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1
DEPARTMENT OF TOURISM
GOVERNMENT OF UTTAR PRADESH
DRAFT LEASE CUM DEVELOPMENT AGREEMENT
Between
And
For
Development of Tourism Properties at __________________________
2
This LEASE CUM DEVELOPMENT AGREEMENT mutually agreed and entered into on
the _______ day of _______ (month) ___________ (year) at Lucknow.
Between
Government of Uttar Pradesh (GoUP) acting through its Director General, Department of
Tourism having its office at Paryatan Bhawan, C-13, Vipin Khand, Gomti Nagar, Lucknow:
226 010, (hereinafter referred to as the “Lessor” or “Authority which expression shall
unless repugnant to the context include its successors) of the One Part.
And
____________________________, a company incorporated under the provisions of the
Companies Act, 1956 and having its registered office at __________________, represented
through its authorised representative Mr. __________________(hereinafter referred to as the
“Lessee or Developer” which expression shall include unless repugnant to the context its
successors ) on the Other Part.
Authority and Developer are hereinafter collectively referred to as “Parties” and individually
as “Party”.
3
WHEREAS
1. The Authority is an agency established by Government of Uttar Pradesh (“GoUP”) for
the purpose of development of tourism, operation, management and maintenance of
tourism properties like Rahi Tourist Bunglows, Hotels, Motels, Resorts, Restaurants
etc. (hereinafter referred to as the “Unit”) and other activities in the state of Uttar
Pradesh.
2. With the objective of providing upgraded facilities to users, better management,
promoting tourism and unlocking the commercial value of the Properties, the Authority
proposes to lease these Properties to private sector party for design, finance,
development, construction, up-gradation, modernisation, operation, maintenance and
management (the “Project”), in accordance with the terms and conditions set forth
herein.
3. Accordingly, the Authority invited proposals from interested parties through a single
stage transparent and competitive bidding process to develop these identified
Properties. In response thereto, the Authority received proposals from various parties
for implementing the Project. Pursuant thereto, after evaluation of all the proposals
received for ________________ Property located at_________________, the Authority
accepted the proposal of the Selected Bidder and accordingly issued a Letter of Award
bearing No. ______ dated _____ requesting the Selected Bidder to execute the Lease
cum Development Agreement, which the Selected Bidder has acknowledged through
the Letter of Acceptance No. _______ dated __________.
4. Thereafter, the Authority has agreed to grant the lease to Develop, Operate, Manage
and Maintain the Property throughout the Lease Period in accordance with the
provisions of this Lease cum Development Agreement.
5. In lieu of Grant of the Lease, the Developer has paid the Annual Lease Rent of Rs ___
Crore (Rupees ______ Crore only) to the Authority.
6. The Developer has also submitted an Upfront Fee of Rs ___ (Rupees ______ Lakhs
only) to the Authority.
7. The Developer has also submitted the requisite Performance Security in the required
form to The Authority.
The Developer represents and warrants that they have duly fulfilled all the terms and
conditions necessary for the execution of this Agreement as per the terms contained in the
RFP documents and are in a position to execute this Agreement and implement the Project as
envisaged in the Bid and this Agreement.
The Developer has fulfilled all the Conditions Precedent to signing the Lease Agreement.
NOW THERFORE in consideration of the foregoing and respective covenants and
agreements set forth in this Agreement, the sufficiency and adequacy of which is hereby
acknowledged, and intending to be legally bound hereby, the Parties agree as follows:
4
ARTICLE 1 : DEFINITIONS AND INTERPRETATION
1.1. Definition
In this Agreement, the following words and expressions shall, unless repugnant to the
context or meaning thereof, have the meaning hereinafter respectively ascribed/
assigned to them hereunder:
“Agreement or Lease cum Development Agreement” shall mean this Agreement
including the Schedules hereto, and any amendments thereto made in accordance with
the provisions contained in this Agreement.
“Annual Lease Rent” shall mean the Annual Lease Rent payable by Developer to the
Authority.
“Annual Revenue Share” shall mean 5% (five per cent) of the Gross Revenue of each
Financial Year.
“Applicable Laws” shall mean all laws in force and effect as on date hereof and which
maybe promulgated or brought into force and effect hereinafter in India by Government
of India or Government of Uttar Pradesh including regulations and rules made
thereunder, and judgements, decrees, injunctions, writs and orders of any court of
record, as may be in force and effect during the subsistence of this Agreement and
applicable to the Project.
“Applicable Permits” means all notifications, clearances, permits, authorisations,
licenses, consents, permissions, rulings, exemption, approvals or any other permit of
whatsoever nature which is required to be obtained and maintained by the Developer
under or pursuant to Applicable Laws, in connection with the Project during the
subsistence of this Agreement.
“Appointed Date” shall mean the date of execution of this Agreement.
“Approval” shall mean all authorisations, consents, approvals, notifications and
permissions and any license, permit, ruling, exemption or other authorization of
whatsoever nature which is required to be granted by, or any registration or filing with,
any authority under Applicable Law for or in respect of this Agreement including for
performance of any obligation or exercise of any right by a Party herein but excluding a
Clearance.
“Arbitration Act” means the Arbitration and Conciliation Act, 1996 and shall include
any amendment/modifications to or any re-enactment thereof as in force from time to
time.
“Bid” shall mean the Bid (Technical & Financial) submitted by the Selected Bidder in
response to the Request for Proposal (RFP) issued by the Authority for this Project.
“Building” shall mean the building or the built-up spaces forming part of the Property.
5
“Clearance” means the written consent, licence, approval, permit, rulings, exemption,
notification, no objection certificate or other authorisation or permission of whatsoever
nature which is required to be obtained from any authority from time to time in
connection with the Project.
“Completion Certificate” means the certificate issued by the Authority pursuant to
Clause 11.3.3.
“Contractor” means the person with whom the Developer has entered into / may enter
into all or any of the Project Agreements other than this Agreement, License
Agreement and Financing Documents.
“Cure Period” means the period specified in this Agreement for curing any breach or
default of any provision of this Agreement by the Party responsible for such breach or
default.
“Development Phase” shall mean the period of 5 year from the Appointed Date in
which the Developer has to carry out major Development/Construction Works.
“Dispute” shall have the meaning ascribed thereto in Article 16.
“Dispute Resolution Procedure” means the procedure for resolution of Dispute set
forth in Article 16.
“Drawings” means all drawings, designs, calculations and documents pertaining to the
Project prepared in accordance with Applicable Law and Good Industry Practice and
submitted by the Developer.
“Due Date” shall mean the date for making payment of Annual Lease Rent i.e April
30th
of every Financial Year.
“Emergency” means a condition or situation that is likely to endanger the security of
the individuals on or about the Property and / or Project Facility including users thereof
or which poses an immediate threat of material damage to the Property and / or Project
Facility.
“Encumbrance” means any encumbrance such as mortgage, charge, pledge, lien,
hypothecation, security interest, assignment, privilege or priority of any kind having the
effect of security or other such obligations and shall include without limitation any
designation of loss payees or beneficiaries or any similar arrangement under any
insurance policy pertaining to the Project, physical encumbrances, claims for any
amount due on account of taxes, cesses, electricity, water and other utility charges and
encroachments on the Property and / or Project Facility.
“Escrow Account” shall mean the escrow account established pursuant to/ under the
Escrow Agreement.
“Escrow Agreement” shall mean the escrow agreement to be entered into between the
the Authority, the Developer and a bank in the form set forth in Schedule 7 hereof.
6
“Existing Leases” shall mean the leases presently valid and subsisting for any portion
of the Property, entered between the the Authority and various third parties, details of
which are set out in Schedule 6 appended hereto;
“Expiry” shall mean expiry of the Lease at the end of the Lease Period.
“Expiry Date” shall mean the date on which this Agreement expires.
“Fair Market Value” in relation to Transfer Date means the market value of the entire
asset prevailing as on the Transfer Date.
“Financing Documents" shall mean the documents executed by the Developer in
respect of financial assistance to be provided by the Lenders by way of loans, advances,
guarantees, risk participation, take-out financing or any other form of credit
enhancement and shall include loan agreements, guarantee agreements, subscription
agreements, notes and any documents providing security for such financial assistance
and includes amendments or modifications made thereto.
“Financial Closure” shall mean the date on which the Financing Documents providing
for funding by the Lenders for the Project have been executed and have become
effective such that the Developer has immediate access to such funding under the
Financing Documents.
“Financial Year” shall mean the period commencing from 1st April of any given year
and ending on 31st March of the succeeding year.
“Force Majeure” shall mean events as described in Article 18.
“General Employees” shall mean all the permanent employees of the Authority who
are posted at the Property as on the Appointed Date.
“GoI” shall mean the Government of India and any of its duly authorised agency,
authority, department, inspectorate, ministry or person (whether autonomous or not).
“GoUP” shall mean the Government of the State of Uttar Pradesh and any of its duly
authorised agency authority, department, inspectorate, ministry or person (whether
autonomous or not) under the lawful and effective control and direction of Government
of Uttar Pradesh
“Good Industry Practice” shall mean the exercise of that degree of skill, diligence,
efficiency, reliability, prudence and foresight in compliance with the undertakings and
obligations under this Agreement which would reasonably and ordinarily be expected
of a skilled and an experienced person engaged in the implementation, operation,
maintenance, supervision or monitoring thereof or any of them of a Project similar to
that of this Project.
“Government Agency” means Government of India (GoI), Government of Uttar
Pradesh (GoUP), or any state government or governmental, department, commission,
board, body, bureau, agency, authority, instrumentality, court or other judicial or
administrative body, central, state, or local, having jurisdiction over the Developer, the
Project, the Property, the Project Facility or any portion thereof, or the performance of
7
all or any of the services or obligations of the Developer under or pursuant to this
Agreement.
“Gross Revenue” shall mean the total annual receipts of business and all sources of
revenue or amounts of money, by whatever name called, that arise, accrue to and/or are
received by the Developer from the Project Facility/implementation of the Project by
the Developer at the Property but excluding the service tax, value added tax, sales tax
and luxury tax but not the income tax that are payable/paid by the Developer on such
receipts and amounts of money.
“Handback Requirements” shall have the meaning ascribed thereto in Article 15.
“Hospitality/Tourism Services” shall include service activities pertaining to
development, operation, maintenance of hotels, motels, guest houses, tourist
bungalows, resorts, bar & restaurants or such businesses that provide transitional or
short term lodging/fooding and leisure services and/ or facilities, tourism that may be
based on the cultural, historic, and social attractions of a place or on the appeal of a
different environment, and tours and ancillary services for tourists, development of
package holidays, health resorts, medical tourism, Convention/ Banquet Halls.
“Independent Auditor” shall mean a reputed firm of Chartered Accountants
Practising in India that may be appointed by the Authority pursuant to and in
accordance with Article 10.
“Independent Engineer” shall mean a reputed individual / firm / company having
expertise in the field of Engineering and Project Management appointed by the
Authority for supervision and monitoring the compliance by the Developer of the
Project requirements.
“Initial Phase” shall mean a period of 1 year from the Appointed Date, in which the
Developer has to carry out works related to renovation, restoration, refurbishment of
the Property, Project Facility and Project Asset such that the Property shall be fully
operational by the end of such period. The statement holds good for the closed units
also.
“Implementation Works” shall mean works related to the implementation of the
Project including but not limited to investigation, design, renovation, redevelopment,
augmentation, of the Property into the Project Facility and financing the same.
“Lenders” shall mean financial institutions, banks, funds, trusts or trustees of the
holders of debentures or other securities their successors and assigns, who have
provided financial assistance to the Developer under any of the Financing Documents.
“Lease” shall have the meaning ascribed thereto in Clause 3.1.
“Lease Period” shall have the meaning ascribed thereto in Clause 3.2.
“Material Adverse Effect” shall mean material adverse effect on (a) the ability of the
Developer to exercise any of its rights or perform / discharge any of its duties /
8
obligations under an in accordance with the provisions of this Agreement and/or (b) the
legality, validity, binding nature or enforceability of this Agreement.
“Material Breach” shall mean a breach by either Party of any of its obligations under
this Agreement which has or is likely to have a Material Adverse Effect on the Project
and which it shall have failed to cure within the Cure Period.
“Operation and Management” shall mean the operation and management of the
Project Facility during the Lease Period and includes but is not limited to functions of
operation, maintenance, renovation, upgradation and performance of other services
incidental thereto.
“Performance Security” shall mean the Performance Security as mentioned in Article
7.
“Person” shall mean (unless otherwise specified or required by the context) any
individual, company, corporation, partnership, joint venture, trust, unincorporated
organisation, government or Government Agency or any other legal entity.
“Property” shall mean land admeasuring ______ acres, and the Building titled
“___________________” standing upon it having built up area of ___________sq.ft
(approx), located at __________________, bearing Mouza: ___________________,
Khata: _________, Plot No.: _______,___________, Uttar Pradesh.
“Project” shall have the meaning ascribed thereto in Clause 2.1.1.
“Project Agreements” shall collectively mean this Agreement and any contracts for
engineering, procurement, design, renovation, augmentation, operation or management
of the Project Facility and any other material contract (other than the Financing
Documents) entered into or may hereafter be entered into by the Developer in
connection with the Project.
“Project Assets” means the physical, tangible, intangible and other assets of
whatsoever nature existing at the Property as on the date hereof except working capital
assets other than inventory, stores and spares.
"Project Facility" means the Project Asset and all assets and facilities including
moveable, fittings and fixtures comprised therein which the Developer shall provide or
procure within the Project Asset for compliance to the provisions of this Agreement and
for better commercial utilisation of the Project Asset, consistent with the
Hospitality/Tourism services and the terms of this Agreement. Further, it shall include
all the works related to design, finance, development, construction, up-gradation,
modernisation, operation, maintenance and management of the Property in accordance
with the provisions of this Agreement, along with the structures, common areas,
infrastructure and facilities and services relating thereto, that shall be developed,
designed, financed, constructed, completed, commissioned, operated and maintained on
the Property by the Developer.
“Rs.” or “Rupees” refers to the lawful currency of the Republic of India.
9
“SBI Base Rate” means the rate per annum for loans with 1 (one) year maturity as
fixed from time to time by State Bank of India, and in the absence of such rate, the
average of the rates for loans with 1 (one) year maturity fixed by Bank of India and
Bank of Baroda and failing that any other arrangement that substitutes such rate as
mutually agreed between the Parties.
“Specifications and Standards” means the specifications and standards relating to the
Project Facility and forming part of the Minimum Development Obligations that the
Developer is required to adhere to.
“Statutory Auditors” means a reputed firm of Chartered Accountants duly licensed to
practice in India.
“Tax or Taxes” shall mean and include all taxes, duties, cess, levies that may be
payable by the Developer under Applicable Law.
“Termination” means termination of this Agreement and the Lease hereunder pursuant
to the delivery or deemed delivery of a Termination Notice or otherwise in accordance
with the provisions of this Agreement but shall not, unless the context otherwise
requires, include the expiry of this Agreement/Lease due to expiry to the Lease
Agreement in the normal course.
