General Condition of Contract

INVITATION TO BID DOCUMENT MATERIAL OFF LOADING FACILITIES (MOLF) AT TELUK RAMUNIA FOR

REFINERY AND PETROCHEMICALS INTEGRATED DEVELOPMENT (RAPID) PROJECT – PACKAGE 20B2

(TENDER NO : RAPID/TC1/21-2014-P20B2)

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GENERAL CONDITIONS OF CONTRACT

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MOLF Ramunia Section B – General Condition of Contract_18042014

SECTION INDEX

1.0 DEFINITIONS 5

2.0 CONTRACT DOCUMENTS 12

3.0 DURATION OF CONTRACT 14

4.0 PROJECT SPECIFICATION AND GENERAL OBLIGATIONS 15

5.0 CONTRACTOR AND SUBCONTRACTORS 22

6.0 POSSESSION OF SITE 25

7.0 CONTRACT ADMINISTRATOR & REPRESENTATIVE 27

8.0 CONTRACT PRICE AND PAYMENT 30

9.0 TIME FOR COMPLETION AND ACCEPTANCE OF WORK 33

10.0 DELAY AND EXTENSION OF TIME 37

11.0 TAXES AND DUTIES 40

12.0 CHANGE ORDER 45

13.0 EXAMINATION 48

14.0 TIME FOR COMPLETION & LIQUIDATED DAMAGES 50

15.0 LIABILITY AND INDEMNITY 52

16.0 INSURANCE 56

17.0 CONTRACTOR’S WARRANTIES 61

18.0 PERFORMANCE BOND 64

19.0 TERMINATION 66

20.0 DISCONTINUATION 70

21.0 SUSPENSION 72

22.0 FORCE MAJEURE 75

23.0 ASSIGNMENT 77




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24.0 COMPLIANCE WITH LAWS 78

25.0 OWNERSHIP AND TITLE 79

26.0 MATERIALS AND CONSTRUCTION EQUIPMENT 80

27.0 CONTRACTOR'S KEY PERSONNEL 82

28.0 LOCAL PARTICIPATION 85

29.0 HEALTH, SAFETY, SECURITY AND ENVIRONMENT 87

30.0 SECRECY 92

31.0 WAIVER 94

32.0 APPLICABLE LAW 95

33.0 ARBITRATION 96

34.0 LANGUAGE 97

35.0 LIENS AND CLAIMS 98

36.0 CONFLICT OF INTEREST 99

37.0 INDEPENDENT CONTRACTOR 100

38.0 ENTIRE AGREEMENT 101

39.0 CODE OF CONDUCT AND BUSINESS ETHICS 102

40.0 NON-EXCLUSIVE AGREEMENT 105

41.0 ANTIQUITIES AND FOSSILS 106

42.0 RECOVERY BY OWNER 107

43.0 COMPLIANCE WITH ENVIRONMENTAL QUALITY ACT 1974 108

44.0 STAMP DUTY 109

45.0 PRICE FLUCTUATION 110

46.0 INTELLECTUAL PROPERTY 113

47.0 NOTICES




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EXHIBIT I - LETTER OF AWARD

EXHIBIT II - MINUTES OF TECHNO-COMMERCIAL MEETING

EXHIBIT III - CLARIFICATION CORRESPONDENCES TO CONTRACTOR’S TECHNICAL AND COMMERCIAL PROPOSALS

EXHIBIT IV - CLARIFICATION TO THE INVITATION TO BID (ITB) DOCUMENT

EXHIBIT V - ADDENDA TO THE INVITATION TO BID (ITB) DOCUMENT

EXHIBIT VI - INVITATION TO BID (ITB) DOCUMENT

EXHIBIT VII - CONTRACTOR’S TECHNICAL AND COMMERCIAL PROPOSALS




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THIS CONTRACT entered into this ……….. day of ……………………… between [ ] , a company incorporated in MALAYSIA and having its registered office at [ ](hereinafter referred to as "OWNER") of the first part and …………………….., a company incorporated under the laws of ……………… and having its head office at ………………………………………….. (hereinafter referred to as "CONTRACTOR") of the second part. OWNER and CONTRACTOR are hereinafter collectively referred to as the “PARTIES”. WHEREAS OWNER is desirous to construct an integrated refinery and petrochemical complex in Mukim of Pengerang, District of Kota Tinggi, Johor Darul Takzim known as RAPID Project (as hereinafter defined as “RAPID PROJECT”). WHEREAS OWNER wishes CONTRACTOR to undertake the WORK (as hereinafter defined) in strict compliance to and in accordance with the terms and conditions herein contained. AND WHEREAS based on the above and the guarantee provided by CONTRACTOR's Parent company OWNER agrees to appoint CONTRACTOR and CONTRACTOR accepts the appointment and represents its willingness to render its fullest assistance and cooperation to OWNER to perform all WORK necessary for the realization of the PROJECT in order to achieve the said intent. NOW, THEREFORE, the PARTIES hereto do mutually agree as follows:




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ARTICLE 1

1.0 DEFINITIONS

The terms and expressions in the CONTRACT, unless the context otherwise requires, shall have the following meanings respectively assigned to them below. Terms not defined hereunder shall have the meaning assigned to them in the Invitation To Bid document (“ITB”). Words importing the singular only shall include the plural if the context requires, and vice versa.

1.1 ASSOCIATED PERSON

Associated Person shall mean a person associated with CONTRACTOR including, but not limited to any of its employees, agents, contractors, SUB-CONTRACTORS, consultants, representatives and agents of CONTRACTOR.

1.2 BID BOND

The Bid Bond submitted by the CONTRACTOR together with the proposal in response to the bidding exercise for the WORK.

1.3 CHANGE ORDER

Change Order means any modification, amendment or addition to, or alteration in or deletion from the WORK, effected in accordance with provisions of Article 12.

1.4 CONTRACTOR’S CONSTRUCTION EQUIPMENT

CONTRACTOR’S CONSTRUCTION EQUIPMENT includes any lifting, transport, earthmoving, deforestation and other equipment, machineries, tools (excluding special tools referred to in Article 26), implements, temporary job site buildings and such other items, all as are required for use by CONTRACTOR for the construction and handing over of the WORK but shall not include MATERIALS.

1.5 CONTRACT

Contract means the terms and conditions of this General Conditions of Contract, and the Exhibits, references and documents attached hereto or incorporated by reference including any subsequent amendments to them.




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1.6 CONTRACTOR Contractor has the meaning assigned to it in the Preamble of the CONTRACT and

shall, where the context so requires, include its SUBCONTRACTORS, employees, agents, workmen and/or representatives, successors and permitted assigns.

1.7 CONTRACT PRICE

Contract Price has the meaning given to it in the CONTRACT subject to such additions thereto or deductions therefrom as may be made under the provisions of the CONTRACT. The Contract Price is provisional with Bills of Quantity and Schedule of Rates except otherwise specified.

1.8 DEPARTURE DATE

Departure Date means the date on which all CONTRACTOR’S CONSTRUCTION EQUIPMENT and other property of CONTRACTOR and SUBCONTRACTOR have been removed from the SITE and all employees, agents and representatives of CONTRACTOR and SUBCONTRACTORS have departed therefrom.

1.9 CUSTOMS CHARGES

Custom Charges means import duty, surtax, sales tax and other statutory imposts assessable under Malaysian law on CONTRACTOR’S CONSTRUCTION EQUIPMENT and materials imported into Malaysia for use in the WORK in accordance with the CONTRACT, but does not include: (a) penalties, interest or fees levied due to the breach of CONTRACT,

negligence or other default of CONTRACTOR or its associated persons; or (b) any TAX assessed or levied in connection with CONTRACTOR’S

CONSTRUCTION EQUIPMENT.

1.10 DEFECTS LIABILITY PERIOD Defects Liability Period means the period from the issuance of any SECTIONAL

PROVISIONAL ACCEPTANCE CERTIFICATE or DEFECTS LIABILITY PERIOD, as the case may be, until FINAL ACCEPTANCE during which the CONTRACTOR is responsible for making good defects and damage as more particularly set forth in Article 17.

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1.11 EFFECTIVE DATE Effective Date shall mean the date of the Letter of Award.

1.12 FINAL ACCEPTANCE Final Acceptance means final acceptance of the WORK by OWNER issuing a

Final Acceptance Certificate following the expiry of the relevant DEFECTS LIABILITY PERIOD as set forth in Article 17.4.

1.13 FINAL ACCEPTANCE CERTIFICATE

Final Acceptance Certificate has the meaning assigned to it under Article 9.10

1.14 GROSS NEGLIGENCE

Gross Negligence means action or inaction with either no regard or reckless disregard for reasonably foreseeable harmful consequences, including, without limitation, harm to health, safety, or property.

11.5 INTELLECTUAL PROPERTY RIGHTS or IPR means any and all current and

future:

(a) intellectual and industrial property rights and interests, including patents, registered designs, copyright, database rights, design rights, topography rights, trademarks, trade names and service marks, in each case whether registered or not, any applications for registration of any of them, and any other rights or forms of protection of a similar nature or having equivalent or similar effect to any of them in any part of the world;

(b) discoveries, trade secrets, inventions, know how, methodologies, ideas, processes, tools, software, improvements and rights in CONFIDENTIAL INFORMATION; and

(c) rights under licenses and consents in relation to any of them.

1.16 MATERIALS

Materials includes any machinery, equipment, materials, supplies and other items (including special tools, if any) specified in the Work Specification which are to be




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supplied by CONTRACTOR (or in the case of special tools to be used in connection with the WORK).

1.17 OVERALL PROVISIONAL ACCEPTANCE CERTIFICATE

Overall Provisional Acceptance Certificate has the meaning assigned to it under Article 9.7.

1.18 OWNER

Owner means [ ] (“[ ]”) and shall include its employees, agents, successors, permitted assigns, and/or designated representative, and where the context requires, includes OWNER'S REPRESENTATIVE.

1.19 OWNER’s CONSULTANT

Owner’s Consultant has the meaning assigned to it in Article 7.

1.20 OWNER CONTRACT ADMINISTRATOR Owner Contract Administrator has the meaning assigned to it in Article 7.

1.21 OWNER's REPRESENTATIVE Owner's Representative has the meaning assigned to it in Article 7.

1.22 PROJECT Project has the meaning given to it in the CONTRACT. 1.23 PROJECT SPECIFICATION Project Specification (sometimes referred to as Work Scope or Scope of Work) is

as contained in Section C – Project Specification of the ITB.




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1.24 PROVISIONAL ACCEPTANCE Provisional Acceptance means initial acceptance of the whole WORK by OWNER

issuing a DEFECTS LIABILITY PERIOD as set forth in Article 9.4. 1.25 RELEVANT OBLIGATIONS

Relevant Obligations shall mean obligations equivalent to those imposed on CONTRACTOR in Clause 39.

1.26 RELEVANT POLICIES Relevant Policies include Part II A (Conflict of Interest) and Part II B (Fighting

Corruption and Unethical Practices) of the PETRONAS Code of Conduct and Business Ethics and other related policies, procedures, guidelines and requirements as updated by PETRONAS from time to time.

1.27 RELEVANT REQUIREMENTS Relevant Requirements means all applicable laws, statutes, regulations and codes

relating to anti-bribery and anti-corruption. 1.28 SECTION Section means a part of the WORK specifically identified as such in the

CONTRACT 1.29 SECTIONAL ACCEPTANCE Sectional Acceptance means the completion of a SECTION as certified by

OWNER by issuing a SECTIONAL PROVISIONAL ACCEPTANCE CERTIFICATE as set forth in Article 9.4.

1.30 SECTIONAL PROVISIONAL ACCEPTANCE CERTIFICATE Sectional Provisional Acceptance Certificate has the meaning assigned to it under

Article 9.4.




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1.31 SITE Site means the Material Off Loading Facilities (MOLF) at Teluk Ramunia in

Pengerang, Johor upon which the WORK is to be realized and shall include any office and/or location where CONTRACTOR or its SUBCONTRACTORS perform any work or services related to the WORK described in the CONTRACT, together with such additional areas as may be allocated in writing by OWNER for temporary use by CONTRACTOR.

1.32 SUBCONTRACT Subcontract means any contract, including but not limited to purchase orders,

placed by CONTRACTOR with a SUBCONTRACTOR. 1.33 SUBCONTRACTOR Subcontractor means any person or company (other than OWNER) having a

contract directly or indirectly with CONTRACTOR and of any tier, including but not limited to suppliers or vendors of MATERIALS for the performance of any part of the WORK.

1.34 TAX or TAXES Tax or Taxes shall include but not limited to all income, profit, withholding,

franchise, excess profits, royalty, other taxes, personal property taxes, employment taxes and contributions imposed or that maybe imposed by law, regulations or trade union contracts, which are imposed by or on behalf the Inland Revenue Board (IRB) or of any taxing authority and includes penalties, interest and fines in respect thereof.

1.35 WORK Work means all duties, obligations and work to be performed and services to be

rendered by CONTRACTOR as expressly set forth in the PROJECT SPECIFICATION in relation to the design, supply, construction and handover of all the works and facilities, including, but not limited to, all work of a permanent and temporary nature and all of CONTRACTOR's activities as described in the Section C - Project Specification as specified in this CONTRACT.




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1.36 In the event of ambiguity, inconsistency or conflict between the provisions of the CONTRACT Form and the Exhibits, the CONTRACT Form shall prevail over the Exhibits.

In the event of ambiguity, inconsistency or conflict between the provisions of the

Exhibits, OWNER shall have the discretion to decide the order of prevalence amongst the Exhibits.

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ARTICLE 2

2.0 CONTRACT DOCUMENTS

2.1 The following Contract Documents together constitute this CONTRACT:

(i) General Conditions of Contract;

(ii) Letter of Award dated [ ];

(iii) Minutes of Techno-Commercial Clarification Meeting;

(iv) Clarification correspondences to CONTRACTOR’S Technical and Commercial Proposals;

(v) Clarification to the INVITATION TO BID (ITB) DOCUMENT (if any);

(vi) Addenda to the INVITATION TO BID (ITB) DOCUMENT (if any);

(vii) INVITATION TO BID (ITB) DOCUMENT; and

(viii) CONTRACTOR’s Technical and Commercial Proposals.

2.2 The Contract Documents are to be read as a whole and are to be taken as

mutually explanatory of one another. The effect or operation of any Article or Clause in the Contract Documents must, unless otherwise specifically stated, be read subject to any relevant qualification or modification in any other Article or Clause in the Contract Documents. In the event of a conflict between the documents which comprise the Contract Documents, the order of precedence shall be as listed in Article 2.1 above.

The fact that any one of the Contract Documents shall specify services or acts to be done in more particularity, or shall require more services or acts to be done in connection with any particular operation, than is required by another of the Contract Documents, is not and shall not be considered as conflict. It is the intention of the Contract Documents and their provisions shall be cumulative.




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2.3 If any discrepancy or divergence exists between any of the documents or parts of any one of them, CONTRACTOR shall immediately notify OWNER of such instances and shall issue instruction in regard thereto. Otherwise the articles of the General Conditions of Contract shall take precedence in the event of ambiguity or it being in conflict or inconsistent with any other referred document. Should CONTRACTOR fail to give notice to OWNER as aforesaid or fail to discover such conflicts, errors or omissions in the aforementioned documents as should reasonably have been discovered by Package Contractor, all costs directly resulting from such failure shall be borne by the CONTRACTOR.

2.4 All standards, codes, instructions, specification, drawings and other documents which are referred to in the Appendices/Schedules/Exhibits shall be deemed incorporated herein by reference and made a part hereof. If any discrepancy or divergence exists between any of the documents or parts of any one of them, CONTRACTOR shall immediately notify OWNER of such instances and shall issue instruction in regard thereto. Otherwise the articles of the CONTRACT shall take precedence in the event of ambiguity or it being in conflict or inconsistent with any other referred document. Should CONTRACTOR fail to give notice to OWNER as aforesaid or fail to discover such conflicts, errors or omissions in the aforementioned documents as should reasonably have been discovered by CONTRACTOR, all costs directly resulting from such failure shall be borne by CONTRACTOR.

2.5 None of the documents herein before mentioned shall be used by CONTRACTOR for any purpose other than for this CONTRACT.

2.6 Any reference or detail provided in any one of the above documents but not in others shall be taken as read in all documents in this CONTRACT.

2.7 The headings and subheadings in the CONTRACT are used for convenience and ease of reference and shall not affect or limit the interpretation or construction of this CONTRACT.

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ARTICLE 3

3.0 DURATION OF CONTRACT

3.1 Subject to the termination provisions of this CONTRACT, this CONTRACT shall commence on the EFFECTIVE DATE and be valid for a period of twenty four (24) months or until completion of the WORK and fulfillment of all of the CONTRACTOR’s obligations under this CONTRACT, whichever is later.

3.2 CONTRACTOR shall complete the WORK within the stipulated time periods as prescribed in Section A - Instruction To Bidder of the ITB, or any other period as specified in the CONTRACT.

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ARTICLE 4

4.0 PROJECT SPECIFICATION AND GENERAL OBLIGATIONS

4.1 CONTRACTOR shall, as an independent contractor, upon and subject to this

CONTRACT, design, construct and complete the WORK shown in Section C – Project Specification of the ITB and described by or referred to in the PROJECT SPECIFICATIONS in compliance therewith using equipment, MATERIALS, goods, workmanship and software of the quality and standards therein specified and if they are not so specified, the selection of any PROJECT SPECIFICATIONS for any kinds and standards of the equipment, MATERIALS, goods and workmanship to be used in the construction of the WORK as approved by OWNER. CONTRACTOR shall also make good any defect, imperfection or any other fault whatsoever which may appear during the DEFECTS LIABILITY PERIOD.

4.2 CONTRACTOR shall execute the WORK and, upon OWNER’s instruction, the

exercise of the optional scope (if applicable). 4.3 CONTRACTOR shall observe and comply with the requirements of ISO

9001:2008 or equivalent standard, which effectively provides detailed procedures for managing the quality of design, construction and service as set out in Section C, Part IV of the ITB and use such procedures and forms as OWNER has developed in relation to the PROJECT which OWNER may amend from time to time by notice in writing to CONTRACTOR subject to the terms and conditions set out hereinafter.

4.4 CONTRACTOR shall strictly comply with the planning and scheduling

requirements as set out in the CONTRACT. 4.5 CONTRACTOR shall organize, schedule and coordinate the carrying out of the

WORK, including the works of SUBCONTRACTORS, suppliers and vendors with the activities of other contractors employed by OWNER in connection with the PROJECT, public or private utilities, any governmental or statutory authority or their authorized servants or agents and shall liaise therewith at all times. OWNER shall reasonably assist CONTRACTOR whenever required at no cost to OWNER. CONTRACTOR shall monitor such coordination and advise OWNER in writing as and when it becomes apparent that the progress of the WORK is likely to be the subject of delay and or disruption and will recommend reasonable proposals to




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reduce or prevent such delay and/or disruption provided that such delay or disruption is not caused by CONTRACTOR. CONTRACTOR shall understand that OWNER, and OWNER’s subcontractors may be working at the SITE during the execution of the WORK and in order to co-ordinate and achieve harmony amongst the parties, CONTRACTOR shall, in accordance with OWNER’s requirements and at CONTRACTOR’s expense, make minor adjustments to its work sequence in such manner as to not unduly interfere with and thereby afford other contractors all reasonable opportunities to carry out their works.

4.6 Accordingly, CONTRACTOR shall:

(a) take all steps to ensure that the design and the WORK are coordinated and integrated with the design and construction of such other works to the extent available to CONTRACTOR, and shall in particular (but without limitation) consult, liaise and co-operate to a possible and reasonable extent with those responsible for carrying out such other works and/or services including the preparation of joint schedules, method statements, coordination drawings and specifications; and

(b) exert reasonable effort not to impede and shall afford all reasonable facilities, access and/or services to OWNER, any public or private utilities company/department, any governmental or statutory authority, their authorized servants or agents and others who may be engaged at the SITE or adjacent thereto (whether employed by OWNER or not) and who are or may carry out work thereon.

4.7 In relation to its obligations under this Article, CONTRACTOR shall be deemed to

have made reasonable allowance in the CONTRACT PRICE and in the schedules for its obligations to coordinate and for any reasonable interference with the progress of the WORK caused by the concurrent and sequential work by others as well as visits by OWNER and/or State and Governmental representatives and for all expenses arising in relation to provision of such facilities, access and/or services.

