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TERM SALES CONTRACT No PART I SPECIAL CONDITIONS Hochiminh City S R Vietnam Date The present Contract is made between hereinafter referred to as SELLER, and hereinafter referred to as BUYER, whereby it is agreed as follows 1 OBJECT OF CONTRACT SELLER has agreed to sell and deliver and BUYER has agreed to purchase, receive and pay for Crude Oil (hereinafter also referred to as Vietnam Export Crude Oil) in accordance with the terms and conditions of this Contract 2 QUANTITY 2 1 BUYER shall purchas.
TERM SALES CONTRACT No PART I SPECIAL CONDITIONS Hochiminh City S.R Vietnam Date: The present Contract is made between: hereinafter referred to as SELLER, and hereinafter referred to as BUYER, whereby it is agreed as follows: OBJECT OF CONTRACT SELLER has agreed to sell and deliver and BUYER has agreed to purchase, receive and pay for ….Crude Oil (hereinafter also referred to as Vietnam Export Crude Oil) in accordance with the terms and conditions of this Contract QUANTITY 2.1 BUYER shall purchase from SELLER, and SELLER shall sell and deliver to BUYER at … Loading Port… US Barrels of … Crude Oil per day during the Contract Term Unless otherwise agreed, the cargo size shall be between 230,000-550,000 Barrels The quantity of each cargo to be delivered shall be 5% more or less from the agreed quantity for said cargo at Terminal’s operational tolerance 2.2 The quantity of Crude Oil to be delivered by SELLER during any quarter may, at the option of BUYER, be decreased by up to 5% or be increased subject to SELLER's agreement in advance in each specific case Any such additional quantity shall be considered as an increase in the Contract Quantity as specified in Clause 2.1 above Such additional quantity shall not be used to adjust or reduce BUYER's future contract entitlement without SELLER's consent, or alternatively, at SELLER's discretion, to be considered as prelifting of future entitlement 2.3 Unless otherwise agreed in writing by both Parties, BUYER undertakes to lift the Crude Oil on quarterly even basis within the Contract Quantity stated in Clause 2.1 of Part I above Should BUYER's uplifting quantity during any quarter be below the Contract Quantity as specified in Clause 2.1 above due to BUYER’s exercising its option to reduce the quarterly quantity by up to 5%, such deficit in uplifting shall be used to adjust by adding the deficit quantity to the subsequent quarter's entitlement, and in that subsequent quarter the 5% option shall not be applied 2.4 Quantity shall be measured at the …Terminal by Terminal Operator and verified by an independent inspector in accordance with industry standard The quantity stated in the Bill of Lading is final and binding upon both Parties QUALITY Crude Oil delivered under this Contract shall be of the normal export quality as available at the time of loading TERM OF CONTRACT The Contract Term shall be six (06) months commencing from October 01 st 20… through March 31st 20… DELIVERY AND LIFTING PROGRAM The Crude Oil shall be delivered by SELLER and accepted by BUYER FOB at the Delivery Point at Terminal or CFR at the Discharging Port The quantity of the Crude Oil to be delivered FOB and CFR shall be on equal basis The terms and conditions of CFR shall be mutually agreed for each specific shipment in the form of CFR Delivery Agreement as per Appendix No of Part II The lifting program for the Crude Oil supplied under the present Contract shall be determined in the manner described in Clause of Part II PRICE 6.1 The FOB unit price of Crude Oil supplied under the present Contract during the period from October 01st 20… to March 31st 20… shall be in US Dollars per net US Barrel and calculated equal to 50 percent of the average of weekly averages of APPI mean quotations for Minas (Asian Petroleum Price Index quotations for Minas crude oil) plus 50 percent of the average of weekly averages of Platt’s mean quotations for Minas (Platt’s Crude Oil Marketwire quotations for Minas crude oil) as quoted in the week prior to, the week of and the week following the week of Bill of Lading Date of the Crude Oil lifted, plus …… USD/Barrel (say: US Dollars …………………cents per US Barrel) For the purpose of this Clause: (a) The week shall mean Sunday to Saturday (b) Any average(s) mentioned above shall be rounded to (four) decimal points in the manner as specified in Clause of Part II of the Contract Such price shall not be subject to adjustment in respect of gravity or any other matter 6.2 In the extraordinary circumstances in the international petroleum industry, if the related quotations for Minas crude oil specified in Clause 6.1 herein above are not available at the time of loading due to whatsoever reason, the price of Crude Oil shall be calculated as an average of other internationally recognized and mutually agreed quotations for Crude Oil available in the week of Bill of Lading Date PAYMENT 7.1 Net US Barrels specified on Bill of Lading shall be the invoicing quantity 7.2 BUYER shall provide SELLER with a Financial Security issued by a first class international bank for Shipment Value in favour of SELLER with the text conformed strictly to Enclosure No of Part II not later than 15 days before the first day of Loading Date Range stipulated in Clause of Part II of this Contract Such Financial Security shall be subject to SELLER's acceptance within days after its opening date 7.3 Payment to be made in US Dollars in full to the bank(s) designated by SELLER without discount, withholding, offset, counterclaim or other deduction within 30 days after Bill of Lading Date (which to count as day zero) by Telegraphic Transfer, upon presentation of invoice, full set of 3/3 original Bills of Lading and other cargo documents required (or SELLER’s Letter of Indemnity if original Bill(s) of Lading are not available) Telex Letter of Indemnity is acceptable 7.4 The Letter of Indemnity shall be issued in the format set out in Enclosure No.2 of Part II of the Contract 7.5 BUYER shall instruct its remitting bank to send a telex advice by tested telex or authenticated SWIFT to the bank designated by SELLER at least working days before making such payments 7.6 All expenses in connection with this Financial Security and bank's cable/telex/swift charges and reimbursement charges outside Vietnam are strictly for the account of BUYER INSPECTION A mutually acceptable independent inspector shall be appointed by SELLER on behalf of BUYER and SELLER to witness and verify the determination of quantity and quality of Crude Oil loaded at the Terminal with costs to be shared equally between BUYER and SELLER LAYTIME AT TERMINAL SELLER shall be allowed, unless otherwise agreed by the Parties: a) Thirty-six (36) hours for any cargo size of 550,000 Barrels or less; b) Forty-eight (48) hours for any cargo size of above 550,000 Barrels; within which to complete loading of a cargo of Crude Oil 10 11 DESTINATION Where it is not restricted and prohibited by the laws of Vietnam OTHER TERMS AND CONDITIONS 11.1 In special / necessary cases, SELLER shall discuss with BUYER on