SECTION 1 GENERAL CONDITIONS OF SUBCONTRACT FOR LABOUR ONLY SUBCONTRACT WORK

Transcription

1 SECTION 1 GENERAL CONDITIONS OF SUBCONTRACT FOR LABOUR ONLY SUBCONTRACT WORK

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3 PAGE i TABLE OF CONTENTS 1. GENERAL PROVISIONS Definitions Interpretation Communications Language of the SUBCONTRACT ASSIGNMENT Assignment by SUBCONTRACTOR Assignment by MMHE CONFIDENTIALITY Confidential Information LICENCES, PERMITS, LAWS AND REGULATION Obtaining of Permits, Licenses and Authorisations Compliance with Law Bribery and Corruption under the Malaysian Anti-Corruption Commission Act 2009 (Act 694) Site Rules and Regulation, and Access to the Site Tax MHB Code of Conduct and Business Ethics (CoBE) MMHE S ADMINISTRATION MMHE s Representative MMHE s Site Representative Delegated Person Instructions SUBCONTRACTOR'S ADMINISTRATION SUBCONTRACTOR s General Obligation Representations and Warranties of the SUBCONTRACTOR SUBCONTRACTOR s Site Representative SUBCONTRACTOR to Satisfy Himself Coordination and Co-operation Setting Out and Markings Unforeseeable Difficulties Sufficiency of SUBCONTRACT PRICE MMHE's Supplied Constructional Plant and Free-Issue Material SUBCONTRACTOR's Supplied Constructional Plant, Temporary Works and Services Quality Assurance PERFORMANCE BOND Submission of Performance Bond Validity of Performance Bond Default in Providing Performance Bond Release of the Performance Bond by MMHE Unfulfilled Obligations HEALTH, SAFETY AND ENVIRONMENT (HSE) Compliance with HSE Requirements HSE Measures HSE Recognition Safety Official and Personnel Environmental Matters Default of SUBCONTRACTOR Right to Stop Work on HSE Ground Right to Withhold Payment on HSE Ground... 18

4 PAGE ii TABLE OF CONTENTS 8.9 Consequence Management for HSE Non-Compliance QUALITY, INSPECTION AND TESTING Quality Assurance and Quality Control Right to Witness, Inspect and Test Right to Require SUBCONTRACTOR to Inspect and Test Cover up of WORK Stop Works for Investigation Consequences and Cost of Investigation MMHE's right to reject WORK SUBCONTRACTOR Responsible for Cost of Uncovering, Testing, Inspection, Repair, etc Continuing obligation SUBCONTRACTOR to Rectify Damage STAFF AND LABOUR Engagement of Labour Poaching of Workers Employment Matters Relating to SUBCONTRACTOR's Personnel Workmen and Labour Behaviour, Medical and Health Security SUBCONTRACTOR s Superintendence Removal of Workmen and Other Personnel COMMENCEMENT OF WORKS AND DATE FOR COMPLETION Date of Commencement Completion Date and Certificate of Completion Completion of Outstanding WORK and Punchlist Items DELAYS AND DELAY DAMAGES Liquidated Damages for Delay in Completion Duty to Mitigate the Delay Extension of Time for Completion CHANGE IN THE WORKS Variations and Adjustments Submission of Claims WORKS PROGRAMME AND METHOD OF WORKING Works Programme to be Furnished by SUBCONTRACTOR Modification or Revision to Works Programme Methods of Working Modification or Revision to Method of Working Expediting Progress of WORK Tests on Completion GUARANTEE AND DEFECTS LIABILITY General Guarantee Period Notification Upon Defect Additional Inspection Rectification Consequence of Non-Compliance MMHE's Right to Repair or Rectify Effect of Rectification or Repair by MMHE Guarantee Bond PAYMENTS Timing and Method of Payment... 32

5 PAGE iii TABLE OF CONTENTS 16.2 Invoicing Direct Payment to Suppliers or Employees SUSPENSION MMHE's Right to Suspend Suspension for Default Suspension for Non-Default Continuing Obligations and Rights Resumption Suspension Over 90 Days DEFAULT OF THE SUBCONTRACTOR DISCONTINUANCE AND TERMINATION Termination Discontinuance Consequences of Notice Payments in the Event of Discontinuance or Termination for Default Payments in the Event of Discontinuance or Termination for Non-Default SUBCONTRACTOR's Continuing Obligations RISK AND RESPONSIBILITY Liability for MMHE Property and Personnel Liability of SUBCONTRACTOR Property and Personnel Consequential Damages Intellectual and Industrial Property Rights Computer Software INSURANCE SUBCONTRACTOR's Duty to Insure SUBCONTRACTOR Responsibility for Deductibles, etc Non-Compliance with Insurance Terms Co-insured, Waiver of Subrogation and Cross Liability Claims Handling Certificate of Insurance Failure to Insure Construction All Risks (C.A.R.) Insurance arranged by the Client General Liability Insurance Workmen's Compensation and/or Employer's Liability Insurance FORCE MAJEURE Non-Liability, Payment and Price Definition of Force Majeure Procedure on Force Majeure GOVERNING LAW AND DISPUTE RESOLUTION Governing Law Arbitration AUDIT Scope of Audit Retention of Records Inspection and Reproduction of Records Claims for Omissions, Corrections or Errors MISCELLANEOUS PROVISIONS Entire Contract Waiver Severability... 45

6 PAGE iv TABLE OF CONTENTS APPENDIX 1 SUMMARY OF SUBCONTRACT... 1 APPENDIX 2 - PERFORMANCE BOND FORM... 1 APPENDIX 3 - CERTIFICATE OF COMPLETION... 1 APPENDIX 4 - SUBCONTRACT CLOSURE CERTIFICATE... 1 APPENDIX 5 MHB CODE OF CONDUCT AND BUSINESS ETHICS (COBE)... 1

