EX-10.1



 








Exhibit 10.1




TURN-KEY CONTRACT FOR DESIGN AND
CONSTRUCTION OF PLANT FOR MEDICAL PRODUCTS




	 	 	 
	 

	 	Drawn up and signed on the August 2, 2006
	 
	 	 
	Between:

	 	OMRIX BIOPHARMACEUTICALS LTD.

Private company no. 51 — 216605 — 9

Address: Blood Services Building, P.O.B. 888, Tel Hashomer, Kiryat Ono, 55100

Tel: 03 — 5316535, Fax: 03 — 5350265

(hereinafter: the “Client”)
	 
	 	 
	 

	 	of the first part
	 
	 	 
	And:

	 	S&A DESIGN AND CONSTRUCTION LTD.

Private company no. 51 — 24102 — 18

Of 4 Hasadna’ot Street, Herzliya Pituach, 64728

Tel: 9716111, Fax: 09 — 9716112

(hereinafter: the “Contractor”)
	 
	 	 
	 

	 	of the second part






 









 






TABLE OF CONTENTS 




	 	 	 
	Introduction

	Chapter A — General

	Sections 1- 7

	 
	 	 
	Definitions
	 	 
	Headings
	 	 
	Contract Documents
	 	 
	Contractor’s Declarations and Obligations
	 	 
	Client’s Declarations
	 	 
	Duties and Powers of the Supervisor
	 	 
	Assignment of Contract
	 	 
	 
	 	 
	Chapter B — Time Schedule and Efficiency Incentives

	Sections 8- 9

	 
	 	 
	Time Schedule
	 	 
	Advancement/ Efficiency Incentives and fines for delay
	 	 
	 
	 	 
	Chapter C — Detailed Design of the Project

	Sections 10-11

	 
	 	 
	Detailed Design and Intellectual Property Rights
	 	 
	Supervision of Purchasing Equipment and Bringing It To Site
	 	 
	 
	 	 
	Chapter D — The Construction of the New Plant

	Sections 12-14

	 
	 	 
	The Construction of the New Plant
	 	 
	Completion Certificates for the Works
	 	 
	Cleaning the Site of the Works
	 	 
	 
	 	 
	Chapter E — Supervision

	Sections 15-16

	 
	 	 
	Supervision on Behalf of the Contractor
	 	 
	Safety in Performance of the Works
	 	 
	 
	 	 
	Chapter F — General Undertakings

	Sections 17-19

	 
	 	 
	Provisions of the Law
	 	 
	Permits, Licenses and Approvals
	 	 
	Harm to the Public’s Convenience and to Property
	 	 






 









 






	 	 	 
	Chapter G — Employees

	Sections 20-21

	 
	 	 
	Provision of Personnel By the Contractor
	 	 
	Employees’ Conditions and Welfare
	 	 
	 
	 	 
	Chapter H — Equipment, Materials and Work

	Sections 22-24

	 
	 	 
	Provision of Equipment, Facilities and Materials
	 	 
	Quality of the Materials and Work, and Testing Samples
	 	 
	Removal of Waste Materials and Demolition of Rejected Work
	 	 
	 
	 	 
	Chapter I — Consideration and Terms of Payment

	Sections 25-26

	 
	 	 
	Consideration (Contract Fee)
	 	 
	Terms of Payment
	 	 
	 
	 	 
	Chapter J — Performance and Maintenance Guarantees

	Sections 27-29

	 
	 	 
	Guarantee for Performance of the Contract
	 	 
	Guarantee for the Warranty Period
	 	 
	General Provisions Regarding the Guarantees
	 	 
	 
	 	 
	Chapter K — Changes, Additions and Deletions

	Sections 30-34

	 
	 	 
	Changes
	 	 
	Evaluation of Changes
	 	 
	Payments for Daily Work
	 	 
	Measurement of Quantities in the Performance of Changes and/or Additions
	 	 
	Extension for Completion of Performance of the Works
	 	 
	 
	 	 
	Chapter L — Maintenance, Repairs, Service (Maintenance)

	Sections 35-36

	 
	 	 
	Maintenance, Repairs and Completion Certificate
	 	 
	Maintenance and Repairs for Computer System
	 	 
	 
	 	 
	Chapter M — Training

	Sections 37

	 
	 	 
	Training
	 	 






 









 






	 	 	 
	Chapter N — Relations Between the Contractor and Various Entities

	Sections 38-40

	 
	 	 
	Relations with the Contractor, the Owners of the Site of the Works and Other Tenants

	 	 
	Relations Between the Contractor and Other Contractors
	 	 
	Relations Between the Contractor, Consultants and Other Service Providers
	 	 
	 
	 	 
	Chapter O — Damages and Insurance

	Sections 41-49

	 
	 	 
	Contractor’s Liability for Damage On Site
	 	 
	Damages to Person or Property
	 	 
	Damages to Third Party
	 	 
	Damages to Employees
	 	 
	Indemnification
	 	 
	Insurance
	 	 
	 
	 	 
	Chapter P— Breaches and Remedies

	Sections 50-54

	 
	 	 
	Fundamental Breaches
	 	 
	No Right to Cancel
	 	 
	Performance instead of the Breaching Party
	 	 
	Removal of the Contractor
	 	 
	Disputes
	 	 
	 
	 	 
	Chapter Q — Miscellaneous

	Sections 55-57

	 
	 	 
	Secrecy
	 	 
	Rights
	 	 
	Termination of Contract
	 	 
	Jurisdiction
	 	 
	Independent Contractor
	 	 
	Offsetting
	 	 
	Modifications and Waivers
	 	 
	Attorneys’ Fees
	 	 
	Notices
	 	 







 









 








INTRODUCTION




	 	 	 
	WHEREAS:

	 	The Client is a company which deals in research and
development, production and marketing of various medical
preparations that are manufactured from plasma produced from
human blood (hereinafter: the “Products”);
	 
	 	 
	AND WHEREAS:

	 	The Client wishes to design and construct in Har Hotzvim in
Jerusalem a new plant for the manufacture of the Products,
which plant shall comply with Current Good Manufacturing
Practices (cGMP) as determined from time to time by the
various regulatory authorities in Israel (the Israeli
Ministry of Health), Europe (the European Agency for the
Evaluation of Medicinal Products — the EMEA), USA (Food and
Drug Administration of the USA — the FDA) and Canada (Health
Canada) and also with the requirements of any competent
authority in Israel, Europe, the USA and Canada (hereinafter: the “New Plant”);
	 

	 	
	AND WHEREAS:

	 	The Client wishes to order the performance of the design and
construction works for the New Plant pursuant to the
provisions of this Contract, the general terms and the other
documents attached to this Contract as an integral part
hereof;
	 
	 	 
	AND WHEREAS:

	 	The Contractor engages, inter alia, in the design and
construction of medical plants, and also in the provision of
warranty and service during the warranty period for projects
of the type of the Project as defined below;
	 
	 	 
	AND WHEREAS:

	 	The Contractor declares that it possesses the qualifications,
reliability, the professional, technical, organizational and
financial know-how, and that it has the personnel, the means,
the know-how and the experience for the purpose of the
performance of its undertakings pursuant to the Contract, at
the professional level and pursuant to the time schedule as
set forth in the Contract, and that it wishes to perform the
Project in its entirety, under its total responsibility, as a
turn-key project, including the detailed design of the New
Plant, the characterization, examination and testing of the






 









 






	 	 	 
	 

	 	equipment, the systems and the components which the Client
shall be required to purchase for the purpose of the
performance of the Project (hereinafter: the “Equipment”),
the installation of the Equipment, the use thereof, the
submission of operational and properly functioning production
lines after the completion of the OQ/IQ process, all when the
New Plant, after completion of the works pursuant to this
Agreement, shall be fit and suitable for compliance with all
the requirements of the standards and the binding
instructions of the competent authorities, as stated above;
	 
	 	 
	AND WHEREAS:

	 	The Contractor has performed in the past for the Client a
project of the expansion of the infrastructure and production
system of the plant at which the Client currently
manufactures part of the Products, and it has also submitted
to the Client a proposal for performance of the Project and
the works;
	 
	 	 
	AND WHEREAS:

	 	The Client wishes and has agreed, relying on the Contractor’s
declarations and undertakings as set forth in this Contract
and on the Contractor’s proposal, to deliver performance of
the Project and the works to the Contractor, all in
accordance with and subject to the terms of this Contract;






The following has therefore been declared, stipulated and agreed between the Parties:




Chapter A — General





	1.	 	Definitions
	 
	 	 	In this Contract, the terms below shall have the meanings set forth beside each one of them,
unless the context requires otherwise.
	 
	 	 	"The Client” — Omrix Biopharmaceuticals Ltd., private company no. 51-216605-9.
	 
	 	 	"The Contractor” — S&A Design and Construction Ltd., private company no. 512410218. It is
agreed that the Contractor may appoint sub-contractors on its behalf, provided that the
responsibility shall remain with the Contractor.




 









 






	 	 	“The Regulatory Requirements” — all of the requirements of the competent authorities in the
European Union, Israel, the USA and Canada, the Israeli Ministry of Health, the EMEA and the
FDA, and also the Current Good Manufacturing Practices (cGMP) presently in effect.
	 
	 	 	“The Contract” / “this Contract” — this document, the general specification and all the
documents and appendices attached hereto and/or which shall be attached hereto after the
signing of this document, subject to their being signed by both parties.
	 
	 	 	“The Project” — the project of the design and construction of a new plant which shall be
used by the Client for the manufacture of the Products and which shall be located at the
Site of the Works (as defined below), including its Equipment and systems and also all the
works which shall be performed in connection with the New Plant until the completion of the
acceptance tests, including IQ, OQ and PQ and the receipt of the completion certificate
after the PQ process, all in accordance with the provisions of this Contract.
	 
	 	 	“The New Plant” — as defined in the Preamble to this Contract.
	 
	 	 	“The Works” (or “the Work”) — all the works required for the purpose of completion of the
Project, including the detailed design and the construction of the New Plant, the
characterization, examination and testing of the Equipment, the installation of the
Equipment and the preparation thereof for use, the development of the software, the set-up
of the computer system and the installation of the software on the computer system, the
submission of operational and properly functioning production lines which are operated by
the computer system, without any failures, and which comply with all the requirements of the
competent authorities in the European Union, in the USA and in Israel, including the EMEA
and the FDA, all in accordance with the specifications and plans and in accordance with the
provisions of the Contract, including any amendment, addition and/or modification which
shall be required in writing by the supervisor and/or the Client in accordance with this
Contract.




 









 






	 	 	“The Equipment” — all the machines, the systems (including hardware, computer programs and
other technological systems), the accessories, the components and the items due to comprise
and form part of the New Plant, including those required for performance of the Works and
completion of the Project, as shall be determined in accordance with the provisions of this
Contract.
	 
	 	 	“The Site of the Works” — the area leased by the Client from the company Har Hotzvim Assets
Ltd., in Building B at Har Hotzvim in Jerusalem.
	 
	 	 	“Project Manager” — Mr. Shlomo Sackstein, and should he be unable to perform his duties —
an engineer with at least ten years of experience in the field of pharmaceuticals and in the
management of similar projects, who shall be appointed by the Contractor after receipt of
the Client’s prior, written approval.
	 
	 	 	“The Supervisor” — Any person who shall be appointed from time to time by the Client for
supervision of the performance of the Works or any part thereof by the Contractor and an
immediate report of his appointment shall be made to the Contractor.
	 
	 	 	“The Consultants” — technical consultants in the various professions and planners of the
various systems in the Project, who shall be appointed by the Contractor from time to time
and also any entities acting on their behalf and in their name.
	 
	 	 	“The Engineer” — a registered, skilled and experienced engineer who shall be appointed and
employed by the Contractor, at the Contractor’s expense, after receipt of the Client’s
approval with
regard to his identity, and who shall be present at the Site of the Works for the purpose of
supervision of the performance of the Works.
	 
	 	 	“Other Contractors” — various contractors (with the exception of the Contractor and its
sub-contractors) which shall perform any works in the Project at the Client’s invitation, in
the course of and during the performance of the Works by the Contractor, and whose work
shall be coordinated a reasonable period of time in advance with the Contractor.




 









 






	 	 	“The Specifications” — the technical specifications for the performance of the Works and/or
any part thereof, which shall be prepared and approved in accordance with the provisions of
this Contract, and which include (1) the User Requirements Specification (URS), which was
prepared by the Client and (2) the New Plant Layout; and which are attached herewith
respectively as Appendices B1 and B2 to this Contract, and including any modification and/or
addition to the Specifications which shall be approved by the parties, in writing, as stated
in this Contract.
	 
	 	 	“The Program” — a computer program for the operation, management and control of the entire
production system at the New Plant, which shall be developed in accordance with the Client’s
requirements, as described in the URS document and in the detailed characterization.
	 
	 	 	“The Infrastructure Programs” — Third party programs which are required for the application
and operation of the computer system, in accordance with the provisions of this Agreement.
	 
	 	 	“The Hardware” — servers, end-user computers and fixed-line and wireless data
communications components, insofar as required for the application and operation of the
Program and the Infrastructure Programs in accordance with the provisions of the detailed
characterization.
	 
	 	 	“Computer System” — the Program, the Infrastructure Programs and the Hardware.
	 
	 	 	“The Detailed Characterization” — a detailed characterization for the Computer System,
which shall be prepared in accordance with the provisions of this Agreement by the
Contractor and which shall be approved by the Client, in writing, and in accordance with the
provisions of section 10 below.
	 
	 	 	“The Plans” or “the Detailed Design” — the detailed design of the New Plant, including all
the performance plans, as shall be prepared by the Contractor and approved by the Client, in
writing, and attached as Appendix D to the Contract, as an integral part thereof, and
including any modification or addition to the Plans which shall be approved by the parties
in accordance with the provisions of this Contract, in writing. “The Main Time Schedule” —
the Main Time Schedule for 




 









 






	 	 	the performance of the Works, which is attached as Appendix E, and as shall be updated, if at
all, from time to time, in accordance with the provisions of this Contract.






	 	 	“Date of Completion of the Works” — April 2, 2008, and as shall be updated, if at all, from
time to time, in accordance with the provisions of this Contract.
	 
	 	 	“Foreman” — The foreman on behalf of the Contractor who shall be appointed in accordance
with the provisions of section 2 of the Work Safety Regulations (Construction Work) 5748 —
1988, and under whose direct and continuous management the Works shall be performed. The
appointment of the Foreman or the replacement thereof in the course of performance of the
Project shall be coordinated in advance with the Client.
	 
	 	 	“IQ Process” — (Instrumentation Qualification) — the process of examining the installation
of each item of the Equipment or entire assemblies at the plant.
	 
	 	 	“OQ Process” — (Operation Qualification) — the process of examining the operation of each
item or entire assemblies at the plant, and of the production system in its entirety,
including acceptance tests for the Computer System at the Site of the Works.
	 
	 	 	“PQ Process” — (Performance Qualification) — the process which ascertains that the
Equipment or assembly, the production system in its entirety and the Computer System are
operating without failures, meet the performance requirements and comply with the
functionality required thereof.
	 
	2.	 	Headings
	 
	 	 	The headings in this Contract have been inserted for convenience of reference only and no
interpretive meaning shall be attributed thereto.
	 
	3.	 	Contract Documents




 









 












	 	3.1	 	The Preamble to this Contract, and its appendices and their attachments, form an
integral part of the Contract and shall be deemed to be part of its terms, and without
derogating from the generality of the definition of “This Contract”, in any place where
the term Contract is mentioned, it shall also include the following documents,
appendices and their attachments, and any document which shall be prepared in
accordance with the provisions of this Agreement and which shall be approved by the
parties in writing:






	 	1.	 	The Contract
	 
	 	2.	 	Appendix A — Cancelled.
	 
	 	3.	 	Appendix B(1) — User Requirements Specification (URS).
	 
	 	4.	 	Appendix B(2) — New Plant Layout.
	 
	 	5.	 	Appendix B(3) — Process-Flow Diagrams (PFD) and Block Diagrams.
	 
	 	6.	 	Appendix D — The Detailed Design- shall be attached in the future.
	 
	 	7.	 	Appendix E — The Main Time Schedule.
	 
	 	8.	 	Appendix F — Special Technical Requirements.
	 
	 	9.	 	Appendix G — The Lease Agreement and the Management Agreement.
	 
	 	10.	 	Appendix H — Milestones for the Project.
	 
	 	11.	 	Appendix I — Completion Certificate.
	 
	 	12.	 	Appendix J — Cancelled.
	 
	 	13.	 	Appendix K — Bill of Quantities.
	 
	 	14.	 	Appendix L1 — The Autonomous Guarantee.
	 
	 	15.	 	Appendix L2 — The Maintenance Guarantee.
	 
	 	16.	 	Appendix M — The Change Control Form.
	 
	 	17.	 	Appendix N — Service Level Agreement.
	 
	 	18.	 	Appendix O — Training Appendix.
	 
	 	19.	 	Appendix P — Confirmation of Obtaining Insurance by the Contractor.
	 
	 	23.	 	Appendix Q — Procedure for Means of Fire Prevention.
	 
	 	24.	 	Appendix R — Declaration of Confidentiality by the Contractor.
	 
	 	25.	 	Appendix S — Documentation.
	 
	 	26.	 	Appendix T — List of Main Equipment.
	 
	 	27.	 	Appendix U- Draft of Bank Consent for Assignment of Rights.




 









 












	 	3.2	 	In any event of an inconsistency between the provisions of this document and its
appendices, the provisions of this document shall prevail, and in any event of an
inconsistency between the documents and/or the various appendices attached to this
document, the provisions shall prevail of whichever document, which was subsequently
drawn up and signed by the parties. For the purpose of the performance of the Works,
the order of priorities shall be as follows:
	 
	 	 	 	Appendix F (Special Technical Requirements), and thereafter, User Requirements
Specification (URS), Appendix B(1), and thereafter, in order, B(2) and B(3), Appendix
K, Appendix D, Appendix E, in accordance with the last draft that shall be prepared
and
approved in accordance with the provisions of this Contract, and thereafter, the
provisions of the Contract shall apply.
	 
	 	3.3	 	It is clarified that the omission of a requirement for performance in a later
document shall not be deemed to be contradicting the earlier document in which the
requirement appeared, which was subsequently omitted, unless the omission was expressly
stated in the later document, from which it was omitted.






	4.	 	Contractor’s Declarations and Undertakings
	 
	 	 	The Contractor hereby declares and undertakes, in addition to its declarations in the
Preamble to this Contract and in any other place in the Contract, the following:






	 	4.1	 	That it has visited the Site of the Works and the surrounding area, that it has
examined the conditions of the area and all of the data required for the purpose of
performance of the Works and also any other matter in connection with the performance of
its undertakings in this Contract, and it has found that there is no factual, technical,
contractual or other impediment to the fulfillment of its undertakings pursuant to this
Contract, in full and on time.
	 
	 	4.2	 	That it is familiar with the standards in effect on the date of the signing of
this Contract for the design and construction of the New Plant and that it is 




 









 






	 	 	 	aware that
it is required to make a special effort to comply with all the standards and
requirements of the relevant authorities in Israel and abroad, subject to and as set
forth in this Agreement, and to ensure that upon completion of the Works and completion
of the Project, the New Plant shall comply with all the Regulatory Requirements. For the
avoidance of doubt, it is hereby clarified that the Contractor shall be responsible for
keeping up-to-date, from time to time, with the changes that shall occur in the
standardization and in the regulation after the date of the signing of this Contract,
and to offer to the Client the changes required in the specifications, so as to comply
with the updated requirements. At the Client’s request, the Contractor shall make the
required changes and they shall be subject to the provisions of Chapter K of this
Contract. It is clarified that the Contractor’s obligation for compliance with the
Regulatory Requirements shall apply to all the systems of the Project which are included
in the Detailed Design, however, the Contractor’s obligation shall not apply to the
Regulatory Requirements relating to the quality and nature of the Products that shall be
manufactured at the New Plant which have no connection to the systems of the Project.






	 	4.3	 	That it is aware that any specification and/or engineering plan which shall be
submitted for the Client’s inspection shall be deemed to have been submitted after being
examined by the Contractor and being found to comply with all the standards and the
Regulatory Requirements, whether this is stated in the document or not.
	 
	 	4.4	 	That it shall perform the Project while complying with the provisions of any law,
including the work safety laws, the municipal by-laws, the environmental quality laws,
the Israel Police, the Israel Electric Corporation and any other competent entity whose
approval is required for the performance of the Works and/or for the operation of the
New Plant as duly required.




 









 






	 	4.5	 	That the Contractor is not aware of any legal impediment, which could prevent the
performance of the Works and the completion of the Project in accordance with the
provisions of this Contract.
	 
	 	4.6	 	That the Contractor possesses all the relevant information, from any entity,
which is required for the purpose of performance of the Project and the Works and
performance of its undertakings pursuant to this Contract, and that it is not relying on
any representations of the Client, with the exception of the Client’s requirements as
presented in this Agreement and in the appendices hereto, and as shall be updated from
time to time in accordance with the provisions of the Agreement, and that it shall not
require any additional information, except for such information as shall be required
from time to time in a reasonable manner as the result of a change or addition of the
Client in accordance with the provisions of this Contract. That stated in this section
shall not derogate from the Client’s obligation to cooperate with the Contractor and to
update the Contractor with details and information as required in order to perform the
provisions of this Contract, insofar as such details and information are known to it.
	 
