JOINT VENTURE AGREEMENT
BETWEEN
PT. PUTRA BAKTI MAHKOTA ("PUTRA")
AND
XXXXXX EXPLORATION PTY. LTD ("XXXXXX")
This Joint Venture Agreement (the "Agreement") is made and entered into
effective as of the 28th day of July, 1997, by and between Xxxxxx Exploration
Pty. Ltd, an Australian Corporation ("Xxxxxx"), and PT. Putra Bakti Mahkota, a
corporation organized and existing under the laws of the Republic of Indonesia
("Putra")
Recitals
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A. Putra has entered into a Technical Assistance Contract in the form
attached hereto as Exhibit A (the "TAC") with Perusahaan Pertambangan
Minyak Xxx Gas Bumi Negara, an Indonesian State Enterprise established
on the basis of Law No. 8/1971 ("Pertamina"), relating to development of
the Sambidoyong Oil Field (which falls within the Contract Area as
defined in the TAC). Fort Point Resources Ltd., a corporation organized
and existing under the laws of the Province of Alberta, Canada
("Fort Point") was also a named party to, and a Contractor under, the
TAC, but all rights and interests of Fort Point under the TAC have been
terminated, and Putra and Pertamina are now the sole parties to the TAC
and Putra is the sole Contractor thereunder.
B. Putra has incurred certain costs and expenses (the "TAC Related
Expenses") in connection with the procurement, negotiation and execution
of the TAC, the creation of an initial plan of development and the
collection of data for use in connection with the tender process, and
establishment of a Work Program (as defined in the TAC) and budget
relating to the Petroleum Operations (as defined in the TAC) to be
conducted within the Contract Area (as defined in the TAC) for the
Contract Year (as defined in the TAC) ending November 16, 1997.
C. Putra was granted the authority to perform the Work Program by
Pertamina, which has exclusive authority, granted by the laws and
government of the Republic of Indonesia, for the mining, extraction,
exploitation and production of minerals, petroleum products and natural
gas throughout the Contract Area.
D. Putra is not legally bound or committed to any third party with
respect to the development or operation of the Petroleum Operations as
described in the TAC, and the parties hereto desire to establish a joint
venture for the development of the Sambidoyong Field, in accordance with
the requirements of the TAC. To this end, the parties desire that all
rights and obligations of Putra arising pursuant to the TAC be
transferred and assigned to a joint venture entity established by the
parties hereto (the "JV"), so that the JV may pursue the conduct of
Petroleum Operations within the Contract Area, assume all obligations
of Putra as set forth in the TAC, and realize the benefits of all
rights of the Contractor (as defined in the TAC) arising thereunder.
E. The parties desire that Putra receive certain consideration in
exchange for the transfer of rights and obligations under the TAC to JV,
including a payment of a specified fee, reimbursement of certain of the
TAC related Expenses, and a participating interest in profits from the
Petroleum Operations, all upon the terms and conditions set forth below.
Agreement
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NOW THEREFORE, in consideration of the foregoing premises and the
provisions hereafter set forth, the parties hereto agree as follows:
1. Formation of Joint Venture Entity to Serve as Substitute Contractor
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Under TAC.
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1.1 Formation of Entity. Promptly after the effective date of
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this Agreement, the parties hereto shall form a corporation or
other form of joint venture limited liability company under the
laws of such jurisdiction as the parties hereto may agree upon
(the "JV") for the purpose of assuming all rights, obligations
and interests of Putra under the TAC, and carrying out the
Petroleum Operations and Work Program as defined in the TAC,
subject to the terms and conditions of this Agreement.
1.2 Name and Charter Documents. The name of JV shall consist of
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the words "Xxxxxx Putrabakti Sambidoyong," and words or
abbreviations identifying the type of entity, or shall be such
other name as each of the parties hereto may agree upon. The
charter documents of JV shall be in a form
mutually agreed upon by the parties hereto.
1.3 Capitalization of JV.
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(a) Shares or equity interests in JV will be issued, and
other actions will be taken, such that upon the
organization of JV, Xxxxxx will have an eighty two percent
(82%) interest and Putra will have an eighteen
percent (18%) interest in the profits of JV. Putra's
participation will be in the nature of a carried interest,
so that it will be entitled to an 18% share of profits to
be distributed as dividends. However, Putra will not have
any obligation to contribute to the capital of JV, other
than to contribute Putra's entire rights and interests
under the TAC.
