…………………………..LOTOS Petrobaltic S.A.

Contract No. LPB/FH/MK/……../18

Contractno. LPB/FH/MK/…../18

for provision of commissioning services (hereinafter referred to as: “Service Contract”)was concluded on ______in Gdańsk, by and between:

LOTOS Petrobaltic Spółka Akcyjna with its seat in Gdańsk, at ul. StaryDwór 9, 80-758 Gdańsk, entered into the register of entrepreneurs of National Court Register kept by District Court Gdańsk – Północ in Gdańsk, VII Commercial Division, under KRS no. 0000171101, with share capital in amount 111.233.370,00 PLN (paid in full), NIP PL5830003042, REGON 002881387, Management Board comprising: _____, represented by:

______- ______

______-______

hereinafter referred to as the “Awarding Entity”,

and

______ with its seat in ______, at ul. ______, ______, entered into the register of entrepreneurs of National Court Register kept by District Court ______, ____ Commercial Division, under KRS no. ______, with share capital in amount ______PLN (paid in full), NIP ______, REGON ______, Management Board comprising: _____, represented by:

______- ______

______-______

hereinafter referred to as the “Service Provider”

jointly referred to as the “Parties”

Whereas, the Awarding Entity intends to entrust to the Service Provider the performance of Services, specified in detail in Contract Documents,

The Parties hereby agree as follows:

