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18 May y AM/PMt 1:35 AM USA COAL of 9

FTN EXPORTING www.smice.net www.ftnexporting.com

FESEFTN EXPORTING SMICE EXCHANGE

United Society of Commodity Trader (USCT)

LETTER OF OFFERInstantaneous Contract Application (ICA) This offer herein is legally binding upon

the issuance of the contract by the seller FTN Exporting

www.smice.net ORIGINAL

Transaction Code : FTNX-JGDPRE-0011Date : 26 OCTOBER 2018 12.01 AEST or before Offer Validity : 30 November 2018Previous offers : No longer applicable.

For the Attention End Buyer signing this original offer as indicated

This offer may be enacted upon by any entity carrying a confirmed or registered USCT number as issued di -rectly and personally by FTN Exporting 2015 onwards. No advice or support is served unless the document is re-turned as accepted by an end buyer as serviced by a named confirmed USCT member. The confirmed USCT member may retuned the filled in offer to any listed registered USCT member www.smice.net carrying a PA designation.

Name of Member :USCT Number : Email Address :

End buyers please note offer carrying transaction code FTNX-JGDPRE-0011 must be returned to the USCT member advising such, and not FTN Exporting-SMICE; as the offer will be not opened without endorsement of the

entity serving such, on behalf of the FTN Exporting SMICE Exchange (FESE) in accordance with the USCT Members FTNX TRIBE In-House Rules of Association

© FTNX 2018 FTNX Coal Offer Format FTNX-JGDPRE-0011

http://www.smice.net/


http://www.ftnexporting.com/



OFFER BASIS This offer is advised by FTN Exporting hereby defined as the ‘Seller’ acting on behalf of an undis-closed principal. Coal supporting this offer is from an existing operational mine offering high grade (lower emissions) Coal. The Coal on offer is being currently railed from USA operational coal mine site to Port of Guaymas, Mexico (Port details https://www.searates.com/port/guaymas_mx.htm) to form a stockpile. Coal is sourced from a long established operational mine site located in Denver USA.The mine owners are effecting a first time export of such coal, with this offer.

PRODUCT :Hight Grade Black Thermal CoalORIGIN :USA QUANTITY :125000 MT per month for 36 months or more ‘-/+10%’ PSI INSPECTION :SGS Denver USA Conducted on mine site January 2018CURRENT PRICE :As per formulation per MT FOB @ NARFIRST DELIVERY :10 January 2019 or as later specified on contract.DELIVERY MODE :FOB INCOTERMS GRADE :See full specification at the end of the offer: -/+ 2.0%PROCEDURES :Offer, Contract, Deposit or Full DLC, DeliveryRULES :LCIA, UCP 600, URC LATEST, INCOTERMSPAYMENT AS PER :Transferable Irrevocable DLC as per ‘at sight’ Collection ProcessPORT OF LOADING :Port of Guaymas, Mexico FULL SPECIFICATION PROVIDEDDate of First SGS Report :1 Jan 2018A SGS issued report is attached at the end of this offer, without disclosing producers details which have been intentionally covered. Second SGS inspection service is offered as a pre-shipment in-spection (PSI) of service applied at time of loading. The latter PSI SGS certification shall be a part of the letter of credit document presentation condition.

FORMULATION AND PRICE BASISThe Seller FTN Exporting is providing the following price basis and routine as further prescribed to its end buyer; in a manner so as to ensure that a ‘good fair and transparent price’ and basis therein is offered. All values to do with money, once arrived at are to the nearest whole cent value and 2 entries after the decimal point, for fixed numeral entries to nearest whole cent value, as it applies to the final value. Coal Index from two (2) leading suppliers is used by the FESE to offi -cially created a FESE average price basis for comparing with USA coal offered. This ‘average price’ is assumed to be the FESE basis. The FESE coal average basis is then compared to any Coal secured by the FESE from a supplier in legal possession of such coal, to arrive at a monthly sell price.The sell price is automatically formulated , as per the factors offered below, on the 10th day of any given month. To avoid any disruptions during the Christmas / New Year festive season any given year, contract of purchase cannot be signed after the 10th day of any given month, where delivery occurs at the same day/date, in the following months. Transaction converging for contract to be signed in December of any given year must be signed on or before the tenth (10) Day.

