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Section‑4 INSURANCE
The Company shall insure or procure insurance for the Goods during transit and until the Sale Contract between ITFC and the Company is concluded in accordance with Section 7 of this Agreement. Such insurance shall be, to the full replacement cost of the Goods, with reputable insurers acceptable to ITFC in the name of ITFC against such risks as are normally insured by persons transporting goods in the same manner and of the same kind as the Goods. The Company shall ensure that a term of such insurance will be that any proceeds payable by the insurers under such policy will be paid in a freely convertible currency.
Where the draft Purchase Contract does not provide for the insurance of the Goods by the Supplier in the manner specified in Section 4.1, the Company shall, at the time of submitting the draft Purchase Contract for the approval of ITFC, in accordance with Section 3.4, advise ITFC of the arrangements it has made or will make to insure the Goods in the aforesaid manner in order to obtain ITFC's approval for the same.
The Company shall provide to ITFC a copy of the insurance policy entered into by the Supplier in relation to the Goods subject to Section 4.1 hereof or a conformed copy of any insurance contract or agreement concluded directly by the Company in the manner specified in Section 4.2 hereof.
Section‑5 DELIVERY
The Company shall ensure that the Purchase Contract provides for the delivery of the Goods directly to the Company or to its order, and the Company shall be responsible for checking its quality, quantity, specifications and all other matters relating thereto.
Section‑6 PAYMENT OF THE PURCHASE PRICE BY ITFC
Unless ITFC otherwise agrees, payment of the Purchase Price shall be made by Letter(s) of Credit, Documentary Collection, Direct Payment and/or Advance Payment.
The minimum amount to be disbursed for a single Operation without any fees shall be equal or higher than USD 300,000.00 (Us Dollar Three Hundred Thousand). If the amount to be disbursed for a single Operation is between USD 100,000.00 and 300,000.00 USD, then the Company will have to pay USD 200.00. If the amount to be disbursed for a single Operation is between USD 25,000.00 and 100,000.00 USD, then the Company will have to pay USD 500.00 fee for each disbursement. Finally, if the amount to be disbursed for a single Operation is below USD 25,000.00 USD, then the Company will have to pay USD 1,000.00.
Where the Purchase Price is to be made by Letter (s) of Credit issued by ITFC, the Company shall agree with ITFC a Letter of Credit issuance fee. The Company shall, on behalf of ITFC, arrange, where applicable, with its bankers (including ITFC when applicable) to open a Letter of Credit (or Letters of Credit) in the manner required by the Purchase Contract in favor of the Supplier in respect of the Purchase Price. Each and every Letter of Credit established under this Agreement shall contain, inter alia, the following particulars:
The number of the Letter of Credit;
The name of the Issuing Bank;
The name of the applicant for the Letter of Credit;
The name of the beneficiary of the credit;
Description and quantity of the Goods;
The origin of the Goods;
The amount;
The insurance cover;
The expiry date;
The latest shipment date;
The name of the paying or the negotiating bank;
Port of shipment;
That the Letter of Credit will be available by sight payment or by usance (up to 90 days);
That the Letter of Credit is subject to the UCP;
Negotiation of documents prior to receipt of ITFC's Irrevocable Commitment to Reimburse is not allowed and the negotiating bank should inform ITFC 3 (Three) working days prior to the value date of the Purchase Price.
The Company shall instruct its bankers to communicate to ITFC under tested telex/Swift the full text of the Letter of Credit. Provided that the terms and conditions of the Letter of Credit are in conformity with this Agreement, ITFC will, on receipt of the said tested telex, issue an Irrevocable Commitment to Reimburse. Reimbursement will be made by a correspondent bank of ITFC against a receipt by such correspondent bank of a certificate from the Supplier's banker that all the relevant terms of the Letter of Credit have been fully and properly complied with.
Amendments of the Letter of Credit relating to the matters specified in Section 6.3 shall be subject to the approval of ITFC. Any other amendment could be made by agreement of the parties to the Letter of Credit without reverting to ITFC. However, any such amendment shall be notified to ITFC.
ITFC will not be obliged to issue an Irrevocable Commitment to Reimburse under any Letter of Credit opened pursuant to this Section or make any Utilizations unless the conditions precedent to Utilization set out in Section 13 hereunder have been fulfilled.
ITFC can arrange a confirmation of the Letter of Credit by third party Bank, upon request from the Company, for the fee of 0.3% per quarter.
Where payment of the Purchase Price is required to be made directly to the Supplier, the Company shall, when making a Utilization request, provide ITFC with a statement acknowledging the receipt of the Goods in good conditions accompanied with copies of full set of shipping documents (i.e. bill of lading and others as applicable);
Where payment of the Purchase Price is required to be made by Advance payment to the Supplier, the Company shall, when making a Utilization request, provide ITFC with proforma invoice.
The markup amount will be computed from the Disbursement Date (inclusive) until due date of the Sale Price (exclusive) and offer/acceptance will take place once the Good are shipped.
ITFC will pay directly to the Supplier upon receipt of notification from the Company. A request of payment from the Supplier shall be notified by the Company to ITFC at least 6 (six) Business Days before the value date of payment to the Supplier, indicating the exact amount, value date and details of the account to which payment is required to be made.
Where the Purchase Price is required to be made through Documentary Collection, the Company shall arrange with its bankers to send to ITFC a swift message through its Bank confirming that it has received the following information and documents and that they are in all respects in order and in accordance with the Purchase Contract and this Agreement:
The Documentary Collection date and reference number and that it is subject to the URC (Latest Revision);
The drawer and the drawee of the Bill of Exchange;
Goods description and quantity;
Origin of the Goods;
Insurance cover;
Collection amount;
Details of shipment (date & Vessel name);
Payment terms – D/P (Documents against Payment) or D/A (Documents against Acceptance).
The first Utilization concerning the utilization of the Approved Amount shall be made not later than 2 (Two) months after signing of this Agreement. If the Company fails to make such request for the Utilization within that date and ITFC is not satisfied with the justification for such failure, ITFC considers this Agreement as terminated.
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