1- INTRODUCTION: Alkhafji Joint Operations - KJO on behalf of ( Aramco Gulf Operations Co. & Kuwait Gulf Oil Co. ) hereinafter referred to as (THE COMPANY) Invites Saudi and Kuwaiti merchants hereinafter referred to as (THE VENDOR) to submit their bids for the supply of materials as per the attached technical specifications and in accordance with the following Terms & Conditions.

2- ELIGIBILITY FOR BIDDING: Submitting a proposal is limited to approved Vendors registered with the company, the Vendor should be holding a valid Commercial Registration certificate ( copy should be attached with the bid), in addition Saudi Vendors must submit the following certificates:

- Valid Zakat certificate Issued by the Department of Zakat and Income Tax ( DZIT ), Ministry of Finance.
- Valid certificate from the General Organization For Social Insurance (GOSI) confirming that the Vendor has settled all his dues for the current Hijiry year.

3-SUBMISSIONS OF BIDS:

3A-Bid forms: Bids must be typed in English on the original bid form attached to the tender document.

3B-The Vendor's and Manufacturer's/ supplier's price submitted along with the offer must be firm, valid and irrevocable for ( 90 ) ninety days starting from the tender closing date extendable upon the Company's request.

3C-The Vendor must submit the manufacturer's/supplier's own detailed technical offer (on the manufacturer's/supplier's letterhead), specifications, drawings, catalogues, etc. and materials samples if requested along with his bid. The Company reserves the right to disqualify any offer not supported by the manufacturer's/supplier's own detailed technical offer, specifications and drawings.

3D-The Vendor must quote his best firm delivery period in weeks which will commence from the Purchase Order issuance date.

3E-The Vendor must indicate the full name and address of the manufacturer/ supplier, facsimile, telephone numbers, email address and the country of origin where the material is / will be shipped from.

3F-The Vendor must clearly state any deviation in his offer from the tender technical specifications / requirements, and must be supported by a written statement from the manufacturer clearly detailing and describing the deviation and the alternative if any, otherwise it will be interpreted as a confirmation that the offer fully complies to the tender technical specifications / requirements.

3G-The Vendor must submit only one offer along with each original tender document. The Company will disqualify any bid that contains more than one offer.

3H-Priority in evaluation will be given to total complete quotations, however the Company reserves the right to award to partial offers/select itemized award upon its discretion.

4- CORRESPONDENCE: The Vendor should clearly state in the designated space his full permanent address in Saudi Arabia or Kuwait (Mailing Address, Contact Numbers and E-mail), all correspondence forwarded to this address are considered official and valid.

5- MATERIALS: Bid must be submitted in total conformity to the materials stated in the tender documents, furthermore signing and stamping the tender document shall be considered as the Vendor's total acceptance to supply the materials accordingly.

6- PRICES: The Vendor must submit firm prices in US$ only on the basis of Delivery Duty Paid (DDP) delivered to the Company stores. Prices ( items unit, total and grand total prices ) must include freight charges, insurance, custom duties, and all governmental charges & any other duties or expenses that may incurred during materials supply to Company stores. The company will not reimburse or consider any reimbursement request for any of the charges & duties after submitting of bids, or adding its amount to the bid's total amount after the closing date. The company will not permit any changes to the submitted prices due to fluctuation In the international exchange rate which shall be used in materials purchase after the tender closing date.

7- BID BOND:

7A-The Vendor must submit a bid bond equal to ( 2% ) of the total value of his offer in one of the following forms:
- Certified Cheque.
- Bank Guarantee.

7B-Cheques and Bank Guarantees must be drawn in favor of

- Aramco Gulf Operations Co., if presented by a Saudi Vendor

- Kuwait Gulf Oil Co., if presented by a Kuwaiti Vendor.

Bank Guarantees must be issued by a Saudi or a Kuwaiti Bank on behalf of the Vendor. The Bank Guarantee must be valid for the duration of the offer Ninety ( 90 ) days starting from the tender closing date. The Company will not accept Bid Bond presented by the manufacturers/suppliers or any other party on behalf of the Vendor. Offers without a Bank Guarantee or a certified cheque or a Bid Bond presented in a form different than what is listed above will be disqualified.

7C-Personal Cheques will not be accepted as bid bonds. The Company shall disqualify any bid that includes personal cheque.

8- ACCEPTANCE OF BIDS:

8A-Offers of lowest prices which complies to the technical specifications stipulated in the tender documents will be accepted. Nevertheless, the company reserves the right to give preference to a higher price, partial or itemized awarding, or cancel the tender without providing any reasons.

8B-The Company shall consider shortest delivery period as a preference during evaluation of bids submitted if the Company deems delivery period is a criteria.

8C-If the Company designate a specific delivery period, the vendor must adhere to.

9- PERFORMANCE BOND:

9A-The successful Vendor who is awarded the tender must submit a Performance Bond equal to 10% of the total amount of the Purchase Order issued by a Saudi or a Kuwaiti Bank drawn in favor of:

- Aramco Gulf Operations Co., if presented by a Saudi Vendor

- Kuwait Gulf Oil Co., if presented by a Kuwaiti Vendor.

If the Vendor does not submit the Performance Bond within a maximum period of seven (7) working days from the award notification date, the following applies : - The Vendor is considered withdrawn. - The Bid Bond will be confiscated. - Vendor is subject to the company's penalties. Performance Bond presented in a form different than what is listed above will not be considered.

9B-The Performance Bond must be valid for the delivery period stated on the purchase order plus a further ninety ( 90 ) days.

9C- Certified or personal cheques will not be accepted as Performance Bond.

10- AMENDMENT OF PURCHASE ORDER QUANTITIES: The Company reserves the right to increase or decrease the items quantity stated in the Purchase Order up to 20% ( Twenty % ) subject to the Vendor's confirmation.

11- ASSIGNMENT AND SUBCONTRACTING: The successful Vendor must not subcontract or assign whole or part of his duties or obligations stated on the purchase order to a third party. If the successful Vendor subcontracts or assigns whole or part of his duties or obligations stated on the purchase order to a third party the Company reserves the right to cancel the purchase order and confiscate the Performance Bond.

12- MATERIALS SUPPLY, INSPECTION, AND RECEIPT:

12.1A-The Vendor must strictly adhere to the following during materials supply without any changes or modifications as specified in the Company Purchase Order:

12.1B- Items specifications.

12.1C- Designated manufacturer name.

12.1D- Delivery period (must not exceed the quoted delivery period in the Vendor's offer).

12.1E- Location of delivery stated in the purchase order ( The Company store ).

12.2A- Vendor must submit to the company order confirmation from the manufacturer confirming that he has received and accepted the purchase order issued by the Company accompanied with a detail production schedule, dates of shipment and arrival (ETD & ETA).

12.2B-Vendor must submit the manufacturer's drawings to the Company for approval prior to production and Material Test Certificate for approval after production.

12.2C-Materials placed in order may be subject to a third party inspection nominated by the Company and on the Company's account. However, the Company reserves the right to reject the delivered and inspected material if it does not meet the order technical specifications and requirements.

12.2D-If the ordered material by the Company falls within the Saudi Arabian Standards Organization ( SASO )categorized items, the Vendor must obtain and submit a certificate from SASO stating that ordered materials meets SASO standards. For further references, the Vendor may refer to the following web site to identify SASO material classification: www.saso.org.sa.

12.2E-Items will be subject to inspection by the Company or by another party designated by the company upon delivery at site. If the items do not meet Company's requirements as ordered, they will be rejected. The Vendor must remove rejected items immediately and replace them with correct material in a period that will be designated by the Vendor and accepted by the Company.

