EXHIBIT 19
FINAL
DOMESTIC SALES AGREEMENT
INTEROIL LIMITED
(REFINER)
and
SHELL PAPUA NEW GUINEA LIMITED
(PURCHASER)
ARTHUR ROBINSON & HEDDERWICKS
Stock Exchange Centre
530 Collins Street
Melbourne 3000 Australia
Tel 61 3 9614 1011
Fax 61 3 9614 4661
pjsm M0110891807v6 969289 MXS
(C) Copyright Arthur Robinson & Hedderwicks 2004
ARTHUR ROBINSON
Domestic Sales Agreement & HEDDERWICKS
TABLE OF CONTENTS
1. DEFINITIONS & INTERPRETATION 2
1.1 Definitions 2
1.2 Interpretation 7
1.3 Consents or Approvals 8
1.4 Commencement 8
1.5 Relationship between parties 8
2. AGREEMENT TO SUPPLY 8
3. REFINER'S OBLIGATION TO SUPPLY PRODUCT TO PURCHASER 9
4. PURCHASER'S OBLIGATION TO PURCHASE PRODUCT FROM THE REFINER 9
5. GENERAL CO-OPERATION REGARDING AVAILABILITY OF PRODUCT 10
5.1 Refinery Shut-In 10
5.2 Regular communication 10
6. FORECASTING 10
7. NOMINATIONS 11
7.1 Nomination for Product supply at the Gantry and Wharf. 11
7.2 Offtake Co-ordinator and Firm Program 12
7.3 Firm Program Confirmations and Accepted Nominations 13
8. PRODUCT PRICE 14
9. CONDITIONS OF PURCHASE APPLY 14
10. TERMINATION 14
10.1 Termination Events 14
10.2 Termination by Notice 14
10.3 Effect of Termination 15
10.4 Survival 15
11. CHANGES TO THE PROJECT AGREEMENT 15
11.1 General consultation 15
11.2 Changes to the Project Agreement 16
12. CONFIDENTIALITY 16
12.1 No disclosure 16
12.2 Permitted disclosures 16
13. COSTS AND EXPENSES 17
14. REPRESENTATIONS AND WARRANTIES 17
15. NOTICES 18
16. GOVERNING LAW 19
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Domestic Sales Agreement & HEDDERWICKS
17. FORCE MAJEURE 19
17.1 Event of Force Majeure 19
17.2 Remedy of Force Majeure 20
17.3 Mitigation 20
18. ENUREMENT 20
19. DISPUTES 20
20. MERGER 21
21. ASSIGNMENT 21
22. AGREEMENT CONDITIONAL ON NOVATION 22
22.1 Obligation to Assign 22
22.2 Condition Precedent 22
23. FURTHER ASSURANCES 22
24. PRIOR AGREEMENTS 22
25. WAIVER 22
26. COUNTERPARTS 22
SCHEDULE 1 23
Conditions of Purchase for a supply of Product at Wharf 23
SCHEDULE 2 24
Conditions of Purchase for supply of Product at Gantry 41
SCHEDULE 3 48
Deed of Novation 48
PAGE (ii)
ARTHUR ROBINSON
Domestic Sales Agreement & HEDDERWICKS
DATE [#]
PARTIES
1. INTEROIL LIMITED (company number 1-22826) of Level 6, Defens Haus,
Cnr Hunter Street and Champion Parade, Port Moresby, Papua New
Guinea (REFINER).
2. SHELL PAPUA NEW GUINEA LIMITED (company number 1-6349) of Level 10,
Pacific Place, Cnr Musgrave Street and Champion Parade, Port
Moresby, Papua New Guinea (proposed to be renamed InterOil
Distribution Company Limited)(PURCHASER).
BACKGROUND
1. InterOil Limited, a member of the InterOil Group, has constructed or
is in the course of constructing a petroleum refinery at Napa Napa
National Capital District and Central Province in Papua New
Guinea.
2. The construction and operation of the petroleum refinery by InterOil
Limited is recognised and supported by The Independent State of
Papua New Guinea pursuant to the Project Agreement between the
Independent State of Papua New Guinea, InterOil Limited and EP
InterOil, Ltd., as a project of national significance for Papua New
Guinea.
3. Following completion of construction and the commissioning of the
petroleum refinery by InterOil Limited, it will become a domestic
producer in Papua New Guinea of refined petroleum products.
4. The Shell Group is a major distributor of refined petroleum products
in Papua New Guinea and intends to distribute such products through
Shell Oil Products (PNG) Limited (or another member of the Shell
Group incorporated in Papua New Guinea) to replace such distribution
activities currently conducted by the Shell Group through Shell
Papua New Guinea Limited.
5. The parties are entering into this Agreement to:
A. facilitate a smooth transition from reliance on imported
refined petroleum products to 5. domestically refined
petroleum products in Papua New Guinea;
B. encourage the continued operation and the development of a
dependable domestic petroleum distribution system to service
the domestic market in which customers, the citizens of Papua
New Guinea, financiers and the parties can have confidence by
creating a framework for the efficient, stable and economic
production and distribution of domestically produced petroleum
products, thereby promoting:
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(i) the development of a substantial and stable customer
base and a stable financial environment for the
production activities of the petroleum refinery;
(ii) the integrity of the domestic petroleum refining
capacity and the domestic petroleum distribution system
for the benefit of customers and the encouragement of
domestic and foreign investment in Papua New Guinea; and
(iii) the general national interest of Papua New Guinea. (
6. Pursuant and subject to this Agreement:
A. the purchaser of petroleum products under this Agreement
wishes to acknowledge that in accordance with the requirements
of the Project Agreement referred to in Recital 2, as a
domestic distributor of petroleum products in Papua New Guinea
it will to the extent possible buy all its requirements for
petroleum products for distribution in Papua New Guinea from
InterOil Limited's refinery and proposes to do so in
accordance with the terms and conditions of this Agreement;
and
B. the InterOil Group and the Shell Group will capitalise upon
their specific areas of specialisation and expertise to pursue
those aims set out in Recital 5 by delineating their functions
so that:
(iv) the InterOil Group can focus on its business mission of
exploring for, extracting and refining petroleum
products and investing in related infrastructure, in
Papua New Guinea; and
(v) the Shell Group can in Papua New Guinea focus on its
business mission and strengths relating to the marketing
and domestic distribution of refined petroleum products,
where it already has a substantial market presence.
IT IS AGREED as follows.
1. DEFINITIONS & INTERPRETATION
1.1 DEFINITIONS
The following definitions apply unless the context otherwise requires:
ACCEPTED NOMINATION means, in relation to a Nomination (including a
tentative Nomination) accepted in the Firm Program Confirmation relating
to the Delivery Period of that Nomination, the resulting binding
obligation of the:
(a) Purchaser to purchase; and
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(b) Refiner to supply, deliver and sell,
the Product or Products to which that Nomination relates in accordance
with the terms of this Agreement and the applicable Conditions of
Purchase.
AFFILIATE means:
(c) in relation to NV Koninklijke Nederlandsche Petroleum Maatschappij,
The Shell Transport and Trading Company plc and the Purchaser, means
each of them and any body corporate which is for the time being
directly or indirectly controlled by NV Koninklijke Nederlandsche
Petroleum Maatschappij and The Shell Transport and Trading Company
plc or either of them; and
(d) in relation to IOC, any body corporate which is for the time being
directly or indirectly controlled by IOC.
For this purpose:
(e) a company is directly controlled by another company beneficially
owning shares carrying more than 50 percent of the votes at a
general meeting of shareholders (or its equivalent) of the first
mentioned company; and
(f) a particular company is indirectly controlled by a company if a
series of companies can be specified, beginning with that company
and ending with the particular company, so related that each company
in the series is directly controlled by one or more of the companies
earlier in the series.
AUTHORITY means any government or any governmental, semi-governmental,
city, municipal, civic, administrative, fiscal, statutory or judicial
body, instrumentality, department, commission, authority, tribunal, agency
or other similar entity, including any self-regulatory organisation
established under statute and any stock exchange.
BUSINESS DAY means a day on which trading banks are open for the
transaction of banking business in Port Moresby, Papua New Guinea.
COMMENCEMENT DATE has the meaning given in Clause 1.4.
COMPLETION has the meaning given in the Purchase and Sale Agreement.
CONDITIONS OF PURCHASE means those additional terms of trade applicable to
a particular supply of Product made pursuant to this Agreement, being:
(a) in relation to supplies to be made at Wharf, the Conditions of
Purchase set out in Schedule 1; and
(b) in relation to supplies at Gantry, the Conditions of Purchase set
out in Schedule 2,
as varied from time to time by agreement between the Purchaser and the
Refiner.
CONTROLLER means, in relation to a person's property:
(a) a receiver or receiver and manager of that property; or
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(b) anyone else who (whether or not as agent for the person) is in
possession, or has control, of that property to enforce a Security
Interest.
COSTS AGREEMENT means the letter agreement exchanged prior to the date of
this Agreement between The Shell Company of Australia Limited and IOC.
DELIVERY PERIOD means the period of 1 Month that is 2 Months (Month x+2)
after the Month (Month x) in which Nominations are finally made and
accepted into the Firm Program relating to that period.
DOMESTIC DISTRIBUTOR means a person (other than the Purchaser) who
conducts or proposes to conduct a business in Papua New Guinea of
distributing Products for re-supply or sale within Papua New Guinea that
has the real and effective capacity and willingness to import Products to
a location or locations in Papua New Guinea.
DOMESTIC LEASE AGREEMENT means the domestic lease agreement dated on or
about the date of the Purchase and Sale Agreement between IDC and the
Purchaser.
FIRM PROGRAM means the program relating to the supply (including
scheduling of deliveries) of Product to be made by the Refinery to its
customers during a particular Delivery Period.
FIRM PROGRAM CONFIRMATION means the written confirmation of Nominations
accepted by the Refiner (whether notified by the Refiner or the Offtake
Coordinator) into the Firm Program for the Delivery Period to which those
Nominations relate.
FORCE MAJEURE means an event or cause beyond the reasonable control of the
party claiming force majeure which could not have been prevented, overcome
or remedied by the exercise by that party (or its agents, contractors or
subcontractors and persons under that party's control or direction) of a
standard of care and diligence consistent with that of a prudent and
competent person under the circumstances including, to that extent:
(a) act of God, lightning, storm, flood, fire, earthquake, explosion,
cyclone, tidal wave, perils of the sea, landslide or epidemic;
(b) war (declared or undeclared), hostilities, acts of the public enemy
or of belligerents, sabotage, blockade, revolution, insurrection,
riot or disorder and commotion, arrest or restraint of rulers or
peoples, civil and governmental frustration, expropriation,
requisition, confiscation or nationalisation;
(c) the effect of any applicable laws, orders, rules or regulations of
any government or other competent Authority;
(d) embargoes or export or import restrictions, substantial interference
by, or restrictions or onerous regulation imposed by civil or
military authorities, whether legal or de facto and whether
purporting to act under some constitution, decree, law or otherwise;
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(e) accidents of navigation, loss of tanker tonnage due to sinking by
belligerents or to governmental taking (whether or not by formal
requisition);
(f) accidents or mechanical failures;
(g) accidents to or closing of harbours, docks, canals, channels,
mooring points, or other assistance to or adjuncts of shipping or
navigation; or
(h) rationing or allocation imposed by applicable law, decree or
regulation.
GANTRY means the road tanker loading facility at the Refinery.
IDC means Shell Papua New Guinea Limited (proposed to be renamed InterOil
Distribution Company Limited), a corporation duly established and existing
under the laws of Papua New Guinea.
INTEROIL GROUP means IOC and its Affiliates.
IOC means InterOil Corporation, a corporation duly established and
existing under the laws of the province of New Brunswick, Canada.
IPP has the meaning given in the Project Agreement, as that agreement may
be varied or amended from time to time, and if any other price (or
mechanism for determining the price) of a Product is introduced from time
to time under or pursuant to the Project Agreement then IPP, in relation
to that Product, means that other price (or the price as so determined by
that other mechanism).
KINA or K means the lawful currency of Papua New Guinea.
LATEST NOMINATION DATE has the meaning given in Clause 7.1(d).
MONTH means a calendar month.
NOMINATION means an election by the Purchaser to purchase Product that is
made by notification in writing to the Refiner in accordance with Clause
7.1(g).
OFFTAKE COORDINATOR means an employee or agent of the Refiner, so
appointed by the Refiner.
PAPUA NEW GUINEA means the territory of The Independent State of Papua New
Guinea (including its territorial waters).
PLATT'S means the Singapore Product Postings located in the PLATT'S
Oilgram Price Report published by the Standard & Poor's Corporation (or,
if PLATT's no longer reports Singapore Product Postings, another price
reporting service agreed between the Independent State of Papua New Guinea
and the Refiner pursuant to the Project Agreement).
PRODUCT means:
(a) unleaded motor gasoline, dual purpose kerosene, kerosene/Jet-A1,
automotive diesel oil, gasoil, industrial diesel, industrial fuel
oil, liquid propane gas, residual fuel oil; and
(b) such other commercially viable products of the kind that the Refiner
may from time to time determine to produce,
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that is included in PLATT'S at the relevant time.
