Sixth of October Development and Investment Company Contract No: ALG-04-CC-P76

Contract Amendment 2

CONTRACT AMENDMENT 2

This Contract Amendment is effective on 16 January 2018, by and between:

Sixth of October Development and Investment Company “SODIC” (referred to hereinafter as the
“Employer”), having its place of business located at: KM38 Cairo – Alexandria Desert Road, Sheikh Zayed,
Sixth of October City, Egypt P.O. Box 119 Sheikh Zayed, Egypt;

and:

Rowad Modern Engineering “RME” (referred to hereinafter as the “Contractor”), having its place of
business located at: 61 intersection of El Nahda Street with Street 10, Maadi Sarayat, Cairo;

with the acknowledgement of:

LEEDS Contracting "LEEDS" (referred to hereinafter as the "Nominated MEP Subcontractor") having its
place of business located at 26th July Street, Touristic Zone, Six of October City, Giza, Egypt;

collectively referred to hereinafter as the “Main Parties”.

Whereas the Employer and the Contractor have entered into an Agreement via Contract No. ALG-04-CC-
P76 (hereinafter referred to as the “Contract”) on 24 February 2015, for the execution and completion of
the scope of works described in the said Contract and the remedying of any defects therein (hereinafter
referred to as the “Works”),

whereas the principal Time for Completion of the Works was 15 months, pertinent to Sub-Clause 43.1 of
the Contract Conditions,

whereas the Time for Completion of the Works was revised to be 24 months, pertinent to the
Supplementary Agreement entered into between the Main Parties on 05 April 2015 (i.e.: the completion
date of the Works was revised to be 15 April 2017),

whereas the progress of execution of the Works suffered from several stoppage spells and causes of delay
attributable to the Main Parties and to unforeseeable circumstances owed to third-party(s) as well,

whereas negotiations for Contract closeout (termination) were entered between the Employer and the
Contractor prior to 20 June 2016, which were driven by delay in progress of the Works that was concurrent
with unstable economic conditions, caused by several governmental ordinances and legislations,

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Sixth of October Development and Investment Company Contract No: ALG-04-CC-P76
Contract Amendment 2

whereas the Employer and the Contractor entered into a Contract Perpetuation Agreement on 10 October
2016, which introduced main changes to the nature of the Contract, as stipulated therein and an extension
of Time for Completion of the Works until 20 February 2018, Modified As RME Req Modified As RME
Req
whereas the Employer and the Contractor entered into Contract Amendment # 1 dated 16 March 2017,
which constituted entitlements for compensation amounts to the Contractor, against the additional costs
they incurred, as a result of the events that previously occurred. Modified As RME Req

whereas the additional cost entitlements that were due to the Nominated MEP Subcontractor1, pursuant
to the terms of the signed MEP Package Nomination - LEEDS (Follow-up Letter 2) as issued by the
Contractor via letter reference # RME/SODIC/ALG/2017/0466 dated 07 June 2017 , were settled prior to
conclusion of this agreement, in the total amount of EGP 9,600,000 (nine million and six hundred thousand
Egyptian pounds only), covering the respective devaluation and disruption claims and further inclusive of
all charges, duties, levies, customs, insurances, social insurance and applicable taxes (including namely
“Value Added Tax” VAT on supplied goods and materials that are required for the Works). However, the
settled entitlements are exclusive of the prolongation cost head of claim, which is still pending settlement,

and whereas the Employer disapproved Contractor’s substantiation of entitlement to additional cost,
through several letters, including but not limited to reference # SODIC/RME/AL/12CH/0/410 and
SODIC/RME/AL/12CH/0/447 dated 24 October 2017 and 13 December 2017 respectively. The Main
Parties thereafter entered into negotiations for additional extension of Time for Completion of the Works,
as well as additional cost, prior to conclusion of this agreement.

Now, therefore, the Employer, the Contractor and the Nominated MEP Subcontractor agreed that the
Contract shall be amended to include the following provisions and, that these provisions shall be
controlling as to the rights and obligations of the Main Parties hereto and shall supersede any other
provisions of the Contract to the contrary.

