Common use of ECONOMIC STABILISATION Clause in Contracts

ECONOMIC STABILISATION. 45.1 Except as may be expressly provided herein, the Federal Government shall not amend, modify, rescind, terminate, declare invalid or unenforceable, require renegotiation of, compel replacement or substitution, or otherwise seek to avoid, alter or limit the Agreement without the prior written consent of Contractor. 45.2 Notwithstanding anything to the contrary in this Agreement, and without prejudice to any other rights of the Contractor under the Agreement, in the event (a) any new tax, levy or other fee is introduced in Somalia that is targeted at Hydrocarbon Operations or (b) there is any change in Somali Law (or the interpretation thereof) that (i) is targeted at Hydrocarbon Operations or (ii) discriminates or has the effect of discriminating against the contractor or any Contractor Entity (including but not limited to a progressive tax rate) and (c) as a result of the circumstances described in (a) or (b), the Contractor or any Contractor Entity suffers an adverse effect of a material nature on the economic benefits it drives from Hydrocarbon Operations or the Contract (each, a “Stabilisation Event”), then the Parties shall negotiate such amendments to the Agreement as may be necessary to put the Parties in the same economic position as they would have been in had such Stabilisation Event not occurred or otherwise not been made; provided that to the extent that the Contractor’s rights, obligations or benefits which existed at the time that the Agreement was executed cannot be restored, subject to sub-clauses 45.3 to 45.5 (inclusive), the Federal Government shall pay to the Contractor such compensation as may be necessary to put the Contractor in the same economic position as the Contractor would have been in had such Stabilisation Event not occurred or otherwise not been made. 45.3 Payment of such compensation pursuant to clause 45.2 shall be due on and from one hundred and eighty (180) days from the date of notification of a claim made by the Contractor to the Federal Government in respect of such Stabilisation Event. 45.4 No obligation to compensate the Contractor shall arise under clause 45.2 unless the Stabilization Events cause a cumulative Material Adverse Effect in excess of fifteen million (15) USD ("Threshold Amount") per Calendar Year. If the Threshold Amount is exceeded only the portion of the economic impact in excess of the Threshold Amount shall be compensated. 45.5 Upon either Party’s request, the Federal Government and the Contractor shall endeavour in good faith for a period of ninety (90) days after notification by the Contractor to the Federal Government under clause 45.3 (“Notification Date”) to agree on any amount of compensation payable and any amendments to this Agreement required to restore the economic position of the Contractor. 45.6 If agreement is not reached by the Parties (acting in good faith and reasonably) on the amount of compensation and any amendments to this Agreement within the ninety (90) day period from the Notification Date, then: 45.6.1 the Federal Government shall pay any undisputed sum and thereafter pay such amount as is agreed or determined payable in respect of the disputed sum within ninety (90) days of: 45.6.1.1 the date on which the Parties resolve the disputed sum; or 45.6.1.2 the date of determination by an arbitrator, if the Parties fail to reach agreement, and the matter has been referred for arbitration; 45.6.2 either Party may pursue resolution of the dispute in accordance with the dispute resolution procedure set out herein. 45.7 If payment is not made pursuant to clause 45.6.1 the Contractor agrees, and the Federal Government agrees (and shall procure that any Governmental Authority agrees) that the Contractor may automatically set-off the unpaid sum against: 45.7.1 any amount payable by the Contractor to the Federal Government under this Agreement; and any 45.7.2 future payments to be made by the Contractor to the Federal Government under this Agreement, so as long as the requirement of such compensation payment persists.

