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    Section 2.0   general t&cs highlight Section 2.0 general t&cs highlight Document Transcript

    • Vietsovpetro Draft contract SECTION 2.0 GENERAL TERMS AND CONDITIONS Page 1 of 90
    • Vietsovpetro Draft contract TABLE OF CONTENTS TABLE OF CONTENTS ....................................................................................................................... 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 2.32 2.33 Subcontract Term .......................................................................................................................... 4 SUBCONTRACTOR Responsibilities.......................................................................................... 4 VIETSOVPETRO Responsibilities ............................................................................................. 16 Offshore Operations .................................................................................................................... 17 Title ............................................................................................................................................. 20 Guaranteed Completion Date ...................................................................................................... 22 Subcontract Schedule Compliance .............................................................................................. 23 Suspension................................................................................................................................... 24 Damages for Delay ...................................................................................................................... 26 Force Majeure ............................................................................................................................. 27 Inspection .................................................................................................................................... 32 Loadout, Sailaway, Handover, Provisional Acceptance and Final Acceptance .......................... 35 Warranty, Correction of Defects and Nonconforming Work ...................................................... 40 Liens and Claims ......................................................................................................................... 46 Liabilities and Indemnities .......................................................................................................... 47 Technology, Rights Thereto and Confidentiality Thereof........................................................... 55 Insurance ..................................................................................................................................... 59 Default and Termination ............................................................................................................. 62 Dispute Resolution ...................................................................................................................... 69 Safety, Health and Environment ................................................................................................. 72 Taxes and Import Duties ............................................................................................................. 74 Assignment and Subcontracting .................................................................................................. 78 Audit ............................................................................................................................................ 78 Security........................................................................................................................................ 79 Firearms, Alcohol, Controlled Substances and Behaviour .......................................................... 81 Changes ....................................................................................................................................... 81 VIETSOVPETRO Supplied Data ............................................................................................... 83 Representations and Warranties................................................................................................... 85 Governing Law ............................................................................................................................ 87 Subcontract Price......................................................................................................................... 88 Notices/ Representatives of the Parties ....................................................................................... 88 Business Ethics ............................................................................................................................ 89 Limitation of SUBCONTRACTOR‟s Liability........................................................................... 89 Page 2 of 90
    • Vietsovpetro Draft contract Attachments 2-1 2-2A 2-2B 2-2C 2-3 2-4 2-5 2-6 2-7 2-8 2-9 2-10 2-11 2-12 2-13 2-14 Subcontract-Specific Details Approved Subcontractors and Suppliers Significant Subcontractors Not Yet Approved by VIETSOVPETRO SUBCONTRACTOR‟s Sourcing Plan Loadout, Sailaway, Handover, Provisional Acceptance and Final Acceptance NORL Sailaway Certificate Handover Certificate Provisional Acceptance Certificate Final Acceptance Certificate Performance Bond Form of Parent Company/ Corporate Indemnity Agreement Code of Ethics and Conduct Consents and Permits Health and Safety Guidelines Environmental Guidelines Page 3 of 90
    • Vietsovpetro Draft contract 2.1 Subcontract Term 2.1.1 (a) This Subcontract shall commence as of the Effective Date and shall continue in effect until whichever of the following is applicable (such period being referred to as the “Subcontract Term”): (i) (ii) such earlier date as may be agreed to in writing by the Parties; or (iii) (b) VIETSOVPETRO has issued the Final Acceptance Certificate and the warranties and guarantees contained in Section 2.13 have expired and all payments required hereby have been made; or termination as provided for herein. Notwithstanding the foregoing, the provisions contained herein which stipulate liability or which specify another continuing obligation, in each case in relation to matters occurring or arising during the Subcontract Term, shall survive the Subcontract Term according to the time periods stipulated in such provisions. If no such periods are so stipulated then relevant statutes of repose and statutes of prescription or limitation regarding prescription or limitation of Subcontract claims or causes of action shall apply. 2.1.2 VIETSOVPETRO may terminate this Subcontract as provided in Sections 2.10 and 2.18 and other provisions of this Subcontract. SUBCONTRACTOR may terminate this Subcontract only as provided in Section 2.10 and Section 2.18.9. 2.2 SUBCONTRACTOR Responsibilities 2.2.1 General In accordance with the terms of this Subcontract, SUBCONTRACTOR shall be the single point of responsibility to: (a) perform the Work: (i) (ii) in a good and workmanlike manner; (iii) to the standards included in this Subcontract; and (iv) (b) with diligent dispatch; in accordance with Good Engineering and Operating Practices. furnish, undertake, provide or cause to be provided, in a good and workmanlike manner, all management, services, supervision, testing, labour, personnel, materials, supplies, plant and equipment, machinery, facilities and other items whatsoever necessary to provide, in accordance with the Subcontract; and project management, associated engineering, associated procurement, relevant required construction, transportation, installation, associated testing, hook-up and precommissioning for the Contract Objects and Subcontract Objects in accordance with Applicable Codes and Standards, manufacturers‟ warranties and Good Engineering and Operating Practices, Applicable Law and all other requirements of this Subcontract; and Page 4 of 90
    • Vietsovpetro Draft contract (c) 2.2.2 complete the Work in accordance with the Subcontract Schedule so as to achieve Provisional Acceptance in accordance with the Guaranteed Completion Date set out in Section 9.1. Quality Management (a) (b) 2.2.3 SUBCONTRACTOR shall establish, operate and maintain a quality system for the entire Work conforming to recognized international standards, such as the ISO 9000 series of standards. SUBCONTRACTOR shall implement a quality control/ assurance program for the Work consistent with the requirements of Section 4.0. SUBCONTRACTOR, as part of its quality system, shall ensure that each Subcontractor and Supplier establishes and maintains a satisfactory quality control/ assurance program specific to the Work that it will perform. SUBCONTRACTOR‟s quality management responsibilities shall include planning and executing a satisfactory program of quality audits. Company and VIETSOVPETRO shall be entitled to participate in any quality audits conducted by SUBCONTRACTOR, and to carry out its own quality audits of any part of the Work. SUBCONTRACTOR shall co-operate fully with the Company representatives and VIETSOVPETRO representatives performing such audits. SUBCONTRACTOR shall ensure that any corrective actions identified by any quality audit are satisfactorily implemented without delay. Subcontractors and Suppliers (a) Attachment 2-2A lists SUBCONTRACTOR‟s nominated Subcontractors for certain parts of the Work to be subcontracted and SUBCONTRACTOR‟s nominated Suppliers for certain parts of SUBCONTRACTOR‟s Supply to be procured that are in each case deemed to be approved by VIETSOVPETRO as at the Effective Date. (b) Attachment 2-2B lists SUBCONTRACTOR‟s proposed candidates for certain parts of the Work to be subcontracted and proposed candidates for certain parts of SUBCONTRACTOR‟s Supply to be procured that in each case: (i) are not approved by VIETSOVPETRO as of the Effective Date; and (ii) are known as at the Effective Date to be candidates that if selected by SUBCONTRACTOR and if approved by VIETSOVPETRO shall become Significant Subcontractors. (c) Except for Subcontractors and Suppliers that are already deemed approved by VIETSOVPETRO and included in Attachment 2-2A, SUBCONTRACTOR shall seek and obtain VIETSOVPETRO‟s approval for any proposed Subcontractor for parts of the Work and/ or proposed Supplier for part of SUBCONTRACTOR‟s Supply. SUBCONTRACTOR shall seek and obtain such approval at least Forty (40) days prior to SUBCONTRACTOR‟s proposed implementation of such arrangements. (d) SUBCONTRACTOR may use any of its Affiliates to perform any part of the Work or supply any part of SUBCONTRACTOR‟s Supply subject to SUBCONTRACTOR seeking VIETSOVPETRO‟s consent in advance of any such proposed use, and VIETSOVPETRO, acting reasonably, having the right to withhold such consent if VIETSOVPETRO has good reason to do so. (e) Where VIETSOVPETRO‟s approval of SUBCONTRACTOR‟s proposed Subcontractors and Suppliers is required under the Subcontract, SUBCONTRACTOR shall not be entitled to any addition to the Subcontract Price or any changes to the Subcontract Schedule as a result of VIETSOVPETRO‟s non-approval of any proposed Subcontractor or Supplier. Page 5 of 90
    • Vietsovpetro Draft contract VIETSOVPETRO shall act reasonably in deciding whether to approve any proposed Subcontractor or Supplier, but VIETSOVPETRO‟s experience of poor performance of a proposed Subcontractor or Supplier shall, without need for further justification, be sufficient grounds for non-approval. (f) (g) SUBCONTRACTOR is solely responsible for the performance, or non-performance, of Subcontractors and Suppliers except as expressly stated otherwise in the Subcontract. (h) 2.2.4 SUBCONTRACTOR shall provide VIETSOVPETRO with copies of all SUBCONTRACTOR‟s subcontracts and purchase orders in relation to the Work. Such subcontracts and purchase orders shall be priced where they relate to Reimbursable Work, but may otherwise be unpriced. VIETSOVPETRO shall be entitled to invoke the provisions of Section 5.12.4 in the event of SUBCONTRACTOR‟s failure to honour its payment obligations towards Subcontractors and/ or Suppliers. Permits, Licences, Consents (a) SUBCONTRACTOR shall obtain and maintain in effect all permits, certificates, licences, consents, visas, customs clearances, security clearances, vessel clearances and inspections, and the like necessary or advisable for the performance of the Work in accordance with the terms of this Subcontract other than those consents and permits that are the responsibility of Company and/ or VIETSOVPETRO and are listed in Attachment 2-12. VIETSOVPETRO shall provide all reasonably necessary information and documents to SUBCONTRACTOR and shall assist SUBCONTRACTOR in obtaining the said consents and permits. SUBCONTRACTOR shall, in good time before they are required, produce a complete listing of all said consents and permits, and request VIETSOVPETRO to provide any reasonably necessary information, documents, or assistance in respect thereof. SUBCONTRACTOR shall be solely responsible for any delay or failure on SUBCONTRACTOR Group‟s part in obtaining at the due time or maintaining in effect any required consent or permit. (b) SUBCONTRACTOR shall provide all reasonably necessary information and documents to Company and/ or VIETSOVPETRO and shall assist Company and/ or VIETSOVPETRO in obtaining all applicable permits listed in Attachment 2-12 and any other permits that Company and/ or VIETSOVPETRO needs to obtain in relation to the Work. (c) SUBCONTRACTOR shall provide permitting support in relation to the Work. Such support shall include: (i) (ii) preparation of draft responses to enquiries from Governmental Authorities or any of their respective representatives; (iii) presentations at hearings or meetings with Governmental Authorities; and (iv) (d) attendance at meetings with VIETSOVPETRO and relevant Persons designated by VIETSOVPETRO; such other services in connection with SUBCONTRACTOR‟s operations as VIETSOVPETRO may request from time to time. If at any time SUBCONTRACTOR becomes aware of any required consent or permit, SUBCONTRACTOR shall immediately give notice thereof to VIETSOVPETRO. Page 6 of 90
    • Vietsovpetro Draft contract SUBCONTRACTOR shall promptly obtain and deliver to VIETSOVPETRO a copy of all such consents and permits it is required to obtain under this Section. 2.2.5 Importation of SUBCONTRACTOR‟s Supply, the Subcontract Objects, and SUBCONTRACTOR‟s Spread (a) SUBCONTRACTOR represents and warrants that it is fully familiar with and knowledgeable of the requirements of the Government of Vietnam regarding the associated construction of goods and services both from within and from outside the Socialist Republic of Vietnam including particularly those relating to the Government of Vietnam Ministry of Planning and Investment Circular No. 04/2012/TT-BKHDT dated 13 August 2012 and other Vietnamese applicable legal document providing the list of machinery, equipment, spare parts, special-use vehicles, raw materials, supplies and semi-finished products which can be domestically produced, as from time to time. (ii) The Parties agree that each Party shall duly fulfill all its obligations with regard to the importation of items into the Socialist Republic of Vietnam, as set out in this Section 2.2.5 and other Sections of this Subcontract, so that Company and VIETSOVPETRO and SUBCONTRACTOR shall have the full benefit of the Import Tax Exemption referred to in Section 2.21.5. (iii) SUBCONTRACTOR is responsible for the preparation of all necessary data for all SUBCONTRACTOR‟s Supply, Subcontract Objects and SUBCONTRACTOR‟s Spread to be imported into the Socialist Republic of Vietnam in accordance with Applicable Laws. For avoidance of doubt, VIETSOVPETRO is responsible for the preparation of all necessary data for all VIETSOVPETRO‟s Supply; Contract Objects and any of VIETSOVPETRO‟s marine vessels and equipment to be imported into the Socialist Republic of Vietnam in accordance with Applicable Laws. (iv) Not used. (v) Company and VIETSOVPETRO will incorporate SUBCONTRACTOR‟s data into its respective overall quota and shall submit it to the relevant Governmental Authorities, obtain their approvals, and distribute a copy of the relevant parts of the approved quota to SUBCONTRACTOR. (vi) (b) (i) SUBCONTRACTOR is responsible for providing clarification in response to all questions by the Governmental Authorities of the Socialist Republic of Vietnam, or Persons acting on behalf of such Governmental Authorities, regarding the importation of SUBCONTRACTOR‟s Supply, the Subcontract Objects, and SUBCONTRACTOR‟s Spread. Without relieving SUBCONTRACTOR of its responsibility for the timely and proper provision of all data and documentation to allow the securing by Company and/ or VIETSOVPETRO of all required approvals and provision of required clarification, VIETSOVPETRO shall, if required by SUBCONTRACTOR, give SUBCONTRACTOR reasonable assistance and support in providing such clarification. SUBCONTRACTOR is responsible for the timely preparation and submittal of pro forma invoices in appropriate form in accordance with Applicable Law, and the requirements of the Government of Vietnam, to support SUBCONTRACTOR items on the Company Importation Quota. SUBCONTRACTOR shall cross-reference the pro forma invoices to the Company Importation Quota, clearly indicating the section and subsection of each invoice item‟s location on the Company Importation Quota. SUBCONTRACTOR shall submit such pro forma invoices to VIETSOVPETRO who will submit to the Company or the Government of Vietnam. Page 7 of 90
    • Vietsovpetro Draft contract (c) SUBCONTRACTOR is responsible for timely preparation and submittal to VIETSOVPETRO who will submit to the Company or the Government of Vietnam of copies of bills of lading or air waybills, actual invoices, packing lists, confirmation of quality inspection, and any other pertinent documentation. (d) SUBCONTRACTOR is responsible for arranging all inspections required by the Government of Vietnam for importation of SUBCONTRACTOR‟s Supply, Subcontract Objects and SUBCONTRACTOR‟s Spread, and for prompt and satisfactory resolution of any matters arising from such inspections. (e) SUBCONTRACTOR is responsible for all of SUBCONTRACTOR‟s costs associated with compliance with the importation regulations of the Government of Vietnam. Such costs shall include any demurrage, storage, standby or other charges arising in consequence of SUBCONTRACTOR‟s failure to comply with such regulations or to secure approvals from the Government of Vietnam in a timely and proper manner. SUBCONTRACTOR is also responsible for such costs to the extent that any failure by Company to secure Import Tax Exemption of SUBCONTRACTOR‟s Supply and/ or the Subcontract Objects and/ or SUBCONTRACTOR‟s Spread in a timely manner is attributable to SUBCONTRACTOR, including SUBCONTRACTOR‟s failure in the provision of timely and proper data and documentation. (f) SUBCONTRACTOR is responsible to import SUBCONTRACTOR‟s Supply, Subcontract Objects and SUBCONTRACTOR‟s Spread in a timely manner to meet the Subcontract Schedule. Any errors, omissions or delays in or resulting from the importation process for which SUBCONTRACTOR is responsible in accordance with the Subcontract will not be grounds for a Change. In addition, any errors, omissions or delays in or arising from Company and/ or VIETSOVPETRO failing to secure Import Tax Exemption of SUBCONTRACTOR‟s Supply and/ or the Subcontract Objects and/ or SUBCONTRACTOR‟s Spread in a timely manner that is attributable to SUBCONTRACTOR, including SUBCONTRACTOR‟s failure in the provision of timely and proper data and documentation, shall not be grounds for a Change. (g) SUBCONTRACTOR shall prepare all documentation and do everything else necessary for the importation and re-exportation (as applicable) of any items furnished by SUBCONTRACTOR not forming part of the Subcontract Objects or SUBCONTRACTOR‟s Supply, and of all consumables and temporary materials required for the Work. SUBCONTRACTOR shall also prepare for submission to Vietnamese Customs and/ or other Government of Vietnam any reports required to account satisfactorily for the final disposition of all items imported permanently and temporarily for the Work. SUBCONTRACTOR shall do all this in a timely manner to meet the Subcontract Schedule, and in accordance with all Applicable Laws. Any errors, omissions or delays in or resulting from the importation and re-exportation process for which SUBCONTRACTOR is responsible in accordance with this Subcontract will not be grounds for a Change. (h) SUBCONTRACTOR shall prepare all documentation and carry out all activities for the importation and re-exportation (as applicable) of all SUBCONTRACTOR‟s Spread. SUBCONTRACTOR shall do so in a timely manner to meet the Subcontract Schedule and in accordance with Applicable Laws. Any errors, omissions or delays in or resulting from the importation and re-exportation process for which SUBCONTRACTOR is responsible in accordance with this Subcontract will not be grounds for a Change. (i) Without prejudice to the remainder of this Section 2.2.5, SUBCONTRACTOR is solely responsible for making all necessary arrangements for the proper and timely exportation from, importation into, and re-exportation from any country of SUBCONTRACTOR‟s Supply, Page 8 of 90
    • Vietsovpetro Draft contract VIETSOVPETRO Furnished Material (after receipt from VIETSOVPETRO), and SUBCONTRACTOR‟s Spread and the Subcontract Objects in relation to the Work. Except only as expressly provided otherwise in Section 2.21.5, SUBCONTRACTOR shall make all such arrangements at its own cost, and pay all applicable taxes, duties, tariffs, levies, surcharges, fees, and other charges. SUBCONTRACTOR shall expressly be liable for any import duties, taxes, and the like applicable to the re-export by SUBCONTRACTOR Group from Vietnam, or the retention by SUBCONTRACTOR Group, of SUBCONTRACTOR items initially imported into Vietnam in connection with the Work. 2.2.6 SUBCONTRACTOR‟s Sourcing Arrangements (a) Where SUBCONTRACTOR‟s sourcing plan for the Work (Attachment 2-2C) indicates that elements of the Work will be performed in particular locations, or that items of SUBCONTRACTOR‟s Supply will be obtained from particular countries, proposed changes in such specified locations or sources of supply will require VIETSOVPETRO‟s prior written agreement. (b) VIETSOVPETRO, acting reasonably, will not be required to agree to any such proposed change referred to in Section 2.2.6(a). VIETSOVPETRO shall be entitled to make its agreement conditional upon SUBCONTRACTOR‟s reimbursement of any extra costs reasonably incurred by VIETSOVPETRO as a result of the change. (c) SUBCONTRACTOR must request VIETSOVPETRO‟s agreement to any proposed change referred to in Section 2.2.6(a) not later than Forty (40) days prior to implementation of the change, and in any event in sufficient time to be able to comply with the sourcing plan set out in Attachment 2-2C if VIETSOVPETRO, acting reasonably, does not approve the proposed change. Each such request must clearly describe the reasons for the proposed change, and provide appropriate substantiation. (d) If SUBCONTRACTOR makes a change in its intended sourcing arrangements as described in Attachment 2-2C, and as a result Company and/or VIETSOVPETRO (i) incurs an increase (on an aggregate basis) in Vietnamese value added tax imposed on goods; and/ or (ii) incurs an increase (on an aggregate basis) in Import Taxes payable on SUBCONTRACTOR‟s Supply sourced outside the Socialist Republic of Vietnam; and/ or (iii) incurs an increase (on an aggregate basis) in Vietnamese Business Income Tax that Company reimburses VIETSOVPETRO pursuant to the Contract; and/ or (iv) incurs any costs, expenses, losses and/ or penalties, of any nature whatsoever in each case and subject only to authentication by a statement from a certified public accountant and with no need for further substantiation, under Applicable Law, then all such increased costs, expenses, and/ or penalties for which VIETSOVPETRO provides reasonable substantiation shall be to SUBCONTRACTOR‟s account. (e) VIETSOVPETRO shall be entitled, having given SUBCONTRACTOR written notice of such increased costs, expenses and/ or penalties suffered or incurred by Company and/or VIETSOVPETRO, and at its option to: Page 9 of 90
    • Vietsovpetro Draft contract (i) (ii) 2.2.7 deduct the amount thereof from payments otherwise due to SUBCONTRACTOR; or allow SUBCONTRACTOR to reimburse the amount thereof, upon VIETSOVPETRO‟s first written request. General Access and Information (a) SUBCONTRACTOR shall permit full and free access to the Work at any Site, including those of Subcontractors and Suppliers, at any reasonable time by any representative of, and any personnel nominated by, Company and/ or VIETSOVPETRO. SUBCONTRACTOR, with the prior approval of VIETSOVPETRO, shall permit representatives of Governmental Authorities and Company to enter onto and inspect the Site, with reasonable advance notice and escorted access to the Work. SUBCONTRACTOR may provide, and each such person shall accept, reasonable safety and security measures implemented by SUBCONTRACTOR. SUBCONTRACTOR shall also promptly provide information reasonably requested by VIETSOVPETRO, Company, Governmental Authorities, or any of their representatives. SUBCONTRACTOR shall include appropriate provisions in all its subcontracts and purchase orders to ensure the proper enforceability of the provisions of this Section 2.2.7(a) and Section 2.11.5(a). (b) SUBCONTRACTOR hereby grants to VIETSOVPETRO and/or its invitees permission to enter upon and be present at any SUBCONTRACTOR-owned Construction Site or Fabrication Site, as further described in Section 2.2.7(d). (c) Not used. (d) SUBCONTRACTOR‟s permission pursuant to Section 2.2.7(b) shall: (i) Not used; (ii) entitle VIETSOVPETRO, Company and any VIETSOVPETRO invitees to enter upon and be present at the respective Construction Site or Fabrication Site at any time before Final Acceptance or, in the event of VIETSOVPETRO‟s termination of the Subcontract or any part thereof pursuant to Section 2.18.1, before the equivalent of Final Acceptance has been achieved by VIETSOVPETRO and any Replacement Contractor(s), in order for VIETSOVPETRO to be able to exercise quiet enjoyment of the full and free access rights granted under Section 2.2.7(a) and its rights under Section 2.18.2; and (iii) entitle VIETSOVPETRO and any Replacement Contractor(s) to perform work on the Contract Objects and/or Subcontract Objects, SUBCONTRACTOR‟s Supply, and any VIETSOVPETRO Furnished Material at the respective Site, and to remove any of the same from such Site when VIETSOVPETRO has terminated the Subcontract or any part thereof pursuant to Section 2.18.1. Furthermore, SUBCONTRACTOR shall permit VIETSOVPETRO and any Replacement Contractor(s) to use any SUBCONTRACTOR Group-owned facilities, utilities, plant and equipment at any such Site for completion or removal of the Contract Objects and/or Subcontract Objects following termination of the Subcontract or any part thereof pursuant to Section 2.18.1, and VIETSOVPETRO shall compensate SUBCONTRACTOR for such use in accordance with Section 2.18.5. For the avoidance of doubt it is here stated that SUBCONTRACTOR‟s permission pursuant to Section 2.2.7(b) is not intended as and shall not be construed to be an agreement to pledge such property and assets as security or as agreement to permit a lien, encumbrance or any other security Page 10 of 90
    • Vietsovpetro Draft contract interest on such property and assets. All SUBCONTRACTOR Group-owned facilities, utilities, plant and equipment shall remain under the ownership and administrative management of the owner who is a member of the SUBCONTRACTOR Group and shall be controlled by such owner and operated by SUBCONTRACTOR Group Personnel. SUBCONTRACTOR shall instruct its Personnel to work cooperatively with VIETSOVPETRO or any Replacement Contractor(s) and to its/their direction and SUBCONTRACTOR‟s management shall not interfere with VIETSOVPETRO‟s or any Replacement Contractor(s) direction of VIETSOVPETRO‟s or its Replacement Contractor(s) day-to-day operations. 2.2.8 Emergencies (a) In the event of any emergency in relation to the Work endangering life or property, SUBCONTRACTOR shall take such action as may be reasonable and necessary to prevent, avoid or mitigate injury, damage or loss. SUBCONTRACTOR shall, as soon as possible and in any event within twenty (20) hours, report any such incidents, including SUBCONTRACTOR‟s response thereto, in writing to VIETSOVPETRO. (b) In the event of any such emergency, VIETSOVPETRO may, but shall be under no obligation to, take action itself to prevent, avoid or mitigate injury, damage or loss by causing the requisite Work to be performed and SUBCONTRACTOR‟s Supply to be furnished. VIETSOVPETRO shall have such right regardless of whether or not SUBCONTRACTOR has taken reasonable precautions for the safety of persons or the protection of the Work or of structures or property at or adjacent to the Site. VIETSOVPETRO may exercise such right with or without notice to SUBCONTRACTOR if the delay involved in giving SUBCONTRACTOR such notice would further endanger persons or property. The taking of such action by VIETSOVPETRO, or VIETSOVPETRO‟s failure to do so, shall not limit or reduce SUBCONTRACTOR‟s liability. (c) SUBCONTRACTOR shall promptly reimburse VIETSOVPETRO for the performance of any such Work or furnishing of any such SUBCONTRACTOR‟s Supply pursuant to Section 2.2.8(b) in an amount equal to the reasonable and documented costs incurred by VIETSOVPETRO in such performance of Work or furnishing of SUBCONTRACTOR‟s Supply: (i) if SUBCONTRACTOR has failed to take such reasonable and necessary action required of it hereunder; or (ii) to the extent that VIETSOVPETRO‟s intervention has resulted in SUBCONTRACTOR not incurring expenditures that otherwise would have been SUBCONTRACTOR‟s responsibility under this Subcontract. VIETSOVPETRO, at its sole option, may deduct the amount to be reimbursed by SUBCONTRACTOR from any payment due to SUBCONTRACTOR under this Subcontract or otherwise. (d) Without modifying in any way any provisions of Section 2.15, VIETSOVPETRO shall make its arrangements for medical evacuation of personnel from offshore Sites available to SUBCONTRACTOR on the same basis that VIETSOVPETRO makes such arrangements for its own employees. VIETSOVPETRO shall have no liability to SUBCONTRACTOR Group in connection with the provision of or failure to make such arrangements available for the medical evacuation of SUBCONTRACTOR Group Personnel. VIETSOVPETRO shall be entitled to recover from SUBCONTRACTOR the actual costs incurred by VIETSOVPETRO in respect of medical evacuation of SUBCONTRACTOR Group Personnel. Page 11 of 90
    • Vietsovpetro (e) 2.2.9 Draft contract Application of the foregoing provisions of this Section 2.2.8 is not contingent upon an agreement of the Parties as to i) the duration of a Weather Downtime occurrence; ii) the timing or appropriate extent of a response to a Tropical Storm; or iii) the risk to personnel or property of any Person arising from the presence of or operations by VIETSOVPETRO or VIETSOVPETRO‟s other contractors, Company or Company‟s other contractors at an Installation Site, and any failure of SUBCONTRACTOR and VIETSOVPETRO to have reached such agreements shall not affect this Section 2.2.8. Employment of Licensed Personnel; Labour Relations; Severance Payment Obligations (a) Whenever required by Applicable Law or Good Engineering and Operating Practices, SUBCONTRACTOR shall employ, and shall ensure that Subcontractors employ as applicable in respect of subcontracted Work, (i) personnel duly licensed by the appropriate Governmental Authority and/ or recognized professional body, so as to qualify them to perform associated engineering and design, or other professional services in the performance of the Work; (ii) personnel duly licensed and/ or certified by the appropriate Governmental Authority and/ or recognized professional body, so as to qualify them to perform associated construction planning services, construction execution services, and construction supervision services. SUBCONTRACTOR shall ensure, through the proper functioning of its internal control and quality systems, that no member of SUBCONTRACTOR Group employs in connection with its performance under this Subcontract any unfit person or any person not skilled in the work or exercise of responsibilities assigned to such person. (b) SUBCONTRACTOR shall employ labour and Subcontractors and Suppliers (whether directly or indirectly employed) so as to cause no conflict or interference with or between the various trades, or delay in performance of SUBCONTRACTOR‟s obligations. SUBCONTRACTOR shall be responsible for all personnel management and labour relations matters relating to the Work and shall at all times maintain harmony and cause Subcontractors and Suppliers to maintain harmony among all personnel employed in connection with the Work, and among all unions and other workers‟ representatives. SUBCONTRACTOR shall adopt and implement, and cause Subcontractors and Suppliers to adopt and implement, reasonable policies and practices designed to avoid work stoppages, slowdowns, disputes and strikes. (c) SUBCONTRACTOR shall give to VIETSOVPETRO prompt written notice of any labour dispute or anticipated labour dispute that may be expected to have a material adverse effect on the performance of the Work or the Subcontract Schedule. Such notice shall include details of the actions proposed by SUBCONTRACTOR to mitigate such effect. SUBCONTRACTOR, at its own cost, shall promptly take any measures reasonably required by VIETSOVPETRO to avoid or mitigate the effects of labour disputes. (d) SUBCONTRACTOR shall not take any unlawful action to prevent its employees from lawfully exercising their right of free association and their right to organize and bargain collectively. SUBCONTRACTOR shall observe Applicable Laws relating to a minimum age for employment of children, acceptable conditions of work, minimum wages, hours of work, and occupational health and safety; and not to use forced labour. (e) Without limiting the generality of Section 2.2.9(d), SUBCONTRACTOR further agrees that it: Page 12 of 90
    • Vietsovpetro Draft contract (i) (ii) (f) shall perform, or cause Subcontractors and Suppliers to perform, the Work in conformance with all applicable occupational health and safety standards; and shall not, in connection with the Work, employ, or permit Subcontractors or Suppliers to employ, illegal immigrants, and shall not employ, or permit Subcontractors or Suppliers to employ, workers under 18 years of age for any hazardous activities. SUBCONTRACTOR shall be responsible and liable for the payment of severance pay for its employees and of all its other obligations to its employees and Governmental Authorities as required by Applicable Law. SUBCONTRACTOR shall defend, indemnify and hold harmless VIETSOVPETRO and Company from and against any and all loss, liability, cost, claims, damages, demands and expenses (including legal fees and cost) of every kind and character, arising out of or as a result of SUBCONTRACTOR‟s failure to comply with this provision and/ or the failure of any member of SUBCONTRACTOR Group to fulfill the same obligation for its employees. 2.2.10 Co-operation and Non-interference with VIETSOVPETRO‟s Other Contractors and Company‟s Other Contractors (a) SUBCONTRACTOR shall be responsible for co-ordinating all project management, associated engineering, associated construction, installation and other activities in relation to the Work and the Contract Objects/ Subcontract Objects with VIETSOVPETRO. VIETSOVPETRO shall be responsible for co-ordinating all project management, associated engineering, associated construction, installation and other activities in relation to the work under the Contract and the Contract Objects with those of VIETSOVPETRO‟s other contractors and Company‟s other contractors carrying out concurrent activities in respect of the SVSW project or Company‟s offshore operations. SUBCONTRACTOR shall develop and maintain detailed interface matrix itemizing all interfaces for the Work. Such matrix shall include details and timing of all information to be provided by SUBCONTRACTOR to other entities, and by other entities to SUBCONTRACTOR, in relation to the Work. (b) During performance of the Work, VIETSOVPETRO and VIETSOVPETRO‟s other contractors and Company and Company‟s other contractors will be working at and around the Installation Sites. Without limiting VIETSOVPETRO‟s obligations under Section 2.4.4, SUBCONTRACTOR shall co-operate in good faith and use its reasonable efforts to co-ordinate associated construction, installation, testing, and/ or pre-commissioning of the Contract Objects and/or Subcontract Objects so as to enable any Person performing: (i) (ii) (c) the associated construction, installation, testing, pre-commissioning and/ or commissioning of other items of work in connection with the SVSW project to complete its work in a timely and efficient manner; and/or Drilling and related operations to carry out its work in a timely and efficient manner. Not used. (d) SUBCONTRACTOR shall also use all reasonable efforts to avoid any action or inaction that will or could interfere with such other activities. It may be necessary, if required by VIETSOVPETRO, to reschedule activities connected with the performance of the Work to eliminate or minimize interferences or standby time, and SUBCONTRACTOR shall co-operate fully in this effort and in accordance with SUBCONTRACTOR‟s obligations under Section 2.4, but without prejudice to Section 2.4.4(b). 2.2.11 Other SUBCONTRACTOR Responsibilities Page 13 of 90
