,524 | 11,932 | ||||||
United States
|
1,721 | 1,999 | ||||||
Europe
|
9,987 | 9,486 | ||||||
Other
|
1,103 | 1,019 | ||||||
$ | 81,963 | $ | 90,893 |
|
*)
|
In addition, as of December 31, 2014, the Company had other long-lived assets in Latin America in the amount of $11,834, which are presented as “Other Long-Term Receivables” in the balance sheet. These assets, along with property and equipment related to the Company’s project in Colombia, were fully impaired during the year ended December 31, 2015 (see note 1c).
|
NOTE 15:-
|
RELATED PARTY BALANCES AND TRANSACTIONS
|
Year ended
December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Cost of revenues of products
|
$ | 2,915 | $ | 4,876 | $ | - |
December 31,
|
||||||||
2015
|
2014
|
|||||||
Accrued expenses
|
$ | 339 | $ | 846 | ||||
Trade payable
|
$ | 1,170 | $ | - |
NOTE 16:-
|
SUBSEQUENT EVENTS
|
|
1.
|
Covenants.
The Borrower shall maintain the following financial ratios and conditions:
|
|
(i)
|
Borrower’s working capital shall not be less than $110 million and shall not be less than 35% of Borrower’s total capitalization (excluding advance payment received from a customer in an amount exceeding $40 million);
|
|
(ii)
|
The ratio of the Borrower’s aggregate financing liabilities, net, to EBITDA shall not exceed 3.5x.
|
|
(iii)
|
The ratio of Borrower’s aggregate financing liabilities (other than excluded loans) to working capital shall not exceed 70%; and
|
|
(iv)
|
Borrower’s cash shall not be less than $18 million.
|
|
2.
|
Borrower covenants not to effect any change of control or restructuring without prior approval of the Lender (subject to certain exceptions). In case of a breach of the foregoing, which is not cured within a defined cure period, the outstanding amount of all outstanding loans will become immediately due and payable.
|
|
3.
|
Borrower or any of its subsidiaries shall not create any pledge on their assets to the benefit of any third party. Notwithstanding, a Borrower’s subsidiary may create a pledge for securing amounts of up to $10 million in the aggregate, and pledges securing up to $5 million in debts owed to suppliers in connection with equipment purchased by Borrower.
|
|
-
|
Borrower shall not guaranty any liability of any third party (other than subsidiaries) without Lender’s prior consent.
|
|
-
|
In the event Borrower provides a financial institution with terms more favorable than those in this Letter of Undertaking, such terms shall automatically apply to Borrower.
|
|
4.
|
This Letter of Undertaking replaces the letter of commitment delivered by the Borrower on December 12, 2010.
|
|
1.
|
Exclusion for factoring arrangements:
|
|
-
|
Borrower shall be entitled to enter into factoring arrangements in the ordinary course of business in an aggregate amount that does not exceed $10 million.
|
|
-
|
Borrower shall be entitled to create pledges securing up to $5 million in debts owed to suppliers in connection with equipment purchased by Borrower.
|
|
2.
|
Options and securities of the borrower:
|
|
-
|
Borrower may issue securities convertible into the Borrower’s shares, without obtaining Lender’s prior approval, to employees, advisors and directors, with a limit of 18% of the Borrower’s issued and outstanding share capital on a fully diluted basis.
|
|
-
|
Borrower may issue securities convertible into the Borrower’s shares, without obtaining Lender’s prior approval, to investors, with a limit of 10% of the Borrower’s issued and outstanding share capital on a fully diluted basis.
|
1.1.
|
FITEL is a fund for the provision of universal access, meaning access in the national territory to a set of essential telecommunications services, capable of transmitting voice and data, which has, among its objectives, reducing the gap in access to telecommunications services in rural areas and in places considered of social interest.
|
1.2.
|
By Law No. 28900 was granted to FITEL the status of legal entity of public law. FITEL is assigned to the Transport and Communications Sector. The above mentioned law was regulated by Supreme Decree No. 010-2007 MTC.
|
1.3.
|
The Regulation for the Administration and Functions of the Telecommunications Investment Fund - FITEL, approved by Supreme Decree No. 036-2008-MTC
|
1.4.
|
The "Guidelines of the policy for the opening of the telecommunications market in Peru", approved by Supreme Decree No. 020-98-MTC, published on August 5
th
, 1998 and its amendments.
|
1.5.
|
Also, the "Guidelines of policies to promote greater access to Public Telecommunications Services in rural areas and places of preferential social interest", approved by Supreme Decree No. 049-2003-MTC published on August 17
th
, 2003, indicate that its goal is to accelerate the incorporation, under equal conditions, of populations in rural areas and of social interest, to the opportunities offered by Information Technology and Communication, promoting their integration into the public telecommunications network.
|
1.6.
|
By Supreme Decree No. 024-2008-MTC, published on August 16
th
, 2008, was approved the General Regulatory Framework to promote the development of Public Telecommunications Services in rural areas and places of social interest.
|
1.7.
|
Ministerial Resolution No. 224-2012 MTC/01, published on May 12
th
, 2012, whereby the Institutional Strategic Plan of Transportation and Communications Sector was approved, which establishes as one of the specific objectives "to promote the deployment of telecommunications infrastructure and services that enable connectivity and virtual integration of the country, prioritizing areas of social interest and borders"; specifying as target to achieve by 2016, that Peru has 100% districts served by at least one telecommunications service.
|
1.8.
|
Law N° 29904, Law for Promotion of Broadband and Construction of the National Fiber Optic Backbone Network stated as a public necessity and national interest, the construction of a National Fiber Optic Backbone Network which gathers together all the capitals of the provinces of the country and the deployment of high-capacity networks that integrate all districts to enable broadband connectivity fixed and/or mobile and mass distribution across the country, in terms of competition.
|
1.9.
|
With Supreme Decree No. 014-2013-MTC was approved the Regulation of Law No. 29904 – Law for Promotion of Broadband and the Construction of the National Fiber Optic Backbone Network.
|
1.10.
|
Law No. 30228, amending Law No. 29022 –Law to expand telecommunications infrastructure, called Law to enhance the expansion of Telecommunications Infrastructure.
|
1.11.
|
With Official Letter No. 020-2015-MTC/24, dated January 07
th
2015, PROINVERSIÓN was commissioned to prepare the TENDER for selecting the Operator who will be responsible for implementing the project “Installation of Broadband for Comprehensive Connectivity and Social Development of the Cusco Region”
|
1.12.
|
Resolutions by the Board of OSIPTEL s No. 003-2015-CD / OSIPTEL and 004-2015-CD / OSIPTEL published dated January 11, 2015, the top rates of the transport service and Internet access were established respectively, corresponding to regional projects Fiber Optic Backbone Network.”
|
1.13.
|
Supreme Resolution No. 038-2015-EF, published on august 02th 2015, ratified the agreement that determined the modality under which the private investment promotion in the Project "Installation of Broadband for Comprehensive Connectivity and Social Development of the Cusco Region”, will be established in paragraph a) of Article 2 of Legislative Decree No. 674.
|
1.14.
|
Supreme Resolution No. 042-2015-EF, published on August 22, 2015, by which the agreement adopted was ratified at the meeting of the Board of PROINVERSIÓN of July 21, 2015, which approved the Plan of Promotion of private investment projects "Installing Broadband Connectivity for Comprehensive Social Development of the Tumbes Region," "Installing Broadband Connectivity for Comprehensive Social Development of the Piura Region", "Installing Integrated Broadband Connectivity and Social Development of the Cajamarca region" and " Installing Broadband Connectivity for Comprehensive Development and Social Cusco region".
|
1.15.
|
According to PROINVERSION Agreement No. 692-2-2015-PC, dated September 1
st,
2015 the Governing Council decided to approve Proinversion Public Competition terms and conditions of the process of promoting private investment for the execution models Projects: "Installing Broadband Connectivity for Comprehensive Social Development of the Tumbes region, " "Installing Broadband Connectivity for Comprehensive and Social development of the Piura region " Installing Broadband Connectivity for Comprehensive and Social development of the Cajamarca region "and" Installing Broadband Connectivity for Comprehensive and social Development of the Cusco region..
|
2.1
|
MINUTES OF AWARD OF THE NETWORK ACCESS ASSETS: It is the document prepared by FITEL whereby the CONTRACTOR transfers ownership of NETWORK ACCESS ASSETS to FITEL, AT THE END OF FINANCING AGREEMENT or when any assumption of Section Nineteenth occurs. That document will be signed bv the Contractor and FITEL. The right to property includes ground, underground and overground according to the statement by the Peruvian Civil Code.
|
2.2
|
MINUTES OF AWARD OF TRANSPORTATION NETWORK ASSETS: The document, drafted by FITEL, through which the CONTRACTOR transfers to MTC, the ownership and control of the TRANSPORT NETWORK ASSETS, once the Concession Agreement has been signed between the MTC and the Concessionaire for the operation of the TRANSPORTATION NETWORK or when any of the assumptions of the nineteenth Clause of the FINANCING AGREEMENT occur. This act will be subscribed between the CONTRACTOR and FITEL who will subscribe it in representation of MTC. The right to property includes ground, underground and overground according to the statement by the Peruvian Civil Code.
|
2.3
|
MINUTES OF CONFORMITY OF INSTALLATION AND TESTING OF SERVICES OF ACCESS NETWORK: It is the document signed by the CONTRACTOR and FITEL by which the former accepts the results reported in the ACCESS NETWORK SUPERVISION REPORT corresponding to the installations performed. Also, with the signing of this document, compliance with the conditions laid down in the TECHNICAL SPECIFICATIONS, corresponding to the ACCESS NETWORK are certified. The model of the minutes is shown in Exhibit No. 4, annex 8B of the Terms and condition sand may be amended, being FITEL who finally determines its final content.
|
2.4
|
MINUTES OF CONFORMITY OF THE INSTALLATION AND TESTING OF SERVICES OF THE TRANSPORTATION NETWORK: The document prepared by FITEL and signed by the CONTRACTOR and FITEL by which the former accepts the results stated in the TRANSPORTATION NETWORK SUPERVISION REPORT corresponding to the installations made. This document also certifies compliance with the conditions laid down in the TECHNICAL SPECIFICATIONS for total TRANSPORTATION NETWORK. The model of the minutes shown in Exhibit No. 5 of the Annex 8A of the terms and condition sand may be modified, being FITEL who finally determines its final content.
|
2.5
|
INSTALLATION MINUTES OF NETWORK ACCESS: Is the document, working as an Affidavit, that indicates and credits compliance with the installation and operation of any infrastructure, equipment, hardware, software and other information needed to provide access to Internet and Intranet access offered by the ACCESS NETWORK. This act is made up of rules contained in Appendix 2-A and 2-B of Exhibit 8-B of the bases, which may be amended, being FITEL who finally determines its definitive content. It is signed by the CONTRACTOR, as well as the people mentioned in the appendixes.
|
2.6
|
INSTALLATION MINUTES OF TRANSPORTATION NETWORK: Is the document that credits and indicates the compliance with the installation and operation of the major components of the TRANSPORTATION NETWORK. It is made by the CONTRACTOR for each node, for each section of fiber (link for pair of nodes) as well as for the Network Operations Center (NOC) and MAINTENANCE CENTER. The INSTALLATION MINUTES OF TRANSPORTATION NETWORK are signed by the CONTRACTOR. It is also an AFFIDAVIT.
|
2.7
|
EXPANSION OF THE AWARDED PROJECT: Is the incorporation of new BENEFICIARY LOCALITIES and/or district capitals, in the area of
influence of the PROJECT
,
which will involve additional subsidy of up to 20% of the FINANCING AWARDED, prior technical appraisal and approval of FITEL. Regarding the ACCESS NETWORK, this extension may be requested by any of the PARTIES within the ACCESS NETWORK INSTALLATION STAGE and regarding the TRANSPORTATION NETWORK within the first eight months of the TRANSPORTATION NETWORK INVESTMENT STAGE.
|
2.8
|
ACCESS NETWORK ASSETS: These are the assets comprised of metal structures, self-supporting towers, bases foundation, the lot where those structures are placed and all PASSIVE ELEMENTS which make up the NETWORK ACCESS and will be owned and domain of FITEL after the signing of MINUTES OF AWARD OF NETWORK ACCESS ASSETS. The active equipment is owned and domain of the CONTRACTOR.
|
2.9
|
TRANSPORTATION NETWORK ASSETS: Means all real or personal property that integrates the TRANSPORTATION NETWORK, according to the provisions of the TECHNICAL SPECIFICATIONS of the TRANSPORT NETWORK. These assets will be owned by MTC after the signing of MINUTES OF AWARD OF THE TRANSPORTATION NETWORK ASSETS between the CONTRACTOR and FITEL, who will subscribe the act representing the MTC.
|
2.10
|
CLOSURE OF THE FINANCING AGREEMENT: It’s the process by which the PARTIES agree the completion of their contractual rights and obligations. This procedure will take place during the second half of OPERATION PERIOD; as such, it will be understood as a stage within this period.
|
2.11
|
FINANCING AGREEMENT: It is the legal relationship held between FITEL and the CONTRACTOR, whose purpose is to regulate:
|
|
a)
|
The installation of the TRANSPORTATION NETWORK and ACCESS NETWORK according to what is stated in the relevant TECHNICAL SPECIFICATIONS;
|
|
b)
|
The operation and maintenance of the ACCESS NETWORK according to what is stated in the TECHNICAL SPECIFICATIONS;
|
|
c)
|
The implementation of CAPACITY BUILDING; and
|
|
d)
|
Compliance with the Technical Offer of the Contractor
|
|
e)
|
the use of funding allocated for the implementation of the project awarded
|
|
f)
|
The disbursement of the awarded financing by the Contractor to FITEL
|
2.12
|
DAYS: It should be understood as calendar days (working days, non-working and holidays), unless expressly stipulated otherwise.
|
2.13
|
WORKING DAYS: It should be understood the days other than Saturday, Sunday or nonworking holiday in the city of Lima (including non-working days for the public administration). Also understood as holidays, the regional holidays stablished by order of governmental authority;
|
2.14
|
The CONTRACTOR: Is the legal entity, domiciled in the country awarded the contest or the legal person created by the consortium or legal person not domiciled in the country, which won the contest, awarded the tender with whom FITEL signs this FINANCING AGREEMENT and who will implement the AWARDED PROJECT.
|
2.15
|
INSTALLATION STAGE: The time in which the CONTRACTOR displays the infrastructure, equipment and other items in the ACCESS NETWORK and TRANSPORTATION NETWORK fulfilling the provisions of the TECHNICAL SPECIFICATIONS. The deadline for completion of this stage is the indicated in the Technical Proposal, which shall not be less than ten (10) months nor more than ten (10) months since the DATE OF CLOSURE.
|
2.16
|
DATE OF CLOSURE: The date, place and time to be carried out the acts set forth in Paragraph 11.3 of the TERMS AND CONDITIONS.
|
2.17
|
FINANCING AWARDED: Is the amount of the FINANCING granted for the TRANSPORTATION NETWORK and ACCESS NETWORK that corresponds to the AWARDED PROJECT, as provided in the Technical Proposal in accordance with the TECHNICAL SPECIFICATIONS. This includes all applicable taxes and contributions to the MTC, FITEL and OSIPTEL. (which are established in the TUO of the Telecommunications Act approved by Supreme Decree No. 013-93-TCC, in the TUO of the General Regulation of the Telecommunications Act, approved by Supreme Decree No. 020-2007-MTC and its amendments, such as fee for commercial exploitation of service and contribution to FITEL, as well as the contribution by regulation to OSIPTEL established by Law No. 27332 in accordance with Supreme Decree No. 103-2003-PCM and Supreme Decree No. 012-2002-PCM, as amended, or the rules that substitute.
|
2.18
|
ACCESS NETWORK FINANCING: Is the non-refundable amount recorded in the ECONOMIC PROPOSAL expressed in US$ and which FITEL must deliver to the CONTRACTOR as part of its obligations as stipulated in the FINANCING AGREEMENT. This includes the necessary financing for the CONTRACTOR to acquire, install, operate and maintain and run the THE ACCESS NETWORK and implements the CAPACITY BUILDING, providing all the services involved in the Technical Proposal in accordance with the TECHNICAL SPECIFICATIONS. This includes all applicable taxes and contributions to the MTC, OSIPTEL and FITEL. (which are established in the TUO of the Telecommunications Act approved by Supreme Decree No. 013-93-TCC, in the TUO of the General Regulation of the Telecommunications Act, approved by Supreme Decree No. 020-2007-MTC and its amendments, such as fee for commercial exploitation of service and contribution to FITEL, as well as the contribution by regulation to OSIPTEL established by Law No. 27332 in accordance with Supreme Decree No. 103-2003-PCM and Supreme Decree No. 012-2002-PCM, as amended, or the rules that substitute)
|
2.19
|
FINANCING OF THE TRANSPORTATION NETWORK: Is the non-refundable amount recorded in the ECONOMIC PROPOSAL expressed in US$ and which FITEL shall deliver to the CONTRACTOR as part of its obligations as stipulated in the FINANCING AGREEMENT. Includes the necessary financing for the CONTRACTOR to purchase and install the TRANSPORTATION NETWORK in line with the TECHNICAL SPECIFICATIONS. This includes all taxes and contributions and contributions to the MTC, OSIPTEL, FITEL (which are established in the TUO of the Telecommunications Act, approved by Supreme Decree No. 013-93TCC, in the TOU of the General Regulations of the Telecommunications Act fr, approved by Supreme Decree No. 020-2007-MTC, as amended, such as commercial fee for service operation and the contribution to FITEL, as well as the contribution by regulation OSIPTEL established in Act No. 27332 in accordance with the Supreme Decree No. 103-2003-PCM and Supreme Decree No. 012-2002-PCM, as amended or regulations that substitute
|
2.20
|
ADVANCE PAYMENT GUARANTEE: The joint and several, unconditional, irrevocable letter of guarantee, without benefit of excussion or division, and automatic enforceable on behalf of FITEL, that the CONTRACTOR shall deliver on the CLOSING DATE to ensure the correct use of first disbursement of the FINANCING OF THE ACCESS NETWORK and the TRANSPORT NETWORK in accordance with the provisions of this FINANCING AGREEMENT. It must be issued in accordance with the conditions established in the TERMS AND CONDITIONS.
|
2.21
|
PERFORMANCE BOND OF THE FINANCING AGREEMENT: Is the joint and several, unconditional, irrevocable letter of guarantee, without benefit of excussion or division, and of automatic enforceable on behalf of FITEL, that the CONTRACTOR shall deliver at the CLOSING DATE, in order to support the compliance with obligations under the FINANCING AGREEMENT. It must be issued in accordance with the conditions established in the TERMS AND CONDITIONS.
|
2.22
|
MANDATORY PAID INSTITUTION: Is the public institution referred to in Exhibit Nº 8B of the TERMS AND CONDITIONS, in which the CONTRACTOR undertakes to install the necessary equipment, according to the conditions established in the TECHNICAL SPECIFICATIONS and provide services of the AWARDED PROJECT during the term of the FINANCING AGREEMENT.
|
2.23
|
APPLICABLE LAW: These are the standards listed in Paragraph 1.4. of the TERMS AND CONDITIONS, including its amendments, and any other according to the Peruvian laws applicable.
|
2.24
|
BENEFICIARY LOCALITIES: are the locations where the CONTRACTOR, according to the terms of this FINANCING AGREEMENT, must install, operate and maintain the services offered in AWARDED PROJECT. These areas are included in the list contained in Exhibit 1 of this FINANCING AGREEMENT. The ADDITIONAL LOCALITIES offered by the CONTRACTOR become BENEFICIARY LOCALITIES from the moment of the signing of the FINANCING CONTRACT.
|
2.25
|
MTC: Is the Ministry of Transportation and Communications.
|
2.26
|
APPLICABLE REGULATIONS: These is the group of legal dispositions that affect the direct or indirect the FINANCING AGREEMENT including Peru's Constitution, laws, rules having the force of law, the supreme decrees, regulations, directives and resolutions, as well as any other that under the legal system of the Republic of Peru, is applicable, which will be mandatory for this Bid Also, it includes any modification or norms that those provisions might have.
|
2.27
|
PARTY: FITEL or the CONTRACTOR, as applicable.
|
2.28
|
PARTIES: FITEL and the CONTRACTOR equally.
|
2.29
|
INVESTMENT PERIOD OF THE ACCESS NETWORK: It is the period, the maximum length is twelve (12) months from the CLOSING DATE, comprising the activities referred to in INSTALLATION STAGE and supervision activities to approve the installations made, referred to in the TECHNICAL SPECIFICATIONS OF THE ACCESS NETWORK; finishing with the signing of the MINUTES OF CONFORMITY OF INSTALLATION AND TESTING OF SERVICES OF THEACCESS NETWORK.
|
2.30
|
INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK: is the period, which maximum length is twelve (12) months from the CLOSING DATE, comprising the activities covered by the INSTALLATION STAGE and monitoring activities to give according to installations made as referred to in the TECHNICAL SPECIFICATIONS OF THE TRANSPORTATION NETWORK; culminating with the signing of the MINUTES OF CONFORMITY OF INSTALLATION AND TESTING OF SERVICES OF THE TRANSPORTATION NETWORK.
|
2.31
|
PERIOD OF OPERATION: The duration of one hundred twenty (120) months from the day following the completion of the ACCESS NETWORK NVESTMENT PERIOD. In which the CONTRACTOR will operate and maintain the ACCESS NETWORK to ensure its operation and provision of services comprising the AWARDED PROJECT. In this period of time, the services will be provided commercially.
|
2.32
|
PROINVERSIÓN: Private Investment Promotion Agency, an organization referred to in Law No. 28660 and the Ministerial Resolution No. 083-2013-EF/10 or regulations that substitute them.
|
2.33
|
PROTOCOL ACCEPTANCE TESTING FACILITIES: Document prepared by the CONTRACTOR containing the procedures to run to verify proper installation and operation of the BENEFICIARY LOCALITIES services, servers, applications, maintenance centers, customer service centers, center network management, data center nodes, among others that are part of the ACCESS NETWORK.
|
2.34
|
AWARDED PROJECT: Is the PROPOSAL of the APT BIDDER declared the winner of the Award by the COMMITTEE
|
2.35
|
ACCESS NETWORK: The telecommunications network implemented according to the criteria in the appropriate TECHNICAL SPECIFICATIONS, which allows the end user to access the public telecommunications services and access to intranet of the AWARDED PROJECT, using the TRANSPORTATION NETWORK. According to the section 19.1 under the Law Nº29904
|
2.36
|
TRANSPORTATION NETWORK: This is the high-speed network of availability and reliability, designed based on the laying of fiber optic redundancy scheme and points of presence in the district capitals, as provided in Section 7.4 of Article 7 of law No. 29904.
|
2.37
|
UIT: It is the Tax Unit
|
3.1.
|
The CONTRACTOR states that is a legal entity duly incorporated under the regulations of the Republic of Peru, having proved its existence and its representation according to law and is duly authorized and able to assume the obligations under the FINANCING AGREEMENT to exercise technical, commercial and financial activities, in the implementation of the AWARDED PROJECT.
|
3.2.
|
The CONTRACTOR acknowledges and agrees that it is the decisive reason of FITEL for the celebration of the FINANCING AGREEMENT that, in the terms stipulated therein, in their Technical Proposal and in the TECHNICAL SPECIFICATIONS, the CONTRACTOR must perform the design, procurement and installation of networks, equipment and access to Internet and Intranet, to implement CAPACITY BUILDING, and keep them in operational terms, performing the corresponding preventive and corrective maintenance, so that the Peruvian State has the deployed optical fiber in the case of TRANSPORTATION NETWORK and that the BENEFICIARY LOCATIONS and MANDATORY PAID INSTITUTIONS have the infrastructure and equipment properly installed and fully operational in the case of the ACCESS NETWORK.
|
3.3.
|
The CONTRACTOR has the authorization certificates that allow it to provide the services to which it is bound according to the TECHNICAL SPECIFICATIONS or alternatively, it has initiated the process of only concession for the provision of public telecommunications services for this purpose as stated in the TERMS AND CONDITIONS.
|
3.4.
|
The CONTRACTOR is committed to install the networks OF THE AWARDED CONTRACT and provide the services in the quality conditions established in the TECHNICAL SPECIFICATIONS.
|
3.5.
|
The CONTRACTOR states that its representative, who signs the FINANCING AGREEMENT, is duly authorized, that its subscription has been authorized by its Board of Directors (or the highest authority of the company) and, with his signature, requires no further action or approval to ensure their validity and to comply with the obligations in the same.
|
3.6.
|
The CONTRACTOR states that for the subscription of the FINANCING AGREEMENT and compliance with contractual obligations, it does not require legal authorization or regulatory authority of any foreign country in which any of its shareholders is incorporated or has its principal place of business and which is not contrary to any law or regulation in such country.
|
3.7.
|
The CONTRACTOR states that to fulfill the FINANCING AGREEMENT there are no:
|
|
•
|
Laws, statutes, regulations, rules, orders, judgments, awards, resolutions, administrative sanctions or restrictions by any authority, provisions in the statutes or regulations of the CONTRACTOR, covenants, contracts, agreements or other acts or events of any nature that are binding on the CONTRACTOR or affecting its affiliates or subsidiaries or their property or prohibit, restrict, limit, oppose, affect, impair, or in any way impede the execution and performance of the terms and conditions of the FINANCING AGREEMENT.
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•
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Neither actions, suits, investigations, litigation or proceedings pending or threatened before courts, arbitral court or governmental authority; that prohibit, restrict, limit, oppose, affect, impair, or in any way prevent the execution and performance of the terms and conditions of the FINANCING AGREEMENT.
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3.8.
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The CONTRACTOR acknowledges and agrees that the nature and regime of the FINANCING AGREEMENT determines that, although during their term changes in the APPLICABLE REGULATIONS occur, including changes in the regulation of the telecommunications sector and the tax regime affecting its business and/or economic performance, such circumstances do not give you the right to claim or requests for modifications to the FINANCING AGREEMENT under the assumptions of economic-financial hardship or other provision of legal concepts of a similar nature, either before the FITEL, its officers or other State agency.
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3.9.
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The CONTRACTOR recognizes that directly or indirectly has the economic, financial and technical capacity to perform the obligations under the FINANCING AGREEMENT and other obligations under the TECHNICAL SPECIFICATIONS and those obligations arising from the PROPOSAL under which was declared AWARDEE of the PROJECT: “INSTALLATION OF BROADBAND FOR COMPREHENSIVE CONNECTIVITY AND SOCIAL DEVELOPMENT OF THE CUSCO REGION”
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3.10.
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The CONTRACTOR states having no impediment to contract pursuant to Article 1366º regulated by the Civil Code and that is not administratively sanctioned with temporary or permanent disqualification from exercising their rights to contract with the State.
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3.11.
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In the event that, after the signing of the FINANCING AGREEMENT, false statements in the preceding paragraphs are established, it will be terminated automatically, by operation of law, applying the provisions of the nineteenth Clause, proceeding FITEL to enforce the guarantees to be granted under this FINANCING AGREEMENT.
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3.12.
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The CONTRACTOR agrees to transfer ownership and control of the TRANSPORTATION NETWORK ASSETS on behalf of the MTC, with the signing of MINUTES OF AWARD OF THE TRANSPORTATION NETWORK ASSETS. This act will be subscribed between THE CONTRACTOR and FITEL, who will subscribe it representing MTC.
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3.13.
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The CONTRACTOR is obliged to transfer the ownership and control of the ACCESS NETWORK ASSETS in favor of the FITEL with the signing of the MINUTES OF AWARD OF THE NETWORK ACCESS ASSETS.
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3.14.
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The costs generated until the date the transfer mentioned in the preceding paragraph will be borne by THE CONTRACTOR. Costs incurred from the day after the transfer has become effective shall be borne by the new owner hired over the operation of the ACCESS NETWORK and by the selected operator of the TRANSPORT NETWORK.
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3.15.
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The necessary administrative expenses for the transfer shall be borne by THE CONTRACTOR.
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3.16.
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The CONTRACTOR states that it has conducted its own studies, research, projections and therefore is considered knowledgeable of all the elements needed to make the decision to assume fully its obligations under the FINANCING AGREEMENT.
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3.17.
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The CONTRACTOR acknowledges the areas where the networks will be installed, so it expressly disclaims making any claim or action against FITEL or other competent authority derived from inadequate site conditions or any other circumstances related the subject matter of this FINANCING AGREEMENT.
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3.18.
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The CONTRACTOR admits it has developed its business plan taking into account the studies and assumptions it deemed appropriate, according to which it has prepared his TECHNICAL and ECONOMIC PROPOSAL and required the FUNDING AWARDED. It also states that the business plan has not been known by FITEL or PROINVERSIÓN, which shall have no responsibility for any difference between it and the actual results of the implementation of the AWARDED PROJECT. In that sense, the CONTRACTOR declares that it assumes the risk arising from the differences between its business plan and actual results of the implementation of the AWARDED PROJECT.
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3.19.
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The CONTRACTOR acknowledges and agrees that the total amount of the FINANCING AWARDED, is sufficient to fulfill the obligations of the FINANCIAL AGREEMENT and those derived from the PROPOSAL due to which it became the AWARDEE of the PROJECT “Installation of Broadband for Comprehensive Connectivity and Social Development of the Cusco Region "
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3.20.
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The CONTRACTOR, by this statement and only in the case of ACCESS NETWORK, undertakes to continue the operation and maintenance of the AWARDED PROJECT in all cases of termination of the FINANCING AGREEMENT under the terms stated in Clauses of the FINANCING AGREEMENT; this statement constitutes a unilateral promise referred to under Article 1956 of the Peruvian Civil Code.
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3.21.
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The CONTRACTOR acknowledges and agrees that FITEL has taken note of the statement referred to in the preceding paragraph and that the signing of this FINANCING AGREEMENT is not only an express consent but a prior agreement to the second paragraph of Article 1956 and Article 1957 of the Peruvian Civil Code, respectively, so that said unilateral promise has been validly made
and is fully enforceable.
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3.22.
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The CONTRACTOR states that the CLOSING DATE, its capital stock is the one established in the TERMS AND CONDITIONS. and, on that date, has fully subscribed the total of shares forming its share capital, having paid at least 25% of the nominal value of the shares, as applicable, in accordance with Article 52 of the General Law Corporations, Law N ° 26887
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4.1.
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The signing of the FINANCING AGREEMENT and compliance with the obligations and rights of FITEL in it shall conform to the APPLICABLE RULES and regulations governing its operation and in general, the legal system of Peru.
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4.2.
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FITEL states that to the subscription of the FINANCING AGREEMENT has the knowledge and authorization of its governing bodies and that its legal representative has sufficient skills and powers to celebrate it, so as to generate obligations and valid, binding and enforceable rights for both parties
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4.3.
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FITEL states that the AWARDED FUNDING and, if applicable, the EXTENSION of the AWARDED PROJECT is duly authorized and has sufficient economic resources for disbursements agreed in the FINANCING AGREEMENT.
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4.4.
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FITEL states to have the skills, legal and operational instruments for making the necessary supervision and that, as long as the CONTRACTOR fulfill its obligations, shall authorize and make disbursements under the FINANCING AGREEMENT.
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4.5.
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The supervision corresponding to the OPERATION PERIOD of the ACCESS NETWORK shall be made in accordance to the 17
th
clause of this FINANCING AGREEMENT. After such deadline has arrived, the legal regime for supervision will be established in the Concession Agreement of the CONTRACTOR, according to APPLICABLE RULES.
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4.6.
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FITEL acknowledges and accepts that it has become aware of the statement of THE CONTRACTOR referred to in paragraph 3.20 of the Third Clause and the signing of this FINANCING AGREEMENT is not only express but also prior agreement referred to the second paragraph of Article 1956 and Article 1957 of the Peruvian Civil Code, respectively, so that unilateral promise has been validly made
and is fully enforceable.
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a)
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The installation of the TRANSPORTATION NETWORK and ACCESS NETWORK according to what is stated in the TECHNICAL SPECIFICATIONS OF THE PROJECT;
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b)
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The operation and maintenance of the ACCESS NETWORK according to what is stated in the TECHNICAL SPECIFICATIONS OF THE PROJECT, providing access to the Internet and intranet to the BENEFICIARY LOCALITIES and MANDATORY PAID INSTITUTIONS contained in Exhibit No. 1 of this FINANCING AGREEMENT,;
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c)
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The implementation of CAPACITY BUILDING; defined as such in the TERMS AND CONDITIONS, and
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d)
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The use of FUNDING AWARDED for implementing the Project.
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6.1.
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The FINANCING AGREEMENT shall remain in force equal to the sum of the INVESTMENT PERIOD OF THE ACCESS NETWORK, INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK and the OPERATION PERIOD until the completion of the last disbursement; unless earlier terminated in response to the cases provided for in this FINANCING AGREEMENT.
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6.2.
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The INVESTMENT PERIOD of the ACCESS NETWORK and the INVESTMENT PERIOD of the TRANSPORT NETWORK shall not exceed twelve (12) months each one from the CLOSING DATE. However, it may be extended upon approval of FITEL and formalized by addendum to this FINANCING AGREEMENT.
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6.3.
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The OPERATION PERIOD shall not be less than one hundred twenty (120) months from the day following the completion of the INVESTMENT PERIOD.
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6.4.
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The term of the FINANCING AGREEMENT may be extended provided there is proper justification and for the enforcement of the purposes stated in the fifth clause of this contract by addendum signed by FITEL and the CONTRACTOR.
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6.5.
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The PARTIES shall comply with the applicable procedure to the stage of CLOSURE of the FINANCING AGREEMENT.
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6.6.
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At the end of the term of the FINANCING AGREEMENT, by the conclusion of the deadline stated in paragraphs 6.2 and 6.3 of this Clause, the CONTRACTOR shall continue the obligations of a telecommunications operator stipulated in their respective concession contracts, which are signed with the Ministry of Transportation and Communications, and/or any holder of a registration or authorization for the provision of value added services.
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7.1.
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To use the AWARDED FUNDING for the design, construction and installation of the TRANSPORTATION NETWORK; well as for the design, equipment procurement, transportation, installation, commissioning, operation and maintenance of the ACCESS NETWORK that will allow to provide Internet and Intranet access in the BENEFICIARY LOCALITIES and MANDATORY PAID INSTITUTIONS contained Exhibit No. 1 of the FINANCING AGREEMENT, and to the implementation of capacity building activities, fulfilling the conditions laid down in the TECHNICAL SPECIFICATIONS, the content of the AWARDED PROJECT and all commitments by the CONTRACTOR in its TECHNICAL PROPOSAL included in Exhibit No. 2 FINANCING AGREEMENT and the content of its technical proposal (Additional Beneficiaries number of locations, number of tablets, number of beneficiary localities with Internet access free of charge, in main square and a reduction in the number of days of the INSTALLATION STAGE).
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7.2.
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To meet the deadlines and targets set out in the FINAL SCHEDULE OF ACTIVITIES of the CONTRACTOR, provided in Exhibit No. 3 FINANCING AGREEMENT, except in cases of extensions determined in accordance with this FINANCING AGREEMENT.
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7.3.
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Comply with the obligations in the TECHNICAL SPECIFICATIONS and appendices.
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7.4
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To comply with the commitments made in its TECHNICAL PROPOSAL, Exhibit No. 2 of the FINANCING AGREEMENT.
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7.5
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Repair of damage because of the material and/or equipment that will serve to implement the AWARDED PROJECT contained in the Technical Proposal, as well as their replacement, if applicable, will be the responsibility of the CONTRACTOR without requiring any further disbursement by FITEL. This obligation shall apply during the term of FINANCING AGREEMENT and, if applicable, its extensions.
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7.6.
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Responsibility for repairing any damage caused in the BENEFICIARY LOCALITIES and MANDATORY PAID INSTITUTIONS arising from the direct activities of the CONTRACTOR and/or third parties engaged by it for the execution of the AWARDED PROJECT, whether public roads, highways, bridges, public and private premises and others are affected during the transportation, installation, operation and maintenance of the ACCESS NETWORK and the installation of the TRANSPORTATION NETWORK. In that sense, the CONTRACTOR shall indemnify FITEL and MTC, if applicable; and be accountable for any act or omission, willful, negligent or without fault, the staff involving damage to the latter; including those acts or omissions made by the staff of its contractors.
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7.7.
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To give training courses in Peru and in the country of production of the main transmission equipment and infrastructure (optical fiber) used in the ACCESS NETWORK and TRANSPORTATION NETWORK, respectively. The courses will include Theoretical and practical topics.
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7.8.
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Provide all facilities for FITEL, or its designee, fulfill its duties and obligations under the AWARDED PROJECT.
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7.9.
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Provide all information related to the AWARDED PROJECT required by FITEL, or its designee, to fulfill its duties, for which a term will be provided for the CONTRACTOR to comply with it.
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7.10.
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To submit the FINAL SCHEDULE OF ACTIVITIES OF THE ACCESS NETWORK and FINAL SCHEDULE OF ACTIVITIES OF THE TRANSPORTATION NETWORK within the period specified in the TECHNICAL SPECIFICATIONS for both networks.
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7.11.
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Whenever the CONTRACTOR carries out promotional activities and advertising of the AWARDED PROJECT, it must refer to the Peruvian State represented by FITEL and the MTC during the term of the FINANCING AGREEMENT.
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7.12.
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To manage, obtain before administrative authorities, municipal or otherand maintain current licenses, permits, registrations and other authorizations required for the deployment of infrastructure and for the provision of Internet service and intranet access offered in the AWARDED PROJECT. In this regard, it is expressly stated that cooperation by the FITEL indicated in Paragraph 8.3 of the Financing Agreement is only of means and not results of, so the CONTRACTOR cannot claim the unsuccessful outcome of this cooperation as grounds that waives it from the breach compliance of the obligations contained in the FINANCING AGREEMENT.
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7.13.
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Comply with all APPLICABLE RULES and LAWS for the execution of the FINANCING AGREEMENT.
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7.14.
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To fulfill its obligations under the concession contract signed with the MTC
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7.15.
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To meet the payment of its contributions to the special right to FITEL under Article 12° of the TUO of the Telecommunications Law approved by the Supreme Decree No. 013-93-TCC, as amended.
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7.16.
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In the case of ACCESS NETWORK, THE CONTRACTOR undertakes to meet the demand of the towns of Cusco region, where the coverage of this network allows the provision of services under the AWARDED PROJECT. This obligation will be performed under the same conditions in AWARDED PROJECT, without incurring additional financing.
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7.17.
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To submit for the satisfaction of FITEL, disaggregated information of investment costs for the ACCESS NETWORK and TRANSPORTATION NETWORK duly accredited as stated in Exhibit Nº10 of this agreement even before the signing of ACT OF CONFORMITY OF INSTALLATION AND TESTING SERVICES OF THE ACCESS NETWORK AND RECORD OF CONFORMITY OF INSTALLATION AND TESTING SERVICES OF THE TRANSPORT NETWORK. This information will have no implications on the FUNDING AWARDED.
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7.18.
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To submit to FITEL semiannually the operating cash flow of the AWARDED PROJECT during the term of the FINANCING AGREEMENT. The delivery of this information does not alter the amount of FINANCING AWARDED. Additionally, FITEL may request the accreditation of the operating cash flow.
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7.19.
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To allow FITEL to verify the destination and use of the FUNDING AWARDED during the term of the FINANCING AGREEMENT.
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7.20.
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To keep up to the CLOSING DATE, fully subscribed the total of shares making up the share capital and paid at least 25% of the nominal value of the shares, as applicable, in accordance with the provisions of Article 52 ° of the General Corporation Law, Law No. 26887.
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7.21.
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It will comply with the responsibility for contracting and retaining existing insurance policies in force on ASSETS and elements of the ACCESS NETWORK and TRANSPORTATION NETOWRK assuming the costs of each and every one of the deductibles and / or coinsurance that it engaged in insurance policies purchased in fulfilling this obligation. The validity of the stated policies will begin once the INSTALLATION STAGE is finished. The insurance company will pay will be under the supervision and regulation of the Superintendency of Banking and Insurance (SBS).
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7.22.
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It shall not be relieved of the obligation to comply with the installation of networks claiming defects, errors or omissions in the TECHNICAL SPECIFICATIONS
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7.23.
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Respect the right of patent, design and/or copyright protected in the country of manufacture of the elements for the ACCESS NETWORK and TRANSPORTATION NETWORK.
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7.24.
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The CONTRACTOR assumes responsibility for the acts, failures, omissions, or in general, any breach incurred by manufacturers or other subcontractors employed by it who may be involved in the execution of the FINANCING AGREEMENT.
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7.25.
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Subscribe for the duration of the FINANCING AGREEMENT, contract models set out in Appendix Nº. 5-A and 5-B of Exhibit Nº 8B of the TERMS AND CONDITIONS.
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7.26.
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To assume for the duration of FINANCING AGREEMENT and even during additional period referred to in Paragraph 20.3 of the FINANCING AGREEMENT, the liability to FITEL of maintaining the operability and functionality of all ASSETS and elements of the ACCESS NETWORK so that the quality and conditions stated in its Technical Proposal and in the TECHNICAL SPECIFICATIONS are guaranteed for the provision of public telecommunications services and ensure access to Intranet.
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7.27.
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During the term of the FINANCING AGREEMENT and even during additional period referred to in Paragraph 20.3 of the FINANCING AGREEMENT, the CONTRACTOR is required to perform corrective maintenance activities, and preventive ASSETS and elements of the ACCESS NETWORK. This includes the obligation to make the replacement, renewal, rehabilitation and / or adaptations made
to ASSETS and items included in the networks; without that requirement implies the right to require FITEL additional resources to FUNDING AWARDED.
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7.28.
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It is responsible to FITEL, and third parties, as appropriate, for the proper management and use of ASSETS and elements of the ACCESS NETWORK, and the inherent risk to them.
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7.29.
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From the CLOSING DATE and until the transfer of ACCESS NETWORK assets on behalf of FITEL is made stated in this contract, the CONTRACTOR will be solely responsible and liable to pay taxes, fees and contributions that apply in relation to ASSETS and elements of the ACCESS NETWORK in accordance with applicable rules, considering among these regulations the provisions of the Consolidated Text of the Municipal Taxation Law, approved by Supreme Decree No. 156- EF-2004 or its amendment. In the case of TRANSPORT NETWORK, this obligation of THE CONTRACTOR is maintained until its transference to the MTC, in accordance with the provisions of this FINANCING CONTRACT.
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7.30.
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To ensure that the ACCESS NETWORK and TRANSPORTATION NETWORK ASSETS are only subject to the provision of the services referred to in AWARDED PROJECT. Consequently, they cannot be transferred, or in general subject to liens or encumbrances of any kind.
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7.31.
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Transferring ownership in favor of FITEL, of the ACCESS NETWORK ASSETS according to the conditions of this contract and in the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK contained in Exhibit 8-B of the TERMS AND CONDITIONS.
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7.32.
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Transfer in favor of MTC the property and domain of the TRANSPORTATION NETWORK, under the conditions of this AGREEMENT
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7.33.
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To assume custody and responsibility for the integrity and legal physical sanitation in accordance with the applicable norms of the TRANSPORTATION NETWORK until the delivery thereof to the concessionaire in charge of the operation of the TRANSPORTATION NETWORK to be selected in the private investment promotion process of PROINVERSIÓN.
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7.34.
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To maintain up- to- date the insurance policy of the ASSETS OF THE TRANSPORT NETWORK until the delivery thereof to the concessionaire of the operation of the TRANSPORT NETWORK and in the case of the ACCESS NETWORK ASSETS until the CLOSURE of the FINANCING AGREEMENT; assuming the costs of each and every one of the deductibles and / or coinsurance that engaged in insurance policies purchased in fulfilling this obligation.
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7.35.
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To negotiate and subscribe infrastructure share-use agreements with, electricity, hydrocarbons or railway companies as well as to obtain permits, rights of way, step and use poles necessary to install the necessary infrastructure and for the deployment of the ACCESS NETWORK and TRANSPORTATION NETWORK; as well as, to establish agreements for the use of existing pipelines and install new pipelines were deemed necessary and inform FITEL of agreements with such companies.
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7.36.
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Without prejudice to the provisions in the APPLICABLE LAWS and REGULATIONS, the CONTRACTOR shall provide to the MTC, FITEL and operation concessionaire of the TRANSPORTATION NETWORK all facilities they require in order to facilitate the procurement and commissioning of AWARDED PROJECT.
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7.37.
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Fulfill the commitments made in its technical offer, compared to competitive factors indicated in the TERMS AND CONDITIONS.
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7.38.
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Comply with the legal physical healing proposed in the APPLICABLE NORMS before the signing of the PROPERTY AWARD ACT OF THE ACCESS NETWORK.
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7.39.
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To fulfill all other obligations under the FINANCING AGREEMENT, it’s annex and the TECHNICAL SPECIFICATIONS in CIRCULARS and the TERMS AND CONDITIONS.
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8.1.
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To disburse the FUNDING AWARDED to the CONTRACTOR when it has fulfilled the obligations and provisions required in the FINANCING AGREEMENT. Disbursements will be made in accordance with the conditions set out in Clause fourteenth of the FINANCING AGREEMENT.
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8.2.
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To exercise, directly or through a third natural or artificial, public or private person, shares of supervision, monitoring and control of facilities and test infrastructure, equipment and services under the FINANCING AGREEMENT.
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8.3.
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FITEL shall cooperate with the CONTRACTOR for the proper performance of the FINANCING AGREEMENT. To this end, FITEL, where warranted, will use its best efforts to coordinate with the relevant authorities, issuing licenses, permits and other managed by THE CONTRACTOR and that are required for execution of the FINANCING AGREEMENT.
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8.4.
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To ensure proper use of the FUNDING AWARDED and compliance with the terms of the FINANCING AGREEMENT.
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8.5.
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To make written submissions on the matters covered by the FINANCING AGREEMENT, within the time stated therein, as well as other applications, to be within the scope of powers of the CONTRACTOR in writing.
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8.6.
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To assume the costs of maintaining the TRANSPORTATION NETWORK until delivery thereof to the operation concessionaire.
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8.7.
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Cooperate when the CONTACTOR demands it in writing, in the negotiation of sharing infrastructure agreements with concessionaires or other public or private entities that apply to other sectors (such as energy, oil, road infrastructure, etc.) required to install poles and infrastructure according to DESIGN of the TRANSPORT NETWORK outlined in the TECHNICAL SPECIFICATIONS. To this end, the FITEL, where warranted, will do their best without the cooperation of FITEL replace the obligation to THE HIRED to manage and sign such agreements as provided in Paragraph 7.35 of the seventh clause of this contract.
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8.8.
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Other obligations under the FINANCING AGREEMENT, its Exhibits and the TECHNICAL SPECIFICATIONS in the CIRCULAR and the TERMS AND CONDITIONS.
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9.1.
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To receive, use and dispose of the FUNDING AWARDED, according to the FINAL SCHEDULE OF ACTIVITIES and conditions provided in the FINANCING AGREEMENT.
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9.2.
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To propose to FITEL the replacement of BENEFICIARY LOCALITIES and/or Mandatory Paid Institutions, or Network Access nodes, according Exhibit 11 of this contract.
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9.3.
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It may provide, at its cost, risk and expense, and will not involve additional funding from FITEL, other additional telecommunications services to those agreed in the FINANCING AGREEMENT, provided they do not degrade the quality and continuity under the AWARDED PROJECT, communicating conditions to provide these additional services. These services will be provided prior authorization of FITEL within a period not exceeding thirty (30) working days from the day of filing.
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Under this assumption the CONTRACTOR is free to use the infrastructure and services in order to provide them in different locations than those agreed, provided that the installation, operation and maintenance thereof is paid by, cost and risk of the CONTRACTOR, and without additional funding from FITEL, without degrading the quality and continuity of services provided in the TECHNICAL SPECIFICATIONS.
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9.4.
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To freely select technologies and more efficient network architectures, provided it complies with the requirements of the TECHNICAL SPECIFICATIONS and the whole becomes a coherent network to provide Internet service and intranet access.
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9.5.
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The CONTRACTOR during the INVESTMENT PERIOD of the ACCESS NETWORK, the INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK and the OPERATION PERIOD, has the freedom to make updates to the technologies used, if required in the Technical Proposal, provided that this change equals or improves the quality and continuity of conditions originally established, the CONTRACTOR must be authorized by FITEL to make said change; for which it must comply with the requirements and procedure established in the TECHNICAL SPECIFICATIONS.
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9.6.
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Within the first six (06) months of the INVESTMENT PERIOD OF THE ACCESS NETWORK, the CONTRACTOR may refer to FITEL its final format proposal of model contracts contained in Exhibits No. 5-A and 5-B of the annex 8B of the TERMS AND CONDITIONS according to what is established in the aforementioned annex.
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9.7.
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To request the reduction of guarantees issued, as provided in the FINANCING AGREEMENT.
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10.1.
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To enforce the obligations of the CONTRACTOR under the FINANCING AGREEMENT.
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10.2.
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To require full or partial refund of FUNDING AWARDED, of TRANSPORTATION NETWORK and ACCESS NETWORK ASSETS, as provided in the FINANCING AGREEMENT, when the CONTRACTOR use disbursements differently than the purpose indicated in the FINANCING AGREEMENT.
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10.3.
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To execute the guarantees given on behalf of FITEL, in case of breach of its obligations under the Financing Agreement.
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10.4.
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To impose and enforce penalties arising from noncompliance, incompleteness, or delays of commitments from the CONTRACTOR under the FINANCING AGREEMENT.
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10.5.
|
To make visits to the premises, facilities, infrastructure, among others, as it deems necessary to verify the performance of the AGREEMENT.
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10.6.
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To apply exceptional interpretation of clauses of the FINANCING AGREEMENT by FITEL, considering the special nature of it.
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10.7.
|
To terminate the FINANCING AGREEMENT, when any of the grounds provided for this purpose occurs, if deemed appropriate.
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10.8.
|
To modify, within six (06) months of the INVESTMENT PERIOD OF THE ACCESS NETWORK, the model contracts contained in Exhibits No. 5-A and 5-B of the annex 8-B of the TERMS AND CONDITIONS; provided that such amendments do not involve the CONTRACTOR in additional obligations to those in the FINANCING AGREEMENT, its Exhibits or the TECHNICAL SPECIFICATIONS.
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10.9
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To approve contracts’ final formats indicated in the preceding paragraph, according to the provisions of Paragraph 9.6. of the FINANCING AGREEMENT.
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11.1.
|
The AWARDED PROJECT may be executed by subcontractors or other forms of outsourcing, provided that FITEL is informed of the names of individuals and/or companies to perform the work. To this end, the CONTRACTOR upon the signature of the FUNDING AGREEMENT shall submit an affidavit in accordance to the Form Nº03 of the Exhibit Nº12 of the TERMS AND CONDITIONS, assuming responsibility for compliance with the contractual obligations of the subcontractor or other individuals or legal entities with whichit subscribes outsourcing contracts. The aforementioned Affidavit must be filed even if the CONTRACTOR does not perform any subcontract.
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11.2.
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In any case, the CONTRACTOR remains responsible to FITEL for the efficient and timely implementation of such obligations and may not allege a breach of the subcontractor to excuse its own default.
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11.3.
|
The CONTRACTOR may not subcontract, individuals or legal entities for the execution of the entire AWARDED PROJECT
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|
i.
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The amount of seventy six million sixty eight thousand US Dollars (US$ 76´068,000.00) for the installation and operation of the ACCESS NETWORK.
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ii.
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The amount of thirty two million three hundred thirty one thousand USA Dollars (US$ 32´331,000.00), for the implementation of the TRANSPORTATION NETWORK
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13.1.
|
CONDITIONS OF EXPANSION OF THE AWARDED PROJECT COMMON TO BOTH NETWORKS
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13.1.1.
|
The EXPANSION OF THE AWARDED PROJECT will be formalized through the signing of an addendum to the FINANCING CONTRACT which will regulate those specific conditions that are not laid down in this contract
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13.1.2.
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EI CONTRACTOR prior to the signing of the Addendum to FINANCING AGREEMENT that approves the EXPANSION OF THE AWARDED PROJECT, will deliver an Enlargement Activity Schedule, it will be part of the Addendum to FINANCING AGREEMENT.
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13.1.3.
|
The deadline to complete the installation in new BENEFICIARY LOCATIONS shall be six (6) months from the signing of the Addendum to FINANCING AGREEMENT that approves the EXPANSION OF THE AWARDED PROJECT
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13.1.4.
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If the CONTRACTOR requests an extension of the AWARDED PROJECT, you must attach to its application, the value of investments (CAPEX) and the value of the corresponding operation and maintenance (OPEX)
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13.2.
|
FOR THE ACCESS NETWORK
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13.2.1.
|
The CONTRACTOR may solicit FITEL the EXPANSION OF THE AWARDED PROJECT for the ACCESS NETWORK under the terms indicated in this FINANCING AGREEMENT.
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13.2.2.
|
THE AWARDED PROJECT may be expanded during the INSTALLATION PERIOD of THE ACCESS NETWORK and such expansion cannot be higher than twenty percent (20%) of the amount of THE ACCESS NETWORK FINANCING.
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13.2.3.
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The new beneficiary localities to be selected must belong to new district capitals within the area of influence of the AWARDED PROJECT, which will be included as Annex to the Addendum of the FINANCING AGREEMENT which approves the EXPANSION of the AWARDED PROJECT.
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13.2.4.
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So that FITEL accepts the extension of the Awarded Project, the CONTRACTOR must comply upon the approval of FITEL with every one of the terms it previously approved for the subscription of the Addendum to the FINANCING AGREEMENT reason why the EXPANSION of the AWARDED PROJECT is approved. FITEL reserves the right to modify the general, technic and economic conditions of the new Non-reimbursable financing
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13.3.
|
FOR THE TRANSPORTATION NETWORK
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13.3.1.
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The CONTRACTOR may, within first eight (08) months of the INVESTMENT PERIOD of the TRANSPORTATION NETWORK request FITEL the expansion of the AWARDED PROJECT to new district capitals. Such extension shall not exceed twenty percent (20%) of the amount of FUNDING OF THE TRANSPORT NETWORK.
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13.3.2.
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The new beneficiary localities must belong to new district capitals within the area of influence of the AWARDED PROJECT, which will be included as Annex to the Addendum of the FINANCING AGREEMENT which approves the EXPANSION of the AWARDED PROJECT.
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13.3.3.
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The EXPANSION of the AWARDED PROJECT will be formalized through the signing of an addendum to the FINANCING AGREEMENT, for which it will apply the provisions of this clause.
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14.1.
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ACCESS NETWORK:
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14.1.1 An advance of 35% of the value of the FINANCING FOR THE ACCESS NETWORK (35%), amounting to twenty six million twenty three thousand eight hundred United States dollars (US$ 26´623,800.00) payment which will be made at subscription of the FINANCING CONTRACT.
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14.1.2. A second disbursement of five percent (5%) of the value of the FUNDING FOR ACCESS NETWORK amounting to three million eight hundred and three thousand four hundred Unites States dollars (US$ 3´803,400.00) value that shall be paid when THE CONTRACTOR attests the installation of Sixty Percent (60%) of total COMPULSORY PAID INSTITUTIONS.
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It is necessary that each one maintains connectivity with their respective District Node as refered to in Annex No. 8-B of the TERMS AND CONDITIONS using the ACCESS NETWORK built for this purpose
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14.1.3 A third disbursement of ten percent (10%) the value of FINANCING ACCESS NETWORK, amounting to seven million six hundred and six thousand eight hundred United States DOLLARS (US $. 7´606,800.00), value which shall be paid to the signing of INSTALLATION CONFORMITY AND ACCESS NETWORK SUPERVISION REPORT. It is necessary that each of the Mandatory Paid Institutions maintain connectivity with their respective District Node as refered to in Annex No. 8-B of the TERMS AND CONDITIONS using the ACCESS NETWORK built for this purpose.
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14.1.4 The amount corresponding to 50% of the value of the ACCESS NETWORK FINANCING will be disbursed during the OPERATION PERIOD in twenty (20) semiannual installments, each amounting to two and a half percent (2.5%) of the FINANCING OF THE ACCESS NETWORK amounting to One Million Nine hundred and one thousand seven hundred United States Dollars (US$. 1´901,700.00) which shall be paid upon a favorable INSTALLATION CONFORMITY AND ACCESS NETWORK SUPERVISION REPORT.
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14.2.
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TRANSPORTATION NETWORK
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14.2.1.
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Disbursements are made according to the following scheme:
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15.1.
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As a condition for signing the FINANCING AGREEMENT in the CLOSING DATE, the CONTRACTOR shall deliver to the COMMITTEE the ADVANCE PAYMENT GUARANTEE and PERFORMANCE BOND of the FINANCING AGREEMENTwhich must be issued by a LOCAL BANKING BUSINESS OR LOCAL INSURANCE BUSINESS rightfully authorized by the SBS (the banking and retirement fund superintendency) or by an INTERNATIONAL FINANCIAL ENTITY. In the case of a warranty issued by and INTERNATIONAL FINANCIAL ENTITY, it must be confirmed by a LOCAL BANKING BUSINESS according to the Exhibit Nº2 in the TERMS AND CONDITIONS.
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15.2.
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The ADVANCE PAYMENT GUARANTEE shall be for an amount of US$ thirty seven million nine hundred thirty nine thousand six hundred fifty US Dollars (US$ 37´939,650.00), equivalent to 100% of the first disbursement, of THE ACCESS NETWORK and THE TRANSPORT NETWORK ensuring the proper use of this disbursement in favor of the CONTRACTOR, pursuant to the provisions of this AGREEMENT. It shall remain valid from the CLOSING DATE until the end of the investment period. The FITEL may provide for the mandatory extension of this guarantee, and the CONTRACTOR must renew it by the time indicated for its effect.
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15.3.
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THE CONTRACTOR during the INVESTMENT PERIOD of THE ACCESS NETWORK and the INVESTMENT PERIOD of THE TRASNPORT NETWORK may request FITEL a reduction of fifty percent (50%) of the ADVANCE PAYMENT GUARANTEE. To do this, it must have fulfilled the following conditions:
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15.4
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The ADVANCE PAYMENT GUARANTEE will be returned to the CONTRACTOR, once signed (i) MINUTES OF CONFORMITY OF INSTALLATION AND TESTING SERVICES OF THE ACCESS NETWORK; (ii) MINUTES OF CONFORMITY OF INSTALLATION AND TESTING SERVICES OF THE TRANSPORT NETWORK and (iii) MINUTES OF RECORD OF THE ASSET AWARD OF THE TRANSPORT NETWORK.
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15.5
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PERFORMANCE BOND of the FINANCING AGREEMENT will be for a total of ten million eight hundred thirty nine thousand nine Hundred US Dollars (US$ 10´839,900.00), equivalent to ten percent (10%) of the FINANCING for the FINANCING AWARDED which will ensure the proper and timely performance of each and every one of the obligations of the CONTRACTOR. The performance bond reduction scheme is as follows:
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15.5.1.
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After signing of the CONFORMITY OF INSTALLATION AND TESTING SERVICES OF THE ACCESS NETWORK, THE CONFORMITY INSTALLATION AND TESTING SERVICES ACT of the TRANSPORT NETWORK and the ACT of AWARD of the ASSETS OF THE TRANSPORT NETWORK, will be replaced by another, the amount will be equal to ten percent (10%) of the amount of the FINANCING OF THE ACCESS NETWORK..
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15.5.2.
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At the beginning of the second year of the PERIOD OF OPERATION and after INSTALLATION CONFORMITY AND ACCESS NETWORK SUPERVISION REPORT is accepted by FITEL PERFORMANCE BOND of the FINANCING AGREEMENT will be reduced by another that is equivalent to eight percent (8%) of the FINANCING of the ACCESS NETWORK.