	 	4.7	 	That the items of Equipment, including any component and any item which shall be
used in the performance of the Works and which shall be installed during the Project at
the New Plant, unless otherwise agreed by the Client, in advance and in writing: (1)
shall comply with any standard and with all the relevant Regulatory Requirements; (2)
similar use was made thereof by the Contractor in similar (but not identical) projects
for the performance of works of the type of the Works; (3) use shall not be made of the
components before it has made inquiries and found that no cessation of production is
planned with regard thereto, in the support and provision of maintenance services and in
the supply of spare parts for the said components.
	 
	 	 	 	Without derogating from that stated above, the Contractor undertakes that the Program
shall operate on the Hardware, that all of the components of the Computer System shall
operate in compatibility and in full integration between themselves in accordance with
the requirements of the Detailed 




 









 






	 	 	 	Characterization and the performance requirements
which shall be defined therein.






	 	4.8	 	The Contractor declares that it is aware that the Plant which is being planned
and constructed pursuant to this Agreement is vital for the Client’s production system
and that a delay in the performance of the Works and in the completion of the Project
would prevent the Client from meeting the demand for the Products in the market and from
exploiting the sales potential of the Products during the period of the delay, and also
thereafter, and that a delay in the completion of the Project and/or in any material
milestone in the Project would cause the Client serious damages, and it shall constitute
a fundamental breach by the Contractor of its undertakings pursuant to the Contract.
	 
	 	4.9	 	That in the performance of the Works and/or in the Equipment and in any part
thereof and in the use thereof, there shall be no breach of any third party rights; this
undertaking does not apply to any intellectual property relating to the Client’s
Products, its production methods or with regard to the land (which is the subject of the
Site of the Works).
	 
	 	4.10	 	The Contractor declares that the Plans which are being provided to the Client and
all the products of the Project which shall be prepared during and/or for the purpose of
performance of the Works and completion of the Project, including the specifications and
the Plans, shall be free of any third party right.
	 
	 	4.11	 	That it shall perform the Works at an excellent standard, with precision and
extreme care, while making use of materials that are consistent with the Specifications.
In cases where a binding standard is determined in law or in the relevant Regulatory
Requirements, the Contractor shall perform the Works at a level which shall not be less
than the binding standard, however, in the event that the level thereof was not defined
for a material or for a particular component, out of a number of possible alternatives,
the Contractor shall make use of the best materials.




 









 






	 	4.12	 	It is aware that the Client is relying to a large extent on the Contractor’s
professionalism and experience, in accordance with its declarations, including and in
particular, in accordance with the definition of the Client’s requirements and the
definition of the Project, so that the New
Plant will meet the production targets and the standards as required by the Client and
as set forth in the appendices to this Contract.
	 
	 	4.13	 	The Computer System shall be free from any time mechanism, encryption mechanism
or any other mechanism which would cause the cessation of its activities in the future
or which would require the use of a code or cipher for the purpose of the continued
operation or the renewed operation of the Program, unless expressly required in the
Detailed Characterization, and provided that the code and cipher and all the relevant
operating instructions were delivered to the Client and the Client was given full and
exhaustive training on how to operate these mechanisms, without requiring assistance
from the Client. The aforesaid shall not apply with regard to third party programs, in
respect of which the Contractor made undertakings as stated in section 10.7 below.






	5.	 	The Client’s Declarations
	 
	 	 	The Client hereby declares that:






	 	5.1	 	The Client is not aware of any legal impediment which could prevent the
performance of the Works or the completion of the Project in accordance with the
provisions of this Contract, subject to the Lease Agreement and the Management Agreement
attached herewith as Appendix G.
	 
	 	5.2	 	The Client’s general requirements for the performance of the Works are as set
forth in the appendices of this Contract, and upon the signing of the Detailed
Characterization, the Detailed Characterization shall present the Client’s requirements
subject to the provisions of the Contract, including Chapter K.
	 
	 	5.3	 	The Client shall allow the Contractor access to the Site of the Works in
accordance with and subject to the provisions of Chapter G and it shall 




 









 






	 	 	 	ensure that the
site of the performance of the Works shall be connected to the electricity, water and
sewage infrastructures. The request for actual connection and the bureaucratic handling
entailed therein shall be done by the Contractor for the Client, and the Client shall
sign the documents required for this purpose. The costs of the connection to the
infrastructures as stated and the current payment in respect thereof to the authorities
shall be at the Client’s expense.






	 	5.4	 	With the exception of officers on behalf of the Client, whose presence at the
Site of the Works is required for the purpose of the performance of the Project, the
Client shall not let people on
its behalf enter the Site of the Works without coordination with the Supervisor and
with the Contractor.
	 
	 	5.5	 	Should the performance of the Works or part thereof be contingent upon the
receipt of a permit or license as duly required, the responsibility for receipt thereof
shall lie with the Client. The Contractor shall act on the Client’s behalf in order to
receive the required licenses, and the Client undertakes to cooperate with the
Contractor and to bear the costs to third parties entailed therein.






	6.	 	Duties and Powers of the Supervisor






	 	6.1	 	Should the Client so wish, and after it shall appoint a Supervisor, the
performance of the Works — whether at the Site of the Works or at any other place where
activities are conducted for the purpose of the performance of the Works — shall be
subject to the Supervisor’s supervision, and the Contractor undertakes to perform the
Works to the Supervisor’s satisfaction.
	 
	 	 	 	The Supervisor and/or any entity appointed by him are entitled and authorized to
examine the quality of the Works, the Equipment which has been ordered and/or which
has been installed by the Contractor at the New Plant, the materials which the
Contractor is using, and also the manner of the performance of the Contract and/or the
Supervisor’s instructions by the Contractor. In addition, the Supervisor shall be
authorized to reject and/or replace any item of the Equipment, which shall be supplied
by the 




 









 






	 	 	 	Contractor, which does not comply with the terms of this Contract, without
derogating from the provisions of section 6.2 below.






	 	6.2	 	In any question that shall arise in connection with the manner of performance of
the Works, the quality thereof and the dates thereof or in connection with the quality
and type of the materials, the Equipment and the personnel which the Contractor shall
use and also in any technical matter relating to the Contract and/or in any event that
the Contractor shall receive contradictory instructions in connection with the
performance of the Works, the matter shall be determined in the Supervisor’s discretion,
and the Contractor shall immediately perform, or shall order the immediate performance
of, the said determination. Without derogating from the foregoing, the Contractor may
appeal any such decision of the Supervisor before a Professional Arbitrator in
accordance with the provisions of section 54, whose decision shall be final. It is
clarified that the application per se to submit an appeal to the Professional Arbitrator
against the Supervisor’s decision, in itself, shall not constitute grounds for the
Contractor to delay the performance of the Works and/or not to comply with the
Supervisor’s
instructions. That stated shall not derogate from the Contractor’s right, if any, to
delay the performance of the Works in accordance with the provisions of section 54
below.
	 
	 	6.3	 	For the avoidance of doubt, it is hereby clarified that should the Contractor
receive an instruction from the Supervisor which is not consistent with the provisions
of the Contract and/or the Plans or which constitutes a modification or addition, the
Contractor shall provide notice thereof to the Supervisor, in writing, within seven (7)
days from the date on which it became aware thereof. Should the Contractor fail to
provide notice to the Supervisor, as stated, the Contractor shall be solely responsible
for the results of the performance of said instruction, and it shall not be entitled to
any additional consideration in respect thereof.
	 
	 	6.4	 	The Contractor shall be solely responsible for the performance of its
undertakings pursuant to the Contract, irrespective of the quality and manner of the
supervision and management of the Project by the Client and/or the 




 









 






	 	 	 	Supervisor, and the
manner of the Supervisor’s functioning or the fact of the existence of the Supervisor’s
position or the right that was given to the Client to appoint the Supervisor, shall not
impose on the Client any responsibility in connection with the performance of the Works
and/or it shall not derogate in any manner from the total and absolute responsibility of
the Contractor to perform the Works carefully and precisely and in accordance with the
provisions of this Contract and while meeting the time schedule set forth in the
appendices hereto. The foregoing shall not derogate from any consent of the Client
and/or the Supervisor to anything stated in this Contract, and in any modification or
addition approved by either of them.






	 	6.5	 	Any power conferred on the Supervisor shall also be conferred on the Client. The
Client shall be entitled to conduct any act to exercise any right conferred thereon
pursuant to this Contract, through the Supervisor as its representative.






	7.	 	Assignment of Contract






	 	7.1	 	The Contractor may not assign or transfer to another or pledge the Contract or
any part thereof or any right or undertaking pursuant thereto. The Contractor may
deliver the performance of the Works, in whole or in part, to a sub-contractor on its
behalf, provided that the Client’s prior, written consent was given both to the actual
performance of the said works by the sub-contractor and to the identity of the
sub-contractor, and provided that the Contractor shall be responsible to the Client in
all matters pertaining to the Project and the Contractor’s undertakings as set forth in
this Contract, whether performed by the Contractor or by an entity on its behalf, with
the Client’s consent, as stated.
	 
	 	7.2	 	The Client may, at any time, in its sole discretion, transfer its rights and
obligations by virtue of the Contract, in whole or in part, to any person or entity as
it shall deem fit, and it shall provide notice thereof, in writing, to the Contractor,
all subject to the fact that such transfer shall not prejudice the Client’s obligations
to the Contractor in connection with this Contract, and subject to the fact that the
Client shall continue to be responsible for the 




 









 






	 	 	 	performance of its undertakings by the
transferee, in accordance with the provisions of this Agreement, unless the assignment
shall be done as part of a transaction for the sale of all the activities and assets of
the Client at the New Plant, in which case, the Client shall not continue to be
responsible as stated above.





Chapter B — Time Schedule and Efficiency Incentives





	8.	 	Time Schedule






	 	8.1	 	The Contractor undertakes to perform the Works rapidly, efficiently and
continuously, and to complete them in full and to the Supervisor’s satisfaction by the
Date of Completion of the Works, all in accordance with the Main Time Schedule and the
performance period specified in Appendix E. The foregoing shall not derogate from the
provisions of section 8.7 below and/or Chapter K below.
	 
	 	8.2	 	Within 30 days from the date of the signing of this Contract, the Contractor
shall prepare a detailed time schedule for the performance of the Project (Gant), which
shall be subject to the Main Time Schedule of the Project. The detailed time schedule
for the actual performance shall be updated by the Contractor regularly, on a weekly
basis, during the performance of the Project until the completion thereof, in
coordination with the Supervisor and with his approval (hereinafter: the “Detailed Time
Schedule”).
	 
	 	8.3	 	Without derogating from the responsibility of the Contractor as stated in this
Contract, the Contractor shall hold weekly follow-up meetings, attended by the
Supervisor and the Project Manager on the Client’s behalf. The Supervisor and the
Project Manager shall have the authority to place subjects on the agenda of the said
meetings, and the Contractor shall perform the tasks as shall be required, and as shall
be agreed between the parties from meeting to meeting, pursuant to the time schedule and
the directives of the Supervisor and the Project Manager at these meetings.
	 
	 	8.4	 	It is clarified and agreed that the completion of the Works at the expiration of
the period of performance of the Project and also compliance with the Main 




 









 






	 	 	 	Time Schedule and the Detailed Time Schedule, including all their stages, and with each one of the
milestones specified therein, are fundamental and basic terms of this Contract.






	 	8.5	 	The Client and/or the Supervisor shall be entitled, after coordination with the
Contractor, to make changes to the general time schedule or the Detailed Time Schedule
or to the order of performance of the Works and the Contractor shall be required to act
in accordance with the amended time schedule or the amended order of performance of the
Works. The provisions of Chapter K of this Contract shall apply to the said changes.
	 
	 	8.6	 	Subject to the provisions of section 8.7 and 8.8 and/or Chapter K below, the
Contractor undertakes to perform everything required in order to be entitled to receive
the completion certificate after completion of all the Works in accordance with the
provisions of this Contract and the appendices thereof by not later than the Date of
Completion of the Works.
	 
	 	8.7	 	Notwithstanding the foregoing, a delay in performance of the Works and/or
completion thereof due to circumstances of a general strike in the economy and/or at the
ports and/or at customs, a general call-up of the military reserve forces in a time of
emergency, a declared state of war, natural disasters, fire or a disaster at the Site of
the Works or in the surrounding area (hereinafter: “Force Majeure”) which shall prevent
the continued performance of the Works shall not be deemed to be a breach of this
Contract, and any date in this Contract shall be extended for a period equal to the
period for which the Force Majeure lasted and prevented the continued performance of the
Works, provided that the Contractor informed the Client of the existence of the Force
Majeure immediately upon learning thereof and that it took all the reasonable measures
in order to prevent the impact of the Force Majeure on the performance of the Works
and/or in order to reduce insofar as practicable the impact of the Force Majeure on the
performance of the Works, and that it updated the Client from time to time of the
measures being taken by it for this purpose. In the event that the delay following such
a Force Majeure lasts for a period exceeding six months, the Client shall have the right
(without 




 









 






	 	 	 	prejudice to any other right available thereto) to cause the cancellation of
this Contract by 30 days’ written notice. Should the Client cancel the Contract in
accordance with the provisions of this section, the provisions of section 57 shall
apply, with the exception of the obligation of payment of the Exhaustive Compensation or
any part thereof.






	 	8.8	 	Without prejudice to that stated in section 8.7 above, it is hereby agreed that a
cumulative and total delay of up to ten days for any reason from the date/s determined
in this Contract and in Appendix E, in particular, shall not constitute and shall not be
deemed to be a breach of this
Contract and the Contractor shall have no cause of action in respect of such a delay.
A total delay that exceeds the Grace Period, as defined below, with the exception of
the circumstances of a Force Majeure, shall constitute a fundamental breach by the
Contractor.






	9.	 	Advancement/ Efficiency Incentives and Penalties for Delays






	 	9.1	 	Advancement/ Efficiency Incentives






	 	9.1.1	 	Should the Contractor complete the Works in full and should it be
given a completion certificate by the Client, by not later than the Date of
Completion of the Works, and without any deviation from the time schedules,
including every deviation even if it is not a breach, the Contractor shall be
entitled to receive an amount of $300,000 (three hundred thousand US dollars) in
its value in New Israel Shekels according to the representative rate (as defined
in section 25.4 below) in addition to the Consideration as defined below. For the
avoidance of doubt, it is hereby clarified that the termination of the Agreement
during the Grace Period shall not entitle the Contractor to the said amount of
$300,000.
	 
	 	9.1.2	 	It is clarified that an update of the time schedule, in writing
and signed by both parties, following a Force Majeure and/or following
modifications and additions to the Project which shall be agreed upon between the
parties in accordance with the provisions of this




 









 






	 	 	 	Agreement, shall be taken into
account for the purpose of this section 9.1 and also in any place where there is
an undertaking in this Contract to dates and to a time schedule.






	 	9.2	 	Penalties for Delays






	 	9.2.1	 	Should the Contractor complete one or more milestones out of the
milestones set forth in Appendix H, 60 days or more after the last date for
completion of the said milestone, the Contractor shall pay to the Client in
respect of this delay with regard to the date determined in the time schedule in
Appendix E for the completion of the milestone, the amount of $50,000 (fifty
thousand US dollars) in its value in New Israel Shekels according to the
representative rate (as defined in section 25.4 below) for each actual month of
delay or the relative part of this amount for a period shorter than a month. The
cumulative amounts of the penalties shall be deducted from the payment in respect
of the last milestone. The provisions of section 61 below shall not apply to the
provisions of this section.
	 
	 	9.2.2.	 	It is clarified that an update of the time schedule, in writing and signed by
both parties, following a Force Majeure and/or following modifications and
additions to the Project which shall be agreed upon between the parties in
accordance with the provisions of this Agreement, shall be taken into account for
the purpose of this section 9.2.
	 
	 	9.2.3	 	The penalties due to the Client as stated shall not derogate from the
Client’s rights pursuant to any law in the event of a delay in performance of the
Works and completion thereof.
	 
	 	9.2.4	 	The Contractor shall not be required to pay a penalty and/or any
compensation in respect of a total delay which does not exceed 60 days (in this
Agreement, this period shall be referred to as: the “Grace Period”).




 









 











Chapter C — Detailed Design of the Project





	10.	 	Detailed Design and Intellectual Property Rights






	 	10.1	 	The detailed design shall be done in accordance with Appendices B(1) — B(3) and
in accordance with the provisions of any law, in such a manner that the Project shall
comply with the Regulatory Requirements. It is clarified that the provisions of this
sub-section shall not derogate from the Contractor’s declarations pursuant to this
Contract and, in particular, from the Contractor’s declaration in section 4.2 above.
	 
	 	10.2	 	The Works, the Plans, the Specifications and the Detailed Design shall include,
by implication, any item, any material and any work whose performance and/or
installation is required so that at the end of the Project and upon completion of the
Works, the New Plant will be suitable for work at full capacity in accordance with the
URS specified in Appendix B(1) of this Contract, while fully complying with all the
requirements set forth in this Contract, without any change to the time schedule and/or
any supplementary payment, even if the said item or material or work were not specified
in the Contract documents. That stated in this section is subject to the provisions of
Chapter K of this Contract, with regard to the changes and additions and section 8.7
above.
	 
	 	10.3	 	The Contractor shall commence preparation of the Plans and the Detailed
Characterization immediately upon the signing of the Contract in accordance with the
basic requirements set forth in the appendices of this Contract. At the end of the
preparation of the Plans for each of
the stages of the Project, and at the end of the preparation of the Contractor’s
proposal for the Detailed Characterization for the Computer System in its entirety
(hereinafter: the “Characterization Proposal”), and on the dates set forth therefor in
the time schedule and in the Documentation Appendix (Appendix S), the Contractor shall
enable the Client and/or any entity on its behalf to examine the Plans with regard to
each stage and the Characterization Proposal and to make any comments, should it deem
fit. The Client shall transfer its approval of the documents which are the subject of
Appendix S on the dates set forth in the 




 









 






	 	 	 	time schedule and in Appendix F. Should the
Client request any amendment to the Plans and/or the Characterization Proposal, the
Contractor shall bring the amended Plans and/or Characterization Proposal for the
Client’s re-approval, and the Contractor shall not commence performance of the works
described in the said documents before receiving the Client’s approval, in writing,
for the Plans for performance of the Works or any part thereof and/or for the Detailed
Characterization Proposal, as the case may be. For the avoidance of doubt, it is
hereby clarified that the Contractor may not commence the development of the Program
and/or may not order or purchase any components of the Computer System before the
Detailed Characterization is signed by the Client and attached as an appendix to this
Agreement.






	 	10.4	 	It is clarified that in the event of a delay by the Client in the grant of
approval to the Contractor for the Plans and/or the Detailed Characterization that were
submitted to the Client in accordance with the provisions of this Contract, which caused
a delay in the performance of the Project, all of the dates in the time schedule shall
be extended in accordance with the period of delay in the Client’s response, and this
extension shall not be deemed to be a breach by the Contractor. The extension of the
time schedule in accordance with the provisions of this section shall be the sole and
exclusive remedy of the Contractor in the event of a delay in the Client’s response,
provided that the delay is not unreasonable.
	 
	 	10.5	 	The Contractor confirms that it is aware that the Client and/or the Supervisor
shall be entitled, after prior coordination with the Contractor, to make changes to the
specification of the design works and the special specification, and that it undertakes
to make any change that shall be required as a consequence thereof in the Detailed
Design, all in accordance with Chapter K of the Contract.
	 
	 	10.6	 	It is hereby clarified that the Client shall be granted a right of use —
unlimited in time, and for any purpose and without any restriction in the manner or
extent of use — of any plan, any working paper, any document and any




 









 






	 	 	 	product that shall
be prepared for the purpose of
performance of the Works, which shall be prepared by the Contractor and/or an entity
on its behalf and/or by the Client in connection with the Project, including the
source code and the object code of the Program, including all its components
(hereinafter in this section: the “Plans”). It is agreed that all the Plans which were
prepared pursuant to the exclusive requirements of the Client and/or which contain the
expression of and/or which are indicative of production processes, trade secrets, and
any matter regarding intellectual property, which belong to the Client, including
characterizations and developments in connection with the Program, which are related
directly to the production process of the New Plant and their source code
(hereinafter, jointly: the “Exclusive Plans”), are the exclusive property of the
Client, and that all the proprietary rights, copyrights and/or any other right therein
shall belong solely to the Client. The Contractor shall have no right to make use of
the Exclusive Plans without the Client’s express prior, written consent to each event.
The Contractor undertakes not to reproduce the Exclusive Plans and not to transfer
them to another, and not to make use thereof for any other purpose, with the exception
of the performance of the Works. The foregoing shall not prevent the Contractor from
the performance of any future work, including the design and construction of a plant
similar to the New Plant of the Client, without relying on the Exclusive Plans. The
Contractor undertakes to submit to the Client the Plans and any copy thereof
immediately at the Client’s first request, and without any condition, for any reason,
and in any event, it shall do so as a prerequisite for the delivery of the final
completion certificate for the Project. Without derogating from the generality of the
provisions of section 61 below, the Contractor hereby expressly waives any right of
lien on the Plans and/or in any copy or part thereof.