4.8 In the event that any activity or WORK or the supply of equipment or MATERIAL

the nature of which are necessary for the successful implementation of this CONTRACT but is not specifically mentioned in the PROJECT SPECIFICATIONS, drawings or any of the Contract Documents but becomes necessary to ensure the successful implementation of the WORK according to the specifications laid down in the CONTRACT and the intent thereof, and is known pursuant to established engineering and design principles to be necessary, ancillary or instrumental for the

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successful implementation of a project similar in nature, scope and specifications to the WORK, such activity or WORK shall also become part of the CONTRACT as if the same had been originally included. Such WORK to be provided pursuant to this Article shall not be construed to be that in accordance with Article 12 and as such all costs and expenses incidental thereto shall be for CONTRACTOR’s account.

4.9 CONTRACTOR shall ensure that the WORK is executed in accordance with the agreed time schedule such that the WORK is completed in accordance with the provisions of Article 3.

4.10 If progress on any element of the WORK which is on the critical path for the

implementation of the CONTRACT falls behind schedule, or if progress is not being maintained on items which would become critical if no action were taken, then and in each such case CONTRACTOR shall, at its own initiative take measures acceptable to OWNER to eliminate delay in or mitigate the effect on completion of the WORK in accordance with the CONTRACT.

4.11 If CONTRACTOR fails to take, at its own initiative, measures as aforesaid, or if OWNER does not agree to the measures proposed by CONTRACTOR, OWNER shall have the right at its sole discretion to require CONTRACTOR to, and CONTRACTOR shall forthwith implement such measures as OWNER deems necessary, eliminate the delay in or mitigate the effect on completion of the WORK. Such measures may include but not limited to an increase in the amount of CONTRACTOR’S CONTRUCTION EQUIPMENT and labour, the number of shifts, overtime operations, and/or days of work. All costs and expenses involved in taking any or all of the measures referred to in Articles 4.10 and 4.11 shall be for CONTRACTOR's account and shall not be considered as a CHANGE ORDER.

4.12 CONTRACTOR shall notify OWNER in writing as soon as any factor arises which

is likely to have an effect on the period and/or dates referred to in Article 3, but in no event later than fifteen (15) calendar days after the factor which is likely to affect the schedule/dates as aforesaid could have reasonably been known by CONTRACTOR. Such notification shall not be construed as a discharge of any of CONTRACTOR's obligations under the CONTRACT. Should CONTRACTOR fail to advise OWNER within the aforesaid period without any reasonable justification, then OWNER may at its sole discretion decide that such factor is attributable to CONTRACTOR.

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4.13 CONTRACTOR is deemed to have ascertained the nature and extent of risk relating to the WORK and has gathered all information necessary for it to perform the WORK in accordance with the CONTRACT, including but not limited to information as to the character of the WORK, local conditions and facilities, conditions of labour, wage standards, industrial matters, safety requirements, environmental matters, legislative requirements and approvals required from authorities.

4.14 CONTRACTOR shall be deemed to have inspected and examined the SITE and its surroundings and to have satisfied itself before submitting its bid as to the nature of the ground and subsoil, the form and nature of the SITE, the extent and nature of the work, services, equipment, MATERIALS and goods necessary for the completion of the WORK, the means of communication with and access to the SITE, the accommodation CONTRACTOR may require and in general to have obtained for itself all necessary information as to risks contingencies and all circumstances influencing and affecting the CONTRACT PRICE. Any information or document given or forwarded by OWNER to CONTRACTOR shall not relieve CONTRACTOR of its obligations under the provisions of this CONTRACT. OWNER gives no warranty for the information or documentation either as to the accuracy or sufficiency or as to how the same should be interpreted or otherwise howsoever and CONTRACTOR shall make use of and interpret the same entirely at its own risk.

4.15 No claim by CONTRACTOR for additional payment or extension of time will be allowed on the ground of any misunderstanding in respect of the matters referred to in Article 4.14 or otherwise on the ground of any allegation or fact that is incorrect or that insufficient information was given to CONTRACTOR by any person acting for or on behalf of OWNER nor shall CONTRACTOR be relieved from any risk or obligation imposed on or undertaken by CONTRACTOR under the CONTRACT or any such ground or on the ground that CONTRACTOR did not or could not foresee any matter which may in fact affect or have affected the execution of the WORK.

4.16 CONTRACTOR shall acquire all information and technical data required from other contractors working at the premises of OWNER in order to enable CONTRACTOR to fulfill its obligations under the CONTRACT. Where necessary CONTRACTOR shall ensure proper co-ordination with other contractors and shall keep OWNER always informed in advance. CONTRACTOR shall allow other




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contractors appointed by OWNER to have access to the SITE as instructed by OWNER.

4.17 CONTRACTOR shall not in any way be relieved from any obligation under the CONTRACT should any information whether obtained from OWNER or otherwise be incorrect and/or insufficient and shall make its own enquiries as to the accuracy and adequacy of such information and shall further ensure that it acquires all information required for the proper performance of the WORK.

4.18 Should good engineering, construction or industry practice require any work or

material to be necessary for the proper functioning of the WORK, or should the proper functioning of the WORK warrant the provision of work or material that were omitted from or could reasonably be inferred from the PROJECT SPECIFICATION then CONTRACTOR shall perform all such work, supply or arrange for the supply of all such material at no cost to OWNER as if the same had been originally included or described in the CONTRACT. Such work and material to be provided pursuant to this Article shall not be construed as a CHANGE ORDER under Article 12.

4.19 Any approval, consent, instruction, comment, advice and the like given to

CONTRACTOR under the CONTRACT (or not given, as the case may be) by or on behalf of OWNER shall not relieve CONTRACTOR from any obligation under the CONTRACT.

4.20 CONTRACTOR shall at all times perform the WORK, in such a manner as will

always safeguard and protect OWNER's interests and take all necessary and proper steps to prevent abuse or uneconomical use of facilities made available to CONTRACTOR.

4.21 For the purpose of the execution of the WORK and subject to the Work Permit

rules of OWNER, OWNER shall make access to the necessary parts of the SITE available to CONTRACTOR at no expense to CONTRACTOR, except that OWNER may at its sole discretion limit the access to and use of any such parts of the SITE for safety or other reasons. OWNER however reserves the right at all times to allow other parties in privity of contract with OWNER to be admitted to the SITE. CONTRACTOR shall co-operate with such other parties in privity of contract with OWNER in order that the WORK and the work of such parties may be carried out in such a way as will serve OWNER’s interest.




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4.22 During execution of the WORK and throughout the duration of the CONTRACT, CONTRACTOR shall ensure that no unauthorized person enters the SITE or remains thereon other than as approved and authorized by OWNER.

4.23 CONTRACTOR shall comply promptly with all instructions issued by OWNER. If within seven (7) days of the receipt of a written notice from OWNER requiring compliance with an instruction the CONTRACTOR does not comply therewith then OWNER without prejudice to any other rights or remedies available to OWNER under the CONTRACT may employ and pay other persons to execute any work and/or services whatsoever which may be necessary to give effect to such instruction and all costs incurred in connection with such employment shall be recoverable from the CONTRACTOR as a debt or may be deducted from any money due or to become due to the CONTRACTOR under the CONTRACT.

4.24 CONTRACTOR shall ensure that all WORK be carried out strictly in accordance with OWNER'S health, safety, security and environment standards, codes and rules and in compliance with any Government and/or local regulations which may exist or be made. CONTRACTOR shall ensure that all members of its workforce and those of SUBCONTRACTORS be familiar with and adhere to OWNER'S procedures and practices for working safely.

4.25 CONTRACTOR shall keep the SITE in an orderly and dry condition and during the

work period, CONTRACTOR shall regularly remove all waste and spoils from SITE to the satisfaction of OWNER. The OWNER will nominate an overall waste management company, whom the CONTRACTOR shall engage with for the disposal of all kind of waste generated during the WORK duration. Prior to the commencement of common waste management service, CONTRACTOR shall gather and dispose of all its waste in the areas or dump sites approved by local authorities. Non-authorised dumping shall be corrected by CONTRACTOR at no cost to OWNER.

4.26 CONTRACTOR shall notify OWNER in writing before commencing any portion of

the WORK if, in CONTRACTOR’s opinion, CONTRACTOR is prevented from properly executing such portion of the WORKS. However, such notification shall not relieve CONTRACTOR of its responsibilities under the CONTRACT.

4.27 CONTRACTOR shall notify OWNER regarding defects, errors or inconsistencies that appear in the drawings, specifications or any other documents in the CONTRACT before commencing the portion of the WORK affected. OWNER shall

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not in any event be liable for loss suffered by CONTRACTOR for such defects, errors, omissions or inconsistencies.

4.28 CONTRACTOR and SUBCONTRACTORS, including their agents, shall procure all petroleum, oil and lubricant products required for execution of the WORK solely and exclusively from the OWNER’s Affiliate, PETRONAS Dagangan Berhad, (“PDB”) Southern Region, Johor Baharu. CONTRACTOR, SUBCONTRACTOR and its agents shall submit their request for the product requirements to PDB. CONTRACTOR shall provide the OWNER reports and receipts of the purchase by CONTRACTOR, SUBCONTRACTOR and its agents of the products mentioned herein on a quarterly basis.

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ARTICLE 5

5.0 CONTRACTOR AND SUBCONTRACTORS

5.1 CONTRACTOR shall act as an independent contractor with respect to the WORK,

and neither CONTRACTOR nor any direct or indirect SUBCONTRACTOR of any tier nor the employees, agents, representatives, or workmen of either shall be deemed to be the employees, agents, representatives, or workmen of OWNER in the performance of the WORK.

5.2 CONTRACTOR shall at all times ensure that the WORK is carried out by an adequate organization under the supervision of a fully qualified and authorized representative appointed by CONTRACTOR who shall be duly authorized to receive and carry out instruction from OWNER.

5.3 CONTRACTOR shall at all times employ such staff and shall employ or cause to

be employed such labour on the WORK which will always be in number and of competence (including carefulness, skill and experience) adequate to carry out the WORK in accordance with the CONTRACT. Should in the opinion of OWNER such staff and/or labour be inadequate in number and/or competence, notwithstanding what has been specified in CONTRACTOR's Proposal, CONTRACTOR shall, without extra cost to OWNER and without affecting schedule employ additional or alternative competent staff and shall employ or cause to be employed additional or alternative competent labour.

5.4 (a) CONTRACTOR shall not replace any member of CONTRACTOR's or SUBCONTRACTOR's key personnel as defined in CONTRACTOR's Proposal without OWNER's prior written consent, which consent shall not unreasonably be withheld, but subject to Article 27.

(b) CONTRACTOR shall forthwith and in no later than seven (7) calendar days replace any member of CONTRACTOR's personnel or any SUBCONTRACTOR or member of SUBCONTRACTOR's personnel whom OWNER refuses to allow access to the SITE or perform any part of the WORK. Any cost incurred in connection with such replacement shall be for CONTRACTOR's account.




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5.5 CONTRACTOR shall have complete control of the personnel engaged in the performance of the WORK and shall ensure that all such personnel, shall comply with OWNER's rules and regulations prevailing at the time in question.

5.6 CONTRACTOR shall maintain, and shall ensure that SUBCONTRACTORS maintain, good industrial relations. CONTRACTOR shall maintain conditions and terms of employment on the SITE which are compatible with and at least equal to the normal terms and conditions which apply in the area.

5.7 CONTRACTOR shall inform OWNER on any problem arising or likely to arise in the field of industrial relations and employment policies, and in any specific case requested by OWNER.

5.8 CONTRACTOR shall likewise maintain and shall ensure that SUBCONTRACTORS maintain goodwill with the Government Authorities and various regulatory bodies, and with the general public and where necessary shall consult OWNER in this respect.

5.9 CONTRACTOR shall not be entitled to enter into a SUBCONTRACT for the performance of the whole of the WORK, but subject to the approval of OWNER may have the right to enter into SUBCONTRACTS for the performance of parts of the WORK, all in accordance with the terms of the CONTRACT. When requested by OWNER, CONTRACTOR shall provide OWNER with a copy of SUBCONTRACTS, identifying therein the mandatory clauses CONTRACTOR is to insert into the SUBCONTRACTS pursuant to the CONTRACT.

5.10 CONTRACTOR shall not be relieved from any of its obligations under the CONTRACT by entering into a SUBCONTRACT and CONTRACTOR shall be responsible for the acts, defaults and neglects of any SUBCONTRACTOR of any tier and its employees, agents, representatives, or workmen as fully as if they were the acts, defaults or neglects of CONTRACTOR, its employees, agents, representatives, or workmen.

5.11 CONTRACTOR shall conclude SUBCONTRACTS in its own name and for its own risk. No SUBCONTRACT shall bind or purport to bind OWNER and each SUBCONTRACT shall provide for the possibility of its immediate termination at any time.




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5.12 CONTRACTOR accepts full and exclusive responsibility for the payment of all salaries, wages, commissions, allowances and other remuneration to CONTRACTOR's or any SUBCONTRACTOR's employees, agents or representatives and for the deduction and payment of the applicable TAXES, social premiums therefrom for remittance to TAX or other authorities.

5.13 OWNER’s right to inspect the WORK under the CONTRACT shall apply equally to work performed by SUBCONTRACTORS and CONTRACTOR shall ensure that OWNER can have access to all such SUBCONTRACTORS for the purpose of carrying out inspections and checks.

5.14 The CONTRACTOR shall be deemed to have:-

(a) carefully read the Contract documents to determine all the necessary services, labour, equipment and MATERIALS required for the performance of the WORK;

(b) familiarize itself with the SITE, any restrictions applicable to or associated with

the site whether imposed by any authority or third party and all ingress and egress from it; and

(c) obtain for itself in advance a full understanding and knowledge of the nature

and scope of the WORK and of the conditions under which the WORK will be carried out.

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ARTICLE 6

6.0 POSSESSION OF SITE

6.1 Unless the CONTRACT shall otherwise provide, possession of the SITE as complete as may reasonably be possible but not so as to constitute a tenancy, shall be given on or before the date for possession stated in the Letter of Award to CONTRACTOR who shall thereupon and forthwith commence the WORK and CONTRACTOR shall regularly and diligently proceed with and complete the WORK on or before the date for completion as per the Project Milestone Dates as set out in Section A – Instruction To Bidder of the ITB.

6.2 CONTRACTOR hereby acknowledges that possession of the SITE may be given

in sections or in parts and subject to any other restrictions upon possession of the SITE which shall be stated in the CONTRACT.

6.3 In the event of any delay in giving possession of the SITE from the date for

possession as stated in the CONTRACT or delay in giving any part of the SITE as provided in the CONTRACT, OWNER may issue instructions in regard to the revision of the date for possession and the date for completion or SECTIONAL ACCEPTANCE and PROVISIONAL ACCEPTANCE shall be appropriately revised under Article 10.

6.4 CONTRACTOR shall throughout the progress of the WORK take full responsibility for the adequacy, stability, security and safety of all operations on the SITE other than those of contractors employed directly by OWNER with whose safety and security arrangements CONTRACTOR shall, nevertheless, co-ordinate its obligations under this Article bringing to the immediate attention of OWNER in writing any inadequacy in the arrangements of other contractors which comes to CONTRACTOR’s attention and which could adversely affect the execution of the WORK in accordance with the CONTRACT. CONTRACTOR shall have full regard for the safety and security of all persons on the SITE. CONTRACTOR shall keep and maintain the SITE and the WORK in an orderly state appropriate to the avoidance of danger to all persons.

6.5 CONTRACTOR shall ensure that no unauthorized person enters the SITE or

remains thereon at all times.




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6.6 CONTRACTOR shall ensure that all operations necessary for the execution of the WORK shall be carried out so as not to interfere unnecessarily or improperly with the convenience of the public or the access to, use and occupation of public or private roads or footpaths or to properties whether in the possession of OWNER or of any other persons and CONTRACTOR shall hold harmless and indemnify OWNER in respect of all claims, demands, proceedings, damages, costs, charges and expenses whatsoever arising out of or in relation to such matters in so far as CONTRACTOR is responsible therefore. CONTRACTOR shall also ensure that no road or footpath shall be closed to traffic or pedestrian unless OWNER's written permission shall first have been obtained.

6.7 Where OWNER and its employees or any person or body appointed or authorized

by it carries out any investigation in relation to any accident, failure or other event which has occurred to, in or in connection with the WORK or any part thereof for the purpose of determining the cause or reason for the said accident, failure or event, CONTRACTOR shall render all such necessary assistance and facilities as may be required by OWNER and its employees or such person or body, including the giving of access to all specifications, designs, records and other available information relating to the WORK except for those containing or pertaining to pricing, margins, trade secrets and other proprietary information.

6.8 CONTRACTOR shall use every reasonable means to prevent any of the

highways, bridges or other facilities connecting with or on the routes to the SITE from being damaged by any traffic of CONTRACTOR or any of the SUBCONTRACTORS or suppliers and in particular shall select routes, choose and use appropriate means of transportation and restrict and distribute loads so that any such extraordinary traffic as will inevitably arise from the moving of equipment and materials from and to the SITE shall be limited, as far as reasonably possible, and so that no unnecessary damage may be occasioned to such highways, bridges and other facilities.

6.9 CONTRACTOR shall be entirely responsible for the efficient and safe disposal of

any rain or flood water which falls or accumulates on the SITE as well as any rain or flood water or debris that flows onto the SITE from any adjacent land and any damage caused therefrom. In addition, CONTRACTOR shall be entirely responsible for damage caused solely by CONTRACTOR to neighbouring lands and other properties as a direct result of the CONTRACTOR’s or its SUBCONTRACTOR’s negligence or failure to perform its obligations under the CONTRACT.

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ARTICLE 7

7.0 CONTRACT ADMINISTRATOR & REPRESENTATIVE

7.1 OWNER CONTRACT ADMINISTRATOR

7.1.1 OWNER CONTRACT ADMINISTRATOR is the person who shall be responsible for administering this CONTRACT on OWNER's behalf and for issuing any instructions pertaining to the CONTRACT. OWNER CONTRACT ADMINISTRATOR shall have the authority to make final decisions for OWNER on all questions, controversies or disputes involving the interpretation and implementation of this CONTRACT and all such decisions shall be accepted by CONTRACTOR.

7.1.2 Pursuant to this, OWNER designates __________________________________ as OWNER CONTRACT ADMINISTRATOR.

7.2 OWNER REPRESENTATIVE

7.2.1 OWNER REPRESENTATIVE shall have the right at all times to receive all information pertaining to records, reports and any other information pursuant to the scope of WORK and other EXHIBITS attached hereto. OWNER REPRESENTATIVE shall be entitled to inspect all WORK performed hereunder and to witness and to check all tests on CONTRACTOR’s equipment.

7.2.2 OWNER REPRESENTATIVE shall have the right to reject or disapprove of any part of the WORK which does not conform to this CONTRACT and to decide all questions which may arise relating to the performance of the WORK.

7.2.3 Notwithstanding the above, the presence of and the inspection by OWNER REPRESENTATIVE shall not relieve CONTRACTOR from CONTRACTOR's obligations and duties and shall not prejudice OWNER's rights under this CONTRACT.

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of this CONTRACT. OWNER REPRESENTATIVE’s instructions shall be deemed those of OWNER and shall be complied with by CONTRACTOR.

7.2.5 Pursuant to this, OWNER designates ________________________________________ as OWNER REPRESENTATIVE.

7.3 CONTRACTOR CONTRACT ADMINISTRATOR

7.3.1 CONTRACTOR CONTRACT ADMINISTRATOR is the person who shall be

responsible for and is duly authorised to represent CONTRACTOR at all times during the progress of the WORK and to act on any request made by OWNER in the performance of the WORK pursuant to the terms of this CONTRACT.

7.3.2 The CONTRACTOR CONTRACT ADMINISTRATOR or his nominee shall have full authority concerning the WORK and shall have full authority to proceed with the WORK and every part thereof in conformity with this CONTRACT. OWNER shall be entitled to rely on all decisions and positions of CONTRACTOR CONTRACT ADMINISTRATOR or his nominee as being those of CONTRACTOR. CONTRACTOR CONTRACT ADMINISTRATOR and his nominee shall at all times be the employee of CONTRACTOR.

