GC-42 Optional Termination

GC-43 Final Inspection And Acceptance

Mechanical Completion, Provisional Acceptance and Final Acceptance are as defined in Special condition SC-1 titled “Definitions”.

Failure by Contractor to insist upon strict performance of any terms or conditions of this Subcontract or failure or delay to exercise any rights or remedies provided herein or by law or failure to properly notify Subcontractor in the event of breach or the acceptance of or payment for any goods or services hereunder or the review or failure to review designs shall not release Subcontractor from any of the warranties or obligations of this Subcontract and not be deemed a waiver of any right of Contractor or Owner to insist upon strict performance hereof or any of its rights or remedies as to any prior or subsequent default hereunder nor any termination of work under this Subcontract by Contractor operate as a waiver of any of the terms hereof.

The provisions of this Subcontract are severable. If any provision shall be determined to be illegal or unenforceable, such determination shall have no effect on any other provision hereof and the remainder of the Subcontract shall continue in full force and effect so that the purpose and intent of this Subcontract shall still be met and satisfied.

All terms, conditions and provisions of this Subcontract which by their nature are independent of the period of performance, shall survive the cancellation, termination, expiration, default or abandonment of this Subcontract.

Owner’s Commitment to Health, Safety and the Environment & Owner’s Health, Safety and Environmental Policies is provided in :

Project Health, Safety & Environmental Plan

Early Works Emergency Preparedness Plan

Simultaneous Operations (SIMOPS)

Subcontractor shall provide the Works in accordance with the requirements of these plans which are provided somewhere else

Selection Criteria for Lowertier Subcontractors

Subcontractor shall comply with the following Selection Criteria in the selection of its lowertier subcontractors:

Licenses and Certificates

Valid Trade License from nation authorities covering the services to be provided along with oil and gas classification (for those subcontracted services to be provided within the nation)

Valid Registration Certificate from nation Chamber of Commerce & Industry covering the services to be provided along with oil and gas classification (for those subcontracted services to be provided within the nation)

Experience and Capability Requirements

Structured organisation, manpower and equipment in a condition that allows safe operation and in quantities that would meet job requirements

Adequate direct experience in jobs of similar scope and order of magnitude in the last five years

Current workload and availability of resources to comply with schedule requirements

Documented QA Systems and Procedures (typically compliance with ISO 9001)

Documented Health, Safety and Environmental Systems and Procedures (typically compliance with ISO 14001)

Excellent Safety Record

Compliance Requirements

Compliance with the subcontract scope

Compliance with Specifications

Compliance with the schedule requirements

Commercial

Financial soundness and solvency

Contracting Co. Ltd.

Onshore Gas Development Project

EXHIBIT "B"

Construction Subcontract Special Conditions
TABLE OF CONTENTS

SC Title

1 Definitions

2 Insurance

3 Contractor - Furnished Drawings And Specifications

4 Contractor - Furnished Utilities And Facilities

5 Contractor - Furnished Materials And Equipment

6 Contractor - Furnished Permits

7 Subcontractor - Furnished Drawings, Data And Samples

8 Commencement, Progress And Completion Of The Work

9 Subcontract Schedule

10 Temporary Access And Haul Roads

11 Safety, Health And Security Requirements

12 Explosives

13 Performance And Payment Securities

14 Measurement For Payment

15 Invoicing And Payment

16 Pricing Of Adjustments

17 Quality Assurance Program

18 Title And Risk Of Loss

19 Component Warranties

20 Applicable Law

21 Modifications To Exhibit “A”

22 Release Of Consequential Damages

23 Nondisclosure

24 Measurement System

25 Liquidated Damages

26 Key Personnel

27 Language Requirements

28 Drugs, Alcohol And Weapons

29 Right To Work Tools And Work Product

30 Importation Of Equipment, Materials And Services

31 Provision Of Documents

32 Contractor Review Of Documents

33 Labour

34 Customs And Duties

36 Conflict Of Interest

37 Arbitration

38 Hazardous Waste Handling

39 Deficient Works

40 Goods And Services

B-1 Owner Furnished Insurance

Construction Subcontract Special Conditions

SC-1 Definitions

Contractor means Contracting Co. Ltd., and all of its authorized representatives acting in their professional capacities.

