Project Agreement

Project Agreement
The Minister for Health of the State of Victoria

State
Childrens Health Partnership Pty Ltd as trustee for the CHP Unit Trust
Project Co
The new Royal Children's Hospital Project
The Clayton Utz contact for this document is

Joanna Pugsley on +61 3 9286 6000
Clayton Utz
Lawyers
Level 18 333 Collins Street Melbourne VIC 3000 Australia
DX 38451 333 Collins VIC
T +61 3 9286 6000 F +61 3 9286 8488
www.claytonutz.com
Our reference 155/920/14313/80039503
Legal\104938921.16
Contents
1. Definitions and Interpretation .................................................................................. 1

1.1 Definitions ................................................................................................... 1
1.2 Document or Agreement ........................................................................... 70
1.3 General ..................................................................................................... 70
1.4 Indexation.................................................................................................. 71
1.5 Changes to indexes................................................................................... 72
1.6 Business Day ............................................................................................ 73
1.7 Order of Precedence ................................................................................. 73
2. General .................................................................................................................... 74
2.1 Project Objectives ..................................................................................... 74
2.2 The Term................................................................................................... 75
2.3 Relationship of the State and Project Co ................................................... 75
2.4 Limitation of State's Obligations................................................................. 75
2.5 Project Co Responsible ............................................................................. 76
2.6 Authorisations............................................................................................ 77
2.7 Conditional Authorisations ......................................................................... 77
2.8 Town Planning........................................................................................... 79
2.9 Safety and Minimising Disruption............................................................... 79
2.10 Occupational Health and Safety ................................................................ 80
2.11 Amended Bid Documents .......................................................................... 81
2.12 Qualifications to Agreed Bid Documents.................................................... 82
2.13 Design Brief and DHS Guidelines.............................................................. 82
2.14 Trustee representations and warranties..................................................... 82
2.15 Limitation of liability ................................................................................... 84
2.16 Prices in Agreed Bid Design Documents ................................................... 85
3. Independent Reviewer ............................................................................................ 85
3.1 Appointment of Independent Reviewer ...................................................... 85
3.2 Powers of Independent Reviewer .............................................................. 86
4. State and Project Co Delegates ............................................................................. 87
4.1 Appointment of Project Director ................................................................. 87
4.2 Powers of Project Director ......................................................................... 87
4.3 Function of Project Director ....................................................................... 87
4.4 Appointment of Contract Administrator ...................................................... 87
4.5 Powers of Contract Administrator .............................................................. 88
4.6 Function of Contract Administrator ............................................................ 88
4.7 Authorisation by a State Delegate ............................................................. 88
4.8 Hospital Operator ...................................................................................... 88
4.9 Further Delegations ................................................................................... 89
4.10 Appointment of Project Co Representative ................................................ 89
4.11 Appointment of Development Co-ordinator................................................ 91
4.12 Role of Development Co-ordinator ............................................................ 91
4.13 Warranty as to Project Co Representative and Development
Co-ordinator .............................................................................................. 92
4.14 Project Co not relieved of obligations ........................................................ 92
5. Conditions Precedent ............................................................................................. 92
5.1 Commencement of Agreement.................................................................. 92
5.2 Conditions Precedent Bond ....................................................................... 93
5.3 Conditions Precedent ................................................................................ 94
5.4 State's Benefit ........................................................................................... 95
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5.5 Time for Satisfaction of Conditions Precedent ........................................... 95
5.6 Satisfaction of Conditions Precedent ......................................................... 95
5.7 Failure to Satisfy Conditions Precedent ..................................................... 95
5.8 Demands under Conditions Precedent Bond............................................. 96
5.9 State Authorisations .................................................................................. 96
5.10 Third Party Conditions Precedent .............................................................. 96
6. The Site.................................................................................................................... 96
6.1 Project Co Access Rights before Financial Close ...................................... 96
6.2 Stage 1 Site Licence.................................................................................. 96
6.3 Stage 2 Site Licence.................................................................................. 98
6.4 Grant of Stage 1 Site Lease and Stage 1 Site Sub-Lease ....................... 100
6.5 Grant of Site Lease and Site Sub-Lease.................................................. 101
6.6 Sub-leases and licences for Permitted Commercial Purposes................. 101
6.7 Payment to the Hospital Operator for Retail Precinct............................... 103
7. Contamination....................................................................................................... 104
7.1 Occurrence of Contamination .................................................................. 104
7.2 Contamination Clean Up Program ........................................................... 104
7.3 Compensation for remediation costs ....................................................... 105
7.4 Process for making a claim...................................................................... 106
7.5 Existing Site Contamination - Stage 1 Works........................................... 107
7.6 Existing Site Contamination - Stage 2 Works........................................... 108
7.7 No compensation for remediation costs................................................... 109
7.8 Indemnity by Project Co .......................................................................... 109
7.9 Release by Project Co............................................................................. 110
7.10 General Environmental compliance ......................................................... 110
8. Native Title, Artefacts and Heritage Claims ........................................................ 111
8.1 Native Title .............................................................................................. 111
8.2 Artefacts .................................................................................................. 111
8.3 General Provisions for Native Title, Artefacts and Heritage
Claims ..................................................................................................... 112
9. Assessment of Scope and Risks ......................................................................... 113
9.1 Assessment of Scope of Project and Risks ............................................. 113
9.2 Project Co's own Investigations ............................................................... 113
9.3 Information Provided ............................................................................... 114
9.4 Release by Project Co............................................................................. 115
9.5 No Warranties ......................................................................................... 115
9.6 Site Information Reports.......................................................................... 116
10. Representations and Warranties ......................................................................... 116
10.1 General Representations and Warranties................................................ 116
10.2 Design, Construction and Maintenance Warranties ................................. 119
10.3 Project Co warrants documentation......................................................... 120
10.4 No State Warranties ................................................................................ 121
10.5 Warranties Unaffected............................................................................. 121
10.6 Reliance on Representations and Warranties.......................................... 121
11. Security for Works ................................................................................................ 121
11.1 Performance Bonds................................................................................. 121
11.2 Return of Bonds ...................................................................................... 121
11.3 Time for Provision of Performance Bonds ............................................... 122
11.4 Replacement Construction Bond ............................................................. 122
11.5 Replacement Post Completion Bond ....................................................... 122
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11.6 New Performance Bond on rating downgrade or loss of licence .............. 122
11.7 Project Co to make demand .................................................................... 123
12. Subcontracting ..................................................................................................... 123
12.1 Subcontracting over Term ....................................................................... 123
12.2 Approved Subcontractors and Subcontracts............................................ 123
12.3 Requirements for Subcontracting ............................................................ 124
12.4 Information and Consents........................................................................ 125
12.5 Probity Requirements .............................................................................. 125
12.6 Project Co to Monitor and Comply ........................................................... 126
12.7 Relevant State Delegate.......................................................................... 126
12.8 Where Approvals not Required................................................................ 126
12.9 Replacing Subcontracts during Operating Term ...................................... 127
12.10 Project Co Remains Liable ...................................................................... 127
12.11 Security of Payment Act .......................................................................... 128
13. Subcontractor Compliance with the National Code ........................................... 128
13.1 General ................................................................................................... 128
13.2 Reporting................................................................................................. 129
13.3 Responsibility not affected....................................................................... 129
13.4 Records................................................................................................... 129
13.5 Acknowledgements ................................................................................. 130
13.6 Subcontracting ........................................................................................ 130
13.7 Breach of National Code ......................................................................... 131
14. Employee Transfers.............................................................................................. 131
15. Quality and Quality Review over Term ................................................................ 131

15.1 Developing a Quality Assurance System ................................................. 131
15.2 Quality Assurance ................................................................................... 132
15.3 Access and Inspection by the State......................................................... 132
15.4 No Duty to Review................................................................................... 133
16. Programming ........................................................................................................ 134
16.1 Master Works Program............................................................................ 134
16.2 Works Sub-Programs .............................................................................. 134
16.3 Design Development Sub-Program ......................................................... 134
16.4 Equipment Procurement and Installation Sub-Program ........................... 134
16.5 Training Sub-Program ............................................................................. 135
16.6 Completion Sub-Program ........................................................................ 135
16.7 Further Updating Programs ..................................................................... 135
16.8 Review of Programs ................................................................................ 135
16.9 Project Co Acknowledgment in respect of Programs ............................... 136
17. Project and Site Management and External Infrastructure ................................ 137
17.1 Project Control Group.............................................................................. 137
17.2 Meetings of the Project Control Group..................................................... 137
17.3 General Meetings .................................................................................... 138
17.4 Reports and information .......................................................................... 139
17.5 Communications...................................................................................... 140
17.6 Project Management Plan and Additional Project Management
Documents .............................................................................................. 140
17.7 External Infrastructure ............................................................................. 141
17.8 Co-ordination of Project Co's Infrastructure ............................................. 142
17.9 Access for Governmental Agencies and Utility Services
Providers ................................................................................................. 143
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17.10 Utility Services and Infrastructure ............................................................ 143
17.11 No Compensation.................................................................................... 144
17.12 Inspection and Testing ............................................................................ 144
18. Design and Documentation.................................................................................. 145
18.1 Design ..................................................................................................... 145
18.2 Intellectual Property Licence - Project Co ................................................ 145
18.3 Intellectual Property Licence – State ....................................................... 146
18.4 Moral Rights ............................................................................................ 146
18.5 Moral Rights - State................................................................................. 147
18.6 Warranty and Indemnity .......................................................................... 147
18.7 Third Party Claim..................................................................................... 148
19. Design Development ............................................................................................ 149
19.1 Project Co Acknowledgements................................................................ 149
19.2 Modifications during Design Development Process ................................. 149
19.3 Project Co Warranties ............................................................................. 150
19.4 Design Development Plan ....................................................................... 150
19.5 Design Development Process ................................................................. 150
19.6 Changes to Design Development Process .............................................. 151
19.7 Development Co-ordinator....................................................................... 151
19.8 User Groups............................................................................................ 151
19.9 Design Development Presentations......................................................... 152
19.10 Design Stages ......................................................................................... 153
19.11 Content of Design Documentation to be submitted .................................. 155
19.12 Statements from Project Co..................................................................... 156
19.13 Use of Design Documentation ................................................................. 156
19.14 Design Report ......................................................................................... 157
19.15 Schedule of Accommodation ................................................................... 157
19.16 Monitoring of Design Performance .......................................................... 157
19.17 No Obligation to Review .......................................................................... 157
20. Equipment during the Design and Construction Phase..................................... 158
20.1 Design and Construction Phase .............................................................. 158
20.2 General Requirements ............................................................................ 158
20.3 Equipment Lists....................................................................................... 159
20.4 Selection of Equipment............................................................................ 160
20.5 Group 1 Equipment ................................................................................. 161
20.6 Group 3B Equipment ............................................................................... 161
20.7 Alternative purchase of Group 3B Equipment by the State ...................... 162
20.8 Group 3B Equipment Limit....................................................................... 163
20.9 Transition Equipment............................................................................... 164
20.10 Limitation on Liability in respect of Equipment Modifications.................... 165
20.11 Public Artwork and Equipment Allowances .............................................. 165
21. Plant and Equipment not Fit for the Intended Purposes.................................... 166
22. Construction of Stage 1 Works............................................................................ 167
23. Preparation for Stage 1 Final Completion ........................................................... 167

23.1 Completion Documentation ..................................................................... 167
23.2 Associated Documentation ...................................................................... 168
23.3 Annual Works Plan .................................................................................. 169
23.4 Policy and Procedures Manual documentation ........................................ 169
23.5 Stage 1 Completion Tests and Stage 1 Post Completion Tests............... 169
23.6 Additional Stage 1 Tests.......................................................................... 169
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23.7 Conducting the Completion Tests and Stage 1 Post Completion
Tests ....................................................................................................... 170
24. Stage 1 Technical Completion ............................................................................. 171
24.1 Stage 1 Technical Completion Report ..................................................... 171
24.2 Further Testing ........................................................................................ 171
24.3 Notice of Technical Completion from Project Co...................................... 172
24.4 Certificate of Technical Completion by Independent Reviewer ................ 172
24.5 Outstanding Items ................................................................................... 172
24.6 Effect of Notice ........................................................................................ 173
24.7 Commencement of Hospital Functions .................................................... 173
25. Stage 1 Transitional Period.................................................................................. 173
26. Stage 1 Final Completion ..................................................................................... 175

26.1 Stage 1 Final Completion Report............................................................. 175
26.3 Application............................................................................................... 176
26.4 Requirements of Stage 1 Final Completion ............................................. 176
26.5 No obligation to certify early Stage 1 Final Completion............................ 176
26.6 Late Stage 1 Final Completion ................................................................ 176
27. Stage 2 Works ....................................................................................................... 178
27.1 Commencement of Stage 2 Works .......................................................... 178
27.2 Salvage Rights ........................................................................................ 178
27.3 Implementation of Stage 2 Works............................................................ 180
27.4 Construction Management Plan and Construction Traffic
Management Plan for Stage 2 Works ...................................................... 180
28. Preparation for Stage 2 Completion .................................................................... 181
28.1 Update of Completion Documentation ..................................................... 181
28.2 Stage 2 Completion Tests and Stage 2 Post Completion Tests............... 181
28.3 Additional Stage 2 Tests.......................................................................... 181
28.4 Conducting the Stage 2 Completion Tests and Stage 2 Post
Completion Tests .................................................................................... 182
29. Stage 2 Completion .............................................................................................. 183
29.1 Stage 2 Completion Report ..................................................................... 183
29.3 Stage 2A Completion............................................................................... 184
29.4 Application............................................................................................... 184
29.5 Requirements of Stage 2 Completion ...................................................... 184
29.6 No obligation to certify early Stage 2 Completion .................................... 185
29.7 Late Stage 2 Completion ......................................................................... 185
30. [not disclosed] ...................................................................................................... 186
31. Defects................................................................................................................... 186
32. Time ....................................................................................................................... 187

32.1 Progress and Time for Completion .......................................................... 187
32.2 Monitoring Construction Milestones......................................................... 187
32.3 Delays entitling Claim .............................................................................. 189
32.4 Claim ....................................................................................................... 189
32.5 Conditions Precedent to Extension.......................................................... 189
32.6 Extension of Time.................................................................................... 190
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32.7 Unilateral Extensions............................................................................... 190
32.8 Acceleration Notice.................................................................................. 191
32.9 Instruction to Accelerate .......................................................................... 191
32.10 Partial Acceleration.................................................................................. 191
32.11 Acceleration............................................................................................. 191
32.12 Contractor's Obligation Not Affected........................................................ 192
32.13 Delay Costs ............................................................................................. 192
32.14 Payment of Daily Delay Costs and Acceleration Costs ............................ 193
32.15 Extension of Stage 1 Facility Sunset Date ............................................... 194
32.16 No Extension past Stage 1 Facility Sunset Date...................................... 194
32.17 Share of Savings ..................................................................................... 194
33. Obligations ............................................................................................................ 195
33.1 Timing ..................................................................................................... 195
33.2 Services .................................................................................................. 195
33.3 Performance Monitoring .......................................................................... 196
33.4 Project Co Warranty ................................................................................ 196
33.5 Reports during Operating Term ............................................................... 196
33.6 Asset Management Plan, Five Year Work Plan and Annual
Works Plan.............................................................................................. 196
33.7 Monthly Maintenance Schedules ............................................................. 198
33.8 Facility Management Committee ............................................................. 198
33.9 Coordination of Services with Hospital Functions .................................... 200
33.10 Communications Approach...................................................................... 201
33.11 Unscheduled Building Management Services.......................................... 201
33.12 Final Refurbishment Works ..................................................................... 202
34. Equipment during Operating Term ...................................................................... 202
34.1 Title and Responsibility for Risk............................................................... 202
34.2 Maintenance and Replacement ............................................................... 202
35. Minor Works .......................................................................................................... 203
35.1 Project Co's Acknowledgements and Warranties..................................... 203
35.2 Process for performance of Minor Works................................................. 203
35.3 No duty to Review ................................................................................... 204
35.4 Notice of Minor Works ............................................................................. 205
35.5 Variations to the approved Minor Works Costs ........................................ 205
35.6 Completion .............................................................................................. 206
35.7 General Reporting Obligations ................................................................ 206
35.8 Payment for Minor Works ........................................................................ 206
35.9 Subcontract provisions ............................................................................ 206
35.10 Disputes .................................................................................................. 207
36. Carparking............................................................................................................. 207
36.1 Carparking operations ............................................................................. 207
36.2 Facility Management Subcontractor Direct Deed..................................... 209
36.3 Warranty by Project Co ........................................................................... 210
36.4 Liability for discrepancies......................................................................... 210
36.5 Dispute .................................................................................................... 210
37. Commercial Opportunities and Community Partnerships................................. 210
37.1 Grant of Rights and Exclusivity................................................................ 210
37.2 Best Endeavours to Pursue Commercial Opportunities ........................... 211
37.3 Revenue and Pricing ............................................................................... 211
37.4 [not disclosed] ......................................................................................... 212
37.5 Risk ......................................................................................................... 212
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37.6 Community Partnerships Program [not disclosed] ................................... 212
37.7 Corporate Sponsorship Program ............................................................. 212
38. Waste Collection Services, Utility Services and Medical Gases ....................... 212
38.1 Project Co to provide ............................................................................... 212
38.2 Waste Collection Services, Utility Services and Medical Gases
payments................................................................................................. 212
38.3 Designated Commercial Areas and Carpark............................................ 213
38.4 Energy Risk Sharing................................................................................ 214
39. Repricing Reviewable Services ........................................................................... 215
39.1 Request for Offer to Reprice.................................................................... 215
39.2 No Offer made......................................................................................... 216
39.3 Competitive Tender ................................................................................. 216
39.4 Sufficient Information............................................................................... 217
39.5 Consultation ............................................................................................ 217
39.6 Consents to Probity Investigations........................................................... 217
39.7 Probity Officer and State Delegate .......................................................... 218
39.8 Failure to Agree....................................................................................... 218
39.9 Appointment ............................................................................................ 218
39.10 Continued Provision of Reviewable Services........................................... 219
39.11 Adjustment to Service Payments ............................................................. 219
39.12 No Double Counting ................................................................................ 219
40. Payments for Services.......................................................................................... 219
40.1 Services .................................................................................................. 219
40.2 Reductions for Failure to meet Services Specifications ........................... 219
40.3 Quarterly Service Payments .................................................................... 221
40.4 Adjustments............................................................................................. 221
40.5 Late Payments ........................................................................................ 222
40.6 Over payment.......................................................................................... 222
40.7 Set-off of Moneys Owing ......................................................................... 222
40.8 Goods and Services Tax (GST)............................................................... 223
40.9 Rates and Taxes ..................................................................................... 223
41. Modifications......................................................................................................... 224
41.1 State Modification.................................................................................... 224
41.2 Response by Change Notice ................................................................... 224
41.3 Consultations........................................................................................... 226
41.4 Principles for Costing State Modifications................................................ 226
41.5 Issue of a Modification Order................................................................... 226
41.6 Financing and Payment of State Modifications ........................................ 227
41.7 Governing Principles for Expert Determination ........................................ 227
41.8 Determinations by Independent Expert.................................................... 227
41.9 Competitive Tender ................................................................................. 228
41.10 Ability to Omit Works or Services............................................................. 228
41.11 Cost Savings ........................................................................................... 229
41.12 Project Co Modifications.......................................................................... 229
41.13 State's Determination on Project Co Modification .................................... 229
41.14 Project Co Modification consented to by State......................................... 229
41.15 Limitation on all Modifications.................................................................. 230
41.16 Implementation of Modifications after Completion ................................... 230
41.17 Implementation of Modifications before Completion................................. 231
41.18 Updated Construction Documentation ..................................................... 231
41.19 Notice of Modification .............................................................................. 231
41.20 Retained Buildings Works........................................................................ 232
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42. Refinancing ........................................................................................................... 234
42.1 Consent to Refinancing ........................................................................... 234
42.2 Details of Refinancing.............................................................................. 235
42.3 Refinancing documents ........................................................................... 235
42.4 Sharing of Refinancing Gain.................................................................... 235
42.5 Costs Relating to a Refinancing............................................................... 236
43. Change in Law and Change in Policy.................................................................. 236
43.1 Application to Financial Effects................................................................ 236
43.2 Compensation ......................................................................................... 236
43.3 Process for claiming compensation ......................................................... 236
43.4 Change Notice......................................................................................... 237
43.5 Finalising Estimate .................................................................................. 237
43.6 State's Options on Expert Determination ................................................. 237
43.7 Annual Review of ongoing compensation ................................................ 238
43.8 Project Co to comply and absorb............................................................. 239
44. Force Majeure ....................................................................................................... 239
44.1 Notice ...................................................................................................... 239
44.2 Actions to be taken.................................................................................. 240
44.3 Meeting ................................................................................................... 240
44.4 Suspension of Obligations ....................................................................... 240
44.5 Payments During Force Majeure ............................................................. 240
44.6 Alternative Arrangements ........................................................................ 241
44.7 Force Majeure ceases ............................................................................. 241
44.8 Costs of Force Majeure ........................................................................... 242
45. Intervening Events................................................................................................ 242
45.1 Occurrence of Intervening Event ............................................................. 242
45.2 Relief to Project Co.................................................................................. 242
45.3 Rectification of damage ........................................................................... 243
45.4 Compensable Intervening Events ............................................................ 243
45.5 Payment for Compensable Intervening Events ........................................ 244
45.6 Alternative Arrangements ........................................................................ 244
45.7 Cessation of Intervening Event ................................................................ 244
45.8 Emergency Step-In.................................................................................. 244
45.9 Disputes .................................................................................................. 244
45.10 Claims barred .......................................................................................... 244
46. General Indemnities.............................................................................................. 245
46.1 Indemnity................................................................................................. 245
46.2 Third Party Claim under Indemnity .......................................................... 246
46.3 Release of State...................................................................................... 246
46.4 Terms of Indemnities ............................................................................... 246
46.5 State Holds Benefit on Trust.................................................................... 247
46.6 Liability for Indirect or Consequential Loss .............................................. 247
47. Assumption of Risk .............................................................................................. 247
47.1 Generally................................................................................................. 247
47.2 Performance at Project Co's Expense ..................................................... 247
47.3 Onus of Proof .......................................................................................... 248
48. Insurance Policies ................................................................................................ 248
48.1 Insurances During the Works .................................................................. 248
48.2 Insurances for the Facility........................................................................ 249
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48.3 General Provisions relating to Insurance ................................................. 249
48.4 Payment of Premiums ............................................................................. 249
48.5 Insurers ................................................................................................... 250
48.6 Information .............................................................................................. 250
48.7 No Prejudicial Action ............................................................................... 250
48.8 Terms of Policies..................................................................................... 251
48.9 Remedy of Default................................................................................... 252
48.10 Enforcement ............................................................................................ 252
48.11 Cancellation and Change ........................................................................ 252
48.12 Use of Insurance Proceeds to Repair ...................................................... 252
48.13 Uninsurable risks..................................................................................... 253
49. Casualty Occurrences .......................................................................................... 254
49.1 State rights on a Casualty Occurrence .................................................... 254
49.2 Notice ...................................................................................................... 255
49.3 Meeting ................................................................................................... 255
49.4 Obligation to Repair or Rebuild................................................................ 255
49.5 Cost of Repair or Rebuilding.................................................................... 255
49.6 Consequences of not Rebuilding the Facility ........................................... 256
49.7 Effect of Insurance................................................................................... 257
50. Emergency Events................................................................................................ 257
50.1 State rights in an Emergency................................................................... 257
50.2 Notice ...................................................................................................... 257
50.3 Suspension of rights and obligations ....................................................... 257
50.4 Power of Attorney.................................................................................... 258
50.5 Cease to exercise rights .......................................................................... 258
50.6 Recommencement of Service Provision .................................................. 258
50.7 Payments during Emergency................................................................... 258
50.8 No State Liability or limitation of State rights............................................ 259
51. Default, Major Default and Default Termination Events ..................................... 259
51.1 Default by Project Co............................................................................... 259
51.2 Notice of Default by State ........................................................................ 259
51.3 Project Co to notify State......................................................................... 259
51.4 Major Default Notice ................................................................................ 259
51.5 Project Co must pursue remedy .............................................................. 260
51.6 Extension of Initial Cure Period ............................................................... 260
51.7 Extension of Cure Period......................................................................... 261
51.8 Cure Plan ................................................................................................ 261
51.9 Major Default not remedied ..................................................................... 261
51.10 Major Default unable to be remedied....................................................... 261
51.11 Default Termination Event ....................................................................... 262
51.12 Actions on Default Termination Event...................................................... 262
51.13 Effect of Remedying ................................................................................ 262
51.14 Meaning of Remedy ................................................................................ 262
51.15 Impact of Dispute Resolution Procedures................................................ 263
52. State's Rights to Remedy Default ........................................................................ 263
52.1 State may remedy Default ....................................................................... 263
52.2 Permitted steps ....................................................................................... 263
52.4 Assistance............................................................................................... 264
52.5 Payments ................................................................................................ 264
52.6 No effect on the rights of the State .......................................................... 264
52.7 Cessation ................................................................................................ 264
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53. Termination ........................................................................................................... 264
53.1 Termination for Convenience................................................................... 264
53.2 Other rights to Terminate Early................................................................ 264
53.3 Delivery of Facility and Improvements and Plant and Equipment............. 265
53.4 Warranties as to Handback Condition and Contamination ....................... 265
53.5 State's Rights not affected....................................................................... 266
53.6 Transfer of Other Assets ......................................................................... 266
53.7 Material contracts and employees ........................................................... 267
53.8 Termination and Service Payments ......................................................... 267
53.9 Payments for Facility ............................................................................... 267
53.11 Assistance............................................................................................... 269
54. End of Term Refurbishment Work ....................................................................... 269
54.1 Appointment of Independent Reviewer .................................................... 269
54.2 Inspect and Report .................................................................................. 269
54.3 Disputing Outstanding Matters Notice ..................................................... 269
54.4 Asset Management Plan update.............................................................. 269
54.5 Refurbishment Bond and Escrow Account............................................... 270
54.6 Completion of works by State .................................................................. 270
54.7 Payments out of the Escrow Account ...................................................... 270
54.8 State's rights to draw on Bonds ............................................................... 271
54.9 Release of Bonds .................................................................................... 271
54.10 Replacement of Escrow Monies by Bonds............................................... 271
54.11 Disputes generally................................................................................... 271
55. Dispute Resolution ............................................................................................... 271
55.1 Disputes .................................................................................................. 271
55.2 Notice of Dispute ..................................................................................... 272
55.3 Executive Dispute Resolution .................................................................. 272
55.4 Continuation of Obligations...................................................................... 272
56. Accelerated Dispute Resolution .......................................................................... 272
57. Arbitration ............................................................................................................. 274

57.1 Arbitrator ................................................................................................. 274
57.2 Arbitration................................................................................................ 275
57.3 Proportionate Liability .............................................................................. 276
58. Financial Model..................................................................................................... 276
58.1 Status of the Financial Model .................................................................. 276
58.2 Varying the Financial Model .................................................................... 276
58.3 Principles for Variations to Financial Model ............................................. 277
58.4 Procedures for Variations to Financial Model........................................... 277
58.5 Access to Information .............................................................................. 277
58.6 Auditing the Financial Model.................................................................... 277
58.7 Custody of Financial Model ..................................................................... 278
58.8 Replacement of Escrow Agent ................................................................ 278
59. Information and Audits......................................................................................... 278
59.1 Information .............................................................................................. 278
59.2 Financial Audit......................................................................................... 280
60. Undertakings......................................................................................................... 281
60.1 General ................................................................................................... 281
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60.2 Privacy .................................................................................................... 283
60.3 VIPP Statement....................................................................................... 284
60.4 No signage or Use of Name .................................................................... 284
60.5 Term of undertakings............................................................................... 284
60.6 Trust undertakings................................................................................... 285
61. Change In Control................................................................................................. 285
61.1 Prohibition ............................................................................................... 285
61.2 Notice ...................................................................................................... 286
61.3 Further Information .................................................................................. 286
61.4 State response ........................................................................................ 286
61.5 Factors to consider .................................................................................. 287
61.6 Change in Management and Key Personnel ........................................... 287
62. Probity Events and Investigations....................................................................... 288
62.1 Notice of Probity Event ............................................................................ 288
62.2 Meeting to discuss action ........................................................................ 288
62.3 Unable to Agree ...................................................................................... 288
62.4 Contractor to comply ............................................................................... 288
62.5 Major Default ........................................................................................... 288
62.6 Probity Investigations .............................................................................. 289
63. Confidential Information....................................................................................... 290
63.1 Contractor not to Disclose ....................................................................... 290
63.2 Contractor's Agents, etc. not to Disclose ................................................. 290
63.3 State may Disclose.................................................................................. 291
63.4 Survival on Termination........................................................................... 291
64. Assignment ........................................................................................................... 291
64.1 Project Co ............................................................................................... 291
64.2 State........................................................................................................ 292
64.3 Successors and Assigns ......................................................................... 293
65. Notices................................................................................................................... 293
66. Miscellaneous ....................................................................................................... 293

66.1 Stamp Duty ............................................................................................. 293
66.2 Costs And Expenses ............................................................................... 294
66.3 Interest On Overdue Moneys................................................................... 294
66.4 Set-Off..................................................................................................... 294
66.5 Whole Agreement.................................................................................... 295
66.6 Consents ................................................................................................. 295
66.7 Amendment ............................................................................................. 295
66.8 Survival and Repetition of Representations and Warranties .................... 295
66.9 No Waiver ............................................................................................... 295
66.10 Remedies Cumulative ............................................................................. 295
66.11 Severance ............................................................................................... 296
66.12 Moratorium Legislation ............................................................................ 296
66.13 Governing Law and Jurisdiction............................................................... 296
66.14 Clauses to Survive Termination ............................................................... 296
66.15 Counterparts............................................................................................ 296
66.16 Attorneys ................................................................................................. 296
Legal\104938921.16 xi
This Agreement is made on the day of November 2007
Parties The Honourable Daniel Andrews MP in his capacity as the Minister for
Health of the State of Victoria for and on behalf of the Crown in Right
of the State of Victoria ("State")
Childrens Health Partnership Pty Ltd as trustee for the CHP Unit Trust
ACN 119 703 445 of Level 51, The Rialto, 525 Collins Street, Melbourne,
Victoria, 3000 ("Project Co")
Recitals
A. The State invited proposals to undertake the Works, including provision of the
Facility, and to provide the Services to the State for the Operating Term.
B. Project Co is the successful tenderer.
C. Project Co will finance, design, construct and commission the Facility and the
Designated Commercial Areas on land owned and occupied by the State and will
provide the Facility, including Plant and Equipment, to the State and provide
repair, maintenance and refurbishment and other services to the State over the
Operating Term to enable the Hospital Operator to carry out the Hospital
Functions.
D. For the purposes described in Recital C, Project Co will be granted access rights to
the Site and the Facility pursuant to the Licences, the Stage 1 Site Lease and the
Site Lease.
E. The State will make payments to Project Co in consideration for Project Co

performing the Works and providing the Services, upon the terms and conditions
of this Agreement.
The parties agree
PART 1 THE PRELIMINARIES
1. Definitions and Interpretation

1.1 Definitions
In this Agreement the following words will have the following meanings unless the context
otherwise requires:
"Abatement Amount" in respect of a Quarter for the purposes of Section 1(c) of Schedule 22,
means the aggregate Quality Failure Abatements, Availability Failure Abatements and Incident
Failure Abatements for that Quarter.
"Abatement Credit" has been meaning given to that term in Section 1(c) of Schedule 22.
"Abatement Regime" means the arrangements for monitoring and the methods and
calculations for abating the Service Payments when Project Co does not provide the Services
in accordance with the Services Specifications, as set out in the Services Specifications and the
Payment Schedule (and "Abate" means the act of applying the Abatement Regime).
"Accelerated Dispute Panel" means the panel from which an Independent Expert will be
appointed in accordance with Clause 56 as set out in Schedule 21, Part B.
Legal\104938921.16 1
"Accelerated Dispute Resolution Procedures" means the procedures established under
Clause 56 to hear and resolve Disputes.
"Accreditation Standards" means:
(a) the Australian Council for Health Care Standards, compliance with which from time
to time is required for the accreditation of the Hospital Operator with the Australian
Council for Health Care; and
(b) any other standards for accreditation of the Hospital Operator with any other body
with which the State or the Department requires the Hospital Operator to be
accredited from time to time, which are notified to Project Co, or which are publicly
available and of which a party experienced and competent in the implementation of
the Works or the provision of the Services should reasonably have been aware.
"Actual Electricity Volume" means for each Operating Year the volume of electricity used at
the Facility which is attributable to the Project Co Energy End Uses, as adjusted (if applicable)
under Section 2(c) of Schedule 22.
"Actual Gas Volume" means for each Operating Year the volume of gas used at the Facility
which is attributable to the Project Co Energy End Uses, as adjusted (if applicable) under
Section 3(c) of Schedule 22.
"Actual Greenhouse Emissions" means for each Operating Year the greenhouse emissions
attributable to the Project Co Energy End Uses, comprising:
(a) the Actual Electricity Volume for that Operating Year, multiplied by the
Greenhouse Emissions Electricity Conversion Factor; plus
(b) the Actual Gas Volume for that Operating Year, multiplied by the Greenhouse
Emissions Gas Conversion Factor.
"Additional Stage 1 Tests" has the meaning given in Clause 23.6.
"Additional Stage 2 Tests" has the meaning given in Clause 28.3.
"Additional Tests" means the Additional Stage 1 Tests, and the Additional Stage 2 Tests or,
where the context requires, either one of them.
"Adjustment Note" has the meaning given in the GST Law.
"Agreed Bid Documents" means the:
(a) Bid Design Documentation;
(b) Design Development Plan;
(c) Bid Project Management Plan;
(d) Bid Asset Management Plan; and
(e) Bid Master Works Program,
in each case excluding drawings, excel spreadsheets, programs and pictures and as amended in
accordance with Clause 2.12.
"Agreed Remediation Standard" means the standard of remediation necessary to obtain a

Statement of Environmental Audit under the Environmental Protection Act 1970 (Vic) (which
Legal\104938921.16 2
is unconditional or on conditions acceptable to the Project Director (acting reasonably) for the
use of the Existing Site and the Site each as contemplated by this Agreement and any other
relevant standard expressly identified in the Demolition Specifications.
"Agreement" means Clauses 1 - 66 of this Agreement, Schedules 1-27 and Annexures 1-29
(and for the avoidance of doubt excludes the Attachments).
"Alternative Group 3B Equipment" has the meaning given in Clause 20.6(d)
[not disclosed]
[not disclosed]
"Annual Shared Operating Insurance Cost" or "ASOIC" has the meaning given in
Clause 2(d) of Schedule 10.
"Annual Works Plan" means the plan prepared and submitted in accordance with Clause 23
and updated in accordance with the Services Specifications and which forms part of the Asset
Management Plan subject to Clause 23.3.
"APRA" means the Australian Prudential Regulation Authority.
"Architectural Specifications" means the part of the Design Brief entitled as such in
Annexure 5.
"Artefacts" means all artefacts, fossils, bones, coins, articles of value or antiquity, structures
and other remains or things of scientific, geological, sociological, cultural, historical or
archaeological interest.
"Artwork Allowance" means the amount of $420,000 exclusive of GST.
"Artwork Transfer Activities" means the removal or dismantling, transfer and installation of
nominated artwork identified in the Bid Design Documentation, to be covered by the Artwork
Allowance.
"Asset Management Plan" means the asset replacement, maintenance and refurbishment plan
for the Facility, prepared in accordance with Clause 23.2(a) on the basis of the Bid Asset
Management Plan, and containing the information and documentation required by the Services
Specifications and this Agreement and as further developed, maintained, implemented,
reviewed and revised annually in accordance with Clause 33.6 and the Services Specifications.
"Asset Register" means the register listing all items of Plant and Included Equipment, to be
prepared and submitted in accordance with Clause 23.2(a) and the Services Specifications and
otherwise updated in accordance with the Services Specifications.
"Associate" for the purposes of the definition of "Control", has the same meaning as
"associate" in the Corporations Act and includes a person deemed to be an associate of a
designated body (within the meaning of Section 12 of the Corporations Act and constituted so
that any unit trust is deemed also to be a designated body under Section 12(5) of the
Corporations Act).
"Associated Documentation" means those documents identified as such in Clause 23.2(a).
"Attachments" means attachments 1-4 attached to this Agreement and any attachment to the
Schedules identified as such.
Legal\104938921.16 3
"Authorisation" includes:
(a) any consent, authorisation, registration, filing, agreement, notarisation, certificate,

permission, licence, approval, authority or exemption from, by or with, a
Governmental Agency, judicial body or stock exchange; or
(b) in relation to any act, matter or thing which will be prohibited or restricted in whole
or in part if a Governmental Agency, judicial body or stock exchange intervenes or
acts in any way within a specified period after lodgement, filing, registration or
notification of such act, matter or thing, the expiry of such period without such
intervention or action.
"Authorised Representative" means:
(a) for the State:
(i) a State Delegate;
(ii) a representative authorised by a State Delegate in accordance with

Clause 4.7; and
(iii) the Hospital Operator and any other delegate of the State, where
authorised under Clause 4.9; and
(b) for Project Co, Project Co's Representative, the Development Co-ordinator, the
Chief Executive Officer and such other senior officers of Project Co, details of
whom are provided in writing to the State from time to time by Project Co and
subject to the requirements of this Agreement.
"Availability Failure" means any of the Availability Failure Events and any other Failure
Event that, in the reasonable opinion of the State, results in a part of the Facility being unable
to be used for its intended function.
"Availability Failure Abatement" means, in respect of an Availability Failure, an amount in

dollars calculated in respect of that Availability Failure in accordance with Section 5.2 of
Schedule 3A.
"Availability Failure Event" means:
(a) an event that prevents persons who are entitled to enter, occupy, use or leave a
Functional Unit from doing so safely and conveniently using normal access routes;
(b) an event that prevents or materially impacts on the proper use and reasonable
enjoyment of a Functional Unit relating to:
(i) temperature;
(ii) humidity;
(iii) air flow and quality;
(iv) lighting;
(v) power (essential and non-essential);
(vi) water (availability, temperature, quality, sewerage, stormwater drainage);
(vii) Nurse Call System;
Legal\104938921.16 4
(viii) communications systems;
(ix) medical and other equipment;
(x) Medical Gases and Suction Systems;
(xi) fire protection system; or
(xii) the security systems; or
(c) Systems Failure Event.
"Bank Bill Rate" in relation to a day means:
(a) the rate (which is expressed as a yield per centum per annum to maturity) which is
the buying rate for bank accepted Bills quoted at approximately 10:10 am
(Melbourne time) on page "BBSY" of the Reuters Monitor System on that day,
having a term of 1 month; or
(b) if that rate is no longer available or if, in the reasonable opinion of the State, that
rate becomes an inappropriate rate to benchmark the Overdue Rate for the purposes
of this Agreement or becomes incapable of application, the Bank Bill Rate means
the rate reasonably determined by the State to be the appropriate equivalent rate,
having regard to prevailing market conditions.
"BAS" means the building automation system for the Facility.
"Base Capital" [not disclosed]
"Base Costs" means the actual costs (including Design Base Costs, Construction Base Costs,
Operational Base Costs (as applicable))properly and reasonably incurred by Project Co, the
Builder or the Facility Management Subcontractor (as applicable) as a result of a Change
Compensation Event, excluding:
(a) any Margin; and
(b) the cost of project management services provided by Project Co.
"Best Construction Practices" means construction and demolition works and practices which
are carried out:
(a) in a sound and workmanlike manner, with due care and skill applying nationally
accepted best practice in engineering, construction and management procedures for
hospitals and other major projects;
(b) without limiting paragraph (a), in accordance with Industry Best Practice;
(c) with due expedition and without unreasonable or unnecessary delay;
(d) in a manner which facilitates best building practice and efficient operation;
(e) in accordance with all applicable Laws and Authorisations;
(f) in a manner safe to workers, Hospital Users, the general public and the
Environment;
(g) in a manner that does not impede or otherwise adversely effect the continued
operation of the Existing Facility or the provision of the Hospital Functions; and
Legal\104938921.16 5
(h) with good workmanship and the use of new and high quality fixtures, fittings,
finishes and materials of merchantable quality and free from defects and which will
ensure that the Facility will be Fit for the Intended Purposes.
"Best Operational Practices" means the Industry Best Practice in maintaining and repairing
tertiary hospital facilities providing care for children and by providing the Services:
(a) with due care and skill and applying nationally accepted facilities management
procedures;
(b) with due expedition and without unnecessary or unreasonable delay;
(c) in a manner which facilitates good technical practice and efficient operation of the
Facility and does not impede or otherwise adversely affect the carrying out of the
Hospital Functions by the Hospital Operator;
(d) in accordance with all applicable Laws and Authorisations;
(e) in a manner safe to Hospital Users, the general public and the Environment;
and:
(f) by the employment from time to time of adequate numbers of personnel who are
appropriately experienced and properly trained to provide the Services;
(g) ensuring sufficient resources, plant and equipment and supplies are available to
provide the Services; and
(h) by ensuring regular and proper maintenance (both routine and non-routine) and
prompt repairs to Plant and Included Equipment by suitably experienced and trained
personnel and in accordance with the manufacturers' recommendations and
guidelines.
"Bid Asset Management Plan" means the version of the Asset Management Plan as bid by
Project Co for the Facility as set out in Attachment 3.
"Bid Design Documentation" means the schematic design and other documentation, drawings
and sketch plans as set out in Annexure 4 and the Design Departures Schedule set out in
Annexure 2.
"Bid Project Management Plan" means the detailed plan to project manage the Works as set
out at Attachment 4.
"Bill" has the same meaning as "bill of exchange" in the Bills of Exchange Act 1909 (Cth) (but
does not include a cheque or payment order) and a reference to the drawing or acceptance of,
or other dealing with, a Bill is to be interpreted in accordance with that Act.
"Builder" means, where applicable, the person engaged by Project Co under the Construction
Contract being, at the date of this Agreement, Bovis Lend Lease Pty Ltd or any other person
appointed as builder for the purpose of implementing a Change Compensation Event during
the Operating Term.
"Builder Direct Deed" means the deed so entitled to be entered into between the Builder,
Project Co and the State substantially in the form of Annexure 17.
"Builder Margin" means the fixed percentage that the Builder may charge in accordance with
the Change Compensation Principles to cover all off site overheads and administrative and
corporate and other like costs and profit, but excluding Builder Preliminaries.
Legal\104938921.16 6
"Builder Preliminaries" means the fixed percentage that the Builder may charge in
accordance with the Change Compensation Principles to cover all on-site overheads and other
like costs but excluding scaffolding and craneage.
"Building Management Services" means the services described as such in the Services
Specifications, as Modified (if at all).
"Building Subcontract" means the Construction Contract and any other subcontract the
Builder or any other Building Subcontractor intends to or does enter into with any other
Building Subcontractor.
"Building Subcontractor" means any person to whom Project Co, the Builder or its
subcontractors or any further subcontractor in the same contractual chain intends to or does
subcontract any part of the Works but excludes for the avoidance of doubt, any person to
whom Project Co or its subcontractors or any further subcontractor intends to or does
subcontract any fit-out of the Designated Commercial Areas.
"Business Continuity Plan" means the plan of that name that forms part of the Project
Management Plan and must be updated by Project Co in accordance with Clause 17.6 and the
Project Management Plan Requirements.
"Business Day" means any day which is not a Saturday, Sunday or a gazetted holiday in
Victoria appointed under the Public Holidays Act 1993 (Vic.).
"Carpark" means the carpark to be developed on the Site.
"Carpark Account" has the meaning given in Clause 36.1(g).
"Carpark Direction" has the meaning given in Clause 36.1(b).
"Carparking Operations" has the meaning given in Clause 36.1(a).
"Carpark Revenue" has the meaning given in Clause 36.1(e).
"Carparking Services" means the services described as such in the Services Specifications,
and as Modified (if at all).
"Casualty Occurrence" means:
(a) the loss of, or the loss of use for the Hospital Functions or occupation, of the
Facility or a substantial part of the Facility due to destruction or damage; or
(b) the loss of the Works or a substantial part of the Works due to destruction or
damage.
"Change Compensation Event" has the meaning given to it in the Change Compensation
Principles.
"Change Compensation Principles" means the principles set out in Schedule 5.
"Change in Control" of an Entity means where, at any time;
(i) any person alone or together with any Associate or Associates, ceases to
or commences to, directly or indirectly have Control of the Entity; or
(ii) in the cases of a trust, a change in the manager or trustee of the trust.
Legal\104938921.16 7
"Change in Law" means any one or more of the following which occurs after the Date of this
Agreement, with which Project Co is legally obliged or required by the State to comply, and
which has, or would have a material effect on the Works, the provision of the Services or the
performance of other obligations under this Agreement:
(a) a change in, or repeal of, an existing Law;
(b) the enactment or making of a new Law; or
(c) a change in the way a Law is applied or interpreted as a result of a binding decision
of a court of competent jurisdiction which reverses, overrules or refuses to follow
an earlier binding decision of a court of competent jurisdiction where that earlier
decision existed on the Date of this Agreement.
The expression does not include:
(d) a change in the way a Law is applied or is interpreted as a result of the failure of
Project Co to comply with a Law or a requirement of any Authorisation, or in
response to an illegal act or omission of Project Co;
(e) a change in the Income Tax Assessment Act 1936 (Cth) and the GST Law (or the
introduction of a Tax affecting companies generally);
(f) a change in Law which was not in force at the date of this Agreement but which:
(i) had been published in the Government Gazette by way of bill, draft bill
or draft statutory instrument or otherwise specifically referred to Project
Co prior to the Date of this Agreement;
(ii) was contained or referred to in the Information Documents or any

Project Document; or
(iii) a party experienced and competent in the implementation of the Works

or the provision of the Services would have reasonably foreseen or
anticipated and acted upon and priced prior to the Date of this
Agreement,
in substantially the same form as the change in Law which occurred after the Date
of this Agreement; or
(g) a change in Law relating to Part IVAA (Proportionate Liability) of the Wrongs Act
1958 (Vic) or its application which limits or eliminates the impact of that Part or
any legal risk allocation under Clause 12.10(b), whether or not it has wider
application.
"Change in Management" means a change in:
(a) the Entity which provides management functions to Project Co; or
(b) the senior employees of an Entity which carries out management functions for
Project Co.
"Change in Policy" means any one or more of the following which occurs after the Date of
this Agreement with which Project Co is legally obliged or required by the State to comply,
and which has, or would have a material effect on the Works, the provision of the Services or
the performance of other obligations under this Agreement:
(a) the introduction of a new Health Policy or Quality Standard; or

Legal\104938921.16 8
(b) a change in Health Policies or Quality Standards,
but does not include:
(c) more efficient usage of the Facility;
(d) any change in the Required Operating Hours;
(e) any change to the number of attendances at, separations from, and Hospital
Employees at the Facility from that estimated in this Agreement or the Information
Documents at the Date of this Agreement;
(f) a new Health Policy or Quality Standard or change to a Health Policy or Quality
Standard, that was not in force at the date of this Agreement but which:
(i) had been specifically referred to Project Co prior to the Date of this
Agreement;
(ii) was contained or referred to in the Information Documents or any

Project Document; or
(iii) a party experienced and competent in the implementation of the Works

or the provision of the Services would have reasonably foreseen or
anticipated and acted upon and priced prior to the Date of this
Agreement,
in substantially the same form as in the new Health Policy or Quality Standard or
the change in Health Policy or Quality Standard which was implemented after the
Date of this Agreement; or
(g) a new Health Policy or Quality Standard or a change in Health Policy or Quality
Standard in response to a failure of Project Co to comply with a Health Policy or
Quality Standard, a Law or a requirement of any Authorisation, or in response to an
illegal act or omission of Project Co.
If a Change in Policy is an event set out in paragraphs (c) to (g) and this in turn gives rise to or
causes the State to direct a change in the Design Requirements, Project Co will not be
precluded from relief under Clause 41 of this Agreement in respect of such change to the
Design Requirements that it would otherwise have been entitled to claim but for the operation
of this definition.
"Change Notice" means the notice to be given by Project Co at the times specified in this
Agreement, which must contain:
(a) all the information required for a Change Notice in the relevant circumstances under
the Change Compensation Principles; and
(b) any additional information requested by the State under this Agreement.
"Chief Executive Officer" means the person holding the office from time to time of chief
executive officer or managing director or equivalent of Project Co.
"Claim" includes any claim, proceeding, action, demand or suit (including by way of
contribution or indemnity) at law or in equity including for payment of money (including
damages) or for an extension of time, including by statute (to the extent permitted by Law), in
tort for negligence or otherwise, including negligent misrepresentation or for strict liability or
for restitution.
Legal\104938921.16 9
"Cleaning Standards for Victorian Public Hospitals means the Cleaning Standards for
Victorian Public Hospitals 2000 as revised in February 2005 and any replacement or updated
version of that document.
"Clean-up Notice" means any notice or direction issued under any Law relating to the
Environment requiring a person to take measures to remove, destroy, dispose of, neutralise,
treat, or monitor any Contamination in, on, under or emanating from the Site, the Existing Site
or the Existing Facility.
"Clinical Clean" means the final clinical clean of the Stage 1 Facility and Stage 2 Facility to
be undertaken in accordance the Cleaning Standards for Victorian Public Hospitals, all other
relevant DHS Guidelines, the Transition Plan and the Completion Requirements.
"Code of Practice" means a code of practice defined in, and approved under, the Information
Privacy Act 2000 (Vic).
"Code Monitoring Group" has the same meaning as is given to that term in the
Implementation Guidelines.
"Committee of Management" means the Entity deemed by an Act of Parliament or appointed

under the Crown Land (Reserves) Act 1978 (Vic) to be the Committee of Management with
respect to the Existing Site, the Site or any specified part of the Site (as the context requires).
"Commercial Development Design Requirements" [not disclosed].
"Community Partnerships Trust"[not disclosed].
"Commonwealth" means the Commonwealth of Australia.
"Communications Approach" means Project Co's public relations and community education
approach set out in Annexure 3, as updated in accordance with the terms of this Agreement.
"Communications Working Group" means a group established by the State to deal with
communications issues arising out of or in relation to the Facility, Existing Facility, the
Project, or Hospital Functions.
"Compensable Extension Event" means each of:
(a) (breach by State): breach of any Project Document by the State;
(b) (act or omission): any act or omission of the State or any State Associate in respect
of the Project or at the Site other than any such act or omission which:
(i) subject to paragraphs (d), (k) and (m), and any express provision of this
Agreement to the contrary, is authorised or permitted under a Project
Document and is done or omitted to be done in any time authorised or
permitted under that Project Document; or
(ii) is caused by any act or omission of Project Co; or
(iii) is industrial action;
(c) (Industry wide industrial action): industrial action which directly affects the
Project and at least 5 building sites in Melbourne not under the control of the
Builder and which Project Co demonstrates to be the direct result of an act or
omission of the State, or any State Associate, which is not caused by any breach of
any Project Document or negligent act or omission of Project Co or a Project Co
Associate;
Legal\104938921.16 10
(d) (State Modification): a State Modification at any time up to Stage 1 Final
Completion in respect of the Stage 1 Works and Stage 2 Completion in respect of
the Stage 2 Works;
(e) (Eligible Claim): suspension of any part of the Works, required by Law, court
order, tribunal decision or Direction of the State in respect of an Eligible Claim, or
because of the existence of an Eligible Claim (not resulting from breach of the
obligations of Project Co in dealing with discovered Artefacts);
(f) (Change in Law or Change in Policy): a Change in Law or Change in Policy, the
Financial Effect of which Project Co is, or is entitled to be compensated for under
Clause 43;
(g) (Contamination): the remediation of Contamination for which the State is

responsible to pay any costs of Project Co under Clauses 7.3, 7.5 or 7.6;
(h) (Equipment Modification): an Equipment Modification, provided Project Co has

notified the State of the Equipment Modification in accordance with Clauses 20.4
and 20.10;
(i) (Group 3B Equipment): in relation to the purchase of Group 3B Equipment, any

event described as a Compensable Extension Event under Clause 20;
(j) (State Authorisation): any legal proceedings challenging the validity, of a State
Authorisation, the modification, withdrawal, revocation, suspension or replacement
of a State Authorisation, other than where it is caused by the act or omission of
Project Co or any Project Co Associate;
(k) (delay to commencement of Hospital Functions): a delay to the commencement

of the delivery of the Hospital Functions by the Hospital Operator in accordance
with Clause 24.7, to a date which is later than 7 days after the Date of Stage 1 Final
Completion save to the extent this is due to any act or omission of Project Co;
(l) (Site Information Report): a Site Information Report which is not accurate in
accordance with its terms and the provider of the relevant Site Information Report
has not executed a Site Information Deed Poll in respect of that Site Information
Report;
(m) (Emergency): any act or omission of the State or any State Associate in respect of
the Project or at the Site under Clause 50.1, save to the extent such act or omission
is due to any breach of this Agreement by Project Co or any Force Majeure Event;
and
any other event described as a Compensable Extension Event in this Agreement.
"Compensable Intervening Event" means each of:
(a) (breach by State): breach of any Project Document by the State;
(b) (malicious damage): loss to Project Co which Project Co demonstrates to the

reasonable satisfaction of the State to be caused by the reckless, unlawful or
malicious act or omission of the State or any State Associate, and is not caused by
Project Co or a Project Co Associate or is not the result of a breach of any Project
Document by Project Co or a Project Co Associate;
(c) (Eligible Claim): suspension of any part of the Services, required by Law, court
order, tribunal decision or Direction of the State in respect of an Eligible Claim, or
Legal\104938921.16 11
because of the existence of an Eligible Claim (not resulting from breach of the
obligations of Project Co in dealing with discovered Artefacts);
(d) (Industry wide industrial action): industrial action which directly affects the
Project and at least 5 public hospitals in the greater Melbourne metropolitan area
which Project Co demonstrates to be a direct result of an act or omission of the
State or any State Associate, which is not caused by any breach of any Project
Document or negligent act or omission of Project Co or a Project Co Associate; and
any other event described as a Compensable Intervening Event in this Agreement.
"Completion" means Stage 1 Final Completion and Stage 2 Completion or, where the context
requires, either one of these.
"Completion Criteria" means the Stage 1 Technical Completion Criteria, the Stage 1 Final
Completion Criteria and the Stage 2 Completion Criteria or, where the context requires, any
one of these.
"Completion Manual" means the manual required to be prepared by Project Co to achieve

Completion, prepared in accordance with Clause 23.1 as amended and updated in accordance
with the terms of this Agreement.
"Completion Payment" [not disclosed]
"Completion Plan" means the plan of that name to be prepared by Project Co in accordance
with Clause 23.1 as amended and updated in accordance with the terms of this Agreement.
"Completion Report" means the Completion Report prepared and submitted by Project Co in
accordance with the Completion Requirements which shall comply and be updated in
accordance, with the Completion Requirements and the Completion Manual.
"Completion Requirements" means the requirements set out in Schedule 15.
"Completion Sub-Program" is the program referred to as such in Clause 2 of Schedule 12

which forms part of the Master Works Program prepared and updated in accordance with this
Agreement.
"Completion Tests" means all the Stage 1 Completion Tests and Stage 2 Completion Tests.
"Condition Review Date" means the date five years prior to the Expiry Date.
"Conditions Precedent" means each of the conditions precedent set out in Clause 5.3.
"Conditions Precedent Bond" means a Performance Bond in form and substance acceptable
to the State, issued in favour of the State and with a face value of $5 million, provided on or
before the Date of this Agreement.
"Conditions Precedent Deadline" means 2:00 pm (Melbourne time) on the date that is
20 Business Days after the Date of this Agreement.
"Confidential Information" means, in relation to the State, all Hospital Information and all
other information which is identified as confidential or which Project Co knows or ought to
know is confidential and includes information relating to or within:
(a) any Project Document; or
(b) any document, agreement, discussions or negotiations prior to execution of, or

arising out of any Project Document.
Legal\104938921.16 12
"Connection Point" means the point of connection of the Utility Services specifically for the
Facility to the Utility Service provider's network.
"Construction Base Costs" means the direct cost of the Builder incurred in respect of a
Change Compensation Event including the cost of all subcontractors to the Builder engaged in
respect of the Change Compensation Event and where applicable scaffolding and cranage costs
incurred in respect of the Change Compensation Event but excluding all Builder Preliminaries,
Builder Margin and Design Base Costs and Design Management Fee.
"Construction Bond" means the Performance Bond required under Clause 11.1(a).
"Construction Contract" means the agreement between Project Co and the Builder to
undertake the Stage 1 Works and any part of the Stage 2 Works to the extent set out in that
agreement.
"Construction Documentation" means all Design Documentation submitted to the State in

accordance with Clause 19.10 which is marked "for construction" in accordance with
Clause 19.11 and which has been endorsed or has been deemed to be endorsed by the Project
Director in accordance with the Review Procedures as modified in accordance with the terms
of this Agreement.
"Construction Management Plan" means the plan of that name that forms part of the Project
"Construction Milestone" means each of the Construction Milestones set out in Schedule 13.
"Construction Milestone Date" means for each Construction Milestone, the dates set out in
Schedule 13.
"Construction Traffic Management Plan" means the plan of that name that forms part of the
Project Management Plan and must be updated by Project Co in accordance with Clause 17.6
and the Project Management Plan Requirements.
"Consulting Suites" means the consulting suites included in the Bid Design Documentation to
be developed and operated by Project Co in accordance with Schedule 26.
"Contamination" means pollution of any part of the Site, the Facility, the Existing Site, the
Existing Facility or the Environment so that its condition is as described in Sections 39(1),
41(1) or 45(1) of the Environment Protection Act 1970 (Vic), or as prohibited by that Act and
the emission of noise contrary to Section 46 of that Act.
"Contamination Clean Up Program" has the meaning given to it in Clause 7.2(a).
"Contract Administrator" means the contract administrator appointed pursuant to Clause 4.4
by or on behalf of the State and any person appointed by the State to replace that person.
"Contract Material" means all documents, materials and information the subject of the
licence under Clause 18.2.
"Contract Price" has the meaning given to it in the Construction Contract.
"Contract Year" means:
(a) the period commencing on the Operational Commencement Date and ending on the
next 30 June;
(b) each subsequent 12 calendar month period during the Term; and
Legal\104938921.16 13
(c) the period from the end of the last full Contract Year to the last day of the Term.
"Control" means:
(a) control or influence of, or having the capacity to control or influence the
composition of the board, or decision making, directly or indirectly, in relation to
the financial and operating policies;
(b) being in a position to cast, or control the casting of, more than 20% of the maximum
number of votes that may be cast at a general meeting or unitholders' meeting; or
(c) having a relevant interest (as defined in Section 608 of the Corporations Act) in
more than 20% of the securities (as defined in the Corporations Act and also
including any units in any trust),
of an Entity (whether alone or together with any Associates).
"Controller" means, in relation to a Change in Control of a Relevant Company or the Unit

Trust, the person or body corporate to whom Control will pass.
"Corporations Act" means the Corporations Act 2001 (Cth).
"Cost Saving" has the meaning given in Clause 41.11(a).
"CPI" means the All Groups Consumer Price Index Weighted Average of Eight Capital Cities
(IECC) published quarterly by the Australian Bureau of Statistics or, if Clause 1.5 applies, the
index determined in accordance with that clause.
"CPI Multiplier Annual (C)" at any time means:
(a) the most recently published September Quarter CPI at that time, divided by;
(b) the CPI for the September Quarter 2007.
"CPI Multiplier Annual (OC)" at any time means:
(a) the most recently published CPI at that time for the same calendar quarter as
determined in respect of paragraph (b) below, divided by;
(b) the most recently published CPI immediately prior to the Operational
Commencement Date.
"CPI Multiplier Quarterly (C)" at any time means:
(a) the most recently published CPI at the end of the relevant Quarter, divided by
(b) the CPI for the September Quarter 2007.
"Cure Period" means the Initial Cure Period as extended (if at all) under Clause 51.6 and as
further extended (if at all) under Clause 51.7.
"Cure Plan" means a plan provided by Project Co, including any revisions to that plan, as
accepted by the State under Clause 51.8.
"Date for Completion" means the Date for Stage 1 Final Completion, the Date for Stage 2A
Completion and the Date for Stage 2 Completion, or, where the context requires, the relevant
one of these.
Legal\104938921.16 14
"Date for Stage 1 Final Completion" means 22 December 2011, as adjusted (if at all) under
Clause 32.
"Date for Stage 1 Technical Completion" means 21 September 2011, as adjusted (if at all)
under Clause 32.
"Date for Stage 2 Completion" means 13 December 2014, as adjusted (if at all) under
Clause 32.
"Date for Stage 2A Completion" means 20 August 2013, as adjusted (if at all) under
Clause 32.
"Date of Stage 1 Final Completion" means the date which the Project Director stipulates in
the Stage 1 Final Completion Certificate as the date on which Stage 1 Final Completion is
achieved or as otherwise determined in accordance with this Agreement.
"Date of Stage 1 Technical Completion" means the date which is stipulated by the
Independent Reviewer in the Stage 1 Technical Completion Certificate as the date on which
Stage 1 Technical Completion is achieved or as otherwise determined in accordance with this
Agreement.
"Date of Stage 2 Completion" means the date which the Project Director stipulates in the
Stage 2 Completion Certificate as the date on which Stage 2 Completion is achieved or as
otherwise determined in accordance with this Agreement.
"Date of this Agreement" means the date on which this Agreement is executed by both parties
to this Agreement and if not executed on the same date, the date on which the last of the parties
executes this Agreement.
"Debt" means as at the relevant date:
(a) [not disclosed]
(b) less so much of that amount which has not been amortised but would have been
amortised if:
(i) Project Co had complied with all of its obligations under all of the
Project Documents and the Finance Documents and in accordance with
the Financial Model;
(ii) the full Quarterly Service Payment had been paid in respect of each
Quarter and applied in accordance with the Finance Documents; and
(iii) the Abatement Regime had not been applied;
(c) less all credit balances on all reserve, proceeds or debt service accounts held by or
on behalf of Project Co under the Finance Documents; and
(d) plus accrued interest payable (which, for the avoidance of doubt, does not include
default interest).
"Default" has the meaning given to it in Clause 51.1.
"Default Notice" has the meaning given to it in Clause 51.2.
"Default Termination" means termination of this Agreement following the occurrence of a

Default Termination Event.
Legal\104938921.16 15
"Default Termination Event" means the occurrence of any of the following:
(a) (Project Co Insolvency): an Insolvency Event occurs in respect of Project Co;
(b) (Project Co Change in Control): a Change in Control of Project Co occurs

without the consent of the State under Clause 61;
(c) (Abandonment): Project Co at any time wholly or substantially abandons the

Works or the Services;
(d) (Service Failure): following two Major Default Service Failures in any rolling
three year period which have been cured by Project Co, a further Major Default
Notice is issued during that period in respect of a Major Default Service Failure,
and under the Abatement Regime Project Co accumulates:
(i) a Failure Abatement:
A. of greater than [not disclosed]of the [not disclosed] calculated

in Section 3 of Schedule 3B in each of [not disclosed]
Operating Months in any [not disclosed] consecutive
Operating Months; or
B. over any period of[not disclosed]consecutive Operating

Months, of greater than [not disclosed]of the aggregate of the
[not disclosed]calculated in Section 3 of Schedule 3B in that
[not disclosed] months;
(ii) [not disclosed] Quality Failure Points or more for any [not disclosed]
consecutive Operating Months; or
(iii) [not disclosed] Quality Failure Points or more over any rolling [not
disclosed]Operating Month period;
(e) (late Completion of Works): any of:
(i) Stage 1 Final Completion has not occurred by the Stage 1 Facility Sunset
Date (except where this constitutes a Force Majeure Termination Event);
or
(ii) the Independent Reviewer gives a certificate under Clause 32.2(d) on a

date that is 18 months or more after Financial Close that Stage 1 Final
Completion will not be achieved by the Stage 1 Facility Sunset Date
(except where this constitutes a Force Majeure Termination Event);
(f) (assignment): Project Co assigns, transfers or otherwise disposes of any of its right,
title and interest under any Project Document in breach of Clause 64.1;
(g) (determination of Unit Trust): if the Unit Trust is determined or ceases to exist
(other than as a result of a solvent restructuring that is not undertaken in breach of
this Agreement);
(h) (right of indemnity lost): if Project Co ceases to be entitled to be fully

indemnified against the assets of the Unit Trust;
(i) (uncured Major Default): a Major Default:
(i) which is capable of being cured has not been cured by the expiry of the
Cure Period;
Legal\104938921.16 16
(ii) which is not capable of being cured and Project Co fails to meet any
reasonable requirements of the State in accordance with Clause 51.10; or
(iii) which is not capable of cure and the State determines (acting reasonably)
that there are no reasonable requirements that can be met by Project Co
to overcome the consequences of or compensate the State for the Major
Default.
(j) (Casualty Occurrence): a Casualty Occurrence in circumstances where this is

deemed to be a Default Termination Event under Clause 49.6; or
"Default Termination Payment" means the payment calculated as such in accordance with
the Termination Payments Schedule.
"Defect" means:
(a) any aspect of the design of the Works which is not in accordance with the
requirements of this Agreement; or
(b) any defect, shrinkage, fault, or omission in the Works or the Facility (but excludes
any normal shrinkage of materials unless that shrinkage would have been
accommodated for in accordance with Industry Best Practice).
"Demolition Management Plan" means the plan of that name that forms part of the Project
"Demolition Specification" means the specification of works, activities and standards for
implementing the Demolition Works, as set out in Part D of the Design Brief.
"Demolition Works" means the physical demolition works required to demolish the Existing
Buildings on the Existing Site which must not be undertaken any earlier than 2 months after
the Operational Commencement Date and which includes all work required to ensure that the
Existing Site is ready for reinstatement to parkland including:
(a) demolition of the Existing Facility in accordance with the Demolition Specification;
(b) the demolition and removal of the carpark forming part of the Existing Facility;
(c) the removal of all debris and rubbish from the Existing Site; and
(d) backfilling the Existing Site with suitable soil (in terms of quality and depth) to
accommodate open space parkland (including trees).
"Department" or "DHS" means the Department of Human Services of the State of Victoria.
"Design Base Cost" means the design fees including architects, engineers and other design
consultants fees incurred as a consequence of a Change Compensation Event.
"Design and Construction Documents" means all the documents that Project Co has
prepared, prepares or is required to prepare in accordance with this Agreement to implement
the Works, or otherwise in connection with the Project which Project Co has provided or is
required to provide to the State, including:
(a) the Bid Design Documentation;
(b) Project Management Plan;
Legal\104938921.16 17
(c) the Design Documentation;
(d) the Associated Documentation relevant to the Works;
(e) the Master Works Program;
(f) the Completion Manual; and
(g) Completion Reports.
"Design and Construction Phase" means the period from Financial Close to the Date of
Stage 2 Completion and includes the Stage 1 Works and Stage 2 Works.
"Design Brief" means the:
(a) Design Brief Introduction;
(b) Functional Brief;
(c) Architectural Specifications;
(d) Technical Specifications; and
(e) Demolition Specification,
set out in Annexure 5 and the Equipment List set out in Annexure 11.
"Design Brief Introduction" means the "Design Brief Introduction" set out in Volume 2 of
the Project Brief.
"Design Departures Schedule" means the schedule of departures to the Design Brief which
has been agreed by Project Co and the State, as set out in Annexure 2.
"Design Development Plan" means the design development plan as set out in Attachment 1.
"Design Development Presentations" means the presentations described as such in Clause 19,
to be convened and undertaken in accordance with Clause 19 and the Design Development
Plan.
"Design Development Process" means the process for the development of the design or the
Facility from the Bid Design Documentation through to the Construction Documentation, to be
implemented in accordance with Clause 19 and the Design Development Plan.
"Design Development Sub-Program" means the program referred to as such in Clause 2 of

Schedule 12 which forms part of the Master Works Program prepared and updated in
accordance with this Agreement.
"Design Documentation" means all design documentation (including drawings, specifications,

models, samples and calculations) in computer readable and written form necessary for Project
Co to complete any part of the Works, including the Construction Documentation.
"Design Management Fee" means the fixed amount set out in the Change Compensation
Principles to be applied to the Design Base Costs in accordance with the Change
Compensation Principles.
"Design Report" has the meaning given to it in Clause 19.14.
Legal\104938921.16 18
"Design Requirements" means the requirements for the design of the Facility set out in the
following documents:
(a) the Design Brief;
(b) the Bid Design Documentation; and
(c) the remainder of this Agreement,
subject to Clause 1.7.
"Designated Commercial Areas" [not disclosed]
"Designer" means any consultant retained by the Builder or Project Co in relation to the
design of any part of the Facility.
"Design Stage" means each of the design stages set out in Clause 19.10.
"Design Stage 1 Activities" means those activities set out at Clause 19.10(a) and any
additional activities Project Co decides or the Project Director reasonably requires to be
included as part of the Design Stage 1 Activities.
"Design Stage 2 Activities" means those activities set out at Clause 19.10(c) and any
"Design Stage 3 Activities" means those activities set out at Clause 19.10(e) and any
"Development Co-ordinator" means the person appointed directly by Project Co under

Clause 4.11 to co-ordinate the Works and carry out the functions in Clause 4.12.
"DHS Guidelines" means the guidelines issued by the Department in relation to the design,
construction, commissioning, operation and the provision of services in respect of public
hospitals in Victoria, some of which are described in the Design Requirements.
"Dilapidation Survey" means a comprehensive report on the condition of the Site in the
format required by the Project Director, the aspects of the Existing Site that relate to the
Retained Buildings, all adjacent properties and External Infrastructure and surrounding vacant
areas prepared by an independent, qualified expert, with photographs and such other
information as the Project Director may reasonably require which forms part of the
Construction Management Plan.
"Direct Deed" means a deed substantially in the form of Annexure 19.
"Direction" means any decision, demand, determination, direction, instruction, notice, order,
rejection or requirement.
"Disability Discrimination Act Report" means the report required to be prepared and
submitted by Project Co in accordance with Clause 19.10(d) as part of the Design Report.
"Dispute" has the meaning given to it in Clause 55.1.
"Dispute Panel" means the Chief Executive Officer of Project Co and the Secretary or the
nominee of the Secretary.
Legal\104938921.16 19
"Dispute Resolution Procedures" means the procedures for hearing and resolving Disputes as
set out in Clause 55.
"Distribution" means, whether in cash or in kind:
(a) any distribution by Project Co to its shareholders or Related Bodies Corporate, or

amount available for such distribution, whether by way of dividend, return of
capital, redemption, purchase, buy back, cancellation, payment, repayment, loan,
contractual arrangement, transfer of assets or rights or otherwise in respect of the
share capital of Project Co or any subordinated debt;
(b) the receipt of any other benefit which is not received in the ordinary course of
business or on reasonable commercial terms;
(c) any payment by Project Co to a Related Body Corporate of Project Co; or
(d) the release of any contingent funding liabilities, the amount of such release being
deemed to be a gain for the purpose of any calculation of Refinancing Gain.
"Dollar" or "$" means the lawful currency of the Commonwealth of Australia.
"Draft Lease Plans" means the draft lease plans set out in Annexure 24.
"Draft Schedule of Accommodation" means the table set out in Annexure 6.
"Dust Control Plan" means the plan of that name setting out details of Project Co's
methodology for managing issues relating to dust control, including methods to be undertaken
to protect the Facility and Existing Facility during the Design and Construction Phase, and
which forms part of the Construction Management Plan.
"Early Works" means those preliminary works that Project Co is undertaking prior to
Financial Close in accordance with the Early Works Agreement.
"Early Works Agreement" means the agreement between the parties for the carrying out of
the Early Works dated on or about the Date of this Agreement.
"Early Works Licensed Area" means that part of the Stage 1 Site necessary for undertaking
the Early Works.
"Eligible Claim" means:
(a) a Heritage Claim which is not a Known Heritage Claim; or
(b) a Native Title Claim,
which prevents Project Co from undertaking the Works or providing the Services.
"Emergency" means a circumstance:
(a) where there is the risk of immediate or potential threat to:
(i) health or safety on or relating to the Works, the Facility, the Site, the
Existing Site, the Existing Facility, the Hospital Functions or Hospital
Users; or
(ii) the structural integrity or safety of any part of the Works or the Facility
or any asset of the State or the Hospital Operator in Project Co's or any
other person's control or possession;
Legal\104938921.16 20
(b) where it may be necessary for the State or the Hospital Operator to take immediate
action to discharge statutory duties or powers; or
(c) which constitutes a Casualty Occurrence,
and includes the events categorised as Emergencies in Section 2.1.2 of the Services
Specifications.
"Emergency Procedures Manual" means the manual so named, to be prepared in accordance

with the Services Specifications and this Agreement as part of the Policy and Procedures
Manual.
"Electricity Volume Payment" has the meaning given in Section 2 of Schedule 22.
"Electricity Price" means the average price of electricity paid during the Operating Year for
Energy End Uses, calculated by dividing the total invoiced cost of electricity purchased for
Energy End Uses by the total volume of that electricity for the Operating Year.
"Energy Consumption Index" means the relevant energy consumption index that applies to
the corresponding Functional Area (depending on its Operating Hours) as set out in Section 3
of Schedule 23.
"Energy End Uses" means the uses set out in Section 1 of Schedule 23.
"Energy Targets" means each of the Target Electricity Volume, the Target Gas Volume and
the Target Greenhouse Emissions.
"Energy Volume Risk Payment" has the meaning given in Section 1(a) of Schedule 22.
"Entity" has the meaning given in Section 64A of the Corporations Act, but is also deemed to
include a joint venture within the meaning of Australian Accounting Standard 131
(AASB 131).
"Environment" has the meaning given to that expression in Section 4(1) of the Environment
Protection Act 1970 (Vic.).
"Equipment" means all furniture fittings, fixtures and equipment necessary for the Facility to
be Fit for the Intended Purposes and includes all Group 1, 2 and 3 Equipment and any other
Equipment procured as an Equipment Modification or State Modification.
"Equipment Allowance" means the amount of $500,000 exclusive of GST but inclusive of all
Margins and Modification Allowances.
"Equipment Capital Cost" means the additional Purchase Costs and any related construction
works costs associated with an Equipment Modification, calculated as set out in Clause 3.3 of
the Change Compensation Principles.
"Equipment Lifecycle Cost" means the costs associated with the periodic replacement of
Equipment during the Operating Term.
"Equipment List" means the lists of Equipment in Annexure 11.
"Equipment Maintenance Cost" means the annual or recurrent maintenance costs associated
with an item of Equipment during the Operating Term (excluding Equipment Lifecycle Costs).
"Equipment Modification" means:
(a) in relation to an item of Equipment, other than Group 1 Equipment:
Legal\104938921.16 21
(i) a material change in the specification of that item of Equipment from
that specified in or inferred from the Equipment List save where
(excluding the Group 3B Equipment):
A. the changed Equipment has an equivalent Whole of Life Cost

to the relevant item of Equipment specified in the Equipment
List; or
B. the change is required to ensure the design of the Facility is

consistent with the Design Requirements;
(ii) an increase or decrease in the quantity of an amount of an item of

Equipment for which there is a quantity specified in the Equipment List;
(iii) the addition of a new item of Equipment to the Equipment List;
save where identified in paragraphs (b) of the definitions of Group 2A Equipment or Group 3A
Equipment; or
(b) a change in the purchase of Group 1 Equipment save where the change is required
to ensure the Facility is Fit for the Intended Purposes,
as directed by the Project Director or otherwise in accordance with Clause 20.4. For the
purposes of determining the appropriate specification for that Equipment referred to in Clause
(a)(i) of this definition, the information contained in columns 2, 3, 4 and 5 of the Equipment
List prevail over columns 6, 7 and 8 of the Equipment List.
"Equipment Modification Notice" means a notice given in respect of an Equipment

Modification under Clause 20.4(c) or Clause 20.4(g).
"Equipment Procurement and Installation Sub-Program" is the program referred to as

such in Clause 2 of Schedule 12 which forms part of the Master Works Program and is
prepared and updated in accordance with this Agreement.
"Equipment Specifications" means, for any item of Equipment:
(a) the make, model, reference number and, if required, the manufacturer of such item;
(b) details of the relevant specifications and functionality of each item;
(c) principles for the supply and installation of the item of Equipment; and
(d) where applicable, details of any required interconnectivity with other Facility
systems or Equipment.
"Escrow Account" means the account established by the State for the purposes of Clause 54,
which will:
(a) be with a retail bank, the holder of a current licence issued by APRA and with the
Required Rating;
(b) have as sole signatories persons nominated by the State; and
(c) be interest bearing and on call within 24 hours notice.
"Escrow Agent" means Recall Information Management Pty Ltd ABN 25 004 270 991 or any
replacement escrow agent appointed pursuant to Clause 58.8.
Legal\104938921.16 22
"Escrow Agreement" means the escrow agreement between the State, Project Co and the
Escrow Agent, substantially in the form of Annexure 14.
"Event of Default" means:
(a) a Default;
(b) a Major Default; or
(c) a Default Termination Event,
as the case may be.
"Excluded Equipment" means all Group 3B Equipment and Group 3BT Equipment, all
MCRI Equipment which is also Group 2A Equipment or Group 3A Equipment and all other
Transition Equipment prior to being collected by Project Co from the Existing Facility.
"Excluded Salvageable Items" means all salvageable items in the Existing Facility that have
not been removed by the Hospital Operator in accordance with Clause 27.2(a) excluding the
Included Salvageable Items.
"Excluded Transitional Activities" means those activities that Project Co is not required to
undertake as part of the Transitional Activities, as set out in Annexure 10.
"Existing Buildings" means the buildings known as at the Date of this Agreement as the
Royal Children's Hospital, comprising all the physical infrastructure and all plant and
equipment on the Existing Site and the existing car park, but excludes the Retained Buildings.
"Existing Facility" means the Existing Buildings and the Retained Buildings.
"Existing Site" means that parcel of land reserved under the Crown Land (Reserves) Act 1978
(Vic) for hospital purposes, abutting Royal Park, Flemington Road and Gatehouse Street in
Parkville, on which is situated the Existing Facility, but excludes that part of the land which
forms part of the Stage 2 Site (but only for the period that that part of the land is the subject of
the Stage 2 Site Licence or the Site Lease).
"Existing Site Contamination" means only Contamination in or under the ground of the
Existing Site or within the underground structure of the Existing Buildings (as contemplated
by the drawing set out in Annexure 26) and which is required to be removed as part of the
Works.
"Existing Site Contamination Allowance" means the amount of $3.2 m excluding GST for
the bulk excavation and removal of Existing Site Contamination (excluding the excavation and
removal of soil which is not Contaminated).
"Existing Site Contamination Schedule of Rates" means the Schedule of Rates set out in
Schedule 7.
Legal\104938921.16 23
"Existing Site Remediation Zone (Non-Basement)" means the land shown, and identified as
such in Annexure 25.
"Existing Site Remediation Zone (Stage 2 Basement)" means the land shown, and identified
as such in Annexure 25.
"Existing Stage 2A Site" means that parcel of land identified as such in Annexure 24.
"Expiry Date" means the date on which the Term would have expired but for the occurrence
of an earlier Termination Date.
"Extension Event" means any of:
(a) a Force Majeure Event; or
(b) a Compensable Extension Event.
"External Infrastructure" means infrastructure services which are external to but are to be
provided to the Site and which are used in common with other users, including roads,
footpaths, transport facilities and services and Utility Infrastructure.
"Facility" means the facility to be designed, constructed and commissioned by Project Co in

accordance with the terms of this Agreement including:
(a) the Stage 1 Facility;
(b) the Stage 2 Facility;
(c) the entire physical infrastructure on the Site required to be provided as part of the
Works, including the Carpark and all access roads;
(d) the grounds and gardens within which the Facility is situated on the Site; and
(e) all Plant and Equipment,
but excluding the Designated Commercial Areas save where otherwise expressly stated in this
Agreement.
"Facility Management Committee" means the committee established under Clause 33.8.
"Facility Management Subcontract" means each agreement from time to time between
Project Co and a Facility Management Subcontractor for the provision of any or all
components of the Services.
"Facility Management Subcontractor" means the person engaged from time to time by
Project Co to perform any (or all) components of the Services, being at the date of this
Agreement, Spotless P&F Pty Ltd.
"Facility Management Subcontractor Direct Deed" means each deed so entitled to be

entered into between a Facility Management Subcontractor, Project Co and the State,
substantially in the form of Annexure 18.
"Facility Management Subcontractor Margin" means the fixed percentage that the Facility
Management Subcontractor may charge in accordance with the Change Compensation
Principles to cover all on-site and off site overheads and administration and corporate and
other like costs and profit of the Facility Management Subcontractor.
Legal\104938921.16 24
"Failure Abatement" means, for a Failure Event, the dollar amount calculated in respect of
that Failure Event under the Payment Schedule.
"Failure Event" means a Service Failure that affects one or more Functional Units within the
Facility and is classified as such in the Services Specifications or deemed as such in the
Payment Provisions.
"Failure Event Level" means the level at which a Failure Event is categorised pursuant to
Section 2.1.2 of the Services Specifications.
"Failure Periods" has the meaning given in Section 5.6 of Schedule 3A.
"Fibre Optic Cable" means the fibre optic cable to be installed and connected by Project Co
to the Stage 1 Facility as part of the Stage 1 Works.
"Final Refurbishment Works" means the refurbishment works determined to require

completion after the Condition Review Date by the Independent Reviewer under Clause 54, as
updated in the Asset Management Plan, and includes all other works required to be undertaken
from the Condition Review Date to the Termination Date to comply with the Asset
Management Plan.
"Finance Documents" means each of the documents referred to in Schedule 18 (as amended
in accordance with the Financial Close Adjustment Letter), and any additional, replacement or
amended finance documents for the Project, to which the State has given its consent (where
this is required) in accordance with this Agreement.
"Financial Audit Report" means any report of an auditor appointed by the State pursuant to
Clause 59.2.
"Financial Close" means the date on which all the Conditions Precedent are satisfied or
waived, as set out in a notice given by the Project Director under Clause 5.6.
"Financial Close Adjustment Procedures" means those procedures for adjusting the
Financial Model as set out in Schedule 3C.
"Financial Close Adjustment Letter" means the document referred to in Annexure 9 and
executed by the parties or their Authorised Representatives on or about Financial Close.
"Financial Effect" means, in respect of a Change in Law or Change in Policy, the amount
incurred or payable by Project Co which is or is likely to be increased or decreased from the
relevant amount (if any) assumed in the Financial Model as at the Date of this Agreement, and
as updated from time to time in accordance with this Agreement.
The expression does not include:
(a) any increase in costs arising as a result of a change in the charge made by third
parties for goods or services supplied to Project Co in connection with the provision
of the Services where the change in charge is as a result of a Change in Law or
Change in Policy, unless the goods or services are necessary to provide the Services
and not available from other sources unaffected by the Change in Law or Change in
Policy on comparable terms or without Project Co incurring liabilities to existing
sources by breach of contract;
(b) any change in the price of goods or services if the change occurred under a contract
made, without prior written approval of the State, by or on behalf of Project Co
which allows for the price to change if there is a Change in Law or Change in
Policy;
Legal\104938921.16 25
(c) any change in the cost of Financial Indebtedness obtained by Project Co, as a result
of a Change in Law or Change in Policy affecting the person providing that
Financial Indebtedness; or
(d) any increase in the price of any goods or service, or any other thing, to the extent
that the increase in price is taken into account in the Service Payments (including in
any Indexation adjusting the Service Payments) or under Clause 40.8.
"Financial Guarantor" means an organisation appointed by the Financiers (other than the
Financial Guarantor itself) to provide a financial guarantee in respect of certain of Project Co's
obligations under the Finance Documents, being at the date of this Agreement, Financial
Guaranty Insurance Company.
"Financial Indebtedness" means any indebtedness, present or future, actual or contingent, in

respect of moneys borrowed or raised, or any financial accommodation whatsoever, including
under the Finance Documents, or under or in respect of any Bill, acceptance, Guarantee,
discounting arrangement, redeemable share or stock, finance or capital lease, hire purchase
arrangement, the deferred Purchase Cost of any asset or service, or any obligation to deliver
goods or provide services paid for in advance by any financier or in respect of any financing
transaction.
"Financial Model" means Project Co's audited financial model held in escrow in accordance
with Clause 58, with variations accepted by the State on the date of Financial Close, and as
further varied from time to time in accordance with Clause 58.
"Financier Direct Deed" means the deed so named and made between the State, Project Co
and the party named therein as the Security Trustee, substantially in the form of Annexure 15.
"Financiers" means the financial institutions providing financial accommodation under the
Finance Documents.
"Financing Delay Costs" means the financing delay costs set out in section 2.2 of
Schedule 14.
"First Proposal" means the bid submitted by Project Co in March 2007 in response to the
Project Brief.
"Fit for the Intended Purposes" means that the Facility:
(a) meets the Design Requirements and all other requirements of this Agreement
(including all requirements which can reasonably be inferred from this Agreement)
for the design and construction of the Facility;
(b) is capable of enabling Project Co to provide the Services to the Services

