Response to Failure in completion/achieving Milestone 1

Our Ref: xxx

Date: xxx

To                    :           xxx Mideast

                                   Oman Branch

Attention          :           Mr. xxx Sing

Project             :           xxx Building, Oman

Subject:               Response to Failure in completion/achieving Milestone 1

References:       a) Xxx letter xxx dated 11 April xxx

                              b) Xxx letter xxx dated 27 May xxx

                              c) Xxx letter xxx dated 27 June xxx

                              d) Xxx letter xxx dated 23 May xxx

                              e) Xxx letter xxx dated 10 August xxx

                              f) Xxx letter xxx dated 26 September xxx

                              g) Xxx letter xxx dated 09 December xxx

Dear Sir,

We are in receipt of your letter ref: xxx dated 20 January xxx and we understand that the letter is addressed to all the Subcontractors and not to Xxx specifically, nevertheless, we must make the following clarifications:

We are appalled to receive such a letter from the Main Contractor considering that Pods delivery was completed more than a year ago on 12 December xxx and final approval of all pods in dated 27 April xxx.

• There are no comments in the Engineer letters related to the scope of Xxx. Therefore, the delay notice from the Engineer has no relation with Xxx whatsoever, and any LD/Penalty imposed by the Employer/Engineer to the Contractor cannot under any circumstances be directed to Xxx.

Any attempt to impose such deductions to Xxx is a direct breach of the Contract and will lead to legal consequences.

• We again remind you with reference to our letters (a to g) and the continuous reminders that you remain in a blatant default of your Contractual obligations as detailed below:

Firstly, while the Advance Payment amount has been fully recouped, you are still failing to release our Advance Payment Guarantee and its amendment requested from you in our letter ref (d) since May xxx, and this can no longer be accepted.

We again reserve our right to claim for any and all additional financial charges resulting from your unjustified withholding of our Advance Payment Guarantee since May xxx.

Secondly, our payment for the balance amount of OMR xxx against approved and certified works of December xxx has now been delayed for more than 9 months.

Finally, you are unilaterally withholding a certification for the amount of OMR xxx for delivered and approved pods without valid justification, referring only to potential future snagging works, which is a direct violation of the terms of our Sub-Contract Agreement. The Sub-contract includes retention provisions which address final taking over snags.

Consequently, we request that you immediately remedy your ongoing defaults by:

1) Releasing the Advance Payment Guarantee.

2) Releasing the overdue payment of OMR xxx.

3) Releasing the pending certification of OMR xxx for completed and approved works.

We reserve our rights for an Extension of Time (EOT) equivalent to the same number of days by which our payments are delayed in addition to the delays occurring in progress payments certification as listed above.

We further reserve our rights to claim for any and all damages resulting from your direct actions and your recurring evidenced bad faith in the execution of the Sub-Contract Agreement.

Your prompt action is highly appreciated.

Thanks,

On behalf of Xxx LLC

xxx

Project Manager