Dated the 12th of December 2008 BETWEEN CENTURY CORP SDN BHD (Company No. 336693-V) AND PLANT & OFFSHORE TECHNOLOGY SDN BHD (Company No. 317205-U) &&&&&&&&&&&&&&&&&&&&&&&&&&&. CONTRACT AGREEMENT &&&&&&&&&&&&&&&&&&&&&&&&&&&. CONTRACT AGREEMENT

1.1

The Employer is desirous of constructing and developing a Bio-diesel Process Plant at Kelurahan Sungai Guntung, Kecamatan Medang Kampai, Kota Dumai, Sumatera, Indonesia with an output capacity of 200,000 tons per year (the “Project”).

1.2

The Employer is hereby desirous of  granting  and  the  Contractor  is  hereby desirous of accepting a contract to undertake the “Engineering, Procurement, Construction and Commissioning” works  (the "Works")  in  relation  to  the  said Bio-diesel   Process  Plant,  upon  the  terms  and  conditions  stipulated  herein below.

1.3

This Contract Agreement is also pursuant to the Letter of Award issued by the Contract Awarder to the Contractor on 13th February 2007.

1.4

For the avoidance of doubt, this Contract Agreement  shall  comprise  the following documents which shall be deemed  to  form  and  be  read  and construed as part of the Contract Agreement:

 

(a)

The Letter of Award issued by the Employer to the Contractor on 13th February 2007

 

(b)

The Revised Letter of Award issued by the  Employer  to  the  Contractor on 15th May 2008; and

 

(c)

any other agreement or agreements reached vide documents and correspondence between the  parties  hereto  post  this  Contract Agreement  shall be deemed to  form  and  be  read  and  construed  as  part of the Contract Agreement

2.1

The words and expressions herein shall have the same meanings as are respectively assigned and hereinafter referred to.

 2.2

In consideration of the payment of the Contract Price to be  made  by  the Employer to the Contractor as hereinafter mentioned, the Contractor hereby covenants with the Employer to design, execute and complete the Works in conformity with the provisions of the Contract.

 

2.3

Subject to the terms and conditions hereinbelow,  the  Contract  shall  come  into full force and effect on the date of the Contract Agreement.

3.1

The total contract price as agreed between the parties  hereto  shall  be RINGGIT MALAYSIA TWO HUNDRED MILLION ONLY (RM  200,000,000.00) (the “Contract Price”). The  Contract  Price  shall  be  subject  to final measurement upon completion of the Works.

3.2

The parties hereto hereby agree that the Contract Price is  merely  a  provisional price at the time of execution of  this  Contract  Agreement.  The  Contract  Price shall be determined and finalized upon:

 

(a)

the due confirmation by the Employer and the Contractor of further detailed technical specifications and requirements in respect  of  the Works;

 

(b)

the subsequent due preparation by the Contractor of the conceptualdesign and the engineering construction drawings in respect  of  the Works;

 

(d)

the provisions of Clause 16.16 in Article XVI , in that,  in the event of changes in government legislation resulting in the  cost  of  labour, goods and other inputs to the Works escalating by more than FIVE PERCENT (5%), the parties hereto shall be at liberty to re-visit and re-negotiate in good faith the Contract Price.

4.1

(a)

The Works to be undertaken by the Contractor pursuant to this Contract Agreement shall be as set forth hereinbelow, which shall be performed primarily at Kelurahan Sungai Guntung, Kecamatan Medang  Kampai, Kota  Dumai, Sumatera, Indonesia (hereinafter referred to as the "Work Site"). The Employer shall give the Contractor right of access to and possession of all parts of the Work Site within such time (or times) as shall necessarily be required by the Contractor. The Employer shall give to the Contractor possession of the Work Site or means of access with effect from the Commencement Date. The Employer shall  also  obtain,  at  his  risk  and  cost, any additional facilities outside the Work Site which the Contractor may require for the purposes of the Works.  If  the  Contractor  suffers  delay and/or incurs costs as a result of a  failure  by  the  Employer  to  give  any such right  or  possession  within  such  time,  the  Contractor  shall  give  notice to the Employer and shall be entitled to an extension of time for any such delay, if completion is or will be delayed, under Article 6.2 herein, and payment of any such cost plus reasonable profit,  which  shall  be  added  to the Contract Price.

