Contract



SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH FIVE ASTERISKS (*****).
STRICTLY CONFIDENTIAL

DATED 20 AUGUST 2014
 

ROSNEFT OIL COMPANY
AND
SEADRILL LIMITED
AND

_________________________________________
_________________________________________

CONTENTS
Page
1.    INTERPRETATION    2
2.    NADL ISSUANCE    33
3.    CONTRACT SHARES    35
4.    ONSHORE DRILLING CONTRACTS    38
5.    EXTENDED CO-OPERATION    40
6.    CONDITIONS    51
7.    TERMINATION OF THIS AGREEMENT    55
8.    ROSNEFT ACTIONS PENDING COMPLETION    58
9.    NADL ACTIONS PENDING COMPLETION    59
10.    COMPLETION    61
11.    COMPLETION ACCOUNTS    62
12.    ROSNEFT WARRANTIES AND COVENANTS    63
13.    NADL WARRANTIES AND COVENANTS    65
14.    SEADRILL WARRANTY    66
15.    PARTIES’ WARRANTIES    67
16.    LIABILITY; LIMITATIONS ON LIABILITY    68
17.    TAJIKISTAN; OBK CONTRACTS    70
18.    NON-SOLICITATION    71
19.    INTER-COMPANY AMOUNTS    71
20.    TRANSITIONAL SERVICES; POST COMPLETION UNDERTAKINGS; XXXXXXXXXXX OPTION    72
21.    BOOKS AND RECORDS    75
22.    EFFECT OF COMPLETION    75
23.    REMEDIES AND WAIVERS    75
24.    ASSIGNMENT    75
25.    ENTIRE AGREEMENT    76
26.    NOTICES    77
27.    ANNOUNCEMENTS    77
28.    CONFIDENTIALITY    78
29.    COSTS; EXPENSES AND TAX    79
30.    COUNTERPARTS    80
31.    INVALIDITY    80
32.    CONTRACTS (RIGHTS OF THIRD PARTIES) XXX 0000    80
33.    CHOICE OF GOVERNING LAW    81
34.    ARBITRATION    81
35.    NATURE OF THIS AGREEMENT    82
36.    LANGUAGE    82





Agreed Form Documents
1.
Shareholders’ Agreement (including restated by-laws of NADL)
2.
Russian SPA
3.
Registration Rights Agreement
4.
Legal opinion by Bermudan counsel regarding the valid issuance of the Consideration Shares and the Subscription Shares, and the future issuance of the Contract Shares
5.
Pre-emption waiver in respect of shares in the Company
6.
Decision of Rosneft as the sole participant of the Company approving: (i) the resignation of the existing general director of the Company; and (ii) the appointment of the person designated by NADL as general director
7.
Minutes of the general participants’ meeting of Orenburg approving: (i) the resignation of the existing general director of Orenburg and the termination of the board of directors of Orenburg; and (ii) the appointment of persons designated by NADL as general director and to the Orenburg board, respectively
8.
Decision of Orenburg approving: (i) the resignation of the existing general director of Orenburg Subsidiary; and (ii) the appointment of the person designated by NADL as general director.
9.
Agreement terminating the employment agreement of the existing general director of the Company
10.
Agreement terminating the employment agreement of the existing general director of Orenburg
11.
Agreement terminating the employment agreement of the existing general director of Orenburg Subsidiary
12.
Notices from each resigning general director of the Company, Orenburg and the Orenburg Subsidiary to the relevant respective banks informing the relevant bank(s) of their resignation and authorising the relevant bank(s) to no longer act in accordance with their instructions
13.
Powers of attorney relating to each resigning general director of the Company, Orenburg and Orenburg Subsidiary
14.
Pro forma Onshore Drilling Contract


THIS AGREEMENT (this “Agreement”) is made on August 2014
AMONGST:
1.
ROSNEFT OIL COMPANY, an open joint stock company incorporated and registered under the laws of the Russian Federation with main state registration number (OGRN) 1027700043502 and having its head office located at Russian Federation, 115035 Xxxxxx, 00/0 Xxxxxxxxxx embankment (“Rosneft”);
AND
2.
SEADRILL LIMITED, an exempted limited company incorporated under the laws of the Islands of Bermuda with official number 36832 and having its head office located at Par-la-Ville Place, 14 Par-la-ville Road, Xxxxxxxx HM08, Bermuda (“Seadrill”);
AND
3.
NORTH ATLANTIC DRILLING LTD., an exempted limited company incorporated under the laws of the Islands of Bermuda with official number 45094 and having its head office located at Par-la-Ville Place, 14 Par-la-ville Road, Xxxxxxxx HM08, Bermuda (“NADL”).
WHEREAS:
(A)
The Company operates a fleet of onshore drilling rigs used for the exploration and production of hydrocarbons onshore in Russia. The Company is a wholly-owned subsidiary of Rosneft.
(B)
NADL owns and operates a fleet of offshore drilling rigs. NADL operates solely in the NADL Area and is a specialist in providing drilling services in the NADL Area. Seadrill owns approximately 70.4% (seventy point four per cent.) of the shares in NADL.
(C)
NADL has agreed to issue the Consideration Shares and the Subscription Shares to Rosneft in return for the transfer of the Shares and the payment of the Subscription Price, respectively, on the terms and subject to the conditions set out in this Agreement.
(D)
The transfer of the Shares will be effected by the Russian SPA and whilst this Agreement is not a transaction directed at the disposal of a participatory interest within the meaning of paragraph 1 of Article 21(11) of the LLC Law, this Agreement will be considered a contract establishing an obligation to enter into a transaction directed at the disposal of a participatory interest, provided that certain circumstances have occurred or the counterparty has performed certain counter-obligations, within the meaning of paragraph 3 of Article 21(11) of the LLC Law.
(E)
The Retained Group has entered into Offshore Drilling Contracts for each of the Offshore Rigs with the NADL Group. Following the Acceptance Date under the Offshore Drilling Contracts in respect of each of the Offshore Rigs by the Retained Group, NADL has agreed to issue the Contract Shares to Rosneft.
(F)
The Retained Group may enter into Additional Drilling Contracts with the NADL Group and/or the Seadrill Group following Completion. Following the Acceptance Date under Additional Drilling Contracts between the Retained Group and the NADL Group, NADL has agreed to issue the NADL Additional Contract Shares to Rosneft. Following the Acceptance Date under Additional Drilling Contracts between the Retained Group and the Seadrill Group, Seadrill has agreed to transfer the Seadrill Additional Contract Shares to Rosneft.
(G)
Rosneft and Seadrill have agreed to enter into the Shareholders’ Agreement at Completion for the purpose of regulating the relationship between Rosneft and Seadrill as shareholders in NADL.
(H)
The execution and delivery of the NADL Approval Documents, the issuance of the Consideration Shares and the Subscription Shares and the future issuance of the Contract Shares have been approved by the board of directors of NADL, and each necessary committee of the board of directors of NADL, including the NADL Conflicts Committee and the execution and delivery of the Seadrill Approval Documents has been approved by the board of Seadrill and each necessary committee of the board of directors of Seadrill.
WHEREBY IT IS AGREED AS FOLLOWS:
1.
INTERPRETATION
1.1
In this Agreement:
“Acceptance Date”
means the date on which Rosneft (or any member of the Retained Group) has accepted the relevant rig in accordance with the terms of the relevant Offshore Drilling Contract;
“Accounts”
means, as regards the Company, the Company Accounts and, as regards Orenburg and the Orenburg Subsidiary, the Orenburg Accounts;
“Accounts Date”
means 31 December 2013;
“Actual Drilling Revenue”
means, in respect of a particular Settlement Date, the actual contractual revenue earned under an Offshore Drilling Contract by a member of the NADL Group in respect of operating day rate, standby rate or any other similar day rates set out in the Service Order for the relevant Offshore Rig (net of any VAT or sales or similar Tax and excluding any initial holding rate), during the preceding Settlement Period;
“Additional Contract Acceptance Date”
means the date on which Rosneft (or any member of the Retained Group) has accepted the relevant rig in accordance with the terms of the relevant Additional Drilling Contract;
“Additional Contract Actual Drilling Revenue”
means, in respect of a particular Settlement Date, the actual contractual revenue earned under an Additional Drilling Contract by a member of the NADL Group or member of the Seadrill Group (as the case may be) in respect of operating day rate, standby rate or any other similar day rates as set out in the service order for the relevant rig (net of any VAT or sales or similar Tax and excluding any initial holding rate), during the preceding Settlement Period;
“Additional Contract Aggregate Deficit”
;
“Additional Contract Aggregate Surplus”
;
“Additional Contract Estimated Drilling Revenue”
means, in respect of an Additional Drilling Contract, A x B where:
A = the estimated contractual revenue estimated to be earned under an Additional Drilling Contract over the term of that Additional Drilling Contract as agreed in writing by Rosneft and NADL or Rosneft and Seadrill (as the case may be) at or before the time it is entered into provided that estimated contractual revenue shall be calculated on the basis of operating day rate, standby rate or any other similar day rates as set out in the service order for the relevant rig (net of any VAT or sales or similar Tax and excluding any initial holding rate) and shall ignore the effect of the Expected Capacity; and
B = Expected Capacity;
“Additional Contract Revenue Deficit”
;
“Additional Contract Revenue Surplus”
has the meaning given in Clause 5.6(B);
“Additional Contract Rolled Forward Amount”
;
“Additional Contract Rolled Forward Surplus Amount”
;
“Additional Drilling Contracts”
means any offshore drilling contracts entered into between the Retained Group and the NADL Group or between the Retained Group and the Seadrill Group (as the case may be) following Completion pursuant to Clause 5 (Extended Co-Operation), which contracts shall be substantially on the terms of the Master Agreement;
“Aggregate Deficit”
;
“Aggregate Surplus”
;
“Aggregate Tier One Liability Cap”
;
“Aggregate Tier Two Liability Cap”
;
“Agreement”
means this Agreement and the Schedules and Attachments hereto (as amended from time to time);
“Anti-Corruption Warranties”
;
“Assessed Settlement Period”
means, in respect of a Settlement Date, the preceding Settlement Period;
“Authority”
means any supranational, state, municipal or local government or any other supranational, governmental, intergovernmental, body, department or organisation or any regulatory body appointed by any of the foregoing;
“Bankruptcy Law”
means the Federal Law of the Russian Federation No. 127-FZ of 26 October 2002 “On Insolvency (Bankruptcy)”;
“BMA Consent”
means the consent of the Bermuda Monetary Authority to the issuance of the Consideration Shares, the Subscription Shares, the Contract Shares and the NADL Additional Contract Shares;
“Bonds Prospectus”
means the prospectus issued by NADL on 13 February 2014 in connection with its proposed issue of the bonds described therein;
“Books and Records”
has its common meaning and includes:
(A) all notices, correspondence, orders, inquiries, drawings, plans, books of account and other documents and all computer disks or tapes or other machine legible programs or other records; and
(B) any documents which require to be maintained and retained according to applicable laws;
“Business Day”
means a day (other than a Saturday or Sunday) on which banks are open for general business in London, New York and Moscow;
“Business Information”
means all information (in whatever form held) including all:
(A) trade secrets, formulas, designs, specifications, drawings, know-how, tools, methodologies, manuals, policies and instructions;
(B) customer lists, sales, marketing and promotional information;
(C) employee information;
(D) business plans and forecasts;
(E) technical or other expertise; and
(F) all accounting and tax records, correspondence, orders and enquiries;
“Carve Out”
;
“Cash”
;
“Cash Tax Saving”
;
“Company”
means RN Burenie LLC, basic information concerning which is set out in Part A of Attachment 1 (Basic information about the Company);
“Company Accounts”
means the audited balance sheet and income statement for the Company as at and for the period ending on the Accounts Date, prepared in accordance with RAS;
“Company Management Information”
;
“Company Warranties”
means the representations and warranties set out in Part A of Schedule 5 (Rosneft Representations and Warranties) and those in Clause 12 (Rosneft Warranties and Covenants) given by Rosneft and “Company Warranty” shall be construed accordingly;
“Completion”
;
“Completion Accounts”
has the meaning given in Paragraph 4.1, 4.2(A) or 4.2(B) (as applicable) of Part A of Schedule 8 (Completion Accounts);
“Completion Adjustment Amount”
means an amount (which may be a positive or negative number) equal to (i) the Completion Net Working Capital Amount (ii) plus the Net Cash / Debt Amount (if such amount is positive) or minus the modulus of the Net Cash / Debt Amount (if such amount is negative);
“Completion Cash Amount”
means the aggregate of the amounts of Cash as at Completion agreed or determined in accordance with Schedule 8 (Completion Accounts);
“Completion Date”
means the date on which Completion takes place;
“Completion Debt Amount”
means the aggregate of the amounts of Debt as at Completion agreed or determined in accordance with Schedule 8 (Completion Accounts);
“Completion Net Working Capital Amount”
means the amount by which the Completion Working Capital Amount is (i) more than the Minimum Working Capital Amount (in which case the Completion Net Working Capital Amount shall be expressed as a positive number), or (ii) less than the Minimum Working Capital Amount (in which case the Completion Net Working Capital Amount shall be expressed as a negative number);
“Completion Working Capital Amount”
means the amount of Working Capital as at Completion agreed or determined in accordance with Schedule 8 (Completion Accounts);
“Conditions”
means the matters listed in Schedule 1 (Conditions to Completion);
“Consideration”
;
“Consideration Deficit”
;
“Consideration Share Price”
means US$9.25;
“Consideration Shares”
means that number of common shares of par value US$5 each in the share capital of NADL the value of which equals the Estimated Consideration (rounded up to the nearest whole number of shares), calculated by reference to the Consideration Share Price;
“Contract Shares”
means:
(A) in relation to the First Offshore Drilling Contract, that number of common shares of par value US$5 each in the share capital of NADL (rounded up to the nearest whole number of shares) which equals A/B where:
A = (i) ***** of the Estimated Drilling Revenue for the First Offshore Drilling Contract (ii) minus any amounts outstanding from Rosneft to NADL under this Agreement as at the Acceptance Date under the First Offshore Drilling Contract; and
B = US$9.25; and
(B) in relation to any Subsequent Offshore Drilling Contract, that number of common shares of par value US$5 each in the share capital of NADL (rounded up to the nearest whole number of shares) which equals A/B where:
A = the Contract Shares Calculation; and
B = US$9.25;
“Contract Shares Calculation”
means in respect of a Subsequent Offshore Drilling Contract:
(A) ***** of the Estimated Drilling Revenue for that Subsequent Offshore Drilling Contract;
(B) minus the Rolled Forward Amount (if any) or plus the Rolled Forward Surplus Amount (if any) as at the Acceptance Date under that Subsequent Offshore Drilling Contract; and
(C) minus any amounts outstanding from Rosneft to NADL under this Agreement as at the Acceptance Date under that Subsequent Offshore Drilling Contract;
“Control”
means, in relation to a person, where a person has (i) direct or indirect control of more than 50% (fifty per cent.) of the voting rights at general meetings of shareholders (participants) or similar managing bodies of that person, (ii) the right to appoint more than 50% (fifty per cent.) of the board of directors, the management board or other management body of that person, or (iii) the right to appoint the chief executive officer (or similar officer) of that person, and “Controlled” and “Controlling” shall be construed accordingly.
“Current NADL Disclosure Letter”
means the Original NADL Disclosure Letter, as supplemented by the Updated NADL Disclosure Letter provided in accordance with Clause 13 (NADL Warranties and Covenants);
“Current Rosneft Disclosure Letter”
means the Original Rosneft Disclosure Letter, as supplemented by the Updated Rosneft Disclosure Letter provided in accordance with Clause 12 (Rosneft Warranties and Covenants);
“Debt”
;
“Dispute Notice”
has the meaning given in Paragraph 3.1 of Part A of Schedule 8 (Completion Accounts);
“Dispute Resolution Process”
means any litigation, proceedings, prosecutions, or arbitrations;
“Disputed Items”
has the meaning given in Paragraph 3.2 of Part A of Schedule 8 (Completion Accounts);
“Draft Completion Accounts”
has the meaning given in Paragraph 1.1 of Part A of Schedule 8 (Completion Accounts);
“Drilling Business”
means the land drilling business undertaken by the Sale Group and activities as are reasonably incidental to the business undertaken by the Sale Group such as the provision of accommodation, catering and transport services;
“Drilling Contracts”
means the Offshore Drilling Contracts and the Onshore Drilling Contracts;
“Due Diligence Commencement Date”
;
“Encumbrance”
means any mortgage, charge, pledge, lien, option, restriction, right of first refusal, right of pre-emption, right to acquire, third party right, interest or claim, other encumbrance or security or equity interest of any kind (or an agreement or commitment to create any of the same);
“Environmental Warranties”
means the Rosneft Warranties set out in Paragraph 13 of Part A of Schedule 5 (Rosneft Representations and Warranties) and “Environmental Warranty” shall be construed accordingly;
“Estimated Adjustment Amount”
means the amount by which the Estimated Consideration is less than the Initial Price or, if the Estimated Consideration is not less than the Initial Price, zero (US$0);
“Estimated Cash Amount”
means the amount of the Completion Cash Amount as estimated in good faith by Rosneft;
“Estimated Consideration”
means an amount equal to the lower of:
(A) the Initial Price; and
(B) (i) the Initial Price;
(ii) plus the Estimated Net Cash / Debt Amount (if such amount is positive) or minus the modulus of the Estimated Net Cash / Debt Amount (if such amount is negative); and
(iii) plus the Estimated Net Working Capital Amount (if such amount is positive) or minus the modulus of the Estimated Net Working Capital Amount (if such amount is negative);
“Estimated Debt Amount”
means the amount of the Completion Debt Amount as estimated in good faith by Rosneft;
“Estimated Drilling Revenue”
means:
(A) in respect of an Offshore Drilling Contract, the amount set out opposite that contract in column 10 of Part A of Schedule 10 (Offshore Drilling Contracts); and
(B) in respect of an Assessed Settlement Period, the amount set out opposite that Settlement Period in column 2 of Part B of Schedule 10 (Offshore Drilling Contracts),
in each case, as adjusted from time to time in accordance with Clause 3.11;
“Estimated Net Cash / Debt Amount”
means the Estimated Cash Amount less the Estimated Debt Amount, which may be a positive or negative number;
“Estimated Net Working Capital Amount”
means the Estimated Working Capital Amount less the Minimum Working Capital Amount, which may be a positive or negative number;
“Estimated Working Capital Amount”
means the amount of the Completion Working Capital Amount, which may be a positive or negative number, as estimated in good faith by Rosneft;
“Exchange Act”
has the meaning given in Paragraph 9(B) of Schedule 6 (NADL Representations and Warranties);
“Existing VTB Leases”
means the rig leases which are in force as at the Signing Date between the Sale Group and VTB Leasing;
“Expected Capacity”
means:
(A) in respect of deep water / floating drilling rigs, 0.94; and
(B) in respect of xxxx-up drilling rigs, 0.97;
“Expert”
has the meaning given in Paragraph 4.2(B) of Part A of Schedule 8 (Completion Accounts);
“FAS”
means the Federal Anti-Monopoly Service of the Russian Federation, or any successor thereto, including any applicable territorial administration thereof;
“FAS Approval”
;
“First Offshore Drilling Contract”
;
“Fundamental NADL Warranties”
means the NADL Warranties set out in Clause 15 (Parties’ Warranties) given by NADL and Paragraphs 1, 2 and 5(B) of Schedule 6 (NADL Representations and Warranties) and “Fundamental NADL Warranty” shall be construed accordingly;
“Fundamental Rosneft Warranties”
means the Rosneft Warranties set out in Clause 15 (Parties’ Warranties) given by Rosneft and Paragraphs 1 and 9 of Part A of Schedule 5 (Rosneft Representations and Warranties) and “Fundamental Rosneft Warranty” shall be construed accordingly;
“General Director”
means the sole executive body of the relevant legal entity;
“IFRS”
means the International Financial Reporting Standards and International Accounting Standards issued by the International Accounting Standards Board together with the interpretations issued by the International Financial Reporting Interpretations Committee of the International Accounting Standards Board (as amended, supplemented or re issued from time to time);
“Information Technology”
means computer hardware, software and networks;
“Initial Price”
;
“Insolvency Event”
means, in relation to a person, any of the following:
(A) declaring itself to be insolvent or filing a debtor’s application to recognise insolvency or being declared unable to pay its debts as they fall due;
(B) the taking of any formal steps with a view to the deferral, rescheduling or other readjustment of all or a particular class of its creditors, or the taking of any formal steps to make a general assignment or arrangement or composition with or for the benefit of the relevant creditors;
(C) any form of liquidation, winding up, receivership, administrative receivership, administration, arrangement or scheme with creditors, moratorium, stay or limitation of creditors’ rights, interim or provisional supervision by the court or by persons appointed by the court (or any equivalent or similar procedure under the law of any jurisdiction in which the relevant person is incorporated, registered, domiciled or resident or carries on business or has assets) being commenced or otherwise in place or under way in relation to it, whether in or out of court;
(D) the appointment of a provisional liquidator, liquidator, administrator, receiver, receiver and manager, administrative receiver or similar officer;
(E) it does not discharge the claims of any creditor related to monetary obligations determined by the court and/or make any mandatory payments (in Russian: obyasatel’niye platezhi) within three (3) months after their due date, or is otherwise incapable of satisfying the claims of any creditor related to monetary obligations and/or to make any mandatory payment;
(F) the settlement of claims of one (1) or more creditors makes it impossible for it to discharge its monetary obligations or to make mandatory payments (in Russian: obyasatel’niye platezhi) and/or other payments in full to its other creditors;
(G) its board of directors, participants or shareholders (as applicable) adopts a resolution to file a petition with a Russian arbitrazh court for its insolvency;
(H) the levying or execution of any judgment, award or order on its property that will materially impair or make impossible its ability to carry on its business activity;
(I) it meets the criteria for insolvency (in Russian: neplatezhesposobnost) and/or property insufficiency (in Russian: nedostatochnost imushestva);
(J) it meets any other insolvency test specified by the Bankruptcy Law or other applicable law; or
(K) anything analogous to the matters set out in (A) to (J) above occurs in relation to that person in any jurisdiction.
“Intellectual Property”
means patents, trademarks, rights in designs, copyrights (including rights in software) and database rights (whether or not any of these is registered and including applications for registration of any such thing) and all rights or forms of protection of a similar nature or having equivalent or similar effect to any of these which may subsist anywhere in the world;
“Intended Completion Date”
;
“Inter-Company Debt”
means the Inter-Company Receivables less the Inter-Company Payables;
“Inter-Company Payables”
means the aggregate of the amounts owing (including interest accrued on all such amounts), from members of the Sale Group to members of the Retained Group (including any distribution declared but not paid by any member of the Sale Group in favour of, or payable but not paid to, any member of the Retained Group);
“Inter-Company Receivables”
means the aggregate of the amounts owing (including interest accrued on all such amounts), from members of the Retained Group to members of the Sale Group (including any distribution declared but not paid by any member of the Retained Group in favour of, or payable but not paid to, any member of the Sale Group);
“Key Agreements”
means this Agreement and the Shareholders’ Agreement;
“Key Employees”
means any officer or director of any member of the Sale Group and any individual who works or performs services under a contract of employment with any member of the Sale Group as at the Signing Date, as listed in Attachment 6;
“Key NADL Warranties”
means the NADL Warranties set out in Clause 15 (Parties’ Warranties) given by NADL and Paragraphs 1 and 5(B) of Schedule 6 (NADL Representations and Warranties);
“Key Rosneft Warranties”
means the Rosneft Warranties set out in Clause 15 (Parties’ Warranties) given by Rosneft and Xxxxxxxxxx 0 (xxxxx xxxx xxxxx xx xxx-Xxxxxxxxxx (X), (X), (X), (X), (X), (X), (X) and (Q)) and 9 of Part A of Schedule 5 (Rosneft Representations and Warranties);
“Key Warranty Disclosure”
;
“Known Matters”
;
“Land Rigs”
means the land rigs details of which are set out in Attachment 3 (Land Rigs);
“Leased Rigs”
means those Land Rigs set out in Part A of Attachment 3 which are, as at the date of this Agreement, leased by the Sale Group;
“Letter of Award”
means the letter of award dated 24 May 2014 setting out Rosneft's commitment to enter into the offshore drilling contracts referred to therein;
“LIBOR”
means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for three (3) month deposits in Dollars as shown on the appropriate Reuters screen page (or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters) on the first day of the relevant period;
“LLC Law”
means the Federal Law of the Russian Federation No. 14-FZ of 8 February 1998 “On Limited Liability Companies”;
“Long Stop Date”
means 31 December 2014;
“Master Agreement”
means the master agreement dated 30 July 2014 in respect of each of the Offshore Rigs between NADL and Rosneft as amended from time to time;
“Material Contract”
means:
(A) any written contract to which any member of the Sale Group is a party which:
(i) is material in the context of the Sale Group’s business; or
(ii) involves payments or receipts of more than US$5,000,000 in any one year; or
(iii) cannot be terminated or cancelled with less than 6 months’ notice; and
(B) the share sale and purchase agreement in respect of the purchase of 100% (one hundred per cent.) participatory interest in Orenburg by the Company dated 1 April 2014;
“Material Orenburg Movable Property” 
means property listed as such in the Current Rosneft Disclosure Letter and any other property with a book value exceeding RUB 1,000,000  (or an equivalent amount in any other currency at the exchange rate of the Central Bank of the Russian Federation as at the Signing Date) in accordance with the accounting records of Orenburg and the Orenburg Subsidiaries (in accordance with RAS) as at 1 January 2014 as disclosed;
“Minimum Working Capital Amount”
;
“NADL Accounts”
means the audited consolidated and combined consolidated carve-out financial statements, including consolidated statement of operations for the years ended December 31, 2013, 2012 and combined consolidated carve-out statement of operations for the year ended December 31, 2011, consolidated statement of comprehensive income for the years ended December 31, 2013, 2012 and combined consolidated carve-out statement of comprehensive income for the year ended December 31, 2011, consolidated balance sheet as of December 31, 2013 and 2012, consolidated statement of cash flows for the years ended December 31, 2013, 2012 and combined consolidated carve-out statement of cash flows for the year ended December 31, 2011, consolidated statement of changes in equity for the years ended December 31, 2013, 2012 and combined consolidated carve-out statement of changes in equity for the year ended December 31, 2011, and notes to them of NADL;
“NADL Additional Contract Shares”
means, in relation to an Additional Drilling Contract with a member of the NADL Group, that number of common shares of US$5 each in the share capital of NADL (rounded up to the nearest whole number of shares) which equals A/B where:
A = (i) ***** of the Additional Contract Estimated Drilling Revenue for that Additional Drilling Contract (ii) minus the Additional Contract Rolled Forward Amount (if any) or plus the Additional Contract Rolled Forward Surplus Amount (if any) as at the Additional Contract Acceptance Date under that Additional Drilling Contract and (iii) minus any amounts outstanding from Rosneft to NADL under this Agreement as at the Additional Contract Acceptance Date under that Additional Drilling Contract; and
B = the higher of: (i) the volume weighted average price as derived from Bloomberg of a common share of NADL for the thirty Business Days prior to the relevant Additional Contract Acceptance Date under that Additional Drilling Contract; and (ii) US$5;
“NADL Approval Documents”
means this Agreement, the Pro Forma Onshore Drilling Contract, the Russian SPA, the Current NADL Disclosure Letter and any other documents being entered into by NADL in connection with the transactions contemplated by this Agreement which are expressly referred to in this Agreement (but excluding the Offshore Drilling Contracts and any related documents and any Additional Drilling Contracts);
“NADL Area”
means:
(A) the North Atlantic region encompassing the territorial waters and outer continental shelf jurisdictions of Norway, the United Kingdom, Iceland, Denmark (including the Faroe Islands), the Netherlands and Greenland (east coast only);
(B) the territorial waters and outer continental shelf jurisdiction of Russia;
(C) such parts of the Baltic Sea, the Gulf of Bothnia and the Black Sea that are not covered by ‎(B); and
(D) all of the Caspian Sea;
“NADL Break Fee”
;
“NADL Data Room”
means the virtual data room made available by NADL containing the documents contained in the DVD attached to the Original NADL Disclosure Letter, the cover of which has been signed by all parties;
“NADL Group”
means NADL and its subsidiaries and subsidiary undertakings from time to time, and shall include the Sale Group from the Completion Date, and “member of the NADL Group” shall be construed accordingly;
“NADL Key Employee”
means the CEO, CFO, Director of Operations, Director of Marketing and Director of Finance of NADL;
“NADL Key Warranty Disclosure”
;
“NADL Known Matters”
;
“NADL Legal Opinions”
;
“NADL Material Adverse Change”
means any event, circumstance, change, development or condition that:
(A) occurs on or after the Signing Date; or
(B) occurred before the Signing Date, but where knowledge or information in respect of such event, circumstances, change, development or condition was not publicly available and generally known by members of the global oil and gas industry prior to the execution of this Agreement and not known by Rosneft prior to the execution of this Agreement,
   which gives rise to, or which is likely to give rise to a material adverse effect on the business, operations, assets, financial position, profits or prospects of the NADL Group, but excluding any of the following:
(a) global economic, global financial or global market conditions (including changes in interest rates, exchange rates or securities or commodity prices); or
(b) any act undertaken by (or omission of) NADL at the written request of Rosneft on or after the Signing Date; or
(c) any act undertaken by (or omission of) NADL pursuant to and in accordance with its obligations under any of the Transaction Documents; or
(d) any act undertaken by any member of the Retained Group (except for the enforcement of any of its rights or exercise of any of its discretions under any of the Transaction Documents); or
(e) any changes generally affecting companies in the sector in which NADL operates and which do not have a disproportionately adverse impact on NADL;
“NADL Material Contract”
means any written contract to which any member of the NADL Group is a party which:
(i) is material in the context of the NADL Group’s business; or
(ii) involves payments or receipts of more than US$10,000,000 in any one year; or
(iii) cannot be terminated or cancelled with less than 6 months’ notice;
“NADL Tax Warranties”
means the NADL Warranties set out in Paragraph 4 of Schedule 6 (NADL Representations and Warranties);
“NADL Warranties”
means the representations and warranties set out in Schedule 6 (NADL Representations and Warranties) and those given by NADL in Clause 13 (NADL Warranties and Covenants) and Clause 15 (Parties’ Warranties) and “NADL Warranty” shall be construed accordingly;
“Net Cash / Debt Amount”
means the Completion Cash Amount less the Completion Debt Amount, which may be a positive or a negative number;
“Notary”
means such public notary as agreed between the parties to notarise the Russian SPA and to make such other arrangements as are necessary for the purpose of transferring the Shares from Rosneft to NADL at Completion;
“Offshore Drilling Contract”
means in respect of each Offshore Rig:
(A) the Master Agreement; and
(B) any Service Order;
“Offshore Rigs”
;
“Onshore Drilling Contracts”
means the drilling contracts in respect of each of the Land Rigs to be entered into pursuant to Clause 4 and on the terms set out in the Pro forma Onshore Drilling Contract;
“Orenburg”
means Orenburg Drilling LLC, basic information concerning which is set out in Part B of Attachment 1 (Basic information about the Subsidiaries);
“Orenburg Accounts”
means the consolidated balance sheet and income statement for Orenburg and the Orenburg Subsidiary as at and for the period ending 31 December 2013 prepared in accordance with IFRS;
“Orenburg Acquisition”
means the acquisition by the Company of Orenburg and the Orenburg Subsidiaries;
“Orenburg Completion Date”
means 1 April 2014;
“Orenburg Seller 1”
means OJSC VTB Leasing, an open joint stock company, incorporated and registered under the laws of the Russian Federation with main state registration number (OGRN) 1037700259244 and having its head office located at 109147, Moscow, Xxxxxxxxxxxxxx xxx. 00, xxx. 0, Xxxxxx;
“Orenburg Sellers”
means Orenburg Seller 1 and LLC FinanceBusinessGroup (in Russian: ООО «ФинансБизнесГрупп»), a limited liability company, incorporated and registered under the laws of the Russian Federation with main state registration number (OGRN) 1067746478183 and having its head office located at 105066, Xxxxxx, Xxxxxx Xxxxxxxxxx xxx. 00X, Xxxxxx;
“Orenburg Shares”
means the 100% (one hundred per cent.) participatory interest in the charter capital of Orenburg;
“Orenburg Subsidiary”
means OBK Service LLC, a limited liability company, incorporated and registered under the laws of the Russian Federation with main state registration number (OGRN) 1105658006475 and having its head office located at 460027, Xxxxxxxx, Xxxxxxxxxxx xxx, 00 Xxxxxx;
“Orenburg Subsidiary Shares”
has the meaning given in Paragraph 3 of Part B of Schedule 5 (Rosneft Representations and Warranties);
“Orenburg Warranties”
means the representations and warranties set out in Part B of Schedule 5 (Rosneft Representations and Warranties) given by Rosneft and “Orenburg Warranty” shall be construed accordingly;
“Orenburg Warranty Claim”
means any claim for breach of any Orenburg Warranty;
“Original NADL Disclosure Letter”
means the letter of the same date as this Agreement written by NADL to Rosneft and delivered to Rosneft before the execution of this Agreement;
“Original Rosneft Disclosure Letter”
means the letter of the same date as this Agreement written by Rosneft to Seadrill and NADL and delivered to Seadrill and NADL before the execution of this Agreement;
“Payment Date”
;
“Postponed Long Stop Date”
;
“Pro forma Onshore Drilling Contract”
;
“Procurement Documentation”
means procurement regulation (in Russian – положение о закупке), procurement plan (in Russian – план закупки) procurement notice (in Russian – извещение о закупке) and other documents and information required under the Procurement Law to lawfully procure goods, works and services;
“Procurement Law”
means Russian Federal Law No. 223-FZ of 18 July 2011 “On Procurement of Goods, Works and Services by Certain Types of Legal Entities”;
“Property” or “Properties”
means freehold, leasehold or other immovable property in any part of the world;
“Prospectus”
means the prospectus issued by NADL on 28 January 2014 in connection with its application to list its common shares on the New York Stock Exchange;
“RAS”
means:
(A) with respect to the period up to and including 31 December 2012, the Russian accounting standards as adopted by Federal Law No. 129-FZ of 21 November 1996 “On Accounting”; and
(B) with respect to the period from and including 1 January 2013, the Russian accounting standards as adopted by Federal Law No 402-FZ of 6 December 2011 “On Accounting”,
as well as accounting policy regulations as adopted by the Russian Ministry of Finance and other generally accepted accounting principles and practices in the Russian Federation;
“Register”
means the Unified State Register of Legal Entities in the Russian Federation;
“Relevant Properties”
means the Properties referred to in Attachment 2 (Relevant Properties);
“Relevant Well Tier One Liability Cap”
has the meaning given in Clause 5.29(A)(i);
“Relevant Well Tier Two Liability Cap”
;
“Retained Group”
means Rosneft, its subsidiaries and subsidiary undertakings from time to time and any other persons Controlled by Rosneft, but excluding members of the Sale Group, and “member of the Retained Group” shall be construed accordingly;
“Revenue Deficit”
;
“Revenue Surplus”
;
“Rig Lease”
;
“Rolled Forward Amount”
;
“Rolled Forward Surplus Amount”
;
“Rosneft Approval Documents”
means this Agreement, the Shareholders’ Agreement, the Onshore Drilling Contracts, the Russian SPA, the Current Rosneft Disclosure Letter and any other documents being entered into by Rosneft (or any member of the Retained Group) in connection with the transactions contemplated by this Agreement which are expressly referred to in this Agreement (but excluding the Offshore Drilling Contracts and any related documents and any Additional Drilling Contracts);
“Rosneft Break Fee”
;
“Rosneft Data Room”
means the virtual data room made available by Rosneft containing the documents contained on the flash drive attached to the Original Rosneft Disclosure Letter, the cover of which has been signed by all parties;
“Rosneft Legal Opinions”
;
“Rosneft’s Solicitors”
means Xxxxx Xxxxx L.L.P., located at Suite 450, Xxxxx Place II, Xxxxxxx xxx. 0, Xxxxxx, 000000, Xxxxxx;
“Rosneft Tax Warranties”
means the Rosneft Warranties set out in Paragraph 18 of Part A of Schedule 5 (Rosneft Representations and Warranties);
“Rosneft Warranties”
means the Company Warranties and/or the Orenburg Warranties and the representations and warranties set out in Clause 15 (Parties’ Warranties) given by Rosneft and “Rosneft Warranty” shall be construed accordingly;
“Rosneft Warranty Claim”
means any claim for breach of any Rosneft Warranty;
“Russian Roubles” or “RUB”
means Russian roubles, the lawful currency of the Russian Federation;
“Russian SPA”
means a contribution agreement in the form set out in Schedule 11 (Russian SPA) in relation to the Shares to be entered into between Rosneft as contributor and NADL as issuer;
“Sale Group”
means the Company and the Subsidiaries and “member of the Sale Group” shall be construed accordingly;
“Sale Xxxxx Xxxxxxxx Adverse Change”