(b) Profits and management controls will be allocated in
accordance with the respective equity interests of the
owners of JV, unless otherwise specified.
(c) The charter documents shall reflect that no dividends
or distributions will be declared or paid to Putra until:
(i) all loans and contributions made by Xxxxxx to satisfy
the obligation set forth in Section 3,
4 and 5 below have been repaid to Xxxxxx; and (ii) all
additional expenses, contributions and loans paid,
incurred or made by Xxxxxx to finance the
Petroleum Operations and Work Program have been repaid to
Xxxxxx. The expenses Xxxxxx shall be entitled to recover
shall include all investment costs incurred to secure
the necessary funds to meet the obligations set forth
in Sections 3, 4 and 5 below and to ensure the performance
of the Work Program. JV will execute an agreement to repay
all such loans, expenses and contributions, in a form
approved by Xxxxxx.
1.4 Management.
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(a) Management of JV shall be under the direction of its
Board of Directors. The Board shall initially consist of
four members, selected as follows:
(i) The Chairman of the Board shall be an individual
designated by the mutual agreement of Xxxxxx and
Putra.
(ii) The President of JV, who will also serve as a
director of JV, shall be an individual designated by
Xxxxxx.
(iii) One of the final two directors shall be an individual
nominated by Putra, and the other shall be an
individual nominated by Xxxxxx.
(b) The initial officers of JV will be the President, who
will be a designee of Xxxxxx, and such other officers as
the Board of Directors of JV may determine to be
appropriate.
(c) JV shall be staffed so as to comply with applicable
requirements regarding participation of qualified
Indonesian personnel.
1.5 Restrictions on Transfer of Ownership Interests. The
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parties to this Agreement shall enter into an agreement in a
form mutually agreed upon, placing certain restrictions on the
transfer of the shares or equity interests in JV held by them.
Such restrictions shall include a right of first refusal, such
that if a shareholder or owner of JV proposes to sell
any shares or equity or carried interests, such shares or
interests must first be offered to the other shareholders or
owners of JV, on a pro-rata basis, in accordance with their
relative interests in JV. A party proposing to sell any
shares or equity or carried interests will be required to give
written notice to the other parties of the proposed sale, and
the proposed sales price. If the right of first refusal is not
exercised within thirty (30) days following
the receipt of written notice thereof, then the offering party
may proceed with the proposed sale at a price and on terms no
less favorable to the buyer than those offered to the other
parties hereto. If a sale is not concluded
within sixty (60) days, the transfer shall once again be subject
to the right of first refusal. The right of first refusal shall
continue for a period of two years commencing from the effective
date of this Agreement. The right of first refusal will not
apply to sales to assist in the funding of the payment
obligations set forth herein or the funding of the Work Program
under the TAC.
1.6 Books, Records and Expenses.
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(a) The books and records of JV shall be kept in accordance
with generally accepted accounting principles consistently applied and
accepted by the Association of Indonesia Accountants.
(b) Each of the parties hereto shall have the right, at its
own expense, at all reasonable times while a shareholder or owner of JV, to
inspect any books or records of JV, including all records, well samples, data
and materials which relate to the TAC Contracts. JV may condition the release
of such information on the execution of appropriate confidentiality
agreements.
(c) Each of the parties hereto shall have the right, at its
own expense, while a shareholder or owner of JV, to audit the financial and
other records of JV, in accordance with accepted procedures and practices.
2. Transfer and Assignment of Rights and Obligations under TAC.
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2.1 Transfer of TAC. All rights, obligations and interests of
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Putra arising under the TAC shall be assigned and transferred to JV (the "TAC
Transfer") immediately upon the delivery to Xxxxxx and Putra of the letters
referenced in Section 3.2 below, subject to final approval of the Government
of the Republic of Indonesia.
2.2 Modification of TAC. The parties hereto agree to
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immediately pursue an amendment and modification of the TAC, to put the TAC in
a form that is mutually acceptable to Pertamina, Xxxxxx and JV. It is
anticipated that such modifications shall include, without limitation, the
following:
(a) Appointment of JV as the sole Contractor under the TAC
in substitution of Putra, and release of Putra from any future obligations
under the TAC.
