EX-4.3 Supply Contract



Table of Contents




Exhibit 4.3


SUPPLY CONTRACT FOR

THE PROCUREMENT AND INSTALLATION OF BATAM-

SINGAPORE CABLE SYSTEM (BSCS) PROJECT






No: K.TEL.103/HK.910/ITS-00/2008

Dated March 3rd, 2008









Between




PT
TELEKOMUNIKASI INDONESIA, Tbk




And




NEC CORPORATION





 









Table of Contents















Table of Content




	 	 	 	 	 
	Chapter I

	 	 	2	 
	General Terms and Conditions

	 	 	2	 
	Article 1

	 	 	2	 
	Article 2

	 	 	6	 
	Country of Origin

	 	 	6	 
	Article 3
	 	 	6	 
	Scope of Works

	 	 	6	 
	Article 4

	 	 	7	 
	Standards

	 	 	7	 
	Article 5

	 	 	7	 
	Use of Contract Documents and Information

	 	 	7	 
	Article 6

	 	 	8	 
	Patent Rights

	 	 	8	 
	Article 7

	 	 	9	 
	Bonds

	 	 	9	 
	Article 8

	 	 	10	 
	Authorized Representatives

	 	 	10	 
	Article 9

	 	 	11	 
	Article 10

	 	 	13	 
	Responsibility of TELKOM

	 	 	13	 
	Article 11

	 	 	13	 
	Packing

	 	 	13	 
	Article 12

	 	 	14	 
	Article 13

	 	 	15	 
	Transportation and Storage of Goods

	 	 	15	 







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	Article 14

	 	 	15	 
	Insurance

	 	 	15	 
	Article 15

	 	 	20	 
	Transfer of Title and Risk

	 	 	20	 
	Article 16

	 	 	21	 
	Familiarity with Site and Works

	 	 	21	 
	Site Survey and Design/Drawing

	 	 	22	 
	Article 17

	 	 	22	 
	Site Survey and Design/Drawing

	 	 	22	 
	Article 18

	 	 	23	 
	Permits
and Authorizations

	 	 	23	 
	Article 19

	 	 	24	 
	Provision of Facilities and Labor by CONTRACTOR

	 	 	24	 
	Article 20

	 	 	24	 
	Cooperation with Other Contractors

	 	 	24	 
	Article 21

	 	 	25	 
	Protection of Existing Telecommunication Systems

	 	 	25	 
	Article 22

	 	 	25	 
	Damage to Persons and Property

	 	 	25	 
	Article 23

	 	 	26	 
	Accident or Injury to Workmen

	 	 	26	 
	Article 24

	 	 	27	 
	Workmanship

	 	 	27	 
	Article 25

	 	 	27	 
	Monthly Progress Report

	 	 	27	 
	Article 26

	 	 	28	 
	Cleaning-up

	 	 	28	 
	Article 27

	 	 	29	 
	Inspection and Tests

	 	 	29	 






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	Article 28

	 	 	33	 
	Certificates

	 	 	33	 
	Article 29

	 	 	35	 
	Warranty

	 	 	35	 
	Article 30

	 	 	39	 
	Long Term Support

	 	 	39	 
	Article 31

	 	 	40	 
	Time of Completion

	 	 	40	 
	Article 32

	 	 	41	 
	Spare Parts

	 	 	41	 
	Article 33

	 	 	42	 
	Tools and Measuring Equipment

	 	 	42	 
	Article 34

	 	 	42	 
	Term of Payment

	 	 	42	 
	Article 35

	 	 	45	 
	Contract Price

	 	 	45	 
	Article 36

	 	 	46	 
	Taxes, Levies and Duties

	 	 	46	 
	Article 37

	 	 	47	 
	Contract Change

	 	 	47	 
	Article 38

	 	 	49	 
	Contract Amendments

	 	 	49	 
	Article 39

	 	 	49	 
	Assignment

	 	 	49	 
	Article 40

	 	 	49	 
	Sub-contractors

	 	 	49	 
	Article 41

	 	 	49	 
	Delays in the Works Performance

	 	 	49	 






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	Article 42

	 	 	50	 
	Liquidated Damages

	 	 	50	 
	Article 43

	 	 	51	 
	Termination for Default

	 	 	51	 
	Article 44

	 	 	52	 
	Force Majeure

	 	 	52	 
	Article 45

	 	 	54	 
	Termination for Insolvency

	 	 	54	 
	Article 46

	 	 	54	 
	Termination for Convenience

	 	 	54	 
	Article 47

	 	 	55	 
	Resolution of Disputes

	 	 	55	 
	Article 48

	 	 	56	 
	Language and Measurement System

	 	 	56	 
	Article 49

	 	 	56	 
	Applicable Laws and Compliance with Statutes, Regulations and, By-Laws

	 	 	56	 
	Article 50

	 	 	57	 
	Notices

	 	 	57	 
	Article 51

	 	 	57	 
	Contractor’s Personnel

	 	 	57	 
	Article 52

	 	 	58	 
	Use of Local Personnel

	 	 	58	 
	Article 53

	 	 	59	 
	Software License

	 	 	59	 
	Article 54

	 	 	59	 
	Miscellaneous

	 	 	59	 
	Article 55

	 	 	60	 












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SUPPLY CONTRACT
FOR
THE PROCUREMENT AND
INSTALLATION OF BATAM-SINGAPORE
CABLE SYSTEM (BSCS) PROJECT

BETWEEN
PT TELEKOMUNIKASI INDONESIA, Tbk.
AND
NEC CORPORATION




No.:
K.TEL. 103 /HK.910/ITS-00/2008




This
Contract is made and entered into this Monday of 
3rd - 03 - 2008, by and between the
Parties:




	I.	 	PT TELEKOMUNIKASI INDONESIA, Tbk, a telecommunication services and network provider having
its domicile at Jalan Japati No. 1, Bandung-40133, Indonesia, in this this Contract duly
represented by INDRA UTOYO, in his capacity as Director of IT & Supply, hereinafter in this
Contract referred to as TELKOM; and
	 
	II.	 	NEC Corporation, a company established under the laws of Japan, domiciled at 7-1, Shiba
5-chome, Minato-ku, Tokyo 108-8001, Japan hereinafter referred to as CONTRACTOR, based on the power
of attorney no.POA-07-189 dated February 29th, 2008 in this Contract duly represented by
TAKASHI KODAMA, in his capacity as Manager Group Submarine Networks Division, hereinafter in this
Contract referred to as CONTRACTOR.




TELKOM and CONTRACTOR are individually referred to as “Party” and collectively as the “Parties”.




WITNESSETH





	a.	 	whereas TELKOM has intention to develop the Batam- Singapore cable systim route and has
issued the Request for Proposal (RfP) Document to the CONTRACTOR on December
13rd, 2007;
	 
	b.	 	whereas to respond the TELKOM’s RfP as mentioned in point a. above, the
CONTRACTOR through its letter dated December 28th, 2007, has submitted the
bid




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	 	 	to TELKOM cq. Tender Committee and the bid has been revised
through its letter dated
February 15th,
2008;






	c.	 	whereas the discussions and negotiation has been held between TELKOM and
CONTRACTOR in accordance with Minutes of Meetings on February 22nd, 2008;
	 
	d.	 	whereas TELKOM trough its letter No. : TEL.97/LG000/SUC-A1030000/2008 dated February
28th, 2008, has appointed NEC Corporation as a CONTRACTOR to execution
the Procurement and Implementation of BSCS Project which is amounting to
USD.11,900.000 (Eleven million nine hundred thousand US Dollar) excludes VAT 10%;
	 
	e.	 	whereas CONTRACTOR through its commitment letter dated February 29th, 2008 hereby
commit and agree to carry out the Works expressed its consent to the price agreed and
ability to execute the Works as specified in this Contract in accordance with point c.
mentioned above;




NOW THEREFORE, based upon the above-mentioned considerations, the Parties hereto have agreed to
bind each other into this Contract under the following terms and conditions:










Chapter I


General Terms and Conditions









Article 1

Definitions





	a.	 	“Contract” shall mean the agreement entered into between TELKOM and CONTRACTOR, as recorded in
the Contract form signed by the Parties including all attachments thereto and amendment
documents incorporated by reference therein;
	 
	b.	 	“Batam-Singapore Cable System (BSCS)” means the submarine optical cable
transmission system linking Batam to Singapore under this Contract
	 
	c.	 	“Project” means the Works to be undertaken by CONTRACTOR for the procurement and installation
of Batam-Singapore Cable System, to be carried out on single
responsibility basis.




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	d.	 	“TELKOM” means PT. (PERSERO)
Telekomunikasi Indonesia Tbk, the public state owned company of Indonesia and public to provide the
public telecommunication services and network, acting as the owner of the Project.
	 
	e.	 	“CONTRACTOR” means a contractor who
has signed the Contract with TELKOM for the implementation of the Project on single responsibility
basis.
	 
	f.	 	“Sub-contractor” means any party or parties
approved by TELKOM having a direct contract or contracts with CONTRACTOR for the performance of any
part or parts of the Works to be executed under the Contract.
	 
	g.	 	“Turnkey basis” means the Scope of Work where upon the effective date of this
Contract, CONTRACTOR shall be fully and solely responsible for the survey, design,
development, manufacture, delivery, supply, installation, integration and commissioning of the
System, and the remedying of any defects, so as to make the System ready for service and the
CONTRACTOR shall also do everything necessary as reasonably may be inferred from this
Contract as being required of CONTRACTOR to perform all of its obligations under this
Contract.
	 
	h.	 	“Works” means the objective of the Contract, i.e., supply of Goods, survey, design,
manufacturing, transportation, installation / construction, permits, testing, commissioning,
integrating, complete and operational System as required, documentation, training and any
other associated services or activities whatsoever for the execution of the Project under the
Contract by the CONTRACTOR up to the last Final Acceptance Certificate.
	 
	i.	 	“Goods” means and include all kinds of machinery, apparatus, materials, articles, spare
parts, necessary tools and test equipment, relevant drawings, operation manuals, and handbooks
which is required by CONTRACTOR to fulfill CONTRACTOR’s obligation under this Contract.




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	j.	 	“Services” means the CONTRACTOR’s services and activities such as survey, design, installation/
construction, progress/ quality control, testing, reporting, commissioning and training which the
CONTRACTOR is required to execute under the Contract.
	 
	k.	 	“Request for Proposal” means the documents i.e. “General Conditions”, “Technical
Specifications” and any additional notice which was given to bidder/ CONTRACTOR.
	 
	l.	 	“Contract Price” means the price including any applicable Value Added Tax to the CONTRACTOR
for completion of the Works under this Contract.
	 
	m.	 	“TELKOM’s Project Manager” means TELKOM’s staff duly authorized by TELKOM to act as their
representative for the execution of the Project.
	 
	n.	 	“CONTRACTOR’s Project Manager”
means CONTRACTOR’s person duly authorized by CONTRACTOR to act as their representative for the
execution of the Project.
	 
	o.	 	“Default” means any of negligent act or failure in the implementation of the Project in
respect of the Contract.
	 
	p.	 	“System” means Batam-Singapore Cable System (BSCS).
	 
	q.	 	“Technical Specification” shall mean technical specifications as mutual agreed by both
Parties and as mentioned in the Attachment-7 of this Contract.
	 
	r.	 	“Site” means a place or places to which the Goods are to be delivered or where the Works are
to be performed by the CONTRACTOR.
	 
	s.	 	“Integration” shall mean the integration between the System provided by CONTRACTOR and/or
TELKOM’s system in accordance with the Technical Specification.
	 
	t.	 	Commissioning” means activities that shall be done by the CONTRACTOR in






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	 	 	preparation of the Acceptance Test.
	 
	u.	 	“Acceptance Test (AT)” shall mean physical and electrical characteristic checking of the
installation and materials, and testing of System to test the proper functionality of each
Site as mentioned in Article 27 of this Contract of the Goods installed;
	 
	v.	 	“Acceptance Test Report” shall mean written document being made and signed by Parties hereto
through their respective duly representatives, certifying the Acceptance Test has been
completed and stating the results;
	 
	w.	 	“Acceptance Test Certificate” (ATC hereinafter referred to as BAUT) means an official written statement signed by acceptance test team
assigned by both Parties, indicating that the Works have been performed, completed, tested
satisfactorily and can be operated commercially in accordance with the Contract.;
	 
	x.	 	“Goods Arrival Certificate” means an official written statement issued by TELKOM’s Project
Manager indicating that all of the relevant Goods have arrived at a Site.
	 