Specifications;
(c) is capable of enabling the Hospital Operator to perform the Hospital Functions in a
quality, safe, efficient and effective manner;
(d) facilitates and does not impair all of the State's requirements for the operation of the
Facility and delivery by the Hospital Operator of the Hospital Functions identified
in this Agreement;
(e) facilitates and does not impair its use as the major tertiary hospital in the State
focused on providing world class care for children; and
Legal\104938921.16 26
(f) meets the Quality Standards and facilitates and does not impair the achievement of
the Project Objectives,
as at the Date of Stage 1 Final Completion for the Stage 1 Facility, the Date of Stage 2A
Completion for the Stage 2A Works and the Date of Stage 2 Completion for the Stage 2
Facility and, by reference to the Laws, Quality Standards, technology, and current and
intended use of the Facility,
as at the Date of Stage 1 Final Completion, Stage 2A Completion or the Date of Stage 2
Completion (as the case may be) and continues to meet the requirements of paragraphs (a) to
(f) as at those dates for the duration of the Term.
"Five Year Work Plan" means the plan so named to be prepared and submitted in accordance
Clause 23.2(a) and updated in accordance with the Services Specifications and containing all
the information required by the Services Specifications.
"Force Majeure Event" means any one or more, or a combination, of the following:
(a) lightning, hurricane, cyclone, earthquake, natural disaster, landslide, tsunami, high
sea inundation, drought declared as a state of emergency or mudslide;
(b) act of a public enemy, war (declared or undeclared), riot, insurrection, civil
commotion, civil rebellion, revolution, militarily usurped power or other like
hostilities, terrorism or act of sabotage;
(c) fire, explosion or flood at or transgressing on to the Site, not caused or contributed
to by Project Co or any Project Co Associate, where Project Co can demonstrate
that all reasonable preventative measures were taken (having regard to the nature of
the Site, the Works and the Facility or the Existing Site and the Existing Facility as
the case may be) to minimise the cause and effect of the fire, explosion or flood on
the performance of its obligations under this Agreement;
(d) ionising radiation, contamination by radioactivity, nuclear, chemical or biological

contamination not caused or contributed to by Project Co or any Project Co
Associate, and not being or arising from Pre-Existing Contamination;
(e) the Governor of Victoria or the Secretary proclaims an emergency under Part VI,
Division 4 of the Health Act 1958 (Vic) which covers the Site, the Existing Facility
or the Facility; and
(f) Utility Services Interruption upstream from a Connection Point (including during
the Transitional Period),
which (either separately or together) directly causes a party to be unable to perform all or a
material part of its obligations (other than an obligation to pay money) under this Agreement,
where the event or its consequences could not have been prevented by the exercise of a
standard of care and diligence consistent with that of a prudent person undertaking the
obligations under this Agreement and where the event or its consequences were not otherwise
caused or contributed to by the failure by Project Co to comply with the Quality Standards or
its other obligations under this Agreement and excludes (without limitation):
(g) all forms of industrial action; and
(h) wet or inclement weather which does not amount to an event referred to in
paragraph (a) of this definition or to flood referred to in paragraph (c) of this
definition.
Legal\104938921.16 27
"Force Majeure Notice" means a notice required to be given under Clause 44.1.
"Force Majeure Termination Event" means a circumstance:
(a) where, after:
(i) Stage 1 Final Completion in respect of the Stage 1 Facility; or
(ii) Stage 2 Completion in respect of the Stage 2 Facility,
a Force Majeure Event which does not constitute a Casualty Occurrence

substantially prevents the performance by Project Co of its material obligations
under this Agreement for a continuous period of 180 days or more, including where
it constitutes a Project Co FM Termination Event;
(b) where:
(i) Stage 1 Final Completion is not achieved by the Stage 1 Facility Sunset
Date; or
(ii) the Independent Reviewer forms the opinion under Clause 32.2(d) that
Stage 1 Final Completion will not be achieved by the Stage 1 Facility
Sunset Date,
and in each case Stage 1 Final Completion would have been achieved by the Stage
1 Facility Sunset Date but for the Force Majeure Event; or
(c) deemed to be a Force Majeure Termination Event under Clause 48.13(c) or

Clause 49.6(a).
"Force Majeure Termination Payment" means the payment calculated as such in accordance
with the Termination Payments Schedule.
"Front Entry Building" means the building housing the main entrance to the Existing Facility
from Flemington Road.
"Functional Area" means each part of the Facility described as a functional area in the
Functional Unit Table.
"Functional Brief" means the part of the Design Brief entitled as such in Annexure 5.
"Functional Unit" means the lowest level of functional unit set out in the Functional Unit
Table.
"Functional Unit Amount" means the dollar amount set out in the relevant table in
Section 5.5 of Schedule 3A based on the Failure Event Level assessed for the Availability
Failure or Incident Failure and corresponding to the Functional Unit Category and Functional
Unit Weighting of the relevant Functional Unit.
"Functional Unit Category" means, in respect of Functional Unit, the functional unit category
set out in the Functional Unit Table in respect of that Functional Unit.
"Functional Unit Table" means the table set out in Schedule 3D.
"Functional Unit Weighting" means, in respect of a Functional Unit, the functional unit
weighting set out in the Functional Unit Table in respect of that Functional Unit.
Legal\104938921.16 28
"Gas Price" means the average price of gas paid during the Operating Year for Energy End
Uses, calculated by dividing the total invoiced cost of gas purchased for Energy End Uses by
the total volume of that gas for the Operating year.
"Gas Volume Payment" has the meaning given in Section 3 of Schedule 22.
"Governmental Agency" means the Crown, any government, or any governmental or semi-
governmental entity or authority, body politic (but excluding any political party), government
department, local government council or statutory authority.
"Green Power" means energy sold by an electricity retailer as green or renewable energy.
"Green Power Price" means for an Operating Year, the average per unit price of purchasing
Green Power from an electricity retailer during that Operating Year.
"Greenhouse Emissions Electricity Conversion Factor" means the factor used to convert
from kWh to kgCO2 (equal to 1.467kgCO2 per kWh).
"Greenhouse Emissions Gas Conversion Factor" means the factor used to convert from GJ
to kgCO2 (equal to 63.6 kgCO2 per GJ).
"Greenhouse Emissions Risk Payment" has the meaning given in Section 4 of Schedule 22.
"Grounds and Gardens Maintenance Services" means the services described as such in the
Services Specifications, and as Modified (if at all).
"Group 1 Equipment" means:
(a) equipment specified in the Design Requirements as such and otherwise as would be
classified as Group 1 Equipment according to general building industry practice;
and
(b) all equipment required to make the Facility Fit for the Intended Purpose which is
reasonably inferred from the Design Requirements, but is not Group 2A Equipment,
Group 3A Equipment or Group 3B Equipment or otherwise specifically identified
in the Equipment List.
"Group 2 Equipment" means Group 2A Equipment and Group 2AT Equipment.
"Group 2A Equipment" means:
(a) the RCH Equipment and MCRI Equipment described and quantified as Group 2A
Equipment in the Equipment List as changed in accordance with the terms of this
Agreement; and
(b) equipment which is required to make the Facility Fit for the Intended Purpose
which is reasonably inferred from the Design Requirements and is of a similar
nature or type to the Equipment identified as Group 2A Equipment in the
Equipment List but is not itself specifically identified in the Equipment List
"Group 2AT Equipment" means the RCH Equipment described and quantified as Group 2AT
Equipment in the Equipment List as changed in accordance with the terms of this Agreement.
"Group 3 Equipment" means Group 3A Equipment, Group 3AT Equipment, Group 3B

Equipment and Group 3BT Equipment.
"Group 3A Equipment" means:
Legal\104938921.16 29
(a) the RCH Equipment and MCRI Equipment described and quantified as Group 3A
Agreement; and
nature or type to the Equipment identified as Group 3A Equipment in the
Equipment List but is not itself specifically identified in the Equipment List.
"Group 3AT Equipment" means the RCH Equipment described and quantified as Group 3AT
Equipment in the Equipment List as changed in accordance with the terms of this Agreement.
"Group 3B Equipment" means:
(a) the RCH Equipment and MCRI Equipment described and quantified as Group 3B
Agreement and save where expressly stated to the contrary in this Agreement
includes all Group 3B ICT Equipment; and
nature or type to the Equipment identified as Group 3B Equipment in the
Equipment List but is not itself specifically identified in the Equipment List.
"Group 3B Equipment Details" means the details and particulars required in accordance with
Clause 20.6(a).
"Group 3BT Equipment" means the RCH Equipment and MCRI Equipment described and
quantified as Group 3BT Equipment in the Equipment List as changed in accordance with the
terms of this Agreement and save where expressly stated to the contrary in this Agreement
includes all Group 3BT ICT Equipment.
"Group 3B ICT Equipment" means the information, communication and technology

elements of the Group 3B Equipment which are identified as Group 3B Equipment in the ICT
Section of Technical Specifications, as changed in accordance with the terms of this
Agreement.
"Group 3BT ICT Equipment" means the ICT elements of the Group 3BT Equipment,
identified as such in the Equipment List, as changed in accordance with the terms of this
Agreement.
"Group 3B Limit" means $49.2m (excluding GST).
"GST" has the meaning given in the GST Law.
"GST Group" has the meaning given in the GST Law.
"GST Law" has the same meaning as in the A New Tax System (Goods and Services) Tax Act
1999 (Cth).
"Guarantee" means any guarantee, indemnity, letter of credit or suretyship or any other
obligation (whatever called and of whatever nature):
(a) to pay, to purchase, to provide funds (whether by the advance of money, the
purchase of, or subscription for, shares or other securities, the purchase of assets,
rights or services or otherwise) for the payment or discharge of;
(b) to indemnify against the consequences of default in the payment of; or

Legal\104938921.16 30
(c) otherwise to be responsible for,
any obligation or indebtedness, any dividend, capital or premium on shares or stock, or the
insolvency of, or the financial condition of, any other person.
"Gymnasium" means the gymnasium to be developed and operated by Project Co in

accordance with Schedule 26.
"Gymnasium Location" means that part of the Designated Commercial Areas identified as
such on the Lease and Licence Plans.
"H Block" means the original 10-level building housing the majority of the clinical services
existing at the Date of this Agreement.
"Handback Condition" means the required condition of the Facility at the end of the Term or
otherwise upon Termination, which is the condition that the Facility:
(a) would be in if the Asset Management Plan complied with this Agreement and had
been fully implemented by Project Co as at that date in accordance with this
Agreement;
(b) would have had, had all the scheduled and unscheduled maintenance been
completed as at that date in accordance with this Agreement; and
(c) would be in such that the Facility (operated and maintained in accordance with
comparable requirements to those in this Agreement and without having to
undertake any major maintenance or Refurbishment Works in relation to major
items of Plant or Equipment or finishes other than as required by this Agreement)
can reasonably be expected to continue to meet the Services Specifications:
(i) where the Termination Date is the Expiry Date, for a minimum of
5 years after the Termination Date; and
(ii) where the Termination Date is earlier than the Expiry Date, for the
period from the Termination Date to the Expiry Date plus 5 years.
"Handover Package" means the package so named to be prepared and submitted under
Clause 23.2(a), as updated in accordance with, and containing the information required by, the
Services Specifications.
"Health Policy" means any policy, guideline, standard, practice or procedure of the
Department or the State in connection with the construction, operation, management and
maintenance of public hospitals, any Accreditation Standards, or any amendment or
substitution of any of them, which are notified to Project Co (other than where such policy,
guideline, standard, practice, procedure or Accreditation Standard is publicly available and of
which a party experienced and competent in the implementation of the Works or the provision
of the Services should reasonably have been aware), with which Project Co is required, or is
instructed by the State, to comply, and which directly or indirectly affects the performance and
observance by Project Co of its obligations under this Agreement, which:
(a) is in force as at the date of this Agreement; or
(b) comes into force at any time after the date of this Agreement,
unless the State (in its absolute discretion) gives a written notice to Project Co directing that
the relevant matter does not constitute a Health Policy for the purposes of this Agreement.
Legal\104938921.16 31
"Health Privacy Principles" means the Health Privacy Principles set out in the Health
Records Act.
"Health Records Act" means the Health Records Act 2001 (Vic).
"Help Desk Services" means the Building Management Services described as such in the
Services Specifications and as Modified (if at all).
"Heritage Claim" means a claim made under any Law for the protection, preservation or
removal of any Artefact.
"Hold Co" means Childrens Health Partnership Holdings Pty Ltd ACN 127 920 496 in its
capacity as trustee for the CHP Holdings Unit Trust.
"Hospital Employees" means any person employed by the Hospital Operator or contracted by
the Hospital Operator to perform work or services in connection with the Hospital Functions,
including all qualified, unqualified and trainee medical staff.
"Hospital Functions" means all the clinical, clinical support, research, educational, training
and non-clinical support services and the Shared Retail Purposes and RCH Retail Purposes
which the Hospital Operator, MCRI, the University of Melbourne, the State or the State
Associates or any person appointed by the State to exploit the Shared Retail Purposes or RCH
Retail Purposes will undertake in the Facility during the Operating Term which:
(a) are specified or reasonably inferred from this Agreement; or
(b) as at the Date of Stage 1 Final Completion, a major tertiary hospital of a type and
quality contemplated by the Design Requirements focused on providing world class
care for children would reasonably be expected to provide over the Operating Term,
and any ancillary services incidental to or otherwise in support of such services.
"Hospital Information" means information:
(a) relating in any way to the security of the Facility or the delivery of Hospital
Functions; and
(b) which Project Co is required to keep confidential in complying with the Information
Privacy Principles, any applicable Code of Practice, the Health Records Act and the
Health Privacy Principles.
"Hospital Invitee" means any patient being treated at the Facility or visitors to the Facility in
connection with the Hospital Functions. The expression does not include the State, any State
Associate, Project Co or any Project Co Associate.
"Hospital Operator" means the Royal Children's Hospital ABN 35 655 720 546, a body
corporate established under the Health Services Act 1988 (Vic), or any replacement appointed
from time to time pursuant to Clause 4.8 by the State to deliver the Hospital Functions.
"Hospital Operator Energy End Uses" means the energy uses set out in Section 1 of
Schedule 23 in the column entitled "Hospital Operator Energy End Uses".
[not disclosed]
"Hospital Operator's Representatives" means those persons appointed from time to time to
represent the Hospital Operator and notified in writing to Project Co and the Contract
Administrator in accordance with Section 2.5.2 of the Services Specifications.
Legal\104938921.16 32
"Hospital Users" means:
(a) Hospital Invitees;
(b) employees, contractors, subcontractors and consultants of Project Co or of

Subcontractors, employed or contracted in relation to the Facility or delivery of the
Services;
(c) the Hospital Operator, the Hospital Employees, the State and the State's Employees;
(d) members of professional groups, medical practitioners and researchers having

business at the Facility;
(e) any other visitor to the Facility for any purpose (including users of the Carpark);
and
(f) any person who has dealings with the Hospital Operator in relation to the Facility.
"Hotel" means the Hotel to be developed and operated by Project Co in accordance with
Schedule 26.
"Hotel Location" means that part of the Designated Commercial Areas identified as such on
the Lease and Licence Plans.
"Implementation Guidelines" means the Australian Government Implementation Guidelines

for the National Code of Practice for the Construction Industry, reissued June 2006, published
by the Department of Employment and Workplace Relations.
"Incident Failure" means any Failure Event that is not an Availability Failure.
"Incident Failure Abatement" means, in respect of an Incident Failure, an amount in dollars

calculated in respect of that Incident Failure in accordance with Section 5.4 of Schedule 3A.
"Incident Failure Sum" has the meaning given in Section 5.4 of Schedule 3A.
"Included Equipment" means all Equipment, except for the Excluded Equipment.
"Included Salvageable Items" are the following items contained in the Existing Buildings:
(a) copper wiring;
(b) steel recycling;
(c) recycled concrete;
(d) existing electrical switchgear;
(e) aluminium windows and doors; and
(f) the existing MCRI air cooled chiller.
"Incorporated Document" means a document relating to the use, development and protection
of land and incorporated in the Melbourne Planning Scheme pursuant to Section 10 of the
Planning and Environment Act 1987 (Vic).
"Independent Expert" means a person with suitable expertise and experience required to
determine a Dispute having regard to the nature of the Dispute, appointed pursuant to
Clause 56, who may be the Independent Reviewer if, at the relevant time, an Independent
Legal\104938921.16 33
Reviewer is then appointed and he or she is agreed by the parties to have the expertise and
experience suitable to determine the Dispute.
"Independent Reviewer" means the person appointed from time to time as the Independent
Reviewer pursuant to Clause 3.1.
"Independent Reviewer Agreement" means the agreement appointing the Independent

Reviewer, between the Independent Reviewer, the State and Project Co, substantially in the
form of Annexure 21.
"Indexed" has the meaning given in Clause 1.4.
"Indirect or Consequential Loss" means any loss of opportunity, profit, anticipated profit,
business, business opportunities or revenue, any failure to realise anticipated savings or any
penalties payable under agreements other than this Agreement.
"Industry Best Practice" means exercising that degree of skill, care, diligence, efficiency,
prudence and foresight which would be expected from a skilled and experienced person when
working on projects of commensurate type, size and value to the Project.
"Information Documents" mean the Invitation for Expressions of Interest and the Project
Brief.
"Information Privacy Principles" means the Information Privacy Principles set out in the
Information Privacy Act 2000 (Vic).
"Initial Cure Period" has the meaning given in Clause 51.4.
"Input Tax Credit" has the meaning given by the GST Law and a reference to an Input Tax
Credit to which a party is entitled includes an Input Tax Credit for an acquisition made by that
party but to which another member of the same GST Group is entitled under the GST Law.
"Insolvency Event" means the occurrence of any of the following events:
(a) (receiver): a liquidator, administrator, trustee in bankruptcy, receiver or receiver

and manager or similar officer is appointed in respect of any of the assets of a
corporation;
(b) (execution): a distress, attachment or other execution is levied or enforced upon or

against any assets of a corporation and in the case of a writ of execution or other
order or process requiring payment, it is not withdrawn or dismissed within
10 Business Days;
(c) (winding up): an order is made for the administration, dissolution or winding up of
a corporation, or a resolution is passed for the administration or winding up of the
corporation other than for the purposes of a solvent reconstruction or amalgamation
on terms approved by the State;
(d) (cessation of business): a corporation ceases, or threatens to cease, to carry on its

business or payment of its debts generally, other than for the purposes of a solvent
reconstruction or amalgamation on terms approved by the State;
(e) (arrangement or composition): a corporation enters, or resolves to enter into any

scheme of arrangement or composition with its creditors generally, or any class of
its creditors, other than for the purposes of a solvent reconstruction or
amalgamation on terms approved by the State;
Legal\104938921.16 34
(f) (inspector): an inspector is appointed under any companies legislation to
investigate all or any part of the affairs of a corporation in relation to a possible
contravention by a corporation of that legislation and, in the reasonable opinion of
the State, the appointment may have a Material Adverse Effect; or
(g) (insolvency): a corporation is unable to pay its debts when they fall due, or is
deemed unable to pay its debts under any applicable legislation (other than as a
result of a failure to pay a debt or claim which is the subject of a good faith
dispute).
"Insurance Policy" means any policy or contract for insurance which is required to be effected
pursuant to Clause 48.
"Intellectual Property Rights" means all statutory and other proprietary rights (save for any
Moral Rights) in respect of inventions, innovations, patents, utility models, designs, circuit
layouts, mask rights, copyrights (including future copyrights), confidential information, trade
secrets, know-how, trade marks and all other rights in respect of intellectual property as
defined in Article 2 of the Convention establishing the World Intellectual Property
Organisation of July 1967.
"Intervening Event" means:
(a) (Compensable Intervening Event): a Compensable Intervening Event;
(b) (act or omission): an act or omission by the State, or any State Associate or any
person (other than Project Co or a Project Co Associate) appointed by the State to
exploit the Shared Retail Purposes or the RCH Retail Purposes (other than in
circumstances where Project Co has breached Clause 37) which is not:
(i) in performing the Hospital Functions; or
(ii) a reasonably foreseeable consequence of the performance of the Hospital

Functions,
and which prevents, hinders or disrupts Project Co in the implementation of the

Project in accordance with the Project Documents;
(c) (Emergency): an act or omission of the State during the exercise of the State's
rights under Clause 50.1 during an Emergency which prevents, hinders or disrupts
Project Co in the implementation of the Project in accordance with the Project
Documents provided that the Emergency was not caused by a failure of Project Co
to provide the Services in accordance with the Services Specifications or a breach
of this Agreement by Project Co;
(d) (Fibre Optic Cable): a defect in the transmission of data to and from the Site via
the Fibre Optic Cable other than as a consequence of an act or omission of Project
Co or any Project Co Associate;
(e) (third party): works or services performed by the State or by a third party engaged
by the State in accordance with Clauses 34.2(e), 35.2(d)(ii), 41.10(a), 43.6(c)(i),
44.6, 45.6 or 50.1 which prevent, hinder or disrupt Project Co in the implementation
of the Project in accordance with the Project Documents save where the State is
required to perform or engage a third party to perform such works or services as a
consequence of an Event of Default;
Legal\104938921.16 35
(f) (Transition Equipment): Transition Equipment that is not fit for its purpose prior
to transfer to the Facility by Project Co which is transferred to and used in the
Facility;
(g) (Lease area): failure by the State to procure access to or occupation of:
(i) those Grounds and Gardens (as set out in the Lease and Licence Plans);
and
(ii) areas of the Facility,
that are outside of the Site but in respect of which Project Co is required to perform
the Works or Services;
(h) (Change in Law or Change in Policy): a Change in Law or a Change in Policy,

the Financial Effect of which Project Co is, or is entitled to be compensated under
Clause 43; or
(i) (infrastructure works or services): works or services performed in relation to

External Infrastructure or Utility Infrastructure (other than by, at the request, or due
to a breach of Project Co or a Project Co Associate) where such works or services
do not meet the requirements of this Agreement or, where such works or services
are required to be performed, they are not performed, and Project Co has taken all
proper and reasonable steps to prevent or minimise the occurrence and impact of
such circumstances.
but does not include any of the following which arise out of paragraphs (a) to (h), whether or
not they impact on delivery, or the costs of delivery, of the Services:
(j) save in respect of paragraphs (c) and (e), the exercise by the State or a State
Delegate of any right, power or function under a Project Document in accordance
with the terms of that Project Document (except for works or services performed by
the State or any State Associate in accordance with Clauses 34.2(e), 35.2(d)(ii),
41.10(a), 43.6(c)(i), 44.6, 45.6, 50.1 or 52.1 );
(k) the delivery of the Hospital Functions;
(l) a Force Majeure Event;
(m) a Modification;
(n) the implementation of any Minor Works;
(o) an Extension Event;
(p) the implementation of any Law;
(q) any change in the Required Operating Hours;
(r) more efficient usage of the Facility;
(s) any change to the number of attendances at, separations from, and Hospital
Employees at the Facility from that estimated in this Agreement or the Information
Documents; and
(t) any reasonable direction issued by the Hospital Operator during the Operating Term
regarding measures to be undertaken by Project Co in carrying out the Services to
mitigate disruption to the Hospital Functions.
Legal\104938921.16 36
For the avoidance of doubt, if an event is an event which falls within one or more of
paragraphs (a) to (i) and gives rise to or causes an event listed in (j) to (t) Project Co will not
be precluded from claiming relief under this Agreement.
"Invoice" means an invoice for payment in the form agreed between the parties (each acting
reasonably) after Financial Close which must contain a full break down of all elements of the
Quarterly Service Payments claimed by Project Co including a full break down of the
calculation of Availability Failures and Quality Failures and any other items reasonably
requested by the State Delegate.
"ISR Insurances" means the insurances described in Clause 48.2.
"Key Personnel" means the persons listed in Schedule 17 who are to carry out the roles and
functions described in that Schedule, as amended from time to time in accordance with
Clause 61.6(c).
"Known Heritage Claim" means a Heritage Claim in respect of the Site of which Project Co
is aware or of which a prudent, competent and experienced contractor, service provider and
project manager should have been aware if it had done those things which Project Co warrants
it has done under Clause 9.1 but does not include any claim made in respect of the matters that
are the subject of the Rawson Letter.
"Known Pre-Existing Contamination" means the state of Contamination of the Site, and the
Existing Facility at the Date of this Agreement, of which Project Co is aware or ought
reasonably to have been aware if Project Co had done those things which Project Co warrants
that it has done under Clause 9.1 and taken actions of the nature described in Clause 9.2 that a
prudent, competent and experienced contractor, would have taken, including as described in
the Site Information Reports, but excluding Existing Site Contamination.
"Law" means:
(a) any statute, regulation or subordinate legislation of the Commonwealth of Australia,

the State of Victoria or local or other government in force in the State of Victoria,
irrespective of where enacted; and
(b) the common law (including the principles of equity) as applied from time to time in
the State of Victoria.
"Leases" means the Stage 1 Site Lease, Stage 1 Site Sub-Lease, Site Lease and Site Sub-
Lease.
"Lease and Licence Plans" means the plans set out in Annexure 24 showing the Stage 1 Site,
Stage 2A Site, the Stage 2 Site and the Site.
"Liability" includes any debt, obligation, cost, (including legal costs, deductibles or increased
premiums) expense, loss, damage, compensation, charge or liability of any kind, actual,
prospective or contingent and whether or not currently ascertainable and whether arising under
or for breach of contract, in tort (including negligence), restitution, pursuant to statute or
otherwise at Law or in equity.
"Licence" means each of the Stage 1 Site Licence and the Stage 2 Site Licence or, where the
context requires, either one of these.
"Liquidation" includes provisional liquidation, administration, compromise, arrangement,

merger, amalgamation, reconstruction, winding up and dissolution, scheme, assignment for the
benefit of creditors, arrangement or compromise with creditors, bankruptcy or death.
Legal\104938921.16 37
"List of Stage 1 Outstanding Items" has the meaning given in Clause 24.5(a).
"List of Stage 2 Outstanding Items" has the meaning given in Clause 29.2.
"Lodgement Date" means the date which is not later than 10 Business Days:
(a) after the end of each calendar month, in respect of the Design and Construction
Phase; and
(b) after the end of each Operating Month in respect of the Operating Term.
"LPI" means the current index of ABS: 6345.0 Labour Price Index "Total Hourly Rate of Pay
Excluding Bonuses" Health and Community Services (Public), published by the Australian
Bureau of Statistics.
"LPI Multiplier Quarterly" at any time means:
(a) the most recently published LPI at the end of the relevant Quarter, divided by
(b) the LPI for the September Quarter 2007.
"Major Default" means any of the following:
(a) (Insolvency other than Project Co): an Insolvency Event occurs in respect of a
Relevant Company other than Project Co;
(b) (Change in Control): failure by Project Co to comply with its obligations under
Clause 61.1(c) in respect of a Change in Control of a Relevant Company;
(c) (Change in Management): a Change in Management which is deemed to be a

Major Default under Clause 61.6 occurs;
(d) (Financial Audit Report): a Financial Audit Report discloses fraudulent, false,
misleading or negligent reporting by Project Co in respect of any financial
statements, Payment Statements or Invoices or other books or records of Project Co;
(e) (untrue statements): any representation or warranty or statement made by Project

Co to the State in any Project Document proves to have been untrue in any material
respect and the effect of this is that circumstances exist which, in the reasonable
opinion of the State, have, or would have a Material Adverse Effect;
(f) (late Stage 1 Completion): Stage 1 Final Completion has not occurred by the Date
for Stage 1 Final Completion where this is prior to the Stage 1 Facility Sunset Date;
(g) (late Stage 2 Completion): Stage 2 Completion has not occurred by the Date for
Stage 2 Completion;
(h) (late Stage 2A Completion): Stage 2A Completion has not occurred by the Date
for Stage 2A Completion.
(i) (Stage 1 Delay): the Independent Reviewer gives a certificate under Clause 32.2(d)
on a date that is 18 months or more after Financial Close that Stage 1 Final
Completion will not be achieved by the Date for Stage 1 Final Completion;
(j) (Stage 2 Delay): the Independent Reviewer gives a certificate under Clause 32.2(d)
on a date that is 6 months or more after Stage 1 Final Completion that Stage 2
Completion will not be achieved by the Date for Stage 2 Completion;
Legal\104938921.16 38
(k) (cessation of Services): there is a cessation of or a threat to cease, or it becomes
unlawful for Project Co to continue the provision of the Services (other than as a
result of a Force Majeure Event or Intervening Event for which Project Co is
entitled to suspension of performance under Clause 44 or Clause 45 respectively) or
any other event for which Project Co is expressly entitled to suspension of
performance under this Agreement);
(l) (Subcontractors): a breach of Clause 12.3, 12.6(d), 12.6(e) and 12.11;
(m) (commercial opportunities): a breach by Project Co of its obligations under Clause

6.7, 37 or Schedule 26 clauses 41, 62.4 or in the reasonable opinion of the State
there has been persistent or repeated failure by Project Co to comply with its
obligations under clause 33 of Schedule 26 of this Agreement;
(n) (Insurances): a material breach by Project Co of its obligations under Clause 48;
(o) (Casualty Occurrence): a breach by Project Co of its repair and rebuilding

obligations under Clause 49;
(p) (Probity Event): Project Co fails to comply with Clause 62.4 in relation to a
Probity Event.
(q) (Finance default): any event that would restrict or cancel Project Co's ability to
obtain or continue to have available funding under the Finance Documents.
(r) (Refinancing): a failure by Project Co to inform or obtain the prior consent of the
State (as the case may be) of a Refinancing or distribute to the State its required
share of any Refinancing Gain within 20 Business Days of the completion of the
related Refinancing;
(s) (other Default): any Default which has not been remedied within 20 Business Days
of Project Co receiving a Default Notice;
(t) (persistent breach):
(i) there have been 5 or more Defaults in the previous 12 months (other than
in respect of a Service Failure), for each of which a Default Notice has
been served; or
(ii) in the reasonable opinion of the State there has been a persistent or
repeated failure to comply with the obligations of Project Co under this
Agreement (other than in respect of a Service Failure) and a Default
Notice served in respect of any such breach has stated the State's opinion
to this effect,
and such Default is not a Default Termination Event; or
(u) (Service Failure): there are Service Failures, and under the Abatement Regime
Project Co accumulates:
(i) a Failure Abatement:
A. of greater than [not disclosed]of the [not disclosed] calculated

in Section 3 of Schedule 3B in each of [not disclosed] months
in any [not disclosed]consecutive months; or
B. over any period of [not disclosed] consecutive months, of

greater than 2[not disclosed]of the average of the [not
Legal\104938921.16 39
disclosed] calculated in Section 3 of Schedule 3B in that[not
disclosed]months;
(ii) [not disclosed] or more Quality Failure Points for any[not disclosed]
consecutive months; or
(iii) [not disclosed] or more Quality Failure Points or more over any
rolling[not disclosed] month period
provided that, if any Major Default occurs under this paragraph (t), then for the
purposes of this paragraph (t) only, Project Co's accumulated Failure Abatements
and Quality Failure Points will be deemed to reset to zero from the date of the
relevant Major Default Notice;
(v) (vitiation of Project Documents) all or any material part of any Project Document:
(i) ceases to have effect, otherwise than in accordance with its terms as at
the Date of this Agreement;
(ii) to which the State is not a party is terminated otherwise than in

accordance with its terms (and the terms of any other Project Document
applicable to it) as at the date of execution (as amended in any manner
permitted by this Agreement); or
(iii) is or becomes void, voidable, illegal, invalid or unenforceable (other than

by reason only of a party waiving any of its rights) or of limited force
and effect or the performance of any such provision becomes illegal,
and if the Project Document is one to which the State is not a party, this would, in
the reasonable opinion of the State, have a Material Adverse Effect; or
(w) (National Code); any breach of Clause 13.
"Major Default Notice" means a notice given by the State or a State Delegate under
Clause 51.4.
"Major Default Service Failure" means an event described in paragraph (u) of the definition
of "Major Default".
"Margin" means the Project Co Margin, Builder Margin, Builder Preliminaries and Facility
Management Subcontractor Margin or, where the context requires, any one of these.
"Master Works Program" means the program of which the version as bid by Project Co is set
out at Attachment 2, and all Sub-Programs, as prepared, submitted and updated in accordance
with Clause 16, and the Programming Requirements.
"Material Adverse Effect" means a material adverse effect on:
(a) the ability of Project Co to perform and observe its obligations under any Project
Document;
(b) the rights of the State under any Project Document, or the ability or capacity of the
State to exercise its rights or perform its obligations under a Project Document; or
(c) the performance of, or the cost of delivering, the Hospital Functions.
"MCRI" means the Murdoch Children's Research Institute ABN 21 006 566 972.
Legal\104938921.16 40
"MCRI Additional Space" means approximately 9,600 sqm gross departmental area of newly
built space in the Facility and 100 Carpark spaces in accordance with the Design
Requirements.
"MCRI Associate" means the University and any officers, agents, advisers, consultants,
contractors and employees of MCRI or the University to the extent they operate from the Site
or the Existing Site.
"MCRI Core Space" means approximately 10,400 sqm gross departmental area to be
occupied by MCRI that will be funded by the State and will comprise space in the newly built
part of the Facility and space that will be occupied by MCRI in the Retained Buildings.
"MCRI Facility" means approximately 20,000 sqm gross departmental area in the Facility
allocated to the activities of the MCRI consisting of the MCRI Core Space and the MCRI
Additional Space.
"MCRI Equipment" means all the furniture, fittings and fixtures required to be procured,
delivered, installed, located (or relocated from the Existing Facility), commissioned and tested
(where applicable) in the MCRI Facility as identified in the Equipment List.
"Medical Gases" means oxygen, nitrous oxide, medical breathing air, carbon dioxide, medical
suction (including suction systems), medical compressed air and any other gas or medical air
to be used by the Hospital Operator in carrying out the Hospital Functions.
[not disclosed]
"Minister" means the Minister for Health from time to time of the State of Victoria.
"Minor Works" means any:
(a) change to the Facility which:
(i) has a total Minor Works Price not exceeding $10,000 in respect of each
Minor Works Notice (as Indexed by the CPI Multiplier Annual (OC) on
each anniversary of the Operational Commencement Date); and
(ii) is not required to ensure that the Facility will be Fit for the Intended
Purposes or to rectify a Defect (in either case, whether or not the subject
of a Direction from the State); or
(b) any other works agreed by the parties to be Minor Works,
(c) a Modification;
(d) an Equipment Modification; or
(e) any other Services.
"Minor Works Cost" means:
(a) the direct cost, actually and properly incurred by the Facility Management
Subcontractor:
(i) in procuring and installing goods required to achieve completion of the

Minor Works (excluding goods purchased or supplied by the Hospital
Operator, or donated to the Project or the Facility); and
Legal\104938921.16 41
(ii) for labour or provision of services by Subcontractors engaged by the
Facility Management Subcontractor to perform the Minor Works
(excluding the cost of such labour or the provision of such Services by
such Subcontractors where this could reasonably have been expected to
be provided by the Facility Management Subcontractor); and
(b) the expected cost of performance of any additional future Building Management
Services as a direct result of the Minor Works referred to in paragraphs (a) and (b)
discounted back to the date of completion of the Minor Works using the Project
IRR,
payable in accordance with Clause 35 and exclusive of any Margin.
"Minor Works Limit" means:
(a) an amount of $500,000 for the first Operating Year after the Operational
Commencement Date; and
(b) an amount of $250,000 for each Operating Year thereafter (as Indexed by the CPI
Multiplier Annual (OC) on each anniversary of the Operational Commencement
Date) and increased pursuant to Clause 35.8).
"Minor Works Notice" has the meaning given under Clause 35.2(a).
"Minor Works Price" means the fixed lump sum price payable to Project Co in respect of the
Minor Works including any Minor Works Costs.
"Minor Works Quote" has the meaning given under Clause 35.2(b).
"Model Variation Event" means any event described in Clause 58.2.
"Modification" means:
(a) in the period to Completion, any change to the Design Requirements, including any
addition, decrease, omission, deletion, demolition or removal to or from the Works
which result from a change to the Design Requirements;
(b) after Stage 1 Final Completion in respect of the Stage 1 Facility and after Stage 2
Completion in respect of the Stage 2 Facility:
(i) a change to the Facility, including any addition or increase to or

decrease, omission, deletion or removal from the Facility; or
(ii) a change to the Services Specifications or the scope of the Services,

including by the deletion of a Service;
(c) a change to the Facility caused by a change to the purchase of Group 3B Equipment
from the Group 3B Equipment included in the Group 3B Equipment List but
excluding the changed Group 3B Equipment itself. Where such a change is due to a
change in the specification of the item of Group 3B Equipment, for the purposes of
determining the original specification for that item of Equipment, the information
contained in columns 2 to 5 and 9 of the Group 3B Equipment List prevails over
columns 6 to 8 and 10 to 11 of that Equipment List.
(d) a change to the Facility that is necessary as a consequence of a change in the type of
Utility Services and Medical Gases to be supplied to the Facility after Stage 1 Final
Completion in respect of the Stage 1 Facility and after Stage 2 Completion in
respect of the Stage 2 Facility; and
Legal\104938921.16 42
(e) at any time, any remediation work to remove Contamination from the Site for which
the State is to pay under Clause 7.3(b) or 7.5(c);
(f) an Equipment Modification;
(g) a change to the Group 1 Equipment of itself;
(h) minor design changes to the Works which are inconsistent with the Design
Requirements but in the aggregate do not increase the capital cost of the Works and
do not delay the achievement of Completion (save where such changes are required
under paragraph (i));
(i) the development and refinement of the Design Documentation in accordance with
Clause 19.1(a);
(j) any change referred to in paragraphs (a) to (e) which is required to ensure that the
Facility will be Fit for the Intended Purposes (whether or not the subject of a
Direction from the State);
(k) any change referred to in paragraphs (a) to (e) required to rectify a Defect (whether
or not the subject of a Direction from the State);
(l) maintenance or refurbishment to any part of the Facility, or the replacement of any
items of Plant and Equipment which are the responsibility of Project Co as part of
the Services;
(m) any change or update required to be made to the Master Works Program or
Sub-Programs as a consequence of any Direction review, comment, approval or
rejection of such program by the Project Director under or in accordance with this
Agreement; or
(n) any Minor Works undertaken by Project Co or any Project Co Associate.
"Modification Allowances" means the fixed percentage allowances Project Co is entitled to

charge for the Modification Components identified in Tables 1 to 3 of the Change
Compensation Principles, subject to Sections 3.2(c)(iii), 3.2(d)(iii) and 3.2(e)(iii) of Schedule 5
of the Change Compensation Principles.
"Modification Amount" means the amount payable by the State to Project Co or, if
applicable, by Project Co to the State, in respect of a State Modification or Equipment
Modification calculated in accordance with the Change Compensation Principles.
"Modification Order" means a modification order issued by the State under Clauses 41.5,
41.13 or 41.14.
"Modification Price Request" means the notice issued by the State under Clause 41.1
requesting information for a proposed Modification.
"Moneys Owing" means all moneys which Project Co, alone or with any other person, at any
time becomes actually liable to pay to, or for the account of, the State (alone or with any other
person) on any account whatsoever under, or in relation to, any Project Document (including
by way of principal or interest, fees, costs, charges, expenses, indemnity or damages).
"Monthly Maintenance Schedule" means the rolling 2 month maintenance schedule to be

provided and updated by Project Co in accordance with the Services Specifications.
Legal\104938921.16 43
"Monthly Performance Report" means the monthly report prepared under and containing the
information required by the Services Specifications and submitted in accordance with
Clause 33.5.
"Monthly Service Payment" means the amount calculated in respect of an Operating Month
in accordance with Schedule 3A.
"Monthly Works Report" means the report to be prepared and provided by Project Co during
the Design and Construction Phase in accordance with Clause 17.4(a).
"Moral Rights" has the meaning given in the Copyright Act 1968 (Cth).
"Moral Rights Consent" means a consent by the owner of such rights substantially in the
form of Annexure 20.
"National Code" means the National Code of Practice for the Construction Industry 1997.
[not disclosed]
"Native Title Claim" means an application for a determination of native title under the Native
Title Act 1993 (Cth) or any other similar Law.
"Notice of Dispute" means a written notice specifying:
(a) that the party giving the notice disputes a fact, opinion, matter or thing;
(b) detailed particulars concerning the fact, opinion, matter or thing in dispute;
(c) the legal basis for the dispute, whether based on the terms of this Agreement or
otherwise, and if based on the terms of this Agreement, clearly identifying the
terms;
(d) the facts relied upon to dispute the fact, opinion, matter or thing; and
(e) the outcome sought (including the quantum where applicable).
"Nurse Call System" means the computerised system for communication between patients
and nursing staff as defined in the Design Requirements.
"Occupancy Permit" means the occupancy permit issued in respect of the Facility for the
purposes of the Building Act 1993 (Vic) (or if occupancy permits are no longer issued, such
other certificates required by Law as may serve a similar purpose).
"OHS Legislation" means all statutes, regulations and other subordinate legislation in force or
that come into force during the Term in the State of Victoria in respect of occupational health
and safety including the Occupational Health and Safety Act 2004 (Vic) and all regulations
made under that Act and any occupational health and safety accreditation scheme established
or to be established under the Building and Construction Industry Improvement Act 2005
(Cth).
"OHS Regulations" means the Occupational Health and Safety Regulations 2007
(Regulations) (including those parts which come into operation after the Date of this
Agreement) and including any amendment re-enactment or replacement of them.
"Operating Hours" means, for the purposes of calculating the Actual Electricity Volume and
the Actual Gas Volume in each Operating Year, the required operating hours for the relevant
Functional Areas in the Facility as set out in Section 2 of Schedule 23.
Legal\104938921.16 44
"Operating Month" means a calendar month falling within the Operating Term provided that:
(a) the first Operating Month will be the period from the Operational Commencement
Date to the end of that current calendar month; and
(b) the last Operating Month will be the period from the start of the immediately
previous calendar month until the Expiry Date or earlier termination of this
Agreement.
"Operating Term" means the balance of the Term, commencing on the Operational
Commencement Date.
"Operating Year" means each period of twelve months ending on an anniversary of the
Operational Commencement Date
"Operational Base Costs" means the direct costs of the Facility Management Subcontractor
incurred in respect of implementing the recurrent elements of a Change Compensation Event
including the cost of subcontractors to the Facility Management Subcontractor engaged in
respect of the Change Compensation Event but excluding Facility Management Subcontractor
Margin.
"Operational Commencement Date" means the later of:
(a) the Date of Stage 1 Final Completion; and
(b) the Date for Stage 1 Final Completion,
unless the State agrees to an earlier date.
"Operator's Project Team" means the group nominated as such by the Hospital Operator to
be responsible for delivery of the Project from the Hospital Operator's perspective.
"Original Date for Completion" means, in respect of the:
(a) Date for Stage 1 Final Completion 22 December 2011;
(b) Date for Stage 2A Completion 20 August 2013; and
(c) Date for Stage 2 Completion 13 December 2014,
(each as extended under Clause 32.6 for any Force Majeure Event).
"Other Transitional Activities" means the removal or disconnection, transfer and installation
of all items to be transferred from the Existing Facility to the Facility other than the Artwork
Transfer Activities, the Transition Equipment and Excluded Transitional Activities.
"Out-of-Hours Threshold" means for each Operating Year, the total number of Operating
Hours plus 10% of the total number of Operating Hours.
"Out-of-Hours Use" means any hours in excess of the Operating Hours in an Operating Year,
which are requested by the Hospital Operator to Project Co.
"Outstanding Items" means the Stage 1 Outstanding Items and the Stage 2 Outstanding Items
or, where the context requires, either one of these.
"Outstanding Items Completion Period" means the period for the completion of Outstanding
Items in accordance with the program required under each of Clauses 24.5(c), 26.2(f) or
29.2(d) (as the context requires).
Legal\104938921.16 45
"Outstanding Matters Notice" has the meaning given in Clause 54.2.
"Overdue Rate" means 2% per annum above the Bank Bill Rate.
"Parent Guarantee" means the guarantees to be given to Project Co by:
(a) Lend Lease Corporation Ltd in respect of the obligations of the Builder under the
Construction Contract; and
(b) Spotless Group Ltd in respect of the obligations of the Facility Management
Subcontractor under the Facility Management Subcontract; and
(c) any guarantee of the obligations of any replacement Builder or Facility

Management Subcontractor from a parent company and in a form with which the
State is reasonably satisfied under Clause 12.3(e).
"Parent Guarantor" means each person giving a Parent Guarantee.
[not disclosed]
"Payment Provisions" means the provisions set out in Schedule 3A.
"Payment Schedule" means the provisions for calculating, abating and paying the Service
Payments, contained in Schedule 3.
"Payment Statement" has the meaning given in Clause 40.3.
"Peak Electricity Price" means the average peak price of electricity paid during the Operating
Year for Energy End Uses, calculated by dividing the total invoiced cost of the electricity
purchased at peak price for Energy End Uses by the total volume of electricity purchased at
peak price for Energy End Uses.
"Performance Assessment Period" means the period within which a Services Specifications
shall be assessed as defined in Section 2.1.6 of the Services Specifications.
"Performance Bond" means a performance bond or bank guarantee which:
(a) is unconditional, irrevocable and payable on demand;
(b) is issued by a financial institution that is the holder of a current licence issued by
APRA and has the Required Rating;
(c) specifies a location within Melbourne where demand is to be given and payment
made, without further confirmation from the issuer; and
(d) is in the form of the proforma bond in Schedule 11.
"Performance Monitoring Program" means the program that sets out the manner in which
Project Co will monitor its own performance in providing the Services, to be prepared in
accordance with Clause 23.4 and the Services Specifications.
"Performance Parameter" means each performance parameter described in the Services

Specifications Summary Tables relating to each of the Services as described in more detail in
the Services Specification.
"Permanent Fix Time" has the meaning given in Section 2.1.5 of the Services Specifications.
"Permitted Commercial Office Purposes" [not disclosed]
Legal\104938921.16 46
"Permitted Commercial Purposes” means:
(a) the Project Co Commercial Purposes;
(b) the Shared Retail Purposes; and
(c) any other use to which the State has given approval under Clause 37,
but does not include the RCH Retail Purposes.
"Permitted Liens" means:
(a) a lien arising solely by operation of Law and in the ordinary course of Project Co's
ordinary business, provided Project Co is not in default in payment to the lienee on
the due date;
(b) any Security Interest arising out of title retention provisions in a supplier's
conditions of supply of goods acquired in the ordinary course of Project Co's
ordinary business, provided that there has been no default on the part of Project Co
in respect of its obligation to pay the Purchase Cost of the goods subject to the title
retention provisions on the due date; or
(c) any Security Interest over any asset of Project Co created by operation of Law in
favour of any Governmental Agency for the purpose of securing payment of Taxes
provided that such Security Interest has not been created pursuant to, or as a
consequence of, a default on the part of Project Co in the due payment of such
Taxes.
"Pest Control Services" means the services described as such in the Services Specifications,
and as Modified (if at all).
"PL Insurances" means the insurances described in Clause 48.2.
"Plant" means all plant, machinery and equipment and other items (including fixtures and
fittings) which Project Co or any of its Subcontractors or any other person acting on their
behalf installs, constructs or places on the Site and which is or becomes part of the Facility or
which is used for operating or maintaining the Facility or performing the Services, but
excludes:
(a) the Equipment; and
(b) all plant, machinery and equipment and other items used by Project Co or its
Subcontractors solely for the purpose of enabling or facilitating construction of the
Facility which is not and will not become part of the Facility or is not and will not
be used for operating or maintaining the Facility or performing the Services.
"Policy and Procedures Manual" means the manual so named to be prepared and submitted
under Clause 23.2(a), and which is in accordance with this Agreement and the Services
Specifications.
"Post Completion Bond" means the Performance Bond required under Clause 11.1(b).
"Post Completion Report" means the report required to be prepared and provided by Project
Co in accordance with the Completion Requirements.
"Post Completion Tests" means all of the Stage 1 Post Completion Tests and Stage 2 Post
Completion Tests.
Legal\104938921.16 47
"Pre-Existing Contamination" means any Contamination of the Site, or the Existing Facility
which is in existence prior to the date of this Agreement which would entitle a Governmental
Agency to issue a notice or direction requiring Project Co, the State or the Hospital Operator to
undertake remedial work (and includes the Known Pre-Existing Contamination).
"Pricing Controlled Products" means those basic items of prepared food and beverages sold
by Project Co, or a third party allowed by Project Co, in the Designated Commercial Areas
(other than the Shared Retail Purposes undertaken by the Hospital Operator or the RCH Retail
Purposes and any Hotel).
"Probity Event" means an event, matter or thing which:
(a) has a material adverse effect upon the character, honesty and integrity of a Relevant
Person;
(b) relates to a Relevant Person or a Relevant Company and has a material adverse
effect upon the public interest (having regard to the policy objectives of the
Department) and public confidence in the Facility; or
(c) in relation to Relevant Companies, involves a material failure to achieve or

maintain:
(i) reasonable standards of ethical behaviour;
(ii) the avoidance of conflicts of interest which will have a material adverse
effect on the ability of the Relevant Company to perform and observe its
obligations in respect of the Project; or
(iii) standards of behaviour expected of a corporation engaged in a State

project involving the Department.
"Probity Investigation" means such probity and criminal investigations to report on the
character, honesty and integrity of persons, or corporations as are required by Law or the
Department from time to time to make, to ensure that a person or Entity is fit and proper for its
proposed or continued involvement in the Project.
"Programming Requirements" means the requirements for developing and updating the
Master Works Program and all Sub-Programs, as set out in Schedule 12.
"Programs" means the Master Works Program and all Sub-Programs or, where the context
requires, any one of these.
"Project" means the carrying out of the Works and the provision of the Services, including any
Modifications, any Minor Works, the Final Refurbishment Works and the performance and
observance of each obligation pursuant to or contemplated by any Project Document.
"Project Brief" means the Project Brief issued by the State in October 2006 and any addenda
thereto.
"Project Co Associate" means:
(a) any Relevant Company;
(b) any Subcontractor;
(c) any Sub-lessee or Sub-licensee of Project Co under Clause 6.6 and their
subcontractors;
Legal\104938921.16 48
(d) any Related Body Corporate of any Relevant Company; and
(e) officers, agents, advisers, consultants, contractors and employees of Project Co, any
other Relevant Company or any other Subcontractor, including the Project Co
Representative and the Development Co-ordinator.
"Project Co Childcare Facility" means the childcare facility to be developed and operated by
Project Co in accordance with Schedule 26.
"Project Co Childcare Facility Location" means that part of the Designated Commercial
Areas identified as such on the Lease and Licence Plans.
"Project Co Commercial Purposes" means:
(a) the commercial purposes which must be delivered by Project Co within the
Designated Commercial Areas, as follows:
(i) café and food court that have the prior written approval of the Contract
Administrator:
(ii) automated teller machines;
(b) each of the following purposes which may be delivered by Project Co within the
Designated Commercial Areas in accordance with Clause 37:
(i) the Hotel;
(ii) the retail outlets (other than the Shared Retail Purposes) that have the
prior written approval of the Contract Administrator;
(iii) vending machines that have the prior written approval of the Contract
Administrator;
(iv) the Project Co Childcare Facility;
(v) Permitted Commercial Office Purposes; and
(vi) Gymnasium,
and for the purposes of paragraphs (a)(i), (b)(ii) and (b)(iii) only, such approval is not to be
unreasonably withheld having regard to the Project Objectives, the Hospital Functions and the
reputation of the Royal Children's Hospital.
"Project Co Energy End Uses" means the "Energy End Uses" set out in Section 1 of
Schedule 23 for which Project Co bears 100% volume risk.
"Project Co FM Termination Event" means a circumstance:
(a) where during the Design and Construction Phase, a Force Majeure Event which
does not constitute a Casualty Occurrence substantially prevents the performance by
Project Co of its material obligations under this Agreement, for a continuous period
being the greater of the period for which the Builder has advanced consequential
loss insurance and 180 days; or
(b) where, after Stage 1 Final Completion, a Force Majeure Event which does not
constitute a Casualty Occurrence and for which Project Co is not able to recover
under business interruption Insurance Policies (other than because Project Co has
not complied with its obligations in respect of such Insurance Policies or made a
Legal\104938921.16 49
proper claim) prevents the performance by Project Co of substantially all of its
obligations under this Agreement for a continuous period of 180 days or more.
"Project Co Margin" means the fixed percentage that Project Co may charge in accordance
with the Change Compensation Principles to cover all off site and on site overheads and
administrative and corporate and other like costs and profit of Project Co (including the cost of
project management services).
"Project Co Modification" means a Modification initiated by Project Co, which is approved

by the State under Clause 41.13.
"Project Co Office Precinct" means that part of the Designated Commercial Area identified
as such on the Lease and Licence Plans.
"Project Co Representative" means Stephen McDonough or such other person as may be

appointed in writing by Project Co from time to time to replace that person, with the written
consent of the State.
"Project Co's Infrastructure" means all infrastructure, plant, equipment and works required
to connect to and use External Infrastructure and Utility Services for the Project, the Works or
the Facility.
"Project Control Group" means the group constituted under Clause 17.1.
"Project Costs" means costs properly incurred by or on behalf of Project Co for the purposes
of implementing the Project in accordance with this Agreement.
"Project Director" means Anthony Lubofsky, or such other person as may be appointed in
writing by the State from time to time to replace that person.
"Project Documents" means:
(a) this Agreement;
(b) the Construction Contract;
(c) each Facility Management Subcontract;
(d) the Builder Direct Deed;
(e) the Financier Direct Deed;
(f) each Facility Management Subcontractor Direct Deed;
(g) any other Direct Deed;
(h) the State Security;
(i) the Independent Reviewer Agreement;
(j) each Parent Guarantee;
(k) the Stage 1 Site Lease;
(l) the Stage 1 Site Sub-Lease;
(m) the Site Lease;
Legal\104938921.16 50
(n) the Site Sub-Lease,
(o) [not disclosed]
(p) [not disclosed]; and
(q) the Trust Deed.
and any document or agreement entered into under, or for the purpose of supplementing,
replacing, amending or novating, any of them or agreed in writing by the State and Project Co
to be a Project Document for the purposes of this Agreement.
"Project IRR" means Project Co's weighted average cost of capital for the Project set out in
the Financial Close Adjustment Letter.
"Project Management Plan" means the Bid Project Management Plan as amended from time
to time in accordance with Clauses 2.9, 17.6 and 23.1.
"Project Management Plan Requirements" means the requirements for the Project
Management Plan as set out in Schedule 20 and Schedule 15 in respect of the documents
referred to in Clause 23.1.
"Project Objectives" means the fundamental objectives of the Project described in Clause 2.1.
"Project Specific Change in Law" means:
(a) a Change in Policy; or
(b) a Change in Law,
which expressly and exclusively applies to:
(i) the Project;
(ii) the Facility or the Site;
(iii) Project Co, but only in its capacity as the Entity contracting with the
State to implement the Project; or
(iv) Project Co and other Entities which are undertaking projects under the
Partnerships Victoria policies of the State, or any replacement or
substitute policies relating to public private partnership arrangements for
the provision of public infrastructure in the State, in each case only as it
applies to them in that capacity.
"Prolongation Costs" means the prolongation costs as set out in Section 2.1 of Schedule 14.
"Public Artwork Allowance" means the amount of $785,000 exclusive of GST.
"Provisional Sum Items" means those items identified as such in Schedule 5.
"Public Holiday" means a gazetted holiday in Victoria appointed under the Public Holidays
Act 1993 (Vic).
"Purchase Cost" means, subject to Clause 20.8 in relation to Group 3B Equipment, the cost to
Project Co of purchasing Equipment, including any warranty, delivery, installation, and
commissioning , costs
Legal\104938921.16 51
but not including GST or any other recoverable Taxes borne by Project Co.
"Quality Assurance Plan" means the plan so named and to be prepared by Project Co as part
of the Policy and Procedures Manual and which must comply with the requirements of and be
updated in accordance with the Services Specifications.
"Quality Assurance System" means the quality assurance system to be implemented and
updated in accordance with Clause 15.1.
"Quality Failure" means a failure to provide the Services which is classified as a "Quality
Failure" in accordance with the Services Specifications.
"Quality Failure Abatement" means, in respect of a Quality Failure, an amount in dollars

calculated in respect of that Quality Failure in accordance with the formulae set out in
Schedule 3A.
"Quality Failure Points" means, in respect of a Quality Failure, the number of quality failure
points (expressed as a number) set out in the Services Specifications in respect of that Quality
Failure.
"Quality Failure Remedy Period" means in respect of a Quality Failure, the period referred
to as such and allocated to that Quality Failure in the relevant Services Specifications
Summary Tables within which the Quality Failure must be remedied commencing upon
occurrence of that Quality Failure.
"Quality Standards" means all standards, codes, specifications and requirements to be

complied with, in accordance with and subject to the terms of this Agreement in order to
achieve Stage 1 Final Completion and Stage 2 Completion and which must otherwise be
maintained during the Operating Term including:
(a) the Building Code of Australia from time to time;
(b) the relevant standards, codes and guides from time to time of Standards Australia
and Standards New Zealand (or, where an Australian Standard or a New Zealand
Standard does not exist, the relevant British Standard or International Standard);
(c) the relevant standards, codes and guides from time to time of the National
Occupational Health and Safety Commission;
(d) the standards in relation to the Facility, including the Plant and Equipment, required
to be met and maintained under the Accreditation Standards to enable the Hospital
Operator to be accredited, in its operation of the Facility, by the Australian Council
for Health Care;
(e) the DHS Guidelines including, for the avoidance of doubt, the DHS Capital
Development Guidelines;
(f) Australian and New Zealand Guidelines for the Assessment and Management of
Contaminated Sites, ANZECC/MHNRC;
(g) all relevant Environment Protection Authority publications and bulletins;
(h) all relevant standards, codes and guides from time to time of the Victorian
WorkCover Authority;
(i) the Cleaning Standards for Victorian Public Hospitals;
(j) the NHS Estates HFN 30 : Infection Control in the Built Environment;
Legal\104938921.16 52
(k) the Association of Professionals in Infection Control and Epidemiology, Inc (APIC)
report : The Role of Infection Control During Construction in Health Care
Facilities; Bartley J.M. - 2000;
(l) all relevant standards, specifications and guides from time to time of the
Association of National Specialist Colleges;
(m) all requirements of Utility Services providers and Governmental Agencies; and
(n) all other relevant standards, codes, specifications, guidelines and requirements
expressly referred to in other parts of this Agreement,
as those Quality Standards may be varied from time to time pursuant to the provisions of this
Agreement which expressly provide for such variation.
For the avoidance of doubt, the State must notify Project Co of those Quality Standards set out
in paragraphs (d) and (l), other than to the extent such Quality Standards are publicly available
and a party experienced and competent in the implementation of the Works or the provision of
the Services should reasonably have been aware of those Quality Standards.
"Quarter" means a period of three months commencing on 1 January, 1 April, 1 July or

1 October in any year, provided that:
(a) the first Quarter in the Operating Term commences on the Operational
Commencement Date and ends on the next Quarter end; and
(b) the last Quarter of the Operating Term ends on the last day of the Term.
"Quarter End" means 31 March, 30 June, 30 September and 31 December.
"Quarterly Invoice" means the invoice Project Co is required to prepare in accordance with
the Payment Schedule 3A in order to receive a Quarterly Service Payment.
"Quarterly Performance Report" means the quarterly report to be prepared in accordance

with, and containing the information required by, the Services Specifications and submitted in
"Quarterly Service Payment" means the Quarterly payment calculated in accordance with
Schedule 3A except as amended in accordance with this Agreement.
"Rates" means all municipal rates, water rates, sewerage rates, drainage rates and other rates
payable to any Governmental Agency in respect of the Site but does not include any portion of
such rates as relates to the connection of the Site to Utility Services or rates or charges for the
usage of Utility Services.
"Rawson Letter" means the letter from Mark K. Rawson to Julie Webber dated 6 August 2007
which is Attachment 5 to this Agreement.
"RCH Equipment" means all the Equipment other than the MCRI Equipment.
[not disclosed]
"RCH Retail Purposes" means the retail purposes which may only be pursued by the Hospital
Operator (or its nominee) at the RCH Shop as follows:
(a) the sale and hire of medical and safety equipment and the like;
(b) the provision of a Pharmaceutical Benefits Service dispensary and retail pharmacy,
Legal\104938921.16 53
as varied from time to time by notice from the State to Project Co provided that no variation
may include the Project Co Commercial Purposes at that time.
"RCH Shop" means the area within the Designated Commercial Areas which will be used by
the State or its nominees to pursue the RCH Retail Purposes and the Shared Retail Purposes.
"Rectification Time" has the meaning given to it in Section 2.1.4 of the Services
Specifications.
"Rectify", "Rectifying" or "Rectification" means Project Co undertaking the tasks set out in
the Services Specifications in response to a reported Service Failure and Rectification.
"Refinancing" means:
(a) any amendment to or reinstatement or replacement of any Finance Document;
(b) the exercise of any right, or the request for any waiver or consent, under any
Finance Document or Project Document to which the State is not a party; or
(c) any other step, arrangement or new contractual or financing arrangements, that has
a substantially similar effect to that described in paragraphs (a) or (b),
and which will give rise to a Refinancing Gain. It does not include:
(d) the carrying out of any matter specifically referred to in Project Co's financing
proposal for the Project and reflected in the Financial Model as at the date of this
Agreement and expressly agreed by the State to be excluded;
(e) the syndication or subscription of any debt under the Finance Documents that is
contemplated at the date of Financial Close;
(f) the change in control or sell down of any bonds in an arms length transaction at
market value;
(g) disposals of investments or commitments of debt or equity in an arms length

transaction at market value;
(h) any amendment to or reinstatement or replacement of any Finance Document which

is a direct result of an amendment to cure any actual or potential event of default
under any Finance Document;
(i) [not disclosed]; or
(j) any change in any fee payable to the Financial Guarantor.
"Refinancing Gain" means an amount equal to the greater of zero or A-B where:
A= the net present value of the Distributions projected at the proposed date of, and after
executing, the Refinancing using the equity rates of return as set out or determined
in the Financial Model; and
B= the net present value of the Distributions projected immediately prior to the
Refinancing (without taking into account the effect of the proposed Refinancing)
using the equity rates of return as set out or determined in the Financial Model prior
to the execution of the Refinancing as varied in accordance with Clause 42.3.
"Refurbishment Bond" means any Performance Bond given under Clauses 54.5 and 54.10.
Legal\104938921.16 54
"Refurbishment Works" means the periodic maintenance, refurbishment or replacement of
all elements comprising the Facility (other than the Excluded Equipment) in accordance with
the Asset Management Plan or otherwise as necessary to ensure that the Facility:
(a) is Fit for the Intended Purposes;
(b) meets the Services Specifications;
(c) complies with all relevant Law and Authorisations and Quality Standards; and
(d) meets any manufacturers' recommendations in respect of Included Equipment.
"Registered Laboratory" means a laboratory which is accredited by the National Association

of Testing Authorities.
"Related Body Corporate" has the same meaning as "related body corporate" in the
Corporations Act.
"Related Entities" has the same meaning as given to that term in the Implementation
Guidelines.
"Relevant Company" means:
(a) Project Co;
(b) the Builder (up to the end of the period for which the Post Completion Bond is
required under this Agreement);
(c) the Facility Management Subcontractor;
(d) each Parent Guarantor; and
(e) for the purposes of Clause 62 and Probity Events any other Subcontractor from time
to time of any of the Services or a sub-lessee or licensee from Project Co under
Clause 6.6.
"Relevant Person" means:
(a) a director or secretary of a Relevant Company;
(b) any officer or employee of a Relevant Company who:
(i) has the ability to exercise influence or control in relation to the Relevant
Company, or in matters relating to the Project;
(ii) works in the Facility during the Operating Term or the Existing Facility
during the Stage 1 Works; or
(iii) has access to Confidential Information concerning the Facility, its

administration, the Hospital Operator or patients of the Facility; or
(c) an officer, employee or agent of a Relevant Company who exercises power,

influence or control in relation to the Project and matters the subject of this
Agreement.
"Remaining Contract Year" has the meaning given in Clause 54.2.
"Remediation Boundary" means the land shown in Annexure 25.
Legal\104938921.16 55
[not disclosed].
"Required Operating Hours" means in respect of a Functional Unit, 24 hours of each day of
the year, unless described otherwise in the Schedule of Accommodation or some other period
is notified to Project Co by the Contract Administrator.
"Required Rating" means a credit rating of at least A- (issued by Standard and Poor's
Australia) or A3 (in respect of Moody's Investor Service), or the equivalent credit rating issued
by another generally-recognised international credit rating agency.
"Research Precinct Building" means the 10-level building adjoining the south west wing of
the H Block.
"Response" has the meaning given in the Services Specifications.
"Retail Precinct" means that part of the Designated Commercial Area identified as such on
the Lease and Licence Plans.
"Retail Precinct Forecast" means the document set out in Annexure 29.
"Retained Buildings" means the Front Entry Building and the Research Precinct Building.
"Retained Buildings Works" means any design and construction work performed in
accordance with this Agreement on the Retained Buildings which will remain and be
incorporated into the Facility at Completion.
"Review Period" means:
(a) wherever review, endorsement or approval is required of, or an election or

determination is to be made by, the State (as opposed to a State Delegate), 20
Business Days or such longer period as is reasonable in the circumstances;
(b) in respect of the review of the Monthly Maintenance Schedule by the Contract
Administrator in accordance with Clause 33.7, a period of 5 Business Days; and
(c) in all other cases (including under the Review Procedures), 15 Business Days,
from the date the reviewing, endorsing, approving person or the person making the election or
determination (as the case may be) receives (or is deemed, pursuant to any determination of the
issue under the Accelerated Dispute Resolution Procedures or the Dispute Resolution
Procedures, to have received) the relevant information reasonably required to support the
request for review, endorsement or approval or in order to make the election or determination,
provided that in each case if at any time during the Review Period a party reasonably requires
additional information concerning the request for review, endorsement or approval or in order
to make the election or determination and such information is available or able to be obtained
if the other party uses reasonable endeavours to obtain it, then the Review Period will not
include the time that the other party takes to provide that information after the request for that
additional information is made.
"Review Procedures" means the procedures for review, endorsement or approval of a

Submitted Document as set out in Schedule 2.
"Reviewable Services" means the following services:
(a) the Waste Management Services;
(b) the Security Services; and
Legal\104938921.16 56
(c) the Carparking Services.
"Reviewable Services Component" means for a Reviewable Service, an amount equal to the
cost of delivery of that Reviewable Service under the Facility Management Subcontract, as
varied under Clause 39 and the Payment Schedule.
"Reviewable Services Term" means each period of 5 years of the Term commencing on the
Operational Commencement Date and ending on the Termination Date.
"Schedule of Accommodation" means the schedule accepted by the Project Director in

accordance with Clause 19.15 and Clause 23.2 as amended from time to time in accordance
with this Agreement.
"SDU Services" means the sanitary disposal service described as such in the Services
Specifications.
"Second Proposal" means the bid submitted by Project Co on 26 July 2007 in response to the
SNP Brief delivered by the State in June 2007.
"Secretary" means the person holding the office of Secretary in the Department or that
person's nominee.
[not disclosed]
"Security Interest" includes any mortgage, pledge, hypothecation, lien or charge or any
security or preferential interest or arrangement of any kind, or any other right or arrangement
with any creditor to have its claims satisfied prior to other creditors with, or from the proceeds
of, any asset (including retention of title and any deposit of money by way of security).
"Security of Payment Act" means the Building and Construction Industry Security of
Payment Act 2002 (Vic).
"Security Services" means the services described as such in the Services Specifications, and
as Modified (if at all).
"Security Trustee" means the party identified as such in the Financier Direct Deed as varied
under the Finance Documents.
"Service Failure" means a failure by Project Co to provide a Service in accordance with and
to the standard specified in the Services Specifications except:
(a) to the extent that the failure is a direct and intended consequence of the carrying out
of any planned maintenance or refurbishment as set out in the Asset Management
Plan provided that if the failure lasts for more than the agreed duration of planned
maintenance or refurbishment, a Service Failure will be deemed to have occurred at
the end of the agreed period for planned maintenance or refurbishment; or
(b) to the extent that the failure is a consequence of the proper and timely
implementation of a Modification or Minor Works during the Operating Term and
is contemplated in the relevant Change Notice or Minor Works Notice (as the case
may be).
"Service Payments" means the payments for the provision of the Services, which are
calculated and payable as set out in Clause 40 and the Payment Schedule, repriced periodically
for Reviewable Services in accordance with Clause 39 and as varied from time to time
pursuant to the express provisions for variation in this Agreement.
Legal\104938921.16 57
"Services" means:
(a) the Building Management Services;
(b) the Reviewable Services;
(c) the Utilities and Medical Gas Management Services;
(d) the Grounds and Gardens Maintenance Services;
(e) the Help Desk Services;
(f) the Pest Control Services;
(g) the Waste Services;
(h) Minor Works;
(i) all other activities and services required under the Services Specifications or Project
Documents to be provided or undertaken by Project Co on and from the Operational
Commencement Date in respect of the Stage 1 Facility and after Stage 2
Completion in respect of the Stage 2 Facility; and
(j) any Modifications required to be undertaken by Project Co in accordance with the

terms of this Agreement in respect of the Services listed in paragraphs (a) to (i).
"Services Specifications" means the specification of services and standards set out in
Annexure 1.
"Services Specifications Summary Tables" has the meaning given to it in the Services
Specifications.
"Shared Operating Insurance Cost Component" (SOICC) has the meaning given in
Clause 1.2(c) of Schedule 10.
"Shared Operating Insurance Risk Payment" (SOIRP) will have the meaning given in
Clause 3(a) of Schedule 10.
"Shared Operating Insurances" means the Public and Product Liability and Industrial
Special Risks/Consequential Loss Insurance as noted in Schedule 9, required to be taken out
for the Operating Term.
"Shared Retail Purposes" means the retail purposes which may be pursued by each of Project
Co and the Hospital Operator (or its nominee) being the sale of gift items.
"Site" means the land, including:
(a) the Stage 1 Site; and
(b) the Stage 2 Site, but only for the period that the land comprised in the Stage 2 Site
is the subject of the Stage 2 Site Licence or the Site Lease,
as such land is described and shown in Part C of the Lease and Licence Plans, as adjusted, if at
all, to reflect the land in the Survey Plan being less than 4.1 hectares, at Stage 2 Completion.
"Site Access and Interface Protocols" means the protocols for:
(a) accessing the Site through the Existing Site;
Legal\104938921.16 58
(b) co-ordinating the operation of the Existing Facility and the Retained Buildings with
the implementation of the Stage 1 Works; and
(c) co-ordinating the operation of the Stage 1 Facility and the Retained Buildings with
the Stage 2 Works,
as set out in the Project Management Plan, subject to such reasonable and necessary variations
from time to time as the State requires to ensure the continued efficient and safe operation of
the Existing Facility and the Retained Buildings during the implementation of the Stage 1
Works and of the Stage 1 Facility and the Retained Buildings during the implementation of the
Stage 2 Works.
"Site Conditions" means any physical conditions on, under, or over the surface, or in the
vicinity of the Site or the Existing Site, including:
(a) ground water, ground water hydrology, the existence of any wells and the effects of
any de-watering;
(b) physical and structural conditions above, upon and below the ground including any
partially completed structures or in ground works;
(c) pastures, grasses or other vegetation on the Site or the Existing Site;
(d) topography, ground surface and sub-surface conditions and geology including rock
or other materials;
(e) availability and condition of roads and all other means of access and rights required
to access the Site and the Existing Site from a public way and all Utility Services
(including drainage) servicing, or required to service the Site, the Existing Site or
the Facility;
(f) climatic and weather conditions, rain, surface water run-off and drainage, water
seepage, wind, wind-blown dust and sand seasons, mud and other effects of climatic
and weather conditions;
(g) all existing improvements, Artefacts, installations, systems and services on, above
or below the surface of the Site and the Existing Site, and any particular heritage or
other significance attaching to them, and the location of all facilities with which the
systems and services are connected;
(h) any Contamination; and
(i) all other physical conditions and characteristics of the Site and the Existing Site
above, on or below the surface which may affect the performance by Project Co of
its obligations under this Agreement.
"Site Information Reports" means each of:
(a) the Existing Building Condition and Services Reports of AHW Consulting
Engineers, Kilpatrick & Associates P/L, Connell Wagner, Stokes Perna and Mott
McDonald;
(b) the land and features survey;
(c) the geotechnical contamination investigation of AS James;
(d) the Asbestos Audit and Report of Kilpatrick & Associates; and
Legal\104938921.16 59
(e) Surveying Drawings and Floor Levels Report prepared by Madigans Surveying;
(f) The Flora & Fauna Assessments prepared by Practical Ecology; and
(g) The Archaeological Report prepared by Terra Culture,
commissioned by the State.
"Site Information Report Deed Poll" means the deed poll set out in Annexure 28.
"Site Information Report Limitation of Liability" means an amount of $10m in respect of

each Site Information Report in respect of which a Site Information Report Deed Poll has not
been provided.
"Site Lease" means the lease of the Site to Project Co, commencing on the Date of Stage 2
Completion, substantially in the form of Annexure 22.
"Site Sub-Lease" means the sub-lease of the Site from Project Co to the State, commencing on
the Date of Stage 2 Completion, substantially in the form of Annexure 23.
"Stage 1 Completion Tests" means:
(a) the Stage 1 Technical Completion Tests and Stage 1 Final Completion Tests; and
(b) any Additional Stage 1 Completion Tests which are required by the Independent
Reviewer to be successfully completed prior to Stage 1 Technical Completion or
Stage 1 Final Completion (as the case may be) in accordance with Clause 23.6.
"Stage 1 Contract Price" has the meaning given to it in the Construction Contract.
"Stage 1 Existing Site Contamination" means that Existing Site Contamination required to
be removed as part of the Stage 1 Works and for the purposes of calculating the amount
payable to Project Co or by Project Co under Clause 7.5 excludes the excavation and removal
of soil which is not Contaminated.
"Stage 1 Facility" means that part of the Facility to be designed, constructed, refurbished and
commissioned as the Stage 1 Works.
"Stage 1 Facility Sunset Date" means the date 18 months after the original date set out in this
Agreement as the Date for Stage 1 Final Completion, without taking into account any
extensions of time or acceleration of that date, except as extended (if at all) under Clause 32.15
for a Compensable Extension Event.
"Stage 1 Final Completion" means the stage at which all of the Stage 1 Final Completion
Criteria have been met, to the reasonable satisfaction of the Project Director.
"Stage 1 Final Completion Certificate" means a certificate issued by the Project Director
under Clause 26.4.
"Stage 1 Final Completion Criteria" has the meaning given in Schedule 15.
"Stage 1 Final Completion Tests" means those tests which are required to be successfully
completed prior to Stage 1 Final Completion in accordance with the Completion
Requirements.
Legal\104938921.16 60
"Stage 1 Outstanding Items" means minor Defects:
(a) which do not prevent the Stage 1 Works from being lawfully used in accordance
with their intended purposes;
(b) the existence and rectification of which, in the opinion of the Project Director, will
not materially adversely affect the use of the Stage 1 Facility by the Hospital
Operator for the Hospital Functions;
(c) which do not prevent Project Co from delivering the Services in accordance with
the Services Specifications; and
(d) do not and, if continuing to be present during the Operating Term, would not give
rise to a Service Failure.
"Stage 1 Post Completion Tests" means:
(a) those tests referred to in the Completion Requirements which, by their nature, are
unable to be successfully completed until such time as the Stage 1 Facility is fully
operational; and
(b) any Additional Stage 1 Tests which are required to be successfully completed after
Stage 1 Final Completion.
"Stage 1 Site" means the land described and shown in Annexure 24 as the Stage 1 Site, being
the land on which the Stage 1 Facility is to be constructed and including the additional land in
respect of which occupation is required to enable the Stage 1 Works to be performed and the
Services to be provided at the Stage 1 Facility.
"Stage 1 Site Licence" means the rights of access granted in accordance with Clause 6.2 to
Project Co in respect of the Stage 1 Site.
"Stage 1 Site Lease" means the lease of the Stage 1 Site to Project Co, commencing on the
Operational Commencement Date, substantially in the form of Annexure 22.
"Stage 1 Site Sub-Lease" means the sub-lease of the Stage 1 Site from Project Co to the State,
commencing on the Operational Commencement Date, substantially in the form of
Annexure 23.
"Stage 1 Technical Completion" means that stage of the Stage 1 Works where all of the
Stage 1 Technical Completion Criteria have been satisfied to the reasonable satisfaction of the
Independent Reviewer.
"Stage 1 Technical Completion Certificate" means a certificate issued by the Independent

Reviewer under Clause 24.4.
"Stage 1 Technical Completion Criteria" has the meaning given in Schedule 15.
"Stage 1 Technical Completion Tests" means those tests which are required to be
successfully completed prior to Stage 1 Technical Completion in accordance with the
Completion Requirements.
"Stage 1 Works" means:
(a) all work necessary for the design, construction, completion and commissioning of
the facility on the Stage 1 Site (as that facility is described in the Design
Requirements) including the procurement, commissioning or relocation and
installation of Plant;
Legal\104938921.16 61
(b) the Equipment which Project Co is required to procure or relocate and install and
commission under this Agreement and all work incidental thereto;
(c) the provision of the Transitional Services, in accordance with the requirements of
this Agreement; and
(d) all other work as described in Annexure 7.
"Stage 1 Works Sub-Program" is the program referred to as such in Clause 2 of Schedule 12

as prepared and updated in accordance with this Agreement.
"Stage 2 Completion" means that stage of the Stage 2 Works at which all of the Stage 2
Completion Criteria have been met to the reasonable satisfaction of the Project Director.
"Stage 2 Completion Certificate" means a certificate issued by the State under Clause 29.5.
"Stage 2 Completion Criteria" has the meaning given in Schedule 15.
"Stage 2 Completion Tests" means:
(a) those tests which are required to be successfully completed prior to Stage 2
Completion or Stage 2A Completion (as the case may be) in accordance with the
Completion Requirements; and
(b) any Additional Stage 2 Tests which are required to be successfully completed prior
to Stage 2 Completion on Stage 2A Completion (as the case may be) in accordance
with Clause 28.3.
"Stage 2 Contract Price" has the meaning given to it in the Construction Contract.
"Stage 2 Existing Site Contamination" means that Existing Site Contamination which is
required to be removed as part of the Stage 2 Works and for the purposes of calculating the
amount payable to Project Co or by Project Co under Clauses 7.6(c) and Clause 7.5 excludes
the excavation or removal of soil which is not Contaminated.
"Stage 2 Existing Site Contamination Program Allowance" means in respect of

remediation of Existing Site Contamination as part of the Stage 2 Works to be carried out
within:
(a) the Existing Site Remediation Zone (Stage 2 Basement) 15 working days; and
(b) the Existing Site Remediation Zone (Non-Basement) 30 working days.
"Stage 2 Facility" means the facility and Plant and Equipment to be constructed, procured,
installed, commissioned and refurbished as part of the Stage 2 Works.
"Stage 2 Outstanding Items" means minor Defects:
(a) which do not prevent the Stage 2 Works from being lawfully used in accordance
with their intended purposes;
(b) the existence and rectification of which, in the opinion of the Project Director does
not materially adversely affect the use of the Facility by the Hospital Operator for
the Hospital Functions;
(c) which do not prevent Project Co from delivering the Services in accordance with
Legal\104938921.16 62
(d) do not and, if continuing to be present during the Operating Term, would not give
rise to a Service Failure.
"Stage 2 Post Completion Tests" means:
(a) those tests referred to in the Completion Requirements which, by their nature, are
unable to be successfully completed until such time as the Stage 2 Facility is fully
operational; and
(b) any Additional Stage 2 Tests which are required to be successfully completed after
Stage 2 Completion.
"Stage 2 Site" means the land described and shown in Annexure 24 as the Stage 2 Site , being
the land on which the Stage 2 Facility will be constructed and including the additional land in
respect of which occupation is required to enable the Stage 2 Works to be performed and the
Services to be provided at the Stage 2 Facility.
"Stage 2 Site Licence" means the rights of access granted in accordance with Clause 6.3 to
Project Co in respect of the Stage 2 Site.
"Stage 2 Works" means all decommissioning and demolition of the Existing Facility and the
remediation of the Existing Site (including the Stage 2A Works) and all other works as
described in Annexure 8.
"Stage 2A Completion" means that Stage of the Stage 2 Works at which all of the Stage 2A
Completion Criteria have been met to the reasonable satisfaction of the Independent Reviewer.
"Stage 2A Completion Certificate" means a certificate issued under Clause 29.3.
"Stage 2A Completion Criteria" has the meaning given in Schedule 15.
"Stage 2A Completion Tests" has the meaning given in Schedule 15.
"Stage 2A Post Completion Tests" means any Additional Stage 2 Tests which are required to
be successfully completed after Stage 2A Completion.
"Stage 2A Site" means the land described and shown in Annexure 24 as the Stage 2A Site.
"Stage 2A Works" means all decommissioning and demolition of the Existing Facility on the
Existing Stage 2A Site and the remediation of the Existing Stage 2A Site.
Stage 2 Works Sub-Program" means the program referred to as such in Clause 2 of