    • Vietsovpetro Draft contract (a) SUBCONTRACTOR acknowledges that the Subcontract documents do not set out every detail of the Work. SUBCONTRACTOR shall carry out the entire Work, including all necessary associated design evolution and any part of the Work not expressly detailed in the Subcontract documents, nor specified in SUBCONTRACTOR‟s proposal for the Work, but necessary for the proper performance and completion of the Work according to the provisions of this Subcontract and for the completed Work to fulfill properly all the functions contemplated by the Subcontract. (b) SUBCONTRACTOR agrees that it shall be responsible for performing all activities and providing all services, SUBCONTRACTOR‟s Supply, and other items not specifically described in this Subcontract if: (i) it reasonably may be inferred in accordance with the high standards employed by leading international contractors in the offshore engineering and construction industry that the performance of such activities and the providing of such services, SUBCONTRACTOR‟s Supply, and other items were intended as parts of the Work; or (ii) the performance of such activities and the providing of such services, SUBCONTRACTOR‟s Supply, and other items are necessary or advisable in order for SUBCONTRACTOR to satisfy its obligations under this Subcontract. Work undertaken and SUBCONTRACTOR‟s Supply and other items provided pursuant to this Section 2.2.11 shall be performed as Work and not as Change Work. (c) SUBCONTRACTOR agrees that its designated Project Manager shall have the full authority, as between VIETSOVPETRO and SUBCONTRACTOR, to make any decisions required of SUBCONTRACTOR in relation to the Work, without referral to or the need to seek further authority from any other person or group of persons. The authority of SUBCONTRACTOR‟s Project Manager shall include the full authority to approve any commitments or expenditures by SUBCONTRACTOR under the Subcontract or any contractual arrangements with Subcontractors and Suppliers, even if these exceed SUBCONTRACTOR‟s own internal budget for the corresponding items. (d) SUBCONTRACTOR expressly agrees that if its designated Project Manager lacks the full authority to prioritize or otherwise determine the allocation of SUBCONTRACTOR‟s corporate resources to the Work, VIETSOVPETRO‟s Project Manager and other members of VIETSOVPETRO‟s project management team shall have the right of direct and unrestricted access to SUBCONTRACTOR‟s senior management having such authority. VIETSOVPETRO shall be entitled to exercise such right whenever it has concerns regarding matters actually or apparently outside SUBCONTRACTOR‟s Project Manager‟s authority, but shall generally do so only after consultation with SUBCONTRACTOR‟s Project Manager. SUBCONTRACTOR undertakes to give satisfactory consideration to any such concerns raised by VIETSOVPETRO. (e) In addition to its obligations under Sections 2.2.11 (c) and (d), each constituent member of SUBCONTRACTOR has appointed a project sponsor from its senior management not involved in the day-to-day management of the Work, as set out in Attachment 2-1. The project sponsor shall be the primary point of contact for VIETSOVPETRO‟s senior management not involved in the day-to-day management of the Subcontract, and will take prompt and effective action in respect of any concerns of VIETSOVPETRO‟s senior management regarding SUBCONTRACTOR‟s performance of the Work. There shall be regular periodic meetings between the project sponsor and VIETSOVPETRO‟s senior management. The agenda for each such meeting shall include review of the progress of the Work, review of planned activities for the next period, and identification and implementation of appropriate measures to assure the successful execution of the Work. Page 14 of 90
    • Vietsovpetro (f) Draft contract SUBCONTRACTOR‟s responsibilities include all of its other responsibilities and obligations provided elsewhere in this Section 2.0 and other parts of this Subcontract. 2.2.12 Compliance with Regulatory Requirements, Applicable Codes and Standards (a) SUBCONTRACTOR shall determine all the regulatory requirements affecting the performance of the Work and the associated design, installation and operation of the Contract Objects and Subcontract Objects. SUBCONTRACTOR shall prepare the technical documentation related to the Work to support VIETSOVPETRO‟s enquiries to the applicable Governmental Authorities. SUBCONTRACTOR shall not make, and shall ensure that other members of SUBCONTRACTOR Group do not make, any direct contact with Governmental Authorities or their certification agencies in relation to the Work without first informing VIETSOVPETRO and obtaining VIETSOVPETRO‟s written approval for such contact. In any contact with Governmental Authorities or their certification agencies, SUBCONTRACTOR shall not make, and shall ensure that other members of SUBCONTRACTOR Group do not make, any representations on behalf of Company or VIETSOVPETRO. (b) SUBCONTRACTOR shall co-ordinate with Company‟s Certification Contractor as necessary to secure regulatory approval of the applicable portions of the Work. Such co-ordination shall include: providing Company‟s Certification Contractor with all requested data, and inspection and testing plans (ITPs) for SUBCONTRACTOR‟s Supply, the Contract Objects and/or Subcontract Objects when applicable; and issuing notifications in good time of any upcoming hold or witness points that Company‟s Certification Contractor expects to attend pursuant to such ITPs. (c) Any approval, inspection, consent, act or omission of VIETSOVPETRO (other than a failure to perform the VIETSOVPETRO responsibilities in this Subcontract or an express release given in writing by VIETSOVPETRO) shall not affect SUBCONTRACTOR‟s responsibility for performing the Work in accordance with the provisions of this Subcontract, nor SUBCONTRACTOR‟s responsibility for any defect, deficiency, error, omission, nonconformance or default. Such SUBCONTRACTOR‟s responsibilities include, without limitation, compliance with Applicable Law, Applicable Codes and Standards, and Good Engineering and Operating Practices. (d) Such SUBCONTRACTOR‟s responsibilities shall not be released or affected by: (i) VIETSOVPETRO‟s execution of this Subcontract; (ii) any VIETSOVPETRO approval provided for under this Subcontract, including its approval of any Subcontractor or Supplier; (iii) VIETSOVPETRO‟s participation in or failure to participate in any inspection or test; or (iv) VIETSOVPETRO‟s acceptance of the Loadout Certificate, the Sailaway Certificates, any Handover Certificates, the Provisional Acceptance Certificate, or the Final Acceptance Certificate. 2.2.13 Environmental Compliance SUBCONTRACTOR shall perform the Work so that the Work shall conform to all environmental requirements of this Subcontract, Applicable Law, Applicable Codes and Standards, and Good Page 15 of 90
    • Vietsovpetro Draft contract Engineering and Operating Practices. SUBCONTRACTOR shall comply with its environmental management obligations pursuant to Section 2.20.6. 2.2.14 Compliance with Hazardous Operations Review and Quantitative Risk Assessment Requirements In addition to its own obligations in respect of safety aspects of the design of the Contract Objects and Subcontract Objects as described in Section 2.20 and Section 4.0 and Section 8.0, SUBCONTRACTOR shall participate actively in Company‟s and VIETSOVPETRO‟s jointly performed hazardous operations review and quantitative risk assessment of the design of the Contract Objects and Subcontract Objects. SUBCONTRACTOR shall implement the conclusions of the review and assessment into its design of the Contract Objects and Subcontract Objects. 2.2.15 VIETSOVPETRO Supplied Data SUBCONTRACTOR shall comply with its obligations pursuant to Section 2.27 in respect of VIETSOVPETRO Supplied Data. 2.2.16 SUBCONTRACTOR‟s Failure to Fulfill Responsibilities In addition to any specific remedies stipulated in this Section 2.2 or elsewhere in the Subcontract, if SUBCONTRACTOR fails to any material extent to fulfill any of its responsibilities hereunder despite VIETSOVPETRO, acting reasonably, having requested such fulfillment in writing and given SUBCONTRACTOR a reasonable opportunity to correct the failure, but is permitted by VIETSOVPETRO to continue performance of the Work, VIETSOVPETRO shall be entitled to a reduction in the Subcontract Price, as reasonably determined by VIETSOVPETRO, commensurate with any such failure. Alternatively, if VIETSOVPETRO, in the absence of proper performance by SUBCONTRACTOR that does not invoke termination pursuant to Section 2.18.1, and after written notice to SUBCONTRACTOR of its intention to do so, performs or has others perform any functions that are within SUBCONTRACTOR‟s responsibility under this Subcontract, it shall be entitled to recover from SUBCONTRACTOR its reasonable documented costs incurred in so doing. It‟s understood that right after SUBCONTRACTOR completes (i) the Milestone No. 03-05 for Handover of completed Pipelines and Associated Works (as evidenced by VIETSOVPETRO‟s signature on Pipelines and Associated Works Handover Certificates), (ii) Milestone No. 04-06 for Handover of completed SVSW Topside and Ancillary items (as evidenced by VIETSOVPETRO‟s signature on SVSW Topside and Ancillary items Handover Certificates), VIETSOVPETRO‟s Hookup and Commissioning Subcontractor (“HUC Subcontractor”) shall commence their work in Su Tu Vang South West Project. Notwithstanding any provision herein, in case SUBCONTRACTOR fails to comply with the Subcontract Schedule which leads to the standby of offshore hookup and commissioning work of HUC Subcontractor, SUBCONTRACTOR shall grant a full and free access for a critical team of HUC Subcontractor to enter into the SUBCONTRACTOR‟s Spread for performing their work. 2.3 VIETSOVPETRO Responsibilities 2.3.1 VIETSOVPETRO has the following responsibilities under this Subcontract: (a) to pay obligations, including the Subcontract Price, that are the responsibility of VIETSOVPETRO in accordance with the terms of this Subcontract; (b) to provide the VIETSOVPETRO Supplied Data in accordance with Section 2.27 and Section 8.0; Page 16 of 90
    • Vietsovpetro Draft contract (c) to provide the VIETSOVPETRO Furnished Materials without defect or deficiency in accordance with Section 7.0 and the schedule and conditions as provided for in the Subcontract; (d) to provide the VIETSOVPETRO Contract Object (except for that not to be provided to SUBCONTRACTOR under the Subcontract) without defect/deficiency in accordance with the schedule and conditions as provided for in the Subcontract; (e) to obtain the consents and permits as described in Attachment 2-12 in a timely manner to allow SUBCONTRACTOR to complete the Work in accordance with the Subcontract Schedule; (f) to give approvals and reasonable assistance required of it pursuant to the Subcontract, without undue delay; (g) to arrange, subject to Section 2.4.4, for reasonable access for SUBCONTRACTOR to the Installation Site at the times reasonably required by SUBCONTRACTOR in accordance with the Subcontract Schedule; and (h) all other responsibilities and obligations of VIETSOVPETRO provided elsewhere in this Subcontract. 2.4 Offshore Operations 2.4.1 SUBCONTRACTOR and Subcontractors shall afford representatives of VIETSOVPETRO, Company and Governmental Authorities access to Sites and SUBCONTRACTOR‟s Spread for the purpose of conducting safety inspections. The execution of any such inspection shall in no way relieve SUBCONTRACTOR of any of its obligations under this Subcontract. SUBCONTRACTOR shall promptly rectify, at its cost, any defects, nonconformances or deficiencies identified in any such inspection. With respect to any safety inspection prior to movement of any part of SUBCONTRACTOR‟s Spread to perform Work at a Fabrication Site or Construction Site, or the Installation Site, such defects, nonconformances or deficiencies must be rectified prior to such movement. SUBCONTRACTOR shall not be responsible for the costs of the Persons performing such inspections (including per diem allowances, travel expenses and professional fees) unless the need for such inspections arises out of acts or omissions of SUBCONTRACTOR Group, including where re-inspection is needed because an earlier inspection revealed matters needing correction. SUBCONTRACTOR shall be responsible for vessel-time and all other SUBCONTRACTOR Group‟s costs in relation to such inspections. 2.4.2 SUBCONTRACTOR shall arrange for and, except as provided below, also pay for: (a) (b) 2.4.3 inspection by Vietnamese Governmental Authorities of SUBCONTRACTOR‟s primary vessels prior to their entry into Vietnamese territorial waters, as required by Applicable Law; and security and other clearances and/ or import and export of SUBCONTRACTOR‟s Spread to the Site. SUBCONTRACTOR shall ensure that all parts of SUBCONTRACTOR‟s Spread (including, without limitation, marine vessels, marine plant, cranes, diving facilities, pipe laying equipment, piling equipment, welding equipment, survey and inspection equipment, positioning equipment, other installation equipment and installation aids utilized in performance of the Work) are in such good condition as to permit the most efficient working thereof and with a full and competent complement of masters, officers, crews and operators. SUBCONTRACTOR shall further ensure that all parts of SUBCONTRACTOR‟s Spread are in every way fit for service in all weather conditions foreseeable for Page 17 of 90
    • Vietsovpetro Draft contract the Site and the industry-recognized offshore working season. SUBCONTRACTOR shall also ensure there are sufficient spares onboard the vessels. 2.4.4 (a) Without relieving VIETSOVPETRO of any of its obligations under this Subcontract, SUBCONTRACTOR shall ensure that every aspect of and all operations connected with the Work are carried out so as not to damage, or to interfere unnecessarily or improperly with, any of VIETSOVPETRO Group‟s offshore facilities or VIETSOVPETRO Group operations or Company Group‟s offshore facilities or Company Group operations. SUBCONTRACTOR shall provide and properly maintain necessary safeguards for protection of Company Group‟s offshore facilities and/or VIETSOVPETRO Group‟s offshore facilities in relation to SUBCONTRACTOR‟s operations. (b) Provided that SUBCONTRACTOR has properly planned and scheduled the installation of the Contract Objects and Subcontract Objects (including having coordinated and planned with VIETSOVPETRO or VIETSOVPETRO‟s other contractors and support properly VIETSOVPETRO in coordinating and planning with Company or Company‟s other contractors to avoid and/ or minimise any delay or disruption) and is working to the Subcontract Schedule, if SUBCONTRACTOR experiences an unavoidable delay or disruption or incurs additional cost during offshore installation of any of the Contract Objects and/or Subcontract Objects because: (i) the presence of or operations by VIETSOVPETRO or VIETSOVPETRO‟s other contractors or Company or Company‟s other contractors demonstrably and materially hinder(s) or interfere(s) with SUBCONTRACTOR‟s scheduled operations under this Subcontract; or (ii) the Work of VIETSOVPETRO or VIETSOVPETRO‟s other contractors or Company or Company‟s other contractors is defective or ill-timed and SUBCONTRACTOR depends upon proper and timely execution thereof in order for SUBCONTRACTOR to perform the Work in accordance with the Subcontract Schedule, then SUBCONTRACTOR shall be entitled to a Change Order Authorization, provided further that SUBCONTRACTOR gave VIETSOVPETRO timely notice of the likely implications for the Work so that VIETSOVPETRO was able to take alternative steps (whether or not actually taken) to avoid such delay, interference, or additional cost. The Change Order Authorization shall set out such adjustment to the Subcontract Price as is reasonable to compensate SUBCONTRACTOR for the time lost and additional costs incurred; and/ or such adjustment of the Subcontract Schedule, including extension, if any, to the Guaranteed Completion Date, appropriate for the delay experience. Provided, however, that there shall be no adjustment to the Subcontract Schedule to the extent that and for so long as there is any concurrent delay event due to pre-existing matters within SUBCONTRACTOR‟s risk or responsibility under the Subcontract. SUBCONTRACTOR shall use its best endeavours to minimize the effect of any such delay or disruption. SUBCONTRACTOR shall not be entitled to assert any claim or excuse in respect of any act or omission of any member of SUBCONTRACTOR Group except only if such act or omission is committed by a member of SUBCONTRACTOR Group that is otherwise a contractor to VIETSOVPETRO and/ or Company and, as such, is complying with its contractual obligations. (c) SUBCONTRACTOR shall obtain from the appropriate Governmental Authorities the necessary permit or permits to install the Contract Objects and Subcontract Objects at the offshore location with the proposed SUBCONTRACTOR‟s Spread and installation procedure, and in accordance with the Subcontract Schedule. During SUBCONTRACTOR‟s offshore installation Work, Page 18 of 90
    • Vietsovpetro Draft contract SUBCONTRACTOR shall co-ordinate and interface with the appropriate Governmental Authorities regarding the daily offshore operations. Any delays, disruptions, or interferences caused by Third Parties (other than VIETSOVPETRO‟s other contractors and/ or Company‟s other contractors, as addressed in this Section 2.4.4) working in the same vicinity, shipping traffic, fishing activities and other installation complexities shall, subject to Section 2.10, be the responsibility of SUBCONTRACTOR unless and insofar as expressly provided otherwise in the Subcontract. 2.4.5 SUBCONTRACTOR shall ensure that all aspects of, and all operations connected with, the Work are carried out so as not to damage any Third Party Property including, without limitation, submarine telecommunication cables. SUBCONTRACTOR shall perform the operations in a safe manner and properly maintain necessary safeguards for protection of such Third Party Property. 2.4.6 (a) (b) SUBCONTRACTOR shall expeditiously buoy, light, raise and remove all or any part of the Project Property or any other plant, material, equipment, item, vessel or craft included in SUBCONTRACTOR‟s Spread that may be sunk or lost in the course of the performance of the Work. SUBCONTRACTOR shall carry out all such operations: (i) so as to comply with all Applicable Laws and to avoid any hazard to navigation, any delay in the completion of the Work, and any hazard or disturbances to Company‟s and VIETSOVPETRO‟s offshore operations; and (ii) at the cost of the Parties as determined in accordance with Section 2.15.8. (c) 2.4.7 SUBCONTRACTOR shall otherwise deal with such sunk or lost items as VIETSOVPETRO, acting reasonably, may direct. (a) SUBCONTRACTOR shall not, without the prior consent of VIETSOVPETRO, disrupt the Work for any SUBCONTRACTOR Group vessel to render assistance or perform salvage unless the master of the vessel is required to render assistance where the safety of persons is at risk, or by the general maritime law or other relevant code of law. SUBCONTRACTOR shall promptly notify VIETSOVPETRO in writing of any such salvage or assistance operations, and in any event within twenty (20) hours. (b) In the event of salvage, then all salvage and all proceeds from derelicts shall first be divided equally between Company and VIETSOVPETRO in accordance with the Contract after deducting the master‟s, officers‟ and crew‟s share, hire of vessel for time lost at the time-based unit rates set out in this subcontract, and other reasonable expenses incurred. SUBCONTRACTOR shall be entitled to 50% of VIETSOVPETRO‟s share of such salvage and proceeds. Subject as aforesaid, reasonable expenses (excluding any damage to or loss of the vessel or other SUBCONTRACTOR Group property) incurred in saving or attempting to save life and in unsuccessful attempts to salvage shall be borne equally by Company and VIETSOVPETRO and SUBCONTRACTOR shall be liable for 50% of VIETSOVPETRO‟s portion of such reasonable expenses. Provided, however, that Company and VIETSOVPETRO shall not be liable to contribute towards any salvage payable by SUBCONTRACTOR or any member of SUBCONTRACTOR Group arising in any way out of services rendered under this Section 2.4.7. Reasonable expenses incurred in unsuccessful salvage attempts, and reasonable expenses exceeding actually realized salvage and proceeds from derelicts, shall be borne equally by Company and VIETSOVPETRO and SUBCONTRACTOR shall be liable for 50% of VIETSOVPETRO‟s portion of such reasonable expenses. Page 19 of 90
    • Vietsovpetro (c) Draft contract SUBCONTRACTOR shall be entitled, by means of a Change Order Authorization, to adjustment of the Subcontract Schedule, including extension, if any, to the Guaranteed Completion Date, if and to the extent such adjustment is required as a result of time lost by salvage performed by SUBCONTRACTOR under this Section 2.4.7. Provided, however, that there shall be no adjustment to the Subcontract Schedule to the extent that and for so long as there is any concurrent delay event due to pre-existing matters within SUBCONTRACTOR‟s risk or responsibility under the Subcontract. SUBCONTRACTOR shall use its best endeavours to minimize the effect of any such delay or disruption. 2.4.8 SUBCONTRACTOR shall waive all salvage rights, where such rights could otherwise be exercised, should it be called upon to recover any of Company‟s or Company‟s other contractors‟ property or VIETSOVPETRO‟s or VIETSOVPETRO‟s other contractors‟ property. VIETSOVPETRO shall use all reasonable endeavours to get VIETSOVPETRO‟s other contractors and Company‟s other contractors similarly to waive salvage rights in respect of SUBCONTRACTOR Group Property. 2.4.9 SUBCONTRACTOR shall not, unless it has first obtained VIETSOVPETRO‟s written approval, which shall not be unreasonably withheld, demobilize, remove from the Work, or substitute any marine vessel used by SUBCONTRACTOR Group in the performance of the Work. 2.5 Title 2.5.1 (a) SUBCONTRACTOR warrants that it has, and undertakes that it will at all times maintain, good title, free and clear of all liens, charges and other encumbrances, to all materials, equipment, tools and supplies furnished by SUBCONTRACTOR or Subcontractors or Suppliers that are or are intended to become part of the SUBCONTRACTOR‟s Supply or the Contract Objects and/or Subcontract Objects or that are or are intended to be used by Company and/or VIETSOVPETRO in the maintenance thereof, and in all drawings, documents and associated engineering and other data prepared or furnished by SUBCONTRACTOR or Subcontractors or Suppliers in performing the Work. (b) Full title to said materials, equipment, tools, supplies, and (subject to Section 2.16.3) to drawings, documents and associated engineering and other data, shall pass to VIETSOVPETRO and/or Company progressively as the Work is performed, at the earliest of: (i) the date said materials, equipment, tools, and supplies are identified to or appropriated for the Work or this Subcontract; (ii) the date said drawings, documents and associated engineering and other data are prepared, or furnished for the Work; (iii) the date the said materials, equipment, tools and supplies are delivered: (A) (B) as to such items sourced from within the Republic of Vietnam, to the Construction Site or to the Installation Site, as applicable; or (C) (iv) as to such items sourced from outside the Republic of Vietnam, to the point of import into the Republic of Vietnam; to such point of delivery as otherwise identified in this Subcontract; the date payment for said materials, equipment, tools, supplies, drawings, documents and associated engineering and other data is made by VIETSOVPETRO to SUBCONTRACTOR; Page 20 of 90
    • Vietsovpetro Draft contract (v) the date of Handover (if applicable) or Provisional Acceptance; or (vi) upon termination of this Subcontract. Provided, however, that VIETSOVPETRO, shall have the right, but not the obligation, to take over from SUBCONTRACTOR all or any part of any surplus items of SUBCONTRACTOR‟s Supply procured for the Work but not actually used. Except as VIETSOVPETRO may elect, by written notice to SUBCONTRACTOR, to take over any such surplus items, SUBCONTRACTOR shall be responsible for disposing of surplus items. The effect upon the Subcontract Price, if any, of either or any combination of the preceding cases shall be determined in accordance with the provisions of Section 10.0 – Changes and Section 5.0 – Compensation. (c) The passing of title to VIETSOVPETRO and/or Company shall in no way affect SUBCONTRACTOR‟s obligations as set forth in other provisions of this Subcontract, including those in Section 2.2.5 relating to the importation of SUBCONTRACTOR‟s Supply. (d) Transfer of title shall in no way affect VIETSOVPETRO‟s rights (including those to reject or require correction of nonconforming items, or to require correction of defective items) nor VIETSOVPETRO‟s obligation to pay all sums due to SUBCONTRACTOR for items to which VIETSOVPETRO and or Company asserts title before VIETSOVPETRO has made payment to SUBCONTRACTOR for such items, as set forth in other provisions of this Subcontract. Notwithstanding the foregoing, for the purposes of Sections 2.5.1(b), 2.13 and 2.15.6, unless VIETSOVPETRO, at its sole discretion on a case-by-case basis, decides otherwise, the following items shall be considered as SUBCONTRACTOR Group Property and shall not be considered to be SUBCONTRACTOR‟s Supply: (i) (ii) (e) defective or nonconforming items that have been removed in order for them to be replaced with alternative items pursuant to Section 2.13, after such replacement has been completed; and items procured for the Work but not used in the Work nor taken over by VIETSOVPETRO pursuant to Section 2.5.1(b). SUBCONTRACTOR shall be responsible for the care, custody and control of said materials, equipment, tools, supplies and exercise due care thereof to protect them from loss or damage until SUBCONTRACTOR has satisfactorily delivered them into VIETSOVPETRO‟s custody on Handover or Provisional Acceptance or upon termination of this Subcontract, whichever first occurs. With regard to spares, SUBCONTRACTOR shall use due care to protect them from loss or damage, including carrying out preservation or maintenance prescribed by Suppliers, until satisfactory delivery of such spares to VIETSOVPETRO. 2.5.2 Title in all material, equipment, documentation or other property issued by VIETSOVPETRO to SUBCONTRACTOR shall at all times be and remain vested in VIETSOVPETRO and/or Company. 2.5.3 (a) Pursuant to Section 2.5.1(b), but subject to Section 2.16.3, all drawings, documents, associated engineering, computer programs, disks and/ or tapes and other data prepared or furnished by SUBCONTRACTOR or Subcontractors or Suppliers in performing the Work shall become the property of VIETSOVPETRO and/or Company at the time of preparation and may be used by VIETSOVPETRO and/or Company for any purpose whatsoever. Provided, however, that in the case of computer programs and any data derived from these and any other items that are the subject of pre-existing ownership rights, SUBCONTRACTOR may instead provide VIETSOVPETRO and/or Company, at no extra charge to VIETSOVPETRO or Company, with Page 21 of 90
    • Vietsovpetro Draft contract an irrevocable, royalty-free, assignable licence acceptable to VIETSOVPETRO allowing Company‟s unrestricted use and quiet enjoyment of such items in relation to operation, maintenance, repair, modification and use of the Contract Objects and/or Subcontract Objects, and sale of the products thereof. (b) SUBCONTRACTOR shall ensure that VIETSOVPETRO and/or Company has full rights to use, independently and at no extra charge, any software and any other items in relation to SUBCONTRACTOR‟s Supply that may be subject to a Supplier‟s licence agreement or similar contractual arrangement. SUBCONTRACTOR shall ensure that any licence and similar terms applicable to VIETSOVPETRO‟s and/or Company‟s use of the Contract Objects and/or Subcontract Objects are acceptable to VIETSOVPETRO before SUBCONTRACTOR enters into any agreement containing or pertaining to such terms. (c) SUBCONTRACTOR shall obtain for Company‟s benefit, at no extra charge, all software licences and the like that Company may need in relation to the use and quiet enjoyment of any items that SUBCONTRACTOR is to provide to VIETSOVPETRO pursuant to this Subcontract. 2.5.4 SUBCONTRACTOR shall protect VIETSOVPETRO and/or Company interest in all materials, equipment, tools, supplies, drawings, documents and associated engineering and other data with respect to which title has passed to VIETSOVPETRO and/or Company but which remain in the possession of SUBCONTRACTOR Group, or which have been issued by VIETSOVPETRO to SUBCONTRACTOR Group for use in the performance of the Work. For such purpose, SUBCONTRACTOR shall take or cause to be taken all actions necessary under the laws of the appropriate jurisdiction(s) to protect VIETSOVPETRO‟s and/or Company‟s title, and shall defend, indemnify and hold harmless VIETSOVPETRO and Company against claims by other entities with respect thereto where such claims involve or relate to SUBCONTRACTOR Group, or result from or arise out of any act or omission by SUBCONTRACTOR Group. Provided, however, that VIETSOVPETRO shall reimburse SUBCONTRACTOR for the substantiated reasonable actual costs of actions not already specified herein as SUBCONTRACTOR‟s responsibility that VIETSOVPETRO requires SUBCONTRACTOR to take to protect VIETSOVPETRO and/or Company title before VIETSOVPETRO has made full payment for the items concerned in accordance with the Subcontract. 2.5.5 Any portion of the Work for which title has passed to VIETSOVPETRO and/or Company but which remains in the care and custody of SUBCONTRACTOR Group, together with material or equipment or other property issued by VIETSOVPETRO to SUBCONTRACTOR Group, shall be clearly identified by SUBCONTRACTOR Group (by physical marking or labelling, wherever practicable) as being the property of VIETSOVPETRO and/or Company and shall be segregated or otherwise clearly distinguishable from SUBCONTRACTOR Group Property. 2.5.6 SUBCONTRACTOR shall cause all conditions of this Section 2.5 to be inserted mutatis mutandis in all contracts with Subcontractors and Suppliers so that Company and VIETSOVPETRO and SUBCONTRACTOR shall have the rights set forth herein with respect to each Subcontractor and Supplier. 2.6 Guaranteed Completion Date SUBCONTRACTOR guarantees that Provisional Acceptance for the Work shall occur not later than the date set out in Section 9.1 for such Milestone (as such date may be adjusted by a Change Order Authorization as specifically provided in this Subcontract), the “Guaranteed Completion Date”. Page 22 of 90
    • Vietsovpetro Draft contract 2.7 Subcontract Schedule Compliance 2.7.1 (a) SUBCONTRACTOR shall perform the Work expeditiously, continuously and diligently using adequate, qualified and competent personnel together with adequate and efficient project management, associated engineering, onshore fabrication and offshore installation facilities and resources; and shall perform and complete the Work in accordance with the Subcontract Schedule. (b) SUBCONTRACTOR shall continuously monitor the progress of the Work so as to know at all times the planned and actual progress. SUBCONTRACTOR shall promptly provide such information as VIETSOVPETRO may require for monitoring and verifying the progress of the Work. (c) In the event that SUBCONTRACTOR‟s actual progress approaches a behind-schedule condition, SUBCONTRACTOR shall immediately advise VIETSOVPETRO and thereafter meet with VIETSOVPETRO to discuss causes for the adverse trend and any deficiencies in progress, and proposed corrective measures. SUBCONTRACTOR shall implement in good time all agreed corrective measures. Costs associated with implementing such measures shall be borne by the Party or Parties who caused and/or contributed to cause the delay. In the event where VIETSOVPETRO has liability, the associated costs shall be calculated using the applicable Unit Rates in Section 5.0. (d) SUBCONTRACTOR shall not give priority to work for its other clients to the detriment of the Work. (a) If SUBCONTRACTOR fails to perform and complete the Work in accordance with the Subcontract Schedule, including failing, or appearing to be failing, to accomplish a Milestone on or before the date for the completion of such Milestone as set forth in Section 9.1, VIETSOVPETRO may deliver to SUBCONTRACTOR a notice of schedule delay (the “Notice of Schedule Delay”). Within 5 (Five) days after it has received such a Notice of Schedule Delay, SUBCONTRACTOR shall deliver to VIETSOVPETRO a schedule recovery plan (the “Schedule Recovery Plan”). (b) Such Schedule Recovery Plan shall set forth in detail how SUBCONTRACTOR intends to increase the rate of performance of the Work to recover to the Subcontract Schedule as soon as practicable. SUBCONTRACTOR shall base the proposed Schedule Recovery Plan on SUBCONTRACTOR taking whatever measures are necessary to recover to the Subcontract Schedule, such as, but not limited to, rescheduling of the Work; increasing labour and supervisory levels; expediting the Work; utilizing more productive marine vessels, plant or construction equipment; introducing or increasing overtime; increasing shift work; and mobilizing additional marine vessels, plant and construction equipment. (c) SUBCONTRACTOR shall revise its proposed measures and the Schedule Recovery Plan as reasonably required by VIETSOVPETRO to assure recovery to the Subcontract Schedule is accomplished as soon as practicable. VIETSOVPETRO shall not unreasonably withhold approval of SUBCONTRACTOR‟s proposed Schedule Recovery Plan. Upon VIETSOVPETRO‟s approval of the Schedule Recovery Plan, SUBCONTRACTOR shall immediately commence diligent implementation of the measures set out therein. (d) Without prejudice to Section 2.10, Section 10.2, or Section 10.3, a Schedule Recovery Plan shall not constitute or be grounds for a change to the Subcontract Schedule. 2.7.2 Page 23 of 90
    • Vietsovpetro 2.7.3 Draft contract (a) If SUBCONTRACTOR fails, or has reason to believe that it is likely to fail, to recover to the Subcontract Schedule in accordance with the latest VIETSOVPETRO-approved Schedule Recovery Plan, SUBCONTRACTOR shall promptly give notice thereof to VIETSOVPETRO. If VIETSOVPETRO so requires, SUBCONTRACTOR shall promptly deliver to VIETSOVPETRO a further Schedule Recovery Plan complying with the requirements and in accordance with the procedures set forth in Section 2.7.2. (b) SUBCONTRACTOR shall deliver written reports to VIETSOVPETRO each week, or more frequently if required by VIETSOVPETRO, detailing SUBCONTRACTOR‟s progress under any Schedule Recovery Plan. (c) None of the foregoing shall limit SUBCONTRACTOR‟s obligation, as set forth in Section 2.7.2, to expedite the performance of the Work by taking such measures as are necessary to recover to the Subcontract Schedule as soon as practicable. 2.7.4 SUBCONTRACTOR shall bear the costs of implementing the Schedule Recovery Plan except and to the extent the need for such plan is attributable to VIETSOVPETRO‟s breach of its obligations under Section 2.3, suspension pursuant to Section 2.8.1, or recovery from the effects of a Force Majeure or a Change, in each case pursuant to a duly authorized Change Order Authorization. In the event of disagreement as to whether or not SUBCONTRACTOR is entitled to a Change Order Authorization, SUBCONTRACTOR shall promptly and assiduously implement any written instructions given by VIETSOVPETRO pending resolution of the matter. 2.7.5 Neither SUBCONTRACTOR‟s obligations nor VIETSOVPETRO‟s rights and remedies under this Section 2.7 and Section 2.18 are diminished or prejudiced in any way by the Delay Liquidated Damages provisions of Section 2.9. 2.8 Suspension 2.8.1 (a) Notwithstanding any other provisions of the Subcontract, VIETSOVPETRO at any time and from time to time may suspend without cause all or part of the Work for a reasonable period of time by giving SUBCONTRACTOR written notice specifying the part of the Work to be suspended and the effective date of the suspension. SUBCONTRACTOR shall suspend its activities accordingly, but shall continue to perform all unsuspended parts of the Work. Unless otherwise instructed by VIETSOVPETRO, SUBCONTRACTOR shall during any such suspension maintain its staff and labour on or near the Site and otherwise ready to proceed with the Work upon receipt of VIETSOVPETRO‟s further instructions. Appropriate adjustments to the Guaranteed Completion Date and/ or the Subcontract Price shall be made by means of a Change Order Authorization. Regarding adjustment to the Subcontract Price, VIETSOVPETRO shall compensate SUBCONTRACTOR at the applicable rates specified in Section 5.0 (or, in the case of a partial suspension of SUBCONTRACTOR‟s Spread, an amount equal to such portion that has been suspended) for: (i) standby of SUBCONTRACTOR Group‟s employees, SUBCONTRACTOR‟s Spread and/ or SUBCONTRACTOR Group‟s construction tools, plant and equipment during the period of suspension if and to the extent such items cannot be properly utilized by SUBCONTRACTOR Group in performance of the Work hereunder or other work for other persons as agreed by VIETSOVPETRO; (ii) demobilizing and remobilizing SUBCONTRACTOR Group‟s employees, SUBCONTRACTOR‟s Spread, and/ or SUBCONTRACTOR Group‟s construction tools, plant and equipment, if such demobilization and remobilization are authorized in advance in writing by VIETSOVPETRO; and Page 24 of 90
