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FIRST AMENDMENT AGREEMENT
(elating to
■Ike amendments to tl>c Production Sharing Contract relating to lire Mala Omar Block
between
THE KURDISTAN REGIONAL GOVERNMENT OF IRAQ
and
OMV PETROLEUM EXPLORATION GmbH
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION...................................................................2
2. VOIDING OF TPI NOMINATION LETTER................................................................2
3. AMENDMENTS TO CONTRACT...............................................................................3
4. OMV PAYMENTS......................................................................................................17
5. REPRESENTATIONS.................................................................................................18
6. GENERAL PROVISIONS...........................................................................................19
7. STATUS OF AGREEMENT; COMPLETION............................................................20
ANNEX I Completion
ANNEX 2 Form of Certificate of Completion
FIRST AMENDMENT AGREEMENT
This Ji'iivutai (the Agreement"' is entered imo as of I August 2
between:
111 TIIK MKDISTAN REGIONAL GOVERNMENT OK IRAQ I (he Government fc and
<2i OMV PETROLEUM EXPLORATION GmbH, a limited liability company established
and existing under the law* of AuHlriu. whose registered office is at I'lubrcnnstrassc ft - 8.
1020 Vienna. Austria roMV)
leach a Turly" and collectively, the "Purlins "i
KK( ITALS
2007 in respect of the XlaU Oman Block in Ac Kurdistan Region of Imq (the Contract »
TV Partic* wish to ptoeuic a 100'* participating irucrest in die Contra.t ft* OMV. and OMV
To confirm a lOO** p^tK.paiae interest fcr OMV. die Parties most first agree that the
Gos era meat's previous exercise of the Option of Thud Part) Part*.p*ioa las defined in die
Contract l pwsuani to a letter to the Contra** dated II lot) .the I PI NomtnntM
Letter . in lav.* of KEPCO. a Poblie Company ias mck term is defined m d- Contract k. m
Thud Party Pa.Ik.pea is void. TV Parties arc cash willing to agree to deem IV TPI
Nomination I etui and the Goverament's exercise ol the Option of Thud Party Paiticipui«o
to he void mid oi no li'i'.il effect and that the Option of I lilnl I'uily Pniticipnlmn hns expired.
(Di The Pintles wish to mi mid the Contract to confirm OMV as a Coniraetm Entity with u lUO'E
paiticipullhg interest (subject to the Government's lights to exercise’ the Government
(merest) ..nd to obligate OMV' and future holders ol all oi any participating interest (except in
respect ol the Government Intcrcu) to pay Capacity Building Payments (as defined in the
use solely to .uppoit and finance mfrasirtictuie and capacity building projects in the
Kurdistan Regain
rim Amradmrnl A vnrmcr/i .tfata Omar
1. DKHMTIONS ANI) IN1T.KPKKI ATION
l.l Unices otherwise defined herein (including ihe recitals) capitalised terra* have ihc
meanings ascribed to them in the Contract (before amendment by this Agreement).
Av oved in llnv Agreement:
Agreement' i* defined in ihe preamble.
'Agreement Dale" iv defined in the preamble.
"f ’lntai is defined in Chute 2-4.
< VimpWlInn Ihile i. defined in CI«M 7.3.
Conlrnct" redefined in Recital (A).
(imerniiiiiil ’ is defined in the preamble
OMV" iv doiined in tin preamble.
Third Party" iv donned in Cl.uve 6.2.
I PI Nomltuitfon letter ' i» defined in Recital .
1.2 Descriptive headinjtv in thiv Ajjieenvni ate for convenience only, do not eonmltutc a
pan of this Agreement. aivJ do not affect the construction or intcrpictalion of thiv
Agreement. A reference to a •’Clause" iv a reference to a clauve of thiv Agreement.
A reference to a "patlicgvjiing intcrcsT mean* an undivided inicirvi in die Contract
Anx k « I of the C
2. WIIIMNt. t>» 111 NOMINVTION LETTER
2.1 The Parties agree that the TP1 Sotmnjuon 1-eOer and thr manmatam of a third
Part) ParlKipam av vet out in the TPI Nomination l etter shall he deemed fie all
purposes to he withdrawn and void ab initio and without any clfect under llie
<<~ui.m or othetwee.
2.2 The Government shall cause the Puhlic Company nnmiuatcd as Thud Parly
Pmlicipanl ncvei to make any Claim against OMV andiig out <>f ot relating to the
pin potted nomination ol such Public Company as a Third Paity Participant pursuant
to iIh' TPI Nomination l etter.
2-1 Submit to clause 2.2. OMV waives, and releases die Pub Ik Company limn any
CUuiw that OMV may have against the Government and the Public Company
TPI
2
1A For purposes of ihis Clause 2. Claim means any UahUy. knv claun.
counterclaim. l>cn. charge, cost and expose. interest. award, judgment. damages,
diiiumnkm in value. fees at odicr viurge.
3. AMENDMENTS TO C ONTRACT
3.1 As of the Compleiion Date, ihe Comracl is amended as provided in this Clause 3.
3.2 Recital (C> is amended by adding at the end of the paragraph before the hcnikolon
uiul the Comract was amended pursuant to the Finn AnK-ndment Agrecnicnt
between the Panics dated I August 2010"
3.3 In Article 1.1. the delinition of "CONTRACTOR” is lummloti hy tlelcling the
words "or Thinl Patty Participant".
3.4 In Article l.l. the definition of “CONTRACTOR Emily" is tuneiulcd by adding the
following:
'At such time as live Government may exercise live Option to I'aiticipuic. a holder of
the Government Interest is not a CONTRACTOR Entity. At any lime, when there
is only one entity constituting the CONTRACTOR, any reference made in this
Contract to “the entities constnutuig die CONTRACTOR" or the
CONTRACTOR Entities" or similar reference, shall he deemed t,. ».« The
Ml Its s.«'T.tLt, the CONTRACTOR. OMV *, the CONTRACTOR I .any as
at the Effective Date, owns an undisutd one hundred per seal t 100* i participating
-teresi m thr Contract and •> the fN»c4eum Operands m respect oC the enure
Contract Are*"
Annual Reconciliation Statement !s defined in Article 32.8.2(0.