7.3.3 Pursuant to this, CONTRACTOR designates ____________________________ as CONTRACTOR CONTRACT ADMINISTRATOR.

7.4 PACKAGE CONTRACT REPRESENTATIVE

7.4.1 The person(s) employed by CONTRACTOR who shall have supervisory authority over the WORK and with whom OWNER REPRESENTATIVE may plan and coordinate the performance of the WORK. Notice concerning operations which are transmitted to CONTRACTOR through its designated CONTRACTOR REPRESENTATIVE shall be deemed, for the purpose of this CONTRACT, to have been sufficiently given. CONTRACTOR REPRESENTATIVE and his nominee shall at all times be the employee of CONTRACTOR.




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7.4.2 Pursuant to this, CONTRACTOR designates _______________________________ as CONTRACTOR REPRESENTATIVE.

7.4.3 CONTRACTOR may change the CONTRACTOR REPRESENTATIVE and/or CONTRACTOR CONTRACT ADMINISTRATOR from time to time and give prior written notice of such changes.

7.5 OWNER’s CONSULTANT

7.5.1 OWNER’s CONSULTANT is the entity appointed by OWNER who is authorized

to act on OWNER’s behalf for the management and supervision of the WORK.

7.5.2 Pursuant to this, OWNER designates Consortium comprising of Technip France S.A.S. and Technip Geoproduction (M) Sdn. Bhd. as OWNER’s CONSULTANT.

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ARTICLE 8

8.0 CONTRACT PRICE AND PAYMENT

8.1 In full consideration of the execution of the WORK and of the fulfillment of CONTRACTOR's other obligations under the CONTRACT, OWNER shall, subject to the provisions of the CONTRACT, pay or cause to be paid to CONTRACTOR the CONTRACT PRICE as stipulated in the CONTRACT.

8.2 Notwithstanding anything to the contrary stated elsewhere in this CONTRACT, OWNER shall not be obliged to pay CONTRACTOR any remuneration before satisfactory receipt by OWNER of the Performance Bond, Parental Guarantee pursuant to Article 18 and all relevant insurance policies/cover notes pursuant to Article 16.

8.3 The CONTRACT PRICE will be paid in Ringgit Malaysia and in accordance with the relevant payment terms stated in Section A, Part 3, Attachment 4 of the ITB and Section C, Part IV, 13.0 Project Specification - Specifications, Drawings, Procedures And Requirements (Progress Measurement And Payment) of the CONTRACT. CONTRACTOR shall submit invoices to OWNER for all progress payment in accordance with the procedure agreed between the PARTIES. Each such invoice shall be supported by a certificate stating the actual physical progress achieved and amount earned by the CONTRACTOR. OWNER shall pay the CONTRACTOR the relevant payment within thirty (30) calendar days of the date of receipt by OWNER of the correct invoices together with supporting documents.

8.4 Upon notification of any erroneous billings made by or payments made to CONTRACTOR by OWNER, CONTRACTOR shall within fourteen (14) working days, make appropriate adjustments therein and reimburse to OWNER any amounts of overpayment still outstanding as reflected by the said adjustments, notwithstanding the fact that a temporary withholding or a correction of discrepancy may have been effected previously. Notwithstanding the foregoing, OWNER shall be entitled to deduct such amount from payment due to CONTRACTOR. Accordingly, OWNER shall pay CONTRACTOR any amount of underpayment subject to verification thereof.

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8.5 All payments to be made by OWNER under the CONTRACT shall be remitted into bank accounts to be designated by CONTRACTOR, subject to the following:

(a) OWNER shall have the right to deduct any money properly due to OWNER from CONTRACTOR under the CONTRACT from any payment to be made by OWNER to CONTRACTOR under the CONTRACT.

(b) If OWNER disputes any item or amount in any invoice submitted by

CONTRACTOR, OWNER shall notify CONTRACTOR within thirty (30) working days following receipt of the invoice specifying OWNER's complaint and payment of the disputed items or amounts shall be withheld until settlement of the dispute. Interest shall not be levied on any payment withheld by OWNER. Payments made by OWNER shall not preclude the right of OWNER from thereafter disputing any of the items or amount paid.

Payment of the items or amounts after the settlement of the dispute shall be made within thirty (30) calendar days after receipt of an invoice for such item or amount.

8.6 OWNER shall at all times have the right to carry out audits of CONTRACTOR's

books and records insofar as they relate to any amounts due under CONTRACT. CONTRACTOR shall keep appropriate accounting records and methods to enable OWNER to carry out such audits.

8.7 Payment made by OWNER under this CONTRACT shall not preclude the right of

OWNER to thereafter dispute any of the items invoiced and shall not constitute an admission by OWNER as to the performance by CONTRACTOR of its obligations hereunder and in no event shall any such payment affect the warranty obligations by CONTRACTOR. Any payments withheld shall be without prejudice to any other rights or remedies available to OWNER.

8.8 No additional payment beyond what has been agreed in the CONTRACT will be paid to the CONTRACTOR due to the CONTRACTOR’s lack of understanding of the nature and scope of the WORK which a reasonably prudent contractor should have determined and understood in advance, or due to the CONTRACTOR’s conclusions or interpretations of any data or information nor shall CONTRACTOR be relieved from any risk or obligation imposed on or undertaken by him under the CONTRACT on any such ground or on the ground that he did not or could not foresee any matter which may in fact affect or has affected the execution of the WORK.




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8.9 Any failure by the CONTRACTOR to take account of matters, which may affect the WORK, will not relieve the CONTRACTOR from its obligations under the CONTRACT.

8.10 Payment due to CONTRACTOR may be withheld by OWNER on account of unsatisfactory performance of the CONTRACT, the filing of claims against OWNER caused by acts or omissions of CONTRACTOR or failure of CONTRACTOR to pay amounts when due for labour or materials used by CONTRACTOR in doing WORK or amounts due to CONTRACTOR'S SUBCONTRACTORS on the WORK. OWNER shall have the right to deduct any monies due to the CONTRACTOR under this CONTRACT in the event and on proof of default in payment of wages by CONTRACTOR, for settlement of such claim. Such payment shall be deemed to be a payment made to the CONTRACTOR by OWNER under and by virtue of this CONTRACT.

8.11 CONTRACTOR shall submit the calculation of the final close-out amount not later than thirty (30) calendar days after WORK has been completed.

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ARTICLE 9

9.0 TIME FOR COMPLETION AND ACCEPTANCE OF WORK

9.1 CONTRACTOR shall undertake to commence the WORK on the EFFECTIVE

DATE and to complete the WORK within the time specified in Section A, Part II of the ITB and in accordance with the planned overall RAPID PROJECT workforce ramp up. CONTRACTOR acknowledges that completion of the WORK on time is of prime importance to OWNER and shall ensure that all stages of the WORK are completed within the Date or Time for Completion stipulated under Article 14.

9.2 CONTRACTOR shall notify OWNER in writing when it deems that the WORK is completed including completion of any required tests as specified and prepared as set forth in the CONTRACT. Within fourteen (14) calendar days after receipt of CONTRACTOR’s notification, OWNER shall advise CONTRACTOR of any defects that are discovered.

9.3 If CONTRACTOR is notified of any defects, CONTRACTOR shall take corrective

measures to remove those defects, and again notify OWNER that the WORK is deemed complete. OWNER will then have an additional fourteen (14) calendar days to advise CONTRACTOR of any additional defects before the WORK can be considered as complete.

SECTIONAL ACCEPTANCE

9.4 OWNER shall, upon the written application of CONTRACTOR, issue a SECTIONAL PROVISIONAL ACCEPTANCE CERTIFICATE in respect of any SECTION which has been completed to the satisfaction of OWNER and in accordance with the provisions of the CONTRACT or in respect of any part of the WORK (which part being hereinafter referred to in this Article as "the relevant part") of which OWNER shall have taken beneficial use and occupation.

9.5 In relation to a SECTION, the SECTION shall not be regarded as having reached handover unless it has reached the stage that, inter alia: (a) the OWNER can have full, proper and beneficial use of the SECTION or

part for its intended purpose (save only in so far as such use is limited by reason of any other SECTION or part not having been completed)




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notwithstanding that there may be WORK of a very minor nature still to be executed provided that such WORK do not prevent such full, proper and beneficial use as aforesaid;

(b) the CONTRACTOR has given to the OWNER’S REPRESENTATIVE an undertaking to complete any outstanding work;

(c) the SECTION has passed any commissioning tests relevant thereto;

(d) such training as the OWNER’S REPRESENTATIVE, may direct should be

completed before a SECTION or part thereof can be regarded as completed has in fact been completed; and

(e) any manuals required by the CONTRACT DOCUMENTS to be prepared

before completion of a SECTION has been completed and delivered to the OWNER and in relation to a part that such manuals as the OWNER’S REPRESENTATIVE may direct should be prepared relative to such part before such part can be regarded as completed, have in fact been completed.

PROVISIONAL ACCEPTANCE

9.6 Upon completion of the WORK and all requirements thereof have in the opinion of CONTRACTOR been met; CONTRACTOR shall so notify OWNER in writing. Within thirty (30) days thereafter, OWNER will either notify CONTRACTOR of non-conformance with the requirements of the CONTRACT or upon satisfaction of OWNER, issue a DEFECTS LIABILITY PERIOD. In the former event, CONTRACTOR shall at no cost to OWNER immediately take all actions necessary to rectify such non-conformance to the satisfaction of OWNER.

9.7 As prerequisite to the issuance of DEFECTS LIABILITY PERIOD, CONTRACTOR shall submit to OWNER the following:

i. Performance Bond as per Article 18.3; ii. Test results; iii. Application for close out together with detailed calculation for final

CONTRACT PRICE for the WORK;




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9.8 SECTIONAL ACCEPTANCE and PROVISIONAL ACCEPTANCE of WORK by OWNER shall not relieve CONTRACTOR of any of its continuing obligations under this CONTRACT.

9.9 FINAL ACCEPTANCE of WORK occurs after all repairs, rectification, replacement

and making good thereto have been carried out by CONTRACTOR to OWNER’s satisfaction, at the expiration of the DEFECTS LIABILITY PERIOD and all requirements of the CONTRACT have been satisfactorily met. However, if OWNER discovers a deficiency in the WORK during the DEFECTS LIABILITY PERIOD, and has notified CONTRACTOR in writing during that period, the correction of which has not been completed by CONTRACTOR then the DEFECTS LIABILITY PERIOD shall be extended to, and FINAL ACCEPTANCE of WORK shall occur at, the time CONTRACTOR has satisfactorily completed the aforementioned correction of the WORK in accordance with the CONTRACT. At the end of the DEFECTS LIABILITY PERIOD, CONTRACTOR shall so notify OWNER and OWNER shall issue a FINAL ACCEPTANCE CERTIFICATE of WORK within thirty (30) days of receipt of such notice.

9.10 As a condition precedent to FINAL ACCEPTANCE of WORK, CONTRACTOR shall submit affirmation to OWNER stating that all its commitments in the form of TAXES, duties, dues, debts, etc. pertaining to the WORK have been discharged and there are no claims outstanding.

9.11 CONTRACTOR shall, within thirty (30) days from the FINAL ACCEPTANCE CERTIFICATE, submit to OWNER a Work Closure Certificate stating outstanding billings under the CONTRACT for OWNER’s approval. Such items may include outstanding billing or payment of CONTRACT PRICE, CHANGE ORDER, reimbursable and other charges. OWNER shall not entertain CONTRACTOR's inclusion or amendment to the Work Closure Certificate which may arise beyond the date as described in this Article. CONTRACTOR shall expeditiously resolve whatever outstanding billings and any other obligations under the CONTRACT.

9.12 The DEFECTS LIABILITY PERIOD in respect of any relevant part shall be deemed to have commenced on the date of issue of the relevant CERTIFICATE OF SECTIONAL ACCEPTANCE or DEFECTS LIABILITY PERIOD, whichever is the earlier.

9.13 Notwithstanding the issue of any SECTIONAL PROVISIONAL ACCEPTANCE CERTIFICATE or DEFECTS LIABILITY PERIOD, CONTRACTOR shall maintain




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the insurances stipulated under Article 15 and Article 16, and CONTRACTOR shall give notice to the insurer of OWNER’s occupation or use as aforesaid of the relevant part.

9.14 The relevant part shall not be regarded as having reached PROVISIONAL ACCEPTANCE unless it has reached the stage that, inter alia:

a) OWNER can have full, proper and beneficial use of the relevant part for its intended purpose (save only in so far as such use is limited by reason of any other part not having been completed) notwithstanding that there may be works of a very minor nature still to be executed provided that such works do not prevent such full, proper and beneficial use as aforesaid;

b) CONTRACTOR has given to OWNER an undertaking to complete any outstanding work;

c) the part has passed any tests relevant thereto.

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ARTICLE 10

10.0 DELAY AND EXTENSION OF TIME

10.1 Extension of Time

Provided that the CONTRACTOR has carried out the WORK or any part of the WORK with due diligence and has taken all reasonable steps to avoid or reduce such delay, the Time for Completion of the WORK or any part of the WORK may be extended by OWNER by such further period or periods of time as may be reasonably reflect delay in completion of the WORK or any part of the WORK which has been or being caused by:- i) Events of Force Majeure;

ii) CHANGE ORDER;

iii) Ordering of test, the uncovering or making openings for inspection of any part of the WORK by OWNER which is not intended by or provided for in the CONTRACT unless the test or inspection showed that the WORK, equipment or MATERIAL, goods or workmanship were not in accordance with the provision of the CONTRACT;

iv) Failure of OWNER to give possession of the SITE;

v) Subject to proviso to Article 21, suspension of WORK or any part of the WORK;

vi) Damage, loss or injury to the WORK or part of the WORK caused by one or more of the risks covered by the insurance policies, whichever is applicable; and

vii) Any other grounds for extension of time expressly mentioned in the CONTRACT but not mentioned in this Article 10.

Provided always that CONTRACTOR shall not be entitled to any extension of time where the instructions or acts of OWNER are necessitated by or intended to cure any default of or breach of CONTRACT by CONTRACTOR.

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10.2 Notice of Delay

(a) If the CONTRACTOR is of the opinion that the progress or completion of the WORK or any part of the WORK is or will be or has been delayed by any event including but not limited to the events stated in Article 10.1, CONTRACTOR shall forthwith notify OWNER of such event within ten (10) Days of the occurrence of such event. Within the said ten (10) Day period the CONTRACTOR shall also provide:

(i) the appropriate CONTRACT references (if applicable) to such event of delay;

(ii) the estimated length of the delay and of the extension of time required; and

(iii) details of the effect of the event of delay on the schedule of WORK.

(b) If OWNER is of the opinion that the notice and particulars provided by the CONTRACTOR under Article 10.2 (a) are insufficient to enable OWNER to decide on the CONTRACTOR’S application, OWNER may require CONTRACTOR to provide within five (5) Days or such other period as may be specified by OWNER such further information which OWNER may reasonably require including particulars concerning any event and the circumstances of the delay and the measures planned and/or taken to avoid or reduce delay.

10.3 OWNER’S Decision

Subject to compliance with Articles 10.2 (a) and (b), OWNER shall notify CONTRACTOR in writing within a reasonable time, whether in his opinion the event of delay is one which in principle entitles CONTRACTOR to an extension of time.

10.4 OWNER’S Discretion

Notwithstanding the other provisions of this Article 10, the OWNER may, in his absolute discretion (but is not obliged to), grant a fair, reasonable and necessary extension of time notwithstanding that CONTRACTOR has failed to comply with the provisions of this Article 10.

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10.5 Certificate of Extension of Time

Any decision of OWNER in granting extension of time under this Article 10 shall be notified by OWNER to CONTRACTOR in a certificate (hereinafter referred to as the “Certificate of Extension of Time”), a copy of which shall also be extended to SUBCONTRACTOR where it involves a SUBCONTRACTOR.

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ARTICLE 11

11.0 TAXES AND DUTIES

11.1 CONTRACTOR shall be responsible for and shall pay at its own expense when

due and payable all TAXES assessed against it in connection with the CONTRACT. All TAXES levied on CONTRACTOR shall be for the account of CONTRACTOR and shall not be reimbursed by OWNER.

11.2 CONTRACTOR shall protect and indemnify OWNER and hold OWNER safe and

harmless from any and all claims or liability for TAXES assessed or levied by the Inland Revenue Board of Malaysia (IRB), whichever is applicable against CONTRACTOR or its SUBCONTRACTORS or against OWNER for or on account of any payment made to or earned by CONTRACTOR in connection with this CONTRACT.

CONTRACTOR shall further protect and hold OWNER harmless from all TAXES assessed or levied against or on account of wages, salaries or other benefits paid to or enjoyed by CONTRACTOR’s employees, or employees of its SUBCONTRACTORS, and all TAXES assessed or levied against, on or for account of any property or equipment of CONTRACTOR or its SUBCONTRACTORS.

11.3 OWNER shall have the right to withhold TAXES from payments due to

CONTRACTOR under this CONTRACT to the extent that such withholding may be required by the IRB or relevant tax authorities, and payment by OWNER to the IRB or relevant tax authorities of the amount of money so withheld will relieve OWNER from any further obligation to CONTRACTOR with respect to the amount so withheld. If CONTRACTOR is under the opinion that the payment(s) should not be subject to withholding tax in Malaysia, the CONTRACTOR shall submit to OWNER a letter from IRB or the relevant tax authorities confirming that CONTRACTOR is a resident in Malaysia, failing which OWNER shall consider CONTRACTOR a non-resident in Malaysia for tax purposes until such time that the required letter is submitted to OWNER.

If any withholding is done, OWNER will provide CONTRACTOR with official receipts or other satisfactory evidence in respect of such deduction or withholding.

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11.4 CONTRACTOR shall indemnify OWNER against all claims, demands and causes of action based on any actual TAXES for which they are liable or any actual or alleged failures by CONTRACTOR or its SUBCONTRACTORS to comply with applicable tax reporting, return, or other procedural requirement with respect to the CONTRACT. This indemnity shall include without limitation all penalties, awards, and judgments; court and arbitration costs; attorneys’ fees; and other reasonable expenses associated with such claims, demands, and causes of action.

11.5 CONTRACTOR shall give prompt notice to OWNER of all matters pertaining to

non-payment, payment under protest or claim for immunity or exemption from any TAXES.

11.6 In the event that a refund opportunity arises with respect to any TAX paid by one

party as a result of the transactions governed by this CONTRACT, both parties shall reasonably work together to pursue such refund. If one party receives a refund or a credit for any TAX paid by the other Party with respect to the CONTRACT, then the Party receiving the refund or credit agrees to refund to that other Party the full amount of such refund or credit.

Indirect Tax 11.7 Where tax is applicable to any services rendered by CONTRACTOR under this

CONTRACT, OWNER shall be responsible for and pay the tax when invoiced by CONTRACTOR for any taxable service, provided that CONTRACTOR shall provide OWNER a copy of valid Tax license issued by the Malaysian Royal Customs Department confirming that CONTRACTOR is licensed under the Service Tax Act, 1975 as a taxable person providing taxable services.

11.8 Tax amount shall be separately stated in the prices and rates, and shall be

separately itemised in the invoice.

Customs Charges 11.9 CONTRACTOR shall be responsible for and shall pay at its own expense when

due and payable all CUSTOM CHARGES assessed against it in connection with the CONTRACT.

11.10 CONTRACTOR shall protect and indemnify OWNER and hold OWNER safe and

harmless from any and all claims, demands and causes of action based on any




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actual CUSTOM CHARGES for which they are liable or any actual or alleged failures by CONTRACTOR or its SUBCONTRACTORS to comply with applicable reporting, return, or other procedural requirement with respect to their payment under the CONTRACT. This indemnity shall include without limitation all penalties, awards, and judgments; court and arbitration costs; attorneys' fees; and other reasonable expenses associated with such claims, demands, and causes of action.

11.11 Notwithstanding the fact that goods are imported in the name of OWNER,

CONTRACTOR shall remain responsible for such goods while in Malaysia. CONTRACTOR shall indemnify OWNER from and against any claims, demands and causes of action which may arise as a result of damage to, shortages or overages in inventory of such goods.

11.12 CONTRACTOR shall be responsible for the preparation of all documents required

by the relevant Malaysian Royal Custom Department ("Customs Authority"), in connection with the import and export of goods. CONTRACTOR is also required to provide assistance, information and documentation to OWNER as and when required for any application to be made to the Customs Authorities or any other relevant authorities for the purposes of this CONTRACT.