means any event, circumstance, change, development or condition that:
(A) occurs on or after the Signing Date; or
(B) occurred before the Signing Date, but where knowledge or information in respect of such event, circumstances, change, development or condition was not publicly available and generally known by members of the global oil and gas industry prior to the execution of this Agreement and not known by Seadrill or NADL prior to the execution of this Agreement,
which gives rise to, or which is likely to give rise to a material adverse effect on the business, operations, assets, financial position, profits or prospects of the Sale Group taken as a whole, but excluding any of the following:
(a) global economic, global financial or global market conditions (including changes in interest rates, exchange rates or securities or commodity prices); or
(b) any act undertaken by (or omission of) any member of the Retained Group and/or any member of the Sale Group at the written request of Seadrill or NADL on or after the Signing Date; or
(c) any act undertaken by (or omission of) any member of the Retained Group and/or any member of the Sale Group pursuant to and in accordance with its obligations under any of the Transaction Documents; or
(d) any act undertaken by any member of the Seadrill Group or any member of the NADL Group (except for the enforcement of any of its rights or exercise of any of its discretions under any of the Transaction Documents); or
(e) any changes generally affecting companies in the sector in which the Sale Group operates and which do not have a disproportionately adverse impact on the Sale Group; or
(f) any change in applicable law relating to sanctions which does not result in a material impact on the Sale Group;
“Sanctions”
;
“Sanctions Event”
;
“Sanctions Matter”
;
“Seadrill Additional Contract Aggregate Deficit”
has the meaning given in Clause 5.16;
“Seadrill Additional Contract Aggregate Surplus”
;
“Seadrill Additional Contract Rolled Forward Amount”
;
“Seadrill Additional Contract Rolled Forward Surplus Amount”
;
“Seadrill Additional Contract Revenue Deficit”
;
“Seadrill Additional Contract Revenue Surplus”
;
“Seadrill Additional Contract Shares”
means, in relation to an Additional Drilling Contract with a member of the Seadrill Group, that number of common shares of par value US$5 each in the share capital of NADL (rounded up to the nearest whole number of shares) which equals A/B where:
A = (i) ***** of the Additional Contract Estimated Drilling Revenue for that Additional Drilling Contract (ii) minus the Additional Contract Rolled Forward Amount (if any) or plus the Additional Contract Rolled Forward Surplus Amount (if any) as at the Additional Contract Acceptance Date under that Additional Drilling Contract and (iii) minus any amounts outstanding from Rosneft to Seadrill under this Agreement as at the Additional Contract Acceptance Date under that Additional Drilling Contract; and
B = the volume weighted average price as derived from Bloomberg of a common share of NADL for the thirty Business Days prior to the relevant Additional Contract Acceptance Date under that Additional Drilling Contract;
“Seadrill Approval Documents”
means this Agreement and the Shareholders’ Agreement and any other documents being entered into by Seadrill in connection with the transactions contemplated by this Agreement which are expressly referred to in this Agreement (but excluding the Offshore Drilling Contracts and any related documents and any Additional Drilling Contracts);
“Seadrill Group”
means:
(A) Seadrill; and
(B) its subsidiaries and subsidiary undertakings from time to time, any holding company of any of them and all other subsidiaries or subsidiary undertakings of any such holding company, but excluding any member of the NADL Group,
and “member of the Seadrill Group” shall be construed accordingly;
“Seadrill’s Solicitors”
means Xxxxxxxxx and May of Xxx Xxxxxxx Xxx, Xxxxxx XX0X 0XX;
“Seadrill Warranty”
means the representation and warranty set out in Clause 14 (Seadrill Warranty);
“SEC”
has the meaning given in Paragraph 9(B) of Schedule 6 (NADL Representations and Warranties);
“Securities Act”
has the meaning given in Paragraph 9(B) of Schedule 6 (NADL Representations and Warranties);
“Service Order”
means the service order dated 30 July 2014 between Rosneft and the relevant member(s) of the NADL Group in respect of an Offshore Rig;
“Settlement Date”
means 1 June in each calendar year;
“Settlement Period”
means the period from and including 1 April in the prior calendar year to but excluding 1 April in the current calendar year;
“Shareholders’ Agreement”
means the shareholders’ agreement in the agreed form between Rosneft and Seadrill regulating the relationship between Rosneft and Seadrill as shareholders in NADL;
“Shareholder Debt”
means all loans and borrowings in the nature of indebtedness (other than Inter-Company Payables and Inter-Company Receivables in respect of the supply of goods and services) outstanding between any member of the Retained Group and any member of the Sale Group;
“Shares”
means the 100% (one hundred per cent.) participatory interest in the charter capital of the Company;
“Signing Date”
means the date on which this Agreement is entered into by the parties;
“Subscription Price”
means, in respect of all of the Subscription Shares, an amount equal to A x B where:
A = the aggregate number of Subscription Shares; and
B = US$9.25;
“Subscription Shares”
means that number of common shares of par value US$5 each in the share capital of NADL (rounded up to the nearest whole number of shares) as shall result in Rosneft holding (when aggregated with the Consideration Shares and any other common shares of par value US$5 each in the capital of NADL held by the Retained Group) 30% (thirty per cent.) of the share capital of NADL;
“Subsequent Offshore Drilling Contract”
;
“Subsidiaries”
means those companies identified as such in Part B of Attachment 1 (Basic Information about the Subsidiaries);
“Surviving Provisions”
;
“Tajikistan Business”
means all of the business of the Sale Group carried on in Tajikistan on, prior to or after the date of this Agreement, including all property, rights, assets, obligations and liabilities of the Sale Group relating to such business and including without limitation:
(A) the Tajikistan Rig;
(B) any employees or other persons employed by any member of the Sale Group and assigned to the Tajikistan Rig;
(C) all other property, rights and assets of the Sale Group used in or for the purposes of the operation of the Tajikistan Rig and the Tajikistan Contract;
(D) the benefit of all of the agreements, arrangements and commitments to which any member of the Sale Group is a party in relation to the Tajikistan Rig, including without limitation the Tajikistan Contract and in relation to any services provided to the Sale Group for the purposes of the operation of the Tajikistan Rig; and
(E) any and all debts, liabilities or obligations of the Sale Group in relation to any of the foregoing.
“Tajikistan Contract”
means the agreement with OJSC Gazprom No. 277 dated 11 March 2009 in respect of the provision of drilling services in Tajikistan;
“Tajikistan Rig”
means the onshore drilling rig owned by Orenburg which, as at the Signing Date, is located in Tajikistan;
“Tax”
includes, without limitation, taxes on gross or net income, profits and gains, and all other taxes, levies, duties, imposts, charges and withholdings of any fiscal nature, including any excise, property, value added, sales, use, occupation, transfer, franchise and payroll taxes and any social security or social fund contributions together with all penalties, charges and interest relating to any of the foregoing taxes, withholdings and contributions or to any obligations with respect to any of the foregoing taxes, withholdings or contributions;
“Tax Authority”
means any government, state, federal or municipality or any governmental, state, social or other fiscal, revenue, customs or excise authority, body or official or other authority anywhere in the world competent to impose, assess, administer or collect any liability relating to Taxes;
“Tax Relief”
means any loss, relief, allowance, credit, exemption, incentive or set-off in respect of Tax, any deduction in computing income, profits or gains for the purposes of Tax or any right to the repayment of Tax;
“Third Party”
;
“Third Party Rights Clauses”
;
“Tier One Balance”
;
“Tier Two Balance”
;
“Transaction Documents”
;
“Transactions”
means the transactions contemplated by this Agreement, including for the avoidance of doubt the Russian SPA;
“Transfer Application Form”
means an application, which under item 14 of Article 21 of the LLC Law is required to be submitted by the Notary to the competent Authority to incorporate amendments to the Register in respect of the change in ownership of the Shares, and a copy of which under item 15 of Article 21 of the LLC Law is required to be submitted to the Company;
“Updated NADL Disclosure Letter”
;
“Updated Rosneft Disclosure Letter”
;
“U.S. Securities Laws”
;
“VAT”
means value added Tax or any other sales or turnover tax of any relevant jurisdiction;
“Weatherford Business”
means all of the land drilling business of the Retained Group which is currently carried on in Russia which was acquired by the Retained Group pursuant to the Weatherford SPA (the “Weatherford Acquisition”) and including all property, rights and assets of the Retained Group relating to such business which have been purchased, acquired or assumed since the completion date of the Weatherford Acquisition;
“Weatherford Consideration”
;
“Weatherford Option”
;
“Weatherford Option Notice”
;
“Weatherford Option Period”
means the period commencing on the Completion Date and ending on the earlier of (a) four months from the Due Diligence Commencement Date; and (b) the second anniversary of the Completion Date (inclusive);
“Weatherford Option Price”
;
“Weatherford SPA”
means the framework agreement entered into between Weatherford Worldwide Holdings GmbH, Xxxxxxxxxxx Holdings (RUS), LLC, Weatherford Drilling International Holdings (BVI) Ltd. (as Sellers); Xxxxxxxxxxx International public limited company as Guarantor for the Sellers; LLC “Zapad-Xxxxxx-Invest”, LLC “RN-Service”, LLC “City” (as Purchasers); and Rosneft Oil Company (as Guarantor for the Purchasers) dated 10 July 2014;
“Work Order”
;
“Working Capital”
means in respect of the Sale Group the aggregate amount of the following balance sheet line items set out in the statutory form of a balance sheet applicable for the 2013 year-end financial reporting as approved by the Ministry of Finance of the Russian Federation:
i. “Запасы” (inventories), “Налог на добавленную стоимость по приобретенным ценностям” (value added tax on goods purchased), “Дебиторская задолженность” (accounts receivable), “Прочие оборотные активы” (other current assets);
less
ii. “Кредиторская задолженность” (accounts payable), “Доходы будущих периодов” (deferred income), “Оценочные обязательства” (provisions and accruals), “Прочие обязательства” (other liabilities);
but, for the avoidance of doubt:
(a) excluding amounts counted towards Cash and Debt,
(b) excluding those assets and liabilities specifically required to be excluded from the Completion Working Capital Amount by Part C of Schedule 8 (Completion Accounts);
(c) including those assets and liabilities specifically required to be included in the Completion Working Capital Amount by Part C of Schedule 8 (Completion Accounts),
(d) including only those long-term liabilities falling within “Оценочные обязательства” (provisions and accruals) and “Прочие обязательства” (other liabilities) which are of the same nature, type and category as the short-term liabilities included in the Working Capital, and included in the calculation of Minimum Working Capital Amount in the agreed form set out in Part E of Schedule 8 (Completion Accounts); and
(e) excluding obligations similar to provisions for environmental liabilities or asset retirement obligations.
For the avoidance of doubt, Working Capital may be a positive or a negative amount;
“Working Hours”
means 9.00 a.m. to 5.30 p.m. on a Business Day; and
“Working Party”
has the meaning given in Clause 5.25.
1.2
In this Agreement, unless otherwise specified:
(A)
references to Clauses, Paragraphs, Schedules and Attachments are to clauses and paragraphs of, and schedules and attachments to, this Agreement;
(B)
all headings and titles are inserted for convenience only and are to be ignored in the interpretation of this Agreement;
(C)
the Schedules and Attachments form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement;
(D)
references to any document in the “agreed form” means that document in the form agreed by the parties and initialled for the purposes of identification by Rosneft’s Solicitors on behalf of Rosneft and Seadrill’s Solicitors on behalf of Seadrill and NADL (in each case with such amendments as may be agreed by or on behalf of the parties);
(E)
a reference to any statute or statutory provision shall be construed as a reference to the same as it may have been, or may from time to time be, consolidated, amended, modified or re-enacted;
(F)
references to “$”, “Dollars” or “US$” are to the lawful currency of the United States of America;
(G)
use of any gender includes the other genders;
(H)
references to a “company” shall be construed so as to include any corporation or other body corporate, wherever and however incorporated or established;
(I)
references to a “person” shall be construed so as to include any individual, firm, company, corporation, body corporate, Authority, government, state or agency of a state, local or municipal authority or government body or any joint venture, association or partnership (whether or not having separate legal personality);
(J)
the expressions “body corporate”, “holding company”, “subsidiary”, “subsidiary undertaking” and “wholly owned subsidiary” shall have the meaning given in the UK Companies Xxx 0000;
(K)
references to writing shall include any modes of reproducing words in a legible and non-transitory form;
(L)
the rule known as the ejusdem generis rule shall not apply and accordingly general words introduced by the word “other” shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things;
(M)
general words shall not be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words;
(N)
any reference to a “day” (including the phrase “Business Day”) shall mean a period of 24 hours running from midnight to midnight;
(O)
references to times are to London time, unless specifically stated otherwise;
(P)
any reference to any English or Russian (as the case may be) legal term for any action, remedy, method of financial proceedings, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than, in respect of any English legal term, England or, in respect of any Russian legal term, the Russian Federation, be deemed to include what most closely approximates in that jurisdiction to the English or Russian (as the case may be) legal term;
(Q)
any reference to “shares” shall include a reference to participatory interests, units or the charter capital of a company and “shareholder” and “shareholding” will be construed accordingly, and references to “shareholders” will include a reference to participants and members;
(R)
a reference to a “director” shall in the context of a company incorporated in the Russian Federation include a reference to the sole executive body (being either a general director or a managing company or a manager), each member of a collegial executive body and each member of a board of directors (supervisory board);
(S)
any statement in this agreement qualified by the expression “to the best of Rosneft’s knowledge” or “so far as Rosneft is aware” or any similar expression shall mean the actual knowledge of the current CEO and CFO of the Company and the current CEO and CFO of Orenburg, Xxxxx Zielicki and Xxxx Xxxxxxx, having made all reasonable enquiries;
(T)
any statement in this agreement qualified by the expression “to the best of NADL's knowledge” or “so far as NADL is aware” or any similar expression shall mean the actual knowledge of Xxx Xxxx Xxxxxx, Xxxxxx Xxxxxxx-Xxxxxx and the current CEO and CFO of NADL, having made all reasonable enquiries;
(U)
references to “disclosed” or any similar expression shall mean fairly disclosed in sufficient detail so as to allow the recipient of the disclosure to appreciate the meaning, significance and implications of the matters disclosed;
(V)
any amount to be converted from one currency into another currency for the purposes of this Agreement shall be converted into an equivalent amount at the Conversion Rate. For the purposes of this Clause 1.2(V):
(i)
“Conversion Rate” means (i) where one of the currencies is RUB, the official exchange rate established by the Central Bank of Russia for the exchange of the relevant currency into RUB; and (ii) in all other cases the closing spot mid-trade composite London rate for a transaction between the two currencies in question as quoted on Bloomberg, in either case on the date immediately preceding the Relevant Date or, if no such rate is established or quoted on that date, on the preceding date on which such rates are quoted;
(ii)
“Relevant Date” means, save as otherwise provided in this Agreement, the Business Day on which a payment or an assessment is to be made, save that, for the purposes of Clause 8 (Rosneft Actions Pending Completion), the Relevant Date shall mean the Signing Date;
(W)
any reference to a “contingent” liability shall mean, for the purposes of Paragraphs 2(A)(iv), 7(B) and 18(A) of Part A of Schedule 5 (Rosneft Representations and Warranties), a “contingent liability” as determined in accordance with RAS 8/2010 “Estimated Liabilities, Contingent Liabilities, and Contingent Assets;” and for the purposes of Paragraphs 5(C), 9(E), 11(D) and 12(E) of Part A of Schedule 5 (Rosneft Representations and Warranties), a liability dependent on the occurrence or non-occurrence of one or more uncertain future events, and any reference to a “liability”, without further clarification as to whether such liability is actual or contingent, will be deemed to refer to an actual liability only;
(X)
any reference to “any amounts outstanding from Rosneft to NADL under this Agreement” (or similar) or “any amounts outstanding from Rosneft to Seadrill under this Agreement” (or similar) shall mean:
(i)
an arbitration tribunal constituted under Clause 34 (Arbitration) has issued an award or judgment in respect of the amount in respect of which no right of appeal exists or is waived; or
(ii)
the parties have so expressly agreed in writing; or
(iii)
the outstanding amount is due from Rosneft under an undisputed invoice,
and shall exclude, where relevant, any amounts outstanding from Rosneft to NADL or Seadrill (as the case may be) that have already been taken into account in calculating the Rolled Forward Amount, the Rolled Forward Surplus Amount, the Additional Contract Rolled Forward Amount or the Additional Contract Rolled Forward Surplus Amount;
(Y)
where there is any reference to the issue of shares in the share capital of NADL based on a share price of US$9.25 per share, that share price shall be adjusted as necessary to take account of any subdivision or consolidation of the shares in the share capital of NADL; and
(Z)
the parties hereby agree that it is not necessary for any part of this Agreement which is in Russian to be translated into English in order for it to have effect.
2.
NADL ISSUANCE
Issue of Consideration Shares
2.1
NADL shall issue the Consideration Shares to Rosneft in accordance with Clause 2 (NADL Issuance), Clause 10 (Completion) and Schedule 4 (Completion arrangements) and, subject to the terms of this Agreement, Rosneft shall:
(AA)
at Completion, contribute the Shares, free from all Encumbrances, together with all rights attached or accruing to them by entering into the Russian SPA at Completion; and
(BB)
contribute the amount of the Consideration Deficit (if any) in accordance with Clause 2.11,
in each case to the share capital of NADL as payment for the Consideration Shares.
2.2
Each of the Consideration Shares shall be credited as fully paid, with the same rights and ranking pari passu in all respects with the existing fully paid common shares of par value US$5 each in the share capital of NADL. NADL shall issue the Consideration Shares free from all Encumbrances and from all other rights exercisable by or claims by third parties, together with all rights attached or accruing to them at Completion.
2.3
NADL and Seadrill shall procure that all rights of pre-emption over any of the Consideration Shares conferred by the constitutional documents of NADL, by applicable law or in any other way are waived prior to Completion.
2.4
NADL shall be entitled to exercise all rights attached to or accruing to the Shares, including the right to receive all dividends, distributions or return of capital declared, paid or made by the Company on or after the Completion Date.
Issue of Subscription Shares
2.5
At Completion, NADL shall issue the Subscription Shares to Rosneft and Rosneft shall subscribe and pay for the Subscription Shares at an aggregate price equal to the Subscription Price.
2.6
Each of the Subscription Shares shall be credited as fully paid, with the same rights and ranking pari passu in all respects with the existing fully paid common shares of par value US$5 each in the share capital of NADL. NADL shall issue the Subscription Shares free from all Encumbrances and from all other rights exercisable by or claims by third parties, together with all rights attached or accruing to them at Completion.
2.7
NADL and Seadrill shall procure that all rights of pre-emption over any of the Subscription Shares conferred by the constitutional documents of NADL, by applicable law or in any other way are waived prior to Completion.
Valuation of the Shares
2.8
The total value of the Shares (the “Consideration”) shall be calculated and adjusted in accordance with this Clause 2 (NADL Issuance), Clause 11 (Completion Accounts) and Schedule 8 (Completion Accounts).
True-up following Completion Accounts exercise
2.9
If the Completion Adjustment Amount:
(A)
is a positive amount or is zero (US$0); or
(B)
is a negative amount and the modulus of the Completion Adjustment Amount is less than or equal to the Estimated Adjustment Amount,
no adjustment to the Consideration shall be made in respect of the Completion Net Working Capital Amount or the Net Cash/Debt Amount.
2.10
If the Completion Adjustment Amount is a negative amount and the modulus of the Completion Adjustment Amount is more than the Estimated Adjustment Amount, the Consideration shall be reduced by an amount equal to the excess (the “Consideration Deficit”), subject to the provisions of Paragraph 1.5 of Part A of Schedule 8 (Completion Accounts).
2.11
Rosneft shall transfer to NADL an amount equal to the Consideration Deficit in accordance with Clause 2.1 within five Business Days of determination of the Completion Accounts. If the Consideration Deficit is in excess of US$30,000,000, then the Consideration Deficit shall be increased by an amount equal to LIBOR plus 4% (four per cent.) of the Consideration Deficit for the period from (and including) Completion to (but excluding) the date of actual payment.
3.
CONTRACT SHARES
Issue of Contract Shares in relation to Offshore Drilling Contracts
3.1
Within 5 Business Days of the first Acceptance Date which occurs following Completion under any Offshore Drilling Contract (the “First Offshore Drilling Contract”), NADL shall issue Contract Shares to Rosneft in respect of the First Offshore Drilling Contract.
3.2
Within 5 Business Days of any Acceptance Date which occurs thereafter under any Offshore Drilling Contract (each a “Subsequent Offshore Drilling Contract”) NADL shall issue Contract Shares to Rosneft in respect of the Subsequent Offshore Drilling Contract in relation to which the Acceptance Date related. On the issue of such Contract Shares the Rolled Forward Amount (if any) shall then be zero.
3.3
Any Contract Shares issued pursuant to Clause 3.1 and Clause 3.2 shall be credited as fully paid, with the same rights and ranking pari passu in all respects with the existing fully paid common shares of par value US$5 each in the share capital of NADL. NADL shall issue any Contract Shares free from all Encumbrances and from all other rights exercisable by or claims by third parties, together with all rights attached or accruing to them at the time of issue. NADL shall procure that all rights of pre-emption over any of the Contract Shares conferred by the constitutional documents of NADL, by applicable law or in any other way are waived prior to their issue.
True-up on each Settlement Date
3.4
As at each Settlement Date, NADL shall calculate:
(A)
the amount (if any) by which A exceeds B where:
A =
***** of the aggregate Estimated Drilling Revenue in the Assessed Settlement Period; and
B =
***** of the aggregate Actual Drilling Revenue under all of the Offshore Drilling Contracts in the Assessed Settlement Period,
(such amount being the “Revenue Deficit”); or
(B)
the amount (if any) by which X exceeds Y where:
X =
***** of the aggregate Actual Drilling Revenue under all of the Offshore Drilling Contracts in the Assessed Settlement Period; and
Y =
***** of the aggregate Estimated Drilling Revenue in the Assessed Settlement Period,
(such amount being the “Revenue Surplus”); and
(C)
the Rolled Forward Amount (if any) or the Rolled Forward Surplus Amount (if any),
and notify those amounts to Rosneft in writing.
3.5
If there is a Revenue Deficit in respect of the Assessed Settlement Period and the aggregate of: (i) the Revenue Deficit in the Assessed Settlement Period; (ii) plus the Rolled Forward Amount (if any) or minus the Rolled Forward Surplus Amount (if any); and (iii) plus any amounts outstanding from Rosneft to NADL under this Agreement as at the Settlement Date (the “Aggregate Deficit”) is:
(A)
a positive amount and equal to or more than US$10,000,000, then NADL shall receive from Rosneft an amount equal to the Aggregate Deficit within 10 Business Days following receipt of the notice from NADL under Clause 3.4 and the Rolled Forward Amount and the Rolled Forward Surplus Amount shall then each be zero;
(B)
a negative amount, then the Rolled Forward Surplus Amount shall then be equal to the modulus of the Aggregate Deficit; or
(C)
a positive amount and less than US$10,000,000, then no true-up is required at that time and the Rolled Forward Amount shall then be an amount equal to the Aggregate Deficit and the Rolled Forward Surplus Amount shall then be zero.
3.6
If there is a Revenue Surplus in respect of the Assessed Settlement Period and the aggregate of: (i) the Revenue Surplus in the Assessed Settlement Period, (ii) less the Rolled Forward Amount (if any) or plus the Rolled Forward Surplus Amount (if any), (iii) less any amounts outstanding from Rosneft to NADL under this Agreement as at the Settlement Date (the “Aggregate Surplus”) is:
(A)
a positive amount and more than US$10,000,000, then, within 10 Business Days of that Settlement Date, NADL shall issue to Rosneft such number of common shares of par value US$5 each in the share capital of NADL (rounded up to the nearest whole number of shares) as equals A/B where:
A =
the Aggregate Surplus; and
B =     US$9.25 per share,
and the Rolled Forward Amount and the Rolled Forward Surplus Amount shall then be zero;
(B)
a negative amount and more than $10,000,000, then NADL shall receive from Rosneft an amount equal to the Aggregate Surplus within 10 Business Days following receipt of the notice from NADL under Clause 3.4 and the Rolled Forward Amount and the Rolled Forward Surplus Amount shall then each be zero;
(C)
a negative amount and less than or equal to US$10,000,000, then the Rolled Forward Amount shall then be equal to the modulus of the Aggregate Surplus; or
(D)
a positive amount and less than or equal to US$10,000,000, then no true-up is required at that time and the Rolled Forward Surplus Amount shall then be an amount equal to the Aggregate Surplus.
3.7
At the time of the termination or expiry of the last of the Offshore Drilling Contracts and outstanding Additional Drilling Contracts to terminate or expire:
(A)
if there is a Rolled Forward Amount, Rosneft and NADL shall discuss an efficient mechanism for dealing with the remaining Rolled Forward Amount and, failing such agreement, Rosneft shall, either:
(i)
on the Settlement Date immediately following such termination or expiry, elect to waive its dividend rights and Clause 16.9(B) shall apply; or
(ii)
pay such amount to NADL within 10 Business Days following the Settlement Date immediately following such termination or expiry provided that if such amount is subject to Russian withholding tax, Rosneft shall gross up the remaining Rolled Forward Amount in such a way that after deducting Russian withholding tax from the grossed up Rolled Forward Amount NADL receives an amount equal to the Rolled Forward Amount less an amount equal to 50% (fifty per cent.) of the tax being withheld; and
(B)
if there is a Rolled Forward Surplus Amount, within 10 Business Days following the Settlement Date immediately following such termination or expiry, NADL shall issue to Rosneft such number of common shares of par value US$5 each in the share capital of NADL (rounded up to the nearest whole number of shares) as equals A/B where:
A =     the Rolled Forward Surplus Amount; and
B =     US$9.25 per share,
and the Rolled Forward Surplus Amount shall then be zero.
3.8
Any shares issued pursuant to Clause 3.6 or 3.7 shall be credited as fully paid, with the same rights and ranking pari passu in all respects with the existing fully paid common shares of par value US$5 each in the share capital of NADL. NADL shall issue any shares issued pursuant to Clause 3.6 or 3.7 free from all Encumbrances and from all other rights exercisable by or claims by third parties, together with all rights attached or accruing to them at the time of issue. NADL shall procure that all rights of pre-emption over any of the shares issued pursuant to Clause 3.6 or 3.7 conferred by the constitutional documents of NADL, by applicable law or in any other way are waived prior to their issue.
3.9
On each issue of Contract Shares or fully paid common shares of par value US$5 each in the share capital of NADL under Clause 3.6 or 3.7, NADL shall deliver a share certificate for the relevant Contract Shares or fully paid common shares of par value US$5 each in the share capital of NADL in the name of Rosneft.
3.10
Any Rolled Forward Amount or Rolled Forward Surplus Amount shall increase by an amount equal to LIBOR plus 4% (four per cent.), which shall accrue from day to day and shall form part of the Rolled Forward Amount or Rolled Forward Surplus Amount (as the case may be).
3.11
If, prior to the Acceptance Date in respect of an Offshore Drilling Contract, Rosneft and NADL agree that the amount or timing of the Actual Drilling Revenue in respect of all Settlement Periods estimated to be earned from that Offshore Drilling Contract over the term of that Offshore Drilling Contract is different from that set out in Part C of Schedule 10 (Offshore Drilling Contracts), the parties shall make corresponding adjustments to the amounts set out in column 10 of Part A of Schedule 10 (Offshore Drilling Contracts) and / or column 2 of Part B of Schedule 10 (Offshore Drilling Contracts), and Schedule 10 (Offshore Drilling Contracts) and the number of Contract Shares to be issued pursuant to Clause 3.2 shall both be adjusted accordingly. The adjustments to Schedule 10 (Offshore Drilling Contracts) and to the Estimated Drilling Revenue pursuant to this Clause shall only be made in respect of an Offshore Drilling Contract if agreed by Rosneft and NADL prior to the Acceptance Date in respect of that Offshore Drilling Contract.
4.
ONSHORE DRILLING CONTRACTS
4.1
Rosneft agrees that, subject to the satisfaction of the Conditions in Paragraphs 4 and 6(A) of Schedule 1 (Conditions to Completion), it shall procure that the relevant members of the Retained Group and the relevant members of the Sale Group execute each of the Onshore Drilling Contracts on or prior to, but conditional on, Completion. Rosneft agrees that the execution of each of the Onshore Drilling Contracts shall comply with the Procurement Law and Procurement Documentation of the relevant members of the Retained Group.
VTB Rigs
4.2
Rosneft shall procure that, between the Signing Date and Completion, the Sale Group shall enter into lease contracts with VTB Leasing for the lease of 28 (twenty eight) land rigs, details of which are set out in Part B of Attachment 3 (the “VTB Rigs”) (the “VTB Leases”). The VTB Leases shall be on substantially the same terms as the leases which are already in place as at the Signing Date between the Sale Group and VTB-Leasing and shall reflect the following principles:
(A)
the VTB Rigs shall operate in Nefteyugansk;
(B)
the VTB Rigs shall be delivered to the Sale Group at DDP Nefteyugansk (Pyt-Yakh) rail station (the “Delivery Location”) during the period from October 2014 to June 2015;
(C)
the monthly lease payments to VTB Leasing in respect of each VTB Rig shall be as set out in the lease payment schedule in Part A of Attachment 7 (VTB Schedule);
(D)
the Sale Group shall have the option exercisable at any time during the term of such VTB Leases to require VTB-Leasing to sell to the Sale Group such VTB Rigs as the Sale Group shall designate in writing. The purchase price for each VTB Rig shall be equal to the amount set out in the table entitled “ОРИЕНТИРОВОЧНЫЙ ГРАФИК ЛИЗИНГОВЫХ ПЛАТЕЖЕЙ” in each of Part B, Part C, Part D or Part E (as the case may be) of Attachment 7 (VTB Schedule); and
(E)
VTB Leasing shall not be entitled to terminate the VTB Leases as a result of the change in ownership or control of the Sale Group pursuant to this Agreement and the Russian SPA and no break fee, termination payments, penalties or similar liabilities shall arise under the VTB Leases as a result of such change in ownership or control.
4.3
Subject to the entry into of the VTB Leases and the satisfaction of the Conditions in Paragraphs 4 and 6(A) of Schedule 1 (Conditions to Completion), Rosneft shall procure that the relevant members of the Retained Group and the relevant members of the Sale Group execute an Onshore Drilling Contract in respect of each of the VTB Rigs on or prior to, but conditional on, Completion. The parties agree that the Onshore Drilling Contracts will provide for the Retained Group to pay for the mobilisation from the Delivery Location to the drilling location.
4.4
Rosneft shall procure that the day rate for:
(D)
the VTB Rigs under the Onshore Drilling Contracts shall, at all times during the five year term of such Onshore Drilling Contracts, be no less than:
(i)
***** per day (which number shall be increased by inflation of 6 per cent. per annum) (excluding VAT) for the Uralmash VTB Rigs; and
(ii)
***** per day (which number shall be increased by inflation of 6 per cent. per annum) (excluding VAT) for the ZJ-50DBS VTB Rigs; and
(E)
the Leased Rigs under the Onshore Drilling Contracts shall, at all times during the five year term of such Onshore Drilling Contracts, be no less than:
(i)
***** per day (which number shall be increased by inflation of 6 per cent. per annum) (excluding VAT) for the Uralmash Leased Rigs; and
(ii)
***** per day (which number shall be increased by inflation of 6 per cent. per annum) (excluding VAT) for the ZJ-50DBS Leased Rigs.
Rosneft agrees that the provision of this Clause shall apply notwithstanding any relocation of any such VTB Rigs or Leased Rigs (as the case may be) from one region to another during the term of the Onshore Drilling Contracts.
5.
EXTENDED CO-OPERATION
Transaction Documents
5.1
Each of Rosneft, Seadrill and NADL agrees that it shall seek to extend its co-operation with the other parties beyond Completion and on or prior to, but conditional on, Completion Seadrill and Rosneft shall execute the Shareholders’ Agreement.
Additional Drilling Contracts
5.2
Seadrill agrees and acknowledges that Rosneft’s objective is to increase its shareholding in NADL to 50% (fifty per cent.) less one (1) share in NADL and that this objective ideally will be achieved through the entry into of Additional Drilling Contracts and the related issue of NADL Additional Contract Shares to Rosneft or the transfer of Seadrill Additional Contract Shares to Rosneft pursuant to this Clause 5 (Extended Co-Operation). However, the parties further agree that to the extent that the issue of NADL Additional Contract Shares to Rosneft when combined with the transfer of Seadrill Additional Contract Shares to Rosneft, would result in Rosneft's shareholding in NADL exceeding 50% (fifty per cent.) less one (1) share in NADL then, notwithstanding any other provision in this Clause 5 (Extended Co-Operation), NADL shall only issue such number of NADL Additional Contract Shares to Rosneft or Seadrill shall only transfer such number of Seadrill Additional Contract Shares to Rosneft as results in Rosneft's shareholding in NADL not exceeding 50% (fifty per cent.) less one (1) share in NADL with an amount attributable to the value of the NADL Additional Contract Shares not issued or Seadrill Additional Contract Shares not transferred, as the case may be, being satisfied by a cash payment to Rosneft by NADL (if the amount is attributable to an Additional Drilling Contract with a member of the NADL Group) or Seadrill (if the amount is attributable to an Additional Drilling Contract with a member of the Seadrill Group) at the same time as the issue of the NADL Additional Contract Shares or transfer of the Seadrill Additional Contract Shares that are issued or transferred, respectively.
5.3
The parties shall bear their own costs of identifying and implementing opportunities and entering into any Additional Drilling Contracts unless otherwise agreed.
Additional Drilling Contracts with the NADL Group
5.4
Subject to Clause 5.2, if any member of the Retained Group and any member of the NADL Group agree to enter into any Additional Drilling Contract, then NADL shall issue NADL Additional Contract Shares to Rosneft within 5 Business Days from the Additional Contract Acceptance Date in respect of the relevant drilling rig.
5.5
Any NADL Additional Contract Shares issued pursuant to Clause 5.4 shall be credited as fully paid, with the same rights and ranking pari passu in all respects with the existing fully paid common shares of par value US$5 each in the share capital of NADL. NADL shall issue any NADL Additional Contract Shares free from all Encumbrances and from all other rights exercisable by or claims by third parties, together with all rights attached or accruing to them at the time of issue. NADL shall procure that all rights of pre-emption over any of the NADL Additional Contract Shares conferred by the constitutional documents of NADL, by applicable law or in any other way are waived prior to their issue.
True-up on each Settlement Date
5.6
As at each Settlement Date, NADL shall calculate:
(C)
the amount (if any) by which A exceeds B where:
A =
***** of the aggregate Additional Contract Estimated Drilling Revenue in the Assessed Settlement Period under all Additional Drilling Contracts to which any member of the NADL Group is a party and in respect of which the Additional Contracts Acceptance Date has occurred; and
B =
***** of the aggregate Additional Contract Actual Drilling Revenue in the Assessed Settlement Period under all Additional Drilling Contracts to which any member of the NADL Group is party,
(such amount being the “Additional Contract Revenue Deficit”); or
(D)
the amount (if any) by which X exceeds Y where:
X =
***** of the aggregate Additional Contract Actual Drilling Revenue in the Assessed Settlement Period under all Additional Drilling Contracts to which any member of the NADL Group is party; and
Y =
***** of the aggregate Additional Contract Estimated Drilling Revenue in the Assessed Settlement Period under all Additional Drilling Contracts to which any member of the NADL Group is a party and in respect of which the Additional Contracts Acceptance Date has occurred,
(such amount being the “Additional Contract Revenue Surplus”); and
(E)
the Additional Contract Rolled Forward Amount (if any) or the Additional Contract Rolled Forward Surplus Amount (if any),
and notify those amounts to Rosneft in writing.
5.7
If there is an Additional Contract Revenue Deficit in respect of the Assessed Settlement Period and the aggregate of: (i) the Additional Contract Revenue Deficit in the Assessed Settlement Period; (ii) plus the Additional Contract Rolled Forward Amount (if any) or minus the Additional Contract Rolled Forward Surplus Amount (if any); and (iii) plus any amounts outstanding from Rosneft to NADL under this Agreement as at the Settlement Date in accordance with Clause 16.9 (the “Additional Contract Aggregate Deficit”) is:
(A)
a positive amount and more than US$10,000,000, then NADL shall receive from Rosneft an amount equal to the Additional Contract Aggregate Deficit within 10 Business Days following receipt of the notice from NADL under Clause 5.6 and the Additional Contract Rolled Forward Amount and the Additional Contract Rolled Forward Surplus Amount shall then each be zero;
(B)
a negative amount, then the Additional Contract Rolled Forward Surplus Amount shall then be equal to the modulus of the Additional Contract Aggregate Deficit; or
(C)
a positive amount and less than or equal to US$10,000,000, then no true-up is required at that time and the Additional Contract Rolled Forward Amount shall then be an amount equal to the Additional Contract Aggregate Deficit and the Additional Contract Rolled Forward Surplus Amount shall then be zero.
5.8
If there is an Additional Contract Revenue Surplus in respect of the Assessed Settlement Period and the aggregate of: (i) the Additional Contract Revenue Surplus in the Assessed Settlement Period, (ii) less the Additional Contract Rolled Forward Amount (if any) or plus the Additional Contract Rolled Forward Surplus Amount (if any), (iii) less any amounts outstanding from Rosneft to NADL under this Agreement as at the Settlement Date (the “Additional Contract Aggregate Surplus”) is:
(A)
a positive amount and more than $10,000,000, then, within 10 Business Days following that Settlement Date, NADL shall issue to Rosneft such number of NADL Additional Contract Shares (rounded up to the nearest whole number of shares) as equals A/B where:
A =
the Additional Contract Aggregate Surplus; and
B =     the share price used to calculate the number of NADL Additional Contract Shares when they were issued, being “B” in the definition of NADL Additional Contract Shares,
and the Additional Contract Rolled Forward Amount and the Additional Contract Rolled Forward Surplus Amount shall then be zero;
(B)
a negative amount and more than $10,000,000, then NADL shall receive from Rosneft an amount equal to the Additional Contract Aggregate Surplus within 10 Business Days following receipt of the notice from NADL under Clause 5.6 and the Additional Contract Rolled Forward Amount and the Additional Contract Rolled Forward Surplus Amount shall then each be zero;
(C)
a negative amount and less than or equal to US$10,000,000, then the Additional Contract Rolled Forward Amount shall then be equal to the modulus of the Additional Contract Aggregate Surplus; or
(D)
a positive amount and less than or equal to $10,000,000, then no true up is required at that time and the Additional Contract Rolled Forward Surplus Amount shall be an amount equal to the Additional Contract Aggregate Surplus.
5.9
At the time of the termination or expiry of the last of the Offshore Drilling Contracts and outstanding Additional Drilling Contracts to which a member of the NADL Group is a party to terminate or expire:
(A)
if there is an Additional Contract Rolled Forward Amount, Rosneft and NADL shall discuss an efficient mechanism for dealing with the remaining Additional Contract Rolled Forward Amount and, failing such agreement, Rosneft shall, either:
(i)
on the Settlement Date immediately following such termination or expiry, elect to waive its dividend rights and Clause 16.9(B) shall apply; or
(ii)
pay such amount to NADL within 10 Business Days following the Settlement Date following such termination or expiry provided that if such amount is subject to Russian withholding tax, Rosneft shall gross up the remaining Rolled Forward Amount in such a way that after deducting Russian withholding tax from the grossed up Rolled Forward Amount NADL receives an amount equal to the Rolled Forward Amount less an amount equal to 50% (fifty per cent.) of the tax being withheld; and
(B)
if there is an Additional Contract Rolled Forward Surplus Amount, within 10 Business Days following such termination or expiry, NADL shall issue to Rosneft such number of common shares of par value US$5 each in the share capital of NADL (rounded up to the nearest whole number of shares) as equals A/B where:
A =     the Additional Contract Rolled Forward Surplus Amount; and
B =
the share price used to calculate the number of NADL Additional Contract Shares when they were issued, being “B” in the definition of NADL Additional Contract Shares,
and the Additional Contract Rolled Forward Surplus Amount shall then be zero.
5.10
On each issue of NADL Additional Contract Shares, NADL shall deliver a share certificate for the relevant NADL Additional Contract Shares in the name of Rosneft.
5.11
Any Additional Contract Rolled Forward Amount and Additional Contract Rolled Forward Surplus Amount shall increase by an amount equal to LIBOR plus 4% (four per cent.), which shall accrue from day to day and shall form part of the Additional Contract Rolled Forward Amount or Additional Contract Rolled Forward Surplus Amount (as the case may be).
5.12
Where practicable, the parties will seek to combine and consolidate the true-up mechanisms and the provisions dealing with the issuance of the Contract Shares and the NADL Additional Contract Shares in Clause 3 (Contract Shares) and this Clause 5 (Extended Co-Operation) on any Settlement Date, Acceptance Date or Additional Contract Acceptance Date taking into account the differences in the share prices used in the calculations of the Contract Shares and the NADL Additional Contract Shares, including with the aim of simplifying the true-up provisions.
Additional Drilling Contracts with the Seadrill Group
5.13
Subject to Clause 5.2, if any member of the Retained Group and any member of the Seadrill Group agree to enter into any Additional Drilling Contract then Seadrill shall within 5 Business Days from the Additional Contract Acceptance Date in respect of the relevant drilling rig either:
(A)
if Rosneft holds shares representing less than 50% (fifty per cent.) less one (1) share in NADL of all of the issued shares in NADL, transfer Seadrill Additional Contract Shares to Rosneft, provided that to the extent that the transfer of Seadrill Additional Contract Shares to Rosneft would result in Seadrill holding less than 10% (ten per cent.) of the share capital of NADL at such time, Seadrill shall satisfy its obligations under this Clause 5.13 by the transfer of an equivalent amount in cash to Rosneft; or
(B)
if Rosneft holds shares representing 50% (fifty per cent.) less one (1) share in NADL or more of all the issued shares in NADL, pay in cash to Rosneft an amount equal to (i) ***** of the Additional Contract Estimated Drilling Revenue for that Additional Drilling Contract (ii) minus the Seadrill Additional Contract Rolled Forward Amount (if any) or plus the Seadrill Additional Contract Rolled Forward Surplus Amount (if any) in each case as at the Additional Contract Acceptance Date under that Additional Drilling Contract and (iii) minus any amounts outstanding from Rosneft to Seadrill under this Agreement as at the Additional Contract Acceptance Date under that Additional Drilling Contract.
5.14
Any Seadrill Additional Contract Shares transferred pursuant to Clause 5.13 shall be fully paid and transferred free from all Encumbrances and from all other rights exercisable by or claims by third parties, together with all rights attached or accruing to them at the date of transfer. On each transfer of Seadrill Additional Contract Shares, Seadrill shall deliver an executed form of transfer in the form required by applicable law and NADL shall deliver a share certificate for the relevant Seadrill Additional Contract Shares in the name of Rosneft.
True-up on each Settlement Date
5.15
As at each Settlement Date, Seadrill shall calculate:
(A)
the amount (if any) by which A exceeds B where:
A =
***** of the aggregate Additional Contract Estimated Drilling Revenue in the Assessed Settlement Period under all Additional Drilling Contracts to which any member of the Seadrill Group is a party and in respect of which the Additional Contracts Acceptance Date has occurred; and
B =
***** of the aggregate Additional Contract Actual Drilling Revenue in the Assessed Settlement Period under all Additional Drilling Contracts to which any member of the Seadrill Group is party,
(such amount being the “Seadrill Additional Contract Revenue Deficit”); or
(B)
the amount (if any) by which X exceeds Y where:
X =
***** of the aggregate Additional Contract Actual Drilling Revenue in the Assessed Settlement Period under all Additional Drilling Contracts to which any member of the Seadrill Group is party; and
Y =
***** of the aggregate Additional Contract Estimated Drilling Revenue in the Assessed Settlement Period under all Additional Drilling Contracts to which any member of the Seadrill Group is a party and in respect of which the Additional Contracts Acceptance Date has occurred,
(such amount being the “Seadrill Additional Contract Revenue Surplus”); and
(C)
the Seadrill Additional Contract Rolled Forward Amount (if any) or the Seadrill Additional Contract Rolled Forward Surplus Amount (if any),
and notify those amounts to Rosneft in writing.
5.16
If there is a Seadrill Additional Contract Revenue Deficit in respect of the Assessed Settlement Period and the aggregate of: (i) the Seadrill Additional Contract Revenue Deficit in the Assessed Settlement Period; (ii) plus the Seadrill Additional Contract Rolled Forward Amount (if any) or minus the Seadrill Additional Contract Rolled Forward Surplus Amount (if any); and (iii) plus any amounts outstanding from Rosneft to Seadrill under this Agreement as at the Settlement Date in accordance with Clause 16.9 (the “Seadrill Additional Contract Aggregate Deficit”) is:
(A)
a positive amount and more than US$10,000,000, then Seadrill shall receive from Rosneft an amount equal to the Seadrill Additional Contract Aggregate Deficit within 10 Business Days following receipt of the notice from Seadrill under Clause 5.15 and the Seadrill Additional Contract Rolled Forward Amount and the Seadrill Additional Contract Rolled Forward Surplus Amount shall then each be zero;
(B)
a negative amount, then the Seadrill Additional Contract Rolled Forward Surplus Amount shall then be equal to the modulus of the Seadrill Additional Contract Aggregate Deficit; or
(C)
a positive amount and less than or equal to US$10,000,000, then no true-up is required at that time and the Seadrill Additional Contract Rolled Forward Amount shall then be an amount equal to the Seadrill Additional Contract Aggregate Deficit and the Seadrill Additional Contract Rolled Forward Surplus Amount shall then be zero.
5.17
If there is a Seadrill Additional Contract Revenue Surplus in respect of the Assessed Settlement Period and the aggregate of: (i) the Seadrill Additional Contract Revenue Surplus in the Assessed Settlement Period, (ii) less the Seadrill Additional Contract Rolled Forward Amount (if any) or plus the Seadrill Additional Contract Rolled Forward Surplus Amount (if any), (iii) less any amounts outstanding from Rosneft to Seadrill under this Agreement as at the Settlement Date (the “Seadrill Additional Contract Aggregate Surplus”) is:
(A)
a positive amount and more than $10,000,000, then, within 10 Business Days following that Settlement Date, Seadrill shall transfer to Rosneft such number of Seadrill Additional Contract Shares (rounded up to the nearest whole number of shares) as equals A/B where:
A =
the Seadrill Additional Contract Aggregate Surplus; and
B =     the share price used to calculate the number of Seadrill Additional Contract Shares when they were transferred, being “B” in the definition of Seadrill Additional Contract Shares,
and the Seadrill Additional Contract Rolled Forward Amount and the Seadrill Additional Contract Rolled Forward Surplus Amount shall then be zero;
(B)
a negative amount and more than $10,000,000, then Seadrill shall receive from Rosneft an amount equal to the Seadrill Additional Contract Aggregate Surplus within 10 Business Days following receipt of the notice from Seadrill under Clause 5.15 and the Seadrill Additional Contract Rolled Forward Amount and the Seadrill Additional Contract Rolled Forward Surplus Amount shall then each be zero;
(C)
a negative amount and less than or equal to US$10,000,000, then the Seadrill Additional Contract Rolled Forward Amount shall then be equal to the modulus of the Seadrill Additional Contract Aggregate Surplus; or
(D)
a positive amount and less than or equal to $10,000,000, then no true up is required at that time and the Seadrill Additional Contract Rolled Forward Surplus Amount shall be an amount equal to the Seadrill Additional Contract Aggregate Surplus.
5.18
Any Seadrill Additional Contract Rolled Forward Amount and Seadrill Additional Contract Rolled Forward Surplus Amount shall increase by an amount equal to LIBOR plus 4% (four per cent.), which shall accrue from day to day and shall form part of the Seadrill Additional Contract Rolled Forward Amount or Seadrill Additional Contract Rolled Forward Surplus Amount (as the case may be).
Monitoring
5.19
Each of the parties shall appoint a management representative (the “Relationship Managers”). The Relationship Managers shall meet at such times and places as the Relationship Managers shall determine (but excluding in the territory of Russia, unless otherwise agreed by the Relationship Managers), subject to such meetings taking place at least on a quarterly basis. At the meetings of the Relationship Managers:
(A)
the Rosneft Relationship Manager shall discuss the onshore and offshore drilling requirements of the Retained Group, including its proposed work programme;
(B)
the NADL Relationship Manager and the Seadrill Relationship Manager shall discuss the future availability of onshore and offshore drilling rigs within the Seadrill Group and the NADL Group, including the type of rigs available and applicable rates; and
(C)
the Relationship Managers shall discuss progress towards meeting the objective described in Clause 5.2 and other areas of possible co-operation between the Retained Group, the NADL Group and the Seadrill Group.
Further Co-operation
5.20
If the parties agree to award any additional onshore contract opportunities to the Company, the parties will negotiate in good faith to agree arrangements to provide the Retained Group with remuneration or commission in respect thereof.
Onshore Drilling Contracts
5.21
After Completion, NADL shall procure that no relevant member of the Sale Group terminates any of the Onshore Drilling Contracts before the expiry of its term other than in accordance with the terms of the relevant Onshore Drilling Contract (subject to proper performance by the relevant members of the Retained Group).
5.22
Rosneft and NADL shall work together in good faith to develop and agree Work Orders in respect of all of the Land Rigs on the terms and subject to the conditions set out in the Onshore Drilling Contracts on an annual basis (or at such frequency as shall be agreed between Rosneft and NADL) for a period of five (5) years following the Completion Date. Rosneft and NADL agree that the process of developing and agreeing Work Orders is not intended to be an opportunity for the Retained Group or the Sale Group to renegotiate the commercial terms of the Onshore Drilling Contracts.
5.23
The parties agree that the intention is for the Sale Group to make the Land Rigs available to Rosneft under the Onshore Drilling Contracts. Rosneft shall procure that all of the Land Rigs shall be the subject of a Work Order between the Retained Group and the Sale Group at all times throughout the five (5) year period following the Completion Date and shall pay on demand to NADL any losses suffered by NADL and/or any member of the Sale Group if any of the Land Rigs are not so subject (subject in each case to NADL acting in accordance with Clause 5.22 and the relevant members of the Sale Group not unreasonably withholding their agreement to the Work Orders in accordance with the Onshore Drilling Contract).
5.24
NADL shall procure that the relevant members of the Sale Group do not unreasonably withhold their agreement to the Work Orders as described in Clause 5.23. If any member of the Sale Group unreasonably withholds their agreement to the Work Orders, NADL shall pay on demand to Rosneft any losses suffered by Rosneft and/or any member of the Retained Group.
Joint working party
5.25
Rosneft and NADL shall establish a working party (the “Working Party”) in relation to the Onshore Drilling Contracts. Each of Rosneft and NADL shall appoint 5 representatives (or such other number as Rosneft and NADL shall agree from time to time) to the Working Party. The Working Party shall meet in person or by telephone at a minimum on a fortnightly basis.
5.26
In the period between the Signing Date and 31 August 2014, Rosneft and NADL shall procure that the Working Party shall:
(A)
develop fair and manageable key performance indicators for monitoring the performance of the various parties to the Onshore Drilling Contracts;
(B)
develop a performance based incentive programme that aligns the parties’ respective goals and objectives for achieving solid drilling performance metrics under a profitable economic incentive; and
(C)
replace Appendices 4.3 and 4.4 of the Pro forma Onshore Drilling Contract with provisions which reflect the agreements reached in relation to (A) and (B) above.
5.27
In the period between the Signing Date and Completion, Rosneft and NADL shall procure that the Working Party shall:
(A)
prepare and finalise each of the Onshore Drilling Contracts based on the Pro forma Onshore Drilling Contract; and
(B)
prepare and agree the initial Work Orders which will be signed at Completion for all of the Land Rigs under the Onshore Drilling Contracts.
5.28
The parties agree that, subject to Clause 5.26 and 5.27, the only changes that should be made to the Pro forma Onshore Drilling Contract should be such changes as are reasonably necessary to deal with business processes, logistical and drilling issues and norms arising in each specific region.
Liability caps under the Onshore Drilling Contracts
5.29
Notwithstanding anything to the contrary in any of the Onshore Drilling Contracts, but subject to Clauses 5.31 and 5.32:
(A)
the maximum aggregate liability of the NADL Group (subject to Clauses 5.29(B) and (C)):
(i)
in respect of each well under the Onshore Drilling Contracts shall be:
(a)
where there has been negligence of the NADL Group, *****; and
(b)
where there has been gross negligence of the NADL Group, *****,
(such appropriate amount being the "Relevant Well Tier One Liability Cap"); and
(ii)
in respect of any and all xxxxx under all Onshore Drilling Contracts shall be ***** in aggregate (the "Aggregate Tier One Liability Cap");
(B)
where the aggregate liability of the NADL Group under the Onshore Drilling Contracts in respect of all xxxxx reaches the Aggregate Tier One Liability Cap, then, in respect of all further xxxxx under any and all Onshore Drilling Contracts after that time, the maximum aggregate liability of the NADL Group (subject to Clause 5.29(C)):
(i)
in respect of each such well under the Onshore Drilling Contracts shall be:
(a)
where there has been negligence of the NADL Group, reduced from ***** to *****;
(b)
where there has been gross negligence of the NADL Group, reduced from ***** to *****,
(such appropriate amount being the "Relevant Well Tier Two Liability Cap"); and
(ii)
in respect of any and all xxxxx under all Onshore Drilling Contracts shall be ***** in aggregate (the "Aggregate Tier Two Liability Cap"); and
(C)
where the aggregate liability of the NADL Group under the Onshore Drilling Contracts in respect of all xxxxx reaches the Aggregate Tier Two Liability Cap, then, in respect of all further xxxxx under any and all Onshore Drilling Contracts after that time, the maximum aggregate liability of the NADL Group in respect of each such well under the Onshore Drilling Contracts shall be:
(i)
where has been negligence of the NADL Group, reduced from ***** to *****; and
(ii)
where has been gross negligence of the NADL Group, reduced from ***** to *****,
(such appropriate amount being the "Relevant Well Tier Three Liability Cap").
5.30
Rosneft shall procure that the Retained Group shall give effect to the provisions set out in Clause 5.29 and, to the extent that payments are made by the NADL Group at any time in excess of the liability caps set out in Clause 5.29, then Rosneft shall pay to NADL promptly on demand the difference between the amount paid by the NADL Group and the amount that should have been paid by the NADL Group in accordance with Clause 5.29. For the avoidance of doubt notwithstanding anything to the contrary in this Agreement, but subject to the caps on liability provided for in Clauses 5.29 to 5.33 (inclusive), the parties agree that liability under the Onshore Drilling Contracts shall be assessed under the terms of those Onshore Drilling Contracts.
5.31
The parties agree that, in the event that any of the rates set out in Appendix 4.1 of the Onshore Drilling Contracts increase, then each of the liability caps set out in Clause 5.29 above shall be increased by an amount equal to X in the following formula:
X = Y x (Z x 0.5)
where:
Y =
the relevant liability cap immediately prior to the operation of this Clause 5.31; and
Z =
the percentage by which the rates set out in Appendix 4.1 of the Onshore Drilling Contracts have increased.
5.32
The parties agree that if Rosneft has a claim in respect of a well under an Onshore Drilling Contract and:
(A)
the aggregate liability of the NADL Group in respect of all xxxxx under any and all Onshore Drilling Contracts has not then reached the Aggregate Tier One Liability Cap; and
(B)
the balance of the Aggregate Tier One Liability Cap remaining after all previous claims in respect of xxxxx under any and all Onshore Drilling Contracts have either been determined under the dispute resolution provisions of the Onshore Drilling Contracts or settled between the parties to the relevant Onshore Drilling Contract (the "Tier One Balance") is less than the lower of:
(i)
the value of the claim; and
(ii)
the Relevant Well Tier One Liability Cap,
then Rosneft shall have the right by written notice to NADL to elect to make the claim instead subject to the Aggregate Tier Two Liability Cap and the Relevant Well Tier Two Liability Cap. Upon such notice from Rosneft being received by NADL, the Aggregate Tier One Liability Cap shall be reduced by, and the Aggregate Tier Two Liability Cap shall be increased by, the Tier One Balance, but:
(x)     the Relevant Well Tier Two Liability Cap shall not increase; and
(y)
the aggregate of the Aggregate Tier One Liability Cap and Aggregate Tier Two Liability Cap shall not increase,
and Clause 5.29(B) shall then apply subject to the amendments under this Clause 5.32 and the other terms of Clauses 5.29(C) to 5.31.
5.33
The parties agree that if Rosneft has a claim in respect of a well under an Onshore Drilling Contract and:
(A)
the aggregate liability of the NADL Group in respect of all xxxxx under any and all Onshore Drilling Contracts has exceeded the Aggregate Tier One Liability Cap but has not then reached the Aggregate Tier Two Liability Cap; and
(B)
the balance of the Aggregate Tier Two Liability Cap (as increased, if applicable, pursuant to Clause 5.32) remaining after all previous claims in respect of xxxxx under any and all Onshore Drilling Contracts have either been determined under the dispute resolution provisions of the Onshore Drilling Contracts or settled between the parties to the relevant Onshore Drilling Contract (the "Tier Two Balance") is less than the lower of:
(i)
the value of the claim; and
(ii)
the Relevant Well Tier Two Liability Cap,
then Rosneft shall have the right by written notice to NADL to elect to make the claim instead subject to the Relevant Well Tier Three Liability Cap. Upon such notice from Rosneft being received by NADL, the Relevant Well Tier Three Liability Cap shall not increase.
6.
CONDITIONS
6.1
Completion is in all respects conditional upon the satisfaction or waiver of the Conditions in accordance with this Agreement (and, where applicable, such Conditions remaining satisfied up to Completion).
Obligations to satisfy
6.2
Rosneft will use reasonable endeavours to fulfil or procure the fulfilment of the Conditions listed in Paragraphs 3, 4, 5 and 6 of Schedule 1 (Conditions to Completion) as soon as possible and in any event before the Long Stop Date and will notify Seadrill and NADL in writing as soon as reasonably practicable of the satisfaction of each such Condition.
6.3
Seadrill and NADL will use reasonable endeavours to fulfil or procure the fulfilment of the Conditions listed in Paragraphs 1 and 7 to 8 (inclusive) of Schedule 1 (Conditions to Completion) as soon as possible and in any event before the Long Stop Date and will notify Rosneft in writing as soon as reasonably practicable of the satisfaction of each such Condition.
6.4
Each party will provide the other parties with such information and assistance as reasonably required in order to satisfy the Conditions, as soon as reasonably practicable following a request for the same, provided however that no party shall be required to provide another with any information of a commercially sensitive nature.
Waiver
6.5
NADL (with the written consent of Seadrill) may waive in writing in whole or in part all or any of the Conditions listed in Paragraphs 3 to 5 (inclusive) of Schedule 1 (Conditions to Completion) and Rosneft may waive in whole or in part all or any of the Conditions listed in Paragraphs 7 to 8 (inclusive) of Schedule 1 (Conditions to Completion).
6.6
The Conditions set out in Paragraphs 1 and 2 of Schedule 1 (Conditions to Completion) may not be waived by any party. The Conditions set out in Paragraph 6 of Schedule 1 (Conditions to Completion) may only be waived by agreement of the parties.
6.7
The waiver by any party of any Condition shall not act as a waiver of any breach by any other party of its obligations in connection therewith or otherwise and shall be without prejudice to any claim that the parties may have against each other.
Obligations to inform
6.8
Each party undertakes to disclose in writing to the other parties anything which will or may prevent any of the Conditions from being satisfied on or prior to the Long Stop Date (or subsequently) immediately when it comes to its attention and otherwise to keep each other party informed of the progress towards satisfaction of the Conditions.
6.9
For the purpose of satisfaction of the Condition listed in Paragraph 1 of Schedule 1 (Conditions to Completion) the parties shall cooperate and shall procure that the members of the Retained Group, the Seadrill Group and the NADL Group (as the case may be) co-operate for the provision and evaluation of information with a view to the preparation of the competition filings with all reasonable speed, as well as for the prompt and complete answer to any queries of the competent authorities and otherwise for the diligent pursuit of the process to obtain competition clearances, and, in particular, Rosneft shall, and shall procure that the relevant members of the Retained Group and the Sale Group shall, as soon as practicable, comply with the reasonable requests of NADL in connection with the provision of information to, and the response to requests from, FAS.
6.10
In the event that competition filings other than the filing to FAS listed as a Condition in Paragraph 1 of Schedule 1 (Conditions to Completion) are or may be triggered by Clause 4.1(a) and (b) of the Shareholders’ Agreement, the parties shall negotiate in good faith to agree whether such filings are required and warranted. If it is agreed that filings should be made, the parties shall then co-operate and shall procure that the members of the Retained Group, the Seadrill Group and the NADL Group (as the case may be) co-operate for the provision and evaluation of information with a view to the preparation of the competition filings with all reasonable speed, as well as for the prompt and complete answer to any queries of the competent authorities and otherwise for the diligent pursuit of the process to obtain competition clearances or, as soon as reasonably practicable and if required by the relevant law or regulation, before the occurrence of the relevant trigger event.
6.11
Each party undertakes to:
(A)
notify the other parties and provide copies of any written communications from any Authority or other person in relation to obtaining any consent, approval or action required to satisfy a Condition or in relation to any future competition filing covered by Clause 6.10 where such communications have not been independently or simultaneously supplied to such other parties;
(B)
(where permitted by the Authority or other person concerned) provide the other parties (or advisers nominated by such parties) with draft copies of all submissions and communications to Authorities or other persons in relation to obtaining any consent, approval or action required to satisfy a Condition or in relation to any future competition filing covered by Clause 6.10 (excluding communications of an administrative nature) at such time as will allow such other parties a reasonable opportunity to provide comments on such submissions and communications before they are submitted or sent and provide such other parties (or such advisers nominated by such parties) with copies of all such submissions and communications in the form submitted or sent, provided however that no party shall be required to provide another with copies of any element of such submissions or communications which contains information of a commercially sensitive nature; and
(C)
to give the other parties reasonable notice of and reasonable opportunity to participate in and to attend all meetings and telephone calls with Authorities or other persons in connection with the satisfaction of a Condition or in relation to any future competition filing covered by Clause 6.10 (where permitted by the Authority or other person concerned), and allow such other parties or persons nominated by such other parties to make oral submissions at such meetings or telephone calls, provided however that no party shall be required to permit another to attend any part of such meetings or telephone calls during which information of a commercially sensitive nature is likely to be disclosed.
6.12
Notwithstanding anything to the contrary in this Agreement, Rosneft shall not be obliged to provide any correspondence or other information or documents in relation to satisfaction of the Condition listed in Paragraph 6 of Schedule 1 (Conditions to Completion) other than the relevant extract from the Rosneft board of directors minutes or Rosneft management board minutes evidencing satisfaction of such Condition.
NADL Break Fee
6.13
If on the date on which Completion is to take place in accordance with Clause 10.1:
(A)
each of the Conditions has been satisfied or waived (as the case may be); and
(B)
Rosneft has notified NADL and Seadrill that it is ready, willing and able to satisfy its obligations under Part A of Schedule 4 (Completion Arrangements),
but NADL and / or Seadrill has failed to satisfy its obligations under Part B of Schedule 4 (Completion Arrangements) on the date on which Completion is to take place in accordance with Clause 10.1 and Rosneft terminates this Agreement pursuant to Clause 10.6, then NADL shall pay to Rosneft ***** by way of liquidated damages in satisfaction of any and all claims in respect of the failure of NADL and / or Seadrill to fulfil their respective obligations under this Agreement but excluding, for the avoidance of doubt, their obligations under the Offshore Drilling Contracts (the “NADL Break Fee”).
6.14
If NADL and / or Seadrill reasonably consider that the Condition in Paragraph 2 of Schedule 1 (Conditions to Completion) will not be satisfied on the date on which Completion is otherwise intended to take place in accordance with Clause 10.1 (the “Intended Completion Date”) because of sanctions, embargoes, export controls or restrictive measures which have been imposed or expanded between 10 November 2014 and the Intended Completion Date (other than made pursuant to Bermuda’s International Sanctions Regulations 2013 that extend, or any other enactment of the United Kingdom or Bermuda that extends, Council Regulation (EU) 833/2014 (31st July 2014) to Bermuda or introduce equivalent sanctions in Bermuda)) (the “Sanctions”), and which have the effect of making unlawful or otherwise prohibiting the Completion of the Transactions or the execution or performance of any of the Drilling Contracts then, on or before the Intended Completion Date, Seadrill and NADL shall notify Rosneft in writing of such matter (a “Sanctions Matter“), and then:
(D)
Completion shall be deferred;
(E)
NADL and Seadrill shall obtain legal opinions from two independent international law firms of reputable standing which confirm that the Sanctions (1) were imposed or expanded between 10 November 2014 and the Intended Completion Date and (2) have the effect of making unlawful or otherwise prohibiting the Completion of the Transactions or the execution or performance of any of the Drilling Contracts (the “NADL Legal Opinions”); and
(F)
NADL and Seadrill shall provide copies of such NADL Legal Opinions to Rosneft within 10 Business Days of the Intended Completion Date.
If NADL and Seadrill do not comply with their obligations under this Clause, Rosneft shall be entitled to terminate this Agreement pursuant to Clause 10.6 and, if Rosneft terminates this Agreement pursuant to Clause 10.6, NADL shall pay to Rosneft an amount equal to the NADL Break Fee in satisfaction of any and all claims in respect of the failure of NADL and / or Seadrill to fulfil their respective obligations under this Agreement but excluding, for the avoidance of doubt, their obligations under the Offshore Drilling Contracts, provided that the NADL Break Fee shall not be payable if NADL and Seadrill fail to notify Rosneft of a Sanctions Matter which would have the effect of making unlawful or otherwise prohibiting the completion by Rosneft of the Transactions or the execution or performance by Rosneft of any of the Drilling Contracts. If NADL and Seadrill comply with Clauses 6.14(B) and 6.14(C) above, NADL (with the consent of Seadrill) shall be entitled to terminate this Agreement pursuant to Clause 10.6.
6.15
For the avoidance of doubt, NADL shall not be obliged to pay the NADL Break Fee to Rosneft pursuant to Clause 6.13 where this Agreement terminates prior to 10 November 2014.
