Document:

EX-4.4 Procurement and Installation

Exhibit
4.4 

CONTRACT FOR THE PROCUREMENT AND INSTALATION

OF CAPACITY Ring JaKa2LaDeMa PROJECT

Nomor:
K.Tel. 657/HK.910/ITS-00/2008

BOOK
1 OF 4

Between

PT TELEKOMUNIKASI INDONESIA, Tbk

and

KONSORSIUM NSW-FUJITSU

 

 

CONTRACT
FOR
THE PROCUREMENT AND
INSTALLATION OF CAPACITY Ring
JaKa2LaDeMa Project
BETWEEN
PT TELEKOMUNIKASI INDONESIA, Tbk.
AND
NSW-FUJITSU CONSORTIUM

No.: K.
TEL. 657/HK.910/ITS-00/2008

This
Contract is made and entered into this day of Tuesday dated
30th December
2008, by and between the Parties :

	I.	 	PT TELEKOMUNIKASI INDONESIA,
Tbk., a telecommunication services and network provider established under the
laws of Republic of Indonesia, having its domicile at Jalan Japati
No. 1,
Bandung-40133, Indonesia, for the purpose of this Contract duly represented
by INDRA UTOYO, in his capacity as Director IT & Supply based on President
Director Power of Attorney Number: K. TEL. 68/HK.510/UTA-00/2008
dated 22nd
December, 2008, hereinafter in this Contract referred to as
TELKOM.
	 
	II.	 	NSW-FUJITSU CONSORTIUM, a
consortium established under the Consortium Agreement dated
16th July 2008
consist of Fujitsu Ltd, a company established under the laws of Japan,
domiciled at 4-1-1 Kamikodanaka Nakahaia-ku, Kawasaki 211-8588 Japan, as a
Leader and Norddeutsche Seekabelwerke GmbH (NSW), a company established under
the laws of Republic of Germany, domiciled at Kabel Strasse 9-11, D-26954,
Nordenham, Germany, as a member, hereinafter referred to as CONTRACTOR, in
this Contract duly represented by:
	 
	 	 	MR.GENSEI KATANO, in his capacity as Group Vice President, Submarine
Networks, Photonics Group Fujitsu Ltd, and

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	 	 	MR. RUDOLF STAHL, in his capacity as Managing Director, NSW.

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

THE PARTIES WITNESSETH :

	a.	 	whereas TELKOM have submitted invitation
regarding Request for Proposal for Direct
Assignment of The Procurement And
Installation of Capacity Ring Jaka21adema
Ref.No.:TEL.833 / LG.240 / SUC-A1035000 /
2008 dated 21 November 2008;
	 
	b.	 	whereas CONTRACTOR has submitted the
bidding document to TELKOM through its
letter dated 25 November 2008;
	 
	c.	 	whereas based on the result of evaluation and
clarification to such CONTRACTOR’s bidding
document, TELKOM has appointed and
assigned CONTRACTOR to execute
Procurement and Installation of Ring
JaKa2LaDeMa Project based on TELKOM
Letter No. 936/LG.200/SUC-A1035000/2008
dated 22 December 2008;
	 
	d.	 	whereas CONTRACTOR through its letter
dated 23rd December 2008, have confirm the
agreement and commitment to accept and execute
Procurement and Installation of Ring
JaKa2LaDeMa Project

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:

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CHAPTER I

SCOPE OF AGREEMENT

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.	 	“RING JaKa2LaDeMa” means new WDM transmission network which cover among Ring-8, Ring-4 and
Ring JDCS-DEMACS;
	 
	c.	 	“RING-8” means new WDM transmission network which connecting Kalimantan island and Sulawesi
island which consist of 1 (one) Systems as follows:

			
	System:	 	WDM Submarine Link

Sangata — Donggala.

	d.	 	“RING-4” is new WDM transmission network
which cover among Banjarmasin — Pangkalanbun —
Ketapang — Pontianak, which consist of 2 (two) System as
follows:

			
	     a. System 1:	 	WDM Submarine Link 

Pontianak — Ketapang —

  Pangkalanbun;

			
	     b. System 2:	 	WDM Submarine Link

Banjarmasin — Pangkalanbun.

	e.	 	“RING JDCS-DEMACS” is new WDM
transmission network which connecting Jember — Denpasar — Mataram, which consist of 2 (two)
System as follows:

			
	     a. System 1:	 	WDM Submarine link 
Benculuk — Denpasar;

			
	     b. System 2:	 	WDM submarine link
 Denpasar — Mataram.

	f.	 	“Project” means the Works to be undertaken by CONTRACTOR for the procurement and
installation of RING JaKa2LaDeMa, to be carried out on single
responsibility basis.

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	g.	 	“Sub-contractor” means any party or parties approved by TELKOM having a direct contract
with CONTRACTOR for the performance of any part or parts of the Works to be executed under
the Contract.
	 
	h.	 	“Works” means the objective of the Contract, i.e., supply of Goods, survey, design,
manufacturing, transportation, installation or construction, permits, testing, commissioning,
integrating, completion and operational of the 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 until the issuance of last Final Acceptance Certificate
(BAST 2).
	 
	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 CONTRACTOR is required to supply to TELKOM under this Contract.
	 
	j.	 	“Services” means the CONTRACTOR’s services and activities such as survey, design,
installation or construction, progress or quality control, testing, reporting, commissioning
and training which the CONTRACTOR is required to execute under the
Contract.
	 
	k.	 	“Contract Price” means the price including any applicable Value Added Tax that will be paid
to the CONTRACTOR for completion of the Works tinder this Contract.
	 
	l.	 	“TELKOM’s Project Manager” means TELKOM’s staff duly authorized by TELKOM to act as their
representative for the execution of the Project.
	 
	m.	 	“CONTRACTOR’s Project Manager”
means CONTRACTOR’s person duly authorized by CONTRACTOR to act as their representative for
the execution of the Project.

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	n.	 	“Default” means any of negligent act or failure in the implementation of the Project in
respect of the Contract.
	 
	o.	 	“System” means a network ready for operation and handed over to and accepted by TELKOM,
which consist of as follows:

•   RING-8

			
	     System 1:	 	WDM Submarine link
 Sangata- Donggala.

•   RING-4

			
	     a. System 1:	 	WDM Submarine Link
 Pontianak — Ketapang —
Pangkalanbun;

			
	     b. System 2:	 	WDM Submarine Link

Banjarmasin — Pangkalanbun.

•   RING JDCS — DEMACS

			
	     a. System 1:	 	WDM Submarine link
 Benculuk — Denpasar;

			
	     b. System 2:	 	WDM submarine link

Denpasar Mataram.

	p.	 	“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.
	 
	q.	 	“Commissioning” means activities that shall be done by the CONTRACTOR in preparation of the
Acceptance Test.
	 
	r.	 	“Acceptance Test (AT)” means physical and
electrical characteristic checking of the
installation and materials, and testing of System to test the proper functionality of the
Goods installed of each Site in accordance with Article 34.4 of
this Contract.
	 
	s.	 	“Acceptance Test Report” means 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.
	 
	t.	 	“Acceptance Test Certificate” (hereinafter referred to as BAUT) means an official written
statement, dated and signed by acceptance test team assigned by both Parties, indicating that

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	 	 	the Works have been performed, completed, tested satisfactorily and can be operated
commercially in accordance with the Contract. BAUT shall be released for each System.
	 
	u.	 	“Goods Arrival Certificate” means an official written statement, dated and issued by
TELKOM’s Project Manager indicating that all of the relevant Goods has shipped and arrived at
a Site.
	 
	v.	 	“System Acceptance Certificate (hereinafter referred to as BAST-I)” means an official written
statement, dated and issued by TELKOM’s Project Manager indicating that System has performed,
completed and tested satisfactorily, can be operated, handed over and accepted by TELKOM in
accordance with the Contract.
	 
	w.	 	“Final Acceptance Certificate” (hereinafter referred to as BAST-2)” means an official
written statement, dated and issued by TELKOM’s Project Manager indicating that the entire
System of Land and Marine Portions handed over to TELKOM under the Contract after related
BAST-I and the CONTRACTOR has performed all his obligations under the Contract.
	 
	x.	 	“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 TELKOM.
	 
	y.	 	“Inspector” means the representative(s) or
person(s) duly authorized by TELKOM to inspect the
Goods and the Work under the Contract.
	 
	z.	 	“Effective Date of Contract” or “EDC” means the date on which contract is effective accordance with Article 53.
	 
	aa.	 	“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

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	 	 	not and know how.
	 
	bb.	 	“Months” and “Days” denote Gregorian calendar months and calendar days, respectively.

