TranSystems Corporation - LGM Construction

Contract Documents, Contractor shall replace the Material even if the tests conducted by
Contractor’s recognized testing laboratory indicate that the Material does conform to the
requirements of the Contract Documents. If, as a result of the application of the procedures set
forth in Article 26 or otherwise, a determination is made that the test results of FedEx’s Testing
Agent were not correct, FedEx shall execute a Change Order to adjust the Contractor’s Fee to
compensate Contractor for the reasonable costs it incurred in connection with the replacement of
the suspect Material.
ARTICLE 16
FEDEX'S RIGHT TO AUDIT
Section 16.01. Right of Audit.
Contractor shall keep in its records copies of all submittals,
correspondence, minutes, memoranda, tape recordings, videotapes, accounting records, and other
writings or things that document the Project, its design and its construction, including, without
limitation, full and accurate records of all costs incurred and items billed in connection with the
Work. Those records will be open to audit by FedEx or its authorized representatives during the
period commencing on the Effective Date and ending on the date that is five years after the date
of Final Payment or on such later date through which applicable Legal Requirements or good
construction industry practice requires the retention of such records. Moreover, if Contractor
receives notification of a dispute, or the commencement of litigation, regarding the Project prior
to the expiration of the period during which its records are subject to FedEx audit in accordance
with the foregoing, Contractor shall continue to keep its records regarding the Project beyond the
period described above until final resolution of the dispute or litigation. In addition, Contractor
shall include in each Subcontract a requirement to maintain records regarding the Project and
make them available for FedEx’s audit that is the same as that set forth above. Contractor's
failure to include such a requirement in any Subcontract will be an Event of Default and grounds
for FedEx's immediate termination of this Agreement.
Section 16.02. Review of Subcontracts. Upon request and as required by the attached
Exhibit C-1,
Contractor shall provide FedEx with an executed copy of all Subcontracts and
purchase orders relating to the Work.
Section 16.03. Confidentiality of Audit Information. FedEx acknowledges that certain of
Contractor's valuable, confidential and proprietary information may come into FedEx’s
possession during the course of an audit that FedEx undertakes on the authority of this Article 16.
FedEx must hold all information that it obtains from or about Contractor in the course of an audit
and that Contractor designates as “confidential” by delivering written notice to FedEx in strictest
confidence and must not use that information other than in connection with the administration of
this Agreement and the resolution of any dispute that may arise between FedEx and Contractor in
connection with the Project. FedEx must also cause its employees and its authorized
representatives to be bound by the same obligation of confidentiality as that which FedEx
undertakes under the terms of this Section 16.03. Without Contractor's prior written consent,
FedEx may not communicate any audit information that Contractor has designated as
“confidential” in any form to any third party. If FedEx breaches its obligations under the terms
of this Section 16.03, Contractor may seek preliminary and permanent injunctive relief and an
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