Page 1 of 23 - Kuwait Oil Company

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 1 of 23GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)TABLE OF CONTENTS1. Definitions2. Language and Interpretation3. Entire Agreement4. Waiver5. Inspection6. Extent of Contract7. Documents Mutually Explanatory8. Independent Contractor Status9. Assignment10. Subcontracting11. Superintendent and Superintendent’s Representative12. Contractor’s Representative13. Sufficiency of Contract Price14. Warranty15. Contractor’s Personnel16. Safety17. Identification and Passes18. Reports of Accidents and Occurrences19. Indemnities20. Limitation on Liability21. Insurance22. Taxes23. Compliance with State Regulations24. Locally Manufactured Materials25. Transportation and Carriage Priorities26. Contractor’s Material and Equipment27. Date for Commencement28. Working hours29. Programme of Work and Reporting30. Manuals and Documentation31. Acceptance Criteria32. Variation33. Records34. Method of Payment35. Not-to-Exceed Value36. Intellectual Property Rights37. Confidentiality38. Optional Termination39. Remedies and Powers40. Force majeure41. Continuance of the Services42. Time Limitation on Claims by the Contractor43. Disclaimer and Closure of Accounts44. Severability45. Performance Bond46. Notices47. Governing LawMay 2001

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 3 of 23“Network Computing Environment” means the Company’s existing hardware andsoftware properly functioning on the Company’s network.“Not-to-Exceed Value” has the meaning ascribed to it in clause 35.“Performance Bond” means the unconditional bank guarantee submitted by theContractor prior to the date of this Contract and as further described in clause 45.“Problem Free” means the operation of the System in accordance with the AcceptanceCriteria and the Technical Specification for the duration stated in the ContractSpecification.“Programme” means the approved programme referred to in clause 29.“Services” means and includes all those things to be done or provided by the Contractorin accordance with this Contract.“Site” means the various offices of the Company where the Services are to be provided.“Stage” means a portion of the Contract Period as described in the ContractSpecification.“Superintendent” has the meaning ascribed to it in clause 11.“System” means the hardware and/or the software supplied by the Contractor pursuantto this Contract.“System Installation Certificate” means the certificate issued to the Contractor whenthe acceptance tests and commissioning of the System is satisfactorily completed inaccordance with clause 31.2 and the Contractor has complied with its other obligationsthe performance of which is required prior to the issuance of such certificate.“Variation” means any increase, decrease, omission or changes to the Services pursuantto an Adjustment Order.2. LANGUAGE AND INTERPRETATION2.1 All communications in connection with this Contract and its performance shall be in theEnglish language.2.2 Words importing the singular number include the plural and vice versa where the contextrequires. Words importing a gender shall include all genders and words importingpersons shall include incorporated associations and partnerships and any entity with legalstanding.May 2001

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 4 of 232.3 References to the word "include" or "including" are to be construed without limitation.3. ENTIRE AGREEMENT3.1 The Contract embodies the entire agreement between the Company and the Contractor.The parties shall not be bound or obligated by any statement, representation, promise,inducement or understanding of any nature not set forth in the Contract. No changes,amendments or modifications of any of the terms and conditions of the Contract shall bevalid unless reduced to writing and signed by both parties.3.2 All approvals by the Company or the Superintendent shall be in writing and whereverany of the words "approval", "authorised", "approved" and "authorisation" is used, itshall mean in writing.3.3 Any review, agreement or approval by the Company related to the Services shall not actas a waiver of the Contractor’s obligations under the Contract.4. WAIVERNone of the provisions of this Contract shall be considered waived by the Company or itsrepresentatives except when such waiver is made in writing. No such waiver shall be, orbe construed to be, a waiver of any past or future default, breach or modification of anyof the terms or conditions of the Contract except as expressly stated in such a waiver.5. INSPECTIONInspection or non-inspection, witnessing or non-witnessing, approval or non-approvalby the Company or its representatives of any matter required to be done by theContractor shall not be construed as acceptance by the Company nor act as a waiverof the Contractor’s obligations to comply with the requirements of the Contract andbeing free from defects and capable of performing its proper function.6. EXTENT OF CONTRACTThe requirements of the Contract comprise the execution and completion of theServices and the provision of all personnel, transport, vehicles, tools, equipment,materials and everything, whether of a temporary or permanent nature, required in andfor such execution and completion so far as the necessity for providing them isspecified in, or reasonably to be inferred from the Contract.7. DOCUMENTS MUTUALLY EXPLANATORYMay 2001