	y.	 	“System Acceptance Certificate (SAC) / First Hand-Over Certificate (BAST-I)” means an
official written statement issued by TELKOM’s Project Manager indicating that the Works have
been performed, completed and tested satisfactorily, and handed over from CONTRACTOR to and
accepted by TELKOM in accordance with the Contract and starting of warranty period;
	 
	z.	 	“Final Acceptance Certificate or Second Hand-Over Certificate (BAST-II)” means an official
written statement issued by TELKOM’s Project Manager indicating that the warranty period of 5
(five) years is over and all CONTRACTOR’s obligations has been fulfilled under this Contract.
	 
	aa.	 	“Construction Equipment” means the equipment, tools and machinery including specialized test
equipment brought to the Site by the CONTRACTOR for the execution of the Contract, but not to
be purchased by




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	 	 	TELKOM.
	 
	bb.	 	“Inspector” means the representative(s) or
person(s) duly authorized by TELKOM to inspect the
Goods and Services under the Contract.
	 
	cc.	 	“Effective Date of Contract” or “EDC”
means the date on which contract is signed by TELKOM and the CONTRACTOR in accordance with Article 55.
	 
	dd.	 	“Information” means information whether written or oral, including but not limited to
documentation, specifications, reports, data, notes, drawings, models, patterns, samples,
software, computer outputs, designs, inventions whether patent can be obtained or not and know
how.
	 
	ee.	 	“Months” and “Days” denote Gregorian calendar months and calendar days, respectively.
	 
	ff.	 	“Bill of Quantity” or “BoQ” means the bill of quantities as set out in Attachment-1.










Article 2




Country of Origin





	2.1	 	All Goods supplied under the Contract shall have their origin in the member countries and
territories eligible under the rules of the Government of Indonesia.
	 
	2.2	 	For the purpose of this Article “origin” means the place where the Goods are produced. Goods
are produced when a new product is commercially recognized as a result of manufacturing,
processing of substantial and major assembling of components, and is substantially different
in basic characteristics or in purpose or utility from its components.
	 
	2.3	 	The origin of the Goods is distinct from the nationality of the CONTRACTOR.










Article 3





Scope of Works





	3.1	 	The Scope of this Contract covers the procurement and installation of BSCS Project according
to the configurations, Bill of Quantity, capacity plan, Plan of Work, and




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	 	 	Technical Specification, etc. as set out in this Contract.
	 
	3.2	 	For the purpose of the implementation of the Works, CONTRACTOR shall carry out at least the
followings:






	 	a.	 	Survey, design and engineering;
	 
	 	b.	 	Procurement and or manufacturing of equipment, spare part, tools and measuring equipments and
its accessories and delivery of the equipment to the Site;
	 
	 	c.	 	Implementation, integration of System to existing system;
	 
	 	d.	 	Commissioning and testing;
	 
	 	e.	 	Warranty and long term support;
	 
	 	f.	 	All risk insurance
	 
	 	g.	 	Documentation.






	3.3	 	In the event there is any change the scope of works shall be adjusted and executed under the
amendment pursuant to Articles 37 and 38 of this Contract.
	 
	3.4	 	This Contract covers various steps involved in the procurement and installation of BSCS on a
Turnkey basis.











Article 4





Standards



The Goods
supplied under this Contract shall conform to Attachment-7 (Technical Specification).
When no standard is detailed therein, then the latest standards ITU-T at the time of the Contract
shall be applied. In case, both of standards not obtained than the country of origin standards which
are issued by the relevant institution shall apply.









Article 5



Use of Contract Documents and Information





	5.1	 	The CONTRACTOR shall not, without TELKOM’s prior written consent, disclose the Contract, or
any provision thereof, or any specification, plan, drawing, pattern, list, schedule, sample or
information furnished by or on behalf of TELKOM in connection therewith, to any person other than a
person employed by the CONTRACTOR in the performance of the Contract. Disclosure to any such
employed person shall be made in confidence and shall extend only so far as




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	 	 	may be necessary for the purpose of performance of the Works.
	 
	5.2	 	The CONTRACTOR shall not, without TELKOM’s prior written consent, make use of any document or
information enumerated in Article 5.1 except for purpose of performing the Contract.
	 
	5.3	 	Any documents, mentioned in Article 5.1 other than the Contract itself, shall remain the
property of TELKOM and shall be returned (and all copies) by the CONTRACTOR to TELKOM on
completion of the Contract if so required by TELKOM.










Article 6

Patent Rights





	6.1	 	The CONTRACTOR shall indemnify TELKOM against all third party claims of infringement of
patent, trademark, copyrights or industrial design rights arising from the use of the Goods,
the performance of the Works or the operation of the System, or any part thereof in Indonesia.
	 
	6.2	 	The CONTRACTOR shall only have the obligations as set out in this Article 6, if TELKOM: a)
gives CONTRACTOR prompt written notice of any alleged or actual claims, b) allows CONTRACTOR
on its request to directly or indirectly control the defense and/or settlement of such claim,
c) does not consent to any judgment or decree or does any other act in compromise of any claim
without first obtaining CONTRACTOR’s written consent, and d) provides CONTRACTOR all
reasonable cooperation and information as may be requested by CONTRACTOR.
	 
	6.3	 	Furthermore, such indemnity shall not cover such infringement or claim arising from:






	 	1)	 	The CONTRACTOR’s adherence to TELKOM’s direction to use materials or parts of TELKOM’s
selection; or
	 
	 	2)	 	Such material or parts furnished to the CONTRACTOR by TELKOM, other than in each case, a)
items of the CONTRACTOR’s design or selection or






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	 		 	b) the same as any of the CONTRACTOR’s commercial
merchandise or in processes or c) machines of the CONTRACTOR’s design or selection used in the
manufacture of such standard products or parts; or
	 
	 	3)	 	Use of the Goods other than for the purposes indicated in, or reasonably to be inferred from,
this Contract or in conjunction with other products; or
	 
	 	4)	 	Modification of the Goods by TELKOM, without prior expressed written
approval by CONTRACTOR.










Article 7

Bonds





	7.1.	 	The performance bond shall be established in US Dollar currency and shall be in surety bond
or bank guarantee issued by insurance company or bank according to TELKOM requirement (Bank
Mandiri, BNI 46, Bank Rakyat Indonesia Bank BUKOPIN, Bank Mega, Ban NISP, Bank BCA, Bank
Niaga, Citibank, Standard Chartered Bank, ABN AMRO, HSBC, Asurandi JASINDO,
Asuransi Kredit Indonesia, Asuransi Eksport Indonesia) amounting of 5% (five percent) of the
Contract Price. The performance bond shall be valid until the issue date of BAST-I.
	 
	7.2.	 	The performance bond shall be submitted by CONTRACTOR to TELKOM within 7 (seven)
calendar days after signing of this Contract, address to:
	 
	 	 	PT Telekomunikasi Indonesia, Tbk.
 Att. Operation Manager
 Finance Center Area-08 Sub-01
 Jalan Japati
No. 1, 2nd Floor
 Bandung 40133
	 
	7.3.	 	The performance bond shall be released by TELKOM to CONTRACTOR after the issuance of
BAST-I.
	 
	7.4.	 	In the event CONTRACTOR fails to accomplish the Works or its parts in
accordance with the terms and conditions of this Contract, due to gross negligence and/or




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	 	 	willful misconduct of CONTRACTOR, then CONTRACTOR and TELKOM shall meet to review the situation. If
the CONTRACTOR failed to make good such default, then TELKOM is entitled to forfeit the performance
bond with prior written consent from CONTRACTOR which shall become property of TELKOM.
	 
	7.5.	 	The release of peformance bond as described in Article 7.4 above shall not waive
CONTRACTOR’s obligation as described in this Contract.
	 
	7.6.	 	The advance payment bond shall be established in form of surety bond or bank
guarantee issued by insurance company or bank according to TELKOM’s requirement mentioned in
Article 7.1 amounting of 15 % (fifteen percent) of the Contract Price.
	 
	7.7.	 	The CONTRACTOR shall submit to TELKOM the advance payment bond
together with the invoice for 15% payment.
	 
	7.8.	 	The advance payment bond shall be released by TELKOM to CONTRACTOR after the issuance of
BAST-I.
	 
	7.9.	 	The warranty bond shall be in form of surety bond or bank guarantee issued by insurance
company or bank according to TELKOM’s requirement mentioned in Article 7.1 amounting
of 5% (five percent) of the Contract Price.
	 
	 	 	The warranty bond shall be valid for five (5) years from the date of related BAST-I.
	 
	7.10.	 	The CONTRACTOR shall submit to TELKOM the warranty bond together with the invoice for 85%
payment.










Article 8

Authorized Representatives





	8.1	 	TELKOM has appointed SGM Supply Center as TELKOM’s Project Manager who shall be duly
authorized to act on their behalf for the execution of the Project.
	 
	8.2	 	The CONTRACTOR, immediately after the
signing of the Contract, shall duly appoint




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	 	 	his Project Manager and notify TELKOM for approval thereof. The curriculum vitae of the
CONTRACTOR’s Project Manager shall be submitted to TELKOM together with the notification.
	 
	8.3	 	The CONTRACTOR’s Project Manager shall
be duly authorized to act on behalf of the CONTRACTOR with respect to any and all matters relating
to the performance of the Contract, and he shall give full technical information to TELKOM.










Article 9

CONTRACTOR’s Responsibility





	9.1	 	The CONTRACTOR shall be fully responsible to conduct desktop
study, permits, cable route survey, design, develop, engineering, manufacture, supply,
install, training and test the System in accordance with all the terms and conditions
contained in the Contract including any integration of the System and for ensuring that the
System is fully compliant with the Contract and the CONTRACTOR shall not claim any
additional payment nor be relieved from any obligation imposed on it by this Contract on
grounds of any information supplied by TELKOM on any matter whatsoever related to
this Contract. In the event the Goods are to interoperate with third party’s equipment,
TELKOM shall be obligated to provide the necessary interfaces of the respective third party’s
equipment.
	 
	9.2	 	The CONTRACTOR shall be deemed to have reviewed the Works as a whole and in detail and to
have fully satisfied itself of the feasibility and practicability thereof.
	 
	9.3	 	In addition to the requirements for the provision of technical information
described in the Contract, the CONTRACTOR shall, upon request, provide the TELKOM with such
additional technical information in connection with the Contract as the
TELKOM may reasonably require.
	 
	9.4	 	In case any damage, loss or injury happens to
the Goods and Services, or to any part thereof, from any cause whatsoever, except the “excepted
risks” as defined in Article 9.6 while the CONTRACTOR shall be




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	 	 	responsible for the care thereof, the CONTRACTOR shall, at his own cost, repair and make good the
same, so that the Works shall be in good order and condition and in conformity in every respect
with the requirements of the Contract.
	 
	9.5	 	In the event of any damage, loss or injury happening from any of the excepted risks, the
CONTRACTOR shall, if and to the extent required by TELKOM and subject to Article 46, repair
and make good the same as aforesaid at the cost of each party. The CONTRACTOR shall also be
liable for any damage to the Works occasioned by him in the course of any operation carried
out by him for the purpose of completing any outstanding Works or complying with his
obligations according to time completion under Article 31.
	 
	9.6	 	The “excepted risks” are war, hostilities (whether war be declared or not), invasion,
act of foreign enemies, rebellion, revolution, insurrection or military or usurped power,
civil war, or unless solely restricted to employees of the CONTRACTOR or of his
Sub-contractors and arising from the conduct of the Works, riot, commotion or disorder, or use
or occupation by TELKOM of any part of the Works, or ionizing radiations or
contamination by radio activity from any nuclear fuel or from any nuclear waste from the
combustion of nuclear fuel, radio-active toxic explosive, or other hazardous
properties of any explosive, nuclear assembly or nuclear component
thereof, pressure waves caused by aircraft or other aerial devices traveling at sonic or
supersonic speeds, or any such operation of the forces of nature as an experienced CONTRACTOR
could not foresee or reasonably make provision for or insure against all
the excepted risks.
	 
