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					GENERAL PROVISIONS
                 FOR

         CONTRACT (I)




              Sep, 2003




  Plant & Equipment Purchasing Dept.
APPLICATION

This General Provisions shall apply to all contracts of POSCO to purchase facilities
equipment and services in connection with the construction of its plants.


POSCO is to treat all business transactions with respect and fairness, based on the POSCO
Code of Business Conduct. All POSCO’s business partners should comply with POSCO’s
commitment to ethics and Korean laws such as environmental, employment, tax, safety and
anti-corruption laws. POSCO will avoid doing business with companies which violate the
above-mentioned POSCO’s policy and relevant Korean laws.




                                               1
                                            CONTENTS

 Article                                                                                     Page

 1. Definitions        -------------------------------------------------------------------     4

 2. Effective Date of Contract           -------------------------------------------------     8

 3. Scope of Contract           ----------------------------------------------------------     9

 4. Contract Price and Payment Terms               ---------------------------------------     10

 5. Construction Work at Site             ------------------------------------------------     12

 6. Supervision          -----------------------------------------------------------------     15

 7. Vessel Arrangement              -----------------------------------------------------      18

 8. Delivery          -------------------------------------------------------------------      19

 9.   Language          -----------------------------------------------------------------      23

10. Packing          -------------------------------------------------------------------       24

11.   Insurance        -----------------------------------------------------------------       25

12. Drawings; Documents                -------------------------------------------------       26

13.   Inspection and Testing during Manufacture                 ------------------------       28

14. Performance Guarantee and Acceptance Tests                     --------------------        30

15.   Liquidated Damages             --------------------------------------------------        35

16. Warranties           -------------------------------------------------------------         36

17. Performance Bond and Refund Bond                    ------------------------------         38

18. Title         ---------------------------------------------------------------------        40



                                                    2
19. Variation         ---------------------------------------------------------------    41

20. Patents         ------------------------------------------------------------------   42

21. Force Majeure           ---------------------------------------------------------    43

22. Arbitration         -------------------------------------------------------------    45

23. Termination and Assurance               -----------------------------------------    46

24. Assignment and Subcontracting                ------------------------------------    49

25. Confidentiality          --------------------------------------------------------    50

26. Taxes and Duties           ------------------------------------------------------    51

27. Visas and Permits            -----------------------------------------------------   52

28. Governing Law             -------------------------------------------------------    53

29.   Local Law Compliance             ----------------------------------------------    54

30. Entire Agreement            -----------------------------------------------------    55

31. Notice         ------------------------------------------------------------------    56

32. Construction of Contract             --------------------------------------------    57

33. Claims; Personal Injury            ----------------------------------------------    58

ANNEX A. Price Breakdown and Delivery Schedule                    -------------------    59

ANNEX B. Specimen              -------------------------------------------------------   60
           (Performance Bond and Refund Bond)

ANNEX C. Liquidated Damages for Failure of
         Performance Guarantee        --------------------------------------             64




                                                   3
                                    1. DEFINITIONS


In the Contract (as defined below) the words and expressions defined below shall have the
meanings assigned to them, except where the context requires otherwise: (in alphabetic order)

Persons or parties shall include firms and corporations and any organization having legal
capacity. The singular also shall include the plural and vice versa where the context requires.



1.1 "Buyer" means POSCO, a corporation organized and existing under the laws of the
    Republic of Korea.



1.2    "Common Technical Specification" means the specifications commonly applicable to
      each sector of the integrated iron and steel plant of the Buyer, which shall be provided by
      the Buyer to the Seller and shall be incorporated into, and made binding as an integral
      part of the Contract, except as otherwise agreed by both parties.



1.3 "Contract" means the contract to be entered into and executed by and between the Buyer
    and the Seller for the execution of the work hereunder, together with the Annexes, the
    Contract Specifications, the Common Technical Specification and all documents to
    which reference has been made herein and therein, including such amendments,
    supplements and /or changes (properly made from time to time by mutual agreement
    between the parties) to the documents constituting this Contract.



1.4 "Contract Price" means the total amount to be paid by the Buyer to the Seller under
    Article 4 hereof, which shall be subject to any valid adjustments made through the
    application of the relevant provisions hereof.



1.5 "Contract Specifications" means Contract Specifications No.               and its addenda
    and/or amendments thereto agreed upon in writing by both parties hereto, all of which
    shall be incorporated into, and made binding as an integral part of the Contract.



1.6 "Day" and "Month" mean a calendar day and month respectively according to the
    Gregorian Calendar.



                                                4
1.7 "Delivery Certificate" means the certificate to be issued by the Buyer when the Delivery
    to Site of the Korean supply portion is made in accordance with Article 8.1 hereof.



1.8 "Delivery at Site" means any delivery on board at the Site at the disposal of the Buyer.
    In this case, all the risks and costs including duties, taxes and other charges arising
    before the delivery point shall be borne by the Seller.



1.9 "Effective Date" means the date on which all the conditions described in Article 2
    hereof have been satisfied.



1.10 "Engineer" means the person designated by the Buyer as engineer, with notification of
     such designation being sent to the Seller, for the purpose of the inspection and testing
     stipulated in Article 13 hereof, or in absence of such notification, the word Engineer
     means the Buyer or its duly authorized representatives.



1.11 "Equipment" means all the machinery, equipment, apparatus, instruments, spare parts
     and materials and all other items which the Seller shall supply under the Contract in
     order to build and operate the Plant as contemplated by the Contract.



1.12 "Erection Equipment" means such tools, tackles, stores and other goods and things as are
     required at the Site for the satisfactory erection of the Plant and not for the permanent
     incorporation into the Plant.



1.13 "Final Acceptance Test" and "Final Acceptance Certificate" have the meanings ascribed
     to them under the Contract and the Contract Specifications.



1.14 "Final Shipment" is deemed to be made on the date of the clean on board ocean vessel
     bill of lading for the last shipment of the Equipment as stated in the relevant delivery
     schedule in case of any foreign supply portion and on the date of the Delivery Certificate
     for the last shipment of the Equipment as stated in the relevant delivery schedule in case
     of any Korean supply portion.




                                              5
1.15 "FOB" and FCA shall have the meanings assigned to them respectively in the
    International Rules for the Interpretation of Trade Terms (INCOTERMS) 2000 as
    amended, except as may be otherwise provided herein.



1.16 "Heavy Weight Cargo" means a cargo with a gross weight exceeding thirty (30) metric
     tons.



1.17 "Lengthy Cargo" means a cargo with a total length exceeding twelve (12) metres.



1.18 "Letter of Credit" means the letter of credit to be issued in accordance with Article 4.2
     hereof.



1.19 "Local Cost" means the cost required for construction of the Plant to be borne and paid
     by the Buyer and not the Seller in Korean won currency hereunder, which shall not
     include the contract amount for the Korean supply portion.



1.20 "Operating Unit" means each of the units of the Plant, which shall be subject to the
     performance test described in Article 14 hereof.



1.21 "Performance Bond" and "Refund Bond" mean the bonds to be provided to the Buyer in
     accordance with Article 17 hereof.



1.22 "Plant" means the plant or the facilities to be designed, engineered, supplied, constructed,
     installed, equipped and operated in                 , Korea, pursuant to the Contract.



1.23 "Preliminary Acceptance Test" and "Preliminary Acceptance Certificate" shall have the
     respective meanings ascribed to them under the Contract and the Contract Specifications.



1.24 "Seller" means any person, organization or consortium to which the Contract has been
     awarded by the Buyer. In case it is deemed necessary, at the request of the Buyer, to
     make a consortium consisting of a Korean partner and a Foreign partner, the scope of



                                               6
     supply of the Equipment and services to be provided by consortium shall be classified as
     the "Korean supply portion" and the "foreign supply portion". "Korean Partner" means
     the consortium member acting as domestic counterpart of the Buyer and supplying the
     Korean supply portion to the Buyer, paid by the Buyer in Korean won currency
     according to Article 4.3 hereof. "Foreign Partner" means the consortium member acting
     as the foreign counterpart of the Buyer and supplying the foreign supply portion to the
     Buyer, paid by the Buyer in foreign currencies according to Article 4.2 hereof.



1.25 "Site" means the place where the Plant is to be constructed as specified in the Contract
     Specifications.



1.26 "Subcontractor" means any person other than the Seller to whom any part of the Seller's
     obligations has been subcontracted by the Seller and the legal representatives, successors
     and assignees of such person.



1.27 "Supervising Services" means the services to be performed by the Supervisors hereunder
     in accordance with Article 6 hereof.



1.28 "Supervisors" means the persons authorized by the Seller to perform the Seller's
    obligations regarding the Supervising Services under the Contract.



1.29 "Target Date" means                    , the day on which, in accordance with the
    construction schedule, the Plant is to be put into operation as defined in the Contract
    Specifications.



1.30 "Unit of Supply" means each item of the Plant established for price break-down and
     delivery schedule purposes as described in Annexes A and B attached hereto.



1.31 "Warranty Period" means the period as defined in Article 16.2 hereof.




                                              7
                     2. EFFECTIVE DATE OF CONTRACT


2.1 The Contract shall become fully effective and binding upon both parties hereto on the
date on which all of the following conditions have occurred and been fulfilled:

       A. Due execution and delivery of the Contract by the duly authorized representatives
          of both parties hereto;

       B. The Buyer's receipt of the Performance Bond and the Refund Bond, referred to in
          Article 17 hereof;

       C. The Seller's receipt and acknowledgement of the Letter of Credit, referred to in
          Article 4.2 hereof, by a prime bank of Korea; and

       D. Other conditions as may be required under the Contract.



2.2 The effectiveness of the Contract shall be subject to the approval thereof and/or issuance
    of import license by the competent authority of the Republic of Korea, if such an
    approval and/or license is required by relevant laws, regulations or acts of the
    government of the Republic of Korea.



