MODEL TERMS OF CONTRACTS

FOR SALE OF GOODS

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For Sales Between

Korean and Chinese Firms and Corporations

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Contract Number :

Date of Signing of Contract :

Place of Signing of Contract :

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Seller : ...........................................................................................................

Address : .......................................................................................................

Country of Incorporation : ...............................................................................

Telex : ...........................................................................................................

Fax : ..............................................................................................................

Buyer : ..........................................................................................................

Address : .......................................................................................................

Country of Incorporation : ..............................................................................

Telex : ..........................................................................................................

Fax : .............................................................................................................

The Buyer and the Seller, through friendly negotiation, have signed

this Contract on a basis of [ ]FOB or [ ] CFR or [ ] CIF or [ ] FCA or [ ] CPT or [ ] CIP and agreed to the terms and conditions stipulated below.

1. Name of Commodity :

2. Specifications/Quality :

3. Units :

4. Quantity :

[with ( ) % more or less both in amount and quantity

allowed at [ ] the Seller’s , or [ ] the Buyer’s option]

5. Unit Price FOB/CFR/CIF/FCA/CPT/CIP :

6. Total Amount :

[If the delivered quantity is more or less than ( )% of the

quantity as defined in item 4, the price shall be adjusted

correspondingly. ]

7. Country of Origin and Country of Manufacture :

8. Shipping Mark :

9. Shipment

9.1 Time of Shipment :

9.2 Port of Shipment :

9.3 Port of Unloading :

9.4 "On - deck" shipment [ ] is, or [ ] is not allowed.

9.5 Transhipment [ ] is, or [ ] is not allowed.

9.6 Partial shipment [ ] is, or [ ] is not allowed.

9.7 [ ] Container shipment

9.8 Final destination :

10. Terms of Payment

10.1 Method of Payment (*Select one of the following methods

of payment)

(1) Letter of Credit

[ ] 10. 1. 1 Sight payment

The Buyer shall,

[ ] ( ) days prior to the first day of the time of

shipment specified in this Contract,

[ ] within ( ) days after the execution of this Contract

establish in favor of the Seller an irrevocable letter of cre-

dit (L/C) payable at sight issued by

(bank’s name), by

[ ] telex,

[ ] SWIFT,

[ ] mail,

[ ] brief telex and mail

in the amount of

,

the contents of which shall be in conformity with the terms

of this Contract.

The letter of credit shall not expire until ( ) days after the

last day of the time of shipment specified in this Contract.

The statement "this credit is subject to Uniform Customs

and Practice for Documentary Credits, 1993 Revision,

International Chamber of Commerce Publication No. 500"

shall be contained in the letter of credit.

[ ] 10. 1. 2 Deferred Payment

The Buyer shall,

[ ] ( ) days prior to the first day of the time of

shipment specified in this Contract,

[ ] within ( ) days after the execution of this

Contract,

establish in favor of the Seller an irrevocable letter of

credit (L/C) payable ( ) days

after

, issued by

(bank’s name), by

[ ] telex ,

[ ] SWIFT ,

[ ] mail ,

[ ] brief telex and mail

in the amount of

the contents of which shall be in conformity with the terms

of this contract.

The letter of credit shall not expire until ( ) days after the

last day of the time of shipment specified in this Contract.

The statement "this credit is subject to Uniform Customs and

Practice for Documentary Credits, 1993 Revision, International

Chamber of Commerce Publication No. 500" shall be contained in the letter of credit.

(2) Collection

[ ] 10. 1. 3 Document Against Payment (D/P)

After shipment, the Seller shall deliver a sight bill (s) of

exchange drawn on the Buyer together with the required

documents to the Buyer through a bank. The Buyer shall

effect the payment immediately upon the first presentation

of the bill (s) of exchange and the required documents,

i . e . D/P.

[ ] 10. 1. 4 Document Against Acceptance (D/A)

After shipment, the Seller shall deliver bill (s) of exchange

drawn on the Buyer, payable

days after

,

together with the required documents to the Buyer through

a bank for acceptance. The Buyer shall accept the bill (s)

of exchange immediately upon the first presentation of the

bill of exchange and the required documents and shall effect the payment on the maturity date of the bill (s) of exchange,

i . e . D/A.

(3) Remittance

[ ] 10. 1. 5

The Buyer shall,

[ ] within

days after the receipt of the required document,

[ ] within

days after the date of the Bill of Lading,

pay the invoice value of the goods to the Seller’s account

with the bank designated by the Seller by means of

[ ] T/T (Telegraph Transfer).

[ ] M/T (Mail Transfer).