PRODUCT SUPPLY SPECIFICATION, in relation to a Product, means:
(a) the specification (including the testing methodology used in
relation to it) for that Product from time to time notified by
the Refiner to the Purchaser, provided that specification (and
the testing methodology used in relation to it) is in
accordance with the PLATT'S specification (including the
testing methodology used in relation to it) for that Product
and also fit for purpose by the users of that Product in Papua
New Guinea; or
(b) the specification (including the testing methodology used in
relation to it) for that Product otherwise agreed by the
Purchaser and the Refiner.
PROJECT AGREEMENT means the project agreement dated 29 May 1997
between The Independent State of Papua New Guinea, the Refiner and
EP InterOil, Limited, as varied by a letter dated 2 October 1998
from the Minister of Petroleum and Energy of the State to the
Refiner and as amended and extended by an extension deed dated 1
July 1999 between the State, the Refiner and EP InterOil, Limited.
PURCHASER MEANS:
(a) prior to novation under Clause 22.1, SPNG; and
(b) after novation under Clause 22.1, SOPL.
PURCHASE AND SALE AGREEMENT means the purchase and sale agreement
between Shell Overseas Holdings Limited and IOC for the purchase of
all the issued shares of SPNG by IOC or IOC's nominee.
QUARTER means a period of 3 months.
REFINERY means the refinery located at Napa Napa, Port Moresby,
National Capital District and Central Province, Papua New Guinea,
owned and/or operated by the Refiner.
SCHEDULED DATE FOR REFINERY COMPLETION means 31 December 2002.
SECURITY DEED means the security deed dated on or about the date of
the Purchase and Sale Agreement between, among others, the parties
to this Agreement.
SECURITY INTEREST means an interest or power:
(a) reserved in or over any interest in any asset including any
retention of title; or
(b) created or otherwise arising in or over any interest in any
asset under a bill of sale, mortgage, charge, lien, pledge,
trust or power,
by way of security for the payment of debt or any other monetary
obligation or the performance of any other obligation and whether
existing or agreed to be granted or created.
SHELL GROUP means NV Koninklijke Nederlandsche Petroleum
Maatschappij and The Shell Transport and Trading Company, plc and
their Affiliates.
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SOPL means:
(a) Shell Oil Products (PNG) Limited, a corporation to be duly
established under the laws of Papua New Guinea under that name or
such other name as to be determined by the Shell Group; or
(b) such other member of the Shell Group (not being SPNG) as notified to
the Refiner by SPNG before the Commencement Date.
SPNG means Shell Papua New Guinea Limited (proposed to be renamed InterOil
Distribution Company Limited), a corporation duly established and existing
under the laws of Papua New Guinea.
STATE means The Independent State of Papua New Guinea.
TANKER means a shipping tanker or vessel procured by the Purchaser or
another member of the Shell Group on to which Products are delivered by
the Refiner to the Purchaser under this Agreement.
TERMINATION DATE means the tenth anniversary of the Commencement Date, as
that date may be extended, if applicable, in accordance with the Security
Deed.
TRANSACTION DOCUMENTS has the meaning given in the Purchase and Sale
Agreement.
TRANSFER DATE has the meaning given in the Purchase and Sale Agreement.
UNCITRAL ARBITRATION RULES means the arbitration rules adopted by UNCITRAL
on 28 April 1976 and by the United Nations General Assembly on 15 December
1976 and entitled `Arbitration Rules of the United Nations Commission on
International Trade Law', as those rules may be amended from time to time.
WHARF means the facilities at the Refinery for securing Tankers and
loading those Tankers with Products.
1.2 INTERPRETATION
Headings are for convenience only and do not affect interpretation. The
following rules apply unless the context requires otherwise.
(a) The singular includes the plural and conversely.
(b) A gender includes all genders.
(c) If a word or phrase is defined, its other grammatical forms have a
corresponding meaning.
(d) A reference to a person, corporation, trust, partnership,
unincorporated body or other entity includes any of them.
(e) A reference to a Clause or Schedule is a reference to a clause of,
or a schedule to, this Agreement.
(f) A reference to an agreement or document (including, without
limitation, a reference to this Agreement) is to the agreement or
document as amended, varied, supplemented, novated or replaced
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except to the extent prohibited by this Agreement or that other
agreement or document.
(g) A reference to a party to this Agreement or another agreement or
document includes the party's successors and permitted substitutes
or assigns (and, where applicable, the party's legal personal
representatives).
(h) A reference to legislation or to a provision of legislation includes
a modification or re-enactment of it, a legislative provision
substituted for it and a regulation or statutory instrument issued
under it.
(i) A reference to conduct includes an omission, statement or
undertaking, whether or not in writing.
(j) A reference to an AGREEMENT includes any undertaking, deed,
agreement or legally enforceable arrangement, whether or not in
writing, and a reference to a document includes an agreement (as so
defined) in writing, or any certificate, notice, instrument or
document of any kind.
(k) The meaning of general words is not limited by specific words
introduced by INCLUDING, or FOR EXAMPLE, or similar expressions.
1.3 CONSENTS OR APPROVALS
If the doing of any act, matter or thing under this Agreement is dependent
on the consent or approval of a party or is within the discretion of a
party, the consent or approval may be given or the discretion may be
exercised conditionally or unconditionally or withheld by the party in its
absolute discretion unless express provision to the contrary has been made
in this Agreement.
1.4 COMMENCEMENT
Subject to Clause 22, this Agreement commences on the date (the
COMMENCEMENT DATE) which is the Transfer Date under the Purchase and Sale
Agreement.
1.5 RELATIONSHIP BETWEEN PARTIES
Except as and to the extent expressly provided in this Agreement or any
other Transaction Document, nothing in this Agreement or any other
Transaction Document (including any obligations to consult, communicate,
negotiate or otherwise in any way act in good faith) creates or will be
deemed to create between any of the parties any relationship of joint
venture, partnership, agency or any other fiduciary relationship of any
kind whatsoever.
2. AGREEMENT TO SUPPLY
(a) The Refiner will supply and the Purchaser will purchase Products on
the terms set out in this Agreement, for the purpose of re-supply or
sale by the Purchaser in Papua New Guinea.
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(b) The Refiner will supply Products for re-supply or sale or use in
Papua New Guinea only to the Purchaser and the Domestic Distributors
and not to any other person (including any member of the InterOil
Group).
(c) The Refiner will supply Products to any Domestic Distributor only:
(i) at the Refinery;
(ii) [deleted for confidentiality]; and
(iii) [deleted for confidentiality].
(iv) [deleted for confidentiality].
3. REFINER'S OBLIGATION TO SUPPLY PRODUCT TO PURCHASER
(a) If a Nomination (including a tentative Nomination) is made by the
Purchaser in accordance with Clause 7.1, subject to the Refiner
having sufficient quantity of Product at the applicable Product
Supply Specification to accommodate that Nomination in the Firm
Program of the Delivery Period relating to that Nomination, the
Refiner must:
(i) procure the Offtake Coordinator to accept that Nomination into
that Firm Program and ensure that the Purchaser is informed of
that acceptance in the Firm Program Confirmation relating to
that Delivery Period; and
(ii) satisfy the resulting Accepted Nomination within the time
specified in and otherwise in accordance with the terms
relating to, that Accepted Nomination, subject only to changes
made in accordance with the Conditions of Purchase or other
amendments agreed relating to that supply.
(b) [deleted for confidentiality].
4. PURCHASER'S OBLIGATION TO PURCHASE PRODUCT FROM THE REFINER
(a) Subject to paragraph (c), the Purchaser will source from the Refiner
all its requirements for each Product for the purposes of re-supply
or sale in Papua New Guinea to the extent the Refiner makes that
Product available to the Purchaser at the Product Supply
Specification and in accordance with the terms of this Agreement.
(b) Subject to paragraph (c), the Purchaser will not import any Product
unless:
(i) (and only to the extent) the Refiner does not make that
Product available to the Purchaser at the Product Supply
Specification and in the quantities required by the Purchaser;
(ii) the Purchaser has invited the Refiner to enter into
discussions to seek agreement on whether and the extent to
which importation of Products into Papua New Guinea is
necessary,
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which discussions the Purchaser and the Refiner must conduct
in good faith; and
(iii) the Purchaser has exercised its best endeavours to agree with
the Refiner:
(A) on co-operation between them in relation to the supply
of Products in Papua New Guinea; and
(B) the extent to which importation of Product is required
to meet the Purchaser's anticipated demand for Products
in Papua New Guinea.
(C) [deleted for confidentiality].
5. GENERAL CO-OPERATION REGARDING AVAILABILITY OF PRODUCT
5.1 REFINERY SHUT-IN
Without limiting Clause 3(b) the Refiner and the Purchaser will act in
good faith and cooperate with each other in relation to the supply of
Product in Papua New Guinea if, for any reason, at any time the Refinery
is not operating.
5.2 REGULAR COMMUNICATION
The Refiner and the Purchaser will maintain regular communication and keep
each other informed as fully as possible about all matters concerning the
requirements for and availability and scheduling of Products.
6. FORECASTING
For planning purposes only, on the last day of March, June, September and
December the Purchaser must provide the Refiner with a forecast of the
Purchaser's anticipated requirements for each Product it anticipates
purchasing from the Refiner during the subsequent 12 months. The forecast
must:
(a) be divided into estimates for supply at the Gantry and Wharf;
(b) forecast the anticipated requirements for each of the first 3 months
to which the report relates on a monthly basis (and where
Nominations and Accepted Nominations already exist in relation to
those requirements, indicate the parts of those requirements to be
met by those Nominations and Accepted Nominations); and
(c) forecast the anticipated requirements for the last 9 months to which
the Report relates as 3 quarter aggregates, each aggregate quarter
being forecast separately.
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7. NOMINATIONS
7.1 NOMINATION FOR PRODUCT SUPPLY AT THE GANTRY AND WHARF.
(a) If the Purchaser wishes to purchase Products under this Agreement,
those Products will be supplied by:
(i) the Purchaser making Nominations for such Products for the
relevant Delivery Periods in which it requires the supply of
those Products;
(ii) the Refiner electing to accept those Nominations into the Firm
Programs for those Delivery Periods; and
(iii) the Offtake Coordinator issuing Firm Program Confirmations for
the supply of those Products in those Delivery Periods,
in accordance with this Agreement so as to result in Accepted
Nominations for those Products, which Products must then be supplied
by the Refiner and taken by the Purchaser in accordance with, and
subject to, the terms of this Agreement and the applicable
Conditions of Purchase.
(b) To the extent that on the first day of each Month the Purchaser has
expected requirements for Products during the Delivery Period being
the Month that is 3 Months (Month x+2) after that Month (Month x-1),
the Purchaser must make tentative Nominations for those Products
(including the details referred to in paragraph (g)) on that day (or
if that day is not a Business Day, the prior Business Day). Such
tentative Nominations must be the best indication that the Purchaser
can provide of expected supplies of Product it believes it will
require from the Refinery in the relevant Delivery Period, to enable
the Refiner to identify stock issues and allow the Refiner advance
notice to formulate shipping and operational plans relating to the
Refinery.
(c) A Nomination relating to a supply of Product in a Delivery Period
may be made by the Purchaser at any time from the date tentative
Nominations are due under paragraph (b) until (and including) the
Latest Nomination Date for that Delivery Period.
(d) The Latest Nomination Date by which the Purchaser can make a
Nomination for a supply of Product in a Delivery Period will be the
5th day of the Month (Month x) that is 2 Months before the Month
(Month x+2)) of the relevant Delivery Period (or if that is not a
Business Day the prior Business Day) (the LATEST NOMINATION DATE).
(e) All Nominations (including tentative Nominations) made in relation
to a Delivery Period will be considered non-binding and subject to
withdrawal by the Purchaser until the first working day prior to the
Latest Nomination Date relating to that Delivery Period.
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(f) Any Nominations made on the Latest Nomination Date, or
tentative Nominations or Nominations not withdrawn by the
Purchaser before the Latest Nomination Date, may not be
modified or withdrawn on or after that Latest Nomination Date
relating to the Delivery Period for supplies requested under
those Nominations without the agreement of both the Refiner
and the Purchaser, but the Refiner will consult with the
Purchaser in good faith and reasonably consider a modification
or withdrawal of a Nomination to the extent necessary to
ensure that Nomination is capable of acceptance by the Offtake
Coordinator and inclusion in the Firm Program issued under
Clause 7.2(c).
(g) Each Nomination will be an offer (subject to withdrawal or
modification in accordance with paragraphs (e) and (f) and
acceptance by the Refiner in the Firm Program Confirmation
issued under Clause 7.3) in the form of an order for the
relevant Product or Products requested in that Nomination that
must include:
(i) for delivery at the Wharf:
(A) details of the Product or Products ordered under
that Nomination;
(B) the quantity or quantities of those Products
ordered; and
(C) a 7-day lifting window during which the requested
supply pursuant to the order must be made and
taken in accordance with (but subject to the
narrowing of that window and amendments to that
window under) the Conditions of Purchase; and
(ii) for delivery at the Gantry:
(A) details of the Product or Products ordered under
that Nomination;
(B) the aggregate quantity requirement for that
Product or those Products during the Delivery
Period to which the Nomination relates, which will
be an order for that quantity (or those
quantities) and which will, if accepted by the
Refiner, be the quantity (or quantities):
(1) supplied by the Refiner to the Purchaser;
and
(2) lifted by the Purchaser (pursuant to placing
an adequate number of purchase orders in
accordance with the Conditions of Purchase),
during that Delivery Period.
