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AGREEMENT & FORMAT 4 LOI 

 
DOCUMENTS REQUIRED


** IN ORDER TO CORRECTLY FACILITATE YOUR REQUEST, WE REQUIRE THE FOLLOWING ON BUYERS LETTERHEAD.
1. NBI (New Buyer Input) and

2. BCL (Bank Capability/Comfort Letter)

BCL FORMAT

NEW BUYER INPUT
(To be typed on Buyer Letterhead)

Date:

To Company:
** Commodity
MTW Quantity per month to ship:
Contract Length in number of months:
Material to ship:
Source Location:
** Buyer Company
Full Company Name
Address
City State Country Zip
Signatory name
Telephone
Fax
Email
** Buyer Bank
Bank name of the Buyer
Bank Address
Bank City & State
ABA: Swift/Route of the Buyer
Bank Account Number
Bank Account Holder
** Receiving Company
Ship to Company
Ship to Address
Ship to City State/Providence & Country
Ship to Voice
Ship to Fax
Debarkation Port
Debarkation Country


BANK CAPABILITY LETTER
(To be typed on Bank Letterhead)

Date:

To Company:

Transaction Reference: Purchase of___________________________________

Dear Sirs:
In providing this capability letter, we (name of the bank) do not assume any financial liability or any
contractual relationship with parties. We certify only that (client name) has the credit, or the
financial capacity to initiate the transaction indicated above. Should our client wish to do so.
Transaction in amount of approximately (total transaction amount in US Dollars)

(Bank officers # 1 signature)
Bank officer name and title

(Bank officers # 2 signature
Bank officer name and title

ABA number:

Bank contact person: (English Speaking)

Swift number:

Telephone:

Telex:

Fax:

Buyer information

Account name:

Legal Name:

Address:

Contact Person: (English speaking)

Tel:

Fax:

(Bank Seal)



** AND THE APPROPRIATE LOI(s)
3. LOI (Letter of Intent - HMS1

LOI FORMAT

LETTER OF INTENT
HMS 1


Date: xx/xx/2004
Valid until: xx/xx/2004

To:
From:
Contract Person
Title
Company Name
Company Address
Company Telephone Number
Company Fax Number
Company E-mail
Country zip code

We, _________________________, hereby confirm our intention and with our sufficient financial capabilities, and the license for importing guaranteeing for us to purchase the following commodity from your company. We hereby confirm that our intention is without perjury nor defrauding, abiding by the Laws and rules of International Chamber of Commerce. The signature shown below is authorized by this company stated above, being with the full authority on representing the company. The said commodity should conform to the requirements stated hereinafter on the specifications quantity, price, payment instrument and other conditions. Description of Commodity: Scarp Heavy Melting Steel (HMS) 1&3 in ratio of 80% as per ISRI200 – 202.


MAJOR SPECIFICATION for HMS1

Size Length & Width
1.5 meter x 0.6 meter max.
Thickness
6mm and above for HMS1

All HMS shall conform to the standards/specifications of the Institute of Scarp Recycling Industries hereinafter referred to as (ISRI) HMS No 1 shall be within the range on ISRI code numbers 200, 201, and 202. The scrap consists out of mix of mill scrap (stampings, cuttings, bars) industrial scrap (nuts, bolts, misc. pieces) auto and truck frames and bodies, railroad scarp ( wheels, axles, parts of locomotives and carriages) ship scrap ( fittings, plate pieces, parts) construction scrap (plates, bars, angle pieces, rods, steel pipe) and miscellaneous commercial scrap (appliances casting, frames, parts).
HMS1 are free of alloys as per ISRI Standards and mainly structure, plate, bar etc. Free of machinery (lathes, whole set of machine tools, motors, casting iron etc.), not including electrical parts and visible-copper scarp and also free of cements, woods, and rubber etc., also of sealed vessel, explosive material, rusty scarp etc. The goods are free from sealed gas cylinders and other sealed containers, explosive shells, bombs and inflammable material, pig iron, and electrical motor. Dirt, dust and impurities are not more than 0.5% of total weight. HMS1 are so totally free of radioactive contamination and poisonous materials. High carbon steel is not included in this scrap.