    • Vietsovpetro Draft contract (iii) 2.8.2 After having given a suspension notice as provided above, VIETSOVPETRO shall have the right to direct SUBCONTRACTOR to resume its activities on all or some of the suspended Work. Provided, however, that if VIETSOVPETRO suspends operations by SUBCONTRACTOR‟s Spread so as to prevent SUBCONTRACTOR completing such operations before the end of the industry-recognized offshore working season, SUBCONTRACTOR, acting reasonably, shall not be obliged to resume performance of such operations before the start of the next offshore working season. In such event, SUBCONTRACTOR shall cooperate in minimizing the total costs to be borne by VIETSOVPETRO, which shall include applicable demobilization and remobilization charges pursuant to Section 2.8.1(a). For the purpose of Section 2.8, “industryrecognized offshore working season” and “offshore working season” means the period from 1 April to 31st October inclusive. If SUBCONTRACTOR has been demobilized and instructed by VIETSOVPETRO not to retain SUBCONTRACTOR Group‟s employees, SUBCONTRACTOR‟s Spread and/ or SUBCONTRACTOR Group‟s construction tools, plant and equipment during the period of suspension, VIETSOVPETRO shall give reasonable prior notice of remobilization to SUBCONTRACTOR and SUBCONTRACTOR shall exert all reasonable efforts to meet VIETSOVPETRO‟s desired remobilization date. (iii) (c) (i) (ii) (b) other items directly related to the suspended part of the Work, such as protecting and securing any materials and equipment intended for incorporation into the suspended Work. If any such suspension by VIETSOVPETRO exceeds, or may reasonably be expected to exceed, thirty five (35) Days in the aggregate, SUBCONTRACTOR shall be entitled, after obtaining VIETSOVPETRO‟s consent (such consent not to be unreasonably withheld), to demobilize all or part of SUBCONTRACTOR‟s Spread in order to meet SUBCONTRACTOR‟s other contractual obligations. SUBCONTRACTOR, when seeking such consent, shall submit to VIETSOVPETRO a plan for remobilization which shall include an estimate of the time period required for SUBCONTRACTOR‟s remobilization taking into account such other contractual obligations and such other information as VIETSOVPETRO shall reasonably request to fully evaluate such request. SUBCONTRACTOR shall keep full and detailed records of all costs of demobilization, maintenance, and standby, and of other costs in respect of extended suspensions pursuant to this Section 2.8.1, for any of which it believes it is entitled to receive compensation. Such records shall be open to inspection by VIETSOVPETRO at all reasonable times. SUBCONTRACTOR shall provide such regular reports to VIETSOVPETRO as VIETSOVPETRO may reasonably request, which shall show cumulative costs to date and forecast costs for the entire estimated suspension period. SUBCONTRACTOR shall invoice VIETSOVPETRO on a monthly basis for such costs incurred, and provide reasonable documentary proof to establish the basis for SUBCONTRACTOR‟s calculations. VIETSOVPETRO shall have the right to suspend any portion of the Work for which SUBCONTRACTOR is in default pursuant to Section 2.18, or in violation of the safety regulations described in Section 2.20. Such suspension shall be by written notice to SUBCONTRACTOR and shall apply only to the portion of the Work cited therein. No adjustment to the Guaranteed Completion Date or the Subcontract Price shall be made as a result of such suspension and VIETSOVPETRO may suspend payments to SUBCONTRACTOR for any part of such suspended Work that was performed prior to said suspension. After having given a suspension notice as provided above, VIETSOVPETRO shall have the right to direct SUBCONTRACTOR to resume its activities on all or some of the suspended Work. Page 25 of 90
    • Vietsovpetro 2.8.3 Draft contract (a) VIETSOVPETRO shall pay the Subcontract Price to SUBCONTRACTOR in accordance with Section 5.0, provided that VIETSOVPETRO shall be entitled to withhold payment of any disputed amount, or where VIETSOVPETRO is pursuing in good faith any claim or the like against SUBCONTRACTOR in relation to the Subcontract, an amount commensurate with such claim. Any payment falling due on a Day that is not a Business Day for either VIETSOVPETRO‟s bank or SUBCONTRACTOR‟s bank shall be made on the next following Business Day. SUBCONTRACTOR shall be entitled to interest at the non-compounded rate of the three-month LIBOR for US Dollars plus 2% (200 basic points) per annum for the period of delay on undisputed amounts not paid at the due time in accordance with the Subcontract. Any interest to which SUBCONTRACTOR is entitled shall be calculated and claimed by SUBCONTRACTOR at the time of SUBCONTRACTOR‟s final invoice. Such calculation shall also take account of any amounts paid by VIETSOVPETRO earlier than the due date, using solely for this purpose, and without creating a liability for SUBCONTRACTOR, a negative interest rate of the three-month LIBOR for US Dollars plus 2% (200 basic points) applied to the period by which the payment was made early. SUBCONTRACTOR shall provide with each invoice submitted to VIETSOVPETRO a summary of payments to date, showing any cumulative interest to which SUBCONTRACTOR considers it is entitled. (b) Without prejudice to Section 2.8.3(a), if VIETSOVPETRO‟s payment of any undisputed amount is more than twenty (20) Days past due, SUBCONTRACTOR may notify VIETSOVPETRO of its intention to suspend the performance of any or all of its obligations under the Subcontract. Provided, however, that such 20-Day period shall not be deemed to have commenced until VIETSOVPETRO has received from SUBCONTRACTOR all credit notes requested by VIETSOVPETRO in respect of disputed amounts. After receipt of said notice, VIETSOVPETRO shall have fifteen (15) Days to make payment to SUBCONTRACTOR (the “Cure Period”). SUBCONTRACTOR shall continue performing its obligations during the Cure Period. If SUBCONTRACTOR does not receive payment by the end of said Cure Period, and provided that it has duly continued performance of its obligations during the Cure Period, thereafter and until it receives payment SUBCONTRACTOR may suspend all or any portion of its obligations under the Subcontract by written notice to VIETSOVPETRO. Appropriate adjustments to the Guaranteed Completion Date and/ or the Subcontract Price, which will take into consideration additional costs incurred by SUBCONTRACTOR due to late payment of undisputed amounts and any consequent suspension as contemplated by this Section 2.8.3(b), shall be made by means of a Change Order Authorization. 2.8.4 SUBCONTRACTOR shall, during the suspension of the Work, properly preserve, protect and secure the Work, including any Contract Objects and/or Subcontract Objects, as applicable, and SUBCONTRACTOR‟s Supply and VIETSOVPETRO Furnished Material in SUBCONTRACTOR Group‟s custody. 2.9 Damages for Delay 2.9.1 The Parties expressly agree that: (a) (b) 2.9.2 Delay Liquidated Damages amounts stipulated in Attachment 2-1 are appropriate; and SUBCONTRACTOR shall pay any Delay Liquidated Damages becoming due pursuant to this Section 2.9. If SUBCONTRACTOR fails to achieve a Milestone designated in Attachment 2-1 as being subject to liquidated damages by the date for such Milestone, as set out in Attachment 2-1, as any such date may be adjusted by any Change Order Authorization, SUBCONTRACTOR shall pay to VIETSOVPETRO as Page 26 of 90
    • Vietsovpetro Draft contract liquidated damages (“Delay Liquidated Damages”) the applicable sum stipulated in Attachment 2-1 for each day (or part day) of delay, unless and to the extent that such delay is due to Force Majeure or other circumstances that are valid grounds for excusable delay by SUBCONTRACTOR under the Subcontract, until the key Milestone is achieved. 2.9.3 Delay Liquidated Damages shall not exceed, in the aggregate, the maximum amount set out in Attachment 2-1, such amount being equivalent to ten percent (10%) of the Subcontract Price. 2.9.4 In the event VIETSOVPETRO terminates the Subcontract pursuant to Section 2.18.1, the Extra Costs payable by SUBCONTRACTOR shall include a sum equivalent to the maximum amount of Delay Liquidated Damages specified in Section 2.9.3. Provided, however, that VIETSOVPETRO shall refund any excess Delay Liquidated Damages if and to the extent that, after termination of the Subcontract, VIETSOVPETRO and/ or any Replacement Contractor subsequently complete(s) the Work by a date which, if it had been achieved by SUBCONTRACTOR under the Subcontract, would have resulted in less than the maximum amount of Delay Liquidated Damages being payable by SUBCONTRACTOR. 2.9.5 Any Delay Liquidated Damages shall be due and payable within thirty (30) Days of SUBCONTRACTOR‟s receipt of VIETSOVPETRO‟s invoice therefor. VIETSOVPETRO may submit monthly invoices for interim amounts. VIETSOVPETRO shall have the right to offset, in whole or in part, Delay Liquidated Damages amounts invoiced to SUBCONTRACTOR, up to the maximum amount specified in Section 2.9.3, from any payments due to SUBCONTRACTOR. 2.9.6 Without prejudice to VIETSOVPETRO‟s right to terminate the Subcontract and recover Extra Costs pursuant to Section 2.18.5, to the extent that Delay Liquidated Damages are duly enforceable by VIETSOVPETRO in respect of delay that does not give rise to termination of the Subcontract, they shall be VIETSOVPETRO‟s sole remedy for the delay to which they relate, notwithstanding references to time is of the essence or other delay provisions elsewhere in the Subcontract. 2.9.7 The provisions of this Section 2.9 are without prejudice to, and shall not be construed to limit, VIETSOVPETRO‟s rights and remedies under the Subcontract or damages or any claim or cause of action based on breaches other than failure to achieve at the due time the Guaranteed Completion Date set out in Attachment 2-1. 2.10 Force Majeure 2.10.1 (a) The expression “Force Majeure” means any event or circumstance that is not reasonably foreseeable or, if reasonably foreseeable, is beyond the control and without the fault or negligence of the Party claiming Force Majeure (acting and having acted as a Reasonable and Prudent Person) and, in either case, that would make impossible (the term “impossible” in this context and for these purposes includes impracticability because of extreme and highly unreasonable difficulty, expense, injury or loss involved) the performance of all or some of its obligations hereunder, which failure in performance could not have been prevented or overcome by the exercise by it of the standard of a Reasonable and Prudent Person. (b) Subject to the conditions of, and without prejudice to the generality of, Section 2.10.1(a), “any event or circumstance” referred to therein includes: (i) strikes, lockouts, labour or other industrial disturbances (including sabotage), except as provided in Section 2.10.4(i); (ii) acts of God, or operation of the forces of nature that is unforeseeable; (iii) epidemics and quarantine restrictions; Page 27 of 90
    • Vietsovpetro Draft contract (iv) landslides, earthquakes, fires, washouts, floods, and explosions; (v) acts of Governmental Authority, acts of war or the public enemy, including blockades, insurrections, revolution, terrorism, piracy, riots, civil disturbances, arrests and restraints of rulers and peoples, or conditions arising out of or attributable to war (declared or undeclared); (vi) failure in performance by a Subcontractor or Supplier resulting from such Subcontractor or Supplier itself being affected by Force Majeure; (vii) failure in performance by a VIETSOVPETRO subcontractor or supplier resulting from such subcontractor or supplier itself being affected by Force Majeure; and (viii) failure in performance by Company resulting from the Company itself being affected by Force Majeure. 2.10.2 Subject to the provisions of this Section 2.10, neither Party shall be liable to the other for any failure to fulfill any obligation under this Subcontract to the extent it is prevented from or delayed in performing such obligation by Force Majeure. (For the purposes of this Section 2.10 the words “inability” and “unable” shall be construed to mean prevented or delayed.). 2.10.3 A Party‟s inability or failure to pay money when due hereunder shall not be treated as Force Majeure. 2.10.4 Notwithstanding anything in Sections 2.10.1 and 2.10.2, the following events or circumstances giving rise to a Party‟s or any Subcontractor‟s or Supplier‟s inability or failure to perform shall not be treated or construed as Force Majeure: (a) if the inability was primarily caused by lack of finances of the Person claiming the occurrence of Force Majeure; or by the bankruptcy, insolvency or the like of any Subcontractor or Supplier, or of any of VIETSOVPETRO‟s other contractors and Company‟s other contractors; (b) if the failure was primarily caused by the entity‟s inability to make any payment in US Dollars or other applicable currency; (c) if the inability was primarily caused by general economic or market conditions including without limitation recession, depression, inflation, deflation, exchange rate fluctuations, availability of foreign exchange funds or changes in prices or any other event that merely makes performance uneconomic or commercially impracticable; (d) the late delivery of SUBCONTRACTOR‟s Supply or SUBCONTRACTOR‟s Spread for any reason that is not otherwise Force Majeure; (e) the late performance by any entity caused by such entity‟s failure to engage qualified Subcontractors and/ or Suppliers who have sufficient capacity or to hire an adequate number of personnel or labour; (f) delays resulting from inadequacy of SUBCONTRACTOR‟s Spread or achieving less than planned productivity or experiencing harder or softer than expected ground, seabed or soil conditions during piling or similar operations; Page 28 of 90
    • Vietsovpetro Draft contract (g) delays resulting from adverse weather conditions (other than in respect of operation of the forces of nature that is unforeseeable pursuant to Section 2.10.1(b)) or unfavourable ground, seabed, soil, current, tidal or sea conditions, seabed obstructions, or other similar adverse conditions; (h) delays resulting from the presence at any Site of other contractors or Third Parties; (i) strikes or lockouts, labour or other industrial disturbances (including sabotage) involving a Party‟s and/ or Subcontractor‟s and/ or Supplier‟s own employees, except for regional, national or industry-wide strikes, labour or other industrial disturbances not attributable to such Party and/ or Subcontractor and/ or Supplier; (j) delays in obtaining approval for importation of SUBCONTRACTOR‟s Supply, Subcontract Objects and/ or SUBCONTRACTOR‟s Spread, unless the Person affected has been a Reasonable and Prudent Person in applying for such approval; (k) the withdrawal or expiration of, or failure to obtain, unless the Person affected has acted as a Reasonable and Prudent Person, any necessary consent, confirmation, authorization or other approval of any Governmental Authority which the entity, acting as a Reasonable and Prudent Person, can apply for and obtain, maintain or extend or could have applied for and obtained, maintained or extended; (l) any event or circumstance comprising, or resulting from, any Willful Misconduct by SUBCONTRACTOR Group, in the case of Force Majeure relief claimed by SUBCONTRACTOR, or by VIETSOVPETRO Group, in the case of Force Majeure relief claimed by VIETSOVPETRO, (in either case, in the performance of this Subcontract or otherwise); (m) the imposition of sanctions by any legitimate Governmental Authority due primarily to the failure of SUBCONTRACTOR Group, in the case of Force Majeure relief claimed by SUBCONTRACTOR, or of VIETSOVPETRO Group, in the case of Force Majeure relief claimed by VIETSOVPETRO, to comply with any Applicable Law; or (n) any occurrence that a Party claims as Force Majeure unless that Party shall have complied with the notice requirements set forth in Section 2.10.5. 2.10.5 A Party (the “Affected Party”) intending to seek relief under this Section 2.10 shall give notice (the “Force Majeure Estimate”) to the other Party (the “Non-Affected Party”) at each of the following times: (a) as soon as practicable but in any event within ten (10) days of the day (the “Relevant Day”) upon which the Party first knew or ought reasonably to have known of the inability to fulfill an obligation for which relief is sought hereunder; (b) at the end of each subsequent period of seven (7) days; (c) as soon as reasonably practicable whenever the Affected Party‟s bona fide estimate of the duration of the event or circumstance of Force Majeure changes; and (d) as soon as reasonably practicable when the Affected Party anticipates that it will be able to resume performance of its obligations under this Subcontract. 2.10.6 The initial Force Majeure Estimate given under Section 2.10.5 shall contain the following information relating to the event or circumstances of Force Majeure: Page 29 of 90
    • Vietsovpetro Draft contract (a) particulars of the occurrence; and (b) the Affected Party‟s bona fide estimate of its expected duration from the Relevant Day, the date that full performance will be resumed, and the expected extent of the Affected Party‟s inability to perform; and to the extent known or then reasonably ascertainable: (c) the reasons for the occurrence; (d) the actions which the Affected Party, acting as a Reasonable and Prudent Person, would take to remedy the Force Majeure event or circumstance and its bona fide estimate of the expected schedule thereof; and (e) the Affected Party‟s bona fide estimate of the date or dates of any incremental (less than full) increase or resumption of performance. Each subsequent Force Majeure Estimate shall contain any of the above information not previously notified, a full report confirming or updating and amplifying the information contained in previous Force Majeure Estimates, and such further information as the Non-Affected Party may reasonably require. 2.10.7 Upon request, an Affected Party shall, as soon as practicable, give or procure access, insofar as it is reasonably able to do so, for a reasonable number of representatives of the Non-Affected Party to examine, at the Non-Affected Party‟s sole risk and cost, the scene of the event or circumstance which gave rise to the inability to perform. 2.10.8 When the Affected Party gives notice that it anticipates that it will be able to resume performance of its obligations under this Subcontract, the Parties shall co-operate to accomplish any necessary activities during such notice period to enable resumption of full performance. 2.10.9 If an event or circumstance of Force Majeure occurs, each Affected Party shall as soon as reasonably practicable take all necessary steps as may be reasonably practicable in accordance with the standard of a Reasonable and Prudent Person to remedy the inability to perform and resume full and proper performance hereunder. Relief under this Section 2.10 shall cease to be available to a Party from the time when such Party ought to have commenced taking such steps. 2.10.10 (a) If any occurrence of Force Majeure causes a prolonged delay in performing the Work, or if an interruption in the Work through a Force Majeure occurrence may reasonably be anticipated to continue for a prolonged period, VIETSOVPETRO may terminate this Subcontract in whole or in part. Such termination shall not give rise to any claim for compensation other than the same compensation that SUBCONTRACTOR would have been entitled to receive under Section 2.18.7 if VIETSOVPETRO had terminated this Subcontract in whole or in part for its convenience, but excluding any termination fee specified in Section 2.18.7(c)(i) where SUBCONTRACTOR is the Affected Party. The meaning of “prolonged” in this Section 2.10.10 shall depend on the nature of the Work and the effect of the delay in or interruption of the Work. Within this context, a delay of less than thirty (30) consecutive days might be “prolonged,” but any delay of thirty (30) consecutive days or more shall in any event be deemed to be “prolonged” for purposes of this Section 2.10.10. (b) Without prejudice to Section 2.10.11, if any occurrence of Force Majeure causes a delay of sixty (60) consecutive days or more in performing the Work or any material part thereof, SUBCONTRACTOR may notify VIETSOVPETRO that SUBCONTRACTOR will terminate Page 30 of 90
    • Vietsovpetro Draft contract the Subcontract or the relevant material part thereof unless VIETSOVPETRO agrees to suspend the Work or the relevant material part thereof pursuant to Section 2.8.1(a) within thirty (30) days after VIETSOVPETRO‟s receipt of SUBCONTRACTOR‟s notification. Such termination shall not give rise to any claim for compensation other than the same compensation that SUBCONTRACTOR would have been entitled to receive under Section 2.18.7 if VIETSOVPETRO had terminated this Subcontract in whole or in part for its convenience, but excluding any termination fee specified in Section 2.18.7(c)(i) where SUBCONTRACTOR is the Affected Party. 2.10.11 (a) If any occurrence of Force Majeure causes a delay in performing the Work but SUBCONTRACTOR‟s Spread remains capable of performing work: (i) SUBCONTRACTOR may demobilize all or part of SUBCONTRACTOR‟s Spread in order to meet SUBCONTRACTOR‟s pre-existing contractual obligations to others, subject to SUBCONTRACTOR securing VIETSOVPETRO‟s prior written consent (such consent not to be unreasonably withheld) (the “Demobilization Consent”), and to mutual agreement by the Parties on a plan for remobilization. Such demobilization and remobilization shall be at no charge to VIETSOVPETRO. (ii) If VIETSOVPETRO does not give its Demobilization Consent when requested by SUBCONTRACTOR to do so pursuant to Section 2.10.11(a)(i) when an occurrence of Force Majeure has lasted not less than fourteen (14) Days where SUBCONTRACTOR is the Affected Party, or not less than seven (7) Days where SUBCONTRACTOR is the Non-Affected Party, SUBCONTRACTOR may notify VIETSOVPETRO that SUBCONTRACTOR intends to terminate this Subcontract seven (7) Days after VIETSOVPETRO‟s receipt of such notice unless VIETSOVPETRO gives its Demobilization Consent or suspends SUBCONTRACTOR‟s performance pursuant to Section 2.8.1 within such seven (7) Day period. If VIETSOVPETRO does so suspend SUBCONTRACTOR‟s performance, the amounts payable by VIETSOVPETRO to SUBCONTRACTOR for the first ninety (90) Days of such suspension shall be the amounts payable pursuant to Section 2.8.1. Upon the expiry of the ninety (90) Day period, SUBCONTRACTOR shall be entitled to terminate the Subcontract with written notice to VIETSOVPETRO. (iii) As part of the procedure described in Section 2.10.11(a)(i), SUBCONTRACTOR must submit to VIETSOVPETRO a plan for remobilization which shall include an estimate of the time period required for SUBCONTRACTOR‟s remobilization taking into account such other contractual obligations and such other information as VIETSOVPETRO shall reasonably request to evaluate such request fully. If VIETSOVPETRO gives its Demobilization Consent and the Parties mutually agree on a plan for remobilization, SUBCONTRACTOR shall not be entitled thereafter to terminate this Subcontract pursuant to this Section as a result of such Force Majeure. Furthermore if, upon the date that SUBCONTRACTOR becomes ready to carry out its agreed remobilization plan, it is unable to do so because of the continued existence of such Force Majeure, the relevant part of the Work shall be deemed to have been suspended pursuant to Section 2.8.1. The period of such suspension shall be until SUBCONTRACTOR eventually begins remobilization, or until SUBCONTRACTOR (subject to VIETSOVPETRO‟s consent) undertakes further fulfilment of SUBCONTRACTOR‟s contractual obligations to others prior to remobilization to resume the Work. (iv) If VIETSOVPETRO, pursuant to Section 2.10.11(a)(ii), does not give its Demobilization Consent or suspend SUBCONTRACTOR‟s performance, SUBCONTRACTOR shall be entitled to terminate this Subcontract and shall be entitled Page 31 of 90
    • Vietsovpetro Draft contract to the same compensation as provided in Section 2.10.10, SUBCONTRACTOR not being entitled to the cancellation fee described in Section 2.18.7 where SUBCONTRACTOR is the Affected Party. In addition to the foregoing, VIETSOVPETRO shall act reasonably in allowing SUBCONTRACTOR to demobilize during a Force Majeure occurrence any part of SUBCONTRACTOR‟s Spread not performing activities on the critical path of the Subcontract Schedule; or for which a satisfactory substitute would be readily available when required. (b) If any occurrence of Force Majeure causes a delay in performing the Work and SUBCONTRACTOR‟s Spread is affected to the extent that it is not capable of performing the Work, but remains capable of performing other work, SUBCONTRACTOR may (absent any pre-existing contractual obligations to others that would invoke the provisions of Section 2.10.11(a)(i)), at any time after the expiration of forty-five (45) Days or more in aggregate of Force Majeure, notify VIETSOVPETRO that SUBCONTRACTOR intends to terminate this Subcontract ten (10) Days after VIETSOVPETRO‟s receipt of such notice unless VIETSOVPETRO suspends the relevant part of the Work pursuant to Section 2.8.1 within such 10 (ten) Day period. Additionally, during such occurrence of Force Majeure, SUBCONTRACTOR may demobilize all or any part of SUBCONTRACTOR‟s Spread in accordance with Section 2.10.11(a). In such case, any suspension amounts payable shall exclude any items that have been demobilized. (c) If VIETSOVPETRO does not suspend the relevant part of the Work pursuant to Section 2.10.11(b), SUBCONTRACTOR shall be entitled to terminate this Subcontract and shall be entitled to the same compensation as provided in Section 2.10.10. 2.10.12 SUBCONTRACTOR shall be entitled by means of a Change Order Authorization to appropriate adjustment to the Subcontract Schedule, including extension, if any, to the Guaranteed Completion Date, to the extent Force Majeure directly affects the critical path for the Work. Provided, however, that there shall be no adjustment of the Subcontract Schedule to the extent that and for so long as there is any concurrent delay event due to pre-existing matters within SUBCONTRACTOR‟s risk or responsibility under the Subcontract. SUBCONTRACTOR shall not be entitled to any increase in the Subcontract Price, except only as provided in Section 2.10.11, as a result of Force Majeure. 2.11 Inspection 2.11.1 Notwithstanding any VIETSOVPETRO, Company, Governmental Authority or other third party inspection, testing or witnessing, SUBCONTRACTOR shall be responsible for quality control, quality surveillance/ inspection, testing, and quality assurance of the Work to verify and be able to substantiate compliance with the requirements of this Subcontract. SUBCONTRACTOR shall carry out its quality management activities in accordance with its Subcontract-specific quality plan for the Work, which shall be subject to VIETSOVPETRO‟s review and acceptance. 2.11.2 (a) SUBCONTRACTOR‟s obligations include cooperating fully with regard to any inspection or certification to be performed by Company‟s Certification Contractor and the Government of Vietnam to satisfy the requirements of any Governmental Authority in relation to SUBCONTRACTOR‟s Supply, the Contract Objects and/or Subcontract Objects where applicable or the Work. (b) VIETSOVPETRO will pay for its own account all customary charges by any Government of Vietnam in relation to the obtaining from such entities of permits, certificates, and approvals in relation to the Contract Objects and/or Subcontract Objects and the Work. SUBCONTRACTOR shall reimburse VIETSOVPETRO, on VIETSOVPETRO‟s first written request, for charges Page 32 of 90
    • Vietsovpetro Draft contract made the Government of Vietnam, or incurred by VIETSOVPETRO, in respect of unsatisfactory inspections, witnessing of tests and the like that need to be repeated for such reasons as SUBCONTRACTOR Group‟s defective performance or lack of preparedness. 2.11.3 (a) Company or VIETSOVPETRO will enter into its own contract with a Marine Warranty Surveyor (MWS), and advise SUBCONTRACTOR accordingly. VIETSOVPETRO shall advise SUBCONTRACTOR as early as reasonably practicable of the specific operations (such as functional tests of critical equipment to be used for marine installation operations, load out, tow out, lifting and other marine operations) that will be subject to review and certification by the MWS, including any needed to comply with the warranty provisions of any applicable insurance. SUBCONTRACTOR‟s obligations set out in this Section 2.11.3 apply regardless of whether Company or VIETSOVPETRO enters into the contract or subcontract with the MWS. (b) SUBCONTRACTOR shall promptly make available to the MWS all information requested by the MWS to allow full inspection of vessels, plant and equipment; attendance by the MWS at functional tests of critical equipment to be used for marine installation operations; and development by the MWS of recommendations and requirements. (c) Approvals, recommendations, weather and other clearances, and the like given by the MWS to SUBCONTRACTOR shall be forwarded promptly to VIETSOVPETRO. Certificates and other approval documents shall be copied to VIETSOVPETRO as soon as possible, but no later than twenty-four (24) hours after the time of issue by the MWS. (d) SUBCONTRACTOR must obtain the applicable certificate(s) from the MWS before proceeding with any operation that is subject to certification or approval by the MWS under the warranty provisions of any applicable Company insurance, and shall comply fully with any conditions specified in each certificate. SUBCONTRACTOR shall not commence any load out, tow out, lift, or other operation that is subject to certification by the MWS before it has obtained the relevant certificate or other approval in writing from the MWS for such load out, tow out, lift, or other operation to proceed. (e) SUBCONTRACTOR‟s failure to obtain the requisite MWS certificate/ approval in writing in respect of an operation subject to certification by the MWS shall be deemed to constitute a serious default by SUBCONTRACTOR, and shall entitle VIETSOVPETRO to terminate the Subcontract in accordance with Section 2.18.1. Furthermore, notwithstanding the provisions of Section 2.15, if any member of SUBCONTRACTOR Group fails to obtain the requisite written approval of the Marine Warranty Surveyor before proceeding with activities or operations that are subject to such approval, or fails to comply with any conditions specified in such approval, VIETSOVPETRO shall be entitled to terminate the Subcontract immediately pursuant to Section 2.18.1, and the indemnities given in favour of SUBCONTRACTOR and SUBCONTRACTOR Group in Section 2.15 shall not apply to the extent that such failure results in the invalidation of Company Group insurances that would otherwise support such indemnities. (f) SUBCONTRACTOR shall bear all SUBCONTRACTOR Group‟s costs incurred in complying with any requirements of the MWS and these are included in the Lump Sum Price, Unit Rates and Percentages. 2.11.4 Not used. 2.11.5 (a) At any time, VIETSOVPETRO and its representatives, Company and its representatives, any representatives of any Governmental Authority, Company‟s Certification Contractor, and any third party inspection personnel acting on behalf of a Governmental Authority shall have the right, but not the obligation, to maintain a reasonable presence at any Site and to inspect, test, or Page 33 of 90
    • Vietsovpetro Draft contract witness any portion of the Work at any Site, including any part of SUBCONTRACTOR‟s Supply. SUBCONTRACTOR shall co-operate fully with VIETSOVPETRO, Company and such representatives in such inspections, tests and witnessing, which shall be carried out without undue delay, and shall provide Company, VIETSOVPETRO and such representatives with test specimens, documentation, test equipment, testing areas, support services and utilities for such purposes. (b) Prior to any testing to be witnessed by Company, VIETSOVPETRO or by or on behalf of any Governmental Authority, SUBCONTRACTOR shall carry out checks, inspections, and pretesting to ensure that the witnessed testing is not delayed or prolonged by problems that could and should have been identified and rectified beforehand. (c) VIETSOVPETRO and its representatives and Company and its representatives shall also have free access to all Sites and to SUBCONTRACTOR‟s Spread used in performing the Work for the purposes of observing, inspecting, witnessing, photographing, filming, video recording, or otherwise monitoring or recording the performance of the Work. (d) SUBCONTRACTOR shall provide the Marine Warranty Surveyor, Company‟s marine surveyor, Company‟s insurers‟ representatives, VIETSOVPETRO‟s marine surveyor, personnel of Company‟s Certification Contractor, any Governmental Authorities, any entities appointed by Company‟s insurers, and any inspectors acting for any of them with full and timely access to the Work to permit the timely discharge of their duties. SUBCONTRACTOR shall provide such persons with such support services, assistance and documentation as they may reasonably request. 2.11.6 VIETSOVPETRO may require inspections, tests or witnessing that are in addition to inspections, tests or witnessing specified in the Subcontract. If the results of such inspections, tests, or witnessing verify that the Work so examined is in compliance with the Subcontract, SUBCONTRACTOR shall be entitled by means of a Change Order Authorization to be reimbursed for the documented costs of said additional inspections or tests. Such costs shall include those of any verifiable standby time unavoidably sustained by SUBCONTRACTOR, Subcontractors or Suppliers as a result of such inspections, tests or witnessing at the applicable rates in Section 5.0. Any impact on the Guaranteed Completion Date shall be the subject of a Change Order Authorization. If the Work examined is shown to be not in compliance with the Subcontract (or if VIETSOVPETRO had reasonable grounds to require the additional inspections, tests or witnessing because related Work had been found not to be in compliance with the Subcontract), the cost and schedule effects of such inspections, tests or witnessing shall be borne by SUBCONTRACTOR. 2.11.7 (a) When SUBCONTRACTOR has completed an item of Work for which VIETSOVPETRO‟s and/ or Company‟s Certification Contractor‟s inspection and approval is an identified requirement under this Subcontract, SUBCONTRACTOR shall notify VIETSOVPETRO and/ or Company‟s Certification Contractor and a joint inspection will be made by the representatives of SUBCONTRACTOR and VIETSOVPETRO and/ or Company‟s Certification Contractor. SUBCONTRACTOR shall give VIETSOVPETRO and/ or Company‟s Certification Contractor adequate notice in writing of such events and shall allow a reasonable period of time for the performance of such inspections, consistent with their type and complexity. If the item of Work scheduled for inspection is delayed and not complete at the time previously notified, SUBCONTRACTOR shall notify VIETSOVPETRO and/ or Company‟s Certification Contractor accordingly and keep VIETSOVPETRO and/ or Company‟s Certification Contractor fully informed of the status of the Work prior to scheduling an inspection. If VIETSOVPETRO and/ or Company‟s Certification Contractor, having been given due notice, fails to attend a joint inspection, SUBCONTRACTOR shall be entitled to proceed with the Work unless VIETSOVPETRO promptly notifies SUBCONTRACTOR that the inspection needs to be Page 34 of 90
