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This Agreement ("The Agreement") made on this ______ day of March, 2003, by and between:




Legally represented by:

(Hereinafter referred to as "Seller")






Tel :



Legally represented by:

(Hereinafter referred to as "Buyer")


(Hereinafter together shall be referred to as "Parties" or "Party")


Whereas, the parties mutually accept to refer to the General Terms and Definitions, as set out by the INCOTERMS Edition 2000 with latest amendments, having the following terminology fully understood and accepted:


US Barrel: The unit of volume measured at a standard temperature of 60 degrees Fahrenheit and equal to 42 US Gallons.

Metric Ton: A measure of weight equivalent to one thousand kilogram mass (1,000 Kg).

Commodity: Referred to as being "D2 Gas Oil" elsewhere in the Agreement also referred to as "Product or D2" which specifications are detailed in the Annex "A" which is an integral part of this Agreement.

Day: Means a Calendar day, unless differently specified.

Month: Means a Gregorian calendar month.

Calendar Quarter: Period of three (3) consecutive months beginning - 1st January, 1st April, 1st July or 1st October.

ASTM: American Society for Testing and Materials, is the institute, internationally recognized, that approved all Standards, Tests and Procedures used in the Oil Industry and to be referred in The Agreement to the latest revised edition with amendments in force to date.

Out-turn: The quantity and quality of the product ascertained, according to the ASTM procedures, on completion of the discharge operations. The so determined out-turn quantityand quality is the base on which the amount will be computed for the payment of the product effectively delivered to the Buyer.

Bill of Lading: The official document, issued at the load port after completion of the loading operations, stating, among other things, the ship's loaded quantity, expressed in Cubic Meters (M3) and in Metric Tons (MT) per the definitions herein. This document has to be signed in original by the ship's Master and made out in accordance without the instruction hereinafter specified in The Agreement.

Discharge The safe port/berth designated by the Buyer as final receiving destination.


CIF: Cost, Insurance and Freight strictly as referred to in the interpretations defined by the INCOTERMS Edition 2000 with latest amendments.

Delivery Date: The date mutually accepted by both Seller and Buyer as the date on which the nominated international Surveyor Company has ascertained the quantity and quality of the product pumped into the Buyer's designated discharge terminal facilities.

PLATT'S: Platt's McGraw Hill, London is the organization internationally recognized and accepted, who publish official market scans of  Petroleum products Mediterranean on a daily basis.

Execution Date: The date on which the Seller and the Buyer receive their respective faxedcopies of this agreement, or as may be indicated otherwise in The Agreement.

Proof of Product: Documentation to be provided by the Seller to the Buyer through bank to bank.

Whereas, the parties mutually desire to execute The Agreement which shall be binding upon, and to the benefit of, the parties, successors and assigns, in accordance with the jurisdictional law of the negotiated and fully executed contract with terms and provisions hereunder agreed upon.


01. Seller and Buyer, under full corporate authority and responsibility respectively epresent that the Seller is a lawful owner of the commodity, in quantity and quality as hereunder specified, and the Buyer has the full capability to purchase the said commodity.


01.  Russian D2 Gas Oil, having the contractual minimum guaranteed specifications as per Annex "A" herewith attached as integral part of The Agreement.


03.1 The total contractual quantity of the commodity sold and purchased under this Agreement is 14,000,000 MT (Fourteen million Metric Tons) with a variation of +10% (plus Ten percent) at Seller's option on a CIF ASWP.  This specified quantity is nominally equivalent to 1,000,000 MT (One million Metric Tons) monthly supply to be repeated for (12) twelve consecutive calendar months as referred to in Clause 04. Each monthly supply to be nominally 1,000,000 MT (One million Metric Tons)  (Hereinafter referred to as "Monthly Lot").

03.2 The Parties hereby agree to deliver and accept the above quantity in partial shipments,with reference to the provision set out in Clause 10.


04.1 The contracted quantity of 1,000,000 MT ( One million Metric Tons) per month shall be delivered monthly in accordance with the delivery scheduled.

04.2 The first delivery scheduled, commencing within thirty (30) calendar days from the date of the accepted Buyer's payment facility, and ending on conclusion of the contract, and the subsequent delivery schedules, are approved by the loading terminal(s) on a quarterly basis.