	 	 	 	Notwithstanding the foregoing, the Client is hereby granted a non-exclusive right of
use, unlimited in time, which may not be assigned or transferred, in that part of the
Plans which does not constitute part of the Exclusive Plans.




 









 












	 	10.7	 	The Contractor undertakes to give to the Client, without any additional
consideration, user licenses for all the Infrastructure Programs as stated in section
10.6 above, when with regard to the software components of third party software
manufacturers, the Contractor’s undertaking is to give to the Client user licenses that
shall be consistent with the license rights that are granted to the Client by the third
party software manufacturers, and the Contractor shall permit the Client full use and
operation of the plant, without restriction in time, without restriction in the identity
of the users, and without any additional payment, at all the work
stages defined in the appendices to this Contract. For the avoidance of doubt, and
without derogating from the foregoing (except for regarding third party software):






	 	10.7.1	 	In addition to the sole and exclusive ownership right of the Client in the
developments which constitute part of the Exclusive Plans, as defined above, and
in the Hardware, the license right that is given to the Client with regard to the
components of the Computer System shall be without any restriction with regard to
the purpose, type, manner and extent of use, the location of installation of the
Computer System and the number of users thereof.
	 
	 	10.7.2	 	The Client shall be entitled to create copies of the Program, to modify it, to
add developments thereto or to derogate therefrom, in its discretion.
	 
	 	10.7.3	 	All the rights of use granted to the Client in the Program are also granted to
any related company of the Client, and the Client may grant sub-licenses to any
company in the Client’s group, without being required to send notice or to
receive consent.






	11.	 	Supervision of Purchasing Equipment and Bringing It To The Site






	 	11.1	 	The Contractor shall be responsible for bringing the Equipment which shall be
purchased for the Project to the Site of the Works, including bringing it to Israel,
releasing it from the customs authorities, transporting it and unloading




 









 






	 	 	 	it at the Site
of the Works, in a proper and complete condition, without any defect or unsuitability.
The Client shall ensure submission to the Contractor of all the documents required in
order to receive an exemption from purchase tax for the chillers from the Israeli
customs authorities. It is clarified that should the said exemption not be received, the
Contractor shall bear the costs of the purchase tax at its expense in respect of this
component. The Contractor shall assemble the Equipment, including all its components
(with the exception of laboratory equipment and equipment which shall be supplied by the
Client), it shall install it and prepare it for use pursuant to the Plans and the
Specifications attached to the Contract, all in accordance with the Main Time Schedule
and the Detailed Time Schedule.






	 	11.2	 	It is hereby clarified that as long as the Contractor has not delivered the Works
to the Client and as long as the Contractor has not been given a completion certificate,
the Contractor shall be solely and exclusively responsible for the Equipment and any
part thereof. The Contractor hereby waives any right of lien and/or any other right in
the Equipment and any part thereof,
and any Equipment which shall be held by the Contractor or in its possession shall be
held in trust in favor of the Client.
	 
	 	11.3	 	Without derogating from the provisions of section 11.2 above, the Equipment which
shall be purchased by the Contractor for the Project shall be owned by the Client
immediately upon the purchase thereof, however, this shall not release the Contractor
from the responsibility for any damage and/or harm caused to the Equipment up to the
completion of the Works and the issuance of the completion certificate by the Client. It
is clarified that the provisions of this section shall also apply to imported components
of equipment, whether the bill of lading shall be drawn up in the Client’s name or
whether it shall be drawn up in the Contractor’s name, and in such an event, the
Contractor shall be deemed to be the trustee for the Client.





Chapter D — The Construction of the New Plant





	12.	 	The Construction of the New Plant




 









 












	 	12.1	 	The Works for the construction of the New Plant shall be performed continuously
and consecutively, in accordance with the Detailed Design and the Detailed
Characterization as approved by the Client and in accordance with the instructions of
the Supervisor and the Client, while complying with all the relevant laws, regulations
and provisions, as stated in this Agreement.
	 
	 	12.2	 	The Contractor shall perform the undertakings set forth in the Contract and shall
complete same pursuant to the Main Time Schedule, and in accordance with all the other
terms set forth in the Contract in such a manner that the date of completion of
construction of the New Plant, including validations (OQ/IQ processes) and the process
of examining the actual performance and functionality of the entire production system at
the New Plant, shall end on the dates set forth therefor in the time schedule attached
as Appendix E to this Contract, subject to any update which shall be made thereto in
accordance with the provisions of this Agreement. That stated in this section is subject
to the provisions of this Agreement with regard to the Grace Period, a Force Majeure,
and Chapter K.






	13.	 	Completion Certificates for the Works






	 	13.1	 	Should performance of the works be completed with regard to each one of the
groups of items and systems pursuant to Appendix F (Special Technical Requirements)
(hereinafter: the “System Being Tested”), the Contractor shall provide notice thereof,
in writing, to the Client and to the Supervisor. The authorized representatives of the
Client and the Supervisor
(hereinafter, jointly and/or severally: the “Testing Team”), shall examine, in the
Contractor’s presence, the System Being Tested and shall conduct tests of IQ and OQ
processes, within seven days from the date of receipt of the notice. The Client shall
be entitled to include in the Testing Team an external contractor, in its discretion.
	 
	 	 	 	Should the Testing Team find that the System Being Tested is satisfactory and complies
with the terms of the Contract, including its appendices and documents, the Contractor
shall be given by the Supervisor a completion certificate for the System Being Tested
(hereinafter: the “Completion




 









 






	 	 	 	Certificate”) which shall be as per the draft attached
herewith as Appendix I to this Contract, and signed by the Client.






	 	 	 	Should the Testing Team find, after consultation with the Contractor’s
representatives, that the Works for performance of the System Being Tested, or part
thereof, were not conducted as required, the Testing Team shall submit to the
Contractor, within seven working days from the date of the end of the examination of
the System Being Tested, a schedule of repairs and completion works, which shall
specify, in writing, the repairs and the works required until the completion of the
System Being Tested, in accordance with the provisions of this Contract (hereinafter:
the “Schedule”). The Contractor shall perform the repairs and the works set forth in
the Schedule, within such period of time as shall be jointly determined and stated in
the Schedule.
	 
	 	 	 	Upon completion of performance of the repairs, the Testing Team shall conduct an
additional test of the System Being Tested, in the Contractor’s presence (within seven
days from the completion of performance of the repairs) and it shall draw up an
additional schedule (hereinafter: the “Supplemental Schedule”) within seven working
days from the date of the end of the said additional test.
	 
	 	 	 	The Contractor undertakes to keep the full project team, which shall be employed by it
in the performance of the Works available for the continuation of performance of the
Works at the Site of the Works until the issuance of the Completion Certificate for
all the parts of the Project.
	 
	 	13.2	 	During performance of the works, the Contractor shall submit to the Client, at
its request, plans of the Works performed by it up to the time of the Client’s request,
as stated, and full details of the performance thereof.
	 
	 	 	 	Without derogating from the generality of the foregoing, the Contractor undertakes to
transfer to the Client the manufacturer’s documents with regard to each item of the
Equipment, and also the facility’s books, which shall include the operation and
maintenance instructions, as-made drawings, certificates and documents of warranty for
the Equipment, a recommended




 









 






	 	 	 	list of spare parts and drawings of the item of
Equipment, insofar as required for the maintenance, operation and purchase of spare
parts for the Equipment.






	 	13.3	 	The Client shall commence with a PQ test for each of the Systems Being Examined
within 21 days from the successful completion of the OQ tests of the said System Being
Tested, and after a Completion Certificate is issued in respect thereof, and the
Contractor may be present during this test. The Client may postpone the date for the
conducting of the PQ test, and may refrain from conducting it for such time that the
performance or the non-performance of works at the Site of the Works would disrupt, in
the Supervisor’s opinion, the conducting of the relevant PQ test. The Contractor shall
commence repair of the failures that arose in the PQ test, immediately, from the moment
that it is informed of the failures by the Client, and for which the Contractor is
responsible pursuant to this Agreement and its appendices.
	 
	 	13.4	 	Upon completion of the examination of the last System Being Tested in OQ tests,
including the testing of the Computer System, including all its components, for the
examination of all the functions which it is required to perform in accordance with the
Detailed Characterization, successfully and without failures, and after the repair of
all the failures that arose during the previous rounds of tests, the Contractor shall be
given a final Completion Certificate attesting to the completion of the Project, subject
to that stated in section 35 below, with regard to the commencement of the maintenance
period and the extension thereof (in this Agreement: “Final Completion Certificate”).
	 
	 	 	 	Notwithstanding anything stated in this Agreement or in any of its appendices,
including the Completion Certificate and/or the Final Completion Certificate, it is
agreed that immediately upon the issuance of the Final Completion Certificate to the
Contractor, the count of the period of limitation as set forth in the law shall
commence, with regard to any claim which the Client may have in connection with the
non-fulfillment of any of




 









 






	 	 	 	the Contractor’s undertakings which it was required to
fulfill in order to complete the Project by the time of issuance of the Final
Completion Certificate.






	 	13.5	 	The Contractor shall record the protocols of the IQ and OQ acceptance tests and
shall submit them to the Client, for receipt of its comments, in accordance with the
time schedules as
determined in the Gant chart, which shall be prepared by the Contractor and approved
by the Client. The Client shall submit to the Contractor its comments on the protocols
of the said acceptance tests in accordance with the time schedule. The Contractor
undertakes to amend the said tests in accordance with the Client’s comments, and to
submit them for the Client’s approval and signature. The IQ and OQ acceptance tests
shall be conducted according to the protocols that shall be approved by the Client, in
writing. It is clarified that the acceptance tests shall include an integral
examination of the System Being Tested with the Computer System.






	14.	 	Cleaning the Site of the Works
	 
	 	 	Upon completion of performance of the Works, and prior to notice by the Contractor to the
Client of completion thereof, as stated in section 13 above, the Contractor shall clean the
Site of the Works and shall remove therefrom, unless it received another instruction from the
Supervisor, all the materials, waste and temporary facilities which do not constitute part of
the Works, so that on the date of the testing by the Testing Team, the Works and the site of
the New Plant shall be clean and suitable for their purposes. Failures or defects in the said
cleaning shall be noted in the Schedule and shall be rectified by the Contractor prior to its
receipt of the Completion Certificate, as part of the repairs required for the completion of
the Project.
	 
	 	 	In the course of the Works, once every two weeks, and also in any event of an exceptional
accumulation of waste at the Site of the Works or in its surrounding area, the Supervisor may
require the Contractor to remove the said waste, from time to time, prior to the completion
of the Works, and the Contractor is required to




 









 






	 	 	remove the said waste only to such places in
respect of which there is lawful approval.






	 	 	The Contractor is aware that the provisions of the Lease Agreement signed between the Client
and the owners of the building in which the Site of the Works is situated require the Client
to refrain from allowing the accumulation of waste or from dirtying the areas outside the
area of the Leased Premises. The Contractor declares that it is familiar with these
provisions and it undertakes to comply therewith, and it is aware that breach thereof may
cause serious damages to the Client and may require it to pay compensation.





Chapter E — Supervision





	15.	 	Supervision on Behalf of the Contractor






	 	15.1	 	The Contractor or its authorized representative shall be present at the Site of
the Works at any time that the Works are being performed and it shall supervise the
performance thereof continuously and in accordance with the Supervisor’s instructions.
	 
	 	15.2	 	In addition to the foregoing, the Contractor shall employ a Foreman, who shall be
present at the Site of the Works at any time of performance of the Works, as well as an
experienced construction engineer who shall be responsible pursuant to the Contract
and/or the provisions of any law.






	16.	 	Security and Other Safety Precautions
	 
	 	 	The Contractor undertakes to procure at its expense security and other precautions for the
security and convenience of its workers and the representatives of the Client and/or the
Supervisor and of any visitor to the Site of the Works, including other lessees at the Site
of the Works, and for the safeguarding of the Site of the Works and the Equipment situated
therein, all in accordance with the requirements of any competent authority and/or as
required by any law and/or in accordance with the provisions of the Lease Agreement attached
to this Contract as Appendix G. It is clarified that the Contractor shall not be responsible
for damages caused by the Client and/or any entity on its behalf.






 










 









	 	 	Without derogating from its declarations and undertakings pursuant to this Contract,
the Contractor declares that it is familiar with, knows and is well versed in all the work
safety laws, including all the regulations relating to safety and the provisions of the
Work Safety Ordinance (New Version) 5730 — 1970, and that it undertakes to act pursuant
thereto and pursuant to any law.





Chapter F — General Undertakings





	17.	 	Provisions of the Law
	 
	 	 	The Contractor shall perform the Works in accordance with the provisions of any law and/or
the instructions of any competent authority, including in accordance with the planning and
construction laws and the work safety laws, and in accordance with any permit, approval or
license as required pursuant to any law for the performance of the Works.
	 
	18.	 	Permits, Licenses and Approvals
	 
	 	 	The Contractor undertakes to perform the Works in a manner that will allow the Client to
obtain all the permits, licenses and approvals as required for the operation of the plant,
without any change or addition being required to the Works. Without derogating from the
Contractor’s undertaking as stated above, the Contractor shall be responsible for the
bureaucratic handling of the drawing up of applications to receive the permits, licenses
and approvals for the operation of the plant, and for the submission thereof to the
authorities in Israel, subject to submission by the Client to the Contractor of all the
documents and information as required for this purpose, and which are in the Client’s
possession, during a reasonable period after the Contractor’s request. The Contractor shall
not be responsible for the non-issuance of a permit or license for the operation of the New
Plant, unless it arises from the non-fulfillment of the Contractor’s undertakings pursuant
to this Contract.
	 
	19.	 	Harm to the Public’s Convenience and to Property
	 
	 	 	The Contractor declares that it is aware that the Site of the Works is located in a
building which is leased by the Client and that the Client has made various undertakings to
the lessor in connection with noise, disturbance, waste and any other





 









 






	 	 	nuisance, in connection with the performance of the Works at the Site of the Works as set
forth in Appendix G. The Contractor declares that it is very familiar with these provisions
and it undertakes to minimize, insofar as practicable, noise, waste and disturbances and to
comply with the instructions of the management company which operates in the building and
to comply with its directives during the performance of the Works.





Chapter G — Employees





	20.	 	Provision of Personnel By the Contractor






	 	20.1	 	The Contractor undertakes to provide, at its expense, the personnel required
for the performance of the Works, including professional and other workers in such
number as required and during the period determined therefor in the Contract and/or as
required in order to meet the time table set forth in this Contract.
	 
	 	20.2	 	The Contractor undertakes to employ employees for the purpose of performance
of the Works who are professional and experienced in performance of the works of the
type of the Works, which are the subject of this Contract. These employees shall be
employed in accordance with any law. The Contractor shall dismiss and remove any
employee who, in the Supervisor’s reasonable opinion (after consultation with the
Contractor) is not suitable or is unqualified for any particular work and/or acted in
the performance thereof in a negligent or improper manner, and it shall find a
replacement for any such employee within a reasonable period of time as shall be
determined by the Supervisor, and as shall be approved by him.
	 
	 	20.3	 	It is clarified that the Contractor is an independent contractor for the
purpose of the performance of the Works, and no employer — employee relations shall
be created between the Client and the Contractor’s employees, on account of the
performance of the Works.






	21.	 	Employees’ Conditions and Welfare





 









 






	 	21.1	 	The Contractor shall be responsible for all the obligations set forth in the
law and/or in any collective contract, and which are applicable to an employer in
respect of the employment of its employees in the type of occupation being performed
by it. Without derogating from the generality of the foregoing, the Contractor shall
comply with all the employment and work conditions and the social security of its
employees and/or of persons acting on its behalf, including payments of income tax,
social insurance, national insurance, employees’ funds, pension payments and/or any
other additional payment which applies and/or shall apply to an employer in respect of
its employees, at such rate as shall be determined by law and/or by the representative
workers’ organization of the employee and/or in a contract between the Contractor and
any of its employees.
	 
	 	21.2	 	The Contractor shall guarantee safety precautions for protecting the health
of its employees and their welfare, as required pursuant to any law and by any
competent authority, and it shall procure, as necessary, the receipt of the suitable
approvals, including from the Ministry of Health, in connection with providing food
and accommodation for the employees. In addition, the Contractor undertakes to
arrange, at its expense, toilets and appropriate eating areas at the Site of the
Works, to the Supervisor’s reasonable satisfaction, and also means of transportation
and accommodation, as necessary. The Contractor shall also ensure that at all times
all the equipment required for first aid shall be situated at the Site of the Works,
and it shall be easily accessible.
	 
	 	21.3	 	The Contractor takes upon itself the responsibility in all matters pertaining
to sub-contractors, which it shall appoint and employ in the performance of the Works.





Chapter H — Equipment, Materials and Work





	22.	 	Provision of Equipment, Facilities and Materials
	 
	 	 	The Contractor undertakes to provide, at its expense, the equipment, facilities, materials
and all the other tools and means as required for the efficient performance





 









 






	 	 	of the Works and for the completion of the Project at the required rate, and it declares
and undertakes that it possesses or shall possess all of the Equipment and facilities
required for the said purpose. The Supervisor may examine any item of the Equipment prior
to its being brought to the Site of the Works by the Contractor, and the Contractor
undertakes to allow the Client a period of 14 days to conduct such an examination prior to
the installation of the Equipment at the Site of the Works. Without derogating from the
foregoing, the Contractor shall conduct a factory acceptance test (FAT) process for the
items of the Equipment set forth in Appendix T, in respect of which it was noted that this
test shall be conducted, including the Computer System, and it shall provide notice thereof
to the Client 21 days prior to the commencement of the test. The Client may participate in
the FAT test, and it shall bear the costs entailed in its participation. Should the
Supervisor determine that equipment, facilities or materials that were supplied by the
Contractor are not suitable or adequate, the Contractor shall replace them at its expense
within a reasonable period of time as shall be determined by the Supervisor. It is agreed
that the Contractor may transfer the dispute to the Professional Arbitrator as stated in
section 54 below, without derogating from the Contractor’s obligation to perform the
Supervisor’s instructions without delay and also prior to the delivery of the award of the
Professional Arbitrator, subject to section 54 below. It is also clarified that, without
derogating from the other undertakings of the Contractor pursuant to the Contract, all of
the activities related to the performance of the Works, including the provision of the
means of transportation, measurement, lifting, leverage, etc. (including the provision of
the tools and the means required therefor), shall be performed by the Contractor, at its
expense and at its responsibility, as an integral part of the Works.
	 
	 	 	The Contractor undertakes to guarantee throughout the performance of the Works the
existence of a reasonable inventory of work materials, which shall be supplied on a regular
basis, for the purpose of compliance with its undertakings in full and on time.
	 
	 	 	The Contractor may, in the course of performance of the Works, store equipment and/or
materials at the Site of the Works. It is clarified that the grant of consent as stated
shall not constitute the taking of any responsibility by the Client for any loss





 









 






	 	 	and/or damage and/or breakdown and/or theft that shall be caused to the Equipment and/or to
any other property which shall be stored by the Contractor at the Site of the Works, as
stated. It is further clarified that without derogating from the Contractor’s other
undertakings pursuant to this Contract, all the activities relating to the performance of
the Works, including the means of transportation, measurement, electricity, lighting,
lifting, leverage, etc. (including the provision of the tools and the means required
therefor), shall be performed by the Contractor, at its expense and at its responsibility,
as an integral part of the Works.
	 
	23.	 	Quality of the Materials and Work, and Testing Samples
	 
	 	 	Without derogating from the Contractor’s obligation to comply with the requirements defined
in this Contract and the appendices hereto, the Contractor shall make use solely of new
materials, accredited with an Israeli standard and/or another standard as shall be
determined by the Supervisor, and only after they were examined by the Contractor and the
Supervisor (and/or an entity on their behalf) and found to be suitable and fit. In the
absence of a determination in the appendices of the Agreement with regard to the precise
and specific identification of a component or material and in the absence of the
determination of a binding standard for a component or material with regard to its quality
and nature, the Contractor shall provide to the Client any component and material of a high
quality. The Contractor also undertakes that the work which shall be done in the
performance of the Works shall be of a high quality, as stated in the specification.
	 
	 	 	The Supervisor’s examination pursuant to the provisions of this section shall not derogate
from the Contractor’s responsibility for the quality of the materials and/or the Works,
and/or it shall not derogate from the Contractor’s responsibility for ensuring the
compliance of the Works with the requirements of the Project, pursuant to the Contract
documents and the changes and additions as shall be agreed upon in writing, pursuant to the
provisions thereof.
	 
	24.	 	Removal of Waste Materials and Demolition of Rejected Work






	 	24.1	 	The Supervisor may, in his discretion, order the Contractor from time to time
to remove from the Site of the Works materials or items of equipment which,





 









 






	 	 	 	in the Supervisor’s opinion, are not suitable or fit, and to bring materials or
other items in their place. In addition, the Supervisor may order the demolition
and rebuilding of any part of the Works which was constructed at an unsuitable
level of quality or while using materials that are unsuitable and/or in
contravention of the terms of the Contract or any law.