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 5 of 237.1 All parts of the Contract are intended to be correlative and complementary and anyobligation imposed by one part and not mentioned in another shall be performed to thesame extent and purpose as though required by all. The misplacement, addition oromission of a word or character shall not change the intent of any part of the Contractfrom that set forth by the Contract as a whole.7.2 Ambiguities or discrepancies between the documents shall be explained and adjustedby the Superintendent by way of a written instruction to the Contractor.7.3 Where different standards relative to the same matter appear or are referred to in theContract, then the most stringent of such standards shall apply.8. INDEPENDENT CONTRACTOR STATUSThe parties acknowledge that the Contractor is an independent contractor and is notan agent of the Company. The Contractor has no authority to bind the Company inany way without the express prior written agreement of the Company. All personsemployed by the Contractor or introduced by the Contractor on the Services shall bedeemed employees (or agents as the case might be) solely of the Contractor, and alldebts, liabilities, and obligations of any kind imposed upon or incurred by theContractor in the performance of the Services shall be deemed to be debts, liabilitiesand obligations solely of the Contractor.9. ASSIGNMENTThe Contractor shall not assign the Contract nor any part thereof without the priorwritten consent of the Company nor shall the Contractor without the prior writtenconsent of the Company assign any benefit or interest in or under the Contract, exceptwhere an official assignment of any moneys due or to become due under this Contractis made in favour of the Contractor's bankers.10. SUBCONTRACTING10.1 The Contractor shall not subcontract the whole or any part of the Services without theCompany's prior written consent. Where subcontracting is a specific requirement ofthe Contract, or where the Company consents in writing to subcontracting, thesubcontracting shall not act as a waiver of any of the Contractor’s liabilities orobligations under the Contract and the Contractor shall be responsible for the acts,defaults and neglects of any Subcontractor, its agents, servants or workmen as if theywere the acts, defaults and neglects of the Contractor, its agents, servants or workmen.Subcontracting shall not create any contractual relationship between anySubcontractor and the Company.May 2001

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 6 of 2310.2 All agreements made between the Contractor and any Subcontractor under this clausemust be in writing and must provide that in respect of the work or goods the subject ofthe subcontract, the Subcontractor shall be bound to the Contractor under the sameobligations and liabilities as are imposed upon the Contractor under the terms of thisContract.11. SUPERINTENDENT AND SUPERINTENDENT'S REPRESENTATIVE11.1 The Superintendent is the Company’s representative with respect to the performance ofthe Services and the administration of the Contract and is authorised to give instructionsin relation thereto.11.2 The Superintendent may at any time review and inspect the Services, or any portion ofthem, and the Contractor shall give him access, at all reasonable times, to theContractor’s and Subcontractor’s quality control procedures, tools and data, includingcomputer programmes. The Superintendent may reject any specifications, materials orequipment that do not comply with the requirements of the Contract.11.3 The Superintendent is authorised to make final decisions on all questions involving theinterpretation of the Company’s requirements and any documents furnished by theCompany to the Contractor.11.4 No approval given by the Superintendent shall be binding unless given in writing, andwherever the words “approved”, “authorised”, “approval”, or “authorisations” are used itshall mean in writing.11.5 Any review, agreement or approval by the Superintendent shall not be a waiver of theContractor’s obligations under the Contract.11.6 The Superintendent may from time to time delegate to the Superintendent'sRepresentative any of the powers and authorities vested in the Superintendent. Anywritten instruction or approval given by the Superintendent's Representative to theContractor within the terms of such delegation, shall bind the Contractor as though it hadbeen given by the Superintendent, provided always that:May 200111.6.1 failure of the Superintendent's Representative to disapprove any work orServices shall not prejudice the power of the Superintendent thereafter todisapprove such work or Services and to order the re-performance thereof;11.6.2 if the Contractor shall be dissatisfied by reason of any decision of theSuperintendent's Representative it shall be entitled to refer the matter to theSuperintendent, who shall thereupon finally confirm, reverse or vary suchdecision;11.7 The Superintendent's Representative shall monitor the Services and may at any timereview, examine and inspect the Services and any materials to be incorporated into the

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 7 of 23Services or any portion of them, and the Contractor shall give him access, at allreasonable times, to the Contractor’s, Subcontractor’s, quality control procedures, toolsand data, including computer programmes and scheduling programmes.11.8 The Superintendent may reject any tools, material, equipment or Services which do notcomply with the requirements of the Contract, but shall have no authority to relieve theContractor of any of its duties or obligations under the Contract nor, except as expresslyprovided hereunder, to order any work involving delay or any extra payment by theCompany nor to make any Variation to the Services.12. CONTRACTOR’S REPRESENTATIVEThe Contractor shall nominate a person prior to the commencement of the Services, toact as the Contractor's representative. The Contractor’s representative shall beresponsible for supervising the Services and shall have the full responsibility andauthorisation to act on behalf of the Contractor concerning all matters arising out of or inconnection with this Contract. Such representative shall receive on behalf of theContractor, notice, directions and instructions from the Superintendent.13. SUFFICIENCY OF CONTRACT PRICE13.1 The Contractor shall be deemed to have made proper allowance in the Contract Price ofits obligations under the Contract, and the Contract Price shall be deemed to cover all itsobligations under the Contract and all matters necessary for the proper execution of theServices.13.2 The Contractor shall remain liable to perform all of its obligations under the Contract,notwithstanding that it did not foresee any matter that has affected or may affect theperformance of the Services.14. WARRANTY14.1 The Contractor warrants that:14.1.1 that it shall execute the Services in accordance with the Contract and shall comply withthe Superintendent’s instructions and directions on any matter arising out of or inconnection with the Services;14.1.2 that it possesses the specialised knowledge, expertise and experience necessary to enableit to fulfill the requirements of this Contract and to provide the Services efficiently andeffectively, promptly upon demand by the Company in accordance with the requirementsof this Contract;14.1.3 that each member of its personnel shall be sufficiently qualified, skilled, experienced andMay 2001

