NOTICE: The text below was created automatically and may contain errors and differences from the contract's original PDF file. Learn more here

 FIRST AMENDMENT AGREEMENT 



relating to 





the amendments to the Production Sharing
Contract relating to the Cilia Sutlh Block 












between 











TIIF. KURDISTAN REGIONAL GOVERNMENT OF IRAQ 













and 











FORBES & MANHATTAN (KURDISTAN) INC. 











and 













PETOIL PETROLEUM AND PETROLEUM PRODUCTS
INTERNATIONAL 


EXPLORATION AND PRODUCTION INC. 











and 











GENEL ENERGY INTERNATION AL LIMITED 



 

 TABLE OF CONTENTS











1. DEFINITIONS AND INTERPRETATION...................................................................2


2. AMENDMENTS TO CONTRACT...............................................................................2


3. REPRESENTATIONS.................................................................................................16


4. GENERAL PROVISIONS...........................................................................................17


 Him Amendment Agreement (Inn Nuikh











FIRST AMENDMENT AGREEMENT











I bin ugrccincnt (the "Agm-mmO is entered into it* of I August 2010 (the "Agreement Bale")


between:




"Government");


(2) FORBES & MANHATTAN (KURDISTAN) INC., a company wtnbllxhcd ami


existing under the laws of Burbndov. wlmsc registered office iv tit Suite 20.1 I nuriston


House P.O. Box 1132. Collymore Rock. St. Michael. Harbado* 1111 IKHKI. an


afliliote of Foibcs & Manhattan (Barbados) Inc., a company existing under live laws


of Barbados. wlx-vc registered office is at Suite 203 Lauritfon House P.O. Box 1132.


Collymore Rock. St. Michael, ll.uk.dos BB 11000 (“Forbes'');


<3) PETOIL PEI ROI.EUM AND PE I ROI.EUM PKODI CI S INTERNATIONAL


EXPLORATION AND PRODUCTION INC., a company established and existing


under the laws of Turkey, wliose registered office is at I diom l add»i No. 16.


(..O P.. 06700 Ankara, Iuitcy ("Petoin;and


(4) GEN EL ENERG) INTERNATIONAL LIMITED. a company established and


existing under the laws of British Wc»i Indies, whose registered office i» at


Caribbean Suites. The Valley. AnguilU. British West Indies TV I I IP (Genel)


teach a Party" and collectisets, the Parties”).








RECITALS


(A) The Got eminent. GcneL Forbes and Petoil ate part*.-, to a Production Shanng Contract dated


11 June 2001 in respo.1 of the Chit Surih Block in the Kurdistan Region of Iraq (the


-Contract” >.





(B) The Parties wish to amend the Contract to obligate each of GcneL Forbes and Petoil. and


future holders of all or pan of the participaung micrwt. held by Gend. Forbes and Petoil at


the Effective Date, and future holders of all or any partKipating interest (except in respect of


the Government Interest) to pay capacity buildmg payments to (he Government Gend.


Forbes and Petoil are willing to agree to charge her participating intcrcstv with the capacity


building payment obligations, and the Panic, arc willing to agree to the appropriate


amendments to the Contract


The Government will deposit ail capacity building payments into a segregated account for use


(C)


wiclv to support and finance infrastructure and capacity building project* in the Kurdistan


Rcgwa


 Firvt Amendment Agreement C’hia Surkh











1. DEFINITIONS AND INTERPRETATION


1.1 Unless otherwise defined herein |including ihe recitals) capitalised term' have the


meanings ascribed lo them in the Contract (before amendment by this Agieenvcntl


As used in this Agreement:


"Agreement" is defined in the preamble.


"Agreement Date" is defined in the preamble.


"Contract" is defined in Recital (A).


Tor lies" is defined in the preamble.


fiend" is defined in ihe preamble.


Cos eminent" is defined in the preamble.


Parly" and "Parties" are defined in the preamble.


I’etnll" is defined in the preamble.


"Third Part) " is defined in Clause 4 2.


1.2 The descripcisc headings in this Agreement are for coosenicnce only, do nor


eonsiituie a pan of this Agreement, and do not affect the conunxtioo or


interpretaiiiM) of this Agreement. A reference to a -Clause" is a reference lo a clause


of this Agreement.








2. AMENDMENTS TO CONTRACT


2.1 The Contract is amended as provided in this Clause 2.


2.2 The recitals are amended.


(a) by adding a new paragraph

“(D) This Contract was amended pursuant to the first Amendment


Agreement between the Parties dated I August 2010.';


(bl by renumbering the existing paragraph TBT:


(c> by renumbering the existing paragraph (F.) IF)", and


id) by renumbering the existing paragraph (I I "((«)".








:


 IIIvt Amendment Agreement Chin Surkh





2J In Aniclc l .l. the definitions of "CONTRACTOR" and C ONTRACTOR Entity”


ate deleted in their entirety and restated as follows:


"CONTKAC 11 )R means, individually and jointly, each ( ontr.u'tor Entity.


