STANDARD OPERATION AND MAINTENANCE AGREEMENT

THIS OPERATION AND MAINTENANCE AGREEMENT is made on the

.........................................................20..........BETWEEN............................................................, a
company duly incorporated under the laws of Malaysia and having its registered office at
………………………………………………….………..... (“hereinafter referred to as the “Employer”).

AND

…………………………………………………….....……., a company duly incorporated under the

laws of Malaysia and having its registered office at
………………………………………………………...…… (“hereinafter referred to as the
“Contractor”).

WHEREAS

The Employer is the owner of the Designated Sewerage System (as hereinafter defined) and the
Employer wishes to appoint the Contractor and the Contractor wishes to accept the appointment
to provide the Services more particularly set out in this Agreement upon the terms and conditions
hereinafter appearing.

DEFINITIONS

Definitions

In this Agreement, unless the context otherwise requires:

“Act” means the Water Sewerage Industry Act (WSIA) 2006 including any
statutory modification or re-enactment thereof;

“Agreement” means this Agreement, together with all schedules;

“Contractor” means ....................................................... (name of the company) or its

personal representatives successors and permitted assigns;

“Designated means the Sewerage System belonging to the Employer where the
Sewerage System” operation and maintenance services are required to be provided by the
Contractor under this Agreement;

“Employer” means the ................................................... (name of the Company) or

its personal representatives or successors;

“Sewerage System” means a system incorporating the sewers, disposal pipes, pumping
stations or treatment works and all equipment thereof up to but not
including the private connection pipe;

“License” means the License issued to the Contractor under the Act;

“Services” means the operation and maintenance services to be provided by the

Contractor under this Agreement and as are more particularly described
in Clause 4 herein;

“Payments” means the payments to be made by the Employer to the Contractor as

are set out in Clause 6 for the Services provided under this Agreement;
Interpretation

In this Agreement, unless the context otherwise requires:

a) Words or expressions defined in the Act shall have the same meaning when used herein;

b) Words importing the singular include the plural and vice versa;

c) A reference to any thing includes a part of that thing;

d) Reference to parts, clauses, parties, annexes and schedules are references to parts and
clauses of, and parties, annexes and schedules to this Agreement;

e) Headings are for convenience only and do not affect the interpretation of this Agreement;
and

f) References to RM refer to Ringgit Malaysia.

NOW IT IS HEREBY AGREED AS FOLLOWS:

1. APPOINTMENT OF OPERATION AND MAINTENANCE CONTRACTOR

1.1 Appointment

The Employer hereby appoints the Contractor as its operations and maintenance
contractor to provide the Services more particularly set out in Clause 4 for the Designated
Sewerage System.

1.2 Acceptance

Subject to and in accordance with the terms and conditions of this Agreement, and in
consideration of the mutual covenants and promises herein contained, the Contractor
hereby accepts the appointment and will provide the Services in return for the Payments
to be made by the Employer.

2. TERM

The term or duration of this Agreement shall commence on the date of this Agreement or
the date of the commencement of the Services, whichever is the earlier and shall end at
the expiry of ……….. Years, unless earlier terminated in accordance with the terms of
this Agreement.

3. NEGOTIATION OF A NEW AGREEMENT

Upon the expiry of this Agreement if the Contractor is desirous of renewing this
Agreement for a further term of …….. ( ) years and entering into such an agreement for
a further term of ………. ( ) years from the expiration of this Agreement (“the Renewed
Agreement”), the Contractor shall give to the Employer a notice in writing not less than
three (3 ) months prior to the expiry of this Agreement and subject to the parties agreeing
to the new rates for the Payments, the Employer may, at its election, grant to the
Contractor the Renewed Agreement for such further term of ……… ( ) years and subject
to the same terms, conditions and covenants as are herein contained except that:

3.1 The date of the commencement of the Renewed Agreement shall be that date which is
the day after the expiry of the Term; and
3.2 The expiry of the term of the Renewed Agreement shall be ………… ( ) years from the
date of the commencement of the Renewed Agreement.

4. SERVICES

During the Term, the Contractor shall be responsible for the operation and maintenance
services as are described in Schedule 1 for the operation and maintenance of the
Designated Sewerage System.

