Terms and Conditions of Subcontract Works

EXECUTION OF SUBCONTRACT WORKS

The subcontract works shall be executed in accordance with the main contract tender documents, specifications, conditions of contract, letter of acceptance and/or bills of quantities and construction drawings and any authorised variations in writing to the subcontractor works. The above-mentioned documents are as enclosed.

The scope of the Subcontract works shall be works as described below:

WATER SUPPLY SYSTEM TO SUNPOWER PLANT AT REMBIA, ALOR GAJAH, MELAKA.

DESIGN AND BUILD OF WATER SUPPLY SYSTEM TO SUN POWER PLANT AT REMBIA, ALOR GAJAH, MELAKA. PACKAGE NO : PAAB/M2/SPP/01/09

– PIPE LAYING WORKS (900MMØ GRAVITY MAIN)

This contract shall be a sub-contract to our main contract for the pipe laying works (900mmØ gravity main) and associated ancillary works including what ever indicated or implied in consultant’s drawings, specification or Bills of Quantities, including variations, omissions or additions which it may be notified from time to time to their reasonable satisfaction thereof. Approvals from the consultants and relevant Authorities have first to be obtained by your good office for those materials that were proposed by you, which differs from the original main contractor’s contract. If the proposed materials are rejected, you shall conform to the materials in the main contractor’s contract at no additional cost. If the main contractor’s contract rate is reduced due to your proposed materials, the main contractor shall reduce your rate accordingly.

You shall observe, perform and comply with all provisions of our main contract so far as they relate and apply to your sub-contract works, of which it is deemed to have notices of all the provisions therein as it hereby expressly acknowledges.

You shall prepare daily record, pipe log record, photograph, testing record for your works to the approval of the consultant engineers, if your work shall be acceptable to authorities and the consultant engineer. Any non-compliance which lead to rejection by either of the above mentioned parties shall be rectified at your own cost.

The sub-contractor shall be solely responsible for running implementation and management of the said sub-contract works and shall be responsible solely for any employees employed by the sub-contractor.

The subcontractor shall execute and complete the subcontract works to the reasonable satisfaction of Ang Yoke Lian Construction Sdn Bhd (main contractor) and the consultant Engineers for the times being under the main contract and in all respect in conforming with provisions of the main contract and all authorised directions, requirements and variations imposed on the main contractor there under.

The subcontractor shall provide all labour, construction plant and material whether of permanent or temporary nature required for the execution and completion of the subcontract works.

The sub-contractor shall indemnify and save harmless the main contractor against and from:-

any breach, non-observance or non-performance by the sub-contractor, its servants or agents of the said provisional of the main contract or any of them and

any act or omission of the sub-contractor, its servant or agents which involve the contractor in any liability to the employer under the main contract; and

any claim, damage, loss or expenses due to or resulting from any negligence or breach or duty on the part or the sub-contractor, its servants or agents; and

any loss or damage resulting from any claim under any statute in force for the time being by an employee of the sub-contactor in respect of personal injury arising out of or in the course of its employment.

1.10 If the sub-contractor shall make default in anyway of the following respect, namely:-

without reasonable cause wholly suspends the works before completion;

fails to proceed with the works with reasonable diligence;

without reasonable cause the progress of works fall exceeding 20% behind schedule;

work quality not to the specified standard;

Then, if any such default shall continue for seven days after a notice is sent by registered post to the sub-contractor from the main contractor specifying the same, the main contractor without prejudice to any other rights herein contained, there upon by notice sent by register post determine this contract.

If such default leads to the termination of the sub-contract, any additional cost as a result from recalling quotation, the sub-contractor shall bear all the costs.

1.11 All foreign labourers shall have approved work permit or I.C by the relevant authorities.

THE SUBCONTRACT SUM

The total subcontract works sum are provisional and the amount shall be RM563,602.00 (Ringgit Malaysia : Five Hundred Sixty Three Thousand Six Hundred And Two Only), which is worked out as follows and shown in Appendix B (page 1 of 2 to 2 of 2 ) and the terms and conditions shown in Appendix “C” (page 1 of 1).

