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TECHNICAL SERVICES AGREEMENT
between
SHELL CAPITAL SERVICES LIMITED
and
CLOSED TYPE JSC KARAKUDUKMUNAY
Dated 8 February 2000
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White & Case
0-00 Xxxxxxxx
Xxxxxx
XX0X 0XX
TECHNICAL SERVICES AGREEMENT
THIS AGREEMENT made this 8th day of February, 2000 between:
1. SHELL CAPITAL SERVICES LIMITED, a limited liability company organised
and existing under the laws of England, having its registered office
at Xxxxx Xxxxxxx Xxxxxx, Xxxxxx XX0 0 XX, Xxxxxxx ("SHELL CAPITAL");
and
2. CLOSED TYPE JSC KARAKUDUKMUNAY, a joint-stock company organised under
the laws of the Republic of Kazakhstan having its registered office at
Microdistrict 0, Xxxxxxxx 00, Xxxxx, Xxxxxxxx of Kazakhstan (the
"COMPANY").
PREAMBLE:
(A) KazakOil, Korporatsiya Mangistau Terra International and Central
Asian Petroleum (Guernsey) Limited ("CAP(G)") entered into a Foundation
Agreement on June 12, 1997 pursuant to which CAP(G) agreed to make certain
investments in the Company for the purpose of funding the exploration,
development, production and sale of hydrocarbons from the Agreement Field
(as defined therein) (the "PROJECT").
(B) CAP(G)'s parent company, Chaparral Resources, Inc. ("CRI"), has
agreed certain funding arrangements with Shell Capital pursuant to which
Shell Capital will arrange for loans to be made available to CRI in an
aggregate principal amount not exceeding $24,000,000 for investment in the
Company through CAP(G).
(C) As one of the conditions to the availability of such loans, the
Company has agreed to accept, and cooperate with Shell Capital in, the
provision of the Services (as herein defined) to the Company and the
Project which Shell Capital may at its sole discretion provide to the
Company and the Project from time to time.
NOW THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS
1.1 The following terms shall have the meaning set out below, unless the
context otherwise requires:
"Agreement" means the subject agreement and any
agreement made by the parties in
furtherance thereof.
"Chaparral Group" means Chaparral Resources, Inc., Central
Asian Petroleum, Inc., Central Asian
Petroleum (Guernsey) Ltd., Road Runner
Services Company, Inc., Chaparral
Acquisition Corp. and the Company.
"Confidential Information" means any knowledge or data disclosed by
Shell Capital or any of its Consultants
to the Company under this Agreement
whether in writing, in drawings, in
computer programs or in any other way as
well as all data derived therefrom, to
the extent that at the time of such
disclosure the knowledge or data in
question is not:
(i) already in the unrestricted
possession of the Company, or
(ii) part of the public knowledge or
literature.
"Confidential Record" means any manual, report, letter, telex,
drawing, computer program or any other
material containing Confidential
Information.
"Conscious Recklessness" means wilful misconduct or wantonly
reckless disregard for avoidable and
harmful consequences which should have
been reasonably anticipated by a person
of ordinary prudence.
"Consultant" means any affiliate of Shell Capital or
any other person to whom Shell Capital
delegates the performance of any or all
of the Services to be provided to the
Company or the Project under this
Agreement from time to time.
"Dollar", "US$", "$" means the legal currency of the United
States of America.
"LIBOR" means
(i) the offered rate per annum for six-
month deposits in US Dollars which
appears on Telerate page 3750 (or
such other page as may replace that
page for the purpose of displaying
offered rates of lending banks for
London interbank deposits) at or
about 11:00 am London time, on the
first day on which the commercial
banking institutions in London,
England are open for business of
each month (other than a Saturday
or Sunday) ("Business Day"), or, if
more than one such rate appears on
such page on such day, the
arithmetic mean of such rates
(rounded upward to the nearest five
decimal places); or
(ii) if no such rate appears on Telerate
page 3750 (or any such replacement
page) the arithmetic mean (rounded
upward to the nearest five decimal
places) of the offered rates per
annum as quoted by the principal
London offices of Barclays Bank
PLC, Deutche Bank AG and Banque
Nationale de Paris (or their
successors in interest) at which
deposits in US Dollars for six
months are being offered by such
banks (or their successors in
interest) to prime banks in the
London interbank market at or about
11:00 am (London time) on the first
Business Day of each month; or
if none or only one of the banks
referred to in paragraph (ii) above are
offering rates for deposits on the terms
referred to in that paragraph, the rate
per annum quoted by such bank as the
Parties may select from time to time at
which deposits in US $ for six months
are being offered by such bank to prime
banks in the London Interbank market at
or about 11:00 am (London time) on the
first Business Day of each month.
