Bidding Documents

NIS j.s.c. Novi Sad

BIDDING DOCUMENTS

FOR PROCUREMENT OF CPC BLEND CRUDE OIL

(No. 2 / 2015 )

Belgrade, October 2015 ii

Table of Contents

Invitation for Bids...... 3

PART 1 – Bidding Procedures...... 4 Section I. Instruction to Bidders...... 4 Section II. Bidding Data Sheet (BDS)...... 17 Section III. Qualification Criteria...... 20 Section IV. Bidding Forms...... 21

PART 2 – Procurement Requirements...... 30 Section V. Schedule of Requirements...... 30

PART 3 – Contract...... 31 Section VI. Contract Forms...... 31 3

Invitation for Bids

NIS j.s.c. Novi Sad (the “Buyer”) invites interested parties (the “Bidders”) for submission of bids (each a “Bid”) in the procedure for:

PROCUREMENT OF CPC BLEND CRUDE OIL GRADE (No. 2 /2015) all as described in and in accordance with the terms of the attached Binding Documents.

Bids must be submitted in sealed envelopes to the Buyer no later than 10:00 a.m. local time on 12th of October 2015. All Bids shall be delivered at the following address:

NIS j.s.c. Novi Sad 1 Milentija Popovića Street, ground floor, room 21 11070 Novi Beograd, Serbia with note: NE OTVARATI - ZA POZIV BR. 2 /2015 SIROVA NAFTA DO NOT OPEN – BID FOR THE PROCUREMENT No. 2 / 2015 CRUDE OIL

A complete set of the Bidding Documents can be found at www.nis.eu

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PART 1 – Bidding Procedures

Section I. Instruction to Bidders

Table of Clauses

A. General...... 6 1. Scope of Bid...... 6 2. Fraud and Corruption...... 6

B. Contents of Bidding Documents...... 7 3. Sections of Bidding Documents...... 7 4. Clarification of Bidding Documents...... 7 5. Amendment of Bidding Documents...... 8

C. Preparation of Bids...... 8 6. Cost of Bidding...... 8 7. Language of Bid...... 8 8. Documents Comprising the Bid...... 8 9. Bid Submission Form and other Forms...... 9 10. Alternative Bids...... 9 11. Bid Prices and Discounts...... 9 12. Currency of Bid...... 9 13. Documents Establishing the Conformity of the Crude Oil...... 9 14. Documents Establishing the Qualifications of the Bidder...... 9 15. Period of Validity of Bids...... 10 16. Bid Security...... 10 17. Format and Signing of Bid...... 11

D. Submission and Opening of Bids...... 11 18. Submission, Sealing and Marking of Bids...... 11 19. Deadline for Submission of Bids...... 11 20. Late Bids...... 12 21. Bid Opening...... 12 22. Modification of Bids...... 12

E. Evaluation and Comparison of Bids...... 12 23. Confidentiality...... 12 24. Clarification of Bids...... 12 25. Negotiation of the Bid Price...... 13 26. Responsiveness of Bids...... 13

EAST\42375826.4 Section I Instructions to Bidders 5

27. Nonconformities, Errors, and Omissions...... 13 28. Evaluation and comparison of Bids...... 13 29. Qualification of the Bidder...... 14 30. Buyer’s Right to Accept Any Bid, to Reject Any or All Bids and withdraw the Bid. 14

F. Award of Contract...... 14 31. Award Criteria...... 14 32. Buyer’s Right to Vary Quantities at Time of Award...... 15 33. Notification of Award...... 15 34. Signing of Contract...... 15 35. Performance Security...... 15 6 Section I Instructions to Bidders

Section I. Instructions to Bidders A. General 1. Scope of Bid 1.1 The Buyer issues these Bidding Documents for the procurement of Crude Oil (No. 2 / 2015) as further specified in Section V, Schedule of Requirements. 1.2 Throughout these Bidding Documents: (a) the term “in writing” means communicated in written form (e.g. by mail, e-mail, fax, telex) with proof of receipt; (b) if the context so requires, “singular” means “plural” and vice versa; (c) “day” means calendar day; and (d) “ Business Day” means any day that is not a Saturday, Sunday, or other day on which commercial banks in Belgrade are required by law to remain closed. 2. Fraud and 2.1 The Buyer requires that bidders, suppliers, contractors, Corruption concessionaires and consultants observe the highest standard of ethics during the procurement and execution of any contracts with the Buyer. In pursuance of this policy, the Buyer: (a) defines, for the purposes of this provision, the terms set forth below as follows: (i) "corrupt practice" means the offering, giving, receiving, or soliciting, directly or indirectly, anything of value to influence improperly the actions of another party. (ii) "fraudulent practice" means any act or omission, including a misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party to obtain a financial or other benefit or to avoid an obligation. (iii) “coercive practice” means impairing or harming, or threatening to impair or harm, directly or indirectly, any party or the property of the party to influence improperly the actions of a party. (iv) “collusive practice” means an arrangement between two or more parties designed to achieve an improper purpose, including influencing improperly the actions of another party; (b) will reject a proposal for award if it determines that a bidder recommended for award has engaged in corrupt, fraudulent, coercive or collusive practices in competing for Section I Instructions to Bidders 7

the contract in question; (c) will declare a firm ineligible indefinitely or for a stated period of time, to be awarded a contract with the Buyer if it at any time determines that: (i) the firm has engaged in corrupt, fraudulent, coercive or collusive practices in competing for, or in executing, a contract for the Buyer; or (ii) the firm has been found by a judicial process or other official inquiry to have engaged in corrupt, fraudulent, coercive or collusive practices. B. Contents of Bidding Documents 3. Sections of 3.1 The Bidding Documents consist of Parts 1, 2, and 3, which Bidding include all the Sections indicated below, and should be read in Documents conjunction with any Addendum issued in accordance with ITB Clause 5. PART 1 Bidding Procedures  Section I. Instructions to Bidders (ITB)

 Section II. Bidding Data Sheet (BDS)

 Section III. Evaluation and Qualification Criteria

 Section IV. Bidding Forms PART 2 Procurement Requirements

 Section V. Schedule of Requirements PART 3 Contract

 Section VI. Contract Forms 3.2 The Invitation for Bids issued by the Buyer is not part of the Bidding Documents. 3.3 The Buyer is not responsible for the completeness of the Bidding Documents and their addendum, if they were not obtained directly from the Buyer. 3.4 The Bidder is expected to examine all instructions, forms, terms, and specifications in the Bidding Documents. Failure to furnish all information or documentation required by the Bidding Documents may result in the rejection of the Bid. 4. Clarification of 4.1 A prospective Bidder requiring any clarification of the Bidding Bidding Documents shall contact the Buyer’s representatives specified Documents in the BDS. 8 Section I Instructions to Bidders

4.2 The Buyer will respond in writing to any request for clarification, provided that such request is received no later than five (5) days prior to the deadline for submission of Bids. The Buyer may forward copies of its response to all those who have acquired the Bidding Documents directly from it, including a description of the inquiry but without identifying its source. Should the Buyer deem it necessary to amend the Bidding Documents as a result of a clarification, it shall do so following the procedure under ITB Clause 5 and ITB Sub-Clause 19.2. 5. Amendment of 5.1 At any time prior to the deadline for submission of Bids, the Bidding Buyer may amend the Bidding Documents by issuing Documents addendum. 5.2 Any addendum issued shall be part of the Bidding Documents and shall be communicated in writing to all who have obtained the Bidding Documents directly from the Buyer. 5.3 To give prospective Bidders reasonable time in which to take an addendum into account in preparing their Bids, the Buyer may, at its discretion, extend the deadline for the submission of Bids, pursuant to ITB Sub-Clause 19.2 C. Preparation of Bids 6. Cost of Bidding 6.1 The Bidder shall bear all costs associated with the preparation and submission of its Bid, and the Buyer shall not be responsible or liable for those costs, regardless of the conduct or outcome of the bidding process. 7. Language of 7.1 The Bid, as well as all correspondence and documents relating Bid to the Bid exchanged by the Bidder and the Buyer, shall be written in the language specified in the BDS. Supporting documents and printed literature that are part of the Bid may be in another language provided they are accompanied by an accurate translation of the relevant passages into the language specified in the BDS, in which case, for purposes of interpretation of the Bid, such translation shall govern. 8. Documents 8.1 The Bid shall comprise the following: Comprising the Bid (a) Bid Submission Form; (b) Bid Security; (c) Bidder’s Statement of Acceptance of Bidding Documents; (d) Letter of Intent Form; (e) Quality Specification Form; (f) written confirmation authorizing the signatory of the Bid to Section I Instructions to Bidders 9