Article 2

Scope of Works

	2.1	 	The Scope of this Contract covers the Procurement and Installation of RING JaKa2LaDeMa,
which consist of 3 (three) System and 5 (five) Subsystem as follows:
	 
	 	 	“RING-8” means new WDM transmission network which connecting Kalimantan island and Sulawesi
island which consist of 1 (one) SubSytems as follows:
	 
	 	 	Subsystem #1

(SS#1): WDM Submarine Link Sangata —
Donggala
	 
	 	 	“RING-4” is new WDM transmission network which cover among Banjarmasin — Pangkalanbun
 — Ketapang — Pontianak, which consist of 2 (two) SubSystem as follows:

	 	a.	 	Sub System # 1

(SS#1): WDM Submarine Link Banjarmasi — Pangkalanbun
	 
	 	b.	 	Sub System # 2

(SS #2): WDM Submarine Link
Pangkalanbun — Ketapang — Pontianak

	 	 	“RING JDCS-DEMACS” is new WDM
transmission network which connecting Jember
 — Denpasar — Mataram, which consist of 2 (two)
SubSystem as follows:

	 	a.	 	Sub System # 1

(SS#1): WDM Submarine link Benculuk
 — Denpasar;
	 
	 	b.	 	Sub System # 2

(SS #2): WDM submarine link Denpasar
 — Mataram.

	2.2	 	For the purpose of the implementation of the Works, CONTRACTOR shall carry out at least the
followings:

	 	a.	 	Survey, design and engineering;

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	 	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.	 	Land acquisition for station building and beach manhole;
	 
	 	d.	 	Some permit and authorizations, as in Attachment 9;
	 
	 	e.	 	Implementation, integration of System to existing system;
	 
	 	f.	 	Commissioning and testing;
	 
	 	g.	 	Warranty and long term support;
	 
	 	h.	 	All risk insurance
	 
	 	i.	 	Training;
	 
	 	j.	 	Documentation.

	2.3	 	The Scope of Works shall be adjusted and
executed under the amendment pursuant to Articles 44 of this Contract.

Article 3

Time of Completion of the Work.

	3.1	 	The Works shall be completed on System basis
within time of completion assigned for each Site as indicated in Plan of Work Completion of
the Works of each System is stated at the date of issuance of BAST-I.
	 
	3.2	 	Within seven (7) calendar days from the Effective Date of the Contract, the CONTRACTOR
shall give TELKOM a detailed Plan of Work (PoW) showing the accepted milestones of each Site.

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	3.3	 	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;
	 
	 	b.	 	the dates of beginning and completing
of Site Survey and Design Review
Meeting (DRM);
	 
	 	c.	 	the dates of beginning and completion
of installations at the Sites, and
	 
	 	d.	 	the dates of readiness for System
Acceptance Test.

	3.4	 	The entire Works under the Contract shall be
as follows:

	 	•	 	RING-4

	 	a.	 	Sub-System 1 : WDM Submarine
Pontianak — Ketapang — Pangkalanbun
shall be completed not later than 429
day since EDC; and
	 
	 	b.	 	Sub-System 2 : WDM Submarine
Banjarmasin — Pangkalanbun shall be
completed not later than 459 days
since EDC.

	 	•	 	RING-8
	 
	 	 	 	Sub-System 1 : Submarine WDM link Sangata — Donggala shall be completed not
later than 381 days since EDC.
	 
	 	•	 	RING JDCS-DEMACS

	 	a.	 	Sub-System 1 : WDM Submarine link
Benculuk — Denpasar shall be
completed not later than 367 days
since EDC; and
	 
	 	b.	 	Sub-System 2 : WDM Submarine
Denpasar — Mataram shall be
completed not later than 374 days
since EDC.

	3.5	 	The CONTRACTOR shall provide an
updated schedule every 2 (two) months
showing progress. The PoW to be updated
shall not relieve the CONTRACTOR’S
obligations to complete the Works in time.

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	3.6	 	The CONTRACTOR shall strictly observe the project implementation in accordance with Time of Completion as mentioned in this Article.

Article 4

Contract Price

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Material	 	 	Service	 	 	TOTAL USD	 	 	TOTAL IDR	 
	 	 	USD	 	 	IDR	 	 	USD	 	 	IDR	 	 	(DDU)	 	 	(DDU)	 
	Ring 8: System
	 	 	3,995,292	 	 	 	 	 	 	 	16,081,538	 	 	 	 	 	 	 	20,076,830	 	 	 	 	 
	Ring 4: System
	 	 	32,186,605	 	 	 	 	 	 	 	36,938,407	 	 	 	 	 	 	 	69,125,012	 	 	 	 	 
	Ring JDCS -DEMACS
	 	 	3,736,073	 	 	 	 	 	 	 	11,980,242	 	 	 	 	 	 	 	15,716,315	 	 	 	 	 
	Total
	 	 	39,917,970	 	 	 	 	 	 	 	65,000,187	 	 	 	 	 	 	 	104,918,157	 	 	 	 	 
	VAT 10%
	 	 	3,991,797	 	 	 	 	 	 	 	6,500,019	 	 	 	 	 	 	 	10,491,816	 	 	 	 	 
	Grand Total
	 	 	43,909,767	 	 	 	 	 	 	 	71,500,206	 	 	 	 	 	 	 	115,409,973	 	 	 	 	 

			
	Said :	 	US Dollars One hundred fifteen
million four hundred nine thousand
nine hundred seventy three.

	4.2	 	Details of Contract Price as mentioned
in Article 4.1 above is specified in
Attachment 5 : Detail of Contract Price
and Bill of Quantity of this Contract.
The final Bill of Quantities will be
subject to the survey and adjusted
Contract Price will be defined
accordingly.
	 
	4.3	 	The total Contract Price is on DDU (as
per the INCOTERMS 2000), basis shall
include income tax, other payable
taxes, levies and fees, and V.A.T,of
10% in accordance with the prevailing
laws and regulation that may be imposed
or levied in connection with the
execution of the Contract.
	 
	4.4	 	The unit prices of all items in this
Contract as quoted in Attachment 5
(Detail of Contract

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	 	 	Price and Bill of Quantity) are a firm fixed prices during the Contract period and not
subject to variation on any account.
	 
	4.5	 	This Contract Price shall not vary from the unit prices, with the exception of
adjustment authorized by:

	 	a.	 	Contract Change as specified in Article
44 of this Contract; and/or
	 
	 	b.	 	Any change to or introduction of
legislation as specified in Article 51 of
this Contract.

Article 5

Performance Bond

	5.1	 	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
amounting of 5 % (five percent) of the Contract Price including VAT of 10%. The value of
Performance Bond as calculated at the time of Contract Signature is USD 5,770,499 (US
Dollars Five million seven hundred seventy thousand four hundred
ninety nine).
	 
	5.2	 	The performance bond shall be a bank guarantee or surety bond, issued by a bank/insurance
company in accordance with TELKOM’s requirement.
	 
	5.3	 	The performance bond shall be valid in accordance with the date of Effective Date of
Contract until the issuance of the BAST-1 of the last System.
	 
	5.4	 	The performance bond shall be submitted by CONTRACTOR to TELKOM within 14 (Fourteen)
calendar days after this Contract signature date address to :
	 
	 	 	PT Telekomunikasi Indonesia, Tbk. 

Att. Finance Center Area 00 Corporate 

Jalan Japati 1 Lantai 3 

Bandung 40133, Indonesia

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	5.5	 	The performance bond shall be reduced by TELKOM to CONTRACTOR within 14 (fourteen) calendar
days by 100% of the Contract Price of each System after the Issuance of BAST-1 for related
System and the warranty bond of the System had been issued by CONTRACTOR.
	 
	5.6	 	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 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.
	 
	5.7	 	The forfeit of the performance bond as described in Article 5.6 above, shall not
release CONTRACTOR form his obligation as described in Articles 40 of this Contract.

Article 6

Warranty Bond

	6.1	 	CONTRACTOR should provide a warranty bond for the System have been completely done, each in the amount which is 5% (five
percent) of Contract Price of related System respectively, as mentioned at Article 4 of
this Contract.
	 
	6.2	 	The warranty bond shall be a bank guarantee or surety bond, issued by a bank/insurance company in accordance with TELKOM’s requirement
	 
	6.3	 	The warranty bond should be valid as follows:

	 	a.	 	for terrestrial portion, shall remain valid for 1 (one) year commencing from
the respective date of BAST-I; and
	 
	 	b.	 	for marine portion, shall remain valid for 5 (five) years commencing from the

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	 	 	 	respective date of BAST-I and shall be deducted 1% annually.