7 PAGE 1 OF GENERAL PROVISIONS 1.1 Definitions In this SUBCONTRACT (as hereinafter defined) the following words and expressions shall have the meaning hereby assigned to them except where the context otherwise requires: "Affiliates" or Affiliated Company means a company which is: (i) the holding company of another corporation, (ii) a subsidiary of another corporation, or (iii) a subsidiary of the holding company of another corporation. For the purposes of (ii) and (iii) in Sub-Clause, a company shall be deemed to be a subsidiary of another company, if that other company: (i) controls the composition of the board of directors of the first mentioned company, (ii) controls more than half of the voting power of the first mentioned company, or (iii) holds more than half of the issued share capital of the first mentioned company (excluding any part thereof which consists of preference shares); or (iv) the first mentioned company is a subsidiary of any company which is that other company s subsidiary. Certificate of Completion means a certificate issued by MMHE pursuant to Sub-Clause 11.2:[Completion Date and Certificate of Completion]. A blank copy of the approved form is included as Appendix 3:[Certificate of Completion] herein. Client means the organization named in Appendix 1:[Summary of SUBCONTRACT], to whom MMHE shall deliver the completed WORK. Client Group means the Client and its affiliates, its co-venturers and its and their respective directors, officers and employees (including agency personnel). Constructional Plant shall mean all equipment, tools, appliances or things of whatsoever nature required in or about the execution, completion or maintenance of the WORK or Temporary Works but does not include Materials or other things intended to form or forming part of the WORK. Constructional Plant may mean MMHE s Constructional Plant or SUBCONTRACTOR s Constructional Plant, as the context requires. SUBCONTRACTOR means the company stated in the Form of Agreement and includes its successors and permitted assignees. SUBCONTRACTOR s Site Representative means the person named by the SUBCONTRACTOR in the SUBCONTRACT or appointed from time to time by the SUBCONTRACTOR under Sub-Clause 6.3[SUBCONTRACTOR s Site Representative], who acts on behalf of the SUBCONTRACTOR.

8 PAGE 2 OF 45 Subcontract Closure Certificate means a document signed between MMHE and SUBCONTRACTOR confirming that SUBCONTRACTOR shall not be entitled to make further claims under the provisions of this SUBCONTRACT. A blank copy of the approved form is included as Appendix 4:[Subcontract Closure Certificate] herein. SUBCONTRACT PRICE means the sum specified in the SUBCONTRACT, as may be adjusted pursuant to the provisions of the SUBCONTRACT, to be paid to the SUBCONTRACTOR by MMHE in accordance with the provisions of the SUBCONTRACT for the performance of the WORK by the SUBCONTRACTOR. Legal stamping fees are included as part of SUBCONTRACT PRICE. SUBCONTRACT means the documents specified in the Form of Agreement as forming part of the SUBCONTRACT. Effective Date means the date so stated in the Appendix 1:[Summary of SUBCONTRACT]. Force Majeure means an event beyond the control of either party and as more particularly described in Clause 22:[Force Majeure]. Guarantee Period means the period stated in Appendix 1:[Summary of SUBCONTRACT]. Inspection Authority means the representative of any organization appointed by MMHE or the Client for the purpose of inspecting the WORK. Main Contract means the contract between MMHE and the Client. Materials means equipment, materials, machinery, goods, plant, tools, supplies, articles, software, documents, drawings and other things intended to form or forming part of the Permanent Works. MMHE means the company stated in the Form of Agreement and includes its successors and permitted assignees. MMHE s Site Representative means a person appointed from time to time by MMHE and notified in writing to SUBCONTRACTOR and who shall have the authority to perform the duties set forth in Sub-Clause 5.2:[MMHE s Site Representative] hereof on behalf of MMHE. Permanent Works means the permanent works to be constructed and executed by the SUBCONTRACTOR under this SUBCONTRACT. "Parent Company" means the ultimate holding company as defined in section 5A of the Companies Act Petronas means Petroliam Nasional Berhad. Site means MMHE s fabrication yard in Pasir Gudang, Johor, Malaysia and the lands and any other places to, under, in or through which the WORK are to be executed or carried out or to which materials are to be delivered by SUBCONTRACTOR and any other land or places provided by MMHE for the purposes of the SUBCONTRACT together with such other places as may be specifically designated in the SUBCONTRACT or in writing from time to time by MMHE s Site Representative as forming part of the Site.

9 PAGE 3 OF 45 Scope of Work means the document entitled scope of work included to this SUBCONTRACT, and any additions and modifications to such document in accordance with the SUBCONTRACT. Such document specifies the purpose, scope, specifications and/or design and/or other technical criteria, for the WORK. Temporary Works means all temporary works of every kind required in or about the execution, completion or maintenance of the WORK. Tests on Completion means such tests to be made by SUBCONTRACTOR before the WORK are taken over by MMHE as are provided for in the SUBCONTRACT and such other tests as may be agreed between MMHE and SUBCONTRACTOR. 1.2 Interpretation "Variation Order" means an instruction issued by MMHE to the SUBCONTRACTOR to proceed with a change in the WORK and to record the adjustments to the SUBCONTRACT PRICE and/or Completion Date. WORK means all the works and services to be executed by SUBCONTRACTOR including the provision of materials and equipment in accordance with the SUBCONTRACT. WORK may mean Temporary or Permanent Works as appropriate. 1.3 Communications (d) Words importing the singular only also include the plural and vice versa where the context requires. The headings and marginal notes in these General Conditions of Subcontract shall not be deemed to be part thereof or be taken into consideration in the interpretation of these General Conditions of Subcontract. All official correspondence between MMHE and SUBCONTRACTOR shall be by letter or telefax. Only properly directed correspondence as set forth in Section 5 Administration Procedures shall be considered to have contractual validity. MMHE and SUBCONTRACTOR may change their correspondence address by notice in writing to the other party. All notices under this SUBCONTRACT shall be in writing by one of the following means: (i) (ii) Delivered by hand, and which will be deemed to be given at the time of signed acknowledgement of receipt. Sent by registered post, and which will be deemed to be given at the time of receipt of the recorded delivery. If the time of receipt is not during customary hours of business, the notice will be deemed to have been given at 10:00 a.m. on the first business day thereafter. 1.4 Language of the SUBCONTRACT All verbal and written communication between SUBCONTRACTOR and MMHE shall be in the English Language.