2.3 The Buyer and the Seller shall try their best to make the Contract become effective as
    soon as possible.



2.4    If any of the conditions mentioned in Article 2.1 has not been fulfilled within three (3)
      months from the date of the Contract, the Buyer and the Seller shall meet to decide the
      further proceedings in regard to the Contract.




                                               8
                             3. SCOPE OF CONTRACT


3.1 The Seller shall provide the following supplies and services under the terms and
conditions of the Contract as more fully set out in the Contract Specifications:

      A.    Designing and engineering the Plant;
      B.    Manufacturing and delivering the Equipment;
      C.    Providing the Supervising Services;
      D.    Providing all drawings, data, documents, information and manuals necessary for
            the construction, maintenance and operation of the Plant;
      E.    Transferring know-how;
      F.    Training Buyer's personnel; and
      G.    In case of revamping, modifying, modernizing and/or expanding the existing
            plant, engineering the whole plant overall, which shall consist of the existing
            equipment and the Equipment, and providing all drawings, data, documents,
            information and equipment necessary for smooth interfacing of the existing
            equipment and the Equipment, so that the whole plant shall operate in a smooth,
            proper and efficient manner, if applicable.



3.2 The Seller, if composed of more than one (1) person of entity, shall jointly and severally
    take responsibility for the performance of the Plant as set forth in Article 14 hereof. The
    leading company shall assume the primary responsibility for implementing the overall
    obligation under the Contract in order to ensure that the Plant, as a whole, shall operate
    in a smooth, proper and efficient manner. If the Buyer requests for any kind of
    cooperation for the smooth and efficient execution of the Contract, the leading company
    will willingly and amicably cooperate to meet the Buyer's request.



3.3 The apportionment of supply between the Buyer and the Seller is set out in general
    terms in the Contract Specifications. The Seller shall supply, on a Delivery at Site basis
    and at no extra charge, all minor parts that are obviously necessary for the functioning of
    the Plant, if the intention to include is clearly inferred from the Contract though they are
    not explicitly included in the Contract Specifications or drawings.




                                               9
              4. CONTRACT PRICE AND PAYMENT TERMS


4.1 The Contract Price is made on a fixed price basis and consists of the prices for all the
    supplies and services in the Article 3.1 hereof. However, the Contract Price is subject to
    any valid adjustments made through the application of the relevant provisions in the
    Contract.



4.2 Payment For Foreign Supply Portion

      A Equipment
       - Down Payment
         Unless otherwise agreed in the Contract, ten (10) percent of the Equipment price
         shall be paid as down payment by telegraphic transfer within thirty (30) days after
         the effective Date of the Contract and receipt of the Seller's invoice
       - Pro-rata Payment
         Ninety (90) percent of the Equipment price shall be paid pro-rata against shipment
         by an irrevocable and revolving Letter of Credit issued by a prime bank in Seoul,
         Korea. The Letter of Credit shall be issued in favor of the Seller for an amount
         equivalent to ninety (90) percent of the Equipment portion of the Contract Price,
         unless otherwise stated in the Contract, and shall be available for reimbursement
         upon presentation of the beneficiary's sight draft accompanied by the documents set
         forth in Article 8.3, unless otherwise specified in the Contract and/or on the relevant
         Letter of Credit.

      B. Services
         The payment for the services shall be made by means of telegraphic transfer within
         thirty (30) days after receipt by the Buyer of the Seller's invoice together with
         following documents;
       - a man-day report duly confirmed by the Buyer which shows that the contracted
          man-days stipulated in this Contract have been consumed.
       - a copy of Supervisor's passport showing his name, face and passport number and the
          dates of entrance into and departure from Korea
       - other documents, if necessary




                                              10
4.3 Payment For Korean Supply Portion

    The Contract amount for the Korean supply portion shall be paid by the same scheme as
    that of the foreign supply portion in Article 4.2 hereof. The payment shall be made in
    cash in accordance with the Buyer's payment policy within sixty (60) days after the
    Buyer's receipt of the documents specified in Article 8.3.B. for the Equipment and/or
    within sixty (60) days after the Buyer’s receipt of the invoices for the down payment,
    supervising service fee and/or training fee, and so on.



4.4 The Buyer shall bear and pay all banking charges and other expenses incurred inside
    Korea associated with the payment under the Contract. The Seller shall bear and pay all
    banking charges and other expenses incurred outside Korea associated with the payment
    under the Contract.




                                            11
                      5. CONSTRUCTION WORK AT SITE


5.1 The Buyer and the Seller shall fully cooperate with each other to successfully complete
    the construction work at the Site by the Target Date and perform their respectively
    assigned construction work at the Site as stipulated in the Contract Specifications and
    under the terms and conditions set forth hereunder. If the Buyer desires to adjust the
    construction schedule, the Seller shall cooperate to the fullest extent in order to adjust the
    schedule and keep such a revised construction schedule.



5.2    If necessary, the Buyer and the Seller each shall respectively establish an organization
      called the "Construction Team for the Plant" for the construction work at the Site and
      inform each other of its organization and composition, and any subsequent changes of
      them without delay.



5.3 The Buyer and the Seller shall, within a reasonable time frame, provide each other with
    available data and information which are required for the execution of the construction
    work at the Site.



5.4 The Seller shall furnish a list of the Erection Equipment so as to enable the Buyer to
    make available the Erection Equipment at the time required for the execution of the
    construction work at the Site.



5.5 The Seller shall, at its own expense on a Delivery at Site basis, make available such
    erection and testing tools and instruments as are not manufactured in Korea during the
    period of the construction work at the Site, upon the Buyer's prior written request. The
    said tools and instruments shall be reexported from Korea at the expense of the Seller.



5.6 The Buyer shall, at its own expense, provide all the Erection Equipment other than as
    stipulated in Article 5.5, skilled and unskilled labor, haulage, power and other goods and
    services that are necessary for erection of the Plant.



5.7 The Buyer shall be responsible for the proper fencing, lighting, guarding and watching
    of the construction work at the Site during the construction period, and for the proper



                                               12
       construction of temporary roadways and footways during such period, so far as such
       roadways and footways may be rendered necessary by the construction work at the Site.
       The Buyer shall also be responsible for accommodation and protection of the owners and
       occupiers of adjacent property, the general public and others who have a contact with the
       Site.



5.8     The Seller shall provide the services of competent Supervisors with sufficient
       qualification and experience to give instructions to the Buyer's personnel and agents in
       connection with the following matters:

        A. The receiving, unpacking and storing of the Equipment at the Site, if applicable;
        B. The construction of the Plant including civil, mechanical, electrical and structural
           work;
        C. The checking of the accuracy and timeliness of the construction work at the Site,
           including civil work;
        D. The performance test of the Plant under Article 14 hereof;
        E. The providing, in a timely manner, of the Local Cost supplies and services required
            for construction work and commissioning work at the Site;
        F. The implementation of safety measures during the entire period of construction work
            at the Site and during the performance testing; and
        G. Training of the Buyer's personnel at the Site for operation and maintenance



5.9 The Seller shall submit to the Buyer the following documents in accordance with the
    Contract Specifications:

        A. A construction schedule;
        B. A manufacturing schedule;
        C. A monthly report on the progress of manufacturing;
        D. A monthly report on the services provided by the Seller, with comments on the
           results; and
        E. A monthly working schedule of each Supervisor.



5.10     If the Seller fails to use proper skill and care in giving instructions to be carried out by
       the Buyer, wrongfully omits to give such instructions or dispatches unqualified


                                                  13
       Supervisors to the Site, the Seller shall be deemed to have been negligent, subject to the
       provisions of Article 5.11 hereof and liable for the consequences of such negligence.



5.11 The Buyer shall give notice in writing to the Seller of such damage or defect directly
    caused by incorrect instructions given by, or negligence caused by, the Seller, and the
    Seller shall commence to remedy and/or correct such damage or defect immediately. In
    case the Seller does not correct such damage or defect within a reasonable period of time,
    the Buyer may, at the expense of the Seller, remedy or correct such damage or defect. If
    the Seller fails in making payment to the Buyer for such remedy or correction required
    by such damage or defect within thirty (30) days from the date of receipt of the Buyer's
    invoice, the Buyer, at its option, may withdraw an amount equivalent to the said expense
    from the Performance Bond established under Article 17 hereof without prejudice to
    other remedies provided for in this Contract.



5.12      In case repair, making good, replacement or modification is required under the
       provisions of Article 5.11, 12.9, 14.2.E,14.3.E and/or 16.2 hereof, the Seller shall, at its
       own expense, make available at the Site the replacement parts necessary for the
       performance above. The Seller shall bear all the costs for the performance above,
       including, but not limited to, the ocean freight, premium, expenses for inland
       transportation to the Site and customs duties. The Buyer shall arrange, at the Seller's
       expense, customs clearance of the replacement parts and haulage from the port of
       unloading in Korea to the Site and assemble, at the Seller's expense, the materials,
       equipment and labor in the direct possession or employment of the Buyer insofar as they
       are required for the performance above.




                                                 14
                                  6. SUPERVISION


6.1 The Seller shall dispatch Supervisors at its own expense to the Site to supervise the
    works as provided for in Article 5 hereof and to render all related services in accordance
    with the requirements of the Contract Specifications within the total number of
    contracted man-days stipulated in the Contract Specifications.