	6.4	 	The warranty bond shall be submitted by CONTRACTOR to TELKOM together with the invoice
of each related System.
	 
	6.5	 	The warranty bond shall be released by TELKOM to CONTRACTOR after the issuance of BAST-2 of each related System, in
accordance with the terms and conditions regarding the implementation of warranty
period as mentioned in Article 26 of this Contract.

CHAPTER II

TERMS AND CONDITIONS OF
WORK IMPLEMENTATION

Article 7

Use of Contract Documents
and Confidential Information

	7.1	 	CONTRACTOR shall not, without TELKOM’s prior written consent, disclose this 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
CONTRACTOR in the performance of this Contract. Disclosure to any such employed person shall
be made in confidence and shall extend only so far as may be necessary for the purpose of
performance of the Works.
	 
	7.2	 	CONTRACTOR shall not, without TELKOM’s prior written consent, make use of any document or
information enumerated in Article 7.1 except for purpose of performing this Contract.
	 
	7.3	 	Any documents as mentioned in Article 7.1 other than this Contract itself, shall remain the
property of TELKOM and shall be returned (and

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	 	 	all copies) by CONTRACTOR to TELKOM on completion of this Contract if so required by TELKOM.

	7.4	 	The Parties hereby undertake to keep and maintain the confidential information received from the other Party during the term of this
Contract in strict confidence and to use it only in accordance with the purpose of
fulfilling this Contract.

Article 8

Workmanship

	8.1	 	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 TELKOM considers it unnecessary and advises the
CONTRACTOR accordingly, attend for the purpose of examining and measuring such work or of
examined.
	 
	8.2	 	Any part of the Works found not to be in compliance with the Contract shall be promptly
reconstructed accordingly by the CONTRACTOR at CONTRACTOR own expense. No extension of time of
completion and no additional cost shall be made in connection therewith.

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Article 9

Appointment of Project Manager

	9.1	 	TELKOM appoint a project manager who shall be duly authorized to act on behalf of TELKOM
for the execution of the Project:
	 
	 	 	EGM Infrastructure Telecommunication

Graha Citra Caraka, Lantai M

Jl. Gatot Subroto, Kav 52, Jakarta

Telp. 021-5221500

Fax. 022-5229600
	 
	9.2	 	The CONTRACTOR, immediately after the signing of the Contract, shall duly appoint 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.
	 
	9.3	 	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. The
CONTRACTOR’S Project Manager shall be stationed in Indonesia during the period commencing not
later than thirty (30) days after the Effective Date of the Contract and terminating after the
completion of the CONTRACTOR’s obligations under the Contract.

Article 10

Appointment of Sub-contractors

	10.1	 	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, which shall not be
unreasonable withheld or delayed.
	 
	10.2	 	The CONTRACTOR’s notification of Sub-contractors and subsequent TELKOM’s approval thereof
shall not release the CONTRACTOR from any liability or

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	 	 	obligation under the Contract.

Article 11

Packing Activity

	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 identification legibly and indelibly marked on at least 2
(two) external sides or places:
	 
	 	 	PT. Telekomunikasi Indonesia, Tbk

Att.: Project Manager Construction

Pengadaan dan Pemasangan Ring JaKa2LaDeMa

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.

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	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 under the condition
that it will only create reasonable additional cost for the
CONTRACTOR.

Article 12

Transportation and Storage of Goods Activity

	12.1	 	Partial shipment is acceptable, but
transshipment shall be as far as possible avoided. The word
“transshipment” assigned herein means
that the Goods shipped on board of the ocean vessel at the port of origin are transferred to
another ship at a port of the country of origin or a port in any third country before they reach
the port of the country of final destination The CONTRACTOR is encouraged, to the extent
practicable and reasonable, to utilize Indonesian Flag carrier
vessels.
	 
	12.2	 	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.
	 
	12.3	 	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.
	 
	12.4	 	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.

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Article 13

Closing Insurance

	13.1	 	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 EDC, 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-

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	 		 	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.

	 	 	The total prices contained in total amount of Contract 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 are 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/Sub-system by means of war, piracy, takings at sea, other
warlike operations and “excepted risks” as stated in Article 41.5 until the issuance of the
BAST-I.

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	13.2	 	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 insurance certificate, indicating that the relevant premiums have been paid
and that the said policy is and will continue to be in full force.
	 
	13.3	 	For all insurance to be effected, the CONTRACTOR is encouraged, to the extent practicable and
reasonable, to use an Indonesian government insurance company.
	 
	13.4	 	The insurance shall be effected, wherever applicable, in such a manner that TELKOM and the
CONTRACTOR are covered:

	 	a.	 	for the period specified in this Contract (Article 3);
	 
	 	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 26 and 30 of this Contract.

	13.5	 	If the CONTRACTOR shall fail to effect and keep in force the insurance specified herein,
then after reasonable notification in advance to the CONTRACTOR, 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 CONTRACTOR failure to insure under
this Contract.

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	13.6	 	The CONTRACTOR shall furnish
TELKOM with a copy of any insurance
certificate to be effected under the Contract
upon TELKOM’s request The CONTRACTOR shall further furnish TELKOM with draft
copies of any insurance certificate after the receipt of notification of award and
formal copies of insurance certificates immediately after such insurance come into
effect.
	 
	13.7	 	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 Works covered by the insurance on behalf of and for TELKOM.
	 
	13.8	 	All money received (limited to such monies which are directly related to the goods and
related services) 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.
	 
	13.9	 	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 under the limitation as stated in the Contract Article 21.2.
	 
	13.10	 	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 as stated
in Article 13.1.
	 
	13.11	 	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

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	 	 	Goods from the place where the Goods are shipped to a designated Site.

	13.12	 	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 41.5 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.
	 
	13.13	 	Third Party Liability Insurance.
	 
	 	 	Third party liability insurance shall be effected prior to commencement of the Works to
insure against the 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.
	 
	13.14	 	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
CONTRACTOR 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. Regardless the workmen’s
compensation Insurance shall be procured in accordance with Laws of the Employees
country, or the equivalent by which the employers are abide.

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Article 14

Delivery of Goods and Documentations

	14.1	 	Delivery of the Goods shall be made by the CONTRACTOR in accordance with the Contract.
	 
	14.2	 	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.	 	Name, brand, and quantities of Goods;
	 
	 	f.	 	Copy of Supplier Statement of product originalities from authorized
distributor or from the company certified in the quality assurance certificate
issued by TELKOM;
	 
	 	g.	 	Quality Assurance certificate issued by TELKOM which shall be limited
for cable and transmission equipment only;
	 
	 	h.	 	Packing List and Delivery Order.

	14.3	 	TELKOM shall visually inspect the equipment on delivery to the installation Site based on a
copy of the goods shipping documents and TELKOM’s Project Manager shall promptly issue a Goods
Arrival Certificate if there is no obvious physical damage to the equipment and the quantity
of equipment delivered is correct according to the supporting Documentation provided, as
described in Article 14.2 of this Article. The quantity of the submersible plant is based on
the actual quantity to be required for the Project which will be subject to Contract
Amendments based on the result of the marine route survey in accordance with Article 44.

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Article 15

Familiarity with Site and Works

	15.1	 	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 Any changes shall be
subject to the findings as per Article 16.
	 
	15.2	 	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 which is finally subject
to the findings according to the Article 16 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.
	 
	15.3	 	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

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	 	 	which may have been anticipated by the CONTRACTOR.

Article 16

Site Survey, Design/Drawing and DRM

	16.1	 	The CONTRACTOR shall at his own expense conduct Site survey both of Land and Marine
Portion to perform all CONTRACTOR obligations in this Project, review the plans furnished by
TELKOM and prepare the installation designs/drawings and Bill of Quantities.
	 
	16.2	 	CONTRACTOR shall prepare the detailed design and the installation drawings for all the
System and facilities on the basis of the Technical Specifications as describe in Attachment
11 of this Contract.
	 
	16.3	 	The installation designs/drawings shall be prepared with due consideration of economic and
quality aspect of the System fully reflecting the Site conditions.
	 
	16.4	 	The Survey reports and installation designs/drawings shall be submitted to TELKOM’s
Manager Proyek for approval, System by System where applicable, within such time as specified
in the Attachment-8(Implementation Schedule) at least one (1) month after Design Review
Meeting.
	 