COMPARABLE COAL AS SPECIFIEDUSA Coal offered is being compared with Coal offered under below aspect (a) and (b)(a) Newcastle Coal (cmegroup.com)http://www.cmegroup.com/trading/energy/coal/coal-api-5-fob-newcastle-argus-mccloskey_quotes_globex.html


http://www.cmegroup.com/trading/energy/coal/coal-api-5-fob-newcastle-argus-mccloskey_quotes_globex.html

http://cmegroup.com/

https://www.searates.com/port/guaymas_mx.htm


(b) Richards Bay Coal (cmegroup.com)http://www.cmegroup.com/trading/energy/coal/coal-api-4-fob-richards-bay-argus-mccloskey_quotes_globex.html

Coal (a) and (b) primary specifications used are;Whether correct or not, all factors below are used in formulating a sell price prevail on contract.(a) Sulphur: 0.70 % Ash 13.0% Moisture 10.0% K/Cal/kg 6300 NET As Received (NAR)(b) Sulphur: 0.80 % Ash 20.0% Moisture 8.5% K/Cal/kg 5700 Gross As Received (GAR)

The difference in quality is specified as factors below by creating average of (a) and (b) (c) Result: Sulphur: 0.75% Ash 16.5% Moisture 9.25% K/Cal/kg 6000 (50% @ NAR)This grade is defined as the FESE coal basis.

The quality of the USA Coal offered by the FESE is;(d) Sulphur: 0.41% Ash 7.39% Moisture 6.69% K/Cal/kg 6828 Gross As Received (NAR)

Coal at (c) is compared with the USA Coal on offer at (d) to arrive at differentials(e) Result: Sulphur: 0.34% Ash 9.11% Moisture 2.56% K/Cal/kg: 798

A fixed theoretical value in the difference of Coal basis at (e)(f) The fixed total of differentials is conservatively valued at : US$17.25 per MTAs Per: Sulphur: US$ 0.03 Cents Ash US$ 8.45 Moisture US$ 8.74 K/Cal/kg US$0.008 Cents Note: GAR to NAR conversion value occurred when 50% K/Cal/Kg unit at (c) was also added at (f) (US$0.03 Cents)

PRICE SUMMARY and Formulation Used : 26 October 2018 Price Basis 1. As taken from disclosed basis used 12.01 PM or before AEST on each assessment date2. The average price of coal basis (a) and (b) is: US$ 82.73 Per MT ICC Incoterms 2010 FOB 3. FESE declares that the assessed price and minimum ‘worth’ of USA Coal is as follows; 4. USA COAL provisional price plus differentials is: ( $82.73 + $17.25)=US$ 99.88 PER MT FOB5. Fixed premium at US$ 6.00 per MT FOB is sought by the FESE = US$ 105.88 MT FOB6. First delivery price of USA Coal is offered by the FESE: US$ 105.88 per MT FOBNote: If the contract were signed today, for 1st delivery in 30 days; FOB price payable is; US$ 105.88 MT FOB

DELIVERY SCHEDULE For all contracts signed by :1 up to 10th December 2018: All Dates 12.01 AEST or beforeAssumed first delivery date :10 January 2019Next price formulated :10 January 2019 For next delivery :10 February 2019 Next price formulated :10 February 2019For next delivery :10 March 2019Next price formulated :10 March 2019For next delivery :10 April 2019 and so forth and so on;Prices are tracked and formulated accordingly in similar sequence, as specified above, and added to the contract on the contract signing date (CSD) falling on the 10th day of any given month, where first delivery is 30 days away.The actual consecutive sequence of all subsequent deliveries and payments then follow the same day of the month, as taken from the first delivery date. Refer-ence to 30 ‘Days’ where made herein, refers to imply; as taken from the 10th day of one month (any given day of the month) to the next month, of the same day.


http://www.cmegroup.com/trading/energy/coal/coal-api-4-fob-richards-bay-argus-mccloskey_quotes_globex.html

http://cmegroup.com/


Actual First Delivery Date :10 January 2019 As per price basis formulated and set :Contract Signed 10 December 2018Regardless of any discrepancy found, unless corrected or changed ‘in time’ prior to any contract being signed, FESE formulations applies once the contract with the end buyer is signed.

PRICE AND PAYMENT COLLECTION ROUTINEWhen a contract is apparent as signed by the end buyer, a financial instrument is lodged within 3 days of such a contract signing date (CSD),first delivery price and subsequent monthly delivery price at FOB incoterms shall prevail as demonstrated in the above routine.Any delays is payment being lodged on time, give the seller the right to deflect the first offered delivery dated, in where the next delivery date 30 days later may apply, in where all matters of scheduling also move forward accordingly.

PAYMENT INSTRUMENT: UCP 600 DLC ISSUANCE RULES The person identified as the disclosed buyer, paying for goods and/or the disclosed representative of such is the entity taking possession of goods being ordered, and is also the same person sign-ing this offer. The lowest least expensive acceptable payment is by bank issued Transferable Irrev-ocable DLC (TIDLC) as advised from a top 200 ranked bank of the world.