(b) A determination of the Commencement Date of the Work
Program to be conducted by JV, which date will be no earlier than the date of
the TAC Transfer.
(c) An agreement between Pertamina and JV in a form
approved by Xxxxxx regarding the Work Program, expenditures to be made in
conducting Petroleum Operations, and associated budgets, for the first two
Contract Years (as defined in the TAC) following the Commencement Date. The
Work Program is to be based on a description of services to be rendered, and
programs to be accomplished, rather than on a specific amount of funds to be
expended. A proposed revised Work Program is attached hereto as Exhibit C.
(d) A waiver by Pertamina of any right to cause a
termination of the TAC pursuant to Section II of the TAC.
(e) Termination of the right granted to Pertamina in
Section XV of the TAC to demand the Pertamina Participating Interest (as
defined in the TAC).
(f) A confirmation by Pertamina that as of the date of the
TAC Transfer, neither Putra nor JV will be considered to be in breach or
default of any obligations under the TAC, no liability will arise against any
such party with respect to any actions taken or failed to be taken prior to
the TAC Transfer, and the TAC is in full force and effect in the form attached
hereto as Exhibit A, subject to such amendments and modifications as have been
approved by Xxxxxx and JV.
(g) A modification of Section III of the TAC, to delete
references to the Work Program that was to have been performed prior to the
TAC Transfer, to provide that the Work Program to be conducted in each
Contract Year will be subject to the results obtained in the prior Contract
Year, and to clarify that while portions of a Work Program may be deferred
from one year to the next, such deferral will not result in a requirement to
pay to Pertamina funds that would otherwise have been spent in the Work
Program.
(h) Confirmation by Pertamina that Fort Point has no
further rights or interests in or under the TAC.
(i) Documentation that JV, as the substitute Contractor
under the TAC, is a joint venture between Putra and Xxxxxx, to permit
recovery, pursuant to Section V of the TAC, of expenses incurred at the
director level.
2.3 JV as Party to TAC. Upon the TAC Transfer, JV shall be
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substituted for Putra as a party to the TAC, and Putra shall be released and
relieved from any further rights and obligations under the TAC, except that
Putra shall remain liable for any breaches of the TAC occurring prior to the
date of the TAC Transfer if not released from such liability by Pertamina. JV
will not assume any liabilities with respect to any breaches of the TAC
occurring prior to the date of the TAC Transfer.
3. Payment of Fee to Putra.
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3.1 Fee Payment Amount. In consideration for Putra's agreement to
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transfer to JV all of Putra's rights and benefits under the TAC as provided in
Section 2 above, JV will pay to Putra an amount equal to US$380,000 (three
hundred eighty thousand U.S. dollars) (the "Fee Payment Amount").
3.2 Timing of Fee Payment Amount - Letter From Pertamina. The Fee
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Payment Amount will be paid to Putra within ten days following receipt and
authentication by Xxxxxx of an authorized letter or letters from Pertamina,
addressed to Putra and Xxxxxx and including the following, in a form
reasonably approved by Xxxxxx:
(a) The approval and consent of Pertamina to the assignment
and transfer of all rights, obligations and interests of Putra arising under
the TAC to JV;
(b) Confirmation that the Contractor's commitment under the
TAC to spend a minimum of US$9,500,000 in the performance of the Work Program
within the initial two Contract Years has been extended for one Contract Year
and will be extended, on a year by year basis, for two additional Contract
Years;
(c) Confirmation that the Commencement Date for the Work
Program and Petroleum Operations under the TAC will not occur until JV
commences operations in furtherance of the Work Program following the
effectiveness of the TAC Transfer;
(d) Confirmation that the TAC is in full force and effect
with Putra and Pertamina as the sole parties thereto, Putra's failure to
perform the Work Program has been excused, and neither party is in breach or
default of any of its obligations thereunder; and
(e) Confirmation that Pertamina will favorably consider
appropriate modifications to the TAC to facilitate a development of the
Contract Area on a basis that is reasonable for both Pertamina and JV,
including the modifications contemplated by Section 2.2 of this Agreement.