	16.5	 	Survey report and installation design/drawings shall be discussed and agreed by both
Parties during DRM.

	16.6	 	TELKOM shall have detail review meeting that organised by CONTRACTOR to ensure alignment
of network deployment with detail BoQ requirement based on site readiness as result of site
survey and market requirements. The DRM shall be held in Indonesia for 10 to 15 persons,
transportation made by TELKOM.
	 
	16.7	 	TELKOM’s Project Manager shall give

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	 	 	CONTRACTOR approval for such design and installation drawings within fourteen (14)
calendar days after the submission

	 	 	TELKOM’s approval of survey reports and installation designs/drawings shall not relieve
the CONTRACTOR of any of his obligation under the Contract.
	 
	16.8	 	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 For the corresponding work, Article 44.6
shall be applicable.
	 
	16.9	 	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 44.
	 
	16.10	 	If TELKOM’s Project Manager requires to modify such design and installation drawings
after approval pursuant to Article 16.9 above, CONTRACTOR shall submit to TELKOM’s Project
Manager modification application by clarifying its scope and reason. Such modification can be
made only when it approved in writing by TELKOM’s Project Manager.

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Article 17

Permits and Authorizations

	17.1	 	CONTRACTOR shall be responsible to obtain permits and authorizations as stipulated an
Attachment-9 of this Contract for both of Land and Marine portion, from the government and or
the third parties when deemed to be necessary for the execution and
finishing the Works. The
Permits should be requested by CONTRACTOR with reasonable efforts. The CONTRACTOR can not be
held responsible for any delays caused by delayed obtaining of
permits from the authorities.
Any such delay shall be notified to the TELKOM and the delay and the impact on the Project
shall be quantifiable and verifiable. A corresponding extension of time under those
circumstances shall be given to the CONTRACTOR in his Plan of work. CONTRACTOR shall make
reasonable efforts to minimise the impact of this delay.
	 
	17.2	 	TELKOM shall assist 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).
	 
	17.3	 	TELKOM shall assist 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.
	 
	17.4	 	At least kind of permits shall be obtained by CONTRACTOR respectively as stated in
Attachment-9 (Permit Matrix).

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Article 18

Provision of Facilities

	18.1	 	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.
	 
	18.2	 	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.
	 
	18.3	 	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.
	 
	18.4	 	The facilities provided by the CONTRACTOR specified in this Articles shall comply with the
Technical Specification as describe in Attachment 11 of this Contract, and relevant laws,
ordinances and regulations in Indonesia and shall be subject to the approval of TELKOM.

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Article 19

Provision of Labor,

Use of Local Personnel and Local Content

	19.1	 	CONTRACTOR shall, at his own expense, provide any necessary labour for proper execution of
the Contract.
	 
	19.2	 	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.
	 
	19.3	 	For the execution of the Works under this Contract, employees of CONTRACTOR shall be
identified and recognized as the employees of CONTRACTOR at all times, under his
administrative control, and shall at no time be identified as employees of TELKOM.
	 
	19.4	 	CONTRACTOR shall obtain and furnish necessary security clearance, personnel passports,
visas and other documents for personnel performing the Work under this Contract.
	 
	19.5	 	At all times covered by this Contract, CONTRACTOR shall exercise complete control over his
employees.
	 
	19.6	 	CONTRACTOR and his employees shall conform to all applicable local laws, regulations
and ordinances, and shall promptly correct any violations brought to his attention.
	 
	19.7	 	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.
	 
	19.8	 	CONTRACTOR shall agree upon written request from TELKOM’s Project Manager after discussion
with CONTRACTOR, to

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	 	 	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.

	19.9	 	CONTRACTOR shall bear all expenses
necessary for such termination of employment and shall provide personal for
replacement, at his own expense
	 
	19.10	 	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.
	 
	19.11	 	CONTRACTOR shall utilize as many local content (local product) as possible for proper
execution of the Contract.

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. In case of any dispute, it has to be
solved promptly without loosing any time by TELKOM. If any instruction from TELKOM
leads to Contract Variation then it has to be accepted by all parties.
	 
	20.3	 	The CONTRACTOR shall, as far as possible, arrange his Works, 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.

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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

Arrangement on Interference with Traffic and Adjoining Properties

	22.1	 	All operations necessary for the execution
of the Works shall, so far as compliance with the requirements of the Contract permits, be
carried on so as not to interfere unnecessarily or improperly with the convenience of the public or
the access to, use and occupation of public or private roads and footpaths to or of properties
whether in the possession of TELKOM or of any other person.
	 
	22.2	 	CONTRACTOR shall use every reasonable means to prevent any of the highways or

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	 	 	bridges communicating with or on the routes to the Site from being damaged or injured by any
traffic of CONTRACTOR or any of his Sub-Contractors and in particular shall select routes,
choose and use vehicles and restrict and distribute loads so that any such extraordinary
traffic as will inevitably arise the moving of the Goods from and to the Site shall be limited
as far as reasonably possible and so that no unnecessary damage or injury may be occasioned to
such highways and bridges.
	 
	22.3	 	Where the nature of the Works is such as to
require the use by the Contractor of water-borne transport, the provisions of Article 22.2
herein shall be construed as though “highway” included a lock, dock, sea wall or other
structure related to a waterway and “vehicle” included craft and shall have effect
accordingly.

Article 23

Monthly Progress Report

	23.1	 	CONTRACTOR shall submit to
TELKOM’s Project Manager “Progress Report” every month, in 2 (two) hard copies and 1 (one) soft
copy, within the first ten (10) calendar days of the following month, with the first report is
to be issued at the second month from the Effective Date of Contract.
	 
	23.2	 	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 on a basis of System.

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	23.3	 	Progress Report shall cover the following items:

	 	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 2 (dua) months. However for the first report for
DRM, the CONTRACTOR must report Anticipated Work for the whole implementation period;
	 
	 	f.	 	Inventory report;
	 
	 	g.	 	Undelivered Goods and shipment schedule;
	 
	 	h.	 	Pertinent information which TELKOM may request, and
	 
	 	i.	 	Payment schedule, in which the CONTRACTOR shall estimate the receipt of payment from
TELKOM on System basis for the entire period of the Contract, including the latest status
of the amount already received. The form of payment schedules will be furnished by TELKOM
to the CONTRACTOR. Payment schedule shall be updated by every new progress report to be
issued.

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

Article 24

Cleaning-up Activity

	24.1	 	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 CONTRACTOR’s Works.

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	24.2	 	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.

Article 25

As-built Drawings

	25.1	 	As specified under the Contract, the
CONTRACTOR shall be required to furnish TELKOM with as-built drawings upon completion of the
Works.
	 
	25.2	 	TELKOM may request the CONTRACTOR to furnish such as-built drawings in the form that they
will meet the requirements of and subsequently be integrated into Computerized Local Networks
Records System.
	 
	25.3	 	In such event, the CONTRACTOR shall
furnish TELKOM with computer data so that TELKOM can easily incorporate as-built drawings into
computerized Local Networks Records System TELKOM will furnish the CONTRACTOR with the detailed
specifications of the requirements before the CONTRACTOR will commence preparation of as-built
drawings. Any additional cost to be incurred by the CONTRACTOR thereof shall be paid to the
CONTRACTOR upon mutual agreement by the parties hereto.

Article 26

Warranty Period

	26.1	 	CONTRACTOR shall provide warranty for
the System as follows:

	 	a.	 	Terrestrial Portion.

                     The warranty period for the Land Portion of the System shall remain valid for one

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	 		 	(1) year commencing from the respective date of the System Acceptance Certificates (BAST-I) of
the related System
	 
	 	b.	 	Marine Portion
	 
	 	 	 	The warranty period for the Marine Portion of the System shall remain valid for five (5) years
commencing from the respective date of the System Acceptance Certificates (BAST-I) of the related
System.
	 
	 	c.	 	The CONTRACTOR warrants that the System, including its spares, shall conform fully, over 25
(twenty-five) 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-8 (Technical Specification) over the twenty-five (25) years design
life.

	26.2	 	The warranty case has to be proven and further actions has to be mutually agreed quickly.
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 to the extent such damage is attributed to CONTRACTOR 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

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	 	 	 	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) calendar 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 CONTRACTORS
obligations under the warranty;

	 	b.	 	bear the total cost of each repair to the extent such damage is attributed to CONTRACTOR
required during the warranty period. This cost shall include but not limited to the cost 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;

	26.3	 	The warranty periods of items not accepted, provided or requiring repair or replacement at
the System Acceptance Date (BAST-I) 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 further warranty period of one (1) year for Land Portion and five (5) years for
Marine Portion from the date of repair or replacement and up the maximum Warranty period of
(10) Years for the Marine Portion.