04.3 The validity of the allocation assignment as reported in the above Clause 03.1, is subjected to acceptance by the Seller of the Buyer's financial instrument.

04.4 Proof of Product information including:

(a) Copy of License to export issued by the Russian Ministry of Energy;

(b) Copy of Approval to export issued by the Russian Ministry of Justice;

(c) Copy of statement of availability of the product;

(d) Copy of the refinery commitment to produce the product; and

(e) Copy of Charter Party Agreement(s) to transport the product to discharge ports.


05.1 The duration of this contract is for a period of twelve consecutive calendar months under the following terms and conditions:

05.2 The first delivery shall commence within thirty (30) calendar days from the date accepted Buyer's financial instrument.

05.3 The Agreement time period shall commenceto count from the date on which the nominated International Surveyor Company has ascertained the quantity and quality of the first batch discharged at the Buyer's designated discharge terminal facilities.


06. For the full duration of The Agreement, the Seller guarantees that the quality of the product sold will conform to the guaranteed specifications as reported on "Annex A" which constitutes an integral part of this Agreement.


07.1 The price as agreed between the Buyer and Seller shall be CIF for ASWP, Any Safe World Port, and shall calculated as follows:

The means of 3 (three) consecutive quotations as published by McGraw Hill Platt's Bunker market wire scan with the heading CIF CARGOS  MED. SEA for Gas oil 0.2 at the day of Bill of Lading, i.e. the day before, on and after the Bill of Lading less discount: GROSS USD $8.00 per MT NET USD $6.00 to the Buyer.

07.2 The value of the Documentary Letter of Credit, which the Buyer provides to the Seller for the first Monthly Lot, will be counted on the basis of the average market price quotation for 3 (three) preceding the date of DLC issuing and shall thus be automatically revolving to the next Monthly Lot, partial shipment allowed.

07.3 The actual amount of the Product on the subsequent Monthly Lots shall be counted on the basis of the average market price quotation for3 (three) consecutive days around the date of Bill of Lading. Such shall be stipulated in details as per "Annex B" - Payment Term herewith.

07.4 If no Platt's quotations are published for any one of the 3 (three) days, then the 3 (three) preceding consecutive days quotations will be applied.

07.5 If no Platt's quotations are published for the Product on delivering days, the Parties will apply previously 3 (three) days quotations.

07.6 The price referred to throughout this Agreement to be paid in US Dollars (USD) and is fixed for the duration of this Agreement.


08.1 Seller shall establish a 2% Performance Bond issued by a world class bank after receipt of the Buyer's Documentary Letter of Credit. The amount of the Documentary Letter of Credit shall be equivalent to the value of one month's delivery as calculated on the day of execution of this contract around the three day Platt average indicated in this contract.

08.2 DL/C to cover the amount in US Dollars corresponding to the total value of one shipment nominated quantity (Lot).

08.3 Quantity, as assessed at the loading port by the Surveyor Company, and price as determined as per Clause 11.4 of the Agreement, will be used to compute the Seller's invoice.

08.4 The DL/C value shall be determined by the price/quantity of the shipment.

08.5 In the event of any difference between the total amount drawn from the established L/C and the amount corresponding to the total value of the cargo effectively delivered, as assessed at the discharge port, then such difference shall be carried over to the next consecutive shipment.

08.6 On the last month and final delivery of the contract the above mentioned difference shall immediately be settled at sight at the time of payment.

08.7 If payment due date falls on a banking holiday, then payment shall be made on or before the nearest preceding business day to the due date.


09.1. The contract between the Seller and the Buyer is subscribed.

09.2. The Seller provides Proof of Product to the Buyer

09.3. The Buyer's Bank within 2 (two) Banking days following the presentation of the documents referenced: 04.4, shall send to the Seller's Bank Pre advice letter of the readiness to issue an irrevocable, confirmed, transferable, divisible DL/C.

09.4. The Seller's Bank within 5 (five) banking days from the date of Pre-advice letter of the Buyer shall issue the Pre-advice Performance Bond (PB) filled in 2% (two percent) of the amount of the Buyer DL/C.

09.5. Upon receipt of the Pre-advice PB the Buyer's Bank within 5 (five) banking days issues the non-operative DL/C (Documentary Letter of Credit ).

09.6. Seller's bank/Seller shall within 5 (five) international banking days from the receipt of the Buyer's Documentary Letter of Credit issue 2% Performance Bond to activate Buyer's DL/C.

09.7 Each Party hereto will bear its respective banking costs/charges and the Buyer shall arrange and pay the cost of confirmation by a third acceptable bank with full banking responsibility in the event the Documentary Letter of Credit is not issued by a bank in the Top 25 Ranking World Banks.

09.8 Should any amendments to the DL/C be requested once the same has been issued, then the Party requesting the change will be responsible for the payment of the related costs, unless changes are needed to construct the instruments in compliance with The Agreement, then the costs shall be borne by the faulting party. DL/C and performance bond transfer fees for seller's account.

09.9 If the Buyer fails to open DL/C during the period of twenty international banking days after receiving from the Seller Pre-advice PB, they will agree to pay a penalty to the Seller of one million US dollars.

09.10 If the Seller fails to open operative 2% Performance Bond during the period of twenty international banking days after receiving from the Buyer DL/C, they will agree to pay penalty to the Buyer of one million US dollars.


10.1 The Seller warrants to perform delivery of the transacted Commodity on CIF basis to the Buyer's designated discharge port(s).

10.2 Buyer shall specify the discharge port(s) in accordance with the approved quarterly delivery schedule.

10.3 In accordance with provisions set out in the above Clause 043, the Seller and Buyer hereby acknowledge to performing the delivery of each shipment not less than 500,000 MT (Five Hundred Thousand Metric Tons) each and not more than 1,000,000 MT (One Million Metric Tons) each.

10.4 Buyer will have the option to change his designated discharge port, provided that a written notice is given, to the Seller, of at least thirty (30) calendar days prior to the estimated ship's arrival at the former scheduled nominated discharge port.

10.5 Seller to notify the Buyer of the full chartered ship's particulars (general dimensions, cargo system arrangement maximum unloading capacity rate, cargo tanks capacitiesat 98% loaded, manifolds sizes and reductions available on board). This information must be provided to the buyer together with Seller's vessel nomination, so as to assure compliance at the Buyer's discharge port.

10.6 Seller shall ensure timely arrival of the ship to the discharge port in conformity with the approved schedule.

10.7 Vessels chartered by Seller shall in all respects meet port rules and regulations in terms of seaworthiness, fire and common safety, ballast operations, and discharging rates, otherwise, or and any damages caused by non-compliance with such rules and regulations shall be imposed on the Seller.

10.8 Vessel(s) to be acceptable by Buyer and such acceptance shall not be unreasonably withheld. However, the Seller's chartered vessel shall comply with the three Major Oil Company's requirements and shall be TOVALOP/PANDI registered.

10.9 Seller's chartered vessel(s) shall arrive at the loading port with her tanks in a prepared state for fitness and cleanliness inspection.

10.10 The vessel's Master shall advise the Buyer and Ship Owner's Agent at the port of discharge, the ship's ETA 120 hours before her arrival, her name, tonnage, flag, draughts on board quantities, and actual time of arrival 48, 36, 24, and 12 hours before her arrival to the discharge port.



11.1 The Parties mutually agreed that an internationally recognized first class independent Surveyor Company shall be appointed at both designated loading and discharge ports, to assess the quality and quantity of the cargoaccording to the provisions herein stated. The Seller will pay the total inspection fee, as per the surveyor's invoice.

11.2 Quantity and quality assessments, conducted by the appointed Surveyor Company shall be in accordance with methods and procedures usually used in the oil industry practice shall, at all times strictly comply with the revised ASTM/IP International Standards and procedures in force on the date of compliance.

11.3 When converting volumes from observed to standard temperatures, and volumes to weights, ASTM tables, latest revised edition, have to be used.

11.4 The quantity of each shipment of oil shall be assessed by the surveyor at the loading port on completion of each loading operation, on the basis of shore figures, or as otherwise stipulated by Clause 11.5 of the Agreement. This assessed quantity shall be used for computing the amount to be paid to the Seller, applying the price as per Clauses 07, 08.6 and Annex "B" - "Payment Term" in the contract.