The subcontractor sum is based on the Bill of Quantities as stated in the contract document in the main contract.

Your construction shall comply in all respects with the latest SAM/Authorities guidelines/requirements and any relevant Statutory Regulations, By-Laws that do not exist, the British Standard/Malaysia Standard codes of practice and standards shall be adhered to and shall be subjected to the approval of the Local Authorities.

All payment shall be subjected to a retention of 10% of the amount certified.

Retention of 7.5% shall be released to Sub Contractor upon the pressure, leakage, sterilizing and flushing of the laid pipeline tested and approved. The balance of retention sum 2.5% shall be released to Sub Contractor upon issuance of Certificate of Practical Completion.

The defects liability period shall be Eighteen (24) months from the date of acceptance and handing-over to the local authorities.

2.8 The sub-contractor hereto agreed that in the event that the employer revises the contract price due to omission/addition to the contract items of the said project, the subcontractor hereto should abide by such variation of contract price.

2.9 Within 14days upon completion, Sub Contractor shall submit to us 1 bound hard copy pipe laying record, air test record with photography for Main Contractor approval and record.

2.10 The Contractor’s All Risks and Workmen Insurance shall be purchased by the main contractor but the subcontractor will have to purchase their own machinery insurance. If any claim by the subcontractor on our insurance the subcontractor has to be responsible for the excess payable and it is advisable for the subcontractor to purchase an insurance against the main contractor’s insurance excess.

2.11 Any Variation Order claims will not be entertained by the Main Contractor unless the Main Contractor received the same Variation Order claim from the employer.

2.12 The payment shall be within 14 days after the claim have been joint measured with our representative. As agreed during the discussion, payment shall only be paid for items that have been repaired and in working condition.

COMMENCEMENT AND COMPLETION

The date of commencement and completion date as per master work programme.

LIQUIDATED AND ASCERTAINED DAMAGES

Liquidated and Ascertained Damages shall be according to the Main Contractor’s conditions of contract and L.A. Liquidated and Ascertained Damages will be imposed on the subcontractor only if the main contractor is being imposed the same reasons of delay in completion of the subcontractor’s work.

INSTRUCTIONS AND DECISIONS

The subcontractor shall liase with our site personal Mr. Tan Chong Yee (013-333 2809) for any site problem or decision-making. Any variation order to the sub-contract shall be issued by the main contractor.

This letter is sent to you in duplicate. If you are agreeable to the award, please return us one set, duly signed and witness and retain a copy. (Please initial every page)

Thank You.

Yours faithfully,

Ang Chin Hann

The undersigned hereby acknowledge receipt of the above letter ref. Our Ref: PAAB/AYL/AJC/LA/111010/03 and confirm acceptance of the terms and conditions in this letter. A copy has also been retained.

SIGNATURE )

Name in Full )

For and On Behalf Of )

Ambang Jitu Construction )

Company Chop )

I/C No )

In The Capacity )

Date )

In The Present Of

SIGNATURE )

Name in Full )

I/C No. )

Address )

Date )

Appendix C (Page 1 of 1)

Additional Terms and Conditions to complied for above Latter of Award ref : PAAB/AYL/AJC/LA/111010/03

The rate shall include the following:-

1. All Spigot & socket joints included welding, denso tape, internal cement lining and air test.

2. All collar joints included welding, denso tape, internal cement lining and air test.

3. Tested and qualify welding complete with approved welder certificate.

4. All testing shall include all the necessary equipment, tools and water for testing supply by main contractor

5. Submission of organisation chart, worker list, work programme, CIDB green card, 2pcs photo, duplicate copy of worker permit.

6. Shall complied with workers accommodation, transportation, store and insurance to cover own manpower, machinery and excess.

7. Provide full time supervisor

8. Date of commencement is 11th October 2010

9. Completion period is 3months

10. Shall complied with PPE