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	26.4	 	If during the warranty period (as mentioned in Article 26.1a and b herein above) 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;

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

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	 	 	 	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.

	26.5	 	In addition, If the faults are attributable to the CONTRACTOR, the CONTRACTOR shall pay to
TELKOM all actual expenses (if any) is 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.
	 
	26.6	 	If the faults are attributable to the CONTRACTOR, 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) calendar days after reception of a notice from TELKOM. TELKOM
reserve the right to determine the timing of rectification.
	 
	26.7	 	The CONTRACTOR shall, with reference to Article 26.3, 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 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

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	 	 	System, which are not supplied from TELKOM’s spare materials, shall be warranted for a period of
one (1) year for Terrestrial Portion and five (5) years for Marine Portion from the date of
replacement.

	26.8	 	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- 11 (Technical
Specification).
	 
	26.9	 	For the purpose of Marine Portion System 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 is confirmed by the CONTRACTOR, 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.

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CHAPTER III

TERMS AND CONDITIONS OF

TECHNICAL ASPECT

Article 27

Country of Origin

	27.1	 	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.
	 
	27.2	 	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.
	 
	27.3	 	The origin of the Goods may be distinct from the nationality
of the CONTRACTOR.

Article 28

Standards

	 	 	The Goods supplied under this Contract shall conform to
Attachment-8 (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.

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Article 29

Tools and Measuring Equipment

	29.1	 	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 Attachment-11 (Technical Specification). Tools and measuring equipment which provided under this Contract which shall be handed over
to TELKOM are new and original.
	 
	29.2	 	For the installation and/or construction activities purpose, CONTRACTOR shall provide all
necessaries tools and measuring equipment by themselves. Tools and Measuring Equipment which
provided under this contract shall hand over to TELKOM are new pursuant to Article 30 of this
Contract. Equipment and tools provided by the CONTRACTOR that are not included in the BoQ shall
remain property of the CONTRACTOR and not be handed over to TELKOM.

Article 30

Guarantee for Goods

CONTRACTOR shall warrant that the Goods supplied under the Contract are new, unused, of the recent
or current models and incorporate all recent improvements in design and materials and that all
Works performed by him shall be state of the art in materials and
workmanship. 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.

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Article 31

Guarantee for Long Term Support

	31.1	 	For a period of twenty-five (25) years starting on the date of System Acceptance
Certificate (BAST-I) of related System, CONTRACTOR shall supply to
TELKOM at reasonable price:

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

	31.2	 	Where identical parts or components cannot be supplied, CONTRACTOR shall provide equivalent
and compatible parts, and shall be responsible for any adaptive engineering work and all
implementation documentation that may be necessary.
	 
	31.3	 	Notwithstanding Article 31.2 above, 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 26.1 a and b of this
Agreement.

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Article 32

Spare Parts

	32.1	 	During the warranty period as stipulated in Article 26.1
a and 26.1 b, 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) or Force
Majeure.
	 
	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 as stipulated in Article 31.3.
	 
	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 agreed upon The spare parts or suitable equivalents with the same performance
should be available throughout the design lifetime of the System.
	 
	32.5	 	CONTRACTOR shall propose all necessary spare parts as stated on Attachment-11 (Technical
Specification), and guarantee that the availability of spare as described in Article 26 and
Article 30 of this Contract.
	 
	32.6	 	CONTRACTOR shall guarantee that any additional Goods as well as spates can be supplied
with same type and function after

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	 	 	Final Acceptance Certificate (BAST 2) issued.

	32.7	 	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 (BAST-2).
	 
	32.8	 	Under the reference Section III Technical Specification Table 3-1 Intervension Period for
the long Term Support, CONTRACTOR shall carry out sufficient inventories to assure ex-stock
supply of consumable spares for TELKOM

Article 33

Software License

	33.1	 	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.
	 
	33.2	 	In this software license agreement, TELKOM have the rights in accordance with the
Indonesian law regarding intellectual property rights, which is the rights for economic
benefit from the use of software license as describe in this Contract, but granted no
ownership rights in the software, where such ownership rights in the Software shall remain
with CONTRACTOR.
	 
	33.3	 	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.
	 
	33.4	 	TELKOM acknowledges and agrees that the

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	 	 	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.

	33.5	 	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 in accordance with the purpose of
this Contract.
	 
	33.6	 	Software as mentioned in this Article as
describe in the Attachment-11 (Technical Specifications) of this
Contract.

CHAPTER IV

TERMS AND CONDITIONS FOR

GOODS & SYSTEMS ACCEPTANCE

Article 34

Inspection and Tests

	34.1	 	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 in accordance with Attachment 11 (Technical
Specification).
	 
	 	b.	 	Subject to 7 (seven) days prior notice to do so, the inspections and tests may be
conducted on the premises of the CONTRACTOR or its Sub-contractors), 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

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	 	 	 	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, free of cost 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 Failure to reject such insufficient Goods within due time shall be
regarded as an acceptance of the Goods.

	34.2	 	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 Factory inspection and testing shall be
subject to mutual agreement between the Parties and the work shall not be unnecessarily
interfered.
	 
	 	b.	 	If the CONTRACTOR requests TELKOM to perform the interim inspections and tests on the
Works so far constructed/installed, the Contractor shall give TELKOM a prior written notice
of the date for such inspections and tests together with the Contractor’s own test data in
accordance with Attachment- 11 (Technical Specifications).
	 
	 	c.	 	The CONTRACTOR shall provide such

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	 	 	 	assistance, instruments, machines, and labor as are normally and reasonably
required for examining, measuring and testing the Works and the quality of any
Goods incorporated in the Works at no additional cost to TELKOM.
	 
	 	d.	 	Should any portion of the Works or Goods incorporated in the Works fail,
during the inspection period, 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. Failure
to reject such Goods within due time shall be regarded as an acceptance of Goods.
	 
	 	e.	 	Inspection and Test Procedures are specified in the Attachment-11.3 of this
Contract.

	34.3.	 	System Acceptance Tests

	 	a.	 	System Acceptance Tests shall be conducted by CONTRACTOR and witnessed by
TELKOM and, as full system and full function.
	 
	 	b.	 	The Contractor shall give TELKOM 14 (fourteen) calendar days prior written
notice of the date for the System Acceptance Test preparing the CONTRACTOR’s own test
data. Unless otherwise agreed upon, the test shall be carried out within 10 (ten)
calendar days from the said date, and TELKOM shall notify in writing the CONTRACTOR
of such day or days. If TELKOM does not notify it, CONTRACTOR may carry out the
Acceptance Test at his proposed date.
	 
	 	c.	 	CONTRACTOR shall supply necessary labors, materials, equipment, apparatus

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	 	 	 	and instruments for the execution of the Acceptance Test.
	 
	 	d.	 	If any portion of the Works fails to pass the test, a test of the said
portion shall be repeated under the same terms and conditions as specified in
Attachment-11 (Technical Specification). All materials used in the correction of such
portions shall be new.
	 
	 	e.	 	In the event that the Works completely
fail to satisfy the requirements specified
in Attachment-11 (Technical
Specification) then CONTRACTOR shall correct the failures as soon as possible and
the System Acceptance Tests shall be repeated until satisfactory results are
obtained.
	 
	 	f.	 	Test Procedures are specified in the Attachment-11.3 of this Contract.
	 
	 	g.	 	At least one month before commencing of the Acceptance test, CONTRACTOR
shall propose the test procedure including list of measuring equipment and test
configuration for TELKOM approval.

	34.4.	 	Acceptance Test of Works

	 	a.	 	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.

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	 	 	 	The Acceptance Test shall be carried out on System base that has been defined under this
Contract.
	 
	 	 	 	The Acceptance Test shall be carried out in the presence of both Parties’ authorized
representatives.
	 
	 	b.	 	Prior Notice to Acceptance Test
	 
	 	 	 	CONTRACTOR shall give
notification to TELKOM within fourteen (14) calendar days prior to the date of the
Acceptance Test. Within seven (7) 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 seven (7) calendar
days after CONTRACTOR’s proposed date, with remain to pay attention to completion date of
Works according to this Contract.
	 
	 	c.	 	Acceptance Test Implementation.
	 
	 	 	 	After installation and commissioning for each System has been completed by CONTRACTOR,
the Acceptance Test shall be carried out for such System and the result stated in the
Acceptance Test Certificate (BAUT) shall be submitted to TELKOM’s Project Manager for the
purpose of the issuance of BAST-I.
	 
	 	d.	 	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.