CON I K AC I OR Intity means each of Gcnci, Forbes and Pctoil and their respective


permitted assignees pursuant to Article 39. A holder of the Government Interest is


not a CONTRACTOR Entity. At any time when there is only one entity


constituting the CONTRACTOR, any reference to "the entities constituting the


CON IRACTOR" or the "CONTRACTOR Entities" or similar reference, shall be


deemed to mean "the entity constituting the CON I R \C TOR As of the Effective


Date. Gcnel. lorbcs and Pctoil. as CONTRACTOR Entities, each own an undivided


interest in tli« Petroleum Operations in respect of the entire Contract Area:





Crenel 20%


lorbc* 40%


Pctoil 20%“





2.4 New definitions arc added in Article l.l. in the appiopriiitc alphabetical order, as


follows:


"Annual Reconciliation Statement is defined in Article 32.6.2(c).


Capacity Building Account means a segregated bank account »ith a reputable bank


in the name of. and mamtained by. the GOVERNMC.NT. the sole purpose of which


1% to support and finance certain mfrastrueiure and capacity building projects to h:


identified b> the GOVt RWIFN f ta as sole discretion in the Kurdrstan Region.


Capacity Building Pay meat mean.


(a) m respect of a trend Interest Holder, the obligation of the Crenel Interest


Holder to pay an amount espial u. the Crenel Capacity Building Value.


(hi in irspevt of a Forbes Inkiest Holder, the obligation of the Forbes Interest


Holder to pay an amount espial u. the Fotbcs Capacity Budding Value: and


(c» m respect of a Pctoil Interest Holder. the obligation of the Pctoil Interest


Holder to pay an amount espial to the Pctod C apaerty Building Value.


Capacity Building Payment Instalments means each obligaikn of a Charged Interest


Holder to pay an amotml equal to the C apwty Buikhng Value attributed to such


Charged lmercst Holder m provided by Article 32fc


Capacity Building Value mean* the Crenel Capacity Building Value, fotbcs


Capacity Building Value or the Pctoil C apacity Building Value


Charged Interest means all or any part of the participating interests hereunder


deemed held by Crenel. Forbes and Pctoil » of the Effective (kale


< harpd uirrm Holder meats a C O' IH \( IOK Inoiy .find to the am « »


*c holder of i( barged Interest A,o(lkl flee live Date. (kocL Forte and Petud


•n the only Charged Inierai Holders


< barged lilmtl Holden Monthly Statement n defined in Article 32.b-2(a).


(kwentmcrrt.Cicncl. Forbes and Petoil dated I August 2010.


I orbet Capacity Building Value meant, in respect of any period of determination:


for each Charged Interest Holder of all or pan of the participating in terras held by


Forbes, an amount in Dollar* equal to the value, established in accordance with


Ankle 27. of forty per cent 140°.I of the Profit Petroleum attributed to such Charged


Interest Holder pursuant to this ( on tract as at any time and period of detennnution.


Forbes means a company established and existing under the laws ol Barbados,


whose registered office is at Suite 203 I.nuriston House. IH) Box 1132. Collymotv


Rock. St. Michael. Baibudo* HII I 1000. an nlliliate of ForbcK .V Manhattan


(Barbados* Inc., a company existing under the laws of Ifcubados. whose registered


olTicc is at Suite 203 Laurision House. IH) Box 1132. ( ollymore R«>ck. St. Michael.


Blibidos BB 11000.


I orbes Interest means the forty per tent (40“..) panicipatmg interest in the Contract


held by Forbes as of the Effective Dak.


Forbes lolcresi IMkr mem* a COMRUlOi Fonts if and to the extern Im


CON TRACTOR Fntity which ■» a holder of the Forbes lateral, those


COMRAirOR Entities A» of the Effective Dale. Forbes is the sole Forbes


Interest Holder.





IV Valley. AngtalU.British VmImbaIVI IIP











Article 27. of thirty per cent

Interest Holder pursuant to this ( onliact ua at any time and period of determination.





(ienel I me Id meunv the twenty per cent (20M purticipuling interest in the < unlniu


licit! by (icttel as of the Effective Dale





(lend Interest Holder means a CON I RACTOR Entity if and to the extent ii is n


holder of the Genel Interest, and ul any time wlien there is more dun one


CONTRACTOR Entity which is a holder of the Genel Interest, feat








*


 I iivi Amendment Agreement Chiu Surkh








CON IRACTOR Entities A* of the Effective Dale. Gend is the sole Geod k*aat


Holder





I.OW or Expense Ls defined in Article 32.6.8(c).


IVloll mean- Petoil Petroleum and Petroleum Products Intcmalinnal Exploration and


Producliofl Inc., a company established and existing under the laws of Turkey, whose


registered office is at Filistin C'addesi No: 16. Ci t) P.. 06700. Ankara. Tuitey.





Petoil < apacitv Budding Value means. in respect of any petard of detennkuxion


fix each Charged Interest Holder of all or pan of the panwipaimg merest* held by


Petoil. an amount in Dollars cs(ua1 *> the salue. established in accordance with


Article 27. of forty per cent l-W.l of foe Profit Petroleum attnhuted to such Charged


Interest Holder pursuant to thn Contact as at any time and penod of drtenimnaikn.





Petoil Interest means the twenty pet cent (20%) participating inteicsl in the Contract


held by Petoil as of the Effective Date.


Petoil Interest Holder means a CONTRACTOR Entity it ami to the extent it is a


holder of the Petoil Interest, and at any time when there is mote than one


CONTRACTOR Entity wlneh is a holder of the Petoil Interest, those


CONTRACTOR Entities. As of the Effective Date. Petoil is the sole Petoil Interest


Holder.