Schedule 12 which forms part of the Master Works Program as prepared and updated in
"State" means the Crown in right of the State of Victoria and includes a department
established under the Public Administration Act 2004 (Vic) and a Minister of the Crown.
"State Associate" means:
(a) the Hospital Operator; and
(b) MCRI;
(c) any MCRI Associate; and
Legal\104938921.16 63
(d) officers, agents, advisers, consultants, contractors and employees of the State, the
Department or the Hospital Operator, including the State Delegates, the State
Employees and the Hospital Employees,
but does not include Project Co or any Project Co Associate or for the purpose of Clause 9 the
provider of any Site Information Report who has executed a Site Information Report Deed
Poll.
"State Authorisations" means:
(a) revocation of existing reserves under the Crown Land (Reserves) Act 1978 (Vic), in
respect of the Existing Site and the Site;
(b) approval by the Minister for Planning of the Incorporated Document,
in each case in a final form on conditions (if any) which are satisfactory to Project Co and the
Project Director (each acting reasonably).
"State Childcare Facility" means a childcare facility that will be operated by the Hospital
Operator or a State Associate in the Facility.
"State Delegates" means each of:
(a) up to the last day that the State is required to ensure that there is a Project Director,
in accordance with Clause 4.1, the Project Director, and any person authorised to
act as Project Director; and
(b) as and from the date that a Contract Administrator is appointed under Clause 4.4,
the Contract Administrator and any person authorised to act as Contract
Administrator,
or, where the context requires, either one of them.
"State Employees" means any person employed by the State to work at the Facility or the Site
to implement the Project, including the State Delegates (but not Project Co, the Independent
Reviewer or any Hospital Employees).
"State Modification" means a Modification initiated by the State under Clause 41.1 deemed a
State Modification or a Modification to which Clause 41.19 applies.
"State Security" means the fixed and floating charge granted by Project Co in favour of the
State over all of its assets and undertaking, substantially in the form of Annexure 16.
"Subcontract" means the contract Project Co or a Subcontractor intends to, or does, enter into
with a Subcontractor.
"Subcontractor" means any person to whom Project Co or another subcontractor of Project

Co intends to, or does, subcontract any part of the Works or Services under this Agreement
including the Builder and the Facility Management Subcontractor.
"Submitted Documents" has the meaning given in Schedule 2.
"Sub-Programs" means all sub-programs that Project Co is required to prepare, amend and
update in accordance with the Programming Requirements which form part of the Master
Works Program.
"Subsidiary" has the same meaning as "subsidiary" in the Corporations Act.
Legal\104938921.16 64
"Substantial Completion" means, in relation to any Construction Milestone, that either:
(a) the relevant works are complete; or
(b) if the relevant works are not complete:
(i) the Construction Milestone would be achieved if specified works of a

minor nature only remain to be concluded and the Independent Reviewer
reasonably determines they will be completed within not more than
1 month; or
(ii) the failure to achieve these works by the relevant Construction Milestone
Date will not, in the Independent Reviewer's reasonable opinion,
adversely impact on the achievement of Completion by the relevant Date
for Completion.
"Survey Certificate" means a certificate which certifies that the Works have been constructed
within all relevant boundaries, signed by a licensed surveyor.
"Survey Plan" means the survey plan of the Site required to be obtained by Project Co before
Stage 2 Completion can be achieved and showing that the Site will, with effect from the Date
of Stage 2 Completion be less than 4.1 hectares, and in a form also permitting its registration
as the plan of the Site for the purposes of the Site Lease and the Site Sub-Lease.
"System Failure Event" means:
(a) any event that has a material adverse impact on the operation of any of the
following systems (including any redundancy or backup system):
(i) sanitation and stormwater drainage;
(ii) water and fire protection;
(iii) Nurse Call System;
(iv) communication riser;
(v) electricity distribution;
(vi) natural gas distribution;
(vii) vertical transportation;
(viii) Medical Gases;
(ix) communications backbone infrastructure;
(x) security management system;
(xi) heating hot water, chilled water, domestic cold water, domestic hot water
pipe work; and
(xii) the Helpdesk;
(b) more than 75% of the lifts in the Facility are concurrently unavailable or
inoperative; or
Legal\104938921.16 65
(c) the Facility becomes substantially unavailable or inoperative due to a failure of
Project Co to perform, or comply with its obligations, under this Agreement.
"Target Electricity Volume" means for each Operating Year, the target electricity volume for
all Project Co Energy End Uses set out in Section 4 of Schedule 23, as adjusted (if at all) under
Section 5 of Schedule 22.
"Target Gas Volume" means for each Operating Year, the target gas volume for all Project
Co Energy End Uses set out in Section 5 of Schedule 23, as adjusted (if at all) under Section 5
of Schedule 22.
"Target Greenhouse Emissions" means for each Operating Year, the target greenhouse
emissions for all Project Co Energy End Uses set out in Section 6 of Schedule 23, as adjusted
(if at all) under Section 5 of Schedule 22.
"Tax" means any tax, levy, impost, deduction, charge, duty or withholding which is levied or
imposed by a Governmental Agency, including any income, capital gains, withholding, stamp
and transaction tax, duty or charge together with interest, penalties, charges, fees, or other
amounts (if any) imposed or made on or in respect of the above and "Taxation" will be
construed accordingly.
"Taxable Supply" has the meaning given in the GST Law, excluding section 84-5 of the
A New Tax System (Goods and Services Tax) Act 1999 (Cth).
"Tax Invoice" has the meaning given in the GST Law.
"Technical Specifications" means the part of the Design Brief entitled as such in Annexure 5.
"Temporary Fix" has the meaning given in Section 2.1.5 of the Services Specifications.
"Tender Expiry Date" means the date which is 3 months after the then current Reviewable
Services Term.
"Tender Process" means the phase from the delivery of the Expression of Interest dated May
2006 to the finalisation of the Project Agreement.
"Term" means:
(a) the term of this Agreement specified in Clause 2.2; but
(b) where used in the Termination Payment Schedule to calculate a payment on

Termination, means the term specified in Clause 2.2 which would apply but for
Termination.
"Termination" means the termination of this Agreement either as a result of expiration of the
Term or earlier termination of this Agreement in accordance with its provisions.
"Termination Date" means the date of Termination.
"Termination for Convenience" means a circumstance:
(a) where the State terminates this Agreement pursuant to Clause 53.1; or
(b) deemed to entitle the State to exercise its rights of Termination for Convenience
under Clause 49.6(c).
"Termination for Convenience Payment" means the payment calculated as such in

accordance with the Termination Payment Schedule.
Legal\104938921.16 66
"Termination Payment" means a Default Termination Payment, a Force Majeure
Termination Payment or a Termination for Convenience Payment.
"Termination Payments Schedule" means Schedule 6.
"The Royal Children's Hospital as Committee of Management" means the Royal Children's
Hospital being a public health service incorporated under section 65P of the Health Services
Act 1988 and deemed to be the Committee of Management of that land appointed under the
Crown Land (Reserves) Act 1978.
"Third Party CP" means the execution of the Independent Reviewer Agreement by the
"Time Weighting" has the meaning given in Section 5.6 of Schedule 3A.
"Traffic Management Plan" means the plan of that name that forms part of the Handover
Package and must be prepared and submitted by Project Co in accordance with Clause 23.2(a)
and to be updated each time the Handover Package is updated.
"Training Plan" means the training plan to be prepared by Project Co in accordance with
Clause 23.1 as amended and updated in accordance with the terms of this Agreement.
"Training Sub-Program" means the program referred to as such in Clause 2 of Schedule 12

which forms part of the Master Works Program as prepared and updated in accordance with
this Agreement.
"Transition Equipment" means all Group 2AT Equipment, Group 3AT Equipment and
Group 3BT Equipment.
"Transition Items Allowance" means the amount of $295,000 exclusive of GST to cover the
Other Transitional Activities including those identified in Annexure 10.
"Transition Plan" means the transition plan to be prepared by Project Co in accordance with
Clause 23.1 as amended and updated in accordance with the terms of this Agreement.
"Transitional Activities" means those activities, to be performed by Project Co at the Stage 1

Facility during the Transitional Period and the Stage 2 Facility prior to Stage 2 Completion
(including the Transitional Services, the Artwork Transfer Activities and the Other Transfer
Activities but excluding the Excluded Transitional Activities), the specifications of which and
the standards to which they must be performed being set out in the Transition Plan and
Clause 25.
"Transitional Activities Sub-Program" is the program referred to as such in Clause 2 of

Schedule 12 as prepared and updated in accordance with this Agreement.
"Transitional Allowance" means the Artwork Allowance and the Transition Items Allowance,
or both of them, as the case may be.
"Transitional Period" means the period commencing on the date of issue the Stage 1
Technical Completion Certificate and ending on the date of the issue of the Stage 1 Final
Completion Certificate.
"Transitional Services" means those Services to be provided by Project Co at the Stage 1

Facility during the Transitional Period and the Stage 2 Facility prior to Stage 2 Completion the
specification for which and the standards to which they must be performed being set out in the
Transition Plan and the Services Specifications.
Legal\104938921.16 67
"Trust Deed" means the constitution of the Unit Trust, dated on or about the date of this
Agreement and executed by Childrens Health Partnership Pty Limited ACN 119 703 445.
"Uninsurable" means, in relation to a risk, either that:
(a) insurance required pursuant to Clause 48 is not available in the recognised

international insurance market in respect of that risk generally or is not available to
Project Co or the entity required by Project Co to effect insurance due to the
capacity of insurers being filled in respect of that risk or upon the terms required by
this Agreement (including where exclusions materially adversely impact on the
insurability of that risk) from insurers having the Required Rating; or
(b) the insurance premium payable for insuring that risk with such an insurer is at such
a level or the terms and conditions are such that the risk, is not generally being
insured against by private sector providers of facilities similar in design and
functionality to the Facility or providers of services similar to the Services, both in
Australia and in the United Kingdom and the United States of America,
provided that the uninsurability is not caused by breach of the Agreement or Law by, or any
acts or omissions of Project Co or any Project Co Associate under the relevant Insurance
Policy.
"Unit Trust" means the trust known as the CHP Unit Trust constituted under the deed poll
dated 15 November 2007 by Childrens Health Partnership Pty Limited (ACN 119 703 445) in
its personal capacity and entitled "Constitution CHP Unit Trust".
"University" or "University of Melbourne" means The University of Melbourne ABN 84

002 705 224.
"User Groups" means a group or groups of Hospital Users (excluding those referred to in
paragraph (b) of the definition of Hospital Users) representing every Functional Area in the
Facility or otherwise nominated by the Project Director or the Hospital Operator from time to
time to consult with Project Co in accordance with this Agreement.
"User Group Meeting" means a meeting held with User Groups in accordance with
Clause 19.
"User Group Representative" means a person appointed as such by a User Group for the
purposes of a User Group Meeting, in accordance with User Group process set out in the
Design Development Plan.
"Utilities and Medical Gas Management Services" means the services described as such in
the Services Specifications, as Modified (if at all).
"Utility Infrastructure" means all infrastructure, plant and equipment for delivering Utility
Services, owned or controlled by a provider of Utility Services.
"Utility Services" means any utility service, including water, electricity (including for the
avoidance of doubt, the emergency electrical systems and any diesel or other fuel required for
the operation of those systems), steam/condensate, fire services, gas (including any gas
required for the operation of the co-generation plant but excluding Medical Gases), telephone,
drainage, sewerage and all communications services.
"Utility Services Conservation Policy" means the policy of that name prepared as part of the
Policy and Procedures Manual and containing the information required by the Services
Specifications as updated in accordance with this Agreement and the Services Specifications.
Legal\104938921.16 68
"Utility Services Interruption" means any one or more Utility Services not being available
(either at all or in the necessary quantity) for use for any reason other than because of:
(a) an act, omission or lack of diligence of Project Co or any Project Co Associate

except where expressly permitted by this Agreement;
(b) a dispute between Project Co and the relevant Utility Services provider regardless
of how or why that dispute is initiated or by whom;
(c) failure by Project Co to comply with its obligations under Clauses 17.7 to 17.10, 31,
38.1 to 38.3 and paragraph (i) of the definition of Intervening Event of this
Agreement.
"Verification Certificate" means a certificate in the form of Schedule 19.
"VIPP" means the Victoria Industry Participation Policy, including any policy or requirement
developed pursuant to the Victorian Industry Participation Policy Act 2003 (Vic).
"VIPP Statement" means the VIPP submission prepared by or on behalf of Project Co and set
out in Annexure 12.
"Waste" has the meaning given in the Services Specifications.
"Waste Collection Services" means:
(a) the services for the collection and disposal of Waste described as such in the
Services Specifications; and
(b) the SDU Services,
as Modified (if at all).
"Waste Management Services" means those services described in Section 6 of the Services
Specifications excluding the Waste Collection Services.
"Whole of Life Costs" means the total expected capital and operating costs associated with an
item of Plant and Equipment during the Term assuming usage as intended by the Design
Requirements including:
(a) design, re-design, purchase, insurance, transportation, storage, removal,

replacement, dismantling, installation, associated Utility Infrastructure and
commissioning (including any fees, margins and preliminaries);
(b) lifecycle replacement, maintenance, insurance and the need for additional security
to be lodged (including any fees, margins and preliminaries); and
(c) for the purposes of Clause 21 only, also includes:
(i) Utility Services costs;
(ii) telecommunications line rental, access fees or other similar fees and
reasonable non-clinical costs of the Hospital Operator; and
(iii) those costs of the Hospital Operator performing the Hospital Functions
which a party experienced and competent in the implementation of the
Works or the provision of the Services should reasonably be aware of.
Legal\104938921.16 69
"Works" means the Stage 1 Works, Stage 2A Works and the Stage 2 Works, or, where the
context requires, the relevant one of these and includes any Modifications and Equipment
Modifications in the period up to Stage 1 Final Completion in respect of Stage 1 Works, Stage
2A Completion in respect of the Stage 2A Works and Stage 2 Completion in respect of the
Stage 2 Works and any rectification of Defects and any other work required to achieve
Completion in accordance with the terms of this Agreement and includes the Retained
Buildings Works.
"Works Sub-Program" means the Stage 1 Works Sub-Program and Stage 2 Works
Sub-Program or, where the context requires, either one of these.
1.2 Document or Agreement

In this Agreement references to an "agreement" include any Security Interest, Guarantee,
undertaking, deed, agreement or arrangement, whether or not in writing, and references to a
"document" include any agreement (as so defined) in writing, or any certificate, notice,
instrument or document of any kind.
1.3 General
In this Agreement headings are inserted for convenience of reference only and will be ignored
in construing this Agreement and unless the context otherwise requires:
(a) words importing the singular number include the plural and vice versa, a gender
includes both genders and words importing persons include partnerships, trusts,
corporations, joint ventures, unincorporated associations, unincorporated or
statutory bodies, other entities and Governmental Agencies;
(b) references to Clauses, Schedules and Annexures are references to clauses of, and
schedules and annexures to, this Agreement, and references to paragraphs are
references to paragraphs within the clause of this Agreement in which they are
situated, in each case unless expressly stated otherwise;
(c) a reference in a Schedule or Annexure to a clause "in the Agreement" or "in this
Agreement" is a reference to Clauses 1 to 66 of this Agreement.
(d) references to any legislation or to any section or provision of any legislation include
any modification or re-enactment of, or any legislative provision substituted for,
and all legislation, regulations and statutory instruments under, such legislation;
(e) references to any agreement or document (including this Agreement) are to the
agreement or document as amended, novated, supplemented or replaced from time
to time, except to the extent prohibited by this Agreement or that other agreement or
document;
(f) references to writing include a facsimile transmission and any means of

representing or reproducing words, figures, drawings or symbols in a tangible and
permanently visible form;
(g) references to conduct include an omission, statement or undertaking, whether or not

in writing;
(h) references to an authority, institute, association, instrumentality, statutory body or

body politic (each a person) are:
(i) if that person is reconstituted, renamed or replaced, deemed to refer to

that person as reconstituted, renamed or replaced;
Legal\104938921.16 70
(ii) if the powers or functions of that person are transferred to, or assumed by,
another person, deemed to refer to that other person; or
(iii) if that person ceases to exist, deemed to refer to the person which
substantially serves the same purposes or object of that person who has
ceased to exist;
(i) references to an Act of Parliament will include any regulations, rules, by-laws and
orders made under that Act;
(j) references to any party to this Agreement or any other document include its
successors, permitted substitutes and permitted assigns (and, where applicable, the
party's legal personal representatives);
(k) references to "includes", "include" and "including" are to be read as if followed by

"(without limitation)";
(l) references to months are references to calendar months;
(m) where a word or phrase is defined, any other capitalised grammatical form of that
word or phrase has a corresponding meaning;
(n) references to a right or obligation of any two or more persons confers that right, or
imposes that obligation, as the case may be, jointly and severally;
(o) references to an asset include any real or personal, present or future, tangible or
intangible, property or asset (including intellectual property) and any right, interest,
revenue or benefit in, under or derived, from the property or asset;
(p) references to an amount for which a person is contingently liable include an amount
that that person may become actually or contingently liable to pay if a contingency
occurs, whether or not that liability actually arises;
(q) all references to "purpose", "intended purpose", "use" or "intended use" in the
context of any fit for purpose or fit for use obligation means the purpose or use
specified in this Agreement; and
(r) nothing in this Agreement is to be interpreted against a party solely on the ground
that the party put forward this Agreement or any part of it.
1.4 Indexation
(a) Subject to paragraph (c), all amounts to be indexed under this Agreement are
indexed by multiplying the relevant number by the relevant CPI multiplier.
(b) For the purpose of paragraph (a) the relevant CPI multiplier will be:
(i) the CPI Multiplier Quarterly (C), the CPI Multiplier Annual (C) or the
CPI Multiplier Annual (OC) (as the case may be) where specified in this
Agreement; or
(ii) if a CPI multiplier is not specified, the CPI Multiplier Quarterly (C).
(c) The amounts to be indexed under Schedule 3A are indexed by multiplying the
relevant number by the relevant LPI Multiplier.
Legal\104938921.16 71
1.5 Changes to indexes
The following rules apply to all terms defined in Clause 1.4 as being referrable to an index
published by the Australian Bureau of Statistics:
(a) if there is a change in the coverage of the index from that applying at the Date of
this Agreement and the new index is linked to another index, the defined term is to
be referable to the new index;
(b) if the index is published and:
(i) there is a change in its coverage and it is not linked to another index; or
(ii) there is a change in its periodicity,
the parties must request the President of the Institute of Actuaries (or the President's
nominee) to determine:
(iii) whether the index remains appropriate as a general indicator of the rate of
price change for the relevant goods and services; and
(iv) if it is not, what other index should be used as a substitute index for the
purpose of the defined term’s use in this Agreement,
and that determination is final and binds the parties;
(c) if there is a change in the reference base of the index from that applying at the Date
of this Agreement and the Australian Bureau of Statistics provides a conversion
factor, that conversion factor must be applied to calculate revised figures for the
purpose of the defined term’s use in this Agreement, in terms of the new reference
base;
(d) if there is a change in the reference base of the index from that applying at the Date
of this Agreement and the Australian Bureau of Statistics does not provide a
conversion factor, the parties must request the President of the Institute of Actuaries
(or the President's nominee) to calculate a revised index for the purposes of the
defined term’s use in this Agreement, and that calculation is final and binds the
parties;
(e) if the index ceases to be published and the Australian Bureau of Statistics publishes
another index which is:
(i) a replacement of that index; and
(ii) linked to the index,
the defined term must be re-calculated to the same reference base as the
replacement index;
(f) if the index ceases to be published and the Australian Bureau of Statistics does not
publish another index which is linked to the index, the parties must request the
President of the Institute of Actuaries (or the President's nominee) to calculate a
revised index for the purposes of the defined term’s use in this Agreement, and that
calculation is final and binds the parties;
(g) if the index ceases to be published and the Australian Bureau of Statistics does not
publish another index in place of the index, the parties must request the President of
the Institute of Actuaries (or the President’s nominee) to determine an appropriate
Legal\104938921.16 72
index which is a general indicator of the rate of price change for the relevant goods
and services, and that determination is final and binds the parties;
(h) if a Change in Law causes a material aberration in the index, the index will be
adjusted to remove the impact of that material aberration in accordance with any
such methodology published by a responsible Governmental Agency for adoption
by business or, in the absence of such publication, within 6 months of the
occurrence of the material aberration as agreed by the parties or, in the absence of
agreement, as determined by an Independent Expert in accordance with the
Accelerated Dispute Resolution Procedures.
1.6 Business Day

Where the day on or by which any payment is to be made under this Agreement is not a
Business Day it will be made on the next Business Day.
1.7 Order of Precedence

(a) (inconsistency within Agreement): If there is any ambiguity, discrepancy or
inconsistency between any provisions of this Agreement, the following order of
precedence will apply:
(i) Clauses 1 - 66 and Schedules 15 and 26 of this Agreement;
(ii) the Services Specifications;
(iii) the Bid Design Documentation, save where inconsistent with the Design
Brief, in which case the Bid Design Documentation will only prevail over
the Design Brief if:
A. the ambiguity, discrepancy or inconsistency between the Bid

Design Documentation and the Design Brief is specifically
identified in the Design Departures Schedule; or
B. if subparagraph A. does not apply, to the extent that the

standards or requirements of the Bid Design Documentation
impose a higher, more stringent or greater standard,
requirement or scope than that imposed by the Design Brief;
(iv) subject to subparagraph (iii), the Design Brief; and
(v) the remaining Schedules and Annexures that form part of this Agreement.
(b) (inconsistency within documents forming the Agreement): Where there is an

ambiguity, inconsistency or conflict of obligations within each of the documents or
categories of documents identified in paragraph (a), then the greater or higher
requirements, standard, level of service or scope will prevail subject to the
obligation on Project Co to deliver the option that is the most beneficial to the State
as determined by the Project Director in his absolute discretion even where this is
the most costly option.
(c) (inconsistency between Project Documents): Where there is an ambiguity,

inconsistency or conflict of obligations between the Agreement and any of the other
Project Documents to which the State is a party, or between any of the Project
Documents to which the State is a party, then the following order of precedence will
apply:
Legal\104938921.16 73
(i) the Financier Direct Deed;
(ii) this Agreement;
(iii) the remaining Project Documents to which the State is a party; and
(iv) the specific terms and conditions prevail over general terms and
conditions.
2. General
2.1 Project Objectives
The parties acknowledge that the fundamental Project objectives of this Agreement are to
establish the terms on which a modern facility and physical environment will be delivered,
which:
(a) (modern facility):
(i) supports the delivery of accessible, cost effective and high quality patient
services to children and their families in the State of Victoria; and
(ii) uses innovative and evidence-based design principles to enhance the

healing environment and support clinical excellence;
(b) (Service delivery care):
(i) supports access and family centred care which is culturally and spiritually
sensitive, and respects the dignity and development needs of children of
all ages;
(ii) maximises its design and location in Royal Park to provide a healing
environment for patients, families and staff; and
(iii) is operationally efficient, optimising the use of people and resources;
(c) (people): supports attraction and retention of high quality staff by providing a
working environment which is both inviting and invigorating;
(d) (future proof and flexible): has flexible design and infrastructure capable of
supporting adaptation to new technologies (clinical and information) and emerging
trends in paediatric healthcare;
(e) (teaching and research): provides facilities for teaching and research which
support the integration of teaching and research activities with the provision of
clinical services and the attainment of excellence in teaching and research;
(f) (stakeholder relationships): is achieved through a constructive relationship with

the State, the Hospital Operator, Hospital Users, the local community and
communities of interest in Royal Park;
(g) (value for money): is procured, completed and maintained in a manner which
delivers value for money to the State; and
(h) (sustainability): achieves State sustainability policies and objectives including

greenhouse gas and peak energy reduction, water conservation and waste
minimisation,
Legal\104938921.16 74
and without expanding upon the express provisions of this Agreement, the Design
Requirements and the Services Specifications, the rights and obligations of the parties under,
in relation to, or contemplated by this Agreement are to be interpreted so as to give effect to
the fundamental objectives referred to in this Clause 2.1.
2.2 The Term

This Agreement:
(a) (subject to Clause 5.1) commences on the Date of this Agreement; and
(b) (subject to Clause 32.6(d)) ends on the 25th anniversary of the Date for Stage 1
Final Completion unless terminated earlier pursuant to its terms or at Law.
2.3 Relationship of the State and Project Co

Nothing in, or contemplated by, the Project Documents will be construed or interpreted as:
(a) constituting a relationship between the State and Project Co, or any other person, of
partners, joint venturers, fiduciaries, employer and employee or principal and agent;
(b) imposing any general duty of good faith on the State to Project Co or any Project
Co Associate in relation to or arising out of the Project, other than to comply with
the obligations (if any) expressly stated to be assumed by the State under the Project
Documents on a good faith basis; or
(c) unlawfully restricting or otherwise unlawfully affecting the unfettered discretion of

the State to exercise any of its executive or statutory powers or functions under any
Law.
2.4 Limitation of State's Obligations

(a) (Statutory Functions): Anything which the State or any Governmental Agency
does, fails to do or purports to do pursuant to its executive or statutory functions and
powers will be deemed not to be or cause an act or omission by the State under a
Project Document and will not entitle Project Co to make any Claim against the
State under a Project Document, subject only to paragraph (b).
(b) (Claims by Project Co): The State is not relieved from any Claim that Project Co
may have against the State for its exercising any of its executive or statutory
functions or powers under any Law in a manner contrary to an express obligation of
the State under a Project Document and the existence of such obligations, and the
existence and amount of such Claim is to be assessed in accordance with the terms
of the relevant Project Document assuming Clause 2.3(c) and paragraph (a) of this
Clause 2.4 do not apply.
(c) (No obligation to influence): Notwithstanding anything contained or implied in the

Project Documents to the contrary, the parties expressly acknowledge and agree that
the State is not obliged in performing any of the duties and obligations of the State
under the Project Documents, to exercise a power, function or duty which is granted
to or within the responsibility of any other Governmental Agency, or to influence,
over-ride or direct any Governmental Agency in the proper exercise and
performance of its legal duties and functions.
(d) (Reasonable endeavours): If there is any statement in a Project Document that the
State will use "reasonable endeavours" in relation to an outcome then it means that
the State will take steps to bring about the relevant outcome so far as it is
Legal\104938921.16 75
reasonably able to do so having regard to its resources and other responsibilities but
the State cannot guarantee the relevant outcome, and the State, by undertaking to
exercise reasonable endeavours, does not agree to:
(i) interfere with or influence the exercise of any statutory power or

discretion by any body, including a Governmental Agency;
(ii) exercise a power or discretion in a manner that promotes the objectives

and expected outcomes of the Project Documents if the State regards that
exercise as not in the public interest;
(iii) develop or implement new policy in a manner that is only consistent with
the objectives and expected outcomes of the Project Documents;
(iv) procure legislation in the future in a manner that is only consistent with
the objectives and expected outcomes of the Project Documents; or
(v) act in any other way that the State regards as not in the public interest.
(e) (Partnerships Victoria principles): In respect of the principles and other guidance
materials published from time to time by the State, under its Partnerships Victoria
policies, or any successor policies, however named, which deal with public and
private sector partnerships and arrangements for the provision of infrastructure and
services to the State (collectively the "Principles"):
(i) the Project Documents do not purport to, and do not incorporate all the
Principles;
(ii) to the extent any particular Principles are expressly incorporated into the
provisions of the Project Documents, they may not be, and are not
required to be, incorporated in identical terms to the Principles as
published by the Government of the State of Victoria; and
(iii) except to the extent expressly incorporated into the Project Documents,
the Principles will not be implied into the terms of the Project
Documents.
(f) (Project Co's acknowledgements): Project Co acknowledges and agrees to the

matters stated in the preceding paragraphs of this Clause 2.4.
2.5 Project Co Responsible

Project Co will, in accordance with this Agreement and otherwise at its own cost:
(a) design the Works and in so doing undertake the Design Development Process and
prepare the Design Documentation;
(b) construct the Facility;
(c) achieve Completion;
(d) perform the Transitional Activities;
(e) provide the Services;
(f) deliver up the Facility on Termination in accordance with the Handback Condition;
and
Legal\104938921.16 76
(g) perform all other obligations under this Agreement (except those obligations
expressly required to be performed by the State under this Agreement).
2.6 Authorisations
Project Co must (except for any State Authorisations and the obtaining of the approval
required under section 16 of the Children Services Act 1996 (Vic) for the State Childcare
Facility):
(a) obtain, maintain and comply with; and
(b) ensure that the Works and the Facility comply with,
all Authorisations necessary for the implementation of the Project, including all conditions of
such Authorisations.
2.7 Conditional Authorisations

(a) (Authorisation issued on conditions) without limiting Project Co's other
obligations under this Agreement, where any Authorisation is issued on conditions
which would or could have a material adverse effect on:
(i) the design or quality of the Facility or the ability to construct and
maintain the Facility as Fit for the Intended Purposes;
(ii) the ability of Project Co to provide the Services to the Services

Specifications;
(iii) the ability of the Hospital Operator to efficiently deliver the Hospital
Functions; or
otherwise, affects Project Co's ability to meet its obligations under this Agreement
and:
(iv) the conditions of the Authorisation are due to the failure of Project Co to
meet the requirements of the Incorporated Document or its obligations
under this Agreement, Project Co must:
A. notify the Project Director that these would or could have

such an effect and provide a copy of these conditional
Authorisations, together with Project Co's detailed proposal
for satisfying these conditional Authorisations in a manner
that would not have such a an effect, to the Project Director
for review under the Review Procedures, and:
B. if the Project Director endorses the conditions of that

Authorisation (whether with or without additional conditions
from the Project Director), Project Co must make any
amendments to the Design Documentation, the Works and the
Facility required to satisfy the conditions, but those
amendments will not constitute a State Modification or entitle
Project Co to make any other Claim against the State; and
C. if the Project Director does not endorse the conditions of that

Authorisation, Project Co will liaise with the Governmental
Agency issuing the Authorisation to reach agreement on the
conditions of that Authorisation which would ensure that they
Legal\104938921.16 77
did not have the material adverse effect described in
paragraphs (i) to (iii) and enable Project Co to continue to
meet its obligations under this Agreement and any
amendments made to the Design Documentation, the Works
or the Facility as a consequence will not constitute a State
Modification or entitle Project Co to make any other Claim
against the State;
(v) the Conditions of Authorisation are not due to any of the matters referred
to in paragraph (iv), Project Co must use its best endeavours to reach
agreement with the relevant Governmental Agency on the conditions of
that Authorisation which would not have the material adverse effect
described in paragraphs (i) to (iii) and would enable Project Co to
continue to meet its obligations under this Agreement;
(vi) if despite having used its best endeavours, Project Co fails to reach
agreement with the Governmental Agency in accordance with
paragraph (v) then Project Co must submit to the Project Director:
A. for endorsement in accordance with the Review Procedures,

any amendments necessary to give effect to the requirements
of the relevant Governmental Agency whilst ensuring to the
greatest extent possible that there will be no material adverse
effect of the type described in paragraph (i) to (iii) and that
Project Co's obligations under this Agreement will continue to
be met;
B. details of any adverse effect such amendments may have in

accordance with Section 4.2(d) of Schedule 5;
(vii) in determining whether to endorse any amendments submitted by Project

Co under paragraph (vi), the Project Director will act reasonably having
regard to:
A. the conditions of the relevant Governmental Agency;
B. the information provided by Project Co in accordance with

subparagraph (vi)(B);
C. the Design Requirements; and
D. Project Co's other obligations under this Agreement.
(b) (adverse effect): If the Project Director endorses any amendments submitted by
Project Co under paragraph (vi) and it is agreed or determined that such
amendments will have an adverse effect of the type described in paragraphs (a)(i) to
(iii) or Section 5.2(d) of Schedule 5, Project Co's obligations under this Agreement
shall be amended in accordance with such agreement or determination.
(c) (no claim): Save where expressly stated in this Agreement, Project Co will not be
entitled to make any Claim arising out of or relating to any amendments required to
be made to the Works, Design Documentation or the Facility by Project Co as a
consequence of the conditions of Authorisation.
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2.8 Town Planning
(a) Project Co must at all times during the Term comply with the Incorporated
Document and must meet all requirements in respect of the Project included in the
Incorporated Document entirely at its own cost.
(b) Project Co will not be entitled to make any Claim against the State arising out of or
in connection with the compliance by Project Co with the Incorporated Document.
2.9 Safety and Minimising Disruption

(a) Project Co must in carrying out its obligations under this Agreement:
(i) take all measures necessary to protect and ensure the safety of people and
property in accordance with Best Construction Practices and Best
Operational Practices;
(ii) comply with the standards and requirements set out in the Project
Management Plan and the Policy and Procedures Manual;
(iii) except as contemplated by the Project Management Plan or the Policy

and Procedures Manual, avoid or minimise unreasonable interference
with the passage of people and vehicles and the operations or activities
carried out on the Site and the Existing Site or from areas adjacent to the
Site and the Existing Site, including the Existing Facility and the
Retained Buildings;
(iv) prevent nuisance and noise, dust, air pollution, odour and vibration, and
any disturbance to:
A. the Existing Facility (until the Stage 2 Works commence);

and
B. the Facility (including during the implementation of the

Stage 2 Works) and adjacent areas,
at levels which exceed those stipulated under the Project Management

Plan and the Policy and Procedures Manual or in excess of such lower
levels as may be stipulated by the Project Director (acting reasonably) in
accordance with Clause 17.6(g);
(v) where in the opinion of the Project Director, the permitted levels of
nuisance and noise, dust, air pollution, odour and vibration, and
disturbance stipulated in the Project Management Plan or the Policy and
Procedures Manual are too high or are not in the interests of Hospital
Users' safety or where no such permitted levels are stipulated, comply
with any Direction by the Project Director (acting reasonably) to:
A. stop or change the manner of undertaking the Works; or
B. amend the Project Management Plan or the Policy and

Procedures Manual as directed by the Project Director;
in each case in accordance with Clause 17.6(g).
(vi) comply with any other reasonable request by the Project Director made in
accordance with Clause 17.6(g) to amend the Project Management Plan
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or the Policy and Procedures Manual including in connection with the
purposes of public health or safety or access to any premises, carparks,
roads or pedestrian ways;
(vii) unless required for purposes of public health or safety or as contemplated

by the Project Management Plan or the Policy and Procedures Manual,
not interfere with the free movement of traffic (vehicular and pedestrian)
in or around the Site and the Existing Site, or access to any premises,
carparks, roads or pedestrian ways;
(viii) comply with all requirements of this Agreement in connection with

protection of people and property including the health, care and safety of
Hospital Users and of patients, staff and visitors to the Existing Facility;
(ix) promptly make good any damage, including any damage on or to the
property adjoining the Site and pay any compensation, or do all such
things necessary to ensure payment is made of any compensation
required by Law to be paid by Project Co; and
(x) keep the Works and the Site secure and safe and free from all
unauthorised access during the construction and implementation of the
Works,
and to the extent that Project Co fails to comply with any obligation under this
Clause 2.9, the State may, in addition to any other remedies under this Agreement
or at Law, on reasonable prior notice to Project Co, do all things necessary to rectify
the failure, the reasonable costs of which will be Moneys Owing, payable by Project
Co on demand.
in connection with any Direction given by the Project Director as contemplated by
paragraph (a).
2.10 Occupational Health and Safety

Project Co:
(a) (compliance with OHS legislation): must strictly comply and ensure that Project
Co's Associates comply with the OHS Legislation and do all things necessary and in
a manner which ensures that Project Co satisfies its obligations under the OHS
Legislation;
(b) (control of site): accepts that it is responsible for the control and management of:
(i) the Stage 1 Site from Financial Close until Stage 1 Final Completion;
and
(ii) the Stage 2 Site from the date which is two months after the Date of
Stage 1 Final Completion until Stage 2 Completion,
for the purposes of undertaking the Works and discharging the duties imposed by
the OHS Legislation;
(c) (health and safety): accepts that it is responsible for all health and safety at:
(i) the Stage 1 Site from Financial Close until Stage 1 Final Completion;
and
Legal\104938921.16 80
(ii) the Stage 2 Site from the date which is two months after the Date of
Stage 1 Final Completion until the Date of Stage 2 Completion;
(d) (principal contractor): will ensure the Builder accepts its appointment as principal
contractor and will authorise the Builder to manage or control the Site to the extent
necessary to discharge the duties imposed on a principal contractor under the OHS
Regulations. The State appoints the Builder as the principal contractor for:
(i) the Stage 1 Site from the date of Financial Close until Stage 1 Final
Completion; and
(ii) the Stage 1 Works until Stage 1 Final Completion;
(iii) the Stage 2 Site from the date which is two months after the Date of
Stage 1 Final Completion until the Date of Stage 2 Completion; and
(iv) the Stage 2 Works until the Date of Stage 2 Completion,
for the purposes of the OHS Regulations.
(e) (safety management plan): must put in place a safety management plan that
adequately addresses its obligations under this Agreement and the OHS Legislation;
(f) (compliance) during the Operating Term must, and must ensure that Project Co's
Associates, comply with all health and safety requirements of the Hospital
Operator;
(g) (Hospital Users) must carry out and ensure that Project Co's Associates carry out
the Works and Services at all times so as to ensure the health and safety of all
Hospital Users; and
(h) (indemnity): without limiting the effect of any other indemnity in this Agreement,
to the extent permitted by Law, must indemnify the State and State Associates
against any loss, claim, expense, liability or damage suffered or incurred by the
State or any State Associates which may arise as a result of any breach by Project
Co or any Project Co Associate of the OHS Legislation or this Clause 2.10.
2.11 Amended Bid Documents

(a) The Agreed Bid Documents submitted by Project Co as part of their First Proposal
and updated in their Second Proposal were further amended by Project Co during
the remainder of the Tender Process as a consequence of negotiations with the State
prior to their inclusion as an attachment to this Agreement.
(b) Project Co represents and warrants that all amendments to the Agreed Bid
Documents that were made after the First Proposal during the remainder of the
Tender Process have been identified in mark-up or otherwise expressly identified as
an amendment to the Agreed Bid Documents.
(c) Project Co acknowledges that the State has relied on the representation and
warranty contained in paragraph (b) in entering into this Agreement.
(d) Insofar as Project Co proceeds with the Works on the basis of amendments to the
Agreed Bid Documents that have not been marked-up or otherwise expressly
identified as an amendment in accordance with paragraph (b) then, subject to
paragraph (f), but otherwise notwithstanding any other provision in this Agreement,
the State may (entirely at is discretion) reject such Works and direct Project Co to
Legal\104938921.16 81
reinstate such Works as if the relevant amendments had not been made and the last
document submitted by Project Co as part of the Tender Process which complies
with paragraph (b) prevails.
(e) Subject to paragraph (f), Project Co is not entitled to make any Claim against the
State arising out of or relating to any action by the State undertaken in accordance
with paragraph (d) above or arising out of or relating to an amendment to the
Agreed Bid Documents that was not marked-up or otherwise expressly identified as
an amendment in breach of paragraph (b).
(f) Where the parties have agreed an amendment to the Agreed Bid Documents, but the
agreed amendment has not been marked-up or otherwise expressly identified in
accordance with paragraph (b) by reason of accidental omission or mistake, then the
State will not be entitled to reject the Works in accordance with paragraph (d).
2.12 Qualifications to Agreed Bid Documents

(a) The Agreed Bid Documents contain express qualifications that have been made by
the State.
(b) Save in respect of those qualification that are expressly stated to be addressed as
part of the Design Development Process, or could reasonably be expected to be
addressed as part of the Design Development Process, Project Co must satisfy the
State’s qualifications by amending the Agreed Bid Documents by no later than the
date that is 3 months after the Date of this Agreement.
(c) Such amendments must be agreed with the State and the State must have signed
each page of the relevant amended Agreed Bid Document by the date referred to in
paragraph (b).
(d) If Project Co does not satisfy the State’s qualifications in accordance with
paragraph (b), then the State may amend the Agreed Bid Documents in accordance
with the qualification.
2.13 Design Brief and DHS Guidelines

(a) The departures set out in the section of the Design Departures Schedule entitled
"Inconsistencies with the DHS Guidelines" or words to that effect, identify where
the Design Brief is inconsistent with the DHS Guidelines.
(b) In respect of the departures referred to in paragraph (a), the requirements of the
Design Brief prevail over those of the DHS Guidelines and Project Co will be
relieved from its obligation under this Agreement to comply with the relevant DHS
Guidelines to the extent of the inconsistency.
2.14 Trustee representations and warranties

(a) Project Co (in its capacity as trustee of the Unit Trust) makes the following
representations and warranties for the benefit of the State:
(i) it has the power:
A. to enter into those Project Documents to which it is expressed

to be a party in its capacity as trustee of the Unit Trust;
Legal\104938921.16 82
B. to perform its obligations under those Project Documents and
carry out the transactions that those Project Documents
contemplate;
C. to own the assets, undertakings and rights both present and

future, of the Unit Trust; and
D. all necessary corporate and other action has been taken to

authorise these things,
and there is no restriction on or condition of it doing so;
(ii) each Project Document and Insurance Policy to which it is (or is intended
to be) a party is (or is capable of being and will be) entered into by it as
trustee of the Unit Trust, and in the due and proper administration of the
Unit Trust;
(iii) the Unit Trust has been validly created and is in existence at the Date of
this Agreement;
(iv) it has been validly appointed as trustee of the Unit Trust;
(v) it is the sole trustee of the Unit Trust;
(vi) it has not given notice of its intention to retire as trustee of the Unit Trust;
(vii) no action has been taken or threatened to remove it or appoint an

additional trustee of the Unit Trust;
(viii) the Unit Trust is solely constituted by the Trust Deed, a true and complete
copy of which was provided to the State before the date of this
Agreement;
(ix) the Unit Trust has not been terminated, nor has any event for the vesting
of the assets of that trust occurred;
(x) no proceedings of any description have been or are likely to be

commenced or threatened which could have a material adverse effect on
the assets or financial position of the Unit Trust or on its trusteeship of
that trust;
(xi) no property of the Unit Trust has been re-settled, distributed, set aside or
transferred to any other trust;
(xii) it is to the commercial benefit of the Unit Trust and the beneficiaries of
the Unit Trust that it:
A. enters into the Project Documents to which is it expressed to

be a party in its capacity, inter alia, as trustee of the Unit
Trust; and
B. charges the property of the Unit Trust as provided in those

Project Documents;
(xiii) as trustee of the Unit Trust, it has valid rights of indemnity and
exoneration against the assets of the Unit Trust, which rights are available
for the satisfaction of all liabilities and other obligations incurred by it
under any Project Document;
Legal\104938921.16 83
(xiv) its right of indemnity out of, and lien over the assets of the Unit Trust is
unconditional and has not been limited, restricted, released or disposed of
in any way and without limitation other than under the State Security or
the Finance Documents and Project Co as trustee has no material liability
which may be set off against this right of indemnity;
(xv) the rights of any beneficiaries relating to, and their interests in, the
property of the Unit Trust are subject to the prior rights and interests of:
A. the State or Hospital Operator under the Project Documents;

and
B. Project Co in the property of the Unit Trust pursuant to its

right of indemnities, to which the State may from time to time
be subrogates;
(xvi) the Unit Trust complies with all applicable Laws; and
(xvii) it has complied with its obligations and duties as trustee under the Trust
Deed and at Law and no one has alleged to it that it has not so complied.
2.15 Limitation of liability

(a) (Limitation of liability):
(i) Project Co enters into this Agreement only in its capacity as trustee of the
Unit Trust and in no other capacity.
(ii) A liability arising under or in connection with this Agreement (whether

that liability arises under a specific provision of this Agreement, for
breach of contract or otherwise) can be enforced against Project Co only
to the extent to which it can be satisfied out of the property of the Unit
Trust out of which Project Co is entitled to be indemnified for the
liability.
(iii) The limitation of Project Co’s liability under this paragraph (a) applies
despite any other provision of this Agreement (other than paragraph (c))
and extends to all liabilities and obligations of Project Co in relation to
any representation, warranty, conduct, omission, agreement or transaction
relating to this Agreement.
(b) (No action against Project Co personally): The State may not:
(i) sue Project Co personally;
(ii) seek the appointment of a liquidator, administrator, receiver or similar

person to Project Co; or
(iii) prove in any liquidation, administration or arrangement of or affecting

Project Co.
(c) (Exception): The provisions of this Clause 2.15 will not apply to any obligation or
liability of Project Co to the extent it is not satisfied because there is a reduction in
the extent or an extinguishment of the Project Co’s indemnification out of the assets
of the Unit Trust as a result of Project Co’s fraud, wilful default, gross negligence
or breach of trust.
Legal\104938921.16 84
2.16 Prices in Agreed Bid Design Documents
Project Co's obligations arising out of or relating to the Project are not limited by or subject to
any amounts, allowances or cost estimates set out in the Agreed Bid Documents save to the
extent stated in Annexure 13.
3. Independent Reviewer
3.1 Appointment of Independent Reviewer
(a) (Project Co nominates 3 firms): Project Co will on or before the Date of this
Agreement, and at the time referred to in Clause 54.1 (as applicable), nominate 3
firms from which to select the Independent Reviewer, each of which must:
(i) have appropriate qualifications and experience;
(ii) have no interest or duty which may conflict with the role of the
Independent Reviewer under this Agreement (including that it must not
be or have been engaged or employed by Project Co or any Project Co
Associate in respect of the Project);
(iii) indicate its willingness to execute the Independent Reviewer Agreement

without substantial amendment;
(iv) have professional indemnity insurance in accordance with the

requirements of the Independent Reviewer Agreement; and
(v) provide such information in relation to fees and other matters as the State
reasonably requires.
(b) (State selects): The State may select one of the firms nominated by Project Co
under paragraph (a) to act jointly on behalf of the State and Project Co as the
(c) (Independent Reviewer Agreement): Project Co will, and the State will use
reasonable endeavours to, enter into an Independent Reviewer Agreement with the
Independent Reviewer selected by the State by the Conditions Precedent Deadline.
(d) (State refusal): If the State, acting reasonably having regard to the requirements of
paragraph (a), refuses within the Review Period to select one of the 3 firms
nominated by Project Co, Project Co must, within 2 Business Days of receiving
written notice from the State of that refusal, nominate 3 other firms in accordance
with paragraph (a).
(e) (Where no Independent Reviewer appointed): If or where:
(i) the Independent Reviewer Agreement is terminated for any reason;
(ii) an Independent Reviewer is to be appointed to scope any Final

Refurbishment Work under Clause 54; or
(iii) an Independent Reviewer is required to make determinations under the

Change Compensation Principles (or any other determinations under this
Agreement),
and, at that time, no other Independent Reviewer has been appointed under this
Clause 3.1, then the State and Project Co will appoint another person in accordance
Legal\104938921.16 85
with this Clause 3.1, on the terms of the Independent Reviewer Agreement and
Project Co and the State will enter into an Independent Reviewer Agreement with
that replacement or new Independent Reviewer, in which case the maximum
appointment will be for 2 years save for the purposes of Clause 54 in which case the
appointment will be until such time as the Independent Reviewer has performed its
obligations in accordance with that Clause.
(f) (Term of appointment): The Independent Reviewer initially appointed or

replaced, will perform the powers and authority conferred upon him or her for the
period from appointment to the date 12 months after the date of the Stage 2
Completion Certificate, or any extended period notified by the parties to the
Independent Reviewer, or agreed with the Independent Reviewer, under the terms
of the Independent Reviewer Agreement.
(g) (Costs): The costs of the Independent Reviewer will be borne equally by Project
Co and the State.
(h) (Access): The State and Project Co will permit the Independent Reviewer such
access to the Site, the Works, the Facility and such information and documents as
are reasonably required for the purposes of performing his or her powers and
authority under this Agreement and the Independent Reviewer Agreement.
(i) (downstream role): Project Co must not, and must ensure that its Subcontractors
do not, appoint the Independent Reviewer to act in any role under or relating to the
Construction Contract, the Facility Management Subcontract or any other
Subcontract (other than the roles specified in the Independent Reviewer
Agreement), the Project or otherwise unrelated to the Project, without the prior
consent of the State and on such terms approved by the State.
(j) (no liability): On no account will either party be liable to the other for any act or
omission of the Independent Reviewer.
(k) (final and binding): Subject to any express provision in this Agreement, to the
contrary or where the Independent Reviewer is acting as an Independent Expert
under Clause 54, determinations of the Independent Reviewer shall be final and
binding on the State and Project Co.
3.2 Powers of Independent Reviewer

The Independent Reviewer will:
(a) exercise the powers, duties and authority that are conferred upon the Independent
Reviewer by this Agreement and the Independent Reviewer Agreement;
(b) in performing its obligations under the Independent Reviewer Agreement, exercise
the powers, duties and authority vested in the Independent Reviewer for the benefit
of each of the State and Project Co;
(c) exercise all powers, duties, discretions and authorities as an independent reviewer,
assessor and valuer and not as agent for the State or for Project Co; and
(d) in exercising the powers, duties and authority of the Independent Reviewer, act
honestly, reasonably and impartially.
Legal\104938921.16 86
4. State and Project Co Delegates
4.1 Appointment of Project Director
(a) Until Stage 2 Completion, and thereafter whenever a Project Director is required
under this Agreement, the State will ensure that at all times (except for reasonable
handover periods during which the Secretary may act as Project Director) a natural
person is appointed by it as the Project Director.
(b) The State hereby appoints Anthony Lubofsky to be the initial Project Director.
(c) The State will promptly notify Project Co of any termination of the appointment of
a person as Project Director and of the identity of the new appointee (if any).
(d) The Project Director may be an employee of, or contractor to, the State or the
Hospital Operator.
4.2 Powers of Project Director

The Project Director will:
(a) exercise the powers and authority that are conferred upon the Project Director by
this Agreement;
(b) exercise such other power or authority of the State under any Project Document to
which the State is a party, delegated in writing by the State to the Project Director
and notified to Project Co (including any conditions applying to the delegated
power);
(c) bind the State under this Agreement or other Project Documents to which the State
is a party, only to the extent of compliance with the conditions of any lawfully
delegated power to do so; and
(d) exercise all powers, duties, discretions and authorities as agent for the State (and not
as an independent certifier, assessor or valuer),
and the State may exercise any power or authority delegated to the Project Director, and may
vary or terminate any such delegation but must promptly notify Project Co of any such
variation or termination of delegated power or authority.
4.3 Function of Project Director

During the term of his or her appointment, the Project Director will administer this Agreement
as the State's delegate.
4.4 Appointment of Contract Administrator

(a) Subject to paragraph (b), the State will ensure that at all times (except for
reasonable handover periods during which the Secretary may act as Contract
Administrator) a natural person is appointed by it as the Contract Administrator.
(b) Nine months (or as soon thereafter as practicable) before the Date for Stage 1 Final
Completion, the State will appoint the initial Contract Administrator.
(c) The State will promptly notify Project Co of each appointment and any termination
of the appointment of a person as the Contract Administrator and of the identity of
the initial and any new appointee.
Legal\104938921.16 87
4.5 Powers of Contract Administrator
The Contract Administrator will:
(a) exercise the powers and authority that are conferred upon the Contract
Administrator by this Agreement;
(b) exercise such other power or authority of the State under any Project Document to
which the State is a party, delegated in writing by the State to the Contract
Administrator and notified to Project Co (including any conditions applying to the
delegated power);
(c) bind the State under this Agreement or other Project Documents to which the State
is a party, only to the extent of compliance with the conditions of any lawfully
delegated power to do so; and
(d) exercise all powers, duties, discretions and authorities as agent for the State (and not
as an independent certifier, assessor or valuer),
and the State may exercise any power or authority delegated to the Contract Administrator, and
may vary or terminate any such delegation but must promptly notify Project Co of any such
variation or termination of delegated power or authority.
4.6 Function of Contract Administrator

During the term of his or her appointment, the Contract Administrator will administer this
Agreement (but not in respect of the Works which will be administered by the Project
Director) as the State's delegate.
4.7 Authorisation by a State Delegate

(a) A State Delegate may:
(i) authorise one or more individuals to exercise any of his or her powers
where such authorisation is not contrary to Law; or
(ii) vary or terminate in whole or in part any authorisation under

subparagraph (i).
(b) An authorisation under paragraph (a) does not prevent the State Delegate from
exercising the power which is the subject of the authorisation.
(c) A State Delegate must promptly notify Project Co of the details of any authorisation
given under this Clause 4.7 or of any variation or termination of such an
authorisation.
4.8 Hospital Operator

(a) The Hospital Operator at the date of this Agreement is the Royal Children's
Hospital ABN 35 655 720 546, a body corporate established under the Health
Services Act 1988 (Vic).
(b) The State may at any time and from time to time replace the Hospital Operator or
itself become the Hospital Operator and will give at least 10 Business Days prior
notice to Project Co if it does so.
(c) Upon receiving a notice pursuant to paragraph (b), Project Co must promptly:
Legal\104938921.16 88
(i) provide such assistance as is reasonably required by the State and the new
Hospital Operator to ensure an effective and efficient handover of the
Facility and the Hospital Functions to the new Hospital Operator and to
facilitate any changes or adjustments to accommodate the delivery of the
Services to the new Hospital Operator, including training of new Hospital
Employees to the same levels of training as Project Co has been required
to give up to that time to Hospital Employees under this Agreement and
providing the new Hospital Operator with the training it provided to the
original Hospital Operator during Stage 1 Final Completion, updated as
appropriate; and
(ii) take such actions as are necessary for it to take or reasonably required by
the State to ensure the new Hospital Operator has the same access and
tenure rights to the Site and the Facility as are enjoyed by the Hospital
Operator it is replacing,
and the State will pay, or procure payment of, the reasonable costs of Project Co in
providing such assistance and taking such actions calculated and claimed in
accordance with the Change Compensation Principles.
(d) The Hospital Operator cannot act on behalf of or bind the State under any Project
Documents unless powers and authorities are expressly delegated to the Hospital
Operator by the State or a State Delegate under this Clause 4.8 or Clause 4.9.
(e) The State holds the benefit of each right in this Agreement for itself and on trust for
the Hospital Operator to the extent that such right is expressly stated to be for the
benefit of the Hospital Operator.
4.9 Further Delegations

(a) The State may at any time delegate the exercise of any power or authority of the
State under this Agreement to a person other than the State Delegates, including the
Hospital Operator, a State Employee or a Hospital Employee and may terminate or
vary that delegation.
(b) The State will promptly notify Project Co of the identity of each delegate, the
powers and authority delegated (including any conditions applying to the delegated
power) and of any termination or variation to that delegation.
4.10 Appointment of Project Co Representative

(a) (appointment): Project Co will ensure that at all times a natural person is
appointed by it as the Project Co Representative.
(b) (employee of Project Co): The Project Co Representative must be an officer or

employee of Project Co or a Related Body Corporate of Project Co appointed to
provide management services to Project Co in respect of the Project and must be
employed full-time on the Project during the Design and Construction Phase.
(c) (initial Project Co Representative): Project Co appoints Stephen McDonough to

be the initial Project Co Representative.
(d) (prior approval): Before Project Co can appoint any other person as Project Co
Representative, it must:
Legal\104938921.16 89
(i) obtain the prior written approval of the State, which will not be
unreasonably withheld, and the State may require the conduct of and to
be satisfied with the results of a Probity Investigation of that person; and
(ii) provide to the State the written consent of the proposed appointee to the
Probity Investigation as required by the Law at least one month before
the proposed appointment.
(e) (duties): The Project Co Representative will be the principal person responsible for
direct liaison with the State and the State Associates in relation to this Agreement
and the Project during the Term and must have the experience and skills to, and
must perform, the following duties:
(i) to act as the spokesperson and statesperson for Project Co;
(ii) to ensure the ongoing implementation of a partnership with the State;
(iii) to understand, co-ordinate and manage all phases of the Project

throughout the Term;
(iv) to deal with stakeholders;
(v) to represent the views of Project Co and to manage issues with any
Project Co Associate prior to presentation to the State;
(vi) to co-ordinate the Project as among the various Subcontractors and

ensure compliance with their obligations under the various Subcontracts;
(vii) to ensure a strong presence and consistent project management role for
Project Co in the implementation of the Project; and
(viii) to oversee the co-ordination of the preparation by Project Co, the

Development Co-ordinator and any Subcontractors of all documentation
required to be submitted to the State and to review and ensure the quality
(including the clarity and completeness) and timeliness of delivery of all
such documentation to the State.
(f) (availability): Project Co will ensure that:
(i) at all times during his or her appointment, the Project Co Representative
has a detailed knowledge of the Project and has sufficient experience and
skills to undertake the role;
(ii) the Project Co Representative is present on the Site at such times as are
necessary to ensure that Project Co is complying with its obligations
under this Agreement; and
(iii) the Project Co Representative is at all times fully contactable by the then
State Delegate, or his or her Authorised Representative, by mobile
telephone or pager.
(g) (deemed possession): Any notice given to or any information within the
possession of the Project Co Representative will be deemed to have been given to or
to be within the possession of Project Co.
Legal\104938921.16 90
4.11 Appointment of Development Co-ordinator
(a) Project Co will ensure that, for the Design and Construction Phase, a natural person
is directly appointed by it as the Development Co-ordinator.
(b) The Development Co-ordinator must be an officer or employee of Project Co or a

Related Body Corporate of Project Co appointed to provide management services to
Project Co in respect of the Project and must be employed full-time on the Project,
but must not also be the Project Co Representative.
(c) The Development Co-ordinator must report directly to the Project Co

Representative.
(d) Project Co appoints Justin Bailey to be the initial Development Co-ordinator.
(e) Before Project Co can appoint any other person as Development Co-ordinator, it
must:
(i) obtain the prior written approval of the State, which will not be
unreasonably withheld, and the State may require the conduct of and to
be satisfied with the results of a Probity Investigation of that person; and
(ii) provide to the State the written consent of the proposed appointee to the
Probity Investigation as required by the Law at least one month before
the proposed appointment.
(f) Project Co will ensure that:
(i) at all times during his or her appointment, the Development Co-ordinator
has a detailed knowledge of the Project and has sufficient experience and
skills to undertake the role;
(ii) the Development Co-ordinator is present on the Site at such times as are
necessary to ensure that Project Co is complying with its obligations
under this Agreement; and
(iii) the Development Co-ordinator is at all times fully contactable by the then
State Delegate, or his or her Authorised Representative, by mobile
telephone or pager.
4.12 Role of Development Co-ordinator

(a) The Development Co-ordinator shall manage the overall co-ordination of the
Works.
(b) As part of the Development Co-ordinator's role, Project Co shall ensure that the
Development Co-ordinator:
(i) co-ordinates the various Subcontractors and oversees compliance by the

Builder and other Subcontractors with their responsibilities under the
various Subcontracts;
(ii) co-ordinates all Design and Construction Documents and all information
to be included in them, and all communications with the State and the
Project Director;
Legal\104938921.16 91
(iii) examines the Design and Construction Documents for errors, omissions,
inconsistencies and discrepancies and reports them immediately upon
discovery to the Project Director, with the examination of documents
planned so as to ensure that interpretation of documents will not interfere
with the orderly progression of the Works;
(iv) takes all steps to ensure the rectification of any such issues identified in
accordance with paragraph (iii);
(v) manages the Design Development Process in accordance with the

requirements of Clause 19 and the Design Development Plan;
(vi) co-ordinates the execution of the Works and liaises with all
Subcontractors;
(vii) convenes and attends regular co-ordination meetings with the Project
Director;
(viii) provides regular reports to the Project Co Representative;
(ix) attends on and liaises with the persons performing the testing and
commissioning of the Works; and
(x) carries out all other co-ordination of the Works necessary to ensure the
achievement of:
A. each Construction Milestone by its Construction Milestone

Date;
B. Stage 1 Final Completion by the Date for Stage 1 Final

Completion; and
C. Stage 2 Completion by the Date for Stage 2 Completion.
4.13 Warranty as to Project Co Representative and Development Co-ordinator

Project Co warrants that:
(a) the Project Co Representative has the experience and skill to, and will perform the
duties described in Clause 4.10; and
(b) the Development Co-ordinator has the experience and skill to, and will perform the
duties described in Clause 4.12 and elsewhere in this Agreement.
4.14 Project Co not relieved of obligations

The appointment of the Project Co Representative and the Development Co-ordinator will not
limit or affect Project Co's obligations and liabilities under or pursuant to this Agreement.
5. Conditions Precedent
5.1 Commencement of Agreement
(a) Subject to paragraph (b), this Agreement does not commence until each of the
Conditions Precedent has been satisfied or waived by the Condition Precedent
Deadline in accordance with this Clause 5.
Legal\104938921.16 92
(b) The following clauses of this Agreement commence on the Date of this Agreement:
(i) Clause 1;
(ii) Clauses 2.2, 2.3 and 2.4;
(iii) Clause 4;
(iv) this Clause 5;
(v) Clause 6.1;
(vi) Clause 9;
(vii) Clause 10;
(viii) Clause 46;
(ix) subject to the terms of the Early Works Agreement, Clause 48 and the
Schedules relating to Insurances;
(x) Clauses 55 to 57;
(xi) Clauses 60.1(d) to (l);
(xii) Clauses 62 to 66; and
(xiii) those clauses referred to in Schedule 2 of the Early Works Agreement but
only for the purposes of carrying out the Early Works.
5.2 Conditions Precedent Bond

(a) Project Co must provide the Conditions Precedent Bond to the State on the Date of
this Agreement.
(b) If Financial Close occurs on or before the Conditions Precedent Deadline, the State
will, subject to Clause 5.2(d), return the Conditions Precedent Bond to Project Co
on the date of Financial Close.
(c) If the Conditions Precedent are not satisfied or waived by the Conditions Precedent
Deadline, the State will (subject to the extent to which it has exercised its rights to
make a demand under the Conditions Precedent Bond) return the Conditions
Precedent Bond to Project Co on the date which is 20 Business Days after the
Conditions Precedent Deadline.
(d) The State may only make a demand under the Conditions Precedent Bond for an
amount up to and including the entire amount of the Conditions Precedent Bond if
the State considers:
(i) Project Co is in breach of the clauses of this Agreement referred to in

Clause 5.1(b);
(ii) Project Co is seeking to introduce, either formally or informally, whether

in writing or otherwise, any variations or additions to the Project
Documents which were not, by the Date of this Agreement, specifically
identified in writing and agreed by the State;
Legal\104938921.16 93
(iii) without limiting paragraph (iv), that Project Co has failed to satisfy the
Conditions Precedent (other than the Third Party CP and obtaining the
State Authorisations) by the Conditions Precedent Deadline; or
(iv) Clause 5.7(c) applies.
(e) Project Co must not take any steps to injunct or otherwise restrain:
(i) any issuer of the Conditions Precedent Bond from paying the State
pursuant to it;
(ii) the State from taking any steps for the purpose of making a demand under
the Conditions Precedent Bond or receiving payment under the
Conditions Precedent Bond; or
(iii) the State using any money received under the Conditions Precedent
Bond.
(f) If the State makes a demand under the Conditions Precedent Bond and it is
subsequently determined or agreed that, notwithstanding the State's view in respect
of paragraph (c), none of the events referred to in paragraphs (c)(i) to (iv), have
been satisfied, the State shall repay the amount of the demand received by the State
to the issuer of the Conditions Precedent Bond but Project Co shall ensure that the
Conditions Precedent Bond thereafter continues in full force and effect for the
original face value of the Conditions Precedent Bond in accordance with the terms
of this Agreement.
5.3 Conditions Precedent

This Agreement is conditional on Project Co delivering to the Project Director all of the
following in a form and substance reasonably satisfactory to the Project Director:
(a) (Verification Certificate): a duly completed Verification Certificate in respect of

each Relevant Company;
(b) (legal opinions): a legal opinion from solicitors acting for each Relevant Company
as to the legal capacity and corporate power of each Relevant Company to enter into
and perform its obligations under the Project Documents to which it is a party;
(c) (Project Documents): subject to Clause 5.10, original counterparts of all Project
Documents (other than this Agreement) to which the State is a party and certified
copies of all other Project Documents (other than this Agreement and the Leases),
all duly executed by all parties other than (if applicable) the State;
(d) (Finance Documents): certified copies of the Finance Documents duly executed by
all parties to them, and evidence that all conditions precedent to funding under the
Finance Documents have been satisfied (or waived in accordance with their terms)
save for the giving of the notice by the State described in Clause 5.6, and the Project
Director being satisfied with the identity of the Security Trustee;
(e) (revised Financial Model): the Financial Model, as varied from the Financial
Model at the Date of this Agreement with the approval of the State;
(f) (insurances): copies of all Insurance Policies for the insurances required under
Clause 48.1 and a certificate from an insurance broker as to the currency of each
policy under, and the compliance of each policy with the requirements of,
Clause 48.1;
Legal\104938921.16 94
(g) (Construction Bond): evidence confirming Project Co's receipt of the Construction
Bond; and
(h) [not disclosed];
and the State obtaining the State Authorisations.
5.4 State's Benefit

With the exception of the Third Party CP and obtaining the State Authorisations, each of the
Conditions Precedent is for the sole benefit of the State and may only be waived in writing by
the State (in its absolute discretion).
5.5 Time for Satisfaction of Conditions Precedent

(a) Project Co must satisfy the Conditions Precedent (other than the Third Party CP and
obtaining the State Authorisations) by the Conditions Precedent Deadline.
(b) Project Co must notify the Project Director promptly of each Condition Precedent
that Project Co considers to be satisfied.
5.6 Satisfaction of Conditions Precedent

The Project Director will notify Project Co promptly of the date on which the Project Director
is satisfied that all Conditions Precedent have either occurred or been unconditionally waived
and will:
(a) subject to Clause 5.2(d), return the Conditions Precedent Bond to Project Co; and
(b) itself duly execute all Project Documents to which it is a party.
5.7 Failure to Satisfy Conditions Precedent

If the Conditions Precedent are not satisfied or waived by the Conditions Precedent Deadline,
then:
(a) the State may, at its option, terminate this Agreement;
(b) Project Co will indemnify the State against all costs, expenses, losses, damages,
claims or liabilities suffered or incurred by the State arising out of or in connection
with the failure of the Conditions Precedent (other than the Third Party CP and
obtaining the State Authorisations) to be so satisfied;
(c) the State may make a demand under the Conditions Precedent Bond at any time up
to the date which is 20 Business Days after the Conditions Precedent Deadline to
satisfy the indemnity in paragraph (b) and, irrespective of whether the
circumstances relating to the demand are in dispute or the subject of the Dispute
Resolution Procedures, the Accelerated Dispute Resolution Procedures or court
proceedings;
(d) Project Co will not be entitled to bring any Claim against the State arising out of or
in connection with:
(i) the failure of the Conditions Precedent to be so satisfied; or
(ii) the Project or any Project Document to which the State is a party; and
Legal\104938921.16 95
(e) if the State exercises its option to terminate this Agreement under paragraph (a),
each of the Project Documents to which the State is party will be taken to have been
terminated at the same time as this Agreement and those documents will be of no
further force or effect.
5.8 Demands under Conditions Precedent Bond

(a) If the issuer of the Conditions Precedent Bond makes a payment to the State as a
result of a demand made under the Conditions Precedent Bond in accordance with
this Agreement, then the State may retain the amount so paid, as consideration for
the State's additional costs incurred.
(b) Project Co agrees and acknowledges that the State will not be required to pay any
compensation in relation to the State drawing on the Conditions Precedent Bond in
circumstances permitted by this Agreement, and Project Co must procure that none
of its Associates seek any compensation in relation to the State drawing on the
Conditions Precedent Bond in circumstances permitted by this Agreement.
5.9 State Authorisations

The State will take all reasonable steps to obtain the State Authorisations by the Conditions
Precedent Deadline.
5.10 Third Party Conditions Precedent

Project Co will use all reasonable endeavours to procure the execution of the Independent
Reviewer Agreement by the Independent Reviewer.
6. The Site
6.1 Project Co Access Rights before Financial Close
(a) From the Date of this Agreement until (subject to Clause 6.1(b)) Financial Close,
the State grants or will procure the grant by the Hospital Operator to Project Co
(and its Subcontractors) of a non-exclusive licence to enter the Early Works
Licensed Area.
(b) If this Agreement is terminated under Clause 5.7, Project Co must promptly vacate
the Early Works Licensed Area in accordance with the Early Works Agreement.
6.2 Stage 1 Site Licence

(a) (Licence for Works): On and from Financial Close, the State grants, and will
procure the grant to Project Co of a non-exclusive licence to enter on and occupy
the Stage 1 Site to the fullest extent necessary in order to implement the Works
pursuant to this Agreement, and in addition, for the duration of this Stage 1 Site
Licence to exercise Project Co's rights and comply with its obligations under each
Project Document to which Project Co and the State are parties and to enter and
occupy the Existing Facility and the Existing Site for the purposes and to the extent
necessary to comply with Annexure 7 and for the performance of the Transitional
Activities.
(b) (Terms of Licence): The Stage 1 Site Licence granted under paragraph (a):
(i) will terminate on the grant of the Stage 1 Site Lease, or on earlier
Termination;
Legal\104938921.16 96
(ii) grants Project Co full occupation of the Stage 1 Site from Financial Close
to the Date of Stage 1 Final Completion to implement the Works, subject
to the continued occupation and operation of the Existing Facility and the
Retained Buildings by the Hospital Operator and MCRI for the time and
in the manner set out in the Site Access and Interface Protocols;
(iii) is given for the benefit of Project Co and its Subcontractors approved by
the State from time to time or for which approval is not required from the
State, in each case pursuant to Clause 12;
(iv) is given subject to the express rights of the State and any State Associate,
including their rights of access to and occupation of the Site including the
Stage 1 Site, under this Agreement or any other Project Document;
(v) is given subject to the rights of the Hospital Operator, including its rights
of access to and possession and occupation of the Existing Facility and
the Retained Buildings, and the rights granted by the Hospital Operator to
Hospital Users and MCRI; and
(vi) includes all necessary rights of access to and from the boundaries of the
Stage 1 Site, over the Existing Site (but excluding the Existing Facility
and the Retained Buildings), as marked on Part D of the Lease and
Licence Plans, pursuant to access routes designated by the State, as those
access routes may be varied from time to time by the State on giving
reasonable prior notice to Project Co (except in the case of an Emergency,
where notice may be given on the day the access route is to be changed).
(c) (Project Co's rights): Project Co's rights under the Stage 1 Site Licence:
(i) are personal rights in contract;
(ii) do not create any estate or interest in the Stage 1 Site;
(iii) do not create the relationship of landlord and tenant between Project Co
and the State; and
(iv) do not confer exclusive possession on Project Co.
(d) (No Claim): Subject to Clauses 6.2(a), (b) and (c), Project Co is responsible for
gaining access to and from the Stage 1 Site and is not entitled to make any Claim
against the State or the Hospital Operator in connection with access, or failure to
obtain or delay in obtaining access to and from the Stage 1 Site.
(e) (Project Co's obligations): Project Co must:
(i) not (except to the extent required to implement the Works in accordance
with this Agreement) cause any damage to:
A. the Existing Site;
B. the Existing Facility (prior to its demolition);
C. the Site; or
D. any other appurtenances, services, fittings, fixtures or other

items on the above;
Legal\104938921.16 97
(ii) not erect any signage or advertising on the Stage 1 Site without the prior
approval of the Project Director;
(iii) only use the Stage 1 Site, and exercise access rights through the Existing
Site, for the purposes of implementing the Works and for no other
purpose;
(iv) at its own cost and in its own name separately connect to, and be
responsible for payment for all Utility Services required on the Stage 1
Site to implement the Works;
(v) at all times comply with the planning restriction in respect of the Site, and
not use the Site for any use not so permitted; and
(vi) at all times comply with the Site Access and Interface Protocols.
6.3 Stage 2 Site Licence

(a) (Licence for Transitional Activities and Stage 2 Works): The State grants, and
will procure the grant to Project Co of a non-exclusive licence to:
(i) enter on the Stage 2 Site:
A. from the Date of Stage 1 Technical Completion, to perform

the Transitional Activities pursuant to this Agreement; and
B. from the Date of Stage 1 Final Completion until the date 2

months after the Date of Stage 1 Final Completion only to
carry out inspections of the Existing Facility and such other
Stage 2 Works agreed to by the Project Director; and
(ii) to enter onto and occupy the Stage 2 Site from the date two months after
the Date of Stage 1 Final Completion to the fullest extent necessary in
order to implement the Stage 2 Works pursuant to this Agreement,
and in addition, for the duration of this Stage 2 Site Licence, to exercise Project
Co's rights and comply with its obligations under each Project Document to which
Project Co and the State are parties.
(b) (Terms of Licence): The Stage 2 Site Licence granted under paragraph (a):
(i) will terminate on the Date of Stage 2 Completion, or on earlier

Termination;
(ii) grants Project Co:
A. such access to the Stage 2 Site as is necessary to perform the

Transitional Activities, from the Date of Stage 1 Technical
Completion to the end of the Transitional Period;
B. such access to the Stage 2 Site as is necessary to carry out

inspections of the Existing Facility and such other Stage 2
Works agreed to by the Project Director, from the Date of
Stage 1 Final Completion to the date which is two months
after the Date of Stage 1 Final Completion; and
C. full access to and occupation of the Stage 2 Site from the date
which is 2 months after the Date of Stage 1 Final Completion
Legal\104938921.16 98
to the Date of Stage 2 Completion to implement the Stage 2
Works,
subject to the continued occupation and operation of the Existing Facility

and the Retained Buildings by the Hospital Operator and MCRI for the
time and in the manner set out in the Site Access and Interface Protocols;
(iii) is given for the benefit of Project Co and its Subcontractors approved by
the State from time to time or for which approval is not required from the
State, in each case pursuant to Clause 12;
(iv) is given subject to the express rights of the State and any State Associate,
including their rights of access to and occupation of the Site including the
Stage 2 Site, under this Agreement or any other Project Document;
(v) is given subject to complying with the Hospital Operator's reasonable

requirements in respect of health and safety and access up until the date
which is two months after the Date of Stage 1 Final Completion;
(vi) is given subject to the rights of the Hospital Operator, including its rights
of control, access to and possession and occupation of:
A. the Existing Facility up to the Operational Commencement

Date and thereafter for a period of two months for the
purposes of removing loose residual equipment, records,
loose items of plant, items of artwork and any other like
materials and decommissioning the Existing Facility in
accordance with Clause 27.2; and
B. the Retained Buildings for the purposes of the Hospital

Functions,
and the rights granted by the Hospital Operator to Hospital Users and
MCRI.
(c) (Project Co's rights): Project Co's rights under the Stage 2 Site Licence:
(i) are personal rights in contract;
(ii) do not create any estate or interest in the Stage 2 Site;
(iii) do not create the relationship of landlord and tenant between Project Co
and the State; and
(iv) do not confer exclusive possession on Project Co.
(d) (No Claim): Subject to Clauses 6.3(a) and (b), Project Co is responsible for gaining
access to and from the Stage 2 Site and is not entitled to make any Claim against the
State or the Hospital Operator in connection with access, or failure to obtain or
delay in obtaining access to and from the Stage 2 Site.
(e) (Project Co's obligations): Project Co must:
(i) not cause any damage to:
A. the Stage 2 Site or any improvements on the Stage 2 Site,

except to the extent required to implement the Stage 2 Works
in accordance with this Agreement;
Legal\104938921.16 99
B. the Stage 1 Site;
C. the Stage 1 Facility; or
D. any other appurtenances, services, fittings, fixtures or other

items on the above;
(ii) not erect any signage or advertising on the Stage 2 Site without the prior
approval of the Project Director;
(iii) only use the Stage 2 Site for the purposes of performing the Transitional
Activities and implementing the Stage 2 Works and for no other purpose;
(iv) at its own cost and in its own name separately connect to, and be
responsible for payment for all Utility Services required on the Stage 2
Site to implement the Stage 2 Works;
(v) at all times comply with the uses permitted by the State Authorisations
and any other planning restriction in respect of the Stage 2 Site, and not
use the Stage 2 Site for any use not so permitted;
(vi) at all times comply with the Site Access and Interface Protocols; and
(vii) prior to grant of the Site Lease, remove all plant and equipment,
construction waste, machinery, rubbish and debris from the Stage 2 Site.
6.4 Grant of Stage 1 Site Lease and Stage 1 Site Sub-Lease

(a) (Execution): Within 10 Business Days after the Date of Stage 1 Final Completion
and provided there has been no Termination, Project Co will complete each of the
Stage 1 Site Lease and the Stage 1 Site Sub-Lease:
(i) with its commencement date (being the Operational Commencement

Date);
(ii) its term (being the same as the Operating Term, subject to early
termination on the Date of Stage 2 Completion if, on that date, the Site
Lease and the Site Sub-Lease will become operative in accordance with
Clause 6.5(d));
(iii) the description of the Stage 1 Site (being the land described in, and
shown in Part A of the Lease and Licence Plans);
(iv) with any other incomplete information (as agreed with the State),
and must execute 2 counterparts of each of the Stage 1 Site Lease (as lessee) and the
Stage 1 Site Sub-Lease (as lessor), in registrable form and provide them to the State
for execution.
(b) (State to execute): The State will procure execution of the Stage 1 Site Lease by
the Royal Children’s Hospital as Committee of Management (as lessor) and the
Stage 1 Site Sub-Lease by the Hospital Operator (as lessee) promptly upon receipt
of them from Project Co.
(c) (Registration): Each party agrees that the Stage 1 Site Lease and the Stage 1 Site
Sub-Lease will not be registered at the Land Titles Office in Melbourne prior to the
Date of Stage 2 Completion, unless the State consents (in its absolute discretion) to
such registration.
Legal\104938921.16 100
(d) (Binding from Operational Commencement Date): The State and Project Co will
be bound by the terms and conditions of the Stage 1 Site Lease and the Stage 1 Site
Sub-Lease from the Operational Commencement Date, notwithstanding they may
not have been executed.
(e) (Use not permitted by Law): If the Hospital Operator as sublessee under the
Stage 1 Site Sublease carries out a use that is not permitted by Law, Project Co's
grant of the Stage 1 Site Sublease in respect of that use will not amount to a default
by the Project Co under any Project Document.
6.5 Grant of Site Lease and Site Sub-Lease

(a) (Execution): Within 10 Business Days after the Date of Stage 2 Completion and
provided there has been no Termination, Project Co will complete each of the Site
Lease and the Site Sub-Lease:
(i) with its commencement date (being the Date of Stage 2 Completion);
(ii) its term (being the same as the then remaining Operating Term);
(iii) the plan of the Site (being the Survey Plan); and
(iv) any other incomplete information (as agreed with the State),
and must execute 2 counterparts of each of the Site Lease (as lessee) and the Site
Sub-Lease (as lessor), in registrable form and provide them to the State for
execution and registration at the Land Titles Office.
(b) (State to execute): The State will procure execution of the Site Lease by the Royal
Children’s Hospital as Committee of Management (as lessor) and the Site
Sub-Lease by the Hospital Operator (as lessee) promptly upon receipt of them from
Project Co.
(c) (Registration): Each party agrees to do all things reasonably required of it by the
other and/or the Land Titles Office to secure registration of the Site Lease and the
Site Sub-Lease at the Land Titles Office in Melbourne.
(d) (Binding from Date of Stage 2 Completion):
(i) The Stage 1 Site Lease and the Stage 1 Site Sub-Lease will terminate at
11.59pm on the day before the Date of Stage 2 Completion; and
(ii) from the Date of Stage 2 Completion, the State and Project Co will be
bound by the terms and conditions of the Site Lease and the Site
Sub-Lease, notwithstanding they may not have been executed or
registered.
(e) (Use not permitted by Law): if the Hospital Operator as sublessee under the Site
Sublease carries out a use that is not permitted by Law, Project Co's grant of the
Site Sublease in respect of that use will not amount to a default by Project Co under
any Project Document.
6.6 Sub-leases and licences for Permitted Commercial Purposes

(a) (Conditions to grant): Subject to the Stage 1 Site Lease or the Site Lease (as
applicable), Project Co may grant sub-leases or licences over any part of the
Designated Commercial Areas on the condition that each sub-lease and licence:
Legal\104938921.16 101
(i) is for a Permitted Commercial Purpose, and is a use permitted by Law;
(ii) commences not earlier than the Date of Stage 1 Final Completion for
areas in the Stage 1 Facility and not earlier than the Date of Stage 2
Completion for areas in the Stage 2 Facility;
(iii) unless approved in writing by the Hospital Operator, is for a term not
exceeding the balance remaining of the Term (less one day), and for areas
in the Stage 1 Facility in respect of which Project Co grants sub-leases or
licences earlier than the Date of Stage 2 Completion, each sub-lease or
licence terminates automatically on the termination of the Stage 1 Site
Lease;
(iv) prohibits any further leasing or licensing;
(v) requires the maintenance of public and product liability, professional

indemnity (if relevant) and workers compensation insurance, adequate to
cover liability in connection with performance under the proposed
sub-lease or licence;
(vi) will not or is not likely to have a Material Adverse Effect;
(vii) expressly recognises and permits:
A. the Stage 1 Site Sub-Lease and the Site Sub-Lease (as

applicable);
B. the exercise by the State of its rights under Clause 62

(Probity Events and Investigations) and Schedule 26
(Designated Commercial Areas) Sections 2.9, 2.10 (excluding
2.10(b),(c),(d) and (e)), 10(d), 15.3, 17.12, 33, 37.3, 37.4,
37.5, 41, 49, 50, 52 and 53; and
C. the State to elect to take a novation of or to terminate the

relevant sub-lease or licence upon exercise of its rights under
Clauses 53.1 and 53.2;
(viii) is otherwise in the form of a proforma commercial lease or licence, the

terms and conditions of each of which are reviewed by the relevant State
Delegate pursuant to the Review Procedures prior to the grant of the first
such sub-lease and licence and any material amendments to those
proforma documents are similarly provided to the State Delegate for
review pursuant to the Review Procedures before they are incorporated
into any particular sub-lease or licence;
(ix) includes a provision which imposes a duty of confidentiality in relation to

all Confidential Information on similar terms to Clause 63.1;
(x) for each particular sub-lease and licence, all amendments to the proforma
commercial lease and licence, as reviewed by the State Delegate under
the Review Procedures, are clearly delineated in the final form of the sub-
lease or licence;
(xi) each draft sub-lease or licence in its final form is provided to the State for
approval as to its terms; and
Legal\104938921.16 102
(xii) is with a person who satisfies the State's requirements for probity
following any Probity Investigation the State may require of Relevant
Persons in connection with the proposed sub-lessee or licensee; and
(xiii) is with a person who has the financial capacity, experience and capability
to perform its obligations under the proposed sub-lease or licence .
(b) (Approval of State): The State will not unreasonably withhold approval to the
terms of the draft sub-lease or licence, if it complies with the conditions of
paragraph (a).
(c) (Sub-lessees and licensees): Prior to entering into any sub-lease or licence for any
part of the Retail Precinct, Project Co will:
(i) notify the Hospital Operator of its intention to tender each such sub-lease
or licence prior to the time of tender;
(ii) [not disclosed]
(iii) advise the Hospital Operator of the identity of its proposed sub-lessee or
licensee for approval, which, [not disclosed] shall not to be unreasonably
delayed;
(iv) [not disclosed]
(d) [not disclosed].
6.7 Payment to the Hospital Operator for Retail Precinct