11.13 CONTRACTOR shall indemnify OWNER from and against any claims, demands

and causes of action brought by Customs Authority which may arise as a result of shortage or overages in inventory of such goods.

11.14 For the purpose of tax exemption application, CONTRACTOR, where applicable,

shall assist OWNER in the application of CUSTOM CHARGES exemption for the Purchase Order/Release Order issued by OWNER and ensure that the description of the items as contained in the commercial invoice shall correspond to the description contained in the exemption form. CONTRACTOR shall promptly provide OWNER with all information as required by the Malaysian Ministry of Finance and/ or any other relevant authority for the purposes of the application of the exemption including but not limited to the following:

(a) description of the Items;

(b) quantity applied;

(c) new or used;

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(d) country of origin;

(e) tariff code number;

(f) date of import;

(g) CIF Value;

(h) rate of import duty;

(i) total import duty;

(j) rate of sales tax;

(k) total sales tax;

(l) total duty/ tax; and

(m) function of the Items. 11.15 For avoidance of doubt, CUSTOM CHARGES as mentioned above shall include

but not limited to any import duty, surtax, sales tax and any other statutory imposts levied, which are imposed by or on behalf of any Customs Authority but does not include penalties, interest and fines levied due to the negligence of CONTRACTOR.

Goods and Services Tax 11.16 This Article shall only apply upon the implementation date of Goods and Services

Tax law in Malaysia. 11.17 The price quoted by CONTRACTOR for any taxable supplies to be made under

this CONTRACT is exclusive of GST. 11.18 Where GST is applicable to any supplies made by CONTRACTOR under this

CONTRACT, CONTRACTOR is entitled to charge GST on the payment of the supply. The consideration for such supply will be increased by an amount calculated as:

A x R

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Where: A is the amount of consideration payable for the supply; and R is the applicable rate of GST

11.19 If CONTRACTOR is liable for GST as contemplated by Article 11.18 then:

(a) the CONTRACTOR shall:

(i) provide to OWNER information that may be reasonably required to establish its liability for GST; and

(ii) do such things and provide such information and documents as

may reasonably be required by the recipient to enable the recipient to claim an input tax credit under the GST law; and

(b) where a taxable supply has been made and consideration charged but the

applicable GST has not been charged, the increase in the consideration required by Article 11.19 shall be paid by OWNER upon the provision of a tax invoice by CONTRACTOR in accordance with the GST law.

Where costs incurred by one party are to be reimbursed by another, the amount to be reimbursed shall be calculated net of any GST input tax credits that the party seeking reimbursement is entitled to in respect of the cost incurred.

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ARTICLE 12

12.0 CHANGE ORDER

12.1 OWNER shall have the right at any time to issue CHANGE ORDER to

CONTRACTOR.

12.2 In the case of CONTRACTOR, CONTRACTOR shall notify OWNER in writing immediately when CONTRACTOR is of the opinion that any work to be performed by CONTRACTOR with respect to the WORK should qualify as a CHANGE ORDER. CONTRACTOR shall so notify OWNER at the earliest practicable time in advance of the date such work is to be commenced, but not later than ten (10) consecutive calendar days after the factor causing the CHANGE ORDER has first shown itself, together with CONTRACTOR's initial advice as to the effect such work has on any of the requirements of the CONTRACT. If and to the extent that OWNER agrees that any such work qualifies as a CHANGE ORDER, CONTRACTOR shall submit its formal proposal in accordance with the following:

For any CHANGE ORDER, either contemplated by OWNER or CONTRACTOR,

(a) CONTRACTOR shall submit its detailed proposal in accordance with the procedures set out in the Section A, Part II – Requirements For Technical Proposal and Section A, Part III – Requirements For Commercial Proposal, and based on either one of the following:- (i) unit rates stated in CONTRACT (Schedule of Rates for CHANGE

ORDER);

(ii) if the main Bill of Quantities cannot be applied, new unit prices which shall be compatible with the actual costs incurred by the CONTRACTOR. The new rates for a new work item will be calculated whenever possible by reference to and consistently with the existing unit prices. To become final, this new item must be recorded and mutually agreed in an amendment to the CONTRACT;

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(iv) hourly labour and daily and / or monthly equipment rates included in the Schedule of Rates for CHANGE ORDER;

(v) cost plus percentage fee for additional supplies and services. The percentage referred herein shall be at five percent (5%) of the actual invoice.

Unless otherwise specified, in case of Article 12.1(a)(iii), (iv) and (v), the CHANGE ORDER amount will be deemed to be inclusive of preliminaries and direct costs and shall therefore not contribute to the final cost amount used to calculate the final preliminaries or final indirect cost.

(b) CONTRACTOR's proposal which shall include the reasonable and

appropriate costs of CONTRACTOR's preparatory work pertaining thereto and such other details as OWNER may require shall be submitted as soon as possible, but not later than ten (10) calendar days after OWNER has requested CONTRACTOR to submit a proposal, unless specifically agreed otherwise.

(c) On approval in writing by OWNER of CONTRACTOR's proposal, the

CHANGE ORDER in question shall be deemed to be incorporated in the WORK. No CHANGE ORDER shall be commenced by CONTRACTOR without OWNER's approval in writing as aforesaid, unless specifically agreed otherwise.

(d) Payment of CHANGE ORDER through labour hourly base rate and equipment daily / weekly / monthly rental rate shall only be made as a last resort when other possible methods are not applicable. In any case, the choice of the method for CHANGE ORDER shall be at the absolute discretion of OWNER.

12.3 If CONTRACTOR fails to submit the proposal referred to in Article 12.1 within the

time specified or in the event OWNER, after negotiation with CONTRACTOR, does not agree to any part of CONTRACTOR's proposal in respect of the contemplated CHANGE ORDER, OWNER shall have the right to instruct and CONTRACTOR shall have the obligation to carry out the CHANGE ORDER. OWNER shall also have the right to instruct CONTRACTOR to carry out an item or items of work for

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the PROJECT when there is disagreement as to whether any such item is part of the WORK or constitutes a CHANGE ORDER.

12.4 The estimate for the CHANGE ORDER shall be prepared at the rates set forth in

the CONTRACT. If the CONTRACT does not contain any rates or prices applicable to the CHANGE ORDER, then suitable rates shall be determined on the basis of the levels of existing comparable CONTRACT rates, or if comparable rates do not exist, new rates shall be agreed, or the WORK shall performed on a lump sum or daywork basis as determined by OWNER.

12.5 Any work to be performed by CONTRACTOR resulting from comments given by

OWNER on any document which are subject to OWNER’s comment, shall not be considered as a CHANGE ORDER and shall be carried out at CONTRACTOR's own expenses to the extent such comments are consistent with the PROJECT SPECIFICATION and/or are based on considerations of safety or good engineering practice.

12.6 CHANGE ORDER shall be settled, invoiced and paid separately from the

CONTRACT PRICE or may be deducted from the CONTRACT PRICE, as the case may be.

12.7 The following shall not be considered under any circumstances as changes in or

within the scope of the WORK, nor shall any of the following be taken into account when calculating the effect upon the CONTRACT PRICE of changes in or within the scope of the WORK nor shall any of the following by themselves be considered as a basis for any adjustment of the CONTRACT PRICE:-

(a) any escalation in the cost of CONTRACTOR’S CONSTRUCTION EQUIPMENT and MATERIALS or labour;

(b) any increase in cost of manpower including changes to wages, rates of pay,

disbursement, benefits, overheads etc.; (c) currency fluctuations; and (d) corrective work, additional services, supply of material, and/or field work

necessary due to CONTRACTOR’s non conformity to the CONTRACT and/or errors or omissions by CONTRACTOR in its drawings, specifications, or workmanship shall not affect the CONTRACT PRICE or the time for completion.

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ARTICLE 13

13.0 EXAMINATION

13.1 (a) OWNER shall have the right at any time to examine the WORK as it is being

performed. The WORK shall at all times be subjected to independent tests or inspections by OWNER and/or its appointed persons at the SITE, or other designated location. CONTRACTOR shall, at its own expense, be responsible for providing safe, necessary facilities and all samples, documents, drawings and lists required for such tests or inspections. The tests and inspections shall be conducted in accordance with the CONTRACT and CONTRACTOR shall submit to OWNER a report on each test and inspection immediately after it is conducted.

(b) No WORK shall be covered up or put out of view without the approval of OWNER, and CONTRACTOR shall afford full opportunity for OWNER to examine and measure any work which is about to be covered up or put out of view and to examine foundations before permanent work is placed thereon. CONTRACTOR shall give due notice to OWNER whenever any such work or foundations is or are ready or about to be ready for examination and OWNER shall, without unreasonable delay, attend for the purpose of examining and measuring such work or examining such foundations unless OWNER considers it unnecessary in which case OWNER shall advise CONTRACTOR accordingly.

(c) CONTRACTOR shall uncover any part or parts of the WORK or make

openings in or through the same as OWNER may from time to time direct and shall reinstate and make good such part or parts to the satisfaction of OWNER. If any such part or parts have been covered up or put out of view after compliance with the requirement of Article 13.1 (b) and are found to be executed in accordance with the CONTRACT, the costs and expenses of uncovering, making openings in or through, reinstating and making good the same shall be borne by OWNER, but in any other case it shall be borne by CONTRACTOR.

No such examination shall relieve CONTRACTOR of any of its obligations under

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13.2 OWNER shall have the right to reject any item of WORK found to be not in accordance with the CONTRACT.

13.3 Should it be considered necessary or advisable by OWNER at any time before PROVISIONAL ACCEPTANCE, to make an examination of work already completed, by removing or dismantling the same, CONTRACTOR shall upon request of OWNER promptly furnish all necessary facilities, labour and material.

13.4 (a) Any work to be performed by CONTRACTOR resulting from examination or rejection as referred to in Articles 13.1, 13.2 and 13.3 shall (except as provided for in Article 10.1 (iii)) not be regarded as a CHANGE ORDER.

(b) The cost of making the tests called for in the PROJECT SPECIFICATION

shall be borne by CONTRACTOR. If any supplementary test is ordered by OWNER and if the test shows that

the relevant part of the WORK (including any MATERIALS) is in full compliance with the requirements of the CONTRACT, the cost of such test will be borne by OWNER. In all other cases the cost shall be borne by CONTRACTOR.

(c) Failure on the part of OWNER to notify CONTRACTOR of any deficiency in

the WORK shall not relieve CONTRACTOR of any of its obligations under the CONTRACT nor shall it affect any right of the OWNER to take action against the CONTRACTOR in respect of a breach by the CONTRACTOR of any of its obligations under the CONTRACT.

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ARTICLE 14

14.0 TIME FOR COMPLETION & LIQUIDATED DAMAGES

14.1 If CONTRACTOR for any reason, other than event of Force Majeure or OWNER's failure to discharge its part of the contractual obligations, fails to execute the WORK such that the Time or Date for Completion referred to in Article 9.1 above has not been met, or within any extended time given under the CONTRACT, CONTRACTOR shall be liable for and shall pay to OWNER, as OWNER’s remedy, liquidated damages at the rate of:- Sectional Acceptance - 0.33% of the CONTRACT PRICE per day of delay with a maximum of five per cent (5%) of the CONTRACT PRICE Overall Provisional Acceptance - 0.33% of the CONTRACT PRICE per day of delay with a maximum of ten per cent (10%) of the CONTRACT PRICE.

Description % Contract value per

Day

Max LAD (% of Contract Value)

Sectional Acceptance (Wharf C1 and C2, access road to wharf and associated dredging work) Completion shall be within eight (8) months T0+8 months

0.33 5

(up until the date for Overall Provisional Acceptance)

Overall Provisional Acceptance Completion (T0+12 months)

0.33 10

It is agreed that the amount payable by CONTRACTOR to OWNER pursuant to

this Article 14.1 has been agreed by the PARTIES as representing the likely loss to OWNER as a result of CONTRACTOR's failure to meet its obligations under Article 14.1.

14.2 OWNER may, without prejudice to any other method of recovery, deduct the

amount of such liquidated damages from any payment due to or which may become due to CONTRACTOR.

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14.3 Should this method of recovery be not satisfactory to OWNER, OWNER may require CONTRACTOR and CONTRACTOR shall pay OWNER directly such amount of liquidated damages due. The deduction by OWNER or the payment by CONTRACTOR of any amount of liquidated damages shall not relieve CONTRACTOR from its obligations and liabilities under the CONTRACT.

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ARTICLE 15

15.0 LIABILITY AND INDEMNITY

15.1 CONTRACTOR’S EMPLOYEES CONTRACTOR shall, to the fullest extent permitted by law, be absolutely liable for,

and hereby indemnifies OWNER and OWNER’s CONSULTANT from and against all claims in respect of all injuries to, including death of any of CONTRACTOR’S or SUBCONTRACTOR’S personnel, employees, servant or agents.

15.2 DAMAGE TO CONTRACTOR’S PROPERTY

CONTRACTOR shall to the fullest extent permitted by law be absolutely liable for, and hereby indemnifies OWNER and/or OWNER’s CONSULTANT from and against all claims in respect of all loss or damage to property of CONTRACTOR and SUBCONTRACTOR, or any of CONTRACTOR’S or SUBCONTRACTOR’S personnel, employees, servants or agents.

The liability and indemnity specified herein in these Articles 15.1 and 15.2 shall apply in full even though the injuries (including death) loss or damage was caused by or contributed to or was partly attributable to any act, omission, fault, negligence or lack of due diligence of OWNER and/or OWNER’s CONSULTANT or any of its respective personnel, employees, servants or agents and CONTRACTOR shall not seek contribution from such person or persons for such reason.

15.3 OWNER’S and/or OWNER’s CONSULTANT EMPLOYEES

OWNER and/or OWNER’s CONSULTANT shall be absolutely liable for, and hereby indemnifies CONTRACTOR from and against all claims in respect of all injuries to, including death of any and all employees of OWNER and/or OWNER’s CONSULTANT.

The liability and indemnity in this Article 15.3 shall apply in full even though the injuries (including death) loss or damage was caused by or contributed to or was partly attributable to any act, omission, fault, negligence or lack of due diligence of CONTRACTOR or any of its respective personnel, employees, servants or agents.

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15.4 DAMAGE TO OWNER’S PROPERTY To the fullest extent permitted by law, CONTRACTOR shall indemnify and hold

OWNER and OWNER’s CONSULTANT harmless against all claims, proceedings, damages, expenses, liabilities, losses including costs and legal fees (on a solicitor client basis) arising out of or connected with all damage to or destruction or loss of property whether real or personal or otherwise, beneficially and/or absolutely owned or operated by or under the responsibility of OWNER arising out of any act or omission of CONTRACTOR or SUBCONTRACTOR and their respective officers, employees, agents or representatives without regard to whether any act or omission of OWNER and/or OWNER’s CONSULTANT contributed in whole or in part to the damage, destruction or loss.

However, CONTRACTOR shall not be responsible for nor be liable to indemnify

and hold OWNER and/or OWNER’s CONSULTANT harmless for any property damage or loss caused solely by the Gross Negligence of OWNER and/or OWNER’s CONSULTANT. Furthermore, CONTRACTOR’S indemnity shall not exceed Ringgit Malaysia Five Million (RM 5,000,000) for any one occurrence or series of losses arising from one cause.

OWNER’S existing and owned property shall include but not be limited to:-

a) Property existing separately from the WORK and in reasonable proximity to the SITE; or

b) WORK or part of the WORK for which OWNER has issued a DEFECTS

LIABILITY PERIOD.

15.5 LOSS OF OR DAMAGE TO WORK CONTRACTOR shall indemnify and hold OWNER and OWNER’s CONSULTANT

harmless from and against all claims, proceedings, damages, expenses, liabilities, losses including costs and legal fees (on a solicitor client basis) arising out of or connected with all damage to or destruction or loss to the WORK or any part thereof, beneficially and/or absolutely owned by or under the responsibility of OWNER arising out of any act or omission of CONTRACTOR or SUBCONTRACTOR and their respective officers, employees, agents or representatives without regard to whether any act of omission of OWNER and/or OWNER’s CONSULTANT contributed in whole or in part to the damage, destruction or loss.

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However, CONTRACTOR shall not be responsible for nor be liable to indemnify

and hold OWNER and/or OWNER’s CONSULTANT harmless for any property damage or loss caused solely by the Gross Negligence of OWNER and/or OWNER’s CONSULTANT.

15.6 INDEMNITY TO THIRD PARTIES To the fullest extent permitted by law, CONTRACTOR shall indemnify and hold

OWNER and OWNER’s CONSULTANT safe and harmless from and against:- a) all injuries to, including death of, and b) loss of or damage to property of third parties arising out of or in connection with the performance of the WORK

whether or not such loss or damage was caused by or contributed to in whole or in part or was partly attributable to any act, omission, fault, negligence or lack of due diligence of OWNER and/or OWNER’s CONSULTANT or any of its agents. CONTRACTOR’S indemnity hereunder shall not exceed Ringgit Malaysia Five Million (RM 5,000,000) for any one occurrence. The respective liabilities of CONTRACTOR and OWNER as to the amount over and above the Ringgit Malaysia Five Million (RM 5,000,000) shall be determined according to law.

15.7 SUBCONTRACTORS AND VENDORS CONTRACTOR shall without prejudice to its own obligations and guarantees

acquire for itself from SUBCONTRACTORS and vendors the best obtainable suitable indemnities and protection in respect of accidents and injuries to employees and third parties, liabilities for defects and error, liquidated damages for delay, SUBCONTRACTORS and/or vendors default, insolvency or bankruptcy and other contingencies.

CONTRACTOR shall hold harmless and indemnify OWNER and OWNER’s

CONSULTANT from and against all liens, attachments or claims by SUBCONTRACTORS or persons claiming to be SUBCONTRACTORS in connection or arising out of the WORK.

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15.8 CONSEQUENTIAL LOSS

Neither OWNER and/or OWNER’s CONSULTANT nor CONTRACTOR shall be liable to the other for any indirect, special or consequential damages including but not limited to loss of revenue or anticipated profits, loss of business whether foreseeable or not resulting from the carrying out of operations or the exercise of rights by the PARTIES under this CONTRACT.

15.9 JOINT AND SEVERAL LIABILITY The liabilities of CONTRACTOR shall be joint and several with regard to

performance of WORK under this CONTRACT notwithstanding CONTRACTOR’S individual obligations under CONTRACT. (Article 15.9 is only applicable if CONTRACTOR is an incorporated JV or Consortium)

15.10 NO RELIEF Neither:-

a) OWNER effecting any insurance required or permitted to be effected by it under the CONTRACT; or

b) any delay or difficulty in claiming under the insurances,

shall suspend or otherwise affect or relieve the CONTRACTOR from any of its obligations under the CONTRACT including without limitation its obligations under Article 16 and this Article.

15.11 The indemnities given by the CONTRACTOR shall not be reduced by reasons of

any negligence or omission of OWNER and/or OWNER’s CONSULTANT in failing to supervise or control the CONTRACTOR's SITE operations or methods of working or to detect or prevent or remedy defective WORK or to ensure proper performance of any other obligations of the CONTRACTOR under this CONTRACT.

15.12 CONTRACTOR shall be solely responsible for the costs of all loss or damage

caused by the willful misconduct, act, omission or negligence of CONTRACTOR, its SUBCONTRACTOR, and/or their respective officers, agents or employees.

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ARTICLE 16

16.0 INSURANCE

16.1 Without prejudice to CONTRACTOR’s liability and responsibility as contained

elsewhere in the CONTRACT, CONTRACTOR shall procure, and maintain at its own cost and expense during performance of the WORK, the following insurance applicable to its operations with respect to and for the duration of this CONTRACT.

a) Workers’ Compensation and/or Employer’s Liability Insurance and/or any

other insurance with statutory limits as required by the laws of Malaysia to provide for payment to its employees employed on or in connection with the WORK covered by this CONTRACT and/or their dependents;

b) Motor Vehicle Liability Insurance for owned, non-owned and hired units

covering the use of such vehicles in accordance with the applicable laws;

c) All Risks Physical Damage Insurance to cover the full replacement value of CONTRACTOR’S CONSTRUCTION EQUIPMENT used, owned, leased or hired by CONTRACTOR;

d) Comprehensive General Liability Insurance in the amount of not less than Ringgit Malaysia Five Million (RM 5,000,000) for any one claim or series of claims arising out of an accident or occurrence resulting in bodily and/or personal injury including death and property damage or destruction to any person or property which shall arise out of or in consequence of CONTRACTOR’s performance of the WORK;

e) “All Risks” Cargo insurance to cover all MATERIALS from the respective warehouse and/or point of supply and/or place of manufacture until arrival at SITE which for this purpose shall mean after unloading or, in the event the equipment which cannot reasonably be inspected at time of unloading, within thirty (30) days of unloading at SITE. Such insurance shall further include insurer’s agreement to contribute to fifty percent (50%) of the claim in the event of any loss or damage being discovered after arrival at SITE of the relevant MATERIALS and where it is not possible to ascertain

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whether such loss or damage occurred prior to the said arrival or subsequently;

f) Hull and Machinery insurance for all watercraft or marine craft or vessel owned, hired, chartered, leased or used by CONTRACTOR, in the performance of the WORK for an amount of not less than the full replacement value of each such craft or vessel, including cover for full collision liability and the cost of removal of debris or wreck;

g) Protection and Indemnity insurance or Marine Liability insurance for all watercraft or marine craft or vessel owned, hired, chartered, leased or used by CONTRACTOR covering CONTRACTOR’s liabilities including but not limited to crew, pollution, contractual and wreck removal arising from the use and/or operation of the said craft or vessel for an amount of not less than Ringgit Malaysia Ten Million (RM 10,000,000) or the value of the said craft or vessel whichever is higher; and

h) Any other insurance as may be required by law which CONTRACTOR is

subject to.

16.2 DEDUCTIBLES AND WARRANTIES All deductibles applicable to the insurances stipulated in Article 16.1 shall be for

the account of and be paid by CONTRACTOR. Any breach by CONTRACTOR of conditions and/or warranties contained in such policies of insurance shall also be for the account of the CONTRACTOR.

16.3 ADDITIONAL INSURED AND CROSS LIABILITY CONTRACTOR shall name OWNER and OWNER’s CONSULTANT as additional

insured in respect of the policies specified in Article 16.1(d) and (g) and shall further include a cross liability provision. All other insurances where OWNER and/or OWNER’s CONSULTANT is not named as additional insured with CONTRACTOR shall include a waiver of all express or implied rights of subrogation against OWNER and/or OWNER’s CONSULTANT.

16.4 SUBCONTRACTORS CONTRACTOR shall be responsible viz-a-viz OWNER that any

SUBCONTRACTOR where applicable shall take out and maintain at its cost

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similar insurances as referred to above covering its liability to third parties, its personnel, owned, non-owned and hired motor vehicles, equipment, material supplies and any property of SUBCONTRACTOR at the SITE.

16.5 EVIDENCE OF INSURANCE AND CANCELLATION Not later than fourteen (14) working days prior to the commencement of the

WORKS, CONTRACTOR shall furnish to OWNER copies of Certificates of Insurance and/or Policies evidencing the insurance coverage required in Article 16.1. Renewal and/or extension of such certificates of insurances shall be furnished to OWNER as and when applicable. CONTRACTOR shall cause the insurer to endorse such policies of insurances to provide OWNER with not less than thirty (30) calendar days of cancellation or amendment thereof. If such insurance is cancelled, CONTRACTOR shall obtain other insurances at its own cost in accordance with Article 16.1.

Should CONTRACTOR at any time neglect or refuse to provide or renew any

insurance required herein or should any insurance be cancelled, OWNER shall have the right to procure such insurance and, in such event, any sum so paid by OWNER shall immediately become due and payable to OWNER by CONTRACTOR or OWNER shall be entitled to deduct such sums from any monies due or which may become due to CONTRACTOR in addition to any other remedies OWNER may have under this CONTRACT.

16.6 INSURING COMPANIES CONTRACTOR shall obtain the insurance described in Article 16.1 from

reputable and financially secure companies licensed or incorporated in Malaysia and acceptable to OWNER.

16.7 CONSTRUCTION ALL RISKS AND GENERAL LIABILITY INSURANCE OWNER shall at all times until expiration of the DEFECTS LIABILITY PERIOD at

its own expense provide and maintain the following insurances:-

a) Construction All Risks Insurance against all risks of physical loss or damage to the WORK including all equipment and MATERIALS incidental thereto and which are to be incorporated into the WORK, except CONTRACTOR’S CONSTRUCTION EQUIPMENT, from the date of CONTRACT award until the end of the DEFECTS LIABILITY PERIOD. The

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deductible amount for Construction All Risks Insurance is Ringgit Malaysia One Million (RM 1,000,000) for each and every occurrence.

b) Comprehensive General Liability Insurance in the amount of Ringgit

Malaysia Thirty Million (RM30,000,000) for any one claim or series of claims arising out of an accident or occurrence resulting in bodily and/or personal injury, including death and property damage or destruction to any person or property which shall arise out of the WORK. This insurance shall however apply in excess of and over and above the insurance carried by CONTRACTOR in accordance with Article 16.1(d) above.

All losses within the deductible amount stated in the above insurance will be for

the account of and be paid by CONTRACTOR. Any breach by CONTRACTOR of condition and/or warranties contained therein shall also be for the account of CONTRACTOR.

OWNER shall include CONTRACTOR, OWNER’s CONSULTANT and

SUBCONTRACTORS as additional insured on such policy and shall cause the insurers thereof to waive all express and implied rights of subrogation against such parties. The policy under Article 16.7(b) shall include a cross liability provision in favour of OWNER, OWNER’s CONSULTANT, CONTRACTOR and SUBCONTRACTOR, where applicable.

16.8 CO-OPERATION WITH INSURER CONTRACTOR, SUBCONTRACTORS and OWNER shall co-operate fully with

the insurance carrier furnishing the insurance policies specified in Articles 16.1 and 16.7 in the event of any claim.

16.9 NOTICE OF CLAIM Notice of any occurrence which may give rise to any claim for loss or damage

covered under Article 16.1 and 16.7 above shall be given by CONTRACTOR to OWNER, giving full details of such occurrence, without delay.

16.10 APPLICATION OF INSURANCE MONIES Upon the occurrence of any loss or damage to the WORK from any cause

whatsoever the CONTRACTOR shall proceed immediately to restore, replace or repair the same free of charge, save only that any monies, if and when received,

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from the insurance under this Article shall be paid in the first place to OWNER and then (less only the aforesaid percentage for professional fees, if any) released to the CONTRACTOR, progressively calculated as from the date of receipt of the monies in proportion to the extent of the WORK of restoration, replacement or repair previously carried out by the CONTRACTOR, but having regard also to any likely shortfall or deficit in the money so paid and to the CONTRACTOR’S consequential obligation in such event to reinstate an appropriate proportion of the loss or damage represented by such shortfall or deficit free of charge.

16.11 CONTRACTOR’S LIABILITY

Notwithstanding the above, the provision of all insurances shall not limit or reduce CONTRACTOR’S liability and responsibility as contained elsewhere in the CONTRACT.

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ARTICLE 17

17.0 CONTRACTOR’S WARRANTIES

17.1 CONTRACTOR warrants that it has the experience and capability, including

sufficient and competent personnel to perform the WORK efficiently and expeditiously, and CONTRACTOR warrants that it shall continuously furnish its personnel to perform the WORK. CONTRACTOR shall perform the WORK with skill and diligence and in a professional manner and shall adopt a standard no less than the generally accepted industry standards. CONTRACTOR shall also warrant that the WORK be performed to the satisfaction of OWNER in accordance with the requirements and conditions of the CONTRACT.

17.2 CONTRACTOR warrants that the WORK comply with the requirements of this

CONTRACT including any technical specifications, free from defects in workmanship, fit and suitable for the purpose and use for which they are intended as stated in this CONTRACT. The scope of CONTRACTOR’s warranty shall cover all expenses incurred with respect to equipment, materials, labour and all direct cost and remedy of the defective WORK.

17.3 CONTRACTOR shall at its own cost, perform any corrective action which may be

necessary as a result of CONTRACTOR’s failure to provide WORK with such level of skill and diligence, or which result from failure of CONTRACTOR’s management, personnel or their respective representative(s) to observe and exercise a standard of care which other contractors normally practise, provided CONTRACTOR is given notice of such failure within the DEFECTS LIABILITY PERIOD.

17.4 The DEFECTS LIABILITY PERIOD shall be twelve (12) months commencing from

the date of the issuance of DEFECTS LIABILITY PERIOD.

17.5 In the event that within the DEFECTS LIABILITY PERIOD, in OWNER's opinion it appears that the condition guaranteed by CONTRACTOR in Article 17.1 has not been or is no longer met, OWNER will notify CONTRACTOR in writing thereof. Promptly upon receipt of OWNER's written notice of any defect in the WORK during the applicable DEFECTS LIABILITY PERIOD, CONTRACTOR shall repair the affected portion or portions thereof and perform such tests as OWNER may require in order to verify that such repair comply with the requirements of the

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CONTRACT. CONTRACTOR shall bear all costs incidental to such repair, replacement, and test.

17.6 The DEFECTS LIABILITY PERIOD for that part of the WORK remedied by CONTRACTOR in accordance with Article 17.5 shall recommence in full from the date of re-acceptance by OWNER of such part of the WORK, except that in no event whatsoever will CONTRACTOR's guarantee obligation extend beyond twelve (12) months from the date of PROVISIONAL ACCEPTANCE.

17.7 Upon receipt of OWNER's notice under Article 17.5 CONTRACTOR shall forthwith notify OWNER of CONTRACTOR's proposals for complying with CONTRACTOR's obligations in Article 17.5 and in particular specify the amount, if any, of downtime, of each part or parts of the WORK affected, which will be necessary if CONTRACTOR's proposals are implemented. OWNER shall then either: (a) approve CONTRACTOR's proposals, in which case CONTRACTOR shall

commence remedial work in accordance with CONTRACTOR's proposals with all possible speed; or

(b) suggest alternative proposals such that CONTRACTOR's obligations in

Article 17.5 are fully complied with, in which case CONTRACTOR shall commence remedial work in accordance with OWNER's alternative proposals with all possible speed.

17.8 If CONTRACTOR does not begin its plan for repairs within the time mutually

agreed or if CONTRACTOR and OWNER fails to reach agreement on such a plan within five (5) calendar days of CONTRACTOR’s receipt of OWNER’s notice of such breach, OWNER, after advising CONTRACTOR in writing, shall be entitled at its options and at CONTRACTOR’s expense to perform or have third parties perform such work as is necessary to remedy or cause to be remedied such breach or to pursue such other remedies as may be available to it by law. OWNER’s actions under this Article 17.8 shall not prejudice OWNER’s rights under Article 19. If the WORK or part thereof are WORK which CONTRACTOR should have carried out at CONTRACTOR's own cost, OWNER shall in addition to its right to invoke any Performance Bond which may have been furnished by the CONTRACTOR, be entitled to recover from CONTRACTOR the total cost to OWNER thereof or may deduct the same from any monies due or which may become due to CONTRACTOR and if there are none or insufficient monies




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available, CONTRACTOR shall reimburse OWNER within thirty (30) days after invoicing for all such rates.

17.9 The costs to CONTRACTOR resulting from the fulfillment of its obligations set forth in this Article 17 shall be borne by CONTRACTOR.

17.10 CONTRACTOR shall when fulfilling its obligations referred to in Article 17.5 keep

OWNER fully informed in writing of the action that will be taken and the results obtained. Each such action requires OWNER's prior written approval which approval will not be unreasonably withheld.

17.11 CONTRACTOR shall obtain from its SUBCONTRACTORS and suppliers, for assignment to OWNER, the best possible warranties and guarantees with respect to the services, materials and workmanship of third-party manufactured equipment and materials utilised by CONTRACTOR for the WORK. In the event that CONTRACTOR obtains more favourable warranties and guarantees from its SUBCONTRACTORS and suppliers than those stated in this Article, such warranties and guarantees shall be assigned to OWNER.

17.12 OWNER’s inspecting, testing, witnessing tests, paying invoices, and/or acceptance of WORK or any part thereof shall not relieve CONTRACTOR of any of his obligations and/or liabilities under this CONTRACT.

17.13 The rights and remedies of OWNER provided by this Article 17 are in addition to any other rights and remedies provided by law or in equity or otherwise.

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ARTICLE 18

18.0 PERFORMANCE BOND

18.1 As a condition precedent to the commencement of any WORKS under this CONTRACT, the CONTRACTOR shall furnish with the OWNER:

(a) an irrevocable and unconditional on demand Bank Guarantee in the form provided by the OWNER issued by a bank licensed and operating in Malaysia and approved by the OWNER, which shall be held or remain in full force until after the issuance of FINAL ACCEPTANCE CERTIFICATE under Article 9 for an amount equivalent to ten percent (10%) of the original CONTRACT PRICE for the due observance and performance of the CONTRACT (“Performance Bond”); and

(b) a Parent Company Guarantee as requested and in the form provided by the OWNER which shall be held or remain full force until the issuance of FINAL ACCEPTANCE CERTIFICATE for the due observance and performance of this CONTRACT;

such guarantees are to be binding not withstanding such CHANGE ORDER, alteration or extension of time as may be made, given, conceded or agreed under the CONTRACT. The format of the Performance Bond shall be as per Section A, Part I Attachment 3 – Form of Performance Bond of the Contract Documents. The expense of obtaining, preparing, completing and stamping of such instrument shall be borne by the CONTRACTOR.

18.2 The Performance Bond shall be reduced accordingly to an amount equivalent to five percent (5%) of the original CONTRACT PRICE for the due observance and performance of the CONTRACT which shall be in full force from the issuance of DEFECTS LIABILITY PERIOD until the issuance of FINAL ACCEPTANCE CERTIFICATE. Provided always that as a condition precedent to the issuance of the DEFECTS LIABILITY PERIOD, the CONTRACTOR shall furnish with the OWNER the reduced Performance Bond accordingly.

18.3 The CONTRACTOR shall be obliged to keep the bond specified in Clauses 18.1 and 18.2 valid, in full force, effectively renewed and extended for the duration stated, wherein such renewals and extensions shall be submitted to the OWNER at least one (1) month before its expiry. The OWNER shall be entitled without

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prejudice to any other rights or remedies that the OWNER may have against the CONTRACTOR, upon the CONTRACTOR’s failure to keep the bond specified in Clause 18.1 and 18.2 valid, in full force and effectively renewed and extended, to make a demand on the bond and guarantee and / or withhold all or any payment due or becoming due to the CONTRACTOR under the CONTRACT, until the CONTRACTOR ensures that such bond is made valid, is in full force or is effectively renewed or extended.

18.4 Further to the provisions in Clauses 18.1 and 18.2, if the CONTRACTOR commits any breach of his obligations under the CONTRACT, the OWNER or the OWNER’S REPRESENTATIVE on its behalf may utilize and make payments out of or deductions from the Performance Bond or any part thereof in accordance with the terms of this CONTRACT or forfeit the same. The OWNER shall also have the right to call on the said bank guarantee if the CONTRACTOR fails to comply with the HSE requirements stipulated in Section C – Project Specification such that an incident of the non-compliance results in fatality.

18.5 Whenever the value of a CHANGE ORDER or aggregate of CHANGES ORDER

exceeds the 10% of the CONTRACT PRICE, CONTRACTOR shall provide an adjustment of the Performance Bond referred to in Article 18.1 in an amount equal to the percentage of the CHANGE ORDER.

18.6 Should the expiry date of the Bank Guarantee required to be furnished pursuant to Article 18.1 occur before the expiry period mentioned above, the CONTRACTOR shall provide at least fourteen (14) days before the date of expiry, a fresh guarantee in the form similar to and in the amount of those previously provided, except for a revised date of expiry which shall be not earlier than three (3) months after the end of duration of CONTRACT. Should CONTRACTOR fail to provide the fresh guarantee as required, OWNER shall without prejudice to all its other rights under the CONTRACT or the law, invoke the Bank Guarantee referred to in Article 18.1.

18.7 Further, and within fourteen (14) days of the award of this CONTRACT, CONTRACTOR shall furnish OWNER with Parental Guarantee duly executed by principal partner, associate and/or parent company of the CONTRACTOR, as may be requested by OWNER in the form as provided in Section A, Part I – General Requirements of the ITB.

END OF ARTICLE

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ARTICLE 19

19.0 TERMINATION

19.1 Termination Without Cause:

(a) OWNER may at any time, terminate without cause the WORK by giving fourteen (14) days prior written notice to CONTRACTOR that OWNER intends to terminate the WORK, specifying the WORK to be terminated, and the effective date of termination.

(b) Should OWNER terminate this CONTRACT without cause, CONTRACTOR

shall stop performance of all WORK on the effective date of termination.

(c) Upon receipt and verification of CONTRACTOR's invoice, OWNER shall pay CONTRACTOR all amounts properly due for the WORK performed prior to the date of termination and all expenses resulting directly from the termination, as approved by OWNER.

19.2 If CONTRACTOR breaches any requirement of the CONTRACT or if

CONTRACTOR is not executing the WORK in accordance with the CONTRACT, OWNER may give written notice to CONTRACTOR requiring it to make good such failure and remedy the same.

19.3 If CONTRACTOR is in default as aforesaid, OWNER shall give CONTRACTOR written notice of such default and require CONTRACTOR to take appropriate corrective action without however prejudicing any rights that OWNER may possess.

19.4 Should CONTRACTOR fail or refuse to remedy or fail to commence remedying the matters complained within ten (10) calendar days after written notice is received by CONTRACTOR, OWNER shall have the right to insist upon CONTRACTOR locating a suitable alternative contractor to complete the WORK, provided that the choice of such alternative contractor shall be subject to the approval of OWNER. Should such control and operations be taken over by an alternative contractor above, any cost arising out of the control and operations borne by the alternative contractor or by OWNER which otherwise

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would have been borne by the CONTRACTOR shall be deducted from the amounts due or may become due to CONTRACTOR.

19.5 Failing the said appointment of an alternative contractor within the ten (10)

calendar days period after notice in that regard from OWNER, OWNER may at its own discretion and without prejudice to any other rights it may have, terminate all or part of the WORK by notice in writing and reduce the PROJECT SPECIFICATION and appoint another contractor to undertake the WORK or any part of the WORK and CONTRACTOR shall bear all costs incurred in connection thereto and shall be recoverable from the CONTRACTOR as a debt or may be deducted from any money due or to become due to the CONTRACTOR under the CONTRACT.

19.6 Regardless of the stage of completion of the WORK, if:

(a) CONTRACTOR fails within ten (10) calendar days after the date of OWNER's written notice under Article 19.2 to commence and continuously proceed with all actions required under the CONTRACT to remedy such breach; or

(b) CONTRACTOR abandons or repudiates the CONTRACT; or (c) CONTRACTOR assigns the CONTRACT or subcontracts the WORK

without having received the required consent under from OWNER; or

(d) CONTRACTOR becomes bankrupt or insolvent, goes into liquidation, has a receiving or administration order made against it, compounds with its creditors, or carries on business under a receiver, trustee or manager for the benefit of its creditors, of if any act is done or event occurs which under any applicable law has a similar effect to any of these acts or events; or

(e) CONTRACTOR is liable for and has failed to pay liquidated damages in accordance with Article 14; or

(f) by itself or by the conduct of CONTRACTOR’s REPRESENTATIVES, fails

to comply with any of the HSE requirements stipulated in EXHIBIT VI; or




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(g) failure of CONTRACTOR to provide the Bank Guarantee and Performance/Parental Guarantee under Article 18; or

(h) CONTRACTOR is in breach of the OWNER’s Code of Conduct and Business Ethics; or

(i) A Conflict of Interest has arisen under Article 36; or

(j) CONTRACTOR without reasonable excuse fails to commence the WORK or to continuously proceed with the WORK after the EFFECTIVE DATE; or

(k) CONTRACTOR or CONTRACTOR’s personnel has in the opinion of OWNER, failed to comply with the CONTRACT, is incompetent, have acted in manner prejudicial to OWNER's best interest, have failed to comply with OWNER's safety or other rules or regulations, have produced substandard WORK or for any other reasons justifiable by OWNER; or

(l) If CONTRACTOR had in the opinion of OWNER failed to comply with the CONTRACT or failed to perform the WORK or part thereof or has failed to adhere to any of its duties and obligations herein;

then OWNER has the right after giving seven (7) calendar days written notice to

CONTRACTOR, to terminate CONTRACTOR's employment under the CONTRACT and to expel CONTRACTOR from the SITE. The above shall not be construed as a limitation of any claim which OWNER may have under the CONTRACT with respect to such breach. CONTRACTOR’s payment of liquidated damages pursuant to Article 14 shall not preclude OWNER from otherwise exercising properly its right under this Article.