Chapter I — Consideration and Terms of Payment





	25.	 	Consideration (Contract Fee)






	 	25.1	 	In consideration of performance of the Works, in their entirety, and subject
to completion of the Project and the fulfillment of all the other undertakings of the
Contractor pursuant to this Contract, in full and on time and to the satisfaction of
the Client and the Supervisor, including the transportation and supply of all the
Equipment (with the exception of process equipment and laboratory equipment), the
assembly thereof, the installation thereof, the use thereof at the plant, the
provision of training and the provision of service and warranty as set forth in the
Contract, and compliance with any undertaking until the issuance of the Completion
Certificate, the Client undertakes to pay to the Contractor absolute and final total
consideration in the amount of $15,900,000 (in words: fifteen million and nine hundred
thousand US dollars) plus VAT in respect of each payment against a duly issued tax
invoice, upon such terms, at such times and in such manner as stated in this Contract
below (hereinafter: the “Consideration”).






     The Contractor hereby declares that until the date of this Agreement, the Client has
paid it, on account of the Consideration, an amount of 1,048,750 US dollars.




	 	25.2	 	The amount of the said Consideration is fixed and therefore it is final and
absolute and it shall be paid without the measurement of any quantities, except as
determined in Chapter K of this Contract. For the avoidance of doubt, it is hereby
clarified that the Bill of Quantities and Prices (Appendix K) to the Contract does not
constitute a basis for the determination of the Consideration, and that the
itemization of the quantities and prices which





 









 






	 	 	 	appear therein is solely for the purpose of general information, and shall be used to determine the value of changes and additions only, in accordance with the
provisions of Chapter K below, and it shall not derogate from the definition of
this Contract as a “fixed-price” contract.
	 
	 	 	 	For the avoidance of doubt, it is hereby agreed and clarified that all of the items
and/or quantities that appear in the Bill of Quantities, Appendix K and/or in the
Plans and/or in the Specifications and/or in all the other appendices and
attachments of the Contract are included in the contract fee.
	 
	 	 	 	It is hereby agreed that the provisions of Chapter K shall apply solely to
supplements of additional systems, changes and adjustments to the equipment
specifications which shall be requested by the Client in writing, and that the Bill
of Quantities and Prices set forth in Appendix K shall not establish grounds for
the Contractor to demand any payment even if the performance of the Works,
disregarding a change or addition pursuant to Chapter K, shall require the
Contractor to use quantities larger than those specified in the appendices to this
Contract.
	 
	 	25.3	 	All the expenses and costs entailed in the performance of the Works, the
provision of the Equipment and the completion of the Project shall apply to and be
paid by the Contractor, and the consideration in respect thereof is included in the
amount of the Consideration stated above, after the Contractor has taken into account
the total cost of all of its undertakings, related costs of any kind or nature, the
Contractor’s profit and unforeseen expenses and liabilities. Changes and/or
fluctuations and/or linkage differentials in labor costs, in the prices of the
materials and/or the equipment, shall not affect the amount of the Consideration, and
the Contractor shall not be entitled to demand any additional payment in respect
thereof.
	 
	 	25.4	 	It is agreed that the Consideration and any other payment which shall be made
in accordance with the provisions of this Contract and which shall be denominated in
US dollars, shall be paid in US dollars and wired to the bank account, the details of
which shall be given to the Contractor in writing. In





 









 






	 	 	 	addition, it is agreed that VAT
as duly applicable shall be added to each payment, according to its rate at the time of the making of the payment.
Notwithstanding the foregoing, should the Client pay any payment of the
Consideration, which is denominated in US dollars, in New Israeli Shekels , then
the payment shall be made according to the representative rate of exchange known on
the date of making such payment. Should the Client delay in the making of a payment
to which the Contractor is entitled in accordance with the provisions of this
Contract, and such payment shall be made by the Client in New Israeli Shekels, then
the payment shall be calculated according to the higher of the following
representative rates: the rate known on the date intended for payment in accordance
with the provisions of this Agreement or the rate known on the date of actual
payment.
	 
	 	25.5	 	The Contractor shall make the payments of the VAT, income tax, national
insurance and any other tax applicable thereto or applicable to the Consideration
which it shall receive from the Client. Without derogating from that stated in this
section, the Client shall deduct tax at source for the Contractor as required pursuant
to law in respect of any payment made to the Contractor pursuant to this Agreement, at
the rate set forth in the law, unless, prior to the making of the payment, the Client
shall be presented with a valid approval from the tax assessor regarding a full or
partial exemption from the deduction of tax at source, and confirmation of bookkeeping
as duly required.
	 
	 	25.6	 	The Client shall exclusively bear the payment of all the charges, levies,
taxes and any other payment to the authorities and/or to third parties related to the
construction of the plant or the performance of the Works, except for fines and/or any
other penalty payments which shall be imposed as the result of a breach of the
Contractor’s undertakings pursuant to this Contract (hereinafter: the “Penalty
Payments”). Should the Penalty Payment arise as the result of an act or omission of
the Client and/or any entity on its behalf, the said payment shall not be imposed on
the Contractor. The Penalty Payments and any payment which shall be required in order
to bring the





 









 






	 	 	 	Equipment to the Site of the Works and the rest of the work materials,
including compulsory payments to the customs authorities and the various licensing authorities in Israel — shall apply to the Contractor.






	26.	 	Terms of Payment
	 
	 	 	The Consideration shall be paid to the Contractor subject to its progress in the
performance of the Works in accordance with the milestones set forth in Appendix H and the
issuance of a Completion Certificate upon completion of the Works. Payment attributed to a
particular milestone shall be made within seven business days from the completion of the
said milestone.





Chapter J — Performance and Maintenance Guarantees





	27.	 	Guarantee for Performance of the Contract






	 	27.1	 	To guarantee performance of all its undertakings pursuant to this Contract,
the Contractor shall deposit on the date of the signing of this Contract, and against
payment of the advance payment (the first payment specified in Appendix H —
Milestones For Payment), an autonomous bank guarantee linked to the dollar in an
amount in New Israel Shekels equal to $1,500,000 (one million five hundred thousand
dollars) as per the draft attached herewith to this Agreement as Appendix L1
(hereinafter: the “Autonomous Guarantee”). The Autonomous Guarantee shall be valid for
an initial period of 18 months, at least, and the Contractor undertakes that the
Autonomous Guarantee shall be extended from time to time so that it shall be in effect
continuously until the date of completion of all the Works, the submission of the
Completion Certificate pursuant to this Contract and the submission of a maintenance
guarantee as set forth below (hereinafter: the “Date of Termination of the
Guarantee”). The Autonomous Guarantee shall be deposited and held in trust in favor of
the two parties by M.L.G. & L.B. Trust Ltd. (hereinafter: the “Trustee”), which shall
act to carry out the instructions given thereto in this Agreement by the authorized
signatories from the law firm Meitar, Liquornik, Geva & Leshem Brandwein & Co. The





 









 






	 	 	 	parties hereby irrevocably instruct the Trustee to act in relation to the
guarantee, which shall be deposited therewith, as follows:






	 	27.1.1	 	The Trustee shall submit the guarantee held by it to the Client in any one
of the following events:






	 	27.1.1.1	 	Should a demand, in writing, be submitted to the Trustee by the
Client for receipt of the guarantee held by it, together with notice
specifying the amount due to the Client from the Contractor, the
manner of calculation thereof and the reasons therefor, and should
21 days have elapsed from the date on which written notice was
submitted to the Contractor by the Trustee regarding its intention
to submit the Autonomous Guarantee to the Client, together with the
Client’s notice.
	 
	 	27.1.1.2	 	Should a demand be submitted to the Trustee by the Client to
receive possession of the Autonomous Guarantee in circumstances in
which 30 days prior to the date of expiration of the validity of the
Autonomous Guarantee held by the Trustee, unconditional approval had
not been submitted to the Trustee by the bank which issued the said
guarantee with regard to the extension of the validity thereof by at
least 90 days.






	 	27.1.2	 	Return of the Guarantee: within seven days from the date on which one or
more of the circumstances set forth below were satisfied, the Trustee shall
submit the Autonomous Guarantee to the Contractor, unless prior thereto, the
Trustee received notice pursuant to section 27.1.1.1 above:






	 	27.1.2.1	 	Should a Completion Certificate, signed by the Client, be
presented to the Trustee, and should the maintenance guarantee be
submitted to the Trustee. Upon submission of the Autonomous
Guarantee to the Contractor, the





 









 






	 	 	 	Trustee shall submit the maintenance guarantee to the Client.
	 
	 	27.1.2.2	 	Should the Trustee be presented with notice of cancellation of
this Agreement by the Client, pursuant to the provisions of section
8.7 or pursuant to the provisions of section 57.






	 	27.1.3	 	The Trustee shall not be required to exercise judgment in its actions, or to
examine the provisions of the Agreement or the justness of the claims and
demands of either of the parties.
	 
	 	27.1.4	 	In any event of a dispute between the parties, the Trustee shall act solely
pursuant to a joint and agreed notice of the parties, in writing, or pursuant
to the award of a competent arbitrator or pursuant to a peremptory judgment.
	 
	 	27.1.5	 	The Trustee shall not be responsible for acts performed by it, unless they
were performed maliciously and in a manner that deviates from the express
instructions given to the Trustee in this Agreement.
	 
	 	27.1.6	 	The Trustee shall not be required to apply to the Court with an interim
claim in any event or for any reason, however, it shall be entitled to do so
at any time in its discretion. Should the Trustee apply to the Court with an
interim claim, the parties shall pay to the Trustee its fee, and the court
costs, as shall be ruled by the Court, in equal parts between them or in
accordance with the Court ruling regarding the division of the amounts between
them.
	 
	 	27.1.7	 	The Trustee shall not be required to perform any action prior to the
expiration of seven business days from the day on which it was required to do
so.






	 	27.2	 	The Client may enforce the Autonomous Guarantee and demand the immediate
payment thereof, in whole or in part, as a lump-sum payment or in





 









 






	 	 	 	periodic installments, after the Autonomous Guarantee was submitted to the Client by the
Trustee in accordance with the provisions of this Agreement, in any event in which the
Client shall have a cause, pursuant to law and in accordance with the provisions of this Agreement, to receive any amount of money
from the Contractor and also in any event in which the Client shall have a cause to
duly cancel this Agreement. The giving of the Autonomous Guarantee or the
implementation thereof and the enforcement of its amount as stated shall not
derogate from any remedy and/or right available to the Client pursuant to any law,
including the Client’s right to receive compensation from the Contractor in amounts
exceeding the amounts of the Autonomous Guarantee.
	 
	 	27.3	 	The Contractor undertakes to extend from time to time the Autonomous
Guarantee so that it shall remain in effect until the Date of Termination of the
Guarantee. Consequently, if by 45 days prior to the date of expiration of the
guarantee, the Date of Termination of the Guarantee has not fallen due, the Contractor
shall be required to submit to the Client unconditional approval, in writing, by the
bank which issued the guarantee that the guarantee has been extended by at least 90
days, and so on and so forth, until the Date of Termination of the Guarantee shall
fall due.
	 
	 	27.4	 	Should the Client enforce the Guarantee, it shall be entitled to collect from
the enforced amount any amount which the Contractor owes to the Client pursuant to
this Contract and under any law and to make use thereof for the purpose of fulfillment
of the Contractor’s undertakings. The balance of the amount of the Guarantee shall be
held in a deposit by the Client to guarantee the fulfillment of the Contractor’s
undertakings pursuant to this Agreement.
	 
	 	27.5	 	Reduction of the Autonomous Guarantee:
	 
	 	 	 	Should the conditions be satisfied for the milestone for payment no. 8
in Appendix H, the Contractor may amend the amount of the Autonomous
Guarantee and reduce it to an amount in New Israel Shekels that is
equal to US$750,000, and the Client shall approve and/or sign for the
bank a deed of consent for this purpose.





 









 






	28.	 	Guarantee for the Maintenance Period






	 	28.1	 	To guarantee fulfillment of the Contractor’s undertakings and the provisions
of the Contract during the maintenance period, the Contractor shall submit to the
Client, upon receipt of the Completion Certificate and the return of the guarantee
that was given in accordance with section 27.1 above, and as a prerequisite for
receipt thereof, a linked bank guarantee, in an amount in New Israel Shekels that is
equal to US$750,000, as per the draft attached herewith as Appendix L2 (the
“Maintenance Guarantee”).
	 
	 	28.2	 	The maintenance guarantee shall be as per the draft attached herewith as
Appendix L2, and it shall be in effect at least until the end of 30 days after the end
of the last maintenance period (as defined below).
	 
	 	28.3	 	In any event in which it shall become clear to the Client that the Contractor
has not complied with any of its material undertakings in connection with the
maintenance period as set forth in this Contract and/or in accordance with any law,
the Client may collect the amount of the Maintenance Guarantee, in whole or in part,
as a lump-sum payment or in periodic installments, and it may receive payment
therefrom with regard to any damages, losses, expenses and payments that shall
actually be caused to the Client in respect of the non-fulfillment of any of the
Contractor’s undertakings, as stated.






	29.	 	General Provisions Regarding the Guarantees






	 	29.1	 	The Contractor shall bear all the payments entailed in the issue of the said
guarantees, including bank commissions and/or interest payments of any kind or nature.
	 
	 	29.2	 	Notwithstanding that stated in section 27.3 above, the Contractor undertakes
that should a dispute arise between the parties in connection with debts and/or
undertakings of the Contractor to the Client, the Contractor shall extend from time to
time the guarantee in effect at that time for the entire period of the dispute between
the parties until the determination thereof or until the settlement thereof, with the
consent of the parties. Should the Contractor fail to extend the guarantee as stated,
by 45 days prior to the date





 









 






	 	 	 	of expiration thereof, the Client may instruct the
Trustee to enforce the guarantee and the Trustee shall act in accordance with its instructions. In the
event of an application to the Trustee as stated, the parties hereby instruct that
the Autonomous Guarantee shall not be submitted to the Client, other than at the
expiration of 14 days from the date on which notice was submitted by the Trustee,
of its intention to submit the Autonomous Guarantee to the Client in the said
circumstances, and provided that the Autonomous Guarantee was not extended by the
end of the said 14 days.





Chapter K — Changes, Additions and Deletions





	30.	 	Changes






	 	30.1	 	The Client may order the Contractor to make any change to the Works and/or
the Project, including a change in their form, nature, style, type, size, scope and/or
any other change (hereinafter: the “Changes”). The change order shall be as per the
draft of the Change Control Form, attached herewith as Appendix M to this Contract,
and it shall include the details of the requested change, the dates for the
performance thereof, the change of the time schedule and the additional payment in
respect of the change as stated below (hereinafter: the “Change Order”).
	 
	 	30.2	 	It is agreed that only changes in quantities or in quality or in a
specification with regard to the items specified in Appendix T, or changes in the
layout which shall be required after commencement of performance of that part of the
Works in which a change in layout is requested, shall be deemed to be changes that
justify a supplement to or deduction from the Consideration. Should the Contractor
believe that a particular change requires a supplemental payment or the extension of
the time schedule for performance of the Works, the Contractor shall be required to
provide prior, written notice thereof, specifying details and reasons, to the Client
within 14 days of receipt of the Change Order, as a condition for its right to make a
claim for such supplemental payment or extension. The Change Order shall be drawn up
in coordination and consultation with the Contractor. The Contractor undertakes to act
to perform the Changes in accordance with that specified in





 









 






	 	 	 	the Change Order and in accordance with any clarification and/or completion which shall
be provided by the Client and/or the Supervisor in connection with the said Change
Order, and to update the Computer System accordingly, insofar as required by the
Change Order, even if not expressly stated therein. The Contractor shall provide
the requested updates in the Program to the Client, and shall implement them after
receipt of the Client’s approval therefor.
	 
	 	 	 	For the avoidance of doubt, it is hereby clarified that the Contractor shall not
delay the performance of the Works in accordance with the Change Order, whether the
implications of the Changes for the Consideration and for the time schedule were
agreed upon or not. The Contractor may not delay performance of the Changes due to
the fact that it has not yet been decided whether it should receive a supplement to
the Consideration, and if such a decision has been made, at what rate.
Notwithstanding the foregoing, it is agreed that if the amount of the dispute
exceeds US$200,000 in respect of the said change, the following provisions shall apply:






	 	30.2.1	 	The Client may withhold an amount of up to US$200,000 only and the balance
of the amount in dispute shall be paid to the Contractor; alternatively,
	 
	 	30.2.2	 	The Client may deposit the full amount of the dispute with the Trustee. The
parties hereby instruct the Trustee to deposit the amount of the dispute in a
short-term, interest-bearing shekel-denominated deposit. The Trustee shall
transfer the amount deposited with it to either of the parties pursuant to an
agreed notice that shall be submitted to the Trustee, signed by the two
parties or in accordance with the decision of the Professional Arbitrator.
	 
	 	30.2.3	 	If the Client did not act pursuant to one of the said alternatives, the
Contractor shall be entitled to delay the performance of the change which is
in dispute.





 









 






	 	30.3	 	It shall be clarified that the Contractor may not change any detail of the
Plans without obtaining the Supervisor’s prior, written approval for this purpose,
unless it is necessary and arises directly from the Change Order, and the amendment
of the Plans was approved by the Client or by the Supervisor.
	 
	 	30.4	 	It is agreed that there may be a Change Order which causes a delay in the
performance of the Works on the date scheduled therefor in the Main Time Schedule
and/or supplemental consideration, and there may be a Change Order, subject to the
Contractor’s consent, which requires the shortening of the time schedule and/or the
reduction of the Consideration.






	31.	 	Evaluation of Changes






	 	31.1	 	The value of each change which requires a supplement to or deduction from the
Consideration as stated in section 30.2 above, and which was performed in accordance
with a Change Order, shall be determined according to the unit prices specified in the
Bill of Quantities, Appendix K to this Contract, and in the absence thereof —
according to similar unit prices specified therein, which may be used as a basis for
this purpose, and in the absence thereof — according to normal market prices. It is
clarified that the value of items and materials which are required for the performance
of a particular change requirement and which are not specified in Appendix T shall
also be taken into account for the purpose of the evaluation of the change.
	 
	 	31.2	 	Should the Contractor receive a Change Order, without it being determined
therein, with consent:






	 	(a)	 	that the Contractor is entitled to supplemental consideration
and/or an extension of time for the performance of the Changes;
	 
	 	(b)	 	what the rate is of the supplemental consideration and/or the
duration of the extension of time for the performance of the Changes;
	 
	 	(c)	 	what the rate is of the deduction from the Consideration
and/or the duration of the shortening of time for the performance of the
Works;





 









 






	 	 	 	and should the Contractor be of the opinion that the Changes require supplemental
consideration and/or an extension of time for the performance
of the Works, or should the Client be of the opinion that the Changes require a
deduction from the Consideration and/or the shortening of time for the performance
of the Works, the Contractor shall be required, if it intends to request a
supplement and/or extension and/or the Client shall be required, if it intends to
request a deduction and/or shortening, to provide written notice to the other party
within 14 days from the date of submission of the change notice to the Contractor,
of its request for a supplement and/or extension, or a deduction and/or shortening,
as the case may be.
	 
	 	31.3	 	Should 14 days expire from the date of submission of the change notice to the
Contractor, without the Contractor providing written notice to the Client of the rate
of the supplement to the Consideration and/or the extension of time for the
performance of the Works, and specifying the reasons therefor, the Contractor shall be
deemed to have granted its consent that the change notice does not justify a
supplement to the Consideration and an extension of time for performance.
	 
	 	31.4	 	Should the parties fail to decide, by consent, whether the Contractor should
receive a supplement to the Consideration and/or an extension of time for the
performance of the Works, or the rate thereof, within seven days the parties shall
apply to a Professional Arbitrator in accordance with the provisions of section 54
below.






	32.	 	Payments for Daily Work






	 	32.1	 	The Supervisor may determine in the Change Order, with the Contractor’s
consent, that the Changes or part thereof shall be performed on a daily work basis,
and the Contractor shall be entitled to its fee in respect thereof according to the
value of the work and the materials, plus profit at the normal rate thereof.
	 
	 	32.2	 	“Value of the Work” for the purpose of this section shall be determined by
the Supervisor, based on the value and number of the working hours in





 









 






	 	 	 	which the Changes were performed, as such number shall be submitted by the Contractor and
approved by the Supervisor.






	33.	 	Measurement of Quantities in the Performance of Changes and/or Additions






	 	33.1	 	Should the Client choose to make changes and/or additions to the Works, the
quantities that were actually performed in the course of the said changes and/or
additions shall be determined based on measurements that shall be made by the
Supervisor, in accordance with the calculations of quantities which shall be submitted
by the Contractor and approved by the Supervisor, unless it was agreed between the
parties, in writing, upon the payment of a fixed price for the Change Order or if this
was so determined by the determining expert as stated in section 54 below.
	 
	 	33.2	 	Should the Works, in whole or in part, be ready for measurement and should
the Contractor request that measurements be made accordingly, the Supervisor shall not
postpone the making of the measurements, unless, in the Supervisor’s opinion, such
postponement is necessary.






	34.	 	Extension for Completion of Performance of the Works






	 	34.1	 	Should a Change Order be given which requires the performance of a change
and/or Works in addition to those specified in the Contract, the Supervisor shall
determine, in writing, whether an extension to the Date of Completion of the Works
shall be given as a result thereof, and he shall specify the period of this extension
in accordance with the nature of the additional works and the period of time required
for performance thereof, all as shall be reasonably required by the changes and
additions.