7.2 OFFTAKE CO-ORDINATOR AND FIRM PROGRAM
The Refiner will:
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(a) appoint an Offtake Coordinator to coordinate the Product related
supply activities of the Refiner;
(b) procure the Offtake Coordinator to coordinate the respective rights,
obligations and activities of the Refiner and the Purchase under or
in relation to this Agreement;
(c) procure the Offtake Coordinator to compile a Firm Program in time to
allow the issue of a Firm Program Confirmation pursuant to Clause
7.3(a);
(d) procure the Offtake Coordinator to provide the Purchaser on the last
day of each Month with full updated details of Firm Programs for
Delivery Periods in the following three Months, including details of
agreed revisions and confirmation of supplies to be made to the
Purchaser in accordance with Accepted Nominations and the scheduling
requirements of the Conditions of Purchase; and
(e) be responsible for all the activities and decisions of the Offtake
Coordinator.
7.3 FIRM PROGRAM CONFIRMATIONS AND ACCEPTED NOMINATIONS
(a) The Refiner must issue (or procure the Offtake Coordinator to issue
for the Refiner) a Firm Program Confirmation to the Purchaser on or
before the 15th day of each Month (or if that day is not a Business
Day or is a Saturday, Sunday or public holiday in Papua New Guinea,
the following Business Day) for the Delivery Period that is 2 months
(Month x+2) after the Month (Month x) in which that day falls.
(b) The Firm Program Confirmation issued under paragraph (a) will:
(i) with respect to those Nominations accepted into it be regarded
as acceptances by the Refiner of the offers made by the
Purchaser under Clause 7.1(g), including acceptance of the
order particulars in those nominations (as may have been
subject to modification in accordance with paragraph (f)); and
(ii) will be final and binding on the Refiner and the Purchaser,
pursuant to which the Nominations (including all terms of supply
relating to them) confirmed in that Firm Program Confirmation become
Accepted Nominations.
(c) The:
(i) Refiner must supply; and
(ii) Purchaser must take,
the Product or Products in each Accepted Nomination in accordance
with the terms and particulars (including those set out in Clause
7.1(g)) of the Nomination and Firm Program Confirmation that result
in that Accepted Nomination, subject to any adjustment of those
terms and particulars in accordance with the applicable Conditions
of Purchase or amendment by subsequent agreement.
PAGE 13
ARTHUR ROBINSON
Domestic Sales Agreement & HEDDERWICKS
8. PRODUCT PRICE
[deleted for confidentiality].
9. CONDITIONS OF PURCHASE APPLY
The Conditions of Purchase apply to all sales of Products by the Refiner
to the Purchaser under this Agreement. The terms of Clauses 1 to 26 of
this Agreement and any agreements or arrangements made pursuant to those
Clauses prevail over the Conditions of Purchase to the extent of any
inconsistency between this Agreement, or any agreements or arrangements
made pursuant to it, and the Conditions of Purchase.
10. TERMINATION
10.1 TERMINATION EVENTS
This Agreement terminates automatically, without any requirement of notice
to or from either party to the other:
(a) if the Purchase and Sale Agreement is terminated pursuant to Clauses
5.5 or 16 of that Agreement; or
(b) on the Termination Date.
10.2 TERMINATION BY NOTICE
The Refiner or the Purchaser (as applicable, the NON-DEFAULTING PARTY) may
terminate this Agreement by notice to the Purchaser or the Refiner (as
applicable, the OTHER PARTY), if:
(a) (i) the other party (the DEFAULTING PARTY) commits a material
breach of this Agreement; and
(ii) after the non-defaulting party has given notice to the
defaulting party specifying the breach and requesting that it
be remedied or that its consequence be overcome or compensated
for (which notice must be given within 6 months after the
non-defaulting party first becomes aware of that breach), the
defaulting party has failed to remedy that breach or to take
steps to overcome its consequences or to compensate for it
within 60 days (or such longer period as the non-defaulting
party and the defaulting party may agree) after receiving that
notice; or
(b) the other party:
(i) stops or suspends or threatens to stop or suspend payment of
all or a class of its debt;
(ii) is insolvent (within the meaning of any applicable law);
(iii) is held or must be presumed by a court to be insolvent;
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ARTHUR ROBINSON
Domestic Sales Agreement & HEDDERWICKS
(iv) fails to comply with a statutory demand (within the meaning of
any applicable law);
(v) has an administrator appointed over all or any of its assets
or undertaking;
(vi) has a Controller or similar officer appointed to all or any of
its assets or undertaking; or
(vii) has an order made or a resolution passed for its winding up,
deregistration or dissolution or for it to enter an
arrangement, compromise or composition with or assignment for
the benefit of its creditors, a class of them or any of them
(unless done for the purposes of solvent reconstruction).
10.3 EFFECT OF TERMINATION
Termination of this Agreement does not affect any accrued rights or
remedies of either party under or in relation to this Agreement.
10.4 SURVIVAL
Clauses 1 (other than 1.4), 10.3, 12, 15, 16 and this Clause 10.4 survive
the expiry or termination of this Agreement.
11. CHANGES TO THE PROJECT AGREEMENT
11.1 GENERAL CONSULTATION
If at any time the Refiner or the Purchaser is notified or becomes aware
of any proposal or circumstance that will or that reasonably it considers
will, lead to a variation or amendment of the Project Agreement and the
Refiner or the Purchaser, as applicable, (acting reasonably) considers
that such proposal or circumstance, or such variation or amendment, will
or may affect the Refiner's or the Purchaser's commercial, economic or
competitive position, the Refiner or the Purchaser, as applicable, must as
soon as reasonably practicable:
(a) notify the other of that proposal or circumstance when, in the
Refiner's or the Purchaser's, as applicable, reasonable opinion that
proposal or circumstance may have a material adverse effect on the
Refiner or the Purchaser, as applicable;
(b) consult with the Refiner or the Purchaser, as applicable, concerning
the terms of any variation or amendment; and
(c) cooperate with the other in good faith so that the Purchaser is able
to participate as fully as reasonably practicable with the Refiner
in determining an agreed approach to the contemplated variation or
amendment and to allow the Purchaser, the Refiner and IDC the
opportunity to negotiate and agree such changes to this Agreement,
the Domestic Sales Agreement, the Marketing Services Agreement and,
as applicable, any other Transaction Documents as they believe
necessary so that the Purchaser, the Refiner and IDC, respectively,
PAGE 15
ARTHUR ROBINSON
Domestic Sales Agreement & HEDDERWICKS
will each be put as closely as possible in the same relative
commercial, economic and competitive position upon the variation or
amendment to the Project Agreement as each would be in if that
variation or amendment did not take place.
11.2 CHANGES TO THE PROJECT AGREEMENT
If the Project Agreement expires or is terminated or if:
(a) a variation or amendment is made to the Project Agreement (or an
agreement or arrangement is made between any of the parties to the
Project Agreement that is equivalent, in its practical operation or
result, to a variation or amendment to the Project Agreement);
(b) the effect of that variation or amendment (or that agreement or
arrangement) is or would be to materially adversely affect the
commercial, economic or competitive position of the Purchaser under
this Agreement or any other Transaction Document; and
(c) within 60 days after that variation or amendment has been made (or
that agreement or arrangement has been entered into), the Purchaser
and the Refiner (and, as applicable, IDC or the parties to other
relevant Transaction Documents) have not agreed and implemented
such, changes to this Agreement (and any other relevant Transaction
Documents) as are necessary to avoid or overcome that material
adverse effect on the Purchaser's commercial, economic or
competitive position, so as to put the Purchaser as nearly as
practicable in the same commercial, economic and competitive
position under this Agreement and the other Transaction Documents as
it was in before that variation or amendment (or that agreement or
arrangement),
the Purchaser may terminate this Agreement by 60 days' notice to the
Refiner.
12. CONFIDENTIALITY
12.1 NO DISCLOSURE
No party may make any disclosure or public announcement in relation to the
terms or conditions of this Agreement or the transactions contemplated by
it without the prior consent of the other parties.
12.2 PERMITTED DISCLOSURES
Clause 12.1 does not apply to disclosure:
(a) to the extent required in any proceedings arising out of or in
connection with any Transaction Document;
(b) to the extent required under a binding order of a court or any
procedure for discovery in any proceedings;
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ARTHUR ROBINSON
Domestic Sales Agreement & HEDDERWICKS
(c) to the extent required under any law or any rules of any applicable
securities exchange or stock exchange;
(d) as required or permitted under any Transaction Documents;
(e) to legal advisors and consultants, who undertake to keep the
information confidential;
(f) to a bank or financial institution, provided that bank or financial
institution undertakes to keep the information confidential and to
use it only for bona fide purposes related to the actual or proposed
provision of financial accommodation to a member or members of the
InterOil Group (other than IDC) or a member or members of the Shell
Group;
(g) to any Affiliate; or
(h) to the extent information is already in the public domain (other
than as a result of a breach of Clause 12.1).
Each party agrees to consult with each other, so far as it is reasonably
practicable to do so, before making any disclosure pursuant to this
Clause.
13. COSTS AND EXPENSES
(a) Each party must bear its own costs arising out of the negotiation,
preparation and execution of this Agreement except to the extent
otherwise provided in the Costs Agreement.
(a) All stamp duty and registration fees (including fines, penalties and
interest) which may be payable on or in connection with this
Agreement and any instrument executed under this Agreement must be
borne equally by the Refiner and the Purchaser.
14. REPRESENTATIONS AND WARRANTIES
Each party represents and warrants to the other that each of the following
statements is true and correct and will be true and correct on the
Commencement Date:
(a) It is a corporation duly incorporated and validly existing under the
laws of the place of its incorporation.
(b) It has the power to enter into and perform its obligations under
this Agreement, to carry out the transactions contemplated by this
Agreement and to carry on its business as now conducted or
contemplated.
(c) It has taken all necessary corporate action to authorise the entry
into and performance of this Agreement and to carry out the
transactions contemplated by this Agreement.
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ARTHUR ROBINSON
Domestic Sales Agreement & HEDDERWICKS
(d) This Agreement constitutes its valid and binding obligation
enforceable in accordance with its terms, subject to any necessary
stamping and registration.
(e) The execution and performance by it of this Agreement and each
transaction contemplated under this Agreement do not and will not
violate in any respect a provision of:
(i) a law or treaty or a judgment, ruling, order or decree of a
government or Authority binding on it;
(ii) its constituent documents; or
(iii) any other document or agreement which is binding on it or its
assets.
15. NOTICES
Any notice, demand, consent or other communication (a NOTICE) given or
made under this Agreement:
(a) must be in writing and signed by a person duly authorised by the
sender;
(b) must be delivered to the intended recipient by prepaid post (if
posted to an address in another country, by registered airmail) or
by hand or fax to the address or fax number below or the address or
fax number last notified by the intended recipient to the sender:
(i) to the Refiner: Level 6
Defens Haus
Cnr Hunter Street and Champion Parade
Port Moresby
Papua New Guinea
Attention: Managing Director
Fax No: +675 320 2601;
(ii) to the Purchaser: Level 10
Pacific Place
Cnr Musgrave Street and Champion Parade
Port Moresby
Papua New Guinea
Attention: Company Secretary
Fax No: +675 321 1842; and
PAGE 18
ARTHUR ROBINSON
Domestic Sales Agreement & HEDDERWICKS
Copy to:
Shell Oil Products East
Shell House
UE Square
83 Clemenceau Avenue
Singapore 239920
Attention: Vice President, Finance
Fax No: +65 384 8204; and
(c) will be taken to be duly given or made:
(i) in the case of delivery in person, when delivered;
(ii) in the case of delivery by post 2 Business Days after the date
of posting (if posted to an address in the same country) or 7
Business Days after the date of posting (if posted to an
address in another country);
(iii) in the case of fax, on receipt by the sender of a transmission
control report from the despatching machine showing the
relevant number of pages and the correct destination fax
machine number and indicating that the transmission had been
made without error,
but if the result is that a Notice would be taken to be given or
made on a day which is not a business day in the place to which the
Notice is sent or is later than 4.00pm (local time) it will be taken
to have been duly given or made at the commencement of business on
the next business day in that place.
16. GOVERNING LAW
This Agreement is governed by the law of Papua New Guinea. Each party
submits to the exclusive jurisdiction of courts exercising jurisdiction in
Victoria, Australia in connection with matters concerning this Agreement.
17. FORCE MAJEURE
17.1 EVENT OF FORCE MAJEURE
If a party is prevented in whole or in part from carrying out its
obligations under this Agreement (other than an obligation to pay money)
as a result of Force Majeure, it must promptly notify the other party
accordingly. The notice must:
(a) specify the obligations it cannot perform;
(b) fully describe the event of Force Majeure;
(c) estimate the time during which the Force Majeure will continue; and
PAGE 19
ARTHUR ROBINSON
Domestic Sales Agreement & HEDDERWICKS
(d) specify the measures proposed to be adopted to remedy or abate the
Force Majeure.