buying back Petroleum products (Gasoline, Gas oil, Fuel oil ) and BUYER shall work with SELLER to supply such products with value equal to the value of crude oil cargoes supplied under the Contract The quantity, quality, price, terms of delivery of each product shall be mutually agreed by both Parties when the need arises 11.2 Neither BUYER nor SELLER shall be liable for any claim under or arising out of this Contract unless such claim is asserted within one year from the day of occurrence of the incident giving rise to the claim 11.3 All other terms and conditions shall be in accordance with Part II of the Contract, General Provisions for Sales of Vietnam Export Crude Oil BUYER confirms he is in possession of a copy and well aware of contents of the latest edition of Part II 11.4 Part I and Part II inclusive of Enclosures and Appendixes attached hereto constitute the entire Contract between the Parties Any amendment, modification or release from any provision hereof are valid only if they are made either in writing or in telex form and subject to mutual agreement and signed by both Parties 11.5 In the event of any conflict or inconsistency between this Part I (Special Conditions) and Part II (General Provisions) of the Contract, the terms of Part I shall supersede over those of Part II to the extent of such conflict or inconsistency 11.6 Words and phrases defined in Part II and used herein shall, unless the contrary intention appears, have the same meaning in this Part I 11.7 After signing the present Contract, all previous relevant negotiations and correspondences in relation to this Contract between the Parties shall be considered null and void 11.8 This Contract is signed in four (04) originals, three (03) for SELLER and one (01) for BUYER, all originals are equally authentic 11.9 All documents and communications concerning this Contract shall be in English 11.10 The Contract enters into force upon signing 12 NOTIFICATION Any communications in regard to this Contract will be made to the followings: Any change in the above communication address shall be made in writing by relevant Party IN ACKNOWLEDGEMENT of the Parties understanding the contents set out hereinabove, the Parties confirm this Contract as of the day and year first above written as follows: FOR SELLER FOR BUYER PART II GENERAL PROVISIONS FOR FOB/CFR DELIVERY OF VIETNAM EXPORT CRUDE OIL DEFINITIONS 1.1 As used in this Contract, unless otherwise required by the context, the following words and terms shall have the following meanings: ASTM : American Society for Testing Materials; Barrel : Means the quantity of Crude Oil consisting of forty two (42) United Stated gallons, corrected to sixty (60) degrees Fahrenheit under one atmosphere of pressure Conversion to any other references temperature shall be based on the ASTM Tables; Bill of Lading : Means the date appearing on the Bill of Lading when Date the loading has been completed; Business Day : Means a day (excluding Saturday) on which banks in Ho Chi Minh City are customarily open for business; Contract : Means the contract made between BUYER and SELLER for sale of Crude Oil which Contract is contained in Part I (including Addendum, if any) and Part II (including its Enclosures and Appendixes); Contract Quantity : Means the quantity to be supplied by SELLER to BUYER under Clause of Part I; Contract Term : Means the period during which the Crude Oil is to be supplied; Crude Oil or : Means the Crude Oil described in Part I of the Vietnam Export Contract; Crude Oil Delivery Point : Means the outlet flange of the loading hose connected to the Vessel at the loading Terminal; FSO : Means floating production, storage and offloading system; ETA : Means the estimated date and time of arrival of the Vessel at the Terminal; Financial Security Shall be either: (i) Standby Letter of Credit; or (ii) Letter of Guarantee; or (iii) Letter of Credit; or (iv) Other means of credit security acceptable to SELLER; to be issued, as the case may be, as required in accordance with the provisions of the Contract; FOB or CFR : Has the meaning prescribed in the 2000 edition of the international rules for the interpretation of trade terms prepared by the International Chamber of Commerce (Incoterms) as amended from time to time, except to the extent of any inconsistency with any provision of this Contract; ITOPF : Means International Federation Ltd; Loading Range Tanker Owners Pollution Date : Means the period of time as described in Part I or as determined in accordance with Part II, during which Vessel is required to arrive at the Terminal to lift the Crude Oil as described in Part I; Loading Port : Means the port, place or location described as such in Part II; Part I : Is any letter or facsimile duly signed by SELLER and BUYER setting out the particular terms and conditions of the Contract; Part II : Means these General Provisions Party : Means SELLER, or BUYER, or its Assignee(s) permitted under the provisions of the Contract and "Parties" means the SELLER and BUYER and its Assignee(s) as the case may be; Shipment Value : Means the amount in US Dollars determined by multiplication of net US Barrels appearing on the Bill of Lading and the unit Price determined in Clause of Part I; Terminal : Means the FSO(s) at the Loading Port from which or through which the Crude Oil is loaded by the Terminal Operator onto the Vessel for the purpose of the Contract; Terminal Operator : Means the person or company owning, managing, operating or controlling the Terminal Terminal Regulations : Means rules and procedures in force for, inter alia, mooring, loading, and unmooring of Vessel at the loading Terminal Vessel : Means the tank ship arranged and provided to accept delivery of the Crude Oil at the Terminal; WORLDSCALE : Means the Worldwide Tanker Nominal Freight Scale published from time to time; 1.2 1.3 1.4 Unless the contrary intention appears, a reference to “day” shall mean any day between the hours of 0001 and 2400, local Vietnam time and a reference to “month” and “year” shall mean calendar month and calendar year, respectively The provisions of Part II shall be subordinate to the provisions of Part I to the extent of any inconsistency The following Enclosures and Appendixes attached to this Part II shall form an integral part of the Contract: Enclosure No 1: Financial Security Enclosure No 2: Letter of Indemnity Appendix No.1: Loading Arrangement at Terminal Appendix No.2: CFR Delivery Agreement QUANTITY, QUALITY AND CARGO INSPECTION 2.1 BUYER shall purchase from SELLER, and SELLER shall sell and deliver to BUYER on CFR delivery basis about fifty percent (50%) of Contract Quantity during the Contract Term The balance of Contract Quantity shall be supplied on FOB basis 2.2 Unless otherwise agreed, the cargo quantity for each shipment is from 230,000 barrels to 550,000 barrels with an operational tolerance of 5% more or less at the Terminal’s Operational tolerance 2.3 The Quantity and Quality shall be measured and determined at the Terminal by Terminal Operator and verified by an independent inspector in accordance with the latest ASTM Standards and API Manual of Petroleum Measurement Standards (MPMS) Such determinations shall be reported in the certificates of quality and quantity (or other such equivalent documents as may be issued by the Terminal) The Bill of Lading Quantity and Grade will thereupon be final and binding upon both Parties 2.4 The quality of Crude Oil delivered to BUYER shall be of the normal export quality as available at the Loading Port at the time of loading 2.5 The mutually acceptable independent inspector shall be appointed by SELLER on behalf of BUYER and SELLER The costs of the services of the independent inspector shall be shared equally by BUYER and SELLER 2.6 No Claim submitted by BUYER for one lot of the Crude Oil shall be regarded as a justification for rejecting any other lot of the Crude Oil to be delivered under the present Contract 2.7 There are no guarantees, warranties or representations, express or implied, of merchantability, fitness or suitability of the oil for any particular purpose or otherwise which extend beyond the description of the oil set forth in this agreement DELIVERY 3.1 The Crude Oil shall be delivered by SELLER and accepted by BUYER, FOB at the Delivery Point to BUYER’S nominated Vessel or CFR on SELLER’s nominated Vessel at the Discharging Port 3.2 BUYER undertakes to give preference to Vessel(s) owned or operated by Vietnamese oil or shipping companies and cargo insurance coverage offered by Vietnamese insurance companies, provided that financial and other terms and conditions offered by these companies shall be competitive in the international market PRICE AND PAYMENT 4.1 BUYER shall pay SELLER for the net quantity of Crude Oil measured in accordance with sub-clause 2.3 above of this Part II General Provision at the price and further particulars set out in Part I of the Contract 4.2 The price will be rounded to four (4) decimal points in the manner that, if the fifth (5th) decimal point is four (4) or any number less than four (4), than such fifth (5th) and further decimals shall be ignored If the fifth (5th) decimal point is five (5) or any number higher than five (5) than one (1) digit shall be added to the fourth (4 th) decimal point and the rest shall be ignored 4.3 4.4 4.5 BUYER shall, at its expense, provide SELLER with Financial Security to be issued by a first class international bank acceptable to SELLER and in the format as strictly set out in Enclosures , to cover the full Shipment Value in favour of SELLER For CFR deliveries, the Financial Security includes the cost of freight Such Financial Security to be issued not later than 15 days prior to the first day of the Loading Date Range stipulated in Clause of Part I and subject to SELLER’s acceptance within days thereafter All charges in respect of this Financial Security outside Vietnam shall be for BUYER’s account Should BUYER fail to open Financial Security or open unduly, BUYER shall pay SELLER a fine for each day of delay at the rate of 0.1 percent of the value of such Financial Security, and SELLER has the right to withhold the shipment of the Crude Oil due to this delay in opening and acceptance of the Financial Security Should the delay in opening of Financial Security exceed six (06) days, BUYER may be deemed to be in breach and SELLER has the right not to deliver the Crude Oil All damages incurred by SELLER in connection with undue opening of Financial Security and damages caused by delay of the nominated Vessel are to be paid by BUYER upon receipt of SELLER’s notice of claim/expenses 4.6 SELLER shall endeavour to provide BUYER with a commercial invoice and the cargo documents not later than three (3) Business Days before the last day upon which payment is required hereunder If the cargo documents required under this Clause are not available at the time specified, payment shall be made by BUYER upon SELLER’s presentation of a commercial invoice and a Letter of Indemnity (LOI) in the format as set out in Enclosure No In the event such a Letter of Indemnity is provided, BUYER shall make payment for the Crude Oil either on or before the last day upon which payment is required hereunder or on the date upon which the LOI is provided as aforesaid whichever occurs later 4.7 Payment shall be effected in U.S Dollars in same day funds and made free of exchange, in full, and without deduction, counterclaim, withholding or offset If the due date falls on Saturday or a bank holiday in New York other than Monday, the payment will be made on the preceding banking day If the due date falls on Sunday or a Monday bank holiday in New York, the payment will be made on the next banking day 4.8 SELLER will honour claims for interest calculated at the rate of two (2) percentage points above the average one (1) year London Interbank Offered Rates (LIBOR) for EuroDollars as quoted on Reuter page “LIBO” at 1100 hrs GMT on the payment due date on the amount outstanding for the period from the payment due date until the day before the date SELLER receives payment in full In the absence of such quotation, LIBOR shall mean the one (1) year British Bankers Association Interest LIBOR Rates for US Dollars quoted in respect of that day in the page LIBOR01 at 1100 hrs GMT and as subsequently reset yearly in accordance herewith from time to time If any day on which LIBOR is to be set or reset was not a London Banking Day, LIBOR was set or reset by reference to the next following London Banking Day Such interest is SELLER’s additional rights arising out of such delay, and is in no circumstances to be considered as an agreement by SELLER to provide extended credit 4.9 All expenses incurred by SELLER, including but without limitation to reasonable legal fees, court cost, collection agency fees, etc due to undue payment or non-payment of the invoice value by BUYER if such non-payment is not attributable to the default or negligence of the SELLER shall be borne by BUYER and due for payment immediately upon presentation of related documents from SELLER to BUYER 4.10 In case of CFR deliveries, BUYER shall pay SELLER separately the actual charges covering helicopter and/or transport vessel services, if any, done at the request and berthing acceptance made by the receiving Vessel for the purpose of loading arrangement in accordance with Appendix No.1 Such payment shall be made against presentation of SELLER’s invoice accompanied with the supporting documents (Flight Record and transport vessel service invoice) COST OF FREIGHT 5.1 The freight for CFR delivery shall be mutually agreed for each shipment 5.2 The WORLDSCALE rate for the port or port(s) and/or grouping/combination of port(s) not listed in the current WORLDSCALE schedule shall be referred to the WORLDSCALE Association, London for suitable determination 5.3 The freight shall be at the rate stipulated in CFR Delivery Agreement of each shipment and shall be computed on gross metric tons (including deadfreight as per sub-clause 5.4 hereof if the minimum contractual quantity is not met by BUYER) as shown on the Bill of Lading issued by the Supplier and signed by the Master of the Vessel No deduction of freight shall be made for water and/or sediment contained in the cargo 5.4 Deadfreight: Should BUYER require receiving a part instead of the agreed full cargo, such request should be in written form In this case the Vessel shall, at Master's option, and, upon request of BUYER, proceed on her voyage, provided that the tanks in which cargo is loaded are sufficiently filled to put her in seaworthy and stable condition In that event, however, deadfreight shall be paid at the rate 10 in accordance with sub-clauses 7.3 and 7.5 herein provided it is scheduled to arrive at the Terminal on the same Loading Date Range and provided further BUYER gives written notice to SELLER not later than seven (7) days before the first (1 st) day of the Loading Date Range specifying the substituted Vessel’s position and all information requested under sub-clause 7.3 of this Part II 7.7 BUYER shall ensure or procure, at its own expense, the enrolment of the Vessel in the International Tanker Owners Pollution Federation Limited (ITOPF) BUYER shall additionally ensure that the nominated Vessel has the highest standard oil pollution coverage available under the Rules of the International Group of Protection & Indemnity Clubs for oil pollution legal liability up to the maximum amount being offered by the International Group of Protection & Indemnity Clubs (currently US Dollars billion) 7.8 BUYER shall, at least ten (10) days prior to the first day of the Loading Date Range furnish SELLER the full documentation instruction which is required by BUYER for the purpose of loading the Crude Oil CFR DELIVERY 7.9 At least 35 days prior to the lifting month, SELLER shall advise BUYER of the lifting program and Loading Date Range for the CFR shipment in that month Within days thereafter BUYER shall advise SELLER its acceptance, additionally nominating the Discharging Port(s) (one port or multiple ports of discharge) At least 20 days prior to the Loading Date Range, SELLER shall advise BUYER of the detailed CFR Delivery Program including shipment quantity, Vessel nomination, freight and demurrage rates and other specific terms and conditions for the CFR shipment Should there be any difference between BUYER and SELLER on the detailed CFR Delivery Program, both Parties shall negotiate and exercise their best effort to reach an agreement If such agreement cannot be reached by 16 days prior to the first day of Loading Date Range, the delivery shall be made FOB and BUYER shall undertake to provide a suitable Vessel to lift the Crude Oil, complying with the FOB nomination procedure unless otherwise mutually agreed between Parties 7.10 BUYER is required to advise SELLER of its firm Discharging Port(s) upon fixing the shipping schedule of related cargo, but not later than the commencement of loading 7.11 BUYER shall make its best endeavour to maintain original 14 Discharging Port(s) However, in cases of emergency, BUYER may request to change the Discharging Port(s) or if the cargo is to be discharged at more than one port, to change the rotation of the Discharging Port(s) provided that total voyage time consumed by Vessel is not significantly different from the original schedule to the extent where additional damages or costs will arise 7.12 SELLER/Shipmaster will have their option to comply with the normal routes from Loading Port to Discharging Port(s) Any extra expenses including but not limited to additional shipping time and bunkers arising out of such changes of the original Discharging Port(s) shall be for BUYER’s account In such cases if an adjustment of freight rate and demurrage rates is needed according to WORLDSCALE, a new freight rate shall be agreed and applied in accordance with international practice 7.13 SELLER is not responsible for any late arrival of cargo at Discharging Port due to any reasons which are beyond SELLER’s control 7.14 SELLER, however, shall have the option to substitute the nominated Vessel with other suitable tonnage, in which case SELLER shall give reasonable notice to BUYER the details of the substituted Vessel and expected date of arrival at the Loading Port, upon which BUYER shall give SELLER a written notice of acceptance or rejection within Business Day (24 hours), but shall not reject any nomination unreasonably In case of rejection, SELLER shall, as soon as possible, nominate further a replacement vessel and/or Loading Date Range for BUYER’s prompt acceptance or rejection, and, in case of the latter, the Parties shall negotiate a mutually acceptable nomination 7.15 BUYER shall, on receipt of the vessel nomination, provide SELLER with full documentation instructions for the shipment concerned 7.16 As soon as possible after the loading has been completed, SELLER shall notify BUYER of the actual quantity loaded and the expected date of arrival at Discharging Port(s) SELLER undertakes to inform BUYER of any changes to the ETA at discharging port(s) as soon as practicable after receipt from Vessel Owner and Shipmaster or its agent 7.17 The Vessel’s Master will cable her ETA at the Discharging Port(s) to BUYER or their agent 96, 72, 48, 24 and 12 hours prior to arrival and any changes of such ETA 7.18 SELLER warrants that Owner of all vessels nominated to carry the subject cargo is a member of ITOPF and enrolled in a Protection & 15 Indemnity Club(s) ARRIVAL OF VESSEL 8.1 BUYER or Vessel Master shall notify SELLER of the ETA of the Vessel ninety six (96), seventy two (72), forty eight (48), twenty four (24) and twelve (12) hours prior to her arrival at the Terminal Failure to give twenty-four (24) hour notice of Vessel Arrival within the Loading Date Range increases Laytime allowed to SELLER by an amount equal to the difference between twenty-four (24) hours and the number of hours prior to arrival of such Vessel that notice of such ETA is first received by SELLER 8.2 If, in the opinion of Terminal Operator, the adverse weather conditions are threatening the safety of the loading arrangement of the Vessel, Terminal Operator may instruct the Master of the Vessel to sail to the locations as indicated by Vung Tau Port authorities for inward and outward clearance of the Vessel Terminal Operator may so instruct the Vessel either prior to that Vessel's ETA or whilst the Vessel is waiting to load at the Terminal BUYER shall ensure that the Master of the Vessel will comply with Terminal Operator's instructions under this sub-clause 8.2 8.3 BUYER shall ensure a timely arrival of the Vessel at the Loading Port within the Loading Date Range, and the Vessel being in every respect, ready to load the Crude Oil upon her arrival, otherwise the Vessel shall be considered as a late arrival as specifically described below and SELLER shall be released from responsibility for any demurrage incurred If the Vessel arrival at Vung Tau Loading Port is later than the last day (local time) of the Loading Date Range, BUYER has to pay SELLER a penalty of US Dollars 30,000 for each day of delay and any running hour and/or pro-rata for a part thereof If the Vessel arrival at Vung Tau Loading Port