(a)

Execute the Works  in  accordance  with  the  Employer's  requirements  as  may be documented in technical  drawings,  schedules,  diagrams  and specifications, to be given by the Employer, setting forth in detail the requirements for construction of the Works;

(b)

Furnish the services of engineers, designers, draftsmen and other personnel necessary or appropriate for the preparation  of  drawings,  specifications  and other such items necessary or appropriate for the completion of the Works;

(d)

Furnish the services of construction managers,  supervisors,  engineers  and other personnel necessary or appropriate to place and administer construction subcontracts, purchase orders and other such agreements necessary for the completion of the Works;

(e)

Furnish the services  of  engineers,  supervisors,  foremen,  construction workers, skilled and unskilled labour and other personnel necessary or appropriate for the completion of the Works;

(f)

Procure machinery, equipment, materials, supplies, miscellaneous construction items and services (including transportation, utilities and other facilities) necessary or appropriate for the proper execution and completion of the Works;

(g)

Place and administer construction subcontracts, purchase orders  and  other such agreements necessary for the completion of the Works and supervise  and direct the Works using its best skill and attention to assure that the Work is completed in a good and workmanlike manner;

(h)

Supply the materials, small tools and consumables necessary or appropriate for the completion of the Works;

(i)

Supply major  construction  tools  and  equipment  necessary  or  appropriate for the completion of the Works;

(j)

Prepare and furnish a Work schedule and issue  updates  thereof  to  the Employer as and when may be needed;

(k)

File all documents and obtain all permits necessary for the Works, except those which are required to be obtained by the Employer under this Contract ;provided that the Employer will cooperate with the Contractor and take any reasonable actions which are required of the Employer and/or reasonably requested by the Contractor;

(l)

Except to the extent to be provided by the Employer pursuant to  the  express terms of this Contract, to furnish the services of personnel, and provide the tools and materials, necessary or appropriate to start up the Works;

(n)

Prepare Variation Orders for approval and execution by the Employer in accordance with this Contract;

(o)

At reasonable times, during normal business hours, provide access to shop drawings, product data, samples and other technical data for review during construction of the Works;

(q)

Provide  operating  manuals and  written  instructions  relating  to  the  operation of all installed and portable equipment provided hereunder;

(r)

To cooperate with the Employer in its  obtaining  of  permits  and  licenses  as may be required; and

(s)

Appoint one or more individuals who shall be authorized to  act  on  behalf  of the Contractor and with whom the Employer may  consult  at  all  reasonable times, and   whose instructions, requests  and  decisions  will  be  binding  upon the Contractor as to all matters pertaining  to  this  Contract  and  the performance of the parties hereunder.

(a)

Provide a site prepared and ready for the commencement of the Works and provide the Contractor with right of access to  and  possession  of  all  parts  of the site with effect from the Commencement Date, as the case may be;

(b)

Provide or cause others to provide the Contractor with the design criteria, surveys, soil test results, Environmental Impact Assessment (EIA) reports, process plant requirements and other information, as may be required by the Contractor from time to time;

(c)

(e)

Pay all sales,  consumer,  use  and  similar  taxes,  fees  and  import  duties to  the extent they were in effect on the date hereof;

(f)

Obtain, with the Contractor's assistance and cooperation,  all  permits  and licenses which may be the responsibility of the Employer's;

(g)

Obtain and furnish the Contractor, as and when required  by  the  Contractor, with any and all documents representing any and all approvals given by the relevant authorities, including but not limited to the relevant Customs Department(s) in respect of the import clearance of equipment and machinery required for the purpose of the Works;

(h)

Obtain and pay all expenses involved in obtaining the  easements  and  rights  of way necessary for the Contractor to perform the Works;

(i)

Obtain and pay the relevant authorities all expenses and/or required contributions in obtaining the connection of basic amenities and facilities (e.g. electricity, water etc.) to the Project site;

(j)

Provide interface with and  coordination  of  all  work  which  is  being  performed by Employer or contractors other than the Contractor, if any;

(k)

Advise of the existence and location, and undertake  the  abatement  and disposal of all toxic and/or hazardous materials or any other existing underground utilities at the Project site, which may be encountered by the Contractor in the performance of the Works;

(l)

Furnish within ten (10) days of a written request all required reviews and approvals (or other appropriate action) with respect to all samples, estimates, schedules, shop drawings, drawings, specifications, purchase orders, contracts, and other items submitted and/or proposed by the Contractor;

(m)

Provide appropriate on-site representatives and all feed stock necessary or appropriate to start up the Works;

 (n)

Make all efforts and perform all things necessary to obtain and  procure the Certificate of Fitness from the relevant authorities in respect of the Project upon the completion of the Works by the Contractor;

 (o)

Appoint an individual who shall be  authorized  to  act  on  behalf  of  the  Employer, with whom the Contractor may consult at all reasonable times, and whose instructions, requests and decisions will be binding upon the Employer as to all matters pertaining to this Contract Agreement and the performance of the parties hereunder.