    • Vietsovpetro Draft contract rescheduled. VIETSOVPETRO shall issue a Change Order Authorization if it requires the inspection to be rescheduled. (b) (c) 2.12 At the end of such inspection, VIETSOVPETRO will notify SUBCONTRACTOR in writing whether or not the inspected Work meets Subcontract requirements and, if not, shall include a comprehensive exceptions list specifying in reasonable detail uncompleted or deficient Work. SUBCONTRACTOR shall undertake the completion or correction of such exceptions with all due dispatch and without cost to VIETSOVPETRO until VIETSOVPETRO shall have issued the unqualified written notice referred to in the preceding sentence. Any such periodic inspections shall not relieve SUBCONTRACTOR of its obligation to achieve Provisional Acceptance and Final Acceptance nor relieve SUBCONTRACTOR from its warranty, indemnification and other responsibilities defined in this Subcontract. Loadout, Sailaway, Handover, Provisional Acceptance and Final Acceptance 2.12.1 (a) A NORL will be issued by the SUBCONTRACTOR Representative to the VIETSOVPETRO Representative at the Loading Port when the barge unit of the SUBCONTRACTOR‟s Spread completes Mobilization and the barge is secured alongside the designated Loading berth or quay in a state of condition that will permit a member of VIETSOVPETRO Group to commence load out preparations aboard such barge. Only items of Work not affecting safe performance of load out preparations by a member of VIETSOVPETRO Group may remain and if such is the case, such items shall be indicated in a punch list attached to the NORL. (b) Within 24 hours after his receipt of the NORL, the VIETSOVPETRO Representative shall either sign the NORL as submitted and return it to the SUBCONTRACTOR Representative at the Loading Port to signify VIETSOVPETRO‟s agreement that the barge unit of the SUBCONTRACTOR‟s Spread is ready to be made available to a member of VIETSOVPETRO Group for Loading related activities, or return the NORL unsigned with an attached comprehensive listing furnished by VIETSOVPETRO specifying in reasonable detail all deficiencies or incompleteness of the barge unit, rectification or completion of which is, in the reasonable opinion of VIETSOVPETRO, prerequisite to a member of VIETSOVPETRO Group being given access to the barge unit for commencing load out preparations and subsequent load out of the VIETSOVPETRO Contract Objects (such listing may be referred to as a “Loading Exceptions List”). Should the NORL, either signed or unsigned with an attached Loading Exceptions List, not be received by the SUBCONTRACTOR Representative within 24 hours after the VIETSOVPETRO Representative‟s receipt of the NORL or until the member of VIETSOVPETRO Group commencing load out preparations on the barge, the barge unit of the SUBCONTRACTOR‟s Spread will be deemed to be ready for Loading. (c) If the VIETSOVPETRO Representative timely returns the NORL unsigned to the SUBCONTRACTOR Representative with an attached Loading Exceptions List, and the items so noted are incomplete or defective, SUBCONTRACTOR, as a matter of urgent priority and at no additional charge to VIETSOVPETRO, shall rectify the defects or complete the Work itemized in the Loading Exceptions List and resubmit the NORL to the VIETSOVPETRO Representative. As soon as practicable thereafter, and in any case within 6 hours of his receipt thereof, the VIETSOVPETRO Representative shall either (i) sign and return the NORL to SUBCONTRACTOR to signify VIETSOVPETRO‟s agreement that the barge unit of the SUBCONTRACTOR‟s Spread is Ready for Loading, or Page 35 of 90
    • Vietsovpetro Draft contract (ii) reject SUBCONTRACTOR's condition assessment by returning the resubmitted NORL to SUBCONTRACTOR unsigned with an attached updated revision of the original Loading Exceptions List specifying in reasonable detail those previously noted essential items of incomplete or defective Work that have not yet been completed or in respect of which SUBCONTRACTOR‟s corrections are inadequate. This procedure shall continue until the NORL is approved or is deemed to have been approved by the VIETSOVPETRO Representative; provided, however, that if member of VIETSOVPETRO Group starts performing load out preparations aboard the barge unit such action shall support a conclusive presumption that the barge unit of the SUBCONTRACTOR‟s Spread has achieved a state of readiness to Load irrespective of whether VIETSOVPETRO has approved the NORL. (d) The NORL procedure set out in this Section 2.12.1 shall be followed for each of the Subcontract Objects and/or other VIETSOVPETRO Contract Objects where applicable. 2.12.2 (a) SUBCONTRACTOR shall prepare for acceptance and signature by VIETSOVPETRO certificates for applicable Subcontract Object and/or VIETSOVPETRO Contract Object in the form set forth as Attachment 2-5 (each a “Sailaway Certificate”) certifying that SUBCONTRACTOR has fulfilled all the criteria set out in Attachment 2-3 for the applicable Subcontract Objects and/or VIETSOVPETRO Contract Object. VIETSOVPETRO and SUBCONTRACTOR shall further develop or modify such criteria as necessary, any such development or modification to be confirmed in writing, ensuring the criteria are clearly defined, objective, and fully mutually understood. (b) SUBCONTRACTOR shall not proceed with sailaway of the applicable Subcontract Objects and/or VIETSOVPETRO Contract Object until it has received the applicable Sailaway Certificate duly approved and signed by VIETSOVPETRO and VIETSOVPETRO has likewise received the applicable sailaway certificate under the Contract duly approved and signed by Company. (c) Unless VIETSOVPETRO determines that it disagrees with each such certificate (and promptly notifies SUBCONTRACTOR in writing of such disagreement), VIETSOVPETRO shall promptly confirm that SUBCONTRACTOR may proceed with the relevant sailaway by signing the applicable Sailaway Certificate. VIETSOVPETRO‟s acceptance of the Sailaway Certificate shall be deemed to have occurred on the hour and date specified on the approved Sailaway Certificate. (d) An instruction from the VIETSOVPETRO Representative or his delegate at the Loading Port to the SUBCONTRACTOR Representative or his delegate at the Loading Port directing the SUBCONTRACTOR‟s Spread to depart the Loading Port with the VIETSOVPETRO Contract Object aboard shall support a conclusive presumption that the Sailaway Certificate for that Contract Object/Subcontract Object has been issued. (c) SUBCONTRACTOR is responsible to have made all necessary preparations for SUBCONTRACTOR‟s Spread sail away by the date and hour the Sailaway Certificate is issued in order that the SUBCONTRACTOR‟s Spread is able to commence transportation without delay at any time of the day and on any day of the week. (f) Without prejudice to Section 2.13 and Section 2.15, VIETSOVPETRO shall have care, custody and control of the VIETSOVPETRO Contract Objects until sailaway and SUBCONTRACTOR shall assume care, custody and control of each of such Contract Objects upon and after sailaway. Page 36 of 90
    • Vietsovpetro Draft contract (g) The Sailaway procedure set out in this Section 2.12.2 shall be followed for each of the Subcontract Objects and other VIETSOVPETRO Contract Objects where applicable. 2.12.3 (a) As described in Attachment 2-3, VIETSOVPETRO shall be entitled to take over custody, control and care from SUBCONTRACTOR of individual Contract Objects and/or Subcontract Objects, including the VIETSOVPETRO Contract Objects that SUBCONTRACTOR has taken over custody, control and care pursuant to Section 2.12.2(f), and commence usage thereof, prior to Provisional Acceptance. In each such instance, SUBCONTRACTOR shall prepare and present for VIETSOVPETRO‟s acceptance a Handover Certificate in the form set forth as Attachment 26 (a “Handover Certificate”) to record the relevant details, including: (i) an itemized description of the particular Contract Objects and/or Subcontract Objects that are the subject of the Handover; (ii) the date and time at which Handover occurred. In instances where VIETSOVPETRO and/or Company elects to make substantial usage of a particular Contract Object and/or Subcontract Objects, Handover of that particular Contract Object and/or Subcontract Objects shall occur prior to VIETSOVPETRO and/or Company commencing such substantial usage. (b) At least four (04) Business Days before a planned Handover, SUBCONTRACTOR shall present to VIETSOVPETRO a comprehensive checklist of the items remaining to be completed by SUBCONTRACTOR to achieve the Handover, together with a list of items remaining to be completed by SUBCONTRACTOR that SUBCONTRACTOR proposes to deal with as Punch list items. SUBCONTRACTOR shall revise such checklist and proposed Punch list to take account of any VIETSOVPETRO comments. The Handover Certificate shall have as an attachment a Punch list prepared by SUBCONTRACTOR based on the previously presented checklist and proposed Punch list, and joint inspections carried out by SUBCONTRACTOR and VIETSOVPETRO of the relevant Contract Object and/or Subcontract Object, and certified by SUBCONTRACTOR as true and correct, for VIETSOVPETRO‟s acceptance. The Punch list shall specify any items remaining to be completed by SUBCONTRACTOR after Handover, with information on when they are to be completed. If there are no such items, the Handover Certificate shall be annotated accordingly. Punch list items shall be subject to separate written acceptance by VIETSOVPETRO on their completion. SUBCONTRACTOR must complete prior to Handover, and not as Punch list items, all items of Work essential in VIETSOVPETRO‟s sole judgment, to safe and efficient operation, or succeeding use after Handover, of the Contract Objects and/or Subcontract Objects. (c) Unless VIETSOVPETRO determines within seven (7) Business Days of VIETSOVPETRO‟s receipt of a Handover Certificate that it disagrees with such certificate (and notifies SUBCONTRACTOR in writing of such disagreement), VIETSOVPETRO shall take over the relevant Contract Object and/or Subcontract Object by the end of such seven (7) Business Day period, accepting transfer of custody, control and care thereof from SUBCONTRACTOR, and shall sign the Handover Certificate accordingly to confirm such Handover. (d) Provided VIETSOVPETRO shall have accepted the Handover Certificate by signature thereof, Handover shall be deemed to have occurred on the hour and date specified in the Handover Certificate as the date when Handover actually occurred. Handover shall be without prejudice to Provisional Acceptance. VIETSOVPETRO‟s acceptance of a Handover Certificate shall not prejudice VIETSOVPETRO‟s right to require SUBCONTRACTOR to remedy any subsequently discovered defect or non-conformance, or omission from the relevant Punch list. Such Page 37 of 90
    • Vietsovpetro Draft contract remediation of any items notified to SUBCONTRACTOR before Final Acceptance shall be carried out as part of the Work to be completed prior to the Warranty Period for the items concerned, and not as Warranty Work. (e) (i) If VIETSOVPETRO finds any material item of incomplete Work, material defect or material non-conformance, VIETSOVPETRO shall be entitled, at any time within seven (7) Business Days after its acceptance of a Handover Certificate, but not after Provisional Acceptance has occurred, to require SUBCONTRACTOR immediately to resume custody, control and care of the Contract Object and/or Subcontract Object referred to in such Handover Certificate. In such event, SUBCONTRACTOR shall present a new Handover Certificate for VIETSOVPETRO‟s acceptance when SUBCONTRACTOR has completed all such material items of incomplete Work and remedied all such material defects and material non-conformances. (ii) If VIETSOVPETRO does not require SUBCONTRACTOR to resume custody, control and care of the system or Contract Object and/or Subcontract Object, SUBCONTRACTOR shall remedy the material items of incomplete Work, material defects, material non-conformances, at a time convenient for VIETSOVPETRO and without undue delay. Such remediation by SUBCONTRACTOR shall be carried out as part of the Work to be completed prior to the Warranty Period for the items concerned, and not as Warranty Work. (f) The Handover procedure set out in this Section 2.12.3 shall be followed for SVSW Topside Jacket and Pipelines and other VIETSOVPETRO Contract Objects where applicable. The Punch list (prepared by SUBCONTRACTOR based on the previously presented checklist and proposed Punch list, joint inspections by SUBCONTRACTOR and VIETSOVPETRO) accompanying the Handover Certificate and identifying uncompleted or deficient Work shall only relate to nonessential items and shall not include any items of Work essential, in VIETSOVPETRO‟s sole judgment, to the safe operation or next succeeding use of the Contract Objects and/or Subcontract Objects. 2.12.4 (a) Provisional acceptance by VIETSOVPETRO for the Work (“Provisional Acceptance”) shall occur upon delivery by SUBCONTRACTOR and acceptance and signature by VIETSOVPETRO of a certificate in the form set forth as Attachment 2-7 (the “Provisional Acceptance Certificate”) certifying that SUBCONTRACTOR has fulfilled all the criteria set out in Attachment 2-3 for achievement of Provisional Acceptance. VIETSOVPETRO and SUBCONTRACTOR shall further develop or modify such criteria as necessary, any such development or modification to be confirmed in writing, ensuring the criteria are clearly defined, objective, and fully mutually understood. There shall be a single Provisional Acceptance Certificate for the entire Work. (b) At least seven (07) Business Days before the anticipated date of Provisional Acceptance, SUBCONTRACTOR shall present to VIETSOVPETRO a comprehensive checklist of the items remaining to be completed by SUBCONTRACTOR to achieve Provisional Acceptance, together with a list of items remaining to be completed by SUBCONTRACTOR that SUBCONTRACTOR proposes to deal with as Punch list items. SUBCONTRACTOR shall revise such checklist and proposed Punch list to take account of any VIETSOVPETRO comments. Any Punch list (prepared by SUBCONTRACTOR based on the previously presented checklist and proposed Punch list, and joint inspections by SUBCONTRACTOR and VIETSOVPETRO) accompanying the Provisional Acceptance Certificate and identifying uncompleted or deficient Work shall only relate to non-essential items and shall not include any items of Work essential, in VIETSOVPETRO‟s sole judgment, to the safe operation or next succeeding use of the Contract Objects and/or Subcontract Objects. The Punch list shall specify Page 38 of 90
    • Vietsovpetro Draft contract when items are due to be completed. If there are no such items, the Provisional Acceptance Certificate shall be annotated accordingly. Punch list items shall be subject to separate written acceptance by VIETSOVPETRO on their completion. (c) Unless VIETSOVPETRO determines within seven (7) Business Days of VIETSOVPETRO‟s receipt of the Provisional Acceptance Certificate that it disagrees with such certificate (and notifies SUBCONTRACTOR in writing of such disagreement), VIETSOVPETRO shall confirm Provisional Acceptance by signing the Provisional Acceptance Certificate. (d) (i) If VIETSOVPETRO agrees that Provisional Acceptance has occurred, the effective date of Provisional Acceptance shall be the date VIETSOVPETRO signs the Provisional Acceptance Certificate. VIETSOVPETRO‟s signature of a Provisional Acceptance Certificate shall not prejudice VIETSOVPETRO‟s right to require SUBCONTRACTOR to remedy any subsequently discovered defect or non-conformance, or omission from the relevant Punch list. Such remediation of any items notified to SUBCONTRACTOR before Final Acceptance shall be carried out as part of the Work to be completed prior to the Warranty Period for the items concerned, and not as Warranty Work. (ii) If VIETSOVPETRO finds any material item of incomplete Work, material defect or material non-conformance that VIETSOVPETRO, in its sole judgment, considers essential items for the safe operation or next succeeding use of a Contract Object and/or Subcontract Object, VIETSOVPETRO shall be entitled at any time within the aforementioned seven (7) Business Days after its receipt of a Provisional Acceptance Certificate to require SUBCONTRACTOR immediately to resume custody, control and care of the Contract Objects and/or Subcontract Object(s) referred to in such Provisional Acceptance Certificate for purposes of completing all material items of incomplete Work and/ or remedying all material defects and material non-conformances. (iii) If VIETSOVPETRO does not require SUBCONTRACTOR to resume custody, control and care of the Contract Objects and/or Subcontract Objects that are the subject of a Provisional Acceptance Certificate, SUBCONTRACTOR shall remedy the material items of incomplete Work, material defects and material non conformances at a time convenient for VIETSOVPETRO and without undue delay. Such remediation shall be carried out as part of the Work to be completed prior to the Warranty Period for the items concerned, and not as Warranty Work. 2.12.5 Final acceptance by VIETSOVPETRO for the Work (“Final Acceptance”) shall occur upon the delivery by SUBCONTRACTOR and acceptance and signature by VIETSOVPETRO of a certificate substantially in the form set forth as Attachment 2-8 (the “Final Acceptance Certificate”) certifying that SUBCONTRACTOR has fulfilled all the criteria set out in Attachment 2-3 for achievement of Final Acceptance. There shall be a single Final Acceptance Certificate for the entire Work. The Final Acceptance Certificate shall also apply to all SUBCONTRACTOR‟s general obligations to be performed and completed under the Subcontract, except those such as Warranty obligations that continue after Final Acceptance in accordance with the Subcontract. 2.12.6 (a) At least twenty (20) Business Days before the anticipated date of Final Acceptance, SUBCONTRACTOR shall present to VIETSOVPETRO a comprehensive checklist of the items remaining to be completed by SUBCONTRACTOR to achieve Final Acceptance. SUBCONTRACTOR shall revise such checklist to take account of any VIETSOVPETRO comments. (b) Within fifteen (15) Business Days of receipt of the Final Acceptance Certificate from SUBCONTRACTOR, VIETSOVPETRO shall advise SUBCONTRACTOR whether or not Page 39 of 90
    • Vietsovpetro Draft contract VIETSOVPETRO agrees that Final Acceptance has occurred. The Work must have achieved Provisional Acceptance prior to SUBCONTRACTOR applying for Final Acceptance. VIETSOVPETRO shall denote its agreement that Final Acceptance has occurred by signing the Final Acceptance Certificate. The effective date of Final Acceptance shall be the date VIETSOVPETRO signs the Final Acceptance Certificate. (c) If VIETSOVPETRO does not agree that Final Acceptance has occurred it shall state its reasons for such disagreement in reasonable detail in a written notice to SUBCONTRACTOR. SUBCONTRACTOR shall promptly take action on the matters addressed in such notice, and present a revised Final Acceptance Certificate to VIETSOVPETRO when it has done so. VIETSOVPETRO shall either confirm its agreement with the revised Final Acceptance Certificate in the manner described in Section 2.12.5(b), or shall state its reasons for continued disagreement in a written notice to SUBCONTRACTOR in the manner described in this Section 2.12.5(c). In the latter case, the process described in this Section 2.12.5(c) shall be repeated until VIETSOVPETRO signs the Final Acceptance Certificate. 2.12.7 Nothing expressed or implied herein shall be construed to prejudice or limit SUBCONTRACTOR‟s obligation to remedy all incomplete or nonconforming Work items and to achieve Final Acceptance. SUBCONTRACTOR is solely responsible for ensuring that its representations made in any certificate issued to VIETSOVPETRO pursuant to this Section 2.12 are true and correct. VIETSOVPETRO is entitled to rely on such representations, and shall have no obligation to verify their truthfulness and correctness. Any inspections, verification or other action that VIETSOVPETRO may choose to carry out shall not in any way prejudice or limit SUBCONTRACTOR‟s responsibilities and obligations under this Subcontract. 2.12.7 Nothing contained in this Section 2.12 shall be construed to preclude VIETSOVPETRO from electing to accept uncompleted, defective or nonconforming Work. If VIETSOVPETRO prefers to do so instead of requiring SUBCONTRACTOR to effect completion, removal and/ or correction thereof, VIETSOVPETRO and SUBCONTRACTOR shall determine the effects thereof on the Subcontract Price. A Change Order Authorization will be issued to reflect the appropriate and equitable reduction in the Subcontract Price as mutually agreed. 2.12.8 None of the inspections under Section 2.11, nor acceptance by VIETSOVPETRO of any mechanical completion certificate, Sailaway Certificate or Handover Certificate, nor the acceptance by VIETSOVPETRO of the Provisional Acceptance Certificate, nor the acceptance by VIETSOVPETRO of the Final Acceptance Certificate, shall relieve SUBCONTRACTOR from any warranty, indemnity or any other obligation under this Subcontract which, by its terms, survives such acceptance. 2.13 Warranty, Correction of Defects and Nonconforming Work 2.13.1 SUBCONTRACTOR warrants that it has relevant experience from the successful performance of similar work and specific expertise that will be utilized in the conduct of the Work, and SUBCONTRACTOR acknowledges that VIETSOVPETRO is entering into this Subcontract in reliance upon such warranty. 2.13.2 SUBCONTRACTOR expressly warrants and covenants that: (a) it will conduct the Work in a good workmanlike and diligent manner and that the Work shall comply fully with the requirements of this Subcontract; (b) all materials and equipment furnished by SUBCONTRACTOR as part of SUBCONTRACTOR‟s Supply shall be new, unused and free from defects in associated design, materials, and workmanship and shall have been produced, tested, and shipped in accordance with the provisions of this Subcontract; Page 40 of 90
    • Vietsovpetro Draft contract (c) SUBCONTRACTOR shall ensure project management, associated engineering, relevant required construction, installation, testing for the Subcontract Objects meet the requirements of the VIETSOVPETRO Supplied Data and other provisions of this Subcontract; and (d) the Contract Object and/or Subcontract Objects as applicable shall conform to Good Engineering and Operating Practices, be free from defects in SUBCONTRACTOR‟s Supply and from defective SUBCONTRACTOR Group workmanship and shall have been designed, constructed, transported, installed and tested by SUBCONTRACTOR all in accordance with the provisions of this Subcontract. 2.13.3 (a) SUBCONTRACTOR shall, at its own cost without limitation (subject to Section 2.33), promptly correct or reperform any part of the Work that is defective or not conforming to this Subcontract, regardless of: (i) (ii) (iii) the stage of completion of such Work; the time or place of discovery of such defects or non-conformances (but, with regard to defects or non-conformances discovered after commencement of the Warranty Period for the items concerned, within the Warranty Period or the Extended Warranty Period, if applicable); or any previous VIETSOVPETRO acceptance, through oversight or otherwise. (b) SUBCONTRACTOR‟s correction or reperformance of any Work pursuant to Section 2.13.3(a) shall include all repairs to and replacement of SUBCONTRACTOR‟s Supply and the Work to rectify defects in SUBCONTRACTOR‟s associated design, SUBCONTRACTOR‟s Supply or SUBCONTRACTOR Group workmanship; and performing such tests as VIETSOVPETRO may reasonably require to verify that such rectification complies with the requirements of the Subcontract. (c) SUBCONTRACTOR shall consult with VIETSOVPETRO and obtain VIETSOVPETRO‟s agreement to proposed rectification measures before carrying them out, except where the required rectification measures are explicitly specified in procedures or other documents that VIETSOVPETRO has already expressly approved or accepted. SUBCONTRACTOR shall promptly inform VIETSOVPETRO of the performance of any rectification measures. (d) (i) SUBCONTRACTOR‟s obligations under this Section 2.13.3 do not include any responsibility for rectifying or repairing defects in or unsuitability of VIETSOVPETRO Furnished Material or in work performed by VIETSOVPETRO and others for which SUBCONTRACTOR is not responsible, the effects of service conditions differing materially from those in the VIETSOVPETRO Supplied Data, improper or insufficient maintenance or operation by or on behalf of Company and/ or VIETSOVPETRO (including abnormal wear and tear attributable thereto), or normal wear and tear under normal usage. (ii) It is expressly agreed that SUBCONTRACTOR shall not use SUBCONTRACTOR‟s Supply or parts of the Contract Objects and/or Subcontract Objects for SUBCONTRACTOR‟s associated construction or other operations unless it has obtained VIETSOVPETRO‟s prior written approval for such use, such approval not to be unreasonably withheld. Examples of items to which this provision applies include tools accompanying equipment within SUBCONTRACTOR‟s Supply. SUBCONTRACTOR, at its own cost without limitation, shall refurbish to VIETSOVPETRO‟s satisfaction any applicable items following any such temporary usage; and shall ensure that such usage does not impair, or advance the expiry date of, Page 41 of 90
    • Vietsovpetro Draft contract any applicable Suppliers‟ warranties. SUBCONTRACTOR shall promptly replace, at its own cost without limitation, any items that cannot be satisfactorily refurbished. (e) (i) SUBCONTRACTOR shall bear all incidental costs, as defined in Section 2.13.3(e)(ii), arising in connection with or as a result of correction or reperformance of the Work pursuant to this Section 2.13. (ii) The term “incidental costs” means, for the purposes of this Section 2.13, costs (over and above the costs of correcting or reperforming any part of the Work that is defective or not conforming to the Subcontract) arising directly out of or in connection with the replacement or modification or rectification of any materials, equipment, or property necessary as a result of the defective performance of the Work, but excluding Consequential Losses. Examples of incidental costs include costs of dismantling to get access to defective or nonconforming Work, and subsequent reinstatement; SUBCONTRACTOR‟s costs of providing offshore accommodation in the absence of available VIETSOVPETRO accommodation; costs of temporary demobilization of VIETSOVPETRO personnel from offshore in order to make accommodation available for SUBCONTRACTOR personnel; and the costs of attendance of representatives of Governmental Authorities to verify the results of the replacement, modification or rectification activities performed by SUBCONTRACTOR. (iii) Provided that SUBCONTRACTOR diligently fulfils its obligations under this Section 2.13, VIETSOVPETRO shall not charge SUBCONTRACTOR for use, subject to availability, of VIETSOVPETRO‟s scheduled boat and helicopter services and offshore messing and accommodation services, nor for incidental assistance provided by VIETSOVPETRO‟s existing offshore workforce in relation to SUBCONTRACTOR‟s replacement, modification or rectification activities carried out pursuant to this Section 2.13 after Provisional Acceptance. 2.13.4 (a) If any part of the Work is discovered to be in a defective condition or not conforming to this Subcontract after Provisional Acceptance, such discovery shall not invalidate Provisional Acceptance. (b) If any warranty or undertaking set out in this Section 2.13 is breached, including discovery of a defect or non-conformance in the Work or SUBCONTRACTOR‟s Supply, and VIETSOVPETRO‟s written notice thereof to SUBCONTRACTOR is given before the end of the applicable Warranty Period or Extended Warranty Period, SUBCONTRACTOR shall immediately, at SUBCONTRACTOR‟s cost without limitation (subject to Section 2.33), remedy such breach, including rectifying any such defect or non-conformance. (c) In this regard, SUBCONTRACTOR shall carry out diligently and expeditiously such recovery, redesign, correction, repair, re-fabrication, re-supply, replacement, and reinstallation as is necessary to put the Work and SUBCONTRACTOR‟s Supply into the same satisfactory condition as should have existed, pursuant to this Subcontract, prior to discovery of the defect or non-conformance. (d) SUBCONTRACTOR shall take the actions described in this Section 2.13.4 without cost to VIETSOVPETRO, and shall bear all costs in relation thereto without limitation (subject to Section 2.33). (e) In any event, SUBCONTRACTOR shall begin corrective action in respect of the Work, subject to its obtaining VIETSOVPETRO‟s acceptance of proposed corrective action, as soon as reasonably possible after SUBCONTRACTOR receives notice of the defect or nonPage 42 of 90
    • Vietsovpetro Draft contract conformance. VIETSOVPETRO shall provide SUBCONTRACTOR with access to the Contract Objects and/or Subcontract Objects to perform its warranty obligations under this Subcontract, in such a manner that such access does not unreasonably interfere with the operation of the Contract Objects and/or Subcontract Objects or any of Company‟s related operations. (f) SUBCONTRACTOR‟s obligations hereunder shall also include: (i) inspection, and prompt correction or replacement as VIETSOVPETRO, acting reasonably, considers necessary in the circumstances, of any part(s) of the Work or any item(s) of SUBCONTRACTOR‟s Supply similar or related to the part(s) or item(s) in which the defect or non-conformance was found and that may reasonably be suspected of having a similar or related defect or non-conformance; and (ii) carrying out such tests as VIETSOVPETRO may reasonably require to verify that SUBCONTRACTOR‟s rectification of defects and non-conformances complies with the requirements of this Subcontract. VIETSOVPETRO shall act reasonably in requiring SUBCONTRACTOR to carry out inspection, correction or replacement pursuant to this Section 2.13.4(f). VIETSOVPETRO shall give due consideration to SUBCONTRACTOR‟s representations in this regard. If SUBCONTRACTOR is able to prove that compliance with VIETSOVPETRO‟s requirements resulted in correction or replacement of an unduly high number of items or parts subsequently found not to have defects or non-conformances, SUBCONTRACTOR shall be entitled to equitable reimbursement of the applicable inspection, correction and replacement costs. (g) SUBCONTRACTOR‟s obligations with regard to the rectification of non-conformances shall be the same as set out herein for the rectification of defects. VIETSOVPETRO shall only require SUBCONTRACTOR to rectify non-conformances that are not merely cosmetic in nature and genuinely need to be rectified, and that could not be remedied at insignificant cost as part of VIETSOVPETRO‟s customary maintenance routines. (h) Pursuant to Section 2.5.1(d), SUBCONTRACTOR shall have title to and risk in any defective or non-conforming items that have been removed in order for them to be replaced with alternative items. (i) In the event SUBCONTRACTOR does not promptly rectify a defect or non-conformance to fulfil its obligations under this Section 2.13.4, or where it is not operationally practicable for VIETSOVPETRO to have SUBCONTRACTOR carry out the rectification, or in the event of an emergency such as a safety or operational matter, VIETSOVPETRO shall have the right, but not the obligation, to perform or pay for others to carry out the rectification. SUBCONTRACTOR shall promptly reimburse, on VIETSOVPETRO‟s first written request, VIETSOVPETRO‟s actual documented out-of-pocket expenses for defect or non-conformance rectification work under this Section 2.13.4, including any incidental costs pursuant to Section 2.13.3(e). 2.13.5 Not used 2.13.6 (a) In addition to SUBCONTRACTOR‟s warranties, covenants, and undertakings under this Subcontract, SUBCONTRACTOR shall use every reasonable endeavour to obtain assignable Subcontractor and Supplier warranties that: (i) warrant that materials and equipment provided by Subcontractors and Suppliers comply with the requirements of this Subcontract; and Page 43 of 90
    • Vietsovpetro Draft contract (ii) provide for prompt in situ repair of defective items, or prompt removal of defective items and replacement with satisfactory replacements conforming to this Subcontract. Failure by SUBCONTRACTOR to obtain such Subcontractor and Supplier warranties shall not in any way relieve SUBCONTRACTOR of any of its other obligations under the Subcontract. (b) (c) SUBCONTRACTOR shall be responsible for enforcing the warranties and undertakings (together “Warranties”) of all Subcontractors and Suppliers until the end of the applicable Warranty Period or Extended Warranty Period, other than such Warranties that have been assigned to VIETSOVPETRO and/or Company at an earlier date. Any warranty or undertaking (each a “Warranty”) of a Subcontractor or Supplier that is still in existence at the end of the applicable Warranty Period or Extended Warranty Period shall automatically be assigned at such time to VIETSOVPETRO and Company. (d) At VIETSOVPETRO‟s request, SUBCONTRACTOR shall execute a deed of assignment with respect to such Subcontractor or Supplier Warranties still in existence at the end of the applicable Warranty Period or Extended Warranty Period. Thereafter, SUBCONTRACTOR shall provide reasonable assistance to VIETSOVPETRO and/or Company, at no charge, in connection with the enforcement by VIETSOVPETRO and/or Company of any Subcontractor or Supplier Warranty. (e) With respect to SUBCONTRACTOR‟s Supply, SUBCONTRACTOR shall use all reasonable efforts to obtain from Subcontractors and Suppliers full Warranties that include personnel and transportation and material costs, and other costs related to performing Warranty repairs and replacements and other correction or re-performance of any part of the Work that is defective or not conforming to the Subcontract. SUBCONTRACTOR‟s failure to obtain a full Warranty from a Subcontractor or Supplier shall not affect SUBCONTRACTOR‟s Warranty obligations to VIETSOVPETRO, except to the extent VIETSOVPETRO has expressly agreed to accept any less than full Warranty from any Supplier of Reimbursable Material. (f) 2.13.7 Where VIETSOVPETRO and/or Company is not already identified in the subcontract or Purchase Order for Reimbursable Material as third party beneficiary thereof with full authority to enforce the Subcontractor‟s or Supplier‟s warranty, if VIETSOVPETRO requests it in writing to do so, SUBCONTRACTOR shall assign such Subcontractor and Supplier warranties to VIETSOVPETRO and/or Company and shall, if further requested by VIETSOVPETRO before the end of the Warranty Period or Extended Warranty Period, as applicable, and without charge, assist and co-operate fully with VIETSOVPETRO in seeking remedies thereunder. Notwithstanding Section 2.13.7, with regard to Reimbursable Work, provided that SUBCONTRACTOR uses VIETSOVPETRO-approved terms and conditions expressly applicable to such associated construction and associated services, without material alteration, SUBCONTRACTOR‟s warranty obligations to VIETSOVPETRO under this Section 2.13 in respect of such items of Reimbursable Work shall be limited to and shall in no event exceed those of the particular Subcontractor or Supplier to SUBCONTRACTOR shall render, at VIETSOVPETRO‟s cost, all reasonable administrative assistance to VIETSOVPETRO to enforce such warranties and guarantees but SUBCONTRACTOR shall not be obligated to institute, participate in or prosecute mediation, arbitration or judicial proceedings in respect thereof, unless, and then only so far as VIETSOVPETRO agrees to pay, the related costs. (a) (i) The Warranty Period shall be the twelve (12) month period immediately following Provisional Acceptance. (ii) Provided, however, that SUBCONTRACTOR‟s completion of any items on the Punchlist accompanying the Provisional Acceptance Certificate, evidenced by Page 44 of 90
    • Vietsovpetro Draft contract VIETSOVPETRO‟s written acceptance in accordance with Section 2.12, shall be carried out as part of the Work to be completed before commencement of the Warranty Period for the items concerned and not as Warranty Work. The Warranty Period for such items shall be determined in accordance with Section 2.13.7(a)(i), but shall run for not less than twelve (12) months following VIETSOVPETRO‟s written acceptance of their completion. (iii) (b) In the event of an extraordinary delay in commencement of a Warranty Period for reasons not attributable to SUBCONTRACTOR Group, SUBCONTRACTOR shall use every reasonable endeavour, subject to VIETSOVPETRO‟s written approval, to provide Warranties covering at least the first twelve (12) months of full in-service use of the relevant Contract Objects and/or Subcontract Objects. VIETSOVPETRO will issue an appropriate Change Order Authorization, which will also address such matters as preservation measures to be taken as a condition of a suitably modified Warranty. SUBCONTRACTOR shall re-warrant for an extended warranty period continuing beyond the Warranty Period (an “Extended Warranty Period”): (i) (ii) (c) any defective item of Work corrected or replaced pursuant to written notice given during the Warranty Period for such item; and any rectification of a non-conformance carried out pursuant to written notice given during the applicable Warranty Period. The Extended Warranty Period for an item of Work shall be defined in any case to run for twelve (12) months from the completion of the most recent rectification of a defect or non-conformance in such item. Provided, however, that: (i) no Extended Warranty Period shall continue after the date that is twenty-four (24) months after the effective date of Provisional Acceptance and, save as provided in Section 2.13.7(c)(ii), thereafter SUBCONTRACTOR will have no further liability for any defects or non-conformances in the Work or any part thereof; and (ii) if VIETSOVPETRO has notified SUBCONTRACTOR of any defect or nonconformance prior to the expiry of said 24-month period, SUBCONTRACTOR shall promptly and diligently rectify all such defects and non-conformances pursuant to this Section 2.13 notwithstanding that the rectification Work may continue after the date that is 24 months after the effective date of Provisional Acceptance. 2.13.8 Not used. 2.13.9 Except for Section 2.15.10, this Section 2.13 shall take precedence over and shall not be prejudiced by the provisions of Section 2.15. Section 2.15 shall not be construed as relieving SUBCONTRACTOR of any of its warranty and indemnity obligations set out in this Section 2.13. 2.13.10 THE EXPRESS WARRANTIES AND REMEDIES SET FORTH IN THIS SECTION 2.13 ARE THE ONLY WARRANTIES OF SUBCONTRACTOR FOR THE WORK, AND NO OTHER WARRANTIES OF ANY KIND, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR CONDITIONS, WHETHER STATUTORY, WRITTEN, ORAL OR IMPLIED, SHALL APPLY. THE REMEDIES SET FORTH HEREIN SHALL BE VIETSOVPETRO‟S SOLE AND EXCLUSIVE REMEDIES FOR DEFECTS IN THE WORK Page 45 of 90