is delayed three (03) days (local time) or more from the last day of the Loading Date Range and/or in case of BUYER's cancellation of any cargo under the present Contract due to any reason, BUYER agrees to pay SELLER a penalty of US Dollars 350,000 per said cargo 8.4 SELLER is released from any responsibility and BUYER has no right to claim for any delay in delivering the Crude Oil and/or for any demurrage caused by the untimely receipt of any notifications from BUYER or Vessel Master and/or Vessel’s late arrival described in sub-clause 8.3 herein above 8.5 On arrival at the Loading Port, after receipt of Free Pratique, the Master shall give SELLER’s representative Notice of Readiness 16 (hereinafter referred to as NOR) This NOR must be handed in within the official working hours in conformity with Vung Tau Loading Port's regulations relating to safety, health and environment NOTICE OF READINESS AND LAYTIME FOB DELIVERY 9.1 If the Vessel arrives during the Loading Date Range, Laytime shall commence when the Vessel is all fast at the loading Terminal and in any event no later than six (6) hours after NOR is handed in by the Master and accepted, whichever occurs first If the Vessel arrives and NOR is handed before the Loading Date Range, Laytime shall commence when the Vessel is all fast at the Terminal and in all respects ready to load, or 0700hours on the first day of the Loading Date Range, whichever is earlier If the Vessel arrives after the last day of the Loading Date Range, SELLER shall not be obliged to load the Vessel unless SELLER specifically agrees to so, in such case Laytime shall commence when the Vessel is all fast at the Terminal and in all respects ready to load 9.2 In all cases Laytime shall end when the loading hoses are disconnected after completion of loading 9.3 SELLER shall be allowed, unless otherwise agreed by the Parties: a) Thirty-six (36) hours Laytime for any cargo size of 550,000 Barrels or less; b) Forty eight (48) hours Laytime for any cargo size of above 550,000 Barrels; within which to complete loading of a cargo of Crude Oil 9.4 Sunday(s) and public holiday(s) shall be included from the calculation of Laytime 9.5 Notwithstanding anything to the contrary herein contained any delay or time spent caused by the following shall not count as Laytime and SELLER shall not be liable to BUYER for demurrage in so far as any such delay or time spent results in the actual period of Laytime exceeding the allowed Laytime: abcd- Inward passage from anchorage to the berth; Inadequacy, breakdown, inefficiency or other causes attributable to the Vessel and/or owners; Strike, lock-out, stoppage or restraint of labour of Master, officers or crew of the Vessel or tug boat or pilot; Failure of Vessel's agent to provide for tug boat or pilot, where 17 efghijklmn- these are required; Awaiting Customs and Immigration clearance or pratique; Delay or interruption of loading the Crude Oil caused by bad weather, awaiting tides and daylight; Handling slops and/or de-ballasting and/or in ballasting unless concurrent with loading the Crude Oil; Tank cleaning and/or in awaiting facilities for discharge of slop and/or clean ballast; Emergency shutdown of the Terminal machinery; Force Majeure as defined in Clause 18 of this Part II Agreement and the reasons beyond SELLER’s control; Any action taken by inspector or by SELLER at inspector's request, if such action results in demurrage; Prohibition or restriction on loading by or failure to load or delay in loading attributable to BUYER, owner, operator of the Vessel or port authorities; Failure by BUYER to observe or perform any provision of the Contract; Awaiting the full documentation instruction from BUYER Should it become necessary to shift or withdraw the Vessel from the loading berth under circumstances beyond SELLER’s control, all time, expenses and risks in connection therewith shall be for BUYER’s account Such shifting time shall not count as used Laytime CFR DELIVERY 9.6 Upon Vessel’s arrival at customary anchorage at Discharging Port(s), the Master will tender Notice of Readiness (NOR) to commence discharge This NOR must be given at any time of the day or night 9.7 Time allowed for discharging a full cargo shall be 36 running hours or pro-rated for a part cargo, Sunday(s) and holiday(s) included If Vessel discharges for two or more receivers at one port, the total time used will be divided cooperatively in accordance with the quantities discharged to each receiver in relation to the total quantity discharged at this port 9.8 Laytime shall commence upon expiration of six (6) hours after tendering Notice of Readiness (whether in berth or not) or upon Vessel's berthing at Discharging Port(s) whichever occurs first In case of multiple berths discharge, Laytime shall count as specified in sub-clause 9.7 above 9.9 Laytime shall cease upon disconnection of cargo hoses except that if 18 the Vessel is delayed after disconnection of cargo hoses for BUYER’s purposes in excess of two hours, Laytime shall continue to run and demurrage, if incurred, shall continue to be payable from disconnection of cargo hoses until the termination of delay 9.10 If any lightering is undertaken at the request of BUYER the expense thereof shall be for BUYER’s account and all time expended in connection with such lightering from Vessel arrival at the lightering site until the last off-taking vessel(s) departure from the Vessel (without any deduction therefrom) shall count as discharging time for the purpose of calculating Laytime and the liability for demurrage irrespective of weather conditions 9.11 In the event that the consignee or discharging terminal prohibits berthing/unberthing or discharging at night, time so lost shall count as used Laytime However in the event port authority prohibits berthing/unberthing or discharging at night, time so lost shall not count as used Laytime 10 9.12 Should the Vessel be required by receiver(s) to wait for berthing or drift on the way to Discharging Port, SELLER shall advise Owner/Shipmaster to comply with such request and BUYER shall pay for total used Laytime (drifting/waiting/discharging) LOADING CONDITIONS 10.1 Berthing and Loading priority of each vessel coming to lift the crude oil shall be in accordance with its Loading Date Range The Vessel shall be loaded from the FSO in tandem or by the side by side transfer (STS) as SELLER or Terminal Operator may direct 10.2 BUYER shall ensure that the Vessel accepts and loads the Crude Oil and discharges ballast in accordance with the Terminal Regulations Loading shall not commence until Terminal Operator is satisfied with the mooring, hose connections and any other preparations made for loading SELLER or Terminal Operator shall have the right to require BUYER to shift the Vessel at the Terminal from one safe berth to another or to anchorage with extra tug boat and port charges and expenses incurred as a result of shifting of Vessel shall be on Terminal Operator’s account 10.3 BUYER shall accept, observe, perform and comply with or cause the owners, master, operators, charterers (demise