“Termination Date” means the date on which the Termination occurs which shall be
the date on which Termination Notice has been delivered or deemed to have been
delivered by a Party issuing the same to the other Party in accordance with the
provisions of this Agreement.
“Termination Notice” means a communication in writing by a Party to the other Party
seeking Termination in accordance with the applicable provisions of this Agreement.
“Termination Payment” means the amounts payable by a Party to the other Party
under this Agreement upon the Termination of this Agreement in accordance with the
provisions of this Agreement.
1.2. Interpretation
1.2.1 In this Agreement, unless the context otherwise requires
(i) any reference to a statutory provision shall include such provision as is from
time to time modified or re-enacted or consolidated so far as such modification
or re-enactment or consolidation applies or is capable of applying to any
transactions entered into hereunder;
(ii) references to laws of Uttar Pradesh, laws of India or Indian law or regulations
having the force of law shall include the laws, acts, ordinances, rules,
regulations, bye-laws or notifications which have the force of law in the
territory of India and as from time to time may be amended, modified,
supplemented, extended or re-enacted;
(iii) references to a “person” and words denoting a natural person shall be
construed as a reference to any individual, firm, company, corporation,
society, trust, government, state or agency of a state or any association or
partnership (whether or not having separate legal personality) of two or more
of the above and shall include successors and assigns;
10
(iv) the table of contents, headings or sub-headings in this Agreement are for
convenience of reference only and shall not be used in and shall not affect the
construction or interpretation of this Agreement;
(v) the words importing singular shall include plural and vice versa and a
reference to any gender shall include a reference to the other gender;
(i) terms and words beginning with capital letters and defined in this Agreement
shall have the meaning ascribed thereto herein and the terms and words
defined in the Clauses/Articles/Schedules and used therein shall have the
meaning ascribed thereto in the Clauses/Articles/Schedules;
(ii) the words “include” and “including” are to be construed without limitation and
shall be deemed to be followed by “without limitation” or “but not limited to”
whether or not they are followed by such phrases;
(iii) references to “construction, renovation, augmentation” includes, unless the
context otherwise requires, investigation, design, engineering, procurement,
delivery, transportation, installation, processing, fabrication, testing,
commissioning and other activities incidental to the construction;
(iv) any reference to any period of time shall mean a reference to that according to
Indian Standard Time;
(v) any reference to day shall mean a reference to a calendar day;
(vi) any reference to month shall mean a reference to a calendar month;
(vii) reference to a “business day” shall be construed as a reference to a day (other
than Sunday) on which banks in Lucknow are generally open for business;
(viii) the Schedules to this Agreement form an integral part of this Agreement and
will be in full force and effect as though they were expressly set out in the
body of this Agreement;
(ix) any reference at any time to any agreement, deed, instrument, licence or
document of any description shall be construed as reference to that agreement,
deed, instrument, license or other document as amended, varied,
supplemented, modified or suspended at the time of such reference provided
that this clause shall not operate so as to increase liabilities or obligations of
the Authority hereunder or pursuant hereto in any manner whatsoever;
(x) references to Recitals, Articles, Clauses, Sub-clauses, Paragraphs, or
Schedules in this Agreement shall, except where the context otherwise
requires, be deemed to be references to Recitals, Articles, Clauses, Sub-
clauses, paragraphs, and Schedules of or to this Agreement;
(xi) any agreement, consent, approval, authorisation, notice, communication,
information or report required under or pursuant to this Agreement from or by
any Party shall be valid and effectual only if it is in writing under the hands of
duly authorised representative of such Party, as the case may be, in this behalf
and not otherwise;
(xii) any reference to any period commencing “from” a specified day or date and
“till” or “until” a specified day or date shall include both such days or dates;
(xiii) the damages payable by either Party to the other of them as set forth in this
Agreement, whether on per diem basis or otherwise, are mutually agreed
genuine pre-estimated loss and damage likely to be suffered and incurred by
the Party entitled to receive the same and are not by way of penalty (‘the
Damages”)
(xiv) “indebtedness” shall be construed so as to include any obligation (whether
incurred as principal or surety) for the payment or repayment of money,
whether present or future, actual or contingent;
11
(xv) unless otherwise expressly provided in this Agreement any documentation
required to be provided or furnished by the Developer to the Authority shall be
provided free of cost and in three copies and if the Authority is required to
return any such documentation with their comments and/or approval, then they
shall be entitled to retain two copies thereof;
(xvi) The rule of construction, if any, that a contract should be interpreted against
the parties responsible for drafting and preparation thereof, shall not apply;
(xvii) Any word or expression used in this Agreement shall, unless otherwise defined
or construed in this Agreement, bear its ordinary English meaning and, for
these purposes, the General Clauses Act, 1897 shall not apply.
1.2.2 Measurements and Arithmetic Conventions
All measurements and calculations shall be in metric system and calculations done to 2
decimal places, with the third digit of 5 or above being rounded up and below 5 being
rounded down.
1.2.3 Priority of contract documents and errors/discrepancies
This Agreement, and all other agreements forming part of this Agreement are to be
taken as mutually explanatory to one another and, unless otherwise expressly provided
elsewhere in this Agreement, the priority of this Agreement and other documents and
agreements forming part hereof shall, in the event of any conflict between them, be in
the following order:
i this Agreement;
ii Schedules, Annexures and Appendices of this Agreement;
iii Bidding/RFP Documents;
iv LOI and other communication issued by the Authority to the Selected Bidder or
to the Developer;
v all other documents forming part of this Agreement;
i.e. the agreement at (i) above shall prevail over the agreements and documents at (ii
to v) above.
1.2.4 In case of ambiguities or discrepancies within this Agreement the following shall apply:
i between two or more Articles and or Clauses of this Agreement, the provisions
of the specific Article and or Clause relevant to the issue under consideration
shall prevail over those in other Articles or Clauses;
ii between the written description on the Drawings and the Specifications and
Standards, the latter shall prevail;
iii between the dimension scaled from the Drawing and its specific written
dimension, the latter shall prevail;
iv between any value written in numerals and that in words, the higher value shall
prevail, whether written in words or numerals;
v between the clauses of this Agreement and the Schedules, the Clauses shall
prevail and between Schedules and Annexes, the Schedules shall prevail.
ARTICLE 2: SCOPE OF THE PROJECT
2.1 Project
2.1.1 Project shall mean and include but not limited to:
a. Design, finance, develop, construct, upgrade, modernise, manage, operate, and
maintain the Property exclusively for Hospitality/Tourism Services during the
12
Lease Period and handing over full and peaceful possession of the Property
along with Project Facility to the Authority at the end of the Lease Period,
without any Encumbrance and/or liability and at value to the effect that the
Developer shall have no claim on the aforesaid Property.
b. perform and fulfill all the obligations of the Developer in accordance with the
provisions of this Agreement.
c. Renovation, upgradation, modernization, value addition and augmentation to be
done in accordance with the Minimum Development Obligations specified in
Clause 2.2
2.2 Minimum Development Obligations
2.2.1 The Developer shall meet the following minimum development obligations (the
“Minimum Development Obligations”) while designing, renovating, developing,
augmenting the Property:
a. The Developer shall upgrade/renovate/modernise the existing Project Facility
and create/add other assets including overall development as required for the
Property and shall make an investment of an amount equal to or greater than Rs
________ (Rupees________________________).
b. Commit to finance, upgrade, develop, operate, manage and maintain the
Property, Project Facility and Project Asset as per Good Industry Practice from
the Appointed Date.
c. The Property, Project Facility and Project Asset under consideration shall be
used only for providing Hospitality/Tourism services.
d. Complete the Initial Phase within 1 year from the Appointed Date and
Modernisation Phase within 5 years from Appointed Date.
e. Augmentation/expansion/Development of the Property with prior approval from
the Authority to be in line with the local building regulations, and other
Applicable Laws.
f. Follow the Building bye-laws and Regulation of the nearest Urban Area for
additional construction/development in case the Unit/Property is located in
Rural Area.
g. Carry out new construction for providing additional rooms or additional
facilities in the Property.
h. Non-violation of all applicable Environmental Standards and Pollution Control
Norms as laid down by Central / State Pollution Control Board.
i. Existing local development controls, if any, will be binding if they are more
limiting than the Project Specifications / Minimum Requirements.
j. Operate the Project without disturbing the natural surroundings and ensuring
that the local flora and fauna are not disturbed.
k. Create an adequate waste disposal system for management and disposal of the
waste generated through the Project.
l. Responsible for maintaining hygiene and quality standards at the Property and
Project Facilities and providing quality services to tourists.
m. Responsible for providing adequate security for the tourists using the Project
Facilities, and ensuring there is no damage or loss to Project Facilities.
ARTICLE 3: GRANT OF LEASE
3.1 Grant of Lease
13
3.1.1 Subject to and in accordance with the terms and conditions set forth in this
Agreement, Applicable Laws and Applicable Permits, the Authority hereby grants to
the Developer possession of the Property, Project Asset and Project Facility as set
forth in Schedule 4 on ‘as is where is basis’ for the sole purpose of the Project, and
grants and authorizes the Developer the exclusive rights and privilege to develop,
conceptualise, design, finance, renovate, construct, maintain, operate and manage the
Property and Project Facility and to exercise or to enjoy the rights, powers, benefits,
privileges, authorizations and entitlements as set forth in this Agreement (the
“Lease”) for the entire duration of the Lease Period or until the earlier Termination of
the Lease in accordance with the provisions of this Agreement, and the Developer
hereby accepts the Lease and agrees to implement the Project subject to and in
accordance with the terms and conditions set forth herein.
3.1.2 Subject to and in accordance with the provisions of this Agreement, the Lease hereby
granted shall entitle the Developer to enjoy and oblige the Developer to undertake the
following in accordance with the provisions of this Agreement, the Applicable Laws
and Applicable Permits:
a. to investigate, study, design, engineer, procure, finance, renovate, augment,
commission, operate, maintain and manage the Property, Project Facility and
Project Asset according to the provisions of this Agreement. ;
b. demand, collect and appropriate money/charges from persons enjoying the
facilities of the Project Facility or any part thereof;
c. to carry out any activity or business related or ancillary to the activities referred
above or which the Developer considers desirable or appropriate to be carried
on or engaged in connection therewith;
d. perform and fulfil all of the Developer’s obligations under this Agreement;
e. bear and pay all expenses, costs, charges, and taxes incurred in the fulfilment of
the Developer’s obligations under this Agreement;
f. not to assign or create any Encumbrance on the whole or any part of the
Property or Project Facility or Project Asset nor transfer, sub-lease or part
possession therewith save and except as expressly permitted by this Agreement.
g. contract and/or sub contract and License with third parties to undertake
functions on behalf of the Developer;
h. not to use the Property, Project Facility and Project Asset for any purpose other
than the purpose of the Project and purposes incidental or ancillary to as
permitted under this Agreement.
3.1.3 For the purpose of exercising its rights and/or performing its obligations pursuant to
Clause 3.1.2, the Developer may subject to and in accordance with the provisions of
this Agreement, at any time, grant Service Provider Rights to any person for the
purpose of carrying out the activities described in Clause 3.1.2, on such terms and
conditions as the Developer may determine to be reasonably appropriate, subject to
the same being within the framework of this Agreement and not being contrary to the
terms and conditions of the Agreement. The grant by the Developer of a Service
Provider Right shall not relieve the Developer of any of its responsibilities, duties and
obligations under this Agreement.
3.2 Lease Period
3.2.1 The Lease hereby granted is for a period of thirty (30) years commencing from the
Appointed Date and ending on the Expiry Date (“the Lease Period”). Provided that
in the event of Termination, the Lease Period shall mean and be limited to the period
14
commencing from the Appointed Date and ending with the Termination Date.
3.2.2 At the end of the Lease Period, the Authority shall have the right to invite fresh bids
from interested parties to develop, operate and manage the Project. In this scenario,
the Developer shall have the Right of First Refusal i.e. the right to match the highest
financial bid received by the Authority, provided the Authority is satisfied with the
Developer with regard to observance of the terms & conditions of the Lease
Agreement during its validity.
3.2.3 Subject to Clause 3.2.2, the Developer shall on the last date of Lease Period hand over
the Project Assets, Project Facilities including the Property on which the same has
been developed and all rights thereto to the Authority at Rs 1/ value and free of all
encumbrances.
3.3 Acceptance of the Lease
3.3.1 In consideration of the rights, privileges and benefits conferred upon by the Authority
and other Good and valuable consideration expressed herein, the Developer hereby
accepts the Lease and agrees and undertakes to implement the Project and to
perform/discharge all of its obligations in accordance with the terms and conditions
set forth in this Agreement.
ARTICLE 4: CONDITIONS PRECEDENT
4.1 Conditions Precedent
4.1.1 Save and except as expressly provided in this Agreement, the respective rights and
obligations of the Parties under this Agreement shall be subject to the satisfaction in
full of the conditions precedent specified in this Clause 4.1 (the “Conditions
Precedent”).
4.1.2 The obligations of the Developer hereunder are subject to the satisfaction by the
Authority of the following Conditions Precedent unless any such condition has been
waived by the Developer as hereinafter provided:
a. provides possession of the Property, Project Asset and Project Facility to the
Developer on ‘as is where is basis’.
4.1.3 The obligations of the Authority hereunder are subject to the satisfaction by the
Developer of the following Conditions Precedent unless any such condition has been
waived by the Authority as hereinafter provided:
a. procured all the Applicable Permits/Clearances required for operation of the
Project unconditionally or if subject to conditions then all such conditions shall
have been satisfied in full and such Applicable Permits are in full force and
effect;
b. achieved Financial Close, executed the Financing Documents and delivered to
the Authority 3 (three) copies thereof, duly attested by a Director of the
Developer;
c. delivered to the Authority a legal opinion from the legal counsel of the
Developer with respect to the Developer entering into this Agreement and the
enforceability of the provisions thereof;
d. confirmed in writing that all the representations and warranties of the Selected
Bidder set forth in its Bid are true and correct as on the date of execution of this
Agreement;
e. Confirmed in writing that all the representations and warranties of the
Developer setforth in this Agreement are true and correct as on the date of
execution of this Agreement;
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f. Opened the Escrow Account and executed the Escrow Agreement;
Provided that upon request in writing by the Developer, the Authority may in its
discretion, waive any of the Conditions Precedent set forth in this Clause 4.1.3.
4.1.4 Each Party shall make all reasonable endeavours to satisfy the Conditions Precedent
within the time stipulated herein and shall provide the other Party with such
reasonable cooperation as may be required to assist that Party in satisfying the
Conditions Precedent for which that Party is responsible.
4.1.5 The Parties shall notify each other in writing at least once a month on the progress
made in satisfying the Conditions Precedent. Each Party shall promptly inform the
other Party when any Condition Precedent for which it is responsible has been
satisfied.
4.2 Obligations to fulfil Conditions Precedent
4.2.1 The Parties shall fulfil the Conditions Precedent within 180 (one hundred and eighty)
days from the Appointed Date, and the date on which both the Parties fulfil the
Conditions Precedent, as forthwith jointly certified in writing by the authorised
representatives of the Parties, shall be the Compliance Date (the “Compliance
Date”).