(a) (Retail Precinct Financial Forecasts): Annexure 29 contains in respect of the
Retail Precinct for each Operating Year:
(i) the anticipated net operating cashflow (“Retail Precinct Forecast”); and
(ii) the Minimum Retail Precinct Payment.
(b) (Base amount payable to the Hospital Operator): Subject to paragraph (c)
Project Co shall pay to the Hospital Operator within 20 Business Days of the end of
each Operating Year, an amount that is not less than the Minimum Retail Precinct
Payment.
(c) [not disclosed]
(d) (Financial Performance Report) No later than 20 Business Days after the end of
each Operating Year, Project Co shall provide the Hospital Operator and the State
Delegate with a report on the financial performance of the Retail Precinct for the
previous Operating Year which shall include details of:
(i) all rental income;
(ii) all outgoings paid and payable by sub-lessees or licensees;
(iii) any leasing incentives including contributions to fit-out or rent free

periods;
(iv) all payments received from the Hospital Operator under Clause 6.6(d);
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(v) all net operating cashflow being the sum of subparagraphs (i), (ii) and (iv)
and in respect of gross rents only subparagraph (iii); and
(vi) any other information relevant for the purposes of verifying the net
operating cashflow earned by Project Co for the Retail Precinct as
reasonably required by the Contract Administrator.
(e) (Additional payment to the Hospital Operator): In addition to the Minimum

Retail Precinct Payment, if the actual net operating cashflow for the Retail Precinct
earned by Project Co in any Operating Year (which shall include any amounts
payable by the Hospital Operator in accordance with Clause 6.6(d)) is in excess of
105% of the Retail Precinct Forecast for the corresponding Operating Year (the
"Excess Amount"), Project Co shall pay 85% of the Excess Amount to the
Hospital Operator within 30 Business Days of the end of the relevant Operating
Year (“Net Operating Cashflow Payment”) in the same manner and subject to the
same conditions as payment of the Minimum Retail Precinct Payment. If the
Excess Amount is zero or less than zero, no Net Operating Cashflow Payment is
payable.
7. Contamination
7.1 Occurrence of Contamination
If, in the period from Financial Close to the Termination Date or, in the case of the Existing
Site and the Existing Facility to the Date of Stage 2 Completion, any Contamination exists in,
on or under the Site, the Facility, the Existing Site (including any Existing Site Contamination)
or the Existing Facility or has emanated or is emanating from the Site, the Facility, the
Existing Site or the Existing Facility, then, regardless of whether a Clean-up Notice is issued in
respect of that Contamination:
(a) each party will advise the other as soon as it becomes aware of that Contamination;
(b) each party will promptly provide the other with a copy of any Clean-up Notice
served on it, and of all related correspondence which precedes or follows that
Clean-up Notice;
(c) Project Co must remediate that Contamination to the Agreed Remediation Standard
or such other standard notified by the State under Clause 7.2(c), and must do so at
its sole cost and expense, except where the State is responsible to pay such costs
and expenses, or a proportion of them, under Clauses 7.3, 7.5 or 7.6 (as the case
may be); and
(d) Project Co must comply with any agreement or arrangement it may enter into with
any Governmental Agency in relation to that Contamination or any Clean-up
Notice.
7.2 Contamination Clean Up Program

(a) Promptly upon becoming aware of Contamination which Project Co is required to
remediate in accordance with Clause 7.1, Project Co will notify the State in writing
of its proposed clean up program, which shall include:
(i) all actions proposed to be taken to effect the clean up;
(ii) detailed estimates of all costs to be incurred by Project Co in executing

those actions;
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(iii) the proposed timeframe for execution of the clean up; and
(iv) if possible, proposed alternative programs for executing the clean up

having reduced cost consequences, while still achieving the clean up
within an acceptable time frame; and
(v) where possible, detailed estimates of the volume and type of

Contamination,
and shall be prepared in accordance with the Change Compensation Principles for
the purposes of Contamination referred to in Clauses 7.3, 7.5 and 7.6
("Contamination Clean Up Program"). Project Co shall not be entitled to make
any Claim in respect of any Contamination unless Project Co has issued a
Contamination Clean Up Program in accordance with this Clause 7.2 prior to
undertaking any clean-up of the Contamination.
(b) The State will review Project Co's proposed Contamination Clean Up Program
within the Review Period. However, if the State does not request any changes to the
proposed Contamination Clean Up Program within the Review Period, it will be
deemed to have accepted that program.
(c) The State may propose amendments to the Contamination Clean Up Program
(including amendments that would result in remediation to a standard higher than
the Agreed Remediation Standard), and may accept or propose amendments to any
alternative proposals made in accordance with paragraph (a).
(d) If Project Co refuses to accept any amendments proposed by the State pursuant to
paragraph (c), the State may elect to effect the clean up itself. If the State does so,
then:
(i) the State agrees that the clean up will be effected in accordance with all
relevant Laws and Authorisations; and
(ii) subject to Clauses 7.3, 7.5, 7.6 and 7.7, Project Co will reimburse the
State all of the reasonable costs incurred by the State in executing a clean
up required under Clause 7.1 and such amounts will be Moneys Owing.
7.3 Compensation for remediation costs

(a) In respect of the Stage 1 Site only (excluding the Stage 1 Existing Site
Contamination) and subject to Clauses 7.3(b), 7.5 and 7.7 if:
(i) the Contamination which Project Co cleans up is Pre-Existing

Contamination the existence (rather than the volume or extent) of which
at the Stage 1 Site was not Known Pre-Existing Contamination;
(ii) Project Co incurs any costs in complying with Clause 7.1 in relation to
that Contamination; and
(iii) Project Co has complied with Clause 7.2 in incurring those costs,
then the State will pay to Project Co 80% of those costs, in accordance with the
Change Compensation Principles and provided that Project Co has complied with
Clause 7.4.
Legal\104938921.16 105
(b) To the extent that Contamination:
(i) arises from:
A. any act or omission of the State or any State Associate, except

to the extent Project Co is required to manage the risk
pursuant to this Agreement and did not do so;
B. the performance of the Hospital Functions by the Hospital

Operator (except to the extent Project Co is required to
manage the risk pursuant to this Agreement and did not do so
or it was reasonably practical for Project Co to guard against
the risk); or
C. Contamination migrating onto or into the Site from outside

the Site (except to the extent Project Co is required to manage
the risk and did not do so or a competent and experienced
contractor, acting reasonably in the circumstances, would
have taken preventative measures to prevent or minimise such
migration), or
(ii) exists outside of the Remediation Boundary (except to the extent such
Contamination arises from or in connection with the performance of the
Works);
(iii) emanates from any part of the Stage 2 Site after the Date of this
Agreement and prior to Project Co taking control of, and commencing
Works on, the Stage 2 Site (except to the extent caused or contributed to
by Project Co or any Project Co Associate),
and
(iv) Project Co incurs any costs in complying with Clause 7.1 in relation to
that Contamination; and
(v) Project Co has complied with Clause 7.2 in incurring those costs,
then subject to Clause 7.7 the State will pay to Project Co 100% of those costs, in
accordance with the Change Compensation Principles and provided that Project Co
has complied with Clause 7.4.
(c) The State will also pay to Project Co all reasonable costs Project Co incurs in
carrying out any Contamination remediation to a standard higher than required by
the Agreed Remediation Standard at the request of the State under Clause 7.2(c), in
accordance with the Change Compensation Principles and provided that Project Co
has complied with Clause 7.4.
7.4 Process for making a claim

If Project Co wishes to make a claim under Clause 7.3 it must issue a Change Notice to the
relevant State Delegate. That notice must:
(a) specify the circumstances giving rise to the costs, including information relevant to
the determination as to whether Clause 7.1 and any subparagraphs of Clause 7.3
apply;
(b) include details of the costs incurred;
Legal\104938921.16 106
(c) not include any costs which were not accepted by the State in accordance with
Clause 7.2; and
(d) comply with the Change Compensation Principles.
7.5 Existing Site Contamination - Stage 1 Works

(a) (Allowance): The Completion Payment includes an Existing Site Contamination
Allowance a portion of which may be used for undertaking the removal of the Stage
1 Existing Site Contamination.
(b) (Schedule of Rates): The actual amount payable by the State to Project Co for the
removal of the Stage 1 Existing Site Contamination will be calculated in accordance
with the Existing Site Contamination Schedule of Rates by multiplying the quantity
of Stage 1 Existing Site Contamination removed from the Existing Site by the
relevant rate specified in the Existing Site Contamination Schedule of Rates.
(c) (Modifications): If there is no applicable rate in the Existing Site Contamination

Schedule of Rates for the type of Stage 1 Existing Site Contamination removed
from the Existing Site then the removal of such Stage 1 Existing Site Contamination
will be deemed to be a State Modification and Project Co will issue a Change
Notice in respect of such Works.
(d) (Project Co Warranty): Project Co warrants that the amounts included in the
Existing Site Contamination Schedule of Rates are inclusive of all costs and
margins and Project Co is not entitled to make any Claim against the State arising
out of or relating to the removal of any Stage 1 Existing Site Contamination, except
in accordance with this Clause 7.5.
(e) (Quantities): The quantities and types of Stage 1 Existing Site Contamination are
not known to the State. Except as permitted under this Clause 7.5, Project Co is not
entitled to make any Claim against the State if the quantities of Stage 1 Existing
Site Contamination are greater or lesser than those allowed by Project Co in
preparing the Existing Site Contamination Schedule of Rates.
(f) (Reporting obligations): Project Co must report on the removal of any Stage 1
Existing Site Contamination in the Monthly Works Report in accordance with
Clause 17.4(a)(i)J and must provide details of the quantities and type of Stage 1
Existing Site Contamination removed in the relevant month together with a running
total of all Stage 1 Existing Site Contamination removed up until the end of the
reporting period. The Independent Reviewer must within 10 Business Days of
receipt of the information referred to in this paragraph (f) certify the quantities and
type of Stage 1 Existing Site Contamination removed.
(g) (Notification): Project Co must provide to the Project Director upon completion of
the removal of the Stage 1 Existing Site Contamination and in any case no later than
10 Business Days prior to the date on which Project Co anticipates it will achieve
Stage 1 Final Completion, a notice specifying the amount payable in respect of the
removal of the Stage 1 Existing Site Contamination calculated in accordance with
the Existing Site Contamination Schedule of Rates. The notice must identify the
quantities of each of the different types of Stage 1 Existing Site Contamination
removed from the Existing Site and the rates applicable in respect of the quantities.
(h) (Information and documentation): Project Co must provide the Project Director
with all information and documentation requested by the Project Director to verify
the amounts, quantities and calculations set out in Project Co's notice provided
under paragraph (g).
Legal\104938921.16 107
(i) (Disputes): If the Project Director does not agree that the amount stated in Project
Co's notice provided under paragraph (g) accurately reflects the amount payable in
respect of the removal of the Stage 1 Existing Site Contamination, the matter shall
be determined in accordance with the Accelerated Dispute Resolution Procedures
and the amount then determined to be payable to or by Project Co shall be paid in
accordance with paragraph 7.6(e)(ii).
(j) (No Claim): Nothing in this Clause 7.5 gives Project Co any rights to make any
Claim against the State in respect of any Contamination in any structures, including
the Existing Facility, affixed to or otherwise on or above the Existing Site.
7.6 Existing Site Contamination - Stage 2 Works

(a) (Tender required): Where Project Co is required under Clause 7.1 to remediate
Stage 2 Existing Site Contamination, Project Co will conduct a tender process to
carry out such work in accordance with Section 2.6 of the Change Compensation
Principles, save that Section 2.6(e) to 2.6(g) of the Change Compensation Principles
shall not apply in respect of the tender process.
(b) (Schedule of Rates): Project Co will require the tender on a schedule of rates basis
and allow for all applicable EPA levies, site testing, site treatment, tipping fees,
transport of Contaminated material, and landfill rates and auditor and consultant
fees and costs.
(c) (Reporting): Clause 7.5(f) to (j) apply with respect to the remediation of the
Stage 2 Existing Site Contamination, save that the notice to be provided under
Clause 7.5(g) shall attach a copy of the notice provided under Clause 7.5(g) and
shall specify the amount payable in respect of removal of the Stage 2 Existing Site
Contamination calculated in accordance with any schedule of rates accepted under
Clause 7.6(a) to which shall be added a Builder Margin calculated in accordance
with Table 4 of the Change Compensation Principles.
(d) (Program): The Master Works Program includes an Existing Site Contamination
Program Allowance for undertaking the removal of the Stage 2 Existing Site
Contamination. To the extent the time Project Co takes to remove the Stage 2
Existing Site Contamination:
(i) exceeds the Stage 2 Existing Site Contamination Program Allowance,

this will be deemed to be a Compensable Extension Event save that the
Builder's prolongation costs shall be as set out in Annexure 27 for
Existing Site Contamination; or
(ii) is less than the Stage 2 Existing Site Contamination Program Allowance,
at the State's election, the Date for Completion (and any relevant
Construction Milestone Dates) will be reduced by the number of unused
days in the Stage 2 Existing Site Contamination Program Allowance and
Project Co will pay to the State the fixed rate for any Builder's
prolongation costs set out in Annexure 27 for Existing Site
Contamination for each such unused day, except that such election of the
State shall not apply in respect of the Existing Site Remediation Zone
(Non- Basement) to the extent that a reduction in the Stage 2 Existing
Site Contamination Program Allowance for the Existing Site
Remediation Zone (Non-Basement) does not reduce the critical path time
to achieve the Date for Completion.
Legal\104938921.16 108
(e) (Reconciliation of costs): If the Project Director agrees that the amount stated in
Project Co's notice under Clause 7.5(g) accurately reflects the amount payable in
respect of the removal of the Stage 1 Existing Site Contamination and:
(i) the amount set out in Project Co's notice provided under Clause 7.5(g)
together with the amount payable to Project Co under this Clause 7.6
(inclusive of any delay costs) is less than the Existing Site Contamination
Allowance, the amount of such difference will be Moneys Owing payable
by Project Co to the State on demand; or
(ii) the amount set out in Project Co's notice under Clause 7.5(g) together
with the amount payable to Project Co under Clause 7.6 (inclusive of any
delay costs) is greater than the Existing Site Contamination Allowance,
the State will pay the amount of such difference either (at the State's
absolute discretion):
A. as a lump sum payment on Stage 2 Completion; or
B. by way of adjustment to the Quarterly Service Payment over

the Term,
in accordance with the Change Compensation Principles.
7.7 No compensation for remediation costs

Notwithstanding Clauses 7.3, 7.4, 7.5 or 7.6, the State will not be liable to pay for or contribute
to the cost of any Contamination remediation works if and to the extent that the need for those
remediation works, or the amount of the costs incurred, or the legal obligation to carry them
out, arose as a result of:
(a) any wilful or negligent act or omission on the part of Project Co or any Project Co
Associate;
(b) any breach by Project Co of its obligations under any Project Document to which
the State is a party; or
(c) any other action on the part of Project Co that was not required in order to provide
the Services in accordance with this Agreement or meet Project Co's other
obligations under this Agreement.
7.8 Indemnity by Project Co

Project Co indemnifies and will keep indemnified the State and the State Associates from and
against all Liabilities and Claims of every kind against any of them arising out of or in respect
of:
(a) subject to paragraph (b), any Contamination existing in, on, under or which has
emanated or is emanating from the Site, the Facility, the Existing Site or the
Existing Facility but not:
(i) the Existing Site Contamination or Contamination described in

Clause 7.3(b);
(ii) Contamination which has emanated or is emanating from the Site, the
Existing Site or the Existing Facility prior to Financial Close (except to
the extent caused or contributed to by Project Co or a Project Co
Associate or to the extent Project Co is required to manage the risk
Legal\104938921.16 109
pursuant to this Agreement because it is undertaking the Works described
in Clause 6.1 and did not do so); or
(b) any Contamination which Project Co has failed to clean up as required by

Clause 7.1 (including Contamination as a result of the events described in
Clause 7.3(b)); and
(c) any injury, loss or damage suffered by any occupier, user or visitor to the Site after
Financial Close as a result of or in connection with the matters referred to in
paragraphs (a) and (b),
provided that if any such Liabilities and Claims arise from:
(d) the existence (rather than the volume or extent) of Pre-Existing Contamination that
was not Known Pre-Existing Contamination, then the indemnity will be limited to
20% of that Liability or Claim. This limitation does not apply to the extent that any
Liability or Claim arises from the volume or extent of Contamination being greater
than that identified as Known Pre-Existing Contamination; or
(e) the unlawful or negligent acts or omissions of, or wilful misconduct by, the State or
any State Associate or the breach of any Project Document by the State, then the
indemnity will not apply.
7.9 Release by Project Co

Subject to the State's obligations to make any payments pursuant to Clauses 7.3, 7.5 and 7.6
and to Clauses 7.8(d) and 7.8(e) and subject to Project Co's rights in respect of a Compensable
Extension Event, Project Co releases the State and the State Associates from all Liabilities and
Claims arising out of or in respect of:
(a) any Contamination existing in, on, or under the Site, the Existing Site or the
Existing Facility as at Financial Close or which has emanated from the Site, the
Existing Site or the Existing Facility at any time after Financial Close; and
(b) any Contamination which migrates onto or into the Site from adjoining premises or
sites after Financial Close caused by Project Co or any Project Co Associates,
except as a result of the events described in Clause 7.3(b), but this exception will only apply to
the extent that the event giving rise to the Liability or Claim has not been caused by a failure
by Project Co to remediate, clean up or decontaminate the Contamination to which
Clause 7.3(b) applies in accordance with its obligations under this Agreement.
7.10 General Environmental compliance

(a) For the period from Financial Close to the Termination Date, Project Co covenants
(other than in respect of the Hospital Functions) not to use the Site or allow the Site
to be used, or perform the Services or allow the Services to be performed, so that:
(i) any industrial waste or hazardous substance is abandoned or dumped on

the Site or handled in a manner which is likely to cause hazard to persons,
the Facility or the Environment or a breach of any Law or Authorisation
relating to the Environment; or
(ii) except as authorised by an Authorisation, any other substance is

deposited on or released or emanates from or any odour, vibration, noise
or other thing is released or emanates from the Site such that a state of
Contamination occurs.
Legal\104938921.16 110
(b) Without limiting paragraph (a), for the period from the commencement of the
Stage 2 Site Licence to the Date of Stage 2 Completion, Project Co covenants (other
than in respect of the operation of the Existing Facility) not to use the Stage 2 Site
or allow the Stage 2 Site to be used so that:
(i) any industrial waste or hazardous substance is abandoned or dumped on

the Stage 2 Site or handled in a manner which is likely to cause hazard to
persons, the Existing Facility, the Retained Buildings or the Environment
or a breach of any Law or Authorisation relating to the Environment; or
(ii) except as authorised by an Authorisation, any other substance is

deposited on or released or emanates from or any odour, vibration, noise
or other thing is released or emanates from the Stage 2 Site such that a
state of Contamination occurs.
(c) Project Co must comply with all Laws relating to the Environment and obtain and
maintain in full force and effect and comply with the terms of all Authorisations
required in order to release or emit anything from the Site or the Existing Site into
the air or water or on to the ground or otherwise into the Environment or to emit
any substantial noise.
(d) Project Co must maintain and operate an environmental management system

certified to ISO14001 and in accordance with all applicable Laws and Quality
Standards relating to the Environment in accordance with the requirements of
Section 2.4.6(a) of the Services Specifications.
8. Native Title, Artefacts and Heritage Claims

8.1 Native Title
(a) Project Co acknowledges and agrees that the State has made no representation,
given no advice and given no warranty as to the existence or otherwise of any
native title in respect of the Site or any part of the Site.
(b) Despite anything to the contrary contained in this Agreement, as between the State
and Project Co:
(i) the State is responsible for dealing with any Native Title Claim in respect
of any part of the Site; and
(ii) the State will be responsible for the payment of any compensation or
other moneys required to be paid to the native title holders of the Site or
any part of the Site pursuant to a Native Title Claim by those native title
holders.
8.2 Artefacts
(a) All Artefacts discovered on or under the surface of the Site will, as between the
State and Project Co, be the absolute property of the State.
(b) Project Co must:
(i) at all times permit and allow the Project Director or any other person
authorised by the State to watch or examine any excavations on the Site;
Legal\104938921.16 111
(ii) at its own cost and expense, take every reasonable precaution to prevent
Artefacts being damaged or removed until appropriate arrangements for
dealing with, or removing, the Artefacts have been made;
(iii) immediately upon discovery of any Artefact notify the Project Director of
that discovery; and
(iv) comply at its own cost and expense (without limiting Project Co's right to
seek reimbursement or compensation pursuant to this Agreement) with
any Authorisation imposed upon the State or Project Co in respect of any
Artefact.
8.3 General Provisions for Native Title, Artefacts and Heritage Claims
(a) (limited liability): Except as otherwise expressly provided under this Agreement,
the State will not be liable to Project Co for any Liability which Project Co suffers
or incurs as a result of either:
(i) a Native Title Claim or Heritage Claim in respect of any part of the Site;
or
(ii) the discovery of Artefacts in any part of the Site.
(b) (continue performance): If either:
(i) there is a Native Title Claim or Heritage Claim with respect to; or
(ii) an Artefact is discovered in,
the Site or any part of it, then Project Co must:
(iii) continue to perform its obligations under this Agreement, except to the
extent otherwise:
A. directed by the State;
B. ordered by a court or tribunal; or
C. required by Law; and
(iv) at the request of the State and, in relation to external or third party costs
and expenses actually incurred by Project Co (other than the Builder's
internal costs for the first 20 Business Days) at the State's cost and
expense, provide all reasonable assistance in connection with dealing
with the Native Title Claim or Heritage Claim or discovery of the
Artefact (including giving the State and any other persons authorised by
the State access to the Site or that part of the Site which is the subject of
the Native Title Claim or Heritage Claim, or on which the discovery of
the Artefact was made (as appropriate) when reasonably required by the
State for that purpose).
(c) (Suspension): The State may, at any time after becoming aware of a potential
Native Title Claim or Heritage Claim, by written notice direct Project Co to suspend
the execution of any or all of the Works until the State gives Project Co further
written notice.
(d) (Compensable event): Subject to paragraphs (e) and (f), if a direction, order or
requirement as referred to in subparagraph (b)(iii) or paragraph (c) obliges Project
Legal\104938921.16 112
Co to suspend or cease undertaking the execution of the Works or the delivery of
the Services, then:
(i) if during the Design and Construction Phase, this will be a Compensable
Extension Event, to the extent of any cessation or suspension of the
execution of the Works; and
(ii) if during the Operating Term, this will be a Compensable Intervening

Event to the extent of any interference in the delivery of Services.
(e) (Eligible Claim): If an Eligible Claim results from the breach by Project Co of its
obligations under Clause 8.2 in dealing with discovered Artefacts, then any
direction, order or requirement referred to in subparagraph (b)(iii) which relates to
that Eligible Claim will not be a Compensable Extension Event or a Compensable
Intervening Event.
(f) (Known Heritage Claim): A Known Heritage Claim is not an Eligible Claim, a
Compensable Extension Event or a Compensable Intervening Event.
9. Assessment of Scope and Risks

9.1 Assessment of Scope of Project and Risks
Project Co warrants that prior to the date of this Agreement it has done everything that would
be expected of a prudent, competent and experienced contractor, service provider and project
manager in:
(a) assessing the scope of all work, services and other activities to be undertaken in
implementing all aspects of the Project and the risks which it is assuming under this
Agreement; and
(b) satisfying itself that the Completion Payment and Service Payments will contain
sufficient allowances for that full scope of work, services and other activities to be
undertaken in implementing the Project and to protect it against any of these risks
eventuating.
9.2 Project Co's own Investigations

(a) Without limiting Clause 9.1, Project Co warrants that prior to the date of this
Agreement it has:
(i) examined the Site and its surroundings and has satisfied itself fully as to
the Site Conditions which may affect its performance of the Works;
(ii) examined the Existing Site and its surroundings and has satisfied itself
fully as to the Site Conditions and the condition of the Existing Facility
which may affect its performance of the Stage 2 Works;
(iii) informed itself completely of the nature of the work and materials
necessary for the design and construction of the Facility, demolition of
the Existing Facility and the provision of the Services and the means of
access to and facilities at the Site and the Existing Site and transport
facilities for deliveries to or from the Site and the Existing Site;
(iv) informed itself completely of the condition of the Retained Buildings and
the nature of the work and materials necessary to refurbish and
incorporate the Retained Buildings into the Facility and into the
Legal\104938921.16 113
obligations of Project Co to provide the Services to the Services
Specifications;
(v) informed itself of all regulatory requirements of the Governmental

Agencies in relation to the Works and the provision of the Services
generally and, without limitation, in relation to measures necessary to
protect the Environment from any adverse effect or damage arising from
execution of the Works; and
(vi) obtained all appropriate professional and technical advice on all matters
and circumstances in respect of the matters referred to in this Clause 9.2.
(b) Project Co acknowledges that the State has relied on the warranties in this Clause 9
in entering into the Project Documents.
9.3 Information Provided

Without limiting Clause 9.5:
(a) the State does not warrant, guarantee or make any representation about the accuracy
or adequacy of, and owes no duty of care with respect to, any information, data and
documents (including the Information Documents) obtained by the State from
investigations carried out by the State, or on its behalf by independent consultants
as to the conditions on, in, under or in the vicinity of the Site, the Existing Site or
the Existing Facility and made available to Project Co, including the assessment of
Pre-Existing Contamination and the Site Information Reports;
(b) Project Co acknowledges that such information, data and documents (including the
Information Documents):
(i) are provided for information purposes only;
(ii) all intellectual property rights therein remain the property of the State or
State Associates (as the case may be); and
(iii) do not form part of this Agreement or constitute an invitation, offer or

recommendation by or on behalf of the State or any State Associates.
(c) subject to Clause 9.6, to the extent permitted by Law, the State has no Liability nor
will it be liable upon any Claim by Project Co arising out of or in any way in
connection with:
(i) the provision of, or the purported reliance upon, or use of, that
information or data (including the Information Documents) by Project Co
or any other person to whom the information or data (including the
Information Documents) is disclosed including where contained in Site
Information Reports; or
(ii) a failure to provide any other information or data to Project Co; and
(d) Project Co acknowledges that the Site Information Reports were prepared by
independent third party consultants and that the State is a mere conduit in respect of
such reports and the information contained therein.
Legal\104938921.16 114
9.4 Release by Project Co
Subject to Clause 9.6, Project Co releases and indemnifies the State and each State Associate
from and against:
(a) any Claim against the State or any State Associate by, or Liability of the State or
any State Associate to Project Co, any Project Co Associate and any other person to
whom the information or data referred to in Clause 9.3 is disclosed by or on behalf
of Project Co or any Project Co Associate; and
(b) without being limited by paragraph (a), any costs, losses or damages suffered or
incurred by the State,
arising out of or in any way in connection with:
(c) the provision of, or the purported reliance upon, or use of, the information or data
(including the Information Documents) referred to in Clause 9.3 by Project Co, or a
Project Co Associate or any other person to whom the information or data
(including the Information Documents) is disclosed by or on behalf of Project Co or
a Project Co Associate; or
(d) the information or data (including the Information Documents) being relied upon or
otherwise used in the preparation of any information or document by or on behalf of
Project Co or a Project Co Associate, including any information or document which
is "misleading or deceptive" or "false and misleading" (within the meaning of those
terms in sections 52 and 53 (respectively) of the Trade Practices Act 1974 (Cth), or
any equivalent provisions of State or Territory legislation); or
(e) breach of this Clause 9.4 by Project Co.
9.5 No Warranties
Project Co:
(a) acknowledges that the State makes no representation, warranty or guarantee with
respect to the Site, title to the Site, the Site Conditions, the Existing Site, the
condition of the Existing Facility, the condition of the Retained Buildings or the
adequacy of the Site or the Retained Buildings for the Project; and
(b) accepts the Site notwithstanding:
(i) any existing or future third party claims including Heritage Claims,
Native Title Claims, rights or interests (whether or not registered); and
(ii) all Site Conditions and the condition of the Retained Buildings; and
(c) accepts the Existing Site and the Existing Facility, for the purposes of the Stage 2
Works, notwithstanding Site Conditions and the condition of the Existing Facility,
subject only to the rights expressly granted to Project Co by this Agreement in respect of
Eligible Claims, Pre-Existing Contamination other than Known Pre- Existing Contamination
and other Contamination for which the State is responsible under the express terms of this
Agreement.
Legal\104938921.16 115
9.6 Site Information Reports
If:
(a) the contents of a Site Information Report is not accurate in accordance with its
terms;
(b) Project Co is required to undertake additional work and incur additional costs as a
consequence of inaccuracies in the Site Information Report;
(c) Project Co has provided the State with a Change Notice within 10 Business Days of
the becoming aware of any such inaccuracy;
(d) the provider of the Site Information Report has not executed a Site Information
Report Deed Poll in respect of that Site Information Report;
the State shall pay Project Co in respect of any additional work required to be undertaken by
Project Co as a consequence of the inaccuracy in the Site Information Report in accordance
with the Change Compensation Principles, save that the State's liability under this Clause and
under Clause 32.13 in respect of an inaccurate Site Information Report shall be limited by the
Site Information Report Limitation of Liability.
10. Representations and Warranties

10.1 General Representations and Warranties
Project Co represents and warrants for the benefit of the State that:
(a) (status): it is a corporation limited by shares duly and validly incorporated and
existing under the Corporations Act;
(b) (power): it has, and has properly exercised, the power to enter into, and to perform
and observe its obligations under, the Project Documents;
(c) (corporate authorisations): it has taken all necessary corporate action to authorise,
execute and fulfil its obligations under each Project Document and any other
instrument required under any Project Document;
(d) (documents binding): each Project Document to which it is expressed to be a party

is its legal, valid and binding obligation, enforceable against it in accordance with
its terms, subject only to a court's exercise of its discretion in relation to equitable
remedies and to the application of laws which affect creditors' rights generally;
(e) (transactions permitted): the execution of and fulfilment of its obligations under
any Project Document to which it is expressed to be a party and each transaction
contemplated under that document does not and will not violate:
(i) any Law, treaty, judgment, ruling, order or decree of a Governmental

Agency binding on it;
(ii) its constitution; or
(iii) any other document or agreement which is binding on it or its assets,
and does not and will not create or impose a Security Interest on any of its assets
other than a Permitted Lien, allow a person to accelerate or cancel any obligation
with respect to Financial Indebtedness, or constitute an event of default,
Legal\104938921.16 116
cancellation event, prepayment event or similar event (whatever called) under any
agreement relating to Financial Indebtedness whether immediately or after notice or
lapse of time or both;
(f) (litigation): there are no litigation, arbitration or administrative proceedings taking

place, pending or, so far as it is aware, threatened or likely against or affecting it or
its property, the adverse determination of which might have a Material Adverse
Effect;
(g) (Liquidation): it is not in Liquidation and no matter relating to it or any of its

Subsidiaries is the subject of a direction under, or having effect as if it were a
direction under, Section 14 of the Australian Securities and Investments
Commission Act 2001 (Cth), or the subject of any investigation under, or taken to
be under, the Australian Securities and Investments Commission Act 2001 (Cth);
(h) (no Event of Default): no Event of Default has occurred and is subsisting at the
date of this Agreement;
(i) (no misrepresentation): all the information which it provided or will provide to the
State is or will be true and correct in all respects at the date of this Agreement or of
its later provision, and is not, by omission of information, or otherwise, misleading;
(j) (copies of documents): all copies or originals of documents or instruments

provided to the State under or in connection with any Project Document are or will
be, at the date of this Agreement or of their later provision, true copies or originals
(as the case may be) of the documents or instruments which they purport or have
been represented to be;
(k) (no trust): it is not acting and will not act at any time during the Term as a trustee
or an agent, other than as trustee of the CHP Unit Trust;
(l) (accounts):
(i) its most recent consolidated and unconsolidated audited (if the
requirement for auditing is applicable) accounts give a true and fair view
of its and its Subsidiaries' state of affairs as at the date to which they
relate and the results of its and its Subsidiaries' operations for the
accounting period ended on such date;
(ii) there has been no material change in its or its Subsidiaries' state of affairs
since such date;
(iii) such accounts have been prepared in accordance with the Corporations
Act and accounting principles and practices generally accepted in
Australia consistently applied, except to the extent of departures from
such principles and practices disclosed in such accounts; and
(iv) there is no Financial Indebtedness or any other contingent liability which

is not disclosed in such accounts;
(m) (no default):
(i) it is not in default under any document or agreement binding on it or its

assets; and
(ii) nothing has occurred which would, with the giving of notice and/or lapse
of time, constitute an event of default, cancellation, prepayment event
Legal\104938921.16 117
(pursuant to a bona fide right to exercise prepayment) or similar event
(whatever called) under any such document or agreement,
and which would have a Material Adverse Effect;
(n) (no undisclosed agreement): there are no documents or agreements in existence at

the date of this Agreement and there will not be any documents or agreements in the
future which have not been or will not be disclosed to the State which are material
in the context of the Project Documents or the Project or which have the effect of
varying any Project Document and, in respect of Project Documents to which the
State is not a party, performance of which would have a Material Adverse Effect;
(o) (Authorisations): in respect of each Authorisation which is required in connection

with:
(i) the execution and delivery of or performance of its obligations under the
Project Documents to which it is a party and the transactions
contemplated by the Project Documents; or
(ii) the validity and enforceability against it of the Project Documents,
the following apply:
(iii) the Authorisation:
A. to the extent necessary at the time that this representation and

warranty is made, has been obtained and effected and is in full
force and effect;
B. if not already obtained and effected as required under

subparagraph A, will be obtained and effected in a timely
fashion so as to ensure that it will not undertake its
obligations under any of the Project Documents or any of the
transactions contemplated by those documents to which that
Authorisation relates without that Authorisation; and
C. has not been revoked, terminated or permitted to lapse, unless

no longer required;
(iv) no Governmental Agency or any other person has commenced, or

threatened to commence, proceedings in respect of that Authorisation;
and
(v) it has:
A. complied with the Authorisation to the extent that it has

commenced to undertake its obligations under the Project
Documents and the transactions contemplated by those
documents to which that Authorisation relates; and
B. paid all applicable fees for the Authorisation;
(p) (title):
(i) it is the sole beneficial owner of all assets included in its latest audited
(where relevant) accounts free and clear of any other third party or
interest whatsoever including any Security Interest other than a Permitted
Lien; and
Legal\104938921.16 118
(ii) none of its assets are subject to any Security Interest other than a
Permitted Lien, nor any agreement to grant such a Security Interest,
other than Security Interests created by Finance Documents to which the State has
given its prior consent; and
(iii) on delivery to the State of the Facility and each item of Plant and
Equipment pursuant to this Agreement at Stage 1 Final Completion, the
Facility and that item of Plant and Equipment will vest in the State as sole
beneficial owner, free of all Security Interests including all Permitted
Liens and Security Interests created by the Finance Documents;
(q) (no immunity): neither it nor any of its assets enjoys any immunity from set-off,
suit or execution;
(r) (shareholding and control):
(i) (subject to any Change in Control to which the State consents pursuant to
Clause 61) all the issued ordinary or voting share capital of Project Co is
held and beneficially owned as set out in Schedule 16;
(ii) no other person has any legal or beneficial interest in Project Co and there
is no agreement, arrangement or understanding in existence under which
further shares or other interests in Project Co may be issued to any person
or under which any person is entitled to call for the issue of any shares or
other interests; and
(iii) as at the date of this Agreement and subject to any Change in Control to
which the State consents pursuant to Clause 61, each person or body
corporate in Control of Project Co is as set out in Schedule 16;
(s) (Project liabilities): Project Co has not incurred any liabilities or entered into any
document or agreement in respect of the Project, other than the Project Documents
and the Finance Documents, or as contemplated under any Project Document or
Finance Document and incurred or entered in accordance with any Project
Document or Finance Document or otherwise as may become necessary in respect
of the Project; and
(t) (documentation): Project Co has the beneficial right, title and interest to and in, or
a licence in respect of the Design and Construction Documents and any other
materials or information prepared by, or on behalf of, Project Co under this
Agreement for the purpose of meeting its obligations under this Agreement.
10.2 Design, Construction and Maintenance Warranties

Without limiting Clause 10.3, Project Co warrants that:
(a) (Design Brief): it has checked and carefully considered the Design Brief and other
requirements, with respect to design and construction, of this Agreement and that
they are proper, adequate and suitable for designing and constructing a Facility
which is Fit for the Intended Purposes;
(b) (Fit for Intended Purposes): it has checked and carefully considered and
understands fully what is meant by "Fit for the Intended Purposes" and how to
ensure the Facility will meet this requirement;
Legal\104938921.16 119
(c) (Design): the design of the Facility will be completed in accordance with the
requirements of this Agreement, and construction in accordance with that design
will enable the Facility to be Fit for the Intended Purposes and otherwise meet the
standards required by this Agreement;
(d) (full liability for design): its obligations under, and the warranties given in, this
Clause 10.2 will remain unaffected and that it will bear and continue to bear full
liability and responsibility for the design and construction of the Facility
notwithstanding:
(i) any design work carried out by Project Co or by others prior to the date of
this Agreement and incorporated into this Agreement; or
(ii) any review or approval of, comment upon, or failure to comment on such
design by the State or anyone on its behalf, prior to the date of this
Agreement;
(e) (Construction): it will undertake the Works in accordance with such design and in
accordance with Best Construction Practices; and
(f) (Facility): on and from Stage 1 Final Completion the Stage 1 Facility will, and on
and from Stage 2 Completion the Facility will:
(i) be Fit for the Intended Purposes; and
(ii) without limiting subparagraph (i), enable Project Co at all times during
the Term to provide the Services in accordance with this Agreement; and
(g) (Best Operational Practice): it will undertake the operation of the Facility in
accordance with Best Operational Practices; and
(h) (expertise): it has or will procure the resources, expertise and experience necessary
to carry out the Works and deliver the Services in accordance with this Agreement.
10.3 Project Co warrants documentation

(a) the Design and Construction Documents comply with the requirements of this
Agreement;
(b) the preparation of the Design Documentation in accordance with the Design
Requirements will ensure that it complies with the requirements of, and that Project
Co otherwise fulfils its obligations under, this Agreement;
(c) construction in accordance with the Design and Construction Documents will
ensure that Completion is achieved and will otherwise enable Project Co to
discharge its obligations under this Agreement; and
(d) maintenance and repair of the Facility in accordance with the Services
Specifications will ensure that the Services comply with, and otherwise enable
Project Co to discharge its obligations under, this Agreement.
Legal\104938921.16 120
10.4 No State Warranties
The State does not warrant, guarantee or make any representations as to whether:
(a) the Design and Construction Documents comply with the requirements of this
Agreement;
(b) preparation of Design Documentation in accordance with the Design Requirements

will ensure compliance with the requirements of, or that Project Co otherwise
discharges its obligations under, this Agreement;
(c) construction in accordance with the Design and Construction Documents will
ensure that Completion is achieved or will otherwise enable Project Co to discharge
its obligations under this Agreement; or
(d) maintenance and repair of the Facility in accordance with the Services
Specifications will ensure that the Services comply with, or otherwise enable
Project Co to discharge its obligations under, this Agreement.
10.5 Warranties Unaffected

Except as qualified (if at all) in accordance with the express written agreement of the State, the
warranties given in Clauses 10.2 and 10.3 will remain unaffected and Project Co will be fully
liable, and continue to have full liability, for the Project, notwithstanding any review of,
comments upon, or any endorsement or failure to endorse, or failure to review or comment
upon any Design Documentation, the Works, the Facility, any Modification, any Defect or the
Services, by the State, a State Delegate, the Hospital Operator, any other State Associate, the
Project Control Group, the Independent Reviewer or the Facility Management Committee.
10.6 Reliance on Representations and Warranties

Project Co acknowledges that the State has relied on the representations and warranties in this
Clause 10 in entering into the Project Documents.
11. Security for Works

11.1 Performance Bonds
Project Co will procure Performance Bonds in favour of Project Co for the following amounts
and durations:
(a) subject to Clause 11.4, the Construction Bond, for an amount not less than 5% of
the initial Contract Price as defined under the Construction Contract for a period
commencing not later than the date of Financial Close and terminating not earlier
than 3 months after the Date for Stage 1 Final Completion as at the Date of this
Agreement; and
(b) subject to Clause 11.5 the Post Completion Bond, for an amount not less than the
sum of 2.5% of the Stage 1 Contract Price and 5% of the initial Stage 2 Contract
Price for the period commencing not later than the date of Stage 1 Final Completion
and terminating not earlier than 12 months after the Date of Stage 2 Completion.
11.2 Return of Bonds

(a) Project Co may only return the Construction Bond on or after the Date of Stage 1
Final Completion if Project Co has been provided with the Post Completion Bond
in accordance with Clause 11.3; and
Legal\104938921.16 121
(b) subject to Clause 11.5, Project Co may return that part of the Post Completion Bond
so that it continues to hold the Post Completion Bond in an amount no less than:
(i) the sum of 5% of the initial Stage 2 Contract Price on or after the date
which is 12 months after the Date of Stage 1 Final Completion; and
(ii) an amount not less than 2.5% of the Stage 2 Contract Price on or after the
Date of Stage 2 Completion,
and may return the balance of the Post Completion Bond, on or after the date which
is 12 months after the Date of Stage 2 Completion.
11.3 Time for Provision of Performance Bonds

Project Co must procure:
(a) the Construction Bond prior to satisfaction of the Conditions Precedent; and
(b) the Post Completion Bond as a precondition to Project Co handing back the
Construction Bond in accordance with Clause 11.2.
11.4 Replacement Construction Bond

(a) Project Co must, no later than 2 months before the expiry of the Construction Bond,
if Stage 1 Final Completion has not at that time occurred, procure the issue of a
replacement Performance Bond in its favour and in the form and for the amount of
the Construction Bond it is replacing and which expires no earlier than 8 months
after its date of issue.
(b) Project Co must repeat compliance with paragraph (a) at all times until the later of:
(i) the Date of Stage 1 Final Completion; and
(ii) the date on which Project Co procures the Post Completion Bond in
accordance with Clause 11.2(a).
11.5 Replacement Post Completion Bond

If 1 month prior to the expiry of the Post Completion Bond there are Defects outstanding or
Claimed by the State to be outstanding which are the subject of a notice or notices under
Clause 31, Project Co must procure a replacement Performance Bond in its favour and in the
form of the Post Completion Bond it is replacing but which:
(a) is in an amount no less than 120% of the amount required to remedy the Defects the
subject of the notice or notices under Clause 31, as reasonably determined by the
Independent Reviewer; and
(b) expires 1 month after the date on which the Project Director reasonably determines
that the Defect or Defects are likely to be remedied.
11.6 New Performance Bond on rating downgrade or loss of licence

If the current issuer of a Performance Bond ceases to have the Required Rating or ceases to be
the holder of a current licence issued by APRA, Project Co must promptly (and in any case not
later than 10 Business Days after demand by the State), procure a replacement Performance
Bond in favour of Project Co issued by a financial institution which holds a current licence
Legal\104938921.16 122
issued by APRA and has the Required Rating, on the same terms as, and for the face value of,
the Performance Bond it is replacing.
11.7 Project Co to make demand

(a) If Project Co fails to:
(i) do all things required of it under Clauses 51 or 52, to the extent any
Major Default is subsisting;
(ii) rectify or complete all Outstanding Items within the Outstanding Items
Completion Period; or
(iii) rectify any Defect within the time required under a notice given under
Clause 31,
the State may take action to rectify the failure and the reasonable costs and expenses
incurred by the State to rectify such failure will be Moneys Owing by Project Co,
payable on demand, and without limiting its rights under this Agreement or at Law
in respect of such failure the State may, subject to paragraph (c), require Project Co
to call on any Performance Bond to satisfy such Moneys Owing.
(b) Nothing in this Clause 11.7 limits:
(i) Project Co's obligations to achieve Completion, rectify all Defects,

deliver the Services and rectify or complete the Outstanding Items within
the Outstanding Items Completion Period;
(ii) the parties' rights and obligations under the Financier Direct Deed; or
(iii) any warranties given by Project Co in this Agreement,
and is without prejudice to the State's right to Abate the Service Payments.
(c) Any right of the State to require Project Co to call on the Construction Bond or Post
Completion Bond under this Agreement or Clause 15 of the Financier Direct Deed
shall be limited in amount and duration to the minimum requirements that are set
out in this Clause 11, notwithstanding that the amount or duration of either the
Construction Bond or Post Completion Bond procured under Clause 11.1 may be
greater than these minimum requirements.
12. Subcontracting
12.1 Subcontracting over Term
Project Co may subcontract any part of the Works or the provision of any part of the Services
at any time during the Term, but only in the manner permitted by this Clause 12.
12.2 Approved Subcontractors and Subcontracts

The State approves each Subcontractor listed in Schedule 25 and Clauses 12.3(e) and 12.4
(other than 12.4(c) and 12.4(d) ) shall not apply in respect of such Subcontractors.
Legal\104938921.16 123
12.3 Requirements for Subcontracting
Project Co must not engage or permit the engagement of any Subcontractor or enter into or
permit the entry into of any Subcontract unless:
(a) the proposed Subcontractor:
(i) has the financial capacity, experience and capability to perform the
obligations of Project Co to be Subcontracted, to at least the standards
required by this Agreement;
(ii) to the best of its knowledge after all due investigation is a fit and proper
person to enter into a Subcontract in respect of the Project;
(iii) holds and will maintain public and product liability, professional
indemnity insurances (to the extent applicable) and workers
compensation cover adequate to cover its liability in connection with its
performance of the Subcontract, in each case in accordance with
Clause 48; and
(iv) is bound under the Subcontract to comply with the requirements of

Clause 12.3;
(b) the Subcontract contains further provisions:
(i) prohibiting the further subcontracting of any obligations without first

complying with this Clause 12;
(ii) expressly recognising and permitting the exercise by the State of its rights
under Clause 13 (National Code), Clause 15.3 (to access information),
Clauses 18.2, 18.4, 18.6 (Intellectual Property and Moral Rights), Clause
49.1 (Casualty Occurrence), Clause 50 (in an Emergency), Clause 50 (to
step-in in default), Clauses 52.1 and 52.2 (to remedy Default), Clause 53
(to terminate early) Clause 51.12 (Actions on Default Termination
Event), Clause 60.2 (Privacy), Clause 60.4 (no signage or use of name),
Clause 62 (probity) and Clause 63 (Confidentiality);
(iii) imposing a duty on the Subcontractor not to erect any signage or use the
name "Royal Children's Hospital" on similar terms to Clause 60.4; and
(iv) imposing a duty of confidentiality on the Subcontractor in relation to all

Confidential Information on similar terms to Clause 63.1; and
(v) otherwise consistent with Project Co's obligations under this Agreement;
(c) Project Co provides to the relevant State Delegate, at least 10 Business Days before
it proposes to execute the Subcontract:
(i) the name of the proposed Subcontractor, a description of the works or

services to be Subcontracted and details of the total consideration payable
under the Subcontract; and
(ii) a warranty by Project Co, in favour of the State that the criteria in
paragraphs (a) and (b) are satisfied in respect of the proposed
Subcontractor and Subcontract;
Legal\104938921.16 124
(d) if the State requires to carry out Probity Investigations, the State's probity
requirements as described in Clause 12.5 are satisfied;
(e) where required under Clause 12.8, the prior approval of the State is obtained, and in
this situation the State Delegate will give such approval where in its reasonable
opinion:
(i) the criteria described in paragraphs (a) to (d) are satisfied; and
(ii) where the proposed Subcontractor is the Builder or the Facility

Management Subcontractor a Parent Guarantee is given by a Parent
Guarantor in a form reasonably satisfactory to the State and the
Subcontractor enters into a direct deed, substantially in the same terms as
the Direct Deed.
12.4 Information and Consents

If the State Delegate advises that it wishes to investigate the proposed Subcontractor or
Subcontract further, Project Co must promptly provide to the relevant State Delegate if
requested by the State Delegate:
(a) sufficient information to demonstrate the financial capacity, experience and

capability of the Subcontractor to perform the obligations to be Subcontracted;
(b) evidence that the insurance required from the Subcontractor are in full effect;
(c) a copy of the proposed Subcontract; and
(d) subject to Clause 62.6(i) the written consent as required by Law, to a Probity
Investigation of each person in respect of whom the State advises Project Co it
requires a Probity Investigation, in relation to the Subcontract,
and the State Delegate will, when he or she has sufficient information and the necessary
consents, advise Project Co of the State's decision to give or refuse approval or to impose
conditions pursuant to Clause 12.5, within the Review Period.
12.5 Probity Requirements

If following a Probity Investigation the State is of the opinion that it is not desirable for a
Relevant Person to take part in the management or performance of a Subcontract, the State
Delegate may:
(a) refuse to approve the Subcontract; or
(b) approve the Subcontract on condition that the relevant person or persons:
(i) not take part in the management or performance of the Subcontract;
(ii) not be allowed to access the Site; and
(iii) not be given Hospital Information,
or on such other conditions as the State considers necessary to quarantine that

person from the Project and on condition that the Subcontractor provides its written
undertaking to the State to comply with such conditions.
Legal\104938921.16 125
12.6 Project Co to Monitor and Comply
Project Co will:
(a) monitor and ensure compliance by each Subcontractor with:
(i) the conditions (if any) imposed pursuant to Clause 12.5; and
(ii) its Subcontract and any related direct deed;
(b) comply with its obligations under all Subcontracts;
(c) advise the State Delegate of any early termination of the Subcontract promptly upon
its terminating, or becoming aware of termination by the Subcontractor of, that
Subcontract;
(d) provide to the relevant State Delegate a copy of each executed Subcontract,
certified to be a true and complete copy, upon request by the State Delegate;
(e) not make any amendment to a Subcontract which:
(i) changes any of the requirements of Clause 12.3(a) or (b);
(ii) increases the total consideration payable beyond the relevant threshold
amount in Clause 12.8; or
(iii) relates to health or safety issues in relation to the Project, the Site or the
Facility,
without first advising the relevant State Delegate in writing of those proposed
amendments and, if so requested, providing such further information as the State
Delegate reasonably requires to enable the State Delegate to decide to give or refuse
approval to such amendments where the State Delegate requires such review and
approval rights, and any decision will be made by the State Delegate within the
Review Period.
12.7 Relevant State Delegate

The relevant State Delegate, for the purposes of this Clause 12, is:
(a) the Project Director in respect of any Subcontract relating to the design,
construction and implementation of the Works or any Subcontracting of the
Services at a time prior to the appointment of the Contract Administrator; and
(b) for all other Subcontracting, the Contract Administrator.
12.8 Where Approvals not Required

The approval of the State is not required for, and Clause 12.4 (other than Clause 12.4(d)) will
not apply to, any Subcontract which:
(a) when aggregated with any other Subcontract to that Subcontractor, has a total
consideration of no more than:
(i) $15 million, in the case of a Subcontract relating to the design,

construction or implementation of the Works; or
Legal\104938921.16 126
(ii) $750,000 annually in the case of a Subcontract of any part of any
Services,
(each threshold amount to be Indexed by the CPI Multiplier (C) on each anniversary
of the Date of this Agreement); and
(b) does not materially:
(i) relate to; or
(ii) impact on,
health or safety issues in relation to the Project, the Site or the Facility.
12.9 Replacing Subcontracts during Operating Term

If any Subcontract to provide any of the Services terminates for any reason (including on a
retendering under Clause 39) or the Subcontractor ceases to perform its obligations under the
Subcontract and a replacement Subcontract is not or will not be appointed in accordance with
this Clause 12 to commence provision of the Services within 10 Business Days after that
termination or cessation, then Project Co will at its own cost, if requested by the Contract
Administrator:
(a) grant a licence to a person nominated by the Contract Administrator to provide the
relevant Services until a new Subcontractor is appointed in accordance with this
Clause 12 and (where relevant) Clause 39;
(b) ensure the effective and efficient handover of responsibilities to the new
Subcontractor of the relevant Services by:
(i) providing Handover Packages to the Contract Administrator (for the

benefit of its nominee) and to the replacement Subcontractor; and
(ii) promptly preparing and providing a handover plan to the Contract

Administrator and replacement Subcontractor as it is setting out the
proposed timetable and procedures for handover; and
(c) provide such further assistance as the Contract Administrator reasonably requires to
ensure that the relevant Services are provided to the Services Specifications,
notwithstanding the interim period before the replacement Subcontractor
commences provision of these Services.
12.10 Project Co Remains Liable

Project Co is:
(a) not relieved of any of its obligations and liabilities under this Agreement as a result
of any Subcontracting of those obligations and liabilities; and
(b) at all times responsible for the performance of all Subcontractors, and Project Co
acknowledges and agrees that breach by a Subcontractor of, or failure by a
Subcontractor to comply with the obligations of Project Co under the Project
Documents is a breach or failure of Project Co and that (for the purposes of Section
24A of the Wrongs Act 1958 (Vic)) Project Co is entirely responsible for any failure
to take reasonable care on the part of its Subcontractors,
Legal\104938921.16 127
notwithstanding that the approval of the relevant State Delegate may have been given or
withheld to any Subcontractor.
12.11 Security of Payment Act

If the Security of Payment Act applies to any Subcontract:
(a) Project Co must ensure that, within:
(i) 2 Business Days after any notice under the Security of Payment Act is
given to, or received by, Project Co from the Builder or the Facility
Management Subcontractor; or
(ii) 1 Business Day after notice of a Subcontractor's intention to suspend

work under a Subcontract pursuant to the Security of Payment Act is
given to, or received by, Project Co from any of its Subcontractors,
a copy of that notice is given to the State;
(b) if a Subcontractor becomes entitled to suspend work under a Subcontract pursuant

to the Security of Payment Act because of a failure by Project Co or any Project Co
Associates to pay moneys due and payable to the Subcontractor, the State may (in
its absolute discretion) pay to the Subcontractor the amount owing to the
Subcontractor in respect of that work, and any amount paid by the State shall
(except where Project Co or any Project Co Associate failed to pay monies due and
payable to the Subcontractor as a result of a breach of a Project Document by the
State) become Moneys Owing, due and payable on demand by Project Co to the
State; and
(c) Project Co must indemnify the State against all damages, losses, costs (including
legal costs and any amount the State may be obliged to pay to any Subcontractor
pursuant to the Security of Payment Act) and expense which are suffered or
incurred by the State by reason of Project Co's failure or Project Co's Associates
failure to pay any Subcontractor any moneys due and payable to that Subcontractor
under the Subcontract, the Security of Payment Act or otherwise at Law (except
where Project Co or any Project Co Associate failed to pay monies due and payable
to the Subcontractor as a result of a breach of a Project Document by the State). The
State's rights of indemnity are without prejudice to any other Liability of Project Co
to the State under the Project Documents.
13. Subcontractor Compliance with the National Code

13.1 General
(a) Project Co will ensure that the Builder and will require the Builder to ensure that all
other Building Subcontractors:
(i) comply with; and
(ii) otherwise at all times act consistently with,
the requirements and other provisions of the National Code and the Implementation
Guidelines in the implementation of the Project. Copies of the National Code and
the Implementation Guidelines are available at www.workplace.gov.au.
(b) Compliance with the National Code and the Implementation Guidelines does not
relieve Project Co from responsibility to perform this Agreement, or from liability
Legal\104938921.16 128
for any defect in the Works arising from compliance with the National Code or the
Implementation Guidelines by any Building Subcontractor.
13.2 Reporting
(a) Project Co will provide to the State Delegate reports as required by the National
Code and the Implementation Guidelines.
(b) Where a change under any Building Subcontract is proposed and that change would
affect compliance with the National Code or the Implementation Guidelines, Project
Co will submit a report to the State Delegate specifying the extent to which the
Relevant Building Subcontractor's compliance with the National Code or the
Implementation Guidelines will be affected.
13.3 Responsibility not affected

Project Co will not be relieved from its obligations under Clause 13.1 by:
(a) any reporting to the State Delegate as required by Clause 13.2; or
(b) any review of, comments upon, or failure to review or comment upon, or any other
direction by the State Delegate in relation to:
(i) Project Co's compliance or non-compliance with its obligations under

Clause 13.1; or
(ii) any report provided under Clause 13.2.
13.4 Records
(a) Project Co will ensure that the Builder maintains and requires all other Building
Subcontractors to maintain adequate records for monitoring compliance with the
National Code and Implementation Guidelines.
(b) Project Co will and will procure that all Building Subcontractors:
(i) provide the State Delegate, and those authorised by the State Delegate,
(including a person occupying a position in the Office of the Australian
Building and Construction Commissioner) (for the purposes of this
Clause 13.4 the "Delegates"), with access to the Site or any premises
where the Works are being carried out;
(ii) allow the Delegates to inspect and copy any record relevant to the Project
and Works;
(iii) allow and enable the Delegates to interview any person; or
(iv) provide to the Delegates any document requested by them within a

specified period, being not less than 14 days,
as is necessary to monitor the Building Subcontractors' compliance with the

National Code and Implementation Guidelines.
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13.5 Acknowledgements
Project Co does and will procure that the Building Subcontractors:
(a) irrevocably authorise, and give their consent to, the State and State Associates,
publishing, disclosing or otherwise making available details or other information
relating to the Builder's compliance or non compliance or suspected non compliance
with the National Code or Implementation Guidelines (including as part of the
process of the consideration or imposition of a sanction or as part of a sanction, as
contemplated by the section of the National Code relating to "Compliance
Principles") to any person (including any Commonwealth authority or agency or
any State or Territory Government);
(b) forever release and discharge the State and State Associates from any claims,
demands, suits or actions which the Builder or its subcontractors, or a person
claiming on their behalf, might otherwise be entitled to make arising out of or in
any way in connection with the publishing, disclosure or otherwise making
available of the details or other information as referred to it paragraph (a); and
(c) indemnify the State and State Associates from any claims, demands, suits or actions
which a director, other officer or employee of Project Co, the Building
Subcontractor or any of their Related Entities, or a person claiming on behalf of any
of those, may make arising out of or in any way in connection with the publishing
disclosure or otherwise making available of the details or other information as
referred to in paragraph (a).
13.6 Subcontracting
(a) Project Co must not engage or permit the engagement of any Building
Subcontractor or enter into or permit the entry into of any Building Subcontract
unless the Building Subcontractor:
(i) is not the subject of a sanction of the Code Monitoring Group; and
(ii) has, if required been accredited by the "Federal Safety Commissioner"

under the Australian Government Building and Construction OHS
Accreditation Scheme (established under the Building and Construction
Industry Improvement (Accreditation Scheme) Regulations 2005);
(b) Project Co must not engage or permit the engagement of any Building
Subcontractor or enter into or permit the entry into of any Subcontract unless:
(i) where the Subcontract is a Building Subcontract, the Building

Subcontract requires the relevant Subcontractor to:
A. comply with; and
B. otherwise act consistently with,
the requirements and other provisions of the National Code and the
Implementation Guidelines in the performance of the Building
Subcontract.
(c) Project Co will ensure that all requests for tender in relation to the Project made by
any Building Subcontractor and all contracts entered into by any Building
Contractor contain the commitment to apply the National Code and Implementation
Guidelines as set out in the model tender documents and the model contract.
Legal\104938921.16 130
13.7 Breach of National Code
(a) Project Co will not enter into a Construction Contract with a Builder and will
require that the Builder does not enter into any Building Subcontract with a
Building Subcontractor who has:
(i) had a sanction applied to it by the Commonwealth or any State or

Territory Government (individually and collectively for the purposes of
this Clause 13, "Government") as contemplated in the section of the
National Code relating to "Compliance Principles", which precludes the
Subcontractor from tendering for or otherwise performing:
A. any Government work (whether directly for a Government or

for a contractor of a Government) and the sanction is still in
force as at the date of entry into the Subcontract; or
B. a particular class of Government work (including work over a

certain value) (whether directly for a Government or for a
contract of a Government) and:
1) the work the subject of the Subcontract falls within

the class of work the subject of the sanction; and
2) the sanction is still in force at the time of entry into

the Subcontract; or
(ii) not provided Project Co or the Builder (as the case may be) with an
Undertaking of Compliance in the form set out in Schedule 24 signed by
the relevant Building Subcontractor and dated no less than 5 days prior to
the time.
14. Employee Transfers

Project Co and the State will negotiate in good faith for the purposes of reaching agreement
on:
(a) the transfer of any employees from the State to Project Co; and
(b) the terms of any such transfer,
having regard to the framework set out in the Project Brief at Volume 1, Part B, Commercial
Framework Summary, Section 3.15 and will commence such negotiations no later than
12 months prior to the initial Date for Stage 1 Final Completion.
15. Quality and Quality Review over Term

15.1 Developing a Quality Assurance System
(a) Project Co will, prior to commencing the Works, develop a quality assurance
system to cover the Design Development Process, execution of the Works,
provision of the Services and occupational and health and safety management,
which must comply with the Quality Assurance Plan and be in a form satisfactory to
the Project Director ("Quality Assurance System").
(b) Throughout the Term, Project Co must regularly and in any case 12 months prior to
the expected Operational Commencement Date, update and maintain the Quality
Legal\104938921.16 131
Assurance System, in each case in accordance with the Quality Assurance Plan and
to the satisfaction of the Project Director (acting reasonably).
15.2 Quality Assurance

Project Co will:
(a) implement and comply with the Quality Assurance System in executing the Works
and in providing the Services;
(b) allow the State Delegates access to the Quality Assurance System and the quality
systems of Subcontractors so as to enable surveillance and auditing of compliance
with the Quality Assurance System; and
(c) not be relieved from performing and observing any of its obligations under this
Agreement or from any of its liabilities whether under this Agreement or at Law as
a result of:
(i) the implementation of, and compliance with, the quality assurance
requirements of this Agreement;
(ii) any review or comment by a State Delegate concerning the Quality

Assurance System or Project Co's compliance or non-compliance with
that system;
(iii) any audit or other monitoring activity by a State Delegate, or anyone else
acting on behalf of the State, of Project Co's compliance with the Quality
Assurance System; or
(iv) any failure by a State Delegate, or anyone else acting on behalf of the
State, to detect any Defect including any such failure arising from any
negligence on the part of the State Delegate or other person.
15.3 Access and Inspection by the State

(a) Project Co will at all times during the Term permit or ensure that the State, the
relevant State Delegate and any other State Associate so authorised by the State or a
State Delegate are permitted:
(i) subject to Clause 17.12, on reasonable notice, to inspect the Works and to
conduct all tests and inspections, as and when they consider reasonably
necessary or appropriate and otherwise to exercise rights of the State
under this Agreement in relation to the Works;
(ii) to have access to all parts of the Site occupied by Project Co and to the
Facility:
A. to take such action as the State considers necessary to exercise

its rights under the Project Documents and to discharge its
statutory duties and powers; and
B. otherwise as reasonably required by the State;
(iii) subject only to the Licences, the Stage 1 Site Lease and the Site Lease, to
take possession of the Stage 1 Site and the Stage 1 Facility following
Stage 1 Final Completion and to take possession of the Site and the
Facility following Stage 2 Completion;
Legal\104938921.16 132
(iv) subject to not unreasonably disrupting the activities of Project Co, to
examine the records, reports, Design and Construction Documents and all
documents reasonably requested of Project Co or any Subcontractor
relating to the Works, the Facility, the provision of the Services or the
Project (and to make copies of and to take extracts from them); and
(v) to discuss Project Co's activities or those of any Subcontractor relating to

the Works, the Facility, the provision of the Services or the Project with
Project Co's officers, at such times and as often as may be reasonably
requested by any such person, provided that the discussions:
A. may be supervised by Project Co if required; and
B. do not unreasonably disrupt the duties of the relevant officer,
and for such purposes grants access to the Site, the Works and all parts of the
Facility occupied by Project Co pursuant to the Licences, the Stage 1 Site Lease and
the Site Lease to any such person at all reasonable times on reasonable notice
(except in the case of an Emergency, when no notice is required).
(b) The State will, and will ensure that:
(i) the State Delegate;
(ii) representatives of the Hospital Operator, MCRI, the University of

Melbourne or the State, notified to Project Co in writing from time to
time by the State;
(iii) any other any State Associates authorised or permitted under

paragraph (a)
will:
A. not unreasonably interfere with the undertaking of the Works;

and
B. comply with the Site Access and Interface Protocols and any
other reasonable rules of Project Co (and the reasonable rules
of the Project Co Associates, where applicable) regarding
safety on Site as notified in writing to the relevant State
Delegate.
15.4 No Duty to Review

(a) Notwithstanding the rights of the State and the State Delegates under Clause 15.3,
Project Co acknowledges that neither the State nor a State Delegate (or any other
person referred to in Clause 15.3) has any obligation or owes any duty to Project Co
to:
(i) inspect the Site, the Works or the Facility; or
(ii) review the Quality Assurance System or any other documentation

produced pursuant to this Agreement, the undertaking of the Works or the
provision of the Services for errors, omissions or non-compliance with
the requirements of this Agreement; and
Legal\104938921.16 133
(b) the exercise by the State, a State Delegate or any other State Associate of their
respective rights under Clause 15.3 will not in any way lessen or otherwise affect
Project Co's obligations nor the State's rights against Project Co, whether under this
Agreement or at Law.
16. Programming
16.1 Master Works Program
Project Co warrants that it has prepared the Master Works Program and all Sub-Programs in
accordance with the Programming Requirements.
16.2 Works Sub-Programs

(a) Project Co must:
(i) no later than 1 month before the date set out in the Master Works
Program for commencement of the Works, prepare and provide to the
Independent Reviewer (with a copy to the Project Director) for review in
accordance with Clause 16.8, an update of the Stage 1 Works
Sub-Program;
(ii) no later than 12 months before the Date for Stage 1 Final Completion
prepare and provide to the Independent Reviewer (with a copy to the
Project Director) for review in accordance with this Clause 16, an update
of the Stage 2 Works Sub-Program.
(b) Project Co must comply with the Programming Requirements in preparing and
submitting the updates of the Stage 1 and Stage 2 Works Sub-Programs.
16.3 Design Development Sub-Program

Project Co must:
(a) at the same time as Project Co is required to submit the Stage 1 Works
Sub-Program to the Independent Reviewer under Clause 16.2(a), submit to the
Independent Reviewer (with a copy to the Project Director), an update of the Design
Development Sub-Program;
(b) make due allowance in the updated Design Development Sub-Program for the
Design Documentation to be submitted to the Project Director in accordance with
Clause 19.10 and the Design Development Plan and in a manner and at a rate which
will give the Project Director a reasonable opportunity to review the Design
Documentation within the Review Period without delaying the progress of the
Works; and
(c) Project Co must comply with the Programming Requirements in preparing and
submitting any update of the Design Development Sub-Program.
16.4 Equipment Procurement and Installation Sub-Program

Project Co must, no later than 12 months after Financial Close, submit to the Independent
Reviewer (with a copy to the Project Director) an update of the Equipment Procurement and
Installation Sub-Program.
Legal\104938921.16 134
16.5 Training Sub-Program
(a) Project Co must at the same time as it is required to submit the final draft of the
Training Plan and Transition Plan to the Project Director in accordance with
Clause 23.1, submit to the Independent Reviewer (with a copy to the Project
Director) a Training Sub-Program and Transitional Activities Sub-Program.
(b) Project Co must comply with the Programming Requirements in preparing and
submitting the Training Sub-Program and the Transitional Activities Sub-Program.
16.6 Completion Sub-Program

(a) At the same time as it is required to submit the final draft of the Completion Manual
to the Project Director in respect of the Stage 1 Works in accordance with
Clause 23.1, Project Co must submit to the Independent Reviewer (with a copy to
the Project Director) a Completion Sub-Program.
(b) At the same time as it is required to submit an update of the Completion Manual to
the Project Director in accordance with Clause 28.1, Project Co must submit to the
Independent Reviewer (with a copy to the Project Director) an update of the
Completion Sub-Program.
(c) Project Co must comply with the Programming Requirements in preparing,

updating and submitting the Completion Sub-Program.
16.7 Further Updating Programs

The Master Works Program and all relevant Sub-Programs must at all times during the course
of the Project reflect the progress of the Works. Accordingly, Project Co will, in addition to its
obligations under Clauses 16.1 to 16.6, update the Master Works Program and all relevant
Sub-Programs and provide such updates to the Independent Reviewer (with a copy to the
Project Director) in accordance with the Programming Requirements.
16.8 Review of Programs

(a) The Project Director or Independent Reviewer may review or comment on any
Program submitted or updated under this Clause 16 or otherwise in accordance with
the Programming Requirements within 15 Business Days of receipt of the relevant
Program.
(b) If the Project Director or Independent Reviewer believes that a Program submitted
for review is not in accordance with the Programming Requirements or any other
terms of this Agreement, the Independent Reviewer or Project Director may notify
Project Co and the State of that opinion and the reasons for that opinion, within the
period of time referred to in paragraph (a).
(c) On receipt of a notice from the Project Director or Independent Reviewer or Project
Director under paragraph (b), Project Co must, as soon as practicable, revise the
relevant Program so that it is in accordance with the requirements of this Agreement
and resubmit the relevant Program to the Independent Reviewer for review in
accordance with paragraph (a). Project Co may refer any dispute concerning the
Independent Reviewer's opinion for resolution in accordance with the Accelerated
Dispute Resolution Procedures.
Legal\104938921.16 135
16.9 Project Co Acknowledgment in respect of Programs
(a) (Review): The Project Director or Independent Reviewer may at any time on prior
written notice to Project Co, carry out a review of the progress of the Works as
against the Programs, and Project Co will provide all assistance and information
reasonably requested by the Project Director or Independent Reviewer in their
review.
(b) (no liability): No review of, comment upon or approval or rejection of, or a failure
to review or comment upon any Program or updated Program, by the Project
Director or the Independent Reviewer in accordance with this Agreement will:
(i) relieve Project Co from, or alter or affect, its Liabilities or obligations

under this Agreement, including its obligations under Clause 32.1;
(ii) prejudice the State's rights against Project Co;
(iii) evidence or constitute the granting of an extension of time or a Direction

by the Project Director to accelerate, disrupt, prolong or vary any, or all,
of the Works;
(iv) entitle Project Co to make any Claim against the State in respect of such
matter including any Claim for an extension of time to the relevant Date
for Completion; or
(v) affect the time for performance of the State's or Project Director's
obligations under this Agreement.
(c) (no duty of care): Neither the State, Project Director or the Independent Reviewer
assume or owe a duty of care or any obligation to Project Co to review at all, or in
reviewing, endorsing or rejecting a Program or updated Program submitted in
accordance with this Clause 16 to detect defects, errors, omissions or non-
compliance with this Agreement, any Law or any Authorisation.
(d) (no delay claim): No delays in the review or endorsement of a Program submitted
under this Clause 16 will entitle Project Co to make any Claim against the State or
the Independent Reviewer whether under this Agreement or at Law.
(e) (Agreement): None of the Programs form part of this Agreement.
(f) (no required use): None of the Project Director, Independent Reviewer or the
State are required to use any Program for any purpose save as one but not, in their
discretion, the only or paramount factor when, assessing any Claim made by Project
Co under Clause 32.4.
Legal\104938921.16 136
PART 2 DEVELOPMENT OF FACILITY
17. Project and Site Management and External Infrastructure

17.1 Project Control Group
(a) (Constitution): The State and Project Co will, promptly and no later than 30 days
after the Date of this Agreement, form a Project Control Group for the duration of
the Design and Construction Phase.
(b) (Membership): The Project Control Group will comprise:
(i) representatives of Project Co, consisting of at least the Development Co-

ordinator, the Project Co Representative and a representative of the
Builder and all such representatives (other than the Development
Co-ordinator and the Project Co Representative whose position and
required knowledge are as set out in Clauses 4.10 and 4.11) must be
members of senior management of Project Co and the Builder with a
sound knowledge of the Project; and
(ii) representatives of the State, consisting of at least the Project Director and
a representative of the Hospital Operator.
(c) (Chair): The Project Director, or a representative authorised by the Project

Director, will chair the Project Control Group.
(d) (Functions): The parties acknowledge that the Project Control Group is
consultative and advisory only and decisions of the Project Control Group do not
affect the rights or obligations of either the State or Project Co under any of the
Project Documents.
(e) (Not to affect): The exercise or omission to exercise by the State of its rights and
obligations in relation to the Project Control Group will not:
(i) constitute a Compensable Extension Event;
(ii) lessen or otherwise affect Project Co's obligations and the State's rights,
whether under this Agreement or at Law;
(iii) to the extent permitted by Law, entitle Project Co to make any Claim
against the State; or
(iv) be construed as a direction by the State to do or not to do anything.
17.2 Meetings of the Project Control Group

(a) (Meetings): The State and Project Co will ensure that the Project Control Group
meets regularly (and in any event at least monthly and no later than 5 Business
Days after the State has received the Monthly Works Report) to discuss and
consider any issues in respect of the Project, including to:
(i) assist in resolving design interpretation issues;
(ii) monitor progress of the Works;
(iii) discuss design, construction, demolition, Equipment and Completion

issues;
Legal\104938921.16 137
(iv) review the Master Works Program and all Sub-Programs;
(v) discuss issues arising from any manuals, plans, Programs, reports or
documents provided by Project Co, including the Monthly Works Report
submitted in accordance with Clause 17.4;
(vi) discuss issues of public concern;
(vii) discuss quality assurance and safety issues;
(viii) discuss any issues arising out of the Communications Approach and any
other community and media relations issues;
(ix) review and discuss any Modifications or proposed Modifications; and
(x) provided that Project Co's rights to Claim will not lapse as a result,
discuss any other issues arising between the State and Project Co in
relation to the Project before referring them to the Dispute Resolution
Procedures under Clauses 55 and 56.
(b) (Other attendees): Members of the Project Control Group may at their own cost
have the Facility Management Subcontractor, advisers and consultants (including
the Financier and any representative of the Financier) at the meetings from time to
time as required, subject to giving 2 Business Days' prior notice to the other
members of the Project Control Group of any such attendance.
(c) (Independent Reviewer): Any member of the Project Control Group may require
that the Independent Reviewer attend any meeting of the Project Control Group.
(d) (Quorum): Meetings of the Project Control Group will be conducted according to
such procedures as the members from time to time agree, but at least one
representative of each of the State and Project Co will constitute a quorum.
(e) (Minutes): Project Co will:
(i) prepare detailed minutes, in respect of each meeting of the Project

Control Group, which include:
A. a list of attendees;
B. details of the matters discussed at the meeting; and
C. the outcomes agreed by the Project Control Group at the

meeting; and
(ii) provide a copy of the minutes of meeting to the other members of the
Project Control Group.
(f) (Further Information): The Project Director may require Project Co to provide
information on matters discussed at any Project Control Group meeting and Project
Co must provide that information in a timely manner.
17.3 General Meetings

In addition to the Project Control Group Meetings, Project Co will:
(a) attend such meetings as may be:
Legal\104938921.16 138
(i) required under this Agreement; or
(ii) otherwise reasonably required by the Project Director;
(b) freely and openly discuss the Works at meetings under paragraph (a); and
(c) promptly and fully respond to any questions which the Project Director may ask at
any meetings under paragraph (a).
17.4 Reports and information

(a) (Monthly Works Report): During the Design and Construction Phase, Project Co
will provide to the Project Director and each other member of the Project Control
Group each month, on the Lodgement Date:
(i) a monthly report in relation to the Facility setting out the following
matters:
A. progress of the Works;
B. work completed in the reporting period;
C. work scheduled for the next reporting period;
D. all Programs updated in accordance with Clause 16 and the

Programming Requirements;
E. results of any monitoring and test programs;
F. any outstanding Claims or Disputes;
G. any communications issues in accordance with

Clause 17.5(b)(iii);
H. environmental issues;
I. safety incidents in the reporting period and cumulatively;
J. when applicable during the Stage 2 Works any removal of

Existing Site Contamination which includes details of:
1) the quantities and types of Existing Site

Contamination removed up to the date of the
report;
2) the calculation of amounts payable in respect of the

removal of that Existing Site Contamination in
accordance with Clause 7.5 or 7.6;
K. all certificates provided by Project Co under the Finance

Documents certifying the cost to complete the Works; and
L. such other information which the Project Director or the State

may reasonably request,
(the "Monthly Works Report").
Legal\104938921.16 139
(b) (Other Information): During the Design and Construction Phase, Project Co will,
within a reasonable time, provide to the Project Director any other information
relating to the Project (including access to and copies of documents) reasonably
requested by the Project Director.
17.5 Communications
(a) (Community Liaison): During the Design and Construction Phase, Project Co must
liaise with the members of the community specified in, and in accordance with the
requirements set out in, the Communications Approach and this Agreement.
(b) (Communications Approach): Without limiting the generality of paragraph (a),

Project Co must, during the Design and Construction Phase:
(i) implement (in conjunction with the State) and fund the Communications
Approach;
(ii) regularly, and at least every 6 months, update the Communications

Approach to reflect changes to any information contained in it and
otherwise in the same manner as a skilled professional person suitably
qualified and experienced in the performance of obligations similar to
those of Project Co under the Project Documents would do and promptly
present a copy of the updated Communications Approach to the Project
Director, for endorsement by the Project Director in accordance with the
Review Procedures;
(iii) submit to the Project Director and each other member of the Project
Control Group, as part of the Monthly Works Report, a written report,
signed by Project Co, which details any communications issues necessary
for the State's consideration or issues arising out of or in connection with
the Communications Approach or its implementation; and
(iv) attend meetings of and provide assistance to the Communications

Working Group as required by the State in respect of issues arising out of
or relating to the Works.
17.6 Project Management Plan and Additional Project Management

Documents
(a) Project Co must update the Project Management Plan as Project Co considers
necessary and otherwise within 10 Business Days of any request of the Project
Director in accordance with Clause 17.6(d) and submit the updated Project
Management Plan to the Project Director for review in accordance with the Review
Procedures.
(b) (Compliance): Project Co must comply with the Project Management Plan as
updated in accordance with this Clause.
(c) (Further revisions): Project Co will prepare further revisions to the Project
Management Plan:
(i) in accordance with Clause 2.9;
(ii) in accordance with Clause 23.1;
Legal\104938921.16 140
(iii) as and when required so as to ensure that in implementing the Works in
accordance with the Project Management Plan, Project Co is able to
comply with its obligations under this Agreement; and
(iv) where reasonably requested by the Project Director in accordance with

paragraph (d),
and any updates are to be prepared in accordance with the Project Management Plan
Requirements.
(d) (Project Director requirements): The Project Director may reasonably require
revisions to the Project Management Plan, under Clause 2.9 or to:
(i) ensure the health, safety, care and comfort of Hospital Users and of
patients, staff and visitors to the Existing Facility during the course of the
Works;
(ii) avoid or minimise unreasonable interference of the Works with the

passage of people and vehicles and the operations and activities on, and
from areas adjacent to, the Site and the Existing Site;
(iii) avoid any unreasonable impact of the Works on the operation of the
Existing Facility and the carrying out of the Hospital Functions;
(iv) avoid any impact of the Stage 2 Works on the operation of the Stage 1
Facility and Retained Buildings and the carrying out of the Hospital
Functions in the Stage 1 Facility and Retained Buildings;
(v) comply with Project Co's obligations under Clause 23.1; and
(vi) ensure consistency of the Project Management Plan with the terms of this
Agreement.
(e) (Endorsement): All revisions to the Project Management Plan must be presented to
the Project Director, for review by the Project Director in accordance with the
Review Procedures.
(f) (No Claim): Project Co will not be entitled to make any Claim against the State
arising out of or in connection with any preparation or revision of the Project
Management Plan as contemplated by this Clause 17.6.
(g) (Reasonableness) for the purposes of Clause 2.9 and paragraphs (d)(i) to (iv), in
making a reasonable request determination or requirement, the Project Director
shall have regard to:
(i) the Site being a construction site and the time and cost implications for
Project Co and its Builder of any such request or requirement; and
(ii) the location of the Site including being adjacent to an operating children's
hospital and the health, safety and care of the Hospital Users.
17.7 External Infrastructure

(a) (External Infrastructure): Project Co must ensure that all External Infrastructure
is provided and in a manner which ensures that:
(i) Stage 1 Final Completion occurs by the Date for Stage 1 Final
Completion;
Legal\104938921.16 141
(ii) Stage 2 Completion occurs by the Date for Stage 2 Completion; and
(iii) the Facility is, for the duration of the Term, Fit for the Intended Purposes.
(b) (warranty as to existing infrastructure): As such, Project Co warrants that it has

satisfied itself as to:
(i) what External Infrastructure is available or will be provided and by

whom;
(ii) the nature, extent, location and quality of that External Infrastructure; and
(iii) the suitability of that External Infrastructure for the purposes of the
Project and to meet its obligations under paragraph (a).
(c) (warranty as to infrastructure to be provided): Project Co warrants that such

External Infrastructure which is not already available, or ceases to be available or
does not meet its obligations under paragraph (a) will be provided:
(i) within a timeframe that allows for the efficient integration of that
External Infrastructure with the Project and the Works, and will not affect
the ability of Project Co to achieve Completion by the relevant Date for
Completion;
(ii) without causing detriment to the operation of the Existing Facility or the
Stage 1 Facility (in respect of the External Infrastructure to be provided
for the Stage 2 Facility after Stage 1 Final Completion); and
(iii) in such a manner and to such a standard as to enable Project Co to meet

its obligations under paragraph (a).
17.8 Co-ordination of Project Co's Infrastructure

(a) (Liaison): Project Co must at its own cost and risk liaise with all relevant
Governmental Agencies and Utility Services providers for the provision of Project
Co's Infrastructure and the co-ordination and integration of Project Co's
Infrastructure with the External Infrastructure.
(b) (Cost): Project Co is solely responsible for:
(i) the cost of installing and maintaining Project Co's Infrastructure;
(ii) the cost of installing and maintaining all connections to the External
Infrastructure; and
(iii) the cost of all related charges.
(c) (Release and Indemnity): Project Co releases and indemnifies the State in relation
to any loss or damage relating to the External Infrastructure or any other
infrastructure or services to the extent caused or contributed to by Project Co or any
person acting through or under Project Co.
(d) (No State Warranty): The State makes no warranty or representation and bears no
responsibility in relation to:
(i) the integration, co-ordination or compatibility of Project Co's

Infrastructure with the External Infrastructure;
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(ii) the quality or standard of workmanship of the External Infrastructure;
(iii) the adequacy or completeness of Project Co's Infrastructure; or
(iv) the availability, adequacy, location or completeness of the External

Infrastructure,
and will not be responsible for any costs incurred or loss suffered by Project Co or
any other person relating to any or all of these, notwithstanding that the State, or
any person acting on its behalf, has accepted Project Co's Infrastructure or Project
Co's plan for infrastructure, or recommended or accepted the External
Infrastructure.
17.9 Access for Governmental Agencies and Utility Services Providers

Project Co must give all relevant Governmental Agencies and Utility Services providers and
their respective employees and agents, reasonable access to any part of the Site or the Existing
Site (subject to the Stage 1 Site Licence and the Stage 2 Site Licence respectively) on
reasonable notice for the purpose of developing, inspecting or providing the External
Infrastructure.
17.10 Utility Services and Infrastructure