	9.7	 	The CONTRACTOR shall not take advantage of any apparent error or omission in
the Contract documents. In the event CONTRACTOR discovers any error or
discrepancy, CONTRACTOR shall immediately call upon TELKOM for their
interpretation, and such error or discrepancy shall be corrected upon the mutual consent






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	 	 	between TELKOM and the CONTRACTOR.
	 
	9.8	 	The CONTRACTOR shall pay due attention to the Works and shall cooperate with TELEKOM’S
Project Manager, TELKOM’s staffs, and further with other
CONTRACTORs having connection with
the execution of the Project.
	 
	9.9	 	The CONTRACTOR shall conform to Attachment-2 (Plan of Work).
	 
	9.10	 	The CONTRACTOR shall attend at the
CONTRACTOR’s own expenses such meetings with the TELKOM representatives at such times as may be
required by the TELKOM.










Article 10

Responsibility of TELKOM





	10.1	 	The duties of TELKOM’s Project Manager
will supervise the Works and examine workmanship of CONTRACTOR employed in the execution of the
Works.
	 
	10.2	 	Any written instruction or approval given by TELKOM’s Project Manager to the CONTRACTOR
within his capacity shall refer to the Contract and bind the CONTRACTOR as if it had been
given by TELKOM.










Article 11

Packing





	11.1	 	The CONTRACTOR shall provide such packing of the Goods as is required to prevent their damage
or deterioration during transit to their final destination as indicated in the Contract. The
packing shall be sufficient to withstand, without limitation, rough handling during transit,
exposure to extreme temperatures, briny environment, and
condensation/precipitation during
transit and open storage. Packing case size and weights shall take into consideration, where
appropriate, the remoteness of the Goods final destination and the absence of heavy handling
facilities at all points in transit.
	 
	11.2	 	Any case, crate, bundle, and whatever method of packing the Goods for shipping and/or
delivery, shall bear the following




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	 	 	identification legibly and indelibly marked on at least 2 (two) external sides or places :




PT.
(Persero) Telekomunikasi Indonesia, Tbk
 Att. : TELKOM Infrastructure Division



Procurement and Installation of Ring Kalimantan — Sulawesi




	 	 	 
	CONTRACT NO.

	 	:
	LICENSE NO.

	 	:
	SITE

	 	:
	CASE NO.

	 	: (A/B/C) *)
	PORT OF DESTINATION

	 	:
	INVOICE NO. & DATE

	 	:
	NET WEIGHT

	 	:
	GROSS WEIGHT

	 	:
	VOLUME

	 	:
	(LENGTH/WIDTH/HEIGHT)







 







	*)	 	A : Sequence No. of cases


B : Total No. of cases in shipment


C : Sequence No. of shipment






	 	 	The detailed address shall be given to
CONTRACTOR.
	 
	11.3	 	The CONTRACTOR shall comply with any subsequent instruction given or alteration required by
TELKOM pertaining to packing, marking, and documentation inside and outside of any pieces of
shipment or delivery.










Article 12

Delivery and Documents





	12.1	 	Delivery of the Goods shall be made by the CONTRACTOR in accordance with the Contract.
	 
	12.2	 	All physical deliveries covered by this Project shall be accompanied by a consignment note,
which includes:






	 	a.	 	Name and registered office of CONTRACTOR;
	 
	 	b.	 	Contract number;
	 
	 	c.	 	Date of shipment and delivery;
	 
	 	d.	 	Country of Origin;
	 
	 	e.	 	Quantities included.






	12.3	 	TELKOM shall visually inspect the Goods on delivery to the installation Site based on a copy
of the Goods shipping documents and TELKOM’s Project Manager shall promptly




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	 	 	issue a Goods Delivery Certificate if there is no obvious physical damage to the Goods and the
quantity of Goods delivered is correct according to the supporting documentation provided.






	12.4	 	For the purpose of the Contract, “FOB”, “CIF”, “DDU” and “DDP” used to describe the
obligations of the Parties shall have the meanings assigned to them in the current edition of
the International Rules for the Interpretation of the Trade Terms published by the
International Chamber of Commerce, Paris, and commonly referred to as INCOTERMS 2000.










Article 13

Transportation and Storage of Goods





	13.1	 	Partial shipment is acceptable. The CONTRACTOR is encouraged, to the extent practicable and
reasonable, to utilize Indonesian Flag carrier vessels.
	 
	13.2	 	The Goods delivered to Site shall be stored in the
CONTRACTOR’s storage area until actually
required for incorporation of the Works. The CONTRACTOR shall be responsible for the safety of
the Goods during storage. The CONTRACTOR shall be aware of the high humidity and its effects
to Goods subject to corrosion in storage areas in Indonesia.
	 
	13.3	 	The CONTRACTOR shall be responsible for the handling and safe movement of the Goods during
off-loading from and loading into transport, until the completion of the Contract.
	 
	13.4	 	The CONTRACTOR shall be responsible for the payment of all expenses for clearing the Goods
through the port of arrival, for transportation to Site and storage.










Article 14

Insurance





	14.1	 	Without limiting its obligations and responsibilities, the CONTRACTOR shall, prior to the
commencement of any Work, and at its own expense, provide evidence within seven (7) calendar
days from the




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	 	 	signing of the Contract, insurance to cover its liabilities throughout the Contract and in the
joint name of TELKOM and the CONTRACTOR as the insured :






	a.	 	(i) the Works and any work in progress of every kind required for the execution, testing and
completion of the Works including, but not limited to, the completed item to the full value of
such Works and any work in progress executed from time to time,
	 
		 	(ii) all appliances, instruments or things of whatsoever nature required in or pertaining to the
execution, testing and completion of the Works, constructional plant, the materials and other
things brought on to the Site by the CONTRACTOR to the full value of such constructional plant,
materials and other things, against all losses or damages from whatever cause in respect of all
risks including, but not limited to, marine cargo (Note 1), sea bed (Note 2) and war risk (Note 3)
arising for which it is responsible under the terms of the Contract and in such manner that TELKOM
and the CONTRACTOR are covered during the period of construction of the Works;
	 
	b.	 	against any damage, loss or injury which may occur to any property (including that of TELKOM)
or to any person (including any employee of TELKOM) as a result of the execution of the Works
or temporary work;
	 
	c.	 	against any damage or compensation payable under statute or at law in respect or in
consequence of any accident or injury to any person in the employment of the CONTRACTOR or any
Sub-contractor. The CONTRACTOR shall indemnify and keep indemnified TELKOM against all such
damages, compensation, claims, demands, proceedings, costs, charges and expenses, whatsoever
in respect thereof at its own expenses;
	 
	d.	 	a general liability policy, sufficient to cover its liability under the Contract until the
end of the warranty period or any extension thereto.




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The Contract Price shall include any premium amounts paid or to be paid by the CONTRACTOR for the
insurance coverage hereinabove stated.





	Note 1	 	Marine cargo or equivalent coverage is required to protect against all risks of physical
loss or damage to the cable, terminal station equipment and other equipment to be included in
the System (other than war risks) beginning with the date when each such equipment is ready
for shipping and ending when the cable is placed over side the cable laying vessel and when the
terminal station equipment is delivered to the terminal stations.
	 
	Note 2	 	Sea bed or equivalent coverage is required to protect against all risks of physical loss or
damage to the equipment described in Note 1 above (other than war risks) from the time
coverage under Note 1 above ends until the issuance of the Certificate of System Acceptance.
	 
	Note 3	 	War risks or equivalent coverage is required to protect against damage to, seizure by
and/or destruction of the System by means of war, piracy, takings at sea, other warlike
operations and “excepted risks” as stated in Article 9.6 until the issuance of the System
Acceptance Certificate.






	14.2	 	Upon the issuance of each policy relative to such insurance and not later than fifteen (15)
calendar days prior to each renewal thereof, the CONTRACTOR shall furnish TELKOM with evidence
acceptable to TELKOM including but not limited to a copy of the insurance policy and insurance
certificate, evidence that the relevant premiums have been paid and that the said policy is
and will continue to be in full force, and an undertaking letter from the insurance company
that the provisions included above in Article 14.1 are in effect.




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	14.3	 	For all insurance to be effected, the CONTRACTOR is encouraged, to the extent practicable and
reasonable, to use an Indonesian government insurance company.
	 
	14.4	 	The insurance shall be effected, wherever applicable, in such a manner that TELKOM and the
CONTRACTOR are covered :






	 	a.	 	for the period specified in Article 31 of this Contract.
	 
	 	b.	 	during the warranty period for any loss or damage arising from a cause occurring prior to the
commencement of the warranty period, and
	 
	 	c.	 	for any loss or damage occasioned by the CONTRACTOR in the course of any operation carried
out by him for the purpose of complying with his obligations under Article 29.






	14.5	 	If the CONTRACTOR shall fail to effect and keep in force the insurance specified herein,
TELKOM may effect and keep in force any such insurance and pay such premium or premiums as may
be necessary and from time to time deduct the amount so paid by TELKOM from any money due or
which may become due to the CONTRACTOR, or recover the same as a debt due from the CONTRACTOR.
The CONTRACTOR shall be liable to TELKOM for the full consequences of his failure to insure
under this Contract.
	 
	14.6	 	The CONTRACTOR shall furnish TELKOM with a copy of any insurance policy to be effected under
the Contract upon TELKOM’s request. The CONTRACTOR shall further furnish TELKOM with draft
copies of his proposed contracts of insurance immediately after the receipt of notification of
award and formal copies immediately after such insurance come into effect.
	 
	14.7	 	Unless otherwise specifically agreed upon by the Parties, it shall be the responsibility of the
CONTRACTOR to notify the insurance company, and proceed with all claims arising from any
damage or loss of the Goods and




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	 	 	Works covered by the insurance on behalf of and for TELKOM.






	14.8	 	All money received under the insurance policy either by the CONTRACTOR or by TELKOM shall be
applied towards the replacement or repair of the Goods and/or the Works found missing or
damaged. The CONTRACTOR shall be responsible for replacement or repairing of the items within
the settlement.
	 
	14.9	 	The CONTRACTOR shall indemnify TELKOM against all claims, losses, expenses, etc. arising out
of or resulting from any default by the CONTRACTOR in complying with the requirements of this
Article.
	 
	14.10	 	Marine Insurance.
	 
	 	 	Marine Insurance of the Goods shall be effected in the name of CONTRACTOR from “warehouse to
warehouse” on “All Risks” basis including war risks and strike Articles.
	 
	14.11	 	Local Transportation Insurance.
	 
	 	 	For Goods supplied from within Indonesia, insurance for local transportation shall be effected in
the name of CONTRACTOR in a full amount of the ex-factory value of the Goods from the place where
the Goods are shipped to a designated Site.
	 
	14.12	 	CONTRACTOR’S All Risks Insurance.
	 
	 	 	CONTRACTOR’S All Risks Insurance shall be effected prior to commencement of the Works in the name
of CONTRACTOR to cover all risks other than the excepted risks as mentioned in Article 9.6 of
during the execution of the Works against physical loss of or damage to all Goods and Works to the
full value until the issued of System Acceptance Certificate, as security for repairment of the
Work.
	 
	14.13	 	Third Party Liability Insurance
	 
	 	 	Third party liability insurance shall be effected prior to commencement of the Works to insure
against the




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	 	 	CONTRACTOR’S liability for any material or physical damage, loss or injury which may occur to any
property, including that of TELKOM or to any person, including any employee of TELKOM, by or
arising out of the execution of the Works or in the carrying out of the Contract.






	14.14	 	Workmen’s Compensation Insurance
	 
	 	 	Prior to commencement of the Works, the CONTRACTOR shall effect and shall maintain during the
period of Contract, Workmen’s compensation insurance for all personnel employed by him and the
people who work with CONTRACTOR, in connection with the Works, as security for compensation
benefits pursuant to the applicable laws of Indonesia against the Works related to injury or
employer’s liability.










