BECHTEL CORPORATION SABINE PASS LNG PROJECT ENGINEER, PROCURE AND CONSTRUCT (EPC) SUBCONTRACT

1.

WORK TO BE PERFORMED : Except as specified elsewhere in the Subcontract, SUBCONTRACTOR shall furnish all plant; labor; materials; tools; supplies; equipment; transportation; supervision; technical, professional and other services; and shall perform all operations necessary and required to satisfactorily:

Engineer, Procure and Construct Three (3) LNG Tanks

2.

SCHEDULE : The Work shall be performed in accordance with the dates set forth in the Exhibit “B” clause titled COMMENCEMENT, PROGRESS AND COMPLETION OF THE WORK.

3.

COMPENSATION : As full consideration for the satisfactory performance by SUBCONTRACTOR of this Subcontract, CONTRACTOR shall pay to SUBCONTRACTOR compensation in accordance with the prices set forth in Exhibit “C” and the payment provisions of this Subcontract.

4.

JOINT AND SEVERAL OBLIGATIONS : In signing this Subcontract Diamond LNG LLC and Matrix Service, Inc. agree that they shall be jointly and severally obligated to CONTRACTOR to fulfill all the SUBCONTRACTOR’s obligations and responsibilities set forth herein on a joint and several basis.

5.

LIABILITY FOR WORK PERFORED DURING LIMITED NOTICE TO PROCEED-(LNTP) – Any part of the Work carried out by the Subcontractor (or their Affiliates) pursuant to the LNTP issued on 3 February 2005, shall with effect from the Effective Date be treated as though such part had been carried out under the Subcontract and all terms and conditions set out in the Subcontract shall apply in respect to any such part of the Works and any payments made under the LNTP shall be deemed to have been made under this Subcontract as part of the Subcontract price.

GC-1

INDEPENDENT CONTRACTOR

GC-2

AUTHORIZED REPRESENTATIVES

GC-3

NOTICES

GC-4

SUBCONTRACT IMPLEMENTATION AND INTERPRETATION

GC-5

ORDER OF PRECEDENCE

(1)

Subcontract Form of Agreement

(2)

Exhibit “C” - Quantities and Pricing

(3)

Exhibit “B” - Special Conditions

(4)

Exhibit “A” - General Conditions

(5)

Exhibit “D” - Scope of Work

(6)

Exhibit “D” Technical Specifications and Exhibit “E” – Drawings

GC-6

STANDARDS AND CODES

6.1

Wherever references are made in this Subcontract to standards or codes in accordance with which the Work under this Subcontract is to be performed, the edition or revision of the standards or codes current on the effective date of this Subcontract shall apply unless otherwise expressly stated. In case of conflict between any referenced standards and codes and any Subcontract Documents, the General Condition titled SUBCONTRACT IMPLEMENTATION AND INTERPRETATION shall apply.

6.2

SUBCONTRACTOR shall, in preparation of its detail design, select the more stringent of applicable local, national and international standards or codes of practice, when not otherwise specified in the Subcontract Documents or writing by CONTRACTOR.

GC-7

LAWS AND REGULATIONS

7.1

All applicable laws, ordinances, statutes, rules, regulations, orders or decrees in effect at the time the Work under this Subcontract is performed shall apply to SUBCONTRACTOR and its employees and representatives.

7.2

If SUBCONTRACTOR discovers any discrepancy or inconsistency between this Subcontract and any law, ordinance, statute, rule, regulation, order or decree, SUBCONTRACTOR shall immediately notify CONTRACTOR in writing.

7.3

If during the term of this Subcontract there are changed or new laws, ordinances, statutes, rules, regulations, orders or decrees (but excluding changes to tax laws where such taxes are based upon SUBCONTRACTOR’s inventory, income, profits/losses or cost of finance) not known or foreseeable at the time of signing this Subcontract which become effective and which affect the cost or time of performance of this Subcontract, SUBCONTRACTOR shall immediately notify

CONTRACTOR and submit detailed documentation of such effect in terms of both time and cost of performing the Subcontract. If the Work is affected by such changes and CONTRACTOR concurs with their effect, an equitable adjustment will be made pursuant to the General Condition titled CHANGES.

GC-8

PERMITS

GC-9

TAXES

GC-10

LABOR, PERSONNEL AND WORK RULES

10.1

Design Activities

(1)

CONTRACTOR’S written approval of all SUBCONTRACTOR personnel assigned to perform the Work shall be a condition precedent to payment of their costs. SUBCONTRACTOR shall submit resumes for each individual setting forth educational and professional qualifications, experience, tasks to be performed, position, and compensation. SUBCONTRACTOR shall verify all academic degrees and professional credentials and certifies the accuracy of any SUBCONTRACTOR submitted qualifications.

(2)

CONTRACTOR shall review and approve or reject assignments for cause within ten (10) Days. Approval of assignments shall not relieve SUBCONTRACTOR of the full responsibilities of employer and shall create no direct relationship between the individual and CONTRACTOR or OWNER.

(3)

SUBCONTRACTOR shall assign only competent and qualified personnel and shall at all times be solely responsible for their work quality. CONTRACTOR may request the removal of individual employees for cause at any time and SUBCONTRACTOR agrees to comply and to promptly provide acceptable replacement personnel.

10.2

Procurement and Construction Activities

(1)

SUBCONTRACTOR shall employ only competent and skilled personnel to perform the Work and shall remove from the Jobsite any SUBCONTRACTOR personnel determined to be unfit or to be acting in violation of any provision of this Subcontract. SUBCONTRACTOR is responsible for maintaining labor relations in such manner that there is harmony among workers and shall comply with and enforce Project and Jobsite procedures, regulations, work rules and work hours established by CONTRACTOR and OWNER.

(2)

CONTRACTOR may at its sole discretion deny access to the Jobsite to any individual by written notice to SUBCONTRACTOR. In the event an employee is excluded from the Jobsite, SUBCONTRACTOR shall promptly replace such individual with another who is fully competent and skilled to perform the Work.

(3)

SUBCONTRACTOR is responsible for maintaining labor relations in such manner that, so far as reasonably practicable, there is harmony among workers. SUBCONTRACTOR and its Subsubcontractors and their subcontractors of any tier shall conduct their labor relations in accordance with the recognized prevailing local area practices. SUBCONTRACTOR shall inform CONTRACTOR promptly of any labor dispute, anticipated labor dispute, request or demand by a labor organization, its representatives or members which may reasonably be expected to affect the Work. SUBCONTRACTOR shall not be bound by any organized labor agreements or project specific labor agreements. SUBCONTRACTOR further agrees to inform CONTRACTOR, before any commitments are made, during the negotiations of any agreements or understandings with local or national labor organizations.