Rosneft Break Fee
6.16
If on the date on which Completion is to take place in accordance with Clause 10.1:
(E)
each of the Conditions has been satisfied or waived (as the case may be); and
(F)
NADL and Seadrill have notified Rosneft that they are ready, willing and able to satisfy their respective obligations under Part B of Schedule 4 (Completion Arrangements),
but Rosneft has failed to satisfy its obligations under Part A of Schedule 4 (Completion Arrangements) on the date on which Completion is to take place in accordance with Clause 10.1 and NADL and Seadrill terminate this Agreement pursuant to Clause 10.6, then Rosneft shall pay to NADL ***** by way of liquidated damages in satisfaction of any and all claims in respect of the failure of Rosneft to fulfil its obligations under this Agreement but excluding, for the avoidance of doubt, its obligations under the Offshore Drilling Contracts (the “Rosneft Break Fee”).
6.17
If Rosneft reasonably considers that the Condition in Paragraph 2 of Schedule 1 (Conditions to Completion) will not be satisfied on the Intended Completion Date because of Sanctions which have the effect of making unlawful or otherwise prohibiting the Completion of the Transactions or the execution or performance of any of the Drilling Contracts then, on or before the Intended Completion Date, Rosneft shall notify NADL and Seadrill in writing of such matter, and then:
(A)
Completion shall be deferred;
(B)
Rosneft shall obtain legal opinions from two independent international law firms of reputable standing which confirm that the Sanctions (1) were imposed or extended between 10 November 2014 and the Intended Completion Date and (2) have the effect of making unlawful or otherwise prohibiting the Completion of the Transactions or the execution or performance of any of the Drilling Contracts (the “Rosneft Legal Opinions”); and
(C)
Rosneft shall provide copies of such Rosneft Legal Opinions to NADL and Seadrill within 10 Business Days of the Intended Completion Date.
If Rosneft does not comply with its obligations under this Clause, NADL and Seadrill shall be entitled to terminate this Agreement pursuant to Clause 10.6 and, if NADL and Seadrill terminate this Agreement pursuant to Clause 10.6, Rosneft shall pay to NADL an amount equal to the Rosneft Break Fee in satisfaction of any and all claims in respect of the failure of Rosneft to fulfil its obligations under this Agreement but excluding, for the avoidance of doubt, its obligations under the Offshore Drilling Contracts, provided that the Rosneft Break Fee shall not be payable if Rosneft fails to notify NADL and Seadrill of a Sanctions Matter which would have the effect of making unlawful or otherwise prohibiting the completion by Seadrill or NADL of the Transactions or the execution or performance by Seadrill or NADL of any of the Drilling Contracts. If Rosneft complies with Clauses 6.17(B) and 6.17(C) above, Rosneft shall be entitled to terminate this Agreement pursuant to Clause 10.6.
6.18
For the avoidance of doubt, Rosneft shall not be obliged to pay the Rosneft Break Fee to NADL and Seadrill pursuant to Clause 6.16 where this Agreement terminates prior to 10 November 2014.
7.
TERMINATION OF THIS AGREEMENT
Postponement of the Long Stop Date
7.1
If any of the Conditions is not fulfilled or waived, as the case may be, on or before 5.00 p.m. on the Long Stop Date then:
(F)
if it was the obligation of Rosneft under Clause 6.2 to satisfy the relevant Condition (or Conditions) then NADL (with the written consent of Seadrill) may, in its absolute discretion, postpone the Long Stop Date by up to 20 Business Days; or
(G)
if it was the obligation of Seadrill and NADL under Clause 6.3 to satisfy the relevant Condition (or Conditions) then Rosneft may, in its absolute discretion, postpone the Long Stop Date by up to 20 Business Days; or
(H)
if responsibility for satisfaction of the relevant Condition or Conditions falls upon none of Rosneft, Seadrill and NADL, then the parties may postpone the Long Stop Date by mutual agreement,
(the Long Stop Date, as so postponed, being the “Postponed Long Stop Date”).
7.2
If, in the circumstances set out in Clause 7.1, either:
(E)
the Long Stop Date is not postponed pursuant to Clause 7.1; or
(F)
any of the Conditions remains to be fulfilled or waived, by 5.00 p.m. on the Postponed Long Stop Date,
this Agreement shall be capable of termination by any of (i) Rosneft (if it was the obligation of Seadrill or NADL under Clause 6.3 to satisfy the relevant Condition (or Conditions)) or (ii) NADL (with the consent of Seadrill) (if it was the obligation of Rosneft under Clause 6.2 to satisfy the relevant Condition (or Conditions)) or (iii) Rosneft or NADL (with the consent of Seadrill) (if no party to this Agreement had the obligation to satisfy the relevant Condition (or Conditions)) forthwith on written notice to the other parties.
Material Adverse Change
7.3
This Agreement may be terminated at any time prior to Completion by NADL (with the consent of Seadrill) if, prior to Completion, it provides a written notice of termination to Rosneft if:
(C)
any of the Rosneft Warranties, as modified by the Original Rosneft Disclosure Letter, (either individually or collectively) are, or become, untrue or misleading in any respect or would be untrue or misleading if repeated at that time by reference to the facts and circumstances subsisting at that time on the basis that any reference in the Rosneft Warranties (whether express or implied) to the Signing Date were substituted by a reference to that time, and the underlying circumstances have a material adverse effect on the Sale Group, taken as a whole; or
(D)
the Original Rosneft Disclosure Letter has been supplemented by an Updated Rosneft Disclosure Letter in accordance with Clause 12.1(B), if the substance of any update of any of the Rosneft Warranties which was made in the Updated Rosneft Disclosure Letter and the circumstances disclosed have a material adverse effect on the Sale Group, taken as a whole; or
(E)
a Sale Xxxxx Xxxxxxxx Adverse Change has occurred,
save in each case where Seadrill or NADL has consented to the relevant underlying circumstance for the purposes of Clause 8 (Rosneft Actions Pending Completion).
7.4
This Agreement may be terminated at any time prior to Completion by Rosneft if, prior to Completion, it provides a written notice of termination to Seadrill and NADL if:
(F)
any of the NADL Warranties, as modified by the Original NADL Disclosure Letter, (either individually or collectively) are, or become, untrue or misleading in any respect or would be untrue or misleading if repeated at that time by reference to the facts and circumstances subsisting at that time on the basis that any reference in the NADL Warranties (whether express or implied) to the Signing Date were substituted by a reference to that time, and the underlying circumstances have or could reasonably be expected to have a material adverse effect on NADL; or
(G)
the Original NADL Disclosure Letter has been supplemented by an Updated NADL Disclosure Letter in accordance with Clause 13.1(B), if the substance of any update of any of the NADL Warranties which was made in the Updated NADL Disclosure Letter and the circumstances disclosed have a material adverse effect on NADL, taken as a whole; or
(H)
a NADL Material Adverse Change has occurred,
save in each case where Rosneft has consented to the relevant underlying circumstance for the purposes of Clause 9 (NADL Actions Pending Completion).
7.5
If any Service Order is terminated prior to Completion pursuant to clause 13.3 of the Master Agreement, either Rosneft or NADL (with the written consent of Seadrill) may terminate this Agreement forthwith on written notice to the other parties given at any time prior to Completion.
Effect of termination
7.6
If this Agreement is terminated in accordance with Clause 7 (Termination of this Agreement), all rights and obligations of the parties under this Agreement shall immediately terminate (except for the Surviving Provisions) but (for the avoidance of doubt) all rights, obligations and liabilities of the parties which have accrued before termination shall continue to exist.
7.7
Notwithstanding any other provision in this Agreement but without prejudice to Clauses 6.13 to 6.18 (inclusive), if at any time sanctions, embargoes, export controls, or restrictive measures are in force or are imposed or extended which have the effect of making unlawful or otherwise restricting or prohibiting any member of the NADL Group, member of the Seadrill Group or member of the Rosneft Group from performing their actual or prospective obligations under or pursuant to any of the Key Agreements (a “Sanctions Event”) then:
(C)
if the Sanctions Event occurs before Completion, the parties shall use all reasonable endeavours to restructure the transactions or rights and obligations of the parties under the Key Agreements (including making changes to the transaction structure, the parties, its mechanics or sequence of steps) to enable the parties, so far as possible, to perform their respective obligations and enjoy and receive their respective rights and benefits as initially envisaged under the Key Agreements and in any other way that is reasonably practicable; or
(D)
if the Sanctions Event occurs after Completion:
(i)
the parties shall use all reasonable endeavours to restructure the transactions or rights and obligations of the parties under the Key Agreements (including making changes to the transaction structure, the parties, its mechanics or sequence of steps) to enable the parties, so far as possible, to perform their respective obligations and enjoy and receive their respective rights and benefits as initially envisaged under the Key Agreements and in any other way that is reasonably practicable; and
(ii)
to the extent that any rights or obligations of a party under the Key Agreements are affected by the Sanctions Event, the parties shall not be in breach of the Key Agreements or otherwise liable to the other parties for any delay in performance or any non-performance of any obligations under the Key Agreements (and the time for performance will be extended accordingly) if and to the extent that the delay or non-performance is owing to the Sanction Event.
8.
ROSNEFT ACTIONS PENDING COMPLETION
Conduct of business before Completion
8.1
Rosneft shall procure that between the Signing Date and Completion each member of the Sale Group shall carry on its business, as carried on as at the Signing Date, in the normal course and not, without the consent in writing of Seadrill and NADL, such consent not to be unreasonably withheld, delayed or conditioned, do any of the acts or matters listed in Schedule 2 (Rosneft Conduct of Business for the Sale Group before Completion).
8.2
Without prejudice to any of Rosneft’s other rights hereunder, Clause 8.1 and Schedule 2 (Rosneft Conduct of Business for the Sale Group before Completion) shall not operate so as to restrict or prevent:
(F)
the completion or performance of any obligations undertaken pursuant to any contract or arrangement entered into by any member of the Sale Group prior to the Signing Date and which, in the case of a Material Contract, was disclosed no later than five (5) Business Days before the Signing Date in the Rosneft Data Room;
(G)
any matter undertaken by any member of the Sale Group in an emergency or disaster situation with the intention of minimising any adverse effect thereof (and of which Seadrill and NADL will be promptly notified);
(H)
any matter carried out in order to comply with this Agreement or the other Transaction Documents;
(I)
any matter undertaken at the written request of Seadrill or NADL or with the written consent of Seadrill and NADL;
(J)
any matter reasonably required in connection with the satisfaction of the Conditions;
(K)
any matter required by law, including Tax law, regulation or any Authority, including any Tax Authority;
(L)
a contribution to the charter capital of the Company in an aggregate amount of ***** to be made by Rosneft on or around (1) one Business Day before Completion; or
(M)
a contribution of Shareholder Debt to the charter capital of the relevant member(s) of the Sale Group made in accordance with the provisions of Clause 19.1.
Provision of information to Seadrill and NADL
8.3
Subject to applicable law, as from the Signing Date:
(I)
Rosneft shall (on a confidential basis) keep Seadrill and NADL informed of material developments affecting the Sale Group and promptly provide Seadrill and NADL with copies of relevant monthly reports;
(J)
Rosneft shall, upon reasonable notice and subject to receipt of such undertakings as to confidentiality as Rosneft shall reasonably require, procure that the Sale Group shall give Seadrill, NADL and any persons authorised by them reasonable access during Working Hours to the premises and all the Books and Records and title deeds of the Sale Group and the directors and employees of the Sale Group and each member of the Sale Group will be instructed to give promptly all information and explanations to Seadrill, NADL or any such persons as they may reasonably request.
9.
NADL ACTIONS PENDING COMPLETION
Conduct of business before Completion
9.1
NADL shall ensure that between the Signing Date and Completion NADL shall carry on its business, as carried on as at the Signing Date, in the normal course and not, without the consent in writing of Rosneft, such consent not to be unreasonably withheld, delayed or conditioned, do any of the acts or matters listed in Schedule 3 (NADL Conduct of Business before Completion). Seadrill shall ensure that between the Signing Date and Completion Seadrill will exercise its rights as a shareholder of NADL to ensure, so far as within its power and control, that none of the acts or matters listed in Part B of Schedule 3 (NADL Conduct of Business before Completion) are approved by NADL’s shareholders in general meeting or by written resolution without the consent in writing of Rosneft, such consent not to be unreasonably withheld, delayed or conditioned.
9.2
Without prejudice to any of NADL’s other rights hereunder, Clause 9.1 and Schedule 3 (NADL Conduct of Business before Completion) shall not operate so as to restrict or prevent:
(K)
the completion or performance of any obligations undertaken pursuant to any contract or arrangement entered into by any member of the NADL Group prior to the Signing Date and which, in the case of a NADL Material Contract, was disclosed no later than five (5) Business Days before the Signing Date in the NADL Data Room;
(L)
the entry into or operation of, and any commitment in connection with, any drilling contract entered into by NADL (or any member of the NADL Group) in relation to any Offshore Rig provided that any such action shall not result in the Offshore Rigs being unavailable for use pursuant to the Offshore Drilling Contracts from the anticipated date of commencement;
(M)
any matter undertaken by NADL in an emergency or disaster situation with the intention of minimising any adverse effect thereof (and of which Rosneft will be promptly notified);
(N)
any matter carried out in order to comply with this Agreement or the other Transaction Documents;
(O)
any matter undertaken at the written request of Rosneft or with the written consent of Rosneft;
(P)
any matter reasonably required in connection with the satisfaction of the Conditions; or
(Q)
any matter required by law, including Tax law, regulation or any Authority, including any Tax Authority.
Provision of information to Rosneft
9.3
Subject to applicable law, as from the Signing Date:
(D)
NADL shall (on a confidential basis) keep Rosneft informed of material developments affecting NADL and promptly provide Rosneft with copies of relevant monthly reports;
(E)
NADL shall, upon reasonable notice and subject to receipt of such undertakings as to confidentiality as NADL shall reasonably require, give Rosneft and any persons authorised by them reasonable access during Working Hours to the premises and all the Books and Records and title deeds of the NADL Group and the directors and employees of the NADL Group and NADL will give promptly all information and explanations to Rosneft or any such persons as they may reasonably request.
10.
COMPLETION
10.1
Completion shall take place on the last Business Day of the month in which all of the Conditions shall have been satisfied or waived in accordance with this Agreement, provided that if such Business Day falls less than 5 (five) Business Days following the day on which all of the Conditions have been so satisfied or waived, Completion shall take place on the last Business Day of the month immediately following, or such other date as the parties may agree. Completion shall be no earlier than 10 November 2014.
10.2
Completion shall take place at the offices of Rosneft’s Solicitors in Moscow.
10.3
At Completion, Rosneft shall do those things listed in Part A (Rosneft’s Obligations) of Schedule 4 (Completion arrangements) and Seadrill and NADL shall do those things listed in Part B (Seadrill and NADL’s Obligations) of Schedule 4 (Completion arrangements).
10.4
No later than three Business Days prior to Completion, Rosneft shall notify NADL of:
(E)
the Estimated Cash Amount;
(F)
the Estimated Debt Amount;
(G)
the Estimated Net Cash / Debt Amount;
(H)
the Estimated Working Capital Amount; and
(I)
the Estimated Consideration.
10.5
Upon completion of the process of notarisation by the Notary of the Russian SPA and the Transfer Application Form in relation to the Russian SPA in accordance with this Clause 10 (Completion) and Schedule 4 (Completion arrangements), Rosneft and NADL shall use all reasonable endeavours to procure that the Notary submits the Transfer Application Form in relation to the Russian SPA to the Register as soon as reasonably practicable (and in any case within three (3) calendar days) following Completion in compliance with the requirements of parts 14 and 15 of Article 21 of the LLC Law.
10.6
If the obligations of the parties to be performed on the Completion Date under this Agreement are not complied with on the Completion Date, Rosneft, if Seadrill or NADL has not so complied, or Seadrill and NADL, if Rosneft has not so complied, may:
(A)
defer Completion (so that the provisions of this Clause 10 (Completion) shall apply to Completion as so deferred); or
(B)
proceed to Completion as far as practicable (without limiting its rights under this Agreement) and specify a later date (not being later than 5 Business Days after the Long Stop Date) on which Rosneft or, as the case may be, Seadrill and NADL shall be obliged to complete its outstanding obligations; or
(C)
terminate this Agreement by notice in writing.
10.7
If there is any conflict between the terms of this Agreement and the Russian SPA, this Agreement shall prevail and the parties shall take such steps to make sure that the intention of the parties under this Agreement is implemented. The parties acknowledge and agree that the Russian SPA is to be entered into in furtherance of the transactions contemplated by this Agreement and to comply with the requirements of the law governing the Russian SPA, but collectively with this Agreement record the terms of one (1) series of related transactions, and not independent transactions. Each party covenants to each other party that it will not assert in any forum any argument predicated on the existence of a conflict between this Agreement and the Russian SPA or otherwise seek to deny the operability of any provision of this Agreement on the basis of an alleged conflict with the Russian SPA.
10.8
Rosneft on the one part, and NADL on the other part (each, the “indemnifying parties”) covenant to each other that they will, immediately on demand, pay an amount equal to all liability which: (i) if the indemnifying party is Rosneft, any of Seadrill or NADL or any other member of the Seadrill Group or the NADL Group; and (ii) if the indemnifying party is NADL, Rosneft or any other member of the Retained Group, in each case incurs or suffers in connection with, arising out of or resulting from, any breach of Clause 10.7 by any of such indemnifying parties (or, in the case of NADL, Seadrill).
11.
COMPLETION ACCOUNTS
11.1
Following Completion, the parties shall comply with their respective obligations set out in Schedule 8 (Completion Accounts).
11.2
Rosneft shall procure that the Sale Group has Cash balances as at the Completion Date of at least ***** that are freely available immediately following Completion for use by members of the Sale Group. Rosneft shall satisfy its procurement obligation described in the immediately preceding sentence by a contribution to the charter capital of the Company.
11.3
If a provision has been accrued in the Completion Accounts and included in the Completion Debt Amount for any loss-making contract(s) of the Sale Group in accordance with Paragraph 17 of Part C of Schedule 8 (Completion Accounts) (the "Loss Provision") then, to the extent that at any time after the Completion Date revised terms for any such contract are negotiated so that any such losses which have been provided for in the Completion Accounts are reduced partially or eliminated in full under the revised terms, then NADL undertakes to pay Rosneft within 15 Business Days of the entry into force of the revised terms of the relevant contract a cash amount equal to the lower of:
(J)
the Loss Provision included in the Completion Accounts in respect of the relevant contract; and
(K)
the amount by which the Loss Provision would have been reduced had the negotiations of the revised terms of the relevant contract been concluded immediately prior to the determination or agreement of the Completion Accounts.
Each of Rosneft and NADL shall, and shall procure that the NADL Group and the Retained Group (as the case may be) shall, cooperate and provide such reasonable assistance as may be requested in such negotiations and the amendment of the relevant contract(s).
11.4
If any penalties or early termination fees in accordance with Paragraph 30(b) of Part C of Schedule 8 (Completion Accounts) and/or any claims in accordance with Paragraph 30(c) of Part C of Schedule 8 (Completion Accounts) have, in each case, been included in the Completion Debt Amount in the Completion Accounts then, to the extent that at any time after the Completion Date such penalties, early termination fees or claims are waived, forgiven or withdrawn, NADL undertakes to pay Rosneft within 15 Business Days of any such waiver, forgiveness or withdrawal a cash amount equal to the lower of: (i) the amount waived, forgiven or withdrawn; and (ii) the penalty, early termination fee and/or claim, as the case may be, included in the Completion Debt Amount in the Completion Accounts. Rosneft and NADL shall, and shall procure that the NADL Group and the Retained Group (as the case may be) shall, cooperate and provide such reasonable assistance as may be requested in the negotiation of any such waiver, forgiveness or withdrawal.
11.5
If a provision has been accrued in the Completion Accounts in relation to the receivables, accrued income or work in progress in relation to Severneft-Urengoy in accordance with Paragraph 24 of Part C of Schedule 8 (Completion Accounts) then, to the extent that at any time after the Completion Date Severneft-Urengoy formally accepts such receivables, accrued income or work in progress, then NADL undertakes to pay Rosneft within 15 Business Days of the receipt by the Sale Group of such formal acceptance from Severneft-Urengoy a cash amount equal to the lower of: (i) the amount accepted by Severneft-Urengoy; and (ii) the provision included in the Completion Accounts. Rosneft and NADL shall, and shall procure that the NADL Group and the Retained Group (as the case may be) shall, cooperate and provide such reasonable assistance as may be requested in obtaining relevant acceptances from Severneft-Urengoy.
11.6
If Rosneft makes a request for additional capital expenditure of the Sale Group to be agreed between the parties for the purposes of Paragraph 15 of Part C of Schedule 8 (Completion Accounts), neither NADL nor Seadrill shall withhold their agreement to such request provided the capital expenditure requested is reasonable.
12.
ROSNEFT WARRANTIES AND COVENANTS
12.1
Rosneft represents and warrants to Seadrill and NADL that each of the Rosneft Warranties:
(E)
is accurate in all respects and not misleading at the Signing Date, except as disclosed in the Original Rosneft Disclosure Letter; and
(F)
will be accurate in all respects and not misleading at the Completion Date as if repeated immediately before Completion by reference to the facts and circumstances subsisting at that date on the basis that any reference in the Rosneft Warranties, whether express or implied, to the Signing Date is substituted by a reference to the Completion Date, except as disclosed in any updated disclosure letter which shall be in equivalent form to the Original Rosneft Disclosure Letter and delivered by Rosneft to Seadrill and NADL not later than five (5) Business Days prior to the Completion Date (the “Updated Rosneft Disclosure Letter”). The Updated Rosneft Disclosure Letter shall not:
(i)
contain any disclosure of facts or circumstances which were known by Rosneft on or before the Signing Date (“Known Matters”), and to the extent the Updated Rosneft Disclosure Letter does contain any Known Matters such Known Matters shall not qualify the Rosneft Warranties or limit Rosneft’s liability in any way in respect thereof; or
(ii)
contain any disclosure against any of the Key Rosneft Warranties (“Key Warranty Disclosure”), and to the extent the Updated Rosneft Disclosure Letter does contain any Key Warranty Disclosure such Key Warranty Disclosure shall not qualify the Key Rosneft Warranties or limit Rosneft’s liability in any way in respect thereof.
For the purposes of Clause 12.1(A) above and any Rosneft Warranty given at the Signing Date (and for the purposes of Paragraph 3 of Part A of Schedule 7 (Limitations on liability) insofar as it applies to Clause 12.1(A)), if the text of any Rosneft Warranty refers to the “Updated Rosneft Disclosure Letter” or the “Current Rosneft Disclosure Letter” such reference shall be deemed to be a reference to the Original Rosneft Disclosure Letter, the intention being that only matters set out in the Original Rosneft Disclosure Letter can be disclosed against those Rosneft Warranties given at the Signing Date.
12.2
Save as provided in Paragraph 27 of Part B of Schedule 5 (Rosneft Representations and Warranties), none of the Company Warranties shall apply to Orenburg or any of the Orenburg Subsidiaries or their respective business, assets or liabilities.
12.3
Rosneft accepts that Seadrill and NADL are entering into this Agreement in reliance upon the Rosneft Warranties and that Seadrill and NADL have been induced to enter into this Agreement by each of the Rosneft Warranties.
12.4
Rosneft undertakes to notify in writing to Seadrill and NADL anything which is or may constitute material breach of or be materially inconsistent with any of the Rosneft Warranties as soon as reasonably practicable after it comes to its notice both before or at the time of Completion.
12.5
Rosneft undertakes (in the absence of fraud) that, if any claim is made against it in connection with the Transactions, it shall not make any claim against any member of the Sale Group or any director, employee, agent or adviser of any member of the Sale Group on whom it may have relied before agreeing to any term of the Transaction Documents or authorising any statement in the Current Rosneft Disclosure Letter.
12.6
Each of the Rosneft Warranties shall be construed as a separate and independent warranty and (except where expressly provided to the contrary) shall not be limited or restricted by reference to or inference from the terms of any other Rosneft Warranty.
12.7
In the event that the representation or warranty given in Clause 12.1 is breached in relation to a Rosneft Tax Warranty, Rosneft undertakes to pay to NADL an amount equal to such amount as would be required to indemnify and hold harmless each member of the Sale Group against any cost, damage, expense, liability or loss arising in connection with or in consequence of the matter giving rise to such breach, without prejudice to any other claim as may be made in respect of such breach. For the avoidance of doubt the Rosneft Tax Warranties shall be qualified by any disclosures made in the Current Rosneft Disclosure Letter and Rosneft shall not be liable for any claim under the Rosneft Tax Warranties in respect of any fact, matter, event or circumstance to the extent that such fact, matter, event or circumstance has been disclosed in this Agreement or the Current Rosneft Disclosure Letter, as provided for in Clause 12.1.
12.8
For the avoidance of doubt, the parties agree and acknowledge that any damages arising as a result of or by reference to any breach of the Rosneft Tax Warranty set out at Paragraph 18(R) of Part A of Schedule 5 (Rosneft Representations and Warranties) will be calculated by reference to the difference between the actual payment and the relevant market value rather than the full amount of the relevant market value.
13.
NADL WARRANTIES AND COVENANTS
13.1
NADL represents and warrants to Rosneft that each of the NADL Warranties:
(L)
is accurate in all respects and not misleading at the Signing Date, except as disclosed in the Original NADL Disclosure Letter;
(M)
will be accurate in all respects and not misleading at the Completion Date as if repeated immediately before Completion by reference to the facts and circumstances subsisting at that date on the basis that any reference in the NADL Warranties, whether express or implied, to the Signing Date is substituted by a reference to the Completion Date, except as disclosed in any updated disclosure letter which shall be in equivalent form to the Original NADL Disclosure Letter and delivered by NADL to Rosneft not later than five (5) Business Days prior to the Completion Date (the “Updated NADL Disclosure Letter”). The Updated NADL Disclosure Letter shall not:
(iv)
contain any disclosure of facts or circumstances which were known by NADL on or before the Signing Date (“NADL Known Matters”), and to the extent the Updated NADL Disclosure Letter does contain any NADL Known Matters such NADL Known Matters shall not qualify the NADL Warranties or limit NADL’s liability in any way in respect thereof; or
(v)
contain any disclosure against any of the Key NADL Warranties (“NADL Key Warranty Disclosure”), and to the extent the Updated NADL Disclosure Letter does contain any NADL Key Warranty Disclosure such NADL Key Warranty Disclosure shall not qualify the Key NADL Warranties or limit NADL’s liability in any way in respect thereof.
For the purposes of Clause 13.1(A) above and any NADL Warranty given at the Signing Date (and for the purposes of Paragraph 3 of Part B of Schedule 7 (Limitations on liability) insofar as it applies to Clause 13.1(A)), if the text of any NADL Warranty refers to the “Updated NADL Disclosure Letter” or the “Current NADL Disclosure Letter” such reference shall be deemed to be a reference to the Original NADL Disclosure Letter, the intention being that only matters set out in the Original NADL Disclosure Letter can be disclosed against those NADL Warranties given at the Signing Date.
13.2
NADL accepts that Rosneft is entering into this Agreement in reliance upon the NADL Warranties and that Rosneft has been induced to enter into this Agreement by each of the NADL Warranties.
13.3
NADL undertakes to notify in writing to Rosneft anything which is or may constitute a material breach of or be materially inconsistent with any of the NADL Warranties as soon as reasonably practicable after it comes to its notice both before or at the time of Completion.
13.4
NADL undertakes (in the absence of fraud) that if any claim is made against it in connection with the Transactions, not to make any claim against any current director, employee, agent or adviser of any member of the NADL Group on whom it may have relied before agreeing to any term of the Transaction Documents or authorising any statement in the Current NADL Disclosure Letter.
13.5
Each of the NADL Warranties shall be construed as a separate and independent warranty and (except where expressly provided to the contrary) shall not be limited or restricted by reference to or inference from the terms of any other NADL Warranty.
13.6
In the event that the representation or warranty given in Clause 13.1 is breached in relation to a NADL Tax Warranty, NADL undertakes to pay to Rosneft an amount equal to such amount as would be required to indemnify and hold harmless each member of the Retained Group against any cost, damage, expense, liability or loss arising in connection with or in consequence of the matter giving rise to such breach, without prejudice to any other claim as may be made in respect of such breach. For the avoidance of doubt the NADL Tax Warranties shall be qualified by any disclosures made in the Current NADL Disclosure Letter and NADL shall not be liable for any claim under the NADL Tax Warranties in respect of any fact, matter, event or circumstance to the extent that such fact, matter, event or circumstance has been disclosed in this Agreement or the Current NADL Disclosure Letter, as provided for in Clause 13.1.
13.7
For the avoidance of doubt, the parties agree and acknowledge that any damages arising as a result of or by reference to any breach of the NADL Tax Warranty set out at Paragraph 4(O) of Schedule 6 (NADL Representations and Warranties) will be calculated by reference to the difference between the actual payment and the relevant market value rather than the full amount of the relevant market value.
14.
SEADRILL WARRANTY
Seadrill represents and warrants to Rosneft as at the Signing Date that (i) Seadrill is the sole legal and beneficial owner of 169,663,723 shares in NADL, which have been lawfully acquired and there is no Encumbrance over those shares and (ii) the shares in NADL owned by Seadrill represent approximately 70.4% (seventy point four per cent.) of the issued and outstanding share capital of NADL.
15.
PARTIES’ WARRANTIES
15.1
Each party represents and warrants to each other party as at the Signing Date and immediately before Completion that:
(D)
it is validly incorporated, in existence and duly registered and has the requisite capacity, power and authority to enter into and, subject to the satisfaction of the Conditions, perform this Agreement and the other Transaction Documents to which it is or will be a party and to execute, deliver and, subject to the satisfaction of the Conditions, perform any obligations it may have under this Agreement and any other Transaction Documents to which it is or will be a party;
(E)
the obligations of it under this Agreement and any other Transaction Documents to which it is or will be a party constitute, or will constitute, binding obligations of it in accordance with their respective terms;
(F)
the execution and delivery of, and, subject to the satisfaction of the Conditions, the performance by it of its obligations under this Agreement and any other Transaction Document to which it is or will be a party will not:
(i)
result in a breach of any provision of its constitutional documents;
(ii)
result in a breach of, or constitute a default under, any instrument by which it is bound;
(iii)
result in a breach of any order, judgment or decree of any court or Authority by which it is bound; or
(iv)
require it to obtain any governmental, statutory, regulatory or other approvals, consents, licences, waivers or exemptions, or give any notice to or make any registration with, any Authority or other party which has not been made or obtained at the date hereof save, for the avoidance of doubt, any approval, consent, licence, waiver, exemption, notice or registration required to satisfy the Conditions.
15.2
Rosneft gives the representations and warranties set out in Clause 15.1 in respect of each of the members of the Retained Group that is or will be a party to a Transaction Document.
15.3
NADL gives the representations and warranties set out in Clause 15.1 in respect of each of the members of the NADL Group that is or will be a party to a Transaction Document.
15.4
Seadrill gives the representations and warranties set out in Clause 15.1 in respect of each of the members of the Seadrill Group that is or will be a party to a Transaction Document.
16.
LIABILITY; LIMITATIONS ON LIABILITY
16.1
Rosneft shall not be liable in respect of any breach of this Agreement to the extent that the limitations set out in Part A of Schedule 7 (Limitations on liability) apply.
16.2
Seadrill and NADL shall not be liable in respect of any breach of this Agreement to the extent that the limitations set out in Part B of Schedule 7 (Limitations on liability) apply.
16.3
In the absence of fraud and subject to Clause 13.1, Rosneft shall not be entitled to claim that any fact, matter or circumstance causes any of the NADL Warranties to be breached if it has been disclosed in the Current NADL Disclosure Letter.
16.4
In the absence of fraud and subject to Clause 12.1, Seadrill and NADL shall not be entitled to claim that any fact, matter or circumstance causes any of the Rosneft Warranties to be breached if it has been disclosed in the Current Rosneft Disclosure Letter.
16.5
If, whether before or following Completion, Seadrill or NADL becomes aware (whether by reason of any disclosure made pursuant to Clause 12 (Rosneft Warranties and Covenants) or not) that there has been any breach of the Rosneft Warranties or any other term of this Agreement, none of Seadrill or NADL shall be entitled to terminate or rescind this Agreement, save under Clauses 7.2, 7.3, 7.4 and 7.5 or Clause 10.6.
16.6
If, whether before or following Completion, Rosneft becomes aware (whether by reason of any disclosure made pursuant to Clause 13 (NADL Warranties and Covenants) or not) that there has been any breach of the NADL Warranties or any other term of this Agreement, Rosneft shall not be entitled to terminate or rescind this Agreement, save under Clauses 7.2, 7.3, 7.4 and 7.5 or Clause 10.6.
16.7
The provisions of Clauses 16.5 and 16.6 shall be without prejudice to any other right or remedy (other than termination or rescission) which any party may now or hereafter hold in respect of all or any part of the obligations of any other party under this Agreement and the other documents referred to in this Agreement.
16.8
If NADL fails to perform any of its obligations under this Agreement, Rosneft shall be entitled to make a claim against Seadrill in respect thereof as if Seadrill and NADL were jointly and severally liable for the relevant obligation(s) under this Agreement. The liability of Seadrill under this Clause 16.8 shall not exceed the liability of NADL in respect of non-performance of the relevant obligations.
16.9
Where any amount is due from Rosneft to NADL pursuant to this Agreement (other than any payment pursuant to Clause 2.11 or any payment for the subscription of shares in the share capital of NADL), Rosneft shall be entitled to elect no later than 5 Business Days before the due date for settlement of such amount to satisfy such amount in whole or in part by:
(A)
payment of such amount (in whole or in part) in cash subject to Clauses 29.3 to 29.5; and/or
(B)
waiving (in whole or in part, as required) all its rights to any dividend payable by NADL at the next two dividend payment dates in an amount equal to the amount of the payment due from Rosneft under this Clause 16.9 as increased by an amount equal to LIBOR plus 4% (four per cent.) per annum from (and including) the due date for settlement of such amount to (but excluding) the date on which the relevant dividend would have otherwise been settled provided that the maximum amount which Rosneft shall be entitled to waive on any one occasion shall be an amount equal to the lower of:
(vi)
US$40,000,000; and
(vii)
the aggregate of the quarterly dividend payments received by Rosneft in the seven months immediately preceding the due date for settlement of the amount from Rosneft to NADL; and/or
(C)
to the extent that such amount is less than US$10,000,000, treating such amount (in whole or in part) as an amount outstanding from Rosneft to NADL for the purposes of Clause 3 (Contract Shares) at the Acceptance Date or Settlement Date (as the case may be) immediately following the due date for settlement and such amount shall increase by an amount equal to LIBOR plus 4% (four per cent.) per annum from (and including) the due date for such settlement to (but excluding) such Acceptance Date or Settlement Date (as the case may be); and/or
(D)
to the extent that such amount is less than US$10,000,000, treating such amount (in whole or in part) as an amount outstanding from Rosneft to NADL for the purposes of Clause 5 (Extended Co-Operation) at the Additional Contract Acceptance Date or Settlement Date (as the case may be) immediately following the due date for settlement and such amount shall increase by an amount equal to LIBOR plus 4% (four per cent.) per annum from (and including) the due date for such settlement to (but excluding) such Additional Contract Acceptance Date or Settlement Date (as the case may be),
provided that:
(i)
Rosneft shall only be entitled to exercise its rights under Clauses 16.9(C) and (D) where there is any Offshore Drilling Contract or Additional Drilling Contract in force and an Acceptance Date or Additional Contract Acceptance Date under any such contract or a Settlement Date is scheduled to fall within 6 months from the due date for settlement by Rosneft. Where an election has been made under Clause 16.9(B), an equivalent amount to that so waived shall cease to be an amount outstanding from Rosneft to NADL for the purposes of this Agreement, including Clauses 3 (Contract Shares) or 5 (Extended Co-Operation); and
(ii)
if Rosneft does not make an election under this Clause 16.9, then Rosneft shall be deemed to have exercised its rights under Clause 16.9(B).
16.10
Rosneft may, at any time, elect to reduce the Rolled Forward Amount or the Additional Contract Rolled Forward Amount or the Seadrill Additional Contract Rolled Forward Amount by paying an amount in cash provided that Clauses 29.3 to 29.5 shall apply to such payment.
17.
TAJIKISTAN; OBK CONTRACTS
Tajikistan
17.1
Rosneft shall procure that, prior to Completion, the Sale Group shall sell, and a member of the Retained Group shall buy, the Tajikistan Business and that such member of the Retained Group shall assume all of the liabilities and obligations of the Sale Group in relation to the Tajikistan Business (the “Carve Out”).
17.2
Where the consent of any third party is required to the Carve Out (or any elements thereof), Rosneft shall be responsible (at its own expense) for obtaining any such consent.
17.3
Without restricting the rights of NADL or its ability to claim damages on any basis, Rosneft shall pay NADL on demand on an after-Tax basis (which shall be construed in accordance with Clauses 29.3 to 29.5 (inclusive)) an amount equal to all costs, losses, damages, reasonable expenses (including reasonable legal and other professional expenses) or liabilities suffered or incurred by NADL or any member of the Sale Group:
(G)
as a consequence of, or which would not have arisen but for, the implementation and completion of the Carve Out; and
(H)
arising after Completion out of, or in connection with, the Tajikistan Business.
OBK Contracts    
17.4
Without restricting the rights of NADL or its ability to claim damages on any basis, Rosneft shall pay to NADL on demand on an after-Tax basis (which shall be construed in accordance with Clauses 29.3 to 29.5 (inclusive)) an amount equal to all break fees, termination payments, penalties or other similar liabilities suffered or incurred by NADL or any member of the Sale Group (net of any Cash Tax Saving) before, on or after Completion to the extent not discharged before Completion and arising out of or in connection with:
(D)
the termination or cancellation by Rosneft or any member of the Sale Group of any drilling contracts which Orenburg has entered into with any third party (not being a member of the NADL Group) (the “Orenburg Contracts”); and
(E)
the termination or cancellation by any of the third parties to any Orenburg Contract of any of the Orenburg Contracts as a result of the exercise of a contractual right to terminate arising as a result of the change in ownership or control of the Sale Group pursuant to this Agreement and the Russian SPA,
save that this Clause 17.4 shall not apply to:
(i)
any Orenburg Contracts entered into between Orenburg and Lukoil and any Orenburg Contracts entered into between Orenburg and Rusvetpetro;
(ii)
any Orenburg Contracts terminated or cancelled prior to the Orenburg Acquisition; and
(iii)
those Orenburg Contracts expressly referenced in Paragraph 30b(ii) of Schedule 8 (Completion Accounts).
18.
NON-SOLICITATION
18.1
Rosneft will not and undertakes to procure that each member of the Retained Group will not do any of the following things:
(C)
neither pending nor within one year after Completion, employ any person at present or at Completion an employee of any member of the Sale Group save with the prior written consent of NADL, such consent not to be unreasonably withheld or delayed; nor
(D)
between one and two years after Completion, solicit or entice away from the employment of any member of the Sale Group any person at present or at Completion an employee of any member of the Sale Group except for any employee who answers a public advertisement not intended to target any specific employee or group of employees.
18.2
Each undertaking contained in Clause 18.1 shall be construed as a separate undertaking and if one or more of the undertakings is held to be against the public interest or unlawful or in any way an unreasonable restraint of trade, the remaining undertakings shall continue to bind Rosneft.
19.
INTER-COMPANY AMOUNTS
19.1
Immediately prior to Completion, Rosneft shall (or shall procure that the relevant members of the Retained Group shall):
(I)
settle the Shareholder Debt in full; and / or
(J)
contribute the Shareholder Debt to the charter capital of the relevant member(s) of the Sale Group,
such that the settlement and / or contribution of the Shareholder Debt pursuant to this Clause shall constitute or result in full and final settlement of all Shareholder Debt and that, at Completion, no further amount shall be considered as due, owing or payable between any member of the Retained Group and any member of the Sale Group in respect of Shareholder Debt. The parties further acknowledge that one of the ways to settle the Shareholder Debt is for Rosneft as sole participant / shareholder of the Company to contribute to the charter capital of the Company funds equal to the Shareholder Debt so that the Company immediately uses such contributed funds in order to repay the Shareholder Debt in full.
19.2
Rosneft shall ensure that its compliance with the provisions in Clause 19.1 shall not result in:
(A)
the waiver of any Shareholder Debt; or
(B)
any change in the number of shareholders (participants) in any member of the Sale Group.
19.3
Rosneft as agent for the members of the Retained Group shall settle the Inter-Company Receivables (in respect of the supply of goods and services) within 60 Business Days following Completion (the “Payment Date”). If any Inter-Company Receivables remain outstanding as at the Payment Date, then those Inter-Company Receivables shall increase by an amount equal to LIBOR plus 4% (four per cent.) per annum from (and including) the Payment Date to (but excluding) the date of actual payment.
19.4
Without restricting the rights of NADL or its ability to claim damages on any basis, Rosneft shall pay to NADL on demand an amount equal to the aggregate of all amounts of incremental Tax incurred or suffered by any member of the NADL Group as a consequence of, or which would not have arisen but for, the settlement of the Shareholder Debt.
20.
TRANSITIONAL SERVICES; POST COMPLETION UNDERTAKINGS; XXXXXXXXXXX OPTION
Separation and Transitional Services
20.1
Rosneft and NADL shall give effect to Schedule 13 (TSA Provisions).
Post-Completion undertakings
20.2
Following Completion, NADL undertakes to Rosneft and to each member of the Retained Group:
(A)
to procure that, as soon as reasonably practicable after the Completion Date and in any event within one month afterwards, the name of any member of the Sale Group which consists of or incorporates “RN” or “Rosneft” or anything which in the reasonable opinion of Rosneft is confusingly similar to “RN” or “Rosneft”, is changed to a name which does not include “RN” or “Rosneft” or any name confusingly similar thereto; and
(B)
to procure that, as soon as reasonably practicable after the Completion Date and in any event within three months afterwards, the Sale Group shall cease to use or display any trade or service names, marks or logos owned by any member of the Retained Group or any trade or service names, marks or logos confusingly similar thereto and shall not order or create any new item including such trade or service name, xxxx or logo.
20.3
Rosneft hereby grants to each member of the Sale Group a non-exclusive, royalty free, fully paid-up licence to use “RN” and “Rosneft” for the period of three months after the Completion Date solely for the purposes of carrying on the business of any member of the Sale Group which incorporates, displays or uses “RN” or “Rosneft” in the manner carried on immediately prior to Completion.
Xxxxxxxxxxx Option
20.4
As from delivery of a notice from NADL requesting access to undertake due diligence on the Xxxxxxxxxxx Business, Rosneft shall (or shall procure that such member(s) of the Retained Group as own(s) the Xxxxxxxxxxx Business shall), upon reasonable notice and subject to receipt of such undertakings of confidentiality as Rosneft shall reasonably require, make available to NADL and any persons authorised by them through an agreed individual or group of individuals within Rosneft and at an agreed location all the Books and Records and information relating to the Xxxxxxxxxxx Business (including, for the avoidance of doubt, the Xxxxxxxxxxx SPA) as NADL may reasonably request (the date on which the first such information or access is provided shall be the “Due Diligence Commencement Date”) and such inspection visits to each of the premises of the Xxxxxxxxxxx Business as the parties shall reasonably agree and Rosneft shall promptly so provide all information to NADL or any such persons as they may reasonably request so as to enable NADL to carry out due diligence on the Xxxxxxxxxxx Business and assess whether it wishes to exercise the Xxxxxxxxxxx Option. The due diligence process under this Clause 20.4 shall last for a maximum period of four months from the Due Diligence Commencement Date subject to Rosneft complying with its obligations to provide such information.
20.5
Rosneft hereby grants to NADL an option (the “Xxxxxxxxxxx Option”) exercisable during the Xxxxxxxxxxx Option Period, to require Rosneft to sell, or to require Rosneft to procure that such member(s) of the Retained Group as own(s) the Xxxxxxxxxxx Business at the time of the exercise of the Xxxxxxxxxxx Option sell, the Xxxxxxxxxxx Business to NADL (or such member of the NADL Group as NADL shall designate in writing) on the sale terms set out in Clauses 20.8 to 20.13 (inclusive).
20.6
The Xxxxxxxxxxx Option may be exercised by the giving of a notice in writing by NADL to Rosneft during the Xxxxxxxxxxx Option Period (the “Xxxxxxxxxxx Option Notice”). NADL shall be entitled to exercise the Xxxxxxxxxxx Option only in respect of all of the Xxxxxxxxxxx Business.
20.7
If the Xxxxxxxxxxx Option is exercised in accordance with this Clause then, Rosneft (or the relevant member(s) of the Retained Group) shall sell and NADL (or a member of the NADL Group) shall purchase the Xxxxxxxxxxx Business. If the Xxxxxxxxxxx Option is not duly exercised during the Xxxxxxxxxxx Option Period, it shall lapse and cease to have any further effect.
20.8
Each party undertakes to negotiate in good faith to agree whether the sale of the Xxxxxxxxxxx Business should be subject to the satisfaction of any conditions. If it is agreed that any filings should be made and/or any regulatory or other third party approvals are necessary, the parties shall then co-operate in good faith and Rosneft and NADL shall use their respective reasonable endeavours to make any such filings or obtain any such regulatory or third party approvals.
20.9
The total consideration for the purchase of the Xxxxxxxxxxx Business shall be an amount equal to the Xxxxxxxxxxx Option Price.
20.10
The Xxxxxxxxxxx Option Price shall be equal to the Xxxxxxxxxxx Consideration, plus any capital invested by any member of the Retained Group into the Xxxxxxxxxxx Business on or before exercise of the Xxxxxxxxxxx Option, minus any dividends, distributions, returns of capital or other leakage (if any) paid out of the Xxxxxxxxxxx Business to any member of the Retained Group on or before the date of exercise of the Xxxxxxxxxxx Option. Each of the aforementioned cashflows shall be expressed in Dollars and shall be increased by an amount of interest equal to 13.3% per annum calculated from the date that the respective cashflow took place up to the exercise of the Xxxxxxxxxxx Option.
20.11
The parties shall use their respective reasonable endeavours to procure that the Xxxxxxxxxxx Option Price shall be agreed in good faith as soon as possible following the service of the Xxxxxxxxxxx Option Notice and, in any event, within 20 (twenty) Business Days failing which, each matter in dispute shall be settled in accordance with Clause 34 of this Agreement.
20.12
Without prejudice to Clause 20.13, any transfer of the Xxxxxxxxxxx Business shall be on the following terms:
(A)
completion of the transfer of the Xxxxxxxxxxx Business shall take place within one hundred and twenty (120) calendar days after the date of the Xxxxxxxxxxx Option Notice (or such longer period as may be required in order to obtain any Regulatory Approval(s)); and
(B)
the Retained Group shall do all such other things and execute all other documents (including any deed) as NADL may reasonably request to give effect to the sale and purchase of the Xxxxxxxxxxx Business.
20.13
The parties agree that the sale and purchase of the Xxxxxxxxxxx Business pursuant to the Xxxxxxxxxxx Option Notice shall:
(A)
be effected on substantially the same terms as those set out in the Xxxxxxxxxxx SPA (but, subject to Clause 20.10);
(B)
shall not include any terms similar to the completion accounts adjustment in the Xxxxxxxxxxx SPA;
(C)
include warranties, indemnities and associated liability limitation provisions which are substantially similar to the warranties and indemnities and associated liability limitation provisions (including the date of expiry for bringing claims) contained in the Xxxxxxxxxxx SPA, subject only to such changes as are necessary to reflect any differences in sale structure (if applicable); and
(D)
include a warranty from Rosneft that no facts, circumstances or events have arisen or occurred and nothing has been done or omitted to be done in relation to the Xxxxxxxxxxx Business which would have given rise to a breach of any of the warranties contained in the Xxxxxxxxxxx SPA during the period of the Retained Group’s ownership of the Xxxxxxxxxxx Business provided that no claim shall be brought under such warranty unless written notice of such claim in accordance with Paragraph 2.1 of Part A of Schedule 7 (Limitations on Liability) shall have been given to Rosneft on or before the first anniversary of the completion of the transfer of the Xxxxxxxxxxx Business to the NADL Group.
The warranties in respect of the Xxxxxxxxxxx Business given by Rosneft to the relevant members of the NADL Group shall not be assignable by any such member of the NADL Group.
20.14
Subject to Clauses 20.8 to 20.13 (inclusive), if NADL exercises the Xxxxxxxxxxx Option, the parties shall negotiate the terms of the documentation pursuant to which the transfer of the Xxxxxxxxxxx Business will be effected in good faith and shall use their respective reasonable endeavours to agree all of the terms of the documentation as soon as reasonably practicable after the exercise of the Option Notice.
21.
BOOKS AND RECORDS
For a period of four years after Completion, Rosneft shall retain and provide, on request, copies of any Books and Records of the Sale Group or which relate exclusively to the Sale Group but which are held by Rosneft or a member of the Retained Group.
22.
EFFECT OF COMPLETION
Any provision of this Agreement and any other documents referred to in it which is capable of being performed after but which has not been performed at or before Completion and all representations and warranties and covenants and other undertakings contained in or entered into pursuant to this Agreement shall remain in full force and effect notwithstanding Completion.
23.
REMEDIES AND WAIVERS
23.1
No delay or omission by any party to this Agreement in exercising any right, power or remedy provided by law or under this Agreement or any other documents referred to in it shall:
(A)
affect that right, power or remedy; or
(B)
operate as a waiver of it.
23.2
The single or partial exercise of any right, power or remedy provided by law or under this Agreement shall not preclude any other or further exercise of it or the exercise of any other right, power or remedy.
23.3
Save as otherwise provided in this Agreement, the rights, powers and remedies provided in this Agreement are cumulative and not exclusive of any rights, powers and remedies provided by law (save for the right to rescind).
24.
ASSIGNMENT
24.1
This Agreement is personal to the parties to it. Accordingly no party may, without the prior written consent of Rosneft (in the case of Seadrill and NADL) or NADL (acting with consent of Seadrill) (in the case of Rosneft), assign, grant any security interest over, hold on trust or otherwise transfer the benefit of all or any of another party’s obligations under this Agreement, save in accordance with Clause 24.2.
24.2
Subject to Clause 24.3:
(A)
Rosneft may, without the consent of the other parties, assign to a subsidiary the benefit of the whole or any part of this Agreement, provided that if the assignee ceases to be a subsidiary of Rosneft, it shall before ceasing to be so assign the benefit, so far as assigned to it, back to Rosneft or assign the benefit to another subsidiary of Rosneft; and
(B)
Seadrill and/or NADL may, without the consent of Rosneft, assign the benefit of the whole or any part of this Agreement to a member of the Seadrill Group or the NADL Group (as the case may be), provided that if the assignee ceases to be a member of the Seadrill Group or the NADL Group, it shall before ceasing to be so assign the benefit, so far as assigned to it, back to Seadrill, NADL or another member of the Seadrill Group or NADL Group.
24.3
If any assignment is made in accordance with Clause 24.2, the assignee shall not be entitled to benefit from any greater obligation, or to receive any greater amount, than that to which the assignor would have been entitled.
25.
ENTIRE AGREEMENT
25.1
The Transaction Documents, the documents referred to therein to be entered into on the Signing Date and the Completion Date and the Letter of Award constitute the whole and only agreement between the parties relating to the Transactions.
25.2
The Transaction Documents and the Letter of Award supersede any previous agreements (other than the Offshore Drilling Contracts) relating to the subject matter of the Transaction Documents, and set out the complete legal relationship of the parties arising from or connected with that subject matter.
25.3
Except in the case of fraud, each party acknowledges that it is entering into the Transaction Documents in reliance upon only the Transaction Documents and the Letter of Award and that it is not relying upon any other pre contractual statement.
25.4
For the purposes of this Clause 25 (Entire Agreement), “pre contractual statement” means any draft, agreement, undertaking, representation, warranty, promise, assurance or arrangement of any nature whatsoever, whether or not in writing, relating to the subject matter of this Agreement made or given by any person at any time prior to this Agreement becoming legally binding.
25.5
A party’s only right or remedy under this Agreement in respect of a breach of any provision of this Agreement shall be for breach of this Agreement.
25.6
This Agreement may only be varied in writing signed by each of the parties.
25.7
At the Signing Date, the heads of agreement concluded by Rosneft and Seadrill and dated 31 March 2014 shall terminate, save for any rights of the parties accrued thereunder before the Signing Date.
25.8
In the event of any ambiguity or discrepancy between the provisions of this Agreement and any of the other Transaction Documents, the provisions of this Agreement shall prevail.
26.
NOTICES
26.1
A notice under this Agreement shall only be effective if it is in writing. E-mails are permitted.
26.2
Notices under this Agreement shall be sent to a party at its address and for the attention of the individual notified by each party to the other parties on or before the Signing Date, provided that a party may change its notice details on giving notice to the other parties of the change in accordance with this Clause 26 (Notices). That notice shall only be effective on the day falling five clear Business Days after the notification has been received or such later date as may be specified in the notice.
26.3
Any notice given under this Agreement shall be deemed to have been duly given as follows:
(A)
if delivered personally, on delivery;
(B)
if sent by airmail, six clear Business Days after the date of posting; and
(C)
if sent by e-mail, when sent/at the expiration of 48 hours after the time it was sent.
26.4
Any notice given under this Agreement outside Working Hours in the place to which it is addressed shall be deemed not to have been given until the start of the next period of Working Hours in such place.
27.
ANNOUNCEMENTS
27.1
Subject to Clause 27.2, the parties shall not make any announcement concerning the Transactions or any ancillary matter without the prior written approval of the other parties, such approval not to be unreasonably withheld or delayed.
27.2
A party may (and any member of the Retained Group or the Seadrill Group or the NADL Group may) make an announcement concerning the Transactions or any ancillary matter if required by:
(D)
law; or
(E)
any securities exchange or Authority or any Tax Authority to which that party (or member of the Retained Group or the Seadrill Group or the NADL Group) is subject or submits, wherever situated, whether or not the requirement has the force of law,
in which case the relevant party shall (or shall procure that the member of the Retained Group or the Seadrill Group or the NADL Group shall) take all such steps as may be reasonable and practicable in the circumstances to agree the contents of the announcement with the other parties to this Agreement before making the announcement.
27.3
The restrictions contained in this Clause 27 (Announcements) shall continue to apply after Completion or the termination of this Agreement without limit in time.
28.
CONFIDENTIALITY
28.1
Each party shall treat as confidential (and Rosneft shall procure that each member of the Retained Group shall treat as confidential, Seadrill shall procure that each member of the Seadrill Group shall treat as confidential and NADL shall procure that each member of the NADL Group shall treat as confidential), all information received or obtained as a result of entering into or performing this Agreement which relates to:
(F)
the provisions of this Agreement;
(G)
the negotiations relating to this Agreement and the Transactions;
(H)
the subject matter of this Agreement; or
(I)
the other parties,
and Rosneft shall, from Completion, also treat as confidential any information relating to the Sale Group.
28.2
Notwithstanding the other provisions of this Clause 28 (Confidentiality), a party may disclose any such confidential information:
(A)
to the extent required by law or for the purpose of any judicial proceedings;
(B)
to the extent required by any securities exchange or Authority or any Tax Authority to which that party is subject or submits, wherever situated, whether or not the requirement for information has the force of law;
(C)
to the extent required to vest the full benefit of this Agreement in that party;
(D)
to its professional advisers, auditors and bankers provided they have a duty to keep such information confidential;
(E)
to the extent the information has come into the public domain through no fault of that party; or
(F)
to the extent the other parties have given prior written consent to the disclosure, such consent not to be unreasonably withheld or delayed.
Any information to be disclosed pursuant to Clauses 28.2(A), 28.2(B), 28.2(C) or 28.2(D) shall be disclosed only after consultation with the other parties.
28.3
The restrictions contained in this Clause 28 shall continue to apply until three years after Completion or until three years after the termination of this Agreement (as applicable).
28.4
Rosneft acknowledges and agrees that:
(C)
if any information provided under Clause 9.3 constitutes material non-public information, then until such information has been made public it shall not (and shall procure that the members of the Retained Group shall not) engage in any behaviour while in possession of such information which would amount to xxxxxxx xxxxxxx, or market manipulation or other market abuse, for the purposes of U.S. federal and state securities laws, including Section 10(b) of the Exchange Act and Rules 10b-5, 10b5-1 and 10b5-2 promulgated thereunder (collectively, “U.S. Securities Laws”); and
(D)
some or all of the information referred to in (A) above may constitute material non-public information for the purposes of U.S. Securities laws. Rosneft hereby acknowledges that it is aware (and such members of the Retained Group as shall receive such information have been or will be advised by Rosneft) that the U.S. Securities Laws restrict both the purchase and sale of securities by persons who possess material non-public information relating to the issuer of such securities and the communication of such information to any other person under circumstances in which it is reasonably foreseeable that such other person is likely to purchase or sell such securities and further acknowledges that it shall not (and shall procure that the members of the Retained Group shall not) purchase or sell such securities while in possession of any such material non-public information, encourage another person to purchase or sell such securities or disclose such information to any other person under circumstances in which it is reasonably foreseeable that such other person is likely to purchase or sell such securities before such information has been made public.
29.
COSTS; EXPENSES AND TAX
29.1
Except as otherwise agreed, each party shall pay its own costs and expenses in relation to the negotiations leading up to the Transactions and the preparation, execution and carrying into effect of this Agreement and the other Transaction Documents and Rosneft confirms and undertakes that no expense of whatever nature relating to the Transactions has been or is to be borne by any member of the Sale Group.
29.2
All costs relating to the notarisation of the Russian SPA, certification of Rosneft’s (and its authorised representative’s) and NADL’s (and its authorised representative’s) signature on the Russian SPA, certification of Rosneft’s (and its authorised representative’s) signature on the Transfer Application Form, notification of the Company on transfer of the Shares to NADL and other related notarial services will be borne in equal proportions by NADL (on the one hand) and Rosneft (on the other hand).
29.3
Except as required by law, all payments made by any party (or any member of the NADL Group, member of the Seadrill Group or member of the Retained Group) pursuant to this Agreement shall be made free and clear of any deduction or withholding whether in respect of Tax or otherwise.
29.4
If any deductions or withholdings in respect of Tax are required by law to be made from any amounts due from any party pursuant to this Agreement then that party shall be obliged to pay the receiving party (or the relevant member of the NADL Group, member of the Seadrill Group or member of the Retained Group) such sum as shall, after the deduction or withholding has been made, leave the receiving party (or the relevant member of the NADL Group, member of the Seadrill Group or member of the Retained Group) with the same amount as it would have been entitled to receive in the absence of any such requirement to make a deduction or withholding.
29.5
If any sum payable under this Agreement shall be subject to Tax in the hands of the receiving party (or any member of the NADL Group, member of the Seadrill Group or member of the Retained Group), then, except to the extent that the amount of such payment has been increased to take account of the Tax that will be charged on receipt of such payment and, except in relation to interest, the amount so payable shall be increased by such amount as shall ensure that after payment of the Tax so charged there shall be left a sum equal to the amount that would otherwise be payable under this Agreement.
29.6
Rosneft and NADL shall discuss an efficient mechanism for the issue of the Contract Shares and the NADL Additional Contract Shares.
29.7
Clauses 29.3 and 29.5 shall be subject to Clause 3.7(A)(ii) and Clause 5.9(A)(ii), which shall prevail.
30.
COUNTERPARTS
30.1
This Agreement may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each party has executed at least one counterpart.
30.2
Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute but one and the same instrument.
31.
INVALIDITY
31.1
If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, that shall not affect or impair:
(E)
the legality, validity or enforceability in that jurisdiction of any other provision of this Agreement; or
(F)
the legality, validity or enforceability under the law of any other jurisdiction of that or any other provision of this Agreement.
32.
CONTRACTS (RIGHTS OF THIRD PARTIES) XXX 0000
32.1
Clauses 12.5, 13.4, 29.4 and 29.5 (the “Third Party Rights Clauses”) confer a benefit on certain persons named therein who are not a party to this Agreement (each for the purposes of this Clause 32 a “Third Party”) and, subject to the remaining provisions of this Clause, are intended to be enforceable by the Third Party by virtue of the Contracts (Rights of Third Parties) Xxx 0000.
32.2
The parties to this Agreement do not intend that any term of this Agreement, apart from the Third Party Rights Clauses, should be enforceable, by virtue of the Contracts (Rights of Third Parties) Xxx 0000, by any person who is not a party to this Agreement.
32.3
Notwithstanding the provisions of Clause 32.1, this Agreement may be varied in any way and at any time by the parties to this Agreement without the consent of any Third Party.
33.
CHOICE OF GOVERNING LAW
This Agreement is to be governed by and construed in accordance with English law. Any matter, claim or dispute arising out of or in connection with this Agreement, whether contractual or non-contractual, is to be governed by and determined in accordance with English law.
34.
ARBITRATION
34.1
All disputes arising out of or in connection with the present Agreement (other than those in relation to the Completion Accounts) shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules. The seat, or legal place, of arbitration shall be Paris. The language of the arbitration proceedings shall be English.
34.2
In the event that, after a dispute has arisen and arbitration is commenced under Clause 34.1 (“First Arbitration”), another dispute arises between some or all of the same parties that concerns the same or substantially similar issues of law or fact as those at issue in the First Arbitration (“Related Conflict”), then, for the purpose of constituting the arbitral tribunal in the Related Conflict, the parties agree to nominate the same arbitrators as they nominated in the First Arbitration and to write jointly to the International Chamber of Commerce to request the appointment of the same arbitrators for the Related Conflict.
34.3
If, before or after the commencement of the First Arbitration, an arbitration is commenced under any Transaction Document other than this Agreement (“Transaction Document Conflict”), and any party to the First Arbitration contends that the Transaction Document Conflict raises similar issues of law or fact to those at issue in the dispute the subject of the First Arbitration (such that the issues should be resolved in one proceeding), then, provided that no date has been fixed for the final hearing in the First Arbitration, the arbitral tribunal appointed in the First Arbitration (“First Tribunal”) will have the absolute discretion to determine whether in the interests of justice and efficiency the proceedings will be consolidated and heard together.
34.4
In the event that the First Tribunal makes an order under Clause 34.3 consolidating two (2) or more arbitrations (“Consolidation Order”), then the composition of the First Tribunal will remain unchanged, unless any members of the First Tribunal are subject to a disqualifying conflict of interest. In such event, a new tribunal will be constituted for the consolidated proceeding (“New Tribunal”), and the members of the New Tribunal will be selected as follows:
(A)
the parties to the consolidated proceeding will agree on the composition of the New Tribunal; and
(B)
failing such agreement within thirty (30) days of the First Tribunal issuing its Consolidation Order, the International Chamber of Commerce will appoint all members of the New Tribunal.
34.5
Each party to the consolidated proceeding will be bound by the award rendered by the First Tribunal (or the New Tribunal, if one is constituted), even if it chooses not to participate in the consolidated proceeding.
35.
NATURE OF THIS AGREEMENT
The parties hereby acknowledge and agree that this Agreement is not and shall not be deemed to be a transaction directed at the disposal of a participatory interest for the purposes of paragraph 1 of Article 21(11) of the LLC Law, and no party will raise any argument to the contrary. The parties hereby further acknowledge and agree that Clause 2 (NADL Issuance) is a contract establishing an obligation to enter into a transaction directed at the disposal of a participatory interest, provided that certain circumstances have occurred or the counterparty has performed certain counter obligations, within the meaning of paragraph 3 of Article 21(11) of the LLC Law.
36.
LANGUAGE
36.1
Each notice, demand, request, statement, instrument, certificate, or other communication under or in connection with this Agreement shall be:
(A)
in English; or
(B)
if not in English, accompanied by an English translation made by a translator, and certified to be accurate by an officer of the party giving the notice.
36.2
The receiving party or its agent (as appropriate) shall be entitled to assume the accuracy of and rely upon any English translation of any document provided pursuant to Clause 36.1.



