mecㆍviewer v1.5 :: General Terms and Conditions.pdf

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

Contract

For

Purchase and Supply

Contract No. : KARI-10-

Between

Korea Aerospace Research Institute

And

“ABC” Company

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

General Terms and Conditions

Table of Contents

Inspection and Acceptance.................................................................... 7

Drawings , M achine S peci fi cat ions and Approval P rocedures ............. 10

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

Annexes
Annex A.

Offer

Annex B.

Proforma of Bank Guarant ee Lett er

Annex C.

Final Accept ance Let ter (C erti fi cat e of Complet ion)

Annex D.

Technical Speci fi cati on

Annex E.

Power of Attorne y

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

Preamble

This Contract made on XXX XX, 2010 by and between Korea Aerospace Research
Institute(“KARI”) established under the law of the Republic of Korea with its principal
office at 45 Eoeun-Dong, Yuseong-Gu, Daejeon 305-333 Korea, and XXX(“Supplier”)
established under the law of XXX XXX with its principal office at XXX XXXX.

Witnesseth

Whereas, KARI is desirous of acquiring Equipment defined hereinafter;

Whereas,  Supplier  has  the  knowledge  and  experience  in  developing  and
manufacturing of the Equipment;

Whereas, Supplier is willing to supply and deliver Equipment to KARI;

Whereas,  KARI  desires  to  procure  and  Supplier  desires  to  supply  Equipment  in
accordance with the terms and conditions provided for hereinafter set forth ;

Now,  therefore,  in  consideration  of  the  premises  and  the  mutual  agreements  herein
contained, the parties hereto have agreed to the following:

Article 1.    Definitions

In  this  Contract  where  the  context  so  admits  the  singular  includes  the  plural  and  vice  versa  and  the
following terms shall be defined and construed as follows;

1.1

Equipment means all parts, accessories, facilities, hardware, and software to be supplied by
Supplier to KARI pursuant to this Contract.

1.2

Erection Tools means tools and other apparatus and/or instruments which are necessary for
the erection and commissioning of Equipment at site.

1.3

Contract means and includes all the terms, provisions, covenants and/or other conditions in
this Contract and its attachments.

1.4

Supervision means the supervising services to be rendered by Supplier and/or by the
supervisors for supervising and performing the erection and test run of the Equipment at site
in accordance with the Contract.

1.5

Supervisor means the person authorized by Supplier to perform the supervision.

1.6

Contract Specifications means any and all specifications and its addendum attached in

Annex D, such as the Purchase Specifications and the Standard Specifications for Machinery
and Equipment, and so forth, all of which shall be i ncorporated into and made binding as an
integral part of this Contract.

1.7

Site means the area where the Equipment is to be erected, and located in the Republic of
Korea.

1.8

Month, Week, and Day mean calendar month, calendar week and calendar day according to

the Gregorian calendar, respectively.

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

1.9

FCA and FOB means that Supplier fulfills his obligation to deliver when the goods handed

over to KARI's Carrier or Forwarding Agent at the named place to be interpreted in
accordance with the provisions of INCOTERMS, 2000.

1.10

Final Shipment means the date of shipment at the time when Supplier has shipped the final
Equipment, in case of partial shipment, on the vessels /aircraft at the port or airport
according to the Article 3 hereof, unless otherwise mutually agreed upon.

1.11

Completion of Work means the completion of installation and commissioning of
Equipment at KARI's site in Korea.

1.12

Services

mean

technology

transfer,

technical

consulting,

Inspection/Acceptance,

Supervision, technical training and other services with regard to this contract.

1.13

Technical Data means all data and information including, but not limited to, technical
writings, sound recordings, computer software, pictorial reproductions, drawings, and any
other data necessary for this contract.

Article 2. Contract Price and Payment Term

2.1

The Contract price for supply of the Services and Equipment shall be the sum of  USDXXXX
as referred to Annex A. Offer which covers any and all costs for supply of the Equipment to
the  point  of  FCA  XXX  International  Airport  or  FOB  XXX  Port  and  also  covers  all  the
Scope of Supplies and Services rendered by Supplier specified in  this Contract.

2.2

The  contract  Price  is  a  firm  and  fixed  amount  not  subject  to  any  escalation  or  to  any
adjustment  or  revision  for  any  reason  whatsoever,  including  but  not  limited  to  the  increase
of actual cost incurred by Supplier in the performance of the Contract.

2.3

The payment of Contract amount specified in Article 2.1 shall be made as per the following
payment schedule, unless otherwise agreed upon by the Parties;

a. First payment(USDXXX) for the 90% of total contract amount shall be made against and

upon the presentation of shipping documents as a proof of shipment of the Equipment.

b. Second and final payment(USDXXX) for the rest 10% of total contract amount shall be

made against the presentation of Final Acceptance Letter issued by KARI as set forth in
Article 8.5 hereof.