4.3 Non-fulfilment of Conditions Precedent
4.3.1 In the event of non-fulfilment of Developer Conditions Precedent within 180 (one
hundred and eighty) days from the Appointed Date, the Authority may terminate this
Agreement in accordance with the provisions of this Agreement and arrogate and
retain the Performance Security and all payments made by the Developer, including
the Upfront Fee and the Lease Rent, till the date of termination.
4.3.2 In the event of non-fulfilment of the Authority Conditions Precedent within 180 (one
hundred and eighty) days from the Appointed Date, the Developer may terminate this
Agreement, in accordance with the provisions of this Agreement, and require, the
Authority to return / refund in full the Performance Security, along with the Upfront
Fee and the Lease Rent till the date of termination of this Agreement, provided there
are no outstanding claims of the Authority on the Developer.
4.3.3 Notwithstanding anything contained in the Clauses 4.2 and 4.3, the Parties may, by
mutual consent, extend the time for fulfilling the Conditions Precedent subject to a
maximum period of 240 days from Appointed Date.
ARTICLE 5: PROPERTY / PROJECT FACILITY/PROJECT ASSET
5.1 Handover of Property
5.1.1 The Authority hereby undertakes to handover to the Developer physical possession of
the Property along with the Project Asset and Project Facility free from Encumbrance
within 180 (one eighty) days from the Appointed Date, for the purpose of
implementing the Project in accordance with this Agreement on “As-Is-Where-Is”
basis.
5.1.2 The Authority confirms that upon the Property being handed over pursuant to the
clause 5.1.1, the Developer shall have the exclusive right to enter upon, occupy and
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use the Property, Project Facility and Project Asset and to make at its costs, charges
and expenses such investigation, design, renovation, development, augmentation and
improvements in the Property as may be necessary or appropriate to implement the
Project and develop the Property, Project Facility in accordance with the provisions of
this Agreement.
5.2 Rights, Title and Use of the Property
5.2.1 The Developer shall have exclusive rights to use the Property, Project Asset and the
Project Facility in accordance with the provisions of this Agreement and for this
purpose it may regulate the entry and use of the same by third parties.
5.2.2 The Developer shall not part with or create any Encumbrance on the whole or any part
of the Property, Project Facility and Project Asset save and except as set forth and
permitted under this Agreement.
5.2.3 The Developer shall be allowed to outsource/ sub-contract functions of operations/
maintenance/ management for the purpose of provision of services at the Project
Facility such as food & beverages (restaurant), laundry, housekeeping, landscaping,
pest control, etc during the term of the Lease with such agencies, with established and
relevant track record, as it may deem fit. Such sub-contracting shall not be in any way
detrimental to the Agreement entered into between the Developer and the Authority.
Under all circumstances, the Developer would all times be responsible for discharging
all obligations under the Lease Agreement without any reference to any other party
operating in the Property.
5.2.4 The Property, Project Asset and the Project Facility shall continue to remain under the
ownership of the Authority during the Lease Period and its physical possession shall
be transferred to the Authority after expiry of the Lease Period or on Termination.
Developer shall take all reasonable due care of the Property, Project Asset and the
Project Facility as the case may be. Developer shall be fully responsible for any loss
or damage to the Property, Project Asset and the Project Facility during the Lease
Period, caused as a result of any negligence on its part.
5.2.5 Developer declares that in entering into this Agreement on the terms and conditions
set out herein, Developer has made its own assessment of the Property and income-
potential thereof.
5.2.6 Developer shall have to obtain all such Applicable Permits (including but not limited
to building permit, hotel permit, etc) unconditionally or if subject to conditions then
all such conditions have been satisfied in full and such Applicable Permits are and
shall be kept in full force and effect during the Lease Period.
5.3 Information about the Property
5.3.1 The information about the Property set out to the extent in this Agreement is provided
by the Authority in Good faith and with due regard to the matters for which such
information is required by the Developer. The Authority agrees to provide to the
Developer, upon a reasonable request, any further information relating to the Property,
which the Authority may now possess or may hereafter come to possess. Subject to
this the Authority makes no representation and gives no warranty to the Developer in
respect of the condition of the Property or any information in relation to the same.
5.4 Peaceful Possession
5.4.1 The Authority warrants that:
a. the Property having been acquired through the due process of law belongs to
and is vested in the Authority, and that the Authority has full powers to hold,
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dispose of and deal with the same consistent, inter alia, with the provisions of
this Agreement;
b. the Developer shall have no obligation/liability as to payment of any
compensation whatsoever to or the rehabilitation and resettlement of any Person
from whom the Property or any part thereof had been acquired and that the same
shall be the sole responsibility of the Authority; and
c. the Developer shall, subject to complying with the terms and conditions of this
Agreement, remain in peaceful possession and enjoyment of the Property,
Project Facility and Project Asset during the Lease Period. In the event the
Developer is obstructed by any Person claiming any right to the title or interest
in or over the Property or Project Facility or any part thereof or in the event of
any enforcement action including any attachment, distraint, appointment of
receiver or liquidator being initiated by any Person claiming to have any interest
in/ charge on the Property or Project Facility or any part thereof, the Authority
shall, if called upon by the Developer, defend such claims and proceedings and
also keep the Developer indemnified against loss or damages which the
Developer might suffer, on account of any such right, title, interest or charge.
5.5 Applicable Permits
5.5.1 The Developer shall obtain and maintain all Applicable Permits and Clearances in
such sequence as is consistent with the requirements of the Project.
ARTICLE 6: LEASE RENT & OTHER PAYMENTS
6.1 Lease Rent
6.1.1 The Authority acknowledges the receipt of a payment of Rs. ___________ (Rupées
_____________________________________________) DD No. ___________ dated
__________ drawn on ______________________________ towards the Annual
Lease Rent prior to the Appointed Date pro rata for the months balance in the current
Financial Year _________.
6.1.2 In consideration of the Lease hereby granted, the Developer shall pay to the
Authority, Annual Lease Rent on the Due Date.
6.1.3 The Annual Lease Rent shall be incremented by 5% (Five percent) each year over that
of the previous year during the Lease Period.
6.1.4 However, after the Development Phase (5 years after Appointed Date), the Developer
shall pay the higher amount of Annual Lease Rent or Annual Revenue Share as
applicable.
6.1.5 All subsequent Annual Lease Rent shall be made on or before April 30th
of each
Financial Year.
6.1.6 Any delay in making any Annual Lease Rent payment shall, without prejudice to any
other consequences under this Agreement, entail payment of interest on the amount in
default at the rate of SBI Base Rate plus 3 percent per annum from the relevant Due
Date till the date of payment/ realisation.
6.2 Upfront Fee
6.2.1 The Authority acknowledges the receipt of a payment of Rs. ___________ (Rupées
_____________________________________________) DD No. ___________ dated
__________ drawn on ______________________________ towards the Upfront Fee
prior to the Appointed Date.
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6.3 Mode of Payment
6.3.1 Annual Lease Rent shall be paid by way of Demand Draft in favour of
_____________, payable at Lucknow and shall be sent sufficiently in advance of the
Due Date to the following address:
Attn. of Director General
Address Department of Tourism
Government of Uttar Pradesh
Paryatan Bhawan, C-13, Vipin Khand, Gomti Nagar
Lucknow: 226 010
6.4 Taxes, duties & levies
6.4.1 The Developer agrees to pay service tax and/or any applicable taxes, duties, charges,
surcharges or levies in relation to the various payments to be made by the Developer
as also all other duties, taxes and levies related to the Lease or the grant of the Lease
by the appropriate authorized agencies, authorities or bodies.
6.5 Certified Accounts
6.5.1 During the subsistence of this Agreement, the Developer shall maintain all documents
and supporting evidences for its financial statements including agreements and
documents with respect to all capital and debt raised by the Developer, capital and
revenue expenses towards the Project. The Developer shall submit to the Authority
periodic reports on financial statement of the Gross Revenue duly certified by its
Statutory Auditors as per the provisions of Clause 8.11.
6.5.2 The Authority shall appoint an Independent Auditor to conduct a special audit of the
Gross Revenue and the financial statements, documents and supporting evidences
thereto as may be mandated by the Authority and report to the Authority such
information as may be desired by the Authority for any period and the Gross Revenue
(“Special Audit”).
6.5.3 In the event that the Gross Revenue reported by the Independent Auditor is higher
than that reported by the Statutory Auditor of the Developer, the auditors shall meet to
resolve such differences and if they are unable to resolve the same, then for the
purpose of calculating the Annual Lease Rent, the Gross Revenue reported by the
Independent Auditor shall be considered.
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6.6 Escrow Account
6.6.1 The Developer shall maintain an escrow account with a bank approved by the Lenders
(“Escrow Account”), during the subsistence of this Agreement and enter into an
agreement substantially in the format prescribed in Schedule 7 with such bank to
ensure that all proceeds for financing the Project and all revenues and other receipts
arising from the Project and under any agreements, including this Agreement received
by the Developer are deposited into such Escrow Account.
a) Withdrawals and appropriations during the Lease Period, at any relevant time,
from the Escrow Account shall be in the following order of priority
i. for all taxes due payable by the Developer;
ii. towards payment of Annual Lease Rent;
iii. all construction/implementation expenses relating to the Project/Project
Facilities and Services, subject to limits if any set out under the Financing
Documents;
iv. all expenses relating to operations and management of the Project/Project
Facilities and Services, subject to limits if any set out under the Financing
Documents;
v. towards its debt service obligations under the Financing Documents;
vi. towards payment of other sums payable to the Authority and liquidated
damages, if any;
vii. towards any reserve requirements in accordance with the Financing
Documents;
and the Developer shall be at liberty to withdraw any sums outstanding in the
Escrow Account after all the aforesaid payments due in any Quarter have been
made and/or adequate reserves have been created in respect thereof for that
Quarter. Provided, upon issuance of Termination Notice and/or suspension of the
Developer in accordance with the provisions of this Agreement, withdrawal from
the Escrow Account shall be made only in accordance with the written
instructions of the Authority and the Lenders.
b) All amounts standing to the credit of the Escrow Account at the end of the Lease
Period including amounts credited to the Escrow Account towards compensation
payable in accordance with Clause 14.9 shall be appropriated in the following
order of priority:
i. towards taxes and statutory dues payable by the Developer;
ii. compensation to Lenders in terms of the Financing Documents towards
discharge of the Developer’s liability under such Financing Documents;
iii. all amounts due to the Authority and amounts payable towards transfer of
the Project Facilities and Services by the Developer in accordance with
this Agreement;
and the Developer shall be at liberty to withdraw any sums outstanding in the
Escrow Account after all the aforesaid payments due have been made and/or
adequate reserves have been created in respect thereof to the satisfaction of the
Lenders and the Authority.
ARTICLE 7: PERFORMANCE SECURITY
7.1 Performance Security
7.1.1 The Developer has for due and faithful performance of its obligations during the
Lease Period furnished to the Authority, simultaneously with the execution of this
Agreement, an irrevocable bank guarantee from a Scheduled/Nationalised bank
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acceptable to the Authority (the “Performance Security”). The Performance Security
for an amount equivalent to 5 (five) times the Annual Lease Rent for the first year i.e.
Rs._____________ (Rupees_______________________). A valid bank guarantee
should always be in place at any time during the Lease Period. The details of above
Bank Guarantee are as follows:
Bank Guarantee Details: ____________________________________________
____________________________________________
7.1.2 An amount equal to 3 (three) times the Annual Lease Rent for the first year shall be
released within 120 days of the successful completion of the Minimum Development
Obligation (i.e. within 120 days of issuance of Completion Certificate as per Clause
11.3.3) and remaining Performance Security [equal to 2 (two) times the Annual Lease
Rent for first year] shall be retained till the completion of Lease Period and shall be
released after 6 months from the end of Lease period.
7.1.3 Provided if the Agreement is terminated due to any event other than a Developer
Event of Default, the Performance Guarantee, subject to the Authority’s right to
receive amounts, if any, due from the Developer under this Agreement, shall be
refunded to the Developer.
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7.2 Appropriation of Performance Security
7.2.1 Upon occurrence of a Developer Event of Default or as per other provisions stipulated
in this Agreement, the Authority shall, without prejudice to its other rights and
remedies hereunder or in law, be entitled to encash, invoke and appropriate the
relevant amounts from the Performance Security as damages. Upon such encashment,
invocation and appropriation from the Performance Security, the Developer shall
within 30 (thirty) days thereof, replenish, in case of partial appropriation, to its
original level the Performance Security, and in case of appropriation of the entire
Performance Security provide a fresh Performance Security as aforesaid failing which
the Authority shall be entitled to terminate this Agreement in accordance with
provisions of this Agreement.
ARTICLE 8: DEVELOPER’S OBLIGATIONS AND UNDERTAKINGS
In addition to and not in derogation or substitution of any of the obligations set out in this
Agreement, the Developer agrees and undertakes as under:
8.1 Performance Security
8.1.1 The Developer has for due and punctual performance of its obligations hereunder
relating to the Project, furnished to the Authority, simultaneously with the execution
of this Agreement, Performance Security in accordance with the provisions of Article
7.
8.2 Financing Arrangement
8.2.1 The Developer shall at its own cost; expenses and risk make such financing
arrangements as would be necessary to implement the Project and to meet all of its
obligations under this Agreement, in a timely manner.
8.2.2 The Developer shall not in any way transfer, sell, alienate, encumber, mortgage or
create any charge on the Property, Project Facility and Project Asset during the Lease
Period.
8.3 Drawings
8.3.1 The Developer shall, at its cost, charges and expenses, cause Drawings to be prepared
in accordance with Minimum Development Obligations and the Specification and
Standards for providing the Project Facility.
8.3.2 All Drawings whether relating to the Property and Project Facility shall be subject to
review by the Authority.
8.4 Development Phase
8.4.1 The Developer shall at its own cost and expense, investigate, design, finance,
renovate, develop and augment the Property, subject to adherence to Applicable Law
and obtaining Applicable Permits for such renovation, construction, development and
or augmentation;
Provided that such renovation, construction, development and/or augmentation, shall
not at any time cause any damage or have a dangerous effect on either the stability of
the Property or Project Facility or Project Asset or otherwise affect the users of the
Project Facility or Property.
8.4.2 The Developer shall adhere to the Minimum Development Obligations and Standards
and Specifications.
8.4.3 The Developer shall, before commencement of Development Phase;
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a. submit to the Authority, a Detailed Project Report and the Project
Implementation Schedule for the Project;
b. have requisite organisation and designate and appoint suitable officers/
representatives as it may deem appropriate to supervise the Development Phase
and to deal with the Authority and to be responsible for all necessary exchange
of information required pursuant to this Agreement;
c. undertake, do and perform all such acts, deeds and things as may be necessary
and to achieve completion of Development Phase within 5 year from the
Appointed Date;
8.4.4 The Developer shall be responsible for getting all relevant approvals deemed
necessary as per laws of Union of India/State of Uttar Pradesh/ Local bodies related to
construction, renovation and augmentation of the Property and for operation,
management and maintenance of the Project Facility;
8.4.5 The Developer shall organise shifting of utilities including payment of respective
authority charges if any;
8.4.6 Developer shall co-operate with the Authority and provide all facilities and assistance
required by the Independent Engineer.