    • Vietsovpetro Draft contract AND BREACH OF THE WARRANTIES AND GUARANTEES STATED HEREIN AND SUBCONTRACTOR IS HEREBY RELEASED FROM ANY LIABILITY IN EXCESS THEREOF. 2.13.11 The provisions of this Section 2.13 shall survive any termination of this Subcontract. 2.14 Liens and Claims 2.14.1 SUBCONTRACTOR shall not directly or indirectly create, incur, assume or suffer to be created by any Subcontractors, Suppliers, employees, labourers, mechanics or materialmen any claim, lien, charge or encumbrance on VIETSOVPETRO Furnished Material or SUBCONTRACTOR‟s Supply after Suppliers‟ delivery thereof or the Contract Objects and/or Subcontract Objects or any part thereof or interest therein (each a “Contractor Lien”). SUBCONTRACTOR shall promptly pay or discharge, and discharge of record, any such claim, lien or encumbrance for labour, materials, supplies or other charges which, if unpaid, might be or become a Contractor Lien. SUBCONTRACTOR shall immediately notify VIETSOVPETRO in writing of the assertion of any Contractor or Lien. 2.14.2 SUBCONTRACTOR shall indemnify and protect VIETSOVPETRO Group and Company Group from and against all Contractor Liens in connection with SUBCONTRACTOR‟s or any Subcontractor‟s, Supplier‟s, employee‟s, labourer‟s, mechanic‟s or materialmen‟s provision of design, labour, materials, equipment, supplies and/ or services under this Subcontract. 2.14.3 Upon the failure of SUBCONTRACTOR to pay or discharge any Contractor Lien as required hereby within twenty five (25) days of notice of the existence thereof from any source, VIETSOVPETRO may, but shall not be obligated to, pay, discharge or obtain a bond or security for such Contractor Lien. Upon such payment, discharge or posting of security, VIETSOVPETRO shall be entitled to recover immediately from SUBCONTRACTOR the amount thereof together with all expenses incurred by VIETSOVPETRO in connection with such payment or discharge, or set off all such amounts against any sums owed by VIETSOVPETRO to SUBCONTRACTOR. 2.14.4 (a) SUBCONTRACTOR shall give written notice to VIETSOVPETRO of any claims, demands or proceedings by SUBCONTRACTOR against VIETSOVPETRO arising out of or related to VIETSOVPETRO‟s or SUBCONTRACTOR Group‟s performance pursuant to the provisions of this Subcontract. Such notice must be given to VIETSOVPETRO as soon as reasonably practicable, and in any event within twenty five (25) Days after SUBCONTRACTOR has had notice of, or should reasonably have been expected to have notice of, the basis for such claims, demands or proceedings. (b) SUBCONTRACTOR shall, within twenty five (25) Days of the submission of such notice pursuant to Section 2.14.4(a), present full details of the particular claim, demand or proceedings to VIETSOVPETRO for review. Such details must include a clear description of the contractual basis for any claim or demand, specific citation of the applicable provisions of this Subcontract, together with all necessary supporting documentation in sufficient detail to enable VIETSOVPETRO to evaluate SUBCONTRACTOR‟s claim or demand. Such supporting information shall include full details of how SUBCONTRACTOR has calculated the amount of the claim or demand, with specific citation of the applicable provisions of this Subcontract. (c) SUBCONTRACTOR acknowledges that its failure to give VIETSOVPETRO timely notification of any claim, demand or proceedings may prejudice VIETSOVPETRO‟s interests. Accordingly, any statutes of limitation notwithstanding, SUBCONTRACTOR expressly agrees that its right to bring or to assert against VIETSOVPETRO any such claims, demands or proceedings referred to in Section 2.14.4(a) in relation to adjustments sought by SUBCONTRACTOR in the Subcontract Price and/ or the Subcontract Schedule shall be waived unless: Page 46 of 90
    • Vietsovpetro Draft contract (i) (ii) SUBCONTRACTOR has duly provided the details referred to in Section 2.14.4(b); and (iii) (d) timely notice is given to VIETSOVPETRO as set forth above; and arbitration proceedings, if any, based on such claims or demands are commenced within one hundred and eighty (180) Days after the date of such notice to VIETSOVPETRO, except as otherwise agreed by the Parties. SUBCONTRACTOR shall include provisions similar to the foregoing in all of its subcontracts and purchase orders. Further, in the event that any claim, demand or proceeding is made or commenced against VIETSOVPETRO Group or Company Group by or on behalf of any Subcontractor or Supplier as a result of or arising solely or in substantial part out of SUBCONTRACTOR‟s performance or failure to perform any of its obligations to VIETSOVPETRO or to such Subcontractor or Supplier, SUBCONTRACTOR shall bear and shall defend, indemnify and hold VIETSOVPETRO Group and Company Group harmless from and against any damages or costs whatsoever associated with or related to such Subcontractor or Supplier claim, demand or proceeding, and such damages or costs shall not be reimbursable by VIETSOVPETRO. 2.14.5 The provisions of this Section 2.14 shall survive the Subcontract Term. 2.15 Liabilities and Indemnities 2.15.1 Not Used 2.15.2 For the purpose of the indemnities and limitations of liability in favour of SUBCONTRACTOR in the Subcontract, such indemnities and limitations of liability shall also operate for the benefit of SUBCONTRACTOR Group and SUBCONTRACTOR Group‟s insurers. For the purpose of the indemnities and limitations of liability in favour of VIETSOVPETRO in the Subcontract, such indemnities and limitations of liability shall also operate for the benefit of VIETSOVPETRO Group and VIETSOVPETRO Group‟s insurers, and Company Group and Company Group‟s insurers. SUBCONTRACTOR acknowledges that it is receiving rights hereunder on behalf of other members of SUBCONTRACTOR Group, and that the indemnities and limitations on liability expressed by it hereunder are given by itself and other members of SUBCONTRACTOR Group. VIETSOVPETRO acknowledges that it is receiving rights hereunder on behalf of other members of VIETSOVPETRO Group and Company Group, and that the indemnities and limitations on liability expressed by it hereunder are given by itself and other members of VIETSOVPETRO Group and Company Group. In addition to the provisions of Section 2.29.3, each of SUBCONTRACTOR and VIETSOVPETRO expressly waives any provision of Applicable Law that may otherwise require a third party beneficiary of such Subcontract rights to notify the obligor that such beneficiary intends to rely upon such contractual rights. 2.15.3 (a) Except with regard to Section 2.15.10, the indemnification, hold harmless and defence obligations and limitations on liability set out in this Subcontract shall not apply (i) for the benefit of SUBCONTRACTOR Group in the event of Willful Misconduct of managerial- or senior supervisory-level personnel of SUBCONTRACTOR Group, as finally determined by arbitration pursuant to Section 2.19.3, during performance of the Subcontract; or (ii) for the benefit of VIETSOVPETRO Group or Company Group in the event of Willful Misconduct of managerial- or senior supervisory-level personnel of VIETSOVPETRO Page 47 of 90
    • Vietsovpetro Draft contract Group or Company Group, as finally determined by arbitration pursuant to Section 2.19.3, during performance of the Subcontract. As used in this Section 2.15.3, the term “managerial- or senior supervisory-level personnel” means a Party‟s or Company‟s (i) Project Manager and direct-reports to its Project Manager; (ii) corporate officers and directors; and (iii) Persons at an equivalent level to, or higher level than, the Project Manager and direct-reports to the Project Manager in the Party‟s or Company‟s corporate organization who are in charge of an operations function in relation to and who, in discharging such responsibility, are able to materially influence the performance of the Work and/ or of a Party‟s or Company‟s duties, responsibilities and obligations under the Subcontract and/ or the Contract. (b) Save as expressly provided otherwise herein, the provisions of this Subcontract that set out indemnifications against, releases from, assumptions of and limitations on liability; limitations on remedies; hold harmless and defence obligations; and waiver of subrogation rights, shall apply to the fullest extent permitted by law, regardless of any negligence, breach of duty (statutory or otherwise), other fault, or strict liability of the Party or Company, indemnified, released, or whose liability is assumed or limited, or against whom remedies have been limited or rights of subrogation have been waived, and shall extend to VIETSOVPETRO Group (in the case of VIETSOVPETRO) and to SUBCONTRACTOR Group (in the case of SUBCONTRACTOR). (c) All indemnities and limitations on liability set out in this Section 2.15 are given in substitution for each and any other right of action or remedy arising under Applicable Law or otherwise that a Party might or would otherwise have had against the other Party. They include all claims, liabilities, causes of action and proceedings (by whomsoever brought), costs, charges, expenses (including legal expenses), losses, and damages, howsoever arising. (d) All indemnities and limitations on liability set out in this Section 2.15 apply solely and exclusively in relation to liabilities resulting from or arising out of or in connection with this Subcontract. (e) The amounts to be borne by VIETSOVPETRO and SUBCONTRACTOR pursuant to the indemnities and limitations on liability set out in this Section 2.15 shall be determined in accordance with Section 10.0 and Section 5.0. 2.15.4 Third Party Indemnification (a) SUBCONTRACTOR shall defend, indemnify and hold harmless VIETSOVPETRO Group and VIETSOVPETRO Group‟s insurers, Company Group and Company Group‟s insurers (but in respect of Company Group and Company Group‟s insurers only to the extent that VIETSOVPETRO is bound and actually indemnifies Company Group therefrom under the Contract) from and against any liability for the following, to the extent resulting from or arising out of the negligence, breach of duty (statutory or otherwise), other fault or strict liability of SUBCONTRACTOR Group: (i) (ii) (b) injury to or ill health, sickness or death of any Third Party; and damage to or loss of or loss of use of Third Party Property, including removal of wreck and/ or debris but excluding pollution liability as referred to in Section 2.15.7. VIETSOVPETRO shall defend, indemnify and hold harmless SUBCONTRACTOR Group and SUBCONTRACTOR Group‟s insurers from and against any liability for the following, to the extent resulting from or arising out of the negligence, breach of duty (statutory or otherwise), Page 48 of 90
    • Vietsovpetro Draft contract other fault or strict liability of VIETSOVPETRO Group and/or Company Group, (but in respect of Company Group only to the extent that Company is bound and actually indemnifies SUBCONTRACTOR as a constituent member of “Contractor Group” therefrom under the Contract): (i) (ii) (c) injury to or ill health, sickness or death of any Third Party; and damage to or loss of or loss of use of Third Party Property, including removal of wreck and/ or debris but excluding pollution liability as referred to in Section 2.15.7. VIETSOVPETRO shall use all reasonable endeavours to facilitate any mutual hold harmless arrangements desired by SUBCONTRACTOR with any of Company‟s other contractors, but shall have no obligation with regard to such arrangements. SUBCONTRACTOR shall act reasonably in co-operating with any of Company‟s other contractors seeking to enter into mutual hold harmless arrangements with SUBCONTRACTOR. 2.15.5 Personnel Indemnification (a) SUBCONTRACTOR shall defend, indemnify and hold harmless VIETSOVPETRO Group and VIETSOVPETRO Group‟s insurers, Company Group and Company Group‟s insurers (but in respect of Company Group and Company Group‟s insurers only to the extent that VIETSOVPETRO is bound and actually indemnifies Company Group therefrom under Contract) from and against any liability for injury to or ill health, sickness, or death of SUBCONTRACTOR Group Personnel. (b) VIETSOVPETRO shall defend, indemnify and hold harmless SUBCONTRACTOR Group and SUBCONTRACTOR Group‟s insurers from and against any liability for injury to or ill health, sickness, or death of VIETSOVPETRO Group Personnel and Company Group Personnel, (but in respect of Company Group Personnel only to the extent that Company is bound and actually indemnifies SUBCONTRACTOR as a constituent member of “Contractor Group” therefrom under the Contract). 2.15.6 Property of SUBCONTRACTOR Group, VIETSOVPETRO Group and Company Group (a) SUBCONTRACTOR Group Property SUBCONTRACTOR shall defend, indemnify and hold harmless VIETSOVPETRO Group and VIETSOVPETRO Group‟s insurers, Company Group and Company Group‟s insurers (but in respect of Company Group and Company Group‟s insurers only to the extent that VIETSOVPETRO is bound and actually indemnifies Company Group therefrom under the Contract) from and against any liability for damage to or loss of or loss of use of SUBCONTRACTOR Group Property, including removal of wreck and/ or debris. (b) VIETSOVPETRO Group Property and Company Group Property VIETSOVPETRO shall defend, indemnify and hold harmless SUBCONTRACTOR Group and SUBCONTRACTOR Group‟s insurers from and against any liability for loss of or damage to or loss of use of VIETSOVPETRO Group Property and Company Group Property (including removal of wreck and/ or debris), but in respect of Company Group Property only to the extent that Company is bound and actually indemnifies SUBCONTRACTOR as a constituent member of “Contractor Group” therefrom under the Contract. Provided, however, that SUBCONTRACTOR shall contribute up to US$1,000,000 (US Dollars one million) each occurrence or series of occurrences arising from a single event to the cost of repairing or Page 49 of 90
    • Vietsovpetro Draft contract replacing such damaged or lost VIETSOVPETRO Group Property and Company Group Property when the loss or damage results from or arises out of the negligence, breach of duty (statutory or otherwise),or other fault or strict liability of the SUBCONTRACTOR Group, but in respect of Company Group Property only to the extent that VIETSOVPETRO is bound and actually contributes to Company under the Contract. 2.15.7 Pollution (a) VIETSOVPETRO Group Property, Company Group Property and Project Property VIETSOVPETRO shall defend, indemnify and hold harmless SUBCONTRACTOR Group and SUBCONTRACTOR Group‟s insurers from and against any loss or liability (including, but not limited to, costs of control, cleanup, recovery and containment) arising out of pollution, seepage or contamination that originates from or emanates out of any VIETSOVPETRO Group Property, Company Group Property or Project Property, but in respect of Company Group Property only to the extent that Company is bound and actually indemnifies SUBCONTRACTOR as a constituent member of “Contractor Group” therefrom under the Contract. Provided, however, that SUBCONTRACTOR shall contribute up to US$1,000,000 (US Dollars one million) each occurrence or series of occurrences arising from a single event to such loss or liability (including costs of control, cleanup, recovery and containment) when the pollution, seepage or contamination results from or arises out of the negligence, breach of duty (statutory or otherwise),or other fault or strict liability of the SUBCONTRACTOR Group, but only to the extent that VIETSOVPETRO is bound and actually contributes to Company under the Contract. (b) SUBCONTRACTOR Group Property SUBCONTRACTOR shall defend, indemnify and hold harmless VIETSOVPETRO Group and VIETSOVPETRO Group‟s insurers, Company Group and Company Group‟s insurers (but in respect of Company Group and Company Group‟s insurers only to the extent that VIETSOVPETRO is bound and actually indemnifies Company Group therefrom under the Contract) from and against any loss or liability (including, but not limited to, costs of control, cleanup, recovery and containment) arising out of pollution, seepage or contamination that originates from or emanates out of any SUBCONTRACTOR Group Property. This indemnity shall not apply in cases of VIETSOVPETRO Group‟s and/or Company Group‟s sole negligence, sole breach of duty (statutory or otherwise), other sole fault or strict liability. (c) Third Party Property (i) SUBCONTRACTOR shall defend, indemnify and hold harmless VIETSOVPETRO Group and VIETSOVPETRO Group‟s insurers, Company Group and Company Group‟s insurers (but in respect of Company Group and Company Group‟s insurers only to the extent that VIETSOVPETRO is bound and actually indemnifies Company Group therefrom under the Contract) from and against any loss or liability (including, but not limited to, costs of control, cleanup, recovery and containment) arising out of pollution, seepage, or contamination that originates from or emanates out of any Third Party Property, to the extent resulting from or arising out of the negligence, breach of duty (statutory or otherwise), other fault or strict liability of SUBCONTRACTOR Group. (ii) VIETSOVPETRO shall defend, indemnify and hold harmless SUBCONTRACTOR Group and SUBCONTRACTOR Group‟s insurers from and against any loss or liability (including, but not limited to, costs of control, cleanup, recovery and containment) arising out of pollution, seepage, or contamination that originates from or emanates out of any Third Party Property, to the extent resulting from or arising Page 50 of 90
    • Vietsovpetro Draft contract out of the negligence, breach of duty (statutory or otherwise), other fault or strict liability of VIETSOVPETRO Group and/ or Company Group, but in respect of Company Group only to the extent that Company is bound and actually indemnifies SUBCONTRACTOR as a constituent member of “Contractor Group” therefrom under the Contract. (d) The provisions of this Section 2.15.7 shall not prejudice the defence, indemnification and hold harmless obligations with regard to personnel and property as set out in Sections 2.15.4, 2.15.5, 2.15.6 and 2.15.8. 2.15.8 Responsibility for the Work (a) As between VIETSOVPETRO and SUBCONTRACTOR, SUBCONTRACTOR shall have control over and the duty of diligent care and protection of the Work and Project Property until Provisional Acceptance. Provided, however, that VIETSOVPETRO may take control over and custody of individual Contract Objects and/or Subcontract Objects or specific parts thereof prior to Provisional Acceptance pursuant to the Handover provisions of Section 2.12.2. VIETSOVPETRO shall have the duty of diligent care and protection of the Contract Objects and/or Subcontract Objects listed in any Handover Certificate from the effective date of the applicable Handover Certificate. (b) VIETSOVPETRO shall defend, indemnify and hold harmless SUBCONTRACTOR Group and SUBCONTRACTOR Group‟s insurers from and against any liability for physical loss of or physical damage to VIETSOVPETRO Contract Objects and VIETSOVPETRO‟s Supply until Sailaway of such VIETSOVPETRO Contract Objects and VIETSOVPETRO‟s Supply (including removal of wreck and/ or debris associated therewith) resulting from or arising out of any cause. (c) VIETSOVPETRO shall defend, indemnify and hold harmless SUBCONTRACTOR Group and SUBCONTRACTOR Group‟s insurers from and against any liability for physical loss of or physical damage to Project Property (including removal of wreck and/ or debris associated therewith) resulting from or arising out of any cause. Notwithstanding the preceding sentence, this indemnity shall not apply to the extent that such physical loss of or physical damage results from or arises out of SUBCONTRACTOR Group's negligence, breach of duty (statutory or otherwise), other fault or strict liability, but only to the extent that VIETSOVPETRO‟s equivalent indemnification from Company under the Contract is made not applicable thereby and VIETSOVPETRO actually pays to Company, up to US$500,000 (US Dollars five hundred thousand) each occurrence or series of occurrences stemming from a single event onshore and up to US$1,000,000 (US Dollars one million) each occurrence or series of occurrences stemming from a single event offshore. (d) At its sole discretion VIETSOVPETRO may require SUBCONTRACTOR to carry out recovery, reconstruction, repair or replacement in respect of physical loss of or physical damage to Project Property (including removal of wreck and/ or debris associated therewith) occurring at any time prior to commencement of the applicable Warranty Period. In such event, VIETSOVPETRO shall issue an appropriate Change Order Authorization in respect of any adjustment in the Work, the Subcontract Price, and/ or the Subcontract Schedule. (e) (i) SUBCONTRACTOR shall immediately provide written notice to VIETSOVPETRO of any physical loss of or physical damage to Project Property occurring at any time prior to commencement of the applicable Warranty Period, and in any event within seventytwo (72) hours of SUBCONTRACTOR Group‟s first awareness of such loss or damage. Such notice shall provide all necessary detail so that VIETSOVPETRO may make a Page 51 of 90
    • Vietsovpetro Draft contract claim under any applicable insurance. SUBCONTRACTOR shall co-operate and assist VIETSOVPETRO, without charge, with the processing of all such claims. (ii) SUBCONTRACTOR acknowledges that, in the event of any physical loss of or physical damage to Project Property, it must obtain VIETSOVPETRO‟s written approval before proceeding with the part(s) of the Work affected by such loss or damage. (f) Notwithstanding any other provisions of this Subcontract, if SUBCONTRACTOR fails to notify VIETSOVPETRO and/ or secure VIETSOVPETRO approvals and/ or assist VIETSOVPETRO as required by Section 2.15.8, then SUBCONTRACTOR shall be liable for costs of loss or damage that are not recoverable under any applicable insurance. (g) It is expressly understood and agreed that: (i) SUBCONTRACTOR Group shall not be entitled to the benefit of any insurance taken out by Company or VIETSOVPETRO in respect of any such physical loss of or physical damage to Project Property addressed in this Section 2.15.8. (ii) SUBCONTRACTOR Group shall not be entitled to solicit insurance cover for any amounts to be borne by SUBCONTRACTOR pursuant to this Section 2.15.8 before it has obtained VIETSOVPETRO‟s written confirmation, not to be unreasonably withheld or delayed, that such solicitation will not materially affect VIETSOVPETRO‟s and Company‟s arrangement of insurance applicable to the Work, with any coverage obtained by SUBCONTRACTOR not affecting the Subcontract Price. 2.15.9 Patent Indemnification (a) SUBCONTRACTOR shall defend, indemnify, and hold VIETSOVPETRO Group and Company Group (but in respect of Company Group only to the extent that VIETSOVPETRO is bound and actually indemnifies Company Group there from under the Contract) harmless from and against any claims whatsoever arising from or in any manner related to infringement of patents or the improper use of other proprietary rights that may occur in connection with SUBCONTRACTOR‟s performance of the Work and the ownership or use of the SUBCONTRACTOR‟s Supply, unless such infringement or improper use is at the direction of VIETSOVPETRO and/or Company and not otherwise contemplated hereunder. SUBCONTRACTOR shall have sole authority for the control of the defence of any such claims. (b) Furthermore, if any such claim does or might materially impair SUBCONTRACTOR‟s performance of the Work or continued operations, then SUBCONTRACTOR shall, at its own expense, expeditiously procure the right to continue its performance of the Work so as not to impair its ability to achieve Provisional Acceptance by the Guaranteed Completion Date. (c) VIETSOVPETRO shall notify SUBCONTRACTOR in writing as soon as VIETSOVPETRO receives notice of any claims of infringement of patents or other proprietary rights occurring in connection with SUBCONTRACTOR‟s performance of the Work. In turn, SUBCONTRACTOR shall promptly notify VIETSOVPETRO in writing of any claims that SUBCONTRACTOR may receive alleging infringement of patents or other proprietary rights and that may affect SUBCONTRACTOR‟s performance of the Work. (d) VIETSOVPETRO may, on a case-by-case basis, approve SUBCONTRACTOR‟s use of terms and conditions for procurement of Reimbursable Work with provisions differing from those set out above in this Section 2.15.9 in respect of patent indemnification. In such event, Page 52 of 90
    • Vietsovpetro Draft contract SUBCONTRACTOR‟s obligations under this Section 2.15.9 in respect of such items of Reimbursable Work shall be limited to and shall in no event exceed those of the particular Subcontractor or Supplier pursuant to such VIETSOVPETRO-approved terms and conditions. 2.15.10 Consequential Loss (a) Notwithstanding anything to the contrary expressed or implied elsewhere in the Subcontract, but subject always to Section 2.15.10(c), no member of SUBCONTRACTOR Group shall be liable to any member of VIETSOVPETRO Group or Company Group in any action for special, incidental or consequential losses or damages (whether arising directly or indirectly, immediately or otherwise) resulting from or arising out of the performance or non-performance of this Subcontract (“Consequential Losses”) suffered by any member of VIETSOVPETRO Group or Company Group. Notwithstanding the definitions of “Third Party” and “Third Party Property” in Section 1.2, no member of SUBCONTRACTOR Group shall be liable to any member of VIETSOVPETRO Group or Company Group for Consequential Losses in respect of damage to or loss of or loss of use of, or in respect of pollution emanating from, Third Party Property owned by such member of VIETSOVPETRO Group or Company Group or in which such member of VIETSOVPETRO Group or Company Group has a beneficial interest and which is located in the Block 15-1 area, offshore The Socialist Republic of Vietnam. Notwithstanding anything to the contrary expressed or implied elsewhere in the Subcontract, but subject always to Section 2.15.10(c), no member of VIETSOVPETRO Group and Company Group shall be liable to any member of SUBCONTRACTOR Group in any action for Consequential Losses suffered by any member of SUBCONTRACTOR Group. Without prejudice to the generality of any of the foregoing provisions of this Section 2.15.10(a), Consequential Losses shall include: (i) loss or deferment of revenue, use, production or profit (whether actual or anticipated); (ii) loss or escape of product (processed or unprocessed hydrocarbons); (iii) loss of or damage to mineral reservoirs; (iv) hydrocarbon production, processing, storage or export facilities downtime (whether partial or complete); (v) loss of hole; (vi) damage to or loss of downhole/ in-hole tubing and equipment; (vii) losses associated with business interruptions including wasted overheads and loss of anticipated savings; (viii) loss of bargain, contract, expectation or opportunity; (ix) any loss, claim or expense that arises out of or is connected with the sale, disposal, exchange or use of, or the transportation or processing of, any production; (x) any increase in operating or other costs, however same may be caused and regardless of any Willful Misconduct, negligence, breach of duty (statutory or otherwise), other fault or strict liability of the member of SUBCONTRACTOR Group, or VIETSOVPETRO Group or Company Group, that is relieved of liability hereunder. Page 53 of 90
    • Vietsovpetro Draft contract (b) VIETSOVPETRO shall defend, indemnify and hold harmless SUBCONTRACTOR Group from and against any claims made or causes of action brought by any member of VIETSOVPETRO Group and Company Group for Consequential Losses but in respect of Company group only to the extent that Company is bound and actually indemnifies SUBCONTRACTOR Group as a constituent member of “Contractor Group” therefrom under the Contract. SUBCONTRACTOR shall defend, indemnify and hold harmless VIETSOVPETRO Group and Company Group from and against any claims made or causes of action brought by any member of SUBCONTRACTOR Group for Consequential Losses, but in respect of Company Group only to the extent that VIETSOVPETRO is bound and actually indemnifies Company Group therefrom under the Contract. (c) Provided, however, that none of the following shall be considered as Consequential Losses: (i) liabilities or obligations pursuant to the Third Party indemnification and hold harmless provisions of this Subcontract, but without prejudice to the provisions of Section 2.15.10(a) in respect of Third Party Property owned by a member of VIETSOVPETRO Group and/or Company Group or in which any member of VIETSOVPETRO Group and/or Company Group has a beneficial interest and which is located in the Block 15-1 area, offshore The Socialist Republic of Vietnam; (ii) SUBCONTRACTOR‟s liability under Section 2.2.6(e) for any increase in Vietnamese value added tax and/ or any increase in Import Taxes and/ or any increase in Foreign Contractor Withholding Tax; (iii) any reduction in the Subcontract Price and/ or VIETSOVPETRO‟s recovery of costs from SUBCONTRACTOR in accordance with Section 2.2.16; (iv) liabilities or obligations pursuant to the provisions of Section 2.9, Section 2.14.3, and Section 2.30; (v) SUBCONTRACTOR‟s obligation to pay „incidental costs‟ as defined in Section 2.13.3(e); (vi) amounts payable by SUBCONTRACTOR in accordance with Section 2.15.6(b), but without SUBCONTRACTOR Group being liable to VIETSOVPETRO Group and Company Group for items expressly encompassed by the definition of “Consequential Losses” set out in Section 2.15.10(a); (vii) SUBCONTRACTOR‟s obligation to pay Extra Costs as defined in Section 2.18.5, but without SUBCONTRACTOR Group being liable to VIETSOVPETRO Group and Company Group for items expressly encompassed by the definition of “Consequential Losses” set out in Section 2.15.10(a); (viii) VIETSOVPETRO‟s and/ or SUBCONTRACTOR‟s obligation to pay costs pursuant to Section 2.33; and (ix) liabilities or obligations under any other provisions of this Subcontract stipulating an express indemnification, or obligation or liability to pay costs, charges, expenses or penalties of the kind that are not included in but which are consistent with the manifest intent of Sections 2.15.10(c)(i) to 2.15.10(c)(viii) inclusive, but without SUBCONTRACTOR Group being liable to VIETSOVPETRO Group and Company Group, or VIETSOVPETRO Group being liable to SUBCONTRACTOR Group, for Page 54 of 90
    • Vietsovpetro Draft contract items expressly encompassed by the definition of “Consequential Losses” set out in Section 2.15.10(a). 2.15.11 Survival The provisions of this Section 2.15 shall survive the Subcontract Term. 2.16 Technology, Rights Thereto and Confidentiality Thereof 2.16.1 As used in this Section 2.16, the following terms have the following meanings: “Technology” means information of a scientific or technical nature including know-how, confidential information, inventions, designs, copyrights, and any statutory rights that affect use and/ or disclosure of the information; for example, patents, utility models, registered designs, trade secrets, design patents, and registered copyrights. “Data” or “Tangible Information” means recorded information, regardless of form or character; for example, software, writings, drawings, and similar recordings on or in a tangible medium. “Proprietary Data” means Data or Tangible Information relating to the Work that is disclosed to SUBCONTRACTOR by or on behalf of VIETSOVPETRO and is indicated or confirmed in writing as information which VIETSOVPETRO regards to be Proprietary Data; or is prepared or developed in the course of performing the Work. Such Proprietary Data shall not include any information that: (a) is in or passes into the public domain (other than by act or omission attributable to SUBCONTRACTOR Group); (b) was in SUBCONTRACTOR‟s possession without restriction on disclosure prior to disclosure thereof by or on behalf of VIETSOVPETRO; or (c) is disclosed to SUBCONTRACTOR by a Third Party without restriction on disclosure, provided that SUBCONTRACTOR does not know or have reason to know that the Third Party obtained such information directly or indirectly from VIETSOVPETRO illicitly or under an obligation prohibiting such disclosure. The Parties agree that specific information disclosed by VIETSOVPETRO pursuant to the provisions of this Subcontract shall not be deemed to be within any of the above three exclusions (a) and (b) and (c) merely because it is embraced by more general information within one or more of the exclusions; and that particular combinations of information shall not be deemed to be within any of the above three exclusions (a) and (b) and (c) merely because the individual parts in uncombined form are within one of the exclusions. 2.16.2 VIETSOVPETRO and/or Company shall have access to all Data developed by SUBCONTRACTOR and Subcontractors and Suppliers in the course of the Work and at times that VIETSOVPETRO shall determine. All such Data shall be the property of VIETSOVPETRO, but subject to the provisions of Section 2.16.3, and shall be handed over to VIETSOVPETRO at any time at VIETSOVPETRO‟s request. 2.16.3 The allocation of rights to Technology shall be as follows: (a) (i) SUBCONTRACTOR shall promptly notify VIETSOVPETRO in writing of any invention first conceived in the course of performing Work under this Subcontract and which SUBCONTRACTOR reasonably believes may be novel and non-obvious to one Page 55 of 90
    • Vietsovpetro Draft contract skilled in the art. VIETSOVPETRO shall hold such notification in strict confidence. If VIETSOVPETRO, acting reasonably, believes the invention comes under the provisions of Section 2.16.3(a)(ii), it shall be entitled to require SUBCONTRACTOR to disclose such invention to VIETSOVPETRO in an Invention Conception Record (ICR). The ICR will be in a format acceptable to VIETSOVPETRO, and VIETSOVPETRO shall furnish an example of an acceptable ICR format on request. Such disclosure shall be in detail sufficient for understanding by one skilled in the art. The basis of that which is considered to be the invention shall be clearly stated. (ii) (iii) VIETSOVPETRO hereby waives and relinquishes to SUBCONTRACTOR any rights, title, and interest that VIETSOVPETRO might otherwise be able to assert in and to any such invention that is based mainly on technical concepts and/ or information provided by or on behalf of SUBCONTRACTOR, but always subject to VIETSOVPETRO‟s rights pursuant to Section 2.16.3(e). (iv) Any assignment pursuant to this Section 2.16.3(a) is subject to any mandatory compensation or other rights granted to inventors by Applicable Law. The assignor shall co-operate with and assist the assignee in resolving any inventor compensation or other questions arising under such law, with such inventor compensation being subject to the approval of both VIETSOVPETRO and SUBCONTRACTOR. (v) (b) SUBCONTRACTOR hereby assigns, grants, and conveys to VIETSOVPETRO all of SUBCONTRACTOR‟s rights, title, and interest in and to any such invention by SUBCONTRACTOR Group under Section 2.16.3(a)(i) that is based mainly on technical concepts and/ or information provided by VIETSOVPETRO. Upon the request and at the expense of the assignee, the assignor shall execute and deliver all documents necessary for the transfer of its title to such inventions described in this Section 2.16.3(a) to the assignee and for preparation, prosecution, and maintenance of patents and applications for said inventions that the assignee may elect to file. The assignee shall notify the assignor of each patent application filed on each such invention. (i) Except as VIETSOVPETRO shall deprive SUBCONTRACTOR of freedom of choice or VIETSOVPETRO shall independently elect, SUBCONTRACTOR warrants that the possession, use, or disclosure by VIETSOVPETRO of any information recorded in Data, or the manufacture, use or sale of equipment or methods which embody such information furnished by SUBCONTRACTOR to VIETSOVPETRO, shall not infringe the applicable patents issued to or applicable intellectual property rights of any Person when such Data is used in the context of and in connection with the Contract Objects and/or Subcontract Objects or VIETSOVPETRO‟s related operations. Furthermore, SUBCONTRACTOR warrants that it has not violated its obligation of confidentiality to any Person in providing information or designs under this Subcontract. If VIETSOVPETRO and Company is charged with any such infringement in contravention of the aforesaid warranties, SUBCONTRACTOR shall, at its option, defend and hold VIETSOVPETRO and Company harmless from any damages or expenses arising from such charge (including legal expenses), or provide VIETSOVPETRO with an alternative non-infringing design that is the economic and functional equivalent of the infringing design. (ii) In the event that a claim or action is brought against VIETSOVPETRO based on SUBCONTRACTOR Group‟s improper disclosure of Data or designs or a Person‟s confidential information, SUBCONTRACTOR shall defend and hold VIETSOVPETRO Page 56 of 90