19.7 In the event of such notification, CONTRACTOR shall immediately or upon such

other date as is specified in the notification terminate its performance of the WORK, or the relevant part thereof, and shall assign to OWNER all rights and titles referred under the CONTRACT and take all such further steps as are necessary to enable OWNER to take over CONTRACTOR's position in the performance of the WORK with the least possible disruptions, all in accordance with OWNER's instructions, if any.

Such further steps shall include but not be limited to:




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(a) Enabling OWNER to take over the WORK so far completed, or the relevant

part thereof, and all or the relevant part of the MATERIALS in CONTRACTOR's care, custody or control;

(b) enabling OWNER to the extent desired by OWNER, to use all

CONTRACTOR’S CONSTRUCTION EQUIPMENT;

19.8 Any additional cost or damage incurred or suffered by OWNER as a result of CONTRACTOR's failure as referred to in Article 19.2 shall be paid by CONTRACTOR and for this purpose OWNER shall always have a lien over the CONTRACTOR’S CONSTRUCTION EQUIPMENT.

19.9 CONTRACTOR shall hold OWNER harmless from and indemnified against any

action, damage, claim or demand whatsoever by CONTRACTOR, SUBCONTRACTORS, suppliers or any other party employed by CONTRACTOR including costs of legal fees which may be rendered against OWNER arising from termination by OWNER pursuant to this Article 19.

19.10 Except as provided above, in the event of termination hereunder, the PARTIES

shall each be released and discharged from any claims by one Party against the other in connection with the terminated WORK. Neither OWNER nor CONTRACTOR shall be liable to the other for any consequential loss and indirect loss including loss of anticipated profits sustained on account of such termination.

19.11 If in the performance of this CONTRACT, CONTRACTOR causes the CONTRACT to be terminated or resulted in the CONTRACT to be terminated, OWNER shall have the option to thereafter enforce the Bank Guarantee as may be provided under this CONTRACT.

19.12 In the event of termination of a part of the WORK the provisions of this Article 19

shall apply mutatis mutandis.

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ARTICLE 20

20.0 DISCONTINUATION

20.1 OWNER has the right at any time, for any reason and at its absolute discretion, to discontinue the CONTRACT subject to prior notification.

20.2 In the event of such notification to discontinue the CONTRACT, CONTRACTOR

shall either immediately or upon such other date as is specified in the notice:- (a) discontinue its performance of the WORK other than such part of the WORK

as OWNER may instruct for the purpose of protecting, making safe or tidying up such parts of the WORK as may already have been executed or may be in the course of execution;

(b) assign to OWNER to the extent required by OWNER, all SUBCONTRACTS

and other obligations and any right and title referred to in Article 23.3; (c) except for those SUBCONTRACTS as are required for the work as stipulated

in Article 20.2(a) which SUBCONTRACTS shall discontinue upon completion of such work, discontinue all SUBCONTRACTS and other obligations not assigned to OWNER pursuant to (b) above;

(d) enable OWNER or its nominee to take over the WORK so far completed and

all or the relevant part of the MATERIALS in CONTRACTOR's care, custody or control;

(e) remove from the SITE all CONTRACTOR’S CONSTRUCTION EQUIPMENT

owned by CONTRACTOR;

20.3 In the event of such discontinuation CONTRACTOR shall be entitled to the following:

(a) that part of the CONTRACT PRICE due and payable in accordance with the

CONTRACT up to the date of the discontinuation of the CONTRACT but which has not been paid prior to the date of discontinuation.

(b) all reasonable cost incurred by CONTRACTOR in bringing the WORK to an

orderly close and turning it over to OWNER;




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(c) Other reasonable costs incurred by CONTRACTOR as a direct result of such discontinuation which are costs of discontinuation or cancellation of SUBCONTRACTS, demobilisation costs of CONTRACTOR’S CONSTRUCTION EQUIPMENT and other property, personnel and of unused materials and equipment from the SITE, the prorated portions of the insurance premium and of the banking charges incurred in connection with the issuance of the Performance Bond, costs of discontinuation of agreements for rentals on CONTRACTOR’S CONSTRUCTION EQUIPMENT and offices and employees accommodation.

The aforesaid costs and expenses will be subject to audit by a Malaysian firm

of Chartered Accountants independent of both PARTIES, which firm shall be agreed between OWNER and CONTRACTOR within fourteen (14) calendar days from the date of discontinuation, or failing agreement within such period of time, such firm shall be appointed by the Chairman of the Bar Council, Malaysia upon an application made by either PARTY. The audit shall be completed within thirty (30) calendar days of the presentation by CONTRACTOR of its estimate of costs and expenses together with all relevant supporting documentation to such firm.

As soon as the PARTIES have reached agreement on the sum of money to

which CONTRACTOR is entitled they shall establish the difference between such sum and the total amounts already paid to CONTRACTOR by OWNER under the CONTRACT. The amount of difference so established shall be settled within thirty (30) calendar days from the date the debit note is submitted by the creditor to the debtor.

20.4 CONTRACTOR shall hold OWNER harmless from and indemnified against any

action, damage, claim, or demand whatsoever by CONTRACTOR, SUBCONTRACTORS, suppliers or any other party employed by CONTRACTOR including costs of legal fees which may be rendered against OWNER arising from discontinuation by OWNER pursuant to this Article 20 but this indemnity shall not prejudice CONTRACTOR's rights under Article 20.3.

20.5 OWNER shall not be liable to CONTRACTOR for any claim for loss of anticipated

profits for, on account of, or arising from discontinuation of this CONTRACT. 20.6 All SUBCONTRACTS shall contain clauses as included in this Article 20 to

enable CONTRACTOR to discontinue such SUBCONTRACTS as aforesaid. END OF ARTICLE




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ARTICLE 21

21.0 SUSPENSION

21.1 OWNER may at any time and from time to time and for any reason, by notice to CONTRACTOR, suspend further performance of all or any portion of the WORK. Any notice of suspension shall specify the effective date of suspension and the estimated duration of the suspension. Upon the date specified in any such notice of suspension, CONTRACTOR shall promptly suspend further performance of the affected WORK and during the period of such suspension shall properly care for and protect all of the affected WORK in progress and all affected property of OWNER which pursuant to the terms of this CONTRACT is subject to the supervision of CONTRACTOR. OWNER may at any time end the suspension by notice to CONTRACTOR, and CONTRACTOR shall use all reasonable efforts to resume performance of the affected WORK pursuant to this CONTRACT immediately upon receipt of such notice or upon the date specified in such notice.

As full compensation, CONTRACTOR will be reimbursed for the following costs, reasonably incurred, without duplication of any item, to the extent that such costs directly result from such suspension of all or any portion of the WORK;

(a) costs of performance which, in the circumstances of the delay, cannot

reasonably be avoided or reduced by CONTRACTOR, all of which costs must be reasonable and unavoidable and which are a direct result of the suspension;

(b) incremental costs incurred as a result of any delivery of equipment and

MATERIALS ordered and/or in transit (provided that CONTRACTOR and OWNER shall consult as to ways of minimising such cost); all of which costs must be reasonable and unavoidable and which are a direct result of the suspension;

(c) incremental costs of CONTRACTOR’s field personnel, SUBCONTRACTORS

and rented CONTRACTOR’S CONSTRUCTION EQUIPMENT and other facilities which with the consent of OWNER are maintained for the WORK and costs incurred by CONTRACTOR in demobilising and re-mobilising CONTRACTOR’s field personnel who are not so maintained all of which cost must be reasonable and unavoidable and which are a direct result of the suspension.




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PROVIDED THAT CONTRACTOR shall not be entitled to compensation for any

costs and expenses resulted from suspension which is necessary:-

i) by reason of any default on the part of the CONTRACTOR; ii) by reason of CONTRACTOR performing the WORK in an unsafe manner.

Upon resumption by CONTRACTOR of all activities previously affected by suspension, OWNER shall resume payments of the CONTRACT PRICE in accordance with Article 8 with the payment dates adjusted to reflect the period during which payment milestones were not achieved because of such suspension. No suspension under this Article 21 shall suspend OWNER’s obligation to make payment for payment milestones already achieved at the date of suspension.

21.2 In the event of a suspension by OWNER under this Article 21, CONTRACTOR

shall invoice OWNER on a monthly basis for the costs of CONTRACTOR set forth in Article 21.1 above and OWNER shall pay CONTRACTOR within thirty (30) calendar days of receipt of the correct invoice together with supporting documents.

21.3 OWNER may at any time lift the suspension of the performance of the WORK, for

all or any part of the suspended WORK, by giving written notice to the CONTRACTOR. In such a case and provided that suspension was not due to any reason mentioned in paragraphs (i) and (ii) of Article 21.1(c), CONTRACTOR and OWNER shall consult with one another concerning the effect of suspension on:-

(a) time Schedule and the Payment Schedule, as appropriate; and/or

(b) the CONTRACT PRICE,

which shall be equitably adjusted in accordance with Article 21.1. Such adjustment shall take into account, among other things, costs of re-mobilising CONTRACTOR’s field personnel and the ability of CONTRACTOR to reschedule PROJECT activities in order to avoid or minimise overall delays resulting from the suspension.

21.4 If the WORK or any part thereof is suspended for a period in excess of ninety (90)

days consecutively or one hundred eighty (180) days in the aggregate

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CONTRACTOR may serve a written notice on OWNER requiring a meeting to determine whether the CONTRACT shall be terminated or the suspension shall continue on the basis that the suspension will be lifted within a reasonable period of time.

21.5 OWNER shall not be liable to CONTRACTOR or to any third party claiming

through CONTRACTOR for any claim of loss of anticipated profits for, on account of, or arising from suspension of this CONTRACT.

21.6 Unless otherwise authorised by OWNER in writing, CONTRACTOR shall cause

provisions concerning suspension similar to the foregoing to be inserted into all SUBCONTRACTS or other written obligations assumed by the CONTRACTOR with respect to the performance of this CONTRACT. CONTRACTOR shall enforce such provisions to the extent and in the manner directed by OWNER.

21.7 CONTRACTOR shall defend, indemnify and hold OWNER and OWNER'S

REPRESENTATIVE harmless from and against any actions, demands or claims whatsoever by CONTRACTOR, SUBCONTRACTORS or any other party employed by CONTRACTOR including costs of legal fees which may be rendered against or incurred by OWNER and/or OWNER'S REPRESENTATIVE arising from suspension by OWNER pursuant to this Article 21 but this indemnity shall not prejudice CONTRACTOR’s right to reimbursement under Article 21.1.

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ARTICLE 22

22.0 FORCE MAJEURE

22.1 Neither PARTY hereto shall be liable for any failure to fulfill any term or condition of the CONTRACT except with respect to payment of money, if fulfillment has been delayed, hindered, interfered with or prevented by force majeure which for the purpose of this Agreement shall mean any event which is not within the control of the PARTY in question and could not have been prevented or overcome by the exercise of due diligence by the said PARTY.

22.2 Without prejudice to the generality of Article 22.1 the events falling within force

majeure include severe force of nature, earthquakes, floods, tidal waves, acts of war or public enemy and riots. However, force majeure shall not include occurrences such as late performance by CONTRACTOR and/or SUBCONTRACTOR caused by unavailability of equipment, supervisors or labour, inefficiencies or similar occurrences or financial distress.

22.3 An event shall be deemed to be within the control of CONTRACTOR if:-

(a) it is due to a default or failure of any SUBCONTRACTOR unless such default or failure is due to force majeure as defined hereinbefore; or

(b) it is a strike, labour or employment dispute, or difficulty or other concerted

acts of workmen whether direct or indirect among the employees of CONTRACTOR or of any SUBCONTRACTOR, unless CONTRACTOR can reasonably demonstrate that it does not arise out of an act or omission of CONTRACTOR or such SUBCONTRACTOR and that the event is in Malaysia.

For the purpose of this Article 22.3 SUBCONTRACTOR's personnel shall be

deemed to be CONTRACTOR's personnel.

22.4 Force majeure shall not include any event which is due to compliance with any law in Malaysia.

22.5 On the occurrence of any force majeure event the PARTY so affected shall:




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(a) immediately give verbal notice of such an event to the other PARTY and promptly confirm that notice by letter or telefax.

(b) use reasonable endeavours to mitigate the effect upon fulfillment of its

obligations under the CONTRACT and resume full performance of such obligations under the CONTRACT as soon as possible, and so notify the other PARTY.

22.6 If after complying with the requirements of Article 22.5 either PARTY is prevented

or delayed from the complete performance of any obligation for a period of thirty (30) continuous days, or ninety (90) days in aggregate during the CONTRACT period, the PARTIES shall thereupon agree, upon termination of force majeure and upon commencement of the WORK to equitably make such adjustments as may be necessary to reflect altered circumstances as a result of force majeure event, provided that if the force majeure event continues for more than the said thirty (30) days continuous or ninety (90) days in aggregate, whichever occurs first, both PARTIES shall discuss and come to a mutually agreeable solution, failing which either PARTY may, upon sixty (60) days' written notice, terminate this CONTRACT.

22.7 The effective date of termination shall be the expiry of the said sixty (60) days or

such earlier date as OWNER may agree. In the event of such termination, the provisions pursuant to Articles 19.3 (a), 19.4 to 19.7 hereof shall apply mutatis mutandis and OWNER and CONTRACTOR shall consult and agree the steps required to achieve an orderly close to the affected part of the WORK and the reimbursement, if any, to be paid to CONTRACTOR in achieving such orderly close-out.

22.8 Any delays or failure in performance by either PARTY hereto shall not give rise to any claims for damages or loss of anticipated profits if, and to the extent, such delay or failure is caused by force majeure.

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ARTICLE 23

23.0 ASSIGNMENT

23.1 CONTRACTOR shall not assign any part of its rights and obligations under the CONTRACT without the prior written consent of OWNER. OWNER shall be entitled to assign the CONTRACT or any part of its rights and obligations under the CONTRACT with prior notification to CONTRACTOR.

23.2 Any PARTY to whom the rights and obligations under the CONTRACT are

assigned shall be bound by all the provisions of the CONTRACT. CONTRACTOR or OWNER, as the case may be, shall procure as a condition precedent to any assignment that such assignment shall:

(a) be executed in accordance with the provisions of the CONTRACT. (b) be executed simultaneously with a separate specific agreement in favour

and for the benefit of OWNER or CONTRACTOR, as the case may be, to the effect that the assignee accepts and agrees to be bound by the CONTRACT; and

(c) be of no force or effect whatsoever unless and until the provisions of this

Article 23 have been met and in the case of a proposed assignment by CONTRACTOR an executed copy of the agreement referred to in (b) above has been delivered to OWNER as a precondition to OWNER granting the required written consent.

23.3 CONTRACTOR shall arrange that any right and title (together with the obligations

connected therewith) relating to the WORK which CONTRACTOR may directly or indirectly acquire from third parties can if so required by OWNER be assigned to OWNER in the event of termination or discontinuation as referred to in Articles 19 and 20 respectively, by notice in writing by OWNER to any such third party.

END OF ARTICLE




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ARTICLE 24

24.0 COMPLIANCE WITH LAWS

24.1 CONTRACTOR shall observe and abide by and shall ensure that any SUBCONTRACTOR shall observe and abide by all applicable laws, by-laws and regulations in Malaysia and in connection with the WORK, including but not limited to those with respect to labour and insurance, safety and work environment. CONTRACTOR shall indemnify OWNER for any loss or damage suffered by OWNER as a result of CONTRACTOR's or SUBCONTRACTORS' failure to comply with the aforementioned laws, by-laws and regulations.

Without prejudice to the generality of the foregoing, CONTRACTOR's obligations

herein shall extend to OWNER's own safety regulations as identified to CONTRACTOR from time to time.

24.2 CONTRACTOR shall obtain without delay such authorizations, approvals,

permits, consents, licenses and work permits which are necessary for it to perform the WORK, with the exception only of those which OWNER will obtain as specified in the CONTRACT, if any, for which CONTRACTOR shall provide OWNER with all necessary data, information and documents as required by the relevant authorities until such date that OWNER has obtained from such relevant authorities the confirmation that the permit application documentation is complete and to their satisfaction.

24.3 CONTRACTOR shall be deemed to be aware that the CONTRACT PRICE

referred to in Article 8.1 has been based on all applicable laws, by-laws and regulations, local customs and practices of Malaysia and any local and any other duly constituted authority in effect on the EFFECTIVE DATE and shall keep itself informed of future laws, by-laws and regulations which affect the WORK and/or the CONTRACT PRICE.

24.4 CONTRACTOR shall at all times be considerate of and shall respect the local customs and practices during the performance of the WORK.

END OF ARTICLE




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ARTICLE 25

25.0 OWNERSHIP AND TITLE

25.1 Ownership of any part of the WORK performed, whether completed or not, shall vest in OWNER.

25.2 Nothing provided for in this Article 25 shall relieve CONTRACTOR from its

obligations under Articles 4, 5 and/or 9 and CONTRACTOR shall have full responsibility and authority over the care, custody and control of any part of the WORK, whether completed or not, and any item of MATERIALS as may be necessary in connection with the execution of the WORK in accordance with the provision of the CONTRACT.

25.3 Copyright in respect of all drawings, specifications, requisitions, calculations and

other documents supplied to OWNER and prepared by CONTRACTOR together with ownership of all drawings, specifications, requisitions, calculations and other documents prepared by any SUBCONTRACTOR, in connection with the WORK shall vest in OWNER. OWNER shall have the right to use such drawings, specifications, requisitions, calculations and other documents solely for the purpose of the realization, operation and maintenance of the RAPID PROJECT without any obligation of any kind to CONTRACTOR, or CONTRACTOR's affiliates or SUBCONTRACTORS.

CONTRACTOR shall not make any reference to OWNER and/or the PROJECT

in reusing the standard drawings, specifications, requisitions, calculations and other documents referred to in this Article 25.3, without in each case OWNER's prior written approval.

25.4 CONTRACTOR shall ensure that appropriate provisions to secure OWNER's

rights as stated above shall be inserted in SUBCONTRACTS.

END OF ARTICLE




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ARTICLE 26

26.0 MATERIALS AND CONTRACTOR’S CONSTRUCTION EQUIPMENT

26.1 CONTRACTOR shall provide or cause to be provided at the SITE all MATERIALS

and CONTRACTOR’S CONSTRUCTION EQUIPMENT in accordance with the procedures set out in the CONTRACT. Without prejudice to other provisions of the CONTRACT, all shipments of MATERIALS shall be in CONTRACTOR's name.

26.2 Without prejudice to CONTRACTOR's other obligations with respect to

MATERIALS under the CONTRACT, CONTRACTOR shall ensure that all MATERIALS shall, when installed, be new and unused, of correct design and workmanship, within the specifications, or if no such specifications exist, fully suitable for the use intended and CONTRACTOR shall obtain in the name of OWNER the best obtainable suitable guarantees and warranties in this respect from the suppliers of MATERIALS. The foregoing does not relieve CONTRACTOR of any of its obligations under Article 17.

26.3 CONTRACTOR shall source, and cause SUBCONTRACTORS to source all

CONTRACTOR’S CONSTRUCTION EQUIPMENT in Malaysia unless CONTRACTOR proves to the satisfaction of OWNER that there are overriding reasons for sourcing an item of CONTRACTOR’S CONSTRUCTION EQUIPMENT outside Malaysia.

26.4 In the event of approval by OWNER for sourcing CONTRACTOR’S

CONSTRUCTION EQUIPMENT from outside Malaysia, CONTRACTOR shall obtain all import licenses and other permits required for the importation into and use in Malaysia of such CONTRACTOR’S CONSTRUCTION EQUIPMENT. Any such item of CONTRACTOR’S CONSTRUCTION EQUIPMENT shall be imported by CONTRACTOR in the name of CONTRACTOR.

26.5 CONTRACTOR shall use and cause SUBCONTRACTORS to use such

CONTRACTOR’S CONSTRUCTION EQUIPMENT as will be adequate, in quality and number, to carry out the WORK in accordance with the CONTRACT. CONTRACTOR’S CONSTRUCTION EQUIPMENT shall only be removed from the SITE in accordance with the agreed demobilization schedule or otherwise with the specific written approval of OWNER.