3.3 Escrow of Fee Payment Amount. Promptly after the execution
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of this Agreement, Xxxxxx will arrange for a deposit into an escrow account
with a financial institution selected by Xxxxxx an amount equal to the Fee
Payment Amount, and will provide evidence of such deposit to Putra. The Fee
Escrow Amount will be withdrawn from such account and delivered to Putra upon
satisfaction of the condition set forth in Section 3.2 above.
4. Payment of Verified Expenses, or Portion Thereof.
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4.1 Payment of Verified Expenses Upon Commerciality Declaration.
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JV will pay to Putra an amount equal to the actual out-of-pocket TAC Related
Expenses incurred by Putra, to the extent such expenses are recoverable by the
Contractor under Section V of the TAC, as verified by independent auditors
appointed by Xxxxxx to audit Putra's record of expenses (the "Verified
Expenses"). The payment of the Verified Expenses will be made on the later
of: (i) the TAC Transfer; (ii) the completion of the audit by the auditors
appointed by Xxxxxx to establish the Verified Expenses; and (iii) a
determination by Xxxxxx and Pertamina, based on data developed by the
Petroleum Operations, that the Sambidoyong Field can be commercially developed
(a "Commerciality Declaration").
4.2 Payment of Portion of Verified Expenses if Project Fails to
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Achieve
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Commerciality. If the TAC Transfer takes place, but the TAC is
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thereafter terminated due to the lack of a Commerciality Declaration, so that
the Verified Expenses do not become payable to Putra pursuant to paragraph 4.1
above, then upon such termination JV will pay to Putra an amount equal to
eighteen percent (18%) of the Verified Costs, in exchange for Putra's transfer
to Xxxxxx of Putra's entire rights and interests with respect to JV.
5. Xxxxxx to Fund Payments. To the extent the capital contributions
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to, and revenues of, JV are not sufficient to pay the amounts payable to Putra
as specified in Sections 3 and 4 above, Xxxxxx will fund such payments through
loans to JV. Such loans shall be documented by promissory notes, security
instruments and other documentation in a form approved by Xxxxxx. All such
loans shall be repaid to Xxxxxx before any distribution or dividend is made by
JV to its shareholders or owners.
6. Representations and Warranties of Putra. Putra hereby represents,
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warrants and covenants to Xxxxxx as follows:
6.1 Organization and Standing. Putra is an entity duly
-------------------------
organized, validly existing and in good standing under the laws of the
Republic of Indonesia.
6.2 Authority, Authorization and Validity. Putra has all
-------------------------------------
requisite power and authority to conduct its business as presently conducted,
to enter into this Agreement, and to carry out and perform its obligations
hereunder. The execution, delivery and performance of this Agreement have
been duly authorized by all requisite corporate action. This Agreement has
been duly executed and delivered by Putra and constitutes the legal, valid and
binding obligation of each of Putra, enforceable in accordance with its terms,
subject as to enforcement of remedies to applicable bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the enforcement of
creditors rights. The execution, delivery and performance of this Agreement
and compliance with the provisions hereof Putra do not conflict with, or
result in a breach or violation of the terms, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of any
lien pursuant to the terms of, the charter documents of Putra, or any statute,
law, rule or regulation or any order, judgment, decree, contract, agreement or
instrument to which Putra or any of its properties are bound or subject.
Putra is not legally bound or committed to any other third party with respect
to the development or operation of the Sambidoyong Field, except for the
obligations owed to Pertamina, as set forth in the TAC.
6.3 Status of TAC.
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(a) The TAC is in full force and effect in the form
attached hereto as Exhibit A. Although Putra has not yet commenced the Work
Program contemplated by the TAC, or conducted the environmental baseline
assessment called for by the TAC, Pertamina has excused such non-performance,
so that Putra is not in default of any of its obligations under the TAC.
Pertamina is not in breach or default of any of its obligations under the TAC.
(b) All services performed, expenses incurred and
commitments undertaken by Putra in connection with the TAC have been
consistent with the requirements of the TAC and in accordance with the
applicable budgets approved by Putra and Pertamina, copies of which are
attached hereto as Exhibit B. All expenses incurred have been fully paid for.
The costs and expenses incurred to date by Putra pursuant to the TAC and in
preparation for the Work Program do not exceed $500,000. Putra understands
that the extent to which such expenses will qualify as Verified Expenses as
provided in Section 4.1 above will be determined pursuant to the audit to be
conducted as provided in Section 4.1.