(4)

Notwithstanding the foregoing, neither CONTRACTOR nor OWNER shall have any liability and SUBCONTRACTOR agrees to release, indemnify, defend and hold harmless the CONTRACTOR Group and OWNER Group from and against any and all claims, causes of action, damages, losses, cost and expenses (including all reasonable attorneys’ fees and litigation or arbitration expenses) and liabilities, of whatsoever kind or nature, which may directly or indirectly arise or result from SUBCONTRACTOR or any Subsubcontractor choosing to terminate the employment of any such employee (including any key person) or remove such employee from the project who fails to meet the foregoing requirements following a request by CONTRACTOR to have such employee removed from the work. Any such employee shall be replaced at the cost and expense of SUBCONTRACTOR or the relevant Subsubcontractor.

GC-11

COMMERCIAL ACTIVITIES

GC-12

PUBLICITY AND ADVERTISING

GC-13

SAFETY AND HEALTH

13.1

SUBCONTRACTOR shall be solely responsible for conducting operations under this Subcontract to avoid risk of harm to the health and safety of persons and property and for inspecting and monitoring all its equipment, materials and work practices to ensure compliance with its obligations under this Subcontract.

13.2

SUBCONTRACTOR shall be solely responsible for developing and implementing a Safety and Health Plan (S&H Plan) pursuant to the terms of this Subcontract. SUBCONTRACTOR’s S&H Plan shall as a minimum conform and comply with:

(1)

All applicable laws, ordinances, statutes, rules, regulations, and codes governing safety and health in the workplace;

(2)

SUBCONTRACTOR’s specific Scope of Work under this Subcontract; and

(3)

CONTRACTOR’s safety and health standards as set forth in the Special Condition titled SAFETY, HEALTH AND SECURITY REQUIREMENTS, as well as CONTRACTOR’s and OWNER’s S&H Plan, including revisions thereto. If SUBCONTRACTOR considers any such revision to be a change affecting cost or schedule, the provisions of the General Condition titled CHANGES shall apply.

13.3

Within thirty (30) Days after Subcontract award and in any event prior to commencing work at the Jobsite, SUBCONTRACTOR shall submit its S&H Plan to CONTRACTOR for review and approval.

13.4

To the extent allowed by law, SUBCONTRACTOR shall assume all responsibility and liability with respect to all matters regarding the safety and health of its employees and the employees of SUBCONTRACTOR’s suppliers and subcontractors of any tier, with respect to the risks under this Subcontract.

13.5

SUBCONTRACTOR’s failure to correct any unsafe condition or unsafe act by its employees, suppliers or subcontractors of any tier may, at the sole discretion of CONTRACTOR, be grounds for an order by CONTRACTOR to stop the affected work or operations until the unsafe act or condition is corrected to CONTRACTOR’s satisfaction at SUBCONTRACTOR’s expense.

13.6

If the unsafe act or condition continues despite notice and reasonable opportunity to affect a resolution, CONTRACTOR may, at its sole discretion, correct the unsafe act or condition at SUBCONTRACTOR’s expense pursuant to the General Condition titled BACKCHARGES or terminate this Subcontract pursuant to the General Condition titled TERMINATION FOR DEFAULT.

13.7

SUBCONTRACTOR shall assign to the Jobsite one (or more as necessary for compliance with the terms of this clause) safety representative(s) acceptable to CONTRACTOR. Such safety

representative(s) shall be physically located at the Jobsite, shall have authority for correcting unsafe acts or conditions by SUBCONTRACTOR, its employees, and employees of SUBCONTRACTOR’s suppliers or subcontractors of any tier, and shall participate in periodic safety meetings with CONTRACTOR. SUBCONTRACTOR shall instruct its personnel on the requirements of SUBCONTRACTOR’s S&H Plan and coordinate with other Jobsite contractors and subcontractors on safety matters required for the Work.

13.8

Unless otherwise specified by CONTRACTOR, SUBCONTRACTOR shall furnish all safety equipment required for the Work, require the use of such safety equipment, and provide safety instructions to its employees. All safety equipment must be manufactured to a standard acceptable to CONTRACTOR as set forth in the Special Condition titled SAFETY, HEALTH AND SECURITY REQUIREMENTS.

13.9

SUBCONTRACTOR shall maintain accident and injury records as required by applicable laws and regulations. Such records will be made available to CONTRACTOR upon request. SUBCONTRACTOR shall furnish CONTRACTOR with a weekly and monthly summary of accidents, injuries, and labor hours lost to work related injuries of its employees and employees of SUBCONTRACTOR’s suppliers and subcontractors of any tier, in a form and format designated by CONTRACTOR.

13.10

SUBCONTRACTOR shall immediately report to CONTRACTOR any death, injury or damage to property incurred or caused by SUBCONTRACTOR’s employees and employees of SUBCONTRACTOR’s suppliers and subcontractors of any tier.

GC-14

ENVIRONMENTAL REQUIREMENTS

14.1

Throughout performance of the Work, SUBCONTRACTOR shall conduct all operations in such a way as to minimize impact upon the natural environment and prevent any spread or release of contaminated or hazardous substances.

14.2

SUBCONTRACTOR shall:

(1)

Comply with all applicable laws, regulations, ordinances, statutes, rules, and codes governing environmental requirements and conduct the Work based on the requirements of this Subcontract, including compliance with permit requirements and Project plans and approvals.

(2)

Provide all documentation required by all levels of governing authority or CONTRACTOR concerning environmental requirements.

(3)

Provide and maintain effective planning and field control measures for the following activities:

Wastewater discharges to land, surface water, or groundwater,

Extraction/supply of water,

Storm water management,

Spill prevention and response,

Erosion and sedimentation control,

Air emissions and dust control,

Noise control,

Waste and hazardous waste management, and

Work area restoration, including revegetation.

This shall include obtaining certifications; conducting requisite analyses and monitoring of such activities as required by the Subcontract Documents, permit conditions or other applicable law; utilizing appropriate equipment; and proceeding in accordance with permit requirements.

(4)

Be responsible for developing and maintaining a written Environmental Compliance Plan in accordance with SUBCONTRACTOR’s established practices, including but not limited to compliance with all applicable laws/regulations and the requirements of the Project Construction Environmental Control Plan (CECP). SUBCONTRACTOR shall have sole responsibility for implementing and enforcing its Environmental Compliance Plan.

(5)

Submit its written Environmental Compliance Plan to CONTRACTOR for review thirty (30) Days after subcontract award and in any event prior to commencing work at the Jobsite. CONTRACTOR’s review of SUBCONTRACTOR’s plan shall not relieve SUBCONTRACTOR of its obligation under this Subcontract or as imposed by law and SUBCONTRACTOR shall be solely responsible for the adequacy of its Environmental Compliance Plan.

(6)

Comply with all access restrictions, including prohibitions on access to certain areas on or adjacent to the Jobsite and require its personnel and those of its suppliers and subcontractors of any tier comply with all signage and flagging related to such restricted areas. Restricted areas may include, but are not limited to: designated wetlands; environmental mitigation study areas; cultural/historical/archaeological sites; and designated fish, wildlife, or vegetative habitat.

(7)

Require that its personnel do not hunt, fish, feed, capture, extract, or otherwise disturb aquatic, animal, or vegetative species within the Project boundary or while performing any tasks in performance of the Work.