"Loss or Damage" as used in Articles 8.3 and 8.5 and,
subject to the exclusion of any
consequential or indirect Loss or
Damage, as used in Article 8.2 and 8.6
means loss or damage of any nature
whatsoever, including injury or death
suffered by the Company, its personnel
or any other third party, howsoever
caused, including negligence on the part
of Shell Capital or any Consultant.
"Party" means any person party to this
Agreement.
"Project" has the meaning assigned to it in
Recital (A).
"Services" means such technical and other services
to the Company and the Project as Shell
Capital considers appropriate including
without limitation:
(i) the appraisal of development and
operational plans in connection
with the Project (this also
includes the study and preparation
of economic evaluations);
(ii) the study of the results of the
activities of the operator of the
Project and the furnishing of
appropriate comments and
recommendations;
(iii) the attendance at technical
and management committee meetings
of the Project (including the
preparation of these meetings);
(iv) information, computing and
laboratory services in relation to
the services described above;
(v) investigating the availability of,
and, if required, arranging for the
provision of, certain specialised
services by other parties; and
(vi) identification of suitable field
and management personnel from the
human resources database of Shell
Capital or any Consultant.
1.2 INTERPRETATION
Unless otherwise stated or unless the context otherwise requires, in
this Agreement:
(a) The titles or headings of the articles of this Agreement have
been included solely for ease of reference and shall not be
considered in the interpretation or construction of this
Agreement.
(b) References to the singular shall include the plural and vice
versa wherever the context so admits or requires.
(c) Where a word or phrase is defined, other parts of speech and
grammatical forms of that word or phrase shall have corresponding
meanings.
(d) References to the recitals, articles, sub-articles and Schedules
shall be references to the recitals, articles, sub-articles and
Schedules of this Agreement.
(e) References to this Agreement shall mean and include an
appropriate reference to the Schedules.
2. OBJECT AND SCOPE
The object of this Agreement is the provision by Shell Capital and its
Consultants of Services to the Company in support of the Company's
interests in the Project if Shell Capital determines, in its sole opinion,
that the Company or the Project requires such Services.
3. PERFORMANCE
3.1 If Shell Capital determines (in its sole opinion) from time to time
that the Company or the Project requires any Services, it shall notify the
Company of such determination, the Services that it considers are required
and the steps that it intends to take in the utilisation of such Services.
3.2 Shell Capital may perform any or all of such Services or, at its sole
discretion, delegate the performance of any or all of such Services to a
Consultant who shall perform such Services on behalf of Shell Capital.
3.3 The Company will co-ordinate and cooperate with Shell Capital and its
Consultants in respect of any Services so provided and the Company will
ensure that its personnel, consultants and advisers and other contractors
to the Project so cooperate with Shell Capital and its Consultants as and
to the extent so directed by Shell Capital.
3.4 It is understood and agreed that Shell Capital and its Consultants are
independent contractors and nothing in this Agreement shall be construed so
as to constitute Shell Capital or any of its Consultants as an agent,
partner or representative of the Company or any other member of the
Chaparral Group or make Shell Capital or its Consultants in any way
subordinate to or dependent upon the Company or any other member of the
Chaparral Group.
3.5 The provision of any Services by Shell Capital or its Consultants
shall, at Shell Capital's sole discretion, include the provision of all
equipment necessary for the performance of such Services.
3.6 Notwithstanding the provisions of this Agreement, neither Shell
Capital nor any of its Consultants shall at any time be obliged to perform
or arrange the performance of any such Services and any participation in
the performance or arrangement of such Services shall be entirely at the
sole discretion of Shell Capital and, as the case may be, its Consultants.