Article 15

Transfer of Title and Risk





	15.1	 	The transfer of title and risk of the System from CONTRACTOR to TELKOM shall take place when
the System Acceptance Certificate has been issued by TELKOM. The transfer of title shall not
absolve or release the CONTRACTOR from its obligations and its liabilities under the Contract.
	 
	15.2	 	Upon transfer of title and risk of the System to TELKOM, the CONTRACTOR warrants that the
System is free from valid liens, claims, charges, encumbrances and security interests arising
by and through the CONTRACTOR and/or under its government’s rules and regulations.
	 
	15.3	 	The transfer of title and risk from CONTRACTOR to TELKOM shall take place when System
Acceptance Certificate has been issued by TELKOM and commencing the CONTRACTOR’S
responsibility for the Warranty obligation as mentioned in Article 29.
	 
	15.4	 	Upon the transfer of title and risk of the System to TELKOM as described in Article 15.3, the
CONTRACTOR also warrants that the System has fulfilled all statutory requirements and permits
including but not






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	 	 	limited to any governmental, non. governmental permits, with respect to the performance of the
Works.










Article 16

Familiarity with Site and Works





	16.1	 	The CONTRACTOR shall be deemed to have familiarized himself with the nature of Site of the
Works, the general and local conditions and regulations of Site and all other matters which
can in any way affect the Works and Time of Completion under the Contract.
	 
	16.2	 	The CONTRACTOR shall be deemed to have satisfied himself at the time of Contract as to the
correctness and sufficiency of his price stated in the price schedule which shall cover all
his obligations under the Contract for proper performance, completion and maintenance of the
Works. It is entirely the CONTRACTOR’s responsibility for any errors in the computation or
summation of the price schedule or for any incorrect perception of the Scope of Works and for
the quality of the System to be attained at the completion of the Project. TELKOM will not
compensate the CONTRACTOR for any financial loss, or for any errors discovered after the bid
submission or during the execution of the Contract.
	 
	16.3	 	The CONTRACTOR shall, by careful examination, satisfy himself in respect of all pertinent
conditions which may in any manner affect the execution of the Works, such as, but not limited
to, the nature and location of the Works to be performed, the character, quality and quantity
of the Goods to be delivered, the CONTRACTOR’s facilities including the construction equipment
to be used, labor condition, transportation conditions and general and local laws and
regulations. The CONTRACTOR will ensure that any allowance for all the foregoing factors and
all other risks, conditions or other circumstances has been included in the Contract Price. No
claim shall be considered for extra costs or extensions of time due to any difference between
the actual conditions and those which may have been anticipated by the CONTRACTOR.




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Article 17

Site Survey and Design/Drawing





	17.1	 	The CONTRACTOR shall at his own expense conduct Site survey to perform all
CONTRACTOR obligations in this Project, review the plans furnished by TELKOM and prepare the
installation designs/ drawings and Bill of Quantity.
	 
	17.2	 	The installation designs/drawings shall be prepared with due consideration of economic and
quality aspect of the System, fully reflecting the Site conditions.
	 
	17.3	 	Survey reports and installation designs/drawings shall be
submitted to TELKOM for approval, section by section where applicable, within such
time as specified in the Attachment-7 (Technical Specification).
	 
	17.4	 	TELKOM’s approval of survey reports and installation designs/ drawings shall not relieve the
CONTRACTOR of any of his obligation under the Contract.
	 
	17.5	 	If, during the execution of the Works, modification of the
CONTRACTOR’s installation designs / drawings becomes necessary, the CONTRACTOR shall
notify TELKOM of his finding at the Site and obtain approval for such modifications from
TELKOM. Any modifications of designs/ drawings shall be made without extra costs to TELKOM.
	 
	17.6	 	Except for the CONTRACTOR’s own reason, any increase or decrease of the
Contract Price, occasioned by variation in quantities of the Goods installed and the Works
performed based on modification of designs / drawings approved or instructed by TELKOM,
shall be equitably adjusted as mentioned in Article 37.
	 
	17.7	 	CONTRACTOR shall prepare the detailed design and the installation drawings for all the
System and facilities based on Attachment-7 (Technical Specifications).
	 
	 	 	Such design and installation drawings shall be submitted to TELKOM’s Project Manager at least one
(1) month after Design Review





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	 	 	Meeting.
	 
	 	 	TELKOM’s Project Manager shall give CONTRACTOR approval for such design and installation drawings
within fourteen (14) calendar days after the submission.
	 
	17.8	 	If TELKOM’s Project Manager requires to modify such design and installation drawings after
approval pursuant to Article 17.7 above, CONTRACTOR shall submit to TELKOM’s Project Manager
modification application by clarifying its scope. Such modification can be made only when it
approved in writing by TELKOM’s Project Manager. Both of increase or decrease of the Contract
Price due to such modification shall be followed by the Contract amendment.










Article 18

Permits and Authorizations





	18.1	 	The CONTRACTOR shall be responsible to obtain permits and authorizations from the government
and or the third parties when deemed to be necessary for the execution and finishing the
Works.
	 
	18.2	 	TELKOM shall assist the CONTRACTOR, sub-contractor(s) and their non-Indonesian personnel in
obtaining in Indonesia residence/work permits by issuing sponsorship letters. For this
purpose, list of expatriate personnel assigned to Indonesia on a full time basis, shall be
submitted to TELKOM within 30 (thirty) days prior to their arrival in Indonesia. Such list
shall include the names of each person, passport number, intended assignment and
responsibilities, and should be accompanied by curriculum vitae and certificates of graduation
(final education).
	 
	18.3	 	TELKOM shall assist the CONTRACTOR in obtaining permits and authorizations from the
government and municipal authorities for entry into occupation and excavation of the property
of a third party for the execution of the Works therein upon the CONTRACTOR’s request.




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	18.4	 	At least kind of permits shall be obtained by TELKOM and the CONTRACTOR respectively as
stated in Attachment-10 (Permit Matrix).










Article 19

Provision of Facilities and Labor by
CONTRACTOR





	19.1	 	Unless otherwise specially defined, the CONTRACTOR shall, at his own expense, provide
Construction Equipment, test equipment, test programs, materials, tools, labor,
water, drainage, fuel, oil, electricity, utilities, transportation, and all other facilities
and services, and safety measures, as well as any temporary sheds, platforms, offices,
warehouse, guard posts, and other structures necessary for proper execution of the Contract.
	 
	19.2	 	The CONTRACTOR shall be responsible for proper fencing (if necessary), guarding,
lighting and watching of all Works on Site until the Works have been completed and accepted by
TELKOM.
	 
	19.3	 	The CONTRACTOR shall also be responsible for the proper provision
of temporary roadways, and guards, safety signs for the accommodation, protection and safety
of the owners and occupiers of adjacent properties, the public and others.
	 
	19.4	 	The facilities and labor provided by the CONTRACTOR specified in Articles 19.1 and 19.2.
above shall comply with the Technical Specification, and relevant laws, ordinances and
regulations in Indonesia and shall be subject to the approval of TELKOM.










Article 20

Cooperation with Other Contractors





	20.1	 	The CONTRACTOR shall conduct his Services so as not to interfere with, or hinder, the
progress or completion of the works being performed by other contractor(s) involved
in the execution of this or any other project.
	 
	20.2	 	The CONTRACTOR shall cooperate with other contractor(s) concerned with Project, and in case of
any dispute, the matter shall be






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	 	 	referred to and settled among TELKOM, the CONTRACTOR and other contractor(s).
	 
	20.3	 	The CONTRACTOR shall, as far as possible, arrange his Works and place and dispose of the
Goods being used, so as not interfere with the installation and/ or the operation of other
contractors. The CONTRACTOR shall execute the Services in an acceptable manner and coordinate
with other contractors.










Article 21

Protection of Existing Telecommunication Systems





	21.1	 	During the implementation of Project period, the CONTRACTOR shall pay special
attention to protect the continuity of the operation of the existing telecommunication
systems.
	 
	21.2	 	In the event that any damage should occur, due to the execution of the Works, the
CONTRACTOR shall be responsible for the costs incurred for the repairs of such damage. The
CONTRACTOR shall not be liable to any consequential, incidental or indirect damages.
The CONTRACTOR’s maximum aggregate liability, whether in tort, contract or otherwise, shall be
limited to one hundred (100) percent of the Contract Price.
	 
	21.3	 	In the event that the CONTRACTOR fails or refuses to incur the costs thereof, TELKOM shall,
without prejudice to its other remedies under the Contract, deduct the cost of such damage
from payment to the CONTRACTOR.










Article 22

Damage to Persons and Property





	22.1	 	This Article applies to all claims, losses, expenses and damages for:






	 	a.	 	injuries to or death of any persons; and
	 
	 	b.	 	damage to property, other than the System;






	 	 	which result directly from the activities of the CONTRACTOR, its Sub-contractors, or agents in the
execution of the Contract.




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	22.2	 	The CONTRACTOR shall be liable for all claims, losses, expenses, and damages
described in Article 22.1 above, and shall indemnify and save the TELKOM harmless from all
such claims, losses, expenses and damages.
	 
	22.3	 	TELKOM shall:






	 	a.	 	provide immediate written notice to the CONTRACTOR of all such claims and suits;
	 
	 	b.	 	permit the CONTRACTOR to assume the sole defense of and to settle such claims or suits,
and shall, upon the CONTRACTOR’s request and at the
CONTRACTOR’s expense, furnish all information and reasonable assistance to assist the
CONTRACTOR in the defense or settlement of the same.






	22.4	 	The CONTRACTOR shall be responsible for the costs of clean-up and other costs resulting from
environmental damage which results directly from the activities of the CONTRACTOR, its
Sub-contractors or agents in the execution of the Contract.










Article 23

Accident or Injury to Workmen



TELKOM shall not be liable for any damage or compensation payable at law in respect to or in
consequence of any accident or injury to any workman or other person in the employment of the
CONTRACTOR or any Sub-contractor, except an accident or injury resulting from any act or default of
TELKOM. The CONTRACTOR shall indemnify and keep indemnified TELKOM against all such damages and
compensation, except as aforesaid, and against all claims, proceedings, costs, charges and expenses
whatsoever in respect thereof or in relation thereto.




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Article 24

Workmanship





	24.1	 	No work shall be covered up or put of view without the approval of TELKOM and the CONTRACTOR
shall afford full opportunity for TELKOM to examine and measure any work which is about to be
covered up or put out of view and to examine in the reasonable time before permanent
work is placed thereon. The CONTRACTOR shall give due notice to TELKOM whenever any such
work ready for examination and TELKOM shall, without unreasonable delay, unless he
considers it unnecessary and advises the CONTRACTOR accordingly, attend for the
purpose of examining and measuring such work.
	 
	24.2	 	Any part of the Works found not to be in compliance with the Contract shall be
promptly reconstructed accordingly by the CONTRACTOR at his own expense. No extension of Time
of Completion and no additional cost shall be made in connection therewith.










Article 25

Monthly Progress Report





	25.1	 	The CONTRACTOR shall submit progress report to TELKOM’s Project Manager by e-mail within the
first five (5) calendar days of the following month. The first report is to be issued at
the second month from the Effective Date of Contract.
	 
	25.2	 	Progress report shall describe the progress of the Works by proving and evidencing
objectively the amount of the Works completed in the months concerned.
	 
	 	 	The CONTRACTOR’s special attention shall be directed to preparation of progress report in such
manner and such form that TELKOM can easily examine and confirm the amount of the Goods supplied /
installed and the Works performed.
	 
	25.3	 	Progress Report shall cover the following items:




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	 	a.	 	Total progress for the last 2 (two) months and at the end of the months;
	 
	 	b.	 	Goods supplied/ installed and Work completed measured in terms of value for each Site
and each for the months concerned and as of the end of the months;
	 
	 	c.	 	The CONTRACTOR’s manpower mobilization for the months concerned;
	 
	 	d.	 	Major problems encountered;
	 
	 	e.	 	Anticipated Works for the following 4 (four) months;
	 
	 	f.	 	Inventory report;
	 
	 	g.	 	Undelivered Goods and shipment schedule;
	 
	 	h.	 	Pertinent information which TELKOM may request, and






	 	The CONTRACTOR shall submit the format of progress report to TELKOM for its approval within 30
(thirty) days after the Effective Date of the Contract.