8.5 Construction, Alteration and Modification
8.5.1 The Developer shall be at liberty to carry out necessary alterations or modifications to
the Property or undertake new construction in order to meet his obligation of
providing the Project Facilities and, subject to his adherence to Applicable Law and
obtaining Applicable Permits for such alteration, modification or new construction.
Provided however that such alteration, modification or new construction and, shall not
at any time cause any damage or have a dangerous effect on either the stability of the
Property/Project Asset/Project Facilities or otherwise adversely affect the safety of the
users of the Property/Project Asset/Project Facilities.
8.5.2 If in the opinion of the Developer, the said alteration, modification or new
construction requires demolition of any part or whole of the Property/Project
Asset/Project Facilities (including the cutting of trees), then such demolition shall be
undertaken only after obtaining prior written approval from the Authority, which
approval shall not be unreasonably withheld. For this purpose, the Developer shall
submit to the Authority a proposal (hereinafter referred to as Modification Proposal)
clearly describing such demolition and its impact on the structural stability of the
Property/Project Asset/Project Facilities, at least sixty (60) days prior to carrying out
such demolition whereupon the Authority shall respond as per provision of Clause
9.1.
8.5.3 The Developer would be required to obtain Applicable Permits and adhere to
Applicable Laws for any demolition.
8.5.4 No demolition (including the cutting of trees) would be allowed during the last 5 years
of the Lease Period, unless specifically approved by the Authority.
8.6 Environmental Compliance
8.6.1 The Developer shall ensure that all aspects of the Project and Project Facility and
processes employed in the design, renovation, construction, operation and
maintenance thereof shall conform to the laws pertaining to environment, health and
safety including policies and guidelines related thereto.
8.7 Operation Period
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8.7.1 Developer shall be responsible for the operation and maintenance of the Project
Facility at its cost and shall provide a high level of service to its guests in accordance
with specifications, standards and instructions of the Authority, if any.
8.7.2 Developer, at its cost during the subsistence of this Agreement, would obtain all
requisite licenses/permission for operating the Project Facility, it being understood
that the licenses/permissions and all deposits or securities given or provided in
relation thereto by the Developer shall always be the property of the Authority and
Developer shall have no right or lien or claim to on the same, even if Developer’s
name is endorsed or mentioned in the license or permission as manager or Developer
of the Project Facility or otherwise;
8.7.3 Developer shall not cause, permit or suffer any use of the Project Facility or any part
thereof for any other purpose other than that authorised by the Authority.
8.7.4 Developer shall protect and promote the image, status and stated aims of the
Authority.
8.7.5 Developer shall be allowed to put up its sign board on the main entrance of the Project
Facility clearly specifying the following in addition to the name and logo of the
Developer:
“Unit of Department of Tourism, Government of Uttar Pradesh”
8.7.6 Developer shall maintain the Project Facility in proper cleanliness and hygienic
surroundings and in accordance with terms and conditions set forth in this Agreement;
8.7.7 Developer shall not store any goods not permitted by Applicable Law including
hazardous, explosive, flammable or combustible in nature that may cause risk by fire,
explosion or goods/material which on account of their weight or nature may cause
damage or endanger the safety of the Project Facility and/or Project Asset and or its
inhabitants;
8.7.8 The Developer will not at any time do, cause or permit any nuisance in or around the
Property and Project Facility and/or Project Asset or anything which shall cause
unnecessary annoyance, inconvenience or disturbance to the occupiers of any other
property;
8.7.9 Developer shall at its own cost and expenses pay:
a. All heat, light and power expenses including air-conditioning costs;
b. All costs and expenses of the management and operation of the Project Facility;
c. All expenses for the internal upkeep and maintenance of the Project Facility
including but not limited to painting, polishing, sanitary, plumbing, electric
maintenance, as well as repairs and replacements;
d. The Developer shall pay all taxes including Ground Rent, Land Tax, Property
Tax, Service Tax, Duties, Levies etc. which are payable in relation to the
Property / Project Facility;
8.7.10 The Developer shall provide fire fighting equipment in the Project Facility and ensure
that periodic fire drills are conducted in order to guide and inculcate the procedures
and operations of fire fighting/safety;
8.7.11 The Developer shall take necessary action to remedy the lapses, if any, stated in the
Inspection Report issued by the Authority for ensuring compliance with the provisions
of this Agreement.
8.7.12 During the Operations Period, the Developer shall:
a. have requisite organisation and designate and appoint suitable officers/
representatives as appropriate to supervise the operation and maintenance and to
deal with the Authority and to be responsible for all necessary exchange of
information required pursuant to this Agreement;
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b. undertake, do and perform all such acts, deeds and things as may be necessary
or required to adhere to the operation and maintenance Requirements;
8.7.13 The Developer shall be deemed to be in Material Breach of the operation and
maintenance Requirements, if the Authority acting reasonably and in accordance with
the provisions of this Agreement, has determined that due to breach of obligations by
the Developer:
a. the maintenance of the Property and Project Facility or any part thereof has
deteriorated to a level which is below the acceptance level of the Authority
b. there has been a serious or persistent breach in adhering to the operation and
maintenance Requirements and thereby the Project Facilities or any part thereof
are not safe for operation
For avoidance of doubt, persistent breach shall mean:
a. any breach of operation and maintenance Requirements by the Developer which
has not been remedied by the Developer despite a notice to remedy in respect of
the same issued by the Authority
b. recurrence of a breach by the Developer, during the pendency of the notice to
remedy issued by the Authority
c. repeated occurrence of a breach notwithstanding that earlier breaches have been
remedied or otherwise pursuant to notice to remedy
8.7.14 Upon occurrence of a Material Breach of operation and maintenance Requirements,
the Authority shall without prejudice to and notwithstanding any other consequences
provided thereof under this Agreement, be entitled to terminate this Agreement.
8.8 Hygiene and Quality Standards
8.8.1 The Developer shall abide by the following Hygiene and Quality Standards
a. Quality of water has to be hygienic.
b. The storage, handling of raw materials and cooking etc will have to be in
extreme hygienic conditions.
c. The provisions of Prevention of Food Adulteration Act, 1954, and any law
relating to hygiene and quality shall be binding.
d. The Authority reserves the right to get the food samples/raw materials tested at
Laboratories at the cost of the Developer.
e. The Developer will be duly bound to reveal the source of procurement of raw
material if asked by the Authority.
f. The Developer shall maintain the Property and surrounding areas in proper
cleanliness and hygienic conditions at its own cost and shall also be bound to
follow such directions of the Authority issued from time to time in this respect.
g. The Developer will ensure clearance of all the rubbish and the waste generated
at their location and ensure safe and quick scientific disposal of all such material
and will also coordinate with concerned civic agencies for disposal of garbage
even outside the Property.
h. In case the Developer fails to maintain the hygienic standards, the Developer
shall pay a penalty of Rs 500 per day for the first 10 days and Rs 1000 per day
subsequently to The Authority till such time the hygienic conditions are met.
The penalty will be payable ten days after receipt of written notice from the
Authority.
8.9 Transfer Period
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8.9.1 At the end of the Lease Period or early termination thereof, the Property, Project Asset
and Project Facility should be in a useable condition and handed over to the Authority
by the Developer as per the terms of this Agreement;
8.9.2 The Developer shall not make any modifications to the Property or Project Facility
which could have an adverse impact on the operations of the Property or Project
Facility during the last 5 years of the Lease Period;
8.9.3 The Developer shall provide support and further do all such acts including execution
of necessary writings/documents as desired by the Authority for deleting the name of
Developer from, or diluting or dissolving any apparent right or interest, in license or
permission obtained in relation to the Project Facility at the end of Lease Period.
8.10 General Obligations
8.10.1 The Developer shall at its own cost, expenses and risk:
a. investigate, study, design, develop, renovate, construct, operate, maintain and
manage the Property / Project Facility/ Project Asset in accordance with the
provisions of this Agreement, Good Industry Practice and Applicable Laws;
b. assume responsibility relating to designing, financing, renovation, construction,
augmentation, operation, maintenance and management of the Project Facility to
standards commensurate with the character of the Authority and transfer of the
Property, Project Facility and Project Assets after the expiry of the Lease
Period.
c. The Developer shall get Lease Agreement registered in two counterparts with
the concerned registration authority within 30 days of the signing of the Lease
Agreement and cost of stamping and registration of this Lease Agreement shall
be borne by the Developer. The original Lease Agreement shall be kept with the
Authority and the copy of the counterpart of Agreement shall be with the
Developer.
d. pay all taxes and charges including but not limited to utility charges, service tax,
duties, levies etc. which are payable in relation to the design, finance,
renovation, augmentation, operation and management of the Property / Project
Facility during the Lease Period..
e. provide required reports to the Authority on regular basis during the
Development Phase, Operation and Transfer period;
f. punctually settle and pay amounts owed to the Authority (including but not
limited to Annual Lease Rent within the time agreed and not to allow the same
to fall in arrears. All such amounts paid after the time agreed will be paid with
interest @ SBI Base Rate plus three percent (3%) per annum;
g. provide at its own cost and expense adequate personnel, qualified and
experienced, for the purposes of design, renovation, augmentation, construction,
operation, management and transfer of the Property and the due discharge of the
obligations of the Developer;
h. Provide Job Training to one trainee per room as per the guidelines of “Hunar Se
Rozgaar Tak” Scheme of Ministry of Tourism, GoI. The cost of training shall be
reimbursed to the Developer as per the aforesaid guidelines.
i. ensure and procure that each Project Agreement contains provisions that would
entitle the Authority or a nominee of the Authority to step into such agreement
at the Authority’s discretion, in place and substitution of the Developer in the
event of Termination pursuant to the provisions of this Agreement;
26
j. take all reasonable precautions for the prevention of accidents on or about the
Property / Project Facility and provide all reasonable assistance and Emergency
medical aid to accident victims;
k. indemnify and keep the Authority fully and comprehensively indemnified from
and against all claims and demands, actions, proceedings, damages, costs,
charges and expenses and/or liabilities that may arise after the Appointed Date
or be caused to the Authority in consequence or as a result of an act or default or
breach or non-observance of any laws, rules, regulations, requirements,
conditions etc. of Developer in design, finance, renovation, construction,
operation, management or transfer of the said Project and/or Property and /or
Project Facility and or Project Asset;
l. duly discharge and settle all payments and dues including but not limited to
salary/wages/provident fund/employees insurance and any other dues or claims
whatsoever as per Applicable Law, whether statutory or contractual, and also
including any termination compensation or dues, owed to its personnel and staff
including any contract labour engaged by Developer for the purposes of design,
renovation, constructing, maintaining and operation of the Property / Project
Facility and to keep the Authority fully indemnified against all claims and
demands from or on behalf of any such personnel or staff of the Developer and
all actions, proceedings, damages, costs and expenses resulting from any such
claims and demands.;
m. make efforts to maintain harmony and good industrial relations among the
personnel employed in connection with the performance of the Developer's
obligations under this Agreement;
n. be responsible for safety, soundness and durability of the Property and the
Project Facility including all structures forming part thereof and their
compliance with the Specifications and Standards;
o. provide access to the Property / Project Facility/Project Asset to the Authority
and officer of any Government Agency having jurisdiction over the Property,
including those concerned with safety, security or protection to inspect the
Property / Project Facility/Project Asset and to investigate any matter within
their authority and upon reasonable notice. The Developer shall provide to such
persons reasonable assistance necessary to carry out their respective duties and
functions;
p. ensure that the Property, Project Facilities and Project Asset remain free from all
encroachments and take all steps necessary to remover encroachments, if any;
q. appoint an authorised representative to take and carry out the instructions given
to it by the Authority and intimate the following about abovesaid authorised
representatives to the Authority of the same :
1. Name:________________
2. Designation:________________
3. Address:________________
r. change the authorised representative, if required and in such event, provide
advance written notice of 30 (thirty) days to the Authority of any such change.
s. be responsible for all health, security, environment and safety aspects of the
Project / Property / Project Facility
8.11 Financial and Project Information
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8.11.1 The Developer shall deliver to the Independent Engineer and Independent Auditor and
the Authority the following documents and information at the intervals described
below:
a) Financial Information
a. annual audited accounts (in compliance with Indian General Accounting
Practices) of the Developer duly Certified by its Statutory Auditors,
delivered within 180 days of the end of each Financial Year;
b. unaudited financial statements (in compliance with Indian General
Accounting Practices) of the Developer:
i monthly reports within 15 days of the end of each such period and
ii quarterly reports within 30 days of the end of each such period;
c. notification of any material change in the financial condition of the
Developer and/or the Project promptly following such occurrence.
d. all reports, notifications and information including construction progress
reports with respect to the execution of the Works.
e. all reports, notifications and information including operations reports with
respect to the performance of the operation and management of the Project
Facility.
b) Additional Information
The Developer agrees to provide to the Authority, the Independent Engineer
and the Independent Auditor such further information as any of them may
reasonably request in order for them to monitor the progress and Performance
Standards for the Project.
c) Budgets
At the commencement of each Financial Year the Developer will prepare and
submit to the Independent Engineer and the Independent Auditor a statement
confirming:
(i) the expenditure incurred or committed or to be incurred by the Developer
for the period from the date of the last such statement to and including the
date of the current statement; and
(ii) future expenditure anticipated to be made during the next Financial Year.
d) Financial Year
The Developer shall not change its Financial Year without the prior written
approval of the Authority.
8.12 No breach of obligations
8.12.1 The Developer shall not be considered to be in breach of its obligations under this
Agreement nor shall it incur or suffer any liability if and to the extent performance of
any of its obligations under this Agreement is affected by or on account of any of the
following:
a. Force Majeure Event
b. the Authority Event of Default
c. Compliance with instructions of the the Authority or the directions of any
government agency other than instructions issued as a consequence of a breach
by the Developer of any of its obligations as set forth in this Agreement: or
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d. Closure of Project Facility or part thereof with the approval of the Authority
ARTICLE 9: THE AUTHORITY’S OBLIGATIONS AND UNDERTAKINGS
In addition to and not in derogation or substitution of any of the obligations set out in this
Agreement, the Authority agrees and undertakes as under:
9.1 Obligations and Undertakings 9.1.1 the Authority shall:
a. hand over the physical possession of Property together with necessary right of
way / way leaves to the Developer within 180 (one eighty) days from Appointed
Date, free from any Encumbrance;
b. grant or where appropriate provide necessary assistance to the Developer in
securing applicable permits;
c. grant in a timely manner all such approvals, permissions and authorisations
which the Developer may require or is obliged to seek from the Authority in
connection with implementation of the Project and the performance of the
Developer’s obligations under this Agreement;
d. upon written request from the Developer, assist the Developer in obtaining
access to all necessary infrastructure facilities and utilities, including water,
electricity and telecommunication facilities;
e. ensure peaceful use of the Property by the Developer under and in accordance
with the provisions of this Agreement without any hindrance from the Authority
or persons claiming through or under it;
f. Accept the right of the Developer to affix the brand name on the rooftop or any
part or space relating to the Premises upon prior permission from the Authority.
g. observe and comply with all its obligations set forth in this Agreement.