4. REMUNERATION
4.1 In respect of Services to be rendered by or on behalf of Shell
Capital, the Company agrees to pay or reimburse Shell Capital for all costs
and expenses incurred by it in connection with the performance of such
Services (including any fees, costs and expenses payable by Shell Capital
to its Consultants in respect of any such Services). Such fees, costs and
expenses shall be computed in accordance with the customary accounting
practices of Shell Capital and shall include without limitation:
(i) the salaries and related expenses for the staff of Shell Capital
directly involved in rendering any such Services, including overheads;
(ii) charges for other resources used (if any) of Shell Capital;
(iii) office rental, personnel, communication and travel expenses
including hotel expenses and living allowances (if any);
(iv) the fees, costs and expenses of any Consultant appointed by Shell
Capital to carry out such Services; and
(v) other third party charges (if any).
5. TERMS OF PAYMENT
5.1 Shell Capital shall invoice the Company from time to time for the
payments to be made by the Company under this Agreement.
5.2 Within 30 (thirty) days of receipt of each invoice, the Company shall
pay, in the currency denominated in such invoice, all amounts due in the
manner, at the place and into the account nominated by Shell Capital. The
Company shall be responsible for, and carry the risk of obtaining, all
necessary permits and approvals to enable the Company to make the required
payments under this Agreement.
5.3 Any overdue payment hereunder shall bear interest, from the date it
falls due until such time that Shell Capital has received the payment from
the Company, at a rate equal to LIBOR on the date the payments fall due, or
the previous business day if payments fall due on a non-business day, plus
four per cent.
5.4 Any taxes, levies or charges of whatsoever nature payable in
Kazakhstan which, during the currency of this Agreement or after its
termination, the Company may be required to withhold or Shell Capital or
the Company may be required to pay in respect of any amount due to Shell
Capital under this Agreement, or in respect of the execution of this
Agreement, shall be for the account of the Company and the Company shall
pay such a sum as to yield to Shell Capital a net amount equal to the
amount that, but for such taxes, levies or charges, would have been
received by Shell Capital.
5.5 In respect of payments made by Shell Capital in currencies other than
Dollars, the conversion of such other currencies into Dollars, shall be
made at the relevant selling rates of exchange quoted by a first class bank
in England on the date the Company's account is charged in Shell Capital's
books.
6. AUDIT CERTIFICATE
6.1 If the Company requires verification of the payments due under this
Agreement in any calendar year, Shell Capital shall, for the account of the
Company, furnish a certificate by Shell Capital's statutory auditors
confirming that the costs of the Services rendered have been calculated in
accordance with the provisions of this Agreement. Such certificate, absent
manifest error, shall be conclusive as to the amounts certified.
6.2 Any request for such verification shall be made not later than two
years after the year concerned.
7. CONFIDENTIALITY
7.1 The Company undertakes:
(a) to preserve and cause its personnel to preserve the secrecy of
any Confidential Information; and
(b) not to disclose to any third party any Confidential Information
except with Shell Capital's prior written consent (which shall not be
withheld unreasonably if such disclosure is necessary for the furtherance
of the Company's interests in the Project) in which event the Company shall
require from such third party an undertaking in writing that it shall abide
by stipulations equivalent to those contained in this Article 7.1.
The foregoing undertakings shall continue, both during the currency of
this Agreement and after its termination, in so far and for so long as the
Confidential Information in question has not:
(i) become part of the public knowledge or literature; or,
(ii) been disclosed to the Company without restriction on use or
disclosure by a third party (other than a Consultant) who could
lawfully do so and who did not derive such Confidential Information
from Shell Capital or a Consultant.
7.2 The copyright in any Confidential Record supplied by Shell Capital or
any Consultant under this Agreement, shall, in the absence of any express
provision to the contrary thereon, vest in Shell Capital or such
Consultant.
7.3 The Company shall be entitled to use any Confidential Information only
while this Agreement is in force. Upon termination of this Agreement, the
Company shall, if so requested by Shell Capital, return all Confidential
Records supplied by Shell Capital or, as the case may be, the Consultant
under this Agreement as well as any copies made thereof by the Company.
