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TPI ASSIGNMENT, NOVATION, AND SECOND AMENDMENT
AGREEMENT
■elatine r>
the avMgniikrnt of the Thud Pa*t> Inictesi uniter and amendment in the Production Sharing CflBnd
relating to the Ro\i Block.
between
THE KURDISTAN REGIONAL GOVERNMENT OF IRAQ
mill
RELIANCE EXPLORATION & PRODUCTION DMCC
and
OMV ROVI GmbH
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION...................................................................2
2. NOMINATION. ASSIGNMENT. AND NOVATION...................................................3
3. AMENDMENTS TO CONTRACT..............................................................................4
4. OMV PAYMENTS..................................................................................................... 19
5. REPRESENTATIONS................................................................................................ 21
6. JOINTOPERATING AGREEMENT.........................................................................23
7. GENERAL PROVISIONS..........................................................................................24
8. STATUS OF AGREEMENT: COMPLETION...........................................................25
ANNEX I Agreements Pertaining u> Contract Area
ANNEX 2 Completion
ANNEX 3 Form of Certificate of Completion
ANNEX 4 JOA Principles
TIM ASSIGNMENT, NOVATION. AND SECOND AMENDMENT
AGREEMENT
This agreement (the Agreement"* is entered into as of I August 2010 (the "Aurevmrnl Dtile")
between:
(II THE KURDISTAN REGIONAL GOVERNMENT OK IRAQ (the
"Government"):
(2) RELIANCE EXPLORATION & PRODUCTION DMCC. a limited liability
company csublisltcil anil existing under the law s of the United Arab Emirates, whose
registered office is at 1-4. 1st Floor. Al Falasi Residence. Center Point Apaitmcnt
Building. P.O. Bov 125307. Dubai. United Arab Emirates ("Reliance"): and
(3) OMV ROVI GmbH. a limited liability company established and existing under the
laws of Austria, whose registered office is at Trabrennurasse 6-8.1020 Vienna. Amnia
(OMV I
(each a Party" and collectively, the Parties )
RECITAI-N
(Al The Government and Reliance arc parties to a Production Sharing Contract dated 22
December 2006. as amended and restated on 6 November 2007. in respect of the Ravi Block
in tf* Kurdistan Recant of Iraq (the Contract') and a Fust Amendment Agreement dated I
August 2010.
(B> The Patties wish to pnxwc a 20-1 participating interest in the Contract fat OMV. and OMV
wishes to acquire a 20-< pattK ipating interest in the Contract.
(O The Government has determined that OMV should participate as a Thud Pam Pankipmt
pursuant to the Government's exercise of the Option of Third Pans Participation«as such term
is defined in the Contract*. Reliance and the Governmrnt arc each satisfied that OMV has the
financial and technical capability to perform its obligations under the Contract m reaped of
the Assigned TP! and have completed all investigations of OMV required under the Contract
iD) In reliance upon the Fuo Amendment Agreement, the Government wishes to exercise the
Option of Third Pans PattKipaum in favor of OMV and to cause Rdbaca w.vh m make the
assignment and novation in respect of such nominatim (the Assigned TPTk and OMV
wishes to accept the nomtnaiioa and assignment of a 2t**» participating interest in the
Contract After the non.nation and assignment. Reliance will have an MP4 (aitkipuing
interest and OMV a 20-4 p-ixipaimg interest, -object to the Government s tight to eventw
iriAxugmmnC SetiW AmenSnen! Agreement Kaxi
«E»
with a 20". participating nmol I subject K> the Government's light. to tUKnt the
Government Interest and to obbg*c OMY and future holders of all or put of the Assigned
TP1 to pa> Capacitv Building Payment. ia> defined in the Contract a» amended b) duv
Agreement i 10 the Government. OMY is willing to agree lo charge the Avxigmd III w ah the
Capacity Building Payment obligations and the Parties arc willing to agree lo the appropriate
aitkmdments to the Contract. Neither Reliance nor an> future bidders of all or a pari of
Reliance's participating interest as of the Effective Date will have an> obligation lo make
Capacitv Building Pay unless Reliance or such other IYr-«> should become a holder of
the Assigned TP!
1F1 The Government will deposit all Capacitv Building Pavmenlv into a segregated account for
use solely to support and fnance infrastructure and capacitv building projects in the Kurdistan
Region.
I. DEFINITIONS AND INTERPRETATION
1.1 Unless otherwise defined herem (including the reciulvi. capitalised terms have the
meanings ascribed to them in the Contract (before anviklmcal by this Agreement).
As uv
Agreement" is defined in the preamble.
Agreement Date is defined in the f*eamb!c
Assigned I PI' is defined in Recital l D).
Business Italy" i* defined in Clause 4.1.2.
• Contract" is defined in Recital (A)
«'ompletion Dale'' is defined in Clause 8.3.
Cost Determination Dull-" is defined in Clause 4.3.1.
Excluded I’nymciils" is defined in Clause 4.6.
"First Tranche Assignment Amount" is defined in Clause 4.3.
Government" I* defined in the preamble.
'Joint Operilling Agreement" is defined in Clause 6.1.
OMV’ is defined in the preamble.
Reliance" is defined in the preamble.
Second Tranche Assignment Amount" is defined in Clause 4.4.
Third Parlv is defined in Clause 7.2.
1.2 Descriptive headings in tins Agreement are for convenience only, do not constitute a
IIV Alignment, iVoniftYui. .md Sr find Amrndmriu As/tfmrni Kmi
reference in u "pattkipuling interest" nKans an undivided interest in the Cnnuucl and
in the Petroleum Operations in respect of the entire Conti act Area.
IJ Nothing ui this Agreement shall he ci*»Mn*xl to impau the .ni.tlemem of the
Government lo exercise the Optic® of Government Participation in accordance with
Article 4.1 of the Contract.
2. NOMINATION. ASSIGNMENT. AND NOVATION
2.1 Reliance ami OMV xUmkdte that Ok Government has nominated OMY to
Reliance in respect of the Opcion of Third Pam Participation in the amount of 20*
and that OMV has accepted Mich nomination. The Govenum-nt and Reliance each
further ucVnnwkdgos. to cue It oilier and to OMV. that it is satisfied with the results
of its investigation earned out into OMV in accordance with Article 4.9 of the
Contract and that the requirements of Article 4.9 are either satisfied or waived.
2-2 In accordance with the Government's nomination of OMV as T hird Party Prtitk'ipant.
with el icit on and from the Completion Date. Reliamv hetehy assigns and liansfcis
all its light*, duties, obligations and liabilities arising in connection with ilk1 Assigned
TPI to OMV. and OMV accepts such rights, duties, obligtilions. and liabilities in
respect of the Assigned TIM. This agreement shall be deemed to lie live binding and
enforceable instrument of assignment and novation required to he executed by the
Parties pursuant to Article 4.12(b) (before amendment by this Agreement).
2J Asa consequence of the nomination .4 (>MV as the Third Party PartK ipant and the
assignment of the Assigned TPI to OMV:
(a) OMV is a Contractor In tits as of the Effective Dale with a 20*
participating interest in the Petroleum Operations m respect of the enure
Contract .Area and all the other rights, duties, obligation, and liabilities of a
Contractor Entity under the Cootrart as amended by this Agreement.
(hi any and all rights of the Government to assign a Thud Pans Interest under
Article 4 are fully exercised and extinguished; and
(C) OMV is the Thml Patty Participant.
1A OMV shall perform all of its obligat-ms under the Contract, as amended by this
Agreement, in respect of the Assigned TPI as a Contractor Entity with a 20*
pjtiKipaiing interest, whether such obligations arose <« anse on. before, or after the
Compieiion Date, as if OMV k»J been a Conrn*tor Entity with a 20* participating
interest on and from the Effective Dale
IS OMV will not be liable for payment of jB or any put of the Exchided Pavnumts.
whether the Excluded Payments have been paid pei« to. are paid as at. or are pud by
Reliance following the Compkmon Date
U, Reliance shall indemify. defend rmd hold harmless OMV from and against fit all
costs, claims, liabilities, expenses and obligations aiising out of or in relation to past
3
Il'l AuigaarM. NcvadUut. mU AmmAarnl Afrttmrei Ro-. I
coats inclined under ihe Contract for an> period before the Completion Dae whether
such claim. liability. expense or oNiganon a brought before or after the Completion
Due i pros ided dm such indemnification ‘lull Sc Knitted to the eunwlated amount if
the Flint Tranche Assignment Amount and Second Tranche Assignment Amount
payments made by OMV to RelianceI. or (it) any breach by Reliance of tlx
obligations arising out of or in relation to this Agreement (provided fuither that such
indemnification shall he limited to cither ilk1 actual loss. cost, claim, or liability
incurred or three (.'I times the cumulated amount of the First Tranche Assignment
Amount and Second Tranche Assignment Annum payments made by OMV t»
Reliance, whichever is lesser). The indemnities provided by Reliance in til and on
i>n( shall not include consequential k*"Cv diminution in value, indirecl loss or Iom
of profit or revenue, punitive damages. or penaltx-v
2.7 TV Conuact shall continue in full force and effect and its terms mill have only
changed to the extent amended by this Agreement.