10 PAGE 4 OF ASSIGNMENT 2.1 Assignment by SUBCONTRACTOR The SUBCONTRACTOR shall not assign the whole or any part of the SUBCONTRACT nor any benefit or interest under it without the prior written approval of MMHE. Any purported assignment without the written approval of MMHE shall be absolutely void against MMHE. In such event, MMHE shall have no obligation whatsoever to the purported assignee. Any such purported assignment shall not release or relieve the SUBCONTRACTOR of any of its obligations under the SUBCONTRACT. 2.2 Assignment by MMHE MMHE shall be entitled to assign the whole or any part of the SUBCONTRACT or any benefit or interest under it at any time without the approval of the SUBCONTRACTOR provided that MMHE notifies the SUBCONTRACTOR of such an assignment. In the event of discontinuance of part or all of the works or termination of the Main Contract, the SUBCONTRACTOR shall, at MMHE's option, assign any such SUBCONTRACT to Client. Unless such an assignment takes place, the SUBCONTRACTOR shall be responsible only to MMHE who shall in turn be responsible to Client. 3. CONFIDENTIALITY 3.1 Confidential Information (d) The SUBCONTRACTOR shall keep in confidence and shall not disclose, in whole or in part, to any third party any and all technical and commercial information, including, but not limited to, designs, specifications, or knowhow, which is disclosed directly or indirectly to the SUBCONTRACTOR by MMHE or the Client. The SUBCONTRACTOR shall not use such information in any way except for the performance of the WORK under the SUBCONTRACT and shall limit access to such information to those of its employees reasonably requiring the same for such purpose. The provisions of clause shall not apply to any information that: (i) (ii) (iii) now or hereafter becomes a part of the public domain through no fault of the SUBCONTRACTOR; was already in the possession of the SUBCONTRACTOR at the time of disclosure; or otherwise lawfully becomes available to the SUBCONTRACTOR from a third party under no obligation of confidentiality. The SUBCONTRACTOR agrees to obtain MMHE s written consent prior to making publicity releases or announcements with respect to the SUBCONTRACT and/or the WORK. The SUBCONTRACTOR shall promptly return to MMHE or dispose of or destroy all documents and copies thereof in whatever form furnished by MMHE on completion of the performance of the WORK under the SUBCONTRACT or on termination of the SUBCONTRACT.

11 PAGE 5 OF LICENCES, PERMITS, LAWS AND REGULATION 4.1 Obtaining of Permits, Licenses and Authorisations (d) In the performance of this SUBCONTRACT, the SUBCONTRACTOR shall obtain and maintain, all necessary permits, licenses and authorisations in the country or countries where any part of the SUBCONTRACT is being performed including, without limitation: (i) (ii) all necessary or appropriate import and export licenses and customs clearances for WORK and/or Constructional Plant for the SUBCONTRACT and providing all documentation in support of such licenses and clearances; all necessary immigration and/or work permits for personnel engaged in the performance of the SUBCONTRACT; MMHE shall not be responsible for any costs of obtaining or maintaining any of the foregoing permits, licenses and authorisations. The SUBCONTRACTOR shall provide written evidence of compliance with all permits, laws and regulations or exemptions or waivers therefrom within seven (7) days of being so requested by MMHE. The SUBCONTRACTOR shall maintain a valid license and/or registration with Petronas throughout the duration of this SUBCONTRACT. 4.2 Compliance with Law (d) The SUBCONTRACTOR shall abide by and comply with all applicable laws, rules and regulations of any governmental or regulatory body having jurisdiction over the SUBCONTRACT. If the SUBCONTRACTOR performs any part of the SUBCONTRACT contrary to the law, the SUBCONTRACTOR shall bear any additional costs of the SUBCONTRACT and any other consequences resulting from said violation and correction thereof. For the purpose of this clause, "law" includes any law, act, ordinance, regulation, rule, by-law, order, directive, policy and guideline of the government (whether federal, state, local, municipal or other) of any country in which any part of the SUBCONTRACT is performed or of any such governmental or regulatory body, authority or agency. The SUBCONTRACTOR shall defend, indemnify and hold MMHE and Client Group harmless (such indemnity shall also include the full amount of all costs and expenses associated therewith) from all forms of: (i) (ii) penalty which may be imposed on MMHE and Client Group by reason of any actual or alleged violation of law by the SUBCONTRACTOR. claims, suits or proceedings that may be brought against MMHE or Client Group in any way related to, arising under, growing out of, or by reason of the SUBCONTRACT with respect to such alleged violation of law whether brought by employee of the SUBCONTRACTOR or by third parties or by any relevant authority.