(a) (No representations): Project Co acknowledges and agrees that the State has made
no representation, given no advice and given no warranty as to the location of any
existing Utility Infrastructure above or below the surface of the Site or the Existing
Site (including in the Existing Facility and Retained Buildings).
(b) (Project Co's obligations): Project Co must:
(i) provide all Utility Services and enter into all agreements with Utility
Services providers required for the performance of the Works;
(ii) make necessary enquiries as to the location of any existing Utility

Infrastructure located above or below the surface of the Site or the
Existing Site (including in the Existing Facility and Retained Buildings)
and liaise with the owner of those services and the relevant Utility
Services provider as to the need for potential relocation, protection or
decommissioning of that Utility Infrastructure (as applicable);
(iii) liaise with all relevant Utility Services providers regarding the provision
of Utility Services to and for the Works and the location, construction and
installation of all necessary Utility Infrastructure;
(iv) undertake, or ensure that the relevant Utility Service provider undertakes
the location, relocation, construction and installation of all Utility
Infrastructure required for the Project and the Facility;
(v) decommission, in consultation with the relevant Utility Services provider,

any Utility Infrastructure on the Existing Site which is redundant or
otherwise required to be decommissioned in accordance with this
Agreement; and
(vi) if required:
A. relocate and protect existing Utility Infrastructure (at no cost

to the State);
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B. grant a sublease or licence in favour of the relevant Utility
Services provider;
C. agree to the Utility Services provider or other appropriate

person taking the benefit of any statutory access power or
statutory easement to which it may be entitled; or
D. grant an irrevocable licence in favour of the Utility Services

provider or other appropriate person,
on terms and conditions which ensure the continued and uninterrupted

use of and access by the Utility Services provider to the Utility
Infrastructure.
(c) (Consent): Project Co must obtain the consent of the relevant State Delegate prior
to entering into any agreements with any Utility Service providers in respect of any
Utility Infrastructure in respect of or in connection with the Works.
(d) (Utility Services): Project Co may only enter into agreements for the supply of
Utility Services in accordance with Clause 38.2.
17.11 No Compensation
Project Co acknowledges that no compensation or other payment will be payable by the State
in relation to any matter arising out of Clauses 17.7 to 17.10.
17.12 Inspection and Testing

Subject, and without limitation, to the State's rights in respect of Additional Tests and
Clause 24.2:
(a) (Entry upon notice): the State and any person authorised by it may, upon giving
reasonable notice to Project Co (except in the case of an Emergency when no notice
is required), enter and inspect any part of the Works or Facility and any other place
where the Works are being performed or materials are being prepared or stored, and
inspect or test any part of the Works or Facility at any time;
(b) (Project Co to assist): Project Co must give such assistance as is reasonably

required by the State in respect of any inspection or testing under paragraph (a)
including preparing samples of materials used in connection with its Works or the
Facility to the reasonable satisfaction of the State and forwarding same to the State
or such other place or person notified by the State; and
(c) (Costs of inspection or testing): the State shall bear the reasonable costs and
expenses of any inspection or test conducted at its direction under this Clause 17.12,
unless:
(i) the inspection or test reveals any Defect;
(ii) the inspection or test is required by Best Construction Practices;
(iii) the inspection or testing is, relates to or is otherwise in connection with

the Additional Tests, or tests of the nature referred to in Clause 24.2, to
be carried out in accordance with the terms of this Agreement, or
(iv) the inspection or test was otherwise expressly required by this Agreement
to be carried out by Project Co,
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in which case Project Co must bear the costs and expenses of the inspection and
testing.
(d) (States obligations): The State will, and will ensure that:
(i) the State Delegate;
(ii) the representatives of the Hospital Operator, the University of Melbourne,

MCRI or the State notified to Project Co in writing from time to time by
the State;
(iii) any other State Associate and any other person authorised or permitted
under paragraph (a),
will:
A. not unreasonably interfere with the undertaking of the Works;

and
B. comply with the Site Access and Interface Protocols and any
other reasonable rules of Project Co (and the reasonable rules
of Project Co's Associates where applicable) regarding safety
on Site as notified in writing to the relevant State Delegate.
18. Design and Documentation

18.1 Design
Project Co will design the Works in accordance with:
(a) the Design Requirements;
(b) all State Modifications or Project Co Modifications;
(c) all Authorisations required for the Project;
(d) all relevant Quality Standards and Laws;
and so that:
(e) Project Co can provide the Services to at least the Services Specifications and
otherwise in accordance with the other requirements of this Agreement; and
(f) the Facility when constructed in accordance with the design will be Fit for the
Intended Purposes.
18.2 Intellectual Property Licence - Project Co

Project Co:
(a) grants to the State, MCRI and the Hospital Operator;
(b) must ensure that the person legally entitled to do so grants to the State, MCRI and
the Hospital Operator; and
(c) must do all things reasonably necessary to give effect to the grant to the State,
MCRI and the Hospital Operator of,
Legal\104938921.16 145
a non-exclusive, royalty-free, irrevocable and transferable licence (to arise immediately upon
the creation of any relevant material, and including a right to sub-license) in perpetuity to use,
exercise, reproduce, communicate to the public, adapt and modify all the Intellectual Property
Rights in or used in:
(d) the design of the Facility;
(e) the Design Documentation;
(f) methods of working and materials used in, or intended to be used in, the
construction and completion of the Works;
(g) the Design and Construction Documents and all other programs, documents,
materials or information prepared by Project Co and provided or required to be
provided to the State under the terms of this Agreement; and
(h) any material which Project Co incorporates in the materials outlined in

paragraphs (d) to (g) inclusive,
(whether owned by Project Co or not) for any purpose under, or contemplated by this
Agreement ("Contract Material"), and for the Project and the Facility generally and for any
purpose arising out of or in connection with the Facility.
Notwithstanding the terms of this Clause 18.2, to the extent that any item of Contract Material
is commercially available off-the-shelf third party software, the obligation of Project Co will
be to licence that item of Contract Material to the State, MCRI and the Hospital Operator if
Project Co is legally able to do so, and on the terms of the licence granted to Project Co by the
third party licensor (and Project Co will use all reasonable endeavours to procure the consent
of that licensor to grant that licence to the State, MCRI and the Hospital Operator).
Notwithstanding this Clause 18.2, if Project Co is, or reasonably considers it will be, after
having used its reasonable endeavours, unable to grant to the State the licences it is required to
grant under this Clause 18.2 in respect of Intellectual Property Rights which are owned by a
third party, it must promptly notify the State of that failure and the State and Project Co will
negotiate in good faith with respect to Project Co obtaining for the State's benefit, such rights
or arrangements as the State reasonably requires in order to perform the Works and Services,
including but not limited to Project Co seeking equivalent rights from such other relevant third
party. If Project Co and the State are unable to obtain such rights for the State, Project Co will
continue to work with the State in order to allow the State to use or take full benefit of such
reasonably acceptable, available or equivalent Intellectual Property Rights.
18.3 Intellectual Property Licence – State

To the extent that the State owns any Intellectual Property Rights in the Retained Buildings or
the Transition Equipment, the State grants to Project Co, the Builder and the Facility
Management Subcontractor, a non-exclusive, royalty free, irrevocable and transferable licence
to arise immediately upon the Date of this Agreement to use, exercise, reproduce,
communicate to the public, adapt and modify the Intellectual Property Rights in the Retained
Buildings or the Transition Equipment to the extent necessary to perform the Works and
provide the Services.
18.4 Moral Rights

Project Co, in respect of the Contract Material:
(a) to the extent permitted by Law, will not, and will take all reasonable steps to ensure
that its directors, other officers, employees and Subcontractors do not, sue, enforce
Legal\104938921.16 146
any Claim, bring any action or exercise any remedy in respect of any Contract
Material against:
(i) the State, MCRI or the Hospital Operator;
(ii) any contractor whom the State engages ("Other Contractor"); or
(iii) any third party to whom the State sub-licenses (whether express or
implied), or grants any other right to use, possess, modify, vary or amend
any Contract Material ("Sub-Licensee");
(b) will procure (without coercion) that all individuals who are, or are to be, or may be,
authors of any Contract Material in which it is reasonably expected Moral Rights
exist in respect of material design work ("Moral Rights Documentation"), sign,
date and return to Project Co a Moral Rights Consent (in consideration for the
payment of $1 to that individual) prior to those individuals commencing work on
the creation of any Moral Rights Documentation, or as soon as practicable
thereafter, in which each such individual becomes bound by the obligations to the
State as set out in the Moral Rights Consent, and to pay each such individual the
sum of $1 on behalf of the State;
(c) will within 5 Business Days of a request by the State, provide to the State any
Moral Rights Consent which is obtained pursuant to paragraph (b) as requested by
the State; and
(d) will maintain an up-to-date record of the names and addresses of each person who
has signed a Moral Rights Consent under paragraph (b), and provide a copy of any
updated records to the State upon request.
Nothing in this Clause 18.4 amounts to an obligation on the State to comply, or a warranty by
the State that it will comply, with the Trade Practices Act 1974 (Cth) or any equivalent
provision of State or Territory legislation.
18.5 Moral Rights - State

The State indemnifies and will keep indemnified Project Co from and against any Claim or
Liability, whether direct or indirect, arising out of a Claim by a third party that there has been
an infringement by Project Co of such party's Moral Rights in relation to the Retained
Buildings, artwork in the Existing Buildings or the Transition Equipment, save where such
infringement or purported infringement arises out of or to the extent it is contributed to by any
breach of a Project Document by Project Co.
18.6 Warranty and Indemnity

Project Co warrants that (except in relation to the Retained Buildings and the Transition
Equipment in respect of which Project Co will comply with the grant made under
Clause 18.3):
(a) it will not breach any Intellectual Property Rights or Moral Rights of any person in
performing the Project, including the Works;
(b) Project Co owns or has a licence in all Intellectual Property Rights in the Contract
Material and, except where the provisions of a licence of third party software to
which Clause 18.2 refers prohibit it from doing so, is able to grant the assignments
and licences contemplated by this Agreement;
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(c) to the extent any Dispute arises in relation to the State's rights pursuant to any third
party licence to which Clause 18.2 applies, Project Co will upon request of the State
provide to the State complete copies of the terms of such licence;
(d) use by the State or any State Associate, Other Contractor or Sub-Licensee, of that
Contract Material licensed to the State under Clause 18.2, in accordance with this
Agreement will not infringe the rights (including Intellectual Property Rights and
Moral Rights) of any third party;
(e) neither the State nor any State Associate, Other Contractor or Sub-Licensee is liable
to pay any third party any licence or other fee in respect of the use of the Contract
Material licensed to the State under Clause 18.2, whether by reason of Intellectual
Property Rights or Moral Rights of that third party or otherwise; and
(f) the use by the State or any State Associate, Other Contractor or Sub-Licensee, of
the Contract Material licensed to the State under Clause 18.2, in accordance with
this Agreement and the terms of the relevant licence will not breach any laws
(including any laws in respect of Intellectual Property Rights and Moral Rights),
and will indemnify and keep indemnified the State, MCRI, the Hospital Operator, any Other
Contractor or any Sub-Licensee against any Claim or Liability, whether direct or indirect,
arising out of a Claim by a third party that Contract Material licensed to the State under
Clause 18.2, or any use of that Contract Material by the State, MCRI, the Hospital Operator,
any Other Contractor or any Sub-Licensee in accordance with this Agreement and the terms of
each relevant licence provided to the State, infringes any Intellectual Property Rights or Moral
Rights.
18.7 Third Party Claim

(a) The State will, if requested by Project Co, in respect of a Claim by a third party for
which Project Co indemnifies the State under Clause 18.6:
(i) to the extent that the State's insurers in relation to such a Claim agree, but
subject to paragraph (b), do all things reasonably required by Project Co
in negotiating, defending or otherwise taking action or proceedings in
respect of that Claim;
(ii) where the Claim is brought only against the State and the State does not
join Project Co in the proceedings, then in respect of that part of the
proceedings which relate to that Claim, will do all things reasonably
required by Project Co in defending the proceedings; and
(iii) not settle that Claim with the claimant without Project Co's involvement
in and agreement to any such settlement,
and each party will, in negotiating, defending or otherwise taking actions or

proceedings in respect of a Claim to which this Clause applies, so far as is
reasonably practicable and possible, diligently pursue such course of action.
(b) If any Claim is made which prevents or threatens to prevent those indemnified from
using the Intellectual Property Rights licensed to the State or State Associates
pursuant to Clause 18.2 (including if any of the warranties set out in Clause 18.6 are
challenged), then (without limiting the State’s rights) Project Co must, at the State’s
option and Project Co’s cost, either:
Legal\104938921.16 148
(i) procure for those indemnified, on reasonable commercial terms, the right
to retain possession of, and to continue to use, the Intellectual Property
Rights; or
(ii) replace or modify the items which contain infringing or allegedly

infringing Intellectual Property Rights in a manner reasonably acceptable
to those indemnified, such that the quality, performance or usefulness of
the items is not degraded and so that the infringement or alleged
infringement ceases.
19. Design Development

19.1 Project Co Acknowledgements
Project Co acknowledges and agrees that:
(a) (develop and refine): the purpose of the Design Development Process is to develop
and refine the Design Documentation from the Bid Design Documentation through
to the Construction Documentation in accordance with this Clause 19 and using
Industry Best Practice so as to ensure that the Facility when constructed in
accordance with the Construction Documentation:
(i) is Fit for the Intended Purposes;
(ii) meets all other relevant requirements of the Agreement; and
(iii) otherwise meets the representations made by Project Co in its First

Proposal and Second Proposal and throughout the Tender Process as to
the quality of the design of the Facility, insofar as compliance with those
representations gives rise to a higher, more stringent or greater standard
than that imposed by the terms of this Agreement;
(b) (optimise): the purpose of the Design Development Process is to optimise the
design of the Facility;
(c) (consultative process): the Design Development Process is a consultative process

between Project Co, Project Co's Associates, the State, the State's Associates and
the User Groups;
(d) (changes): the Design Development Process will involve co-ordination,

development and correction and changes to the Design Requirements;
(e) (Design Requirements): the Design Development Process does not derogate from
Project Co's obligations subject to Clause 41, to design the Facility in accordance
with the Design Requirements; and
(f) (no Modification)the Design Development Process does not of itself constitute a
Modification and will not of itself entitle Project Co to make any Claim, against the
State.
19.2 Modifications during Design Development Process

If the Design Development Process gives rise to any proposed Modification then the Project
Co Representative shall notify the Project Director of any such Modification within
10 Business Days of the earlier of the date on which it became aware or ought reasonably to
have become aware of the proposed Modification (and in any case prior to incorporating any
such Modification in the Design Documentation) and shall not be entitled to make any claim
Legal\104938921.16 149
against the State in respect of such Modification unless it notifies the State in accordance with
this Clause 19.2 and the Modification is a State Modification.
19.3 Project Co Warranties

Project Co warrants that it:
(a) has properly assessed the scope of all work and other activities to be undertaken in
implementing the Design Development Process;
(b) fully understands the risks which it is assuming under this Agreement to meet the
requirements of the Design Development Process; and
(c) has allowed in the Completion Payment and in its Programs for the cost and time of
the Design Development Process (including all consultation with the User Groups,
all presentations and preparation and provision of all Design Documentation,
mock-ups and samples) required to ensure that the Facility will be Fit for the
Intended Purposes and, subject to Clause 41, will not be entitled to make any Claim
against the State arising out of or in connection with the Design Development
Process.
19.4 Design Development Plan

(a) Project Co will implement the Design Development Process in accordance with the
Design Development Plan and this Clause 19.
(b) Project Co may from time to time, and will as required under Clause 19.6 and if
requested by the Project Director, make revisions to the Design Development Plan
in order that, in implementing the Design Development Process in accordance with
the Design Development Plan, Project Co is able to comply with its obligations
under this Agreement (including the Design Requirements). All such revisions to
the Design Development Plan must be presented to the Project Director, for
endorsement by the Project Director in accordance with the Review Procedures.
(c) Project Co will not be entitled to make any Claim against the State arising out of or
in connection with any revision of the Design Development Plan as contemplated
by this Clause 19.4.
19.5 Design Development Process

The Design Development Process shall be as set out in the Design Development Plan and this
Clause 19 and shall include:
(a) working closely with the State including the Department and the Operator's Project
Team;
(b) meeting and otherwise consulting with the User Groups and subject to the terms of
this Agreement, adapting the Design Documentation as a consequence of such
meeting and consultation with User Groups;
(c) preparing and submitting Design Documentation; and
(d) undertaking Design Development Presentations.
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19.6 Changes to Design Development Process
(a) If the Project Director reasonably forms the view that the Design Development
Process is not:
(i) allowing sufficient User Group input into the design of the Facility;
(ii) effectively or reliably resulting in the production of Design

Documentation that is in accordance with this Agreement; or
(iii) allowing the State sufficient time in which to receive and review the
Design Documentation in accordance with the Review Procedures,
Project Co must make such changes to the Design Development Process (including
the Design Development Plan) as the Project Director reasonably directs to ensure
that such requirements are met.
in connection with any revision of the Design Development Process as
contemplated by this Clause 19.6 (including with respect to any delay caused by
such changes).
19.7 Development Co-ordinator

Project Co must ensure that the Development Co-ordinator:
(a) convenes and manages all User Group Meetings and meetings with the Hospital
Operator;
(b) convenes and manages all Design Development Presentations;
(c) manages the submission of the Design Documentation; and
(d) otherwise consults with the Department, the User Groups, the Operator, the
Operator's Project Teams, and the Project Director throughout the Design
Development Process,
in accordance with this Clause 19, the Design Development Plan, the Design Development
Sub-Program and any reasonable requirements of the Project Director.
19.8 User Groups

(a) (Project Co's Obligations): Project Co must:
(i) work closely with the Department and Operator's Project Teams and hold
User Group Meetings, in accordance with this Clause 19.8;
(ii) ensure that the Development Co-ordinator and Project Co Representative

attends each of the User Group Meetings;
(iii) ensure all User Group Meetings are undertaken in an orderly and logical
sequence;
(iv) hold the User Group Meetings prior to each of the Design Stages referred
to in the Design Development Plan and this Clause 19 and at such other
times during the Design Development Process as the Project Director
may reasonably require;
Legal\104938921.16 151
(v) notify the Project Director and Hospital Operator of each User Group
Meeting sufficiently in advance of, and in any event not less than
5 Business Days prior to, any such User Group Meeting to allow the
Project Director, Hospital Operator or relevant Users or any person
nominated by the Project Director to attend such User Group Meeting;
(vi) provide an agenda and the relevant Design Documentation 2 Business

Days prior to each User Group Meeting with such Design Documentation
presented in a sequential and logical manner;
(vii) prepare detailed minutes in respect of each of the User Group Meetings
which include:
B. details of the matters discussed at the Meeting; and
C. the outcomes agreed with the User Groups at the Meeting;
(viii) provide a copy of the minutes of meeting to the Project Director and
Hospital Operator; and
(ix) otherwise develop a process for recording and implementing the

requirements of the User Groups which is notified to the Project Director.
(b) (Management Co-ordination and administration): Project Co shall have full

responsibility for the management, co-ordination and administration of the User
Group Meetings in accordance with the Design Development Plan, including the
arranging and notification of all User Group Meetings.
(c) (User Group Input): subject to the terms of this Agreement, in preparing the
Design Documentation, Project Co must take into account the requirements of the
User Groups in the development of the design of the Facility and must ensure that
subject to Clause 41, the input of the User Groups arising from the User Group
Meetings is addressed in the revised Design Documentation.
19.9 Design Development Presentations

To assist further the Design Development Process and to assist the Project Director in its
review of the Design Documentation, Project Co will conduct Design Development
Presentations for the Project Director, Hospital Operator and other representatives of the State
and its consultants and advisers:
(a) on a regular basis and at a minimum:
(i) at the times specified in the Design Development Plan; and
(ii) at such other stages as the Project Director reasonably requires;
(b) to provide an understanding of the status of the design development;
(c) without limiting its obligations under Clause 19.2 to identify all Modifications
arising during the Design Development Process;
(d) to explain how the design incorporates the outcomes agreed or otherwise required
by the User Groups and makes provision for the meeting of Project Co's design
obligations as set out in this Agreement;
Legal\104938921.16 152
(e) to define key issues;
(f) to identify the then current status of the User Group process;
(g) to identify the proposed location of all Equipment; and
(h) (Design Stage 3 Report): to provide an understanding of each element of the

design before the detailed Design Documentation is produced,
in accordance with the requirements of this Agreement and the Design Development Plan. At
these presentations Project Co must make available Project Co's designers and any other
Project Co Associate required by the Project Director, to assist in providing such explanations,
understanding or additional information as contemplated in this Clause 19.9.
19.10 Design Stages

Project Co must, in accordance with the Design Development Plan and the Design
Development Sub-Program, undertake the Design Development Process in the stages set out
below.
(a) (Design Stage 1 Activities): Stage 1 of the Design Development Process shall
include:
(i) review of the Bid Design Documentation with the User Groups to finalise
the Functional Areas and functional relationships within the design of the
Facility;
(ii) finalise and document the Lease and Licence Plans, vehicular and
pedestrian access areas (including interaction and impacts with the
Existing Facility and parklands); and
(iii) the design of generic room layouts as agreed with the State.
(b) (Design Stage 1 Documentation): At the conclusion of the Design Stage 1

Activities Project Co shall submit to the Project Director for endorsement in
accordance with the Review Procedures all Design Documentation relevant to the
Design Stage 1 Activities including but not limited to:
(i) the Design Report in respect of the Design Stage 1 Activities;
(ii) revised 1:200 architectural drawings confirming the Functional Areas and
functional relationships; and
(iii) Site drawings depicting vehicular and pedestrian traffic flows.
(c) (Design Stage 2 Activities): After the review and endorsement of the Stage 1
Design Documentation in accordance with the Review Procedures, Project Co will
commence the Design Stage 2 Activities which shall include:
(i) consultation with the User Groups to further develop the design of the
Facility;
(ii) development and submission of mock-up rooms and architectural renders

to the User Groups with the following areas to be included:
A. single patient room;
B. double patient room;

Legal\104938921.16 153
C. NNU cot space;
D. PICU patient care area; and
E. recovery area bed heads;
(iii) development of 1:100 architectural drawings and submission to User

Groups for review;
(iv) development of the interior design package through User Group

consultation;
(v) development of and submission of schedules of finishes, colours and

materials for the exterior and interior of the Facility to User Groups for
review; and
(vi) prepare and present to the Project Director an acoustic report and security
report with accompanying Design Documentation to outline the
philosophy of the design in respect of these two disciplines.
(d) (Design Stage 2 Documentation): At the conclusion of the Design Stage 2

Activities, Project Co shall submit to the Project Director for endorsement in
(i) the Design Report in respect of the Design Stage 2 Activities (which must
include a Disability Discrimination Act Report, demonstrating the
compliance of the design with the requirements of the Disability
Discrimination Act 1992 (Cth) and all applicable Quality Standards,
including Australian Standard 1428 Part 3);
(ii) 1:100 architectural drawings (which shall include dimensional floor

plans);
(iii) 1:100 engineering services drawings with an accompanying schematic

design report;
(iv) area schedules for the whole of the Facility;
(v) concepts for integrated art and memorabilia including art that Project Co
proposes to purchase as part of the Public Art Allowance;
(vi) schedules of finishes, colours and materials for the exterior and interior of
the Facility; and
(vii) room data sheets.
(e) (Design Stage 3 Activities): After the review and endorsement of the Stage 2
Design Documentation Project Co will commence Design Stage 3 Activities which
shall include the continued detailed design development of 1:50 architectural and
engineering services drawings in consultation with the User Groups including the
development of 1:50 architectural drawings that demonstrate the room location of
fittings, furnishings and equipment.
(f) (Design Stage 3 Documentation): At the conclusion of the Design Stage 3

Activities Project Co shall submit to the Project Director for endorsement in
Legal\104938921.16 154
(i) the Design Report in respect of the Design Stage 3 Activities;
(ii) 1:50 architectural drawings;
(iii) 1:50 combined services drawings;
(iv) joinery and elevation drawings;
(v) room data sheets;
(vi) interior design submission report including samples, materials and

finishes;
(vii) way finding report and signage methodology;
(viii) schedules of furniture, fittings and equipment;
(ix) landscaping drawings including internal and external courtyards;
(x) arborist report and tree management plans; and
(xi) a full set of all engineering services drawings including: mechanical,

electrical, hydraulic, fire, structural, civil, façade, security and vertical
transportation.
(g) (Dates for Submission of Stage 3 Design Documentation): The Stage 3 Design
Documentation referred to in paragraph (f)(ii) and (iii) shall be submitted to the
Project Director on a floor by floor basis with Design Documentation in respect of
each floor to be submitted at intervals of no less than 10 Business Days. The
submission of the Design Documentation in accordance with this paragraph must be
clearly identified in the Design Development Sub-Program.
(h) (Design Stage 3 Report): The Design Report for the Stage 3 Design
Documentation shall be submitted with the last set of the Design Documentation to
be submitted under paragraph (g).
19.11 Content of Design Documentation to be submitted

(a) (General requirements to draft Design Documentation): The draft Design
Documentation, submitted in accordance with Clause 19.10, must where relevant
contain the following information:
(i) identification of the Design Stage to which it relates;
(ii) identification of the Functional Areas and Functional Units at a level

appropriate for that Design Stage;
(iii) all necessary design drawings and specifications for the Design Stage;
(iv) for each Design Stage except the first Design Stage design amendments
highlighted on drawings are to be submitted demonstrating the changes to
relevant documents and drawings from those submitted for the previous
Design Stage or in respect of the first Design Stage from the Bid Design
Documentation, in each case, in respect of each Functional Area and
Functional Unit;
(v) a consolidated plan showing all Functional Areas and Functional Units up
to that Design Stage;
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(vi) details of any Modifications that have arisen during the Design
Development Process; and
(vii) any other information required by this Agreement or that the Project
Director reasonably requires,
and must be stamped as 'for construction' (where applicable).
(b) (Additional Information): At all reasonable times, Project Co shall provide to the
Project Director any additional information or documentation as reasonably
requested by the Project Director for the purposes of reviewing the Design
Documentation in accordance with the Review Procedures.
(c) (Co-ordination): Project Co shall ensure that the Project Director receives
co-ordinated Design Documentation for review at the Design Stages specified in
Clause 19.10. Failure to provide co-ordinated Design Documentation may delay
review of the Design Documentation by the Project Director. If any such delay is
likely:
(i) the Project Director shall notify Project Co of the time that it will take to
review the Design Documentation; and
(ii) the time that the State is entitled to in order to review the Design
Documentation under the Review Procedures shall be extended
accordingly; and
(d) Project Co shall not be entitled to make any Claim against the State in respect of
any such delay.
19.12 Statements from Project Co

Project Co must lead and manage the Design Development Process. Prior to Project Co
submitting the Design Documentation to the Project Director in accordance with Clause 19.10,
Project Co shall conduct a full review of the Design Documentation to ensure that the
requirements of Clause 19.11 have been satisfied and shall submit with the Design
Documentation a statement from Project Co warranting that:
(a) the Design Development Process has been complied with;
(b) the Design Documentation complies with the requirements of the Project
Agreement; and
(c) the Design Documentation has been submitted in accordance with the Design
Development Plan and contains the information required by Clause 19.11.
19.13 Use of Design Documentation

Project Co:
(a) may only use the Construction Documentation (and no other Design
Documentation) for construction of the Facility; and
(b) must not amend the Construction Documentation unless such amendment has been
submitted to the Project Director and the Review Procedures have been applied to
such amendment.
Legal\104938921.16 156
19.14 Design Report
Project Co must, prepare and submit a design report as part of each Design Stage which
demonstrates that issues of planning, design, materials selection, constructability and building
services have been co-ordinated and integrated into the Design Documentation and contains in
reasonable detail, a summary of all the Design Documentation submitted under this Clause 19
as part of the relevant Design Stage (the "Design Report").
19.15 Schedule of Accommodation

(a) Project Co must update and submit a further draft Schedule of Accommodation in
(b) The further draft Schedule of Accommodation must:
(i) be in the same format as the Draft Schedule of Accommodation;
(ii) be consistent with the Construction Documentation up to the then latest

Design Stage, and if any item in that table has no equivalent in the Design
Development Plan the weighting for that item must be approved by the
Project Director (acting reasonably); and
(iii) comply with the requirements set out in the Design Development Plan but
adjusted having regard to the requirements of the User Groups, the
Construction Documentation and remaining Design Documentation.
(c) If the Project Director endorses the further draft Schedule of Accommodation
submitted under Clause 23.2 in accordance with the Review Procedures, it shall be
the Schedule of Accommodation.
19.16 Monitoring of Design Performance

Without limiting the Review Procedures, Project Co must give the Project Director throughout
the Design Development Process:
(a) the opportunity to comment on and monitor all Design Documentation and the
design performance of Project Co; and
(b) access to Project Co's and any Subcontractor's or Designer's premises where design
work is being performed as reasonably required by the Project Director.
19.17 No Obligation to Review

(a) (State benefit): the Design Development Process referred to in this Clause 19, any
participation in that process by the State or any participation on its behalf and the
receipt and review by the Project Director of any Design Documentation submitted
by Project Co is solely for the benefit of the State;
(b) (No State duty of care): neither the State, the Project Director, nor any other
person on behalf of the State assumes or owes any duty of care to Project Co:
(i) to participate in, or in participating in, any Design Development Process;

or
Legal\104938921.16 157
(ii) to review the Design Documentation, or in reviewing the Design
Documentation submitted by Project Co to ascertain Defects, errors,
omissions or compliance with this Agreement; and
(c) (No effect): neither participation in any Design Development Process referred to in
Clause 19.1 nor any review of or comments upon or failure to review or comment
upon any Design Documentation by the State, the Project Director any User Group
or any other person on behalf of the State (including under the Review Procedures)
will:
(i) relieve Project Co from, or alter or affect, Project Co's liabilities or

obligations;
(ii) constitute any representation by the State or the Project Director as to the
compliance of the Design Documentation with the requirements of this
Agreement; or
(iii) prejudice the State's rights against Project Co,
whether under this Agreement or otherwise according to Law.
20. Equipment during the Design and Construction Phase

20.1 Design and Construction Phase
This Clause 20 sets out Project Co's obligations in respect of the purchase, supply, installation
and relocation of Equipment during the Design and Construction Phase in order to achieve
Stage 1 Final Completion and Stage 2 Completion.
Project Co's rights and obligations in respect of the maintenance and procurement of
Equipment during the Operating Term are set out in Clause 34.
20.2 General Requirements

(a) (Selection): Project Co must:
(i) select and purchase all Group 1, Group 2A and Group 3A Equipment in
accordance with Clauses 20.4 to 20.5; and
(ii) purchase all Group 3B Equipment in accordance with Clauses 20.6 and
20.8.
(b) (Delay Purchase): Project Co shall delay the selection and purchase of the Group
2A, 3A and 3B Equipment to a time as late as reasonably possible in the Design and
Construction Phase (having regard to Project Co's other obligations under this
Agreement) and, without limiting the foregoing (but subject to paragraph (c) below)
it shall not commence to purchase any such Equipment earlier than 18 months prior
to the Date for Stage 1 Final Completion in order to ensure that:
(i) any warranty period in respect of any Group 3B Equipment prior to the
Operational Commencement Date is minimised; and
(ii) as at the Operational Commencement Date the most technically up to

date Equipment is purchased.
Legal\104938921.16 158
(c) (Early Purchase) Project Co may purchase Equipment earlier than 18 months prior
to the Date for Stage 1 Final Completion where it is necessary due to the time
required for its design, manufacture, delivery or installation.
(d) (Relocation): Project Co must transfer all Transition Equipment from the Existing
Facility to the Facility in accordance with Clause 20.9.
(e) (Installation): Subject to paragraph (f)(ii), Project Co must install or locate (as
applicable depending on whether the Equipment is loose or fixed) all of the
Equipment in the Facility to the satisfaction of the Independent Reviewer, in the
locations designated in the Construction Documentation or, where not designated,
as otherwise required by the Hospital Operator.
(f) (Commissioning and Testing):
(i) Subject to paragraph (f)(ii), Project Co is required to commission and to

successfully undertake all Completion Tests in respect of the Equipment
in the Facility in accordance with the Completion Manual, the
Completion Requirements and the Completion Sub-Program.
(ii) Project Co will not be required to de-commission, disconnect, install,

commission or undertake any Completion Tests in respect of the Group
3B ICT Equipment and Group 3BT ICT Equipment.
(iii) Without limiting subparagraph (i), the State may undertake additional
acceptance testing or certification in respect of Equipment in the Facility.
Any such acceptance testing or certification undertaken by the State will
not in any way lessen or otherwise affect Project Co's obligations or the
State's rights against Project Co, whether under this Agreement or at Law.
(g) (Responsibility for costs): Save where expressly stated in this Agreement to the
contrary , Project Co is responsible for all costs incurred in respect of the
Equipment including the costs of ordering, purchasing, delivering, relocating,
storing, installing, connecting, commissioning and testing of the Equipment.
20.3 Equipment Lists

(a) The Equipment Lists are indicative only. They have been prepared prior to the
design of the Facility and significantly in advance of the dates on which the
Equipment will be required to be selected or procured.
(b) Changes may be made by Project Co or the Project Director to the Equipment Lists
(including changes to either the type, specification or quantities of such
Equipment).
(c) Except as otherwise expressly provided under this Agreement, changes of the nature
referred to in paragraph (b) will not, in any way derogate from, limit or affect
Project Co's obligations or Liabilities under this Agreement, including the
obligation to ensure that the Facility will be Fit for the Intended Purposes.
(d) Project Co will not be entitled to make any Claim against the State arising out of or
in connection with any changes of the nature referred to in paragraph (b) save where
such changes are an Equipment Modification or, gives rise to a State Modification.
Legal\104938921.16 159
20.4 Selection of Equipment
(a) (Selection): Subject to Clause 20.6, Project Co must select Equipment (other than
Transition Equipment) in accordance with this Clause 20.4.
(b) (Consultation) Unless the Project Director agrees otherwise, Project Co must
consult with the Project Director and the Hospital Operator (each of whom shall
facilitate the participation of the other relevant State Associates as necessary in any
such consultation process) prior to selecting for purchase any items of Equipment
other than the Group 1 Equipment.
(c) (Notification): Project Co must inform the Project Director by written notice of:
(i) each item of Equipment it selects and intends to purchase which subject
to Clause 20.5, must be at least of the equivalent standard, quality and
functionality of the relevant Equipment specified in the Equipment List;
(ii) the Equipment Specification for each item of Equipment; and
(iii) whether it considers that if it proceeds with the purchase of that item of
Equipment that it may constitute an Equipment Modification and, if so,
provide details of the cost or savings associated with any such Equipment
Modification in accordance with the Change Compensation Principles,
prior to purchasing such item of Equipment and in sufficient time to enable Project
Co to meet the Equipment Procurement and Installation Sub-Program taking into
account the time periods in this Clause 20.4 and the requirements of Clause 20.2(b).
(d) (Failure to notify) If Project Co fails to notify the Project Director in accordance
with Clause 20.4(c)(iii), Project Co shall not be entitled to claim any Equipment
Modification or make any other Claim against the State in respect of that
Equipment.
(e) (Approval): The Project Director must, within the Review Period, notify Project Co
whether it agrees or disagrees with Project Co's selection or quantity of Equipment.
The Project Director may disagree with Project Co's selection or quantity of any
Equipment which in the Project Director's reasonable opinion does not comply with
the requirements of this Agreement. The Project Director must give reasons for its
disagreement. The Project Director will be deemed to have accepted Project Co's
selection or quantity of such Equipment if he fails to respond within the Review
Period.
(f) (Consultation or determination): If the Project Director disagrees with Project

Co's selection or quantity of such Equipment the parties must consult to resolve any
dispute. If the parties are unable to reach agreement within 20 Business Days from
the end of the Review Period referred to in paragraph (e), the Project Director will
determine the item and quantity of Equipment to be selected, and will notify Project
Co of that determination. Project Co must procure the Equipment in accordance
with the Project Director's determination.
(g) (Equipment Modification): Project Co must notify the Project Director, in writing
within 10 Business Days after a determination under paragraph (f) is made on the
selection of an item of Equipment, whether it considers the selection or quantity to
be an Equipment Modification or whether it reasonably considers that the item of or
quantity of Equipment does not comply with the requirements of this Agreement.
Legal\104938921.16 160
(h) (No Claim): If Project Co fails to notify the Project Director in accordance with
paragraph (g), Project Co shall not be entitled to claim any Equipment Modification
or make any other Claim against the State in respect of that Equipment.
(i) (Meeting to review): Promptly on the reasonable request of Project Co or the

Project Director, a representative of Project Co and the Project Director will meet to
review:
(i) the current Equipment Modification Notices; and
(ii) any Equipment Modification made in accordance with this Clause 20.4
where an Equipment Modification Notice was not issued but which the
Project Director reasonably believes resulted in savings to Project Co,
to agree whether each of these are in fact Equipment Modifications.
(j) (Disputes): If the Project Director and Project Co are unable to agree on whether
the selection or quantity of Equipment amounts to an Equipment Modification
within 5 Business Days of any meeting under paragraph (i), the matter shall be
referred for determination in accordance with the Accelerated Dispute Resolution
Procedures.
(k) (Change Notice and Modification Order): If the Independent Expert determines
that there has been an Equipment Modification or it is agreed that there has been an
Equipment Modification, Project Co shall issue a Change Notice and Project Co's
entitlement in respect of such Equipment Modification shall be calculated and
payable in accordance with the Change Compensation Principles.
20.5 Group 1 Equipment

Project Co must purchase Group 1 Equipment in accordance with the Design Requirements
and otherwise in such quantities and of such quality as is necessary to render the Facility Fit
for the Intended Purposes.
20.6 Group 3B Equipment

(a) (Additional Information for Group 3B Equipment): When procuring Group 3B
Equipment, Project Co must provide such particulars of the Group 3B Equipment it
is required to procure and the terms on which it may be acquired as the Project
Director may reasonably require and must also prepare and submit for the approval
of the Project Director (in addition to the information referred to in Clause 20.4)
within the Review Period a statement specifying, for each item of Group 3B
Equipment the following (for which a quote has been obtained):
(i) the Purchase Cost available to Project Co from commercial suppliers,

including servicing options, volume and other discounts;
(ii) details of the proposed suppliers;
(iii) the transportation, storage, handling and delivery costs;
(iv) the costs of installation, testing and commissioning the Group 3B

Equipment where not included in the Purchase Cost;
(v) warranty coverage offered by the relevant supplier;
(vi) the time when the item will be delivered to the Site;
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(vii) any Taxes applicable to the item (including GST); and
(viii) details of the Purchase Cost for all Group 3B Equipment that Project Co
proposes to procure and whether this is less than or more than the
Group 3B Limit,
and in each case if so requested by the Project Director a copy of each quote.
(b) (Approval of Group 3B Equipment): If the Project Director approves the

selection or quantity of Group 3B Equipment, or does not withhold approval within
the Review Period, the applicable Group 3B Equipment shall be deemed to be
approved for the purposes of this Agreement.
(c) (Commercially better terms): Where Project Co notifies the State of the Purchase
Cost of Group 3B Equipment and the State is able to purchase that same Group 3B
Equipment from the same supplier for a lower Purchase Cost or otherwise on
commercially better terms, Project Co must, at the direction of the Project Director,
appoint the State as its agent to purchase the Group 3B Equipment on behalf of
Project Co and the State shall procure the Group 3B Equipment accordingly at the
cost of Project Co.
(d) (Variation of list of Group 3B Equipment): If the Project Director does not wish
to approve the applicable Group 3B Equipment pursuant to paragraph (b) then he
may (entirely at his discretion):
(i) reduce the quantity or change the Equipment Specification for that
Group 3B Equipment; or
(ii) require Project Co to purchase some or all of the items of Group 3B

Equipment from an alternative supplier,
(the Alternative Group 3B Equipment).
20.7 Alternative purchase of Group 3B Equipment by the State

(a) If the Project Director requires Project Co to purchase Alternative Group 3B
Equipment then Project Co must (where relevant):
(i) obtain and provide to the Project Director Group 3B Equipment Details in
accordance with Clause 20.6(a) in respect of any alternative Supplier;
(ii) advise the Project Director if it considers that there may be any delay in
the Supply of the Alternative Group 3B Equipment to the Site and what,
if any impact that delay will have on the achievement of Completion;
(iii) if, notwithstanding any advice received under paragraph 20.7(a)(ii) the
Project Director requires Project Co to procure the Alternative Group 3B
Equipment, procure such items of Equipment; and
(iv) to the satisfaction of the Independent Reviewer, place or install all the
Alternative Group 3B Equipment in the locations in the Facility
designated in the Construction Documentation or, where not designated,
as otherwise required by the Hospital Operator and notified to Project Co
within the Review Period.
Legal\104938921.16 162
(b) (State risk): If Project Co procures items of Alternative Group 3B Equipment from
an alternative supplier or to a changed Equipment Specification nominated by the
State, then the State shall bear the risk:
(i) relating to any delay in the delivery and installation (to the extent the
alternative supplier is required to undertake such installation) of the
Group 3B Equipment at the Site in so far as any such delay satisfies the
requirements of Clause 32; and
(ii) of the Group 3B Equipment not passing any Completion Tests or not
functioning as intended, except to the extent due to the failure of Project
Co to install the Group 3B Equipment in accordance with this
Agreement.
(c) (Compensable Extension Event): Subject to Clause 20.2(f)(ii), any:
(i) delay for which the State bears the risk under paragraph (b)(i); or
(ii) failure of any Group 3B Equipment to pass any Completion Test or not
function as intended for which the State bears the risk under
paragraph (b)(ii),
shall, save where the State exercises its discretion under paragraph (d), be a
Compensable Extension Event and a Compensable Intervening Event.
(d) (Failure of Group 3B Equipment): The failure of any Group 3B Equipment to

pass any Completion Test or not function as intended for which the State bears the
risk under paragraph (b)(ii) may, entirely at the State's discretion:
(i) be required by the State to be satisfied as a Post Completion Test; or
(ii) be treated as an Outstanding Item.
(e) (ICT Equipment): The State shall de-commission, disconnect, install, commission
and undertake all Completion tests in respect of the Group 3B ICT Equipment and
the Group 3BT ICT Equipment.
(f) (Payment to State): The State may at its discretion notify Project Co of and require
Project Co to pay some or all of the costs of performing the work referred to in
paragraph (e), in which case, such costs shall be Moneys Owing from Project Co to
the State payable on demand by way of set-off against the Group 3B Limit. Save
that for the purpose of determining whether the total Purchase Cost of all Group 3B
Equipment has reached the Group 3B Limit under Clause 20.8, the Group 3B Limit
shall be reduced by any amounts paid by Project Co under this paragraph (f).
(g) (Release): Project Co will be relieved from all Claims and Liabilities arising in
respect of the selection of Group 3B Equipment or any other matters which the
State is responsible for (except to the extent Project Co is in breach of its
obligations under this Clause 20 or Clause 34.2(e)).
20.8 Group 3B Equipment Limit

(a) (Purchase Cost) For the purpose of Clause 20.6 and this Clause 20.8, Purchase
Cost means the cost of purchasing the Group 3B Equipment excluding any costs of
delivery, relocating, transport, installation, connection, commissioning and testing
provided however that those costs may be included in the Purchase Cost:
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(i) in respect of those items which are denoted as "Clause 20.8(a)(i) items"
in the Group 3B Equipment List and the Group 3B ICT Equipment; and
(ii) in respect of other items, where it is standard industry practice for those
costs to be included in the supplier's purchase price for that Equipment
and those costs are expressly included in the supplier's purchase price,
but not including GST or any other recoverable Taxes borne by Project Co.
(b) (Costs not included in Group 3B Limit): Where the costs of ordering, purchasing,
delivering, transporting, relocating, installing, connecting, commissioning and
testing of Group 3B Equipment are not included in the Purchase Cost, Project Co
will be liable for such costs including where they exceed the Group 3B Limit.
(c) (Group 3B Limit): Subject to paragraph 20.7(f), Project Co is liable for the
Purchase Cost of the Group 3B Equipment only up to the Group 3B Limit.
(d) (Relevant factors): Subject to paragraph 20.7(f), in determining whether the Group
3B Limit has been reached account will not be taken of any cost incurred in respect
of the Group 3B Equipment other than the Purchase Cost of that Equipment.
(e) (State election): Where the aggregate of the Purchase Cost of the Group 3B
Equipment approved pursuant to Clause 20.6 exceeds the Group 3B Limit, the State
may elect:
(i) to direct Project Co not to purchase certain items of Group 3B Equipment

so that the aggregate of the Purchase Cost does not exceed the Group 3B
Limit; or
(ii) to proceed with the purchase of the Group 3B Equipment with the State
to pay for the amount of the Purchase Cost in excess of the Group 3B
Limit in accordance with the Change Compensation Principles.
(f) (Completion): If at Stage 1 Final Completion (or at Stage 2 Completion if there are
items of Group 3B Equipment to be purchased during the Stage 2 Works), the
Purchase Cost of all Group 3B Equipment is less than the Group 3B Limit, the
amount of any difference shall be a debt due and owing to the State and shall be
paid to the State by Project Co as a lump sum amount at Stage 1 Final Completion
or Stage 2 Completion (as the case may be) in accordance with the Change
20.9 Transition Equipment

(a) (Relocation): Project Co must transfer all Transition Equipment from the Existing
Facility to the Facility as late as possible during the Transitional Period as part of
the Transitional Activities. The transfer of Transition Equipment must be
undertaken:
(i) in consultation with the State, the Hospital Operator and to the
satisfaction of the Independent Reviewer;
(ii) in accordance with the Completion Requirements, Transition Plan and

Transitional Activities Sub-Program; and
(iii) so as to minimise disruption to the operation of the Existing Facility.
Legal\104938921.16 164
(b) (Functioning of Equipment): Prior to its transfer from the Existing Facility, the
State and Project Co shall consult to assess the current condition of the Transition
Equipment. If following such assessment, the State requires Project Co to transfer
that item of Equipment, the State shall ensure that the Transition Equipment is
capable of being relocated without affecting its functions.
(c) (Release): Project Co will be relieved from all Claims and Liabilities arising in
respect of the Transition Equipment (except to the extent Project Co or a Project Co
Associate has caused damage to the Transition Equipment or has failed to transfer
install or locate the Equipment with due care and in accordance with this Clause 20
or is in breach of its obligations under Clause 34).
(d) (Change in categorisation): Upon the Date of Stage 1 Completion, all Group 2AT,
3AT and 3BT Equipment located or installed in the Stage 1 Facility shall become
Group 2A, 3A and Group 3B Equipment respectively.
20.10 Limitation on Liability in respect of Equipment Modifications

(a) If any Direction of the Project Director other than a direction issued under
Clause 20.4 involves an Equipment Modification, Project Co must, if it wishes to
make a Claim against the State arising out of or in connection with the Equipment
Modification or Direction within 10 Business Days of receiving the Direction and
before commencing any work in respect of the Direction give written notice to the
Project Director that it considers the Direction to involve an Equipment
Modification and the reason for this.
(b) Subject to Clause 20.4, Project Co shall not be entitled to make any claim against
the State in respect of an Equipment Modification unless it complies with this
Clause 20.10.
(c) Subject to Clauses 20.3(d) and 20.6, Project Co shall not be entitled to make any
Claim against the State in respect of:
(i) any change in the specification of an item of Equipment; or
(ii) any change in the quantity of an item of Equipment,
unless such change is an Equipment Modification and has been made in accordance
with the terms of this Agreement.
20.11 Public Artwork and Equipment Allowances

(a) Project Co is required to:
(i) purchase and install public artwork for the Facility up to the amount of
the Public Artwork Allowance; and
(ii) purchase and install Equipment in the Facility as directed by the Project
Director or provide anything else requested by the State in respect of the
Project up to the amount of the Equipment Allowance.
(b) Project Co is only entitled to be paid Base Costs and is not entitled to any
Modification Allowances for the purchase and installation of public artwork in
accordance with the Public Artwork Allowance.
Legal\104938921.16 165
21. Plant and Equipment not Fit for the Intended Purposes
(a) Where the Project Director, acting reasonably, determines that in respect of an item
of Plant or Equipment proposed or selected by Project Co during the Design and
Construction Phase (other than any specific item or functionality of item described
in the Bid Design Documentation or any Design Documentation endorsed or
approved in accordance with Clause 19 or the Review Procedures or any Plant or
Equipment endorsed under Clauses 33.6 or 33.7 respectively), an alternative item of
Plant or Equipment is readily available which delivers the same functional
requirements on comparable terms and that:
(i) is expected to deliver a substantially lower Whole of Life Cost than the
relevant item of Plant or Equipment proposed by Project Co (by reference
to the Laws, Quality Standards, Hospital Functions and technology
current as at the date of the selection of the Plant or Equipment in
accordance with the Design Development Process); or
(ii) is expected to reduce substantially the Hospital Operator's operating costs

or the volume of energy consumption or greenhouse gas or other harmful
emissions compared with the item selected by Project Co (by reference to
the Laws, Quality Standards, Hospital Functions and technology current
as at the date of the selection of the Plant or Equipment in accordance
with the Design Development Process), without a material increase in
Whole of Life Costs; and
(iii) in each case, allowing for reasonable procurement and installation

implications:
A. will not have any time implications for Project Co;
B. will not adversely affect Project Co's ability to meet the

C. will ensure that the Facility remains Fit for the Intended
Purposes,
Project Co must agree to install that alternative item of Plant or Equipment within
10 Business Days of being so advised by the Project Director, or as otherwise
determined under the Accelerated Dispute Resolutions Procedures.
(b) Any change in the selection of an item of Plant or Equipment as a result of a

determination by the Project Director in accordance with paragraph (a) shall not be
a State Modification or an Equipment Modification and Project Co shall not be
entitled to make any Claim against the State as a consequence of any such change in
the selection of an item of Plant or Equipment.
(c) For the avoidance of doubt, this Clause 21 does not apply to any Group 3B
Equipment, any Transition Equipment and any Plant or Equipment that is retained
in the Retained Buildings.
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22. Construction of Stage 1 Works
Project Co will construct the Stage 1 Works:
(a) in accordance with:
(i) the Construction Documentation insofar as it relates to the Stage 1

Works;
(ii) the Project Management Plan, Master Works Program and Completion
Manual insofar as they relate to the Stage 1 Works;
(iii) without limiting the strict or absolute nature of any other obligation of, or
warranty given by, Project Co under this Agreement, Best Construction
Practices;
(iv) all Authorisations required for the Stage 1 Works;
(v) all relevant Quality Standards;
(vi) the Quality Assurance System;
(vii) all State Modifications and Project Co Modifications; and
(viii) all other requirements of this Agreement;
(b) so that:
(i) Project Co can provide the Services in respect of the Stage 1 Facility in
accordance with the Services Specifications during the Transitional
Period (for those Services required to be provided during the Transitional
Period) and, from the Operational Commencement Date;
(ii) the Stage 1 Facility will be Fit for the Intended Purposes;
(iii) each Construction Milestone for the Stage 1 Works occurs by its
Construction Milestone Date;
(iv) Stage 1 Technical Completion occurs by the Date for Stage 1 Technical
Completion; and
(v) Stage 1 Final Completion occurs by the Date for Stage 1 Final
Completion; and
(c) on the Stage 1 Site, and will not construct any works other than the Stage 1 Works
on the Stage 1 Site and will ensure that no Project Co Associate constructs any
works other than the Stage 1 Works on the Stage 1 Site.
23. Preparation for Stage 1 Final Completion

23.1 Completion Documentation
(a) Project Co must prepare in consultation with the Project Director and the Hospital
Operator and submit to the Project Director for endorsement in accordance with the
Review Procedures:
Legal\104938921.16 167
(i) at least 12 months before the Date for Stage 1 Technical Completion, an
updated draft; and
(ii) at least 9 months before the Date for Stage 1 Technical Completion, a
final updated draft,
of the Completion Manual, Completion Plan, Training Plan and Transition Plan.
(b) The documents submitted under paragraph (a) must be prepared in accordance with
the Completion Requirements and shall form part of the Project Management Plan.
(c) Project Co must comply with the Completion Manual, Completion Plan, Transition
Plan and Training Plan as endorsed or deemed to be endorsed by the Project
Director in accordance with the Review Procedures.
23.2 Associated Documentation

(a) (Associated Documentation): Project Co must prepare and submit for endorsement
in accordance with the Review Procedures:
(i) at least 12 months before the Date for Stage 1 Technical Completion,
initial drafts; and
(ii) at least 6 months before the Date for Stage 1 Technical Completion, final
drafts,
of each of:
(iii) the Policy and Procedures Manual (including the documentation referred
to in Clause 23.4);
(iv) the Handover Package;
(v) the Asset Management Plan;
(vi) the Asset Register; and
(vii) the Five Year Work Plan,
(the "Associated Documentation"), which must be in accordance with any outline

of that manual, program, plan or register annexed to this Agreement.
(b) (Compliance): The documents submitted under paragraph (a) must be prepared in
accordance with and otherwise comply with the Services Specifications and this
Agreement.
(c) (Inconsistency): If there is any inconsistency between the Associated

Documentation and the Services Specifications, the Services Specifications shall
prevail.
(d) (Further updated documents): At the same time as Project Co prepares and
submits the documents under paragraph (a), Project Co must prepare and submit for
endorsement in accordance with the Review Procedures a further updated:
(i) Communications Approach for the Operating Term in respect of the

Services; and
(ii) Schedule of Accommodation in accordance with Clause 19.15(b).
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(e) (Compliance): Project Co must comply with the Associated Documentation and
updated documentation referred to in paragraph (c) as endorsed or deemed to be
endorsed by the Project Director in accordance with the Review Procedures.
23.3 Annual Works Plan

Project Co must prepare and submit for endorsement in accordance with the Review
Procedures an Annual Works Plan, which meets the requirements of and in accordance with
the Services Specifications, at least 3 months prior to the Date for Stage 1 Final Completion.
The Annual Works Plan will, once prepared, form part of the Asset Management Plan, and
must be updated in accordance with the Services Specifications. Project Co must comply with
the Annual Works Plan as endorsed or deemed to be endorsed by the Project Director in
accordance with the Review Procedures.
23.4 Policy and Procedures Manual documentation

(a) Without limitation to Clause 23.2(b), Project Co must prepare and submit as part of
the Policy and Procedures Manual under Clause 23.2(a), the following documents:
(i) a Performance Monitoring Program;
(ii) a Quality Assurance Plan;
(iii) a Utility Services Conservation Policy;
(iv) an Emergency Procedures Manual; and
(v) all the other documents and information required to be prepared and
included in the Policy and Procedures Manual in accordance with Section
2.4.2 of the Services Specifications,
each containing the information required by, and otherwise in accordance with, the
Services Specifications, and otherwise in accordance with the requirements of this
Agreement.
(b) Project Co must comply with the Policy and Procedures Manual, including all the
documents referred to in paragraph (a), as endorsed or deemed to be endorsed by
the Project Director in accordance with the Review Procedures.
23.5 Stage 1 Completion Tests and Stage 1 Post Completion Tests

Project Co shall carry out all Stage 1 Completion Tests and all Stage 1 Post Completion Tests
in accordance with the Completion Manual, the Completion Requirements and the other terms
of this Agreement.
23.6 Additional Stage 1 Tests

(a) At any time up to the date that is 1 month before the Date for Stage 1 Technical
Completion, the Independent Reviewer or Project Director may notify Project Co of
additional tests in respect of the Facility that the Independent Reviewer or Project
Director considers reasonably necessary to demonstrate that the Facility is Fit for
the Intended Purposes and has been completed in accordance with the Construction
Documentation ("Additional Stage 1 Tests").
(b) The Independent Reviewer or Project Director shall direct whether the Additional
Stage 1 Tests are required to be completed:
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(i) prior to Stage 1 Technical Completion;
(ii) prior to Stage 1 Final Completion; or
(iii) after Stage 1 Final Completion,
except that if the Additional Stage 1 Tests are not able to be completed prior to the
Date for Stage 1 Technical Completion such tests will be deemed to be a Stage 1
Post Completion Test, provided the Additional Stage 1 Tests are not necessary to
demonstrate that Stage 1 Technical Completion has been achieved.
(c) Project Co shall carry out all such Additional Stage 1 Tests in accordance with the
requirements of the Independent Reviewer or Project Director.
23.7 Conducting the Completion Tests and Stage 1 Post Completion Tests
(a) (Conduct of Completion Tests): The Completion Tests and Stage 1 Post
Completion Tests must be conducted in accordance with the Completion
Requirements and otherwise at days and times proposed by Project Co after not less
than 5 Business Days written notice of the proposed conduct of each Completion
Test or Stage 1 Post Completion Test has been given to the Independent Reviewer
and the Project Director.
(b) (Approval): The Completion Tests and Stage 1 Post Completion Tests must be
conducted to the reasonable satisfaction of the Independent Reviewer.
(c) (Attendance): The Project Director (or his or her delegate) and a person nominated
by the Hospital Operator may, and the Independent Reviewer (or his or her
delegate) must, attend each Completion Test and Stage 1 Post Completion Test.
(d) (Samples): The Independent Reviewer and Project Director may take samples in
respect of any Completion Test or Stage 1 Post Completion Test, make
measurements and otherwise carry out whatever checks and investigations they may
require in order to ensure that any Completion Test or Stage 1 Post Completion Test
has been properly carried out and satisfied.
(e) (Failure of Completion Test): A failure to successfully complete:
(i) a Stage 1 Technical Completion Test (or any Additional Test which the
Project Director directs must be successfully completed prior to Stage 1
Technical Completion) will entitle the Independent Reviewer to refuse to
issue the Stage 1 Technical Completion Certificate; or
(ii) a Stage 1 Final Completion Test (or any Additional Test which the
Project Director directs must be completed prior to Stage 1 Final
Completion) will entitle the Project Director to refuse to issue a Stage 1
Final Completion Certificate,
or to identify that failure as a Stage 1 Outstanding Item in accordance with

Clauses 24.5 and 26.4.
(f) (Failure of Post Completion Test): If:
(i) the Stage 1 Post Completion Tests are not successfully completed in
accordance with the Completion Manual, the Completion Requirements
and this Agreement; or
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(ii) the Completion Report has not been updated in respect of the Stage 1
Post Completion Tests in accordance with the Completion Requirements
and this Agreement to the satisfaction of the Independent Reviewer,
the Independent Reviewer must notify Project Co and the Project Director in
writing as to what the Independent Reviewer reasonably considers is required to be
done by Project Co to successfully complete the Stage 1 Post Completion Tests or
update the Completion Report. Within 5 Business Days after receiving such notice,
Project Co must provide the Independent Reviewer and the Project Director with a
written program for completion of those tests or work as required in the notice
received and Project Co must comply with that program and remedy, address or
complete the outstanding tests or work in accordance with that program.
(g) (State remedies): if the Stage 1 Post Completion Tests or Completion Report are
not successfully completed in accordance with the program referred to in
paragraph (f), the State may elect to take such action as it considers necessary in
order to remedy the reason for the failure to satisfy such tests or to provide the
Completion Report and the reasonable costs and expenses incurred by the State in
so doing will be a debt due and payable from Project Co to the State. The State may
require Project Co to make a demand under the Construction Bond or Post
Completion Bond for such debt, deduct or set off that amount from any amount
payable by the State to Project Co or take any other enforcement action available to
it.
(h) (Project Director discretion): the Project Director may waive the requirement for
Project Co to satisfy a Completion Test or Stage 1 Post Completion Test in his or
her absolute discretion.
(i) (No Liability or Claim): Project Co agrees that any participation or assistance
given by a State Associate to Project Co in conducting a Completion Test will be
given at the absolute discretion of the State or State Associate and without any
acceptance of any Liability or responsibility for any Claim in relation to that
participation or assistance.
24. Stage 1 Technical Completion

24.1 Stage 1 Technical Completion Report
Project Co shall prepare and deliver to the Independent Reviewer and Project Director the
Completion Report for Stage 1 Technical Completion in accordance with the Completion
Requirements no later than 20 Business Days prior to the date on which Project Co anticipates
it will achieve Stage 1 Technical Completion.
24.2 Further Testing

(a) The Independent Reviewer may, within 5 Business Days of receiving any
Completion Report in accordance with the Completion Requirements and
Clause 24.1 request Project Co to conduct such tests (in addition to any Additional
Tests) as the Independent Reviewer considers necessary to establish that Project Co
has achieved Stage 1 Technical Completion.
(b) Project Co will conduct the tests which the Independent Reviewer requests pursuant
to paragraph (a).
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24.3 Notice of Technical Completion from Project Co
When Project Co is of the reasonable opinion that it has achieved Stage 1 Technical
Completion, Project Co must give notice to that effect to the Independent Reviewer and the
Project Director. Such notice may not be given by Project Co prior to the submission of the
Completion Report or any update of that report in accordance with Clause 24.1.
24.4 Certificate of Technical Completion by Independent Reviewer

(a) Within 10 Business Days of receipt of any notice under Clause 24.3, the
Independent Reviewer will:
(i) if satisfied that the Stage 1 Works have reached Stage 1 Technical
Completion issue to Project Co and the Project Director a Stage 1
Technical Completion Certificate stating the date on which Project Co
achieved Stage 1 Technical Completion; and
(ii) if not satisfied that the Stage 1 Works have reached Stage 1 Technical
Completion either:
A. issue to Project Co and the Project Director a written notice of

the matters that are required to be addressed by Project Co
before the Stage 1 Works will reach Stage 1 Technical
Completion; or
B. direct Project Co in writing to continue with the execution of

the Stage 1 Works to achieve Stage 1 Technical Completion.
(b) If the Independent Reviewer gives a notice under paragraphs 24.4(a)(ii)A or

(a)(ii)B, the requirements of Clauses 24.2 to 24.3 and this Clause 24.4 shall apply
again.
(c) The Independent Reviewer may entirely at its discretion issue a Certificate of
Stage 1 Technical Completion if Stage 1 Technical Completion has been achieved
notwithstanding that Project Co has not issued a notice in accordance with
Clause 24.3.
(d) To the extent permitted by Law, a determination made by the Independent

Reviewer under this Clause 24.4 as to whether or not the Stage 1 Works have
reached Stage 1 Technical Completion will be final and binding on the parties.
24.5 Outstanding Items

(a) A Stage 1 Technical Completion Certificate issued by the Independent Reviewer
under Clause 24.4 may, with the consent of the Project Director, attach a list of
Stage 1 Outstanding Items which must be remedied, addressed or completed by
Project Co within a reasonable period of time as determined by the Independent
Reviewer ("List of Stage 1 Outstanding Items").
(b) The List of Stage 1 Outstanding Items as determined by the Independent Reviewer
will be included by Project Co in the Completion Report.
(c) Project Co must, within 5 Business Days after the issue of a Stage 1 Technical
Completion Certificate which attaches a List of Stage 1 Outstanding Items, provide
the Independent Reviewer with a written program for the Independent Reviewer's
approval for completion of those Stage 1 Outstanding Items which sets out times for
remedying, addressing or completing the Stage 1 Outstanding Items in accordance
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with the Independent Reviewer's requirements and Project Co must remedy, address
or complete the Stage 1 Outstanding Items to the reasonable satisfaction of the
Independent Reviewer in accordance with that program.
24.6 Effect of Notice

The issue of a Stage 1 Technical Completion Certificate under Clause 24.4 does not constitute
an approval by the State of the completion of the Stage 1 Works in accordance with this
Agreement or evidence that all or any other obligations under this Agreement have been
satisfied.
24.7 Commencement of Hospital Functions

At least 1 month before the Date for Stage 1 Final Completion the Project Director will advise
Project Co when the Hospital Operator intends to commence the Hospital Functions at the
Facility (which cannot be earlier than Stage 1 Final Completion). If the Hospital Operator
intends to delay commencing the delivery of all or part of the Hospital Functions:
(a) to a date which is later than 7 days after the Operational Commencement Date, and
this delay is not due to any delay by Project Co in achieving Stage 1 Final
Completion, the Project Director and Project Co will negotiate any corresponding
reduction to the Quarterly Service Payment that will apply due to costs not being
incurred by Project Co as a result of Services that need not be provided before the
commencement of the Hospital Functions;
(b) and the delay is due to any delay by Project Co in achieving Stage 1 Final
Completion by the Date for Stage 1 Final Completion, the Quarterly Service
Payment shall be reduced by a reasonable amount determined by the Project
Director as a result of the reduction in Services that need to be provided before the
commencement of the Hospital Functions.
25. Stage 1 Transitional Period

(a) (3 month Transitional Period): The Transitional Period shall be a period of not
less than 3 months.
(b) (obligations): Subject to paragraph (d), during the Transitional Period, Project Co
must:
(i) perform the Transitional Activities to meet the Services Specifications

(where applicable) and otherwise in accordance with this Clause 25, the
Transition Plan, the Transitional Activities Sub-Program and the
Completion Requirements;
(ii) provide the Hospital Operator with 30 days of continual and, subject to
the Transition Plan, uninterrupted access to the whole of the Facility
which period of access shall end no earlier than 10 Business Days prior to
the anticipated Date for Stage 1 Final Completion to enable the Hospital
Operator to be in a position to undertake the Hospital Functions from the
Operational Commencement Date including allowing the Hospital
Operator to familiarise all Hospital Employees with the Facility, carry out
training and emergency drills and stock consumables; and
(iii) must co-ordinate completion of the activities and works required to

achieve Stage 1 Final Completion with, and facilitate, the access provided
to the Hospital Operator under subparagraph (ii) so as to minimise
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disruption to the operation of the Existing Facility during the Transitional
Period.
(c) (Transitional Activities): Subject only to paragraph (d), as part of the Transitional
Activities, Project Co will be required to undertake:
(i) all training required by the Services Specifications and as otherwise set
out in the Training Plan; and
(ii) the removal from the Existing Facility and installation into the Facility of
all things required for the performance of the Hospital Functions at the
Facility.
(d) (Excluded Transitional Activities): The Transitional Activities shall not include
and Project Co shall not be required to undertake the Excluded Transitional
Activities.
(e) (Timing): Project Co will undertake the Other Transitional Activities during the
Transitional Period and the Artwork Transfer Activities after Stage 1 Final
Completion in accordance with the Transition Plan.
(f) (Tender Process): Project Co will conduct a tender process to carry out Artwork
Transfer Activities and the Other Transitional Activities in accordance with
Section 2.6 of the Change Compensation Principles, save that Sections 2.6(e) to
2.6(g) of Schedule 5 shall not apply in respect of such tender process.
(g) (Transitional Allowance): The Completion Payment includes the Transitional

Allowance for undertaking the Artwork Transfer Activities and the Other
Transitional Activities.
(h) (amount payable): The actual amount payable by the State to Project Co for the
Artwork Transfer Activities and the Other Transitional Activities will, in each case,
be the actual tendered costs incurred by the Builder plus a Margin calculated in
(i) (Notice): Project Co must provide to the Project Director:
(i) upon completion of the Artwork Transfer Activities or the Other

Transitional Activities a notice specifying the amount payable in respect
of each such activities in accordance with paragraph (h) and the Change
Compensation Principles;
(ii) all information and documentation requested by the Project Director to

verify the amounts and calculations set out in Project Co's notice
provided under paragraph (i)(i).
(j) (payment): If the Project Director agrees that the amount stated in Project Co's
notice provided under paragraph (i)(i) accurately reflects the amount payable in
respect of the Artwork Transfer Activities and the Other Transitional Activities and:
(i) the amount set out in Project Co's notice for the Artwork Transfer
Activities or the Other Transitional Activities is less than the relevant
Transitional Allowance, the amount of such difference will be Moneys
Owing payable by Project Co to the State on demand; or
(ii) the amount set out in Project Co's notice for the Artwork Transfer
Activities or the Other Transitional Activities is greater than the relevant
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Transitional Allowance, the State will pay the amount of such difference
in accordance with the Change Compensation Principles.
(k) (dispute): If the Project Director does not agree that the amount stated in a Project
Co notice provided under paragraph (i)(i) accurately reflects the amount payable in
respect of relevant activities, the matter shall be determined in accordance with the
Accelerated Dispute Resolution Procedures and the amount then determined to be
payable to or by Project Co shall be paid in accordance with paragraph (j).
26. Stage 1 Final Completion

26.1 Stage 1 Final Completion Report
Completion Report for Stage 1 Final Completion in accordance with the Completion
Requirements no later than 20 Business Days prior to the date on which Project Co anticipates
that it will achieve Stage 1 Final Completion.

(a) (Outstanding Items): During the Transitional Period, some of the Stage 1
Outstanding Items (if any) identified in a List of Stage 1 Outstanding Items under
Clause 24.5 may not have been remedied, addressed or completed, and there may
also be some additional Stage 1 Outstanding Items which arose during the
Transitional Period.
(b) (List of Outstanding Items): Where there are any remaining or new Stage 1
Outstanding Items as described in paragraph (a), no later than 20 Business Days
prior to the date on which it anticipates it will achieve Stage 1 Final Completion,
Project Co shall submit to the Independent Reviewer for its review and approval as
part of the Completion Report for Stage 1 Final Completion:
(i) an updated List of Stage 1 Outstanding Items to include the remaining or

new Stage 1 Outstanding Items; and
(ii) an update of the program referred to in Clause 24.5 which updates the
time for completion of the Stage 1 Outstanding Items.
(c) (Remedy period): In accordance with this clause, Project Co shall remedy all
Stage 1 Outstanding Items on the updated List of Stage 1 Outstanding Items within
the period of time required under Clause 24.5 or, where there are any new Stage 1
Outstanding Items, within a reasonable period of time as approved by the
Independent Reviewer in accordance with this clause and in any case all Stage 1
Outstanding Items must be remedied within 3 months of the Date of Stage 1 Final
Completion.
(d) (Independent Reviewer): The Independent Reviewer shall provide Project Co

with any amendments or comments on the updated List of Stage 1 Outstanding
Items and program within 5 Business Days of their receipt from Project Co.
(e) (Amendments): Project Co must amend the List of Stage 1 Outstanding Items and
program in accordance with the requirements of the Independent Reviewer and
resubmit the updated List of Stage 1 Outstanding Items and program to the
Independent Reviewer in which case paragraph (d) shall apply again.
Legal\104938921.16 175
(f) (Deemed approval): If the Independent Reviewer does not provide any comments
or amendments to the List of Stage 1 Outstanding Items or program within the time
set out in paragraph (d), the List of Stage 1 Outstanding Items and program shall be
deemed to be approved by the Independent Reviewer.
(g) (approved program): Project Co must remedy all Stage 1 Outstanding Items on
the updated List of Stage 1 Outstanding Items approved or deemed to be approved
by the Independent Reviewer in accordance with the approved updated program.
26.3 Application
(a) When Project Co is of the reasonable opinion that it has achieved Stage 1 Final
Completion, Project Co must give notice to that effect to the Independent Reviewer
(b) No notice may be given under paragraph (a) prior to the submission of the
Completion Report updated for Stage 1 Final Completion in accordance with
Clause 26.1.
26.4 Requirements of Stage 1 Final Completion

(a) Subject to Clause 26.5, within 10 Business Days of receipt of a notice under
Clause 26.3, the Project Director will:
(i) if satisfied (acting reasonably) that the Stage 1 Works have achieved
Stage 1 Final Completion issue a Stage 1 Final Completion Certificate
stating the Date of Stage 1 Final Completion was achieved;
(ii) if not satisfied (acting reasonably) that the Stage 1 Works have achieved
Stage 1 Final Completion either (acting entirely at his or her discretion):
A. issue to Project Co a written notice of the matters that were

required to be addressed by Project Co before the Stage 1
Works will achieve Stage 1 Final Completion; or
B. direct Project Co in writing to continue to execute the Stage 1

Works to achieve Stage 1 Final Completion.
(b) If the Project Director gives a notice under paragraph 26.4(a)(ii) the requirements of
Clauses 26.1, 26.3 and this Clause 26.4 shall reapply.
(c) The Project Director may (entirely at its discretion) issue a Certificate of Stage 1
Final Completion if Stage 1 Final Completion has been achieved notwithstanding
that Project Co has not issued a notice in accordance with Clause 26.1.
26.5 No obligation to certify early Stage 1 Final Completion

Notwithstanding Clause 26.4 or any other provision of this Agreement, the Project Director is
under no obligation to certify Stage 1 Final Completion prior to the Date for Stage 1 Final
Completion or that Stage 1 Final Completion has occurred prior to the Date for Stage 1 Final
Completion even if the Stage 1 Final Completion Criteria have all been satisfied prior to the
Date for Stage 1 Final Completion.
26.6 Late Stage 1 Final Completion

(a) (liquidated damages amount): If Stage 1 Final Completion is not achieved by the
Date for Stage 1 Final Completion then thereafter, until the earlier of:
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(i) the Date of Stage 1 Final Completion;
(ii) the date on which this Agreement is terminated in accordance with its
terms, and
(iii) the day that is 12 months after the Date for Stage 1 Final Completion
Project Co will owe to the State by way of liquidated damages a daily amount, for
each day of delay of [not disclosed], or if Project Co has given the Project Director
a notice in accordance with Clause 26.6(f), [not disclosed].
(b) (additional amount): If paragraph (a)(iii) applies so that Stage 1 Final Completion
is not achieved by the date that is 12 months after the Date for Stage 1 Final
Completion then (in addition to the amount referred to in paragraph (a)) Project Co
shall pay the State, the amount of [not disclosed]per day from the Date for Stage 1
Final Completion until such time as the earlier of:
(i) the Date of Stage 1 Final Completion; or
(ii) the date on which this Agreement is terminated.
(c) (payment): The amount of liquidated damages pursuant to Clause 26.6(a) will be:
(i) in relation to amounts owing under paragraph (a):
A. calculated by the Project Director for each relevant calendar

month up to Stage 1 Final Completion, based on the number
of days in that calendar month;
B. notified to Project Co promptly after the end of that calendar

month in a notice of demand; and
C. upon provision of the written demand under paragraph B the

amount set out in the demand immediately becomes Moneys
Owing to the State within 10 Business Days of the date of the
demand; and
(ii) in relation to amounts owing paragraph (b):
A. calculated by the Project Director as a lump sum and notified

to Project Co following Stage 1 Final Completion occurring;
and
B. upon provision of a written demand under paragraph A the

amount set out in the demand immediately becomes Moneys
Owing to the State within 10 Business Days of the date of the
demand.
(d) (genuine pre-estimate): Project Co acknowledges and agrees that:
(i) the amounts of liquidated damages in Clause 26.6(a):
A. have been agreed by the parties in good faith; and
B. are a genuine pre-estimate of the anticipated or actual

Liability the State and State Associates will or may suffer if
Stage 1 Final Completion does not occur by the Date for
Stage 1 Final Completion;
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(ii) each party wishes to avoid the difficulties of proof of damage in
connection with a failure to achieve Stage 1 Final Completion by the
Date for Stage 1 Final Completion; and
(iii) liquidated damages payable in accordance with Clause 26.6 are

reasonable and not intended as a penalty.
(e) (sole remedy): Subject to Clause 2.2 and Schedule 14 and without limiting
Clauses 33.1 or 53, the State acknowledges and agrees that the liquidated damages
payable by Project Co under Clause 26.6 will be the sole and exclusive remedy of
the State and State Associates for delay but nothing in this paragraph otherwise
affects, limits or reduces in any way the State's rights (including entitlement to
damages) with respect to an event giving rise to delay or the consequences of that
event (other than delay) and the State will procure that no State Associate makes
any Claim against Project Co or any Project Co Associate in connection with any
delay beyond the limitations on remedies described in this Clause 26.6.
(f) (advance notice): Project Co may, at any time during the Design and Construction
Phase, but not less than 120 days before the Date for Stage 1 Final Completion, give
the Project Director a notice stating that Stage 1 Final Completion will not occur by
the Date for Stage 1 Final Completion. This notice must include:
(i) an explanation of why Project Co believes that Stage 1 Final Completion

will not occur by the Date for Stage 1 Final Completion (including the
steps that Project Co has taken and/or will take to minimise this delay);
and
(ii) Project Co's reasonable prediction of the date on which Stage 1 Final
Completion will occur (which date must be prior to the Stage 1 Facility
Sunset Date).
(g) (Major Default): On the issue of the notice under paragraph (f) a Major Default
will be deemed to have occurred.
(h) (one notice): Only one notice may be issued by Project Co under paragraph (f).
27. Stage 2 Works

27.1 Commencement of Stage 2 Works
Project Co may commence the Stage 2 Works at any time after Stage 1 Technical Completion
save that Project Co:
(a) may not commence the Demolition Works until a date which is at least 2 months
after the Operational Commencement Date; and
(b) must not, in undertaking any Stage 2 Works up to the Date of Stage 1 Final
Completion, do anything which adversely affects or disrupts the provision of
Hospital Functions at the Existing Facility or the transition of the Hospital Operator
into the Stage 1 Facility.
27.2 Salvage Rights

(a) (Strategy for Salvage Process): Project Co will set out, in the Transition Plan
prepared and endorsed in accordance with Clause 23.1 of this Agreement:
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(i) Project Co’s strategy for undertaking the salvage process, including the
sale and disposal of Excluded Salvageable Items (the "Salvage
Process"); and
(ii) the process for conducting a detailed audit of existing Plant and
Equipment in the Existing Buildings in order for the State, the Hospital
Operator and Project Co to agree a list of:
A. likely Excluded Salvageable Items to be sold or disposed of;

and
B. other items of Plant and Transitional Equipment that will be

relocated by Project Co to the Facility in accordance with
Clauses 20.9 and 25(c) and 25(e) (respectively),
(the "Audit").
(b) (undertaking the Audit): Project Co will undertake the Audit:
(i) in accordance with the Salvage Process;
(ii) within sufficient time for the parties to meet their obligations under this
Agreement with respect to the Transitional Period;
(iii) in consultation with the State and Hospital Operator;
(iv) at no additional cost to the State or the Hospital Operator; and
(v) with the objective of maximising value for money for the State and the
Hospital Operator.
(c) (State review): Subject to Clause 20.9(b), Project Co must provide the lists referred
to in subparagraph (a)(ii) for review by the State Delegate within the Review
Period.
(d) (Salvage rights): Up to the date which is 2 months after the Operational
Commencement Date, the Hospital Operator and any of the Hospital Operator's
employees shall have right to enter and remove from the Existing Facility any loose
plant, loose residual equipment, artwork, records, memorabilia and other like
materials that have not been relocated as part of the Transitional Activities.
(e) (commencement of the Salvage Process): After expiry of the 2 month period
referred to in paragraph (d), Project Co will have the right to commence the Salvage
Process which shall, in respect of the Excluded Salvageable Items only, be
concluded no later than 6 months after the Operational Commencement Date.
(f) (proceeds from salvage of Excluded Salvageable Items): All net proceeds
generated from the sale and disposal of the Excluded Salvageable Items must be
paid to the Hospital Operator.
(g) (proceeds from salvage of Included Salvageable Items): Project Co will be

entitled to:
(i) sell or dispose of the Included Salvageable Items and retain any proceeds
generated from this sale and disposal; or
(ii) in the case of (d) of the definition of Included Salvageable Items, utilise
this item as Plant in the Facility.
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(h) (Disposal): Any salvageable item not salvaged by Project Co must otherwise be
disposed of by Project Co in accordance with its obligations under this Agreement.
27.3 Implementation of Stage 2 Works

Project Co will implement the Stage 2 Works:
(a) in accordance with:
(i) the Construction Documentation insofar as it relates to the Stage 2

Works;
(ii) the Project Management Plan, Master Works Program and Completion
Manual insofar as they relate to the Stage 2 Works;
(iii) the Demolition Specification; and
(iv) without limiting or restricting the absolute nature of any other warranty
given by Project Co under this Agreement, Best Construction Practices;
(v) all Authorisations required for, and all Laws applicable to the Stage 2
Works;
(vi) all relevant Quality Standards;
(vii) the Quality Assurance System;
(viii) any State Modifications or Project Co Modifications; and
(ix) all other requirements of this Agreement; and
(b) so that:
(i) the Services in respect of the Stage 2 Facility can be provided in

accordance with the Services Specifications from the Date of Stage 2
Completion;
(ii) the Facility is Fit for the Intended Purposes;
(iii) each Construction Milestone for the Stage 2 Works is achieved by its
Construction Milestone Date; and
(iv) Stage 2 Completion occurs by the Date for Stage 2 Completion.
27.4 Construction Management Plan and Construction Traffic Management

Plan for Stage 2 Works
(a) At least 9 months before the Date for Stage 1 Final Completion, Project Co must
prepare and submit to the Project Director for endorsement in accordance with the
Review Procedures the Construction Management Plan and Construction Traffic
Management Plan updated in respect of the Stage 2 Works.
(b) Project Co must comply with the updated Construction Management Plan endorsed
or deemed to be endorsed in accordance with the Review Procedures.
Legal\104938921.16 180
28. Preparation for Stage 2 Completion
28.1 Update of Completion Documentation
(a) At least 3 months before both the Date for Stage 2A Completion and the Date for
Stage 2 Completion, Project Co must update and submit to the Project Director for
endorsement in accordance with the Review Procedures, the Completion Manual,
Completion Plan, Training Plan and Transition Plan updated to take into account
any relevant matters arising out of or relating to the Stage 2 Works and the
Completion Requirements insofar as they relate to the Stage 2 Works.
(b) Project Co must comply with the endorsed updated Completion Manual,
Completion Plan, Training Plan and Transition Plan.
28.2 Stage 2 Completion Tests and Stage 2 Post Completion Tests

Project Co shall carry out all Stage 2 Completion Tests and all Stage 2 Post Completion Tests
in accordance with the Completion Manual, the Completion Requirements and the terms of
this Agreement.
28.3 Additional Stage 2 Tests

(a) At any time up to the date that is 1 month before the Date for Stage 2 Completion,
or Date for Stage 2A Completion (as the case may be) the Independent Reviewer or
Project Director may notify Project Co of additional tests in respect of the Stage 2
Works that the Independent Reviewer or Project Director considers are reasonably
necessary to demonstrate that:
(i) the Stage 2 Facility is Fit for the Intended Purposes and has been
completed in accordance with the relevant Construction Documentation;
or
(ii) the other Stage 2 Works have otherwise achieved Stage 2 Completion in
accordance with the terms of this Agreement,
("Additional Stage 2 Tests").
(b) The Independent Reviewer or Project Director shall direct whether the Additional
Stage 2 Tests are required to be completed:
(i) prior to Stage 2 Completion or Stage 2A Completion (as the case may
be); or
(ii) after Stage 2 Completion or Stage 2A Completion (as the case may be),
except that if the Additional Stage 2 Tests are not able to be completed prior to the
Date for Stage 2 Completion such tests will be deemed to be a Stage 2 Post
Completion Test provided the Additional Stage 2 Tests are not necessary to
demonstrate that Stage 2 Completion has been achieved
(c) Project Co shall carry out all such Additional Stage 2 Tests in accordance with the
Completion Requirements and requirements of the Independent Reviewer or Project
Director.
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28.4 Conducting the Stage 2 Completion Tests and Stage 2 Post Completion
Tests
(a) (Conduct of Completion Tests): The Stage 2 Completion Tests and Stage 2 Post
Completion Tests must be conducted in accordance with the Completion
Requirements and otherwise at days and times proposed by Project Co after not less
than 5 Business Days written notice of the proposed conduct of each such test has
been given to the Independent Reviewer and the Project Director.
(b) (Approval): The Stage 2 Completion Tests and Stage 2 Post Completion Tests
must be conducted to the reasonable satisfaction of the Independent Reviewer.
(c) (Attendance): The Project Director (or his or her delegate) and a person nominated
by the Hospital Operator may, and the Independent Reviewer (or his or her
delegate) must, attend each Stage 2 Completion Test and Stage 2 Post Completion
Test.
(d) (Samples): The Independent Reviewer and Project Director may take samples in
respect of any Stage 2 Completion Test or Stage 2 Post Completion Test, make
measurements, checks and investigations they may require in order to ensure that
any Stage 2 Completion Test or Stage 2 Post Completion Test has been properly
carried out and satisfied.
(e) (Failure of Completion Test): A failure to successfully complete a Stage 2

Completion Test will entitle the Project Director to:
(i) refuse to issue a Stage 2 or Stage 2A Completion Certificate (as the case
may be); or
(ii) identify that failure as an Outstanding Item in accordance with

Clause 29.2.
(f) (Failure of Post Completion Test): If:
(i) the Stage 2 Post Completion Tests are not successfully completed in
accordance with the Completion Manual, the Completion Requirements
and this Agreement; or
(ii) the Completion Report has not been updated in respect of the Stage 2
Post Completion Tests in accordance with the Completion Requirements
and this Agreement to the satisfaction of the Independent Reviewer,
the Independent Reviewer must notify Project Co and the Project Director in
writing as to what the Independent Reviewer reasonably considers is required to be
done by Project Co to successfully complete the Stage 2 Post Completion Tests or
update the Completion Report. Within 5 Business Days after receiving such notice
Project Co must provide the Independent Reviewer and the Project Director with a
written program for completion of those tests or work as required in the notice
received and Project Co must comply with that program and remedy, address or
complete the outstanding tests or work in accordance with that program.
(g) (State remedies): If the Stage 2 Post Completion Tests or Completion Report are
not successfully completed in accordance with the program referred to in
paragraph (f), the State may elect to take such action as it considers necessary in
order to remedy the reason for the failure to satisfy such tests or complete such
report and the reasonable costs and expenses incurred by the State in so doing will
be a debt due and payable from Project Co to the State. The State may:
Legal\104938921.16 182
(i) require Project Co to make a demand under the Post Completion Bond
for such debt;
(ii) deduct or set off that amount from any amount payable by the State to
Project Co; or
(iii) take any other enforcement action available to it.
(h) (Project Director discretion): The Project Director may waive the requirement for
Project Co to satisfy a Stage 2 Completion Test or Stage 2 Post Completion Test in
his or her absolute discretion.
(i) (No Liability or Claim): Project Co agrees that any participation or assistance
given by the State or a State Associate to Project Co in conducting a Stage 2
Completion Test or Stage 2 Post Completion Test will be given at the absolute
discretion of the State or State Associate and without any acceptance of any
Liability or responsibility for any Claim in relation to that participation or
assistance.
29. Stage 2 Completion

29.1 Stage 2 Completion Report
Stage 2A Completion Report and the Stage 2 Completion Report in accordance with the
Completion Requirements no later than 20 Business Days prior to the date on which Project
Co anticipates it will achieve Stage 2A Completion or Stage 2 Completion (as the case may
be).

