SALE AND PURCHASE AGREEMENT - TradeKeyimgusr.tradekey.com/images/uploadedimages/brochures/2/8/6357733... · Letter of Credit (DLC), Standby Letter of Credit (SBLC), MT760 / MT103

Seller's Code: Buyer's Code: Contract nr. :

XXXXXXXXXXXXX.CIF BLCO 2012

JI/TOF/BLCO/2012/6

Seller Page 1 of 25 Buyer 2012

C O S T , I N S U R A N C E & F R E I G H T (CIF) C R U D E O I L C O N T R A C T SALE AND PURCHASE AGREEMENT Seller(s)'s Code: XXXXXXXXXXXXX.CIF BLCO Buyer's Code: Contract nr. :

THIS AGREEMENT (THE AGREEMENT") is entered into this XXth day of XXXXXXXXXX, 20XX, by

and between

SELLER(S) 1 / SELLER 2 BONNY TERMINAL, NIGERIA

Represented by [Hereinafter referred to as The Seller(s)]

And

BUYER Company :

Address :

Represented by: Title :

(Hereinafter referred to as the 'Buyer).

WHEREAS; The parties hereto mutually agree to accept the General Terms and Definitions, as set out by the INCOTERMS 2010 with the latest amendments, having the following terminology fully understood and accepted as here below. The Seller(s) has the legal right to title and conveyance of the product referred to herein below and hereby sells such product, and buyer is ready, willing and able to purchase said product subject to the terms and conditions of this Agreement.



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NOW; Therefore the parties agree as follows, it being understood that each may be referred to herein individually as a "PARTY" or collectively as the "PARTIES",

DEFINITIONS: +Seller(s)'s Supplier: The producer of the crude oil and/or petroleum product sold and purchased hereunder, when it does not originate from the Seller(s)'s own production.

+US Barrel: Is the unit of volume measured at standard temperature of 60 degree Fahrenheit and equal to 42 U.S. gallons.

+Metric Ton: A measure of weight equivalent to one thousand kilograms mass (1000 Kg).

+Loading Date: The date mutually accepted by both the Seller(s) and the Buyer as the date on which the nominated international surveyor Company has ascertained the quantity and Quality of the product pumped into the Buyer’s designated vessel

+Commodity: Is referred to as being Bonny Light Crude Oil, elsewhere in this agreement also referred to as Bonny Light Crude Oil, whose specifications are detailed in Annex »A« attached hereto as an integral part of this agreement.

+Day: Means Calendar Day, unless differently specified. +Month: Means Gregorian calendar month.

+Calendar quarter: The period of three (3) consecutive months commencing on 1st January, 1st April, 1st July or 1st October.

+ASTM: The American Society for Testing Materials, is the Institute, internationally that approved all Standards, Tests and Procedures used in the Oil Industry and to be referred in this contract to the latest revised edition with amendments to date enforceable.

+Out-turn: Is the quantity and quality of product ascertained, according to the ASTM procedures, on completion of the discharge operations. The so determined out-turn quantity and quality is the base on which the amount will be computed for the payment of the product effectively delivered to the Buyer.

+ Bill of Lading: Is the official document, issued at the loading port after completion of the loading operations, stating the ship's loaded quantity expressed in US barrels (bbl). This document has to be signed in original by the ship's Master and made out in accordance with the instructions hereinafter specified in this contract agreement.

+Discharge Terminal: The safe port or berth designated by the Buyer as the final receiving destination for the delivery of the commodity shall not be a restricted or embargoed port or berth.

+C.I.F: Cost, Insurance and Freight which is strictly referred to in the interpretation defined by the INCOTERMS Edition 2010 with the latest amendments.

+SPA : Herein as Sales and Purchase Agreement



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+SBLC : Herein as Irrevocable Confirmed T rans fe r rab le Standby Letter of Credit +Delivery Date: The date mutually accepted by both the Seller(s) and the Buyer as the date on which the nominated international surveyor's company has ascertained the quantity and quality of the COMMODITY. NOTE: Q&Q shall be conducted by buyers inspectors before discharge of the product into buyer’s storage facility or tank farm.

+Platt's: Platt's European Marketscan (www.platts.com), is the organization, internationally recognized and accepted, to publish determined official quotations of crude oil and petroleum products on a daily basis. +Cargo: shall mean any particular quantity of the oil loaded into vessel as set out in this agreement includes Part Cargo.

+Dollars or USD or US$ or $: Shall mean the monetary currency of the United States of America. +Naira or N : Shall mean the monetary currency of the Federal Republic of Nigeria +Oil : Shall mean Nigeria Light Crude Oil specified in this agreement. +Payment Instrument / Financial Instrument : Shall be an irrevocable, confirmed, Documentary Letter of Credit (DLC), Standby Letter of Credit (SBLC), MT760

AND; Whereas, the parties hereto mutually desire to execute this agreement which shall be binding upon and inure to the benefit of the said parties, their legal representatives, successors and assigns, in accordance with the jurisdictional law of the negotiated and fully executed contract agreement on the terms and conditions stipulated herein.

CLAUSE 1: SCOPE OF THE CONTRACT.

1.1 The Seller(s) and the Buyer, under full corporate authority and responsibility respectively represent that the Seller(s) is a lawful owner of the commodity, in quantity and quality as Hereunder specified, and the Buyer has the full capability to purchase the said commodity.

1.2 The Buyer desires to purchase Crude Oil (hereinafter called “Product”) of Nigerian Origin. The Seller(s) has the independent capacity and ability to purchase the product from the Nigerian National Petroleum Corporation (NNPC) or its official lifters and re-sell same to the Buyer.

The Seller(s) has accepted to procure the crude oil from the appropriate authorities and re-sell same to the Buyer and the Buyer has accepted to take delivery of products from and make Payments to the seller(s) for crude oil received, in pursuance of the realization of the objectives of this Agreement..

For the Contract to enter into force, the following documents attached will be considered an integrating, obligatory part of the present Contract:

a. Appendix A Guaranteed Specification, Certificate of Quality.

b. Appendix B Irrevocable Master Fee Protection Agreement (IMFPA)



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c. Appendix C Advance Payment Guarantee Verbiage

d. Appendix D Basis of Payment Standby Letter of Credit Verbiage MT 760

e. Appendix E Schedules of Quantity & Delivery Schedule (Revolving For Twelve Months)

f. Addendum A Pre-Advice MT705 Verbiage

NB: The Appendices and appended Addendum A form an integral and obligatory part of the Contract

CLAUSE 2 - COMMODITY

2.1. BONNY LIGHT CRUDE OIL, having the minimum guaranteed specifications as specified in Annex “A” attached hereto.

CLAUSE 3 - QUANTITY

3.1. The total quantity of the COMMODITY sold and purchased under this contract agreement is 2,000,000 barrels (Two Million Barrels) per month with a variation of plus or minus ten percent (10%) at the Seller(s)'s option. This specified quantity, equivalent to one month's supply to be repeated for twelve (12) consecutive calendar months as referred to in Clause 4.

CLAUSE 4 - TIME PERIOD

4.1. The term of this contract agreement is for a period of Twelve months (12) with possible rolls and extensions;

4.2. The initial lifting under this agreement shall take place within thirty (30) days from the acceptance date of the Buyer's financial instrument.

4.3. In the event there is more than one shipment to cover the monthly quantity, said shipments will be completed within a thirty (30) day time period.

4.4. The time period for the conclusion of each monthly quantity shall terminate once the last shipment for the current month has been assessed at the Buyer's designated discharge port. However, the time period between the first and the last shipment shall not exceed thirty (30) days.

CLAUSE 5 – TITLE AND RISK

5.1. Title to and risk of loss or damage to the crude oil to pass from seller(s) to buyer at the load port as the crude oil passes the flange connecting the shore loading facilities to the vessel’s manifold.

CLAUSE 6 - QUALITY

6.1. The Seller(s) guarantees that for the full term of this contract agreement, the quality of the COMMODITY sold will conform with the guaranteed specifications specified in Annex “A” attached hereto.

CLAUSE 7 - PRICE

7.1. The price shall be determined by the average of the three days around the Bill of Lading date (the day before Bill of Lading, the day of the Bill of Lading and the day after Bill of Lading) referred to in



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Platt's publication, heading: DTD BRENT. Said gross discount per barrel, from Platt’s Market Wire Dated Brent, will be the average of the mean quotations for the three (3) days.

7.2. In the event that any of the “pricing days” falls on a Saturday or bank holiday other than Monday, prices for that day shall be taken from Platt’s published on the preceding bank business day. If any “pricing day” falls on a Sunday or Monday bank holiday, the prices for that day shall be taken from Platt’s published on the next bank business day.

7.3. The Buyer undertakes to nominate the discharge port(s) as any safe USA, European, or any other world port not restricted or embargoed by any international organization. Both parties agree to set the price by using the above-mentioned publication.

7.4. A gross discount of …. United States Dollars (US$ 0.00) per barrel shall be applied to the price as was determined by Clause 7.1 above, with a net discount of ….. United States Dollars (US$ 0.00) to Buyer and … United States Dollars (US 0.00) to Seller(s)’s and Buyer’s Brokers/Facilitators.

7.5. The price referred to throughout this agreement to be paid in United States Dollars.



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7.6. PRICE DEFINED:

Gross: USD$0.00 per Barrel Net to Buyer: USD$.00 per Barrel. Seller(s)’s Agent / Facilitators / Brokers: USD$.00 Per Barrel The price for Goods to be delivered under this Agreement is determined in US Dollars (United States of America Currency)

CLAUSE 8 - PAYMENT CONDITIONS

8.1. Payment Ins t rument in U.S. Dollars to be assisted by an irrevocable, confirmed, Documentary Letter of Credit (DLC), Standby Letter of Credit (SBLC), MT760 / MT103 payable 100% at the desk of Buyer's bank, issued by Buyer’s bank in favor of the Seller(s) and automatically re-instating on a load-to-load basis until completion of the contracted quantity.

8.2. Format of the Letter of Credit to be in accordance with the latest UCP 600. The text of the Letter of Credit shall be acceptable by both the Seller(s) and the Buyer as per Appendix “D”

8.3. The Letter of Credit value in U.S. Dollars shall correspond to the value of said crude oil delivered on a load-to-load basis until completion of the contract quantities.

8.4. The Letter of Credit will be on a load-to-load basis subject to Buyer's and Seller(s)'s Bank approval.

8.5. Payment by Buyer shall be via TT Wire Transfer to the Seller(s) for the entire cargo shipment and commissions shall be made 100% within Seventy-Two (72) banking hours via the Buyer’s bank upon presentation and receipt of the documents identified and set forth in article 20.5 herein.

8.6. The Quantity, as assessed at the discharge port by SGS or Saybolt and price determined as per Clause 7.1 of this contract, will be used to compute the Seller's invoice.

8.7. The amount of the Financial Instrument shall automatically adjust to cover the total amount (in U.S. Dollars) of the scheduled crude oil load

8.8,.If payment due date falls on a banking holiday then payment shall be made on/or before the nearest preceding business day to the due date.

8.9. In the event of any difference between the total amount drawn from the established Letter of Credit and the amount corresponding to the total value of the cargo effectively delivered, as assessed at the discharge port, the difference shall be paid immediately by the buyer to the seller(s).

8.10. On the last month and final delivery of the contract, the above mentioned difference as per clause 8.9 shall immediately be paid at sight at the time of payment.

8.11. TRANSACTION & BANKING PROCEDURE

8.11.0. Seller(s) and Buyer execute this contract and exchange the signed and sealed copies by electronic mail, lodge the copies of the contract with their respective banks. This electronic signed and



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sealed copies are considered as originals, legally binding and enforceable. 8.11.1

a) Within 5 (Five) banking days of receipt of signed and sealed SPA from the Buyer, Seller instructs the Captain of the carrying vessel to issue official NOR (herein as : Notice of Readiness) to the buyer and buyer’s bank. On the NOR will be time for communication with the Captain through the vessel’s line for verification. Copies of correspondence are to be sent via e‐mail to all parties concerned.

b) Buyer bank issues swift pre advice DLC as buyer POF (proof of fund – MT705) to Seller “1” bank account ‐within 2 (Two) working days upon buyer receiving the NOR from the captain of the vessel ‐ for the confirmation of buyer financial capability to purchase product and quantity mentioned. {MT 799 / BCL not in acceptance by seller(s) bank as POF}. Copy of the Pre‐Advice (POF) is as well to be sent by fax / e‐mail to the Seller(s) in order to speed up verification and transaction.

8.11.2.

Within 3 (Three) Banking days, Upon the above mentioned verification, Seller “2” requests to Seller “1” in writing on the company letterhead a N200m APG equivalent (Advance Payment Guarantee – See Appendix C format) from seller “1” bank in Seller “2” favor stating Seller “2”’s READINESS/WILLINGNESS to pay said sum to seller “1” upon receipt of the APG made available to Seller “2” nominated bank in Nigeria (or abroad) covering the sum required for ATB, CLEARANCE for inspector (which would be either Overseas Marine Services, Calibrate Inspectors or CORE Inspectors due to off OPEC transaction) and S‐CARGO and their boarding respectively, it also covers for doing shipping documents, Certificate of ownership in Seller “2”’s name and the registering of same in NNPC Abuja and programming the cargo and vessel on London Shell screen and made it confirmable of Shell screen in Seller “2”’s name.

8.11.3. Seller “1”'s bank, in no more than Three (3) banking days from receipt as per clause 8.11.2, posts to Seller “2”’s bank, the Advance Payment Guarantee (APG) in Seller “2”’s favor and makes same available to his nominated bank in Nigeria (or abroad) for Seller “2”’s compliance within 72hrs of receipt of the said APG.

8.11.4. The Seller “2”'s bank in no more than Three (3) banking days, after verification and confirmation from receipt and acceptance of the advance Payment Guarantee per clause 8.11.3, makes the agreed N200m (or US$ equivalent) payment in favor of the Seller “1” to the Seller “1”’s bank account for logistics cost made deductible from final payment of cargo sum and made GUARANTEED BY THE APG WITHIN A PERIOD OF 45DAYS.

8.11.5. Seller “1”, on receipt of sum of N200m (Two Hundred Million Naira only) onto Seller “1” account as per clause 8.11.4, within three (3) days does ATB, CLEARANCE and Boards buyer’s nominated INSPECTOR SELLER(s) PAYS FOR OVERSEA MARINE OR CALIBRATE AS MAY BE NOMINATED AND CONDUCT FIRST Q/Q IN SELLER “2”’S NAME and S‐CARGO respectively for Q/Q TEST and REMAINS of S‐CARGO on board throughout the transaction.



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8.11.6.

Within another Eleven (11)days, seller(s) “1” does shipping documents and Certificate of ownership in Seller “2”’s name and register them at NNPC Abuja Office AND as well do programming of vessel and cargo in Seller “2”’s name on Shell Screen confirmable in NNPC’s London office and as well do CUSTOMS OUT‐WARD CLEARANCE for vessel’s readiness/worthiness to sail SAFELY out of Nigerian Water to Buyer’s safe Port of Discharge (Herein as : POD).

8.11.7. On obtaining all documents and programming for Seller “2” in Seller “2”’s name and as well obtain customs outward clearance for safe exit from Nigeria water, Seller “2” provides applicable product information(s) to the Buyer for verification and confirmation of the availability of product and the Seller(s) right to sell and does NOR to the Buyer and Buyer’s bank. Upon verification and confirmation of the latter, Buyer within forty‐eight hours (48hrs) issues Payment Instrument as per Appendix “D” herein, Seller(s) transfer and or reassign the title into the Buyer’s name upon receipt and verification of the payment instrument and Seller(s) move vessel to buyer’s port of inspection at any port of discharge in the world. 8.11.8. Seller(s) ask captain of vessel to send ETA FROM VESSEL’S LOADING PORT IN Nigeria waters to buyer’s POD and to be updated every 24/48/72 hours until vessel arrives at given point for inspection and upon arrival, the vessel master does ATB (Authority To Board) after announcing her arrival to the Buyer’s harbor master at the given POD. 8.11.9. On arriving buyer’s POD POINT Seller(s) ask the master of vessel to do another ATB to board buyer’s inspector(s) at POD and arrange inspection boat to board inspector(s) (SGS) at buyer’s POD. After a satisfactory inspection, all expenses at inspection port including inward clearance and tugboat and e.t.c are borne by the buyer.

8.12. After inspection, seller “1” issues commercial invoice which would not necessarily include intermediaries and facilitators computations and after which buyer, within forty‐eight hours (48hrs) of receipt of commercial invoice, makes payment based on Q/Q report made on vessel by buyer’s nominated inspector(s), including payments to Seller(s) / intermediaries / facilitators / Agents simultaneously as agreed in this SPA. 8.12.1 Seller(s) on log siding vessel to discharge, buyer makes payment to Seller(s) for cargo and to the intermediaries / facilitators bank accounts herein and seller(s) ask vessel to discharge after exchanging full payments for original documents as mentioned above. 8.12.2

Vessel SAFELY returns from buyers POD without any harassment to Nigeria.



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CLAUSE 9 - DELIVERY

9.1. The Seller(s) warrants to perform delivery of the transacted Commodity on a CIF basis to any safe USA, European, or any other world port on an out-turned barrels basis, out side customs, to the Buyer's designated discharge port(s) as per Appendix “E”

9.2. The Buyer shall specify the port(s) of discharge in accordance with the approved quarterly delivery schedule.

9.3. In accordance with the provisions set out in the above Clause 3, the Seller(s) and the Buyer hereby acknowledge to perform the delivery of each monthly lot in batches of not less than 2,000,000 (Two Million) barrels each.

9.4. The Buyer will have the option to change his designated port, provided that written notice is given to the Seller(s), at least Seven (7) calendar days prior to the scheduled lifting date range of the effected ship. In the event that the buyer declares his option to discharge the cargo at any other acceptable port within the permitted range, the Buyer shall bear the freight difference according to the AFRA list for such action.

9.5. The Seller(s) to notify the Buyer of the chartered ship's full particulars (general dimensions, cargo system arrangement, maximum unloading capacity rate, cargo tanks capacities at Ninety-eight percent (98%) loaded, manifolds sizes and reductions available on board). This information must be provided to the Buyer at least three (3) days prior to the Seller(s)'s vessel nomination, so as to assure compliance at the Buyer's discharge port.

9.6 The Seller(s) shall ensure timely delivery of the ship(s) to the discharge port(s) in conformity with the approved schedule.

9.7 This Agreement delivery terms shall be on CIF out turn barrel basis. Any terms not covered by this Agreement shall be covered by INCOTERMS 2010 for CIF sales. 9.8 The Parties also hereby agree that the Seller(s) should notify the Buyer with the entire necessary vessel’s information that will enable the Seller(s) to confirm in a timely manner by keeping contact with the vessel and knowing its exact ETA (As might be required by the Buyer.)

9.9 The ship's Master shall notify to the Buyer and the Ship owner's Agent at the port of discharge, the ship's ETA 120 hours before her arrival, her name, tonnage, flag, draughts, on board quantities, and actual time of arrival 120, 72, 48, 24 and 12 hours before her arrival to the port of discharge.

CLAUSE 10 - INSPECTION - QUANTITY/QUALITY DETERMINATION

10.1. The Seller(s) and the Buyer mutually agree that SGS or Saybolt shall be appointed at both designated loading and discharge ports, to assess the quality and quantity of the cargo according to the provisions herein stated.

10.2. The Seller(s) will pay the total inspection fees at the loading port and the buyer will pay the total inspection fees at the discharge port as per SGS's or Saybolt's invoice.



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10.3. The quantity and quality assessments, conducted by SGS or Saybolt, shall be in accordance with methods and procedures usually used in the oil industry practice and, at all times, shall strictly comply with the revised ASTM/IP International standards and procedures enforced at the date of compliance.

10.4. For converting volumes, from observed to standard temperatures, and volumes to weights, the ASTM tables latest revised edition have to be used.

10.5. In the event of there being an inaccuracy with the devices used to measure the quantity received at the discharge port (failure of flow meters, meter banks and/or other devices) then, manual shore tank measurement shall be applied. Should SGS or Saybolt report that the above is the case, then ship's figures TCV (Total Calculated Volume), applied by the valid V.E.F. (Vessel Experience Factor), shall be used to compute the delivered quantity of the current batch.

CLAUSE 11 - INSURANCE

11.1. The Seller(s), at his own expense, shall procure a policy with a first class Marine Insurance Institute to cover the 110 % (one hundred and ten percent) of the value of the cargo. The customary standard insurance policy will cover all risks of loss or damages to said cargo, including war, hijacking, explosion etc. from the time cargo has passed into the ship’s manifold flanges at the loading port and until discharged at the unloading port.

CLAUSE 12- ADVANCE PAYMENT GUARANTEE (APG)

12.1.The Payment Guarantee only becomes validated upon the buyer’s bank payment of the agreed equivalent of N200m (Two Hundred Million Naira) in favor of the seller(s) and posted into seller(s)’s bank account as per clause 8.11.4.

12.2. According to clause 8.11.3 of this contract, the Seller(s)’s bank in accordance with the provisions set out, will post into the buyer’s bank account, an Irrevocable Advance Payment Guarantee to cover the value as per APPENDIX “C”.

12.3. The format of the Advance Payment Guarantee shall be in accordance with the latest ICC

URDG 458 (International Chamber of Commerce Uniform Rules for Demand Guarantee) as per “APPENDIX C”

12.4. Except as expressly provided in the Agreement, neither Seller(s) nor Buyer shall be liable for

any indirect or consequential losses which may be suffered or alleged to have been suffered by the other party.

CLAUSE 13 - SANCTIONS (NON PERFORMANCE)

13.1. Should either party fail to comply with any of their obligations to the other party hereto, the injured party will have the option to declare non-performance against the defaulting party.

13.2. Failure by either party to take action against the other, in case of the other party's non-compliance with obligations or conditions set forth herein, shall not be interpreted as a waiver to take action for a subsequent non-compliance of the same, or other obligations or conditions.



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CLAUSE 14 - CLAIMS

14.1. Claims that either party may raise due to failure of performance shall be submitted to the defaulting party within a period of thirty (30) days from the date of that occurrence of default.

14.2. If within thirty (30) calendar days from date of discharge of vessel, the Buyer fails to inform the Seller(s) confirming the non-compliance, the COMMODITY will be deemed to have been accepted by the Buyer and no claim will be accepted by the Seller(s).

14.3. All claims shall be made in writing and both parties hereto agree to acknowledge such claims by written acceptance thereof.

CLAUSE 15 - TAXES, OBLIGATIONS AND IMPOSTS

15.1. The Seller(s) shall pay all taxes, charges and duties related to the vessel and the commodity.

15.2. The Buyer shall pay all taxes, duties and charges related to the COMMODITY that would be collected at the discharge port.

CLAUSE 16 – LIABILITY EXEMPTIONS

16.1. The force majeure Clause 2003 (ICC Brochure #650) is hereby incorporated into this contract.

16.2. This contract may be terminated by either party with notice if performance under this contract

cannot be resumed within thirty (30) days. 16.3. The certificate issued in original by the competent recognized authority shall be deemed as

sufficient proof for the claim under force majeure for the entire duration of the contract. CLAUSE 17 - APPLICABLE LAW

17.1. English law shall govern all matters relating to the validity, interpretation or performance of this contract.

CLAUSE 18 - BREACH

18.1. Subject to Clause 16 hereof, in case of failure of the Seller(s) and/or the Buyer to comply with any of the obligations assumed under this contract, shall entitle the other party, without prejudice to any recourses available to it, to consider such failure as a breach of this contract and to terminate the same, or to unilaterally suspend its performance until such failure is corrected, and in both cases, may claim direct damages for the breach of this contract.

CLAUSE 19 - ARBITRATION

19.1. All disputes arising in connection with the present contract, which cannot be amicably settled within a period of ten (10) days, shall be finally settled under the rules of Conciliation and Arbitration of



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the International Chamber of Commerce Court of Arbitration in London, England, in accordance with the said Rules.

19.2. Further, the parties agree that the arbitration proceedings shall be conducted by one (1) arbitrator and shall be conducted under the "expedited procedures" format. The proceedings shall be conducted in English. The arbitrator's decision shall be accepted as final and binding. The parties agree that they will satisfy any judgment so awarded within ninety (90) days. The prevailing party shall be entitled to costs and reasonable attorney fees. Venue for the arbitration shall be London, England.

19.3. Neither party shall fail to comply in a timely way with the obligations of this part to be performed in accordance with this contract agreement although a dispute has arisen and proceeded to arbitration.

19.4. The findings as assessed by the designated Arbitrator, without any possibility of recourse, will be final and binding on both parties.

CLAUSE 20 - SPECIAL CONDITIONS

20.1. The Buyer warrants that it has exerted and shall continue to exert its best efforts to avoid any action, which might be in any manner detrimental to the Seller(s)'s interest in the negotiation, execution and performance of this contract.

20.2. The parties hereby agree that all terms, which are not specifically confirmed and agreed upon in this contract, have to be referred to the general rules of the ICC INCOTERMS Edition 2010 with latest amendments.

20.3. Upon mutual agreement of both parties, this contract can be extended for the same time period having the same terms and conditions of this contract, providing that either party submits their written request to the other party by no later than one (1) month prior to the termination of this contract.

20.4. Upon execution of the contract the Seller(s) provides the Buyer with three complete copies of the executed contract, consisting of a firm declaration issued by the loading terminal(s) or refinery(s) directly to the Buyer confirming the following points:

20.4.1. That the contracted quantity of 2,000,000 (Two Million) barrels per month to be delivered in cargoes of at least 2,000,000 (Two Million) barrels or larger, unless otherwise agreed.

20.4.2. That the first monthly delivery schedule, commencing Thirty (30) days from acceptance of the Documentary Letter of Credit.

20.4.3. That the declaration must report the dates of shipments names of vessels (if not available it will be sufficient to state “TBN” - To Be Nominated) and the quantity to be loaded.

20.4.4. That the validity of the allocation assignment as reported in the above Clauses, is subject to the acceptance by the Seller(s) of the Buyer's Letter of Credit.

20.4.5. All relevant documents from the Port of Loading, Transport Contract, Certificate of Ownership and Origin will form part of the documentation presented at the port of loading.



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20.5. The Seller(s) will negotiate his due credit against each delivered shipment upon presentation and acceptance of the following Documents:

20.5.1. Full set of 3/3 original plus 3 N/N copies Bill of Lading made out "Clean on Board" marked "Freight Prepaid". The B/L to be signed in original by ship's Master or endorsed to the order of the Buyer, showing destination, identification of the loaded cargo with quantity expressed in U.S. Barrels at 60 degrees Fahrenheit and metric tons;

20.5.2. Original quantity and quality certificates plus two (2) copies as issued at loading port and discharge port by an independent surveyor company;

20.5.3. Certificate of Origin plus two (2) copies countersigned by loading dock terminal representative;

20.5.4 Original time log plus two (2) copies as issued at the discharge port by an independent surveyor company and countersigned by the involved parties or their representatives;

20.5.5. Original Master's receipt of samples and documents, except the document provided per Clause 20.5.7, at loading port plus two (2) copies;

20.5.6. N.O.R. lodged by ship's Master at discharge port countersigned for acceptance by the terminal's representative (Original plus two (2) copies);

20.5.7. Signed commercial invoice, based on the delivered quantity/quality as determined by Clause 9 of this contract.

20.6. Any other documents inadvertently not listed which pertain to or are related to the current trip, duly signed by the authorized persons.

CLAUSE 21 - LAYCAN - LAYTIME - DEMURRAGES

21.1. LAY-CAN

21.1.1. The Seller(s) and the Buyer hereby agree on a quarterly delivery schedule specifying the lay-can at Buyer's designated discharge port(s) per each single batch to be delivered.

21.1.2. Every fifteenth (15th) day of the third (3rd) month of the current quarter, the next quarterly delivery schedule shall be agreed upon by the parties.

21.1.3. At the Buyer's nominated discharge terminal, the Buyer and the Seller(s) agree to be set-up five consecutive calendar days as lay-can which have to be confirmed at least ten working days prior to commencement of the same.



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21.2. LAY-TIME 21.2.1. The buyer shall be allowed thirty-six (36) running SHINC hours for discharging Vessels chartered for use in this contract shall be capable of discharging their entire cargo within twenty- four (24) hours or maintain 100 PSI at ship's rail.

21.2.2. Notice of readiness (N.O.R.) shall be given, on ship's arrival at the Buyer's designated discharge port(s), by the ship's Master to Buyer and/or Agent, by radio, cable or by hand at any time including Saturdays, Sundays and holidays.

21.2.3. Lay-time, at discharge port, shall commence upon the expiration of six (6) hours after presentation of vessel’s NOR at Buyer’s discharge port or on her being all fast in berth with the permanent shore hose being connected to ship’s manifold, whichever first occurs.

21.2.4 The time spent for customs/health/port authority formalities, pilotage from anchorage area to berth, mooring, or crossing river mouth, not to count as lay time.

21.3. DEMURRAGES

21.3.1. Demurrage, if any; at the loading port shall be for the account of the Seller(s). Demurrages at the discharge port, if any, which are caused by Seller(s)’s vessel or crew, will be paid by the Seller(s) to the Buyer at sight, at first and simple written request. Conversely, if demurrages have been caused by the Buyer’s discharge terminal then the corresponding amount shall be borne by the Buyer to be paid to the Seller(s) at sight, at first and simple written request.

21.3.2. Demurrages amount shall be computed at the Chartered Party rate.

21.3.3. Demurrage will be based on daily rate or pro-rata thereof.

21.3.4. If the vessel arrives at the discharge terminal ahead of the range of days in accordance with Clause 21 such notice shall only be effective as from 00.01 hours on the first of these days, unless the discharge terminal begins to discharge the vessel before such time. In the case of a vessel arriving later than the range of days accepted, the discharge terminal will use its best efforts to minimize the delay to discharge. However, in such cases, lay time will only start to count upon the vessel being all fast in berth.

CLAUSE 22 - LETTER OF INDEMNITY

22.1. The Seller(s) expressly declare and warrant that all products sold and delivered to the Buyer under this Agreement are free from all encumbrances, and not derived from illegal/criminal sources.

22.2. In case the Seller(s) is not able to deliver to the Buyer the full set of original Bills of Lading for the cargo, prior to the vessel’s arrival at Buyer’s nominated discharge port, then the Seller(s) shall provide the Buyer with a hard copy of a Letter of Indemnity issued or endorsed by Seller(s)’s bank covering the temporarily missing original Bills of Lading.

22.3. Wording of this letter of indemnity to be acceptable to the Buyer and shall cease to have effect upon presentation of the original bills of lading.

22.4. In the event of unusual circumstances which prevent the Seller(s) from presenting to the Buyer the original bills of lading within a sixty (60) days period, the Seller(s) agrees to provide the Buyer and the



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Buyer agrees to accept a second and subsequent letter of indemnity covering the cargo batch in question.

CLAUSE 23 - ASSIGNMENT

23.1. Seller(s)/Buyer may at any time assign this contract or its total or partial performance hereof to any other company, which assumes the obligations of the Seller(s)/Buyer under the terms of the assignment. Formal notice of the assignment shall be rendered to the Buyer/Seller(s), expressly indicating thereon the assignee's full coordinates.

The letter of indemnity should be confirmed with full banking responsibility by a Top Western Bank.

CLAUSE 24 - GENERAL

24.1. This contract agreement contains the entire understanding between the parties with respect to the transactions contemplated hereby and can only be amended by a written agreement.

24.2. Any prior agreement written or verbal is deemed merged herein and shall be superseded by this contract agreement.

24.3. This contract agreement may be executed simultaneously in two (2) or more counterparts each of which shall be deemed to be an original.

24.4. The article and other headings in this contract agreement are for convenience only and shall not be interpreted in any way to limit or change the subject matter of this contract agreement.

24.5. All signed appendices, annexes and supplements shall constitute an integral part of the present contract.

24.6. With the exception of cases specifically mentioned in the present contract neither party may be held liable for indirect limited losses resulting from non- performance of the obligations hereunder.

24.7. Conditions that have not been specified in the present contract shall be governed by INCOTERMS 2010 and subsequent amendments related to CIF designated discharge ports on an out- turn quantity/quality basis.

24.8. EDT (Electronic Document Transmission) shall be deemed to be valid and enforceable in respect of the provisions of this contract. Either party shall be in a position to request a hard copy of any previous electronically transmitted document.

24.9. Grammatical mistakes, typing errors, if any, shall not be regarded as contradictions.

24.10. Any information contained herein shall be kept confidential, and shall not be subsequently disclosed to third parties or reproduced in any way.



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CLAUSE 25. NON-CIRCUMVENTION / NON DISCLOSURE:

25.1. The undersigned parties do hereby accept and agree to fulfill obligations due to intermediaries and facilitators. In the event of direct, or even indirect circumvention through a third party, the circumvented party shall be entitled to legal monetary award equal to the maximum service fees it should have realized from the transaction.

25.2. Upon execution and completion of this agreement, the clause 25.1 in this contract shall

remain binding on both parties for a period of 36 months. CLAUSE 26 - BANKING CO-ORDINATES

SELLER(S) 1 BANKING INFORMATION/COORDINATES:

BANK:

ADDRESS:

SWIFT CODE

BENEFICIARY

ACCOUNT NUMBER:

BANKING OFFICER:

TELEPHONE:

Email:

SELLER(S) 2 BANKING INFORMATION / COORDINATES: BANK:

ADDRESS:

SWIFT CODE



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BENEFICIARY

ACCOUNT NUMBER:

BANKING OFFICER:

TELEPHONE:

Email: SELLER(S) INTERMEDIARY BANKING INFORMATION / COORDINATES:

BANK:

ADDRESS:

SWIFT CODE

BENEFICIARY

ACCOUNT NUMBER:

BANKING OFFICER:

TELEPHONE:

Email:

BUYER’S BANKING DETAILS

BANK:

ADDRESS:

SWIFT CODE

BENEFICIARY

ACCOUNT NUMBER:

BANKING OFFICER:

TELEPHONE:

Email:



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BUYER’S INTERMEDIARY / FACILITATORS BANKING DETAILS

BANK:

ADDRESS:

SWIFT CODE

BENEFICIARY

ACCOUNT NUMBER:

BANKING OFFICER:

TELEPHONE:

Email:

BUYER’S INTERMEDIARY / FACILITATORS BANKING DETAILS

BANK:

ADDRESS:

SWIFT CODE

BENEFICIARY

ACCOUNT NUMBER:

BANKING OFFICER:

TELEPHONE:

Email:



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CLAUSE 27 - CONCLUSION

27.1. The present contract agreement is compiled in six (6) copies containing nineteen (21) pages, including two (2) Annexes.

27.2. All copies are in English, each party hereto receives three (3) copies which are binding and enforceable after signature.

27.3. The contract agreement copy executed by facsimile or EDT or E-mail is enforceable and legally binding until the Hard Copies of the same have been executed, notarized and exchanged by courier mail.

SELLER(S) AND BUYER’S ACKNOWLEDGEMENT:

This document constitutes a GUARANTEED, IRREVOCABLE, UNCONDITIONAL AND NON RETRACTABLE PAYMENT ORDER issued to the beneficiaries named herein, given with full corporate responsibility, by which I hereby instruct my bank as specified herein, to simultaneously pay, without any protest and/or delay, upon the closing of each and every trencher, until the transaction under the above entered codes is totally completed, the compensation to the beneficiaries' bank accounts, as stipulated herein.

SUCCESSORS: This Agreement is binding upon and inures to the benefit of the successors, assignees, heirs and personal representatives of the receiving person(s).

ATTESTATION: The above-mentioned transaction between Buyer(s) and Seller(s)(s) involving the purchase of 2,000,000 BARRELS of BONNY LIGHT CRUDE OIL with possible rollovers and extensions. The following will set out the Protection of Fees, should a contract be executed and consummated under the terms and conditions mutually agreed upon by the Principles or their mandate Agents.

In witness hereof, the undersigned has set his/her hand on this XXTH day of XXXXXXXXXXX, 20XX. THE SELLER(S) “1”: Company :

Address :

Telephone: Email:

Authorized Signature SEAL:

Managing Director:

Date: This xxth Day of xxxxxxxxxxx, 20xx.



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THE SELLER(S) “2”: Company :

Address :

Telephone: Email:

Authorized Signature SEAL:

Managing Director:

Date: This xxth Day of xxxxxxxxxxx, 20xx. WITNESS

Name: xxxxxxxxx. Signature:

Date: This xxth Day of xxxxxxxxxx, 20xx The Buyer:

In witness hereof, the undersigned has set his/her hand on this XXTH day of XXXXXXXXXXX, 20XX.

THE BUYER: Company :

Address :

Telephone: Email:

Authorized Signature SEAL: Managing Director:

Date: This xxth Day of xxxxxxxxxxx, 20xx. WITNESS

Name: xxxxxxxxx. Signature:

Date: This xxth Day of xxxxxxxxxx, 20xx.



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APPENDIX “A” PRODUCT DESCRIPTION (BONNY LIGHT CRUDE OIL)

The Nigerian Bonny Light Crude Oil shall comply with the Following Nigerian

National Petroleum Corporation (NNPC) Official Technical Specifications:

BONNY LIGHT CRUDE OIL NNPC TECHNICAL SPECIFICATIONS:

SPECIFIC GRAVITY: 0.8398

API AT 60 DEG. F: Min 35.7 – Max 37.00 +/- 5% (ASTM D-1298)

WATER CONTENT BY DISTILLATION: 0.2% (ASTM D-4006)

POUR POINT DEGREES F: BELOW 40 (ASTM D-97)

SULFUR WEIGHT %: 0.14 (ASTM D-139)

SALT CONTENT PARTS PER BILLION: 3.0 (ASTM D-526)

REID VAPOR PRESSURE (P.S.I.G.): 6.52 (ASTM D-529)

KINEMATIC VISCOSITY @ 30 DEG. C: 2.2 (ASTM D-523)

DISTILLATION INITIAL BOILING POINT (IBP): 35 DEG. C (ASTM D-86)

DISTILL TO 75 DEG. C VOL.%: 7.0



DISTILL TO 300 DEG. C VOL%: 60.5

COLOUR Dark Brown



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APPENDIX “B”

IRREVOCABLE MASTER FEE PROTECTION AGREEMENT (IMFPA)

Transaction code: Ref. number : Subject to the conclusion and the taking over of the cargo loaded on XXXXX” we, XXX., hereby agree with full corporate liability to make the following payments in US dollar to the seller(s) side and buyer side intermediaries / agents scheduled below on each and every shipment made under this contract including any rolls and extensions at the time of negotiation of shipment documentation.

This master fee protection agreement will form part of this purchase and sale contract dated ……… 2010 between seller(s) and buyer, and will be included within any amendments and changes made thereto. Payment will be made directly from the buyer’s bank with buyer’s financial instrument directly to the consultants, intermediaries and agents. payment orders will be issued prior to the first shipment/collection under the contract.

We, …... agree to provide all beneficiaries with written evidence of the pay orders lodged with our bank together with acknowledgements of their acceptance, provided always that transaction will be concluded and delivery of product will be delivered by seller(s)s and taken by buyers, failing of which for any reason, this master fee payment agreement will be null and void with buyers and seller(s)s free of any responsibility.

It is understood that for the purpose of this master fee protection agreement that buyer’s bank shall be the same bank and branch issuing the payment instruments, i.e. letters of credit, as payment for the product and as nominated in the aforementioned contract (which this imfpa acts as an integral part thereof).

All consultants, intermediaries / agents reserve the right to reassign their account at a later date, one (1) day before seller(s)s issue their commercial invoice.

We particularly agree to protect the said fees as contained in this contract, based on a BONNY LIGHT – DISCOUNT of $ per bbls to BUYER. The fees and commissions to be protected and paid by Seller(s) 2 are as IMFPA and above refer.



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APPENDIX “C” ADVANCE PAYMENT GUARANTEE (APG) FORMAT

IRREVOCABLE, CONFIRMED, TRANSFERABLE, AND DIVISIBLE ADVANCE PAYMENT GUARANTEE

To : (The Buyer’s Bank)

Beneficiary: :

We are informed that M/S…………………………………………. (Hereinafter called the Seller(s)) has entered into a contract with your client M/S ……………….(Hereinafter called the Buyer), dated ……2010, contract number: …………………..for the supply of _______________________and that an Advance Payment Guarantee of two Hundred Million Naira equivalent (N200m) is required, in the sum of US Dollars ...000,00 (... ……….. US Dollars) for shipments of 2,000,000 BBLS (Two Million Barrels) per month (+/‐ 10 %), revolving for the entire duration of the contract agreement.

Therefore, we, Bank …………….., hereby issue our Irrevocable, Confirmed, Transferable, Assignable and Divisible Advance Payment Guarantee, Guarantee No. ……and undertake to pay you any sum or sums not exceeding in aggregate USD ...........000,00 on receipt by us of your first demand in writing accompanied by your signed declaration stating that the amount claimed is due by reason of the Seller(s) having failed to fulfill his obligation in accordance with the terms and conditions of the above contract…………

Our Guarantee is valid until ………………, 20__ and thereafter automatically reinstated for the same period against simultaneous receipt of reinstated monthly Letters of Credit for each following month and is available by payment at our counters. Any claims must be received by us on or before that date, after which our liability to you under our Guarantee will cease and our Guarantee will be of no further effect.

This Telex / Swift message is the operative instrument and no mail confirmation will follow. “

OUR GUARANTEE IS SUBJECT TO URDG, 1992, ICC PUBLIC. NR. 458, WITH LATEST REVISIONS, AND IS GOVERNED BY THE LAWS OF ENGLAND.

Yours faithfully,

‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

Signature Counter Signature

The verbiage of this APG may vary without material change.



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APPENDIX “D” ( STANDBY LETTER OF CREDIT Draft/ Verbiage)

Final Text to be agreed bank to bank

(TO BE SENT VIA BANK‐TO‐BANK SWIFT STANDBY LETTER OF CREDIT OUTPUT)

ISSUED BY

INSTRUMENT OF GUARANTEE

CUSIP NUMBER

ACCESS CODE EXPIRATION DATE

ISSUE DATE MATURITY DATE

CURRENCY

AMOUNT

ISSUED BY

Beneficiary:

Receiving Bank:

WE THE UNDERSIGNED <MAJOR WORLD BANK>,

HEREBY OPEN OUR IRREVOCABLE, TRANSFERABLE, ASSIGNABLE AND CONFIRMED STANDBY LETTER OF CREDIT IN FAVOUR OF______________________ FOR THE AMOUNT OF 00,000,000(000, MILLION USD) DUE, ONE YEAR AND ONE DAY FROM THE DATE OF ISSUE DD/MM/YYYY

PAYMENT IS AVAILABLE BY BENEFICIARY FIRST WRITTEN DEMAND VIA SWIFT WIRE SYSTEM. DEMAND HEREUNDER MUST BE MARKED, DRAWN UNDER THE LETTER OF GUARANTEE NUMBER ___________ DATED DD/MM/YYYY, BUT NOT LATER THAN FIFTEEN (15) DAYS AFTER THE MATURITY DATE.

SUCH PAYMENT SHALL BE MADE WITHOUT SET‐OFF AND CLEAR OF ANY DEDUCTIONS, OR CHARGES, FEES OR WITHHOLDING OF ANY NATURE, NOW OR HEREINAFTER IMPOSED, LEVIED, COLLECTED, WITH‐HELD OR ASSESSED BY THE GOVERNMENT OF (NAME OF ISSUING BANK’S COUNTRY) OR ANY POLITICAL SUBDIVISION OR AUTHORITY THEREOF OR THEREIN.

This irrevocable Standby Letter of Credit shall be available at the counters of [BANK NAME] [BANK ADDRESS] at sight against presentation of the following documents:

1. a copy of the Beneficiary’s unpaid invoice; and

2. a statement for and on behalf of the Beneficiary reading as follows: "We certify that the amount of ….U.S. Dollars



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[INSERT US DOLLAR AMOUNT] has remained unpaid and is now overdue to us under the terms of the contract with [BUYER] for the sale of [QUANTITY] Barrels of "INSERT PRODUCT"] and which is legally and properly due."

Special Conditions:

1. All bank charges are for the account of the Applicant.

2.This Letter of Credit shall take effect in accordance with its terms but such terms shall not alter, add to or in any way affect the Agreement between [Seller(s)] and [Buyer] to which this Letter of Credit relates.

3. The value of this Letter of Credit will automatically escalate/de‐escalate in accordance with the loaded quantity and the above Price Clause, even above or below the stated limits, without any further amendment.

4. Multiple drawings not permitted.

The construction, validity and performance of this Letter of Guarantee shall be governed by and construed in accordance with English law. Any dispute or claim arising out of or in connection with this Letter of Guarantee shall be subject to the exclusive jurisdiction of the English courts.

Except as otherwise expressly provided herein, this Irrevocable confirmed Letter of Guarantee is subject to the [Uniform Customs and Practices for Documentary Credits (2007 Revision ‐ ICC Publication No. 600)] [International Standby Practices 1998 (ISP98)].

This Cable message is the operative instrument and no mail confirmation shall follow.

FOR AND ON BEHALF OF: <MAJOR WORLD BANK NAME>,

AUTHORIZED SIGNATORY: AUTHORIZED SIGNATORY:

BANK OFFICER: BANK OFFICER:

CODE: CODE:

*** MUST BE ISSUED VIA SWIFT ***



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APPENDIX “E”

BONNY LIGHT CRUDE OIL SCHEDULE OF DELIVERY, LOCATION, & QUANTITY

DELIVERY SCHEDULE FROM SEPTEMBER 2012 (REVOLVING FOR TWELVE MONTHS)

This Loading / lifting Schedule is an integral part of this Contract before it is effective. Provided however, the Parties may sign the Contract and establish a shipping schedule as an integral part of this Contract by mutual written agreement.

SELLER(S) will have the option to change the designated loading Port Terminal, provided that written notice is given to the BUYER at least Four (4) calendar days prior to the ship’s ETA at the former nominated and schedule Loading.

For the shipments are 1 X 2,000,000 BBLS (first shipment) + 11 X 2,000,000 BBLS order.

The delivery/shipment schedule contained the monthly quantities plus/minus 10% to be balanced to the grand total of 24,000,000 BBLS (TWENTY – FOUR MILLION BARRELS) for twelve months.

QTY (BBLS)

+/‐ 10%

MONTH LOADING TERMINAL OR VARIOUS

CIF

CIF ASWP OF DISCHARGE

2,000,000 SEPTEMBER 2012 BONNY TERMINAL

2,000,000 OCTOBER 2012 BONNY TERMINAL

2,000,000 NOVEMBER 2012 BONNY TERMINAL

2,000,000 DECEMBER 2012 BONNY TERMINAL

2,000,000 JANUARY 2013 BONNY TERMINAL

2,000,000 FEBRUARY 2013 BONNY TERMINAL

2,000,000 MARCH 2013 BONNY TERMINAL

2,000,000 APRIL 2013 BONNY TERMINAL

2,000,000 MAY 2013 BONNY TERMINAL

2,000,000 JUNE 2013 BONNY TERMINAL

2,000,000 JULY 2013 BONNY TERMINAL

2,000,000 AUGUST 2013 BONNY TERMINAL