ECONOMIC STABILISATION. ‌ 45.1 Except as may be expressly provided herein, the Federal Government shall not amend, modify, rescind, terminate, declare invalid or unenforceable, require renegotiation of, compel replacement or substitution, or otherwise seek to avoid, alter or limit the Agreement without the prior written consent of Contractor. 45.2 Notwithstanding anything to the contrary in this Agreement, and without prejudice to any other rights of the Contractor under the Agreement, in the event (a) any new tax, levy event of a Change in Law or other fee is introduced in Somalia a Lapse of Consent that is targeted at Hydrocarbon Operations or (b) there is any change in Somali Law (has a Material Adverse Effect or positively affects the interpretation thereof) that (i) is targeted at Hydrocarbon Operations or (ii) discriminates rights or has the effect of discriminating against the contractor or any Contractor Entity (including but not limited to a progressive tax rate) and (c) as a result interests of the circumstances described in (a) or (b), the Contractor or any Contractor Entity suffers an adverse effect of a material nature on the economic benefits it drives from Hydrocarbon Operations or the Contract (each, a “Stabilisation Event”), then the Parties shall negotiate such amendments to the Agreement as may be necessary to put the Parties in the same economic position as they would have been in had such Stabilisation Event not occurred or otherwise not been made; provided that to the extent that the Contractor’s rights, obligations or benefits which existed at the time that the Agreement was executed cannot be restored, subject to sub-clauses 45.3 to 45.5 (inclusive), the Federal Government shall pay to the Contractor such compensation as may be necessary to put the Contractor in the same economic position as the Contractor would have been in had such Stabilisation Event not occurred or otherwise not been made.made.‌ 45.3 Payment of such compensation pursuant to clause 45.2 shall be due on and from one hundred and eighty ninety (18090) days from the date of notification of a claim made by the Contractor to the Federal Government in respect of such Stabilisation Event.Event.‌ 45.4 No obligation to compensate the Contractor shall arise under clause 45.2 unless the Stabilization Events relevant Change in Law(s) or Lapse in Consent(s) cause a cumulative Material Adverse Effect in excess of fifteen [one (1) million (15) USD USD] ("Threshold Amount") per Calendar Year. If the Threshold Amount is exceeded only the portion of the economic impact in excess of the Threshold Amount shall be compensated. 45.5 Upon either Party’s request, the Federal Government and the Contractor shall endeavour in good faith for a period of ninety (90) days after notification by the Contractor to the Federal Government under clause 45.3 (“Notification Date”) to agree on any amount of compensation payable and any amendments to this Agreement required to restore the economic position of the Contractor.Contractor.‌ 45.6 If agreement is not reached by the Parties (acting in good faith and reasonably) on the amount of compensation and any amendments to this Agreement within the ninety (90) day period from the Notification Date, then: 45.6.1 the Federal Government shall pay any undisputed sum and thereafter pay such amount as is agreed or determined payable in respect of the disputed sum within ninety (90) days of: 45.6.1.1 the date on which the Parties resolve the disputed sum; or 45.6.1.2 the date of determination by an arbitrator, if the Parties fail to reach agreement, and the matter has been referred for arbitration; 45.6.2 either Party may pursue resolution of the dispute in accordance with the dispute resolution procedure set out herein. 45.7 If payment is not made pursuant to clause 45.6.1 the Contractor agrees, and the Federal Government agrees (and shall procure that any Governmental Authority agrees) that the Contractor may automatically set-off the unpaid sum against: 45.7.1 any amount payable by the Contractor to the Federal Government under this Agreement; and any 45.7.2 future payments to be made by the Contractor to the Federal Government under this Agreement, so as long as the requirement of such compensation payment persists.