Rights Sale means a sale, assignment, or other disposal of the GOVERN'IEM s


rights to i excise Capacity Building Pay mem lnstalmmts from a Charged Interest


Holder, whether fora lumpsum payment or m mstalmem payments, and whether foe


purchaser assumes ail paynw* risk and all nsk as to foe amore* of Capacity Buildmg


Payment Instalments, or ceherwne "





2i The first paragraph of Ankle 42 is dekred in its entirety and restated


The Public C'ompuiy will not have any liability to foe CONTRACTOR to coomfcuie


«s Goscmmeni Interest share of all Petroleum Costs. Petroleum Costs are the


excluuse obligation of the CONTRACTOR Entities in axwdanc* with each


CONTRACTOR Entity's respective pankipating micrests in the Cooaaet. Each


CONTRACTOR Ereity is entitled (through the CONTR V< TORi to recover all such


Petroleum Costs in accordance w oh .Ankle 2$. The Public Company shall contribute


ks share of Production Bonuses attributable to foe Goscmmeni Interest and payable


pursuant to Ankles 32.7 through 32.11."


2.6 In .Ankle 16.14. after foe words in the first sentence IK- GOA ERNMKNT and” foe


following is inserted:". subject to Ankles *2 6.6(a) and (hi.


2.7 In Article 26.9. the following sentence is added to the end of the Article


“Notwithstanding the other provision* of this Article 26.9. where a Charged Interest


Holder is in breach of any of its obligations in respect of the payment of Capacity








5


 Buildmg Payment Instalments under Anick 32.6. the CON ERNMKNT -ill have the


righu set forth in Ankles 32 fob through 326 K "





2Jt .Ankles 27.1 and 272 and Paragrafris 7 aid K arc amended by adding. after the word


"Quarter" ia each usance is each Ankle and Paragraph. the word, and Mcmifc". and


in Paragraph 7.2. the words Twenty -one (21 >* .« deleted and replaced by "ten (101".


2.9 Ankle 27.4 is deleted and restated in its entirely:


*'By the tenth (I0"l day of each Month, the COM MAC I OK shall provide a statement


to the GOVERNMENT show ing the CONTRACTOR'S calculations of the value of


Petroleum produced and sold from the Contract Area for the previous Month Such


statement shall itKlude the following information:


(a) quantities of Crude Oil sold by the CONTRACTOR Entities during the


preceding Month constituting Amt's Length Sales together with


corresponding sale pr ices:


(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)


above, together with sale prices applied duting sikIi Month:


(c) inventory in storage belonging so the CONTRACTOR Entities at the


beginning and at the end of the Month, and


qiuMt.es of Natural Gat sold by the CONTRACTOR Emilies and the


GOVERNMENT together with ale prices resitted


Concurrently with the delivery of the monthly tutcmcl. the CONTRACTOR shall


deliver the Charged Imereti Holders Monthly Statement to the GOVERNMENT as


provided ui Article 32.6 2(a)"


LM In .Anisic 29 I. after the words dull be m Dollar, and dull', the following w.mls are


added


“except at pros tded u> the next sentence and Anklet 32.6.10 tfirough 32.6 12.";


and the following sentence it added at the end of Ancle 29 I:


The right of offset provided in this Article 29.1 vs41 not apply m respect of the


obligjUon ofaOurged Imereti Holder h. nuke Capacity Building Payments at further


provided m Angles 32 6 10 through 326.12"


211 In Article 32. Articles 32 I to 32 5 are deleted in then entirety and restated


-Forbes latrrrtt Holder


321 The GOVERNMENT required Forbes . as a condition of entering into the








><


 Fin! Amendment








Contract. io pay 10 the GOVERNMENT a signature boom of five hundred


thousand Dollars (US S500.(K)0) (‘Signature Bonus') and the


GOVERNMENT confirms timely receipt of the payment.





.'2.2 I he (GOVERNMENT required Forbes . as a condition of entering into the


Contract, to pay to the GOVERNMENT a capacity building boons of


nineteen million five hundred thousand Dollars (US SI9.500.000►


( '< .parity Building Bonus - First Tranche'*) and the GO\ ERVMENT


eonfinns timely receipt of the payment.


32.3 The l orhes Interest Holder shall pay to the GOVERNMENT a capacity


building bonus of twenty-five million Dollais (US S25.000.000) <~Capacit>


Building Bonus Second Tranche") in five (5) monthly instalments of


five million Dollars (US S5.000.000l each. The Forbes Interest Holder shall


pay the first instalment on or before 15 August 2010, the second instalment


oil or before I September 2010; the third instalment on «< before 1 October


2010. the Ibuilli instalment on or before I November 2010. and the fifth


instalment on or before I December 2010.


32.3.1 The Gt>\ I R.NMEN I dull iransfer the Signature Roans and the Opacity


Building Bonus into the fund established by the Martyrs. Anfaliscd and


Victims of Genocide l aw of the Kurdistan Region Iraq (Law So 37 of


2007).


h'HI IlMvrvM Holder





32.4 The I'ctoil Interest Holder shall not be liable to pay to the


GOVERNMENT any pan of the Signature Bcnus or Capacity Building


Bonus, or for any other payment in the nature of the Signature Bonus or


Capacity Building Bonus, except a> provided in Article 32.6.