12 PAGE 6 OF 45 (e) (iii) loss or damage suffered by MMHE and Client Group in the event that the SUBCONTRACTOR shall in relation to the SUBCONTRACT, have committed any act, whether before, on or after the date of the SUBCONTRACT, which is an offence under the Laws of Malaysia (or any other similar law or enactment in force at the place for the performance of any part of the SUBCONTRACT outside Malaysia) or would have constituted such an offence. The SUBCONTRACT PRICE shall be adjusted to take account of any increase or decrease in the SUBCONTRACT PRICE resulting from a change in the Laws of Malaysia (including orders, regulations, decrees) which becomes effective after the Effective Date of the SUBCONTRACT and which materially affects the SUBCONTRACTOR s Scope of Work. If the SUBCONTRACTOR incurs additional costs solely as a result of such change in law, the SUBCONTRACTOR shall give reasonable notice to MMHE and the SUBCONTRACTOR may claim for such additional cost to the extent which directly is attributable to such change in law. 4.3 Bribery and Corruption under the Malaysian Anti-Corruption Commission Act 2009 (Act 694) Any form of gratification in connection with this SUBCONTRACT is strictly prohibited. SUBCONTRACTOR including all of its employees and agents (of any tier) shall not directly or indirectly solicit, accept or obtain or agreeing to accept or attempting to obtain, from any party for themselves or for any other party or offer, promise or give to any party any bribe or gratification as an inducement or a reward. For purposes herein, a bribe or gratification is any gift, payment, benefit or other advantage, pecuniary or otherwise, offered, given or received in order to secure an undue or improper result, award, decision, benefit or advantage of any kind. Without prejudice to any other rights that MMHE may have under the SUBCONTRACT or at law, MMHE may terminate the SUBCONTRACT or any work immediately upon notice in writing should the SUBCONTRACTOR including any of its employees, and agents violate the provisions of this subclause. 4.4 Site Rules and Regulation, and Access to the Site The SUBCONTRACTOR shall acquaint all its personnel, employees and agents, with current Site rules and regulations, including safety regulations enforced by the MMHE. MMHE has the right to impose any form of penalties or summons on the SUBCONTRACTOR due to non- compliance or violation of any regulation or laws or bye laws by its or personnel, employees and/or agents that caused pecuniary losses or any form of damages and civil liabilities and costs incurred by MMHE due to the noncompliance or violation. Subject to Sub-Clause 4.4 above, MMHE shall give the SUBCONTRACTOR right of access to, and possession of so much of the Site as may be required to enable the SUBCONTRACTOR to commence and proceed with the construction of the WORK. The right and possession may not be exclusive to the SUBCONTRACTOR.

13 PAGE 7 OF 45 (d) (e) 4.5 Tax If no such time is stated in the SUBCONTRACT, MMHE shall give the SUBCONTRACTOR right of access to, and possession of, the Site within such times as required to enable the SUBCONTRACTOR to proceed without disruption in accordance with the programme submitted under Sub- Clause 14.1[Works Programme to be Furnished by SUBCONTRACTOR]. If the SUBCONTRACTOR suffers delay as a result of a failure by MMHE to give any such right or possession within such time which causes a delay in the commencement of the WORK or any part(s) of the WORK, the SUBCONTRACTOR shall give notice to MMHE s Site Representative and subject to MMHE s approval, SUBCONTRACTOR shall be entitled to claim an extension of time for completion for WORK or any part of the WORK but the SUBCONTRACTOR shall not be entitled to claim for any loss or damage caused by such delay of possession. However, if and to the extent that MMHE s failure was caused by any error or delay by the SUBCONTRACTOR, including an error in, or delay in the submission of, any of the SUBCONTRACTOR s documents required for entering the Site, the SUBCONTRACTOR shall not be entitled to such extension of time. The SUBCONTRACTOR shall be responsible for his employees tax liabilities and shall comply with the requirements of the Malaysian Government in this respect. Tax or taxes shall include: (i) (ii) (iii) Taxes due on income, profits, excess profits of SUBCONTRACTOR as a result of SUBCONTRACTOR operating within Malaysia. Taxes due and payable by SUBCONTRACTOR in countries outside of Malaysia. Taxes and duties due on any offices or property whether owned, occupied or operated by SUBCONTRACTOR including vehicles, plants, franchise, licenses, permits, registration fees. All employment taxes and contributions imposed by law, or trade union contracts, or regulations with respect to or measured by the compensation (wages, salaries, bonuses and benefits) paid to employees of SUBCONTRACTOR including, without limitation, taxes and contributions for unemployment and compensation insurance, old age benefits, welfare funds, pensions and annuities and disability insurance and similar items. Where required by the relevant authority, MMHE shall deduct whatever sum so required from any payment due to the SUBCONTRACTOR and pay over such deductions to the said authority from time to time. Such deductions paid over to the relevant authority shall constitute as payment to the SUBCONTRACTOR. MMHE shall have the right to withhold and remit taxes from payment due to the SUBCONTRACTOR under this SUBCONTRACT, to the extent that such withholding may be required by the Government of Malaysia or any relevant authorities thereof, or by the government of any other country, and payment by MMHE to the respective governmental office of the amount of money so withheld will relieve MMHE from any further obligation to the SUBCONTRACTOR with respect to the amount so withheld. Where the SUBCONTRACTOR is of opinion that it is not subject to withholding tax, it is the sole responsibility of the SUBCONTRACTOR to secure the written direction of the relevant authorities and submit the original copy to MMHE.

14 PAGE 8 OF 45 Upon receipt of such written direction, MMHE may make the said payments without deduction of such taxes. The SUBCONTRACTOR and its SUBCONTRACTOR shall indemnify and hold MMHE and its Affiliates safe and harmless from any and all demands, claims, actions, awards, judgments, costs, liabilities, fines, penalties, loss or damage, including any and all expenses, disbursements, costs, legal fees, interests, sums and amounts which MMHE suffers, incurs or is put to, resulting from, or in any way connected with: (i) any assessment or imposition of tax based on any actual or alleged failure by the SUBCONTRACTOR to make timely payment of any taxes for which they are liable; or (ii) any actual or alleged failure by the SUBCONTRACTOR to comply with applicable reporting, return or other procedural requirements with respect to such taxes. The SUBCONTRACTOR shall give prompt notice to MMHE on all matters relating to any demand, claim or action pertaining to taxes which may affect the performance of the SUBCONTRACTOR's obligation under this SUBCONTRACT. In the event MMHE has paid or incurred any liability for any tax on behalf of the SUBCONTRACTOR, which is subsequently determined to be not payable, the SUBCONTRACTOR shall promptly account for and refund to MMHE all such tax paid. 4.6 MHB Code of Conduct and Business Ethics (CoBE) SUBCONTRACTOR acknowledges that MMHE s professional activities are governed by a set of commitments, values and charters describe on MHB Code of Conduct and Business Ethics or acronym CoBE. The CoBE provided in Appendix 5 of these Conditions will form part of the SUBCONTRACT. SUBCONTRACTOR hereby declares that it is informed about MHB Code of Conduct and Business Ethics and that it is familiar with and understands the provisions of the CoBE. SUBCONTRACTOR declares that it has not engaged and will not engage in any conduct that violates the CoBE provisions and shall abide by such provision while performing the SUBCONTRACT. Without prejudice to any other rights that MMHE may have under the SUBCONTRACT or at law, MMHE may terminate the SUBCONTRACT or any work immediately upon notice in writing should SUBCONTRACTOR including any of its employees, and agents violate the CoBE. 5. MMHE S ADMINISTRATION 5.1 MMHE s Representative MMHE shall appoint a representative (hereafter referred to as MMHE Representative ) whom shall represent MMHE and act on MMHE behalf under the SUBCONTRACT whose contact details are set out in the Section 5 Administration Procedures. MMHE may change MMHE Representative at any time and shall give written notification to the SUBCONTRACTOR of the replacement s name, address, duties, authority, and of the date of appointment.