ECONOMIC STABILISATION. 45.1 Except as may be expressly provided herein, the Federal Government shall not amend, modify, rescind, terminate, declare invalid or unenforceable, require renegotiation of, compel replacement or substitution, or otherwise seek to avoid, alter or limit the Agreement without the prior written consent of Contractor. 45.2 Notwithstanding anything to the contrary in this Agreement, and without 34.1 Without prejudice to any other rights of the Contractor Licensee under the AgreementLicence, in the event (a) any new tax, levy or other fee is introduced in Somalia that is targeted at Hydrocarbon Operations or (b) there is any change in Somali Law (or the interpretation thereof) that (i) is targeted at Hydrocarbon Operations or (ii) discriminates or has the effect of discriminating against the contractor or any Contractor Entity (including but not limited to a progressive tax rate) and (c) as a result of the circumstances described in (a) or (b), the Contractor or any Contractor Entity suffers an adverse effect event of a material nature on the economic benefits it drives from Hydrocarbon Operations Change in Law, Lapse of Consent or the Contract a Government Direction (each, as defined in Article 27 (Cross-Border Unitization)) that has a “Stabilisation Event”), then the Parties shall negotiate such amendments to the Agreement as may be necessary to put the Parties in the same economic position as they would have been in had such Stabilisation Event not occurred or otherwise not been made; provided that to the extent that the Contractor’s rights, obligations or benefits which existed at the time that the Agreement was executed cannot be restoredMaterial Adverse Effect, subject to sub-clauses 45.3 to 45.5 (inclusive)the remainder of this Article 34, the Federal Government shall pay to the Contractor Licensee such compensation as may be necessary to put the Contractor Licensee in the same economic position as the Contractor Licensee would have been in had such Stabilisation Event Change in Law, Lapse of Consent or Government Direction not occurred or otherwise not been made. 45.3 34.2 Payment of such compensation pursuant to clause 45.2 shall be due on and from one hundred and eighty ninety (18090) days from the date of notification of a claim made by the Contractor Licensee to the Federal Government in respect of such Stabilisation EventChange in Law, Lapse of Consent or Government Direction. 45.4 34.3 No obligation to compensate the Contractor shall arise under clause 45.2 Articles 34.1 and 34.2 unless the Stabilization Events relevant Change in Law, Lapse of Consent or Government Direction (whether alone or together) cause a cumulative Material Adverse Effect in excess of fifteen five million United States Dollars (15USD 5,000,000) USD ("the “Threshold Amount") per Calendar Year”). If the Threshold Amount is are exceeded only the portion of the economic impact in excess of the Threshold Amount shall be compensated. 45.5 34.4 Upon either Party’s Party‟s request, the Federal Government and the Contractor Licensee shall endeavour in good faith for a period of ninety (90) days after notification by the Contractor Licensee to the Federal Government under clause 45.3 Article 34.2 (“Notification Date”) to agree on any amount of compensation payable and any amendments to this Agreement required to restore the economic position of the ContractorLicensee. 45.6 34.5 If agreement is not reached by the Parties (acting in good faith and reasonably) on the such disputed amount of compensation and any amendments to this Agreement within the ninety (90) day period from the Notification Date, then: 45.6.1 (a) the Federal Government shall pay any undisputed sum forthwith and thereafter pay such amount as is agreed or determined payable in respect of the disputed sum within ninety (90) days of: 45.6.1.1 (i) the date on which the Parties resolve the disputed sum; or 45.6.1.2 (ii) the date of determination by an arbitrator, if the Parties fail to reach agreement, and the matter has been referred for arbitration;; and 45.6.2 (b) either Party may pursue resolution of the dispute in accordance with the dispute resolution procedure set out herein. 45.7 If payment is not made 34.6 Once compensation has been agreed pursuant to clause 45.6.1 Article 34.4 or Article 34.5, the Contractor agreesParties shall agree in good faith any appropriate amendment to the Licence that may be necessary to reflect the altered economic position of the Licensee as a result of the Change in Law, and Lapse of Consent or Government Direction. 34.7 Notwithstanding Article 34.3, Article 34.1 shall not apply in the Federal event that a Change in Law enacted by the Government agrees (and shall procure that any Governmental Authority agrees) in the interest of health, safety, conservation or the protection of the environment, reflects what the Licensee has done, or would have done, to comply with its obligations under Article 9 of this Licence, provided that the Contractor may automatically set-off the unpaid sum against: 45.7.1 Change in Law is in accordance with Best Industry Practice and would not result in a direct or indirect payment of any amount payable tax or levy or any similar obligation by the Contractor Licensee to the Federal Government under this Agreement; and any 45.7.2 future payments to be made by the Contractor to the Federal Government under this Agreement, so as long as the requirement of such compensation payment persistsGovernment.