6.2 Supervisory Period

    The supervisory period shall be counted from the date of arrival at the Site to the date of
    departure from the Site, plus additional traveling time taking into account traveling
    distance or Japanese Supervisors, who shall be given two (2) days maximum for
    round-trip travel and for European or American Supervisors, who shall be given three (3)
    days maximum for round-trip travel, including ;

    - All Sundays and Korean national and local holidays falling within the supervisory
      period; and
    - Travel time outside the Site, in Korea, in connection with the execution of the
      construction work upon the Buyer's request.

    If the man-days exceeding the total number of man-days provided for in Article 6.1
    hereof are attributable to the Seller, the cost of the additional man-days shall be borne by
    the Seller. If the additional man-days are attributable to the Buyer, the cost of the
    additional man-days shall be borne by the Buyer.



6.3 Working Hours

    Supervisors shall work for eight (8) hours a day, including one (1) hour break for lunch,
    six (6) days a week, for a total of forty-two (42) actual working hours per week when
    there is no national or local holidays; however, in case of emergency and/or in case of
    the anticipation of the Target Date delay for reasons not attributable to the Buyer,
    Supervisors shall stay on duty, at the Seller's expense, even if such extra duty causes
    them to work more than eight (8) hours in a day and/or more than six (6) days in a week.
    Supervisors who have stayed at the Site for more than three (3) consecutive months shall
    be entitled to, at the Seller's expense, a leave of not more than five (5) days, which shall
    not be counted as part of the supervisory period under Article 6.1 or 6.2 hereof.

                                              15
     Supervisors who want to take a leave shall consult with the Buyer about the departure
     date and duration of the leave and report to the Buyer in writing before and after such
     leave.



6.4 The Seller may dispatch to, and keep stationed at the Site, at its own expense, one (1) or
    more of the Seller's personnel for administrative and clerical support of Supervisors
    dispatched under Article 6.1 or 6.2 hereof, and such persons shall not be deemed to have
    been dispatched under Article 6.1 or 6.2 hereof.



6.5 The Seller shall submit to the Buyer a dispatching schedule and brief personal resume of
    each Supervisor one (1) month before the first dispatch, giving the expected date of
    arrival, period of stay and supervising field of each Supervisor to be dispatched.
     The Seller shall notify the Buyer in writing of the actual arrival time of each of the
     Supervisors ten (10) days before his or her arrival.



6.6 The Seller shall, before dispatching Supervisors to the Site as provided for in Article 6.1
    or 6.2 hereof, provide, at its own expense, each of them with appropriate international
    life, sickness and accident insurance for the duration of his or her service in Korea,
    which shall cover such Supervisors from the possible risks to the Supervisors of
    accidents and sickness in Korea and provide appropriate compensation therefor.
     The Seller shall bear, and defend and hold the Buyer harmless from all claims and
     liabilities of any kind in connection with any death, sickness or accident of any
     Supervisor.
     The Seller shall have Supervisors present the Buyer with copies of certificates of
     insurance policy upon their arrival at the Site.



6.7 The Buyer shall have the right to evaluate the qualifications and productivity of each
    Supervisor. The Buyer shall have the liberty, by notice in writing to the Seller, to object
    to any Supervisor dispatched to the Site who is guilty of serious misconduct or trouble at
    the Site, or in other parts of Korea, or is deemed unqualified, incompetent or negligent at
    the Buyer's sole discretion. The Seller shall promptly remove and replace such person at
    the Seller's expense within fifteen (15) days after the receipt of such notice from the
    Buyer in such a manner as not to cause any interruption in the carrying out of the
    construction work.




                                              16
6.8 The Buyer shall, at its own expense, provide the Supervisor with the items set forth
    below:

      A. Appropriate office and necessary facilities at the Site
      B. Protection for safety and security during their stay at the Site in connection with the
          supervision work under this Contract.
      C. Medical treatment for first aid for their illness and injuries



6.9 The Buyer shall, at the Seller's expense, assist and/or arrange the following for the
    Supervisors:

      A. Appropriate accommodation;
      B. Use of the Buyer's communication facilities in Korea at regular rates; and
      C. Use of the Buyer's welfare and recreational facilities at the same rates charged to the
         Buyer's employees.



6.10 The Seller shall provide training to the Buyer's personnel in accordance with the
    Contract Specifications at the Seller's and/or its Subcontractor's premises for operation
    and maintenance and other works relating to the Equipment and/or the Plant. The
    training program shall be submitted by the Seller for review by the Buyer prior to the
    commencement of the training.
    The Buyer shall provide for all traveling, accommodation and living expenses of such
    trainees.




                                                17
                            7. VESSEL ARRANGEMENT


7.1 Unless mutually agreed upon by the parties hereto under the terms other than those
    provided on a FOB basis, in accordance with the notice set forth in Article 8.4 hereof, the
    Buyer shall arrange, on a customary, quick dispatch basis, available vessel for smooth
    and safe loading. The Buyer shall, by telex or telefacsimile, inform the Seller of the
    status of vessel arrangement within fourteen (14) days after receipt of the said Seller's
    notice.



7.2    In the event that the Buyer requests the Seller to postpone any shipment of the
      Equipment for more than thirty (30) days from the expected loading date set forth in the
      vessel arrangement request provided for in Article 8.4 hereof, the Buyer shall bear the
      warehouse charges for the period in excess of thirty (30) days. The postponement of
      shipment shall not exceed sixty (60) days from the expected loading date shown in the
      vessel arrangement request. Upon expiration of the maximum sixty (60) days, the Seller
      may arrange for a suitable vessel, the ocean freight of which shall be borne and paid by
      the Buyer. Any demurrage exceeding three (3) days incurred at loading ports because of
      delays in cargo readiness, shall be borne by the Seller.



7.3    In case the vessel fails to arrive at loading port within seven (7) days from the date given
      under Article 7.1 hereof and/or fails to transport all the cargo ready for shipment, the
      Buyer shall be liable, unless otherwise agreed by the both parties hereto, for any costs
      and expenses incurred therefrom.



7.4 The Seller shall, immediately after the completion of each shipment, advise the Buyer,
    by telex or telefacsimile, of the contents of the cargo shipped, the expected date of arrival
    and the means by which the shipping documents were dispatched.




                                                18
                                    8. DELIVERY


8.1 Time and Place

    Unless otherwise agreed upon between both parties hereto, the Seller shall deliver the
    Equipment on the basis of FOB liner loading ports for the Foreign supply portion of the
    Equipment and on the basis of Delivery at Site for the Korean supply portion to be
    transported by truck, railway or vessel in accordance with the delivery schedule.
    If the Buyer desires to adjust the delivery schedule, the Seller shall cooperate to the
    fullest extent in order to adjust the delivery schedule as the Buyer desires.
    The Seller shall not deliver the Equipment more than one (1) month prior to the delivery
    schedule specified in the Contract without the Buyer's prior written approval.
    Each Delivery Certificate shall be issued by the Buyer as of the date of arrival at the Site
    and the date shall be construed as the date of delivery. When the date of arrival at the
    Site falls on non-business days, the date of delivery will be the next business day.
    The said liner loading ports are limited to Felixstowe in England; Le Havre in France;
    Rotterdam in the Netherlands; Antwerp in Belgium (only for container cargo); Hamburg
    and Bremerhaven in Germany; Long Beach in Los Angeles, Seattle, Oakland, New York
    and Savannah in the U.S.A.; and Moji, Yokohama, Kobe, Nagoya and Osaka in Japan;
    provided, however, that the Seller may use loading ports other than those described
    above with the prior written consent of the Buyer.



 8.2 Shipping schedule

     The Seller shall submit to the Buyer five (5) copies of each of the following documents:



       Documents                               Time

     A. Supply List                           Within two (2) months after the
                                                 Effective Date of this Contract

     B. Preliminary                           Two (2) months before the first
         Shipping Schedule                       shipment

     C. Final Shipping Schedule               One (1) month before the actual
                                                 shipment


                                              19
8.3 Transport Documents

     A. Foreign supply portion
        As soon as each shipment, as provided for in this Article, is made, the Seller shall
        send to the Buyer complete sets of documents, five (5) sets via the ship's master and
        five (5) sets by air courier service, each set consisting of the following transport
        documents:
        (1) A clean on board ocean vessel bill of lading;
        (2) A commercial invoice; and
        (3) A packing list.
        In case such documents described above fail to be submitted to the Buyer within
        five (5) days from the arrival date of each shipment at the discharging port, the
        Seller shall bear all costs and expenses incurred therefrom.
        The Seller shall send, as soon as possible after each shipment of the FOB
        Equipment is made, the following documents to the Buyer through the L/C-issuing
        bank:
        (1) A clean on board ocean vessel bill of lading (full set of original and five (5)
            copies);
        (2) A commercial invoice (one (1) original and five (5) copies);
        (3) A packing list (one (1) original and five (5) copies);
        (4) An inspection certificate issued by the manufacturer (one (1) original and five
            (5) copies);
        (5) An inspection certificate issued by the Engineer for the items to be designated
            by the Buyer; and
        (6) Other documents as may be required for customs clearance.
        (7) In case of the shipment of spare parts, spare parts list with the unit price and the
            quantity of each item in detail should be submitted.


      B. Korean supply portion

       The Seller shall send, as soon as possible after each delivery of the Equipment under
       the Korean supply portion is made, the following documents to the Buyer:

        (1) A delivery certificate issued by the Buyer (one (1) original and five (5) copies);
        (2) A commercial invoice (one (1) original and five (5) copies);


                                             20
        (3) A packing list (one (1) original and five (5) copies);
        (4) An inspection certificate issued by the manufacturer (one (1) original and five
            (5) copies); and
        (5) An inspection certificate issued by the Engineer (one (1) original and five (5)
            copies).



