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CONTRACT NO. DPES-27/2010 (1)

BETWEEN

GOVERNMENT OF THE UNION OF MYANMARMINISTRY OF DEFENCEDIRECTORATE OF PROCUREMENT

AND

DAEWOO INTERNATIONAL CORPORATIONSEOUL, KOREA

COVERING15,OOOMT OF DEFORMED BAR

J-Date: I September,2009

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CONTRACT NO.: DPES- 27/2010(1)t This contract is made in Nay Pyi Taw, the Union of Myanmar, on the day of

1s. September, 2009, between Directorate of Procurement, Ministry of Defence,by Maj. Gen. Win Than, Managing Director, Directorate of Procurement, Ministryof Defence, Nay Pyi Taw, Myanmar (hereinafter called "The Buyer"), of the one partand Messrs. Daewoo International Corporation Addressed at 84-11, Namdaemunno5(O)-Ga, lung Gu, Seoul 100-735, Korea by Mr. Jung Han Kim, Managing Director,Myanmar Daewoo Limited for and on behalf of Daewoo International Corporation(hereinafter called" The Seller") of the other part.WHEREAS, The Buyer is desirous of purchasing Deformed Bar for the use ofDefence Force of the Government of the Union of Myanmar and WHEREAS TheSeller has agree to supply Deformed Bar 15,000 MT ofwhich have been submitted toThe Buyer and specified in Appendix (A) hereto (hereinafter referred to as "TheStore") and which shall form part of this Contract upon the terms and conditionshereinafter appearing.1. SCOPE

The Seller shall sell 15,000MT of Deformed Bar at the price of USD 565.00CIF LO Yangon per metric ton and The Buyer agreed to buy Deformed Barat the price and total quantity above mentioned from The Seller. The detailedspecification of The Store, payment terms and delivery period are as shown inAppendix (A) of this Contract.

2. SPECIFICATION(a) QUALITYThe Store shall be of the quality and specifications described in Appendix (A).The breach ofwhich shall give The Buyer, the right to reject the Stores and treatthis Contract as repudiated.

(b) QUANTITYThe quantities of the Stores shall be such as are mentioned in Appendix (A) andthe Buyer does not bind himself to receive any quantities other than thoseshown therein.

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3. SHIPMENT AND DELIVERYa) Shipment of the Stores is to be effected by the Seller on end of September

20091 early of October 2009 or within one month from receiving of theBuyer's Lie. Partial Shipment and Transshipment are to be allowed.

b) The Seller shall intimate the Buyer by Fax to No. of "95 (032) 30241"approximate dates of arrival in Yangon, at least 10 (ten) days in advance inorder to facilitate clearance on arrival.

c) Final shipments of the Stores are to arrive in Yangon not later than mid ofNovember, 2009 unless Force majeure should be issued4. INSPECTION AND REJECTION

a) The Stores shall be inspected and/or tested by or on behalf of the Buyereither after delivery at the Receiving Depot or at the Seller's Works as maybe specified in, or by directions given in accordance with the Contract, andif found defective or inferior in quality to or differing in shape, form ormaterial from the requirements of the Contract shall be rejected by TheBuyer or his authorized representatives. The whole or any consignment ofthe stores therein shall be rejected if either 10% of the Stores or materialcomprised therein or samples taken indiscriminately from the bulk, arefound NOT to conform in every respect to the requirements of this Contractshall NOT be considered as having been delivered under this contract, andThe Seller shall within a reasonable period specified by the Buyer deliversatisfactory Stores in the conditions contained in Clause 13.

b) The stores so rejected after delivery shall be removed by the Seller at hisown expense in accordance with the conditions contained in Clause 10.c) The inspection of The Stores, after delivery at the receiving depot, on behalf

of the Buyer shall be taken as final.

d) Where the Buyer decides that inspection of the Stores shall be carried out atthe Seller's work, the Seller shall give to the Buyer or representatives of theBuyer full and free access to the said works as and when required for thepurpose and shall afford to the Buyer or such representatives all suchreasonable facilities, as may be required by him or them therefore and allappliances, materials and labor required for inspection purposes.

