CONTRACTCONTRACT NO.: JU2000E4-DNS-PO-The Buyer: DALIAN SHIPBUILDING INDUSTRY CO.LTD(DSIC)Address: No.1HAIFANG STREET, DALIAN, P.R. ChinaTel: (86-411) 84482798 Fax: (86-411) 84482017The Seller:Address:Tel: Fax:The User: CHINA OILFIELD SERVICES LIMITED (COSL)This Contract is made by and between the Buyer and the Seller; whereby the Buyer agrees to buy and the Seller agrees to sell the under-mentioned commodity according to the terms and conditions stipulated below:1. DETAILS OF COMMODITIESShould the Buyer(s) further order the same Commodity at the same year and next year, the Sellers hereby agree to provide the Commodity with same unit price and quality as describe herein.2. COUNTRY OF ORIGIN AND MANUFACTURER3. PACKINGUnless otherwise specified in Contract, the supplied goods shall be packed by exportstandard protective measures. Such packing shall be suitable for long distance ocean andinland transportation and well protected against dampness, moisture, shocks, rust andrough handling so as to ensure that the goods will safely arrive at the site without anydamage due to the above mentioned reasons.The Seller shall be liable for any rust, damage and loss caused by inadequate or improper packing or protective measures provided by Seller.The Seller shall provide the Buyer the shipping documents together with quarantine certificate for wooden packing materials. Two copies of the each packing list and the quality certificate shall be packed in each package. One copy is inside and the other outside.Packing materials shall not allow using the wooden with skin and worm or any alive egg. 4. SHIPPING MARKThe Seller shall mark on the four adjacent sides of the each package with fadeless paint the package number or serial number of the package, gross weight, net weight, measurement, contract No., port of destination and necessary wordings such as “KEEP AWAY FROM MOISTURE”, “HANDLE WITH CARE”, “THIS SIDE UP” and “KEEP DRY” etc. And the shipping mark:Contract No. JU2000E4-DNS-PO-DALIAN SHIPBUILDING INDUSTRY CO.LTDDalian, P.R.CHINAHULL NO.: JU2000E-04DestinationThe Seller shall mark on two sides of each package which weight is 0.5 ton or more or cubage is one cube meter or more in English with appropriate transportation marks common in international, the “center of gravity” and “point of slinging” in order to facilitate loading, discharging and handling.5. TIME OF SHIPMENT:6. PORT OF SHIPMENT:7. PORT OF DESTINATION: DALIAN, the P.R. CHINA8. INSURANCEa) Under EXW, FOB, FCA and C&F terms, insurance to be covered by the Buyer.b) Under CIF and CIP, insurance to be covered by the Seller with the Buyer as thebeneficiary for 110% of invoice value of the goods shipped against all risks.9. PAYMENTa) By Direct Remittance (T/T)Payment shall be effected by the Buyer, by Telegraphic Transfer within Forty-five (45) business days upon receipt from the Seller of the goods and all supporting documentations, specified in Clause 10 of this Contract and subject to Acceptance Report.b) By Letter of Credit (L/C) 90%①Under Letter of Credit: The Buyer, upon receipt from the Seller of the shippingadvice specified in Clause 12 hereof, shall within 20 calendar days prior to thedate of shipment, opens an irrevocable Letter of Credit with Bank of China,Bank of China, Liaoning Branch, Dalian, China, in favor of the Seller, for 90%of total value of contract. The credit shall be available against Seller’s draft(s)drawn at sight on the opening bank for 100% invoice value accompanied bythe shipping documents specified in Clause 10 hereof. The opening bank shalleffect payment (by telegraphic transfer) against presentation to them ofaforementioned draft(s) and documents. The letter of credit shall be valid untilthe 21th day after the shipment is effected②The Buyer shall pay the remainder of total value of the Contract to the Sellerwithin 60th business days by Telegraphic Transfer (T/T) after acceptance and uponreceipt of a WARRANTY BOND or a Bank Guarantee which amount should equal to10% of total contract value or after the CERTIFICATE OF ACCEPTANCE is presentedby the Buyer. This payment shall be deducted by any penalties incurred in thisContract.Note: the following address is applied to L/C and T/T payment.Beneficiary:Address:Name of Bank:Account No.:Bank Address:Swift Code:Bank Phone & Fax:c) All the banking charges incurred in China shall be borne by the Buyer while allbanking charges incurred outside China shall be borne by the Seller.10. DOCUMENTS(1) Bill of Lading / Airway BillA) In case of sea freightThree originals and two copies clean on board ocean bills of lading marked “FreightPrepaid” (CIF and C&F)/ “Freight to Collect”(FOB), Contract No. and shipping markmade out to order and blank endorsed, notifying the Buyer with typing its completeaddress and telephone number.B) In case of air freightOne original and two copies airway bill marked “Freight Prepaid” (CPT, CIF and C&F)/“Freight to Collect”(FOB), Contract No. and shipping mark and consigned to the Buyer.