3. AMENDMENTS TO CONTRACT
3.1 A' of the Completion Date, the Contract iv amended as prov ided in this Cause 3.
3.2 The preamble is deleted and restated in its entirety
'BETWEEN
THE KURDISTAN REGIONAL GOVERNMENT OF IRAQ (the
"GOVERNMENT" K
AND
RELIANCE EXPLORATION & PRODUCTION DMCC. a limned liability
company estabbshed and existing under the h»> of the United Arab Enwoirv .base
registered office iv at 1-4. In Floor. Al Fala»i Residence. Center Knot Apartment
Building. P.O. Box 125307. Dubai. United -Arab Enurates t RrUnncr
AND
OMV ROM GmbH, a limited liability company established and existing umkr the
bws of Austria. *hmr registered office is at Trabremhtnfesc 6-H. 103) Vienna. Aintna
rOMW
3.3 TV rental' arc amended:
iCi TV GOVERNMENT concluded a production shoring conuact
doted 22 December 2006 with Reliance. TV original contract *as
amended, restated, and superseded in its entirety by this Conuact.''.
p-agraph (DR
~|D) Thi» Contract was amended pursuant to Tin Amendment
Agreement between the Government and Reliance dated I .August
4
TTI AoJ*MM. iVtoiuw. m%J .Vetend
3010 md by the IPI Assignment. Nos anon. and Secood
Amendment Agreement between the Parties dared I August
3010":
byreourrfcenn g paragraph (Ft:
(dl by renumbenn gp-agraphlGK-lFr.
3-4 In Article 1.1. the definitinm of CONTRACTOR" and CONTRACTOR Entity"
ne deleted id theu entirety and touted as follow »
CONTRACTOR nmiw intlividuull) imd jointly. each Contractor Entity, and
where the context so requires. includes the Operator.
CONTRACTOR Entity mcim* each ol OMV uml Reliance and their respective
permitted assignees pursuant to Article .'V At such time as the Government may
exercise the Option of Gov ernment I'umcipulion. a holder of the Government Interest
is a CONTRACTOR l-.mil>*. At any lime when then* is only one entity constituting
the CONTRACTOR, any reference to the entities constituting the
CONTRACTOR" or the "CONTRACTOR Entities" or similar reference, shall be
deemed lo mean "the entity constituting the CON TRACTOR." OMV and Reliance,
as CONTRACTOR Entities, each own (subject to the Option of Government
Participation as piovidcd in Article It an undivided participating interest in the
Contract and the Pciiolcum Operations in respect of tin* entire Contrail Area.
OMV 20*
Reliance SO**"
»_« New dcfmirioos are aided in Article l.l of the Cmiiuct in the appropriate
alphahctic-al order, as follows.
Capacity Building Account means a segregated bank .recount with a rrpuublc
nMernjtiooal bank in d* name of. and maintained by. the GOVERNMENT, the sole
purpose of which is to support and finance certain infrastructure and capacity
Naikhng projects to be identified by the GOVERNMENT in Us sole discretion in the
Kurdistan Region.
( apa. il> Building Bonus is defined in Article 32JL
( apnetty Building Payment - First Tranche means, in respect ol the OMV Inkiest
only. six million DoUas 11 SS6JJOO.OOO l
Capacity Building Payments iram. in respect of each Charged Imctest Holder.. the
Capa.its Budding Payment - First Tranche and the Capa.it) Buikhng Payment -
Second Tranche hwlMi
( a parity Building Payments - Second I ranch* Insialmmts mem. die oNigaU-n of
each Charged Interest Holder to pay a anmunt equal to rhe Capre*) Budding Valin:
attributed to such Charged Interest Holder pursuant to Article 32 X
5
ITIAlUfOTiK Sow*, ami SmmJ Ammdmtnt A^rremra Kmi
Capacity Buildins ' alur mrmv in respect «»l jm jx-iuO >4 determine**: for »li
Glutted huerest lloUcr. jn amount in DiJUx «|uaJ hi I he value. cslaN.Jed in
axodancc with Aitxlc 27. of forty-five per cm «45‘* > of tlx Charged Interest
Holder’s Profit lYttnlcum.
Charged Int.-r.-sl mean* all oi any pan of ills- paiticipaling interest hereunder deemed
held hy OMV a» of lire Effective Dale.
Charged Intm-st Holder means a CONTRACTOR 1 mily u» ihe extern ii is On-
holder of a Charged Inlctesl. As of die Effective Dale. OMV is the only Charged
Interest Holder.
Charged Intmwt Holdm Monthly Statement i% defined In Article 32.8.2(a).
Estimated Total Capacity llukldlng Value is defined in Aiticle 32.8.l4(e|.
Second Am.ndm.nt Agreement means the TIM Assignment. Novation, and Second
Amendment Agreement between the (ioveinment. OMV. and Reliance dated I
August 2010.
l.ots or Expense is defined in Article 32.8.8(c).
OMV Interest means all or any part of tin- twenty per cent <20«) participating
interest heieundct deemed held by OMV as of tlx- Effective Date.
Rights Sale i. defined in Aiticle 32.8.l4.
Signature Bonin is defined in Article .'2.1 "
3.6 Article 4.13 is deleted in its entirety .uid restated.
“If the GOVERNMENT exercises the Option of Government Pankiponoo. Ihe
Government Interest shall he assigned under this Article I to the PUNx Cornpum h>
the CONTRACTOR I mines pro rata to their respective participating interests under
this Contract."
3.7 Article 4.14 is amended:
(al a new elause tut is added:
fix- CONTRAf TOR Entities shall, within a reasonable period of time,
negotiate in gixsl tmh and enter into a Joint Operating Agreement and skill,
during tlx- perind until the CONTRACTOR Entities enter into a Joint
Operating Agreement, comply with this Article 4.14 as if it is a provision of
this Cimtruet;": and
ihi existing da uses
3.8 In Altaic 16.14. after the words in the first sentence "The GOVERNMENT and" the
following is inserted:subject to Articles 32.8.6and ."
3.9 In Article 26.9 the following sentence is added to tlx- end of the Article:
"Notwithstanding the other provisions of this Article 26.9. where the
GOVERNMENT determines, as provided in Article 32.8.6. that a Charged Interest
Jlddr/ i* u> lui.«h nf any of its obligations in respect of tlx payment of Capacity
6
Buikling Pay neats - Second Tranche Instalments under Article 318. ike
<•<>' ERSMENT will have the right* *1 forth in Articles 318.6 through 318A"
3.10 Articles 27.1 and 271 and Paragraph. 7. x. aid v arc amended by adding, after the
word Quarter' in each instance in each Art*, tr and Paragraph. Ihe words "and Meath",
and in Paragraph 72. ihe winds "twenty-one (21/ are deleted and replaced by ten
(i or
3.11 Article 27.4 is deleted and icsiaied in its entirety:
■By the tenth (I0°1 day of each Month, the CONTRACTOR shall use reasonable
endeavours to provide a statement to the GOVERNMENT showing the
CONTRACTOR'S calculations of the value of Petroleum produced and sold from the
Contract Area for the previous Month. Such statement shall include the following
information:
(at quantities of Crude Oil sold by the CONTRACTOR Entities during the
preceding Month constituting Arm's Length Sales together with
corresponding sale (trices;
(b) quantities of Crude Oil sold by the CONTRACTOR Entities during the
preceding Month that do not fall in the category referred to in paragraph (a)
shove, together with wile prices applied during such Month.
(c) inventor) in vintage belonging to the CONTRACTOR Entities at the
beginning and at Ihe end of the Month: and
(d) quantities of Natural Ga> sold by tf* CONTRACTOR Entities and the
GOVERNMENT together with sale prices realised
Concurrently with the delivery of the moodily staKmrm. the CONTRACTOR shall
deliver the Charged Interest Holder. M.«uhl> Statement to the GOV KRNMENT as
provided in Article 318J201.’
3.12 In Article 29.1. after the words "shall he m Dollars and dull. the following weeds are
added
■euept a* provided in the neat wmaencc and Articles 32.8.10 through 328 ll”.
and die follow mg sentence r> added at the end of Article 29.1.