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 8 of 23competent to perform satisfactorily and reliably the duties and exercise the degree ofjudgment required to achieve the high standards reasonably expected from the personnelof the Contractor;14.1.4 that it shall exercise the degree of professional skill, care and diligence in theperformance of the Services consistent with the standards of an internationally renownedcontractor carrying out similar services, and possessing the specialised knowledge,expertise and experience of a contractor who enjoys a high reputation in work in thenature of the Services, and further warrants to perform the Services in accordance withthe best relevant practices and standards;14.1.5 that it shall comply with all Kuwaiti national and local laws and regulations applicable tothe same and in accordance with the requirements of the Contract;14.1.6 that it shall comply with the direction of the Company, and shall furnish all facilities,equipment, tools, material, resources and personnel required for the Services;14.1.7 that all material and equipment provided for the Services shall meet the manufacturers’specifications relating thereto including all quality standards and shall be fit for theirintended purpose.15. CONTRACTOR’S PERSONNEL15.1 The Contractor shall employ upon the Services, during Stage 1, a suitably qualifiedand experienced engineer who shall act as Contractor’s representative and who shallbe responsible for the Services.15.2 The Contractor shall employ on the Services, suitably qualified and experiencedpersonnel having the expertise to execute the Services.15.3 The Contractor shall ensure the continuous service of its personnel according to themanpower histogram issued with the Programme. In case it becomes necessary toreplace any of the Contractor’s personnel, such replacement shall be coordinated withthe Superintendent to cause minimum disturbance to the Services.15.4 The Contractor, if instructed to do so by the Company, shall immediately withdraw anymember of the Contractor's personnel from the Services whose presence the Companyregards detrimental to its interests. In such event, the Company shall not consider anyclaim for additional costs or an extension of time to the Services.16. SAFETY16.1 The Contractor shall ensure that the Services are carried out in accordance with therules of safety provided by Kuwaiti law and with safe working practices. TheContractor shall comply strictly with the Company’s Fire and Safety regulation andMay 2001

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 9 of 23shall provide and maintain at all times during the progress of the Services adequatemeasures to safeguard all material on Site.16.2 The Contractor shall be deemed to have familiarised itself with the Company’s Fire andSafety Regulations before entering into the Contract and shall at the commencement ofthe Services ensure its personnel are fully familiar with the Company’s Fire and SafetyRegulations relevant to the Services.16.3 The Company shall loan a copy of the Company’s Fire and Safety Regulations to theContractor, which the Contractor shall return to the Company on termination of theContract.16.4 The Contractor, without prejudice to its obligations as a prudent employer, shall instructits personnel in all relevant safety practices and precautions and shall issue its personnelwith all appropriate safety equipment and instruct them in the use of these to avoid bodilyharm and damage to property.17. IDENTIFICATION AND PASSES17.1 The Contractor shall provide each of its employees with an identification badge or cardin Arabic and in English showing the Contractor's name, and the name, registrationnumber and a recent photograph of the employee.17.2 The Contractor shall ensure that all Contractor's personnel shall carry with them at alltimes whilst engaged at the Site, their Contractor's identification badge or card, theirrestricted area pass together with any other passes as may be required from time to timeby the State authorities.17.3 The Superintendent shall arrange to obtain all necessary Company passes for theContractor's employees working in the Company's restricted areas. The Contractor shallbe responsible for ensuring the return of such passes to the Superintendent at the time ofdismissal of any employee and at the expiry of the Contract Period. However, theContractor shall be responsible for obtaining all necessary passes from the Stateauthorities. No restricted area passes shall be issued to Contractor's personnel unless theyare under its direct sponsorship or coming to Kuwait as a temporary reinforcement to theContractor's sponsored personnel.17.4 The Company's operational areas shall be considered restricted areas.18. REPORTS OF ACCIDENTS AND OCCURRENCESMay 2001The Contractor on the Company’s accident report form shall report to the Superintendentat the time of the occurrence, or as soon as practicable thereafter, all accidents oroccurrences resulting in injury to the Contractor’s employees or third parties or damageto the property of the Company or third parties, arising out of or in the course of the

