a p 1ST FEBRUARY 1984

CONDITIONS OF CONTRACT PM02 REV 6

1. PURPOSE

This document defines the Employer's contract requirement for Contractors for
Mechanical, Electrical and Instrument Erection Work.

2. CONDITIONS OF CONTRACT

2.1 The General Conditions of Contract which shall be used to govern the Contract
except to the extent that they are consistent with the provisions hereof shall be the
latest issues of the following:

2.1.1 For all Contracts within the United Kingdom, the General Conditions of Contract for
Works of Civil Engineering Construction issued by the Institution of Civil Engineers.

2.1.2 For all Contracts outside the United Kingdom, the Conditions of Contract
(International) for Works of Civil Engineering Construction, issued by the F.I.D.I.C.

3. PRECEDENCE OF CONTRACT DOCUMENTS

The following shall be the order of precedence of the Contract Documents:

3.1 The Purchase Order.

3.2 The latest revision of all Contract Drawings.

3.3 Air Products Special Conditions of Contract.

3.4 Air Products Conditions of Contract PM02.

3.5 General Conditions of Contract.

4. DEFINITIONS

In this document:

4.1 'Employer' means Air Products Limited or Air Products (GB) Limited or Air Products
(UK) Limited or such other person as may be defined in the Purchase Order.

4.2 'Contractor' means the person to whom the order is addressed.

4.3 'Contract' means the contract between the Employer and the Contractor for the
Works.

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4.4 'Engineer' means Air Products.

4.5 'Engineer's Representative' means the employee of the Engineer whose name shall
have been notified as such to the Contractor.

4.6 'Works' means the subject matter of the Purchase Order.

4.7 'Conditions' means the conditions specified in Clause 2 above.

4.8 'Contract Price' means the Lump Sum price specified in the Contract.

4.9 'Approved' means approved by the Engineer.

4.10 'Specialist' means any other Contractor engaged on the site who has been appointed
by the Engineer.

4.11 'Date of Contract' means the date of the Engineer's written instructions to proceed.

5. CONTRACT PRICES

5.1 The Lump Sum price shall include for all 'holds' shown on the drawings.

5.2 The Schedule of Rates and the Day-work Rates shall be fixed.

6. DRAWINGS

6.1 The Contractor shall check all relevant drawings and report any errors to the
Engineer's Representative before he starts work.

6.2 The Contractor shall supply one set of approved prints, legibly marked, of all 'as-
built' drawings, within one month of the date of the Certificate of Final Completion.

6.3 All drawings furnished by the Engineer to the Contractor are the property of the
Engineer and shall be returned on demand. Drawings shall not be copied without the
consent of the Engineer. The drawings and all information shown thereon shall be
kept confidential.

6.4 Process piping dimensions on isometric sheets are based on geometric calculations.
No allowance has been made for fabrication and erection tolerance; any subsequent
alterations necessary as a result of the Contractor's failure to take account of such
tolerance shall be at the Contractor's cost.

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6.5 The drawings listed as Contract Drawings in the Drawing List of the Scope of Work
shall define the work to be carried out by the Contractor. Where the Contractor is
required to supply material against a Unit Quantity Sheet, he shall check the
quantities required against the drawings. In all cases the Contract Drawings take
precedence.

6.6 Cable lengths stated in the cable schedule are approximate only; it is the
responsibility of the Contractor to measure individual route lengths on site before
cutting any length of cable from a drum.

7. SITE VISIT

The Tenderer will inspect the site prior to submitting his Tender (See Clause 3 of
Instructions to Tenderers), and shall be deemed to tender with full knowledge of site
conditions.

8. PROGRAMME

8.1 The Contractor shall issue within two weeks of the date of the Contract three copies
of a detailed Construction Programme (based on the Engineer's outline programme of
dates included in the Scope of Work) to the Engineer's Manager of Construction at
Hersham and one copy to the Engineer's Representative on site. The Programme will
be subject to review and agreement.

8.2 During the currency of the contract the Engineer may require that certain activities be
re-scheduled, within the overall programme duration, contrary to the agreed
Construction Programme.

This flexibility is for the purpose of accommodating changes requested by the

Engineer and those caused by inclement weather and in no way releases the
Contractor from his obligation to perform against the agreed Construction
Programme.

The Contractor shall accommodate within the Construction Programme a reasonable

degree of change to start and finish dates of the various activities, if requested by the
Engineer. No claims will be valid under the Contract for any additional costs to
which the Contractor may be subjected arising from the consequences of these
changes or their disruptive effect.