Following this notice, and while the Force Majeure continues, the
obligations which cannot be performed (other than an obligation to pay
money) because of the Force Majeure will be suspended.
17.2 REMEDY OF FORCE MAJEURE
The party that is prevented from carrying out its obligations under this
Agreement as a result of Force Majeure must
(a) remedy the Force Majeure to the extent reasonably practicable and
resume performance of its obligations as soon as reasonably
possible;
(b) notify the other Party when the Force Majeure has terminated or
abated to an extent which will permit resumption of performance of
those obligations to occur; and
(c) notify the other Party when resumption of performance of those
obligations has occurred,
provided that no party will, by virtue of this Clause 17, be required
against the will of that Party to adjust or settle any strike, lockout or
other labour dispute.
17.3 MITIGATION
The party that is prevented from carrying out its obligations under this
Agreement as a result of Force Majeure must take all action reasonably
practicable to mitigate any loss suffered by any other party as a result
of its inability to carry out its obligations under this Agreement.
18. ENUREMENT
The provisions of this Agreement will enure for the benefit of and be
binding on the parties and their respective successors and permitted
substitutes and assigns and (where applicable) legal personal
representatives.
19. DISPUTES
(a) Each party acknowledges that the parties may agree on an alternative
method of resolving a dispute or difference in connection with this
Agreement to replace the provisions of this Clause 19 to the extent
so agreed, including by way of agreement on the appointment of
technical experts to make finally binding determinations about
technical matters in relation to issues arising under the Conditions
of Purchase.
(b) Any dispute or difference arising in connection with this Agreement
will be submitted by the parties to that dispute to arbitration in a
location agreed between the parties to that dispute (or failing such
agreement will be submitted to arbitration in Singapore) in
accordance with, and subject to, the UNCITRAL Arbitration Rules.
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ARTHUR ROBINSON
Domestic Sales Agreement & HEDDERWICKS
(c) Subject to any contrary provision in the UNCITRAL Arbitration Rules:
(i) there must be 3 arbitrators, being one arbitrator appointed by
the Purchaser, one arbitrator appointed by the Refiner, and
one arbitrator appointed independently by, and in accordance
with, the rules of the relevant appointing and administering
body;
(ii) all 3 arbitrators must be present when a decision of the
arbitrators is made and any decision supported by at least 2
of the 3 arbitrators will be final and binding on the parties
to that dispute; and
(iii) the language of the arbitration must be in English.
(d) A party may commence proceedings or take any action it deems
necessary in any jurisdiction (except in any State or territory of
the United States of America) to enforce a decision of the
arbitrators, whether pursuant to:
(i) the general law or legislation of that jurisdiction;
(ii) the New York Convention on the Recognition and Enforcement of
Foreign Arbitral Awards 1958; or
(iii) any other treaty making such enforcement possible.
20. MERGER
The rights and obligations of the parties will not merge on the completion
of any transaction contemplated by this Agreement. They will survive the
execution and delivery of any assignment or other document entered into
for the purpose of implementing any such transaction.
21. ASSIGNMENT
(a) Subject to the Security Deed, the rights and obligations of each
party under this Agreement are personal and cannot be assigned,
encumbered or otherwise dealt with and neither party may attempt, or
purport, to do so without the prior written consent of the other
party.
(b) Nothing in paragraph (a) prohibits or restricts the Refiner granting
any Security Interest over all or any part of its assets or
undertaking in favour of any member of the Shell Group.
PAGE 21
ARTHUR ROBINSON
Domestic Sales Agreement & HEDDERWICKS
22. AGREEMENT CONDITIONAL ON NOVATION
22.1 OBLIGATION TO ASSIGN
Before Completion occurs under the Purchase and Sale Agreement, Shell
Papua New Guinea Limited and the Refiner must novate this Agreement to
SOPL in the form of the Deed of Novation set out in Schedule 3.
22.2 CONDITION PRECEDENT
This Agreement, except for Clauses 1, 12, 15, 16 and this Clause 22, is
conditional on and is not intended to create legally binding rights or
obligations until immediately after the last to occur of:
(a) this Agreement being novated to SOPL in accordance with Clause 22.1;
(b) satisfaction or waiver of each condition precedent set out in Clause
10.1 of the Purchase and Sale Agreement; and
(c) Completion having occurred under the Purchase and Sale Agreement.
23. FURTHER ASSURANCES
Each party agrees to do all such things and execute all such deeds,
instruments, transfers or other documents as may be necessary or desirable
to give full effect to the provisions of this Agreement and the
transactions contemplated by it.
24. PRIOR AGREEMENTS
This Agreement supersedes all prior agreements and understandings between
the parties in connection with it.
25. WAIVER
No failure to exercise nor any delay in exercising any right, power or
remedy by a party operates as a waiver. A single or partial exercise of
any right, power or remedy does not preclude any other or further exercise
of that or any other right, power or remedy. A waiver is not valid or
binding on the party granting that waiver unless made in writing.
26. COUNTERPARTS
This Agreement may be executed in any number of counterparts. All
counterparts will be taken to constitute one instrument.
PAGE 22
Domestic Sales Agreement
(SCHEDULE 1 - CONDITIONS OF PURCHASE FOR A SUPPLY OF ARTHUR ROBINSON
PRODUCT AT WHARF) & HEDDERWICKS
SCHEDULE 1
CONDITIONS OF PURCHASE FOR A SUPPLY OF PRODUCT AT WHARF
1. DEFINITIONS
In addition to the definitions in Clause 1 of the Agreement, the following
definitions apply in this Schedule unless the context otherwise requires.
ACCEPTED QUANTITY has the meaning given in Condition 7.1(g).
AGREEMENT means the Domestic Sales Agreement to which these Conditions of
Purchase are attached.
ALDR-3 has the meaning given in Condition 6.1(f).
ALDR-5 has the meaning given in Condition 6.1(e).
ALDR-7 has the meaning given in Condition 6.1(d).
ALLOWED LAYTIME means the period described in Condition 8.2.
BARREL means a volume of 42 US standard gallons at 60(degree)F.
BILL OF LADING means a full set of clean original bills of lading in the
form requested by the Purchaser, issued by the Refiner for the Product
loaded into the relevant Tanker as proof of delivery of the Product.
BILL OF LADING DATE has the meaning given in Condition 5.1.
DELIVERY POINT means the point at which the Product passes the loading
hose flange on the manifold of the Tanker at the Moorings.
ETA means estimated time of arrival.
FACILITY REGULATIONS means appropriate guidelines relating to the Wharf
issued by the Refiner to the Purchaser before the commencement of supply
of Products from the Refiner to the Purchaser under the Agreement.
FOB means Free on Board as defined in Incoterms 2000.
GROSS NEGLIGENCE means any act or omission done or omitted to be done:
(a) intentionally; or
(b) with reckless disregard for any damage or loss that such action or
omission:
(i) causes or may cause; or
(ii) could have been reasonably foreseen to be caused.
INCOTERMS 2000 means the publication titled Incoterms 2000 published by
the International Chamber of Commerce (as may be revised or replaced by
the International Chamber of Commerce from time to time).
TANK TOPS means, in relation to storage tanks in which the Refiner can
store Products at or near the Refinery, provided that there are an
adequate number
PAGE 23
Domestic Sales Agreement
(SCHEDULE 1 - CONDITIONS OF PURCHASE FOR A SUPPLY OF ARTHUR ROBINSON
PRODUCT AT WHARF) & HEDDERWICKS
of such storage tanks having adequate capacity to store Products in
accordance with the usual activities and usual levels of production of the
Refinery and that all such storage tanks are used except to the extent
technical limitations exist in relation to the storage of like or
compatible Products, when the normal upper operating limits of all those
storage tanks are exceeded.
TONNES means metric tonnes.
MOORINGS means the facilities for mooring Tankers at the Wharf where
Product is supplied to the Delivery Point.
NOMINATED QUANTITY means the quantity of Product requested by the
Purchaser in a Nomination.
NOR means the notice of readiness given to the Refiner by the master of
the Tanker that the Tanker has arrived at the anchorage designated by the
Refiner and is ready in all respects to enter the Moorings and that the
Tanker has received all clearances required by applicable laws or
regulations including, without limitation on the foregoing, clearances
from Customs and Health Authorities.
PORT REGULATIONS means applicable legislation issued by a relevant
Authority relating to the Port Moresby Harbour.
PRODUCT DELIVERY means the supply of Product through the Delivery Point.
REVISED PAYMENT DATE has the meaning given in Condition 6.3.
TANKER OWNER means any or all of the owner, disponent owner, charterer or
operator of the Tanker.
TREASURY BILL RATE means the most recent, short dated treasury bill rate
published by the Central Bank of Papua New Guinea.
2. GENERAL CONDITIONS
(a) In relation to a supply of Product made, that Product will be
supplied and delivered by the Refiner and purchased and taken by the
Purchaser in accordance with the Agreement and these Conditions of
Purchase, except that to the extent terms of a supply are
inconsistent or lacking the following order of priority will apply
to determine the terms of the supply:
(i) where the parties specifically intend to derogate from terms
and conditions determined under the Agreement, as may be
agreed between the parties in writing in respect of that
supply;
(ii) in accordance with the Agreement;
(iii) in accordance with the conditions set out in this Schedule;
and
(iv) in accordance with Incoterms 2000.
(b) References to the Refiner in these Conditions of Purchase include
references to the Refiner's duly appointed representative or agent.
PAGE 24
Domestic Sales Agreement
(SCHEDULE 1 - CONDITIONS OF PURCHASE FOR A SUPPLY OF ARTHUR ROBINSON
PRODUCT AT WHARF) & HEDDERWICKS
3. CARGO QUANTITY
Except as otherwise agreed, the aggregate quantity of Products required to
be delivered by the Refiner to the Purchaser during the loading of a
Tanker must be such that not less than 4000 tonnes of Products will be
loaded on to that Tanker by the Refiner during that loading.
4. DELIVERY, TITLE AND RISK
4.1 DELIVERY
The Refiner will supply and the Purchaser will receive each lifting of
Product FOB Napa Napa, Port Moresby, National Capital District and Central
Province, Papua New Guinea for supply at the Wharf. 4.2 TITLE
All title, risk and property in respect of each delivery of Product
hereunder will pass from the Refiner to the Purchaser at the Delivery
Point.
4.3 WARRANTY OF TITLE
The Refiner hereby irrevocably undertakes and warrants that the Refiner
has at all times, including but not limited to the time of delivery of the
Product and cargo (and the passing of their risk and property) in
accordance with the Agreement herein, full, unencumbered and indefeasible
title to the Product and cargo delivered to the Purchaser under the
Agreement and further has the full right and authority to transfer title
to such Product and cargo and to effect delivery of that Product and Cargo
to the Purchaser.
5. BILL OF LADING
5.1 PROVISION OF BILL OF LADING
On the day on which the Product Delivery of Product(s) to the Tanker is
complete pursuant to the relevant Accepted Nomination and the Refiner's
loading hose is disconnected from the Delivery Point (the BILL OF LADING
DATE) the Refiner must issue a Bill of Lading relating to that supply to
the Purchaser.
5.2 INADEQUATE BILL OF LADING
When the Purchaser does not receive a Bill of Lading or receives any
inaccurate or inadequate Bill of Lading, the Refiner:
(a) re-affirms the warranties contained in Condition 4.3;
(b) irrevocably and unconditionally indemnifies the Purchaser on demand
and holds the Purchaser harmless against any claim made against the
Purchaser by any person as a result of breach by the Refiner of any
of the warranties set out in Condition 4.3, and all loss, costs
(including,
PAGE 25
Domestic Sales Agreement
(SCHEDULE 1 - CONDITIONS OF PURCHASE FOR A SUPPLY OF ARTHUR ROBINSON
PRODUCT AT WHARF) & HEDDERWICKS
but not limited to legal costs), damages, and expenses which the
Purchaser may suffer, incur or be put to as a result of the
Refiner's failure to deliver the Bill of Lading in accordance with
the Agreement and the Conditions of Purchase; and
(c) must on the Bill of Lading Date issue the Purchaser with a letter of
indemnity in the form set out in Appendix "A" to this Schedule.
The indemnity contained in Condition 5.2(b) will terminate upon delivery
to and acceptance by the Purchaser of an accurate and adequate Bill of
Lading.
6. PAYMENT TERMS
6.1 INVOICE FOR SUPPLY
The Refiner must provide to the Purchaser:
(a) Promptly after the Bill of Lading Date, the Refiner's invoice for a
completed Product Delivery together with such documents reasonably
requested by the Purchaser for each cargo of Product supplied to the
Tanker, including the Bill of Lading (if not previously issued under
Condition 5.1), certificate of origin, and certificate of quality
and quantity.
(b) The invoice issued under paragraph (a) must correctly state:
(i) the total quantity of Product or Products supplied to the
Purchaser;
(ii) the total sum claimed to be due and owing to the Refiner, in
Kina; and
(iii) the Refiner's bank account details.