(8)

Not proceed with any renovation or demolition work until asbestos surveys and notifications have been completed to the appropriate regulatory agencies, in accordance with the division of responsibility outlined in the Project’s CECP and CONTRACTOR specifically authorizes that work to proceed. Should asbestos containing materials be uncovered during SUBCONTRACTOR’s Work, the provisions of subclause (9) below shall apply.

(9)

Immediately stop work in any area where contaminated soil indicators (such as odor or appearance), unknown containers, piping, underground storage tanks, or similar structures are discovered; or any other materials, which are reasonably suspected to be toxic or hazardous. SUBCONTRACTOR shall then immediately notify CONTRACTOR and the stop work area shall be determined by CONTRACTOR and confirmed in writing. Activity in the stop work area shall only resume upon CONTRACTOR’s written approval.

(10)

Immediately stop work in any area where cultural resources or artifacts with archaeological or historical value are discovered, and immediately notify CONTRACTOR. The stopped work shall proceed in the manner set forth in subclause (9) above. No artifacts, items, or materials shall be disturbed or taken from the area of discovery. Neither SUBCONTRACTOR nor any of its suppliers and subcontractors of any tier shall have property rights to such artifacts, items, or materials, which shall be secured and guarded until turned over to CONTRACTOR or the appropriate authorities. SUBCONTRACTOR shall also require that its personnel and those of its suppliers and subcontractors of any tier comply with this provision and respect all historic and archaeological sites in the area.

(11)

Manage, store, and dispose of all hazardous waste generated by SUBCONTRACTOR during its Work in accordance with national, regional, and local requirements (for U.S. projects this includes Resource and Conservation Recovery Act (RCRA) regulations and state special and hazardous waste programs) and as outlined in the Project CECP. This includes, but is not limited to: waste minimization; hazardous waste generator registration; hazardous materials inventory with Material Safety Data Sheets (MSDS) for each hazardous material on site; employee training; hazardous waste spill management and reporting; proper storage of hazardous waste; equipment decontamination; onsite and offsite transport of hazardous waste; and selection and use of offsite final disposal facilities.

14.3

SUBCONTRACTOR shall deliver to CONTRACTOR (i) notice of any pending or threatened material environmental claim with respect to the project, and (ii) promptly upon their becoming available, copies of written communications with any Governmental Instrumentality relating to any such material environmental claim.

14.4

SUBCONTRACTOR’s obligations under the General Condition titled INDEMNITY apply to any liability arising in connection with or incidental to SUBCONTRACTOR’s performance or failure to perform as provided in this clause.

GC-15

SITE CONDITIONS AND NATURAL RESOURCES

(1)

Transportation, access, disposal, handling and storage of materials;

(2)

Availability and quality of labor, water, electric power and road conditions;

(3)

Climatic conditions, tides, and seasons;

(4)

River hydrology and river stages;

(5)

Physical conditions at the Jobsite and the Project area as a whole;

(6)

Topography and ground surface conditions; and

(7)

Equipment and facilities needed preliminary to and during the performance of the Work.

The failure of SUBCONTRACTOR to acquaint itself with any applicable conditions will not relieve SUBCONTRACTOR of the responsibility for properly estimating the difficulties, time or cost of successfully performing SUBCONTRACTOR’s obligations under this Subcontract.

GC-16

DIFFERING SITE CONDITIONS

16.1

If SUBCONTRACTOR encounters subsurface soil conditions that (i) are materially different from the information regarding such subsurface soil conditions as provided in the Geotechnical Investigation (dated August, 2003) by Tolunay Wong (including the encountering of subsurface soil conditions that could not reasonably be anticipated by SUBCONTRACTOR using GECP based on the information provided in the above Geotechnical Investigation) and (ii) adversely affects (a) SUBCONTRACTOR’s costs of performance of the Work, or (b) SUBCONTRACTOR’s ability to perform any material obligation under this Subcontract, SUBCONTRACTOR shall be entitled to a Change Order.

16.2

Subsequently, SUBCONTRACTOR shall immediately notify CONTRACTOR in writing before proceeding with any work, which SUBCONTRACTOR believes, constitutes a differing site condition with respect to:

(1)

Subsurface or latent physical conditions at the Jobsite differing materially from those indicated in the above referenced Geotechnical Investigation; or

(2)

Previously unknown physical conditions at the Jobsite, of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inherent in work of the character provided for in this Subcontract.

16.3

CONTRACTOR will then investigate such condition and make a written determination. If CONTRACTOR determines that such condition does constitute a differing site condition, SUBCONTRACTOR may then, pursuant to the General Condition titled CHANGES, submit a written proposal for an equitable adjustment setting forth the impact of such differing site condition. Failure of SUBCONTRACTOR to give the required immediate notice of the differing site condition shall be grounds for rejection of the claim to the extent CONTRACTOR or OWNER is prejudiced by such delay.

GC-17

TITLE TO MATERIALS FOUND

GC-18

SURVEY CONTROL POINTS AND LAYOUTS

18.1

CONTRACTOR will establish Survey control points as shown on the drawings.

18.2

SUBCONTRACTOR shall complete the layout of all work and shall be responsible for execution of the Work in accordance with the locations, lines, and grades specified or shown on the drawings, subject to such modifications as CONTRACTOR may require as work progresses.

18.3

If SUBCONTRACTOR or any of its lower-tier subcontractors or any of their representatives or employees move or destroy or render inaccurate any survey control point, such control point shall be replaced by CONTRACTOR at SUBCONTRACTOR’s expense. No separate payment will be made for survey work performed by SUBCONTRACTOR.

GC-19

SUBCONTRACTOR’S WORK AREA

GC-20

CLEANING UP

20.1

SUBCONTRACTOR shall, at all times, keep its work areas in a neat, clean and safe condition. Upon completion of any portion of the Work, SUBCONTRACTOR shall promptly remove from the work area all its equipment, construction plant, temporary structures and surplus materials not to be used at or near the same location during later stages of the Work.

20.2

Upon completion of the Work and prior to final payment, SUBCONTRACTOR shall at its expense satisfactorily dispose of all rubbish, remove all plant, buildings, equipment and materials belonging to SUBCONTRACTOR and return to CONTRACTOR’s warehouse or Jobsite storage area all salvageable CONTRACTOR or OWNER supplied materials. SUBCONTRACTOR shall leave the premises in a neat, clean and safe condition.

20.3

In event of SUBCONTRACTOR’s failure to comply with the foregoing requirements, CONTRACTOR may accomplish them at SUBCONTRACTOR’s expense.

GC-21

COOPERATION WITH OTHERS

GC-22

RESPONSIBILITY FOR WORK, SECURITY AND PROPERTY

22.1

Work in Progress, Equipment and Material

SUBCONTRACTOR shall be responsible for and shall bear any and all risk of loss or damage to work in progress and, pursuant to the General Condition titled TITLE AND RISK OF LOSS, to equipment and materials.