8.3 The Construction Programme shall show the expected number of the difference
classes of labour required for each week of the Contract period, and the plant and
equipment to be employed. The Construction Programme shall indicate the
percentage value of each item of work or activity.

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8.4 Where the Construction Programme depends on the delivery of equipment or

materials by the Engineer the Contractor shall allow in his planning for a variation of
up to three weeks in the date given for the delivery of such equipment or materials.

8.5 The Contractor shall state details of his working week, in particular the number of
hours worked per day and the number of days worked per week, and hence the
number of hours worked in a week. In no way will this limit the number of hours
which the Engineer may require the Contractor to work in order to maintain the
Programme.

The Contractor shall state all Public Holidays he will observe during the course of the
Contract and allow for any disruptive effects caused by annual/Public Holidays.

8.6 The Works shall be carried out uninterruptedly using sufficient means and a sufficient
labour force to ensure, without any doubt whatsoever, that the Programme which was
approved in accordance with Clause 8.1 is followed. This Programme constitutes an
integral part of the Contract, and the dates indicated in the Programme fix the date by
which the Works must be substantially complete.

8.7 The agreed Programme shall be reviewed weekly. It shall be reviewed immediately
any delays in the delivery of equipment or materials occur or if the rates of progress
falls behind that which has been agreed.

8.8 The Contractor undertakes not to transfer labour from Air Products site to another job
without Air Products' prior approval; such approval will not be unreasonably withheld
if the Contract is ahead of Programme.

9. REPORTING

9.1 The Contractor shall issue a report at the end of each week which shall show the
progress to date against the approved Construction Programme, and the percentage
completion of each activity. One copy shall be given to the Engineer's Representative
at site and one copy to the Engineer's Manager of Construction at Hersham.

9.2 The Contractor shall deliver to the Engineer's Representative at the end of each week
during the currency of the Contract a signed report showing the numbers of the
different classes of labour actually employed on the work during that week together
with the number of hours worked, and the plant and equipment employed. One copy
of this report shall be given to the Engineer's Manager of Construction. The
Contractor shall also give to the Engineer's Representative a return at the start of each
day showing the number of men on site on that day.

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9.3 The Contractor shall deliver to the Engineer's Representative at site two copies of
orders placed by the Contractor for materials for use on the Works together with the
latest delivery information.

9.4 Such site meetings shall be held as the Engineer may require at which such
Representatives of the Contractor shall be present at the Engineer may direct.

9.5 If the Contractor fails to furnish the Construction Programme or the reports, the
Engineer shall be entitled to decide that the Contractor is not prosecuting the work
with such diligence as will assure completion within the time specified and shall have
the rights described in the appropriate Clause of the Conditions.

10. EXTENSIONS OF TIME FOR COMPLETION

10.1 The scheduled dates of arrival of equipment on site listed in the Scope of Work are
given in good faith. However, the Contractor shall allow for variations of up to three
weeks on either side of the stated scheduled date, without the completion date for the
Works being affected.

If the variation from the scheduled date of arrival of any major item of equipment is
greater than three weeks, the Contractor shall review the Construction Programme
with the Engineer's Representative to ascertain the effect on the completion date of
the Works. The Contractor shall issue a revised programme in accordance with
Clause 8.1 within seven days of notification of the variation in delivery date.

10.2 Should, for any reason, the Contractor wish to claim extended time, he shall notify
the Manager of Purchasing, PSD-E, Air Products Limited, Hersham, Surrey, in
writing, within seven days of the circumstances arising under which he is claiming
and at the same time he shall inform the Engineer's Representative at the site. Unless
such notice is given no claim can be considered.

10.3 Where the duration of the Contract is extended for reasons solely due to the default of
the Engineer, the Contractor may claim extended site establishment charges in
accordance with item 5 (page 6) of the Form of Tender, but not in respect of any
period during which the Contractor is himself in default or unable to perform.

Where the duration of the Contract is extended for reasons which are not wholly and
solely attributable to the Engineer, the Contractor may not claim for any extended site
establishment charges whosoever.

No other claims will be valid under the Contract for any additional costs to which the
Contractor may be subjected arising from the consequences of any extension of time
for completion.

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10.4 The Construction Programme shall include due allowances of time and resources to
overcome the effects of inclement weather. These allowances shall be based on the
average weather conditions for the locality over the previous 20 years for the
corresponding period of the Contract.

No claim for an extension of time for completion based on adverse weather

conditions will be valid under the Contract unless it can be clearly demonstrated that
the conditions experienced were at least 10% worse than could have been expected
from historical records.