15 PAGE 9 OF MMHE s Site Representative (d) MMHE's Representative shall appoint a Site representative (hereafter referred to as MMHE s Site Representative ) who shall have the obligation to monitor, direct, and supervise day to day operation and execution of the WORK including issuance of the Variation Orders. However such authority shall be subject to the limits of authority as notified to SUBCONTRACTOR from time to time by MMHE. Any written instruction or approval given by MMHE s Site Representative to SUBCONTRACTOR within the terms of such delegation or as expressly stated under the SUBCONTRACT shall bind SUBCONTRACTOR and MMHE as though it had been given by MMHE. Provided always as follows: (i) (ii) any failure to disapprove any WORK shall not constitute approval, and shall therefore not prejudice the right of MMHE to reject the WORK at any time; it shall not relieve the SUBCONTRACTOR from any responsibility it has under the SUBCONTRACT, including responsibility for errors, omissions, discrepancies and non-compliances; (iii) under (i) and (ii) above, all costs shall be borne by SUBCONTRACTOR and there shall no adjustment to the Completion Date. MMHE s Site Representative shall have no authority to amend, adjust or terminate the SUBCONTRACT. MMHE may at any time revoke such delegation in writing. Any such delegation or revocation shall be in writing and shall not take effect until a copy of such delegation or revocation has been delivered to the SUBCONTRACTOR. 5.3 Delegated Person 5.4 Instructions MMHE s Site Representative may from time to time delegate to his assistant any of the duties vested to him. Notwithstanding any such delegation of duties, the delegated person shall have no power to amend, adjust or terminate the SUBCONTRACT. MMHE s Site Representative or MMHE s Representative may at any time revoke such delegation. Any such delegation or revocation shall be in writing and shall not take effect until a copy of such delegation or revocation has been delivered to the SUBCONTRACTOR. MMHE s Site Representative may issue instructions and directions to the SUBCONTRACTOR on matters relating to the WORK. SUBCONTRACTOR shall comply with instructions and directions issued by MMHE s Site Representative within the ambit of his authority in Sub-Clause 5.2:[MMHE s Site Representative] above in a timely manner.

16 PAGE 10 OF SUBCONTRACTOR'S ADMINISTRATION 6.1 SUBCONTRACTOR s General Obligation (d) (e) The SUBCONTRACTOR shall execute and complete the WORK in accordance with the SUBCONTRACT and with MMHE s Site Representative s instructions, and shall remedy any defects in the WORK. SUBCONTRACTOR shall with due diligence and in a good and workmanlike manner carry out and complete the WORK in accordance with the SUBCONTRACT and shall in all respects meet the quality, standards and warranty requirements of the SUBCONTRACT. SUBCONTRACTOR shall execute, carry out and complete the WORK and SUBCONTRACTOR shall not do any act or omission in relation thereto which shall cause or contribute to any breach by MMHE of any of its obligations under the Main Contract. The SUBCONTRACTOR shall supply sufficient and suitable labour to execute the WORK, and provide the Construction Plant and SUBCONTRACTOR s documents specified in the SUBCONTRACT, and all SUBCONTRACTOR s personnel, goods, consumables and other things and services, whether of a temporary or permanent nature, required in and for execution, completion and remedying of defects. The SUBCONTRACTOR shall be responsible for the adequacy, stability and safety of all Site operations and of all methods of construction including Temporary Works. 6.2 Representations and Warranties of the SUBCONTRACTOR (d) SUBCONTRACTOR hereby acknowledges and agrees that MMHE is relying solely on SUBCONTRACTOR s knowledge, expertise and experience in the performance of the WORK. SUBCONTRACTOR warrants that its personnel shall be appropriately qualified, licensed, skilled and experienced in their respective trades or occupations and that it has the required numbers of such personnel; further it has competent supervisory and management staff to diligently and expeditiously perform the WORK. The SUBCONTRACTOR shall not subcontract any part of the WORK to another contractor and any purported subcontracting shall be considered a default by SUBCONTRACTOR. SUBCONTRACTOR shall fully indemnify and hold harmless MMHE in respect of any breaches of the terms set out hereinabove. 6.3 SUBCONTRACTOR s Site Representative SUBCONTRACTOR shall appoint the SUBCONTRACTOR s Site Representative and shall give him all authority necessary to act on the SUBCONTRACTOR s behalf under the SUBCONTRACT. The SUBCONTRACTOR s Site Representative shall have full authority concerning the supply of materials, personnel and services for the WORK and shall have full authority to discharge SUBCONTRACTOR s responsibility in accordance with the SUBCONTRACT. Unless the SUBCONTRACTOR s Site Representative is named in the SUBCONTRACT, SUBCONTRACTOR shall, within 14 days from Effective Date, submit to MMHE s Site Representative for consent the name and particulars of the person the SUBCONTRACTOR proposes to appoint as