22.2

Delivery, Unloading and Storage

SUBCONTRACTOR’s responsibility for materials and plant equipment required for the performance of this Subcontract shall include:

(1)

Procurement, importation and transportation to and from the Jobsite unless otherwise specified;

(2)

Receiving and unloading;

(3)

Storing in a secure place and in a manner subject to CONTRACTOR’s review. Outside storage of materials and equipment subject to degradation by the elements shall be in weathertight enclosures provided by SUBCONTRACTOR;

(4)

Delivering from storage to construction site all materials and plant equipment as required; and

(5)

Maintaining complete and accurate records for CONTRACTOR’s inspection of all materials and plant equipment received, stored and issued for use in the performance of the Subcontract.

22.3

Security

(1)

SUBCONTRACTOR shall at all times conduct all operations under this Subcontract in a manner to avoid the risk of loss, theft, or damage by vandalism, sabotage or any other means to any equipment, materials, work or other property at the Jobsite. SUBCONTRACTOR shall continuously inspect all equipment, materials and work to discover and determine any conditions, which might involve such risks and shall be solely responsible for discovery, determination and correction of any such conditions.

(2)

SUBCONTRACTOR shall comply with CONTRACTOR’s and OWNER’s security requirements for the Jobsite. SUBCONTRACTOR shall cooperate with CONTRACTOR and OWNER on all security matters and shall promptly comply with any Project security arrangements established by CONTRACTOR or OWNER. Such compliance with these security requirements shall not relieve SUBCONTRACTOR of its responsibility for maintaining proper security for the above noted items, nor shall it be construed as limiting in any manner SUBCONTRACTOR’s obligation with respect to all applicable laws and regulations and to undertake reasonable action to establish and maintain secure conditions at the Jobsite.

22.4

Property

SUBCONTRACTOR shall plan and conduct its operations so as not to:

(1)

Enter upon lands in their natural state unless authorized by CONTRACTOR;

(2)

Damage, close or obstruct any utility installation, highway, road or other property until permits and CONTRACTOR’s permission therefore have been obtained;

(3)

Disrupt or otherwise interfere with the operation of any pipeline, telephone, electric transmission line, ditch or structure unless otherwise specifically authorized by this Subcontract; or

(4)

Damage or destroy cultivated and planted areas, and vegetation such as trees, plants, shrubs, and grass on or adjacent to the premises which, as determined by CONTRACTOR, do not interfere with the performance of this Subcontract. This includes damage arising from performance of work through operation of equipment or stockpiling of materials.

22.5

SUBCONTRACTOR shall not be entitled to any extension of time or compensation on account of SUBCONTRACTOR’s failure to protect all facilities, equipment, materials and other property as described herein. All costs in connection with any repairs or restoration necessary or required by reason of unauthorized obstruction, damage or use shall be borne by SUBCONTRACTOR, except to the extent such costs arise out of the acts or omissions of the OWNER, CONTRACTOR, other Jobsite contractors and their personnel.

GC-23

SUBCONTRACTOR’S PLANT, EQUIPMENT AND FACILITIES

23.1

SUBCONTRACTOR shall provide and use for the Work only such construction plant and equipment as are capable of producing the quality and quantity of work and materials required by this Subcontract and within the time or times specified in the Subcontract Schedule.

23.2

Before proceeding with the Work, SUBCONTRACTOR shall furnish CONTRACTOR with information and drawings relative to such equipment, plant and facilities as CONTRACTOR may request. Upon written order of CONTRACTOR, SUBCONTRACTOR shall discontinue operation of unsatisfactory plant, equipment or facilities and shall either modify the unsatisfactory items or remove such items from the Jobsite.

23.3

SUBCONTRACTOR shall, at the time any equipment is moved onto the Jobsite, present to CONTRACTOR an itemized list of all equipment and tools, including but not limited to power tools, welding machines, pumps and compressors. Said list must include description and quantity, and serial number where applicable. It is recommended that SUBCONTRACTOR identify its equipment by color, decal and etching. Prior to removal of any or all equipment, SUBCONTRACTOR shall clear such removal through CONTRACTOR. SUBCONTRACTOR shall not remove construction plant, equipment or tools from the Jobsite before the Work is finally accepted, without CONTRACTOR’s written approval.

GC-24

ILLUMINATION

GC-25

USE OF COMPLETED PORTIONS OF WORK

25.1

Whenever, as determined by CONTRACTOR, any portion of the Work performed by SUBCONTRACTOR is suitable for use, CONTRACTOR or OWNER may, upon written notice, occupy and use such portion. Use shall not constitute acceptance, relieve SUBCONTRACTOR of its responsibilities, or act as a waiver by CONTRACTOR or OWNER of any terms of this Subcontract.

25.2

SUBCONTRACTOR shall not be liable for normal wear and tear or for repair of damage caused by any misuse during such occupancy or use by CONTRACTOR or OWNER. If such use increases the cost or time of performance of remaining portions of the Work, SUBCONTRACTOR shall, pursuant to the General Condition titled CHANGES, be entitled to an equitable adjustment in its compensation or schedule under this Subcontract.

25.3

If, as a result of SUBCONTRACTOR’s failure to comply with the provisions of this Subcontract, such use proves to be unsatisfactory to CONTRACTOR or OWNER, CONTRACTOR or OWNER shall have the right to continue such use until such portion of the Work can, without injury to CONTRACTOR or OWNER, be taken out of service for correction of defects, errors, omissions or replacement of unsatisfactory materials or equipment as necessary for such portion of the Work to comply with the Subcontract; provided that the period of such operation or use pending completion of appropriate remedial action shall not exceed twelve (12) months unless otherwise mutually agreed in writing between the parties.

25.4

SUBCONTRACTOR shall not use any permanently installed equipment unless CONTRACTOR approves such use in writing. When such use is approved, SUBCONTRACTOR shall at SUBCONTRACTOR’s expense properly use and maintain and, upon completion of such use, recondition such equipment as required to meet specifications.

25.5

If CONTRACTOR or OWNER furnishes an operator for such permanently installed equipment, all services performed shall be under the complete direction and control of SUBCONTRACTOR, and such operator shall be considered SUBCONTRACTOR’s employee for all purposes other than payment of such operator’s wages, Workers’ Compensation Insurance or other benefits.

GC-26

USE OF CONTRACTOR’S CONSTRUCTION EQUIPMENT OR FACILITIES

26.1

Where SUBCONTRACTOR requests CONTRACTOR and CONTRACTOR agrees to make available to SUBCONTRACTOR certain equipment or facilities belonging to CONTRACTOR for the performance of SUBCONTRACTOR work under the Subcontract, the following shall apply:

(1)

Equipment or facilities will be charged to SUBCONTRACTOR at agreed rental rates;

(2)

CONTRACTOR will furnish a copy of the equipment maintenance and inspection record and SUBCONTRACTOR shall maintain these records during the rental period;

(3)

SUBCONTRACTOR shall assure itself of the condition of such equipment and assume all risks and responsibilities during its use;

(4)

SUBCONTRACTOR shall, as part of its obligation under the General Condition titled INDEMNITY, release, defend, indemnify and hold harmless CONTRACTOR and OWNER from all claims, demands and liabilities arising from the use of such equipment.

