CONTRACT FOR THE SALES AND PURCHASE AGREEMENT

INDONESIA STEAMING (NON-COKING) COAL

NO:

This Agreement is made and entered into in Jakarta on , 2004

by and between

SELLER :

………………………………………………………………………………………………
………………………………………………(hereinafter referred to as “SELLER”).

AND

BUYER :

………………………………………………………………………………………………
………………………………………………………………………………………………
(hereinafter referred to as “BUYERS”).

Whereas, Seller agrees to sell and deliver and Buyer agrees to purchase, accept
delivery of and pay for coal on the terms and conditions set out in this
agreement:

Article 1 – MATERIAL

Indonesia Steam Coal (Non-Coking) in Bulk.

Article 2 – QUANTITY

Seller shall deliver and Buyer shall purchase 60,000 metric tons (+/-10%) as a
trial shipment and then per every 30/45 days for period of 12 (twelve) months.

Article 3 – PRICE AND LOADING PORT

USD _____ per metric ton (United States Dollars: __________Dollars Per
Metric Ton) CIF Ningbo Port

Unit price applicable for the balance shipment to be reviewed periodically every 3
months and to be mutually agreed between seller and buyer.
Article 4 – LOADING AND DESTINATION PORT

Loading Port : Tanjung Petang, South Kalimantan, Indonesia

SBLC Value : USD. ____________ Covering 40,000mt (+/-10%)

Article 5 – VESSEL AND SHIPMENTS

Shipment shall be done maximum 45 days after Seller receives Standby Letter of
Credit.
The shipment laycan is schedule to be 45 days after receiving Standby Letter of
Credit.
- Vessel is to be a single deck/bulk carrier, maximum 20 years of age and size
of Hatch is 12meters.
- Partial shipment: Prohibited
- Transshipment: Prohibited

Article 6 – QUALITY

6.1. The quality of coal to be supplied hereunder shall be based on the following
typical Specification, which is determined and analyzed as per ISO/ASTM
standards, either by PT. Superintending Company of Indonesia.

ISO/ASTM Testing method2

Paramenters Test Guarantee Rejection level

Total Moisture (arb) 15% max. 15%
Inherent Moisture (adb) 7% max 8%
Ash content (adb) 14% max. 16%
Volatile Matter (adb) 43% max. 44%
Fixed Carbon (adb) 40-% max. 41%
Total Sulphur (adb) 1 % max. 1,2%
Gross Calorific Value (adb) 6.300Kcal/kg 6.100 Kcal/kg
HGI 43% max 45%
Size 0 – 50 mm

6.2. All percentages used refer to percentages by weight. Quality will be

determined pursuant to ARTICLE 6.

Article 7 – QUALITY DETERMINATION

7.1. Seller shall appoint either PT. Superintending Company of Indonesia to carry
out the sampling analysis of the material shipped on board which shall be final
and binding on both parties.
Sellers to ENSURE THAT THE PSI APPOINTED AT LOAD PORT MUST BE
AFFILIATED WITH SGS.
7.2. The method of sampling and analysis shall be determined according to
ISO/ASTM Standard.

7.3. The costs of inspection for sampling and analysis described in this Article 7
at the loading port shall be borne by Seller. Costs caused at the discharging
ports shall be borne by the Buyer.

Article 8 – QUANTITY DETERMINATION

8.1. Seller shall appoint PT. Superintending Company of Indonesia to determine

the weight of cargo loaded onto the vessel and issue a certification of weight,
which shall be final and binding on both parties.
Sellers to ENSURE THAT THE PSI APPOINTED AT LOAD PORT MUST BE
AFFILIATED WITH SGS.

8.2. The certified weight shall be determined by draft survey of the carrying
vessel at the Loading Port utilizing the vessel’s immersion scale of weight.

8.3. A fraction of a ton shall be rounded up if such fraction is not less than one
half of one ton, and shall be rounded down otherwise.

8.4. The quantity certified by PT. Superintending Company of Indonesia report

shall be the basis for determination of the amount payable by Buyer to Seller for
the shipment. If amount of steam coal shipped exceeds total L/C value, Buyer
shall amend the L/C accordingly.

8.5. The cost of inspection, sampling and analysis described in this Article 8 at
the loading port shall be borne by Seller. Costs caused at the discharging ports
shall be borne by the Buyer.

Article 9 – PRICE AND QUANTITY ADJUSTMENT

In the event the quality of coal supplied as determined by PT. Superintending

Company of Indonesia in respect to the total moisture and Gross Calorific value
vary from the specification set out in Article 6, adjustment on the invoice shall be
made in accordance with the following provisions:

9.1. Total Moisture (ARB)

If the actual Total Moisture (TM) as determined by Independent Surveyor at

Seller’s loading port is in excess of 15 percent (arb), then the following of penalty
on price shall apply:

Invoiced Weight = Bs/L quantity x [100 % Actual TM / (100 % - 15 %)]

9.2. Gross Calorific Value (ADB)

If the actual Gross Calorific Value (GCV) varies lower from 6,300Kcal/kg (adb),
then the unit price shall be adjusted according to the following formula with
premium ceiling at 6,250 Kcal/kg (adb):BUYERS WILL NOT OFFER ANY
PREMIUM TO SELLERS IF CALORFIC VALUE EXCEEDS 6.100 KCAL/KG.