TERMS and CONDITIONS for HMS1

Target Rate
USD (United States Dollar) Per MT CIF
Total Contract quantity
MTW (+/- 5%) for 12 MONTH CONTRACT
Monthly Quantity
Metric tons per shipment (+/- 5%)
Deliveries
Each month several Vessels x 40,000
Payment Instrument
Irrevocable Involving Documentary Letter of Credit 100% of Invoice value for of HMS1.
Inspection
Conducted at Loading Port, upon Receipt of the First L/C Payment
Discharge Rate
2500 MT PWWD Sundays and Holidays excluded even if used
Packing
Bulk
Origin
South Africa, Mediterranean, Central Europe
Contract Period
12 Months
Destination
____________________


PERFORMANCE GUARANTEE

The Seller will issue a operative PB 2% of the value of the Letter of Credit. The Buyer will issue the L/C which will activate the operative PB guarantee.


PROCEDURE

1. The Seller issues Contract text to the Buyer and both parties resolve issues by friendly communication.
2. The Seller issues final Contract draft to the Buyer who signs and seals and sends back.
3. The Seller signs the Contract and returns to the Buyer via fax. This facsimile copy will be considered the original. Hard copies will be sent to the Buyer by Seller courier service.
4. Within 7 banking days of sign the contract the Buyer provides the Irrevocable Revolving Operative Letter of Credit to the Seller’s bank and also electronically sends a copy to the Seller’s office.
5. After receipt of the Irrevocable Revolving Operative Letter of Credit the Seller shall provide 2% Performance Bond of the value of the Letter of Credit which activates the L/C first revolving value.
6. Delivery and shipment commence as per Contract.


BUYER’S BANK COORDINATES INFORMATION

Bank Name
Bank Address
Bank Contact
Telephone Number
Fax Number
SWIFT or ABA Code
Account Number
Account Holder

We understand that any and all offers and/or Contracts are subject to successful Seller verification of funds availability we hereby give our written permission for the sell to conduct a Soft Probe of Our Account.


4. LOI (Letter of Intent - HMS1&2

FORMAT LOI HMS1&2

LETTER OF INTENT
HMS 1&2

Date: xx/xx/2004
Valid until: xx/xx/2004

To:

From:
Contract Person
Title
Company Name
Company Address
Company Telephone Number
Company Fax Number
Company E-mail
Country zip code

We, ________________________________, hereby confirm our intention and with our sufficient financial apabilities, and the license for importing guaranteeing for us to purchase the following commodity from your company. We hereby confirm that our intention is without perjury nor defrauding, abiding by the Laws and rules of International Chamber of Commerce. The signature shown below is authorized by this company stated above, being with the FULL AUTHORITY on representing the company. The said commodity should conform to the requirements stated hereinafter on the specifications quantity, price, payment instrument and other conditions.


DESCRIPTION of COMMODITY


SCRAP HEAVY MELTING STEEL (HMS) 1&2 in ratio of 80% as per ISRI200 – 202


MAJOR SPECIFICATIONS for HMS1

Size Length & Width
1.5 meter x 0.6 meter max
Thickness
6mm and above for HMS1

All HMS shall conform to the standards/specifications of the Institute of Scrap Recycling Industries hereinafter referred to as (ISRI) HMS No 1 shall be within the range on ISRI code numbers 200, 201, and 202. The scrap consists out of mix of mill scarp (stampings, cuttings, bars) industrial scarp (nuts, bolts, misc. pieces) auto and truck frames and bodies, railroad scarp ( wheels, axles, parts of locomotives and carriages) ship scarp ( fittings, plate pieces, parts) construction scarp (plates, bars, angle pieces, rods, steel pipe) and miscellaneous commercial scarp (appliances casting, frames, parts). HMS1 are free of alloys as per ISRI Standards and mainly structure, plate, bar etc. Free of machinery (lathes, whole set of machine tools, motors, casting iron etc.), not including electrical parts and visible-copper scarp and also free of cements, woods, and rubber etc., also of sealed vessel, explosive material, rusty scarp etc. The goods are free from sealed gas cylinders and other sealed containers, explosive shells, bombs and inflammable material, pig iron, and electrical motor. Dirt, dust and impurities are not more than 0.5% of total weight. HMS1 are so totally free of radioactive contamination and poisonous materials. High carbon steel is not included in this scrap.


TERMS and CONDITIONS for HMS1

Target Rate
USD (United States Dollar) Per MT CIF
Total Contract quantity
MTW; (+/- 5%) for 12 MONTH CONTRACT
Monthly Quantity
Metric tons per shipment (+/- 5%)
Deliveries
Each month several Vessels x 40,000
Payment Instrument
Irrevocable Involving Documentary Letter of Credit 100% of Invoice value for of HMS1.
Inspection
Conducted at Loading Port, upon Receipt of the First L/C Payment
Discharge Rate
2500 MT PWWD Sundays and Holidays excluded even if used.
Packing
Bulk
Origin
South Africa, Mediterranean, Central Europe
Contract Period
12 Months
Destination
_________________________


PERFORMANCE GUARANTEE

The Seller will issue a operative PB 2% of the value of the Letter of Credit. The Buyer will issue the L/C which will activate the operative PB guarantee.


PROCEDURE

1. The Seller issues Contract text to the Buyer and both parties resolve issues by friendly communication.
2. The Seller issues final Contract draft to the Buyer who signs and seals and sends back.
3. The Seller signs the Contract and returns to the Buyer via fax. This facsimile copy will be considered the original. Hard copies will be sent to the Buyer by Seller courier service.
4. Within 7 banking days of sign the contract the Buyer provides the Irrevocable Revolving Operative Letter of Credit to the Seller’s bank and also electronically sends a copy to the Seller’s office.
5. After receipt of the Irrevocable Revolving Operative Letter of Credit the Seller shall provide 2% Performance Bond of the value of the Letter of Credit which activates the L/C first revolving value.
6. Delivery and shipment commence as per Contract.


BUYER’S BANK COORDINATES INFORMATION

Bank Name
Bank Address
Bank Contact
Telephone Number
Fax Number
SWIFT or ABA #
Account Number
Account Holder

We understand that any and all offers and/or Contracts are subject to successful Seller verification of funds availability we hereby give our written permission for the sell to conduct a Soft Probe of Our Account.

For and on behalf of The Buyer

Signature

Seal

Date

5. LOI (Letter of Intent - USED RAIL

FORMAT LOI USED RAIL

LETTER OF INTENT
USED RAIL



Date: xx/xx/2004
Valid until: xx/xx/2004

To:
From:
Contract Person
Title
Address-1
Address-2
Address-3
Phone
Mobile
Fax
E-Mail xxxx@xxxxx.ccc

We, _____Company Name_____, hereby confirm our intention and with our sufficient financial capabilities, and the license for importing guaranteeing for us to purchase the following commodity from your company. We hereby confirm that our intention is without perjury nor defrauding, abiding by the Laws and rules of International Chamber of Commerce. The signature shown below is authorized by this company stated above, being with the FULL AUTHORITY on representing the company. The said commodity should conform to the requirements stated hereinafter on the specifications quantity, price, payment instrument and other conditions.


DESCRIPTION of COMMODITY
Used Rails as per ISRI R-45 – R-65



SPECIFICATIONS OF USED RAIL SCRAP R-45 to R-65
Chemical Specifications for scrap railway track metal


01. Caduim Cd :0.0006%
02. Chromium Cr :0.6205%
03. Copper Cu :0.2507%
04. Cobalt Co :0.0046%
05. Lead Pb :0.0149%
06. Molybdenum Mo :0.003%
07. Nickel Ni :0.141%
08. Tin Sn :0.001%
09. Silver Ag :0.0005%
10. Zinc Zn :0.349%
11. Iron Fe :75.21%
12. Impurities :23.33%

The following traces of undesirable elements should not be there

01. Carbon : 0.65-0.75% (In the railway track)
02. Manganese : 0.65-0.80%
03. Sulphur : 0.06% max.
04. Phosphorus : 0.05%

Size
World Standard Size: ISRI Code R- 45 to R- 65

Mixed Scrap Rail
Mixed Scrap Rail shall consist of assorted scrap standard tee rails.

No.1 Scrap Rail
No.1 Scrap Rail shall consist of prepared scrap standard tee rails less than 1 foot in length.

No.2 Scrap Rail
No.2 Scrap Rail shall consist of prepared scrap standard tee rails less than 2 foot in length.

No.3 Scrap Rail
No.3 Scrap Rail shall consist of prepared scrap standard tee rails less than 3 foot in length.

No.4 Scrap Rail
Scrap Rail shall consist of assorted scrap standard tee rails 10 foot lengths and over.
Must be free of bent or twisted rails and be suitable for rerolling.

Size Length & Width: 1/4 inches and over in thickness, not over 18 inches in width, not over 5 feet in length, Thickness: 1/8 inches to ¼ inches in thickness, not over 15 inches x 15 inches

All Used Rails shall conform to the standards/specifications of the Institute of Scarp Recycling Industries hereinafter referred to as (ISRI) Used Rails shall be within the range on ISRI code numbers R- 45, R- 50,
R- 60 and R- 65.

The scrap consists out of railroad scrap (nuts, bolts, misc. pieces), railroad scarp (wheels, axles, parts of locomotives and carriages). Used Rails are free of alloys as per ISRI Standards and mainly structure, plate, bar etc. Free of machinery (lathes, whole set of machine tools, motors, casting iron etc.), not including electrical parts and visible-copper scarp and also free of cements, woods, and rubber etc., also of sealed vessel, explosive material, rusty scarp etc. The goods are free from sealed gas cylinders and other sealed containers, explosive shells, bombs and inflammable material, pig iron, and electrical motor. Dirt, dust and impurities are not more than 0.5% of total weight. Used Rails are so totally free of radioactive contamination and poisonous materials. High carbon steel is not included in this scarp.


TERMS and CONDITIONS for USED RAILS

Target Rate:
USD (United States Dollar) Per MT CIF
Total Contract quantity:
MTW; (+/- 5%) for 12 MONTH CONTRACT
Monthly Quantity:
Metric tons per shipment (+/- 5%)
Deliveries:
Each month several Vessels x 40,000
Payment Instrument:
Irrevocable Involving Documentary Letter of Credit 100% of Invoice value for of Used Rails.
Inspection:
Conducted at Loading Port, upon Receipt of the First L/C Payment
Discharge Rate:
2500 MT PWWD Sundays and Holidays excluded even if used.
Packing:
Bulk
Origin:
South Africa, Mediterranean, Central Europe
Contract Period: 12 Months
Destination:
_________________________


PERFORMANCE GUARANTEE

The Seller will issue a operative PB 2% of the value of the Letter of Credit. The Buyer will issue the L/C which will activate the operative PB guarantee.


PROCEDURE

1. The Seller issues Contract text to the Buyer and both parties resolve issues by friendly communication.
2. The Seller issues final Contract draft to the Buyer who signs and seals and sends back.
3. The Seller signs the Contract and returns to the Buyer via fax. This facsimile copy will be considered the original. Hard copies will be sent to the Buyer by Seller courier service.
4. Within 7 banking days of sign the contract the Buyer provides the Irrevocable Revolving Operative Letter of Credit to the Seller’s bank and also electronically sends a copy to the Seller’s office.
5. After receipt of the Irrevocable Revolving Operative Letter of Credit the Seller shall provide 2% Performance Bond of the value of the Letter of Credit which activates the L/C first revolving value.
6. Delivery and shipment commence as per Contract.


BUYER’S BANK COORDINATES INFORMATION

Bank Name :
Bank Address :
Bank Contact :
Telephone Number :
Fax Number :
Account Number :
Account Holder :
SWIFT (ABA) Code :

We understand that any and all offers and/or Contracts are subject to successful Seller verification of funds availability we hereby give our written permission for the sell to conduct a Soft Probe of Our Account.

For and on behalf of The Buyer

Signature

Seal

Date


Draft of 24 May 2004

FOR DISCUSSION PURPOSES ONLY

SALE AGREEMENT

Between:

1. Seller Company name, a company established under the laws of the Country name, having its office address at Office Address, hereinafter referred to as "Seller";

and

2. Buyer Company Name a company established under the laws of the Contry Name having its office address at Office Address hereinafter referred to as "Purchaser".


WHEREAS:

?Purchaser is willing to purchase heavy melting scrap, to be defined in this Agreement;

_ Seller is willing to sell such heavy melting scrap to Purchaser;

?Parties wish to agree on the conditions regarding the sale and purchase in this Agreement.




NOW THEREFORE IT IS AGREED:

Article 1 - Definitions

1.1 Unless the context requires otherwise, the following terms and expressions in this Agreement shall have the following meanings:

"Agreement" means this Purchase Agreement.

"Business Day" means a day on which banks in the Country Bank are open.

"CIF" means CIF delivery terms as set out in the INCOTERMS 2000.

"Contract Goods" means [ In Figers, In words] metric tons of heavy melting scrap, in the quality of R50 and R65 and as further specified in Annex 1.

"Letter of Credit" means the letter of credit in favour of Seller pursuant to article 7 of the Agreement.

"Monthly Shipment" means a monthly shipment in lots of [30000 , Therty Thousand] metric tons of the Contract Goods; (Spacify the Monthly Shipment quantitity, if buyer is same then please Write the shipment Scadule that you are having)

"Party" means a party to the Agreement...

1.2 Words importing the singular only also include the plural and vice versa where the context requires.


Article 2 Contract Goods

2.1 Seller agrees to sell to Purchaser and Purchaser agrees to purchase from Seller the Contract Goods.

2.2 Contract goods will be R50 and R65 quality.

2.3 5% more or less of the Contract Goods is accepted by Purchaser.

Article 3 Price

3.1 The purchase price of the Contract Goods shall be USD [nly](excluding VAT) per metric ton.

3.2 The purchase price shall include packaging and freight from [...] to seaport [ ] and all costs, levies and taxes with respect to export clearance.

3.3 Purchaser is obliged to procure for unloading of the Monthly Shipments at the port of destination and shall bear all cost, taxes, levies etc. with respect to unloading.

Article 4 Delivery

4.1 The Seller shall deliver the Contract Goods Product to Purchaser in 12 Monthly Shipments.

4.2 Seller or its shipping agent shall give notice to Purchaser within [ ] hours after the carrier's departure from the port of loading of the carrier's sailing date, the name and flag of the carrier, the number of the bill of lading or the seaway bill and the estimated time of arrival of the carrier at the port of destination.

4.3 Delivery shall be made CNF (Incoterms 2000) seaport [ ] and shall be made at the port of loading not later than the [45]th day of the month. The first Monthly Shipment shall be delivered within [45] calendar days after the issue of the Letter of Credit to Seller in accordance with Article 7 of the Agreement.

4.4 The Seller retains title to the Contract Goods, delivered or to be delivered, until the Purchaser has fulfilled its obligations with respect to all Products delivered or to be delivered under the Agreement and with respect to all claims based on breach of the Agreement.

Article 5 Packaging

The Monthly Delivery shall be packed in bulk. [N.B. Is this sufficient?]

Article 6. Payment

6.1 Seller shall invoice the Monthly Shipments to Purchaser.

6.2 Payment by Purchaser is due at the time of delivery of the Monthly Shipments in accordance with article 4.3 of the Agreement.

6.3 In case payment is not received on the date on which it falls due, Purchaser is obliged to pay legal interest over the outstanding amount.

Article 7. Letter of Credit

7.1 Within seven (7) Working days after the Agreement has been signed by both Parties, Purchaser shall open an irrevocable revolving and transferable Letter of Credit in favour of Seller in the amount of USD [ ]. The letter of credit shall be automatically revolving to the next Monthly Shipment until delivery of the Contract Goods is completed.