(5)

CONTRACTOR and SUBCONTRACTOR shall jointly inspect such equipment before its use and upon its return. The cost of all necessary repairs or replacement for damage other than normal wear shall be at SUBCONTRACTOR’s expense; and

(6)

If such equipment is furnished with an operator, the services of such operator will be performed under the complete direction and control of SUBCONTRACTOR and such operator shall be considered SUBCONTRACTOR’s employee for all purposes other than the payment of wages, Workers’ Compensation Insurance or other benefits.

GC-27

FIRST AID FACILITIES

27.1

Where CONTRACTOR or OWNER have first-aid facilities at the Jobsite they may, at their option, make available their first-aid facilities for the treatment of employees of SUBCONTRACTOR who may be injured or become ill while engaged in the performance of the Work under this Subcontract.

27.2

If first-aid facilities and/or services are made available to SUBCONTRACTOR’s employees then, in consideration for the use of such facilities and the receipt of such services, SUBCONTRACTOR hereby agrees:

(1)

To include as part of its obligation under the General Condition titled INDEMNITY the obligation to release, defend, indemnify and hold harmless CONTRACTOR and OWNER from all claims, demands and liabilities arising from the use of such services or facilities; and

(2)

In the event any of SUBCONTRACTOR’s employees require off-site medical services, including transportation thereto, to promptly pay for such services directly to the providers thereof.

GC-28

INSPECTION, QUALITY SURVEILLANCE, REJECTION OF MATERIALS AND WORKMANSHIP

28.1

All material and equipment furnished and work performed shall be properly inspected by SUBCONTRACTOR at its expense, and shall at all times be subject to quality surveillance and quality audit by CONTRACTOR, OWNER, or their authorized representatives who, upon

reasonable notice, shall be afforded full and free access to the shops, factories or other places of business of SUBCONTRACTOR and its suppliers and subcontractors of any tier for such quality surveillance or audit. SUBCONTRACTOR shall provide safe and adequate facilities, drawings, documents and samples as requested, and shall provide assistance and cooperation including stoppage of work to perform such examination as may be necessary to determine compliance with the requirements of this Subcontract. Any work covered prior to any quality surveillance or test by CONTRACTOR or OWNER shall be uncovered and replaced at the expense of SUBCONTRACTOR if such covering interferes with or obstructs such inspection or test. Failure of CONTRACTOR or OWNER to make such quality surveillance or to discover defective design, equipment, materials or workmanship shall not relieve SUBCONTRACTOR of its obligations under this Subcontract nor prejudice the rights of CONTRACTOR or OWNER thereafter to reject or require the correction of defective work in accordance with the provisions of this Subcontract.

28.2

If any work is determined by CONTRACTOR or OWNER to be defective or not in conformance with this Subcontract the provisions of the General Condition titled WARRANTY / DEFECT CORRECTION PERIOD shall apply.

GC-29

TESTING

29.1

Unless otherwise provided in the Subcontract, testing of equipment, materials or work shall be performed by SUBCONTRACTOR at its expense and in accordance with subcontract requirements. Should CONTRACTOR direct tests in addition to those required by this Subcontract, SUBCONTRACTOR will be given reasonable notice to permit such testing. Such additional tests will be at CONTRACTOR’s expense.

29.2

SUBCONTRACTOR shall furnish samples as requested and shall provide reasonable assistance and cooperation necessary to permit tests to be performed on materials or work in place including reasonable stoppage of work during testing.

GC-30

EXPEDITING

GC-31

FORCE MAJEURE

31.1

If SUBCONTRACTOR’s performance of this Subcontract is prevented or delayed by Force Majeure, any unforeseeable cause, existing or future, which is beyond the reasonable control of the parties and without the fault or negligence of SUBCONTRACTOR, SUBCONTRACTOR shall, within twenty-four hours of the commencement of any such delay, give to CONTRACTOR written notice thereof and within seven (7) Days of commencement of the delay, a written description of the anticipated impact of the delay on performance of the Work. Delays attributable to and within the control of SUBCONTRACTOR OR SUBCONTRACTOR’s suppliers or Subsubcontractors of any tier shall be deemed delays within the control of SUBCONTRACTOR. Within seven (7) Days after the termination of any Force Majeure event, SUBCONTRACTOR shall file a written notice with CONTRACTOR specifying the actual duration of the delay. Failure to give any of the above notices shall be sufficient ground for denial of an extension of time. CONTRACTOR will determine the duration of the delay and will extend the time of performance of this Subcontract by modifying the Special Condition titled COMMENCEMENT, PROGRESS AND COMPLETION OF THE WORK accordingly.

31.2

SUBCONTRACTOR shall demonstrate to CONTRACTOR its entitlement to such relief under this Article by providing to CONTRACTOR an updated CPM Schedule using Primavera Project Planner (P3) in its native electronic format with actual durations entered for all activities on the critical path and re-forecasted clearly to indicate SUBCONTRACTOR’s entitlement to a time extension under this GC-31. Once provided, SUBCONTRACTOR shall be entitled to an extension to the Subcontract Completion Date for delay, if and to the extent such delay or prevention causes a delay in the critical path of the Work, provided that SUBCONTRACTOR has complied with the notice, Change Order and mitigation requirements.

31.3

Such extension of time to the Subcontract Completion date shall be the sole remedy for the occurrence of such delay for a continuous period of less than thirty (30) Days.

31.4

SUBCONTRACTOR may be entitled to an adjustment to the Subcontract price for any delay that meets the requirements of GC-31.1 and GC-31.2, if such delay occurs for a continuous period of at least thirty (30) Days. If SUBCONTRACTOR is entitled to such adjustment to the Subcontract price, the adjustment to the Subcontract price shall only include reimbursement for the standby time for SUBCONTRACTOR’s employees and construction equipment and other standby costs which are incurred by SUBCONTRACTOR after the expiration of such thirty (30) Day period and which are caused by such excusable delay, up to a maximum aggregate of 40 Days of standyby time.

31.5

SUBCONTRACTOR shall not be entitled to any adjustment to the Subcontract Schedule or adjustment to the Subcontract price for any portion of a delay, to the extent SUBCONTRACTOR could have taken, but failed to take, reasonable actions to mitigate such delay.

GC-32

CHANGES

32.1

CONTRACTOR may, at any time, without notice to the sureties if any, by written “Change Notice” unilaterally make any change in the Work within the general scope of this Subcontract, including but not limited to changes:

(1)

In the drawings, designs or specifications;

(2)

In the method, manner, or sequence of SUBCONTRACTOR work;

(3)

In CONTRACTOR or OWNER-furnished facilities, equipment, materials, services or site(s);

(4)

Directing acceleration or deceleration in performance of the Work; and

(5)

Modifying the Subcontract Schedule or the Subcontract Milestones.