Schedule 1
(Conditions to Completion)
1.
Competition consents
NADL having obtained the FAS Approval either without any qualifications or conditions, or with such qualifications and conditions as are acceptable to NADL and Rosneft, each acting reasonably.
2.
Regulatory matters
No order or judgment of any court or Authority having been issued or made and no sanctions, embargoes, export controls or restrictive measures of any Authority having been imposed or expanded prior to Completion, and no legal or regulatory requirements remaining to be satisfied, other than the obtaining of any non-mandatory or post-Completion merger control consent, which has or have the effect of making unlawful or otherwise prohibiting the Completion of the Transactions or the execution or performance of any of the Drilling Contracts.
3.
Operation of rigs
(C)
All of the Land Rigs set out in Part A of Attachment 3 (Land Rigs) being: (i) operated by the Sale Group; (ii) fit for purpose on an as is basis; and (iii) the subject of an Onshore Drilling Contract with a term of at least five years or with a term equivalent to the remaining useful life of the relevant Land Rig.
(D)
The Sale Group having entered into the VTB Leases with VTB Leasing in accordance with Clause 4.2, each of the VTB Leases remaining in full force and effect and each of the VTB Rigs being the subject of an Onshore Drilling Contract with a term of at least 5 years.
(E)
The Existing VTB Leases remaining in place and Rosneft having obtained the consent of VTB Leasing to the change in ownership or control of the Sale Group pursuant to this Agreement and the Russian SPA and a waiver from VTB Leasing of:
(i)
any rights that VTB Leasing has or may have under the terms of each of the Existing VTB Leases or otherwise to terminate any of the Existing VTB Leases as a result of such change in ownership or control and;
(ii)
any rights that VTB Leasing has or may have under the terms of each of the Existing VTB Leases or otherwise to impose any consent fee, break fee, termination payments, penalties or similar liabilities as a result of such change in ownership or control.
4.
Tender process
Rosneft having undertaken a tender process pursuant to the Procurement Law and Procurement Documentation of the relevant members of the Retained Group and having awarded all of the Onshore Drilling Contracts.
5.
Compliance with Clause 8 (Rosneft Actions Pending Completion)
Rosneft has complied in all material respects with its obligations in Clause 8 (Rosneft Actions Pending Completion).
6.
Rosneft approval
The passing of:
(A)
a resolution of the Rosneft Board of Directors to approve the Rosneft Approval Documents (other than this Agreement); and
(B)
a resolution of the Rosneft Board of Directors or a Management Board (as applicable) to approve this Agreement,
or, as may be applicable,
(C)
a resolution to approve the Rosneft Approval Documents at a duly convened and held general meeting of the shareholders of Rosneft.
7.
NYSE Listing
The Consideration Shares and the Subscription Shares shall have been approved for listing on the New York Stock Exchange, subject only to formal notice of issuance.
8.
Compliance with Clause 9 (NADL Actions Pending Completion)
Each of NADL and Seadrill has complied in all material respects with its obligations in Clause 9 (NADL Actions Pending Completion).