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	 	e.	 	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 seven (7) calendar days before conducting re-testing.
	 
	 	f.	 	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.
	 
	 	g.	 	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 seven (7) calendar days from the presentation by CONTRACTOR of said reports.

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	h.	 	Cost for Corrections.
	 
	 	 	All costs incurred in connection with corrections as referred to in this Article shall
become the full responsibility of CONTRACTOR.

	i.	 	The issuance of First Hand-Over Certificate (BAST-I).
	 
	 	 	The issuance of the BAST-I for each System by TELKOM, if CONTRACTOR has been fulfilled his
obligations and requirements under this Contract with the following conditions as describe
in Article 35.

	 	1)	 	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 for
the relevant System within seven
(7) calendar days after issuance of
BAUT.
	 
	 	2)	 	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.
	 
	 	3)	 	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 34.4 point
f above.

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	j.	 	BAST-2 shall be issued based on System or Sub-system basis by TELKOM’s
Project Manager, twelve (12) months after the date of BAST-I for each System
for Land Portion and five (5) years after the date of BAST-I for each System
for Marine Portion provided that CONTRACTOR has fulfilled the following
conditions as describe in Article 35:

	 	a.	 	all remaining errors have been
rectified and reported;
	 
	 	b.	 	all warranty obligations have been fulfilled; and
	 
	 	c.	 	As-built Drawing has been completed and submitted.

Article 35

Certificates Issuance

	35.1	 	Factory Test Certificate.

	 	a.	 	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.
	 
	 	b.	 	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

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	 	 	 	Inspector’s attendance. The CONTRACTOR shall prepare the certificate itself and shall guarantee that the
result of the test is within the Technical Specification.
	 
	 	c.	 	TELKOM shall accept the test certificate as though it were a certificate
issued by the Inspector.

	35.2	 	Goods Arrival Certificate

	 	a.	 	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.
	 
	 	b.	 	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.
	 
	 	c.	 	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 both Parties.

	35.3	 	System Acceptance Certificate

	 	a.	 	Prior to the issuance of a System Acceptance Certificate, the Contractor
shall have completed the System and shall have:

	 	1)	 	Submitted of System Acceptance
Test results to the TELKOM’s
Project Manager which counter sign
by Inspector and Contractor.
	 
	 	2)	 	Supplied of all necessary tools and

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	 	 	 	test equipment and spare parts.
	 
	 	3)	 	Supplied of instructional handbooks,
as-built drawings, operation and
maintenance manuals (SOP/SMP as
specified on Scope of Work
document), inventory lists, spare
parts lists and any other information
necessary for the operation and
maintenance of the System.
	 
	 	4)	 	Reinstated and cleaned up of the
Sites with enclosed Certificate of
work completion from the
authorized official, and

	b.	 	When System Acceptance Tests have been completed, satisfying all relevant requirements under
the Contract which counter sign by Inspector and Contractor, the Project Manager shall issue
a “System Acceptance Certificate” and TELKOM shall be deemed to have taken over the
responsibility for the Works on the date of the issuance of the said System Acceptance
Certificate.
	 
	 	 	CONTRACTOR shall be deemed to have completed the Works on that date and to have fulfilled
his obligations under the Contract other than warranty obligations under the Contract which
shall commence from the date of issuance of such System Acceptance Certificate.
	 
	c.	 	System Acceptance Certificates shall be issued at the Contractor’s written request within
fourteen (14) calendar days of the Contractor having completed all the relevant requirements
of this Contract including those identified in Article 34.4 point a this Contract.
	 
	d.	 	In order to expedite the receipt of System Acceptance Certificate, CONTRACTOR shall have
completed, to the satisfaction

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		 	of TELKOM, his entire responsibilities as defined by the Contract for the
coordination between, and arrangement of, the Works for the system.
	 
	35.4	 	Completion Training Certificate
	 
	 	 	Upon the completion of Training performance, TELKOM’s Project Manager shall issue a
Completion Training Certificate. Submission of this certificate based on the CONTRACTOR
written request accompanied by a document which indicates that such of training has
completely been finished and compliant with the Contract.
	 
	35.5	 	Final Acceptance Certificate (BAST-2)

	 	a.	 	Terrestrial Portion
	 
	 	 	 	At the end of the one (1) year warranty
period and after the satisfactory
completion of the Final Acceptance
Tests of the System defined in
Attachment-11 (Technical
Specification), and provided that the CONTRACTOR has fulfilled its
commitments under the Contract, TELKOM’s Project Manager shall issue a Final
Acceptance Certificate (BAST-2).
	 
	 	b.	 	Marine Portion
	 
	 	 	 	At the end of the five (5) year warranty period and after the satisfactory
completion of the Acceptance Test of the System, defined in
Attachment-11
(Technical Specification), and provided that the CONTRACTOR has fulfilled its
obligations under the Contract, TELKOM’s Project Manager shall issue a Final
Acceptance Certificate.
	 
	 	c.	 	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 26 hereof.

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	 	d.	 	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 requirements of
Attachment-11 (Technical Specification), and/or CONTRACTOR’s system description
over the 25 (twenty-five) years design life In such event, the validity of the
letter of warranty security provided for under Article 6 shall remain in force
until the Final Acceptance Certificate is issued.
	 
	 	e.	 	At the discretion of the TELKOM with pursuant to Article 35.5 point d, 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.

Article 36

Transfer of Title

	36.1	 	The transfer of title of the System from Contractor 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.
	 
	36.2	 	Upon transfer of title 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

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	36.3	 	The transfer of Operational Risk from CONTRACTOR to TELKOM shall take place
when System Acceptance Certificate has been issued by TELKOM
	 
	36.4	 	Upon the transfer of title of the System to TELKOM as described in Article 36.3, the
CONTRACTOR also warrants that the System has fulfilled all statutory requirements and
permits including but not limited to any governmental, non-governmental and crossing
permits, with respect to the performance of the Works.

CHAPTER V

TERMS AND CONDITIONS OF
PAYMENT

Article 37

Term of Payment

	37.1	 	The terms of payment of this Works other than Training under this Contract will be made
by TELKOM to CONTRACTOR as follows :
	 
	 	 	Refer to Attachment 7 Billing Milestones.
	 
	37.2	 	Contractor shall submit completed and valid invoice to TELKOM that consist of the
following document :
	 
	 	 	Refer to Attachment 7 Billing Milestones.
	 
	37.3	 	The Invoice shall be addressed to :

To : PT. Telekomunikasi Indonesia,Tbk

Att. Operation Senior Manager (OSM) of

Finance Center Infratel Bandung

Jin. Japati No. 1, 2nd Floor

Bandung 40133

Indonesia

	37.4	 	CONTRACTOR’s request(s) for payment shall be made to TELKOM in writing, accompanied by an
invoice describing, as appropriate and Performance Bond still remain valid, the Goods
delivered and the Works performed, and upon fulfillment of other obligations stipulated in
this Contract.

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	37.5	 	Payments shall be made promptly by TELKOM within 30 (thirty) calender days of
submission of an invoice/claim by the CONTRACTOR.
	 
	37.6	 	The currency in which payment is made to CONTRACTOR shall be made in the Indonesian
Rupiah and US Dollar as per the quoted currency by the CONTRACTOR and as mentioned in the
Price schedule.

Article 38

Taxes, Levies and Duties

	38.1	 	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).
	 
	 	 	TELKOM confirms that under the present law WHT is only applicable on services and
is only 4.5%.
	 
	38.2	 	All the Imported Goods under this Contract shall be conducted under DDU as referred to
in Incoterm 2000. Therefore, it is agreed by the Parties hereto that:

	 	a.	 	All Goods which are imported shall be imported in the name of
TELKOM and using TELKOM’s import license but under the physical arrangement
and management of the CONTRACTOR;
	 
	 	b.	 	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;

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	 	c.	 	CONTRACTOR shall be responsible for and carry out importation and custom clearance;
	 
	 	d.	 	All the costs of material import to Indonesia until Location including storage, penalty, if any shall be the responsibility of the CONTRACTOR.

	38.3	 	CONTRACTOR shall be responsible for any underpayment as per DDU Incoterms 2000 and all
penalties under this contract which appear, if any, after audit conducted by custom office
even this contract is already closed.
	 
	38.4	 	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.
	 
	38.5	 	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.
	 
	38.6	 	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.
	 
	38.7	 	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.