The right of offset provided in this Article 29.1 will not apply m respect of the
obligation of a Charged Interest Holder hi nuke Us Cafuctfy Building Payments -
Second Tnwhe Imtalnent* x. further provdrd in Articles 318.10 though 318.11"
3.13 In Ankle 32.1. the words “the CONTRACTOR .«iv deleted and replied with
“Reliance" utul tlie following new sentence is .uldeil .it the end
“Neilhet OMV nor any permitted assignee of OMV is. or will he. liable to the
GOVERNMENT for payment of all or any pinion of the Signature Bonus."
3.14 In Article 32.2. the words "the CONTRACTOR" are deleted and replaced with
“Reliance" and the following new sentence is added at the end:
7
U’f Axninmenr,
"Neither OMV nm uny pcimined assignee ul OMV is oi will he liable to the
GOVERNMENT lot payment of all or any portion of the Capacity Building Bonus"
3.15 A new Article 32.8 it atUcd:
HutWt.ii: Pay merits
32.8 Each Charged Interest Hold* K hound h> the provisions of this Aitick 32 8
The obligations of a CONTRACTOR Emily. to the extern it is a Charged
Interest Holier. j> set forth in this Ankle 32.8. attach to. -ul may not Ur
revered from, its Charged Interest. Only OMV (for «» tong as OMV is a
Charged Interest Holder) will huve uny rights under Article 32 8 14.
32.H.I Kush Charged Interest Holder shall pay to the GOVERNMENT
111 the Capacity Building Payment - First Truitche on denmnd.
and
12> from Fust PindiKtion and for the duration of the ivmulndci
of the Dcvclopnwm Period, the Capacity Building
Payments Second Trundle Instalments auribuied to such
Charged Interest Holder in accordance with this Article
32.8.
32.8.2 In respect of the Capacity Building Paynvnt - Seopnd Tranche
lal Ob « before th; uah (10*1 day <4 c*h M.rth a the
iVsch v«ta PWkd- the CONTRA! TOR Ju.. use
cmkjsours to provide to the GOV ERWIEM. fcycthrr with
CONTRACTOR a according web Artak 274 and Or
iBoMhly sahulioo sucurm m accordant w.ih Artak 25ia»
and Pongiafft 7.1. a statement I llr C hnrard Inl.r.si ll.ddrrs
Monthly Statement) setting out the CON TRAC TOR %
salsubbon of the Capacity Budding Value atinbutahk k. each
C'harped Interest HoUer for the preuxto* Month la rash
Charged Imrrtst Holders M.«uhl> StaUwmt the
CONTRACTOR shal detail exh item taken Mo atvmal at
nuking its cakubtam of the amounts due from cash Charged
lulciesi Holder, die quantities of Profit Petroleum produced
du.mg the Month corned by suet Charged Inicicst Hidden
Monthly Statement the s,domes of such pmductaai and ftufll
IVtrulnun sold, die Capa.il) Building Value attributed to such
sales, and the Capacity Building Payments - Second Tranche
Instalment required to be paid with respect thereto by each
Chngcd Interest Holder.
(Ill (hi the same date on which the CONTRACTOR provides the
(lurged Interest Holders Monthly Statement to the
S
TPI Ataignmmt. Novation, nrul Second Amradme.nl Agreement Ravi
GOVERNMENT in acconlance with Article 32.8.21a), e*h
Charged Interest Holder shall pay (except as provided in this
Article 32.8.2(b)! its Capacity Building Payments - Second
Tranche Instalments as shown as owed by such Chaiged Interest
Holder in the Chaiged Interest Holders Monthly Statement. If
(I) a Charged Interest Holder has sold any amount of its Profit
Petroleum to (it the GOVERNMENT or a Public
Company (or a company or an entity owned anti controlled,
directly or indirectly, by a Public Company or the
GOVERNMENT), (ii) the State Oil Marketing
Organisation ( SOMO") ot any entity owned and
controlled by the Government of Iraq, or liii) any other
entity as directed by tlx- entities detailed in li) and (ii)
above: and if
(21 any such counterparty as identified in Article 32.8.2(bXl)
has not paid tlx: Chaiged Interest Holder for the Profit
Petroleum lifted by such entity, then:
(3) the Charged Interest Holder will only be liable to pay its
Capacity Building Payments - .Second Tranche Instalments
when and to the extent such Chaiged Interest Holder has
received payment by such counterparty.
The preceding sentence docs not apply with respect to. and to
the extent of. sales of Cltarged Interest Holder’s Profit
Petroleum to any cither counterparties.
(c) W ithin thirty (30) calendar days follow ing the date on which the
CONTRACTOR delivered the Final End-of-Year Statement to
the GOVERNMENT for each Calendar Year in accordance
with Article 26.13 and Paragraph 10. and based on the
information in such Final End-of-Year Statement, the
CONTRACTOR dull use reasonable endeavours to provide to
the GOVERNMENT, in respect of each Charged Interest
Holder, a w ritten reconciliation of tlx: aggregate annum of the
Capacity Building Value and the aggregate payments of
Capacity Building Payments - Second Tranche Instalments
during such Calendar Year period (the “Annual Reconciliation
Statement").
nil If the results of an Annual Reconciliation Statement show that
any Chaiged Interest Hokfcr has. in the aggregate over the
Calendar Year period covered by tlx: Annual Reconciliation
Statement, made Capacity Building Payments - Second Tranche
Instalments in an amount less than the aggregate Capacity
Building Value attributed to such Chaiged Interest Holder
9
TPI Ataignmmt. Novation, nrul Second Amradme.nl Agreement Ravi
during siktIi Calendar Year period. Mich Charged Inicrcsi Holder
shall pay (subject to the same exception as provided in the
second and third sentences of Anielc 32.8.2(b)) tike amount of
the underpayment as shown in the Annual Reconciliation
Statement within thirty (30) calendar days following the date the
CONTRACTOR delivered live Annual Reconciliation
Statement to the GOV ERNMENT
le) If tlx results of an Annual Reconciliation Statement show that a
Charged Interest Holder has. in the aggregate over the Calendar
Year period covered by the Annual Reconciliation Statement,
made Capacity Building Payments - Second Tranche
Instalments in excess of the Capacity Building Value attributed
to it during Mich Calendar Year period, and if and to the extent
the GOVERNMENT has agreed with the relevant Charged
Interest Holder in respect of the amount of such overpayment,
such Charged Interest Holder may deduct such overpayment to
the extent that the GOVERNMENT has agreed with the
amount of such overpayment from the next following payments
of Capacity Building Payments - Second Tranche Instalments.
In no event will a Charged Interest Holder he entitled to deduct
more than fifteen per cent (15% I of the amount otherwise
payable from the next follow ing payments of Capacity Building
Payments - Second Tranche Instalments. The right of set-off
against Capacity Building Payments - Second Tranche
Instalments will be a Charged Interest Holder s only remedy in
respect of any overpayment, aixl the GOVERNMENT will
have no obligation to make any reimbursement or other
compensating payments to the Charged Interest Holder.
if) If a Charged Interest Holder fails to pay all or pan of its
Capacity Building Payments - Second Tranche Instalments
when due in accordance with Aniele 32.8. live Charged Interest
Holder shall pay interest on the unpaid amount at an annual rate
of L.IBOR plus two per cent 12% I compounded monthly from
and including the date the payment was due to. but not
including, the date (xiid.
Ig) If any Capacity Building Payments - Second Tranche
Instalments arc due to be paid to the GOVERNMENT on a day
that is either not a banking day in either tit place where the
Capacity Building Account is maintained, or the location of the
financial institution through which a Charged Interest Holder
will make such payment, then the Capacity Building Payments -
Second Tranche Instalments will be doe on the next following
banking day. A "banking day" is a day (other than a Saturday.
10
Tl'l Assignment. Novation. atui Second Amendment Agreement Han
Sunday. or public holiday) on which hanks me open I’m general
business in ilie specified locations.
Capacity Building Account
32.8.3 The GOVERNMENT shall:
la) establish and maintain the Capacity Building Account:
ilu deposit all Capacity Building Payments (and ihc proceeds limn
any Rights Sale m any finaixing secured by C ap.>city Building
Payments) received by the GOVERNMENT into the Capacity
Building Account: and
(c) annually provide’ a written report to each Charged Internet
Holder of the application of the pnxeeds of the Capacity
Building Payments (including the application of proceeds from
Rights Sales) in sulik.eni ik’tail to permit the Charged Interest
Hollers lo identify Ihc protects to which the GOVERNMENT
has applied the Capacity Building Payments.
32.H.4 Inhumation provided by the GOVERNMENT to Charged Interest
Holders pumuuni lo Ankle 32.8.3(0 shall be deemed to be in the
public domain fot purposes of Article .36.7(a).
Separate Uahility
32tS Each Charged Interest Holder b «pnad> luble land ant foully and
severally liable with any other Charged Interest Holden lo the
GOV KRNMENT for its eMipmocs. dutx-s and lubthtin under ih«s
Artxlc 32 X. A CONTRACTOR Entity that is not a Charged
Interest ll.4der will have no Uabtlfly to the GOVKRNMENT for
any claim by the GOVERNMENT arising out of or rcUied k> the
breach of any Charged Interest Holder’s obligations uadcr this
Article 318
Breach: Indemnity
318.6 (a) If a Charged Interest Holder fad, to pay its Cafucily Building
Payments - Second Tranche Irtsialnk.iUs in full when due
pursuant to Article 318. the GOVERNMENT will,
mtwihstjnihng any other prosisim of this Contraf. any lifting
agreement. any sale, or marketing agreement, or any other
agreement. autotmcicaly he entitled. ,n not less than tiiiy («)»
day* prior notxc to the defauluog Charged Interest Holder and
the CONTRAt TOR in the case of the lirst default, and not le>s
than thuty (30) diys in the case of any subsequent default, la
(I) BA. at Ihc Delivery Point or at such otfMf p.*m » the
GOV KRNMENT may decide, up to forty -f.se per cent
II
777Assignment, Ninnliim,
(45%) of ilk- defaulting Charged Interest Holder's Pix.iit
fVuoleuin. and
(2) continue *> to lift up to forty-five pet cent (45‘i) of the
defaulting Charged Interest Holder's Profit Petroleum f«
period >4 thirty «30) da>s only m respect of Bs fust default. If
the defaulting Ch-yed Interest Holder pass the defaulted
(jfx*.it) Huilling Paynk-nts Second Tranche Inadmeou m
full plus iMeresI ui ocvonlaikv with Article 32.8.2lf) in such
that) t30i di> pmod. the GO\ERNXIENT «J»U ace ooiw
iu kiting rights under thi> Arlklr 31*A in respect of such
default*^' Charged Interest H.4dcr U lie ae of aq
s^equeat default. *r GOV1RNMDCT am cxercr-r as hgta
to hftthe default** Charged baemi Holder % Prcfk Petroleum
• beilw or e.« the defoatag (barged lataoi H.*ta can e.
32X7 The hftmg nghfa of fee GOV aMMOT p-w-* n. Article 32» t.
ore cxercisoMe b> »n of set-off. without fust resort to legal process,
and » Blurt an) Irofedrty or slaum of hr default mg Charged Interest
Holder, the COVIRACTOK the Operator. or an> tehee toman. aid
regardless of tiny provisions ol tiny lilting agreement « poAisui ..|
.1 joint operating agreement or any other agreement to which the
(YINTK ACTOR or a delimiting Charged Interest Holder ts a party.
The CONTRACTOR shall ensure that all agreements in respect of
tire Idling re sale of Petroleum rcltad the GOVERNMENT*
pruerty nghu as set f.eth rn Article 32* liadte Article 32.8.7.
32X8 U) A defaulting Charged lalr.csi Holder shall indemnify th:
GOVERNMEHT from any Lam or Expense (to defined in
Article 32.8.810, below I that nuy in any way arise from the
exercise hy the GOVERNMENT of its rights in respect of such
defaulting Charged Interest Holder under Articles 32.8.6 and
32.8.7.
tin The GOVERNMENT will rehim comm) over the defence of,
and any resolution ot settlement relating to. such Loss or
Expense iikurred piii'iiont to Article 12.8.8(a). A defaulting
Charged Interest Holder shall cooperate with the
GOVERNMENT aid provide reasonable assistance in
defending ->y claims -gainst the (.03 EHNMENT arising out
«* such default of Article 32* b, the defaulting Charged
Interest Holder.
ic) Lou. or Expert* means any liohhi). lews, claim, secernent
payment, cost and expense. Interest, award, judgment, damages.
12
TV! AaignmrM. Ntnntum. iml Second Amendment Agreement Kmi
fees or uthei charge and. 10 ilte extern permitted by applicable
law. any couit tiling lee. conn lost, arbitration fee or cost
witness fee. aiul each othei fee and cost of investigating and
defending or assciting a claim for indemnification, including
reasonable attorneys’ lees, ixlkci professionals’ fees, and
disbursements: but docs ms include consequential losses,
diminution in value, indued loss or loss of profit or revenue,
punitive damages, or penalties in rvs|vct of any ti) projects
being financed or coil'd tided by the Government with Capacity
Building PaynvilU or financed or constructed by the
GOVERNMENT with proceed* derived from the exercise of
the GOVERNMENT’S light of lining ut*dcr Ankle 32.8.6 or
tii) financings of the Government dependent on cash Hows front
Capacity Building Puynvnts 01 dependent on cash flows front
the exercise of the GOVERNMENT'S tight of lifting.
Id) A claim set forth in a notice from tlx- GOVERNMENT to a
defaulting Charged Interest Holder will he conclusively deemed
a Loss or Expense if the Charged Interest Holder fails to dispute
the GOVERNMENTS liability by the end of a tltiity (30) - day
period following receipt of the notice front the
GOVERNMENT. The Charged Interest Holder shall promptly
pay the tfcemed Loss or Expense oil demand.
(e) OMV dull indemnify and hold harmless cash
CONTRACTOR Eituy wtoch is noc a Charged Innoetf Holder
front any and al Claims ni«d by the GOVERNMENT and
duestly anung oU id a hreash by OMV of its Capxily Building
Payment uhligaluns under th.. Ankle 32.8. provided ih* such
mdcranay dull not include corncquemial losses, dmuruum in
value, iuhnxl loss nr loss of profit or revenue, puiuuve
damages, or pcnakics
325.9 The GOVERNMENTS nghts under Ankles 325.6 through 325*
are aot exclusive and are wtfhoia prejudice to the
GOMRNMENTi leimuun.* rights under Arndt 45.
Payments: No Set-off or Deduction
325.10 Except as provided in Artarle 325.210 and notwithstanding any
provision in this Contract In ih. contrary, each Charged Inkiest
Holder shall pay its Capacity Building Payments - Second Tranche
Instalments without d free and clear of any deduction fori set oil
or counterclaim.
325.11 Each Charged Interest Holder acknowledges and accepts that a
fundamental principle of this Ankle 32.8 is dial such Charged
Interest Holder must pay tltc Capucity Building Payments due ami
JPf A.i/K-irnr/ii. Nrnwtiiui,
payable pumiaai to this Annie 32.K. Accordingly. in import of its
obligation. unis ihi. Article >2 X only and except a' provided in
Artkk each Ourgrd Inwri HpUs hereby •«'c ->>
obfcgjtan. Kpqib Cjp»U> Bu.WJing Payments - Second Trancte
an> failure by ihe GOVERNMKNT m any CONTRACTOR limit)
tu puy amounts due ;uid owing under the Contract or any alleged
claim (Inn .ueh Churged liuciuM llokki may have against ihe
GOVERNMENT. Opcrohir. mlwt CONTRACTOR Entity, or any
other I Vim m. whether Mich claim wise* midei or relates to this
«■ 12 Each Chreged IfaUrr JUI muU a. Capadiy Buridmg
any payment, by a Charged Interest Holder under this Article 32 H.
or the acceptance or u-r of any payment, by the GOVERNMENT,
doc iu* mi|xiir the rights of Mich Charged Interest Holder or Ihe
GOVERNMENT under Article 15. Any dispute between the
GOVERNMENT and a Churged Inieiest Holder in respect of the
calculation of each of its Capucit) Building Value or its Capacity
Building Payment Second Transit. Instalment due with reject
thereto is subvert to Article 15.9
If
CONTRACTOR Entity, or till the GOVERNMENT
terminates a Charged InMicsl HoUler us a CONTRACTOR
Entity; ami il in Ihe ciim s ol cIiiiim's (it oi hi) all or pan of the
Charged Interest of the Churged Inicivst Holder is cither
assigned and novated oi reverts to tlu* remaining
CONTRAC TOR I mines as pin. .led in Article 45. then, in
cither such case. Midi assignee oi each remaining
CONTRACTOR Entity, as the tare may be. w.ll he a Charged
Interest Holder to die euent ol .uih assignment and novation or
re.ersson. as applicable. provided dud die withdrawing or
lerimmune Chaffed Interest Holder will he wddy luNc for any
unpuid Capacity Building Payments Second Tranche
Instalments attributable ui its Charged Interest pm* to the date
H
I/’/ AMiqnmmi V.nvlf/i ui, i\nl Sn mn( Anumtmcni Agreement Rmi
of willtdrawal oi lamtoMing and Reliance or any of iu
32X14 The GO\ MLNMENT ajrv. > mlfcOMV that the GOVERNMENT
•ill only cider into a Rights Sale m »wrdme «.ih ih«> Ankle
32X14. Only OMV.ml.mly forab«>.ilMChargedInteresi
Holder. ha> am ngU* under Ihte Artiefc 32X14. Tito Ankle
32X14 dor* not create an> rights under the Contracts (Riehl* of
TWd Part*** Act I9W of my .«hn Charged Uuetest Hokto.