32.5 The (iend Interest Holder shall not be liable to pay to the


GOVERNMENT any put of the Signature Batus or Capacity Budding


Bonus, or for any other payment in the nature of the Signature Bonus or


Capacity Building Bonus, except as provided in Article 32 6 ~


2.13 la Article 32. a new Article 32.6 is added as follows.











32.6 l ad. ( barged Interest Holder is bound by the pros isions of this Article

















-


 l ira Amendment Agreement Chia Surkh








32.6.1 The obligations of a CONTRACTOR Entity, to the extent it is a


Charged Interest Holder, as set foith in this Article 32.6. attach to.


and may not be severed from, the Charged Interest.


32.6.2 In respect of the Capacity Building Payment Instalments:


(a) on or before the tenth <10") day of each Month, in the


Development Period, the CONTRACTOR shall provide to


the GOVERNMENT, together with the monthly production


statement prepared by the CONTRACTOR in accordance


with Article 27.4 and Paragraph 6.1. and the monthly valuation


statement in accordance with Article 25 and Paragraph 7.1. a


statement (the "Charged Interest Holders Monthly


Statement") setting out the CONTRACTOR’S calculation of


the Capacity Building Value attributable to each Charged


Interest Holder for tlie ptveeding Month. In each Charged


Interest Holders Monthly Statement, the CONTRACTOR


shall detail each item taken into account in making its


calculation of the amounts due from each Charged Interest


Holder, the quantities of Pro lit Petroleum produced dining the


Month covered by such Charged Interest Holders Monthly


Statement, the volumes of such production sold, the Capacity


Building Value attributed to such sales, and the Capacity


Building Payment Instalments required to be paid with respect


thereto by each Charged Interest Holder:


(b) on the same date on which the CONTRACTOR provides the


Charged Interest Holdeis Monthly Statement to the


GOVERNMENT in accordance with Article 32.6.2(a). each


Charged Interest Holder shall pay (except as provided in the


next sentence) the Capacity Building Payment Instalment as


shown as owed by such Charged Interest Holder in the


Charged Interest Holders Monthly Statement. If:


(1) a Charged Interest Holder has sold its Profit Petroleum to


(i) the GOVERNMENT or a Public Company (or a


company or an entity owned and controlled, directly or


indirectly, by a Public Company or the GOVERNMENT).


(ii) tlfc State Oil Marketing Organisation (SOMO) or any


entity owned and controlled by the Government of Iraq: and


if


(2) any such counterparty as identified in (I) has not paid the


Charged Interest Holder for the Petroleum lifted by such


entity, then:


 First Amendment Agreement Chia Surkh








(3) the Charged Interest Holder is only obligated to pay the


Capacity Building Payment when, if, and to the extent the


Charged Interest Holder has received payment by such


counterparty.


The preceding sentence docs not apply w ith respect to. and


to the extent of sales of a Charged Interest Holder’s Profit


Petroleum to any other counterparties.


(cl within thirty (30) calendar days following the date on which


the CONTRACTOR delivered the Final End-of-Ycar


Statement to the GOVERNMENT for each Calendar Year in


accordance with Article 26.13 and Paragraph 10. and based on


the infoimation in such Final End-of-Ycar Statement, the


CONTRACTOR shall provide to the GOVERNMENT, in


respect of each Charged Interest Holder, a written


reconciliation of the aggregate amount of the Capacity


Building Value and the aggregate payments of the Capacity


Building Payment Instalments during such Calendar Year


period (the "Annual Reconciliation Statement ’):


(d) if the results of an Annual Reconciliation Statement show that


a Charged Interest Holder has. in the aggregate over the


Calendar Year period covered by live Annual Reconciliation


Statement, made Capacity Building Payment Instalments in an


amount less than the aggregate Capacity Building Value


attributed to such Charged Interest Holder during such


Calendar Year period, such Changed Interest Holder shall pay


(subject to the same exception as provided in the second and


third sentences of Article 32.6.2(b)) the amount of the


underpayment as shown in the Annual Reconciliation


Statement w ithin thirty (30) calendar days follow ing the same


date the CONTRACTOR delivered the Annual Reconciliation


Statement to the GOVERNMENT:


(e) if the results of an Annual Reconciliation Statement show that


a Charged Interest Holder has. in the aggregate over the


Calendar Year period covered by live Annual Reconciliation


Statement, made Capacity Building Payment Instalments in


excess of the Capacity Building Value attributed to it during


such Calendar Year period, and if and to the extent the


GOVERNMENT has agreed with the CONTRACTOR and


the affected Charged Interest Holder in respect of the amount


of such overpayment, such Chaiged 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


 I "M Amendment Agreement Chin Surkh








Building Payment Instalments. In no event will n l lunged


Interest Holder be entitled to deduel more than fifteen per cent




following payment* of Capacity Building Payment


Instalments. The right of set-off aguinal Capacity Building


Payment Instalments will l»c a Charged Interest Holder’s only


remedy in respect of any overpayment, and the


GOVERNMENT will have no obligation to make any


reimbursement ot other compensating payments to the


Charged Interest Holder.


