Default on Progress Payment

Our Ref: xxx

Date: xxx

To                           : xxx Construction Engg. Corp. (Middle East) LLC

                                  P. O. Box xxx

  Dubai, U.A.E.

Attention            : Mr. xxx

Project                 : xxx – Zabeeel Second, Dubai, UAE.

Subject                 : Default on Progress Payment

Dear Mr. Chen,

We refer to our previous letters on the subject and xxx replies’

1. Xxx letter No. xxx dated 5^th of May xxxx
2. CSCEC letter No. xxx dated 6^th of May xxxx
3. Xxx letter No. xxx dated 11^th of May xxxx
4. CSCEC letter No. xxx dated 12^th of May xxxx
5. Xxx letter No. xxx dated 19^th of May xxxx
6. CSCEC letter No. xxx dated 21^st of May xxxx
7. Xxx letter No. xxx dated 28^th of May xxxx
8. Xxx letter No. xxx dated 1^st of July xxxx
9. Xxx letter No. xxx dated 26^th of July xxxx

We refer to our previous letters relating to your ongoing defaults on our progress payments.

Payment against IPA No.7

• In your letter Ref. (d) above you have confirmed that you have received payment from the employer on 11 May xxxx for works done in February xxxx. You have also stated in your letter that you consider the due date is 10 July xxxx and you will issue the PDC before this date.
• On the 28^th of June we were extremely surprised to receive the above payment split into two PDCs, the first dated 18 August xxxx and the second dated 10 September xxxx, this 38 days and 60 days delay in payment on your own confirmed payment date of 10 July xxxx and more than 117 days and 140 days respectively from what is allowed for in our Subcontract.
• Your actions above are direct breach of the terms of our Subcontract.

Payment against IPA No.8

• We have also received on the 28^th of June the PDC against IPA No.8 which was submitted on 23 March xxxx. The PDC is dated 10 September xxxx, while this payment is also overdue. The delay is 111 days from what is allowed for in our Subcontract.

Payment against IPA No.9

• We have submitted our IPA No.9 on 22 April xxxx, the due date to receive the PDC in accordance with our subcontract was 4 June xxxx, and due date for payment was 21 June xxxx. The PDC is still not received as of today’s date and this payment is also now delayed. The delay is 44 days from what is allowed for in our Subcontract.

Payment against IPA No.10

• We have submitted our IPA No.10 on 21 May xxxx, the due date to receive the PDC in accordance with our subcontract was 3 July xxxx, and due date for payment was 20 July xxxx. The PDC is still not received as of today’s date and this payment is also now delayed. The delay is 15 days from what is allowed for in our Subcontract.

Certification of IPA No.11

• We have submitted our IPA No.11 on 22 June xxxx, the due date for certification was 20 July xxxx (28 days from IPA). This certification is still not received.

Short certification and detention charges

• We refer to our letter Ref. (e) and all associated correspondence and we request again that you certify these works fully with immediate effect.

Delay in issuing NOC or original signed certificate

• We refer to our letter Ref. (i) and notify you that you have still not released the necessary NOC or original signed certificate to allow us to reduce the Advance Payment Guarantee in accordance with the terms of our Subcontract Agreement.

Your ongoing unilateral actions to differ and delay our payments has put Xxx in extreme financial stress since your actions are directly impacting our cash flow and our ability to maintain our supply chains. This is therefore limiting our ability to maintain healthy levels of production. xxx is held liable for that.

Accordingly, Xxx will not be liable for any delay caused by the above as such delays are on the account of xxx acts. In addition, we reserve our rights under the terms of our Subcontract Agreement for an Extension of Time (EOT) equivalent to the same number of days by which our progress payments are delayed.

In the same line, Xxx will not be held liable for any impact the above may have on the production or delivery of pods, or for any direct or indirect impact this may have on the site progress. The liability resides with xxx.

Xxx is no longer able to sustain such serious delays in payment as this has now restricted our ability to release associated payments to our transport suppliers. Accordingly, we now find ourselves in a position where we can no longer maintain transportation of completed pods to your project.

All rights are reserved

Yours faithfully,

On behalf of xxx  LLC

xxx

Project manager