Volume 2 (Contract) Appendix C - Insurance Requirements and Certifications

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1 Volume 2 (Contract) Appendix C - Insurance Requirements and Certifications 1. The Contractor will procure and maintain in full force and effect the following Insurance Policies in accordance with the instructions set forth hereunder: 1.1. Contractor's/Erections All Risks insurance to cover all physical loss and/ or damage to the Works from any cause to any and all Works being undertaken as part of the Project and to the full reinstatement value of the Project, including Works carried out by civil works contractors and/or sub-contractors. This Policy shall be in effect upon the earlier of (a) issuance of Milestone no. 1 - Completion Certificate; or (b) Delivery of the Site to the Contractor; or (c) Any use of the Site including but not limited to placing of equipment and until issuance of Milestone no. 6 - Completion Certificate. This Policy shall cover the execution of the Works, inter alia, all safety and tests of the ES' systems, including commissioning cold and hot testing. Sum Insured the total final estimation for the cost of the Project (including the Transformer supplied by Mekorot and/or other materials supplied by Mekorot. Deductibles not exceeding $20, 000 (twenty thousand US Dollars) for any one occurrence other than earthquake. Earthquake ten per cent (10%) of the cost of Works to date of damage, not exceeding $ 1,250,000 (one million two hundred and fifty thousand US Dollars) for any one earthquake event (including all damages occurring within seventy two (72) hours from the time of the first damage event). Extensions: this All Risks Policy shall have the following Extensions: a. Surrounding and existing Property up to $ 2,500,000. b. Removal of Debris: up to $ 1,000,000 c. Cover for direct and indirect damage caused by faulty materials, faulty workmanship and faulty design. d. Cover for vibration and weakening of support. HEAD OFFICE: 9 LINCOLN ST. TEL-AVIV P.O.B ISRAEL ,FAX: יחידת מכרזים משרד ראשי רחוב לינקולן 9 תל-אביב ת.ד מיקוד 61201

2 -2- e. Earthquake and Natural Hazards coverage. f. Theft and Burglary. g. Extended Maintenance coverage for 24 months. h. Coverage for Overtime, Night Work, Work in Holidays, Express Freight and Airfreight expenses. i. Coverage for Property in Transit and Property stored outside the Site up to $1,000,000. Without derogating from the generality of the above, Insurance Policy specified under this section shall cover the following property: Cranes and other lifting and hoisting equipment; Various other tools, auxiliary equipment, and incidental structures Motor Vehicle Insurance - Compulsory insurance as required by law for physical injury due to use of vehicles by the Contractor and/or anybody on his behalf, at all stages of the Work up to the issuance of the Project Completion Certificate. Without derogating from the above, Comprehensive Motor Vehicles Liability Insurance with minimum limits of liability of not less than US$ 500,000 for Bodily Injury/Property Damage for each occurrence (combined single limit) Third Party Liability Insurance: in respect of the Works according to the Contract. This Policy shall cover legal liability according to the Contract and any Laws and Regulations in respect to bodily injury and/or property damage caused by and/or in connection with and/or during the Works to any third party (third party to include Mekorot), due to any cause whatsoever in regard to the Works. This Policy shall be in effect upon the earlier of (a) issuance of Milestone no. 1 - Completion Certificate; or (b) Delivery of the Site to the Contractor; or (c) Any use of the Site including but not limited to placing of equipment and until issuance of Milestone no. 6 - Completion Certificate. Bodily injury to include mental anguish, distress and the like.

