CONTRACT        ORIGINAL

No. 92NGS/92602TH

Date:

MAR. 2, 1992

The Buyer: China tobacco Import & Export Corporation shanghai Branch         

          6/F LONGMEN HOTEL 777 HENGFENG ROAD SHANGHAI CHINA

          TLX:33496 SHATO CN POST DODE:200070

The Seller: FIL THAI COMPANY LIMITED

         328 PHAHOLYOTHIN RD. P.O. BOX BK 4-53

         BANGKOK 10400 THAILAND TLX 82816 PRACHUM TH

This contract is signed by and between the Buyer and the Seller, according to the terms and conditions stipulated below:

2. Country of Origin and Manufacture:

FILTHAI COMPANY LIMITED THAILAND

3. Port of Shipment:

BANGKOK THAILAND

4. Port of Destination:

Shanghai China

5. time of Shipment:

(1) 20M RODS EARLY MAY 1992

(2) 40M RODS BY END OF MAY 1992

(3) 40M RODS BY END OF JUNE 1992

6. Insurance: To be covered by the Buyer.

7. Packing:

 To be packed by strong materials, suitable for long distance ocean transportation and well protected against dampness, moisture, shock, rust and rough handling. The Seller shall be liable for any damage to the goods on account of improper packing.

8. Shipping Mark:

The Seller shall mark on each Package with fadeless paint,

The package number, gross weight net weight,             92NGS/92602TH  

Measurements and the following shipping mark:           SHANGHAI/CHINA

9. Guarantee of Quality:

The Seller shall guarantee the goods in all respects with the quality, specifications and technical terms as stipulated in this Contract. The quality guarantee period will be 12 months starting from the date on which the goods arrive at the port of destination. In the guarantee period, the Seller shall be liable for any damage and quality discrepancies caused by factory designs or manufacture defects.

10. Inspection and Claims:

(1)    The Commodity Inspection Authorities or the manufacturer shall, before delivery, make a precise and comprehensive inspection of the goods as regards their quality, specification and quantity, and issue certificates, indicating the technical data and results of the test.

(2)    After arrival of the goods at the port of destination, the Buyer shall apply to the China Commodity Inspection Bureau for a reinspection of the goods. If any defective goods or discrepancies are found by the Bureau regarding the specifications and quantity. The Buyer shall, within 90 days after unloading of the goods at the port of destination, claim against the Seller on the strength of the inspection certificate issued by the Bureau. If the goods are not in conformity with the stipulations of this contract, in accordance with the Buyer’s claim the Seller should be responsible for replacement with new goods, compensation or devaluate the goods, and to bear all direct losses and expenses in connection therewith including interest accrued, banking charges, freight, insurance premium, inspection charges, storage, stevedore charges and all other necessary expenses required for the custody and protection of the rejected goods.

(3)    Should the Seller disagree the claim he must notify in written form within two weeks after receipt of the Buyer’s claim.  Overdue, all claims shall be regarded as accepted by the Seller.

11. Terms of Payment:

 Remittance by banker’s demand draft.

12. Terms of shipment:

(1) In case of FOB Terms:

a. Booking of shipping space shall be attended to by Buyer’s shipping Agent, China National Foreign Trade transportation Corporation.

b. For each shipment the Seller shall, 30 days before the date of delivery stipulated in clause 5 hereof, advise the Buyer/by cable/telex of the date of readiness, 15 days before the date of shipment, advise the Buyer by cable/telex of the Contract number, name of commodity, quantity, value, number of packages gross weight and measurements for the Buyer to book shipping space.

c. The Seller shall be liable for any dead freight of demurrage consequent upon his failure to have the goods ready for loading after the carrying vessel has arrived at the port of loading on time.

d. The Seller shall bear all the risks before the goods pass over the vessel’s rail and 50% of all loading expenses. The loading expenses shall mean all expenses accrued in the handling of the goods from side of the ship to the cabin (to were the Buyer’s vessel derrick can reach in the vessel), including all crane charges for heavy goods, but not, including stowing charge, trimming charge, consolidation charge, damage charge or open and close hatch charge.

(2) In case of C & F Terms:

a. The Seller shall ship the goods from the port of shipment to the port of destination in China directly within the shipment time, stipulated in Clause 5 of this Contract, trans-shipment is not allowed.

b. The carrying vessel shall not be the one of the nationality unacceptable to the Buyer.