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 10 of 23performance of the Services, and shall furnish to the Superintendent copies of all reportsmade to the Contractor’s insurers or third parties.19. INDEMNITIES19.1 The Contractor shall be liable for, and shall indemnify and keep indemnified theCompany against all claims, demands, proceedings, damages, costs, charges andexpenses whatsoever in respect of death, injury, damage or loss to any person or property(including any Company employees or other representatives of the Company and anyproperty of the Company) whatsoever which may arise out of or as a consequence of theperformance of the Services irrespective of the negligence of either party.19.2 The Contractor shall be liable for, and shall indemnify and keep indemnified theCompany against, all losses and claims for injury or death to any personnel in theemployment of the Contractor or its Subcontractor and all losses and claims for damageto Contractor’s or its Subcontractor's property which may arise out of or as aconsequence of the performance of the Services irrespective of the negligence of eitherparty.20. LIMITATION ON LIABILITYNeither the Contractor nor the Company shall be liable for loss of use or anticipatedprofits or other consequential or indirect loss or damage, arising from any causewhatsoever and the parties hereto shall indemnify and keep indemnified each otheragainst all losses, damages and claims therefor.21. INSURANCES21.1 General Third Party Liability PolicyThe Contractor shall effect and maintain a General Third Party Liability Policy,covering its liabilities under clause 19.1 and shall name the Company as principal.The cover under this General Third Party Liability Policy shall be up to the minimumlimit stated in the Contract Specification for any one occurrence, the number ofoccurrences being unlimited.21.2 Motor Vehicle PolicyThe Contractor shall effect and maintain Third Party Motor Vehicle Policy, covering fullunlimited liability (including passenger liability) and all other insurance required inaccordance with Kuwait traffic laws, for all vehicles used or employed on or inconnection with the Services.May 2001

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 11 of 2321.3 Workmen’s Compensation and Employers Liability PolicyThe Contractor shall effect and maintain a Workmen's Compensation Policy andEmployers Liability Policy in accordance with Kuwait Labour Law covering itsliabilities under clause 20.2.21.4 Insurances to be Company approvedThe Contractor shall effect and maintain the insurances stipulated in this clause 21with a Kuwaiti national insurance company, in terms approved by the Company(which approval shall not be unreasonably withheld), and the Contractor shall, priorto the commencement of the Services and whenever required by the Company,produce to the Company the policy or policies of insurance and the receipts of thecurrent premiums.21.5 Waiver of SubrogationThe Contractor’s obtained insurance policies to meet the requirements of the Contractshall include a waiver of subrogation in favour of the Company in the followingterms:"It is hereby agreed that if any payment is made under the Policy No. expiringon in respect of a claim and the Insurer is thereupon subrogated to all the Insured'srights of recovery in relation thereto the Insurer shall not exercise any such right againstKuwait Oil Company and/or its servants, representatives and agents".21.6 Failure to effect InsurancesThe Company may on the Contractor’s failure to effect and keep in force theinsurances required under the Contract obtain and keep in force any such insurancesnot obtained or kept in force by the Contractor and pay any such premium as may benecessary for the purpose and from time to time deduct the amount so paid by theCompany from any moneys due or which may become due to the Contractor orrecover the same as a debt due from the Contractor.21.7 Maintenance of Insurance PoliciesAll insurance policies obtained by the Contractor pursuant to this clause 21 shall containthe provision that they shall not be amended, deleted or permitted to lapse without theexpress prior written approval of the Company.21.8 Evidence of InsuranceThe Contractor shall prior to commencement of the Services, submit to the Company,signed copies of all insurance policies and other concerned documentation asevidence that insurance cover as provided for in this clause has been obtained and iseffective.May 2001

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 12 of 2322. TAXES22.1 The Contractor shall pay all taxes, charges or levies of whatsoever nature payable bythe Contractor under Kuwaiti law in respect of or in connection with this Contract,including income or benefit derived from payments received by the Contractor, noneof which shall be reimbursable by the Company.22.2 The Contractor shall comply with the provisions of Decree No. 3 for 1955 and anysubsequent amendment or re-enactment thereof. The provisions of this clause shallequally apply to any taxes, charges or levies of whatsoever nature payable by theContractor under the law of any other country in respect of or in connection with thisContract.22.3 The Company shall withhold 5% from each payment due to the Contractor under thisContract pending the submission of a valid certificate from the Income Tax ControlOffice of Kuwait stating that the Contractor has discharged its tax liability.23. COMPLIANCE WITH STATE REGULATIONS23.1 The Contractor shall comply, insofar as applicable, with all relevant laws, rules andregulations of the State of Kuwait regarding any matter affecting the Contract andshall indemnify the Company against all penalties and liability of every kind forbreach by it of any such laws, rules and regulations.23.2 The Contractor, without prejudice to the generality of clause 23.1, shall be deemed to haveacquainted itself and shall comply with the following:May 200123.2.1 Article 114 of Law No. 61/76 concerning Social Security;23.2.2 Order No. 77 of 1984 (Ministry of Social Affairs and Labour) concerning theIssue of Work Permits to Non-Kuwaiti Workers in the Private Sector;23.2.3 Law No. 18/1978 concerning the Rules of Safety and the Protection of PublicUtilities and Resources;23.2.4 Orders of the Council of Ministers No. 7.3/85 and 28/86 concerning theProtection of Local Industrial Products and concerning the Protection of LocalIndustry respectively;23.2.5 Article 33 of Labour Law No. 38/64 and Order No. 104 of 1994 (Ministry ofSocial Affairs and Labour) regarding working hours and overtime of thepersonnel employed by the Contractor; and23.2.6 Law No. 45/1978 concerning the protection of environment.