1. The ITDLC shall support the total contract value by its non cumulative revolving status. The credit is subject to amendments to its issuance value as indicated once a tolerance level has been breached. The tolerance level of the DLC is plus or minus 5.0%

2. The credit is advised for ‘clean at sight’ processing as the mechanism used to collect each re-volving payment due.

3. The credit shall be issued carrying in advance one (1) implied shipment values at all times, until the final one (1) delivery is evident.

4. The seller shall instruct its bank to present, in a clean state, original transport / delivery docu-ments to the buyers bank to examine ‘at sight’. No airmail deliveries of transport documents re-quired.

5. Partial payments on DLC allowed, if transfer or other said fees are to be drawn from the credit. 6. Interbank secure methods as per eUCP bank to bank verification process may apply for serving

transport and delivery documents. Once the bank of the buyer accepts said document ‘at sight’ as being clean or ‘cleanly presented’ as per UCP 600 Rules, Collection of funds at sellers bank may be initiated as per latest ICC URC Collection rules and internal bank processes.

7. The price of good as offered is the lowest price possible, incorporating a FESE operational ex-penses bearing a net aspect as indicated or less. The FESE has provided our best and lowest price to the buyer accordingly all bank charges and fees, such as bank corresponding fees and transfer fees are payable by the buyer at call, and if allowed may be deducted from credit as a ‘partial payment’ should the buyers bank be able to accommodate such a deduction; otherwise a separate payment by SWIFT process is applied on first call.

8. The credit is opened for 365 days, 7 days , after contract are signed, in where an added 60 days is applied for any unforeseen delays to form 425 days DLC validity period.

BANK OF SELLER: TOP 100 WORLD RANKED BANK Following bank shall be used to accept the credit, or deposit or as fully defined on contract



Name of Bank:

WESTPAC CORPORATION AUSTRALIA

FTNX LDD PERFORMANCE GUARANTEE (P.G) At the price offered; outside the bounds of the contract as stipulated on this offer.The end buyer is provided with a US$ 0.50 cents per Metric Ton Late Delivery Discount (LDD) served for each ‘fail-ure to deliver on time’ aspect. Said LDD shall be deposited by the seller into nominated account of the end buyer, as nominated at such a time, 7 days after each late delivery is recorded as being delivered.

TRANSPORT DOCUMENTS TO BE PRESENTED AT ICC FOB INCOTERMS 2010 One copy marked as original, as endorsed, by relevant authorities. Documents are to be cleanly presented and considered at sight by the bank of the buyer. Any changes to transport documents that we need to secure is for the cost of the buyer. The price of goods offered will rise if FOB in-coterms delivery mode is not used.

• Certificate of Origin• SGS Analysis report ‘on board ship’ (PSI Type)• Sellers invoice declaring all debit and credit • SED: Sellers Export Declaration (if required)• Export authority/permit /license • Ship’s Mate Receipt quantity onboard

Note about the BOL: Buyer secures their own charter party vessel and BOL at ICC FOB delivery mode, unless buyer request the seller to secure the BOL in which case, all expenses to do so will be for the account of the buyer and the BOL will no be made a part of the credit document presentation and collection process. If CFR delivery mode is made available, the seller is only able to secure, for added security reasons, a more expensive shipowners endorsed BOL for goods received on board, accordingly the buyer is advised that no matter the delivery mode used, the buyer will be able to secure a better Charter party BOL and freight rate therein than the FESE, as the FESE is not prepared to offer a ‘Charter party BOL’ and only a shipowners endorsed BOL, if freight is offered.

At ICC FOB incoterms 2010: Insurance at buyers expense.

PENALTY AND REJECTION CLAUSEIf goods are accepted after a valid notice of rejection has occurred, the seller shall rebate in the form of a credit entry applied on the sellers invoice on the next delivery, the following amount, for goods being legitimately rejected. If the buyer requires any other aspect added, please apply in the ‘comments section’ of the buyers declaration. If added rejection clauses are applied to this offer at the behest of the end buyer (or changed) formulation used may be changed to produce a higher sell price application.All matters pertaining to the price of goods offered may only apply if this offer is taken without demand or changes being asked for.

Sulphur content exceed 2.0% Per every 100 ppm thereof: US $0.20 cents per unit per MT Kcal/Kg Calorific Value falling below 2.0% Per each 500 units thereof: US$ 0.20 cent per MT