tO if a Charged Interest Holder fails to pay all or patt of a


Capacity Building Payment when due. the Charged Interest


Holder shall pay interest on the unpaid amount at an annual


rate of LIBOR plus two per cent (2%) compounded monthly


fiom and including tire date the payment was due to. but not


including the dale paid: and


(g) if any Capacity Building Payment is due to be paid to the


GOVERNMENT on a day that is cither not a banking day in


either the place where the Capacity Building Account is


maintained, ot the location of live financial institution through


which a Charged Interest Holder will make such payment, then


the Capacity Building Payment will he due oa the next


following hanking day A -funking day" n a day (other than a


Saturday. Sunday, or puhbc holiday) oa which hanks are open


for general business in ihc specified locations


Lm?atHi acc^b;


32.6.3 Ihc GOVERNMENT slr.dl


(a) establish and maintain the < lipacity Building Account: and


4b) deposit all Capacity Building Payments received by the


GOVERNMENT into live ( apacity Building Account





KMHs Salt


32.6.4 Pic GOVERNMENT may enter into a Rights Sale without the


consent of the CONTRAC TOR or any CONTRACTOR Entity.


UaWii'v


32.6.5 I .ich Charged Interest Holder is separately liable (and not jointly


and severally liable with any other Charged Interest Holder) to the


GOVERNMENT for its obligations, duties and liabilities under








10


 l ira Amendment Agreement Chia Surkh








this Article 32.6. A CONTRACTOR Emily that is not a Charged


Interest Holder will have no liability to the GOVERNMENT for


any claim by the GOVERNMENT arising out of or related to the


breach of any Charged Interest Holder's obligations under this


Article 32.6.


Breach; Indemnity


32.6.6 (a) If a Charged Interest Holder fails to pay a Capacity Building


Payment in full when due. the GOVERNMENT will,


notwithstanding any other provision of this Contiact. any


lifting agreement, any sales or marketing agreement, or any


other agreement, automatically be entitled on not less than


sixty (60) days prior notice to the defaulting Charged Interest


Holder and the CONTRACTOR in the case of the first


default, and not less than thirty (30) days in the case of any


subsequent default, to;


(1) in the ease of a defaulting Genel Interest Holder.


(i) lift, at the Delivery Point or at such other point as the


GOVERNMENT may decide, up to thirty per cent


(30%) of such defaulting Genel Interest Holder’s


Profit Petroleum; and


(ii) continue to lift up to thirty per cent (30%) of such


defaulting Genel Interest Holder's Profit Petroleum


for the remainder of the Dev elopment Period.


(2) in the case of a defaulting Forbes Interest Holder;


(i) lift, at the Delivery Point or at such other point as the


GOVERNMENT may decide, up to forty per cent


(40%) of such defaulting Forbes Interest Holdei’s


Pm fit Petroleum; and


(ii) continue to lift up to forty per cent (40%) of such


defaulting Fotbes Interest Holdet’s Profit Petroleum


foi the remainder of the Development Period, and


(3) in the ease of a defaulting Petoil Interest Holder;


(i) lift, at the Delivery Point or at such other point as the


GOVERNMENT may decide, up to forty per cent


(40%) of such defaulting Petoil Interest Holder's


Profit Petroleum; and











II


 Him Amendment Agrecim-ni I liia Suilh








(ii> continue to lilt up to fairy per cent (40".I of *u«li


defaulting IVn.il Interest Holder’s Profit Petroleum


for the remainder of the Development Period


(hi A defaulting l lunged Inleiwl Holder will have a 'ingle etnv


penod of lliiity (.III| days only in respect of its fust delimit. If


the defaulting ( lunged I mere-l Holder pays the defaulted


Cupacity Building Payments in lull plus interest in accordance


with .Article 32.6 2fft in such thirty (30| day period, the


GOVERNMENT dull not exercise ns lifting right, uihler tin.


Article 32.6.6 in l»sp*M of Mich defaulting Charged Interest


Holder. In the ease of any subsequent default, the


GOVERNMENT nc> exercise it. right to lift whether .* me


the defaulting Charged Interest Holder cures its default m the


thirty <30l day notice penod


J’6.7 The liftng rights of the MIX ERNMENT pursuant to An.lc


32 6 6 arc exercisable by way of set-oil .nW first resort to legal


process. and without any liability or claims of tire defaulting


( barged Interest Holder, the CONTRACTOR, the Operator, or


any other Person, and regardless of any provisions of any lifting


agreement m provision of a joint updating agreement or any other


agreement to which the COM U ACTOK or a defaulting t lunged


I mere si Holder is a party The CONTRACT OH dull ensure that


all agreements in respect of the lifting or sale of Petroleum reflect


the GO\ ERNMENT a pr..«ny rights as set forth m Article 32.6.6


and An Article 316.7.


32 6.1 (a) A defaulting Charged Interest Holder dull indemnify the


GOVERNMENT from any Loss or Expense las defined in


Article 32.6.8(c). below l llut may in any way arise I’rom the


cxcrcbe by the GO\ ERNMENT of it. right, m reaped of


such defaulting Charged Imereti Holder under Arnclo 3266


and 32.6.7.


(hi lhc GOVERNMENT will retain conuol over Uk- defence of.


and any resolution or settlement relating lo. such Loss or


wnh the GOVERNMENT and provide reasonable molan


m defending any claim, against the GOV ERNMENT


(c) ‘T oss or Expense" menus any liability, loss, claim, settlement


payment, cost and expense, interest, award, judgment.


law. any court filing tee. com cost, arbitration tee or cost.