Schedule 2
(Rosneft Conduct of Business for the Sale Group before Completion)
The acts and matters referred to in Clause 8.1 are as follows:
Corporate matters
(A)
any creation, allotment or issue or any grant of any option over or other right to subscribe or purchase, or any redemption or purchase of, any share or loan capital or securities of any member of the Sale Group or securities convertible into any of the foregoing;
(B)
any alteration of the constitutional documents of any member of the Sale Group, or the adopting or passing of any further regulations or resolutions inconsistent with them unless required by applicable law;
(C)
the passing of any resolutions in general meeting or by way of written resolution for winding up of any member of the Sale Group;
(D)
any change to the accounting reference date of any member of the Sale Group or any of the accounting practices, bases, methodologies, formulae, techniques or principles by which the management accounts and accounting records of the Sale Group are drawn up;
General business conduct; financing
(E)
the making of any capital commitment which individually exceeds US$5,000,000 or which, together with all other capital commitments entered into between the Signing Date and the Completion Date, exceeds the sum of US$10,000,000 in aggregate;
(F)
any acquisition or disposal (not being a disposal in the ordinary course of business or on normal arm’s length terms) or creation or grant of any option, security or Encumbrance in respect of: (i) any interest in any material part of the business and undertaking of any member of the Sale Group; (ii) any asset or business which individually exceeds US$5,000,000; or (iii) any material Intellectual Property owned by the Sale Group;
(G)
the making of any loan which individually exceeds US$5,000,000 or which in aggregate exceed US$10,000,000 (other than the granting of trade credit in the ordinary course of business in accordance with the relevant member of the Sale Group’s normal practice) to any person (other than between members of the Sale Group);
(H)
any borrowing which individually exceeds US$5,000,000 or which in aggregate exceed US$10,000,000 (other than the receipt of trade credit in the ordinary course of business or pursuant to and in accordance with the limits subsisting at the Signing Date);
(I)
any material amendment, variation, waiver, termination (or giving of a notice of termination) of, or entry into:
(i)
any drilling programme commitments or drilling contracts which would result in any of the Land Rigs being unavailable for use pursuant to the Onshore Drilling Contracts from the anticipated date of commencement (as agreed between the parties);
(ii)
any guarantee or indemnity for the obligations of any person (other than any member of the Sale Group) which if called would result in a cost to any member of the Sale Group of US$5,000,000 or more;
(iii)
any transaction with any member of the Retained Group other than in the normal course of business or on arm’s length terms;
(iv)
any contract or commitment that is or would, if it were in written form, be a Material Contract;
(J)
any failure to take any action required to maintain any of the insurances in force as at the Signing Date or knowingly do anything to make any such policy of insurance void or voidable;
(K)
making any substantial change in the nature or organisation of the business of any member of the Sale Group or discontinuing or ceasing to operate all or a material part of the business of any member of the Sale Group;
(L)
the commencement, compromise, settlement, withdrawal or abandonment of any Dispute Resolution Process involving a claim or liability in excess of US$1,000,000;
Employees
(M)
any offer by any member of the Sale Group to engage:
(i)
a new General Director or any of the General Director's direct reports or a new Region Manager (or its equivalent) or any of the Region Manager's (or such equivalent's) direct reports, in each case, of the Company or Orenburg; or
(ii)
any new employee or consultant at an annual salary or fee per employee or consultant (on the basis of full time employment or consultancy) in excess of US$200,000 per annum;
(N)
any dismissal of:
(i)
the General Director or any of the General Director's director reports or the Region Manager or any of the Region Manager's direct reports, in each case, of the Company, Orenburg or any division of the Sale Group; or
(ii)
any employee earning in excess of US$200,000 per annum by any member of the Sale Group, other than for cause or unless not to do so would damage the business of the Sale Group;
(O)
any amendment, including any increase in emoluments (including pension contributions, bonuses, commissions and benefits in kind), to the terms of employment of any category of employees of any member of the Sale Group which would increase the aggregate remuneration of such category by more than 5% (five per cent.) save for increases in emoluments made in accordance with the normal practice of the Sale Group;
General
(P)
the acquisition or disposal of any interest in real property which individually exceeds US$1,000,000 or which in aggregate exceed US$5,000,000;
(Q)
the changing of the residence of any member of the Sale Group for Tax purposes; and
(R)
the entering into of any agreement (conditional or otherwise) to do any of the foregoing.
