or otherwise), agents, employees (including master and crew) and contractors of the Vessel to accept, observe, perform and comply with Vietnamese Laws, all other applicable requirements of the Terminal and relevant authorities Furthermore, BUYER warrants its authority and the authorities of the persons referred to in this Clause to accept, observe, perform and comply with the Terminal Regulations 19 10.4 Should SELLER’s supply ability of the Crude Oil be lost or curtailed due to Vessel tendering Notice Of Readiness after the last day of the Loading Date Range or BUYER’s withdrawal of the Vessel already scheduled and accepted, then SELLER shall be indemnified by BUYER for all costs, losses, damages and/or expenses (including those to be paid by SELLER to the Loading Terminal) resulting therefrom incurred by SELLER and SELLER shall be under no obligation to supply the quantity of the Crude Oil so lost or so curtailed 10.5 If in the course of entering berth or mooring or loading or unmooring or leaving berth, the Vessel or her crew damage any facility of the Terminals, sea or shore installation or equipment due to negligence or any other reason, BUYER shall be responsible for all claims, damages, costs and expenses arising therefrom 10.6 BUYER’s Vessel shall vacate her loading berth immediately without unreasonable delay after completion of loading In the event of failure to so, any losses, damages, costs and expenses suffered by SELLER or Terminal Operator resulting from such failure, including but not limited to any demurrage incurred due to delay in berthing of other vessels awaiting loading, shall be paid by BUYER to SELLER 10.7 If BUYER is unable for any reason whatsoever other than Force Majeure event as per Clause 18 to lift the full cargo (i.e less than minimum quantity with minus 5% tolerance of the cargo quantity agreed by both Parties in accordance with Clause herein above), SELLER shall in addition to the Shipment Value be entitled to an amount equal to five percent (5%) of the value of such unlifted Crude Oil BUYER shall make payment in respect thereof against SELLER’s written documents certifying the quantity of Crude Oil not so lifted, together with SELLER’s invoice setting forth the amount due as determined in accordance with this Clause 11 10.8 BUYER shall indemnify SELLER against any and all obligations, liabilities, losses, damages, costs or expenses suffered, sustained or incurred directly or indirectly as a consequence of rejection of the Vessel, discontinuance of loading operations by Terminal Operator as a result of non-compliance with Terminal Regulations CFR DISCHARGING CONDITIONS 11.1 BUYER shall accept the discharge of Crude Oil at a berth which BUYER shall procure or cause to be provided free of charge and which the nominated Vessel accepted by BUYER can safely reach and leave and at which such Vessel can lie and discharge, always safely afloat All charges at Discharging Port(s) (including the expenses, if 20 any, of shifting berth at Discharging Port(s), unless such shift shall be for Vessel's purposes) shall be borne and paid by BUYER 11.2 BUYER shall arrange for each Vessel to be discharged as expeditiously as possible BUYER shall, at all material times and at their own expenses, provide and maintain or cause to be provided and maintained in good working order all necessary discharging hoses, connections, pipelines, tankage facilities and other accommodation for the safe and speedy discharge of the Vessel 11.3 BUYER shall have the option to exercise a ship-to-ship transfer operation for discharge of a whole cargo at sea at a safe location other than the customary anchorage for the Discharging Port(s), in which event, BUYER shall notify SELLER well in advance and provide equipment necessary for the safe operation, including but not limited to fenders, transfer hoses, support tug(s) and mooring master and subject to Master's satisfaction of the BUYER’s transfer operation procedures which shall always be in accordance with the latest edition of OCIMF ship-to-ship transfer guide (Petroleum) BUYER agrees to reimburse SELLER for any incremental insurance premium, as required by the Owner's underwriter for the ship-to-ship transfer operation 11.4 SELLER warrants that the vessel is out-fitted and capable of safely carrying out all procedures as set out in the latest revised edition of the OCS/OCIMF ship-to-ship transfer guide (Petroleum) in so far the Vessel's physical conditions are concerned, excluding fender, transfer hoses, support tug(s), mooring master etc required for ship-to-ship transfer operation which to be supplied by and paid for by BUYER BUYER undertakes, if so required by SELLER, to provide Certificate of Discharge signed by an appropriate authority 11.5 SELLER warrants that the Vessel is capable of discharging her entire cargo within 24 hours or maintains 100 PSI at Vessel's rail provided shore facilities permit Should the discharging terminal require Vessel to maintain lower pumping rate, the terminal will provide written request to the Master stating the requested pumping rate If Vessel fails to maintain this discharging rate, BUYER shall not be responsible for any extended Laytime or demurrage caused by such failure (except the delay is due to limit of receiving terminal capabilities) 11.6 If Crude Oil washing is performed as a result of a requirement by BUYER or any competent authority, the pumping hours warranted above shall be increased by maximum 12 hours or pro-rata on the 21 basis of number of tanks washed to the total number of cargo tanks The additional pumping time shall count against Laytime or, if the Vessel is on demurrage, for demurrage 11.7 Heating: Shipmaster shall maintain the loaded temperature during the laden passage from loading port to discharging port(s) and during discharge(s) Should BUYER request a higher temperature but not exceeding 135oF, BUYER shall inform SELLER before loading of the cargo In such case any extra expenses arising from this additional heating requirement shall be borne by BUYER 11.8 Discharging Port: One safe berth in each one or more safe Japanese/Singaporean/Australian or other safe port(s) 12 11.9 Safe berthing - shifting: the Vessel shall load and discharge at any safe place or wharf, or along side vessels or lighters reachable on her arrival, which shall be designated and procured by BUYER, provided the Vessel can proceed thereto, lie at, and depart therefrom always safely afloat, any lighterage being at expense, risk and peril of the BUYER BUYER have the right of shifting the Vessel at port(s) of discharge from one safe berth to another on payment of all towage and pilotage for shifting to another berth, charges for running lines on arrival at and leaving that berth, additional agency charges and expense, customs overtime and fees, and any other extra port charges or port expenses incurred by reason of using more than one berth The places in grouping/combination of port(s) and/or terminal(s) in WORLDSCALE are considered as berths within a single port Time consumed on account of shifting shall be counted