12


 HiuSdih








witness lee. and each other fee and cost of investigating and


defending 01 asserting a claim for indemnification, including


attorneys' fees, other professionals’ fees, and disbursements,


but does not include consequential damages. A claim set forth


in a notice from the GOVERNMENT to a defaulting Charged


Interest Holder will be conclusively deemed a I-oss or Expense


if the Charged Interest Holder fails to dispute


GOVERNMENT'S liability by the end of a thirty

period following tlw effective date of the notice from the


GOVERNMENT. The Charged Interest Holder shall


promptly pay the deemed Loss or Expense on denund.


32.6.9 The GOVERNMENT"* rights undeT Articles 32.66 through


3261 .re not cuhtuvc and are -about prej-bee to the


GOVERNMENI'. tenmnata* rights undo Article 45





32.6.10 Except as provided in Article 32.6.2

provision in this Contract to the contrary, each Charged Interest


Holder shall pay all Capacity Building Payment* without (and free


and clear of any deduction for) set-off or counterclaim.


32.6 II Each Obliged lute tea HoUlei acknowledge* and accepts that a


fundamental principle of tin. Article 32.6 is that such Charged


Interest Holder mud pay the ( apacity Budding Payment, owed by


under this .Article 32.6 only md except as provided in Article


32 6.2(e). each Charged Interest Holder hereby waives any light to


raise by way of set off or invoke as a defence to its obligations to


pay Capacity Building Payments pursuant to this Article 32.6.


whether in law or equity, any failure by the GO\ ERN.MEN I or


any CONTRACTOR I ntily to pay amounts due and owing under


the Contract or any alleged cLiun that such Charged Interest Holder


may have again* the GOVERNMENT. Operator, any ocher


COX TRACTOR Entity or any other Poison, whether such claim


an** under or relates ui this Contract or otherwise





32.6.12 Each Charged Intact Holder shall make Capacity Building


Payments to the GOVE RNMENI by wire transfer of immediately


available funds in Dollar, in accordance with wire instructions


provided by the GOV I RN VIENT The nuking of any paynamt.


acccpoace or aar of any payments by the GOV ERNMEYT. does


not impair the right, of such C harged Interest Holder or the


GOVERNMENT under Article IS. Any dispute between the








13


 Flirt Amendment Agreement Chia Suikh








GOVERNMENT and a Charged Interest Holder in respect of the


calculation of each of the Capacity Building Value and the


Capacity Building Payment due with respect thereto, is subject to


Article 15.9.


Vssjgnrornt. Reversion





32.6.13 (a) If a Charged Interest Holder assigns and novates all or any part


of its Charged Interest, the assignee will be a 1 hatged Interest


Holder to the extent of such assignment and nos atm


tb) If (i) a Charged Imeicst HoMci withdruwx a* a


CONTRACTOR Entity, or the GOVERNMENT


terminates a Charged Interest Holder n» u CONTRACTOR


Entity; and if in the cases of clause* (i) or (ii) nil or part of the


Charged Interest of the Charged Interest Holder is either


assigned and novated oi reverts to the remaining


CONTRACTOR Entities, ns pmvided in Article *15. then, in


either such ease, such assignee or each remaining


CONTRACTOR Entity, as the case may he. will be a


Charged Interest Holder to the extent of such assignment and


novation or reversion, as applicable, provided that the


withdrawing or terminating Charged Interest Holder will be


solely liable for any unpaid Capacity Building Payments


attributable to n» Charged Interest prior to the date of


withdrawal or termination.





2.14 In Article 32:





the existing Article 32.6 ■« renumbered “32.7";


the existing Article 32.7 is renumbered “32.8“;


the existing Article 32* i» renumbered -32.9“;







word bonus", the words "or payment" are added, and


the existing Article 32.10 i. renumbered "32.11", and in that .Article.







(ii) the words “or by hanker s draft and on receipt thereof the


GOVERNMENT shall forthwith issue a written receipt to the


CONTRACTOR duly executed by the Minister of Natural


Resources of the GOV ERNMENI or such other officer of the


GOVERNMENT who shall be duly auhorised to issue such








I-I


 First Amendment Agreement Chiu Surkh








receipt under Kurdistan Region Law" are deleted.





2.15 Article 39.2 is deleted and restated:


“Except as provided in Article 32.6. each CON IKACTOR Entity dull have the right


to sell, assign, transfer or otherw ise dispose of ull or part of its rights and interests under


tins Contract to any third party (not being an Affiliated Company or another


CONTRACTOR Entity) with the prior consent of the GOVERNMENT and each


otlicr CONTRACTOR Entity (if any), which consent shall not be unreasonably


delayed or withheld Any CON I R ACTOR Entity proposing to sell, assign, transfer or


otherwise dispose of all or part of Us rights and interests under this Contract to any such


third party shall request such consent in writing, which request shall be accompanied


by reasonable ev idence of the technical and financial capability of the proposed third


party assignee.'*


2.16 In Article 41. the following is added at the cod of the Article


“Notwithstanding the foregoing, th.% Article 41 will no* apply lo the


GOVERNMENT in respect of any claim or proceeding arismg .nit of or related to


the exercise of rights by the GO\ ERNMEVT as set forth in Articles 32 A 6 through


32.6.9. in respect of which the GO\ ERNMEVT expressly resenes all sovereign


LIT In Article 42 I. the following sentence u added at the end of the first sentence


"This Article 42.1 does not apply to any Dispute arising out of. of relating to. the


exercise of rights by the GOVERNMENT as set forth in Article 32.6.6. which


Disputes shall, except only as provided in Article 32.6.12. be subject to the exclusive


jurisdiction of the courts of the Kuidistan Region located in Erbil


2.IK In Article 4S.6. after "31." is added “32.6.".