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	38.8	 	The Parties acknowledge that the CONTRACTOR shall decides at its own discretion to have a
permanent establishment or not and VAT registration in Indonesia. TELKOM shall provide the
CONTRACTOR with original evidences of tax payment.

CHAPTER VI

RESPONSIBILITY OF THE PARTIES

SUB CHAPTER VI.I

 TELKOM’s RESPONSIBILITY

Article 39

Responsibility in
The Implementation of Contract

	39.1	 	TELKOM’s Project Manager will supervise the Works and examine workmanship of CONTRACTOR
employed in the execution of the Works.
	 
	39.2	 	Any written instruction or approval given
by TELKOM’s Project Manager to the CONTRACTOR within his capacity shall refer to Contract and
bind the CONTRACTOR as if it had been given by TELKOM. Any request
for additional works shall be
mutually agreed and may lead to the variation orders.

SUB CHAPTER VI.2

CONTRACTOR’s RESPONSIBILITY

Article 40

Responsibility in the Sufficiency of
Contract Price and Preparation for
Implementing & Completing the Work

	40.1	 	CONTRACTOR shall be deemed to have
satisfied himself at the time of Contract signing as to the correctness and sufficiency of his
prices stated in the Price schedule which shall cover all his obligations under this Contract for
proper performance, completion and maintenance of the Works. It is entirely CONTRACTOR’s risk for
any errors in computation or summation on his Price Schedule or any incorrect perception of the
scope Works to be covered and the

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	 	 	quality of the System to be attained at the completion of the Project. For the said errors or
incorrect perception, if any, discovered after Contract singing or during the execution of
Contract, TELKOM in no case shall compensate CONTRACTOR for any financial loss.

	 	 	The Final BoQ of the submersible plant shall be mutually decided after DRM meeting and will be
based on the result of the marine route survey and in accordance with Article 44.
	 
	40.2	 	It is agreed that CONTRACTOR has, by careful examination, satisfied 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 the location of the works to be performed, the character,
quality and quantity of the Goods to be delivered, the CONTRACTORS’s facilities including the
Construction Equipment to be used, labor conditions, transportation conditions and the general
and local laws and regulations. Any allowance for all the foregoing factors and all other
risks, conditions or other circumstances has been included in the Contract Price. Therefore, no
claims shall be considered for extra costs or extension of time in whole or in part due to any
difference between the actual conditions and those which may have been anticipated by the
CONTRACTOR. Any change in laws and/or regulations after EDC affects the scope of work of the
CONTRACTOR, the price and extension of time should be equitably adjusted in accordance with
Article 44 and 15.3.

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Article 41

Responsibility in the Completion of the Work

	41.1	 	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.
	 
	41.2	 	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.
	 
	41.3	 	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.
	 
	41.4	 	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 41.6
while the CONTRACTOR shall be 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 this Contract.
	 
	41.5	 	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

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	 	 	subject to Article 46, repair and make good the same as aforesaid at the cost of TELKOM. 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 3.

	41.6	 	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 any act or omission by
TELKOM or any third party or any inclement weather (= windspeed equal to or greater than
Beaufort five (5)) 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.
	 
	41.7	 	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 between TELKOM and the CONTRACTOR.
	 
	41.8	 	CONTRACTOR shall pay due attention to

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	 	 	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.

	41.9	 	CONTRACTOR shall conform with
Attachment-8 (Implementation
Schedule/Plan of Work) as mutually agreed.
	 
	41.10	 	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 42

Responsibility on Patent Right

	42.1	 	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
	 
	42.2	 	CONTRACTOR shall only have the obligations as set out in this Article 42.1, if TELKOM: a)
gives CONTRACTOR prompt, in no event later than three (3) calendar days after receipt of such
a claim, 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.
	 
	42.3	 	Furthermore, such indemnity shall not cover such infringement or claim arising from:

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	 	a.	 	CONTRACTOR’s adherence to TELKOM’s direction to use materials or parts of TELKOM’s selection, or
	 
	 	b.	 	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
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
	 
	 	c.	 	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
	 
	 	d.	 	Modification of the Goods by TELKOM, without prior expressed written approval by CONTRACTOR.

Article 43

Responsibility for
Any Damage to Property and
Accident or Injury to Workers

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

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

	 	 	which result directly from the activities of the CONTRACTOR, its Sub-contractors, or agents in the
execution of the Contract.
	 
	43.2	 	CONTRACTOR shall be liable for all claims, losses, expenses, and damages described in
Article 43.1 above, and shall indemnify and save the TELKOM harmless from all such claims,
losses, expenses and damages.

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	43.3	 	CONTRACTOR only have the obligations as set out in this
Article 43.2, if TELKOM:

	 	a.	 	provide immediate written notice to the CONTRACTOR of all such claims and suits;
	 
	 	b.	 	permit 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.

	43.4	 	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.
	 
	43.5	 	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
CONTRACTOR or any Sub-contractor, except an accident or injury resulting from any act or
default of TELKOM. 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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CHAPTER VII

STANDARD TERMS AND CONDITIONS

Article 44

Contract Amendments

	44.1	 	TELKOM may at any time, by a written order given to the CONTRACTOR pursuant to Article 4, 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.	 	Implementation Schedule of Project.

	44.2	 	If any change causes an increase or decrease of cost and the time necessary for completion of
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.
	 
	44.3	 	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-5 (Detail of Contract Price 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 shall satisfy TELKOM that:

	 	1)	 	The proposed adjustment is fair and reasonable;
	 
	 	2)	 	The CONTRACTOR had used its

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	 	 	 	best efforts to tender for, and negotiate with such Sub-Contractor’s (if any) for such change on
terms and conditions, and prices that are fair and reasonable;

	 	3)	 	the price and conditions for the services are provided on terms and practices that are no less
favorable than that TELKOM could obtain in the market place (externally), or that granted by the
Contractor to its other customers;
	 
	 	4)	 	the Contractor shall provide such evidence as TELKOM may reasonably require.

	44.4	 	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.
	 
	44.5	 	TELKOM and CONTRACTOR shall be ascertained and determined.
	 
	44.6	 	If any such change causes an increase or decrease in the cost of any part of the Works under
the Contract, an equitable adjustment shall be made in the Contract Price upon mutual agreement by
the parties hereto.
	 
	44.7	 	Any changed in respect of the Contract shall only be recognized or acceded to when that has
been agreed in writing by the TELKOM prior to implementation of the Contract changed by the
CONTRACTOR. The implementation of such change may be executed by CONTRACTOR in parallel after having
approval from TELKOM’s Project Manager or after signing of the Contract Amendment pursuant to
Article 44.9 by both Parties.
	 
	44.8	 	TELKOM shall not be liable for any additional work unless it
is recorded in Contract Change. If
the CONTRACTOR proceeds without such written authorization, it shall be deemed a waiver by the
CONTRACTOR of any and all claims for

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	 	 	additional payments.

	44.9	 	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

Article 45

Delays in the Works Performance

	45.1	 	Subject to Articles 44, CONTRACTOR shall complete the supply and installation of the System by
the Time of Completion as specified in Article 3.
	 
	45.2	 	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 45.3, the
CONTRACTOR has to be granted such extension of time for completion as shall be mutually agreed.
	 
	45.3	 	In connection with Article 45.2 and provided that CONTRACTOR proves that:

	 	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)

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	 	 	 	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.

	45.4	 	If the System is not completed in accordance with Article 3 or by the end of the period of
extension agreed upon under Article 44, 46.3 and 46.5, the CONTRACTOR shall pay to the TELKOM by
way of liquidated damages pursuant to Article 47.

Article 46

Force Majeure

	46.1	 	Notwithstanding the provisions of Articles 45, 47, dan 48, CONTRACTOR shall not be liable for
forfeiture of its performance bond security, liquidated damages or termination for default or any
other remedy TELKOM may have, 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.
	 
	46.2	 	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
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 41.6 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,

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	 	 	commotion or disorder. Similar events outside Indonesia will also be considered as a Force Majeure.

	46.3	 	If the force majeure occurred outside Indonesia, TELKOM shall extend the 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.
	 
	46.4	 	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
terminated wholly or partly by mutual agreement of Parties.
	 
	46.5	 	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.
	 
	46.6	 	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. All additional cost for protection and securing the Work shall be paid by TELKOM.
	 
	46.7	 	Should the suspension as specified in

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	 	 	Article 46.5 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.

	46.8	 	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 and reasonable profit 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.