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5. CONTRACT PRICE5.1 The total contract shall be USD 8,475,000.00 (United States Dollars EightMillion Four Hundred and Seventy Five Thousand Only) CIF LO Yangon

port.5.2 The price of stores is mentioned in Appendix A to this contract and prices are

fixed, firmed and valid up to the time of final shipment.6. TERMS OF PAYMENT6.1 The Buyer shall open an Irrevocable Letter of Credit payable at sight for the

sum of USD 8,475,000.00 (United States Dollars Eight Million FourHundred and Seventy Five Thousand Only)being the total net CIF LinerOut Yangon value of the Stores through the Myanmar Foreign Trade Bank,Yangon, in favor of Messers. Daewoo International Corporation, 84-11,Namdaemunno 5(O)-Ga, Jung Gu, Seoul 100-735, Korea, within (10) TENBanking Days from the date of the receipt of the Performance Bank Guarantee,as per article 7 ofthis contract.Payment under this Letter of Credit shall be made to the Seller on presentationof the following documents,a) Negotiable Clean shipped onBoard Ocean Bill ofLading

(Marked Freight Prepaid)b) Commercial Invoicec) Packing List

- (1) Original& (3) copies

(I ) Original & (10) copies(I ) Original & (4) copies

d) Beneficiary's Certificate certifying that One Original Certificate of Origin,One Original Mill Test Certificate and One Original Certificate of Qualityand Quantity issued by SGS or International Independent Inspection Agencyhave been sent to the buyer within 10 working days after shipment date.

e) Insurance Certificate - (l) Original & (4) cop iesf) fax copy of acceptance letter issued by Myanmar Economic Corporation

confirmation arrival of stores at Yangon Port.- (I) Original & (4) copies

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6.2 Third party Documents acceptable.6.3 Charter Party Bill of Lading acceptable.

7. PERFORMANCE BANK GUARANTEEThe Seller shall furnish the Buyer (Directorate of Procurement, Yangon),confirmed by the Myanmar Investment and Commercial Bank, Yangon withinFive working days after signing of this contract the SWl1 of USD 423,750.00(5%) of Contract value from a Schedule Bank in the form prescribed by theBuyer as shown in Appendix "B" annexed hereto as security for the duefulfillment of this contract.

8. RECOVERY OF SUMS DUEWhenever under this Contract any sum of money shall be recoverable from orpayable by the Seller, the same may be deducted from the payment due and/orfrom any sum then due to the Seller under this Contract.

9. CORERESPONDENCEAll notice or information which is necessary to give concerning the presentContract, by one or the other parties, shall be express writing and addressed:In the case ofThe Seller to : Messrs. Daewoo International Corporation

And in the case ofThe Buyer to

84-11, Namdaemunno 5(O)-Ga,.Tung Gu, Seoul 100-735, KoreaFax No. 00822-759-3375

: Directorate of ProcurementMinistry of DefenceNay Pyi Taw,The Union ofMyanmarTelex No. :BM31760UNIDOP, YangonFax No. : 95 032 30241

If the Seller or The Buyer changes his address, the other party shall immediatelybe informed thereof by telex/fax. Acknowledge receipt must be within (8) eightdays by telex/fax.

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10. DEFAULT AND LIQUIDATED DAMAGEa) The Seller shall be responsible for any discrepancies in weight, quality, Size

and/or any other conditions of the Stores and also for shortages and damagesif any found at the time of discharge at Yangon Port and as reported by theOfficer-in Charge ofthe Receiving Depot, Yangon. The quantity and weightwill be checked at the time of discharge at Yangon Port by theoreticalweight basis.

b) The Buyer can claim from the Seller any major differences inweight/quantity. Such a claim must be raised upon full discharge of vesseland before vessel sails out from Yangon Port. This is to enable the supplierto lodge a claim on Ship Owners and Insurers in time.

c) It shall be the responsible of the Seller:i) To replace a his own expense the rejected Stores with the Stores which

conform in all respect to the quality and specifications described in theAppendix (A) and or the approved sample within a reasonable periodof supply to be determined by The Buyer.

ii) If The Seller fails to replace the rejected Stores within such period asmay determined by The Buyer, he shall be at liberty to purchase theStores of same or similar description from other sources to make upsuch deficiency and the Seller shall defray the extra cost and chargesattendant upon such purchase, AND

iii) To intimate The Buyer within fourteen days from the date of receipt ofinformation rejecting his Stores, the destination to which he wouldpropose to have his rejected Stores exported, as all Stores imported forDefense purpose must, after rejection be re-exported, failing whichThe Seller be liable to pay demurrage charges as per terms andconditions and at the rate/s to be determined by The Buyer AND

iv) To bare all expenditure incurred in exporting the rejected Stores to thedestination proposed by him and approved by the Buyer.