commit the Bidder, in accordance with ITB Clause 17; (g) documentary evidence in accordance with ITB Clause 14 establishing the Bidder’s qualifications to perform the contract if its Bid is accepted; and (h) any other document specified in the BDS. 9. Bid Submission 9.1 The Bidder shall submit the Bid Submission Form, the Bidder’s Form and other Statement of Acceptance of Bidding Documents, Letter of Forms Intent Form and Quality Specification Form using the forms furnished in Section IV, Bidding Forms. These forms must be completed without any alterations to its format, and no substitutes shall be accepted. All blank spaces shall be filled in with the information requested. 10. Alternative Bids 10.1 Alternative Bids shall not be considered. 11. Bid Prices and 11.1 The prices and discounts quoted by the Bidder in the Bid Discounts Submission Form shall conform to the requirements specified below. 11.2 The price to be quoted in the Bid Submission Form shall be the total price of the Bid (the “Bid Price”), excluding any discounts offered. 11.3 The Bidder shall quote any unconditional discounts and indicate the method for their application in the Bid Submission Form. 11.4 The term CIF, and other similar terms shall be governed by the rules prescribed in the current edition of Incoterms, published by The International Chamber of Commerce, as specified in the BDS. 12. Currency of Bid 12.1 The Bidder shall express the Bid Price in the currency specified in the BDS. 13. Documents 13.1 To establish the conformity of the Crude Oil to the Bidding Establishing the Documents, the Bidder shall furnish as part of its Bid the Conformity of documents specified in the BDS evidencing that the Crude Oil the Crude Oil conforms to the quality specifications specified in Section V, Schedule of Requirements. 14. Documents 14.1 To establish that the Bidder is qualified to perform the contract Establishing the if its Bid is accepted, the Bidder shall furnish as part of its Bid Qualifications the documents specified in the BDS evidencing that the Bidder of the Bidder meets each of the qualification criterion specified in Section III, Evaluation and Qualification Criteria. 14.2 The Bidder shall promptly notify the Buyer in writing of any changes with respect to the information provided to the Buyer in accordance with ITB Sub-Clause 14.1, but not later than 5 10 Section I Instructions to Bidders

days from the date of such change. The notification shall be documented as necessary. 15. Period of 15.1 Bids shall remain valid for the period specified in the BDS. A Validity of Bids Bid valid for a shorter period shall be rejected by the Buyer as non responsive. 15.2 Prior to the expiration of the Bid validity period, the Buyer may request Bidders to extend the period of validity of their Bids for the additional period specified in the BDS. If a Bid Security is requested in accordance with ITB Clause 16, it shall also be extended for a corresponding period. 16. Bid Security 16.1 The Bidder shall furnish as part of its Bid, a Bid Security as specified in the BDS. 16.2 The Bid Security shall be in the amount specified in the BDS and shall: (a) be in the form of a letter of credit or bank guarantee issued by a reputable institution selected by the Bidder and advised by the bank specified in the BDS. Letter of credit or bank guarantee should be issued by the bank acceptable to Buyer;

(b) be substantially in accordance with the form of Bid Security included in Section IV, Bidding Forms;

(c) be payable promptly upon written demand by the Buyer in case the conditions listed in ITB Clause 16.5 are invoked;

(d) remain valid for the period specified in the BDS;

16.3 Any Bid not accompanied by a substantially responsive Bid Security in accordance with ITB Sub-Clause 16.1, shall be rejected by the Buyer as non-responsive. 16.4 The Bid Security of unsuccessful Bidders shall be returned as promptly as possible upon the successful Bidder’s furnishing of the Performance Security pursuant to ITB Clause 35. 16.5 The Bid Security may be forfeited: (a) if a Bidder withdraws its Bid during the period of Bid validity specified by the Bidder on the Bid Submission Form; or

(b) if the successful Bidder fails to:

()i sign the Contract in accordance with ITB Clause 34;

()ii furnish a Performance Security in accordance with Section I Instructions to Bidders 11

ITB Clause 35.

16.6 The Bid Security of a JV must be in the name of the JV that submits the Bid. If the JV has not been legally constituted at the time of bidding, the Bid Security shall be in the names of all future partners. 17. Format and 17.1 The Bidder shall prepare one original of the documents Signing of Bid comprising the Bid as described in ITB Clause 8 and clearly mark it “ORIGINAL.” In addition, the Bidder shall submit copies of the Bid, in the number specified in the BDS and clearly mark them “COPY.” In the event of any discrepancy between the original and the copies, the original shall prevail. 17.2 The original and the copy of the Bid shall be typed or written in indelible ink and shall be signed by a person duly authorized to sign on behalf of the Bidder. 17.3 Any interlineations, erasures, or overwriting shall be valid only if they are signed or initialed by the person signing the Bid. D. Submission and Opening of Bids 18. Submission, 18.1 Bidders may always submit their Bids by mail or by hand. Sealing and Bidders shall enclose the original and each copy of the Bid, Marking of including alternative Bids, if permitted in accordance with ITB Bids Clause 10, in separate sealed envelopes, duly marking the envelopes as “ORIGINAL” and “COPY.” These envelopes containing the original and the copies shall then be enclosed in one single envelope. The rest of the procedure shall be in accordance with ITB sub-Clauses 18.2 and 18.3. 18.2 The inner envelopes shall bear the name and address of the Bidder. 18.3 The outer envelopes shall: a) be addressed to the Buyer in accordance with ITB Sub- Clause 18.1; and b) bear a warning not to open before the time and date for the Bid opening, in accordance with ITB Sub-Clause 21.2. 18.4 If all envelopes are not sealed and marked as required, the Buyer will assume no responsibility for the misplacement or premature opening of the Bid. 19. Deadline for 19.1 Bids must be received by the Buyer at the address and no later Submission of than the date and time specified in the BDS. Bids 19.2 The Buyer may, at its discretion, extend the deadline for the submission of Bids by amending the Bidding Documents in accordance with ITB Clause 5, in which case all rights and 12 Section I Instructions to Bidders

obligations of the Buyer and Bidders previously subject to the deadline shall thereafter be subject to the deadline as extended.

20. Late Bids 20.1 The Buyer shall not consider any Bid that arrives after the deadline for submission of Bids, in accordance with ITB Clause 19. Any Bid received by the Buyer after the deadline for submission of Bids shall be declared late, rejected, and returned unopened to the Bidder. 21. Bid Opening 21.1 The Buyer shall conduct the Bid opening in public at the address, date and time specified in the BDS. 21.2 All envelopes shall be opened one at a time, reading out: the name of the Bidder; the Bid Price, including any discounts; the presence of a Bid Security and any other details as the Buyer may consider appropriate. Only discounts read out at bid opening shall be considered for evaluation. No Bid shall be rejected at Bid opening except for late Bids, in accordance with ITB Sub-Clause 20.1. 21.3 The Buyer shall prepare a record of the Bid opening that shall include, as a minimum: the name of the Bidder; the Bid Price, including any discounts; and the presence or absence of a Bid Security. The Bidders’ representatives who are present shall be requested to sign the attendance sheet. A copy of the record shall be distributed to all Bidders who submitted Bids in time. 22. Modification of 22.1 After the Bid opening, the Bidders shall not submit additional Bids Bids or modify the Bids already submitted except in accordance with ITB Sub-Clause 25.1 and Clause 27. E. Evaluation and Comparison of Bids 23. Confidentiality 23.1 Information relating to the examination, evaluation, comparison, and post qualification of Bids, and recommendation of contract award, shall not be disclosed to Bidders or any other persons not officially concerned with such process until publication of the Contract Award. 23.2 Any effort by a Bidder to influence the Buyer in the examination, evaluation, comparison, and post qualification of the Bids or contract award decisions may result in the rejection of its Bid. 23.3 Notwithstanding ITB Sub-Clause 23.2, from the date of the Bid opening to the time of Contract Award, if any Bidder wishes to contact the Buyer on any matter related to the bidding process, it should do so in writing. 24. Clarification of 24.1 To assist in the examination, evaluation, comparison and post- Bids qualification of the Bids, the Buyer may, at its discretion, ask Section I Instructions to Bidders 13

any Bidder for a clarification of its Bid. Any clarification submitted by a Bidder in respect to its Bid and that is not in response to a request by the Buyer shall not be considered. The Buyer’s request for clarification and the response shall be in writing. 25. Negotiation of 25.1 The Buyer reserves the right to negotiate with any Bidder the Bid the Bid Price Price on the date, time and place specified in the BDS. Only Bidders’ representatives holding special written authorizations may negotiate the Bid Price with the Buyer. The Buyer reserves the right to exclude from the negotiation procedure the least favorable bid. 26. Responsiveness 26.1 The Buyer’s determination of a Bid’s responsiveness is to be of Bids based on the contents of the Bid itself. 26.2 A substantially responsive Bid is one that conforms to all the terms, conditions, and specifications of the Bidding Documents without material deviation, reservation, or omission. A material deviation, reservation, or omission is one that: (a) affects in any substantial way the scope, quality, or performance of the Contract; or (b) limits in any substantial way, inconsistent with the Bidding Documents, the Buyer’s rights or the Bidder’s obligations under the Contract; or (c) if rectified would unfairly affect the competitive position of other Bidders presenting substantially responsive Bids. 26.3 If a Bid is not substantially responsive to the Bidding Documents, it shall be rejected by the Buyer and may not subsequently be made responsive by the Bidder by correction of the material deviation, reservation, or omission. 27. Nonconformi- 27.1 Provided that a Bid is substantially responsive, the Buyer may ties, Errors, and waive any non-conformities or omissions in the Bid that do not Omissions constitute a material deviation. 27.2 Provided that a Bid is substantially responsive, the Buyer may request that the Bidder submit the necessary information or documentation, within a reasonable period of time, to rectify nonmaterial nonconformities or omissions in the Bid related to documentation requirements. Failure of the Bidder to comply with the request may result in the rejection of its Bid. 27.3 If the Bidder that submitted the lowest evaluated Bid does not accept the correction of errors, its Bid shall be rejected. 28. Evaluation and 28.1 The Buyer shall evaluate each Bid that has been determined, up to comparison of this stage of the evaluation, to be substantially responsive. Bids 28.2 The Buyer shall compare all substantially responsive Bids to 14 Section I Instructions to Bidders