2.4

All payment under this Contract shall be made by KARI to Supplier in the currency
mutually agreed upon by the Parties by means of irrevocable letter of credit to be payable at
sight.

2.5

All banking charges incurred in Korea shall be borne by KARI, and those charges incurred
outside Korea shall be borne by Supplier.

2.6

Supplier  shall  send  to  KARI  one  original  and  one  copy  of  proforma  invoice  by  registered
airmail at least two weeks prior to the delivery date of the espective Equipment provided for
in  Purchase  Specifications  for  Machinery  and  Equipment.  The  pr oforma  invoice  shall  be
valid up to the time of delivery date of the Equipment.

Article 3. Delivery

3.1 All delivery terms used in this Order and all deliveries made are to be in accordance with Incoterms

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

2000.

Such delivery shall be based on:

(a) The Product shall be the same as specified on Annex D. Technical Specifications.

(b) The Partial Shipment shall not be permitted without written consent of KARI. When the

partial shipments are allowed under this Contract, the Contractor shall submit to KARI
the written schedule of partial shipments at the time of making Contract.

3.2

Supplier shall advise KARI of preliminary delivery schedule and estimated measurement
/weight information two(2) weeks prior to the delivery.

3.3

Unless  otherwise  mutually  agreed,  Supplier  shall  make  the  Equipment  ready  for  shipment
and  the  Equipment  shall  be  handed  over  to  the  KARI's  Carrier  or  Forwarding  Agent  on  the
delivery  of  FCA  XXX  International  Airport  or  FOB  XXX  Port  by  the  Delivery  Date  of
XXXX XXX, and then  Supplier  shall complete  the Installation/Acceptance Test  within one
month  from  the  date  of  customs  clearance  in  Korea  by  KARI,  except  in  the  event  of
Force Majeure as provided for in Article 26 hereof.

3.4 The date of KARI Forwarder’s Receipt shall be constructed as the date of shipment and

delivery date.

3.5

As soon as shipment is made, Supplier shall send (1) copy of each of the following shipping
documents to KARI by Fax(+82-42-860-2666) or E-mail(XXX@kari.re.kr).

a. KARI Forwarder’s Receipt
b. Commercial invoice
c. Packing list
d. Manufacturer’s Inspection Report

Article 4.    Extension of Delivery

KARI may have the right to extend the Delivery Schedule specified in Purchase Specifications of the
Inquiry Documents for the period of maximum six(6) months, if necessary, at its sole discretion, with
the one(1) month prior to written notice of extension to Supplier. Supplier shall, during the extension
period,  properly  protect  and  secure  the  Equipment  for  th e  avoidance  of  loss  and  damage  on  the
Equipment.

Article 5.    Vessel Arrangement

5.1

The necessary space booking on board vessel or aircraft for shipping the Equipment shall be
arranged by KARI, provided that, if requested by KARI, Supplier shall assis t KARI in such
arrangement of the space booking for the shipment of the Equipment with understanding of
use of KARI's Carrier or Forwarding Agent.

5.2

In case KARI arranges the vessel or aircraft by itself, KARI shall inform Supplier of the
vessel/aircraft name and its expected date of arrival at and departure from the shipping
port/air port by written notice.

5.3

In case the crane is needed for handling the Equipment at the time of loading, Supplier shall
bear the charges for such crane for loading Eq uipment.

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

Article 6. Packing and Marking

6.1

The Equipment shall be packed in seaworthy packing conditions according to international
commercial and industrial practice. Supplier shall apply proper anti -erosion and/or anti-rust
compounds or coating, protective water proof wrapping and/or packing, as the case may be.

6.2

The packages are to be properly identified with tags, labels, and/or inscriptions in
accordance with practice generally acceptable in the trade.

6.3

Upon consultation by the Parties, Supplier shall reimburse KARI for any and all expenses
incurred by KARI as a result of improper and/or faulty packing or marking.

6.4

Special Packing Requirements for Service/Spare Parts; Supplier shall make separate packing
for service and spare parts from main Equipment.

Article 7. Service/Spare Parts and Erection Tools

7.1

Supplier shall secure a supply of spare parts required to maintain the whole system for a
period of 10 years and shall update the list of spare parts in the event of modificat ion.

Article 8. Inspection and Acceptance

8.1

KARI shall have the right to carry out by itself or to appoint another qualified inspector for
inspection of the Equipment and general progress during the manufacture, packing and
preparation for shipment of the Equipment.

8.2

In  the  event  that  KARI  desires  to  dispatch  its  inspector  or  its  authorized  inspector  for
inspection of  any  or  all Equipment, Supplier  shall  make  due  arrangement  for  free access of
the inspector to Supplier's workshops or Sub -Supplier's workshops at reasonable time. Each
party shall bear its own costs related to these inspections.