(X»NTRA
du* Cofllractl. and OMV and lire GOVERNMENT may agree in
any wane* m respect of th» Ankle 32X14 without ihe consent of.
« Mice to. any .rher Charged Imcmt Holder. CONTRACTOR
Entity. i* other Ktson.
la) For purpose* of this Aitkk 32.8 I I. "Rights Sale' mean* a
sale and assignment of the GOVERNMENT'S rights to
receive the Capacity Building hiyincnts Second Tranche1
libialiiKM* in i on pod of the OMV lutcresi from OMV.
whether such sale mctudes any Capacity Building Payments -
Second Tranche Instalments due from another Charged Inlcioi
tbi When the GOVERNMENT and a proposed purchaser have
negotiated Ihe litutl terms of a Rights Sale, the
GOVKRNMKN I slull notify OMV. for so long as it is a
Charged Interesl llnkki. of the GOVERNMENTS intention
to effect a Rights Side, ami (ii) provide OMV with a copy of
all. agreed. Iin.il diallv of documents that *:i I'oith tlv tennsof
the r»>posed Rights Sale Subject to the nest sentence, the
GOVERN Ml N I ssifl ci ■wader any objection tkn OMV may
provide to die GOVERNMENT in respect of die pr.pcwed
of the f.O\ ERNMENT and creates no luh.hr> for breach or
obtigaUun to res(*-wl
15
TPI Ataignmmt. Novation, nrul Second Amradme.nl Agreement Ravi
Ic) Subject to tl»e provisions of Article 32.8.14. and for so long as
n is a Charged Interest Holder. OMV has the right to become
the exclusive counter-party to the proposed Rights Sale on
exactly the same terms as the proposed Rights Sale. it', within
thirty (30) days of receipt of the GOVERNMENT'S notice
aixl draft documents pursuant to Article 32.8.14(b). OMV
notifies the GOVERNMENT that OMV (i) accepts all of the
terms of the proposed Rights Sale without any reservations or
conditions, iii) is exercising its rights under this Aiticle
32.8.14. and (iii) represents it will (A) close the proposed
Rights Sale within thirty (30) days of such notice and (B) fund
the Rights Sale in accordance with the terms set forth in the
draft, agreed, final documents provided to OMV by the
GOVERNMENT pursuant to Ankle 32.8.14(b). OMV may
only exercise this right with respeet to the entire proposed
Rights Sale, and not solely with respect to any portion that
involves Capacity Building Payments - Second Tranche
Instalments in respect of the OMV Interest payable by OMV.
id) If OMV does not close tit acquisition within thirty (30) days
of a notice as contemplated by Article 32.8.14(c). the
GOVERNMENT may close the Rights Sale with the
proposed purchaser under terms and conditions no more
favourable to tlx: proposed purchaser than those set forth in the
GOVERNMENTS notice and documents provided to OMV
pursuant to Article 32.8.14(b). If the proposed purchaser is no
longer willing to enter into the proposed Rights Sale, or is no
longer w illing to do so on tlx: same terms and conditions, the
GOVERNMENT will have all rights and remedies against
OMV as are available under law.
(e) The GOVERNMENT shall not enter into mere than three (3)
Rights Sales (a Rights Sale to a CONTRACTOR Entity w ill
not count against such limitation), and no Rights Sale may be
in an amount of less than one-third < 1/3 ) of the then Estimated
Total Capacity Building Value at the time of the
GOVERNMENT’S notice pursuant to Clause 32.8.14(b).
Nothing in this Article 32.8.14 prevents tlx: GOVERNMENT
from directly offering a Rights Sale to OMV. For purposes of
this Clause 318.14(e). "Estimated Total Capacity Building
Value" means tlx: GOVERNMENT'S reasonable estimate of
the present value of the expected stream of Capacity Building
Payments - Second Tranche Values, based on the expected
production profile, and Petroleum Costs, and using a discount
factor (for purposes of comparison only) of ten per cent < 10%).
TPI Ataignmmt. Novation, nrul Second Amradme.nl Agreement Ravi
lf> No pan of this Article 32.8.14 will apply 10 (or otherwise bar
or impair) a Rights Sale to a pan of the GOVERNMENT, a
Public Company, or a pan of the Federal Government of the
Republic of Iraq (including the Central Bank of Iraq), in each
ease with respect to which the GOVERNMENT is
unrestricted by this Article 32.8.14.
(g) Nothing contained in this Article 32.8.14 will apply to (or
otherwise bar or impair) the GOVERNMENT from
transferring or encumbering all or any rights to receive the
Capacity Building Payments - Second Tranche Instalments to
a reputable international financial institution or special purpose
vehicle organised solely for the purpose of security relating to
finance organised by a reputable international financial
institution. The GOVERNMENT shall pay the proceeds of
any such financing arrangement into tit Capacity Building
Account.
ill) Each Charged Interest Holder shall fully cooperate with the
GOVERNMENT according to the terms of any Rights Sale or
financing arrangement involving Capacity Building Payments
- Second Tranche Instalments payable by such Charged
Interest Holder, including any requirement that Capacity
Building Payments - Second Tranche Instalments be paid into
a trust or other specially encumbered account with a reputable
international financial institution. The GOVERNMENT shall
provide reports on the use of the proceeds of such financing
arrangement to the Charged Inteicst Holders in accordance
with Article 318.3
li) The rights of OMV under this Article 32.8.14 will
automatically expire aivd lie void on the fifth <5'*') anniversary
of tike CONTRACTOR’S declaration of a Commercial
Discovery in accordance with Article 6.10. Any claims that
the GOVERNMENT may have against OMV arising out of
related to OMV's breach of its obligations under Article
3241.14(d) will not be impaired by this Article 32.8.l4(ii.
lj) (I) Tl>e lights granted to OMV under tins Article 32.8.14 are
exclusive and personal to OMV. OMV shall not assign all
or any part of its rights under this Article 32.8.14. Any
purported assignment w ill be void nixl all rights of OMV' or
any purported assignee uixler this Article 32.8.14 will
automatically terminate without notice.
(2) If OMV closes a Rights Sale with the GOVERNMENT.
OMV shall not assign its rights under such Rights Sale
17
I I'l Awgnmmt. Noratitm, urn! Sri mu! Aimmburn) Anrtemrni llini
agreement without the pitot consent of the
GOVERNMENT n>< fc. fv uwahK'ld .*
ddayedi mih.. Artwlr 31* I4tj»2i«
aiai OMV
C*m*y
<3) In the event of Mich assignment ol right* under u Rights
Sale agreement in bleach of Atticlc 32.H.I4
GOVERNMENT nitty elect to leimiiwte suth Rights Sale,
free of any clnini or liability of OMV m such assignee.
(-1) OMV shall indemnify the GOVERNMENT from any Loss
or Expense (as defined in Atticlc .12.R.HIO. above) that may
in any way ttriic front llto cxctvisc by tlic
GOVERNMENI of its tights mulct this Article 32.8.140>.
The GOVERNMENT will retain control ovei tlic defence
of. and any icsohilion or settlement relating to. Mich Loss «u
Expense. OMV shall cooperate unit die GOV ERNMENT
and proside reasonable assiUaiwc in ilefending any claims
*a*« the f.OV ERNMENT A data utldiai me
boa u» COVODOBtr v. OMV Ml hr o-wWeh
dcvnvd a Lews if OMV lad. to dispute the
t*t\ ERNMENT. fcdafccy bytenlof. Hurts (»» -
day period fcfloss rexvip* of the MW loan the
GOV ERNMENT OMV Ml promph pry tor deemed
Ian. on denxini
3.U la Arndt WMht following la added after -Article »’ “ami Article 32*.“
3.17 In Article 41. *c following ■* added at the end of ihe Article
•Noiwilhslumloig the foregoing, this Article 41 will ..a afdy a. the GOV I RNMEVT
in lespcvl of any claim ot proceeding arising out of in related to the cxcicIhc ol rights
by the GOVERNMENT a. set hath in .Articles «2 K.ft through 32.KX. in rcs|»Ct of
which the GOVERNMENT expressly reserves all sovereign immunities
3. 11 In Article 42.1. the foil.nsing icntcnce is added ai Ihe end .4 da- liisi semens.
'fins Article 42.1 doe. not apply lo any Dispute arising out of. or trialing to. ihe
cceicise of rights by the f'A>VERNMENT » set l-Oi in Article 32X6. whnh
Disputes shall. except only as provided in Article 32 H I 2. be subject to the cuhisise
jurisdisliofl sif the courts of the Kurdistan Region hvaied in Lrhtl.'