(c) Putra is not aware of any reason that the Commerciality
Declaration contemplated by the TAC would not be given.
(d) Putra knows of no reason why the TAC Transfer cannot
occur as contemplated or why JV would not be able to proceed with the
Petroleum Operations and Work Program after the TAC Transfer as contemplated
by the TAC and this Agreement.
6.4 No Adverse Actions. No action, suit, proceeding or
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governmental investigation is pending, or to the knowledge of Putra
threatened, which seeks to question, delay or prevent the consummation of the
transactions contemplated by this Agreement, or the performance of the TAC or
the Petroleum Operations or Work Program described therein.
7. Representations and Warranties of Xxxxxx. Xxxxxx hereby represents and
warrants to Putra as follows:
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7.1 Organization and Standing. Xxxxxx is duly organized, validly existing
and in good standing under the laws of Australia.
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7.2 Authority, Authorization and Validity. Xxxxxx has full
-------------------------------------
power and authority to enter into this Agreement and to carry out and perform
its obligations hereunder. This Agreement has been duly authorized, executed
and delivered by Xxxxxx and constitutes the legal, valid and binding
obligation of Xxxxxx, enforceable against Xxxxxx in accordance with its terms
except as such enforceability may be limited by applicable bankruptcy,
reorganization, insolvency and other similar laws affecting the enforcement of
creditors' rights.
8. Covenants and Agreements of the Parties.
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8.1 Affirmative Covenants and Agreements of Putra. Putra covenants and
agrees with Xxxxxx as follows:
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(a) Maintenance of TAC. From and after the effective date
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of this Agreement and until the TAC Transfer, Putra shall: perform and
fulfill all of its obligations under the TAC; incur and pay expenses under the
TAC and in conduct of the Work Program only as approved by Xxxxxx and
consistent with the budgets established pursuant thereto, as set forth in the
Exhibits to this Agreement; and maintain the TAC in full force and effect, in
the form attached hereto as Exhibit A, subject to such modifications and
amendments thereto as may be specifically approved in writing by Xxxxxx.
(b) Access to Information. From and after the effective
---------------------
date of this Agreement and until the TAC Transfer, Putra shall make available
to Xxxxxx, and its representatives and agents, all books, records and
information relating to the Work Program, the Petroleum Operations, the TAC,
and the services provided and studies conducted in connection therewith.
(c) Confidential Information. Putra confirms, acknowledges
------------------------
and covenants that all information relating to the Petroleum Operations, Work
Program and Contract Area in its possession or to which it has had access
shall be treated as confidential, and shall not be used, reproduced, disclosed
or disseminated to any party without the prior written consent of Xxxxxx.
Effective upon the TAC Transfer, all such information previously owned by
Putra shall become the exclusive property of JV. All such information
previously owned by Pertamina shall remain the property of Pertamina. All
copies thereof in the possession of Putra shall be delivered, promptly after
the TAC Transfer, to JV or Pertamina, whichever is the party entitled thereto.
(d) Cooperation in Transition. Putra shall take all
-------------------------
actions reasonably requested by JV to facilitate or permit the TAC Transfer,
and will cooperate with JV in the transition of the Work Program and Petroleum
Operations, and will assist in the transfer of any existing agreements with
vendors and suppliers, in an effort to preserve vendor and customer
relationships and to ensure the uninterrupted continuation of the Work
Program.
(e) Additional Deliveries. Putra will execute, acknowledge
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or deliver such documents or instruments as may be reasonably requested by
Xxxxxx or JV, and will take any other action consistent with the terms of this
Agreement that may be reasonably requested by Xxxxxx or JV, for the purposes
of effecting the TAC Transfer and carrying out the other transactions
contemplated by this Agreement. All such actions shall be at the expense of
the party requesting such action.
8.2 Covenants and Agreements of Xxxxxx -- Confidential
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Information. Xxxxxx confirms, acknowledges, and covenants that information
--
which is marked "confidential," and is received or to be received by it from
Putra pursuant to this Agreement, is and shall be confidential and for the use
of Xxxxxx and JV only, and Xxxxxx will not use such information or reproduce,
disclose or disseminate such information to any other person (other than
employees, directors or agents of Xxxxxx or its parent company having a need
to know the contents of such information and attorneys, accountants and
engineers employed by Xxxxxx or its parent company), except in connection with
the exercise of rights under this Agreement, unless Putra has made such
information available to the public generally, such information has otherwise
been made generally or publicly available, or Xxxxxx or its parent company is
required to disclose such information by a duly authorized governmental body.
