123

Buyers ref code: .......................Sellers ref code: ........................

COAL SALE AND PURCHASE AGREEMENT

THIS AGREEMENT is made on this ….. August, 2012

BETWEEN :

AND : (hereinafter referred to as "Seller") on the other part

Both Buyer and Seller have been collectively referred to as “Parties” and individually as “Party” as the context may require.

Whereas,

Buyer is engaged in the coal trading business.

Seller is involved in the business of mining and supplying coal.

Pursuant to the discussions and negotiations conducted between the Parties in this regard, the Buyer agrees to buy and the Seller agrees to sell steam coal on such terms and conditions as provided in this Agreement.

NOW, THEREFORE, in consideration of the mutual premises and covenants set forth herein and for good and valuable consideration, this Agreement witnesseth and it is hereby agreed to by and between the Parties as follows:

1.0 DEFINITIONS

In this Agreement, unless the context otherwise requires, the following terms shall respectively have the following meanings:a) “Applicant” means the buyers entity instructing its bank to issue a form of LC in

favour of a beneficiary as payment a) “Beneficiary” means the party for whose favour a financial documentary

instrument is issued. b) “Steam Coal”, means Coal that meets the specifications set forth in this

Agreement.c) “Designated Vessel” means the specific vessel as nominated by the Buyer and

approved by the Seller as provided in Article 7 below.d) “Discharge Port” means any port(s) nominated by the Buyer.e) “DL/C” means Documentary Letter of Credit issued from top 50 International

Prime Bankf) “Dollars”, “US Dollars”, “USD”, “US$”, “$”, “Cents” where used shall refer to the

currency of the United States of America.g) “FOBT” means Free on Board and Trimmed in accordance with Incoterms 2010.h) FOB means Free on Board

1


i) “KYC” know your client transparency disclosures j) “LC” means Letter of Credit issued from top 50 International Prime Bankk) “NCV” means Net Calorific Value.l) “ISO” means “International Standards Organisation”.m) “Kcal” means Kilocalorie (s) as defined in the “International System of Units”n) “Kg” means Kilogram (s) as defined in “International System of Units”o) “mm” means Millimetre as defined in “International System of Units”p) “RBCT” means Richards Bay Coal Terminal, South Africa.q) “RC-LC” means a Documentary Letter of Credit with a Red Clause issued from top

50 International Prime Bank, providing for advance drawing/s to a beneficiarys) “Ton (s), “Tonne (s)”, and “MT” means metric tonne of 1,000 Kgs as defined in

“International System of Units”. t) “arb” means as received basisu) Inspectorate – M&L is the Seller’s appointed laboratory at RBCT

2.0 TERM OF AGREEMENT

2.0.1 The Parties hereby agree that the term of this Agreement shall commence from the date of signing of this Agreement and shall continue until the sale and delivery of the agreed quantity under this Agreement has been completed in terms of this Agreement. It shall remain in effect until terminated by either Party upon thirty (30) days prior written notice; provided, however, that such termination shall not affect or excuse the performance of any Party under any provision of this Agreement that by its terms survives any such termination, and this Agreement and any relevant Confirmations shall remain in effect with respect to any Transaction(s) entered into on or prior to the date of the termination until each Party has fulfilled all of its obligations with respect to all such Transaction(s). It shall remain in effect until terminated by either Party upon thirty (30) days prior written notice; provided, however, that such termination shall not affect or excuse the performance of any Party under any provision of this Agreement that by its terms survives any such termination, and this Agreement and any relevant Confirmations shall remain in effect with respect to any Transaction(s) entered into on or prior to the date of the termination until each Party has fulfilled all of its obligations with respect to all such Transaction(s).

The Buyer agrees to purchase the Steam Coal from Seller on FOBT basis (INCOTERMS 2010).

Marine insurance to be covered and paid by the Buyer. The Seller, for this purpose, shall immediately ( within two working days) on completion of loading intimate to Buyer by e-mail the quantity of the material loaded on board the vessel, estimated value of material before adjustment, Bill of Lading date, date of sailing of the vessel.