9.1.2 The Authority shall inspect the Project Facility at least once every six months and
prepare a report of such inspection (the “Inspection Report”). It shall send a copy of
its Inspection Report to the Developer.
ARTICLE 10: INDEPENDENT ENGINEER AND INDEPENDENT AUDITOR
10.1.1 Appointment
10.1.2 The Authority shall appoint an individual / firm / company as the Independent
Engineer and a reputed firm of Chartered Accountants practising in India as the
Independent Auditor to undertake and perform the duties, work, services and
activities set forth in this Article 10 and otherwise as set out in this Agreement and
the Schedules. The Authority shall complete the appointment of Independent
Engineer and Independent Auditor within 60 days from the Appointed Date.
10.1.3 The Independent Engineer and the Independent Auditor shall report to the Authority
about their work, services, and activities pursuant hereto through regular periodic
reports as the situation may warrant. Such report of the Independent Engineer and
the Independent Auditor shall include such matters as appropriate to ensure that the
Authority is properly informed.
10.2 Payments of Independent Engineer and Independent Auditor
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10.2.1 All fees, costs, charges and expenses payable to the Independent Engineer and
Independent Auditor in accordance with the terms of appointment shall be borne by
the Authority.
ARTICLE 11: PROJECT IMPLEMENTATION AND OPERATIONS
11.1 Preparation of Designs and Drawings
The Developer shall at its cost, charges and expenses, prepare the Designs and
Drawings in conformity with the Project Requirements.
11.2 Review of the Designs and Drawings
a) The Developer shall submit the Designs and Drawings for the review of the
Independent Engineer. Simultaneously, the Developer shall also provide the
Authority with a set of the Designs and Drawings.
b) The Independent Engineer shall review the Designs and Drawings submitted by
the Developer and provide its comments/observations and suggestions on the
same (including taking into account the comments/observations of the
Concessioning Authority in respect thereof as it may in its sole discretion deem
fit) within 21 (twenty one) Days from the date of the receipt of such Designs and
Drawings.
c) In the event that the Independent Engineer has observed that the Designs and
Drawings are not in conformity with the Project Requirements, the Developer
shall promptly and without any undue delay revise and resubmit the Designs and
Drawings or satisfy the Independent Engineer with regards its compliance.
d) If the Independent Engineer does not make any observation/comments with
respect to the Designs and Drawings submitted to it by the Developer within 21
(twenty one) Days of the submission, it shall be deemed that the Independent
Engineer has no suggestions to make with respect to the Designs and Drawings
and the Developer shall be entitled to proceed with the Project accordingly.
e) The Developer shall not be entitled to any extension of time for completing
construction or any other relief on account of delay caused due to providing any
clarification or in resubmitting the Designs and Drawings. Provided however the
Authority at its sole discretion may suitably extend the Construction Phase or
provide other relief to compensate for any such delay not attributable to the
Developer.
f) The Developer shall not change any Designs and Drawings reviewed by the
Independent Engineer under this Agreement, without submitting such revised
Designs and Drawings for the review of the Independent Engineer.
g) Notwithstanding the review by the Independent Engineer, the Developer shall be
solely responsible for any defect and/or deficiency in the Designs and Drawings
relating to the Project or any part thereof and accordingly the Developer shall at
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all times remain responsible for its obligations under this Agreement.
h) Any review of the Designs and Drawings conducted by the Authority is solely for
the Authority’s own information and that by conducting such review, the
Authority does not accept any responsibility for the same.
i) The Developer shall in no way represent to any Person that, as a result of any
review by the Independent Engineer, the Authority has accepted responsibility for
the engineering or soundness of any work relating to the Project/ the Project
Facilities and Services or part thereof carried out by the Developer and the
Developer shall, in accordance with the provisions of this Agreement, be solely
responsible for the technical feasibility, operational capability and reliability of
the Project/ the Project Facilities and Services or any part thereof.
11.3 Construction Phase
The Developer shall promptly commence and complete the works, including
installation of equipment in accordance with the Project Schedule and shall also obtain
from the Independent Engineer a certificate as to completion of construction of Project
Facilities and Services in accordance with the provisions of this Agreement
(“Completion Certificate”) not later than 60 Months (Sixty months) from the date of
commencement of the Appointed Date.
11.4 Obligations of the Developer
Without prejudice to the any other clause in this agreement and in addition to any of
its other obligations under this Agreement, during the Construction Phase, the
Developer shall:
a) arrange for, in a timely manner all necessary financial and other resources
required for construction and installation of the Project Facilities and Services.
b) engage professionally competent Persons for project management and
construction and ensure that all works are carried out in compliance with the
Construction Standards;
c) give written notice to the Authority within 7 (seven) Days of any material
modification or change to any of the Financing Documents and/or any Equity
Documents and shall simultaneously therewith also furnish copies of such
modified/ amended documents to the Authority. Provided no such
modification/amendment will be made if it in any manner whatsoever has the
effect of imposing an additional financial obligation or increasing the financial
obligation of the Authority in addition to that contemplated under the Financing
Documents provided on Financial Close, without the prior written consent of the
Concessioning Authority. For avoidance of doubt any such
modifications/amendments made without the prior written consent of the
Authority will not be enforceable against the Authority;
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d) obtain Applicable Permits, comply with Applicable Laws and Applicable Permits
and give priority to safety in its construction and planning activities in order to
protect life, health, property and environment;
e) provide to the representative(s) of the Authority, at reasonable times and upon
prior intimation, access to the Project Site to review progress in construction and
to ascertain compliance with any of the requirements of this Agreement. Provided
that non-inspection by the Authority of any works shall not, in relation to such
works, (i) amount to any consent or approval by the Authority nor shall the same
be deemed to be waiver of any of the rights of the Authority under this
Agreement; and (ii) release or discharge the Developer from its obligations or
liabilities under this Agreement in respect of such work;
f) provide monthly reports on the progress of Construction Works or such other
relevant information as may be required by the Independent Engineer;
g) promptly carry out at its cost such further works as may be necessary to remove
any defects or deficiencies observed by the Independent Engineer and ensure
timely completion of construction of the Project / the Project Facilities and
Services in all respects in accordance with the provisions of this Agreement; and
h) to ensure safe and timely construction and completion of the Project/Project
Facilities and Services, the Developer may, at its cost, interrupt and divert/create
barriers on the flow of water or on the road or port traffic, adjacent to the Project
Site if such interruption and diversion is imperative for the efficient progress of
Construction Works and conforms to Good Industry Practice; provided that such
interruption and diversion shall be undertaken by the Developer only with the
prior written approval of the Independent Engineer which approval shall not be
unreasonably withheld. For the avoidance of doubt, it is agreed that the Developer
shall at all times be responsible for ensuring safe operation of Construction Works
and shall remove the interruption or diversion within the period specified by the
Independent Engineer.
11.5 Obligations of the Authority
In addition to any of its other obligations under this Agreement, during the
Construction Phase, the Concessioning Authority shall:
a) in matters falling within its authority, grant, the Applicable Permits, approvals and
consents as may be required by the Developer and on a best efforts basis assist the
Developer in obtaining all other Applicable Permits as may be required by the
Developer;
b) upon written request from the Developer, assist the Developer, on a best effort
basis, in obtaining immigration clearances, employment permits and residential
premises for any foreign personnel engaged or employed by the Developer in
connection with the implementation of the Project; and
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c) subject to the Developer / Contractor complying with the requirements under the
Applicable Laws including but not limited to payment of customs and any other
duty, assist the Developer or Contractor, on a best effort basis, to import into India
all items of equipment and materials required for the Project.
11.6 Suspension of Works
a) Upon recommendation of the Independent Engineer to this effect, the
Concessioning Authority may by notice require the Developer to suspend
forthwith the whole or any part of the Construction Works if, in the reasonable
opinion of the Authority, such work is not in accordance with the Construction
Standards / Safety Standards.
b) The Developer shall, pursuant to the notice under the foregoing provision suspend
the Construction Works or any part thereof for such time and in such manner as
may be specified by the Authority and thereupon represent to the Authority /
Independent Engineer, the remedial measures to remedy the defects notified. The
Developer may by notice require the Independent Engineer to inspect such
remedial measures forthwith and make a report to the Authority recommending
whether or not the suspension hereunder may be revoked. Any dispute as regards
the suspension of works or the remedial measures proposed, if cannot resolved
within 30 (thirty) Days of the suspension or proposal of the remedial measures,
shall be submitted for dispute resolution in accordance with this Agreement
hereof.
11.7 Issue of Completion Certificate
a) At least 60 (sixty) Days prior to the likely completion of the Project, the
Developer shall notify the Independent Engineer of the date when it intends to
commence commercial operations. The Independent Engineer shall then proceed
to inspect the Construction Works with the intention of issuing the Completion
Certificate and determine and notify to the Developer the schedule and manner of
the tests that it shall carry out to ensure that the Project meets with the
Construction Standards (“the Tests”). The date and time of each of the Tests shall
be determined by the Independent Engineer in consultation with the Developer,
and notified to the Authority who may designate its representative to witness the
Tests. The Developer shall provide such assistance as the Independent Engineer
may reasonably require for conducting the Tests. In the event of the Developer
and the Independent Engineer failing to mutually agree on the dates for
conducting the Tests, the Developer shall fix the dates by not less than 10 (ten)
Days notice to the Independent Engineer;
b) Upon completion of each Test, the Independent Engineer shall provide to the
Developer and the Authority copies of all Test data including detailed Test results;
c) Upon completion of Construction Works and the Independent Engineer
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determining all the Tests to be successful, it shall forthwith issue to the Developer
and the Authority a Completion Certificate;
d) The Independent Engineer may, at the request of the Developer, issue a
provisional certificate of completion substantially (the “Provisional Certificate”) if
the Tests are successful and the Project can be safely and reliably placed in
commercial operation though certain works or things forming part thereof are
outstanding and not yet complete. The Provisional Certificate shall have appended
thereto a list of outstanding items signed jointly by the Independent Engineer and
the Developer (the “Punch List”) to be completed by the Developer within a
stipulated time. All items in the Punch List shall be completed by the Developer
within 90 (ninety) Days of the date of issue of the Provisional Certificate or such
other extended period that the Concessioning Authority may in its sole discretion
determine, failing which the Provisional Certificate shall lose its validity and the
Authority shall be entitled to terminate this Agreement;
11.8 Liquidated Damages
Subject to any of the provisions of this Agreement providing for extension of time for
performance or excuse from performance, as the case may be, of any of the
obligations of the Developer under this Agreement, the Developer shall pay to the
Authority liquidated damages at the rate of 0.1% (zero point one percent) of the
Performance Guarantee for every Day of delay in fulfilling the specified obligations
on or before a Milestone Date including a delay in obtaining the Completion
Certificate or the Provisional Certificate on or before the Scheduled Project
Completion Date. Provided such liquidated damages shall not in aggregate exceed 5%
(five percent) of the Minimum Development Obligation and unless the delay is in
obtaining of the Completion Certificate or the Provisional Certificate, shall not be
payable for less than 15 (fifteen) Days of delay from a Milestone Date, in fulfilling a
specified obligation. The Parties agree that the liquidated damages as provided are a
genuine pre-estimate of the damages the Authority is likely to suffer and are not by
way of a penalty. In case the aggregate delay exceeds 180 (one hundred and eighty)
Days or the aggregate liquidated damages paid and/or payable under this provision
exceeds the specified limit of 5% (five percent) of the Minimum Development
Obligation, the Authority shall be entitled to terminate this Agreement and the
consequences of termination as laid down in Article 14 shall follow. The
Concessioning Authority may, at its discretion recover any amounts with respect to
liquidated damages from the Performance Guarantee.
11.9 OPERATIONS & MAINTENANCE
11.9.1 Obligations of the Developer
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In addition to any of its other obligations under this Agreement, the Developer shall
manage, operate, maintain and repair the Project Facilities and Services, entirely at its
cost, charges, expenses and risk in accordance with the provisions of this Agreement.
The Developer’s obligations under this Article shall include but shall not be limited
to the following:
(i) Operations & Maintenance:
The Developer shall:
a) promptly commence operations upon the Project Facilities and Services being
declared by the Authority as ready for operations;
b) make efforts to achieve optimal utilization of the Project Facilities and Services;
c) ensure compliance of the Project Facilities and Services at least with the Project
Requirements;
d) ensure compliance of the Project Facilities and Services at least with the Good
Industry Practice;
e) ensure that the Project Facilities and Services shall adhere to the Operations and
Maintenance Standards and Safety Standards;
f) make available all necessary financial, technical, technological, managerial and
other resources for operation, maintenance, repair and replacement of the Project
Facilities and Services in a timely manner;
g) ensure maintenance of proper and accurate record/data/accounts relating to
operations of the Project Facilities and Services and the revenue earned therefrom;
h) obtain, maintain and comply with Applicable Permits and comply with the
Applicable Laws including those relating but not limited to safety, health,
environment and labour; and
i) prevent, with the assistance of concerned law enforcement agencies, any
encroachment or unauthorized use of the Project Facilities and Services.
(ii) Repairs and Maintenance
The Developer shall at its own cost:
a) repair as necessary and maintain the Project Facilities and Services or any part
thereof in accordance with the Project Requirements and for this purpose carry out
routine preventive measures and maintenance of the Project Facilities and
Services including resurveying of pavement, repair structures and repair and
refurbish equipments; and
b) maintain the Project Facilities and Services in accordance with the provisions of
this Agreement and Good Industry Practice with the objective of providing
adequate service standards and ensuring that the Project Facilities and Services to
be transferred to the Authority upon expiry of the Lease Period are in good
35
condition, normal wear and tear excepted.
(iii) Replacement of Equipment
The Developer shall at its cost, plan for replacement of the equipment well ahead of
the time when the utility thereof is reasonably expected to expire and replace the
equipment in accordance with Good Industry Practice so as to ensure that the Project
facilities and Services commensurate with the Project Requirements, at all times
during the Lease Period.
(iv) Repairs, Replacement or Restoration
The Developer shall at its own costs, promptly and diligently repair, replace or restore
any of the Project Facilities and Services or part thereof which may be lost, damaged,
or destroyed for any reason whatsoever.
(v) Removal / Replacement of Assets
Except as provided/authorized under this Agreement the Developer shall not, without
the prior written permission of the Authority, remove or replace any assets comprised
in the Project Facilities and Services. Such notice shall contain the exact details of the
assets that the Developer intends to remove and/or replace, its reasons for doing so and
the likely period for replacement.
(vi) Payments to the Concessioning Authority
The Developer shall make/ensure payments to the Concessioning Authority as per
Article 6.