3.19 In Atticlc 45X after “31." i. added "318”.
IK
iri Axirnmem SetnmJ AmmJmtnl At'rtmnU Km ■
3.20 The follow ing consequential amendments are made:
in) in Paragraph 3.1.9 the words "wiih the exception of Tuxck described in Article
31.21 and bonus payments? arc deleted and replaced with "with ihe exception of
luxe* (described in Article 312). bonus payments. Capacity Building Payments,
ami any other payments";
lb| in Paragraphs 4.4 aixl 13.3.2(h). after the wool "bonuses" in each iilMancc. ",
(.(pueity Building Payments, or other payments" is added.
(c) the heading for Article 32 is deleted and restated
"ARTICLE 32 - BONUSES: CAPACITY HIIIMIINC PAYMENTS’; and
id) in Article 39.6. the following is added at ilu- end of the sentence following lhe
winds “Article 4":
"and Article 32.8."
3.21 The following provisions ate added to the existing pmvUions of Article 44 I under the
existing heading To ihe CONTRACTOR”;
Tncasc of OMV:
OMV Rovi GmbH
Attmllon Managing Director
Address; Trabrcnnstrasse 6-8.1020 Vienna. Auuru
Email wolfgang rempWoms*«■“
4. OMV PAYMENTS
4.1 OMV shall pay the Goscrmmcnt USttflOOflOO by way of cleared fund, on or before
the Completion Dale. The Gmvmntmi shall deem its receipt of such payment in full as
ID die Capacity Budding Payment - Inn! Iran.he uodn the Contract as amended by
this Agreemmi. and (ui in full dndurge of OMV's obligation with respect thereto.
4J Subject to Clause 4 3. OMV shill p>> Reliance an amount eqtlixalent to 100*4 of the
ptxipu>tM« of the lYtiukum Costs ukunx-J by Reliance attributable to the Assigned
TPI up in and including the Completion Date. OMV shall pox the amount pi> able to
Reliance in two tranches in acvwlance w ah this Clause 4.
4-3 In accordmce with Clause 4.1 and. subject to Clauds 4.6.4.7 anJ 4.8. OMV shall pay
l SV2.OM.9»0 to Relunce in acvsmlanee with wire iastru.-oons provided by Reliance
llhr First Tranche Assignment \mount
4 AI Refcmce and OMV agree that the Rest Tranche Ariignf Amount
represents an ankwint cqoivalci* to 100*4 of the proportion of llv Petndcum
Costs mciired b> Reliance up to are! induing 31 August 2009 (die Cost
Determination Dale i that is JOribataMe to the Assigned TPI.
19
Snemd
4_U OMV xhail pa\ ihc Fust Tranche Assignment Aauaa on the taler of (i> the
Completion Dale aiki lii) seven Buxine** Day* following receipt of wire
instruction* from Reliance Businrx* »■> nxan* a day (other than a
Saturday. Sunday or public holiday I on which tank* are open foe general
business in London. I need Kingdom
413 Reliance shall fenhwilh pros vie it* written confuimixo of irceip of it*
port** of the first Tranche Assignment Annum to OMV and the
Gmcmnmi.
4.4 Subject to Clauses 4.6.4.7. and 4.8. OMV shall jm> to Reliancv amounts equivalent to
KKKi of the proportion of the Petroleum Costs inclined h> Reliance after the Cost
Dcictmination Date up to and including tlx- Completion IXilC (collectively. the
Sreond Tranche Assignment Amounts”) that are attributable to the Assigned TPI.
Such Second Tranche Assignnxnt Amounts shall be detemtined by Reliatxc on the
basis of cost recovery statements'oeher records establislted and maintaiixd in
accordance with the Contract, and Reliance shall notify OMV of such annunts as soon
as reasonably practicable aftet tlx Completion iXitc. such amounts Ixing subject to
uutlit and adjustment in accordance with Clause I H.
4.4.1 OMV shall pay the Sccood Tranche Assignment Amount to Reliance, in
accordance with wire instructions provided by Reliance, within seven
Business Days of tlx receipt by OMV ol notilkulion from Reliance of the
rulin' of such Sccood Tranche Assignment Annum a* provided mthis Clame
4.4 atkJ as audited and *d|u*led pursuant to Clause 4.8 lit required I.
4.4J Reliance shall forthwith provide it* written coofimnuoa of recrif* of u*
portion of the Sev.ud Tranche Assignment .Amount to OMV.
4.43 If OMV 4es nor pay die Second Tranctx Assignnxni Amount to Reliance
within seven Business I>o>v then fen each day during which tlx Second
Tranche Assignment Amuunl tor any pxtioc thereof) is overdue, the unjud
at LIBOR plus two per cent <2*4» compounded
43 OMV shall pay its participating interesi shorv ol Petroleum Cods that accrue oo and
from the Completion Date (taking into account the piymetus made by it pursuant to
do* Clause 4 and ududug tfx l.vcludcd Payments!, and OMV shall pay its
participating interest share of Pn«du.tH« Boluses.
4.6 Reliance acknowledges that under the Contract (cither before or after amendment by
this Agreement), payment of the CupncUy Building Bonus or Signature Bonus is not
recoverable as a Petroleum Cost, ilw obligation to pity the Capacity Building Bonus and
Signature Bonus is an obligation solely of Reliance in accordance with Articles 311
and 312 of the Contract, and <>MV is not liable under tlx Contract for payment thereof
Accordingly. Reliance shall not include payment of the Capm-ity Building Bonus or the
Signature Bonus pursuant to Articles 32.2 uikl 32.1 of the Contract (the "Excluded
20
in Alignment, Novation, .nut Stand 4m*vitoiiiM Agreement Ravi
Pay mints" t as Petroleum Costs for lit purposes of detcmilning the First Tranche
Assignment Amount and lit Second Tranche Assignment Amount
4.7 W-*x1 to Rrfiatte * iar«t of each erf U* Fast Tnrefce
Se*.«d Tttotfae Asuptnra Atroiat OM\ will he i
4J
Amount <* die Second Tranche Assignment Amount, which audit rights shall
he those set out in the 2002 AlPN Model Form Internal tonal ()|ieraiing
Agreement: ot
any tights of any Party to audit the accuracy of Pecmleuin Costs .is provided in
the Contract.
I nl lowing any .unlit, each of OM V atscl Reliance shall forthwith make sit It payments to
e.ieh other as may It necessary hy w ay of adjustment.
4.9 Reliance shall provide wnttn w ire instructions to OMV in respect ol lit payment of
the Fitst Tranche Assignment Annum and the Second Tranche Assignment Amount on
«* before the Completion Date
5. RlfM.M! STATIONS
5-1
5.2.1 The Contact is in full force and effect and n i» nut in brash >4 any of its
ohiigarions thereunder.
5 2-2 Except for this Agreement and agreements identified in Amts I. there are t»"
agreements to which it and the (iosviniia.nl is a put) tin pertains to
FVtrotcum Optations in tit Contract Area
SU The Contwtor's tceords of Petroleum Coats upon which the f ast Tranche
5-2-5
21
JVI Atrigammt. NmvHim, arut Scramt Amwlmtni Agrrrmetu It ml
The Government represents to OMV:
5J.I The Government lias not terminated the Contract and has taken no action t«
cause Ilk' Contract to be terminated
5JJ Eucpt for the agreements identilied in Annei I. time arc no agreements in
effect to which the Government is a party granting a right to conduct
IVtrolcum Operation* in the Contract Area Ihc of) of the Contract and the
first Amendment Agreement that has been provided b> the Government to
OMV is a true and complete copy of the original agreement
5JJ KF.PCO has no claims against Reliance in. arising *«n of. nr relating to the
Contract or Petroleum Operations in the Contract Area, and upon completion
of the assignment and novation of the Assigned TP! to OMV. KF.PCO will
tlicicipon have no claim against OMV or Reliance 01 any other Ponton arising
out of or related to such assignment and novation or live purparting nomination
of KEI'CO us a Third Party Participant.
5.3/1 The Government is not a party to any administrative or judicial ptocevding,
litigation, at arbitration that is likely to materially prejudice the assignment ol
Ihc Assigned TPI to OMV pursuant to this Agivvimnl ot the amcnlmcnt* hi
the Comract contemplated by this Agreement
SJS
InchaiOMV mi Iriuu. far fedf only. reprew-.
SA.I It. entry Mo mi pcrt.«mu« d the. Agmm fuse ben by aJI
necessary company action
fl.4.2 l itis Agreement constitutes a valid legal, and binding ,rgrivo»ia ,4 it.
