draft

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COALSALESAGREEMENT

Thisagreementmadethisdate15thMarch2010between:

SELLER:,companyorganizedandexistingunderthelawsofHongKong,(hereinafter

referredtoas“Seller”),havingitsregisteredofficeat,Kowloon,HongKong.

and

……………….acompanyorganizedandexistingunderthelawsofRepublicof…….andhavingits

registeredofficeat…………………..(hereinafterreferredtoas“Buyer”)

DEFINITIONS

InthisAgreementunlessthecontextotherwirequires:

i“adb”meansairdriedbasis.

ii“ar”meansasreceivedbasis.

iii“BillofLading”meansthebillofladingissuedbytheveslownertotheSellerinrespectofthe

statedamountofCoalinaparticularshipment.

iv“BusinessDay”meanstheperiodbetweenthehoursof8amto4pmonadayotherthanSaturday,

Sundayoranypublicholidays.

v“Cargo”meanscargoofapproximately23,000MT+/-10%asperSeller’soption.

vi“Coal”meanslegalsteamingcoalproducedfortheSellerfromSouthKalimantanarea,Indonesia.

vii“ContractQuantity”meansapproximately23,000MT+/-10%asperSeller’soption.

viii“DeliveryPoint”meansthefreeonboardveslattheLoadingPort.

xi“Demurrage”meansachargepayableintheeventtheSellerisunabletocompleteloadingaship

withinLaytime.

x“Despatch”meansthechargepayableintheeventtheSellercompletesloadingtheshipbefore

theendofLaytime.

xi“LoadingPort”meanstheveslanchorageatMuaraSatui,SouthKalimantan,Indonesia,or

suchotherportasthepartiesmayagreetoinwriting.

xii“Kcal/Kg”meanskilocaloriesofenergyperkilogramofcoal.

xiii“Laytime”meansthetimeallowedforloadingavesl,calculatedinaccordancewithclau9.

xiv“US$”means(unlessotherwispecified)thecurrencyoftheUnitedStatesofAmerica.

xv“Party”or“Parties”meansSellerorBuyerorBoth.

xvi“Tonne”purpoofconversionametrictonne

equals0.984206longtonnesandalongtonneequals1.016047metrictones.

WHEREAS,SellerhasagreedtollandBuyerhasagreedtopurchatheCoalinaccordancewiththe

termsandconditionstoutbelow.

TheSellerandBuyermutuallyagreeasfollows:

1.0QUANTITY

1.1SelleragreestollandBuyeragreestopurchatheContractQuantityofapproximately23,000

MT+/-10%onaFOBveslanchoragebasisinMuaraSatui,al

quantitycontractis23,000mt+/-10%.

2.0DELIVERY

2.1SellerundertakestodelivertheContractQualitytotheBuyerattheDeliveryPointforshipment

scheduleofmiddleofMarch2010oruponconfirmationbothparties.

LaycanoftheshipmentwillbediscusdandmutuallyagreedbybothPartiesbyemailorfax.

IntheeventtheBuyercannotperformtheshipmentaspertheagreedschedule,theSellerwill

considerandtreattheshipmentascancelled(coalquotawillbereduced)andSellerisnot

erwillbechargedthecostofouropportunityloss

(refertoclau9.2d).

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2.2TheSellerisresponsibleforprovidingthebargessufficienttoloadatthespecifiedratetothe

vesl(s)lshallbeshippedattheBuyer’s

expeninbulkonboardsuchvesl(s).Buyertoprovidegrabs-fittedveslscapableof

acceptingcoalatthedeliveryrate.

3.0QUALITY

3.1TheCoalsuppliedshallbefreshlyminedfromtheopencastminesinSouthKalimantanarea,

Indonesia.

EachdeliveryofCoalbySellershallbeofmerchantablequality,wellblendedanddeliveredasfar

asreasonablypracticablecleanandfreeofalldebris,

deliveryofCoalshallmeetthefollowingspecificationsbelow,determinedattheLoadingPortin

vicesLtd.,orotherindependent

surveyoragreedbybothparties.

ItemGuaranteed/LimitRejection

TotalMoisture(ar)Below36%Above38%

InherentMoisture(adb)10-14%

Ash(adb)8%max

VolatileMatter(adb)38-46%

TotalSulfur(adb)0.7%max

GrossCalorificValue(adb)5500kcal/kgBelow5300kcal/kg

HGI50min

Size0-50mm80%min

3.2Ifcoalqualityasdeterminedbytheloadingportcertificateofanalysixceedstheguaranteedlimit

asshowninArticle3.1butislessthantherejectionlimitthenthefollowingpenaltiesaretoapply:

3.2aTotalMoisture:

IntheeventtheTotalMoistureanalysisresultishigherthan36%,theinvoiceweightshall

becalculatedasperthefollowingformula:

B/Lquantity–(B/Lquantityx(TManalysisresult–TMguaranteed))

3.2bGrossCalorificValue–intheeventtheGrossCalorificValueanalysisresultishigheror

lowerthan5500kcal/kgtheinvoicepriceshallbecalculatedasperthefollowingformula:

GCVanalysisresult/5500xFOBTprice

artiesagreeorasaresultofthetestinginClau3.1itisdetermined,thattheCoal

exceedstherejectionlimitstoutinClau3.1(“Non-SpecificationCoal”)regardlessofwhether

ornotSellerhasnotifiedBuyerthatitisNon-SpecificationCoal,then:

iatedbyBuyeratitssolediscretion,thePartiesshallimmediatelydiscussalternative

termsofsupplyandmayagreethepriceandthetermsuponwhichBuyershallpurchathe

Non-SpecificationCoal,whereuponBuyershallpurchasuchNon-SpecificationCoal;or

ay,ifBuyerdoesnotinitiatesuchdiscussionsorifthePartiesfailtoreachagreement

inaccordancewith(a)above,rejecttheNon-SpecificationCoal,whereuponSellershall

immediatelyremovetheNon-SpecificationCoalandBuyershallnotbeobligedtopayforit.

oadingPort,SellershallcaureprentativeoftheCoaltobetakenfromtheshipment

andarrangeforsuchsamplestobeanalyzedbyaqualifiedindependenttestinglaboratory

appointedbySellerandapprovedbyBuyer.

Thesaidsamplesshallbecombinedbythelaboratorytoformacompositesampleandanalyzed

inaccordancewiththeStandardItemspecifiedinClau3.1

SellershallprovideBuyerwithacertificatefromsuchlaboratorywithin5(five)workingdaysshowingthe

resultsofsuchanalysisforeachiteminClau3.1andsuchanalysisshallconstitutethebasisfor

Seller’tofsuchanalysisshallbeforSeller’ultofsuchsamplingand

analysisshallbefinalandbindingatloadingport.

DETERMINATION

TheweightofeachshipmentofCoalshallbedeterminedattheLoadingPortbyasurveyofthevesl’s

draftandutilizingveslimmersionscaleweightstothenearestTonne,conductedbyaqualified

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tificateofWeight

providedbytheindependentagencyshallconstitutethebasisfortheSellersinvoice;therefore

tofsuchweightdetermination

shallbefortheSeller’saccount.

ThepriceoftheCoalinthisagreementisUSD.39.00perMTFOBmotherveslatMuaraSatui,South

Kalimantan,IndonesiabasisGCV5500kcal/kg(adb)andwillbeadjustedwithprorateadjustmentinprice

cemaybereviewedandadjustedduetoanyforcemajeureandboth

partieswillmaketheirbestendeavortorenegotiateanddiscuss.

T

ttobepaidbyanirrevocableconfirmedatSightLetterofCreditestablishedfor100%of

eachcargocontractvaluethroughaprimeinternationalbankopenedwithin12workingdaysafter

tterofCreditshallbettled,acceptedandapprovedbyBuyerand

ofCredittorequire,Seller’scommercial

invoice,BillsofLading,CertificateofOrigin,CertificateofWeightandCertificateofQuality.

’sinvoiceshallbecalculatedbadonthepriceasshowninClau5.1,togiveavalueper

TonesofCoal(US$/Tones).TheinvoicepriceshallbefurthermultipliedbytheTonnesdelivered,

asdeterminedinaccordancewithClau4.0ofthisagreementtoproducetheinvoiceamountin

lershallprovide3originalcopiesofinvoices;2copiesoriginalinvoicesto

bankand1copyoriginalinvoicetothebuyer.

shallsubmitaninvoicetoBuyerbyfacsimileandbymail,accompaniedbyacopyofthe

CertificateofWeightandacopyoftheCertificateofAnalysisassoonaspossibleafterthe

oiceshallspecifytheamountofCoaldeliveredto

Buyer,andthepriceofsuchCoal.

NDRISKOFLOSS

Propertyinandresponsibility(includingallriskofloss,damageordestructionandotherliabilities

andresponsibilitiesimpliedbyownership)forCoalshallpasstoBuyerupondeliveryofsuchCoal

totheDeliveryPoint.

NGANDDELIVERYREQUIREMENTS

hallgiveveslnominationtoSelleratthelatest20daysbeforethefirstdateofthe

agreedlaycanandveslsubstitutemaximum5daysbeforefirstdateoftheagreedlaycan

receivedbySeller,otherwiSellershallnotcommittheagreedlaycanandbothpartiesshall

Stowageplanshallacceptedbadonlastinformationatleast5daysbeforeveslETA.

ershallarrangefortheutilizationofabulkcarriersuitableforthecarriageoftheCoaland

lsshallbeequippedwith4tsof

hydraulicsystemcraneminimumcapacity25MTandfitted4tsofgrabachwithminimum

capacityof8cbmtoachievetheloadingrateof6,vent

buyerfindstheveslperformanceisdifferentfromtheaboveconditions,theloadingrate

shallbefurtherdeterminedandconfirmedbybothpartiesuponreceivingtheship

erwillbechargedfordemurrageofbargesatUSD2000/barge/dayduetolow

loadingratebecauoftheproblemsofveslfacilities,,craneetc.

Intheeventtheloadingisonlyfromonesideoftheveslduetobadweather(rougha,high

swell,etc)thentheloadingratewillbecalculatedonpro-ratebasisdependingonhowmany

cranesareworking.

ershallgiveanoticetotheSellercontainingthefollowinginformationatleastfourteen

(14)BusinessDayspriortotheexpecteddateofarrivalattheLoadingPortofaveslsuitable

forberthingandloadingattheLoadingPortandsuitablefordischargingattheDischargingPort

attheagreedrate,asarrangedbytheBuyerinaccordancewithClau8.1:

dparticularsofthevesl

’xpecteddateofarrivalattheLoadingPort

tyscheduledtobeloaded

hallgivetoSeller12days,10days,7days,3days,48hoursand24hoursnoticeofthe

vesl’stimatedtimeofarrivalattheLoadingPort.

ntheBuyer’sscheduleofshipmentandtheadviceofthevesl’sarrival,theSellershall,

beforesucharrival,completenecessarypreparationfortheloadingoftheCoal.

GTERMS

ershallgiveanoticeofreadinesstoloadthevesl(“NoticeofReadiness”)totheSeller,

afterarrivalattheLoadingPortonanydayincludingSundaysandholidaysprovidingthevesl

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’sguaranteeonesafeport/anchorageat

MuaraSatuiwhereveslshallalwaysbeafloatattheloadingport.

eCalculations

eforloadingshallcommencetwelve(12)hoursaftertheNoticeofReadinessis

tendered,oruponcommencementofloadingifsoonercommenced,andshallbeforaperiod

of;

amountinday=totaltonnageoftheshipment/agreedloadingrate(badonthevesl

nominationacceptance).

LaytimeforloadingshallbecalculatedonBillofLadingquantity

etoceaoncompletionofloading.

ngtimefromanchorage(atthetimethePilotisonboard)totheloadinganchorageshall

notcounttowardsLaytime.

ventoftheSeller’sfailuretoloadfullcargoonthearrivaloftheveslatloadport,all

lossincludingdeadfreight,demurrageincurredshallbeforSeller’the

loadingoftheveslisinterruptedformorethan72concutivehoursforreasonofcargo

shortageand/ornonreadinessofSeller’scustoms/port/governmentaldocumentation

formalities,BuyerhastherighttosailtheveslwithcargoonboardandSellershallbe

eslfailsto

arrivewithintheagreedlaycanordoesnotarriveatall(cancel),thenthebuyershallbe

responsibleforstoragecost,interestandassociateddirectcostincurred(includingfeeand

demurrageofbarges),opportunitylostatUSD0.5perMTperDaymaximum5daysfromthe

eedlaycanshallbemaximum5days.

lershallarrangeforthecargotobetransportedbybargetothesideofthevesl.

ageandDespatchMoney

lershallbeliabletopaytotheBuyerallDemurragechargescalculatedinaccordance

agechargesshallbepaidinrespectoftime

requiredtoloadtheveslinexcessofLaytimeattherateoftherelevantcharterpartyper

day(pro-rata)foralltimeinexcessofLaytime.

ershallbeliabletopaytotheSellerDespatchinrespectoftimeofLaytimesavedin

loadingthevesl,attherateoftherelevantcharterpartyperday(pro-rata)forLaytime

saved.

lerorBuyer(asthecamaybe)shallnotifytheotherPartybyfacsimileoftheamountof

lerorthe

Buyer(asthecamaybe)shallpaytheotherPartytheDemurragechargeorDespatchbonus

attheLoadingPortwithin30(thirty)daysaftercompletionofloading.

TheSellerandtheBuyer,respectively,mayappointtheiragentstoperformalloranypartoftheir

thatappointsanagent(s)toperformsuchobligationsshall,as

soonasisreasonablypracticable,notifytheotherPartyinwritingspecifyingthenameand

contactdetailsoftheagent(s).

Insuchevent,thePartywhohasappointedanagentshallbedirectlyandunconditionally

responsibletotheotherPartyinallrespectsastotheactsoftheiragentperformedwithinthe

scopeofagencycreated.

NCE

Buyershallberesponsibleforinsurancecoverfromdeliverypointtodestinationport.

AJEURE

AParty(“AffectedParty”)willberelievedfromtheperformanceofitsobligationsunderthis

agreement(butexcludingtheperformanceofanobligationtopaymoney)totheextentandfor

thedurationthatsuchperformanceispreventedthroughreductionof,orinterferencewiththe

production,delivery,receiptorconsumptionofCoalbyacaubeyondthecontrolandwithout

thefaultornegligenceoftheAffectedParty.

CausoreventsrelievingaPartyfromperformanceofitsobligations,totheextentandforthe

durationofsuchcausoreventsshallincludebutnotbelimitedtothefollowing:

ActsofGodorpublicenemies;actsofGovernmentineitheritssovereignorcontractual

capacity;Governmentalrestrictionsorcontrolonexportsorimports;war,riots,fires,

floods,strikes,lock-outs,epidemicsandquarantinerestriction.

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IfsuchForceMajeureconditionsorothercircumstancesbeyondthecontroloftheAffectedParty

occurorarelikelytooccur,theAffectedPartyshallnotifytheotherPartypromptlyofthe

occurrenceofsuchcircumstancesbyfacsimile.

TheAffectedPartyshalluallreasonableendeavor’storemovethecauofthedelay,

interruptionorfailureandtoresumewithatleastpossibledelayitsobligationsincompliancewith

rmoretheAffectedPartyshallfurnishtheotherPartywithaprogress

reportbyfacsimile,ofthethencurrentsituationweeklyorfromtimetotimeupontherequestof

theotherParty.

MENT

ThisAgreementisbindingonandforthebenefitofthePartiesandtheirsuccessors,transferees

andassigns,butthisagreementshallnotbeassignedortransferredbySellerorBuyer,inwhole

orinpart,eithervoluntarilyorbyoperationoflaw,withoutthewrittenconntoftheotherParty

beingfirstobtainedbutsuchconnttoassignmentshallnotbeunreasonablywithheld.

S

AnynoticegivenbyonePartytotheothershallbeintheEnglishlanguageandntbyfacsimile,

mail,icentbyfacsimileshallbedeemedreceivedonthedayof

transmissionandanynoticentbymailorcouriershallbedeemeddulyreceivedontheventh

dayfollowingdepositinthemallorwithcourier,prepaid,andproperlyaddresdasfollows:

SELLEROFFICE:

BANKDETAILS:AccountName:

AccountNumber:

BankName:IndustrialandCommercialBankofChina

(Asia)Ltd

Address:

Swiftcode:UBHKHKHH

BUYER:BankDetails:

Exceptashereinotherwispecificallyprovided,thefailureofeitherPartytoinsistonstrict

performanceofanyprovisionsofthisagreementortotakeadvantageofanyrighthereunder,

shallnotbeconstruedasawaiverofsuchprovisionsorrightorawaiverofanysubquent

performancethereof.

ESCUMULATIVE

Remediesprovidedunderthisagreementshallbecumulativeandinadditiontootherremedies

providedbylaw.

ThePartiesagreethattheywillcomplywiththeprovisionsofClau17priortoenforcingany

otherremediesprovidedbylaw.

INGLAWANDDISPUTERESOLUTION

reementshallbegovernedbythelawoftheICCInternationalChamberOfCommercein

Singapore

putearisinrelationtothequantityofCoaldeliveredunderClau4orinrelationtoan

invoicepursuanttoClau6,thedisputeshallbedeterminedbyanexpertandthefollowingshall

apply:

shallrvewrittennoticeontheotherstatingthesubjectmatteranddetailsofthe

disputeandrequiringthedisputetobereferredtothedeterminationofanexperttobe

gagreementwithin10daysafterthe

dateofthenotice,eachpartyappointanarbitratorforttingthedispute.

ert/arbitratorsshallgivetheirdeterminationwithin10workingdaysandsuch

tsoftheexpertshallbeborne

jointlybytheParties.

whereitrelatestothequantityofCoaldeliveredunderClau4,ortoaninvoicepursuant

toClau6,inwhichcaClau17.2applies,anydisputeordifferencearisinghereunderorin

anywayconnectedherewithistoberesolvedbyarbitrationinaccordancewiththelawICC

InternationalChamberOfCommerceinSingaporewhodecisionwillbefinalandbindingon

bothparties

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R

Buyerwarrantsthatthesubjectcargoisforendubythermalcoalurs.

ENTIALITY

ThePartiesagreetokeepalldetailsofthistransactionconfidential.

SELLERBUYER