    • Vietsovpetro Draft contract Group and Company Group harmless from any damages or expenses (including legal expenses) arising from such claim or action. (iii) VIETSOVPETRO shall indemnify and hold harmless SUBCONTRACTOR Group against any loss or liability arising from infringement or alleged infringement of patents or copyrights covering the manufacture, use, purchase or sale of equipment or methods that VIETSOVPETRO may independently elect or in respect of which VIETSOVPETRO may deprive SUBCONTRACTOR of freedom of choice. Such indemnification shall not apply, however, in respect of breach by SUBCONTRACTOR Group of the terms of any written agreement entered into by SUBCONTRACTOR Group, or failure by SUBCONTRACTOR Group to take all reasonable steps to enter an appropriate written agreement (when notified by VIETSOVPETRO of the need to do so), with the owner or licensor of any applicable patent or copyright. In the event that a claim or action is brought against SUBCONTRACTOR Group based on VIETSOVPETRO Group‟s improper disclosure of Proprietary Data to SUBCONTRACTOR Group, VIETSOVPETRO shall indemnify and hold harmless SUBCONTRACTOR Group against any damages or expenses (including legal expenses) arising from such claim or action. (c) Notwithstanding any other provision herein, SUBCONTRACTOR shall have the right to continue using any Data which it had the right to use prior to carrying out the Work in the course of this Subcontract; and nothing contained herein shall limit SUBCONTRACTOR‟s right to use SUBCONTRACTOR‟s basic know-how, experience and skills, and the experience and skills of its employees, to perform any associated engineering, associated design, manufacturing or installation services for any other Person, provided that this provision shall not grant SUBCONTRACTOR any licence under VIETSOVPETRO‟s and Company‟s present or future patent rights. (d) (i) VIETSOVPETRO grants to SUBCONTRACTOR a nonexclusive, nontransferable (except as hereinafter stated or except with the portion of SUBCONTRACTOR‟s business to which this Subcontract pertains), irrevocable, royalty-free, worldwide licence under VIETSOVPETRO‟s right to only that Proprietary Data prepared or developed by SUBCONTRACTOR in the course of SUBCONTRACTOR‟s performance of the Work and under any patent rights derived under Section 2.16.3(a)(ii). Such licence is limited to SUBCONTRACTOR‟s business of performing services for clients. SUBCONTRACTOR may embody any such Proprietary Data or any such invention in apparatus or services provided to clients of SUBCONTRACTOR, and when it does so SUBCONTRACTOR shall have the right to extend a non-transferable sub-licence to each such client under the licence rights granted to SUBCONTRACTOR by this Section 2.16.3(d). Such extension of a sub-licence must be limited to and solely in direct connection with the apparatus or services provided by SUBCONTRACTOR to the client. For each such extension of a sub-licence to a client, SUBCONTRACTOR shall pay to VIETSOVPETRO a royalty equal to the sum of 3% (three percent) of the fabricated cost of each piece of apparatus embodying an invention licensed pursuant to this Section 2.16.3(d)(i) and for which a patent has been granted, whether such apparatus is supplied directly by SUBCONTRACTOR to such client or is obtained by said client based upon designs provided by SUBCONTRACTOR to such client. SUBCONTRACTOR shall also require any such client to enter into a confidentiality agreement of scope and effect in accord with Section 2.16.4 as modified by the licence granted pursuant to this Section 2.16.3(d)(i). (ii) It is further understood that rights accruing to SUBCONTRACTOR under this Section 2.16.3(d) shall not include rights to any Proprietary Data that embodies Page 57 of 90
    • Vietsovpetro Draft contract Proprietary Data disclosed VIETSOVPETRO. (e) to SUBCONTRACTOR by or on behalf of To the extent necessary or advisable in connection with the operation, maintenance, repair, modification and use of the Contract Objects and/or Subcontract Objects and any replacements thereof, and sale of the products thereof, SUBCONTRACTOR grants to VIETSOVPETRO a nonexclusive, royalty-free, irrevocable and transferable licence (without the right to sub-license) under the patents, trademarks, copyrights, or other intellectual property rights owned by SUBCONTRACTOR or by an entity from whom SUBCONTRACTOR has received the right to grant licences thereunder that in any way are used or useful in respect of the Contract Objects and/or Subcontract Objects, and also grants to VIETSOVPETRO and its representatives a nonexclusive, royalty-free, irrevocable and transferable right (without the right to sub-license) to use the know-how and other technical information disclosed to VIETSOVPETRO under the Subcontract. 2.16.4 Proprietary Data shall be held in strict confidence by SUBCONTRACTOR and shall not be used by SUBCONTRACTOR except to carry out Work under this Subcontract unless disclosure or further use is authorized in Section 2.16.3 or consented to in writing by VIETSOVPETRO. The obligation of this Section 2.16.4 shall extend for a period of ten (10) years from the Effective Date. 2.16.5 Any activity of VIETSOVPETRO or SUBCONTRACTOR under this Subcontract shall be subject to compliance with any Applicable Law regarding the export and re-export of technical data (including classified information) and equipment and products produced therefrom, comprising, where required, issuance and renewal of validated export licences. 2.16.6 SUBCONTRACTOR shall hold in strict confidence, and shall not use for any purpose other than the performance of the Work, any Data derived from VIETSOVPETRO regarding VIETSOVPETRO‟s general business operations. Provided, however, that the preceding sentence shall not apply in case such Data: (a) is in or passes into the public domain (other than by act or omission attributable to SUBCONTRACTOR Group); (b) was in SUBCONTRACTOR‟s possession without restriction on disclosure thereof by or on behalf of SUBCONTRACTOR; or (c) is disclosed to SUBCONTRACTOR by a Third Party without restriction on disclosure, provided that SUBCONTRACTOR does not know or have reason to know that the Third Party obtained such information directly or indirectly from VIETSOVPETRO illicitly or under an obligation preventing such disclosure. 2.16.7 SUBCONTRACTOR shall take all reasonable steps to obtain compliance of Subcontractors and Suppliers, employees, and agents in accordance with its commitments under this Section 2.16. 2.16.8 If SUBCONTRACTOR determines that it has proprietary information that it intends to employ in performance of the Work, VIETSOVPETRO will accept confidentiality and limitation of use obligations relating to specific information which is clearly delineated and which is a true trade secret. Accordingly, so that the Work may move forward in a timely manner, the Parties agree in good faith to enter into agreements on a specific item basis whereby, for a reasonable and specific period of time appropriate to the circumstances, VIETSOVPETRO will use the same measure of care it uses to protect its own proprietary information to protect such confidential information of SUBCONTRACTOR or of a Subcontractor or Supplier as is clearly delineated in written documents or other recordings which bear a legend indicating confidentiality. Neither Party shall be legally so bound, however, until written Page 58 of 90
    • Vietsovpetro Draft contract documents are duly executed by an authorized representative of the Party to be charged. VIETSOVPETRO‟s obligation shall not in any event apply to information: (a) that was in VIETSOVPETRO‟s possession prior to VIETSOVPETRO‟s first receipt of the corresponding information under this Subcontract; (b) that is now or hereafter becomes, through no act or failure to act on VIETSOVPETRO‟s part, generally available to the public on a non-confidential basis; (c) that was at any time furnished to VIETSOVPETRO by others as a matter of right without restriction on disclosure; or (d) independently developed at any time by or for VIETSOVPETRO or an Affiliate thereof by someone who had no access to the confidential information in point. The Parties agree that: (i) specific information disclosed pursuant to the foregoing provisions of this Section 2.16.8 shall not be deemed to be within any of the above four exclusions ((a) to (d) inclusive) merely because it is embraced by more general data and information within one of the exclusions; and (ii) particular combinations of information shall not be deemed to be within any of the above four exclusions ((a) to (d) inclusive) merely because the individual parts in uncombined form are within one of the exclusions. 2.16.9 SUBCONTRACTOR shall retain all Proprietary Data prepared or developed in the course of performance of the Work and any other technical data or information it develops as part of the Work for three (3) years after Final Acceptance. Prior to disposing securely of or destroying any such Data, SUBCONTRACTOR shall notify VIETSOVPETRO of its intent to so do. VIETSOVPETRO shall have seventy (70) days from receipt of SUBCONTRACTOR‟s notification to request SUBCONTRACTOR to forward such Data to VIETSOVPETRO at VIETSOVPETRO‟s expense. 2.16.10 The provisions of this Section 2.16 shall survive the Subcontract Term. 2.17 Insurance 2.17.1 (a) At all times Work is being performed hereunder, including rectification of defective and nonconforming Work pursuant to Section 2.13, and including those periods after Provisional Acceptance when SUBCONTRACTOR and Subcontractors or Suppliers are at the Installation Site completing Punchlist items or for purposes of Section 2.13, SUBCONTRACTOR shall, at its own expense, maintain insurance coverage of the types and with limits of liability not less than those set out below: (i) Insurance in the types and amounts which SUBCONTRACTOR is obligated to carry under all applicable workers‟ compensation and occupational disease laws and which shall cover all of SUBCONTRACTOR‟s employees performing work under the Subcontract at any location, and which shall include all maritime endorsements required hereunder. In addition, SUBCONTRACTOR shall carry employer‟s liability or equivalent insurance with limits of not less than US$100,000 (US Dollars one hundred thousand) per occurrence. (ii) General public liability insurance or third party liability insurance with a combined bodily injury and property damage limit of not less than US$5,000,000 (US Dollars five Page 59 of 90
    • Vietsovpetro Draft contract million) per occurrence. Such insurance shall include blanket general liability coverage for all liability assumed by SUBCONTRACTOR under the terms of this Subcontract with limits of liability not less than those set out above. (iii) Automobile liability insurance in respect of owned, hired and non-owned motor vehicles used in connection with the performance of the Work in the types and amounts which SUBCONTRACTOR is obligated to carry under Applicable Law, subject to a combined bodily injury and property damage limit of not less than US$100,000 (US Dollars one hundred thousand) per occurrence. (iv) If applicable, aviation liability insurance in respect of the hire, charter, or lease, in connection with the performance of the Work, of any fixed wing aircraft and helicopters and the like, subject to a combined bodily injury and property damage limit of not less than US$10,000,000 (US Dollars ten million) per occurrence. (v) Hull and Machinery insurance for all vessels owned, hired, chartered, or leased by SUBCONTRACTOR Group in the performance of the Work in an amount equal to the agreed value of each such vessel, with the vessel‟s charterer‟s and/ or owner‟s limitation of liability clause to be deleted. (vi) All vessels owned by SUBCONTRACTOR and used in the performance of the Work shall be covered by watercraft liability insurance with a limit per occurrence of not less than US$10,000,000 (US Dollars ten million). SUBCONTRACTOR shall cause the owners of all vessels hired, chartered, or leased by SUBCONTRACTOR Group and used in the performance of the Work to be covered for protection and indemnity risks, including pollution, in accordance with the owners‟ usual insurance to customary, reasonable limits but in any case with a limit per occurrence of not less than US$1,500,000 (US Dollars one million five hundred thousand) for cargo barges, US$3,000,000 (US Dollars three million) for motor vessels (e.g. tugs, crew boats, supply boats) and US$10,000,000 (US Dollars ten million) for construction work barges (e.g. hook-up support and accommodation vessels). Such coverage shall be provided by insurers of good repute in the international insurance markets, or by a full entry in one of the International Group of Protection and Indemnity Clubs, such as the Gard or the Britannia Clubs. (vii) Vessel pollution liability insurance for all vessels owned by SUBCONTRACTOR and used in the performance of the Work for the duration of its operations on the Subcontract with a limit of not less than US$5,000,000 (US Dollars five million) per occurrence and in the aggregate to cover property damage, cleanup and containment due to sudden and accidental pollution emanating from SUBCONTRACTOR‟s vessels. (viii) Such other types and amounts of insurance as SUBCONTRACTOR is required to carry by the laws and regulations of the Socialist Republic of Vietnam and any other applicable jurisdiction where the Work shall be performed. (b) The policies listed in Sections 2.17.1(a)(v) and (vi) shall show appropriate navigational limits and shall provide coverage for full collision liability, and cost of removal of debris coverage. (c) SUBCONTRACTOR shall arrange for all of the policies under Section 2.17.1(a) (except the workers‟ compensation policy and the employer‟s liability or equivalent insurance described in Section 2.17.1(a)(i); and except the aviation liability insurance policy described in Section 2.17.1(a) in the event SUBCONTRACTOR‟s insurers can demonstrate that such endorsement is never provided) to be endorsed to show or contain provisions which operate to include Page 60 of 90
    • Vietsovpetro Draft contract VIETSOVPETRO Group and Company Group as additional insureds to the extent that VIETSOVPETRO Group and Company Group incurs any claims or liabilities arising out of or in connection with the Subcontract for which SUBCONTRACTOR, and only to the extent that, SUBCONTRACTOR is obligated to indemnify, hold harmless and/ or defend claims or suits against VIETSOVPETRO and Company under the Subcontract. (d) To the extent permissible by Applicable Law, the policies listed in Section 2.17.1(a) shall contain: (i) a waiver of subrogation in favour of VIETSOVPETRO Group and Company Group but only to the extent that, SUBCONTRACTOR is obligated to indemnify, hold harmless and/ or defend claims or suits against VIETSOVPETRO and Company; (ii) cross liability/ severability of interests provisions (applicable to liability policies only); and (iii) a provision that they are primary with regard to liabilities insured by such policy and for which SUBCONTRACTOR is obligated to indemnify, hold harmless and/ or defend claims or suits against VIETSOVPETRO and Company without right of contribution from any other insurance carried by VIETSOVPETRO Group and Company Group. Provided, however, that if SUBCONTRACTOR carries and maintains any insurance policy that by itself fully satisfies the minimum limits requirements of Section 2.17.1(a) and all other requirements of Section 2.17.1, the provisions of Section 2.17.1(c) and this Section 2.17.1(d) shall not apply to any other insurance policy that SUBCONTRACTOR may happen to carry and maintain. (e) Unless otherwise specifically stated, the insurance limits listed above are established by VIETSOVPETRO as minimum limits. VIETSOVPETRO‟s insurance requirements are not to be considered indicative of the ultimate amounts and types of insurance that SUBCONTRACTOR may need. Neither failure to comply nor full compliance with the insurance provisions of this Subcontract shall limit or relieve SUBCONTRACTOR from holding VIETSOVPETRO Group and Company Group harmless in compliance with the indemnity provisions of the Subcontract. 2.17.2 All insurance to be carried by SUBCONTRACTOR shall be written by financially sound, internationally reputable insurance companies approved by VIETSOVPETRO, which approval shall not be unreasonably withheld. Prior to commencement of each element of the Work, SUBCONTRACTOR shall furnish to VIETSOVPETRO certificates of insurance listing all policies required herein that pertain to the particular element of the Work and that SUBCONTRACTOR has not previously furnished to VIETSOVPETRO. All certificates shall be signed by authorized representatives of the insurance companies; and provide for not less than thirty (30) Days written notice to SUBCONTRACTOR, who must immediately notify VIETSOVPETRO in writing of any such notice, in the event of impending expiration, cancellation or material change affecting VIETSOVPETRO‟s interests. 2.17.3 SUBCONTRACTOR shall promptly notify VIETSOVPETRO of any incident arising out of the Work resulting in injury to or death of persons, or damage to or loss of property, materials or equipment where the amount of such damage or loss is US$1,000,000 (US Dollars one million) or more or where such loss or damage will or could affect the critical path of the Subcontract Schedule. Said notification shall be given verbally to VIETSOVPETRO‟s Project Manager or designated representative at the particular Site as soon as is reasonably possible to do so, and in any event within twelve (12) hours, and shall be given in writing to VIETSOVPETRO within eighteen (18) hours of SUBCONTRACTOR becoming aware of the incident. SUBCONTRACTOR shall promptly provide VIETSOVPETRO and representatives of Page 61 of 90
    • Vietsovpetro Draft contract VIETSOVPETRO‟s insurers, at no charge, with such information as they may reasonably require in respect of any such incident. 2.17.4 To the extent reasonably practicable, SUBCONTRACTOR shall require every Subcontractor and Supplier to carry or cause to be carried and pay for insurance policies consistent with the requirements set forth above (including the requirements as to the type of insurance and that VIETSOVPETRO Group and Company Group be named as additional insureds to the extent necessary to provide coverage in respect of liabilities for which SUBCONTRACTOR is obligated under the Subcontract to indemnify, hold harmless and/or defend claims or suits against VIETSOVPETRO and Company and that the policies contain a waiver of subrogation in favour of VIETSOVPETRO Group and Company Group to the extent that SUBCONTRACTOR is obligated under the Subcontract to indemnify, hold harmless and/or defend claims or suits against VIETSOVPETRO and Company), and any other insurance in the types and amounts that SUBCONTRACTOR or any such Subcontractor or Supplier may be obliged to carry under local statutes. Without prejudice to Section 2.15, SUBCONTRACTOR shall defend and indemnify VIETSOVPETRO Group and Company Group against any claims, costs and expenses whatsoever arising in the event of any Subcontractor or Supplier not carrying insurance policies consistent with the requirements set forth above in this Section 2.17. 2.17.5 (a) VIETSOVPETRO will use all reasonable efforts to cause the insurers and underwriters thereof of any relevant policy maintained by VIETSOVPETRO in regard to Project Property to waive their rights of subrogation against SUBCONTRACTOR Group to the extent that VIETSOVPETRO has, pursuant to Section 2.13 and/ or Section 2.15, assumed liability for or agreed to indemnify SUBCONTRACTOR from physical loss or physical damage to Project Property. (b) To the extent permissible by Applicable Law, VIETSOVPETRO will use all reasonable efforts to cause any insurance maintained by VIETSOVPETRO to cover VIETSOVPETRO Group Property and/ or VIETSOVPETRO Group Personnel and/ or liabilities from which VIETSOVPETRO has agreed in the Subcontract to indemnify and hold harmless SUBCONTRACTOR Group to be suitably endorsed to provide for waiver of insurers‟ and underwriters‟ rights of subrogation against SUBCONTRACTOR Group to the extent that VIETSOVPETRO has assumed liability or agreed to indemnify SUBCONTRACTOR under the Subcontract. 2.18 Default and Termination 2.18.1 Default by SUBCONTRACTOR (a) Any of the following shall constitute grounds for VIETSOVPETRO to terminate the Subcontract, or any part thereof: (i) SUBCONTRACTOR neglects, delays in a significant way or discontinues the Work without the written consent of VIETSOVPETRO (other than as expressly provided or permitted under the Subcontract), including failure to take the actions required of SUBCONTRACTOR pursuant to Section 2.7 when VIETSOVPETRO has issued a Notice of Schedule Delay under Section 2.7.2; (ii) SUBCONTRACTOR violates any material provisions of this Subcontract; (iii) VIETSOVPETRO becomes, or may reasonably be expected to become, entitled to the maximum amount of Delay Liquidated Damages pursuant to Section 2.9.3; Page 62 of 90
    • Vietsovpetro Draft contract (iv) SUBCONTRACTOR furnishes false records or if any material representation or warranty of SUBCONTRACTOR is incorrect as of the date made, including any material falsity or incorrectness, whether deliberate or not, of records, representations or warranties included by SUBCONTRACTOR in its tender for the Work submitted to VIETSOVPETRO; (v) SUBCONTRACTOR, an Indemnitor or a Significant Subcontractor, or its or their consortium or joint venture, goes into liquidation, makes an arrangement, composition or compromise with its creditors or has a receiver appointed in respect of the whole or any part of its assets; or any equivalent occurs under the Applicable Law of the country governing SUBCONTRACTOR, Indemnitor or the relevant Subcontractor, or its or their consortium or joint venture; or (vi) the voluntary or involuntary dissolution and termination of any consortium, partnership or joint venture performing all or any material portion of the Work, including as a Significant Subcontractor. Provided, however, that VIETSOVPETRO shall not terminate the Subcontract unreasonably pursuant to this Section 2.18.1 on the grounds of SUBCONTRACTOR‟s delay in such circumstances as: (A) (B) (b) where SUBCONTRACTOR has substantially and satisfactorily completed offshore installation Work before the end of one industry-recognized offshore working season such that only minor Work remains to be completed in the next following offshore working season; or where termination would not be conducive to appreciably earlier recovery from or mitigation of the delay to the Work. SUBCONTRACTOR shall promptly notify VIETSOVPETRO in writing if any of the events described in Section 2.18.1(a)(v) or Section 2.18.1(a)(vi) occurs. Otherwise, VIETSOVPETRO shall provide SUBCONTRACTOR written notice of a failure to perform referred to in Section 2.18.1(a) occurring. SUBCONTRACTOR shall have no more than ten (10) Days following its notification to VIETSOVPETRO or receipt of said notice of failure to perform, whichever is applicable, to remedy such failure, unless VIETSOVPETRO, acting reasonably, and SUBCONTRACTOR agree that SUBCONTRACTOR will require a longer period acceptable to VIETSOVPETRO to remedy such failure to perform. VIETSOVPETRO will confirm such agreement in writing, acting reasonably in stipulating the period within which SUBCONTRACTOR is to remedy the failure to perform. SUBCONTRACTOR shall promptly and diligently commence to take steps satisfactory to VIETSOVPETRO to remedy the failure to perform and shall fully remedy such failure within the period stipulated by VIETSOVPETRO. Provided, however, that: (i) any of the occurrences referred to in Section 2.18.1(a)(v) and (vi) in respect of SUBCONTRACTOR or an Indemnitor shall constitute an “Insolvency Event of Default” that shall entitle VIETSOVPETRO to terminate this Subcontract immediately, having given due consideration to the following provisions of this Section 2.18.1(b); (ii) if there is more than one constituent member of SUBCONTRACTOR, in the case of an occurrence referred to in Section 2.18.1(a)(v) or Section 2.18.1(a)(vi)affecting an individual constituent member of SUBCONTRACTOR, the other constituent members of SUBCONTRACTOR may themselves take over its duties, obligations, and responsibilities or they may introduce a new constituent member of Page 63 of 90
    • Vietsovpetro Draft contract SUBCONTRACTOR to become, by novation, a further signatory to this Subcontract to take over such duties, obligations, and responsibilities, subject in each case to VIETSOVPETRO‟s prior written approval, not to be unreasonably withheld; (iii) in the case of an occurrence referred to in Section 2.18.1(a)(v) or Section 2.18.1(a)(vi) affecting a Significant Subcontractor, VIETSOVPETRO shall allow SUBCONTRACTOR a reasonable opportunity to find a suitable replacement; (iv) the time periods set out in this Section 2.18.1(b) for SUBCONTRACTOR to remedy a failure to perform shall not apply where such failure cannot be remedied. (c) If SUBCONTRACTOR, in the sole and reasonable judgment of VIETSOVPETRO, does not diligently do everything reasonably practicable to correct a failure to perform referred to in Section 2.18.1(a) within the pertinent time period, if applicable, VIETSOVPETRO shall have the right, but not the obligation, at any time thereafter, to terminate this Subcontract, or any part thereof, by giving written notice to that effect. Such termination shall be effective on the date SUBCONTRACTOR receives such termination notice, whereupon VIETSOVPETRO may enter SUBCONTRACTOR‟s and any Subcontractor‟s or Supplier‟s premises to take possession of the SUBCONTRACTOR‟s Supply and the Contract Objects and/or Subcontract Objects or any portion thereof, and any VIETSOVPETRO Furnished Material. Upon taking such possession, VIETSOVPETRO shall have the right, but not the obligation, to complete the Work, or the part of the Work terminated hereunder, or any portion thereof, or to have the Work, or the part of the Work terminated hereunder, or any portion thereof, completed by another contractor, and to deduct costs of such completion from any amounts owing under this Subcontract. Such actions by VIETSOVPETRO shall be in addition to, and not to the exclusion of, legal remedies available to VIETSOVPETRO to enforce VIETSOVPETRO‟s rights and SUBCONTRACTOR‟s obligations, as such rights and obligations are expressly set forth or provided for in the Subcontract, for SUBCONTRACTOR‟s failure to perform under this Subcontract. Such legal remedies available to VIETSOVPETRO shall be those of enforcement (including, without limitation, writs and injunctions) and shall not include other legal remedies at law or otherwise. (d) (i) Any provision of Section 2.18.1(a), Section 2.18.1(c), or elsewhere in this Section 2.18 that stipulates that an act or failure to act by SUBCONTRACTOR, or an occurrence affecting SUBCONTRACTOR, shall be grounds for VIETSOVPETRO to terminate the Subcontract or any part thereof shall apply also to any such act or failure to act by, or occurrence affecting, any member of SUBCONTRACTOR Group, except where it is clear from the context of a particular provision that it is specifically intended to apply solely to SUBCONTRACTOR itself. (ii) Any provision of this Section 2.18 that refers to action to be taken by SUBCONTRACTOR to remedy or correct an act or failure to act by, or occurrence affecting, SUBCONTRACTOR shall apply also where such remedial or corrective action is to be taken by any member of SUBCONTRACTOR Group, except where it is clear from the context of a particular provision that it is specifically intended to apply solely to SUBCONTRACTOR itself. 2.18.2 VIETSOVPETRO‟s Rights (a) In the event that VIETSOVPETRO elects to terminate this Subcontract, or any part thereof, VIETSOVPETRO may employ any other person, firm or corporation (sometimes hereinafter referred to as “Replacement Contractor”) to finish the Work by whatever method VIETSOVPETRO may deem expedient. This shall include performing Work at the respective Site and using SUBCONTRACTOR Group-owned facilities, utilities, plant and equipment Page 64 of 90
    • Vietsovpetro Draft contract pursuant to Section 2.2.7(d)(iii) where termination is pursuant to Section 2.18.1. At VIETSOVPETRO‟s option, except where termination is for VIETSOVPETRO‟s convenience pursuant to Section 2.18.3, a Replacement Contractor shall be able to use any contracts with Subcontractors and Suppliers (subject to all obligations under such contracts) as may be assigned to such Replacement Contractor pursuant to Section 2.18.4. (b) If VIETSOVPETRO terminates the Subcontract, or any part thereof, pursuant to Section 2.18.1, VIETSOVPETRO shall be required to mitigate reasonably the cost for completion of the Work but may make such expenditures as in VIETSOVPETRO‟s sole and reasonable judgment will best accomplish the proper and timely completion of Work. Provided, however, that VIETSOVPETRO shall not be required or expected to mitigate any such costs by terminating, repudiating or renegotiating any Subcontract entered into between SUBCONTRACTOR and any Subcontractor or Supplier (including, without limitation, any Subcontractor or Supplier that is an Affiliate of SUBCONTRACTOR). (c) Furthermore, where VIETSOVPETRO terminates this Subcontract, or any part thereof, pursuant to Section 2.18.1, SUBCONTRACTOR shall provide VIETSOVPETRO, any Replacement Contractor, Subcontractors or Suppliers with every reasonable assistance and with the right to continue to use (subject to reasonable proprietary restrictions) any and all patented and/ or proprietary information that SUBCONTRACTOR Group has rights to use, which VIETSOVPETRO deems necessary to complete the Work. If VIETSOVPETRO terminates the Subcontract, or any part thereof, other than pursuant to Section 2.18.1, VIETSOVPETRO shall pay SUBCONTRACTOR fair and reasonable compensation for such assistance and VIETSOVPETRO‟s right to use such information shall be subject to appropriate and reasonable confidentiality undertakings. (d) In the event of termination of the Subcontract, or of any part(s) of the Subcontract, pursuant to Section 2.18.1, VIETSOVPETRO shall have the right to withhold payment of any amounts otherwise due to SUBCONTRACTOR until SUBCONTRACTOR‟s entitlement to payment, if any, has been determined in accordance with Section 2.18.5. 2.18.3 Termination for VIETSOVPETRO‟s Convenience VIETSOVPETRO may terminate this Subcontract in whole or in part at any time by written notice thereof to SUBCONTRACTOR and SUBCONTRACTOR shall, unless the notice directs otherwise, comply with the relevant items set forth in Section 2.18.4. SUBCONTRACTOR‟s compensation shall be determined in accordance with Section 2.18.7. 2.18.4 SUBCONTRACTOR‟s Obligations. (a) If VIETSOVPETRO elects to terminate this Subcontract, or any part thereof, SUBCONTRACTOR shall, at VIETSOVPETRO‟s request, perform the following services in relation to the Work, or such part(s) of the Work, affected by such termination: (i) immediately cease all further Work, except such Work as VIETSOVPETRO may specify in the termination notice for the sole purpose of properly protecting and securing that part of the Work already executed; (ii) assist VIETSOVPETRO in preparing an inventory of all SUBCONTRACTOR‟s Supply in use or in storage at all Sites; (iii) terminate all contracts with Subcontractors and Suppliers, except those to be assigned to VIETSOVPETRO or a Replacement Contractor pursuant to Section 2.18.4(a)(iv); Page 65 of 90
    • Vietsovpetro Draft contract (iv) assign to VIETSOVPETRO, or to any Replacement Contractor designated by VIETSOVPETRO, without any right to compensation, title to all Work not already owned by VIETSOVPETRO, together with (except where termination is for VIETSOVPETRO‟s convenience pursuant to Section 2.18.3) all contracts with Subcontractors and Suppliers and other contractual agreements (including warranties) as may be designated by VIETSOVPETRO, all of which contracts and contractual agreements shall be so assignable; (v) assign to VIETSOVPETRO to the extent assignable any and all issued permits, licences, authorizations, approvals, patents and other proprietary rights then held by SUBCONTRACTOR pertaining to the Work; (vi) permit VIETSOVPETRO and any Replacement Contractor(s) to use any SUBCONTRACTOR-owned facilities, utilities, plant and equipment at any Construction Site or Fabrication Site, pursuant to Section 2.2.7(d)(iii); (vii) remove from the Installation Site all SUBCONTRACTOR‟s Spread, items furnished by SUBCONTRACTOR that are not required by VIETSOVPETRO, and rubbish attributable to SUBCONTRACTOR Group, as VIETSOVPETRO may request; (viii) deliver to VIETSOVPETRO all associated design and other information prepared to date, by or on behalf of SUBCONTRACTOR, Subcontractors or Suppliers for the Contract Objects and/or Subcontract Objects as may be requested by VIETSOVPETRO for the completion and/ or operation of the Contract Objects and/ or Subcontract Objects; and (ix) to the extent possible, arrange for VIETSOVPETRO‟s use (and/ or any Replacement Contractor‟s use, except where termination is for VIETSOVPETRO‟s convenience pursuant to Section 2.18.3) of any proprietary components needed for the completion and operation of the Contract Objects and/or Subcontract Objects. (b) Further, SUBCONTRACTOR shall promptly co-operate in placing the Contract Objects and/or Subcontract Objects, all VIETSOVPETRO Furnished Material, and any SUBCONTRACTOR‟s Supply and temporary items required by VIETSOVPETRO into the full custody and control of VIETSOVPETRO or any Replacement Contractor(s), and in having the Contract Objects and/or Subcontract Objects, VIETSOVPETRO Furnished Material, and any SUBCONTRACTOR‟s Supply and temporary items required by VIETSOVPETRO removed from any Site operated or controlled by SUBCONTRACTOR or any Subcontractor or Supplier. (c) Where termination is pursuant to Section 2.18.1, SUBCONTRACTOR shall perform the services described in Section 2.18.4(a) (except those described in Section 2.18.4(a)(vi)) and Section 2.18.4(b) at SUBCONTRACTOR‟s sole cost, without contribution from VIETSOVPETRO. 2.18.5 Payment Obligations (a) If VIETSOVPETRO terminates this Subcontract pursuant to Section 2.18.1 (except as a result of an Insolvency Event of Default), VIETSOVPETRO shall have no obligation to make further payments to SUBCONTRACTOR until SUBCONTRACTOR‟s entitlement to such further payments, if any, has been determined in accordance with Section 2.18.5(d). As soon as practicable after completion of the Work, VIETSOVPETRO shall determine the amount of any extra costs incurred as a result of termination (“Extra Costs”), and provide reasonable Page 66 of 90
    • Vietsovpetro Draft contract substantiation thereof to SUBCONTRACTOR. Extra Costs shall be determined as the total sum equivalent to: (i) (ii) all reasonable and necessary expenses incurred and accrued in connection with the completion of the Work, including, without limitation, all amounts payable to SUBCONTRACTOR pursuant to Section 2.18.5(c) and all amounts charged by any Replacement Contractor to finish the Work based on the obligations such Replacement Contractor assumes under this Subcontract and under any of the contract(s) or other contractual agreement(s) that VIETSOVPETRO elects to have assigned to such Replacement Contractor pursuant to Section 2.18.4; plus (iii) Delay Liquidated Damages determined in accordance with Section 2.9 and Attachment 2-1; plus (iv) any liability or obligation of SUBCONTRACTOR Group that had accrued at the time of termination; plus (v) any additional reasonable and necessary overhead incurred and accrued by VIETSOVPETRO in connection with effecting the completion of the Work; less (vi) (b) all reasonable and necessary expenses incurred and accrued in connection with the termination of this Subcontract (including all legal fees and expenses); plus the balance of the Subcontract Price that was unpaid at the time of termination and not subsequently paid to SUBCONTRACTOR. If VIETSOVPETRO terminates this Subcontract as a result of an Insolvency Event of Default, then VIETSOVPETRO shall immediately be entitled to recover from SUBCONTRACTOR an estimate of Extra Costs on the basis of a certificate from VIETSOVPETRO‟s Project Manager as to its estimate of the amount of such Extra Costs. If on completion of the Work: (i) (ii) (c) the actual Extra Costs exceed the amount set out in the Project Manager‟s certificate, VIETSOVPETRO shall be further entitled to recover from SUBCONTRACTOR an amount equal to such excess; or the actual Extra Costs are less than the amount set out in such certificate, or there are no such Extra Costs, VIETSOVPETRO shall pay to SUBCONTRACTOR, without interest, an amount equal to the amount by which the actual Extra Costs are less than the amount actually recovered from SUBCONTRACTOR on account of such Extra Costs. With regard to the calculation of Extra Costs pursuant to Section 2.18.5(a), SUBCONTRACTOR shall be entitled to be paid the following, all subject to audit by VIETSOVPETRO pursuant to Section 2.23: (i) any unpaid portion of the Subcontract Price corresponding to that part of the Work properly executed as of the date of termination; (ii) the value of any unused or partially used SUBCONTRACTOR‟s Supply required for completion of the Work and not already paid for as part of the Subcontract Price; (iii) the value of the utilization of any part of SUBCONTRACTOR‟s Spread or SUBCONTRACTOR‟s workforce, facilities, plant, equipment and the like in completing the Work; and Page 67 of 90