(vii) Access for Inspection
The Developer shall be obliged to extend all co-operation to Experts appointed by the
Authority for purposes of verifying that the Project/the Project Facilities and Services
are operated and maintained in compliance with the Good Industry Practice and
adhere to the operations and maintenance standards and safety standards. Such
verification shall be made annually. Additionally, the Developer shall upon prior
intimation by the Authority provide the authorized representatives of the Authority
access to the Project Facility Assets/the Project Facilities and Services for inspection
and review of operations and also to ascertain compliance with any of the
requirements under this Agreement. Without prejudice to the generality of this
provision, it is agreed by the Developer that it shall in particular extend all co-
operation and information required by the Experts appointed by the Authority for
conducting a safety audit and verifying that the Project/Project Facilities and Services
are in strict compliance with the Safety Standards.
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(viii) Reports
The Developer shall provide to the Authority, Daily and Monthly reports on revenue
earned and collected in respect of Project Facilities and Services, and any other
information relating to operations which the Authority may require from time to time.
In addition to Physical Copy, the Developer shall provide the reports in prescribed
formats and in electronic form so as to provide online access to the Concessioning
Authority and its representatives.
(ix) Computer System and On Line Network
The Developer shall install, operate and maintain such computer system and network
(such as Electronic Data Interchange and Real time on line Monitoring System) and
follow such protocol as the Authority may specify from time to time.
(x) Security Arrangements
The Developer may make his own arrangements for security in the Project Site/Port
Assets and with respect to the Project provided the Developer shall abide by the
security regulations/ procedures prescribed by the Authority or a Government
Authority from time to time.
(xi) Employment of Personnel
The Developer shall employ qualified and skilled personnel required to operate the
Project Facilities and Services. The terms of employment may be as deemed fit by the
Developer and the Developer shall comply with all Applicable Laws and bear all
costs in this regard. Without prejudice to the generality of this provision, all requisite
approvals for employment of personnel of foreign origin or nationality shall be
obtained by the Developer prior to engaging such personnel. Failure to obtain
approval will not amount to a Force Majeure Event. All employees shall always
remain the Developer’s responsibility. All labour law compliances shall be that of the
Developer alone.
11.9.2 Approvals
The Authority shall promptly grant approvals/ consents sought by the Developer as
required under this Agreement subject to the Developer having complied with all
Applicable Laws/requirements in this regard.
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ARTICLE 12: FINANCIAL CLOSE
12.1 Financial Close
12.1.1 The Developer hereby agrees and undertakes that it shall achieve Financial Close
within 180 days from the Appointed Date. The Developer shall, upon occurrence of
Financial Close, notify the Authority forthwith, and shall have provided to the
Authority, at least 2 (two) days prior to the Financial Close, 3 (three) true copies of
the Financial Package.
12.1.1 Notwithstanding anything to the contrary contained in this Agreement, in the event
that the Financial Close does not occur, for any reason whatsoever, within the period
set forth in Clause 12.1.1, all rights, privileges, claims and entitlements of the
Developer under or arising out of this Agreement shall be deemed to have been
waived by and to have ceased with the concurrence of the Developer, and this
Agreement shall be deemed to have been terminated by mutual agreement of the
Parties.
12.1.2 For the avoidance of doubt the Parties agree that no amendment made to the
Financing Documents without prior express consent of the Authority shall have the
effect of enlarging in any manner, the obligations of the Authority under this
Agreement.
ARTICLE 13: INSURANCES
13.1 Insurance during Lease Period
13.1.1 The Developer shall, at its cost and expense, purchase and maintain during the Lease
Period such insurance policies as are necessary, including but not limited to the
following:
a. Developers’ all risk insurance;
b. Comprehensive third party liability insurance including injury or death to
personnel / representative of Persons who may enter the Property;
c. Workmen’s compensation insurance;
d. loss, damage or destruction of the Project Facility, at replacement value;
e. the Developer’s general liability arising out of the Lease;
f. liability to third parties; and
g. any other insurance that may be necessary to protect the Developer, its
employees and its assets against loss, damage, destruction, business
interruption or loss of profit including insurance against all Force Majeure
Events that are insurable and not otherwise covered in items (a) to (f).
13.1.2 The Developer shall at its cost and expense, purchase and maintain by due
reinstatement or otherwise, during the Lease Period all insurances in respect of the
Property/ Project Asset / Project Facilities in accordance with the Good Industry
Practice. The Developer shall maintain a register of entry in order of premiums paid
towards the Property/ Project Asset / Project Facilities and proof of payments made
shall be submitted to the Authority whenever requested for.
13.2 Insurance Companies
13.2.1 The Developer shall insure all insurable assets comprised in the Project Facility
through insurance companies.
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13.3 Evidence of Insurance Cover
13.3.1 The Developer shall, from time to time, in case of demand from the Authority
provide copies of all insurance policies (or appropriate endorsements, certifications
or other satisfactory evidence of insurance) obtained by the Developer in accordance
with this Agreement.
13.4 Application of Insurance Proceeds
13.4.1 Subject to the provisions of the Financing Documents and unless otherwise provided
herein, all proceeds received under insurance policies shall be promptly applied by
the Developer towards repair or renovation or re-instatement of the Property /
Project Facility/Project Asset or any part thereof, which may have been damaged or
destroyed. The Developer may designate the Lenders as the loss payees under the
insurance policies / assign the insurance policies in their favour as security for
financial assistance. The Developer shall carry out such repair or renovation or re-
instatement to the extent possible in such a manner that the Property / Project
Facility/Project Asset or any part thereof, shall, after such repair or renovation or
restoration or re-instatement be as far as possible in the same condition as they were
before such damage or destruction, normal wear and tear excepted.
13.5 Validity of the Insurance Cover
13.5.1 The Developer shall pay the premium payable on such insurance policy (or policies)
so as to keep the policy (or policies) in force and valid throughout the Lease Period.
ARTICLE 14: EVENTS OF DEFAULT AND TERMINATION
14.1 Event of Default
14.1.1 Event of Default means the Developer Event of Default or the Authority Event of
Default or both as the context may admit or require.
14.2 Developer Event of Default:
14.2.1 The following events shall constitute an event of default by the Developer (a
“Developer Event of Default”) unless such Developer Event of Default has
occurred as a result of the Authority Event of Default or a Force Majeure Event;
a. The Developer fails to satisfy the Conditions Precedent within the time frame
specified in this Agreement.
b. The Developer creates any Encumbrance on the Property in favour of any
person save and except as otherwise expressly permitted under this
Agreement.
c. The Developer is in Material Breach of any of its other obligations under this
Agreement and the same has not been remedied for more than 60 days after
receipt of Notice thereof by the Authority;
d. Any representation made or warranties given by the Developer under this
Agreement are found to be false or misleading.
e. A resolution is passed by the shareholders of the Developer for voluntary
winding up of the Developer entity;
f. The Developer is adjudged bankrupt or insolvent;
g. Any petition for winding up of the Developer has been admitted and
liquidator or provisional liquidator has been appointed or the Developer has
been ordered to be wound up by Court of competent jurisdiction, except for
the purpose of amalgamation or reconstruction with the prior consent of the
39
Authority, provided that, as part of such amalgamation or reconstruction the
amalgamated or reconstructed entity has unconditionally assumed all
surviving obligations of the Developer under this Agreement
h. A default has occurred under any of the Financing Documents and any of the
Lenders has recalled its financial assistance and demanded payment of the
amounts outstanding under the Financing Documents or any of them as
applicable.
i. The Developer repudiates this Agreement or otherwise evidences an
intention not to be bound by this Agreement.
j. The Developer suffers an attachment being levied on any of its assets causing
a Material Adverse Affect on the Property / Project Facility/Project Assets
and such attachment continues for a period exceeding 90 days.
k. The Developer has delayed any payment that has fallen due under this
Agreement and if such delay exceeds 90 (ninety) days from the Due Date.
l. The Developer abandons the operations of the Project Facility for more than
30 (thirty) consecutive days without the prior consent of the Authority.
m. The Developer fails to meet the Minimum Development Obligations as set
out in this Agreement during the Lease Period and has failed to remedy the
same within ninety (90) days.
n. The Developer fails to pay the necessary insurance premium towards the
Property/ Project Facility / Project Assets and thereby causes the insurance
coverage on the Property/ Project Facility / Project Assets to diminish,
terminate or expire.
14.3 The Authority Event of Default:
14.3.1 Any of the following events shall constitute an event of default by the Authority
("Authority Event of Default”), when not caused by a Developer Event of Default
or due to a Force Majeure Event:
a. The Authority fails to fulfil any of its Conditions Precedents in accordance
with the provisions of this Agreement;
b. The Authority unlawfully repudiates this Agreement or otherwise evidences an
irrevocable intention not to be bound by this Agreement;
c. Any representation made or warranties given by the Authority under this
Agreement are found to be false or misleading.
d. The Authority fails to adhere to the Authority Obligations as listed in Article 9
within the corresponding stipulated timelines
14.4 Termination Due to Developer Event of Default
14.4.1 Without prejudice to any other right or remedy which the Authority may have in
respect thereof under this Agreement, upon the occurrence of a Developer Event of
Default, the Authority may terminate this Agreement in the manner as set out under
Clause 14.2.2 and 14.2.3
14.4.2 If the Authority decides to terminate this Agreement pursuant to preceding clause
14.2.1 (i), it shall in the first instance issue Preliminary Notice to the Developer.
Within thirty (30) days of receipt of the Preliminary Notice, the Developer shall
submit to the Authority in sufficient detail, the manner in which it proposes to cure
the underlying Event of Default (the “Developer's Proposal to Rectify”). In case of
on submission of the Developer's Proposal to Rectify within the said period of 30
days, the Authority shall be entitled to terminate this Agreement by issuing
Termination Notice, and to appropriate and invoke the Performance Security
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14.4.3 If the Developer's Proposal to Rectify is submitted within the period stipulated
therefor, the Developer shall have further period of 30 days to remedy/ cure the
underlying Event of Default. If, however the Developer fails to remedy/cure the
underlying Event of Default within such further period allowed, the Authority shall
be entitled to terminate this Agreement, by issue of Termination Notice and to
appropriate and invoke the Performance Security
14.5 Termination for the Authority Events of Default
14.5.1 Without prejudice to any other right or remedy which the Developer may have in
respect thereof under this Agreement, upon the occurrence of Authority Event of
Default, the Developer shall be entitled to terminate this Agreement by issuing
Termination Notice.
14.5.2 If the Developer decides to terminate this Agreement pursuant to preceding clause
14.3.1 it shall in the first instance issue Preliminary Notice to the Authority. Within
30 days of receipt of Preliminary Notice, the Authority shall forward to the
Developer its proposal to remedy/ cure the underlying Event of Default (the
"Authority Proposal to Rectify”). In case of non submission of Authority Proposal to
Rectify within the period stipulated therefore, Developer shall be entitled to
terminate this Agreement by issuing Termination Notice.
14.5.3 If the Authority Proposal to Rectify is forwarded to the Developer within the period
stipulated therefor, the Authority shall have further period of 30 days to remedy/
cure the underlying Event of Default. If, however the Authority fails to remedy/ cure
the underlying Event of Default within such further period allowed, the Developer
shall be entitled to terminate this Agreement by issuing Termination Notice
14.6 Termination Notice
14.6.1 If a Party having become entitled to do so decides to terminate this Agreement
pursuant to the preceding Clause 14.2 and 14.3 it shall issue Termination Notice
setting out:
a. in sufficient detail the underlying Event of Default;
b. the Termination Date which shall be a date occurring not earlier than 60 days
from the date of Termination Notice;
c. the estimated termination payment including the details of computation
thereof;
d. And any other relevant information
14.7 Obligation of Parties
14.7.1 Following issue of Termination Notice by either Party, the Parties shall promptly
take all such steps as may be necessary or required to ensure that;
a) until Termination the Parties shall, to the fullest extent possible, discharge
their respective obligations so as to maintain the continued operation of the
Project Facilities,
b) the Termination payment, if any, payable by the Authority is paid to the
Developer on the Termination Date and
c) the Property, Project Asset and Project Facilities are handed over to Authority
by the Developer on the Termination Date free from any Encumbrance along
with any payment that may be due by the Developer to the Authority.
14.8 Withdrawal of Termination Notice
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14.8.1 Notwithstanding anything inconsistent contained in this Agreement, if the Party who
has been served with the Termination Notice cures the underlying Event of Default
to the satisfaction of the other Party at any time before the Termination occurs, the
Termination Notice shall be withdrawn by the Party which had issued the same.
14.8.2 Provided that the Party in breach shall compensate the other Party for any direct
costs/consequences occasioned by the Event of Default which caused the issue of
Termination Notice.
14.9 Termination Payments
14.9.1 Upon Termination by the Authority on account of occurrence of a Developer Event
of Default, the Authority shall be entitled to receive Termination Payment equal to
sum of succeeding two Annual Lease Rent Payments and invoke the Performance
Security.
14.9.2 Upon Termination of this Agreement by the Developer due to the Authority Event of
Default, the Developer shall be entitled to receive from the Authority, by way of
Termination Payment a sum equal to:
i. the total debt due, plus
ii. 100% (one hundred percent) of the Equity subscribed in cash and actually
spent on the project.
14.10 Rights of the Authority on Termination
14.10.1 Upon Termination of this Agreement for any reason whatsoever, the Authority shall
have the power and authority to
a. take possession and control of Property / Project Facility / Project Assets
forthwith;
b. prohibit the Developer and any person claiming through or under the
Developer from entering upon the Property / Project Facility /Project Assets
or any part thereof;
c. Notwithstanding anything contained in this Agreement, the Authority shall
not, as a consequence of Termination or otherwise, have any obligation
whatsoever including but not limited to obligations as to compensation for
loss of employment on any ground, in relation to any person in the
employment of or engaged by the Developer in connection with the Project,
and the hand back of the Project/Project Facility/Project Assets by the
Developer to the Authority shall be free from any such obligations.
d. Appoint a third party to step in and succeed upon election by the Authority
without the necessity of any further action by the Developer, to the interests
of the Developer under such of the Agreements as the Authority may in its
discretion deem appropriate with effect from the date of communication of
such election to the counter party to the relative Agreements. Provided any
sums claimed by such counter party as being due and owed to for work and
services performed or accruing on account of any act, omission or event prior
to such date of election shall and shall always constitute debt between the
Developer and such counter party and the Authority shall in no way or
manner be liable or responsible for such sums.
14.11 Accrued Rights of Parties
14.11.1 Notwithstanding anything to the contrary contained in this Agreement, any
Termination pursuant to the provisions of this Agreement shall be without prejudice
to accrued rights of either Party including its right to claim and recover money
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damages and other rights and remedies which it may have in law or contract. All
rights and obligations of either Party under this Agreement, including without
limitation Termination Payment, shall survive the Termination of this Agreement to
the extent such survival is necessary for giving effect to such rights and obligations.