3.0 COMMODITY AND AGREED QUANTITY

3.0.1 Commodity: South African Steam Coal in bulk3.0.2 Port of loading: Richards Bay Coal Terminal, South Africa

2


3.0.3 Origin: South Africa3.0.4 Agreed Quantity: 1,800,000 tons in shipments of 150 000 MT +/- 10% at Buyer’s

Option x 12 months – 1st shipment to be a trial cargo satisfactory to both Buyer and Seller.

3.0.5 The ‘Buyer’ for the purpose of ‘end user’ disclosure herein states, the commodity it purchases from the ‘Seller’ will be for delivery to India, further in case of commodity re direction by the ‘Buyer’, the commodity would not be at any time delivered to a country listed as embargoed by United States, United Kingdom, Irish Republic and South Africa and also those not contrary to any economic sanctions imposed by the United Nations.

4.0 SPECIFICATIONS

The quality of Coal to be supplied under this Agreement shall be as per following specifications as per ISO Standard, unless otherwise specified:

Description Typical RejectionNet Calorific Value (As received) 6000 Kcal/Kg Below 5850 Kcal/KgTotal Moisture (As received) 8% 12% Moisture in Analysis Sample (Air dry)

3 – 4 % --

Ash (Air dry) 15% Above 17%Volatile Matter (Air dry ) 22%-28% Below 21% – Above

30 %Sulphur ( Total) (Air dry) 0.60% Above 1.0%Fixed Carbon (Air dry) By difference --HGI (Hard Grove Grindability Index)

45 – 65 --

Nominal Top size 50 mm --Ash Fusion Temperature (Reducing)Deformation temperature

+1300 deg C--

4.0.1 If the quality of loaded Steam Coal as determined at the loading port pursuant to Article 8 is subject to the rejection limits as specified in Clause 4.0 (Specifications) the Buyer shall have (in addition to other rights the Buyer may have under this Agreement and by operation of the law) the right to reject the entire shipment. In the event that the quality is subject to the rejection limit as specified in Clause 4.0, the Buyer may at its sole discretion accept the Steam Coal if the Buyer judges that the said Steam Coal can be used by the Buyer and if both the Parties reach an agreement to a price adjustment thereof. If the Parties cannot reach agreement on a suitable price adjustment (before the cargo is discharged), Seller will have an option to redirect the Designated Vessel to an alternate destination for unloading subject to Designated Vessel owner’s agreement at Seller’s cost. If the vessel cannot be diverted, the Seller shall be responsible for the cost of ocean freight as per governing Charter Party from load port to discharge port and for making

3


arrangements to discharge the cargo at its own cost and the Buyer shall provide the Seller with all reasonable assistance which the Seller may request.

If the Buyer fails to exercise timely its rejection rights, the Buyer shall be deemed to have waived such rejection rights with respect to that shipment only. The Buyer’s failure to exercise such rejection rights shall not constitute waiver of rights to any price adjustments provided herein.

4.0.2 If, in accordance with the terms hereof, a shipment is subject to being rejected, the Buyer shall have no obligation to unload the Designated Vessel at designated port and shall not be liable for any cost or consequences arising from such rejections.

5.0. PRICE AND PRICE ADJUSTMENT

5.0.1 Price: The FOBT price of the Steam Coal, subject to the provisions of Clause 5.0.2, will be based on RBI index less 3 USD discount per metric ton. This discount includes 2 USD for commission.

5.0.2 Price Adjustment on Quality:

The quality determined and certified by INSPECTORATE M&L at Load port is final and binding on both Parties. Price adjustments, if any, will be only on NCV (arb) on the FOBT price of the cargo and the invoice to show relevant price adjustment calculation as per following formula:

If the actual NCV (arb) is above / below 6,000 Kcal/Kg, the base price shall be adjusted, fractions pro rata as per the following formula:

Actual NCV as per load port analysis in Kcal/kgAdj. FOBT Price = Price X ---------------------------------------------------- 6000 kcal/kg

In case actual NCV (arb) is below 5850 Kcal/Kg the buyer has a right to reject the cargo.

6.0 SHIPMENT

The agreed quantity for the first, trial shipment shall be loaded into a vessel at the Load Port with a Lay Can during October 2012; the Lay Can spread to be 14 days.

For each delivery by vessel the Seller shall supply the Buyer with a shipping notice which shall include the vessel name. Notwithstanding the obligations to send shipping notices, the Seller is to make Commercially Reasonable Efforts to send any such notices. The Seller shall, as soon as is reasonably possible, notify the Buyer of any loading deficiencies or delays in loading via telephone or other electronic means with confirmation in writing.

4


If a scheduled Shipment fails to load as scheduled despite the Parties’ Commercially Reasonable Efforts to arrange and receive such Shipment, the Parties shall make Commercially Reasonable Efforts to reschedule the Shipment to a future load date which is on or before the later of (i) __ days after the originally scheduled Shipment date or (ii) the last day of the originally scheduled delivery month. If a specific Shipment was scheduled for a delivery month, but not for a specific date within the month, the Shipment will be presumed to have been scheduled to load on the last day of the month. In the event the Shipment cannot be rescheduled to a load date within such time period and the Parties cannot agree upon a future load date during the Term, or otherwise, such Shipment will be subject, if the Parties mutually agree in writing, to re scheduling by the Affected Party, as the case may be, pursuant to such terms as the Parties agree in order to discharge some or all of the obligation to pay damages

7.0 SHIPPING TERMS

a) Scale load at RBCT according to parcel size as per current RBCT regulation.

b) Buyer to nominate the Designated Vessel with full description for approval of the Seller in accordance with RBCT regulations. RBCT decision regarding Designated Vessel acceptance shall be final and binding.

c) The RBCT Shipping Regulations are deemed to be incorporated into this Agreement as if set out in full. In the event of a conflict between the terms and conditions of this Agreement and the RBCT Shipping Regulations, the RBCT Shipping Regulations shall prevail to the extent of such conflict.

d) Demurrage / despatch rate as per relevant charter party in line with prevailing market rates to be advised at time of nomination of the performing Designated Vessel.

e) Any taxes, duties or levies on the cargo at the Discharge port are to be for the account of the Buyers.

f) All export taxes, levies, dues etc. on the cargo loaded on the Designated Vessel at the Port of Loading shall be for the Seller’s account.

8.0 INSPECTION, SAMPLING AND ANALYSIS Sampling and analysis to be carried out according to relevant I.S.O Standards.

The sample shall be divided into three (3) representative parts to provide

One (1) sample for shipment analysis One (1) sample for the Buyer to be despatched by courier as soon as possible.

5


One (1) umpire sample which shall be retained by Sellers appointed Laboratory at RBCT in suitable airtight containers, properly sealed and labelled, until sixty (60) consecutive calendar days after each Bill of Lading

Sampling and analysis to be done by INSPECTORATE M&L at RBCT. INSPECTORATE M&L shall issue a certificate of sampling and analysis indicating specifications of Clause 4.0 as well as ash mineral analysis. Cost of sampling and analysis to be on Seller’s account.

Certificate of Sampling & Analysis issued at load port by INSPECTORATE M&L shall be final & binding on both Parties.

9.0 DETERMINATION OF QUANTITY

Quantity determination shall be made by draft survey by an independent surveyor at RBCT nominated by Seller. The cost of such survey shall be for Seller’s account. The surveyor shall issue a certificate of weight which shall be final & binding on both Parties and shall provide the weight shown on the Bill of Lading and on the Seller’s commercial invoice.

10.0 PAYMENT TERMS

Buyer to open a confirmed, irrevocable, Documentary Letter of Credit (DL/C) in favour of Resources Ltd payable at sight in U.S. Dollars for 100 % of the value in a form acceptable to Seller, (see attached LC Wording ICC UCP/600) through a prime bank acceptable to Seller no later than seven (7) working days after the signature of this agreement. The L/C will allow the Seller’s bank, provided it is a correspondent of the Issuing Bank, to add its confirmation, with confirmation charges for the Seller’s account.

The LC amount will be based on the FOB RBCT price for 150,000 tons.

The L/C will allow underdrawing or overdrawing in case of price adjustment as per clause 5.0.2. and be balanced out in final payments remaining from within the RC-LC hereon mentioned below.

The Uniform Customs and Practice for Documentary Credits, 2007 Revision, ICC Publication no. 600 ("UCP") will apply and be binding on all parties thereto.

Payment against RC-LC will be against the following documents;

Provisional Commercial Invoice based on the BL weight Full set of 3/3 original clean on board Bills of Lading issued or endorsed to the order

of xxxxxxxxxxx Certificate of Origin issued by Chamber of Commerce, in South Africa. Certificate of sampling and analysis issued by the Laboratory at the Load Port Certificate of weight issued by the independent marine surveyor

6


Certificate of Holds Cleanliness issued at load port Certificate of Draft Survey issued at load port by an independent surveyor

A copy of all the above documents to be sent by e-mail to the Buyer by the Seller within 5 (five) working days after Bill of Lading date.

The Seller shall send by email a shipping advice within 3 working days from Bill of Lading date indicating Bill of Lading date and number, quantity loaded and ETA next discharge port.

11.0 BUYERS AND SELLERS INSTITUTIONS

The banks hereon on described are the institutions that both parties intend utilising in way of applicant and beneficiary, for the purpose of understanding and identifying each parties suitability. Full banking details are to be provided within 48hrs of this contract being mutually signed by Seller outlining its bank details in its Pro Forma Invoice to the Buyer. The Buyer will within the same 48hrs provide its full issuing and negotiating / correspondent bank details to the Seller in advance of any DL/C [RC-LC] being issued.

BUYERS RC-LC ISSUING BANK IS;

Name of Bank : Branch Street address : S.W.I.F.T. Code : Account Name :

BUYERS NEGOTIATING BANK [CORRESPONDENT] IS;

Name of Bank : Branch : Street address : S.W.I.F.T. Code : Account Name :

SELLERS [BENEFICIARY] BANK IS;

The Seller maintains its option to decline a Buyers nominated bank if the origin of the cash backed documentary credit is not AAA, AA, A+ or Bbb at minimum. Further the negotiating / correspondent must be a top 50 rated Prime bank that is providing the DL/C [RC-LC] to the Seller’s bank, which must be likewise AAA, AA, A+ or Bbb at minimum. The Seller may accept lower rated institutions at the buyers cost for the additional difference of the factoring risk.

7


12.0 ATTACHMENTS TO CONTRACT KYC

The Buyer will [1st] provide all previous KYC documents at the time of contract signing in its original form, and will be included as Pre Sales KYC documents for the Sellers legal responsibility. Likewise the Buyer will retain the Sellers Pro Forma Invoice received within 48hrs of the signing of this contract, outlining complete corporate details and banking information.

13.0 ANNEXURE[S] TO CONTRACT

When this contract after signing and notarising, any amendments to this will be in a numbered document as an annex. Any such annexure will be identified with the Buyers ref code and the Sellers ref code. Any documentation excluding these mentioned codes will not be recognised as an annex or part of this contract and its obligations in any way.

14.0 Taxes and Duties

The Buyer shall be solely responsible as to any Transaction for Third Party Impositions relating to the Coal accrued or levied at or after the transfer of title of the Coal to Buyer, including, but not limited to, sales or use tax if applicable.

15.0 TITLE/RISK

Title to the cargo delivered and sold hereunder shall pass to the Buyer upon receipt of payment by the Seller of the price in full.

Risk in the Coal will pass to the Buyer as the Steam Coal passes the Designated Vessel's rail at the port of shipment.

16.0 FORCE MAJEURE

A “Force Majeure Event” means any event, act, omission, circumstance or cause, which is beyond the control of the Parties , as the case may be, which they could not foresee or which, with a reasonable amount of diligence, could not have been foreseen and which wholly or partly prevents or delays a Party from performing its obligations, such as:

a) Natural phenomena, including but not limited to floods, droughts, earthquakes and epidemics;

b) Acts of any Government, domestic or foreign, including but not limited to war, declared or undeclared priorities, quarantines, embargoes;

c) Accidents such as fire and explosions;d) Riots and civil commotionse) Act of God (such as, but not limited to, fires, explosions, earthquakes, drought,

tidal waves and floods);

8


f) War, hostilities (whether war be declared or not), invasion, act of foreign enemies,

g) Mobilization, requisition, or embargo; h) Rebellion, revolution, insurrection, or military or usurped power, or civil war; i) Contamination by radio-activity from any nuclear fuel, or from any nuclear

waste from the combustion of nuclear fuel, radio-active toxic explosive, or other hazardous Properties of any explosive nuclear assembly or nuclear component of such assembly;

j) Acts or threats of terrorism. k) Acts or Actions of any Government, domestic or foreign and which has a binding

effect on the Parties

A Party affected by a Force Majeure Event (the “Affected Party”) shall notify the other party in writing of such facts as soon as is reasonably practicable, indicating the nature of the Force Majeure Event and its effect. The Affected Party shall use reasonable endeavours to avoid the effect of the Force Majeure Event, if it is possible to do so, but shall be under no obligation to resolve any strike, lock-out or other industrial or labour dispute (whether it is a party thereto or not) or to change its performance obligations hereunder. The Affected Party shall promptly notify the other Party in writing when the Force Majeure Event, or its effects, cease to affect performance by the Affected Party.

Neither Party shall be liable, in any way whatsoever for a failure to perform its obligations under this Agreement, and non-performance shall be excused to the extent that such performance is prevented, reduced, delayed, interrupted, or otherwise affected by a Force Majeure Event. During the persistence of a Force Majeure Event, all deliveries or receipts of Steam Coal may be reduced or suspended without liability or penalty. Coal not delivered or received during the existence of a Force Majeure Event shall only be replaced or rescheduled by mutual written agreement of the Parties.

Should a Force Majeure Event or its effects last for a consecutive period in excess of 60 days, then either Party may, on giving 7 days prior written notice to the other Party, terminate this Agreement without liability or penalty. Such termination shall be without prejudice to any rights or obligations which may have arisen prior to a Force Majeure Event giving rise to the determination.

Notwithstanding that an event of Force Majeure otherwise exists the provisions of Article 12.0 shall not excuse late payment of money owed (for example the payment related to Coal delivered or demurrage before the occurrence of a Force Majeure event).

17.0 ARBITRATION

It is expressly agreed by and between the Parties that:

9


17.0.1The Agreement shall be interpreted, construed and governed by the Laws of the Republic of Ireland

17.0.2 Except as otherwise provided herein, if any dispute or difference of any kind whatsoever (a "Dispute") shall arise between Buyer and Seller in connection with, or arising out of, or relating hereto or the breach, termination or validity hereof, Buyer and Seller shall attempt in good faith, for a period of thirty (30) days after the receipt by one Party of a notice from the other Party of the existence of the dispute, to settle such Dispute in the first instance by mutual discussions between the Parties.

17.0.3 If the Dispute cannot be settled within thirty (30) days by mutual discussion, the dispute, controversy or claim arising out of or relating to this contract, or the breach thereof, shall be determined by arbitration administered by the International Centre for Dispute Resolution (Dublin International Arbitration Centre, Distillery Building 145-151 Church Street, Dublin 7 Ireland) in accordance with its International Arbitration Rules. The number of arbitrators shall be one. The place of arbitration shall be Dublin, Ireland. The language of the arbitration shall be English.

17.0.4 During the pendency of any arbitration the Parties shall continue to perform their respective obligations hereunder unless the matter is such that the performance cannot be possibly continued until the decision of the arbitrator is obtained.

18.0 NOTICES

Any and all commercial communications by either Party to the other under the provisions of this Agreement shall be made by fully disclosed and pre-arranged air-mail or by e-mail each with alternatives provided. All such communications shall be deemed given upon the specific receipt which is common for any of the above mentioned means of transmission. Formal notices under this Agreement such as termination, assignment, arbitration, etc. shall be given by Air Mail or e-mail at the address/number given below:

BUYER :

SELLER:

10


In the event that any formal notices are given by e-mail, a copy of the notice shall also be sent by Air Mail within 24 hours of the notice being having been sent by e-mail.

All notices and other communications shall be presumed to have been served:

(1) if personally served - on the day of service.(2) if mailed or couriered - on the 10th day after posting or despatch.(3) if sent by e-mail - on the date of transmission by the Party subject to confirmation copy to be sent to the addressee by Air Mail.

Either Party hereto may change its address by giving notice of such effect to the other Party.

If the day on which such notices or other communications as aforesaid are by this Clause deemed to have been received falls on a Saturday, Sunday, or a day which is a public holiday in the intended place of receipt then the notice or other communication aforesaid shall be deemed to have been received on the day next following which is not a Saturday, Sunday or public holiday aforesaid.