    • Vietsovpetro Draft contract (iv) the costs, if any, reasonably incurred by SUBCONTRACTOR in protecting and securing the Work, any Contract Objects and/or Subcontract Objects and SUBCONTRACTOR‟s Supply and VIETSOVPETRO Furnished Material in SUBCONTRACTOR Group‟s custody. (d) As described in Section 2.18.5(a), upon termination of this Subcontract pursuant to Section 2.18.1, VIETSOVPETRO may withhold any payment to which SUBCONTRACTOR might otherwise be entitled, without interest, until Extra Costs, if any, have been determined. If on completion of the Work there are determined to be Extra Costs, SUBCONTRACTOR shall be liable for and shall pay to VIETSOVPETRO the amount of such Extra Costs upon receipt of VIETSOVPETRO‟s invoice or demand in writing therefor. (e) If VIETSOVPETRO terminates any part(s) of this Subcontract pursuant to Section 2.18.1, VIETSOVPETRO shall have no obligation to make further payments to SUBCONTRACTOR in respect of the part(s) of the Work so terminated until SUBCONTRACTOR‟s entitlement to such further payments, if any, has been determined mutatis mutandis in accordance with Sections 2.18.5(c) and (d). 2.18.6 Termination Liability In the event of termination pursuant to the provisions of this Subcontract, such termination shall be without further obligation by VIETSOVPETRO or SUBCONTRACTOR except pursuant to provisions herein which stipulate liability or which specify another continuing obligation and which provisions shall survive the Subcontract Term according to their terms, or, if applicable, as provided in Section 2.1.1(b). 2.18.7 SUBCONTRACTOR‟s Exclusive Remedy (a) SUBCONTRACTOR hereby waives any claims for Consequential Losses, including loss of anticipated profits for uncompleted Work, or any other losses of the type described in Section 2.15.10, on account of termination by VIETSOVPETRO pursuant to this Section 2.18 and shall accept as its sole remedy payment of amounts which SUBCONTRACTOR is entitled to be paid pursuant to Section 2.18.5(c). (b) The foregoing shall not limit SUBCONTRACTOR‟s obligations under Section 2.18.5 when the Subcontract has been terminated for SUBCONTRACTOR‟s default. (c) In addition, in the event that VIETSOVPETRO terminates this Subcontract in whole for convenience pursuant to Section 2.18.3, or if SUBCONTRACTOR terminates the Subcontract pursuant to Section 2.18.9, SUBCONTRACTOR shall be entitled to receive the aggregated total of: (i) a termination fee of two percent (2%) of the value of the uncompleted portion of the Work being done under Lump Sum Prices, plus (ii) the costs reasonably incurred by SUBCONTRACTOR in terminating its contracts with Subcontractors and Suppliers, unless VIETSOVPETRO agrees to take assignment thereof, in which case the costs reasonably incurred in assigning such contracts to VIETSOVPETRO and transferring affected SUBCONTRACTOR‟s Supply and Work; plus (iii) Demobilization at the applicable rates and prices set forth in Section 5.0 and, without duplication, costs reasonably incurred by SUBCONTRACTOR in removing from the Page 68 of 90
    • Vietsovpetro Draft contract Site items furnished by SUBCONTRACTOR not forming part of the Contract Objects and/or Subcontract Objects nor of SUBCONTRACTOR‟s Supply and in performing other services requested by VIETSOVPETRO pursuant to Sections 2.18.4(a) and (b). All such costs referred to in this Section 2.18.7(c) shall be subject to audit pursuant to Section 2.23. Provided always that the total of all amounts payable by VIETSOVPETRO to SUBCONTRACTOR under the Subcontract shall not exceed the Subcontract Price at the date of termination. 2.18.8 Termination Amounts (a) SUBCONTRACTOR expressly agrees that the termination amounts referred to in this Section 2.18 constitute fair and reasonable compensation for any loss, damage, cost and expense it may suffer as a result of VIETSOVPETRO‟s termination of this Subcontract pursuant to this Section 2.18. (b) SUBCONTRACTOR shall use reasonable efforts to minimize its costs of termination. If, at the date of such termination, SUBCONTRACTOR has properly purchased, prepared or fabricated off the Site any SUBCONTRACTOR‟s Supply for subsequent incorporation at the Site, VIETSOVPETRO shall have the option of having such SUBCONTRACTOR‟s Supply or that portion of SUBCONTRACTOR‟s Supply prepared or fabricated delivered to the Site or to such other place as VIETSOVPETRO shall reasonably direct. (c) Subject to Section 2.18.5(d) and (e), payments for termination under this Section 2.18 shall be due to SUBCONTRACTOR within forty-five (45) Days following VIETSOVPETRO‟s receipt of a properly substantiated invoice and of any such SUBCONTRACTOR‟s Supply referred to in Section 2.18.8(b) (provided that the amounts previously paid to SUBCONTRACTOR shall be deducted from the termination amount due pursuant to Section 2.18.7, together with deduction of any Extra Costs determined pursuant to Section 2.18.5). All Work in progress and other SUBCONTRACTOR‟s Supply that was specifically produced for this Subcontract and cancelled and not returned to SUBCONTRACTOR‟s, Subcontractor‟s or Supplier‟s stock and for which VIETSOVPETRO has made payment shall be the property of VIETSOVPETRO and shall be disposed of according to VIETSOVPETRO‟s instructions (full title to Work in progress shall pass to VIETSOVPETRO upon payment of the net cancellation charge, unless title has already passed to VIETSOVPETRO in accordance with this Subcontract). 2.18.9 Default by VIETSOVPETRO If VIETSOVPETRO goes into liquidation, makes an arrangement, composition or compromise with its creditors or has a receiver appointed in respect of the whole of any part of its assets; or any equivalent occurs under the Applicable Law of the country governing VIETSOVPETRO, this shall constitute a default of VIETSOVPETRO under this Subcontract. SUBCONTRACTOR shall provide VIETSOVPETRO written notice of such default, and VIETSOVPETRO shall have fifteen (15) Days (or such longer period as may be agreed in writing by SUBCONTRACTOR, acting reasonably, and VIETSOVPETRO) to remedy such default following receipt of SUBCONTRACTOR‟s notice. If VIETSOVPETRO fails to remedy its default within such fifteen (15) Day or agreed longer period, SUBCONTRACTOR shall be entitled to terminate this Subcontract upon written notice to VIETSOVPETRO. In such case, SUBCONTRACTOR shall be entitled to receive from VIETSOVPETRO the same sum as if VIETSOVPETRO had terminated this Subcontract for its convenience pursuant to Section 2.18.3. 2.19 Dispute Resolution Page 69 of 90
    • Vietsovpetro Draft contract 2.19.1 Negotiation of Claims, Disputes and Controversies (a) In the event of any claim, dispute or controversy (“Dispute”) arising out of or relating to this Subcontract that the Parties have been unable to settle or agree upon within a period of sixty (60) days (or such shorter or longer period as the Parties may mutually agree) after written notice of the Dispute has been given by one Party to the other, each Party shall nominate a senior officer of its management who shall participate in a further negotiation meeting to be held at a mutually agreed time and place not later than ten (10) Days after a request for such meeting. If the Parties agree that more than one such negotiation meeting is required, the respective senior officers shall participate in each such meeting. All negotiations pursuant to this Section 2.19.1 shall be confidential and treated as compromise and settlement negotiations and shall not be admissible in any arbitration or other proceeding. Each Party shall pay its own fees and expenses associated with the negotiations pursuant to this Section 2.19.1. (b) If resolution of a Dispute is not obtained within fifteen (15) days after the final negotiation meeting involving senior officers, and the Parties have not otherwise agreed in writing, either Party may then, by notice to the other, submit the Dispute to an Independent Expert or to arbitration in accordance with the provisions of this Section 2.19. 2.19.2 Independent Expert (a) Any Dispute arising out of or relating to this Subcontract or the breach or termination thereof that is not settled in accordance with the provisions of Section 2.19.1 and that is of a technical nature (such as differences of opinion as to whether particular activities form part of the Work) may be referred to the Independent Expert as set forth below. (b) The Independent Expert shall be a suitably qualified firm that shall be mutually agreed by VIETSOVPETRO and SUBCONTRACTOR (both Parties acting reasonably) at the time of a Dispute, and that has industry-recognized competence in the subject matter of the Dispute. The Independent Expert shall conduct any proceedings related to resolution of the Dispute in Singapore (or such other location as the Parties may agree in writing), in English. A Party referring a Dispute to the Independent Expert shall notify the other Party and the Independent Expert, which notice shall indicate the following terms to be accepted by the Independent Expert: (i) the Independent Expert shall resolve the Dispute in accordance with the laws of England; (ii) documentary evidence does not require legalization certificates, unless the Independent Expert would doubt the veracity of a given document; and (iii) the Independent Expert shall resolve the Dispute within a period no greater than thirty (30) Business Days. (c) Each Party shall use all reasonable efforts to cooperate in any investigation conducted by the Independent Expert relating to a given Dispute. The Independent Expert shall act as an expert and not as an arbitrator, and the English Arbitration Act 1996, Singapore International Arbitration Act (Cap 143A) or any other arbitration laws shall not apply to the proceedings or to the determinations of the Independent Expert. Each Party shall pay fifty percent (50% of the costs of the Independent Expert. (d) If the Independent Expert fails to deliver its decision within the period set forth above, any Party shall have the right to refer the Dispute to arbitration in accordance with Section 2.19.3. If the Independent Expert is not available to resolve a given Dispute, such Dispute shall be referred for Page 70 of 90
    • Vietsovpetro Draft contract resolution to an alternative firm of recognized expertise in the applicable field, mutually acceptable to the Parties. If the Parties are unable to agree on such alternative firm on or before the fourteenth (14th) day following notice of such Dispute, any Party shall have the right to refer the Dispute to arbitration in accordance with Section 2.19.3. (e) The decision of the Independent Expert shall be binding on the Parties unless a Party notifies the other Party in writing within thirty (30) Business Days after the Independent Expert has delivered its decision that such Party intends to submit the Dispute to arbitration in accordance with Section 2.19.3. 2.19.3 Arbitration Resolution Any Dispute arising out of or relating to this Subcontract or the breach or termination thereof that is not settled in accordance with the provisions of Section 2.19.1 or 2.19.2, as the case may be, shall be submitted to binding arbitration in Singapore under the auspices of the Singapore International Arbitration Centre ("SIAC"), upon the request of either Party with notice to the other Party. (a) There shall be three (3) arbitrators. Each Party shall select one arbitrator within thirty (30) days after giving or receiving the demand for arbitration. Such arbitrators shall be freely selected, and the Parties shall not be limited in their selection to any prescribed list. SIAC shall select the third arbitrator. If a Party does not appoint an arbitrator who has consented to participate within thirty (30) days after the selection of the first arbitrator, the relevant appointment shall be made by SIAC. (b) The arbitration proceedings shall be conducted in English. The arbitration tribunal shall apply the rules of arbitration of the United Nations Commission on International Trade Law in effect on the date of the signing of this Subcontract. However, if such rules are in conflict with the provisions of this Section 2.19.3, including the provisions concerning the appointment of arbitrators, the provisions of this Article 2.19.3 shall prevail. (c) In deciding the substance of any such claim, dispute or disagreement, the arbitrators shall apply the substantive laws of England. Provided, however, that the arbitrators shall have no authority to award punitive damages under any circumstances (whether exemplary damages, treble damages, or any other penalty or punitive type of damages) regardless of whether such damages may be available under English, the Parties hereby waiving their right, if any, to recover punitive damages in connection with any Dispute. (d) Each Party shall cooperate with the other Party in making full disclosure of and providing complete access to all information and documents requested by the arbitrators, either on the arbitrators own motion or at the request of the other Party in connection with such proceedings, subject only to any confidentiality obligations binding on such Party; provided always that the arbitrators and the Parties shall take into account principles of legal privileges, including those involving the confidentiality of communications between a lawyer and a client. (e) The arbitral award shall be final and binding upon both Parties shall be rendered in writing and set forth in reasonable detail the facts of the dispute and the reasons for the arbitrators‟ decision and judgment thereon may be entered in any court having jurisdiction for its enforcement. The Parties hereby renounce their rights under the laws of England, Singapore, the Socialist Republic of Vietnam, and any other territory to appeal from the decision of the arbitral panel (including rights under section 69 of the Arbitration Act 1996 and any equivalent provision of any Applicable Law that would otherwise give the right to appeal the decision of the arbitral panel). The Parties further renounce their rights to apply to the court Page 71 of 90
    • Vietsovpetro Draft contract to determine any question of law pursuant to section 45 of the Arbitration Act 1996 and any other equivalent provision of any Applicable Law. The costs of the arbitration shall be as fixed by the arbitration tribunal. (f) All notices to be given in connection with the arbitration shall be in writing. All notices shall be sent by registered mail or courier service, return receipt requested, to the respective address set out in Section 2.31.1 and Attachment 2-1. 2.19.4 Arbitration Award The award referred to in Section 2.19.3(c) shall be made in US Dollars free of any tax or any other deductions (except for the apportionment of arbitration costs, if applicable). The award shall include non-compounded interest from the date of any breach or other violation of this Subcontract to the date when the award is paid in full. Interest shall be calculated on the basis of the 3-month London InterBank Offered Rate (LIBOR) for US Dollars plus one percentage point (one hundred basis points) for the period. The calculation for each calendar month shall use the weighted average LIBOR rate for that month. 2.19.5 Continuation of Services Pending final resolution of any Dispute, whether or not submitted to the Independent Expert or arbitration hereunder, VIETSOVPETRO and SUBCONTRACTOR shall continue to fulfill their respective obligations hereunder. 2.20 Safety, Health and Environment 2.20.1 VIETSOVPETRO‟s and Company‟s safety and occupational health philosophy, principles, and practices shall apply to all contractors performing Work at Sites owned, leased, or controlled by VIETSOVPETRO and Company, and shall apply to the fullest extent practical at all other Sites where Work is being performed for VIETSOVPETRO and Company or where VIETSOVPETRO and Company personnel are involved. 2.20.2 (a) SUBCONTRACTOR, during the performance of the Work, shall be subject to the health and safety rules and regulations prescribed by VIETSOVPETRO and Company and all applicable safety and health regulations and orders of any Governmental Authority having jurisdiction over the Work. (b) SUBCONTRACTOR, in addition to its general obligation to perform the Work in compliance with the VIETSOVPETRO Supplied Data, shall specifically conform to the requirements of the following Company‟s documents included: (i) CLJOC HSE Management System (Doc. No: HSE MS 2.0); (ii) Hazardous Substance Control (Doc. No: HSE MS 3.1-013); (iv) Health and Safety Guidelines as described in Attachment 2-13; and (v) Environmental Guidelines as described in Attachment 2-14 For avoidance of doubt, SUBCONTRACTOR shall comply with all the requirement of above documents on a “back to back” basis that VIETSOVPETRO does under Contract as Contractor to Company. Page 72 of 90
    • Vietsovpetro Draft contract (c) Prior to the Effective Date, SUBCONTRACTOR has reviewed and become knowledgeable of the provisions of all such safety documents, as well as others that may be listed as a condition on any permit of VIETSOVPETRO and Company or SUBCONTRACTOR for the Work. (d) SUBCONTRACTOR shall ensure that all safety-related requirements of this Subcontract are incorporated into the safety plans, procedures, and other relevant documents that SUBCONTRACTOR is to develop and use for the safety management of the Work. SUBCONTRACTOR shall present such plans, procedures, and other safety-related documents for VIETSOVPETRO‟s review and acceptance before they are issued for implementation. 2.20.3 (a) SUBCONTRACTOR shall designate in writing a qualified and experienced safety manager, supported by qualified and experienced safety professionals, to be responsible for each major phase of the Work being performed safely under the Subcontract. Said safety manager and support personnel shall: (i) be responsible for the safety of all SUBCONTRACTOR Group personnel engaged in the Work; (ii) assure that all SUBCONTRACTOR Group personnel engaged in the Work are familiar with and will apply all applicable safety and health rules and regulations; and (iii) promptly notify VIETSOVPETRO of any incident resulting in illness or injury to or death of persons or damage to or loss of any property arising out of the Work. SUBCONTRACTOR shall promptly prepare and provide VIETSOVPETRO with copies of all reports of such incidents. (b) In addition to the person(s) named pursuant to Section 2.20.3(a), SUBCONTRACTOR shall assign an individual at each major onshore or offshore Site where Work is being performed who will be responsible for ensuring compliance with the safety regulations of this Subcontract for the Work performed at that Site. The sole responsibility of this individual, who shall be assigned full time to that Site for the duration of the Work, shall be implementation and enforcement of SUBCONTRACTOR‟s safety program at that Site. SUBCONTRACTOR shall assign its own safety personnel to each Significant Subcontractor‟s Site, in addition to any safety personnel that may be assigned by the Significant Subcontractor itself. (c) SUBCONTRACTOR‟s safety management responsibilities shall include planning and executing a satisfactory programme of safety audits. Company and VIETSOVPETRO shall be entitled to participate in any safety audits conducted by SUBCONTRACTOR, and to carry out its own safety audits of any part of the Work. SUBCONTRACTOR shall co-operate fully with the Company representatives and VIETSOVPETRO representatives performing such audits. SUBCONTRACTOR shall ensure that any corrective actions identified by any safety audit are satisfactorily implemented without delay. 2.20.4 VIETSOVPETRO shall communicate all safety- and health-related matters directly to SUBCONTRACTOR‟s Project Manager unless, in VIETSOVPETRO‟s sole judgment, a situation of imminent danger exists. In this case, the most expeditious communication channel shall be used to deal with the danger. 2.20.5 (a) VIETSOVPETRO will not condone violation of the Subcontract safety regulations and any safety and health rules contained in regulations applicable to any of the Work performed. VIETSOVPETRO shall have the right, at its option and sole discretion, to terminate this Subcontract pursuant to Section 2.18.1 for any material violation of the safety regulations of this Subcontract or any safety and health rules pertaining to the Work. Page 73 of 90
    • Vietsovpetro Draft contract (b) As a means of ensuring personnel safety and health on the Work, SUBCONTRACTOR shall, upon request of VIETSOVPETRO, immediately stop Work activities in any area where, in VIETSOVPETRO‟s sole judgment, SUBCONTRACTOR is not in compliance with the safety and health requirements of this Subcontract. Except where SUBCONTRACTOR is shown to have been in compliance with such requirements, all costs of said stoppage shall be borne by SUBCONTRACTOR, and VIETSOVPETRO shall have no obligation to grant any extension to the Subcontract Schedule for delays resulting therefrom. 2.20.6 (a) SUBCONTRACTOR shall establish, operate, and maintain an environmental management system for the Work conforming to recognized international standards, such as the ISO 14000 series of standards. SUBCONTRACTOR shall manage its operations, as they have an impact on the environment, in accordance with such system, and shall ensure that all members of SUBCONTRACTOR Group establish and maintain a satisfactory environmental program specific to any Work that they will perform. (b) SUBCONTRACTOR‟s environmental management responsibilities shall include planning and executing a satisfactory programme of environmental audits. Company and VIETSOVPETRO shall be entitled to participate in any environmental audits conducted by SUBCONTRACTOR, and to carry out its own environmental audits of any part of the Work. SUBCONTRACTOR shall co-operate fully with the Company representatives and VIETSOVPETRO representatives performing such audits. SUBCONTRACTOR shall ensure that any corrective actions identified by any environmental audit are satisfactorily implemented without delay. 2.20.7 SUBCONTRACTOR shall conduct the Work in such a manner as to minimize any negative environmental impact by adhering to, at a minimum, the requirements of Applicable Law, and by following guidelines provided by VIETSOVPETRO and Company that are intended to minimize environmental damage. SUBCONTRACTOR is encouraged to implement a program to recycle materials that would otherwise be discarded as waste. SUBCONTRACTOR‟s failure to comply with the provisions of this Section 2.20.7 shall entitle VIETSOVPETRO to terminate this Subcontract pursuant to Section 2.18.1. 2.21 Taxes and Import Duties The Sub-Contractor shall be liable for and at its cost pay and cause to be paid any and all taxes and duties of whatsoever nature assessed or levied against the Contractor and its employees or agents by the competent authorities of Vietnam or any other country on account of or in relation to or in connection with the Services, excluding Value Added Tax (VAT) applicable for Vietnamese’s local Sub-Contractor Or excluding Foreign Contractors Withholding Tax (FCWT) applicable for Foreign Sub-Contractor. 2.21.1 Corporate Income, Profits and Capital Gains Taxes. SUBCONTRACTOR shall pay, and agrees to indemnify and hold VIETSOVPETRO and Company harmless from any and all claims or liability for corporate income and profits taxes (other than FCWT as stipulated in Section 2.21.2 below), capital gains taxes, and related fines, penalties and interest thereon assessed or levied against SUBCONTRACTOR by the Government of Vietnam or any political subdivision thereof or by the government of any other country against SUBCONTRACTOR or its Subcontractors and Suppliers in respect of the Work performed under this Subcontract. SUBCONTRACTOR acknowledges that any corporate income tax liability (other than FCWT as stipulated in Section 2.21.2 below) on its income from activities in Vietnam, even where part of the Work was performed offshore, will be for the account of SUBCONTRACTOR. Page 74 of 90
    • Vietsovpetro Draft contract 2.21.2 Personnel and Property Taxes. SUBCONTRACTOR shall pay, and agrees to indemnify and hold VIETSOVPETRO and Company harmless from, all taxes and related fines, penalties, and interest thereon assessed or levied against or on account of wages, salaries or other benefits paid to SUBCONTRACTOR‟s personnel or employees of its Subcontractors and Suppliers, and all taxes assessed or levied against or on account of any property or equipment of SUBCONTRACTOR, SUBCONTRACTOR‟s personnel or its Subcontractors and Suppliers including, but not limited to, any liability for Vietnam personal income tax, social insurance or health insurance of the employees of SUBCONTRACTOR and its Subcontractor and Suppliers. When requested by VIETSOVPETRO, SUBCONTRACTOR shall provide evidence that it has paid all personal income tax due on remuneration paid to SUBCONTRACTOR‟s employees. In the event that VIETSOVPETRO determines, or has reason to believe, that SUBCONTRACTOR has not met its obligations in this regard, VIETSOVPETRO shall advise SUBCONTRACTOR accordingly in writing. In such case, any payment otherwise due to SUBCONTRACTOR may be withheld by VIETSOVPETRO until SUBCONTRACTOR provides satisfactory evidence that it has fulfilled such obligations. 2.21.3 Withholding Tax. (a) SUBCONTRACTOR is solely responsible and has full and exclusive liability for compliance with the tax laws, rules and regulations of the Socialist Republic of Vietnam regarding the withholding of Foreign Contractors Withholding Tax (FCWT), including but not limited to, business income tax and value added tax levied on SUBCONTRACTOR‟s non-Vietnamese domiciled Subcontractors and Suppliers, pursuant to Circular No. 60/2012/TT-BTC (Circular 60). (b) Notwithstanding the foregoing, it is expressly stated that the Lump Sum Prices and Unit Rates entered in Section 5.0 of the Subcontract are exclusive of any such FCWT amounts required to be withheld by VIETSOVPETRO. (c) (i) If: (A) SUBCONTRACTOR has made all reasonable efforts to minimise VIETSOVPETRO‟s exposure to Foreign Contractor Withholding Tax; and (B) SUBCONTRACTOR is considered by the Government of Vietnam to be a “foreign contractor” pursuant to Circular 60; and (C) SUBCONTRACTOR has provided to VIETSOVPETRO a notarized statement from each overseas-domiciled constituent member of SUBCONTRACTOR Group intending to submit invoices to VIETSOVPETRO confirming that it does not have a permanent establishment in the Socialist Republic of Vietnam, stating its country of domicile; (D) SUBCONTRACTOR is not registered with the Government of Vietnam to follow the Vietnamese Accounting system; then subject to the provisions of Section 2.2.6, VIETSOVPETRO will pay the applicable amount on FCWT to the appropriate tax authorities in accordance with the Applicable Laws then in effect in the Socialist Republic of Vietnam. VIETSOVPETRO shall have no obligation to furnish to SUBCONTRACTOR a copy of any receipt issued by the relevant tax authority evidencing the payment on of the withholding amount. Page 75 of 90
    • Vietsovpetro Draft contract (ii) In all cases, SUBCONTRACTOR shall promptly provide any information as VIETSOVPETRO may require to determine whether invoiced amounts will be subject to FCWT under the Applicable Law of the Socialist Republic of Vietnam and, if so, the applicable rate of the FCWT. Such information shall include a notarized statement from SUBCONTRACTOR confirming that it does not have a permanent establishment in the Socialist Republic of Vietnam, stating its country of domicile (evidenced by a certificate of domicile from the tax authorities of such country). (d) SUBCONTRACTOR‟s invoices to VIETSOVPETRO shall contain adequate details so as to identify clearly any amounts not subject to FCWT under the Applicable Law of the Socialist Republic of Vietnam. (e) Not used. 2.21.4 Value Added Tax. Should any amount payable to SUBCONTRACTOR pursuant to the Subcontract be calculated by reference to any expenditure (i.e., value added tax or VAT) incurred by SUBCONTRACTOR or any of its Subcontractors and Suppliers, SUBCONTRACTOR shall make all reasonable efforts to minimize its liability to pay VAT, or other similar taxes, assessments, levies, imposts, duties, and fees and to recover any such taxes or other amounts paid. SUBCONTRACTOR shall ensure that its Subcontractors and Suppliers do the same. SUBCONTRACTOR‟s invoices shall separately itemize any such taxes, duties and fees it seeks to recover from VIETSOVPETRO. SUBCONTRACTOR shall not add any VAT paid to its Subcontractors or Suppliers to any invoice to VIETSOVPETRO. SUBCONTRACTOR may add VAT to its invoices to VIETSOVPETRO. 2.21.5 Import Duties All import taxes or import surtaxes incurred by SUBCONTRACTOR shall remain a cost of SUBCONTRACTOR except where expressly permitted otherwise hereunder or unless contrary prior agreement is reached with VIETSOVPETRO. Company is provided with an Import Tax Exemption (List of Imported Equipment) and, accordingly, the Subcontract Price is exclusive of Import Taxes and similar non-extraordinary import surtaxes or levies on SUBCONTRACTOR‟s Supply, Subcontract Objects and SUBCONTRACTOR‟s Spread imported into the Socialist Republic of Vietnam for or in relation to the Work. Therefore SUBCONTRACTOR shall be responsible to procure and, as necessary, import SUBCONTRACTOR‟s Supply, Subcontract Objects and SUBCONTRACTOR‟s Spread for or in connection with the Work in accordance with the procurement and importation procedures set forth in this Subcontract and, in particular, Sections 2.2.5 and 2.2.6. If Company‟s Import Tax Exemption (List of Imported Equipment) is cancelled or amended, for reasons not attributable to SUBCONTRACTOR, with the result that the Governmental Authorities of the Socialist Republic of Vietnam charge SUBCONTRACTOR for Import Taxes or similar non-extraordinary import surtaxes or levies on SUBCONTRACTOR‟s Supply, Subcontract Objects and SUBCONTRACTOR‟s Spread imported into the Socialist Republic of Vietnam for or in relation to the Work, VIETSOVPETRO shall itself take responsibility for such charges or promptly reimburse same to SUBCONTRACTOR. SUBCONTRACTOR is responsible for, and shall indemnify VIETSOVPETRO and Company against, any taxes, customs duties, fees, clearances, imposts, value added taxes, sales taxes or governmental charges of any kind payable in respect of the importation into, exportation from or presence in any country, other than Vietnam, of SUBCONTRACTOR‟s Supply, Subcontract Objects and SUBCONTRACTOR‟s Spread. Page 76 of 90
    • Vietsovpetro Draft contract Notwithstanding the foregoing, SUBCONTRACTOR shall be liable for any Import Taxes and other similar non-extraordinary import surtaxes or levies resulting from or arising out of (a) SUBCONTRACTOR‟s non-compliance with the procedures set out in Sections 2.2.5 and 2.2.6 and (b) SUBCONTRACTOR‟s importation of consumables, products or any items that are not covered under Company‟s Tax Exemption. In addition, SUBCONTRACTOR shall be liable for any such taxes, duties and other charges on household goods or personal effects of its and its Subcontractors‟ and Suppliers‟ personnel and any charges and fees associated with the execution of custom clearance procedures shall be for the account of SUBCONTRACTOR. 2.21.6 Excise, Sales or Use Taxes. All the Lump Sum Prices and Unit Rates in Section 5.0 are exclusive of any excise, sales or use taxes, or taxes of a similar nature that may be legally imposed on the furnishing of equipment and the Services by the Government of Vietnam or any subdivision thereof, and SUBCONTRACTOR shall not bear the amount of any such taxes for which SUBCONTRACTOR is legally liable, and any payment required to be made should be made by VIETSOVPETRO. However, for avoidance of doubt, the Lump Sum Prices and Unit Rates in Section 5.0 shall include any excise, sales or use taxes, or taxes of a similar nature that may be imposed by the Government or any political subdivisions thereof of the corporate locations of SUBCONTRACTOR‟s non-Vietnamese domiciled Subcontractors and Suppliers. 2.21.7 SUBCONTRACTOR and VIETSOVPETRO Status in Vietnam. In order to assist VIETSOVPETRO in complying with the laws of Vietnam, SUBCONTRACTOR shall inform VIETSOVPETRO in the event that SUBCONTRACTOR‟s status in Vietnam changes for any reason, including, but not limited to, VAT registration. 2.21.8 Observance of Vietnam Laws and Indemnification. SUBCONTRACTOR and its Subcontractors and Suppliers agree to observe all laws, rules, and regulations of Vietnam relating to taxes and duties, including income taxes, and including if applicable, the filing of returns, assessments of tax and the keeping and showing of books and records. SUBCONTRACTOR agrees to indemnify and hold VIETSOVPETRO and Company harmless against any and all liability and claims of whatsoever nature resulting from SUBCONTRACTOR‟s and its Subcontractors‟ and Suppliers‟ failure to pay taxes, levies and duties related to the use of its‟ equipment in Vietnam that are outside the scope of this Subcontract. SUBCONTRACTOR also agrees to indemnify and hold VIETSOVPETRO harmless against any liability arising from improper invoicing of transactions or the use of incorrect VAT invoices. 2.21.9 Provision of Assistance and Information to VIETSOVPETRO SUBCONTRACTOR shall co-operate with VIETSOVPETRO and at the request of VIETSOVPETRO, provide to VIETSOVPETRO at no additional cost, the assistance or personnel and information, documents and details, in the form and substance requested by VIETSOVPETRO, that VIETSOVPETRO requires to minimize the amount of Vietnamese Taxes and related fines, penalties and interest thereon that VIETSOVPETRO is obliged to pay in Vietnam or that VIETSOVPETRO is obliged to reimburse SUBCONTRACTOR under Section 2.21.3 hereinabove. This assistance and information will be in relation to Vietnamese taxes generally, and including but not limited to, business income tax and value added tax pursuant to Circular 60. Page 77 of 90
    • Vietsovpetro Draft contract 2.21.10 SUBCONTRACTOR shall pay, and shall procure that its Subcontractors shall pay all taxes, duties, levies, charges and contributions (and any interest and penalties thereon) as imposed by any governmental authority in connection with the performance of any part of the Work. 2.21.11 The provisions of this Section 2.21 shall survive the Subcontract Term. 2.22 Assignment and Subcontracting 2.22.1 SUBCONTRACTOR shall not assign this Subcontract or all or any portion of the Work without VIETSOVPETRO‟s prior written consent. VIETSOVPETRO will not withhold such consent unreasonably where the proposed assignment is to an Affiliate of SUBCONTRACTOR or as part of a bona fide corporate re-organization that in either case could not reasonably be expected to adversely affect VIETSOVPETRO or the Work. Assignment shall not relieve SUBCONTRACTOR of any responsibility for fulfilment of its Subcontract obligations. 2.22.2 SUBCONTRACTOR shall not subcontract all of the Work, and it shall not subcontract any portion of the Work without the prior written consent of VIETSOVPETRO given in accordance with the provisions of Section 2.2.3. Subcontracting shall not relieve SUBCONTRACTOR of any responsibility for fulfilment of its Subcontract obligations. SUBCONTRACTOR shall keep VIETSOVPETRO fully informed regarding its plans for proposed subcontracting, including associated construction of SUBCONTRACTOR‟s Supply other than Reimbursable Material, so as to enable VIETSOVPETRO to designate the relevant subcontracts and purchase orders for which the applicable Subcontractors and Suppliers, when determined, will be deemed to be Significant Subcontractors. VIETSOVPETRO, acting reasonably, will be entitled to designate the scope of any subcontract or purchase order as being applicable to a Significant Subcontractor. 2.22.3 VIETSOVPETRO and its subsequent assignees shall have the right to assign or novate this Subcontract and all rights and obligations incident thereto to any of VIETSOVPETRO‟s Affiliates, subject to SUBCONTRACTOR agreement which shall not be unreasonably withheld. VIETSOVPETRO and its subsequent assignees shall have the right freely to assign or novate this Subcontract and all rights and obligations incident thereto to any of Company and Company‟s Affiliates. VIETSOVPETRO shall give SUBCONTRACTOR written notice of any such assignment or novation. 2.23 Audit 2.23.1 SUBCONTRACTOR shall maintain, and cause each Subcontractor and Supplier to maintain, a true and correct set of records pertaining to all Work for a period of three (3) years after cessation of the Work. Such records shall include, but not be limited to, copies of the time sheets, invoices, and other documentation supporting SUBCONTRACTOR‟s invoices. 2.23.2 During such period, VIETSOVPETRO and/or Company or its duly authorized representative(s) shall have the right at all reasonable times to inspect and audit all such records for the purpose of (a) verifying compliance with Section 2.32 and (b) verifying the cost of all Reimbursable Work, and the amount of time that SUBCONTRACTOR‟s labour and any other item chargeable on a unit of time basis is furnished for the performance of the Work. VIETSOVPETRO shall not have the right to audit the composition of agreed Lump Sum Prices, Unit Rates, Percentages or of agreed rates and prices, but it shall be entitled to obtain information reasonably necessary to verify the build-up of proposed Change Prices and of proposed rates and prices for Changes. Such information shall include the hourly wage and salary of SUBCONTRACTOR Group personnel performing Work under this Subcontract when such Work is being performed on a reimbursable basis. VIETSOVPETRO shall have the right, by prior arrangement with SUBCONTRACTOR, to obtain statements from any SUBCONTRACTOR Group Personnel to the extent it deems necessary to verify such compliance, performance and cost, and SUBCONTRACTOR shall make such personnel still under employment with SUBCONTRACTOR Group available to Page 78 of 90