17 PAGE 11 OF 45 (d) (e) (f) SUBCONTRACTOR s Site Representative. If consent is withheld or subsequently revoked in terms of Sub-Clause 10.7:[Removal of Workmen and Other Personnel], or if the appointed person fails to act as SUBCONTRACTOR s Site Representative, the SUBCONTRACTOR shall similarly submit the name and particulars of another suitable person for such appointment. SUBCONTRACTOR s Site Representative responsibility among other things is to look after his workforce. The SUBCONTRACTOR s Site Representative must be fully aware of and understand the safety rules and requirements of the WORK and shall enforce the same amongst SUBCONTRACTOR s workforce. The SUBCONTRACTOR s Site Representative should also possess adequate knowledge of the relevant requirements as set out by statutes, laws and by-laws. SUBCONTRACTOR shall not, without the prior consent of MMHE s Site Representative, revoke the appointment of the SUBCONTRACTOR s Site Representative or appoint a replacement. If the SUBCONTRACTOR s Site Representative is to be temporarily absent from the Site during the execution of the WORK, a suitable replacement person shall be appointed, subject to MMHE s Site Representative s prior consent, and MMHE s Site Representative shall be notified accordingly. SUBCONTRACTOR s Site Representative shall, on behalf of the SUBCONTRACTOR, receive instructions under Sub-Clause 5.4:[Instructions]. SUBCONTRACTOR s Site Representative may delegate any powers, functions and authority to any competent person, and may at any time revoke the delegation. Any delegation or revocation shall not take effect until MMHE s Site Representative has received prior notice signed by the SUBCONTRACTOR s Site Representative, naming the person and specifying the powers, functions and authority being delegated or revoked. 6.4 SUBCONTRACTOR to Satisfy Himself SUBCONTRACTOR shall be deemed to have: (i) inspected and examined the Site to determine all necessary services, labour, Constructional Plant, Temporary Works and Materials required for the performance of the WORK; (ii) familiarised 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; (iii) obtained 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; (iv) examined general and local conditions including climatic, water and weather conditions, and all other matters which could affect progress or performance of the WORK. As provided under Sub-Clause 6.7:[Unforeseeable Difficulties], no claim by SUBCONTRACTOR for payment additional to the SUBCONTRACT PRICE shall be allowed on the grounds of any misunderstanding or misapprehension or that there were unforeseeable difficulties in respect of any such matter or on the grounds of any allegation or fact that incorrect

18 PAGE 12 OF 45 information was given to SUBCONTRACTOR before tendering or before entering into the SUBCONTRACT. 6.5 Coordination and Co-operation SUBCONTRACTOR shall cooperate and coordinate its work with other contractors who may be engaged on the Site as required by MMHE s Site Representative. If in the reasonable view of MMHE, SUBCONTRACTOR willfully obstructs or disrupts other work on the Site it shall be default of the SUBCONTRACTOR pursuant to Clause 18:[Default of the SUBCONTRACTOR] entitling MMHE to terminate the SUBCONTRACT pursuant to Clause 19:[Discontinuance and Termination]. All costs associated with SUBCONTRACTOR having to coordinate his activities or to change the sequence of the WORK to comply with this provision shall be deemed to be included in the SUBCONTRACT PRICE. SUBCONTRACTOR shall consult with MMHE s Site Representative for any Site issues with MMHE, third parties and other contractors. When more than one subcontractor has to work at a particular location and there is limited working space, MMHE s Site Representative shall have the prerogative to decide on priority. 6.6 Setting Out and Markings SUBCONTRACTOR shall be fully responsible to ensure that the positions, levels, dimensions and markings of the WORK are correct as specified in the SUBCONTRACT notwithstanding any approval by MMHE s Site Representative in setting out the said positions, levels and dimensions. SUBCONTRACTOR shall give to MMHE s Site Representative all necessary information and assistance to enable MMHE s Site Representative to check the setting out of the WORK including interpreting any marks made by SUBCONTRACTOR for the purpose of setting out. If any errors or mistakes in the setting out and marking are made by SUBCONTRACTOR which result in the damage or loss of the Constructional Plant, Materials and services supplied by MMHE, the cost and expenses for making good, replacing or repairing the above said Constructional Plant, Materials and services shall be borne by SUBCONTRACTOR. 6.7 Unforeseeable Difficulties Except as otherwise stated in the SUBCONTRACT: the SUBCONTRACTOR shall be deemed to have obtained all necessary information as to risks, contingencies and other circumstances which may influence or affect the WORK; by signing the SUBCONTRACT, the SUBCONTRACTOR accepts total responsibility for having foreseen all difficulties and costs of successfully completing the WORK; and the SUBCONTRACT PRICE shall not be adjusted to take account of any difficulties or costs that an experienced SUBCONTRACTOR performing such fabrication, installation and commissioning of the WORK should have foreseen. 6.8 Sufficiency of SUBCONTRACT PRICE The SUBCONTRACTOR shall be deemed to have satisfied himself as to the correctness and sufficiency of the SUBCONTRACT PRICE and rates stated in