3 -3- Minimum Limits of Liability 10 million US Dollars ($10,000,000) for any one occurrence and in the aggregate for the period of the Works The above sum is subject to one full automatic reinstatement of minimum limits of liability. Where the minimum limits of liability diminish and/or are likely to be exhausted, the Contractor will purchase additional insurance cover necessary to bring the minimum limits of liability to the required level. Otherwise, Mekorot is authorized to purchase the additional insurance at the Contractor s expense. This Third Party Liability Insurance to include the following: Pollution liability (on at least a sudden and accidental basis) Deductible: not exceeding twenty thousands US Dollars ($20,000) for any one occurrence Employer s Liability Insurance to cover Legal liability of Contractor and Mekorot in accordance with the Contract and any Laws and Regulations, in respect of Bodily Injury and / or illness to any Contractor's Employees and/or any Sub Contractor's or Sub-Contractor's Employees during and in connection with the Works. This Policy shall be in effect upon the earlier of (a) issuance of Milestone no. 1 - Completion Certificate; or (b) Delivery of the Site to the Contractor; or (c) Any use of the Site including but not limited to placing of equipment and until issuance of Milestone no. 6 - Completion Certificate. Bodily injury to include mental anguish, distress and the like. Minimum Limits of Liability Ten million US Dollars ($ 5,000,000) for any one occurrence and Ten million US Dollars ($ 5,000,000) in the aggregate for the period of the Works. Where the minimum limits of liability diminish and/or are likely to be exhausted, the Contractor will purchase additional insurance cover necessary to bring the minimum limits of liability to the required level. Otherwise, Mekorot is authorized to purchase the additional insurance at the Contractor s expense.

4 -4- Deductibles not exceeding seven thousand five hundred US Dollars ($7,500) for any one occurrence. Workers Compensation: cover to be according to the applicable Laws and Regulations (Institute for National Insurance) 1.5. Professional Liability Insurance to cover legal liability of the Contractor and his designers and/or consultants and/or architects and/or engineers and/or construction managers and/or the Contractor and Sub-contractors and their employees, including experts of Contractor and Contractor's sub-contractors that are involved in the Project all Contractor's Personnel- in respect of any damage caused by faulty designs and/or faulty workmanship and/or errors and/or omissions or any other professional negligence in connection with the Project. This Insurance Policy shall be on a single project basis (SPPI), for any act and/or omission which causes a breach of professional duty on the part of the above. This Policy shall be in effect as of the time required in Section 7.2 (Conditions Precedent for Contract Signature) to Volume 1 (Request for Proposals) and until seven (7) years after the Project Completion Certificate issuance (PLI cover is on a claims made basis, so it should be valid also after the Project completion) Minimum Limits of Liability five million US Dollars ($5,000,000) for any one occurrence, and five million US Dollars ($5,000,000) in the aggregate for the period of the Policy. Where the minimum limits of liability diminish and/or are likely to be exhausted, the Contractor will purchase additional insurance cover necessary to bring the minimum limits of liability to the required level. Otherwise, Mekorot is authorized to purchase the additional insurance at the Contractor s expense. Deductibles: not exceeding twenty thousand USD ($ 20,000) for any one occurrence Marine/Aviation/Land Cargo Insurance to cover all kind of shipments and/or transports which shall be made by the Contractor and to include transformers and other any of the ES' components, either from overseas to the site in Israel or

5 -5- within Israel to the Site, in connection with the execution of the Project, from any loss and/or damage. This insurance shall be from warehouse to warehouse based on wide coverage, as per INSTITUTE CARGO CLAUSES (A) including Institute replacement clause cl.161, BASIS OF VALUATION: c.i.f + 15%. and to include shipments on deck and transshipment Product Liability Insurance to cover Legal Liability of Contractor and Mekorot according to the Contract and any Laws and Regulations, in respect of any bodily injury and or property damage to any person including Mekorot, caused by the completed Project & ES and or any part thereof, due to any defect in the completed Project. The insurance shall be in force for a period not less than five (5) years as of issuance of Milestone no. 6 - Completion Certificate, non cancelable during this period, with extended reporting period of two (2) years after termination of period of insurance. Minimum Limits of Liability ten million USD($ 5,000,000) for any one occurrence and ten million USD ($ 5,000,000) in the aggregate for the period of the this Policy. Where the minimum limits of liability diminish and/or are likely to be exhausted, the Contractor shall purchase additional insurance cover necessary to bring the limits of liability to the required level. Otherwise, Mekorot are authorized to purchase the additional insurance at the Contractor's expense. Deductibles: not exceeding twenty thousand USD ($ 20,000) for any one occurrence. 2. Insured Parties to all the above Policies: 2.1 The Contractor, the Contractor s Personnel and/or employees, Contractor's Subcontractors and sub-contractors sub- contractors.