CapncHv Building Account means a segregated hard, account with a re|i«itahlc
mieinatonal hank in the name of. aad nu.nta.ned by. the GOVERNMENT, the
**dc pupmc «i which is to support and finance certain infrastructure and capacity
building protests to he nkMified by the GOVERNMENT m Us sole diw.ct.n in
the Kurdisun Reg**
C npnrtls Building Bonus .s defined in Article 321
Capacity HuiMing Payment - FYrwi 1 ranch. means six million Dollars
(USfeOOajOOO).
(■parity Building Payments Means m respect of cn.ii Oxugtsl Inierrsl Holder. the
Capacity lliaklmg Payment - Fust Tranche and the (afu.ity Building Payment -
Second Tranche Instalments
3
i tm .Kmmdmens Agreement Mala (*mv
< apndly Budding Payments - Sreuod Iramh. Imttlmrw* ax**, the tNfin
of ah Charged loiercsx Holder k> pay an amurt to he Caplin Buikhn*
Valias* attributed to such Charged Imereti Holder pursuant to AHicte 318.
( aparil) Buildinj Vatae means. m respect of any permd of determiaarkn: for cah
Charged Imetesi Holder, an amxir* in Dollars espial to he value. established in
accordance with Article 27. o! forty-five per cent 1 45 'i> of he Charged Interest
Holder's Profit Petroleum.
< httrgrd Interest means all or any pad of the participating interest hereunder deemed
held hy OMV * of ihe Efleciivc Date.
( liurgrd Interest Holder means a CONI RAC TOR Inliiy to the extent it is the
holder ol a Charged Interest. As of the Ulestive Duic. OMV is the only Charged
Interest Holder.
(bulged Interest Holders Monthly Statement .s defined in Article 32.8.2(a).
Estimated Total Capacity Building Value is defined 111 Article 32.8.14(el
First Amendment Agreement means the First Amendment Agreement between the
Government and OMV dated I August 2010.
Loss or Expense is defined in Article 32.8.8(c).
Option to Participate is defined in Article 4.1.
Rights Snle is defined in Article 32.8.14taL
Signature Bonus is defined in Altaic 311
3.6 la Art vie 1.1 <4 ho Contract, ttac definitions of "Option of Thud Pam R*ikipition~.
Third Pans Interest" and Third Party PartvqxaM" are deleted
3.7 la the heading u» Article 4 ol the Contract and 1a the cotresfoodmg heading in the
TaNc afCanKOta the words "Opium of Government Putvipal** and Uk Third Pans
PartK ipjtKm " are deleted and replaced v» ith "Option of GmrnunriM Pamcipatioo".
3JI Article 4J|c) is deleted in its ranrety. and restated.
TO The P«Nk Conrans ssiU not Base aa> liability to the CONTRAC TOR to
contribute Us Gn crane nt Inkiest share of all IMmleum Costs. A1
Petroleum Costs are the exclusive obligation of rhe ID.VTRVC TOR
Entities in uccordunce with rath CONTRACTOR Entity's respective
participating interests in ihc Contract, liach CONTRACTOR I unity will
be entitled (through the CONTRACTOR 1 to recover all such Pctroleuin
Costs in aeeordance with Article 25. flic Public Company shall cofltiibuie
its share of Production Bonuses unrihuluhlc to ilw Goveinment Interest ami
payable pumuant to Articles 32 3 through 32.7."
3.9 Art teles 4.8 to Ankles 4.12 of the Contract are deleted.
3.10 Annie 4.13 is deleted and restated ns the new Article 4.8:
4
I'l'll Amm/uirill Ax/ermrni Main Omar
II the GOVERNMENT e.vciciwH the Option of Govvinmenl Participation. the
Government Interest shall be assigned undci this Artak I to the Public Company by
the CONTRACTOR I .mines pt\» rata to tlwit lespjcllvc paiticiputmg interests tiiuler
dm Contract."
3.11 Ankle 4.14 i' renumbered a» Article 4.9 and:
(a) a new clause (a) is udded:
"The CONTRACTOR linlilies shall, within a reasonable period of time,
negotiate in good faith and enter into .1 Joint Operating Agreement and shall,
during the period until the CONTRACTOR Entities enter into a Joint
Operating Agiecntent. comply with this Article 1.9 as if it is a provision of
this Contract:";
existing clauses
(c| in the new clause (cl. the words ‘nr Third Party Interest" are deleted.
3.12 In Ankle 16.14. after the winds in the find sentence "The GOVERNMENT and' thr
following is Insened:", subject to Articles 32.8.6(a) and (by."
3.13 In Article 26.9 the following sentence is added 10 the end of th. Artak
"Notwithstanding lit othrr pr.nis.ms of thr, Attack 26.9. where the
GOVERNMENT determines, as provided a Ankk 32X6. Hut a Chared lama
Holder is in breach ..l any of its aUigauins m respect of the payment of its Capacity
Buildme Payment* - Secood Traachc Instalments under Ankk 32.6 the
GOVERNMENT will tuve the rights set forth m Artaks 32.8.6 through 32* 8
3.14 Ankles 27.1 ord 27.2 and Paragraphs 7. *. and 9 ore amended by adJrng. after the
word -Quarter" in each in*urac m each Ankk and Paragraph, the words and
Month": and in Paragraph 7.2. the words -twenty sme (21)" are deleted and replaced
by-ientlOr.