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15.6
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The PERFORMANCE BOND of the FINANCING AGREEMENT is issued for and on behalf of the CONTRACTOR in favor of FITEL. The bond must be renewed annually so that remains in effect until the expiration of the FINANCING AGREEMENT, except as noted in number 3.20 of the third clause and in Paragraph 4.6. of the fourth clause of the FINANCING AGREEMENT.
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15.7
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In case the CONTRACTOR presents COMMENTS pending from the last MONITORING REPORT issued in the PERIOD OF OPERATION OF THE ACCESS NETWORK, the PERFORMANCE BOND of the FINANCING AGREEMENT will be renewed seven (07) DAYS prior to maturity for a period of (60) DAYS, and so on until all COMMENTS have been clarified.
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15.8
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The PERFORMANCE BOND of the FINANCING AGREEMENT is secured, unconditional, and irrevocable, without benefit of excussion and of immediate execution upon request of FITEL without judicial demand for payment or performance, a copy of which is included as Exhibit No. 5 of the FINANCING AGREEMENT.
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15.9
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The PERFORMANCE BOND of the FINANCING AGREEMENT shall be returned no later than five (05) business days after making the final disbursement
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16.1
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The CONTRACTOR agrees to transfer ownership and control of the TRANSPORTATION NETWORK ASSETS, properly sanitized, on behalf of the MTC with the signing of the MINUTES OF AWARD OF THE TRANSPORTATION NETWORK ASSETS, once the Concession Agreement between the MTC and the concessionaire for the operation for the TRANSPORTATION NETWORK is subscribed.
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16.2
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The CONTRACTOR recognizes that after the signing of the MINUTES OF AWARD OF TRANSPORTATION NETWORK ASSETS, will also assume the obligation to formalize and perfect by all acts or procedures necessary for the transference of ownership and control referred to in the preceding paragraph in favor of the MTC. This obligation will assumed according to nature of the assets to be transferred and its aptitude to be registered in SUNARP.
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16.3
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The CONTRACTOR undertakes to carry out the activities necessary to preserve the condition and utility of the ASSETS TRANSPORT NETWORK until the signing of the Concession Agreement between the MTC and the concessionaire for the operation of the TRANSPORTATION NETWORK
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16.4
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The CONTRACTOR shall be liable for damages or losses caused to the TRANSPORTATION NETWORK ASSETS until the signing of the Concession Agreement between the MTC and the concessionaire for the operation of the TRANSPORTATION NETWORK. Therefore are forced to hire the necessary insurance to comply with the provisions of this paragraph.
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16.5
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After the signing of MINUTES OF AWARD OF ACCESS NETWORK ASSETS, FITEL shall make
the final disbursement of FUNDING AWARDED; as stated in Clause Fourteenth of the FINANCING AGREEMENT.
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16.6
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Without prejudice to the other obligations arising from the provisions of paragraph 7.34 and 7.39 of the seventh clause and other provisions under this FINANCING AGREEMENT, until the transfer of title of the TRANSPORTATION NETWORK ASSETS to the MTC, the CONTRACTOR as provided in the applicable law, in its capacity as holder of such property immediately has an obligation to exercise (for your own expense and expeditiously) the following types of possessory defense for both the case of attempted usurpation of the TRANSPORTATION NETWORK ASSETS and the ASSETS OF THE ACCESS NETWORK, as in the case of activities incompatible with the proper use of them by third parties:
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a)
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Extrajudicial possessory defense, used to repel the force used against the CONTRACTOR and to regain the good, without time interval, if it were dispossessed, but always refrain from the use of recourses not justified by the circumstances.
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b)
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Legal possessory defense, the CONTRACTOR must, if it is borne by the TRANSPORTATION NETWORK ASSETS any involvement, dispossession, occupation, usurpation, among others, communicate MTC and FITEL of those facts and make use of the mechanisms and judicial resources to enable it to hold harmless MTC's right on the TRANSPORTATION NETWORK ASSETS.
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16.7
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The failure to exercise possessory defenses will result in penalties under Clause eighteen (18) of the FINANCING AGREEMENT.
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16.8
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The CONTRACTOR must notify FITEL and MTC, immediately and notarial duct, the occurrence of damage to the TRANSPORT NETWORK ASSETS, and the nature and amount thereof until before the signing of the AWARD ACT of THE ASSETS OF THE TRANSPORT NETWORK
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16.9
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The exercise of possessory defenses described above does not hold harmless the CONTRACTOR, which, to a course as described in the preceding paragraphs, shall coordinate immediately with Fitel and MTC the legal actions that the CONTRACTOR must engage in order to hold harmless MTC's right on TRANSPORT NETWORK ASSETS AND THE ASSETS OF THE ACCESS NETWORK.
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16.10
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Without prejudice to the provisions in paragraph 7.30 of the FINANCING AGREEMENT, the CONTRACTOR must hold harmless FITEL especially regarding the MTC and against any action or exception of legal, administrative, arbitration or contract, or claim of any nature regarding the ACCESS NETWORK and TRANSPORT NETWORK ASSETS.
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16.11
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The CONTRACTOR must comply with in respect of the TRANSPORT NETWORK and ACCESS NETWORK ASSETS, to pay taxes, fees and contributions payable, pursuant to APPLICABLE LAWS FINANCING referred to in the FINANCING AGREEMENT, considering between these regulatory provisions as provided in the Consolidated Text of the Municipal Taxation Act, approved by Supreme Decree No. 156-2004-EF or later rule that amends
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16.12
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The CONTRACTOR ensures the proper transfer of title of the TRANSPORT NETWORK ASSETS in favor of MTC and the ACCESS NETWORK ASSETS in favor of FITEL ; as wll as the operation and functioning of the TRANSPORT NETWORK ASSETS. It also recognizes the domain the MTC has over THE TRANSPORT NETWORK ASSETS and the domain FITEL has over the ACCESS NETWORK ASSETS. The property right is transferred for both networks, including the ground, underground and overground according to the findings by the Civil Code
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17.1
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Fitel is responsible for the supervision of the adequate use of the FINANCING AWARDED.
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17.2
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FITEL is responsible for the supervision and control AWARDED PROJECT during INVESTMENT PERIOD of THE ACCESS NETWORK and OPERATION PERIOD.
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17.3
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The monitoring of the PERIOD OF OPERATION is done every six months and will start the day following completion of the INVESTMENT PERIOD of the ACCESS NETWORK until the CLOSING OF THE FINANCING AGREEMENT.
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17.4
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In the INVESTMENT PERIOD of THE ACCESS NETWORK, supervision will mainly include the following:
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|
•
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Supervision of the number of BENEFICIARY LOCALITIES and MANDATORY PAID INSTITUTIONS of the AWARDED PROJECT and its proper location;
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|
•
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Monitoring the quantity and quality of infrastructure, equipment, materials, management tools, among others, to be applied to the AWARDED PROJECT
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|
•
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Supervision and control of the installation of infrastructure, equipment, materials, management tools, among others, which will be used by the AWARDED PROJECT to provide service access to Internet and intranet, in the BENEFICIARY LOCATIONS, INSTITUTIONS, or others who contract the service within the scope of the ACCESS NETWORK installed by the CONTRACTOR to serve the AWARDED PROJECT;
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|
•
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Supervision and control and SPREAD AWARENESS, TRAINING AND DEVELOPMENT OF CONTENTS;
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|
•
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Supervision and control of the operation of the Internet access service and intranet access, if any, to be provided with the AWARDED FUNDING according to the FINANCING AGREEMENT, its annexes and the TECHNICAL SPECIFICATIONS, TECHNICAL PROPOSAL, the CIRCULAR and TERMS AND CONDITIONS; and,
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|
•
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Supervision of other aspects that Fitel deems necessary to ensure the proper use of the services required
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|
•
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The monitoring will take place in accordance with the INSTALATIONS ACCEPTANCE TEST PROTOCOL
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17.5
|
During the PERIOD OF OPERATION, FITEL will primarily oversee the following:
|
•
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The services provided by the CONTRACTOR with the FUNDING AWARDED, according to the requirements specified in the TECHNICAL SPECIFICATIONS and in the absence thereof, in accordance with the provisions of the legal and regulatory framework applicable.
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•
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The quality of the provision of other services that are offered using the ACCESS NETWORK of the AWARDED PROJECT, according to the conditions laid down in the respective addendum.
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•
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Supervision of the number of tablets given annually
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•
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Supervision of the number of beneficiary communities with free access to Internet payment in main place.
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•
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Supervision of maximum Internet access rates to different people at Public Institutions
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•
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Other that FITEL recommends or orders within the framework of the FINANCING AGREEMENT
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Ø
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TRANSPORTATION NETWORK
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17.6
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FITEL is responsible for the supervision and control of the AWARDED PROJECT during the INVESTMENT PERIOD of the TRANSPORT NETWORK, which includes the supervision and control of the installation of infrastructure, equipment, materials, management tools, among others, to be used for the TRANSPORT NETWORK.
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17.7
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The FITEL may require from the CONTRACTOR all information and / or documents of any kind related to the TRANSPORT NETWORK as it deems necessary without limitation, the CONTRACTOR is obliged to forward it within the time limits provided in its requirements by FITEL.
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Ø
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ACCESS NETOWRK
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18.1
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Penalties for failure in the ACCESS NETWORK INVESTMENT PERIOD
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18.1.1
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The penalties applicable for breaches during the ACCESS NETWORK INVESTMENT PERIOD may be deducted from the corresponding disbursement for this period.
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18.1.2
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Non-compliance with activities:
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18.1.2.1
|
If the CONTRACTOR breaches with the full installation of a service within the prescribed period, Fitel shall establish a penalty of five-hundredths (0.05) of ITU (Tax unit) per MANDATORY PAID INSTITUTION set forth in Exhibit No. 01 of this contract, per day behind in the breach, counted from the day the initial installation ended.
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18.1.2.2
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If the CONTRACTOR breaches or partially meets the awareness and dissemination activities, as indicated in section 4.2.1 of the ACCESS NETWORK TECHNICAL SPECIFICATIONS, FITEL shall apply a penalty of one-tenth (0.1) of ITU for BENEFICIARY where this obligation was not complied with within the time limit set. It is considered that this activity was carried when the minimum percentage of attendees described in TECHNICAL SPECIFICATIONS of THE ACCESS NETWORK except what is indicated in the paragraph 3 of the Exhibit Nº14 of the Appendix 8B of the TERMS AND CONDITIONS related to the accreditation of the minimum of attendees..
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18.1.2.3
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If the CONTRACTOR does not comply with the installation of the monitoring system within the ACCESS NETWORK INVESTMENT PERIOD, according to what is stated in section 6.6.1.1 of the TECHNICAL SPECIFICATIONS as well as usernames and passwords, etc., or all activities for commissioning of this system is not completed, Fitel shall apply a penalty of five (5) ITU.
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18.1.2.4
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In case of breach of the activities during the INVESTMENT PERIOD due to a fortuitous event or force majeure, not attributable to the CONTRACTOR, it shall send the documentation to FITEL proving this, in maximum one month of the event causing the breach. Furthermore, in order to evaluate the fact, the CONTRACTOR must communicate the occurrence of the event, and propose its estimate of days required for the performance of such activities, within the first fifteen (15) days of the occurrence.
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18.1.2.5
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In the event that the CONTRACTOR has not hired or has not maintained insurance policies in force on ASSETS and elements of the ACCESS NETWORK as stated in Paragraph 7.21 of the Seventh Clause FUNDING AGREEMENT, FITEL may impose a penalty of five (05) ITU whenever compliance with this obligation has failed.
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18.1.2.6
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If the CONTRACTOR does not comply with the installation of the server for monitoring within the INVESTMENT PERIOD, according to what is stated in section 6.6.1.2 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, or all activities for commissioning of this are not completed, Fitel shall apply a penalty of five (5) ITU.
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18.1.2.7
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If the CONTRACTOR fails to comply with the installation of the amount of help centers for users within the INVESTMENT PERIOD, according to what is stated in paragraph 5.5 of the TECHNICAL SPECIFICATIONS. The delay by the CONTRACTOR, will result in a penalty of five (05) ITU
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18.1.2.8
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If the contractedCONTRACTOR fails to comply with the obligation to exercise possessory defenses as stated in section 16.6 of Section 16I of the FINANCING AGREEMENT, the FITEL will impose a penalty of five (05) UIT.
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18.1.3
|
Penalties for Failure to deliver Information:
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18.1.3.1
|
If the CONTRACTOR fails to comply to submit the formats of the ACCESS NETWORK INSTALLATION MINUTES it will use, according to the period specified in paragraph 6.5.3.3 of the TECHNICAL SPECIFICATIONS, FITEL may impose a penalty of three (03) ITU..
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18.1.3.2
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If the CONTRACTOR fails to deliver the ACCESS NETWORK INSTALLATION MINUTES according to the period specified in paragraph 6.5.3.6 of the TECHNICAL SPECIFICATIONS, Fitel may apply a penalty equal to one hundredth (0.01) ITU for each DAY of delay in the ACCESS NETWORK INSTALLATION MINUTES (station/terminal node or subscriber).
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18.1.3.3
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If the CONTRACTOR fails to comply with submitting the documentation and information that certifies the execution of activities AWARENESS TRAINING AND DISSEMINATION according to the period specified in Paragraph 5 of Appendix No. 14 of the TECHNICAL SPECIFICATIONS, Fitel will apply a penalty equal to one hundredth (0.01) of ITU per DAY of delay. It is only considered submitted the documentation and information for each LOCATION that has filled all fields, including subscription of faith that carry out this activity, and the list of attendees.
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18.1.3.4
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If the CONTRACTOR fails to comply with its final proposal to deliver CAPACITY BUILDING within the time limits indicated in Paragraph 4.1.2 of the TECHNICAL SPECIFICATIONS, FITEL shall apply a penalty of three (03) ITU for each of these proposals not filed within that period.
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18.1.3.5
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The CONTRACTOR shall send to Fitel, within the maximum period prescribed in Paragraph 6.5.4.2 of the TECHNICAL SPECIFICATIONS, a proposed TESTING PROTOCOL OF ACCEPTANCE OF FACILITIES containing the minimum procedures required by Fitel. The delay by THE HIRED in remission of that protocol will result in a penalty of three hundredths (0.03) ITU per DAY of delay.
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18.1.3.6
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The CONTRACTOR shall send to Fitel, within the maximum period prescribed in Paragraph 2.5.1 of the TECHNICAL SPECIFICATIONS, the FINAL SCHEDULE OF ACTIVITIES, containing the minimum fields required by Fitel. The delay by the CONTRACTOR in referring this schedule will result in a penalty of one hundredth (0.01) of ITU for each day of delay.
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18.1.3.7
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The CONTRATOR shall send to Fitel, within the maximum period prescribed in Paragraph 5.4.2 of the TECHNICAL SPECIFICATIONS, the detailed proposal for the Maintenance Program. The delay by the CONTRACTOR in remission of the program will result in a penalty of one hundredth (0.01) of ITU for each day of delay.
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18.1.3.8
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If the CONTRACTOR fails to comply with the submission of information operations and maintenance facilities within the maximum period prescribed in Paragraph 5.6.2 of the TECHNICAL SPECIFICATIONS. The delay by the CONTRACTOR will result in a penalty of five (05) ITU.
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18.1.3.9
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If the CONTRACTOR fails to comply with the submission of the detailed content of the courses to be issued in training on the technology solution within the maximum period prescribed in Paragraph 2.6.1 of the TECHNICAL SPECIFICATIONS. The delay by the CONTRATED PARTY will result in a penalty of one hundredth (0.01) of ITU for each day of delay.
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18.1.3.10
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If the CONTRACTOR fails to comply with the referral of disaggregated costing PROPOSED ECONOMIC NETWORK ACCESS, within the maximum period prescribed in Paragraph 2.7.1 of the TECHNICAL SPECIFICATIONS NETWORK ACCESS. The delay by THE HIRED, will result in a penalty of two hundredths (0.02) ITU per DAY of delay.
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18.1.3.11
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When the CONTRACTOR fails to present to Fitel FIELD STUDIES, within the prescribed period and according to what is stated in paragraph 6.5.2 of the TECHNICAL SPECIFICATIONS, FITEL may apply a penalty of ten (10) UIT.
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18.1.3.12
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When the ONCTRACTED PARTY fails to present to Fitel the ENGINEERING STUDIES, within the deadline and according to what is stated in paragraph 6.5.2 of the TECHNICAL SPECIFICATIONS, FITEL apply a penalty of ten (10) UIT.
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18.1.3.13
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When the CONTRACTOR fails to present to FITEL the proposal to implement a tracking subsystem within the deadline and according to what is stated in paragraph 6.6.1 of the TECHNICAL SPECIFICATIONS, FITEL will apply a penalty of five (05) UIT
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18.1.3.14
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When the CONTRACTOR fails to submit to FITEL the formation of its team, within the prescribed period and according to what is stated in paragraph 6.4 of the TECHNICAL SPECIFICATIONS, FITEL apply a penalty of five (05) UIT.
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18.1.3.15
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When the CONTRACTOR fails to inform FITEL of a modification in the conformation of its staff, within the prescribed period and according to what is stated in paragraph 6.4 of the TECHNICAL SPECIFICATIONS, FITEL may apply a penalty two (02) UIT.
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18.2
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Penalties due to non compliance during the OPERATION PERIOD
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18.2.1
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The penalties applicable due to non compliance during the OPERATION PERIOD may be discounted from the next disbursement that corresponds to deliver to THE CONTRACTOR after the occurrence of the corresponding non compliance or according to the following provisions. In case that the amount of penalties of a semester exceeds the disbursement corresponding to said period, THE CONTRACTOR must cancel said debt to FITEL in a term of fifteen (15) days, counted since the collection notification.
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18.2.2
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Penalties due to non compliance of the availability of services
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18.2.2.1
|
In case the CONTRACTOR fails to comply with the requirement of minimum availability of the network of 98% annually, indicated in the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK and measured to the POINT OF PRESENCE (POP), the FITEL will impose a penalty of a tenth (0.1) of the UIT for each additional hour of interruption of the network. The availability will be calculated each year, counted since the first day of the OPERATION PERIOD.
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18.2.2.2
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In case that the availability of services is interrupted in some of the POPs due to Acts of God or Force Majeure or events not attributable to the CONTRACTOR. THE CONTRACTOR will notify to FITEL within the term of thirty (30) days following to the culmination of the month of the event, about the existence of said events, which must be communicated to FITEL through a letter enclosing, through optical storage devices (CD DVD or USB), the detail of the dates and the hours they request to discount, as well as the causes that originated it.
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18.2.3
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Penalties due to non compliance of TRAINING
|
18.2.3.1
|
In case THE CONTRACTOR fails to comply or partially complies to make the TRAINING according to indications made in Appendix N° 13 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL will impose a penalty of a tenth (0.1) of the UIT for each location where this obligation was not complied, within the term established in its final SCHEDULE OF ACTIVITIES OF THE ACCESS NETWORK as stated in paragraph 2.5.1 of the TECHNICAL SPECIFICATIONS OF THE ACCESS NETWORK We shall consider that this activity is performed when the minimum percentage of attendees is reached..
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18.2.4
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Penalties due to failure to submit information
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18.2.4.1
|
If the CONTRACTOR fails to deliver the Execution Minutes of TRAINING according to the term foreseen in Section III of Appendix N° 13 A and the Appendix 13 B of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL will apply a penalty equivalent to one hundredth (0.01) of the UIT for each DAY of delay per BENEFICIARY LOCALITY. The minutes will be only considered as submitted per BENEFICIARY LOCALITY those that have all full fields, including the subscription of the person that certifies the performance of this activity, and the list of attendees.
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18.2.4.2
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THE CONTRACTOR shall send to FITEL, within the maximum term established in Section III of Appendix N° 13A and Nº 13B of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, the final report of the TRAINING performed. The delay by THE CONTRACTOR in the remission of said report, shall result in a penalty of three hundredths (0.03) of the UIT for each DAY of delay.
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18.2.4.3
|
THE CONTRACTOR shall send to FITEL, within the maximum term established in the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, the monthly reports of the use of access to Internet (total traffic, per locality and per type), monthly report of interruptions, monthly report of quality indicators. The delay by THE CONTRACTOR in the remission of reports, shall result in a penalty of one tenth (0.1) of the UIT per each DAY of delay and per each type of report.
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18.2.4.4
|
When THE CONTRACTOR does not present to FITEL the conformation of its work team, within the term established and according to indications made in Section 6.4 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL shall apply a penalty of five (05) UIT.
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18.2.4.5
|
When THE CONTRACTOR does not communicate to FITEL the modification of the conformation of its work team, within the term established and according to indications made in Section 6.4 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL shall apply a penalty of two (02) UIT.
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18.2.4.6
|
When THE CONTRACTOR does not send to FITEL the format of the activities for Preventive Maintenance, within the term established and according to indications made in Section II of Appendix N° 17 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL shall apply a penalty of five (05) UIT.
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18.2.4.7
|
When THE CONTRACTOR does not send to FITEL the Schedule of annual Preventive Maintenance, within the term established and according to indications made in Section II of Appendix N° 17 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL shall apply a penalty of three (03) UIT.
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18.2.4.8
|
If THE CONTRACTOR sends to FITEL, out of the time established in Section
¡Error! No se encuentra el origen de la referencia.
of the seventh clause of the FINANCING CONTRACT, the disaggregated information of investment costs of the ACCESS NETWORK or if its is inaccurate or false FITEL will impose a penalty of ten (10) UIT.
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18.2.4.9
|
If THE CONTRACTOR sends to FITEL, out of the time established in Section
¡Error! No se encuentra el origen de la referencia.
of the seventh clause of the FINANCING CONTRACT, the operative cash flow of the AWARDED PROJECT, or if it is inaccurate or false FITEL will impose a penalty of ten (10) UIT.
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18.2.5
|
Penalties for OBJECTIONS
|
18.2.5.1
|
FITEL shall make supervisions prior to the performance of disbursements indicated in the Fourteenth Clause of the FINANCING CONTRACT. The supervisions will be made according to the protocols approved by FITEL.
|
18.2.5.2
|
FITEL shall apply a penalty of one (01) UIT for each one of the OBJECTIONS indicated as follows, per BENEFICIARY LOCALITY or station/node indicated in the SUPERVISION REPORT OF THE ACCESS NETWORK, with the indication that the application of this penalty does not release THE CONTRACTOR of the compliance of these obligations.
|
18.2.5.3.
|
When THE CONTRACTOR fails to comply with the preventive Maintenance Program according to the TECHNICAL PROPOSAL.
|
18.2.5.4.
|
If THE CONTRACTOR confines or prevents the personnel appointed by FITEL to make the corresponding visits during the effectiveness of the FINANCING CONTRACT in its tasks of SUPERVISION, FITEL can impose the penalty for each one of the prevented or limited visits. FITEL can discount that value in the immediate disbursement following to the date of the negative or limitation.
|
18.2.5.5.
|
If THE CONTRACTOR fails to comply with the installation of the blocking software specified in Section 3.5.4 of the TECHNICAL SPECIFICATIONS OF THE ACCESS NETWORK.
|
18.2.5.6.
|
When THE CONTRACTOR fails to comply with the term of 30 DAYS, established in Section 5.2 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, to install the required service, a penalty of one tenth (0.1) of the UIT for each DAY of delay will be applied.
|
18.2.5.7.
|
For the non compliance of each one of the indicators established in Appendix N° 11 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, a penalty will be applied according to the following table:
|
Nº
|
Indicator
|
Quality Parameter
|
Scope
|
Penalty
|
1
|
TIA – Incidence rate of troubleshooting for the service of access to Internet
|
Less than 10%
|
All the network
|
10 UIT x month
|
2
|
Latency
|
Less than 150 msec
|
Up to CPE
|
0.05 UIT x month x CPE
|
3
|
Packet loss
|
Less than 2%
|
To the subscriber
|
0.05 UIT x month x CPE
|
4
|
Up/Down Speed
|
Higher than 40% of hired speed
|
Up to CPE
|
0.05 UIT x mes x CPE
|
18.2.5.8.
|
The penalties, if any, will be added per indicator, for each one of the months of the supervised semester.
|
Ø
|
TRANSPORTATION NETWORK
|
18.3.
|
The penalties applicable for non complianceofTHE TRANSPORT NETWORKwill be discounted from the next disbursement that corresponds to deliver to THE CONTRACTOR after the occurrence of the corresponding non compliance or according to indications made in the following provisions. In case that the amount of the penalties exceeds the disbursement corresponding to said period, THE CONTRACTOR must cancel said debt to FITEL in a term of fifteen (15) DAYS, counted since the collection notification.
|
18.4.
|
Failure Activities:
|
18.4.1
|
When THE CONTRACTOR fails to comply with the term established in Section 2.2 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to culminate the first advance or total delivery of the TRANSPORTATION NETWORK, a penalty of five (05) UIT for each DAY of delay will be applied.
|
18.4.2
|
In case that THE CONTRACTOR has not contracted or has not kept in force the insurance policies on the assets and elements that conform the TRANSPORTATION NETWORK according to Section 7.21 of the Seventh Clause of the FINANCING CONTRACT, FITEL will impose a penalty of five (05) UIT each time this obligation has not been complied.
|
18.4.3
|
In case THE CONTRACTOR fails to comply with the installation of the server
for monitoring within the INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK, according to Section 15.10.2 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, or all the activities for the commissioning of it have not concluded, FITEL will impose a penalty of five (5) UIT..
|
18.4.4
|
In case THE CONTRACTOR fails to comply with the installation of the monitoring system within the INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK, according to Section 15.10.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, and users and keys, among others, or all the activities for the commissioning of this system are not concluded, FITEL will impose a penalty of five (5) UIT..
|
18.4.5
|
In case of non compliance of the activities to perform during the INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK is due to a supposed Act
of God or force majeure, or facts attributable to THE CONTRACTOR, it must send to FITEL the documentation that demonstrates it, within the following month of the event of non compliance. Furthermore, in order to assess the fact, THE CONTRACTOR must communicate the occurrence of the event, and propose the estimated days required for the compliance of said activities, within the first fifteen (15) days of the occurrence of the event.
|
18.5
|
Penalties due to the Failure of Information delivery:
|
18.5.1
|
When THE CONTRACTOR fails to comply with the term established in Section 2.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to submit the GENERAL TECHNICAL PROPOSAL, a penalty of one (01) UIT per each DAY of delay will be applied.
|
18.5.2
|
When THE CONTRACTOR fails to comply with the term established in Section 2.2 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to submit each DEFINITIVE TECHNICAL PROPOSAL, a penalty of one (01) UIT per each DAY of delay will be applied.
|
18.5.3
|
If THE CONTRACTOR fails to comply with the remission of the disaggregated costing of the ECONOMIC PROPOSAL of the TRANSPORTATION NETWORK, within the maximum term established in Section 2.6 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK. The delay by THE CONTRACTOR, will result in a penalty of one 1 UIT per each DAY of delay.
|
18.5.4
|
When THE CONTRACTOR fails to comply with the term established in Section 10.4 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to submit recommendations and the requested protocols, a penalty of one hundredth (0.01) of the UIT per each DAY of delay will be applied
.
|
18.5.5
|
When THE CONTRACTOR fails to comply with the term established in Section 14.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to submit the TECHNICAL FILE, a penalty of one 1 UIT per each DAY of delay will be applied
.
|
18.5.6
|
When THE CONTRACTOR does not present to FITEL the conformation of its work team, within the term established and according to Section 15.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, FITEL shall apply a penalty of 1 UIT.
|
18.5.7
|
When THE CONTRACTOR does not communicate to FITEL the modification of the conformation of its work team, within the term established and according to Section 15.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, FITEL shall apply a penalty of one (01) UIT.
|
18.5.8
|
If THE CONTRACTOR fails to deliver the INSTALLATION MINUTES OF THE TRANSPORTATION NETWORK according to the term foreseen in Section 15.9.6 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, FITEL shall apply a penalty equivalent to one hundredth (0.01) of the UIT per each DAY of delay for the INSTALLATION MINUTES OF THE TRANSPORTATION NETWORK.
|
18.5.9
|
If THE CONTRACTOR sends to FITEL, out of the time established in the FINANCING CONTRACT, the disaggregated information of investment costs of the TRANSPORTATION NETWORK or if it is inaccurate or false, FITEL will impose a penalty of ten (10) UIT.
|
Ø
|
COMPETENCE FACTORS
|
18.6
|
In the case that THE CONTRACTOR has submitted as part of its TECHNICAL PROPOSAL, the installation of infrastructure to provide the services of the AWARDED PROJECT, in an additional amount of BENEFICIARY LOCALITIES, FITEL will impose a penalty of fifteen (15) UIT if THE CONTRACTOR fails to comply with the complete installation of any service of the AWARDED PROJECT within the term established. This penalty will not be applied if THE CONTRACTOR did not included said factor in the TECHNICAL PROPOSAL.
|
18.7
|
In case that THE CONTRACTOR has submitted, the delivery of tablets as referred to in the paragraph 9.1.1 of the TERMS ANS CONDITIONS as part of its TECHNICAL OFFER and fails to deliver the total number of items, FITEL will impose a penalty of fifteen (15) UIT per year of failure of delivery of the total amount of tablets.. This penalty will not be applied if THE CONTRACTOR did not include said factor in its TECHNICAL OFFER.
|
18.8
|
If the CONTRACTOR fails to comply with the installation of Internet access free of charge, in main squares during the installation stage, the FITEL liable to a penalty of five tenths (0.5) of UIT per internet access free of charge, not installed in the deadline
|
18.9
|
Penalties for not keeping the GUARANTEES in force
|
(Guarantee Value) x (number of Days in which the GUARAN
TEE is not in force)
|
||
Penalty = |
--------------------------------------------------------------------------------
|
|
UIT
|
18.10
|
Independence of penalties from administrative sanctions
|
18.11
|
Procedure of payment of penalties
|
18.11.1
|
The penalties may be discounted from disbursements indicated in the fourteenth Clause of the FINANCING CONTRACT. The payment of penalties does not imply a waiver of the right of FITEL to claim the compensation for damages, if any, neither its right to terminate the FINANCING CONTRACT, according to Section 19.2. of the nineteenth Clause of the FINANCING CONTRACT.
|
18.11.2
|
When there are penalties that are not covered by a pending disbursement of payment, or when there is no disbursement from which said penalties may be discounted, or in case that in the last four months of the OPERATION PERIOD there is any amount of penalties to collect by FITEL; THE CONTRACTOR must cancel the difference directly to FITEL in a term of fifteen (15) DAYS, counted since the notification of collection. In case of non compliance of said payment, once the appointed procedura in this paragraph has been exhausted, we shall proceed to execute the GUARANTEE OF PERFORMANCE BOND GUARANTEE OF THE FINANCING CONTRACT for the Collection of the owed amount.
|
19.1
|
For expiration of the term of the FINANCING CONTRACT.
|
19.2
|
Termination by FITEL
|
19.2.1
|
FITEL may terminate THE FINANCING CONTRACT of full right by some of the following grounds:
|
a)
|
When THE CONTRACTOR is declared in a situation of bankruptcy before the Commission of Insolvency Proceedings of the National Institute of Defense of Competence and Intellectual Property– INDECOPI or the person acting as such.
|
b)
|
Due to the lack of renewal of guarantees indicated in the fifteenth Clause of the FINANCING CONTRACT.
|
c)
|
Due to the unjustified non compliance of the DEFINITIVE SCHEDULE OF ACTIVITIES OF THE ACCESS NETWORK OR THE DEFINITIVE SCHEDULE OF ACTIVITIES OF THE TRANSPORT NETWORK; provided said non compliance assessed by FITEL, results in a non compliance of the activities within the INVESTMENT PERIOD of THE ACCESS NETWORK or within the INVESTMENT PERIOD of THE TRANSPORT NETWORK referred in the TECHNICAL SPECIFICATIONS.
|
d)
|
For unjustified non compliance of the TECHNICAL SPECIFICATIONS and, in general, of the obligations agreed in the FINANCING CONTRACT.
|
e)
|
For not complying with providing the service of access to Internet or, if applicable, of the access to Intranet, in some of the BENEFICIARY LOCALITIES or any of the MANDATORY PAID INSTITUTIONS in an unjustifiable way for causes attributable to THE CONTRACTOR.
|
f)
|
When there are deviations in the use of the AWARDED FINANCING, or is given a different destiny for which it was granted; without prejudice of the agreement made in the paragraph 10.2 of the Tenth Clause of the FINANCING CONTRACT.
|
g)
|
For unjustified non compliance of the TECHNICAL PROPOSAL, except modifications established between the PARTIES.
|
h)
|
When FITEL had knowledge that the OPERATOR has transferred its MINIMUM PARTICIPATION to THE CONTRACTOR, before three (03) years, counted since the CLOSING DATE.
|
i)
|
For loss of the Concession of Public Telecommunications Service or loss of the registration in the registry of services of added value to provide the Public Telecommunication Services established in the TECHNICAL SPECIFICATIONS.
|
j)
|
When the amount of penalties referred to the INVESTMENT PERIOD of THE ACCESS NETWORK or the INVESTMENT PERIOD of THE TRANSPORT NETWORK have exceeded the amount in force of the amount of the ADVANCE GUARANTEE and the PERFORMANCE BOND GUARANTEE of THE FINANCING CONTRACT, .
|
l)
|
For non compliance of the obligations of CLOSURE OF THE FINANCING CONTRACT.
|
m)
|
For reasons of convenience, importance or interest of the Peruvian Government, without being necessary the expression of cause in this case.
|
n)
|
For refusing to transfer the ownership and title in favor of the MTC or of FITEL the ASSETS OF THE TRANSPORTATION NETWORK or of the ACCESS NETWORK respectively. This ground includes the negative to make the acts necessary to formalize or improve said transfers.
|
o)
|
Refuse to provide all the facilities to the MTC, to FITEL and to the concessionaire of the operation of the TRANSPORTATION NETWORK that these require with the purpose to facilitate the bid and commissioning of said component of the AWARDED PROJECT.
|
p)
|
For breach of the obligation to sanitize the ASSETS of the ACCESS NETWORK or the ASSETS of the TRANSPORT NETWORK, according to what is stated in paragraph 7.34 or 7.39 of the seventh clause of this contract respectively
|
19.2.2
|
In the cases of termination of the FINANCING CONTRACT indicated in the preceding Section, with exception of the provisions made in literal m), FITEL will be empowered to: (i) execute the PERFORMANCE BOND GUARANTEE OF THE FINANCING CONTRACT referred in the Fourteenth Clause; and, (ii) require THE CONTRACTOR a compensation for damages caused due to its non compliance.
|
19.2.3
|
In case that THE CONTRACTOR has not acquired the ASSETS OF THE ACCESS NETWORK or ASSETS OF THE TRANSPORTATION NETWORK; and the FINANCING CONTRACT is terminated during the INVESTMENT PERIOD of the ACCESS NETWORK or the INVESTMENT PERIOD of the TRANSPORT NETWORK by virtue of literals a) until o) of the preceding Section 19.2.1., with exception of literals e),) and m), THE CONTRACTOR shall return to FITEL the integrity of the AWARDED FINANCING disbursed until that time or, the guarantees will be executed.
|
19.2.4
|
In case that THE CONTRACTOR has acquired the ASSETS OF THE ACCESS NETWORK or ASSETS OF THE TRANSPORTATION NETWORK without proceeding to its installation and the FINANCING CONTRACT is terminated during the INVESTMENT PERIOD of the ACCESS NETWORK or the INVESTMENT PERIOD of the TRANSPORT NETWORK respectively by virtue of literals a) until o) of the preceding Section 19.2.1., with exception of literals e), and m), the PARTIES shall subscribe the corresponding award minutes and THE CONTRACTOR will endorse in favor of FITEL the insurance policies referred in Section 7.21 of the Seventh Clause of the FINANCING CONTRACT and will return the non executed part of the disbursement of the AWARDED FINANCING or, the guarantees will be executed.
|
19.2.5
|
In case that THE CONTRACTOR has acquired the ASSETS OF THE ACCESS NETWORK or the ASSETS OF THE TRANSPORTATION NETWORK, and it has been installed and the FINANCING CONTRACT is terminated by virtue of paragraphs from a) to the literal o) of the preceding Section 19.2.1., as appropriate, the PARTIES shall subscribe the corresponding award minutes and THE CONTRACTOR will endorse in favor of FITEL the insurance policies referred in Section 7.21 of the Seventh Clause of the FINANCING CONTRACT.
|
19.2.6
|
In the case that THE CONTRACTOR has acquired and made the installation of the ASSETS OF THE ACCESS NETWORK or the ASSETS OF THE TRANSPORTATION NETWORK and the FINANCING CONTRACT is terminated by virtue of literal m) of Section 19.2.1., the PARTIES will subscribe the corresponding award minutes and THE CONTRACTOR will endorse in favor of FITEL the insurance policies referred in Section 7.21 of the Seventh Clause of the FINANCING CONTRACT and THE CONTRACTOR will keep the amount of the AWARDED FINANCING received in the part equivalent to the supply value.
|
19.2.7
|
In all the assumptions of termination by FITEL in which the corresponding award minutes is subscribed and the endorsement of the policies is made on the ASSETS OF THE ACCESS NETWORK and of the TRANSPORTATION NETWORK, it shall not be included neither in the minutes subscription neither in the endorsement in favor of FITEL of the policy those equipment and/or preexisting installations at the enactment of the FINANCING CONTRACT, that are used to provide the proposed services in the AWARDED PROJECT.
|
19.3
|
Termination by THE CONTRACTOR
|
19.3.1
|
THE CONTRACTOR may terminate the FINANCING CONTRACT of full right, by the following grounds:
|
|
a)
|
Lack of some disbursement by FITEL, provided THE CONTRACTOR has complied with all the obligations indicated in the Seventh Clause of the FINANCING CONTRACT and THE CONTRACTOR has corrected all the OBJECTIONS of the SUPERVISION REPORT; or,
|
|
b)
|
Non justified negative of FITEL to receive the INSTALLATION for a term greater than one hundred and twenty (120) DAYS; or,
|
|
c)
|
Before the delay of FITEL in the disbursement of a quota for more than one hundred and twenty (120) DAYS, for reasons not attributable to THE CONTRACTOR.
|
19.3.2
|
In such cases, THE CONTRACTOR will preserve the ownership of the ASSETS OF THE ACCESS NETWORK and of the TRANSPORTATION NETWORK and the disbursements effectively executed, prior reconciliation of balances; will be obliged to return the PERFORMANCE BOND GUARANTEE OF THE FINANCING CONTRACT.
|
19.4
|
Termination by Mutual Agreement
|
|
Under this assumption, the PARTIES will perform the reconciliation of balances, if applicable.
|
|
In said assumption of termination, FITEL shall return the corresponding guarantee; likewise, the PARTIES declare that the payment for damages will not be claimed.
|
20.1
|
Prior to the termination of the FINANCING CONTRACT, the affected PARTY by the non compliance will send to the PARTY that has failed to comply, a notarial letter communicating the non compliance and terminating it of full right.
|
20.2
|
Regarding the assumptions foreseen in the nineteenth Clause of the FINANCING CONTRACT, FITEL may require to THE CONTRACTOR, to satisfy the provision subject matter of non compliance in a maximum term of fifteen (15) DAYS, and may establish higher terms attending exceptional circumstances upon determination of FITEL under penalty of terminating the FINANCING CONTRACT of full right according to the provisions set forth in Article 1429º of the Peruvian Civil Code.
|
20.3
|
According to the provisions of Sections 3.20 and 3.21 of the third clause and Section 4.6. of fourth clause of the FINANCING CONTRACT in all cases of termination that are produced once the OPERATION PERIOD has begun and only in the case that FITEL requests it, THE CONTRACTOR must continue with the operation and maintenance for the term required by FITEL, which shall not exceed from eight (08) months, counted since the termination communication of the FINANCING CONTRACT, in order to guarantee the continuity of the Public Telecommunications Services. During said term, FITEL will continue delivering the corresponding financing for the proportional number of DAYS elapsed.
|
20.4
|
The indication made in the preceding section will be also of application for the assumption foreseen in literal a) of the paragraph 19.2.1 of thenineteenth Clause of the FINANCING CONTRACT, in which case, a temporary administration will be conformed of the AWARDED PROJECT composed by representatives of FITEL and will represent it before the Meeting of Creditors with the purpose to secure that THE CONTRACTOR continues with the provision of services established in this contract.
|
20.5
|
In all cases of termination of the FINANCING CONTRACT, a reconciliation of balances will be made until the termination date.
|
21.1
|
Is the stage of execution of the FINANCING CONTRACT that will be made within the last semester of the OPERATION PERIOD and that will culminate with the conclusion of the FINANCING CONTRACT by the compliance of its obligations.
|
21.2
|
For the CLOSURE OF THE FINANCING CONTRACT, the PARTIES shall perform the following activities:
|
i.
|
THE CONTRACTOR shall correct the OBJECTIONS formulated by FITEL, in a maximum term of sixty (60) DAYS since its notification.
|
ii.
|
Once the OBJECTIONS are corrected by THE CONTRACTOR, previously verified by FITEL, THE PARTIES within a maximum term of fifteen (15) DAYS, will reconcile the calculus and payment of penalties incurred by THE CONTRACTOR; and the financial liquidation of disbursements and payments to which the PARTIES are obliged.
|
iii.
|
Once the information referred in the preceding literal ii) is reconciled, THE PARTIES, shall subscribe the agreement referred in Section 21.3. of this clause.
|
21.3
|
The CLOSURE OF THE FINANCING CONTRACT will be formalized through the subscription of the corresponding agreement, in which the PARTIES declare that there are no outstanding obligations to comply and that the financial liquidation has been satisfactorily made.
|
21.4
|
On the ten (10) DAYS counted since the subscription of the agreement of the CLOSURE OF THE FINANCING CONTRACT, the last disbursement will be made and, later, in a maximum term of five (05) BUSINESS DAYS the corresponding guarantees will be returned.
|
21.5
|
In case of non compliance of the obligations for the CLOSURE OF THE CONTRACT, FITEL shall require to THE CONTRACTOR its compliance in a term no later than 15 DAYS, under penalty to terminate the FINANCING CONTRACT of full right, consequently it will forfeit the last disbursement and shall proceed to the execution of the PERFORMANCE BOND GUARANTEE OF THE FINANCING CONTRACT
|
22.1.
|
If there are controversies of any nature between THE CONTRACTOR and FITEL related or resulting from this FINANCING CONTRACT, that may not be settled by common agreement by both parties or if there is no mechanism of solution foreseen by this document, they will be decided by an arbitral tribunal in a legal arbitration.
|
22.2
|
The arbitration will be carried out by an Arbitral Tribunal composed by three (03) members.
|
22.3
|
The arbitration will be carried out in the Chamber of Commerce of Lima, of the AMCHAM or other chosen by FITEL or THE CONTRACTOR, according to the demand that comes from any of these parties.
|
22.4
|
The Arbitral Tribunal will be composed as follows:
|
|
•
|
Each one of the PARTIES will appoint one arbitrator and they by common agreement, shall appoint a third arbitrator, who will chair the Arbitral Tribunal.
|
|
•
|
In case one of the PARTIES does not appoint its arbitrator within a term of ten (10) DAYS counted since the date in which one of them declares to the other in written its will to submit to this clause, the arbitrator who has not been appointed, will be appointed by the institution that is in charge of the Management of the arbitration process.
|
|
•
|
In case the PARTIES do not appoint the third arbitrator within a term of sixty (60) DAYS counted since the appointment of the second arbitrator, the third arbitrator will be appointed by the institution that is in charge of the management of the arbitration process.
|
22.5
|
The Arbitral Tribunal shall have a term of ninety (90) BUSINESS DAYS since its installation to issue the corresponding arbitration award, which will be final. Likewise, the Tribunal may be in charge of accurately determining the controversy, and to grant an extension if necessary to issue the award.
|
22.6
|
The place of the arbitration will be the city of Lima. The language to be used in the arbitration process will be Spanish.
|
22.7
|
The Arbitral Tribunal, when issuing the arbitration award, shall determine the form in which the parties must assume the expenses and costs of the arbitration.
|
22.8
|
In case that any of the PARTIES decides to file an action for annulment against the arbitration award before the Judiciary, it must previously constitute in favor of the party or the opposite parties a Letter of Guarantee granted by a first category bank with headquarters in Lima, equivalent to US$ 100,000.00 (One hundred thousand and 00/100 DOLLARS OF THE UNITED STATES OF AMERICA), which will be Joint and several, irrevocable, unconditional and automatically enforceable in case said resource, in final judgment, were not declared well founded. Said Letter of Guarantee must be in force during the process and will be delivered in custody to a notary of the city of Lima.
|
22.9
|
THE FINANCING CONTRACT is subscribed according to the legal regulations of the Republic of Peru, reason by which any controversy resulting from its performance, interpretation, execution, validity and effectiveness will be governed by these legal regulations.
|
23.1
|
THE CONTRACTOR may assign the FINANCING CONTRACT, and transfer or subrogate, totally or partially, the obligations under its charge, prior favorable opinion of FITEL.
|
23.2
|
THE CONTRACTOR is obliged to deliver to FITEL the information it may require, for purposes of the assignment and/or transfer of the FINANCING CONTRACT.
|
23.3
|
In case FITEL approves the assignment, transfer or indicated subrogation, an addendum must be subscribed to the FINANCING CONTRACT.
|
23.4
|
The new contractor, must comply with the same requirements established in the TERMS and the matters that correspond to the FINANCING CONTRACT.
|
24.1
|
Integrant Parts of the Contract
|
|
a)
|
The FINANCING CONTRACT.
|
|
b)
|
The TECHNICAL PROPOSAL.
|
|
c)
|
The CIRCULARS.
|
|
d)
|
The TECHNICAL SPECIFICATIONS.
|
|
e)
|
The TERMS.
|
24.2
|
Waiver of Rights
|
24.3
|
Modification of the Contract
|
24.4
|
Revocation of Contract
|
24.5
|
Intellectual Property
|
25.1
|
All the notifications and communications related to the FINANCING CONTRACT, unless another mechanism or formality is expressly stated, will be made in written, and will be sent from and to the addresses, fax numbers and e-mails indicated in Section 25.3. of this clause, with the corresponding effects established in the same section.
|
25.2
|
Any of the PARTIES may modify the addresses, fax numbers and e-mails, prior communication in written to the other PARTY, sent in the form indicated in Section 25.4. of this clause, with the corresponding effects established in the same section.
|
25.3
|
All the notifications under the FINANCING CONTRACT will be delivered with acknowledgment of receipt, or with any other mechanism that credits the date of delivery of the notification, and will be effective on the date indicated in the corresponding acknowledgment of receipt.
|
FITEL
|
||
Attention
|
: Technical Secretariat of FITEL
|
|
Address
|
: Jr. Zorritos 1203, Lima 1.
|
|
Fax №
|
: 615-7815
|
|
E-mail
|
: fitel@mintc.gob.pe
|
Attention
|
: Mrs. Arieh Gad Rohrstock and Miss Yveth Fiorella Romero Guia.
|
Address
|
: Av. Carlos Villarán N° 140, Floor N° 12 of the Tower “A” Interbank, District La Victoria, Lima.
|
Fax №
|
: 266-0933
|
E-mail
|
:
yromero@gilatla.com
and legalperu@gilatla.com
|
25.4
|
Any change of data of FITEL or of THE CONTRACTOR must be made through written communication sent to the other PARTY by notary and have effect since the following day of the date indicated in the corresponding acknowledgment of receipt.
|
ANNEX Nº 1
|
:
|
BENEFICIARY LOCALITIES AND MANDATORY PAID INSTITUTIONS
|
ANNEX Nº 2
|
:
|
TECHNICAL PROPOSAL
|
ANNEX Nº 3
|
:
|
DEFINITIVE SCHEDULE OF THE ACTIVITIES OF THE CONTRACTOR
|
ANNEX Nº 4
|
:
|
ECONOMIC PROPOSAL
|
ANNEX Nº 5
|
:
|
ADVANCE GUARANTEE AND PERFORMANCE BOND OF THE FINANCING CONTRACT
|
ANNEX Nº 6
|
:
|
TECHNICAL SPECIFICATIONS
|
ANNEX Nº 7
|
:
|
TERMS THAT GOVERN THE BID
|
ANNEX Nº 8
|
:
|
CIRCULARS
|
ANNEX N° 9
|
:
|
PROCEDURE OF CALCULUS FOR AVAILABILITY
|
ANNEX N° 10
|
:
|
FORMAT OF INVESTMENT COSTS OF THE ACCESS AND TRANSPORTATION NETWORK
|
ANNEX N° 11
|
:
|
GUIDELINES FOR THE CHANGE OF MANDATORY PAID INSTITUTIONS
|
Item
|
Description
|
Unit
|
Quantity
|
Unitary Price $
|
Unitary Price S/.
|
Total Price $
|
Total Price S/.
|
I
|
INFRASTRUCTURE OF STATIONS
|
||||||
Tower Type 1
|
|||||||
Tower Type 2
|
|||||||
Tower Type 3
|
|||||||
Tower Type 4
|
|||||||
Tower Type 5
|
|||||||
Anchor
|
|||||||
Support
|
|||||||
Others
|
|||||||
II
|
ASSOCIATED CIVIL WORKS
|
||||||
Perimeter Enclosure
|
|||||||
Physical Edge security
|
|||||||
Booths
|
|||||||
Tower Base
|
|||||||
Inst. of support Bracket type for antenna of RF.
|
|||||||
Others
|
|||||||
III
|
MANPOWER
|
||||||
Installation of towers
|
|||||||
Associated civil works
|
|||||||
Material haulage
|
|||||||
Equipment haulage
|
|||||||
Others
|
|||||||
IV
|
LICENSES AND PERMITS
|
||||||
Municipal permits
|
|||||||
SERNANP
|
|||||||
CIRA
|
|||||||
Others
|
|||||||
V
|
Energy and security system of Stations
|
||||||
Place conditioning
|
|||||||
Batteries bank
|
|||||||
UPS
|
|||||||
Generators
|
|||||||
Fuel tank
|
|||||||
Electrical panels
|
|||||||
Rectifiers
|
|||||||
Ground
|
|||||||
Light facilities
|
|||||||
Lightning rod
|
|||||||
Solar panels
|
|||||||
Ground installation
|
|||||||
Electric network installation
|
|||||||
Others
|
Item
|
Description
|
Unit
|
Quantity
|
Unitary Price $
|
Unitary Price S/.
|
Total Price $
|
Total Price S/.
|
I
|
Optical Equipment
|
||||||
Switches and routers of connection to the transportation network
|
|||||||
Connectors
|
|||||||
Others
|
|||||||
II
|
Radio Equipment
|
||||||
Ptp Radios
|
|||||||
Base Radios
|
|||||||
AP Radios
|
|||||||
Antennas
|
|||||||
Connectors
|
|||||||
Amplifiers
|
|||||||
Others
|
|||||||
III
|
MANPOWER
|
||||||
Radios installation
|
|||||||
Network configuration
|
|||||||
Others
|
|||||||
IV
|
User Modules
|
||||||
Computers
|
|||||||
UPS
|
|||||||
Switch and cables
|
|||||||
Others
|
|||||||
V
|
Management Center
|
||||||
Management system of radios
|
|||||||
Management system of the electric part
|
|||||||
Management system of security and alarms
|
|||||||
Servers
|
|||||||
Others
|
Item
|
Description
|
Unit
|
Quantity
|
Unitary Price $
|
Unitary price S/.
|
Total Price $
|
Total Price S/.
|
I
|
Preparation of plans and methodology
|
||||||
Training
|
|||||||
Awareness
|
|||||||
WEB applications
|
|||||||
Others
|
|||||||
II
|
Execution of activities
|
||||||
Cost of training service
|
|||||||
Cost of awareness service
|
|||||||
Amounts of diffusion contracts. Servers, etc.
|
|||||||
Others
|
|||||||
III
|
Modules
|
||||||
Computers
|
|||||||
UPS
|
|||||||
Switch and cables
|
|||||||
Others
|
|||||||
IV
|
Management Center
|
||||||
Management System of Radios
|
|||||||
Management system of the electric network
|
|||||||
Management system of security and alarms
|
|||||||
Others
|
Item
|
Optical Fiber
|
Unit
|
Quantity
|
Unitary Price $
|
Unitary Price S/.
|
Total Price $
|
Total Price S/.
|
I
|
Acquisition
|
||||||
Optical Fiber x reel
|
|||||||
Optical Equipment (detail per type)
|
|||||||
Switches
|
|||||||
Connectors
|
|||||||
Others
|
|||||||
II
|
Nodes
|
||||||
Conditioning
|
|||||||
Cabinets
|
|||||||
Air conditioning system
|
|||||||
Fire system
|
|||||||
Cables
|
|||||||
Security system
|
|||||||
Others
|
|||||||
III
|
Manpower
|
||||||
Installation of fiber
|
|||||||
Equipment installation
|
|||||||
Others
|
|
1.
|
THE CONTRACTOR has the obligation to provide the service of access to Internet to each one of the MANDATORY PAID INSTITUTIONS located in the BENEFICIARY LOCALITIES according to Annex 01 of the FINANCING CONTRACT.
|
|
2.
|
The changes of the MANDATORY PAID INSTITUTION, BENEFICIARY LOCATION and NODES, operate in the following cases:
|
|
2.1
|
That the MANDATORY PAID INSTITUTION already has the service of access to Internet and declares that it does not want to hire the service to THE CONTRACTOR at least during the INVESTMENT PERIOD of the ACCESS NETWORK
|
|
2.2
|
That the MANDATORY PAID INSTITUTION put impediments to the installation of the equipment for any none justified reason.
|
|
2.3
|
At the request of the representative of MANDATORY PAID INSTITUTION and /or the Titular of the Sector or to whom the appropriate authority has been delegated, and provided that there are situations that prevent the sustainability of the service during the OPERATION PERIOD, such as:
|
|
1.
|
The Mandatory Paid Institution be relocated or deactivated.
|
|
2.
|
Express request to do without with the service
|
|
3.
|
Express request to relocate the service.
|
|
2.4
|
That for any reason, whether technical or by impediment of the population or authorities, among others, the POINT OF PRESENCE (POP) may not be installed that will supply the service to the BENEFICIARY LOCALITY, and in this case they could make the change of all the MANDATORY PAID INSTITUTIONS. Consequently, a change of BENEFICIARY LOCATION will take place.
|
|
2.5
|
That the Beneficiary LOCATION has MSAN, DSLAM, wardrobe, URA or other access point of presence other than satellite, allowing the hiring of Internet access service. In this case, the FITEL reserves the right to assess whether the service offered is similar or superior to the services to be provided through the ACCESS NETWORK, in which case it will proceed to change the BENEFICIARY LOCALITY and MANDATORY PAID INSTITUTIONS associated with it; being FITEL who determines the BENEFICIARY LOCALITY and the replacement MANDATORY PAID INSTITUTIONS
|
|
2.6
|
that for some reason, whether technical or impediment of the population or authorities or others considered as fortuitous or force majeure cases, a node can't be installed, proceeding in this case the change of MANDATORY PAID INSTITUTIONS locand be if, with the change of BENEFICIARY LOCATION.
|
|
2.7
|
In all the cases of this paragraph, THE CONTRACTOR must present all supporting documents and FITEL will assess and determine if said changes proceed, communicating to THE CONTRACTOR the result of its evaluation.
|
|
3.
|
The MANDATORY PAID INSTITUTIONS of replacements may be proposed by THE CONTRACTOR and will be given preference according to the following considerations:
|
|
3.1
|
The replacements of the MANDATORY PAID INSTITUTIONS will be given preferably within the same BENEFICIARY LOCALITY.
|
|
3.2
|
The educational institutions may be only replaced by another educational institution, in this case THE CONTRACTOR may solicit FITEL the exchange for another academic institution located in another BENEFICIARY LOCATION. Exceptionally, FITEL may approve the replacement of an educational institution by a health facility, police station or other public institution, located in the same locality BENEFICIARY, when it is established that technically it is not feasible to attend another school located in another town
|
|
3.3
|
The MANDATORY PAID INSTITUTIONS different to the educational institutions may be replaced by police stations, health establishments, municipalities or other public institution, in the same or different locality.
|
|
3.4
|
In all cases of this paragraph, the FITEL will evaluate and determine if those changes come, informing the contracted approval
|
|
4.
|
As indicated in paragraph 2 above, in case that becomes necessary to replace a BENEFICIARY LOCATION, the CONTRACTOR or FITEL may suggest new replacements being FITEL who will approve the admissibility of such change. Similar procedure will be done with regard to the nodes
|
|
5.
|
In no case THE CONTRACTOR may require additional financing to FITEL basing it in the replacement of some MANDATORY PAID INSTITUTION or some BENEFICIARY LOCATION or node.
|
Reference:
|
Public Tender for the execution of the Projects “Broadband Installation for Comprehensive Connectivity and Social Development of the Tumbes Region”, “Broadband Installation for Comprehensive Connectivity and Social Development of the Piura Region”, “Broadband Installation for Comprehensive Connectivity and Social Development of Cajamarca Region” and “Broadband Installation for Comprehensive Connectivity and Social Development of the Cusco Region.”
|
PROJECT:
|
“Broadband Installation for Comprehensive Connectivity and Social Development of the Cusco Region”
|
SHORTLISTED BIDDER:
|
GILAT NETWORKS PERU S.A.
|
COMPETITION FACTOR
|
UNITS
|
IN LETTERS
|
IN NUMBERS
|
Beneficiary localities additional
|
Number
|
Thirty four
|
34
|
Tablets
|
Number
|
Twenty thousand one hundred twenty
|
20 120
|
Access to internet free payment main square of BENEFICIARY LOCALITIES
|
Number
|
Seventy one
|
71
|
COMPETITION FACTOR
|
UNITS
|
IN LETTERS
|
IN NUMBERS
|
FINANCING OF THE TRANSPORTATION NETWORK
|
Dollars
(US$)
|
Thirty two million three hundred thirty one thousand and 00/100
|
32 331 000.00
|
ACCESS NETWORK FINANCING
|
Dollars
(US$)
|
Seventy six million sixty eight thousand and 00/100
|
76 068 000.00
|
|
(1)
|
The figures will be written with a maximum of two (02) decimals.
|
CALENDAR DAY
|
UNITS
|
IN LETTERS
|
IN NUMBERS
|
Number of calendar days reduction
|
calendar day
|
Sixty
|
60
|
1.1.
|
FITEL is a fund for the provision of universal access, meaning access in the national territory to a set of essential telecommunications services, capable of transmitting voice and data, which has, among its objectives, reducing the gap in access to telecommunications services in rural areas and in places considered of social interest.
|
1.2.
|
By Law No. 28900 was granted to FITEL the status of legal entity of public law. FITEL is assigned to the Transport and Communications Sector. The above mentioned law was regulated by Supreme Decree No. 010-2007 MTC.
|
1.3.
|
The Regulation for the Administration and Functions of the Telecommunications Investment Fund - FITEL, approved by Supreme Decree No. 036-2008-MTC
|
1.4.
|
The "Guidelines of the policy for the opening of the telecommunications market in Peru", approved by Supreme Decree No. 020-98-MTC, published on August 5
th
, 1998 and its amendments.
|
1.5.
|
Also, the "Guidelines of policies to promote greater access to Public Telecommunications Services in rural areas and places of preferential social interest", approved by Supreme Decree No. 049-2003-MTC published on August 17
th
, 2003, indicate that its goal is to accelerate the incorporation, under equal conditions, of populations in rural areas and of social interest, to the opportunities offered by Information Technology and Communication, promoting their integration into the public telecommunications network.
|
1.6.
|
By Supreme Decree No. 024-2008-MTC, published on August 16
th
, 2008, was approved the General Regulatory Framework to promote the development of Public Telecommunications Services in rural areas and places of social interest.
|
1.7.
|
Ministerial Resolution No. 224-2012 MTC/01, published on May 12
th
, 2012, whereby the Institutional Strategic Plan of Transportation and Communications Sector was approved, which establishes as one of the specific objectives "to promote the deployment of telecommunications infrastructure and services that enable connectivity and virtual integration of the country, prioritizing areas of social interest and borders"; specifying as target to achieve by 2016, that Peru has 100% districts served by at least one telecommunications service.