(2) Invoice in three originals and two copies indicating contract number and shipping mark(in case of more than one shipping mark, the invoice shall be issued separately), made out in details as per the related contract.(3) Packing list in three originals and two copies with indication of shipping weight, shippingmark, numbers of boxes, sizes and invoice number.(4) Certificate of Quality and Quantity in one original and two copies issued by theManufacturers / Seller.(5) Certificates of HEAT TREATMENT in one original issued by Local Authority (such asDepartment of Agriculture, etc.) for conifer solid wood packing.(6) Copy of fax to the Buyer advising particulars of shipment immediately after shipment ismade.(7) Certificate of Origin in one original and two copies.(8) Technical Documents concerned.11. SHIPMENT(1) The Seller shall ship the goods within the shipment time from the port of shipment to the port ofdestination.(2) Trans-shipment and partial shipment are not allowed (unless specified elsewhere in thisContract). All fees related to handling, transportation and Custom clearance shall be borne by the Seller for the shipments beyond which specified in this Contract.(3) A vessel flying/A aircraft painted the flag of the country that the Buyer cannot accept shall notcarry the contracted goods.12. SHIPPING ADVICE●Under payment terms of T/T: Immediately after the goods have beenshipped/dispatched,●Under payment terms of L/C: At least 30 calendar days before the goods are going tobe shipped/dispatched,The Seller shall send the Buyer and the consignee by fax a shipping advice giving particulars including at least:(1) Contract number,(2) Name of the goods,(3) Quantity delivered including number of package, total measurement, gross andnet weight,(4) Total value,(5) Name and sailing/flying date of the carrying vessel/aircraft,(6) Port of departure and destination,(7) In the event of the Buyer being unable to arrange for insurance inconsequence of the Seller failure to send the above advice in time, the Sellershall be held responsible for all the losses thus sustained by the Buyer.13. WARRANTYThe Seller shall guarantee that the commodity hereof is made of the best materials, with first class workmanship, brand new and unused, and complies in all respects with the quality and specification stipulated in the Contract. The Seller shall also bear the responsibility of design disfigurement and wrong under no specified standards. The goods supplied by Seller should be suitable installed and adjusted aboard. The guarantee period shall be thirty (30) months counting from the date on which the commodity arrives at the port of destination or eighteen(18) months from the date of signing of the Delivery and Acceptance Protocol of the Vesselsigned by the Buyer & the Seller, whichever longer one applied. Should the quality, specification or quantity of the goods are found not in conformity with the stipulations of the Contract except those claims for which the insurance company or the owners of the vessel are liable, the guarantee period shall be counted again from the date of replacement or repair stipulated in Clause 14 hereof having been made.14. CLAIMS(1) Within (90) business days after the arrival of the goods at destination, should the quality,specification or quantity be found not in conformity with the stipulations of this contract except those claims for which the insurance company or the owners of the vessel/aircraft are liable, the Buyer shall, on the strength of the Inspection Certificate issued by the China Commodity Inspection Bureau, have the right to claim for replacement with new goods, or for compensation.The Certificate so issued shall be accepted as the base of a claim. The Seller, in accordance with the Buyer’s claim shall be responsible for the immediate elimination of the defects(s), complete or partial replacement of the commodity or shall devaluate the commodity, according to the state of defect(s).