14.12 Lenders’ Step-in Rights
14.12.1 Notwithstanding anything to the contrary contained in this Agreement, the Parties
hereby agree that :
a) upon the Lenders recalling and demanding the debt outstanding under the
Financing Documents (following an Event of Default under the Financing
Documents), or
b) upon a Termination Notice being issued by the Authority,
14.12.2 The Lenders shall, without prejudice to any other remedy available to them, have the
option to propose to the Authority the substitution of the Developer by another
developer (Proposed Developer). Any such proposal shall contain in sufficient detail
all the relevant information about the Proposed Developer and the terms and
conditions of the substitution.
14.12.3 Upon receipt of the Lenders’ proposal pursuant to the preceding Clause 14.10.2, the
Authority shall at its discretion have the right to accept substitution of the Developer
on such terms and conditions as it may deem fit.
Provided that any such substitution shall,
a) be on terms and conditions of the Lease which are not less favourable to the
Authority than those prevailing at the time of substitution, and
b) be for the remaining period of Lease only.
14.12.4 In the event of substitution as aforesaid, all the rights, privileges and the benefits of
the Lease shall be deemed to have been transferred to and vested in the Proposed
Developer and the Authority and the Proposed Developer shall take such steps and
enter into such documents as may be necessary to give effect to the substitution.
14.12.5 Upon Substitution of the Developer becoming effective as aforesaid, the Developer
shall hand back to the Authority or upon instruction of the Authority to the Proposed
Developer and for the purpose of giving effect to this provision, the Authority shall
have all such rights as are provided in Clause 14.7.
ARTICLE 15: HANDBACK OF PROPERTY / PROJECT FACILITY
15.1 Ownership
15.1.1 Without prejudice and subject to the Developer, the ownership of the Property,
Project Facility and Project Assets including all improvements made therein by the
Developer, shall at all times remain that of the Authority.
15.2 Handing over of the Property
15.2.1 Upon the expiry of the Lease in the normal course, the Developer shall within one
month from the end of the Lease Period, hand over vacant and peaceful possession
of the Property including Project Facility and Project Assets at no cost to the
Authority in good operable condition. However, the Authority shall pay Rs 1/ to
Developer for the improvement/upgradation etc. made by the Developer in the
Property/Project Assets/Project Facility at the timing of handing over. The
Developer shall have no right, title, claim or interest whatsoever therein nor shall it
have any claim in respect thereof against the Authority.
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15.2.2 The Developer shall provide support and further do all such acts including execution
of necessary writings/documents as desired by the Authority for deleting the name of
Developer from, or diluting or dissolving any apparent right or interest, in any
license or permission obtained in relation to the Property/Project Facility/Project
Assets at the end of the Lease Period.
15.3 Joint Inspection and Removal of Deficiency
15.3.1 The handing over process shall be initiated at least 12 months before the actual date
of expiry of the Lease Period through a joint inspection by the Authority and the
Developer. The Authority shall, within 15 days of such inspection prepare and
furnish to the Developer a list of works/jobs/additions/alterations, if any, to be
carried out to bring the Property, Project Facility and Project Assets at least to the
level of service condition that existed on the Appointed Date and these works need
to be completed by the Developer at least two months prior to the date of expiry of
the Lease Period. In case the Developer fails to carry out the above works, within the
stipulated time period, the Authority shall be at liberty to get these works executed
by any other party at the risk and cost of the Developer and any cost incurred by the
Authority in this regard shall be reimbursed by the Developer to the Authority
within 7 days of receipt of demand. For this purpose, the Authority shall without
prejudice to any other right/remedy available to it under this Agreement, have the
right to appropriate and invoke the Performance Security and/or to set off any
amounts due, if any, and payable by the Authority to the Developer to the extent
required/ available and to recover deficit amount, if any, from the Developer.
15.4 Transfer of Intellectual Property Rights
15.4.1 The Intellectual Property Rights related to the Property / Project Facility/Project
Assets other than the Trade Marks shall automatically stand transferred to the
Authority on termination of this Lease Agreement.
ARTICLE 16: DISPUTE RESOLUTION
16.1 Amicable Resolution
16.1.1 Save where expressly stated otherwise in this Agreement, any dispute, difference or
controversy of whatever nature howsoever arising under, out of or in relation to this
Agreement, including non-completion of the Project, between the Parties and so
notified in writing by either Party to the other Party (the "Dispute") in the first
instance shall be attempted to be mutually resolved amicably. Failing resolution of
the same amicably, the dispute resolution would be in accordance with the procedure
set forth in Clause 16.1.2 below.
16.1.2 Either Party may require the Dispute to be referred to the Director General,
Department of Tourism, GoUP and the Chairman of the Board of Directors of the
Developer, for the time being for amicable settlement. Upon such reference, the two
shall meet at the earliest mutual convenience and in any event within 15 days of such
reference to discuss and attempt to amicably resolve the Dispute. If the Dispute is
not amicably settled within 15 (fifteen) days of such meeting between the two, either
Party may refer the Dispute to arbitration in accordance with the provisions below.
16.2 Arbitration
16.2.1 Arbitrators
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Any Dispute which is not resolved amicably as provided in Clause 16.1 shall be
finally settled by binding arbitration under the Arbitration and Conciliation Act,
1996. The arbitration shall be by a panel of three arbitrators, one to be appointed by
each Party and the third to be appointed by the two arbitrators appointed by the
Parties. A Party requiring arbitration shall appoint an arbitrator in writing, inform the
other Party about such appointment and call upon the other Party to appoint its
arbitrator. If the other Party fails to appoint its arbitrator within 7 days of the receipt
of notice from the other Party, then the Party appointing the arbitrator shall take
steps in accordance with Arbitration and Conciliation Act, 1996.
16.2.2 Place of Arbitration
The place of arbitration shall be Lucknow but by agreement of the Parties, the
arbitration hearings, if required, can be held elsewhere from time to time.
16.2.3 English Language
The request for arbitration, the answer to the request, the terms of reference, any
written submissions, any orders and rulings shall be in English and, if oral hearings
take place, English shall be the language to be used in the hearings.
16.2.4 Procedure
The procedure to be followed within the arbitration, including appointment of
arbitrator / arbitral tribunal, the rules of evidence which are to apply shall be in
accordance with the Arbitration and Conciliation Act, 1996.
16.2.5 Enforcement of Award
Any decision or award resulting from arbitration shall be final and binding upon the
Parties. The Parties hereto hereby waive, to the extent permitted by law, any rights to
appeal or review of such award by any court or tribunal. The Parties hereto agree
that the arbitral award may be enforced against the Parties to the arbitration
proceeding or their assets wherever they may be found and that a judgement upon
the arbitral award may be entered in any court having jurisdiction thereof.
16.2.6 Fees and Expenses
The fees and expenses of the arbitrators and all other expenses of the arbitration
shall be initially borne and paid by respective Parties subject to determination by the
arbitrators. The arbitrators may provide in the arbitral award for the reimbursement
to the prevailing party of its costs and expenses in bringing or defending the
arbitration claim, including legal fees and expenses incurred by Party.
16.2.7 Performance during Arbitration
Pending the submission of and / or decision on a Dispute, difference or claim or until
the arbitral award is published; the Parties shall continue to perform all their
obligations under this Agreement without prejudice to a final adjustment in
accordance with such award.
ARTICLE 17: REPRESENTATIONS AND WARRANTIES, DISCLAIMER
17.1 Representations and Warranties of the Developer
17.1.1 The Developer represents and warrants to the Authority that:
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a. it is duly organised, validly existing and in Good standing under the laws of
India;
b. it has full power and authority to execute, deliver and perform its obligations
under this Agreement and to carry out the transactions contemplated hereby;
c. it has taken all necessary corporate and other action under Applicable Laws
and its constitutional documents to authorize the execution, delivery and
performance of this Agreement;
d. it has the financial standing and capacity to undertake the Project;
e. this Agreement constitutes a legal, valid and binding obligation enforceable
against it in accordance with the terms hereof;
f. it is subject to civil and commercial laws of India with respect to this
Agreement and it hereby expressly and irrevocably waives any immunity in
any jurisdiction in respect thereof;
g. the execution, delivery and performance of this Agreement will not conflict
with, result in the breach of, constitute a default under or accelerate
performance required by any of the terms of the Developer's Memorandum
and Articles of Association or any Applicable Laws or any covenant,
agreement, understanding, decree or order to which it is a party or by which
it or any of its properties or assets is bound or affected;
h. there are no actions, suits, proceedings, or investigations pending or, to the
Developer's knowledge, threatened against it at law or in equity before any
court or before any other judicial, quasi-judicial or other authority, the
outcome of which may result in the breach of or constitute a default of the
Developer under this Agreement or which individually or in the aggregate
may result in any Material Adverse Effect;
i. it has no knowledge of any violation or default with respect to any order,
writ, injunction or any decree of any court or any legally binding order of any
Government Agency which may result in any Material Adverse Effect or
impairment of the Developer's ability to perform its obligations and duties
under this Agreement;
j. it has complied with all Applicable Laws and has not been subject to any
fines, penalties, injunctive relief or any other civil or criminal liabilities
which in the aggregate have or may have Material Adverse Effect;
k. subject to receipt by the Developer from the Authority of the Termination
Payment and any other amount due under any of the provisions of this
Agreement, in the manner and to the extent provided for under the applicable
provisions of this Agreement all rights and interests of the Developer in and
to the Project Facility shall pass to and vest in the Authority on the
Termination Date free and clear of all Encumbrances without any further act
or deed on the part of the Developer or the Authority;
l. no representation or warranty by the Developer contained herein or in any
other document furnished to the Authority or to any Government Agency in
relation to Applicable Permits contains or will contain any untrue statement
of material fact or omits or will omit to state a material fact necessary to
make such representation or warranty not misleading; and
m. no sums, in cash or kind, have been paid or will be paid, by or on behalf of
the Developer, to any person by way of fees, commission or otherwise for
securing the Lease or entering into this Agreement or for influencing or
attempting to influence any officer or employee of the Authority in
connection therewith.
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17.2 Representations and Warranties of the Authority
17.2.1 The Authority represents and warrants to the Developer that:
a. The Authority has full power and authority to grant the Lease;
b. The Authority has taken all necessary action to authorise the execution,
delivery and performance of this Agreement;
c. this Agreement constitutes a legal, valid and binding obligation enforceable
against it in accordance with the terms hereof.
17.3 Lock-in
Subject to and in accordance with the terms and conditions set forth in this
Agreement, the Developer agrees to the following lock-in restrictions:
17.3.1 Period commencing from the Appointed Date and ending on expiry of first Five (5)
years from Appointed Date shall be the lock-in period (hereinafter referred to as
“Lock-in-Period”) during which neither Party shall have the right to terminate this
Lease Agreement. Notwithstanding the above, the Authority shall have the exclusive
right to terminate this Lease Agreement within the Lock-in-Period in the event of a
breach by the Developer of the provisions of the Lease Agreement or any Applicable
Law .
17.3.2 The Lead Member of the Selected Bidder shall subscribe to and hold at least fifty
one percent (51%) equity shareholding in Developer (SPV) executing the Project
until the expiration of five (5) years from the Appointed Date.
17.4 Disclaimer
17.4.1 Without prejudice to any express provision contained in this Agreement, the
Developer acknowledges that prior to the execution of this Agreement, the
Developer has after a complete and careful examination made an independent
evaluation of the Specifications and Standards, Property and all the information
provided by the Authority and has determined to the Developer's satisfaction the
nature and extent of such difficulties, risks and hazards as are likely to arise or may
be faced by the Developer in the course of performance of its obligations hereunder
17.4.2 The Developer further acknowledges and hereby accepts the risk of inadequacy,
mistake or error in or relating to any of the matter set forth in Clause 17.4.1 above
and hereby confirms that the Authority shall not be liable for the same in any manner
whatsoever to the Developer.
17.5 Obligation to Notify Change
17.5.1 In the event that any of the representations or warranties made/given by a Party
ceases to be true or stands changed, the Party who had made such representation or
given such warranty shall promptly notify the other of the same.
ARTICLE 18: FORCE MAJEURE
18.1 Force Majeure Event
As used in this Agreement, Force Majeure Event means the occurrence of any of the
Non-Political Events, the Political Events or the Other Events in India, set out in
Clauses 18.1.1, 18.1.2 and 18.1.3 respectively including the impact/consequence
thereof which :
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a) is beyond the control of the Party claiming to be affected thereby (the “Affected
Party”);
b) prevents the Affected Party from performing or discharging its obligations under
this Agreement; and
c) the Affected Party has been unable to overcome or prevent despite exercise of
due care and diligence.
18.1.1 Non-Political Events
Any of the following events which prevent the Affected Party from performing any
of its obligations for a continuous period of not less than 7 (seven) Days from the
date of its occurrence, shall constitute a Non-Political Event:
a) act of God, epidemic, extremely adverse weather conditions, lightning,
earthquake, cyclone, flood, volcanic eruption, chemical or radioactive
contamination or ionizing radiation, fire or explosion (to the extent of
contamination or radiation or fire or explosion originating from a source
external to the Project Site and by reasons not attributable to the Developer or
the Contractor or any of the employees or agents of the Developer or the
Contractor);
b) strikes or boycotts (other than those involving the Developer, Contractors or
their respective employees/representatives, or attributable to any act or omission
of any of them), and not being an Other Event set forth in Clause 18.1.3, labour
disruptions or any other industrial disturbances not arising on account of the acts
or omissions of the Developer or the Contractor;
c) any failure or delay of a Contractor caused by any of the Non-Political Events,
for which no offsetting compensation is payable to the Developer or on behalf of
the Contractor;
d) the discovery of geological conditions, toxic contamination or archaeological
remains on the Project Site that could not reasonably have been expected to be
discovered through a site inspection; or
e) any event or circumstance of a nature analogous to any of the foregoing.
18.1.2 Political Events
Any of the following events shall constitute Political Event:
a) Change in Law for which no relief is provided under the provisions of this
Agreement, resulting in Material Adverse Effect;
b) action of a Government Authority having Material Adverse Effect including but
not limited to (i) acts of expropriation, compulsory acquisition or takeover by
any Government Authority of the Project/Project Facilities and Services or any
part thereof or of the Developer’s or the Contractor’s rights under any of the
Project Contracts, and (ii) any unlawful, unauthorized or without jurisdiction
refusal to issue or to renew or the revocation of any Applicable Permits, in each
case, for reasons other than the Developer’s or the Contractor’s breach or failure
in complying with the Project Requirements, Applicable Laws, Applicable
Permits, any judgment or order of a Governmental Agency or of any contract by
which the Developer or the Contractor as the case may be is bound;
c) early determination of this Agreement by the Authority for reasons of national
emergency, national security or the public interest;
d) any failure or delay of a Contractor caused by any of the aforementioned
Political Events, for which no offsetting compensation is payable to the
Developer by or on behalf of the Contractor; or
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e) any event or circumstance of a nature analogous to any of the foregoing.