STRICT FTNX TRANSACTIONAL PROCEDURES: FOB (X) CFR(X) CIF( ) 1. Seller has advised an offer to the buyer taking possession of goods offered.2. Offer advised harbouring a validity period as advised on its form.3. Upon this offer being returned and accepted by the seller on time;4. Seller advises a contract carrying a Seven (7) Day validity date.5. Once contract is signed a hardcopy is posted by courier post to the seller.6. A postal receipt is produced by the buyer along with a tracking number.7. The signing of the contract produces a legally binding aspect.8. A PDF copy of the contract is also advised via email by the buyer to the seller.9. The PDF copy allows the deal to continue while waiting for the hard copy contract. 10. Buyer lodged required Financial Instrument within 5 Days.11. At FOB, buyer now books and arranges for ship to be at port for first delivery.12. DLC is now accepted ( Within 5 banking days of issuance) . 13. Above first stage of the deal cannot take more than 14 days to complete .14. First delivery date is ‘as pre-established’, on relevant offer and contract .15. Ship arrives at loading port and clears ‘pratique.’ 16. The vessel heads towards berthing / lay can after advising NOR is complete17. Communication with seller and buyer remains open at all times.18. Parties remain informed of each others status at needed.19. First Shipment is loaded on or before first delivery date 20. Transport documents are secured and copy produced to bank of buyer for processing21. Collection on DLC applied for and payment is collected as per the sellers invoice value. 22. Ship leaves loading port 23. Next vessel arrives in the next consecutive month, until final delivery is enacted upon in se-

quence of the first delivery24. Buyer has 90 days to reject any defective shipment once offloaded at destination port25. Seller must remedy and defective shipment once evidence lodged indicates as much

FTNX RULES OF TRADE• Seller is not obligated to release a third offer without a 2.0% deposit if first or second offer

fails to be accepted on time. 2.0% deposit of first shipment value .• If goods are accepted earlier and reserved a 2.0% first shipment deposit is required.• Disputes settled in sellers country Melbourne, Australia as per VCAT Tribunal or LCIA arbi-

tration proceedings.• Seller advises buyer that we prefer all serious issues to be settled amicably amongst our-

selves in the first preferred course should dispute arise. Buyer makes such reciprocating efforts accordingly.

• All banking matters to do wth the issuance of the DLC shall apply ICC UCP 600 Rules. • All matters of delivery and obligations therein shall be applied as per ICC Incoterms 2010

Delivery Rules. • Contract governance and contract formation rules as per the laws of Great Britain.• Collections on DLC shall apply latest ICC URC Collection Rules. • All matters of shipping ‘Whose at Fault Pays Policy’ (WAFPP) applies.• Sale of Goods Act (U.K) 2001 or latest applies to matter of rejection.• Contract may be set aside if it is found that prior to signing the contract , first delivery is un-

able to take place.



The buyer understands that the seller is offering first time exportable goods, and that any delays cause of the first aspect of delivery will be tolerated; accordingly matters of said delays does not attract LDD or any consequences to the seller.

SELLERS DECLARATIONI, Davide Giovanni Papa of CEO of registered business entity FTN Exporting Australia do hereby offer the product herein on behalf of an undisclosed principal(s) as seller and bear all obligations and liabilities of delivering said goods offered in accordance with the advice applied on this offer and subsequent contract. The contract once signed is a legally binding document, to all said par-ties to the contract.This offer is legally binding subject to said contract being issued. All parties privy to this transaction act upon the premise of good and honourable intent. All phone numbers / details of the seller once disclosed on the contract are confidentially served and that; all matters of business being applied whether successful of not remains private and confidential at all times. Any

obvious genuine errors and mistakes on this offer have no binding effect, once corrected on the contract.

Signed: Davide G.A.Papa Dated: 26 October 2018All contact details of seller will be advised on contract

Sellers website is; www.smice.net Buyer should read such a website before placing order

END BUYERS DETAILS AND DECLARATIONI, We the below entity as described below do hereby accept this offer subject to final contract of which we would like issued as soon as possible. I/We agree to the matter of ensuring the nature of business remains private and confidential at all times. I/We also confirm then the information pro-vided to be applied on the contract below are true and correct. We also declare to have DLC Credit facilities already established.

Name of Corporation and Buyer Name of Import manager conferring with FTNX Actual Postal Address

Phone Numbers ( fixed and cell) Facsimile Website Email Address

Name of Bank/Details used to issue the DLC: Name of Destination Port :

The quantity being ordered is 125,000 MT per month for: 12( ) 24( ) or 36 months ( )

Buyer( ) or Seller( ) on behalf of the buyer is to secure the BOL at FOB

Comment Area




If there is something you need to advise the seller about or something you may wish for us to con-sider please stipulate below is a simple easy to understand manner;123

Please advise the contract for our final consideration

Print Name

Signed /Sealed

Date

Notes: • If offer is in PDF form, buyer to make a printed copy, fill-in details with a blue ink pen, rescan the

document, and return it to the person serving the offer–in PDF form. • Whole document must be returned. Fragmented document not accepted.• Any alteration to the original printed aspect, cancels the offer.

End Of Offer: Original Offer : 9 Pages3332 Words

FULL AVERAGE ORIGINAL COMPARABLE SPECIFICATION Pre advised SGS analysis report dated: 4 Jan 2018
