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LETTER HEAD

….. July 2009


No : .........................

PT. ABC……
Jl. Tebet Barat DRAFT LOI
Jakarta 12810

Attn. : …………..

Re : XYZ Project
Letter of Intend for Electrical Works

Dear Sir,

With reference to your quotation dated 14 July 2009, we intend to award you the above
works based on the following terms and conditions:

1. The Accepted Contract Amount shall be Rp ………….. (Rupiah ……………….)


exclusive of VAT but inclusive of all other taxes.

2. This is a lump sum contract and the prices are not subject to fluctuation in the of cost of
materials, labor, fuel, plant, insurance, freight, duties, taxes, exchange rates etc that may
arise during the contract period including extension of time.

3. The commencement date shall be the date of this letter. The completion date shall be …
……………2009.

4. The scope of works shall comprise design, documentation, installation of electrical


works including supply of all materials and accesories for XYZ Project.

5. The design shall be submitted and approved by the Project Manager prior to
construction.

6. The Performance Security shall be 10% of the Contract Amount.

7. The Terms of Payment shall be as follows:

50% - Advance Payment backed by bank guarantee or an insurance bond and valid
until the issuance of Practical Completion.
100% - Progress payment at completion of the works, subject to retention 5%.
5% - Retention, 5% of the Contract Sum at the end of Maintenance Period.
8. The Defect Liability (Maintenance) Period shall be one (1) year from the date of
completion.

1
Pending the execution of a formal agreement between the Employer (PT TTS) and the
Contractor (PT ABC….), this Letter of Intend shall constitute a binding contract between
the Employer and Contractor. Please proceed with your preparation of works.
Please signify your acceptance of this letter and its contents by countersigning and
overwriting with your company seal and ‘materai’, and return both copies to PT. TTS.

Yours faithfully,
PT. TTS

.
Project Manager

We, PT ABC…., agree to all the above terms and conditions

______________________________________
PT. ABC….
Name :

Position : Director

Date : ______________________________