FOB Price x Received GCV (adb)

Invoiced Price = -------------------------------------------------
6,300 Kcal/kg (adb)

Article 10 – PAYMENT AND DOCUMENTATION

10.1 Seller guarantees payment by Irr Confirmed Standby Letter of credit and
payment by TT 7 (seven) days after sailing ship. Results of the specifications, for
the purpose of payment calculations, shall be the average of the inspection
agency at loading port. Format of the Standby Letter of credit is attached and
shown in appendix 1

10.2. Upon signing the Sales contract, Buyer shall open an Irrevocable,
Confirmed, Standby Letter of Credit maximum 7 Days after signing the contract,
or at minimum 45 days prior to the shipment, for 100% C&F value of the
shipment in favor of Seller. The following documents are presented to buyer
within 7 days from B/L date.

a) Signed commercial invoice issued by Seller showing Contract

number, SBLC number, B/L number, description of goods, unit
price total amount, gross/net weight of the goods in Triplicate.
b) Price adjustment as per Article 9.1 and 9.2 (above)

c) Clean on board Ocean Bills of Lading in Triplicate

d) Certificate of Draft Survey issued by any Surveyor as stated in

Article 8 in Triplicate.

e) Certificate of Origin issued by the Chamber of Commerce and

Industry of the country of export in the country of the loading in
Triplicate.

f) Certificate of Sampling and Analysis issued by any Surveyor as

stated in Article 7 in Triplicate..
BANKERS INFORMATION:

SELLER’S BANK INFORMATION:

Account Name :
Bank Name :
Address :
Tel :
Swift :
Account number :

Article 11 – LOADING RATE / DEMURRAGE / OPERATIONS / DELIVERY

 Prior to departure of the carrying vessel at loading port the Seller shall
send the Buyer by Fax and/or e-mail the Notification of Shipment for each
Consignments within 5 (Five) days, including Contract Number, L/C
number, expected loading quantity, estimated time of departure of carrying
vessel, and the vessel’s particulars such as vessel’s name, capacity of the
cranes, number of holds, flag and position etc. for the Buyer to make
necessary arrangements. The Seller shall immediately notify the Buyer of
any change to the delivery date that has been previously notified.

 Marine Insurance to be covered by the Buyer’s if needed.

 Upon completion of the loading, the Seller shall send the Buyer the
Shipping Advice of the contract number, name of the commodity, weight,
and Contract value, name of the carrying vessel, B/L number and date,
and estimated date of arrival [ETA] at port of discharge by fax and/or e-
mail within (3) three working days from B/L date.

 INCASE ORIGINAL BS/L NOT RCVD AT DISCHARGE PORT THEN

OWNERS OF THE VESSEL TO DELIVER THE CARGO AGAINST
RCVRS SINGLE LOI SIGNED IN ORIGINAL ON THEIR LETTER
 HEAD(S) AS PER PNI WORDINGS/FORMAT FROM OWNERS PNI
CLUB.

 The seller shall arrange for the Master of the carrying vessel to give
72/36/24 hours Notice of vessel’s ETA (estimated time of arrival) at port of
unloading to Buyer or Buyer’s agent at the port of discharge. Such notices
are given during office hours only, WIPON, WIBON, WIFFTON, WICCON.

 Notice of readiness shall be tendered at the nominated discharging

port/anchorage anytime during normal office hours between 08.00 hours
and 17.00 hours, from Monday through Friday and between 08.00 hours
and 13.00 hours on Saturday, but Sundays and holidays excluded, when
the vessel is in all respect ready to discharge and is in free Pratique,
unless sooner commenced.

 The Buyer has to provide one good and safe berth for discharging, which
is available on vessels arrival, always accessible, where the vessel can
safely berth alongside and lie always afloat.

 Shall the vessel be required to shift from one berth to another at port of
unloading; time used in shifting shall not count as lay time: however, the
cost of shifting shall be to the Buyers account.

 Discharging rate will be at 24 hours on sunny day 6.000 metric tons

minimum per weather working day, Sundays and holidays excluded even
if used.

 Sundays and Holidays will not be counted as Demurrage. Time will not be
counted as lay time due to heavy rain, snow and storm.

 Demurrage/dispatch to be settled between the Buyer and the Seller

against Notice of Readiness (NOR) and Statement of Facts (SOF) within 5
(Five) working days after FROM THE RECEIPT OF VESSEL’S Master
commercial invoice.

