Common use of REFUND GUARANTEE Clause in Contracts

REFUND GUARANTEE. As security for refund of the instalments of the CONTRACT PRICE payable prior to delivery of the VESSEL, the BUILDER shall furnish the BUYER at least three (3) business days prior to the payment of the first instalment with a letter of guarantee of a Korean bank acceptable to the BUYER, covering the amount of the predelivery instalment(s) plus interest in favour of the BUYER. Such letter of guarantee shall have substantially the same form and substance as Exhibit A annexed hereto. The transfer and other bank charges of such refund shall be for the BUILDER’s account. The interest rate of the refund, as above provided shall be five per cent (5.0%) per annum from the date following the date of receipt by the BUILDER of the pre-delivery instalment(s) to the date of remittance by telegraphic transfer of such refund. If the BUILDER is required to refund to the BUYER the instalment(s) paid by the BUYER to the BUILDER as provided in this Paragraph, the BUILDER shall return to the BUYER all of the BUYER’s SUPPLIES as stipulated in Article XII which were not incorporated into the VESSEL and pay to the BUYER an amount equal to the cost to the BUYER of those supplies incorporated into the VESSEL.