2.19 The following further amendments are nude:


(a) in the definition of “Production Bonus" in Article 1.1. the words “32.6 or


32.7" are replaced with "32.7 or 32.8";


(b) III Paragraph 3.1.9. the words "with the exception of Taxes described in


Aiticlc 3I.2| and bonus payments" are deleted and replaced with “with the


exception of Taxes described in Article 31.2. bonus payments. Capacity


Building Payments, and any other payments";


(c) in Paragraphs 4.4 and 13.3.2(h). after the word “bonuses" in each instance,


".Capacity Building Payments, or other payments" is added.


lilt Paragraph 4.1 is deleted and reslated: “Taxes described m Article 31.2 and


specifically excepting, without limitation, taxes and duties that may be








15


 lira Amendment Aei ecincnt ('Ilia Suikh








included in the costs of material ai>d equipment purchased for the Petroleum


Operations:”


(e) in Article 10.2(e). the word "thirteen” is deleted and replaced with "twenty".


<0 the heading for Article 32 is deleted and restated:


'ARTICLE 32 - BONUSES; CAPACITY Bl II.DING PAYMENTS'


(g) in Article 39.6. the follow ing is added at the end of the sentence following the


words "Article 4":


"and Article 32.6.":


(h) in Articles 4.2 and 4.3. the word "other" is deleted in each instance; and


(i) in Article 33.9. “. provided that where the GOVERN MIN I is participating in


its capacity as a CONTRAC TOR Entity pursuant to Article 4. it shall be


liable for its share of Petroleum Costs'* is deleted.


REPRESENTATIONS


3.1 Gcnel. Forbes and Petoil each foi itself make the follow ing rc prescMations.


3.1.1 its entry into and performance of dun Agreement ha\ c been authorised b> all


3.1 J thu Agreement constitutes a valid, legal, and binding agreement of it


3.1 J it ha« received all auhotisation» and consents required under the law under


which it u organised that arc or will he ncevsvary for the entry into and


performance by a. and the validity and enforceability against it. of this


Agreement.


3.M except as presided in the next sentence, there is no law or agreement to


which it is a party that conflicts with or prevents entry into, delivery, and


performance by h of. or call. -Ho question the validity, legality and


enforceability against it of. this Agreement. No representation is made in


respect of the laws of the Kurdistan Region or Iraq;


3.1.5 it >s not a party to any adramrstraiive ce judicial pmc ceding. Imaation. or


arbitration that could affect the validity or cnforwsbdity of this Agreement a>


•o H. and


neither u not any of it. Affiliates has made, offered, ce authorised (and has not


3.1.6


agreed to male and does not expect will he madek with respect to the miners


which «e the subject of this Agreement or the Contract, any payment, girt,


promise or .-her advantage, whether directly or through any other Person, to


 Him Amendment Agrccmew ('lint Suikh











or fot the use or benefit of any public official (»«•.. any person holding a


Icgidativc. administrative of ymbeial office, including any person cn«|»W.>cd


by or acting on behalf of the (Rnvmmcni) or any political p*m or political


pony official or Candida* fot oflkv. where such payment, gin. promise ot


advantage violates (i) the law. or the Kurdistan Region or of Iraq, (ii) the law.


of the place of incorporation or it. principal place of business, or (iii) the


principles described in the Convention on Combating Bribery of Foreign


Public Officials in International Business Transactions, signal in Paris on 17


December 1997, which entered into force on 15 l ehnutty 1999. and the


Convention's Commentaries. No p.iii of its participating intcivst under


(including any profits it may derive in icspect of) the Contract is held (or to be


held putsuant to this Agreement I oi payable to. directly or indirectly, to <>t for


the benefit (directly or indirectly) of uny public official or any political patty


or political patty official or candidate for office of the Kurdistan Region or


Iraq











4. (.I'FRM PROVISIONS





4.1 Aitides 36 Vnformaiion and ConfldenttuUty). 39 {Assignment and Change ,-l


Coninil), 41 (IFiiAvr of Sow reign Immunity), 42.1 {SeguOai.oa Medial** a»J


ArbUrution) and 44 (Noth «v) of the (oatr* t .lull apply to this Agreement.