[ ] D/D (Demand Draft).

10. 2 Documents Required

The following documents shall be prepared by the Seller and

submitted to the Buyer :

1. Bill of exchange drawn on

[ ]

(bank’s name, on L/C basis)

[ ] the Buyer (on collection basis)

2. Transport document (select one of the following) :

[ ] 1) clean on board ocean bill of lading made out to

[ ] order, or

[ ] to order of

and blank endorsed

marked freight

[ ] prepaid/paid, or

[ ] to collect

notifying [ ] consignee, or

[ ]

[ ] 2) non-negotiable sea waybill made out to

market freight [ ] prepaid/paid, or

[ ] to collect

notifying

[ ] 3) multimodal transport document

[ ] 4) air transport document (airway bill/air

consignment note)

[ ] 5) railway transport document

[ ] 6) courier and post receipts

3. Other document(s)

[ ] 1) commercial invoice

[ ] 2) insurance policy/insurance certificate

[ ] 3) quality inspection certificate/inspection

report/analysis certificate

[ ] 4) certificate of origin

[ ] 5) packing list

[ ] 6) weight list

[ ] 7) notice of shipment/shipping advice

Documents

in

originals and

copies

4. Other documents (if required) :

10. 3 Banking Charges

Depending upon the method of payment selected pursuant to

Clause 10. 1 above, the Buyer shall bear all banking charges

incurred in the country of

[ ] L/C issuing bank (in case of payment by L/C),

[ ] Collecting bank (in case of payment by D/P or D/A),

[ ] Remitting bank (in case of payment by remittance),

and the Seller shall bear all banking charges incurred

outside such country.

11. Terms of Delivery

11.1 Packaging

11.1.1 All goods shall be packaged to prevent damage from dampness, rust, moisture, erosion and shock, and shall be suitable for

〔 〕 ocean transport, on deck/not on deck.

〔 〕 multimodal transport.

〔 〕 container transport.

The Seller shall be liable for any damage and loss of the goods attributable to inadequate or improper packaging.

11.1.2 The measurement, gross weight, net weight of each package and any necessary cautions such as "Do not Stack Upside Down", "Keep Away From Moisture", "Handle With Care", "Hook-on Point" shall be stenciled on the surface of each package with fadeless pigment, when necessary.

If the goods to be shipped include any flammable, hazardous or dangerous materials, the Seller shall indicate on the surface of each package appropriate cautions with respect to the special care for the transport and handling thereof as will as the identification numbers of other indications required under customary international practice and/or regulations applicable to such materials, if any.

11.2 Terms of Shipment

11.2.1 If shipment is made under the terms of CFR or CIF, the Seller shall, not later than ( ) days before the time of shipment, inform the Buyer by Telex, or Fax of the name, nationality, age and other details of the carrying vessel as well as the contract number for each shipment.

( The following clause shall be 〔 〕 maintained or 〔 〕 deleted. )

The shipment shall not be effected without the confirmation from the Buyer with respect to the acceptability of the vessel ; provided that the Buyer shall not unreasonably withhold such confirmation. The Buyer shall confirm the vessel, by telex, or fax, within 3, latest 5 working days, otherwise, the vessel shall be regarded as confirmed.

11.2.2 (This Paragraph shall be 〔 〕maintained or 〔 〕deleted.)

Upon written request of the Buyer and if and to the extent that such information is available, the Seller shall also inform the Buyer by Telex, or Fax, not later than ( ) days before the time of shipment, of the contract number, the name of the commodity,the estimated quantity, the estimated total amount, the package numbers, the estimated total weight and volume, and the estimated date of arrival of the vessel at the destination.

11.2.3 If shipment is made under the term of FOB, the Buyer shall book shipping space in accordance with the time of shipment stipulated in this Contract. The Seller shall, at least ( ) days before the date of shipment stipulated in this Contract, advise the Buyer by Telex or Fax of the Contract number, the name of the commodity, the quantity, the total amount, the package numbers, the total weight and volume and the date when the goods should be ready for shipment at the port of shipment. The Buyer shall, at least ( ) days before the estimated date of arrival of the vessel at the port of shipment, notify the Seller of the name of the vessel, the estimated date of arrival and the contract number for the Seller to effect shipment.

In case the carrying vessel or the date of arrival have to be changed, the Buyer or its shipping agent shall advise the Seller in time to make necessary arrangement, provided that the time of shipment as stipulated in this Contract shall not be changed without written consent of the Seller.