5. CHANGES TO THE SCOPE OF THE SERVICES

5.1 Changes only with Consent

Changes to the scope of the Contractor’s obligations under this Agreement may only be
affected by agreement in writing between the Employer and the Contractor.

5.2 Parties to Negotiate

a) If either the Employer or the Contractor wishes to negotiate a change to the

scope of this Agreement, it may give to the other party a written notice of that
intention along with the full details of the changed circumstances leading to such
request and the proposed change.
b) No later than thirty (30) days after receiving the notice in clause 5.2(a) above, the
Employer and the Contractor shall enter into good faith negotiations having
regard to all relevant factors in respect of the proposed change (including without
limitation);
(i)The feasibility of making the proposed change;
(ii)The impact which the change will have on any requirements as to time of this
Agreement.
(iii)Any other information which the Employer and the Contractor reasonably
requires in connection with the change.
c) In the event that a change to the scope of services of this Agreement is agreed,
such change shall be evidenced in writing.

5.3 Changes in the Payments

In the event that there is a change in the scope of this Agreement which affects the
Payments to be made under this Agreement, the Employer and the Contractor shall
make adjustments to the Payments accordingly.

6. PAYMENTS

6.1 In consideration of the Services rendered pursuant to this Agreement, the Employer shall
pay to the Contractor the Payments as agreed between the Employer and Contractor.

6.2 The Contractor shall present an invoice setting out the payment due and the period to
which it relates together with details of any charges for additional work carried out by the
Contractor for the Employer which may then be due and payable.

6.3 The Employer shall pay to the Contractor the amount due in the invoices within fourteen
(14) days from the date of receipt of the invoice by the Employer.

6.4 If the Employer disputes any matter contained in the invoice, it shall pay to the Contractor
all undisputed amounts.
6.5 In the event that during the duration of this Agreement, there is an increase in statutory
contributions (EPF, SOCSO etc.) for labor giving rise to an increase in labor cost, the
Contractor may apply to the Employer for an appropriate increase in the Payments. The
Contractor shall submit all evidence including the relevant calculations. The Employer
shall then pay to the Contractor any increase in the Payments.

7. WATER AND ELECTRICITY

The Employer shall make available normal water and electricity supply (at the Employer’s
cost) that is required for the efficient carrying out of the Services.

8. INSURANCE

8.1 Insurance by Employer

Upon the execution of this Agreement, the Employer shall insure and shall keep insured
at all times the Designated Sewerage System and any adjoining property thereto against
any liabilities, damages, losses or costs which may occur to the Designated Sewerage
System or to the adjoining property or any personal injury or losses to the Contractor’s
employees, agents, servants or to any other third parties which may be suffered as a
result of the execution of the Services or the carrying out of this Agreement.

8.2 Insurance by Contractor

During the duration of the Term, the Contractor shall maintain a contractor’s all risk
insurance policy which would cover all liabilities, losses or damages which may be
suffered or incurred by the Contractor during the execution of the Services. The
insurance shall also cover any damages or compensation payable in respect of or in
consequent of any accident or injury to any workmen or other person in the employment
of the Contractor save and except an accident or injury resulting from any act or default
of the Employer, his agents or servants. The insurance shall continue during the whole of
the time that any persons employed by the Contractor for the Services. It is also the
responsibility of the Contractor to ensure an effective insurance coverage on all the
equipment and all third party liabilities.

8.3 Periods of Insurance

The insurance referred to in Clauses 8.1 and 8.2 above shall be maintained effective for
the Term or until the earlier termination of this Agreement

8.4 Compliance

The Employer and the Contractor shall not permit any act or permit or suffer any
circumstances to exist whereby any of the insurances described in Clauses 8.1 or 8.2
may at any time become void or avoidable.

9. EMPLOYER’S WARRANTY AND INDEMNITY

9.1 The Employer hereby warrants to the Contractor that the Designated Sewerage System
is in good working order and condition and that it has been constructed and built in
accordance with all approved plans and specifications and all regulations and
requirements under the law.