|
1.8.
|
Law N° 29904, Law for Promotion of Broadband and Construction of the National Fiber Optic Backbone Network stated as a public necessity and national interest, the construction of a National Fiber Optic Backbone Network which gathers together all the capitals of the provinces of the country and the deployment of high-capacity networks that integrate all districts to enable broadband connectivity fixed and/or mobile and mass distribution across the country, in terms of competition.
|
1.9.
|
With Supreme Decree No. 014-2013-MTC was approved the Regulation of Law No. 29904 – Law for Promotion of Broadband and the Construction of the National Fiber Optic Backbone Network.
|
1.10.
|
Law No. 30228, amending Law No. 29022 –Law to expand telecommunications infrastructure, called Law to enhance the expansion of Telecommunications Infrastructure.
|
1.11.
|
With Official Letter No. 1179-2014 MTC/24, dated July 2
nd
, 2014, PROINVERSIÓN was commissioned to prepare the TENDER for selecting the Operator who will be responsible for implementing the project “Installation of Broadband for Comprehensive Connectivity and Social Development of the Ayacucho Region”
|
1.12.
|
Supreme Resolution No. 036-2014_EF dated August 18
th
, 2014-EF, published on August 19
th
, 2014, whereby the resolution adopted at the meeting of the Steering Council of PROINVERSIÓN of July 14
th
, 2014, which incorporated to the process of Private Investment Promotion of the Project “Installation of Broadband for Comprehensive Connectivity and Social Development of the Ayacucho Region”
|
1.13.
|
Supreme Resolution No. 042-2014-EF, published on August 26
th
, 2014, ratified the agreement that determined the modality under which the private investment promotion in the Project "Installation of Broadband for Comprehensive Connectivity and Social Development of the Ayacucho Region”, will be established in paragraph a) of Article 2 of Legislative Decree No. 674; and the Agreement that approved the Promotion Plan of the Project.
|
1.14.
|
Under PROINVERSION Agreement No. 622-2-2014-CPC, dated August 27
th
, 2014 the Steering Council of PROINVERSION agreed to approve the Terms and Conditions of the Tender of the private investment promotion process for the implementation of the project: "Installation of Broadband for Comprehensive Connectivity and Social Development of the Ayacucho Region”.
|
1.15.
|
Under the Agreement of the PROINVERSION Energy and Hydrocarbons Committee - PRO CONNECTIVITY Committee, No. 233-2-2014-Telecommunications, dated December 1, 2014, the Consolidated Text of the tender process Terms and conditions was approved for the process of promotion of private investment for the execution of the project: " Installation of Broadband for Comprehensive Connectivity and Social Development of the Ayacucho Region " which incorporated the amendments to these rules which to date have been submitted to Bidders.
|
1.16.
|
Under the Agreement Proinversion No. 658-4-2015-CPC dated January 20
th
, 2015 the PROINVERSION Board agreed to approve the final version of the financing contract for the process of promotion of private investment for the execution of the project: “Installation of Broadband for Comprehensive Connectivity and Social Development of the Ayacucho Region ".
|
1.17.
|
By Resolutions of the Board of OSIPTEL No. 003-2015-CD / OSIPTEL and 004-2015-CD / OSIPTEL published with date January 11, 2015, the top rates of transport services and internet access were established respectively, corresponding to regional projects Fiber Optic backbone network
|
2.1
|
MINUTES OF AWARD OF THE NETWORK ACCESS ASSETS: It is the document prepared by FITEL whereby the CONTRACTOR transfers ownership of NETWORK ACCESS ASSETS to FITEL, AT THE END OF FINANCING AGREEMENT or when any assumption of Section Nineteenth occurs.
|
2.2
|
MINUTES OF AWARD OF TRANSPORTATION NETWORK ASSETS: The document through which the CONTRACTOR transfers to MTC, the ownership and control of the TRANSPORT NETWORK ASSETS, once the Concession Agreement has been signed between the MTC and the Concessionaire for the operation of the TRANSPORTATION NETWORK or when any of the assumptions of the nineteenth Clause of the FINANCING AGREEMENT occur. This act will be subscribed between the CONTRACTOR and FITEL who will subscribe it in representation of MTC
|
2.3
|
MINUTES OF CONFORMITY OF FACILITIES AND TESTING OF SERVICES OF ACCESS NETWORK: It is the document signed by the CONTRACTOR and FITEL by which the former accepts the results reported in the ACCESS NETWORK SUPERVISION REPORT corresponding to the installations performed. Also, with the signing of this document, compliance with the conditions laid down in the TECHNICAL SPECIFICATIONS, corresponding to the ACCESS NETWORK are certified. The model of the minutes is shown in Exhibit No. 4 ,annex 8B of the Terms and conditions and may be amended, being FITEL who finally determines its final content.
|
2.4.
|
MINUTES OF CONFORMITY OF THE INSTALLATION AND TESTING OF SERVICES OF THE TRANSPORTATION NETWORK: The document prepared by FITEL and signed by the CONTRACTOR and FITEL by which the former accepts the results stated in the TRANSPORTATION NETWORK SUPERVISION REPORT corresponding to the installations made. This document also certifies compliance with the conditions laid down in the TECHNICAL SPECIFICATIONS for total TRANSPORTATION NETWORK. The model of the minutes shown in Exhibit No. 5 of the Annex 8A of the terms and conditions and may be modified, being FITEL who finally determines its final content.
|
2.5.
|
INSTALLATION MINUTES OF NETWORK ACCESS: Is the document that indicates and credits compliance with the installation and operation of any infrastructure, equipment, hardware, software and other information needed to provide access to Internet and Intranet access offered by the ACCESS NETWORK. It is prepared by the CONTRACTOR, approved by FITEL, and signed by both. It is also an Affidavit.
|
2.6.
|
INSTALLATION MINUTES OF TRANSPORTATION NETWORK: Is the document that credits and indicates the compliance with the installation and operation of the major components of the TRANSPORTATION NETWORK. It is made by the CONTRACTOR for each node as well as for the Network Operations Center (NOC) and MAINTENANCE CENTER. The INSTALLATION MINUTES OF TRANSPORTATION NETWORK are signed by the CONTRACTOR and FITEL. It is also an Affidavit.
|
2.7.
|
EXPANSION OF THE AWARDED PROJECT: Is the incorporation of new BENEFICIARY LOCALITIES and/or district capitals, in the area of
influence of the project, which will involve additional subsidy of up to 20% of the FINANCING AWARDED, prior technical appraisal and approval of FITEL. Regarding the ACCESS NETWORK, this extension may be requested by any of the PARTIES within the ACCESS NETWORK INVESTMENT STAGE and regarding the TRANSPORTATION NETWORK within the first six (6) moths of the TRANSPORTATION NETWORK INVESTMENT STAGE.
|
2.8.
|
ACCESS NETWORK ASSETS: These are the assets comprised of metal structures, self-supporting towers, bases foundation, the lot where those structures are placed and all passive elements which make up the NETWORK ACCESS and will be owned and domain of FITEL after the signing of MINUTES OF AWARD OF NETWORK ACCESS ASSETS. The active equipment is owned and domain of the CONTRACTOR.
|
2.9.
|
TRANSPORTATION NETWORK ASSETS: Means all real or personal property that integrates the TRANSPORTATION NETWORK, according to the provisions of the TECHNICAL SPECIFICATIONS of the TRANSPORT NETWORK. These assets will be owned by MTC after the signing of MINUTES OF AWARD OF THE TRANSPORTATION NETWORK ASSETS between the CONTRACTOR and FITEL, who will subscribe the act representing the MTC.
|
2.10.
|
CLOSURE OF THE FINANCING AGREEMENT: It’s the process by which the PARTIES agree the completion of their contractual rights and obligations. This procedure will take place during the second half of OPERATION PERIOD; as such, it will be understood as a stage within this period.
|
2.11.
|
FINANCING AGREEMENT: It is the legal relationship held between FITEL and the CONTRACTOR, whose purpose is to regulate:
|
|
a)
|
The installation of the TRANSPORTATION NETWORK and ACCESS NETWORK according to what is stated in the relevant TECHNICAL SPECIFICATIONS;
|
|
b)
|
The operation and maintenance of the ACCESS NETWORK according to what is stated in the TECHNICAL SPECIFICATIONS;
|
|
c)
|
The implementation of CAPACITY BUILDING; and
|
|
d)
|
The use of the AWARDED FUNDING for implementing the Awarded Project.
|
|
e)
|
The disbursement of the AWARDED FUNDING to the CONTRACTOR by- FITEL
|
2.12.
|
DAYS: It should be understood as calendar days (working days, non-working and holidays), unless expressly stipulated otherwise.
|
2.13.
|
WORKING DAYS: It should be understood to days other than Saturday, Sunday or nonworking holiday in the city of Lima (including non-working days for the public administration). Also understood as holidays, those calendar day on which banks in the city of Lima, are not obliged to serve the public by order of governmental authority; and holidays established by the competent authority of the Ayacucho Region.
|
2.14.
|
The CONTRACTOR: Is the legal entity awarded the tender with whom FITEL signs this FINANCING AGREEMENT and who will implement the AWARDED PROJECT.
|
2.15.
|
INSTALLATION STAGE: The time in which the CONTRACTOR displays the infrastructure, equipment and other items in the ACCESS NETWORK and TRANSPORTATION NETWORK fulfilling the provisions of the TECHNICAL SPECIFICATIONS. The deadline for completion of this stage is the indicated in the Technical Proposal, which shall not be less than 10 months nor more than 12 months since the DATE OF CLOSURE.
|
2.16.
|
DATE OF CLOSURE: The date, place and time to be carried out the acts set forth in Paragraph 11.3 of the TERMS AND CONDITIONS.
|
2.17.
|
FINANCING AWARDED: Is the amount of the FINANCING granted for the TRANSPORTATION NETWORK and ACCESS NETWORK that corresponds to the the AWARDED PROJECT, as provided in the Technical Proposal in accordance with the TECHNICAL SPECIFICATIONS. This includes all applicable taxes and contributions to the MTC, FITEL and OSIPTEL. (which are established in the TUO of the Telecommunications Act approved by Supreme Decree No. 013-93-TCC, in the TUO of the General Regulation of the Telecommunications Act, approved by Supreme Decree No. 020-2007-MTC and its amendments, such as fee for commercial exploitation of service and contribution to FITEL, as well as the contribution by regulation to OSIPTEL established by Law No. 27332 in accordance with Supreme Decree No. 103-2003-PCM and Supreme Decree No. 012-2002-PCM, as amended, or the rules that substitute.
|
2.18.
|
ACCESS NETWORK FINANCING: Is the non-refundable amount recorded in the ECONOMIC PROPOSAL expressed in US$ and which FITEL must deliver to the CONTRACTOR as part of its obligations as stipulated in the FINANCING AGREEMENT. This includes the necessary financing for the CONTRACTOR to acquire, install, operate and maintain and run the THE ACCESS NETWORK and implements the CAPACITY BUILDING, providing all the services involved in the Technical Proposal in accordance with the TECHNICAL SPECIFICATIONS. This includes all applicable taxes and contributions to the MTC, OSIPTEL and FITEL. (which are established in the TUO of the Telecommunications Act approved by Supreme Decree No. 013-93-TCC, in the TUO of the General Regulation of the Telecommunications Act, approved by Supreme Decree No. 020-2007-MTC and its amendments, such as fee for commercial exploitation of service and contribution to FITEL, as well as the contribution by regulation to OSIPTEL established by Law No. 27332 in accordance with Supreme Decree No. 103-2003-PCM and Supreme Decree No. 012-2002-PCM, as amended, or the rules that substitute)
|
2.19.
|
FINANCING OF THE TRANSPORTATION NETWORK: Is the non-refundable amount recorded in the ECONOMIC PROPOSAL expressed in US$ and which FITEL shall deliver to the CONTRACTOR as part of its obligations as stipulated in the FINANCING AGREEMENT. Includes the necessary financing for the CONTRACTOR to purchase and install the TRANSPORTATION NETWORK in line with the TECHNICAL SPECIFICATIONS. This includes all taxes.
|
2.20.
|
ADVANCE PAYMENT GUARANTEE: The joint and several, unconditional, irrevocable letter of guarantee, without benefit of excussionnn or division, and automatic enforceable on behalf of FITEL, that the CONTRACTOR shall deliver on the CLOSING DATE to ensure the correct use of first disbursement of the FINANCING OF THE ACCESS NETWORK and the TRANSPORT NETWORK in accordance with the provisions of this FINANCING AGREEMENT. It must be issued in accordance with the conditions established in the TERMS AND CONDITIONS.
|
2.21.
|
PERFORMANCE BOND OF THE FINANCING AGREEMENT: Is the joint and several, unconditional, irrevocable letter of guarantee, without benefit of excussio or division, and of automatic enforceable on behalf of FITEL, that the CONTRACTOR shall deliver at the CLOSING DATE, in order to support the compliance with obligations under the FINANCING AGREEMENT. It must be issued in accordance with the conditions established in the TERMS AND CONDITIONS.
|
2.22.
|
MANDATORY PAID INSTITUTION: Is the public institution referred to in Exhibit 8B of the TERMS AND CONDITIONS, in which the CONTRACTOR undertakes to install the necessary equipment and provide services of the AWARDED PROJECT during the term of the FINANCING AGREEMENT.
|
2.23.
|
APPLICABLE LAW: These are the standards listed in Paragraph 1.4. of the TERMS AND CONDITIONS, including its amendments, and any other according to the Peruvian laws applicable.
|
2.24.
|
BENEFICIARY LOCALITIES: are the locations where the CONTRACTOR, according to the terms of this FINANCING AGREEMENT, must install, operate and maintain the services offered in AWARDED PROJECT. These areas are included in the list contained in Exhibit 1 of this FINANCING AGREEMENT. The ADDIOTIONAL BENEFICIARY LOCALITIES offered by the CONTRACTOR become BENEFICIARY LOCALITIES from the moment of the signing of the FINANCING CONTRACT.
|
2.25.
|
MTC: Is the Ministry of Transportation and Communications.
|
2.26.
|
APPLICABLE REGULATIONS: These are the APPLICABLE LAWS and any other that, under the law, is applicable to the performance of the FINANCING AGREEMENT, including standards of quality and continuity of services and the tax regime applicable to taxpayers in the country and taxpayers of local and regional governments in the country that is not governed by FINANCING AGREEMENT.
|
2.27.
|
PARTY: FITEL or the CONTRACTOR, as applicable.
|
2.28.
|
PARTIES: FITEL and the CONTRACTOR equally.
|
2.29.
|
INVESTMENT PERIOD OF THE ACCESS NETWORK: It is the period, the maximum length is fourteen (14) months from the CLOSING DATE, comprising the activities referred to in INSTALLATION STAGE and supervision activities to approve the installations made, referred to in the TECHNICAL SPECIFICATIONS OF THE ACCESS NETWORK; finishing with the signing of the MINUTES OF CONFORMITY OF FACILITIES AND TESTING OF SERVICES OF THEACCESS NETWORK.
|
2.30.
|
INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK: is the period, which maximum length is fourteen (14) months from the CLOSING DATE, comprising the activities covered by the INSTALLATION STAGE and monitoring activities to give according to installations made as referred to in the TECHNICAL SPECIFICATIONS OF THE TRANSPORTATION NETWORK; culminating with the signing of the MINUTES OF CONFORMITY OF FACILITIES AND TESTING OF SERVICES OF THE TRANSPORTATION NETWORK.
|
2.31.
|
PERIOD OF OPERATION: The duration of one hundred twenty (120) months from the day following the completion of the ACCESS NETWORK NVESTMENT PERIOD. In which the CONTRACTOR will operate and maintain the ACCESS NETWORK to ensure its operation and provision of services comprising the AWARDED PROJECT. In this period of time,the services will be provided commercially.
|
2.32.
|
TRIAL PERIOD: The time when THE CONTRACTOR will operate and maintain, if applicable, the TRANSPORTATION NETWORK for the exclusive use of the AWARDED PROJECT and allow the operation of the ACCESS NETWORK. This period shall not exceed twelve (12) months, which start from the day following the completion of the TRANSPORTATION NETWORK INVESTMENT PERIOD, culminating with the signing of MINUTES OF AWARD OF THE TRANSPORTATION NETWORK ASSETS.
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2.33.
|
PROINVERSIÓN: Private Investment Promotion Agency, an organization referred to in Law No. 28660 and the Ministerial Resolution No. 083-2013-EF/10 or regulations that substitute them.
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2.34.
|
AWARDED PROJECT: Is the PROPOSAL of the QUALIFIED BIDDER declared the winner of the Award by the COMMITTEE
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2.35.
|
ACCESS NETWORK: The telecommunications network implemented according to the criteria in the appropriate TECHNICAL SPECIFICATIONS, which allows the end user to access the public telecommunications services and access to intranet of the AWARDED PROJECT, using the TRANSPORTATION NETWORK.
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2.36.
|
TRANSPORTATION NETWORK: This is the high-speed network of availability and reliability, designed based on the laying of fiber optic redundancy scheme and points of presence in the district capitals, as provided in Section 7.4 of Article 7 of law No. 29904. This will be deployed by the CONTRACTOR in the BENEFICIARY LOCATIONS.
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2.37.
|
UIT: It is the Tax Unit
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3.1.
|
The CONTRACTOR states that is a legal entity duly incorporated under the regulations of the Republic of Peru, having proved its existence and its representation according to law and is duly authorized and able to assume the obligations under the FINANCING AGREEMENT to exercise technical, commercial and financial activities, in the implementation of the AWARDED PROJECT.
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3.2.
|
The CONTRACTOR acknowledges and agrees that it is the decisive reason of FITEL for the celebration of the FINANCING AGREEMENT that, in the terms stipulated therein, in their Technical Proposal and in the TECHNICAL SPECIFICATIONS, the CONTRACTOR must perform the design, procurement and installation of networks, equipment and access services to the Internet and Intranet, to implement CAPACITY BUILDING, and keep them in operational terms, performing the corresponding preventive, predictive and corrective maintenance, so that the Peruvian State has the deployed optical fiber in the case of TRANSPORTATION NETWORK and that the BENEFICIARY LOCATIONS and MANDATORY PAID INSTITUTIONS have the infrastructure and equipment properly installed and fully operational in the case of ACCESS NETWORK.
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3.3.
|
The CONTRACTOR has the authorization certificates that allow it to provide the services to which it is bound according to the TECHNICAL SPECIFICATIONS.
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3.4.
|
The CONTRACTOR is committed to install the networks OF THE AWARDED CONTRACT and provide the services in the quality conditions established in the TECHNICAL SPECIFICATIONS.
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3.5.
|
The CONTRACTOR states that its representative, who signs the FINANCING AGREEMENT, is duly authorized, that its subscription has been authorized by its Board of Directors (or the highest authority of the company) and, with his signature, requires no further action or approval to ensure their validity and to comply with the obligations in the same.
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3.6.
|
The CONTRACTOR states that for the subscription of the FINANCING AGREEMENT and compliance with contractual obligations, it does not require legal authorization or regulatory authority of any foreign country in which any of its shareholders is incorporated or has its principal place of business and which is not contrary to any law or regulation in such country.
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3.7.
|
The CONTRACTOR states that to fulfill the FINANCING AGREEMENT there are no:
|
|
•
|
Laws, statutes, regulations, rules, orders, judgments, awards, resolutions, administrative sanctions or restrictions by any authority, provisions in the statutes or regulations of the CONTRACTOR, covenants, contracts, agreements or other acts or events of any nature that are binding on the CONTRACTOR or affecting its affiliates or subsidiaries or their property or prohibit, restrict, limit, oppose, affect, impair, or in any way impede the execution and performance of the terms and conditions of the FINANCING AGREEMENT.
|
|
•
|
Neither actions, suits, investigations, litigation or proceedings pending or threatened before courts, arbitral court or governmental authority; that prohibit, restrict, limit, oppose, affect, impair, or in any way prevent the execution and performance of the terms and conditions of the FINANCING AGREEMENT.
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3.8.
|
The CONTRACTOR acknowledges and agrees that the nature and regime of the FINANCING AGREEMENT determines that, although during their term changes in the APPLICABLE REGULATIONS occur, including changes in the regulation of the telecommunications sector and the tax regime affecting its business and/or economic performance, such circumstances do not give you the right to claim or requests for modifications to the FINANCING AGREEMENT under the assumptions of economic-financial hardship or other provision of legal concepts of a similar nature, either before the FITEL, its officers or other State agency.
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3.9.
|
The CONTRACTOR recognizes that directly or indirectly has the economic, financial and technical capacity to perform the obligations under the FINANCING AGREEMENT and other obligations under the TECHNICAL SPECIFICATIONS and those obligations arising from the PROPOSAL under which was declared AWARDEE of the PROJECT INSTALLATION OF BROADBAND FOR COMPREHENSIVE CONNECTIVITY AND SOCIAL DEVELOPMENT OF THE AYACUCHO REGION”
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3.10.
|
The CONTRACTOR states having no impediment to contract pursuant to Article 1366º regulated by the Civil Code and that is not administratively sanctioned with temporary or permanent disqualification from exercising their rights to contract with the State.
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3.11.
|
In the event that, after the signing of the FINANCING AGREEMENT, false statements in the preceding paragraphs are established, it will be terminated automatically, by operation of law, applying the provisions of the nineteenth Clause, proceeding FITEL to enforce the guarantees to be granted under this FINANCING AGREEMENT.
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3.12.
|
The CONTRACTOR agrees to transfer ownership and control of the TRANSPORTATION NETWORK ASSETS on behalf of the MTC, with the signing of MINUTES OF AWARD OF THE TRANSPORTATION NETWORK ASSETS. This act will be subscribed between THE CONTRACTOR and FITEL, who will subscribe it representing MTC.
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3.13.
|
The CONTRACTOR is obliged to transfer the ownership and control of the ACCESS NETWORK ASSETS in favor of the FITEL with the signing of the MINUTES OF AWARD OF THE NETWORK ACCESS ASSETS.
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3.14.
|
The costs generated until the date the transfer mentioned in the preceding paragraph and the corresponding ones made until the date of the TRASPORTATION NETWORK become effective shall be borne by the CONTRACTOR. Costs incurred from the day after the transfer has become effective shall be borne by the owner hired over the operation of the ACCESS NETWORK.
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3.15.
|
The necessary administrative expenses for the transfer shall be borne by THE CONTRACTOR.
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3.16.
|
The CONTRACTOR states that it has conducted its own studies, research, projections and therefore is considered knowledgeable of all the elements needed to make the decision to assume fully its obligations under the FINANCING AGREEMENT.
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3.17.
|
The CONTRACTOR acknowledges the areas where the networks will be installed, so it expressly disclaims making any claim or action against FITEL or other competent authority derived from inadequate site conditions or any other circumstances related the subject matter of this FINANCING AGREEMENT.
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3.18.
|
The CONTRACTOR admits it has developed its business plan taking into account the studies and assumptions it deemed appropriate, according to which it has prepared his TECHNICAL and ECONOMIC PROPOSAL and required the FUNDING AWARDED. It also states that the business plan has not been known by FITEL or PROINVERSIÓN, which shall have no responsibility for any difference between it and the actual results of the implementation of the AWARDED PROJECT. In that sense, the CONTRACTOR declares that it assumes the risk arising from the differences between its business plan and actual results of the implementation of the AWARDED PROJECT.
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3.19.
|
The CONTRACTOR acknowledges and agrees that the total amount of the FINANCING AWARDED, is sufficient to fulfill the obligations of the FINANCIAL AGREEMENT and those derived from the PROPOSAL due to which it became the AWARDEE of the PROJECT “Installation of Broadband for Comprehensive Connectivity and Social Development of the Ayacucho Region "
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3.20.
|
The CONTRACTOR, by this statement and only in the case of ACCESS NETWORK, undertakes to continue the operation and maintenance of the AWARDED PROJECT in all cases of termination of the FINANCING AGREEMENT under the terms stated in Clauses of the FINANCING AGREEMENT; this statement constitutes a unilateral promise referred to under Article 1956 of the Peruvian Civil Code.
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3.21.
|
The CONTRACTOR acknowledges and agrees that FITEL has taken note of the statement referred to in the preceding paragraph and that the signing of this FINANCING AGREEMENT is not only an express consent but a prior agreement to the second paragraph of Article 1956 and Article 1957 of the Civil Code, respectively, so that said unilateral promise has been validly made
and is fully enforceable.
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3.22.
|
The CONTRACTOR states that the CLOSING DATE, its capital stock is the one established in the TERMS AND CONDITIONS. and, on that date, has fully subscribed the total of shares forming its share capital, having paid at least 25% of the nominal value of the shares, as applicable, in accordance with Article 52 of the General Law Corporations, Law N ° 26887
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3.23.
|
The CONTRACTOR acknowledges and agrees that the operation of the TRANSPORT NETWORK during the TRIAL PERIOD is temporary and provisional; being restricted to use the TRANSPORTATION NETWORK to provide value added public telecommunications service.
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4.1.
|
The signing of the FINANCING AGREEMENT and compliance with the obligations and rights of FITEL in it shall conform to the APPLICABLE RULES and regulations governing its operation and in general, the legal system of Peru.
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4.2.
|
FITEL states that to the subscription of the FINANCING AGREEMENT has the knowledge and authorization of its governing bodies and that its legal representative has sufficient skills and powers to celebrate it, so as to generate obligations and valid, binding and enforceable rights for both parties
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4.3.
|
FITEL states that the AWARDED FUNDING and, if applicable, the EXTENSION of the AWARDED PROJECT is duly authorized and has sufficient economic resources for disbursements agreed in the FINANCING AGREEMENT.
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4.4.
|
FITEL states to have the skills, legal and operational instruments for making the necessary supervision and that, as long as the CONTRACTOR fulfill its obligations, shall authorize and make disbursements under the FINANCING AGREEMENT.
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4.5.
|
The supervision corresponding to the OPERATION PERIOD of the ACCESS NETWORK shall be made solely for one hundred twenty (120) months. After this deadline, the legal regime for supervision will be established in the Concession Agreement of the CONTRACTOR, according to APPLICABLE RULES.
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4.6.
|
FITEL acknowledges and accepts that it has become aware of the statement of THE CONTRACTOR referred to in paragraph 3.20 of the Third Clause and the signing of this FINANCING AGREEMENT is not only express but also prior agreement referred to the second paragraph of Article 1956 and Article 1957 of the Civil Code, respectively, so that unilateral promise has been validly made
and is fully enforceable.
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|
a)
|
The installation of the TRANSPORTATION NETWORK and ACCESS NETWORK according to what is stated in the TECHNICAL SPECIFICATIONS;
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|
b)
|
The operation and maintenance of the ACCESS NETWORK according to what is stated in the TECHNICAL SPECIFICATIONS, providing access to the Internet and intranet to the BENEFICIARY LOCALITIES and MANDATORY PAID INSTITUTIONS contained in Exhibit No. 1 of this FINANCING AGREEMENT,;
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|
c)
|
The implementation of CAPACITY BUILDING; defined as such in paragraph 1.3.11 of the TERMS AND CONDITIONS
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|
d)
|
The use of FUNDING AWARDED for implementing the Project.
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6.1.
|
The FINANCING AGREEMENT shall remain in force equal to the sum of the INVESTMENT PERIOD OF THE ACCESS NETWORK, INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK and the OPERATION PERIOD until the completion of the last disbursement; unless earlier terminated in response to the cases provided for in this FINANCING AGREEMENT.
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6.2.
|
The INVESTMENT PERIOD shall not exceed fourteen (14) months from the day after the CLOSING DATE. However, it may be extended upon approval of FITEL and formalized by addendum to this FINANCING AGREEMENT.
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6.3.
|
The OPERATION PERIOD shall not be less than one hundred twenty (120) months from the day following the completion of the INVESTMENT PERIOD.
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6.4.
|
The term of the FINANCING AGREEMENT may be extended provided there is proper justification and for the enforcement of the purposes stated in the fifth clause of this contract by addendum signed by FITEL and the CONTRACTOR.
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6.5.
|
The PARTIES shall comply with the applicable procedure to the stage of CLOSURE of the FINANCING AGREEMENT.
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6.6.
|
At the end of the term of the FINANCING AGREEMENT, by the conclusion of the deadline stated in paragraphs 6.2 and 6.3 of this Clause, the CONTRACTOR shall continue the obligations of a telecommunications operator stipulated in their respective concession contracts, which are signed with the Ministry of Transportation and Communications, and/or any holder of a registration or authorization for the provision of value added services.
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7.1.
|
To use the AWARDED FUNDING for the design, construction and installation of the TRANSPORTATION NETWORK; well as for the design, equipment procurement, transportation, installation, commissioning, operation and maintenance of the ACCESS NETWORK that will allow to provide Internet and Intranet access services in the BENEFICIARY LOCALITIES and MANDATORY PAID INSTITUTIONS contained Exhibit No. 1 of the FINANCING AGREEMENT, and to the implementation of capacity building activities, fulfilling the conditions laid down in the TECHNICAL SPECIFICATIONS, the content of the AWARDED PROJECT and all commitments by the CONTRACTOR in its TECHNICAL PROPOSAL included in Exhibit No. 2 FINANCING AGREEMENT.
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7.2.
|
To meet the deadlines and targets set out in the FINAL SCHEDULE OF ACTIVITIES of the CONTRACTOR, provided in Exhibit No. 3 FINANCING AGREEMENT, except in cases of extensions determined in accordance with this FINANCING AGREEMENT.
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7.3.
|
Comply with the obligations in the TECHNICAL SPECIFICATIONS and appendices.
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7.4
|
To comply with the commitments made in its TECHNICAL PROPOSAL, Exhibit No. 2 of the FINANCING AGREEMENT.
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7.5
|
Repair of damage because of the material and/or equipment that will serve to implement the AWARDED PROJECT contained in the Technical Proposal, as well as their replacement, if applicable, will be the responsibility of the CONTRACTOR without requiring any further disbursement by FITEL. This obligation shall apply during the term of FINANCING AGREEMENT and, if applicable, its extensions.
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7.6.
|
Responsibility for repairing any damage caused in the BENEFICIARY LOCALITIES and MANDATORY PAID INSTITUTIONS arising from the direct activities of the CONTRACTOR and/or third parties engaged by it for the execution of the AWARDED PROJECT, whether public roads, highways, bridges, public and private premises and others are affected during the transportation, installation, operation and maintenance of the ACCESS NETWORK and the installation of the TRANSPORTATION NETWORK. In that sense, the CONTRACTOR shall indemnify FITEL and MTC, if applicable; and be accountable for any act or omission, willful, negligent or without fault, the staff involving damage to the latter; including those acts or omissions made by the staff of its contractors.
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7.7.
|
To give training courses in Peru and in the country of production of the main transmission equipment and infrastructure (optical fiber) used in the ACCESS NETWORK and TRANSPORTATION NETWORK, respectively.
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7.8.
|
Provide all facilities for FITEL, or its designee, fulfill its duties and obligations under the AWARDED PROJECT.
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7.9.
|
Provide all information related to the AWARDED PROJECT required by FITEL, or its designee, to fulfill its duties, for which a term will be provided for the CONTRACTOR to comply with it.
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7.10.
|
To submit the FINAL SCHEDULE OF ACTIVITIES OF THE ACCESS NETWORK and FINAL SCHEDULE OF ACTIVITIES OF THE TRANSPORTATION NETWORK within the period specified in the TECHNICAL SPECIFICATIONS for both networks.
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7.11.
|
Whenever the CONTRACTOR carries out promotional activities and advertising of the AWARDED PROJECT, it must refer to the Peruvian State represented by FITEL and the MTC during the term of the FINANCING AGREEMENT.
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7.12.
|
To manage, obtain before administrative authorities, municipal or otherand maintain current licenses, permits, registrations and other authorizations required for the deployment of infrastructure and for the provision of Internet service and intranet access offered in the AWARDED PROJECT. In this regard, it is expressly stated that cooperation by the FITEL indicated in Paragraph 8.3 of the Financing Agreement is only of means and not results of, so the CONTRACTOR cannot claim the unsuccessful outcome of this cooperation as grounds that waives it from the breach of the obligations contained in the FINANCING AGREEMENT.
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7.13.
|
Comply with all APPLICABLE RULES and LAWS for the execution of the FINANCING AGREEMENT.
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7.14.
|
To fulfill its obligations under the concession contract signed with the MTC
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7.15.
|
To meet the payment of its contributions to the special right to FITEL under Article 12° of the TUO of the Telecommunications Law approved by the Supreme Decree No. 013-93-TCC, as amended.
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7.16.
|
In the case of ACCESS NETWORK, THE CONTRACTOR undertakes to meet the demand of the towns of Ayacucho region, where the coverage of this network allows the provision of services under the AWARDED PROJECT. This obligation will be performed under the same conditions in AWARDED PROJECT, without incurring additional financing.
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7.17.
|
To submit for the satisfaction of FITEL, disaggregated information of investment costs for the ACCESS NETWORK and TRANSPORTATION NETWORK duly accredited as stated in Exhibit Nº11 of this agreement within the first half of the PERIOD OF OPERATION. This information will have no implications on the FUNDING AWARDED.
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7.18.
|
To submit to FITEL semiannually the operating cash flow of the AWARDED PROJECT during the term of the FINANCING AGREEMENT. The delivery of this information does not alter the amount of FINANCING AWARDED. Additionally, FITEL may request the accreditation of the operating cash flow.
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7.19.
|
To allow FITEL to verify the destination and use of the FUNDING AWARDED during the term of the FINANCING AGREEMENT.
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7.20.
|
To keep up to the CLOSING DATE, fully subscribed the total of shares making up the share capital and paid at least 25% of the nominal value of the shares, as applicable, in accordance with the provisions of Article 52 ° of the General Corporation Law, Law No. 26887.
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7.21.
|
It will be responsible for contracting and retaining existing insurance policies in force on ASSETS and elements of the ACCESS NETWORK and TRANSPORTATION NETOWRK assuming the costs of each and every one of the deductibles and / or coinsurance that it engaged in insurance policies purchased in fulfilling this obligation.
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7.22.
|
It shall not be relieved of the obligation to comply with the installation of networks claiming defects, errors or omissions in the TECHNICAL SPECIFICATIONS
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7.23.
|
Respect the right of patent, design and/or copyright protected in the country of manufacture of the elements for the ACCESS NETWORK and TRANSPORTATION NETWORK.
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7.24.
|
The CONTRACTOR assumes responsibility for the acts, failures, omissions, or in general, any breach incurred by manufacturers or other subcontractors employed by it who may be involved in the execution of the FINANCING AGREEMENT.
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7.25.
|
Subscribe for the duration of the FINANCING AGREEMENT, contract models set out in Appendix No. 5-A and 5-B of Exhibit 8B of the TERMS AND CONDITIONS.
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7.26.
|
To assume for the duration of FINANCING AGREEMENT and even during additional period referred to in Paragraph 20.3 of the FINANCING AGREEMENT, the liability to FITEL of maintaining the operability and functionality of all ASSETS and elements of the ACCESS NETWORK so that the quality and conditions stated in its Technical Proposal and in the TECHNICAL SPECIFICATIONS are guaranteed for the provision of public telecommunications services and ensure access to Intranet.
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7.27.
|
During the term of the FINANCING AGREEMENT and even during additional period referred to in Paragraph 20.3 of the FINANCING AGREEMENT, the CONTRACTOR is required to perform corrective maintenance activities, predictive and preventive ASSETS and elements of the ACCESS NETWORK. This includes the obligation to make the replacement, renewal, rehabilitation and / or adaptations made
to ASSETS and items included in the networks; without that requirement implies the right to require FITEL additional resources to FUNDING AWARDED.
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7.28.
|
It is responsible to FITEL, and third parties, as appropriate, for the proper management and use of ASSETS and elements of the ACCESS NETWORK, and the inherent risk to them.
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7.29.
|
From the CLOSING DATE and until the transfer of ACCESS NETWORK assets on behalf of FITEL is made stated in this contract, the CONTRACTOR will be solely responsible and liable to pay taxes, fees and contributions that apply in relation to ASSETS and elements of the ACCESS NETWORK in accordance with applicable rules, considering among these regulations the provisions of the Consolidated Text of the Municipal Taxation Law, approved by Supreme Decree No. 156- EF-2004 or its amendment. In the case of TRANSPORT NETWORK, this obligation of THE CONTRACTOR is maintained until its transference to the MTC, in accordance with the provisions of this FINANCING CONTRACT.
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7.30.
|
To ensure that the ACCESS NETWORK and TRANSPORTATION NETWORK ASSETS are only subject to the provision of the services referred to in AWARDED PROJECT. Consequently, they cannot be transferred, or in general subject to liens or encumbrances of any kind.
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7.31.
|
Transferring ownership in favor of FITEL, of the ACCESS NETWORK ASSETS according to the conditions of this contract and in paragraph D of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK contained in Exhibit 8-B of the TERMS AND CONDITIONS.
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7.32.
|
Temporarily and tentative operate the TRANSPORTATIONNETWORK during the TRIAL PERIOD until the subscription of the MINUTES OF AWARD OF TRANSPORTATION NETWORK ASSETS under the conditions of this contract.
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7.33.
|
Transfer in favor of MTC the property and domain of the TRANSPORTATION NETWORK, under the conditions of this AGREEMENT
|
7.34.
|
To assume custody and responsibility for the integrity and legal physical sanitation of the TRANSPORTATION NETWORK until the delivery thereof to the concessionaire in charge of the operation of the TRANSPORTATION NETWORK to be selected in the private investment promotion process of PROINVERSIÓN.
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7.35.
|
To maintain the insurance policy of the TRANSPORTATION NETWORK ASSETS in force until the delivery of the same to the concessionaire in charge of the operation assuming the costs of each and every one of the deductibles and / or coinsurance that engaged in insurance policies purchased in fulfilling this obligation.
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7.36.
|
To negotiate and subscribe infrastructure share-use agreements with, electricity, hydrocarbons or railway companies as well as to obtain permits, rights of way, step and use poles necessary to install the necessary infrastructure and for the deployment of the ACCESS NETWORK and TRANSPORTATION NETWORK; as well as, to establish agreements for the use of existing pipelines and install new pipelines were deemed necessary.
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7.37.
|
Without prejudice to the provisions in the APPLICABLE LAWS and REGULATIONS, the CONTRACTOR shall provide to the MTC, FITEL and operation concessionaire of the TRANSPORTATION NETWORK all facilities they require in order to facilitate the procurement and commissioning of AWARDED PROJECT.
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7.38.
|
To fulfill all other obligations under the FINANCING AGREEMENT, it’s Exhibits and the TECHNICAL SPECIFICATIONS in CIRCULARS and the TERMS AND CONDITIONS.
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8.1.
|
To disburse the FUNDING AWARDED to the CONTRACTOR when it has fulfilled the obligations and provisions required in the FINANCING AGREEMENT. Disbursements will be made in accordance with the conditions set out in Clause fourteenth of the FINANCING AGREEMENT.
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8.2.
|
To exercise, directly or through a third natural or artificial, public or private person, shares of supervision, monitoring and control of facilities and test infrastructure, equipment and services under the FINANCING AGREEMENT.
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8.3.
|
FITEL shall cooperate with the CONTRACTOR for the proper performance of the FINANCING AGREEMENT. To this end, FITEL, where warranted, will use its best efforts to coordinate with the relevant authorities, issuing licenses, permits and other managed by THE CONTRACTOR and that are required for execution of the FINANCING AGREEMENT.
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8.4.
|
To ensure proper use of the FUNDING AWARDED and compliance with the terms of the FINANCING AGREEMENT.
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8.5.
|
To make written submissions on the matters covered by the FINANCING AGREEMENT, within the time stated therein, as well as other applications, to be within the scope of powers of the CONTRACTOR in writing.
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8.6.
|
To assume the costs of maintaining the TRANSPORTATION NETWORK until delivery thereof to the operation concessionaire.
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8.7.
|
Cooperate when the CONTACTOR demands it in writing, in the negotiation of sharing infrastructure agreements with concessionaires or other public or private entities that apply to other sectors (such as energy, oil, road infrastructure, etc.) required to install poles and infrastructure according to DESIGN of the TRANSPORT NETWORK outlined in the TECHNICAL SPECIFICATIONS. To this end, the FITEL, where warranted, will do their best without the cooperation of FITEL replace the obligation to THE HIRED to manage and sign such agreements as provided in Paragraph 7.36 of the seventh clause of this contract.
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8.8.
|
Other obligations under the FINANCING AGREEMENT, its Exhibits and the TECHNICAL SPECIFICATIONS in the CIRCULAR and the TERMS AND CONDITIONS.
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9.1.
|
To receive, use and dispose of the FUNDING AWARDED, according to the FINAL SCHEDULE OF ACTIVITIES and conditions provided in the FINANCING AGREEMENT.
|
9.2.
|
To propose to FITEL the replacement of BENEFICIARY LOCALITIES and/or Mandatory Paid Institutions, according Exhibit 12 of this contract.
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9.3.
|
It may provide, at its cost, risk and expense, and will not involve additional funding from FITEL, other additional telecommunications services to those agreed in the FINANCING AGREEMENT, provided they do not degrade the quality and continuity under the AWARDED PROJECT, communicating conditions to provide these additional services. These services will be provided prior authorization of FITEL within a period not exceeding thirty (30) working days from the day of filing.
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|
Under this assumption the CONTRACTOR is free to use the infrastructure and services in order to provide them in different locations than those agreed, provided that the installation, operation and maintenance thereof is paid by, cost and risk of the CONTRACTOR, and without additional funding from FITEL, without degrading the quality and continuity of services provided in the TECHNICAL SPECIFICATIONS.
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9.4.
|
To freely select technologies and more efficient network architectures, provided it complies with the requirements of the TECHNICAL SPECIFICATIONS and the whole becomes a coherent network to provide Internet service and intranet access.
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9.5.
|
The CONTRACTOR during the INVESTMENT PERIOD of the ACCESS NETWORK, the INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK and the OPERATION PERIOD, has the freedom to make updates to the technologies used, if required in the Technical Proposal, provided that this change equals or improves the quality and continuity of conditions originally established, the CONTRACTOR must be authorized by FITEL to make said change; for which it must comply with the requirements and procedure established in the TECHNICAL SPECIFICATIONS.
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9.6.
|
Within the first six (06) months of the INVESTMENT PERIOD OF THE ACCESS NETWORK, the CONTRACTOR may request FITEL the modification of model contracts contained in Exhibits No. 5-A and 5-B of the annex 8B of the TERMS AND CONDITIONS.
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9.7.
|
To provide to MANDATORY PAID INSTITUTIONS for free and without being subject to the regime of penalties established in the FINANCING AGREEMENT, the Internet and Intranet access referred to in this AWARDED PROJECT during the investment period, provided they do not involve the provision of additional funding from FITEL.
|
9.8.
|
To request the reduction of guarantees issued, as provided in the FINANCING AGREEMENT.
|
10.1.
|
To enforce the obligations of the CONTRACTOR under the FINANCING AGREEMENT.
|
10.2.
|
To require full or partial refund of FUNDING AWARDED, of TRANSPORTATION NETWORK and ACCESS NETWORK ASSETS, as provided in the FINANCING AGREEMENT, when the CONTRACTOR use disbursements differently than the purpose indicated in the FINANCING AGREEMENT.
|
10.3.
|
To execute the guarantees given on behalf of FITEL, in case of breach of its obligations under the Financing Agreement.
|
10.4.
|
To impose and enforce penalties arising from noncompliance, incompleteness, or delays of commitments from the CONTRACTOR under the FINANCING AGREEMENT.
|
10.5.
|
To make visits to the premises, facilities, infrastructure, among others, as it deems necessary to verify the performance of the AGREEMENT.
|
10.6.
|
To apply exceptional interpretation of clauses of the FINANCING AGREEMENT by FITEL, considering the special nature of it.
|
10.7.
|
To terminate the FINANCING AGREEMENT, when any of the grounds provided for this purpose occurs, if deemed appropriate.
|
10.8.
|
To modify, within six (06) months of the INVESTMENT PERIOD OF THE ACCESS NETWORK, the model contracts contained in Exhibits No. 5-A and 5-B of the annex 8-B of the TERMS AND CONDITIONS; provided that such amendments do not involve the CONTRACTOR in additional obligations to those in the FINANCING AGREEMENT, its Exhibits or the TECHNICAL SPECIFICATIONS.
|
10.9.
|
To approve contracts formats indicated in the preceding paragraph, taking into account the contributions of the CONTRACTOR, according to the provisions of Paragraph 9.6. of the FINANCING AGREEMENT. FITEL will give a favorable or unfavorable opinion on the changes proposed by the CONTRACTOR According to the corresponding notification.
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11.1.
|
The AWARDED PROJECT may be executed by subcontractors or other forms of outsourcing, provided that FITEL is informed of the names of individuals and/or companies to perform the work. To this end, the CONTRACTOR upon the signature of the FUNDING AGREEMENT shall submit an affidavit in accordance with Exhibit No. 10 of this contract, assuming responsibility for compliance with the contractual obligations of the subcontractor or other individuals or legal entities with whichit subscribes outsourcing contracts. The aforementioned Affidavit must be filed even if the CONTRACTOR does not perform any subcontract.
|
11.2.
|
In any case, the CONTRACTOR remains responsible to FITEL for the efficient and timely implementation of such obligations and may not allege a breach of the subcontractor to excuse its own default.
|
11.3.
|
The CONTRACTOR may not subcontract, individuals or legal entities for the execution of the entire AWARDED PROJECT
|
|
i.
|
The amount of SIXTY EIGTH MILLION FIVE HUNDREDED FIFTY FIVE THOUSAND TWO HUNDRED FOURTY US Dollars (US$ 68´555,240.00) for the installation and operation of the ACCESS NETWORK.
|
|
ii.
|
The amount of :THIRTY SEVEN MILLION EIGTH HUNDRED FIFTY NINE THOUSAND ONE HUNDRED SEVENTY and 00/100 US Dollars (US$ 37´859,170.00), for the implementation of the TRANSPORTATION NETWORK
|
13.1.
|
CONDITIONS OF EXPANSION OF THE AWARDED PROJECT COMMON TO BOTH NETWORKS
|
13.1.1.
|
The EXPANSION OF THE AWARDED PROJECT will be formalized through the signing of an addendum to the FINANCING CONTRACT.
|
13.1.2.
|
EI CONTRACTOR prior to the signing of the Addendum to FINANCING AGREEMENT that approves the EXPANSION OF THE AWARDED PROJECT, will deliver an Enlargement Activity Schedule, it will be part of the Addendum to FINANCING AGREEMENT.
|
13.1.3.
|
The deadline to complete the installation in new BENEFICIARY LOCATIONS shall be six (6) months from the signing of the Addendum to FINANCING AGREEMENT that approves the EXPANSION OF THE AWARDED PROJECT
|
13.2.
|
FOR THE ACCESS NETWORK
|
13.2.1.
|
The CONTRACTOR may solicit FITEL the EXPANSION OF THE AWARDED PROJECT for the ACCESS NETWORK under the terms indicated in this FINANCING AGREEMENT.
|
13.2.2.
|
THE AWARDED PROJECT may be expanded during the INVESTMENT PERIOD of THE ACCESS NETWORK and cannot be higher than twenty percent (20%) of the amount of THE ACCESS NETWORK FINANCING.
|
13.2.3.
|
The new beneficiary localities to be selected must belong to new district capitals within the area of influence of the AWARDED PROJECT, which will be included as Annex to the Addendum of the FINANCING AGREEMENT which approves the EXPANSION of the AWARDED PROJECT.
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13.2.4.
|
The CONTRACTOR must comply upon the approval of FITEL with every one of the terms it previously approved for the subscription of the Addendum to the FINANCING AGREEMENT reason why the EXPANSION of the AWARDED PROJECT is approved. FITEL reserves the right to modify the general and economic conditions of the new Non-reimbursable financing
|
13.3.
|
FOR THE TRANSPORTATION NETWORK
|
13.3.1.
|
The CONTRACTOR may, within six (06) months of the INVESTMENT PERIOD of the TRANSPORTATION NETWORK request FITEL the expansion of the AWARDED PROJECT to new district capitals. Such extension shall not exceed twenty percent (20%) of the amount of FUNDING AWARDED
|
13.3.2.
|
The new beneficiary localities to be selected must belong to new district capitals within the area of influence of the AWARDED PROJECT, which will be included as Annex to the Addendum of the FINANCING AGREEMENT which approves the EXPANSION of the AWARDED PROJECT.
|
13.3.3.
|
The EXPANSION of the AWARDED PROJECT will be formalized through the signing of an addendum to the FINANCING AGREEMENT, for which it will apply the provisions of this clause.
|
14.1.
|
ACCESS NETWORK:
|
14.2.
|
TRANSPORTATION NETWORK
|
14.2.1.
|
Disbursements are made according to the following scheme:
|
Concept
|
Time
|
Payment
|
Advance
|
Deliverables
|
First disbursement
|
Subscription of agreement
|
20% FINANCING OF TRANSPORTATION NETWORK
|
0%
|
Advance payment guarantee
|
Second disbursement
|
Final date of the first advance, described in Paragraph 2.2 of Exhibit 8-A
|
40% FINANCING OFACCESS NETWORK
|
Completion of the First Advance
|
52 Nodes of Distribution ,Connection and core Nodes and 5 Aggregation Nodes
|
Third disbursement
|
Date of completion of the INSTALLATION STAGE
|
40% FINANCING OF TRANSPORTATION NETWORK
|
Total Delivery of TRANSPORTATION NETWORK and signing of MINUTES OF CONFORMITY OF INSTALLATION AND TESTING SERVICES
|
52 Nodes of Distribution ,Connection and core Nodes and 5 Aggregation Nodes
|
15.1.
|
As a condition for signing the FINANCING AGREEMENT in the CLOSING DATE, the CONTRACTOR shall deliver to the COMMITTEE the ADVANCE PAYMENT GUARANTEE and PERFORMANCE BOND of the FINANCING AGREEMENTwhich must be issued by a LOCAL BANKING BUSINESS OR LOCAL INSURANCE BUSINESS rightfully authorized by the SBS (the banking and retirement fund superintendency) or by an INTERNATIONAL FINANCIAL ENTITY. In the case of a warranty issued by and INTERNATIONAL FINANCIAL ENTITY, it must be confirmed by a LOCAL BANKING BUSINESS according to the Exhibit Nº2 in the TERMS AND CONDITIONS.
|
15.2.
|
The ADVANCE PAYMENT GUARANTEE shall be for an amount of TWENTY ONE MILLION TWO HUNDRED EIGHTY TWO THOUSAND EIGTH HUNDRED EIGHTY TWO US Dollars (US$ 21´282,882 .00), equivalent to 100% of the first disbursement, of THE ACCESS NETWORK and THE TRANSPORT NETWORK ensuring the proper use of this disbursement in favor of the CONTRACTOR, pursuant to the provisions of this AGREEMENT. It shall remain valid from the CLOSING DATE until the end of the investment period. The FITEL may provide for the mandatory extension of this guarantee, and the CONTRACTOR must renew it by the time indicated for its effect.
|
15.3.
|
THE CONTRACTOR during the INVESTMENT PERIOD of THE ACCESS NETWORK and the INVESTMENT PERIOD of THE TRASNPORT NETWORK may request FITEL a reduction of 50% and 40% of the ADVANCE PAYMENT GUARANTEE. To do this, it must have fulfilled the following conditions:
|
% Reduction
|
Progress
|
|
50%
|
Access Network
|
Transportation Network
|
60% of the total of PAID INSTITUTIONS
|
52 Nodes of Distribution Connection and core 5 Aggregation Nodes
|
|
40%
|
MINUTES OF COMPLIANCE OF FACILITIES AND TESTING OF SERVICES OF THE ACCESSNETWORK
|
MINUTES OF COMPLIANCE OF FACILITIES AND TESTING OF SERVICES OF THE TRANSPORTATION NETWORK
|
15.4
|
The ADVANCE PAYMENT GUARANTEE will be returned to the CONTRACTOR, once signed
|
|
·
|
RECORD OF AWARD OF THE TRANSPORTATION NETWORK ASSETS.
|
15.5
|
PERFORMANCE BOND of the FINANCING AGREEMENT will be for a total of SIX MILLION EIGHT HUNDRED FIFTY FIVE THOUSAND FIVE HUNDRED TWENTY FOUR US Dollars (US$ 6´855,524.00), equivalent to ten percent (10%) of the FINANCING for the ACCESS NETWORK which will ensure the proper and timely performance of each and every one of the obligations of the CONTRACTOR. The performance bond reduction scheme is as follows:
|
15.5.1.
|
After signing the TRANSPORTATION NETWORK ASSETS AWARD MINUTEm, it will be substituted for another totaling twenty percent (20%) of the amount of the FINANCING of the ACCESS NETWORK.
|
15.5.2.
|
At the beginning of the second year of the PERIOD OF OPERATION and after INSTALLATION CONFORMITY AND ACCESS NETWORK SUPERVISION REPORT is acceptedby FITEL PERFORMANCE BOND of the FINANCING AGREEMENT will be reduced to ten percent (10%) of the FINANCING of the ACCESS NETWORK.
|
15.5.3.
|
At the beginning of the third year of the PERIOD OF OPERATIONS and after INSTALLATION CONFORMITY AND ACCESS NETWORK SUPERVISION REPORT is accepted by FITEL it will be reduced to eight percent (8%) of the FINANCING of the ACCESS NETWORK
|
15.5.4.
|
At the beginning of the fourth year of the PERIOD OF OPERATIONS and after INSTALLATION CONFORMITY AND ACCESS NETWORK SUPERVISION REPORT is accepted by FITEL the PERFORMANCE BOND of the FINANCING AGREEMENT will be reduced to eight percent (6%) of the FINANCING of the ACCESS NETWORK and it will remain so until closure of the FINANCING CONTRACT
|
15.6
|
The PERFORMANCE BOND of the FINANCING AGREEMENT is issued for and on behalf of the CONTRACTOR in favor of FITEL. The bond must be renewed annually so that remains in effect until the expiration of the FINANCING AGREEMENT, except as noted in Paragraph 4.6. of the FINANCING AGREEMENT.
|
15.7
|
In case the CONTRACTOR presents COMMENTS pending from the last MONITORING REPORT issued in the PERIOD OF OPERATION OF THE ACCESS NETWORK, the PERFORMANCE BOND of the FINANCING AGREEMENT will be renewed seven (07) DAYS prior to maturity for a period of (60) DAYS, and so on until all COMMENTS have been clarified.
|
15.8
|
The PERFORMANCE BOND of the FINANCING AGREEMENT is secured, unconditional, and irrevocable, without benefit of excussion and of immediate execution upon request of FITEL without judicial demand for payment or performance, a copy of which is included as Exhibit No. 5 of the FINANCING AGREEMENT.
|
15.9
|
The PERFORMANCE BOND of the FINANCING AGREEMENT shall be returned no later than five (05) business days after making the final disbursement
|
16.1
|
The CONTRACTOR agrees to transfer ownership and control of the TRANSPORTATION NETWORK ASSETS on behalf of the MTC with the signing of the MINUTES OF AWARD OF THE TRANSPORTATION NETWORK ASSETS, once the Concession Agreement between the MTC and the concessionaire for the operation for the TRANSPORTATION NETWORK is subscribed.
|
16.2
|
The CONTRACTOR recognizes that after the signing of the MINUTES OF AWARD OF TRANSPORTATION NETWORK ASSETS, will also assume the obligation to formalize and perfect by all acts or procedures necessary for the transference of ownership and control referred to in the preceding paragraph in favor of the MTC. This obligation will assumed according to nature of the assets to be transferred and its aptitude to be registered in SUNARP.
|
16.3
|
The CONTRACTOR undertakes to carry out the activities necessary to preserve the condition and utility of the ASSETS TRANSPORT NETWORK until the signing of the Concession Agreement between the MTC and the concessionaire for the operation of the TRANSPORTATION NETWORK
|
16.4
|
The CONTRACTOR shall be liable for damages or losses caused to the TRANSPORTATION NETWORK ASSETS until the signing of the Concession Agreement between the MTC and the concessionaire for the operation of the TRANSPORTATION NETWORK. Therefore are forced to hire the necessary insurance to comply with the provisions of this paragraph.
|
16.5
|
After the signing of MINUTES OF AWARD OF ACCESS NETWORK ASSETS, FITEL shall make
the final disbursement of FUNDING AWARDED; as stated in Clause Fourteenth of the FINANCING AGREEMENT.
|
16.6
|
Without prejudice to the other obligations arising from the provisions of paragraph 7.34 and other provisions under this FINANCING AGREEMENT, until the transfer of title of the TRANSPORTATION NETWORK ASSETS to the MTC, the CONTRACTOR as provided in the applicable law, in its capacity as holder of such property immediately has an obligation to exercise (for your own expense) the following types of possessory defense for both the case of attempted usurpation of the TRANSPORTATION NETWORK ASSETS, as in the case of activities incompatible with the proper use of them by third parties:
|
|
a)
|
Extrajudicial possessory defense, used to repel the force used against the CONTRACTOR and to regain the good, without time interval, if it were dispossessed, but always refrain from the use of recourses not justified by the circumstances.
|
|
b)
|
Legal possessory defense, the CONTRACTOR must, if it is borne by the TRANSPORTATION NETWORK ASSETS any involvement, dispossession, occupation, usurpation, among others, to communicate MTC and FITEL of those facts and make use of the mechanisms and judicial resources to enable it to hold harmless MTC's right on the TRANSPORTATION NETWORK ASSETS.
|
16.7
|
The failure to exercise possessory defenses will result in penalties under Clause eighteen (18) of the FINANCING AGREEMENT.
|
16.8
|
The CONTRACTOR must notify FITEL and MTC, immediately and notarial duct, the occurrence of damage to the TRANSPORT NETWORK ASSETS, and the nature and amount thereof.
|
16.9
|
The exercise of possessory defenses described above does not hold harmless the CONTRACTOR, which, to a course as described in the preceding paragraphs, shall coordinate immediately with Fitel and MTC the legal actions that the CONTRACTOR must engage in order to hold harmless MTC's right on TRANSPORT NETWORK ASSETS.
|
16.10
|
Without prejudice to the provisions in paragraph 7.30 of the FINANCING AGREEMENT, the CONTRACTOR must hold harmless FITEL especially regarding the MTC and against any action or exception of legal, administrative, arbitration or contract, or claim of any nature regarding the ACCESS NETWORK and TRANSPORT NETWORK ASSETS.
|
16.11
|
The CONTRACTOR must comply with in respect of the TRANSPORT NETWORK and ACCESS NETWORK ASSETS, to pay taxes, fees and contributions payable, pursuant to APPLICABLE LAWS FINANCING referred to in the FINANCING AGREEMENT, considering between these regulatory provisions as provided in the Consolidated Text of the Municipal Taxation Act, approved by Supreme Decree No. 156-2004-EF or later rule that amends
|
16.12
|
The CONTRACTOR ensures the proper transfer of title of the TRANSPORT NETWORK ASSETS in favor of MTC and the ACCESS NETWORK ASSETS in favor of FITEL ; as wll as the operation and functioning of the TRANSPORT NETWORK ASSETS. It also recognizes the domain the MTC has over THE TRANSPORT NETWORK ASSETS and the domain FITEL has over the ACCESS NETWORK ASSETS
|
|
Ø
|
ACCESS NETWORK
|
17.1
|
FITEL is responsible for the supervision and control AWARDED PROJECT during INVESTMENT PERIOD of THE ACCESS NETWORK and OPERATION PERIOD.