Schedule 3
(NADL Conduct of Business before Completion)
The acts and matters referred to in Clause 9.1 are as follows:
Part A
(A)
except for the ordinary established dividend capped to US$0.235 per calendar quarter, any declaration, authorisation, making or payment of a dividend (in cash or in specie) or other distribution of a similar nature or taxed in the same way as a dividend or any reduction of capital (other than lawfully made by any member of the NADL Group to NADL);
(B)
any creation, allotment or issue or any grant of any option over or other right to subscribe or purchase, or any redemption or purchase of, any share or loan capital or securities of any member of the NADL Group or securities convertible into any of the foregoing;
(C)
any material amendment, variation, waiver, termination (or giving of a notice of termination) of, or entry into any drilling programme commitments or drilling contracts or any disposal which would result in the Offshore Rigs being unavailable for use pursuant to the Offshore Drilling Contracts from the anticipated date of commencement;
(D)
any material acquisition or material disposal (not being a disposal: (i) in the ordinary course of business; or (ii) on normal arm’s length terms;) by any member of the NADL Group which individually exceeds US$10,000,000;
(E)
any disposal of any drilling unit;
(F)
any material amendment, variation, waiver, termination (or giving of a notice of termination) of, or entry into any guarantee, security arrangement or indemnity for the obligations of any person (other than any member of the NADL Group) which if called would result in a cost to any member of the NADL Group of US$10,000,000 or more, other than any guarantee, security arrangement or indemnity for the obligations of any member of the Seadrill Group where the benefit received by NADL as a result of such amendment, variation, waiver, termination or entry is proportionate to the guarantee, security arrangement or indemnity provided;
(G)
changing the jurisdiction of incorporation of any member of the NADL Group;