Should the vessel fail to arrive at the port of shipment within ( )days after the arrival date advised by the Buyer, the Buyer without prejudice to any other claims of Seller under this Contract and the provisions of the INCOTERMS shall bear all actual expenses, including the storage expenses and interest charges, calculated from the ( ) day thereafter.

The Seller shall be liable for any dead freight or demurrage, should they fail to have the quantity of the goods ready for loading in time as stipulated, if the carrying vessel has arrived at the port of shipment as advised.

11.2.4 If shipment is made under the terms of FOB, CFR, CIF or FCA, the Seller shall, immediately upon the completion of the loading of the	goods, provide the Buyer and the consignee appointed by the Buyer, with notice of shipment by Telex or Fax.

The notice shall include the contract number, name of commodity, quantity, net and gross weights, measurements,invoiced value, bills of lading number, sailing date and the estimated date of arrival at the port of unloading.

If shipment is made under the term of FOB or CFR, should the Seller	fail immediately to provide the shipment notice to the Buyer and/or the consignee appointed by the Buyer, and the Buyer can not procure the insurance in time, the Seller shall be responsible for any damage to and/or loss of the goods incurred in the course of transport.

11.2.5 (This paragraph shall be [ ] maintained or [ ] deleted.)

Upon completion of loading, the Seller shall send to the Buyer one duplicate copy of each of the following documents together with the shipment.

[ ] (1) ocean bill of lading ( or other transport document as per clause 10.2, item 2)

[ ] (2) commercial invoice ( shipping lot No. to be indicated in case of partial shipment)

[ ] (3) insurance policy / insurance certificate

[ ] (4) packing list

[ ] (5) weight list/quantity list

[ ] (6) certificate of origin

[ ] (7) quality inspection certificate / inspection report / analysis certificate issued by

[ ] (8) other documents required :

11.2.6 Within ( ) working days after the date of actual shipment, the Seller shall airmail one copy of each of the documents mentioned in the preceding clause to the Buyer or the consignee appointed by the Buyer.

11.2.7 Time of shipment is subject to timely issuance of the L/C as set forth	in Clause 10 in case of the payment by L/C.

Delivery Date shall mean the B/L date , date of Airway bill or the date of Railway Consignment Note , date of multimodal transport document.

12 Insurance

If shipment is made under the term of FOB, CER or FCA or CPT, insurance shall be procured by the Buyer.

If shipment is made under the term of CIF or CIP, insurance shall be procured by the Seller for 110% of the invoice value against [ ] F.P.A., or [ ] W.P.A., or [ ] All Risks. Additional insurance shall include:

13 Warranty (Select 13.1 and 13.2 respectively)

[ ] 13.1 The Seller shall warrant that all goods delivered by the Seller in quality, specification and packaging shall conform to the contract stipulations.

The warranty period shall remain in effect until the expiration of

[ ] ( ) months after the Delivery Date, in case of partial shipment after the Delivery Date of the last shipment;

[ ] ( ) months after the date of the completion of unloading of the goods at the port of unloading, latest however

( ) months after the Delivery Date;

[ ] ( ) months after the date of arrival of the goods at the destination but in no circumstances exceeding ( ) months after the date of completion of unloading of the goods at the port of unloading.

[ ] ( ) months after the date of acceptance certificate signed by both parties, however not exceeding ( ) months after the date of arrival of the goods at the port of unloading.

[ ] 13.2 The Seller shall warrant that the quality, specifications and packaging of the goods delivered pursuant to this Contract shall conform to the Contract stipulations. The Seller	shall make no warranty as to the fitness of the goods thereof for any particular purposes or environments, except as stipulated in this Contract or made known to the Seller at the time of signing this Contract.

The warranty period shall remain in effect until the expiration of

[ ] ( ) months after the Delivery Date, in case of partial shipment after the Delivery Date of the last shipment;

[ ] ( ) months after the date of the completion of unloading of the goods at the port of unloading, latest however ( ) months after the Delivery Date;

[ ] ( ) months after the date of the arrival of the goods at the destination but in no circumstances exceeding ( ) months after the date of completion of unloading of the goods at the port of unloading.

[ ] ( ) months after the date of acceptance certificate signed by both parties, however not exceeding ( ) months after the date of arrival of the goods at the port of unloading.

13. 3 In the event that the goods are found to be in breach of the said warranty and so notified during the term of the warranty in accordance with clause 17. 1, the Buyer has the right to lodge claims against the Seller.

The Seller＋s warranty shall be excluded to the extent that there is deviation of the manufacturer＋s written instructions or other cases of improper use or normal wear and tear in respect of the goods or parts of the goods which are subject to normal wear and tear by nature.

14. Inspection

14. 1 Pre-delivery inspection (Select one of the following, i. e.