|
17.2
|
In the INVESTMENT PERIOD of THE ACCESS NETWORK, supervision will mainly include the following:
|
|
•
|
Supervision of the number of BENEFICIARY LOCALITIES and MANDATORY PAID INSTITUTIONS of the AWARDED PROJECT and its proper location;
|
|
•
|
Monitoring the quantity and quality of infrastructure, equipment, materials, management tools, among others, to be applied to the AWARDED PROJECT
|
|
•
|
Supervision and control of the installation of infrastructure, equipment, materials, management tools, among others, which will be used by the AWARDED PROJECT to provide service access to Internet and intranet, in the BENEFICIARY LOCATIONS, INSTITUTIONS, or others who contract the service within the scope of the access network installed by the CONTRACTOR to serve the AWARDED PROJECT;
|
|
•
|
Supervision and control and SPREAD AWARENESS, TRAINING AND DEVELOPMENT OF CONTENTS;
|
|
•
|
Supervision and control of the operation of the Internet access service and intranet access, if any, to be provided with the AWARDED FUNDING according to the FINANCING AGREEMENT, its annexes and the TECHNICAL SPECIFICATIONS, TECHNICAL PROPOSAL, the CIRCULAR and TERMS AND CONDITIONS; and,
|
|
•
|
Supervision of other aspects that Fitel deems necessary to ensure the proper use of the services required
|
17.3
|
During the PERIOD OF OPERATION, FITEL will primarily oversee the following:
|
|
•
|
The services provided by the CONTRACTOR with the FUNDING AWARDED, according to the requirements specified in the TECHNICAL SPECIFICATIONS and in the absence thereof, in accordance with the provisions of the legal and regulatory framework applicable.
|
|
•
|
The quality of the provision of other services that are offered using the access network of the AWARDED PROJECT, according to the conditions laid down in the respective addendum.
|
|
•
|
Other that FITEL recommends or orders within the framework of the FINANCING AGREEMENT
|
Ø
|
TRANSPORTATION NETWORK
|
17.4
|
Supervision and control of the installation of infrastructure, equipment, materials, management tools, among others, to be used for the TRANSPORT NETWORK.
|
17.5
|
In the TRIAL PERIOD, FITEL will supervise during execution of the TRANSPORT NETWORK operation, solely for the operation of the ACCESS NETWORK. It will also verify the performance of the network and could execute periodical monitoring protocols for this.
|
17.6
|
Supervision of the appropriate use of the AWARDED FINANCING.
|
|
Ø
|
ACCESS NETOWRK
|
18.1
|
Penalties for failure in the ACCESS NETWORK INVESTMENT PERIOD
|
18.1.1
|
The penalties applicable for breaches during the ACCESS NETWORK INVESTMENT PERIOD may be deducted from the corresponding disbursement for this period.
|
18.1.2
|
Non-compliance with activities:
|
18.1.2.1
|
If the CONTRACTOR breaches with the full installation of a service within the prescribed period, Fitel shall establish a penalty of five-hundredths (0.05) of ITU (Tax unit) per MANDATORY PAID INSTITUTION set forth in Exhibit No. 01 of this contract, per day behind in the breach, counted from the day the initial installation ended.
|
18.1.2.2
|
If the CONTRACTOR breaches or partially meets the awareness and dissemination activities, as indicated in section 4.2.1 of the ACCESS NETWORK TECHNICAL SPECIFICATIONS, FITEL shall apply a penalty of one-tenth (0.1) of ITU for BENEFICIARY where this obligation was not complied with within the time limit set. It is considered that this activity was carried when the minimum percentage of attendees described in TECHNICAL SPECIFICATIONS of THE ACCESS NETWORK except what is indicated in the paragraph 3 of the Exhibit Nº14 of the Appendix 8B of the TERMS AND CONDITIONS related to the accreditation of the minimum of attendees.. The application of this penalty does not relieve the CONTRACTOR compliance with this obligation
|
18.1.2.3
|
If the CONTRACTOR does not comply with the installation of the monitoring system within the ACCESS NETWORK INVESTMENT PERIOD, according to what is stated in section 6.6.1.1 of the TECHNICAL SPECIFICATIONS as well as usernames and passwords, etc., or all activities for commissioning of this system is not completed, Fitel shall apply a penalty of five (5) ITU. The application of this penalty does not relieve the CONTRACTOR of the compliance with this obligation.
|
18.1.2.4
|
In case of breach of the activities during the INVESTMENT PERIOD due to a fortuitous event or force majeure, not attributable to the CONTRACTOR, it shall send the documentation to FITEL proving this, in maximum one month of the event causing the breach. Furthermore, in order to evaluate the fact, the CONTRACTOR must communicate the occurrence of the event, and propose its estimate of days required for the performance of such activities, within the first fifteen (15) days of the occurrence.
|
18.1.2.5
|
In the event that the CONTRACTOR has not hired or has not maintained insurance policies in force on ASSETS and elements of the ACCESS NETWORK as stated in Paragraph 7.21 of the Seventh Clause FUNDING AGREEMENT, FITEL may impose a penalty of five (05) ITU whenever compliance with this obligation has failed.
|
18.1.2.6
|
If the CONTRACTOR does not comply with the installation of the server for monitoring within the INVESTMENT PERIOD, according to what is stated in section 6.6.1.2 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, or all activities for commissioning of this are not completed, Fitel shall apply a penalty of five (5) ITU. The application of this penalty does not relieve the CONTRACTED PART to comply with this obligation.
|
18.1.2.7
|
If the CONTRACTOR fails to comply with the installation of the amount of help centers for users within the INVESTMENT PERIOD, according to what is stated in paragraph 5.5 of the TECHNICAL SPECIFICATIONS. The delay by the CONTRACTOR, will result in a penalty of five (05) ITU
|
18.1.3
|
Penalties for Failure to deliver Information:
|
18.1.3.1
|
If the CONTRACTOR fails to comply to submit the formats of the ACCESS NETWORK INSTALLATION MINUTES it will use, according to the period specified in paragraph 6.5.3.3 of the TECHNICAL SPECIFICATIONS, FITEL may impose a penalty of three (03) ITU. The application of this penalty does not relieve THE CONTRACTOR compliance with this obligation.
|
18.1.3.2
|
If the CONTRACTOR fails to deliver the ACCESS NETWORK INSTALLATION MINUTES according to the period specified in paragraph 6.5.3.6 of the TECHNICAL SPECIFICATIONS, Fitel may apply a penalty equal to one hundredth (0.01) ITU for each DAY of delay in the ACCESS NETWORK INSTALLATION MINUTES(station/terminal node or subscriber).
|
18.1.3.3
|
If the CONTRACTOR fails to comply with submitting the documentation and information that certifies the execution of activities AWARENESS TRAINING AND DISSEMINATION according to the period specified in Paragraph 5 of Appendix No. 14 of the TECHNICAL SPECIFICATIONS, Fitel will apply a penalty equal to one hundredth (0.01) of ITU per DAY of delay. It is only considered submitted the documentation and information for each LOCATION that has filled all fields, including subscription of faith that carry out this activity, and the list of attendees.
|
18.1.3.4
|
If the CONTRACTOR fails to comply with its final proposal to deliver CAPACITY BUILDING within the time limits indicated in Paragraph 4.1.2 of the TECHNICAL SPECIFICATIONS, FITEL shall apply a penalty of three (03) ITU for each of these proposals not filed within that period. The application of this penalty does not relieve the CONTRACTOR to comply with this obligation.
|
18.1.3.5
|
The CONTRACTOR shall send to Fitel, within the maximum period prescribed in Paragraph 6.5.5 of the TECHNICAL SPECIFICATIONS, a proposed Testing protocol for Acceptance of Facilities containing the minimum procedures required by Fitel. The delay by THE HIRED in remission of that protocol will result in a penalty of three hundredths (0.03) ITU per DAY of delay.
|
18.1.3.6
|
The CONTRACTOR shall send to Fitel, within the maximum period prescribed in Paragraph 2.5.1 of the TECHNICAL SPECIFICATIONS, the FINAL SCHEDULE OF ACTIVITIES, containing the minimum fields required by Fitel. The delay by the CONTRACTOR in referring this schedule will result in a penalty of one hundredth (0.01) of ITU for each day of delay.
|
18.1.3.7
|
The CONTRATOR shall send to Fitel, within the maximum period prescribed in Paragraph 5.4.2 of the TECHNICAL SPECIFICATIONS, the detailed proposal for the Maintenance Program. The delay by the CONTRACTOR in remission of the program will result in a penalty of one hundredth (0.01) of ITU for each day of delay.
|
18.1.3.8
|
If the CONTRACTOR fails to comply with the submission of information operations and maintenance facilities within the maximum period prescribed in Paragraph 5.6.2 of the TECHNICAL SPECIFICATIONS. The delay by the CONTRACTOR will result in a penalty of five (05) ITU.
|
18.1.3.9
|
If the CONTRACTOR fails to comply with the submission of the detailed content of the courses to be issued in training on the technology solution within the maximum period prescribed in Paragraph 2.6.1 of the TECHNICAL SPECIFICATIONS. The delay by the CONTRATED PARTY will result in a penalty of one hundredth (0.01) of ITU for each day of delay.
|
18.1.3.10
|
If the CONTRACTOR fails to comply with the referral of disaggregated costing PROPOSED ECONOMIC NETWORK ACCESS, within the maximum period prescribed in Paragraph 2.7.1 of the TECHNICAL SPECIFICATIONS NETWORK ACCESS. The delay by THE HIRED, will result in a penalty of two hundredths (0.02) ITU per DAY of delay.
|
18.1.3.11
|
When the CONTRACTOR fails to present to Fitel FIELD STUDIES, within the prescribed period and according to what is stated in paragraph 6.5.2 of the TECHNICAL SPECIFICATIONS, FITEL may apply a penalty of ten (10) UIT.
|
18.1.3.12
|
When the ONCTRACTED PARTY fails to present to Fitel the ENGINEERING STUDIES, within the deadline and according to what is stated in paragraph 6.5.2 of the TECHNICAL SPECIFICATIONS, FITEL apply a penalty of ten (10) UIT.
|
18.1.3.13
|
When the CONTRACTOR fails to present to FITEL the proposal to implement a tracking subsystem within the deadline and according to what is stated in paragraph 6.6.1 of the TECHNICAL SPECIFICATIONS, FITEL will apply a penalty of five (05) UIT
|
18.1.3.14
|
When the CONTRACTOR fails to submit to FITEL the formation of its team, within the prescribed period and according to what is stated in paragraph 6.4 of the TECHNICAL SPECIFICATIONS, FITEL apply a penalty of five (05) UIT.
|
18.1.3.15
|
When the CONTRACTOR fails to inform FITEL of a modification in the conformation of its staff, within the prescribed period and according to what is stated in paragraph 6.4 of the TECHNICAL SPECIFICATIONS, FITEL may apply a penalty two (02) UIT.
|
18.2
|
Penalties due to non compliance during the OPERATION PERIOD
|
18.2.1
|
The penalties applicable due to non compliance during the OPERATION PERIOD may be discounted from the next disbursement that corresponds to deliver to THE CONTRACTOR after the occurrence of the corresponding non compliance or according to the following provisions. In case that the amount of penalties of a semester exceeds the disbursement corresponding to said period, THE CONTRACTOR must cancel said debt to FITEL in a term of fifteen (15) days, counted since the collection notification.
|
18.2.2
|
Penalties due to non compliance of the availability of rendered services
|
18.2.2.1
|
In case the CONTRACTOR fails to comply with the requirement of minimum availability of the network of 98% annually, indicated in the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK and measured to the POP, the FITEL will impose a penalty of a tenth (0.1) of the UIT for each additional hour of interruption of the network. The availability will be calculated each year, counted since the first day of the OPERATION PERIOD.
|
18.2.2.2
|
In case that the availability of services is interrupted in some of the POPs due to Acts of God or Force Majeure or events not attributable to the CONTRACTOR . THE CONTRACTOR will notify to FITEL within the term of thirty (30) days following to the culmination of the month of the event, about the existence of said events, which must be communicated to FITEL through a letter enclosing, through optical storage devices (CD DVD or USB), the detail of the dates and the hours they request to discount, as well as the causes that originated it.
|
18.2.3
|
Penalties due to non compliance of TRAINING
|
18.2.3.1
|
In case THE CONTRACTOR fails to comply or partially complies to make the TRAINING according to indications made in Appendix N° 13 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL will impose a penalty of a tenth (0.1) of the UIT for each location where this obligation was not complied, within the term established. We shall consider that this activity is performed when the minimum percentage of attendees is reached. The application of this penalty does not release THE CONTRACTOR of the compliance of this obligation.
|
18.2.4
|
Penalties due to failure to submit information by THE CONTRACTOR
|
18.2.4.1
|
If the CONTRACTOR fails to deliver the Execution Minutes of TRAINING according to the term foreseen in Section III of Appendix N° 13 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL will apply a penalty equivalent to one hundredth (0.01) of the UIT for each DAY of delay per BENEFICIARY LOCALITY. The minutes will be only considered as submitted per BENEFICIARY LOCALITY those that have all full fields, including the subscription of the person that certifies the performance of this activity, and the list of attendees.
|
18.2.4.2
|
THE CONTRACTOR shall send to FITEL, within the maximum term established in Section III of Appendix N° 13 B of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, the final report of the TRAINING performed. The delay by THE CONTRACTOR in the remission of said report, shall result in a penalty of three hundredths (0.03) of the UIT for each DAY of delay.
|
18.2.4.3
|
THE CONTRACTOR shall send to FITEL, within the maximum term established in the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, the monthly reports of the use of access to Internet (total traffic, per locality and per type), monthly report of interruptions, monthly report of quality indicators. The delay by THE CONTRACTOR in the remission of reports, shall result in a penalty of one tenth (0.1) of the UIT per each DAY of delay and per each type of report.
|
18.2.4.4
|
When THE CONTRACTOR does not present to FITEL the conformation of its work team, within the term established and according to indications made in Section 6.4 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL shall apply a penalty of five (05) UIT.
|
18.2.4.5
|
When THE CONTRACTOR does not communicate to FITEL the modification of the conformation of its work team, within the term established and according to indications made in Section 6.4 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL shall apply a penalty of two (02) UIT.
|
18.2.4.6
|
When THE CONTRACTOR does not send to FITEL the format of the activities for Preventive Maintenance, within the term established and according to indications made in Section II of Appendix N° 17 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL shall apply a penalty of five (05) UIT.
|
18.2.4.7
|
When THE CONTRACTOR does not send to FITEL the Schedule of annual Preventive Maintenance, within the term established and according to indications made in Section II of Appendix N° 17 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL shall apply a penalty of three (03) UIT.
|
18.2.4.8
|
If THE CONTRACTOR sends to FITEL, out of the time established in Section
7.17
of the seventh clause of the FINANCING CONTRACT, the disaggregated information of investment costs of the ACCESS NETWORK or if its is inaccurate or false FITEL will impose a penalty of ten (10) UIT.
|
18.2.4.9
|
If THE CONTRACTOR sends to FITEL, out of the time established in Section
7.18
of the seventh clause of the FINANCING CONTRACT, the operative cash flow of the AWARDED PROJECT, or if it is inaccurate or false FITEL will impose a penalty of ten (10) UIT.
|
18.2.5
|
Penalties for OBJECTIONS
|
18.2.5.1
|
FITEL shall make supervisions prior to the performance of disbursements indicated in the Fourteenth Clause of the FINANCING CONTRACT. The supervisions will be made according to the protocols approved by FITEL.
|
18.2.5.2
|
FITEL shall apply a penalty of one (01) UIT for each one of the OBJECTIONS indicated as follows, per BENEFICIARY LOCALITY or station/node indicated in the SUPERVISION REPORT OF THE ACCESS NETWORK, with the indication that the application of this penalty does not release THE CONTRACTOR of the compliance of these obligations.
|
18.2.5.3.
|
When THE CONTRACTOR fails to comply with the preventive Maintenance Program according to the TECHNICAL PROPOSAL.
|
18.2.5.4.
|
If THE CONTRACTOR confines or prevents the personnel appointed by FITEL to make the corresponding visits during the effectiveness of the FINANCING CONTRACT in its tasks of SUPERVISION, FITEL can impose the penalty for each one of the prevented or limited visits. FITEL can discount that value in the immediate disbursement following to the date of the negative or limitation.
|
18.2.5.5.
|
If THE CONTRACTOR fails to comply with the installation of the blocking software specified in Section 3.5.4 of the TECHNICAL SPECIFICATIONS OF THE ACCESS NETWORK.
|
18.2.5.6.
|
When THE CONTRACTOR fails to comply with the term of 30 DAYS, established in Section 5.2 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, to install the required service, a penalty of one tenth (0.1) of the UIT for each DAY of delay will be applied.
|
18.2.5.7.
|
For the non compliance of each one of the indicators established in Appendix N° 11 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, a penalty will be applied according to the following table:
|
Nº
|
Indicator
|
Quality Parameter
|
Scope
|
Penalty
|
1
|
TIA – Incidence rate of troubleshooting for the service of access to Internet
|
Less than 10%
|
All the network
|
10 UIT x month
|
2
|
Latency
|
Less than 150 msec
|
Up to CPE
|
0.05 UIT x month x CPE
|
3
|
Packet loss
|
Less than 2%
|
To the subscriber
|
0.05 UIT x month x CPE
|
4
|
Up/Down Speed
|
Higher than 40% of hired speed
|
Up to CPE
|
0.05 UIT x mes x CPE
|
18.2.5.8.
|
The penalties, if any, will be added per indicator, for each one of the months of the supervised semester.
|
Ø
|
TRANSPORTATION NETWORK
|
18.3.
|
The penalties applicable for non compliance ofTHE TRANSPORT NETWORK will be discounted from the next disbursement that corresponds to deliver to THE CONTRACTOR after the occurrence of the corresponding non compliance or according to indications made in the following provisions. In case that the amount of the penalties exceeds the disbursement corresponding to said period, THE CONTRACTOR must cancel said debt to FITEL in a term of fifteen (15) DAYS, counted since the collection notification.
|
18.4.
|
Failure Activities:
|
18.4.1
|
When THE CONTRACTOR fails to comply with the term established in Section 2.2 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to culminate the first advance or total delivery of the TRANSPORTATION NETWORK, a penalty of five (05) UIT for each DAY of delay will be applied.
|
18.4.2
|
In case that THE CONTRACTOR has not contracted or has not kept in force the insurance policies on the assets and elements that conform the TRANSPORTATION NETWORK according to Section 7.21 of the Seventh Clause of the FINANCING CONTRACT, FITEL will impose a penalty of five (05) UIT each time this obligation has not been complied.
|
18.4.3
|
In case THE CONTRACTOR fails to comply with the installation of the server
for monitoring within the INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK, according to Section 15.10.2 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, or all the activities for the commissioning of it have not concluded, FITEL will impose a penalty of five (5) UIT. The application of this penalty does not release THE CONTRACTOR of the compliance of this obligation.
|
18.4.4
|
In case THE CONTRACTOR fails to comply with the installation of the monitoring system within the INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK, according to Section 15.10.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, and users and keys, among others, or all the activities for the commissioning of this system are not concluded, FITEL will impose a penalty of five (5) UIT. The application of this penalty does not release THE CONTRACTOR of the compliance of this obligation.
|
18.4.5
|
In case of non compliance of the activities to perform during the INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK is due to a supposed Act
of God or force majeure, or facts attributable to THE CONTRACTOR, it must send to FITEL the documentation that demonstrates it, within the following month of the event of non compliance. Furthermore, in order to assess the fact, THE CONTRACTOR must communicate the occurrence of the event, and propose the estimated days required for the compliance of said activities, within the first fifteen (15) days of the occurrence of the event.
|
18.5
|
Penalties due to the Failure of Information delivery:
|
18.5.1
|
When THE CONTRACTOR fails to comply with the term established in Section 2.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to submit the GENERAL TECHNICAL PROPOSAL, a penalty of one (01) UIT per each DAY of delay will be applied.
|
18.5.2
|
When THE CONTRACTOR fails to comply with the term established in Section 2.2 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to submit each DEFINITIVE TECHNICAL PROPOSAL, a penalty of one (01) UIT per each DAY of delay will be applied.
|
18.5.3
|
If THE CONTRACTOR fails to comply with the remission of the disaggregated costing of the ECONOMIC PROPOSAL of the TRANSPORTATION NETWORK, within the maximum term established in Section 2.6 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK. The delay by THE CONTRACTOR, will result in a penalty of one 1 UIT per each DAY of delay.
|
18.5.4
|
When THE CONTRACTOR fails to comply with the term established in Section 10.4 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to submit recommendations and the requested protocols, a penalty of one hundredth (0.01) of the UIT per each DAY of delay will be applied
.
|
18.5.5
|
When THE CONTRACTOR fails to comply with the term established in Section 14.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to submit the TECHNICAL FILE, a penalty of one 1 UIT per each DAY of delay will be applied
.
|
18.5.6
|
When THE CONTRACTOR does not present to FITEL the conformation of its work team, within the term established and according to Section 15.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, FITEL shall apply a penalty of 1 UIT.
|
18.5.7
|
When THE CONTRACTOR does not communicate to FITEL the modification of the conformation of its work team, within the term established and according to Section 15.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, FITEL shall apply a penalty of one (01) UIT.
|
18.5.8
|
If THE CONTRACTOR fails to deliver the INSTALLATION MINUTES OF THE TRANSPORTATION NETWORK according to the term foreseen in Section 15.9.6 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, FITEL shall apply a penalty equivalent to one hundredth (0.01) of the UIT per each DAY of delay for the INSTALLATION MINUTES OF THE TRANSPORTATION NETWORK.
|
18.5.9
|
If THE CONTRACTOR sends to FITEL, out of the time established in the FINANCING CONTRACT, the disaggregated information of investment costs of the TRANSPORTATION NETWORK or if it is inaccurate or false, FITEL will impose a penalty of ten (10) UIT.
|
Ø
|
COMPETENCE FACTORS
|
18.6
|
In the case that THE CONTRACTOR has submitted as part of its TECHNICAL PROPOSAL, the installation of infrastructure to provide the services of the AWARDED PROJECT, in an additional amount of BENEFICIARY LOCALITIES, FITEL will impose a penalty of fifteen (15) UIT if THE CONTRACTOR fails to comply with the complete installation of any service of the AWARDED PROJECT within the term established. This penalty will not be applied if THE CONTRACTOR did not included said factor in the TECHNICAL PROPOSAL.
|
18.7
|
In case that THE CONTRACTOR has submitted, the delivery of tablets as referred to in the paragraph 9.1.1 of the TERMS ANS CONDITIONS as part of its TECHNICAL OFFER and fails to deliver the total number of items, FITEL will impose a penalty of fifteen (15) UIT per year of failure of delivery of the total amount of tablets.. This penalty will not be applied if THE CONTRACTOR did not include said factor.
|
18.8
|
Penalties for not keeping the GUARANTEES in force
|
|
(Guarantee Value) x (number of Days in which the
GUARANTEE is not in force)
|
Penalty =
|
--------------------------------------------------------------------------------
UIT
|
18.9
|
Independence of penalties from administrative sanctions
|
18.10
|
Procedure of payment of penalties
|
18.10.1
|
The penalties may be discounted from disbursements indicated in the fourteenth Clause of the FINANCING CONTRACT. The payment of penalties does not imply a waiver of the right of FITEL to claim the compensation for damages, if any, neither its right to terminate the FINANCING CONTRACT, according to Section 19.2. of the nineteenth Clause of the FINANCING CONTRACT.
|
18.10.2
|
When there are penalties that are not covered by a pending disbursement of payment, or when there is no disbursement from which said penalties may be discounted, or in case that in the last four months of the OPERATION PERIOD there is any amount of penalties to collect by FITEL; THE CONTRACTOR must cancel the difference directly to FITEL in a term of fifteen (15) DAYS, counted since the notification of collection. In case of non compliance of said payment, we shall proceed to execute the GUARANTEE OF PERFORMANCE BOND GUARANTEE OF THE FINANCING CONTRACT for the Collection of the owed amount.
|
18.10.3
|
THE CONTRACTOR shall pay the penalties in NUEVOS SOLES.
|
19.1
|
For expiration of the term of the FINANCING CONTRACT.
|
19.2
|
Termination by FITEL
|
19.2.1
|
FITEL may terminate THE FINANCING CONTRACT of full right by some of the following grounds:
|
|
a)
|
When THE CONTRACTOR is declared in a situation of bankruptcy before the Commission of Insolvency Proceedings of the National Institute of Defense of Competence and Intellectual Property– INDECOPI or the person acting as such.
|
|
b)
|
Due to the lack of renewal of guarantees indicated in the Tenth Clause of the FINANCING CONTRACT.
|
|
c)
|
Due to the unjustified non compliance of the DEFINITIVE SCHEDULE OF ACTIVITIES OF THE ACCESS NETWORK OR THE DEFINITIVE SCHEDULE OF ACTIVITIES OF THE TRANSPORT NETWORK; provided said non compliance assessed by FITEL, results in a non compliance of the activities within the INVESTMENT PERIOD of THE ACCESS NETWORK or within the INVESTMENT PERIOD of THE TRANSPORT NETWORK referred in the TECHNICAL SPECIFICATIONS.
|
|
d)
|
For unjustified non compliance of the TECHNICAL SPECIFICATIONS and, in general, of the obligations agreed in the FINANCING CONTRACT.
|
|
e)
|
For abandonment in rendering the service of access to Internet or, if applicable, of the access to Intranet, in some of the BENEFICIARY LOCALITIES or any of the MANDATORY PAID INSTITUTIONS for causes attributable to THE CONTRACTOR.
|
|
f)
|
When there are deviations in the use of the AWARDED FINANCING, or is given a different destiny for which it was granted; without prejudice of the agreement made in the paragraph 10.2 of the Tenth Clause of the FINANCING CONTRACT.
|
|
g)
|
For unjustified non compliance of the TECHNICAL PROPOSAL, except modifications established between the PARTIES.
|
|
h)
|
When FITEL had knowledge that the company that leadered the CONSORTIUM did not had a minimum total participation of twenty five per cent (25%) in the legal person incorporated as THE CONTRACTOR, before three (03) years, counted since the CLOSING DATE.
|
|
i)
|
For loss of the Concession of Public Telecommunications Service or loss of the registration in the registry of services of added value to provide the Public Telecommunication Services established in the TECHNICAL SPECIFICATIONS.
|
|
j)
|
When the amount of penalties referred to the INVESTMENT PERIOD of THE ACCESS NETWORK or the INVESTMENT PERIOD of THE TRANSPORT NETWORK have exceeded the amount in force of the amount of the ADVANCE GUARANTEE and the PERFORMANCE BOND GUARANTEE of THE FINANCING CONTRACT, .
|
|
k)
|
For inaccuracy or falsehood of the AFFIDAVITS submitted by THE CONTRACTOR in the BID, as BIDDER.
|
|
l)
|
For non compliance of the obligations of CLOSURE OF THE FINANCING CONTRACT.
|
|
m)
|
For reasons of convenience, importance or interest of the Peruvian Government, without being necessary the expression of cause in this case.
|
|
n)
|
For refusing to transfer the ownership and title in favor of the MTC or of FITEL the ASSETS OF THE TRANSPORTATION NETWORK or of the ACCESS NETWORK respectively. This ground includes the negative to make the acts necessary to formalize or improve said transfers.
|
|
o)
|
Refuse to provide all the facilities to the MTC, to FITEL and to the concessionaire of the operation of the TRANSPORTATION NETWORK that these require with the purpose to facilitate the bid and commissioning of said component of the AWARDED PROJECT.
|
19.2.2
|
In the cases of termination of the FINANCING CONTRACT indicated in the preceding Section, with exception of the provisions made in literal n), FITEL will be empowered to: (i) execute the PERFORMANCE BOND GUARANTEE OF THE FINANCING CONTRACT referred in the Fourteenth Clause; and, (ii) require THE CONTRACTOR a compensation for damages caused due to its non compliance.
|
19.2.3
|
In case that THE CONTRACTOR has not acquired the ASSETS OF THE ACCESS NETWORK or ASSETS OF THE TRANSPORTATION NETWORK; and the FINANCING CONTRACT is terminated during the INVESTMENT PERIOD by virtue of literals a) until o) of the preceding Section 19.2.1., with exception of literals e),) and m), THE CONTRACTOR shall return to FITEL the integrity of the AWARDED FINANCING disbursed until that time or, the guarantees will be executed.
|
19.2.4
|
In case that THE CONTRACTOR has acquired the ASSETS OF THE ACCESS NETWORK or ASSETS OF THE TRANSPORTATION NETWORK without proceeding to its installation and the FINANCING CONTRACT is terminated during the INVESTMENT PERIOD by virtue of literals a) until o) of the preceding Section 19.2.1., with exception of literals e), and m), the PARTIES shall subscribe the corresponding award minutes and THE CONTRACTOR will endorse in favor of FITEL the insurance policies referred in Section 7.21 of the Seventh Clause of the FINANCING CONTRACT and will return the non executed part of the disbursement of the AWARDED FINANCING or, the guarantees will be executed.
|
19.2.5
|
In case that THE CONTRACTOR has acquired the ASSETS OF THE ACCESS NETWORK or the ASSETS OF THE TRANSPORTATION NETWORK, and it has been installed and the FINANCING CONTRACT is terminated by virtue of paragraphs from a) to the literal o) of the preceding Section 19.2.1., as appropriate, the PARTIES shall subscribe the corresponding award minutes and THE CONTRACTOR will endorse in favor of FITEL the insurance policies referred in Section 7.21 of the Seventh Clause of the FINANCING CONTRACT.
|
19.2.6
|
In the case that THE CONTRACTOR has acquired and made the installation of the ASSETS OF THE ACCESS NETWORK or the ASSETS OF THE TRANSPORTATION NETWORK and the FINANCING CONTRACT is terminated by virtue of literal m) of Section 19.2.1., the PARTIES will subscribe the corresponding award minutes and THE CONTRACTOR will endorse in favor of FITEL the insurance policies referred in Section 7.21 of the Seventh Clause of the FINANCING CONTRACT and THE CONTRACTOR will keep the amount of the AWARDED FINANCING received in the part equivalent to the supply value.
|
19.2.7
|
In all the assumptions of termination by FITEL in which the corresponding award minutes is subscribed and the endorsement of the policies is made on the ASSETS OF THE ACCESS NETWORK and of the TRANSPORTATION NETWORK, it shall not be included neither in the minutes subscription neither in the endorsement in favor of FITEL of the policy those equipment and/or preexisting installations at the enactment of the FINANCING CONTRACT, that are used to provide the proposed services in the AWARDED PROJECT.
|
19.3
|
Termination by THE CONTRACTOR
|
19.3.1
|
THE CONTRACTOR may terminate the FINANCING CONTRACT of full right, by the following grounds:
|
|
a)
|
Lack of some disbursement by FITEL, provided THE CONTRACTOR has complied with all the obligations indicated in the Seventh Clause of the FINANCING CONTRACT and THE CONTRACTOR has corrected all the OBJECTIONS of the SUPERVISION REPORT; or,
|
|
b)
|
Non justified negative of FITEL to receive the INSTALLATION for a term greater than one hundred and twenty (120) DAYS; or,
|
|
c)
|
Before the delay of FITEL in the disbursement of a quota for more than one hundred and twenty (120) DAYS, for reasons not attributable to THE CONTRACTOR.
|
19.3.2
|
In such cases, THE CONTRACTOR will preserve the ownership of the ASSETS OF THE ACCESS NETWORK and of the TRANSPORTATION NETWORK and the disbursements effectively executed, prior reconciliation of balances; likewise, will endorse in favor of FITEL the insurance policies referred in Section 7.21 of the Seventh Clause of the FINANCING CONTRACT; and, FITEL will be obliged to return the PERFORMANCE BOND GUARANTEE OF THE FINANCING CONTRACT.
|
19.4
|
Termination by Mutual Agreement
|
|
Under this assumption, the PARTIES will perform the reconciliation of balances, if applicable.
|
|
In said assumption of termination, FITEL shall return the corresponding guarantee; likewise, the PARTIES declare that the payment for damages will not be claimed.
|
20.1
|
Prior to the termination of the FINANCING CONTRACT, the affected PARTY by the non compliance will send to the PARTY that has failed to comply, a notarial letter communicating the non compliance and terminating it of full right.
|
20.2
|
Regarding the assumptions foreseen in the nineteenth Clause of the FINANCING CONTRACT, FITEL may require to THE CONTRACTOR, to satisfy the provision subject matter of non compliance in a maximum term of fifteen (15) DAYS, and may establish higher terms attending exceptional circumstances upon determination of FITEL under penalty of terminating the FINANCING CONTRACT of full right according to the provisions set forth in Article 1429º of the Civil Code.
|
20.3
|
According to the provisions of Sections 3.20 and 3.21 of the third clause and Section 4.6. of fourth clause of the FINANCING CONTRACT in all cases of termination that are produced once the OPERATION PERIOD has begun and only in the case that FITEL requests it, THE CONTRACTOR must continue with the operation and maintenance for the term required by FITEL, which shall not exceed from eight (08) months, counted since the termination communication of the FINANCING CONTRACT, in order to guarantee the continuity of the Public Telecommunications Services. During said term, FITEL will continue delivering the corresponding financing for the proportional number of DAYS elapsed.
|
20.4
|
The indication made in the preceding section will be also of application for the assumption foreseen in literal a) of the paragraph 19.2.1 of the nineteenth Clause of the FINANCING CONTRACT, in which case, a temporary administration will be conformed of the AWARDED PROJECT composed by representatives of FITEL and will represent it before the Meeting of Creditors with the purpose to secure that THE CONTRACTOR continues with the provision of services established in this contract.
|
20.5
|
In all cases of termination of the FINANCING CONTRACT, a reconciliation of balances will be made until the termination date.
|
21.1
|
Is the stage of execution of the FINANCING CONTRACT that will be made within the last semester of the OPERATION PERIOD and that will culminate with the conclusion of the FINANCING CONTRACT by the compliance of its obligations.
|
21.2
|
For the CLOSURE OF THE FINANCING CONTRACT, the PARTIES shall perform the following activities:
|
|
i.
|
THE CONTRACTOR shall correct the OBJECTIONS formulated by FITEL, in a maximum term of sixty (60) DAYS since its notification.
|
|
ii.
|
Once the OBJECTIONS are corrected by THE CONTRACTOR, previously verified by FITEL, THE PARTIES within a maximum term of fifteen (15) DAYS, will reconcile the calculus and payment of penalties incurred by THE CONTRACTOR; and the financial liquidation of disbursements and payments to which the PARTIES are obliged.
|
|
iii.
|
Once the information referred in the preceding literal ii) is reconciled, THE PARTIES, shall subscribe the agreement referred in Section 21.3. of this clause.
|
21.3
|
The CLOSURE OF THE FINANCING CONTRACT will be formalized through the subscription of the corresponding agreement, in which the PARTIES declare that there are no outstanding obligations to comply and that the financial liquidation has been satisfactorily made.
|
21.4
|
On the ten (10) DAYS counted since the subscription of the agreement of the CLOSURE OF THE FINANCING CONTRACT, the last disbursement will be made and, later, in a maximum term of five (05) BUSINESS DAYS the corresponding guarantees will be returned.
|
21.5
|
In case of non compliance of the obligations for the CLOSURE OF THE CONTRACT, FITEL shall require to THE CONTRACTOR its compliance in a term no later than 15 DAYS, under penalty to terminate the FINANCING CONTRACT of full right, consequently it will forfeit the last disbursement and shall proceed to the execution of the PERFORMANCE BOND GUARANTEE OF THE FINANCING CONTRACT
|
22.1.
|
If there are controversies of any nature between THE CONTRACTOR and FITEL related or resulting from this FINANCING CONTRACT, that may not be settled by common agreement by both parties or if there is no mechanism of solution foreseen by this document, they will be decided by an arbitral tribunal in a legal arbitration.
|
22.2
|
The arbitration will be carried out by an Arbitral Tribunal composed by three (03) members.
|
22.3
|
The arbitration will be carried out according to the rules established in the Regulation of Arbitration of the Chamber of Commerce of Lima or in the Regulation of Arbitration of the Bar Association of Lima, of the AMCHAM or other chosen by FITEL or THE CONTRACTOR, according to the demand that comes from any of these parties.
|
22.4
|
The Arbitral Tribunal will be composed as follows:
|
|
•
|
Each one of the PARTIES will appoint one arbitrator and they by common agreement, shall appoint a third arbitrator, who will chair the Arbitral Tribunal.
|
|
•
|
In case one of the PARTIES does not appoint its arbitrator within a term of ten (10) DAYS counted since the date in which one of them declares to the other in written its will to submit to this clause, the arbitrator who has not been appointed, will be appointed by the institution that is in charge of the Management of the arbitration process.
|
|
•
|
In case the PARTIES do not appoint the third arbitrator within a term of sixty (60) DAYS counted since the appointment of the second arbitrator, the third arbitrator will be appointed by the institution that is in charge of the management of the arbitration process.
|
22.5
|
The Arbitral Tribunal shall have a term of ninety (90) BUSINESS DAYS since its installation to issue the corresponding arbitration award, which will be final. Likewise, the Tribunal may be in charge of accurately determining the controversy, and to grant an extension if necessary to issue the award.
|
22.6
|
The place of the arbitration will be the city of Lima. The language to be used in the arbitration process will be Spanish.
|
22.7
|
The Arbitral Tribunal, when issuing the arbitration award, shall determine the form in which the parties must assume the expenses and costs of the arbitration.
|
22.8
|
In case that any of the PARTIES decides to file an action for annulment against the arbitration award before the Judiciary, it must previously constitute in favor of the party or the opposite parties a Letter of Guarantee granted by a first category bank with headquarters in Lima, equivalent to US$ 100,000.00 (One hundred thousand and 00/100 DOLLARS OF THE UNITED STATES OF AMERICA), which will be Joint and several, irrevocable, unconditional and automatically enforceable in case said resource, in final judgment, were not declared well founded. Said Letter of Guarantee must be in force during the process and will be delivered in custody to a notary of the city of Lima.
|
22.9
|
THE FINANCING CONTRACT is subscribed according to the legal regulations of the Republic of Peru, reason by which any controversy resulting from its performance, interpretation, execution, validity and effectiveness will be governed by these legal regulations.
|
23.1
|
THE CONTRACTOR may assign the FINANCING CONTRACT, and transfer or subrogate, totally or partially, the obligations under its charge, prior favorable opinion of FITEL.
|
23.2
|
THE CONTRACTOR is obliged to deliver to FITEL the information it may require, for purposes of the assignment and/or transfer of the FINANCING CONTRACT.
|
23.3
|
In case FITEL approves the assignment, transfer or indicated subrogation, an addendum must be subscribed to the FINANCING CONTRACT.
|
23.4
|
The new contractor, must comply with the same requirements established in the TERMS and the matters that correspond to the FINANCING CONTRACT.
|
24.1
|
Integrant Parts of the Contract
|
|
a)
|
The FINANCING CONTRACT.
|
|
b)
|
The TECHNICAL PROPOSAL.
|
|
c)
|
The CIRCULARS.
|
|
d)
|
The TECHNICAL SPECIFICATIONS.
|
|
e)
|
The TERMS.
|
24.2
|
Waiver of Rights
|
24.3
|
Modification of the Contract
|
24.4
|
Revocation of Contract
|
24.5
|
Intellectual Property
|
25.1
|
All the notifications and communications related to the FINANCING CONTRACT, unless another mechanism or formality is expressly stated, will be made in written, and will be sent from and to the addresses, fax numbers and e-mails indicated in Section 25.3. of this clause, with the corresponding effects established in the same section.
|
25.2
|
Any of the PARTIES may modify the addresses, fax numbers and e-mails, prior communication in written to the other PARTY, sent in the form indicated in Section 25.4. of this clause, with the corresponding effects established in the same section.
|
25.3
|
All the notifications under the FINANCING CONTRACT will be delivered with acknowledgment of receipt, or with any other mechanism that credits the date of delivery of the notification, and will be effective on the date indicated in the corresponding acknowledgment of receipt.
|
25.4
|
Any change of data of FITEL or of THE CONTRACTOR must be made through written communication sent to the other PARTY by notary and have effect since the following day of the date indicated in the corresponding acknowledgment of receipt.
|
ANNEX Nº 1
|
:
|
BENEFICIARY LOCALITIES AND MANDATORY PAID INSTITUTIONS
|
ANNEX Nº 2
|
:
|
TECHNICAL PROPOSAL
|
ANNEX Nº 3
|
:
|
DEFINITIVE SCHEDULE OF THE ACTIVITIES OF THE CONTRACTOR
|
ANNEX Nº 4
|
:
|
ECONOMIC PROPOSAL
|
ANNEX Nº 6
|
:
|
ADVANCE GUARANTEE AND PERFORMANCE BOND OF THE FINANCING CONTRACT
|
ANNEX Nº 7
|
:
|
TECHNICAL SPECIFICATIONS
|
ANNEX Nº 8
|
:
|
TERMS THAT GOVERN THE BID
|
ANNEX Nº 9
|
:
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CIRCULARS
|
ANNEX Nº 10
|
:
|
AFFIDAVIT OF RESPONSIBILITY
|
ANNEX N° 11
|
:
|
PROCEDURE OF CALCULUS FOR AVAILABILITY
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ANNEX N° 12
|
:
|
FORMAT OF INVESTMENT COSTS OF THE ACCESS AND TRANSPORTATION NETWORK
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ANNEX N° 13
|
:
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GUIDELINES FOR THE CHANGE OF MANDATORY PAID INSTITUTIONS
|
|
-
|
That, will inform to FITEL about the implementation of THE AWARDED PROJECT through the participation of subcontractors or other forms of outsourcing.
|
|
-
|
That, assumes the responsibility of the compliance of the contractual obligations of the subcontractor or of other natural or legal persons with whom he shall subscribe outsourcing contracts for the implementation of the AWARDED PROJECT.
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|
-
|
That, will not allege breach of subcontractors and of natural or legal persons with whom he shall subscribe outsourcing contracts to evade the obligations assumed in the FINANCING CONTRACT.
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Item
|
Description
|
Unit
|
Quantity
|
Unitary Price $
|
Unitary Price S/.
|
Total Price $
|
Total Price S/.
|
I
|
INFRASTRUCTURE OF STATIONS
|
||||||
Tower Type 1
|
|||||||
Tower Type 2
|
|||||||
Tower Type 3
|
|||||||
Tower Type 4
|
|||||||
Tower Type 5
|
|||||||
Anchor
|
|||||||
Support
|
|||||||
Others
|
|||||||
II
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ASSOCIATED CIVIL WORKS
|
||||||
Perimeter Enclosure
|
|||||||
Physical Edge security
|
|||||||
Booths
|
|||||||
Tower Base
|
|||||||
Inst. of support Bracket type for antenna of RF.
|
|||||||
Others
|
|||||||
III
|
MANPOWER
|
||||||
Installation of towers
|
|||||||
Associated civil works
|
|||||||
Material haulage
|
|||||||
Equipment haulage
|
|||||||
Others
|
|||||||
IV
|
LICENSES AND PERMITS
|
||||||
Municipal permits
|
|||||||
SERNANP
|
|||||||
CIRA
|
|||||||
Others
|
|||||||
V
|
Energy and security system of Stations
|
||||||
Place conditioning
|
|||||||
Batteries bank
|
|||||||
UPS
|
|||||||
Generators
|
|||||||
Fuel tank
|
|||||||
Electrical panels
|
|||||||
Rectifiers
|
|||||||
Ground
|
|||||||
Light facilities
|
|||||||
Lightning rod
|
|||||||
Solar panels
|
|||||||
Ground installation
|
|||||||
Electric network installation
|
|||||||
Others
|
Item
|
Description
|
Unit
|
Quantity
|
Unitary Price $
|
Unitary Price S/.
|
Total Price $
|
Total Price S/.
|
I
|
Optical Equipment
|
||||||
Switches and routers of connection to the transportation network
|
|||||||
Connectors
|
|||||||
Others
|
|||||||
II
|
Radio Equipment
|
||||||
Ptp Radios
|
|||||||
Base Radios
|
|||||||
AP Radios
|
|||||||
Antennas
|
|||||||
Connectors
|
|||||||
Amplifiers
|
|||||||
Others
|
|||||||
III
|
MANPOWER
|
||||||
Radios installation
|
|||||||
Network configuration
|
|||||||
Others
|
|||||||
IV
|
User Modules
|
||||||
Computers
|
|||||||
UPS
|
|||||||
Switch and cables
|
|||||||
Others
|
|||||||
V
|
Management Center
|
||||||
Management system of radios
|
|||||||
Management system of the electric part
|
|||||||
Management system of security and alarms
|
|||||||
Servers
|
|||||||
Others
|
Item
|
Description
|
Unit
|
Quantity
|
Unitary Price $
|
Unitary price S/.
|
Total Price $
|
Total Price S/.
|
I
|
Preparation of plans and methodology
|
||||||
Training
|
|||||||
Awareness
|
|||||||
WEB applications
|
|||||||
Others
|
|||||||
II
|
Execution of activities
|
||||||
Cost of training service
|
|||||||
Cost of awareness service
|
|||||||
Amounts of diffusion contracts. Servers, etc.
|
|||||||
Others
|
|||||||
III
|
Modules
|
||||||
Computers
|
|||||||
UPS
|
|||||||
Switch and cables
|
|||||||
Others
|
|||||||
IV
|
Management Center
|
||||||
Management System of Radios
|
|||||||
Management system of the electric network
|
|||||||
Management system of security and alarms
|
|||||||
Others
|
Item
|
Optical Fiber
|
Unit
|
Quantity
|
Unitary Price $
|
Unitary Price S/.
|
Total Price $
|
Total Price S/.
|
I
|
Acquisition
|
||||||
Optical Fiber x reel
|
|||||||
Optical Equipment (detail per type)
|
|||||||
Switches
|
|||||||
Connectors
|
|||||||
Others
|
|||||||
II
|
Nodes
|
||||||
Conditioning
|
|||||||
Cabinets
|
|||||||
Air conditioning system
|
|||||||
Fire system
|
|||||||
Cables
|
|||||||
Security system
|
|||||||
Others
|
|||||||
III
|
Manpower
|
||||||
Installation of fiber
|
|||||||
Equipment installation
|
|||||||
Others
|
|
1.
|
THE CONTRACTOR has the obligation to provide the service of access to Internet to each one of the MANDATORY PAID INSTITUTIONS located in the BENEFICIARY LOCALITIES according to Annex 01 of the FINANCING CONTRACT.
|
|
2.
|
The changes of the MANDATORY PAID INSTITUTIONS operate in the following cases:
|
|
2.1
|
That the MANDATORY PAID INSTITUTION already has the service of access to Internet and declares that it does not want to hire the service to THE CONTRACTOR at least during the INVESTMENT PERIOD of the AWARDED PROJECT.(This is during the INVESTMENT PERIOD of the ACCESS NETWORK and during the INVESTMENT PERIOD of the TRANSPORT NETWORK).
|
|
2.2
|
That the MANDATORY PAID INSTITUTION put impediments to the installation of the equipment for any none justified reason.
|
|
2.3
|
That for any reason, whether technical or by impediment of the population or authorities, among others, the station (POP) may not be installed that will supply the service to the BENEFICIARY LOCALITY, and in this case they should make the change of all the MANDATORY PAID INSTITUTIONS. In which case a change of BENEFICIARY LOCATION will take place.
|
|
2.4
|
In all the aforementioned cases, FITEL will assess and determine if said changes proceed, communicating to THE CONTRACTOR its approval.
|
|
3.
|
The MANDATORY PAID INSTITUTIONS of replacements may be proposed by THE CONTRACTOR and will be given preference according to the following considerations:
|
|
3.1
|
The replacements of the MANDATORY PAID INSTITUTIONS will be given preferably within the same BENEFICIARY LOCALITY.
|
|
3.2
|
The educational institutions may be only replaced by another educational institution, in this case THE CONTRACTOR may solicit FITEL the exchange for another academic institution located in another BENEFICIARY LOCATION
|
|
3.3
|
The MANDATORY PAID INSTITUTIONS different to the educational institutions may be replaced by police stations, posts, municipalities or others, in the same or different locality.
|
|
4.
|
In no case THE CONTRACTOR may require additional financing to FITEL basing it in the replacement of some MANDATORY PAID INSTITUTION or some BENEFICIARY LOCATION.
|
Messrs.
|
Present
.-
|
Reference:
|
Public Tender for the execution of the Projects “Broadband Installation for Comprehensive Connectivity and Social Development of the Ayacucho Region”.
|
Dear Sirs:
|
TECHNICAL PROPOSAL
|
|||
COMPETITION FACTOR
|
UNITS
|
IN LETTERS
|
IN NUMBERS
|
Localities additional
|
Number
|
Forty six
|
46
|
Tablets
|
Number
|
One hundred sixty nine thousand five hundred fifty
|
169, 550
|
ECONOMIC PROPOSAL
|
|||
COMPETITION FACTOR
|
UNITS
|
IN LETTERS
|
IN NUMBERS
|
FINANCING OF THE TRANSPORTATION NETWORK
|
US$
|
Thirty seven million eight hundred fifty nine thousand one hundred seventy and 00/100
|
37 859 170.00
|
ACCESS NETWORK FINANCING
|
US$
|
Sixty eight million five hundred fifty five thousand two hundred forty and 00/100
|
68 555 240.00
|
The figures will be written with a maximum of two (02) decimals.
|
|||
|
|||
BONUS FOR ADVANCEMENT PERFORMANCE OF THE INSTALLATION STAGE
|
|||
CALENDAR DAY
|
UNITS
|
IN LETTERS
|
IN NUMBERS
|
Number of calendar days reduction
|
calendar days
|
Sixty
|
60
|
Entity
|
:
|
CONSORCIO GILAT
SHORTLISTED BIDDER
|
Name
|
:
|
ARIEH GAD ROHRSTOCK
Legal Representative of SHORTLISTED BIDDER
|
Signature
|
:
|
…………………………………….
Legal Representative of SHORTLISTED BIDDER
|
Name
|
:
|
YVETH FIORELLA ROMERO GUIA
Legal Representative of SHORTLISTED BIDDER
|
Signature
|
:
|
…………………………………….
Legal Representative of SHORTLISTED BIDDER
|
1.1.
|
FITEL is a fund for the provision of universal access, meaning access in the national territory to a set of essential telecommunications services, capable of transmitting voice and data, which has, among its objectives, reducing the gap in access to telecommunications services in rural areas and in places considered of social interest.
|
1.2.
|
By Law No. 28900 was granted to FITEL the status of legal entity of public law. FITEL is assigned to the Transport and Communications Sector. The above mentioned law was regulated by Supreme Decree No. 010-2007 MTC.
|
1.3.
|
The Regulation for the Administration and Functions of the Telecommunications Investment Fund - FITEL, approved by Supreme Decree No. 036-2008-MTC
|
1.4.
|
The "Guidelines of the policy for the opening of the telecommunications market in Peru", approved by Supreme Decree No. 020-98-MTC, published on August 5
th
, 1998 and its amendments.
|
1.5.
|
Also, the "Guidelines of policies to promote greater access to Public Telecommunications Services in rural areas and places of preferential social interest", approved by Supreme Decree No. 049-2003-MTC published on August 17
th
, 2003, indicate that its goal is to accelerate the incorporation, under equal conditions, of populations in rural areas and of social interest, to the opportunities offered by Information Technology and Communication, promoting their integration into the public telecommunications network.
|
1.6.
|
By Supreme Decree No. 024-2008-MTC, published on August 16
th
, 2008, was approved the General Regulatory Framework to promote the development of Public Telecommunications Services in rural areas and places of social interest.
|
1.7.
|
Ministerial Resolution No. 224-2012 MTC/01, published on May 12
th
, 2012, whereby the Institutional Strategic Plan of Transportation and Communications Sector was approved, which establishes as one of the specific objectives "to promote the deployment of telecommunications infrastructure and services that enable connectivity and virtual integration of the country, prioritizing areas of social interest and borders"; specifying as target to achieve by 2016, that Peru has 100% districts served by at least one telecommunications service.
|
1.8.
|
Law N° 29904, Law for Promotion of Broadband and Construction of the National Fiber Optic Backbone Network stated as a public necessity and national interest, the construction of a National Fiber Optic Backbone Network which gathers together all the capitals of the provinces of the country and the deployment of high-capacity networks that integrate all districts to enable broadband connectivity fixed and/or mobile and mass distribution across the country, in terms of competition.
|
1.9.
|
With Supreme Decree No. 014-2013-MTC was approved the Regulation of Law No. 29904 – Law for Promotion of Broadband and the Construction of the National Fiber Optic Backbone Network.
|
1.10.
|
Law No. 30228, amending Law No. 29022 –Law to expand telecommunications infrastructure, called Law to enhance the expansion of Telecommunications Infrastructure.
|
1.11.
|
With Official Letter No. 1179-2014 MTC/24, dated July 2
nd
, 2014, PROINVERSIÓN was commissioned to prepare the TENDER for selecting the Operator who will be responsible for implementing the project “Installation of Broadband for Comprehensive Connectivity and Social Development of the Apurimac Region”
|
1.12.
|
Supreme Resolution No. 037-2014_EF dated August 18
th
, 2014-EF, published on August 19
th
, 2014, whereby the resolution adopted at the meeting of the Steering Council of PROINVERSIÓN of July 14
th
, 2014, which incorporated to the process of Private Investment Promotion of the Project “Installation of Broadband for Comprehensive Connectivity and Social Development of the Apurimac Region”
|
1.13.
|
Supreme Resolution No. 043-2014-EF, published on August 26
th
, 2014, ratified the agreement that determined the modality under which the private investment promotion in the Project "Installation of Broadband for Comprehensive Connectivity and Social Development of the Apurimac Region”, will be established in paragraph a) of Article 2 of Legislative Decree No. 674; and the Agreement that approved the Promotion Plan of the Project.
|
1.14.
|
Under PROINVERSION Agreement No. 622-4-2014-CPC, dated August 27
th
, 2014 the Steering Council of PROINVERSION agreed to approve the Terms and Conditions of the Tender of the private investment promotion process for the implementation of the project: "Installation of Broadband for Comprehensive Connectivity and Social Development of the Apurimac Region”.
|
1.15.
|
Under the Agreement of the PROINVERSION Energy and Hydrocarbons Committee - PRO CONNECTIVITY Committee, No. 233-3-2014-Telecommunications, dated December 1, 2014, the Consolidated Text of the tender process Terms and conditions was approved for the process of promotion of private investment for the execution of the project: " Installation of Broadband for Comprehensive Connectivity and Social Development of the Apurimac Region " which incorporated the amendments to these rules which to date have been submitted to Bidders.
|
1.16.
|
Under the Agreement Proinversion No. 658-3-2015-CPC dated January 20
th
, 2015 the PROINVERSION Board agreed to approve the final version of the financing contract for the process of promotion of private investment for the execution of the project: “Installation of Broadband for Comprehensive Connectivity and Social Development of the Apurimac Region ".
|
1.17.
|
By Resolutions of the Board of OSIPTEL No. 003-2015-CD / OSIPTEL and 004-2015-CD / OSIPTEL published with date January 11, 2015, the top rates of transport services and internet access were established respectively, corresponding to regional projects Fiber Optic backbone network
|
2.1
|
MINUTES OF AWARD OF THE NETWORK ACCESS ASSETS: It is the document prepared by FITEL whereby the CONTRACTOR transfers ownership of NETWORK ACCESS ASSETS to FITEL, AT THE END OF FINANCING AGREEMENT or when any assumption of Section Nineteenth occurs.
|
2.2
|
MINUTES OF AWARD OF TRANSPORTATION NETWORK ASSETS: The document through which the CONTRACTOR transfers to MTC, the ownership and control of the TRANSPORT NETWORK ASSETS, once the Concession Agreement has been signed between the MTC and the Concessionaire for the operation of the TRANSPORTATION NETWORK or when any of the assumptions of the nineteenth Clause of the FINANCING AGREEMENT occur. This act will be subscribed between the CONTRACTOR and FITEL who will subscribe it in representation of MTC
|
2.3
|
MINUTES OF CONFORMITY OF FACILITIES AND TESTING OF SERVICES OF ACCESS NETWORK: It is the document signed by the CONTRACTOR and FITEL by which the former accepts the results reported in the ACCESS NETWORK SUPERVISION REPORT corresponding to the installations performed. Also, with the signing of this document, compliance with the conditions laid down in the TECHNICAL SPECIFICATIONS, corresponding to the ACCESS NETWORK are certified. The model of the minutes is shown in Exhibit No. 4 ,annex 8B of the Terms and conditions and may be amended, being FITEL who finally determines its final content.
|
2.4.
|
MINUTES OF CONFORMITY OF THE INSTALLATION AND TESTING OF SERVICES OF THE TRANSPORTATION NETWORK: The document prepared by FITEL and signed by the CONTRACTOR and FITEL by which the former accepts the results stated in the TRANSPORTATION NETWORK SUPERVISION REPORT corresponding to the installations made. This document also certifies compliance with the conditions laid down in the TECHNICAL SPECIFICATIONS for total TRANSPORTATION NETWORK. The model of the minutes shown in Exhibit No. 5 of the Annex 8A of the terms and conditions and may be modified, being FITEL who finally determines its final content.
|
2.5.
|
INSTALLATION MINUTES OF NETWORK ACCESS: Is the document that indicates and credits compliance with the installation and operation of any infrastructure, equipment, hardware, software and other information needed to provide access to Internet and Intranet access offered by the ACCESS NETWORK. It is prepared by the CONTRACTOR, approved by FITEL, and signed by both. It is also an Affidavit.
|
2.6.
|
INSTALLATION MINUTES OF TRANSPORTATION NETWORK: Is the document that credits and indicates the compliance with the installation and operation of the major components of the TRANSPORTATION NETWORK. It is made by the CONTRACTOR for each node as well as for the Network Operations Center (NOC) and MAINTENANCE CENTER. The INSTALLATION MINUTES OF TRANSPORTATION NETWORK are signed by the CONTRACTOR and FITEL. It is also an Affidavit.
|
2.7.
|
EXPANSION OF THE AWARDED PROJECT: Is the incorporation of new BENEFICIARY LOCALITIES and/or district capitals, in the area of
influence of the project, which will involve additional subsidy of up to 20% of the FINANCING AWARDED, prior technical appraisal and approval of FITEL. Regarding the ACCESS NETWORK, this extension may be requested by any of the PARTIES within the ACCESS NETWORK INVESTMENT STAGE and regarding the TRANSPORTATION NETWORK within the first six (6) moths of the TRANSPORTATION NETWORK INVESTMENT STAGE.
|
2.8.
|
ACCESS NETWORK ASSETS: These are the assets comprised of metal structures, self-supporting towers, bases foundation, the lot where those structures are placed and all passive elements which make up the NETWORK ACCESS and will be owned and domain of FITEL after the signing of MINUTES OF AWARD OF NETWORK ACCESS ASSETS. The active equipment is owned and domain of the CONTRACTOR.
|
2.9.
|
TRANSPORTATION NETWORK ASSETS: Means all real or personal property that integrates the TRANSPORTATION NETWORK, according to the provisions of the TECHNICAL SPECIFICATIONS of the TRANSPORT NETWORK. These assets will be owned by MTC after the signing of MINUTES OF AWARD OF THE TRANSPORTATION NETWORK ASSETS between the CONTRACTOR and FITEL, who will subscribe the act representing the MTC.
|
2.10.
|
CLOSURE OF THE FINANCING AGREEMENT: It’s the process by which the PARTIES agree the completion of their contractual rights and obligations. This procedure will take place during the second half of OPERATION PERIOD; as such, it will be understood as a stage within this period.
|
2.11.
|
FINANCING AGREEMENT: It is the legal relationship held between FITEL and the CONTRACTOR, whose purpose is to regulate:
|
|
a)
|
The installation of the TRANSPORTATION NETWORK and ACCESS NETWORK according to what is stated in the relevant TECHNICAL SPECIFICATIONS;
|
|
b)
|
The operation and maintenance of the ACCESS NETWORK according to what is stated in the TECHNICAL SPECIFICATIONS;
|
|
c)
|
The implementation of CAPACITY BUILDING; and
|
|
d)
|
The use of the AWARDED FUNDING for implementing the Awarded Project.
|
|
e)
|
The disbursement of the AWARDED FUNDING to the CONTRACTOR by- FITEL
|
2.12.
|
DAYS: It should be understood as calendar days (working days, non-working and holidays), unless expressly stipulated otherwise.
|
2.13.
|
WORKING DAYS: It should be understood to days other than Saturday, Sunday or nonworking holiday in the city of Lima (including non-working days for the public administration). Also understood as holidays, those calendar day on which banks in the city of Lima, are not obliged to serve the public by order of governmental authority; and holidays established by the competent authority of the Apurimac Region.
|
2.14.
|
The CONTRACTOR: Is the legal entity awarded the tender with whom FITEL signs this FINANCING AGREEMENT and who will implement the AWARDED PROJECT.
|
2.15.
|
INSTALLATION STAGE: The time in which the CONTRACTOR displays the infrastructure, equipment and other items in the ACCESS NETWORK and TRANSPORTATION NETWORK fulfilling the provisions of the TECHNICAL SPECIFICATIONS. The deadline for completion of this stage is the indicated in the Technical Proposal, which shall not be less than 10 months nor more than 12 months since the DATE OF CLOSURE.
|
2.16.
|
DATE OF CLOSURE: The date, place and time to be carried out the acts set forth in Paragraph 11.3 of the TERMS AND CONDITIONS.
|
2.17.
|
FINANCING AWARDED: Is the amount of the FINANCING granted for the TRANSPORTATION NETWORK and ACCESS NETWORK that corresponds to the the AWARDED PROJECT, as provided in the Technical Proposal in accordance with the TECHNICAL SPECIFICATIONS. This includes all applicable taxes and contributions to the MTC, FITEL and OSIPTEL. (which are established in the TUO of the Telecommunications Act approved by Supreme Decree No. 013-93-TCC, in the TUO of the General Regulation of the Telecommunications Act, approved by Supreme Decree No. 020-2007-MTC and its amendments, such as fee for commercial exploitation of service and contribution to FITEL, as well as the contribution by regulation to OSIPTEL established by Law No. 27332 in accordance with Supreme Decree No. 103-2003-PCM and Supreme Decree No. 012-2002-PCM, as amended, or the rules that substitute.
|
2.18.
|
ACCESS NETWORK FINANCING: Is the non-refundable amount recorded in the ECONOMIC PROPOSAL expressed in US$ and which FITEL must deliver to the CONTRACTOR as part of its obligations as stipulated in the FINANCING AGREEMENT. This includes the necessary financing for the CONTRACTOR to acquire, install, operate and maintain and run the THE ACCESS NETWORK and implements the CAPACITY BUILDING, providing all the services involved in the Technical Proposal in accordance with the TECHNICAL SPECIFICATIONS. This includes all applicable taxes and contributions to the MTC, OSIPTEL and FITEL. (which are established in the TUO of the Telecommunications Act approved by Supreme Decree No. 013-93-TCC, in the TUO of the General Regulation of the Telecommunications Act, approved by Supreme Decree No. 020-2007-MTC and its amendments, such as fee for commercial exploitation of service and contribution to FITEL, as well as the contribution by regulation to OSIPTEL established by Law No. 27332 in accordance with Supreme Decree No. 103-2003-PCM and Supreme Decree No. 012-2002-PCM, as amended, or the rules that substitute)
|
2.19.
|
FINANCING OF THE TRANSPORTATION NETWORK: Is the non-refundable amount recorded in the ECONOMIC PROPOSAL expressed in US$ and which FITEL shall deliver to the CONTRACTOR as part of its obligations as stipulated in the FINANCING AGREEMENT. Includes the necessary financing for the CONTRACTOR to purchase and install the TRANSPORTATION NETWORK in line with the TECHNICAL SPECIFICATIONS. This includes all taxes.
|
2.20.
|
ADVANCE PAYMENT GUARANTEE: The joint and several, unconditional, irrevocable letter of guarantee, without benefit of excussionnn or division, and automatic enforceable on behalf of FITEL, that the CONTRACTOR shall deliver on the CLOSING DATE to ensure the correct use of first disbursement of the FINANCING OF THE ACCESS NETWORK and the TRANSPORT NETWORK in accordance with the provisions of this FINANCING AGREEMENT. It must be issued in accordance with the conditions established in the TERMS AND CONDITIONS.
|
2.21.
|
PERFORMANCE BOND OF THE FINANCING AGREEMENT: Is the joint and several, unconditional, irrevocable letter of guarantee, without benefit of excussio or division, and of automatic enforceable on behalf of FITEL, that the CONTRACTOR shall deliver at the CLOSING DATE, in order to support the compliance with obligations under the FINANCING AGREEMENT. It must be issued in accordance with the conditions established in the TERMS AND CONDITIONS.
|
2.22.
|
MANDATORY PAID INSTITUTION: Is the public institution referred to in Exhibit 8B of the TERMS AND CONDITIONS, in which the CONTRACTOR undertakes to install the necessary equipment and provide services of the AWARDED PROJECT during the term of the FINANCING AGREEMENT.
|
2.23.
|
APPLICABLE LAW: These are the standards listed in Paragraph 1.4. of the TERMS AND CONDITIONS, including its amendments, and any other according to the Peruvian laws applicable.
|
2.24.
|
BENEFICIARY LOCALITIES: are the locations where the CONTRACTOR, according to the terms of this FINANCING AGREEMENT, must install, operate and maintain the services offered in AWARDED PROJECT. These areas are included in the list contained in Exhibit 1 of this FINANCING AGREEMENT. The ADDIOTIONAL BENEFICIARY LOCALITIES offered by the CONTRACTOR become BENEFICIARY LOCALITIES from the moment of the signing of the FINANCING CONTRACT.
|
2.25.
|
MTC: Is the Ministry of Transportation and Communications.
|
2.26.
|
APPLICABLE REGULATIONS: These are the APPLICABLE LAWS and any other that, under the law, is applicable to the performance of the FINANCING AGREEMENT, including standards of quality and continuity of services and the tax regime applicable to taxpayers in the country and taxpayers of local and regional governments in the country that is not governed by FINANCING AGREEMENT.
|
2.27.
|
PARTY: FITEL or the CONTRACTOR, as applicable.
|
2.28.
|
PARTIES: FITEL and the CONTRACTOR equally.
|
2.29.
|
INVESTMENT PERIOD OF THE ACCESS NETWORK: It is the period, the maximum length is fourteen (14) months from the CLOSING DATE, comprising the activities referred to in INSTALLATION STAGE and supervision activities to approve the installations made, referred to in the TECHNICAL SPECIFICATIONS OF THE ACCESS NETWORK; finishing with the signing of the MINUTES OF CONFORMITY OF FACILITIES AND TESTING OF SERVICES OF THEACCESS NETWORK.
|
2.30.
|
INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK: is the period, which maximum length is fourteen (14) months from the CLOSING DATE, comprising the activities covered by the INSTALLATION STAGE and monitoring activities to give according to installations made as referred to in the TECHNICAL SPECIFICATIONS OF THE TRANSPORTATION NETWORK; culminating with the signing of the MINUTES OF CONFORMITY OF FACILITIES AND TESTING OF SERVICES OF THE TRANSPORTATION NETWORK.
|
2.31.
|
PERIOD OF OPERATION: The duration of one hundred twenty (120) months from the day following the completion of the ACCESS NETWORK NVESTMENT PERIOD. In which the CONTRACTOR will operate and maintain the ACCESS NETWORK to ensure its operation and provision of services comprising the AWARDED PROJECT. In this period of time,the services will be provided commercially.