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v) To recall the Foreign Exchange in respect of thc rejected Stores, incase it has already be remitted.

d) In the event of the Seller being unable to arrange reshipment of the rejectedStores as specified in sub-Clause (c) (iii) above, due to circumstancesbeyond his control, such rejected Stores shall be disposed of in such manneras may be determined by the Buyer, and the proceeds thereof shall beutilized to defray expenses incurred in connection thereof. The balance, ifany, will be returned to the Seller, and any deposit amount shall be madegood by The Seller.e) If, under any and all circumstances (including Government restriction, nonreceipt of Export License, non release of materials) other than Forcemajeure, the Seller fails to deliver the Stores or any portion thereofcontracted for within the time or times specified in any of the Contractdocuments, and/or if the Stores or any portion thereof supplied by theContractor fails to conform to the required specifications;i) The Seller shall within seven days of receipt of notice rejecting theStores refund the full or any amount that might have been paid to himin settlement of this bill/so

11. LATE DELIVERY PENALTY

In the event of delay or failure to deliver the Stores within the stipulated periodof delivery due to causes solely attributable to the Contractor, penalty shall bepaid by the Contractor Supplier to the Purchaser Buyer as followsBetween (2) months 1% of the CIF Value of the Stores sodelayed/ to (4) months or not delivered.Between (4) months 3% of the CIF Value of the Stores soto (6) months delayed/or not delivered.More than (6) months 5% of the ClF Value of the Stores sodelayed/or not delivered and Purchaser mayat his option cancel whole or part ofContracts so delayed or not delivered.

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12. TERMINATION

The Buyer may terminate this Contract forthwith if the Seller if he fails tocomply with any or all of the conditions of this Contract, die or becomeinsolvent.

13. TRANSFER AND SUBLETTING

The Seller shall not give, bargain, sell assign sublet (except as is customary inthe trade) or otherwise dispose of this Contract or any part thereof or the benefitor advantage of this Contract or any part thereof to any person without the priorconsent in writing to the Purchaser may forth-with terminate this Contract andrecover from the Seller any loss resulting from such termination.

14. NO CLAIM TO COMPENSATIONIn the event of the Contract being terminated under any of the Clause of thisContract or otherwise, the Seller shall have no claim to compensation for anylose or inconvenience sustained by him by reason of his having purchased orproduced materials or entered into any engagements or made any advances onaccount of or with the view to the performance of this Contract.

15. INTERPRETATIONThis Contract shall be construed in all respects according to The Laws of theGovernment of The Union of Myanmar in all matters including validity,obligation, interpretation, construction, performance, and termination, butexcluding any other matters.

16. DISPUTES

If any question or difference whatsoever shall arise between the parities heretoor their respective representatives or between one of the parties hereto and therepresentatives of the other of them touching this Contract or any Clause orthing herein contained herewith or arising there out or the operation thereof or

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the rights, duties or liabilities of either party in connection with premises thenand on every such case unless the parties concur in the appointment of a singlearbitrators one to be appointed by each party to the difference or to an umpire tobe appointed by the arbitrators in accordance with the provisions of theArbitration Act, 1944 (Myanmar Act. IV of 1944) or any then subsistingstatutory modification thereof and such Arbitration shall take place in Yangon.

17. FORCE MAJEUREThe Seller shall not be responsible if performance of this Contract is preventedor delayed by causes beyond the Seller's control such as (but not limited to) Actof God, Act of Enemies, Action of the Government Fire, Hood, Strike,r.ockout, Riot or Civil Commotion, or delay in the receipt of proprietary articlesprovided by third parties due to such cause unless the Buyer or hisrepresentative shall determine that the proprietary articles to be supplied bysuch third parties are obtainable from other reasonable sources in sufficient timeto permit the Seller to meet the required delivery schedule.Should delays attributable to any of the above causes occur, the due date for thedelivery of part or parts of the Stores so affected shall be correspondinglyextended by a period or periods equal to that of the delay.But the Seller sha1J inform to the Buyer promptly about the beginning and endof the Force Majeure event and also furnish evidence of the occurrence of suchForce Majeure to the reasonable satisfaction of the Buyer by Cable, Fax orTelex, followed by a written report duly attested and authenticated by TheGovernment concerned.

