Common use of Fail-Safe Clause in Contracts

Fail-Safe. 9.1) If the Communications Provider fails to meet either or both of the Thresholds in any Contract Quarter and the Communications Provider believes this is because it placed new orders for Eligible Services then it may, subject to the Verification Process, apply for a recalculation of its performance against the Thresholds for that Contract Quarter using the Fail-safe Mechanism. 9.2) Openreach shall provide details of the Independent Verifier to the Communications Provider on request. 9.3) If the Communications provider wishes to invoke its right under this Fail-safe Mechanism for a recalculation of its performance against the Thresholds for a Contract Quarter then it must notify Openreach in accordance with the Verification Process. 9.4) Until such time as the Verification Process is complete for a particular Contract Quarter, no change to the calculation of the Thresholds will occur. 9.5) If the Communications Provider applies for a recalculation of its performance against the Thresholds in relation to a Contract Quarter using the Fail-safe Mechanism then Openreach shall first pay any Discounts relating to Connection Charges and Rental Charges for the relevant Contract Quarter that are payable to the Communications Provider based on calculations made by Openreach under the Original Contract (as amended by this Supplemental Agreement), such payment to be made in accordance with the terms of the Original Contract. If Openreach is subsequently advised by the Independent Verifier that a recalculation of the Communication Provider’s performance against the Thresholds in the relevant Contract Quarter in accordance with the Verification Process shows that the Communication Provider performed better in the relevant Contract Quarter than under the calculation made by Openreach then Openreach shall pay the Communication Provider such amount as is equal to the difference between the aggregate amount of the Discount already paid by Openreach to the Communication Provider for the relevant Contract Quarter and the aggregate amount of the Discounts applicable to the results of the recalculation performed by the Independent Verifier. A worked example of the foregoing provision is set out in Appendix 3. 9.6) Upon conclusion of the Verification Process Openreach shall within 10 Working Days of receipt of the relevant recalculation from the Independent Verifier notify the Communications Provider of the Fail-safe Fibre Only Performance (if any) for that Contract Quarter and the amount of any payment (if any) owed by Openreach to the Communication Provider based on such recalculation. If any such payment is due then Openreach shall pay the relevant amount to the Communications Provider as soon as reasonably practicable after the recalculation from the Independent Verifier. 9.7) The Communications Provider must provide a separate notice to Openreach and as set out in the Verification Process for each Contract Quarter where the Communications Provider wishes to have its performance against the Thresholds re-calculated by the Independent Verifier under the Fail-safe Mechanism. 9.8) Save as set out in this paragraph 9.8 Openreach shall be responsible for all costs and charges of the Independent Verifier associated with the Verification Process. The Communications Provider shall pay upon receipt of any invoice from Openreach the costs and charges of the Independent Verifier associated with performing the Verification Process if the Communications Provider unreasonably fails to comply with the Verification Process or comply within any reasonable timescale set by the Independent Verifier and of which the Communications Provider has received reasonable advance notice. 9.9) If the Communication Provider provides a notice under and pursuant to paragraph 1 of the Verification Process then Openreach shall within 5 Working Days of receipt of the notice instruct the Independent Verifier to undertake the Verification Process. Openreach shall ensure that its instructions to the Independent Verifier require the Independent Verifier to: (a) take all due care to ensure it undertakes the Verification Process accurately fairly and to the best of its abilities; and (b) treat the Communications Provider’s information in confidence (including, where requested by the Communications Provider, entering into a non- disclosure agreement on terms mutually agreeable to the Communications Provider and the Independent Verifier), disclosing to Openreach only the calculation (if any) of the Fail-safe Fibre Only Performance and the calculation of Legacy Services pursuant to paragraph 1.11) of the Verification Process. 9.10) If the Independent Verifier finds that the Relevant Legacy Number for any communications provider is more than 50% greater than the Benchmark Legacy Number for a Contract Quarter then Openreach reserves the right to review and amend the Fail-safe Mechanism to manage the volume of provide and transfer orders for Legacy Services and the Communications Provider may not object under this Supplemental Agreement to any such amendment. Any amendment under this paragraph 9.10) shall: (a) only affect the application of the Failsafe Mechanism to the extent the Relevant Legacy Number for the Communications Provider is more than 50% greater than the Benchmark Legacy Number; and (b) be on a minimum of 90 days’ notice. 9.11) Openreach and the Communications Provider shall cooperate with the Independent Verifier including responding in a timely fashion to any requests for additional information in order to support the Verification Process.