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2.32.
|
TRIAL PERIOD: The time when THE CONTRACTOR will operate and maintain, if applicable, the TRANSPORTATION NETWORK for the exclusive use of the AWARDED PROJECT and allow the operation of the ACCESS NETWORK. This period shall not exceed twelve (12) months, which start from the day following the completion of the TRANSPORTATION NETWORK INVESTMENT PERIOD, culminating with the signing of MINUTES OF AWARD OF THE TRANSPORTATION NETWORK ASSETS.
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2.33.
|
PROINVERSIÓN: Private Investment Promotion Agency, an organization referred to in Law No. 28660 and the Ministerial Resolution No. 083-2013-EF/10 or regulations that substitute them.
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2.34.
|
AWARDED PROJECT: Is the PROPOSAL of the QUALIFIED BIDDER declared the winner of the Award by the COMMITTEE
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2.35.
|
ACCESS NETWORK: The telecommunications network implemented according to the criteria in the appropriate TECHNICAL SPECIFICATIONS, which allows the end user to access the public telecommunications services and access to intranet of the AWARDED PROJECT, using the TRANSPORTATION NETWORK.
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2.36.
|
TRANSPORTATION NETWORK: This is the high-speed network of availability and reliability, designed based on the laying of fiber optic redundancy scheme and points of presence in the district capitals, as provided in Section 7.4 of Article 7 of law No. 29904. This will be deployed by the CONTRACTOR in the BENEFICIARY LOCATIONS.
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2.37.
|
UIT: It is the Tax Unit
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3.1.
|
The CONTRACTOR states that is a legal entity duly incorporated under the regulations of the Republic of Peru, having proved its existence and its representation according to law and is duly authorized and able to assume the obligations under the FINANCING AGREEMENT to exercise technical, commercial and financial activities, in the implementation of the AWARDED PROJECT.
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3.2.
|
The CONTRACTOR acknowledges and agrees that it is the decisive reason of FITEL for the celebration of the FINANCING AGREEMENT that, in the terms stipulated therein, in their Technical Proposal and in the TECHNICAL SPECIFICATIONS, the CONTRACTOR must perform the design, procurement and installation of networks, equipment and access services to the Internet and Intranet, to implement CAPACITY BUILDING, and keep them in operational terms, performing the corresponding preventive, predictive and corrective maintenance, so that the Peruvian State has the deployed optical fiber in the case of TRANSPORTATION NETWORK and that the BENEFICIARY LOCATIONS and MANDATORY PAID INSTITUTIONS have the infrastructure and equipment properly installed and fully operational in the case of ACCESS NETWORK.
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3.3.
|
The CONTRACTOR has the authorization certificates that allow it to provide the services to which it is bound according to the TECHNICAL SPECIFICATIONS.
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3.4.
|
The CONTRACTOR is committed to install the networks OF THE AWARDED CONTRACT and provide the services in the quality conditions established in the TECHNICAL SPECIFICATIONS.
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3.5.
|
The CONTRACTOR states that its representative, who signs the FINANCING AGREEMENT, is duly authorized, that its subscription has been authorized by its Board of Directors (or the highest authority of the company) and, with his signature, requires no further action or approval to ensure their validity and to comply with the obligations in the same.
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3.6.
|
The CONTRACTOR states that for the subscription of the FINANCING AGREEMENT and compliance with contractual obligations, it does not require legal authorization or regulatory authority of any foreign country in which any of its shareholders is incorporated or has its principal place of business and which is not contrary to any law or regulation in such country.
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3.7.
|
The CONTRACTOR states that to fulfill the FINANCING AGREEMENT there are no:
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|
•
|
Laws, statutes, regulations, rules, orders, judgments, awards, resolutions, administrative sanctions or restrictions by any authority, provisions in the statutes or regulations of the CONTRACTOR, covenants, contracts, agreements or other acts or events of any nature that are binding on the CONTRACTOR or affecting its affiliates or subsidiaries or their property or prohibit, restrict, limit, oppose, affect, impair, or in any way impede the execution and performance of the terms and conditions of the FINANCING AGREEMENT.
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|
•
|
Neither actions, suits, investigations, litigation or proceedings pending or threatened before courts, arbitral court or governmental authority; that prohibit, restrict, limit, oppose, affect, impair, or in any way prevent the execution and performance of the terms and conditions of the FINANCING AGREEMENT.
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3.8.
|
The CONTRACTOR acknowledges and agrees that the nature and regime of the FINANCING AGREEMENT determines that, although during their term changes in the APPLICABLE REGULATIONS occur, including changes in the regulation of the telecommunications sector and the tax regime affecting its business and/or economic performance, such circumstances do not give you the right to claim or requests for modifications to the FINANCING AGREEMENT under the assumptions of economic-financial hardship or other provision of legal concepts of a similar nature, either before the FITEL, its officers or other State agency.
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3.9.
|
The CONTRACTOR recognizes that directly or indirectly has the economic, financial and technical capacity to perform the obligations under the FINANCING AGREEMENT and other obligations under the TECHNICAL SPECIFICATIONS and those obligations arising from the PROPOSAL under which was declared AWARDEE of the PROJECT INSTALLATION OF BROADBAND FOR COMPREHENSIVE CONNECTIVITY AND SOCIAL DEVELOPMENT OF THE AYACUCHO REGION”
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3.10.
|
The CONTRACTOR states having no impediment to contract pursuant to Article 1366º regulated by the Civil Code and that is not administratively sanctioned with temporary or permanent disqualification from exercising their rights to contract with the State.
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3.11.
|
In the event that, after the signing of the FINANCING AGREEMENT, false statements in the preceding paragraphs are established, it will be terminated automatically, by operation of law, applying the provisions of the nineteenth Clause, proceeding FITEL to enforce the guarantees to be granted under this FINANCING AGREEMENT.
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3.12.
|
The CONTRACTOR agrees to transfer ownership and control of the TRANSPORTATION NETWORK ASSETS on behalf of the MTC, with the signing of MINUTES OF AWARD OF THE TRANSPORTATION NETWORK ASSETS. This act will be subscribed between THE CONTRACTOR and FITEL, who will subscribe it representing MTC.
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3.13.
|
The CONTRACTOR is obliged to transfer the ownership and control of the ACCESS NETWORK ASSETS in favor of the FITEL with the signing of the MINUTES OF AWARD OF THE NETWORK ACCESS ASSETS.
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3.14.
|
The costs generated until the date the transfer mentioned in the preceding paragraph and the corresponding ones made until the date of the TRASPORTATION NETWORK become effective shall be borne by the CONTRACTOR. Costs incurred from the day after the transfer has become effective shall be borne by the owner hired over the operation of the ACCESS NETWORK.
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3.15.
|
The necessary administrative expenses for the transfer shall be borne by THE CONTRACTOR.
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3.16.
|
The CONTRACTOR states that it has conducted its own studies, research, projections and therefore is considered knowledgeable of all the elements needed to make the decision to assume fully its obligations under the FINANCING AGREEMENT.
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3.17.
|
The CONTRACTOR acknowledges the areas where the networks will be installed, so it expressly disclaims making any claim or action against FITEL or other competent authority derived from inadequate site conditions or any other circumstances related the subject matter of this FINANCING AGREEMENT.
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3.18.
|
The CONTRACTOR admits it has developed its business plan taking into account the studies and assumptions it deemed appropriate, according to which it has prepared his TECHNICAL and ECONOMIC PROPOSAL and required the FUNDING AWARDED. It also states that the business plan has not been known by FITEL or PROINVERSIÓN, which shall have no responsibility for any difference between it and the actual results of the implementation of the AWARDED PROJECT. In that sense, the CONTRACTOR declares that it assumes the risk arising from the differences between its business plan and actual results of the implementation of the AWARDED PROJECT.
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3.19.
|
The CONTRACTOR acknowledges and agrees that the total amount of the FINANCING AWARDED, is sufficient to fulfill the obligations of the FINANCIAL AGREEMENT and those derived from the PROPOSAL due to which it became the AWARDEE of the PROJECT “Installation of Broadband for Comprehensive Connectivity and Social Development of the Apurimac Region "
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3.20.
|
The CONTRACTOR, by this statement and only in the case of ACCESS NETWORK, undertakes to continue the operation and maintenance of the AWARDED PROJECT in all cases of termination of the FINANCING AGREEMENT under the terms stated in Clauses of the FINANCING AGREEMENT; this statement constitutes a unilateral promise referred to under Article 1956 of the Peruvian Civil Code.
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3.21.
|
The CONTRACTOR acknowledges and agrees that FITEL has taken note of the statement referred to in the preceding paragraph and that the signing of this FINANCING AGREEMENT is not only an express consent but a prior agreement to the second paragraph of Article 1956 and Article 1957 of the Civil Code, respectively, so that said unilateral promise has been validly made
and is fully enforceable.
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3.22.
|
The CONTRACTOR states that the CLOSING DATE, its capital stock is the one established in the TERMS AND CONDITIONS. and, on that date, has fully subscribed the total of shares forming its share capital, having paid at least 25% of the nominal value of the shares, as applicable, in accordance with Article 52 of the General Law Corporations, Law N ° 26887
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3.23.
|
The CONTRACTOR acknowledges and agrees that the operation of the TRANSPORT NETWORK during the TRIAL PERIOD is temporary and provisional; being restricted to use the TRANSPORTATION NETWORK to provide value added public telecommunications service.
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4.1.
|
The signing of the FINANCING AGREEMENT and compliance with the obligations and rights of FITEL in it shall conform to the APPLICABLE RULES and regulations governing its operation and in general, the legal system of Peru.
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4.2.
|
FITEL states that to the subscription of the FINANCING AGREEMENT has the knowledge and authorization of its governing bodies and that its legal representative has sufficient skills and powers to celebrate it, so as to generate obligations and valid, binding and enforceable rights for both parties
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4.3.
|
FITEL states that the AWARDED FUNDING and, if applicable, the EXTENSION of the AWARDED PROJECT is duly authorized and has sufficient economic resources for disbursements agreed in the FINANCING AGREEMENT.
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4.4.
|
FITEL states to have the skills, legal and operational instruments for making the necessary supervision and that, as long as the CONTRACTOR fulfill its obligations, shall authorize and make disbursements under the FINANCING AGREEMENT.
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4.5.
|
The supervision corresponding to the OPERATION PERIOD of the ACCESS NETWORK shall be made solely for one hundred twenty (120) months. After this deadline, the legal regime for supervision will be established in the Concession Agreement of the CONTRACTOR, according to APPLICABLE RULES.
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4.6.
|
FITEL acknowledges and accepts that it has become aware of the statement of THE CONTRACTOR referred to in paragraph 3.20 of the Third Clause and the signing of this FINANCING AGREEMENT is not only express but also prior agreement referred to the second paragraph of Article 1956 and Article 1957 of the Civil Code, respectively, so that unilateral promise has been validly made
and is fully enforceable.
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|
a)
|
The installation of the TRANSPORTATION NETWORK and ACCESS NETWORK according to what is stated in the TECHNICAL SPECIFICATIONS;
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|
b)
|
The operation and maintenance of the ACCESS NETWORK according to what is stated in the TECHNICAL SPECIFICATIONS, providing access to the Internet and intranet to the BENEFICIARY LOCALITIES and MANDATORY PAID INSTITUTIONS contained in Exhibit No. 1 of this FINANCING AGREEMENT,;
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|
c)
|
The implementation of CAPACITY BUILDING; defined as such in paragraph 1.3.11 of the TERMS AND CONDITIONS
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|
d)
|
The use of FUNDING AWARDED for implementing the Project.
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6.1.
|
The FINANCING AGREEMENT shall remain in force equal to the sum of the INVESTMENT PERIOD OF THE ACCESS NETWORK, INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK and the OPERATION PERIOD until the completion of the last disbursement; unless earlier terminated in response to the cases provided for in this FINANCING AGREEMENT.
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6.2.
|
The INVESTMENT PERIOD shall not exceed fourteen (14) months from the day after the CLOSING DATE. However, it may be extended upon approval of FITEL and formalized by addendum to this FINANCING AGREEMENT.
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6.3.
|
The OPERATION PERIOD shall not be less than one hundred twenty (120) months from the day following the completion of the INVESTMENT PERIOD.
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6.4.
|
The term of the FINANCING AGREEMENT may be extended provided there is proper justification and for the enforcement of the purposes stated in the fifth clause of this contract by addendum signed by FITEL and the CONTRACTOR.
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6.5.
|
The PARTIES shall comply with the applicable procedure to the stage of CLOSURE of the FINANCING AGREEMENT.
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6.6.
|
At the end of the term of the FINANCING AGREEMENT, by the conclusion of the deadline stated in paragraphs 6.2 and 6.3 of this Clause, the CONTRACTOR shall continue the obligations of a telecommunications operator stipulated in their respective concession contracts, which are signed with the Ministry of Transportation and Communications, and/or any holder of a registration or authorization for the provision of value added services.
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7.1.
|
To use the AWARDED FUNDING for the design, construction and installation of the TRANSPORTATION NETWORK; well as for the design, equipment procurement, transportation, installation, commissioning, operation and maintenance of the ACCESS NETWORK that will allow to provide Internet and Intranet access services in the BENEFICIARY LOCALITIES and MANDATORY PAID INSTITUTIONS contained Exhibit No. 1 of the FINANCING AGREEMENT, and to the implementation of capacity building activities, fulfilling the conditions laid down in the TECHNICAL SPECIFICATIONS, the content of the AWARDED PROJECT and all commitments by the CONTRACTOR in its TECHNICAL PROPOSAL included in Exhibit No. 2 FINANCING AGREEMENT.
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7.2.
|
To meet the deadlines and targets set out in the FINAL SCHEDULE OF ACTIVITIES of the CONTRACTOR, provided in Exhibit No. 3 FINANCING AGREEMENT, except in cases of extensions determined in accordance with this FINANCING AGREEMENT.
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7.3.
|
Comply with the obligations in the TECHNICAL SPECIFICATIONS and appendices.
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7.4
|
To comply with the commitments made in its TECHNICAL PROPOSAL, Exhibit No. 2 of the FINANCING AGREEMENT.
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7.5
|
Repair of damage because of the material and/or equipment that will serve to implement the AWARDED PROJECT contained in the Technical Proposal, as well as their replacement, if applicable, will be the responsibility of the CONTRACTOR without requiring any further disbursement by FITEL. This obligation shall apply during the term of FINANCING AGREEMENT and, if applicable, its extensions.
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7.6.
|
Responsibility for repairing any damage caused in the BENEFICIARY LOCALITIES and MANDATORY PAID INSTITUTIONS arising from the direct activities of the CONTRACTOR and/or third parties engaged by it for the execution of the AWARDED PROJECT, whether public roads, highways, bridges, public and private premises and others are affected during the transportation, installation, operation and maintenance of the ACCESS NETWORK and the installation of the TRANSPORTATION NETWORK. In that sense, the CONTRACTOR shall indemnify FITEL and MTC, if applicable; and be accountable for any act or omission, willful, negligent or without fault, the staff involving damage to the latter; including those acts or omissions made by the staff of its contractors.
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7.7.
|
To give training courses in Peru and in the country of production of the main transmission equipment and infrastructure (optical fiber) used in the ACCESS NETWORK and TRANSPORTATION NETWORK, respectively.
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7.8.
|
Provide all facilities for FITEL, or its designee, fulfill its duties and obligations under the AWARDED PROJECT.
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7.9.
|
Provide all information related to the AWARDED PROJECT required by FITEL, or its designee, to fulfill its duties, for which a term will be provided for the CONTRACTOR to comply with it.
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7.10.
|
To submit the FINAL SCHEDULE OF ACTIVITIES OF THE ACCESS NETWORK and FINAL SCHEDULE OF ACTIVITIES OF THE TRANSPORTATION NETWORK within the period specified in the TECHNICAL SPECIFICATIONS for both networks.
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7.11.
|
Whenever the CONTRACTOR carries out promotional activities and advertising of the AWARDED PROJECT, it must refer to the Peruvian State represented by FITEL and the MTC during the term of the FINANCING AGREEMENT.
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7.12.
|
To manage, obtain before administrative authorities, municipal or otherand maintain current licenses, permits, registrations and other authorizations required for the deployment of infrastructure and for the provision of Internet service and intranet access offered in the AWARDED PROJECT. In this regard, it is expressly stated that cooperation by the FITEL indicated in Paragraph 8.3 of the Financing Agreement is only of means and not results of, so the CONTRACTOR cannot claim the unsuccessful outcome of this cooperation as grounds that waives it from the breach of the obligations contained in the FINANCING AGREEMENT.
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7.13.
|
Comply with all APPLICABLE RULES and LAWS for the execution of the FINANCING AGREEMENT.
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7.14.
|
To fulfill its obligations under the concession contract signed with the MTC
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7.15.
|
To meet the payment of its contributions to the special right to FITEL under Article 12° of the TUO of the Telecommunications Law approved by the Supreme Decree No. 013-93-TCC, as amended.
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7.16.
|
In the case of ACCESS NETWORK, THE CONTRACTOR undertakes to meet the demand of the towns of Apurimac region, where the coverage of this network allows the provision of services under the AWARDED PROJECT. This obligation will be performed under the same conditions in AWARDED PROJECT, without incurring additional financing.
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7.17.
|
To submit for the satisfaction of FITEL, disaggregated information of investment costs for the ACCESS NETWORK and TRANSPORTATION NETWORK duly accredited as stated in Exhibit Nº11 of this agreement within the first half of the PERIOD OF OPERATION. This information will have no implications on the FUNDING AWARDED.
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7.18.
|
To submit to FITEL semiannually the operating cash flow of the AWARDED PROJECT during the term of the FINANCING AGREEMENT. The delivery of this information does not alter the amount of FINANCING AWARDED. Additionally, FITEL may request the accreditation of the operating cash flow.
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7.19.
|
To allow FITEL to verify the destination and use of the FUNDING AWARDED during the term of the FINANCING AGREEMENT.
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7.20.
|
To keep up to the CLOSING DATE, fully subscribed the total of shares making up the share capital and paid at least 25% of the nominal value of the shares, as applicable, in accordance with the provisions of Article 52 ° of the General Corporation Law, Law No. 26887.
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7.21.
|
It will be responsible for contracting and retaining existing insurance policies in force on ASSETS and elements of the ACCESS NETWORK and TRANSPORTATION NETOWRK assuming the costs of each and every one of the deductibles and / or coinsurance that it engaged in insurance policies purchased in fulfilling this obligation.
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7.22.
|
It shall not be relieved of the obligation to comply with the installation of networks claiming defects, errors or omissions in the TECHNICAL SPECIFICATIONS
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7.23.
|
Respect the right of patent, design and/or copyright protected in the country of manufacture of the elements for the ACCESS NETWORK and TRANSPORTATION NETWORK.
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7.24.
|
The CONTRACTOR assumes responsibility for the acts, failures, omissions, or in general, any breach incurred by manufacturers or other subcontractors employed by it who may be involved in the execution of the FINANCING AGREEMENT.
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7.25.
|
Subscribe for the duration of the FINANCING AGREEMENT, contract models set out in Appendix No. 5-A and 5-B of Exhibit 8B of the TERMS AND CONDITIONS.
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7.26.
|
To assume for the duration of FINANCING AGREEMENT and even during additional period referred to in Paragraph 20.3 of the FINANCING AGREEMENT, the liability to FITEL of maintaining the operability and functionality of all ASSETS and elements of the ACCESS NETWORK so that the quality and conditions stated in its Technical Proposal and in the TECHNICAL SPECIFICATIONS are guaranteed for the provision of public telecommunications services and ensure access to Intranet.
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7.27.
|
During the term of the FINANCING AGREEMENT and even during additional period referred to in Paragraph 20.3 of the FINANCING AGREEMENT, the CONTRACTOR is required to perform corrective maintenance activities, predictive and preventive ASSETS and elements of the ACCESS NETWORK. This includes the obligation to make the replacement, renewal, rehabilitation and / or adaptations made
to ASSETS and items included in the networks; without that requirement implies the right to require FITEL additional resources to FUNDING AWARDED.
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7.28.
|
It is responsible to FITEL, and third parties, as appropriate, for the proper management and use of ASSETS and elements of the ACCESS NETWORK, and the inherent risk to them.
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7.29.
|
From the CLOSING DATE and until the transfer of ACCESS NETWORK assets on behalf of FITEL is made stated in this contract, the CONTRACTOR will be solely responsible and liable to pay taxes, fees and contributions that apply in relation to ASSETS and elements of the ACCESS NETWORK in accordance with applicable rules, considering among these regulations the provisions of the Consolidated Text of the Municipal Taxation Law, approved by Supreme Decree No. 156- EF-2004 or its amendment. In the case of TRANSPORT NETWORK, this obligation of THE CONTRACTOR is maintained until its transference to the MTC, in accordance with the provisions of this FINANCING CONTRACT.
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7.30.
|
To ensure that the ACCESS NETWORK and TRANSPORTATION NETWORK ASSETS are only subject to the provision of the services referred to in AWARDED PROJECT. Consequently, they cannot be transferred, or in general subject to liens or encumbrances of any kind.
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7.31.
|
Transferring ownership in favor of FITEL, of the ACCESS NETWORK ASSETS according to the conditions of this contract and in paragraph D of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK contained in Exhibit 8-B of the TERMS AND CONDITIONS.
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7.32.
|
Temporarily and tentative operate the TRANSPORTATIONNETWORK during the TRIAL PERIOD until the subscription of the MINUTES OF AWARD OF TRANSPORTATION NETWORK ASSETS under the conditions of this contract.
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7.33.
|
Transfer in favor of MTC the property and domain of the TRANSPORTATION NETWORK, under the conditions of this AGREEMENT
|
7.34.
|
To assume custody and responsibility for the integrity and legal physical sanitation of the TRANSPORTATION NETWORK until the delivery thereof to the concessionaire in charge of the operation of the TRANSPORTATION NETWORK to be selected in the private investment promotion process of PROINVERSIÓN.
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7.35.
|
To maintain the insurance policy of the TRANSPORTATION NETWORK ASSETS in force until the delivery of the same to the concessionaire in charge of the operation assuming the costs of each and every one of the deductibles and / or coinsurance that engaged in insurance policies purchased in fulfilling this obligation.
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7.36.
|
To negotiate and subscribe infrastructure share-use agreements with, electricity, hydrocarbons or railway companies as well as to obtain permits, rights of way, step and use poles necessary to install the necessary infrastructure and for the deployment of the ACCESS NETWORK and TRANSPORTATION NETWORK; as well as, to establish agreements for the use of existing pipelines and install new pipelines were deemed necessary.
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7.37.
|
Without prejudice to the provisions in the APPLICABLE LAWS and REGULATIONS, the CONTRACTOR shall provide to the MTC, FITELand operation concessionaire of the TRANSPORTATION NETWORK all facilities they require in order to facilitate the procurement and commissioning of AWARDED PROJECT.
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7.38.
|
To fulfill all other obligations under the FINANCING AGREEMENT, it’s Exhibits and the TECHNICAL SPECIFICATIONS in CIRCULARS and the TERMS AND CONDITIONS.
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8.1.
|
To disburse the FUNDING AWARDED to the CONTRACTOR when it has fulfilled the obligations and provisions required in the FINANCING AGREEMENT. Disbursements will be made in accordance with the conditions set out in Clause fourteenth of the FINANCING AGREEMENT.
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8.2.
|
To exercise, directly or through a third natural or artificial, public or private person, shares of supervision, monitoring and control of facilities and test infrastructure, equipment and services under the FINANCING AGREEMENT.
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8.3.
|
FITEL shall cooperate with the CONTRACTOR for the proper performance of the FINANCING AGREEMENT. To this end, FITEL, where warranted, will use its best efforts to coordinate with the relevant authorities, issuing licenses, permits and other managed by THE CONTRACTOR and that are required for execution of the FINANCING AGREEMENT.
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8.4.
|
To ensure proper use of the FUNDING AWARDED and compliance with the terms of the FINANCING AGREEMENT.
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8.5.
|
To make written submissions on the matters covered by the FINANCING AGREEMENT, within the time stated therein, as well as other applications, to be within the scope of powers of the CONTRACTOR in writing.
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8.6.
|
To assume the costs of maintaining the TRANSPORTATION NETWORK until delivery thereof to the operation concessionaire.
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8.7.
|
Cooperate when the CONTACTOR demands it in writing, in the negotiation of sharing infrastructure agreements with concessionaires or other public or private entities that apply to other sectors (such as energy, oil, road infrastructure, etc.) required to install poles and infrastructure according to DESIGN of the TRANSPORT NETWORK outlined in the TECHNICAL SPECIFICATIONS. To this end, the FITEL, where warranted, will do their best without the cooperation of FITEL replace the obligation to THE HIRED to manage and sign such agreements as provided in Paragraph 7.36 of the seventh clause of this contract.
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8.8.
|
Other obligations under the FINANCING AGREEMENT, its Exhibits and the TECHNICAL SPECIFICATIONS in the CIRCULAR and the TERMS AND CONDITIONS.
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9.1.
|
To receive, use and dispose of the FUNDING AWARDED, according to the FINAL SCHEDULE OF ACTIVITIES and conditions provided in the FINANCING AGREEMENT.
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9.2.
|
To propose to FITEL the replacement of BENEFICIARY LOCALITIES and/or Mandatory Paid Institutions, according Exhibit 12 of this contract.
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9.3.
|
It may provide, at its cost, risk and expense, and will not involve additional funding from FITEL, other additional telecommunications services to those agreed in the FINANCING AGREEMENT, provided they do not degrade the quality and continuity under the AWARDED PROJECT, communicating conditions to provide these additional services. These services will be provided prior authorization of FITEL within a period not exceeding thirty (30) working days from the day of filing.
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|
Under this assumption the CONTRACTOR is free to use the infrastructure and services in order to provide them in different locations than those agreed, provided that the installation, operation and maintenance thereof is paid by, cost and risk of the CONTRACTOR, and without additional funding from FITEL, without degrading the quality and continuity of services provided in the TECHNICAL SPECIFICATIONS.
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9.4.
|
To freely select technologies and more efficient network architectures, provided it complies with the requirements of the TECHNICAL SPECIFICATIONS and the whole becomes a coherent network to provide Internet service and intranet access.
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9.5.
|
The CONTRACTOR during the INVESTMENT PERIOD of the ACCESS NETWORK, the INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK and the OPERATION PERIOD, has the freedom to make updates to the technologies used, if required in the Technical Proposal, provided that this change equals or improves the quality and continuity of conditions originally established, the CONTRACTOR must be authorized by FITEL to make said change; for which it must comply with the requirements and procedure established in the TECHNICAL SPECIFICATIONS.
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9.6.
|
Within the first six (06) months of the INVESTMENT PERIOD OF THE ACCESS NETWORK, the CONTRACTOR may request FITEL the modification of model contracts contained in Exhibits No. 5-A and 5-B of the annex 8B of the TERMS AND CONDITIONS.
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9.7.
|
To provide to MANDATORY PAID INSTITUTIONS for free and without being subject to the regime of penalties established in the FINANCING AGREEMENT, the Internet and Intranet access referred to in this AWARDED PROJECT during the investment period, provided they do not involve the provision of additional funding from FITEL.
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9.8.
|
To request the reduction of guarantees issued, as provided in the FINANCING AGREEMENT.
|
10.1.
|
To enforce the obligations of the CONTRACTOR under the FINANCING AGREEMENT.
|
10.2.
|
To require full or partial refund of FUNDING AWARDED, of TRANSPORTATION NETWORK and ACCESS NETWORK ASSETS, as provided in the FINANCING AGREEMENT, when the CONTRACTOR use disbursements differently than the purpose indicated in the FINANCING AGREEMENT.
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10.3.
|
To execute the guarantees given on behalf of FITEL, in case of breach of its obligations under the Financing Agreement.
|
10.4.
|
To impose and enforce penalties arising from noncompliance, incompleteness, or delays of commitments from the CONTRACTOR under the FINANCING AGREEMENT.
|
10.5.
|
To make visits to the premises, facilities, infrastructure, among others, as it deems necessary to verify the performance of the AGREEMENT.
|
10.6.
|
To apply exceptional interpretation of clauses of the FINANCING AGREEMENT by FITEL, considering the special nature of it.
|
10.7.
|
To terminate the FINANCING AGREEMENT, when any of the grounds provided for this purpose occurs, if deemed appropriate.
|
10.8.
|
To modify, within six (06) months of the INVESTMENT PERIOD OF THE ACCESS NETWORK, the model contracts contained in Exhibits No. 5-A and 5-B of the annex 8-B of the TERMS AND CONDITIONS; provided that such amendments do not involve the CONTRACTOR in additional obligations to those in the FINANCING AGREEMENT, its Exhibits or the TECHNICAL SPECIFICATIONS.
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10.9.
|
To approve contracts formats indicated in the preceding paragraph, taking into account the contributions of the CONTRACTOR, according to the provisions of Paragraph 9.6. of the FINANCING AGREEMENT. FITEL will give a favorable or unfavorable opinion on the changes proposed by the CONTRACTOR According to the corresponding notification.
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11.1.
|
The AWARDED PROJECT may be executed by subcontractors or other forms of outsourcing, provided that FITEL is informed of the names of individuals and/or companies to perform the work. To this end, the CONTRACTOR upon the signature of the FUNDING AGREEMENT shall submit an affidavit in accordance with Exhibit No. 10 of this contract, assuming responsibility for compliance with the contractual obligations of the subcontractor or other individuals or legal entities with whichit subscribes outsourcing contracts. The aforementioned Affidavit must be filed even if the CONTRACTOR does not perform any subcontract.
|
11.2.
|
In any case, the CONTRACTOR remains responsible to FITEL for the efficient and timely implementation of such obligations and may not allege a breach of the subcontractor to excuse its own default.
|
11.3.
|
The CONTRACTOR may not subcontract, individuals or legal entities for the execution of the entire AWARDED PROJECT
|
|
i.
|
The amount of FIFTY FOUR MILLION NINE HUNDRED FIFTY TWO THOUSAND NINE HUNDRED FIFTY US Dollars (US$ 54´952,950.00) for the installation and operation of the ACCESS NETWORK.
|
|
ii.
|
The amount of :TWENTY SEVEN MILLION SEVEN HUNDRED EIGTH THOUSAND US Dollars (US$ 27´708,000.00), for the implementation of the TRANSPORTATION NETWORK
|
13.1.
|
CONDITIONS OF EXPANSION OF THE AWARDED PROJECT COMMON TO BOTH NETWORKS
|
13.1.1.
|
The EXPANSION OF THE AWARDED PROJECT will be formalized through the signing of an addendum to the FINANCING CONTRACT.
|
13.1.2.
|
EI CONTRACTOR prior to the signing of the Addendum to FINANCING AGREEMENT that approves the EXPANSION OF THE AWARDED PROJECT, will deliver an Enlargement Activity Schedule, it will be part of the Addendum to FINANCING AGREEMENT.
|
13.1.3.
|
The deadline to complete the installation in new BENEFICIARY LOCATIONS shall be six (6) months from the signing of the Addendum to FINANCING AGREEMENT that approves the EXPANSION OF THE AWARDED PROJECT
|
13.2.
|
FOR THE ACCESS NETWORK
|
13.2.1.
|
The CONTRACTOR may solicit FITEL the EXPANSION OF THE AWARDED PROJECT for the ACCESS NETWORK under the terms indicated in this FINANCING AGREEMENT.
|
13.2.2.
|
THE AWARDED PROJECT may be expanded during the INVESTMENT PERIOD of THE ACCESS NETWORK and cannot be higher than twenty percent (20%) of the amount of THE ACCESS NETWORK FINANCING.
|
13.2.3.
|
The new beneficiary localities to be selected must belong to new district capitals within the area of influence of the AWARDED PROJECT, which will be included as Annex to the Addendum of the FINANCING AGREEMENT which approves the EXPANSION of the AWARDED PROJECT.
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13.2.4.
|
The CONTRACTOR must comply upon the approval of FITEL with every one of the terms it previously approved for the subscription of the Addendum to the FINANCING AGREEMENT reason why the EXPANSION of the AWARDED PROJECT is approved. FITEL reserves the right to modify the general and economic conditions of the new Non-reimbursable financing
|
13.3.
|
FOR THE TRANSPORTATION NETWORK
|
13.3.1.
|
The CONTRACTOR may, within six (06) months of the INVESTMENT PERIOD of the TRANSPORTATION NETWORK request FITEL the expansion of the AWARDED PROJECT to new district capitals. Such extension shall not exceed twenty percent (20%) of the amount of FUNDING AWARDED
|
13.3.2.
|
The new beneficiary localities to be selected must belong to new district capitals within the area of influence of the AWARDED PROJECT, which will be included as Annex to the Addendum of the FINANCING AGREEMENT which approves the EXPANSION of the AWARDED PROJECT.
|
13.3.3.
|
The EXPANSION of the AWARDED PROJECT will be formalized through the signing of an addendum to the FINANCING AGREEMENT, for which it will apply the provisions of this clause.
|
14.1.
|
ACCESS NETWORK:
|
14.2.
|
TRANSPORTATION NETWORK
|
14.2.1.
|
Disbursements are made according to the following scheme:
|
Concept
|
Time
|
Payment
|
Advance
|
Deliverables
|
First disbursement
|
Subscription of agreement
|
20% FINANCING OF TRANSPORTATION NETWORK
|
0%
|
Advance payment guarantee
|
Second disbursement
|
Final date of the first advance, described in Paragraph 2.2 of Exhibit 8-A
|
40% FINANCING OFACCESS NETWORK
|
Completion of the First Advance
|
37 Nodes of Distribution ,Connection and core Nodes and 3 Aggregation Nodes
|
Third disbursement
|
Date of completion of the INSTALLATION STAGE
|
40% FINANCING OF TRANSPORTATION NETWORK
|
Total Delivery of TRANSPORTATION NETWORK and signing of MINUTES OF CONFORMITY OF INSTALLATION AND TESTING SERVICES
|
37 Nodes of Distribution ,Connection and core Nodes and 3 Aggregation Nodes
|
15.1.
|
As a condition for signing the FINANCING AGREEMENT in the CLOSING DATE, the CONTRACTOR shall deliver to the COMMITTEE the ADVANCE PAYMENT GUARANTEE and PERFORMANCE BOND of the FINANCING AGREEMENTwhich must be issued by a LOCAL BANKING BUSINESS OR LOCAL INSURANCE BUSINESS rightfully authorized by the SBS (the banking and retirement fund superintendency) or by an INTERNATIONAL FINANCIAL ENTITY. In the case of a warranty issued by and INTERNATIONAL FINANCIAL ENTITY, it must be confirmed by a LOCAL BANKING BUSINESS according to the Exhibit Nº2 in the TERMS AND CONDITIONS.
|
15.2.
|
The ADVANCE PAYMENT GUARANTEE shall be for an amount of SIXTEEN MILLION FIVE HUNDRED THIRTY TWO THOUSAND ONE HUNDRED NINETY US Dollars (US$ 16´532,190.00), equivalent to 100% of the first disbursement, of THE ACCESS NETWORK and THE TRANSPORT NETWORK ensuring the proper use of this disbursement in favor of the CONTRACTOR, pursuant to the provisions of this AGREEMENT. It shall remain valid from the CLOSING DATE until the end of the investment period. The FITEL may provide for the mandatory extension of this guarantee, and the CONTRACTOR must renew it by the time indicated for its effect.
|
15.3.
|
THE CONTRACTOR during the INVESTMENT PERIOD of THE ACCESS NETWORK and the INVESTMENT PERIOD of THE TRASNPORT NETWORK may request FITEL a reduction of 50% and 40% of the ADVANCE PAYMENT GUARANTEE. To do this, it must have fulfilled the following conditions:
|
% Reduction
|
Progress
|
|
50%
|
Access Network
|
Transportation Network
|
60% of the total of PAID INSTITUTIONS
|
37 Nodes of Distribution Connection and core 3 Aggregation Nodes
|
|
40%
|
MINUTES OF COMPLIANCE OF FACILITIES AND TESTING OF SERVICES OF THE ACCESSNETWORK
|
MINUTES OF COMPLIANCE OF FACILITIES AND TESTING OF SERVICES OF THE TRANSPORTATION NETWORK
|
15.4
|
The ADVANCE PAYMENT GUARANTEE will be returned to the CONTRACTOR, once signed
|
|
·
|
RECORD OF AWARD OF THE TRANSPORTATION NETWORK ASSETS.
|
15.5
|
PERFORMANCE BOND of the FINANCING AGREEMENT will be for a total of FIVE MILLION FOUR HUNDRED NINETY FIVE THOUSAND TWO HUNDRED NINETY FIVE US Dollars (US$ 5´495,295.00), equivalent to ten percent (10%) of the FINANCING for the ACCESS NETWORK which will ensure the proper and timely performance of each and every one of the obligations of the CONTRACTOR. The performance bond reduction scheme is as follows:
|
15.5.1.
|
After signing the TRANSPORTATION NETWORK ASSETS AWARD MINUTEm, it will be substituted for another totaling twenty percent (20%) of the amount of the FINANCING of the ACCESS NETWORK.
|
15.5.2.
|
At the beginning of the second year of the PERIOD OF OPERATION and after INSTALLATION CONFORMITY AND ACCESS NETWORK SUPERVISION REPORT is acceptedby FITEL PERFORMANCE BOND of the FINANCING AGREEMENT will be reduced to ten percent (10%) of the FINANCING of the ACCESS NETWORK.
|
15.5.3.
|
At the beginning of the third year of the PERIOD OF OPERATIONS and after INSTALLATION CONFORMITY AND ACCESS NETWORK SUPERVISION REPORT is accepted by FITEL it will be reduced to eight percent (8%) of the FINANCING of the ACCESS NETWORK
|
15.5.4.
|
At the beginning of the fourth year of the PERIOD OF OPERATIONS and after INSTALLATION CONFORMITY AND ACCESS NETWORK SUPERVISION REPORT is accepted by FITEL the PERFORMANCE BOND of the FINANCING AGREEMENT will be reduced to eight percent (6%) of the FINANCING of the ACCESS NETWORK and it will remain so until closure of the FINANCING CONTRACT
|
15.6
|
The PERFORMANCE BOND of the FINANCING AGREEMENT is issued for and on behalf of the CONTRACTOR in favor of FITEL. The bond must be renewed annually so that remains in effect until the expiration of the FINANCING AGREEMENT, except as noted in Paragraph 4.6. of the FINANCING AGREEMENT.
|
15.7
|
In case the CONTRACTOR presents COMMENTS pending from the last MONITORING REPORT issued in the PERIOD OF OPERATION OF THE ACCESS NETWORK, the PERFORMANCE BOND of the FINANCING AGREEMENT will be renewed seven (07) DAYS prior to maturity for a period of (60) DAYS, and so on until all COMMENTS have been clarified.
|
15.8
|
The PERFORMANCE BOND of the FINANCING AGREEMENT is secured, unconditional, and irrevocable, without benefit of excussion and of immediate execution upon request of FITEL without judicial demand for payment or performance, a copy of which is included as Exhibit No. 5 of the FINANCING AGREEMENT.
|
15.9
|
The PERFORMANCE BOND of the FINANCING AGREEMENT shall be returned no later than five (05) business days after making the final disbursement
|
16.1
|
The CONTRACTOR agrees to transfer ownership and control of the TRANSPORTATION NETWORK ASSETS on behalf of the MTC with the signing of the MINUTES OF AWARD OF THE TRANSPORTATION NETWORK ASSETS, once the Concession Agreement between the MTC and the concessionaire for the operation for the TRANSPORTATION NETWORK is subscribed.
|
16.2
|
The CONTRACTOR recognizes that after the signing of the MINUTES OF AWARD OF TRANSPORTATION NETWORK ASSETS, will also assume the obligation to formalize and perfect by all acts or procedures necessary for the transference of ownership and control referred to in the preceding paragraph in favor of the MTC. This obligation will assumed according to nature of the assets to be transferred and its aptitude to be registered in SUNARP.
|
16.3
|
The CONTRACTOR undertakes to carry out the activities necessary to preserve the condition and utility of the ASSETS TRANSPORT NETWORK until the signing of the Concession Agreement between the MTC and the concessionaire for the operation of the TRANSPORTATION NETWORK
|
16.4
|
The CONTRACTOR shall be liable for damages or losses caused to the TRANSPORTATION NETWORK ASSETS until the signing of the Concession Agreement between the MTC and the concessionaire for the operation of the TRANSPORTATION NETWORK. Therefore are forced to hire the necessary insurance to comply with the provisions of this paragraph.
|
16.5
|
After the signing of MINUTES OF AWARD OF ACCESS NETWORK ASSETS, FITEL shall make
the final disbursement of FUNDING AWARDED; as stated in Clause Fourteenth of the FINANCING AGREEMENT.
|
16.6
|
Without prejudice to the other obligations arising from the provisions of paragraph 7.34 and other provisions under this FINANCING AGREEMENT, until the transfer of title of the TRANSPORTATION NETWORK ASSETS to the MTC, the CONTRACTOR as provided in the applicable law, in its capacity as holder of such property immediately has an obligation to exercise (for your own expense) the following types of possessory defense for both the case of attempted usurpation of the TRANSPORTATION NETWORK ASSETS, as in the case of activities incompatible with the proper use of them by third parties:
|
|
a)
|
Extrajudicial possessory defense, used to repel the force used against the CONTRACTOR and to regain the good, without time interval, if it were dispossessed, but always refrain from the use of recourses not justified by the circumstances.
|
|
b)
|
Legal possessory defense, the CONTRACTOR must, if it is borne by the TRANSPORTATION NETWORK ASSETS any involvement, dispossession, occupation, usurpation, among others, to communicate MTC and FITEL of those facts and make use of the mechanisms and judicial resources to enable it to hold harmless MTC's right on the TRANSPORTATION NETWORK ASSETS.
|
16.7
|
The failure to exercise possessory defenses will result in penalties under Clause eighteen (18) of the FINANCING AGREEMENT.
|
16.8
|
The CONTRACTOR must notify FITEL and MTC, immediately and notarial duct, the occurrence of damage to the TRANSPORT NETWORK ASSETS, and the nature and amount thereof.
|
16.9
|
The exercise of possessory defenses described above does not hold harmless the CONTRACTOR, which, to a course as described in the preceding paragraphs, shall coordinate immediately with Fitel and MTC the legal actions that the CONTRACTOR must engage in order to hold harmless MTC's right on TRANSPORT NETWORK ASSETS.
|
16.10
|
Without prejudice to the provisions in paragraph 7.30 of the FINANCING AGREEMENT, the CONTRACTOR must hold harmless FITEL especially regarding the MTC and against any action or exception of legal, administrative, arbitration or contract, or claim of any nature regarding the ACCESS NETWORK and TRANSPORT NETWORK ASSETS.
|
16.11
|
The CONTRACTOR must comply with in respect of the TRANSPORT NETWORK and ACCESS NETWORK ASSETS, to pay taxes, fees and contributions payable, pursuant to APPLICABLE LAWS FINANCING referred to in the FINANCING AGREEMENT, considering between these regulatory provisions as provided in the Consolidated Text of the Municipal Taxation Act, approved by Supreme Decree No. 156-2004-EF or later rule that amends
|
16.12
|
The CONTRACTOR ensures the proper transfer of title of the TRANSPORT NETWORK ASSETS in favor of MTC and the ACCESS NETWORK ASSETS in favor of FITEL ; as wll as the operation and functioning of the TRANSPORT NETWORK ASSETS. It also recognizes the domain the MTC has over THE TRANSPORT NETWORK ASSETS and the domain FITEL has over the ACCESS NETWORK ASSETS
|
|
Ø
|
ACCESS NETWORK
|
17.1
|
FITEL is responsible for the supervision and control AWARDED PROJECT during INVESTMENT PERIOD of THE ACCESS NETWORK and OPERATION PERIOD.
|
17.2
|
In the INVESTMENT PERIOD of THE ACCESS NETWORK, supervision will mainly include the following:
|
|
•
|
Supervision of the number of BENEFICIARY LOCALITIES and MANDATORY PAID INSTITUTIONS of the AWARDED PROJECT and its proper location;
|
|
•
|
Monitoring the quantity and quality of infrastructure, equipment, materials, management tools, among others, to be applied to the AWARDED PROJECT
|
|
•
|
Supervision and control of the installation of infrastructure, equipment, materials, management tools, among others, which will be used by the AWARDED PROJECT to provide service access to Internet and intranet, in the BENEFICIARY LOCATIONS, INSTITUTIONS, or others who contract the service within the scope of the access network installed by the CONTRACTOR to serve the AWARDED PROJECT;
|
|
•
|
Supervision and control and SPREAD AWARENESS, TRAINING AND DEVELOPMENT OF CONTENTS;
|
|
•
|
Supervision and control of the operation of the Internet access service and intranet access, if any, to be provided with the AWARDED FUNDING according to the FINANCING AGREEMENT, its annexes and the TECHNICAL SPECIFICATIONS, TECHNICAL PROPOSAL, the CIRCULAR and TERMS AND CONDITIONS; and,
|
|
•
|
Supervision of other aspects that Fitel deems necessary to ensure the proper use of the services required
|
17.3
|
During the PERIOD OF OPERATION, FITEL will primarily oversee the following:
|
|
•
|
The services provided by the CONTRACTOR with the FUNDING AWARDED, according to the requirements specified in the TECHNICAL SPECIFICATIONS and in the absence thereof, in accordance with the provisions of the legal and regulatory framework applicable.
|
|
•
|
The quality of the provision of other services that are offered using the access network of the AWARDED PROJECT, according to the conditions laid down in the respective addendum.
|
|
•
|
Other that FITEL recommends or orders within the framework of the FINANCING AGREEMENT
|
Ø
|
TRANSPORTATION NETWORK
|
17.4
|
Supervision and control of the installation of infrastructure, equipment, materials, management tools, among others, to be used for the TRANSPORT NETWORK.
|
17.5
|
In the TRIAL PERIOD, FITEL will supervise during execution of the TRANSPORT NETWORK operation, solely for the operation of the ACCESS NETWORK. It will also verify the performance of the network and could execute periodical monitoring protocols for this.
|
17.6
|
Supervision of the appropriate use of the AWARDED FINANCING.
|
|
Ø
|
ACCESS NETOWRK
|
18.1
|
Penalties for failure in the ACCESS NETWORK INVESTMENT PERIOD
|
18.1.1
|
The penalties applicable for breaches during the ACCESS NETWORK INVESTMENT PERIOD may be deducted from the corresponding disbursement for this period.
|
18.1.2
|
Non-compliance with activities:
|
18.1.2.1
|
If the CONTRACTOR breaches with the full installation of a service within the prescribed period, Fitel shall establish a penalty of five-hundredths (0.05) of ITU (Tax unit) per MANDATORY PAID INSTITUTION set forth in Exhibit No. 01 of this contract, per day behind in the breach, counted from the day the initial installation ended.
|
18.1.2.2
|
If the CONTRACTOR breaches or partially meets the awareness and dissemination activities, as indicated in section 4.2.1 of the ACCESS NETWORK TECHNICAL SPECIFICATIONS, FITEL shall apply a penalty of one-tenth (0.1) of ITU for BENEFICIARY where this obligation was not complied with within the time limit set. It is considered that this activity was carried when the minimum percentage of attendees described in TECHNICAL SPECIFICATIONS of THE ACCESS NETWORK except what is indicated in the paragraph 3 of the Exhibit Nº14 of the Appendix 8B of the TERMS AND CONDITIONS related to the accreditation of the minimum of attendees.. The application of this penalty does not relieve the CONTRACTOR compliance with this obligation
|
18.1.2.3
|
If the CONTRACTOR does not comply with the installation of the monitoring system within the ACCESS NETWORK INVESTMENT PERIOD, according to what is stated in section 6.6.1.1 of the TECHNICAL SPECIFICATIONS as well as usernames and passwords, etc., or all activities for commissioning of this system is not completed, Fitel shall apply a penalty of five (5) ITU. The application of this penalty does not relieve the CONTRACTOR of the compliance with this obligation.
|
18.1.2.4
|
In case of breach of the activities during the INVESTMENT PERIOD due to a fortuitous event or force majeure, not attributable to the CONTRACTOR, it shall send the documentation to FITEL proving this, in maximum one month of the event causing the breach. Furthermore, in order to evaluate the fact, the CONTRACTOR must communicate the occurrence of the event, and propose its estimate of days required for the performance of such activities, within the first fifteen (15) days of the occurrence.
|
18.1.2.5
|
In the event that the CONTRACTOR has not hired or has not maintained insurance policies in force on ASSETS and elements of the ACCESS NETWORK as stated in Paragraph 7.21 of the Seventh Clause FUNDING AGREEMENT, FITEL may impose a penalty of five (05) ITU whenever compliance with this obligation has failed.
|
18.1.2.6
|
If the CONTRACTOR does not comply with the installation of the server for monitoring within the INVESTMENT PERIOD, according to what is stated in section 6.6.1.2 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, or all activities for commissioning of this are not completed, Fitel shall apply a penalty of five (5) ITU. The application of this penalty does not relieve the CONTRACTED PART to comply with this obligation.
|
18.1.2.7
|
If the CONTRACTOR fails to comply with the installation of the amount of help centers for users within the INVESTMENT PERIOD, according to what is stated in paragraph 5.5 of the TECHNICAL SPECIFICATIONS. The delay by the CONTRACTOR, will result in a penalty of five (05) ITU
|
18.1.3
|
Penalties for Failure to deliver Information:
|
18.1.3.1
|
If the CONTRACTOR fails to comply to submit the formats of the ACCESS NETWORK INSTALLATION MINUTES it will use, according to the period specified in paragraph 6.5.3.3 of the TECHNICAL SPECIFICATIONS, FITEL may impose a penalty of three (03) ITU. The application of this penalty does not relieve THE CONTRACTOR compliance with this obligation.
|
18.1.3.2
|
If the CONTRACTOR fails to deliver the ACCESS NETWORK INSTALLATION MINUTES according to the period specified in paragraph 6.5.3.6 of the TECHNICAL SPECIFICATIONS, Fitel may apply a penalty equal to one hundredth (0.01) ITU for each DAY of delay in the ACCESS NETWORK INSTALLATION MINUTES(station/terminal node or subscriber).
|
18.1.3.3
|
If the CONTRACTOR fails to comply with submitting the documentation and information that certifies the execution of activities AWARENESS TRAINING AND DISSEMINATION according to the period specified in Paragraph 5 of Appendix No. 14 of the TECHNICAL SPECIFICATIONS, Fitel will apply a penalty equal to one hundredth (0.01) of ITU per DAY of delay. It is only considered submitted the documentation and information for each LOCATION that has filled all fields, including subscription of faith that carry out this activity, and the list of attendees.
|
18.1.3.4
|
If the CONTRACTOR fails to comply with its final proposal to deliver CAPACITY BUILDING within the time limits indicated in Paragraph 4.1.2 of the TECHNICAL SPECIFICATIONS, FITEL shall apply a penalty of three (03) ITU for each of these proposals not filed within that period. The application of this penalty does not relieve the CONTRACTOR to comply with this obligation.
|
18.1.3.5
|
The CONTRACTOR shall send to Fitel, within the maximum period prescribed in Paragraph 6.5.5 of the TECHNICAL SPECIFICATIONS, a proposed Testing protocol for Acceptance of Facilities containing the minimum procedures required by Fitel. The delay by THE HIRED in remission of that protocol will result in a penalty of three hundredths (0.03) ITU per DAY of delay.
|
18.1.3.6
|
The CONTRACTOR shall send to Fitel, within the maximum period prescribed in Paragraph 2.5.1 of the TECHNICAL SPECIFICATIONS, the FINAL SCHEDULE OF ACTIVITIES, containing the minimum fields required by Fitel. The delay by the CONTRACTOR in referring this schedule will result in a penalty of one hundredth (0.01) of ITU for each day of delay.
|
18.1.3.7
|
The CONTRATOR shall send to Fitel, within the maximum period prescribed in Paragraph 5.4.2 of the TECHNICAL SPECIFICATIONS, the detailed proposal for the Maintenance Program. The delay by the CONTRACTOR in remission of the program will result in a penalty of one hundredth (0.01) of ITU for each day of delay.
|
18.1.3.8
|
If the CONTRACTOR fails to comply with the submission of information operations and maintenance facilities within the maximum period prescribed in Paragraph 5.6.2 of the TECHNICAL SPECIFICATIONS. The delay by the CONTRACTOR will result in a penalty of five (05) ITU.