18.1.3 Other Events
Any of the following events which prevents the Affected Party from performing any
of its obligations under this Agreement for a continuous period of not less than 7
(seven) Days from the date of its occurrence, shall constitute the Other Event:
a) an act of war (whether declared or undeclared), invasion, armed conflict or act
of foreign enemy, blockade, embargo, riot, insurrection, terrorist or military
action, civil commotion or politically motivated sabotage;
b) industry wide or State wide strikes or industrial action;
c) any civil commotion, boycott or political agitation which prevents collection of
Fee by the Developer;
d) any judgment or order of a court of competent jurisdiction or statutory authority
in India made against the Developer or the Contractor in any proceedings which
is non-collusive and duly prosecuted by the Developer; and any judgment or
order of a court of competent jurisdiction or statutory authority in India made
against the Developer or the Contractor in any proceedings which is non-
collusive and duly prosecuted by the Developer other than relating to
proceedings (i) pursuant to failure of the Developer to comply with any
Applicable Law or Applicable Permit, or (ii) on account of breach of any
Applicable Law or Applicable Permit or of any contract, or (iii) enforcement of
this Agreement or (iv) with respect to exercise of any of its rights under this
Agreement by the Authority; or
e) any event or circumstance of a nature analogous to any of the foregoing.
18.2 Notice of Force Majeure Event
18.2.1. The Affected Party shall give written notice to the other Party in writing of the
occurrence of any of the Force Majeure Event (the “Notice”) as soon as the same
arises or as soon as reasonably practicable and in any event within 7 (seven) Days
after the Affected Party knew, or ought reasonably to have known, of its occurrence
and the adverse effect it has or is likely to have on the performance of its obligations
under this Agreement.
18.2.2. The Notice shall inter-alia include full particulars of:
i. the nature, time of occurrence and extent of the Force Majeure Event with
evidence in respect thereof;
ii. the duration or estimated duration and the effect or probable effect which such
Force Majeure Event has or will have on the Affected Party’s ability to perform
its obligations or any of them under this Agreement;
iii. the measures which the Affected Party has taken or proposes to take, to alleviate
the impact of the Force Majeure Event or to mitigate the damage; and
iv. any other relevant information.
18.2.3. So long as the Affected Party continues to claim to be affected by a Force Majeure
Event, it shall provide the other Party with periodic (fortnightly/monthly) written
reports containing the information called for by Clause 18.2.2 and such other
information as the other Party may reasonably request.
18.3 Performance of Obligations
18.3.1. If the Developer is rendered wholly or partially unable to perform any of its
obligations under this Agreement because of a Force Majeure Event, it shall be
49
excused from performance of such obligations to the extent it is unable to perform
the same on account of such Force Majeure Event provided that:
a. due notice of the Force Majeure Event has been given to the Authority as
required by the preceding Article ;
b. the excuse from performance shall be of no greater scope and of no longer
duration than is necessitated by the Force Majeure Event;
c. the Developer has taken all reasonable efforts to avoid, prevent, mitigate and
limit damage, if any, caused or is likely to be caused to the Property/Project
Asset/Project Facilities as a result of the Force Majeure Event and to restore
the Property/Project Asset/Project Facilities, in accordance with the Good
Industry Practice and its relative obligations under this Agreement;
d. when the Developer is able to resume performance of its obligations under
this Agreement, it shall give to the other Party written notice to that effect
and shall promptly resume performance of its obligations hereunder, the non
issue of such notice being no excuse for any delay for resuming such
performance;
e. the Developer shall continue to perform such of its obligations which are not
affected by the Force Majeure Event and which are capable of being
performed in accordance with this Agreement;
f. any insurance proceeds received shall be entirely applied to repair, replace or
restore the assets damaged on account of the Force Majeure Event, in
accordance with Good Industry Practice, unless otherwise agreed to by the
Authority.
ARTICLE 19: MISCELLANEOUS
19.1 Assignment and Charges
19.1.1 The Developer shall not assign in favour of any person this Agreement or the rights,
benefits and obligations.
19.1.2 The Developer shall not create nor permit to subsist any Encumbrance over
Property/Project Facility/Project Assets or otherwise transfer or dispose of all or any
of its rights and benefits under this Agreement.
19.1.3 Restraint set forth in Clauses 19.1.1 and 19.1.2 above shall not apply to:
a. Liens / encumbrances arising by operation of law in the ordinary course of
business of the Project;
b. Mortgages / pledges / hypothecation of goods / assets other than Property and
Project Facility, as security for indebtedness, in favour of the Lenders and
working capital providers for the Project;
c. assignment of Developer’s rights, title and interest under this Agreement to
or in favour of the Lenders pursuant to and in accordance with the
Substitution Agreement as security for their financial assistance.
19.1.4 Upon occurrence of the Developer Event of Default, the Lenders shall have the right
of substitution as provided in the Substitution Agreement.
19.2 Treatment to Existing Employees
19.2.1 The General employees will have the option of working with the Developer on
mutually agreed terms (However, the Developer has no obligation to accommodate
the existing employees). In that case the employee will be treated as an employee of
the Authority for the benefit of retiral dues but the current salary and related
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emoluments will be paid by the Developer. The statutory deduction will be made
and deposited under relevant heads by the Developer.
19.2.2 Employees can opt for Voluntary Retirement Scheme (VRS).
19.2.3 The Employees who are not opting for any of the above options will continue with
the Authority.
19.3 Liability And Indemnity
19.3.1 General Indemnity
a. The Developer shall indemnify, defend and hold the Authority harmless
against any and all proceedings, actions and third party claims arising out of
a breach by Developer of any of its obligations under this Agreement except
to the extent that any such claim has arisen due to the Authority Event of
Default.
b. The Authority will, indemnify, defend and hold harmless the Developer
against any and all proceedings, actions, third party claims for loss, damage
and expense of whatever kind and nature arising out of defect in title and/or
the rights of the Authority and/or arising of a breach by the Authority, its
officers, servants and agents of any obligations of the Authority under this
Agreement except to the extent that any such claim has arisen due to
Developer Event of Default.
19.3.2 Without limiting the generality of the Clause 19.3, the Developer shall fully
indemnify, hold harmless and defend the Authority including its officers servants,
agents and subsidiaries from and against any and all loss and damages arising out of
or with respect to (a) failure of the Developer to comply with Applicable Laws and
Applicable Permits, (b) payments of taxes relating to the Developer's Contractors,
suppliers and representatives’ income or other taxes required to be paid by the
Developer without reimbursement hereunder, or (c) non-payment of amounts due as
a result of materials or services furnished to the Developer or any of its Contractors
which are payable by the Developer or any of its Contractors.
19.3.3 Without limiting the generality of the provisions of this Clause 19.3, the Developer
shall fully indemnify, hold harmless and defend the Authority from and against any
and all damages which the Authority may hereafter suffer, or pay by reason of any
demands, claims, suits or proceedings arising out of claims of infringement of any
domestic or foreign patent rights, copyrights or other intellectual property,
proprietary or confidentiality rights with respect to any materials, information,
design or process used by the Developer or by the Developer's Contractors in
performing the Developer’s obligations or in any way incorporated in or related to
the Project. If in any such suit, claim or proceedings, a temporary restraint order or
preliminary injunction is granted, the Developer shall make every reasonable effort,
by giving a satisfactory bond or otherwise, to secure the suspension of the injunction
or restraint order. If, in any such suit claim or proceedings, the Project, or any part,
thereof or comprised therein is held to constitute an infringement and its use is
permanently injuncted, the Developer shall promptly make every reasonable effort to
secure for the Authority a license, at no cost to the Authority, authorising continued
use of the infringe work. If the Developer is unable to secure such license within a
reasonable time, the Developer shall, at its own expense and without impairing the
Specifications and Standards either replace the affected work, or part, or process
thereof with non-infringing work or parts or process, or modify the same so that it
becomes non-infringing.
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19.3.4 In the event that either Party receives a claim from a third party in respect of which it
is entitled to the benefit of an indemnity under the Clause 19.3 (the 'Indemnified
Party') it shall notify the other Party ("Indemnifying Party") within 14 (fourteen)
days of receipt of the claim and shall not settle or pay the claim without the prior
approval of the Indemnifying Party - such approval shall not be unreasonably
withheld or delayed. In the event that the Indemnifying Party wishes to contest or
dispute the claim it may conduct proceedings in the name of the Indemnified Party
subject to the Indemnified Party being secured against any costs involved to its
reasonable satisfaction.
19.3.5 Defence of Claims
a. The Indemnified Party shall have the right, but not the obligation, to contest,
defend and litigate any claim, action, suit or proceeding by any third party
alleged or asserted against such party in respect of, resulting from, related to
or arising out of any matter for which it is entitled to be indemnified
hereunder and their reasonable costs and expenses shall be indemnified by
the Indemnifying Party. If the Indemnifying Party acknowledges in writing
its obligation to indemnify the person indemnified in respect of loss to the
full extent provided by the Clause 19.3, the Indemnifying Party shall be
entitled, at its option, to assume and control the defence of such claim,
action, suit or proceeding liabilities, payments and obligations at its expense
and through counsel of its choice provided it gives prompt notice of its
intention to do so to the Indemnified Party and reimburses the Indemnified
Party for the reasonable cost and expenses incurred by the Indemnified Party
prior to the assumption by the Indemnifying Party of such defence. The
Indemnifying Party shall not be entitled to settle or compromise any claim,
action, suit or proceeding without the prior written consent of the
Indemnified Party unless the Indemnifying Party provides such security to
the Indemnified Party as shall be reasonably required by the Indemnified
Party to secure, the loss to be indemnified hereunder to the extent so
compromised or settled.
b. If the Indemnifying Party has exercised its rights under Clause19.3.4 above,
the Indemnified Party shall not be entitled to settle or compromise any claim,
action, suit or proceeding without the prior written consent of the
indemnifying Party (which consent shall not be unreasonably withheld or
delayed).
c. If the Indemnifying Party exercises its rights under Clause 19.3.5 above, then
the Indemnified Party shall nevertheless have the right to employ its own
counsel and such counsel may participate in such action, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party,
when and as incurred, unless:
(i) the employment of counsel by such party has been authorised in
writing by the Indemnifying Party; or
(ii) the Indemnified Party shall have reasonably concluded that there may
be a conflict of interest between the Indemnifying Party and the
Indemnified Party in the conduct of the defence of such action; or
(iii) the indemnifying Party shall not in fact have employed independent
counsel reasonably satisfactory to the Indemnified Party to assume
the defence of such action and shall have been so notified by the
Indemnified Party; or
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(iv) the Indemnified Party shall have reasonably concluded and
specifically notified the Indemnifying Party either
� that there may be specific defences available to it which are
different from or additional to those available to the
Indemnifying Party; or
� that such claim, action, suit or proceeding involves or could
have a material adverse effect upon it beyond the scope of this
Agreement,
provided that if sub-clauses (ii), (iii) or (iv) of Clause 19.3.5 (c) shall be
applicable, counsel for the Indemnified Party shall have the right to direct the
defence of such claim, action, suit or proceeding on behalf of the Indemnified
Party and the reasonable fees and disbursements of such counsel shall
constitute legal or other expenses hereunder.
19.4 Governing Law and Jurisdiction
19.4.1 This Agreement shall be construed and interpreted in accordance with and governed
by the laws of Union of India and the Courts at Lucknow, Uttar Pradesh, India shall
have exclusive jurisdiction over all matters arising out of or relating to this
Agreement.
19.5 Waiver
19.5.1 Waiver by either Party of any default by the other Party in the observance and
performance of any provision of or obligations under this Agreement:
a. shall not operate or be construed as a waiver of any other or subsequent
default hereof or of other provisions or obligations under this Agreement:
b. shall not be effective unless it is in writing and executed by a duly authorised
representative of such Party; and
c. shall not affect the validity or enforceability of this Agreement in any
manner.
19.5.2 Neither the failure by either Party to insist on any occasion upon the performance of
the terms, conditions and provisions of this Agreement or any obligation there under
nor time or other indulgence granted by a Party to the other Party shall be treated or
deemed as waiver of such breach or acceptance of any variation or the
relinquishment of any such right hereunder.
19.6 Survival
19.6.1 Termination of this Agreement (a) shall not relieve the Developer or the Authority of
any obligations hereunder which expressly or by implication survives Termination
hereof, and (b) except as otherwise provided in any provision of this Agreement
expressly limiting the liability of either Party, shall not relieve either Party of any
obligations or liabilities for loss or damage to the other Party arising out of or caused
by acts or omissions of such Party prior to the effectiveness of such Termination or
arising out of such Termination.
19.7 Amendments
19.7.1 This Agreement and the Schedules together constitute a complete and exclusive
statement of the terms of the Agreement between the Parties on the subject hereof
53
and no amendment or modification hereto shall be valid and effective unless agreed
to by all the Parties hereto and evidenced in writing.
19.8 Notices
19.8.1 Unless otherwise stated, notices to be given under this Agreement including but not
limited to a notice of waiver of any term, breach of any term of this Agreement and
termination of this Agreement, shall be in writing and shall be given by hand
delivery, recognised international courier, mail, telex or facsimile transmission and
delivered or transmitted to the Parties at their respective addresses set forth below:
In the case of the Authority:
The Director General, Department of Tourism
Government of Uttar Pradesh
Paryatan Bhawan
C-13, Vipin Khand, Gomti Nagar
Lucknow: 226 010
In the case of Developer:
________________
Fax No.________________
Or such address, telex number, or facsimile number as may be duly notified by the
respective Parties from time to time, and shall be deemed to have been made or
delivered (i) in the case of any communication made by letter, when delivered by
hand, by recognised international courier or by mail (registered, return receipt
requested) at that address and (ii) in the case of any communication made by telex or
facsimile, when transmitted properly addressed to such telex number or facsimile
number.
19.9 Severability
19.9.1 If for any reason whatever any provision of this Agreement is or becomes invalid,
illegal or unenforceable or is declared by any court of competent jurisdiction or any
other instrumentality to be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions shall not be affected in any manner, and
the Parties will negotiate in good faith with a view to agreeing upon one or more
provisions which may be substituted for such invalid, unenforceable or illegal
provisions, as nearly as is practicable. Provided failure to agree upon any such
provisions shall not be subject to dispute resolution under this Agreement or
otherwise.
19.10 No Partnership
Nothing contained in this Agreement shall be construed or interpreted as constituting
a partnership between the Parties. Neither Party shall have any authority to bind the
other in any manner whatsoever.
19.11 Language
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All notices required to be given under this Agreement and all communications,
documentation and proceedings which are in any way relevant to this Agreement
shall be in writing and in English language.
19.12 Exclusion of implied warranties etc.
This Agreement expressly excludes any warranty, condition or other undertaking
implied at law or by custom or otherwise arising out of any other agreement between
the Parties or any representation by any Party not contained in a binding legal
agreement executed by the Parties.
19.13 Counterparts
This Agreement may be executed in two counterparts, each of which when executed
and delivered shall constitute an original of this Agreement.
IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED AND DELIVERED
THIS AGREEMENT AS OF THE DATE FIRST ABOVE WRITTEN.
Signed on behalf of The Authority
_________________________
(Director General)
Department of Tourism, Government of Uttar
Pradesh
SIGNED, SEALED AND DELIVERED
Developer by the hand of its
Authorized representative
____________________
pursuant to Resolution dated........ of
its Board of Directors.