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26.6 If, in the opinion of OWNER any item of CONTRACTOR’S CONSTRUCTION EQUIPMENT is no longer adequate in quality or number for CONTRACTOR to carry out the WORK in accordance with the CONTRACT, CONTRACTOR shall, at its own initiative, either make adequate repairs or arrange for immediate replacement, or as the case may be, provide the necessary additional CONTRACTOR’S CONSTRUCTION EQUIPMENT.

26.7 If CONTRACTOR fails to take at its own initiative the measures referred to in

Article 26.6 or if OWNER does not approve the measures proposed by CONTRACTOR, then OWNER shall have the right to require CONTRACTOR to, and CONTRACTOR shall forthwith, implement such measures as OWNER deems necessary.

26.8 The cost and expenses involved in the implementation of any of the measures

under Articles 26.6 and 26.7 shall be for CONTRACTOR's account and shall not be considered a CHANGE ORDER.

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ARTICLE 27

27.0 CONTRACTOR'S KEY PERSONNEL

27.1 CONTRACTOR warrants that it has and will throughout the CONTRACT duration

have experience and capability including sufficient and competent supervisors and other personnel to efficiently and expeditiously perform the WORK at its own sole risk and expenses and under its exclusive direction, control, and responsibility.

27.2 CONTRACTOR further warrants that it shall ensure that any persons designated

as "Key Personnel" in the CONTRACT shall be located in Malaysia and available at normal working hours in Malaysia and not be replaced without the prior approval of OWNER of a suitable successor. In order to ensure that continuity of the WORK is maintained, the replacement of any such Key Personnel shall work alongside the person who is to be replaced for a reasonable hand over period at no cost to OWNER.

27.3 CONTRACTOR shall at its own cost, be responsible for all matters relating to the

employment of its personnel, whether local or foreign, including without limitation:-

(a) work permit, employment visa, immigration requirements;

(b) remuneration, EPF, SOCSO, TAXES, levy, commission;

(c) lodging or accommodation, transportation, meal allowance;

(d) medical welfare, examination, treatment, hospitalization, health insurance, including that of their immediate families; and

(e) all other statutory requirements.

27.4 CONTRACTOR shall immediately, at its own cost, provide an acceptable replacement of any of its personnel, SUBCONTRACTORS, or its SUBCONTRACTORS' personnel whom OWNER, in its sole discretion considers:- (a) to be incompetent;

(b) to be detrimental to the WORK due to their continued presence or be a source of concern to OWNER;

(c) to have acted in a manner prejudicial to OWNER's best interests;




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(d) to have failed to comply with OWNER's safety or other rules or regulations; or

(e) to have produced substandard WORK, or not to have acted diligently.

27.5 In the performance of the WORK, CONTRACTOR shall maintain strict discipline and good order among its employees and the employees of its SUBCONTRACTORS and shall not permit any of them to engage in activities which OWNER deems contrary or detrimental to OWNER's interests. CONTRACTOR shall ensure that there is no drug abuse among its personnel, agents, SUBCONTRACTORS, its servants and its third party during the performance of the WORK.

27.6 CONTRACTOR agrees that it will not allocate its approved Key Personnel and other critical resources to any other contracts. Otherwise, CONTRACTOR shall demonstrate to OWNER’s satisfaction that allocation of these resources will not adversely affect CONTRACTOR's ability to properly perform its obligations under the CONTRACT. CONTRACTOR further agrees that when allocating its personnel, the said contracts, including the cumulative effect of such contracts, will not be given priority over the WORK.

27.7 CONTRACTOR warrants that its personnel have been medically evaluated and are certified fit prior to performing WORK for OWNER. CONTRACTOR shall bear all costs associated with the above requirement including the cost for the medical examinations. OWNER may also request CONTRACTOR's personnel to undergo a medical examination at OWNER’s appointed clinic at any time during the term of this CONTRACT. Any CONTRACTOR's personnel that is determined to be medically unfit based on the medical examination unless otherwise agreed by OWNER shall not be allowed to perform the WORK and CONTRACTOR shall be responsible to provide a qualified replacement at no additional cost to OWNER. All costs associated with the medical examination or tests that are requested by OWNER shall be borne by CONTRACTOR.

27.8 Alcohol And Drug Use

(a) CONTRACTOR is responsible to ensure that its employees, agents, and SUBCONTRACTORS, its servants and its third party shall not use, be in possession or under the influence of any drug during the performance of the WORK, or cause any drugs to be carried into the SITE.




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(b) CONTRACTOR shall also ensure that its employees, agents, SUBCONTRACTORS, its servants and third party shall not use or be in possession of, distribute or engage in the sale of alcohol/alcoholic beverages at SITE.

(c) Any of the CONTRACTOR's personnel, employees, agents, SUBCONTRACTORS and third party who is incapable of performing his work or duties due to the influence of alcohol shall be refused entry from the SITE or otherwise removed from the SITE. CONTRACTOR shall replace such person immediately in accordance with the provision herein contained. Any cost incurred shall be for the CONTRACTOR's account.

27.9 Upon request by OWNER, CONTRACTOR shall furnish names and addresses of

its SUBCONTRACTORS, employees of CONTRACTOR or its SUBCONTRACTORS or others who have performed or are performing WORK under the CONTRACT.

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ARTICLE 28

28.0 LOCAL PARTICIPATION

28.1 (a) The CONTRACTOR shall during the term of this CONTRACT, engage

Bumiputera entities, contractors or organisations subject to the approval of OWNER’S REPRESENTATIVE to carry out specific portion of the WORKS on a sub-contract basis and the amount of these participations shall be a minimum of thirty percent (30%) of the total CONTRACT value, and a minimum of fifteen percent (15%) of the total CONTRACT value to be carried out by Johor Bumiputera contractors in accordance with the requirements of Section C – Project Specification. The CONTRACTOR shall at all times in carrying out the WORKS maximise the utilisation of Bumiputera personnel and supplied equipment, goods and materials.

(b) The maximum utilisation of Bumiputera entities shall entail the following:

(i) Maximising the amount and value of the WORKS made available

for sub-contracting; (ii) Maximising the usage of equipment, goods and materials sourced

from within Johor and Malaysia; and (iii) Maximising the usage of services and facilities of any description

from Johor based Bumiputera entities. (c) A Bumiputera entity is either:-

(i) An entity that is established under the Companies Act 1965 or the

Registration of Business Act 1956 and at least fifty-one percent (51%) of its shares are owned by Bumiputera individuals, and have at least fifty-one percent (51%) Bumiputera participation at Board, Management and staff levels; or

(ii) Public listed companies or their subsidiaries that have been given the status of “Bumiputera Controlled Plc” by the Foreign Investment Committee (FIC) or the Ministry of International Trade and Industry (MITI) through the Ministry of Finance or Pusat Khidmat Kontraktor. Bumiputera public listed companies or their subsidiaries are not allowed to participate in sub-contract works valued at Ringgit Malaysia: Ten Million (RM10,000,000.00) or less.




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(d) A Johor based Bumiputera entity is:-

(i) An entity that is established under the Companies Act 1965 or the Registration of Business Act 1956 and having its registered office or principal place of business in the state of Johor; and

(ii) At least fifty-one percent (51%) of its shares are owned by Bumiputera individuals from Johor.

(e) Further, the CONTRACTOR agrees that in sub-letting the whole or any

parts of the WORKS herein the CONTRACTOR shall comply with the following requirements (where applicable), failing which the OWNER shall be entitled to withhold any consent for the sub-letting; The requirements are that the CONTRACTOR shall indicate clearly to the OWNER’S REPRESENTATIVE how the CONTRACTOR intends to fulfil the requirements under this Article 28, and shall provide a full list of the portion of the WORKS to be carried out by the Johor based Bumiputera entities prior to the sub-letting of any WORKS. The CONTRACTOR further agrees that it shall immediately upon the OWNER’S REPRESENTATIVE’s request provide a list of all major Johor Bumiputera based sub-contractors and suppliers.

(f) CONTRACTOR shall report the status of all Bumiputera entity

company(ies) for all phases of WORK on a monthly basis, complete with relevant supporting documentation, data and calculation in order to demonstrate that CONTRACTOR complies with such requirements. The format of the report is to be discussed and agreed upon by OWNER’S REPRESENTATIVE and CONTRACTOR.

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ARTICLE 29

29.0 HEALTH, SAFETY, SECURITY AND ENVIRONMENT

29.1 The CONTRACTOR shall comply with all applicable Health, Safety and

Environment (“HSE”) laws and regulations pertaining to safety, health, environment protection and fire protection, which are applicable to the location where the WORK are being carried out. The CONTRACTOR shall also comply at all times with the requirements as set forth by the OWNER in its Health, Safety and Environment Management System (“HSEMS”), policies, operating standards, site HSE requirements, OWNER Zero Tolerance Rules (“ZeTo”) and any special instructions and all requirements stipulated in this CONTRACT and the Health, Safety, Security and Environment Requirements stipulated in Section C, Part IV – Specifications, Drawings, Procedures and Requirements of the ITB. These requirements are intended to supplement any known or ought to be known laws and regulations applicable at the location where the WORK are being carried out. The CONTRACTOR shall take all necessary HSE control and recovery measures related to or arising out of the performance of the CONTRACT in order to protect the WORK, the personnel and property of the OWNER, CONTRACTOR, SUB-CONTRACTOR, all third parties and public from the hazards and risks associated with the planning and execution of WORK. Notwithstanding the above, the CONTRACTOR shall perform all obligations related to the HSE requirements listed within PROJECT SPECIFICATIONS.

29.2 CONTRACTOR shall work closely with OWNER to develop the most appropriate HSE recognition program for this CONTRACT. Such HSE recognition program shall provide a structured means to periodically reward and recognize those personnel who have contributed in making the SITE a safe work place. HSE incentives will be based on merits, active participation, and the achievement of HSE performance targets.

29.3 CONTRACTOR shall at its own expense ensure that all its personnel and SUBCONTRACTOR(s) personnel have been given the necessary basic safety and job related training as required by law and the PROJECT SPECIFICATION, prior to the start of WORK and provide OWNER with copies of certifications if so required. In particular, CONTRACTOR shall ensure that all its and SUBCONTRACTOR(s) personnel are registered with NIOSH and/or CIDB.




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29.4 CONTRACTOR shall ensure that all CONTRACTOR's CONSTRUCTION EQUIPMENT, facilities and other items in any way associated with or utilized in the WORK are maintained in a safe, sound and proper condition.

29.5 In the event of any incidents or accidents, CONTRACTOR shall report to OWNER

immediately of the event and the circumstances. CONTRACTOR shall also alert fire brigade, police and/or other authorities relevant to any incidents or accidents in all respects in accordance with applicable law and local requirements.

CONTRACTOR shall maintain accurate accident and injury reports and shall

furnish OWNER with a monthly summary of fatalities, if any, injuries, man-hours lost due to injuries and other reasonable requests for information relating to accidents, illnesses or injuries.

29.6 CONTRACTOR shall at its own expense provide adequate first aid equipment, fire

extinguishers and other safety equipment of approved types and amounts, as may be reasonably required in connection with this CONTRACT and shall maintain this equipment in a professional manner as dictated by legal and industry standards.

CONTRACTOR shall keep up-to-date records of all said equipment including for

inspection and maintenance thereof. 29.7 CONTRACTOR shall at its own expense supply its personnel and

SUBCONTRACTOR(s) personnel with adequate personnel protective equipment, required in connection with the safe performance of the WORK, as required and enforce the use of such equipment by said personnel.

29.8 No later than thirty (30) days after the EFFECTIVE DATE, CONTRACTOR shall

submit for OWNER's review and comments a SITE HSE management programme, applicable to the WORK, which will define the measures, practices and procedures by which CONTRACTOR intends to protect personnel and equipment against injury or damage. Such OWNER's review and comments shall not relieve, nor shall such review and comments be construed as limiting in any manner, CONTRACTOR's obligations to undertake any action which may be necessary to establish and maintain safe and secure working conditions and environment at the SITE.

CONTRACTOR shall hold regularly scheduled meetings to instruct its personnel

on proper HSE practices and the requirements of the SITE HSE programme.




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29.9 CONTRACTOR shall allow OWNER and OWNER's REPRESENTATIVE access at any time to CONTRACTOR’S CONSTRUCTION EQUIPMENT, personnel and records when requested, to enable OWNER and/or OWNER's REPRESENTATIVE to inspect any aspect of CONTRACTOR's operations relevant to HSE in general and the work environment.

29.10 CONTRACTOR shall ensure that all its employees and SUBCONTRACTOR(s)

employees engaged in the WORK are medically fit and healthy. Any medical diseases or disabilities including such diseases or disabilities which CONTRACTOR may consider will not adversely influence the employee's ability to perform his role in the WORK shall be reported to OWNER prior to the start of the WORK.

29.11 CONTRACTOR shall at no cost to OWNER be responsible for the medical welfare

of its own and SUBCONTRACTOR(s) employees and shall take care of arrangements for medical attendance, treatment or hospitalisation if and when necessary and shall arrange suitable insurance coverage for such contingencies.

29.12 CONTRACTOR shall be responsible for the safe operation, upkeep and

maintenance of all temporary facilities on the SITE including daily removal of rubbish and debris and all other services deemed necessary.

29.13 Throughout the performance of the WORK, CONTRACTOR shall conduct all

operations in such a way as to minimise impact on the natural environment in its compliance with all laws, regulations and rules applicable to the SITE. CONTRACTOR agrees to indemnify OWNER and OWNER's REPRESENTATIVE for all claims, damages, costs and penalties relating to any environmental damage or loss or non-compliance with any law or regulation arising out of CONTRACTOR's or SUBCONTRACTOR(s) performance of the WORK.

29.14 The failure of CONTRACTOR to comply with the OWNER’s applicable HSSE requirements shall be deemed as a default by CONTRACTOR and shall constitute a breach of the CONTRACT.

29.15 Owner shall have the right to prohibit commencement of the WORK or to stop any WORK in progress on HSE ground if (without limitation) MATERIALS, CONTRACTOR’S CONSTRUCTION EQUIPMENT, CONTRACTOR’s personnel (whether procured by CONTRACTOR from third parties or supplied by CONTRACTOR) or work conditions are considered to be unsafe or not in compliance with OWNER’s HSSE rules and/or requirements stipulated in




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PROJECT SPECIFICATIONS. In such event, CONTRACTOR shall without reservation remove the unsafe MATERIALS, CONTRACTOR’S CONSTRUCTION EQUIPMENT, CONTRACTOR’s personnel or work conditions prior to seeking OWNER’s permission to resume or commence the WORK. Any costs incurred by CONTRACTOR or CONTRACTOR’s REPRESENTATIVES as a result of any delays or actions taken or required which arise in any way in connection with this Article and/or the WORK stoppage, shall be at CONTRACTOR’s sole expense and shall not entitle CONTRACTOR to any compensation thereof.

29.16 In the event the CONTRACTOR or CONTRACTOR’s REPRESENTATIVES fail to comply with any of the HSSE requirements stipulated in PROJECT SPECIFICATIONS, OWNER shall be entitled to withhold amounts from payments due to CONTRACTOR under this CONTRACT until CONTRACTOR rectifies the noncompliance to the satisfaction of OWNER whereupon OWNER shall immediately release such sums withheld to CONTRACTOR (without any interest imposed thereon).

29.17 In the event the CONTRACTOR fails to take appropriate remedial action or refuses to remedy or remove the causes for withholding such payments after delivery of written notice to the CONTRACTOR by OWNER, OWNER shall be entitled to cause the same to be remedied or removed on its own and may deduct the costs including the expenses thereby incurred by OWNER from any amounts due or owing or which may become due or owing to CONTRACTOR under the CONTRACT provided always that this provision shall not affect any other rights or remedies to which OWNER may be entitled hereunder CONTRACT or at law or otherwise for the recovery of such sums.

29.18 In case of HSSE non-compliance committed by CONTRACTOR’s personnel

which has been verified by OWNER, consequence management shall be applied to CONTRACTOR’s personnel in accordance with the requirements of PROJECT SPECIFICATIONS.

29.19 If HSSE non-compliances of a major category as prescribed in PROJECT SPECIFICATIONS were repeatedly committed by CONTRACTOR’s personnel, OWNER shall have the right to terminate the CONTRACT in accordance with the provisions of Article 19 of this CONTRACT and claim for any loss, damages suffered by the OWNER as a result thereof.

29.20 If an incident of HSSE non-compliance by the CONTRACTOR occurs and results in fatality during execution of the WORK, OWNER shall have the right to terminate




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the CONTRACT in accordance with the provisions of Article 19 and the OWNER shall also have the right to call on the Performance Bond pursuant to Article 18 of this CONTRACT to recover any loss, claims or damages suffered by the OWNER as a result thereof.

29.21 CONTRACTOR is fully responsible for its own and SUBCONTRACTOR’s security of personnel, equipment & material.

29.22 CONTRACTOR shall comply with the Security requirements provided in Section C, Part IV – Specifications, Drawings, Procedures and Requirements of the ITB.

29.23 CONTRACTOR is also responsible for the security and safety of the OWNER’s

site facilities and is required to provide general site security, including security for OWNER properties and personnel, CONTRACTOR’s own work area, equipment and materials, tools, and supply of barricades as required.

29.24 The above are without prejudice to any other rights and remedies of OWNER arising hereunder or by law or otherwise.

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ARTICLE 30

30.0 SECRECY

30.1 CONTRACTOR shall preserve and cause its employees to preserve the secrecy

of any confidential information. CONTRACTOR shall, where deemed necessary by OWNER enter into Non-Disclosure/Secrecy Agreements with any third parties so identified by OWNER.

30.2 CONTRACTOR shall not use or cause to be used any confidential information for

any purpose other than the performance of the WORK, and as such CONTRACTOR shall not:- a) reproduce, copy or use any confidential information; or

b) disclose to, place at the disposal of, or use on behalf of any third party, or

enable any third party to peruse, copy or use any confidential information unless with prior written consent of OWNER.

30.3 The undertaking under this Article shall continue for a period of two (2) years from

the expiry of the DEFECTS LIABILITY PERIOD provided and insofar as the confidential information in question has not:-

a) become part of public knowledge or literature through no fault of

CONTRACTOR; or

b) been disclosed to CONTRACTOR by a third party (other than one disclosing on behalf of OWNER) who could lawfully do so and did not derive such confidential information from OWNER and is under no secrecy obligation with respect thereto.

30.4 The undertakings under this Article shall not prevent CONTRACTOR from using

confidential information which at the time of disclosure under the CONTRACT was already in the possession of CONTRACTOR under a binder of secrecy or disclosed under a secrecy obligation to CONTRACTOR by a third party as mentioned in this Article within the limitations of such obligation.

30.5 The copyright in any confidential information disclosed to CONTRACTOR by

OWNER shall, in the absence of any express provision thereon, be vested in OWNER.




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30.6 CONTRACTOR undertakes and agrees to take precautions to safeguard all

documents, records, data notes and instructions which OWNER may supply to CONTRACTOR in relation to WORK. CONTRACTOR with the written approval of OWNER may make copies of such documents, records, data, notes and instructions only to the extent that they are necessary for effectively carrying out the WORK. On completion of the WORK, CONTRACTOR shall return all such documents and copies thereof to OWNER except that CONTRACTOR may retain a copy of such documents for record purposes with OWNER’s prior approval.

30.7 CONTRACTOR shall procure similar undertakings from SUBCONTRACTOR(s)

with regard to OWNER’s confidential information prior to appointing them to perform the WORK or any part thereof.

30.8 CONTRACTOR shall not, unless expressly allowed under the CONTRACT:

(a) film or photograph any part of the WORK at the SITE without the prior written approval of OWNER. OWNER reserves the right and CONTRACTOR agrees to allow OWNER to vet scripts, synopsis, all films, videos or photographs taken of the WORK and expressly to review and censor any part thereof; or

(b) orally or in writing or in any other form make any public statement, advertisement in newspapers or comment on any matter relating to the WORK without the prior written approval of OWNER; or

(c) publish or cause to be published any article, book or other work which is based

on confidential information.

30.9 The confidentiality and secrecy obligations required on part of CONTRACTOR pursuant to this Article 30 shall apply mutatis mutandis to OWNER in respect of any information disclosed by CONTRACTOR to OWNER to the extent such information is marked as confidential or is normally known or ought to be known as confidential.