§1

Scope of Services

  1. The Awarding Entity orders and the Service Provider undertakes to provide services for successful management and execution of pre-commissioning, commissioning, start-up, and testing up to operational completion (RFO) (hereinafter: “Services”) of the commissioned “Petrobaltic” Rig (hereinafter: “Rig”).
  2. Services shall be provided both on-shore in “REMONTOWA” yard in Gdansk in Poland, as well as off-shore on the B8 field in the Baltic Sea, Polish Economic Zone.
  3. The provision of Services by Service provider shall take place in three phases:
  1. Phase 1 – Validation and Planning, which shall be executed upon assignment of Service Contract. Services in Phase 1 shall include i.a.:
  1. setting up a Project Completion System (database) for management and progress monitoring of construction (mechanical completion), pre-commissioning and commissioning phases (Awarding Entity will provide an available list of tags per subsystem for Service Provider’s verification, validation and further development),
  2. the database shall cover the whole scope of the “Petrobaltic” rig conversion project, including all sub-systems, systems, areas, tags, items, disciplines,
  3. the database shall consider existing systems and their interface with new systems,
  4. feeding the database with all necessary engineering inputs,
  5. feeding the database with the available construction inputs (mechanical completion ITRs, etc.),
  6. feeding the database with equipment and systems preservation activities and cycles,
  7. The Awarding Entity shall have full rights to use the database during its preparation/updating and upon its completion, including transfer of intellectual property rights to the Rig owner (B8 Sp. z o.o. Baltic Sp. k-a., called hereinafter “B8 SPV” or “Rig Owner”),
  8. the database shall be handed over in the part related to construction phase (mechanical completion) for continuous management by the Awarding Entity and/or its subcontractors,
  9. preparation of detailed pre-commissioning and commissioning plan for sub-systems and systems with consideration of construction activities (including priority of the sub-systems and systems readiness for pre-commissioning and commissioning, commissioning sequences, schedule/skyline),
  10. verification of existing commissioning documentation (including procedures), gap analysis and preparation of list of all necessary documentation to be developed or revised in order to achieve the final target of having the plant commissioned and ready for operation with delivery schedule (MDL). Schedule of documentation delivery to be approved by the Awarding Entity.
  1. Phase 2 – Preparation for Commissioning, which shall be executed upon completion of Phase 1 and prior to commencement of pre-commissioning and commissioning activities in the field (Phase 3). Services in Phase 2 shall include i.a.:
  1. cooperation with the construction contractors for most efficient handover of sub-systems and systems from construction to pre-commissioning and commissioning (sequence, priority setting, scheduling, etc.),
  2. management/updating of the Project Completion System (database) – the part related to construction (mechanical completion) phase to be managed by the Awarding Entity and/or its subcontractors,
  3. management/updating of pre-commissioning and commissioning plan and its continuous management, including activity and resources planning, progress monitoring, remedial actions, recovery plans, alignment with construction schedules, etc.,
  4. development of all necessary pre-commissioning, commissioning, start-up and testing documentation (detailed pre-commissioning and commissioning procedures, start-up procedures, performance testing procedures, etc.), including the missing documentation identified in PHASE 1,
  5. planning of specific pre-commissioning and commissioning activities and required resources for optimum execution of PHASE 3,
  6. verification of spare parts list for pre-commissioning, commissioning and start-up,
  7. planning of demand for consumables, first-fill materials, tools and equipment for pre-commissioning, commissioning and start-up,
  8. planning of demand for assistance to commissioning personnel and vendors’ personnel,
  9. management of equipment and systems preservation activities including update of the database
  10. development of risk analyses related to commissioning, start-up and testing.
  1. Phase 3 – Execution of Pre-Commissioning and Commissioning, which shall be executed upon completion of Phase 2 and availability of first sub-systems and systems for pre-commissioning and commissioning activities and following an agreement with the Awarding Entity to commence those activities. Service Provider’s services shall be performed through pre-commissioning, commissioning, start-up, plant alignment (adjustment), performance testing up to operational completion (hereinafter: “RFO”) of the plant. Operation of the systems can be handed-over to Operations partially one by one. Whole plant will be handed-over to Operations upon Ready For Start-Up (hereinafter: “RFSU”). RFSU Certificate to be issued by Service Provider and approved by Operations. Plant acceptance to be confirmed by Operations after performance testing and upon RFO of the plant. Services in Phase 2 shall include i.a.:
  1. taking over the completed sub-systems and systems from construction (mechanical completion) to pre-commissioning and commissioning by confirmation of readiness for pre-commissioning and commissioning (RFCC – Ready for Commissioning Certificate)
  2. cooperation with the construction contractors for alignment and most efficient handover of sub-systems and systems from construction to pre-commissioning and commissioning (sequence, priority setting, scheduling, etc.),
  3. management/updating of the Project Completion System (database), including progress reporting and monitoring, printing ITRs for execution, uploading completed ITRs, punch-items management, etc.,
  4. management/updating of pre-commissioning and commissioning plan and its continuous management, including activity and resources planning, progress monitoring, remedial actions, recovery plans, alignment with construction schedules, etc.,
  5. management of equipment verification and calibration,
  6. further development/updating of all necessary pre-commissioning, commissioning and start-up documentation as required,
  7. management, supervision and execution of all pre-commissioning, commissioning, start-up and handover activities (systems will be individually handed over to Operations upon completion of their commissioning),
  8. safety management related to pre-commissioning and commissioning (lockout/tagout procedures, etc.),
  9. supervision and approval of site acceptance testing of vendors’ equipment,
  10. testing of the plant for performance, safety, reliability and operability,
  11. management of vendors’ supervision, including planning, mobilization/demobilization, optimization of vendors’ presence and related costs, coordination of vendors’ activities, etc.,
  12. management of assistance to commissioning personnel, including planning, mobilization/demobilization, optimization of related costs, coordination of activities, etc.,
  13. management of demand for consumables, spare parts, first-fill materials, tools/equipment and management of their consumption/involvement, including optimization,
  14. management of equipment and systems preservation activities,
  15. preparation of pre-commissioning and commissioning Final Dossier documentation (both electronic and hard-copy version).
  1. Pursuant to the Service Contract and in the course of its performance, the Awarding Entity orders and the Service Provider undertakes – depending on specific arrangements – to perform Services with the utmost professional diligence, in the scope of and in the manner specified in the Service Contract (including, in particular, Documentation and Appendixes to Service Contract).
  2. The Service Provider shall also deliver and transfer the ownership to the Awarding Entity of any documentation connected with the Services, including, in particular, drawing documentation, operation and maintenance manuals (DTR), facility operation and maintenance manuals, assembly manuals, plans, procedures, risk analyses, etc.(hereinafter: "Service Provider’s Documentation"), and shall grant to the Awarding Entity a licence, in relation to such Service Provider’s Documentation (unless the Parties agree in hereby Contract to the transfer of author’s economic rights to the Awarding Entity), shall grant authorisations on terms and to the extent set forth in the Service Contract.
  3. Apart from the scope of Services asdescribedabove, the list of documents made available to Service Provider constituteAppendix no. 1 to this Contract – Documents List.