3.15 Ankk 27.4 is deleted and restated in n« entirely
-By the loath (Iff’) day of each Month, the CONTRACTOR shill provide a
stokowa 10 the GOVERNMENT shim mg the CONTRACTOR . cahuhikm* of
the value of Petroleum produced oral sold from the Contrast Area for thr previous
Month Such statement shall include die following infurnutron
(a) quantities of Crude Od sold by thr CONTRACTOR Entities during
the preceding Month ctminmg -Aim's Length Saks together wah
corresponding sale pners.
tb) quantities of Crude Oil mid by the CONTRACTOR Entities during
the preceding Month tut do not fad m the carescry referred to m
poragtaph (a) ah we. together with ink prices applkd during wish
5
Firu Amendment Agreement Multi I>mt t
(c) inventory in storage belonging to the CONTRACTOR Entities .it
the beginning anil at the end of the Month: and
id) quantities of Natural Gas sold by the CONTRACTOR Entities and
the GOVERNMENT together with sale prices realised.
CniKUirently with the delivery of the monthly statement, the CONTRACTOR shall
deliver the Charged Interest Holden Monthly Statement to the GOVERN MEN! .0
provided in Article 32.8.2(a):’
3.16 In Article 291. after the word, "shall be in Dollars and shall", the following words an*
added:
“except as provided in tin: next sentence and Articles 32.8.10 through 32.8.12.”;
iuid the following sentence is .sided at the end of Article 29.1:
'The right of iiHnci provided in this Article 29.1 will not apply in respect of the
obligation 11I a Charged Interest Holder to make its Capacity Building Payments -
Second Tranche Instalments as further provided in Articles 32.8.10 through 32.8.12."
A17 A new Article 32.8 is added:
Capacity lliilldlng Payments
*2.8 Each Charged Interest I (older is hound by the provisions of this Article 32.8.
The obligations of .1 CONTRACTOR Emily, to the extent it b a Charged
Interest Holder, as set forth in tin* Article 325. and 10. and nu> ran be
severed from, as Charged Interest Only OMV (for so long as OMV 1* a
Charged lnieresi HoUeri will have any rights under Article 325.14
325.1 Each Charged kaerrsi Holder dull pay 10 the GOVERNMENT
ll) the Cajxj.it> Building Payment - First Trara.hr 00
denund and
12» from First frodnetion and tor the duration of the
remainder of tie Development Period, the Crpal)
Building Payments - Second Tranche InstalnviHs
attributed 10 the Charged Interest Holder in accordarac
with this Article 318.
32 8 2 In respect of the Cajunry Building Payment - Second Trarahe
la) On or before the tenth (Hf day of euh Month in the
Development Period. the CONTRACTOR shall provide 10 the
GOVERNMENT. together with the auxnhly production
statement prepared by the CONTRACTOR in axerdarer
with Article 27.4 and the ninthly valuation statement in
accordance with Article 25_2ia> and Paragrjj* 7.1. a statement
(the Charged Interest Holders Monthly Statementsetting
out the CONTRACTOR'S calculation of the Cajuity
6
First Amendment Agreement Mata Onuir
Building Valu? attributable 10 each Charged Inicicst Holder for
ihc preceding Momh. 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 Profit
Petroleum produced during the Month covered by such
Charged Interest Holders Monthly Statement, the volumes of
such production and Profit Petroleum sold, the Capacity
Building Value attributed to such sales, and tl*r Capacity
Building Payments - Second Tranche Instalment required to be
paid with respect thereto by each Charged Interest Holder.
tb> On the same date on which the CONTRACTOR provides the
Chaiged Inteiest Holders Monthly Statement to the
GOVERNMENT in accordance with Article 32.8.2(a). each
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 Charged
Interest Holder in the Chaiged Interest Holders Monthly
Statement. If:
Ilia Charged Interest Holder has sold any amount of its Profit
Petroleum to (i) the GOVERNMENT or a Public
Company (or a company or an entity ow ned and controlled,
directly at indirectly, by a Public Company or the
GOVERNMENT), (ii) the State Oil Marketing
Organisation (SOMO) or any entity owned and controlled
by the Government of Iraq, or (iii| any oilier entity as
directed by the entities detailed in (i) and (ii) above: and if
|2) any such counterparty as identified in Article 318.2(bKD
has not paid the Chaiged Interest Holder for the Profit
Petroleum lifted by such entity , then:
(3) il«? Charged Interest Holder will only be liable to pay its
Capacity Building Payments - Second Tranche Instalments
when and to tl»? extent such Charged Inteiest Holder has
received payment by such counterparty.
The preceding sentence din's not apply w ith respect to. arxl
to the extent of. sales of Charged Interest Holder's Profit
Petroleum to any other counterparties.
(c) Within thirty (30) calendar days following the date on which
the CONTRACTOR delivered the Final End-of-Ycar
Statement to live 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
7
First Amendment Agreement Main Onuir
CONTRACTOR shall provide 10 ihe GOVERNMENT, in
respect of each Charged Interest Holder, a written
reconciliation of the aggregate amount of its Capacity Building
Value and the aggregate payments of Capacity Building
Pay ments - Second Tranche Instalments during such Calendar
Year period (the Annual Reconciliation Statement”).
id) If the results of an Annual Reconciliation Statement show that
any Charged Interest Holder has. in lire aggregate over the
Calendar Year period coveted by the Annual Reconciliation
Statement, made Capacity Building Payments - Second
Tranche Instalments in an amount less than the aggregate
Capacity Building Value attributed to such Charged Interest
Holder during such Calendar Year period, such Charged
Interest Holder shall pay (subject to the same exception as
provided in the second and third sentences of Article 32.8.2(b))
the amount of the underpayment as shown in the Annual
Reconciliation Statement within thirty (30) calendar days
following tie dare the CONTRACTOR delivered the Annual
Reconciliation Statement to the GOVERNMENT.
te) 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 tie Annual Reconciliation
Statement, made Capacity Building Payments - Second
Tranche 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 relevant
Charged Interest Holder in respect of the amount of such
oveipayment. 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 be entitled to deduct more than fifteen per cent (15*It >
of the amount otherwise payable from the next following
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 oveipayment.
and the GOVERNMENT w ill 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 part of its
Capacity Building Payments - Second Tranche Instalments
when due in accoidance with Article 32.8. the Charged Interest
S
Itiii Amendment Agreement Muht (hmir
Holder shall pay interest on the unpaid amount at an anmi.il
rate of I.IIIOK plus two per cent (2%) compounded monthly
from ami including tlu- date the payment was due to. hut not
including, the dale puid.