Chapter L — Maintenance, Repairs, Service





	35.	 	Maintenance, Repairs and Completion Certificate






	 	35.1	 	The Contractor shall be responsible for the proper condition of the New Plant
and for the full and proper performance of all the items of the Works, and also for
the quality of the installation works and the work materials, subject to all the terms
of the Contract and the appendices thereof, in respect of each





 









 






	 	 	 	System Being Tested separately, for a period of 12 months from the date of delivery of a Completion
Certificate in respect of the said System Being Tested (hereinafter: the “Warranty Period”). The Warranty Period for the last
System Being Tested in respect of which a Completion Certificate shall be
submitted, shall be referred to in this Agreement as: the “Last Warranty Period”).
	 
	 	35.2	 	Should any damage, failure or defect arise and/or be formed during the
Warranty Period in the Works and/or in the Equipment that was installed, which was
caused as the result of the improper performance of the Works or the use of defective
materials or as the result of performance of the Works in a manner which is not
consistent with the Plans, the Contractor shall repair, at its expense, the said
failure within a reasonable period of time, which shall be determined by the
Supervisor. Such a request for repair shall be submitted to the Contractor by the
Client and/or the Supervisor, in writing, by not later than the last day of the
Maintenance Period.
	 
	 	 	 	It is agreed that the Warranty Period with regard to the specific failure that was
caused, and in respect of which the Contractor performed the repair, shall be
renewed for the duration of one additional year from the date on which the repair
was completed.
	 
	 	35.3	 	The repair of the defects shall be done in accordance with that set forth in
Appendix N, within the response times specified therein, and should they prevent
reasonable use of the New Plant, they shall be repaired as rapidly as possible, all in
coordination with the Client, so as to cause minimal disturbance.
	 
	 	35.4	 	The Contractor may, from time to time, submit to the Client part of the Works
whose installation has been completed, after the Supervisor examined that part of the
Works, and found it to be consistent with the terms of the Contract and to his
satisfaction, and after he gave his written approval thereof. In such an event, the
provisions of the above sections shall apply accordingly to that part of the Works, as
aforesaid. Should the Contractor fail to perform the repairs as required by the Client
or the Supervisor, the Client





 









 






	 	 	 	shall be entitled to perform them itself or through a
third party, provided that it gave notice thereof to the Contractor in advance, and an
extension of three (3) days for the performance of the repair, and in the event of a critical failure — 24 hours’ notice.
	 
	 	 	 	Should the Client perform the repairs as stated above, it shall be entitled to
collect all the expenses entailed therein from the Contractor, or to deduct them
from any amount due to the Contractor at any time, including by way of offsetting
or enforcement of the guarantees.
	 
	 	35.5	 	At the end of the Maintenance Period, and subject to fulfillment of all the
Contractor’s undertakings, the Supervisor shall submit to the Contractor a Completion
Certificate as per the draft which appears in Appendix I, in which the Client shall
inform the Contractor that all of the Works, including the maintenance works and
everything entailed therein, have been performed and completed in accordance with the
Contract and to the full satisfaction of the Client and the Supervisor (hereinafter:
the “Maintenance Certificate”) and at the same time, the Client shall return to the
Contractor the maintenance guarantee which was deposited with it.
	 
	 	35.6	 	If, during the PQ tests, failures shall arise in one or more of the Systems
Being Tested, including in the Computer System or any component thereof, and if, as a
consequence, a change is required in the system, the count of the Warranty Period for
the System Being Tested shall re-commence for a period of 12 months from the date on
which all of the said changes were made to the relevant System Being Tested.
	 
	 	35.7	 	The Warranty Period for the Computer System shall commence on the date of
issuance of a Final Completion Certificate, for a period of 12 months, and during this
period, the Contractor shall repair, without payment, any failure and any defect that
shall arise in the Computer System and in any of its components, in accordance with
the conditions of service and warranty set forth in section 36 below and in Appendix
N.






	36.	 	Service and Maintenance for the Program





 









 






	 	36.1	 	The Contractor undertakes to provide to the Client services of maintenance
and technical support for the Program which shall be installed in the systems of the
New Plant for a period of up to ten (10) years at least from the date of issuance of
the Completion Certificate by the Client, should the Client wish to receive these
services from the Contractor. The service shall be provided in accordance with a
service contract to be signed separately.
	 
	 	36.2	 	The Contractor shall provide the services and the technical support for the
Program in an exclusive manner or through suppliers and sub-contractors under the full
and comprehensive responsibility of the Contractor in accordance with the SLA attached
herewith as Appendix N to this Contract.





Chapter M — Training





	37.	 	The Contractor shall provide training, at its expense, for the Client’s employees at the
plant in all the activities required for the current operation and maintenance of the New
Plant, including the various components of the Equipment, the Hardware and the Program’s
components. The training shall be given by representatives of the Contractor at the plant, in
accordance with the provisions of Appendix O.





Chapter N — Relations Between the Contractor and Various Entities





	38.	 	Relations with the Contractor, the Owners of the Project Site and Other Tenants Near the Project
	 
	 	 	The Client shall be solely responsible for making all the required arrangements with the
owners of land at the site of the Project and with other tenants near the Project, and for
receiving therefrom all the requisite approvals, if any, so that the Works shall be
performed continuously and without interruption, while meeting the time schedules.
	 
	39.	 	Relations Between the Contractor and Other Contractors
	 
	 	 	In light of the possibility that other contractors will be employed in the Project for the
performance of works in various professions, concurrently to the performance of the Works
by the Contractor, it is agreed that the Contractor shall cooperate, insofar
as practicable (and provided that it does not adversely affect the time schedule or the





 









 






	 	 	performance of the Works in the Project), in order to allow coordination between the
various contractors so as to enable cooperation with them, insofar as necessary, for the
performance, advancement and completion of the Works and/or the Project, while complying
with all the Supervisor’s instructions.
	 
	40.	 	Relations Between the Contractor, Consultants and Other Service Providers
	 
	 	 	The Contractor confirms that it is aware that the Client employs and/or shall employ
consultants, experts or other service providers in the Project. The Contractor undertakes
to cooperate with them in a reasonable manner, should it be necessary, in the Supervisor’s
opinion, for the performance of the Works and/or the advancement and completion of the
Project.





Chapter O — Damages and Insurance





	41.	 	Liability for Damages at the Place of Performance of the Work






	 	41.1	 	From the date of provision of the place of performance of the work, in whole
or in part, to the Contractor and until the issuance of a Completion Certificate at
the end of performance of the work, the Contractor shall be responsible for protecting
the place of performance of the work, including everything performed therein, and for
protecting the materials, the Equipment, the facilities and anything else which shall
be brought by the Contractor to the place of performance of the work, or which shall
be provided to the Contractor for the purpose of performance of the work.
	 
	 	41.2	 	In any event of damage or loss for any reason, the Contractor shall be
required to repair the damage at its expense, as soon as practicable, and in such a
manner that upon completion of the performance of the said work, it shall comply with
all of its undertakings with regard to the completion of the performance of the work
and the manner of performance of the work. Furthermore, the said provisions shall
apply equally to the performance of repair and maintenance works by the Contractor
even after the issuance of the Completion Certificate.






 










 









	 	41.3	 	Should the Contractor fail to comply with any or all of its undertakings
pursuant to section 41.2 above, the Client shall be entitled — without derogating from
its rights pursuant to this Contract and/or pursuant to any law, to any other relief
and/or remedy — to perform that which is imposed on the Contractor, whether itself
and/or through another contractor and/or in any other manner, and in such an event,
the Contractor shall be required to indemnify the Client and the customer, immediately
upon their first demand, in writing, for all the expenses borne by the Client and/or
the customer. The amounts which the Contractor shall be required to pay to the Client
and/or the customer pursuant to this section shall constitute a debt from the
Contractor to the Client and/or the customer pursuant to this Contract, and the Client
shall be entitled to offset the said debt from any payment due to the Contractor.
	 
	 	41.4	 	Without prejudice to the foregoing, the Contractor shall compensate and/or
indemnify the Client and the customer for any damage or loss which shall be caused
thereto and/or to their property, and also for any damage or loss or death which shall
be caused to their employees, agents and representatives and also to its property
and/or to their property, by the Contractor or its agents, employees, representatives
or entities acting on its behalf or for it,
which were caused and/or made in connection with the performance of the work and as
a result of a negligent act or omission by them.






	42.	 	Damages to Person or Property
	 
	 	 	The Contractor shall be responsible for any damage or loss caused, whether to the body or
property of any person, in the course of performance of the work as a result of an act or
omission of the Contractor, which shall be caused following the performance of the work or
any other service or act performed by the Contractor, or its agents, delegates, employees,
representatives or entities acting on its behalf or for it, including any loss, damage,
impairment or harm which shall be caused by its acts or omissions to the property of the
Client and/or the customer.
	 
	43.	 	Third Party Damage





 









 






	 	 	The Contractor shall be responsible for all the damages, losses or expenses caused to any
third party during or following the negligent performance of the Works. The foregoing
includes all the visitors, employees, users and occupants of the site.
	 
	44.	 	Damages to Employees
	 
	 	 	Without derogating from any other provision pursuant to the Contract and pursuant to any
law, the Contractor undertakes to pay any damages or compensation lawfully due to an
employee or to any other person in the service of the Contractor and/or its sub-contractor
and/or any entity on their behalf as a result of an accident or any damage during
performance of the Works and/or as a result of performance of the Works and/or during
performance of works in the Warranty Period and in connection therewith.
	 
	45.	 	Indemnity
	 
	 	 	The Contractor shall indemnify the customer for any amount or expense which shall apply to
any of them in connection with any damage which shall be caused as a result of the
performance of the Works, and for which the Contractor is responsible pursuant to that
stated in sections 41, 42, 43 and 44 above, plus the expenses, court costs and attorneys’
fees which the Client and/or the customer bore in connection
with its defense, and expressly provided that notice of the event shall be submitted to the
Contractor and the Contractor shall be given a reasonable period of time to defend itself.
	 
	46.	 	Insurance






	 	46.1	 	Without derogating from the Contractor’s responsibility pursuant to this
Agreement and/or under any law, and without the Client and/or the customer taking upon
themselves any liability to the Contractor, the Client declares that a policy has been
obtained for construction work insurance, as described below (hereinafter: the
“Construction Work Insurance”), in order to protect the customer and/or the Client
against loss, damage or liability in relation to performance of the Project at the
site.





 









 






	 	46.2	 	Subject to the terms, exclusions, limits of liability of the insurer and the
amounts of the deductible contained therein, the Construction Work Insurance shall
include the sections of insurance set forth below:






	 	46.2.1	 	Section A – Damage to Works: Insurance against physical and unforeseen loss
or damage which may be caused to works at the site during the period of
performance thereof. For the avoidance of doubt, it is stressed that this
Section does not apply to equipment and other means used by the
Contractor for the purpose of performance of the Works, and the obligation to
insure them is imposed on the Contractor as stated in sub-section 46.7.1
below.
	 
	 	46.2.2	 	Section B – Third Party Liability: Third party liability insurance which
insures liability pursuant to law in respect of bodily injury or property
damage that may be caused during the performance of the Works, with a limit of
liability in the amount of $ 2,000,000, in respect of a single event insured
and cumulatively according to the Section.
	 
	 	46.2.3	 	Section C – Employers’ Liability: Insurance which insures liability in respect
of bodily injury or disease caused during and following
performance of the Works to any person employed in the performance of the
Works, with a limit of liability of $ 5,000,000 per claimant per event
and cumulatively according to the Section. For the avoidance of doubt, it
shall be noted that indemnity under the Section applies in excess of any
amount that is paid or due to be paid by the National Insurance
Institute.






	 	46.3	 	The Construction Work Insurance shall be extended to indemnify also the
Contractor and the sub-contractors acting on its behalf, in consideration of the
Contractor’s undertaking to pay to the Client, at its first request, an amount equal
to the total amount due by the insurance company for obtaining such insurance policy
in addition to the insurance agency fees. Without derogating from the Contractor’s
obligation to pay to the Client its participation in the Construction Work Insurance,
at the Client’s request, the





 









 






	 	 	 	Client is entitled, in its sole discretion, to deduct the
amount due as stated from the partial payments pursuant to this Agreement and/or from
the payment of the final account.
	 
	 	46.4	 	During the Client’s official working hours, the Contractor may inspect, at
the Client’s main offices, a copy of the draft of the Construction Work Insurance
policy. The Client reserves the right to make changes to the Construction Work
Insurance, however, any such change that could constitute an adverse change to the
scope of the coverage provided, from the Contractor’s perspective, shall be brought to
the Contractor’s attention in writing.
	 
	 	 	 	The Contractor declares and undertakes that it shall have no claim or demand or
lawsuit of any kind or nature against the Client and/or the customer and/or any
entity on their behalf in connection with the content or scope of the Construction
Work Insurance and the coverage provided thereunder, and it hereby waives any such
claim or demand, and confirms that it shall be enjoined from making any claim in
connection therewith.
	 
	 	46.5	 	The parties undertake to cooperate insofar as necessary in order to protect
and exercise their rights under the Construction Work Insurance. In addition, the
Contractor undertakes to comply with the terms of the Construction Work
Insurance, including to provide notice, in writing, to the Client and to the
insurer immediately upon learning of the occurrence of an event that may create a
cause of action pursuant to the Construction Work Insurance.
	 
	 	46.6	 	Upon occurrence of an insured event for which the Contractor is responsible
or which was caused to a person employed by the Contractor or by an entity on its
behalf or which was caused to any third party following an act or omission of the
Contractor or an entity on its behalf, the Contractor shall exclusively bear the
amount of the deductible (in accordance with the event) applicable to the Construction
Work Insurance policy.
	 
	 	 	 	Subject to compliance with all the Contractor’s undertakings pursuant to this
Agreement, it is agreed that upon the occurrence of an insured event, which is
insured under Section A of the Construction Work Insurance, the Client





 









 






	 	 	 	shall transfer to the Contractor funds from the insurance benefits that shall be received
from the insurer (if any) up to the amount of the sum which shall be required for
the reinstatement of the loss or damage, as approved by the insurer and the
appraiser on its behalf, in accordance with the Contractor’s progress in the
rehabilitation of the loss or damage, less the amount of the deductible specified
in the policy; subject to the terms of the lien as shall be determined (if any)
with the bank financing the Project.
	 
	 	46.7	 	Without derogating from the Contractor’s liability pursuant to this Contract
or under any law, the Contractor undertakes, at its expense, to obtain and maintain
the insurance policies set forth below (hereinafter: the “Contractor’s Insurance
Policies”) in its name and in the name of sub-contractors on its behalf, throughout
the period of its operations pursuant to this Agreement and also during an additional
period of two years thereafter, with regard to the insurance polices set forth in
sub-section 46.7.3 and 46.7.4 below:






	 	46.7.1	 	All-risk insurance that insures, against unforeseen and physical loss or
damage, the Equipment and any other property brought to the site of the
Project by the Contractor and/or for the Contractor and/or on its behalf (and
which was not intended to form an integral part of
the Works). Without derogating from the foregoing, this insurance shall
also cover cranes, other lifting devices, heavy mechanical equipment,
scaffolding, and any equipment and work tools. The insurance shall
include a clause regarding the waiver of a subrogation right against the
customer and the Client and any entities on their behalf, and also
against all the contractors, the consultants and any other entity related
to the performance of the Project, however, this waiver shall not apply
in favor of a person who caused damage maliciously.
	 
	 	46.7.2	 	Extended fire insurance that insures the Works, in whole or in part, at the
time of manufacture or assembly thereof by the Contractor or an entity on its
behalf outside the site of the Project, against loss or





 









 






	 	 	 	damage due to fire, smoke, lighting, explosion, earthquake, storm and tempest, flood,
fluid-related damage, burst pipes, injury caused by aircraft, injury caused by
vehicles, commotion, strikes, malicious damage and break-in. The name of the
insured shall be extended to include also the customer and the Client, and in
addition, the insurance shall include a clause regarding the waiver of a
subrogation right against the customer and against the Client and any entities
on their behalf, however, the said waiver shall not apply in favor of a person
who caused the insured event maliciously.
	 
	 	46.7.3	 	Product liability insurance with a limit of liability of US$ 1,000,000 per
event and cumulatively for an annual insurance period, which insures liability
in respect of a claim and/or demand filed for the first time during the
insurance period in respect of bodily injury and/or damage to property that
may be caused following the Works. The insurance shall be extended to
indemnify the Client and/or the customer in respect of liability that may be
imposed on either of them in connection with bodily injury and/or damage to
property that may be caused following the Works, as stated, without derogating
from the Contractor’s liability insurance vis-à-vis the Client and the
customer. The said insurance shall include a
retroactive date which is not later than the date of commencement of the
activities of the Contractor and/or an entity on its behalf at the site,
even if such activities shall commence prior to the signing of the
Agreement. The insurance shall include a discovery period of 6 months
from the end of the validity of the insurance, unless the Contractor
obtained alternative insurance which provides coverage as required by
this section.
	 
	 	46.7.4	 	Professional liability insurance with a limit of liability of US$ 1,000,000
per event and cumulatively for an annual insurance period, which insures the
Contractor’s liability pursuant to law in respect of a claim and/or demand
filed for the first time during the





 









 






insurance period in respect of any
professional act or omission by the Contractor and/or an entity on its behalf
during performance of the Works. The insurance shall be extended to indemnify
the Client and/or the customer in respect of their liability for acts and/or
omissions of the Contractor and/or an entity on its behalf, without derogating
from the coverage regarding the Contractor’s liability vis-à-vis the Client
and/or the customer. The said insurance shall include a retroactive date which
is not later than the date of commencement of the activities of the Contractor
and/or an entity on its behalf at the site, even if such activities shall
commence prior to the signing of the Agreement. The insurance shall include a
discovery period of 6 months from the end of the validity of the insurance,
unless the Contractor obtained alternative insurance which provides coverage
as required by this section.




	 	46.8	 	Should it be necessary, in the Contractor ‘s opinion, to obtain any
additional and/or supplemental insurance policies beyond the Contractor’s Insurance
Policies or the Construction Work Insurance, the Contractor undertakes to obtain and
maintain the said additional and/or supplemental insurance policy, and each additional
and/or supplemental insurance policy with regard to property insurance shall include a
clause regarding the waiver of a subrogation right in favor of the customer and/or the
Client and the entities
on their behalf, and with regard to property insurance policies, and in each
additional and/or supplemental insurance policy with regard to liability insurance
policies, the insurance shall be extended to indemnify the customer and/or the
Client in respect of liability that may be imposed thereon following an act and/or
omission of the Contractor and/or any entity on its behalf, subject to a
cross-liability section.
	 
	 	46.9	 	The Contractor’s Insurance Policies shall include an express clause pursuant
to which they shall have priority over any insurance obtained by the customer and/or
the Client, and that the Contractor’s insurer shall waive any claim and/or demand
concerning the contribution of the customer’s and/or the Client’s insurance. In
addition, the Contractor’s Insurance Policies shall





 









 






	 	 	 	include an express clause pursuant
to which they shall not be reduced and no adverse change shall be made thereto during
the insurance period, unless the insurer gave notice thereof to the Client and to the
customer, by registered mail, at least 60 days in advance. In addition, the
Contractor’s Insurance Policies shall include a clause pursuant to which a bona fide
breach of the terms and conditions of the policy by the Contractor and/or an entity on
its behalf shall not derogate from the rights of the Client and/or the customer to
receive compensation or indemnification pursuant to the policies and that the
Contractor is solely responsible for the payment of the insurance premiums for the
policies and for bearing the deductibles applicable thereto.
	 
	 	46.10	 	The Contractor undertakes to submit to the Client, within seven days from
the date of the signing of this Agreement, the Confirmation of Obtaining Insurance
attached herewith to this Agreement as an integral part hereof, marked Appendix P,
signed by its insurer. In any event of an inconsistency between that stated in the
Confirmation of Obtaining Insurance and that stated in this Agreement, and at the
Client’s request, the Contractor undertakes to cause a modification of the said
insurance policies, insofar as necessary, to make them consistent with the provisions
of this Agreement. It is expressly agreed that the obtaining of the said insurance
policies and/or submission of the Confirmation of Obtaining Insurance and/or the
examination and/or non-examination thereof and/or the modifications made
thereto shall not constitute approval regarding the consistency thereof with that
agreed and shall not impose any liability on the Client and/or the customer or any
entity on their behalf and shall not reduce the Contractor’s liability pursuant to
the Agreement or under any law.
	 
	 	 	 	For the avoidance of doubt, it is hereby clarified that failure to submit the
Confirmation of Obtaining Insurance at such time as stated in this section above
does not release the Contractor from any undertaking pursuant to this Agreement,
and without derogating from the generality of the foregoing, including undertakings
with regard to time tables and in addition, it is also expressly agreed that the
Client and/or the customer shall be entitled to





 









 






	 	 	 	withhold any payment to the
Contractor in their sole discretion, if the Confirmation of Obtaining Insurance is
not submitted on time.
	 
	 	 	 	Whenever the Contractor’s insurer shall inform the customer and the Client that any
of the Contractor’s Insurance Policies is due to be reduced, or an adverse change
is due to be made thereto, as stated at the end of the Confirmation of Obtaining
Insurance, the Contractor undertakes to procure the re-issuance of the said
insurance policy and to submit a new Confirmation of Obtaining Insurance, 30 days
prior to the date of cancellation of the said insurance policy or adverse change
thereto.
	 