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 13 of 2323.3 The Contractor shall comply with the Kuwait import and customs rules andregulations applicable to the shipment and import of goods or any part thereof intoKuwait.23.4 The Contractor shall be responsible for all necessary documentation required for customsclearance and materials, equipment, construction equipment, spare parts, and the like.The Company shall issue the necessary certification required to assist the Contractor forcustoms clearance purposes.23.5 Import DutiesThe Contractor shall be responsible for and shall bear all costs of customs and importduties, port handling charges, transportation, delivery and the like of all materials andequipment to/from and at the Site.23.6 Declaration of CommissionsThe Contractor shall comply with Law No. 25/1996 relating to declaration ofcommissions in connection with State contracts, and, where such law is applicable orbecomes applicable to this Contract, the Contractor shall serve on the Superintendentwithin the time limit specified by such law a declaration in the form set out in therelevant appendix.23.7 Kuwaiti AgentThe Contractor shall where required by the law appoint a Kuwaiti agent in Kuwait inrespect of this Contract, and, within thirty days of the date of this Contract, shall providethe following details of its Kuwait agent so appointed:(a)(b)(c)(d)name;address in Kuwait;address of main place of business or office in Kuwait (if different from (b)above); andletter from agent on agent's letterhead confirming appointment.24. LOCALLY MANUFACTURED MATERIALSThe Contractor supplied materials shall, wherever possible, be of Kuwaiti manufacturesubject to such materials conforming to the relevant Kuwait standard specificationnormally acceptable to the Company.25. TRANSPORTATION AND CARRIAGE PRIORITIES25.1 The Contractor shall use Kuwait Airways Corporation (herein “KAC”) or theMay 2001

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 14 of 23respective national airline of the country of such employees, agents or representativesor the country exporting the goods in the event air travel of Contractor’s employees,agents and representatives, or air freight of goods, is required or becomes necessaryfor the performance of the Contractor’s obligations under the Contract. Where flightsof either KAC or the national airline are not available or fully booked, the Contractorshall cause carriage arrangements to be undertaken and documented by KAC.25.2 The Contractor shall cause the sea carriage of any materials or equipment required forthe Services to be undertaken by the Kuwait Oil Tanker Company or by the UnitedArab Shipping Company if the ships of either company are available at the exportingport, provided that the freight rates offered by these companies are competitive withthose offered by others for the carriage of similar goods to Kuwait and that carriageby the said companies will not result in a delay to the progress of the Services.26. CONTRACTOR'S MATERIAL AND EQUIPMENTThe Contractor shall provide its personnel with the necessary hardware and softwarecompatible with the Company’s hardware and software to enable them to properlyexecute the Services and with adequate tools and test equipment to diagnose, repair andsupport the System.27. DATE FOR COMMENCEMENTThe Contractor shall commence the Services on the Date for Commencement specified inthe written order from the Superintendent to commence and shall proceed to execute theServices in accordance with the Contract.28. WORKING HOURS28.1 The Contractor shall execute Services of Stage 1 during Company working hours thatare from 0700 hours to 1500 hours from Saturday to Thursday except:a) during Ramadhan when the office hours shall be from 0830 hours to 1430hours Saturday through Thursday; andb) on Company holidays as may be declared from time to time.28.2 If during Stage 1, the progress of the Services is slow in the reasonable opinion of theSuperintendent, the Superintendent may instruct the Contractor to work hours inexcess of Company working hours and the Contractor shall comply with suchinstructions at its cost.29. PROGRAMME OF WORK AND REPORTINGMay 2001