7.2 The Letter of Credit shall be issued and confirmed and available with a major bank in the Country Bank and shall stipulate an expiry date for the presentation of the documents of at least [...] months after the letter of credit has been issued. The letter of credit shall be available by sight payment upon presentation of a bill of loading or non-negotiable sea waybill stating the handing over for shipment of the Monthly Shipment at the port of loading at [ ] to [ ] as port of destination, a commercial invoice and packing list. [N.B. Are these correct and sufficient documents?],

7.3 The Letter of Credit shall be issued and confirmed subject to the current ICC Uniform Customs and Practice for Documentation Credit (UCP 500).

Article 8. Performance Bond

8.1 Seller shall, within seven (7 ) Working Days after the Agreement has been signed by both Parties ensure that a non-operative performance bond is issued in favour of the Purchaser, provided that a Letter of Credit has been issued in accordance with article 7 of the Agreement. The amount of the performance bond shall be [ ] of the purchase price of a Monthly Delivery.

Article 9 Inspection

9.1 Seller shall procure that a weighting, quality and quantity report with respect to the Monthly Shipments shall be issued at the loading port by Soci彋?de surveillance (SGS) for the account of Seller.

9.2 Inspection at the port of destination shall be made by Soci彋?de surveillance (SGS) for the account of Purchaser.

Article 10 Conformity

10.1 The Contract Goods do not conform to the Agreement if they do not conform to the specifications as set out on the Agreement at the time of delivery.
10.2 Seller is not liable for the Contract Goods being fit for a particular purpose to which the Purchaser intends to use them.

10.3 The Seller is not obliged to perform any additional obligations not mentioned in the Agreement. In particular the Seller is not obliged to insure the Monthly Shipments, to procure import licences or permits or to comply with weight and measuring systems, packaging, labelling or marking requirements applicable outside [ ].

Article 11 ?Liability and Force majeure

11.1 Seller's liability under the Agreement shall be limited to [...]. Seller shall in no event be liable for damage exceeding this amount, whether suffered on the part of Purchaser or on the part of third parties, whether personal injury or material damages, whether direct or indirect. All such liability, including liability for consequential damages, is hereby excluded.

11.2 In case the Seller cannot properly perform its obligations in whole or in part, whether temporarily or permanently, as a result of circumstances which are not at the Supplier's risk, including but not limited to transportation problems; limitations/prohibitions of import and/or export, nature-/nuclear disasters; war, danger of war, acts of terror and other circumstances which are beyond the Supplier's reasonable control, Seller is entitled to rescind the Agreement, without any compensation being due.

Article 12 - Miscellaneous

12.1 The Agreement shall be governed by and construed in accordance with the laws of the Netherlands.

12.2 All disputes arising in connection with the Agreement shall be submitted to the exclusive jurisdiction of the competent court in Rotterdam, the Netherlands [N.B. If the Purchaser is not located in the EU arbitration is preferred.].

12.3 Except as specifically provided herein, each party will bear its own costs and expenses in relation to the preparation, execution and performance of this Agreement.

12.4 Except as otherwise provided in this Agreement, no modification under the Agreement shall be of any force or effect unless: it is in writing and signed by the parties and expressly referred to as being a modification of this Agreement.

12.5 Purchaser undertakes that it shall bear all risk, financial and otherwise, in the event that, at any time during the term of the Agreement, there is a substantial change in governmental or other regulations affecting the validity and/or performance of any of the terms of this Agreement.

12.6 Purchaser agrees that Seller may assign and transfer the rights and obligations under the Agreement to an affiliated company or may be replaced by an affiliated company.

12.7 The Parties shall not, at any time, even after the expiration or termination of the Agreement, use or disclose to any person for any purpose, other than to perform the Agreement, confidential information, including but not limited to financial or commercial information one party received or receives from the other party in connection with the Agreement and Parties shall procure that their employees and subcontractors are bound to this provision in the same way.


IN WITNESS WHEREOF the Agreement is executed in [insert: place] on the date as mentioned above, in [insert: number] counterparts, each of equal tenor and validity.

Seller Purchaser


By : [...] By : [...]
Name : [...] Name : [...]
Title : [...] Title : [...]
(Duly authorised) (Duly authorised)







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