9.2 The Employer hereby also warrants that it shall indemnify and shall keep the Contractor
indemnified at all times and from time to time against all losses damages and costs which
may be suffered or incurred by the Contractor during the duration of the Term if the
 losses, damages or costs suffered or incurred by the Contractor is a result of any defect
or fault in the construction or the building of the Designated Sewerage System or if the
Designated Sewerage System has not been constructed or built in accordance with all
approved plans and specifications and all regulations under the law.

10. CONTRACTOR’S WARRANTY AND INDEMNITY

10.1 The Contractor warrants that it holds a valid license under the WSIA 2006 to perform all
the Services required under this Agreement and the Services to be provided under this
Agreement does not contravene any terms and conditions of the license imposed by the
Commission and the Contractor shall at all times comply with the said terms and
conditions.

10.2 The Contractor shall indemnify the Employer for all losses and damages which the
Employer may suffer in the event that the Contractor breaches any term or condition of
the license.

10.3 The Contractor warrants that it shall comply with all the effluent rules and regulations
imposed under the Environmental Quality Act 1974 during the duration of the Term
PROVIDED ALWAYS THAT this warranty shall only come into effect after ........... ( )
months from the execution of this Agreement.

11. EXCLUSION OF LIABILITY

The Contractor shall not, under any circumstances, be liable for any accidents, injury,
breakage, loss or damage to the Designated Sewerage System or to its equipment
machinery, appliances or property connected therewith, unless such loss or damage is
caused by the negligent acts or omission or commission by the Contractor’s agent,
employees or sub-contractors.

12. FORCE MAJEURE

12.1 Non-Compliance Excused

Neither the Employer nor the Contractor shall be in breach of its obligations under this
Agreement if it is unable to perform its obligations under this Agreement or any part
thereof due to the occurrence of an event of Force Majeure.

12.2 Force Majeure Defined

The expression “Force Majeure” shall mean an event not within the control of the party
affected, which that party is unable to prevent, avoid or remove and shall include;

a) war, hostilities (whether war be declared or not) invasion and of foreign enemies,
rebellion, revolution, insurrection, military or usurped power, civil war, terrorism;

b) ionizing radiation or contamination by radioactivity from any nuclear fuel or from

any nuclear waste, from the combustion of nuclear fuel, radioactive toxic
explosive, or other hazardous properties of any explosive nuclear assembly or
nuclear component thereof;

c) Pressure waves caused by aircraft or other aerial devices traveling at sonic or

supersonic speeds;

d) natural catastrophe including but not limited to earthquake, floods, subsidence,

lightning or any operation of the forces of nature against which an experienced
 operator could not be reasonably have been expected to take effective
precautions;

e) Riot and disorders, strike, lockout, labour unrest or other industrial disturbances
(affecting the performance of this Agreement which are not the fault of the
Employer or the Contractor) which causes, or can reasonably be expected to
cause, either party to fail to comply with its obligations hereunder.

12.3 Force Majeure Event Affecting the Employer or the Contractor

If an event of Force Majeure occurs by reason of which the Employer or the Contractor is
unable to perform its obligations under this Agreement or any part thereof, the Employer
or the Contractor shall immediately inform the other party in writing of the occurrence of
such event of Force Majeure, its consequence and the cessation of such event. The
Employer or the Contractor as the case may be, shall take all reasonable measures to
remove the inability to fulfil the terms of this Agreement with minimum delay.

12.4 No Reliance

Neither party shall be entitled to rely upon the provisions of Section 12.1 if both parties
reasonably determine that the event of Force Majeure has not occurred.

12.5 Termination of Force Majeure

If an event of Force Majeure continues for a period of six (6) months or more and either
party reasonably considers such event of Force Majeure applicable to it to be of such
severity or be continuing for such a period that it effectively frustrates the original
intention of this Agreement, then this Agreement may be terminated by either party.

13. TERMINATION

Unless terminated in accordance with the express provisions of this Agreement, this
Agreement shall be for the duration of the Term.