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 15 of 2329.1 The Contractor shall, within a period not exceeding seven (7) calendar days from theDate for Commencement, submit to the Superintendent for approval a fully detailedprogramme of work based upon the preliminary work programme submitted with itstender. The detailed programme may be in the form of a bar chart detailing thesequence, duration and phasing of the various stages of the Services and the mannerin which these shall be executed. The detailed programme once approved shall not beamended without the prior written approval of the Superintendent.29.2 The Contractor shall report the actual progress of the Services by reference to theProgramme. The format of progress reports and their frequency shall be agreed withthe Superintendent. Generally the report shall include:a) details of manpower and equipment used;b) schedule of milestones and percentage completion of each activity;c) summary of achievements for the reporting period and planned activities forthe next reporting period; andd) issues that have caused or may cause delays and the proposed measures takenby the Contractor to mitigate the delay and regain the schedule.29.3 If the Contractor fails to comply with this clause, the Company shall be entitled towithhold payment of the Contract Price and any certified portion thereof.30. MANUALS AND DOCUMENTATION30.1 Before issuing the System Installation Certificate, the Contractor shall provide theCompany with three (3) full sets of all relevant documents necessary for the operationsuch as operation manuals, reference manuals, service manuals and technicalspecification.30.2 The Contractor shall regularly inform the Company of new releases, updates orupgrades of the software and shall install such new releases, updates or upgrades.The Contractor shall deliver to the Company all media and documentation of suchreleases, updates or upgrades.30.3 The Contractor shall deliver to the Company all relevant technical news bulletins asand when published.31. ACCEPTANCE CRITERIA31.1 Within fifteen (15) days from the Date for Commencement, the Contractor shallsubmit for the approval of the Company, detailed programme of testing proceduresand acceptance criteria based on the hardware and software manufacturer’sspecification and the Technical Specification detailed in the relevant appendix.Failure to do so shall entitle the Company to withhold payment of the Contract PriceMay 2001

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 16 of 23and any certified portions thereof.31.2 When the System is ready for testing, the Contractor shall demonstrate that theSystem operates in accordance with the Acceptance Criteria.32. VARIATION32.1 The Superintendent may make any Variation to the Services or any part of it that may,in his opinion, be necessary and may instruct the Contractor to do any of thefollowing:May 200132.1.1 increase or decrease the quantity of any work included in the Contract withinsuch limits as may be defined by the Company;32.1.2 omit any such work; and32.1.3 execute additional work of any kind necessary for the completion of the Services.32.2 Adjustment OrderThe Contractor, subject only to the terms of clause 32.3, shall not execute a Variationwithout an Adjustment Order signed by both parties which shall specify the effect (ifany) on the Contract Price and Programme. An Adjustment Order shall in no wayaffect the rights or obligations of the parties hereto except as expressly provided. Allprovisions of the Contract shall apply to Variations.32.3 Written Order32.4 RatesIn the event that any Variation is urgent and the performance of the Services cannot,in the sole opinion of the Superintendent, proceed unimpeded due to time involved inprocessing an Adjustment Order, the Variation may be carried out by the Contractorafter receiving an order in writing from the Superintendent specifying the effectthereof (if any) on the Contract Price The parties, as soon as practicable thereafter,shall sign an Adjustment Order. Variation carried out by the Contractor other than inaccordance with this clause shall be to the Contractor’s account.Each Variation shall be valued at the rates set out in the Contract if applicable. If theContract does not contain any rates applicable to a Variation then the Superintendentand the Contractor shall agree reasonable rates (having regard to commercial marketrates).32.5 The Contractor shall be entitled to an extension of time to any of the stages of theContract Period due to any delay caused by a Variation, except where the Variationwas necessary due to any act or omission on the part of the Contractor.

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 17 of 2333. RECORDS33.1 The Contractor shall maintain, and shall ensure its Subcontractors maintain, in accordancewith generally accepted good accounting principles and practices time sheets, books,records and proper accounts pertaining to the performance of the Services andparticularly in respect of invoices of its reimbursable expenditure and fees and any otherreimbursements payable to others engaged by the Contractor under this Contract, whichshall include the Contractor’s and Subcontractors personnel records, correspondence,plans, instructions, drawings, receipts, vouchers, memoranda, tapes, data, informationstored by computer and other devices and such other documentation and related systemof controls necessary to allow the Company to conduct a comprehensive audit to verifythe cost of the Services and the Contractor’s compliance with the Contract.33.2 The Contractor and its Subcontractor shall preserve the documents and information referredto in clause 33.1 during the performance of the Services and for a further period of notless than five (5) years after termination of the Contract or completion of the Services.33.3 The Company and/or its authorised representative shall, at all times, have access to andbe permitted to examine and make copies of all documents and data referred to inclause 33.1 and shall be authorised to interview Contractor’s and subcontractorspersonnel as the Company may deem necessary to audit and verify the cost of theServices and the Contractor’s compliance with the Contract.34. METHOD OF PAYMENT34.1 PaymentMay 2001In consideration of the satisfactory execution of the Services, the Company shall pay theContractor the Contract Price based on the rates and terms stated in the ContractSpecification and the relevant appendices.34.2 The Contractor shall submit its invoices to the Company’s Financial AccountsDepartment claiming payment for the Services executed according the aboveschedule.34.3 MethodThe Company shall make payment, as certified, within one month from receipt of theContractor’s invoice to a bank account nominated by the Contractor.34.4 Effect of Payment of Contract PriceThe Contractor acknowledges that any payment, in part or in total, of the Contract Pricedoes not constitute an acceptance by the Company of the Services and does not amountto waiver of any right or action which the Company may have at any time against the