6.2 TIME AND METHOD OF PAYMENT
(a) Subject to the other provisions of this Condition 6.2, the Purchaser
must make payment in Kina by telegraphic transfer to the Refiner's
bank and to the account as directed in the Refiner's invoice free of
all charges and without set off, discount, deduction or
counter-claim:
(i) not later than 20 calendar days after the Bill of Lading Date
(where the Bill of Lading Date will count as day zero); or
(ii) if another date is specified in the invoice, on the date
specified in the invoice (subject to that date being not
earlier than 20 calendar days after the Bill of Lading Date
where the Bill of Lading Date will count as day zero, unless
Condition 6.3 applies).
(b) Payments that fall due on a Sunday or Monday bank holiday in Papua
New Guinea will be made on the following Business Day. Payments that
fall due on a Saturday or any other bank holiday, except one falling
on a Monday, in Papua New Guinea will be made on the preceding
Business Day.
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Domestic Sales Agreement
(SCHEDULE 1 - CONDITIONS OF PURCHASE FOR A SUPPLY OF ARTHUR ROBINSON
PRODUCT AT WHARF) & HEDDERWICKS
(c) All bank charges incurred at the Refiner's bank will be for the
Refiner's account. All bank charges incurred at the Purchaser's bank
will be for the Purchaser's account.
(d) The Refiner will use reasonable endeavours to ensure that all
documents required (including those under Condition 6.1(a)) and
information reasonably requested by the Purchaser to enable the
Purchaser to make payment are sent to the Purchaser no later than 3
Business Days prior to the date payment is due, failing which the
Purchaser is not obliged to make payment on the due date but must
make payment 3 Business Days after the receipt of such requisite
documents or information by the Purchaser.
6.3 EARLY PAYMENTS REQUESTED BY THE REFINER
(a) The Refiner may, upon giving written notice to the Purchaser and
subject to the Purchaser's consent, prior to a shipment's Bill of
Lading Date, request payment in relation to that shipment to be made
on a specified date earlier than 20 days after the Bill of Lading
Date as specified in Condition 6.2 (but no earlier than 5 days after
the Bill of Lading Date) (the REVISED PAYMENT DATE).
(b) The Refiner must pay early payment interest to the Purchaser on the
amount paid by the Purchaser pursuant to paragraph (a) for the
period from (and including) the Revised Payment Date to (and
including) the day 20 days after the Bill of Lading Date at Treasury
Bill Rate plus 2% per annum calculated on a daily basis until and
including the day of payment and set-off against the amount due.
6.4 INTEREST ON LATE PAYMENTS
If a payment or part of a payment is not made by the Purchaser in
accordance with these Conditions of Purchase when due, then interest will
be paid on that amount due to the extent it remains outstanding from the
date that payment was due until the date of payment at Treasury Bill Rate
plus 2% per annum, calculated on a daily basis from the date due until and
including the day of payment of that outstanding amount. If payment of
amounts due from the Purchaser can be made by way of set-off against
amounts due from the Refiner to the Purchaser, payment must be so made to
the extent possible to reduce the Purchaser's liability to pay interest
under this Condition.
6.5 CREDIT TERMS
The Refiner may request appropriate credit terms on sales made under the
Agreement, upon which the parties will agree on appropriate credit terms.
7. SCHEDULING, TANKER NOMINATION AND LOADING AT THE WHARF
7.1 NOMINATION PROCEDURES - DATE RANGES AND QUANTITIES
(a) For a supply of Product under these Conditions of Purchase, the
Nomination to which that supply relates is made by the Purchaser
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Domestic Sales Agreement
(SCHEDULE 1 - CONDITIONS OF PURCHASE FOR A SUPPLY OF ARTHUR ROBINSON
PRODUCT AT WHARF) & HEDDERWICKS
under Clause 7.1(f) of the Agreement and becomes an Accepted
Nomination pursuant to Clause 7.3(b) of the Agreement.
(b) On or before the 30th day prior to the start of the 7 day window for
supply in the Delivery Period of the Accepted Nomination, the
Refiner will procure the Offtake Coordinator to define and issue to
the Purchaser a status report, based on latest information available
to the Refiner, regarding the capacity of the Refiner to supply that
Product during the 7 day window in accordance with the terms of the
Accepted Nomination.
(c) Upon receipt of the status report under paragraph (b), the Purchaser
may:
(i) accept requested amendments to the Accepted Nomination that
are advised by the Offtake Coordinator in that report;
(ii) request the Refiner to enter into consultations to be
conducted in good faith by both parties to agree on
alternative amendments to the Accepted Nomination; or
(iii) if no agreement can be reached between the Parties under
subparagraph (ii) then:
(A) the Purchaser is obliged to accept the 7 day window
advised by the Offtake Coordinator provided it is more
than 30 days until the commencement of that window and
within 3 days of the original 7 day window; or
(B) if subparagraph (A) does not apply, the Purchaser may
despite the terms of the Agreement or these Conditions
of Purchase withdraw its Nomination for the relevant
supply upon which the Accepted Nomination and all rights
and obligations of the parties pursuant to that Accepted
Nomination will become void without consequence.
(d) The 7 day window of the Accepted Nomination (whether as originally
agreed or as amended pursuant to Condition 7.1(c)) will be referred
to as the accepted 7 day loading date range (ALDR-7)
(e) No later than 25 days prior to the first day of the ALDR-7:
(i) the Refiner will be obliged to narrow this range to a five-day
loading window which (unless Parties mutually agree otherwise)
must fall fully within the ALDR-7 and such 5 day date range
will be referred to as the accepted 5 day loading date range
(ALDR-5); and
(ii) the Purchaser may renominate the quantity to be lifted within
a 10% tolerance of the Accepted Quantity, provided:
(A) that the Refiner is capable of supplying that amended
quantity; and
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Domestic Sales Agreement
(SCHEDULE 1 - CONDITIONS OF PURCHASE FOR A SUPPLY OF ARTHUR ROBINSON
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(B) such quantity changes are accompanied by adjustments to
the timing of subsequent loading date ranges as may be
necessary (and any such adjustments will be agreed
between the parties and confirmed in writing by the
Refiner).
(f) No later than 20 days prior to the first day of the ALDR-5, the
Refiner will further narrow this range to a three-day loading
window, which will be referred to as the final accepted 3 day
loading date range or `stem' (ALDR-3). The ALDR-3 must fall fully
within the previously advised ALDR-5 range (unless the Parties
mutually agree otherwise) and will be final and binding on both
parties.
(g) The quantity of each Product to be supplied to the Tanker during an
ALDR-3 will be the respective quantity of that Product ordered by
the Purchaser in relation to that delivery (as accepted into the
relevant Accepted Nomination by the Refiner, subject to amendments
under paragraph (c) and subparagraph (e)(ii) and agreed changes made
in respect of that delivery), allowing for an adjustment of that
quantity to be made at the time of that delivery of up to plus or
minus 5% for operational reasons (the ACCEPTED QUANTITY).
7.2 NOMINATION AND VERIFICATION OF TANKER
(a) Once ALDR-3 becomes effective under Condition 7.1(f) the procedures
under this Clause will come into operation.
(b) No later than 15 days before the first day of ALDR-3 the Purchaser
will nominate to the Refiner the Tanker to be used by the Purchaser
for the Product Delivery.
(c) Within 24 hours of receiving such nomination the Refiner will advise
the Purchaser, of the Refiner's acceptance or rejection of the
Tanker nomination, and any rejection may only be based on the
reasonably substantiated claim that the Tanker is unable to comply
with Port Regulations and Facility Regulations.
(d) The Purchaser will ensure that all Tankers nominated, and each
Tanker arriving at the Moorings for loading, will comply with the
specifications set out in the Port Regulations and Facility
Regulations.
(e) Without limitation to the Purchaser's obligations pursuant to
Condition (d), the Purchaser will provide to the Refiner appropriate
documentation to enable the Refiner to verify compliance with the
Port Regulations and Facility Regulations at the time of Nomination
of the Tanker provided that if the Purchaser is not able to supply
such documentation, the Purchaser will at the time of confirmation
provide a notice of compliance to the Refiner, in a form acceptable
to the Refiner, which acceptance will not be unreasonably withheld.
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Domestic Sales Agreement
(SCHEDULE 1 - CONDITIONS OF PURCHASE FOR A SUPPLY OF ARTHUR ROBINSON
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7.3 TANKER SUBSTITUTION
No later than 3 working days prior to the first day of ALDR-3 the
Purchaser may nominate a substitute Tanker which meets all the
requirements of the Port Regulations and Facility Regulations, and the
Refiner will advise of acceptance or rejection of that Tanker within 24
hours of receiving such nomination from the Purchaser.
7.4 TANKER ARRIVAL
(a) The Purchaser will arrange for the Tanker to give notices of its
estimated time of arrival 7 days, 48 hours and 24 hours prior to ETA
at the Port of Loading.
(b) The Purchaser will use reasonable endeavours to present its Tanker
for loading at the Moorings within the ALDR-3.
(c) If, due to an event of Force Majeure, the Tanker is not presented at
the Moorings within ALDR-3 ready to receive the Accepted Quantity of
Product or is so presented but ceases to be able to lift the
Accepted Quantity then without prejudice to the rights and
obligations of the parties under the Agreement and these Conditions
of Purchase the Parties will negotiate in good faith to try to agree
on alternative arrangements.
7.5 NON-COMPLIANCE WITH TANKER SPECIFICATIONS
Despite Condition 7.2(e), the Refiner will not be obliged to load any
Tanker that does not comply with the specifications of the Port
Regulations. In addition, and without liability, the Purchaser will
provide access and other assistance to enable the Refiner to inspect the
Tanker and any relevant documentation upon its arrival at the Moorings to
ensure the Tanker complies with any Port Regulations.
8. BERTH AND LOADING
8.1 SAFE BERTH
The Refiner will provide, or cause to be provided to the Purchaser a safe
and suitable berth at the Wharf.
8.2 ALLOWED LAYTIME
(a) The Purchaser will be allowed 36 hours, Sundays and public holidays
included, as laytime within which to load the Accepted Quantity
(Allowed Laytime).
(b) Should the vessel be loaded for the account of 2 or more purchasers,
the Refiner will be liable only for its pro rata share of demurrage
incurred at the Wharf based on the gross volume of cargo loaded for
the Purchaser's account as a percentage of total gross cargo loaded.
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Domestic Sales Agreement
(SCHEDULE 1 - CONDITIONS OF PURCHASE FOR A SUPPLY OF ARTHUR ROBINSON
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8.3 COMMENCEMENT OF LAYTIME OR DEMURRAGE
(a) If the Tanker arrives during ALDR-3, laytime (or time on demurrage
if applicable) will commence upon arrival in berth or when six (6)
hours has expired following tendering of a NOR, whichever occurs
first. Arrival in berth will mean the Tanker being all fast
alongside the Wharf.
(b) If the Tanker arrives before the first day of the ALDR-3 and tenders
an NOR before such date, laytime (or time on demurrage if
applicable) will not commence until the Tanker is all fast in its
berth at the Wharf or at 0600 hours local time on the first day of
the ALDR-3 whichever is earlier; and
(c) if the Tanker arrives after the end of the ALDR-3, laytime (or time
on demurrage) will commence upon arrival, all fast in its berth.
Laytime or, if the Tanker is on demurrage, time on demurrage, will
continue until all cargo hoses have been disconnected upon final
termination of loading.
8.4 LAYTIME AND DEMURRAGE EXCLUSIONS.
Any delay or time consumed due to any of the following will not count as
laytime or, if the Tanker is on demurrage, as time on demurrage.
(a) The Tanker is on an inward passage moving from anchorage or other
waiting place, including but not limited to awaiting daylight, tide,
tugs or pilot from the time Tanker weighs anchor until Tanker is all
fast in berth.
(b) The Purchaser fails to give 48 hours or 24 hours notice of ETA
pursuant to Condition 7.4(a).
(c) The effect of local law regulations or intervention by local
authorities including awaiting customs and immigration clearance,
health clearance and pratique.
(d) The Tanker Owner or Tanker operator or an Authority prohibiting
loading at night.
(e) Any deballasting or handling of slops, cleaning of tanks, pumps,
pipelines, bunkering, or for any other purposes of the Tanker only,
unless same is carried out concurrent with loading of Product such
that no loss of time is involved.
(f) Adverse weather and/or sea conditions that do not allow for the
mooring of the Tanker all fast in berth.
(g) An objectively ascertainable event of Force Majeure.
(h) Overflow, breakdown, inefficiency, repairs or other conditions
whatsoever attributable to the vessel, such that the Tanker is
unable to receive the shipment at a rate consistent with being able
to expeditiously receive a supply of Product, in accordance with the
loading capability of the relevant Tanker.
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Domestic Sales Agreement
(SCHEDULE 1 - CONDITIONS OF PURCHASE FOR A SUPPLY OF ARTHUR ROBINSON
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(i) The Tanker being in breach of Port Regulations and Facility
Regulations.