14. 1. 1 or 14. 1. 2 respectively)

[ ] 14. 1. 1 The Seller shall, before the time of shipment, apply to the inspection organization for the inspection of the quality, specifications, quantity, weight, packaging and requirements for safety and sanitation/hygiene of the goods in accordance with

[ ] the stipulations of this Contract, or

[ ]

standards

The inspection certificate issued by the said inspection organization shall be an integral part of the documents to be presented for payment.

Inspection Organization :

In China :

a)

Import & Export Commodity Inspection Bureau of the People＋s Republic of China.

b)

(to be inserted if other inspection organization is permitted by the Chinese laws and regulations),

In Korea :

of the Republic of Korea.

[ ] 14. 1. 2 For Inspection by Manufacturer

The Seller shall, before the time of shipment, provide the Buyer with the inspection reports signed by the manufactures on the quality, specification, quantity, weight, packing and requirements for safety and sanitation/ hygiene of the goods in accordance with

[ ] the stipulations of this Contract, or

[ ]

standards.

The said inspection reports shall be an integral part of the documents to be presented for payment.

14. 2 Inspection upon Arrival

For the purpose of warranty and other claims, the Buyer shall have the right to apply to the inspection organization for the inspection of the goods after the arrival of the goods

[ ] at the port of unloading

[ ] at the final destination

Inspection Organization :

In China :

a)

Import & Export Commodity Inspection Bureau of the People＋s Republic of China.

b)

(to be inserted if other inspection organization is permitted by the Chinese laws and regulations),

In Korea :

of the Republic of Korea.

The Buyer shall give a notice of inspection to the Seller within sufficient time to enable Seller＋s presence before such inspection is conducted. The Seller may, on its own option and at his own expense, be present at the inspection.

The inspection can be conducted if the Seller is absent despite of timely notification by the Buyer.

The Buyer shall conduct the inspection in accordance with the stipulation of 17. 1 a) or b) of this Contract.

15. Force Majeure

Neither party shall be held responsible for failure or delay to perform all or any part of this Contract due to flood, fire earth-quake, snowstorm, drought, hailstorm, hurricane war, government prohibition, or any other events that are unforeseeable at the time of the conclusion of this Contract and could not be controlled, avoided or overcome by the such party. However, the party who＋s performance is affected by the event of Force Majeure shall give a notice to the other party of its occurrence as soon as possible and a certificate or a document of the occurrence of the Force Majeure event issued by the relative authority or a neutral independent third party shall be sent to the other party not later than ( ) days after its occurrence.

If the event of Force Majeure event continues for more than ( ) days , both parties shall negotiate the performance or the termination of this Contract. If within ( ) months after the occurrence of the event of Force Majeure , both parties can not reach an agreement , either party has the right to terminate this Contract. In the case of such a termination either party shall bear its own costs, further claims for compensation in connection with the termination shall be excluded.

16. Indemnity for delay

16.1 Delay in payment

If the Buyer fails to pay any amount when due, the Buyer shall be liable to pay to the Seller such unpaid amount plus overdue interest. The interest rate shall be calculated as ( ) percent per annum from the due to the actual date of payment. Such overdue interest shall be paid upon demand of the Seller.

16.2 Failure to Timely open the Letter of	Credit

In the event the Buyer due to reasons within its responsibility fails to open the Letter of Credit on time as stipulated in this Contract, unless the parties agreed on a grace period, the Buyer shall pay indemnity to the Seller. The indemnity shall be charged at the rate of ( )% of the amount of the Letter of Credit for every ( ) days of delay in opening the Letter of Credit, however, the indemnity shall not exceed ( )% of the total value of the Letter of Credit which the Buyer should have opened. Any fractional days less then ( )days shall be deemed to be ( ) days for the calculation of indemnity.

16.3 Failure to Make Timely Delivery

In the event the Seller due to reasons within its responsibility fails to make delivery of all or any part of the goods (including the documentation agreed upon) on time as stipulated in this Contract, unless the parties agreed on a grace period, the Seller shall pay indemnity to the Buyer. The indemnity shall be charged at the rate of ( )% of the amount of the delayed good for every ( ) days or delay in delivering the goods, however, the indemnity shall not exceed ( )% of the total value of goods involved in the late delivery. Any fractional days less then ( ) days shall be deemed to be ( ) days for the calculation of indemnity.

16.4 Without prejudice to the Parties' right under Clause 18.1, the indemnities provided for in Clause 16.1 and/or 16.2 and/or 16.3

shall be the sole compensation for the damages caused by such

delays.