 5.1

The commencement date of this Contract shall be the 15th day  of  May,  2007  which  is also the Effective Date (as defined in the Letter of Award).

 6.1

Subject to the provisions herein in respect of extension  of  time,  the  period  in which this Contract shall subsist shall be SEVENTEEN (17) MONTHS from the Commencement Date in accordance with the terms and conditions hereof (hereinafter referred to as the "Contract Period").

6.2

The Contractor shall be entitled to an extension of the  Contract  Period  if  and  to the extent that completion is or will be delayed by any of the following causes:

 

(a)

a Variation under Article X;

 

(b)

a cause of delay giving an entitlement to an extension of time under  a  sub-article herein;

 

(c)

any delay, impediment or prevention caused by or attributable to the Employer, the Employer’s personnel  or  the  Employer’s  other  contractors on the Work Site.

6.3

If the Contractor considers himself to be entitled to any extension of the Contract Period and/or any additional payment, under any Article herein or otherwise in connection with the Contract, the Contractor shall give notice to the Employer, describing the event or circumstance giving rise to the claim.  The  notice  shall  be given as soon as practicable, and not later than 28 days after the Contractor became aware, or should have become aware, of the event or circumstance.

6.4

If the following conditions apply, namely:

 

(a)

the Contractor has diligently followed the procedures laid down by the relevant legally constituted public authorities in the country,

 

(b)

these authorities delay or disrupt the Contractor's work, and

 

(c)

the delay or disruption was not reasonably foreseeable by an experienced contractor by the date for submission of the Tender,

6.5

The Employer agrees that in the event of any delay by the Technology  Provider in the delivering any Equipment, the Contract Period shall be extended correspondingly by such number of days due to the delay.

6.6

Upon completion of the Works, the Contractor shall carry out Tests on Completion in accordance with Article XV herein.

Item

Description

Percentage (%)

1

Mobilization of Key Personnel

2

2

Commencement of Engineering Works

5

3

Completion of Engineering Works

5

4

Award of Purchase Order to Technology Provider

15

5

Commencement of Procurement of Long Lead Equipment/Materials

33

6

Arrival of Materials on Site

20

5

Construction Progress Claim

20

Total

100

 

7.2

In respect of the scheduled payments above, the Contractor shall submit to the Employer scheduled progress reports reflecting all progressive work done by the Contractor.

8.1

The Contractor shall furnish the Employer a performance bond in the form of an irrevocable and unconditional first call Bank Guarantee (“BG”), for the amount not less than five percent (5%) of the Contract Price or a fixed deposit for the amount not less than three (3%) of the Contract Price with a lincensed bank operating in Malaysia and acceptable to the Employer to guarantee the satisfactory performance of the Contract’s obligations under the Contract.

 

8.2

The Performance Bond shall be withdrawn by the Contractor upon the physical completion, testing and commissioning of the works by the Contractor.

 9.1

In an effort to ensure a continuous work flow towards completing the Works within the Contract Period, the Employer and the Contractor shall throughout the Contract Period undertake to maintain constant communication and flow of information in good faith between the parties.

 9.2

In the event that the Contractor's works are delayed and/or are anticipated to experience delay due to any reason whatsoever, the Contractor shall forthwith notify the Employer of the delay and/or the anticipated delay and the accompanying reasons for such delay and/or anticipated delay, whereupon the Employer shall allow for such extension of the Contract Period and such additional costs as may reasonably be required by the Contractor to complete the works in question.

 9.3

In the event that the Works are not completed within the Contract Period or such extended Contract Period as may be accorded to the Contractor and that such circumstances are a direct and immediate consequence of the Contractor's misdeeds, the Employer shall be entitled to Liquidated Damages (the “LD”) from the Contractor of an agreed sum equivalent to RINGGIT MALAYSIA FIVE THOUSAND (RM5,000.00) Only for each calendar day that work is carried out after the expiry of the Contract Period or extended Contract Period, as the case may be, until its full completion PROVIDED that such LD imposed shall not be more than FIVE PER CENT (5%) of the Contract Price.

10.1

The Employer may issue a variation order and/or variation orders for any of the Works, by way of addition, modification or omission. The Employer shall issue such instructions and/or variation orders in writing to Contractor.

10.2

Parties hereto shall give due recognition to and endeavour to reach a mutual agreement of the terms and conditions pertaining to any and all additional costs that may be incurred and any extension of time as may be required before the commencement of works pursuant to such variation orders.