8.4 Communication
     A. For the portion of the Equipment to be shipped on a FOB basis from the Seller, the
        Seller shall notify the Buyer of the information necessary for the Buyer's vessel
        arrangement one (1) month before each shipment, including the name of the
        Equipment, the approximate number of packages, the total weight and measurement,
        the loading date, the shipping port and other pertinent information.
        For the Heavy Weight Cargo and Lengthy Cargo, a cargo readiness report, expected
        loading date and description of the cargo shall be sent by the Seller to the Buyer
        three (3) months before the expected loading date.
     B. For the Korean supply portion, the Seller shall notify the Buyer at least two (2)
        weeks before each delivery of all information necessary for the Buyer to arrange for
        the receipt of the Korean supply portion, which information shall include the name
        of the supplier, the name of the Equipment, the approximate number of packages,
        the total weight and measurement of the packages, the estimated loading date or
        estimated date of departure, the shipping port, the estimated time of arrival and
        other pertinent information.



8.5 Costs and Charges
     A. In case the weight of the Equipment to be delivered by the Foreign Partner is in
        excess of the lifting capacity of the ship's crane and/or the shore crane, any extra
        charges incurred in making use of other lifting facilities at the shipping port shall be
        borne by the Seller.
     B. In regards to non-commercial cargo to be shipped due to reasons attributable to the
         Seller, including the wrong transport documents and wrong or advanced negotiation
         against the transport documents, the Seller shall deliver such cargo, the foreign
         supply portion as well as the Korean supply portion, to the Site and all costs,
         including expenses related to ocean freight, premiums, inland transportation to the
         Site, customs duties and any kinds of loss on the part of the Buyer shall be borne
         and paid for by the Seller.



                                              21
C. If a delay occurs in the manner provided for in Article 15.1 hereof and is deemed to
    adversely affect the Target Date, the Seller, upon the request of the Buyer, shall
    airfreight the delayed Equipment at its own expense.

D. In case any vessel arrangement is made by the Seller without the prior written
   consent by, or consultation with, the Buyer, the Seller shall bear all associated costs
   and expenses, including ocean and/or air freight.




                                        22
                                    9. LANGUAGE


The Contract is in the English language and executed in originals to be retained by each party
hereto. English shall be the official language in the performance of duties hereunder, and any
correspondence, documents, manuals, instructions, notices and other communications in
connection with the Contract shall be made in the English language.




                                             23
                                   10. PACKING


10.1 The Equipment to be shipped by the Seller shall be packed and shipped in accordance
    with the packing standards stipulated in the Common Technical Specification and the
    Contract Specifications and, if not specified therein, shall be packed in seaworthy
    packing conditions according to usual commercial and industrial practice; that is, the
    packing of the Equipment shall utilize proper anti-corrosion and/or anti-rust compounds
    or coatings, protective water proof wrapping and/or packing, as the case may be.



10.2 The frame of the container or package shall be commensurate with the size of the
    container or package, and the marking shall include the following information in
    sequence:
    A. The name "POSCO";
    B. The Contract name and number;
    C. The port of destination;
    D. The Letter of Credit number;
    E. The item and package number in sequence and quantity per package;
    F. The commodity description;
    G. The net weight, gross weight and cubic measurement;
    H. The shipper's name and marks;
    I. The origin of the Equipment;
    J. Caution marks, if necessary;
    K. Color marking as instructed on page 10-5 of the Common Technical Specification;
       and
    L. The identification number or reference number to be instructed by the Buyer.




                                            24
                                    11. INSURANCE


11.1 For the portion of the Equipment to be shipped from abroad, the Buyer shall insure
    against marine and/or inland risks in transit from the time such Equipment is placed on
    board an ocean vessel at the loading ports to the time of arrival at the Site.



11.2 For the Korean supply portion, the replacement parts under Article 5.12 hereof and the
    non-commercial cargo under Article 8.5.B and 14.1.B hereof, the Seller shall insure
    against risks in transit from the time on board vessel, truck or railway car at the loading
    ports or loading places to the time of arrival at the Site. The Buyer shall carry all
    necessary erection all risks insurance and shall, with the cooperation and assistance of
    the Seller, do its best to minimize the uninsured risks throughout the construction period
    of the Plant after the arrival of the cargo at the Site.



11.3      In the event a claim for indemnification of loss and/or damage against above
       mentioned insurance becomes necessary, both parties shall assist and cooperate with
       each other to promptly take up the matter with the insurance company and shall extend
       necessary assistance to have the damaged or lost equipment or relevant services replaced
       or repaired as promptly as possible.




                                               25
                          12. DRAWINGS; DOCUMENTS


12.1 The Seller shall provide the Buyer with designs, drawings, specifications, schedules
    and bills of quantities as may be necessary to enable the Buyer to carry out the Local
    Cost portion of the construction work at the Site. The Seller hereby agrees that the
    documents provided hereunder shall cover and be based upon the latest commercially
    proven know-how available to the Seller and that the detailed engineering will be
    undertaken by the Seller in accordance with the latest design standards available and/or
    known to the Seller at the time of design.



12.2 The Seller shall, as mutually agreed upon in accordance with the construction schedule,
    submit for the review and approval of the Buyer a list of the following drawings and
    documents, including information on the time of submission, types of drawings and
    documents and other information:

       A. Civil and architectural work;
       B. Mechanical and electrical equipment, including erection, piping, wiring and brick
         work at the Site;
       C. Procurement of materials and steel fabrication by the Buyer; and
       D. Manuals.

     The Buyer shall, within fifteen (15) days after receipt of the list, advise the Seller of its
     comments by telex or telefacsimile.



12.3 The Seller shall submit for the Buyer's approval, on a Delivery at Site basis, such
    drawings and documents in such numbers of copies and within such time as approved by
    the Buyer. If the Buyer fails to issue its written approval or notify its disapproval to the
    Seller within thirty (30) days after receiving such drawings and documents, they shall be
    deemed approved by the Buyer. The date of receipt shall be the date of the Buyer's
    in-stamp. The Seller shall supply approved and/or final drawings in accordance with the
    details to be agreed upon.



12.4 Drawings approved by the Buyer shall not be varied, except as provided in Article 19
    hereof.




                                               26
12.5 The Buyer shall have the right at all reasonable times to inspect, at the factory of the
    Seller and/or its Subcontractors, all drawings of any portion of the Plant.



12.6 The Seller shall submit to the Buyer on a Delivery at Site basis, within six (6) months
    before the Plant is put into operation, five (5) copies of the operation and maintenance
    manuals for the Buyer's review, two (2) copies of which the Buyer shall return to the
    Seller three (3) months before the Target Date.



12.7 The Seller shall furnish to the Buyer on a Delivery at Site basis, before putting the
    Plant into operation, fifteen (15) copies of the said manuals, together with drawings in
    sufficient detail to enable the Buyer to maintain, dismantle, reassemble and adjust all
    parts of the Plant.



12.8 The Seller shall furnish to the Buyer on a Delivery at Site basis, before the Effective
    Date of the Contract, fifteen (15) copies of a preliminary spare parts list specifying
    quantity and unit price, and the preliminary spare parts list shall be adjusted to become
    the final spare parts list by the time the overall design of the Plant is completed or within
    six (6) months before the Final Shipment of the Equipment, whichever occurs earlier.
    Five (5) copies of the final spare parts list shall be submitted to the Buyer on a Delivery
    at Site basis within one (1) month from such adjustment.



12.9      The Seller shall be responsible for, and bear all expenses for, re-designing,
       re-engineering, repairing, replacing or modifying all equipment and/or construction that
       is defective or damaged as a result of any discrepancies, errors or omissions in the
       manuals, drawings and other particulars supplied by the Seller, whether or not such
       drawings and particulars have been approved by the Buyer; provided that such
       discrepancies, errors or omissions are not due to inaccurate information or particulars
       furnished in writing to the Seller by the Buyer.




                                               27
        13. INSPECTION AND TESTING DURING MANUFACTURE


13.1 The Engineer shall be entitled, at all reasonable times, to inspect, examine and test in
    the workshops of the Seller or its Subcontractors the materials and workmanship of all
    Equipment to be supplied under the Contract and to inspect the packing and marking of
    such Equipment. Such inspection, examination or testing, if made, shall not relieve the
    Seller from any obligations under the Contract.



13.2 The Seller shall give the Engineer reasonable notice in writing of the date on, and the
    place at which any Equipment will be ready for testing as provided for in the Contract
    Specifications or other schedules. The Engineer shall give the Seller two (2) weeks prior
    notice in writing of his or her intention to attend the tests. If the Engineer does not arrive
    at the place so named within three (3) days from the date which the Seller has stated in
    its notice, the Seller may proceed with the tests, which shall be deemed to have been
    made in the Engineer's presence, and shall forthwith forward to the Engineer duly
    certified copies of the test readings.



13.3 The Seller shall provide such assistance, labor, materials, electricity, fuels, stores,
    apparatus and instruments as may be required and as reasonably demanded by the
    Engineer to carry out such tests efficiently.



13.4 When any Equipment has passed the tests referred to in this Article, the Engineer shall
    furnish the Seller a certificate in writing to that effects.



13.5 The Seller shall provide testing and inspecting facilities and procedures in accordance
    with its normal practice.