as used Laytime CARGO RELEASE ORDER IN CFR DELIVERY In the event of original Bill(s) of Lading is not made available prior to the Vessel’s arrival at Discharging Port(s), the Consignee or Cargo Receivers (whichever applicable) shall provide telex Letter of Indemnity (as per Ship's Owners' Protection & Indemnity Club's format) not later than two (2) days prior to the Vessel's arrival at customary anchorage at the first Discharging Port (excluding the Saturday, Sunday and Holidays), against which the cargo will be released Any delay of discharge due to late issuing of the proper Letter of Indemnity or non-issuing the same and/or its subsequence thereof shall be borne by BUYER BUYER guarantees that Shipowner and SELLER will not bear any losses, damages and expenses incurred while fulfilling instructions given to the Master of the tanker by BUYER or their clients or by SELLER (at the BUYER’s request) in respect of cargoes released without presentation by Receiver of the original Bill of Lading on condition that Shipowner fulfilled all instructions with due care and respect 13 TAXES, DUTIES AND IMPOSTS 22 13.1 All taxes, duties or other imposts, whether retroactive or not, levied on the Crude Oil and arising in the country or countries in which Crude Oil is discharged shall be borne by BUYER, and BUYER shall reimburse SELLER the full amount of any such taxes, duties or imposts which SELLER are obliged to pay 13.2 All charges, cost and expenses, lighterage, wharfage, customs overtime at discharging port(s), if any, shall be borne by BUYER SELLER is to submit the invoice covering total amounts together with supporting document(s) in due course and payment will be made by BUYER within ten (10) days thereafter 14 15 TITLE AND RISK Title to the Crude Oil and all risk shall pass from SELLER to BUYER when the Crude Oil passes the Delivery Point However, any loss or damage to the Crude Oil during loading, if caused by the fault or privity of the Vessel, shall be for the account of BUYER who shall bear all prejudicial consequences thereof CARGO INSURANCE BUYER shall be responsible for adequate and timely arrangement of insurance coverage on the cargo 16 OTHER CONDITIONS FOR CFR DELIVERIES 16.1 WORLDSCALE clause: Unless otherwise agreed by both parties herein and in related Part I of the Contract hereto, WORLDSCALE terms and conditions shall be applied to this Contract 16.2 York/Antwerp clause: York Antwerp Rules 1994 and its amendments shall be applied to this Contract 16.3 War risk clause: If BUYER orders Vessel to deliver the cargo to the port(s) and/or place(s) at which and/or on the way to those port(s)/place(s) the war risk premiums are in addition to hull and machinery and crew war bonus over and above those in effect on the date of this Contract and the actual Charter Party, such increases will be for BUYER’s account 16.4 Quarantine: Should BUYER send Vessel to any port or place where quarantine exists, any delay thereby caused to Vessel shall count as used Laytime Should the quarantine not be declared until Vessel is on passage to such port, the result of which Vessel incurs demurrage, such demurrage shall be one half of demurrage rate specified in Clause herein above 16.5 All other terms and conditions not stipulated above shall be as per Part I of the Contract and as per actual Charter Party 17 APPLICABLE LAW AND ARBITRATION 17.1 All disputes or differences which may arise out of this Contract or in 23 connection with it will be settled by and without recourse to the Vietnam International Arbitration Centre (VIAC) in Hanoi, Vietnam, in conformity with the Rules and procedures thereof The award given thereof shall be final, conclusive and binding upon both Parties 17.2 Both Parties agree that Vietnamese Law shall be applied to all disputes and differences 17.3 Notwithstanding the fact that any matter in dispute between the Parties is to be submitted, or has already been submitted, to arbitration, the Parties shall continue to observe and perform their respective obligations and duties hereunder as if no such dispute had arisen 18 FORCE MAJEURE 18.1 For the purposes of this Contract, Force Majeure means a delay in performance, or any non-performance, by a Party of its obligations under this Contract caused by circumstances beyond the reasonable control of such Party, whether or not similar to those enumerated below, including (insofar as beyond such control, but without prejudice to the generality of the foregoing expression): (a) any event which occurs independently of human control, earthquakes or seabed subsidence, fire, explosion, adverse weather conditions, lightning, storm, typhoons, tidal wave, piracy, and other perils of navigation or perils of the sea (including collision, stranding, latent defects, fire, and attempting to save life); (b) acts of war or other public enemy (whether declared or undeclared), blockades, hostilities or conditions arising therefrom or attributable thereto, malicious or accidental damage, epidemics, insurrections, riots or other civil disturbances; (c) (d) strike, lock-out or labour dispute or disturbances; temporary or permanent interruption to production, processing, storage or transportation or supply of Crude Oil intended to be delivered as Crude Oil to BUYER under the Contract but excluding shortage of funds and payment of monies, whether in cash or in kind, due hereunder 18.2 If as a result of an event of Force Majeure, any Party is rendered unable, wholly or in part, to carry out its obligations under this Contract, other than the obligation to make payment of money hereunder, then the obligations of such Party, so far as and to the extent that the obligations are affected by such event of Force 24 Majeure, shall be suspended during the continuance of any inability so caused and any period for restoration of any damage, if any, but for no longer period The Party claiming Force Majeure shall notify the other Party of the Force Majeure situation promptly after the occurrence of the facts relied on and shall keep the other Party informed of all significant developments Such notice shall give reasonably full particulars of the Force Majeure and, if capable of remedy, also an estimate of the period of time which said Party will require to remedy the Force Majeure The affected Party shall use all reasonable diligence to remove or overcome the Force Majeure situation as quickly as possible If the Force Majeure events occur, any delivery or deliveries which are to be performed under the Contract within Force Majeure period may be cancelled on the declaration of either Party If these circumstances last for more than forty (40) days, each Party shall have the right to discontinue any further fulfilment of its obligations under the present Contract In such cases neither Party shall have the right to make a claim against the other Party for compensation for any possible damage Certificates issued by the respective Chamber of Commerce of SELLER’s or BUYER’s country shall be sufficient proof of above stated Force Majeure circumstances and their duration 18.3 If by reason