determine the lowest-evaluated Bid. 28.3 To evaluate a Bid, the Buyer shall consider the factors, methodology and criteria specified in the BDS. 29. Qualification of 29.1 The Buyer shall determine to its satisfaction whether the Bidder the Bidder that is selected as having submitted the lowest evaluated and substantially responsive Bid is qualified to perform the Contract satisfactorily. 29.2 The determination shall be based upon an examination of the documentary evidence of the Bidder’s qualifications submitted by the Bidder, pursuant to ITB Clause 14. 29.3 An affirmative determination shall be a prerequisite for award of the Contract to the Bidder. A negative determination shall result in disqualification of the Bid, in which event the Buyer shall proceed to the next lowest evaluated Bid to make a similar determination of that Bidder’s capabilities to perform satisfactorily. 30. Buyer’s Right 30.1 The Buyer reserves the right to reject any Bid with any of the to Accept Any Bidders if: Bid, to Reject Any or All Bids (a) Any debt-claim relationship between the Buyer and the and withdraw Bidder remained unsettled, no matter what legal action has the Bid been taken; and (b) A prior contractual relationship between the Bidder and the Buyer has been terminated due to Bidder's fault. 30.2 The Buyer reserves the right to accept or reject any Bid, and to annul the bidding process and reject all Bids at any time prior to contract award, without obligation to explain the reasons for such decision. Should this happen, Bidders shall not be entitled to compensation for any damages or costs incurred by the Bidder in this bidding process. 30.3 The Buyer reserves the right to withdraw the bidding process for any reason at any time and re-issue it at a later date under the same terms set forth hereunder or under different terms. F. Award of Contract 31. Award Criteria 31.1 The Buyer shall award the Contract to the Bidder whose offer has been determined to be the most favorable evaluated Bid with best offered commercial terms and conditions of delivery to NIS including economic effect of preferential regime status performance, EU residential status, payment deadline and is substantially responsive to the Bidding Documents, provided further that the Bidder is determined to be qualified to perform the Contract satisfactorily. In case of preferential regime non performance in a deal with company as Seller of CPC Blend Section I Instructions to Bidders 15

crude oil grades (to which this Contract is awarded and which guaranteed preferential regime in this process), Seller would be obliged to compensate NIS amount equivalent to the amount of import customs duties which NIS need to pay for import customs clearance of cargoes delivered. 32. Buyer’s Right 32.1 At the time the Contract is awarded, the Buyer reserves the right to Vary to increase or decrease the quantity of Crude Oil originally Quantities at specified in Section V, Schedule of Requirements, provided this Time of Award does not exceed the percentages specified in the BDS. 33. Notification of 33.1 Prior to the expiration of the period of Bid validity, the Buyer Award shall notify the successful Bidder, in writing, that its Bid has been accepted. 33.2 Upon the successful Bidder’s furnishing of the signed Contract Form and performance security pursuant to ITB Clause 35, the Buyer will promptly notify each unsuccessful Bidder and will discharge its Bid Security, pursuant to ITB Clause 16.4. 34. Signing of 34.1 Within seven (7) days after notification, the Buyer shall send the Contract successful Bidder the Contract. 34.2 Within seven (7) days of receipt of the Contract, the successful Bidder shall sign, date, and return it to the Buyer. 35. Performance 35.1 Within three (3) days of the receipt of signed contract from the Security Buyer, the successful Bidder shall furnish the Performance Security as specified in the BDS using for that purpose the Performance Security Form included in Section IX Contract forms. Performance Bond Guarantee should be issued by the bank acceptable to Buyer. 35.2 Failure of the successful Bidder to submit the above-mentioned Performance Security or sign the Contract shall constitute sufficient grounds for the annulment of the award and forfeiture of the Bid Security. In that event the Buyer may award the Contract to the next lowest evaluated Bidder, whose offer is substantially responsive and is determined by the Buyer to be qualified to perform the Contract satisfactorily. 35.3 The Bidders shall submit a letter of intent issued by a commercial bank, by which the Bank binds itself to issue, if the Bidder is selected, the Performance Security in the form furnished in Section 36. Important IV, Bidding Forms. notice: Preferential 36.1 One of the main intention of NIS company in crude oil procurement regime process is to reach crude oil import preferential status (with no paying of crude oil import customs tax) fully acting in accordance with legislature and all relevant documents and State Protocols signed. Having in mind this you are kindly asked to inform us about your every possibility of application of the free 16 Section I Instructions to Bidders

trade regime in accordance with international agreements which apply the Republic of Serbia. Referring to this, as a potential bidder, we would need your statement specifying the way and model of fulfilling of all the conditions needed for crude oil preferential status to be realized and obtained. 17

Section II. Bidding Data Sheet (BDS) The following specific data shall complement, supplement, or amend the provisions in the Instructions to Bidders (ITB). Whenever there is a conflict, the provisions herein shall prevail over those in ITB.

ITB Clause A. General Reference ITB 1.1 The Buyer is: NIS j.s.c. Novi Sad B. Contents of Bidding Documents ITB 4.1 For c larification only, please contact following representatives from 09.00 am to 05.00 pm (local time) during Business Days:

For commercial issues: Mrs. Jasmina Belović Phone:+381 64 888 50 39 E-mail: [email protected]

For financial issues: Mrs. Ivana Žarković - Petruševski Phone: +381 64 888 30 39 E-mail: [email protected] C. Preparation of Bids ITB 7.1 The language of the Bid is: English or Serbian

ITB 8.1(e) The Bidder shall submit the following additional documents in its Bid: None. ITB 10.1 Alternative Bids shall not be considered. ITB 11.4 The Incoterms edition is: Incoterms 2000 / 2010 ITB 12.1 The currency of the Bid Price is: United States Dollars ITB 13.1 The Bidder shall submit the following additional document to evidence the conformity of the Crude Oil to the Bidding Documents: A detailed signed and verified certificate of quality for needed crude oil (crude oil assay) using the Quality Specification Form included in Section IV, Bidding Forms ITB 14.1 The Bidder shall submit the following additional documents to evidence that the Bidder is qualified to perform the contract:

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a. Certificates issued by the commercial registry or some other registry of the country of legal residence of the Bidder certifying that the Bidder is qualified to perform particular activities; b. Certificate issued by the relevant tax authorities or by a financial officer of the Bidder certifying that the Bidder has settled all outstanding tax obligations; c. Audited financial statements for the last three fiscal years and unaudited interim financial statements for each period ended since the end of the last fiscal year; d. A specification of volumes and values of crude oil delivered in the last three years together with references for each such delivery. The Buyer reserves the right to check the references.

ITB 15.1 The Bid validity period shall be 30 days after the date of the Bid opening ITB 15.2 The Bid validity period may be extended for an additional period of 30 days upon Buyer’s request ITB 16.1 Bid shall include a Bid Security in accordance with the form included in Sec- tion IV Bidding Forms

ITB 16.2 The amount of the Bid Security shall be: US$ 60.500,00 The Bid Security to be issued in favor of NIS j.s.c. Novi Sad, Narodnog fronta 12, 21000 Novi Sad, Republic of Serbia ITB 16.2(a) The Advising Bank shall be: BANCA INTESA AD BEOGRAD Swift code: DBDBRSBG ITB 16.2(e) The Bid Security shall remain valid for 30 days after the date of the Bid opening. Upon Buyer’s request the validity of the Bid Security may be extended for an additional period of 30 days ITB 17.1 In addition to the original of the Bid, the number of copies is: 1 D. Submission and Opening of Bids ITB 19.1 For Bid submission purposes, the Buyer’s address is: NIS j.s.c. Novi Sad 1 Milentija Popovića Street, ground floor, registration office, room 21 11070 Novi Beograd, Serbia with note: NE OTVARATI-ZA POZIV BR. 2/2015 SIROVA NAFTA DO NOT OPEN – BID FOR THE PROCUREMENT No. 2 /2015 CRUDE OIL 19