1. In this Contract Amendment, words and expressions shall have the meanings as are respectively
assigned to them in the General Conditions of Contract, unless explicitly stated otherwise.
Modified As RME Req
2. The Main Parties have agreed upon an extension of Time for Completion of the Works in a total
amount of 192 days (i.e.: the revised completion date of the Works shall be 31 August 2018).
Provided that, the dominant majority of works (as detailed in APPENDIX 1) shall be completed by
30 June 2018, in a state ready for soft-opening of the club to its members. Provided that, testing
and commissioning of the Works, including all elctromechanical systems, shall be the only
remaining scope of works by then, and shall continue for two months following the club’s soft-
opening (i.e. until the revised date of completion of the Works: 31 August 2018). New Addition

3. Pertaining to Article 2 above, intermediate milestones are agreed upon, for completion of the

1 Reference is made to the settlement minutes of meeting issued to the Contractor via letter reference #
SODIC/RME/AL/12CH/0/0454 dated 27 December 2017.

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 Sixth of October Development and Investment Company Contract No: ALG-04-CC-P76
Contract Amendment 2

specified parts/Sections of the Works, as per the details described in APPENDIX 1 to this Contract
Amendment 2. Given that, these milestones are for progress monitoring purposes and for the
fulfillment of the relevant payments detailed in Articles 6 and 7 hereinafter.
Modified As RME Req New Addition
New Addition
4. The Contractor is to submit a revised Programme, inclusive of all variations, Subcontractors’ works
-Nominated MEP Subcontractor’s works to be included- and inclusive of all relationships with the
other Employer’s contractors’ works in the project. That is to accommodate the agreed upon
revised completion milestones, within 15 days from the latest signing date of this agreement by the
Main Parties’ representatives. Otherwise, the Employer shall have the right to apply a retention of
EGP 200,000 from the Contractor’s due payment(s) under the Contract. Furthermore, if the revised
Programme is not approved within 21 days following submission, then such retention amount shall
not be recovered by the Contractor and shall be considered a remedy for the Employer for non-
compliance of the Contractor with Employer’s requirements.
RME
requested
5. Upon Employer’s request, the Contractor and all Subcontractors are bound to furnish evidence of to delete
procurement and payment for direct materials /equipment necessary for execution of the Works. this
Leeds Comment : this shall not stop invoices (Not included) sentence.
6.
Pertaining to the plethora of notices of claims issued by the Contractor following conclusion of the
RME requested Perpetuation Agreement, including but not limited to the Contractor’s collective letters reference
to ADD # RME/SODIC/ALG/2017/0573 and RME/SODIC/ALG/2017/0602 dated 14 November 2017 and 19
Comment " For December 2017 respectively, also, pertinent to the insufficient particulars received through
RME Only" Contractor’s letter reference # RME/SODIC/ALG/2017/0620 dated 18 January 2018 [APPENDIX 2],
the Parties have discussed the Contractor’s entitlements for compensation against the share of
RME losses and additional expenses incurred by the Contractor as a result of the causes of delay that
reuested hindered progress of the Works -including the indirect costs associated with all variations.
to Modify Accordingly, it was agreed that the Employer shall pay to the Contractor, to cover all such additional SODIC
text " expenses and losses incurred, a total compensation amount of EGP 2,000,000 (two million Egyptian Modified
Except pounds only) inclusive of overheads, general overheads, all taxes including VAT, levies, fees, the criteria
VAT and insurances, social insurance and all add-ons, or such other sums as may be ascertained in of
Social accordance with the Contract Amendment 2, payable to the Contractor upon signature of this installments
insurance agreement by the Main Parties’ representatives. The amount shall be settled on three installments,
detailed as follows:
a. EGP 1,600,000 (one million, six hundred thousand Egyptian pounds only), payable to the
Contractor upon signature of this agreement by the Main Parties’ representatives.
b. EGP 200,000 (two hundred thousand Egyptian pounds only) payable to the Contractor
with January 2018 interim payment.
c. EGP 200,000 (two hundred thousand Egyptian pounds only) payable to the Contractor
with February 2018 interim payment.