13.6 The Seller shall allow the Engineer to review its and/or its Subcontractors' quality
    control system.



13.7     If after inspecting, examining or testing any part of the Equipment the Engineer
       demonstrates that such part is defective or is not in accordance with the Contract, he or
       she may reject such part by giving the Seller, as soon as practicable, a written notice



                                               28
    specifying the particulars of the defects. In such case, the Seller shall, with all speed and
    at its own expense, correct the defects so specified.



13.8 The inspection by the Engineer shall be performed in such a way so as not to interfere
    with, or cause any delay in, the manufacturing schedule of the Seller and so as not to
    damage the Equipment.



13.9 The Buyer shall bear all costs and expenses for dispatching the Engineer.



13.10 The Seller shall provide to the Buyer on a Delivery at Site basis three (3) sets of its
     standard inspection procedures of each applicable Equipment for the Buyer's approval
     within three (3) months after the Effective Date of the Contract.




                                              29
   14. PERFORMANCE GUARANTEE AND ACCEPTANCE TESTS


14.1 Performance Guarantee

    A. The Seller shall guarantee that the Plant supplied by the Seller which consists of the
       following Operating Units, when tested and operated pursuant to the procedures,
       methods, processes and test conditions set forth in the Contract Specifications, will
       be capable of the guaranteed performance set forth therein:

          Operating Units :



     B. The Seller shall make available on a Delivery at Site basis, at its own expense, any
        testing instruments and laboratory equipment, except those available in Korea,
        necessary for the conduct of performance test. The said instruments and equipment
        shall be reexported, at the expense of the Seller, from Korea upon completion of the
        acceptance tests.

     C. The Buyer shall furnish, at its own expense, suitable skilled and unskilled operators
        and all electrical power, gas, air, water, steam, materials, consumable items,
        facilities and infrastructure, and other goods and services necessary to conduct
        acceptance tests.



14.2 Preliminary Acceptance Test (PA Test)

     A. On completion of construction and installation of any Operating Unit, the Buyer
        shall inspect and check the readiness for placing into operation of the said Operating
        Unit. The inspection and check by the Buyer shall be carried out in accordance with
        the Seller's written instructions. The Seller, having confirmed and been satisfied
        with the readings and the result of the inspection and check, shall notify in writing
        the Buyer of the date of the PA Test of each Operating Unit.

     B. If the Seller fails to notify the Buyer of the date of the PA Test within three (3)
         months from the date on which the above inspection and check on any Operating
         Unit was conducted, the Seller shall be deemed to have failed to perform and fulfill
         its obligations under the Contract and the Buyer may have recourse to the remedies
         as provided for in Article 14.4.A.




                                             30
C. Upon receipt of the Seller's notice of the date of PA Test the Buyer shall carry out
   the PA Test under the observation of one (1) each representative of the Buyer and
   the Seller in accordance with procedures specified in the Contract Specifications
   fully in compliance with the instruction and supervision of the Seller, provided,
   however, that a third person may be selected by the Buyer under the Seller's consent
   for observation of the PA Test. Within ten (10) days after the conclusion of each PA
   Test the said observers shall notify the Buyer and the Seller that the Operating Unit
   has or has not met its guaranteed performance specified in the Contract
   Specifications. The decision of a majority of the said observers shall be conclusive.

D. Within ten (10) days after receipt of this notification provided that Operating Unit
   has satisfied the conditions for PA Test specified in the Contract Specifications, the
   Buyer shall issue to the Seller a Preliminary Acceptance Certificate with respect to
   such Operating Unit; the Preliminary Acceptance Certificate shall not be withheld
   unreasonably for minor or insubstantial deviations from the Contract which will not
   affect the principal function of the Operating Unit.

E. If the Seller is notified by the observers that the conditions specified for PA Test in
    the Contract Specifications have not been met, which notice shall include
    particulars of the alleged failure to meet such conditions, the Seller upon receipt of
    such notice shall, provided that such alleged failure is not attributable to the Buyer's
    responsibility, at its own expense immediately correct any deficiency specified in
    such notice or repair or replace the defective part at the Site. After completion of
    any correction, repair or replacement, the Buyer shall repeat such tests in the same
    manner as the first PA Test immediately upon being notified by the Seller until such
    time as the Operating Unit satisfies the said conditions.

F. If the said conditions have not been met, though the PA Test has been repeated under
    the provisions of Article 14.2.E, within three (3) months from the date on which the
    first PA Test was conducted, the Seller shall be deemed to have failed to fulfill its
    obligations under the Contract and the Buyer may have recourse to the remedies as
    provided for in Article 14.4.A.

G. If, due to reasons attributable to the Buyer's responsibility the PA Test has not been
    started within three (3) months from the date of the PA Test that the Seller initially
    designated pursuant to Article 14.2.A, then the Buyer shall be deemed to have
    issued a Preliminary Acceptance Certificate with respect to such Operating Unit
    which shall be confirmed by the Seller in writing.




                                         31
     H. If, due to reasons attributable to the Seller's responsibility the PA Test has not been
         started within three (3) months from the date of the PA Test that the Seller initially
         designated pursuant to Article 14.2.A the Buyer may have recourse to the remedies
         as provided for in Article 14.4.A.

     I. If, due to reasons attributable to the Seller, the issuance of the last Preliminary
         Acceptance Certificate has been delayed more than six(6) months from the date of
         the last Preliminary Acceptance Certificate specified in Article 15.2, the Buyer shall
         have the right to exercise recourse in accordance with remedy as set forth in Article
         23.1 hereof.



14.3 Final Acceptance Test (FA Test)

     A. Upon issuance of the last Preliminary Acceptance Certificate, or by agreement
        between the Buyer and the Seller, the Buyer shall conduct the start-up or placing
        into operation of the Plant under load conditions under the instructions and
        supervision of the Supervisor and shall prepare for FA Test, which shall be carried
        out in accordance with the conditions and procedures set forth in the Contract
        Specifications fully in compliance the instructions and supervision of the Seller and
        shall commence within six (6) months from the date on which the Preliminary
        Acceptance Certificate has been issued or is deemed to have been issued.

     B. The Seller shall check the Plant for readiness for FA Test and shall notify in writing
         the Buyer of the commencement date of the FA Test.

     C. The FA Test shall be observed by two (2) or three (3) persons appointed in the same
         manner as provided for in Article 14.2.C. The observers will submit a written
         notifications in the manner provided in Article 14.2.C. The decision of a majority of
         the said observers shall be conclusive.

     D. Within ten (10) days from the receipt of this notification, provided that the Operating
        Unit has met its guaranteed performance for FA Test specified in the Contract
        Specifications, the Buyer shall issue to the Seller the Final Acceptance Certificate
        for the Operating Unit, which shall not be withheld unreasonably for minor or
        insubstantial deviations from the Contract which will not affect the principal
        function of the Plant.

     E. If the Seller is notified by the observers that the guaranteed performance for FA Test
         specified in the Contract Specifications has not been met, which notice shall include



                                             32
         particulars of the alleged failure to meet such performance, the Seller upon receipt
         of such notice shall, provided that such alleged failure is not attributable to the
         Buyer's responsibility, at its expense immediately correct any deficiency specified
         in such notice, repair or replace the defective parts at the Site. After completion of
         any correction, repair or replacement, the Buyer shall repeat the unsuccessful part of
         the FA Test in the same manner as the first FA Test immediately upon being
         notified by the Seller.

      F. If, due to reasons attributable to the Buyer's responsibility the FA Test has not been
         started within six (6) months from the date on which the last Preliminary
         Acceptance Certificate was issued or deemed to have been issued, the Buyer shall
         be deemed to have issued the Final Acceptance Certificate, which will be confirmed
         by the Seller in writing.

     G. If, due to reasons attributable to the Seller's responsibility, the FA Test has not been
         started within six (6) months from the date on which the last Preliminary
         Acceptance Certificate was issued or deemed to have issued, the Buyer may have
         recourse to the remedies provided for in Article 14.4.A.

     H. If, due to reasons not attributable to the Buyer's responsibility, the guaranteed
        performance for FA Test has not been met, though the FA Test has been repeated
        under the provisions of Article 14.3.E, within eight (8) months from the date on
        which the first FA Test was conducted under Article 14.3.A, the Seller shall be
        deemed to have failed to fulfill its obligations under the Contract and the Buyer may
        have recourse to the remedies provided for in Article 14.4.B.



14.4 Remedies For Failure of Performance Guarantee

     A. If the Seller is deemed to have failed to fulfill its obligations under the provisions of
         Article 14.2.B, 14.2.F, 14.2.H and 14.3.G, the Buyer may, at the expense of the
         Seller, make necessary corrections or adjustments, or make good the deficiencies.
         The Seller shall reimburse the expense incurred by the Buyer upon receipt of the
         Buyer's invoice. If the Seller fails to make such payment to the Buyer within thirty
         (30) days from the date of receipt of the said invoice, the Buyer may, at its option,
         withdraw the said expense out of the Performance Bond established under Article
         17 hereof without prejudice to other remedies provided for in this Contract.

      B. Under the provisions of Article 14.3.H, the Buyer shall be entitled to claim
        liquidated damages for the failure of performance guarantee as provided for in the



                                              33
   Annex D hereof and/or the Contract Specifications. However, the aggregate total
   amount of the liquidated damages under this Article shall not exceed five percent
   (5%) of the Contract Price. The Seller shall remit the claimed amount to the Buyer
   within thirty (30) days after receipt of the Buyer's invoice. If the Seller fails to make
   such payment, the Buyer may, at its option, withdraw the said amount out of the
   Performance Bond established under Article 17 hereof without prejudice to other
   remedies provided for in this Contract.