8.3

After  inspection  provided  for  in  Article  8.1  hereof  is  carried  out  satisfactorily,  KARI  shall
issue  Pre-Acceptance  Letter  in  the  written  form  stating  tha t  the  Equipment  has  been  fully
proven  as  satisfactory  in  all  respects  of  the  requirements  of  the  Contract  Specifications
including  performance  and  it  will  be  pre-accepted  by  KARI.  If  KARI's  representative
countersigns  on  Supplier's  certificate  of  inspectio n,  such  certificate  shall  be  deemed  as  the
said Pre-Acceptance by KARI.

8.4

KARI shall be entitled to refuse to accept Equipment partially or totally if the inspection or
testing  as  aforesaid  in  the  Article  8.1  reveals  that  the  Equipment  is  not  in  accorda nce  with
the Contract Specifications or approved detailed descriptions, drawings and/or technical data
involved. In such case Supplier shall repair, replace or modify free of charge the Equipment
in  question  to  bring  it  into  conformity  with  the  Contract  Sp ecifications  and  approved
detailed  descriptions,  drawings  and/or  technical  data,  as  aforesaid,  and  shall  notify  KARI
when  the  same  are  ready  for  new  inspection  or  testing  which  shall  be  carried  out  under  the
same  terms  and  conditions  as  the  original  inspection  and  testing.  In  this  case,  the  costs
incurred by KARI due to such a reinspection including but not limited to, travel expenses of
KARI's  inspector,  any  special  reinspection  costs  and  so  forth,  shall  be  borne  by  Supplier.
Nevertheless,  the  failure  of  KARI  to  detect  nonconformity  with  the  Contract  Specifications
or  detailed  descriptions,  drawings  and/or  technical  data  during  any  such  inspections  or
testing shall not relieve Supplier of any of its obligations under this Contract.

8.5

KARI shall make the inspection upon the Equipment at KARI's site at its expense with

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

the presence of Supervisors or Supplier's Korean Agent according to the requirements of the
Inspection  and  Acceptance  Procedure  in  Standard  Specifications.  The  detailed  schedule  of
such  inspection  shall  be  mutually  decided  through  mutual  negotiation  by  the  Parties.
Immediately after the try-out and commissioning at KARI's site, KARI shall issue the Final
Acceptance  Letter in the  written  form  as  attached  Annex .  C  stating that the  said  Equipment
has  been  fully  proven  as  satisfactory  in  all  respects  of  the  requirements  of  the  Contract
Specifications as referred to Annex D.

8.6 In case of missing/shortage item or failure to meet guaranteed operating specifications or if

the  tests  reveal  defective  or  faulty  materials,  design  and/or  workmanship  attributable  to
Supplier  and/or  its  Sub-Suppliers,  Supplier  shall,  at  Supplier's  cost  including  airfreight,
insurance,  duties  and  taxies  for  customs  clearance  in  Korea,  promptly  make  all  necessary
redesign,  supply  and/or  workmanship  required  to  remedy  such  faults  or  defects  in  order  to
assure  that  the  specifications  are  conformable  to  the  requirements  set  forth  in  Contract
Specifications.  Once  the  defects  have  been  corrected,  the  tests  shall  be  repeate d  as  many
times  as  necessary  until  the  design  specifications  as  aforesaid  are  into  conformity.  Costs
incurred in connection with any repeated tests, whether direct or indirect, shall be borne by
Supplier.

Article 9. Performance Guarantee

9.1

Supplier  shall  guarantee  that  the  Services  and  Equipment  shall  have  the  performance
confirming  to  the  requirements  specified  in  the  Contract  Specifications.  Such  performance
shall be proved by means of the provisions set forth in Article 8.  hereof, under the additional
condition  that  KARI  shall  be  satisfied  with  all  documentation  provided  by  Supplier,  other
than  the  Contract  Specifications,  and  that  performance  parameters  based  on  such  data  or
documentation are established by testing and inspection.

9.2

Supplier  shall  be  released  from  this  guarantee  by  the  Final  Acceptance  from  KARI  as
provided for in the Article 8. Supplier shall provide its engineer at its own cost to rectify all
the  defects  and/or  deficiencies  of  the  Equipment,  if  any,  to  fulfill  the  requirements  of
Inspection  and  Acceptance  Procedure  in  accordance  with  the  requirements  of  the  Contract
Specifications, if and when  such defects and/or deficiencies have been proven and admitted
as not attributable to KARI.

9.3

In  the  event  that  Supplier  does  not  commence  rectification  of  such  proven  and  admitted
defects  and/or  deficiencies,  or  does  not  complete  the  said  rectification  with  reasonable
diligence,  then  KARI  may  at  its  option  rectify  the  defects  and/or  deficiencies  at  Supplier's
expense.  In  the  latter  case,  Supplier  shall  reimburse  KARI  for  all  costs  incurred  in
connection  with  KARI's  rectification  of  the  defects  and/or  deficiencies  within  thirty(30)
days of receipt of KARI's written invoice setting forth such costs.