Xxxxxx understands that all oral communications of a confidential nature are
to be followed by a written document summarizing such conversation, which
shall be labeled confidential. Xxxxxx shall be relieved of any
confidentiality obligation effective as of the TAC Transfer, at which time it
shall become the owner of, and entitled to the unrestricted use of, all
confidential information received with respect to the Work Program, Petroleum
Operations and Contract Area, subject to the contractual restrictions relating
thereto set forth in the TAC.
9. Indemnification.
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9.1 Putra's Indemnities. Putra shall indemnify, defend and hold
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harmless Xxxxxx and JV from and against any and all losses, costs,
liabilities, damages and expenses (including legal and other expenses incident
thereto) arising out of or suffered or incurred in connection with: (a) the
material breach of any representation or warranty of Putra set forth in, or
delivered pursuant to the terms of, this Agreement; or (b) the material breach
of any of Putra's covenants or other agreements contained in or arising out of
this Agreement or the transactions contemplated hereby.
9.2 Xxxxxx'x Indemnities. Xxxxxx shall indemnify, defend and
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hold harmless Putra from and against any and all losses, costs, liabilities,
damages and expenses (including legal and other expenses incident thereto)
arising out of or suffered or incurred in connection with: (a) the material
breach of any representation or warranty of Xxxxxx set forth in this
Agreement; or (b) the material breach of any of Xxxxxx'x covenants or other
agreements contained in or arising out of this Agreement or the transactions
contemplated hereby.
9.3 Notice of Claim. Putra or Xxxxxx, upon discovery of the
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breach of any of the representations, warranties or covenants of the other
under this Agreement, shall each give to the other prompt written notice of
the discovery of such breach. If any action, suit or proceeding shall be
commenced against, or any claim or demand be asserted against, Putra or
Xxxxxx, as the case may be, in respect of which such party proposes to seek
indemnification from the other under this Section 9.3, then such party (the
"Claimant") shall notify the party from whom indemnification is sought (the
"Indemnifying Party") to that effect in writing with reasonable promptness and
in any event, if such claim arises out of a claim by a person or entity other
than the Claimant, then within ten (10) days after notice of such claim was
given to the Claimant; provided, however, that the Claimant's failure to give
such notice to the Indemnifying Party shall not relieve the Indemnifying Party
of its obligations hereunder unless, and only to the extent that, it has a
prejudicial effect on the Indemnifying Party's ability to defend the claim.
9.4 Assumption and Defense of Third-Party Action. If any claim
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hereunder arises out of a claim against the Claimant by a third party, the
Indemnifying Party shall have the right, at its own expense, to participate in
or assume control of the defense or settlement of such claim, and the Claimant
shall fully cooperate with the Indemnifying Party subject to reimbursement for
actual out-of-pocket expenses incurred as the result of a request by the
Indemnifying Party. If the Indemnifying party elects to assume control of the
defense of any third-party claim, the Claimant shall have the right to
participate in the defense of such claim at its own expense. If a claim
requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible. If the
Indemnifying Party does not elect to assume control or otherwise participate
in the defense of any third-party claim, it shall be bound by the results
obtained by the Claimant with respect to such claim.
9.5 Limitations on Indemnification. Notwithstanding any
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provisions herein to the contrary, neither party shall be obligated under this
Section to indemnify, defend or hold harmless the other from and against any
loss, cost, liability, damage or expense: (i) arising out of or in connection
with facts or circumstances occurring more than two (2) years after the date
of the TAC Transfer; or (ii) which has a total liability or exposure to the
Claimant of less than $10,000.
10. Termination; Amendment; Waiver.
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10.1 Termination. This Agreement may be terminated as provided below:
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(a) Mutual Agreement. This Agreement may be terminated at any
time by the mutual written consent of Putra and Xxxxxx;
(b) This Agreement may be terminated by either Putra or
Xxxxxx, if such party has not received a letter from Pertamina meeting the
requirements of paragraphs 3(a) through 3(e) above by August 31, 1997.