§2

General Obligations of the Parties

  1. The Service Provider shall execute the Services in compliance with the terms and conditions hereof, in particular the Technical Documentation, using reliable engineering practices and in compliance with all of the applicable legal provisions, applicable technical standards and norms, as well as the standards and norms of current state of the art, to the best of his experience.
  2. The Awarding Entity - to the extent determined in Contract Documents - is obligated to cooperate with the Service Provider in the performance of the Service Contract, in particular through the provision of necessary arrangements, opinions and permits to the Service Provider. The Awarding Entity's obligation to cooperate should be construed in its narrow meaning; particularly the obligation to support the Service Provider by providing facilities, postponing deadlines, incurring additional expenses not provided for in the Service Contract shall not be derived from this obligation.
  3. The Awarding Entity shall provide access to the Service Provider to the place, within the Rig or elsewhere to implement the Service Contract.
  4. The Awarding Entity is obligated to perform the acceptance of Services without undue delay and to make timely payments in accordance with the principles adopted in the Service Contract.
  5. The Service Provider and its personnel shall observe requirements, principles and procedures of conduct at the Rig or elsewhere the Services are provided.
  6. The Service Provider, while employing its subcontractors for the performance of Services, is obligated - without prejudice to other provisions of the Service Contract - to ensure the observance of the requirements, principles and procedures of conduct at the Rig by the personnel of such entities.
  7. It is hereby agreed that should the Awarding Entity be penalised by whichever authority by imposing on the Awarding Entity the obligation to pay duty, taxes, fines, surcharge, particularly due to the failure of the Service Provider to meet its obligations, imposed on it as the employer, damage to roads, sites or other areas by the Service Provider or its subcontractors, by the Service Provider’s (its subcontractors’) equipment and cars, the Service Provider shall be obligated to reimburse such expenses in full amount to the Awarding Entity within the time limit specified by the Awarding Entity, with interest for late payment.
  8. The Service Provider undertakes to participate – when summoned by the Awarding Entity – in regular meetings arranged by the Awarding Entity and, at separate request of the Awarding Entity, in meetings arranged with the third parties. The absence at meetings of persons in charge on the part of the Service Provider, will be considered as a breach of material provisions of the Service Contract and regardless of that it shall be the basis for encumbering the Service Provider by the Awarding Entity with liquidated damages in the amount specified in Service Contract.
  9. The Service Provider shall closely cooperate with the representatives of the Awarding Entity, particularly with: Awarding Entity’s Representative, Awarding Entity’s Construction Director, Awarding Entity’s Site Manager and Awarding Entity’s Services Managers, Awarding Entity’s Industrial Safety Coordinator and Awarding Entity’s Quality Manager.
  10. In case of failure, the Service Provider is obligated to notify the Awarding Entity immediately of such event and in case of failure due to the fault of the Service Provider, the Service Provider shall be obligated to remove such failure and to remove any damage arising as a result thereof. If such damage is not removed, the Awarding Entity, at its discretion, may remove such damage or order the removal of such damage to a third party, at the expense and risk of the Service Provider, adding to the cost thereof, the administrative cost of 15% (fifteen percent) gross of the performance of such service.
  11. The Service Provider is obligated to repair possible damage to the existing infrastructure which has occurred in the course of rendering of the Services and any other damage inflicted on third parties. In such case, the Service Provider undertakes to repair such damage within the time limit indicated by the Awarding Entity. If the Service Provider does not proceed to remove the damage within 3 (three) days or does not perform it within the time limit indicated by the Awarding Entity, the Awarding Entity may, at its discretion, repair or order such repair to a third party, at the expense and risk of the Service Provider, adding to the cost thereof, the surcharge of 15% (fifteen percent) gross of the performance of such service.
  12. The Service Provider may not, without a prior, written consent of the Awarding Entity, transfer rights or obligations under the Service Contract or any part thereof to a third party.
  13. If required by the object of the Services, the Technical Documentation will be delivered by Awarding Entity, unless the Service Contract states otherwise. The Service Provider is responsible for the preparation of the entire procedures and other documents necessary to perform the works commissioned thereto upon prior agreement thereof with Awarding Entity.
  14. The Service Provider is responsible for notifying, in writing, the representative of Awarding Entity about any faults or incomplete information and the Technical Documentation pertaining to the Service Contract.
  15. The Service Provider will ensure, by itself and at his own expense, all of the services, materials, equipment and devices necessary to properly perform the Service Contract.
  16. In case the proper execution of the Service Contract requires the transport of objects, the Service Provider shall provide transportation to and from the location specified by Awarding Entity at his own risk and expense.
  17. In case of extending the scope of the Services, the Service Provider shall perform additional services in compliance with the terms and conditions agreed for the execution of a basic scope of Service Contract (unit prices, discounts, etc.)
  18. If the performance of additional services referred to in point 17requires a change in the time limit specified in the Service Agreement, commissioning such additional works requires signing an annex to the Service Agreement by the Parties.
  19. In case of necessity for the proper execution of the Service Contract, Awarding Entityshall ensure:
  20. access to locations, spaces and equipment necessary to properly execute the Services;
  21. vertical and horizontal transportation of the Service Provider's tools, equipment and materials during the unloading and loading at the Awarding Entity’s berth;
  22. access to utilities, in particular to electric power, water, steam and compressed air;
  23. permanent pass for the duration of the Service Contract for the purpose of entering the Awarding Entity’s premises by means of transportation of the Service Provider for the purpose of performing the Services.
  24. The detailed scope of responsibilities of the Parties has been set out in Responsibility Matrix constituting Appendix no. 2 to hereby Contract.

