AGREEMENT This agreement entered into on this 8th day of August 2008 between the Andhra Pradesh Mineral Development Corporation Limited, a Company incorporated under Companies Act 1956 and having its Registered Office at “KHANIJADHARA” Pancom Business Centre, 2nd Floor, 8-3-945, Ameerpet, Hyderabad – 500 073 represented by its Vice Chairman & Mg. Director Sri V D Rajagopal (Tel: (040) 23733153, 23733154, Fax: 040-23733152, email: firstname.lastname@example.org, email@example.com ) referred to as the “Corporation” which expression shall unless repugnant to the subject or context mean and include its successors, assigns and representatives etc., on one part, and M/s Ashapura Minechem Ltd, a Company incorporated under Companies Act 1956 and having its Registered Office at Jeevan Udyog Building, 3rd Floor, 278, D N Road, Fort, Mumbai – 400 001,Tel: 022-66651700 Fax: (022) 22079395, 22074452 email: firstname.lastname@example.org represented by Shri. Ananda Rao Diwate, Works Manager S/o. D. Ramaswamy aged about 39 years who is authorised to sign this contract hereinafter called “Buyer” which expression shall mean include their successors, assigns and representatives etc., on the other part, Whereas the Corporation invited sealed tenders under tender No. M&S- 65/BAR-LT/08, dt. 21.06.2008 for sale of 1,50,000 MTs of B grade Barytes Ore per annum with minimum 4.10 and below 4.20 Specific Gravity, loose, on Ex-Mangampeta Barytes mine basis for a period of three years for export purpose/captive consumption for Oil well drilling in India and the Buyer submitted his offer dt. 07.07.08 for a quantity of 50,000 MTs per annum at Rs. 1,490 per MT. The Corporation accepted the Buyers Offer and agreed to supply 50,000 MTs B grade Barytes Ore per annum with minimum 4.10 and below 4.20 Specific Gravity on average, loose on ex-Mangampeta Barytes mine basis for a period of 3 years under the above tender vide its letter No. M&S-65/BAR- LT/08/1485, dt. 30.07.2008 and the Buyer agreed to purchase 50,000 MTs B grade Barytes Ore per annum as per the terms and conditions below: NOW IT IS MUTUALLY AGREED AND DECLARED BY AND BETWEEN PARTIES HERETO AS FOLLOWS: 1. PURPOSE: i. The Buyer agrees to buy B grade Barytes Ore and the Corporation agrees to supply B grade Barytes Ore produced from its mines in Mangampeta village in Kadapa District (AP) under this contract for export from India/captive consumption for Oil well drilling in India and not for any other consumption/use in India. The Buyer further undertakes that the ore purchased from the Corporation will be exported by them/use for captive consumption for oil well drilling in India and shall not sell the material to any individual or company in India. ii. The Barytes Ore offered for supplies by the Corporation to the Buyer under this contract is meant for servicing the export contracts or orders with the foreign buyers/or for captive consumption in oil well drilling in India. The Buyer however shall sign an MOU with the Corporation for each export order or export contract furnishing the Corporation a copy of such export order/contract. 2. PERIOD OF THE CONTRACT: This contract will be in force for a period of three (3) years from the date of this contract. 3. COMMODITY: Indian Barytes Ore B Grade. 4. QUANTITY: i. 50,000 MTs (Fifty thousand tonnes only) per annum subject to prior commitments, availability of stocks, production and also ore requirements of the Corporation for supplies of Barytes powder as well as for supplies to Barium chemicals manufacturing units/local pulverising industries. The Corporation reserved 40% of the production from the mine for supplies to Barium chemical industries/local pulverising industries. ii. The Corporation reserves the right to sell the surplus quantities in any month as deemed fit. The decision of the Corporation is final and binding on the Buyer. iii. The Buyer agrees to buy a minimum of 4,167 MTs of B Grade Barytes Ore per month. iv. In the event the Corporation fails to supply: a. The backlog will be carried forward in the succeeding month(s) within the contract period or extended period, if any, under Force Majeure clause. b. The Corporation has no obligation to supply the backlog, if any, at the expiration of the contract period or extended period, if any, under Force Majeure clause. v. The Buyer shall not without express consent of the Corporation, purchase Barytes Ore with 4.10 and below 4.20 Specific Gravity during the tenure of the contract from any other source in India other than the Corporation until the Buyer purchases the agreed quantities as per this contract from the Corporation and unless the Corporation is not in a position to meet the requirements of the Buyer as per the contract. 