Should an extension of time for completion be granted due to exceptional adverse

weather conditions, any additional costs to which the Contractor may be subjected
arising from the consequences of an extension of time shall be borne by the
Contractor.

11. VARIATIONS TO THE WORK

11. The Works may be increased, or decreased from the Scope of Work defined in the
Contract. The Engineer and the Contractor shall discuss the consequences of such
increases or decreases so that the dates in the approved Construction Programme may
be modified as little as possible.

11.2 Labour costs in respect of extra work up to 15% of the original lump sum price shall
be accommodated without any extension to the Contract duration.

11.3 Any extra costs arising from disruption, non-productive or inefficient working, or
from any other reason shall be agreed at the same time as the instruction is given to
carry out such extra work. No claim shall be valid for such costs at a later date.

11.4 No variations to the Works shall be carried out unless such variations have been
authorised in writing. Authority will be given in one of two ways:

11.4.1 By Construction Change Order (Form F.280). Such Construction Change Orders will
be issued by the Engineer's Representative, and will be limited to the value stated in
the Purchase Order.

11.4.2 By an Amendment to the Purchase Order issued by the Engineer's Purchasing

Department, in Hersham. Authority may be given in the first instance by letter or
telex but in all cases will be confirmed by an Amendment to the Purchase Order.

11.5 If during the execution of the Contract any extra work shall be ordered by
Construction Change Order, such work may be carried out under either the Daywork
Schedule or from the Schedule of Rates forming part of the Contract, or at an agreed
fixed lump sum. The method used in pricing the change will be at the discretion of
the Engineer's Representative and will be shown on the Construction Change Order.
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If the work is carried out on a day-work basis the day-work sheets shall be submitted
by the Contractor daily to the Engineer's Representative for signature. Fully costed
day-work sheets shall be submitted weekly for the approval of the Engineer's
Representative.

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11.6 Where the Contractor considers himself entitled to payment for extra or additional
work, other than as specified in Clauses 11.4.1 and 11.4.2 he shall notify the Manager
of Purchasing, PSD-E, Air Products Limited, Hersham, Surrey, in writing within
seven days of the date such work commenced (see also Clause 28).

12. ATTENDANCE OF SPECIALISTS

12.1 The Contractor shall allow to the Specialists access to the site and place of work, the
use of standing scaffolding, electrical distribution boards, plant lighting, water,
necessary working space, space for office and workshop accommodation, space for
storage of plant and materials and shall provide all information and assistance
necessary for them properly to carry out their work.

12.2 The Contractor shall attend on the Specialists if and as directed by the Engineer's
Representative and the Contractor shall be reimbursed on a daywork basis for such
attendance. No costs will be reimbursed to the Contractor for attendance on
Specialists unless written instructions are issued by the Engineer's Representative
prior to such attendance.

12.3 The Contractor shall not be reimbursed for attendance on Specialists where such
attendance is included within the Scope of Work.

12.4 The Contractor shall be deemed to be experienced in executing contracts where other
Specialist Contractors are working concurrently on the site.

During occupation of areas allocated to Specialists appointed by the Engineer, the

Contractor shall expect, and allow within the Lump Sum Price and the Construction
Programme, interference caused by their presence.

13. SAFETY

13.1 The Contractor shall observe all the requirements of the Engineer's Booklet entitled
'Safety Rules for Contractors'.

13.2 The Contractor shall report to the Engineer's Representative and the Manager of any
existing plant on which work is being carried out, and obtain all necessary Safety
Work Permits and instructions before commencing any work. Work is not permitted
in areas other than that stated in the Contract or in any manner other than that laid
down in such Permits.

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13.3 The Contractor shall observe all National and Local Laws and Statutory Regulations
concerning Safety and Working conditions. He shall be responsible for maintaining
any site records necessary.

13.4 Upon mechanical completion of the major part of the plant, and when Process Start-
up commences, the Contractor shall be subject to Air Products' Safety Procedures.
He shall observe and carry out the Air Products Safety Work Permit systems and tag-
out procedures.

14. PACKAGING

14.1 The Contractor shall label and return all returnable packaging as directed by the
Engineer's Representative. The cost of carriage for returning packaging will be paid
by the Engineer. The Contractor shall indemnify the Engineer against all costs
incurred by the Engineer as a result of loss or damage to such packaging because of
the Contractor's act or omission.

15. ENGINEER'S MATERIALS

15.1 The Contractor shall accept delivery at site of any material to be supplied by the
Engineer for the Works, offload it, pay any demurrage if he is not able to take
immediate delivery, store it until it is ready to be used and distribute the material
within the Site.