(2) In case that the Seller are liable for the discrepancies and a claim is lodged by the Buyerwithin the time-limit of inspection and quality guarantee period as stipulated in Clause 13 of this Contract, the Seller shall settle the claim upon the agreement of the Buyer in one or a combination of the following ways:(3) Agree to the rejection of the goods and refund to the Buyer the value of the goods sorejected in the same currency as contracted herein, and to bear all direct losses and expenses in connection therewith including interest accrued, banking charges, freight, insurance premium, inspection charges, storage, stevedore charges and all other necessary expenses required for the custody and protection of the rejected goods.a) Devalue the goods according to the degree of inferiority, extent of damage andamount of losses suffered by the Buyer.b) Replace with new parts that conform to the specifications, quality, and performance asstipulated in this Contract, and bear all the expenses and direct losses sustained bythe Buyer. The Seller shall, at the same time, guarantee the quality of the replacedparts for a further period according to Clause 13 of this Contract.c) Repair or remove the defects and discrepancies of the goods under this Contract bySeller’ personnel at Seller’s expense, if Seller can not send their personnel to do it,Buyer will have the right to do the repair or removal upon the Seller’s agreement, andSeller shall bear all the costs occurred thereof.(4) The claims above-mentioned shall be regarded as being accepted if the Seller fails toreply within five (5) business days after the Seller receives the Buyer’s claim.15. FORCE MAJEUREThe Seller shall not be held responsible for the delay in shipment or non-delivery of the goods due to Force Majeure, such as war, serious fire, flood, typhoon, earthquake, and other cases which will be recognized by both parties upon agreement as being a case of Force Majeure, which might occur during the process of manufacturing or in the course of loading or transit. The Seller shall advise the Buyer by fax immediately of the occurrence mentioned above and within fourteen days thereafter, the Seller shall send by registered airmail/DHL to the Buyer immediately of the occurrence mentioned above and within fourteen days (Calendar Day) thereafter, the Seller shall send by airmail to the Buyer for their acceptance a certificate of the accident issued by the Competent Government Authorities where the accident occurs as evidence thereof.Under such circumstances the Seller, however, are still under the obligation to take allnecessary measures to hasten the delivery of the goods. In case the accident lasts for more than ten (10) weeks, the Buyer shall have the right to cancel the Contract.16. LATE DELIVERY AND PENALTYShould the Seller fail to make delivery on time as stipulated in the Contract, with the exception of Force Majeure caused specified in Clause 15 of this Contract, the Buyer shall agree to postpone the delivery on condition that the Seller agrees to pay a penalty which shall be deducted by the paying bank from the payment. The penalty, however, shall not exceed 10% of the total value of the goods involved in the late delivery. The rate of penalty is charged at 1% for each Calendar Week. In case the Seller fails to make delivery eight weeks later than the time of shipment stipulated in the Contract, the Buyer shall have the right to cancel the Contract and the Seller, in spite of the cancellation, shall still pay the aforesaid penalty to the Buyer without delay.If the goods delivered is inconsistent with the Buyer approved drawings the Seller should compensate Buyer the cost for the Shipyard rework and/or modification.17. OTHER PENALTIES(1) Seller should submit drawings and documents to Buyer on time as stipulated in theTechnical Agreement after award of this Contract.(2) If the goods delivered is over the weight budget with the Buyer approved drawingsthe Seller should compensate Buyer the one percent (1%) of Contract Price for eachthree percent (3%) of weight increment.(3) If the noise level of the goods is not complied with the standard and/or requirementsstipulated in Attachment B the Seller shall compensate Buyer the cost for the workand/or modification to reduce the level to the standard.18. ARBITRATION(1) Both parties shall settle all disputes arising in execution of or in connection with thisContract through friendly negotiation. In case no settlement can be reached within (30) Calendar days of commencement of such negotiation, the disputes shall be submitted for arbitration.(2) Any dispute in international trade which is referred to formal arbitration under Sub-Clause18. (1) Shall, under any other arbitration is alternatively proposed by Seller at the time ofbid and agreed by the Buyer, finally be settled by China International Economic and Trade Arbitration Commission (CIETAC)in accordance with its arbitration rules/procedures. Unless otherwise agreed by the parties, the official language of arbitration shall be English.(3) The arbitration award shall be final and binding on both parties.(4) The arbitration fee shall be borne by the losing party except as otherwise awarded by theArbitration Commission.