§3

Changes to the Scope of Services

  1. At any time, the Awarding Entity may introduce changes to the specification of any or all of the Services or parts or the scope thereof, or to other provisions of the Service Contract, by submitting a relevant written notice to the Service Provider (hereinafter: ‟Change Order”).
  2. Should changes included in the Change Order,in the Service Provider’s opinion, affect the cost of performance of the Services or deadline of performance of Services, the Service Provider shall inform Awarding Entity about such changes within 7 (seven) days from receiving such Change Order, under the threat of losing the possibility of referring to such circumstances later. The Price - subject to the provisions of the previous sentence - shall bechanged in proportion to the scope of change, measured using the value indicated in the Price Breakdown (Appendix to Service Contract) unless the value of additional Services or elements thereof were worth less than 2 % (two percent) of the value of the Price. If the Price Breakdown does not include the data detailed enough to calculate the increase of the Price, the Price shall be increased on the basis of market rates.The deadline will be changed by the Awarding Entity taking into account the technical conditions for the performance of services covered by such Change Order.
  3. Should the Service Provider receive from the Awarding Entity the Change Order including the obligation to discontinue the performance of particular Services, the Service Provider will not be authorised or obligated to perform such Services and the Price shall be decreased accordingly by the value of such Services using the value indicated in the PriceBreakdown (Appendix to Service Contract). In relation to the discontinuance of performing particular Services, the Service Provider shall not have the right to request any remuneration or compensation connected with the absence of performance of Services.

§4

Remuneration and Payment Terms

  1. The Awarding Entity, hereby, agrees to pay to the Service Provider the price for the complete and proper performance of obligations set out in the Service Contract. The estimated net price amounts to ………EUR […] (in words: […]) (“Price”), and final Service Contract value will be calculated in accordance with the following rates or pro-rata thereof and durations confirmed by Awarding Entity’s representative:
  2. Phase 1 - lump sum of:...... …..,00 EUR
  3. Phase 2 - monthly lump sum rate of: ...... …..,00 EUR
  4. Phase 3 - monthly lump sum rate of: ...... …..,00 EUR
  5. Standby rate before Phase 2 - monthly lump sum rate of: ...... …..,00 EUR
  6. Standby rate before Phase 3 - monthly lump sum rate of:...... …..,00 EUR
  7. Mobilisation and demobilisation charge for the whole commissioning management team in case standby before Phase 3 occurs - lump sum of: …..,00 EUR
  8. Discount applicable to 1st month of Phase 3 performance that exceed the time limit specified in Implementation Schedule 20,00%
  9. Discount applicable to 2ndand following months of Phase 3 performance that exceed the time limit specified in Implementation Schedule 50,00%
  10. The Price shall be increased by due VAT in the scope and in the amount consistent with applicable regulations.
  11. The Price will be paid within 30 (thirty) days from the delivery of the correctly issued VAT invoice to the Awarding Entity at the address indicated in the National Court Register, by bank transfer to the bank account of the Service Provider no. ……………………….