Article 10. Warranties

10.1 All Services shall be performed according to the highest professional industrial standards

and  shall  conform  to  the requirements of  this  Contract and  shall  comply  with  all applicable
laws  and  regulations.  All  items  and  Services  provided  or  delivered  by  Supplie r  to  KARI  or
any person designated by KARI shall be sufficient, correct, and complete to enable KARI or
its  Subcontractors  to  perform  their  work  for  this  contract.

Supplier hereby warrants the

Services  and  Equipment  against  deviation  from  the  Contract  Spec ifications  and  against
defects  in  workmanship,  material  and  design  when  the  Equipment  is  used  under  normal
operation and proper maintenance conditions. Supplier's obligation under this warranty shall
be  discharged  by  furnishing,  to  KARI's  site  at  Supplier' s  expense  including  airfreight,
insurance, duties, and taxies for customs clearance in Korea, a similar part to replace any of

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

Supplier's  supply,  or  repairing  the  defective  part  which,  within  the  Warranty  Period
specified  as  under,  proves  to  have  been  defective  in  manufacture  and  design.  Supplier  may
at  its  option  inspect  the  defective  part  or  request  the  return  of  defective  part  at  Supplier's
cost in order to confirm KARI's claim.

10.2

Warranty Period hereof shall be 2 years after the date of Final Acceptance provided for in

the Article 8.5. and Warranty shall cover the replacement of faulty parts, the labor required
for repair, traveling cost and all necessary costs.

10.3 Such part of the Equipment as found defective and replaced or repaired shall hav e the period

of  warranty  for  replaced  or  repaired  part  of  six(6)  months  renewal  from  the  date  of
replacement  and  repair,  if  and  when  the  claim  for  replacement  or  repair  is  established  and
proved  during  the  Warranty  Period  as  set  forth  in  the  Article  10.2  Such  six(6)  months
renewal  of  warranty  shall continue in effect after  the termination of  the Warranty  Period as
set forth in Article 10, but in no event shall the Warranty Period be deemed shortened due to
such six(6) months renewal.

10.4

The warranty provided for in this Article shall not apply to ordinary wear and tear or

consequential damages during the Warranty Period

10.5

In the event that Supplier does not commence immediately the rectification on such proven

or  admitted  defects  after  receipt  of  notice  from  KARI,  or  does  not  complete  the  said
rectification  with  reasonable  diligence,  KARI  may,  at  its  option,  correct  the  defects  at
Supplier's expense. In the latter case, Supplier shall reimburse KARI for all costs incurred in
connection  with  KARI's  rectification  of  the  defects  and/or  deficiencies  within  thirty(30)
days after receipt of KARI's written invoice setting  forth such costs.

10.6

Notwithstanding anything contained herein elsewhere, Supplier shall indemnify, defend and

hold harmless KARI, its officers, directors, agents and employees from and against any and
all property and/or personnel losses, injuries, deaths and/or damage arising from the
defective part or parts of Equipment.

10.7

Unless otherwise specifically agreed upon by the Parties, each Equipment Assembly

including  all  accessory  materials  and/or  equipment  shall  be  treated  as  single  unit  and
Supplier accepts total overall responsibility for all components and the coordination of such
components  as  a  single  unit.  The  fact  that  certain  components  are  not  of  Supplier's
manufacture or that Sub-Suppliers have been so designated by KARI shall in no way relieve
Supplier  from  full  responsibility  for  the  entire  supply  of  this  Equipment.  Supplier  shall
accept  unit  responsibility  for  the  supply  of  each  Equipment  Assembly  including  all
accessories  to  the  same  extent  as  if  the  entire  supply  of  each  component  were  of  Supplier's
own design and manufacture.

Article 11. Performance & Warranty Bond

11.1

Supplier shall furnish to KARI within three(3) weeks from the date of signing this Contract,

an  unconditional  and  irrevocable  letter  of  guarantee  issued  by  first  class  international  bank
acceptable  to  KARI  for  a  sum  equivalent  to  ten(10)  percent  of  total  Contract  amount.  Such
letter  of  guarantee  shall  be  drawn  in  favour  of  KARI  and  advised  to  KARI  through  Woori
Bank  (Daejeon  Branch  at  1495  Dunsan-Dong  Seo-Gu  Daejeon,  Korea  TEL:+82-42-488-
9704)  and  shall  be  valid  till  the  expiry  date  of  Warranty  Period  provided  for  in  the  Article
10.2 plus one(1) month thereof. In case Supplier fails to furnish the requisite bank guarantee
as referred to the Annex B-1, then KARI may have the right to terminate this Contract.  Or, if
it  is  impossible  for  the  Supplier  to  furnish  bank  guarantee,  Supplier  shall  d eposit  the
guarantee  amount  to  KARI  during  the  warranty  period.  KARI  shall  refund  the  deposit
amount to the Supplier when the period is ended without any critical claims .