 10.3

In this respect, however, if the parties fail to reach any agreement on the terms and conditions above mentioned, such inability to reach a consensus shall not be relied upon by any party as a ground to terminate the Contract.

 11.1

The Defects Liability Period shall be for a period of TWELVE (12) MONTHS which shall commence on the date of mechanical completion upon the completion of the physical works, testing and commissioning of the Works by the Contractor.

 12.1

If at any time during the course of the Works or during the Defects Liability Period there should appear any defects or faults as a result of the Works, such defects shall immediately be specified by the Employer and/or any authorized agent, servant, contractor and/or consultant of the Employer in a Schedule of Defects, which shall be prepared pursuant to a joint inspection of the parties hereto of the areas affected by such defects or faults.

 12.2

Any such defects or faults set out in the Schedule of Defects shall then be made good by the Contractor.

12.3

Upon the aforesaid rectification, and upon the Employer expressing its satisfaction of the same, which shall not be unduly withheld, the Contractor shall be absolved of all liabilities that arose and/or that may arise thereafter from such defects.

12.4 

 13.1

The Contractor shall procure, and maintain at its own cost and expense during performance of the Works, the following insurances:-

 

(a)

Workers' Compensation Insurance and/or any other insurance as required by the laws of Malaysia to provide for payment to its employees employed on or in connection with the Works covered by this Contract and/or their dependents;

 

(b)

Erection All Risks Insurance to cover the full replacement value of Contractor's Equipment used, owned, leased or hired by the Contractor; and

 

(c)

Comprehensive General Liability Insurance in the amount of RINGGIT MALAYSIA: ONE MILLION ONLY [RM1,000,000.00] for any one claim or series of claims arising out of an accident or occurrence resulting in bodily and/or personal injury including death and property damage or destruction to any person or property which shall arise out of or in consequence of the Contractor's performance of the Works.

 14.1

In the event that a deadlock has occurred and/or in the event any misunderstanding, disagreement or dispute shall arise between the parties hereto concerning any aspect of this Contract, including any dispute touching the validity or the construction, meaning or effect of this Contract, or the rights or liabilities of the parties hereunder, or any matter arising out of the same, or connected herewith, the parties hereby covenant that, in keeping with the cordial relationship of good faith and mutual trust that exists between them, they will exercise earnest efforts and use their best endeavours to resolve any such misunderstanding, disagreement or dispute in an amicable manner so as to eliminate any discord and avoid any conflict.

14.3

Arbitration

14.3.1 

Any  dispute,  controversy or claim arising out of or relating to this Agreement, or the rights or liabilities of the parties herein or the breach, termination or invalidity thereof or any matter arising out of the same or connected therewith, which cannot be settled amicably shall be decided by arbitration  in  accordance with the  Rules for  Arbitration  of the  Kuala Lumpur Regional Centre for Arbitration (KLRCA).

14.3.2

The appointing authority shall be the Kuala Lumpur Regional Centre for Arbitration. The number of arbitrators shall be one if mutual agreement can be reached by the Parties, failing which, it shall be three (3) with one to be appointed by each Party  and the  third to be  appointed by  KLRCA. The place of arbitration  shall be at Kuala Lumpur.  The language  to be used in the arbitration shall be English. The decision of the arbitrators shall be final and binding on the parties.

14.3.3

It is agreed, however, that no one who is an employee of either party or who is in anyway financially interested in this Contract shall be appointed to act as an arbitrator.

14.3.4

The costs of the arbitration shall be borne by the party whose contention was not upheld by the arbitration tribunals, unless otherwise provided in the arbitration award.

15.1

EMPLOYER’S TAKING OVER

 

(a)

issue the Taking-Over Certificate to the Contractor, stating the date on which the Works or Section were completed in accordance with the Contract, except for any minor outstanding work and defects which will not substantially affect the use of the Works or Section for their intended purpose (either until or whilst this work is completed and these defects are remedied); or

 

(b)

reject the application, giving reasons and specifying the work required to be done by the Contractor to enable the Taking-Over Certificate to be issued. The Contractor shall then complete this work before issuing a further notice under this Sub-Article.

 

(a)

the Employer shall provide all electricity, fuel and materials, and make the Employer's Personnel and Plant available;

 

(b)

the Contractor shall provide any other plant, equipment and suitably qualified and experienced staff, as are necessary to carry out the Tests after Completion efficiently; and

 

(c)

the Contractor shall carry out the Tests after Completion in the presence of such Employer's and/or Contractor's Personnel as either Party may reasonably request.