7. Additional incentive payments, in the amount of EGP 2,000,000 (two million Egyptian pounds only)

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 Sixth of October Development and Investment Company Contract No: ALG-04-CC-P76
Contract Amendment 2

inclusive of overheads, general overheads, all taxes including VAT, levies, fees, insurances, social
insurance and all add-ons or such other sums as may be ascertained in accordance with Contract
SODIC Amendment 2. Incentive payments are detailed as follows and shall be read in conjunction of the
Modified the milestones’ related scope outlined in APPENDIX 1:
criteria of a. EGP 800,000 (eight hundred thousand Egyptian pounds only) payable to the Contractor
installments only if completion of the required scope of works at milestones 1 and 2 is achieved on or
before 30 April 2018.
b. EGP 1,000,000 (one million and Egyptian pounds only) payable to the Contractor only if
completion of the required scope of works at milestones 1, 2 and 3 is achieved on or
before 30 June 2018, in order to allow for soft opening of the project.
c. EGP 200,000 (two hundred thousand Egyptian pounds only) payable to the Contractor at
Modified as per the date of the Taking-Over Certificate, only if completion of the whole of the Works,
RME including all testing and commissioning activities, is achieved on or before 31 August 2018.
Requirement
and New
8. The landscape finishing variation works package have been agreed upon, between the Employer
addition related
and the Contractor on the basis of 21.1% overhead and profit rate (inclusive of VAT), with reference
to Variations is
added to ERI 19 issued to the Contractor by the Employer through transmittal reference # SODIC/ALG-04-
CC-P76/T/0008-Rev-0, issued to the Contractor on 20 June 2017 and concluded through VAF 19
signed and submitted by the Contractor via letter reference # RME/SODIC/ALG/2018/630 dated 04
February 2018. Any further varied works instructed to be executed by the Employer pertaining to
this specific package of works shall be subject to the same markup percentage. A down-payment
sum shall be made to the Contractor, against an acceptable bank’s letter of guarantee, in the
amount equivalent to 25% of the value of such variation works, which are estimated at EGP
12,684,789 (twelve million, six hundred eighty-four thousand and seven hundred eighty-nine
Egyptian pounds only), including markup and all add-ons. Accordingly, the value of the down-
payment payable is EGP 3,171,197.25 (three million, one hundred seventy-one thousand, one
hundred ninety-seven Egyptian pounds and twenty-five hundredth piasters only).

9. Prior to release of the down-payment, in relation to the aforementioned landscape finishing works
variation, the value of the Contractor’s letter(s) of guarantee forming the “Performance Security”,
shall be increased by the Contractor in an amount that retains the contractual 5% of the increased
Contract Price and shall be valid until 31 August 2019, pursuant to Contract Clauses 10.1
“Performance Security” and 10.2 “Period of Validity of Performance Security”.

10. The Contractor shall maintain and extend his insurance and indemnification obligations towards
the Employer, in accordance with Contract Conditions’ Clauses # 21, 22 and 23, up till 31 August
New Addition 2019, as a condition precedent to settlement of the compensation sum, agreed to be paid to the
Contractor through this agreement.

11. Down-payment(s) shall be made to the Nominated MEP Subcontractor by the Employer, for

SODIC REMOVED THE FOLLOWING CLAUSE " In regard to Particular Conditions of Contract Sub-Clause
P a g e 4 60.10
/ 6 "Time for
Payment", on the third line, "20 days" shall be replaced with "5days".
 Sixth of October Development and Investment Company Contract No: ALG-04-CC-P76
Contract Amendment 2

opening of L/C(s), required for procurement of the major remaining imported goods and/or
equipment, related to varied MEP works. This is subject to Employer’s evaluation of the required
payment(s), pertaining to the Subcontract conditions and/or terms of PO(s) entered into by the
Subcontractor. Also, subject to the availability of sufficient corresponding financial guarantee(s)
delivered by the Subcontractor (acceptable bank cheque(s), L/G or else). Provided that, such
payment(s) shall be free of nomination fees to the Contractor and free of markup over procurement
works. Modification by
SODIC
12. The Main Parties hereby acknowledge that the compensation determined by Article 6 of this
Contract Amendment 2 covers all Contractor’s, Subcontractors’ and Nominated MEP
Subcontractor’s claims and entitlements, with respect to all variations (except variation(s) pending
conclusion), causes of delay, disruption, inflation, fuel prices increase and else reasons that lead to
incurrence of losses and/or additional expenses (direct and/or indirect), whether notified upon or
not, submitted or not, known or unknown, at the effective date of this agreement. Accordingly, the
Contractor and the Nominated MEP Subcontractor hereby discharge the Employer of any costs,
associated with the aforementioned events.

13. This Contract Amendment contains the entire agreement between the Main Parties, in regards to
the matters set forth herein and shall be binding upon and shall take effect to the benefit of the
executors, administrators, personal representatives, legal successors and assignees of each party.