(g) If any Capacity Building Payments - Second Tranche
Instalment* nio due to K' puid to the GOVERNMENT on a
day that is cither not a bunking day in either Hie place " here
the Capacity Building Account i' maintained, or die locution of
the financial institution through which a Charged Inteiesi
Holder will make such pnyiik-nU then the Capacity Building
Payments Second Tranche Instalments will he due on the
next following honking day A ' hanking day" is u «Liy (other
than a Satuiday, Sunduy. or public holiday) tin which hunks arc
open for general business in the specified location*.
Capacity Building Account
.'2.8.3 The GOVERNMENT ahull:
(a) establish ami maintain the ( apaiTty Building Account:
(lit deposit all Capacity Building Payments land the proceeds from
any Rights Sale or any financing secured by Capacity Building
Payments) icecived hy Ihc GOVERNMENT into the CapaSt)
Building Account, and
(C) f« only -> k*tg a* OMV is a Charged Intelru Holder,
anoually prosaic a written report to OMV of the appfacatmi of
the proceeds of the Capacity Building Payment* (including the
applmtion of proceeds from Rights Sales l in sufficient tkrud
to pcmia OMV to identify the prefect* to which die
GOVERNMENT h*. appteS the Capacfcy Building
Payment*
325.4 Ufonratam pros-td by the GOVERNMENT to OMV pursuant to
Article 3253(c) dull be deemed to be in the puN* dmui fc*
puipncs of Article 36.7(a).
Separate liability
3255 Each Charged Interest Holder is *ep*aiely luhle land me jomtly
are! socially bable with any outer Charged Interest Holderi to the
GOVERNMENT fc* is obligation*. duties and lubditv* under
this Article 325. A CONTRACTOR Entity (tut is nut a Cturged
Interest Holder will hive no liability to the (iOVKRNMEST l«*
any claim by the GOVERNMENT arising .«.! of or related to the
breach of any Charged Interest Holder's .MigaUm* unkr dus
Article 325.
9
UrU Amendment A element Mala Omar
: I
32.8.6 la) If a Charged Interest lh*h-r faiK to pay its Cap*:it> Building
Payments - Sninl liunchc InvtalnK'nts in full when due
pursuant to Article 32.8. the GOVERNMENT will,
notwithstanding any other provision of this Contract, any
lifting agreement, any Miles or matketing agreement. ur any
other agreement. autooutkally tv entitled, on rot lev. than
sixty (601 days |*>x mm lo the defaulting Charged Interest
Holder and die CONTRACTOR in the case of the fust
default, and in less than thirty l30l days in the ease of any
■ la
(I)
GOVERN MIM id fatty-th e pa cert
i4»m4 A HaUer’, Prufil
«2> continue m> hi lift up to forty-five per cent (45ft) of the
defaulting Charged Interest Holder’s Profit Petroleum 6*
the remainder ol the Dev elopment Period.
period of thirty ( Ml) days only in respect of its fust delimit. II
the defaulting I hinged Interest Holdci pays the defaulted
Capacity Bu.ld.Bg Paynvnt. Ses.md Tranche Inaalmeoi. ia
full plus uMCfest in »v.«darKe with Artxie 32X2(0 a such
thoty (.30) - day penod. the GOVERNMENT shiU om
Art* lr 32*h - respect of
Ib the core of aoy
default the GO31M0T Bay exerewe «s
nght lo lid the defaulting Oiarged Interest Holder’s Profit
Petroleum whether or not Ilk- defaulting Charged Interest
Holder eu.rs .is default within the thirty (301 - day nobce
period
32J8.7 Hie liliing rights of the GOVERNMENT pursuant to Article
323 6 are exeivisable Ivy way of «*l olV without first resort to legal
process, and without any UaNlity or cLun.s of the defaulting
Charged Interest HiOder. the CONTRACTOR the Ojenoc. or
any ocher Pets.*, and regardless >4 my provisions of any
agreement <« provision of a yarnt ofvraiing agreement o* any
agreement «v which the COST1MHW « • defaulting Charged
Interest lloldct .. a patty. The CONTRACTOR shall ensure that
all agiccmcnt* in resjvct ol the lifting or sale of Peuoleum reflect
the GOVERNMENT, pn.nl> nghts a* set Ireth in .Article 32 8 6
and Ih.s Article 32X7.
10
l ira Ame/xdmenl Agreement Omir
32.8.8 (a) A defaulting Charged Interest Holder skill indemnify the
GOVERNMENT from any Loss Expense (as defined in
Article 32.8.8(e). below) that may in any way arise from the
exercise h> the GOVERNMENT of its tights in respect of
such defaulting Charged Interest Holder under Articles 32.8.6
and 32.8.7.
(hi The GOVERNMENT will retain control over the defence of.
and any resolution or settlement relating to such Loss or
Expense incurred puisuant to Article 32.8.8(a). A defaulting
Charged Interest Holder shall cooperate with the
GOVERNMENT and provide reasonable assistance in
defending any claims against the GOVERNMENT arising out
of such default of Article 32.8 by the defaulting Charged
Interest Holder.
(c) "Loss or Expense" means any liability, loss, claim, settlement
payment, cost and expense, interest, award, judgment,
damages, fees or other charge and. to the extent permitted by
applicable law. any eourt filing fee. court cost, arbitration fee
or cast, witness fee. and each other fee and cost of investigating
and defending or asserting a elaim for indemnification,
including reasonable attorneys’ fees, other professionals' fees,
and disbursements: but does not melurfc consequential losses,
diminution in value, indirect loss or loss of profit or revenue,
punitive damages, or penalties in respect of any (it projects
being financed cm- constructed by live Government with
Capacity Building Payments or financed or constructed by the
GOVERNMENT with proceeds derived front the exercise of
(he GOVERNMENT'S right of lifting under Article 32.8.6 or
(ii) financings of the Government dependent on cash flows
from Capacity Building Payments or dependent on cash flows
from the exercise of the GOVERNMENT’S right of lifting.