Article 12 – TITLE, RISK AND LIABILITY

12.1 Title with respect to the shipment shall pass to the Buyer when Seller has
received payment in full as per Seller’s invoice for the shipment.

12.2. Risk with respect to the shipment shall pass on to the Buyer when material
passes the vessel rail at the loading port.

Article 13 – TAX AND DUTIES

All taxes, duties, levies, dues, etc., of the coal loading on to the vessel, at the
port of loading if any shall be to Seller’s account and responsibility.

Article 14 – INSURANCE

Buyer shall at their own expense, arrange for suitable marine insurance cover for
the material shipped by Seller. Transshipment insurance cover will be for Seller’s
account.

Article 15 - PERFORMANCE BOND

The Seller shall provide a PERFOMANCE BOND equivalent to 2 (two) percent of

the Stand By Letter of Credit value for each shipment and submitted with buyers
banks WITHIN 72 HOURS AFTER BUYERS ESTABLISHING A SBLC IN
SELLERS FAVOR. This Performance Bond shall be valid for 45 days from the
Letter of Credit receipt date.

Article 16 - AGENCY/STEVEDORING AT DISCHARGE PORT

Owners to appoint messrs_________ as the handling agents and stevedores at

discharge port.
_____ will charge Ship Owners with a customary fee for port cost from Owners
and the Stevedoring charges for discharging vessel from Receivers.

Article 17 – FORCE MAJEURE

If at any time during the existence of this contract either party is unable to
perform in whole or in part any obligations under this contract because of war,
warlike conditions, riots, hostilities, military operations of civil commotion,
sabotage, quarantine restrictions, acts of any character of God and acts of
Government (including but not restricted to prohibition of exports or imports),
fires, floods, explosions, epidemics, strikes, or any labor disputes, blockade,
embargoes.

If operation of such circumstances exceed three months, either party shall 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 days of occurrence of any of the causes mentioned in this Article 17,
shall inform the other party of the existence or termination of the circumstances
preventing the performance of the contract. Certificate issued by the Chamber of
Commerce or any other relevant Government Authority in the country of Seller or
Buyer shall be sufficient proof of the existence of the above circumstances and
their duration.

Article 18 – ARBITRATION

In the event of any disputes or breaches thereof, the matter shall be referred to
the International Arbitration Council in Indonesia, whose decision shall be final
and binding on both parties.

Article 19 – LIABILITY

The liability of a party in respect of any claim brought by the other party based on
failure of the first party to fulfill its obligations under this Agreement shall not be
limited to liability for loss suffered by the party aggrieved.

Article 20 – NOTICES / GENERAL

20.1. Any notice of other communication required under this Agreement shall be
made be personal delivery, facsimile, mail.

20.2. Such notices or other communication in this Article 19 shall be deemed to

have been sufficiently given it.

a. Personally delivered in writing, when delivered at the office of a party

at the address of that party as noted as above.
b. Facsimile, one (1) business day after being placed on the facsimile
correctly addressed to a party whose address and facsimile number is
noted above.
c. Glossary of terms (where applicable) :

1. CNF COST AND FREIGHT

2. ISO INTERNATIONAL STANDARD ORGANISATION
3. ASTM AMERICAN STANDARD TESTING METHOD
4. % PERCENTAGE
5. NOR NOTICE OF READINESS
6. WICCON WHETHER IN CUSTOMS CLEARANCE OR NOT
7. WIFPON WHETHER IN FREE PRATIQUE OR NOT
8. WIBBON WHETHER IN BERTH OR NOT
9. WWDSHINC WHETHER WORKING DAY SUNDAYS AND
HOLIDAYS INCLUDED
10. CBM CUBIC METRIC
11. GCV GROSS CALORIC VALUE
12. ARB AS RECEIVED BASIS
13. ADB AIR DRIED BASIS
14. KCAL/KG KILO CALORIE PER KILOGRAM
15. BS/L BILLS OF LOADING
Article 21 – NO WAIVER

No Waiver by either party of any provision of this Contract shall be binding unless
made expressly and expressly confirmed in writing.

Article 22 – APPLICABLE LAW

This agreement shall be governed by and construed in accordance with the laws
of Singapore

Article 23 – CONFIDENTIALITY

This Agreement is confidential and shall not be disclosed to any third party. Also
both parties agree not to circumvent each other with their respective suppliers,
sellers or buyers or their agents, representative(s) for a period of minimum of 24
months after the expiry or completion of the contract whichever is the latter.

Article 24 – ENTIRE AGREEMENT

This contract contains the entire agreement between Buyer and Seller in relation
to the sales and purchase of coal and supersedes all prior negotiation,
understandings and agreements whether written or oral in relation to the
contract.

IN WITNESS WHEREOF the Parties hereto have caused this Agreement

inclusive of all the pages to be duly executed as of the day and year first above
written.

Signed and sealed for and on Signed and sealed for and on
Behalf of SELLER behalf of BUYER