(j) Vessel fire or explosion, labour dispute, strike , go slow, work to
rule, lock-out, stoppage or restraint of labour involving the
master, officers or crew of the Tanker or tug boat or pilot.
(k) Awaiting cargo documentation instructions from the Purchaser.
(l) Delay in or suspension of loading directed by the Refiner due to an
unsafe condition of the Tanker.
(m) Any other delay sought or caused solely by the Purchaser, Tanker
Owner or Tanker operator for Tanker purpose.
(n) Escape or discharge of fuel or product, containment or clean-up of
fuel or Product spill or grave and imminent danger of the same which
creates or would create a serious pollution damage on or from the
Tanker.
(o) Quarantine, unless such quarantine was in force at the time when
such port was nominated by the Purchaser to the Tanker Owner or
operator.
8.5 LAYTIME AND DEMURRAGE INCLUSIONS
Time spent or lost due to any of the following will count as laytime, or
if the Tanker is on demurrage, as time on demurrage:
(a) any delay to the Tanker after the expiration of six (6) hours from
NOR before arrival in berth or any delay to the Tanker after arrival
in berth due to fire, explosion, strike, lock-out or stoppage of
labour, breakdown of machinery or equipment in or about the Refinery
or unavailability of cargo or unavailability of berth unless Force
Majeure is declared by the Refiner in accordance with Clause 18 of
the Agreement; or
(b) due to any other delay that is not caused solely by the Purchaser.
8.6 LAYTIME AND DEMURRAGE INCLUSIONS AT HALF RATE.
Any delays not referred to in Conditions 8.4 and 8.5 for which laytime or
demurrage consequences are not allocated in the Agreement, will count as
laytime or, if the Tanker is on demurrage, as time on demurrage. If such
demurrage is incurred, Refiner will pay demurrage at half the rate
specified in Condition 8.7.
8.7 DEMURRAGE
(a) The Refiner will be liable for demurrage costs for time on demurrage
to the extent that the time period between commencement and
termination of laytime, or if the vessel is on demurrage, time on
demurrage, less any exclusions defined in Condition 8.4 exceeds the
Allowed Laytime.
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Domestic Sales Agreement
(SCHEDULE 1 - CONDITIONS OF PURCHASE FOR A SUPPLY OF ARTHUR ROBINSON
PRODUCT AT WHARF) & HEDDERWICKS
(b) The Purchaser will submit to the Refiner within 90 days of the Bill
of Lading Date any demurrage claim of the Purchaser together with a
copy of the charter party.
(c) The Refiner will pay to the Purchaser demurrage, as determined in
(a) above at the rate per day (or pro rata for part of a day) equal
to the actual demurrage rate payable by the Purchaser to the Tanker
Owner pursuant to the charter party between the Purchaser and the
Tanker Owner or if the Tanker is time-chartered, a rate that was
agreed between the Refiner and the Purchaser at the time the Tanker
was nominated or accepted for the lifting.
(d) The demurrage claim will be agreed no later than 3 months from the
date documents supporting such claim are sent to the Refiner.
Payment for demurrage claims must be paid no later than 1 month from
the date of such agreement.
(e) In the event of a delay beyond the deadlines referred to in
paragraph (d) (which aggregate period will not under any
circumstances exceed 4 months unless otherwise agreed in writing),
late payment interest will be payable (at the rate defined in
Condition 6.4) on the full demurrage amount agreed or if not so
agreed, then claimed by the Purchaser, promptly paid with final
settlement.
(f) Except where liable under or caused by the breach of the Agreement
or these Conditions of Purchase, or where resulting from the gross
negligence of the Refiner, the Refiner will not be liable (other
than for demurrage or for deadfreight as specified in Condition 9)
for any loss or damage, direct or indirect which Purchaser may
suffer as a result of the Tanker not being loaded within the Allowed
Laytime.
9. DEADFREIGHT
(a) When the Refiner would begin to incur liability for demurrage costs
under Condition 8.7 and less than 95% of the Accepted Quantity has
been loaded on to a Tanker due to a shortage of Product, without
prejudice to any other rights or any claims of the Purchaser made
under or in relation to the Agreement or these Conditions of
Purchase:
(i) the Refiner must compensate for demurrage costs under
Condition 8.7 and the Refiner must supply the remainder of the
Accepted Quantity; or
(ii) if the Refiner and the Purchaser can agree on the payment of
deadfreight charges by the Refiner instead of compensation by
the Refiner for demurrage pursuant to subparagraph (i), the
Refiner may short-load that Tanker and pay the associated
deadfreight charges to the Purchaser in accordance with that
agreement. When a situation arises requiring discussions to
seek agreement under this paragraph, the Purchase and the
Refiner will enter into such discussions in good faith to
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Domestic Sales Agreement
(SCHEDULE 1 - CONDITIONS OF PURCHASE FOR A SUPPLY OF ARTHUR ROBINSON
PRODUCT AT WHARF) & HEDDERWICKS
identify and agree the more cost-effective option between
incurring demurrage and deadfreight, taking account of the
extent of the delay and the effect on the Purchaser of
short-loading the Tanker, to mitigate to the extent possible
the costs to the parties associated with the delay.
(b) Despite paragraph (a), if the Purchaser has bona fide reasons (which
it will notify to the Refiner) for not being able to delay the
Tanker beyond 72 hours after the commencement of laytime (as
ascertained under Condition 8.3) to await loading of 95% of Accepted
Quantity then mutual agreement between the Purchaser and the Refiner
is not required as contemplated in paragraph (a)(ii) and the
Purchaser can order the Tanker to sail with deadfreight upon the
expiry of that 72 hours with such actual deadfreight cost being
reimbursed to the Purchaser by the Refiner on the Purchaser's
demand.
(c) It is acknowledged that the Refiner is not liable to pay deadfreight
costs under this Condition 9 to the extent that the shortage of
quantity is caused by an event of Force Majeure.
10. ACCEPTANCE OF PORT REGULATIONS AND FACILITY REGULATIONS
(a) The Refiner will provide the Purchaser with a full and complete set
of the Port Regulations and Facility Regulations once these have
been finalised, for the Purchaser's review and acceptance.
(b) The Purchaser will cause copies of the Port Regulations and Facility
Regulations to be provided to the Tanker Owner and the master of the
Tanker nominated and accepted under Condition 7.2. The Purchaser
will use all reasonable endeavours to ensure that the Tanker Owner
and the master of the Tanker comply in all respects with the
requirements set out in the Port Regulations and Facility
Regulations.
11. THE TANKER ARRIVES LATE AND CAUSES POTENTIAL TANK TOPS OR TANK TOPS
(a) Where the Tanker is or will be late for an ALDR-3 and in the
Refiner's reasonable opinion this is likely directly to cause
production at the Refinery to be curtailed, then the Refiner may
request the Purchaser to use an alternative acceptable Tanker
capable of arriving within ALDR-3 to avoid reaching Tank Tops.
(b) If a Tanker has not tendered its NOR within its allocated ALDR-3
and:
(i) as a direct result Tank Tops are likely to occur; and
(ii) the Refiner can find another buyer with a suitable vessel to
take the Product at short notice,
the Refiner may sell a marketable quantity of Product to that other
buyer to the extent required to make ullage for Product production
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Domestic Sales Agreement
(SCHEDULE 1 - CONDITIONS OF PURCHASE FOR A SUPPLY OF ARTHUR ROBINSON
PRODUCT AT WHARF) & HEDDERWICKS
until the arrival of the Tanker. Such action must be preceded by
consultation with the Purchaser conducted in good faith to mitigate
the costs and consequences to the parties in taking such action, and
the Refiner must issue a formal notification of specific intent to
the Purchaser before taking any such action.
(c) If action taken in paragraph (b) is unable to alleviate the
potential Tank Tops and reaching Tank Tops before the arrival of the
Tanker has become unavoidable, the Refiner can then take further
reasonable action to minimise the impact on production at the
Refinery caused by the late arrival of the Tanker. Such action may
include to the extent that it is necessary reducing production or
shutting down the Refinery partially or completely and/or selling
some or all of the quantity due for delivery to the late Tanker to
another buyer (and the Refiner will be relieved of its obligation to
supply that Product to the Purchaser to the extent so sold). Such
action must be preceded by consultation with the Purchaser conducted
in good faith to mitigate the costs and consequences to the parties
in taking such action, and the Refiner must issue a formal
notification of specific intent to the Purchaser before taking any
such action.
(d) If as a consequence of the Refiner taking action under paragraph (c)
the Refiner suffers loss, the Purchaser must pay the Refiner direct
damages equal to those losses provided:
(i) those losses relate to alternative sales of Products to other
buyers under arms-length transactions; and
(ii) the Refiner can demonstrate that those transactions are
arms-length transactions,
being an amount representing the difference between the actual FOB
equivalent price received for such Product and the price that would
have been payable by the Purchaser if purchased by the Purchaser as
intended in accordance with the Accepted Nomination.
(e) The Refiner will act in good faith and use its reasonable endeavours
to minimise the costs it incurs and losses it suffers for which the
Refiner may seek relief and compensation under this Condition 11.
(f) Any amount payable by the Purchaser under or in relation to this
Condition 11 is payable only if and to the extent that the Refiner
provides accurate evidence in reasonable detail in support of the
Refiner's claim of each cost it incurs and each loss it suffers in
respect of which the Refiner seeks compensation under this Condition
11..
(g) When a Tanker fails to tender a valid NOR within ALDR-3 such that
delivery of the relevant cargo of Products is delayed beyond ALDR-3
and the Allowed Laytime, if the Refiner has taken action under
paragraph (c) so that the Refinery has reduced the quantity of
Product stored for delivery to its customers the Refiner may
short-load the Tanker (without any obligation to pay deadfreight) to
the extent it would have insufficient stocks of the relevant Product
remaining to ensure that the Refiner is able to continue to fulfil
its obligations to its
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Domestic Sales Agreement
(SCHEDULE 1 - CONDITIONS OF PURCHASE FOR A SUPPLY OF ARTHUR ROBINSON
PRODUCT AT WHARF) & HEDDERWICKS
customers (including to the Purchaser in relation to other Accepted
Nominations) under its commitments to those customers at that time.
(h) Payments associated with this Condition 11 will be due 30 days after
the Refiner submits fully documented details of claim (including
those details required by subparagraph (d)(ii) and paragraph (f)) to
the Purchaser.
(i) Despite paragraphs (a) to (h), any liability under or in relation to
this Condition 11 will:
(i) only arise (and the resulting claim by the Refiner will only
become payable by the Purchaser) in the event of, and to the
extent of, Gross Negligence on the part of Purchaser;
(ii) not exceed a maximum amount of USD$[deleted for
confidentiality] per day and will be payable only to the
extent that:
(A) the aggregate amount paid by all Shell Group members
that are customers of the Refiner loading product on to
the relevant Tanker will not exceed USD$[deleted for
confidentiality] per day; and
(B) the Refiner has no right to claim against other members
of the Shell Group in its contractual arrangements with
them in relation to the delay of the Tanker.
12. QUANTITY AND QUALITY DETERMINATION
12.1 PRIMA FACIE CONCLUSIVE
(a) The Refiner must establish and maintain an accredited laboratory to
accurately test and record the quality of each Product when
delivered pursuant to this Agreement in accordance with the testing
methodology required by the Product Supply Specifications
(b) The Refiner must accurately measure the quantities of Products when
delivered in accordance with internationally recognised standards in
respect of the Product supplied.
(c) Subject to contrary evidence provided by an independent inspector
appointed under Condition 12.3, the determinations of the laboratory
(in respect of quality) and the Refiner (in respect of quantity)
made in accordance with paragraphs (a) and (b), respectively, will
be final and binding on both parties in the absence of fraud or
manifest error.
12.2 OBLIGATIONS OF THE REFINER
(a) At the time when a delivery of Products to a Tanker is completed,
the laboratory and the Refiner pursuant to their activities in
paragraphs (a) and (b) of Condition 12.1 must:
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Domestic Sales Agreement
(SCHEDULE 1 - CONDITIONS OF PURCHASE FOR A SUPPLY OF ARTHUR ROBINSON
PRODUCT AT WHARF) & HEDDERWICKS
(i) prepare and sign certificates that confirm and accurately
document (in accordance with the obligations of the Refiner
under paragraphs (a) and (b) of Condition 12.1) the quantity
and the quality of each Product delivered;
(ii) arrange for the delivery, as soon as reasonably possible, of
original counterparts of those certificates to the master of
the Tanker, the Purchaser, any independent inspector appointed
under Condition 12.3 and to any other person as the Purchaser
may reasonably require; and
(iii) advise the Purchaser by telex, cable or facsimile of the
quantity and quality recorded on such certificates (including
details of any notations made by the independent inspector
under Condition 12.3).
(b) The Refiner must ensure that:
(i) a sufficient quantity of relevant representative samples of
Products delivered as cargo on to a Tanker must be correctly
taken and kept in accordance with internationally recognised
methodology and practice; and
(ii) the samples so obtained must be retained for at least 90 days
after loading unless otherwise required or a dispute arises in
connection with that cargo (in which event the Refiner will
procure that such samples are retained for as long as required
by either party).