5. QUALITY: Barytes ore supplied by the Corporation shall be with minimum 4.10 sp.gr. and below 4.20 sp.gr. on average for monthly drawal quantity. 6. SIZE: i. The minimum size of the ore would be 25 mm and maximum would be 203 mm with 10% tolerance on either side. ii. The Corporation at its discretion may ask the Buyer to make arrangements for sizing of the ore in which case the Corporation will reimburse sizing charges at Rs. 18.50/MT (Rupees Eighteen and paise fifty per tonne only) during the period of the contract on dispatch quantities on certification by the Mangampeta Barytes Project Office of the Corporation. The sized material shall be lifted by the Buyer within 2 (two) days. i. Any increase in sizing charges of the Barytes Ore shall be borne by the Buyer only. 7. DETERMINATION OF QUALITY: The quality as determined by the Corporation in its laboratory is final for all intents and purposes. The Buyer has the option to be present while drawing the samples from the lots and also during the analysis of samples at Mangampet/Hyderabad. No dispute regarding quality will be entertained after dispatch of the material. 8. DETERMINATION OF WEIGHT: The weight as recorded on the lorry weighbridge of the Corporation at Mangampet (v) in Kadapa District of Andhra Pradesh will be final for all intents and purposes and binding on the Buyer. 9. PRICE: i. Rs. 1,490 per MT (Rupees One thousand four hundred and ninty only) loose on ex-Mangampeta mine/plot on the basis of 4.15 sp.gr on average exclusive of the royalty payable by the Buyer at actuals. The present royalty rate is 5.50% of the sale price advalorem. ii. The sale price is exclusive of Royalty and other statutory levies like Cess taxes etc which shall be borne by the Buyer at actuals and also Rs. 10/MT (Rupees ten only per tonne) towards infrastructure development of local areas. In the event of imposition of fresh levies, duties, taxes etc. or modification/ revision thereof by the State Government/Central Government from time to time, the same shall be borne by the Buyer at actuals as and when made effective by the respective authorities. iii. The sale price is negotiable in the event of official Rupee devaluation, if any, announced by the Government of India/RBI. iv. The sale price of Rs. 1,490 per MT as above is valid for supplies for a period of one year. v. The Buyer agrees to increase the sale price by 5% over the 1 st year price for supplies in 2nd year period of the contract and agrees to increase the sale price by 5% over the 2nd year price for supplies during the 3rd year period of the contract. vi. The Buyer agrees to pay sale price with an increase of 5% over the 3 rd year price during the extended period under Force Majeure clause. 10. PREMIUM ON THE QUALITY: The Buyer shall pay Rs. 17/MT (Rupees Seventeen per tonne only) per each 0.01 unit increase in specific gravity over and above 4.15 and below 4.20 on average basis as per clause 5 above, fractions pro-rata. Similarly, the Corporation would reduce the price by Rs. 10/ MT (Rupees ten only per tonne) per each 0.01 unit decrease in SG below 4.15 upto 4.10, fractions pro rata. 11. PAYMENT: The Buyer is required to pay 100% value of the cargo and Sales Tax amount in advance for monthly drawal quantities or in lots of 5,000/10,000 MTs. The Sales Tax amount remitted by the Buyer will be refunded soon after proper documents as in clause 13.ii below are received by the Corporation to seek Sales Tax exemption. Royalty and Cess as per the prevailing rates as imposed from time to time by the Department of Mines & Geology shall be payable. Beside Rs. 10/MT for infrastructure development of local areas which will be spent exclusively for local area development by the Corporation shall be paid at Mangampeta Barytes Project. 12. DELIVERY: i. The Corporation will supply the material from 6 AM to 10 PM in accordance with clause 4.iii above on Ex-Mangampeta Barytes mine/stockyard basis. Deliveries during night times and on Sundays and holidays of Mangampeta Barytes Project generally will not be permitted. ii. The Corporation shall obtain royalty permits at the earliest possible on receipt of the advance payments from the Buyer. All other documents connecting with transportation and arrangements for transportation will be made by the Buyer himself. 13. SALES TAX: i. The sale price is exclusive of sale tax. ii. As per clause 1, the Barytes Ore supplies by the Corporation to the Buyer is for servicing the export contracts of the Buyer with the Overseas Buyers for export from India. Hence, no sale tax is chargeable on the quantities exported by the Buyer. However the Buyer must furnish copies of the export order(s) or contract(s) with foreign buyer, H form declaration supported by a copy of the Bill of Lading evidencing the shipment within 45 days from the date of the shipment. The Buyer shall obtain and submit Bill of Lading exclusively for the quantities supplied by the Corporation. If in case Sales Tax is still levied the Buyer shall pay the same to the Corporation within seven (7) days from the date of receipt of notice issued by the Corporation summoning for such payment of Sales Tax in the form of a crossed Demand Draft. iii. In respect of supply of Barytes ore for captive consumption in oil well drilling in India, the Sales Tax is payable at actuals and as applicable. 14. DISCLAIMER U/S 80 HHC OF IT ACT: i. At present no benefits are extended under the IT Act. ii. In case such benefits are available in future, the Buyer shall compensate the same to the extent of Ex-mine sale value. 15. FAILURE TO SUPPLY ON ACCOUNT OF UNAVOIDABLE CAUSES: In the event the Corporation fails to supply B grade Barytes Ore for unavoidable causes, including the executive action, interference of State/Central Government, the Corporation shall not be liable for any loss/damages to the Buyer. 16. MINING WORK TO BE UNDERTAKEN: The Buyers at their option in order of preference from H1 to H4 may undertake the work of excavation and removal of Overburden and Barytes ROM in its Barytes mine, if required by the Corporation, at the prevailing rates, terms and conditions, period etc. of the mining contract to the extent of quantities to be supplied/delivered under the supply agreements. In such an event they should be able to deploy the required machinery and equipment within 15 days from the date of acceptance of the offer by the Buyer. In such case they have to follow all terms and conditions of the excavation contract including payment of Performance Security Deposit etc. 17. FAILURE AND TERMINATION: i. Time and purchase shall be the essence of the contract. If the buyer fails to purchase and lift the material as per the mutually agreed delivery schedule or at any time repudiates the contract before expiry of such period, the Corporation without prejudice to any other right or remedy available to it reserves the right: a In the event where the performance in any six months period of the contract (i.e., either 1st or 2nd half of the contract year) is below 60% of the target, the Corporation shall have the right to terminate the contract and forfeit performance security deposit amount (including invocation PBG) to the extent of non-performance by serving 15 days notice. b. In the event where the Performance is 60% and below 90% of the target in any contract year, the Corporation shall have the right to levy penalty at the rate of 5% of the sale price for the entire balance quantity of such contract year. c. In the event where performance is 90% and above of the target in any contract year, the Corporation shall not levy any penalty and is considered as satisfactory performance. d. Notwithstanding the above, the Corporation will be at liberty to recover losses incurred by the Corporation on disposal of the stocks at the risk and cost of the Buyer. ii. In case the Buyer does not adhere to the monthly delivery schedule incorporated in the contract, his claim over the backlog quantities is subject to availability of material/stock. 