	 	46.11	 	The Contractor undertakes to comply with the terms of the Contractor’s
Insurance Policies, to pay the insurance premiums on time and not to do any act which
could have an adverse effect on the validity of the insurance policies. The Contractor
undertakes to cooperate with the Client and/or with the customer, insofar as
necessary, for the purpose of protecting and exercising the rights of the customer
and/or the Client pursuant to the Contractor’s Insurance Policies, including to
provide notice, in writing, to the Client and to the insurer, immediately upon
learning of the occurrence of an event which could form the basis for a claim pursuant
to the Contractor’s insurance policies.
	 
	 	46.12	 	The Contractor expressly releases the Client and the customer and all the
entities on their behalf, and also all the contractors, consultants and entities
related to the performance of the Project and all the entities on their behalf,
from any liability for loss or damage that may be caused to any property which is
brought by the Contractor and/or an entity on its behalf and/or for it (including
vehicles, tools and cranes) to the site of the Project and also for damage in
respect of which it is entitled to indemnity pursuant to the property insurance
drawn up in accordance with sub-section 44.6.1 above, or in respect of which it
would have been entitled to indemnity, were it not for the deductible specified in
the insurance, and it shall have no claim and/or demand against any of the
aforesaid entities in respect of such damage,





 









 






	 	 	 	however, the release from liability
shall not apply in favor of a person who caused the damage maliciously.
	 
	 	46.13	 	The Contractor and the entities on its behalf shall take all the safety
measures and precautions as required for the purpose of preventing harm, loss or
damage to the body and/or property of any person and/or entity in connection with the
performance of the Project, and in particular, it shall comply with the procedure with
regard to means of fire prevention, as stated in Appendix Q attached herewith. In
addition and without derogating from that stated elsewhere in this section above, the
Contractor undertakes to comply with all the requirements and provisions of the
National Insurance Law and the National Health Insurance Law and all the orders,
regulations, etc. that were enacted pursuant to the aforesaid laws, and in particular,
but without prejudice to the generality of the foregoing, in such manner that all of
its employees and agents shall be, at any time and during the entire period of
performance of the Works, entitled to all the rights pursuant to the said laws.
	 
	 	46.14	 	This section 46 is a fundamental section of the Agreement and breach thereof
constitutes a fundamental breach of the Agreement.






	47.	 	The Contractor’s liability to the Client for compensation and indemnity pursuant to the
provisions of this Agreement shall be limited to a total amount (per event and cumulatively),
which shall not exceed US$ 3,000,000 (three million US dollars). The said limitation of the
liability for compensation and indemnity shall not apply in any
of the following events: (1) a deliberate act by the Contractor or an entity on its behalf;
(2) the damage or indemnity obligation are the result of an infringement of third party
intellectual property rights by the Contractor; (3) breach of the Contractor’s duty of
confidentiality against the Client or infringement of the Client’s intellectual property.
	 
	48.	 	It is agreed that without prejudice to the Contractor’s liability as stated above, the Client
shall be liable for any damage or loss that shall be caused, whether to person or property, as
the result of an act and/or omission by it and/or its agents, delegates,





 









 






	 	 	employees, representatives or entities acting on its behalf or for it, as follows: (a) at the site, after
performance of the work by the Contractor and delivery of possession of the site to the
Client; (b) any bodily injury and/or property damage that shall be caused in connection with
the Client’s Products and/or following use of the Client’s Products that were manufactured at
the plant to be constructed at the site; and (c) any such damage that shall be caused as a
result of infringement of any third party intellectual property which does not arise from a
breach of the Contractor’s undertakings pursuant to this Agreement (including and without
restricting any claim that shall be made by any third party, that the production process of
the Products at the plant constitutes an infringement of the intellectual property of that
third party). All the possible damages which are included in this section, including its
sub-sections (a) – (c) shall be defined below as: “Events of Damage”.
	 
	 	 	The Client shall indemnify the Contractor for any damage, loss, demand, amount or expense
which shall be paid by the Contractor as compensation in respect of all Events of Damage as
defined in this section above, plus expenses and reasonable court costs which the
Contractor bore, provided that the Contractor gave the Client notice of the payment demand
immediately upon learning of the existence thereof, that the Client was given a reasonable
opportunity to defend itself against the said payment demand, in its discretion, and that
no compromise was reached without the Client’s prior, written consent.
	 
	49.	 	The Client’s liability to the Contractor for compensation and indemnity pursuant to the
provisions of this Agreement shall be limited to a total amount (per event and cumulatively)
which shall not exceed US$ 3,000,000 (three million US dollars). The
said limitation of the liability for compensation and indemnity shall not apply in any of
the following events: (1) a deliberate act by the Client or an entity on its behalf; (2)
the damage or indemnity obligation are the result of an infringement by the Client of third
party intellectual property rights or claims that shall be filed against the Contractor as
a result of the damages caused due to the Client’s Products.





Chapter P – Breaches and Remedies





	50.	 	Fundamental Breaches





 









 






	 	 	The provisions of Chapters I, J, K and O and the provisions of sections 8.8, 13 and 46_are
fundamental provisions, and breach thereof shall be deemed to be a fundamental breach of
this Agreement. It is agreed that the Client shall not be entitled to cancel this Agreement
before the Contractor is given prior, written notice of 60 days, during which time the
Contractor did not remedy the breach.
	 
	51.	 	Lack of Cancellation Right for the Contractor, and Cancellation Without Return






	 	51.1	 	With the exception of that stated in section 54 below, the Contractor shall
not be entitled to cancel this Contract for any reason, including in the event in
which the Contractor believes that it has a right to do so pursuant to the provisions
of the law, and the Contractor hereby finally and absolutely waives the right to claim
this remedy. In addition, the Contractor shall not be entitled to claim, in any event
and for any reason, a remedy which is not a purely financial remedy for payment of an
amount of money, and it shall not be entitled to issue a temporary or permanent order
for the cessation of the performance of the Works and/or the Project, on any grounds.
That stated in this section 51.1 shall not apply in the event in which a dissolution
order is issued against the Client, which was not cancelled within 180 days.
	 
	 	51.2	 	If this Agreement is cancelled by the Client due to a fundamental breach of
the Contract by the Contractor, the Client shall be entitled to choose the full or
partial return of the Works which were actually performed/ supplied against receipt of
the agreed payment that was paid in respect thereof, or
alternatively, and in its sole discretion, not to make any return of the Works,
without derogating from the other remedies available thereto pursuant to law. In
each of the events, the Client shall be entitled to continue with the performance
of the Project, whether itself or through a third party, or to modify the Project
or to freeze it or not to implement it at all.
	 
	 	51.3	 	The parties undertake to provide notice to the other of any demand or legal
proceeding that shall be filed in connection with the rights in the Exclusive Plans
and/or in the Plans and/or in the Computer System or in any of its components. In any
event in which the Client’s rights pursuant to this





 









 






Agreement shall be violated as a
result of the foregoing, the Contractor shall be required, at the Client’s request, to
replace and/or repair the breaching component, to the Client’s satisfaction, in such a
manner that also after the replacement, all the products of the Works shall
successfully pass all the acceptance tests defined in this Agreement, and subject to
the Client’s consent to accept the system/ the replaced component (including software
components) and/or to purchase for the Client a suitable license that will allow the
Client rights consistent with the rights conferred thereon pursuant to this Agreement.
In addition, the Contractor undertakes to indemnify the Client in respect of all the
expenses and payments which the Client shall be required to pay under a compromise
judgment (including attorneys’ fees and costs). The said duty of indemnity is subject
to the Contractor being given notice of the said claim, and being given the
opportunity to defend itself against same.




	52.	 	Performance Instead of the Breaching Party
	 
	 	 	Without derogating from the rights and remedies available to the parties under the law,
wherever an obligation is imposed on the Contractor pursuant to this Contract to perform
any act or work, whether during the period of performance of the Works or during the
Warranty Period or thereafter, and the Contractor does not perform the said act or work, in
whole or in part, by the date specified therefor as shall be determined by the Supervisor,
and provided that it constitutes a breach of this Agreement, then should the Contractor not
perform the act within fourteen (14) days from the date of receipt of written notice from the Client/ Supervisor, the Client is
entitled, but not obligated, to perform the said act or work instead of the Contractor and
at the Contractor’s expense, whether by itself or through others, and in such an event the
Contractor shall be required to pay the Client, immediately at its first request, all the
amounts which the Client paid or bore in connection with the performance of the said act or
work, plus 15% of these amounts in respect of general costs, less the amount which the
Client was required to pay to the Contractor in respect of the said act, if the Client was
required to pay pursuant to this Contract.
	 
	53.	 	Removal of the Contractor





 









 






49.1 [sic] Upon the occurrence of any of the events set forth below or any fundamental
breach, the Client shall be entitled, after giving 30 day’s prior, written notice, to seize
the Works and/or part thereof, to remove the Contractor therefrom and from the Site of the
Works and to complete the performance of the Works itself and/or through a third party:




	 	53.1.1	 	Should the Contractor abandon the performance of the Agreement, without any reason,
and not return to perform its undertakings within 14 days, notwithstanding that all
the amounts pursuant to the Contract had been paid thereto.
	 
	 	53.1.2	 	Should the Contractor assign the Agreement, in its entirety, to another, without the
Client’s written consent first being given for this purpose. The foregoing shall not
prejudice the Contractor’s right to transfer works to sub-contractors.
	 
	 	53.1.3	 	Should a dissolution order and/or a receivership order be issued (on a significant
part of the Contractor’s assets) against the Contractor (including a temporary or
interim order), or should the Contractor file an application for a creditors’
arrangement and/or for receipt of a protection order against its creditors or should
the Contractor file an application for voluntary dissolution (with the exception of
voluntary dissolution without the dissolution of business, for the purpose of creating
another incorporated entity) and should each of the said orders not be cancelled
within 90 days.
	 
	 	53.1.4	 	Should the Contractor fail to complete the Works on time, apart from events of a
Force Majeure.
	 
	 	53.1.5	 	Should the Contractor significantly breach a fundamental provision of this Agreement
and should the Agreement be cancelled as a consequence thereof.





After the removal of the Contractor, the Supervisor shall determine and shall
inform the Contractor of the amount due to the Contractor in respect of the
performance of the Works by that time, and also the value of the surplus materials,
the surplus equipment and the surplus facilities at the Site of the



 









 






Works at that
time. The Client shall pay to the Contractor the said amount within seven (7) days
from the date of termination of the Works by a third party which shall complete the
Project, less amounts due to the Client in accordance with the provisions of this
Agreement and under any law.



The Client shall be entitled to submit the continuation of the performance of the
Works and completion thereof to any other contractor and/or entity, in its absolute
discretion.




	54.	 	Disputes
	 
	 	 	It is hereby agreed that in the event of a dispute or conflict in connection with the
Contract between the Client and/or any entity on its behalf including the Supervisor, and
the Contractor, including a dispute or conflict that was submitted to Court, the Works
shall be continued to be performed by the Contractor, without any conditions, and the
Contractor shall not be entitled to cease the performance of the Works or to slow down the
performance thereof or to delay them, for any reason, unless: (1) a dissolution,
receivership, freezing-of-proceedings or any other similar order was issued against the
Client, which was not cancelled within 90 days from the date of issuance thereof; or (2)
notwithstanding that the Supervisor confirmed that one or more particular milestones had
been completed, the Client did not make the payment that was contingent solely upon the
completion thereof, despite the expiration of 20 working days from the date on which the
Client was required to make the payment, after the Supervisor’s approval, and the amount of
the debt in respect of the
milestones that were completed as stated exceeded US$ 1,500,000 cumulatively, or should
such determination be given by the Professional Arbitrator and should 14 working days have
expired from the date on which the Client was required to make the said payment and failed
to do so.
	 
	 	 	Without derogating from the foregoing, in any event of a dispute between the
representatives of the parties in professional engineering matters or in other disputes in
respect of which a reference exists in this Contract for determination pursuant to this
section, the dispute shall be brought for discussion between the CEOs of the parties.
Should no solution be found to the dispute within 21 days, the parties shall apply, in
accordance with the provisions of this Contract, to Mr. Aharon Bar, who





 









 






shall serve as the
professional arbitrator only, and his determination shall be binding on the parties (in
this Agreement: the “Professional Arbitrator”). The Professional Arbitrator shall hear the
claims of the parties and shall make his ruling pursuant to this Contract and its
appendices, and he shall not be entitled to deviate therefrom. The parties shall act so
that the Professional Arbitrator shall make his award within 30 days from the date of
application thereto, by either of the parties. Should the Professional Arbitrator be
unable, for any reason, including due to the existence of a conflict of interests, to serve
as the Professional Arbitrator, the parties shall appoint, by consent, another arbitrator
in his place, and should the parties fail to reach agreement, the Professional Arbitrator
shall appoint a replacement arbitrator in his stead within seven days from the date of
application thereto, by either of the parties. The provisions of this section shall also
apply, mutatis mutandis, to the replacement arbitrator.



Chapter Q – Miscellaneous





	55.	 	Confidentiality
	 
	 	 	The Contractor shall sign a Confidentiality Undertaking as per the draft attached to this
Agreement as Appendix R, and it undertakes that this Undertaking shall be signed in favor
of the Client by all of the persons employed in its name and on its behalf, including
employees who shall be employed by the Contractor in the performance of the Project, prior
to the commencement of their work on the Project,
and before they are presented, in writing or orally, with any data and/or documents
relating to the Project.
	 
	56.	 	Rights
	 
	 	 	The parties agree and declare that the sole right of possession in the place of the
performance of the Works, in the structure of the New Plant, belongs to the Client, and
that the Contractor has the right of an invitee only, to be present at the Site of the
Works for the purpose of performance of the Project, and the Contractor has no right of
possession in the structure.
	 
	57.	 	Termination of the Contract





 









 






	 	57.1	 	The Client shall be entitled to terminate the Contract at any time and for any reason, and
without being required to give reasons therefor, by giving written notice to the Contractor
(hereinafter: “Termination Notice”). Should the Client terminate the Contract in accordance
with the provisions of this section, the Contractor shall cease the performance of the Works
on such date or at such stage as determined by the Client in its notice, as intended for the
termination of the engagement pursuant to this Contract. The Client shall pay to the
Contractor for works actually performed and installed at the Site of the Works by the date of
termination of the Contract, and also the price of the materials ordered by the Contractor
(and the direct expenses related thereto, such as insurance, storage and transportation), when
the said order may not be cancelled on the date of receipt of the Client’s notice, after the
Client and the Contractor acted jointly in an attempt to cancel the relevant orders and/or to
reduce the payment obligations in respect thereof, and provided that the said materials shall
be supplied to the Client and shall be delivered thereto at the Site of the Works. The
calculation of the said costs in respect of works performed after completion of the last
milestone that was completed shall be done according to the Contractor’s actual cost. The
Contractor shall not be entitled to receive payment in respect of orders and works that were
performed after the delivery of the Termination Notice. The Client shall pay to the Contractor
the amounts due thereto as stated within 30 days from the date on which the amounts shall be
clarified which the Client is required to pay to the Contractor. In addition to the
consideration of the Works by the date of cancellation as stated, the Client shall pay to the
Contractor an
additional amount of US$ 2,500,000 (two million five hundred thousand US dollars), in its
value in New Israel Shekels according to the representative rate (in this Contract, the
“Exhaustive Compensation”). The amount of the Exhaustive Compensation shall be paid to the
Contractor within 60 days from the date of termination as set forth in the Termination
Notice. It is clarified that payment of the said amounts is the sole and exclusive right
available to the Contractor in the event of termination of the Contract by the Client, in
accordance with the provisions of this section, and that other than this right, the
Contractor shall have no claim or demand against the Client. It is clarified that the
remittance of actual payment is a condition for the validity of the cancellation of this
Agreement pursuant to the Client’s notice, as stated.





 









 






	 	 	 	On the date of termination of the Contract as stated in this section, the Contractor shall
submit to the Client, immediately at its request, all of the Plans, the documents and the
working papers and any other information in connection with the performance of the Works
and the Project, and any copy thereof, and it shall remove all persons from the Site of the
Works as a condition for the payment of the said amounts by the Client, as stated in this
sub-section above.
	 
	 	57.2	 	In addition to the provisions of Section 57.1 above, the Client shall be entitled at its
sole discretion to terminate thus Agreement at any time, but no later than 30 days after the
date if this Agreement, upon a 30-days prior written notice to the Contractor, provided that
such termination shall be due to lack of acceptance of a consent from Bank Hapoalim Ltd. to
the Lease Agreement attached hereto as Appendix G, in the form acceptable to Client or in the
form attached hereto as Appendix U. In the event of termination pursuant to this Section 57.2,
the provisions of Section 57.1 above shall not apply, and the Client shall pay a final fee to
the Constructor in the amount of US$50,000.






	58.	 	Jurisdiction
	 
	 	 	It is hereby agreed that the exclusive jurisdiction in all matters pertaining to this
Contract shall rest with the competent courts in the Tel Aviv Jaffa district, and solely
with them.
	 
	59.	 	Independent Contractor
	 
	 	 	It is clarified that no employer – employee relations, no agent – principal relations and
no partnership relations shall exist between the Client and/or the Supervisor and the
Contractor, its employees, agents and any entity acting in its name, including
sub-contractors on its behalf, and that the Contractor shall perform all of its
undertakings which are the subject of the Contract as an independent contractor.
	 
	60.	 	Lack of Lien Right
	 
	 	 	The Contractor waives any right of lien conferred thereon under any law, including pursuant
to the Contractor Contract Law and the Sale Law. This waiver by the Contractor shall apply
with regard to the structure, when possession thereof shall





 









 






	 	 	 	remain at all times solely with
the Client, and also with regard to the Equipment and any product of the Works.
	 
	 	 	 	The Client is not entitled and/or authorized to offset and/or deduct and/or withhold and/or
collect any amount that is and/or shall be due to it from the Contractor pursuant to this
Contract, from any amount that shall be due to the Contractor from the Client pursuant to
this Contract. The foregoing shall not prevent the Client from withholding amounts of money
when, according to the Client, the Contractor is not entitled to receive payment thereof,
due to the non-fulfillment of undertakings which, pursuant to this Contract and its
appendices, were a condition for the said payment, in other words, non-compliance with the
milestones.
	 
	 	61.	 	Modifications and Waivers
	 
	 	 	 	No waiver, extension or concession from any term in this Contract and its appendices shall
be in effect, unless made in writing. No delay in the use of rights by either of the
parties shall be deemed to be a waiver thereof. Subject to that stated in this Contract,
each party may use its rights pursuant to this Contract and under the law, in their
entirety or each one separately, at any time as it shall deem fit.
	 
	 	 	 	It is hereby agreed that any modification to the Contract and any addition to this Contract
must be made in writing and signed by the parties.
	 
	 	 	 	An extension, silence or consent by either party to a deviation from the terms of the
Contract in a particular event and/or a waiver or abstention from use of a right by either
of the parties in a particular event shall not constitute a precedent or a waiver in any
other event, and it shall not constitute any waiver of their rights pursuant to this
Contract.
	 
	 	62.	 	Attorneys’ Fees
	 
	 	 	 	Each party shall bear the fees of its own attorney in connection with this Contract.
	 
	 	63.	 	Notices
	 
	 	 	 	The addresses of the parties for the purpose of this Contract shall be as stated in the
Preamble to the Contract, and any notice sent by the Contractor shall be sent





 









 






together with
a copy to the Supervisor. Any notice sent by one party to the other shall be deemed to have
reached its destination within four business days, if sent by registered mail, within 12
hours, if sent by fax, together with confirmation ascertaining receipt thereof, or
immediately – upon the personal delivery thereof during a business day.



In Witness Whereof The Parties Hereto Have Hereunto Set Their Hands:




	 	 	 
	/s/ Michael Burshtine
	 	/s/ Eric Shem-Tov
	 
	 	 
	The Client
	 	The Contractor







 










 


Appendix G






The
Tenancy Agreement by and between Nichsei Har Hozvim Ltd. and Omrix
Biopharmaceuticals Ltd. effective as of
May 15,
2006 is being filed as Exhibit 10.2 to the Quarterly Report on
Form 10-Q for the three months ended June 30, 2006.




 








 





APPENDIX
H
BAC II plant

payment sceduale




	 	 	 	 	 	 	 	 	 	 	 
	No	 	Milestone (*)	 	Sum	 	 	Remarks	 
	1
	 	Advance payment	 	$	1,485,125	 	 	 	 	 
	2
	 	DR 30%	 	$	1,485,125	 	 	 	 	 
	3
	 	DR 90%	 	$	1,485,125	 	 	 	 	 
	4
	 	Supply of clean room panels + AHU’s	 	$	1,485,125	 	 	 	 	 
	5
	 	Supply of  utilities water production system, water system tank, chiller	 	$	1,485,125	 	 	 	 	 
	6
	 	Supply of production equipment stationary process tanks, centrifuge, UF, Cascades	 	$	1,485,125	 	 	 	 	 
	7
	 	Mechanical completion of clean rooms + HVAC	 	$	1,485,125	 	 	 	 	 
	8
	 	Mechanical completion of utilities + clean rooms & HVAC are ready for IQ	 	$	1,485,125	 	 	 	 	 
	9
	 	Mechanical completion of process equipment and all utilities are ready for IQ	 	$	1,485,125	 	 	 	 	 
	10
	 	Validation completion clean rooms+ utilities	 	$	742,563	 	 	 	 	 
	11
	 	Validation completion	 	$	742,563	 	 	 	 	 
	12
	 	Bonus (according to contract terms)	 	$	300,000	 	 	 	 	 






 




*      Supply of equipment or completion of works are according to written approval of the customer




 









 







APPENDIX I 

COMPLETION CERTIFICATE




For the attention of:




S&A DESIGN AND CONSTRUCTION LTD.