12.3 INDEPENDENT INSPECTION
(a) Should the Purchaser (or the Purchaser and the Refiner together)
require an independent inspection of a Product by an independent
inspector appointed by the Purchaser (or the Purchaser and the
Refiner together if so agreed) when a delivery of Product is made to
the Purchaser, the Refiner must:
(i) allow and facilitate (and, to the extent possible, procure any
other relevant persons to allow and facilitate) the inspection
of the cargo by that independent inspector;
(ii) provide, as is reasonably required by the independent
inspector, all data, documentation, results and readings the
Refiner has or can procure to facilitate an inspection of
quality and quantity of the relevant Products by the
independent inspector; and
(iii) provide the independent inspector with the certificates
prepared by the Refiner under Condition 12.2(a)(i), who before
those certificates are delivered under Condition 12.2(a)(ii)
will be permitted to:
(A) countersign such certificates to signify his agreement
with the particulars and figures stated in those
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Domestic Sales Agreement
(SCHEDULE 1 - CONDITIONS OF PURCHASE FOR A SUPPLY OF ARTHUR ROBINSON
PRODUCT AT WHARF) & HEDDERWICKS
certificates to the extent the independent inspector
agrees with them;
(B) note on those certificates any disagreement the
independent inspector has with the particulars and
figures stated in those certificates; and
(C) compile, as the independent inspector thinks fit,
independent certificates or documents that the Refiner
must ensure accompany the certificates prepared by the
Refiner.
(b) The costs of an independent inspection under this Condition 12.3
will be borne by the Purchaser or, if jointly appointed, shared
equally by the Purchaser and the Refiner.
12.4 NOTIFICATION OF CLAIMS
Any claims as to shortage in the quantity or defects in the quality of
Product loaded into a Tanker will be communicated by the Purchaser to the
Refiner immediately after such shortage or quality defects are discovered.
Such communications will be followed by a formal written notice of claim
with all necessary details to properly process the claim. If no
notification or formal written notice of claim is received within 70 days
from the date of the discovery of the defects by the Purchaser, claims
made in relation to them will be deemed to have been waived.
12.5 QUALITY SPECIFICATIONS
A Product delivered by the Refiner to the Purchaser must conform with the
Product Supply Specification for that Product.
13. INSURANCE
The Purchaser will ensure that (at no cost to the Refiner):
(a) each Tanker arranged by the Purchaser will have on board all
certificates of currency of insurance and financial responsibility
in respect of oil pollution necessary for the proposed voyage,
including a certificate of insurance required under the
International Convention on Civil Liability for Oil Pollution
Damage;
(b) the Tanker Owners of each Tanker arranged by the Purchaser will be
members of the International Tanker Owners Pollution Federation
Limited; and
(c) each Tanker arranged by the Purchaser has the standard level of oil
pollution liability insurance available from the International Group
of P&I Clubs on the date Tanker is accepted, and the standard level
of excess oil pollution liability insurance available through market
underwriters on such date (currently one billion United States
Dollars).
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Domestic Sales Agreement
(SCHEDULE 1 - CONDITIONS OF PURCHASE FOR A SUPPLY OF ARTHUR ROBINSON
PRODUCT AT WHARF) & HEDDERWICKS
14. POLLUTION AT SEA LIABILITY
The Purchaser will comply with all industry standards and legal provisions
relating to pollution and will within those standards and provisions
ensure that no trash, waste, oil, bilge water, or other pollutants will be
discharged or allowed to escape into the sea such that such pollution or
discharge affects the Wharf or the operations of the Refiner.
15. TAXES, DUES, DUTIES AND IMPOSTS
15.1 PORT CHARGES.
Any wharfage, harbour dues port charge, pilotage, line launches, tugs or
similar charges (collectively PORT CHARGES) levied in respect of Product
purchased by the Purchaser, whether chargeable on the cargo loaded or on
the Tanker will be for the account of the Purchaser, unless the Parties
agree otherwise in writing.
15.2 NEW IMPOSTS
Any port charges levied in addition to those under Condition 15.1 in
respect of Products bought by the Purchaser, whether chargeable on the
cargo loaded or on the Tanker, will be for the account of the Purchaser,
unless the Parties agree otherwise in writing.
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Domestic Sales Agreement
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PRODUCT AT WHARF) & HEDDERWICKS
APPENDIX "A"
FORMAT OF LETTER OF INDEMNITY TO BE USED
FROM: InterOil Limited, incorporated in the Independent State of Papua New
Guinea, Level 6, Defens Haus, Corner of Hunter and Musgrave Street, Port
Moresby, NCD Papua New Guinea.
TO: [Shell Oil Products (PNG) Limited] of __________________________
IN CONSIDERATION of your paying for the cargo of
_________________________________ U.S. Barrels/Metric Tonnes of (type of crude
oil and / or product) _________________________ which sailed from (Port)
___________ on (Tanker and date) ________________________________________ loaded
with such cargo when the (document) _______________________________________ for
such cargo has not been delivered to you at the time payment is due under our
contract dated
______ ref: _________________________________________________________.
We hereby warrant to you that at the time property passed as specified under the
terms of the above contract:
(a) we had the right to sell that cargo to you; and
(b) we had unencumbered title to that cargo.
We hereby irrevocably and unconditionally undertake to indemnify you on demand
and hold you harmless against any claim made against you by anyone as a result
of breach by us of any of our warranties as set out above, and all losses, costs
(including, but not limited to costs as between attorney or solicitor and own
client), damages, and expenses which you may suffer, incur or be put to which
are not too remote as a result of our failure to deliver the above document(s)
in accordance with the contract.
This indemnity will terminate on delivery by us of the aforesaid document(s) and
their acceptance by you.
This indemnity will be governed by and construed in accordance with the laws and
legal jurisdiction governing the aforesaid contract and all disputes,
controversies or claims arising out of or in relation to this indemnity or the
breach, termination or validity hereof not settled by negotiation will be
resolved with the procedure provided in such contract.
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Domestic Sales Agreement
(SCHEDULE 2 - CONDITIONS OF PURCHASE FOR SUPPLY OF PRODUCT ARTHUR ROBINSON
AT GANTRY) & HEDDERWICKS
SCHEDULE 2
CONDITIONS OF PURCHASE FOR SUPPLY OF PRODUCT AT GANTRY
1. DEFINITIONS
In addition to the definitions in Clause 1 of the Agreement the following
definitions apply in this Schedule unless the context otherwise requires.
ACCEPTED QUANTITY means the quantity (allowing for plus or minus 5%
operational tolerance) of Product agreed upon between the Refiner and the
Purchaser pursuant to Condition 8.1 hereto.
BARREL means a volume of 42 US standard gallons at 60(degree)F.
CONDITIONS OF PURCHASE means these terms and conditions for the sale and
purchase of Product, and will form part of the Agreement.
GANTRY REGULATIONS means any regulation, operational or safety, applicable
to the loading of road tankers at the Gantry, including but not limited to
driver and truck certification, and which will be advised by Refiner to
Purchaser prior to commencement of Commercial Production.
TREASURY BILL RATE means the most recent, short dated treasury bill rate
published by the Central Bank of Papua New Guinea.
NOMINATED QUANTITY means the quantity of Product nominated by the
Purchaser for lifting pursuant to Condition 8.2(a) hereto.
2. GENERAL CONDITIONS
(a) In relation to a supply of Product made, that Product will be
supplied and delivered by the Refiner and purchased and taken by the
Purchaser in accordance with the Agreement and these Conditions of
Purchase, except that to the extent terms of a supply are
inconsistent or lacking the following order of priority will apply
to determine the terms of the supply:
(i) where the parties specifically intend to derogate from terms
and conditions determined under the Agreement, as may be
agreed between the parties in writing in respect of that
supply;
(ii) in accordance with the Agreement;
(iii) in accordance with the conditions set out in this Schedule;
and
(iv) in accordance with Incoterms 2000.
(b) References to the Refiner in these Conditions of Purchase include
references to the Refiner's duly appointed representative or agent.
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Domestic Sales Agreement
(SCHEDULE 2 - CONDITIONS OF PURCHASE FOR SUPPLY OF PRODUCT ARTHUR ROBINSON
AT GANTRY) & HEDDERWICKS
3. PRODUCTS
The Products to be supplied by the Refiner at the Gantry include:
(c) Propane
(d) LPG
(e) Unleaded Motor Spirit
(f) Jet/DPK
(g) Gasoil
(h) MDO
4. PAYMENT TERMS
4.1 INVOICE FOR SUPPLY
(a) The Refiner must provide to the Purchaser an invoice (together with
such documents reasonably requested by the Purchaser) for Products
delivered, which invoices will relate to agreed periods during which
deliveries occur (DELIVERY PERIODS).
(b) The invoice issued under paragraph (a) must correctly state:
(i) the total quantity of Product or Products supplied to the
Purchaser, and when those deliveries took place;
(ii) the total sum claimed to be due and owing to the Refiner, in
Kina; and
(iii) the Refiner's bank account details.
4.2 TIME AND METHOD OF PAYMENT
(a) Subject to the other provisions of this Condition 4.2, the Purchaser
must make payment in Kina for deliveries made at Gantry by
telegraphic transfer to the Refiner's bank and to the account as
directed in the Refiner's invoice free of all charges and without
set off, discount, deduction or counter-claim not later than 20
calendar days after the mid-point of the delivery period to which
the invoice relates.
(b) Payments that fall due on a Sunday or Monday bank holiday in Papua
New Guinea will be made on the following Business Day. Payments that
fall due on a Saturday or any other bank holiday, except one falling
on a Monday, in Papua New Guinea will be made on the preceding
Business Day.
(c) All bank charges incurred at the Refiner's bank will be for the
Refiner's account. All bank charges incurred at the Purchaser's bank
will be for the Purchaser's account.
(d) The Refiner will use reasonable endeavours to ensure that all
documents required (including those under Condition 6.1(a)) and
information reasonably requested by the Purchaser to enable the
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Domestic Sales Agreement
(SCHEDULE 2 - CONDITIONS OF PURCHASE FOR SUPPLY OF PRODUCT ARTHUR ROBINSON
AT GANTRY) & HEDDERWICKS
Purchaser to make payment are sent to the Purchaser no later than 3
Business Days prior to the date payment is due, failing which the
Purchaser is not obliged to make payment on the due date but must
make payment 3 Business Days after the receipt of such requisite
documents or information by the Purchaser.
4.3 INTEREST ON LATE PAYMENTS
If a payment or part of a payment is not made by the Purchaser in
accordance with these Conditions of Purchase when due, then interest will
be paid on that amount due to the extent it remains outstanding from the
date that payment was due until the date of payment at Treasury Bill Rate
plus 2% per annum, calculated on a daily basis from the date due until and
including the day of payment of that outstanding amount. If payment of
amounts due from the Purchaser can be made by way of set-off against
amounts due from the Refiner to the Purchaser, payment must be so made to
the extent possible to reduce the Purchaser's liability to pay interest
under this Condition.
4.4 CREDIT TERMS
The Refiner may request appropriate credit terms on sales made under the
Agreement, upon which the parties will agree on appropriate credit terms.
5. NOMINATION, SCHEDULING AND ORDERS AT THE GANTRY
(a) For a supply of Product at the Gantry under these Conditions of
Purchase, the Nomination to which that supply relates is made by the
Purchaser under Clause 7.1(f) of the Agreement and becomes an
Accepted Nomination pursuant to Clause 7.3(b) of the Agreement.
(b) The quantity of each Product to be supplied during a Delivery Period
will be the aggregate quantity of that Product ordered by the
Purchaser for lifting during that Delivery Period (as accepted into
the relevant Accepted Nomination by the Refiner) and shall be
referred to as the Accepted Quantity of the supply of Product to be
made during the relevant Delivery Period (the ACCEPTED QUANTITY).
(c) Upon an Accepted Nomination coming into effect for the supply of
Product at the Gantry in a Delivery Period:
(i) the Purchaser must make sufficient purchase orders before and
during that Delivery Period to the extent required to fulfil
all its contracted obligations to purchase the full amount of
the Accepted Quantity for that Delivery Period; and
(ii) the Refiner must supply Product during that Delivery Period as
requested in those purchase orders in accordance with and
subject to the terms of the Agreement and these Conditions of
Purchase, provided that this obligation on the Refiner to
supply is limited to the extent that the total quantity of
Product requested by the Purchaser to be supplied under
purchase orders in the Delivery Period becomes greater than
the Accepted Quantity for that Delivery Period.
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Domestic Sales Agreement
(SCHEDULE 2 - CONDITIONS OF PURCHASE FOR SUPPLY OF PRODUCT ARTHUR ROBINSON
AT GANTRY) & HEDDERWICKS
(d) If a purchase order is made by the Purchaser at least 24 hours
before the Purchaser intends to take delivery of the Product the
subject of that purchase order, subject to any other applicable
Conditions of Purchase the Refiner must accept that Purchaser Order
and satisfy it within the time specified in, and otherwise in
accordance with the terms relating to, that purchase order.