32.2

In addition, in the event of an emergency, which CONTRACTOR determines endangers life or property, CONTRACTOR may use oral orders to SUBCONTRACTOR for any work required by reason of such emergency. SUBCONTRACTOR shall commence and complete such emergency work as directed by CONTRACTOR. A Change Notice will confirm such orders.

32.3

In the event of a change in any Applicable Code and Standard which does not constitute a Change in Law, SUBCONTRACTOR shall provide written notice to CONTRACTOR regarding such change. Upon receipt of such notice from SUBCONTRACTOR and in the event CONTRACTOR, at its sole option, elects for SUBCONTRACTOR to implement such change in Applicable Code and Standard, CONTRACTOR may issue a Change Notice to SUBCONTRACTOR in accordance with this Article in the event CONTRACTOR, at its sole option, elects for SUBCONTRACTOR to implement such change in

Applicable Code and Standard. In the event CONTRACTOR does not, at its sole option, elect for SUBCONTRACTOR to implement such change in Applicable Code and Standard, SUBCONTRACTOR shall not be required to perform in accordance with such Applicable Code and Standard.

32.4

All other modifications to this Subcontract shall be by written “Amendment” signed by both parties.

32.5

If at any time SUBCONTRACTOR believes that acts or omissions of CONTRACTOR or OWNER constitute a change to the Work not covered by a Change Notice, SUBCONTRACTOR shall within ten (10) Days of discovery of such act or omission submit a written “Change Notice Request” explaining in detail the basis for the request. CONTRACTOR will either issue a Change Notice or deny the request in writing within thirty (30) Days of the date of receipt of the Change Notice Request.

32.6

If any change under this clause directly or indirectly causes an increase or decrease in the cost of, or the time required for, the performance of any part of the Work under this Subcontract, whether or not changed by any order, an equitable adjustment shall be made and the Subcontract modified accordingly by written “Change Order.”

32.7

If the SUBCONTRACTOR intends to assert a claim for an equitable adjustment under this clause it must, within ten (10) Days after receipt of a Change Notice, provide written notification of such intent and within a further twenty (20) Days, pursuant to the Special Condition titled PRICING OF ADJUSTMENTS, submit to CONTRACTOR a written proposal setting forth the nature, schedule impact and monetary extent of such claim in sufficient detail to permit thorough analysis and negotiation.

32.8

Any delay by SUBCONTRACTOR in giving notice or presenting a proposal for adjustment under this clause shall be grounds for rejection of the claim if and to the extent CONTRACTOR or OWNER is prejudiced by such delay. In no case shall a claim by SUBCONTRACTOR be considered if asserted after final payment under this Subcontract.

32.9

Failure by CONTRACTOR and SUBCONTRACTOR to agree on any adjustment shall be a dispute within the meaning of the General Condition titled DISPUTES.

32.10

SUBCONTRACTOR shall proceed diligently with performance of the Work, pending final resolution of any request for relief, dispute, claim, appeal, or action arising under the Subcontract, and comply with any decision of CONTRACTOR.

GC-33

DISPUTES

33.1

Any claim arising out of or attributable to the interpretation or performance of this Subcontract, which cannot be resolved by negotiation, shall be considered a dispute within the meaning of this clause.

33.2

In the event of a dispute, SUBCONTRACTOR or CONTRACTOR shall notify the other party in writing that a dispute exists and request or provide a final determination by CONTRACTOR. Any such request by SUBCONTRACTOR shall be clearly identified by reference to this clause and shall summarize the facts in dispute and SUBCONTRACTOR’s proposal for resolution.

33.3

CONTRACTOR shall, within thirty (30) Days of any request by SUBCONTRACTOR, provide a written final determination setting forth the contractual basis for its decision and defining what

subcontract adjustments it considers equitable. Upon SUBCONTRACTOR’s written acceptance of CONTRACTOR’s determination the Subcontract will be modified and the determination implemented accordingly or, failing agreement, CONTRACTOR may in its sole discretion pay such amounts and/or revise the time for performance of the Work in accordance with CONTRACTOR’s final determination.

33.4

If SUBCONTRACTOR does not accept CONTRACTOR’s final determination, the matter shall within thirty (30) Days, be referred to senior executives of the parties who shall have designated authority to settle the dispute. The parties shall promptly prepare and exchange memoranda stating the issues in dispute and their respective positions, summarizing the negotiations that have taken place and attaching relevant documents.

33.5

The senior executives will meet for negotiations at a mutually agreed time and place. If the matter has not been resolved within thirty (30) Days of the commencement of such negotiations, the parties agree to resolve the dispute through Alternative Dispute Resolution (ADR) process in accordance with the Special Condition titled ARBITRATION.

33.6

SUBCONTRACTOR hereby agrees to be joined in any arbitration proceeding involving a dispute between OWNER and CONTRACTOR which relates to or is in connection, in whole or in part, with the Work of SUBCONTRACTOR.

GC-34

TITLE AND RISK OF LOSS

34.1

Where SUBCONTRACTOR fabricates or purchases equipment, materials or other tangible items (Goods) for incorporation into the Work or any of its separate parts, the title of such Goods shall pass to and be vested in CONTRACTOR when the first of the following events occurs:

(1)

The Goods or part thereof is first identifiable as being appropriated to the Subcontract,

(2)

When CONTRACTOR pays for the Goods or part thereof in accordance with the Subcontract, or

(3)

When the Goods or part thereof are dispatched to or from SUBCONTRACTOR’s fabrication yard or to the Jobsite.

All equipment, materials or other tangible items (Goods) for incorporation into the Work or any of its separate parts, shall be segregated within the SUBCONTRACTOR’s facilities (except during the fabrication process) and physically identified by tag or marker as property of CONTRACTOR and as Project materials that will be incorporated into the Work.

34.2

SUBCONTRACTOR warrants and guarantees that legal title to and ownership of the Work shall be free and clear of any and all liens, claims, security interests or other encumbrances arising out of the Work when title thereto passes to CONTRACTOR, and if any such warranty or guarantee is breached, SUBCONTRACTOR shall have the liability and obligations set forth in General Condition titled INDEMNITY.

34.3

However such transfer of title in the Goods will be without prejudice of CONTRACTOR’s right to refuse the Goods to the extent of SUBCONTRACTOR’s negligence in case of non-conformity with the subcontract requirements.

34.4

Irrespective of transfer of title in the Goods, SUBCONTRACTOR shall remain responsible for risk of loss or damage to work in progress and all Goods to the extent of SUBCONTRACTOR’s negligence until Provisional Acceptance.

34.5

SUBCONTRACTOR shall ensure that the above provisions are imposed upon its suppliers and subcontractors of any tier and shall execute all documents and take all steps necessary or required by CONTRACTOR to vest title as CONTRACTOR may direct.

34.6

Title to standard Goods of the type usually bought in bulk such as reinforcement bars, piping materials, non-tagged instruments and instrument installation material, cable and similar items which are not incorporated into the Work shall revert to SUBCONTRACTOR upon agreement by CONTRACTOR that such Goods are not required for the Work.