4 Hasadna’ot Street

Herzliya Pituach, 64728




COMPLETION CERTIFICATE for System Being Tested 

(Please complete the description of the test group in the above space)



We hereby confirm that on the date of ___, performance was completed of all the Works which
you, as the Contractor, undertook to perform pursuant to the requirements of the Contract dated
___, including all its documents, appendices and attachments, for the construction of the
aforesaid System Being Tested, with the exception of those works and/or undertakings in connection
with the maintenance and warranty period which you undertook to perform after the issuance of this
Completion Certificate.



The maintenance period with regard to the aforesaid System Being Tested shall commence on the date
of completion as set forth above. This Certificate shall not release you from any liability in
respect of defective performance or non-compliance with any of the undertakings imposed on you
pursuant to the Agreement.




	 	 	 	 	 	 	 	 	 
	1.

	 	 	 	, the Client.
	 	Signature:	 	 
	 

	 	 
	 	 	 	 	 	 
	2.

	 	 	 	, the Supervisor.
	 	Signature:	 	 
	 

	 	 
	 	 	 	 	 	 





Sincerely yours,




     
               
               
                
                  




OMRIX BIOPHARMACEUTICALS LTD.




 









 




APPENDIX I 

FINAL COMPLETION CERTIFICATE




For the attention of:



S&A DESIGN AND CONSTRUCTION LTD.

4 Hasadna’ot Street

Herzliya Pituach, 64728




FINAL COMPLETION CERTIFICATE

(Upon Completion of the Last System Being Tested)



We hereby confirm that on the date of ___, performance was completed of all the Works which
you, as the Contractor, undertook to perform pursuant to the requirements of the Contract dated
___, including all its documents, appendices and attachments, for the construction of all the
Systems Being Tested, with the exception of those works and/or undertakings in connection with the
maintenance and warranty period which you undertook to perform after the issuance of this
Completion Certificate.



The maintenance period with regard to the last System Being Tested and also with regard to the
Computer System shall commence on the date of completion as set forth above. This Certificate
shall not release you from any liability in respect of defective performance or non-compliance
with any of the undertakings imposed on you pursuant to the Agreement.




Sincerely yours,




                                                                           




OMRIX BIOPHARMACEUTICALS LTD.




 









 





APPENDIX L1

DRAFT OF AUTONOMOUS GUARANTEE




NAME OF THE BANK




For the attention of:



OMRIX BIOPHARMACEUTICALS LTD.




Dear Sirs,




Re: Letter of Bank Guarantee, no. ___________ 





     1. At the request of S&A DESIGN AND CONSTRUCTION LTD. (hereinafter: the “Contractor”), we, the
undersigned, hereby guarantee to you to make payment of any amount up to the total amount in
New Israel Shekels that is equivalent to US$ ___(in words: ___US
dollars) (hereinafter: the “Guarantee Amount”) plus the VAT duly applicable.



     The Guarantee Amount shall be linked to the exchange rate of the US dollar in respect of
the date of actual payment upon such terms of payment and linkage as set forth below:




	 	1.1	 	The exchange rate of the US dollar means the representative rate of the
dollar as published from time to time by the Bank of Israel, in respect of the
payment in which any amount shall be paid pursuant to this Guarantee.
	 
	 	1.2	 	At the time of the payment pursuant to this Letter of Guarantee, the
Guarantee Amount shall be paid according to the exchange rate of the US dollar last
published by the Bank of Israel and which is known at the time of the actual payment
(hereinafter: the “New Exchange Rate”). If the New Exchange Rate is higher than the
exchange rate published on the date of the issuance of this Guarantee, which is the
exchange rate of NIS ___per US dollar (hereinafter: the “Base Exchange Rate”), then
the Guarantee Amount shall be deemed to have been increased by the amount which is
equal to the
rate of increase of the New Exchange Rate as compared with




 









 






	 	 	 	the Base Exchange Rate
(hereinafter: the “Increased Guarantee Amount”). Should it transpire that the New
Exchange Rate has dropped as compared with the Base Exchange Rate, then the
Guarantee Amount shall be paid pursuant to the Base Exchange Rate.
	 
	 	1.3	 	If the exchange rate which shall be published by the Bank of Israel in
respect of the date of actual payment of any amount pursuant to this Guarantee shall
be higher than the New Exchange Rate, then linkage differentials shall be added, as
arise from the exchange rate in respect of the date on which the actual payment was
made pursuant to this Letter Guarantee, and they shall be paid on the date of
determination of the exchange rate in respect of the date on which the actual payment
was made.






	2.	 	We shall pay, on your first demand, not later than seven days from the date of receipt by us
of your written demand, any amount which is set forth in the demand, provided that it shall
not exceed the Increased Guarantee Amount, without your being required to first demand the
payment from the Contractor or to provide reasons for your demand.






	3.	 	This Guarantee shall remain in effect until the ___ (inclusive). Any demand pursuant
to this Guarantee must be received by us not later than the aforesaid date.





Sincerely yours,




Name of the Bank.




 









 





APPENDIX L2

DRAFT OF MAINTENANCE GUARANTEE




NAME OF THE BANK




For the attention of:



OMRIX BIOPHARMACEUTICALS LTD.




Dear Sirs,




Re: Letter of Bank Guarantee, no. ___________ 






	1.	 	At the request of S&A DESIGN AND CONSTRUCTION LTD. (hereinafter: the “Contractor”), we, the
undersigned, hereby guarantee to you to make payment of any amount up to the total amount in
New Israel Shekels that is equivalent to US$ ___ (in words: ___ US
dollars) (hereinafter: the “Guarantee Amount”) plus the VAT duly applicable, which you shall
be entitled to collect from the Contractor in connection with the Contractor’s undertakings
during the maintenance period and in connection therewith, all pursuant to the Agreement
dated ___, between you and the Contractor.
	 
	 	 	The Guarantee Amount shall be linked to the exchange rate of the US dollar in respect of
the date of actual payment upon such terms of payment and linkage as set forth below:






	 	1.1	 	The exchange rate of the US dollar means the representative rate of the
dollar as published from time to time by the Bank of Israel, in respect of the
payment in which any amount shall be paid pursuant to this Guarantee.
	 
	 	1.2	 	At the time of the payment pursuant to this Letter of Guarantee, the
Guarantee Amount shall be paid according to the exchange rate of the US dollar last
published by the Bank of Israel and which is known at the time of the actual payment
(hereinafter: the “New Exchange Rate”). If the New Exchange Rate is higher than the
exchange rate published on the date of the
issuance of this Guarantee, which is the exchange rate of NIS ___ per US




 









 






	 	 	 	dollar
(hereinafter: the “Base Exchange Rate”), then the Guarantee Amount shall be deemed
to have been increased by the amount which is equal to the rate of increase of the
New Exchange Rate as compared with the Base Exchange Rate (hereinafter: the
“Increased Guarantee Amount”). Should it transpire that the New Exchange Rate has
dropped as compared with the Base Exchange Rate, then the Guarantee Amount shall
be paid pursuant to the Base Exchange Rate.
	 
	 	1.3	 	If the exchange rate which shall be published by the Bank of Israel in
respect of the date of actual payment of any amount pursuant to this Guarantee shall
be higher than the New Exchange Rate, then linkage differentials shall be added, as
arise from the exchange rate in respect of the date on which the actual payment was
made pursuant to this Letter Guarantee, and they shall be paid on the date of
determination of the exchange rate in respect of the date on which the actual payment
was made.






	2.	 	We shall pay, on your first demand, not later than seven days from the date of receipt by us
of your written demand, any amount which is set forth in the demand, provided that it shall
not exceed the Increased Guarantee Amount.
	 
	3.	 	This Guarantee shall remain in effect until the ___ (inclusive).
	 
	4.	 	In any event of a dispute between you and the Contractor with regard to your right to
receive any amount pursuant to this Guarantee, the validity of this Guarantee shall be
extended from time to time and without needing any notice or request from us to do so, so
that this Guarantee shall remain in full force and effect until a peremptory ruling shall be
presented to the bank, which resolves the dispute between the parties.
	 
	5.	 	Any demand pursuant to this Guarantee must be received by us not later than the aforesaid
date.





Sincerely yours,




Name of the Bank.




 









 







APPENDIX N




SERVICE LEVEL AGREEMENT





	1.	 	Introduction
	 
	 	 	The purpose of this Appendix is to define the Contractor’s level of service and the manner
of the provision of service by the Contractor for all the systems and equipment at the
plant, which were installed and/or constructed by the Contractor as stated in the
Contract. The level of service set forth in this Appendix shall not derogate from the
Contractor’s responsibility for the proper operation of the New Plant, including its
various systems and the equipment installed therein, in accordance with the provisions of
the Contract.
	 
	2.	 	The Maintenance Period
	 
	 	 	The maintenance period is as defined in section 35 of the Contract.
	 
	3.	 	Definitions
	 
	 	 	System — An assembly of electromechanical items which are connected to the control
and/or electricity system for the purpose of the performance of a complex act, as defined
in the parameters.
	 
	 	 	Critical System — A system whose proper functioning is a basic condition for the
existence of the production process at the New Plant.
	 
	 	 	Instrumentation — An electronic component which is used for the measurement and/or
monitoring of a parameter, whether for the purposes of the control of a system or
equipment, or whether for display purposes only.
	 
	 	 	Defect — A failure in the functioning of equipment/ a system / instrumentation or
a mechanical / electrical breakdown of various kinds, and without relating to the reason
for the creation thereof.




 









 






	 	 	Critical Failure / Critical Defect — Any defect or damage which shuts down a
Critical System or any defect or damage which delays or shuts down the production at the
New Plant.
	 
	 	 	Non-Critical Failure — A failure which does not constitute a Critical Failure.
	 
	 	 	False Call — A call to the Contractor to provide a service, when it transpires
that the Contractor is not responsible for the repair of the failure in accordance with
the provisions of the Contract and that stated below in sections 4.1 – 4.3.
	 
	 	 	Failure Response Time — The period of time which passes from the time at which the
Client’s telephone call is made to the Contractor, to the time at which the Contractor
arrives at the site of the New Plant.
	 
	4.	 	Agreement






	 	4.1	 	The Contractor shall be responsible for examining and repairing throughout
the Maintenance Period any defect which causes a failure, even if it is not critical,
in any of the systems of the New Plant, including for the equipment installed
therein, which was caused as the result of the improper performance of the Works by
the Contractor or the use of defective materials or as the result of performance of
the Works in a manner which is not consistent with the Plans (as defined in the
Contract).
	 
	 	4.2	 	The Contractor shall be responsible for examining and repairing throughout
the Maintenance Period any defect in the equipment and/or in the instrumentation at
the New Plant, which was caused as the result of the improper performance of the
Works by the Contractor or the use of defective materials or as the result of
performance of the Works in a manner which is not consistent with the Plans (as
defined in the Contract), provided that the defect does not arise from use or
maintenance by the Client in contravention of the Contractor’s instructions, or from
use which is not consistent with the user instructions which appear in the equipment
manuals that were provided to the Client by the Contractor.




 









 






	 	4.3	 	The Contractor’s responsibility as stated above in sections 4.1 and 4.2
shall not apply in the events of a breakdown or damage that were caused also
due to one ore more of the events set forth below: (a) that were caused by failures
or disruptions whose source is the electricity grid, or any “user failure” arising
from the incorrect use of the instrumentation and/or the equipment; (b) in any event
of the performance of a repair, change of configuration, dismantling, handling of any
type, addition or removal of components or parts by a person who was not authorized
for this purpose, in writing, by the Contractor; (c) as a result of any connection
which was not approved, in advance and in writing, by the Contractor; (d) in any
event of the removal or modification of equipment, of a part or any of its
components, not by the Contractor; (e) as a result of malicious intent, negligence,
abandonment or unreasonable use, including a breakdown or damage as a result of a
breakage, fall or harm of any type; (f) as a result of an external entity or a force
majeure, including conflagration, a lightning strike, hail, earthquake, flooding or
an accident. The obligation to diagnose the source of the failure at the site of the
Project shall apply to the Contractor.
	 
	 	4.4	 	Should the Contractor not give suitable training for the operation and use
of the equipment or of any other system, and should, as a consequence, the Client
and/or an entity on its behalf make incorrect use of the said equipment or systems,
the Contractor shall be responsible for the examination and repair of the failure and
for the replacement of the equipment or system that was damaged, and the provisions
of the Contract and its appendices shall apply to the new/ replaced equipment.
	 
	 	4.5	 	This Appendix shall not apply to the chiller, which is the lessor’s
property, and in respect of which a level of service shall be agreed separately
between the lessor and the Client.
	 
	 	4.6	 	The systems shall be delivered to the “customer” in proper, working
condition, in other words, ready for immediate operation, without requiring any
preliminary act of preparation, including cleaning, purification, etc. The




 









 






	 	 	 	responsibility of the “Contractor” does not include the supply of chemicals and
expendable equipment.
	 
	 	4.7	 	Should the Contractor be ready to deliver the system/ equipment, and should
the Client not allow the delivery of the system, the responsibility shall apply
within two weeks.
	 
	 	4.8	 	Insofar as Systems Being Tested exist whereby, for the purpose of the
commissioning and delivery thereof to the Client, it is necessary to operate other
Systems Being Tested, which have already been delivered to the Client, the Client
shall operate these systems, provided that the use of the systems shall be the
minimal and necessary use, and provided that the said use shall be made after prior
coordination.
	 
	 	4.9	 	The Client shall prepare a list of “Authorized Reporters”, and it is only
these Authorized Reporters who shall be entitled to report failures to the
Contractor.
	 
	 	4.10	 	During the period between the operation and delivery of a system, the
Contractor may turn the system off prior to the delivery, in the event that the
Client did not accept the system within a reasonable period of time, assuming that
there was no reasonable fear that by turning the system off, damage could be caused
thereto.






	5.	 	Failure Response Times
	 
	 	 	Without derogating from the Contractor’s responsibility to repair any breakdown
or damage in accordance with the provisions of the Contract and its appendices
and subject to that stated in section 5.3 below, during the Maintenance Period,
the Contractor shall be required to respond to the Client’s service call
according to the following response times:






	 	5.1	 	Critical Failure


The maximum time for the arrival of a suitable and
skilled professional representative of the Contractor
to the site of the New Plant and for the






 









 





	 	 	 	commencement of the handling of the failure shall be up to five hours from the
time of receipt of the notice at the Contractor’s call center.
	 
	 	5.2	 	Non-Critical Failure


The maximum time for the arrival of a suitable and
skilled professional representative of the Contractor
to the site of the New Plant for the handling of the
failure shall be up to 48 hours from the time of
receipt of the notice at the Contractor’s service
center.

	 
	 	5.3	 	Work on Saturdays, Jewish Festivals (“Unusual Hours”)

In the event of a Critical Failure, the Contractor is
committed to an arrival time, at the site, of within
six hours from the time of receipt of the call at the
Contractor’s service center. Should the entry into
the site of the New Plant for the purpose of
performance of the Works therein during unusual hours
require the obtaining of permits, the Client shall
procure receipt of the permits as required for this
purpose.

	 
	 	5.4	 	For the purpose of compliance with the provisions of this Appendix, the
Contractor shall submit to the Client a list of service providers on behalf of the
Contractor, who shall be available to receive calls from the Client, 24 hours a day,
seven days a week, except for the Day of Atonement. It is agreed that, insofar as
practicable, the Contractor shall resolve failures in the Client’s Computer System by
using remote access, provided that the Contractor’s systems shall have the suitable
protections to ensure the security of the Client’s information, and only authorized
persons shall conduct remote access to the Client’s Computer System, as stated.






	6.	 	The provision of the service for each of the types of the failures shall be implemented in
accordance with the following stages:






	 	6.1	 	Stage A — Identification of the failure by the Contractor.
	 
	 	6.2	 	Stage B — Repair of the failure by the Contractor.




 









 






	 	6.3	 	Stage C — Any failure, even if not critical, which is not resolved within a
reasonable period of time, in keeping with standard industry practice, from the time
of arrival of the Contractor’s representative to the New Plant, shall require the
replacement of the equipment or the system which is the source of the failure, with
replacement equipment or with new equipment, as necessary.
	 
	 	6.4	 	Stage D — Approval, in writing, by the Client of the repair of the failure.






	7.	 	The Contractor undertakes to use its best endeavors and know-how, and to perform any repair
using a skilled and experienced team, continuously, until the failure is repaired.






	8.	 	It is agreed that the Client shall bear the Contractor’s expenses in the event of a false
call, which was proven to be such. The Contractor undertakes to use its reasonable endeavors
to diagnose a false failure as such, prior to the commencement of the repair.
	 
	9.	 	Spare Parts






	 	9.1	 	The Contractor shall provide to the Client a list of spare parts for the
systems and for the equipment, according to the relevant technical specification.
Should, during the Maintenance Period, the Contractor make use of a spare part out of
the said inventory, the Contractor shall be responsible for making up the inventory
by supplying an identical spare part.
	 
	 	9.2	 	In any event of the replacement of defective equipment with other equipment,
the replacement shall not be actually performed without the Client’s prior, written
consent, and without a representative of the Client at the New Plant, who shall
approve the replacement and supervise the type of equipment being replaced.






	10.	 	Service and Maintenance for the Program




 









 






	 	 	The Contractor shall provide the services and the technical support for the Program, in an
exclusive manner or through suppliers and sub-contractors, under the
Contractor’s full and comprehensive responsibility, in accordance with the provisions set
forth above, and also in accordance with the following provisions:






	 	10.1	 	The Contractor shall repair any failure and defect in the Computer System,
which are disrupting or not allowing the continuous and reliable operation of the
system.
	 
	 	10.2	 	The Contractor shall guarantee compatibility between the Program and the
Hardware and the Infrastructure Programs, in such a manner that shall allow the full
and continuous functioning of the system.
	 
	 	10.3	 	The Contractor shall perform works for the installation, compatibility, data
conversion and development, as shall be required for the purpose of upgrading the
Computer System, including the Hardware and the Infrastructure Programs, at the
Client’s request, and for such additional payment as shall be agreed between the
parties.






 










 







APPENDIX O




TRAINING 





	1.	 	Introduction
	 
	 	 	Without derogating from the list of documentation which the Contractor is required to
supply to the Client in accordance with the provisions of Appendix S, including the
validation protocols, the Contractor shall ensure to provide appropriate training, to the
Client’s satisfaction, for the operation, use and maintenance of any of the systems being
installed at the New Plant.
	 
	2.	 	Training






	 	2.1	 	The Contractor shall provide training for each of the systems listed below,
in accordance with the Gant chart and time schedule as shall be agreed between the
parties. The training shall be given by professional and experienced trainers, on the
Contractor’s behalf, who shall be coordinated in advance with the Client, and
representatives of the Client shall be present at the training. With the exception of
the trainers on behalf of the Contractor and the Client’s representatives, no
representatives or other participants on behalf of the Contractor shall be present
during the time of the training, unless the Client gave its prior approval for this
purpose.
	 
	 	2.2	 	Below are details of the systems and the equipment in respect of which the
training shall be provided by the Contractor in accordance with the provisions of
this Appendix:






	 	§	 	CIP system
	 
	 	§	 	WFI system






	 	°	 	PRE
	 
	 	°	 	PRODUCTION
	 
	 	°	 	STORAGE






	 	§	 	PROCESS EQUIPMENT
	 
	 	§	 	Electricity and control
	 
	 	§	 	Clean rooms and HVAC
	 
	 	§	 	UTILITIES
	 
	 	§	 	The laboratory structure (without equipment which shall be supplied by
the Client)
	 
	 	§	 	Computerized systems






 









 









	 	°	 	HMI
	 
	 	°	 	PLC






	 	2.3	 	The training shall be provided in the area of the New Plant, next to the
system being studied, and with the presentation of the suitable drawings, and it
shall include the following subjects:






	 	§	 	A description of the system – a review of the main components.
	 
	 	§	 	A description of the operations of the system.
	 
	 	§	 	Common failures and ways of resolving and dealing with them.
	 
	 	§	 	The manner of maintenance of the system.






	 	2.4	 	The training period shall commence immediately upon the completion of the OQ
process for the System Being Tested by the Client, and in coordination with the
Client, and it shall last for as long as required, from an objective point of view,
for the purpose of the transfer of the content as set forth in section 2.3 above. At
the end of the training, the Contractor shall submit to the Client approval, in
writing, that the training has been provided and that the Client is authorized to
operate the System Being Tested. It is clarified that even after the training ends,
and for a period of 90 days from the date of the termination of the training, the
Contractor shall provide to the Client, at the Client’s request, a trainer who is an
expert in the System Being Tested, for the purpose of providing clarifications and a
response to the Client’s questions.
	 
	 	2.5	 	It is clarified that the training in accordance with the provisions of this
Appendix is included in the Consideration, and the Contractor shall not be entitled
to any additional payment in respect thereof.






 









 





APPENDIX P

CONFIRMATION OF OBTAINING INSURANCE




Date:                                         




For the attention of:

Omrix Biopharmaceuticals Ltd.