13.1 Default of the Employer or the Contractor

If either party defaults in any of the following respects, that is to say:

a) commits any breach of the terms or conditions of this Agreement which is notified
in writing by the non-defaulting party to the defaulting party and which is not
rectified by the defaulting party to the non-defaulting party’s satisfaction within a
period of fourteen (14) days of receipt of the written notice by the defaulting party
specifying the breach and requiring it to be remedied;

b) if either party becomes insolvent or receives a petition for winding-up or makes

any arrangement or composition with its creditors; or

c) if either party shall have a receiver appointed over the whole or any part of its
undertaking or assets or cease or threaten to cease to carry on the whole or a
substantial part of its business other than in the course of reconstruction or
amalgamation,

Then this Agreement shall be deemed terminated and neither party shall have
any claim against the other save and except for any antecedent breaches of this
Agreement. The Employer shall however be liable to pay the Contractor the
Payments for all Services rendered up to the day of termination.
14. MISCELLANEOUS

14.1 Arbitration

If any dispute or difference shall arise between the Employer and the Contractor as to the
execution of the Services or any matter or thing of whatsoever nature arising under this
Agreement, then such dispute or difference shall be referred to an Arbitrator within the
meaning of the Arbitration Act 1952 (Revised - 1972) or any statutory modification or re-
enactment thereof for the time being in force and the appointment of the Arbitrator shall
be mutually agreed upon or failing such agreement, the Arbitrator shall be appointed by
the Director of Regional Centre for Arbitration, Kuala Lumpur. The decision of the
Arbitrator shall be final and binding on both parties. The arbitration shall be held at the
Regional Centre for Arbitration at Kuala Lumpur, using the facilities and assistance
available at the Centre.

14.2 Notice

Except as otherwise specified in the Agreement, any notice, demand for information or
documents required or authorized by this Agreement to be given to either party shall be
given in writing and shall be sufficiently given if delivered by facsimile with registered mail
confirmation, or by registered mail or couriered or hand delivered against written receipt,
to the address given below, or to such other address as such party may designate for
itself by notice given in accordance with this Clause. Any such notice shall be effective
only upon actual delivery or receipt thereof. The address and facsimile numbers of each
party are as follows:

To the Contractor : ………………………………………………

Address : ………………………………………………
………………………………………………
……………………………………................

Fax No : …………………………………………........

To the Employer : ………………………………………………

Address : ………………………………………………
………………………………………………
……………………………………................

Fax No : …………………………………………........

Any changes of address shall be notified as indicated above.

14.3 Applicable Law

This Agreement shall be governed by and construed in accordance with the laws of
Malaysia.

14.4 Schedules

All schedules to this Agreement shall form part of this Agreement. In the event of any
conflict or discrepancy between the terms of this Agreement and the terms of the
Schedule, the terms of the Schedule shall prevail for the purposes of the interpretation
and the enforcement of this Agreement.

14.5 Language

All notices or other communications under or in connection with this Agreement shall be
in English.

14.6 Modification

No modification, variation or amendment of this Agreement shall have any legal effect or
force unless such modification, variation or amendment is in writing and executed by the
parties.

14.7 Waiver

The waiver or failure of any party hereto to enforce any right provided for by this
Agreement shall not be deemed a waiver of any further or future right hereunder.

14.8 Severability

If any provision of this Agreement is held to be illegal or invalid under present or future
laws or regulations effective and applicable during the term of this Agreement, such
provision shall be fully severable and this Agreement shall be construed as if such illegal
or invalid provision had never comprised a part of this Agreement, and the remaining
provisions of this Agreement shall remain in full force and effect and shall not be affected
by the illegal or invalid provision or by its severance from this Agreement.

14.9 Costs and Expense

The cost and expense of preparing this Agreement shall be borne by the Employer.
EXECUTED as an Agreement on the date first appearing
SIGNED for and on behalf of)

in the presence of : )

………………………………………….
(Witness)

Name : …………………… Name : ……………………

Designation/Title : …………………… Designation/Title: ……………………
NRIC : …………………… NRIC : ……………………

SIGNED for and on behalf of)

In the presence of : )

………………………………………….
(Witness)

Name : …………………… Name : ……………………

Designation/Title : …………………… Designation/Title: ……………………
NRIC : …………………… NRIC : ……………………