6 Mekorot, Mekorot's subsidiaries, Mekorot's employees. 2.3 I..E.C as their interest may appear. 3. The Primary Beneficiaries under the Policies: 3.1 In the Liability Insurance Policies all the insured parties, and the legal owners and/or lawful possessors of the Site Micky?. 3.2 In the Property Policies - Mekorot. 4. Insurers: The Contractor is required to maintain the aforementioned Insurance Policies with insurers who comply with all the following financial status requirements: 4.1 Israeli and / or Israeli fronting company for foreign underwriters and / or foreign underwriters; 4.2 licensed by The Israeli Commissioner of Capital Markets, Insurance and Savings; 4.3 enjoying adequate financial strength and experience, and in particular enjoying capital funds and surplus of not less than 1,000,000k (1 billion) NIS. 5. Certificate of Insurance and Presentation of Policies: The Insurance Issuers shall submit Mekorot with the following confirmations upon the date set forth for each, as follows: 5.1 A Certificate of Insurance in respect of Insurance Policy/Policies under sections 1.1, 1.3, 1.4 and 1.5 hereof by the time the Policies are to be issued (as provided in the aforesaid sections 1.1, 1.3, 1.4 and 1.5). 5.2 A Certificate of Insurance in respect of the Insurance Policy under section 1.7- upon submission of the Warranty Guarantee referred to in Section 12.1 to Volume 2 (Contract). 5.3 All Certificate(s) will include all relevant information in respect of the aforementioned requirements. 5.4 Together with the Certificate, the insurers shall submit to Mekorot the necessary proof that that their signature appearing on the certificates is commensurate with the required financial status.

7 By no later than fourteen (14) Days after receipt of Mekorot's request, the Contractor shall submit all Insurance Policies mentioned in the request and make the necessary changes and amendments in those Policies wording and/or provisions as requested by Mekorot as stipulated in this Appendix C. 5.6 The Contractor shall be responsible to ensure the Certificates and/or Policies and/or any other information item relating to this Appendix C is timely submitted to Mekorot. 6. The above mentioned Insurance Policies shall also include provisions regarding, as applicable:- 6.1 Cross Liability Clause in the liability policies. 6.2 Waiver of Subrogation in favor of the Insured Parties, Subsidiaries and or shareholders of the above mentioned entities, directors and officers and other employees of the above mention entities. 6.3 Non contribution and non participation on the part of Insured Parties Insurers if Insured Parties holds applicable Insurance Policies. 6.4 Claims in respect of damage to the Works shall be paid to Mekorot or to order (in writing only) of Mekorot. 6.5 Premiums and Deductibles shall be paid by Contractor only. 6.6 No change in the Policies' conditions should be made without prior approval in writing by Mekorot. 7. All required Insurance Policies shall include Contractor's following undertakings: 7.1 Contractor s Insurance Policies shall include an Express Condition according to which the Policies shall not be canceled, nor expire nor their cover reduced during the Period of Insurance.

8 In any case of any discrepancy between the written signed Certificate of Insurance and/or the Insurance Policies and the Contract provisions, the Contractor undertakes to effect any change into his Insurance Policies and/or the written signed Certificate so it shall comply with the provisions of Contract as per Mekorot's demand. It is hereby expressly agreed that the issuance of the said Insurance Policies and/or Certifications testifying of such issuance and/or the inspection thereof and/or the absence of inspection thereof and/or amendments does not constitute an affirmation of its compliance with the agreed upon, and shall not impose any responsibility whatsoever on Mekorot or anybody on its behalf, and shall not derogate the Contractor s liability under the Contract and/or under any Laws and Regulations. For the avoidance of doubt it is hereby clarified that non-presentation of Certificate of Insurance by the dates required above, does not exempt Contractor from any liability whatsoever under the Contract. Without derogating from the generality of the aforesaid, it is expressly agreed that Mekorot shall be entitled to set-off any payment to Contractor, at its sole discretion, should the Certificate of Insurance not be presented by the dates, as aforementioned. 7.3 The Contractor undertakes to fulfill all the conditions of Contractor s Insurance, to duly pay all insurance premiums on time and refrain from causing anything that may negatively affect the validity of the Insurance. 8. For the removal of doubt, nothing of the aforementioned in this Appendix C shall derogate from the responsibility of the Contractor with respect to indemnification as set forth in Section 3.12 (The Contractor's Declarations, Warranties and Undertakings) and/or the rights of set-off of the Company as set forth in Section 13 (Set-off Right) to Volume 2 (Contract).

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