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

11.2

Otherwise Supplier’s Korean Agent shall establish the Performance Bond in the form of

cash(Korean currency), certified check or surety bond issued by the Korean Guarantee
Insurance Company payable in Korean Won.

11.3 KARI shall have an unqualified option under this guarantee to invoke the banker's guarantee

and claim the amount thereunder in the event of Supplier's failing to honour any of the
commitments entered into under this Contract and/or in respect of any amount due from
Supplier to KARI.

11.4

Upon  the  KARI's  issuance  of  Final  Acceptance  Letter  for  the  Equipment   as  referred  to  the
Annex C, the above bank guarantee shall be considered to constitute Supplier's warranty for
the  Equipment  delivered  by  Supplier  and  its  due  performance  in  accordance  with  the  terms
and conditions hereof.

Article 12. Service Conditions

12.1

Maintenance  services  shall  be  provided  by  Supplier  during  the  equipment  lifetime  at
minimum  expense.  For  5  years  the  basic  and  extended  warranties  expire,  two  (2)  kinds  of
maintenance  service  are  requested.  One  is  for  the  regular  maintenance  and  the  other  is  for
the urgent maintenance during a test period of KARI.

12.2 For the regular maintenance, the deadline for action is 2 weeks(for A/S team in Korea, 1

week) after receipt of service notification from KARI. For the urgent maintenance, the
deadline for action is 5 days (for A/S team in Korea, 2 hrs) after receipt of service
notification from KARI.

12.3 To meet the deadline of the urgent maintenance service, KARI will notify the Supplier of

the test starting date and the 2weeks period before the test date. According   to this, Supplier
shall  stand  by  the  maintenance  at  its  own  cost.  The  number  of  the  urgent  maintenance
service requests is limited to 5 times during the entire 5 year  maintenance period.

12.4 Supplier shall immediately answer the KARI’s operational and maintenance questions by

FAX or telephone calls until the system is dismantled by KARI.

Article 13. Liquidated Damages for Late Shipment

13.1 If the Delivery Dates and Installation/Acceptance Test set forth in Contract Article 3.3 are

not met, KARI shall have the right to apply a liquidated damages, not by way of penalty, of
zero point two(0.2) percent per day of the total Contract price unless such delay is an event
of Force Majeure, and shall be deducted from the amount of the Letter of Credit at
negotiation. However, the amount of said liquidated damage shall not exceed ten(10) percent
of the Contract price of the Equipment.

13.2

In the event  that  the  sum  of  liquidated damages  for late  shipment  as  set  forth in  the  Article
13.1  exceeds  ten(10)  percent  of  the  Contract  price  of  the  Equipment  and  the  Equipment  or
any part thereof still has not been delivered, KARI shall have the option to elect to come to
a new agreement with Supplier with regard to times of shipment and/or additional liquidated
damages,  however,  the  liquidated  damages  which  have  accrued  against  Supplier  shall
nevertheless be paid by Supplier to KARI.

Article 14. Drawings, Machine Specifications and Approval Procedures

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

14.1

Supplier shall provide KARI with general and detailed drawin gs and technical data
sufficient to define the civil works, foundation requirements for construction, erection, start -
up, operation and maintenance for the Equipment and the components thereof as per the
Annex D, the Technical Specifications.

14.2

In case a Contract require approval of the drawings prior to manufacture , the Contractor

shall submit detailed manufacturing drawings to KARI for approval within the period
designated in the Technical Specification as per the Annex D.

Article 15.    Reports for Work Progress

Supplier shall submit the overall progress status report in the form of bar -chart within thirty(30) days
after  the  contract  and  thereafter,  Supplier  shall  furnish  KARI  with  monthly  progress  reports  on  this
Contract status including the manufacturing status of all Equipment and the preparation for shipment.
KARI  will  have  the  right  to  review  any  internal  statements  of  documentation  of  Supplier  and/or  its
Sub-Suppliers to assure that progress conforms to the said reports.

Article 16.    Sub-Contracting

16.1

Supplier  shall  not  sub-contract  any  of  the  works  related  to  manufacture,  assembly  and  sub -
assembly  of  Equipment  for  major  parts  to  any  third  party  without  KARI's  prior  written
consent  thereof,  provided  that  KARI  shall  not  unreasonably  withh old  the  sub-contract  by
Supplier.

16.2

Supplier shall be fully responsible for any sub -contracted work to any third party including
the Sub-Suppliers nominated or recommended by KARI.