18. DUTIES AND TAXESa) All duties and taxes in relation with this Contract, payable outside ofMyanmar shall be borne by the Seller.

b) All duties and taxes in relation with this Contract, payable in MYANMARaccording to the MYANMAR laws, shall be borne by the Buyer.19. COYIPLETION OF CONTRACT

a) The terms and conditions of this Contract will be deemed to be completelyfulfilled by the Seller only when the Stores mentioned in Appendix (A) havebeen delivered in full at the Yangon Receiving Depot, AND

b) When the terms and conditions of this Contract will be deemed to becompletely fulfilled.

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20. APPENDIXESAll Appendi xes so attached shall form an integral part ofthis Contract.(a) Appendix (A) Price, Delivery and Description of the Stores(b) Appendix (B) Bank Guarantee Form

21. COMING INTO FORCE OF THIS CONTRACTThis Contract shall come into force when signed by the parties and dulyauthenticated by witness.In WITNESS WHEREOF the parties hereto have hereunto at their respectivehands and seals the day and year first above written Signed, sealed and deliveryby:-

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Buyer

Maj. Gen. Win ThanManaging DirectorDirectorate of ProcurementMinistry of DefenceFor and on behalf of the Union of Myanmar

In the presence of:

_ c c32.c.3-(. ._ CoL ~ n (Rtd.)General ManagerMyanmar Economic CorporationIn the presence of:

__~ _ - - - - " . ; ; ~ ; c & . Lt-CoI. Nyunt ShweGeneral ManagerDirectorate ofProcurementMinistry ofDefenceThe Government of the Union of Myanmar

-So e- T';=-Office of the Quarter Master GeneralMinistry ofDefenceThe Government of the Union ofMyanmar

Seller

Jung Han KimManaging DirectorMyanmar Daewoo LimitedFor and on behalf ofDaewoo InternationalCorporation

In the presence of:

Sang oung KimDir ctorMyanmar Daewoo Ltd.

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APPENDIX "A"

Appendix (A) to Contract No. DPES-27/2010(1) dated Ik September, 2009 betweenthe Directorate of Procurement, Ministry of Defence, Nay Pyi Taw, Myanmar andMessrs, Daewoo International Corporation, 84-11, Namdaemunno 5(O)-Ga, Jung Gu,Seou1100-735, Korea.- Commodity-Speciflcation- Size/Qty

- Total Quantity- Price-Length- Origin- Total Amount

-Payment

- Invoicing- Shipment- Remarks

Deformed BarJIS G3112 SD295A(1) 10mml 10,000MT(2) 12mml 5,000MT15,000 MT (+0/-10%) more or lessUSD 565/MT CIF LO Yangon, Myanmar12meters (+1-100 mm)TurkeyUSD 8,475,000.00(United States Dollars Eight Million Four Hundred andSeventy Five Thousand Only)By an Irrevocable LlC at sight in favor of DaewooInternational Corporation, c.P.O Box. 2810, Seoul, KoreaBy basis on Theoretical WeightEnd of September 1Early of October 2009.The Contractor guarantee that the quantity and weight ofthe Stores to be supply under this contract will not belesser than the contracted quantity & weight by any means.

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APPENDIX "B"THROUGH AND CONFIRMED BY THE MYANMA FOREIGN

TRADE BANK, YANGON, MYANMARPERFORMANCE GUARANTEE FORM

To.The Directorate of ProcurementMinistry of DefenceNay Pyi Taw,Government of the Union of Myanmar.We hereby irrevocably and unconditionally Guarantee that the amount of USD423,750.00(United States Dollar Four Hundred Twenty Three Thousand SevenHundred and Fifty Only), equivalent to 5 % of the total Contract Price USD8,475,000.00(United States Dollars Eight Million Four Hundred and Seventy FiveThousand Only) for the supply of Deformei Bar as detailed in the Appendix (A) tothe Contract No. DPES-27/2010(1) dated I\. September, 2009 to the Directorate ofProcurement, shall be paid in whole to the Directorate of Procurement, Nay Pyi Taw,Myanmar without delay on your first written demand describing the effect of failure ofperforming the obligations of the Contract by the Seller.

Messrs. Daewoo International Corporation84-11, Namdaemunno 5(0)-Ga, lung Gu, Seoul 100-735, KoreaThis guarantee shall become effective upon the Seller's receipt of the letter of creditunder the Contract and shall automatically expire at the dates of the letter ofacceptance and the letter of confirmation issued by the Directorate of Procurement.Upon expiration, this guarantee shall be returned to us on the instant.

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