30.10 Notwithstanding the foregoing and without being held in breach of their obligation

under this Article, OWNER and CONTRACTOR may disclose any confidential information to any competent authority where such disclosure is required by applicable legislation or is requested pursuant to a court order.

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ARTICLE 31

31.0 WAIVER

31.1 A waiver on the part of OWNER or CONTRACTOR of any term, provision or

condition of the CONTRACT shall not constitute a precedent nor bind either PARTY hereto to a waiver of any succeeding breach of the same or any other term, provision or condition of the CONTRACT. No waiver of any term, provision or condition of the CONTRACT shall be claimed by either PARTY unless the same is in writing and signed by the other PARTY.

31.2 Any failure by OWNER to exercise or enforce any right, remedy or provision

contained in this CONTRACT, at any time or for any period of time shall not constitute a waiver of such right, remedy or provision.

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ARTICLE 32

32.0 APPLICABLE LAW

The CONTRACT shall be governed by and construed in all respects in accordance with the laws of Malaysia.

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ARTICLE 33

33.0 ARBITRATION

33.1 Any dispute or difference arising out of or in connection with the CONTRACT or

the implementation of any of the provisions of the CONTRACT which cannot be settled amicably shall be submitted to arbitration under the auspices of the Kuala Lumpur Regional Centre for Arbitration (“KLRCA”) and the reference shall be to a panel of three (3) arbitrators.Either Party may institute such arbitration by giving written notice to the other and appoint one (1) arbitrator. Within fourteen (14) days thereafter the other PARTY shall appoint a second arbitrator. The two (2) arbitrators shall thereupon select, and agree on a third arbitrator who shall become the Chairman, within fourteen (14) days. In the event agreement upon the third arbitrator cannot be reached, the third arbitrator shall be appointed by KLRCA on the application by the PARTY who gives notice. It is agreed, however that no one shall be appointed to act as an arbitrator who is an employee of either Party or who is in any way financially interested in this CONTRACT.

33.2 The arbitration shall be conducted in Kuala Lumpur, Malaysia in accordance with

the Arbitration Act 2005 of Malaysia or any statutory modification or re-enactment thereafter being in force. The language of the arbitration shall be the English Language. The cost of arbitration shall be borne by the PARTY whose contention was not upheld by the arbitration tribunal, unless otherwise provided in the arbitration award.

33.3 The decision of the arbitrators shall be final and binding upon both PARTIES and no PARTY shall have the right to seek recourse to a law court or other authorities to appeal for revisions of such decision.

33.4 Notwithstanding the foregoing, both PARTIES shall continue to perform their obligations under the CONTRACT pending settlement of any dispute hereunder.

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ARTICLE 34

34.0 LANGUAGE

For all aspects of the CONTRACT the English language shall be the ruling language, unless otherwise stated in the PROJECT SPECIFICATION.

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ARTICLE 35

35.0 LIENS AND CLAIMS

35.1 CONTRACTOR shall indemnify and hold OWNER and its Affiliates harmless from

all liens, claims, assessments, fines and levies created, caused or committed by CONTRACTOR or its SUBCONTRACTORS and all costs, damages and expenses incidental thereto, including without limitation all court and arbitration costs, legal fees, and other reasonable expenses. CONTRACTOR shall notify OWNER of such liens and claims.

35.2 OWNER shall have the right to retain out of any payment to be made for any

WORK or a portion thereof, under this CONTRACT an amount sufficient to offset such liens or claims which CONTRACTOR fails to discharge promptly until such liens or claims is proven to be invalid or is satisfied, discharged or settled.

35.3 Should there be any lien or claim after all payments hereunder have been made,

CONTRACTOR agrees to refund to OWNER upon demand, all monies that OWNER and/or its Affiliates may be compelled to pay to discharge any such lien in consequence of CONTRACTOR's default including all costs, legal and professional fees.

35.4 CONTRACTOR shall provide OWNER, upon completion or upon expiry or early

termination of this CONTRACT, full and complete statements that all of CONTRACTOR’s employees, SUBCONTRACTORS and suppliers have been paid in full, for WORK done or for equipment, materials and supplies furnished to and all debts, TAXES, liens, privileges, claims, charges and obligations arising out of the purchase or lease of equipment, materials, supplies and labour for use in the WORK hereunder to the date of such statements in connection with the performance of the WORK. In the event of any dispute, CONTRACTOR shall post a bond or any form of security acceptable to OWNER to secure OWNER and its Affiliates against any such liens or claims.

35.5 The Statement required under Article 35.4 above shall contain declaration from

CONTRACTOR to OWNER that there are no liens to be liable. CONTRACTOR shall indemnify and hold OWNER and its Affiliates harmless from and against all claims, demands, losses, costs, proceedings, charges and expenses arising out of or incurred in connection with any claims or liens arising out of the performance of the WORK and this CONTRACT by CONTRACTOR.

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ARTICLE 36

36.0 CONFLICT OF INTEREST

36.1 CONTRACTOR shall exercise due care and diligence to prevent any actions being

taken or conditions from arising which could result in a conflict with OWNER’s best interest. This obligation shall apply to the activities of the personnel of CONTRACTOR in their relations with OWNER's employees and their families, and with suppliers, SUBCONTRACTOR, and third parties, arising from the CONTRACT or related to the performance of the WORK.

36.2 CONTRACTOR's efforts shall include, but not be limited to, establishing

precautions to prevent its personnel from making, receiving, providing, or offering gifts, entertainment, payments, loans, or other considerations for the purpose of influencing individuals to commit acts contrary to OWNER’s best interest.

36.3 CONTRACTOR shall not, at any time, make nor shall it offer any payment, gift,

promise, benefit, payment of unlawful gratuities, or other advantage (whether pecuniary or otherwise) of any nature whatsoever, whether directly or through intermediaries, to or for the benefit of any person, including any employee, representative or agent of OWNER or any public official (i.e. any individual performing an official function of a Government department, public agency, public enterprise, public international organization or political party) where such payment, gift, promise, or advantage will influence or may potentially influence the outcome or any part of the bidding exercise in favour of CONTRACTOR.

36.4 CONTRACTOR shall, with respect to any matter arising out of this CONTRACT:-

(a) maintain adequate internal controls; (b) accurately record all transactions in its books and records; and

(c) comply with all applicable laws.

36.5 In the event that CONTRACTOR shall be in breach of the terms and conditions of

this Article or any part thereof for any reason whatsoever, OWNER shall be entitled to terminate the CONTRACT without any payment of compensation.

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ARTICLE 37

37.0 INDEPENDENT CONTRACTOR

37.1 CONTRACTOR is an independent contractor and neither CONTRACTOR nor its

employees, nor its SUBCONTRACTORS or their employees are agents or employees of OWNER. The entire performance, operation, management and control of CONTRACTOR's personnel and equipment shall be under the exclusive control and command of CONTRACTOR. CONTRACTOR's primary purpose shall be to perform all acts necessary to execute the WORK consistent with safety and good oil and gas industry practice to the satisfaction of OWNER.

37.2 As an independent contractor, CONTRACTOR assumes all legal and contractual

obligations arising out of the execution of the WORK except as specified in this CONTRACT. The presence of the inspection and supervision by OWNER’s REPRESENTATIVE shall not relieve CONTRACTOR from CONTRACTOR’s obligations and responsibilities.

37.3 CONTRACTOR shall have no authority to make any statements, representations or

commitments of any kind or to take any action, which shall be binding upon OWNER, except as provided for herein or otherwise with prior written authorisation from OWNER.

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ARTICLE 38

38.0 ENTIRE AGREEMENT

This CONTRACT constitutes the entire agreement between the PARTIES hereto and supersedes all prior negotiations, representations or agreements related to this CONTRACT, either written or oral, including OWNER's bid document and CONTRACTOR's proposal(s) except to the extent they are expressly incorporated into this CONTRACT. No changes, alterations or modifications to this CONTRACT shall be effective unless in writing, and executed by the authorised signatories of OWNER and CONTRACTOR.

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ARTICLE 39

39.0 CODE OF CONDUCT AND BUSINESS ETHICS

39.1 Business Conduct

(a) CONTRACTOR must comply with the relevant parts of the PETRONAS’ Code of Conduct and Business Ethics, Country Supplement, other applicable rules, regulations, policies, procedures, guidelines and requirements as updated by PETRONAS from time to time in the performance of their WORK or services for PETRONAS.

A copy of the PETRONAS Code of Conduct and Business Ethics and Country

Supplement can be obtained from http://www.petronas.com.my/about-us/governance/Pages/governance/code-of-conduct-business-ethics.aspx.

(i) CONTRACTOR must ensure that all ASSOCIATED PERSONS

who perform services or provide goods in connection with this Agreement comply in all relevant part with the PETRONAS’ Code of Conduct and Business Ethics, Country Supplement, other applicable rules, regulations, policies, procedures, guidelines and requirements as updated by PETRONAS from time to time.

(ii) From time-to-time, at the reasonable request of PETRONAS,

CONTRACTOR shall confirm in writing that CONTRACTOR and the ASSOCIATED PERSONS have complied with the obligations imposed upon in this Clause 39.1 and provide any information reasonably requested by PETRONAS in support of the compliance obligations.

(iii) In the event that the CONTRACTOR and the ASSOCIATED

PERSONS refuse, fail and/or is negligent in complying with the provisions as stated in this Clause 39.1, PETRONAS may take any such action as deemed necessary including termination of this Agreement in accordance with the terms stated in Clause 19 without any payment of compensation to CONTRACTOR.

39.2 Conflict of Interest and Fighting Corruption and Unethical Practices

http://www.petronas.com.my/about-us/governance/Pages/governance/code-of-conduct-business-ethics.aspx

http://www.petronas.com.my/about-us/governance/Pages/governance/code-of-conduct-business-ethics.aspx




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(a) CONTRACTOR must:

(i) comply with all RELEVANT REQUIREMENTS and RELEVANT POLICIES;

(ii) have in place and maintain throughout the term of this Agreement its own policies and procedures to ensure compliance with the RELEVANT REQUIREMENTS and RELEVANT POLICIES.

(iii) with respect to any matter arising out of this Agreement, maintain adequate internal controls and accurately record all transactions in its books and records.

(iv) enforce the policies and procedures referred to in Clause 39.2(b) where appropriate;

(v) promptly report to PETRONAS any breach of this Clause 39.2 arising in connection with this Agreement and take such steps as PETRONAS may reasonably require in order to ameliorate any such breach;

(vi) promptly report any request or demand for any undue financial or other advantage of any kind received by CONTRACTOR in connection with the performance of this Agreement and take such steps in response to any such request as PETRONAS may reasonably require;

(vii) immediately notify PETRONAS in writing if a foreign public official becomes an officer or employee of the CONTRACTOR or acquires a direct or indirect interest in CONTRACTOR and CONTRACTOR warrants that no foreign public officials are officers or employees of CONTRACTOR or have direct or indirect interests in CONTRACTOR at the date of this Agreement;

(b) CONTRACTOR must ensure that all ASSOCIATED PERSONS who perform

services or provide goods in connection with this Agreement do so on the basis of a written contract which imposes RELEVANT OBLIGATIONS on the ASSOCIATED PERSON.

(c) CONTRACTOR shall be responsible for the observance and performance by

ASSOCIATED PERSONS of the RELEVANT OBLIGATIONS and shall be directly liable to PETRONAS for any breach of the RELEVANT OBLIGATIONS by an ASSOCIATED PERSON.




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(d) Breach of this Clause 39 shall be deemed a material breach and PETRONAS may terminate the Agreement in accordance with the terms stated in Clause 19 without any payment of compensation to CONTRACTOR.

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ARTICLE 40

40.0 NON-EXCLUSIVE AGREEMENT

This CONTRACT is non-exclusive and OWNER reserves the right to engage

other contractors to perform similar or identical WORK. CONTRACTOR shall afford such other contractors adequate opportunity to carry out their contracts and shall accomplish the WORK in cooperation with those contractors and with OWNER.

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ARTICLE 41

41.0 ANTIQUITIES AND FOSSILS

41.1 All fossils, coins, articles of value or antiquity and structures and other remains or

things of geological, historical or archeological interest discovered on the SITE shall be the absolute property of the Government of Malaysia.

41.2 The CONTRACTOR shall take all reasonable precautions to prevent its workmen

or any other persons from removing or damaging any such article or thing and shall immediately upon discovery and before removal of such article or thing, inform OWNER to obtain instruction for dealing with the same.

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ARTICLE 42

42.0 RECOVERY BY OWNER

42.1 Wherever the CONTRACT provides for OWNER to recover any amount from the CONTRACTOR such amount may be deducted from any sum due or become due at any time thereafter from OWNER to the CONTRACTOR in accordance with the provisions of the CONTRACT.

42.2 Such sums may in any event be recovered by OWNER from the CONTRACTOR as a debt due and owing.

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ARTICLE 43

43.0 COMPLIANCE WITH ENVIRONMENTAL QUALITY ACT 1974

43.1 The CONTRACTOR shall comply with all relevant laws relating to the protection and preservation of the environment, in particular the Environmental Quality Act, 1974 including any subsequent amendments to or re-enactment of the Environmental Quality Act, 1974.

43.2 The CONTRACTOR shall give due consideration the preservation and social

implications of water and air quality, soil, flora and fauna (if any) within the SITE during the execution of the WORK. All measures taken by the CONTRACTOR in compliance with this Article shall be deemed to be included in the CONTRACT PRICE.

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ARTICLE 44

44.0 STAMP DUTY

The stamp duty in respect of this CONTRACT shall be borne by the CONTRACTOR. Each PARTY shall bear any respective legal or other professional charges it may occur in respect of any independent advice that it may seek in respect of this CONTRACT and/or any matter pertaining thereto.

END OF ARTICLE

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ARTICLE 45

45.0 PRICE FLUCTUATION

OWNER shall not entertain any claim for fluctuation of price in respect of all materials, fuel, labour, exchange rates, taxes, statutory contribution, duties, freight, transport charges, storage, protection and everything necessary and requisite for the proper execution and completion of the WORK, at any point during the currency of this CONTRACT and/or the end of any statutorily provided limitation period.

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ARTICLE 46

46. INTELLECTUAL PROPERTY

46.1 Ownership of all drawings, specifications, requisitions, calculations and other documents supplied by CONTRACTOR to OWNER in connection with the WORK shall vest in OWNER and OWNER shall have the right to use these drawings, specifications, requisitions, calculations and other documents for the purpose of construction, operation, maintenance, repair, revision, reconstruction of damage of faulty parts of the WORK.

46.2 CONTRACTOR grants to OWNER:

(a) a non-exclusive, royalty free, irrevocable, and transferable world-wide license to use, sublicense, reproduce and modify the BACKGROUND IPR in connection with the PROJECT and the RAPID PROJECT; and

(b) ownership of all PROJECT IPR and CONTRACTOR'S DOCUMENTS.

46.3 CONTRACTOR shall: (a) execute all necessary documentation and take any other steps necessary to perfect

OWNER'S rights in the PROJECT IPR and CONTRACTOR'S DOCUMENTS; (b) not use or reproduce CONTRACTOR'S DOCUMENTS for any purpose not related to the

CONTRACT without OWNER'S prior consent; and (c) pay any royalty, license fee or any other expense for the supply or use of any patent,

process, drawing, model, plan, invention or information used or necessary for, or in connection, with the WORK save as otherwise agreed between OWNER and CONTRACTOR in writing.

46.4 CONTRACTOR warrants that: (a) it has the rights and entitlement to grant the license, vest the ownership and do the things

described in this ARTICLE 46; (b) use by OWNER, or by another person at the direction or with the permission of OWNER,

of the background IPR and the PROJECT IPR in accordance with the CONTRACT will not infringe the IPR of any third party or breach any law; and

(c) neither OWNER, nor any other person acting at the direction or with the permission of the

OWNER, is or will be liable to pay any license or other fee in respect of the use of the

background IPR or the PROJECT IPR.




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46.5 CONTRACTOR shall be liable for and shall indemnify and hold OWNER and other person acting at the direction of or with the permission of the OWNER harmless against all claims, cost and liability arising from:

(a) any breach of the warranties in ARTICLE 46.4; and (b) any CLAIM or allegation that the background IPR or the PROJECT IPR infringes

the IPR of a third party, is not being validly used, or is not validly registered. 46.6 CONTRACTOR shall promptly notify OWNER if it is or becomes aware of any claim or

allegation that any aspect of the background IPR, the PROJECT IPR or the WORK infringes the IPR of a third party or that registered IPR in such items is not validly registered. In such circumstances, OWNER shall be entitled to require CONTRACTOR (at its own cost), to modify the WORK or replace the infringing components so as to avoid infringement. Any such replacement or modification must not result in a failure to meet the OWNER’S requirements under the scope of WORK and shall not constitute a CHANGE ORDER. Should CONTRACTOR fail to so modify the WORK or replace the infringing components, OWNER may do so and all cost and expense incurred in doing so shall be recoverable from CONTRACTOR by OWNER as a debt due and payable.

46.7 In the event of any claim or action brought against OWNER arising out of the matters

referred to in ARTICLE 46.6, CONTRACTOR shall, at its own expense, and if required by OWNER, conduct all negotiations for the settlement of the same and any litigation that may arise there from. OWNER will not, unless CONTRACTOR fails to take over the conduct of the negotiation or litigation, make any admission which might be prejudicial thereto.

46.8 OWNER grants to CONTRACTOR a non-exclusive, royalty free, revocable licence to use

and reproduce the OWNER IPR solely in performance of the WORK, and subject to such conditions and restrictions on use as OWNER may notify to CONTRACTOR. CONTRACTOR shall comply in all respects with the licence (including the conditions and restrictions on use) referred to in this ARTICLE.

46.9 Subject to CONTRACTOR’S compliance with ARTICLE 46.8, OWNER shall indemnify and

hold CONTRACTOR harmless against all cost and liability arising from any claim that the OWNER IPR infringes the intellectual property rights of a third party or is not validly registered.




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ARTICLE 47

47.0 NOTICES

47.1 All notices required herein shall be in writing and shall be deemed to have

been properly given or made if sent to the respective PARTY at the address indicated below :-

OWNER : Addressed to (OWNER ADDRESS)

ATTENTION : TBA FAX : TBA

CONTRACTOR : Address to; (CONTRACTOR ADDRESS)

ATTENTION : TBA FAX : TBA

47.2 Notice shall be deemed to have been received:

If delivered by hand - At time of delivery to either Party If sent by telex/facsimile - At time of transmission If sent by registered mail - At time of receipt or recorded delivery

47.3 If the time of such deemed receipt is not during customary hours of business, notice shall be deemed to have been received at 10.00 a.m. on the first customary day of business thereafter.

47.4 Either PARTY may change the person to whom or address to which notice shall be sent by giving the other PARTY written notice of such change. 47.5 The date of any notice shall be the date it is first received at the office of the addressee or by the addressee, whichever is earlier.

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This CONTRACT shall ensure for the benefit of and be binding upon the legal representatives and successors of the PARTIES hereto.

IN WITNESS WHEREOF, the PARTIES have caused this CONTRACT to be executed in duplicate originals in their respective corporate names by their respective officers, thereunder duly authorised, as of the date and year first above written.

OWNER CONTRACTOR

For and on behalf of For and on behalf of (OWNER) (CONTRACTOR’S NAME) ______________________________ __________________________ NAME : NAME : DESIGNATION : DESIGNATION : DATE : DATE : WITNESS WITNESS _______________________ ___________________________ NAME : NAME : DESIGNATION : DESIGNATION :

DATE : DATE :




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EXHIBIT I

LETTER OF AWARD




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EXHIBIT II

MINUTES OF TECHNO-COMMERCIAL MEETING




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EXHIBIT III

CLARIFICATION CORRESPONDENCES TO CONTRACTOR’S TECHNICAL AND COMMERCIAL PROPOSALS




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EXHIBIT IV

CLARIFICATION TO THE INVITATION TO BID (ITB) DOCUMENT




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EXHIBIT V

ADDENDA TO THE INVITATION TO BID (ITB) DOCUMENT




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EXHIBIT VI

INVITATION TO BID (ITB) DOCUMENT




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EXHIBIT VII

CONTRACTOR’S TECHNICAL AND COMMERCIAL PROPOSALS