GC-35

QUALITY ASSURANCE PROGRAM

35.1

Within thirty (30) Days after Subcontract award, SUBCONTRACTOR shall submit a Project specific Quality Assurance Plan for engineering services and within ninety (90) Days after Subcontract award for fabrication and construction activities – for approval by CONTRACTOR.

35.2

The Project specific Quality Assurance Plan shall address all activities relevant to the Work and shall demonstrate how all work performed by SUBCONTRACTOR will conform to the subcontract requirements.

35.3

The plan shall address the interfaces between CONTRACTOR, SUBCONTRACTOR, and other relevant organizational entities. The plan shall include an organization chart showing SUBCONTRACTOR’s corporate and Project organization responsible for managing, performing and verifying the Work. The organization chart shall be supported with a reporting and functional description of SUBCONTRACTOR’s Project organization and identification of the quality related responsibilities of key positions.

35.4

The plan shall be updated as necessary throughout the Subcontract, to reflect any changes to SUBCONTRACTOR’s documented quality system.

35.5

SUBCONTRACTOR’s documented quality system shall provide for the issuance of a “Stop Work” order by SUBCONTRACTOR or CONTRACTOR at any time during the Work, when significant adverse quality trends and/or deviations from the approved Quality Assurance Program are found.

35.6

CONTRACTOR reserves the right to perform Quality Assurance Audits of SUBCONTRACTOR’s approved Quality Assurance Program, including suppliers and subcontractors of any tier, at any stage of the Work.

35.7

CONTRACTOR has outlined basic quality system requirements in Appendix B-1, GENERAL REQUIREMENTS FOR SUBCONTRACTOR QUALITY SYSTEMS. As applicable, SUBCONTRACTOR shall comply with this Appendix B-1.

GC-36

RECORDS AND AUDIT

36.1

SUBCONTRACTOR shall keep full and detailed books, construction logs, records, daily reports, schedules, accounts, payroll records, receipts, statements, electronic files, correspondence and other pertinent documents as may be necessary for proper management under this Subcontract, as required under Applicable Law or this Subcontract, and in any way relating to this Subcontract. SUBCONTRACTOR shall maintain all such Books and Records in accordance with GAAP and shall retain all such Books and Records for a minimum period of three (3) years after Final Completion, or such greater period of time as may be required under Applicable Law.

36.2

Upon reasonable notice, CONTRACTOR or OWNER shall have the right to have audited, SUBCONTRACTOR’s Books and Records by CONTRACTOR or OWNER’s third party auditors but only to the extent necessary to validate payments made to SUBCONTRACTOR or invoiced by SUBCONTRACTOR on the basis of Reimbursable Costs. When requested by CONTRACTOR, SUBCONTRACTOR shall provide CONTRACTOR or OWNER’s auditors with reasonable access to all such relevant Books and Records, and SUBCONTRACTOR’s personnel shall cooperate with such auditors to effectuate the audit or audits hereunder. CONTRACTOR or OWNER shall have the right upon consent of SUBCONTRACTOR (such consent not to be unreasonably withheld or delayed) to have the auditors copy all such Books and Records. SUBCONTRACTOR shall bear all costs incurred by it in assisting with audits performed. SUBCONTRACTOR shall include audit provisions identical to this in all Major Subcontracts. No access to Books and Records shall be granted to CONTRACTOR’s or OWNER’s auditors until such auditors have signed a confidentiality agreement with SUBCONTRACTOR in accordance with the standard practice in the auditing industry for audits of this kind.

36.3

Within a reasonable period of time following a request by CONTRACTOR, SUBCONTRACTOR shall provide CONTRACTOR or OWNER’s third party auditors with any information (including Books and Records) regarding quantities and descriptions of any Equipment installed on or ordered for the Facility and any other information as CONTRACTOR or OWNER’s third party auditors may deem reasonably necessary in connection with the preparation of CONTRACTOR’s or OWNER’s tax returns (including information reasonably required to determine the amount of Qualified Research Expenditures incurred in connection with the Work) or other tax documentation in connection with the Project; provided, however , if, in connection with such preparation, CONTRACTOR or OWNER’s third party auditors request information relating to the actual cost for any item of Work and such item of Work is included in the Subcontract price or in any lump sum Change Order, SUBCONTRACTOR shall provide such information to CONTRACTOR or OWNER’s third party auditors as provided herein. No access to the aforementioned information (including Books and Records) shall be granted to CONTRACTOR’s or OWNER’s auditors until such auditors have signed a confidentiality agreement with Contractor in accordance with the standard practice in the auditing industry for audits of this kind.

36.4

If CONTRACTOR or OWNER establishes uniform codes of accounts for the Project, SUBCONTRACTOR shall use such codes in identifying its records and accounts.

36.5

SUBCONTRACTOR shall not, and shall provide that its Subsubcontractors and agents or employees of any of them shall not, without CONTRACTOR’s prior written approval, (i) pay any commissions or fees, or grant any rebates, to any employee or officer of CONTRACTOR OR OWNER or their Affiliates, (ii) favor employees or officers of same with gifts or entertainment of a significant cost or value, or (iii) enter into any business arrangements with employees or officers of same.

GC-37

WARRANTY / DEFECT CORRECTION PERIOD

37.1

SUBCONTRACTOR warrants that:

(1)

The Work, including the Equipment, and each component thereof, shall be new (unless otherwise specified in this Subcontract) and of good quality;

(2)

the Work (including the Equipment) shall be in accordance with all of the requirements of this Subcontract, including in accordance with GECP, Applicable Law and Applicable Codes and Standards; and

(3)

the Work (including the Equipment) shall be free from encumbrances to title

37.2

Should the Plant or any part thereof cease operating due solely to corrective actions for warranty Defects, the Defect Correction Period shall be extended by a time equal to the duration of such stoppage.

37.3

SUBCONTRACTOR warrants that the written instructions regarding the use of equipment, including those instructions in operation and maintenance manuals, shall conform to this Subcontract and GECP as of the time such instructions are prepared. If any non-conformance with the Warranty occurs or is discovered at any time prior to or during the Defect Correction Period, SUBCONTRACTOR shall, at its sole expense, furnish CONTRACTOR with corrected instructions.

37.4

SUBCONTRACTOR shall, without additional cost to CONTRACTOR, obtain warranties from Subsubcontractors that meet or exceed the requirements of this Subcontract; provided, however, SUBCONTRACTOR shall not in any way be relieved of its responsibilities and liability to CONTRACTOR under this Subcontract, regardless of whether such Subsubcontractor warranties meet the requirements of this Subcontract, as SUBCONTRACTOR shall be fully responsible and liable to CONTRACTOR for its warranty and correction of Defective Work obligations and liability under this Agreement for all Work. All such warranties shall run to the benefit of SUBCONTRACTOR but shall permit SUBCONTRACTOR, prior to assignment to CONTRACTOR, the right (upon mutual agreement of the Parties), to authorize CONTRACTOR to deal with Subsubcontractor on SUBCONTRACTOR’s behalf. Such warranties, with duly executed instruments assigning the warranties shall be delivered to CONTRACTOR concurrent with the end of the Defect Correction Period. This shall not in any way be construed to limit SUBCONTRACTOR’s liability under this Subcontract for the entire Work or its obligation to enforce Subsubcontractor warranties.