13. Shipping Advice:

(1) Immediately after the goods are completely loaded, the Seller shall cable/telex the Buyer and China National Foreign Trade Transportation Corporation at the port of destination the contract number and name of commodity, and quantity, gross weight, invoiced value, name of the carrying vessel, the port of shipment, the date of sailing and the port of destination as specified on the shipping mark.

(2) In case the Buyer fail to arrange insurance in time due to the Seller’s failure to advise in time, all losses shall be borne by the Seller.

14. Documents:

For negotiation, the Seller shall present the following documents to the paying bank after shipment:

(1) 3 copies of Negotiable Clean on Bill of Lading made out to order, blank endorsed, and notifying the China National Foreign Transportation Corporation at the port of destination ( In case of FOB terms, marked “Freight To Collect”; In case of C & F Terms, marked “Freight Prepaid”)

(2) 5 copies of Invoice, indicating contract number, name of commodity, quantity, unit price and total amount. In case of shipment in lots, lots number must be indicated.

(3) 4 copies of Packing List.

(4) One copy of Certificate of Quantity and Quality issued by the Manufacturers or by the Commodity Inspection Authorities of the manufacturers country.]

(5) The operation instructions and technical documents as stipulated in the Contract Appendix or a certificate which certifies that all documents mentioned above have already be packed and dispatched together with each consignment. The documents mentioned above shall be made separately according to the shipping mark, the different shipping mark shall not be listed in the same set of the Bills. The Seller shall send one set of the above mentioned documents, except 4 and 5 to the China National Foreign Trade Transportation Corporation at the port of destination with the vessel, and within 3 days after shipment is effected, two sets by airmail to the Buyer and one set to the China National Foreign Trade Transportation Corporation at the port of destination.

15. Force Majeure:

Within the delivery period as stipulated in this contract, whatever it is in the process of making, shipment or transportation, the Seller shall not be held responsible for and delay in delivery of goods due to Force Majeure, such as war, severe disasters of flood, fire, wind, snow and earthquake. However, the Sellers shall inform the Buyer by cable/telex immediately of the occurrence mentioned above and within 15 days thereafter, shall send by airmail to the Buyer for their acceptance a certificate issued by the Chamber of Commerce or the registered surveyor of the place where the accident occurs as evidence thereof. Under such circumstances the Seller however, are still under the obligation to take all necessary measures to hasten the delivery of the goods, and advise to the Buyers of particulars of measures. The Buyers shall have right to agree or cancel this Contract according to the circumstances. In case the accident lasts for more than ten weeks, the Buyer shall have the right to cancel this Contract.

16. Late Delivery and Penalty:

 In case of delayed delivery, except for force majeure cases, the Seller shall pay to the Buyer for every week of delay a penalty amounting to 0.5% of the total value of the goods whose delivery has been delayed. Any fractional part of a week is to be considered a full week. The total amount of penalty shall not, however, exceed 5% of the total value of the goods involved in late delivery and is to be deducted from the amount due to the Seller by the paying bank at the time of negotiation, or by the Buyer direct at the time of payment. In case the period of delay exceeds 10 weeks after the stipulated delivery date the Buyer have the right to terminate the Contract but the Seller shall not thereby be exempted from the payment penalty.

17. Arbitration:

All disputes in connection with the Contract or the execution thereof shall be settled through friendly negotiations. In case no settlement can be reached through negotiation, the case should then be submitted for arbitration to the Foreign Trade Arbitration Commission of the China Council for the Promotion of International Trade, Shanghai, in accordance with the “Provisional Rules or Procedure of the Foreign Trade Arbitration Commission of the China Council for the Promotion of International Trade”. The arbitration shall take place in Shanghai and the decision rendered by the said Commission shall be final and binging upon both parties; neither party shall seek recourse to a law court or other authorities for revising the decision. The arbitration fee shall be borne by the losing part.

18. Remarks:

   1. TOTAL QUANTITY AND AMOUNT LESS THAN 100 MILLION IS ALLOWED.

   2. TRANSSHIPMENT IS ALLOWED.

  This Contract shall come into effect after signature by the both parties. This Contract is made out in two original copies, one copy to be held by each party.

The Seller:                                          The Buyer:

(signature)                                    CHINA TOBACCO IMP& EXP. CORP.

                                                  SHANGHAI BRANCH

                                                 777 Heng Feng Road(6/F)

(signature)

New words: