Document:

f8k07110ex10i_worldvest.htm

 

Exhibit 10.1

 

 

 

CONTRACT FOR SALE AND PURCHASE OF COMMODITIES

 

Contract No. WVH-1007

 

Date: July 1, 2010

 

	
Seller:

 

	
WorldVest, Inc. dba WorldVest Hurricane Resources

295 Madison Ave, 12th Floor

New York, NY 10017

Garrett K. Krause, Chairman and CEO

Tel:  +1-310-880-8233

Fax:  +1-310-919-3116

 

	
Buyer:

	
Tianjin Metallurgical No.1 Iron & Steel Group

928 Dagu South Road, HeXi

District Tianjin, PRC

Li Gouren

Tel:  +86-22 88264382

Fax:  +86-22 88264382

 

THIS CONTRACT FOR SALE AND PURCHASE OF COMMODITIES (the “Agreement”) and all subsequently accepted SUPPLIER ADDENDUM’S (the “Supplier Addendum”) are entered into among WorldVest, Inc. dba WorldVest Hurricane Resources (the “Seller”) and Tianjin Metallurgical No.1 Iron & Steel Group (the “Buyer”), whereby Buyer agrees to buy and Seller agrees to sell the under-mentioned commodities on the terms and conditions stated in this Agreement and each Supplier Addendum attached to this Agreement.

 

WHEREAS this Agreement will be structured in two official parts: (i) The Agreement, which will outline the general terms and conditions of the Agreement between the Buyer and the Seller; and (ii) The Supplier Addendum’s, which will outline the details from various commodities sourced by the Seller and offered to the Buyer under this agreement.  This agreement will also include commodities to be provided directly through WorldVest Hurricane Resources, and/or its subsidiaries and joint ventures, which has begun to acquire and develop a series of minerals reserves through several Global Mine Development Partnerships with initial targets located in Chile, Mexico and Brazil.

 

It is agreed that this Agreement will represent an official Contract for Sale and Purchase of a Commodity, subject to the addition of a seller accepted Supplier Addendum, which will provide all details of the Commodity supply (See Sample Supplier Addendum Attached to this Agreement).

 

Each Supplier Addendum will be officially attached to this Agreement through the following approval process:

 

	
i.  

	
  Seller will provide Buyer with a Supplier Addendum for Commodity along with the following information: type of commodity, period and quantity, specifications, price, payment terms, documentation, possible shipping terms and all other individual supplier transaction details.

 

	
ii.  

	
  Upon acceptance of this Supplier Addendum the Seller will enter into a contract with the Supplier under the terms and conditions outlined and previously accepted by the Buyer though official acceptance of the Supply Addendum.

 

	
iii.  

	
Upon acceptance by Buyer and Seller of the Supplier Addendum including the release of the Supplier Contract Condition the Agreement and Supplier Addendum will constitute an official binding contract.

 

	
iv.  

	
Once the Supplier Addendum is official the Buyer shall open an Irrevocable, documentary sight Letter of Credit under the terms and conditions agreed to in the Addendum.

 

	
v.  

	
  All other provisions of the Agreement and Supplier Addendum will be now in effect and execution of the transaction closing will commence.

AND WHEREAS the term of this agreement will be for an eleven (11) year period with extensions agreed to upon mutual agreement and benefit of both parties.  There will be separate terms defined for each commodity supply, which will be outlined individually within the respective Supplier Addendum.

 

 

	
295 Madison Ave, 12th Floor, New York, NY 10017  u  P (310) 277-1513  u  F (310) 919-3116

  

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AND THEREFOR the following sections of this Agreement along with all terms and conditions outlined in the Supplier Addendum will be part of the agreement for all terms and conditions agreed to between the Buyer and Seller:

Clause 1. Terms of Agreement:

 

Commodity

 

It is hereby agreed that the Buyer agrees to buy Iron Ore Fines, Lumps and Pellets as individually agreed through a series of official Supplier Addendums individually attached to this Agreement as mentioned above.

 

Monthly Quantity

 

It is hereby agreed that the buyer will buy various commodities from the Seller, including but not limited to Iron Ore.

 

	
-  

	
At this time the Buyer agrees to purchase from Seller on a monthly basis, up to a minimum of 1,000,000 metric tons of Iron Ore and Seller agrees to provide said Iron Ore from its own sources and reserves.

 

	
-  

	
There is no maximum quantity for any additional Commodities, as these will be outlined individually through each Supplier Addendum.

 

Contract Price:

 

It is hereby agreed that the Contract Price for Iron Ore shall be determined upon the opening of each Letter of Credit (“L/C”) pursuant to the terms of this Contract.  The Contract Price shall be based on a calculated CIF Market Price (See CIF Market Price Calculation) for such goods based immediately preceding the date of each respective L/C and shall be fixed for the duration of said L/C.  The price shall be determined in U.S. dollars on a per metric ton of goods sold basis, Inco terms 2000 - CIF Port China.  The Parties shall mutually agree upon this price by signing a Price Addendum at the time of the issuance of each L/C and attaching said addendum to this document as an integral part of the Contract between the Buyer and Seller.  This Price will mandate over the Soft Offer contract and FCO contract.  Should, at any time during the term of this Agreement, this agreed price fall below USD$100.00 per metric ton, the Seller shall have the option to delay delivery of subsequent shipments until such a time as it determines said deliveries become financially viable based on current production and shipping rates.

 

CIF Market Price Calculation:

 

The CIF Market Price Calculation will be calculated as the international CIF market price fro Iron Ore at the time of opening the LC for monthly purchase quantity.

 

Market Adjustment Discount:

 

If during the period of the opening of the LC and the final delivery to China the CIF Market Price using the above CIF Market Price Calculation drops more than 10% of from our Contract Price the parties agree to a maximum price adjustment discount of 5%.

 

Quantity and Infrastructure Development Period:

 

The Buyer shall allow the Seller a Quantity and Infrastructure Development Period “Development Period” of twelve (12) months for the Seller to make necessary project investment necessary to meet the Iron Ore delivery projections of this agreement.  Accordingly, during this Development Period, the Seller may deliver fractional amounts of the monthly contract amount outlined above and the Buyer agrees to buy said fractional amounts delivered subject to the terms and conditions of the respective Supplier Addendum.

 

Other:

 

Commodity Detail, Period and Quantity, Specifications, Payment Terms, Documentation, Shipping Terms (where applicable) and all other individual supplier details will be outlined in each Supplier Addendum, which, once accepted, will become part of this Agreement.

 

 

	
295 Madison Ave, 12th Floor, New York, NY 10017  u  P (310) 277-1513  u  F (310) 919-3116

  

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Clause 2. Confidentiality

 

	
A.  

	
Each party (“receiving party”) undertakes that, in order to protect the proprietary interest of the other party (“disclosing party”) in the disclosing party’s trade secrets and confidential information, it will not during the term of this Agreement not at any time thereafter, either use or exploit in any manner, or directly or indirectly divulge or disclose to others any of the disclosing party’s trade secrets and confidential information. The receiving party shall treat all trade secrets and confidential information disclosed to it as strictly confidential and only use such trade secrets and confidential information for the purposes of this Agreement.

 

	
B.  

	
Each party shall ensure that its directors, officers, employees, agents, representatives, affiliates and attorneys comply at all times with this confidentiality undertaking which shall continue for a period of two years after the termination or cancellation of this Agreement.

 

	
C.  

	
Upon the termination or cancellation of this Agreement, any party may demand the return of confidential information relating to it by notice in writing to the other party, and the other party shall, and shall cause its representatives to, return all documents containing confidential information that have been provided by the party demanding the return of confidential information (or on its behalf), and destroy any copies of such documents and any document or other record reproducing, containing or made from or with reference to the confidential information, except, in each case, for any submissions to or filings with judicial, administrative, legislative or regulatory authorities.  Such return or destruction shall take place as soon as practicable after the receipt of such notice.

Clause 3. Representations and Warranties

 

On the date of this Agreement and on the date of each shipment pursuant to the Supplier Addendum, Seller represents and warrants that:

 

	
(i)  

	
it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and is qualified to conduct its business in each jurisdiction in which any act will be performed by it pursuant to this Agreement;

 

	
(ii)  

	
it has all regulatory approvals necessary for it to perform legally its obligations under this Agreement;

 

	
(iii)  

	
the execution, delivery and performance of this Agreement and any Supplier Addendums are within its powers, have been duly authorized by all necessary action and do not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any applicable law to it;

 

	
(iv)  

	
this Agreement and attached Supplier Addendums constitutes a legally valid and binding obligation enforceable against it in accordance with its terms except to the extent that its enforcement may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent transfer and other similar law affecting the enforcement of creditors’ rights or by general principles of equity;

 

	
(v)  

	
there are no bankruptcy proceedings pending or being contemplated by it, or to its knowledge, threatened against it;

 

	
(vi)  

	
the Goods are in accordance with the guaranteed levels of the specification, as set forth herein according to the Supplier Addendums.

 

	
(vii)  

	
the Goods shall be delivered to Buyer at the load ports within the agreed shipment period according to the Supplier Addendums.

 

	
(viii)  

	
Seller will convey to Buyer good title to all such Goods, free and clear of any and all security interests and other liens and encumbrances according to the terms of the Supplier Addendum; and

 

	
(ix)  

	
the Goods will be free of hazardous materials including but not limited to radioactive contaminations according to the Supplier Addendum.

 

 

	
295 Madison Ave, 12th Floor, New York, NY 10017  u  P (310) 277-1513  u  F (310) 919-3116

  

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Clause 4. Termination

 

	
A.  

	
Buyer shall be entitled to give a notice of termination of this Agreement to Seller upon the occurrence of any of the following events:

 

	
  

	
(i)

	
any sum due from Seller hereunder is not paid at the time, in the currency or in the manner specified herein, and such failure is not remedied within twenty (20) Business Days following receipt from Buyer of notice of non-payment;

 

	
  

	
(ii)

	
Seller takes any corporate action or other steps are taken by Seller or legal proceedings are started by Seller:

 

	
a.  

	
under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization (whether judicial or extrajudicial) or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization (whether judicial or extrajudicial), winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts; or

 

	
b.  

	
seeking appointment of a judicial manager, receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or such Party shall make a general assignment for the benefit of its creditors;

 

	
  

	
(iii)

	
there shall be commenced against Seller any case, proceeding or other action of a nature referred to in clause (ii) above;

 

	
  

	
(iv)

	
there shall be commenced against Seller any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief;

 

	
  

	
(v)

	
Seller shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (ii), (iii), or (iv) above;

 

	
  

	
(vi)

	
Seller shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due;

 

	
  

	
(vii)

	
Seller fails to perform or comply with any material obligation imposed on it in this Agreement and, if capable of remedy, such failure continues for a period of twenty (20) days after receipt of notice from Buyer specifying the breach and requiring it to be remedied;

	
B.  

	
Upon the notice of termination delivered hereunder becoming effective, this Agreement shall terminate (such time and date, the “Early Termination Date”), and thereupon all amounts due and payable and all other obligations accrued hereunder as of the Early Termination Date shall automatically become due and payable, and Buyer may exercise all its rights and remedies under this Agreement or in accordance with all applicable laws.

 

	
(i)  

	
Remedies:  In addition to any other remedies available under this Agreement or applicable law, if Seller shall, in breach of this Agreement, fail to make one or more shipments, then until such failure is cured in full, Buyer shall be entitled to seek damages from Seller or purchase Goods equal in quantity to such shipments from one or more third parties, in private or public sales, as a unit or in parcels.

 

	
(ii)  

	
Notwithstanding the foregoing, in no event shall Buyer be liable for special, indirect, punitive, exemplary or consequential damages, including but not limited to lost profits, lost savings, loss of use of facility or equipment, regardless of whether arising from breach of contract, warranty, tort, strict liability or otherwise, and even if advised of the possibility of such losses or damages or if such losses or damages could have been reasonably foreseen.

 

Clause 5. Arbitration of Disputes; Governing Law.

 

	
A.  

	
Arbitration. The parties agree that disputes arising out of or in connection with this Agreement between Seller and Buyer or any of their respective successors and assigns and any of their directors, employees, control persons and agents, whether arising prior to, on or subsequent to the date hereof, shall be determined by arbitration. If the parties are unable to settle any dispute arising out of or in connection with this Agreement through negotiations within thirty days, such dispute shall be submitted to arbitration in New York City in accordance with the rules of the American Arbitration Association at 140 West Street, New York, New York (“AAA”).  The arbitral tribunal shall consist of three arbitrators; each party shall appoint one arbitrator and the third arbitrator shall be appointed by both parties with mutual agreement as the presiding arbitrator.  The arbitral award shall be final and binding upon both parties.  The losing party shall bear the expenses of arbitration, unless otherwise awarded by the AAA.

 

 

	
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B.  

	
Governing Law.  This Agreement shall be construed and the obligations of the parties hereunder shall be determined in accordance with the laws of the State of New York (without regard to any conflict of laws provisions thereof and excluding the United Nations Convention for the International Sale of Goods and any other international treaties relating to the international sale of goods).

 

	
C.  

	
Jurisdiction.  Subject to subparagraph (A) of this section, each party to this Agreement hereby waives trial by jury and irrevocably consents to the personal jurisdiction of the courts of the State of New York and of the United States of America sitting in the Borough of Manhattan in the Southern District of New York, in any action to compel arbitration, application for judgment on an arbitration award, action to enforce an arbitral award or similar action that, in each case is not within the scope of subparagraph (A) of this section, and also hereby irrevocably waives any defense of improper venue or forum non-conveniens to any such action brought in either of those Courts.

 

	
D.  

	
Waiver of Immunity.  To the extent that a party or any of its revenues, assets or properties shall be entitled, with respect to any proceeding relating to enforcement of this Agreement or any award thereunder at any time brought against such party or any of its revenues, assets or properties, to any sovereign or other immunity from suit, from jurisdiction, from attachment prior to judgment, from attachment in aid of execution of judgment, from execution of a judgment or from any other legal or judicial process or remedy, and the extent that in any jurisdiction there shall be attributed such immunity, such party irrevocably agrees not to claim and irrevocably waives such immunity to the fullest extent permitted by the laws of such jurisdiction.

 

	
E.  

	
Service of Process by Mail.  Each party hereby irrevocably consents to the service by certified or registered mail, return receipt requested, to be sent to its address stated herein or to such other address as it may designate from time to time by notice given in the manner provided above, of any process in any action to enforce, interpret or construe any provision of this Agreement

Clause 6. Force Majeure

 

	
A.  

	
No party hereto shall be liable for any failure to perform the terms of the Agreement so long as and to the extent that such failure is due to Force Majeure.  “Force Majeure” means acts of God, national or industry-wide strikes, national or industry-wide lockouts, or other national or industry-wide labor disputes or disturbances, civil disturbances, arrests and restraint from rulers or people, interruptions or terminations by or as a result of government or court action or orders, or present and future valid orders of any regulatory body having jurisdiction, acts of the public enemy, wars, riots, terrorism, blockades, insurrections, epidemics, landslides, lightning, earthquakes, fire, loss, floods, washouts, explosions, breakdowns or accidents, or any other similar cause, which prevents that party from performing any of its obligations or enjoying any of its rights under or pursuant to this Agreement in whole or in part, provided that:

 

	
(i)  

	
Such event was beyond the control of the party claiming Force Majeure;

 

	
(ii)  

	
Such party could not reasonably be expected to have taken into account the impediment or its effects upon its ability to perform at the time of execution of this Agreement; and

 

	
(iii)  

	
Such party could not reasonably have avoided or overcome its effect, acting as a reasonable and prudent operator.

 

	
  

	
The Force Majeure shall, so far as possible, be remedied with all reasonable dispatch by the affected party, and, thereafter, the affected party will use its good faith commercial efforts to resume full performance of its obligations under this Agreement.  Each party will use good faith efforts to minimize and mitigate the damage or effect of any delay caused by any Force Majeure.

 

 

	
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B.  

	
Notification.  The party whose performance is affected or who has reason to believe that such performance may be affected by reason of Force Majeure shall as promptly as possible, but not later than three (3) business days from the occurrence of a Force Majeure event, give written notice thereof to the other party, giving the particulars of the event, including supporting documentation if available.  The party so affected shall also take reasonable steps to resume performance hereunder with the least possible delay and shall give written notice when the Force Majeure ceases.  Failure to give notice as provided herein shall preclude the failing party from relying on Force Majeure to suspend its performance of the terms of this Agreement.

 

	
C.  

	
If suspension of performance due to Force Majeure continues for more than thirty days, the non-affected party may terminate this Agreement in whole or in part, without liability to the affected party.

Clause 7. Taxes and Expenses; Approvals

 

	
A.  

	
All dues, duties, taxes, loading charges or other expenses of any kind that may affect the Goods and that are imposed in or by the country of origin shall be for the account of, and payable by, Seller.

 

	
B.  

	
All dues, duties, taxes, offloading charges or other expenses of any kind whatsoever that may affect the Goods and that are imposed in or by the country of destination shall be for the account of, and payable by, Buyer.

 

	
C.  

	
Each of Seller and Buyer agree to obtain the governmental consents, waivers, approvals or authorizations required for each shipment hereunder.

Clause 8. Miscellaneous

 

	
A.  

	
Definitions:

 

	
US Dollars and US Cents

	
Means respectively dollars and cents in lawful currency of the United States of America

	
Ton / Metric Tons

	
Means 1,000 kilograms determined on a natural / wet basis

	
Dry Metric Ton (DMT)

	
Means a metric ton determined on a dry basis

	
Ore on a “Natural Basis”

	
Means Ore in its natural or wet state

	
Ore on a “Dry Basis”

	
Means Ore dried at 105 degrees Centigrade

	
Parties

	
Means Buyer and Seller both together

	
Discharging Port

	
Non considered selling FOB Vessel a Loading Port

	
CIQ

	
Means Entry-Exit from country of loading port, certificate of quality and quantity by SGS or other mutually agreed upon company.

	
FOB

	
Shall have the meaning ascribed thereto in INCOTERMS 2000 (as amended from time to time), except as modified by this contract

	
CIF

	
Shall have the meaning ascribed thereto in INCOTERMS 2000 (as amended from time to time), except as modified by this contract

	
SHINC

	
Sundays and Holidays Included

	
B.  

	
Signature:  Signature and delivery terms shall have the meaning assigned to them pursuant to the Incoterms 2000 or any subsequent edition, as published by the International Chamber of Commerce, unless otherwise agreed to by the parties.

 

	
C.  

	
Survival.  All representations, warranties and covenants made by the parties hereto shall be considered to have been relied upon by the parties hereto and shall survive the execution, delivery and performance of this Agreement.

 

	
D.  

	
Successors and Assigns.  No party hereto may assign, pledge or encumber this Agreement without the prior written consent of the other parties hereto.  Notwithstanding the foregoing, Buyer shall have the right to assign, grant and transfer to and for the benefit of the lenders to Buyer funding any payments to be made hereunder all right, title and interest which Buyer now has or which shall thereafter arise in and to this Agreement, all shipments that are due to and become due to Buyer hereunder and all claims resulting from any failure of performance or compliance with any of the provisions of this Agreement, in each case in accordance with the financing agreements to be entered into with Buyer.  Notwithstanding that forgoing, Seller may assign this agreement to any corporate entity or subsidiary associated with Hurricane Global Resource Corporation.

 

 

	
295 Madison Ave, 12th Floor, New York, NY 10017  u  P (310) 277-1513  u  F (310) 919-3116

  

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E.  

	
Entirety of Contract:  This Agreement and attached Supplier Addendums contain the entire agreement of the parties as to the subject matter hereof, all prior commitments, proposals and negotiations concerning the subject matter hereof being merged herein.  No other terms and condition, whether contained in Buyer’s purchase order, shipping release, or elsewhere shall binding upon seller.

 

	
F.  

	
Severability.  If any provision of this Agreement is held to be invalid or unenforceable, such provision shall not affect this Agreement as a whole, but this Agreement shall be construed as though it did not contain the particular provision held to be invalid or unenforceable.

 

	
G.  

	
Counterpart Execution.  This Agreement may be executed in any number of counterparts and may be executed and delivered via electronic transmission (including by facsimile or PDF file transmitted by email) with the same force and effect as if it were executed and delivered by the parties simultaneously in the presence of one another, each of which counterparts, when so executed and delivered, shall be an original, but all of which together shall constitute one agreement binding all of the parties hereto.

 

	
H.  

	
Amendments; Waivers.

 

	
(i)  

	
No amendment of any provision of this Agreement or any Supplier Addendum shall be effective unless it is in writing (which includes writing contained in email) and signed by authorized representatives of both parties hereto.

 

	
(ii)  

	
No failure on the part of either party to exercise, and no delay in exercising, any right hereunder or under any related documents shall operate as a waiver thereof by such party, nor shall any single or partial exercise of any right hereunder or under any other related document preclude any other or further exercise thereof or the exercise of any other right.  The rights and remedies of each party provided herein and in other related documents

 

	
a)  

	
are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law and

 

	
b)  

	
are not conditional or contingent on any attempt by such party to exercise any of its rights under any other related document against the other.

 

	
I.  

	
Notices:  All demands, notices, requests and consents hereunder (“Notices”) shall be in writing, in the English language (or accompanied by an accurate English language translation upon which the recipient shall have the right to rely for all purposes), and shall be deemed to have been duly given if personally delivered by courier service, messenger or telecopy at, or if duly deposited in the mail, by certified or registered mail, postage prepaid, return receipt requested, to the following addresses, or such other addresses as may be furnished hereafter by notice in writing, to the following parties:

 

	
(i.) In case of Seller:

 

WorldVest, Inc. dba WorldVest Hurricane Resources

295 Madison Ave, 12th Floor

New York, NY 10017

 

Garrett K. Krause, Chairman and CEO

Tel:  +1-310-277-1513

Fax:  +1-310-919-3116

	
(ii) In case of Buyer:

 

Tianjuin Metallurgical No.1 Iron & Steel Group

928 Dagu South Road, HeXi

District Tianjin, PRC

 

Li Gouren

Tel:  +86-22 88264382

Fax:  +86-22 88264382

 

 

All Notices shall be effective either:

 

	
a)  

	
at the time of actual delivery thereof;

 

	
b)  

	
if given by telecopy, upon electronic confirmation of delivery; or

 

	
c)  

	
if given by certified or registered mail, five (5) Business Days after certification or registration thereof, to any officer (or an authorized recipient of deliveries to the office) of the party to whom given. Communication in the normal course of business between the parties, including Notices, may be conducted, in addition to the methods specified herein, by email.  Notices delivered by email shall be effective when

 

	
i.  

	
delivered to the email addresses specified herein; and

 

	
ii.  

	
the recipient acknowledges receipt.

 

 

	
295 Madison Ave, 12th Floor, New York, NY 10017  u  P (310) 277-1513  u  F (310) 919-3116

  

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IN WITNESS WHEROF, THE PARTIES HAVE DULY EXECUTED AND DELIVERED THIS AGREEEMENT AS OF THE DATE FIRST WRITTEN ABOVE AND THE BELOW ELECTRONIC SIGNATURES ARE TO BE CONSIDERED ORGINAL AND LEGALLY BINDING.

	
SELLER

WORLDVEST, INC. DBA WORLDVEST HURRICANE RESOURCES

 

 

 

 

/s/ Garrett K. Krause                                       

Mr. Garrett K. Krause, Managing Director

Date:  July 1, 2010

	
BUYER

TIANJUIN METALLURGICAL NO.1 IRON & STEEL GROUP

 

 

 

 

/s/ Li Gouren                                                      

Mr. Li Gouren, General Manager

Date:  July 1, 2010

	  	  

 

	
295 Madison Ave, 12th Floor, New York, NY 10017  u  P (310) 277-1513  u  F (310) 919-3116

 

8f8k07110ex10ii_worldvest.htm

 

Exhibit 10.2

 

 

 

 

SUPPLIER ADDENDUM TO

CONTRACT FOR SALE AND PURCHASE

OF COMMODITIES

 

Supplier Addendum #: WVH-SA-XXXX

 

Date:           

 

THIS SUPPLIER ADDENDUM TO CONTRACT FOR THE SALE AND PURCHASE OF COMMODITIES (the “Addendum”) among WorldVest, Inc. dba WorldVest Hurricane Resources (the “Seller”) and Tianjin Metallurgical No.1 Iron & Steel Group (the “Buyer”) Original Contract #: WVH-1007, dated July 1, 2010, outlines the details of an commodity sourced by the Seller for consideration of purchase by the Buyer:

 

Clause 1. Commodity

 

	
Name of Commodity:

	
Iron Ore Fines

	
Country of Origin:

	  
	
Packing:

	  
	
Port of Loading:

	  
	
Port of Destination:

	
Main Ports, China

 

Clause 2. Period and Quantity

 

	
Quantity:                      

	  
	
Period:

	  
	
Schedule:

	  

 

Clause 3. Specifications

 

Iron Ore Fines

 

	
A.  

	
Chemical Composition (on dry basis,  percentage by weight)

	  	
(Guaranteed)

	
Fe:

	
XX.x% min

	
Mn

	
X.xx% Max

	
SiO2

	
X.xx% Max

	
MnO2

	
X.xx% Max

	Al2O3:	X.xx% Max
	
Ti

	
X.xx% Max

	
P:

	
X.xx% Max

	
S:

	
X.xx% Max

 

	
B.  

	
Moisture Content (Free moisture loss at 105 degrees centigrade)

	  	
(Guaranteed)

	
Free Moisture % @ 105°c:

	
X.xx% max

	
  

	
C.

	
Physical Specification (Iron Ore Fines)

	  	
(Guaranteed)

	
0.05mm TO  1.00mm:

 

	
XX.x % min

 

 

 

	
295 Madison Ave, 12th Floor, New York, NY 10017  u  P (310) 277-1513  u  F (310) 919-3116

  

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Clause 4.  Price, Payment Terms and Documents

 

	
A.  

	
Contract Price:

 

Contract Price to be determined by CIF Market Price Addendum which will be attached as an Exhibit to this Supplier Addendum adjusted monthly for each Letter of Credit issued with this agreement pursuant to original contract.

 

	
B.  

	
Contract Price Adjustment

The base price referred in Clause 4 shall be adjusted in accordance with Fe content as finally determined pursuant to the provisions of Clause 12 as follows:

 

	
(i)  

	
The base price shall be increased by US$________ for each 1% Fe per DMT in case of Fe above XX.x%, fractions pro-rata.

 

	
(ii)  

	
The base price shall be decreased by US$_______ for each 1% Fe per DMT in case of Fe below XX.x% up to XX.x%, fractions pro-rata.

 

	
(iii)  

	
The Buyer has the right to reject the cargo if Fe content is or below XX.x%.

 

For other elements, if the shipment does not meet any of the chemical specification other than Fe provided in Clause 3 as finally determined in accordance with the provisions of the Clause 7, the base price shall be decreased as follows fraction pro rata.

 

	
(i)  

	
For excess Phosphorus.

At the rate of _______ US Cents per dry metric tonne for each 0.01% in excess of X.xx%

 

	
(ii)  

	
For excess Sulphur.

At the rate of _______ US Cents per dry metric tonne for each 0.01% in excess of X.xx%

 

	
(iii)  

	
For excess Silica.

At the rate of _______ US Cents per dry metric tonne for each 1.00% in excess of X.xx%

 

	
(iv)  

	
For excess Alumina.

At the rate of _______ US Cents per DMT for each 1.00% in excess of X.xx%

 

	
(v)  

	
For excess Mn.

At the rate of _______ US Cents per dry metric tonne for each 0.01% in excess of X.xx%

 

	
(vi)  

	
For excess Ti.

At the rate of _______ US Cents per dry metric tonne for each 0.01% in excess of X.xx%

 

In the event that the quantity of Iron Ore between 0.05mm and 3.00mm in size is below the guaranteed XX.x% on natural wet basis as provided in Clause 3, as determined in accordance with the provisions of Clause 7, a penalty at a rate of ______ USD per MT shall be applied to the quantities below XX.x% on natural wet basis, fraction pro-rata.

 

	
C.  

	
Payment

 

After signing this contract, Seller will allow Buyer, at their option, to complete a physical onsite inspection of the mine site and the port of loading with a direct representative of the Buyer’s final Chinese end user.  At most ten (10) days after this mine inspection or Buyer’s written waver of this right, Buyer shall open an Irrevocable, Drawable, Transferable, Divisible Documentary Sight Letter of Credit (hereinafter called as the "L/C") payable at sight in favor of Seller from a top 50 international bank to cover 100% of the amount of purchase value of the shipment.  Buyer shall open L/C with a special condition stating "plus/minus 10% of quantity and amount of L/C will be allowed" and all banking charges outside issuing bank shall be to the account of Seller.   The L/C shall be sent to the Seller for review and confirmation prior to opening.

 

The payment for the CIF value of each shipment shall be accomplished in two (2) stages, namely as "Provisional Payment" and "Final Payment".

 

 

	
295 Madison Ave, 12th Floor, New York, NY 10017  u  P (310) 277-1513  u  F (310) 919-3116

  

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(i)  

	
Provisional Payment

 

Seller's provisional invoice shall be made on the basis of the following:

 

	
a.  

	
The said L/C shall be available against Seller’s draft at sight for provisional payment for the amount of the ninety percent (XX.x%) of the CIF value of each respective shipment accompanied by the certificates as stipulated in Clause 6.

 

 

	
b.  

	
The Certificate of Weight issued by SGS or other mutually agreed upon company at the loading port as per Clause 6 together with the Certificate of Analysis of sample and of the percentage of free moisture loss at 105 degree centigrade issued by SGS or other mutually agreed upon company at loading port as per Clause 7, shall be the basis for Seller’s provisional invoice.

 

	
(ii)  

	
Final Payment

 

The balance amount as per Seller's final invoice due to Seller after provisional payment shall be payable against Seller’s sight draft under the said L/C accompanied by the negotiating documents provided as per Clause 7.  In the event that Seller's final invoice amount is not in excess of the provisional payment amount in Clause 6A, Buyer shall send a debit note to Seller in respect of any overpayment together with CIQ certificate and/or umpire analysis certificate and Buyer's fax confirming Seller's final invoice calculations based on the above-mentioned certificate. In this case Seller shall make the final payment within seven (7) days after Buyer’s confirming but within the validity of the L/C.

 

	
D.  

	
Documents

 

For 95% Provisional Invoice, the Seller must provide the Buyer with original and copies of the following documents within 5 (five) working days after each shipment.

 

	
(i)  

	
Complete set of “Clean on Board” shipped Bill of Lading made out “To order”, Blank endorsed marked “FREIGHT PREPAID” notifying to order.

 

 

	
(ii)  

	
Three (3) Original and three (3) copies of Beneficiary’s Signed Commercial Invoice for XX.x% shipment value indicating the contract no., LC no., B/L no., and vessel name

 

 

	
(iii)  

	
Certificate of Quality of contracted goods in one original and three copies each issued by loading port SGS Chile or other mutually accepted company to show actual result of the test of chemical composition, moisture, physical properties and all other tests called for in this contract.

 

 

	
(iv)  

	
Certificate of Weight issued by loading port SGS Chile or other mutually accepted company in one original and three copies certifying the actual surveyed weight of cargo shipped at loading port.

 

 

	
(v)  

	
Certificate of origin in one original and three copies, issued or endorsed by any Chile Chamber of Commerce, stating that the goods shipped are of Chile origin, loaded quantity, commodity, carrying vessel, seller’s name and address.

 

 

	
(vi)  

	
Insurance Certificate/ Policy covering 100% of shipment value

 

 

	
(vii)  

	
Seller’s certified copy of telex/fax/electronic sent to Buyer within 3 (three) working days after shipment date advising shipment details including the contract number, name of vessel, name of commodity  gross weight, loading and sailing date, and Bill of Lading No. and date.

 

For 5% Final Invoice the Seller must provide the Buyer with original and copies of the following documents.

	
(i.)  

	
5% Final Invoice in one original and two copies based on the certificate of quality and certificate of weight issued by CIQ China at the discharge.

 

	
(ii.)  

	
One fax copy of Certificate of quality issued by CIQ China at the discharge port.

 

	
(iii.)  

	
One fax copy of Certificate of weight issued by CIQ China at the discharge port.

 

 

	
295 Madison Ave, 12th Floor, New York, NY 10017  u  P (310) 277-1513  u  F (310) 919-3116

  

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Clause 5.  Shipping Terms

 

	
A.  

	
Notification and Arrival

 

The Seller will arrange a suitable seaworthy vessel with the age not more than 25 years.  Vessels above 20 years will be accepted with the mutual consent of Seller and Buyer. Vessel nominated is subject to Seller’s approval.  Seller shall provide the Charter Party to buyer by fax/e-mail before the vessel arrived at the loading port. The seller is responsible for fulfilling the loading condition at the Load Port and Buyer is responsible for fulfilling the discharge condition as stated in Clause 5(B) below, at the discharge port.

 

Seller shall arrange for the master of the vessel to give Buyer Four (4) notices of the ETA of the vessel at the discharging port; the first notice to be given at least seven (7) days and the second notice to be given five (5) days prior to the ETA of the vessel. The third and the fourth notices to be given forty eight (48) hours and twenty four (24) hours respectively prior to the vessel's ETA.

 

	
B.  

	
Discharging Terms

 

	
(i.)  

	
Discharge Rate:  Cargo shall be discharged at a minimum rate of _________ MT per day, SHINC.

 

	
(ii.)  

	
Demurrage Discharge Port:  US$_________ per WWD pro-rata.  No dispatch is applicable for this contract.

 

	
(iii.)  

	
Shifting:  Shifting at Sellers’s and the Port Authority request after vessel is berthed due to vessel’s size or for any reason shall not count as lay-time and the cost of such shifting shall be for Seller’s account. Shifting at Buyer’s or the Port Authority request after vessel is berthed shall count as lay-time and the cost of such shifting shall be for Buyer’s account. Shifting from anchorage to berth shall not count as lay-time.

 

	
(iv.)  

	
Lay-Time:  Lay-time for discharge will not commence until after 24 hours from the time NOR is duly tendered.

 

	
(v.)  

	
Absence of Original Bills of Lading:  In the cases of absence of original bills of Lading at Discharging Port, Seller/master confirms to discharge the cargo against buyers single letter of Indemnity without any bank guarantee or endorsement, and Cargo to be released against original Bill of Ladings.

 

	
(vi.)  

	
Shipping Agent: Shipping agent at discharging port shall be appointed by buyer.

 

	
C.  

	
Advice of Shipment

 

Seller shall, after completion of loading at the loading port, advise Buyer within three (3) working days after the date of B/L by fax of the contract number, name of commodity, B/L date, B/L number and B/L weight at the loading port.

 

	
D.  

	
Title and Risk

 

The title with respect to each shipment shall pass from Seller to Buyer when Seller receives reimbursement of the proceeds from the opening bank through the negotiating bank against the relative shipping documents as set forth in Clause 4(D) after completion of loading on board the vessel at the loading port, with effect retrospective to the time of delivery of ore.  All risk of loss, damage or destruction respecting the ore delivered shall pass to Buyer at the time of discharge of the ore from the loading devices into the vessel.

 

	
E.  

	
Insurance

 

The cost of insurance for Iron Ore shall be covered by Seller from the time that Iron Ore is loaded on vessel at the loading port insured and a copy of said certificate will be provided prior to vessel sailing.  Furthermore, Seller shall be named as an additional insured.

 

	
F.  

	
Loss of Cargo

 

In the event of any partial or total loss of the cargo after the same has been loaded aboard vessel, Buyer shall pay to Seller an amount equal to the value of Iron Ore calculated on the basis of shipped weight and analysis, size and moisture content at the loading port as set forth in Clause 6 and 7

 

	
295 Madison Ave, 12th Floor, New York, NY 10017  u  P (310) 277-1513  u  F (310) 919-3116

  

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Clause 6. Weighing

 

At the loading port, Seller shall at their expense appoint SGS or other mutually agreed upon Marine Surveyor to determine the weight of Iron Ore by draft survey. The weight of Iron Ore ascertained and certified by the SGS or other mutually agreed upon Marine Surveyor shall be the basis of Seller’s provisional invoice. Buyer may, at Buyer's expenses, have its representative be present during the draft survey at the loading port.

 

Buyer shall, at Buyer's option and expense, appoint CIQ for weighing at the port of destination. The weight of shipment at the discharge port is to be ascertained by draft survey.  The weight thus determined by CIQ shall be final as to wet quantity of the shipment. Seller may, at Seller's expenses, have its representative be present at the time of draft survey and weight determination at the port of destination.

 

If no draft survey is performed at the discharging port, Seller’s certificate of weight at the loading port shall be regarded as the final wet weight. The dry quantity shall be determined by deducting the free moisture as finally determined in Clause 7 from such wet quantity.

Clause 7. Sampling and Analysis

 

	
A.  

	
At the loading port, Seller shall at their expenses, appoint SGS or other mutually agreed upon Marine Surveyor to determine the specification of Iron Ore contained in the shipment and shall provide a certificate showing details of the determination as to the specifications of Iron Ore stipulated in Clause 3 and also the percentage of free moisture loss at 105 degrees centigrade. Buyer may, at Buyer's expenses, have its representatives be present at the time of such determination.

 

	
  

	
At the port of destination, at the Buyer’s option and expense, CIQ shall be appointed for sampling and analysis. CIQ shall take sample from the shipment and divide it into three parts; one for Buyer, the second for Seller and the third for possible umpire analysis which shall be sealed and kept by CIQ. Seller may, at Seller's expenses, have its representatives be present at the time of sampling and analysis at the port of destination.

 

Buyer shall forward to Seller, within sixty (60) days after completion of discharge of Iron Ore at the port of destination, a certificate issued by CIQ showing the percentage of chemical contents, the percentage of free moisture loss at 105 degrees centigrade and the relevant screen analysis by airmail. The analysis conducted by CIQ at the port of destination shall be final except as otherwise provided for in paragraph B below.

 

	
  

	
B.

	
If the difference in percentage of Fe content between Buyer’s and Seller‘s analysis made under paragraph A of this clause is more than 0.5%, if there exists a significant difference between the two said analysis in respect of any one or more chemical contents other than Fe, or if there exists a significant difference between Buyer’s and Seller’s physical analysis, Seller shall consult with Buyer to reconcile such differences.  If after consultation between Seller and Buyer the difference cannot be reconciled then at the request of Seller the sample for umpire shall be analyzed by an Umpire agreed between Buyer and Seller, and the certificate of analysis issued by such umpire shall be final for Fe or relevant chemical content.

 

	
  

	
C.

	
The cost of any analysis performed by CIQ, SGS or other mutually agreed upon Marine Surveyor at the discharge ports shall be paid by Buyer.  The umpire analysis shall be for the account of the party whose own analysis differs farther from the umpire analysis, and if the result of such umpire analysis is the mean of the analysis of Buyer and Seller then such cost shall be equally borne by both parties.

 

	
  

	
D.

	
If no determination of analysis is exercised at the port of destination, the certificate(s) at the loading port issued by Seller shall be conclusive as to analysis of Iron Ore.

 

 

	
295 Madison Ave, 12th Floor, New York, NY 10017  u  P (310) 277-1513  u  F (310) 919-3116

  

5

  

 

 

Clause 8.  Additional Conditions

 

	
A.  

	
Supplier Contract Condition

 

This Addendum is conditional upon the Seller’s ability to enter into a final contract with supplier to purchase the said commodities under agreed terms outlined herein.

 

 

	
  B.   

	
Acceptable Shipping

 

 

This Addendum is conditional upon the Buyer’s ability to secure shipping from the port of loading to the port of destination under acceptable terms and with a maximum cost of $XX.xx/DMT.

Clause 9. Commodity Analysis Documentation

 

To be attached at Exhibit A to this Supplier Addendum prior to the issuance of the Letter of Credit.

IN WITNESS WHEROF, THE PARTIES HAVE DULY EXECUTED AND DELIVERED THIS ADDENDUM AS OF THE DATE FIRST WRITTEN ABOVE AND THE BELOW ELECTRONIC SIGNATURES ARE TO BE CONSIDERED ORGINAL AND LEGALLY BINDING.

	
SELLER

WORLDVEST, INC. DBA WORLDVEST HURRICANE RESOURCES

 

 

 

 

 

                                                                             

Mr. Garrett K. Krause, Managing Director

Date:  July 1, 2010

	
BUYER

TIANJUIN METALLURGICAL NO.1 IRON & STEEL GROUP

 

 

 

 

 

                                                                                                            

Mr. Zhi Ying, General Manager

Date:  July 1, 2010

 

 

	
295 Madison Ave, 12th Floor, New York, NY 10017  u  P (310) 277-1513  u  F (310) 919-3116

 

6

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