Article 17. Permits

17.1 For the work to be undertaken by each party pursuant to the provisions of this Contract, each

party  shall  obtain,  acquire  and/or  procure  on  its  own  account  all  necessary  permits,  visas,
certificates  and/or  licenses  required  by  all  applicable  laws,  regulations,  ordinances  and/or
rules  of  the  state,  municipality,  territory  or  political  subdivision  where  the  work  pertaining
to  this  Contract  is  performed  or  required  by  any  other  duly  constituted  public  authority
having jurisdiction over the place where    the work pertaining to this Contract is perfor med
and  further  agree  to  indemnify  the  other  party  from  and  against  any  and  all  liability  and/or
loss  incurred  by  the  other  party  by  reason  of  asserted  or  established  violation  of  any  such
laws,  regulations,  ordinances,  rules  and/or  requirements.  However,  each  party  shall  assist
the  other  party  in  obtaining  such  necessary  permits,  visas,  certificates  and/or  licenses
mentioned in above with a reasonable care.

17.2

Any  failure  or  delay  of  Shipment  caused  by  any  failure  or  delay  of  obtaining  permits  from
all  the  necessary  Governmental  authorization,  other  than  Korean  Governmental
authorization,  shall  not  affect  any  clause  of  this  contract  and  Supplier  shall  take  the
responsibilities for any results from the failure or delay of obtaining any  relevant permits or
licenses  and  return  One  hundred  percent(100%)  of  the  amount  paid  by  KARI  under  this
Contract .

Article 18. Confidentiality

Each party shall confidentially treat all documents, data, materials and information supplied by one to
the other, and shall not disclose the above to any third party, and shall not use the above for any other

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

purpose than for the performance of this Contract without prior written consent from the other party.
However this Confidentiality obligation shall not be apply to the infor mation which is made available
to the general public.

Article 19. Industrial and/or Intellectual Property Rights

19.1

KARI acknowledges and Supplier guarantees that all the Industrial and/or Intellectual
Property Rights related to the Services and Equipment provided are owned by Supplier.

19.2

Supplier  shall  indemnify  KARI  from  and  against  any  and  all  disputes  or  claims  brought
forward  by  a  third  party  on  the  ground  that  KARI's  use  of  the  Services  and  Equipment
supplied  by  Supplier  hereunder  has  infringed  any  Industrial  and/or  Intellectual  Property
Rights of the third party.

Article 20. Language

Any  and  all  documents  in  connection  with  this  Contract  shall  be  made  in  English.   However,  when
mutually agreed upon by the Parties, the documents may be  prepared in other language than English.

Article 21.    Taxation

21.1

Any and all duties and taxes including but not limited to customs duties, income taxes, sales

taxes,  value  added  taxes  and  any  other  tax-like  charges  imposed,  levied  or  charged  to
Supplier  in  outside  of  Korea  shall  be  for  account  of  Supplier.  Any  other  duties  and  taxes
imposed,  levied  or  charged  in  Korea  shall  be  for  account  of  KARI,  except  the  duties  and
taxies  regarding  the  aforesaid  Article 8. Inspection, 10. Warranties  and  12. Supervision and
Training Services which are already included into total contract amount.

21.2 Any and all charges including but not limited to banking charges, cable charges, forwarding

charges and the like to be incurred by each party shall be for account of each party
respectively.

Article 22. Title and Lien

22.1 Title and risk of the Equipment shall be passed to KARI by Supplier upon shipment of the

Equipment by Supplier to KARI.

22.2

Title passed by Supplier to KARI shall be free and clear of any li en, restriction, reservation,

security interest and/or encumbrance.

Article 23. Notice

Any and all notice to be given to either party shall be given to the following addresses by registered
airmail or other telecommunication media. Either party may cha nge its address by giving prior notice
to the other party in the manner provided for herein.

          For KARI      :
                  COMMERCIAL ITEM                                        TECHNICAL ITEM
                  Mr. Hang-Seok Cho                                              Mr. Jong-Min Lim
                  International Contract Department                       Space Environment Test Department

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

                  Tel : +82-42-860-2659                                          Tel : +82-42-860-2562
                  Fax : +82-42-860-2666                                         Fax : +82-42-860-2234
                    (E-mail address : withu4ever@kari.re.kr)                    (E-mail address : acoust@kari.re.kr)

          For Supplier    :

Tel :

                       Fax :

Article 24.    Assignment

This  Contract  and  any  right  or  obligation  hereunder  shall  not  be  transferable  or  assignable  by
Supplier to a third party without the prior written consent of KARI.

Article 25.    No Waiver

The  failure  of  KARI  at  any  time  to  exercise  any  of  its  right  hereunder  except  for  rights  specially
limited  as  to  the  dates  of  exercise  thereof,  shall  not  be,  or  not  be  construed  to  be,  a  waiver  of  such
rights nor prevent KARI from subsequently asserting or exercising such rights.