4.2 This .Agreement doe* no! create any tight under the Contracts (Right* of Third





Parties) Act 1999 that is enforceable by any Person who 1* no! a party (a I bird


Party The Parties may rescind or vary the terms of this Agreement w about notice


to or the consent of any Thud Party






































4.4 l-*ch Party shall timely exercise all endeavors 10 take, or


cause to be taken, all








43





ordy by a Party ;








17


 i hu \uiih








exercising any light or Miwh. or in requiring the of any condition. under





this Agreement by 111'mly. and no act, omission 01 cihiihc ol dealing between any of the


Panic*, will operate a« a waiver or estoppel of any tight, tenuity, or condition, A waiver


made in writing on one occasion will be effective only mi that instance and only lor the


puipoae stated. A waiver once given is not to he Cisuliurd a. a waiver on any future


occasion. No waiver ti amendment in icm»cs1 of lint Agreement will convtitute a





** The p*t*» «•> rue* this Agreement * lour couacrpartv each of winch


CMwiituus an original. and all of which, coilcci.sety, conunuie onK one agwonci


The signature* of all of the Partws need wol appeal .« the same rn---rrpT. and


deUserN »V an • \cv tiled counterpart signature pam by tin simile ot ckcuonic scan is


as effective as executing and delivering tins Agreement m the picscnce of the other


Parties. This Agreement is effective upon ds livery of one executed counterpart from


each Party to the other Parties. In pros my this AgreviiHiit. a Parly must produce or


account only for the executed counterpart of (lie Paity to he charged.


4.7 If this Agreement i» reasonably proven to have been obtained in violation of Kurdistan


Region Law or the law* of Iraq concerning cnmiplioo. thi> Agreement shall be deemed


void iib Inllla


4.K This Agreement (and any IMMb«OMwrtHri obligaiiaiv arising ou of or in connect ion


w*h k) is governed by I nghvh law
























































IX


 First Amendment Agreement - Chla Surtdi








I or and on behairof Forbes & Manhattan (Kurdistan) Inc.:


Signature.





Title Jb/TCC^-OT.....


Name.... Aw-M£b.....


For and on behalf of Crenel two International Unhed:


Stgnatutc.....................................


Title:..........................................


Name...........................................


Fot and on bvhnll of Petoll Petroleum and Petroleum Product* International Isploratlon and


Production Inc.:





Signature.....................................


Title:..........................................


Name ..........................................


lot and on behalf of the Kurdistan U.glniiul Government of Iraq:





Prime Minister


Kurdistan Regional Government


On bclialf of I he Regional Council for (Ik Oil and


Oai Affairs of the Kurdistan Region Iraq





Signature:....................... .


H.irtiuin Salih





Minister of Natural Resource*


Kurdistan Regional Government


On behalf of ll*c MiniMiy of Natural


Resources in live Kurdistan Region








Slgnaiuni .......


Ashti Kawrntni








(Slgnatuir page to the ( hi* Surkh First Amendment ABreement.|


 First «-rm:cicr' A* cOWMt - CWH











forand on F«»ulf o/Fnrt** A Manbadiin (Kar Jinan) lix.:





Slwiutun. »••••»* ••


VHlr...........................


Nnnxt.........................





Fur ml on bobulfofXfoael Lorry laccrmiMMal United:





Mfpaarr.


T»i :


Hum: ...





For ml on hcf i of P(M Peaoljam aw« l'«rnlrum Prod am Tnteroaiitfnl Erptoralioa iwd


Pro«liaclli>n lact


fllgraiiiir .............................


Till*. .....................................«■'





Natiw ..........................................


For and on Mldlt ot (be Kardistan RcgraaaKtomnmcnt of Iraq:





Mm MtHirtr


K m*.lit an Prrir*« GeunMME





Cn FrMf rt |) *cgfon>l Cotr^! far Uk C>.«


Gil A flair; »T«M Kajd.iiat Regw.i - b*l








Signature.......................


Sal*





Wir-a« of'iaiwal RowurMi





Kadhoi femoral Orm-rwcrt


Cab* aKoftfas Matmy efNaaaral














Atfri imwl











|S>|na






















1*


 liret Amcndmcni Agreement Chia Suifch














For and on behalf of Forbes A Manhattan (Kurdistan) Inc.:


Signature.....................................





Title:..........................................


Name:..........................................


For and on behalf of Gend Energy International limited:





Signature.....................................





Title:..........................................


Name:..........................................





I or aim) on behalf of Petoil Petroleum and Petroleum Products International Exploration and


Production Inc.:




















For and on behalf of the Kurdistan Regional Government of lra(|:


Prime Minister


Kurdistan Kcgimiiil Government





On behalf of the Regional Council for (he Oil and


Gas Allaire of the Kurdistan Region - Iraq

















Minister of Natural Resources


Kurdistan Regional Government


On behalf of the Ministry of Natural


Resources in the Kurdistan Region























|Sq>naturr page to Ike Chi* SnrWh First Amendment Agreement-!























19


 First Amendment Agreement Chia Suridi














tor ami on behalf of Forbes A Manhattan (Kurdistan) Inc.:





Signature.....................................

















I or and on behalf of Gcnel F.nergy International limited:














Name: ....








For and on behalf ot I'ctoll Petroleum and Petroleum Products International Kxploration and


Production Inc.:








Signature....


Title:.........


Name: .......








For and on behalf ot the Kurdistan Regional Government of Iraq:


Prime Minister





Kurdistan Regional Government





On behalf of the Regional Council lot the Oil and


On* AITnirs of lire Kurdistan Region Iraq




















Minister of Natural Resources





Kurdistan Region*! Government


On behalf of the Ministry of Natural


Resources m the Kwdrsian Region

















/Will It a* rami