Subcontractor means [To Be Designated] , its authorized representatives, successors and permitted assigns.

Project means the Onshore Gas Development Project for Owner located in nation for which the Work under this subcontract is being performed.

Project Document/s means the Subcontract , all hard copy and electronic versions of Project documents which shall include but not be limited to all FEED documents, drawings, P&IDs, PFDs, isometrics, plot plans, general arrangements, specifications, materials requisitions, data sheets and calculations, indices, manuals, reports, procedures, estimates, accounts, summaries, compilations, agreements including subcontractors agreements, related materials and any other document defined or described in any of the foregoing.

Provisional Acceptance means the stage when all work for the Project has been satisfactorily completed barring any minor exceptions as determined by Owner and Owner’s issuance of Provisional Acceptance Certificate(s) to Contractor for the Project under Owner/Contractor EPC Contract.

Final Acceptance means the expiry of the Warranty Period and when Subcontractor has fulfilled its obligations under the Owner/Contractor EPC Contract.

Warranty Period means the period commencing on the effective date of issuance of Plant Test Run Certificate for the Project under the Owner / Contractor Contract and ending after fifteen (15) months from the effective date of the issuance of Plant Test Run Certificate or twelve (12) months from the effective date of the last Provisional Acceptance Certificate whichever is earlier, as such period may be extended in accordance with the General Condition “Warranty” and without affecting or diminishing Subcontractor’s warranty obligations under this Subcontract which have arisen from the date or effective date of the first Provisional Acceptance Certificate if any.

Work means all the stated or implied activities to be performed by Subcontractor as required by the Subcontract Documents.

Jobsite means all locations in nation where Installations are to be permanently constructed, erected, tested, operated and maintained and all other locations where construction activity shall be performed under this Subcontract, including temporary installations required for execution of the Works.

Subcontract Milestone(s) means the established completion date(s) set forth in the Special Condition titled "Commencement, Progress and Completion of The Work."
Subcontract Schedule means the Work execution schedule developed and approved pursuant to the Special Condition titled "Subcontract Schedule."
Effective Date means the date when the Subcontract is deemed to have come into force which date is specified in the Form of Agreement.

EXHIBITS means EXHIBIT A, EXHIBIT B, EXHIBIT C, EXHIBIT D, and EXHIBIT E together with their appendices and attachments of this Subcontract.

Existing Facilities means the Existing Plant, equipment, installations and other facilities at, near or adjacent to the Jobsite owned or operated by Owner or its Affiliates.
Goods mean any and all things, including but not limited to materials and equipment (including spare parts) required for and to be incorporated in the Work.
Installation (s) means the permanent facilities including the System (s), Plant, buildings, structures, civil works, amenities and facilities or any of which constitute the Project as described in the EXHIBITS.

Plant means the unit (s) described in EXHIBITS ‘C’, ‘D’ and ‘E’ to be constructed, erected, installed and tested as part of the Work.

Specifications means specifications, drawings and procedures included or referenced in the Subcontract documents or implied therein and any modifications or additions thereto as may from time to time be approved by Owner or Contractor.

System (s) means a grouping of equipment and components, including foundations, structures, mechanical, electrical, control systems, piping and associated parts that perform a single service, function and operation as a licensed process, utility system and / or facility, which defines a specific Plant function

Nation means country where work is executed.

SC-2 Insurance

Without limitation to its obligations and responsibilities under this Subcontract, Subcontractor during the whole period of the Subcontract from commencement until the issue of Final Acceptance Certificate shall at its own expense obtain and thereafter maintain in full force and effect (or cause to be obtained and maintained) the insurance policies set forth below to be effected in the name of Subcontractor. Subcontractor shall cause the insurers or underwriters thereof to waive their rights of subrogation against Contractor and Owner indemnified parties and where feasible, to include the names of Contractor and Owner as additional assured parties.