(5) In the course of arbitration, the Contract shall be continuously executed except the partunder arbitration.19. CONFIDENTIALITYSeller shall treat all information concerning Buyer’s operations obtained by Seller in thecourse of this inquiry as confidential and shall not divulge any such information to any third party and shall not permit any of its officers, employees or agents to do so.20. TERMINATIONFrom the date of the signature of the Contract and up to five (5)weeks after the date of shipment as stipulated in clause 5 of the Contract, the Buyer is entitled to cancel the Contract by giving the Seller notice in writing. In such event, the Buyer shall compensate the Seller for its costs and damages incurred which compensation is agreed as the sum equivalent to 70% of total Contract value. The compensat ion shall be paid to the Seller’s bank account within fourteen days from the date on which the written notice of cancellation of the Contract is received by the Seller. No cancellation by the Buyer shall be permitted if it occurs more than five (5) weeks after the date of shipment.21. APPLICABLE LAWSBuyer and Seller must comply with all applicable laws of the People’s Republic of China.22. TAXES(1) All taxes in connection with the execution of this Contract levied by the ChineseGovernment on the Buyer in accordance with the tax laws in effect shall be borne by the Buyer.(2) All taxes in connection with the execution of this Contract levied by the ChineseGovernment on the Seller in accordance with the tax laws in effect and the agreement between the Government of th e People’s Republic of China and the Government governing the Seller’s company for the Reciprocal Avoidance of Double T axation and the Prevention of Fiscal Evasion with respect to Taxes on income and Property shall be borne by the Seller.(3) All taxes arising outside of China in connection with the Execution of this Contract shallbe borne by the Seller.23. SPECIAL PROVISIONSAll correspondence between both parties with the execution of the Contract shall be written in the English language.24. IN WITNESS THEREOFThis Contract is signed by each party in ( 4 ) originals, the Buyer holds ( 3 ) original(s), and the Seller holds ( 1 ) original(s).25. IN THE EVENT OF the Buyer’s or Seller’s registered name being changed or the Buyer orSeller becoming a new Buyer as a result of the Buyer’s or the Seller’s organization restructuring, acquisition, merge or public listing during the period of this contract, all the rights, responsibilities and liabilities of the party so affected shall automatically be assigned to the new Buyer that comes into existence therefor. Both parties agree that all the rights and responsibilities under this contract shall not be affected as a result of these occurrences.26. SUPPLEMENT OF CONTRACTThe attachment A , B and C of this contract is the part of indivisibility of this contract.Attachment A:GUARANTEE SERVICE AGREEMENTAttachment B: TECHNICAL AGREEMENTAttachment C: PRICE CHARTThe Buyer:DALIAN SHIPBUILDING INDUSTRY CO.，LTDTyped NameSignature/DateThe Seller:Typed NameSignature/DateThe User:CHINA OILFIELD SERVICES LIMITED (COSL)Typed NameSignature/DateAttachment AGuarantee Service agreementDate:WHEREAS: The Buyer(s) and the Sellers have entered into a purchasing Contract under contract No:for purchasing for JU2000 Jack-up Rig (Hull No. JU2000E-04).NOW, THEREFOR: In consideration of the premise and for other good consideration, not withstanding anything contained in the Contract to the contrary, the parties hereto agree as follows:(1) Sellers shall appoint qualified and skilled guarantee engineer(s) (Engineer) toserve on the JU2000E-04 for a period of working days (Service Period) without any charges to the Buyer(s) for the purpose of guarantee service after selling of Equipment. These guarantee service shall include but not limited to guide, test, inspect, even repairing, if any, and supply necessary parts connection with Equipment. All the tools and meters used by Engineer for guarantee service shall be prepared by Sellers.(2) After Equipment is received by Buyer(s), Sellers should advise Buyer(s) insketch/drawings or instructions the relevant conditions and items to be completed by Buyer(s) as the essential prepare conditions of the guarantee service provided by Sellers.(3) The guarantee service of equipment shall start after the Equipment has arrived inBuyer(s)’s yard. Sel lers shall receive from Buyer(s) an approximate notice by telefax of the roughly traveling schedule together with an invitation for the purpose of Engineer preparing his works and visa.Buyer(s) shall give the Sellers fourteen (14) days approximate notice, and seven (7) days definite notice by telefax of the commencement date of guarantee service of Equipment. Sellers shall promptly acknowledge receipt of such notice.