Article 26.    Force Majeure

26.1       Force Majeure hereunder shall be constructed as follows: War, preparation for war, blockade,

revolution, insurrection, mobilization, civil commotions, riots, earthquakes, tidalwaves,
typhoons, storms, floods, or any other conditions of similar nature beyond reasonable
control of the Parties.

26.2 Should any event or circumstances of Force Majeure arise upon Supplier, Delivery Date

stipulated in this Contract shall be equally extended for a period which such events or
circumstances will last provided that notice is given by the party claiming Force Majeur e as
required in Article 26.3.

26.3 Within fourteen(14) days from the date of commencement of events or circumstances that

may  cause  any  delay  in  delivery  of  the  Equipment  by  Force  Majeure  on  account  of  which
either party claims that it is entitled, under the Contract, to any extension of the time for the
performance  of  the  Contract,  such  party  shall  advise  the  other  in  writing  of  the  date  when
such  delay  commenced,  and  the  reasons  therefor e  as  enumerated  in  this  Contract;  likewise,
within fourteen(14) days after the delay ends, either party shall advise the other in writing of
the  date  when  such  delay  ended,  and  shall  also  specify  the  redetermined  time  by  which  the
performance of the Contract is to be completed. In case one party fails to acknowledge such
notification hereunder within fourteen(14) days after receipt thereof, the date of dispatch of
notice in writing shall be considered the date of notification.

26.4

Force  Majeure  shall  be  established  by  reasonable  written  evidence  of  the  Chamber  of
Commerce  and  Industry  of  the  country  of  the  party  claiming  Force  Majeure  which  shall
accompany the written notification of Force Majeure submitted pursuant to Article 26.3.

Article 27. Severability and Enforceability

27.1 If any part or parts of this Contract is or are not effective by any reason whatsoever, the

other effective parts of this Contract shall not be influenced by such ineffectiveness. In such

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

a case, the Parties shall amend, modify or improve such an ineffective part or parts of this
Contract immediately to make it effective.

27.2 If any provision of this Contract is held void or unenforceable subject to above severability,

the  Parties  hereto  shall  consult  with  each  other  in  good  faith  to  agree  upon  a  remedy
measure  with  a  view  to  continuing  and  maintaining  this  Contract.  In  case  any  remedial
measure is not agreed upon by the Parties hereto within three(3) months, this Contract shall
become null and void, retroactive to the date when the cause thereof was arisen.

Article 28.    Modification, Addition and Amendment

No  modification,  addition  and/or  amendment  in  the  terms  and  conditions  hereof  shall  bind  on  the
Parties hereto unless these are reduced to writing and duly agreed upon by the Parties hereto.

Article 29.    Independent Contractor

Each  party  shall  act  as  an  independent  contractor,  and  neither  party  shall  be  deemed  as  a
representative, agent, employee or the like of the other party by this Contract.

Article 30.    Governing Law and Arbitration

30.1    This Contract shall be construed and governed by the laws of the Republic of Korea.

30.2    Any disputes, controversies, or differences which may arise between the Parties, out  of or in

relation  to  or  in  connection  with  this  Contract  or  for  the  breach  there  of,  shall  be  finally
settled  by  arbitration  in  Seoul,  Korea  in  accordance  with  the  Commercial  Arbitration  Rules
of  The  Korean  Commercial  Arbitration  Board  and  under  the  Law  of  Korea,  the  award
rendered by the arbitrator(s) shall be final and binding upon both Parties concerned.

Article 31. Termination

31.1

KARI  shall  have  the  right  to  terminate  this  Contract  at  any  time,  which  termination  hereof
shall  be  effective  immediately  upon  its  written  notice  to  Supplier  without  prejudice  to  any
other  provisions  hereof  in  case  of  insolvency  of  Supplier,  commencement  of  liquidation  of
its  business,  appointment  of  any  receiver  or  filing  of  bankruptcy  or  corporate  organization
petition  by  or  against  Supplier.  In  this  case  Contractor  shall  return  One  hundred
percent(100%) of the amount paid by KARI under this Contract

31.2

KARI may terminate this Contract, which termination hereof shall be effective immediately

upon its written notice to Supplier in case of Supplier's material violation, non -performance
or  default  of  any  provision  of  this  Contract  which  has  not  been  cured  to  the  satisfaction  of
KARI  within  ninety  (90)days  after  the  written  notice  given  to  Supplier  specifying  such
violation,  non-performance  or  default.  In  this  case  Contractor  shall  return  One  hundred
percent(100%) of the amount paid by KARI under this Contract

Article 32.    Entire Agreement

This Contract represents the entire agreement between the Parties hereto with respect to supply of the
Equipment  and  Services  as  per  the  Scope  of  Supplies  spe cified  in  contract  Specifications  and
supersedes  any  other  agreement  or  understanding,  written  or  verbal,  that  the  Parties  heretofore  may
have had. No modification, no future representation, promise or agreement shall be binding on either

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

party unless made in writing and signed on its behalf by its duly authorized representative.

