cdsz05001-cm-ha-001施工合同-附件4.doc

PAINTING WARRANTEE

Chengda Engineering Corporation of China (hereinafter referred to as the Guarantor) offers the purchaser Oiltanking Daya Bay Pte Ltd (hereinafter referred to as Owner) the following 10 years guarantee covering the performance of Coating System(s) supplied to Tankfarm at Daya Bay (hereinafter referred to as the Property).

1.01 The guarantee covers the provision of replacement coating materials and reimbursement of the cost of preparation and application to be borne by the Guarantor as may be necessary to repair, (in accordance with Section 6), defective coated areas in herein defined.

1.02 The guarantee shall commence on the date the property is delivered to Oiltanking Daya Bay Pte Ltd or on the date which the completed application is accepted, whichever shall first occur. The maximum between completed application and delivery to Owner is three months. The guarantee should then run either from the date of completed application or latest three months after this.

The guarantee period will terminate 10 years from the commencement date, but in the event of sale or transfer of the Property, or upon the Property ceasing to be operated by Owner prior to termination date, this guarantee shall terminate at the date of such sale or transfer.

The period of this guarantee shall not be extended in the event of coating repairs being carried out under the terms of this guarantee or otherwise.

1.03 The guarantee covers the repair of defective coated areas if exceeding 3% of the total coated surface/PER TANK, PIPE LINE AND STRUCTURES and falling within the scope of this agreement.

1.04 An area will be considered defective where the coating film is completely absent, or where pinholing. Porosity or loss of adhesion are encountered which have permitted visible corrosion activity to occur in a severity greater than “Re-3” (as defined in the “European Scale of Degree of Rusting for Anti-Corrosive Paints” of the European Committee of Paint and Printing Ink Manufacturers’ Associations).

Areas where the coating film exhibits fading, staining or discolourations, or loss of gloss, will not be considered defective areas as long as effective protection against corrosion has been provided.

2.00 No liability shall attach under this guarantee unless the following conditions are strictly complied with.

2.01 Any contractor to be entrusted with the application of the coating system must have been previously approved by the Guarantor.

2.02 All work connected with application of coating must be approved by the Guarantor.

2.03 Surface Preparation

All steel surfaces must be treated in line with the specification of the coating system.

Before starting the coating all previously blasted surfaces must be carefully cleaned and thereafter approved by the Guarantor and/or his designated representative.

2.04 Temperature and Humidity

Application must take place within the limits specified by the Guarantor/Manufacturer.

2.05 Thinners and Additives

Only thinners and additives supplied or specified by the Guarantor/Manufacturer are to be used and they are get to exceed the quantity recommended. Only solvents specified by the Guarantor/Manufacturer are to be used for cleaning equipment.

2.06 Coating application

a) The Guarantor/Manufacturer’s specified procedure of application must be strictly followed.

b) The Guarantor/Manufacturer’s specified minimum and maximum time intervals between applications must be strictly adhered to.

c) The Guarantor/Manufacturer’s specified film thickness must be adhered to.

d) Unless the Guarantor/Manufacturer agrees to the contrary, only coating batches for the specified job are to be used.

2.07 Surfaces and Coatings Damaged During Construction

All damaged surfaces and coatings are to be repaired by the Guarantor so that they are equal to the original standards.

2.08 The guarantee is contingent upon an APPROVED VENDOR coating inspector(s) providing continuous surveillance over the surface preparation, mixing of products application of coating, dry film thickness, etc., throughout the coating operation, areas not coated in conformance with Manufacturers quality standards are excluded from this guarantee.

Such areas are to be identified and documented by the Inspector(s) who will issue appropriate reports to the Purchaser.

2.08 Storage of the Coating Consignments

All coatings are to be stored in accordance with conditions specified by the coating Manufacturer.

2.10 Maintenance

The coating must be inspected annually by the Owner, Chengda Engineeing Corporation of China and approved vendor’s inspectors and a condition report submitted to the Guarantor.

Damages and coating imperfections amounting to 3% per tank and pipeline surface or less are to be repaired with APPROVED VENDOR products by and at the expense of the Guarantor.

2.11 Cleaning and Touching-up

Cleaning and touching-up, if any, of the surfaces under guarantee shall be carried out according to the recommendations for maintenance provided by the manufacturer/guarantor. Records of such work are to be kept and copies forwarded to the Guarantor.

EXCLUSIONS

3.01 External causes after the handover date including, but not limited to, deterioration of the system caused by welding or other heating, fairing, pollution, mechanical damage, improper cleaning or improper use, damage resulting from fire, explosions, collision, sets of God, and all other unusual occurrence.

3.02 Consequential damage including, but not limited to, Plant shutdown costs, etc., associated with coating repair work, loss of time, expenses due to damage of contained materials, loss of profits and all claims by third parties against Owner.

3.03 “Deterioration of the system caused by electrochemical action arising from the presence of metals within the tanks and pipe lines which are cathodic to the metal of the tanks and pipe lines”.

4.00 Burden of Proof

4.01 In the event of failure of coating covered hereunder Owner is to prove that the necessary repairing and/or re-painting is/are not attributed to failure to comply with the conditions set our under Section 2, or falls within the exclusions set out in Section 3.

5.00 Claim Procedure

5.01 Owner shall notify the Guarantor in writing, giving details of the nature of the damage immediately after detection and the Guarantor will decide if they wish to inspect the area upon which a claim is being made, and will give prompt attention and consideration to each claim of which notice is received, provided always that such notice must reach the Guarantor within 30 days from the date of detection, all claims being considered waived and definitely time bared thereafter.

5.02 Owner agrees to maintain, and in the event of an apparent defective area to make available to the Guarantor, pertinent records showing the environment to which the coated tanks/surfaces & pipe lines have been exposed since the initial coating application, including, but not limited to, a specific description of cargoes carried, ballast and cargo periods, surface treating/washing/cleaning procedures employed and other date needed to re-construct the complete chronological service history of the tanks/surfaces & pipe lines involved. It is understood that Owner will provide appropriate evidence to the Guarantor to support any claim covered by the terms of this guarantee.

5.03 The Guarantor’s acceptance or rejection of the claim shall be communicated by Chengda Engineering Corporation of China to client in writing.

6.00 Repairs

6.01 Repairs falling within the guarantee may be carried out only after consultation with the Guarantor and subject to the same conditions as applied to the original application of the coating under the coating system.

6.02 The Guarantor will ensure that the coatings required for the repairs are available as soon as possible at the place where the repairs are to be carried out. The Guarantor, however, does not assume liability for any neglect in this respect, nor for delay in the inspection referred to in paragraph 5.01.

7.00 Applicable Law and Arbitration China

7.01 This guarantee shall be governed by the law of China.

7.02 Any dispute arising out of this agreement (or out of any further agreement to which this guarantee may lend) will be submitted to Arbitration in China.

7.03 No alterations or modifications of this guarantee shall have any force or affect unless expressed in writing and signed by duly authorized representatives of Client and Guarantor.

8.00 Indemnity

The Owner agree under all circumstances to indemnify the Guarantor, or demand and without limitation, against claims by third parties brought against the Guarantor for damage and/or losses, however caused and named, including consequential damage and/or loss.

The above guarantee and all its conditions, exclusions and provisions (- 8 inclusive) are confirmed, and accepted in full.

This guarantee is being issued in duplicate.

21st July 2005