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RME Comment is NOT INCLUDED " till agreement date , and excluding prolongation fees for MEP nominated subcontractors, and
any additional costs raised by ID contractors"

RME request for Additional Clause NOT INCLUDED: Any missing data / modifications or conflict in design shall be
settled and resolved by Main parties , no further than 31st January 2018

RME request for Additional Clause NOT INCLUDED: Additional Clause : The document cycle for all the engineering and
construction submittals in project ; shall be replied within 5 working days by Consultant/Employer

LEEDS Comment is NOT INCLUDED " MEP to present acceptable bank cheques against retention, any VO's amount to be paid
upon the PO payment terms, percentage of progress of work on site to be adjusted according to the actual cost incurred

LEEDS REQUIRMENT not included : Add SODIC & LEEDS Comment not included : back to back with the mep
LEEDS M.O.M sub contractor

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Sixth of October Development and Investment Company Contract No: ALG-04-CC-P76
Contract Amendment 2

In witness whereof, the Main Parties hereto have caused this Contract Amendment 2 to be signed by their
duly authorized representatives as of the day and year written below.

For and on behalf of the Employer “Sixth of October Development & Investment Company” (SODIC)

Name

Signature

Date

The Contractor acknowledges and accepts the terms and conditions of this Contract Amendment 2 for
Contract reference # ALG-04-CC-P76.

For and on behalf of the Contractor “Rowad Modern Engineering” (RME)

Name

Signature

Date

The Nominated MEP Subcontractor acknowledges and accepts the terms and conditions of this Contract
Amendment 2 for Contract reference # ALG-04-CC-P76.

For and on behalf of the Nominated MEP Subcontractor “LEEDS Contracting” (LEEDS)

Name

Signature

Date

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 Sixth of October Development and Investment Company Contract No: ALG-04-CC-P76
Contract Amendment 2

APPENDIX 1
Milestones of Remaining Works

The description of works agreed to be completed within each milestone are described as follows:

SHALL Be  1st Milestone: 31 January 2018:-

Modified " 1,2& 4
1. All parking area and courts; (MEP works , civil and landscape finishing) stages
Only"
finishing at courts area and steps at building5;
2. 2 Guard houses allocated in the entrance and the parking;
3. Facades of Building 3 (for elevations no. 1, 3 & 4 only) and Building 4;
4. MEP works around Training Pool (leakage up to date in the pool hindering
completion of the works);
Achievable Date 5. Completion of Building 5 with snags (completed pending on snags).
30.03.2018
 2nd Milestone: 30 April 2018:-
1. Basement Building 2 (MEP and finishes works for swimming pool equipment, heaters
and fire pumps) (achievable by 30 March 2018);
2. All remaining facades for Building 1 , building 2 and external stairs;
3. All civil Works for the Landscape works.
4. Completion of all internal works for Building 2, building 3 and building 4
5. Completion of the leisure Pool and training Pool (MEP and finishing Works), except:
 Sand filters.
 Swimming pool boilers.
6. All associated Landscape Works around the above buildings including the fountain
and planters.

 3rd Milestone: 30 June 2018:-

1. Completion of all internal works for Building 1;
2. All remaining Landscape Works.
3. All remaining swimming pools’ works (with reference to item # 4 of the 2nd
milestone).

 4th Milestone: 31 August 2018:-

1. Testing an commissioning for all works;
2. Completion of Snags.

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Sixth of October Development and Investment Company Contract No: ALG-04-CC-P76
Contract Amendment 2

APPENDIX 2
The concluding notices of claims and relevant particulars issued by RME, in relation to the agreement
settled by Contract Amendment # 2 are attached hereinafter and listed as follows:

1. RME letter reference # RME/SODIC/ALG/2017/0573 dated 14 November 2017,

2. RME letter reference # RME/SODIC/ALG/2017/0602 dated 19 December 2017,
3. RME letter reference # RME/SODIC/ALG/2017/0620 dated 18 January 2018.
RME required Canceling Referring to this letter

Remark: These letters merely summarizes the heads of claims which the Contractor considers himself
entitled to compensation against. However, the agreed compensation sum through Contract
Amendment 2 shall be deemed to be inclusive of any other heads of claims, which occurred prior to
its effective date, notwithstanding Contractor’s issuance of relevant notice or particulars. That is with
exception of the direct cost of variations that have been instructed to by the Employer and may have
not yet been concluded/settled by the Parties prior to conclusion of Contract Amendment 2.

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