C. Should the highest output finally achieved by the relevant Operating Unit at any FA
    Test fall below         percent ( %) of the guaranteed performance for the FA
    Test, the Buyer shall have the right to exercise recourse in accordance with the
    remedy as set forth in Article 23.1 hereof.




                                         34
                             15. LIQUIDATED DAMAGES


15.1    Liquidated Damages for Delayed Delivery

       In case there is a delay in the delivery of the Equipment beyond the date of delivery
       specified in the Contract due to reasons attributable to the Seller, the Buyer is entitled to
       claim liquidated damages per day of delay in an amount equivalent to one tenth of one
       percent (0.1%) of the contract amount (including V.A.T. in case of Korean supply
       portion) of the delayed portion. Such liquidated damages shall not exceed five percent
       (5%) of the contract amount (including V.A.T. in case of Korean supply portion) of the
       delayed portion.



15.2    Liquidated Damages for Delayed Issuance of Preliminary Acceptance Certificate

       In order to meet the Target Date, the last Preliminary Acceptance Certificate shall be
       issued by               . In case there is a delay in the issuance of the last Preliminary
       Acceptance Certificate beyond the above date due to reasons attributable to the Seller,
       the Buyer is entitled to claim liquidated damages per full week, i.e., seven (7) days of
       delay in an amount equivalent to two-tenths of one percent (0.2%) of the Contract Price
       (including V.A.T. in case of Korean supply portion). Such liquidated damages shall not
       exceed five percent (5%) of the Contract Price (including V.A.T. in case of Korean
       supply portion).



15.3 Any liquidated damages payable in accordance with Article 15.1 & 15.2 hereof shall
    be deducted from the amount that the Buyer shall pay to the Seller under this Contract. In
    case that there is no amount that should be paid by the Buyer, the Buyer is entitled to
    withdraw the liquidated damages from the Performance Bond and/or Refund Bond
    established by the Seller under Article 17 hereof, in the event that the Seller fails to make
    any such payment within thirty (30) days from the date of receipt of the Buyer's invoice.
    The Buyer's right to claim such liquidated damages shall not affect any other rights or
    remedies the Buyer may have under this Contract.




                                                 35
                                    16. WARRANTIES


16.1 The Seller shall warrant that all the Equipment supplied by the Seller shall, except for
    normal wear and tear, be new and free from defects, be of first class workmanship and
    materials and show no defects due to faulty design, materials or workmanship under
    normal operating conditions.



16.2 The Seller's obligations under the aforesaid warranties shall be effective for one (1)
    year from the date when the last Final Acceptance Certificate is issued or deemed to have
    been issued in accordance with the provisions provided for in Article 14.3 (hereinafter
    referred to as the "Warranty Period"). If, during the aforesaid Warranty Period, any
    Equipment fails to meet the warranties as provided for in Article 16.1 hereof and the
    Buyer informs the Seller thereof, stating in writing the nature of such failure, the Seller
    shall, at its expense, repair, make good, replace or modify the Equipment at the Site with
    all possible speed.



16.3 Any Equipment found defective and thereafter replaced or repaired shall have its
    Warranty Period of one (1) year renewed from the date of written agreement by both
    parties that such replacement or repair is completed.



16.4     If the Seller does not commence the correction of such defects within thirty (30) days
       from the date of receipt of notice from the Buyer or does not complete the said correction
       with reasonable diligence and within a reasonable time, the Buyer may, at its option,
       correct the defects at the Seller's risk and expense. The Seller shall reimburse the
       expense incurred by the Buyer for remedy of such defects within thirty (30) days from
       the date of receipt of the Buyer's invoice. If the Seller fails in making such payment to
       the Buyer within the above-mentioned period, the Buyer may, at its option, withdraw the
       said expense out of the Performance Bond established under Article 17 hereof.



16.5 The Seller shall not be liable and the Warranties stipulated in this Article shall not
    apply if and to the extent that the Equipment damaged or altered pursuant to the
    following:

         A. Damage in transit, improper storage or handling, incorrect or negligent operations
           or improper maintenance;



                                                36
B. Any alterations made by the Buyer without the consent of the Seller; and

C. Normal tear and wear.




                                      37
             17. PERFORMANCE BOND AND REFUND BOND


17.1 Performance Bond

  A. In order to assure the Buyer that the Seller's obligations under the Contract shall be
    performed and fulfilled, the Seller shall, before the issuance of a Letter of Credit, but not
    later than two (2) months after the date of Contract, establish a Performance Bond in the
    amount of ten percent (10%) of the Contract Price, which shall be maintained at all times
    throughout the Warranty Period in the form of an absolute and unconditional bank
    guarantee to be issued by a first-class bank or any other type of guarantee acceptable to
    the Buyer and in favor of the Buyer and to be advised to the Buyer as specified in Article
    31 hereof through a prime bank or to be directly mailed to the Buyer. Fifty percent (50%)
    of the value of the Performance Bond shall be released upon issuance of the Final
    Acceptance Certificate and the remaining fifty percent (50%) of the value of the
    Performance Bond shall be released upon the expiration of the Warranty Period as
    provided for in Article 16 hereof. The Performance Bond shall be payable on demand
    and unconditionally at the Buyer's request for payment which comprises an invoice and
    the Buyer's simple statement that the Seller has failed to comply with any term and
    condition set forth in the Contract. The Buyer shall be entitled to withdraw
    corresponding amounts out of the Performance Bond in the event that the Seller defaults
    on its obligations under the Contract. In case that the Buyer is compensated from the
    Performance Bond, the Seller shall replenish and maintain the Performance Bond in an
    amount equivalent to the value of ten percent (10%) of the total Contract Price before the
    fifty percent of the value of the Performance Bond is released due to the issuance of FAC,
    or in an amount equivalent to the value of five percent (5%) of the total Contract Price
    after the fifty percent of the value of the Performance Bond is released due to the
    issuance of FAC, within one (1) month after such compensation.

  B. In case of any extension of the Warranty Period as provided for in Article 16.3 hereof,
    the Seller shall, before the expiry date of the Performance Bond established under Article
    17.1.A hereof, either extend the validity of the existing Performance Bond, reducing the
    value of the Performance Bond to the price of the Unit of Supply to which the
    Equipment belongs, or establish a new bond in an amount equal to the price of the Unit
    of Supply. If the Seller fails to provide the Buyer with the original copy of such an
    extended or new Performance Bond at the latest fourteen (14) days before the current
    Performance Bond expires, the Buyer shall be entitled to confiscate the amount stated in
    the Performance Bond in the manner specified in Article 17.1.A hereof.




                                              38
17.2 Refund Bond

   The Seller shall, before the issuance of a Letter of Credit, but not later than two (2)
   months after the date of the Contract, establish the Refund Bond in an amount equivalent
   to the down payment of the Contract Price. The Refund Bond shall be released when
   Equipment amounting to more than the down payment of the Contract Price has been
   shipped. The Buyer shall be entitled to withdraw a corresponding amount out of the
   Refund Bond in the event the Seller defaults on its obligations set out in Article 15 of
   this Contract and to withdraw the total amount of the Refund Bond if the said Equipment
   is not delivered, in its entirety, by             .




                                           39
                                        18. TITLE


18.1     In accordance with INCOTERMS 2000 as amended, the title to and the risk of loss of
       the Equipment to be shipped from abroad shall be transferred to the Buyer from the time
       when it shall have effectively passed the ship's rail at the port of shipment.



18.2 The title to and the risk of loss of the Korean supply portion shall be transferred to the
    Buyer from the time when it shall have been effectively placed at the disposal of the
    Buyer on board of truck, railway or vessel (including barge) at the Site.



18.3 The said transfer shall not in any way affect or diminish the Seller's obligations as
    provided for in the Contract. The Seller warrants that the title conveyed shall be good
    and that its transfer is rightful and free from any security interests or other liens or
    encumbrances.




                                              40
                              19. VARIATION


Any variations in, addition or amendment to the Contract ("Variations") are subject to
written agreement between the parties and the approval of the respective governments of
the Buyer and the Seller, if applicable. If the Buyer desires any Variations in any part of
the Contract, notice in writing shall be given by the Buyer so as to enable the Seller to
make necessary arrangements and in case the Equipment is already manufactured or in
the course of manufacture, or any matters completed or drawings or patterns made
require alteration, a reasonable sum in respect thereof shall be paid by the Buyer. In this
case, a reasonable time for the extension of delivery shall be granted. All extra costs or
reductions of costs due to Variations shall be paid by either party as agreed. Minor and
insubstantial variations which do not affect price or delivery shall be made by written
consent between the parties hereto but shall not require the approval referred to the
above.




                                         41
                                       20. PATENTS


20.1 The Seller shall indemnify and hold the Buyer, its employees, engineers and agents
    harmless against all proximate costs, actions, claims and demands brought by a third
    party inside and/or outside the Republic of Korea by reason of, or in consequence of, any
    infringement by the Equipment or parts thereof, or by the use of processes that have been
    supplied by the Seller as a result of engineering services or any patent, design patent,
    trade mark or copyright.
       This indemnification obligation of the Seller shall survive the completion or termination
       of the Contract.



20.2     In the event that any claim is made or action is brought against the Buyer and its
       employees, engineers and/or agents relating to such infringement, the Buyer shall
       promptly notify the Seller thereof and the Seller, at its own expense and option, may
       request the assistance of the Buyer and shall conduct, on behalf of the Buyer, all
       negotiations for the settlement of such dispute or litigation as may arise therefrom.