The deadline for the submission of Bids is: Date: October 12th, 2015 Time: 10:00 a.m. (Buyer's local time) ITB 21.1 The Bid opening shall take place at: NIS j.s.c.Novi Sad 1 Milentija Popovića Street, 6th floor, room 601 11070 Novi Beograd, Serbia Date: October 12th, 2015 Time: 10:30 a.m. (Buyer’s local time) E. Evaluation and Comparison of Bids ITB 25.1 The negotiation of the Bid Price shall take place at: NIS j.s.c. Novi Sad 1 Milentija Popovića Street, 6th floor, room 601 11070 Novi Beograd, Serbia Date: October 12th, 2015 Time: 15:00 a.m. (Buyer’s local time) ITB 28.3 Evaluation will be done for the total quantity of the Section stated in this documentation F. Award of Contract ITB 32.1 The maximum percentage by which quantities may be increased is: 10% The maximum percentage by which quantities may be decreased is: 10% ITB 35.1 The most successful Bidder will be required to provide a Performance Bond in an amount equal of the 2% of the contract value based on average Brent (Dated) for October 2015. Performance Bond Guarantee should be valid until January 31st, 2016. The Performance Bond to be issued in favor of NIS j.s.c. Novi Sad, Narodnog fronta 12, 21000 Novi Sad, Republic of Serbia The Advising Bank shall be: BANCA INTESA AD BEOGRAD Swift code: DBDBRSBG 20

Section III. Qualification Criteria

1. Qualification Requirements (ITB 29.1) After determining the lowest-evaluated Bid in accordance with ITB Sub-Clause 28.2, the Buyer shall carry out the post qualification of the Bidder in accordance with ITB Clause 29, using only the requirements specified. Requirements not included in the text below shall not be used in the evaluation of the Bidder’s qualifications. (a) Financial and Business Capability: The Bidder shall (i) be registered for particular activities with the relevant Government Authorities; (ii) have settled due taxes or any other equivalent form of public taxation in accordance with the laws of the Republic of Serbia, if applicable to the Bidder, and of any other jurisdiction where the Bidder has its legal residence and (iii) have necessary financial and business capability. (b) Experience and Technical Capacity: - Seller or Seller’s parent company shall have traded at least 3,000,000 MT of crude oil in the last three years

Section IV Bidding Forms 21

Section IV. Bidding Forms

Table of Forms

Bid Submission Form...... 22

Form of Bidder's Statement of Acceptance of Bidding Documents...... 24

Bid Security (Bid Bond Form)...... 25

Form of Commercial Bank’s Letter of Intent...... 26

Quality Specification Form...... 27

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Bid Submission Form [The Bidder shall fill in this Form in accordance with the instructions indicated No alterations to its format shall be permitted and no substitutions shall be accepted.]

BIDDING PROCEDURE No 2/2015

FIRM AND SEAT OF BIDDER TO BE FILLED BY THE BIDDING PARTY

FIRST AND LAST NAMES OF THE AUTHORIZED PERSON (SIGNATORY OF TO BE FILLED BY THE BIDDING PARTY THE CONTRACT)

OFFER NO. TO BE FILLED BY THE ORDERING PARTY OFFER DATE TO BE FILLED BY THE ORDERING PARTY

1. PRODUCT AND QUALITY TO BE FILLED BY THE BIDDING PARTY

QUANTITY (M.T) LOADING PORT 2. TO BE FILLED BY THE BIDDER

BIDDERS ARE REQUESTED TO BID ALL PRICE ALTERNATIVES WAY OF PAYMENT PRICE OF GOODS (USD) PAYMENT DEADLINE

30 days after B/L date/after delivery at PRICE Port of EX discharge TANK/ 3. CIF/DE 60 days after S/ DAT/ OPPEN ACCOUNT B/L date/after TO BE FILLED BY THE BIDDER DAP delivery at ort OMISA of discharge LJ

90 days after B/Ldate/after delivery at Port of discharge Section IV Bidding Forms 23

Important notice: we kindly ask all bidders to offer, if they are able, conditions for all three specified payment deadlines. If not, then to offer a deadline which they are able to guarantee. We would also like to point out that speaking about CIF Omisalj delivery basis, to NIS would be very acceptable for such delivery to have payment deadline counting after date of NOR (Notice of readiness) issued at Omisalj Port

CRUDE OIL TRADE REFERENCE 4. TO BE FILLED BY THE BIDDER

VALIDITY OF BID 5. TO BE FILLED BY THE BIDDER

BID BOND 6. TO BE FILLED BY THE BIDDER

CONTACT PERSON- FIRST TO BE FILLED BY THE BIDDER AND LAST NAME

TELEPHONE NUMBER TO BE FILLED BY THE BIDDER

FAX NUMBER TO BE FILLED BY THE BIDDER

E-MAIL ADDRESS TO BE FILLED BY THE BIDDER

SIGNATURE:

BIDDER'S SEAL: * NOTE: THE BIDDER IS OBLIGED TO FILL IN ONLY THOSE PARTS DESIGNATED WITH “TO BE FILLED BY THE BIDDER”.

Remark: The Buyer reserves the right to exclude from the negotiation procedure the least favorable bid Section IV Bidding Forms 24

Form of Bidder's Statement of Acceptance of Bidding Documents

We hereby declare to the Buyer, NIS j.s.c. Novi Sad, that the Bid was made in accordance with the terms and conditions set forth in the Bidding Documents for the Procurement Procedure No. 2/2015, which are fully acceptable to us and constitute an integral part of our Bid, and that the content of the original and the copy of our Bid is identical.

Signature:

Seal of the Bidder:

EAST\42375826.4 25

Bid Security (Bid Bond Form)

Beneficiary

We have been informed that ______(Bidder) have submitted to you on______under your Bidding Procedure No ______/2015 their Bid for______According to your bidding conditions, bidders are required to provide you with a Bid Bond in the amount of ______.

This being stated, we ______(name of the Bank and address which issues the guarantee), without examination of the underlying legal relationship between Beneficiary and the Bidder, waiving all rights of objection and defense arising from the principal debt, hereby irrevocably and unconditionally undertake to pay to you, within 5 Business Days, upon your first demand, any amount up to:

(in full letters: …………………………………………………………..) upon receipt of your written request for payment and your written confirmation stating that:

1. the Bidder withdraws its Bid during the specified period of Bid validity 2. the Bidder after having been notified of acceptance of its Bid during the period of validity:

a) fails or refuses to sign the contract form if required, or b) fails or refuses to furnish the Performance Bond in accordance with the Bidding Documents

For the purpose of identification, your request for payment and your confirmation have to be presented, in SWIFT form, through the intermediary bank keeping your bank account, confirming that the signatures are legally binding upon your firm.

Our Guarantee is valid from ______until ______and expires in full and automatically, should your written request and your confirmation not be in our possession by that date, irrespective of whether the present documents are returned to us or not.

This Guarantee is subject to the Uniform Rules for Demand Guarantees, ICC Publication No.758

Important notice: Please be informed that there is a possibility of demands for the release of bank guarantees in the EUR currency. For conversion from the currency USD into EUR used will be the exchange rate of European Central Bank valid on the date the guarantee has been issued.

EAST\42375826.4 26

Form of Commercial Bank’s Letter of Intent

(Bank’s Letter Head)

On the basis of the conditions set out in the Bidding Documents for the Procurement Procedure No. 2/2015 ______(bank’s name) issues the following

LETTER OF INTENT

We,______(bank’s name), hereby confirm our readiness to issue, on behalf of our client ______(Bidder’s name) if selected as the most favorable Bidder, the Performance Bond for the amount equal to 2% of the contract value and valid until January 31st, 2016.

Date and Place of issuance

Signature

EAST\42375826.4 Section IV Bidding Forms 27

Quality Specification Form (Crude Oil Assay)

Bids must be accompanied with signed and verified certificates of quality for CPC Blend crude oil as prevailing at the time of Bidder’s bid submission (crude oil assay).

T E S T R E S U L T

1. Density at °C 20/4, g/cm3 2. API Gravity 3. Sulphur, % 4. Pour point, °C 5. Water, % 6. Sediments, % 7. Salts, mg/litre of Crude Oil 8. Carbon, % 9. Ash, % 10. Paraffin, % 11. Viscosity of Crude Oil in c.st.at (20°C) 12. Viscosity of Crude Oil in c.st.at (40°C) 13. Mercaptan sulphur, % (UOP 163) 14. Nitrogen (ASTM D 4629) 15. Metals (Ni, V, Fe, Ca, Si) 16. Acid number, mg KOH/100g (ISO 6619) 17. Gasoline yield, % 18. Kerosene yield, % 19. Gas oil yield, % Distillation a) Initial boiling point, °C 20. b) Distilled up to .... 200 °C, % c) - 300 °C, % d) - 350 °C, % 21. Vapour pressure, mm Hg 22. Total ballast quantity, % 23. Organic chloride, % 28

Important notice: All bidders are kindly asked for Crude Oil Assay to state result for water and sediments according to the following testing methods:

For water: EN ISO 9029 For sediments: ASTM D 4807

For all crude oil grades potential bidders are to offer Standard Export Quality.