19.0 MISCELLANEOUS

19.0.1 No waiver - Except as herein otherwise specifically provided, the failure of either Party to insist on strict performance of any provisions of the Agreement, or to take advantage of any right hereunder, shall not be construed as a waiver of such provisions or right of subsequent performance thereof.

19.0.2 Captions - The captions to Clauses hereof are for convenience only and shall not be considered in construing this Agreement.

19.0.3 Amendments - The Agreement cannot be changed except by written instrument duly signed by both Parties or by legally authorized representatives of both Parties.

19.0.4 Severability - Any provision or any part of any provision in this Agreement, which is illegal, void or unenforceable, shall be severable provided that the rights and/or obligations and/or liabilities of the Parties hereunder are not substantially altered thereby. Following any such severance this Agreement shall be read & construed as if such severed provisions were not contained herein.

19.0.5 Indemnity - The Seller shall not be liable for any damages or compensation payable at law in respect of or in consequence of any accident or injury to any person in the employment or contract, sub contract service of the Buyer. The Buyer shall indemnify and keep indemnified the Seller against all such damages and compensation, and against all claims, proceedings, costs, charges and expenses whatsoever in respect thereof or in relation thereto. This shall include also namely its chartered vessel operations at port regarding its workforce and its presence in the case of calamity, accident involving spills and environmental damages.

11


19.0.6 Entire Agreement - This instrument contains the entire agreement between the Parties in relation to the sale and purchase of Steam Coal hereby agreed to be sold and purchased and supersedes all prior negotiations, understandings and agreements, whether written or oral, in relation to that Steam Coal. The Parties shall be bound only by the express provisions of this Agreement and documents executed in the future by duly authorized representatives of the Parties.

19.0.7 Confidentiality - Both the Parties warrant that this Agreement will be treated in total confidentiality.RELATIONSHIP OF PARTIES - Nothing contained in this Agreement shall be deemed to create any partnership, joint venture, employment between the Parties hereto. The Parties shall have “Principal to Principal” relationship.

19.0.8 Representations - Both parties represent that to the best of their knowledge at the date hereof this Agreement does not contain any untrue statement of any material fact and the performance of or compliance with the respective obligations under this Agreement do not violate or exceed any power or restriction granted or imposed by any law to which it is subject to or violate any of the provisions of any agreement, arrangement or understanding, oral or written, entered into by it / him with any third party. The representations specified in this Clause shall survive following the execution of this Agreement. If the representations made by one of the Parties are found to be untrue and cause the other Party to suffer any financial loss, the suffering Party shall be entitled to terminate this Agreement and claim all damages and costs so incurred from the other Party.

19.0.9 Warranties - All warranties or conditions which would but for the terms of this Agreement be implied by statute or otherwise (including without limitation, any warranty or condition relating to description, satisfactory quality, merchantability or fitness for purpose) are excluded to the extent permitted by law.

19.0.10 Damages - Each Party's liability hereunder shall be limited to direct actual damages only, such direct actual damages shall be the sole and exclusive remedy and all other remedies or damages at law or in equity are waived. Unless expressly provided in this Agreement, neither party shall be liable for consequential, incidental, punitive, exemplary or indirect damages, lost profits loss or production or other business interruption damages, by statute, in tort or contract, under any indemnity provision or otherwise. It is the intent of the parties that the limitations herein imposed on remedies and the measure of damages be without regard to the cause or causes related thereto, including, without limitation, the negligence of any party, whether such negligence be sole, joint or concurrent, or active or passive.

ASSIGNMENT

This Agreement shall inure to the benefit of and be binding upon the successors of Seller and Buyer, but this Agreement shall not be assigned or transferred by Seller or Buyer in whole or in part, either voluntarily or otherwise, without the written consent of the other Party being obtained first.

12


IN WITNESS WHEREOF both Parties have caused their duly authorized representatives to execute this Agreement.

Signed at______________for & on behalf of BUYER on _____ August, 2012

___________________Company Seal

Witness 1: …………………………………………………...

Signed at --------------- for & on behalf of SELLER on _____ August, 2012

___________________

Witness 2: …………………………………………………...

13

123

Documents

Transcript of 123