Part B
(H)
any alteration of the constitutional documents of any member of the NADL Group, or the adopting or passing of any further bye-laws or resolutions inconsistent with them unless required by applicable law;
(I)
the passing of any resolutions in general meeting or by way of written resolution for winding up, or to capitalise any profits or any sum standing to the credit of any reserve, of any member of the NADL Group;
(J)
making any substantial change in the nature or organisation of the business of any member of the NADL Group or discontinuing or ceasing to operate all or a material part of the business of any member of the NADL Group; and
(K)
the entering into of any agreement (conditional or otherwise) to do any of the foregoing in Paragraphs (A) to (J).



Schedule 4
(Completion arrangements)
Part A (Rosneft’s Obligations)
At Completion, Rosneft shall:
1.
execute, in the presence of the Notary, three (3) counterparts of the Russian SPA;
2.
execute, in the presence of the Notary, one (1) counterpart of the Transfer Application Form in relation to the Russian SPA;
3.
procure that the Russian SPA and the Transfer Application Form in relation to the Russian SPA are duly notarised and provide or procure to be provided any documents necessary or reasonably requested by the Notary for the purposes of notarising the Russian SPA and the Transfer Application Form in relation to the Russian SPA in accordance with applicable Russian laws (to the extent such documents relate to Rosneft or the Company);
4.
deliver to NADL or Seadrill’s Solicitors:
(A)
duly notarised certified original counterpart of a pre-emption right waiver in the agreed form by the Company in respect of transfer of the Shares to NADL;
(B)
as evidence of the authority of each person executing the Rosneft Approval Documents and any other documents referred to in this Schedule 4 on behalf of Rosneft or the relevant member of the Retained Group or the relevant member of the Sale Group (as applicable):
(i)
originals of the written resolutions of the competent management bodies authorising the execution, delivery and performance of such Transaction Documents and each such other documents and all transactions contemplated therein, including, if applicable, as a major transaction (in Russian – крупная сделка) and/or related party transaction (in Russian – сделка, в совершении которой имеется заинтересованность) or, if not applicable, original confirmation letters from the general director of the respective companies in the agreed form that the respective documents and transactions contemplated therein do not constitute a major transaction (in Russian – крупная сделка) and related party transaction (in Russian – сделка, в совершении которой имеется заинтересованность) for such companies, and, if applicable, the issue of powers of attorney in favour of such person signing any of the foregoing on behalf of Rosneft, the relevant member of the Retained Group or the relevant member of the Sale Group; and
(ii)
originals of each power of attorney referred to in Paragraph (B)(i) above in the agreed form (if applicable).
5.
deliver to NADL an extract from the Register recording, and a copy of the relevant Russian law share purchase agreement effecting, the transfer by RN-Innostrannye Proyekty of the participatory interest in Orenburg not currently held by a member of the Sale Group to a member of the Sale Group;
6.
deliver to Seadrill a counterpart of the Shareholders’ Agreement duly executed by Rosneft;
7.
deliver to NADL a counterpart of each of the Onshore Drilling Contracts duly executed by Rosneft or other relevant member of the Retained Group and the relevant member of the Sale Group;
8.
deliver to NADL a signed letter of consent from each of the Rosneft directors who will be appointed to the board of directors of NADL from Completion in accordance with the Shareholders’ Agreement agreeing to act as a director of NADL;
9.
make available to NADL at the registered office of the relevant member of the Sale Group (to the extent not already there):
(A)
the statutory books (which shall be written up to but not including the Completion Date), the certificate of incorporation (and any certificate of incorporation on change of name) and common seal (if any) of each member of the Sale Group, constitutional documents and all amendments thereto, and all registration certificates of the Sale Group members with relevant Authorities, including certificates of registration appearing on the register, Tax registration, and registration with state funds and statistics authorities, as well as all papers, books, banking books, records, cheque books, corporate bank cards, stamps, accounting records (including 1-S-bookkeeping data), contracts, correspondence with Authorities and counterparties, tax declarations, balance sheets and forms, tax registers/ledgers, accounting registers/ledgers, all other documents construing (as per RAS) the accounting primary documents, ledgers and records of promissory notes (or any other kind of document of the same kind) issued and/or received by a Sale Group member, ledgers and records of all powers of attorneys issued by a Sale Group member, all electronic data (including: accounting database, electronic registers of any kind, software of any kind licensed for the use by a Sale Group member) and information needed for access to and use of (including all keys, codes, logins and passwords) all electronic data of the Sale Group members, including accounts, internet banking systems, bank accounts and any web-based data, all minutes of (decisions by) management bodies and staff lists;
(B)
the Books and Records referred to in Clause 21;
(C)
originals of the Material Contracts;
(D)
originals of the Accounts;
(E)
originals of the title documents for the Relevant Properties which will include ownership certificates with respect to each of the Relevant Properties;
10.
deliver to NADL:
(A)
an original decision (in the agreed form) of Rosneft as the sole participant of the Company evidencing the approval by Rosneft as the sole participant of the Company of the resignation of the existing general director of the Company with effect as of the Completion Date and the appointment of the person designated by NADL;
(B)
an original minutes (in the agreed form) of the general participants’ meeting of Orenburg evidencing the approval of the general participants’ meeting of Orenburg of the resignation of the existing general director of Orenburg with effect as of Completion Date and appointment of the person designated by NADL;
(C)
an original decision (in the agreed form) of the sole participant of Orenburg Subsidiary evidencing the approval by sole participant of Orenburg Subsidiary of the resignation of the existing general director of Orenburg Subsidiary with effect as of Completion Date and appointment of the person designated by NADL;
(D)
an original minutes (in the agreed form) of the general participants’ meeting of Orenburg approving the termination of powers of the board of directors of Orenburg with effect as of Completion Date and appointment of the board of directors comprising the persons designated by NADL in writing 15 calendar days prior to Completion;
(E)
two (2) executed original agreements in the agreed form between the Company and the general director of the Company providing for the mutual termination of the employment agreement of the general director of the Company;
(F)
two (2) executed original agreements in the agreed form between Orenburg and the general director of Orenburg providing for the mutual termination of the employment agreement of the general director of Orenburg;
(G)
two (2) executed original agreements in the agreed form between Orenburg Subsidiary and the general director of Orenburg Subsidiary providing for the mutual termination of the employment agreement of the general director of Orenburg Subsidiary;
(H)
originals of statements in the agreed form from each of the resigning general directors of the Company, Orenburg and Orenburg Subsidiary to the following banks informing the respective bank about his/her resignation and requesting and authorising the bank not to accept or act upon any request, order or instruction from him/her with regard to any bank account of the Company, Orenburg and Orenburg Subsidiary opened with such respective bank or any funds on such bank account:
(i)
the Company:
(a)
OJSC Russian Regional Development Bank (Moscow)
(b)
OJSC Far Eastern Bank, Krasnoyarsk branch (Krasnoyarsk)
(c)
OJSC Far Eastern Bank (Vladivostok)
(d)
OJSC Russian Regional Development Bank, Nefteyugansk branch (Nefteyugansk)
(e)
OJSC Far Eastern Bank, Sakhalin branch (Nogliki village)
(f)
OJSC Russian Regional Development Bank, Nefteyugansk branch (Gubkinskiy)
(g)
OJSC Russian Regional Development Bank, Krasnodar branch (Krasnodar)
(h)
OJSC Russian Regional Development Bank, Usinsk branch (Usinsk)
(i)
OJSC Far Eastern Bank, Irkutsk branch (Irkutsk)
(ii)
Orenburg:
(a)
OJSC Sberbank of Russia, Orenburg branch (Orenburg)
(b)
OJSC Sberbank of Russia, Saratov branch (Stepnoe)
(c)
OJSC VTB, Nizhniy Novgorod branch (Orenburg)
(d)
CJSC UniCredit Bank (Moscow)
(e)
OJSC Alfa Bank, Nizhegorodskiy branch (Orenburg)
(f)
OJSC Bank of Moscow, Nizhegorodskiy branch (Orenburg)
(g)
OJSC Bank of Moscow (Moscow)
(h)
OJSC OJSC Russian Regional Development Bank (Moscow)
(iii)
the Orenburg Subsidiary:
(a)
OJSC VTB (Orenburg)
(b)
OJSC Alfa Bank, Nizhegorodskiy branch (Orenburg)
(c)
OJSC OJSC Russian Regional Development Bank (Moscow); and
(I)
originals of the notarised power of attorneys in the agreed form issued by each resigning general director of the Company, Orenburg and Orenburg Subsidiary to the persons designated by NADL.
For the avoidance of doubt, the general directors of the members of the Sale Group shall be replaced on Completion as further envisaged by this Paragraph 10 only if the relevant request on replacement is delivered by NADL to Rosneft 15 calendar days prior to Completion and the Completion Accounts shall be prepared on the basis that NADL shall be liable for any payments by the members of the Sale Group as a result of such termination; and
11.
deliver to NADL a counterpart of the registration rights agreement substantially in the form set out in Schedule 12 duly executed by Rosneft.


Part B (Seadrill and NADL’s Obligations)
1.
At Completion, Seadrill shall:
(A)
deliver (or shall procure that the relevant member of the Seadrill Group shall deliver) to Rosneft a counterpart of the Shareholders’ Agreement duly executed by Seadrill; and
(B)
deliver to Rosneft or Rosneft’s Solicitors a copy of the minutes of duly held meetings or unanimous written resolutions of the directors of Seadrill authorising the execution of each of the Transaction Documents to which it is a party (such copy minutes or unanimous written resolutions being certified as true and correct by the secretary);
(C)
deliver to Rosneft a legal opinion in the agreed form in respect of the valid issuance of the Consideration Shares and the Subscription Shares and the future issuance of the Contract Shares; and
(D)
deliver (or shall procure that NADL delivers) to Rosneft a copy of the minutes of duly held meetings or written resolutions of the members of NADL approving the changes to the board of directors of NADL to reflect the terms of the Shareholders’ Agreement.
2.
At Completion, NADL shall:
(A)
execute, in the presence of the Notary, three (3) counterparts of the Russian SPA;
(B)
provide or procure to be provided to the Notary any documents necessary or reasonably requested by the Notary for the purposes of notarising the Russian SPA in accordance with applicable Russian laws (to the extent such documents relate to NADL);
(C)
deliver to Rosneft a copy of the FAS Approval and the BMA Consent; and
(D)
deliver a share certificate for the Consideration Shares and the Subscription Shares in the name of Rosneft (and at Completion or on the Business Day immediately following the Completion Date a certified copy of the updated register of members of NADL showing Rosneft as the registered holder of the Consideration Shares and the Subscription Shares);
(E)
deliver to Rosneft or Rosneft’s Solicitors a copy of the minutes of duly held meeting of the directors of NADL and the NADL Conflicts Committee authorising the execution of each of the NADL Approval Documents and the allotment and issue of the Consideration Shares, the Subscription Shares and the Contract Shares (such copy minutes or written resolutions being certified as true and correct by the secretary) and approving the changes to be made to the board of directors of NADL to reflect the terms of the Shareholders’ Agreement; and
(F)
deliver to Rosneft a counterpart of the registration rights agreement substantially in the form set out in Schedule 12 duly executed by NADL.