Important notice: All bidders are obliged to provide in their bids quality specification of the crude oil type they are offering as well as summary of the quality of that crude they sold in last 6-12 months. 29

PART 2 – Procurement Requirements Section V Schedule of Requirements

Product CPC Blend Crude Oil

In respect of delivery of Goods delivered pursuant to this Contract, the Goods shall Quality be of standard export quality and in accordance with Crude Oil Assay, which each Bidder is obliged to present in its bid and which will be an integral part of the Contract. Potential bidders should offer Standard Export Quality and to specify calculation for escalation – deescalation, if any.

Important notice: All bidders are obliged to state whether it would be escalation/deescalation and to define in the bid the way of its calculation.

The Seller agrees to sell and the Buyer agrees to buy 80.000,00 metric tons (+/- 10 %) of Quantity CPC Crude Oil (the “Goods”) subject to and in accordance with the terms and conditions of this Contract

Price and value of the crude oil will be calculated on the basis CIF Port of Omišalj, based Price on average of 5 mean quotations after B/L for Brent (DTD) published in Platts. For deliveries on Ex Tank/ DES/ DAT/DAP Omisalj Port basis, applied will be 5 mean quotations after delivery performance at Port of dischrage EX Tank/ CIF/DES/ DAT/DAP Port of Omisalj (Croatia) INCOTERMS 2010 – all Port of Delivery Omisalj fees and taxes to be on Seller's account conditions

Delivery time and Goods to be delivered to Port of discharge within 28th of November – December 3rd 2015at schedule latest

Deferred payment on open account basis - 30 / 60 /90 days after B/L date for CIF Omisalj Terms of payment basis (INCOTERMS 2010) and 30/60/90 days after delivery performance at discharge port for EX Tank/ DES/ DAT/DAP Omisalj Port delivery basis. In Buyer’s option currency of payment can be EUR. Request for conversion should be sent by Buyer to the Seller latest 10 business days prior date of invoicing. The conversion should be done using Reference rate USD/EUR published by European Central Bank on the invoicing date.

Important notice: To NIS very acceptable also would be, referring to CIF Omisalj delivery, to have in case of this delivery basis payment deadline counting after date of NOR (date of issuing of Notice of readiness after tanker’s arrival to Omisalj Port)

EAST\42375826.4 30 Section IV Bidding Forms 31

PART 3 – Contract

Section VI. Contract Forms

Table of Forms

PART 3 – Contract...... 32 1. Performance Security (Performance Bond Form)...... 62 32

Draft Model of Contract for CPC Blend Crude Oil Type

This Contract is signed between ______, of the one part (the “Seller”), represented by______and NIS j.s.c. Novi Sad, having its registered office at: Republic of Serbia, 21 000 Novi Sad, Narodnog fronta 12, of the other part (the “Buyer”), represented by Mr.______, collectively called “Parties”, whereby it is agreed as follows:

1. SALE AND PURCHASE

1.1 The Seller agrees to sell and the Buyer agrees to buy 80.000,00 metric tons (+/ - 10 % of Seller's operational tolerance) of CPC Blend Crude Oil (the “Goods”) subject to and in accordance with the terms and conditions of this Contract.

2. MEASUREMENT OF QUALITY AND QUANTITY

2.1 The quality and quantity of the Goods delivered under this Contract shall be determined by a Certificate of Quality and Quantity issued by an independent inspector at the loading port for delivery on a CIF basis Port of Omisalj or at discharging port for EX Tank/ DES/ DAT/DAP Omisalj Port deliveries (INCOTERMS 2010). The Seller shall procure that the independent inspector prepares and signs the Certificate of Quality and Quantity upon completion of loading of the Goods. The independent inspector at Port of loading Port shall be appointed by Seller and shall be a person independent of the Seller and the Buyer and having the appropriate expertise, qualifications and experience to issue the Certificate of Quality and Quantity. The decision of the independent inspector shall be final and binding (in the absence of manifest or proven error). All costs and expenses of the independent inspector shall be borne by the Seller.

2.2 In respect of any delivery of Goods delivered pursuant to this Contract, the Goods shall be of standard export quality and in accordance with Crude Oil Assay, which is an integral part of the Contract. Section IV Bidding Forms 33

3. DELIVERY

3.1 Unless mutually agreed, the Goods supplied hereunder shall be delivered on a CIF/DES/DAT/DAP/Ex Tank Port of Omisalj delivery basis.

3.2 The destination port for the delivery of the Goods shall be the “Destination”.

3.3 The Goods should be available at Port of Omisalj within 28th of November - 3rd of December 2015 at latest and this delivery should be equivalent to total of 80.000 metric tons (with +/- 10% of Seller’s operational tolerance) unless otherwise mutually agreed.

3.4 The Seller shall nominate the Vessel in respect of delivery and notify the Buyer of such nomination not less than 7 days before the date of the relevant delivery. The Buyer shall within 1 day confirm by way of facsimile or email whether it accepts such nomination. If it accepts the nomination, then it shall confirm such acceptance by way of facsimile or email. If it rejects the nomination, then the Seller shall forthwith nominate a Vessel which is approved by the Buyer.

4. PRICE, QUANTITY AND PAYMENT TERMS

4.1 The price of the Goods will be determined in US Dollars per net barrel based on the average of mean Brent Dated quotations as published in «Platt`s Crude oil Marketwire» for the pricing period described below.

Pricing Period:

- For deliveries on a CIF Port of Omisalj basis, average of five mean quotations after Bill of Lading date (Bill of Lading date = 0) (for EX Tank/DES/ DAT/DAP Omisalj delivery basis five mean quotations after delivery performance date)

4.2 (a) Quality of the crude oil to be as usually exported quality available at the time and place of loading the vessel at the loading Terminal (escalation/de-escalation to be defined as offered in a bid/conditions of potential Seller).

(aa) The quantity of Goods which is invoiced, for deliveries on a CIF Port of Omisalj delivery basis, will be the net US barrels shown in the Bill of Lading, subject to correction by the independent inspector in the Certificate of Quality and Quantity to a temperature of sixty degrees (60°) fahrenheit in accordance with the ASTM Petroleum Measurement Tables. The invoice must also state net quantity in kg i.a. in accordance with the ASTM Petroleum Measurement Tables. For Ex Tank/DES/ DAT/DAP delivery basis the quantity of Goods which is invoiced will be Protocol on delivered/received quantity. 34

4.3 The final calculated price will be rounded at the third decimal, with the third decimal increased to the first succeeding digit if the forth decimal is equal to or greater than 5.

4.4 Payment shall be made 30/ 60/ 90 calendar days after the Bill of Lading date (for CIF Omisalj basis) or 30/60/90 calendar days after delivery at Port of discharge for Ex Tank/DES/ DAT/DAP Omisalj basis by telegraphic transfer in US dollars without any withholding, offset or counterclaim in immediately available funds to the Seller's account, against presentation to the Buyer of the following documents relating to the delivery of the Goods for which the payment is to be made:

- Seller's invoice (fax/telex acceptable) - Full set of 3/3 original Bills of Lading (for Ex Tank/DES/ DAT/DAP delivery basis relevant delivery perforance documentation) - Certificate of Quality and Quantity - Certificate of origin (important notice: in case of preferential regime status, Seller is obliged to provide Buyer with Certificate of origin form CT-2 document) - Certificate of insurance issued by a first class insurance company

In Buyers’s option, the invoicing and the payment of the invoice(s) at maturity date can be effected in:

- Euro, provided that the Goods are invoiced in U.S. Dollar with the converted invoice amount into Euro by using the US Dollar/Euro foreign exchange reference rate of the European Central Bank (ECB) exchange rate published on the date of invoicing.The said rate shall be final and binding.

The request for invoice quoting converted amount into Euro to be sent to the Seller latest 10 (ten) business days prior to the date of invoicing.

Buyer is obliged to send to the Seller swift message MT103 confirming such payment and by that his payment obligations are considered to be fulfilled.

In case the shipping documents are not available on the date upon which payment would otherwise be due, payment may be made by the Buyer based on the Seller’s invoice and a duly executed undertaking of indemnity in favour of the Buyer in a form as follows: Section IV Bidding Forms 35

LETTER OF INDEMNITY

RE: LETTER OF INDEMNITY

WE REFER TO A CARGO OF QTY ...... MT (...... NET US BBLS) OF ...... CPC BLEND CRUDE OIL SHIPPED ON BOARD ON VESSEL ...... BILL OF LADING DTD ......

ALTHOUGH WE HAVE SOLD AND TRANSFERRED TITLE OF THE ABOVE-NAMED CARGO TO YOU, WE HAVE BEEN UNABLE TO PROVDE YOU WITH SET(S) OF 3/3 ORIGINAL BILLS OF LADING AND THE OTHER ORIGINAL SHIPPING DOCUMENTS COVERING THE SAID SALE.