(4) Engineer should arrive in Buyer(s)’s yard on or before the commencement date o fguarantee service, and then to be conducted by the Notifier engaged in Purchasing Division of Buyer(s) to Construction Division of Buyer(s).Should the Sellers fail to arrive in DNS or the location designated by the Sellers on time as stipulated in the Contract, with exception of Force Majeure causes specified in of this Contract, the Buyer(s) shall agree to postpone guarantee service on condition that the Sellers agree to pay a penalty which shall be deducted by the paying bank from the payment under negotiation. The rate of penalty is same as the late delivery of goods.(5) Engineer shall fill in hours-report or journal of service on Vessel during guaranteeservice , such every hours-report or journal shall be confirmed and signed by Engineer and representative of Buyer(s).(6) Engineer should be seemed as a representative of Sellers and well qualified and skilledat the guarantee service of equipment.(7) Before Equipment is accepted and approved onboard by Shipowner /Class Society andBuyer(s), Engineer can not leave yard of Buyer(s), unless it is agreed by both parties hereto.During guarantee service of Equipment, Engineer can not discontinue guarantee service for traveling without the permission of Buyer(s).(8) The Sellers shall guarantee the technical performance of the Equipment and undertaketechnical responsibility. Sellers shall supply the necessary accessories and spare parts of Equipment without any charge to the Buyer(s).(9) In the event that Engineer fails to finish his Guarantee Service onboard within ServicePeriod, then Engineer shall continue to do the guarantee service until Equipment is delivered to Owner / Class Society and Buyer(s) onboard. Buyer(s) and Sellers shall investigate the cause of extension of guarantee service of Equipment. It shall be distinguished the following three situations to confirm the responsibility of both parties hereto:a) If the delay is due to Buyer(s)’s reason, such as: Buyer(s)’s prepare condition dose notconform to the requirement of Sellers provided in paragraph (2) hereto, in this event, Buyer(s) shall pay Seller(s) a amount of USD 100 per eight (8) hours working day as the all total compensation to Buyer(s) for the overdue guarantee service.b) If the delay is due to Sellers’ reason, s uch as Sellers dose not advice Buyer(s)relevant instruction in detail in accordance with the provision of paragraph (2) hereto, or any other reasons, although which are not specified in this Addendum, in such event, the Sellers shall pay the Buyer(s) a mount of USD 100 per eight (8) hours working day for the overdue guarantee service, meanwhile, Buyer(s) shall not pay any costs and expenses in additional for the overdue guarantee service.c) If the delay is due to any force majeure beyond the Sellers’ and Buyer(s)’s control,such as typhoons, tidal waves, hurricanes, storms or similar causes beyond the reasonable control of Buyer(s) and Sellers, in such event, no any payment shall be paid to the other parties hereto if the overdue guarantee service is resulted from force majeure.d) Travelling charges pre round trip(including salary, accommodation, food, air ticketsand sundry expense) and running expense in DNS site(including accommodation, food, long distance calls, miscellaneous cost) shall be for Sellers account.(10) Should Buyer(s) finish commissioning work for the equipment without Sellers’ serviceengineer, all the cost paid by Buyer(s) to Sellers for commissioning shall be refunded to Buyer(s) without any request of demand from the Buyer(s).(11)The sellers qualified and skilled guarantee engineer shall observe the laws and ordersof P. R. China, the rules and regulations of contracted plants during their stay in China.In the case of important reason (such as violating the laws of P. R. China, gross negligence of his duties, incompetence or refusing to work), upon the request of Buyers, the Sellers shall immediately replace such personnel at its own cost.(13)Any dispute arising between Buyer(s) and Sellers shall be solved by reference toArbitration as provided in Purchasing Contract.The Buyer:DALIAN SHIPBUILDING INDUSTRY CO.LTDTyped NameSignature/DateThe Seller:Typed NameSignature/DateThe User:CHINA OILFIELD SERVICES LIMITED (COSL)Typed NameSignature/DateAttachment C942 DRILLING RIG BUILDING PROJECT OF COSLATTACHMENT TO QUOTATIONPRICE CHART1. MASTER CONTRACT PRICELump Sum Price for the following Equipment Supply:•All necessary installation and commissioning parts.•All special tools.•All required documents.•All inspection and testing reports.•Classification.•One year spare parts.•Post-sale service including training, installation guidance and commissioning on site.The Seller shall provide the Buyer with detail supplied equipment list.。