17. Claims

17.1 Should the quality, specifications, quantity,weight, packing

and requirements for safety or sanitation/hygiene of the goods

be found not in conformity with the stipulations of this Contract, the Buyer shall give a notice of claims to the Seller and shall have the right to lodge claims against the Seller based on the Inspection Certificate, issued by the inspection organization provided in Clause 14.2 of this Contract within

[ ] a) ( ) days from the date of the arrival of the goods at the

final destination, provided that such date shall not exceed

( ) days from the date of the completion of unloading of

the goods at the port of unloading.

[ ] b) promptly, latest within ( ) weeks after malfunctions having been found in case of malfunction or deficiencies during the warranty period.

In the event of the non-conformity and provided the Seller is responsible, the Seller shall promptly, within ( ) weeks/months

upon the Buyer's notification,

on its own account

[ ] repair or replace such goods or supply the quantity that is deficient. Claims for compensation of damages or termination of the contract are excluded unless repair or replacement definitely fails.

[ ] repair or replace such goods or supply the quantity

that is deficient and compensate the Buyer for damage, if

any, in accordance with Clause 17. 3.

or by mutual agreement

[ ] devalue the goods according to the degree of inferiority, extent of damage and amount of losses suffered by the Buyer, if any.

If repair, replacement or devaluation definitely fails within the time limit agreed by the parties, and/or if the failure by the Seller amounts to a fundamental breach of contract, the Buyer has the right to terminate this Contract.

17. 2 In the event that the Buyer does not make such claim within the time-limit set forth in Clause 17. 1 a) or b), the Buyer shall forfeit its right to make a claim with respect to the quantity deficiency or the apparent quality defect.

17. 3 The Seller shall reply to the Buyer＋s claim not later than ( ) days after receipt of the inspection certificate issued by the inspection organization provided in Clause 14. 2 of this Contract and the claims shall be regarded as having been accepted, if the Seller fails to reply within the above-mentioned time limit.

18. Termination

18.1 Except as provided elsewhere, this Contract may be terminated in either of the following cases :

(1) Through mutual written agreement by both parties; or

(2) If the other party for reasons solely within its responsibility

seriously fails to perform its obligations within the time limit ag-

reed upon in this Contract, and fails to eliminate or remedy such

breach within ( ) days following the receipt of the written notice

thereof from the non-breaching party. In such case the non-breaching party shall give a written notice to the other party

to terminate this Contract.

18.2 Termination does not affect any right of the terminating party including but not limited to its right to claim compensation for damages.

19. INCOTERMS

Unless otherwise stipulated in this Contract, the terms and conditions of this Contract shall be interpreted in accordance with the "International Rules for the Interpretation of Trade Terms"(INCOTERMS 1990) provided by International Chamber of Commerce, International Chamber of Commerce Publication No.460.

20. Arbitration

All disputes, controversies, or difference which may arise between

the parties out of or in relation to or in connection with this contract should be settled amicably through friendly negotiation. If the parties fail to reach an agreement through negotiation, then any dispute mentioned above shall be finally settled by arbitration.

The place of arbitration should be, unless otherwise agreed between the parties, the country in which the respondent resides. If the arbitration takes place in China, it shall be held at the China International Economic and Trade Arbitration Commission in Beijing under its Arbitration Rules. If the arbitration takes place in Korea, it shall be held at the Korean Commercial Arbitration Board in Seoul under its Arbitration Rules.

The arbitration award shall be final and binding upon both contracting parties.

21. Notice

Any notice to be given hereunder shall be in writing and shall be hand-delivered , transmitted by facsimile or telex or sent by express airmail , and shall be deemed given when so hand-delivered , or if transmitted by facsimile or telexed , one day after the date of such facsimile or telex so transmitted , or if sent by mail when received , to the parties at the addresses specified at the head of this Contract.

22. Miscellaneous

22. 1 The Contract is made out in English , documentation in

(language).

22. 2 Date of Effectiveness

This Contract shall become effective

[ ] As of the date it has been duly signed by authorized representatives of both parties.

[ ] Upon signing and approval by

if the approval is required by the law. Approval shall be obtained within (30)days upon signing by the Buyer and notified to the Seller.

The foregoing terms are agreed by both the Buyer and the Seller signing below.

Buyer : ‥‥‥‥‥‥‥ Date : ‥‥‥‥‥‥‥‥

By : ‥‥‥‥‥‥‥‥‥‥‥‥‥

Seller : ‥‥‥‥‥‥‥ Date : ‥‥‥‥‥‥‥‥

By : ‥‥‥‥‥‥‥‥‥‥‥‥‥