8. LIMITATION OF LIABILITY
8.1 Notwithstanding the ensuing provisions of this Article 8, the Company
may require Shell Capital to re-perform, at no extra cost to the Company, a
particular Service which proves deficient due to faulty work by Shell
Capital or any Consultant.
8.2 Except as stated in Article 8.1, Shell Capital shall not be liable in
contract or at law for any Loss or Damage arising out of or relating to
this Agreement except for direct Loss or Damage for which Shell Capital
shall be liable if and to the extent that the Company establishes that such
direct Loss or Damage has been caused by an act or an omission to act which
constitutes Conscious Recklessness on the part of directors or senior
supervisory staff of Shell Capital while acting within the course of their
function. Direct Loss or Damage as used in this Article 8.2 shall exclude
any consequential or indirect Loss or Damage such as, but not limited to,
loss of product, loss of production, loss of use, loss of revenues or
profit, loss of interest, cost of delays or any Loss or Damage resulting
therefrom.
8.3 Except for the obligations of Shell Capital pursuant to Article 8.1,
any and all liability of Shell Capital arising out of or relating to this
Agreement shall be limited in aggregate to 25 per cent of the aggregate
amount due to Shell Capital under Article 4 for the calendar year in which
such Loss or Damage becomes apparent (excluding the repayment by the
Company of any disbursements made by Shell Capital to any Consultant), or
in the event such Loss or Damage becomes apparent after the termination of
this Agreement, for the last full calendar year of the term of this
Agreement.
8.4 Any obligation or liability of Shell Capital for faulty work or for an
act (including an omission to act) which constitutes Conscious Recklessness
shall expire two years after the date on which such faulty work or act
occurred and no claim, demand, action or proceeding shall be brought or
instituted by the Company against Shell Capital thereafter.
8.5 The Company undertakes to hold Shell Capital harmless from and
indemnified against any demand, claim, action or proceeding brought or
instituted by any third party (including personnel of the Company and any
other member of the Chaparral Group) for any liability in contract or at
law for Loss or Damage arising out of or relating to this Agreement except
if and to the extent that the Company establishes Shell Capital's liability
therefor in accordance with the provisions of Articles 8.2 and 8.3.
8.6 Except as stated in Article 8.1, Shell Capital shall not be liable in
contract or at law for any Loss or Damage arising out of or relating to
this Agreement for which any of its Consultants may be liable.
8.7 For the purposes of Articles 8.2, 8.3, 8.4 and 8.5 the expression
Shell Capital shall be deemed to include and mean Shell Capital and any
Consultant and their respective directors and senior supervisory staff.
Such directors and staff shall not be liable in person and the Company
hereby waives any action whatsoever against them.
9. FORCE MAJEURE
9.1 Neither Shell Capital nor any of its Consultants shall be liable for
any failure to fulfil any obligation under this Agreement, if, and for so
long as, fulfilment has been interfered with, hindered, delayed or
prevented by any circumstances whatsoever which are not reasonably within
the control of Shell Capital or its Consultants.
9.2 Shell Capital shall promptly notify the Company of the circumstances
concerned and the effect on its performance.
10. ASSIGNMENT AND DELEGATION
The Company shall not transfer any or all of its rights or obligations
under this Agreement without the prior written consent of Shell Capital.
11. DURATION
11.1 Subject to Article 11.2, this Agreement shall be effective as from the
date of this Agreement and shall remain in force until the date upon which:
(i) the loans referred to in Recital (C) have been repaid in full; and (ii)
the Company and the other members of the Chaparral Group have discharged
all their obligations and liabilities (whether actual or contingent) to
Shell Capital and the syndicate of financial institutions under the terms
of the financing agreements relating to such loans.
11.2 Shell Capital may terminate this Agreement at any time with immediate
effect.
12. ARBITRATION AND APPLICABLE LAW
12.1 Any dispute between the parties, whether resulting from a claim in
contract or at law, which may arise out of or in connection with this
Agreement or its implementation (including but not by way of limitation,
the validity, breach or termination of this Agreement or any provision
thereof) shall be finally and exclusively settled by arbitration in The
Hague, the Netherlands, under the Uncitral Rules of Arbitration by three
arbitrators appointed in accordance with the said Rules. The appointing
authority shall be the ICC Court of Arbitration. The arbitration
proceedings shall be conducted in the English language.
