????>?? uw????t??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????7 ???RbjbjUU 2x7|7|hN??????l???????????8??l?z:?Z(?"???????9?9?9?9?9?9?9$p; ?=`:??????:"????4:"""?^?????9"??9" "((!7????8?N p-M????????7?8$J:0z:8??=?V?=?8"???????CONTRACT No.: KIOCL/IOF/2006-07/01DATE : BUYER : SELLER : KUDREMUKH IRON & STEEL COMPANY LIMITED., 2ND BLOCK, KORAMANGALA, BANGALORE - 560 034, INDIA. TEL : 25531461 / 25521160 FAX : 080 25535941 / 25532154 Email :  HYPERLINK mailto:kioclcom@vsnl.com kioclcom@vsnl.comSERVICE PROVIDER: KUDREMUKH IRON ORE COMPANY LIMITED., 2ND BLOCK, KORAMANGALA, BANGALORE - 560 034, INDIA. TEL : 25531461 / 25521160 FAX : 080 25535941 / 25532154 Email :  HYPERLINK mailto:kioclcom@vsnl.com kioclcom@vsnl.comThis Contract is made by and between the Buyer and the Service Provider, whereby the Buyer agrees to buy and the Service Provider on behalf of the seller agrees to sell the under mentioned goods on the terms and conditions stated below:NAME OF COMMODITY : Iron Ore Fines 1.1 COUNTRY OF ORIGIN : India 1.2 DESTINATION : China2.0 DELIVERY PERIOD AND QUANTITY : 2.1 DELIVERY PERIOD : July 20062.2 QUANTITY : 30,000 MT +/- 10% The Delivery schedule and consumer(s) for the above quantities shall be mutually agreed between Buyer and Seller. Any changes in the same will be made subject to mutual consent. Port of Loading : New Mangalore Port, India3. SPECIFICATIONS: Guaranteed Specifications of Iron Ore Fines:Fe63.50 % MINSILICA - SiO2 4.00 % MAX.ALUMINA - Al2O33.50 % MAXS0.05 % MAXP0.08 % MAX.Size: Above 10 mm 6.00 % MAXBelow 10 mm94.00 % MINBelow 150 Microns30.00 % MAXMOISTURE at 105 Deg Centigrade8.00 % MAX.4. PRICE: 4. PRICE: The price payable by Buyer to the Service provider shall be as per B-2 of Tender Documents. The price is applicable for this shipment in July 2006 as per the agreed laycan.For iron ore fines the base price shall be increased or decreased by XXXXXXXX per dry metric ton for each 1% Fe above or below 63.50%, fraction prorata. 5. PRICE ADJUSTMENT If the shipment does not meet any of the chemical specifications other than Fe provided in Clause 3 as finally determined in accordance with the provisions of Clause 13 the base price shall be decreased as follows, fractions prorata:For Excess Silica At the rate of Five (05) US Cents per dry metric ton for each 1.00 % in excess of 3.50 %, fractions prorata.ii) For Excess AluminaAt the rate of Five (05) US Cents per dry metric ton for each 1.00 % in excess of 3.00 %, fractions prorata.ii) For Excess SulphurAt the rate of five (05) US Cents per dry metric ton for each 0.01% in excess of 0.05% fractions prorata.iii) For Excess PhosphorusAt the rate of five (05) US Cents per dry metric ton for each 0.01 % in excess of 0.06 %, fraction prorata.5.4 Moisture:If free moisture loss at 105 degrees centigrade as finally determined pursuant to the provisions of Clause 13 exceeds the guaranteed max. referred to in Clause 3. Seller shall pay Buyer half of the actual freight attributable to moisture content over 8% upto and including 9.00 %, and full actual freight attributable to moisture content over 9.01 %.5.5 Size Penalty:In case + 10 mm are more than 5.00 %, US Dollars 0.10 per wet metric ton for quantity exceeding 5.00 %. fraction prorata.6. PAYMENT:Buyer shall open, 10 days prior to the shipment, with any bank acceptable to Seller's bank, a letter of credit which is confirmed, irrevocable, unrestricted for negotiation, divisible, and without recourse to drawer with STATE BANK OF INDIA, BANGALORE COMMERCIAL BRANCH, BANGALORE-560 002, Telex No. 0845 - 2765 SBCT IN, Fax No. 0091 - 80 - 22220486, SWIFT: SBININ BBA 113 in favour of Seller in US Dollars for 100% of the estimated value of the shipment assuming for guaranteed iron content. The L/C has to contain suitable reimbursement clause for reimbursement of the amounts to negotiating bank. The L/C shall permit prorata negotiation The cost of opening the Letter of credit and L/C confirmation charges to be borne by the buyer. The Letter of Credit shall be initially valid for negotiation for at least 120 days. Buyer shall be responsible to extend the validity of the LC further, if required, till the full settlement of sales proceeds. The terms of the L/C have to be in accordance with the terms of contract. The Letter of Credit in an acceptable form and as per contract to be received at least 4 days before commencement of laydays. The arrival of the vessel shall be deemed to be shifted to 4 days from the date of receipt of Letter of Credit for calculation of the laytime. The latest shipment date should provide for at least 15 days from the end of the laydays. A) Provisional PaymentThe said Letter of credit shall be payable by telegraphic transfer reimbursement by opening bank against Seller's sight draft for the amount of Ninety seven (97) per cent of the value of each respective shipment accompanied by the documents as stipulated in Clause 7, Weight Certificate issued by qualified surveyor by survey of ship's draft together with the certificate of analysis of sample and of the percentage of free moisture loss at 105 degrees centigrade issued by Seller shall be the basis for Seller's provisional invoice.B) Final PaymentThe balance amount due to the Seller after Provisional payment, shall be drawn by Seller on presentation of the following documents,(i) Final invoice based on CIQ certificate to be issued within the period stipulated in Clause l3(ii) Umpire analysis certificate for quality if applicable.Before presentation of the final invoice the value of the letter of credit will be enhanced, the validity extended and the letter of credit terms suitably amended if required.In case CIQ certificate is not received within 60 days of sailing of the vessel from load-port the seller is entitled to raise the final invoice on the basis of the load-port analysis and claim relevant payment. In case the CIQ certificate is incomplete and does not contain the results in full the invoice will be prepared based on the results available in the CIQ certificate.7. DOCUMENTS:Seller shall provide Buyer with the following documents, a) Complete set of Clean on Board shipped Bill of Lading made out to order blank endorsed, marked "Freight payable as per charter party " notifying the buyer or his agent at the port of destination.b) Provisional invoice in five copies, indicating the contract number, L/C number, name of the carrying vessel.c) Copy of Fax or telex advising shipment according to Clause -11 of this contract.d) Certificate of Quality and Weight of the contracted goods in five copies each issued by a Public Recognised Surveyor at Load-port as set forth in clause 13 paragraph "A" and clause 12 paragraph 1 respectively. Certificate of Quality to show actual result of tests on chemical composition and all other tests called for in this contract. To be distributed to the negotiating bank (originals) a) 3 copies b) 3 copies c) 3 copies d) 3 copiese) Seller's certificate certifying that one set of non-negotiable documents has been sent to Buyer by speed post within 10 days after shipment effected.f) Certificate of Origin in 3 copies. 8. NOMINATION OF VESSEL:Buyer shall advise Seller by Fax No: 0091-80-25535941 at least (14) days in advance of the estimated date of arrival of the vessel at New Mangalore Port specifying the type of vessel and hatch division. The vessel shall not be more than 15 years of age and shall be seaworthy. In case the vessel's age is more than 15 years, the vessel shall be accepted subject to mutual consent. However, vessels aged above 25 years will be accepted subject to mutual consent and any losses suffered by the seller on account of the overage of the vessel shall be to buyers account. 9. NOTIFICATION OF ARRIVAL The Buyer shall arrange for the Master of the vessel to notify Seller,Manager (COMMERCIAL) on FAX NO: 0824 2407422, three notices of the ETA of the vessel at the loading port. The first of such notice will be given ten (10) days prior to the ETA of the vessel, the second to be given forty eight (48) hours prior to the ETA and the third to be given twenty four (24) hours prior to the ETA. 10. LOADING TERMS A) Seller shall guarantee to accommodate safely the vessels with the following maximum dimensions at all times, L.O.A. : 245.00 meters Beam : 32.20 meters Sailing Draft : 12.50 meters with tide (12.00 meters with tide from August to November)B) Seller shall load ore aboard the vessel at the following rates per weather working day of twenty four (24) consecutive hours Saturdays, Sundays and Holidays included, Charter party holidays as published by Local Chamber of Commerce excluded unless used : Size of Vessel : Loading rate 20,001 - 30,000 DWT 18,000 WMT 30,001 DWT and above 20,000 WMT Notice of readiness to load shall be tendered with clean holds hatch open and ready in all respects to load at any time after vessel has arrived at loading port whether in berth or not, if the vessel is not in free pratique on arrival at the berth due to cause attributable to the vessel, then a new notice of readiness shall be tendered.Laytime for loading shall commence, Twelve (12) running hours after tendering of notice of readiness unless used, in which case, actual time used to count. In case loading has to be interrupted due to reasons of responsibility of the vessel, such time lost shall not count as laytime. Stoppage of loading due to breakdown of the ore loading plant shall be counted as laytime. Laytime to count at actuals when worked on Charter Party (C/P) holidays. For stoppages, if any, during intervening C/P holidays, laytime not to count if the vessel is not on demurrage. If the vessel is already on demurrage, full time to count as laytime during the intervening C/P holiday.Demurrage and Despatch at the loading port shall be calculated in accordance with the following schedule : Stem Quantity Demurrage per 24 hours day (prorata for part) 20,001 to 30,000 WMT USD 3,500 30,001 DWT and above USD 4,000 Despatch will be half of the demurrage rate. E) Any time necessarily required by a vessel to wait for tide for completion of loading shall be counted as laytime. Laytime shall cease to count from the time of completion of loading. F) Shifting time shall not count as laytime unless, the vessel is already on demurrage.11. ADVICE OF SHIPMENTSeller shall, upon completion of loading, advise Buyer within 48 working hours by cable / telefax / e-mail of the Contract Number, Name of Commodity, gross weight, name of vessel and loading date.12. WEIGHINGAt the loading port, Seller at Seller's expense shall determine the weight of shipment of ore by draft survey. The weight of ore as ascertained and certified together with Seller's analysis shall be basis of Seller's invoice, Buyer may at Buyer's expenses have its representative(s) present during the loading and draft survey.Buyer shall, at Buyer's expense apply to China Entry Exit Inspection and Quarantine Bureau (CIQ) for weighing at the port of destination. The weight of each shipment at the discharge port is to be ascertained by draft survey. The weight thus determined by CIQ shall be final as to wet quantity of relevant shipment.The dry quantity shall be determined by deducting the free moisture referred to in Clause- 13 from such wet quantity. Seller may appoint their representative for inspection at the discharge port. If there are differences of weight outrun over 0.5 %, then, Buyer and Seller may consult, to settle the difference. If no draft survey is performed at the discharging port, Seller's weight certificate will be regarded as final. 13. SAMPLING AND ANALYSIS A) At the loading port Seller shall at Seller's expense, determine the specifications of ore contained in each shipment, and shall provide a certificate showing details of the determination and also the percentage of free moisture loss at 105 degrees centigrade. Buyer may at Buyer's expense have their representative(s) present at the time of sampling. At the port of discharge CIQ shall take samples from each shipment and divide it into three parts, one for buyer, the second for possible need of Seller and third for possible umpire analysis which shall be sealed and kept by CIQ. Seller may at Seller's expense have their representative(s) present at the time of sampling. CIQ shall analyse the sample for Buyer and promptly forward to Seller by airmail a certificate showing the percentage of chemical contents, the percentage of free moisture loss at 105 degree centigrade and the relevant screen analysis. Buyer shall ensure that CIQ certificate reaches the seller within 60 days of sailing of the vessel. An advance copy to be sent to Seller by telefax. CIQ analysis shall be final except as otherwise provided for in paragraph B.B) If the difference in percentage of Fe content between Buyer's and Seller's analysis made under paragraph A of this Clause is more than 0.5 % or if there exists a significant difference between the two said analysis in respect of any one or more chemical contents other than Fe. Seller shall consult with Buyer to reconcile such differences. If after consultation between Seller and Buyer the difference cannot be reconciled then at the request of Seller the sample for umpire shall be analysed by an umpire agreed between Buyer and Seller, and the certificate of analysis issued by such umpire shall be final for Fe or relevant chemical content.C) If no determination of analysis is exercised at the port of discharge, Seller's certificate shall be conclusive as to specifications of the ore. D) The expenses for weight determination, sampling, chemical analysis, moisture determination and screen analysis performed at the discharging port by CIQ shall be for Buyer's account. The cost of the umpire analysis shall be for the account of the party whose own analysis differs farther from the umpire analysis and if the result of such umpire analysis is the mean of the analysis of Buyer and the analysis of Seller then such cost shall be equally borne by both parties.14. LOSS OF CARGOIn the event of a total loss of cargo after loading on board the vessel and before unloading at the port of unloading, Buyer shall make final payment to Seller on the basis of analysis made at Loading Port as set forth in Clause 13 hereof and on the basis of price as set forth in Clause 4 and quantity as manifested in the Bill of Lading.In the event of partial loss of cargo after loading on board the vessel and before unloading at the Port of Unloading, the weight as manifested in Bill of Lading shall be treated as final. The final analysis for such cargo lost shall be deemed identical with the final analysis of the remaining cargo in the same shipment actually delivered. In case of partial loss, master's certificate/certifying the fact of loss shall be treated as final.15. INSURANCE To be covered by Buyer from the time ore is loaded on vessel. For this purpose Seller shall advise Buyer by Cable / Telex after completion of loading of the particulars as called for in Clause 11 of this contract.16. TITLE AND RISKTitle with respect to each shipment shall pass from the Seller to the Buyer when the Seller has received the proceeds from the negotiating bank against the relative shipping documents as set forth in Clause 8 after completion of loading on board the vessel, with retrospective effect from the time of delivery of Iron Ore. All risk of loss, damage or destruction affecting Iron Ore delivered shall pass to the Buyer at the time of discharge of Iron Ore from the loading devices into vessel.17. FORCE MAJEURE If at any time during the existence of this contract either party is unable to perform whole or in part any obligation under this contract because of war, hostility, military operation of any character, civil commotions, sabotage, quarantine restriction, acts of government, fire, floods, explosions, epidemics, strikes or other labour trouble, embargoes then the date of fulfilment of any obligation shall be postponed during the time when such circumstances are operative. Any waiver / extension of time in respect of the delivery of any instalment or part of the goods shall not be deemed to be waiver / extension of time in respect of the remaining deliveries. If operation of such circumstances exceeds three months, either party will have the right to refuse further performance of the contract in which case neither party shall have the right to claim eventual damages. The party which is unable to fulfil its obligations under the present contract must within 15 days of occurrence of any of the causes mentioned in this Clause shall inform the other party of the existence or termination of the circumstances preventing the performance of the contract. Certificate issued by a Chamber of Commerce or any other competent authority connected with the Cause in the country of the Seller or the Buyer shall be sufficient proof of the existence of the above circumstances and their duration. Non-availability of material will not be an excuse to the Seller for not performing their obligation under this Contract.18. ARBITRATION All disputes in connection with this contract or the execution thereof shall be settled amicably by friendly negotiations between the two parties. If no settlement can be reached, the case in dispute shall then be submitted for arbitration as per ICC rules of conciliation and arbitration 1993. The venue of arbitration shall be mutually agreed.19. INCO TERMS:For all terms and conditions not covered by above, Inco Terms 2000 and any further additions or amendments shall apply. 20. INDEMNITY TO THE GOVERNMENT OF INDIA It is expressly understood and agreed by and between the Buyer and Seller, that Seller is entering into this agreement solely on its own behalf and not on behalf of any other person or entity. In particular, it is expressly understood and agreed that the Government of India is not a party to this agreement and has no liabilities, obligations or rights hereinunder. It is expressly understood and agreed that Seller is an independent legal entity with power and authority to enter into contracts solely on its own behalf under the applicable Laws of India and general principles of Contract Law. The Buyer expressly agrees, acknowledges and understands that Seller is not an agent, representative or delegate of the Government of India. It is further understood and agreed that the Government of India is not and shall not be liable for any acts omissions, commissions, breaches or other wrongs arising out of the contract. Accordingly, the Buyer hereby expressly waives, releases and foregoes any and all actions or claims, including cross claims, impleader claims or counter claims against the Government of India arising out of this contract and covenants not to sue the Government of India as to any manner, claim, cause of action or thing whatsoever arising out of or under this agreement. 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