Article 26

Cleaning-up





	26.1	 	The CONTRACTOR shall at all times pay due attention to sanitation at Site and keep the Site
free from accumulation of waste materials or rubbish caused by his Works.
	 
	26.2	 	At the completion of the Works the CONTRACTOR shall remove all the surplus
materials and rubbish from Site as well as his Construction Equipment, and
waste materials, within such time as designated by TELKOM’s Project Manager.




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Article 27

Inspection and Tests





	27.1	 	Inspection and Test of the Goods






	 	a.	 	TELKOM or the Inspector shall have the right to inspect and/ or test the Goods in order to
confirm their conformity to the Contract.
	 
	 	b.	 	The inspections and tests may be conducted on the premises of the
CONTRACTOR or its Sub-contractor(s), at the point of delivery and/ or at Site.
	 
	 	c.	 	When conducted on the premises of the CONTRACTOR or its Sub-contractor(s), all reasonable
facilities and assistance, including access to drawings and production data, shall
be furnished to the Inspector(s) at no charge to TELKOM.
	 
	 	d.	 	Should any inspected or tested Goods fail to conform to the specifications, TELKOM
must reject them and the CONTRACTOR shall replace the rejected Goods to meet
the requirements in the specifications, at no charge to TELKOM.
	 
	 	e.	 	TELKOM’s right to inspect, test and where necessary, replaced Goods after the Goods
arrival at Site shall not be limited or waived by reason of the Goods having previously been
inspected, tested and passed by TELKOM or the Inspector prior to the Goods shipment from the
country of origin.






	27.2	 	Interim Inspections and Testing of Works






	 	a.	 	TELKOM shall be entitled to request the CONTRACTOR at any time when deemed necessary during
the execution of the Contract, to carry out inspections and tests of the Works so far
constructed/installed in the reasonable time.
	 
	 	b.	 	The CONTRACTOR shall provide such assistance, instruments, machines, and labor as
are normally and reasonably required for examining, measuring and




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	 	 	 	testing the Works and the quality of any Goods incorporated in the Works at no additional cost to
TELKOM.
	 
	 	c.	 	Should any portion of the Works or Goods incorporated in the Works fail to conform to the
Technical Specifications after the Site Inspections/ Tests, TELKOM must reject them and the
CONTRACTOR shall immediately repair, replace and/or correct such unsatisfactory portion(s) at
its own cost.






	27.3	 	Acceptance Test of Works. Within one (1) month before the conducted Acceptance Test,
CONTRACTOR shall submit the detail item and test procedure for TELKOM’s
approval. Acceptance Test shall be carried out after the System is commissioned by
CONTRACTOR and is ready for Acceptance Test. CONTRACTOR shall
carry out Acceptance Test over the whole Works as referred to in this Contract, at
the Site of installation in accordance with Acceptance Test schedule which shall be submitted
by CONTRACTOR to TELKOM.
	 
	 	 	The Acceptance Test shall be carried out in the presence of both Parties’ authorized
representatives.
	 
	27.4	 	Prior Notice to Acceptance Test. CONTRACTOR shall give notification to TELKOM
within three (3) calendar days prior to the date of the Acceptance Test. Within three (3)
working days after receipt of such notification, TELKOM shall notify CONTRACTOR of its
approval for such Acceptance Test schedule or TELKOM may propose another Acceptance Test
schedule which shall not be later than three (3) calendar days after
CONTRACTOR’s proposed date, with remain to pay attention to completion date of Works according
to this Contract.
	 
	27.5	 	Acceptance Test Implementation. After installation and commissioning for System has
been completed by CONTRACTOR, the Acceptance Test shall be carried out and the
result stated in the Acceptance Test




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	 	 	Certificate (BAUT) shall be submitted to TELKOM’s Project Manager for the purpose of the issuance of
BAST-I.
	 
	27.6	 	Error rectification obligations. Should there be any non-compliance with the Technical
Specifications (hereinafter referred to as “Error”) during Acceptance Test period,
TELKOM and CONTRACTOR shall record such Error in writing and CONTRACTOR shall start to rectify
such Error according to Acceptance Test requirements.
	 
	27.7	 	Major Remaining Errors. If the result on Acceptance Test indicates System which is not
operable commercially, or causes damage or loss of data or software, or causes
corrupted data (hereinafter referred to as “Major Remaining Errors”), then
CONTRACTOR shall notify TELKOM in writing (a) to stop the Acceptance Test or (b) to extend the
Acceptance Test period.
		 	In case of (a) above, after the Error has been rectified, CONTRACTOR shall notify TELKOM at least
three (3) calendar days before conducting re-testing.
	 
	27.8	 	Minor Remaining Errors. If Acceptance Test result indicates the System shall cause failures
other than Major Remaining Errors that do not affect the System to normal operation, TELKOM
can commercially operate the System. The minor items shall be documented and CONTRACTOR
shall rectify such Errors within two (2) months from the issuance of BAST-I or subject to such
Error.
	 
	27.9	 	Checking on Acceptance Test Report. Upon the completion of such tests as referred to in this
Article and CONTRACTOR has submitted reports on the System, and any other
requirements have been made available in accordance with the provisions of this
Contract, TELKOM shall check all such reports of CONTRACTOR. In the event any part
of function is not in compliance with Technical Specifications under this
Contract or incomplete, TELKOM shall notify CONTRACTOR in writing within two (2)
calendar days from






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the presentation by CONTRACTOR of said reports.




	27.10	 	Cost for Corrections. All costs incurred in connection with corrections as referred to in
this Article shall become the full responsibility of CONTRACTOR.
	 
	27.11	 	The issuance of First Hand-Over Certificate (BAST-I); The issuance of the BAST-I by TELKOM,
if CONTRACTOR has been fulfilled his obligations and requirements under this Contract
whit the following conditions:






	 	a.	 	The acceptance result (BAUT) indicate that the System has been tested and is functioning
properly in accordance to this Contract without any major pending items and
accepted by TELKOM, furthermore TELKOM’s Project Manager will issue BAST-I within
one (1) calendar days after issuance of BAUT.
	 
	 	b.	 	In the event TELKOM has put the System commercially operated before BAST-I is issued, then
the System shall be deemed to be accepted and the BAST-I shall be issued by TELKOM.
	 
	 	c.	 	The issuance of BAST-I by TELKOM shall not be withheld due to Minor Remaining Errors by
taking into consideration that (i) such deficiency shall not affect to
commercially operation by TELKOM and maintenance activities of the System
under this Contract (ii) such deficiency will be put as an attachment to the BAST-I in order
for CONTRACTOR to rectify in accordance with Article 27.8






	27.12	 	BAST-II shall be issued by TELKOM’s Project Manager, five (5) years after the date
of BAST-I provided that CONTRACTOR has fulfilled the following conditions:






	 	a.	 	all remaining errors have been rectified and reported;





			
	 	 	 
	 
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	 	b.	 	all warranty obligations have been fulfilled;
	 
	 	c.	 	as-built drawing has been completed and submitted.









Article 28

Certificates





	28.1	 	Factory Test Certificate.
	 
	 	 	After the witnessing of factory tests by the Inspector (if any) has been satisfactorily completed,
the Inspector shall issue a “Factory Test Certificate for Goods” which is signed by both Parties.
Inspector shall state whether or not the test results were satisfactory and the date on which the
witnessing of the factory tests were completed, as well as the particulars of the Goods inspected
and tested. Six (6) copies of such a certificate shall be delivered to the CONTRACTOR within
fourteen (14) days after the CONTRACTOR has submitted to the Inspector the tests data for factory
tests witnessed by the Inspector.
	 
	 	 	In the event that TELKOM finds it is impossible to dispatch the Inspector to witness a factory test
after having received advanced notice of a factory test from the CONTRACTOR within a period agreed
by both parties, TELKOM shall notify the CONTRACTOR in writing to such effect and upon notification
from TELKOM, the CONTRACTOR shall carry out the factory test without the Inspector’s attendance.
The CONTRACTOR shall prepare the certificate itself and shall guarantee that the result of the test
is within the Technical Specification.
	 
	 	 	TELKOM shall accept the test certificate as though it were a certificate issued by the Inspector.
	 
	28.2	 	Goods Arrival Certificate
	 
	 	 	Upon the arrival all of the Goods at a Site, Inspector shall make a visual inspection tests to
determine if the Goods are the same and correct in the description of items and quantities,
referred to in the shipping/ delivery documents furnished by the CONTRACTOR.





			
	 	 	 
	 
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In order that TELKOM may make a timely inspection of the Goods delivered to Site, the CONTRACTOR
shall notify TELKOM of the type and quantity of such Goods at least fourteen (14) calendar days
prior to their delivery.




TELKOM upon a satisfactory result of their inspection and all of the Goods has been completely
delivered within fourteen (14) calendar days thereof, Inspector shall issue to the CONTRACTOR a
Goods Arrival Certificate of the Goods which is counter signed by Parties.




	28.3	 	Final Acceptance Certificate / BAST-II






	 	a.	 	At the end of the five (5) year warranty period and after the satisfactory
completion of the Acceptance Test, defined in Attachment-7 (Technical
Specification), and provided that the CONTRACTOR has fulfilled its
obligations under the Contract, TELKOM’s Project Manager shall issue a Final
Acceptance Certificate.
	 
	 	b.	 	The Final Acceptance Certificate will not apply to those parts which may have been replaced
during the warranty period or to those parts having been the subject of an extension of
warranty according to the provisions of Article 29.2 hereof.
	 
	 	c.	 	The issuance of Final Acceptance Certificate shall not be unreasonably
withheld or delayed, but in the event that a pattern of failure or pattern of
degradation develops that is likely to cause the System to fail to meet the requirements of
the Contract or such other performance levels agreed upon by the TELKOM over the twenty-five
(25) years design life of the System, final acceptance may be withheld until it can be
demonstrated to the satisfaction of the TELKOM that no pattern of failure or pattern of
degradation shall have developed that is likely to cause the TELKOM to fail
to meet the





			
	 	 	 
	 
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	 	 	 	requirements of Attachment-7
(Technical Specification), and/or CONTRACTOR’s system description over the twenty-five (25) years
design life. In such event, the validity of the letter of performance security provided for under
Article 7 shall remain in force until the Final Acceptance Certificate is issued.
	 
	 	d.	 	At the discretion of the TELKOM with pursuant to Article 28.4 the final acceptance tests
programme may consist of a repetition of a part or the whole of the tests of the System
Acceptance test program.






	28.4	 	Certificate of Completion Overseas Training.




After completion the overseas training for TELKOM’s employee conducted by CONTRACTOR under this
Contract, TELKOM’s Project Manager shall issue a Completion Overseas Training Certificate.








Article 29

Warranty





	29.1	 	The CONTRACTOR shall warrant that the Goods supplied under the Contract are new, unused, of
the most recent or current models and incorporate all recent improvements in design and
materials and that all Works performed by the CONTRACTOR shall be perfect in materials and
workmanship. The CONTRACTOR shall further warrant that the Goods supplied and the Works
performed under this Contract shall have no defect arising from design,
materials or workmanship or from any act or omission of the CONTRACTOR, which may
develop during normal use of the Goods supplied and the Works performed in the
conditions existing at Site.
	 
	29.2	 	The CONTRACTOR shall provide warranty for the System as follows:






	 	a.	 	The warranty period shall remain valid for five (5) years commencing from the respective date
of the System Acceptance Certificates.





			
	 	 	 
	 
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	 	b.	 	The CONTRACTOR warrants that the System, including its spares, shall conform fully, over the
twenty-five (25) years design life, to the requirements of the Contract or such other
performance levels agreed upon as acceptable by TELKOM and that no pattern of failure or
pattern of degradation shall have developed that is likely to cause the System to fail to meet
the requirements of Attachment-7 (Technical Specification) over the twenty-five (25) years design life.







	29.3	 	TELKOM shall promptly notify the CONTRACTOR in writing of any claims arising under this
warranty. Upon receipt of such notice, the CONTRACTOR shall:






	 	a.	 	perform any repair required to restore the System to the requirements of the
Contract or such other performance levels agreed upon by TELKOM, if the System
should fail to meet such requirements at any time during the warranty
period or has developed a pattern of failure or pattern of degradation
that is likely to cause the System to fail to meet such requirements.
However, TELKOM may elect, at their sole option, to make repairs, including at sea
repairs which are covered by the warranty. Any equipment discovered to be defective
or faulty and recovered during a warranty repair shall be returned to the
CONTRACTOR at TELKOM’s request and at TELKOM’s expense. The CONTRACTOR
shall reimburse TELKOM for the cost of such repairs within twenty one (21) days from
receipt of a relevant notice issued by TELKOM. The CONTRACTOR shall be entitled to have a
representative during repair execution to observe the System defective or
faulty recovered. Such repairs by TELKOM shall not in any way diminish the
CONTRACTOR’s obligations under the warranty.
	 
	 	b.	 	bear the total cost of each repair required during the warranty period. This cost shall
include but not limited to the cost





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of any vessels (including proportionate standing charges and running costs for cable ships from the
maintenance zones) and/or any costs arising from burial or reburial, the components, equipment or
materials requiring replacement, the cost of any additional equipment necessary to effect the
repair, the cost of making the repair, the cost of labor and engineering assistance or development
required to make the repair and all associated costs such as but not limited to shipping and
customs and services that may be required to make the repair.




	29.4	 	The warranty period of items not accepted, provided or requiring repair or replacement at the
System acceptance date shall start from the date(s) such items are accepted by
TELKOM. Any defective part repaired or replaced during the warranty period shall itself be
subject to a warranty period of five (5) years.
	 
	29.5	 	If during the warranty period defects are found on repeated occasions in any part or parts of
the System or if a pattern of failure or pattern of degradation is likely to cause any part or
parts to fail to meet the specified requirements over the twenty-five (25) years design life,
such part or parts shall not be repaired but shall be replaced by new part(s) at the request
of TELKOM, including all the appropriate spares.






	 	a.	 	For the purpose of this Article, a pattern of failure or pattern of degradation shall be
deemed to exist if:






	 	1)	 	TELKOM have notified the CONTRACTOR that in their reasonable
opinion failures of the same or similar mechanisms have occurred which show a deterioration
of System performance that will render the System outside its specification
during its design life, and
	 
	 	2)	 	The CONTRACTOR, having carried out an investigation, cannot demonstrate to
the reasonable satisfaction of System that:






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	 	i.	 	the failures/deteriorations are within the predictions of the reliability model or Mean-Time-Between-Failure (MTBF) figures;
	 
	 	ii.	 	the failures/deteriorations are not due to a design defect in the component or its
application; or
	 
	 	iii.	 	the failures/deteriorations only apply to a limited number of parts, for example, as the
result of a manufacturing (or batch related) inconsistency.






	 	b.	 	The investigation into the cause of any failures/deteriorations and any associated remedial
action shall be carried out by the CONTRACTOR within a reasonable time-scale with regular
progress reports as requested by TELKOM.






	29.6	 	In addition, the CONTRACTOR shall pay to TELKOM all actual expenses (if any) incurred
by TELKOM in testing or examining any part of the System for the purpose of or
in connection with this Article or in connection with making good, replacing or repairing any
part of the System.
	 
	29.7	 	The CONTRACTOR shall make every reasonable effort to minimize the period of time that
the System is out of service for repair and testing. For failures or any
situations which cause or risk to cause an outage of the System, the CONTRACTOR undertakes
to initiate a corrective intervention immediately but in any case no later than
two (2) days after reception of a notice from TELKOM. TELKOM reserve the right to
determine the timing of rectification.
	 
	29.8	 	The CONTRACTOR shall effect all repairs of the System through the use of repair materials
supplied by it. However, the CONTRACTOR with the agreement of TELKOM, may use
the materials needed to effect a repair from TELKOM’s available spare materials, components or
equipment. The CONTRACTOR shall replace such






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material supplied from TELKOM’s spare stock at a time mutually agreed by TELKOM and the CONTRACTOR.
All materials supplied to replenish TELKOM’s spare and all materials used to repair the System,
which are not supplied from TELKOM’s spare materials, shall be warranted for a period of five (5)
years from the date of replacement.




	29.9	 	The repair or replacement of any faulty unit or equipment includes the delivery to
TELKOM with a descriptive report of the fault found and, when appropriate, of the repair
carried out on such faulty unit or equipment. The maximum period for repair of the units or
equipment (including shipping and customs clearance) is defined in Attachment-7
(Technical Specification).
	 
	29.10	 	For the purpose of Marine Portion maintenance:






	 	a.	 	The usage of universal jointing and/or universal coupling equipment for the maintenance or
repair of the Marine Portion during the warranty period shall not in any way
invalidate the warranty for Marine Portion and the CONTRACTOR shall accept the
warranty responsibility for the universal jointing and/or universal coupling
equipment used during a repair throughout the warranty period.
	 
	 	b.	 	If TELKOM decide to pool any spareparts supplied under this Contract with other
spareparts supplied for other cable systems for which they have maintenance authorities
and where technical compatibility exists, the usage of such other spareparts
supplied from another cable system for maintenance shall not invalidate the
warranty of Marine Portion during the warranty period.









Article 30

Long Term Support





	30.1	 	For a period of twenty-five (25) years starting on the date of System Acceptance Certificate,
the CONTRACTOR shall supply to the TELKOM:





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	 	a.	 	technical support and advice in respect of the design, maintenance and operation of the System at a reasonable price.
	 
	 	b.	 	supplies, replacement equipment, repair service and software support to the System
at a reasonable price.






	30.2	 	Where identical parts or components cannot be supplied the CONTRACTOR shall
provide equivalent and compatible parts, and shall be responsible for any
adaptive engineering work and all implementation documentation that may be necessary.
	 
	30.3	 	Notwithstanding Article 30.2, if for any reason the CONTRACTOR intends to cease
manufacturing identical or fully compatible spare parts and replacement equipment, the
CONTRACTOR shall give a minimum of one (1) year prior written notice to TELKOM to allow
TELKOM to order from the CONTRACTOR any required spare parts and replacement
equipment and shall forthwith provide full details of the equivalents.
However, the CONTRACTOR shall not cease to manufacture such parts and equipment before the
expiration of the warranty period, as described in Article 29.









Article 31

Time of Completion





	31.1	 	The Works shall be completed within time of completion assigned for each Site as
indicated in Plan of Work. Completion of the Works is signified at the date of issuance of
System Acceptance Certificate.
	 
	31.2	 	The entire Works under the Contract shall be completed not later than January 31, 2009 .
	 
	31.3	 	The PoW shall be indicated in the form of a bar chart and Critical Path Method (CPM) showing:






	 	a.	 	the dates of readiness for factory test and shipping;





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	 	b.	 	the dates of beginning and completing of Site Survey and DRM;
	 
	 	c.	 	the dates of beginning and completion of installations at the Sites, and
	 
	 	d.	 	The dates of readiness for System Acceptance Test.






	31.4	 	The CONTRACTOR shall provide an updated schedule every two (2) months showing
progress. The PoW to be updated shall not relieve the CONTRACTOR’s obligations to
complete the Works in time.
	 
	31.5	 	The CONTRACTOR shall strictly observe the project implementation in accordance with Time
of Completion as mentioned in Article 31.









Article 32

Spare Parts





	32.1	 	During the warranty period, all parts that are required to be replaced, shall be supplied by
CONTRACTOR without charge to TELKOM if such replacement is due to imperfect workmanship,
faulty design or faulty material supplied by the CONTRACTOR, or any act, neglect or omission
on the CONTRACTOR’s part or unless such errors or non-compliance have been cause by TELKOM or
third party(ies).
	 
	32.2	 	CONTRACTOR shall provide prices and suppliers (local or overseas) information, regarding
spare parts, and suggest the number of spare to be purchased and stocked for the successful
maintenance of the System.
	 
	32.3	 	CONTRACTOR shall provide a list of spare part including description and quantity as
appropriate by TELKOM.
	 
	32.4	 	CONTRACTOR shall agree to supply the spare parts to TELKOM and TELKOM shall have the right to
purchase these spare parts from CONTRACTOR for TELKOM’s maintenance requirements at a price to
be





			
	 	 	 
	 
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agreed upon. The spare parts or suitable equivalents with the same performance should be available
throughout the design lifetime of the System.




	32.5	 	The CONTRACTOR shall guarantee that any additional Goods as well as spares shall be supplied
any time for a period of five (5) years from the date of the last Final
Acceptance Certificate of Contract (BAST-II).
	 
	32.6	 	The CONTRACTOR shall carry out sufficient inventories to assure
ex-stock supply of consumable spares for TELKOM.









Article 33

Tools and Measuring Equipment





	33.1	 	The CONTRACTOR shall provide tools and measuring equipment with instruction manuals required
for maintenance and operation of the completed Works in accordance with the Bill of Quantity.
The tools and measuring equipment are detailed in the Technical Specification. Tools and
measuring equipment which provided under this Contract which shall be handed over to TELKOM
are new and original.
	 
	33.2	 	For the installation and/or construction activities purpose, the CONTRACTOR shall provide all
necessaries tools and measuring equipment by themselves.









Article 34

Term of Payment





	34.1	 	The terms of payment of this Works other than Training under this Contract will be made by
TELKOM to CONTRACTOR as follows :






	 	1)	 	15% of the Contract Price will be made after EDC.
	 
	 	2)	 	85% of the Contract Price will be made after the BAST-I issued by TELKOM indicating that
the System has successfully been completed and can properly be put into
commercially operation.
	 
	 	3)	 	CONTRACTOR shall submit the following document:





			
	 	 	 
	 
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For 15% Payment




	 	1.	 	Cover Letter signed by authorized person
	 
	 	2.	 	One (1) Original Invoice and two (2) copies
	 
	 	3.	 	Original of advance payment bond
	 
	 	4.	 	Tax invoice following the applicable Indonesian regulation.
	 
	 	5.	 	One (1) original receipt and two (2) copies;






For 85% Payment




	 	1.	 	Cover Letter signed by authorized person
	 
	 	2.	 	One (1) Original Invoice and two (2) copies
	 
	 	3.	 	Original of BAST-I;
	 
	 	4.	 	Copy of BAUT;
	 
	 	5.	 	Copy of insurance policy for Goods and Services pursuant to Article 14.6;
	 
	 	6.	 	Original of warranty bond
	 
	 	7.	 	Copy of certificate of origin from Chamber of Commerce of origin country.
	 
	 	8.	 	Tax invoice following the applicable Indonesian regulation.
	 
	 	9.	 	One (1) original receipt and two (2) copies;






	4)	 	Payment for the Overseas Training.






TELKOM will make payment 100% for the overseas training to CONTRACTOR after CONTRACTOR submit the
following document:




	 	1.	 	Cover Letter signed by authorized person
	 
	 	2.	 	One (1) Original Invoice and two (2) copies
	 
	 	3.	 	Original of Completion of Overseas Training Certificate;
	 
	 	4.	 	Tax invoice following the applicable Indonesian regulation.
	 
	 	5.	 	One (1) original receipt and two (2) copies;





			
	 	 	 
	 
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	34.2	 	In the event there are any contract changes pursuant to Article 37, the CONTRACTOR may issue
invoice for 85% payment before the contract amendment is signed. TELKOM shall pay maximum
amount of contract price pursuant to Article 35.1 before the contract amendment is signed,
or amount of the contract amendment provided that the contract amendment price is
less than the Contract Price as described in Article 35.1.
	 
	34.3	 	The currency in which payment is made to CONTRACTOR shall be US Dollar currency.
	 
	34.4	 	Period of Payment
	 
	 	 	Each of payment shall be made within thirty (30) calendar days after receipt of complete, valid and
correct documents by TELKOM.
	 