10.2 Effect of Termination. If this Agreement is terminated in
---------------------
accordance with Section 10.1, this Agreement shall become void and there shall
be no further liability or obligations on the part of any party or their
respective officers, directors, shareholders or agents, except as to the
obligations set forth in Section 8.2 (Confidentiality), Section 11.1 (Costs
and Expenses) and Section 9 (Indemnification), and with respect to any
liabilities or damages incurred or suffered by a party as a result of the
breach by the other party of any of its other representations, warranties,
covenants or agreements set forth in this Agreement, and the pursuit of
remedies with respect thereto as permitted hereby.
11. Miscellaneous.
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11.1 Costs and Expenses. Each of the parties hereto shall
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pay all of the fees and expenses that it incurs in connection with the
negotiation, preparation and execution of this Agreement and the transactions
contemplated hereby, including, without limitation, all professional and other
fees.
11.2 Indemnification from Obligations to Brokers. Each party
-------------------------------------------
hereto will indemnify and hold harmless the other against and in respect of
any other claim for a brokerage commission, finders fee or other similar
payment relative to this Agreement or to the transactions contemplated hereby,
based in any way on agreements, arrangements or understandings made or claimed
to have been made by the indemnifying party.
11.3 Parties in Interest. Except as otherwise specifically
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provided herein, all representations, covenants and agreements contained in
this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto whether so expressed or not. All representations, warranties,
covenants and agreements made herein by Putra shall inure to the benefit of
JV. JV is specifically made a third party beneficiary of this Agreement.
11.4 Notices. All notices, requests, consents and other
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communications hereunder shall be in writing and shall be delivered in person
or sent by electronic facsimile or telecopy, followed promptly by a notice
mailed by certified or registered mail, return receipt requested, addressed as
follows:
(a) if to Xxxxxx, at the telecopy number and address set
forth below:
Xxxxxx Exploration Pty. Ltd.
XXX Xxxxx 000 Xxxxxxxxx Xxxx
Xxxxxxxx 0000, Xxxxx Xxxxxxxxx
Attn: Xxxx Xxxxxx
Fax: (000) 0000 0000
With a copy to:
P. Xxxxxxxxx Xxxxxxxx
Holme Xxxxxxx & Xxxx LLP.
000 Xxxx Xxxxxxxx, Xxxxx 0000
Xxxx xxxx Xxxx, Xxxx 00000
Fax: (000) 000-0000
(b) if to Putra, at the telecopy number and address set
forth below:
PT. Putrabakti Mahkota
Perkantoran Roxy Mas Blok D4 Xx. 0
Xx. X.X. Xxxxxx Xxxxxx, Xxxxxxx 00000
Attn: Xxxxxxxx Xxxxx, President Director
Fax: (000) 000 0000
or in any such case, at such other telecopy number and address as shall have
been furnished in writing by such party to the others. All notices sent by
telecopy or electronic facsimile shall be deemed delivered upon receipt of
confirmation of the telecommunication.
11.5 Arbitration.
-----------
(a) The parties will make every reasonable effort to settle
amicably any problems arising from this Agreement. Any disputes arising under
or relating to this Agreement which cannot be settled amicably shall be
settled by final and binding arbitration conducted in Singapore in accordance
with the rules then in effect of the Singapore International Arbitration
Centre. Arbitration will be conducted by three arbitrators, with Xxxxxx and
Putra each selecting one arbitrator, and those two arbitrators selecting the
third. The decision of a majority of the arbitrators shall be final and
binding upon the parties. Judgment upon any award rendered by the arbitrators
may be entered in any court having jurisdiction. In the event any arbitration
or other permitted action is commenced to enforce this Agreement or to remedy
any default hereunder, the prevailing party shall be entitled to recover its
reasonable attorney fees, and all costs, fees and expenses of arbitration, in
addition to any other relief to which it may be entitled.
(b) The parties hereto expressly waive Section 461 of the
Regelement of the Rechtsvordering (the "R.V.") and Articles 15 and 108 of Law
No. 1 of 1050, being The Supreme Court Rules of Indonesia, so that there will
be no appeal in the Indonesian Supreme Court from the decision of the
arbitrators.