18. PERFORMANCE SECURITY DEPOSIT CUM PERFORMANCE BANK GUARANTEE: i. a. The Buyer submitted a Performance Security Deposit (PSD) amounting to Rs. 74,50,000/-(Rupees Seventy four lakhs and fifty thousands only) in the form of Bank Guarantee No. 28/34 GTEC No. 01501PEBG080039, dt. 04.08.2008 valid upto 22.02.2012 issued by Bank of India, Mumbai Overseas Branch, 70/80 M. G. Road, Mezzanine Floor, Fort, Mumbai – 400 001. The Corporation shall have the fullest liberty to exercise its right to enforce the said Performance Bank Guarantee (PBG) for the purpose of this contract and binding on the Buyer. b. The PSD cum PBG shall not bear any interest. Any bank charges or commission on account of furnishing the PBG shall be borne by the Buyer only. c. The PSD cum PBG as above will be returned to the Buyer by the Corporation within 7 months from the date of expiry of the contract, on furnishing of an “unconditional no claim certificate by the Buyer” and “no dues certificate” issued by the General Manager, Mangampeta Barytes Project of the Corporation. ii. The Corporation reserves, the right to forfeit or adjust the amount recoverable as penalty against the PSD cum PBG including invocation of PBG in accordance with failure and termination clause (17) above. The decision of the Corporation is binding on the Buyer. iii. The Corporation also reserves the right to adjust any sum of Money due and payable by the Buyer to the Corporation against PSD-cum-PBG in case the Corporation is unable to recover the due amount from the Buyer. The decision of the Corporation is binding on the Buyer. 19. TITLE AND RISK: The title with regard to cargo shall pass on to the Buyer when the Corporation received payment and risk shall pass on to the Buyer when the cargo is delivered by the Corporation to the Buyer on ex- mine/stockyard basis. 20. ASSIGNMENT AND SUBLETTING: The assignment and subletting of the contract is not generally permissible except with the written consent of the Corporation. The Corporation would consider assignment or subletting between successful bidders of the Corporation under the tender No. M&S-65/ BAR-LT/08, dt. 21.06.2008 from H1 to H4. 21. FORCE MAJEURE: In the event of either party being rendered physically unable by force majeure to perform any obligation required to be performed by them under the contract, the relative obligation of the party affected by such force majeure shall be suspended for the period during which such causes actually lasts. The term “FORCE MAJEURE” shall mean acts of God, war, Civil riots/movements, fire directly affecting contract, flood, mine inundation, earthquakes, hurricane, lockouts, strike, Civil war, compliance with any statute or regulation of the Government. Upon the occurrence of such causes, the party alleging that it has been rendered unable as aforesaid thereby shall notify the other party in writing the beginning of the cause amounting to Force Majeure as also the ending of the said causes by giving notice to the other party within a week of the beginning and ending of the cause respectively. Time for performance of the relative obligation suspended by Force Majeure shall then stand extended by the period for which such cause lasts after completion of 3 year contract Period. The Buyer agrees to pay sale price with an increase of 5% over the 3 rd year price during the extended period under Force Majeure clause. 22. This Agreement is subject to result of the following Writ Petitions filed in Hon’ble High Court of Andhra Pradesh Hyderabad by the parties mentioned against each W.P. W.P. No. Petitioner 1. 14734/2008 M/s Trimex Industries Ltd, Chennai 2. 14911/2008 M/s Gimpex Ltd, Chennai 3. 14912/2008 M/s Stone & Slates Pvt Ltd, Chennai 4. 14913/2008 M/s Mercury Granites Pvt Ltd, Chennai 23. RESOLUTION OF THE DISPUTES: All the questions, disputes, differences arising under, out of or in connection with the contract shall be subject to exclusive jurisdiction of the Civil Court within the local limits of Hyderabad, Andhra Pradesh where this contract is entered into. In witness whereof Sri V D Rajagopal and Sri Ananda Rao Diwate have setforth their hands on the day and year as mentioned above in duplicate and retained one signed copy each in their possession. FOR THE ANDHRA PRADESH MINERAL DEVELOPMENT CORPORATION LIMITED (V D RAJAGOPAL) VC & Mg. Director for M/s Ashapura Minechem Ltd (Ananda Rao Diwate) Works Manager Witnesses: 1. 2.