37.5

The Warranty does not provide a remedy, and SUBCONTRACTOR shall have no liability to CONTRACTOR, for any damage or defect to the extent caused by: (i) improper repairs or alterations, misuse, neglect or accident by CONTRACTOR; (ii) operation, maintenance or use of the Facility, Work or any component thereof in a manner not in compliance with a material requirement of operation and maintenance manuals delivered by SUBCONTRACTOR to CONTRACTOR; (iii) normal wear and tear; (iv) normal corrosion or (v) an event of Force Majeure, to the extent such event of Force Majeure occurs after Provisional Acceptance.

37.6

Prior to RFCD, all Work shall be subject to inspection by CONTRACTOR at all reasonable times to determine whether the Work conforms to the requirements of this Subcontract. Upon CONTRACTOR giving reasonable prior notice, SUBCONTRACTOR shall furnish CONTRACTOR with access to all locations where Work is in progress on the Site and at the offices of SUBCONTRACTOR and its Subsubcontractors. CONTRACTOR shall be entitled to provide SUBCONTRACTOR with written notice of any Work that CONTRACTOR believes does not conform to the requirements of this Subcontract. If any Work is Defective, then SUBCONTRACTOR shall, at its own expense correct such Defective Work. The cost of disassembling, dismantling or making safe finished Work for the purpose of inspection, and reassembling such portions (and any delay associated therewith) shall be borne by (i) SUBCONTRACTOR, if such Work is found not to conform with the requirements of this Subcontract and (ii) by CONTRACTOR, if such Work is found to conform with the requirements of this Subcontract.

37.7

CONTRACTOR shall provide SUBCONTRACTOR with a list of witness points for all equipment no later than sixty (60) Days after execution of the relevant Subcontract and CONTRACTOR shall notify SUBCONTRACTOR which of the witness points it wishes its personnel to witness. SUBCONTRACTOR shall provide CONTRACTOR with at least fifteen (15) Days prior written notice of the actual scheduled date of each of the tests CONTRACTOR has indicated it wishes to witness. SUBCONTRACTOR shall cooperate with CONTRACTOR if CONTRACTOR elects to witness any additional tests, and SUBCONTRACTOR acknowledges that CONTRACTOR shall have the right to witness all tests being performed in connection with the Work.

37.8

CONTRACTOR’s right to conduct inspections shall not obligate CONTRACTOR to do so. Neither the exercise of CONTRACTOR of any such right, nor any failure on the part of CONTRACTOR to discover or reject Defective Work shall be construed to imply an acceptance of such Defective Work or a waiver of such Defect. In addition, CONTRACTOR’s acceptance of any Work which is later determined to be Defective shall not in any way relieve SUBCONTRACTOR from its obligations to correct the Work

37.9

If, during the Defect Correction Period, any Work or component thereof is found to be Defective, and CONTRACTOR provides written notice to SUBCONTRACTOR within the Defect Correction Period regarding such Defect, SUBCONTRACTOR shall, at its sole cost and expense, promptly correct (whether by repair, replacement or otherwise) such Defective Work (the correction of the Defective Work is hereby defined as the “Corrective Work”). Any such notice from CONTRACTOR shall state with reasonable specificity the date of occurrence or observation of the alleged defect and the reasons supporting CONTRACTOR’s belief that SUBCONTRACTOR is responsible for performing Corrective Work. CONTRACTOR shall provide SUBCONTRACTOR with access to the Work sufficient to perform its Corrective Work, so long as such access does not unreasonably interfere with operation of the Facility and subject to any reasonable security or safety requirements of CONTRACTOR and SUBCONTRACTOR. In the event SUBCONTRACTOR utilizes spare parts owned by CONTRACTOR in the course of performing the Corrective Work, SUBCONTRACTOR shall supply CONTRACTOR free of charge with new spare parts equivalent in quality and quantity to all such spare parts used by SUBCONTRACTOR as soon as possible following the utilization of such spare parts.

37.10

If SUBCONTRACTOR fails to commence the Corrective Work within a reasonable period of time not to exceed ten (10) Business Days, or does not complete such Corrective Work promptly (and provided that CONTRACTOR provides SUBCONTRACTOR access to the Facility, then CONTRACTOR, upon providing prior written notice to SUBCONTRACTOR, may perform such Corrective Work, and SUBCONTRACTOR shall be liable to CONTRACTOR for the reasonable costs incurred by CONTRACTOR in connection with performing such Corrective Work, and shall pay CONTRACTOR, within ten (10) Days after receipt of written notice from CONTRACTOR, an amount equal to such costs (or, at CONTRACTOR’s sole discretion, CONTRACTOR may withhold or offset amounts owed to SUBCONTRACTOR or collect on the Letter of Credit, if applicable, such costs and expenses); provided, however, if Defective Work discovered during the Defect Correction Period presents an imminent threat to the safety or health of any person and CONTRACTOR knows of such Defective Work, CONTRACTOR may perform such Corrective Work in order to correct such Defective Work without giving prior written notice to SUBCONTRACTOR. In such event, SUBCONTRACTOR shall be liable to CONTRACTOR for the reasonable costs incurred by CONTRACTOR in connection with performing such Corrective Work, and shall pay CONTRACTOR, after receipt of written notice from CONTRACTOR, an amount equal to such costs (or, at CONTRACTOR’s sole discretion, CONTRACTOR may withhold or offset amounts owed to SUBCONTRACTOR or collect on the Letter of Credit, if applicable, such costs). To the extent any Corrective Work is performed by or on behalf of

CONTRACTOR, SUBCONTRACTOR’s obligations with respect to such Defective Work that is corrected by on or behalf of CONTRACTOR shall be relieved, with the exception of SUBCONTRACTOR’s obligation to pay CONTRACTOR the reasonable costs incurred by CONTRACTOR in connection with performing such Corrective Work.

37.11

With respect to any Corrective Work performed by SUBCONTRACTOR, the Defect Correction Period for such Corrective Work shall be extended for an additional one (1) year from the date of the completion of such Corrective Work; provided, however, in no event shall the Defect Correction Period for any Work (including Corrective Work) extend beyond thirty-six (36) months after SUBCONTRACTOR’s achievement of RFCD of the last tank.

37.12

All Corrective Work shall be performed subject to the same terms and conditions under this Subcontract as the original Work is required to be performed. In connection with the Corrective Work, any change to Equipment that would alter the requirements of this Subcontract may be made only with prior written approval of CONTRACTOR.

37.13

SUBCONTRACTOR shall not be liable to CONTRACTOR for any Defective Work discovered after the expiration of the Defect Correction Period (as may be extended pursuant to GC-37.11), except for any liability of SUBCONTRACTOR pursuant to its indemnification, defense and hold harmless obligations under this Subcontract but such indemnification defense or hold harmless obligation are not warranty obligations under this section.