5.4.3 It has received all authorisations and consents required undci Ihc law under
wins'll it is organised that are or will be necessary lor the cntiy into and
ivtfornuinec by it. and the validity and enforceability tigiunsl it. of this
Agivement
5.4/1 I'.wvpi as piiivMIcd in the next sentence. tliere is no Liw oi agreement to w hich
it is a party tlutl conflicts with, prevents enu v into, delivcty. and performance
by It of. Ol, alls into question die validity, legality and enloivcability against it
of. this Afreemrni. No representation is made in ics|»x1 at die Laws of the
Kurdistan Region or Iraq.
5.4.5 It is not a put) to any administrative or judwul pn seeding. litigation. o*
arbor at* * dial could affect the validity or eoforccaUIn, of this Agreement as
toil
5.4.6 Neither it nor any of its Affiliates has made, offered, or unth-iiscd (and has not
agreed to make and does not expect will be made), with re.pcct to the mutters
which are die subject of this Agreement or the Contract, any payment, gift,
promise or other advantage, whether directly or iluough any other Pcrwm, to
IP! Astignmmt. Novatiim. amt Sti
hi foi the ure of Ivnclit of any public ollieul u> . any pci von holding a
legislative, administrative or judicial office. imluding any pcison employed by
or ading on l*chidl of ll>c Govemmenu m any political pally or political party
official of candidate fof office, where oxh payment. gill, pfomne or
advantage violate m lb: laws of tit KuidiUan Regno or of lr*+ (Ml the lavas
at be place .4 or to pnto*sai (Ur ■< tos*e~. or lint the
praw»4ex described to B* Cense*--- us < intoning B.tor. of Foreign
PM: OfTw^v « Itouutil Buviku Tiansastaos. w(«0 * Pan. on 17
December 1997. «U» entered •»> force cto IJ lebma.) 1999. and the
iincluding any profit, it may derive in ropevt oft the Cimtract t. held (or to be
held pursuant to tin. Agreement i or pay Me to. duedy .» mluccth. to c* for
the benefit (directly or indirectly t of any public official or any political pmy
hi |hililienl pally official or candidal.' I’m offtec "I ih> KtmlivUii) Region or
Federal Republic of Iraq-
5.5 The Clovcntincni icprevcnis io Reliance ihai KliK'O Iiiik iui eliiiin. uguinsl Reliance in.
an.mg mil of. oi relating to the Contort oi Petroleum (Jpcrutions in the Contract Aron.
5.6 l .uepi a. provided in the next sentence, the relevant Pally nukes iln icprereniaiiins
.oil wan.min. .it mil in this Clause 5 on the Agr.vn.nl Ilate .utd on the Completion
Dale. The represent aiioas of the Govemnwit in clauw-t 5 * and 5 .5 are nude only on
■he Completion Date
6. JIH'lllPtkMlM. K.KHMIM
6.1 Subject t> the pusiuons of die Contract. Relonre aol OMV dull negotuir in p»J
oprrtotog agiren---t ithr Joint Operating Agrremmt ) using the 2002 AIPS VtmJrl
•he piuKiple. il<1 ailed in Annex 4 and -Article 4.14 of the Contract. Reliance will
continue to hr the Ojvratm under the Contract and vs ill be the Operate* pursuant to
such Jmni 0|vi.f irg Agreement.
62 Sohyrxt to the prosisuns of lb: Cuouact and un tad) time av a Joint OjviaUng
in accordance nh Clause 6.1. Reharae. as dr
l of OMV fir.
la) dir apptmal of a Weal Program to br suborned to the Goscronsei*. arsJ
lb) any over-expenditure j» set out in article 6.8 of the 2(102 AIPN Model IV»rm
International (»| via line .Agreemeru.
23
in Aiiifnmrnt. Nomtum. and Set ml Amenitmc it I Afnetneni Kmi
7. GEMJUI PROVISIONS
7.1 ArtK b 36 damnation at*! CimftJmujIiiyy, 39 (Atugiuirnl twtl Change of CoiUrolK
II (Hatttr.f S-trnm lmuui<>. 42.1 (AVgo/rurlnri. MrdialUm and Arbitration). and
n i.W.r.i ,4 the Contract apply to (Iris Agreement. Unlcw othcrwi.sc specifically
deleted. amended or otherwise changed in this Agreement, all other leims and
COinlilions of the Contract stall remain valid, enlmceiihle ami in full effect.
7.2 This Agreement does not create any right under the Contracts (Rights of Thud Panics)
Act IW that is enforceable by any Penon who is not a Party (a ‘Third Party"). The
Parties may rescind or vary Use terms of tins Agreement uiihxrt notice toot the consent
of any Hard Party.
7J Except for Ole Contract. this Agreement constitutes the final, complete and exclusive
expression of the Parties- agreement on die mutter* contained in this Agreement All
prior and contemporaneous negotiations and agreements between the Parties on the
mailers contained in ilus Agreement urc etpiwsly merged into and supeneded l»y this
Agreement I he provisions of this Agreement may nor l*e explained, supplemented .>r
i|ualilietl through evidence of mule usage or u prior course of dealings. In entering Into
iliis Agreement, neither Party has relied upon any statement, representation, warranty or
agreement of the other party except for those expressly contained in this Agreement
llu-rc is mi condition precedent to tlic effectiveness of this Agreement. ar»l there ore no
trprcscouiions or warranties. in each case odter than those expressly suu-d in this
Amvincnl Nodung in this Agrocawat *vll l«a.t or exclude a Pity’s liability arising as
all actions reccssio .* dexuaMe lo co'umncue and male cftsMne the transactions
73 The Parties may amend Out AgK-ens.nl only by an agreement of the Pomes rlui
identifies itself a. an aiix-nJincni to tins Agreement The Parties may waive any
provision in thk Agrs.vus.-m only by a writing signed by the Party against »hmr the
waiver is sought to Iv enforced. Any amendment waiver, m caruciM %igi»-d liy the
Minister of Natural Reserves is boding on the Government No failure or delay in
exercising any right or remedy. or in ro{Uring the sainfa.t»a of any cuodmmt under
this Agreement by a Party, and no act. omivsion or course of dealing between any of the
Parties, w ill operate as a waiver .* estoppel of any right, remedy. '* condition. A waiver
made in writing on one occasion will be effective only in ihui instance and only for the
purpose stared. A waivs-t once given is not ro be construed as a waiver on any future
occasion. No waiver <* amendment in respect of this Agreement will constitute a
waiver or amendment ol any other agrvviivtu between the Parties.
7 A e-OL-hof whKhl
appear on the same counterpart, and delivery of ;
page by fa.'simile or clcvtnaiic scan i» av effective
:•4
in Asurnirmt. Ntmuum, and Second Amendment Agreement Kmi
executing and delivering this Agreement m the presence ot' the other Italic* This
Agreement is effective upon delivery of oik- executed counterpart from euch Itaty to
each of the other Itaiies.
7.7 This Agreement hind any non contractual obligations arising out of or in connection
with it) is governed by I ngUdi law.
STATUS OF AORKENIKM: ( OMI'I.K TION
8.1 Clauses I (DrJitUiltm wul Interpretation», Clause 5 {Representations). 7 {lienerat
Provisions), and this Clause 8 (.Vrn/irt of Agreement: Completion) come into force on
the Agreeniem 1 )utc.
8.2 The remaining Clauses of this Agreement other than those listed in Clause 8.1 w ill only
come into force on tlio Coniplelion Date.
83 Hie requirements lor completion arc- set fonh in Annex 2. The Completion Dale means
aixl will lx- tlx- dale rei foith in a certificate of completion signed by the Minister of
Natural Resources. OMV. ami Reliance in the form and content as set forth in Annex 3.
8.4 If the Completion Dale has not occurred by 31 August 2010. or such later .late as the
Government may set. then tins Agreement shall terminate automatically and. except as
provided In Clause 8.5. the Panics shall treat this Agreement as void oh initio.
8.5 On termination under Clause 8.4. c*h Party will he discharged from an* further
obligations or buddies under this Agrevitrent wdlkui prejudice to any labdiue* dm
have axrwl up to the date of icrmuurmi of this Agreement. If OMV has made any
payments pursuant to Clause 4 prior m lenmnation of lhi» Agreement. the recipient
shall promptly return such (xismeni to OMV.
[Stgnalare page/olUms.]
For *rd on behalf of &e Kurdi.tan Regional Go.en.mtot af Iraq:
Prime Minuter Minuter of Natural Resonrcca
Kurdistan Rcgwoal Government Kurdutan Reponal Gconntm
On behalf of the Regional Camel On behalf .f .he Minbtr, of Natural
for the OU and Ga* Affairs Resource. in (he Kurdistan Region
oflbeKurdialaa Region Iraq
tJM
AAC/c-
Harham Salih ii,
For and on behalf of OMV Ro»t GmbH:
Signature........
Title: ...........
Nome:............