11.5 In the event of an inaccuracy with the devices used to measure the quantity received at the discharge port (failure of flow meters, meter banks and / or other devices)then manual shore tank measurement shall be applied. If the Surveyor has reason to believe that the shore tanks are not calibrated in accordance with the ASTM Standards and procedures, then ship's figures TCV (Total Calculated Volume), applied with a valid V.E.F. (Vessel Experience Factor) shall be used to compute the delivered quantity of the current batch. In the event that the Surveyor reports from the loading port does not agree with the Surveyor from the discharge port (per Clause 11.1 herein), the Buyer and Seller shall appoint an independent Surveyor at the expense of the Buyer.


12.1 Seller shall bear the expense to procure a policy with a first class Marine Insurance Institute to cover one hundred and ten percent (110%) of the value of the cargo. The insurance policy will cover all risks or loss or damages to the said cargo, including war, hijacking, explosion, etc, from the time the cargo has passed the ship's manifold flanges at the loading port.

12.2 Marine insurance will cover all risks of loss or damages to the said cargo, including war, hijacking, explosion, etc. until cargo commence to pass the ship's manifold flanges at the discharge port.



13.1 The Seller, in accordance with the provisions set out, will post into the bank nominated by the Buyer a Performance Bond ( PB ) to cover Two percent (2%) of the value of each shipment quantity, revolving for the entire contract period.

13.2 The format of the Performance Bond shall be in accordance with the latest UCP 500 (Uniform Customs and Practice for Documentary Credits, 1999 revision, ICC Publication No .500).

13.3 In the event of non-performance by the Seller, the Seller's PB will be called by the Buyer and the Seller will instruct his bank to issue a new PB, satisfactory to the Buyer, within a period of twenty-four (24) hours from notice of default. Should non-performance continue, the newly issued PB will be irrevocably called by the Buyer, and all payments shall be suspended by the Buyer.


14.1 Should either Party fail to comply with any of their obligations to the other Party related to The Agreement, then the suffering Party will have the option to declare non-performance against the defaulting Party.

14.2 Failure by either Party to take action against the other, in case of the other Party'snon-compliance with obligations or conditions set forth in The Agreement, shall not be interpreted as a waiver to take action for a subsequent non-compliance of the same or other obligations or conditions.


15.1 Any claim(s) of either party has to be submitted to the other party within a period of two (2) months from the date of the occurrence causing the claim. If within thirty (30) calendar days from date of discharge of vessel at the discharge port, the Buyer fails to inform the Seller confirming the non-compliance, the commodity will be deemed to have been accepted by the Buyer and no claim will be accepted by the Seller.

15.2 All claims will be in writing and both Parties agree to acknowledge such claims by written acceptance thereof.


16.1 The Seller shall pay all duties and taxes of any kind whatsoever related to the performance of the agreement and collected up to the nominated loading port.

16.2 The Buyer shall pay all and any taxes, duties, related to the performance of The Agreement and collected beyond the discharge port.


17.1 Neither the Parties shall be liable for failure to perform, any or all of the provisions set out in this Agreement if the performance has been delayed, hindered or prevented by any reason outside the control of the defaulter even though the responsible party exercised due diligence.

17.2 When failure or delay of The Agreement is caused by Force Majeure: such as, Acts of God, strikes, fire, floods, wars (whether declared/undeclared), riots, destruction of the materials, delays of carriers due to break down or adverse weather, perils of embargoes, accidents, restrictions imposed on by any Governmental authority (including allocations, requisitions, quotas and price controls).

17.3 No reduction or suspension in the deliveries or receipt of the Product due to any of the reasons set forth above, shall extend the term of The Agreement or terminate said Agreement. However, either Party to The Agreement may terminate The Agreement by written notice to the other if any of the aforementioned circumstance(s) persist for more than thirty (30) days, without prejudice to any sums owing by either Party to the other Party.

17.4 A certificate issued in original by a competent recognized authority shall be deemed as sufficient proof for the claim of Force Majeure and for its duration.


18. The English law shall govern all matters relating to the validity, interpretation or performance of The Agreement.


19. Notwithstanding Clause 17 herein, in case of failure of the Seller or Buyer to comply with any of the obligations set forth in The Agreement, said non-compliance shall entitle the other Party, without prejudice to any other recourse(s) available to them, to consider such failure as a breach of this contract and to terminate the same, or to unilaterally suspend its performance until such failure is corrected, and in both cases, may claim direct damages for the breach of this contract, to the extent allowed by the terms and conditions of The Agreement.


20.1 All disputes arising in connection with The Agreement shall firstly be settled amicably. Should no agreement be reached by the Parties, then the case shall be brought for final settlement under the rules of Conciliation and Arbitration of the International Chamber of Commerce in London, England by one or more arbitrators appointed in accordance with the said Rules.

20.2 In the event of Arbitration, each Party shall appoint one arbitrator, with a third appointed by an independent party. Nothing in The Agreement shall be construed to prevent any Court having jurisdiction from issuing injunctions, attachment orders or orders for other similar relief in aid of any arbitration commenced (or to be commenced) pursuant to this section. Judgment upon the award rendered by the Arbitrator(s) may be entered in any court having jurisdiction hereof

20.3 Neither Party shall fail to comply in a timely way with the obligations of this part to be performed in pursuance to The Agreement although a dispute has arisen and proceeded to arbitration.

20.4 Findings as assessed by arbitration, will be final and binding on both Parties without any possibility of recourse.


21.1 The Parties having exerted and continue to exert their best effort to avoid any action, which might be in any manner detrimental to the interest of either Party in the negotiation, execution and performance of The Agreement.

21.2 The Parties hereby agree that any conditions that might arise which is not specifically stated if The Agreement will be referred to the general rules of the ICC INCOTERMS Edition 2000 with latest amendments.

21.3 The delivery schedule must include the dates of shipments, name of vessel(s) and the quantity of the Product to be loaded.

21.4 Documents to be provided by the Seller are as follows:

21.4.1 A full set of 3/3 original plus 3 N/N copies of Ocean Bill of Lading made out: "Clean on Board", marked ~ Prepaid". The B/L to be signed in original by the ship's Master showing destination, identification of the loaded cargo with quantity expressed in Metric Tons.

21.4.2 Original quantity and quality certificates plus two (2) copies as issued at the loading port by an independent surveyor company.

21.4.3 Certificate of Origin plus two (2) copies countersigned by the Chamber of Commerce of country of origin.

21.4.4 Signed commercial invoice, based on the delivered quantity/quality as determined by Clause 11.4 of this contract.

21.4.5 Any other documents pertaining or related to the current trip, duly signed by the authorized persons, and as required by the documentary letter of credit.


22.1 The Parties hereby agree on a quarterly delivery schedule specifying the lay can's at

Buyer's designated discharge port(s) per each single batch to be delivered.22.2 Every fifteenth (15th) day of the third (3rd) month of the current quarter, the Seller shall forward to the Buyer the next quarterly delivery schedule which shall be agreed upon by the parties, except as may be in conflict with The Agreement.

22.3 Lay can's at the Buyer's designated discharge port(s) to be fixed with three (3) days range.


23.1 Buyer warrants that Seller's nominated vessel(s) will be allowed to discharge her cargo within Twenty Four (24) free running hours SHINC, plus six (6) hours NOR, and however, maintaining at the ship's manifolds an average discharge pressure of not more than ten (10) kilograms per square centimetre (Kg/m2).

23.2 Notice of readiness (N.O.R) shall be given to the Buyer and / or agent, on ship's arrival at the Buyer's designated discharge port(s) by the ship's Master by radio, cable or by hand, at any time including Saturdays, Sundays and holidays.

23.3 Lay time shall commence upon the expiration of six (6) hours after tender of notice of readiness, or upon vessel being all fast in berth, whichever is earlier.

23.4 Time spent for customs/health/port authority formalities, pilotage from anchorage area to berth, mooring, or crossing river mouth, shall not to count as lay time.


24.1 Demurrages at both load and discharge ports, if any and if not caused by Buyer's nominated discharge terminal, will be paid by the Seller to the Buyer at sight, at first and simple written request. Conversely, if demurrages have been caused by the Buyer's discharge terminal then the corresponding amount shall be borne by the Buyer to be paid to the Seller at sight, at first and simple written request.

24.2 Demurrage amounts shall be computed at the Chartered Party Agreement rate. For this purpose, Seller shall provide the Buyer with a copy of the original Charter Party Agreement.

24.3 Demurrages will be based on daily rate or pro-rata thereof.

24.4 If the vessel arrives at the discharge terminal ahead of the range of days in accordance with Clause 22.3, such notice shall only be effective as from 00.01 hours on the first of these days, unless the discharge terminal begins to discharge the vessel before such time. In the case of a vessel arriving later than the range of days accepted, the discharge terminal will use its best efforts to minimize the delay to discharge. However, in such case, lay time will only start to count upon the vessel being all fast in berth.


25.1 In the event the Seller is not able to deliver the Buyer the full set of original of document for each Monthly Lot in due time, the Seller will then has to provide to the Buyer with a hard copy of a Letter of Indemnity of temporarily missing original.

25.2 The wording of this Letter Of Indemnity shall be agreed as per "Annex C" herewith attached as integral part of this Agreement and shall cease to have effect upon presentation of the original Bills of Ladings.

25.3 In the event of unusual circumstances, which prevent the Seller from presenting to the Buyer the original bills of lading within in a sixty (60) day period, the Seller agrees to provide the Buyer and the Buyer agrees to accept a second and subsequent letter of indemnity covering the cargo batch in question.


26.1 The Parties may assign this contract or its total or partial performance hereof to any other Company which assumes the obligations of the Seller/Buyer under the terms of the assignment and as agreed by the Seller or Buyer. Formal notice of the assignment shall be rendered to the Buyer/Seller, expressly indicating thereon the assignee's full contact particulars.

26.2 The Agreement contains the entire understanding between the Parties with respect to the transactions contemplated herein and can only be amended by written agreement. Any prior agreement, written or verbal, shall be superseded by The Agreement.

26.3 The Agreement may be executed simultaneously in two (2) or more counterparts,each of which shall be deemed to be an original.

26.4 The articles and other headings in The Agreement are for convenience only and shall not be interpreted in any way to limit or change the subject matter of The Agreement.

26.5 All signed appendices, annexes and supplements shall constitute an integral part of The Agreement.

26.6 Conditions that have not been specified in the present contract shall be governed by INCOTERMS and subsequent amendments related to CIF basis to designated discharge port.

26.7 Electronic document transmission (EDT) shall be deemed to be valid and enforceable in respect of the provisions of The Agreement.  Either Party shall be allowed to request a hard copy of any previous electronic transmitted document.

26.8 Grammatical mistakes, typing errors, if any, shall not be regarded as contradictions. contradictions.

26.9 Any information contained herein shall be kept confidential, and shall not be subsequently disclosed to third parties or reproduced in any way, except to third parties who are necessary to the implementation of The Agreement.

26.10 If the said DL/C did not establish in favour of Seller within a grace period of 5 (five) banking days after the date of signing the Sales and Purchase Agreement (SPA) by both Parties, then the said Agreement deemed to be null and void and validity expires automatically.





Legally represented by:





Legally represented by:






Acc. Name :

Acc. No. :


Tel. :

Fax :

Bank officer:






Acc. Name :

Account No. :


Tel. :

Fax :

Bank Officer:



29. The Agreement is compiled in two originals of twelve(12) pages plus three (3) annexes, totalling fifteen(15) pages, with each party retaining one original. Until the exchange of originals, the Parties agree the signed stamped copies of the Agreement will be in full force and effect.




Date: March _____, 2003



Date: March ______, 2003



Annex "A"


GOST 305-82


Density @ 20 C

Colour Flash Point,

PMCC Kinematic Viscosity @ 20 C

Pour Point

Cloud Point

Mercaptan Sulphur Acidity, mg/1000cm3

Iodine Number

Ash Total

Sulphur Copper Corrosion (3hrs @ 50 C)

CCR on 10% residues

Cetane Index Distillation Range: 50%

Recovered Volume 90%

Recovered Volume Bacteria MBC

Bacteria CFU Kg/m3 C Cst C C

g/100g % wt % wt % wt C C

Fibre/lt Fibre/lt 57 3.0 (*) (*)

0.2 (typical) 45 0.870 2.0 62 6.0 -10.0 -5.0

0.01 5 6 0.01 0.5 1A 0.20 280 360 500 1000

(*) Summer from March to October (PP -5.0 C)

CP 0 C)

Winter from November to February

(PP -10.0 C)

(CP -5.0 C)

Annex B


The Parties (The Seller and The Buyer) hereby have agreed on the following "Payment Terms."