|
18.1.3.9
|
If the CONTRACTOR fails to comply with the submission of the detailed content of the courses to be issued in training on the technology solution within the maximum period prescribed in Paragraph 2.6.1 of the TECHNICAL SPECIFICATIONS. The delay by the CONTRATED PARTY will result in a penalty of one hundredth (0.01) of ITU for each day of delay.
|
18.1.3.10
|
If the CONTRACTOR fails to comply with the referral of disaggregated costing PROPOSED ECONOMIC NETWORK ACCESS, within the maximum period prescribed in Paragraph 2.7.1 of the TECHNICAL SPECIFICATIONS NETWORK ACCESS. The delay by THE HIRED, will result in a penalty of two hundredths (0.02) ITU per DAY of delay.
|
18.1.3.11
|
When the CONTRACTOR fails to present to Fitel FIELD STUDIES, within the prescribed period and according to what is stated in paragraph 6.5.2 of the TECHNICAL SPECIFICATIONS, FITEL may apply a penalty of ten (10) UIT.
|
18.1.3.12
|
When the ONCTRACTED PARTY fails to present to Fitel the ENGINEERING STUDIES, within the deadline and according to what is stated in paragraph 6.5.2 of the TECHNICAL SPECIFICATIONS, FITEL apply a penalty of ten (10) UIT.
|
18.1.3.13
|
When the CONTRACTOR fails to present to FITEL the proposal to implement a tracking subsystem within the deadline and according to what is stated in paragraph 6.6.1 of the TECHNICAL SPECIFICATIONS, FITEL will apply a penalty of five (05) UIT
|
18.1.3.14
|
When the CONTRACTOR fails to submit to FITEL the formation of its team, within the prescribed period and according to what is stated in paragraph 6.4 of the TECHNICAL SPECIFICATIONS, FITEL apply a penalty of five (05) UIT.
|
18.1.3.15
|
When the CONTRACTOR fails to inform FITEL of a modification in the conformation of its staff, within the prescribed period and according to what is stated in paragraph 6.4 of the TECHNICAL SPECIFICATIONS, FITEL may apply a penalty two (02) UIT.
|
18.2
|
Penalties due to non compliance during the OPERATION PERIOD
|
18.2.1
|
The penalties applicable due to non compliance during the OPERATION PERIOD may be discounted from the next disbursement that corresponds to deliver to THE CONTRACTOR after the occurrence of the corresponding non compliance or according to the following provisions. In case that the amount of penalties of a semester exceeds the disbursement corresponding to said period, THE CONTRACTOR must cancel said debt to FITEL in a term of fifteen (15) days, counted since the collection notification.
|
18.2.2
|
Penalties due to non compliance of the availability of rendered services
|
18.2.2.1
|
In case the CONTRACTOR fails to comply with the requirement of minimum availability of the network of 98% annually, indicated in the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK and measured to the POP, the FITEL will impose a penalty of a tenth (0.1) of the UIT for each additional hour of interruption of the network. The availability will be calculated each year, counted since the first day of the OPERATION PERIOD.
|
18.2.2.2
|
In case that the availability of services is interrupted in some of the POPs due to Acts of God or Force Majeure or events not attributable to the CONTRACTOR . THE CONTRACTOR will notify to FITEL within the term of thirty (30) days following to the culmination of the month of the event, about the existence of said events, which must be communicated to FITEL through a letter enclosing, through optical storage devices (CD DVD or USB), the detail of the dates and the hours they request to discount, as well as the causes that originated it.
|
18.2.3
|
Penalties due to non compliance of TRAINING
|
18.2.3.1
|
In case THE CONTRACTOR fails to comply or partially complies to make the TRAINING according to indications made in Appendix N° 13 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL will impose a penalty of a tenth (0.1) of the UIT for each location where this obligation was not complied, within the term established. We shall consider that this activity is performed when the minimum percentage of attendees is reached. The application of this penalty does not release THE CONTRACTOR of the compliance of this obligation.
|
18.2.4
|
Penalties due to failure to submit information by THE CONTRACTOR
|
18.2.4.1
|
If the CONTRACTOR fails to deliver the Execution Minutes of TRAINING according to the term foreseen in Section III of Appendix N° 13 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL will apply a penalty equivalent to one hundredth (0.01) of the UIT for each DAY of delay per BENEFICIARY LOCALITY. The minutes will be only considered as submitted per BENEFICIARY LOCALITY those that have all full fields, including the subscription of the person that certifies the performance of this activity, and the list of attendees.
|
18.2.4.2
|
THE CONTRACTOR shall send to FITEL, within the maximum term established in Section III of Appendix N° 13 B of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, the final report of the TRAINING performed. The delay by THE CONTRACTOR in the remission of said report, shall result in a penalty of three hundredths (0.03) of the UIT for each DAY of delay.
|
18.2.4.3
|
THE CONTRACTOR shall send to FITEL, within the maximum term established in the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, the monthly reports of the use of access to Internet (total traffic, per locality and per type), monthly report of interruptions, monthly report of quality indicators. The delay by THE CONTRACTOR in the remission of reports, shall result in a penalty of one tenth (0.1) of the UIT per each DAY of delay and per each type of report.
|
18.2.4.4
|
When THE CONTRACTOR does not present to FITEL the conformation of its work team, within the term established and according to indications made in Section 6.4 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL shall apply a penalty of five (05) UIT.
|
18.2.4.5
|
When THE CONTRACTOR does not communicate to FITEL the modification of the conformation of its work team, within the term established and according to indications made in Section 6.4 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL shall apply a penalty of two (02) UIT.
|
18.2.4.6
|
When THE CONTRACTOR does not send to FITEL the format of the activities for Preventive Maintenance, within the term established and according to indications made in Section II of Appendix N° 17 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL shall apply a penalty of five (05) UIT.
|
18.2.4.7
|
When THE CONTRACTOR does not send to FITEL the Schedule of annual Preventive Maintenance, within the term established and according to indications made in Section II of Appendix N° 17 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL shall apply a penalty of three (03) UIT.
|
18.2.4.8
|
If THE CONTRACTOR sends to FITEL, out of the time established in Section
7.17
of the seventh clause of the FINANCING CONTRACT, the disaggregated information of investment costs of the ACCESS NETWORK or if its is inaccurate or false FITEL will impose a penalty of ten (10) UIT.
|
18.2.4.9
|
If THE CONTRACTOR sends to FITEL, out of the time established in Section
7.18
of the seventh clause of the FINANCING CONTRACT, the operative cash flow of the AWARDED PROJECT, or if it is inaccurate or false FITEL will impose a penalty of ten (10) UIT.
|
18.2.5
|
Penalties for OBJECTIONS
|
18.2.5.1
|
FITEL shall make supervisions prior to the performance of disbursements indicated in the Fourteenth Clause of the FINANCING CONTRACT. The supervisions will be made according to the protocols approved by FITEL.
|
18.2.5.2
|
FITEL shall apply a penalty of one (01) UIT for each one of the OBJECTIONS indicated as follows, per BENEFICIARY LOCALITY or station/node indicated in the SUPERVISION REPORT OF THE ACCESS NETWORK, with the indication that the application of this penalty does not release THE CONTRACTOR of the compliance of these obligations.
|
18.2.5.3.
|
When THE CONTRACTOR fails to comply with the preventive Maintenance Program according to the TECHNICAL PROPOSAL.
|
18.2.5.4.
|
If THE CONTRACTOR confines or prevents the personnel appointed by FITEL to make the corresponding visits during the effectiveness of the FINANCING CONTRACT in its tasks of SUPERVISION, FITEL can impose the penalty for each one of the prevented or limited visits. FITEL can discount that value in the immediate disbursement following to the date of the negative or limitation.
|
18.2.5.5.
|
If THE CONTRACTOR fails to comply with the installation of the blocking software specified in Section 3.5.4 of the TECHNICAL SPECIFICATIONS OF THE ACCESS NETWORK.
|
18.2.5.6.
|
When THE CONTRACTOR fails to comply with the term of 30 DAYS, established in Section 5.2 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, to install the required service, a penalty of one tenth (0.1) of the UIT for each DAY of delay will be applied.
|
18.2.5.7.
|
For the non compliance of each one of the indicators established in Appendix N° 11 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, a penalty will be applied according to the following table:
|
Nº
|
Indicator
|
Quality Parameter
|
Scope
|
Penalty
|
1
|
TIA – Incidence rate of troubleshooting for the service of access to Internet
|
Less than 10%
|
All the network
|
10 UIT x month
|
2
|
Latency
|
Less than 150 msec
|
Up to CPE
|
0.05 UIT x month x CPE
|
3
|
Packet loss
|
Less than 2%
|
To the subscriber
|
0.05 UIT x month x CPE
|
4
|
Up/Down Speed
|
Higher than 40% of hired speed
|
Up to CPE
|
0.05 UIT x mes x CPE
|
18.2.5.8.
|
The penalties, if any, will be added per indicator, for each one of the months of the supervised semester.
|
Ø
|
TRANSPORTATION NETWORK
|
18.3.
|
The penalties applicable for non compliance ofTHE TRANSPORT NETWORK will be discounted from the next disbursement that corresponds to deliver to THE CONTRACTOR after the occurrence of the corresponding non compliance or according to indications made in the following provisions. In case that the amount of the penalties exceeds the disbursement corresponding to said period, THE CONTRACTOR must cancel said debt to FITEL in a term of fifteen (15) DAYS, counted since the collection notification.
|
18.4.
|
Failure Activities:
|
18.4.1
|
When THE CONTRACTOR fails to comply with the term established in Section 2.2 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to culminate the first advance or total delivery of the TRANSPORTATION NETWORK, a penalty of five (05) UIT for each DAY of delay will be applied.
|
18.4.2
|
In case that THE CONTRACTOR has not contracted or has not kept in force the insurance policies on the assets and elements that conform the TRANSPORTATION NETWORK according to Section 7.21 of the Seventh Clause of the FINANCING CONTRACT, FITEL will impose a penalty of five (05) UIT each time this obligation has not been complied.
|
18.4.3
|
In case THE CONTRACTOR fails to comply with the installation of the server
for monitoring within the INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK, according to Section 15.10.2 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, or all the activities for the commissioning of it have not concluded, FITEL will impose a penalty of five (5) UIT. The application of this penalty does not release THE CONTRACTOR of the compliance of this obligation.
|
18.4.4
|
In case THE CONTRACTOR fails to comply with the installation of the monitoring system within the INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK, according to Section 15.10.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, and users and keys, among others, or all the activities for the commissioning of this system are not concluded, FITEL will impose a penalty of five (5) UIT. The application of this penalty does not release THE CONTRACTOR of the compliance of this obligation.
|
18.4.5
|
In case of non compliance of the activities to perform during the INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK is due to a supposed Act
of God or force majeure, or facts attributable to THE CONTRACTOR, it must send to FITEL the documentation that demonstrates it, within the following month of the event of non compliance. Furthermore, in order to assess the fact, THE CONTRACTOR must communicate the occurrence of the event, and propose the estimated days required for the compliance of said activities, within the first fifteen (15) days of the occurrence of the event.
|
18.5
|
Penalties due to the Failure of Information delivery:
|
18.5.1
|
When THE CONTRACTOR fails to comply with the term established in Section 2.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to submit the GENERAL TECHNICAL PROPOSAL, a penalty of one (01) UIT per each DAY of delay will be applied.
|
18.5.2
|
When THE CONTRACTOR fails to comply with the term established in Section 2.2 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to submit each DEFINITIVE TECHNICAL PROPOSAL, a penalty of one (01) UIT per each DAY of delay will be applied.
|
18.5.3
|
If THE CONTRACTOR fails to comply with the remission of the disaggregated costing of the ECONOMIC PROPOSAL of the TRANSPORTATION NETWORK, within the maximum term established in Section 2.6 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK. The delay by THE CONTRACTOR, will result in a penalty of one 1 UIT per each DAY of delay.
|
18.5.4
|
When THE CONTRACTOR fails to comply with the term established in Section 10.4 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to submit recommendations and the requested protocols, a penalty of one hundredth (0.01) of the UIT per each DAY of delay will be applied
.
|
18.5.5
|
When THE CONTRACTOR fails to comply with the term established in Section 14.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to submit the TECHNICAL FILE, a penalty of one 1 UIT per each DAY of delay will be applied
.
|
18.5.6
|
When THE CONTRACTOR does not present to FITEL the conformation of its work team, within the term established and according to Section 15.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, FITEL shall apply a penalty of 1 UIT.
|
18.5.7
|
When THE CONTRACTOR does not communicate to FITEL the modification of the conformation of its work team, within the term established and according to Section 15.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, FITEL shall apply a penalty of one (01) UIT.
|
18.5.8
|
If THE CONTRACTOR fails to deliver the INSTALLATION MINUTES OF THE TRANSPORTATION NETWORK according to the term foreseen in Section 15.9.6 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, FITEL shall apply a penalty equivalent to one hundredth (0.01) of the UIT per each DAY of delay for the INSTALLATION MINUTES OF THE TRANSPORTATION NETWORK.
|
18.5.9
|
If THE CONTRACTOR sends to FITEL, out of the time established in the FINANCING CONTRACT, the disaggregated information of investment costs of the TRANSPORTATION NETWORK or if it is inaccurate or false, FITEL will impose a penalty of ten (10) UIT.
|
Ø
|
COMPETENCE FACTORS
|
18.6
|
In the case that THE CONTRACTOR has submitted as part of its TECHNICAL PROPOSAL, the installation of infrastructure to provide the services of the AWARDED PROJECT, in an additional amount of BENEFICIARY LOCALITIES, FITEL will impose a penalty of fifteen (15) UIT if THE CONTRACTOR fails to comply with the complete installation of any service of the AWARDED PROJECT within the term established. This penalty will not be applied if THE CONTRACTOR did not included said factor in the TECHNICAL PROPOSAL.
|
18.7
|
In case that THE CONTRACTOR has submitted, the delivery of tablets as referred to in the paragraph 9.1.1 of the TERMS ANS CONDITIONS as part of its TECHNICAL OFFER and fails to deliver the total number of items, FITEL will impose a penalty of fifteen (15) UIT per year of failure of delivery of the total amount of tablets.. This penalty will not be applied if THE CONTRACTOR did not include said factor.
|
18.8
|
Penalties for not keeping the GUARANTEES in force
|
|
(Guarantee Value) x (number of Days in which the
GUARANTEE is not in force)
|
Penalty =
|
--------------------------------------------------------------------------------
UIT
|
18.9
|
Independence of penalties from administrative sanctions
|
18.10
|
Procedure of payment of penalties
|
18.10.1
|
The penalties may be discounted from disbursements indicated in the fourteenth Clause of the FINANCING CONTRACT. The payment of penalties does not imply a waiver of the right of FITEL to claim the compensation for damages, if any, neither its right to terminate the FINANCING CONTRACT, according to Section 19.2. of the nineteenth Clause of the FINANCING CONTRACT.
|
18.10.2
|
When there are penalties that are not covered by a pending disbursement of payment, or when there is no disbursement from which said penalties may be discounted, or in case that in the last four months of the OPERATION PERIOD there is any amount of penalties to collect by FITEL; THE CONTRACTOR must cancel the difference directly to FITEL in a term of fifteen (15) DAYS, counted since the notification of collection. In case of non compliance of said payment, we shall proceed to execute the GUARANTEE OF PERFORMANCE BOND GUARANTEE OF THE FINANCING CONTRACT for the Collection of the owed amount.
|
18.10.3
|
THE CONTRACTOR shall pay the penalties in NUEVOS SOLES.
|
19.1
|
For expiration of the term of the FINANCING CONTRACT.
|
19.2
|
Termination by FITEL
|
19.2.1
|
FITEL may terminate THE FINANCING CONTRACT of full right by some of the following grounds:
|
|
a)
|
When THE CONTRACTOR is declared in a situation of bankruptcy before the Commission of Insolvency Proceedings of the National Institute of Defense of Competence and Intellectual Property– INDECOPI or the person acting as such.
|
|
b)
|
Due to the lack of renewal of guarantees indicated in the Tenth Clause of the FINANCING CONTRACT.
|
|
c)
|
Due to the unjustified non compliance of the DEFINITIVE SCHEDULE OF ACTIVITIES OF THE ACCESS NETWORK OR THE DEFINITIVE SCHEDULE OF ACTIVITIES OF THE TRANSPORT NETWORK; provided said non compliance assessed by FITEL, results in a non compliance of the activities within the INVESTMENT PERIOD of THE ACCESS NETWORK or within the INVESTMENT PERIOD of THE TRANSPORT NETWORK referred in the TECHNICAL SPECIFICATIONS.
|
|
d)
|
For unjustified non compliance of the TECHNICAL SPECIFICATIONS and, in general, of the obligations agreed in the FINANCING CONTRACT.
|
|
e)
|
For abandonment in rendering the service of access to Internet or, if applicable, of the access to Intranet, in some of the BENEFICIARY LOCALITIES or any of the MANDATORY PAID INSTITUTIONS for causes attributable to THE CONTRACTOR.
|
|
f)
|
When there are deviations in the use of the AWARDED FINANCING, or is given a different destiny for which it was granted; without prejudice of the agreement made in the paragraph 10.2 of the Tenth Clause of the FINANCING CONTRACT.
|
|
g)
|
For unjustified non compliance of the TECHNICAL PROPOSAL, except modifications established between the PARTIES.
|
|
h)
|
When FITEL had knowledge that the company that leadered the CONSORTIUM did not had a minimum total participation of twenty five per cent (25%) in the legal person incorporated as THE CONTRACTOR, before three (03) years, counted since the CLOSING DATE.
|
|
i)
|
For loss of the Concession of Public Telecommunications Service or loss of the registration in the registry of services of added value to provide the Public Telecommunication Services established in the TECHNICAL SPECIFICATIONS.
|
|
j)
|
When the amount of penalties referred to the INVESTMENT PERIOD of THE ACCESS NETWORK or the INVESTMENT PERIOD of THE TRANSPORT NETWORK have exceeded the amount in force of the amount of the ADVANCE GUARANTEE and the PERFORMANCE BOND GUARANTEE of THE FINANCING CONTRACT, .
|
|
k)
|
For inaccuracy or falsehood of the AFFIDAVITS submitted by THE CONTRACTOR in the BID, as BIDDER.
|
|
l)
|
For non compliance of the obligations of CLOSURE OF THE FINANCING CONTRACT.
|
|
m)
|
For reasons of convenience, importance or interest of the Peruvian Government, without being necessary the expression of cause in this case.
|
|
n)
|
For refusing to transfer the ownership and title in favor of the MTC or of FITEL the ASSETS OF THE TRANSPORTATION NETWORK or of the ACCESS NETWORK respectively. This ground includes the negative to make the acts necessary to formalize or improve said transfers.
|
|
o)
|
Refuse to provide all the facilities to the MTC, to FITEL and to the concessionaire of the operation of the TRANSPORTATION NETWORK that these require with the purpose to facilitate the bid and commissioning of said component of the AWARDED PROJECT.
|
19.2.2
|
In the cases of termination of the FINANCING CONTRACT indicated in the preceding Section, with exception of the provisions made in literal n), FITEL will be empowered to: (i) execute the PERFORMANCE BOND GUARANTEE OF THE FINANCING CONTRACT referred in the Fourteenth Clause; and, (ii) require THE CONTRACTOR a compensation for damages caused due to its non compliance.
|
19.2.3
|
In case that THE CONTRACTOR has not acquired the ASSETS OF THE ACCESS NETWORK or ASSETS OF THE TRANSPORTATION NETWORK; and the FINANCING CONTRACT is terminated during the INVESTMENT PERIOD by virtue of literals a) until o) of the preceding Section 19.2.1., with exception of literals e),) and m), THE CONTRACTOR shall return to FITEL the integrity of the AWARDED FINANCING disbursed until that time or, the guarantees will be executed.
|
19.2.4
|
In case that THE CONTRACTOR has acquired the ASSETS OF THE ACCESS NETWORK or ASSETS OF THE TRANSPORTATION NETWORK without proceeding to its installation and the FINANCING CONTRACT is terminated during the INVESTMENT PERIOD by virtue of literals a) until o) of the preceding Section 19.2.1., with exception of literals e), and m), the PARTIES shall subscribe the corresponding award minutes and THE CONTRACTOR will endorse in favor of FITEL the insurance policies referred in Section 7.21 of the Seventh Clause of the FINANCING CONTRACT and will return the non executed part of the disbursement of the AWARDED FINANCING or, the guarantees will be executed.
|
19.2.5
|
In case that THE CONTRACTOR has acquired the ASSETS OF THE ACCESS NETWORK or the ASSETS OF THE TRANSPORTATION NETWORK, and it has been installed and the FINANCING CONTRACT is terminated by virtue of paragraphs from a) to the literal o) of the preceding Section 19.2.1., as appropriate, the PARTIES shall subscribe the corresponding award minutes and THE CONTRACTOR will endorse in favor of FITEL the insurance policies referred in Section 7.21 of the Seventh Clause of the FINANCING CONTRACT.
|
19.2.6
|
In the case that THE CONTRACTOR has acquired and made the installation of the ASSETS OF THE ACCESS NETWORK or the ASSETS OF THE TRANSPORTATION NETWORK and the FINANCING CONTRACT is terminated by virtue of literal m) of Section 19.2.1., the PARTIES will subscribe the corresponding award minutes and THE CONTRACTOR will endorse in favor of FITEL the insurance policies referred in Section 7.21 of the Seventh Clause of the FINANCING CONTRACT and THE CONTRACTOR will keep the amount of the AWARDED FINANCING received in the part equivalent to the supply value.
|
19.2.7
|
In all the assumptions of termination by FITEL in which the corresponding award minutes is subscribed and the endorsement of the policies is made on the ASSETS OF THE ACCESS NETWORK and of the TRANSPORTATION NETWORK, it shall not be included neither in the minutes subscription neither in the endorsement in favor of FITEL of the policy those equipment and/or preexisting installations at the enactment of the FINANCING CONTRACT, that are used to provide the proposed services in the AWARDED PROJECT.
|
19.3
|
Termination by THE CONTRACTOR
|
19.3.1
|
THE CONTRACTOR may terminate the FINANCING CONTRACT of full right, by the following grounds:
|
|
a)
|
Lack of some disbursement by FITEL, provided THE CONTRACTOR has complied with all the obligations indicated in the Seventh Clause of the FINANCING CONTRACT and THE CONTRACTOR has corrected all the OBJECTIONS of the SUPERVISION REPORT; or,
|
|
b)
|
Non justified negative of FITEL to receive the INSTALLATION for a term greater than one hundred and twenty (120) DAYS; or,
|
|
c)
|
Before the delay of FITEL in the disbursement of a quota for more than one hundred and twenty (120) DAYS, for reasons not attributable to THE CONTRACTOR.
|
19.3.2
|
In such cases, THE CONTRACTOR will preserve the ownership of the ASSETS OF THE ACCESS NETWORK and of the TRANSPORTATION NETWORK and the disbursements effectively executed, prior reconciliation of balances; likewise, will endorse in favor of FITEL the insurance policies referred in Section 7.21 of the Seventh Clause of the FINANCING CONTRACT; and, FITEL will be obliged to return the PERFORMANCE BOND GUARANTEE OF THE FINANCING CONTRACT.
|
19.4
|
Termination by Mutual Agreement
|
|
Under this assumption, the PARTIES will perform the reconciliation of balances, if applicable.
|
|
In said assumption of termination, FITEL shall return the corresponding guarantee; likewise, the PARTIES declare that the payment for damages will not be claimed.
|
20.1
|
Prior to the termination of the FINANCING CONTRACT, the affected PARTY by the non compliance will send to the PARTY that has failed to comply, a notarial letter communicating the non compliance and terminating it of full right.
|
20.2
|
Regarding the assumptions foreseen in the nineteenth Clause of the FINANCING CONTRACT, FITEL may require to THE CONTRACTOR, to satisfy the provision subject matter of non compliance in a maximum term of fifteen (15) DAYS, and may establish higher terms attending exceptional circumstances upon determination of FITEL under penalty of terminating the FINANCING CONTRACT of full right according to the provisions set forth in Article 1429º of the Civil Code.
|
20.3
|
According to the provisions of Sections 3.20 and 3.21 of the third clause and Section 4.6. of fourth clause of the FINANCING CONTRACT in all cases of termination that are produced once the OPERATION PERIOD has begun and only in the case that FITEL requests it, THE CONTRACTOR must continue with the operation and maintenance for the term required by FITEL, which shall not exceed from eight (08) months, counted since the termination communication of the FINANCING CONTRACT, in order to guarantee the continuity of the Public Telecommunications Services. During said term, FITEL will continue delivering the corresponding financing for the proportional number of DAYS elapsed.
|
20.4
|
The indication made in the preceding section will be also of application for the assumption foreseen in literal a) of the paragraph 19.2.1 of the nineteenth Clause of the FINANCING CONTRACT, in which case, a temporary administration will be conformed of the AWARDED PROJECT composed by representatives of FITEL and will represent it before the Meeting of Creditors with the purpose to secure that THE CONTRACTOR continues with the provision of services established in this contract.
|
20.5
|
In all cases of termination of the FINANCING CONTRACT, a reconciliation of balances will be made until the termination date.
|
21.1
|
Is the stage of execution of the FINANCING CONTRACT that will be made within the last semester of the OPERATION PERIOD and that will culminate with the conclusion of the FINANCING CONTRACT by the compliance of its obligations.
|
21.2
|
For the CLOSURE OF THE FINANCING CONTRACT, the PARTIES shall perform the following activities:
|
|
i.
|
THE CONTRACTOR shall correct the OBJECTIONS formulated by FITEL, in a maximum term of sixty (60) DAYS since its notification.
|
|
ii.
|
Once the OBJECTIONS are corrected by THE CONTRACTOR, previously verified by FITEL, THE PARTIES within a maximum term of fifteen (15) DAYS, will reconcile the calculus and payment of penalties incurred by THE CONTRACTOR; and the financial liquidation of disbursements and payments to which the PARTIES are obliged.
|
|
iii.
|
Once the information referred in the preceding literal ii) is reconciled, THE PARTIES, shall subscribe the agreement referred in Section 21.3. of this clause.
|
21.3
|
The CLOSURE OF THE FINANCING CONTRACT will be formalized through the subscription of the corresponding agreement, in which the PARTIES declare that there are no outstanding obligations to comply and that the financial liquidation has been satisfactorily made.
|
21.4
|
On the ten (10) DAYS counted since the subscription of the agreement of the CLOSURE OF THE FINANCING CONTRACT, the last disbursement will be made and, later, in a maximum term of five (05) BUSINESS DAYS the corresponding guarantees will be returned.
|
21.5
|
In case of non compliance of the obligations for the CLOSURE OF THE CONTRACT, FITEL shall require to THE CONTRACTOR its compliance in a term no later than 15 DAYS, under penalty to terminate the FINANCING CONTRACT of full right, consequently it will forfeit the last disbursement and shall proceed to the execution of the PERFORMANCE BOND GUARANTEE OF THE FINANCING CONTRACT
|
22.1.
|
If there are controversies of any nature between THE CONTRACTOR and FITEL related or resulting from this FINANCING CONTRACT, that may not be settled by common agreement by both parties or if there is no mechanism of solution foreseen by this document, they will be decided by an arbitral tribunal in a legal arbitration.
|
22.2
|
The arbitration will be carried out by an Arbitral Tribunal composed by three (03) members.
|
22.3
|
The arbitration will be carried out according to the rules established in the Regulation of Arbitration of the Chamber of Commerce of Lima or in the Regulation of Arbitration of the Bar Association of Lima, of the AMCHAM or other chosen by FITEL or THE CONTRACTOR, according to the demand that comes from any of these parties.
|
22.4
|
The Arbitral Tribunal will be composed as follows:
|
|
•
|
Each one of the PARTIES will appoint one arbitrator and they by common agreement, shall appoint a third arbitrator, who will chair the Arbitral Tribunal.
|
|
•
|
In case one of the PARTIES does not appoint its arbitrator within a term of ten (10) DAYS counted since the date in which one of them declares to the other in written its will to submit to this clause, the arbitrator who has not been appointed, will be appointed by the institution that is in charge of the Management of the arbitration process.
|
|
•
|
In case the PARTIES do not appoint the third arbitrator within a term of sixty (60) DAYS counted since the appointment of the second arbitrator, the third arbitrator will be appointed by the institution that is in charge of the management of the arbitration process.
|
22.5
|
The Arbitral Tribunal shall have a term of ninety (90) BUSINESS DAYS since its installation to issue the corresponding arbitration award, which will be final. Likewise, the Tribunal may be in charge of accurately determining the controversy, and to grant an extension if necessary to issue the award.
|
22.6
|
The place of the arbitration will be the city of Lima. The language to be used in the arbitration process will be Spanish.
|
22.7
|
The Arbitral Tribunal, when issuing the arbitration award, shall determine the form in which the parties must assume the expenses and costs of the arbitration.
|
22.8
|
In case that any of the PARTIES decides to file an action for annulment against the arbitration award before the Judiciary, it must previously constitute in favor of the party or the opposite parties a Letter of Guarantee granted by a first category bank with headquarters in Lima, equivalent to US$ 100,000.00 (One hundred thousand and 00/100 DOLLARS OF THE UNITED STATES OF AMERICA), which will be Joint and several, irrevocable, unconditional and automatically enforceable in case said resource, in final judgment, were not declared well founded. Said Letter of Guarantee must be in force during the process and will be delivered in custody to a notary of the city of Lima.
|
22.9
|
THE FINANCING CONTRACT is subscribed according to the legal regulations of the Republic of Peru, reason by which any controversy resulting from its performance, interpretation, execution, validity and effectiveness will be governed by these legal regulations.
|
23.1
|
THE CONTRACTOR may assign the FINANCING CONTRACT, and transfer or subrogate, totally or partially, the obligations under its charge, prior favorable opinion of FITEL.
|
23.2
|
THE CONTRACTOR is obliged to deliver to FITEL the information it may require, for purposes of the assignment and/or transfer of the FINANCING CONTRACT.
|
23.3
|
In case FITEL approves the assignment, transfer or indicated subrogation, an addendum must be subscribed to the FINANCING CONTRACT.
|
23.4
|
The new contractor, must comply with the same requirements established in the TERMS and the matters that correspond to the FINANCING CONTRACT.
|
24.1
|
Integrant Parts of the Contract
|
|
a)
|
The FINANCING CONTRACT.
|
|
b)
|
The TECHNICAL PROPOSAL.
|
|
c)
|
The CIRCULARS.
|
|
d)
|
The TECHNICAL SPECIFICATIONS.
|
|
e)
|
The TERMS.
|
24.2
|
Waiver of Rights
|
24.3
|
Modification of the Contract
|
24.4
|
Revocation of Contract
|
24.5
|
Intellectual Property
|
25.1
|
All the notifications and communications related to the FINANCING CONTRACT, unless another mechanism or formality is expressly stated, will be made in written, and will be sent from and to the addresses, fax numbers and e-mails indicated in Section 25.3. of this clause, with the corresponding effects established in the same section.
|
25.2
|
Any of the PARTIES may modify the addresses, fax numbers and e-mails, prior communication in written to the other PARTY, sent in the form indicated in Section 25.4. of this clause, with the corresponding effects established in the same section.
|
25.3
|
All the notifications under the FINANCING CONTRACT will be delivered with acknowledgment of receipt, or with any other mechanism that credits the date of delivery of the notification, and will be effective on the date indicated in the corresponding acknowledgment of receipt.
|
25.4
|
Any change of data of FITEL or of THE CONTRACTOR must be made through written communication sent to the other PARTY by notary and have effect since the following day of the date indicated in the corresponding acknowledgment of receipt.
|
ANNEX Nº 1
|
:
|
BENEFICIARY LOCALITIES AND MANDATORY PAID INSTITUTIONS
|
ANNEX Nº 2
|
:
|
TECHNICAL PROPOSAL
|
ANNEX Nº 3
|
:
|
DEFINITIVE SCHEDULE OF THE ACTIVITIES OF THE CONTRACTOR
|
ANNEX Nº 4
|
:
|
ECONOMIC PROPOSAL
|
ANNEX Nº 6
|
:
|
ADVANCE GUARANTEE AND PERFORMANCE BOND OF THE FINANCING CONTRACT
|
ANNEX Nº 7
|
:
|
TECHNICAL SPECIFICATIONS
|
ANNEX Nº 8
|
:
|
TERMS THAT GOVERN THE BID
|
ANNEX Nº 9
|
:
|
CIRCULARS
|
ANNEX Nº 10
|
:
|
AFFIDAVIT OF RESPONSIBILITY
|
ANNEX N° 11
|
:
|
PROCEDURE OF CALCULUS FOR AVAILABILITY
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ANNEX N° 12
|
:
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FORMAT OF INVESTMENT COSTS OF THE ACCESS AND TRANSPORTATION NETWORK
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ANNEX N° 13
|
:
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GUIDELINES FOR THE CHANGE OF MANDATORY PAID INSTITUTIONS
|
|
-
|
That, will inform to FITEL about the implementation of THE AWARDED PROJECT through the participation of subcontractors or other forms of outsourcing.
|
|
-
|
That, assumes the responsibility of the compliance of the contractual obligations of the subcontractor or of other natural or legal persons with whom he shall subscribe outsourcing contracts for the implementation of the AWARDED PROJECT.
|
|
-
|
That, will not allege breach of subcontractors and of natural or legal persons with whom he shall subscribe outsourcing contracts to evade the obligations assumed in the FINANCING CONTRACT.
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Item
|
Description
|
Unit
|
Quantity
|
Unitary Price $
|
Unitary Price S/.
|
Total Price $
|
Total Price S/.
|
I
|
INFRASTRUCTURE OF STATIONS
|
||||||
Tower Type 1
|
|||||||
Tower Type 2
|
|||||||
Tower Type 3
|
|||||||
Tower Type 4
|
|||||||
Tower Type 5
|
|||||||
Anchor
|
|||||||
Support
|
|||||||
Others
|
|||||||
II
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ASSOCIATED CIVIL WORKS
|
||||||
Perimeter Enclosure
|
|||||||
Physical Edge security
|
|||||||
Booths
|
|||||||
Tower Base
|
|||||||
Inst. of support Bracket type for antenna of RF.
|
|||||||
Others
|
|||||||
III
|
MANPOWER
|
||||||
Installation of towers
|
|||||||
Associated civil works
|
|||||||
Material haulage
|
|||||||
Equipment haulage
|
|||||||
Others
|
|||||||
IV
|
LICENSES AND PERMITS
|
||||||
Municipal permits
|
|||||||
SERNANP
|
|||||||
CIRA
|
|||||||
Others
|
|||||||
V
|
Energy and security system of Stations
|
||||||
Place conditioning
|
|||||||
Batteries bank
|
|||||||
UPS
|
|||||||
Generators
|
|||||||
Fuel tank
|
|||||||
Electrical panels
|
|||||||
Rectifiers
|
|||||||
Ground
|
|||||||
Light facilities
|
|||||||
Lightning rod
|
|||||||
Solar panels
|
|||||||
Ground installation
|
|||||||
Electric network installation
|
|||||||
Others
|
Item
|
Description
|
Unit
|
Quantity
|
Unitary Price $
|
Unitary Price S/.
|
Total Price $
|
Total Price S/.
|
I
|
Optical Equipment
|
||||||
Switches and routers of connection to the transportation network
|
|||||||
Connectors
|
|||||||
Others
|
|||||||
II
|
Radio Equipment
|
||||||
Ptp Radios
|
|||||||
Base Radios
|
|||||||
AP Radios
|
|||||||
Antennas
|
|||||||
Connectors
|
|||||||
Amplifiers
|
|||||||
Others
|
|||||||
III
|
MANPOWER
|
||||||
Radios installation
|
|||||||
Network configuration
|
|||||||
Others
|
|||||||
IV
|
User Modules
|
||||||
Computers
|
|||||||
UPS
|
|||||||
Switch and cables
|
|||||||
Others
|
|||||||
V
|
Management Center
|
||||||
Management system of radios
|
|||||||
Management system of the electric part
|
|||||||
Management system of security and alarms
|
|||||||
Servers
|
|||||||
Others
|
Item
|
Description
|
Unit
|
Quantity
|
Unitary Price $
|
Unitary price S/.
|
Total Price $
|
Total Price S/.
|
I
|
Preparation of plans and methodology
|
||||||
Training
|
|||||||
Awareness
|
|||||||
WEB applications
|
|||||||
Others
|
|||||||
II
|
Execution of activities
|
||||||
Cost of training service
|
|||||||
Cost of awareness service
|
|||||||
Amounts of diffusion contracts. Servers, etc.
|
|||||||
Others
|
|||||||
III
|
Modules
|
||||||
Computers
|
|||||||
UPS
|
|||||||
Switch and cables
|
|||||||
Others
|
|||||||
IV
|
Management Center
|
||||||
Management System of Radios
|
|||||||
Management system of the electric network
|
|||||||
Management system of security and alarms
|
|||||||
Others
|
Item
|
Optical Fiber
|
Unit
|
Quantity
|
Unitary Price $
|
Unitary Price S/.
|
Total Price $
|
Total Price S/.
|
I
|
Acquisition
|
||||||
Optical Fiber x reel
|
|||||||
Optical Equipment (detail per type)
|
|||||||
Switches
|
|||||||
Connectors
|
|||||||
Others
|
|||||||
II
|
Nodes
|
||||||
Conditioning
|
|||||||
Cabinets
|
|||||||
Air conditioning system
|
|||||||
Fire system
|
|||||||
Cables
|
|||||||
Security system
|
|||||||
Others
|
|||||||
III
|
Manpower
|
||||||
Installation of fiber
|
|||||||
Equipment installation
|
|||||||
Others
|
|
1.
|
THE CONTRACTOR has the obligation to provide the service of access to Internet to each one of the MANDATORY PAID INSTITUTIONS located in the BENEFICIARY LOCALITIES according to Annex 01 of the FINANCING CONTRACT.
|
|
2.
|
The changes of the MANDATORY PAID INSTITUTIONS operate in the following cases:
|
|
2.1
|
That the MANDATORY PAID INSTITUTION already has the service of access to Internet and declares that it does not want to hire the service to THE CONTRACTOR at least during the INVESTMENT PERIOD of the AWARDED PROJECT.(This is during the INVESTMENT PERIOD of the ACCESS NETWORK and during the INVESTMENT PERIOD of the TRANSPORT NETWORK).
|
|
2.2
|
That the MANDATORY PAID INSTITUTION put impediments to the installation of the equipment for any none justified reason.
|
|
2.3
|
That for any reason, whether technical or by impediment of the population or authorities, among others, the station (POP) may not be installed that will supply the service to the BENEFICIARY LOCALITY, and in this case they should make the change of all the MANDATORY PAID INSTITUTIONS. In which case a change of BENEFICIARY LOCATION will take place.
|
|
2.4
|
In all the aforementioned cases, FITEL will assess and determine if said changes proceed, communicating to THE CONTRACTOR its approval.
|
|
3.
|
The MANDATORY PAID INSTITUTIONS of replacements may be proposed by THE CONTRACTOR and will be given preference according to the following considerations:
|
|
3.1
|
The replacements of the MANDATORY PAID INSTITUTIONS will be given preferably within the same BENEFICIARY LOCALITY.
|
|
3.2
|
The educational institutions may be only replaced by another educational institution, in this case THE CONTRACTOR may solicit FITEL the exchange for another academic institution located in another BENEFICIARY LOCATION
|
|
3.3
|
The MANDATORY PAID INSTITUTIONS different to the educational institutions may be replaced by police stations, posts, municipalities or others, in the same or different locality.
|
|
4.
|
In no case THE CONTRACTOR may require additional financing to FITEL basing it in the replacement of some MANDATORY PAID INSTITUTION or some BENEFICIARY LOCATION.
|
Messrs.
|
Present
.-
|
Reference:
|
Public Tender for the execution of the Projects “Broadband Installation for Comprehensive Connectivity and Social Development of the Apurímac Region”.
|
Dear Sirs:
|
TECHNICAL PROPOSAL
|
|||
COMPETITION FACTOR
|
UNITS
|
IN LETTERS
|
IN NUMBERS
|
Localities additional
|
Number
|
Thirty seven
|
37
|
Tablets
|
Number
|
Ninety six thousand seven hundred
|
96,700
|
ECONOMIC PROPOSAL
|
|||
COMPETITION FACTOR
|
UNITS
|
IN LETTERS
|
IN NUMBERS
|
FINANCING OF THE TRANSPORTATION NETWORK
|
US$
|
Twenty seven million seven hundred eight thousand and 00/100
|
27 708 000.00
|
ACCESS NETWORK FINANCING
|
US$
|
Fifty four million nine hundred fifty two thousand nine hundred fifty and 00/100
|
54 952 950.00
|
The figures will be written with a maximum of two (02) decimals.
|
|||
|
|||
BONUS FOR ADVANCEMENT PERFORMANCE OF THE INSTALLATION STAGE
|
|||
CALENDAR DAY
|
UNITS
|
IN LETTERS
|
IN NUMBERS
|
Number of calendar days reduction
|
calendar days
|
Sixty
|
60
|
Entity
|
:
|
CONSORCIO GILAT
SHORTLISTED BIDDER
|
Name
|
:
|
ARIEH GAD ROHRSTOCK
Legal Representative of SHORTLISTED BIDDER
|
Signature
|
:
|
…………………………………….
Legal Representative of SHORTLISTED BIDDER
|
Name
|
:
|
YVETH FIORELLA ROMERO GUIA
Legal Representative of SHORTLISTED BIDDER
|
Signature
|
:
|
…………………………………….
Legal Representative of SHORTLISTED BIDDER
|
1.1.
|
FITEL is a fund for the provision of universal access, meaning access in the national territory to a set of essential telecommunications services, capable of transmitting voice and data, which has, among its objectives, reducing the gap in access to telecommunications services in rural areas and in places considered of social interest.
|
1.2.
|
By Law No. 28900 was granted to FITEL the status of legal entity of public law. FITEL is assigned to the Transport and Communications Sector. The above mentioned law was regulated by Supreme Decree No. 010-2007 MTC.
|
1.3.
|
The Regulation for the Administration and Functions of the Telecommunications Investment Fund - FITEL, approved by Supreme Decree No. 036-2008-MTC
|
1.4.
|
The "Guidelines of the policy for the opening of the telecommunications market in Peru", approved by Supreme Decree No. 020-98-MTC, published on August 5
th
, 1998 and its amendments.
|
1.5.
|
Also, the "Guidelines of policies to promote greater access to Public Telecommunications Services in rural areas and places of preferential social interest", approved by Supreme Decree No. 049-2003-MTC published on August 17
th
, 2003, indicate that its goal is to accelerate the incorporation, under equal conditions, of populations in rural areas and of social interest, to the opportunities offered by Information Technology and Communication, promoting their integration into the public telecommunications network.
|
1.6.
|
By Supreme Decree No. 024-2008-MTC, published on August 16
th
, 2008, was approved the General Regulatory Framework to promote the development of Public Telecommunications Services in rural areas and places of social interest.
|
1.7.
|
Ministerial Resolution No. 224-2012 MTC/01, published on May 12
th
, 2012, whereby the Institutional Strategic Plan of Transportation and Communications Sector was approved, which establishes as one of the specific objectives "to promote the deployment of telecommunications infrastructure and services that enable connectivity and virtual integration of the country, prioritizing areas of social interest and borders"; specifying as target to achieve by 2016, that Peru has 100% districts served by at least one telecommunications service.
|
1.8.
|
Law N° 29904, Law for Promotion of Broadband and Construction of the National Fiber Optic Backbone Network stated as a public necessity and national interest, the construction of a National Fiber Optic Backbone Network which gathers together all the capitals of the provinces of the country and the deployment of high-capacity networks that integrate all districts to enable broadband connectivity fixed and/or mobile and mass distribution across the country, in terms of competition.
|
1.9.
|
With Supreme Decree No. 014-2013-MTC was approved the Regulation of Law No. 29904 – Law for Promotion of Broadband and the Construction of the National Fiber Optic Backbone Network.
|
1.10.
|
Law No. 30228, amending Law No. 29022 –Law to expand telecommunications infrastructure, called Law to enhance the expansion of Telecommunications Infrastructure.
|
1.11.
|
With Official Letter No. 1179-2014 MTC/24, dated July 2
nd
, 2014, PROINVERSIÓN was commissioned to prepare the TENDER for selecting the Operator who will be responsible for implementing the project “Installation of Broadband for Comprehensive Connectivity and Social Development of the Huancavelica Region”
|
1.12.
|
Supreme Resolution No. 038-2014_EF dated August 18
th
, 2014-EF, published on August 19
th
, 2014, whereby the resolution adopted at the meeting of the Steering Council of PROINVERSIÓN of July 14
th
, 2014, which incorporated to the process of Private Investment Promotion of the Project“Installation of Broadband for Comprehensive Connectivity and Social Development of the Huancavelica Region”
|
1.13.
|
Supreme Resolution No. 044-2014-EF, published on August 26
th
, 2014, ratified the agreement that determined the modality under which the private investment promotion in the Project "Installation of Broadband for Comprehensive Connectivity and Social Development of the Huancavelica Region”, will be established in paragraph a) of Article 2 of Legislative Decree No. 674; and the Agreement that approved the Promotion Plan of the Project.
|
1.14.
|
Under PROINVERSION Agreement No. 622-3-2014-CPC, dated August 27
th
, 2014 the Steering Council of PROINVERSION agreed to approve the Terms and Conditions of the Tender of the private investment promotion process for the implementation of the project: "Installation of Broadband for Comprehensive Connectivity and Social Development of the Huancavelica Region”.
|
1.15.
|
Under the Agreement of the PROINVERSION Energy and Hydrocarbons Committee - PRO CONNECTIVITY Committee, No. 233-4-2014-Telecommunications, dated December 1, 2014, the Consolidated Text of the tender process Terms and conditions was approved for the process of promotion of private investment for the execution of the project: " Installation of Broadband for Comprehensive Connectivity and Social Development of the Huancavelica Region " which incorporated the amendments to these rules which to date have been submitted to Bidders.
|
1.16.
|
Under the Agreement Proinversion No. 658-5-2015-CPC dated January 20
th
, 2015 the PROINVERSION Board agreed to approve the final version of the financing contract for the process of promotion of private investment for the execution of the project: “Installation of Broadband for Comprehensive Connectivity and Social Development of the Huancavelica Region ".
|
1.17.
|
By Resolutions of the Board of OSIPTEL No. 003-2015-CD / OSIPTEL and 004-2015-CD / OSIPTEL published with date January 11, 2015, the top rates of transport services and internet access were established respectively, corresponding to regional projects Fiber Optic backbone network
|
2.1
|
MINUTES OF AWARD OF THE NETWORK ACCESS ASSETS: It is the document prepared by FITEL whereby the CONTRACTOR transfers ownership of NETWORK ACCESS ASSETS to FITEL, AT THE END OF FINANCING AGREEMENT or when any assumption of Section Nineteenth occurs.
|
2.2
|
MINUTES OF AWARD OF TRANSPORTATION NETWORK ASSETS: The document through which the CONTRACTOR transfers to MTC, the ownership and control of the TRANSPORT NETWORK ASSETS, once the Concession Agreement has been signed between the MTC and the Concessionaire for the operation of the TRANSPORTATION NETWORK or when any of the assumptions of the nineteenth Clause of the FINANCING AGREEMENT occur. This act will be subscribed between the CONTRACTOR and FITEL who will subscribe it in representation of MTC
|
2.3
|
MINUTES OF CONFORMITY OF FACILITIES AND TESTING OF SERVICES OF ACCESS NETWORK: It is the document signed by the CONTRACTOR and FITEL by which the former accepts the results reported in the ACCESS NETWORK SUPERVISION REPORT corresponding to the installations performed. Also, with the signing of this document, compliance with the conditions laid down in the TECHNICAL SPECIFICATIONS, corresponding to the ACCESS NETWORK are certified. The model of the minutes is shown in Exhibit No. 4 ,annex 8B of the Terms and conditions and may be amended, being FITEL who finally determines its final content.
|
2.4.
|
MINUTES OF CONFORMITY OF THE INSTALLATION AND TESTING OF SERVICES OF THE TRANSPORTATION NETWORK: The document prepared by FITEL and signed by the CONTRACTOR and FITEL by which the former accepts the results stated in the TRANSPORTATION NETWORK SUPERVISION REPORT corresponding to the installations made. This document also certifies compliance with the conditions laid down in the TECHNICAL SPECIFICATIONS for total TRANSPORTATION NETWORK. The model of the minutes shown in Exhibit No. 5 of the Annex 8A of the terms and conditions and may be modified, being FITEL who finally determines its final content.
|
2.5.
|
INSTALLATION MINUTES OF NETWORK ACCESS: Is the document that indicates and credits compliance with the installation and operation of any infrastructure, equipment, hardware, software and other information needed to provide access to Internet and Intranet access offered by the ACCESS NETWORK. It is prepared by the CONTRACTOR, approved by FITEL, and signed by both. It is also an Affidavit.
|
2.6.
|
INSTALLATION MINUTES OF TRANSPORTATION NETWORK: Is the document that credits and indicates the compliance with the installation and operation of the major components of the TRANSPORTATION NETWORK. It is made by the CONTRACTOR for each node as well as for the Network Operations Center (NOC) and MAINTENANCE CENTER. The INSTALLATION MINUTES OF TRANSPORTATION NETWORK are signed by the CONTRACTOR and FITEL. It is also an Affidavit.
|
2.7.
|
EXPANSION OF THE AWARDED PROJECT: Is the incorporation of new BENEFICIARY LOCALITIES and/or district capitals, in the area of
influence of the project, which will involve additional subsidy of up to 20% of the FINANCING AWARDED, prior technical appraisal and approval of FITEL. Regarding the ACCESS NETWORK, this extension may be requested by any of the PARTIES within the ACCESS NETWORK INVESTMENT STAGE and regarding the TRANSPORTATION NETWORK within the first six (6) moths of the TRANSPORTATION NETWORK INVESTMENT STAGE.
|
2.8.
|
ACCESS NETWORK ASSETS: These are the assets comprised of metal structures, self-supporting towers, bases foundation, the lot where those structures are placed and all passive elements which make up the NETWORK ACCESS and will be owned and domain of FITEL after the signing of MINUTES OF AWARD OF NETWORK ACCESS ASSETS. The active equipment is owned and domain of the CONTRACTOR.
|
2.9.
|
TRANSPORTATION NETWORK ASSETS: Means all real or personal property that integrates the TRANSPORTATION NETWORK, according to the provisions of the TECHNICAL SPECIFICATIONS of the TRANSPORT NETWORK. These assets will be owned by MTC after the signing of MINUTES OF AWARD OF THE TRANSPORTATION NETWORK ASSETS between the CONTRACTOR and FITEL, who will subscribe the act representing the MTC.
|
2.10.
|
CLOSURE OF THE FINANCING AGREEMENT: It’s the process by which the PARTIES agree the completion of their contractual rights and obligations. This procedure will take place during the second half of OPERATION PERIOD; as such, it will be understood as a stage within this period.
|
2.11.
|
FINANCING AGREEMENT: It is the legal relationship held between FITEL and the CONTRACTOR, whose purpose is to regulate:
|
|
a)
|
The installation of the TRANSPORTATION NETWORK and ACCESS NETWORK according to what is stated in the relevant TECHNICAL SPECIFICATIONS;
|
|
b)
|
The operation and maintenance of the ACCESS NETWORK according to what is stated in the TECHNICAL SPECIFICATIONS;
|
|
c)
|
The implementation of CAPACITY BUILDING; and
|
|
d)
|
The use of the AWARDED FUNDING for implementing the Awarded Project.
|
|
e)
|
The disbursement of the AWARDED FUNDING to the CONTRACTOR by- FITEL
|
2.12.
|
DAYS: It should be understood as calendar days (working days, non-working and holidays), unless expressly stipulated otherwise.
|
2.13.
|
WORKING DAYS: It should be understood to days other than Saturday, Sunday or nonworking holiday in the city of Lima (including non-working days for the public administration). Also understood as holidays, those calendar day on which banks in the city of Lima, are not obliged to serve the public by order of governmental authority; and holidays established by the competent authority of the
Huancavelica Region.
|
2.14.
|
The CONTRACTOR: Is the legal entity awarded the tender with whom FITEL signs this FINANCING AGREEMENT and who will implement the AWARDED PROJECT.
|
2.15.
|
INSTALLATION STAGE: The time in which the CONTRACTOR displays the infrastructure, equipment and other items in the ACCESS NETWORK and TRANSPORTATION NETWORK fulfilling the provisions of the TECHNICAL SPECIFICATIONS. The deadline for completion of this stage is the indicated in the Technical Proposal, which shall not be less than 10 months nor more than 12 months since the DATE OF CLOSURE.
|
2.16.
|
DATE OF CLOSURE: The date, place and time to be carried out the acts set forth in Paragraph 11.3 of the TERMS AND CONDITIONS.
|
2.17.
|
FINANCING AWARDED: Is the amount of the FINANCING granted for the TRANSPORTATION NETWORK and ACCESS NETWORK that corresponds to the the AWARDED PROJECT, as provided in the Technical Proposal in accordance with the TECHNICAL SPECIFICATIONS. This includes all applicable taxes and contributions to the MTC, FITEL and OSIPTEL. (which are established in the TUO of the Telecommunications Act approved by Supreme Decree No. 013-93-TCC, in the TUO of the General Regulation of the Telecommunications Act, approved by Supreme Decree No. 020-2007-MTC and its amendments, such as fee for commercial exploitation of service and contribution to FITEL, as well as the contribution by regulation to OSIPTEL established by Law No. 27332 in accordance with Supreme Decree No. 103-2003-PCM and Supreme Decree No. 012-2002-PCM, as amended, or the rules that substitute.
|
2.18.
|
ACCESS NETWORK FINANCING: Is the non-refundable amount recorded in the ECONOMIC PROPOSAL expressed in US$ and which FITEL must deliver to the CONTRACTOR as part of its obligations as stipulated in the FINANCING AGREEMENT. This includes the necessary financing for the CONTRACTOR to acquire, install, operate and maintain and run the THE ACCESS NETWORK and implements the CAPACITY BUILDING, providing all the services involved in the Technical Proposal in accordance with the TECHNICAL SPECIFICATIONS. This includes all applicable taxes and contributions to the MTC, OSIPTEL and FITEL. (which are established in the TUO of the Telecommunications Act approved by Supreme Decree No. 013-93-TCC, in the TUO of the General Regulation of the Telecommunications Act, approved by Supreme Decree No. 020-2007-MTC and its amendments, such as fee for commercial exploitation of service and contribution to FITEL, as well as the contribution by regulation to OSIPTEL established by Law No. 27332 in accordance with Supreme Decree No. 103-2003-PCM and Supreme Decree No. 012-2002-PCM, as amended, or the rules that substitute)
|
2.19.
|
FINANCING OF THE TRANSPORTATION NETWORK: Is the non-refundable amount recorded in the ECONOMIC PROPOSAL expressed in US$ and which FITEL shall deliver to the CONTRACTOR as part of its obligations as stipulated in the FINANCING AGREEMENT. Includes the necessary financing for the CONTRACTOR to purchase and install the TRANSPORTATION NETWORK in line with the TECHNICAL SPECIFICATIONS. This includes all taxes.
|
2.20.
|
ADVANCE PAYMENT GUARANTEE: The joint and several, unconditional, irrevocable letter of guarantee, without benefit of excussionnn or division, and automatic enforceable on behalf of FITEL, that the CONTRACTOR shall deliver on the CLOSING DATE to ensure the correct use of first disbursement of the FINANCING OF THE ACCESS NETWORK and the TRANSPORT NETWORK in accordance with the provisions of this FINANCING AGREEMENT. It must be issued in accordance with the conditions established in the TERMS AND CONDITIONS.
|
2.21.
|
PERFORMANCE BOND OF THE FINANCING AGREEMENT: Is the joint and several, unconditional, irrevocable letter of guarantee, without benefit of excussio or division, and of automatic enforceable on behalf of FITEL, that the CONTRACTOR shall deliver at the CLOSING DATE, in order to support the compliance with obligations under the FINANCING AGREEMENT. It must be issued in accordance with the conditions established in the TERMS AND CONDITIONS.
|
2.22.
|
MANDATORY PAID INSTITUTION: Is the public institution referred to in Exhibit 8B of the TERMS AND CONDITIONS, in which the CONTRACTOR undertakes to install the necessary equipment and provide services of the AWARDED PROJECT during the term of the FINANCING AGREEMENT.
|
2.23.
|
APPLICABLE LAW: These are the standards listed in Paragraph 1.4. of the TERMS AND CONDITIONS, including its amendments, and any other according to the Peruvian laws applicable.
|
2.24.
|
BENEFICIARY LOCALITIES: are the locations where the CONTRACTOR, according to the terms of this FINANCING AGREEMENT, must install, operate and maintain the services offered in AWARDED PROJECT. These areas are included in the list contained in Exhibit 1 of this FINANCING AGREEMENT. The ADDIOTIONAL BENEFICIARY LOCALITIES offered by the CONTRACTOR become BENEFICIARY LOCALITIES from the moment of the signing of the FINANCING CONTRACT.
|
2.25.
|
MTC: Is the Ministry of Transportation and Communications.
|
2.26.
|
APPLICABLE REGULATIONS: These are the APPLICABLE LAWS and any other that, under the law, is applicable to the performance of the FINANCING AGREEMENT, including standards of quality and continuity of services and the tax regime applicable to taxpayers in the country and taxpayers of local and regional governments in the country that is not governed by FINANCING AGREEMENT.
|
2.27.
|
PARTY: FITEL or the CONTRACTOR, as applicable.
|
2.28.
|
PARTIES: FITEL and the CONTRACTOR equally.
|
2.29.
|
INVESTMENT PERIOD OF THE ACCESS NETWORK: It is the period, the maximum length is fourteen (14) months from the CLOSING DATE, comprising the activities referred to in INSTALLATION STAGE and supervision activities to approve the installations made, referred to in the TECHNICAL SPECIFICATIONS OF THE ACCESS NETWORK; finishing with the signing of the MINUTES OF CONFORMITY OF FACILITIES AND TESTING OF SERVICES OF THEACCESS NETWORK.
|
2.30.
|
INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK: is the period, which maximum length is fourteen (14) months from the CLOSING DATE, comprising the activities covered by the INSTALLATION STAGE and monitoring activities to give according to installations made as referred to in the TECHNICAL SPECIFICATIONS OF THE TRANSPORTATION NETWORK; culminating with the signing of the MINUTES OF CONFORMITY OF FACILITIES AND TESTING OF SERVICES OF THE TRANSPORTATION NETWORK.
|
2.31.
|
PERIOD OF OPERATION: The duration of one hundred twenty (120) months from the day following the completion of the ACCESS NETWORK NVESTMENT PERIOD. In which the CONTRACTOR will operate and maintain the ACCESS NETWORK to ensure its operation and provision of services comprising the AWARDED PROJECT. In this period of time,the services will be provided commercially.
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2.32.
|
TRIAL PERIOD: The time when THE CONTRACTOR will operate and maintain, if applicable, the TRANSPORTATION NETWORK for the exclusive use of the AWARDED PROJECT and allow the operation of the ACCESS NETWORK. This period shall not exceed twelve (12) months, which start from the day following the completion of the TRANSPORTATION NETWORK INVESTMENT PERIOD, culminating with the signing of MINUTES OF AWARD OF THE TRANSPORTATION NETWORK ASSETS.
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2.33.
|
PROINVERSIÓN: Private Investment Promotion Agency, an organization referred to in Law No. 28660 and the Ministerial Resolution No. 083-2013-EF/10 or regulations that substitute them.
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2.34.
|
AWARDED PROJECT: Is the PROPOSAL of the QUALIFIED BIDDER declared the winner of the Award by the COMMITTEE
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2.35.
|
ACCESS NETWORK: The telecommunications network implemented according to the criteria in the appropriate TECHNICAL SPECIFICATIONS, which allows the end user to access the public telecommunications services and access to intranet of the AWARDED PROJECT, using the TRANSPORTATION NETWORK.