12.2 The substantive law of this Agreement and the substantive law to be
applied in any dispute as referred to in Article 12.1 shall be English law.
13. SEVERABILITY
In the event that any one or more of the provisions contained in this
Agreement are held to be invalid, illegal or unenforceable, the Company and
Shell Capital shall negotiate an equitable adjustment in the provisions of
this Agreement with a view to achieving the purpose thereof, and the
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected thereby.
14. MISCELLANEOUS
14.1 RIGHTS CUMULATIVE
All rights granted to the Parties under this Agreement shall be
cumulative and no exercise by either Party of any right shall restrict or
prejudice the exercise at any time of any other right granted by this
Agreement or otherwise available to it.
14.2 AMENDMENTS
The provisions of this Agreement may be amended only by a written
instrument signed by each Party hereto and may be waived only by a written
instrument signed by the Party entitled to the benefit hereof.
14.3 WAIVER OF IMMUNITY
The Parties acknowledge and agree that the execution, delivery and
performance of this Agreement, and of all agreements ancillary and
subsidiary hereto, constitute the commercial acts of each of the Parties.
Each of the Parties hereby irrevocably agrees that, to the extent that it
or any of its respective assets has acquired or hereafter may acquire any
right of immunity related to or arising from the transactions contemplated
by this Agreement or any agreement ancillary or subsidiary hereto, whether
characterised as sovereign immunity or otherwise, from any legal
proceedings, whether in the Republic of Kazakhstan, England or elsewhere,
from enforcement of or collection upon any liability or obligation related
to or arising from the transactions contemplated hereby or thereby,
including, without limitation, immunity from service of process, immunity
from jurisdiction or judgment of any of its assets or property from
attachment prior to any entry of judgment, or from attachment in aid of
execution upon a judgment, it hereby expressly and irrevocably waives any
such immunity.
14.4 NOTICES
Any notice required to be given under this Agreement shall be given in
writing or by facsimile. Any such notice shall be deemed given if in
writing, when delivered and if by facsimile, when the answerback is
received. The address and facsimile number of the parties are as follow:
Shell Capital: Xxxxx Xxxxxxx Xxxxxxx, Xxxxx Xxxxxx
Xxxxxx, XX0 0XX
Attention: Financial Controller
Facsimile: 44 207 934 7058
The Company: Closed Type JSC XxxxxxxxxXxxxx
Xxxxxxxxxxxxx 0, Xxxxxxxx 00
Xxxxx, Xxxxxxxx of Kazakhstan
Facsimile: (7-3292) 518 336
Such address or facsimile may be amended by a Party giving written
notice thereof to the other Party.
IN WITNESS WHEREOF the Parties have caused this Agreement to be executed in
duplicate original by their duly authorised corporate officers, as follows:
SHELL CAPITAL SERVICES LIMITED
by: /S/ XXXX X.X. XXXXXX
-------------------------------
Name: Xxxx X.X. Xxxxxx
Title: Attorney-in-Fact
In the presence of:
/S/ XXXXXX XXXXX
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Witness:
Name: Xxxxxx Xxxxx
CLOSED TYPE JSC KARAKUDUKMUNAY
by: /S/ XXXXXXX X. KLINCHEV
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Name: Xxxxxxx X. Klinchev
Title: General Director
by: /S/ XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
Title: Finance Director
TABLE OF CONTENTS
PAGE
1. DEFINITION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. OBJECT AND SCOPE. . . . . . . . . . . . . . . . . . . . . . . . . 4
3. PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. REMUNERATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. TERMS OF PAYMENT. . . . . . . . . . . . . . . . . . . . . . . . . 5
6. AUDIT CERTIFICATE . . . . . . . . . . . . . . . . . . . . . . . . 6
7. CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . . 6
8. LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . . . . . . 7
9. FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . . . . . . 8
10. ASSIGNMENT AND DELEGATION . . . . . . . . . . . . . . . . . . . . 8
11. DURATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
12. ARBITRATION AND APPLICABLE LAW. . . . . . . . . . . . . . . . . . 8
13. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
14. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 9