IN CONSIDERATION OF YOUR PAYING TO US THE FULL PURCHASE PRICE OFUSD (EUR)...... FOR THE ABOVE CARGO WE HEREBY EXPRESSLY WARRANT THAT WE HAVE MARKETABLE TITLE, FREE AND CLEAR OF ANY LIEN OR ENCUMBRANCE TO SUCH CARGO AND THAT WE HAVE THE FULL RIGHT AND AUTHORITY TO TRANSFER SUCH TITLE AND EFFECT DELIVERY OF SUCH CARGO TO YOU.

WE FURTHER AGREE TO MAKE OUR UTMOST EFFORTS TO OBTAIN AND SURRENDER TO YOU AS SOON AS POSSIBLE THE ORIGINAL SHIPPING DOCUMENTS INCLUDING 3/3 ORIGINAL BILLS OF LADING AND OTHER ORIGINAL SHIPPING DOCUMENTS AND TO PROTECT, INDEMNIFY AND SAVE YOU HARMLESS FROM AND AGAINST ANY AND ALL DAMAGES, COSTS, AND EXPENSES (INCLUDING REASONABLE ATTORNEY FEES), WHICH YOU MAY SUFFER BY REASON OF THE ORIGINAL DOCUMENTS INCLUDING 3/3 ORIGINAL BILLS OF LADING AND OTHER ORIGINAL SHIPPING DOCUMENTS REMAINING OUTSTANDING, OR BREACH OF THE WARRANTIES GIVEN ABOVE, INCLUDING BUT NOT LIMITED TO, ANY CLAIMS AND DEMANDS WHICH MAY BE MADE BY A HOLDER OF TRANSFEREE OF THE ORIGINAL DOCUMENTS OR BY ANY OTHER THIRD PARTY CLAIMING AN INTEREST IN OR LIEN ON THE CARGO OR PROCEEDS THEREOF.

OUR OBLIGATION TO INDEMNIFY YOU IS OF COURSE SUBJECT TO THE CONDITION THAT YOU SHALL GIVE US PROMPT NOTICE OF THE ASSERTION OF ANY CLAIM(S) AND FULL OPPORTUNITY TO CONDUCT THE DEFENCE THEREOF, AND THAT YOU SHALL NOT SETTLE ANY SUCH CLAIM(S) WITHOUT OUR PRIOR APPROVAL.

THIS LETTER OF INDEMNITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH ENGLISH LAW (WITHOUT REFERENCE TO ITS CONFLICT OF LAW RULES), SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION OF THE ENGLISH COURTS AND SHALL CEASE TO HAVE EFFECT UPON THE FULL SET(S) OF 3/3 ORIGINAL BILLS OF LADING AND OTHER ORIGINAL SHIPPING DOCUMENTS BEING PRESENTED TO YOU, C/O ...... (bank). 36

THIS LETTER OF INDEMNITY SHALL EXPIRE AND BECOME NULL AND VOID UPON OUR TENDERING THE ORIGINAL DOCUMENTS TO YOU.

SIGNED NAME AUTHORISED SIGNATORY

UNQUOTE

4.5 Buyer has to issue Purchase Confirmation, which should be presented to the Seller and Seller’s bank 5 (five) calendar days before the commencement of loading.

4.6 In case any payment hereunder falls due on a Saturday or on a day (other than a Monday) which is public holiday in New York, payment shall be made on the immediately preceding working day in New York. In case any payment falls due on a Sunday or on a Monday which is a public holiday in New York, payment shall be made on the immediately succeeding working day in New York.

4.7 Seller agrees that upon mutual agreement value of each delivery can be paid before contractual value date (i.e. before expiration on the 30/60/90-day period after the Bill of Lading date or 30/60/90 days after delivery at Port of discharge. The Seller will, at latest 3 working days after receipt of Contract signed, provide the Buyer with a performance bond guaranteeing the performance of its obligations and liabilities hereunder in the form set out by the bid documentation (the “Performance Bond”). The Performance Bond shall be for an amount equal to US$_____ (being 2% of the aggregate value of the Goods based on the average Brent Dated for ______as published in Platts’ Crude oil Marketwire) and shall be provided by a bank approved by the Buyer. Performance Bond Guarantee should be issued by the bank acceptable to the Buyer. Performance Bond Guarantee should be valid until January 31st, 2016.

5. ACCEPTANCE OF GOODS

5.1 In the case of Goods delivered on a CIF Port of Omisalj basis, the quantity of Goods delivered under this Contract shall be as stated in the Bill of Lading and for Ex Tank/DES/ DAT/DAP Port of Omisalj deliveries in the relevant Protocol on Received Quantiies.

6. DISCHARGE

6.1 The Seller shall nominate vessels for the transport of the Goods to the Destination which comply with the regulations of Rijeka Port Authority from time to time and shall comply at all times with the requirements of such regulations. The Seller ensure that the vessels nominated for the transportation of the Goods must not be older than 10 years. Section IV Bidding Forms 37

6.2 Demurrage costs which are incurred by the Seller as a direct result of the Buyer’s breach of the terms of this Contract or its negligence or wilful misconduct (or that of the Buyer’s agents, directors or employees) shall be borne by the Buyer and shall be calculated in accordance with the applicable charter party terms and conditions. The Buyer shall also bear demurrage costs incurred as a result of: (a) unavailability shore tanks for discharge; (b) technical maintenance of the quay; (c) occupation of the berth by another vessel; (d) lower discharge rate by port. Such costs shall be payable by the Buyer within 3 (three) weeks of invoice by the Seller, such invoice to include details of the charges incurred and evidence of the liability of the Buyer to meet such costs pursuant to the terms of this Clause. Demurrage costs due to bad weather will be shared 50/50 between the Seller and the Buyer. The Buyer shall have no other liability for demurrage costs howsoever arising.

6.3 If the estimated time of arrival of any vessel at the Omisalj Terminal is different to the loading laydays confirmed in accordance with the delivery schedule, the Buyer shall use its reasonable endeavours to obtain JANAF’s approval for the different date of arrival, provided that the Buyer shall have no liability whatsoever in the event that JANAF refuses its consent. Any demurrage costs caused by any such delay shall (without prejudice to the Seller’s liability for other demurrage costs) be for the account of the Seller.

6.4 Lay time for discharge is 36 hours SHINC plus 6 hours from NOR, or arrival to berth, whichever is earlier.

6.5 At berthing and discharge, all port costs, queue dues and other such costs and charges will be paid by the Seller.

6.6 The port agent at the Destination will be agreed between the Buyer and Seller (both acting reasonably) provided that such port agent’s appointment shall be subject to the approval of each vessel’s owners (or their agent or the vessel’s captain). All costs for the port agent shall be borne by the Seller.

7. TITLE AND RISK

7.1 In the case of a delivery of Goods on a CIF/Ex Tank/DES/DAT/DAP basis Port of Omisalj, title and risk of loss or damage to the Goods shall pass from the Seller to the Buyer upon the passage of the Goods through the flange connection between the delivery hoses and the vessel’s manifold at the loading port.

8. INSPECTION

The Seller shall bear all costs of inspection at the loading port and the Buyer shall bear all costs of inspection at the Destination.

9. INSURANCE

The Seller shall implement and maintain insurance from a first class insurance company approved by the Buyer covering all risks for a minimum of 110 percent of the value of the Goods in accordance with institute cargo clauses pertaining to maritime cargo (A) of bulk cargoes, including (but without limitation) the risk of leakage and/or shortage in excess of a 38 deductible 0.30 percent on the whole shipment. The Seller shall supply the Buyer with a certificate of insurance confirming the cover implemented in accordance with the terms of this Clause.

10. FORCE MAJEURE

10.1 A Party shall be excused from performing part or all of its obligations under this Contract and shall not be liable for the imposition of any penalties or be liable for damages if, and to the extent that, it is unable to perform or is prevented from or delayed in performing the same due to an any event, circumstance or condition which is unforeseeable or, if foreseeable, beyond the reasonable control of the affected Party, including: (a) war, hostilities, revolution, riot, insurrection or other civil commotion, acts of terrorism or sabotage; (b) nuclear explosion, radioactive, biological or chemical contamination, ionising radiation, or the discovery of such contamination or radiation; (c) strikes, work stoppages, work slow-downs and/or lockouts except any such action by the employees of the Party claiming Force Majeure; (d) any effect of the natural elements, including lightning, fire, earthquake, sandstorm, flood, storm, tsunami, cyclone or tornado; (e) explosion (other than nuclear explosion or an explosion resulting from an act of war); (f) epidemic or plague; and (g) inability to obtain necessary plant, equipment or materials due to blockade, embargo or sanctions, (each, an “Event of Force Majeure”); provided, that the Party claiming an Event of Force Majeure shall, as promptly as practicable after becoming aware of the occurrence of an Event of Force Majeure, but in no event later than five (5) days thereafter, give the other Party written notice describing the particulars of the occurrence and its effect upon its performance under this Contract and, to the extent known, the expected duration of the Event of Force Majeure; provided, further, that the suspension of performance is of no greater scope and of no longer duration than that caused by the Event of Force Majeure.