(dt A claim set forth in a notice from the GOVERNMENT to a
defaulting Charged Interest Holder will be conclusively
deemed a Loss or Expense if the Charged Interest Holder fails
to dispute the GOVERNMENT’S liability by the end of a
thirty (30) - day period following receipt of the notice from the
GOVERNMENT. The Charged Interest Hoklei shall
promptly pay the deemed Loss or Expense on demand.
328.9 The GOVERNMENTS rights under Articles 32.8.6 through 32.8.8
are not exclusive and are without prejudice to the
GOVERNMENT’S termination lights undei Article 45.
Payments: No Set-off or Deduction
11
/ Vt*I AmnulmnH Asteemem Main Omir
32.8.10 Except as provided m Article 32.8.2
provision in this Cumrart lo the cunUary. «*h Cka»l lnVacsi
IfaUer shall pay lit Capxay Bj.kJ.-T* hjnoh -Second Tranche
318.11 E*h Charged lamest Holder aclao* ledges and accept. that a
fumfanvaui pnntiple at that Ancle 32.8 .» ttui *uch Charged
Lucres! Holder must p-»> ihe Capacity Budding Payments doc and
payable pursuant in Bus Article 318. Accordingly. in respect of lit
obligations under (hi. Article 32.8 only and excc[* at prosided m
Article 32JL2ICL each f'turgcd Imereti H<4drr hereto wanes any
nchi io fine by way of tei off or instAr at a defence to a»
obligations to pay it. < upadly Building Payments Second Tranche
Instalment* pursuant to Uu. Article 32.8. wfcrhoi m lav. nr equity,
any failure by ibe GOVERNMENT « any CONTRACTOR
Emily io pay jimvuMt due and owing under the Contract or any
alleged claim tlui such Charged Imereti HoUei may ha.e agamti
the C.O\RRNMENT. Operator. other CONTRACTOR I niity. or
any
Contract or otherwise.
32.8.12 Each Chaigcd Intciesl Holder shall make its Cnpucity Building
Payments -Second Tranche Instalments to the Government by »ui
transfer of immeduuh available funds m OdUt m axonlaoe
w*h wue uraiuet-mt prattled by the GOVERNMENT. Tbe
«*«* of any payments by a Ourgrd lamest H.ddm under
Article 318. or the acvcptamv cr use of any piysmsgs by the
GOVERNMENT, dues no uapta* the ngt*. of sad. Charged
lumen H.*ta or *r GOVERNMENT nmk* Arta-le 15. Any
dnfmae between tin GOVERMENT ml a Charged Imereti
HsAlet m respect of the cji.uLiti.rn of cath of nt Capacity Building
Value nr its Capacity Building Payments Second Tranche
Instalments due with n-spcct thereto is suby.it in Article 15.9.
Assignment. Kevcrslm
32.8.13 (U) II it Charged Iniercsl lioltkr assigns all or any part ol its
Cltarged Imeiest. tin; assignee will he a Cluiged Interest
Holder to the extern of tnch assignment and nstti.
lb) If a Ourped Imereti Holder withdraws » a
CONTRACTOR Emny. or mi tte GOVERNMENT
KtiMUKv a Charged IntorcM Holder as a CONTRACTOR
Firu Amrndmcm Agnwirwi ,\M
assigned and novated
COSIKMTOR Emilies a* prosukd in Artuk 45. then. is
»I)MH\(TOR Entity. a* the cm nay he. *dl he a
or irtciwn. as applicable. prosuVd itui the withdras. me c*
terminating Charged Interest Holder will ho vilely liable for
.my* iinpuid Capacily Building I'nymenis Suomi Irnnche
litsluiiiK'iils attributable toils ('killed Interest prim U> the date
id withdrawal or termination
328.14 Tkr M>\»R>MEVT a*ec* with OMY ths the
CiOV HINM1 NT »iH och enter nu a Right* Sale u *s«*d**.«
with lias Article 328.14. Osh O.MV. anJ only for so kng a* * is a
Our pod Interest HoUer. has aay lights under this Article 328.14.
Tlus Article 32.8.14 does not create any rights uiulet the Contrnets
(Rights of llmd Parties) Act I9W til any utlici Cliarged htteresl
Holder. CON I KACTOR Entity, oi otltei Peivon (whether ot not a
parly lo this Contract). and OMV and the GOVERNMENT may
agree lo any waiver in respect of tins Article 32 8.14 without the
consent id. or notice la any othei Charged Interest Holder.
« ONTRVCTOR lout), or uix-r tVrsoa.
la) For p«pne« otf this Ancle 328.14. K*ht* Val. m»i
sale and ass^rwm id the GOVERNMENT. tight* to
tvreisc the Cap»cit> Building Payments - .Second Tranche
lasialments m respect of the OMV Intereu from OMV.
whether such sale includes any CafUity Building Payments -
Sect*! Tranche Instalment* due from anmki OurgesJ
Imeieci Holder, and whether fir a lump sum payment oi m
instalment paymentv. where the pureluser assumes all
payment n*k and all risk as lo the amount of Capacity
Building Payments - Second Tranche iHhlmnh without
regard lo any guarantee* provided by the GOVERNMENT
or other credit enhancements.