of Force Majeure, SELLER’s availability of Crude Oil is insufficient to supply BUYER with the full quantity of Crude Oil set out in the Contract, SELLER may withhold, reduce or suspend the supply of Crude Oil to such an extent and on such a basis as SELLER reasonably thinks fit 19 DEFAULT If BUYER should at any time: (a) fails to perform or observe any of the obligations or conditions on its part to be performed and observed hereunder (other than a default set out in Clause 19(b) hereof) and in the case of a breach capable of being remedied without SELLER incurring any or further loss, damage, obligation or liability, fails to remedy such breach within such time as SELLER may permit after written notice from SELLER; (b) fails to make any of the payments in accordance with Clauses 4, and 11 of this Part or Clause of Part I; 25 (c) ceases or threatens to cease carrying on its business or becomes insolvent or compounds with its creditors, or if an order is made, or a resolution passed or other action taken for the winding up or protection from creditors, of BUYER, voluntarily or otherwise, or if BUYER has a receiver appointed for the whole or any part of its assets; SELLER shall be entitled, in its absolute discretion and in addition to and without prejudice to its right to claim damages and any other remedy available to SELLER, forthwith to demand and promptly be paid all sums then due and payable by BUYER under the Contract and further to treat all obligations, duties and responsibilities of SELLER as terminated 20 LIABILITY AND INDEMNITY 20.1 BUYER shall be liable for and shall indemnify SELLER against any loss, damage or expense caused by the Vessel, its owners, charterers or operators whilst the Vessel is at the Terminal including, without limiting the generality of the foregoing: (a) loss, escape, contamination or degradation of Crude Oil including Oil; (b) loss or damage to any property of SELLER, Terminal Operator or any person having an interest in the Terminal or Oil; (c) death, injury or illness to any person; or (d) contamination, degradation or pollution of the environment due to escape or loss of Crude Oil including Oil 20.2 BUYER shall indemnify and hold harmless SELLER from all actions, proceedings, suits, claims, demands, damages, losses, costs, charges, expenses and demurrage whatsoever and howsoever arising from:(a) BUYER’s failure to observe or perform any of its obligations under the Contract; (b) All losses, damages, costs and expenses which may be incurred by SELLER, or the Terminal Operator or any other persons, authorities or the Government of Vietnam by any reason of any act or omission including but not limited to deballasting or oil pollution, during berthing, loading and unberthing caused by or arising out of the Vessel's fault or negligence 21 NEW OR CHANGED REGULATIONS 26 21.1 In the event that at any time and from time to time any regulations are changed or new regulations become effective, whether by law, decree or regulation or by response to the insistence or request of any governmental or public authority or any person purporting to act therefore, and the material effect of such changed or new regulations (a) is not covered by any other provision hereunder, and (b) has a material adverse economic effect upon SELLER, SELLER shall have the option to request re-negotiation of the prices or other pertinent terms hereunder Such option may be exercised by SELLER at any time after such changed or new regulation is promulgated, by written notice of desire to re-negotiate, such notice to contain the new prices or terms desired by SELLER 21.2 If the parties not agree upon new prices or terms satisfactory to both within thirty (30) days after SELLER gives such notice, SELLER shall have the right to terminate this Agreement at the end of the said thirty (30) day period Any Oil delivered during such thirty (30) days period shall be sold and purchased at the price and on the terms applying hereunder without any adjustment in respect of the new or changed regulations concerned 22 GENERAL PROVISIONS 22.1 Entire Agreement Part I and Part II of the Contract constitute the entire agreement between the Parties in respect of the subject matter hereof and, subject to this Clause no other statement or agreement, oral or written, shall form any part of the terms of the Contract Neither Party shall claim any amendment, modification or release from any provision hereof unless there is an exchange of an instrument in writing signed by the authorised representative of the consenting Party stating the agreement has been amended, modified or discharged 22.2 Assignment Neither Party may assign its rights or obligations under the Contract in full or in part without the prior written consent of the other Party which shall not be unreasonably withheld The assignor shall in all instances remain liable for the proper performance of the Contract to the extent the liability is not discharged by the assignee It shall be a condition of the assignment that the assignee agrees in writing with the other Party to be bound by and perform all the obligations of the assignor under the Contract 22.3 Notices All notices required or permitted to be given under the Contract shall, except where otherwise expressly provided, be in writing in English and be sent by prepaid post, cable, telex, fax or other electronic or 27 telegraphic transmission to the addresses of the Parties set out in Part I Any notice so given shall be deemed to have been received on the day on which in the normal course it would have been delivered Any alterations to the contacts or addresses specified in Part I shall be notified immediately by letter or telex or fax to the other Party 22.4 Waiver No waiver of any breach of this Part II shall be effective unless such waiver is in writing and signed or otherwise accepted unconditionally in writing by the Parties against whom such waiver is claimed 22.5 Destination and Certification BUYER shall not sell, deliver or discharge the Crude Oil to a country or resident of a country in contravention of any statutory regulation, direction or guideline of the Socialist Republic of Vietnam applicable from time to time BUYER further understands that the Crude Oil deliverable hereunder shall not: (a) be exported to any restricted jurisdiction; (b) be sold and supplied to any natural or legal person in any restricted jurisdiction; or (c) be sold or supplied to any natural or legal person for the purposes of any commercial activity carried out in on from any such restricted jurisdiction 23 For the purpose of this Clause, "restricted jurisdiction" shall mean any country, state or territory or region against which there are sanctions imposed by the United Nations, by the Socialist Republic of Vietnam BUYER undertakes, whenever required, to submit within a reasonable time to SELLER the discharge certificate of each shipment SELLER reserves the right to witness the discharge of the cargo CONFIDENTIALITY The terms and conditions of this Contract shall remain strictly secret and confidential between the Parties 28