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2.36.
|
TRANSPORTATION NETWORK: This is the high-speed network of availability and reliability, designed based on the laying of fiber optic redundancy scheme and points of presence in the district capitals, as provided in Section 7.4 of Article 7 of law No. 29904. This will be deployed by the CONTRACTOR in the BENEFICIARY LOCATIONS.
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2.37.
|
UIT: It is the Tax Unit
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3.1.
|
The CONTRACTOR states that is a legal entity duly incorporated under the regulations of the Republic of Peru, having proved its existence and its representation according to law and is duly authorized and able to assume the obligations under the FINANCING AGREEMENT to exercise technical, commercial and financial activities, in the implementation of the AWARDED PROJECT.
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3.2.
|
The CONTRACTOR acknowledges and agrees that it is the decisive reason of FITEL for the celebration of the FINANCING AGREEMENT that, in the terms stipulated therein, in their Technical Proposal and in the TECHNICAL SPECIFICATIONS, the CONTRACTOR must perform the design, procurement and installation of networks, equipment and access services to the Internet and Intranet, to implement CAPACITY BUILDING, and keep them in operational terms, performing the corresponding preventive, predictive and corrective maintenance, so that the Peruvian State has the deployed optical fiber in the case of TRANSPORTATION NETWORK and that the BENEFICIARY LOCATIONS and MANDATORY PAID INSTITUTIONS have the infrastructure and equipment properly installed and fully operational in the case of ACCESS NETWORK.
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3.3.
|
The CONTRACTOR has the authorization certificates that allow it to provide the services to which it is bound according to the TECHNICAL SPECIFICATIONS.
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3.4.
|
The CONTRACTOR is committed to install the networks OF THE AWARDED CONTRACT and provide the services in the quality conditions established in the TECHNICAL SPECIFICATIONS.
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3.5.
|
The CONTRACTOR states that its representative, who signs the FINANCING AGREEMENT, is duly authorized, that its subscription has been authorized by its Board of Directors (or the highest authority of the company) and, with his signature, requires no further action or approval to ensure their validity and to comply with the obligations in the same.
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3.6.
|
The CONTRACTOR states that for the subscription of the FINANCING AGREEMENT and compliance with contractual obligations, it does not require legal authorization or regulatory authority of any foreign country in which any of its shareholders is incorporated or has its principal place of business and which is not contrary to any law or regulation in such country.
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3.7.
|
The CONTRACTOR states that to fulfill the FINANCING AGREEMENT there are no:
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|
•
|
Laws, statutes, regulations, rules, orders, judgments, awards, resolutions, administrative sanctions or restrictions by any authority, provisions in the statutes or regulations of the CONTRACTOR, covenants, contracts, agreements or other acts or events of any nature that are binding on the CONTRACTOR or affecting its affiliates or subsidiaries or their property or prohibit, restrict, limit, oppose, affect, impair, or in any way impede the execution and performance of the terms and conditions of the FINANCING AGREEMENT.
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|
•
|
Neither actions, suits, investigations, litigation or proceedings pending or threatened before courts, arbitral court or governmental authority; that prohibit, restrict, limit, oppose, affect, impair, or in any way prevent the execution and performance of the terms and conditions of the FINANCING AGREEMENT.
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3.8.
|
The CONTRACTOR acknowledges and agrees that the nature and regime of the FINANCING AGREEMENT determines that, although during their term changes in the APPLICABLE REGULATIONS occur, including changes in the regulation of the telecommunications sector and the tax regime affecting its business and/or economic performance, such circumstances do not give you the right to claim or requests for modifications to the FINANCING AGREEMENT under the assumptions of economic-financial hardship or other provision of legal concepts of a similar nature, either before the FITEL, its officers or other State agency.
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3.9.
|
The CONTRACTOR recognizes that directly or indirectly has the economic, financial and technical capacity to perform the obligations under the FINANCING AGREEMENT and other obligations under the TECHNICAL SPECIFICATIONS and those obligations arising from the PROPOSAL under which was declared AWARDEE of the PROJECT INSTALLATION OF BROADBAND FOR COMPREHENSIVE CONNECTIVITY AND SOCIAL DEVELOPMENT OF THE HUANCAVELICA REGION”
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3.10.
|
The CONTRACTOR states having no impediment to contract pursuant to Article 1366º regulated by the Civil Code and that is not administratively sanctioned with temporary or permanent disqualification from exercising their rights to contract with the State.
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3.11.
|
In the event that, after the signing of the FINANCING AGREEMENT, false statements in the preceding paragraphs are established, it will be terminated automatically, by operation of law, applying the provisions of the nineteenth Clause, proceeding FITEL to enforce the guarantees to be granted under this FINANCING AGREEMENT.
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3.12.
|
The CONTRACTOR agrees to transfer ownership and control of the TRANSPORTATION NETWORK ASSETS on behalf of the MTC, with the signing of MINUTES OF AWARD OF THE TRANSPORTATION NETWORK ASSETS. This act will be subscribed between THE CONTRACTOR and FITEL, who will subscribe it representing MTC.
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3.13.
|
The CONTRACTOR is obliged to transfer the ownership and control of the ACCESS NETWORK ASSETS in favor of the FITEL with the signing of the MINUTES OF AWARD OF THE NETWORK ACCESS ASSETS.
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3.14.
|
The costs generated until the date the transfer mentioned in the preceding paragraph and the corresponding ones made until the date of the TRASPORTATION NETWORK become effective shall be borne by the CONTRACTOR. Costs incurred from the day after the transfer has become effective shall be borne by the owner hired over the operation of the ACCESS NETWORK.
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3.15.
|
The necessary administrative expenses for the transfer shall be borne by THE CONTRACTOR.
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3.16.
|
The CONTRACTOR states that it has conducted its own studies, research, projections and therefore is considered knowledgeable of all the elements needed to make the decision to assume fully its obligations under the FINANCING AGREEMENT.
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3.17.
|
The CONTRACTOR acknowledges the areas where the networks will be installed, so it expressly disclaims making any claim or action against FITEL or other competent authority derived from inadequate site conditions or any other circumstances related the subject matter of this FINANCING AGREEMENT.
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3.18.
|
The CONTRACTOR admits it has developed its business plan taking into account the studies and assumptions it deemed appropriate, according to which it has prepared his TECHNICAL and ECONOMIC PROPOSAL and required the FUNDING AWARDED. It also states that the business plan has not been known by FITEL or PROINVERSIÓN, which shall have no responsibility for any difference between it and the actual results of the implementation of the AWARDED PROJECT. In that sense, the CONTRACTOR declares that it assumes the risk arising from the differences between its business plan and actual results of the implementation of the AWARDED PROJECT.
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3.19.
|
The CONTRACTOR acknowledges and agrees that the total amount of the FINANCING AWARDED, is sufficient to fulfill the obligations of the FINANCIAL AGREEMENT and those derived from the PROPOSAL due to which it became the AWARDEE of the PROJECT“Installation of Broadband for Comprehensive Connectivity and Social Development of the Huancavelica Region "
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3.20.
|
The CONTRACTOR, by this statement and only in the case of ACCESS NETWORK, undertakes to continue the operation and maintenance of the AWARDED PROJECT in all cases of termination of the FINANCING AGREEMENT under the terms stated in Clauses of the FINANCING AGREEMENT; this statement constitutes a unilateral promise referred to under Article 1956 of the Peruvian Civil Code.
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3.21.
|
The CONTRACTOR acknowledges and agrees that FITEL has taken note of the statement referred to in the preceding paragraph and that the signing of this FINANCING AGREEMENT is not only an express consent but a prior agreement to the second paragraph of Article 1956 and Article 1957 of the Civil Code, respectively, so that said unilateral promise has been validly made
and is fully enforceable.
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3.22.
|
The CONTRACTOR states that the CLOSING DATE, its capital stock is the one established in the TERMS AND CONDITIONS. and, on that date, has fully subscribed the total of shares forming its share capital, having paid at least 25% of the nominal value of the shares, as applicable, in accordance with Article 52 of the General Law Corporations, Law N ° 26887
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3.23.
|
The CONTRACTOR acknowledges and agrees that the operation of the TRANSPORT NETWORK during the TRIAL PERIOD is temporary and provisional; being restricted to use the TRANSPORTATION NETWORK to provide value added public telecommunications service.
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4.1.
|
The signing of the FINANCING AGREEMENT and compliance with the obligations and rights of FITEL in it shall conform to the APPLICABLE RULES and regulations governing its operation and in general, the legal system of Peru.
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4.2.
|
FITEL states that to the subscription of the FINANCING AGREEMENT has the knowledge and authorization of its governing bodies and that its legal representative has sufficient skills and powers to celebrate it, so as to generate obligations and valid, binding and enforceable rights for both parties
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4.3.
|
FITEL states that the AWARDED FUNDING and, if applicable, the EXTENSION of the AWARDED PROJECT is duly authorized and has sufficient economic resources for disbursements agreed in the FINANCING AGREEMENT.
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4.4.
|
FITEL states to have the skills, legal and operational instruments for making the necessary supervision and that, as long as the CONTRACTOR fulfill its obligations, shall authorize and make disbursements under the FINANCING AGREEMENT.
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4.5.
|
The supervision corresponding to the OPERATION PERIOD of the ACCESS NETWORK shall be made solely for one hundred twenty (120) months. After this deadline, the legal regime for supervision will be established in the Concession Agreement of the CONTRACTOR, according to APPLICABLE RULES.
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4.6.
|
FITEL acknowledges and accepts that it has become aware of the statement of THE CONTRACTOR referred to in paragraph 3.20 of the Third Clause and the signing of this FINANCING AGREEMENT is not only express but also prior agreement referred to the second paragraph of Article 1956 and Article 1957 of the Civil Code, respectively, so that unilateral promise has been validly made
and is fully enforceable.
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|
a)
|
The installation of the TRANSPORTATION NETWORK and ACCESS NETWORK according to what is stated in the TECHNICAL SPECIFICATIONS;
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|
b)
|
The operation and maintenance of the ACCESS NETWORK according to what is stated in the TECHNICAL SPECIFICATIONS, providing access to the Internet and intranet to the BENEFICIARY LOCALITIES and MANDATORY PAID INSTITUTIONS contained in Exhibit No. 1 of this FINANCING AGREEMENT,;
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|
c)
|
The implementation of CAPACITY BUILDING; defined as such in paragraph 1.3.11 of the TERMS AND CONDITIONS
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|
d)
|
The use of FUNDING AWARDED for implementing the Project.
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6.1.
|
The FINANCING AGREEMENT shall remain in force equal to the sum of the INVESTMENT PERIOD OF THE ACCESS NETWORK, INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK and the OPERATION PERIOD until the completion of the last disbursement; unless earlier terminated in response to the cases provided for in this FINANCING AGREEMENT.
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6.2.
|
The INVESTMENT PERIOD shall not exceed fourteen (14) months from the day after the CLOSING DATE. However, it may be extended upon approval of FITEL and formalized by addendum to this FINANCING AGREEMENT.
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6.3.
|
The OPERATION PERIOD shall not be less than one hundred twenty (120) months from the day following the completion of the INVESTMENT PERIOD.
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6.4.
|
The term of the FINANCING AGREEMENT may be extended provided there is proper justification and for the enforcement of the purposes stated in the fifth clause of this contract by addendum signed by FITEL and the CONTRACTOR.
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6.5.
|
The PARTIES shall comply with the applicable procedure to the stage of CLOSURE of the FINANCING AGREEMENT.
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6.6.
|
At the end of the term of the FINANCING AGREEMENT, by the conclusion of the deadline stated in paragraphs 6.2 and 6.3 of this Clause, the CONTRACTOR shall continue the obligations of a telecommunications operator stipulated in their respective concession contracts, which are signed with the Ministry of Transportation and Communications, and/or any holder of a registration or authorization for the provision of value added services.
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7.1.
|
To use the AWARDED FUNDING for the design, construction and installation of the TRANSPORTATION NETWORK; well as for the design, equipment procurement, transportation, installation, commissioning, operation and maintenance of the ACCESS NETWORK that will allow to provide Internet and Intranet access services in the BENEFICIARY LOCALITIES and MANDATORY PAID INSTITUTIONS contained Exhibit No. 1 of the FINANCING AGREEMENT, and to the implementation of capacity building activities, fulfilling the conditions laid down in the TECHNICAL SPECIFICATIONS, the content of the AWARDED PROJECT and all commitments by the CONTRACTOR in its TECHNICAL PROPOSAL included in Exhibit No. 2 FINANCING AGREEMENT.
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7.2.
|
To meet the deadlines and targets set out in the FINAL SCHEDULE OF ACTIVITIES of the CONTRACTOR, provided in Exhibit No. 3 FINANCING AGREEMENT, except in cases of extensions determined in accordance with this FINANCING AGREEMENT.
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7.3.
|
Comply with the obligations in the TECHNICAL SPECIFICATIONS and appendices.
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7.4
|
To comply with the commitments made in its TECHNICAL PROPOSAL, Exhibit No. 2 of the FINANCING AGREEMENT.
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7.5
|
Repair of damage because of the material and/or equipment that will serve to implement the AWARDED PROJECT contained in the Technical Proposal, as well as their replacement, if applicable, will be the responsibility of the CONTRACTOR without requiring any further disbursement by FITEL. This obligation shall apply during the term of FINANCING AGREEMENT and, if applicable, its extensions.
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7.6.
|
Responsibility for repairing any damage caused in the BENEFICIARY LOCALITIES and MANDATORY PAID INSTITUTIONS arising from the direct activities of the CONTRACTOR and/or third parties engaged by it for the execution of the AWARDED PROJECT, whether public roads, highways, bridges, public and private premises and others are affected during the transportation, installation, operation and maintenance of the ACCESS NETWORK and the installation of the TRANSPORTATION NETWORK. In that sense, the CONTRACTOR shall indemnify FITEL and MTC, if applicable; and be accountable for any act or omission, willful, negligent or without fault, the staff involving damage to the latter; including those acts or omissions made by the staff of its contractors.
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7.7.
|
To give training courses in Peru and in the country of production of the main transmission equipment and infrastructure (optical fiber) used in the ACCESS NETWORK and TRANSPORTATION NETWORK, respectively.
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7.8.
|
Provide all facilities for FITEL, or its designee, fulfill its duties and obligations under the AWARDED PROJECT.
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7.9.
|
Provide all information related to the AWARDED PROJECT required by FITEL, or its designee, to fulfill its duties, for which a term will be provided for the CONTRACTOR to comply with it.
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7.10.
|
To submit the FINAL SCHEDULE OF ACTIVITIES OF THE ACCESS NETWORK and FINAL SCHEDULE OF ACTIVITIES OF THE TRANSPORTATION NETWORK within the period specified in the TECHNICAL SPECIFICATIONS for both networks.
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7.11.
|
Whenever the CONTRACTOR carries out promotional activities and advertising of the AWARDED PROJECT, it must refer to the Peruvian State represented by FITEL and the MTC during the term of the FINANCING AGREEMENT.
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7.12.
|
To manage, obtain before administrative authorities, municipal or otherand maintain current licenses, permits, registrations and other authorizations required for the deployment of infrastructure and for the provision of Internet service and intranet access offered in the AWARDED PROJECT. In this regard, it is expressly stated that cooperation by the FITEL indicated in Paragraph 8.3 of the Financing Agreement is only of means and not results of, so the CONTRACTOR cannot claim the unsuccessful outcome of this cooperation as grounds that waives it from the breach of the obligations contained in the FINANCING AGREEMENT.
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7.13.
|
Comply with all APPLICABLE RULES and LAWS for the execution of the FINANCING AGREEMENT.
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7.14.
|
To fulfill its obligations under the concession contract signed with the MTC
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7.15.
|
To meet the payment of its contributions to the special right to FITEL under Article 12° of the TUO of the Telecommunications Law approved by the Supreme Decree No. 013-93-TCC, as amended.
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7.16.
|
In the case of ACCESS NETWORK, THE CONTRACTOR undertakes to meet the demand of the towns of Huancavelica region, where the coverage of this network allows the provision of services under the AWARDED PROJECT. This obligation will be performed under the same conditions in AWARDED PROJECT, without incurring additional financing.
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7.17.
|
To submit for the satisfaction of FITEL, disaggregated information of investment costs for the ACCESS NETWORK and TRANSPORTATION NETWORK duly accredited as stated in Exhibit Nº11 of this agreement within the first half of the PERIOD OF OPERATION. This information will have no implications on the FUNDING AWARDED.
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7.18.
|
To submit to FITEL semiannually the operating cash flow of the AWARDED PROJECT during the term of the FINANCING AGREEMENT. The delivery of this information does not alter the amount of FINANCING AWARDED. Additionally, FITEL may request the accreditation of the operating cash flow.
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7.19.
|
To allow FITEL to verify the destination and use of the FUNDING AWARDED during the term of the FINANCING AGREEMENT.
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7.20.
|
To keep up to the CLOSING DATE, fully subscribed the total of shares making up the share capital and paid at least 25% of the nominal value of the shares, as applicable, in accordance with the provisions of Article 52 ° of the General Corporation Law, Law No. 26887.
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7.21.
|
It will be responsible for contracting and retaining existing insurance policies in force on ASSETS and elements of the ACCESS NETWORK and TRANSPORTATION NETOWRK assuming the costs of each and every one of the deductibles and / or coinsurance that it engaged in insurance policies purchased in fulfilling this obligation.
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7.22.
|
It shall not be relieved of the obligation to comply with the installation of networks claiming defects, errors or omissions in the TECHNICAL SPECIFICATIONS
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7.23.
|
Respect the right of patent, design and/or copyright protected in the country of manufacture of the elements for the ACCESS NETWORK and TRANSPORTATION NETWORK.
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7.24.
|
The CONTRACTOR assumes responsibility for the acts, failures, omissions, or in general, any breach incurred by manufacturers or other subcontractors employed by it who may be involved in the execution of the FINANCING AGREEMENT.
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7.25.
|
Subscribe for the duration of the FINANCING AGREEMENT, contract models set out in Appendix No. 5-A and 5-B of Exhibit 8B of the TERMS AND CONDITIONS.
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7.26.
|
To assume for the duration of FINANCING AGREEMENT and even during additional period referred to in Paragraph 20.3 of the FINANCING AGREEMENT, the liability to FITEL of maintaining the operability and functionality of all ASSETS and elements of the ACCESS NETWORK so that the quality and conditions stated in its Technical Proposal and in the TECHNICAL SPECIFICATIONS are guaranteed for the provision of public telecommunications services and ensure access to Intranet.
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7.27.
|
During the term of the FINANCING AGREEMENT and even during additional period referred to in Paragraph 20.3 of the FINANCING AGREEMENT, the CONTRACTOR is required to perform corrective maintenance activities, predictive and preventive ASSETS and elements of the ACCESS NETWORK. This includes the obligation to make the replacement, renewal, rehabilitation and / or adaptations made
to ASSETS and items included in the networks; without that requirement implies the right to require FITEL additional resources to FUNDING AWARDED.
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7.28.
|
It is responsible to FITEL, and third parties, as appropriate, for the proper management and use of ASSETS and elements of the ACCESS NETWORK, and the inherent risk to them.
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7.29.
|
From the CLOSING DATE and until the transfer of ACCESS NETWORK assets on behalf of FITEL is made stated in this contract, the CONTRACTOR will be solely responsible and liable to pay taxes, fees and contributions that apply in relation to ASSETS and elements of the ACCESS NETWORK in accordance with applicable rules, considering among these regulations the provisions of the Consolidated Text of the Municipal Taxation Law, approved by Supreme Decree No. 156- EF-2004 or its amendment. In the case of TRANSPORT NETWORK, this obligation of THE CONTRACTOR is maintained until its transference to the MTC, in accordance with the provisions of this FINANCING CONTRACT.
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7.30.
|
To ensure that the ACCESS NETWORK and TRANSPORTATION NETWORK ASSETS are only subject to the provision of the services referred to in AWARDED PROJECT. Consequently, they cannot be transferred, or in general subject to liens or encumbrances of any kind.
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7.31.
|
Transferring ownership in favor of FITEL, of the ACCESS NETWORK ASSETS according to the conditions of this contract and in paragraph D of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK contained in Exhibit 8-B of the TERMS AND CONDITIONS.
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7.32.
|
Temporarily and tentative operate the TRANSPORTATIONNETWORK during the TRIAL PERIOD until the subscription of the MINUTES OF AWARD OF TRANSPORTATION NETWORK ASSETS under the conditions of this contract.
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7.33.
|
Transfer in favor of MTC the property and domain of the TRANSPORTATION NETWORK, under the conditions of this AGREEMENT
|
7.34.
|
To assume custody and responsibility for the integrity and legal physical sanitation of the TRANSPORTATION NETWORK until the delivery thereof to the concessionaire in charge of the operation of the TRANSPORTATION NETWORK to be selected in the private investment promotion process of PROINVERSIÓN.
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7.35.
|
To maintain the insurance policy of the TRANSPORTATION NETWORK ASSETS in force until the delivery of the same to the concessionaire in charge of the operation assuming the costs of each and every one of the deductibles and / or coinsurance that engaged in insurance policies purchased in fulfilling this obligation.
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7.36.
|
To negotiate and subscribe infrastructure share-use agreements with, electricity, hydrocarbons or railway companies as well as to obtain permits, rights of way, step and use poles necessary to install the necessary infrastructure and for the deployment of the ACCESS NETWORK and TRANSPORTATION NETWORK; as well as, to establish agreements for the use of existing pipelines and install new pipelines were deemed necessary.
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7.37.
|
Without prejudice to the provisions in the APPLICABLE LAWS and REGULATIONS, the CONTRACTOR shall provide to the MTC, FITELand operation concessionaire of the TRANSPORTATION NETWORK all facilities they require in order to facilitate the procurement and commissioning of AWARDED PROJECT.
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7.38.
|
To fulfill all other obligations under the FINANCING AGREEMENT, it’s Exhibits and the TECHNICAL SPECIFICATIONS in CIRCULARS and the TERMS AND CONDITIONS.
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8.1.
|
To disburse the FUNDING AWARDED to the CONTRACTOR when it has fulfilled the obligations and provisions required in the FINANCING AGREEMENT. Disbursements will be made in accordance with the conditions set out in Clause fourteenth of the FINANCING AGREEMENT.
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8.2.
|
To exercise, directly or through a third natural or artificial, public or private person, shares of supervision, monitoring and control of facilities and test infrastructure, equipment and services under the FINANCING AGREEMENT.
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8.3.
|
FITEL shall cooperate with the CONTRACTOR for the proper performance of the FINANCING AGREEMENT. To this end, FITEL, where warranted, will use its best efforts to coordinate with the relevant authorities, issuing licenses, permits and other managed by THE CONTRACTOR and that are required for execution of the FINANCING AGREEMENT.
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8.4.
|
To ensure proper use of the FUNDING AWARDED and compliance with the terms of the FINANCING AGREEMENT.
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8.5.
|
To make written submissions on the matters covered by the FINANCING AGREEMENT, within the time stated therein, as well as other applications, to be within the scope of powers of the CONTRACTOR in writing.
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8.6.
|
To assume the costs of maintaining the TRANSPORTATION NETWORK until delivery thereof to the operation concessionaire.
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8.7.
|
Cooperate when the CONTACTOR demands it in writing, in the negotiation of sharing infrastructure agreements with concessionaires or other public or private entities that apply to other sectors (such as energy, oil, road infrastructure, etc.) required to install poles and infrastructure according to DESIGN of the TRANSPORT NETWORK outlined in the TECHNICAL SPECIFICATIONS. To this end, the FITEL, where warranted, will do their best without the cooperation of FITEL replace the obligation to THE HIRED to manage and sign such agreements as provided in Paragraph 7.36 of the seventh clause of this contract.
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8.8.
|
Other obligations under the FINANCING AGREEMENT, its Exhibits and the TECHNICAL SPECIFICATIONS in the CIRCULAR and the TERMS AND CONDITIONS.
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9.1.
|
To receive, use and dispose of the FUNDING AWARDED, according to the FINAL SCHEDULE OF ACTIVITIES and conditions provided in the FINANCING AGREEMENT.
|
9.2.
|
To propose to FITEL the replacement of BENEFICIARY LOCALITIES and/or Mandatory Paid Institutions, according Exhibit 12 of this contract.
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9.3.
|
It may provide, at its cost, risk and expense, and will not involve additional funding from FITEL, other additional telecommunications services to those agreed in the FINANCING AGREEMENT, provided they do not degrade the quality and continuity under the AWARDED PROJECT, communicating conditions to provide these additional services. These services will be provided prior authorization of FITEL within a period not exceeding thirty (30) working days from the day of filing.
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|
Under this assumption the CONTRACTOR is free to use the infrastructure and services in order to provide them in different locations than those agreed, provided that the installation, operation and maintenance thereof is paid by, cost and risk of the CONTRACTOR, and without additional funding from FITEL, without degrading the quality and continuity of services provided in the TECHNICAL SPECIFICATIONS.
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9.4.
|
To freely select technologies and more efficient network architectures, provided it complies with the requirements of the TECHNICAL SPECIFICATIONS and the whole becomes a coherent network to provide Internet service and intranet access.
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9.5.
|
The CONTRACTOR during the INVESTMENT PERIOD of the ACCESS NETWORK, the INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK and the OPERATION PERIOD, has the freedom to make updates to the technologies used, if required in the Technical Proposal, provided that this change equals or improves the quality and continuity of conditions originally established, the CONTRACTOR must be authorized by FITEL to make said change; for which it must comply with the requirements and procedure established in the TECHNICAL SPECIFICATIONS.
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9.6.
|
Within the first six (06) months of the INVESTMENT PERIOD OF THE ACCESS NETWORK, the CONTRACTOR may request FITEL the modification of model contracts contained in Exhibits No. 5-A and 5-B of the annex 8B of the TERMS AND CONDITIONS.
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9.7.
|
To provide to MANDATORY PAID INSTITUTIONS for free and without being subject to the regime of penalties established in the FINANCING AGREEMENT, the Internet and Intranet access referred to in this AWARDED PROJECT during the investment period, provided they do not involve the provision of additional funding from FITEL.
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9.8.
|
To request the reduction of guarantees issued, as provided in the FINANCING AGREEMENT.
|
10.1.
|
To enforce the obligations of the CONTRACTOR under the FINANCING AGREEMENT.
|
10.2.
|
To require full or partial refund of FUNDING AWARDED, of TRANSPORTATION NETWORK and ACCESS NETWORK ASSETS, as provided in the FINANCING AGREEMENT, when the CONTRACTOR use disbursements differently than the purpose indicated in the FINANCING AGREEMENT.
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10.3.
|
To execute the guarantees given on behalf of FITEL, in case of breach of its obligations under the Financing Agreement.
|
10.4.
|
To impose and enforce penalties arising from noncompliance, incompleteness, or delays of commitments from the CONTRACTOR under the FINANCING AGREEMENT.
|
10.5.
|
To make visits to the premises, facilities, infrastructure, among others, as it deems necessary to verify the performance of the AGREEMENT.
|
10.6.
|
To apply exceptional interpretation of clauses of the FINANCING AGREEMENT by FITEL, considering the special nature of it.
|
10.7.
|
To terminate the FINANCING AGREEMENT, when any of the grounds provided for this purpose occurs, if deemed appropriate.
|
10.8.
|
To modify, within six (06) months of the INVESTMENT PERIOD OF THE ACCESS NETWORK, the model contracts contained in Exhibits No. 5-A and 5-B of the annex 8-B of the TERMS AND CONDITIONS; provided that such amendments do not involve the CONTRACTOR in additional obligations to those in the FINANCING AGREEMENT, its Exhibits or the TECHNICAL SPECIFICATIONS.
|
10.9.
|
To approve contracts formats indicated in the preceding paragraph, taking into account the contributions of the CONTRACTOR, according to the provisions of Paragraph 9.6. of the FINANCING AGREEMENT. FITEL will give a favorable or unfavorable opinion on the changes proposed by the CONTRACTOR According to the corresponding notification.
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11.1.
|
The AWARDED PROJECT may be executed by subcontractors or other forms of outsourcing, provided that FITEL is informed of the names of individuals and/or companies to perform the work. To this end, the CONTRACTOR upon the signature of the FUNDING AGREEMENT shall submit an affidavit in accordance with Exhibit No. 10 of this contract, assuming responsibility for compliance with the contractual obligations of the subcontractor or other individuals or legal entities with whichit subscribes outsourcing contracts. The aforementioned Affidavit must be filed even if the CONTRACTOR does not perform any subcontract.
|
11.2.
|
In any case, the CONTRACTOR remains responsible to FITEL for the efficient and timely implementation of such obligations and may not allege a breach of the subcontractor to excuse its own default.
|
11.3.
|
The CONTRACTOR may not subcontract, individuals or legal entities for the execution of the entire AWARDED PROJECT
|
|
i.
|
The amount of SIXTY SEVEN MILLION TWO HUNDRED SIXTY SIX THOUSAND TWENTY SEVEN US Dollars (US$ 67´266,027.00) for the installation and operation of the ACCESS NETWORK.
|
|
ii.
|
The amount of :THIRTY MILLION SEVEN THOUSAND ONE HUNDRED FOURTY EIGTH US Dollars (US$ 30´007,148.00),
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13.1.
|
CONDITIONS OF EXPANSION OF THE AWARDED PROJECT COMMON TO BOTH NETWORKS
|
13.1.1.
|
The EXPANSION OF THE AWARDED PROJECT will be formalized through the signing of an addendum to the FINANCING CONTRACT.
|
13.1.2.
|
EI CONTRACTOR prior to the signing of the Addendum to FINANCING AGREEMENT that approves the EXPANSION OF THE AWARDED PROJECT, will deliver an Enlargement Activity Schedule, it will be part of the Addendum to FINANCING AGREEMENT.
|
13.1.3.
|
The deadline to complete the installation in new BENEFICIARY LOCATIONS shall be six (6) months from the signing of the Addendum to FINANCING AGREEMENT that approves the EXPANSION OF THE AWARDED PROJECT
|
13.2.
|
FOR THE ACCESS NETWORK
|
13.2.1.
|
The CONTRACTOR may solicit FITEL the EXPANSION OF THE AWARDED PROJECT for the ACCESS NETWORK under the terms indicated in this FINANCING AGREEMENT.
|
13.2.2.
|
THE AWARDED PROJECT may be expanded during the INVESTMENT PERIOD of THE ACCESS NETWORK and cannot be higher than twenty percent (20%) of the amount of THE ACCESS NETWORK FINANCING.
|
13.2.3.
|
The new beneficiary localities to be selected must belong to new district capitals within the area of influence of the AWARDED PROJECT, which will be included as Annex to the Addendum of the FINANCING AGREEMENT which approves the EXPANSION of the AWARDED PROJECT.
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13.2.4.
|
The CONTRACTOR must comply upon the approval of FITEL with every one of the terms it previously approved for the subscription of the Addendum to the FINANCING AGREEMENT reason why the EXPANSION of the AWARDED PROJECT is approved. FITEL reserves the right to modify the general and economic conditions of the new Non-reimbursable financing
|
13.3.
|
FOR THE TRANSPORTATION NETWORK
|
13.3.1.
|
The CONTRACTOR may, within six (06) months of the INVESTMENT PERIOD of the TRANSPORTATION NETWORK request FITEL the expansion of the AWARDED PROJECT to new district capitals. Such extension shall not exceed twenty percent (20%) of the amount of FUNDING AWARDED
|
13.3.2.
|
The new beneficiary localities to be selected must belong to new district capitals within the area of influence of the AWARDED PROJECT, which will be included as Annex to the Addendum of the FINANCING AGREEMENT which approves the EXPANSION of the AWARDED PROJECT.
|
13.3.3.
|
The EXPANSION of the AWARDED PROJECT will be formalized through the signing of an addendum to the FINANCING AGREEMENT, for which it will apply the provisions of this clause.
|
14.1.
|
ACCESS NETWORK:
|
14.2.
|
TRANSPORTATION NETWORK
|
14.2.1.
|
Disbursements are made according to the following scheme:
|
Concept
|
Time
|
Payment
|
Advance
|
Deliverables
|
First disbursement
|
Subscription of agreement
|
20% FINANCING OF TRANSPORTATION NETWORK
|
0%
|
Advance payment guarantee
|
Second disbursement
|
Final date of the first advance, described in Paragraph 2.2 of Exhibit 8-A
|
40% FINANCING OFACCESS NETWORK
|
Completion of the First Advance
|
44 Nodes of Distribution ,Connection and core Nodes and 3 Aggregation Nodes
|
Third disbursement
|
Date of completion of the INSTALLATION STAGE
|
40% FINANCING OF TRANSPORTATION NETWORK
|
Total Delivery of TRANSPORTATION NETWORK and signing of MINUTES OF CONFORMITY OF INSTALLATION AND TESTING SERVICES
|
44 Nodes of Distribution ,Connection and core Nodes and 3 Aggregation Nodes
|
15.1.
|
As a condition for signing the FINANCING AGREEMENT in the CLOSING DATE, the CONTRACTOR shall deliver to the COMMITTEE the ADVANCE PAYMENT GUARANTEE and PERFORMANCE BOND of the FINANCING AGREEMENTwhich must be issued by a LOCAL BANKING BUSINESS OR LOCAL INSURANCE BUSINESS rightfully authorized by the SBS (the banking and retirement fund superintendency) or by an INTERNATIONAL FINANCIAL ENTITY. In the case of a warranty issued by and INTERNATIONAL FINANCIAL ENTITY, it must be confirmed by a LOCAL BANKING BUSINESS according to the Exhibit Nº2 in the TERMS AND CONDITIONS.
|
15.2.
|
The ADVANCE PAYMENT GUARANTEE shall be for an amount of NINETEEN MILLION FOUR HUNDRED FIFTY FOUR THOUSAND SIX HUNDRED THIRTY FIVE US Dollars (US$ 19´454,635 .00), equivalent to 100% of the first disbursement, of THE ACCESS NETWORK and THE TRANSPORT NETWORK ensuring the proper use of this disbursement in favor of the CONTRACTOR, pursuant to the provisions of this AGREEMENT. It shall remain valid from the CLOSING DATE until the end of the investment period. The FITEL may provide for the mandatory extension of this guarantee, and the CONTRACTOR must renew it by the time indicated for its effect.
|
15.3.
|
THE CONTRACTOR during the INVESTMENT PERIOD of THE ACCESS NETWORK and the INVESTMENT PERIOD of THE TRASNPORT NETWORK may request FITEL a reduction of 50% and 40% of the ADVANCE PAYMENT GUARANTEE. To do this, it must have fulfilled the following conditions:
|
% Reduction
|
Progress
|
|
50%
|
Access Network
|
Transportation Network
|
60% of the total of PAID INSTITUTIONS
|
44 Nodes of Distribution Connection and core 4 Aggregation Nodes
|
|
40%
|
MINUTES OF COMPLIANCE OF FACILITIES AND TESTING OF SERVICES OF THE ACCESSNETWORK
|
MINUTES OF COMPLIANCE OF FACILITIES AND TESTING OF SERVICES OF THE TRANSPORTATION NETWORK
|
15.4
|
The ADVANCE PAYMENT GUARANTEE will be returned to the CONTRACTOR, once signed
|
|
·
|
RECORD OF AWARD OF THE TRANSPORTATION NETWORK ASSETS.
|
15.5
|
PERFORMANCE BOND of the FINANCING AGREEMENT will be for a total of SIX MILLION SEVEN HUNDRED TWENTY SIX THOUSAND SIX HUNDRED TWO US Dollars AND SEVENTY CENTS (US$ 6´726,602.70), equivalent to ten percent (10%) of the FINANCING for the ACCESS NETWORK which will ensure the proper and timely performance of each and every one of the obligations of the CONTRACTOR. The performance bond reduction scheme is as follows:
|
15.5.1.
|
After signing the TRANSPORTATION NETWORK ASSETS AWARD MINUTEm, it will be substituted for another totaling twenty percent (20%) of the amount of the FINANCING of the ACCESS NETWORK.
|
15.5.2.
|
At the beginning of the second year of the PERIOD OF OPERATION and after INSTALLATION CONFORMITY AND ACCESS NETWORK SUPERVISION REPORT is acceptedby FITEL PERFORMANCE BOND of the FINANCING AGREEMENT will be reduced to ten percent (10%) of the FINANCING of the ACCESS NETWORK.
|
15.5.3.
|
At the beginning of the third year of the PERIOD OF OPERATIONS and after INSTALLATION CONFORMITY AND ACCESS NETWORK SUPERVISION REPORT is accepted by FITEL it will be reduced to eight percent (8%) of the FINANCING of the ACCESS NETWORK
|
15.5.4.
|
At the beginning of the fourth year of the PERIOD OF OPERATIONS and after INSTALLATION CONFORMITY AND ACCESS NETWORK SUPERVISION REPORT is accepted by FITEL the PERFORMANCE BOND of the FINANCING AGREEMENT will be reduced to eight percent (6%) of the FINANCING of the ACCESS NETWORK and it will remain so until closure of the FINANCING CONTRACT
|
15.6
|
The PERFORMANCE BOND of the FINANCING AGREEMENT is issued for and on behalf of the CONTRACTOR in favor of FITEL. The bond must be renewed annually so that remains in effect until the expiration of the FINANCING AGREEMENT, except as noted in Paragraph 4.6. of the FINANCING AGREEMENT.
|
15.7
|
In case the CONTRACTOR presents COMMENTS pending from the last MONITORING REPORT issued in the PERIOD OF OPERATION OF THE ACCESS NETWORK, the PERFORMANCE BOND of the FINANCING AGREEMENT will be renewed seven (07) DAYS prior to maturity for a period of (60) DAYS, and so on until all COMMENTS have been clarified.
|
15.8
|
The PERFORMANCE BOND of the FINANCING AGREEMENT is secured, unconditional, and irrevocable, without benefit of excussion and of immediate execution upon request of FITEL without judicial demand for payment or performance, a copy of which is included as Exhibit No. 5 of the FINANCING AGREEMENT.
|
15.9
|
The PERFORMANCE BOND of the FINANCING AGREEMENT shall be returned no later than five (05) business days after making the final disbursement
|
16.1
|
The CONTRACTOR agrees to transfer ownership and control of the TRANSPORTATION NETWORK ASSETS on behalf of the MTC with the signing of the MINUTES OF AWARD OF THE TRANSPORTATION NETWORK ASSETS, once the Concession Agreement between the MTC and the concessionaire for the operation for the TRANSPORTATION NETWORK is subscribed.
|
16.2
|
The CONTRACTOR recognizes that after the signing of the MINUTES OF AWARD OF TRANSPORTATION NETWORK ASSETS, will also assume the obligation to formalize and perfect by all acts or procedures necessary for the transference of ownership and control referred to in the preceding paragraph in favor of the MTC. This obligation will assumed according to nature of the assets to be transferred and its aptitude to be registered in SUNARP.
|
16.3
|
The CONTRACTOR undertakes to carry out the activities necessary to preserve the condition and utility of the ASSETS TRANSPORT NETWORK until the signing of the Concession Agreement between the MTC and the concessionaire for the operation of the TRANSPORTATION NETWORK
|
16.4
|
The CONTRACTOR shall be liable for damages or losses caused to the TRANSPORTATION NETWORK ASSETS until the signing of the Concession Agreement between the MTC and the concessionaire for the operation of the TRANSPORTATION NETWORK. Therefore are forced to hire the necessary insurance to comply with the provisions of this paragraph.
|
16.5
|
After the signing of MINUTES OF AWARD OF ACCESS NETWORK ASSETS, FITEL shall make
the final disbursement of FUNDING AWARDED; as stated in Clause Fourteenth of the FINANCING AGREEMENT.
|
16.6
|
Without prejudice to the other obligations arising from the provisions of paragraph 7.34 and other provisions under this FINANCING AGREEMENT, until the transfer of title of the TRANSPORTATION NETWORK ASSETS to the MTC, the CONTRACTOR as provided in the applicable law, in its capacity as holder of such property immediately has an obligation to exercise (for your own expense) the following types of possessory defense for both the case of attempted usurpation of the TRANSPORTATION NETWORK ASSETS, as in the case of activities incompatible with the proper use of them by third parties:
|
|
a)
|
Extrajudicial possessory defense, used to repel the force used against the CONTRACTOR and to regain the good, without time interval, if it were dispossessed, but always refrain from the use of recourses not justified by the circumstances.
|
|
b)
|
Legal possessory defense, the CONTRACTOR must, if it is borne by the TRANSPORTATION NETWORK ASSETS any involvement, dispossession, occupation, usurpation, among others, to communicate MTC and FITEL of those facts and make use of the mechanisms and judicial resources to enable it to hold harmless MTC's right on the TRANSPORTATION NETWORK ASSETS.
|
16.7
|
The failure to exercise possessory defenses will result in penalties under Clause eighteen (18) of the FINANCING AGREEMENT.
|
16.8
|
The CONTRACTOR must notify FITEL and MTC, immediately and notarial duct, the occurrence of damage to the TRANSPORT NETWORK ASSETS, and the nature and amount thereof.
|
16.9
|
The exercise of possessory defenses described above does not hold harmless the CONTRACTOR, which, to a course as described in the preceding paragraphs, shall coordinate immediately with Fitel and MTC the legal actions that the CONTRACTOR must engage in order to hold harmless MTC's right on TRANSPORT NETWORK ASSETS.
|
16.10
|
Without prejudice to the provisions in paragraph 7.30 of the FINANCING AGREEMENT, the CONTRACTOR must hold harmless FITEL especially regarding the MTC and against any action or exception of legal, administrative, arbitration or contract, or claim of any nature regarding the ACCESS NETWORK and TRANSPORT NETWORK ASSETS.
|
16.11
|
The CONTRACTOR must comply with in respect of the TRANSPORT NETWORK and ACCESS NETWORK ASSETS, to pay taxes, fees and contributions payable, pursuant to APPLICABLE LAWS FINANCING referred to in the FINANCING AGREEMENT, considering between these regulatory provisions as provided in the Consolidated Text of the Municipal Taxation Act, approved by Supreme Decree No. 156-2004-EF or later rule that amends
|
16.12
|
The CONTRACTOR ensures the proper transfer of title of the TRANSPORT NETWORK ASSETS in favor of MTC and the ACCESS NETWORK ASSETS in favor of FITEL ; as wll as the operation and functioning of the TRANSPORT NETWORK ASSETS. It also recognizes the domain the MTC has over THE TRANSPORT NETWORK ASSETS and the domain FITEL has over the ACCESS NETWORK ASSETS
|
|
Ø
|
ACCESS NETWORK
|
17.1
|
FITEL is responsible for the supervision and control AWARDED PROJECT during INVESTMENT PERIOD of THE ACCESS NETWORK and OPERATION PERIOD.
|
17.2
|
In the INVESTMENT PERIOD of THE ACCESS NETWORK, supervision will mainly include the following:
|
|
•
|
Supervision of the number of BENEFICIARY LOCALITIES and MANDATORY PAID INSTITUTIONS of the AWARDED PROJECT and its proper location;
|
|
•
|
Monitoring the quantity and quality of infrastructure, equipment, materials, management tools, among others, to be applied to the AWARDED PROJECT
|
|
•
|
Supervision and control of the installation of infrastructure, equipment, materials, management tools, among others, which will be used by the AWARDED PROJECT to provide service access to Internet and intranet, in the BENEFICIARY LOCATIONS, INSTITUTIONS, or others who contract the service within the scope of the access network installed by the CONTRACTOR to serve the AWARDED PROJECT;
|
|
•
|
Supervision and control and SPREAD AWARENESS, TRAINING AND DEVELOPMENT OF CONTENTS;
|
|
•
|
Supervision and control of the operation of the Internet access service and intranet access, if any, to be provided with the AWARDED FUNDING according to the FINANCING AGREEMENT, its annexes and the TECHNICAL SPECIFICATIONS, TECHNICAL PROPOSAL, the CIRCULAR and TERMS AND CONDITIONS; and,
|
|
•
|
Supervision of other aspects that Fitel deems necessary to ensure the proper use of the services required
|
17.3
|
During the PERIOD OF OPERATION, FITEL will primarily oversee the following:
|
|
•
|
The services provided by the CONTRACTOR with the FUNDING AWARDED, according to the requirements specified in the TECHNICAL SPECIFICATIONS and in the absence thereof, in accordance with the provisions of the legal and regulatory framework applicable.
|
|
•
|
The quality of the provision of other services that are offered using the access network of the AWARDED PROJECT, according to the conditions laid down in the respective addendum.
|
|
•
|
Other that FITEL recommends or orders within the framework of the FINANCING AGREEMENT
|
Ø
|
TRANSPORTATION NETWORK
|
17.4
|
Supervision and control of the installation of infrastructure, equipment, materials, management tools, among others, to be used for the TRANSPORT NETWORK.
|
17.5
|
In the TRIAL PERIOD, FITEL will supervise during execution of the TRANSPORT NETWORK operation, solely for the operation of the ACCESS NETWORK. It will also verify the performance of the network and could execute periodical monitoring protocols for this.
|
17.6
|
Supervision of the appropriate use of the AWARDED FINANCING.
|
|
Ø
|
ACCESS NETOWRK
|
18.1
|
Penalties for failure in the ACCESS NETWORK INVESTMENT PERIOD
|
18.1.1
|
The penalties applicable for breaches during the ACCESS NETWORK INVESTMENT PERIOD may be deducted from the corresponding disbursement for this period.
|
18.1.2
|
Non-compliance with activities:
|
18.1.2.1
|
If the CONTRACTOR breaches with the full installation of a service within the prescribed period, Fitel shall establish a penalty of five-hundredths (0.05) of ITU (Tax unit) per MANDATORY PAID INSTITUTION set forth in Exhibit No. 01 of this contract, per day behind in the breach, counted from the day the initial installation ended.
|
18.1.2.2
|
If the CONTRACTOR breaches or partially meets the awareness and dissemination activities, as indicated in section 4.2.1 of the ACCESS NETWORK TECHNICAL SPECIFICATIONS, FITEL shall apply a penalty of one-tenth (0.1) of ITU for BENEFICIARY where this obligation was not complied with within the time limit set. It is considered that this activity was carried when the minimum percentage of attendees described in TECHNICAL SPECIFICATIONS of THE ACCESS NETWORK except what is indicated in the paragraph 3 of the Exhibit Nº14 of the Appendix 8B of the TERMS AND CONDITIONS related to the accreditation of the minimum of attendees.. The application of this penalty does not relieve the CONTRACTOR compliance with this obligation
|
18.1.2.3
|
If the CONTRACTOR does not comply with the installation of the monitoring system within the ACCESS NETWORK INVESTMENT PERIOD, according to what is stated in section 6.6.1.1 of the TECHNICAL SPECIFICATIONS as well as usernames and passwords, etc., or all activities for commissioning of this system is not completed, Fitel shall apply a penalty of five (5) ITU. The application of this penalty does not relieve the CONTRACTOR of the compliance with this obligation.
|
18.1.2.4
|
In case of breach of the activities during the INVESTMENT PERIOD due to a fortuitous event or force majeure, not attributable to the CONTRACTOR, it shall send the documentation to FITEL proving this, in maximum one month of the event causing the breach. Furthermore, in order to evaluate the fact, the CONTRACTOR must communicate the occurrence of the event, and propose its estimate of days required for the performance of such activities, within the first fifteen (15) days of the occurrence.
|
18.1.2.5
|
In the event that the CONTRACTOR has not hired or has not maintained insurance policies in force on ASSETS and elements of the ACCESS NETWORK as stated in Paragraph 7.21 of the Seventh Clause FUNDING AGREEMENT, FITEL may impose a penalty of five (05) ITU whenever compliance with this obligation has failed.
|
18.1.2.6
|
If the CONTRACTOR does not comply with the installation of the server for monitoring within the INVESTMENT PERIOD, according to what is stated in section 6.6.1.2 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, or all activities for commissioning of this are not completed, Fitel shall apply a penalty of five (5) ITU. The application of this penalty does not relieve the CONTRACTED PART to comply with this obligation.
|
18.1.2.7
|
If the CONTRACTOR fails to comply with the installation of the amount of help centers for users within the INVESTMENT PERIOD, according to what is stated in paragraph 5.5 of the TECHNICAL SPECIFICATIONS. The delay by the CONTRACTOR, will result in a penalty of five (05) ITU
|
18.1.3
|
Penalties for Failure to deliver Information:
|
18.1.3.1
|
If the CONTRACTOR fails to comply to submit the formats of the ACCESS NETWORK INSTALLATION MINUTES it will use, according to the period specified in paragraph 6.5.3.3 of the TECHNICAL SPECIFICATIONS, FITEL may impose a penalty of three (03) ITU. The application of this penalty does not relieve THE CONTRACTOR compliance with this obligation.
|
18.1.3.2
|
If the CONTRACTOR fails to deliver the ACCESS NETWORK INSTALLATION MINUTES according to the period specified in paragraph 6.5.3.6 of the TECHNICAL SPECIFICATIONS, Fitel may apply a penalty equal to one hundredth (0.01) ITU for each DAY of delay in the ACCESS NETWORK INSTALLATION MINUTES(station/terminal node or subscriber).
|
18.1.3.3
|
If the CONTRACTOR fails to comply with submitting the documentation and information that certifies the execution of activities AWARENESS TRAINING AND DISSEMINATION according to the period specified in Paragraph 5 of Appendix No. 14 of the TECHNICAL SPECIFICATIONS, Fitel will apply a penalty equal to one hundredth (0.01) of ITU per DAY of delay. It is only considered submitted the documentation and information for each LOCATION that has filled all fields, including subscription of faith that carry out this activity, and the list of attendees.
|
18.1.3.4
|
If the CONTRACTOR fails to comply with its final proposal to deliver CAPACITY BUILDING within the time limits indicated in Paragraph 4.1.2 of the TECHNICAL SPECIFICATIONS, FITEL shall apply a penalty of three (03) ITU for each of these proposals not filed within that period. The application of this penalty does not relieve the CONTRACTOR to comply with this obligation.
|
18.1.3.5
|
The CONTRACTOR shall send to Fitel, within the maximum period prescribed in Paragraph 6.5.5 of the TECHNICAL SPECIFICATIONS, a proposed Testing protocol for Acceptance of Facilities containing the minimum procedures required by Fitel. The delay by THE HIRED in remission of that protocol will result in a penalty of three hundredths (0.03) ITU per DAY of delay.
|
18.1.3.6
|
The CONTRACTOR shall send to Fitel, within the maximum period prescribed in Paragraph 2.5.1 of the TECHNICAL SPECIFICATIONS, the FINAL SCHEDULE OF ACTIVITIES, containing the minimum fields required by Fitel. The delay by the CONTRACTOR in referring this schedule will result in a penalty of one hundredth (0.01) of ITU for each day of delay.
|
18.1.3.7
|
The CONTRATOR shall send to Fitel, within the maximum period prescribed in Paragraph 5.4.2 of the TECHNICAL SPECIFICATIONS, the detailed proposal for the Maintenance Program. The delay by the CONTRACTOR in remission of the program will result in a penalty of one hundredth (0.01) of ITU for each day of delay.
|
18.1.3.8
|
If the CONTRACTOR fails to comply with the submission of information operations and maintenance facilities within the maximum period prescribed in Paragraph 5.6.2 of the TECHNICAL SPECIFICATIONS. The delay by the CONTRACTOR will result in a penalty of five (05) ITU.
|
18.1.3.9
|
If the CONTRACTOR fails to comply with the submission of the detailed content of the courses to be issued in training on the technology solution within the maximum period prescribed in Paragraph 2.6.1 of the TECHNICAL SPECIFICATIONS. The delay by the CONTRATED PARTY will result in a penalty of one hundredth (0.01) of ITU for each day of delay.
|
18.1.3.10
|
If the CONTRACTOR fails to comply with the referral of disaggregated costing PROPOSED ECONOMIC NETWORK ACCESS, within the maximum period prescribed in Paragraph 2.7.1 of the TECHNICAL SPECIFICATIONS NETWORK ACCESS. The delay by THE HIRED, will result in a penalty of two hundredths (0.02) ITU per DAY of delay.
|
18.1.3.11
|
When the CONTRACTOR fails to present to Fitel FIELD STUDIES, within the prescribed period and according to what is stated in paragraph 6.5.2 of the TECHNICAL SPECIFICATIONS, FITEL may apply a penalty of ten (10) UIT.
|
18.1.3.12
|
When the ONCTRACTED PARTY fails to present to Fitel the ENGINEERING STUDIES, within the deadline and according to what is stated in paragraph 6.5.2 of the TECHNICAL SPECIFICATIONS, FITEL apply a penalty of ten (10) UIT.
|
18.1.3.13
|
When the CONTRACTOR fails to present to FITEL the proposal to implement a tracking subsystem within the deadline and according to what is stated in paragraph 6.6.1 of the TECHNICAL SPECIFICATIONS, FITEL will apply a penalty of five (05) UIT
|
18.1.3.14
|
When the CONTRACTOR fails to submit to FITEL the formation of its team, within the prescribed period and according to what is stated in paragraph 6.4 of the TECHNICAL SPECIFICATIONS, FITEL apply a penalty of five (05) UIT.
|
18.1.3.15
|
When the CONTRACTOR fails to inform FITEL of a modification in the conformation of its staff, within the prescribed period and according to what is stated in paragraph 6.4 of the TECHNICAL SPECIFICATIONS, FITEL may apply a penalty two (02) UIT.
|
18.2
|
Penalties due to non compliance during the OPERATION PERIOD
|
18.2.1
|
The penalties applicable due to non compliance during the OPERATION PERIOD may be discounted from the next disbursement that corresponds to deliver to THE CONTRACTOR after the occurrence of the corresponding non compliance or according to the following provisions. In case that the amount of penalties of a semester exceeds the disbursement corresponding to said period, THE CONTRACTOR must cancel said debt to FITEL in a term of fifteen (15) days, counted since the collection notification.
|
18.2.2
|
Penalties due to non compliance of the availability of rendered services
|
18.2.2.1
|
In case the CONTRACTOR fails to comply with the requirement of minimum availability of the network of 98% annually, indicated in the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK and measured to the POP, the FITEL will impose a penalty of a tenth (0.1) of the UIT for each additional hour of interruption of the network. The availability will be calculated each year, counted since the first day of the OPERATION PERIOD.
|
18.2.2.2
|
In case that the availability of services is interrupted in some of the POPs due to Acts of God or Force Majeure or events not attributable to the CONTRACTOR . THE CONTRACTOR will notify to FITEL within the term of thirty (30) days following to the culmination of the month of the event, about the existence of said events, which must be communicated to FITEL through a letter enclosing, through optical storage devices (CD DVD or USB), the detail of the dates and the hours they request to discount, as well as the causes that originated it.
|
18.2.3
|
Penalties due to non compliance of TRAINING
|
18.2.3.1
|
In case THE CONTRACTOR fails to comply or partially complies to make the TRAINING according to indications made in Appendix N° 13 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL will impose a penalty of a tenth (0.1) of the UIT for each location where this obligation was not complied, within the term established. We shall consider that this activity is performed when the minimum percentage of attendees is reached. The application of this penalty does not release THE CONTRACTOR of the compliance of this obligation.
|
18.2.4
|
Penalties due to failure to submit information by THE CONTRACTOR
|
18.2.4.1
|
If the CONTRACTOR fails to deliver the Execution Minutes of TRAINING according to the term foreseen in Section III of Appendix N° 13 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL will apply a penalty equivalent to one hundredth (0.01) of the UIT for each DAY of delay per BENEFICIARY LOCALITY. The minutes will be only considered as submitted per BENEFICIARY LOCALITY those that have all full fields, including the subscription of the person that certifies the performance of this activity, and the list of attendees.
|
18.2.4.2
|
THE CONTRACTOR shall send to FITEL, within the maximum term established in Section III of Appendix N° 13 B of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, the final report of the TRAINING performed. The delay by THE CONTRACTOR in the remission of said report, shall result in a penalty of three hundredths (0.03) of the UIT for each DAY of delay.
|
18.2.4.3
|
THE CONTRACTOR shall send to FITEL, within the maximum term established in the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, the monthly reports of the use of access to Internet (total traffic, per locality and per type), monthly report of interruptions, monthly report of quality indicators. The delay by THE CONTRACTOR in the remission of reports, shall result in a penalty of one tenth (0.1) of the UIT per each DAY of delay and per each type of report.
|
18.2.4.4
|
When THE CONTRACTOR does not present to FITEL the conformation of its work team, within the term established and according to indications made in Section 6.4 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL shall apply a penalty of five (05) UIT.
|
18.2.4.5
|
When THE CONTRACTOR does not communicate to FITEL the modification of the conformation of its work team, within the term established and according to indications made in Section 6.4 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL shall apply a penalty of two (02) UIT.
|
18.2.4.6
|
When THE CONTRACTOR does not send to FITEL the format of the activities for Preventive Maintenance, within the term established and according to indications made in Section II of Appendix N° 17 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL shall apply a penalty of five (05) UIT.
|
18.2.4.7
|
When THE CONTRACTOR does not send to FITEL the Schedule of annual Preventive Maintenance, within the term established and according to indications made in Section II of Appendix N° 17 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, FITEL shall apply a penalty of three (03) UIT.
|
18.2.4.8
|
If THE CONTRACTOR sends to FITEL, out of the time established in Section
7.17
of the seventh clause of the FINANCING CONTRACT, the disaggregated information of investment costs of the ACCESS NETWORK or if its is inaccurate or false FITEL will impose a penalty of ten (10) UIT.
|
18.2.4.9
|
If THE CONTRACTOR sends to FITEL, out of the time established in Section
7.18
of the seventh clause of the FINANCING CONTRACT, the operative cash flow of the AWARDED PROJECT, or if it is inaccurate or false FITEL will impose a penalty of ten (10) UIT.
|
18.2.5
|
Penalties for OBJECTIONS
|
18.2.5.1
|
FITEL shall make supervisions prior to the performance of disbursements indicated in the Fourteenth Clause of the FINANCING CONTRACT. The supervisions will be made according to the protocols approved by FITEL.
|
18.2.5.2
|
FITEL shall apply a penalty of one (01) UIT for each one of the OBJECTIONS indicated as follows, per BENEFICIARY LOCALITY or station/node indicated in the SUPERVISION REPORT OF THE ACCESS NETWORK, with the indication that the application of this penalty does not release THE CONTRACTOR of the compliance of these obligations.
|
18.2.5.3.
|
When THE CONTRACTOR fails to comply with the preventive Maintenance Program according to the TECHNICAL PROPOSAL.
|
18.2.5.4.
|
If THE CONTRACTOR confines or prevents the personnel appointed by FITEL to make the corresponding visits during the effectiveness of the FINANCING CONTRACT in its tasks of SUPERVISION, FITEL can impose the penalty for each one of the prevented or limited visits. FITEL can discount that value in the immediate disbursement following to the date of the negative or limitation.
|
18.2.5.5.
|
If THE CONTRACTOR fails to comply with the installation of the blocking software specified in Section 3.5.4 of the TECHNICAL SPECIFICATIONS OF THE ACCESS NETWORK.
|
18.2.5.6.
|
When THE CONTRACTOR fails to comply with the term of 30 DAYS, established in Section 5.2 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, to install the required service, a penalty of one tenth (0.1) of the UIT for each DAY of delay will be applied.
|
18.2.5.7.
|
For the non compliance of each one of the indicators established in Appendix N° 11 of the TECHNICAL SPECIFICATIONS of the ACCESS NETWORK, a penalty will be applied according to the following table:
|
Nº
|
Indicator
|
Quality Parameter
|
Scope
|
Penalty
|
1
|
TIA – Incidence rate of troubleshooting for the service of access to Internet
|
Less than 10%
|
All the network
|
10 UIT x month
|
2
|
Latency
|
Less than 150 msec
|
Up to CPE
|
0.05 UIT x month x CPE
|
3
|
Packet loss
|
Less than 2%
|
To the subscriber
|
0.05 UIT x month x CPE
|
4
|
Up/Down Speed
|
Higher than 40% of hired speed
|
Up to CPE
|
0.05 UIT x mes x CPE
|
18.2.5.8.