Article 47

Liquidated Damages

	47.1	 	Liquidated Damages Amount
	 
	 	 	Subject to Article 3 of this Contract, if CONTRACTOR fails to deliver to TELKOM the System forming
a Site within the Time of Completion, TELKOM shall, without prejudice to its other remedies under
the Contract, deduct from the Contract Prices, as liquidated damages, a sum equivalent to 1 per mil
(1 °/oo) of the Contract Price of System forming for each days of delay until actual performance,
maximum 5% (five percent) of the Contract Price of System. The CONTRACTOR is responsible for the
liquidated damages for the delay solely attributable to itself.
	 
	47.2	 	Liquidated damages as mentioned as Article 47.1 shall be paid by the Contractor within 30
(thirty) calendar days from the date of notification by TELKOM of the application of such damages;

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	47.3	 	Should CONTRACTOR’s default in the payment of liquidated damages be applied under the terms of
this Clause, TELKOM shall have the right to obtain compensation by making deductions (prior to
deductions, the matters will be mutually agreed by both Parties) from any payments due or to become
due to CONTRACTOR and/or by recovering such sums as a debt or by forfeiture in part or in whole by
means of the Letter of Performance Guarantee. The payment or deduction of such damages shall not
relieve the CONTRACTOR from his obligations to complete the Works, or from any other of his
obligations and liabilities under the Contract.

Article 48

Termination of Contract

	48.1	 	Termination for Default

	 	a.	 	TELKOM may, without prejudice to any other remedy for breach of contract, by written notice of
default sent to the Contractor, terminate the Contract in whole or in part:

	 	1)	 	if the CONTRACTOR fails (without a reasonable excuse) 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 3, or any
extension thereof granted by TELKOM pursuant to Article 44, or;
	 
	 	2)	 	If the CONTRACTOR fails (without a reasonable excuse) to perform any substantial obligation
under this Contract.
	 
	 	3) 	 	If the CONTRACTOR do not take any action within 30 (thirty) calendar days since the Effective Date
of Contract;

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	 	4)	 	if the CONTRACTOR delay up to 50 (fifty) calendar days from the agreed Time of Completion as
describe in Article 3 without any writing from CONTRACTOR pursuant to Article 45 2,.

	 	b.	 	If the Contract shall be terminated due to the above reasons
Article 48.1 then TELKOM have the
right to forfeiture the performance bond which will be proprietary of TELKOM.
	 
	 	c.	 	In the event TELKOM terminates the Contract in whole or in
part, pursuant to Article 48.1 TELKOM
may procure, upon such terms and in such manner as it deems appropriate, the Goods similar to those
undelivered and the Works impel formed, and the CONTRACTOR shall be liable to 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.

	48.2	 	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.
	 
	48.3	 	Termination for Convenience

	 	a.	 	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

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	 	 	 	the Contract is terminated, and c) the date upon which such
termination becomes effective.
	 
	 	b.	 	The Goods that are complete and ready for shipment within 30 (thirty) calendar 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.

	 	 	1)	 	to have any portion completed and
delivered at the Contract terms and
Price, and/ or.
	 
	 	 	2)	 	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.
	 
	 	d.	 	Under this Article, the CONTRACTOR is entitled to be paid for the Work actually performed
and still to be performed such as for the items to be taken over by
TELKOM.

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Article 49

Termination of Contract

	49.1	 	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 this
Contract.
	 
	49.2	 	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.
	 
	49.3	 	The Dispute Review Panel shall be composed of 3
(three) members. One member selected by
TELKOM, one by CONTRACTOR and the third by the both Parties. The first two members shall be
mutually acceptable to both TELKOM and CONTRACTOR. The costs incurred by the Dispute Review
Panel for the Trust two members in the performance of its duties and responsibilities shall be
borne respectively by TELKOM and CONTRACTOR, and for the third member equally by TELKOM and
CONTRACTOR.
	 
	49.4	 	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

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	 	 	dispute is declared to be settled

Article 50

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 English 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 English.

Article 51

Applicable Laws and Compliance with

Statutes, Regulations, and By-Laws

	51.1	 	The Contract shall be interpreted in accordance with the laws
of Republic of Indonesia.
	 
	51.2	 	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 satutes, ordinances or laws, regulations or
by-laws.
	 
	51.3	 	TELKOM assumes that CONTRACTOR has thoroughly informed himself about such laws and
regulations, and the CONTRACTOR shall be responsible for the
observance of the same.
	 
	51.4	 	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

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	 	 	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
adjusted by mutual agreement between the Parties.

Article 52

Notices

	52.1	 	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 CONTRACTOR as follows :
	 
	a.	 	TELKOM

          Attn : Project Manager

          PT TELEKOMUNIKASI INDONESIA TBK

          EGM Infrastructure Telecommunication

          Graha Citra Caraka, Lantai M

          Jl. Gatot Subroto, Kav 52, Jakarta

          Telp. 021-5221500

          Fax. 022-5229600

          CC : Director of IT and Supply

	b.	 	CONTRACTOR

          Attn
: Mr. Yasunari Ishibashi

          Address Fujitsu Ltd (Submarine networks),

          Photonics systems group, 4-1-1 kamikodanaka,

          Nakahara-ku Kawasaki, 211-8588 Japan

          Phone No : +81 44 7543866

          Fax No : +81 44 7543871

          Attn : Mr. Ashutosh Bhargava

          Address NSW, Kabel Strasse 9-11,

          D-26954, Nordenham, Germany

          Phone No : +49 4731 821856

          Fax No : +49 4731 821528

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

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Article 53

Effective Date of Contract (EDC)

This Contract shall be effective on the date as stated in TELKOM’s official
announcement letter to CONTRACTOR

Article 54

Attachments

	54.1	 	The following documents shall be attached and constituted as an integral part of
this Agreement. These are arranged below as per their priority in order of their
precedence:

	 	 	 	 	 
	Attachment l

	 	:
	 	Minutes of Meetings (MoM’s) between the parties
	Attachment 2

	 	:
	 	Letter of Contract Award
	Attachment 3

	 	:
	 	Commitment Letter
	Attachment 4

	 	:
	 	Scope of Work
	Attachment 5

	 	:
	 	Detail of Contract Price and Bill of Quantity
	Attachment 6

	 	:
	 	Power of Attorney
	Attachment 7

	 	:
	 	Billing Milestones and Tentative Payment Schedule
	Attachment 8

	 	:
	 	Implementation Schedule (Plan of Work)
	Attachment 9

	 	:
	 	Permit Matrix
	Attachment 10

	 	:
	 	Compliance List Responses
	Attachment 11

	 	:
	 	Technical Specifications
	Attachment 12

	 	:
	 	Request for Proposal
	Attachment 13

	 	:
	 	Performance Bond Copy
	Attachment 14

	 	:
	 	Consortium Agreement

	54.3	 	In the event of discrepancies between the provisions of this Agreement with
attachments thereof, then the provisions of this Agreement shall
prevail.

Article 55

Severability

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.

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Article 56

Good Faith

In the implementation of this Contract the
Parties shall consider business ethics as a
public ethics to success and result of Project
quality.

CONTACTOR shall make by its own costs 10 (ten)
copies of this Contact to be delivered to TELKOM
for the control of implementation of the Contract
and other related activities.

This Contract is made with good faith and must be
adhered to by Both Parties, made in 2 (two)
original, having the same contents written on the
sufficient duty-stamped paper having equal legal
powers after being signed and stamped with
corporate stamps of Both Parties. The terms and
conditions as stated in this Contract. are valid
for the official signed and his entire successors.

Signed by

For and on behalfof: 

	 	 	 
	PT TELEKOMUNIKASI INDONESIA, Tbk
	 	NSW-FUJITSU CONSORTIUM,
	 	 	 
	/s/ Indra Utoyo
	 	/s/ Gensei Katano
	 
	 	 
	 	 	 
	INDRA UTOYO
	 	GENSEI KATANO
	Director of IT & Supply
	 	Group Vice President,
	 
	 	Submarine Networks, Photonics Group,
	 
	 	Fujitsu Ltd
	 	 	 
	
	 	/s/ Rudolf Stahl
	 
	 	 
	 
	 	
RUDOLF STAHL
	 	 	 
	 
	 	Managing Director, NSW

Page 80 of 81

 

EMPTY

Page 81 of 81Exhibit 10.1

                  Summary of Non-Employee Director Compensation

All  non-employee  directors  of our  board of  directors  are each paid fees of
$1,275 per month. Attendance at a board committee meeting by a committee member:
$375 per meeting for the  non-management  chairman of each board  committee  and
$325 for the other non-management directors.

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