19 PAGE 13 OF 45 Section 2 Schedule of Compensation; and that such SUBCONTRACT PRICE and rates covers all the SUBCONTRACTOR 's obligations under the SUBCONTRACT and all things necessary for the proper procurement, construction, commissioning and overall execution of the WORK including the remedying of any defects. 6.9 MMHE's Supplied Constructional Plant and Free-Issue Material (d) (e) (f) (g) (h) (i) MMHE shall make the Constructional Plant as indicated in Scope of Work available for the use of the SUBCONTRACTOR in the execution of the WORK in accordance with the details and arrangements stated in Scope of Work. SUBCONTRACTOR shall be solely responsible for care, custody and control of Constructional Plant supplied by MMHE to SUBCONTRACTOR upon receipt by SUBCONTRACTOR of such Constructional Plant. SUBCONTRACTOR shall be liable for any costs and expense for repairing or replacing lost or damaged Constructional Plant due to SUBCONTRACTOR's negligence or wilful act. MMHE s Site Representative shall be notified immediately when Constructional Plant is damaged or lost. SUBCONTRACTOR shall notify MMHE s Site Representative of any shortages or deficiencies of Constructional Plant received by SUBCONTRACTOR immediately after receipt of the same. The Constructional Plant shall be received and signed for by SUBCONTRACTOR when they are handed over to SUBCONTRACTOR. SUBCONTRACTOR shall maintain adequate records in a form approved by MMHE to show the use of all Constructional Plant s received by SUBCONTRACTOR. MMHE shall supply, free of charge, the materials ( Materials ) in accordance with the details stated in the Scope of Work. MMHE shall, at his cost, provide these Materials at the time and place specified in the SUBCONTRACT. The SUBCONTRACTOR shall then visually inspect them, and after this visual inspection, the Materials shall come under the care, custody and control of the SUBCONTRACTOR. SUBCONTRACTOR shall within three (3) working days of receipt or visual inspection give notice to MMHE s Site Representative of any shortage, defect or default in these Materials. Unless otherwise agreed by both parties, MMHE shall immediately rectify the notified shortage, defect or default. MMHE s obligations of inspection, care, custody and control shall not relieve SUBCONTRACTOR of liability for any shortage, defect or default not apparent from a visual inspection. The SUBCONTRACTOR shall maintain, in a form agreed by MMHE, adequate records for Materials and Construction Plant provided by MMHE and shall provide a monthly inventory to MMHE showing: (i) (ii) the use of all Materials and Construction Plant received, and the balance of Materials and Construction Plant unused at all times. The SUBCONTRACTOR shall notify MMHE of all unused or surplus Materials provided by MMHE. MMHE shall instruct the SUBCONTRACTOR to return such Materials to MMHE nominated storage area. The SUBCONTRACTOR shall be responsible for ensuring that all Materials which MMHE has instructed the SUBCONTRACTOR to return to the

20 PAGE 14 OF 45 nominated storage area of MMHE are returned in good condition with full supporting documentation SUBCONTRACTOR's Supplied Constructional Plant, Temporary Works and Services All Constructional Plant, materials, Temporary Works, services, personnel, transport and other things necessary for carrying out the WORK to completion shall be furnished by SUBCONTRACTOR at SUBCONTRACTOR's cost and expense. When brought on to the Site, Constructional Plant shall be deemed to be exclusively intended for the execution of the WORK. The SUBCONTRACTOR shall not remove from the Site any major items of Constructional Plant without the consent of MMHE s Site Representative. SUBCONTRACTOR shall be responsible for the timely order and delivery and calling off of all Constructional Plant, materials, Temporary Works, services, personnel, transport and other things to be supplied by him to ensure that the performance of the WORK continues unimpeded Quality Assurance In the performance of the WORK, the SUBCONTRACTOR, its employees, representatives, agents shall meet MME and the Client requirements for Quality Assurance, In-line Quality Control Programme and other documented systems during entire performance of the WORK. SUBCONTRACTOR shall comply with MMHE s Quality Management System and SUBCONTRACTOR, its employees, representatives, and/or agents shall avail themselves for quality audit that may be conducted from time to time to verify whether the quality activities and related results performed by SUBCONTRACTOR comply with planned arrangements and to determine the effectiveness of the Quality Management System. 7. PERFORMANCE BOND 7.1 Submission of Performance Bond SUBCONTRACTOR shall within one (1) month from the Effective Date and prior to commencing any work on Site, provide a Performance Bond in the form of a Bank Guarantee payable on demand in favour of MMHE in an amount as specified in Appendix 1:[Summary of SUBCONTRACT] from a bank operating in Malaysia acceptable to MMHE to guarantee the performance of SUBCONTRACTOR's obligation under this SUBCONTRACT. A blank copy of the approved form is included as Appendix 2:[Performance Bond Form] herein. If requested by MMHE, SUBCONTRACTOR shall revise the Bank Guarantee amount to correspond to any increase in the SUBCONTRACT PRICE. All expenses in issuing and maintaining the Performance Bond shall be borne by the SUBCONTRACTOR. 7.2 Validity of Performance Bond The Performance Bond scheduled shall be valid up to thirty (30) days after the Completion Date. SUBCONTRACTOR shall extend the Performance Bond as necessary to ensure that such bond is valid and effective until the issuance of the Certificate of Completion.

21 PAGE 15 OF 45 Should the Certificate of Completion not be issued by the date thirty (30) days prior to the expiry date of the Performance Bond, SUBCONTRACTOR shall extend or renew the bond in a form similar to and in the same amount as that previously provided, the expiry date of which shall be thirty (30) days after the planned date for completion at that time, as approved by MMHE. The extension of the Performance Bond or the renewed Performance Bond shall be extended to MMHE not later than fifteen (15) days prior to the expiry of the first Performance Bond. SUBCONTRACTOR shall bear all expenses related to bearing, completing, executing and stamping and extension/renewal of such Bank Guarantee. 7.3 Default in Providing Performance Bond MMHE shall not be obliged to make any payments to SUBCONTRACTOR under the SUBCONTRACT before it receives the Performance Bond and has satisfied itself that the Performance Bond is in accordance with the requirements of the SUBCONTRACT. Failure to provide the Performance Bond within the stipulated duration, or such extended duration as may be allowed at the sole discretion of MMHE, shall be default of the SUBCONTRACTOR pursuant to Clause 18:[Default of the SUBCONTRACTOR] entitling MMHE to terminate the SUBCONTRACT pursuant to Clause 19:[Discontinuance and Termination]. Should SUBCONTRACTOR fail to extend or renew the Performance Bond pursuant to Sub-Clause 7.2, MMHE may: (i) (ii) (iii) make a demand on the Performance Bond for part or all of the amount of the bond; or withhold payments due to the SUBCONTRACTOR up to the amount of the bond; or treat the failure as default of the SUBCONTRACTOR pursuant to Clause 18:[Default of the SUBCONTRACTOR] entitling MMHE to terminate the SUBCONTRACT pursuant to Clause 19:[Discontinuance and Termination]. 7.4 Release of the Performance Bond by MMHE The Performance Bond (or any balance of the same remaining to the credit of the SUBCONTRACTOR) shall be released or refunded to the SUBCONTRACTOR on the completion of the whole of the WORK by the issuance of the Certificate of Completion by MMHE and settlement of all claims from SUBCONTRACTOR. 7.5 Unfulfilled Obligations The above said Bank Guarantee shall be forfeited by and in favour of MMHE in the event SUBCONTRACTOR defaults, neglects, refuses or fails to perform the WORK all in accordance with the terms and conditions of this SUBCONTRACT, and/or SUBCONTRACTOR defaults, neglects, refuses or fails to extend the validity period of the Bank Guarantee as instructed by MMHE. MMHE shall also have the right to call on the said Bank Guarantee if the SUBCONTRACTOR fails to comply with the HSE requirements stipulated in the SUBCONTRACT such that an incident of the non-compliance results in fatality.