                                               42
                                  21. FORCE MAJEURE


21.1 Should either party be prevented wholly or in part from fulfilling any of its obligations
    under the Contract for reasons of force majeure, such obligations shall be suspended to
    the extent and for as long as such obligations are affected by the force majeure and the
    party claiming under this Article shall be entitled to such extension of time to fulfill such
    obligations as may be reasonably necessary in view of the circumstances, subject to the
    provision of Article 21.4, 21.5 and 21.6 hereof. The party suffering from force majeure,
    however, shall try its best to avoid or remove such causes of force majeure and to cure
    and complete performance of its obligations hereunder as soon as possible after such
    causes are removed.



21.2      Force majeure hereunder shall be defined as any of the following events: war,
       preparation for war, blockade, revolution, insurrection, mobilization, civil commotions,
       riots, strike, sabotage, inevitable accident, lockout, act of governmental authorities, Act
       of God, plague, freight embargo, earthquake, tidal wave, typhoon, storm, fire, explosion,
       flood or any condition of a similar nature beyond the control of the parties hereto.



21.3 Within seven (7) days from the date of commencement of events or circumstances that
    may cause any delay by force majeure on account of which either party claims that it is
    entitled to any extension of time for performance of its obligations hereunder, such party
    shall advise the other by telex or telefacsimile of the date when such delay commenced,
    and the reasons therefor as enumerated in this Contract; likewise, within seven (7) days
    after the delay ends, either party shall advise the other by telex or telefacsimile of the
    date when such delay ended, and shall also specify the redetermined time by which the
    performance of its obligations hereunder is to be completed. In case one party fails to
    acknowledge such notification hereunder within fourteen (14) days after receipt hereof,
    the date of dispatch of telex or telefacsimile shall be considered the date of notification,
    provided, however, that telex or telefacsimile shall be confirmed in writing subsequent to
    the said date of dispatch.



21.4     If, after thirty (30) days from the date of giving the aforesaid notice, the notifying party
       shall still be prevented, for the reasons beyond its control, from performing its
       obligations under the Contract, the Seller and the Buyer shall consult each other with a
       view to determining what action is appropriate under the circumstances.




                                                  43
21.5     If, after ninety (90) days from the date of giving the aforesaid notice, the notifying
       party shall still be prevented, for the reasons beyond its control, from continuing to
       perform its obligations under the Contract, the other party reserve the right to take any
       kinds of measures including the change in the Contract which is deemed to be reasonable
       for the purpose of smooth and efficient execution of the Contract.



21.6     If, after one hundred and eighty (180) days from the date of giving of the aforesaid
       notice, the notifying party shall still be prevented, for the reasons beyond its control,
       from continuing to perform its obligations under the Contract, then either party shall be
       entitled to terminate this Contract.



21.7     In the event of a change in the Contract and/or termination of the Contract under
       Article 21.5 and 21.6 hereof, the Buyer and the Seller shall, in good faith, agree upon the
       costs to be borne by either party.




                                                44
                                 22. ARBITRATION


22.1 All disputes, controversies or differences of any kind which may arise between the two
    parties hereto out of, in relation to or in connection with this Contract or for the breach
    thereof shall in the first place be amicably settled by and between the parties hereto. If
    the two (2) parties hereto fail to amicably settle such disputes, controversies or
    differences within a reasonable period of time, such disputes, controversies or
    differences shall be finally settled by arbitration to be held in Seoul, Korea under the
    Commercial Arbitration Rules of the Korean Commercial Arbitration Board and under
    the law of the Republic of Korea.



22.2 The award shall be final and binding upon the parties to this Contract. The submission
    of any dispute, controversy, difference of any kind to arbitration shall not release either
    party to the Contract from the remaining obligations assumed under the Contract, which
    have no relevance with the disputed issue.




                                              45
                    23. TERMINATION AND ASSURANCE


23.1 Termination upon Breach

    In the event of a material breach of a fundamental term or condition of the Contract, the
    Contract shall be terminated as hereinafter provided for.

  A. The party claiming the existence of such breach of one or more of the terms and
    conditions of the Contract shall dispatch notice of its claim to the other party.

  B. The party against which such claim is made shall start correction of the conditions
    alleged to constitute such breach within thirty (30) days from the receipt of the said
    notice.

  C. If the conditions alleged to constitute such breach are not corrected to the satisfaction of
    the claiming party within a reasonable time, the claiming party may give notice to the
    other that the breach has not been corrected yet and that the Contract shall be terminated
    in accordance with Article 23 hereof.

  D. The said termination shall become effective after thirty (30) days from the notice, unless
    the party against which the claim of breach is directed, within thirty (30) days from the
    date of notice, contests the claim or right of the other party to terminate or asserts that it
    has corrected or it is correcting or it will correct the conditions alleged to constitute such
    breach within a reasonable period of time from receipt of the initial notice, taking into
    account the complexity of the Equipment or the change or correction required.

  E. In the event of a dispute between the parties, the matter shall be referred to arbitration
    under the terms of Article 22 hereof. Termination of this Contract shall be without
    prejudice to the accrued rights and liabilities (including but not limited to the respective
    obligations as set forth in Article 23.1.G and 23.1.I hereof) of the parties at the date of
    termination, unless waived in writing by mutual agreement of the parties.

  F. The remedies and measures of damages for breach shall only be those provided for under
     the Contract. Neither party shall be entitled to claim any indirect damages or
     consequential loss whatever arising.

  G. When the Contract is terminated due to the breach of the Buyer, the Seller shall have the
    right to receive payment for all works performed, supplied or in the process of
    manufacture, completed or accepted.



                                               46
  H. In the event that the Seller elects to terminate and payment has been made as provided
    for in Article 23.1.G hereof, the Seller shall assign to the Buyer to the extent covered by
    the payment and desired by the Buyer, all rights, titles and commitments on the
    Equipment ordered for use for installation in the Plant, which are then partially
    fabricated or manufactured but not yet en route to the Site, or then completely fabricated
    or manufactured and en route to but not yet received at the Korean port of entry.

  I. When the Contract is terminated due to the breach of the Seller, the Buyer shall have the
     right to recontract the uncompleted portion of the Contract with a third party at a price
     deemed reasonable by international standards at the time of recontract. In such event, the
     Seller shall return to the Buyer the amount corresponding to the uncompleted portion of
     the Contract if such amount has been paid to the Seller and reimburse the difference
     between the recontract price and such amount corresponding to the uncompleted portion
     of the Contract; provided, however, that such difference shall not exceed ten percent
     (10%) of the Contract Price. In addition to such refund and/or reimbursement, the Seller
     shall provide such third party with all drawings, data, documents, information and the
     grant of the right to use all patents at no cost to the Buyer and such third party as may be
     necessary to enable such third party to perform its obligation under the recontract. In
     case the Seller fails to pay the said corresponding amount to the Buyer within thirty (30)
     days after receipt of the Buyer's invoice, the Buyer shall withdraw such corresponding
     amount out of the Performance Bond and/or Refund Bond.



23.2 Termination upon Agreement

       The Buyer and the Seller may terminate the Contract by mutual agreement, in which case
       the Buyer shall pay to the Seller reasonable compensation for the portion of engineering
       and supplies which have been furnished or in the process of manufacture by the Seller up
       to the time of such termination, and the Seller shall transfer all the rights and titles over
       engineering supplies and any commitment for which payment or compensation have
       been made already to the Seller if the Buyer so elects.



23.3     Where it is required by the context in certain provisions of the Contract, those
       provisions, including but not limited to Article 20, 22, 25, 28, 30, 31 and 32 hereof, shall
       survive the termination of the Contract.




                                                 47
23.4 Assurance

    If there exist reasonable grounds to doubt either the Buyer's or the Seller's ability to
    perform its obligations under this Contract in full, then the other party shall have the
    right to demand assurances for adequate performance. If no assurances are provided
    within thirty (30) days of the request, then the party demanding assurances may
    terminate this Contract upon written notice to the other party.




                                            48
                24. ASSIGNMENT AND SUBCONTRACTING


24.1 Neither party shall, without the consent in writing of the other party, which shall not be
    unreasonably withheld, assign or transfer the Contract, the benefits or obligations thereof
    or any part thereof to any other person. Any such placing of suborders shall not relieve
    the Seller from its obligations under the Contract.



24.2 The Seller shall submit to the Buyer for the Buyer's approval a preliminary list of the
    Subcontractors for the manufacture of the Equipment of major items as agreed between
    the Buyer and the Seller, including their names and addresses and a description of the
    Equipment and/or materials allocated to them. The Buyer shall reserve the right to
    disapprove such Subcontractors by informing the Seller of the reasons for such
    disapproval. In case any disapproval should occur, the Buyer and the Seller shall choose
    the proper Subcontractors by mutual agreement, and in the event both parties fail to
    reach an agreement to designate the Subcontractors, the Buyer shall reserve the right to
    designate the Subcontractors at its own discretion.



24.3 The Seller shall submit to the Buyer a final list of the Subcontractors within thirty (30)
    days after the Seller's subcontracting.




                                              49
                         25. CONFIDENTIALITY


The Buyer and the Seller shall treat all documents, data, materials, and information
supplied by one to the other as confidential and shall not disclose the above to any third
party, without the prior consent in writing from the other party, for a period of five (5)
years from the date on which the Buyer issues the Final Acceptance Certificate.

The documents, data, materials and information disclosed by training and technical
assistance shall be kept secret and shall not be disclosed to third parties unless such
documents, data, material and information

  A. were known to the Buyer prior to transmission thereof by the Seller.
  B. become publicly available through no fault of the Buyer.
  C. are lawfully obtained by the Buyer from a third party, and without obligation of
    confidentiality.
  D. are in the public domain.