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 18 of 23Contractor.34.5 Adjustment of the Contract PriceThe Company may adjust the Contract Price pursuant to the provisions of this Contract,including by way of deduction from the Contract Price, all extra costs or damagesincurred by the Company, resulting from any error or deficiency in the Services, and anyshortfall shall be a debt owing to the Company by the Contractor.35. NOT-TO-EXCEED VALUE35.1 The Not-to-Exceed Value is the total cumulative expenditure under the Contract notexceeding the sum stated in the Contract Specification.35.2 The Contractor shall inform the Superintendent immediately it reasonably considers thatthe actual cost of the Services is likely to exceed the Not-To-Exceed Value and shall, ifinstructed by the Superintendent, recommend methods to reduce or hold costs within theNot-To-Exceed Value.35.3 The Contractor acknowledges that it has a duty of care to take all reasonable steps toensure that the cost of the Services does not exceed the Not-To-Exceed Value.35.4 The Superintendent may adjust (increase or decrease) the Not-To-Exceed Value byissuing an Adjustment Order.35.5 The Not-To-Exceed Value shall not be construed as commitment or a guarantee by theCompany to request Services from the Contractor that would incur expenditure up to theNot-To-Exceed Value.36. INTELLECTUAL PROPERTY RIGHTS36.1 The Contractor shall indemnify, defend and save harmless the Company from andagainst all liability, claims, suits, actions, losses, costs, damages and expenses broughtagainst the Company or incurred by the Company as a result of or in connection withany claims or actions based upon infringement or alleged infringement of any patentand arising out of the engineering, design, equipment, materials, processes or Systemfurnished by the Contractor or used in the performance of the Services.36.2 The Contractor shall not make any admission of liability without first informing theCompany.36.3 The Contractor, in order to avoid any claim or actions, may substitute at its expenseby non infringing equipment, materials, processes or System or modify at its expensesuch infringing design, equipment, materials, processes and System so that theybecome non infringing, provided that such substituted and modified design,May 2001

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 19 of 23equipment, materials, processes and System meet all the requirements of the Contractand are approved by the Company.36.4 The provisions of this clause 36 shall survive termination or expiry of the Contract.37. CONFIDENTIALITY37.1 The Contractor shall hold in confidence and not divulge to third parties or use in any waywhatever except, with the prior written approval of the Company, any informationdisclosed, directly or indirectly, to the Contractor by the Company in regard to theServices, or which is provided by the Company, or is prepared for the Company by theContractor, so long as and to the extent that such information is not in the public domain.37.2 The Contractor, under the same secrecy conditions required of the Contractor underclause 37.1, may disclose to subcontractors and vendors information to be held inconfidence, if necessary for the prosecution of the Services.37.3 The Contractor shall not make any announcement or release any informationconcerning the Contract or the Services to any member of the public or the media orany third party unless prior written consent is obtained from the Company.37.4 The provisions of this clause 37 shall survive termination or expiry of the Contract.38. OPTIONAL TERMINATION38.1 Right to TerminateMay 2001The Company may terminate this Contract in whole or part at any time by giving theContractor a written order of termination without assigning any reason therefor. Suchorder shall specify the effective date of such termination should this date be differentfrom date of that order. In this event the Company's sole liability to the Contractorshall be, unless otherwise specifically provided in this Contract, to pay the Contractorpro rata for the Services performed, that has been earned by the Contractor andassessed by the Superintendent at the date of termination less all sums already paid bythe Company, provided that such termination is not occasioned by any breach ordefault on the part of the Contractor.38.2 LossesThe Company shall not be liable to the Contractor for any consequential losses, damages,loss of anticipated profit or revenue, loss of goodwill, loss of business opportunity or lossof property, whether the same may have been caused even if it has been advised of theirpossible existence.38.3 Deliverables

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 20 of 23The Contractor shall upon such termination and to the extent required by theCompany execute and deliver to the Company all documents, reports, Systemmanuals, procedures, computer programs, and any and all documents related to theServices that were originally developed for the Company whether or not these werecompleted or in the course of preparation.39. REMEDIES AND POWERS39.1 The Contractor, where it fails to commission the System within the time stated in theContract Specification, or as extended pursuant to the Contract, shall pay to theCompany the amount of the liquidated damages referred to in the ContractSpecification for each day of delay until the issue of the System InstallationCertificate.39.2 Where the Contractor does not remedy any fault in the System within the AllowableDowntime referred to in the Contract Specification, the Company may without furthernotice or judicial proceedings deduct from monies due to the Contractor the amountof the liquidated damages referred to in the Contract Specification until such time asthe Contractor has remedied the fault.39.3 Where the Company notifies the Contractor of any defect, deficiency, fault or error in theSystem which is the responsibility of the Contractor, the Contractor shall at no extra costto the Company forthwith rectify the fault, or at the Company’s option shall reimbursethe cost of such rectification to the Company.39.4 If the Contractor is in breach of its obligations, then the Company may give theContractor notice in writing specifying the breach and the time within which to remedythe breach. If the Contractor fails to remedy the breach within the period stated in thenotice, then the Company may without further notice or judicial proceedings and withoutprejudice to any other rights and remedies the Company may have under the law or theContract either:a) reduce, if applicable, by up to 10% the Contract rates for the Services renderedduring the period of breach; orb) summarily terminate the Contract.39.5 Any amounts due to the Company from the Contractor, including overpayments,liquidated or other damages and expenses incurred by the Company and the like, shall berecoverable without notice or judicial proceedings by deductions from any moneys dueor becoming due to the Contractor under this or any other Contract with the Company.May 2001