Subcontractor shall require the same insurance from its subcontractors under the same conditions as required herein.
A. Worker’s Compensation (Owner's Liability)

Worker’s Compensation and Owner's Liability Insurance covering the employees of Subcontractor for all compensation and other benefits required of Subcontractor by Worker’s Compensation or similar statutory insurance laws of any nation or political subdivision thereof to which Subcontractor’s operations under this Subcontract are subject in respect of liability for bodily injury by accident or disease including death resulting therefrom sustained by any employee of Subcontractor arising out of and in the course of his/her employment. The limit of liability under Owners Liability Section shall be not less than United States Dollars one million (US$ 1,000,000/-) per occurrence.

Motor vehicle Third Party and passenger liability insurance in respect of death of or injury to persons and/or loss or damage to property in respect of motor vehicles used by Subcontractor in connection with the execution of the Work and shall ensure that subcontractors maintain such insurance in respect of motor vehicles used by them.

Such insurance shall provide an unlimited indemnity for death of or injury to persons and the equivalent of not less than United States Dollars one million (US$ 1,000,000/-) per occurrence for loss of or damage to property which shall be extended as may be necessary to cover any additional cover required by statutory requirements in the country of location of the Work.
C. Construction Plant and Equipment

Temporary works and all construction plant and equipment brought on Site by Subcontractor or its subcontractors for use in connection with the Project and any other property under the care and custody of Subcontractor not covered by Contractor hereof, to their full value against all loss or damage from whatever cause arising.

Insurance in respect to any vessels, craft and other floating equipment owned, chartered or hired by Subcontractor or its subcontractors used in connection with the execution of the Work shall cover all risks of physical loss or damage howsoever arising including war, civil war, strikes, and the like up to a limit equivalent to the value of such vessels, craft or floating equipment and including marine third party liability insurance in respect of legal liability to third parties of not less than United States Dollars two million (US$ 2,000,000/-) together with protection and indemnity risks with a member of the International Group of P&I Clubs including endorsements for charterers liabilities, pollution for maximum limits, cargo legal liabilities, removal of wreck, full collision liabilities and full coverage for all crew liabilities. Such insurances shall contain an express condition that the amount realisable under the Liability Section of the Policy is either up to the limit of Sum Insured or to the actual amount of claim whichever is lower and shall be free from the application of limitations of shipowners' liability under the nation. Maritime law or any other law in force relating to the shipowners' liability.

All aircraft or helicopters owned or hired by Subcontractor or its subcontractors used in connection with the execution of works/services against all risks of physical loss or damage howsoever arising, including war, civil war, strikes and the like up to a limit equivalent to the value of such aircraft or helicopters and including legal liability to third parties and passenger liability up to a limit of not less than United States Dollars two million (US$ 2,000,000/-) per accident.

F. General Third Party Risks Insurance

General third party liability insurance covering liabilities arising out of any activities of Subcontractor. Such insurance shall have a limit of liability not less than United States Dollars two million (US$ 2,000,000/-).

Evidence Of Insurance

Subcontractor shall furnish Contractor within thirty (30) days from the effective date with certificates of insurance issued by the relevant insurers or underwriters evidencing the risks insured against pursuant to the provisions of this clause also showing all parties assured and levels of indemnity. Notwithstanding the above, in respect of risks that the Subcontractor can demonstrate are not imminent immediately upon the effective date, Subcontractor shall provide the insurance certificates not later than thirty (30) days prior to the commencement of the relevant activity.

All deductibles provided under the insurances arranged by Subcontractor as required under this clause (the amounts of which Subcontractor acknowledges to have seen) shall be for the account of and paid by Subcontractor.

Insurers To Be Used

For Work performed in the nation, insurance policies arranged in accordance with this clause shall also comply with Law with one or more of the following national insurance companies:

Notice to contractor and remedy on subcontractor's failure to insure

Subcontractor shall provide Contractor with timely advance notice of any changes in the terms of the policies, which are to be carried by Subcontractor under this clause including any cancellation notices.

If Subcontractor fails to keep in force the insurance which may be required to effect under the terms of this clause, then Contractor may effect and keep in force any such insurance and pay the premium as may be necessary for that purpose and from time to time deduct the amount so paid by Contractor in respect of such premium from any money due or which may become due to Subcontractor or recover the same as a debt due from Subcontractor.