	34.5	 	Address of invoicing.


Any invoices and related documents under
this Contract shall be submitted to the
following addresses:
	 
	 	 	To: PT Telekomunikasi Indonesia,Tbk
Att.
Operation Manager, Finance Center

Area-08 Sub-1
	 
	 	 	Finance Center Area-08

Jalan Japati No. l, 2nd Floor

Bandung 40133
	 
	34.6	 	The payment shall be made by TELKOM to CONTRACTOR though direct transfer which
addressed to :





	 	 	 
	Beneficiary:

	 	NEC Corporation
	 
	 	 
	Bank:

	 	Sumitomo Mitsui
Banking Corporation
	 
	 	 
	 Address:

	 	Tokyo Main Office (211)
3-2, Marunouchi
 1-chome, Chiyoda-ku,
 Tokyo, Japan
	 
	 	 
	Account No.:

	 	2657305
	 
	 	 
	SWIFT code:

	 	SMBCJPJT







	 	 	Transfer fee shall be responsibility of CONTRACTOR.




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Article 35

Contract Price





	35.1	 	The Contract Price for execution of this Contract is as follows:





Summary of Contract Price




	 	 	 	 	 
	Description	 	Amount
	Contract Price (CIF) excluding VAT
	 	USD	  11,900,000.00	 
	VAT 10%
	 	USD	 1,190,000.00	 
	Contract Price including VAT
	 	USD	  13,090,000.00	 






(Said: US Dollar Thirteen Million and Ninety Thousand Only)





	35.2	 	The details are as mentioned in Attachment-1 (Price Summary and Bill of Quantity) of this
Contract.
	 
	35.3	 	No further costs. Contract Price set forth in the breakdown of price as mentioned in
Attachment-1 (Price Summary and Bill of Quantity) of this Contract shall cover the entirety of
parts which are required for the implementation of the Works in accordance with this Contract,
save to the extent any additional or reduced Works as required by TELKOM in writing as
referred to in Article 37 and Article 38 with respect to addition or reduction of the Works
under this Contract.
	 
	35.4	 	The total Contract Price shall include VAT currently at 10%, income tax, other payable taxes,
duties, levies and fees in accordance with the prevailing laws and regulation that may be
imposed or levied in connection with the execution of the Contract
	 
	35.5	 	Unit prices quoted in Attachment 1 (Price Summary and Bill of Quantity) are firm fixed prices
and shall not be varied except new item not defined in such attachment.




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Article 36

Taxes, Levies and Duties





	36.1	 	Taxes and Importation. All taxes (excluding VAT), stamp duty and other duties
in accordance with the Government regulations shall be the responsibility of the CONTRACTOR
Any withholding tax shall be deducted directly by TELKOM from the payment to be
made to CONTRACTOR in accordance with the prevailing laws which is applicable to this
CONTRACTOR, (except the VAT shall be paid by TELKOM to CONTRACTOR to be paid to Indonesian
Government).
	 
	36.2	 	All the Goods in US Dollar under this Contract shall be conducted under CIF as referred to in
Incoterm 2000. Therefore, it is agreed by the Parties hereto that: (i) All Goods which are
imported shall be imported in the name of TELKOM and using TELKOM’s Import licence
but under the physical arrangement and management of the CONTRACTOR; (ii)
CONTRACTOR shall initially fund the payment of any import tax, sales tax on luxury goods, if
applicable, prepayment of income tax on import, import or custom duties and all clearance
costs in relation to all imports (iii) CONTRACTOR shall be responsible for and carry out
importation and custom clearance; (iv) All the costs of material import to Indonesia
including storage, penalty, if any shall be the responsibility of the CONTRACTOR.
	 
	36.3	 	TELKOM shall reimburse CONTRACTOR for its prepayment of Import VAT on import and
withholding tax within 30 (thirty) calendar day after receipt of a complete
invoice from CONTRACTOR.
	 
	36.4	 	CONTRACTOR shall be responsible for any underpayment for import duty, import tax and all
penalties under this contract which appear, if any, after audit conducted by custom office
even this contract is already closed.




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	36.5	 	Additional devices. In the event
CONTRACTOR shall require additional devices, apparatus or any other tools in carrying out the Works
which shall be obtained by means of importing them from abroad, then all costs, taxes, retribution
and any other levies thereof shall become the responsibility of CONTRACTOR.
	 
	36.6	 	CONTRACTOR, shall be responsible at its own cost, for obtaining in a timely fashion all
necessary export permits, licenses and approvals from the country of origin and any
intermediate locations, including the payment of any and all levies for freight handling and
other costs related to such permits, licenses and approvals.
	 
	36.7	 	Irregularities to importation procedures.
CONTRACTOR shall be fully responsible for the occurrence of irregularities to either the delivery
of Goods from country of origin, transport procedures or supporting import documents, as set forth
in the Presidential Instruction Number 3 of 1991 dated
25th July 1991 or any replacement
regulations thereof, if any.
	 
	36.8	 	The Parties acknowledge that the
CONTRACTOR has a permanent establishment status and VAT registration in Indonesia. Telkom shall
provide the CONTRACTOR with original evidences of tax payment.









Article 37

Contract Change





	37.1	 	TELKOM may at any time, by a written order given to the CONTRACTOR pursuant to Article 35,
make any change to the provisions of the Contract as may be considered necessary during the
execution of the Works in any one or more of the following:






	 	a.	 	Volumes and quantities of the Goods to be supplied and the Services to be
performed by the CONTRACTOR, and
	 
	 	b.	 	Plan of Work.






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	37.2	 	If any change causes an increase or decrease of cost and any part of the Works under the
Contract, an equitable adjustment shall be made in the Contract Price and/or Plan of Work upon
mutual agreement by the Parties hereto.
	 
	37.3	 	TELKOM shall instruct the CONTRACTOR to provide the change or vary the Works, with the
consent in writing. Such change on the Contract Price will be determined as follows:






	 	a.	 	if the variations concern only quantities of equipment or services for which a unit price or
rate is indicated in Attachment-1 (Price Summary and Bill of Quantity), the unit price or rate
as the case may be shall be applied.
	 
	 	b.	 	if the subject of the variations is not covered by a unit price or rate in Price Schedule,
the CONTRACTOR and TELKOM shall mutually agree on such new unit price proposed by CONTRACTOR.






	37.4	 	If such variation effect to any part of the Works or Contract Price, an equitable adjustment
shall be made upon mutual agreement by the Parties hereto.
	 
	37.5	 	Any changes in respect of the Contract related to execution of the Works shall only be
recognized or acceded to when that has been agreed in writing by TELKOM. The implementation of
such change may be executed by CONTRACTOR after having approval from TELKOM’s Project Manager.
	 
	37.6	 	TELKOM shall not be liable for any additional work unless
CONTRACTOR has fulfill Article
37.5. If the CONTRACTOR proceeds without follow the Article 37.5. it shall be deemed a waiver
by the CONTRACTOR of any and all claims for additional payments.




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Article 38

Contract Amendments



Any variation in or modification of the terms of the Contract including but not limited to Contract
Price during the execution of the Contract shall be subject to Contract amendment in writing agreed
by the Parties hereto. The payment of contract variation shall referring to Article 34.2.








Article 39

Assignment



The CONTRACTOR shall not assign, in whole or in part, its obligations to perform of Works under the
Contract, except with TELKOM’s prior written consent.








Article 40

Sub-contractors





	40.1	 	Prior to the appointment of Sub-contractors, the CONTRACTOR shall notify TELKOM in writing of
such intended appointments and shall obtain TELKOM’s written approval.
	 
	40.2	 	The CONTRACTOR’s notification of Sub-contractors and subsequent TELKOM’s approval thereof
shall not release the CONTRACTOR from any liability or obligation under the Contract.









Article 41

Delays in the Works Performance





	41.1	 	Subject to Articles 37 and 38 the CONTRACTOR shall complete the supply and installation of
the System by the Time of Completion as specified in Article 31.
	 
	41.2	 	If the execution of the Works shall be delayed by reason of any event of force majeure,
without the default or negligence on the part of the CONTRACTOR and pursuant to Article 41.3,
the CONTRACTOR may be granted such extension of Time for Completion as shall be mutually
agreed, without any financial claim from the CONTRACTOR to TELKOM.
	 
	41.3	 	In connection with Article 41.2 and provided that the CONTRACTOR proves that:




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	 	a.	 	there is insufficient contingency time indicated in Plan of Work to cover any delay, and;
	 
	 	b.	 	such delay or any duration of such delays could not be avoided by use of alternative
resources, and;
	 
	 	c.	 	such delay could not be avoided even after reasonable endeavors have been attempted to
mitigate the impact on Time of Completion;
	 
	 	d.	 	such extension of Time of Completion will only be considered if the CONTRACTOR notifies
TELKOM of the cause of delay within fourteen (14) calendar days of commencement of the delay
and provides to TELKOM, either on completion of the Works or at an appropriate stage in the
Works, satisfactory evidence of the effects of the delay.






	41.4	 	If the System is not completed in accordance with Article 31 or by the end of the period of
extension agreed upon under Article 38, the CONTRACTOR shall pay to the TELKOM by way of
liquidated damages pursuant to Article 42.









Article 42

Liquidated Damages





	42.1.	 	Liquidated Damages Amount. For any delay in the Time of Completion pursuant to Article 31
and Attachment-2 (Plan of Work), TELKOM shall be entitled for liquidated damages from
CONTRACTOR amounting of 1 0/00

 (one per mil) of Contract Price excluding 10% VAT for
each day delay for a maximum ten percent (10%) of the Contract Price.
	 
	42.2.	 	The sum or sums of liquidated damages as a result of delay pursuant to Article 42.1 above
will be deducted from amount of CONTRACTOR’s invoice which is not yet paid by TELKOM without
prejudice to TELKOM’s right of termination under Article 43 of this Contract.




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Article 43

Termination for Default





	43.1	 	TELKOM may terminate the Contract in whole or in part, if the following conditions are
occurred:






	 	a.	 	if the CONTRACTOR fails to deliver any or all of the Goods or fails to perform any or all of
the Works within Time of Completion specified in Article 31, or any extension thereof granted
by TELKOM pursuant to Article 38, or;
	 
	 	b.	 	if the CONTRACTOR is in material breach of any of provisions of the Contract
	 
	 	c.	 	if the CONTRACTOR do not take any action within thirty (30) calendar days since the Effective
Date of Contract;
	 
	 	d.	 	if the CONTRACTOR delay up to fifty (50) calendar days from the agreed Time of Completion as
describe in Article 31 without any writing from CONTRACTOR pursuant to Article 41.2.






	 	 	TELKOM shall give notice in writing to the CONTRACTOR to make good the default before TELKOM
terminate the Contract. If the CONTRACTOR fails to make good the default within thirty (30)
calendar days from the date of notice was given, then TELKOM may terminate the Contract. This
condition does not apply to Article 43.1.c.
	 
	43.2	 	If the Contract shall be terminated due to the above reasons Article 43.1 then TELKOM have
the right to forfeiture the performance bond which will be proprietary of TELKOM.
	 
	43.3	 	In the event TELKOM terminates the Contract in whole or in part, pursuant to Article 43.1.
TELKOM may procure, upon such terms and in such manner as it deems appropriate, the Goods
similar to those undelivered and the Works unperformed, and the CONTRACTOR shall be liable to






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	 	 	TELKOM for any excess costs for such similar Goods and Works. However, the CONTRACTOR shall
continue performance of the Contract to the extent not terminated.









Article 44

Force Majeure





	44.1	 	Notwithstanding the provisions of Articles 41, 42, and 43.1.. the CONTRACTOR shall not be
liable for forfeiture of its performance bond, liquidated damages or termination for default,
if and to the extent that, its delay in performance or other failure to perform its
obligations under the Contract is the result of an event of force majeure.
	 
	44.2	 	For purposes of this Article, “Force Majeure” means an event having occurred in Indonesia
which is beyond the control of the CONTRACTOR and not involving the seeable cause. Such events
may be the Government of Indonesia in its sovereign or capacity, fire, flood, earthquake,
landslide, epidemics, freight embargoes, war, hostilities (whether war be declared or not),
invasion, act of foreign enemies, the nuclear and pressure wave risk described in Article 9.6.
or in so far as it relates to Indonesia in which the Goods are being and are to be supplied
and the Works are being and are to be executed or maintained, rebellion, revolution,
insurrection, military or usurped power, civil war, or unless solely restricted to the
employees of the CONTRACTOR or of his sub-CONTRACTORs and arising from the conduct of the
Works, riot, commotion or disorder.
	 