10.2 Within five (5) days after giving notice under the provisions contained in Clause 10.1 above, the Party claiming an Event of Force Majeure shall prepare and deliver to the other Party an appraisal report of the effects of the Event of Force Majeure (the “Force Majeure Report”). The Force Majeure Report shall:

(a)specify the Event of Force Majeure;

(b)describe the effects of the Event of Force Majeure on the performance of the affected Party's obligations under this Contract;

(c)provide a good faith estimate (in each case to the extent applicable under the circumstances) of:

(i) where appropriate, the costs of mitigating or overcoming the effects of the Event of Force Majeure in accordance with Clause 10.6; and

(ii) the time which it will take to overcome the effects of the Event of Force Majeure on the performance of the affected Party’s obligation; and Section IV Bidding Forms 39

(iii) any supporting documents reasonably requested by the other Party:

10.3 The Party not claiming the Event of Force Majeure shall, within 5 (five) days of receipt of the Force Majeure Report, notify the other Party of its agreement or objection to the terms of the Force Majeure Report (in case of objection, the “Objection Notice”).

10.4 The Party claiming an Event of Force Majeure shall have 5 (five) days from the date of receipt of an Objection Notice to appeal the Objection Notice by notice in writing (an “Appeal Notice”) to the other Party, failing which notification, the Objection Notice shall be deemed final and binding.

10.5 Following receipt of an Appeal Notice, the Parties shall negotiate in good faith with a view to resolving the dispute arising out of the occurrence of the Event of Force Majeure. If the Parties cannot reach agreement within 10 (ten) days of the Appeal Notice, then either Party may refer the matter to be determined in accordance with the provisions of Clause 19.

10.6 Following the occurrence of an Event of Force Majeure, the affected Party shall:

(a) use all reasonable efforts to prevent and reduce to a minimum and mitigate the effects of the Event of Force Majeure; and

(b) use all reasonable efforts to ensure that normal performance of the terms of this Contract can be resumed after the cessation of such Event of Force Majeure.

10.7 The Party claiming any Event of Force Majeure shall give written notice to the other Party of:

(a)the cessation of the relevant Event of Force Majeure; and

(b)the cessation of the effects of such Event of Force Majeure which would then enable the performance by such Party of its obligations under this Contract.

10.8 Upon cessation of the Event of Force Majeure, the Party affected by the Event of Force Majeure shall resume performance under this Contract as soon as reasonably practicable.

10.9 A Party shall only be entitled to relief from performance under this Clause 10 to the extent that the failure or delay in performance was caused by the relevant Event of Force Majeure.

10.10 Unless the Parties otherwise agree, if the suspension caused by an Event of Force Majeure continues for a continuous period exceeding 30 (thirty) calendar days, either Party may issue written notice to the other Party terminating this Contract, whereupon, on the date set forth in such notice, this Contract shall terminate, but without prejudice to rights and obligations accrued and outstanding and due to be performed prior to the date upon which the 40

Event of Force Majeure occurred. No Party shall have any liability to the other Party arising out of or as a consequence of such termination other than rights and obligations accrued and outstanding and due to be performed prior to the date upon which the Event of Force Majeure occurred.

11. POLLUTION

11.1 It is expressly acknowledged that it is in the interest of both the Seller and the Buyer to ensure that no spillage or leakage of the Goods occurs and that the Goods are not discharged into the sea or onto or into any other medium or part of the environment. Accordingly, the Seller undertakes and warrants that all owners of the vessels nominated to carry the Goods shall be members of the International Tanker Owners’ Pollution Federation (“ITOPF”). In the event that the ITOPF shall cease to exist, but a successor organization is formed with similar purposes and goals and such successor entity is generally accepted in the industry by petroleum tanker owners, then the Seller shall ensure that owners of the vessels nominated to carry the Goods shall join and retain membership in such successor organization. The Seller undertakes and warrants that such obligations will be part of the terms of each charter party.

11.2 The Seller warrants that the vessels nominated to carry the Goods will be entered with a P&I club that is a member of the International Group of P&I Clubs and will have the standard oil pollution insurance cover (in an amount of not less than US$1 billion) available from their P&I club.

11.3 In the event that any vessel nominated to carry Goods under this Contract is not entered with a P&I club as provided under Clause 11.2 above, or such insurance cover is capped at an amount which is less than US$1 billion for such vessel, the Seller shall defend, indemnify and hold harmless the Buyer from and against any and all claims, damages, liabilities, obligations, losses, penalties, actions, judgments, suits, costs, disbursements and expenses of any kind or nature (including, without limitation, reasonable fees and disbursements of counsel to the Buyer) which may be imposed on, incurred by or asserted against the Buyer by any governmental authority or other third party arising out of or in connection with any incident or accident or a threatened incident or accident or arising out of or in connection with the storage, treatment, transportation, disposal or handling of the Goods or any other substance, including without limitation, any incident or accident or any spillage, leakage or discharge of oil.

12. DEFAULT, TERMINATION AND REMEDIES

12.1 In addition to rights of termination or remedies at law, the Buyer and the Seller shall have the following specific rights and remedies:

(a)If either the Buyer or the Seller shall default in the performance of any of the provisions of this Contract, and such default shall not be cured within a period of 30 (thirty) calendar days following written notice from the other Party, then the non-defaulting Party may terminate this Contract by giving written notice to the defaulting Party. Section IV Bidding Forms 41

(b)If either the Buyer or the Seller shall become or be adjudicated insolvent or bankrupt, or a receiver or trustee shall be appointed over its property, or a petition for the reorganization or any arrangement under any bankruptcy or insolvency law shall be approved, or an assignment shall be made for the benefit of creditors, or either the Buyer or the Seller shall file a petition in bankruptcy or shall consent to the appointment of a receiver to it, then the other Party may terminate this Contract by giving written notice to the affected Party.

12.2 Paragraphs 14, 16, 18, 19 and 21.9 inclusive and any Performance Bond shall survive any termination of this Contract and shall continue in full force and effect notwithstanding such termination without limitation in time.

13. CLAIMS

13.1 The Buyer agrees to defend, indemnify and hold harmless the Seller and its respective officers, directors, employees, affiliates, agents, contractors, subcontractors, representatives and its successors, assigns and beneficiaries, from and against all Claims (as such term is defined below) that arise as a result of a breach by the Buyer of the terms this Contract, or to the extent that such Claims arise from the negligence of, violation of law or regulation by, the Buyer or any of its officers, directors, employees, affiliates, agents, contractors, subcontractors or representatives.

13.2 The Seller agrees to defend, indemnify and hold harmless the Buyer and its respective officers, directors, employees, affiliates, agents, contractors, subcontractors, representatives and its successors, assigns and beneficiaries, from and against all Claims that arise as a result of a beach by the Seller of the terms of this Contract, or to the extent that such Claims arise from the negligence of, violation of law or regulation by the Seller or any of its officers, directors, employees, affiliates, agents, contractors, subcontractors or representatives.

13.3 As used herein, the term “Claims” shall mean any claim, demand, cause of action or suit of any nature or character, including products liability, strict liability, violation of any governmental regulation.

13.4 If the quality of the Goods or any part thereof delivered under this Contract do not comply with the terms of this Contract, then the Buyer may submit a claim to the Seller for any losses, damages, costs, expenses or liabilities which have been or may be incurred arising out of or as a consequence thereof provided that such claim is notified to the Seller not later than the date falling two months after the date upon which the final delivery of Goods has been made by the Seller in each year of delivery as required by this Contract.

13.5 In case the independent inspector confirms at any time that the chemical composition of any of the Goods which the Seller proposes to deliver hereunder is not in accordance with the specification agreed upon under this Contract, the Buyer may, in its sole discretion, reject the Goods or accept the Goods with a reduction in price as agreed with Seller or accept the Goods but without prejudice to any claim that the Buyer may have 42 against the Seller for its failure to deliver Goods in accordance with the specification under this Contract.

14. GOVERNING LAWS

14.1 This Contract and any matter, claim or dispute arising out of or in connection with this Contract, whether contractual or non-contractual, is to be governed by and construed in accordance with the law of England and Wales.

14.2 Where they are not in conflict with the express terms of this Contract, Incoterms 2010 and all amendments thereto shall apply.

15. ASSIGNMENT

15.1 Without the prior written consent of the other Party, which consent shall not be unreasonably withheld, neither Party may assign any of its rights or obligations under this Contract in full or in part, without signing Addendum to this Contract.

15.2 In the event of the liquidation of any Party, all rights and/or obligations of such Party under this Contract shall be assigned to its appropriate successor.

15.3 Any assignment as per Clause 15.2 shall be in form acceptable to the non- assigning Party and shall be effected by notice in writing from the assignor or signed by assignee who takes responsibility for the obligations under this Contract. Notice of any such assignment shall be promptly given by the Party effecting the assignment to the other Party to this Contract, containing the assignee’s company name, company address, legal representative / official with their telephone, email, and fax numbers.