11*1 WlKn the GOVERNMENT and a propnsed purchaser have
negotiated the liit.il lei ms of a Rights Sale, the
GOVERNMENT shall
Charged Interest Holder, of like GOVERNMENT’S intention
to effect a Rights Sale, and in) provide OMV with a copy of
CiOV ERWD.VT wdl consider any
pro*idr to tie <*>V ERNMEXT m respect id the (wopmed
13
First Amendment Agreement Maht Onuir
purchasers. The preceding sentence is a mailer of courtesy 10
OMV and not an agreement, duty, estoppel, or other
obligation of the GOVERNMENT and creates no liability
for breach or obligation to respond.
tc) Subject to the provisions of Article 32.8.14 and for so long as
it 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. if. within
thirty (30> days of receipt of the GOVERNMENT'S notice
ai*l draft documents puisuant to Article 32.8.14(b), OMV
notifies the GOVERNMENT that OMV ii) accepts all of the
terms of the proposed Rights Sale without any reservations or
conditions, (ii) is exercising its rights under this Article
32.8.14. and (iiii represents it will |A> close the proposed
Rights Sale within thirty (30) days of such notice and (B) fui*l
the Rights Sale in accordance with the terms set forth in the
draft, agreed, final documents provided to OMV by the
GOVERNMENT puisuant to Article 32.8.14(b). OMV may
only exercise this right with respect 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 dies not close the acquisition w ithin thirty (30) days
of a notice as contemplated by Article 32.8.14(c). the
GOVERNMENT may close lit Rights Sale with the
proposed purchaser under terms and conditions no more
favourable to the proposed purchaser than throe set forth in
the GOVERNMENTS notice and docuntnts 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 willing to d> so on the same terms
ai*l conditions, the GOVERNMENT will have all rights ai*l
remedies against OMV as are available under law.
(c) Hie GOVERNMENT shall not enter into more than three (3)
Rights Sales (a Rights Sale to a CONTRACTOR Entity will
not count against such limitation), and no Rights Sale may he
in an amount of less than one-third < 1/3) of the tlxm Estimated
Total Capacity Building Value at tlx: time of the
GOVERNMENT’S notice puisuant to Clause 32.8.14(h).
Nothing in this Article 32.8.14 prevents the
GOVERNMENT from directly ottering a Rights Sale to
OMV. For purposes of this Clause 32.8.14(e). "Estimated
Total Capacity Building Value" means the
GOV ERNMENT'S reasonable estimate of the present value
14
First Amendment Agreement Main Onuir
of the expected stream of Capacity Building Payments -
Second Tranclv Values, based on the expected production
profile, and Petroleum Costs, aiki using a discount factor (for
purposes of comparison only) of ten per cent < 10%).
(0 No pan of this Article 32-8.14 will apply to (or otherwise bar
or intpaii) a Rights Sale to a part of the GOVERNMENT, a
Public Company, or a pan of the Federal Government of the
Republic of Iraq (including tlxe Central Bank of Iraq), in each
case with respect to which the GOVERNMENT is
unrestricted by this Article 32.8.14.
ig) Nothing contained in this Article 32.8.14 will apply to (or
otherwise bar or impair I 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 tlv 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 dial! provide reports on tire use of the
proceeds of such financing airangenvnt to the Charged
Interest Holders in accordance w ith Article 32.8. 3
li) The rights of OMV under this Article 328.14 will
automatically expire and be void on the fifth (5°) anniseisary
of the 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
or related to OMV's breach of its obligations under Article
32.8.14(d) will not be impaired by this Article 32.8.14(i>.
(j) (I) The rights granted to OMV under this Article 32.8.14 are
exclusive and personal to OMV. OMV shall not assign all
or any pan of its rights under this Ankle 32.8.14. Any
purported assignntent will tv void and all rights of OMV
15
\nxk 31s. 14 »il
<’) ir OMV doses u Rights Sale with the GOVERNMENT.
OMV shall not u»m«u as rights under such Rights Sale
agreement without (lie prior consent of the
GOVERNMEN I (not in he unreasonably withheld or
dsliyed). Nothing In ihli Article 32MLI4j)(2) will limit
(or otlierwise birr m inipuir> OMV from transferring or
encumbering all nr any nl its rights u. receive die Capacity
llui Hi ug Payments Sc.snvl Tranche Instalments
pursuant to the Rights Sale u. a financial institution or
special purpose vehicle organised solely for the purpete of
security relating to finaike.
(3) In tire event of such assignment of right* under a Rights
Snk* agreement in hivaclt nf Aitlcle 32.8.l4(j)(2). the
GOVERNMENT may elect in laminate such Rights
Sale, free of any claim or liability nf OMV or such
assignee.
<4. OMV shall indemnify the (GOVERNMENT from any
Loss or Expense ta> defined in Article 32.8.840. above)
dui may in any way an«; (tom the exercise by dse
(GOVERNMENT at *» nghts mdtr tf-. Aroele
12A I4(jl The GO\ fRN'IEVT wil retain control over
the drfeixe of. arid any res.*jt»- or reManM reUiog lo.
such |j>s» <* Expense OMV shall cooperate with the
(GOVERNMENT and provide reasonable avvitiancc in
defending any chums against the GOVERNMENT. A
dan ret forth in a nrticc from the GOVERNMENT to
OMV shall he conclusively deemed a Loss if OMV faih lo
dispute the (GOMUAIINTv luMuy by die end of a
the GOVDDMDrr OMV sJofl pnnfds pay the
3.18 Article >91 is deleted and restated.
"Except» provided in Article 32.8. each CONTRACTOR Emil) shall fuse the right
to -Ml. assign, transfer or otherwise vUsptxvc of all oi |Wtt of its rights ami inteiest*
under this Contract to any third party Hint being an Affiliated Company nr another
CONTRAt TOR I ntity) with the prim cniiscm ol the (GOVERNMENT aid each
other CONTRACTOR Entity (if any), which consent shall isot he unreasonably
delayed or withheld Any CONTRACTOR I MMy proposing to scIL assign, translef
or otherwise dispose ,4 all or pan of its rights and interests under this Contract to any
such third pitty 'lull request such consent in wining, which request shall be
16
rim Amendment Agreement M,ih I>mi e
accompanied by reasonable evidence of ihc technical and financial capability of the
proposed thiid puny assignee."
3. IV III Ank le 39.5. ite word' "Ol (he(Iption of Third Party Participation" are deleted.
3.20 In Article 39.6. the following is added after "Article 4": 'and Article 32.8"
3.21 In Article 41. the following is added at the end of the Article:
Notwithstanding the foregoing, this Article 41 will not apply to the
(it INTERNMENT in respect of any claim or proceeding arising out of or related to the
exercise of rights by the GOVERNMENT xs set forth in Articles 32.8.6 Ihmugh
32.8.9. Ill respect of which lltc GOVERNMENT expressly reserves all sovereign
immunities"
3.22 In Article 42.1. tlx- following sentence is ailded at the end of the first sentence.
Ibis Article 42.1 docs not apply to any Dispute arising out of. or relating to. the
exercise of rights by the GOVERNMENT as set forth in Article 32.8.6. which
Disputes shall, except only u> provided in Article 32.8.12. he subject to the exclusive
jurisdiction of the courts ol the Kurdistan Region located in Erbil
3.23 In Article 45.6. after "31." is added "318".
3.24 The following conscqitfMial amendments ate made:
la) in Paiagr.iph t I V the words “writ the exception of Taxes described «i Article
312) and bonus paymmis" are dieted and replaced with with the c\cep
Taxes (described m Article 31.2). boou» pismentx. Capacity Building Payraentv
and a*>> <*hci payments".
tb) in Paragraph 4.4 arel 13JJ>thL after the w.*d t-mmes" in cadi insiancv.
Capacity Budding Payments, or other payments" is added.
tc) the heading ft* Article 32 is deleted and n-oatfed
ARIKI.I. 32 - BONUSES: CAPACITY BUILDING PAY MEATS . and
Id) in Article 39 A. the follow me 6 added at the end of the wincnce following the
weed* "Article 4":
-and Article 32.8."
4 OMY PAYMENTS
OMV dull pay the Gosetnnk.'iu ISS6.OCO.OCO on or Vfswc the Completion Date. TV
Gosemmet* shall deem its receipt cf such payment in full as (O the Capacity BorUrng Pa.ux.nl
- First Tranche under the Coarct a. anxmded by this Agreement, and Oil in full diwfurge of
OMV’s obligation w «h respect thereto.
17
Faa AmnOmnu Attttmrn itelaOimir
REPRESENTATIONS
5.1 OMV represents.
5.1.1 hs entry into and performance ««< ik* Agreement have kxn aitkmscd by all
ikvruan compmy action
5.1.2 This Agreement constitutes a valid, legal, and binding ngiwment of it.
5.1.3 It has received all authorisation* mid consents required under the law under
which it is organised that are «h will Ive necessary lot the entry into and
performance by it. ami live validity and enforceability against it. of ibis
Agreement.
5.1.4 Except as provided in the next sentence, there is no law ot agreement to
which it is a party that conflicts with, prevents entry into or perlntmancc hy it
of. .a calls into question Ik’ validity, legality and enforceability against it of.
this Agreement. No representation is made in respect of the laws of the
Kurdistan Region or Iraq.
5.1.5 It is not a puny to any administrative ot judicial proceeding, litigation, or
arbitration that could affect the validity or enforceability of this Agreement
as to it.
5.1.6 Neither it nor any of its Affiliates has made, offered, or authorised land has
not agreed to make and d«s not expect will be made), with respect to the
nuBcrs which arc the whjrct of this Agreement or the Contract, any
payment gilt, promise or .*he* advantage, whether directly or through any
.nher Person, to or for the u»e or benefit of any public nfficul tie- any
person t.Odmg a legislative. administrative or judicial office. including any
perwn employed by or acting oo befall of the Government) or any political
(Salty or political parts official or candidate for office, where such payment,
gift, pnwuse « advantage violate
Iraq, in die laws of the place of incorporation or its prmcqol place of
business, or lui) the principles desalted in the Coosentioa on Comhjnng
Bribers of kweign l*uhk Officials in Imcmanorul Business Transition*,
signed in Paris on 17 IVvember IW. which entered into farce <*) 15
February IW and the Censentwaik Commetearies. No pul of its
partK ipiung merest under I including any profits it may derive in irspevt of)
the Contract is held (or to he hrhJ pursuant to this .Agreement i or payable to.
directly or mduectly. to or for the benefit (directly or indirectlsi of any
public official or any political pony or political party official or candidate for
olftce of Ik* Kurdistan Begun a Iraq
5 J The Gov eminent representv
5.2.1 The eminent has not terminated tk* and taken no acta* to
c ause the Contract to he tcrimnalcd
5L4 The nn> «no and pciloomiKC ol this Agrvviismi by the Goscninvm has
Nvn auhmscd by the Regional Council lor the Oil and G* Affairs o! the
KuidtUan RrgK* - Iraq.
53 Each Party makes ihc representations aid wuiituitics set out in this Clause 5 on Ihc
Agreement I Kile and on ihc Completion Dole
6. GENERAL PROVLNK INS
6,1 Articles .'6 (Inlwmillm >oul Confidentiality), .19 (A wyiwirn/ and Change ufCim
41 (Wanvr if Stnnrlgn Immunity). 42.1 (Negotiation, Mediation and Arbiltutitui).
and 44 Itolk I of tl«c Contxaci apply lo this Ajiieem.nl.
63 Except in reqvci ol the Public Comp*)) undei Cbutf 23. this Agiecmeiu 4c> not
eatcrceMc by toy ftrvm »ho is m« j Paly (a Third Part)") The Panes may
Thud Pat)
63 This Ajiv.ii.nl constitutes ihc final. complete and cxchnise expression of die Panics'
agreement on Ihc maters conUrncd in ihi» Apecnsrnl. All prim and contemporaneous
ttegimaioits and agreements between il*e Panics on iIk nuneis contumed in this
Agreement ac expressly merged into and superseded h> thin AgivcntnL The
piusisitms of this Agreement may not h: explained, supplemented>■ .jualihed through
evidence ol trade usage or a prior souisc of dculutgs In cntrnng into this Agreement,
neither Pat) lus relied up-i at) siaemerit. rcprcscnutioo. warani) or agreement ol
(he other jxiii) except for iho>c expressly contained in this Agreement. There is no
6.4 Each Part) shall wady esm.sc *U reas.«aNc e*icasour» to lake. or cause hi he
ui.cn. ad retains ocecvcny « dcMtaMc to coiMmimae ami rate effective the
Iran suctions this Agreemcni contemplates.