(hereinafter: the “Entrepreneur”)




Dear Sirs,





			
	Re:	 	Agreement Dated _______________ (hereinafter: the “Agreement”) Signed Between You and
S&A Design And Construction Ltd. (hereinafter: the “Contractor”) for the Performance and
Management of the Construction of a Plant (hereinafter: the “Project”)




We hereby confirm that as of (date) ___ our company has issued in the Contractor’s name the
insurance policies set forth below, in connection with the services being provided in the course of
the Project:





	1.	 	All-risk insurance which insures loss or damage that may be caused to any property brought to
the Project by or for the Contractor and/or entities on its behalf, without derogating from
the generality of the foregoing, including any professional equipment. The insurance shall
include a clause regarding the waiver of subrogation against the Entrepreneur, provided that
the provisions regarding the waiver of subrogation shall not apply in favor of a person who
caused damage maliciously.






	2.	 	Professional liability insurance, with a limit of liability that is not less than US$
1,000,000 per event and cumulatively for an annual insurance period, in respect of any
professional act or omission by the Contractor and/or an entity on its behalf during and/or in
connection with the performance of the services. The insurance is not subject to any
limitation with regard to a delay or suspension following the insured event, damage to
foundations or the weakening of a support. In addition, the insurance includes an extension in
respect of loss of documents and an extension in




 









 











For negotiating purposes only. Draft dated July 10, 2006.





	 	 	respect of liability due to the non-integrity of any entity on behalf of the Contractor.
The insurance has been extended to indemnify the Entrepreneur in respect of its liability
for acts and/or omissions of the Contractor and entities on its behalf, subject to a
cross-liability clause pursuant to which the insurance shall be deemed to have been drawn
up separately for each of the constituents of the insured party. The said insurance shall
include retroactive application from the date of commencement of the provision of the
services (even if the provision of the services commenced prior to the date of the signing
of the Agreement) and shall remain in full force and effect for a period of discovery of
six months after the expiration of the validity of the insurance.
	 
	3.	 	Product liability insurance with a limit of liability of US$ 1,000,000 per event and
cumulatively for an annual insurance period, which insures liability in respect of a claim
and/or demand filed for the first time during the insurance period in respect of bodily injury
and/or damage to property that may be caused following the Works. The insurance shall be
extended to indemnify the Client and/or the customer in respect of liability that may be
imposed on either of them in connection with bodily injury and/or damage to property that may
be caused following the Works, as stated, without derogating from the Contractor’s liability
insurance vis-à-vis the Client and the customer. The said insurance shall include a
retroactive date which is not later than the date of commencement of the activities of the
Contractor and/or an entity on its behalf at the site, even if such activities shall commence
prior to the signing of the Agreement. The insurance shall include a discovery period of six
months from the end of the validity of the insurance, unless the Contractor obtained
alternative insurance which provides coverage as required by this section.




We hereby confirm that the above-mentioned insurance policies shall have priority over any
insurance obtained by you, with the exception of the Contractor’s Insurance Policies which insure
the Project and which have priority over the insurance policies that appear in this Confirmation,
and we waive any claim and/or demand concerning the contribution of the your insurance. In
addition, we confirm that the said insurance shall not be reduced and shall not be cancelled until
the end of the provision of the services pursuant to the Agreement (and with regard to the
professional liability insurance and the product liability insurance as stated in sections 2 and 3
above, for the entire additional period during which








 









 








For negotiating purposes only. Draft dated July 10, 2006.



the liability
exists pursuant to law) unless notice was provided to you thereof, by registered mail, at least 60
days in advance.



Subject to the terms and exclusions of the original policies, insofar as not expressly modified by
the foregoing.




Sincerely yours,




	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	Insurer’s Signature

	 	Insurer’s Signature
	 	Signatory’s Name
	 	Signatory’s Position






 









 







Appendix Q




Procedure for Means of Fire Prevention.



It is hereby declared and agreed that subject to the terms, exclusions and directives included in
the policy, the coverage shall be extended to loss or damage caused as a direct or indirect result
of fire or explosion, solely upon satisfaction of the requirements set forth below:





	1.	 	No “Hot Works” shall be performed within the Site of the Works, other than in accordance
with that set forth in this Procedure.
	 
	2.	 	The term “Hot Works” means: the performance of any works, which include welding or cutting,
using heat or using open fire.
	 
	3.	 	Any contractor or sub-contractor who has performed its works with the inclusion of “Hot
Works”, shall appoint a person responsible on its behalf (hereinafter: the “Responsible
Person”) whose job shall be to ascertain that Hot Works are not performed in a manner
inconsistent with this Procedure.
	 
	4.	 	Prior to the commencement of the performance of the Hot Works, the Responsible Person shall
patrol the area intended for the performance of the Hot Works and shall ensure the removal of
inflammable materials of any kind, to a radius of at least ten meters from the location of
the performance of the Hot Works, and any permanent objects, which cannot be moved, shall be
covered with a non-flammable cover.
	 
	5.	 	The Responsible Person shall appoint a person who shall serve as a fire detector
(hereinafter: the “Fire Detector”), who shall be equipped with suitable fire-extinguishing
means for extinguishing the inflammable materials situated in the vicinity of the location of
the performance of the Hot Works. The sole job of the said Fire Detector shall be to watch
over the performance of the Hot Works and to act immediately to extinguish any conflagration
that might arise from the performance of the Hot Works, as stated.




 









 






	6.	 	The Fire Detector shall be at the location of the performance of the Hot Works from the
commencement of performance thereof, until the expiration of at least 30
minutes after the completion thereof, in order to ascertain that no sources of
conflagration have remained at the site.
	 
	7.	 	For the avoidance of doubt, it is hereby clarified that non-compliance with this Procedure
by it could prejudice its rights under the insurance policy that was obtained in respect of
the performance of the Project.






 










 






APPENDIX R 

CONFIDENTIALITY UNDERTAKING 




	 	 	 
	Between:

	 	OMRIX BIOPHARMACEUTICALS LTD.
	 

	 	Private company no. 51 – 216605 - 9
	 

	 	Address: Blood Services Building, P.O.B. 888, Tel Hashomer,
	 

	 	Kiryat Ono, 55100
	 

	 	Tel: 03 – 5316535, Fax: 03 – 5350265
	 

	 	(hereinafter: “Omrix”)






of the first part




	 	 	 
	And:

	 	S&A DESIGN AND CONSTRUCTION LTD.
	 

	 	Private company no. 51 – 24102 - 18
	 

	 	Of 4 Hasadna’ot Street, Herzliya Pituach, 64728
	 

	 	Tel: 9716111, Fax: 09 - 9716112
	 

	 	(hereinafter: the “Recipient”)






of the second part




	 	 	 
	WHEREAS:

	 	The Recipient has engaged with Omrix as a contractor for the
performance of works for Omrix or on its behalf;
	 
	 	 
	AND WHEREAS:

	 	In the course of the engagement between the parties, the
Recipient shall perform for Omrix works of the design and
construction of a new plant for the production of medical
products that are manufactured from plasma produced from
human blood, pursuant to the Contract dated ___
(hereinafter: the “Engagement”);
	 
	 	 
	AND WHEREAS:

	 	In the course of the Engagement, the Recipient will be
exposed to secret information relating to Omrix and its
working methods, and it will receive from Omrix and/or will
be exposed to professional material, documents, know-how a
list of customers, and any other information, including
commercial and marketing information and information in
connection with the production process of Omrix’s products,
as set forth below;






 









 






	 	 	 
	AND WHEREAS:

	 	Omrix agrees to provide such information to the Recipient,
provided that the Recipient shall agree to relate to this
information as secret information, in accordance with that
stated in this Agreement;
	 
	 	 
	AND WHEREAS:

	 	It has been clarified to the Recipient that the disclosure of
such information by it or the breach of any of its
undertakings as set forth below shall cause severe damages to
Omrix;
	 
	 	 
	AND WHEREAS:

	 	The Recipient is aware that the information which shall or
has come to its attention in the course of the Engagement is
the property of Omrix, and that it shall not be entitled to
make use thereof after the termination of the Engagement;






The following has therefore been agreed and stipulated between the parties:





	1.	 	The Recipient hereby undertakes:






	 	1.1	 	Not to disclose, show or submit, whether during the period of the Engagement
or thereafter, to any person or entity, any information which it has received and/or
shall receive from Omrix or which reached it in any other manner following and/or in
the course of the Engagement, whether in writing or orally, subject to that stated in
section 1.2 below.
	 
	 	 	 	In this Agreement, “the Information” is:
	 
	 	 	 	Any record, plan, document, map, idea, material on magnetic media of any type (such
as a program or parts thereof), computer outputs, a computer reading language,
slogans, etc.) including information on the production process of Omrix’s products,
trade secrets and information regarding Omrix or in connection with Omrix, its
property, its business and its interests, its financial data, its customers, its
suppliers, its employees, independent contractors which provide services to it, and
the people or entities which are related to Omrix or which come into contact
therewith, including but without derogating from the generality of the foregoing,
the subjects of Omrix’s R&D, production methods, processes, prices, professional
procedures, budgets and investments, calculations, rates, terms of




 









 






	 	 	 	engagement with
customers and suppliers, documents, databases and secrets, but with the exception
of information which the Recipient shall prove (with written proof, with regard to
sub-sections 2 and 3 below) that it is included in one or more of the following
categories: (1) information which is in the public domain or which passed into the
public domain not following an act or omission of the Recipient or an entity on its
behalf; (2) information which is held by the Recipient and/or an entity on its
behalf on the date of the signing of this Confidentiality Undertaking, provided
that it can be proven, with written proof; (3) information which the Recipient
received from a third party, without the duty of confidentiality as stated in this
Agreement being breached and provided that the Recipient shall receive approval, in
writing, from Omrix, that the third party is not committed to confidentiality to
Omrix; (4) information whose disclosure is required by law, provided that the
Recipient gave Omrix prior, written notice of its intention to disclose the
information; (5) information which was developed and/or shall be developed by the
Recipient without use of the secret Information; (6) information whose publication
was approved by Omrix.
	 
	 	1.2	 	To keep confidential, not to disclose and not to submit and/or transfer
and/or sell, whether in writing or orally or in any other manner, the terms pursuant
to which the Engagement is being made and all the Information in connection therewith,
whether the terms that currently exist or the terms which shall exist in the future,
to any entity, except for cases in which the disclosure of the Information is required
for the performance of the Engagement.
	 
	 	 	 	The duty of confidentiality as set forth in this section 1.2 and as set forth in
the other provisions of this Agreement, is absolute and unlimited in time.
	 
	 	1.3	 	Immediately upon the termination of the Engagement, for any reason, or at
Omrix’s first request, whichever is the earlier of the two, to return to Omrix and to
transfer to its possession and/or to destroy, at Omrix’s option, all of the
Information and the copies thereof, of any kind or nature, whether Information
submitted to the Recipient from Omrix or Information which the




 









 






	 	 	 	Recipient deposited or
held itself or through an employee in the course of the
Engagement, and any detail or copy which is in the Recipient’s possession and
control.






	2.	 	Without prejudice to the generality of the foregoing, the Recipient declares and undertakes
(except for cases in which the disclosure of the Information is required for the performance
of the Engagement):






	 	2.1	 	Not to copy and/or permit others and/or not to cause others to reproduce,
copy, photocopy, print or make a magnetic or any other form of copy of the
Information. All of the provisions of this Undertaking shall apply to the copies of
the Information.
	 
	 	2.2	 	To look after the Information carefully and to take all the required
precautions to prevent it from getting lost and/or reaching another.
	 
	 	2.3	 	Not to publish, without Omrix’s prior, written consent, in any form, any
Information which relates to Omrix in any manner.
	 
	 	2.4	 	Not to make any use of the Information, whether itself or through others, and
not to transfer and/or submit any part of the Information to a third party, for any
purpose and for any reason.
	 
	 	2.5	 	To permit Omrix, after prior coordination, to visit the location of the
performance of the Works, including at its offices, at all reasonable times, in order
to check that it is complying with its undertakings pursuant to this Agreement.
	 
	 	2.6	 	To inform Omrix, without delay, of any event in which use was made of the
Information or equipment, in contravention of that stated in these sections.
	 
	 	That stated in sections 1 and 2 above shall apply also to the relations between the
Recipient and its employees, except for cases in which the disclosure of the Information is
required for the performance of the Engagement, or cases in which the Recipient shall be
required, by Omrix, in writing, to act differently from that stated above.




 









 












	3.	 	All the Information, whether Information that shall be submitted to the Recipient by Omrix,
or such Information which shall be deposited or held by the Recipient itself or through
another employee in the course of the Engagement, shall be deemed to be Omrix’s sole property.
It is clarified that the provision, per se, of the Information shall not be deemed to be the
grant of any right to the Recipient, other than the permission to make use of the Information
for the purpose of the Engagement, subject to any law and subject to all the provisions of
this Confidentiality Undertaking and/or any other undertaking.
	 
	4.	 	The Recipient declares that it has been clarified thereto that the fields in which Omrix
engages are exclusive fields, in which Omrix relies on proprietary information.
	 
	5.	 	The Recipient undertakes that if it has engaged and/or shall engage with a competitor of
Omrix, it shall take all the possible means of protection to guarantee that the Information
shall be kept secret as stated in this Agreement, and shall not be revealed in any form to the
said competitor.
	 
	6.	 	Any use of the Information pursuant to the terms of this Agreement by the Recipient is
contingent upon the fact that the Recipient took all the precautions as set forth above in
order to guarantee the protection of the Information, as stated.
	 
	7.	 	The Recipient shall be responsible for compliance with the undertakings of this Agreement by
its employees, and it shall procure the signing by the managers and the engineers on its
behalf who shall work within the Engagement, of a confidentiality undertaking as per the draft
set forth in Appendix A.
	 
	8.	 	Not to employ any of the Contractor’s employees who shall be engaged in the performance of
the Project in the provision of services for a competitor of Omrix regarding the biological
glue product only, for such time that the said employee is employed in the performance of the
Project and for three (3) months thereafter.
	 
	9.	 	The undertakings in this Agreement shall also apply to any part of the Information which was
given to the Recipient prior to the signing of this Agreement by it.




 









 











In Witness Whereof The Parties Hereto Have Hereunto Set Their Hands:





	 	 	 
	 

	 	 
	OMRIX BIOPHARMACEUTICALS LTD.

	 	S&A DESIGN AND CONSTRUCTION LTD.
	By:

	 	By:
	Date:

	 	Date:






 









 






APPENDIX A 

CONFIDENTIALITY UNDERTAKING – THE RECIPIENT’S EMPLOYEES




Date:




OMRIX BIOPHARMACEUTICALS LTD.

Private company no. 51 – 216605 - 9

Blood Services Building, P.O.B. 888, Tel Hashomer, Kiryat Ono, 55100




Dear Sirs,




	 	 	 
	 

	 	Re: CONFIDENTIALITY UNDERTAKING
	 
	 	 
	WHEREAS:

	 	I have been sent on behalf of ___ (the: “Contractor”)
to perform works for Omrix Biopharmaceuticals Ltd.
(hereinafter: “Omrix”), and the Works I shall perform for
Omrix;
	 
	 	 
	AND WHEREAS:

	 	I am aware that during the period of the performance of the
Works for Omrix, I shall be exposed to a great deal of secret
information regarding Omrix and its modes of work, including
commercial and marketing information, working methods and the
production of Omrix’s products, software and technology which
is used by Omrix, Omrix’s customers, and with regard to other
matters at Omrix;
	 
	 	 
	AND WHEREAS:

	 	It has been clarified to me that the disclosure of the
information or the breach of any of the undertakings set
forth below shall cause Omrix damages and that the
performance of the Works for Omrix as stated is contingent
upon compliance with these undertakings;
	 
	 	 
	AND WHEREAS:

	 	I am aware that the information which shall or has come to my
attention in the course of the performance of the Works for
Omrix is the property of Omrix, and that I shall not be
entitled to make use thereof after the termination of my work
for Omrix;






 









 






	 	 	 
	AND WHEREAS:

	 	Omrix has required as a condition for my being allowed to
perform works on behalf of the Contractor by whom I am
employed as an employee, that I shall undertake to maintain
absolute confidentiality during my work for Omrix and after
the termination of my work for Omrix, for any reason, and I
have agreed to make such undertaking, all as set forth in
this Confidentiality Undertaking:






Wherefore, I hereby confirm and undertake the following to you:




Duty of Confidentiality





	1.	 	In this Agreement, “the Information” is:
	 
	 	 	Any record, plan, document, map, idea, material on magnetic media of any type (such as a
program or parts thereof), computer outputs, a computer reading language, slogans, etc.)
including information on the production process of Omrix’s products, trade secrets and
information regarding Omrix or in connection, directly or indirectly, with Omrix, its
property, its business and its interests, its financial data, its customers, its suppliers,
its employees, independent contractors which provide services to it, and the people or
entities which are related to Omrix or which come into contact therewith, including but
without derogating from the generality of the foregoing, the subjects of Omrix’s R&D,
production methods, processes, prices, professional procedures, budgets and investments,
calculations, rates, terms of engagement with customers and suppliers, documents, databases
and secrets, but with the exception of information which the Recipient shall prove (with
written proof, with regard to sub-sections 2 and 3 below) that it is included in one or
more of the following categories: (1) information which is in the public domain or which
passed into the public domain not following an act or omission of the Recipient or an
entity on its behalf; (2) information which is held by the Recipient and/or an entity on
its behalf on the date of the signing of this Confidentiality Undertaking, provided that it
can be proven, with written proof; (3) information which the Recipient received from a
third party, without the duty of confidentiality as stated in this Agreement being breached
and provided that the Recipient shall receive approval, in writing, from Omrix, that the
third party is not committed to confidentiality to Omrix; (4)
information whose disclosure is required by law,




 









 






	 	 	provided that the Recipient gave Omrix
prior, written notice of its intention to disclose the information; (5) information which
was developed and/or shall be developed by the Recipient without use of the secret
Information; (6) information whose publication was approved by Omrix.
	 
	2.	 	To keep the Information absolutely confidential, not to disclose and/or transfer and/or
submit and/or sell the Information or any part thereof, whether in writing or orally or in any
other manner, to any person and/or entity, except as required by the performance of my job in
the course of the performance of the Works for Omrix and pursuant to my superiors’
instructions. The duty of maintaining confidentiality as set forth in this section 2 and as
set forth in the other provisions of this Agreement, is absolute and unlimited in time, and it
shall apply also after the termination of the Engagement, for any reason.
	 
	3.	 	To return to Omrix and to transfer to its possession and/or to destroy, at Omrix’s option,
immediately upon the cessation of performance of the Works for Omrix, for any reason or at
Omrix’s first request, whichever is the earlier of the two, all of the Information and the
copies thereof, of any kind or nature, whether Information that was submitted to me by Omrix
or Information which I held myself, and any item and/or copy found in my possession or control
of any part of Omrix’s property and/or which is included in the Information and/or the items
that appear in section 1 above.
	 
	4.	 	Without prejudice to the generality of the foregoing, I hereby declare and undertake:






	 	4.1	 	Not to copy and/or permit others and/or not to cause another to reproduce,
copy, photocopy, print or make a magnetic or any other form of copy of the
Information.
	 
	 	 	 	All of the provisions of this Undertaking shall apply to the copies of the
Information.
	 
	 	4.2	 	To look after the Information carefully and to take all the required
precautions, as set forth in the Agreement between Omrix and the Contractor, to
prevent it from getting lost and/or reaching another.




 









 






	 	4.3	 	All the Information, whether Information that shall be submitted to me by
Omrix or Information which I shall deposit or which I shall hold myself or through
another employee, in the course of the performance of my work at Omrix and/or
following the performance of my work at Omrix and/or in connection with my work at
Omrix shall be deemed to be Omrix’s exclusive property.
	 
	 	4.4	 	That the provision, per se, of the Information shall not be deemed to be the
grant of any right to me, other than the permission to make use of the Information for
the purpose of the performance of the Works, subject to any law and subject to all the
provisions of this Confidentiality Undertaking and/or any other undertaking.
	 
	 	4.5	 	Not to publish, without Omrix’s prior, written consent, in any form, any part
of the Information which relates to Omrix in any manner.
	 
	 	4.6	 	Not to make any use, except as required by the performance of my job for
Omrix, of the Information, whether myself or through others, and not to transfer
and/or submit any part of the Information to a third party, for any purpose and for
any reason.
	 
	 	4.7	 	To inform my superior and Omrix, without delay, of any event in which use was
made of the Information, in contravention of that stated in these sections.
	 
	 	4.8	 	Not to work on behalf of the Contractor for a competitor of Omrix regarding
the biological glue product only, during the period of my employment in the
performance of the Project and for an additional period of three (3) months
thereafter.






	5.	 	That stated in the above sections shall also apply to the relations between me and the
Contractor’s employees, except for cases in which the disclosure of the Information is
required for the performance of my work for Omrix or the services assigned to me,
or cases in which I shall be required, by Omrix, in writing, to act differently from that
stated above.




 









 












	6.	 	My undertakings in this Agreement shall also apply to any part of the Information which was
given to me prior to my signing of this Agreement.






	7.	 	It has been clarified to me that the fields in which Omrix engages are exclusive fields, in
which Omrix relies on proprietary information.





Signature:                     

Name:                     

Identity No.:                     

Address: