A company newly registered as a business partner of Principal Business Operator shall start a transaction with the Principal Business Operator only after being selected as a developer through the partner selection process of the Principal Business Operator for each product item when a new component or part is developed after signing a basic transaction contract with us. There are three business partner selection methods.

• 1) Open Bidding/Tendering

  Sending RFQs to bidders, obtaining bids and price quotes, and selecting the bidder with the lowest price quote.

  ※ RFQ : Request for Quotation

• Selective/Deliberative Tendering/Bidding

  The department in charge of business partner selection selects a company by comprehensively considering main evaluation items such as price, SQ grade, design specifications, and development capability of qualified companies.

• 3) Strategic Purchasing
  Selecting a specialized company for items deemed necessary by other purchasing policies related to single-member private limited liability companies, module companies, new technology applied components/parts or patents in a manner other than competitive (open or selective/deliberative) bidding/tendering.

1) The Principal Business Operator shall operate SCM and Development Quality Information System for information sharing and win-win partnerships with its business partners.

2) In order to support information exchange and win-win partnerships with/between business partners of the Principal Business Operator, the Principal Business Operator shall operate the “Woosu Partnership Association”, the Subcontractors Association of the Principal Business Operator.

The Principal Business Operator shall operate a proposal channel through its Customer Center website for companies seeking to do business with it.

• 1) Prior Distribution of Documents

  ① In principle, a contract with the contracting parties’ name and emblem or official seal must be signed and concluded between the Principal Business Operator and the Sub-contractor in advance, at least before starting the work for delivery.

  ② If delivery occurs frequently, the basic transaction contract shall be concluded first, and the order form (including the computerized order form) issued by the Principal Business Operator for each delivery shall be replaced by an individual contract.

• 2) Determining unit price by a rational calculation method
  ① Unit price of a component/part shall be calculated using a reasonable calculation method and decided by bilateral consultations between the Parties. Quantity, quality, specifications, delivery date, payment method, material price, labor cost, market price trend as well as appropriate management cost and profit shall be considered in calculation.

  ② The unit price determined by ① above shall include any shipping and transportation costs, including packaging costs, freight charges, loading/unloading costs, insurance premiums, and all other costs that may occur until the delivery to the delivery place determined by mutual agreement is done, unless otherwise agreed.

  ③ During the contract period, if there is a sudden change in the price or charge of an item included in the unit price specified in ① above; if more than 6 months have elapsed since the conclusion of the contract, and any of the following reasons occur with respect to the remaining delivery volume, the Principal Business Operator or the Sub-contractor may apply for contract price adjustment. Contract price adjustment shall be done through bilateral consultations within 30 days from the date of application. If an adjustment is not agreed and made within 30 days, the Principal Business Operator or the Sub-contractor may apply for mediation to the Subcontract Dispute Mediation Council. However, if it is recognized that it is difficult to fulfill the contract without contract price adjustment, such as a sharp increase in raw material prices, the contract price adjustment may be made within 6 months from the date of contract.

  - Changes in raw material prices : When changes in current market prices of raw materials can occur by 10% or more from the standard raw material prices

  - When price adjustment is necessary due to design change or improvement proposals

  ④ If the determination of unit price is delayed due to ‘special’ reasons/circumstances, temporary unit price determined by bilateral consultations shall be applied. In this case, the difference between the temporary unit price and the fixed unit price shall be settled retroactively when the fixed unit price is determined.

  ⑤ The Principal Business Operator shall regularly review temporary unit price, which is the standard for cost calculation, and propose a temporary unit price that reflects the reality. The characteristics of each company, such as work conditions, company size, and technological prowess, and labor costs in the same industry shall be taken into account in the determination of temporary unit price.
• 3) Delivery Date and Delivery Fulfilment

  ① Delivery Date refers to the date on which ordered component/part will be delivered to the place determined by agreement between the Principal Business Operator and the Sub-contractor according to the individual contract (order form). It is determined by mutual agreement for each individual contract.

  ② When a contract is concluded, a delivery date shall be specified in the contract. When the delivery date is changed, it shall be made clear. When determining a shorter delivery date than usual in the name of an emergency order, etc., it shall be determined by bilateral consultations.

  ③ If the Sub-contractor suffers damage due to unreasonable delay or refusal of receipt by the Principal Business Operator although there is no reason to attribute responsibility to the Sub-contractor, the Principal Business Operator shall compensate the Sub-contractor for any damage caused to its action.

• 4) Objective Inspection Standards

  ① The Principal Business Operator shall determine the standards and methods for objective, fair and reasonable inspection through bilateral consultations with the Sub-contractor in the inspection of the delivered goods.

  ② When there is delivery, the Principal Business Operator shall issue a receipt immediately even before the inspection, and the inspection must be carried out promptly in accordance with the pre-set inspection policy and procedures.

  ③ The Principal Business Operator shall notify the inspection results within 10 days from the date of receipt of the delivery from the Sub-contractor, except for justifiable reasons.

  ④ The Principal Business Operator shall manage the ordered components/parts before the inspection or during the inspection period with a duty of care.

• 5) Payment

  ① In principle, Article 13 (1) of the Fair Subcontract Transactions Act shall apply mutatis mutandis to the date of payment for delivery of complete items.

  ② Article 13 (2) and (8) of the Fair Subcontract Transactions Act shall apply mutatis mutandis to the method of payment for delivery of complete items.

• 6) Reasonable Return of Goods with Defects Found After Delivery

  ① If delivered items are returned for reasons of their non-conformity found after delivery, the reasons shall be made clear. The non-conforming or defect items shall be returned after the liability ratio, etc. are negotiated by bilateral consultations between the Principal Business Operator and the Sub-contractor.

• 7) Contract Termination/Cancellation
  ① Contract Termination/Cancellation

  When termination/cancellation of a contract is determined, the reasons for contract termination/cancellation shall be determined by mutual agreement between the Parties. Whether it is a case where sending a formal written notice is required or not shall be determined, but in the event of a reason for termination/cancellation of the contract, it will be notified in writing without delay.

  ② The following cases are where sending written notice is not required.

  - If one of the Parties has received notice of Suspension or debarment of any transactions of the Party from a financial institution, or suspension of business operations or cancellation of the business license from the supervisory authority

  - When it is recognized that the contract cannot be performed due to significant business reasons such as bankruptcy, compulsory execution by a third party, insolvency, commencement of composition, or application for liquidation by one of the Parties.

  - When one of the Parties decides on dissolution, transfer of business or merger with another company, or when both Parties acknowledge that it is difficult to perform the contents of the basic contract or individual contract due to disaster or other reasons ③ For cases where sending formal written notice is required are as follows (In such a case one of the Parties may set a period of not less than three months and send formal written notice to the other party to take an appropriate action. If it is not performed within the period, the contract may be canceled or terminated) :

  - When the other party has violated the important details of the contract or individual contract

  - When the receiver (Principal Business Operator) causes disruption to work of the supplier (Sub-contractor) by delaying the implementation of the matters necessary for the production of ordered components/parts without any justifiable reason.

  - When it is recognized that it is difficult to deliver ordered components/parts within the date of delivery because the supplier (the Sub-contractor) refuses to manufacture ordered components/parts without justifiable reasons or delays to start production of ordered components/parts.

  - When it is recognized that there is a significant reason that the contents of the contract cannot be smoothly performed due to the lack of technology prowess, or lack of production and quality control capabilities of the supplier (Sub-contractor).

• 1) 1)Non-Delivery of Written Notification/Notice
• 2) Determination of Unfair Subcontract Prices

  ① Determination of unfair subcontract prices by reducing unit prices at uniform rates without any justifiable reasons

  ② Determination of subcontract prices by unilaterally allocating a certain amount of money, under some pretext or another, such as a request for cooperation, and then subtracting the amount

  ③ Determination of subcontract prices by discriminating against specific suppliers without any justifiable reasons, or unilaterally determining subcontract prices based on a low unit price without an agreement with the supplier

  ④ Determination of subcontract prices by deceiving the supplier in such a way as to cause an error in terms and conditions of a transaction such as order quantity/volume, or to provide a false quote or a quote of another business operator, etc.

  ⑤ Determination of subcontract prices at lower prices than the lowest bid prices without any justifiable reasons in concluding contracts through competitive bidding processes,

  ⑥ Determination of subcontract prices by lowering unit prices uniformly without any objectively justifiable reasons for unit price reductions such as drops in material prices

  ⑦ Determination of subcontract prices by discriminating against specific suppliers and lowering subcontract prices even though there is no difference in terms of payment, volume/quantity, difficulty of work, etc.

  ⑧ Determination of subcontract prices by making false premises of placing large orders, but placing small orders

  ⑨ Determination of subcontract prices by entrusting manufacturing to third parties without deciding on payments and lowering subcontract prices below normal levels without bilateral consultations with the supplier

  ⑩ Lowering subcontract prices by requesting and receiving delivery-related technical data, etc., providing the data to another business operator and then lowering subcontract prices based on quoted prices of the business operator with the data

• 3) An act of requesting development proposals or other proposals by oral presentations; An act of canceling development after completion of equipment or production preparation; or an act of requesting to reduce proposed unit prices upon oral requests.
• 4) Unlawful Interference with Business Operations

  ① An act of interfering in activities of HRM by having a supplier obtain his/her instructions or approval in appointing or dismissing executives and/or employees, or by having a specific person hire against the will of the supplier

  ② An act of intervening in subcontract transactions and restricting the contents of the subcontract transactions, including selection and setting of contract terms and conditions, maintaining the quality of entrusted items, and delivery of the entrusted items within the scheduled delivery date, regardless of any purposes of the subcontract transactions

  ③ An act of restricting the supplier's production items, facility scale, etc., or preventing the supplier from doing business with competitors of himself/herself or its affiliates

  ④ An act of requesting the supplier to provide supply-related technical data without any justifiable reasons

• 5) Requesting Exclusive Transactions

  An act of preventing the supplier from doing business with them and those they designate (except for cases where an exclusive transaction is agreed with a business partner for the reason that technology development is jointly performed with the business partner.)

• 1) Compliance with Relevant Laws Such As the Civil Act

  ① Compliance with relevant laws and regulations such as the Principle of Good Faith, the Civil Act, the Fair Transactions in Subcontracting Act, the Fair Trade Act, etc. In case of any dispute, it shall be resolved by written agreement of the Parties.

• 2) In case of reductions in any contract unit price, in principle, a sufficient consultation process is required, and the written notice must be given sufficiently in advance of actual implementation of the change.

  ① In case of reductions in any contract unit price due to a fall in raw material prices or an increase in quantity, a reasonable and documented basis shall be presented.

• 3) Price Adjustments Due to Changes to Contract

  ① If additional costs are incurred due to changes to contracts, such as additional requirements, additional payments shall be made accordingly.

• 1) Unreasonable Refusal of Acceptance of Ordered Items

  ① An act of refusing to accept ordered items even though it is difficult to determine whether the delivered items are different from the entrusted contents due to the unclear contents of the entrustment

  ② An act of refusing to accept entrusted items due to poor sales, claims from the ordering company (buyer), foreign importer, or customer, etc.

  ③ An act of refusing to accept ordered items due to delivery delays even though delivery is not possible due to late supply of raw materials

  ④ An act of applying a standard higher than the normal standard without setting anyinspection standards.

  ⑤ An act of refusing to accept ordered items by applying a higher standard than the inspection standard set in the original contract, or even if the inspection standards are set, the contents are unclear.

  ⑥ An act of refusing to accept ordered items without any justifiable reasons, such as lack of storage space, even when there is a request for acceptance of delivery from the supplier.

  ⑦ An act of arbitrarily refusing to accept goods that have already been ordered because it is considered that a stable supply is difficult due to special circumstances of the supplier such as bankruptcy.

  ⑧ An act of refusing to accept items because of defects in some items after entrusting manufacturing of multiple items to the supplier, or an act of refusing to accept ordered items for reasons such as cancellation or suspension of orders by the buyer.

• 2) Unfair Returns

  ① An act of returning ordered items for reasons such as cancellation orders from a counterparty or changes in economic conditions

  ② An act of returning ordered items by unambiguously setting the standards and methods of inspection and unjustly determining nonconformity

  ③ An act of returning ordered items despite the fact that they are considered to be nonconforming items due to poor quality of the supplied raw materials.

  ④ An act of returning ordered items due to delivery delays despite that fact that the delays are caused by the delivery delays in the supply of raw materials.

  ⑤ An act of returning ordered items due to poor sales, claims from the ordering company (buyer), foreign importer, or customer, etc.

  ⑥ An act of returning ordered items even though the supplier has completed the inspection of ordered items by an authorized third party and delivery when the inspection is entrusted to a third party other than the supplier.

  ⑦ An act of returning ordered items due to delivery delays after accepting them despite the fact that there are objective facts that have been accepted for the supplier’s delivery delays

• 3) Unfair Price Reduction

  ① An act of reducing prices after entrusting with the supplier to provide items without specifying the conditions under which prices will be reduced when entrusting, and for unreasonable reasons such as requesting cooperation, canceling orders from a counterparty, or changes in economic conditions.

  ② An act of reducing prices by unilaterally and retroactively applying the reduced prices to entrusted items when an agreement on unit price reduction has been reached, but before an agreement to reduce the prices of the entrusted items is reached.

  ③ An act of excessively reducing prices for the reasons such as payment in cash or payment before due date.

  ④ An act of unilaterally reducing prices due to the supplier’s minor negligence that does not substantially affect the occurrence of damage

  ⑤ An act of reducing prices more than appropriate purchase prices or prices for use when having the supply use one's own equipment or buy the goods necessary for manufacturing, repairs, construction, or services

  ⑥ An act of reducing prices on the basis that consumer prices or material prices at the time of payment have fallen compared to the time of delivery, etc.

  ⑦ An act of reducing prices unreasonably due to unreasonable reasons such as business loss or reduction in sales prices

  ⑧ An act of reducing indirect labor costs, general management costs, profits, value-added tax, etc. contrary to the original contract.

  ⑨ An act of making the supplier bear the employment insurance premiums, occupational safety and health management fees, and other expenses that the Principal Business Operator must pay in accordance with the Act on the Collection of Insurance Premiums, etc. for Employment Insurance and Industrial Accident Compensation Insurance, the Occupational Safety and Health Act, etc.

  ⑩ An act of reducing prices for reasons such as delaying the supply or completion after setting an unreasonable and impractical delivery date or by making promises to supply materials, equipment, etc., but failing to deliver on time.

  ⑪ An act of reducing subcontract prices that have already been determined for the reason of continuous orders, or based on the specific details of manufacturing after concluding the contract with the total amount.

  ⑫ An act of reducing prices contrary to the original contract on the grounds that items have been ordered at low prices, etc.

  ⑬ An act of reducing prices as a result of changing the contract, even though the details and conditions of consignment remain unchanged.

  ⑭ An act of reducing prices by imputing foreign exchange losses to the supplier contrary to the original contract

  ⑮ An act of deducting amounts more than appropriate purchase prices or prices for use when having the supply use one's own equipment or buy the goods necessary for manufacturing, repairs, construction, or services.

• 4) Unreasonable Demands for Economic Benefits

  ① An act of demanding economic benefits such as sponsorships, incentives, and financial aids on condition of commencement of transactions or large-scale transactions

  ② An act of demanding economic benefits such as sponsorships, incentives, and financial aids for unreasonable reasons such as worsening profits or business conditions.

  ③ An act of demanding economic benefits such as sponsorships, incentives, and financial aids even though there is no legal obligation to be borne by the supplier.

• 5) Transferring Costs Incurred by the Principal Business Operator

  ① An act of passing on costs incurred due to the Principal Business Operator’s salary increases or internal delay in the decision-making process to the supplier.

• 6) Reasonable Reimbursement

  ① An act of demanding acceptance of payment-in-kind for fixed prices against the will of the supplier, contrary to the original contract

• 7) Retaliatory Measures

  ① An act of limiting opportunities to receive orders or giving other disadvantages such as suspension of transactions because the supplier reported it to the Fair Trade Commission as a violation of the Fair Transactions in Subcontracting Act.

• 8) Evasion of Laws and Mandatory Rules

  ① An act of substantially evading the application of the Fair Transactions in Subcontracting Act by means of a detour in relation to subcontract transactions

  ② An act of collecting payments after paying the supplier in accordance with the corrective action taken by the Fair Trade Commission or by deducting it from delivery prices, etc.

  ③ An act of uniformly lowering unit prices by amounts corresponding to the payments of bill discount fees, delayed interests, etc. to the supplier

• 9) Forced Purchase of Goods, etc.

  ① An act of coercing to purchase or use the supply of goods, equipment, or services designated separately, except in cases where there is a justifiable reason such as maintenance or improvement of the quality of the delivered goods

• 10) Unfair Requests for Settlement of Purchase Prices, etc.

  ① An act of having the supplier purchase goods, etc. necessary for delivery from oneself, or use one's own equipment and pay all or part of purchase prices or use prices in advance of the payment due date