	44.3	 	If the force majeure occurred outside Indonesia, TELKOM may consider to extend of Time of
Completion without any additional cost to TELKOM, provided that the CONTRACTOR shall proves
with a letter statement issued by Authorized Institution related country which related to
event of force majeure.
	 
	44.4	 	If a Force Majeure situation arises, the CONTRACTOR shall promptly notify TELKOM in writing
of such condition and the cause thereof. The Contract may be amended or its duration extended
or




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	 	 	terminated wholly or partly by mutual agreement of Parties.
	 
	44.5	 	In the event of force majeure, the CONTRACTOR shall be entitled to suspension of the
execution of the Contract for the period such force majeure and its consequences will last.
However, the CONTRACTOR shall seek all reasonable alternative means to continue its
obligations for the Contract area(s) not affected by the force majeure event.
	 
	44.6	 	In case of the suspension of the Works caused by the force majeure event, the CONTRACTOR
shall properly protect and secure the Works during such suspension period. If such protection
and securing of the Works is deemed impracticable, the matter shall be notified by the
CONTRACTOR to TELKOM in writing by clarifying the reason and shall be settled through
negotiation between both Parties hereto.
	 
	44.7	 	Should the suspension as specified in Article 44.5. have continued for a period exceeding 6
(six) months, either of the Parties hereto shall be entitled to terminate the Contract with
respect to the remaining Works and shall give notice of termination by registered mail or any
alternative means to the other Party.
	 
	44.8	 	In the case of such termination, TELKOM shall pay to the CONTRACTOR the value of the Goods
forwarded to the Site in Indonesia and the cost of the Works executed prior to the
termination. For all the expenses to be made by the CONTRACTOR for the termination of the
Contract, equitable solution shall be made through negotiation by both Parties hereto.




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Article 45

Termination for Insolvency



TELKOM may, at any time, terminate the Contract by giving a written notice to the CONTRACTOR,
without compensation to the CONTRACTOR, if the CONTRACTOR becomes bankrupt or otherwise insolvent,
provided that such termination will not prejudice or affect any right of action or remedy which has
accrued or will accrue thereafter to TELKOM.








Article 46

Termination for Convenience





	46.1	 	TELKOM, may by written notice sent to the CONTRACTOR, terminate the Contract, in whole or in
part, at any time for its convenience. The notice of termination shall specify that a)
termination is for TELKOM’s convenience, b) the extent to which the CONTRACTOR’s performance
under the Contract is terminated, and c) the date upon which such termination becomes
effective.
	 
	46.2	 	The Goods that are complete and ready for shipment within 30 (thirty) days after the
CONTRACTOR’s receipt of notice of termination shall be purchased by TELKOM at the Contract
terms and prices. For the remaining Goods, TELKOM may elect:






	 	a.	 	to have any portion completed and delivered at the Contract terms and Price, and/ or;
	 
	 	b.	 	to cancel the remainder and pay to the CONTRACTOR an agreed amount for partially completed
Goods and for materials, equipment, and parts previously procured by the CONTRACTOR.
	 
	 	c.	 	for the Works that have been executed prior to effectiveness of notice of termination, TELKOM
shall pay to the CONTRACTOR for all reasonable costs incurred in such execution of the Works,
in due consideration of the sum already paid to the CONTRACTOR.




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Article 47

Resolution of Disputes





	47.1	 	TELKOM and CONTRACTOR shall make every effort to resolve amicably by direct informal
negotiation any disagreement or dispute arising between them under or in connection with the
Contract. For this purpose, TELKOM and the CONTRACTOR shall establish Dispute Review Panel as
mentioned in Article 47.2 of this Contract.
	 
	47.2	 	If after thirty (30) days from the commencement of such informal negotiations, TELKOM and the
CONTRACTOR have been unable to resolve amicably a Contract dispute, either Party may require
that the dispute be referred for resolution to the formal mechanisms specified herein. These
mechanisms may include, but are not restricted to, conciliation mediated by a third party,
adjudication in an agreed national arbitration, Indonesian National Board Arbitration (Badan
Arbitrase Nasional Indonesia) in accordance with the laws of Indonesia.
	 
	47.3	 	The Parties hereto agree decision of BANI shall be final and binding upon them and therefore
no other legal appeal may be permitted to any court of competence. Upon decision of BANI
aforesaid, all terms and conditions of this Contract shall remain valid and the respective
Parties’ obligations shall be completed until such dispute is declared to be settled.
	 
	47.4	 	The costs incurred by the Dispute Review Panel for the first two members in the performance
of its duties and responsibilities shall be borne respectively by TELKOM and the CONTRACTOR,
and for the third member equally by TELKOM and the CONTRACTOR.






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Article 48

Language and Measurement System



The Contract shall be written in the English and Indonesian languages and shall be indicated in
metric units of measurements system. The Indonesian version of the Contract shall prevail in case
of difference in interpretation between the English version and the Indonesian version. All
correspondence and other documents pertaining to the Contract which are exchanged by the parties
shall be written in Indonesia or English.








Article 49

Applicable Laws and Compliance with
Statutes, Regulations, and By-Laws





	49.1	 	The Contract shall be interpreted in accordance with the laws of Republic of
Indonesia.
	 
	49.2	 	The CONTRACTOR shall, in all matters arising in the performance of the Contract, conform in
all respects with the provisions of national or state statutes, ordinances or other laws or
any regulations or by-laws of any local or other duly constituted authority that shall be
applicable to the Works, and shall keep TELKOM indemnified against all penalties and
liabilities of any kind for breach of any such statutes, ordinances or laws, regulations or
by-laws.
	 
	49.3	 	TELKOM assumes that the CONTRACTOR has thoroughly informed himself about such laws and
regulations, and the CONTRACTOR shall be responsible for the observance of
the same.
	 
	49.4	 	Should there occur in Indonesia, subsequent to the date of this Contract, any change to the
provisions of national or state statute, ordinance or other law or any regulation
or by-law of any local or other duly constituted authority, or the introduction of any
such national statute or others which causes an increase or decrease of the Contract
Price and/ or substantial effects in the Time of Completion in the
CONTRACTOR’s
performance under the Contract, such increase or decrease of the Contract Price
and/ or Time of Completion shall equitably




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	 	 	adjusted by mutual agreement between the Parties.









Article 50

Notices





	50.1	 	Any notice given by one party to the other pursuant to the Contract shall be sent in writing
and shall be addressed to TELKOM and the CONTRACTOR as follows:






	 	a.	 	TELKOM
	 
	 	 	 	Project Manager for BSCS
	 
	 	 	 	PT TELEKOMUNIKASI INDONESIA Tbk.

EGM of TELKOM Infrastructure
Division

Graha Citra Caraka, Lantai M

Jalan Gatot Subroto Kav 52

Jakarta — 12710, Indonesia

	 
	 	 	 	Phone No. : (021) 5221400

Fax No.      : (021) 5274300
	 
	 	b.	 	CONTRACTOR
	 
	 	 	 	Project Manager for BSCS 
(Contractor Representative)
	 
	 	 	 	NEC Corporation

34-6, Shiba 5-chome, Minato-ku

Tokyo 108-0014, Japan

Phone No. : +81-3-3798-6749

Fax No.      : +81-3-3798-9117






	50.2	 	A notice shall be effective when delivered and signed acknowledge receipt or on the notice’s
effective date, whichever is later.









Article 51

Contractor’s Personnel





	51.1	 	Employees of CONTRACTOR for the execution of the Works under this Contract shall, at all
times, be identified and recognized as the employees of CONTRACTOR under his administrative
control, and shall at no time be identified as employees of TELKOM.
	 
	51.2	 	CONTRACTOR shall obtain and furnish necessary security clearance, personnel passports, visas
and other documents for personnel performing services under this Contract.




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	51.3	 	At all times covered by this Contract, CONTRACTOR shall exercise complete control over his
employees.
	 
	51.4	 	CONTRACTOR and his employees shall conform to all applicable local laws, regulations and
ordinances, and shall promptly correct any violations brought to his attention.
	 
	51.5	 	CONTRACTOR shall be responsible for the professional and technical competence of his
employees and try his best to select and employ only those persons who in his judgment will be
reliable and competent and who will comply with local laws and customs and conform to a high
standard of moral and ethical conducts.
	 
	51.6	 	CONTRACTOR shall agree upon written request from TELKOM’s Project Manager after discussion
with CONTRACTOR, to terminate the employment of any of his employees performing the work under
this Contract, if TELKOM’s Project Manager considers that such termination is necessary to
protect the interest of TELKOM and/or the Government of Indonesia.
	 
	51.7	 	CONTRACTOR shall bear all expenses necessary for such termination of employment and shall
provide personal for replacement, at his own expense.
	 
	51.8	 	CONTRACTOR shall utilize as many local personnel as possible,
and CONTRACTOR’s expatriate
personnel shall be limited only to engineers, specialized technicians and administrative
personnel who are not available in Indonesia.









Article 52

Use of Local Personnel



The CONTRACTOR is encouraged, to the extent practicable and reasonable, to employ staff and labor
with the required qualifications and experience from sources within Indonesia.




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Article 53

Software License





	53.1	 	Subject to the terms and conditions in this Contract, CONTRACTOR grants to TELKOM
the non-exclusive, non-transferable and non-sublicensable license to use the
software solely on the Goods and at the Sites except as otherwise expressly agreed
in writing between the Parties and to use the software documentation for
such aforementioned purpose.
	 
	53.2	 	TELKOM shall be entitled to produce back-up copy of each item of the software,
respectively, whereby the use of such back-up copy shall be limited to replace the
original software, if the original software is inoperable. TELKOM shall keep
records about the storage of such back-up copies and present such records to CONTRACTOR upon
request.
	 
	53.3	 	TELKOM acknowledges and agrees that the software and the software
documentation contain proprietary and confidential information and trade secrets of
CONTRACTOR and its third party licensors, and agrees to keep and treat such software and
software documentation confidential.
	 
	53.4	 	TELKOM shall a) not reproduce, copy, or modify the software in whole or in part except as
authorized by CONTRACTOR in writing or as provided in this Section; and b) not attempt to
decompile, reverse engineer, disassemble, reverse translate, or in any other manner decode the
software except as specifically authorized by compulsory law.









Article 54

Miscellaneous





	54.1	 	Headings. All headings of the articles set forth in this Contract shall only be for
convenience and therefore it shall not alter, add or affect certain meaning in the
interpretation of this Contract.
	 
	54.2	 	CONTRACTRO shall make by its own costs 7 (Seven) copies of this Contact to be delivered to
TELKOM for the control of




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	 	 	implementation of the Contract and other related activities.






	54.3	 	In the event any of the articles of this Contract is unenforceable, then such
article shall be deleted and shall be deemed to be of no force or effect. The
Parties shall, to the extent possible, negotiate in good faith to agree upon an
enforceable provision having a materially similar effect, and this Contract shall be amended
accordingly.
	 
	54.4	 	In the implementation of this Contract the Parties shall consider business ethics as a public
ethics to success and result of Project quality.









Article 55

Effective Date of Contract (EDC)



This Contract shall be effective on the date, month and year first above written.



IN WITNESS WHEREOF, this Contract is made in three (3) original and executed in Jakarta by duly
representatives of the Parties hereto in view of prevailing laws, bearing sufficient stamp duties,
each of which shall be binding and having the same legal power.




Signed by




For and on behalf of:




	 	 	 	 	 
	PT TELEKOMUNIKASI INDONESIA, Tbk

	 	 	 	CONTRACTOR
	 
	 	 	 	 
	/s/ Indra Utoyo

	 	 	 	/s/ Takashi Kodama
	 

	 	 	 	 
	INDRA UTOYO

Direktor of IT &Supply

	 	 	 	TAKASHI KODAMA

Manager Submarine Networks Division







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