(e) If a purchase order is made by the Purchaser at any time during the
24 hours before the Purchaser intends to take delivery of the
Product the subject of that purchase order, the Refiner will
exercise all reasonable endeavours to satisfy that purchase order,
but is not obliged to make a supply pursuant to that purchase order
until 24 hours from the time it is made.
(f) The Refiner must notify the Purchaser within 24 hours of receipt of
a purchase order (or if the Purchaser requests a delivery in less
than 24 hours, as soon as reasonably possible before the time of the
requested delivery) if it is unable to satisfy that purchase order
in whole or in part. Notification given in accordance with this
Condition in no way reduces or affects any liability of the Refiner
to the Purchaser for failure to supply the Product in accordance
with the Agreement or these Conditions of Purchase.
(g) The Refiner will be entitled to limit supplies to the monthly
Accepted Quantity, pro-rata on a daily basis.
6. COMPLIANCE WITH GANTRY REGULATIONS
(a) The Purchaser will ensure that all road tankers arriving at the
Gantry for loading will comply with the Gantry Regulations.
(b) Without limitation to the Purchaser's obligations pursuant to
Condition 3.4(a) the Purchaser will provide to the Refiner or the
Refiner's Representative appropriate documentation to enable the
Refiner to verify compliance with the Gantry Regulations for any
road tanker that may arrive at the Gantry to load Product for the
Purchaser, provided that if the Purchaser is not able to supply such
documentation, the Purchaser will at the time of confirmation
provide a notice of compliance to the Refiner, in a form acceptable
to the Refiner, and accepted by the Refiner prior to the
commencement of loading.
(c) The Refiner will not be obliged to load any road tanker that does
not comply with the Gantry Regulations.
7. PRODUCT MEASUREMENT
(a) Quantities transferred to the Purchaser's road tankers at the Gantry
will be measured by the Refiner using its meter(s). Such measurement
will be final and binding in the absence of manifest error.
PAGE 44
Domestic Sales Agreement
(SCHEDULE 2 - CONDITIONS OF PURCHASE FOR SUPPLY OF PRODUCT ARTHUR ROBINSON
AT GANTRY) & HEDDERWICKS
(b) The Refiner will maintain such records as are necessary to record
the quantities of Product supplied pursuant to the Agreement and the
Purchaser will have access to such records as reasonably required.
8. VEHICLES AND INSPECTION
(a) The Purchaser will provide road tankers which are compatible with
the Refiner's Gantry, as may be advised by the Refiner from time to
time, and which conform to all statutory and the Refiner's loading
and safety standards, and comply with Gantry Regulations as advised
from time to time.
(b) The Purchaser warrants that all road tankers presented for loading
conform to all statutory requirements for the transport of Dangerous
Goods and have full vapour vent interlock.
(c) The Purchaser will present road tankers for loading in a condition
fit to receive the Product nominated by the Purchaser.
(d) The Purchaser will present road tankers and drivers which hold
current accreditation under the AIP Passport and Safe Load Pass, as
per AIP Guidelines GL-7 (or other Standard agreed between the
Parties), and any additional requirements advised by the Refiner.
9. PRODUCT QUALITY
(a) A Product delivered by the Refiner to the Purchaser must conform
with the Product Supply Specification for that Product, and the
Refiner warrants that it will.
(b) If the Purchaser wishes to make a claim in relation to the quality
of any Product, the Purchaser will:
(i) give notice to the Refiner of any claim it proposes to make,
within three working days of the alleged defect coming to its
attention, specifying fully the facts related to the
allegation;
(ii) use its best endeavours to minimise any loss or damage arising
from the alleged defect.
(c) Following a claim under paragraph (b) the Refiner will:
(i) give the Purchaser reasonable opportunity to take samples,
inspect and test the Product in respect of which the claim is
made; and
(ii) otherwise co-operate with the Purchaser in the Purchaser's
investigation of the claim.
(c) If the Purchaser complies with the provisions of paragraph (b), the
Refiner will consider and report to the Purchaser the results of its
consideration of the claim as soon as possible. In the event that
the Product does not conform to Product Supply Specifications, then
the Refiner will indemnify the Purchaser in respect to all damage,
loss, claims, actions or liability incurred as a result, except to
the extent that such damage, loss,
PAGE 45
Domestic Sales Agreement
(SCHEDULE 2 - CONDITIONS OF PURCHASE FOR SUPPLY OF PRODUCT ARTHUR ROBINSON
AT GANTRY) & HEDDERWICKS
claims, actions or liabilities are deemed to be due to the negligent
act or omission or default of the Purchaser its servants, agents or
contractors.
(d) For the avoidance of doubt the provisions of paragraphs (a) and (b)
will not apply where the Refiner advises the Purchaser prior to
passing of title under Clauses 13.2 and 13.3 that the Products in
question are non-conforming and notwithstanding such advice the
Purchaser elects to take delivery of same.
10. ADDITIVE FEATURES
(a) The Purchaser and the Refiner will mutually agree whether additive
facilities are required at the Refinery and if agreed then the
Purchaser will pay the Refiner for the installation, including
initial capital cost, and maintenance of all facilities (which are
not otherwise used by the Refiner) required for injecting the
Purchaser additives to the Product as required by the Purchaser at
the Gantry.
(e) The Purchaser will provide at its own cost all additives required
for dosing Purchaser's Products.
(f) The Purchaser's non fixed assets paid for and maintained by the
Purchaser remain the property of the Purchaser and can be removed at
the conclusion of the agreement. However fixed assets will remain
the property of the Refiner.
(g) The Purchaser's assets at the Gantry are to be insured by the
Purchaser. However the Refiner is responsible for any damage caused
by the Refiner to the Purchaser's assets at the Gantry except to the
extent arising as a result of the negligent act or omission or
default of the Purchaser. The Refiner will not be responsible for
any damage caused by third parties.
11. ACCESS
Access to Product from the road at the Gantry is available 10 hours, 6
days per week except when the Gantry has been stocked out of Product
and/or during tanker discharges into the Gantry facility. The Refiner will
notify the Purchaser as soon as practicable of any proposed tanker
discharges or actual or envisaged stock outs.
12. DOCUMENTATION
The Refiner will provide the Purchaser in a timely manner and in any event
before passage of title in the Product, with the necessary accounting and
other documentation as required under the statutory requirements for the
transport of Dangerous Goods.
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Domestic Sales Agreement
(SCHEDULE 2 - CONDITIONS OF PURCHASE FOR SUPPLY OF PRODUCT ARTHUR ROBINSON
AT GANTRY) & HEDDERWICKS
13. TITLE AND RISK
Product to be supplied to the Purchaser under the Agreement is collected
by the Purchaser or the Purchaser's nominated carrier from the Gantry or
such other place as is agreed between the parties, and ownership and risk
in the Product will pass to the Purchaser when the Product passes through
the first flange on the manifold of the Purchaser's road tanker or other
carrier vehicle nominated by the Purchaser as the case may be.
PAGE 47
Domestic Sales Agreement ARTHUR ROBINSON
(SCHEDULE 3 - DEED OF NOVATION) & HEDDERWICKS
SCHEDULE 3
DEED OF NOVATION
DATE
PARTIES
1. SHELL PAPUA NEW GUINEA LIMITED (company number 1-6349) of Level 10,
Pacific Place, Cnr Musgrave Street and Champion Parade, Port
Moresby, Papua New Guinea (SPNG)
2. [SHELL OIL PRODUCTS (PNG) LIMITED / OTHER NOMINATED SHELL GROUP
COMPANY] (company number [#]) of [Level 10, Pacific Place, Cnr
Musgrave Street and Champion Parade, Port Moresby, Papua New
Guinea] ([SOPL]).
3. INTEROIL LIMITED (company number 1-22826) of Level 6, Defens Haus,
Cnr Hunter Street and Champion Parade, Port Moresby, Papua New
Guinea (the REFINER).
RECITALS
A SPNG and the Refiner are parties to a domestic sales agreement (the
DOMESTIC SALES AGREEMENT) dated [#].
B It is intended by the Shell group of companies and acknowledged and
agreed by SPNG and the Refiner in the Domestic Sales Agreement that
[SOPL] will replace the present activities of SPNG in distributing
petroleum products in Papua New Guinea.
C The Domestic Sales Agreement must be novated in the form of this
Deed as a condition to the Domestic Sales Agreement becoming fully
effective within its terms.
D As a result, the parties to this Deed have agreed that the Domestic
Sales Agreement will be novated on the terms of this Deed, so that:
(a) [SOPL] becomes a party to the Domestic Sales Agreement in
place of SPNG; and
(b) SPNG is released from its obligations under the Domestic Sales
Agreement.
IT IS AGREED as follows.
PAGE 48
Domestic Sales Agreement ARTHUR ROBINSON
(SCHEDULE 3 - DEED OF NOVATION) & HEDDERWICKS
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
The following definitions apply unless the context requires otherwise.
DOMESTIC SALES AGREEMENT has the meaning given in Recital A.
EFFECTIVE DATE means [the Commencement Date defined in the Domestic Sales
Agreement].
PURCHASER has the meaning given in the Domestic Sales Agreement.
1.2 INTERPRETATION
Headings are for convenience only and do not affect interpretation. The
following rules apply unless the context requires otherwise.
(a) A gender includes all genders.
(c) The singular includes the plural and conversely.
(d) If a word or phrase is defined, its other grammatical forms have a
corresponding meaning.
(e) A reference to a person, corporation, trust, partnership,
unincorporated body or other entity includes any of them.
(f) The meaning of general words is not limited by specific examples
introduced by INCLUDING, or FOR EXAMPLE, or similar expressions.
(g) A reference to an agreement or document including a reference to
this Deed is to the agreement or document as amended, varied,
supplemented, novated or replaced, except to the extent prohibited
by this Deed or that other agreement or document.
(h) A reference to a party to this Deed or another agreement or document
includes the party's successors, permitted substitutes and permitted
assigns (and, where applicable, the party's legal personal
representatives).
2. NOVATION
2.1 NOVATION
With effect on and from the Effective Date:
(a) [SOPL] is substituted for SPNG as a party under the Domestic Sales
Agreement; and
(b) the Domestic Sales Agreement takes effect as an agreement on the
same terms as previously except that references to SPNG or the
Purchaser will be read and construed as if they were references only
to [SOPL].
PAGE 49
Domestic Sales Agreement ARTHUR ROBINSON
(SCHEDULE 3 - DEED OF NOVATION) & HEDDERWICKS
2.2 ASSUMPTION OF BENEFITS AND OBLIGATIONS
With effect on and from the Effective Date [SOPL] is bound by and must
comply with the provisions of the Domestic Sales Agreement binding on SPNG
or the Purchaser and assumes all of the rights and benefits of SPNG and
the Purchaser under the Domestic Sales Agreement.
2.3 RELEASE OF SPNG
With effect on and from the Effective Date the Refiner releases SPNG from
all:
(a) its obligations and liabilities (whether stated as the obligations
of SPNG or the Purchaser) under the Domestic Sales Agreement; and
(b) actions, claims or proceedings that it may have against SPNG or the
Purchaser under or in respect of the Domestic Sales Agreement.
3. NOTICES
For the purposes of Clause [[16] NOTE: CROSS REFERENCE TO THE NOTICES
CLAUSE] of the Domestic Sales Agreement, the address of [SOPL] to which
any notice, demand, consent or other communication must be delivered is:
[Level 10
Pacific Place
Cnr Musgrave Street and Champion Parade
Port Moresby
Papua New Guinea
Attention: Company Secretary
Fax No: +675 321 1842]
4. COSTS, STAMP DUTIES
(a) Each party will bear its own costs and expenses in relation to the
preparation and execution of this Deed, including legal costs and
expenses.
(b) The Refiner must pay all stamp, transaction, registration and
similar taxes (including fines, penalties and interest) that may be
payable or determined to be payable in relation to the execution,
delivery or performance of this Deed or any other transaction
contemplated by this Deed.
5. GOVERNING LAW
This Deed is governed by the law of Papua New Guinea. Each party submits
to the exclusive jurisdiction of courts exercising jurisdiction in
Victoria, Australia in connection with matters concerning this Deed.
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Domestic Sales Agreement ARTHUR ROBINSON
(SCHEDULE 3 - DEED OF NOVATION) & HEDDERWICKS
6. COUNTERPARTS
This Deed may be executed in any number of counterparts. All counterparts
together will be taken to constitute one instrument.
EXECUTED as a Deed.
[Each attorney executing this Deed states that he or she has no notice of
revocation or suspension of his or her power of attorney.]
[NOTE: INSERT THE APPROPRIATE EXECUTION CLAUSES.]
PAGE 51
Domestic Sales Agreement ARTHUR ROBINSON
(SCHEDULE 3 - DEED OF NOVATION) & HEDDERWICKS
EXECUTED as an agreement.
SIGNED for and on behalf of SHELL
PAPUA NEW GUINEA LIMITED by its
authorised signatory in the
presence of:
____________________
Authorised signatory
______________________________
Witness
____________________
Name and address Name and Title
SIGNED for and on behalf of
INTEROIL LIMITED by its authorised
signatory in the presence of:
____________________
Authorised signatory
______________________________
Witness
______________________________ ____________________
Name and address Name and Title
PAGE 52