(a) No later than 20 Business Days prior to the date on which it anticipates it will
achieve Stage 2A Completion or Stage 2 Completion Project Co shall submit to the
Independent Reviewer for its review and approval as part of the Stage 2A
Completion Report or Stage 2 Completion Report (as the case may be):
(i) a list of all Stage 2A or Stage 2 Outstanding Items ("List of Stage 2

Outstanding Items"); and
(ii) a written program which sets out the time for completion of the List of
Stage 2 Outstanding Items (which must be no longer than 3 months from
the anticipated Date for Stage 2A Completion or Date for Stage 2
Completion (as appropriate)).
(b) The Independent Reviewer shall provide Project Co with any amendments or
comments on the List of Stage 2 Outstanding Items and program within 10 Business
Days of their receipt from Project Co.
(c) Project Co must amend the List of Stage 2 Outstanding Items and program in
accordance with the requirements of the Independent Reviewer and, within 5
Business Days of receipt of amendments or comments from the Independent
Reviewer under paragraph (b), resubmit any updated List of Stage 2 Outstanding
Items and program to the Independent Reviewer, in which case paragraph (a) shall
apply again (except for the requirement to make the submission no later than 20
Business Days prior to the date on which it is anticipated Stage 2A Completion or
Stage 2 Completion (as appropriate) will be achieved).
Legal\104938921.16 183
(d) If the Independent Reviewer does not provide any comments or amendments to the
List of Stage 2 Outstanding Items or program or reject within the time set out in
paragraph (c) the List of Stage 2 Outstanding Items and program shall be deemed to
be approved by the Independent Reviewer.
(e) Project Co must remedy all Stage 2 and Stage 2A Outstanding Items on the updated
List of Stage 2 Outstanding Items approved or deemed to be approved by the
Independent Reviewer in accordance with the approved or deemed to be approved
program.
29.3 Stage 2A Completion

(a) When Project Co is of the reasonable opinion that it has achieved Stage 2A
Completion, Project Co may give notice to that effect to the Independent Reviewer
Completion Report updated for Stage 2A Completion in accordance Clause 29.1.
(c) Within 10 Business Days of receipt of a notice under paragraph (a) the Independent
Reviewer will:
(i) if satisfied that Stage 2A Completion has been achieved issue a Stage 2A
Completion Certificate stating the date on which Stage 2A Completion
was achieved; and
(ii) if not satisfied that Stage 2A Completion has been achieved either:
A. issue to Project Co and the Project Director a written notice of

the matters that are required to be addressed by Project Co
before Stage 2A Completion has been achieved; or
B. direct Project Co in writing to continue with the execution of

the relevant Stage 2 Works to achieve Stage 2A Completion.
(d) If the Independent Reviewer gives a notice under paragraph (c)(ii) the requirements
of this Clause 29.3 shall apply again.
29.4 Application
(a) When Project Co is of the reasonable opinion that it has achieved Stage 2
Completion, Project Co may give notice to that effect to the Independent Reviewer
Completion Report updated for Stage 2 Completion in accordance with Clause 29.1.
29.5 Requirements of Stage 2 Completion

(a) Within 10 Business Days of receipt of a notice under Clause 29.4, the Project
Director will:
(i) if satisfied (acting reasonably) that the Stage 2 Works have achieved
Stage 2 Completion issue a Stage 2 Completion Certificate stating the
date on which Stage 2 Completion was achieved;
Legal\104938921.16 184
(ii) if not satisfied (acting reasonably) that the Stage 2 Works have achieved
Stage 2 Completion either (acting entirely at his or her discretion):
A. issue to Project Co a written notice of the matters that are

required to be addressed by Project Co before the Stage 2
Works will achieve Stage 2 Completion; or
B. direct Project Co in writing to continue to execute the Stage 2

Works to achieve Stage 2 Completion.
(b) If the Project Director gives a notice under paragraph 29.5(a)(ii) the requirements of
Clauses 29.4 and this Clause 29.5 shall reapply.
29.6 No obligation to certify early Stage 2 Completion

Notwithstanding Clause 29.5 or any other provision of this Agreement, the Project Director is
under no obligation to certify Stage 2 Completion prior to the Date for Stage 2 Completion or
that Stage 2 Completion has occurred prior to the Date for Stage 2 Completion even if the
Stage 2 Completion Criteria have all been satisfied prior to the Date for Stage 2 Completion.
29.7 Late Stage 2 Completion

(a) (liquidated damages): If Stage 2 Completion is not achieved by the Date for Stage
2 Completion then thereafter until the earlier of:
(i) the date on which Stage 2 Completion occurs; and
(ii) the date on which this Agreement is terminated in accordance with its
terms,
Project Co will owe to the State by way of liquidated damages a daily amount of,
for each day of delay which falls within the period starting on the Date for Stage 2
Completion [not disclosed], or if Project Co has given the Project Director a notice
in accordance with paragraph (e), [not disclosed].
(b) (payment): The amount of liquidated damages pursuant to paragraph (a) will be:
(i) calculated by the Project Director for each relevant calendar month up to
Stage 2 Completion, based on the number of days in that calendar month;
(ii) will be notified to Project Co promptly after the end of that calendar
month in a notice of demand; and
(iii) upon provision of a written demand under paragraph (ii) the amount set
out in the demand immediately becomes Moneys Owing to the State
within 10 Business Days of the date of the demand.
(c) (genuine pre-estimate): Project Co acknowledges and agrees that:
(i) the amount of liquidated damages in paragraph (a):
A. have been agreed by the parties in good faith; and
B. are a genuine pre-estimate of the anticipated or actual

Liability the State and State Associates, will or may suffer if
Stage 2 Completion does not occur by the Date for Stage 2
Completion;
Legal\104938921.16 185
(ii) each party wishes to avoid the difficulties of proof of damages in
connection with a failure to achieve Stage 2 Completion by the Date for
Stage 2 Completion; and
(iii) liquidated damages payable in accordance with this Clause 29.7 are
reasonable and not intended as a penalty.
(d) (sole remedy): Subject to Clauses 2.2, 26.6 and Schedule 14 but without limiting
Clauses 33.1 or 53, the State acknowledges and agrees that the liquidated damages
payable by Project Co under this Clause 29.7 will be the sole and exclusive remedy
of the State and State Associates for delay, but nothing in this paragraph otherwise
affects, limits or reduces in any way the State's rights (including entitlement to
damages) with respect to an event giving rise to delay or the consequences of that
event (other than delay). The State will procure that no State Associate makes any
Claim against Project Co or any Project Co Associate in connection with any delay
beyond the limitations on remedies described in this Clause 29.7.
(e) (advance notice): Project Co may, at any time during the Design and Construction
Phase, but not less than 120 days before the Date for Stage 2 Completion, give the
Project Director a notice stating that Stage 2 Completion will not occur by the Date
for Stage 2 Completion. This notice must include:
(i) an explanation of why Project Co believes that Stage 2 Completion will

not occur by the Date for Stage 2 Completion (including the steps that
Project Co has taken and/or will take to minimise this delay); and
(ii) Project Co's reasonable prediction of the date on which Stage 2

Completion will occur.
(f) (Major Default): On the issue of the notice under paragraph (e) a Major Default
will be deemed to have occurred.
(g) (one notice): Only one notice may be issued by Project Co under paragraph (e).
30. [not disclosed]
31. Defects
(a) Project Co will rectify all Defects:
(i) whether or not the subject of a notice under this Clause 31; and
(ii) whether occurring:
A. before or after Stage 1 Final Completion or Stage 2

Completion; or
B. during the Operating Term.
(b) If the Project Director is of the opinion that there is a Defect, then the Project
Director may give a written notice to Project Co specifying the Defect, requiring
Project Co to rectify the Defect and specifying a reasonable time within which this
must occur.
Legal\104938921.16 186
(c) If a notice is given under paragraph (b) Project Co must rectify the Defect within
the time specified in the Project Director's notice.
(d) If the Defect is not rectified by Project Co within the time specified in the Project
Director's notice then the State shall be entitled to rectify the Defect itself or by way
of a third party and the cost of any such rectification work will be a debt due from
Project Co to the State.
(e) Neither the State's rights, nor Project Co's liability, whether under this Agreement
or otherwise at Law in respect of Defects will be affected or limited by:
(i) the rights conferred upon the State or Project Director by this Clause 31
or any other provision of this Agreement;
(ii) the failure by the State or the Project Director to exercise any such rights;
or
(iii) subject to any rights Project Co may have under Clause 41.16, any
Direction of the Project Director.
32. Time
32.1 Progress and Time for Completion
Project Co will:
(a) at all times diligently pursue the Stage 1 and Stage 2 Works;
(b) achieve each Construction Milestone by its Construction Milestone Date;
(c) achieve Stage 1 Technical Completion by the Date for Stage 1 Technical
Completion;
(d) achieve Stage 1 Final Completion by the Date for Stage 1 Final Completion;
(e) achieve Stage 2A Completion by the date for Stage 2A Completion; and
(f) achieve Stage 2 Completion by the Date for Stage 2 Completion.
The failure to achieve Stage 1 Technical Completion by the date for Stage 1 Technical
Completion or a Construction Milestone by the relevant Construction Milestone Date (other
than the Date for Stage 2A Completion, Date for Stage 1 Final Completion or the Date for
Stage 2 Completion) will not of itself be a Default for the purposes of Clause 51.1.
32.2 Monitoring Construction Milestones

(a) (Achieving Construction Milestone Dates): The Independent Reviewer will
certify at each Construction Milestone Date whether or not the relevant
Construction Milestone has been achieved.
(b) (On Substantial Completion): Project Co will be deemed to have achieved a

Construction Milestone, other than any Construction Milestone relating to Stage 1
Technical Completion or Completion, on Substantial Completion of that
Construction Milestone.
(c) (Certification by Independent Reviewer): If:
Legal\104938921.16 187
(i) construction of the Stage 1 Works ceases for more than 4 consecutive
weeks, Project Co must immediately upon the end of that period; or
(ii) Project Co fails, or is aware of a circumstance under which it would

reasonably expect to fail, to achieve a Construction Milestone by its
Construction Milestone Date Project Co must no later than the 5 Business
Days after the earlier of the date on which:
A. it fails to achieve; or
B. it becomes aware of the circumstances under which it would

reasonably expect to fail to achieve, a Construction Milestone
by its Construction Milestone Date,
produce a written report to the Project Director setting out the reasons for the
cessation, failure or expected failure to achieve the Construction Milestone by the
relevant Construction Milestone Date, the date by which the Construction Milestone
will be achieved and the impact, if any, of the delay in achieving Stage 1 Final
Completion by the Date for Stage 1 Final Completion or Stage 2 Completion by the
Date for Stage 2 Completion as the case may be; and
(iii) the Project Director (acting reasonably) at any time, where a review of
progress of the Works is reasonably required but if a report under
paragraph (c)(i) or (ii) has not been produced not more than once every 3
months:
A. may require the Independent Reviewer to review progress of

the Works to determine whether the status and progress of the
Works is likely to have a material adverse effect on the ability
of Project Co to achieve Stage 1 Final Completion by the
Date for Stage 1 Final Completion or the Stage 1 Facility
Sunset Date or Stage 2 Completion by the Date for Stage 2
Completion for the purposes of determining whether a Major
Default or Default Termination Event has occurred in
accordance with paragraph (d); and
B. will advise Project Co of any such request for a determination

by the Independent Reviewer.
(iv) Project Co will provide such assistance and further information as the
Independent Reviewer reasonably requires to make that determination.
(d) (Certifying defaults): If the Independent Reviewer, following a review under

paragraph (c), is of the view that:
(i) Stage 1 Final Completion will not be achieved by:
A. the Date for Stage 1 Final Completion; or
B. the Stage 1 Facility Sunset Date;
(ii) Stage 2 Completion will not be achieved by the Date for Stage 2
Completion,
it must issue a certificate to this effect. Any dispute in relation to a certificate issued
by the Independent Reviewer under this Clause 32.2(d) may be referred by either
party for resolution by an Independent Expert under Clause 56.
Legal\104938921.16 188
(e) (Stage 1 default): If the Independent Reviewer gives a certificate under
paragraph (d)(i) on a date that is 18 months or more after Financial Close:
(i) a Major Default shall be deemed to have occurred if the certification is a

failure to achieve Stage 1 Final Completion by the Date for Stage 1 Final
Completion; and
(ii) a Default Termination Event shall be deemed to have occurred if the

certification is a failure to achieve Stage 1 Final Completion by the Stage
1 Facility Sunset Date.
(f) (Stage 2 default): If the Independent Reviewer gives a certificate under

paragraph (d)(ii) on a date that is 6 months or more after Stage 1 Final Completion a
Major Default shall be deemed to have occurred.
(g) (Dispute): Any Dispute in relation to a certificate issued by the Independent

Reviewer under paragraph (e) may be referred by either party for resolution by an
Independent Expert under Clause 56.
32.3 Delays entitling Claim

If Project Co is, or is likely to be, delayed in the progress of the Works by an Extension Event
Project Co may claim an extension of time.
32.4 Claim
To claim an extension of time, Project Co:
(a) has 10 Business Days from the date Project Co became aware, or ought reasonably
to have become aware of a delay of the type referred to in Clause 32.3 caused by the
occurrence of an Extension Event, to submit a written claim to the Project Director
for an extension to the relevant Date for Completion which:
(i) gives detailed particulars of the delay or likely delay and the occurrence
causing the delay; and
(ii) states the number of days of extension of time claimed together with the
basis of calculating that period, including evidence that it will be delayed
in achieving Completion in the manner set out in Clause 32.5(c); and
(b) will, if the effects of the delay continue beyond the period of 10 Business Days
referred to in paragraph (a), and Project Co wishes to claim an extension of time in
respect of the further delay, submit a further written claim to the Project Director:
(i) every 10 Business Days after the first written claim (or as otherwise
agreed with the Project Director) until 5 Business Days after the end of
the effect of the delay; and
(ii) containing the information required by paragraph (a).
32.5 Conditions Precedent to Extension

Subject to Clause 32.7, it is a condition precedent to Project Co's entitlement to an extension of
time that:
(a) Project Co gives the written claim in the manner required by Clause 32.4;
(b) the cause of the delay was beyond the reasonable control of Project Co;
Legal\104938921.16 189
(c) Project Co has actually been delayed or is likely to be delayed in an activity or
activities on the critical path contained and shown on the then current Master Works
Program by an Extension Event;
(d) Project Co has not been given an instruction which complies with Clause 32.8 and
which applies to require acceleration to overcome the whole of the delay; and
(e) the Master Works Program and all other Sub-Programs relevant to any claim for an
extension of time comply with Clause 16 and the Programming Requirements at the
time of the Extension Event and where Project Co wishes to claim a further
extension of time under Clause 32.4(b) for the duration of the delay.
32.6 Extension of Time

(a) Subject to paragraph (b) and Clause 32.9, and if the conditions precedent in
Clause 32.5 have been satisfied, the Independent Reviewer will, pursuant to this
Clause 32.6, extend the relevant Date for Completion (and accordingly the relevant
Construction Milestone Dates and the Date for Stage 1 Technical Completion) by a
reasonable period determined by the Independent Reviewer.
(b) In determining any extension of time, the Independent Reviewer must take into
account all relevant evidence presented by the parties and shall not be bound by the
Master Works Program or any Sub-Programs.
(c) The Independent Reviewer will reduce any extension to any Date for Completion
that it would have otherwise notified to Project Co under paragraph (a) to the extent
that Project Co:
(i) contributed to the delay; or
(ii) failed to take all reasonable steps (without being required to accelerate
the Works) which a competent contractor in the circumstances would
have taken to both preclude the cause of the delay and to avoid or
minimise the consequences of the delay.
(d) Where the Date for Stage 1 Final Completion is extended for a Compensable
Extension Event, the Operating Term will be reduced by the lesser of:
(i) the same period of time as the extension for the Compensable Extension
Event; and
(ii) if the Date of Stage 1 Final Completion is achieved prior to the extended
Date for Stage 1 Final Completion, the period of time between the
unextended Date for Stage 1 Final Completion and the Date of Stage 1
Final Completion.
32.7 Unilateral Extensions

(a) Whether or not Project Co has made, or is entitled to make, a claim for an extension
of time under this Clause 32, the State may, in its absolute discretion at any time
and from time to time by written notice to Project Co, unilaterally extend any Date
for Completion, or the Term (but this discretion must not be exercised as an
alternative to the obligation of the Independent Reviewer to extend the relevant
Date for Completion under Clause 32.6).
Legal\104938921.16 190
(b) The parties acknowledge that:
(i) the State is not required to exercise the State's discretion under this
Clause 32.7 for the benefit of Project Co or at all; and
(ii) the exercise or failure to exercise the State's discretion under this
Clause 32.7 is not capable of being the subject of a dispute or difference
or otherwise subject to review.
32.8 Acceleration Notice

(a) Whether or not Project Co makes a claim under Clause 32.3, if the Works are
delayed, the Project Director may direct Project Co to give the Project Director a
notice setting out the estimated time and cost consequences of accelerating the
Works.
(b) If the Project Director issues such a Direction, Project Co must, within 10 Business
Days of the issue of such a Direction, provide to the Project Director a notice of the
estimated time and cost consequences of the acceleration including any details of
any changes required to the Master Works Program and relevant Sub-Programs to
reflect the effects of the delay and the acceleration of the Works.
32.9 Instruction to Accelerate

The Project Director may instruct, if Project Co would, but for the instruction, have been
entitled to an extension of time to any Date for Completion for the cause of delay, provided an
acceleration of the Works is reasonably achievable in the circumstances Project Co, in writing,
to accelerate the Works by taking those measures identified in Project Co's acceleration notice
(where applicable) or otherwise agreed between the parties.
32.10 Partial Acceleration

If the Project Director gives Project Co an instruction to accelerate under Clause 32.9 and it
only applies to part of the delay, any entitlement to an extension of time Project Co would
have had but for the acceleration will only be reduced to the extent to which the instruction to
accelerate requires Project Co to accelerate to overcome the delay.
32.11 Acceleration
If the Project Director gives an instruction to Project Co under Clause 32.9:
(a) Project Co will accelerate the Works to overcome or minimise the extent and effect
of some or all of the delay as instructed including, if required, in order to achieve
Completion by the Date for Completion;
(b) the State will pay Project Co the extra costs reasonably incurred by Project Co and
directly attributable to accelerating the Works (net of any delay costs saving as a
result of the acceleration) in accordance with Clause 32.14, calculated in
accordance with the Change Compensation Principles; and
(c) subject to this Clause 32.11, Project Co will not be entitled to make any Claim
against the State arising out of, or in any way in connection with, the instruction or
acceleration other than for the amount which is payable by the State under
paragraph (b).
Legal\104938921.16 191
32.12 Contractor's Obligation Not Affected
Project Co's obligations and liabilities under this Agreement, including under Clauses 32.1 and
the State's rights, obligations and liabilities under this Agreement are not affected by the
Project Director giving Project Co an instruction to accelerate under Clause 32.9.
32.13 Delay Costs

(a) (Limitation on entitlement): Notwithstanding any extension of time granted or
allowed under this Clause 32, Project Co will not be entitled to recover or make any
Claim upon the State for any costs, expenses, loss or damage suffered, sustained or
incurred by Project Co (or any person claiming through Project Co) by reason of
any delay, disruption or disturbance to the progress of the Works, including by
reason of the occurrence of an Extension Event, other than in accordance with this
Clause 32.13.
(b) (Permitted delay costs): Subject to paragraph (g) to the extent that delay is caused
by a Compensable Extension Event (other than a State Modification or a Project-
Specific Change in Law) for which Project Co is granted an extension of time under
Clause 32.6 or 32.7, Project Co is entitled to payment of:
(i) the Financing Delay Costs calculated at the daily rate for each of the
Stages of the Works as set out in Schedule 14 for each day from the
Original Date for Completion until the earlier of:
A. the expiry of the number of days delay caused by the relevant

Compensable Extension Event; and
B. the Date of Stage 1 Final Completion or the Date of Stage 2

Completion (as the case may be); and
(ii) the Prolongation Costs actually and reasonably incurred by Project Co or

that will be incurred by Project Co directly attributable to the delay for
each calendar day for which Project Co is granted an extension in respect
of the Compensable Extension Event up to the maximum daily rate for
each of the stages of the Works as set out in Schedule 14,
calculated in respect of the amounts referred to in paragraph (b)(ii) in accordance

with the Change Compensation Principles and included in a Change Notice and
commencing to be calculated from:
(iii) in respect of the amounts referred to in paragraph (b)(i), the Original Date
for Completion; and
(iv) in respect of the amounts referred to in paragraph (b)(ii), the date on

which such delay commenced.
(c) (Condition precedent): It is a condition precedent to Project Co's entitlement to

payment under paragraph (b) that Project Co gives a Change Notice under
paragraph (b) as soon as practicable and in any event within 10 Business Days after
the commencement of the delay with such notice to be updated every 10 Business
Days until 10 Business Days after the end of the effect of the delay setting out the
details required by paragraph (b). For the avoidance of doubt, where a delay extends
beyond 20 calendar days such that the maximum daily rate for Prolongation Costs
applicable under Section 2.1 of Schedule 14 increases, and the Prolongation Costs
actually and reasonably incurred during that 20 calendar day period exceeded the
then applicable lower maximum daily rate under Section 2.1 of Schedule 14, Project
Legal\104938921.16 192
Co may update the Change Notice to reflect any such additional Prolongation Costs
(subject always to the applicable maximum daily rate under Schedule 14).
(d) (State Modifications): To the extent that delay is caused by a Compensable

Extension Event which constitutes a State Modification for which Project Co is
granted an extension of time under Clauses 32.6 or 32.7, Project Co is entitled to
payment of such amount as is agreed or determined under Clause 41, so long as any
Financing Delay Costs or Prolongation Costs determined under Clause 41 shall not
exceed the maximum daily rates under paragraph (b).
(e) (Project Specific Changes): To the extent that delay is caused by a Compensable
Extension Event which is a Project-Specific Change in Law or Change in Policy for
which Project Co is granted an extension of time under Clause 32.6 or 32.7, Project
Co is entitled to payment of such amount as is agreed or determined under
Clause 43 so long as any Financing Delay Costs or Prolongation Costs determined
under Clause 43 shall not exceed the maximum daily rates under paragraph (b).
(f) (Concurrent Delay): Notwithstanding paragraphs (b), (d) and (e), where there are
several causes of a delay and at least one of those causes is not an Extension Event
then to the extent that the delays resulting from those causes are concurrent, the
Independent Reviewer will apportion the delays according to the various causes of
the delay on the basis of their respective contribution to the delay in achieving
Completion.
(g) (Stage 2A): Project Co shall not be entitled to the payment of the costs referred to
in paragraph (b) or otherwise for an extension of time granted to the Date for
Stage 2A Completion and where there is no corresponding extension to any other
Date for Completion.
32.14 Payment of Daily Delay Costs and Acceleration Costs

(a) Subject to paragraphs (b) and (e):
(i) the State will pay to Project Co all amounts payable in accordance with
Clauses 32.11 and 32.13(b)(ii) within 1 month after the date of the receipt
from Project Co of a Change Notice calculating the amounts payable by
the State in accordance with the Change Compensation Principles; and
(ii) the State will pay to Project Co all amounts payable in accordance with
Clause 32.13(b)(i) and with Schedule 14.
(b) If the State disputes a Change Notice under paragraph (a) it will pay the undisputed
amount of the Change Notice in accordance with paragraph (a) but will, within the
Review Period, notify Project Co of the matters in dispute and the adjustment it
requires.
(c) If, within 10 Business Days of receipt of the notice of dispute from the State,
Project Co has not notified the State that it agrees with the adjustments the State
seeks to the Change Notice amount, the matter will be resolved in accordance with
the Accelerated Dispute Resolution Procedures.
(d) Subject to Clause 56(o), the State will pay the disputed amount as agreed or
determined by the Independent Expert under the Accelerated Dispute Resolution
Procedures within 1 month after the agreement or determination is made.
(e) The State may in its absolute discretion, elect not to pay the costs described in
Clauses 32.11 and 32.13(b) in the manner described in paragraph (a), but instead to
Legal\104938921.16 193
require Project Co to fund those costs from amounts available for drawdown under
the Standby Facility, or the Finance Documents and if that funding is so procured,
the State will pay those costs through increases in the Service Payments in
32.15 Extension of Stage 1 Facility Sunset Date

The Stage 1 Facility Sunset Date will be extended by the same number of days by which the
Stage 1 Date for Final Completion is extended because of a Compensable Extension Event
under this Clause 32. Project Co shall not be entitled to an extension of time to the Stage 1
Facility Sunset Date for a Force Majeure Event.
32.16 No Extension past Stage 1 Facility Sunset Date

In no circumstances will Project Co be entitled (unless the State grants an extension in its
absolute discretion and without having any obligation to do so) to an extension of the Date for
Stage 1 Final Completion past the Stage 1 Facility Sunset Date.
32.17 Share of Savings

If Project Co achieves Stage 2 Completion earlier than the Date for Stage 2 Completion then:
(a) within 10 Business Days after the Date of Stage 2 Completion Project Co shall
provide the State with a report setting out:
(i) the number of working days by which Stage 2 Completion was achieved
earlier than the Date for Stage 2 Completion ("No. of Days Early");
(ii) the number of working days granted as an extension of time under Clause
32.6 for a Compensable Extension Event, or otherwise under Clause 32.7
during the Design and Construction Phase ("No. of EOT Days"); and
(iii) the aggregate amount of the preliminaries and supervision component of

any Prolongation Costs paid to Project Co under Clause 32.13(b)(ii) for
the No. of EOT Days, divided by the No. of EOT Days ("Daily Average
P&S"),
(b) Project Co shall pay to the State as Moneys Owing an amount calculated as follows:
(Daily Average P&S) x (No. of Days Early to a maximum of the No. of EOT Days) x
50%.
Legal\104938921.16 194
PART 3 OPERATION AND MAINTENANCE OF FACILITY
33. Obligations
33.1 Timing
Without limiting any of its obligations in respect of the Transitional Services, Project Co will
provide the Services in respect of:
(a) the Stage 1 Facility from the Operational Commencement Date; and
(b) the Stage 2 Facility from the Date of Stage 2 Completion.
33.2 Services
Project Co will, except as otherwise expressly provided under this Agreement:
(a) (Specifications and Standards): notwithstanding any other obligation of Project

Co, provide the Services, and procure that the Services are provided in accordance
with the Services Specifications;
(b) (plans and manuals): without limiting its obligations under paragraph (a), comply
with its obligations under and in relation to the Asset Management Plan, the
Monthly Maintenance Schedules and the Policy and Procedures Manual;
(c) (Fit for Intended Purposes): repair and maintain the Facility so that at all times the
Facility remains Fit for the Intended Purposes to the extent it imposes more
stringent or additional standards than those imposed under paragraphs (a) and (b);
(d) (Best Practices): provide the Services, and procure that all Services are provided, in
accordance with Best Operational Practices and, where applicable Best
Construction Practices to the extent they impose more stringent or additional
standards than those imposed under paragraphs (a) to (c);
(e) (Quality Standards): unless otherwise provided for in the Services Specifications
ensure that at all times throughout the Operating Term the Quality Standards are
complied with;
(f) (Health Policy): provide the Services, and procure that all Services are provided,
consistently with Health Policies applicable to the Facility;
(g) (Other Service obligations): comply with all other of its obligations under the
(h) (Refurbishment Works): carry out repairs and Refurbishment Works using
materials, fittings, finishes, equipment and other items that:
(i) have the same or higher levels of quality as that which would be used in
accordance with Best Operational Practice;
(ii) have a design life equal to or greater than the items being repaired or
replaced; and
(iii) do not materially increase operating or maintenance costs to the Hospital

Operator, the cost of any Reviewable Services or any other costs payable
by the State (in relation to Equipment, where alternative Equipment on
Legal\104938921.16 195
comparable terms is readily available and would not have had such an
effect).
33.3 Performance Monitoring

Project Co will:
(a) (monitor performance): monitor the performance of the Services in accordance

with the Quality Assurance System, the Performance Monitoring Program and the
Services Specifications, so as to ensure that it complies with its obligations under
this Agreement;
(b) (notify): notify the Contract Administrator promptly if it identifies any risk to its
ability to continuously provide the Services to at least the Services Specifications
and the action which Project Co intends to take or is taking to avoid that risk; and
(c) (reporting): meet all of its reporting requirements in respect of the Services and the
Minor Works as set out in this Agreement including the creation and provision of
Monthly Performance Report and Quarterly Performance Report in accordance with
Clause 33.5.
33.4 Project Co Warranty

Project Co warrants that, at all times during the Operating Term, it has or will have available to
it the resources, expertise and experience necessary to maintain the Facility and provide the
Services, and procure that all Services are provided, in accordance with Clause 33.1.
33.5 Reports during Operating Term

Project Co will:
(a) on each Lodgement Date during the Operating Term, provide the Monthly
Performance Report to the Contract Administrator; and
(b) within 10 Business Days after the end of each Quarter during the Operating Term,
provide the Quarterly Performance Report to the Contract Administrator,
each in accordance with, and containing the information required by, the Services
Specifications.
33.6 Asset Management Plan, Five Year Work Plan and Annual Works Plan
(a) (Plans): From the Operational Commencement Date, Project Co shall implement
the Asset Management Plan, Five Year Work Plan and Annual Works Plan in
accordance with the Services Specifications and otherwise in accordance with this
Agreement.
(b) (updates): Project Co shall, in accordance with the Services Specifications:
(i) review and update the Asset Management Plan and Five Year Work Plan;
and
(ii) annually submit those updated plans together with the Annual Works
Plan for the ensuing Operating Year for endorsement by the Contract
Administrator in accordance with the Review Procedures three months
prior to the end of each Operating Year.
Legal\104938921.16 196
(c) (deferral): In reviewing and updating the Asset Management Plan and Five Year
Work Plan and developing the Annual Works Plan, Project Co may, subject to
paragraphs (e) and (g), defer Refurbishment Works scheduled in previously
approved plans where those works are not required to:
(i) meet the Services Specifications;
(ii) ensure the Facility is Fit for the Intended Purposes; or
(iii) comply with all relevant Law, Authorisations, Health Policies and
Quality Standards.
(d) (accelerate): In reviewing and updating the Asset Management Plan and Five Year
Work Plan and developing the Annual Works Plan, Project Co shall bring forward
the timing of Refurbishment Works scheduled in previously approved plans where
and to the extent necessary to:
(i) meet the Services Specifications;
(ii) ensure the Facility is Fit for the Intended Purposes; or
(iii) comply with all relevant Law, Authorisations, Health Policies and
Quality Standards.
(e) (approval): Each time Project Co reviews and updates the Asset Management Plan
and Five Year Work Plan and develops the Annual Works Plan in accordance with
paragraph (b)(ii), Project Co shall not be entitled to:
(i) defer any Refurbishment Works scheduled in the previously approved

plans by a period of more than one year; or
(ii) subject to paragraph (f), request the deferral of any Refurbishment Works
prior to the Operating Year which immediately precedes the Operating
Year in which the Refurbishment Works were scheduled to commence,
without the approval of the Contract Administrator, which approval may be

withheld in his absolute discretion.
(f) (automatic): The deferral or advancement of any Refurbishment Works in

accordance with paragraph (c) or (d) will automatically defer or advance, by the
same period, any scheduling of the same works to be conducted on later occasions
during the Operating Term.
(g) (refuse endorsement): The Contract Administrator may refuse to endorse the
revised Asset Management Plan, Five Year Work Plan and the Annual Works Plan:
(i) in accordance with the Review Procedures;
(ii) where the Contract Administrator is of the view, acting reasonably, that
such plans will not enable Project Co to:
A. meet the Services Specifications;
B. ensure the Facility is Fit for the Intended Purposes; or
C. comply with all relevant Law, Authorisations, Health Policies

and Quality Standards;
Legal\104938921.16 197
(iii) in the circumstances noted in paragraph (e); or
(iv) if approved, it would result in the Refurbishment Works having been

deferred from the Operating Year when the works were initially
scheduled to be undertaken by a period (measured in Operating Years)
equal to or greater than:
0.3 x P
where P means:
A. for Refurbishment Works that are being undertaken for the

first time during the Operating Term - the Operating Year
(expressed as a number from 1 to 25) in which those works
were initially scheduled to be undertaken; or
B. for Refurbishment Works that are scheduled to be undertaken

on two or more occasions during the Operating Term, and
which are not being undertaken for the first time, the number
of Operating Years between the Operating Year in which the
works were initially scheduled to be undertaken (adjusted in
accordance with paragraph (f)) and the Operating Year in
which those works were previously undertaken.
(h) (obligation): Project Co must undertake Refurbishment Works in accordance with

the revised endorsed Asset Management Plan, Five Year Work Plan and Annual
Works Plan.
Example – Assume replacement of carpets is scheduled in the original Asset Management

Plan for Operating Years 7, 14 and 21 of the Operating Term. When reviewing the Asset
Management Plan and Five Year Work Plan and developing the Annual Work Plan at the end
of Year 6 (but not earlier unless agreed to by the Contract Administrator - cl
33.6(b)(ii)33.6(e)(ii)), Project Co may request that the replacement of the carpets scheduled
for Operating Year 7 is deferred by one year, to Year 8 (but not longer, unless the Contract
Administrator agrees – cl 33.6(e)(i) ). The Contract Administrator will approve the request
unless not satisfied that the carpet will continue to meet the tests in cl. 33.6(g)). The approval
will automatically push out by one year the carpet replacement scheduled for years 14 and 21
(cl. 33.6(f))
Project Co may continue to request the deferral of the carpet replacement in each subsequent
year (ie. years 7, 8, 9, 10 etc) in accordance with clauses 33.6(f) provided the tests in cl
33.6(g)are likely to continue to be met. Despite this, when the Asset Management Plan, Five
Year Work Plan and Annual Work Plan is reviewed at the end of Year 9, the Contract
Administrator may insist that the works are undertaken in year 10, since the deferral (3 years)
will have exceeded the test in 33.6(g)(iv)Aie 0.3 x 7 = 2.1.
33.7 Monthly Maintenance Schedules

(a) Project Co shall prepare, submit for endorsement and implement the Monthly
Maintenance Schedule in accordance with the Services Specifications.
(b) Project Co must comply with the endorsed Monthly Maintenance Schedule.
33.8 Facility Management Committee

(a) (Constitution): The State and Project Co will, at least 10 Business Days before the
Date for Stage 1 Final Completion, form a Facility Management Committee.
Legal\104938921.16 198
(b) (Membership): The Facility Management Committee will comprise:
(i) representatives of Project Co (consisting of at least the Project Co

Representative and a representative of each Facility Management
Subcontractor), and all such representatives must be members of senior
management of Project Co or the relevant Subcontractors with a sound
knowledge of the Project; and
(ii) representatives of the State consisting of at least the Contract

Administrator and a representative of the Hospital Operator.
(c) (Chair): The Contract Administrator will chair the Facility Management
Committee.
(d) (Not to Affect): The exercise or the omission to exercise by the State of its rights
and obligations in relation to the Facility Management Committee will not:
(i) constitute an Intervening Event;
(ii) lessen or otherwise affect Project Co's obligations and the State's rights,
whether under this Agreement or at Law;
(iii) to the extent permitted by Law, entitle Project Co to any Claim against
the State; or
(iv) be construed as a direction by the State to do or not do anything.
(e) (Advisory only): The parties acknowledge that the Facilities Management
Committee is consultative and advisory only and decisions of the Facilities
Management Committee do not affect the rights or obligations of either the State or
Project Co under any Project Documents.
(f) (Functions): The State and Project Co will ensure that the Facility Management
Committee meets regularly (and in any event at least monthly and no later than 5
Business Days after the State has received the Monthly Performance Report) to
discuss and consider the Project including:
(i) any matters relating to the Facility or the provision of Services, including
all of the matters referred to in the Services Specifications;
(ii) any matters arising out of the Monthly Performance Reports;
(iii) any matters arising out of the implementation of the Communications

Approach or other public relations issues;
(iv) issues arising out of or relating to the Minor Works; and
(v) any other matters arising between the State and Project Co in relation to
the Project during the Operating Term before they are referred to the
Dispute Resolution Procedures or the Accelerated Dispute Resolution
Procedures as required under Clause 55.1.
(g) (Advisors and Consultants): Members of the Facility Management Committee

may at their own cost have advisers and consultants at the meetings from time to
time as required, subject to giving at least 2 Business Days prior notice to the other
members of the Facility Management Committee of any such attendance.
Legal\104938921.16 199
(h) (Meetings): Meetings of the Facility Management Committee will be conducted
according to such procedures as the members from time to time agree, but at least
one representative of each of the State and Project Co will constitute a quorum.
(i) (Minutes): Project Co will:
(i) prepare detailed minutes in respect of each meeting of the Facility

Management Committee, which include:
B. details of the matters discussed at the meeting; and
C. the outcomes agreed by the Facility Management Committee

at the meeting; and
(ii) provide a copy of the minutes of meeting to the Contract Administrator.
(j) (Further Information): The Contract Administrator may require Project Co to

provide further information on matters discussed at the Facility Management
Committee, and Project Co must provide that information in a timely manner.
33.9 Coordination of Services with Hospital Functions

(a) (No limitation): except as expressly provided to the contrary in this Agreement, the
use and occupation of the Facility by the State and the Hospital Operator and the
carrying out of the Hospital Functions as contemplated under this Agreement will
not limit or affect Project Co's rights and obligations to provide the Services to the
(b) (Project Co warranties and obligations): Project Co:
(i) warrants that it has made a full allowance in its Service Payments to
ensure the coordination of the provision of the Services with:
A. the possession, occupation and use of the Facility by the State

and the Hospital Operator and Hospital Users as contemplated
by this Agreement; and
B. the carrying out of the Hospital Functions;
(ii) warrants that it has made full allowance in its Service Payments for the
provision of:
A. the Transitional Services; and
B. the Services at the Facility during the Stage 2 Works;
(iii) must:
A. perform the Services, and procure that all Services that are
performed by Subcontractors are performed, to the Services
Specifications so as to minimise disruption to the normal
functioning of the Facility and the Hospital Functions; and
B. take any steps which are necessary or otherwise reasonably

required by the Contract Administrator to minimise disruption
Legal\104938921.16 200
or inconvenience to the State, the Hospital Operator, the
Hospital Users and to the Hospital Functions; and
(iv) will not, unless otherwise expressly permitted in this Agreement:
A. be relieved of its obligations under this Agreement, including

to perform the Services to the Services Specifications by; or
B. be entitled to make any Claim against the State in respect of,
any fact, matter or thing arising out of or in connection with the use and
occupation of the Facility by the State, the Hospital Operator and the
Hospital Users or the carrying out of the Hospital Functions as
contemplated by this Agreement.
33.10 Communications Approach

Project Co must during the Operating Term:
(a) to the extent that it relates to the Services, continue to implement in conjunction
with the State the Communications Approach;
(b) attend meetings of and provide assistance to the Communications Working Group
as required by the State in respect of issues arising out of or relating to the Services;
and
(c) otherwise assist the State in respect of the Communications Approach and any
communications issues as they arise as required by the State.
33.11 Unscheduled Building Management Services

(a) (General Obligation): To ensure that it complies with its obligations to provide the
Services in accordance with Clause 33.1, it may be necessary for Project Co to
provide Building Management Services which have not been planned in the Asset
Management Plan or scheduled in the Monthly Maintenance Schedules. Project Co
must carry out such unscheduled Building Management Services in accordance with
this Clause 33.11 and the Services Specifications.
(b) (Liaising): Project Co will promptly alert the Hospital Operator as to unscheduled
repairs or rectification works required and must liaise with the Hospital Operator, in
accordance with the Services Specifications, to co-ordinate the time at which and
the manner in which unscheduled repairs or rectification works notified by Project
Co, or advised by the Hospital Operator as requiring attention, will be performed
and whether they will be scheduled into the Monthly Maintenance Schedule or
undertaken at other times.
(c) (Information on Unscheduled Repairs): Project Co will advise the Contract

Administrator through the Monthly Performance Reports of all unscheduled
Building Management Services that have been undertaken in that month.
(d) (No additional payments): Project Co will not be entitled to any additional
payment from the State for unscheduled Building Management Services, except as
otherwise expressly provided by the terms of this Agreement.
Legal\104938921.16 201
33.12 Final Refurbishment Works
From the Condition Review Date, Project Co will be responsible to undertake the Final
Refurbishment Works (if any) in accordance with Clause 54.
34. Equipment during Operating Term

34.1 Title and Responsibility for Risk
(a) (Title): The State shall own all Equipment during the Operating Term.
(b) (Transfer of title): Project Co will transfer title to such Equipment as is procured
by Project Co, to the State:
(i) from Stage 1 Final Completion, in respect of the Equipment for the Stage
1 Facility; and
(ii) from Stage 2 Completion in respect of the Equipment for the Stage 2
Facility.
(c) (Risk): Subject to the terms of this Agreement:
(i) Project Co shall take the risk of performance and loss of or damage to all
Included Equipment for the whole of the Operating Term; and
(ii) the State shall take the risk of performance and loss of or damage to all
Excluded Equipment after the Operational Commencement Date.
(d) (Transfer of Risk): Project Co agrees to do all things reasonably requested by the
State that are necessary or desirable to give full effect to the transfer of risk in
respect of the Excluded Equipment to the State including transferring to the State
the benefit of all manufacturers warranties and all guidance material relevant to the
Excluded Equipment produced by the manufacturer upon Stage 1 Final Completion
and Stage 2 Completion (as applicable).
34.2 Maintenance and Replacement

(a) Project Co shall maintain, replace and repair all Included Equipment until the end of
the Operating Term in accordance with the Asset Management Plan and Services
Specifications.
(b) Where Project Co is required to replace Included Equipment, it shall do so using

Equipment that:
(i) subject to paragraph (c), has the same standard relative to the market for
that Equipment at the time of replacement as the replaced Equipment had
relative to the market at the time that Equipment was purchased;
(ii) subject to paragraph (c),has the same or higher levels of quality and are
as technically up to date as that which would be used in accordance with
Best Operational Practice;
(iii) has a design life equal to or greater than the items of Equipment being
replaced; and
(iv) does not materially increase operating or maintenance costs to the

Hospital Operator, the cost of any Reviewable Services or any other costs
Legal\104938921.16 202
payable by the State (in relation to Equipment where alternative
Equipment on comparable terms is readily available and would not have
had such an effect).
(c) Where a new item of Equipment has a capital cost within 10% of the Indexed cost
of the item of Equipment it is replacing, it shall be deemed to satisfy the
requirements of subparagraph (b)(i) and (ii) above.
(d) Project Co shall replace the Included Equipment in accordance with the procedure
set out in Clauses 20.4 to 20.5 of this Agreement.
(e) Excluded Equipment will be maintained, replaced and repaired by the State after the
later of the Date of Stage 1 Technical Completion and the certification for
operational use of the relevant Excluded Equipment by the Independent Reviewer,
until the end of the Operating Term save that Project Co will be required to manage
the replacement of the Excluded Equipment except for the MCRI Equipment.
35. Minor Works

35.1 Project Co's Acknowledgements and Warranties
(a) Project Co will procure that the Facility Management Subcontractor carries out the
Minor Works requested by the Hospital Operator to be carried out by Project Co
during the Operating Term in accordance with the process set out in Clause 35.2.
(b) Project Co acknowledges and agrees that the performance of Minor Works will not
in any way derogate from, limit or otherwise affect:
(i) Project Co's obligations or Liabilities under this Agreement, including the
obligation to ensure that the Facility is Fit for the Intended Purposes;
(ii) the provision of the Services in accordance with the Services

Specifications; or
(iii) the carrying out of the Hospital Functions.
(c) The Hospital Operator is not obliged to have Minor Works carried out by Project
Co and may (entirely at its discretion) have such Minor Works carried out by a third
party.
35.2 Process for performance of Minor Works

(a) (Notification of proposed Minor Works): The Hospital Operator's Representative
may at any time notify the Facility Management Subcontractor of any Minor Works
required to be performed by way of a notice entitled "Minor Works Notice".
(b) (Response by Minor Works Quote): Within 48 hours of receipt by the Facility
Management Subcontractor of a notice in accordance with paragraph (a), Project Co
must procure that the Facility Management Subcontractor prepares and submits for
the approval of the Hospital Operator's Representative a statement entitled "Minor
Works Quote" which sets out:
(i) the Minor Works Price calculated on an open book basis (with the
breakdown of goods, services, labour, equipment, materials, subcontract
costs and any recurring costs clearly set out and available for review by
the Hospital Operator, and so as to permit the Hospital Operator to be
able to make an assessment of the actual Minor Works Costs);
Legal\104938921.16 203
(ii) an estimate of the time to complete the proposed Minor Works;
(iii) details of any Subcontractors proposed to be engaged to implement the

Minor Works;
(iv) details of the impact, if any, of the Minor Works on the Design
Requirements, any of the Services to be performed by Project Co and any
of the Hospital Functions and on Project Co's ability to comply with this
Agreement; and
(v) any other particulars as the Hospital Operator may reasonably require.
(c) (Hospital Operator's Approval): The State will procure that the Hospital
Operator's Representative advises the Facility Management Subcontractor in
writing and within a reasonable time of receiving a Minor Works Quote which
complies with the requirements of paragraph (b) whether the Minor Works Quote is
approved.
(d) (Hospital Operator not satisfied): If, under paragraph (c), the Hospital Operator's
Representative notifies the Facility Management Subcontractor that the Hospital
Operator does not approve the Minor Works Quote, then the Hospital Operator
may:
(i) elect not to proceed with the proposed Minor Works;
(ii) proceed to implement the works itself through subcontractors chosen by

the State or by engaging a third party to carry out the required works, in
which case the works will not be Minor Works for the purposes of this
Clause 35 or any other provision of this Agreement; or
(iii) take such other course of action it considers necessary in the

circumstances.
(e) (Not to commence before approval): Project Co warrants that the Facility
Management Subcontractor will not begin work, and warrants that there shall be no
entitlement on either Project Co or the Facility Management Subcontractor to make
any Claim against the State or the Hospital Operator in respect of any proposed
Minor Works until such time as a Minor Works Quote has been approved in
accordance with paragraph (c).
(f) (Implementation of Minor Works): Project Co warrants that the Minor Works
will be:
(i) undertaken as soon as is reasonably practicable after approval is given

under paragraph (c); and
(ii) diligently pursued and completed in accordance with the Minor Works
Notice and the reasonable directions of the Hospital Operator's
Representative and using Best Operational Practices and (if applicable)
Best Construction Practices,
and so that at all times the Facility remains Fit for the Intended Purposes.
35.3 No duty to Review

Notwithstanding Clause 35.2, the approval or failure to approve a Minor Works Quote will
not:
Legal\104938921.16 204
(a) except to the extent otherwise specifically provided under this Agreement, relieve
Project Co from, or alter or affect the obligations and liabilities of Project Co; or
(b) prejudice the State's rights against Project Co,
whether under this Agreement or at Law, nor entitle Project Co to make any Claim against the
State in respect of any such matter.
35.4 Notice of Minor Works

If in Project Co's or the Facility Management Subcontractor's opinion, any Direction given by
the Hospital Operator's Representative or the Contract Administrator other than any such
Direction given in a Minor Works Notice constitutes or involves Minor Works, Project Co
must procure that the Facility Management Subcontractor provides written notice to this effect
to the Hospital Operator's Representative within 48 hours of receipt of the Direction.
If the Hospital Operator's Representative agrees that the Direction constitutes and involves
Minor Works then the Hospital Operator's Representative shall serve a Minor Works Notice
and the process for performance of the Minor Works shall proceed in accordance with
Clause 35.2.
35.5 Variations to the approved Minor Works Costs

(a) Unless otherwise agreed with the Hospital Operator at the time it receives the Minor
Works Quote, the Minor Works Price shall be a fixed lump sum. Project Co shall
perform or shall procure that the Facility Management Subcontractor performs the
Minor Works for the Minor Works Price and Project Co shall not be entitled to any
additional payment in respect of the Minor Works.
(b) Where the Hospital Operator has agreed in accordance with paragraph (a) that the
Minor Works Price is not a fixed lump sum price, and where the actual Minor
Works Costs incurred in respect of Minor Works implemented in accordance with
Clause 35.2(f) are likely to exceed the Minor Works Price approved in accordance
with Clause 35.2(c):
(i) Project Co must procure that the Facility Management Subcontractor,

prior to exceeding the approved Minor Works Price, advises the Hospital
Operator's Representative directly that the approved Minor Works Price
is likely to be exceeded and the amount of such excess;
(ii) the State will procure that the Hospital Operator's Representative advises
the Facility Management Subcontractor within 48 hours of receiving the
information required to be provided under paragraph (a), whether the
Hospital Operator approves the additional Minor Works Cost and the
Facility Management Subcontractor shall not proceed with the additional
Minor Works until such time as such approval is received; and
(iii) if the Hospital Operator does not approve the additional Minor Works
Cost, the Hospital Operator's Representative may direct the Facility
Management Subcontractor to immediately discontinue the Minor Works
and shall (if applicable) pay the Facility Management Subcontractor the
Minor Works Cost for the Minor Works undertaken by the Facility
Management Subcontractor, and any reinstatement costs reasonably
incurred, up to the date of any such direction up to the amount of the
Minor Works Price.
Legal\104938921.16 205
35.6 Completion
Project Co must procure that the Facility Management Subcontractor gives notice to the
Hospital Operator upon completion of the Minor Works implemented in accordance with
Clause 35.2(f).
35.7 General Reporting Obligations

As part of the Monthly Performance Report, Project Co must report on:
(a) the Minor Works Costs expended since the last anniversary of the Operational
Commencement Date to the date of that meeting; and
(b) any further Minor Works Costs which have been approved pursuant to
Clause 35.2(c).
35.8 Payment for Minor Works

(a) Project Co shall not be entitled to any additional payment for any Minor Works
procured in accordance with this Clause 35.
(b) The Facility Management Subcontractor shall only be entitled to payment for Minor
Works procured in accordance with this Clause 35 where on each anniversary of the
Operational Commencement Date the Minor Works Costs exceed the Minor Works
Limit for that year. Where this occurs the State shall procure that the Hospital
Operator will pay the amount by which the Minor Works Cost exceeds the Minor
Works Limit directly to the Facility Management Subcontractor within 20 Business
Days of receipt of an invoice from the Facility Management Subcontractor after the
end of the relevant year for the Minor Works Costs that exceed the Minor Works
Limit.
(c) To the extent the Minor Works Limit is not fully expended in any one relevant year,
the excess shall be carried over to the following year and the amount of the Minor
Works Limit for that following year shall be increased by the amount of any such
excess.
(d) If one month prior to the end of the Term the then current Minor Works Limit has
not been fully expended, the amount of any difference between the Minor Works
Cost and the Minor Works Limit will be paid to the State by Project Co as a lump
sum at the time of presentation of the last Invoice prior to the end of the Term in
accordance with Clause 40.3. The State shall procure that any Minor Works
undertaken during the final month prior to the end of the Term will be paid for by
the Hospital Operator within 20 Business Days of receipt of an invoice from the
Facility Management Subcontractor.
35.9 Subcontract provisions

Project Co must ensure that any Facility Management Subcontract in respect of Minor Works
contains:
(a) provisions (including acknowledgements, agreements and warranties) to give effect

to the regime set out in Clause 35.2 and 35.4; and
(b) acknowledgements by the Facility Management Subcontractor that:
Legal\104938921.16 206
(i) it will not be entitled to make any claim in respect of the Minor Works
unless it strictly complies with the notice provisions set out in this
Clause 35;
(ii) it will not be entitled to any payment for Minor Works Cost it incurs save
to the extent that the Minor Works Cost exceeds the Minor Works Limit;
and
(iii) it will not be entitled to payment of any on-site or off-site overhead,

administration or corporate or other like costs or profit in respect of the
Minor Works.
35.10 Disputes
(a) If any dispute arises in relation to the Minor Works, (including with respect to
matters included in a Minor Works Notice, whether or not works constitute Minor
Works and payment for Minor Works) it shall be referred by either party to the
Contract Administrator, Hospital Operator, Facility Management Subcontractor and
Project Co's Representative who shall meet to attempt to resolve the dispute.
(b) If the dispute is not resolved within 5 Business Days of the reference of the dispute
referred to in paragraph (a) then the dispute may be referred by either party for
resolution in accordance with the Accelerated Dispute Resolution Procedure.
(c) Where the dispute referred to the Accelerated Dispute Resolution Procedures in
accordance with paragraph (a) involves either the Facility Management
Subcontractor or the Hospital Operator (or both of them), Project Co shall manage
the conduct of the dispute on behalf of the Facility Management Subcontractor and
the State shall manage the conduct of the dispute on behalf of the Hospital
Operator.
36. Carparking
36.1 Carparking operations
(a) (Project Co's obligations): On and from the Operational Commencement Date,
Project Co must operate the Carpark and provide Carparking Services at the Facility
and the Carpark in accordance with, and to the standards set out in the Services
Specifications ("Carparking Operations").
(b) (Carpark Direction by the State): From time to time, the State:
(i) will set all the rates for car parking at the Carpark; and
(ii) the State may determine:
A. which areas and car parking bays in the Carpark are to be

reserved for different categories of Carpark users; and
B. any other reasonable matter or procedure to be followed in the

operation of the Carpark (but not where compliance with such
matter or procedure would be contrary to an express provision
of this Agreement or the Facility Management Subcontractor
Direct Deed),
Legal\104938921.16 207
provided that:
C. Project Co is entitled to 10 carpark passes (issued on the same

basis as ordinary carpark passes are issued, save that no fee
shall be payable for them);
D. Project Co will be entitled to make available:
1) up to 50 carpark passes for tenants associated with

the Permitted Commercial Purposes on a long term
basis (on equivalent terms to long term hospital
staff);
2) unreserved car spaces for visitors to the

Gymnasium on a no fee basis for the first 1.5 hours
between the hours of 5pm and 8.45am on
weekdays and at all times on weekends and public
holidays upon presentation of proof of gym
membership or usage; and
3) use of the Carpark by users of the Project Co

Childcare Facility on a no fee basis for the first
30 minutes for pick-up and drop-off of children,
in each case by giving written notice to Project Co ("Carpark Direction").
(c) (Compliance with direction): Project Co must comply with all reasonable Carpark
Directions at Project Co's own cost as if the Carpark Directions were obligations of
Project Co under this Agreement.
(d) (No Effect): Any Carpark Direction does not:
(i) entitle Project Co to make any Claim against the State;
(ii) in any way limit Project Co's obligations under this Agreement;
(iii) relieve Project Co of any Liabilities; or
(iv) constitute a Modification.
(e) (No entitlement to Carpark Revenue): Project Co is not, and must ensure that the
Facility Management Subcontractor is not, entitled to any of the revenue (including
revenue paid on account of GST) from the Carparking Operations ("Carpark
Revenue"). Project Co must collect the Carpark Revenue, and pay the Carpark
Revenue to or for the account of the State in accordance with this Clause 36.
(f) (Carpark Revenue on trust): Project Co must keep all the Carpark Revenue
separate from any other money or funds of Project Co or anyone else so that all the
Carpark Revenue is at all times readily identifiable. The Carpark Revenue is and
will be held on trust for the State on behalf of the Hospital Operator.
(g) (Carpark Account): The State shall open, or cause to be opened, an account at a
commercial bank in Melbourne, in the name of the State, the Hospital Operator or
another person designated by the State and advise Project Co of the account details
from time to time ("Carpark Account").
Legal\104938921.16 208
(h) (Timing of payment): Project Co must pay all the Carpark Revenue into the
Carpark Account:
(i) in the case of cash from the payment machines, no later than 10.00am on
the Business Day after the relevant Carpark Revenue has been collected
from the machines; and
(ii) in the case of credit card, EFTPOS or other payment, no later than
10.00am on the Business Day after the relevant Carpark Revenue has
been paid to the Facility Management Subcontractor in clear and
available funds.
(i) (Security of funds): Project Co must keep all Carpark Revenue which has not yet
been deposited into the Carpark Account in a safe or other secure storage acceptable
to the State, but may retain a 'float' to be agreed between the State and Project Co
prior to commencement of Carparking Operations, but in any event of no more than
$10,000, provided all necessary precautions are taken to ensure the security of such
funds.
(j) (User notification): Project Co shall notify users of the Carpark of any changes to
the operation of the Carpark approved by the Project Director or the Contract
Administrator, to the extent that such changes affect the users of the Carpark.
(k) (Tax invoices): Project Co must, where a customer or user of the Carpark so
requests, issue Tax Invoices on behalf of the State for supplies made by the State in
respect of the Carparking Operations, which Tax Invoices must be issued
immediately upon such customer's or user's request, but in any event, no later than
the time frame required by the A New Tax System (Goods and Services Tax) Act
1999 (Cth).
(l) (Records): Project Co must, in respect of the Carparking Operations, comply with
section 70 of the Taxation Administration Act 1953 (Cth) by, without limitation,
retaining records of transactions and copies of Tax Invoices issued to customers for
at least 5 years after the date of the transaction and provide the Project Director or
the Contract Administrator with such records and Tax Invoices upon the Project
Director's or the Contract Administrator's request.
(m) (Indemnity): Project Co indemnifies the State and the State Associates for any
Liability incurred by any of them due to a breach by Project Co of this Clause 36.
(n) (Project Co warranty): Project Co warrants that prior to the date of this
Agreement it has assessed the scope of its obligations to provide the Carparking
Services and the obligations it is assuming under the Carparking Services
Agreement and satisfied itself that the Service Payments contain sufficient
allowances to compensate for performance of all these obligations.
36.2 Facility Management Subcontractor Direct Deed

Project Co must ensure that the Facility Management Subcontractor complies at all times with
the requirements of Clause 12 (Reports) of the Facility Management Subcontractor Direct
Deed so that the State is provided with regular reports, audited as required, in relation to the
Carpark Operations.
Legal\104938921.16 209
36.3 Warranty by Project Co
(a) neither Project Co nor the Facility Management Subcontractor will have any right,
title or interest to revenues from the operation of the Carpark;
(b) all revenues from the operation of the Carpark will be held on trust for the State on
behalf of the Hospital Operator; and
(c) it will at all times comply and ensure that the Facility Management Subcontractor
complies with the obligations under Clauses 36.1 and 36.2 to collect, reconcile and
bank all Carpark Revenues for the State and provide reports of that to the State.
36.4 Liability for discrepancies

Project Co is liable to the State for any Carpark Revenue that is not paid to and received by the
State in clear and available funds in the Carpark Account and Project Co indemnifies and will
keep indemnified the State of all such amounts.
36.5 Dispute
Any dispute relating to this Clause 36 shall be determined by an Independent Expert in
accordance with the Accelerated Dispute Resolution Procedures.
37. Commercial Opportunities and Community Partnerships

37.1 Grant of Rights and Exclusivity
(a) (Grant of right): Subject to paragraphs, (b), (c), (d) the State grants Project Co:
(i) the exclusive right to pursue and exploit the Project Co Commercial
Purposes; and
(ii) the non-exclusive right to pursue and exploit the Shared Retail Purposes,
the Permitted Commercial Office Purposes and a childcare facility,
within the Designated Commercial Areas in accordance with Schedule 26 and this
Clause 37.
(b) (Hospital Operator): Without limiting Clause 4.8, the State will grant the Hospital
Operator (in its own capacity or through its nominee):
(i) the exclusive right to pursue and exploit the RCH Retail Purposes; and
(ii) the non-exclusive right to pursue and exploit the Shared Retail Purposes,
commercial office purposes and the State Childcare Facility.
(c) (Fundraising): The State and the Hospital Operator have the right throughout the
Term to conduct any fundraising or promotional activities on the Site or otherwise
which are related to the Facility or the performance of the Hospital Functions.
(d) (State rights): Subject to Clause Error! Reference source not found., if Project
Co does not comply with Clause 37.2, the State (or its nominees) will be entitled to
pursue any relevant Project Co Commercial Purpose and the rights granted to
Project Co under Clause 37.1(a) and Schedule 26 will be amended accordingly.
Legal\104938921.16 210
(e) (Subleases): Project Co may pursue commercial opportunities referred to in
paragraph (a) in its own capacity or may do so through sub-leases or licences to
third parties in accordance with Clause 6.6.
(f) (termination): On Termination of this Agreement under Clause 53.1, the State
may elect either to:
(i) take a novation of; or
(ii) terminate,
the sub-leases and licences in relation to any part of the Designated Commercial
Areas. To the extent that the State terminates any such sub-lease or licence, the
State must pay to Project Co the reasonable costs incurred (if any) in terminating
that sub-lease or licence under the terms of that sub-lease or licence, (provided such
sub-lease or licence does not extend beyond the Term) and such costs will be
included in paragraph D of Section 3 of Schedule 6.
37.2 Best Endeavours to Pursue Commercial Opportunities

(a) Project Co must use its best endeavours to pursue all commercial opportunities
available to it within the Designated Commercial Areas for Permitted Commercial
Purposes and, to the greatest extent possible, ensure that:
(i) all available space within the Designated Commercial Areas is

appropriately utilised; and
(ii) there are sufficient retail and services outlets within the Designated
Commercial Areas, and these are:
A. operated during such operating hours to conveniently meet the

needs of Hospital Users throughout the Operating Term and
in respect of the food and beverage operations in the Retail
Precinct, at least operated between the hours of 7.00 am to
7.30 pm at sufficient levels to cater for breakfast, lunch and
dinner during those hours; and
B. complementary to the Hospital Functions.
(b) Project Co may make a request from time to time to extend the Designated
Commercial Areas. Any such requests will be considered by the State in its absolute
discretion.
37.3 Revenue and Pricing

Project Co must ensure that, in respect of Pricing Controlled Products:
(a) where such products are being offered for sale by a national or State branded
retailer, are not sold at a price materially and consistently higher than that which the
retailer offers those products for sale in the Melbourne metropolitan area; or
(b) otherwise, are not sold at a price materially and consistently higher than that of
equivalent products (of equivalent quantity, quality, service and amenity) capable of
being purchased at similarly styled, commercially operated retail outlets in other
major hospitals in the Melbourne metropolitan area (which, for the avoidance of
doubt, does not include outlets at such other hospitals which are subsidised by the
State or the relevant hospital or those run by not-for-profit or charitable groups).
Legal\104938921.16 211
37.4 [not disclosed]
37.5 Risk
Project Co assumes all operating risks associated with the commercial opportunities available
to it under this Clause 37 and will pay all Rates, Taxes outgoings and other expenses which
relate to the Designated Commercial Areas, including Utility Services.
37.6 Community Partnerships Program [not disclosed]
37.7 Corporate Sponsorship Program

Project Co agrees to implement and pursue the corporate sponsorship program as described in
Schedule 28.
38. Waste Collection Services, Utility Services and Medical Gases

38.1 Project Co to provide
(a) Subject to paragraph (b), Project Co must throughout the Operating Term ensure the
continuous supply of all Utility Services and Medical Gases to and within the
Facility or from the Facility in accordance with the Services Specifications
including, for the avoidance of doubt:
(i) ensuring a continuous supply of gas for the operation of the co-generation
plants (if applicable); and
(ii) ensuring an appropriate supply of diesel or other fuel required to enable

the operation of the emergency electrical systems in accordance with the
(b) Without limiting its obligations in respect of Stage 1 Final Completion and Stage 2
Completion, Project Co is not required to ensure the continuous operation of the
Fibre Optic Cable during the Operating Term and shall not be liable to for any
Defect in the Fibre Optic Cable during the Operating Term, save to the extent of
any such Defects in the Fibre Optic Cable are due to the failure of Project Co to
comply with its obligations under this Agreement.
(c) Project Co must throughout the Operating Term provide all Waste Collection
Services and Waste Management Services in accordance with the Service
Specifications.
38.2 Waste Collection Services, Utility Services and Medical Gases payments
(a) (third party agreements): Project Co shall, subject to the terms of this
Clause 38.2, enter into all agreements for the supply of all Waste Collection
Services, Utility Services and Medical Gases to the Facility.
(b) (State involvement): The State shall be entitled to be involved in the negotiation of
all agreements for the supply of Waste Collection Services, Utility Services and
Medical Gases to the Facility and Project Co must, accordingly, keep the State
informed of any such negotiations and when they are to occur.
(c) (approval): Before entering into any agreements for the supply of Waste
Collection Services, Medical Gases or Utility Services to the Facility, Project Co
shall provide to the relevant State Delegate and the Hospital Operator’s
Legal\104938921.16 212
Representative the proposed terms of the supply agreements for their approval in
accordance with the Review Procedures.
(d) (if approved): If the State Delegate and the Hospital Operator’s Representative
approve or are deemed to approve the terms of the proposed supply agreements then
Project Co shall enter into the supply agreements on those terms.
(e) (if not approved): If the relevant State Delegate and the Hospital Operator’s
Representative do not approve the proposed terms of the supply agreements then the
State may enter into supply agreements for the supply of the relevant Waste
Collection Services, Utility Services or Medical Gases directly with a supplier or
require Project Co to seek supply of the relevant Waste Collection Services, Utility
Services or Medical Gases on alternative terms acceptable to the State and the
Hospital Operator.
(f) (Invoices): If Project Co enters into supply agreements in accordance with the
paragraph (c), within 5 Business Days of receipt by Project Co, Project Co must
subject to Clause 38.3, deliver to the Hospital Operator’s Representative for
payment by the Hospital Operator each invoice issued under the relevant supply
agreement and must certify whether, according to the records of Project Co, the
relevant invoice is correct and if not correct the reason for this.
(g) (Payment): Subject to Clause 38.3 the State agrees to procure the payment by the
Hospital Operator of each invoice issued in accordance with paragraph (f)
(including non-recoverable GST included in the invoice) in accordance with the
terms of payment set out in the relevant supply agreement or where there is none in
accordance with the normal terms of payment of the relevant supplier (provided that
Project Co has delivered the invoice to the Hospital Operator’s Representative in
the time required under paragraph (f) and the amount invoiced has been certified as
payable by Project Co, and the State or the Hospital Operator does not have a bona
fide dispute in relation to that invoice).
(h) (Certify): If the State enters into any of the supply agreements for Waste
Collection Services, Utility Services or Medical Gases in accordance with
paragraph (e) then, subject to Clause 38.3, the State shall require Project Co to
certify whether according to the records of Project Co the relevant invoice is correct
and if not correct, the reason for this.
(i) (no claim): Project Co shall not be entitled to Claim against the State:
(i) any costs incurred by Project Co in respect of the supply of Waste

Collection Services, Utility Services or Medical Gases to the Facility
other than those invoiced in accordance with this Clause 38.2;
(ii) any Margin for the provision of the Waste Collection Services, Utility
Services or Medical Gases; or
(iii) any costs charged by any Utility Services provider for the undertaking of
works or for the provision of services other than the supply of the
relevant Utility Services or Medical Gases.
38.3 Designated Commercial Areas and Carpark

(a) Project Co shall pay for the supply of all Waste Management Services, Waste
Collection Services and Utility Services supplied to the Designated Commercial
Areas and Carpark.
Legal\104938921.16 213
(b) If the State enters into any supply agreements in accordance with Clause 38.2(e),
which include the provision of Waste Collection Services or Utility Services to the
Designated Commercial Areas or Carpark, within 5 Business Days of receipt by the
State, the State shall issue to Project Co a copy of the invoice issued under the
relevant supply agreement and Project Co shall within 5 Business Days of receipt of
the copy of the invoice pay to the State the amount owing under the invoice for
supply of the Waste Collection Services or Utility Services to the Designated
Commercial Areas and the Carpark.
(c) If Project Co fails to pay the State any amount owing to the State in accordance
with paragraph (b) such amount shall be Moneys Owing payable on demand.
(d) Subject to paragraph (e), Project Co must ensure that:
(i) the Designated Commercial Areas and Carpark are separately metered so
that supply of the Utility Services to these areas can be separately billed
to Project Co;
(ii) it is registered with all Utility Service Providers as the entity responsible
for payments for the supply of all Utility Services supplied to the
Designated Commercial Areas and Carparks; and
(iii) the price for Waste Collection Services to the Designated Commercial
Areas and the Carpark are able to be separately billed or calculated.
(e) If Project Co arranges for the RCH Shop to be separately metered in respect of any
Utility Services, the State will reimburse Project Co for the relevant Utility Services
consumed by the RCH Shop.
38.4 Energy Risk Sharing

(a) (Project Co responsibility): In accordance with this Clause 38.4 and Schedule 22,
Project Co shall be responsible for:
(i) the volume of gas and electricity used at the Facility during the Operating
Term; and
(ii) the greenhouse emissions associated with that energy use,
which is attributable to the Energy End Uses identified as Project Co Energy End
Uses.
(b) (BAS): Without limiting any other obligations under this Agreement, Project Co
must ensure that at all times the BAS separately records gas and electricity usage
for each category of Hospital Operator Energy End Uses and Project Co Energy
End Uses respectively.
(c) (Agreement on targets): The State and Project Co have agreed:
(i) the Target Electricity Volume;
(ii) the Target Gas Volume; and
(iii) the Target Greenhouse Emissions,
for the Project Co Energy End Uses for each Operating Year.
Legal\104938921.16 214
(d) (adjustment): The Energy Targets may only be adjusted in accordance with
Section 5 of Schedule 22.
(e) (Statement): Not later than one month after the end of each Operating Year,
Project Co must provide the State with a statement setting out the calculation,
determined in accordance with Schedule 22, of the Electricity Volume Payment, the
Gas Volume Payment, the Energy Volume Risk Payment and the Greenhouse
Emissions Risk Payment for the immediately preceding Operating Year.
(f) (Schedule 22): Schedule 22 shall apply for the purpose of determining Project Co's
rights and obligations in respect of the payments referred to in Clause 38.4(e).
(g) (Hospital Operator Energy End Uses): The State shall be responsible for paying
for the volume of gas and electricity used at the Facility during the Operating Term
that is attributable to the Energy End Uses identified as Hospital Operator Energy
End Uses.
39. Repricing Reviewable Services

39.1 Request for Offer to Reprice
(a) (Offer to reprice): No later than 9 months before:
(i) the fifth anniversary of the Operational Commencement Date; and
(ii) thereafter, the tenth, fifteenth and twentieth anniversary of the

Operational Commencement Date,
Project Co may, and must if the Contract Administrator gives notice to Project Co
that the State requires Project Co to do so, submit an offer for the pricing of the
provision of all or any of the Reviewable Services for the ensuing Reviewable
Services Terms under the same Services Specifications.
(b) (Price breakdown): Project Co's offer shall break down the price for the
Reviewable Services for the ensuing Reviewable Services Terms and shall detail all
of the relevant factors and inputs into the proposed price.
(c) (Negotiation and notification): If Project Co submits an offer within the time
permitted by paragraph (a), then for a period of 2 months after the offer is made
under that clause:
(i) the Contract Administrator agrees to negotiate exclusively with Project

Co for the provision of the relevant Reviewable Service during the
applicable ensuing Reviewable Services Term; and
(ii) the Contract Administrator will by a date no later than 1 month after the
expiration of that 2 month period, advise Project Co whether:
A. Project Co's offer (or any lower offer made by it during

negotiation) is acceptable to the State for the provision of the
relevant Reviewable Service during the applicable ensuing
Reviewable Services Term; or
B. whether the State requires a competitive tender to be

conducted under Clause 39.3.
Legal\104938921.16 215
(d) (Offer to remain open): Notwithstanding that the State may require Project Co to
conduct a competitive tender in accordance with Clauses 39.1(c)(ii) or 39.3, Project
Co's offer shall remain open for subsequent acceptance by the State under
Clause 39.1 until 1 month after the relevant current Reviewable Services Term.
39.2 No Offer made

(a) If Project Co does not offer, and the State does not require an offer under
Clause 39.1 in respect of any Reviewable Services, provision of those Reviewable
Services will continue on the then current terms and pricing for the ensuing
Reviewable Services Term.
(b) If, in breach of Clause 39.1(a), Project Co does not submit an offer in accordance
with Clause 39.1 upon receipt of a notice to do so from the Contract Administrator,
without limiting any other rights it may have in respect of such breach, the State
may require a competitive tender to be conducted in accordance with Clause 39.3.
39.3 Competitive Tender

If the State requires a competitive tender pursuant to Clause 39.1 or 39.2, Project Co must
obtain offers by competitive tender:
(a) from at least 3 experienced and capable service providers for each of the types of
Reviewable Services which are the subject of the notice from the State under
Clause 39.1 which may include any existing Facility Management Subcontractor
but otherwise must not include:
(i) any Project Co Associate; or
(ii) any Related Body Corporate to any other of the service providers asked
by Project Co to submit an offer;
(b) which reflect a competitive pricing of those Reviewable Services in the then current
market;
(c) for provision of the relevant Reviewable Services for the ensuing Reviewable
Services Term; and
(d) which will enable Project Co to continue to meet the relevant Services
Specifications,
pursuant to a request for tenders which:
(e) provides such information concerning the Project, the relevant Reviewable Services
and the Project Documents as the State reasonably requires to ensure the tenderers
are fully informed of the opportunity tendered;
(f) imposes a duty of confidentiality on tenderers;
(g) requires tenders to be conforming, and irrevocable until 1 month after the relevant
current Reviewable Services Term;
(h) requires tenderers to comply with the Subcontracting requirements set out in
Clause 12; and
(i) is accompanied by a draft Subcontract:
Legal\104938921.16 216
(i) substantially on the same terms (other than price and term) as the Facility
Management Subcontract then currently being complied with by Project
Co under this Agreement for the provision of those tendered Reviewable
Services, and binds the tenderer to accept its terms; and
(ii) which provides for the review of those Reviewable Services in

accordance with the terms of this Clause 39,
and, if so requested by the Contract Administrator, which is first provided to the

Contract Administrator for review and comment pursuant to the Review Procedures,
and if necessary is amended before it is given to the selected service providers.
39.4 Sufficient Information

Project Co will within 3 months of the notice from the State under Clause 39.1(c)(ii) or 39.2(b)
provide to the Contract Administrator:
(a) copies of all conforming offers it has been given under the tender pursuant to
Clause 39.3;
(b) Project Co's comments on each of the offers;
(c) Project Co's recommendation as to the preferred tenderer; and
(d) such further details as the Contract Administrator reasonably requires in relation to
the tender and the offers.
39.5 Consultation
(a) During the period of 2 months following provision of the information under
Clause 39.4, Project Co will consult with the State concerning the offers for the
provision of Reviewable Services made in accordance with Clause 39.3, to attempt
to reach agreement on the appointment of one of the tenderers for the provision of
the Reviewable Services for the ensuing Reviewable Services Term having regard
to:
(i) the experience and capability of each tenderer;
(ii) the extent to which each offer provides value for money to the State as
against each of the other offers; and
(iii) the ability of Project Co to continue to meet the Services Specifications

specified by the State in its notice under Clause 39.1 and otherwise
comply with this Agreement on subcontracting the relevant Reviewable
Service to any of the tenderers.
(b) Project Co shall not enter into any such contract with any tenderers for the provision
of the Reviewable Services without the prior agreement of the State.
39.6 Consents to Probity Investigations

Project Co will procure such written consents from persons associated with the service
providers quoting for the provision of Reviewable Services as the Law and the State require, to
carry out Probity Investigations.
Legal\104938921.16 217
39.7 Probity Officer and State Delegate
The State may at any time appoint a probity officer or have the State Delegate oversee the
tender process referred to in this Clause 39 and Project Co must:
(a) provide all assistance and information required by the State Delegate or probity
officer; and
(b) comply with all directions of the probity officer or State Delegate,
in respect of the tender process.
39.8 Failure to Agree

(a) If none of the offers made by the tenders are acceptable to the State, the State may
(entirely at its discretion):
(i) accept the offer made by Project Co under Clause 39.1;
(ii) require Project Co to proceed to provide the Reviewable Services under

the current terms and pricing until the Tender Expiry Date; or
(iii) omit the Reviewable Services from the Services by way of a Modification
Order and carry out the Reviewable Services itself or by way of a third
party (in which case the Service Payments shall be adjusted in accordance
with the Change Compensation Principles).
(b) If the State advises Project Co that it considers a particular tenderer whose offers
have been obtained by Project Co pursuant to Clause 39.3 to be the preferred
proposed Subcontractor of the relevant Reviewable Services, on the basis of the
criteria described in Clause 39.5, and Project Co does not agree that these criteria
have been satisfied for any such tenderer nominated by the State, the matter will be
referred for resolution under the Accelerated Dispute Resolution Procedures.
39.9 Appointment
(a) Subject to Clause 39.8 if a competitive tender is undertaken in accordance with
Clause 39.1, Project Co will (subject only to the conduct of Probity Investigations
satisfactory to the State) subcontract, or ensure that the Facility Management
Subcontractor subcontracts, the provision of the relevant Reviewable Services for
the ensuing Reviewable Services Term, pursuant to a Subcontract which complies
with the tender requirements of Clause 39.3, to the tenderer:
(i) agreed with the State under this Clause 39; or
(ii) determined pursuant to the Accelerated Dispute Resolution Procedures in

accordance with Clause 39.8(b),
and the Service Payments will be adjusted accordingly based on the Subcontract
price.
(b) A Subcontract entered into in accordance with this Clause 39 shall be deemed to be
approved by the State for the purposes of Clause 12.
Legal\104938921.16 218
39.10 Continued Provision of Reviewable Services
Without limiting the State's rights under this Agreement, including its rights in respect of any
breach of this Agreement by Project Co, where an offer is made by Project Co under
Clause 39.1 and the State does not accept Project Co's offer, and a Subcontractor has not yet
been appointed under Clause 39.9 to provide the Reviewable Services by the date of the
commencement of the relevant Reviewable Services Term then subject to Clause 39.8 Project
Co will continue to provide the relevant Reviewable Services on the terms and pricing for the
then current Reviewable Services Term and in accordance with the Services Specifications,
until such time as a Subcontractor appointed under Clause 39.9 commences provision of those
Reviewable Services provided that if the period for provision of the Reviewable Services by
Project Co extends beyond the Tender Expiry Date the State shall pay the price tendered under
Clause 39.1 backdated to the Tender Expiry Date.
39.11 Adjustment to Service Payments

The relevant Reviewable Services Components of the Service Payments will be adjusted to
reflect the revised pricing of any Reviewable Services for which an offer is accepted under
Clause 39.1 or Clause 39.9 which adjustment or reduction will be made for the balance of the
Operating Term, and the Financial Model will be adjusted accordingly.
39.12 No Double Counting

If Project Co has received in one Reviewable Services Term compensation for a Modification,
or through the application of Schedule 9 in relation to increased Insurance cost sharing then
there must be no double counting for the effect of that Modification or increase in insurance
costs in calculating any revision to the price for a Reviewable Service.
40. Payments for Services

40.1 Services
(a) In consideration of Project Co providing the Services the State will pay to Project
Co the Service Payments from the Operational Commencement Date in accordance
with the Payment Schedule.
(b) Service Payments are Quarterly payments, calculated in accordance with Schedule
3A in respect of the three Operating Months in the relevant Quarter, and payable in
arrears.
(c) For the avoidance of doubt and without limiting any other provision of this
Agreement, no Service Payment will be payable in respect of Services to be
provided at or in respect of:
(i) the Stage 1 Facility prior to the Operational Commencement Date; or
(ii) the Stage 2 Facility prior to the Date of Stage 2 Completion.
(d) The payment of any Completion Payment or Service Payment will not of itself be
evidence that any Works or Services (as applicable) have been provided in
40.2 Reductions for Failure to meet Services Specifications

(a) (Failure to meet Services Specifications):
Legal\104938921.16 219
(i) The Service Payments have been calculated assuming the provision of all
components of all the Services to all Services Specifications:
A. to the Stage 1 Facility at all times from the Operational