Article 33. Effective Date

33.1

The effective date of this Contract(“EDC”) is the date on which all of the following
conditions have been satisfied:

(a) The duly authorized representatives of the Parties have signed this Contract; and
(b) The appropriate governmental authorities of the Republic of Korea and Supplier ’s

country have duly approved this Contract, if required.

33.2

Any amendment to this Contract shall be effective upon signature by the duly authorized
representatives of both Parties and the approval of such amendment by the Government of
the Republic of Korea, if required.

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

IN  WITNESS  WHEREOF,  the  Parties  hereto  have  executed  this  Contract  in
duplicate  in  English  by  causing  these  presents  to  be  signed  by  their  duly  authorized
representatives as of the day and year first above written.

Signed for and on behalf of KARI

Signed for and on behalf of Supplier

----------------------------------------------------

--------------------------------------------------

By : Korea Aerospace Research Institute By : ABC Company
Name

: Joo-Jin Lee, Ph.D.

Name

Title : President

Title :

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

Annex A.

Offer

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

Annex B.

Proforma of bank guarantee letter

Date :

Korea Aerospace Research Institute
45 Eoeun-Dong Yuseong-Gu, Daejeon,
305-333, Korea

Attention : Hee-Seok Kwon
Head of International Contract Department.

.

Dear Sir,

At the request of our Customer, (Supplier and Address), we hereby establish our irrevocable Letter of Cr edit
committing unconditional payment to the beneficiary in favor of Korea Aerospace Research Institute(KARI)
in the aggregate amount of (10% of Contract Value) Say, (United States Dollars Written Amount), expiring at
our counters in (Bank's location), covering the performance by (Supplier) for Contract Number(Contract
Number) to supply (Contract Description).

Up to the face amount of this Credit in the aggregate, the reimbursement is available to you upon presentation
of your Draft(s) drawn on us At Sight when each Draft is accompanied by the following documents :

Your invoice to (Suppliers) in the Amount of the Draft presented :

2) The written statement signed by a purportedly authorized officer of KARI, seating the Amount of the

invoice is due and payable to KARI under the order and that (Supplier) is in default of its obligations to
KARI thereunder:

A copy of your telex sent to (Supplier) dated at least ten(10) days prior to the date of the Draft presented,
simple notifying (Supplier) that it is in fault under the Order.

All bank charges are for the account of (Supplier).

This bond shall be valid until Warranty Period plus one month.
Thereafter, this bond shall be null and void, even if it is not returned to us.

We hereby agree with you that all Drafts drawn under and in compliance with the Terms and Conditions of
this  Credit  will  be  duly  honored  if  drawn  and  presented  at  our  counters  on  or  before  the  expiration  date  of
this Credit.

This  Letter  of  Credit  is  subject  to  the  Uniform  Customs  and  Practice  for  Documentary  Credits  (1993
Revision) International Chamber of Commerce Publication No.500.

                                                                                  (Bank Name)

                                                                                  By :

                                                                                  Title:

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

Annex C.

Final Acceptance Letter

(Certificate of Completion)

CONTRACT NO.: ______________________

L/C NO.:______________________

Dear Mr.__________________;


We,  Korea  Aerospace  Research  Institute(KARI)  in  Korea  certify  that  the  captioned
equipments have been successfully tried-out and/or tested at  KARI's job  site by ______
in  accordance  with  the  Contract  Article  8,  and  are  issuing  this  certificate  to  ABC
Company  for  the  negotiation  of  10%  (__________)  with,  ___________,  the  advising
bank.

Confirmed by :

________________________
Hang-Seok Cho
International Contract Department
KARI

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

Annex D.

Technical Specification

KARI / ABC Company KARI Proprietary

Korea Aerospace Research Institute

Annex E.

Power of Attorney

"Sample"

Date :

Ref. No. :

Power of Attorney

To : Korea Aerospace Research Institute(KARI)

45 Eoeun-Dong Yuseong-Ku Daejeon Korea

Enquiry No. : KARI-

Know all persons by these presents, that the under signed doses hereby nominate, constitute and appoint

(Korean Agent Name/Agent Representative Name) is true and lawful attorney in fact, for the (Foreign

Manufacturer or Supplier Name) in its name, place and stead, and for its use and benefit ;

1. To sign the contract and establish performance bond to KARI on behalf of (Manufacturer Name)

2. This power of attorney shall remain in full force and effect until six months from below date.

3. In witness whereof, the (Foreign Manufacturer or Supplier Name) has caused this power of attorney to

be executed by its duly authorized officer as of (specific date).

Signature __________________________

Name :

Title :