12.2F-If any delivered material is found defective within 18 months of delivery, the Vendor must guarantee to replace or repair the materials immediately on his account.

12.2G-The Vendor must replace rejected items within a period accepted by the Company. In the event that the Vendor is unable to fulfill his commitments, the Company reserves the right to procure the rejected items from a different source of Company's discretion and all costs for the procurement of the replaced materials will be deducted in addition to the penalties from the Vendor's financial entitlements at the Company.

13- IMPORT RESTRICTED ITEMS : Custom Directorate in the Kingdom of Saudi Arabia restricts the import of certain items without obtaining the necessary prior approvals and permits from a designated ministry or authority in the Kingdom of Saudi Arabia. For more details on the subject, kindly refer to the Company's authorized Custom Broker at the following address.

- Sulaiman Al-Anezi Forwarding Agency Tel: (00966) 03-766 4666 / 766 4626 Fax: (00966) 03-766 4627

14- LATE DELIVERY PENALTIES: If the Vendor fails to deliver all the required quantities or part thereof or fails to replace material previously rejected on the agreed date of delivery, the Company reserves the right to impose on the Vendor a delay penalty at the rate of 1.5 % (One and a half percent) for every week or part thereof, for up to 10% (Ten Percent) of the total purchase order value. This penalty is imposed upon the occurrence of the delay in delivery, without the need for justifications, warning, notice, or for proving the damage, which is in all cases, shall be considered as having occurred.

15- DEDUCTION FROM AMOUNTS DUE: The Vendor agrees that it is the Company's right to deduct penalties for late deliveries in whole or part, or for replaced material previously rejected in whole or in part without warning or taking any legal actions.

16- CANCELLATION OF PURCHASE ORDER: If the Vendor fails to deliver the material stated in the purchase order within 45 (forty five) days from the delivery date, the company reserves the right to cancel the purchase order and confiscate the performance bond.

17- FORCE MAJEURE: The Vendor must advise the Company in writing if he is unable to perform his obligation due to circumstances beyond his control such as acts of God (storm, earthquake, flood, etc.), war and general strikes. The Vendor's advise of the circumstances must be in writing not later than 14 (Fourteen) days from the occurrence of the circumstances.

18- CUSTOMS DUTIES & CHARGES: The Vendor is obliged to bear all custom duties and charges imposed by Saudi & Kuwaiti laws. The Company reserves the right to deduct such duties and charges from the final payment of the Vendor without his prior approval / consent.

19- PAYMENT: The Company will settle the purchase order amount in US$ within 45 days upon the acceptance of the delivered materials and receiving the original invoice document.

20- LOCATION OF DEPOSITING THE OFFER: Offers must be deposited in the Contracting department's central tender box located at the company main office in Al-Khafji, Kingdom of Saudi Arabia not later than 1300 hours on the tender closing date, furthermore, offers may be forwarded by courier to the following address:

Manager Materials Department Al-Khafji Joint Operations P.O. Box 256 Al-Khafji 31971 Kingdom of Saudi Arabia Tel: (00966 3) 765 5561 , 765 5260

The Company will not accept any offer received after the closing date.

21- CONFLICT OF INTEREST : The Vendor must not be a Company employee, or an immediate family member to any of the Materials Department employees.

22- QUERIES : All queries pertaining either to the attached items description or materials supply shall be forworded to fax No.: (00966 3) 765 5759 or to the following e-mail:

mtdadmin@kjo.com.sa

23- SIGNING & AUTHENTICATION: The Vendor must sign and stamp all the tender document including the General Terms & Conditions and the documents submitted by him, and this shall be considered as the Vendor's total acceptance to deliver the materials exactly as per the technical specifications and the General Terms & Conditions of the tender.

We the undersigned confirm that we have read this materials supply terms and conditions and agree to comply with all its terms.

The Vendor's name:

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Address:

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Authorized Signature:

Company/Establishment Stamp

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