Protection Of Contractor’s Rights

Approval by Contractor of any insurer or terms of insurance proposed by Subcontractor shall not relieve Subcontractor from any obligation or liability under or arising from this Subcontract or under the mandatory provisions of law.

Costs And Incidental Expenses

All costs and incidental expenses incurred in relation to the preparation of claims under the policies arising out of matters for which Subcontractor is responsible under the Subcontract shall be borne by Subcontractor.

2.0 Owner Furnished Insurance:

Without limitation of Subcontractor’s obligations and responsibilities under the Subcontract, Owner shall at the appropriate time, insure (subject to the following provisions) at its own expense in the joint names of Owner and Contractor and its subcontractors performing works at the work Jobsite in respect of :-

Land, Sea and Air Transit Insurance

All materials, machinery and other property of whatsoever kind for incorporation in the Works during marine shipments, land and air transportation. Such insurance shall include an insurer’s waiver of subrogation in favour of Contractor Indemnified Parties and shall be subject to London Institute Cargo Clauses.

Insurance of Work in Progress during Construction

The Works, the Goods for incorporation or intended to be incorporated therein, Owner’s equipment if any, all in connection herewith and Existing Facilities, but excluding items which Subcontractor is required to insure under this Special Condition, subsection 1.0 titled “Insurance To Be Provided By Subcontractor” , shall be insured, against insurable physical loss of damage to the replacement value thereof from commencement of construction at the Jobsite until completion of the Work and also during the Warranty Period

General Legal Third Party Risks Insurance

Physical loss of or damage to any Third Party property or injury to or death of any Third Party which may arise out of or in connection with the execution of the Project, such insurance to be on a combined single limit of not less than US Dollars Twenty Million (US$20,000,000) in respect of any one accident or series of accidents arising out of one event.

If following loss or damage to Work, or other loss or damage insured pursuant to this Special Condition, subsection 2.0, titled “Owner Furnished Insurance”, a claim is made under a policy of insurance effected by Owner, Subcontractor shall be paid the amounts (if any) recovered from such policy upon rectifying the loss or damage or settling the relevant liability as the case may be and after deducting the amounts due to Owner, if any, in respect of Owner’s expenses. Provided, however, that Subcontractor’s liability for rectification of any such loss or damage shall not exceed the deductible amounts per occurrence specified in Exhibit “B”,Appendix B-1. Owner undertakes to make on-account payments to Subcontractor to fund the cost of rectification of any such loss or damage in excess of United States Dollars Ten Million.

In the event of any failure by Subcontractor to make good in accordance with the terms of the Subcontract, such loss or damage to the Project, which falls within the deductibles and exceptions aforesaid, Owner may deduct the applicable amounts from the sums otherwise due to Subcontractor under the Subcontract or recover the same as a debt due from Subcontractor.
Claims Procedure

Subcontractor and/or its subcontractors shall notify insurers with one copy to Owner and one copy to Contractor of any occurrence likely to give rise to a claim under Owner’s insurances as soon as possible and in any event within three (3) days of such occurrence coming to the notice of Subcontractor.

Subcontractor shall also submit in co-ordination with Owner the entire claim documents to the Insurers directly and shall handle all claim negotiations directly with the Insurers. After approval and signature of the claim discharge receipt and letter of subrogation by Owner, the actual settlement of the claim amounts due to Subcontractor shall be effected by the Insurers directly to Subcontractor’s account, with the claim amounts due to Owner being effected by the Insurers directly to Owner’s account.

Notifications:

In accordance with the submittal requirements outlined above, Subcontractor shall deliver the original and two (2) copies of the Certificate(s) of Insurance required by this clause and all subsequent notices of cancellation, termination and alteration of such policies to:

Eastern Co. Ltd.

Attention: Project Subcontracts Manager

Reference: Subcontract No.

SC-3 Contractor-Furnished Drawings And Specifications

SC-4 Contractor - Furnished Utilities And Facilities

None

None