For and on behalf of Reliance F.iploratlon & Production DMCC:
Signature.......
Title:...........
Name ..........
\Slxnatnrt pagr to TPI Alignment, Novation and Second Amendment Agreement - Rovi\
26
It'l Anl«i«»oir.
For ami on Mull of Iho Kurdistan K
Prtmt Minister Minister of Natural Resources
Kurdistan Regional Government Kurdistan Regional Government
On lirhulf of the Regional Council On behalf or the Ministry of Natural
for Hu- (HI and Gas Affair* Resources in the Kurdistan Region
of lie Kurdistan Region - Iraq
Signature: ... Signature.......
Burhant Salih Ashli Hu\%r*dmi
FUtucc fWoc^f-
U
For and on behalf of RHUnre F.apfaratioa A ProdxUoa DMCCi
Tale.
b!gi«Tf » m *+ .WMWWtanAnMimMt-^l
26
I l‘l Asitgnmm. \mution.
• or mid on behalf of the Kurdistan Regional Government oflruq:
Prime Minister Minister of Natural Resources
Kurdistan Regional Government Kurdistan Regional Government
On behalf of the Regional Council On behalf of the Ministry of Natural
for the Oil and Gas Affairs Resources In the Kurdistan Region
Of the Kurdistan Region - Iraq
Signature:.............................. Signature:......
Barham Salih Ashti Hawrami
for and on behalf of OMV Rovl GmbH:
Signature.
Title:.........
Name:.........
For and on behalf of Reliance !\plo ration A Production DMC'C:
SignaiiiK.........................
Title:..........
Name:.........(. JJ...-.& -B S >
\Sixna/urf r«gf lo TPI UO^amoil. \fnHMH *nJ StnmJ \ntnJment Ag/e*mtn< -
26
TPI Ataignmmt. Novation, nrul Second Amradme.nl Agreement Ravi
Annex I
Agreements Pertaining lo Contract Area
1. Production Sharing Contract dated 6 Nov ember 2
2 Production Sharing Con tract dated 22 December 2006 < superseded by # I).
3. Finn Amendment Agreement dated I August 2010 between the Government and Reliance.
27
TPI Axrigamtnt. VoivtfiVui. iirul Si-humI Anmulmntl Afccwn Rml
Anno 2
( cmphitun
>»t Krxv.pl olliSS6. fiomOMV m discharge of the Cafcxii) lloikluiy Pay mcnl - Him
Tranche;
) Receipt olhoard resolutions and signing authorities from OMV and Kehunce in formond
content reasonably satisfactory lo the Government: uinl
(cl Hit (lovcriimciu is saristied ihni each of live representation* of .1PUity made to the
Government are iiik and coned as of the Agtvemenl Dale and as of the (\Hiiplciion Dale.
► ^ I lx completion R(|iiircmenis «if OMV arc:
(a 1 ()MV has received a fully cxecuied copy of this Agreement;
(l«) Rc.vipt of wire insiiueiions from Reliance and ihe (•ovcmnvcnli
(c 1 Keivipi ol hoard resolutions and signing uuiltoriiics from Reliance:
MV is satisfied iha« ihe Firsi TUnclic Assignment PuynKure .I** >,« .. lode pro* tsun for
die |U)iik-nl of any Exclud'd Amount*.
(el (>MV IS satisfied thai each of die icprescnuiions of the mher Partre* made k> OMV arc nr
and turn'd a* the Agreement Dale and Ihe CompIctM* Dale, and
The completion re<|uiremmts of Reliance are:
1 a» Reliance has received a folly cxecuied copy of this Agreement:
(hi Receipt of the Fust I runchc Assignment Amooni by Reliance:
(e» Receipt ol hoard re solutions iuid signing authorities from OMV; and
id) Reliance i* »ull*lied 1h.1i each of the representations of the other Parties made to Reliance are-
ime and cotrevl as ol il»- Agreement Date and the Completion Date.
2X
7/7 Assignment. Nomliwi, nut Sr fond Ame/ulmrnl Awrrmeni Kmi
Annex 3
Form of Certificate of < 'nmpUtion
COMPLETION DATE. _2010
This Certificate of Completion Ls signed and delivered punwiini to < Itiusc X.' of the Assignment,
Novation, and Anvixlmcnt Agreement by and between the umfcixignod itlx- 'Agreement '). Icrins used
in this ecttifieuie Of completion have the meanings set forth in the Agreement
Each of iIk* undeisigned parties to iIk Agieenient:
1. represents that the representations of such Paity were line ns of the Agreement Date and arc true as of
the Completion Date;
2 ccnilies to tIk* other Panic* that ull of the requirements for completion in respect of itself in the
Agreement ha* been satisfied or waived: and
3. agrees the Completion Dale shall he the date set forth in this certificate of completion as the
Completion Date and that, in accordance with Clause N.2. all of the tenns of the Agreement are in full
force and effect.
The Panics may cuvuic this certificate m three ownicrptrts. each of which consumes an original.
all of which. cflUeeliscty. among* only one COO flea* of compktion. The signature* of all of the Rmies
need not appear cm tic same counterpart, and delivery of an executed counterpart signature pa?e by
f* timile or is a* effective ** executing and ifcivcring this cenificate in the preset*.*: of the odw
pjttK-* This certificate i* cfltdht upon dr liven id ooe executed counterpart firm each Party to e*± of
its: other Parties, and is only effective when each Party has signed i.
(Sfgnurun' i*ige follows. /
29
TPl Assignment, lYoivtfiVvt arui Second Amf/idmcni Agretmem Jbnv
For aiul on behalf ol OMV Rnvl Limited:
Signature
Tick-:.....
Name.....
I ni' und on behalf ol Reliance Exploration & Production DMCC:
Signature......................
Title:..........................
Name:.........................
For and on behalf of the KurdKtiin Regional Government of Iraq:
Minivter of Natural Resource*
kudi'un Regional Government
On behalf of the Mrary of Natural
Rc»Kirces in the Kurdistan Region
Avhn Ha* rami
{Sttpulurr pure bi the Cetttfh ate of G*npiet*m - R.m/
30
TV! Astignmrnt. Novation, mu!Second Amendment Agreement «<»»
Annex 4
JOA
In this Annex 4:
"All'S Models means ihc Model JOA and the Model Accounting Procedure.
• JOA Puiiln" means OMV and Reliance.
"JOA Principle" mean*:
la) Article A.2< AI Purticipating Inteiesi in asx.trd.nKc with die Agreement;
lb) Article 4.1 Operator. Reliance;
(C) Article 4.8 No Commingling of funds (alternative I).
Idi Artiek' 5.9 uinendcd ui read: a general voting puvt mark for the operating
committee of an affirmative vote of an agreed percentage of Ihc Participating
Interests, which sJtall not be more than 75‘f of Ihc Participating Interests;
OMV consent for the following decisions
Drilling deepening, testing, sidetrucking, plugging back, recompiling or
rew inding of exploration wells.
Determination and declaration of comiiKiviul discovery.
- Approval of or amendmcM lo the development plan.
- AKmdonmeni/drxonunissHmng
(e> the two members designated by the Contractor to funkipue in the Manage mem
ComnutKe will he one Reliance representative and one OMV reprvscnwivc:
Option (D) alternative I - exclude any operation pursuant to an approved
Development Plan.
i hi AitKle 9.2 - disp.ro urn of etude oil; - lifting agreement k* be concluded three«h
months po<» to the anticipated dare of commencement of commercial productioa
Ialternative 2>:
|i) AitKle I*. I • fcaelbh law as applicable law laltemative I).
Ijl AitKle I H.2 Arbitration - ICC aibitranoo and expert determination.
Ikl Noo Opctainr audit rights in accordance with Section 1.8.1 of the Model
Accounting Procedure, which must provide for at least 90davs advance notice in
the fust line thereof and a period of 24 n*mth» following the end of the relevant
Calendar Year in the fourth and thirteenth lines thereof;
m SnW.tam*ml Agfrrmrmi Mm i
Join I Operating < ummitlr*' fete the rivalling set forth in the Model JOA.
Model Accounting Procedure mean, the 20OJ AlPN Model Form International Accounting
Pncedn.
Model JOA mean, the 2002 AIPN Model Form Imenuuooal Operating Agreement.
Participating Interest has the meaning -er forth in the Model JOA.
2. OMV and Reliance -hall endcatour to agree, uithin three month, of the Agreement I>atc. a
joint operating agreement aang the AIPN Model, a, the basis for neg'HiatMAv Reliance dull
pmide OMV » ah a first draft joint operating agreement ba-ed on the AIPN NkxJci, that i»
con,iueni nith tin- annex 4.
J. The JOA Parties dull apply the JOA Principles from the Completion Date until such time as
the JOA Patties lux signed a joint operating agreement
32