1. The Buyer shall guarantee the payment for the Product/Goods by providing the Seller with an Irrevocable, Transferable, Divisible, Revolving and Confirmed Documentary Letter Of Credit issued and confirmed by current Ranking World Top 25 Bank.

2. The amount of the Letter Of Credit shall cover the total amount (in US Dollars) of a Monthly Lot 1,000,000 MT (One million Metric Tons) of the Product.

3. The amount of the LC shall be computed on the basis of the following formula:

LC=(P-D)*Q, where:

LC : denotes the value of the LC

Q : denotes the monthly quantity.

P : denotes the price obtained as per

Clause 07 of the present Agreement.

D : denotes the agreed net discount as per

Clause 07 of the Agreement.

4. The total amount of the Product (expressed in US Dollars) delivered under the present Agreement is to be calculated by addition of the values (expressed in US Dollars) of each cargo's lot. The actual value/amount (expressed in US Dollars) of one cargo's lot (single loaded batch) is to be calculated on the basis of the following formula:

V=(P-D)*Q, where:

V : denotes the value of the single shipment of freight.

Q : denotes the quantity of a single shipment of freight.

P : is the price of single shipment of freight calculated according to Clause 07 of the present Agreement.

D : denotes the agreed net discount stipulated as per Clause 07 of the present Agreement.

5. The Parties shall calculate the actual cost (in US Dollars) of the Product delivered

on the completion of every Monthly Lot, which shall be assumed as lot of delivery.

6. The Parties have agreed to the following:

The face value/amount of DLC issued by the Buyer to the Seller shall have to cover the first monthly volume (expressed in US Dollars) of Product 1,000,000 MT +10% (One million Metric Tons plus ten percent). If the total face value of the DLC issued by the Buyer does not cover the monthly volume (expressed in US Dollars) of Product the current month more then ten percent (10%), then the Buyer shall promptly provide DLC in favor of the Seller to make up for the shortage.  The Buyer shall issue the DLC value for the first Monthly Lot and is to be automatically revolving to the next Monthly Lot for the entire 12 month contracted quantity.  If the total value/cost (expressed in US Dollars) of the actual delivered Product (according to the assessment at the loading port) over within the current month is less than the DLC amount, this difference will be delivered by the Seller in addition to the following quarter value or Monthly Lot.At the final month of the delivery under the present Agreement, the Parties shall reconcile the difference between the total amount (in US Dollar) of the DLC value issued by the Buyer and the total volume (expressed in US Dollars) of the delivered Product after the last delivery. Such difference shall be paid by the actual debtor at sight at the time of payment or with five (5) banking days from the date of payment under the final DLC.

Annex C


We refer to cargo of 1,000,000 Metric Tons of GAS OIL D2 discharged on board the vessel ____________at the port of ______________ (Destination Port, Country) pursuant to Bill Of Lading dated ________________.Although we have sold and transferred the said cargo to you, we have been unable to provide you with the full set original Bill Of Lading and other shipping documents covering the said sale.In consideration of ____________ paying for your account to us the full purchase amount of USD ____________ (United States Dollar ___________________), we hereby expressed warrant that we have marketable title, free and clear of any lien or encumbrance to such material and that we have full right and authority to transfer such title and effect delivery of such material to you.We further agree to make all reasonable efforts to obtain and surrender to you as soon as possible the full set original Bill Of Lading and other shipping documents, and to protect, indemnify and save you harmless from and against any and all damages, costs and expenses which you may suffer by the reason of the originals Bill Of Lading and other shipping documents remaining outstanding, or breach of the warranties given above including, but not limited to any claims and demands which may be made by a holder or transferee of the original Bill Of Lading and other usual shipping documents, or by any other third party claiming an interest in or lien on the cargo or proceeds thereof.This indemnity shall be governed by and construed in accordance with the English Law and all disputes, controversies or claims arising out or in relation to this indemnity or the breach, termination or validity thereof shall be decided by English courts.This letter of indemnity shall be expire upon tendering the original Bill Of Lading and other shipping documents issued in conformity with the terms and conditions of Letter Of Credit number _____________ issued from ___________________________.

Yours Sincerely,


Zenath Oil USA