 

(a)

pre-commissioning tests, which shall include the appropriate inspections and ("dry" or "cold") functional tests to demonstrate that each item of Plant can safely under-take the next stage, (b);

 

(b)

commissioning tests, which shall include the specified operational tests to demonstrate that the Works or Section can be operated safely and as specified, under all available operating conditions; and

 

(c)

trial operation, which shall demonstrate that the Works or Section perform reliably and in accordance with the Contract.

(a) 

the Contractor shall complete any work which is outstanding on the date stated in the Taking-Over Certificate and execute all work required to remedy defects or damage; and

 

(b)

either Party may then require the failed Tests, and the Tests after Completion on any related work, to be repeated under the same terms and conditions.

15.3

PERFORMANCE CERTIFICATE

16.1

The Contractor shall:

 

(a)

comply with all applicable safety regulations;

 

(b)

take care of the safety of all persons entitled to be on the Work Site;

 

(c)

use reasonable efforts to keep the Work Site and the Works clear of unnecessary obstruction so as to avoid danger to these persons;

 

(d)

provide fencing, lighting, guarding and watching of the Works until completion and taking over under Article 15.1 [Employer’s Taking Over].

16.3

NOTICE

 

16.3.1

Any notice under this Agreement shall be in the English Language and shall be in writing and signed by or on behalf of the Party giving it and may be served by leaving it or sending it by personal delivery, prepaid or registered post or facsimile transmission to the address(es) (including but not limited to facsimile number) of the recipient set out in this Contract or in any or such other address as the recipient may designate by notice given in accordance with the provisions of this sub­article.

16.3.2

Any notice so served shall be deemed to have been received:-

 

(b)

in the case of pre-paid or registered mail, five (5) days from the date of posting;

 

(c)

in the case of facsimile, at the time of transmission [if the successful transmission report bears the same date as the notice with the time of transmission stated thereon] and confirmed by mail.

 

Each of the articles contained herein shall be construed as independent of everyother article to the effect that if any article shall be held to be invalid or unenforceable by a court of law or other competent authority, then such invalidity shall be deleted from this Contract and the remaining articles shall continue to have full force and effect.

 

(a)

an extension of time for any such delay, if completion is or will be delayed, under Article 6.2; and

 

(b)

payment of any such Cost, which shall be added to the Contract Price.

 

(a)

which is beyond a Party's control,

 

(b)

which such Party could not reasonably have provided against before entering into the Contract,

 

(c)

which, having arisen, such Party could not reasonably have avoided or overcome, and

 

(d)

which is not substantially attributable to the other Party.

 

(i)

war, hostilities (whether war be declared or not), invasion, act of foreign enemies,

 

(ii)

rebellion, terrorism, revolution, insurrection, military or usurped power, or civil war,

 

(iii)

riot, commotion, disorder, strike or lockout by persons other than the Contractor's Personnel and other employees of the Contractor and Sub­contractors,

 

(iv)

munitions of war, explosive materials, ionising radiation or contamination by radio-activity, except as may be attributable to the Contractor's use of such munitions, explosives, radiation or radio-activity, and

 

(v)

natural catastrophes such as earthquake, hurricane, typhoon or volcanic activity.

 

(a)

an extension of time for any such delay, if completion is or will be delayed, under Article 6.2; and

 

(b)

if the event or circumstance is of the kind described in sub-paragraphs (i) to (iv) of Sub­-Article 16.7.1 [Definition of Force Majeure] and, in the case of subparagraphs (ii) to (iv), occurs in the Country, payment of any such  Cost.

 

(a)

the amounts payable for any work carried out for which a price is stated in the Contract;

 

(b)

the Cost of Plant and Materials ordered for the Works which have been delivered to the Contractor, or of which the Contractor is liable to accept delivery: this Plant and Materials shall become the property of (and be at the risk of) the Employer when paid for by the Employer, and the Contractor shall place the same at the Employer's disposal;

 

(c)

any other Cost or liability which in the circumstances was reasonably incurred by the Contractor in the expectation of completing the Works;

 

(d)

the Cost of removal of Temporary Works and Contractor's Equipment from the Site and the return of these items to the Contractor's works in his country (or to any other destination at no greater cost); and

 

(e)

the Cost of repatriation of the Contractor's staff and labour employed wholly in connection with the Works at the date of termination.

 

(a)

the Parties shall be discharged from further performance, without prejudice to the rights of either Party in respect of any previous breach of the Contract, and

 

(b)

the sum payable by the Employer to the Contractor shall be the same as would have been payable under Sub-Article 16.7.6 [Optional Termination, Payment and Release] if the Contract had been terminated under Sub-Article 16.7.6.

SIGNED by

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In the presence of:

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In the presence of:

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