                                         50
                             26. TAXES AND DUTIES


26.1 The Seller shall pay all the customs duties and tariffs for export of the Equipment
    assessed or imposed on the Seller by the government or other competent authorities of
    the Seller's country in relation to the Contract, and shall bear and pay all taxes to be
    assessed or imposed on the Seller in relation to the Contract by Korean Government or
    other competent authorities under Korean tax law, regulation, guideline or ordinance;
    provided, however, that value-added tax shall be borne by the Buyer and paid to the
    Seller upon the Seller's presentation of a tax invoice to the Buyer under Articles 15 and
    16 of the Value-Added Tax Law of the Republic of Korea, enacted on December 22,
    1976 (including any amendment thereto).
    In case the Seller shall bear the withholding taxes which may be imposed by the Korean
    Government or other competent authorities upon payments to be made to the Seller
    under the Contract, the Buyer shall withhold and deduct such withholding taxes from the
    payments and pay the said taxes to the appropriate tax office on behalf of the Seller and
    shall send to the Seller the original tax payment certificates.



26.2 The Buyer shall pay and bear all the taxes and duties, including customs duties and
    tariffs related to the import of the Equipment, assessed or imposed on the Buyer by the
    government or other competent authorities of the Republic of Korea in relation to the
    Contract.




                                             51
                               27. VISAS AND PERMITS


27.1 The Buyer shall, at the Seller's expense, assist the Seller in obtaining all visas, labor
    permits, if applicable, import and other licenses, certifications, declarations and other
    legal documents required in Korea for the expedient performance of the Contract.



27.2     In case any Supervisor requires extension of his or her period of stay in Korea in
       connection with the construction work hereunder, the Seller shall submit to the Buyer, at
       least fourteen (14) days before the expiration date of visa, the documents necessary to
       obtain the approval of the government authorities concerned.




                                               52
                         28. GOVERNING LAW


The formation, validity, construction and performance of this Contract shall be governed
by the laws of the Republic of Korea.




                                        53
                         29. LOCAL LAW COMPLIANCE


29.1     The Seller shall comply and secure compliance from the Supervisors with all
       applicable laws of the Republic of Korea in the performance of the construction work in
       the Republic of Korea. The Seller shall comply with any Korean law, regulation,
       requirement, ordinance or decree.




29.2 The Seller shall strictly comply with the Korean national traffic regulation concerning
    weight limitation on container cargo; that is, maximum weight of 17.5 metric tons for a
    20 foot container and maximum weight of 20 metric tons for a 40 foot container.




                                              54
                       30. ENTIRE AGREEMENT


The Contract supersedes all previous representations, understandings or agreements, oral
or written, between the parties with respect to the subject matter of the Contract, and the
agreements and documents contemplated hereby contains the entire understanding of the
parties as to the terms and conditions of their relationship. Terms included in the
Contract may not be contradicted by evidence of any prior oral or written agreement or
evidence of contemporaneous oral or written agreement.




                                         55
                                   31. NOTICE


All notices, including daily communications, to be given to either party shall be given to
the following addresses by airmail telex or telefacsimile. Important notices, in which
rights and/or obligations of either party are involved shall be given by registered airmail,
and such notices shall be deemed to have been valid seven (7) days after their dispatch.
Either party may change its address by giving prior notice to the other party, delivered in
the same manner set forth hereinabove.

For the Buyer : - Commercial
                  POSCO
                  (purchasing team name)
                  Plant & Equipment Purchasing Department
                  16F., POSCO CENTER, 892, Daechi-4dong,
                  Kangnam-gu Seoul 135-777, Korea
                  Telex : POSCO K23278, K27345
                  Telefacsimile : (02)3457-1933

                   - Technical (Pohang)
                       POSCO
                       (project team name)
                       1, Goe-dong, Nam-ku, Pohang 790-360, Korea
                       Telex : POSCO K54474
                       Telefacsimile :
                        or
                     - Technical (Kwangyang)
                       POSCO
                       (project team name)
                       700, Kumho-dong, Kwangyang 545-090, Korea
                       Telex : POSCO K66789
                       Telefacsimile :

For the Seller :

            Telex :
            Telefacsimile :




                                          56
                       32. CONSTRUCTION OF CONTRACT


32.1     In the course of interpreting and constructing the Contract, any provision set forth in
       the Contract, but not found in the Contract Specifications, shall be of like effect as if set
       forth in both. However, if the Contract conflicts with the Contract Specifications or any
       other documents, the former shall prevail. Anything set forth in the Contract
       Specifications but not in the drawings set forth in Article 12 hereof or anything set forth
       in the drawings but not in the Contract Specifications, shall be deemed to be set forth in
       both. However, if the drawings are different from the Contract Specifications with
       respect to the item in question, the latter shall prevail.



32.2 Between the Contract and/or Contract Specifications and their respective amendments
    and variations, the amendments and variations mutually agreed upon in writing shall
    prevail.

32.3 Between the Contract Specifications and/or the drawings and the Common Technical
    Specification, the Contract Specifications and/or the drawings shall prevail.




                                                 57
                         33. CLAIMS; PERSONAL INJURY


33.1     The parties to the Contract shall not forward claims and demands other than as
       specified in the Contract.



33.2     In case performance by the Seller under the Contract causes death or injury to persons
       or damage to existing property of the Buyer or third party, provided the Seller shall be
       solely liable therefor, the Seller shall indemnify the Buyer and hold the Buyer harmless
       against any and all loss, liability, damage or deficiency (including without limitation,
       legal fee) incurred by the Buyer or any third party.




                                               58
ANNEX A. Price Breakdown and Delivery Schedule

                                                     Unit of Supply
   Item
            Commodity Description
    No.                                             Unit
                                         Quantity              Price   Delivery
                                                    Price




                                    59
Annex B. Specimen


 Performance Bond


Performance Guarantee No. 0000000 for 0,000,000.--
Between POSCO, No.1, Geodong-dong, Pohang, Kyungsangbuk-do, the Republic of Korea
(hereinafter referred to as "the Buyer") and 【the Seller's name and address】(hereinafter
referred to as "the Seller") a Contract for【contract name】(Contract No. 00000000) at a total
price of 0,000,000.-- (Say … only) for the Seller's portion has been concluded on
【dd-mm-yy】 and shall be paid by the Buyer to the Seller.
In accordance with Article 17.1 of the Contract, the Seller is under the obligation of providing
a Bank Guarantee for the ten (10) percent of the Contract price for the Seller's Portion; that is,

   000,000.--
   (Say … only.)

We, the undersigned,【name and address of the Bank】, hereby guarantee for the Seller's
fulfilling his obligations as stipulated 000,000.-- (Say … only) and undertake irrevocably to
pay to the Buyer within a period of thirty (30) working days from the date of receipt of the
Buyer's first written request.

The request for payment - if any - must be accompanied by a written statement indicating
that the Seller has not fulfilled his contractual obligations set out in the Contract.

 【name of the Bank】

     --- Sign   ---

This guarantee consists of 2 signed pages.




                                               60
Performance Guarantee No. 00000000 for 0,000,000.--

This Guarantee shall come into force and effect on and from the Effective Date of the
Contract.

This Guarantee shall be reduced to 00,000.-- (Say … only) = 5% of the Contract Price of the
Seller's portion at the date when the last Final Acceptance Certificate is issued or deemed to
have been issued.

This Guarantee shall expire on the expiry of the Warranty Period which is limited to one (1)
year from the date when the last Final Acceptance Certificate is issued or deemed to have
been issued.

After this Guarantee has expired, it becomes null and void regardless of whether it has been
returned to us by the Buyer or not.

Please return this Guarantee after its expiry date without any special request on our part.

 【name of the Bank】



     -- Sign   --




                                               61
Refund Bond


Refund Bond No. 0000000 for 0,000,000.--

With reference to the Contract No.【contract number】(hereinafter referred to as the
"Contract") signed between yourselves (hereinafter referred to as "the Buyer") and 【the
Seller's name and address】(hereinafter referred to as "the Seller") covering its portion for
【contract name】 for total Contract Price of 0,000,000.--(Say … only) for the Seller's
Portion, this amount shall be paid by the Buyer to the Seller.

We, 【name and address of the Bank】, issue this Guarantee in your favor up to

     000,000.--
    (Say … only)
covering the ten (10) percent of the total Contract Price for Equipment for the Seller's Portion.
This Refund Bond comes into effect when the down payment has been effected and is
received by the Seller.
We hereby assume the obligations to refund to you within thirty (30) days after receipt of
your written notice the above mentioned down payment plus interest computed on the basis of
interest rate of long term savings prevailing in the Republic of Korea at the time of refund of
the payment, however, limited to a maximum of 10% p.a. (Say ten percent per annum only) if
the Seller fails to effect any of the contractual deliveries as stipulated in Annex B of the
Contract due to the Seller's responsibility and the Seller, at our request, is unable to prove that
the deliveries have been made in the meantime.

 【name of the Bank】

   -- Sign     --




                                                62
Refund Bond No.000000 for 0,000,000.--

The Refund Bond shall be automatically released when the ten (10) percent of the Contract
Price of Seller's portion have been invoiced, which is proved by the Seller with copies of the
relevant documents.

This Refund Bond shall become null and void as soon as the Equipment corresponding to ten
(10) percent of the Contract Price of Seller's portion have been shipped and/or warehoused
and invoiced by the Seller.

Please return this Guarantee after its expiry date without any special request on our part.

 【name of the Bank】

   -- Sign --




                                               63
Annex D. Liquidated Damages for Failure of Performance
          Guarantee




                                   64

				
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