(c) The parties agree that in accordance with Section 631
of the R.V., the arbitrators need not be bound by strict rules of law in
making their decision, but may pronounce judgment as reasonable men. The
parties further agree to waive the provisions of Articles 1266 and 1267 of the
Indonesian Civil Code to the extent that a judicial decision or order would be
required as a precondition to an award of damages in a dispute relating to
this Agreement.
11.6 Entire Agreement. This Agreement, including schedules and
----------------
exhibits hereto, constitutes the sole and entire agreement and understanding
of the parties with respect to the subject matter hereof, and specifically
supersedes the terms of the Memorandum of Understanding dated June 24, 1997.
All schedules and exhibits hereto are hereby incorporated herein by reference.
No party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants, except as specifically set forth
herein or therein.
11.7 Counterparts--Facsimile Signatures. This Agreement may be
----------------------------------
executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. This Agreement shall be considered duly executed and delivered by
a party hereto when an electronic facsimile transmission of the signature page
hereto and purporting to reflect the execution of such signature page by a
representative of such party shall have been delivered by such party to the
other parties hereto. Each party hereto agrees that if it executes this
Agreement by delivery of a facsimile transmission of the signature pages as
provided in the preceding sentence, it will thereafter deliver to each of the
parties hereto duly executed original counterparts of such signature pages.
11.8 Waivers and Amendments. Except as otherwise expressly
----------------------
provided herein, neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated other than by a written instrument signed by
the party against whom enforcement of any amendment, waiver, discharge or
termination is sought.
11.9 Severability. If any provision of this Agreement shall be
------------
declared void or unenforceable by any judicial or administrative authority,
the validity of any other provision and of the entire Agreement shall not be
affected thereby.
11.10 Titles and Subtitles. The titles and subtitles used in
--------------------
this Agreement are for convenience only and are not to be considered in
construing or interpreting any term or provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first above written.
XXXXXX:
Xxxxxx Exploration Pty. Ltd., an Australian corporation
By:_____________________________________
Xxxx X. Xxxxxx, Managing Director
PUTRA:
PT. PUTRA BAKTI MAHKOTA, a corporation
organized and existing under the laws of the Republic of
Indonesia
By:_______________________________________
Xxxxxxxx Xxxxx, President Director
JOINT VENTURE AGREEMENT
between:
XXXXXX EXPLORATION PTY. LTD., an Australian corporation ("Xxxxxx")
and
PT. PUTRA BAKTI MAHKOTA, an Indonesian corporation ("Putra")
______________________
Dated as of July 28, 1997
EXHIBIT A
[Attach a copy of the TAC Agreement}
EXHIBIT B
Budgets Approved For Current Contract Year of the TAC
EXHIBIT C
Revised Work Program
It is proposed that Section 3.2 of the TAC be amended to read in its
entirety as follows:
3.2 The Work Program to be conducted by Contractor during the four
Contract Years commencing from November 17, 1998 shall be as follows:
Contract Year Work Program
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Year One: Interpretation of seismic data and possible
reprocessing of old data as well as
consider acquisition of additional new
seismic data to locate more appropriate
well site to test Sambidoyong structure.
Drill new well (SBD-2) on selected
location and test.
Petrophysical analysis of SBD-1 well data
with view to remedial cementing job and
retesting.
Year Two: Workover SBD-1 well or side-track
drilling and retesting.
Drill development well (SBD-3) on
Sambidoyong structure.
Drill a third well if warranted on
Sambidoyong structure or on one of
the other prospects A, B, C or D.
Reservoir engineering analysis of
Sambidoyong Field.
Year Three: Design and install production facilities for
Sambidoyong oil and gas field and
commence production.
Drill a fourth well - development well on
Sambidoyong field or one one of the other
previously mentioned prospects.
Reservoir study.
Year Four: Drill exploration well on one of the
undrilled mapped prospects.
Drill development well.
Production engineering study.
Contractor shall resubmit the Work Program for each Contract Year based on
the results of the Work Program conducted during the prior Contract Year.
If during any Contract Year Contractor should not complete all portions
of the Work Program to be conducted during such Contract Year, then the
remaining, uncompleted portions of such Work Program may be carried forward to
the next Contract Year.
The foregoing Work Program is based on completion of designated tasks,
rather than the expenditure of specified amounts of funds. Contractor shall
be responsible for completing the designated tasks, and assuming the
responsibility of payment of the necessary costs associated therewith.