|
The penalties, if any, will be added per indicator, for each one of the months of the supervised semester.
|
Ø
|
TRANSPORTATION NETWORK
|
18.3.
|
The penalties applicable for non compliance ofTHE TRANSPORT NETWORK will be discounted from the next disbursement that corresponds to deliver to THE CONTRACTOR after the occurrence of the corresponding non compliance or according to indications made in the following provisions. In case that the amount of the penalties exceeds the disbursement corresponding to said period, THE CONTRACTOR must cancel said debt to FITEL in a term of fifteen (15) DAYS, counted since the collection notification.
|
18.4.
|
Failure Activities:
|
18.4.1
|
When THE CONTRACTOR fails to comply with the term established in Section 2.2 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to culminate the first advance or total delivery of the TRANSPORTATION NETWORK, a penalty of five (05) UIT for each DAY of delay will be applied.
|
18.4.2
|
In case that THE CONTRACTOR has not contracted or has not kept in force the insurance policies on the assets and elements that conform the TRANSPORTATION NETWORK according to Section 7.21 of the Seventh Clause of the FINANCING CONTRACT, FITEL will impose a penalty of five (05) UIT each time this obligation has not been complied.
|
18.4.3
|
In case THE CONTRACTOR fails to comply with the installation of the server
for monitoring within the INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK, according to Section 15.10.2 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, or all the activities for the commissioning of it have not concluded, FITEL will impose a penalty of five (5) UIT. The application of this penalty does not release THE CONTRACTOR of the compliance of this obligation.
|
18.4.4
|
In case THE CONTRACTOR fails to comply with the installation of the monitoring system within the INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK, according to Section 15.10.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, and users and keys, among others, or all the activities for the commissioning of this system are not concluded, FITEL will impose a penalty of five (5) UIT. The application of this penalty does not release THE CONTRACTOR of the compliance of this obligation.
|
18.4.5
|
In case of non compliance of the activities to perform during the INVESTMENT PERIOD OF THE TRANSPORTATION NETWORK is due to a supposed Act
of God or force majeure, or facts attributable to THE CONTRACTOR, it must send to FITEL the documentation that demonstrates it, within the following month of the event of non compliance. Furthermore, in order to assess the fact, THE CONTRACTOR must communicate the occurrence of the event, and propose the estimated days required for the compliance of said activities, within the first fifteen (15) days of the occurrence of the event.
|
18.5
|
Penalties due to the Failure of Information delivery:
|
18.5.1
|
When THE CONTRACTOR fails to comply with the term established in Section 2.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to submit the GENERAL TECHNICAL PROPOSAL, a penalty of one (01) UIT per each DAY of delay will be applied.
|
18.5.2
|
When THE CONTRACTOR fails to comply with the term established in Section 2.2 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to submit each DEFINITIVE TECHNICAL PROPOSAL, a penalty of one (01) UIT per each DAY of delay will be applied.
|
18.5.3
|
If THE CONTRACTOR fails to comply with the remission of the disaggregated costing of the ECONOMIC PROPOSAL of the TRANSPORTATION NETWORK, within the maximum term established in Section 2.6 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK. The delay by THE CONTRACTOR, will result in a penalty of one 1 UIT per each DAY of delay.
|
18.5.4
|
When THE CONTRACTOR fails to comply with the term established in Section 10.4 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to submit recommendations and the requested protocols, a penalty of one hundredth (0.01) of the UIT per each DAY of delay will be applied
.
|
18.5.5
|
When THE CONTRACTOR fails to comply with the term established in Section 14.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, to submit the TECHNICAL FILE, a penalty of one 1 UIT per each DAY of delay will be applied
.
|
18.5.6
|
When THE CONTRACTOR does not present to FITEL the conformation of its work team, within the term established and according to Section 15.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, FITEL shall apply a penalty of 1 UIT.
|
18.5.7
|
When THE CONTRACTOR does not communicate to FITEL the modification of the conformation of its work team, within the term established and according to Section 15.1 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, FITEL shall apply a penalty of one (01) UIT.
|
18.5.8
|
If THE CONTRACTOR fails to deliver the INSTALLATION MINUTES OF THE TRANSPORTATION NETWORK according to the term foreseen in Section 15.9.6 of the TECHNICAL SPECIFICATIONS of the TRANSPORTATION NETWORK, FITEL shall apply a penalty equivalent to one hundredth (0.01) of the UIT per each DAY of delay for the INSTALLATION MINUTES OF THE TRANSPORTATION NETWORK.
|
18.5.9
|
If THE CONTRACTOR sends to FITEL, out of the time established in the FINANCING CONTRACT, the disaggregated information of investment costs of the TRANSPORTATION NETWORK or if it is inaccurate or false, FITEL will impose a penalty of ten (10) UIT.
|
Ø
|
COMPETENCE FACTORS
|
18.6
|
In the case that THE CONTRACTOR has submitted as part of its TECHNICAL PROPOSAL, the installation of infrastructure to provide the services of the AWARDED PROJECT, in an additional amount of BENEFICIARY LOCALITIES, FITEL will impose a penalty of fifteen (15) UIT if THE CONTRACTOR fails to comply with the complete installation of any service of the AWARDED PROJECT within the term established. This penalty will not be applied if THE CONTRACTOR did not included said factor in the TECHNICAL PROPOSAL.
|
18.7
|
In case that THE CONTRACTOR has submitted, the delivery of tablets as referred to in the paragraph 9.1.1 of the TERMS ANS CONDITIONS as part of its TECHNICAL OFFER and fails to deliver the total number of items, FITEL will impose a penalty of fifteen (15) UIT per year of failure of delivery of the total amount of tablets.. This penalty will not be applied if THE CONTRACTOR did not include said factor.
|
18.8
|
Penalties for not keeping the GUARANTEES in force
|
|
(Guarantee Value) x (number of Days in which the
GUARANTEE is not in force)
|
Penalty =
|
--------------------------------------------------------------------------------
UIT
|
18.9
|
Independence of penalties from administrative sanctions
|
18.10
|
Procedure of payment of penalties
|
18.10.1
|
The penalties may be discounted from disbursements indicated in the fourteenth Clause of the FINANCING CONTRACT. The payment of penalties does not imply a waiver of the right of FITEL to claim the compensation for damages, if any, neither its right to terminate the FINANCING CONTRACT, according to Section 19.2. of the nineteenth Clause of the FINANCING CONTRACT.
|
18.10.2
|
When there are penalties that are not covered by a pending disbursement of payment, or when there is no disbursement from which said penalties may be discounted, or in case that in the last four months of the OPERATION PERIOD there is any amount of penalties to collect by FITEL; THE CONTRACTOR must cancel the difference directly to FITEL in a term of fifteen (15) DAYS, counted since the notification of collection. In case of non compliance of said payment, we shall proceed to execute the GUARANTEE OF PERFORMANCE BOND GUARANTEE OF THE FINANCING CONTRACT for the Collection of the owed amount.
|
18.10.3
|
THE CONTRACTOR shall pay the penalties in NUEVOS SOLES.
|
19.1
|
For expiration of the term of the FINANCING CONTRACT.
|
19.2
|
Termination by FITEL
|
19.2.1
|
FITEL may terminate THE FINANCING CONTRACT of full right by some of the following grounds:
|
|
a)
|
When THE CONTRACTOR is declared in a situation of bankruptcy before the Commission of Insolvency Proceedings of the National Institute of Defense of Competence and Intellectual Property– INDECOPI or the person acting as such.
|
|
b)
|
Due to the lack of renewal of guarantees indicated in the Tenth Clause of the FINANCING CONTRACT.
|
|
c)
|
Due to the unjustified non compliance of the DEFINITIVE SCHEDULE OF ACTIVITIES OF THE ACCESS NETWORK OR THE DEFINITIVE SCHEDULE OF ACTIVITIES OF THE TRANSPORT NETWORK; provided said non compliance assessed by FITEL, results in a non compliance of the activities within the INVESTMENT PERIOD of THE ACCESS NETWORK or within the INVESTMENT PERIOD of THE TRANSPORT NETWORK referred in the TECHNICAL SPECIFICATIONS.
|
|
d)
|
For unjustified non compliance of the TECHNICAL SPECIFICATIONS and, in general, of the obligations agreed in the FINANCING CONTRACT.
|
|
e)
|
For abandonment in rendering the service of access to Internet or, if applicable, of the access to Intranet, in some of the BENEFICIARY LOCALITIES or any of the MANDATORY PAID INSTITUTIONS for causes attributable to THE CONTRACTOR.
|
|
f)
|
When there are deviations in the use of the AWARDED FINANCING, or is given a different destiny for which it was granted; without prejudice of the agreement made in the paragraph 10.2 of the Tenth Clause of the FINANCING CONTRACT.
|
|
g)
|
For unjustified non compliance of the TECHNICAL PROPOSAL, except modifications established between the PARTIES.
|
|
h)
|
When FITEL had knowledge that the company that leadered the CONSORTIUM did not had a minimum total participation of twenty five per cent (25%) in the legal person incorporated as THE CONTRACTOR, before three (03) years, counted since the CLOSING DATE.
|
|
i)
|
For loss of the Concession of Public Telecommunications Service or loss of the registration in the registry of services of added value to provide the Public Telecommunication Services established in the TECHNICAL SPECIFICATIONS.
|
|
j)
|
When the amount of penalties referred to the INVESTMENT PERIOD of THE ACCESS NETWORK or the INVESTMENT PERIOD of THE TRANSPORT NETWORK have exceeded the amount in force of the amount of the ADVANCE GUARANTEE and the PERFORMANCE BOND GUARANTEE of THE FINANCING CONTRACT, .
|
|
k)
|
For inaccuracy or falsehood of the AFFIDAVITS submitted by THE CONTRACTOR in the BID, as BIDDER.
|
|
l)
|
For non compliance of the obligations of CLOSURE OF THE FINANCING CONTRACT.
|
|
m)
|
For reasons of convenience, importance or interest of the Peruvian Government, without being necessary the expression of cause in this case.
|
|
n)
|
For refusing to transfer the ownership and title in favor of the MTC or of FITEL the ASSETS OF THE TRANSPORTATION NETWORK or of the ACCESS NETWORK respectively. This ground includes the negative to make the acts necessary to formalize or improve said transfers.
|
|
o)
|
Refuse to provide all the facilities to the MTC, to FITEL and to the concessionaire of the operation of the TRANSPORTATION NETWORK that these require with the purpose to facilitate the bid and commissioning of said component of the AWARDED PROJECT.
|
19.2.2
|
In the cases of termination of the FINANCING CONTRACT indicated in the preceding Section, with exception of the provisions made in literal n), FITEL will be empowered to: (i) execute the PERFORMANCE BOND GUARANTEE OF THE FINANCING CONTRACT referred in the Fourteenth Clause; and, (ii) require THE CONTRACTOR a compensation for damages caused due to its non compliance.
|
19.2.3
|
In case that THE CONTRACTOR has not acquired the ASSETS OF THE ACCESS NETWORK or ASSETS OF THE TRANSPORTATION NETWORK; and the FINANCING CONTRACT is terminated during the INVESTMENT PERIOD by virtue of literals a) until o) of the preceding Section 19.2.1., with exception of literals e),) and m), THE CONTRACTOR shall return to FITEL the integrity of the AWARDED FINANCING disbursed until that time or, the guarantees will be executed.
|
19.2.4
|
In case that THE CONTRACTOR has acquired the ASSETS OF THE ACCESS NETWORK or ASSETS OF THE TRANSPORTATION NETWORK without proceeding to its installation and the FINANCING CONTRACT is terminated during the INVESTMENT PERIOD by virtue of literals a) until o) of the preceding Section 19.2.1., with exception of literals e), and m), the PARTIES shall subscribe the corresponding award minutes and THE CONTRACTOR will endorse in favor of FITEL the insurance policies referred in Section 7.21 of the Seventh Clause of the FINANCING CONTRACT and will return the non executed part of the disbursement of the AWARDED FINANCING or, the guarantees will be executed.
|
19.2.5
|
In case that THE CONTRACTOR has acquired the ASSETS OF THE ACCESS NETWORK or the ASSETS OF THE TRANSPORTATION NETWORK, and it has been installed and the FINANCING CONTRACT is terminated by virtue of paragraphs from a) to the literal o) of the preceding Section 19.2.1., as appropriate, the PARTIES shall subscribe the corresponding award minutes and THE CONTRACTOR will endorse in favor of FITEL the insurance policies referred in Section 7.21 of the Seventh Clause of the FINANCING CONTRACT.
|
19.2.6
|
In the case that THE CONTRACTOR has acquired and made the installation of the ASSETS OF THE ACCESS NETWORK or the ASSETS OF THE TRANSPORTATION NETWORK and the FINANCING CONTRACT is terminated by virtue of literal m) of Section 19.2.1., the PARTIES will subscribe the corresponding award minutes and THE CONTRACTOR will endorse in favor of FITEL the insurance policies referred in Section 7.21 of the Seventh Clause of the FINANCING CONTRACT and THE CONTRACTOR will keep the amount of the AWARDED FINANCING received in the part equivalent to the supply value.
|
19.2.7
|
In all the assumptions of termination by FITEL in which the corresponding award minutes is subscribed and the endorsement of the policies is made on the ASSETS OF THE ACCESS NETWORK and of the TRANSPORTATION NETWORK, it shall not be included neither in the minutes subscription neither in the endorsement in favor of FITEL of the policy those equipment and/or preexisting installations at the enactment of the FINANCING CONTRACT, that are used to provide the proposed services in the AWARDED PROJECT.
|
19.3
|
Termination by THE CONTRACTOR
|
19.3.1
|
THE CONTRACTOR may terminate the FINANCING CONTRACT of full right, by the following grounds:
|
|
a)
|
Lack of some disbursement by FITEL, provided THE CONTRACTOR has complied with all the obligations indicated in the Seventh Clause of the FINANCING CONTRACT and THE CONTRACTOR has corrected all the OBJECTIONS of the SUPERVISION REPORT; or,
|
|
b)
|
Non justified negative of FITEL to receive the INSTALLATION for a term greater than one hundred and twenty (120) DAYS; or,
|
|
c)
|
Before the delay of FITEL in the disbursement of a quota for more than one hundred and twenty (120) DAYS, for reasons not attributable to THE CONTRACTOR.
|
19.3.2
|
In such cases, THE CONTRACTOR will preserve the ownership of the ASSETS OF THE ACCESS NETWORK and of the TRANSPORTATION NETWORK and the disbursements effectively executed, prior reconciliation of balances; likewise, will endorse in favor of FITEL the insurance policies referred in Section 7.21 of the Seventh Clause of the FINANCING CONTRACT; and, FITEL will be obliged to return the PERFORMANCE BOND GUARANTEE OF THE FINANCING CONTRACT.
|
19.4
|
Termination by Mutual Agreement
|
|
Under this assumption, the PARTIES will perform the reconciliation of balances, if applicable.
|
|
In said assumption of termination, FITEL shall return the corresponding guarantee; likewise, the PARTIES declare that the payment for damages will not be claimed.
|
20.1
|
Prior to the termination of the FINANCING CONTRACT, the affected PARTY by the non compliance will send to the PARTY that has failed to comply, a notarial letter communicating the non compliance and terminating it of full right.
|
20.2
|
Regarding the assumptions foreseen in the nineteenth Clause of the FINANCING CONTRACT, FITEL may require to THE CONTRACTOR, to satisfy the provision subject matter of non compliance in a maximum term of fifteen (15) DAYS, and may establish higher terms attending exceptional circumstances upon determination of FITEL under penalty of terminating the FINANCING CONTRACT of full right according to the provisions set forth in Article 1429º of the Civil Code.
|
20.3
|
According to the provisions of Sections 3.20 and 3.21 of the third clause and Section 4.6. of fourth clause of the FINANCING CONTRACT in all cases of termination that are produced once the OPERATION PERIOD has begun and only in the case that FITEL requests it, THE CONTRACTOR must continue with the operation and maintenance for the term required by FITEL, which shall not exceed from eight (08) months, counted since the termination communication of the FINANCING CONTRACT, in order to guarantee the continuity of the Public Telecommunications Services. During said term, FITEL will continue delivering the corresponding financing for the proportional number of DAYS elapsed.
|
20.4
|
The indication made in the preceding section will be also of application for the assumption foreseen in literal a) of the paragraph 19.2.1 of the nineteenth Clause of the FINANCING CONTRACT, in which case, a temporary administration will be conformed of the AWARDED PROJECT composed by representatives of FITEL and will represent it before the Meeting of Creditors with the purpose to secure that THE CONTRACTOR continues with the provision of services established in this contract.
|
20.5
|
In all cases of termination of the FINANCING CONTRACT, a reconciliation of balances will be made until the termination date.
|
21.1
|
Is the stage of execution of the FINANCING CONTRACT that will be made within the last semester of the OPERATION PERIOD and that will culminate with the conclusion of the FINANCING CONTRACT by the compliance of its obligations.
|
21.2
|
For the CLOSURE OF THE FINANCING CONTRACT, the PARTIES shall perform the following activities:
|
|
i.
|
THE CONTRACTOR shall correct the OBJECTIONS formulated by FITEL, in a maximum term of sixty (60) DAYS since its notification.
|
|
ii.
|
Once the OBJECTIONS are corrected by THE CONTRACTOR, previously verified by FITEL, THE PARTIES within a maximum term of fifteen (15) DAYS, will reconcile the calculus and payment of penalties incurred by THE CONTRACTOR; and the financial liquidation of disbursements and payments to which the PARTIES are obliged.
|
|
iii.
|
Once the information referred in the preceding literal ii) is reconciled, THE PARTIES, shall subscribe the agreement referred in Section 21.3. of this clause.
|
21.3
|
The CLOSURE OF THE FINANCING CONTRACT will be formalized through the subscription of the corresponding agreement, in which the PARTIES declare that there are no outstanding obligations to comply and that the financial liquidation has been satisfactorily made.
|
21.4
|
On the ten (10) DAYS counted since the subscription of the agreement of the CLOSURE OF THE FINANCING CONTRACT, the last disbursement will be made and, later, in a maximum term of five (05) BUSINESS DAYS the corresponding guarantees will be returned.
|
21.5
|
In case of non compliance of the obligations for the CLOSURE OF THE CONTRACT, FITEL shall require to THE CONTRACTOR its compliance in a term no later than 15 DAYS, under penalty to terminate the FINANCING CONTRACT of full right, consequently it will forfeit the last disbursement and shall proceed to the execution of the PERFORMANCE BOND GUARANTEE OF THE FINANCING CONTRACT
|
22.1.
|
If there are controversies of any nature between THE CONTRACTOR and FITEL related or resulting from this FINANCING CONTRACT, that may not be settled by common agreement by both parties or if there is no mechanism of solution foreseen by this document, they will be decided by an arbitral tribunal in a legal arbitration.
|
22.2
|
The arbitration will be carried out by an Arbitral Tribunal composed by three (03) members.
|
22.3
|
The arbitration will be carried out according to the rules established in the Regulation of Arbitration of the Chamber of Commerce of Lima or in the Regulation of Arbitration of the Bar Association of Lima, of the AMCHAM or other chosen by FITEL or THE CONTRACTOR, according to the demand that comes from any of these parties.
|
22.4
|
The Arbitral Tribunal will be composed as follows:
|
|
•
|
Each one of the PARTIES will appoint one arbitrator and they by common agreement, shall appoint a third arbitrator, who will chair the Arbitral Tribunal.
|
|
•
|
In case one of the PARTIES does not appoint its arbitrator within a term of ten (10) DAYS counted since the date in which one of them declares to the other in written its will to submit to this clause, the arbitrator who has not been appointed, will be appointed by the institution that is in charge of the Management of the arbitration process.
|
|
•
|
In case the PARTIES do not appoint the third arbitrator within a term of sixty (60) DAYS counted since the appointment of the second arbitrator, the third arbitrator will be appointed by the institution that is in charge of the management of the arbitration process.
|
22.5
|
The Arbitral Tribunal shall have a term of ninety (90) BUSINESS DAYS since its installation to issue the corresponding arbitration award, which will be final. Likewise, the Tribunal may be in charge of accurately determining the controversy, and to grant an extension if necessary to issue the award.
|
22.6
|
The place of the arbitration will be the city of Lima. The language to be used in the arbitration process will be Spanish.
|
22.7
|
The Arbitral Tribunal, when issuing the arbitration award, shall determine the form in which the parties must assume the expenses and costs of the arbitration.
|
22.8
|
In case that any of the PARTIES decides to file an action for annulment against the arbitration award before the Judiciary, it must previously constitute in favor of the party or the opposite parties a Letter of Guarantee granted by a first category bank with headquarters in Lima, equivalent to US$ 100,000.00 (One hundred thousand and 00/100 DOLLARS OF THE UNITED STATES OF AMERICA), which will be Joint and several, irrevocable, unconditional and automatically enforceable in case said resource, in final judgment, were not declared well founded. Said Letter of Guarantee must be in force during the process and will be delivered in custody to a notary of the city of Lima.
|
22.9
|
THE FINANCING CONTRACT is subscribed according to the legal regulations of the Republic of Peru, reason by which any controversy resulting from its performance, interpretation, execution, validity and effectiveness will be governed by these legal regulations.
|
23.1
|
THE CONTRACTOR may assign the FINANCING CONTRACT, and transfer or subrogate, totally or partially, the obligations under its charge, prior favorable opinion of FITEL.
|
23.2
|
THE CONTRACTOR is obliged to deliver to FITEL the information it may require, for purposes of the assignment and/or transfer of the FINANCING CONTRACT.
|
23.3
|
In case FITEL approves the assignment, transfer or indicated subrogation, an addendum must be subscribed to the FINANCING CONTRACT.
|
23.4
|
The new contractor, must comply with the same requirements established in the TERMS and the matters that correspond to the FINANCING CONTRACT.
|
24.1
|
Integrant Parts of the Contract
|
|
a)
|
The FINANCING CONTRACT.
|
|
b)
|
The TECHNICAL PROPOSAL.
|
|
c)
|
The CIRCULARS.
|
|
d)
|
The TECHNICAL SPECIFICATIONS.
|
|
e)
|
The TERMS.
|
24.2
|
Waiver of Rights
|
24.3
|
Modification of the Contract
|
24.4
|
Revocation of Contract
|
24.5
|
Intellectual Property
|
25.1
|
All the notifications and communications related to the FINANCING CONTRACT, unless another mechanism or formality is expressly stated, will be made in written, and will be sent from and to the addresses, fax numbers and e-mails indicated in Section 25.3. of this clause, with the corresponding effects established in the same section.
|
25.2
|
Any of the PARTIES may modify the addresses, fax numbers and e-mails, prior communication in written to the other PARTY, sent in the form indicated in Section 25.4. of this clause, with the corresponding effects established in the same section.
|
25.3
|
All the notifications under the FINANCING CONTRACT will be delivered with acknowledgment of receipt, or with any other mechanism that credits the date of delivery of the notification, and will be effective on the date indicated in the corresponding acknowledgment of receipt.
|
25.4
|
Any change of data of FITEL or of THE CONTRACTOR must be made through written communication sent to the other PARTY by notary and have effect since the following day of the date indicated in the corresponding acknowledgment of receipt.
|
ANNEX Nº 1
|
:
|
BENEFICIARY LOCALITIES AND MANDATORY PAID INSTITUTIONS
|
ANNEX Nº 2
|
:
|
TECHNICAL PROPOSAL
|
ANNEX Nº 3
|
:
|
DEFINITIVE SCHEDULE OF THE ACTIVITIES OF THE CONTRACTOR
|
ANNEX Nº 4
|
:
|
ECONOMIC PROPOSAL
|
ANNEX Nº 6
|
:
|
ADVANCE GUARANTEE AND PERFORMANCE BOND OF THE FINANCING CONTRACT
|
ANNEX Nº 7
|
:
|
TECHNICAL SPECIFICATIONS
|
ANNEX Nº 8
|
:
|
TERMS THAT GOVERN THE BID
|
ANNEX Nº 9
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:
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CIRCULARS
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ANNEX Nº 10
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:
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AFFIDAVIT OF RESPONSIBILITY
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ANNEX N° 11
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:
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PROCEDURE OF CALCULUS FOR AVAILABILITY
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ANNEX N° 12
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:
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FORMAT OF INVESTMENT COSTS OF THE ACCESS AND TRANSPORTATION NETWORK
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ANNEX N° 13
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:
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GUIDELINES FOR THE CHANGE OF MANDATORY PAID INSTITUTIONS
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-
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That, will inform to FITEL about the implementation of THE AWARDED PROJECT through the participation of subcontractors or other forms of outsourcing.
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-
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That, assumes the responsibility of the compliance of the contractual obligations of the subcontractor or of other natural or legal persons with whom he shall subscribe outsourcing contracts for the implementation of the AWARDED PROJECT.
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-
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That, will not allege breach of subcontractors and of natural or legal persons with whom he shall subscribe outsourcing contracts to evade the obligations assumed in the FINANCING CONTRACT.
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Item
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Description
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Unit
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Quantity
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Unitary Price $
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Unitary Price S/.
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Total Price $
|
Total Price S/.
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I
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INFRASTRUCTURE OF STATIONS
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||||||
Tower Type 1
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|||||||
Tower Type 2
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|||||||
Tower Type 3
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|||||||
Tower Type 4
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|||||||
Tower Type 5
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|||||||
Anchor
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|||||||
Support
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|||||||
Others
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|||||||
II
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ASSOCIATED CIVIL WORKS
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||||||
Perimeter Enclosure
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|||||||
Physical Edge security
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|||||||
Booths
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|||||||
Tower Base
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|||||||
Inst. of support Bracket type for antenna of RF.
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|||||||
Others
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|||||||
III
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MANPOWER
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||||||
Installation of towers
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|||||||
Associated civil works
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|||||||
Material haulage
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|||||||
Equipment haulage
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|||||||
Others
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|||||||
IV
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LICENSES AND PERMITS
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||||||
Municipal permits
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|||||||
SERNANP
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|||||||
CIRA
|
|||||||
Others
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|||||||
V
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Energy and security system of Stations
|
||||||
Place conditioning
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|||||||
Batteries bank
|
|||||||
UPS
|
|||||||
Generators
|
|||||||
Fuel tank
|
|||||||
Electrical panels
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|||||||
Rectifiers
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|||||||
Ground
|
|||||||
Light facilities
|
|||||||
Lightning rod
|
|||||||
Solar panels
|
|||||||
Ground installation
|
|||||||
Electric network installation
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|||||||
Others
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Item
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Description
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Unit
|
Quantity
|
Unitary Price $
|
Unitary Price S/.
|
Total Price $
|
Total Price S/.
|
I
|
Optical Equipment
|
||||||
Switches and routers of connection to the transportation network
|
|||||||
Connectors
|
|||||||
Others
|
|||||||
II
|
Radio Equipment
|
||||||
Ptp Radios
|
|||||||
Base Radios
|
|||||||
AP Radios
|
|||||||
Antennas
|
|||||||
Connectors
|
|||||||
Amplifiers
|
|||||||
Others
|
|||||||
III
|
MANPOWER
|
||||||
Radios installation
|
|||||||
Network configuration
|
|||||||
Others
|
|||||||
IV
|
User Modules
|
||||||
Computers
|
|||||||
UPS
|
|||||||
Switch and cables
|
|||||||
Others
|
|||||||
V
|
Management Center
|
||||||
Management system of radios
|
|||||||
Management system of the electric part
|
|||||||
Management system of security and alarms
|
|||||||
Servers
|
|||||||
Others
|
Item
|
Description
|
Unit
|
Quantity
|
Unitary Price $
|
Unitary price S/.
|
Total Price $
|
Total Price S/.
|
I
|
Preparation of plans and methodology
|
||||||
Training
|
|||||||
Awareness
|
|||||||
WEB applications
|
|||||||
Others
|
|||||||
II
|
Execution of activities
|
||||||
Cost of training service
|
|||||||
Cost of awareness service
|
|||||||
Amounts of diffusion contracts. Servers, etc.
|
|||||||
Others
|
|||||||
III
|
Modules
|
||||||
Computers
|
|||||||
UPS
|
|||||||
Switch and cables
|
|||||||
Others
|
|||||||
IV
|
Management Center
|
||||||
Management System of Radios
|
|||||||
Management system of the electric network
|
|||||||
Management system of security and alarms
|
|||||||
Others
|
Item
|
Optical Fiber
|
Unit
|
Quantity
|
Unitary Price $
|
Unitary Price S/.
|
Total Price $
|
Total Price S/.
|
I
|
Acquisition
|
||||||
Optical Fiber x reel
|
|||||||
Optical Equipment (detail per type)
|
|||||||
Switches
|
|||||||
Connectors
|
|||||||
Others
|
|||||||
II
|
Nodes
|
||||||
Conditioning
|
|||||||
Cabinets
|
|||||||
Air conditioning system
|
|||||||
Fire system
|
|||||||
Cables
|
|||||||
Security system
|
|||||||
Others
|
|||||||
III
|
Manpower
|
||||||
Installation of fiber
|
|||||||
Equipment installation
|
|||||||
Others
|
|
1.
|
THE CONTRACTOR has the obligation to provide the service of access to Internet to each one of the MANDATORY PAID INSTITUTIONS located in the BENEFICIARY LOCALITIES according to Annex 01 of the FINANCING CONTRACT.
|
|
2.
|
The changes of the MANDATORY PAID INSTITUTIONS operate in the following cases:
|
|
2.1
|
That the MANDATORY PAID INSTITUTION already has the service of access to Internet and declares that it does not want to hire the service to THE CONTRACTOR at least during the INVESTMENT PERIOD of the AWARDED PROJECT.(This is during the INVESTMENT PERIOD of the ACCESS NETWORK and during the INVESTMENT PERIOD of the TRANSPORT NETWORK).
|
|
2.2
|
That the MANDATORY PAID INSTITUTION put impediments to the installation of the equipment for any none justified reason.
|
|
2.3
|
That for any reason, whether technical or by impediment of the population or authorities, among others, the station (POP) may not be installed that will supply the service to the BENEFICIARY LOCALITY, and in this case they should make the change of all the MANDATORY PAID INSTITUTIONS. In which case a change of BENEFICIARY LOCATION will take place.
|
|
2.4
|
In all the aforementioned cases, FITEL will assess and determine if said changes proceed, communicating to THE CONTRACTOR its approval.
|
|
3.
|
The MANDATORY PAID INSTITUTIONS of replacements may be proposed by THE CONTRACTOR and will be given preference according to the following considerations:
|
|
3.1
|
The replacements of the MANDATORY PAID INSTITUTIONS will be given preferably within the same BENEFICIARY LOCALITY.
|
|
3.2
|
The educational institutions may be only replaced by another educational institution, in this case THE CONTRACTOR may solicit FITEL the exchange for another academic institution located in another BENEFICIARY LOCATION
|
|
3.3
|
The MANDATORY PAID INSTITUTIONS different to the educational institutions may be replaced by police stations, posts, municipalities or others, in the same or different locality.
|
|
4.
|
In no case THE CONTRACTOR may require additional financing to FITEL basing it in the replacement of some MANDATORY PAID INSTITUTION or some BENEFICIARY LOCATION.
|
Messrs.
|
Present
.-
|
Reference:
|
Public Tender for the execution of the Project “Broadband Installation for Comprehensive Connectivity and Social Development of the Huancavelica Region”.
|
Dear Sirs:
|
TECHNICAL PROPOSAL
|
|||
COMPETITION FACTOR
|
UNITS
|
IN LETTERS
|
IN NUMBERS
|
Localities additional
|
Number
|
Forty six
|
46
|
Tablets
|
Number
|
One hundred nineteen thousand seventy
|
119, 070
|
ECONOMIC PROPOSAL
|
|||
COMPETITION FACTOR
|
UNITS
|
IN LETTERS
|
IN NUMBERS
|
FINANCING OF THE TRANSPORTATION NETWORK
|
US$
|
Thirty million seven thousand one hundred forty eight and 00/100
|
30 007 148.00
|
ACCESS NETWORK FINANCING
|
US$
|
Sixty seven million two hundred sixty six thousand twenty seven and 00/100
|
67 266 027.00
|
The figures will be written with a maximum of two (02) decimals.
|
|||
|
|||
BONUS FOR ADVANCEMENT PERFORMANCE OF THE INSTALLATION STAGE
|
|||
CALENDAR DAY
|
UNITS
|
IN LETTERS
|
IN NUMBERS
|
Number of calendar days reduction
|
calendar days
|
Sixty
|
60
|
Entity
|
:
|
CONSORCIO GILAT
SHORTLISTED BIDDER
|
Name
|
:
|
ARIEH GAD ROHRSTOCK
Legal Representative of SHORTLISTED BIDDER
|
Signature
|
:
|
…………………………………….
Legal Representative of SHORTLISTED BIDDER
|
Name
|
:
|
YVETH FIORELLA ROMERO GUIA
Legal Representative of SHORTLISTED BIDDER
|
Signature
|
:
|
…………………………………….
Legal Representative of SHORTLISTED BIDDER
|
|
A.
|
“Bonds”
means
contracts of surety-ship, undertakings, guarantees or indemnities executed or procured by the Surety, described in the Contract, including those underwritten as reinsurers or by means of a Fronting Company or Cedant or issued in any acceptable form.
|
|
B.
|
“Contract”
means
the agreement, attached
(
SCHEDULE Nº 1),
executed by or on behalf of the Principal Obligor with the Surety.
|
|
C.
|
"Collateralization Event"
means any one or more of the following:
|
|
a.
|
The Surety has declared the Principal Obligor in default under the Contract(s) in relation to the bank intervention of the advance payments as described in the Section 2 of said Contract, or
|
|
b.
|
The Surety has received notice from the Obligee or has knowledge of facts communicated by the Obligee which Surety reasonably believes may result in a Liability to Surety; or
|
|
D.
|
“ Event of Default”
means any one or more of the following:
|
|
a.
|
The Indemnifying Party breaches any of its material obligation under this Deed; or
|
|
b.
|
The Obligee has requested payment in respect of any of the Bonds which have been deposited or posted with the Obligee; or
|
|
c.
|
The Principal Obligor has failed, refused or delayed to pay or is unable to pay claims, premium invoices or other indebtedness due to the Surety for the issuance of any of the Bonds which have been deposited or posted with an Obligee.
|
|
E.
|
“Liabilities”
means
all claims, damages, expenses, costs, fees and liabilities of every nature (including premiums, taxes and duties) (whether actual or contingent, present or future, joint or several, and whether or not subject to the giving of notice related to the Bonds or the Contract) which Surety may sustain or incur by reason of having issued the Bond (s) or by reason of the Principal Obligor’s default under the Contract (including premiums) and shall include but not be limited to account payments, partial payments, or without prejudice payments made by the Surety to the Obligee (s) provided always that the maximum aggregate liability on the part of the Indemnifying Party shall not exceed
US$
57.269.707,00 (FIFTY SEVEN MILLION TWO HUNDRED AND SIXTY-NINE THOUSAND SEVEN HUNDRED AND SEVEN) US DOLLARS
and shall not include indirect or consequential damages.
|
|
F.
|
“Obligee”
means the FONDO DE INVERSION EN TELECOMUNICACIONES (FITEL), with RUC (Peruvian Taxpayer Registration) No. 20514935590 and domiciled at Jr. Zorritos No. 1203, Lima 01, the Republic of Peru, or any entity that may replace it.
|
|
G.
|
“Principal Obligors”
means:
|
2.1. –
|
Upon the occurrence of an
Event of Default,
the
Indemnifying Party and its successors (jointly and severally) unconditionally and irrevocably agree to indemnify and keep indemnified the Surety, holding it harmless from any and all Liabilities in connection with the Bonds paying to Surety upon first demand and before the Surety has made any payment, any and all Liability. A Statement of Loss sworn to by an officer of Surety shall be conclusive evidence of fact and extent of liability of Indemnifying Party to Surety.
|
2.2. –
|
Upon the occurrence of a
Collateralization Event
, Surety has the right, in its sole and absolute discretion to require the Indemnifying Party to pay the Surety on demand for the credit of such account as the Surety may specify for this purpose such amount or amounts that the Surety may specify as being necessary to ensure the full payment of any and all Liability to Obligee.
|
2.3. -
|
Surety shall have the exclusive right, in its sole and absolute discretion, to determine whether any claim, demand, suit or judgement on the Bond (s) shall be paid, settled, defended, prosecuted, compromised or appealed. It shall not be a defence to such enforcement by the Surety that the Surety could or should have resisted or disputed any claim, demand, suit or judgement. The Surety shall submit timely and complete updates regarding any such action to the Indemnifying Party and support the joining of Indemnifying Party to such proceedings (if sought by Indemnifying Party), at Indemnifying Party's costs and expense.
|
2.4. -
|
The Surety shall be entitled to enforce the obligations under this
Deed
against the Indemnifying Party without first proceeding against any Principal Obligor or exercising or exhausting any security held by Surety.
|
2.5. -
|
Should the Obligee request the amendment of the wording, terms or conditions of any Bond the Surety may
cancel, modify, amend or renew or extend the terms and conditions of the said Bond and the Indemnifying Party agrees that it will not release, remove discharge or affect the Indemnifying Party’s liability hereunder and shall provide advance notice to Indemnifying Party of such changes.
|
2.6. -
|
For the avoidance of doubt, clarified that the obligations and undertakings of the Indemnifying Party pursuant to this Deed constitute an indemnity undertaking in accordance with section 16 of the Israeli Guarantee Law 1967 and not a guarantee or surety.
|
3.1.
|
Should any provision of this Deed be held to be unlawful, unenforceable or invalid by a court competent jurisdiction, then (i) such provision is hereby declared to be of no force and effect and this Deed shall be construed as if such provision had not been included herein, (ii) the Surety and the Indemnifying Party shall replace such provision with another provision or provisions which will as closely as possible reflect the commercial intention of the parties hereto and shall not render the other provisions hereof invalid, and (iii) all other provisions of this Deed shall not be rendered invalid as a result of such provision being unlawful, unenforceable or invalid.
|
4.1. -
|
No variation of this Deed shall be effective unless it is in writing and signed by the parties (or their authorized representatives).
|
4.2. -
|
No failure or delay by a party to exercise any right or remedy provided under this deed or by law shall constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other right or remedy. No single or partial exercise of such right or remedy shall prevent or restrict the further exercise of that or any other right or remedy. A waiver of any right or remedy under this Deed or by law is only effective if it is in writing.
|
5.1.
|
Neither party shall assign, transfer, mortgage, charge, subcontract, declare a trust over or deal in any other manner with any or all of its rights and obligations under this Deed without the prior written consent of the other party.
|
6.1.
|
No one other than a party to this Deed shall have any right to enforce any of its terms.
|
7.1
|
This Deed and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of the
State of Israel
.
|
7.2
|
The Indemnifying Party irrevocably agrees that the courts of
Tel Aviv,
Israel,
shall have jurisdiction to settle any dispute or claim arising out of or in connection with this Deed or its subject matter or formation (including non-contractual disputes or claims).
|
8.1.
|
Any notices required to be given under the provisions of this Agreement shall be in writing and shall be deemed to have been duly served if delivered by hand or sent by recorded delivery post correctly addressed to the address of the respective party as specified in this Deed or at such other address as may be designated by the relevant party by notice in writing to the other party from time to time in accordance with this clause 8, and shall be deemed effective as from the date of receipt.
|
9.1.
|
This Deed may be executed in any number of counterparts, each of which when executed and delivered shall constitute a duplicate original, but all the counterparts shall together constitute the one Deed.
|
10.1.
|
The terms and conditions of this Deed comprise the entire understanding of the Parties in connection with the subject matter of this Deed, and they shall prevail over any oral or written understanding, commitment, representation, or undertaking entered into prior to the signing of this Deed.
|
10.2.
|
Each Party shall maintain in confidence and protect the secrecy of all confidential and proprietary information disclosed to it by the other Party (including the existence of this Deed) or disclosed during or in connection of or in performance of this Deed, including all technical, business and pricing information (the "Confidential Information"). Such receiving Party may only disclose such Confidential Information to its associates, partners, agents, representatives, counsels, employees, consultants and, in the case of the Surety, to entities who provide the necessary capacity to issue surety bonds or guarantees. The recipient Party shall in any case inform of the confidential nature of the said Confidential Information and shall, in any case, be responsible for unauthorized use or disclosure of such Confidential Information. Such receiving Party shall not disclose the said Confidential Information to any other person or entity, other than the above mentioned, unless it receives the prior written consent of the disclosing Party. The foregoing obligations shall not apply in the following instances: (i) disclosure of the Confidential Information was required under any applicable law; (ii) the Confidential Information is in the public domain otherwise than as a consequence of a breach of this Deed; or (d) such Confidential Information was previously and demonstrably known to the receiving party, or was subsequently independently developed without use of the confidential information.
|
Blanket Policy nº
|
(PENDING)
|
Policy Holder/ Principal’s Name
|
GILAT NETWORKS PERÚ S.A.
|
Branch and class
|
Contract Surety
Advance Payment Bonds
|
Policy Holder/Principal’s Adresss.
|
AVENIDA CARLOS VILLARÁN Nº 140, TORRE “A” DEL EDIFICIO INTERBANK, PISO 12, URBANIZACIÓN SANTA CATALINA, DISTRITO DE LA VICTORIA, PROVINCIA Y DEPARTAMENTO DE LIMA, PERÚ.
|
Inception Date
|
20/05/2015
|
Policy Holder/Principal’s Province.
|
LIMA
|
Maximum Insured Capital
|
Apurimac Project:
USD 16,532,190
Ayacucho Project
: USD 21,282,882
Huanvelica Project
: USD 19,454,635
Total: USD 57,269,706
|
Insured’s/Obligee`s Name
|
FONDO DE INVERSION EN TELECOMUNICACIONES (FITEL)
|
Rate
|
2,75% (annual) + local taxes and issuance expenses
|
Broker’s Name/Direct insurance
|
JAIME GABEL
|
Title of the work, supply, ...
|
THREE PROJECTS OF REGIONAL TELECOMMUNICATIONS
.
Installation of broadband for the integral connectivity and social development of 3 regions: Apurimac, Ayacucho and Huancavelica.
|
||
Minimum Premium
|
For the first year it will be the Premium equivalent to 6 months of the risk. For the following periods, the premium will be fixed based on the above rate, dates, capitals and advance of the works. We will refund the premium not used in the case the bonds are cancelled before the annuity and always if the minimum Premium is exceeded.
|
Place for the payment of premiums.
|
Perú
|
Policyholder
|
Reinsurer
|
GILAT NETWORKS PERU S.A
|
AMTRUST EUROPE LIMITED
|
1.1)
|
The Indemnifying Party confirms it has received a copy of the AMENDED SCHEDULE Nº 1 (hereby attached) and consents to the provisions of the AMENDED SCHEDULE Nº 1, which, from the date of this deed replaces SCHEDULE Nº 1 attached to the Deed dated 20 May 2015.
|
1.2)
|
The Indemnifying Party confirms that the Deed of Indemnity dated 20 May 2015 remains in full force and effect. For the avoidance of doubt, this Deed of Consent shall not expand the Liabilities for which the Indemnifying Party is liable to Surety pursuant to the original terms of the Letter of Indemnity, dated May 20, 2015 and executed between the Parties hereto.
|
2.1)
|
This Deed may be executed in any number of counterparts, each of which when executed and delivered shall constitute a duplicate original, but all the counterparts shall together constitute the one Deed.
|
Blanket Policy nº
|
20600386442
|
Policy Holder/ Principal’s Name
|
GILAT NETWORKS PERÚ S.A.
|
Branch and class
|
Contract Surety
Advance Payment Bonds
|
Policy Holder/Principal’s Adresss.
|
AVENIDA CARLOS VILLARÁN Nº 140, TORRE “A” DEL EDIFICIO INTERBANK, PISO 12, URBANIZACIÓN SANTA CATALINA, DISTRITO DE LA VICTORIA, PROVINCIA Y DEPARTAMENTO DE LIMA 13, LIMA PERÚ.
|
Inception Date
|
20/05/2015
|
Policy Holder/Principal’s Province.
|
LIMA
|
Maximum Insured Capital
|
Apurimac Project
:
USD 16,532,190
Ayacucho Project
: USD 21,282,882
Huanvelica Project
: USD 19,454,635
Cusco Proyect
:
USD 48,779,550
Total: USD 106,049,257
|
Insured’s/Obligee`s Name
|
FONDO DE INVERSION EN TELECOMUNICACIONES (FITEL)
|
Rate
|
2,75% (annual) + local taxes and issuance expenses
|
Broker’s Name/Direct insurance
|
JAIME GABEL
|
Title of the work, supply, ...
|
THREE PROJECTS OF REGIONAL TELECOMMUNICATIONS
.
Installation of broadband for the integral connectivity and social development of 3 regions: Apurimac, Ayacucho and Huancavelica.
|
||
Minimum Premium
|
For the first year it will be the Premium equivalent to 6 months of the risk. For the following periods, the premium will be fixed based on the above rate, dates, capitals and advance of the works. We will refund the premium not used in the case the bonds are cancelled before the annuity and always if the minimum Premium is exceeded.
|
Place for the payment of premiums.
|
Perú
|
Policyholder
|
Reinsurer
|
GILAT NETWORKS PERU S.A
|
AMTRUST EUROPE LIMITED
|
§
|
GILAT NETWORKS PERU SA
,
identified with RUC No. 20600386442, with domicile at Av. Carlos Villarán 140, Piso 12 Torre A, La Victoria
,
Lima, represented by Arieh Rohrsatock, identified with C.E. N° 000105760, according to powers of attorney registered under the record N° 13431090 of the Public Registry of Corporations of Lima and Yveth Romero Guía, identified with DNI N° 41358105, according to powers of attorney registered under the Record N° 13431090 of the Public Registry of Corporations of Lima who shall be referred hereinafter as
GILAT
; and
|
§
|
AMTRUST INSURANCE SPAIN, SL
, identified with RUC No. 20563308525 with domicile at Calle Monterrosa 233, Oficina 501, Chacarilla del Estanque, Santiago de Surco, represented by Alfredo Eloy Gastón Llosa Carrión, identified with DNI 07274757, and Miguel Pascual Alvarez identified with Spanish Passport No. PAA990396, who shall be referred hereinafter as
AMTRUST
.
|
1.1.
|
GILAT
is a company incorporated in Peru, registered before Lima’s Public Registry of Corporations.
GILAT
is engaged in the execution of telecommunication projects tendered by Peruvian Government’s entities.
|
1.2.
|
GILAT
has been awarded the
Buena Pro
of tender processes summoned by the
Fondo de Inversión en Tslecomuniaciones – FITEL (
dependent of the Telecommunications and Transports Ministry), consisting on the implementation of broad bands for an integral connectivity in the cities of Cusco, Apurímac, Ayacucho and Huancavelica. The terms and conditions of the obligations
GILAT
has assumed are specified in the contracts executed between
GILAT
and FITEL, which are scheduled to this MOU as
Annex 2.
|
1.3.
|
FITEL has paid sums in advance to
GILAT
for the contracts of Apurimac, Ayacucho and Huancavelica. Such funds are held in Bank Accounts No. 1236659-001 (Peruvian Soles) y 1236659-002 (US Dollars) of Banco GNB.
AMTRUST
, through a fronting operation by a Peruvian company authorized to issue payment bonds, has issued payment bonds in favor of
GILAT
for the sums paid in advance for such contracts.
|
1.4.
|
To guarantee the fulfilment of its obligation in the Cusco contract before FITEL,
AMTRUST
will issue via a fronting operation of a Peruvian insurance company, two payment bonds to be held by
GILAT
in favour of FITEL for the sums of US$37’939.650.00 and US$10´839.900.00, to back the sums paid and received in advance, as well as for its faithful compliance, respectively. Both payment bonds (advance and faithful compliance) sum up US$48’779,550.00
|
1.5.
|
AM TRUST
through Rimac Seguros y Reaseguros will issue the Faithful Compliance and Advance payment bonds that
GILAT
must present to FITEL. The terms and conditions in which the payment bonds will be issued by
AMTRUST
are scheduled to this MOU as
Annex 1.
|
1.6.
|
The parties acknowledge that the conditions afore-mentioned and the agreements of this MOU will apply to the payment bonds issued by
AMTRUST
to
GILAT
in Peru.
|
2.1.
|
By means of this MOU,
GILAT
and
AMTRUST
agree to be bound by the terms and conditions of this MOU in relation to the Advance and Faithful Compliance payment bonds issued, and to be issued, by
AMTRUST
, as well as the applicable default procedure. The default procedure to execute the payment bonds that
AMTRUST
will issue is set-forth in the next clause.
|
2.2.
|
In accordance with the previous paragraph,
GILAT
shall, without any exception whatsoever, transfer all and any sum received from FITEL, including the sums paid in advance for the execution of the aforementioned projects, to the bank accounts No. 1236659-001 (Peruvian Soles) y 1236659-002 (US Dollars) of Banco GNB.
|
2.3.
|
GILAT
obliges to irrevocably instruct Banco GNB to transfer all and any sums received as payment or advance payment by Fitel to bank accounts No. 1236659-001 (Peruvian Soles) y 1236659-002 (US Dollars), which will be the only bank accounts held by
GILAT
in Banco GNB, which will likewise be the only bank accounts held by
GILAT
in the Peruvian financial system in order to receive amounts paid by FITEL. It is clearly established that the funds accredited in such accounts will only be released with a previous written and signed authorization from
AMTRUST
officers, Mr. Alfredo Llosa Carrión, identified with ID N° 07275747, with domicile at Calle Monterosa 233, Office 501, Chacarilla, Santiago de Surco, and Mr. Miguel Pascual Alvarez, identified with Spanish Passport No. PAA990396, with domicile at Carretera de la Coruña km. 23,200 Edificio Las Rozas 23 28290 – Las Rozas (Madrid), jointly with the representatives appointed by
GILAT
.
GILAT
obliges itself to fulfill this obligation within the next business day of executing this MOU. The instruction letter that
GILAT
will send to Banco GNB according to what is established in this paragraph must be done with the express character of irrevocable.
AMTRUST
will retain absolute freedom to unilaterally replace its appointed officers directly, in which case
GILAT
will authorize them before the Bank.
|
2.4.
|
Likewise, in a period not longer than a business day after executing this MOU,
GILAT
shall inform FITEL that every payment or advance payment due by virtue of the contracts executed by them must be transferred to the aforementioned bank accounts. In said communication,
GILAT
must instruct FITEL that in case a request is made by
GILAT
for FITEL to wire the payments and/or payments in advance into any other account than the ones previously referred-to, such request must be made known to
AMTRUST
and its attorneys, since failure to do so will render the request as null and FITEL must continue to wire the sums into the bank accounts aforementioned. In any case, if
GILAT
requests to wire the payments and/or payments in advance into a bank account different than the aforementioned bank accounts in Banco GNB, such request will be considered as a default subject to the procedure set-forth in the following clause.
|
2.5.
|
GILAT
will request
AMTRUST
authorization in order to initiate any business in Peru different to those mentioned in this MOU, until the risk undertaken by
AMTRUST
is terminated.
|
2.6.
|
Its expressly agreed that
GILAT
acknowledges and accepts that
AMTRUST
will not authorize any withdrawal of funds from the accounts aforementioned, if as a result of such the remaining balance in the account is lower than the nominal sum of the ongoing exposure of the payment bonds by
AMTRUST
, issued by virtue of the contract executed between
GILAT
and FITEL for the Cusco region.
|
3.1.
|
The execution of any of the payment bonds issued by Rimac Seguros y Reaseguros, as a fronting of
AMTRUST
, will be considered as a default event of
GILAT
. Likewise, a default by
GILAT
on any of its contractual obligations before FITEL –as well as any event that
AMTRUST
may consider a default- in any of the contracts executed with said entity for the broadband projects of Apurimac, Ayacucho, Huancavelica and/or Cuzco, will be considered as a default of this MOU.
|
3.2.
|
A default will also be configured if
GILAT
requests the opening of another bank account in order to receive funds wired by FITEL in any financial institution, and also if it requests FITEL to wire the sums into any other account in Banco GNB.
|
3.3.
|
In case of default by
GILAT
, the bank accounts aforementioned will be administered only by
AMTRUST
, according to the instructions issued by their representatives to the Banco GNB; in which case, the consent or instructions of
GILAT
will no longer be necessary for the administration of such accounts, nor for the withdrawal of its funds. Therefore, by virtue of
GILAT
’s default,
AMTRUST
may –at its own criteria- withdraw funds and/or wire out any and/or all of the funds accredited in the Bank Accounts at Banco GNB.
|
3.4.
|
In order for Banco GNB to acknowledge
GILAT
’s default and act according to the procedure established in the previous paragraphs, a communication by
AMTRUST
to Banco GNB expressing that a default event has arisen will suffice; such communication may be by email or letter without confirmation of reception and must not necessarily accredit the existence of the default event.
|
4.1.
|
The parties represent and warrant that they will perform their best efforts to execute this MOU according to the good faith and common intention of the parties’ rules of article 1362° of the Civil Code.
|
4.2.
|
The parties have the duty to collaborate, which must be met with the maximum efforts when performing the compromised activities and/or obligations.
|
5.1.
|
Any dispute, claim, conflict of interest or legal uncertainty which may arise between the Parties in relation to the execution, validity, interpretation and/or execution of this MOU, shall be settled amicably between them. In this sense, each of the Parties, either directly or through a representative, and in a period not longer than thirty (30) days, will seek a peaceful resolution of the dispute. This period is not renewable and its accrued since the moment in which one of the parties informs its decision to use this mechanism to the other.
|
5.2.
|
If the parties fail to reach an agreement in the manner and within the period mentioned, the matter will be resolved in a Law Arbitration, by a tribunal comprised of three (3) members that must be lawyers registered at the Bar Association. The arbitration will be administered according to the Reglamento de Arbitraje del Centro de Arbitraje de la Cámara de Comercio de Lima (hereinafter, the “Centro”), and by the Centro. The arbitration will be held in Lima, capital of the Republic of Peru, in Spanish language and according to Peruvian Law.
|
5.3.
|
The arbitration tribunal shall be comprised as follows:
|
|
a)
|
Each party shall appoint an arbitrator, and the arbitrators appointed by each of the parties will appoint the third arbitrator, who will act as President of the Tribunal.
|
|
b)
|
In case one of the parties does not appoint its arbitration within fifteen (15) calendars days accrued since the one of the parties expressly informed the other of its will to initiate the procedure, the Centro will appoint the arbitrator.
|
|
c)
|
Likewise, in case the two appointed arbitrators fail to appoint the third arbitrator within fifteen (15) calendar days of the last acceptance of them, the Center will appoint the third arbitrator.
|
5.4.
|
The Law Arbitration will be held in the city of Lima and its duration will not exceed ninety (90) calendar days since the date of the installation of the Arbitration Tribunal to the issuance of the award, unless all the involved parties accept the renewal of such period.
|
5.5.
|
The award issued by the Arbitral Tribunal shall be final and binding.
|
5.6.
|
The expenses of the process shall be assumed equally by both parties.
|
5.7.
|
Likewise, the parties grant jurisdiction to the Arbitration Tribunal to assess the implementation stage of the award, with all of the constraints that the civil and procedure law grant a civil judge.
|
5.8.
|
In case any of the parties decides to file an annulment remedy against the arbitration award before the Peruvian Poder Judicial, first it must constitute a payment bond in favor of the other party, issued by a Peruvian first level bank, for an amount ordered to paid in the award, which will be executable in case such remedy is declared unfounded in a definitive resolution. Such payment bond must be valid for as long as the procedure is ongoing and for at least three (3) months after its end. In this case, the parties hereby expressly make themselves subject to the jurisdiction of the Judges and Tribunals of Lima, waving any other jurisdiction they may be subject to.
|
6.1
|
For purposes of this Contract, the parties reaffirm the domiciles stated in the introduction of this document, in which they will be served with all the communications pertaining to this MOU.
|
6.2
|
Any change of the domiciles must be communicated to the counterparty by notarial letter with an anticipation not minor to 5 business days for the effective date of domicile change; in which case the new domicile must be situated within Lima urban city. The reception of the communication of change of domiciles will give merit to the communications sent prior to that date.
|
7.1
|
Modification of Terms:
This MOU cannot be modified unless by a written addendum executed by and between both parties. Unless otherwise expressly agreed, any modification to the terms of this MOU will have effect from the date in which such modification is duly executed by the representatives duly authorized of such Parties.
|
7.2
|
Titles and Headings:
The titles at the beginning of each paragraph, clause, section of this MOU are only for referral and convenience purposes and do not pretend to be inclusive, definitive or influence in any way the construal, meaning, content or scope of this MOU.
|
7.3
|
Partial Nullity:
If any section, clause, or provision of this MOU is declared invalid, void or unenforceable by judicial or competent government authority, it shall not affect the validity or enforceability of the rest of the Contract or any other paragraph, clause, section or provision hereof which shall remain in full force and effect. In such cases, the Parties agree to remedy any empty or omission though a complementary addenda within thirty (30) calendar days from the notification of the arbitral decision or statement by the competent government authority that declares the paragraph, clause, section or Annex void or unenforceable.
|
7.4
|
No-waiver:
If either party does not uphold its rights or faculties under this Contract, such failure shall not constitute a waiver of such term or condition, and will not affect the right of the Parties to claim to the competent authorities at any time.
|
7.5
|
Language:
This Agreement has been negotiated and written in Spanish. Any translation is for reference only and shall not bind the Parties, prevail in any case, the Spanish version. The Party that requires the translation shall cover the cost.
|
7.6
|
Assignment:
The parties may not assign this MOU or its rights or obligations under it without the previous express consent of the other Party.
|
§
|
AMTRUST INSURANCE SPAIN, SL
, identified with RUC No. 20563308525 with domicile at Calle Monterrosa 233, Oficina 501, Chacarilla del Estanque, Santiago de Surco, represented by Alfredo Eloy Gastón Llosa Carrión, identified with DNI 07274757, and Miguel Pascual Alvarez identified with Spanish Passport No. PAA990396, who shall be referred hereinafter as
AMTRUST.
|
1.1.
|
On 28 December 2015,
GILAT
and
AMTRUST
entered into a Memorandum of Understanding (hereinafter the MOU) by which they agreed the terms and conditions in relation to the Advance and Faithful Compliance performance bonds issued, and to be issued by
AMTRUST
, as well as the applicable default procedure.
|
2.1.
|
The parties agree that in order to make the appropriate precisions to the MOU, clauses 1.4 and 3.1 should be modified according to the following:
|
Gilat Satellite Networks (Holland) B.V.
|
Netherlands
|
Gilat Colombia S.A. E.S.P
|
Colombia
|
Gilat to Home Peru S.A
|
Peru
|
Gilat do Brazil Ltda.
|
Brazil
|
Gilat Satellite Networks (Mexico) S.A. de C.V.
|
Mexico
|
Wavestream Corporation
|
USA/Delaware
|
Gilat Networks Peru S.A
|
Peru
|
Gilat Australia Pty Ltd
|
Australia
|
Gilat Satellite Networks (Eurasia) Limited Liability Company
|
Russia
|
Gilat Satellite Networks MDC (Moldova)
|
Moldova
|
Raysat Bulgaria EOOD
|
Bulgaria
|
Gilat Satellite Communication Technology (Beijing) Ltd.
|
China
|
1.
|
I have reviewed this annual report on Form 20-F of Gilat Satellite Networks Ltd. (the “Company”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
|
4.
|
The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;
|
5.
|
The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent function):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
|
1.
|
I have reviewed this annual report on Form 20-F of Gilat Satellite Networks Ltd. (the “Company”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
|
4.
|
The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;
|
5.
|
The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent function):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
|
/s/ Kost Forer Gabbay and Kasierer
Kost Forer Gabbay and Kasierer
A Member of Ernst & Young Global
|