15.2 The Contractor shall inspect such material immediately upon delivery, shall make a
receiving report and shall inform the Engineer's Representative of any loss of, or
damage to the material within 24 hours of delivery.

15.3 If any material is coated with preservative, the preservative shall be left on until the
material is ready to be used, when the Contractor shall remove it.

15.4 The Stores Organisation shall be the responsibility of the Contractor. Adequate
storage shall be provided by the Contractor to ensure the security, protection and
preservation of all free-issue material delivered to site. The Contractor shall ensure
that adequate records are kept of all receipt and issues. He shall also ensure that the
stores organisation is flexible, such that material is readily available to accommodate
any variations to the Programme.

15.5 On arrival on site at commencement of the Contract, the Contractor shall take charge
of all materials for the Works already on site. He shall inform the Engineer's
Representative of any deficiencies against the records of receipt of goods which
arrive prior to commencement of the Contract.

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16. SURPLUS AND/OR SCRAP MATERIAL

All surplus and/or scrap material will be collected and safely stored by the Contractor.
A cumulative list of all such materials will be issued weekly by the Contractor
(including 'nil' return) to the Engineer's Representative. All materials shall be
returned on demand to the Engineer but not later than on completion of the Works.
The Contractor shall indemnify the Engineer for any loss suffered by the Engineer as
a result of any such materials being removed or lost from the site.

17. FIRE PROTECTION

The Contractor shall have available on the job site and in working order all fire
protection equipment required by normal good construction practice and by local fire
regulations. This shall include but is not limited to a supply of foam, soda acid and
carbon dioxide fire extinguishers, of a type appropriate to the work being carried out.

18. CONNECTIONS TO EXISTING SERVICES

The Contractor shall, before connecting to any existing services, give 14 days' notice
of his intention to the Engineer's Representative and such notice as the Authority
responsible for the service may require.

19. TEMPORARY ROADS, BUILDINGS AND FACILITIES

19.1 The Engineer shall specify the areas of the site which can be used for the Contractor's
temporary storage huts, site offices, storage of goods and materials, major plant and
general working space.

19.2 Temporary buildings required for the protection of stored materials shall be built with
labour and materials furnished by the Contractor.

19.3 The Contractor shall provide a telephone for his own use and that of his Sub-
contractors and pay all charges in connection therewith.

19.4 The Contractor shall provide temporary toilets for his own use and that of his Sub-
contractors and shall keep them in a sanitary state.

19.5 The Contractor shall provide and maintain electric service for construction purposes,
lighting for temporary buildings and security. Such services shall be furnished by
portable generators having sufficient capacity or from other sources and the
Contractor shall pay all charges in connection therewith. All temporary lines,
equipment and materials shall be installed, connected and maintained by the
Contractor in a safe workmanlike manner. These facilities shall be removed by the
Contractor upon completion of the Works.

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19.6 The Contractor shall provide and maintain an adequate supply of water for
construction purposes and domestic consumption and pay all charges in connection
therewith. He shall furnish all necessary equipment, materials and facilities for
conveying water. Water used for human consumption shall be kept free from
contamination and shall conform to the requirements for potable water established by
the Local Authorities.

19.7 The Contractor shall provide and maintain all necessary temporary buildings for his
use.

19.8 The Contractor shall provide and maintain at his expense an additional temporary
lock-up Suite of Offices for the exclusive use of the Engineer as specified in the
Scope of Work.

20. APPROVAL OF SUBSTITUTES

Applications by the Contractor to substitute other material for items specified in the
Contract shall contain complete data about the substitute proposed. When a substitute
has been approved by the Engineer, the Contractor shall pay for any consequential
modifications to the Works. Such approval shall not in any way diminish the
Contractor's responsibility for ensuring the suitability of the material for the purpose
specified.

21. APPLICABLE CODES

Reference in the Contract to standard codes or specifications shall mean reference to

the current edition, or revision, of such code or specification.

22. PUBLICITY

The Contractor shall not permit any information about, or drawings or photographs of
the Works to appear without the Engineer's written approval.

23. THE RESPONSIBILITIES OF THE CONTRACTOR

23.1 The Contractor is responsible for all the consequences of his deficient or bad
execution of the Works.

23.2 If any damage due to such cause is ascertained before the final settlement for the
Works, the Engineer shall have the right to suspend payment of the outstanding sums
owing to the Contractor, within the limits of the sustained damage.