16. CONFIDENTIALITY

16.1 Confidential Information. As used in this Contract, “Confidential Information” shall mean information directly furnished or disclosed by either Party (as a Disclosing Party with respect to such information) to the other Party (as a Receiving Party with respect to such information) in written form marked “confidential” relating to, without limitation, trade secrets, customer lists, customer contracts, prospects for new projects which the Disclosing Party is currently and actively pursuing, business and marketing plans, pricing information, and financial statements or budgets of the Disclosing Party. Confidential Information shall not include information (a) that is otherwise available in the public domain or is made available to the public generally by the Disclosing Party or a third party (without breaching any duty of confidentiality); (b) that is furnished by the Disclosing Party to a third party without restriction; or (c) that is already or hereafter may lawfully be in possession of the Receiving Party.

16.2 Non-disclosure Obligation. The Receiving Party: (a) shall use such Confidential Information only for the purpose of the performance of this Contract (the “Transaction” or “Transactions”); (b) shall hold all Confidential Information in confidence and shall restrict disclosure of such Confidential Information to its employees, consultants, affiliates and professional service providers on a need to know basis and provided that, Section IV Bidding Forms 43 unless otherwise agreed, such recipient is advised of the confidential nature of the Confidential Information and of Receiving Party’s obligations hereunder; and (c) shall use at least the same degree of care as the Receiving Party uses with regard to its own proprietary and/or confidential information to prevent the disclosure, use, or publication of such Confidential Information. The Receiving Party shall not use any Confidential Information for its own purposes other than for purposes of the Transaction.

16.3 Permissible Disclosure. The Receiving Party may disclose Confidential Information if such disclosure is required by applicable law, rule, or regulation or in response to an order or request from a court, or other governmental agency or regulatory body with the authority to compel disclosure of such Confidential Information; provided, however, that before making such disclosure, the Receiving Party shall where practicable first give the Disclosing Party reasonable prior written notice of such request to enable the Disclosing Party the opportunity to object to the order or request, and/or to obtain, at the Disclosing Party’s sole expense, a protective order covering the Confidential Information sought to be disclosed, provided that, in no event shall the Receiving Party be prevented from disclosing the relevant Confidential Information where failure to do so would be a breach of any law or regulation or would put the Receiving Party in breach of any order or request or make the Receiving Party subject to penalties or sanctions under any law or regulation.

17. SPECIFIC PERFORMANCE

The Parties acknowledge that the harm that would be caused by a breach of this Contract would be difficult, if not impossible, to calculate, and/or that damages may not be an adequate remedy for any such breach, and accordingly, each of the Parties shall be entitled to seek injunctive relief or other equitable remedies.

18. SEVERABILITY

If any of the provisions of this Contract are held to be invalid or unenforceable, the remaining provisions shall not be affected, and any such invalidity or unenforceability shall not invalidate or render unenforceable that provision in any other jurisdiction. In such event, the Parties agree that the provisions of this Contract shall be modified so as to effect the original intent of the Parties as closely as possible with respect to those provisions that were held to be invalid or unenforceable.

19. DISPUTE RESOLUTION

19.1 Dispute Procedure.

(a)Except as otherwise provided herein, the Parties shall attempt to settle all disputes arising out or in connection with this Contract in the first instance within thirty 30 (thirty) calendar days from the date upon which one Party has given written notice of a dispute to the other Party, by discussions between or among the Parties involved; and 44

(b)If the dispute in question cannot be settled within such 30 (thirty) calendar day period, then the matter may be referred to arbitration in accordance with Clause 19.2 below, unless the Parties otherwise agree in writing.

19.2 Arbitration Procedure. Subject to Clause 19.1, unless otherwise agreed in writing by the Parties:

(a)all disputes shall be referred to and be resolved by arbitration to be conducted in accordance with the Rules of Arbitration of the International Chamber of Commerce (the “ICC Rules”) by arbitrators appointed in accordance with the ICC Rules;

(b)the ICC Rules in force at the time shall govern the procedure before the arbitrators. The place of arbitration shall be Zurich (Switzerland). The language of the arbitration shall be English;

(c)the expense of the arbitration shall be borne by the Parties in such manner as the arbitrators may determine; provided, however, that each Party shall pay for and bear the costs of its own experts, evidence and legal counsel;

(d)the arbitrators shall not have authority to award punitive damages;

(e)the Parties hereto agree to exclude any right of application or appeal to any court which may otherwise have jurisdiction in the matter in connection with any question of law arising in the course of the arbitration reference or out of the award. However, the Parties may make an application to any court for enforcement of any award (including execution of such judgment), including enforcement of any award granting interlocutory relief against a Party, and for the obtaining of any evidence (whether by discovery of documents, interrogatories, affidavits or testimony of witnesses or whatever) which the arbitrators direct shall be admitted in the arbitral proceedings;

(f) any award rendered in accordance with this Clause 19.2 shall be final and binding on the Parties; and

(g)the Parties hereby represent and warrant they can each respectively, validly and unconditionally consent under all applicable laws to the arbitration agreement contained in this Clause 19.

20. SELLER’S REPRESENTATION AND WARRANTIES

20.1 The Seller represents and warrants that all the information provided in its bid documentation with respect to this Contract is true, correct and complete.

20.2 The Seller represents and warrants that crude supplied on the basis of this Contract shall meet the quality requirements offered and stated in quality specification which is an integral part of this Contract. Section IV Bidding Forms 45

20.3 The Seller represents and warrants that it has good title to the Goods delivered hereunder and that such Goods shall be free from all security interests, royalties, liens, encumbrances, claims, and all applicable foreign, federal, state and local income taxes.

21. MISCELLANEOUS

21.1 This Contract comes into force immediately upon receipt of the Performance Bond by the Buyer from the Seller (the “Effective Date”).

21.2 Notwithstanding anything to the contrary contained herein, any failure by any Party to comply with any of its obligations hereunder may only be waived by the other Party in writing, provided that no such waiver shall preclude such Party from requiring the fulfilment of any obligations set out herein at any time in the future. Failure of any Party to insist upon its rights upon a breach of this Contract shall not be deemed a waiver of such rights either with respect to that breach or any subsequent breach whether similar or dissimilar in nature.

21.3 This Contract sets out the entire agreement between the Parties and supersedes any prior oral and/or written understandings, agreements or arrangements relating to the subject matter of this Contract.

21.4 This Contract shall not be amended or modified or any provision thereof waived, except in writing by both Parties.

21.5 Any and all addendums and additions to this Contract are valid only if they are made in writing and duly signed by both Parties.

21.6 Except as expressly provided in this Contract, neither the Seller nor the Buyer shall be liable for consequential, indirect or special losses or special damages of any kind arising out of, or in any way connected with the performance or failure to perform obligations under this Contract or from any non-contractual claim arising out of or as a consequence of this Contract.

21.7 All taxes, customs and other duties connected with the conclusion and execution of this Contract levied before the transfer of title in the Goods will be the responsibility of Seller and thereafter will be the responsibility of Buyer.

21.8 Any and all taxes, fees or other charges imposed or assessed by governmental or regulatory bodies, the taxable incident of which is the transfer of title or the delivery of the Goods hereunder, or the receipt of payment therefore, regardless of the character, method of calculation or measure of the levy or assessment, shall be paid by the Party upon whom the tax, fee or charge is imposed by law.

21.9 Any provision of this Contract, which is declared unlawful or unenforceable by a court of competent jurisdiction, shall not affect any other provision herein.

21.10 Without prejudice to any accrued rights of any Party hereto, this Contract shall terminate on ______. 46

BUYER SELLER

NIS j.s.c. Novi Sad Section IV Bidding Forms 47

1. Performance Security (Performance Bond Form)

Beneficiary

We have been informed that you concluded on ……………… a contract No ….……………. with. ………………(Principal) for ……………… at total price of ………………. According to this contract, Principals are required to provide you with a Performance Bond in the amount of………………………..(2 % of the contract value).

This being stated, we ______(Name and address of the Issuing Bank) irrespective of the validity and the legal effects of the above mentioned contract and waiving all rights of objection and defense arising from the principal debt, hereby irrevocably and unconditionally undertake to pay within 5 Business Days to you upon your first demand, any amount up to:

( in full letters …………………..) upon receipt of your written request for payment and your written confirmation stating that Principal have not fulfilled their obligations in conformity with the terms of the above- mentioned contract. For the purpose of identification, your request for payment and your confirmation have to be presented, in SWIFT form, through the intermediary bank keeping your bank account, confirming that the signatures are legally binding upon your firm.

Our guarantee is valid until ______and expires in full and automatically, irrespective of whether the present document is returned to us or not, should your written request for payment not be delivered by that date.

This guarantee cannot be assigned or alienated without our prior written consent. In case of assignment without our prior approval we shall only effect payment on basis of our guarantee to beneficiary entitled originally.

This Guarantee is subject to the Uniform Rules for Demand Guarantees, ICC Publication No. 758.

Date and Place of issuance

Important notice: Please be informed that there is a possibility of demands for the release of bank guarantees in the EUR currency. For conversion from the currency USD into EUR used will be the exchange rate of European Central Bank valid on the date the guarantee has been issued 48