22 PAGE 16 OF HEALTH, SAFETY AND ENVIRONMENT (HSE) 8.1 Compliance with HSE Requirements The SUBCONTRACTOR shall, at his own cost and expenses, 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 SUBCONTRACTOR shall also comply at all times with the requirements as set forth by MMHE in its Health, Safety and Environment Management System ( HSEMS ), policies, operating standards, Site HSE requirements, MMHE 10 Safety Rules, and any special instructions and all requirements stipulated in this SUBCONTRACT. 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 SUBCONTRACTOR shall take all necessary HSE control and recovery measures related to or arising out of the performance of the SUBCONTRACT in order to protect the WORK, the personnel and property of MMHE, SUBCONTRACTOR, all third parties and public from the hazards and risks associated with the planning and execution of WORK. Notwithstanding the above, the SUBCONTRACTOR shall perform all obligations related to the HSE requirements listed within Section 4 - Health, Safety and Environment. SUBCONTRACTOR must comply and shall ensure compliance by his personnel, workmen, agents, employees, representatives and his subsubcontractors at all time during the execution of the WORK with all of the following: (i) Factories and Machinery Act, 1967; (ii) Occupational Safety and Health Act, 1994; (iii) Environment Quality Act, 1974; (iv) (v) 8.2 HSE Measures Client s HSE requirements; and All other relevant safety at work requirements imposed by law including and subsequent amendments to or re-enactment of the said law; Within seven (7) days before commencing work on the Site, SUBCONTRACTOR shall obtain from MMHE all HSE requirements of MMHE and Client for the purposes of executing the WORK. SUBCONTRACTOR shall ensure that his agents, employees and representatives are notified of and observe and abide by said regulation and procedures. SUBCONTRACTOR shall ensure that all Constructional Plant, Temporary Works and other items used for the WORK, whether purchased, rented or otherwise provided by SUBCONTRACTOR are in a safe and sound condition and capable of performing the functions for which they are intended. If any Constructional Plant, Temporary Works or other item is in the judgment of MMHE, unsafe or incapable of doing the work for which it is intended, SUBCONTRACTOR shall repair or replace the same with safe and capable Constructional Plant, Temporary Works or items at SUBCONTRACTOR's cost and expense.

23 PAGE 17 OF 45 (d) (e) 8.3 HSE Recognition Without limiting SUBCONTRACTOR liability under the SUBCONTRACT, SUBCONTRACTOR shall provide at his own expense all workmen on Site with the necessary personal protective equipment including but not limited to safety boots, safety glass, safety helmets and protective clothing. SUBCONTRACTOR shall at all times throughout the performance of the SUBCONTRACT ensure proper and diligent housekeeping. SUBCONTRACTOR shall be responsible for the safety and safe working practices of its agents, employees, representatives and all Constructional Plant and Temporary Works, and shall be responsible for the training of its agents, employees and representatives on safety and safe working practices. SUBCONTRACTOR shall ensure that all personnel to be provided in the performance of the WORK are adequately trained in safety practices before they are involved in the WORK. SUBCONTRACTOR shall be responsible to maintain the Site in a safe and efficient manner and shall arrange for regular meetings and emergency drills to enhance HSE awareness. SUBCONTRACTOR shall report any incidents whether involving first aid or lost time to MMHE s Site Representative immediately following the incident. SUBCONTRACTOR shall work closely with MMHE to develop the most appropriate HSE recognition programme for this SUBCONTRACT. Such HSE recognition programme shall provide a structured means to periodically reward and recognise those personnel who have contribute in making the Site a safe work place. HSE incentives will be based on merits, active participation, and the achievement of HSE performance targets. 8.4 Safety Official and Personnel SUBCONTRACTOR shall appoint a suitably qualified and experienced person as safety official who shall be responsible for compliance with safety requirements and all safety matters relating to the WORK. SUBCONTRACTOR shall, from time to time, provide such other personnel and resources as may be required to ensure the effective implementation of the safety programme on Site. 8.5 Environmental Matters SUBCONTRACTOR shall comply with all relevant laws and regulations relating to the protection and preservation of the environment, in particular the Environmental Quality Act including any subsequent amendments to or reenactments of the said Act. All measures taken by the SUBCONTRACTOR in compliance with this clause shall be deemed to be included in the SUBCONTRACT PRICE. 8.6 Default of SUBCONTRACTOR The failure of SUBCONTRACTOR to comply with the MMHE s applicable Health, Safety and Environment (HSE) requirements shall be deemed as a default by SUBCONTRACTOR and shall constitute a breach of the SUBCONTRACT. 8.7 Right to Stop Work on HSE Ground MMHE shall have the right to prohibit commencement of the WORK or to stop any WORK in progress on HSE ground if (without limitation), Constructional Plant, SUBCONTRACTOR s personnel (whether procured by SUBCONTRACTOR from third parties or supplied by SUBCONTRACTOR) or work conditions are considered to be unsafe or not in compliance with MMHE s