63 The Panes may amend thi* Agisvim* only h> am agreement .4 ihc Panics that
identifies itself as an amendment to this Agreement. The Paines may waive any
19
First Amnulmria Agreement Mala Omar
provision mi this Agreement .ml) b> a writing executed by the Party jgj.au whom the
even.«iag am tight cm remedy. .* H> icsgimng the sarisfast** of am comfciuit. under
Plnticv. "ill operate a. .1 wnivci m estoppel of any right, remedy, or condition. A
wnner made in writing on one ounsion will lie effective only in that iiwtiukv .mil only
Ini the purpose stated. A waiver on,.1 given is not to be consum'd as a waivei on any
future occasion. No waivei or aineihlincnt in respect of this Agreement will constitute
11 waiver or amendment of any otlk i agreement between the Parties.
executing and delivering this Agievinci* in the presence til Ihc other Part) Hus
Agreement is effective upon delivery of one executed counicr|*.ut limn 11 Putty to the
oilier Party. In proving (Ills Agreement, a Pany must produce 01 nivnunt only fot tin
executed counterpart of the alitor Patty.
ft,7 If this Agreement is rcuvmuUy |uovvn to have been obtained by ()MV in violation of
Kurdistan Region I am im ihc laws of the Federal Repohlrc of h^j concerning
,<(rii(*Kffl. rhis Agreement shall be deemed void oft initio.
STAtl N Of AGMBIEVT; COMPLETION
7.1 Clauses I l/V/*ntrmu and lnttrprrbiU.*H. 5 lRr/»rvnhiXu«ii|. 6 (<«ntrul
Prmuumil and this Clause 7 come into force on the Agreement Dale.
7J The renvurung Clauses U dus Agreement o*rr dun iW hsied * Arnck 7.1 »dl
one u»> fame on the Caa^eum l to*
7J The mpmemenis tor coopfcmu arntMd Annex I. The < -wpMtam DM*
means an.1 will be the date set forth in a certificate <* completion signed by the
Minister of Natural Resources and OMV in the form and content as «ct forth in Annex
2.
7.4 II the Completion Date has not occurred by .'I August 2010. or hitch Inter date as the
<«)vetnment may set. tlven either tire Government or OMV niny teiinlnnic this
Agreement with immediate effect by notice Ur the other Puny. If OMV Ids made any
payment* pursuant to this Agreement prior to termination of this Aguvmrnl. the
recipient dull promptly return such payment to OMV.
7-' (to lerimiution of this Agreement under this AiIkIc 7. each Party will hr diwlurgcd
Irorn any further obligation, or liabilrt.es under thi. Aguvinert. euepl f.e a claim
First Amendment Agreement Maht Onuir
against any Party oilier than the Government arising from or related to
misrepresentation under Clause 5.
[Sixruiiure page follows. /
21
Fmt Agrn-i-HAOw
For aal on behalf of Ike K.rdbtaa Repom-I Go.trome.1 of Iraq:
Minister of Natural Resources
Kurdistan Rc*x«ul Government Kurdistan Regional Government
On behalf of the Regional Council On behalf of the Ministry of Natural
for the Oil und (iaa Affairs Resources In the Kurdistan Region
of the Kurdistan Region - Iraq
7^
Signature:..
Ashli llawrami
For and on hcluilf of OM V Petroleum Fiploration (imhll:
[Signaturepage to the tint Amendment Agreement - Uafi Omar\
22
First Agreement Mala
Ik* ami on behalf of the Kurdistan Regional Covermm ol of Iraq:
Prime Minister Minister of Natural Resources
Kurdistan Regional Government Kuidllian Regional Government
On behalf of the Regional Council On behalf of thr Ministry of Natural
for tlic Oil nnd Gas Affair* Resource* in the Kurdistan Region
of the Kurdistan Region - Ira«|
Signature:.............................. Signature:......
Barham Salih Ashti Hawrami
For and on behalf of OMV Petroleum I'splnration GmbH:
V
I.S'lgMii/nrr page to the First Amendment Agreement • Mala Omari
22
Fmtx lAtMmna- Mala Omul
Annex I
Completion
1. The completion requirements of the Govcuinvcnt tire
(j| receipt QfUSVi.OOO.OOO from OMV in discharge of the Cap*rity Building Payment litsl
Tranche;
(h) receipt of bounl resolutions and signing authorities from OMV in form and content
reasonably satisfactory In the Government; uml
(ei the Government is satisfied that each of the representations of OMV made to the
Government aie litre .iikI correct as of the Agiwnvnt Date and the Completion Date.
2. Tit completion requirements of OMV are:
lal OMV has received a full) executed copy of this Agreement;
il>) receipt of wire instructions from the Government; and
(cl < >MV is satisfied that each of the icpreseiUalinns of the Government made to OMV ate true
ai»l correct as of the Agreement Dale and live Completion Date.
23
Firn Amnubnem Agrrtmna Main Omar
COMPLETION DATE 2010
I iidi oT il»C undersigned Purtiev
1 ropii'WHlK ihiu the reprciciilalions of such Party were tme ii» ol lire Agroeiiioiil Duta uiul are Hue as
of die Completion Date:
2 ccitiflot I<| Ilk' other Parly that all of Ihc requirements for completion in rei|vic of itself in the
Agreement ha% been satisfied or waived, and
1 aj|iee» the Completion Dale diall he the date sei forth in this ivtlifk ale of completion a» the
full fun* and effect
24
Firu Amendment Agreement Main Omar
For ami on behalf of ON! V Petroleum Exploration GmbH:
Signature
Title:.....
Name:....
For and on behalf of the Kurdistan Regional Government of Iraq:
Minister of Natural Resources
Kurdistan Regional Government
On behalf of the Ministry of Natural
Resources in the Kurdistan Region
Signature:......
Ashti Haw rami
I Signature page to Certificate of Completion - Mala Omar]
25