23.3 This responsibility of the Contractor does not cease until the completion of the
Maintenance Period.

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24. COMMUNICATIONS

24.1 The Contractor shall provide a full-time English speaking Site Superintendent, or
Representative, on the site throughout the course of the Contract.

24.2 All communications between the Contractor and the Engineer shall be in English.

24.3 All communication will be with the Engineer unless stated otherwise in the Contract.

25. HOUSEKEEPING

25.1 During the execution of the Works, the Contractor shall maintain the whole of the
construction site in a clean, tidy and orderly condition on a continuous daily basis.
This requirement shall apply to temporary buildings, indoor and outdoor storage,
construction equipment, plant and materials, grounds and roadways, as well as the
facility to be constructed and the equipment to be erected. All rubbish is to be
regularly removed from the site.

25.2 The Engineer will advise the Contractor via the Engineer's Representative if he
considers that the requirements under this clause are not being fulfilled. Three days
will be allowed for the Contractor to take remedial action. If no action is taken by the
Contractor the Engineer retains the right to implement such action as is necessary at
the Contractor's expense.

25.3 Upon completion of the Works, the Contractor shall remove all temporary facilities
erected by him and his Sub-contractors, construction equipment, surplus materials
and supplies belonging to the Contractor and his Sub-contractors and shall leave the
site in perfect order, clean and ready for use, to the satisfaction of the Engineer.

26. LAW

The Contract and matters appertaining thereto shall be governed by the laws of
England unless expressly stated in the Contract.

27. CANCELLATION

27.1 The Engineer may cancel the Contract and require the Contractor to cease work upon
the whole or any part of the Works by giving written notice to that effect.

27.2 Except where such cancellation is caused by the Contractor's failure to perform any
essential terms or any condition of the Contract, such cancellation shall be upon the
following terms:

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27.2.1 If any orders have been placed by the Contractor, the Engineer may elect either to
take an assignment of the rights and obligations under such orders, or pay the cost of
discharging such obligations.

27.2.2 The Engineer may elect either to require the Contractor to complete the part of the
Works which he has commenced, and pay part of the Contract Price or to require the
Contractor not to complete the Works and take delivery and pay a proportion of the
Contract Price in respect of the state of completion.

27.3 Nothing in the Contract shall limit or exclude the Engineer's right to cancel the
Contract or any part thereof if the Contractor fails to observe or perform any of his
essential terms or conditions and in such event the Engineer may procure the
materials and/or services from another source and require the former Contractor to
pay any excess costs thereby incurred.

28. CLAIMS

Any claims on the Engineer by the Contractor for increases in the Contract price to
cover alleged losses on the part of the Contractor for reasons other than those
specified herein cannot be considered by the Engineer unless:

a) The loss is due to the Engineer's default.

b) The Engineer's Manager of Purchasing referred to in Clause 11.4 is informed

in writing of the default within seven days from the time of its occurrence.

c) Details of the claim and substantiation thereof is received by the Engineer's

Manager of Purchasing within 30 days of the default.

29. INDUSTRIAL RELATIONS

The Contractor will notify the Engineer immediately by Telex/telephone with

immediate written confirmation in the event of any trade dispute arising on the site.

This notification must include the reason for the dispute and the steps being taken to
resolve it.

The Contractor will keep the Engineer fully informed daily by telex/telephone on the
progress of the dispute.

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30. PROGRESS PAYMENTS

The Contract Price shall be paid by Monthly Progress Payments which shall be based
on the percentage completed of the various parts of the Works as set forth in the Price
Breakdown on page 2 of the Form of Tender, and derived from the Construction
Programme as per Clause 8.3 herein, plus additional work incorporated into the
Contract by Amendments to the Purchase Order; less amounts previously paid.
Payment shall be made by the Engineer within 35 days of receipt in his Head Office
at Hersham, of the Contractor's invoice, which shall be accompanied by the Monthly
Progress Payment Certificate. Invoices must be strictly in accordance with the
appropriate Progress Payment Certificate. No Progress Payment shall be made in
respect of any materials which have been delivered to the site until they form part of
the Works.

31. RETENTION

Payment will be made less 5% retention. The retention shall be paid in full within 35
days of the date of receipt in the Engineer's Head Office at Hersham, of the
Contractor's final invoice, which shall be submitted on completion of the Works and
the "as-built" drawings and be accompanied by a copy of the final Monthly Progress
Payment Certificate.

32. PERIOD OF MAINTENANCE

The period of maintenance shall be 24 months after the issue of the Certificate of
Final Completion.

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