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Dated:
PURCHASE AGREEMENT
FOR THE SALE OF IRON ORE
THE SELLER:
Represented by:
a)
b)
With
c) Presiding for World Market.
THE BUYER:
________________________________________
Represented by:
a)
b)
CONTRACT VALIDITY DATE:
To remain valid, this Contract must be signed and
the Proof of Funds given to the seller on or before November 8, 2004.
SELLER:
Address:
Phone/ Fax:
E-mail:
Represented by:
Address:
Vancouver, British
Columbia, Canada.
Tele/Fax 1-604-
Mobile Ph
1-604-
SELLER BANKING DETAILS:
Name of Bank:
Account
Number:
Swift Number:
Attn: Manager of Bank:
BUYER BANKING DETAILS
Bank
Name:
Name of Account:
Account Number:
Swift
Code:
Attention (Bank Manager):
Tel. Number:
Fax Number:
ALL LETTERS OF CREDIT TO BE FORWARDED - AS
INDICATED BELOW
SELLER:
Bank Name:
Name of
Account:
Account Number:
Letters of Credit:
Phone:
Fax:
Swift code:
Bank Representatives:
This
contract is made by and between the Buyer and the Seller whereby the
Buyer agrees to buy and the Seller agrees to sell the iron ore as
specified in Clause 1, on the terms and conditions as stated below:
CLAUSE 1: NAME OF COMMODITY and PRICE
Name of commodity: 64.5% Fe Iron Ore Lumps
Price: FOB price US$39.9/MT Philippine port;
CNF price US$59.9/MT China port of at least 16
meters draft; price
subject to prevailing
shipping rate at time of contract signing.
Country of Origin: Philippines
Port of Loading: Ozmena Port (or any other
Philippine Port of draft 16 meters or more).
Port
of Destination: Safe port of at least 16 meters draft – any safe port
in the People’s Republic of China
CLAUSE 2
DELIVERY PERIOD AND QUANTITY
Quantity:
First shipment: DMT 50,000MT/SHIPMENT (+/- 10%)
of 64.5% Iron Ore. PARTIAL SHIPMENTS OF 25,000 MT X 2 ALLOWED,
FORTY-FIVE DAYS TO SIXTY DAYS (45 days to 60 days) AFTER OPENING DLC FOR
THE SHIPMENT.
Subsequent Shipments Schedule:
Second and Following Shipments subject to mutual
approval by both the buyer and the seller after the completion of the
trial shipments.
Second and Third Shipments Each
of 50,000MT and 100,000 MT/SHIPMENT +/- 10%, partial shipments of 25,000
MT each shipment allowed, to be effected within 30 days to a maximum of
45 days from the date of establishing a DLC for the payment of each
monthly shipment.
. Fourth to Twelfth shipments
each 200,000 MT/month Each +/- 10%, partial shipments of 50,000 MT each
allowed, to be effected within 30 days to a maximum of 45 days from the
date of establishing a DLC for the payment of each monthly shipment
Second year contracted monthly shipments of
200,000 MT to 300,000 MT per month +/- 10% partial shipment allowed, to
be effected within 30 days from the date of establishing an LC. Subject
to evaluation of the previous performances by both buyer and seller.
Third year contracted monthly shipments of
300,000 MT per month to 500,000 MT (+/- 10% partial shipments allowed,
to be effected within 30 days from the date of establishing an LC.
Subject to evaluations of the previous performances by both buyer and
seller.
CLAUSE 3: SPECIFICATIONS CHEMICAL (on dry
basis)
Fe: 64.5% Max
SiO2:
0.8 % Max.
Al2O3: 0.33% Max.
P: 0.05% Max.
S: 0.09%
Max.
PHYSICAL (on natural basis)
Size: 0.010 mm to 250.0 mm +/-20% (first
shipment)
0.010 mm to 50 mm +/- 10% subsequent
shipments
Moisture content 8% at 105 deg. C
CLAUSE 4: PRICE
__________________________________________________________________
United States Dollars (US$__________________________/MT) CNF China Port,
per Dry Metric Ton (DMT).
CLAUSE 5: PRICE
ADJUSTMENT
Price adjustment
(a) The base price should be increased by USD
0.2188 Per DMT for each 1% Fe above 64.5%, fraction pro-rata.
(b) The base price should be decreased by USD
0.4376 per DMT for each 1% Fe below 64.5%, fraction pro-rata.
(c) The Buyer has the right to reject the cargo
if Fe content is below 63.5%.
The results
presented by SGS/Philippines with regard to Fe content should match up
CIQ analysis results at port of discharge (China Quindao Port).
Any discrepancies between the SGS and CIQ
reports, should be settled either through negotiations between the
butyer and the seller for settlement, and/or considerations of the
penalties and bonuses (see Clause 4), OR as mutually agreed upon between
the SELLER and the BUYER (see further provisions in Clause 6).
B) For Other Elements
If
the delivered commodity 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 4, the base price shall be decreased or
encreased as follows, fraction pro rata:
1. For
excess Phosphorus
Price will be decreased at the
rate of 3 (three) US cents per dry metric ton for each 0.01% in excess
of 0.05%; and increased by 3 (three) US cents for each 0.01% below
0.05%.
2. For excess Sulphur
Price will be decreased at the rate of 3 (three)
US cents per dry metric ton for each 0.1% in excess of 0.19%; and
increased by 3 (three) US cents for each 0.1% below 0.19%.
3. For excess Silica
Price
will be decreased at the rate of 3 (three) US cents per dry metric ton
for each 0.1% in excess of 0.8%; and increased by 3 (three) US cents for
each 0. 1% below 0.8%
4. For excess Alumina
Price will be decreased at the rate of 3 (three)
US cents per dry metric ton for each 0.1% in excess of 1.33%; and
increased by 3 (three) US cents for each 0.1% below 1.33%.
CLAUSE 6: PAYMENT
Buyer
shall provide payment by Confirmed, Irrevocable, Transferable and
Operative Letter of Credit in favor of the Seller within five calendar
days after the signing of this contract.
All
export charges; the Seller shall pay fees, levies and duties on cargo in
full. Similarly, all import charges, fees, levies and duties on cargo
shall be paid in full by the Buyer.
This invoice
is to be based on SGS and CIQ certificate as provided in Clause 9 and
Clause 10, issued within 30 (forty) days after the cargo was fully
discharged at the discharging port. If umpire analysis required payment
adjustment, this will be made when the umpire’s certificate is
available. In case analysis is not carried out at the discharging port
within 40 (forty) days after completion of discharge in China, or if
advising bank did not receive original CIQ certificate by the 10th
(tenth) business banking day prior to the Letter of Credit Expire Date,
the loading port quality and weight certificate(s) shall form the basis
for the final invoice.
CLAUSE 7: DOCUMENTS
The Seller shall provide the Buyer directly or
through the Seller’s bank the following documents:
1. Completed set of “Clean on Board” marine
Bill of Lading consigned to advising bank (Seller’s Bank) for further
title transfer to the Buyer, marked “Freight prepaid”.
2. Provisional invoice in 3 (three) originals
indicating contract number, Letter of Credit number, and the name of
carrying vessel.
3. Certificate of Quality of
contracted goods in 1 (one) original and 2 (two) copies issued by SGS,
Philippines. Certificate of Quality shall show actual result of the test
of chemical composition.
4. Certificate of Weight
of contracted goods in 1 (one) original and 2 (two) copies issued by
SGS, Philippines.
5. Certificate of Origin in 1
(one) original and 2 (two) copies detailing the name of commodity,
loaded quantity, and the name of carrying vessel.
In case CIQ certificate(s) is/are not received by
the advising bank within 10 (ten) days from the date of the vessel
discharge, the Seller is entitled to raise the final invoice on the
basis of the loading port analysis and claim relevant payment.
CLAUSE 8: WEIGHING
At the
loading port, SGS (Philippines), at the Seller’s expense, shall
determine the weight of the shipment of iron ore by draft survey. The
weight of ore as ascertained and certified, together with analysis
certificate issued by SGS Philippines, shall form the basis for
provisional invoice.
SGS Philippines shall take a
samples from shipments and divide it into three parts, one for the
Buyer, the second for possible need of the Seller, and third for
possible umpire analysis, which shall be sealed and kept with SGS
Philippines.
At the discharging port, CIQ
(People’s Republic of China), at the Buyer’s expense, shall determine
and confirm the weight of the iron ore shipment. The Buyer shall apply
for the required Entry-Exit inspection and Quarantine.
CLAUSE 9: SAMPLING AND ANALYSIS
A) At the loading port, the Seller shall at the
Seller’s expense, appoint SGS Philippines, to determine the
specification of ore content in shipment, and shall provide a
certificate showing details of the analysis.
At
the discharging port, the buyer shall, at the Buyer’s expense , appoint
CIQ who shall take a sample from shipment and divide it into three
parts, one for the Buyer, the second for possible need of the Seller,
and third for possible umpire analysis, which shall be sealed and kept
with CIQ.
CIQ shall analyze the sample for the
Buyer within 30 (thirty) days after discharge and issue, and promptly
forward to the Seller by airmail a certificate showing details of the
analysis and shall provide a certificate of determination.
B) If the difference in percentage in Fe content
between loading port’s and discharging port’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 to any
one or more chemical contents other than Fe, the Seller shall consult
with the Buyer to reconcile such differences. If after consultation
between the Seller and the Buyer the difference cannot be reconciled,
then, at the request of the Seller, the sample shall be analyzed by an
umpire mutually agreed upon between the Buyer and the 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 discharging port, then, analysis
certificate of SGS Philippines, at the loading port shall be conclusive
as to specification of ore.
D) The weight,
sampling and chemical analysis, and screen analysis performed at the
discharging port by CIQ shall be for the Buyer’s account. The cost of
umpire analysis shall be against the account of the party whose own
analysis differs further from the umpire analysis and if the result of
such umpire analysis is the mean of the analysis of the Buyer and the
analysis of the Seller, then such cost shall be equally borne by both
parties.
Performance bond equals 2% of the FOB
value of the shipment shall be by BG through Hong Kong and Shanghai
Bank, Manila, Philippines.
CLAUSE 10: ADVICE OF
SHIPMENT (FOB contract only)
The Buyer shall,
within 10 (ten) working days after Banking Instrument (BG) is validated
by the Seller’s bank, advise the Seller by fax, of the vessel name,
vessel number, vessel tonnage, and other details of the vessel, such as
length, depth of draft, number of batches, flags, name of the captain,
and estimated time of arrival at port of loading, so the Seller can
prepare for loading of cargo.
CLAUSE 11:
INSURANCE
Insurance is to be covered by the
Buyer. For this purpose, the Buyer shall advise the Seller by fax before
the loading of the vessel starts. After the Seller confirms the
insurance company, the Buyer can effect the insurance.
CLAUSE 12: FORCE MAJEURE
If at any time during the existence of this
contract either party is unable to perform whole of in part any
obligation under this contract because of war, hostility, military
operation of any character, civil commotions, sabotage, quarantine
restrictions, acts of Government, fire, floods, explosions,
transportation and industrial accidents, epidemics, strikes, or other
labor trouble, embargoes, and any other matter beyond human control or
capacity, than the date of any obligation shall be postponed during the
time when such circumstances are operation.
Any
waiver or extension of time in respect to the delivery of any
installment or part of the goods shall not be deemed to be waiver or
extension of time in respect to the present ship deliveries. If such
circumstances exceed 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 fulfill its obligations under the present contract, must
within 15 (fifteen) days of occurrence of any of the causes mentioned in
this Clause inform the other party of the existence of the circumstances
preventing the performance of the contract. Certificate issued by the
Chamber of Commerce or any other competent authority connected with the
cause in the country of the Seller or of 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 his obligations under this contract.
CLAUSE 13: ARBITRATION
All
disputes in connection with this contract and the execution thereof
shall be settled by amicable negotiation and friendly discussions
between both parties (Buyer and Seller). If no amicable settlement is
reached, the case shall be submitted to Hong Kong International
Arbitration Centre (“HKIA”) in Hong Kong for arbitration in accordance
with UNCITRAL Arbitration Rules as at present in force and as may be
amended by the rest of this Clause. The appointing authority shall be
HKIA, and the place of arbitration shall be in Hong Kong. Any such
arbitration shall be administered by HKIA in accordance with HKIA
Procedures for Arbitration in force at the date of this contract,
including such additions to the UNCITRAL Arbitration Rules as are
therein contained. The arbitral award is final.
CLAUSE 14: LOSS OF CARGO
In the event of partial loss of cargo, the Bill
of Lading weight and the analysis carried out by the Buyer’s CIQ
analysis on the cargo discharged shall be treated as final and shall
form the basis for final invoicing and payment. In the event of total
loss of cargo, the analysis and the weight as determined at the loading
port shall be treated as final and shall form the basis for final
invoicing and payment.
CLAUSE 15: AMENDMENT OF
THE CONTRACT
Any amendments or modifications made
in this contract shall be in writing and subject to confirmation by the
contracting parties.
CLAUSE 16: CONFIDENTIALITY
It is a fundamental term of this contract that
the parties shall not disclose the terms hereof to any person, except in
so far as disclosure is necessary, for the effective performance by
either party of their respective obligations hereunder. International
Chamber of Commerce NCND agreement prevails, ICC 500, INCOTERMS 2000.
CLAUSE 17 NON-CIRCUMVENTION AGREEMENTS
Buyer shall not attempt to circumvent the Seller
by trying to deal with Seller’s suppliers. Conversely, the Seller shall
not attempt to circumvent any of the parties by trying to deal directly
with the Buyer and/or Buyer’s clients to that effect.
All the parties do herein agree that NON
CIRCUMVENTION and NON DISCLOSURE RULES of all issues from INTERNATIONAL
CHAMBER OF COMMERCE (ICC) 500 apply to this transaction for a period of
five (5) years from the date of execution. This agreement by the
undersigned, his or her assigns, agents, heirs, this NCND also applies
to any and all other transactions directly or indirectly between the
parties. The undersigned agree this additional sub-clause is
transferable to the beneficiaries, designees, heirs and shall not be
amended without the expressly written consent of the parties involved.
Should a contract be signed between the Buyer and the Seller, Pay Orders
will be issued to the beneficiaries at Buyer’s full account and risk as
per previously agreement between Buyer and Intermediary parties
CLAUSE 18: ENTIRE CONTRACT
This contract constitutes the entire agreement
between the parties and supersedes all prior negotiations,
understandings and agreements whether written or oral. This contract
shall not be modified, amended or supplemented, except by an instrument
in writing duly executed by each of the parties hereto.
All terms, conditions & specifications written in
this contract are agreed to be final and irrevocable after signing by
all parties.
In witness whereof this contract is
made in duplicate in Florida, USA and is signed by the duly authorized
representatives of the Seller and the Buyer.
Retained one copy each.
SELLER BUYER
__________________________
__________________________
(signature)
(signature)
.
(name,
title) (name, title)
__________________________
__________________________
(date) (date)
For and on behalf of For and on behalf of
(SEAL) (SEAL)
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