Commencement Date; and
B. to the Stage 2 Facility at all times from the Date of Stage 2

Completion,
for the remainder of the Operating Term.
(ii) If Project Co fails to provide the Services in accordance with

paragraph (a)(i) then the Abatement Regime will apply and the Service
Payments will be reduced to the extent and in the manner described in the
Abatement Regime to reflect the agreed principle that the State will only
pay for the quantum and quality of the Services actually provided.
(iii) Project Co agrees that the potential reductions provided for in the
Abatement Regime reflect a genuine pre-estimate of the diminished value
to the State if Project Co does not provide all components of all Services
to the Services Specifications at all times in accordance with
paragraph (a)(i) and any related losses suffered by the State or a State
Associate under paragraph (c).
(b) (Not to Affect Other Rights): Subject to paragraph (c), reduction of the Service
Payments by application of the Abatement Regime under this Clause 40.2 will be
the only monetary compensation payable by Project Co to the State for Service
Failures which activate the Abatement Regime, but this will not affect any other
right (excluding for monetary compensation) of the State, whether under this
Agreement or at Law, in respect of the failure to which this Clause 40.2 refers
including the right to take action under Clauses 51 and 52 on an Event of Default.
(c) (Additional compensation payable): Paragraph (b) does not preclude the State
from making any Claim against Project Co (including any monetary claim) for any
of the following to the extent that they occur as a result of, or in connection with, a
Service Failure and to the extent the State has not been compensated for such
losses, by the reduction in the Service Payment under paragraph (a):
(i) any loss or damage to, or destruction of the Facility or the Site including
a Casualty Occurrence and any consequential loss arising out of such
loss, destruction of or damage to the Facility or the Site (to the extent that
any such consequential loss is included in any policy of insurance
required to be procured in accordance with this Agreement);
(ii) third party property damage incurred by the State or State Associate or
for which the State or a State Associate is liable;
(iii) personal injury or death for which the State or a State Associate is liable;
(iv) costs and expenses incurred by the State in exercising its rights under:
A. Clause 50 to the extent the Emergency was caused by Project

Co, or
B. Clauses 51 and 52; and
Legal\104938921.16 220
(v) reasonably foreseeable economic loss of the State, any State Associate (or
through them any Hospital User) caused by the unlawful or wilful act or
omission of Project Co or any Project Co Associate.
(d) (Payments): To the extent that Project Co must pay to the State any costs under
paragraph (c) in excess of the Service Payments, each future Quarterly Service
Payment will be reduced to the extent necessary for the State to recover those costs
in full. To the extent the State is then unable to recover its costs, all such amounts
will be Moneys Owing payable by Project Co.
40.3 Quarterly Service Payments

(a) (Invoice): Within 2 Business Days after the date Project Co delivers the Quarterly
Performance Report for the Quarter just ended, Project Co must prepare and
provide to the Contract Administrator an Invoice for payment of the Quarterly
Service Payment calculated in respect of the Quarter just ended.
(b) (Failure to provide invoice): If Project Co fails to provide an Invoice in the time
required, the Contract Administrator may prepare the Invoice on behalf of Project
Co.
(c) (Calculation and adjustment): In each Invoice, the Quarterly Service Payments
must be calculated and adjusted in accordance with the Payment Schedule.
(d) (Set off): An Invoice may require that Project Co make payment to the State, if
Moneys Owing to the State at the relevant Quarter End are greater than the
Quarterly Service Payment to Project Co.
(e) (Payment Statement): The Contract Administrator may make recalculations of the
amounts in any Invoice if the State reasonably believes that this is necessary for the
Invoice to correctly reflect the payment and Abatement provisions of the Payment
Schedule, and will provide to Project Co, for each payment of the Quarterly Service
Payments, a statement ("Payment Statement") stating the amount paid and any
recalculations made to the amounts set out in any Invoice.
(f) (Timing of payment): Subject to Clause 40.7, payment will be made by the State to
Project Co or by Project Co to the State (as the case may be) of the undisputed
amount of an Invoice (or where the Invoice is recalculated in accordance with
paragraph (e) the undisputed amount of the recalculated Invoice) within 20
Business Days after receipt by the State of the Invoice to which the payment relates.
40.4 Adjustments
(a) (Dispute of Payment Statement): If Project Co disputes a Payment Statement it
will, within 5 Business Days of receiving the Payment Statement, notify the State in
writing of the matters which it disputes in the Payment Statement, together with the
adjustments it requires. Project Co may require the State to provide such further
information which it reasonably requests.
(b) (State response): The State will, within 5 Business Days of receiving a notice
pursuant to paragraph (a), notify Project Co in writing whether it agrees with the
adjustments which Project Co has requested. If the State agrees with Project Co's
requested adjustments, then the State will have a further 20 Business Days from the
date on which it notifies Project Co under this paragraph (b) to pay Project Co the
adjusted amount.
Legal\104938921.16 221
(c) (Dispute resolution): If, within 20 Business Days of Project Co giving the State a
notice pursuant to paragraph (a), the parties have not agreed to the adjusted
Quarterly Service Payments which the State will pay to Project Co, the matter will
be resolved pursuant to the Accelerated Dispute Resolution Procedures.
(d) (Abatement disputes): Any dispute on the calculation of any Quarterly Service
Payment which relates to the application of the Abatement Regime, and any
reductions to the Quarterly Service Payment consequent on that application, must
be referred by Project Co for resolution under the Accelerated Dispute Resolution
Procedures no later than the date 3 months after the Quarterly Service Payment to
which the dispute relates, has been paid.
(e) (Failure to serve notice): If Project Co has not served a Notice of Dispute by the
date required under paragraph (d), then:
(i) the State will not be Liable (to the fullest extent permitted by Law) for
any Claim by Project Co; and
(ii) Project Co will be absolutely barred from making any Claim against the
State,
in relation to that dispute.
40.5 Late Payments

(a) If the State fails to pay the undisputed amount of any Quarterly Service Payment
within the time required under Clause 40.3 or any other amount payable by or on
behalf of the State under any Project Document, the State will pay interest on the
undisputed amount of that Quarterly Service Payment owing, or such other amount
owing, at the Overdue Rate calculated daily from the date referred to in paragraph
(c) until the amount is paid.
(b) If Project Co disputes a Payment Statement pursuant to Clause 40.4 and the
disputed amount is found to be ultimately owing to Project Co, then the State will
pay interest at the Overdue Rate calculated daily on the disputed amount for the
period from the date referred to in paragraph (c) until it is paid.
(c) Interest under the foregoing paragraphs will be calculated on and from the day after
payment of the relevant amount is due or determined to have been due.
40.6 Over payment

If the State pays any amount to Project Co, under Clause 40.3 or otherwise, and it is
subsequently determined for any reason that Project Co was not entitled to that payment,
Project Co will immediately refund that payment to the State.
40.7 Set-off of Moneys Owing

(a) Without limiting the generality of Clause 66.4, the State may set-off any amounts
due and payable to it by, or to which it is otherwise entitled to reimbursement from
Project Co, whether under any Project Document or at Law, against the amount of
any Quarterly Service Payments.
(b) The State will provide details of any amount set-off pursuant to paragraph (a) in the
relevant Payment Statement.
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40.8 Goods and Services Tax (GST)
(a) (Payment): In addition to any other consideration, the recipient of a Taxable
Supply made under or in connection with this Agreement or any Project Document
(the "Recipient") must pay to the party making the Taxable Supply (the
"Supplier") the amount of GST in respect of the Taxable Supply. This subclause
does not apply if the consideration specified for the Taxable Supply is expressly
agreed to be GST inclusive.
(b) (Excess or deficiency): If the amount paid by the Recipient to the Supplier in
respect of GST (whether because of an adjustment (within the meaning of the GST
Law) or otherwise):
(i) is more than the GST on the Taxable Supply, then the Supplier shall
refund the excess to the Recipient; or
(ii) is less than the GST on the Taxable Supply, then the Recipient shall pay
the deficiency to the Supplier.
(c) (GST Documentation): The Recipient is not obliged to pay any amount in respect
of GST to the Supplier unless and until the Supplier issues a Tax Invoice to the
Recipient in respect of the Taxable Supply. If an adjustment (within the meaning of
the GST Law) has occurred, the Supplier must issue an Adjustment Note to the
Recipient.
(d) (Revenue net of GST): Any reference in this Agreement or any Project Document
to price, value, sales, revenue, profit or a similar amount ("Revenue"), will be a
reference to the GST-exclusive component of that Revenue unless, as in
Clause 36.1(e), the contrary intention is expressed.
(e) (Cost net of GST): Any reference in this Agreement or any Project Document to
cost, expense, liability or other similar amount ("Cost"), will be a reference to that
Cost reduced by the Input Tax Credits in respect of such Cost .
40.9 Rates and Taxes

(a) (Site Rates and Taxes): The State is responsible for and will pay all Rates and
Taxes assessed on or in relation to the Site, except:
(i) to the extent that Project Co caused or causes any such Rates or Taxes to
be assessed by or as a result of an act or omission of Project Co, other
than an act or omission expressly permitted by this Agreement; and
(ii) in connection with the Project Co Commercial Purposes and any Shared
Retail Purposes undertaken by Project Co.
(b) (General liability for Rates and Taxes): Subject only to paragraph (a), Project Co
will pay all Rates and Taxes assessed:
(i) on it; and
(ii) on or in relation to the Site, the Facility or the Project,
including pursuant to any Project Document or any transaction evidenced or

contemplated by it or in respect of, or because of its involvement in the Project,
including any Rates or Taxes imposed by any Governmental Agency of the State.
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PART 4 CHANGE IN CIRCUMSTANCES
41. Modifications
41.1 State Modification
The relevant State Delegate:
(a) may at any time issue a document entitled "Modification Price Request" to Project
Co, which will set out details of:
(i) the proposed Modification which the State is considering;
(ii) the State's preferred financing for the proposed Modification in

accordance with the Change Compensation Principles where the
Modification will lead to an increase in the costs of the Works or
Services; and
(iii) any specific information that the State requires Project Co to provide in
the Change Notice to be provided by Project Co; and
(b) will issue a "Modification Price Request" for a Modification because of:
(i) a Change in Law or Change in Policy (unless the State directs Project Co
in a timely and lawful manner not to comply with such Change in
Policy), pursuant to Clauses 43;
(ii) a change to the type of Utility Services or Medical Gases to be supplied

to the Facility after Stage 1 Final Completion in respect of the Stage 1
Facility and after Stage 2 Completion in respect of the Stage 2 Facility;
(iii) the State's requiring Project Co to remediate Contamination for which the
State is responsible to pay under Clause 7.3(b);
(iv) the State requiring Project Co to rectify any structural conditions on the
Retained Buildings which were not part of, or affected by, the Retained
Buildings Works; or
(v) a change to the Facility caused by a change to the purchase of Group 3B

Equipment from that specified in the Equipment List in accordance with
clause (c) of the definition of Modification;
(vi) additional work required to be undertaken in respect of the Retained

Buildings as a result of a condition described in Clause 41.20(e) or (h); or
(vii) any Modification required as a condition of obtaining approval for the

State's Childcare Facility required under section 16 of the Children
Services Act 1996 (Vic),
and the Modification Price Request, shall, subject to Clause 41.9, request Project Co to prepare
a Change Notice in respect of the Modification.
41.2 Response by Change Notice

(a) (Price for Change Notice): Project Co must within 5 Business Days of receipt of
the Modification Price Request, provide the State with a proposed price for the
Legal\104938921.16 224
preparation of the Change Notice which shall be an estimate of the costs that will be
reasonably and properly incurred by Project Co in preparing the Change Notice.
(b) (No Margin): Project Co warrants that the price proposed by Project Co under
paragraph (a) shall not include any Margin and shall otherwise be prepared in
accordance with the Change Compensation Principles (insofar as they are
applicable).
(c) (breakdown): The Project Co proposed price will set out a detailed breakdown of
the costs and time allowed to prepare the Change Notice.
(d) (further details): To the extent it is able to do so, the State will provide Project Co
with further details of the proposed Modification reasonably requested by Project
Co to assist in determining a price for the Change Notice.
(e) (State approval): Within 2 Business Days of receipt of Project Co's proposed price
for the preparation of the Change Notice the Project Director shall advise Project
Co whether:
(i) the State agrees to the proposal; or
(ii) the State does not agree with the proposal in which case the State may
A. suggest an alternative price;
B. require Project Co to submit a further price;
C. inform Project Co that it does not wish to proceed with the

proposed Modification or any associated Equipment
Modification except where the Modification is necessary
because of any event set out in Clauses 41.1(b)(i), 41.1(b)(vi),
or 41.1(b)(vii) (unless the State does not require Project Co to
proceed with the State Childcare Facility);
D. require Project Co to conduct a tender process to implement

the proposed Modification (where applicable) in accordance
with Clause 41.9; or
E. direct Project Co to proceed with the preparation of the

Change Notice in which case Project Co must comply with
such direction and either party may refer the determination of
the price for the Change Notice for resolution in accordance
with Clause 56.
(f) (Change Notice): If Project Co is required to prepare a Change Notice in

accordance with this Clause 41.2, it shall prepare and submit such Change Notice to
the State within 20 Business Days of:
(i) the State's agreement to the proposed price for the Change Notice; or
(ii) failing agreement the Project Director's direction to prepare such Change
Notice; or
(iii) such later time as the State reasonably agrees given the size and
complexity of the proposed Modification.
(g) (payment for Change Notice): If Project Co is required to prepare a Change

Notice in accordance with Clause 41.2(e), whether or not the State issues a
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Modification Order, the State will pay Project Co the price for the preparation and
submission of the Change Notice agreed or determined in accordance with this
Clause 41.2:
(i) if the Project Director does not issue a Modification Order, within
60 days of receiving an invoice from Project Co for such price provided
that the relevant Change Notice has been prepared and submitted in
accordance with this Clause 41.2; or
(ii) if the Project Director does issue a Modification Order, as part of the
amount payable by the State for the State Modification.
(h) (Entitlement to payment): In respect of a State Modification, Project Co shall

only be entitled to be paid for a Change Notice issued in response to a Modification
Price Request issued by the relevant State Delegate under Clause 41.1(a) or 41.19.
41.3 Consultations
If required by the State, Project Co will meet at such times and provide such further details and
such appropriately qualified personnel to explain, as may be reasonably necessary to enable the
State to assess the Change Notice, or assess and develop any alternative proposal of Project Co
put forward in that Change Notice.
41.4 Principles for Costing State Modifications

In calculating the amount payable in respect of a State Modification to be included in a Change
Notice Project Co must:
(a) (Change Compensation Principles): comply with the Change Compensation

Principles;
(b) (Mitigate costs): use all reasonable endeavours to mitigate and minimise any costs
incurred or likely to be incurred in implementing, or as a consequence of the
implementation of, that State Modification;
(c) (Change in Law or Policy): not include any amount paid or payable by the State
under Clause 43, where the State Modification is required to comply with a Change
in Law or a Change in Policy (unless Clause 43.3(a) applies); and
(d) (Contamination): not include any amount paid or payable by the State under
Clause 7, where the State Modification is required to clean up Contamination for
which the State is liable to pay.
41.5 Issue of a Modification Order

(a) (Modification Order): Within 20 Business Days (or such longer period as the State
reasonably requires, given the size and complexity of the proposed Modification)
after receiving Project Co's Change Notice, or any amended proposal pursuant to
Clause 41.3 the State may:
(i) by a written document entitled "Modification Order" and signed by the

relevant State Delegate request Project Co to, and Project Co will, carry
out the State Modification described in the Modification Order; or
(ii) inform Project Co that it does not wish to proceed with the proposed
Modification (or any associated Equipment Modification) except where
the Modification is necessary because of any event set out in
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Clauses 41.1(b)(i),41.1(b)(vi) or 41.1(b)(vii) (unless the State does not
require Project Co to proceed with the State Childcare Facility).
(b) (Not to commence before issue): Project Co will not begin any work, and will not
have any entitlement to make any Claim against the State (other than
under Clause 41.2), in respect of a State Modification which requires Project Co to
undertake additional work until such time as a Modification Order has been issued
in accordance with this Clause 41.5.
(c) (Modification to proceed even if disputed): The State will set out in its
Modification Order the amount payable to or by the State in respect of the
Modification as calculated in accordance with the Change Compensation Principles
and, notwithstanding its rights to dispute the Modification Order in accordance with
Clause 56, Project Co shall proceed to implement the State Modification.
(d) (State may proceed) If the amount determined by the State as payable in respect of
the proposed Modification is different to the amount proposed by Project Co in its
Change Notice and the parties cannot agree on such amount, the State may still (at
its discretion) issue a Modification Order and Project Co shall be obliged to carry
out the State Modification in accordance with the Modification Order, but at the
same time either party may refer the matter in dispute for determination in
(e) (Variation of Agreement): To the extent that the State has accepted , or it is
determined, that an effect of the type described in a Change Notice has occurred or
will occur on implementation of the State Modification, the following will occur so
that the obligations and warranties of Project Co in this Agreement will not be
breached by virtue of the implementation of the State Modification:
(i) the Services Specifications, the Design Requirements, and any other
relevant parts of this Agreement will be varied; and
(ii) any other relevant component of the definition of "Fit for the Intended
Purpose" will be deemed to be qualified,
to the extent accepted by the State or determined under the Accelerated Dispute
Resolutions Procedures to be necessary to accommodate the State Modification.
41.6 Financing and Payment of State Modifications

Financing and payment of State Modifications shall be in accordance with the Change
41.7 Governing Principles for Expert Determination

Any dispute about a proposed State Modification, may be referred by either party for
resolution under the Accelerated Dispute Resolution Procedures, and in making a
determination, the Independent Expert must be instructed to have regard to the Change
Compensation Principles and this Clause 41.
41.8 Determinations by Independent Expert

(a) Where a Dispute in relation to a State Modification arises prior to the issuing of a
Modification Order, the State may, following determination of a Dispute on that
State Modification, elect, within 20 Business Days of the determination:
(i) to require Project Co to proceed with the State Modification;
Legal\104938921.16 227
(ii) not to proceed with the State Modification (or any associated Equipment
Modification) except where the Modification is necessary because of any
event set out in Clauses 41.1(b)(i), 41.1(b)(vi) or 41.1(b)(vii) (unless the
State does not require Project Co to proceed with the State Childcare
Facility);
(iii) to require that Project Co conduct a tender process to implement the

proposed State Modification pursuant to Clause 41.9 (where applicable);
or
(iv) if the State Modification is a change to requirements for delivery of the

Services, to vary the Services Specifications by deleting a Service, by
giving not less than three (3) months notice to Project Co.
(b) If the State varies the Services Specifications in accordance with paragraph (a)(iv),
then the Service Payments will be reduced to reflect the recurrent operating costs
not incurred by Project Co due to the Service no longer being performed by Project
Co.
41.9 Competitive Tender

(Tender required): Where a State Modification is to be implemented after Stage 1 Final
Completion in respect of the Stage 1 Facility or after Stage 2 Completion in respect of the
Stage 2 Facility, then:
(a) instead of requesting a Change Notice prepared by Project Co under Clause 41.2, in
its Modification Price Request;
(b) if the State does not accept a Change Notice provided by Project Co under
Clause 41.2; or
(c) following a determination by the Independent Expert of a matter referred for

determination under Clause 41.8(a) (or any appeal of any such determination),
the State may require Project Co to conduct a tender process to carry out any work required in
respect of the proposed State Modification in accordance with the Change Compensation
Principles.
41.10 Ability to Omit Works or Services

(a) The State may omit any of the Works or Services in accordance with the procedure
set out in this Clause 41 and may have those omitted Works or Services carried out
by a third party.
(b) The State is not obliged to engage Project Co to carry out any Modifications to the
Facility after Stage 1 Final Completion or Stage 2 Completion (as applicable) and
may have such Modifications carried out by a third party.
(c) Where the State exercises its rights under paragraphs (a) or (b):
(i) the Services Specifications, the Design Requirements, and any other
relevant parts of this Agreement will be varied; and
(ii) any other relevant component of the definition of "Fit for the Intended
Purposes" will be deemed to be qualified,
Legal\104938921.16 228
to the extent agreed by the parties or determined under the Accelerated Dispute
Resolution Procedure to be necessary to accommodate the Modification.
41.11 Cost Savings

(a) Project Co is encouraged throughout the Operating Term to identify ways in which
it can, or could potentially, reduce the cost of providing the Services or the carrying
out of the Hospital Functions, as a result of, among other things, improved
technology, and without adversely affecting the Services Specifications and
maintenance of the Facility so that it is Fit for the Intended Purposes ("Cost
Saving").
(b) Project Co may, if it wishes to implement a Cost Saving, propose a Project Co

Modification in accordance with Clause 41.12.
(c) The State may at any time suggest to Project Co a possible Cost Saving and request
that Project Co considers the matter.
(d) Any actual net Cost Savings will be calculated in accordance with the Change
Compensation Principles and will be shared between Project Co and the State, if the
Project Co Modification under Clause 41.12 is implemented in the manner agreed
between them.
41.12 Project Co Modifications

Project Co may request the State to agree to a Project Co Modification. Any such request will
be by a Change Notice.
41.13 State's Determination on Project Co Modification

Within 20 Business Days (or such longer period as the State reasonably requires, given the size
and complexity of the proposed Project Co Modification) after receiving a request from Project
Co in accordance with Clause 41.12, the State will give a written notice to Project Co either:
(a) rejecting the request;
(b) entitled "Modification Order", signed by the relevant State Delegate and consenting
to the request either conditionally or unconditionally; or
(c) requesting further particulars of any matters referred to in the Change Notice
submitted under Clause 41.12 or otherwise relating to the proposed Project Co
Modification.
The State is not bound to exercise its discretion for the benefit of Project Co and Project Co is
not relieved from performing or observing its obligations or from any other liabilities under
this Agreement as a result of the failure of the State to consent to any request by Project Co
under Clause 41.12.
41.14 Project Co Modification consented to by State

If the State issues a Modification Order under Clause 41.13:
(a) Project Co will, subject to complying with any conditions in the Modification
Order, carry out the Project Co Modification;
Legal\104938921.16 229
(b) subject to Clause 41.11(d), Project Co will carry out the Project Co Modification at
its own cost and not be entitled to make any Claim against the State arising out of,
or in any way in connection with, the Project Co Modification; and
(c) the relevant parts of this Agreement, including the Services Specifications and the
Design Requirements, will be varied to reflect the matters set out in the Change
Notice provided by Project Co to the State under Clause 41.12, subject to any
conditions in the Modification Order issued by the State under Clause 41.13.
41.15 Limitation on all Modifications

Project Co acknowledges that the State will not be liable upon any Claim arising out of or in
connection with any Modification, other than for:
(a) the payment of the amounts payable in accordance with the Change Compensation
Principles in respect of a State Modification;
(b) the payment of any costs of preparing a Change Notice determined under
Clause 41.2 in respect of a State Modification;
(c) any rights by virtue of a State Modification being a Compensable Extension Event;
and
(d) the rights to a variation of this Agreement under Clauses 41.5(e), 41.10(c) and
41.14(c).
41.16 Implementation of Modifications after Completion

All State Modifications to the Facility the subject of a Modification Order and implemented
after Stage 1 Final Completion in respect of the Stage 1 Facility or Stage 2 Completion in
respect of the Stage 2 Facility:
(a) (Design, Construction and Commissioning): must be designed, constructed and

commissioned in accordance with:
(i) the drawings and specifications for the Modification prepared by Project
Co, as described in the Modification Order;
(ii) Best Construction Practices;
(iii) all Authorisations required for the Modification;
(iv) all other applicable Laws and Health Policies;
(v) all applicable standards (including the Quality Standards);
(vi) the lawful requirements of Governmental Agencies;
(vii) all conditions in the Modification Order;
(viii) where applicable (as specified in the Modification Order), the Design
Requirements; and
(ix) all other requirements of this Agreement;
(b) (Fit for the Intended Purposes): must be designed and constructed so that:
Legal\104938921.16 230
(i) Project Co provides and will continue to provide the Services to at least
(ii) that part of the Facility comprising the State Modification, as at the date
of the State Modification is completed, is, and remains capable of being
maintained as Fit for the Intended Purposes in accordance with the Laws,
Quality Standards, technology and the then use and intended use of the
Facility as at the date of completion of the State Modification,
as these obligations may have been amended pursuant to Clause 41.5(e), 41.10(c) or
41.14(c);
(c) (Minimal Disruption): must be implemented so as to cause minimal disruption to

the provision of the Services by Project Co and the carrying out of the Hospital
Functions by the Hospital Operator (save to the extent of disruptions or suspension
of obligations agreed by Project Co and the State in consultations prior to the issue
of, and as specified in, the Modification Order);
(d) (Completion): must, where required by the State, be certified as being complete
and ready for occupation by an Independent Reviewer appointed pursuant to
Clause 3.1; and
(e) (Commissioning): must be commissioned in accordance with the commissioning

tests specified in the Modification Order.
41.17 Implementation of Modifications before Completion

All Modifications implemented before Stage 1 Final Completion in respect of the Stage 1
Works and Stage 2 Completion in respect of the Stage 2 Works will form part of the Works
and the Facility and subject to Clauses 41.5(e), 41.10(c) and 41.14(c), all warranties and
obligations of Project Co with respect to the Works, the Facility and the Services will
accordingly apply to those Modifications.
41.18 Updated Construction Documentation

Project Co will provide to the State 3 copies of all final drawings, specifications, models,
samples and calculations used to complete any Modification, promptly following completion
of construction and of all amended versions of the Construction Documentation and as-built
documentation incorporating any State Modification or Project Co Modification.
41.19 Notice of Modification

(a) If any Direction by a State Delegate or the State other than a Modification Order
under Clause 41.5, constitutes or involves a Modification, Project Co must, if it
wishes to make a Claim against the State arising out of, or in any way in connection
with the Direction or Modification:
(i) within 10 Business Days of receiving the Direction and before

commencing work on the subject matter of the Direction, give written
notice to the relevant State Delegate that it considers the Direction
constitutes or involves a Modification;
(ii) within 10 Business Days of giving the notice under paragraph (a)(i) and
before commencing work on the subject matter of the Direction, submit a
written Claim to the State Delegate which must include:
Legal\104938921.16 231
A. detailed particulars concerning the Direction upon which the
Claim is based;
B. the legal basis for the Claim, whether based on a term of this
Agreement or otherwise, and if based on a term of this
Agreement, clearly identifying the specific term;
C. the facts relied upon in support of the Claim in sufficient

detail to permit verification; and
D. details of the amount claimed and how it has been calculated,
and must continue to carry out the Works or provide the Services (as the
case may be) in accordance with this Agreement and all Directions of the
State Delegate, except that Project Co will not be obliged to comply with
the Direction in respect of which notice has been given under this
Clause 41.19 until the 5 Business Day period under paragraph (b) has
expired or unless otherwise directed by the Project Director under
paragraph (b).
(b) Any Claim against the State arising out of, or in any way in connection with, the
Direction will be dealt with pursuant to the preceding provisions of this Clause 41
if:
(i) the Direction is in fact a Modification; and
(ii) the State Delegate does not withdraw or vary the Direction within
5 Business Days of Project Co's notice under paragraph (a)(ii).
(c) If Project Co fails to comply with this Clause 41.19, then to the extent of the failure:
(i) the State will not be liable (to the maximum extent permitted by Law)
upon any Claim by Project Co; and
(ii) Project Co will be absolutely barred from making any Claim against the
State,
arising out of, or in any way in connection with the Modification or the relevant
Direction to which this Clause 41.19 applies.
41.20 Retained Buildings Works

(a) (Unaffected Retained Buildings): The parties acknowledge that:
(i) the Facility will include parts of the Retained Buildings which will not
form part of, or be affected by any Works (the "Unaffected Retained
Buildings") and notwithstanding any other provision of this Agreement,
for the purposes only of achieving Completion, Project Co is not
responsible for and is not liable for any part of the Facility which
comprises the Unaffected Retained Buildings;
(ii) Project Co is to maintain the Unaffected Retained Buildings to a

condition that is no less than the condition they are in as at the Date of
this Agreement;
(iii) the Design Departures Schedule is deemed to include a departure in

respect of the Unaffected Retained Buildings that amends the Design
Legal\104938921.16 232
Requirements in accordance with subparagraph (ii) (the "Retained
Buildings Departures");
(iv) within 12 months following Financial Close, the parties must, acting
reasonably, update the Retained Buildings Departures to specify:
A. all areas of the Unaffected Retained Buildings that are not

compliant with the Design Requirements; and
B. the extent of such non-compliance in order to determine the

standard to which such areas must be maintained during the
Operating Term;
failing which the matters shall be referred for determination in

accordance with Clause 56.
(b) (Obligation for Retained Buildings): Notwithstanding paragraph (a), but subject
to the balance of this Clause 41.20, Project Co must maintain the Retained
Buildings during the Operating Term in accordance with the Services Specifications
and so that the Facility is Fit For the Intended Purpose.
(c) (Obligation for Unaffected Retained Buildings): In respect of the Unaffected

Retained Buildings, Project Co's obligations under Clause 33.2(c) shall be replaced
with "repair and maintain the Facility so that at all times the Facility remains in the
condition it is in as at the Date of this Agreement, determined in accordance with
Clause 41.20(a)".
(d) (Standard for Unaffected Retained Buildings): The parties acknowledge that
during the Operating Term, Project Co will only be required to perform the Services
to the Unaffected Retained Buildings to the standard set out in paragraph (a) and
Project Co will not be required to upgrade the standards of the Unaffected Retained
Buildings to meet the "Fit For the Intended Purposes" test applied in respect of the
rest of the Facility, provided that Project Co will do so insofar as any part of the
Unaffected Retained Buildings form part of the lifecycle replacement or major
maintenance works in the Asset Management Plan and such lifecycle replacement
or major maintenance works do not impose any additional cost risk or liability on
Project Co or any Project Co Associate;
(e) (State Modification): If:
(i) any part of the Retained Buildings that are intended to form part of the
Stage 2 Facility are, as at the date on which Project Co is given control of
the Stage 2 Site, in a condition that is materially worse than the Retained
Buildings were in as at the Date of this Agreement and that condition is
not commensurate with the fair wear and tear that could reasonably be
expected as part of the operation and maintenance of the Retained
Building having regard to:
A. the nature of the work undertaken by the Hospital Operator

and other State Associates in the Retained Buildings;
B. the condition the Retained Buildings were in as at the Date of

this Agreement;
C. the period of time that has elapsed between the Date of this
Agreement and full occupation of the Stage 2 Site by Project
Co;
Legal\104938921.16 233
D. the manner in which the Retained Buildings are to be
incorporated into the Facility and refurbished as part of the
Project; and
E. the carrying out of the Stage 1 Works;
(ii) the Retained Buildings' condition is such that Project Co will have to
undertake additional work to that contemplated by the Design
Requirements in order to achieve Stage 2 Completion or otherwise meet
its obligations under the Services Specifications and this will increase the
capital cost of the Works or the provision of the Services; and
(iii) the Retained Building condition is not due to any acts or omissions of
Project Co or any Project Co Associate,
the State Delegate will either:
(iv) issue a "Modification Price Request" in respect of such additional work in

accordance with Clause 41.1(b); or
(v) agree to amend Project Co's obligations under this Agreement to the
extent necessary to accommodate the condition of the Retained
Buildings.
(f) (Structural Condition): Subject to paragraph (g) and (h), during the Term, Project
Co is not responsible for and is not liable for the structural condition of the Retained
Buildings unless that condition:
(i) exists in any part of the Retained Buildings Works;
(ii) is directly impacted upon by the Works or Retained Buildings Works; or
(iii) is caused by any act or omission of Project Co or any Project Co

Associate.
(g) [not disclosed].
(h) [not disclosed]
42. Refinancing
42.1 Consent to Refinancing
(a) Project Co must not enter into or implement any Refinancing without the prior
written consent of the relevant State Delegate, which will not be unreasonably
withheld and will be given or withheld within the Review Period.
(b) It will be reasonable for the State Delegate to withhold such consent if:
(i) the effect of the Refinancing would be an increase or adverse change in

the profile of the risks or liabilities of the State under any Project
Document without adequate compensation to the State;
(ii) the terms and conditions of the proposed Refinancing are not in
accordance with market practice at the time;
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(iii) the terms and conditions of the proposed Refinancing (taken as a whole)
are materially more onerous or disadvantageous to Project Co than the
terms and conditions under the existing Finance Documents and the State
considers Project Co will be unable to adequately service and repay the
Financial Indebtedness assumed under the Refinancing or that such
Financial Indebtedness will adversely impact on Project Co's ability to
perform its obligations under the Transaction Documents; or
(iv) the Financial Indebtedness assumed under the Refinancing will not be
used solely for the Project.
42.2 Details of Refinancing

(a) Project Co must promptly provide the State Delegate with full details of any
proposed Refinancing, including:
(i) a copy of the proposed financial model relating to it;
(ii) the basis for the assumptions used in the proposed financial model;
(iii) a comparison with any refinancing assumed within the Financial Model;
and
(iv) a certificate in terms acceptable to the State from the auditors of such
financial model.
(b) The financial model must show, amongst other things, the material changes to
Project Co's obligations to its funders and the anticipated Refinancing Gain.
(c) Project Co agrees that the State, before, during or at any time after any Refinancing,
will have unrestricted rights of audit of any financial model and documentation,
including formulae and calculations used in connection with the Refinancing.
42.3 Refinancing documents

(a) Project Co must not execute or amend any document in connection with a
Refinancing (including by amending a Finance Document) without the prior written
consent of the relevant State Delegate which will not be unreasonably withheld if
they are on substantially the same terms disclosed to the State under Clause 42.2.
(b) Project Co must, within 5 Business Days of the execution of any Finance Document
in connection with a Refinancing, deliver to the State a certified true copy of each
amended and amending Finance Document.
(c) Project Co must not execute any Refinancing until the new Financiers have
executed a deed with the State substantially in the form of the Financier Direct
Deed and the existing Financiers have executed any document reasonably requested
by the State Delegate to terminate their rights under the current Financier Direct
Deed.
42.4 Sharing of Refinancing Gain

(a) The State will be entitled to 50% of the benefit of any Refinancing Gain.
(b) The State may, taking into account the nature and timing of the Refinancing Gain,
elect to receive its share of Refinancing Gain as:
Legal\104938921.16 235
(i) a direct payment (to the extent Project Co receives its Refinancing Gain
as a direct payment);
(ii) a reduction in the Service Payments; or
(iii) a combination of the above.
(c) The State and Project Co must negotiate in good faith to agree the basis and method
of calculation of the Refinancing Gain and the manner and timing of payments of
the State's share of the Refinancing Gain.
42.5 Costs Relating to a Refinancing

(a) Project Co must pay the State its reasonable costs incurred in relation to considering
a Refinancing or consenting to a Refinancing.
(b) For the purposes of calculating any Refinancing Gain under this Clause 42, Project
Co may include an estimate of these costs of the State to which the State has agreed
in writing.
43. Change in Law and Change in Policy

43.1 Application to Financial Effects
(a) This Clause applies to Financial Effects which result from a Change in Law or a
Change in Policy.
(b) A net Financial Effect is determined by offsetting adverse Financial Effects (which
increase costs to Project Co) and beneficial Financial Effects (which decrease costs
to Project Co) in the applicable period.
(c) The net Financial Effect of a Change in Law or a Change in Policy will be
compensated or adjusted in the manner decided by the State in accordance with the
Change Compensation Principles.
43.2 Compensation
(a) (Change in Law or Policy not Project specific): If a Change in Law or a Change
in Policy is not a Project Specific Change in Law, the State will compensate Project
Co for 95% of the net adverse Financial Effect of the Change in Law or Change in
Policy. The State will be entitled to the benefit of 95% of the net beneficial
Financial Effect of such Change in Law or Change in Policy.
(b) (Project Specific Changes in Law or Policy): If a Change in Law or a Change in

Policy is a Project Specific Change in Law, the State will compensate Project Co
for 100% of the net adverse Financial Effect of Project Specific Changes in Law.
The State will be entitled to the whole net beneficial Financial Effect of Project
Specific Changes in Law.
43.3 Process for claiming compensation

(a) (Change in Law or Policy not Project specific): Subject to Clause 43.2(a), where
a Change in Law or a Change in Policy is not a Project Specific Change in Law:
(i) (Expenditure more than $1 million): and will necessitate expenditure in

excess of $1 million, Clause 41 will apply for the purposes of calculating
the amount payable and the manner of payment in respect of that
Legal\104938921.16 236
expenditure and all other costs and savings consequential upon that
Change in Law or Change in Policy;
(ii) (Expenditure $1 million or less): and will not necessitate expenditure in

excess of $1 million, Clause 43.4 will apply.
(b) (Project Specific Changes in Law or Policy): Subject to Clause 43.2(b), where a
Project Specific Change in Law will necessitate expenditure, Clause 41 will apply
for the purposes of calculating the amount payable and the manner of payment in
respect of that expenditure and all other costs and savings consequential upon that
Project Specific Change in Law.
(c) (Indexation): The amounts specified above will be Indexed by the CPI Multiplier
Annual (OC).
43.4 Change Notice

If Clause 43.3(a)(ii) applies:
(a) the State Delegates will direct Project Co in a timely and lawful manner whether it
requires Project Co to comply with any such Change in Policy;
(b) Project Co shall comply with the Change in Law or Change in Policy (as directed
under paragraph (a)); and
(c) Project Co will, not earlier than 2 months and not later than 1 month prior to the end
of each year, estimate the Financial Effect of Changes in Law and Changes in
Policy which have occurred in the relevant preceding year calculated in accordance
with Clause 43.2(a) and the Change Compensation Principles, and prepare and
submit that information in a Change Notice to the State, with the exception of any
impact the Change in Law or Change in Policy has on Reviewable Services (other
than Security Services during the first Reviewable Services Term) which will only
be reviewable at the end of the Reviewable Services Term.
43.5 Finalising Estimate

Upon receipt of a Change Notice under Clause 43.4, the State will, within the Review Period
notify Project Co of any matter with which the State does not agree. The State and Project Co
will promptly meet with a view to agreeing on that matter.
43.6 State's Options on Expert Determination

(a) (Options): Within 10 Business Days following any determination by the
Independent Expert to whom any dispute under this Clause 43 has been referred, the
State may elect to:
(i) require Project Co to implement the relevant Change Notice;
(ii) vary any requirements of this Agreement relating to the Works; or
(iii) vary the Services Specification by deleting or changing the scope of a

Service, on not less than 3 months notice to Project Co,
and, in the case of paragraphs (ii) and (iii), the consequences of such variations
must be to ensure the relevant Change in Law or Change in Policy has no effect on
Project Co, other than a Financial Effect. If the State does not make an election
Legal\104938921.16 237
within the 10 Business Days, it will be deemed to have elected to require Project Co
to implement the relevant Change Notice.
(b) (Variation to Works): If the State makes an election under paragraph (a)(ii):
(i) the State must specify whether Project Co is to deliver the Services in
relation to any replacement or alternative works, or to accept
responsibility for meeting the Handback Condition; and
(ii) Project Co must advise the State:
A. what (if any) changes it requires to the requirements of this

Agreement for Completion and to the Handback Condition as
a result of that election;
B. what (if any) delays are or will be caused to achieving

Completion by the relevant Date for Completion, and such
delays will be dealt with under Clause 32, on the basis that the
State's election is a Compensable Extension Event under
paragraph (f) of that definition; and
C. the amount by which the Service Payments should be adjusted

to reflect the variation to the Works required by the State,
and the parties will meet to discuss and agree the changes and
adjustments advised by Project Co. To the extent the matters under this
paragraph (b)(ii) are not agreed they must be determined under the
(c) (Variation to Services Specification): If the State makes an election under

paragraph (a)(iii):
(i) Project Co will grant such access rights as the State reasonably requires
for itself or to the party nominated by the State to perform any Service or
part of a Service deleted or rescoped from the Services Specification; and
(ii) Project Co will advise the State of the amount by which the Service
Payments should be reduced because of deletion of the Service from the
Services Specification or by the change in scope of the Service. If the
State and Project Co cannot agree on the amount of this reduction, it will
be determined under the Accelerated Dispute Resolution Procedures.
43.7 Annual Review of ongoing compensation

(a) (Annual review): Except where Project Co has financed a Change in Law or
Change in Policy that the State decides to compensate or adjust by increasing or
decreasing the Service Payments in accordance with the Change Compensation
Principles, where compensation for a Change in Law or Change in Policy has been
made by an increase or decrease in the Service Payments, the amount of the
compensation will be subject to annual review in accordance with this Clause 43.7.
(b) (Adjustment to Service Payments): To the extent that, on any such review, a re-
assessment of the ongoing net Financial Effect of any Change in Law or Change in
Policy differs from the amount for which compensation was first made through the
Service Payments in accordance with the Change Compensation Principles or the
amount of compensation as adjusted on any prior review and re-assessment under
Legal\104938921.16 238
this Clause 43.7, that adjustment will be made to the Service Payments over the
balance of the Term.
(c) (Time of review): Within 1 month prior to the end of each Contract Year (or at the
same time that Project Co submits a Change Notice to the State in accordance with
Clause 43.7), Project Co must undertake and provide to the State a review, and a re-
assessment of the amount of ongoing net Financial Effect of Changes in Law or
Changes in Policy for which compensation has been made through the Service
Payments over the Term.
(d) (State review and disputes): The State will, within the Review Period, notify
Project Co of any matter within a review and re-assessment of compensation
payable through the Service Payments with which the State does not agree, and any
dispute on whether or not there ought to be reassessment of compensation, or the
amount of any reassessment which has been made through the Service Payments,
will be determined in accordance with the Accelerated Dispute Resolution
Procedures.
43.8 Project Co to comply and absorb

(a) Subject to Clause 43.7, Project Co must comply with all Changes in Law and
Changes in Policy while continuing to comply with its obligations under this
Agreement, except to the extent that Services cannot be provided in the ordinary
course as a necessary and intended consequence of implementing and adopting the
Change in Law or Change in Policy.
(b) Project Co will absorb all parts of a Financial Effect and all other effects of a
Change in Law or Change in Policy which are not compensated fully pursuant to
this Clause 43 (or Clause 41 where applicable under Clause 43.3).
44. Force Majeure

44.1 Notice
If Project Co is of the opinion that a Force Majeure Event has occurred or is likely to occur, it
will promptly advise the State in writing of that occurrence. Project Co will then give the State
a written notice within 5 Business Days after it forms the opinion that the Force Majeure Event
has occurred, which must include full particulars of all relevant matters including:
(a) details of the Force Majeure Event including details of the basis on which Project
Co has formed the opinion that an event does constitute a Force Majeure Event;
(b) details of the obligations affected;
(c) details of the action that Project Co has taken and proposes to take to avoid or
minimise the consequences of the Force Majeure Event;
(d) an estimate of the timing during which Project Co will be unable to carry out the
affected obligations due to the Force Majeure Event;
(e) an estimate of the costs that Project Co would incur to remedy the situation were it
able to do so; and
(f) details of all insurance moneys on which Project Co may be able to rely in making
good any damage caused by the Force Majeure Event.
Legal\104938921.16 239
44.2 Actions to be taken
Project Co must:
(a) promptly after the occurrence of a Force Majeure Event take and continue to take
proper and reasonable steps (including expenditure of money, rescheduling of
manpower and resources and implementing appropriate temporary measures but
excluding, to the extent that Force Majeure Event is Uninsurable, incurring external
or third party costs) to remedy, avoid or minimise the preventing or delaying effect
of the Force Majeure Event on Project Co's performance of its non-financial
obligations under this Agreement; and
(b) after giving a Force Majeure Notice, continue to provide the State with all relevant
information relating to the Force Majeure Event.
44.3 Meeting
The parties will meet within 5 Business Days of service of a Force Majeure Notice to discuss
and agree the consequences of the Force Majeure Event including:
(a) whether the Force Majeure Event will delay the achievement of Stage 1 Final
Completion or Stage 2 Completion and if so by how long and whether a claim for
an extension of time is likely to be made under Clause 32;
(b) how long it is estimated that the Force Majeure Event will continue;
(c) what obligations (if any) will be affected by the Force Majeure Event; and
(d) whether the Force Majeure Event is covered by insurance.
44.4 Suspension of Obligations

The obligations of each party under this Agreement (other than, subject to Clause 44.5,
obligations to pay money) which are affected by the Force Majeure Event will be suspended,
but only to the extent that the Force Majeure Event prevents that party from meeting its
obligations in a timely manner under this Agreement. Any such suspension will immediately
terminate on cessation of the Force Majeure Event or of the consequences of it ceasing to
prevent performance or the time when those consequences should have ceased to prevent
performance if Clause 44.2(a) were observed by Project Co.
44.5 Payments During Force Majeure

(a) (Service Payments) If the Services or any Transitional Services are wholly or
partially unable to be provided by Project Co in accordance with the requirements
of this Agreement by reason of a Force Majeure Event (other than a Utility Services
Interruption):
(i) the Service Payments will be Abated to the extent the Services are not
being supplied to the Services Specifications for that reason (but any
application of the Abatement Regime will not constitute an Event of
Default in these circumstances so long as Project Co is complying with
its obligations under Clause 44.2(a)); and
(ii) the State will continue to pay the Service Payments in respect of any
Services or Transitional Services affected by a Utility Services
Interruption for the period the Services or Transitional Services are not
being supplied to the Services Specifications for that reason, after
Legal\104938921.16 240
deducting amounts representing those recurrent costs of Project Co which
are not being incurred by Project Co during the period because the
obligation to provide those Services or Transitional Services has been
suspended in accordance with Clause 44.4.
(b) (Base Capital cover): If:
(i) Abatement under paragraph (a)(i) results in payments of principal and

interest on Base Capital as identified in the Financial Model not being
fully met from any Quarterly Service Payment; and
(ii) the circumstances giving rise to the Force Majeure Event are at that time
an Uninsurable risk,
then, on request by Project Co, supported by evidence satisfactory to the State to

support its Claim under this paragraph (b), the State will pay the amount by which
any principal and interest payments, being the lesser of:
(iii) the amount of principal and interest on Base Capital identified in the
Financial Model; and
(iv) the amount of principal and interest actually payable on Base Capital
under the Finance Documents,
cannot be paid out of the Quarterly Service Payment from which it ought, under the
Financial Model to have been paid during the period of Abatement under
paragraph (i).
(c) (Dispute): Any dispute as to any amounts payable under this Clause 44.5 are to be
determined under the Accelerated Dispute Resolution Procedures.
44.6 Alternative Arrangements

The State may make its own arrangements for alternate means of providing any of the
Services, the obligations to provide which have been suspended under this Clause 44, whether
from the Site or elsewhere and from any person at no cost to Project Co, and without the State
incurring any Liability to Project Co.
44.7 Force Majeure ceases

(a) When the period of suspension of performance of obligations affected by the Force
Majeure Event ceases in accordance with Clause 44.4, the party affected by the
Force Majeure Event will promptly notify the other party to that effect, and Project
Co will immediately recommence performance of all obligations the subject of the
Force Majeure Notice.
(b) Once:
(i) any necessary repairs to, or reconstruction of, the Facility has been
completed by Project Co in accordance with this Agreement; and
(ii) the effect of the Force Majeure Event has ceased,
the State may no longer exercise its rights under this Clause 44 in respect of that
Force Majeure Event.
Legal\104938921.16 241
44.8 Costs of Force Majeure
Unless otherwise expressly provided in this Agreement, each party will bear its own costs
incurred as a result of the occurrence of a Force Majeure Event.
45. Intervening Events

45.1 Occurrence of Intervening Event
(a) If Project Co believes an Intervening Event has occurred which has prevented or
delayed, or will prevent or delay its performance of its obligations under this
Agreement which are to be performed during the Transitional Period or after the
Operational Commencement Date, it will give the State, within 10 Business Days
after Project Co becomes aware or ought reasonably to have become aware of such
potential or actual prevention or delay, a notice which, if the Intervening Event is
claimed by Project Co to be a Compensable Intervening Event, must be in the form
of, and contain all the information required to be provided in a Change Notice.
(b) Project Co will provide such further information in relation to a Change Notice
given under paragraph (a) as the State reasonably requires. If full particulars of the
additional costs incurred by Project Co as a result of the occurrence of the
Intervening Event are not available as at the date of the Change Notice to the State
under this Clause 45.1, Project Co will issue further Change Notices to the State
containing details of the same as soon as reasonably practicable after such details
become known to Project Co from time to time.
45.2 Relief to Project Co

To the extent that Project Co:
(a) (no breach): is not in breach of its obligations under Clauses 33.9(a), 33.9(b)(iii) or
33.9(b)(iv) and neither Project Co nor any Project Co Associate has, by act or
omission, directly or indirectly caused or contributed to the Intervening Event;
(b) (proper and reasonable steps): has taken and is continuing to take all proper and
reasonable steps:
(i) to minimise the duration of the Intervening Event; and
(ii) to prevent or to minimise the impact of the Intervening Event on its

performance of the Services to the Services Specifications including by
putting in place temporary measures reasonably acceptable to the
Contract Administrator; and
(c) (detailed particulars): gives detailed particulars to the State pursuant to

Clause 45.1 of the Intervening Event and the manner in which and time for which it
has prevented or is likely to prevent Project Co from performing and providing
some or all of the Services to the Services Specifications, or can demonstrate to the
State that the Intervening Event has otherwise caused an Event of Default,
then:
(d) (suspension of obligation): to the extent that the Intervening Event or the
consequences of the Intervening Event prevent Project Co from providing Services
to the Services Specifications or rectifying a Service Failure within the Rectification
Time, if any, in accordance with this Agreement, the obligation to do so will be
suspended, but only for the duration of the Intervening Event or until the
Legal\104938921.16 242
consequences of the Intervening Event cease to prevent performance of that
obligation, or would have ceased to prevent performance had Project Co continued
to comply with paragraph (b);
(e) (service payments): notwithstanding that Services affected by the Intervening

Event are suspended or are being provided by the State, the State will continue to
pay the Service Payments in respect of any Services affected by the Intervening
Event for the period of suspension under paragraph (d) after deducting amounts
representing those recurrent costs of Project Co which are not in fact incurred by
Project Co during the period, because the obligation to provide those Services has
been suspended or those Services are being provided by the State under this
Clause 45;
(f) (no breach): during the period of suspension under paragraph (d), the failure to
perform the obligations of Project Co which are so suspended will not be a breach
of this Agreement by Project Co or an Event of Default; and
(g) (Reimbursement): to the extent that an Intervening Event to which this Clause
applies directly gives rise to any Claim or Liability against Project Co or any
Subcontractor in respect of any personal injury to or death of any person, the State
must reimburse to Project Co that part of the amount properly paid by it in respect
of such Claim or Liability which is properly attributable to the occurrence of the
relevant Intervening Event (after taking into account any insurance proceeds
received by Project Co in respect of the Claim or Liability). The amount will be
included in the Invoice issued immediately following the amount payable by the
State being due,
but nothing in this Clause 45.2 entitles Project Co to any relief from its obligations under this
Agreement which are not affected by the Intervening Event.
45.3 Rectification of damage

(a) Project Co must, in accordance with the Services Specifications, rectify any damage
which is consequent on the occurrence of any Intervening Event.
(b) If the Intervening Event is also a Compensable Intervening Event or an Intervening

Event falling within paragraph (b) of that definition, the costs of rectifying any such
damage will be payable by the State in accordance with Clause 45.4.
45.4 Compensable Intervening Events

In the circumstances in which relief is given to Project Co under Clause 45.2, where the
Intervening Event is also a Compensable Intervening Event:
(a) the State will pay all reasonable additional costs of Project Co, reasonable
compensation for loss of revenue and reasonable costs of rectifying damage (of the
types and for which sufficient details are given under Clause 45.1), calculated in
accordance with the Change Compensation Principles, less any insurance proceeds
paid (net of any deductibles paid by Project Co) or payable to Project Co for loss or
damage suffered or incurred because of that Intervening Event, provided that the
Intervening Event:
(i) does not arise out of or in connection with an Emergency except to the
extent that such Emergency was itself caused by the Intervening Event;
and
Legal\104938921.16 243
(ii) Project Co has complied and continues to comply with Clause 45.2(b)
including by minimising the impact of the Intervening Event on its costs
resulting from the Intervening Event; and
(b) Project Co will not be entitled to make any other Claim against the State arising out
of or in connection with the Intervening Event other than a Claim:
(i) under Clause 45.2 or 45.3; or
(ii) for reasonable additional costs and compensation under paragraph (a) .
45.5 Payment for Compensable Intervening Events

The reasonable additional costs of and compensation to Project Co under Clause 45.4 will be
payable by the State in accordance with the Change Compensation Principles.
45.6 Alternative Arrangements

The State may make it own arrangements for alternate means of providing any of the Services,
the obligations to provide which have been suspended under this Clause 45, whether from the
Site or elsewhere and from any person at no cost to Project Co, and without the State incurring
any Liability to Project Co.
45.7 Cessation of Intervening Event

Project Co must notify the State immediately after it ceases to be prevented from performing
any of its obligations under this Agreement as a result of an Intervening Event.
45.8 Emergency Step-In

The rights of Project Co to suspension of obligations by reason of an Intervening Event under
this Clause 45 do not affect the rights of the State under this Agreement in an Emergency.
45.9 Disputes
Any disputes about the calculation of costs and compensation under Clause 45.4 may be
referred by either party for resolution under the Accelerated Dispute Resolution Procedures.
45.10 Claims barred

If Project Co fails to comply with Clause 45.1, then:
(a) the State will not be liable (to the fullest extent permitted by Law) upon any Claim
by Project Co; and
(b) Project Co will be absolutely barred from making any Claim against the State,
arising out of, or in any way in connection with, the Intervening Event to which this Clause 45
applies.
Legal\104938921.16 244
PART 5 PROVISIONS OF GENERAL APPLICATION
46. General Indemnities

46.1 Indemnity
To the maximum extent permitted by Law, Project Co indemnifies and will keep indemnified
on demand the State, any State Employees, the Hospital Operator and any Hospital Employees
(including any natural persons specifically engaged as consultants by the State or the Hospital
Operator for the purpose of the Project) and in respect of paragraph (a) only, any other State
Associates (each an "Indemnified Person") from and against all Claims or Liabilities which
an Indemnified Person suffers, incurs or becomes liable for (notwithstanding that any such
Claims or Liabilities have resulted from any act or thing which Project Co is authorised or
obliged to do under the Project Documents or that any time, waiver or other indulgence has
been given to Project Co in respect of any of its obligations under the Project Documents) in
respect of:
(a) (third party liability): the death of, or injury to, any person, or the loss of, or
damage to, any property (including, to the extent that such loss is not Uninsurable,
loss of use of property which has not been specifically damaged or destroyed) and
(to the extent that economic loss is required to be covered in any insurance policy
held by Project Co or a Subcontractor in compliance with this Agreement)
reasonably foreseeable economic loss incurred directly as a result of such property
damage, to the extent it is:
(i) caused or contributed to by:
A. the use or occupation of the Facility, the Site or the Existing

Site by Project Co or any Project Co Associate; or
B. any circumstance, condition or activity or other cause on the

Facility, the Site or the Existing Site which arises from the use
or occupation of the Facility, the Site or the Existing Site by
Project Co or any Project Co Associate (but not where a
Claim or Liability results from Contamination of the type
described in Clause 7.1 and is not caused or contributed to by
the act, omission, default or negligence of Project Co or any
Project Co Associate); or
(ii) sustained in connection with or incidental to:
A. the maintenance of the Facility or the implementation of the

Works; or
B. the provision of the Services at the Facility,
to the extent caused or contributed to by the act, omission, default or

negligence of Project Co or any Project Co Associates;
(b) (breach): subject to Clauses 26.6, 29.7, 35.6, 40.2 and 48.2, any breach of Project
Co's obligations under any of the Project Documents to which the State is a party,
except to the extent that any such Claim or Liability is a consequence of:
(c) (fraud): a fraudulent, negligent, unlawful or wilful act or omission of the State or a
State Associate;
Legal\104938921.16 245
(d) (breach): any breach by the State of a Project Document to which the State is a
party;
(e) (Force Majeure): a Force Majeure Event, Compensable Extension Event or

Intervening Event or other risk accepted by the State by an express provision of any
Project Document;
(f) (Hospital Functions): delivery of the Hospital Functions, except to the extent the
Claim or Liability is caused or contributed to by Project Co, including by a failure
to provide the Services in accordance with the Services Specifications; or
(g) (Contamination): contamination for which Project Co is not responsible under

Clause 7.3 except to the extent the Claim or Liability is caused or contributed to by
Project Co's failure to remediate clean-up and decontaminate that Contamination in
46.2 Third Party Claim under Indemnity

The State will, if requested by Project Co, in respect of a Claim by a third party for which
Project Co indemnifies the State under Clause 46.1:
(a) to the extent that the State's insurers in relation to such a Claim agree, but subject to
paragraph (b), do all things reasonably required by Project Co in negotiating,
defending or otherwise taking action or proceedings in respect of that Claim;
(b) where the Claim is brought only against the State and the State does not join Project
Co in the proceedings, then in respect of that part of the proceedings which relate to
that Claim, will do all things reasonably required by Project Co in defending the
proceedings; and
(c) not settle that Claim with the claimant without Project Co's involvement in and
agreement to any such settlement,
and each party will, in negotiating, defending or otherwise taking actions or proceedings in
respect of a Claim to which this Clause applies, so far as is reasonably practicable and
possible, diligently pursue such course of action. Project Co will pay all costs reasonably
incurred by the State in negotiating, defending or otherwise taking such actions or proceedings.
46.3 Release of State

(a) Except to the extent that a Project Document expressly provides to the contrary,
Project Co releases, to the maximum extent permitted by Law, each Indemnified
Person from all Claims and Liabilities resulting from any accident, damage, death
or injury arising from the use or occupation by Project Co or any Project Co
Associate of the Existing Site or the Facility.
(b) The release under paragraph (a) is absolute, except to the extent that the accident,
damage, death or injury is a direct consequence of a fraudulent, negligent, unlawful
or wilful act or omission of each Indemnified Person, or breach by the State of any
Project Document or a risk accepted by the State by an express provision of any
Project Document.
46.4 Terms of Indemnities

Each indemnity in this Agreement is a continuing obligation separate and independent from
the other obligations of the party and survives termination of this Agreement.
Legal\104938921.16 246
46.5 State Holds Benefit on Trust
The State holds the benefit of each indemnity and release in this Agreement for itself and on
trust for the State Associates to the extent that such indemnity or release is expressly stated to
be for the benefit of those State Associates.
46.6 Liability for Indirect or Consequential Loss

Despite any other provision of this Agreement, neither the State nor any of the State's
Associates has any Liability to Project Co, nor will Project Co be entitled to make any Claim,
in respect to any Indirect or Consequential Loss incurred or sustained by Project Co as a result
of any act or omission of the State (whether negligent or otherwise) or as a result of a breach of
the Project Documents by the State.
Subject to Clauses 26.6, 40.2(a) 46.1(a) and Schedule 14, neither Project Co nor any Project
Co Associate has any Liability to the State or any State Associate in respect of any Indirect or
Consequential Loss incurred or sustained by the State or any State Associate as a result of any
act or omission of Project Co (whether negligent or otherwise) or as a result of a breach of the
Project Documents by Project Co.
47. Assumption of Risk

47.1 Generally
Without prejudice to the generality of Clause 46 of this Agreement (and subject only to any
responsibility or risk expressly assumed by the State under this Agreement and to any relief or
other entitlement available to Project Co pursuant to the express terms of this Agreement) the
following are the responsibility of, at the cost of and at the sole risk of Project Co:
(a) the Site and the Site Conditions;
(b) the Design Development Process and the design and construction of the Facility;
(c) the Stage 1 Works and the Stage 2 Works;
(d) the relocation from the Existing Facility and the performance of the Transitional
Activities;
(e) the delivery of the Facility on Termination in a condition which meets the
Handback Condition;
(f) the obtaining of all Authorisations required for carrying out the Project in
accordance with this Agreement;
(g) compliance with all Laws, all Health Policies and all Quality Standards in relation
to the Project;
(h) the provision of the Services to the Services Specifications; and
(i) industrial relations and industrial action.
47.2 Performance at Project Co's Expense

(a) Whenever Project Co is obliged or required under any Project Document to do or
effect any thing, then it will, unless that Project Document otherwise provides, be at
the risk, cost and expense of Project Co.
Legal\104938921.16 247
(b) Unless expressly provided to the contrary in this Agreement, Project Co accepts the
risk that the actual cost of the Project (including inflation, currency fluctuations,
cost increases and rates of interest) is greater than the cost estimated by Project Co
and allowed for by Project Co in the Service Payments.
47.3 Onus of Proof

Whenever, in respect of the same subject matter, (whether referred to in Clause 46, this
Clause 47 or otherwise in the Project Documents):
(a) Project Co expressly under this Agreement:
(i) is obliged or required to do or effect any specific thing; or
(ii) accepts any specific responsibility or risk; and
(b) the State expressly under this Agreement:
(i) is obliged or required to do or effect the same thing; or
(ii) accepts the same responsibility or the same risk,
Project Co will, in respect of that subject matter:
(c) bear all that responsibility and all that risk; and
(d) be required to do and effect (and continue doing and effecting) all things that are its
responsibility at its cost and expense,
unless and until:
(e) Project Co has given the State a written notice setting out detailed particulars of:
(i) the provisions of this Agreement under which the State expressly
assumes the relevant responsibility and risk in respect of the subject
matter concerned;
(ii) the facts giving rise to the crystallisation of the responsibility or risk on
the State; and
(iii) what Project Co suggests (if anything) the State should do to address the
crystallisation of the responsibility or risk; and
(f) either:
(i) the State has given Project Co a notice in writing agreeing with Project
Co's notice; or
(ii) the Dispute has been determined in accordance with the Dispute
Resolution Procedures.
48. Insurance Policies

48.1 Insurances During the Works
Before commencing the Works, Project Co will, at its own cost, procure and maintain or cause
to be procured and maintained, each of the insurances described in Schedule 8, upon the
minimum terms specified in the Schedule for that insurance and, to the extent not so specified,
Legal\104938921.16 248
upon terms no less favourable than a reasonable, commercially prudent project manager would
obtain in respect of a project of this nature, in light of all relevant circumstances including but
not limited to Project Co's obligations under this Agreement. These insurances must be
maintained throughout the prescribed period, as the responsibility of Project Co.
48.2 Insurances for the Facility

Before commencement of the Operating Term Project Co will, at its cost except as provided in
Schedule 10 in respect of the Industrial Special Risks (being the "ISR Insurances") and Public
And Products Liability insurances (being the "PL Insurances"), procure and maintain or cause
to be procured and maintained the insurances set out in Schedule 9, from the Operational
Commencement Date and throughout the Operating Term. These insurances shall also be in
accordance with the minimum terms prescribed in that Schedule for each of the policies
concerned, and otherwise upon such terms as a reasonable and commercially prudent
concessionaire and operator of the Facility would obtain, in light of all relevant considerations
including but not limited to its obligations under this Agreement.
48.3 General Provisions relating to Insurance

(a) In addition to the specific requirements set out in the remainder of this Clause 48,
Project Co will procure, maintain, manage and renew or cause to be procured,
maintained, managed and renewed all the insurances prescribed by this Agreement
in a prudent and businesslike manner, and shall take all such measures and
precautions as are reasonably necessary to protect and preserve its own rights and
entitlements to claim, and the rights and entitlements of State and/or any other
persons whose interests are insured under the policies or to whom their benefit
extends.
(b) If the State at any time reasonably requires Project Co, with reference to the
obligation of Project Co under paragraph (a), to:
(i) arrange insurance against a risk not specifically provided for or

contemplated under Schedule 8 or Schedule 9; or
(ii) increase the extent of, or change the terms of, an existing insurance in
relation to a risk from that set out in Schedule 8 or Schedule 9,
it may notify Project Co in writing and request that Project Co give effect to its
requirements.
(c) Project Co must promptly inform the State of the amount of any additional premium
payable in giving effect to the requirement of the State under paragraph (b) before it
implements the requirement, and the State will advise Project Co whether it still
requires Project Co to give effect to that requirement.
(d) The cost of any additional premiums paid on any additional, increased or varied
insurances required by the State under paragraph (b) will be met by the State,
through increasing the Service Payments in accordance with the Change
48.4 Payment of Premiums

Project Co will ensure payment when due of all premiums, commissions, stamp duties,
charges, Taxes and other expenses necessary for effecting and maintaining in force each such
Insurance Policy, and will then be entitled to reimbursement from the State of the amount of
the premiums for the ISR Insurances and PL Insurances that the State must bear pursuant to
Schedule 10.
Legal\104938921.16 249
48.5 Insurers
Project Co will ensure that each of the Insurance Policies specified in Schedules 8 and 9 are
taken out with reputable insurers approved by the State (which approval will not unreasonably
be withheld) and having a Moody's Standard and Poors or comparable agency claim payment
security rating of A minus or equivalent.
48.6 Information
(a) Project Co will upon request arrange for delivery to the State of certificates of
currency in respect of each Insurance Policy and shall provide a copy of any Policy
under which the State may have an entitlement to claim directly upon the insurance,
where the State reasonably requires this in order to determine whether such an
entitlement has arisen and for the purpose of pursuing it provided, however, that the
State shall take all reasonably practicable measures to preserve commercial
confidentiality.
(b) Project Co will every 12 months provide to the State a report as to each Insurance
Policy (as at the date of the report) and claims and other material events with
respect to each Insurance Policy during the previous 12 months.
(c) Project Co will notify the State immediately upon the occurrence of an event which
would or might entitle Project Co to make a claim under any Insurance Policy and
shall promptly take all necessary steps to ensure that its rights, and the rights of any
other persons to whom the benefit of the Policy may extend in respect of that claim,
are fully preserved. In relation to claims or circumstances which may give rise to
claims under Professional Indemnity insurance policies, and which therefore have
the potential to result in a reduction of the available aggregate limits under such
policies, it is sufficient for Project Co to inform the State of the existence of such
claims or circumstances and of the amount by which the relevant Insurance Policy's
aggregate limit available to the Project may be reduced, without providing details of
the circumstances.
48.7 No Prejudicial Action

Project Co will:
(a) not knowingly do anything or permit anything to be done which may prejudice any
Insurance Policy or omit to do anything where such omission may prejudice any
Insurance Policy;
(b) notify the State of any fact or circumstance or change in circumstances which may
prejudice any Insurance Policy;
(c) provide any information requested by the insurer in relation to any Insurance
Policy;
(d) notify the relevant insurer of any Modification to the Facility which increases the
value of the Facility; and
(e) comply at all times with the terms and conditions of each Insurance Policy
including, without limitation, the provisions relating to disclosure, notification and
claims co-operation.
Legal\104938921.16 250
48.8 Terms of Policies
Subject to any specific provisions to the contrary in Schedules 8 or 9, Project Co will ensure
that each of the Insurance Policies referred to in Schedules 8 and 9 contains terms, where
relevant and to the extent legally permissible, to the effect that:
(a) (State insured under liability insurance): where insurance against liabilities is
provided, the benefit of the Policy extends to the State as principal, and the State
Associates, in respect of any liabilities which the State or its Associates may incur
arising out of or in connection with the Project, the Facility and the provision of
Services throughout the Operating Term, to the extent that such liability is within
the indemnity provided by Project Co to the State and State Associates under
Clause 46.1(a) of this Agreement;
(b) (payment of proceeds): in relation to Insurance Policies providing indemnity in

respect of loss of or damage to property, whether during the period of the Works or
the Operating Term, Project Co is named as loss payee in respect of any claim
under the material damage section of the Policy. The proceeds of any such material
damage claim under such a Policy are to be paid into an account in the joint names
of Project Co and the State and applied in accordance with the terms of this
Agreement;
(c) (insurer's obligations): the Insurer:
(i) will not impute to any insured party any knowledge or intention or a state
of mind possessed or allegedly possessed by any other insured party;
(ii) in the case of contract works insurances, acknowledges that the interests
of the named insured and of the other persons to whom the benefit of the
Insurance Policies extend are in the entire assets and undertaking of the
Project and the Facility and waives any rights of subrogation which it
may have against any insured party; and
(iii) in the case of liability insurances, agrees to treat each insured as a

separate insured party as though a separate contract of insurance had been
entered into with each of the insured parties, without increasing the
number of deductibles or the overall limit of indemnity;
(d) (Insurance Contracts Act): no reduction in limits or coverage affecting the Project
or the Facility will be made in any such policy during the period of insurance,
except under the circumstances and to the extent permitted by the Insurance
Contracts Act 1984 (Cth) and with not less than 30 days prior notification to the
State;
(e) (deductible): the amount of the deductible under each Insurance Policy will be
reasonable and appropriate for a prudent commercial enterprise engaged in
operations similar to or reasonably comparable with the Project and the Facility and
having regard to the obligations and responsibilities undertaken by virtue of this
Agreement, provided, however, that Project Co may elect to carry an annual
aggregate deductible of an amount acceptable to the State under any of the
Insurance Policies, to the extent that its financing arrangements so permit;
(f) (Insureds): in the case of the material damage insurances and the liability
insurances referred to in Schedules 8 and 9, the Insurance Policies shall include
where expressly stipulated in Schedule 8 or 9 (as the case may be) as insured
Project Co itself, the State, the State Delegates, the State Associates, the Builder,
the Facility Management Subcontractor and all Subcontractors engaged by Project
Legal\104938921.16 251
Co, for their respective rights, interests and obligations arising under or in
connection with this Agreement, the Project and the operation of the Facility, to the
extent legally possible; and
(g) (proper account of Project): the insurances take proper account of the nature and
objectives of the Project and the Facility, the responsibilities and entitlements of the
various insureds under or in connection with this Agreement and are on terms
otherwise acceptable to the State, whose acceptance will not unreasonably be
withheld.
48.9 Remedy of Default

In the event of any default by Project Co in obtaining or maintaining an Insurance Policy in
accordance with this Clause 48 or if any Insurance Policy becomes void or voidable, the State
may (but is not obliged to) procure or maintain that Insurance Policy at the cost of Project Co.
48.10 Enforcement
Project Co and the State must do all things reasonably required by each other or any other
person in whose name an insurance policy is effected and maintained and provide all
documents, evidence and information necessary to assist the other or other person (as the case
may be) to claim, and collect or recover any moneys due or to become due under or in respect
of any Insurance Policy.
48.11 Cancellation and Change

(a) Without prejudice to the requirements of this Clause 48, Project Co will not cause
or take any steps to bring about the lapse, cancellation, material change or reduction
of any Insurance Policy.
(b) Without limiting its obligations under this Clause 48, Project Co will immediately
notify the State of any lapse, cancellation, material change or reduction of any
Insurance Policy and will provide to the State promptly upon receipt a copy of all
notices it receives from any insurer relating to any proposed lapse, cancellation,
material change or reduction of any Insurance Policy.
48.12 Use of Insurance Proceeds to Repair

(a) Subject to Clause 49 in the case of a Casualty Occurrence, upon settlement of a
material damage claim under the construction risks or ISR Insurances referred to in
Schedules 8 or 9 respectively, relating to loss of or damage to any part of the Works
or the Facility, the money received from the insurance will be applied to the
reinstatement of the loss of or damage to the Works or the Facility (as the case may
be).
(b) Subject to paragraph (d), to the extent that the proceeds of any insurances referred
to in paragraph (a) are insufficient to reinstate the loss or damage then, subject to
Clause 49 in the case of a Casualty Occurrence, Project Co will fund the deficit.
(c) If:
(i) the proceeds of any insurances referred to in paragraph (a) are paid into a
proceeds account in the joint names of Project Co and the State, as
required by the State (and, to the extent required by the Finance
Documents, the Security Trustee); and
Legal\104938921.16 252
(ii) the proceeds have discharged the purpose required in accordance with
this Agreement and the relevant Insurance Policy,
then the balance of the proceeds will be payable to Project Co, subject to any right
of set off which the State may have (whether under this Agreement or otherwise).
(d) Project Co will not be required to fund any repair, rebuilding or reinstatement costs
in accordance with paragraph (b) to the extent any Insurance Policy is prejudiced
due to any breach of a term of this Agreement on the part of the State or any State
Associate.
48.13 Uninsurable risks

(a) (No Obligation if Uninsurable): Nothing in this Clause 48 will oblige Project Co
to take out or maintain insurance in respect of a risk which is agreed or determined
under paragraph (b) to be Uninsurable, for so long as it remains Uninsurable.
(b) (Consult on Alternative Action): If any risk required to be insured against

pursuant to this Clause 48 is or becomes or is likely to become Uninsurable then:
(i) Project Co must notify the State within 5 Business Days of becoming
aware that the risk has or is likely to become Uninsurable and the State
agrees to meet with Project Co within 5 Business Days after receipt of
Project Co's notice to discuss the issue, including whether the risk is in
fact Uninsurable; and
(ii) if both parties agree (or if not, it is determined pursuant to the Dispute
Resolution Procedures), or if the State advises Project Co pursuant to
paragraph (d), that a risk is Uninsurable, the parties must meet further to
discuss the means by which the risk should be managed, including:
A. consideration of the issue of self-insurance by either party;
B. if, though Uninsurable, it is still possible to insure the risk by

paying high premiums, taking out that insurance cover, and
passing the premium charges through to the State under the
Service Payments from the date the insurance cover is taken
out; or
C. assigning some other allocation of responsibility to the risk.
(c) (No Agreement Reached): If a risk is agreed or determined under paragraph (b) to
be Uninsurable and the requirements of paragraph (b) are otherwise satisfied, but
the parties cannot agree as to how to manage the risk, then subject to paragraph (b):
(i) this Agreement will continue but the Service Payments will be adjusted
each year to deduct an amount equal to the premium that was payable by
Project Co for insurance of such a risk immediately prior to such risk
becoming Uninsurable (but will be increased to reflect the premium
payable should the risk cease to be Uninsurable and Project Co take out
insurance to cover that risk); and
(ii) on the occurrence of the risk, the State must (at the State's option) either:
A. indemnify Project Co for the loss or damage suffered or

incurred by Project Co to the extent such loss or damage arose
from the occurrence of that risk, up to an amount equal to the
Legal\104938921.16 253
insurance proceeds that would have been payable had the
relevant insurance continued to be available, or, if the
insurance had never been available the amount equal to the
insurance proceeds which would have been received should
that risk have been insurable; or
B. terminate this Agreement, in which case a Force Majeure

Termination Event will be deemed to have occurred, and the
State will pay Project Co an amount equal to the Force
Majeure Termination Payment,
and will advise Project Co within the Review Period of its election.
(d) (State Considers Uninsurable): The State may advise Project Co if it, acting
reasonably, considers insurance of a risk to be so uneconomic as to make the risk
Uninsurable and it requires consultation under paragraph (b) on the means to
manage that risk.
(e) (Project Co periodic review): Project Co must be vigilant in reviewing the

insurance market generally, to ascertain whether an Uninsurable risk has become
insurable, and in any event must require its insurance brokers to test the market and
determine whether, and if so what, insurance terms as to both premium and
coverage are available in respect of that risk, from insurers rated A minus or better
in accordance with Clause 48.5, at intervals of not more than 12 months. If upon
such review it is found that insurance in respect of the risk has become available,
upon such terms as would be acceptable to a reasonable commercial enterprise in
Project Co's position, then Project Co will promptly procure the insurance in respect
of that risk in accordance with the other provisions of this Clause 48.
(f) (Deemed Uninsurability): for the purpose of Clause 49.6 and this Clause 48.13,
and for no other purpose, the parties agree that the risks described in paragraphs (b)
(other than as it relates to an act of terrorism) and (d) of the definition of Force
Majeure Event are Uninsurable.
49. Casualty Occurrences

49.1 State rights on a Casualty Occurrence
(a) If a Casualty Occurrence occurs:
(i) the State, its nominees (or any of them) may take all such steps as the
State considers necessary or appropriate to safeguard the operation of the
Facility and Hospital Users and to extinguish or mitigate the threat caused
by the Casualty Occurrence; and
(ii) Project Co will immediately grant access to those parts of the Site and the
Facility occupied by Project Co, to the State and any State Associates or
other persons nominated by the State.
(b) If a Casualty Occurrence occurs:
(i) at any time, Project Co must immediately notify the State of its
occurrence; or
(ii) after Stage 1 Final Completion, if possible, the State will make a
reasonable attempt to notify Project Co of the Casualty Occurrence and
Legal\104938921.16 254
the possibility of its entry to those parts of the Site and the Facility
occupied by Project Co.
(c) The occurrence of a Casualty Occurrence does not affect nor prevent the State from
exercising any of its other rights under this Agreement including its rights in an
Emergency or upon an Event of Default, Intervening Event or a Force Majeure
Event, in which case the relevant terms of this Agreement will also apply.
49.2 Notice
If a Casualty Occurrence occurs, the State will within 60 Business Days of the occurrence (or
such longer period as the State reasonably requires in order to assess the situation and form its
intention), notify Project Co of the State's intention to require Project Co:
(a) to rebuild or repair the Works or the Facility;
(b) to rebuild or repair the Works or the Facility on the basis of different specifications
than those for the original Facility; or
(c) not to rebuild the Works or the Facility,
and at the same time the State will notify Project Co of the State's requirements (if any)
regarding the provision of the Services.
49.3 Meeting
Project Co and the State will meet within 5 Business Days of service of the relevant notice
under Clause 49.2 to determine whether Project Co should rebuild or repair the Works or the
Facility (on the same or different specifications) and a reasonable time in which Project Co
should be allowed to repair or rebuild the Works or the Facility (whether on the same or
different specifications).
49.4 Obligation to Repair or Rebuild

Unless otherwise determined by the State in its absolute discretion, Project Co must repair or
rebuild the Works or the Facility following a Casualty Occurrence, and will do so within the
period agreed under Clause 49.3.
49.5 Cost of Repair or Rebuilding

(a) Where the State makes an election under Clause 49.2(a) or (b):
(i) Project Co will pay for the cost of repairing or rebuilding the Works or
the Facility as a result of a Casualty Occurrence from the proceeds of any
Insurance Policy covering the physical loss, destruction or damage;
(ii) the State will make available to Project Co the proceeds of any Insurance
Policy received by the State for the purpose of rebuilding or repairing the
Works or the Facility (whether on the same or different specifications) as
a result of a Casualty Occurrence; and
(iii) where the Casualty Occurrence was occasioned by an Uninsurable risk to

which Clause 48.13(c)(ii) applies, the State will make available to Project
Co the amount of the indemnity referred to in that Clause.
Legal\104938921.16 255
(b) Any cost of repairing or rebuilding the Works or the Facility not covered by such
Insurance Policies or indemnity will, subject to paragraph (c), be funded by Project
Co.
(c) Where:
(i) the State determines under Clause 49.2 that the Works or the Facility is to
be rebuilt or repaired on the basis of different specifications from the
original Facility; and
(ii) the incremental cost of rebuilding or repair according to such

specifications exceeds the total cost of rebuilding or repair according to
the original specifications:
A. as agreed between the State and Project Co; or
B. if the parties cannot agree, as determined in accordance with

the Accelerated Dispute Resolution Procedures,
having regard to the Change Compensation Principles,
the State will bear the amount (if any) of the excess either agreed or determined
under subparagraph (ii), to the extent that insurance proceeds are insufficient for
this purpose (other than as a result of the operation of this clause).
(d) Where the rebuilding of the Works or the Facility to the different specifications will
increase or decrease the cost of providing the Services over the remainder of the
Term:
(i) where there is an increase in cost to Project Co, the State will pay the
reasonable increased costs of Project Co; and
(ii) where there is a decrease in cost to Project Co, the State will be entitled
to the benefit of those decreased costs,
in each case agreed by the parties, or failing agreement, as determined by an

Independent Expert pursuant to the Accelerated Dispute Resolution Procedures.
(e) The State will pay the amount of any excess and increased costs under paragraphs
(c) and (d), after allowing for adjustments for any decrease in the cost of provision
of the Services under paragraph (d), in accordance with the Change Compensation
Principles.
49.6 Consequences of not Rebuilding the Facility

If the State directs Project Co not to rebuild the Works or the Facility under Clause 49.2, and
the Casualty Occurrence was caused by:
(a) a Force Majeure Event, or an Uninsurable event to which Clause 48.13(c) applies
(or a deemed Uninsurable event under Clause 48.13(f)), then this Agreement will be
Terminated and this will be deemed to be a Force Majeure Termination Event;
(b) an Event of Default, whether directly or indirectly, then this Agreement will be
terminated and this will be a Default Termination Event; or
(c) neither of the circumstances in paragraphs (a) or (b), then the State will be deemed
to have exercised its rights of Termination for Convenience.
Legal\104938921.16 256
49.7 Effect of Insurance
This Clause 49 applies whether or not the Casualty Occurrence was:
(a) insured in accordance with this Agreement;
(b) required to be insured in accordance with this Agreement but was not so insured; or
(c) Uninsurable.
50. Emergency Events

50.1 State rights in an Emergency
If an Emergency occurs, the State may elect to:
(a) temporarily assume total or partial management and control of the Works or the
provision of the Services;
(b) access those parts of the Site and the Facility occupied by Project Co; and
(c) take such other steps (including suspension of the Works) as in the reasonable
opinion of the State are necessary or desirable to mitigate the threat or event which
caused the Emergency and, at its option, to continue the implementation of the
Works or the provision of the Services as required by this Agreement,
and Project Co will:
(d) grant such access rights as are necessary;
(e) suspend the Works where directed to do so by the State;
(f) assist the State as requested by the State in these circumstances, and ensure that all
Project Co Associates do the same; and
(g) not and will ensure that no Project Co Associates, do anything (by act or omission)
which prejudices or frustrates the State's exercise of its rights under this
Clause 50.1.
50.2 Notice
The State may exercise its rights under Clause 50.1 without prior notice to Project Co but the
State will, if it is reasonably practical to do so, give prior notice and in any event will, as soon
as practical, provide notice to Project Co that it is exercising those rights.
50.3 Suspension of rights and obligations

Upon the State exercising its rights under Clause 50.1, Project Co's rights and obligations
under this Agreement for the period that the State is exercising its rights are suspended to the
extent necessary to permit the State to exercise its rights. No such suspension affects or limits
Clause 50.8.
Legal\104938921.16 257
50.4 Power of Attorney
Project Co irrevocably:
(a) appoints the State, and the State's nominees from time to time, jointly and severally
as Project Co's attorney with full power and authority to exercise the State's rights
under Clause 50.1; and
(b) agrees to ratify and confirm whatever action is taken by its appointed attorney.
50.5 Cease to exercise rights

The State may cease to exercise its rights under Clause 50.1 at any time and will cease to
exercise those rights as soon as the relevant threat or event which caused the Emergency is
averted or overcome or, where it has materialised, its consequences have been mitigated or
otherwise dealt with to the State's reasonable satisfaction. The State will notify Project Co as
soon as practical after the State ceases to exercise its rights under Clause 50.1.
50.6 Recommencement of Service Provision

Upon the State advising Project Co under Clause 50.5 that it has ceased to exercise its rights
under Clause 50.1:
(a) Project Co must immediately recommence performance of its obligations which

were suspended pursuant to Clause 50.4; and
(b) the State will give reasonable assistance to Project Co to ensure that this process of
transition is effected as smoothly as possible.
50.7 Payments during Emergency

(a) (Caused by Project Co): If the Emergency was caused by a failure of Project Co to
provide the Services to the Services Specifications or other breach of this
Agreement by Project Co and that failure or breach was not otherwise expressly
permitted under this Agreement by allowing suspension of obligations or variation
to the Services Specifications, then to the extent that the Emergency was so caused:
(i) the Service Payments will be Abated to the extent the Facility is not
available and the Services are not being provided to the Services
Specifications;
(ii) Project Co must pay to the State any costs incurred by the State in
providing the affected Services which are in excess of the Service
Payments which are Abated pursuant to subparagraph (i) and all such
amounts will be Moneys Owing, and each future Quarterly Service
Payment will be reduced to the extent necessary for the State to recover
those costs in full; and
(iii) to the extent the State is unable to recover its costs under paragraph (ii),
all such amounts will be Moneys Owing, payable by Project Co.
(b) (Not caused by Project Co): In situations of Emergency other than those to which
paragraph (a) applies, the State will continue to pay the Service Payments during
the period it exercises its rights under this Clause 50 notwithstanding that Services
affected by the Emergency are suspended or are being provided by the State, after
deducting amounts representing those recurrent costs of Project Co which are
payable in order to provide the Services affected and which are not in fact incurred
Legal\104938921.16 258
by Project Co during the period, because those Services are suspended or are being
provided by the State under this Clause 50.
50.8 No State Liability or limitation of State rights

(a) the State will not have any Liability to Project Co, and Project Co will not be
entitled to make any Claim, arising out of or in connection with the exercise by the
State of its rights in an Emergency, save for Project Co’s rights in respect of a
Compensable Extension Event;
(b) the exercise of the State's rights in an Emergency does not limit any other right of
the State under this Agreement, including any rights arising pursuant to an Event of
Default;
(c) it will not (by act or omission) do anything which materially prejudices or frustrates
the State's exercise of its rights in an Emergency;
(d) the State is not obliged to remedy or cure any Major Default or Default Termination
Event or to overcome or mitigate any risk or consequences in respect of which the
State exercises its rights in an Emergency.
51. Default, Major Default and Default Termination Events

51.1 Default by Project Co
A Default occurs if there is any event of default or breach of any obligation (other than a Major
Default or a Default Termination Event), by Project Co under any Project Document to which
the State is a party ("Default").
51.2 Notice of Default by State

Without prejudice to any other right which the State may have, under this Agreement or at
Law, if a Default occurs the relevant State Delegate may give Project Co a notice in writing
stating that a Default has occurred and requiring Project Co to remedy the Default within
20 Business Days from the date of that notice ("Default Notice"). Any Default which has not
been remedied within that time will then constitute a Major Default.
51.3 Project Co to notify State

Project Co will immediately advise the relevant State Delegate when it becomes aware of the
occurrence of:
(a) any Major Default;
(b) any event which, with the effluxion of time is likely to become a Major Default; and
(c) any Default Termination Event.
51.4 Major Default Notice

Without prejudice to any other right which the State may have, under this Agreement or at
Law, if a Major Default occurs the relevant State Delegate may give Project Co a notice in
writing ("Major Default Notice") stating that a Major Default has occurred and that Project
Co has 20 Business Days from the date of that notice ("Initial Cure Period") to remedy the
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Major Default, failing which a Default Termination Event will, subject to the following
provisions of this clause, occur.
51.5 Project Co must pursue remedy

Upon receipt of a Major Default Notice, Project Co must promptly:
(a) commence, and continue, to diligently pursue the remedy of; and
(b) submit to the State a sufficiently detailed plan by Project Co to demonstrate that
(subject to Clause 51.6) it will remedy,
the Major Default the subject of the Major Default Notice within the Initial Cure Period.
51.6 Extension of Initial Cure Period

(a) Project Co may, no later than 5 Business Days before the end of the Initial Cure
Period, request the State by notice in writing to extend the Initial Cure Period for
the relevant Major Default. Such request must be accompanied by:
(i) a plan by Project Co to remedy the relevant Major Default which sets out:
A. why an extension of the Initial Cure Period is required;
B. the time required to perform the relevant obligations;
C. a work plan setting out each task to be undertaken, the date by

which each task is to be completed and the additional
resources and manpower (if applicable) to be applied to cure
the Major Default (and that work plan may include a plan to
replace the Subcontractor causing Project Co to be in default);
and
D. any temporary measures being undertaken and the mechanics

of effecting the remedy while continuing to:
1) implement the Works; or
2) operate and to make available the Facility and the

Services,
in accordance with this Agreement ("Cure Plan"); and
(ii) evidence that Project Co has diligently pursued and is continuing

diligently to pursue a cure of the relevant Major Default, but that the
relevant obligation cannot, notwithstanding reasonable diligence, be
performed without the Initial Cure Period being extended.
(b) If Project Co demonstrates the requirements in paragraph (a) to the reasonable

satisfaction of the State, the State will not unreasonably refuse to grant an extension
to the Initial Cure Period for the period reasonably required to implement the Cure
Plan but the extension will only be granted for so long as the requirements of
paragraph (a) continue to be satisfied.
(c) The State may request, and Project Co will provide, any further information
(including a revised or resubmitted Cure Plan described in paragraph (a)), to assist
the State in making its decision to grant or refuse to grant an extension.
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(d) If the State grants an extension to the Initial Cure Period, the Initial Cure Period
together with the extension period will become the "Cure Period", subject always to
the requirements of paragraph (a) continuing to be satisfied.
51.7 Extension of Cure Period

Project Co may, no later than 5 Business Days before expiry of the Cure Period, provide
evidence why, notwithstanding diligent pursuit, it has been unable to remedy the Major
Default in accordance with the Cure Plan to the reasonable satisfaction of the State, and may
request one extension to that Cure Period. If the State is reasonably satisfied with such
evidence and that the requirements of Clause 51.6(a) continue to be satisfied, then it will not
unreasonably refuse to grant that one extension to the Cure Period for such period as the State
considers is reasonably required to implement the Cure Plan (but only for so long as the
requirements of Clause 51.6(a) continue to be satisfied).
51.8 Cure Plan

(a) Project Co will meet with the State whenever reasonably requested by the State
during the Cure Period, as extended (if at all) under Clauses 51.6 and 51.7, to advise
the State of progress in implementing the Cure Plan.
(b) If Project Co is prevented from performing that which it has undertaken to perform
under its Cure Plan because of the occurrence of an Extension Event, Intervening
Event or a Force Majeure Event for which it is entitled to relief under this
Agreement, then the Cure Period will be suspended:
(i) for so long as Project Co is prevented from performance by that

Extension Event, Intervening Event or Force Majeure Event; or
(ii) in respect of damage or destruction, for the period from commencement

of that damage or destruction until the necessary repairs have been
completed.
51.9 Major Default not remedied

Failure to remedy a Major Default by the expiry or earlier termination of the Cure Period will
entitle the State to terminate this Agreement and take any other action described in
Clause 51.12.
51.10 Major Default unable to be remedied

(a) Subject to paragraph 51.10(b), if a Major Default is not capable of being remedied
or cured Project Co must promptly:
(i) notify the State in writing, setting out the reasons why it is incapable of
being remedied or cured; and
(ii) diligently comply with any reasonable requirements of the State to

overcome the consequences of, or compensate the State for, that Major
Default, within the time required in any Major Default Notice or
subsequent notice from the relevant State Delegate,
failure to do which will entitle the State to terminate this Agreement and to take any
other action described in Clause 51.12.
(b) If the State forms the view (acting reasonable) that there are no reasonable
requirements that can be met by Project Co to overcome the consequences of, or
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compensate the State for, the Major Default, the State will be entitled to terminate
this Agreement and take any action described in Clause 51.12.
51.11 Default Termination Event

The State may terminate this Agreement at any time after the occurrence of a Default
Termination Event, and may take such other action as is permitted under this Clause 51 in
respect of that Default Termination Event.
51.12 Actions on Default Termination Event

On the occurrence of a Default Termination Event, the State may elect to do any one or more
of the following:
(a) exercise its rights to remedy or attempt to remedy the Default Termination Event in
accordance with Clause 52;
(b) require Project Co to pay any Moneys Owing on demand, on the election of which
Project Co will immediately on demand by the State pay the amount demanded;
(c) where a right of termination has arisen under Clauses 51.9, 51.10 or 51.11 do any
one or more of the following:
(i) proceed by an appropriate court action to enforce performance of the

applicable provisions of the Project Documents or to recover damages for
the breach;
(ii) terminate this Agreement; or
(iii) require:
A. that any Subcontractor responsible for the relevant Default

Termination Event be replaced by a Subcontractor pursuant to
a Subcontract which in both cases comply with Clause 12.3
and are otherwise reasonably acceptable to the State, within
3 months after notice is given by the State requiring such
replacement; and
B. during that 3 month period, Project Co must diligently pursue

the replacement of the Subcontractor, and implement all
reasonable measures so as to continue to implement the
Works or operate and make available the Facility and the
Services in accordance with this Agreement and in default of
so doing, the State may terminate this Agreement.
51.13 Effect of Remedying

If an Event of Default occurs and is remedied by any person, any rights in respect of that Event
of Default (as the case may be) not exercised prior to its being remedied may not thereafter be
exercised.
51.14 Meaning of Remedy

Where the word "remedy" or any other grammatical form of that word is used in this
Clause 51, it means to remedy or redress the relevant occurrence or overcome its consequences
so that there ceases to be any continuing detrimental effect of that potential or actual Event of
Default.
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51.15 Impact of Dispute Resolution Procedures
If a party to this Agreement requires a Dispute to be resolved in accordance with the Dispute
Resolution Procedures or the Accelerated Dispute Resolution Procedures, or if a Dispute has
been referred to the Dispute Resolution Procedures or the Accelerated Dispute Resolution
Procedures, that does not affect or prevent an Event of Default occurring or a party exercising
its rights with respect to the Event of Default under this Agreement.
52. State's Rights to Remedy Default

52.1 State may remedy Default
(a) The State may:
(i) immediately in the case of an Emergency occasioned by an Event of

Default; or
(ii) at any time after the occurrence of a Default Termination Event,
remedy or attempt to remedy the Event of Default or Default Termination Event (as
the case may be) or mitigate its consequences as if it were Project Co, at the risk
and expense of Project Co (other than for liability for fraudulent, unlawful,
negligent or wilful acts or omissions of the State or a State Associate), but the State
is not obliged to remedy or attempt to remedy or mitigate the consequences of that
Event of Default or Default Termination Event.
(b) For that purpose the State may access all parts of the Facility and the Site occupied
by or licensed or leased to Project Co.
(c) The State will give prior written notice to Project Co of its election to exercise its
rights under this Clause 52.1, except in the case of an Emergency, to which the
provisions of Clause 50.2 will apply.
(d) Subject to Clause 52.5, during the exercise of the State's rights under this
Clause 52.1, Project Co's rights and obligations under this Agreement are suspended
to the extent necessary to exercise those rights.
52.2 Permitted steps

Pursuant to Clause 52.1, the State may do:
(a) all things which Project Co is obliged to do under or in connection with this
Agreement or any other Project Document to which it is a party or any Law, or
things which the State is under any Project Document or any Law authorised or
empowered to do with respect to Project Co; and/or
(b) anything necessary for executing the Works or maintaining or repairing the Facility
and providing the Services in accordance with this Agreement.