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 21 of 2340. FORCE MAJEURE40.1 Force Majeure shall be any event or occurrence starting after the date of this Contract,whatever the origin, which cannot be foreseen and is beyond the control of, andcannot be circumvented by, the party affected, and which renders the performance ofthe obligation impossible. Force Majeure shall exclude, amongst others, inclementweather, congestion of orders at a manufacturer's plant, an oversold condition of themarket, lack of manpower, lack of material, inefficiencies of the Contractor, itsVendors or Subcontractors of any tier, or similar occurrences.40.2 Neither party shall be considered in default of its obligations hereunder if theperformance of these obligations is delayed, hindered or prevented by Force Majeureprovided that within seven (7) days after the start of an event or occurrence claimed asForce Majeure the party affected by Force Majeure gives the other party written notice ofsuch event or occurrence and that immediate steps are taken by the affected party tomitigate where possible the effects of the event or occurrence.40.3 Should the Contractor be delayed in execution of the Services by an occurrence itbelieves to be Force Majeure and the Contractor cannot avoid or prevent the saiddelay by any means whatever and provided the Contractor has given notice to theCompany as specified in clause 40.2.40.4 Notwithstanding any provision herein to the contrary, the Contractor shall not be entitledto any additional costs of whatever nature under this clause 40.41. CONTINUANCE OF THE SERVICESThe Contractor at all times, notwithstanding any disagreement, dispute, protest or courtproceedings, relating directly or indirectly to the Services, shall proceed with the Servicesin accordance with the determinations, instructions and clarifications of the Company. Ifthe Contractor fails to proceed with the Services, it shall be considered to be in default.During the period Contractor is proceeding with the Services it shall be paid theundisputed portion of any claim or payments due under the Contract as the case may be.42. TIME LIMITATION ON CLAIMS BY THE CONTRACTORIt shall be a condition precedent to any claim made by the Contractor arising out of thisContract that such claim is made in writing not more than thirty (30) days after the eventgiving rise to such claim.43. DISCLAIMER AND CLOSURE OF ACCOUNTSMay 2001On expiry of the Contract and prior to release of the last payment under the Contract theContractor shall sign a disclaimer and closure of account statement worded in accordance

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 22 of 23with the attached specimen to the effect that all payments under the Contract have beenreceived with exception of the 5% deductions. On receipt of these deductions by theContractor the Contract shall be closed and shall be deemed to be fully settled.44. SEVERABILITYIf any provision of this Contract is or becomes invalid, illegal, inoperative orunenforceable, the legality, validity and unenforceability of the remaining provisionsshall not in any way be affected or impaired thereby.45. PERFORMANCE BOND45.1 The Company, if it considers the Contractor in default or in order to recover monies dueto it, may at any time without prior notice to the Contractor draw on all or part of thePerformance Bond.45.2 The Contractor shall keep the Performance Bond in its full value in the event ofwithdrawal thereon and at the Company’s direction increase the value of thePerformance Bond proportionally with any increase in the Contract Price resultingfrom any Adjustment Order.45.3 The Contractor shall extend the validity of the Performance Bond until the issue of theFinal Acceptance Certificate.46. NOTICES46.1 Any notice required to be given pursuant to this Contract shall be considered dulygiven if in writing and delivered by hand, or if sent by sent by registered mailacknowledgment due to the Contractor or the Company at their respective addressesstated in the Contract Specification. Notices may also be given by telex or faxprovided that confirmation of such notice given is received within fifteen (15) days ofthe date of the notice.46.2 The service of notice on the Superintendent and the Contractor’s representative as the casemay be shall be proper service of notice on either parties.47. GOVERNING LAWMay 2001The Contract shall be deemed to have been signed in Kuwait. It shall be construedand have effect in all respects in accordance with the laws of the State of Kuwait andboth the Company and the Contractor agree and accept that the Courts of Kuwait shallhave exclusive jurisdiction to decide all disputes between the parties. All reports andcorrespondence related to this Contract shall be in English.

GENERAL CONDITIONS FOR INFORMATION TECHNOLOGY CONTRACTS (2001)Page 23 of 23_________________________________May 2001