    • Vietsovpetro Draft contract VIETSOVPETRO or its representative(s) at the assigned locations of said personnel. VIETSOVPETRO will notify SUBCONTRACTOR of any matters arising in an audit, which necessitate the making of an adjustment. 2.23.3 SUBCONTRACTOR shall bear all of SUBCONTRACTOR Group‟s costs incurred pursuant to this Section 2.23. 2.24 Security 2.24.1 Performance Bond (a) SUBCONTRACTOR shall provide, within ten (10) Business Days of the Effective Date or the subcontract signing date (whichever is the later), a Performance Bond in the form of Attachment 2-9, issued by a bank carrying a minimum rating of Standard & Poor‟s “A” or Moody‟s “A2”, and that is acceptable to VIETSOVPETRO. SUBCONTRACTOR shall provide a single Performance Bond in the required amount, not multiple Performance Bonds from individual constituent members of SUBCONTRACTOR. The amount of the Performance Bond shall be equivalent to five percent (5%) of the Subcontract Price as of the Effective Date of the Subcontract. (ii) VIETSOVPETRO shall be entitled to call against the Performance Bond to obtain payment of any amounts payable by or recoverable from SUBCONTRACTOR pursuant to the Subcontract. (iii) The Performance Bond shall remain valid until the date thirty (30) days after the expiration of the Warranty Period and the final Extended Warranty Period, if any, under the Subcontract. (iii) (b) (i) Each time the Subcontract Price increases by five percent (5%) or more, SUBCONTRACTOR shall promptly (and in any event within ten (10) Business Days of the increase) provide a new, amended or additional Performance Bond such that one or more Performance Bonds are in place totalling at least five percent (5%) of the current Subcontract Price under the Subcontract. If SUBCONTRACTOR does not comply with such obligation, VIETSOVPETRO shall have the right to withhold from the payment of SUBCONTRACTOR‟s invoices such amounts as may be necessary for VIETSOVPETRO to hold an amount that, when added to the amount of the existing Performance Bond(s), equals at least five percent (5%) of the current Subcontract Price. Such monies withheld shall be released upon receipt by VIETSOVPETRO of a new or amended Performance Bond in an amount equivalent to (or in the case of an additional Performance Bond, in such amount that when added to the value of the existing Performance Bond(s) aggregates to) at least five percent (5%) of the current Subcontract Price. SUBCONTRACTOR shall also be entitled to provide a new or amended Performance Bond each time the Subcontract Price decreases by five percent (5%) or more. Provided no claim whatsoever is outstanding against SUBCONTRACTOR related to the Work or the Subcontract that could reasonably be expected to permit VIETSOVPETRO to make a demand for payment under the Performance Bond (and/ or to claim funds then withheld in lieu of such Performance Bond) at each of the following dates, the amount of Performance Bond shall be reduced to (or if funds are then withheld by VIETSOVPETRO in lieu of a Performance Bond, such withheld funds shall be released to SUBCONTRACTOR so that the remaining balance equals): Page 79 of 90
    • Vietsovpetro Draft contract (i) two and a half percent (2.5%) of the final Subcontract Price as of the date of Provisional Acceptance upon the date thirty (30) days after achievement of Provisional Acceptance; (ii) two and a half percent (2.5%) of the value of the items (not to exceed five percent (5%) of the final Subcontract Price), as reasonably estimated by VIETSOVPETRO and notified to SUBCONTRACTOR in writing, giving rise to any Extended Warranty Period, upon the date thirty (30) Days after expiration of the Warranty Period; and (iii) zero (by cancellation, in the case of a Performance Bond) upon the date 30 (thirty) days after expiration of the Warranty Period and Extended Warranty Period, if any. VIETSOVPETRO shall promptly notify the issuer of the Performance Bond, in accordance with the provisions of the Performance Bond, when the amount thereof may be reduced. However, SUBCONTRACTOR may notify the issuer of the Performance Bond when the amount thereof may be reduced to zero in accordance with Section 2.24.1(b)(iii), provided that in such event SUBCONTRACTOR shall attach to its notification to the issuer a duplicate original or valid certified copy of VIETSOVPETRO‟s written notification to SUBCONTRACTOR that thirty (30) days have elapsed since the end of the Warranty Period or Extended Warranty Period, if any. (c) SUBCONTRACTOR‟s failure to provide any Performance Bond in accordance with Section 2.24 shall be grounds for VIETSOVPETRO to withhold an amount equal to the required value of such initial Performance Bond and/ or subsequent Performance Bond, as applicable, from the payment of SUBCONTRACTOR‟s invoices. Subject to VIETSOVPETRO‟s right to use the withheld monies to satisfy any SUBCONTRACTOR‟s obligation under the Subcontract, such monies shall be released upon receipt by VIETSOVPETRO of the required Performance Bond, or otherwise in accordance with Section 2.24.1(b). (d) If SUBCONTRACTOR provides a Performance Bond at any time with an expiration date earlier than the date thirty (30) days after the expiration of the Warranty Period and the Extended Warranty Period, SUBCONTRACTOR shall have the obligation to deliver to VIETSOVPETRO a replacement Performance Bond no later than thirty (30) days prior to the expiration date of the Performance Bond being replaced. If SUBCONTRACTOR fails to provide a replacement Performance Bond as required in the preceding sentence then VIETSOVPETRO shall have the right to immediately draw the full value of the Performance Bond, which VIETSOVPETRO shall hold as security for the performance by SUBCONTRACTOR of its obligations under the Subcontract. Subject to VIETSOVPETRO‟s right to use such monies to satisfy any SUBCONTRACTOR‟s obligation under the Subcontract, such monies shall be released upon receipt by VIETSOVPETRO of the required Performance Bond, or otherwise in accordance with Section 2.24.1(b). 2.24.2 Not Used 2.24.3 Parent Company/ Corporate Indemnity Agreement Within ten (10) days of signing of the Subcontract, SUBCONTRACTOR shall deliver a Parent Company/ Corporate Indemnity Agreement in the form of Attachment 2-10 guaranteeing the performance of SUBCONTRACTOR‟s obligations under this Subcontract. The Parent Company/ Corporate Indemnity Agreement shall be entered into by the Parent Company of SUBCONTRACTOR as a required indemnitor (“Indemnitor”). At least five (5) days prior to the signing day of the Subcontract and the Parent Company/Corporate Indemnity Agreement, SUBCONTRACTOR shall provide VIETSOVPETRO with the documents issued by the relevant authorities specifying the duly authorized representative of SUBCONTRACTOR and its Parent Page 80 of 90
    • Vietsovpetro Draft contract Company who have the right to sign the Subcontract and the Parent Company/Corporate Indemnity Agreement on behalf of SUBCONTRACTOR and its Parent Company respectively. SUBCONTRACTOR hereby ensures that the authorized representatives mentioned in aforesaid provided documents shall not be changed until the date on which this Subcontract and the Parent Company/Corporate Indemnity Agreement are signed. 2.25 Firearms, Alcohol, Controlled Substances and Behaviour 2.25.1 The possession of firearms and other weapons on facilities operated or occupied by VIETSOVPETRO and Company is forbidden. 2.25.2 Consuming, storing, dispensing, or otherwise making available alcoholic drinks, intoxicants, or controlled substances to anyone in any area where Work is being performed or on facilities operated or occupied by VIETSOVPETRO and Company is forbidden. 2.25.3 SUBCONTRACTOR Group personnel shall not by their improper behaviour cause a breach of peace or public disturbance or otherwise conduct themselves in a manner detrimental to the Work. 2.26 Changes 2.26.1 (a) VIETSOVPETRO has the right at any time and from time to time during the Subcontract Term to order Changes in the general scope of the Work. Unless SUBCONTRACTOR is able to substantiate to VIETSOVPETRO‟s satisfaction that such Changes would have an insurmountable impact, because of their timing or magnitude (whether individually or taken in aggregate with all other Changes to date), on succeeding work that has already been awarded to SUBCONTRACTOR, then SUBCONTRACTOR shall be obligated to implement any such Change. All such Changes that VIETSOVPETRO may elect to make shall be authorized in writing by VIETSOVPETRO in accordance with the provisions of Section 10.0 and shall be performed under the applicable terms and conditions of this Subcontract. (b) No increase in the Subcontract Price or extension to the Guaranteed Completion Date shall be granted, nor will it be a Change, if: (i) (ii) the changes requested by VIETSOVPETRO are required because of delays attributable to SUBCONTRACTOR Group; (iii) the additional services are required because of a breach of SUBCONTRACTOR‟s general warranties set forth in this Subcontract; or (iv) (c) the changes requested by VIETSOVPETRO are necessary in order for SUBCONTRACTOR to satisfy its responsibilities to make the Work compliant with the requirements as specified in this Subcontract; the change relates to reperformance of any of the Work because of SUBCONTRACTOR‟s failure to comply with applicable provisions of this Subcontract. No change in the Subcontract Price or extension to the Guaranteed Completion Date shall be granted, nor will it be a Change (with the sole exception of the issuance of any Change Order Authorisation to adjust the Subcontract Price pursuant to Section 10.8 in respect of Provisional Sums), if: (i) there is a change in quantity of Measured Work; Page 81 of 90
    • Vietsovpetro Draft contract (ii) there is a change in the type of Measured Work for which there are existing Unit Rates in the Subcontract that are applicable to the Work both prior to and after the change; (iii) there is a change in quantity of Resource Priced Work; (iv) there is a change in the type of Resource Priced Work for which there are existing Unit Rates in the Subcontract that are applicable to the Work both prior to and after the change; (v) there is a change in quantity or type of Reimbursable Work. (d) Notwithstanding the provisions of Section 2.26.1(c), a change in the basis of compensation for any item of Work between one and any other of Lump Sum Priced Work, Measured Work, Reimbursable Work, and Resource Priced Work shall constitute a Change and require the issuance of a Change Order Authorization. (e) The establishment of a new Lump Sum Price, new Unit Rate, or new Percentage (including any Star Rate agreed pursuant to Section 5.0 and effectuated in accordance with Section 10.8.6) shall constitute a Change and require the issuance of a Change Order Authorization. (f) The provisions of Section 10.3 apply to Changes requested by SUBCONTRACTOR and other matters requiring the issue of Deviation Notices by SUBCONTRACTOR. 2.26.2 If VIETSOVPETRO fails to fulfill any of its obligations under Section 2.3 then if, directly as a result of such failure, SUBCONTRACTOR suffers actual delay to activities on the critical path of the Subcontract Schedule or incurs additional costs that are not avoidable through prudent operations, then SUBCONTRACTOR shall be entitled by means of a Change Order Authorization to an adjustment to the Subcontract Schedule including extension, if any, to the Guaranteed Completion Date and recovery of such additional costs, which costs shall be determined in accordance with Section 10.0 and Section 5.0. Provided, however, that there shall be no adjustment of the Subcontract Price and Subcontract Schedule to the extent that and for so long as, at the time of VIETSOVPETRO‟s failure to fulfill its obligations, there would be additional costs or there is any concurrent delay event due to pre-existing matters within SUBCONTRACTOR‟s risk or responsibility under the Subcontract. 2.26.3 In the event of disagreement as to whether or not SUBCONTRACTOR is entitled to a Change Order Authorization, SUBCONTRACTOR shall promptly implement any written instructions given by VIETSOVPETRO in accordance with Section 10.0 pending resolution of the matter. The Parties shall keep such contemporaneous records as may reasonably be necessary, in the opinion of either Party, to support or reject any Deviation Notice or claim SUBCONTRACTOR may subsequently wish to submit. Without admitting or implying any liability therefor or in consequence thereof on the part of VIETSOVPETRO or SUBCONTRACTOR, the respective representatives or their duly authorized designee on the Site shall, at each other‟s request, receive review, and where appropriate, sign such contemporaneous records. Such signature by a representative or his designee of a contemporaneous record document which is not covered by a Change Order Authorization shall constitute an attestation to the quantitative accuracy of the information contained in such document and shall not convey, expressly or by implication, approval for payment of any Change Work or endorsement of any request of SUBCONTRACTOR for a Change Order Authorization. Likewise, SUBCONTRACTOR's performance of any Work or compliance with any instruction which is the subject of such contemporaneous records shall not prejudice its position that such Work or instruction constitutes a Change for which SUBCONTRACTOR should receive additional compensation and/or in consequence of which the time for performing the Work or the Guaranteed Completion Date should be extended. Page 82 of 90
    • Vietsovpetro Draft contract 2.26.4 If, directly as a result of VIETSOVPETRO Standby, SUBCONTRACTOR suffers actual delay to activities on the critical path of the Subcontract Schedule or incurs additional costs that are not avoidable through prudent operations, then, but without duplication of any other entitlement pursuant to the Subcontract, SUBCONTRACTOR shall be entitled by means of a Change Order Authorization to an adjustment to the Subcontract Schedule including extension, if any, to the Guaranteed Completion Date and recovery of such additional costs, which costs shall be determined in accordance with Section 10.0. Provided, however, that there shall be no adjustment of the Subcontract Price and Subcontract Schedule to the extent that and for so long as, at the time of VIETSOVPETRO‟s failure to fulfill its obligations, there would be additional costs or there is any concurrent delay due to pre-existing matters within SUBCONTRACTOR‟s risk or responsibility under the Subcontract. 2.26.5 If any change in laws, rules and regulations as apply in relation to the Work occurs after the Effective Date that will have a quantifiable effect on costs or on the time reasonably required to perform the Work, the Parties shall enter into good faith negotiations in an attempt to reach mutual agreement on an appropriate adjustment in the Subcontract Price and/ or Subcontract Schedule. 2.27 VIETSOVPETRO Supplied Data 2.27.1 VIETSOVPETRO has issued the reports, drawings, specifications and other data comprising the VIETSOVPETRO Supplied Data, and listed in Section 8.1 for SUBCONTRACTOR‟s use in performance of the Work. Using the VIETSOVPETRO Supplied Data as its start point, SUBCONTRACTOR is responsible for doing everything necessary to develop the final associated design of the Contract Objects and/or Subcontract Objects in compliance with the Subcontract. Subject, always, to Section 2.33, SUBCONTRACTOR shall take full responsibility and liability for any mistakes, errors in associated design and engineering data, including Bill(s) of Quantities, provided to VIETSOVPETRO for subsequent performance and delivery of Contract Objects and/or Subcontract Objects. It is further expressed that subject, always, to Section 2.33 if SUBCONTRACTOR‟s mistakes or errors in building excessive quantities in Bill(s) of Quantities eventuates in VIETSOVPETRO‟s over-spendings on procurement, then VIETSOVPETRO shall have the right to claim SUBCONTRACTOR for such over spending. 2.27.2 VIETSOVPETRO may issue amendments or additions to the VIETSOVPETRO Supplied Data after the Effective Date for SUBCONTRACTOR‟s use in the performance of the Work. VIETSOVPETRO shall issue amendments to correct errors or inaccuracies in the VIETSOVPETRO Supplied Data. Any such amendments or additions to the VIETSOVPETRO Supplied Data shall constitute a Change. 2.27.3 All Work performed by SUBCONTRACTOR shall incorporate and be in conformance with the VIETSOVPETRO Supplied Data as listed in Section 8.1 as of the Effective Date, together with any amendments or additions issued by VIETSOVPETRO pursuant to Section 2.27.2. 2.27.4 (a) If SUBCONTRACTOR finds any errors, inconsistencies or incorrect applications in the VIETSOVPETRO Supplied Data or in amendments or additions to the VIETSOVPETRO Supplied Data issued by VIETSOVPETRO pursuant to Section 2.27.2, SUBCONTRACTOR shall promptly consult with VIETSOVPETRO to effect a resolution thereof. SUBCONTRACTOR shall carry out any rectification of errors, inconsistencies or incorrect applications so reported to VIETSOVPETRO, and consequent re-issuing of documents and drawings, as part of the engineering Work compensable as Resource Priced Work, and not as Change Work. Unless VIETSOVPETRO expressly agrees otherwise in writing, rectification shall be carried out by editing and properly revising the original text or drawings, and not by such means as adding “errata” or “addenda” or similar attachments to the original documents or drawings. Page 83 of 90
    • Vietsovpetro (b) Draft contract Provided that SUBCONTRACTOR shall carry out the following activities as part of the Work, and not in any case as a Change: (i) continuously review specifications provided by VIETSOVPETRO within the VIETSOVPETRO Supplied Data; (ii) propose beneficial modifications to the VIETSOVPETRO-provided specifications (including correction of errors and omissions and conflicts with other documents, suggestion of enhancements, identification of possible cost savings), and promptly and diligently prepare proposed wording for VIETSOVPETRO‟s acceptance. All VIETSOVPETRO-accepted modifications shall be effected by VIETSOVPETRO editing and properly revising the original text. propose additional specifications recommended by SUBCONTRACTOR to supplement the VIETSOVPETRO-provided specifications, and prepare such additional specifications promptly and diligently for VIETSOVPETRO‟s acceptance (all such additional specifications to be consistent in format and structure with the specifications in the VIETSOVPETRO Provided Data); (iii) (iv) (v) propose to VIETSOVPETRO changes in the VIETSOVPETRO Supplied Data that, in SUBCONTRACTOR‟s judgment, would improve the design, procurement, fabrication, transportation, installation, pre-commissioning, commissioning or operational performance of the Contract Objects and/ or Subcontract Objects or otherwise benefit VIETSOVPETRO and Company; (vi) (c) consolidate all VIETSOVPETRO-provided specifications, revised VIETSOVPETROprovided specifications, and SUBCONTRACTOR-prepared supplemental specifications into a complete set of Work-specific specifications. SUBCONTRACTOR will keep all specifications fully maintained throughout the performance of the Work, with any changes being subject to VIETSOVPETRO‟s acceptance; obtain VIETSOVPETRO‟s written acceptance of any deviations from the particulars of the VIETSOVPETRO Supplied Data that SUBCONTRACTOR wishes to make, before incorporating such deviations into the Work. Notwithstanding any provision to the contrary in the Subcontract, SUBCONTRACTOR shall not have obligation to review the following documents in the VIETSOVPETRO Supplied Data (hereinafter referred to as the “Rely on Documents”): (i) TBA (ii) TBA ; (iii) TBA; (iv) TBA; (v) TBA; TBA Should any errors, inconsistencies or incorrect applications in the Rely on Documents appears and causes cost and/or time impact to the Work to be performed by SUBCONTRACTOR under Page 84 of 90
    • Vietsovpetro Draft contract the Subcontract, the Subcontract Price and/or the Subcontract Schedule (including the Guaranteed Completion Date) shall be reasonably adjusted to the extent affected thereby. 2.27.5 (a) SUBCONTRACTOR shall: (i) (ii) (b) notify VIETSOVPETRO which items of the VIETSOVPETRO Supplied Data SUBCONTRACTOR will use and develop further in its performance of the Work; notify VIETSOVPETRO which items of the VIETSOVPETRO Supplied Data SUBCONTRACTOR would propose to replace with SUBCONTRACTOR-developed data conforming in every material respect with the corresponding VIETSOVPETRO Supplied Data, giving the reasons for such proposed substitution. Such SUBCONTRACTOR-developed data shall be subject to VIETSOVPETRO‟s acceptance prior to being substituted for the corresponding VIETSOVPETRO Supplied Data and used in the performance of the Work. VIETSOVPETRO shall have no obligation to accept any SUBCONTRACTOR- proposed changes to the VIETSOVPETRO Supplied Data. 2.27.6 SUBCONTRACTOR shall not have any ownership, royalty, or other rights to VIETSOVPETRO Supplied Data provided by VIETSOVPETRO in accordance with this Section 2.27 and Section 8.0 except the right to use such VIETSOVPETRO Supplied Data to carry out the Work. In particular, VIETSOVPETRO shall retain all rights described in Section 2.16. Also, SUBCONTRACTOR shall comply with the confidentiality requirements set forth in Section 2.16.4. 2.27.7 All VIETSOVPETRO Supplied Data described in this Section 2.27 and Section 8.0 is and shall remain the property of Company. If not requested during the Subcontract Term, such VIETSOVPETRO Supplied Data shall be returned to VIETSOVPETRO within forty-five (45) days after Final Acceptance or termination of the Subcontract, unless VIETSOVPETRO notifies SUBCONTRACTOR otherwise in writing. 2.28 Representations and Warranties 2.28.1 SUBCONTRACTOR represents, covenants and warrants to VIETSOVPETRO, and acknowledges and agrees, as follows: (a) Each constituent member of SUBCONTRACTOR listed in Section 1.1 is qualified to do business in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure to so qualify would have a material adverse effect on its financial condition, operations, prospects or business. (b) Each constituent member of SUBCONTRACTOR listed in Section 1.1 has full power and authority to execute this Subcontract and to carry out SUBCONTRACTOR‟s obligations under this Subcontract. (c) SUBCONTRACTOR‟s execution and performance of this Subcontract and the consummation of the transactions contemplated by this Subcontract have been duly authorized by all requisite corporate action on its part, including any such requisite action on the part of each constituent member of SUBCONTRACTOR as listed in Section 1.1. (d) This Subcontract constitutes a valid and legally binding obligation of each constituent member of SUBCONTRACTOR listed in Section 1.1, enforceable against it in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and Page 85 of 90
    • Vietsovpetro Draft contract other similar laws now or hereafter in effect relating to creditors‟ rights generally, but without prejudice to the provisions of Section 2.24.3 and Section 2.28.1(f). (e) Neither the execution and delivery of this Subcontract nor the consummation of the transactions contemplated hereby will conflict with or result in a breach of any term or provision of, or a default under, or requires any consent under: (i) any contract, agreement or instrument to which SUBCONTRACTOR or any of its constituent members listed in Section 1.1 or any of its or their Affiliates is a party or by which SUBCONTRACTOR or any of its constituent members or any of its or their Affiliates or its or their property is bound; or (ii) SUBCONTRACTOR‟s or any of its constituent members‟ or any of its or their Affiliates‟ organizational documents; or (iii) any laws, regulations or judicial orders having applicability to SUBCONTRACTOR or any of its constituent members or any of its or their Affiliates, which breach would have a material adverse effect on SUBCONTRACTOR‟s ability to perform its obligations hereunder. (f) Not used. (g) None of SUBCONTRACTOR or any of its constituent members as listed in Section 1.1 or any of its or their Affiliates is in violation of any Applicable Law or judgment entered by any Governmental Authority which violation, individually or in the aggregate, would affect its or their performance of any obligations under this Subcontract. (h) There is no legal or arbitration proceeding or any proceeding by or before any Governmental Authority, now pending or, to SUBCONTRACTOR‟s best knowledge, threatened against it or any of its constituent members listed in Section 1.1 or any of its or their Affiliates, that would materially adversely affect the validity of this Subcontract or SUBCONTRACTOR‟s ability to perform its obligations hereunder. (i) SUBCONTRACTOR has available to it the requisite expertise, professional qualifications, skills, personnel, technology, experience and technical resources to perform the Work in accordance with the terms of this Subcontract for the Subcontract Price and on or before the Guaranteed Completion Date. (j) SUBCONTRACTOR‟s Supply and the Subcontract Objects, and sale or use thereof by SUBCONTRACTOR or VIETSOVPETRO or Company, will not infringe any patents or any copyrights, trademark or proprietary information rights of others. (k) The constituent member of SUBCONTRACTOR named in Attachment 2-1 is fully authorized and empowered to act for and on behalf of SUBCONTRACTOR in respect of all matters whatsoever related to this Subcontract and the Work. Said constituent member of SUBCONTRACTOR shall handle on behalf of SUBCONTRACTOR all communications between VIETSOVPETRO and SUBCONTRACTOR in relation to this Subcontract and the Work. All SUBCONTRACTOR‟s invoices to VIETSOVPETRO will be issued by and in the name of said constituent member of SUBCONTRACTOR. VIETSOVPETRO will fully discharge its payment obligations under the Subcontract when it makes payments to, or in accordance with the instructions of, said constituent member of SUBCONTRACTOR. Page 86 of 90
    • Vietsovpetro (l) Draft contract During the term of this Subcontract, SUBCONTRACTOR shall ensure that its employees shall not be recruited from VIETSOVPETRO‟s employees or those who has not been an employee of VIETSOVPETRO within one (1) year from the termination date of the respective recruitment contract between VIETSOVPETRO and such employee. 2.28.2 VIETSOVPETRO represents and warrants to SUBCONTRACTOR, and acknowledges and agrees, as follows: (a) VIETSOVPETRO is a limited company, duly formed and validly existing under the laws of the jurisdiction set forth in Section 1.1 and is qualified to do business in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure to so qualify would have a material adverse effect on its financial condition, operations, prospects or business. (b) VIETSOVPETRO has full power and authority to execute this Subcontract and to carry out its obligations under this Subcontract. Its execution and performance of this Subcontract and the consummation of the transactions contemplated by this Subcontract have been duly authorized by all requisite corporate action on its part. This Subcontract constitutes a valid and legally binding obligation of VIETSOVPETRO, enforceable against it in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws now or hereafter in effect relating to creditors‟ rights generally. (c) Neither the execution and delivery of this Subcontract nor the consummation of the transactions contemplated hereby will conflict with or result in a breach of any term or provision of, or a default under, or requires any consent under: (i) any contract, agreement or instrument to which VIETSOVPETRO or any of its Affiliates is a party or by which VIETSOVPETRO or any of its Affiliates or its or their property is bound; or (ii) VIETSOVPETRO‟s organizational documents; or (iii) any laws, regulations or judicial orders having applicability to VIETSOVPETRO, which breach would have a material adverse effect on VIETSOVPETRO‟s ability to perform its obligations hereunder. (d) (e) 2.29 VIETSOVPETRO is not in violation of any Applicable Law or judgment entered by any Governmental Authority which violation, individually or in the aggregate, would affect its performance of any obligations under this Subcontract. There is no legal or arbitration proceeding or any proceeding by or before any Governmental Authority, now pending or, to VIETSOVPETRO‟s best knowledge, threatened against it that would materially adversely affect the validity of this Subcontract or its ability to perform VIETSOVPETRO‟s obligations hereunder. Governing Law 2.29.1 Any disputes or discrepancies, which may arise out of this CONTRACT should be settled smoothly and amicably, based on the mutual benefit and mutual understanding of the PARTIES by senior executives of the PARTIES. 2.29.2. In the event that the Parties senior executives fail to reach an amicable resolution within 90 (ninety) days of the senior executives first meeting either Party may by written notice refer the dispute to arbitration, in Page 87 of 90
    • Vietsovpetro Draft contract which case the dispute shall be finally settled by the Vietnam International Arbitration Centre at the Chamber of Commerce and Industry in according with its Arbitration rules, but the interpretation of the dispute shall be based on Law of S.R.Vietnam. 2.29.3 The place of the arbitration shall be Vietnam International Arbitration Centre (VIAC) at the Chamber of Commerce and Industry of Vietnam in Hanoi, S.R.Vietnam. 2.29.4. All the documents and the proceedings of arbitration shall be in English, The decision of the arbitration shall be final and binding upon both Parties, All expenses in connection with the arbitration shall be borne as decided by the Arbitrator. 2.29.5 No such decision shall disqualify the Company's Representative from being called as a witness and giving evidence in front of the arbitrator(s) on any matter whatsoever relevant to the dispute. 2.29.6. Arbitration may be commenced prior to or after completion of the Works provided that the obligations of the COMPANY and the Contractor shall not be altered by reason of the arbitration being conducted during the progress of the Works. 2.29.7. The governing law of the Contract shall be the law of S.R.Vietnam. 2.30 Subcontract Price The total value of the Work to be performed by, or on behalf of, SUBCONTRACTOR under this Subcontract is the Subcontract Price amount set out in Attachment 2-1 as of the Effective Date. As of the Effective Date, the Subcontract Price represents the compensation potentially payable under this Subcontract, and is not intended to guarantee an amount that SUBCONTRACTOR shall be entitled to receive for the Work performed. 2.31 Notices/ Representatives of the Parties 2.31.1 All notices provided for in this Subcontract shall be in writing and shall be deemed to have been given only if and when received by the respective Party in accordance with the details set out below. Such notices may be delivered in person or sent by courier service, registered mail, or facsimile to the Party at its address as follows: To VIETSOVPETRO: 105 Le Loi, Vungtau City, Socialist Republic of Vietnam Telephone No.: + 84 64-3839871/3839872 Facsimile No.: + 84 64 3839857 Attention: Mr. Tu Thanh Nghia - General Director C/c: Mr. Nguyen van Quan - Deputy General Director - (for commercial matters) C/c: Mr. Do Van Phuc – Director of OCD (for technical matters) To SUBCONTRACTOR: In accordance with the details set out in Attachment 2-1. Page 88 of 90
    • Vietsovpetro Draft contract 2.31.2 A Party may, at any time and from time to time, change its address set out in Section 2.31.1 or Attachment 2-1 upon written notice to the other Party. SUBCONTRACTOR cannot, without VIETSOVPETRO‟s express prior written approval, change the constituent member of SUBCONTRACTOR designated in Attachment 2-1 to act for and on behalf of SUBCONTRACTOR pursuant to Section 2.28.1(k). 2.31.3 Each Party shall nominate its Project Manager in writing to the other Party, before or upon the Effective Date. 2.32 Business Ethics 2.32.1 SUBCONTRACTOR acknowledges that VIETSOVPETRO and Company requires all entities doing business in relation to its operations and developments to enforce a high standard of business ethics in their operations, generally consistent with VIETSOVPETRO‟s and Company‟s own “Code of Ethics and Conduct” (Attachment 2-11). SUBCONTRACTOR undertakes to comply with this requirement as a contractor party, and agrees that VIETSOVPETRO and Company may conduct audits pursuant to Section 2.23 to verify such compliance. 2.32.2 SUBCONTRACTOR shall not pay any commissions or fees or grant any rebates to any representative, employee, officer or director of Company or VIETSOVPETRO; nor favour representatives, employees, officers or directors of Company or VIETSOVPETRO with gifts or entertainment of significant cost or value; nor enter into any business arrangements with representatives, employees, officers or directors of Company or VIETSOVPETRO other than as authorized representatives of Company or VIETSOVPETRO. These prohibitions in relation to representatives, employees, officers and directors of Company and VIETSOVPETRO apply also in respect of any person(s) designated by any representative, employee, officer or director of Company and VIETSOVPETRO. SUBCONTRACTOR shall promptly report in writing to VIETSOVPETRO any solicitation of commissions, fees or rebates received in connection with the Subcontract. 2.32.3 During the Subcontract Term, neither SUBCONTRACTOR nor any person acting for or on behalf of SUBCONTRACTOR shall offer, pay or agree to pay, directly or indirectly, any consideration of any nature whatsoever (other than customary expediting payments and the like permissible under the United States Foreign Corrupt Practices Act and other relevant legislation) to any official, agent or employee of any government or any department, agency or instrumentality of any government, or to any political party or official thereof, or to any candidate for political office in any country to influence the act, decision or omission of any such official, agent, employee, political party, political party official or candidate in their official capacity in connection with the performance of the Subcontract or the directing of business to any person. 2.32.4 SUBCONTRACTOR shall not seek or accept commissions or any like compensation from bidders, entities seeking to become Subcontractors or Suppliers, or any other Person in relation to the Work. If any such commissions or like compensation are offered by any Person, SUBCONTRACTOR shall notify VIETSOVPETRO immediately and shall deal with the same in accordance with VIETSOVPETRO‟s instructions. 2.32.5 If SUBCONTRACTOR fails to observe the provisions of this Section 2.32, VIETSOVPETRO shall have the right to terminate the Subcontract pursuant to Section 2.18.1(a). 2.33 Limitation of SUBCONTRACTOR’s Liability (a) The maximum aggregate financial liability of SUBCONTRACTOR in respect of: Page 89 of 90
    • Vietsovpetro Draft contract (i) its warranty obligations pursuant to Section 2.13 in respect of Work that is found, after the start of the applicable Warranty Period, to be defective or not conforming to this Subcontract; (ii) its liability for Delay Liquidated Damages under Section 2.9; (iii) its liability for Extra Costs under Section 2.18.5; (iv) its liability for costs incurred by VIETSOVPETRO in performing, or having others perform, functions within SUBCONTRACTOR‟s responsibility under the Subcontract, pursuant to Section 2.2.16. shall in no event exceed an amount equal to twenty (20%) of the Subcontract Price as of the Effective Date or of the final Subcontract Price, whichever is greater. This limit includes but is not limited to tort (including negligence) and breach of contract (including any breach resulting in termination). Such limitation of liability shall not affect any of SUBCONTRACTOR‟s defence, indemnification, and hold harmless obligations or any of SUBCONTRACTOR‟s other obligations or liabilities under the Subcontract. (b) SUBCONTRACTOR makes no representations, covenants, warranties, or guarantees, express or implied, other than those expressly set forth in the Subcontract. VIETSOVPETRO‟s rights and remedies shall be exclusively those expressly set forth or provided for in the Subcontract, to the exclusion of any remedies available at law or otherwise. Provided, however, that VIETSOVPETRO shall have available to it all legal remedies for the enforcement of VIETSOVPETRO‟s rights and SUBCONTRACTOR‟s obligations under the Subcontract, as such rights and obligations are expressly set forth or provided for in the Subcontract, for SUBCONTRACTOR‟s failure to perform under the Subcontract. Such legal remedies available to VIETSOVPETRO shall be those of enforcement (including, without limitation, writs and injunctions). Page 90 of 90