Project Co irrevocably:
(a) appoints the State, and the State's nominees from time to time, jointly and severally
as Project Co's attorney with full power and authority to exercise the State's rights
under Clause 52.1; and
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(b) agrees to ratify and confirm whatever action is taken by its appointed attorney.
52.4 Assistance
Project Co will use its best endeavours to assist the State wherever and however reasonably
possible in the exercise of the State's rights under this Clause 52 (including facilitating ongoing
access to any support or other services provided by employees, Subcontractors or third
parties).
52.5 Payments
(a) The Service Payments will be Abated to the extent the Facility is not available and
the Services are not being provided to the Services Specifications during the
exercise by the State of its rights under this Clause 52.
(b) In addition, Project Co must pay to the State any costs incurred by the State in
taking action under Clause 52.2 and providing the affected Services which are in
excess of the Service Payments which are Abated pursuant to paragraph (a) and all
such amounts will be Moneys Owing, and each future Quarterly Service Payment
will be reduced to the extent necessary for the State to recover those costs in full.
(c) To the extent the State is unable to recover its costs under paragraph (b), all such
amounts will be Moneys Owing, payable by Project Co.
52.6 No effect on the rights of the State

The exercise by the State of its rights under this Clause 52 (or the cessation of such exercise)
will not affect any other power of the State or any other right of the State under this
Agreement.
52.7 Cessation
The State may, on 5 Business Days' notice to Project Co, and will, when it has cured the Major
Default or Default Termination Event (as the case may be), cease to exercise its rights under
this Clause 52.
53. Termination
53.1 Termination for Convenience
The State may at any time at its sole discretion terminate this Agreement on giving not less
than 90 days notice in writing to Project Co.
53.2 Other rights to Terminate Early

(a) The State may also terminate this Agreement:
(i) if a Force Majeure Termination Event has occurred and is subsisting; or
(ii) on the occurrence of a Default Termination Event.
(b) Project Co may terminate this Agreement if a Project Co FM Termination Event has
occurred and is subsisting.
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53.3 Delivery of Facility and Improvements and Plant and Equipment
Upon Termination for any reason, Project Co will:
(a) ensure that the Facility and all right, title and interest in the Facility (including all
improvements on the Site and all Plant and Equipment and excluding any Plant and
Equipment that is owned by a Subcontractor) and the Site, to the extent not already
vested in the State, will revert or pass to and vest in the State, free of Security
Interests or any claim by any person;
(b) where Termination occurs prior to Stage 1 Final Completion, deliver up the Facility
(including all improvements on the Site and all Plant and Equipment) to the State in
a state of construction or condition and repair consistent with the obligations
imposed on Project Co under this Agreement having regard to the time and
circumstances of the Termination;
(c) where Termination occurs after Stage 1 Final Completion and before Stage 2
Completion, in relation to:
(i) the Stage 1 Facility deliver up the Stage 1 Facility (including all
improvements on the Site and all Plant and Equipment and excluding any
Plant and Equipment that is owned by a Subcontractor) in the condition
required by the Handback Condition (except to the extent that
Termination occurs as a consequence of a Casualty Occurrence or any
other loss or damage to the Facility, in which case the Facility must be
delivered up in a state of repair and condition consistent with Project Co's
having performed all obligations on its part to be performed up to the
time of Termination to minimise or prevent that loss or damage or to
repair or reinstate the Facility in the circumstances of that Casualty
Occurrence, loss or damage); and
(ii) the Stage 2 Site, deliver up the Stage 2 Site in a state of construction or
condition and repair consistent with the obligations imposed on Project
Co under this Agreement having regard to the time and circumstances of
the Termination; and
(d) where Termination occurs after Stage 2 Final Completion, deliver up the Facility
(including all improvements on the Site and all Plant and Equipment and excluding
any Plant and Equipment that is owned by a Subcontractor) in the condition
required by the Handback Condition (except to the extent that Termination occurs
as a consequence of a Casualty Occurrence or any other loss or damage to the
Facility, in which case the Facility must be delivered up in a state of repair and
condition consistent with Project Co having performed all obligations on its part to
be performed up to the time of Termination to minimise or prevent that loss or
damage or to repair or reinstate the Facility in the circumstances of that Casualty
Occurrence, loss or damage).
53.4 Warranties as to Handback Condition and Contamination

Without limiting any other obligation or liability of Project Co, whether under this Agreement
or otherwise at Law, Project Co:
(a) warrants that, upon delivery up of the Facility in accordance with Clause 53.3:
(i) where Termination occurs after Stage 1 Final Completion, the Stage 1
Facility will be in the condition required by the Handback Condition
Legal\104938921.16 265
(except to the extent that Project Co is relieved of that obligation under
Clause 53.3(c)) for the Stage 1 Facility);
(ii) where Termination occurs after Stage 2 Completion, the Site will be
totally free from all Contamination which Project Co is responsible
pursuant to this Agreement to remedy at the time of delivery up of the
Facility; and
(iii) where Termination occurs after Stage 2 Completion, the Existing Site
will be in a condition which is consistent with the condition required by
the due performance by Project Co of all of its obligations in respect of
the Stage 2 Works having regard to the time of the Termination; and
(b) will, for the purposes of paragraph (a):
(i) take all steps necessary, whether before or after Termination, to ensure
that the warranties in paragraph (a) are:
A. not breached; or
B. if breached, complied with as soon as possible and in any

event in accordance with any reasonable requirements of the
State; and
(ii) provide the State with all documents, reports, certificates or other
information which the State may reasonably require to demonstrate
compliance with the warranties in paragraph (a),
and if it fails to do so, the State may take all such steps and all reasonable costs it
incurs in doing so will be payable by Project Co to the State.
53.5 State's Rights not affected

(a) Termination or the payment of any money on Termination will not in any way
prejudice the State's right to claim and recover damages under a Project Document
or any other damages or money that the State might be entitled to under a Project
Document or at Law.
(b) Without limiting the rights of the State under paragraph (a), neither the State's rights
nor Project Co's obligations in respect of breach of the warranties under Clause 53.4
will be affected or limited by:
(i) the rights of the State to make good the breach of warranties under
Clause 53.4, and to deduct the cost of so doing from the relevant payment
to Project Co on Termination under Clause 53.9, or payments to the State
from the Escrow Account or by demand under any Refurbishment Bond
under Clause 54; or
(ii) the failure by the State to exercise such rights.
53.6 Transfer of Other Assets

Upon Termination, Project Co will deliver to the State originals or certified copies of all
books, records, plans, drawings, specifications and documents relating to the Facility and the
Project, however recorded, as required in the Handover Package and, upon delivery the right,
title and interest of all the items, is transferred to and vests in the State.
Legal\104938921.16 266
53.7 Material contracts and employees
Upon Termination if requested by the State, Project Co will do all or any of the following:
(a) forthwith assign or novate all or any agreements, contracts and Authorisations to
which Project Co is a party (to the extent permitted by the terms of those
agreements, contracts and Authorisations or as otherwise agreed to be assigned or
novated pursuant to each subsisting Direct Deed, Builder Direct Deed or Facility
Management Subcontractor Direct Deed) material to the execution of the Works
and the provision of the Services (including any contracts for the supply of goods or
services to the Facility), to the State or its nominee;
(b) to the extent that any such agreement or contract assigned or novated (other than a
Finance Document) evidences debt obligations outstanding and payable by Project
Co (other than the Finance Documents), Project Co indemnifies the State in respect
of those outstanding debt obligations except to the extent that they have been
assumed by the State or its nominee in accordance with the Builder Direct Deed,
Facility Management Subcontractor Direct Deed or other Direct Deed (in which
case the terms of those documents will apply in respect of such outstanding debt
obligations);
(c) to the extent that a Finance Document assigned or novated evidences debt
obligations outstanding and payable by Project Co, the State agrees to meet all of
those outstanding debt obligations to those creditors on the same terms and
conditions as contained in the relevant Finance Document, and the amount of the
Termination Payment which the State would otherwise be obliged to pay will be
reduced by the amount calculated in accordance with Schedule 6;
(d) at the option of the relevant employee, facilitate the transfer to the State or its
nominee of all employees of Project Co that the State considers are necessary to
provide the Services to whom it offers employment (and Project Co will make
appropriate adjustments and payment to the State or its nominee in respect of all
actual or contingent liability for annual leave, accrued rostered days off, sick leave,
long service leave and all other employee entitlements which are not to be paid out
to the relevant transferring employees at the time of transfer of employment); and
(e) otherwise do all things necessary to assist the State in ensuring the Facility
continues to be capable of carrying on the Hospital Functions and the Services
without interruption.
If there is any dispute between the State and Project Co as to the payments and adjustments to
be made for outstanding debt obligations under paragraph (b) or employee entitlements under
paragraph (d), it will be resolved under the Accelerated Dispute Resolution Procedures.
Project Co must ensure that it is permitted under the terms of any Finance Document to
procure the novation of its debt obligations so that Project Co may satisfy its obligations under
this Clause 53.7.
53.8 Termination and Service Payments

Upon Termination, the State's future obligation to pay the Service Payments will cease.
53.9 Payments for Facility

(a) (Payment): Within 20 Business Days after the later of:
(i) the Termination Date; and
Legal\104938921.16 267
(ii) the date on which the amount of the relevant Termination Payment is
agreed by the State and Project Co or, failing agreement, is determined by
resolution by an Independent Expert,
provided Project Co has delivered up the Facility to the State pursuant to this
Clause 53, vacated the Site, and otherwise satisfied its obligations under Clause 54,
the State must pay, in accordance with the Termination Payment Schedule:
(iii) for Termination for Convenience, the Termination for Convenience

Payment;
(iv) for Termination for a Force Majeure Termination Event or Project Co FM

Termination Event, the Force Majeure Termination Payment; or
(v) for Default Termination, the Default Termination Payment.
(b) (State's rights): If the State is not satisfied that Project Co has satisfied its
obligations referred to in paragraph (a), the State may:
(i) deduct from the relevant Termination Payment an amount that is

reasonably necessary to cover the expected costs of performing those
obligations (including reasonable contingencies); or
(ii) require Project Co to provide a bond to the State pursuant to

paragraph (f).
(c) (Bond): The bond provided to the State must:
(i) be a Performance Bond;
(ii) have a face value of an amount specified by the State (being an amount
which the State would otherwise withhold pursuant to
subparagraph (b)(i); and
(iii) expire one year after the Termination Date.
(d) (Demand on Bond): The State may make a demand on the bond, or deduct from
the relevant Termination Payment the amount of any costs, losses or expenses
incurred or suffered by the State as a consequence of Project Co failing to satisfy its
obligations referred to in paragraph (a). Any surplus after meeting those costs,
losses or expenses, and any amount or bond remaining once those obligations are
satisfied will be returned to Project Co.
(e) (no limitation): Nothing in this Clause 53.9 limits or affects the operation of, or
the State's rights under, Clauses 51 or 52.
(f) (No Claim): Project Co will not be entitled to recover or make any Claim upon the
State for any costs, expenses, loss or damage suffered, sustained or incurred by
Project Co (or any person claiming through Project Co), whether under any Project
Document or at Law, by reason of or as a result of Termination other than for
payment of the relevant amount described in this Clause 53.9.

Project Co irrevocably appoints the State, and the State's nominees from time to time, jointly
and severally as Project Co's attorney with full power and authority to carry out Project Co's
obligations under this Clause 53.
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53.11 Assistance
Project Co will use its best endeavours to assist the State wherever and however reasonably
possible in the exercise of the State's rights under this Clause 53.
54. End of Term Refurbishment Work

54.1 Appointment of Independent Reviewer
No later than 12 months before the Condition Review Date, Project Co and the Contract
Administrator will meet to determine the identity of an independent reviewer to be appointed
jointly by Project Co and the State, in accordance with Clause 3, with the role of assessing:
(a) whether the Facility and the Site, taking into account the works and services
identified in the Asset Management Plan for the following 12 months is and will be
on the Termination Date, in the condition required to satisfy the warranty in
Clause 53.4; and
(b) if not in that condition, the work to be performed and the costs required to be
incurred to place the Facility and the Site in the condition required by Clause 53.4,
and otherwise in taking the steps that it would be necessary for the State to take
under Clause 53.4(b) for breach of warranty under Clause 53.4(a).
54.2 Inspect and Report

The Independent Reviewer must, during that period 12 months prior to the Condition Review
Date for the purposes of assessing the requirements set out in Clauses 54.1(a) and (b), and
may, any time thereafter if requested by the Contract Administrator, inspect the Facility and
the Site, and give to Project Co and the Contract Administrator a written notice ("Outstanding
Matters Notice") specifying the Independent Reviewer's opinion of the works (if any) and the
cost of those works for each year ("Remaining Contract Year") from the date of the review
to the end of the Term, including replacement of any Plant and Equipment, and making
allowance for expected normal breakage and fair wear and tear, in order to bring the Facility to
the condition required by Clause 53.4.
54.3 Disputing Outstanding Matters Notice

If Project Co does not agree with any aspect of the Outstanding Matters Notice, it must give
details of such objections, within 10 Business Days of receipt of that notice, and the parties
agree to confer in good faith with each other and the Independent Reviewer to reach agreement
on the scope and cost of the Final Refurbishment Works.
54.4 Asset Management Plan update

The Asset Management Plan will be amended to include the Final Refurbishment Works, as
set out in the Outstanding Matters Notice or as subsequently agreed between the parties, or
determined under the Accelerated Dispute Resolution Procedures, to be undertaken in each
Quarter of each Remaining Contract Year, but this will not limit in any way the obligations of
Project Co to provide the Services to the Services Specifications for the remainder of the
Operating Term.
Legal\104938921.16 269
54.5 Refurbishment Bond and Escrow Account
If:
(a) the Final Refurbishment Works in any Quarter are not completed to the reasonable
satisfaction of the Independent Reviewer, then the State may establish the Escrow
Account, and retain an amount from the next (and if necessary succeeding)
Quarterly Service Payments equal to 120% of the amount estimated to complete
such works in that Quarter, as determined by the Independent Reviewer (except to
the extent that such amount was already retained in the Escrow Account and not
required by the State to complete any Final Refurbishment Works in any previous
Quarter) and the State will deposit the amount so retained from the Quarterly
Service Payments into the Escrow Account; or
(b) the amount required to be deposited into the Escrow Account under paragraph (a)
exceeds the amount of the Quarterly Service Payment or the Independent Reviewer
forms the opinion that 120% of the cost of the remaining Final Refurbishment
Works is greater than the aggregate of estimated Quarterly Service Payments
payable to the end of the Term, plus the balance of the Escrow Account at the date
of that determination, the State may require Project Co to procure the issue to the
State of a Performance Bond which:
(i) has a face value equal to the amount determined by the Independent
Reviewer to be the shortfall between the amount in the Escrow Account
and the amount of Quarterly Service Payments over the balance of the
Term and the amount equal to 120% of the amount to complete the
relevant Final Refurbishment Works for that Quarter, or over the balance
of the Term (as the case may be); and
(ii) expires one year after the end of the Term.
54.6 Completion of works by State

At the Expiry Date or earlier, pursuant to its rights of step-in under Clause 52, the State may
complete any Final Refurbishment Works which have not been completed by Project Co to the
satisfaction of the Independent Reviewer.
54.7 Payments out of the Escrow Account

(a) Interest earned on money standing to the credit of the Escrow Account will be
deposited in the Escrow Account and Project Co will be entitled, on request, to
receive copies of the statements of account for the Escrow Account.
(b) The State may draw upon the Escrow Account for the following purposes:
(i) to fund the completion of any Final Refurbishment Works in accordance

with Clause 54.6;
(ii) to refund the State's costs incurred in performing any Final

Refurbishment Works in accordance with Clause 54.6;
(iii) if, following a review by the Independent Reviewer, it is determined that

all Final Refurbishment Works which are required to be performed as at
the date of that review have been performed, to pay the amount relevant
to the Final Refurbishment Works to Project Co; and
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(iv) no later than 20 Business Days after completion of all remaining Final
Refurbishment Works, to pay the balance of the Escrow Account to
Project Co,
in the case of subparagraphs (iii) and (iv), after deduction of any amounts payable to the State
under subparagraphs (i) and (ii).
54.8 State's rights to draw on Bonds

The State may make a demand under any Refurbishment Bond to the extent that, at any time,
there are insufficient moneys standing to the credit of the Escrow Account (or there is no
Escrow Account) to make any payment under Clause 54.7(b)(i) and (ii).
54.9 Release of Bonds

The State will return to Project Co all Refurbishment Bonds within 20 Business Days after
completion of all remaining Final Refurbishment Works, unless the State requires to draw on
those Performance Bonds to fund any payment under Clause 54.8.
54.10 Replacement of Escrow Monies by Bonds

(a) Project Co may elect at any time to replace any payment into the Escrow Account
or any part of the balance of the Escrow Account by a further Performance Bond
which:
(i) has a face value which is no less than the amount of the payment or
balance it is to replace; and
(b) The State may at any time direct Project Co to replace the balance of the Escrow
Account with a Performance Bond which:
(i) has a face value which is no less than the balance of the Escrow Account;
and
(c) Once the State has received the Refurbishment Bond required under paragraph (a)
or (b) (as the case may be), it will release the relevant payment or balance to Project
Co.
54.11 Disputes generally

Any dispute in relation to any determination by the Independent Reviewer under this
Clause 54 will be resolved under the Accelerated Dispute Resolution Procedures.
55. Dispute Resolution

55.1 Disputes
If any dispute arises between the parties in respect of any fact, matter or thing arising out of, or
in any way in connection with the Project, the Facility or this Agreement ("Dispute") then the
Dispute will be resolved in accordance with Clauses 55 to 57.
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55.2 Notice of Dispute
If there is a Dispute, then a party may deliver to the other party a Notice of Dispute together
with its submissions in relation to the Dispute. The submissions will set out its contentions
including any relevant legal basis of claim.
55.3 Executive Dispute Resolution

(a) Subject to Clause 56(a) where a Notice of Dispute and submissions have been
delivered under Clause 55.2, the Dispute Panel, will meet and attempt in good faith,
within 5 Business Days of the delivery of the Notice of Dispute under Clause 55.2,
to:
(i) resolve the Dispute; or
(ii) agree that the Dispute be referred to Accelerated Dispute Resolution

pursuant to Clause 56.
(b) If the meeting required by paragraph (a):
(i) does not occur; or
(ii) having occurred fails to resolve the Dispute or agree to the Dispute being
referred to Accelerated Dispute Resolution,
within 10 Business Days of the delivery of the Notice of Dispute, the Dispute shall
be referred to arbitration under Clause 57 save where the Dispute is in respect of a
claim for payment of an amount which is equal to or less than $5 million (as set out
in the Notice of Dispute) in which case, within 10 Business Days of the delivery of
the Notice of Dispute, the Dispute shall be referred to Accelerated Dispute
Resolution under Clause 56.
55.4 Continuation of Obligations

Despite the existence of a Dispute between the parties or the referral of the Dispute for
resolution in accordance with Clauses 56 or 57:
(a) Project Co will continue to execute the Works or perform the Services or perform
its other obligations (as the case may be) under this Agreement; and
(b) each party will otherwise comply with its obligations under this Agreement.
56. Accelerated Dispute Resolution

(a) (Agreement): If this Agreement expressly provides that a Dispute shall be referred
for determination by an Independent Expert or by Accelerated Dispute Resolution
then Clause 55.3 shall not apply and within 5 Business Days of the delivery of the
Notice of Dispute the parties shall agree on an Independent Expert to determine the
Dispute.
(b) (Otherwise agreed): If a Dispute is agreed to be referred to Accelerated Dispute

Resolution under Clause 55.3(a)(ii) then within 5 Business Days of the meeting
where such agreement was reached, the parties shall agree on an Independent
Expert to determine the Dispute.
(c) (value of Dispute): If the Dispute is for an amount less than or equal to $5m (as set
out in the Notice of Dispute) and paragraphs (a) and (b) do not apply to that
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Dispute, within 15 Business Days of the delivery of the Notice of Dispute, the
parties shall agree on an Independent Expert to determine the Dispute.
(d) (fail to agree on Independent Expert): If the parties fail to agree on the
Independent Expert within the 5 Business Days referred to in paragraphs (a) or (b),
then an Independent Expert will be nominated by the Secretary (or the Secretary's
nominee) from the appropriate discipline on the Accelerated Dispute Panel. The
parties may review and update the Accelerated Dispute Panel at any time but not
more than once in every Quarter after the Date of this Agreement.
(e) (tripartite agreement): If the Independent Expert so agreed or nominated does not
execute a tripartite agreement with the parties in substantially the form set out in
Schedule 21 within 10 Business Days of the agreement on the Independent Expert
referred to in paragraph (b) or his/her nomination referred to in paragraph (d), then
the Dispute will be referred to arbitration pursuant to Clause 57.
(f) (referral): Once the Independent Expert has executed an agreement in accordance
with paragraph (e), then the Dispute is referred to that Independent Expert for
determination.
(g) (basis for determination): The Independent Expert will make the determination
based upon:
(i) the submissions provided by the party that issued the Notice of Dispute,
which were delivered with that Notice of Dispute;
(ii) submissions provided by the respondent to the Notice of Dispute, which

unless the Independent Expert extends the time for delivery, such
submissions must be delivered within 5 Business Days of the
Independent Expert signing the tripartite agreement referred to in
paragraph (e); and
(iii) any further information provided by the parties in accordance with this
Clause 56.
(h) (further information): If the Independent Expert decides that further information
is required the Independent Expert may call for further submissions, documents or
information from either or both parties.
(i) (conference): After the Dispute has been referred to him or her, the Independent
Expert may call and conduct a conference, or any number of conferences, as the
Independent Expert sees fit, between the parties but will give the parties reasonable
notice of the matters to be addressed at any such conference.
(j) (representation): The parties may be legally represented at any such conference.
(k) (privacy): All conferences will be held in private except to the extent that
representatives of the Builder and the Facility Management Subcontractor will be
permitted to attend on reasonable notice, where the Dispute impacts upon the
Works or the Services (as the case may be).
(l) (Site visit): The Independent Expert may, if he or she considers it necessary, visit
the Site, the Facility or the Existing Site (as the case may be), and the parties will
facilitate the Independent Expert's access to any of those areas.
(m) (timing): The Independent Expert shall make his/her determination in relation to
the Dispute:
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(i) within 10 Business Days of the last of the steps set out in
subparagraphs (b) to (l); or
(ii) within 30 Business Days of receipt of the respondent's submissions in

accordance with paragraph (g)(ii),
whichever is the earliest. If the Independent Expert fails to make a determination

within this time either party may refer the Dispute to arbitration in accordance with
Clause 57.
(n) (not arbitrator): The Independent Expert will act as an expert and not an arbitrator
and may make a decision from his or her own knowledge and expertise.
(o) (final and binding): To the extent permitted by Law, the determination of the
Independent Expert will be final and binding on the parties, unless:
(i) the value of the determination is greater than $15 million; and
(ii) a party gives written notice to the other party within 15 Business Days of
the determination referring the matter to arbitration under Clause 57.
(p) (mistake): Where the Independent Expert's determination contains:
(i) a clerical mistake or an error arising from an accidental slip or omission;
(ii) a material miscalculation of figures or a material mistake in the

description of any person, thing or matter; or
(iii) a defect of form,
the Independent Expert may correct the determination.
(q) (Costs): The cost of the Independent Expert will be borne equally by each of the
parties to the Dispute unless the determination is made against the party who issued
the Notice of Dispute, in which case the Independent Expert may determine that
that party will bear all the Independent Expert's costs in respect of that matter.
(r) (no liability): The Independent Expert will not be liable to the parties arising out
of, or in any way in connection with the expert determination process, except in the
case of fraud.
57. Arbitration
57.1 Arbitrator
(a) All Disputes referred to arbitration in accordance with Clauses 55 and 56 shall be
finally determined in accordance with this Clause 57:
(i) before an arbitrator to be agreed between the parties within 5 Business

Days of the Dispute being referred to arbitration; or
(ii) failing agreement within that period, an arbitrator nominated by the

Australian Centre for International Commercial Arbitration ("ACICA").
(b) The arbitrator will have power to grant all legal, equitable and statutory remedies
and to open up, review and substitute any determination of an Independent Expert
under Clause 56 which has been referred to arbitration.
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57.2 Arbitration
(a) (ACICA Rules): Arbitration pursuant to this Clause 57 will be conducted in
accordance with the rules of ACICA ("ACICA Rules") current at the time of the
reference to arbitration and as otherwise set out in this clause.
(b) (Seat): The seat of the arbitration will be Melbourne in Victoria.
(c) (not court): Nothing in this clause or the ACICA Rules is intended to or shall
modify or vary the rights of appeal contained in the Commercial Arbitration Act
1984 (Vic).
(d) The parties agree that:
(i) they have entered into the arbitration agreement under this Clause 57 for
the purposes of achieving a just, quick and cheap resolution of any
Dispute or difference;
(ii) any arbitration conducted pursuant to this clause will not mimic court
proceedings of the seat of the arbitration and the practices of those courts
will not regulate the conduct of the proceedings before the arbitrator; and
(iii) in conducting the arbitration, the arbitrator must take into account the
matters set out in subparagraphs (i) and (ii).
(e) (evidence in writing): All evidence in chief will be in writing unless otherwise
ordered by the arbitrator.
(f) (Discovery): Discovery will be governed by the substantive and procedural rules
and practices adopted by the Federal Court of Australia at the time of arbitration.
(g) (oral hearing): The oral hearing will be conducted as follows:
(i) the oral hearing will take place in Melbourne, Victoria and all
outstanding issues must be addressed at the oral hearing;
(ii) the date and duration of the oral hearing will be fixed by the arbitrator at
the first preliminary conference. The arbitrator must have regard to the
principles set out in paragraph (d) when determining the duration of the
oral hearing;
(iii) oral evidence in chief at the hearing will be permitted only with the
permission of the arbitrator for good cause;
(iv) the oral hearing will be conducted on a stop clock basis with the effect
that the time available to the parties will be split equally between the
parties so that each party will have the same time to conduct its case
unless, in the opinion of the arbitrator, such a split would breach the rules
of natural justice or is otherwise unfair to one of the parties;
(v) not less than 20 Business Days prior to the date fixed for the oral hearing,
each party will give written notice of those witnesses (both factual and
expert) of the other party that it wishes to attend the hearing for cross
examination; and
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(vi) in exceptional circumstances, the arbitrator may amend the date of
hearing and extend the time for the oral hearing set under
subparagraph (ii).
(h) (experts): Unless otherwise ordered, each party may only rely upon one expert
witness in respect of any recognised area of specialisation.
(i) (costs): Any determinations made by the arbitrator under this clause shall include a
determination relating to the costs of the reference and the award, including the fees
and expenses of the arbitrator.
57.3 Proportionate Liability

Notwithstanding anything else, to the extent permissible by Law, the arbitrator appointed
pursuant to this Clause 57, or the Independent Expert appointed pursuant to Clause 56 (as the
case may be) will have no power to apply or to have regard to the provision of any
proportional liability legislation which might, in the absence of this provision, have applied to
any Dispute referred to arbitration or expert determination pursuant to this Agreement.
58. Financial Model

58.1 Status of the Financial Model
(a) The parties agree that the Financial Model does not necessarily reflect the actual
financial performance, projected performance or budgets of the Project or Project
Co and is purely a model to be used in order to process Model Variation Events and
Termination Payments.
(b) The State is not to be adversely affected by any discrepancies, errors or omissions
in the Financial Model, or by the fact that it may not reflect the actual financial
performance or the projected performance or budgets of the Project or Project Co.
58.2 Varying the Financial Model

The Financial Model will be varied in accordance with this Clause 58.2, on the occurrence of
any of the following events (each a "Model Variation Event"):
(a) following the price review of Reviewable Services under Clause 39;
(b) implementation of a State Modification or Cost Saving under Clause 41;
(c) on a Refinancing, in accordance with Clause 42;
(d) on calculation of the Financial Effect of Changes in Law under Clause 43;
(e) on calculation of the additional costs payable by the State for a Compensable
Intervening Event under Clause 45;
(f) on reinstatement of the Facility following a Casualty Occurrence;
(g) on setting and adjusting the "Base Case Premiums" pursuant to Schedule 10;
(h) on any other adjustment to the Services Payments expressly provided for in this
Agreement; and
(i) on the occurrence of any other event which Project Co and the State agree to be a
Model Variation Event.
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58.3 Principles for Variations to Financial Model
Where a Model Variation Event occurs, the Financial Model will be varied by taking into
account only the amounts determined in accordance with the Change Compensation Principles,
as agreed between the State and Project Co, or as determined in accordance with the
58.4 Procedures for Variations to Financial Model

Any variation to the Financial Model to take account of a Model Variation Event will be made
as follows:
(a) Project Co will propose the variation by notice to the State Delegate at the time
giving full details of the assumptions and calculations used;
(b) the review of the varied Financial Model will be undertaken in accordance with the
Review Procedures, and the State Delegate may:
(i) agree with the variation (in which case the variation will be made); or
(ii) disagree with all or any aspect of the variation;
(c) any dispute about the variation will be referred to an Independent Expert for
resolution under the Accelerated Dispute Resolution Procedures; and
(d) once the variation to the Financial Model is agreed or is determined by the
Independent Expert, Project Co will amend the Financial Model accordingly.
58.5 Access to Information

Project Co will provide the State Delegate at the time and any other Authorised
Representatives of the State with full access to electronic copies of the calculations required to
vary the Financial Model for a Model Variation Event, including reasonable access to any
financial modeller (including Project Co's financial modeller) with ability to access that
information, and relevant passwords or other access information.
58.6 Auditing the Financial Model

(a) The State may at any time appoint a model auditor to audit the Financial Model
and:
(i) the results of the audit will be disclosed to both the State and Project Co;
(ii) if Project Co disputes any aspect of the audit, the dispute will be referred
to an Independent Expert for resolution under the Accelerated Dispute
Resolution Procedures; and
(iii) to the extent any discrepancies, errors or omissions are revealed in the
audit by the State, or are determined to exist by an Independent Expert
pursuant to the Accelerated Dispute Resolution Procedures, Project Co
must promptly correct the Financial Model accordingly.
(b) If an audit by the State results in a correction to the Financial Model, Project Co
must pay the reasonable costs of the State in conducting the audit, but if not, the
State will bear the costs of the audit.
Legal\104938921.16 277
58.7 Custody of Financial Model
(a) The Financial Model will be held in escrow from the Date of Financial Close and
throughout the Term by the Escrow Agent on the terms of the Escrow Agreement,
and on the basis that it will be released by the Escrow Agent for the purposes of:
(i) varying the Financial Model on the occurrence of Model Variation

Events;
(ii) the calculation of Termination Payments;
(iii) the determination of disputes under this Clause 58 by an Independent

Expert under the Accelerated Dispute Resolution Procedures; and
(iv) for the State to exercise its audit rights under Clause 58.6.
(b) The costs of the Escrow Agent will be borne equally by Project Co and the State.
58.8 Replacement of Escrow Agent

(a) If the Escrow Agent:
(i) refuses to perform his or her obligations under the Escrow Agreement;
(ii) is unable to perform his or her functions under the Escrow Agreement; or
(iii) is in material breach of the terms of the Escrow Agreement,
the State and Project Co will replace the Escrow Agent by another, on substantially
the same terms as the existing Escrow Agreement.
(b) The State Delegate at the time and Project Co will promptly meet to agree on the
identity of the replacement Escrow Agent willing to act on substantially the same
terms as the existing Escrow Agreement.
(c) If the State and Project Co cannot agree on the selection of a replacement Escrow
Agent willing to act on substantially the same terms as the existing Escrow
Agreement, within 10 Business Days from the date it is determined that the Escrow
Agent should be replaced, the State Delegate will request the President of the
Institute of Chartered Accountants in Australia (Victorian Branch) to appoint a
person with qualifications and experience appropriate to fulfil the obligations of an
Escrow Agent under an Escrow Agreement in substantially the same terms as the
existing Escrow Agreement.
59. Information and Audits

59.1 Information
Project Co will:
(a) (reporting and information): furnish to the State:
(i) (annual accounts): as soon as practicable (and in any event not later than
120 days) after the close of each financial year copies of the consolidated
(where applicable) and unconsolidated audited statement of financial
position and statement of financial performance of Project Co, the
Builder (during the Design and Construction Phase), the Facility
Legal\104938921.16 278
Management Subcontractor (during the Operating Term), certified by two
directors (in relation to Project Co) as giving a true and fair view of the
financial position of the relevant company. For the avoidance of doubt,
the Builder and the Facility Management Subcontractor will only be
obliged to furnish published statements of the relevant Parent Guarantor;
(ii) (management accounts): as soon as practicable (and in any event not

later than 30 days) after each six month period during a Contract Year,
unaudited management accounts of Project Co, comprising:
A. a statement of financial performance, cash flow statement and

statement of financial position;
B. details of any revenue earned by Project Co in respect of the

Facility (other than the Service Payments and revenue from
the Car Park);
C. details of all Financial Indebtedness of Project Co, and any

changes to its financial arrangements; and
D. a report comparing actual financial performance of the Project

for the immediately proceeding 6 months against the
performance projected in the Financial Model for that period,
giving reasons for any discrepancies between actual and
budgeted performance;
(iii) (business plan): no later than 30 April each Contract Year, the annual
business plan of Project Co for the ensuing financial year and budget for
the ensuing 2 financial years; and
(iv) (additional information): such additional relevant financial or other

information with respect to it, the Works, the Facility or the Project as the
State may from time to time reasonably require;
(b) (accounting principles): ensure that the information furnished pursuant to

paragraph (a) will:
(i) be prepared in accordance with the Corporations Act and generally

accepted Australian accounting principles and practices consistently
applied; and
(ii) fairly represent the financial condition or consolidated financial position

of Project Co, the Builder, the Facility Management Subcontractor and
each of their respective Subsidiaries, as the case may be, and the result of
its operations as at the date and for the period ending on the date to which
such accounts were prepared;
(c) (maintaining records): keep, and ensure that the Facility Management
Subcontractor keeps proper books of account and other financial and financial
planning records in relation to the Project, as would be expected of a prudent and
competent person undertaking similar obligations as Project Co and the Facility
Management Subcontractor are undertaking, on projects similar to the Project;
(d) (audited accounts): have, and ensure that the Facility Management Subcontractor
has its financial statements audited annually;
Legal\104938921.16 279
(e) (certificate of non-default): from time to time (but not more frequently than
quarterly) at the request of the State, furnish the State with a certificate signed by 2
Authorised Representatives of Project Co to the effect that no Event of Default is
subsisting; and
(f) (notice of events): promptly notify the State as soon as it becomes aware of any of
the following, and provide the State from time to time all reasonable detail and
reports, as soon as practicable on each such event:
(i) (litigation): any litigation arbitration or administrative proceedings taking

place, pending or threatened, affecting Project Co where the amount
involved is greater than $500,000;
(ii) (compulsory acquisition): any proposal by any Governmental Agency to

acquire all, or a substantial part of, the assets or business of Project Co;
(iii) (dispute): any substantial dispute between Project Co and any

Subcontractor or Governmental Agency the outcome of which might
have a Material Adverse Effect;
(iv) (Casualty Occurrence): any Casualty Occurrence;
(v) (Probity or Change in Control): any Probity Event or any Change in

Control of a Relevant Company or any event or circumstance likely to
lead to a Probity Event or a Change in Control of a Relevant Company,
except to the extent such disclosure may result in Project Co or any
Relevant Company breaching any applicable Law;
(vi) (health or safety risk): any event of or in relation to the Works, the
Facility or the provision of the Services that may give rise to any health
or safety risk in contravention of any Law, or any accident, injury or
damage to persons (including death) which occurs on or about the Site or
in connection with any act or omission of Project Co; and
(vii) (industrial action): any industrial action which may affect the Project,
and the actions Project Co has taken or proposes to take to minimise or
overcome the effects of the industrial action.
59.2 Financial Audit

(a) (Appointment of Auditor): The State may during the Term and for a period of
7 years after the Term, upon reasonable prior notice, at any time and from time to
time appoint a qualified auditor to audit Project Co's books and records (including
all financial information required for the preparation of financial statements,
management accounts, financial reports and Payment Statements) to verify the
accuracy and completeness of all financial statements, and other financial
information prepared in relation to the Project, including in order to verify the basis
for any claim by Project Co for payments from the State.
(b) (Access): Project Co will make such books and records available at a mutually
convenient location during normal business hours together with sufficient computer
access through, and with the assistance of Project Co's trained personnel to read
those books and records.
(c) (Discrepancies Revealed): If the report of the auditor states that any annual
financial accounts, management accounts, other financial reports, or information
Legal\104938921.16 280
provided by Project Co as the basis for any claim for payment from the State is not
accurate and complete in all material respects, then:
(i) Project Co must:
A. correct the inaccuracy or incompleteness in the affected

accounts or data and re-issue the affected accounts or data to
the State;
B. promptly take steps to remedy the inaccuracy or

incompleteness in its monitoring, measuring and reporting
systems; and
C. pay the costs of conducting the audit, promptly on demand by

the State; and
(ii) if the inaccuracy or incompleteness has affected the amount of any

payment of the Service Payments, calculation of any of the payments on
Termination or any other payment by the State to Project Co in respect of
the Project, the auditor will determine the necessary adjustment to the
affected payment and that amount will be added to or deducted from (as
the case may be) the next Payment Statement or otherwise constitute
Moneys Owing, payable by Project Co on demand by the State.
(d) (Fraud or misleading information): If the report of the auditor discloses any fraud
or false, misleading or negligent reporting in respect of any financial statements,
Payment Statements or Invoices or other books or records of Project Co, such an
event is a Major Default.
60. Undertakings
60.1 General
Project Co must:
(a) (compliance with Law): duly and punctually comply, and use all reasonable
endeavours to ensure that each Subcontractor and the suppliers of its Subcontractors
comply, with all Laws, all Health Policies and all Quality Standards binding upon it
or relating to the Project;
(b) (outgoings): pay or cause to be paid all Rates, charges and outgoings payable by it
as and when they respectively become due and payable except those which may be
contested in good faith;
(c) (Transaction and Finance Documents): duly and punctually comply with its
obligations under or in respect of all Project Documents and Finance Documents
unless compliance is waived by the other parties to such documents;
(d) (disposal of assets): not sell, assign, lease, licence, grant a trust over or otherwise
deal with or dispose of any of its assets (whether in one or more related or unrelated
transactions), without the prior written consent of the State, except for:
(i) Permitted Liens, or Security Interests in accordance with paragraph (e);
(ii) disposals of assets (other than any interest in or derived under any Project
Document) in exchange for other assets comparable in value (other than a
Legal\104938921.16 281
factoring on limited recourse terms or a sale and leaseback or similar
transaction);
(iii) disposals of or dealings with assets:
A. pursuant to the Asset Management Plan; or
B. on enforcement of the Finance Documents in accordance with

the Financier Direct Deed; and
(iv) trading stock in trade (other than any interest in, or derived under, any
Project Document or any Plant and Equipment) in the ordinary course of
day-to-day trading or on enforcement of the Finance Documents in
accordance with the Financier Direct Deed;
(e) (negative pledge): not create, permit or suffer to exist any Security Interest over all
or any of its assets, without the prior written consent of the State, except for
Permitted Liens and Security Interests in the Finance Documents to which the State
has given consent in or pursuant to, the Financier Direct Deed;
(f) (restrictions on dealings): notwithstanding paragraphs (d) or (e), not without the
prior written approval of the State (which it may give or withhold in its absolute
discretion), sell, transfer, assign, lease, licence, part with possession of or otherwise
dispose of or create or suffer to exist, any Security Interest over:
(i) any of its rights under any Project Document; or
(ii) all or any part of, or any interest in, the Site or the Facility or the Existing
Site or the Existing Facility,
nor agree, offer, attempt or purport to do any of these things, other than:
(iii) as expressly provided for in any Project Document;
(iv) under the Permitted Liens; or
(v) Security Interests granted under Finance Documents to which the State
has given its prior approval;
(g) (Sole business): not:
(i) conduct any business other than the implementation of the Project; or
(ii) acquire or hold any property or incur any Liability other than for the
purposes of the Project,
without the prior written consent of the State;
(h) (Related party dealings): except as expressly permitted by this Agreement, not:
(i) contract with;
(ii) assume or permit to subsist any Liability in favour of; or
(iii) buy, sell, dispose of assets to or from,
Legal\104938921.16 282
a Related Body Corporate of Project Co without the prior consent of the State
(which will not be unreasonably withheld to any such dealings which are clearly on
arms length commercial terms);
(i) (Pay Taxes):
(i) pay when due all Taxes payable by it, other than Taxes for which it has
set aside sufficient reserves and which are being contested in good faith,
except where failure to pay such Taxes may have a Material Adverse
Effect; and
(ii) pay such contested Taxes after the final determination or settlement of
such contest;
(j) (no consolidation): not, without the prior written consent of the State, engage in
any tax consolidation arrangements contemplated by the Income Tax Assessment
Act 1997 (Cth);
(k) (Project or Finance Document): not, without the State's written consent (which
consent will not be unreasonably withheld or delayed) at any time:
(i) terminate, rescind, discharge (otherwise than in performance), replace,

amend or vary; or
(ii) grant, seek or accept any waiver, time or indulgence (other than an
extension of time properly granted in accordance with its terms) which
would or could have a Material Adverse Effect, in respect of,
any provision of any Project Document to which the State is not a party or any
Finance Document (whether or not in connection with a Refinancing); or
(iii) do anything which would (with the giving of notice and/or lapse of time)
give any other party to such Project Document or Finance Document
legal grounds to do anything described in subparagraph (i) or (ii) above;
or
(iv) enter into any new contractual or financing arrangement which has the
effect of in any way restructuring the funding arrangements (including
the gearing levels) in place at Financial Close; and
(l) (performance): use all reasonable endeavours to ensure that each Subcontractor
involved in the Project will perform and observe its respective obligations in
relation to the Project.
60.2 Privacy
(a) (Privacy Principles and Laws): Project Co agrees to, and will ensure that any
Subcontract between it and a Subcontractor contains terms which require the
Subcontractor to, be bound by:
(i) the Information Privacy Principles and any applicable Code of Practice;
and
(ii) the Health Records Act and the Health Privacy Principles,
with respect to any act done, or practice engaged in, by it for the purposes of this
Agreement or for the Subcontract (as the case may be), in the same way as the State
Legal\104938921.16 283
would be bound by the Information Privacy Principles, any applicable Code of
Practice, the Health Records Act and the Health Privacy Principles in respect of that
act or practice had it been directly done or engaged in by the State.
(b) (Indemnity): Project Co will indemnify the State and State Associates in respect of
all Claims and Liabilities whatsoever incurred by the State or State Associates
resulting from any act done or practice engaged in by Project Co or any of its
Subcontractors, whether or not for the purposes of this Agreement or a Subcontract,
and which would, had that act or practice been done or engaged in by the State,
have contravened one or more of the Information Privacy Principles, any applicable
Code of Practice, the Health Records Act or the Health Privacy Principles.
60.3 VIPP Statement

(a) Project Co acknowledges and agrees that the information contained in the VIPP
Statement may be provided to the responsible State Governmental Agency to be
included in the register of VIPP performance and that such information may be
made available to other State Governmental Agencies to be used in assessing other
tender proposals for VIPP purposes.
(b) The State will monitor Project Co's performance in accordance with any monitoring
provisions in the VIPP Statement and measured against the VIPP outcomes set out
in the VIPP Statement.
(c) Project Co must allow the State to have access to, and to obtain information in
respect of, Project Co's records from Project Co's officers, employees, consultants
and advisers for this purpose.
(d) Project Co authorises the State to obtain information from the persons, firms or
corporations nominated in the VIPP Statement as to compliance with the VIPP
Statement.
60.4 No signage or Use of Name

Project Co must not at any time:
(a) without the prior written consent of the State, which may be given or withheld in
the absolute discretion of the State use the name "Royal Children's Hospital" in any
of its activities and dealings, other than for the purpose of performing its obligations
under this Agreement, whether in relation to the Project or otherwise, and in
addition it must not intentionally, recklessly or negligently do anything which
diminishes the value and reputation of that name or the Hospital Operator; or
(b) erect any signage or advertising:
(i) on the Site, the Existing Site; or
(ii) on or in the Facility or the Existing Facility,
without the prior approval of the State Delegate at the time as to the erection of, and the form
and location of that signage or advertising.
60.5 Term of undertakings

Each undertaking in this Clause 60 will continue from the date of this Agreement until all
obligations have been discharged or waived and all moneys actually or contingently owing
under any Project Document by Project Co have been paid in full.
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60.6 Trust undertakings
Project Co will:
(a) (New trustee): if, having complied with its obligations under Clause 61, it ceases
to be the trustee or the sole trustee of the Unit Trust, procure that any new or
additional trustee executes in favour of the State any documents, guarantees and
Security Interests which the State reasonably requires for that new or additional
trustee to assume the obligations of Project Co under the Project Documents;
(b) (Determination of Unit Trust etc): notify the State immediately in writing if the
Unit Trust is determined or for any reason ceases to exist, or if Project Co is
required or directed by any of the beneficiaries of the Unit Trust to do any act or
thing in relation to the Unit Trust or the trust funds of the Unit Trust;
(c) (No distribution or resettlement): procure that:
(i) no distribution of any of the capital of the Unit Trust;
(ii) no resettlement of the Unit Trust; or
(iii) no vesting of any assets of the Unit Trust,
is made without the State's prior written consent, except to the extent that such
distribution or resettlement is expressly contemplated by any Finance Document (in
which case no prior consent is required);
(d) (No breach): comply with all its obligations and duties as trustee of the Unit Trust
under the Trust Deed and at Law and not by any act or omission lose or cease to be
entitled to its rights of indemnity against the assets of the Unit Trust;
(e) (Right of indemnity lost): notify the State immediately if it ceases to be entitled to
be fully indemnified out of the assets of the Unit Trust in respect of all liabilities
(actual or contingent, present or future) incurred by or imposed on it under the
Project Documents and Finance Documents.
61. Change In Control

61.1 Prohibition
(a) Subject to paragraph (b), there will be no Change in Control of Project Co or the
Unit Trust without the prior written consent of the State, which consent will not be
unreasonably withheld.
(b) If a Change in Control in Project Co occurs due to the transfers of shares or other
interests which are listed on a stock exchange, the consent of the State may have to
be sought after the occurrence of the Change in Control, but if the written consent
of the State is not obtained, Project Co must procure that the Controller ceases to
have the Control which resulted in the Change in Control within 60 Business Days
after receiving notice under Clause 61.2 that the State does not consent to the
Change in Control.
(c) If a Change in Control occurs to any other Relevant Company and the State
determines that it does not approve of the Change in Control because one or more
of the factors referred to in Clause 61.5 apply, Project Co must:
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(i) in relation to a Change in Control of the Facility Management
Subcontractor or its Parent Guarantor, terminate the Facility Management
Subcontract with the Facility Management Subcontractor and issue to the
market a request for tender for provision of those Services being provided
by the Facility Management Subcontractor; or
(ii) in relation to a Change in Control of the Builder or its Parent Guarantor,

terminate the Construction Contract with the Builder and to issue to the
market a request for tender for provision of those Works being provided
by the Builder,
each in accordance with Section 2.6 of Schedule 5, within 60 Business Days.
(d) The consent of the State under paragraph (a) or (b) may be withheld if one or more
of the factors referred to in Clause 61.5 apply.
(e) The consent of the State under paragraph (a) or (b) may not be withheld if the
Change in Control relates to the sale, transfer or other disposal by Babcock &
Brown Limited after Financial Close of its controlling interest in Project Co or the
Unit Trust to a Related Body Corporate of, or fund managed by, Babcock and
Brown Limited.
61.2 Notice
(a) If a Change in Control of a Relevant Company or the Unit Trust is proposed, or has
occurred (in the situation to which Clause 61.1(b) or 61.1(c) applies respectively),
Project Co will notify the State immediately it becomes aware of that Change in
Control.
(b) Project Co will provide to the State in its notification in paragraph (a) details of:
(i) the identity of each proposed Controller;
(ii) the address of each proposed Controller;
(iii) the extent and nature of the proposed Change in Control; and
(iv) all other information necessary for the State to determine:
A. whether to consent, or not to consent, to the Change in

Control of the Relevant Company or the Unit Trust; or
B. the Probity Investigations it wishes to carry out in respect of a

proposed Controller of any Relevant Company or the Unit
Trust.
61.3 Further Information

Project Co will promptly provide such further information as the relevant State Delegate at the
time reasonably requires in order to make its decision under Clause 61.1 and will obtain such
written consents as are required by the Law and by the State, to undertake Probity
Investigations in relation to each Controller and its Associates.
61.4 State response

The State Delegate will, within the Review Period, provided it has received sufficient
information under Clause 61.3, inform Project Co whether:
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(a) the State consents to the proposed Change in Control of the Relevant Company or
the Unit Trust; or
(b) it considers a Probity Event has or is likely to occur in respect of a Change in

Control of any Relevant Company or the Unit Trust.
61.5 Factors to consider

The State may withhold consent to a Change in Control if it has not been given all of the
information required under Clauses 61.2 and 61.3 or if the State is of the reasonable opinion
that:
(a) the Controller is not solvent or reputable;
(b) as it relates to Project Co only, the Change in Control is to take effect prior to the
second anniversary of the Operational Commencement Date;
(c) the Controller has an interest which conflicts in a material way with the interests of
the State or is involved in a business or activity which is incompatible or
inappropriate in relation to the activities of the Project;
(d) the Controller does not have the same or greater financial, managerial and technical
capacity than that of the person or entity it is replacing or from whom it is taking
Control;
(e) the proposed change is against the public interest;
(f) the proposed change could lead to the occurrence of a Probity Event;
(g) the proposed change would have a Material Adverse Effect; or
(h) the proposed change would increase the level of risk or liabilities to the State or
State Associates.
61.6 Change in Management and Key Personnel

(a) Subject to paragraph (b), a Major Default will occur if a Change in Management of
Project Co occurs and as a result Project Co no longer has the same or better
management skills available to it as it had prior to the Change in Management.
(b) Where a Change in Management of Project Co occurs due to illness, death or

resignation of any person, such change will not be a Major Default provided that the
relevant person is replaced within a reasonable time and has the same or better
management skills as the person being replaced.
(c) Project Co must:
(i) give the State prior written notice of any intention by Project Co to
terminate or replace any Key Personnel;
(ii) ensure that any replacement Key Personnel have the same or better skills
as the person being replaced and the proposed change could not lead to
the occurrence of a Probity Event; and
(iii) give the State notice of the details of any replacement Key Personnel.
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62. Probity Events and Investigations
62.1 Notice of Probity Event
Project Co must, and the State may, notify the other as soon as it has become aware that a
Probity Event has occurred or is likely to occur. The notice must describe the circumstances
giving rise to the actual or likely occurrence of the Probity Event.
62.2 Meeting to discuss action

Within 3 Business Days after receipt of a notice under Clause 62.1, the parties must meet and
discuss the occurrence of the Probity Event and endeavour to agree on the actions to be taken
by Project Co to reverse the effect of the Probity Event, in relation to the delivery of the
Services under this Agreement.
62.3 Unable to Agree

If the parties are unable to agree under Clause 62.2, within 5 Business Days of consulting, or
Project Co fails to comply with Clause 62.2, then the State may give a notice to Project Co
setting out the action the State requires Project Co to take to address the adverse effect of the
Probity Event. Such action may include:
(a) in relation to a Relevant Person:
(i) terminating any sub-contract or contract of employment;
(ii) procuring the Relevant Person to cease having the involvement, shares,
entitlement, contract, arrangement, significant influence, power or control
over the Relevant Company or in the Project; or
(iii) removing that person from any involvement with the delivery of the
Services under this Agreement,
within 10 Business Days of the State giving the notice to Project Co; or
(b) in relation to a corporation which has Control over a Relevant Company ensuring
that:
(i) action is taken with respect to a person within or with Control over, the
corporation who has triggered the Probity Event, being action of the type
the subject of paragraph (a) as if that person was a Relevant Person and
the Relevant Company was the corporation; or
(ii) failing resolution of the issue under subparagraph (i), the corporation
ceases to have that Control within 30 Business Days of the State having
given further notice requiring this to occur.
62.4 Contractor to comply

Project Co must ensure that any action agreed with the State to be taken pursuant to
Clause 62.2, or any action required in a notice from the State under Clause 62.3, is taken
within the specified time at Project Co's cost.
62.5 Major Default

If Project Co does not comply with its obligations under Clause 62.4, this will be a Major
Default.
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62.6 Probity Investigations
(a) (At any time): The State may require at any time Project Co to conduct a Probity
Investigation in respect of a Relevant Person, and will require the conduct of a
Probity Investigation of persons who are proposed to become Relevant Persons
(including Project Co Representative and the Development Co-ordinator), and the
State Delegate at the time will advise Project Co in writing of those persons on
whom the State requires a Probity Investigation.
(b) (Other investigations): The State may require Project Co to conduct probity and
security investigations in addition to the Probity Investigations on Relevant Persons,
or persons proposed to be Relevant Persons.
(c) (Notice by Contractor): Project Co will advise the State at least 10 Business Days
prior to the proposed appointment, of all persons proposed to be appointed as
Relevant Persons by Project Co.
(d) (Written consent): Subject to paragraph (i), the State will require Project Co to
procure the written consent to a Probity Investigation, of all Relevant Persons on
whom the State advises Project Co it requires a Probity Investigation and other
probity and security investigations, and all consents and other information required
by the Law and by the State must be given to the State Delegate.
(e) (Review Period): The State's determination as to whether a person is a desirable

person to become a Relevant Person will be advised to Project Co by the State
Delegate within the Review Period.
(f) (Not to appoint): Project Co will not appoint and will ensure no other person
appoints a person to the position of a Relevant Person to whom the State has not
given approval, following a Probity Investigation and other investigations that the
State required.
(g) (Expenses of Probity Investigation): Where a Probity Investigation gives rise to

an adverse finding against a Relevant Person or a Subcontractor, Project Co will
pay to the State, on presentation of an invoice by the State, all expenses reasonably
incurred by the State in carrying out each Probity Investigation and otherwise, such
expenses will be borne by the State.
(h) (Police checks and Working with Children Checks): Project Co must prior to
allowing any Relevant Person to work in the Facility during the Operating Term, or
the Existing Facility prior to Stage 1 Final Completion, ensure that the Relevant
Person has passed all relevant checks required by the Working with Children
regulations or any other Governmental Agency to allow that person to work with or
in the vicinity of children and shall supply evidence to that effect to the State if
requested by the relevant State Delegate.
(i) (Removal of Relevant Person): If, despite having used its best endeavours to
obtain the consent of a Relevant Person to a Probity Investigation, Project Co has
been unable to obtain such consent, Project Co shall inform the State accordingly
and shall undertake such action required by the State which may include removal of
that Relevant Person from their involvement in the Project.
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63. Confidential Information
63.1 Contractor not to Disclose
(a) Subject to paragraphs (c) to (e), and except as required by Law or otherwise
required to obtain legal or other advice from its advisers, Project Co will not and
will ensure that the Builder and Facility Management Subcontractor do not without
the prior written consent of the State, make public or disclose to any person any
Confidential Information.
(b) In giving its written consent under paragraph (a), the State may impose such terms
and conditions as it thinks fit.
(c) Project Co may provide such Confidential Information as is necessary for the
purpose of performing Project Co's obligations under this Agreement or resolving a
dispute in respect of those obligations, to its Subcontractors or other Relevant
Persons who satisfy the requirements of Clauses 12.5 or 62.6(f).
(d) Project Co may disclose Confidential Information to:
(i) any financier under the Finance Documents;
(ii) any prospective financier provided the State has first given consent to the
proposed financing arrangements where its consent is required under
Clause 42.1; or
(iii) any prospective purchaser of the interests of Project Co in the Project on

enforcement of the Finance Documents pursuant to the Financier Direct
Deed,
provided in each case that before such disclosure:
(iv) in respect of the prospective purchaser, the State has carried out such
Probity Investigations as it requires and is satisfied that a Probity Event
would not occur if that purchaser becomes a Relevant Company; and
(v) the financier, prospective financier or purchaser has entered into or enters
into a confidentiality deed with the State agreeing to be bound by the
same confidentiality obligations as bind Project Co under this Clause 63
and otherwise on terms reasonably acceptable to the State.
(e) Paragraph (a) will not apply in the following circumstances:
(i) in respect of information already in the public domain (other than as a

result of breach of this Clause 63) provided that any disclosure by Project
Co is made subject to the Communications Approach; and
(ii) to the extent that any disclosure is required by any applicable stock
exchange listing rules, prudential authority or overseas taxing authority
(where such authority has or asserts jurisdiction over Project Co, any
Project Co Associate or any Related Person).
63.2 Contractor's Agents, etc. not to Disclose

Project Co will use its best endeavours to ensure that its employees, agents, advisers and any
Subcontractors or other Relevant Persons employed or engaged for the purposes of the Project,
do not make public or disclose any Confidential Information, or do or omit to do anything
Legal\104938921.16 290
which may cause it to breach the terms of this Clause 63 and for this purpose the State may
require any such person to enter into a confidentiality deed with the State agreeing to be bound
by the same confidentiality obligations as bind Project Co under this Clause 63.
63.3 State may Disclose

(a) Subject to paragraph (c), the State may at any time disclose Confidential
Information and the contents of the Project Documents, including:
(i) where disclosure is made in the course of the official duties of the
Department or the Minister;
(ii) to satisfy the requirements of parliamentary accountability;
(iii) to the Victorian Auditor-General for the purposes of satisfying its

statutory duties;
(iv) pursuant to policies of the Victorian government;
(v) in annual reports of the Department; and
(vi) pursuant to the Freedom of Information Act 1982 (Vic) or the

Ombudsman Act 1973 (Vic),
(subparagraphs (i) to (vi) describing the State's "Public Disclosure Obligations"),

and Project Co will use all reasonable endeavours to assist the State to meet its
Public Disclosure Obligations.
(b) Subject to paragraph (c), the contents of the Project Documents may be published
on a Victorian government internet website, other than any other confidential
information specifically identified to the State in writing as
commercial-in-confidence, which the State may only disclose or publish if required
to do so to comply with its Public Disclosure Obligations.
(c) The State will not disclose or publish the Financial Model without the prior written
consent of Project Co except if required to do so to comply with the Public
Disclosure Obligations of the State.
63.4 Survival on Termination

This Clause will survive Termination.
64. Assignment
64.1 Project Co
(a) Project Co may not assign or transfer or otherwise dispose of any of its rights, title
or interest in or under any Project Document without the prior written consent of the
State which consent may be given, given on conditions or withheld in the State's
discretion. Project Co may not assign, transfer or otherwise dispose of part of its
rights, title or interest in or under the Project Documents.
(b) In exercising its discretion, the State must not unreasonably withhold consent under
paragraph (a) to a proposed assignment, transfer or other disposal of the whole of
the right, title and interest of Project Co in the Project Documents, if Project Co
demonstrates to the reasonable satisfaction of the State that:
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(i) the proposed assignee or transferee:
A. is solvent and reputable and has the financial capability to

perform the relevant obligations of Project Co under the
Project Documents;
B. will not be appointed prior to the second anniversary of the

Operational Commencement Date;
C. does not have an interest which conflicts in a material way

with the interests of the State and is not involved in, and is not
planning to be become involved in, a business or activity
which is incompatible or inappropriate in relation to the
activities of the Project; and
D. has the same or greater financial or technical capacity than

Project Co;
(ii) the proposed assignment or transfer is not against the public interest;
(iii) the proposed assignment or transfer could not lead to the occurrence of a
Probity Event (and Project Co must procure such consents as are required
by Law from the proposed assignee or transferee and its Associates to
permit the State to conduct Probity Investigations to satisfy itself in this
respect);
(iv) the proposed assignment or transfer would not have a Material Adverse
Effect on the performance of the Hospital Functions;
(v) the direct or indirect consequences of the proposed assignment or

transfer, if effected, would not materially or adversely affect the State's
rights, or the State's ability or capacity to exercise its rights, under the
Project Documents;
(vi) the proposed assignee or transferee enters into such documents as are
reasonably required by the State to ensure that the obligations of Project
Co under the Project Documents are assumed by the proposed assignee or
transferee for the benefit of all other parties to those Project Documents;
and
(vii) the proposed assignee or transferee obtains all necessary Authorisations

in order to perform the applicable obligations under the Project
Documents.
64.2 State
(a) The State may assign or transfer or otherwise dispose of any of its rights, title or
interest in or under any Project Document without the consent of Project Co to
another party (including any Minister) which is an agent of, or the obligations of
which are supported by, the Crown in the right of the State of Victoria, but
otherwise the prior written consent of Project Co is required to any such assignment
or transfer or other disposal.
(b) Upon written request by the State, Project Co hereby irrevocably agrees to enter
into a new agreement upon the same terms and conditions as the Project Documents
to which they are party pursuant to which the person to which assignment or
transfer or other disposal is permitted under paragraph (a) agrees to perform and
Legal\104938921.16 292
observe the State's obligations under those Project Documents as if it were named in
the relevant Project Documents instead of the State.
(c) Project Co will execute such documents and do such things as and when reasonably
requested by the State to do so in order to enable or facilitate such assignment or
transfer in accordance with this Clause 64.2. The State will pay the reasonable costs
of Project Co (including any stamp duty payable by Project Co) in complying with
the State's request in accordance with the Change Compensation Principles.
64.3 Successors and Assigns

The Project Documents will be binding upon and enure to the benefit of each party and its
respective successors and (where relevant) permitted assigns.
65. Notices
All notices, requests, demands, consents, approvals, agreements or other communications to or
by a party to a Project Document pursuant to that Project Document will:
(a) be in writing addressed to the address of the recipient shown in Schedule 1 or to

such other address as it may have notified the sender;
(b) be signed by an Authorised Representative of the sender; and
(c) be deemed to be duly given or made:
(i) (in the case of mail) on the second Business Day after the date of posting;
(ii) (in the case of facsimile) on receipt of a transmission report confirming

successful transmission of the entire document; and
(iii) (in the case of delivery by hand) on delivery,
but if such delivery or receipt is later than 4:00 pm (local time) on a day on which
business is generally carried on in the place to which such communication is sent, it
will be deemed to have been duly given or made at the commencement of business
on the next such day in that place.
The parties may communicate with each other by electronic means, but no such
communications will be deemed to have been given, made or received.
This Clause 65 will apply to all Project Documents except to the extent that a specific Project
Document contains an alternative notice provision.
66. Miscellaneous
66.1 Stamp Duty
(a) Project Co will:
(i) ensure that (where applicable) all Project Documents are stamped and
provided to the State in registrable form as soon as possible after
execution by all parties to the relevant document; and
(ii) pay all stamp and other duties (together with any fines or penalties for
late payment) on or in connection with the execution, delivery and
performance of the Project Documents and the transactions contemplated
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by the Project Documents which may be payable in any State or Territory
of Australia and whether assessable against itself or any other person.
(b) Such duties will include rental business, rental agreement, hiring arrangement, loan
security, mortgage, or other duties in any state or territory and any such duty passed
on to such party by any bank or financial institution.
66.2 Costs And Expenses

Project Co will, upon demand, pay to the State, and keep the State indemnified against, its
costs, expenses, duties and fees of or incidental to:
(a) any consent, deed, agreement, approval or waiver obtained from the State under or
in relation to any Project Document (other than any consent or approval expressly
contemplated by this Agreement), or any amendment to any Project Document to
which the State is a party at the request of Project Co;
(b) the taking of successful enforcement action by the State pursuant to any Project
Document, including the fees of all professional consultants properly incurred by
the State (including legal costs on a full indemnity basis); and
(c) obtaining reports from any consultant engaged by the State in respect of any
circumstance described in paragraphs (a) and (b).
66.3 Interest On Overdue Moneys

(a) Subject to paragraph (c), if either party fails to pay when due any moneys payable
by it under, or in connection with any Project Document (including interest under
this Clause), the party in default will pay interest on the amount owing at a rate
equal to the Overdue Rate calculated daily and capitalised monthly in arrears for the
period from the date when the amount became owing until the amount is paid or
satisfied (both before, and as a separate and independent obligation after, any
judgment).
(b) The interest will be capitalised monthly and will be added to the amount owing, and
will itself bear interest under this Clause.
(c) Interest at the Overdue Rate on any late payments of the Service Payments will be
calculated and payable by the State in accordance with Clause 40.5.
66.4 Set-Off
(a) The State may at any time deduct from payments otherwise due and payable to
Project Co under any Project Document to which the State is a party:
(i) any Moneys Owing to the State; and
(ii) any Claim to Moneys Owing which the State may have against Project
Co,
whether under any Project Document or at Law.
(b) Project Co must not at any time deduct from money otherwise due to the State
(including any Moneys Owing to the State) under any Project Document to which
the State is a party:
(i) any debt or other money due from the State to Project Co; or
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(ii) any Claim to money which Project Co may have against the State,
whether under any Project Document or at Law.
(c) Nothing in paragraph (a) limits any other right for the State to set-off amounts under
any other provision of this Agreement.
(d) The State will provide Project Co with reasonable details of the basis on which it is
setting off any amount pursuant to paragraph (a).
66.5 Whole Agreement

The Project Documents to which the State and Project Co are parties comprise the whole of the
agreement between the State and Project Co with respect to the matters contained in those
Project Documents.
66.6 Consents
A consent or approval under this Agreement from the State or a State Delegate may be given
or withheld, or may be given subject to such conditions, as the State or the State Delegate (in
its absolute discretion) thinks fit, unless this Agreement expressly provides otherwise.
66.7 Amendment
No amendment or variation of this Agreement is valid or binding on a party unless made in
writing executed by both parties, provided that amendments to the Services Specifications can
be made by agreement in writing executed by the relevant State Delegate and Project Co.
66.8 Survival and Repetition of Representations and Warranties

The representations and warranties given by Project Co in this Agreement:
(a) survive the execution of each Project Document;
(b) subject to paragraph (c), are repeated on each anniversary of Financial Close and on
each date on which Project Co furnishes its audited statements pursuant to
Clause 59.1(a)(i), in each case with respect to the facts and circumstances then
subsisting; and
(c) the representations given in Clauses 10.1(f), (i) and (m) are repeated on each
anniversary of Financial Close and on each date that Project Co furnishes its audited
Statements pursuant to Clause 59.1(a)(i) subject to such disclosures as Project Co
may make in writing to the State and the State having waived its rights in writing in
respect of these representations as a consequence.
66.9 No Waiver
No failure to exercise and no delay in exercising, on the part of the State, any right or remedy
under any Project Document will operate as a waiver of that right or remedy, nor will any
single or partial exercise of any right or remedy preclude any other or further exercise of that,
or any other, right or remedy.
66.10 Remedies Cumulative

The rights and remedies provided in each Project Document are cumulative and are not
exclusive of any rights or remedies provided by Law or any other agreement, except to the
extent expressly provided in this Agreement.
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66.11 Severance
Any provision of a Project Document which is illegal or unenforceable in any jurisdiction will,
as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions of the relevant Project Document or affecting
the validity or enforceability of such provision in any other jurisdiction.
66.12 Moratorium Legislation

Unless application is mandatory by Law, any present or future Law will not apply to any
Project Document so as to abrogate or otherwise prejudicially affect any rights, powers,
remedies or discretions given or accruing to the State.
66.13 Governing Law and Jurisdiction

This Agreement will be governed by and construed in accordance with the Law applying in the
State of Victoria, subject to Clause 58, and the parties to this Agreement irrevocably submit to
the non-exclusive jurisdiction of the courts of that State and the courts competent to determine
appeals from those courts.
66.14 Clauses to Survive Termination

The following provisions of this Agreement will survive Termination:
(a) Clauses 51 to 57 both inclusive and this Clause 66.14;
(b) any provision which:
(i) relates to or is in connection with:
A. the State's rights to set-off and to recover money;
B. confidentiality;
C. Intellectual Property;
D. any indemnity, Performance Bond or other financial security

given under this Agreement; or
E. any right arising on Termination; and
(ii) otherwise expressly or by implication from its nature is intended to

survive Termination.
66.15 Counterparts
Each Project Document may be executed in any number of counterparts and all of such
counterparts taken together will be deemed to constitute one and the same instrument.
66.16 Attorneys
Each of the attorneys signing each Project Document respectively states in the presence of
each other person signing that Project Document that he or she has, at the time of execution of
the Project Document, no notice of the revocation of the power of attorney under which he or
she executes that Project Document.
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EXECUTED as an agreement.
Executed by the Honourable Daniel

Andrews MP in his capacity as the Minister
for Health on behalf of the Crown in right of the
Signature of Minister
State of Victoria (Minister) in the presence of:
Signature of Witness
Name of Witness in full
Signed for and on behalf of Childrens Health

Partnership Pty Limited as trustee for the
CHP Unit Trust (ABN 59 119 703 445) by its
attorney under power of attorney dated 13
November 2007 , and the attorney declares that the
Signature of attorney
attorney has not received any notice of the
revocation or suspension of such power of
attorney, in the presence of:
Signature of witness Name of attorney in full
Name of witness in full
Legal\104938921.16 297

Project Agreement - New RCH Project

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Project Agreement - New RCH Project

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The Minister for Health of the State of Victoria

The new Royal Children's Hospital Project

The Clayton Utz contact for this document is

Our reference 155/920/14313/80039503

1. Definitions and Interpretation .................................................................................. 1

15. Quality and Quality Review over Term ................................................................ 131

22. Construction of Stage 1 Works............................................................................ 167

23. Preparation for Stage 1 Final Completion ........................................................... 167

26. Stage 1 Final Completion ..................................................................................... 175

31. Defects................................................................................................................... 186

32. Time ....................................................................................................................... 187

57. Arbitration ............................................................................................................. 274

66. Miscellaneous ....................................................................................................... 293

B. Project Co is the successful tenderer.

E. The State will make payments to Project Co in consideration for Project Co

The parties agree

PART 1 THE PRELIMINARIES

1. Definitions and Interpretation

"Accreditation Standards" means:

"Additional Stage 1 Tests" has the meaning given in Clause 23.6.

"Additional Stage 2 Tests" has the meaning given in Clause 28.3.

"Adjustment Note" has the meaning given in the GST Law.

"Agreed Bid Documents" means the:

(a) Bid Design Documentation;

(b) Design Development Plan;

(c) Bid Project Management Plan;

(d) Bid Asset Management Plan; and

(e) Bid Master Works Program,

"Agreed Remediation Standard" means the standard of remediation necessary to obtain a

"Alternative Group 3B Equipment" has the meaning given in Clause 20.6(d)

"APRA" means the Australian Prudential Regulation Authority.

"Artwork Allowance" means the amount of $420,000 exclusive of GST.

"Associated Documentation" means those documents identified as such in Clause 23.2(a).

(a) any consent, authorisation, registration, filing, agreement, notarisation, certificate,

"Authorised Representative" means:

(a) for the State:

(i) a State Delegate;

(ii) a representative authorised by a State Delegate in accordance with

"Availability Failure Abatement" means, in respect of an Availability Failure, an amount in

"Availability Failure Event" means:

(iii) air flow and quality;

(v) power (essential and non-essential);

(vi) water (availability, temperature, quality, sewerage, stormwater drainage);

(vii) Nurse Call System;

(ix) medical and other equipment;

(x) Medical Gases and Suction Systems;

(xi) fire protection system; or

(xii) the security systems; or

(c) Systems Failure Event.

"Bank Bill Rate" in relation to a day means:

"BAS" means the building automation system for the Facility.

"Base Capital" [not disclosed]

(a) any Margin; and

(b) the cost of project management services provided by Project Co.

(c) with due expedition and without unreasonable or unnecessary delay;

(e) in accordance with all applicable Laws and Authorisations;

(b) with due expedition and without unnecessary or unreasonable delay;

(d) in accordance with all applicable Laws and Authorisations;