Schedule 5
(Rosneft Representations and Warranties)
Part A
Company Warranties
1.
Ownership of the Shares and shares in other members of the Sale Group
(A)
Rosneft is the sole legal and beneficial owner of the Shares. The Shares constitute the entire charter capital of the Company.
(B)
The Company's (and each other member of the Sale Group’s) charter capital has been fully paid up within the time periods established by Russian law.
(C)
There is no option, right to acquire, pledge or other form of security or encumbrance or equity on, over or affecting the Shares or shares held by any member of the Sale Group in any other member of the Sale Group or any of them and there is no agreement or commitment to give or create any and no claim has been made by any person to be entitled to any.
(D)
Neither Rosneft’s rights to the Shares or any part thereof nor any other member of the Sale Group’s rights to any shares in any other member of the Sale Group are being challenged either out-of-court or in court proceedings.
(E)
The Shares and all shares held by any member of the Sale Group in any other member of the Sale Group have been validly issued and allotted and are fully paid up, excluding for the avoidance of doubt shares in Orenburg and the Orenburg Subsidiary.
(F)
There is no agreement or commitment outstanding which calls for the allotment, issue or transfer of, or accords to any person the right to call for the allotment, issue or transfer of, any shares (including the Shares) or debentures in or securities of any member of the Sale Group.
(G)
None of the Shares nor any shares held by any member of the Sale Group in any other member of the Sale Group are subject to any rights of pre-emption or restrictions on transfer.
(H)
The information given in Part A of Attachment 1 (Basic information about the Company) and Part B of Attachment 1 (Basic information about the Subsidiaries) is true and accurate in all material respects and no member of the Sale Group has any interest in any other body corporate, unincorporated body, undertaking or association which is not a member of the Sale Group and so listed.
(I)
No member of the Sale Group has given any power of attorney or other authority (express, implied or ostensible) which is still outstanding or effective.
(J)
The copies of the constitutional documents of each member of the Sale Group which are attached to the Current Rosneft Disclosure Letter are complete and accurate in all respects, have attached to them copies of all resolutions and other documents required by law to be so attached and fully set out the rights and restrictions attaching to each class of share capital of the member of the Sale Group to which they relate. Each member of the Sale Group has complied with its constitutional documents in all material respects.
(K)
The statutory books (including all registers and minute books) of each member of the Sale Group have been properly kept in all material respects and contain an accurate and complete record of the matters which should be dealt with in those books and no notice or allegation that any of them is incorrect or should be rectified has been received.
(L)
There are no circumstances which are reasonably likely to give, or reasonably likely to have given, grounds to any person or authority to make any claims or initiate any proceedings or any other acts seeking to challenge Rosneft's ownership of the Shares or any other member of the Sale Group’s ownership of the shares in any other member of the Sale Group.
(M)
All transactions with participatory interests in the charter capital of the Company and each other member of the Sale Group have been concluded in accordance with Russian law (including civil, corporate, antimonopoly and family law) and the obligations under such transactions have been properly performed by the respective parties thereto.
(N)
Each member of the Sale Group is validly existing and is a company duly incorporated, and registered under the laws of the Russian Federation and has full power and authority under its constitutional documents and Russian law to conduct its business as it is presently carried on and to own, lease and operate its assets and properties.
(O)
No member of the Sale Group has repaid, redeemed or purchased any of its own participatory interest, reduced its charter capital, or agreed to do any of such actions.
(P)
No member of the Sale Group:
(i)
is the owner of, or has agreed to acquire, any shares, securities or other interests in any company (other than the participatory interest of a member of the Sale Group);
(ii)
is or has agreed to become a member of any partnership or other unincorporated association, joint venture or consortium (other than recognised trade associations);
(iii)
is a party to any profit sharing agreement; or
(iv)
is a party to or the subject of any shareholders' agreement (in Russian – договор об осуществлении прав участников общества).
(Q)
No member of the Sale Group has any branch, agency or permanent establishment in any foreign jurisdiction outside the Russian Federation.
1.
Company Accounts
(A)
The Company Accounts:
(i)
were prepared in all material respects in accordance with applicable law and accounting principles and practices generally accepted in the Russian Federation at the time they were audited;
(ii)
comply with RAS in force on the date they were prepared (for the avoidance of any doubt, the Company Accounts were prepared in accordance with RAS on a consistent basis subject only to applicable changes caused by changes in accounting standards);
(iii)
subject to Paragraph 2(A)(i) and (A)(ii), were prepared on the same basis and in accordance with the same accounting principles and practices, consistently applied, as the audited financial statements for the previous three financial periods; and
(iv)
show in all material respects a true view of the assets and liabilities, including all contingent liabilities (if required pursuant to RAS) and the state of affairs of the Company and of the profits or losses of the Company for the accounting period to which the Company Accounts relate.
2.
Company Management Information
The numbers set out against each line item in Attachment 6 (Company Management Information) are accurate allowing for a margin of error of 10% (ten per cent.).
3.
Events since the Accounts Date
Save in each case for any matter consented to by Seadrill or NADL for the purposes of Clause 8, since the Accounts Date:
(A)
there has been no material adverse change in the financial or trading position or prospects of any member of the Sale Group and so far as Rosneft is aware no circumstance has arisen which will give rise to any such change;
(B)
the business of each member of the Sale Group has been carried on in the ordinary and usual course and in the same manner (including nature and scope) as in the past in all material respects;
(C)
no resolution in general meeting or written resolution of shareholders of any member of the Sale Group has been passed;
(D)
no change in the accounting reference period of any member of the Sale Group has been made;
(E)
save for the Orenburg Acquisition, no member of the Sale Group has acquired or disposed of or agreed to acquire or dispose of any business or any material asset other than in the ordinary course of business and no contract involving material expenditure by it on capital account has been entered into by any member of the Sale Group; and
(F)
no material debtor has been released by any member of the Sale Group on terms that he pays materially less than the book value of any debt and no material debt has been written off or has proved to be irrecoverable to any extent.
4.
Contracts and commitments
(A)
Copies of all Material Contracts are in Folders 1.2.8, 1.2.15.4.1 to 1.2.15.4.3 (inclusive), 1.2.15.5.1 to 1.2.15.5.6 (inclusive), 2.2.3.4 and 3.2.5.4 in the Rosneft Data Room and those copies are accurate and complete in all respects. Each such agreement was entered into in the ordinary course of business.
(B)
Rosneft is not aware of any breach, invalidity, or grounds for determination, rescission, avoidance or repudiation of any Material Contract or of any allegation of such a thing and no notice of termination or intention to terminate has been received by Rosneft (or any member of the Sale Group) in respect thereof.
(C)
Other than the Material Contracts referred to in Paragraph 5 (A), no member of the Sale Group is a party to or has any material actual or contingent liability under:
(i)
any guarantee, indemnity, surety relationship, promissory note, xxxx of exchange or letter of credit;
(ii)
any material contract for rent, lease, hire, hire purchase, credit sale, conditional sale or purchase by instalments;
(iii)
any material agency, distributorship or management agreement;
(iv)
any contract or arrangement which, directly or indirectly, restricts its freedom to carry on its business in a material respect in any part of the world in such manner as it may think fit or the ability to transfer the whole or any part of its business;
(v)
any joint venture agreement or arrangement, partnership or any other agreement or arrangement under which it participates with any other person in any business in a material respect;
(vi)
any material contract or arrangement which relates to matters not within the ordinary business of that member or constitutes a commercial transaction or arrangement deviant from the usual pattern for that member or is not entirely on arm’s length terms;
(vii)
any contract or arrangement which is of three years’ or greater duration; or
(viii)
any contract or arrangement which can be terminated in the event of any change in the underlying ownership or control of that member.
5.
Insurances
(A)
Full details of the insurance policies in respect of which any member of the Sale Group has an interest are included in Folders 1.2.15.6, 2.2.3.5 and 3.2.5.5 in the Rosneft Data Room and all such policies are written in the name of the relevant member of the Sale Group, are in full force and effect and are not void or voidable, and no claims are outstanding and, so far as Rosneft is aware, no event has occurred which might give rise to any claim other than included in the Folders in the Rosneft Data Room.
(B)
Each member of the Sale Group has maintained adequate insurance cover:
(i)
against all risks normally insured against by companies carrying on a similar business in Russia, and in particular has maintained all insurance required by statute (including civil liability insurance under Federal Law of the Russian Federation No. 225-FZ of 27 July 2010 “On Compulsory Insurance of Civil Liability of the Owner of a Hazardous Object for Inflicting Damage as a Result of an Accident at the Hazardous Object”) and adequate environmental liability insurance;
(ii)
for the full residual value of their assets (free from any deduction or excess) and for such amount in respect of their businesses as would in the circumstances be prudent.
6.
Arrangements between the Sale Group and Rosneft
(A)
Full details of any material goods and services (including management and other head office services) supplied by any member of the Retained Group to any member of the Sale Group, or properties provided by any member of the Retained Group for the use by any member of the Sale Group, or supplied or provided (as the case may be) by any member of the Sale Group to or for the use of any member of the Retained Group are contained in Folders 1.2.15.7.1 to 1.2.15.7.3 (inclusive) and 2.2.3.6.1 of the Rosneft Data Room.
(B)
Save for the Inter-Company Payables details of which are set out in the Current Rosneft Disclosure Letter, no financial indebtedness (actual or contingent) and no contract or arrangement (in particular, but without limitation, any contract or arrangement in connection with loans or borrowings, Property, Intellectual Property, Business Information, supply arrangements or seconded employees) is outstanding between any member of the Sale Group and any member of the Retained Group.
(C)
No member of the Sale Group has agreed to guarantee or provide any securities or indemnities in relation to any debt or obligation of any member of the Retained Group.
7.
Bank accounts and borrowings
(A)
Full details of all bank accounts maintained by each member of the Sale Group are set out in the Current Rosneft Disclosure Letter.
(B)
Full details of all overdraft, loan and other financial facilities available to any member of the Sale Group and the amounts outstanding under them are set out in the Current Rosneft Disclosure Letter and, so far as Rosneft is aware, neither Rosneft nor any member of the Sale Group has done anything whereby the continuance of any of those facilities might be affected or prejudiced. Details of all debentures, charges, guarantees and indemnities given to secure those facilities are set out in the Current Rosneft Disclosure Letter.
(C)
The total amount borrowed by each member of the Sale Group from its bankers does not exceed its financial facilities and the total amount borrowed from whatsoever source does not exceed any limitation on its borrowing contained in the relevant member’s constitutional documents.
(D)
So far as Rosneft is aware, no event which is or, with the passing of any time or the giving of any notice, certificate, declaration or demand, would become an event of default under or any breach of any of the terms of any loan capital, borrowing, debenture or financial facility of any member of the Sale Group or would entitle any third party to call for repayment prior to normal maturity has occurred or been alleged or is continuing.
(E)
No member of the Sale Group has lent or agreed to lend any money which has not been repaid to it or has the benefit of any debt present or future (other than debts due to it in respect of the sale of trading stock in the normal course of trading).
8.
Insolvency
(A)
No order has been made, no petition has been presented, no meeting has been convened to consider a resolution and no resolution has been passed for the winding up of any member of the Sale Group.
(B)
There is no action or request pending to declare any member of the Sale Group bankrupt or insolvent. No member of the Sale Group is subject to any order, petition or resolution with respect to insolvency or bankruptcy proceedings, or any similar actions or proceedings, and, so far as Rosneft is aware, there is no fact, matter, event or circumstance which could give rise to any of the foregoing.
(C)
No administration order has been made or petition presented or application made for such an order and no administrator has been appointed or notice given or filed or, so far as Rosneft is aware, step taken or procedure commenced with a view to the appointment of an administrator in respect of any member of the Sale Group.
(D)
No administrator (in Russian – арбитражный управляющий) has been appointed in respect of any member of the Sale Group or all or any of its assets.
(E)
No member of the Sale Group is insolvent, or has failed to pay, secure or compound for any sum exceeding US$500,000 so as to entitle any of its creditors to initiate insolvency proceedings, or is unable to pay or has stopped paying its debts as they fall due and the value of the assets of any member of the Sale Group is not less than the amount of its liabilities, taking into account its contingent and prospective liabilities.
(F)
No unsatisfied judgment is outstanding against any member of the Sale Group.
(G)
No Insolvency Event has occurred in relation to any member of the Sale Group, and there are no circumstances which are likely to result in an Insolvency Event in relation to any member of the Sale Group.
9.
Licences
(A)
So far as Rosneft is aware, all material licences, permits, consents and other permissions and approvals required for the carrying on of the business now being carried on by each member of the Sale Group have been obtained and remain in full force and effect, are not subject to onerous conditions and have at all times been complied with in all material respects.
(B)
All reports, returns and information required by law or as a condition of any licence, consent, permit permission or approval to be made or given to any person or authority in connection with the business of any member of the Sale Group have been made or given to the appropriate person or authority.
(C)
So far as Rosneft is aware, there is no circumstance which indicates that any licence, consent, permit, permission or approval is reasonably likely to be varied, revoked or not renewed, or which is reasonably likely to confer a right of variation or revocation.
10.
Ownership of assets
(A)
The particulars of the Land Rigs set out in Part A of Attachment 3 (Land Rigs) are true, complete and accurate in all respects.
(B)
Each of the assets included in the Company Accounts or acquired by any member of the Sale Group since the Accounts Date (other than current assets sold, realised or applied in the normal course of trading) and each of the Land Rigs set out in Part A of Attachment 3 (Land Rigs) is owned or in the case of the Leased Rigs leased by a member of the Sale Group free from any Encumbrances and any third party rights other than as disclosed, and each of those assets capable of possession is in the possession of a member of the Sale Group.
(C)
Subject to normal wear and tear, all plant and machinery (including fixed plant and machinery and Land Rigs set out in Part A of Attachment 3 (Land Rigs)), vehicles and office equipment used by any member of the Sale Group in connection with its business are capable of being efficiently and properly used in connection with the business of the relevant member of the Sale Group.
(D)
No member of the Sale Group has any actual or contingent liability in respect of any activities of the Sale Group which do not form part of or are not related or ancillary to the Drilling Business.
11.
Property
(A)
The particulars of the Relevant Properties set out in Attachment 2 (Relevant Properties) are true, complete and accurate in all respects.
(B)
In relation to each Relevant Property, the relevant member of the Sale Group is the sole and absolute owner of such Relevant Property and has good and marketable title to it. There are no leases, servitudes, rights or means of access, mortgages (or agreements to grant any of the foregoing) or agreements for sale or other disposal, affecting any of the Relevant Properties and, so far as Rosneft is aware, no person has or claims to have any right in respect of any of the Relevant Properties.
(C)
There are no outstanding disputes, actions, claims, demands or complaints in respect of any Relevant Property.
(D)
No notices, complaints or requirements have been issued or made by any third party or by any competent authority or undertaking exercising statutory or delegated powers in respect of the Relevant Properties and where such notices, complaints or requirements may have a material adverse effect on the business of the Company.
(E)
No member of the Sale Group has any actual or contingent liability in respect of any estate or interest in real property whether arising as original tenant, assignee, guarantor or otherwise, other than in respect of the Relevant Properties.
(F)
All title documentation relating to the Relevant Properties is in the possession of the relevant Sale Group members.
12.
Environmental and Health and Safety
(A)
In this Paragraph:
“EHS Claim”
means any investigation, inquiry, warning, notice, order, action, proceedings, litigation, claim or complaint by any regulatory body or any person under EHS Laws or in relation to EHS Matters that relate or apply to the activities, business or assets of the Sale Group;
“EHS Laws”
means all applicable laws of the Russian Federation (including all international treaties ratified by the Russian Federation or which apply in the Russian Federation) insofar as they relate to or apply to EHS Matters and apply to the activities, business or assets of the Sale Group;
“EHS Matters”
means:
(i) pollution or contamination;
(ii) the disposal, release, spillage, deposit, escape, discharge, leak or emission of, Hazardous Materials or Waste;
(iii) exposure of any person to Hazardous Materials or Waste;
(iv) abstraction of water;
(v) matters related to health and safety at work;
(vi) the creation or existence of any noise, vibration, radiation, common law or statutory nuisance, or other adverse impact on the Environment; and/or
(vii) any other matters relating to human health and safety or the condition, protection, maintenance, restoration or replacement of the Environment or any part of it;
“EHS Permits”
means any permit, agreement, exemption, approval, registration, certification, licence, consent, declaration, franchise, surcharge, credit, allowance or authorisation in relation to EHS Matters or required by EHS Laws to carry on the business of any member of the Sale Group or in relation to any Relevant Properties or other assets of any member of the Sale Group;
“Environment”
means all or any part of the air (including the air within buildings and the air within other natural or man-made structures above or below ground), water and land and any living organisms or systems supported by those media;
“Hazardous Material”
means anything which alone or in combination with other things is capable of causing harm or damage to the Environment, property or to man or to any other organism supported by the Environment including any hazardous or toxic substances or pollutants, or which is regulated, controlled, prohibited or restricted by law or regulation relating to the Environment or EHS Matters; and
“Waste”
means any substance or material which is regulated, controlled, prohibited or restricted by law or regulation as “waste” including anything which is abandoned, unwanted or surplus irrespective of whether it is capable of being recovered or recycled or has any value; and
“Works”
means the carrying out of:
(i) inspection, investigation, sampling and monitoring works; and
(ii) any works, including the installation, operation, repair or replacement of plant or equipment, in order to manage, remove, remediate or contain any EHS Matter or in order to prevent an EHS Matter from arising.
(B)
All material EHS Permits which are required under EHS Laws for the carrying on of the business of any member of the Sale Group have been obtained in the name of such member of the Sale Group and are valid, subsisting and in full force and effect.
(C)
So far as Rosneft is aware, each member of the Sale Group has complied with EHS Law and the EHS Permits at all times in all material respects.
(D)
So far as Rosneft is aware:
(i)
there have been no acts or omissions of any member of the Sale Group in relation to EHS Matters; and
(ii)
no EHS Matters exist or have arisen at or about any of the Relevant Properties;
which could give rise to material fines, penalties, losses, damages, costs, expenses or liabilities or could require any material Works.
(E)
No material capital expenditure is proposed in relation to EHS Matters or is likely to be required in order to comply with, extend, renew or obtain any EHS Permit or obtain any new or additional EHS Permit or comply with EHS Laws during the period ending five years from the Signing Date in relation to the carrying on of the business of the Sale Group substantially as it is presently carried on.
(F)
So far as Rosneft is aware:
(i)
there has been no landfilling or burial of Hazardous Materials or Waste at any Relevant Property; and
(ii)
there are no underground storage tanks at any Relevant Property.
(G)
So far as Rosneft is aware, there has been no transfer, treatment or disposal of Hazardous Materials or Waste by or on behalf of any member of the Sale Group in circumstances which could give rise to any EHS Claim or any material fines, penalties, losses, damages, costs, expenses or liabilities or could require any material Works.
(H)
No member of the Sale Group is currently involved in or subject to any EHS Claim, none is threatened and, so far as Rosneft is aware, none is reasonably likely to arise. No member of the Sale Group has received any notice, communication or information alleging any material liability in relation to EHS Matters or that any material Works are required or stating or suggesting that there is or might be any pollution, contamination or nuisance at or from any Relevant Property.
(I)
Complete and accurate copies of all audits, assessments, surveys, searches, reviews, reports and compliance, liability or remediation cost studies or estimates in the possession or control of Rosneft or any member of the Sale Group which relate to:
(i)
an outstanding material breach of EHS Law or an EHS Permit by a member of the Sale Group; and/or
(ii)
an outstanding material liability or potential material liability for a member of the Sale Group under EHS Law, an EHS Permit or otherwise in respect of EHS Matters;
are included in Folders 1.2.15.13, 1.2.15.14.1 and 2.2.3.12.1 of the Rosneft Data Room.
(J)
So far as Rosneft is aware, no member of the Sale Group has any material liability in respect of EHS Matters arising out of or in connection with (i) any act or omission of any former subsidiary, subsidiary undertaking or affiliate or any former or predecessor business or any formerly owned, occupied or used property; or (ii) any contract or other agreement whether relating to the sale or other disposal or grant of any interest or rights in relation to any shares, land or other asset or otherwise.
13.
Litigation
(A)
Except as claimant in the collection of debts arising in the ordinary course of business, no member of the Sale Group (or any of its directors in connection with the business of the Sale Group) is engaged in any litigation, arbitration or other dispute resolution process, or administrative or criminal proceedings, whether as claimant, defendant or otherwise. No litigation, arbitration or other dispute resolution process, or administrative or criminal proceedings by or against any member of the Sale Group (or any of its directors in connection with the business of the Sale Group) is pending, threatened or expected. So far as Rosneft is aware, there is no fact or circumstance likely to give rise to any litigation, arbitration, mediation or administrative or criminal proceedings.
(B)
No member of the Sale Group has received notification that any investigation or inquiry is being or has been conducted by any Authority or other body in respect of the affairs of any member of the Sale Group. Rosneft is not aware of any circumstances which would give rise to such investigation or inquiry.
(C)
No member of the Sale Group (or any of its directors in connection with the business of the Sale Group) has committed or is liable for any criminal, illegal, unlawful or unauthorised act or breach of any material obligation or duty whether imposed by or pursuant to statute, contract or otherwise, and no claim that it has or is remains outstanding against any such member.
(D)
No inducement (financial or otherwise) has been given to any person by or on behalf of any member of the Sale Group with a view to that member of the Sale Group entering into any contract or other arrangement or obtaining any benefit.
14.
Data Protection
(A)
Each member of the Sale Group complies in all material respects with all applicable laws, guidelines and industry standards relating to the processing of personal data and privacy, including provisions of the Russian Civil Code and Federal Law of the Russian Federation No. 152-FZ of 27 July 2006 “On Personal Data”.
15.
Employment
(A)
Save as disclosed in the Current Rosneft Disclosure Letter, no trade union, works council, staff association or other body representing employees is recognised in any way for bargaining, information or consultation purposes in relation to their respective employees by either the Company or any Subsidiary and there are no agreements for collective bargaining or recognition with any such representative body.
(B)
No employee or former employee of either the Company or any Subsidiary has brought any existing, or threatened to bring any material claims against them in respect of their employment or any other matter arising from their employment and so far as Rosneft is aware there are no facts or matters which could give rise to such claims.
(C)
Each of the Company and the Subsidiaries has complied in all material respects with the terms of all relevant contracts of employment, policies, benefits and applicable laws, codes of conduct, collective agreements and orders and declarations relevant to its respective employees.
(D)
Since the Accounts Date no material change has been made or proposed to the remuneration or other terms of employment of any Key Employee or to employees which in aggregate for those employees could have a material effect and no such change and no request for such change is due or expected within 6 months from the Signing Date.
(E)
There is no material obligation or material amount due to any employee of the Company or the Subsidiaries in connection with or arising from his employment (or to any other relevant third party in respect of any such employee) which is in arrears or unsatisfied at the Signing Date (other than his normal salary for part of the month current).
(F)
Full details of any (i) non-cash benefits or (ii) variable pay arrangements including bonus and commission arrangements or (iii) long term incentive or share option arrangements which in each case are provided to employees of the Company and the Subsidiaries have been disclosed.
(G)
No Key Employee has given or received a notice in writing terminating his/her employment or engagement or is entitled (without giving prior notice) to terminate his/her employment or engagement with the relevant member of the Sale Group or will become so entitled by reason of the contribution of the Shares under this Agreement.
(H)
No employee of either the Company or any Subsidiary is a party to or entitled to become a party to any agreement or arrangement that entitles such employee to receive from any member of the Sale Group any compensation on termination of employment or service other than as prescribed by mandatory provisions of the Russian law.
16.
Pensions
(A)
Other than any compulsory state pension scheme and the disclosed arrangements in relation to Neftegarant, there is no arrangement to which either the Company or the Subsidiaries contribute or may be liable to contribute under which benefits of any kind are payable to or in respect of any of their employees or former employees on retirement, death, disability, the attainment of a specified age or on the completion of a specified number of years’ service.
(B)
All contributions by the Company or the Subsidiaries or by any of their employees in respect of any state pension scheme, Neftegarant or any other pension arrangement to which it has or may be liable to contribute have at all times been made in accordance with the relevant provisions of the relevant scheme and those which fall due for payment before Completion will have been paid by that date.
(C)
The pension schemes for the employees of the Company and the Subsidiaries have been operated in all material respects in accordance with all applicable laws, their terms and have all applicable governmental and regulatory approvals which are necessary.
(D)
Any pension schemes for the employees of the Company and the Subsidiaries are appropriately funded in accordance with local laws and have sufficient assets to meet their liabilities in accordance with the applicable accounting standards’ valuation principles.
(E)
There are not in respect of any pension arrangements to which the Company or any Subsidiary contributes or has contributed or may become liable to contribute any material actions, suits or claims existing or, so far as Rosneft is aware, pending or threatened.
17.
Tax
The Accounts and Tax
(A)
The Company does not have any liability in respect of Tax (whether actual or contingent) in respect of the accounting period of the Company to which the Company Accounts relate that is not fully disclosed and provided for in the Company Accounts in each case as prepared in accordance with the accounting standards relevant for such Accounts.
Tax returns, disputes, records and claims, etc.
(B)
Each member of the Sale Group has duly filed all Tax returns, forms and/or reports which are required under applicable law to be filed within the applicable time limits and such returns, forms and/or reports are correct and duly account for all transactions carried out by the Sale Group which are required under applicable law to be disclosed in such returns, forms and/or reports.
(C)
All Tax (including any interest, penalties and surcharges) due and payable by each member of the Sale Group in accordance with applicable law (including those required to have been paid by way of withholding of Tax) prior to Completion Date have been paid on time and in full.
(D)
There is no dispute or disagreement outstanding nor is any contemplated at the date of this Agreement with any Tax Authority regarding the Tax affairs of any member of the Sale Group and there are no circumstances which make it likely that any such dispute or disagreement will commence.
(E)
Each member of the Sale Group has kept and maintained all records relevant to its Tax affairs as required by applicable law. However no claim may be made under this warranty in respect of any unavailability of Tax Relief.
(F)
Each member of the Sale Group has duly submitted all claims and disclaimers or withdrawals of claims relating to Tax which have been assumed to have been made for the purposes of its Accounts.
(G)
The amount of Tax chargeable on any member of the Sale Group under any return or assessment that remains open to audit or enquiry as at the Completion Date has not, to any material extent, depended on any concession, agreement or other formal or informal arrangement with any Tax Authority. No transaction in respect of which any consent, ruling, advanced agreement, confirmation or clearance (each a ruling) was required to be sought from any Tax Authority has been entered into or carried out by any member of the Sale Group without such ruling having first been properly obtained and all transactions in respect of which any consent, ruling, advanced agreement, confirmation or clearance (each a ruling) was obtained from any Tax Authority were carried out in accordance with the terms prescribed by such ruling.
(H)
No member of the Sale Group has received any notice from any Tax Authority which requires or will or may require such member to withhold Tax from any payment made since the Accounts Date or which will or may be made after the date of this Agreement.
(I)
No member of the Sale Group benefits from any preferential Tax regime, granted by law or by special authorisation issued by any Tax Authority or by any other authority, which could in whole or in part be affected by the signature of this Agreement.
Tax avoidance, etc.
(J)
No member of the Sale Group is party to any transaction which is fraudulent or a sham or which has as its main purpose or one of its main purposes the avoidance of a liability to Tax.
(K)
No member of the Sale Group has violated, breached or infringed any anti-abuse or similar rule in relation to Tax in any jurisdiction where any relief from Tax has been claimed for the benefit of any member of the Sale Group under domestic laws or any applicable double taxation treaty.
Value added tax
(L)
Each member of the Sale Group has complied in all material respects with its obligations relating to VAT. Each member of the Sale Group that is required to be registered for the purposes of VAT has been so registered at all times that it has been so required, and such registration is not subject to any conditions imposed by or agreed with the relevant Tax Authority.
(M)
Full, complete, correct and up-to-date records, invoices and other documents relating to VAT have been made, given, obtained and kept in each case in accordance with applicable law.
Duties, etc.
(N)
All VAT, import and export duties, royalties and other taxes or charges payable by any member of the Sale Group to any Tax Authority relating to the production of hydrocarbons or the importation or export of goods and assets and all excise duties payable to any Tax Authority in respect of any assets (including trading stock) imported, exported, produced, owned or used by any member of the Sale Group have been duly declared and paid in full.
Deductions and withholdings
(O)
Each member of the Sale Group has made all deductions in respect, or on account, of any Tax from any payments made by it which it is obliged to make under applicable law and has accounted in full to the appropriate authority for all amounts so deducted.
Residence
(P)
Each member of the Sale Group is resident for Tax purposes in the Russian Federation and the Russian Federation is the only jurisdiction whose Tax Authorities seek to charge Tax on the worldwide profits or gains of such member. No member of the Sale Group has any agency, branch or permanent establishment in any jurisdiction except as the same are branches or representative offices as specified in Attachment 1 (Sale Group Information) in relation to such member.
Tax Grouping
(Q)
Except as provided in its Accounts, no member of the Sale Group is, nor will it be, under any obligation to make any payment to anyone (including but not limited to members of the Retained Group but excluding any member of the Sale Group) under any Tax grouping, Tax sharing, fiscal consolidation or similar arrangements.
Non-arm’s length transactions
(R)
No member of the Sale Group is or has been a party to any transaction or arrangement under which it may be required to pay for any asset or services or facilities of any kind an amount which is in excess of the market value of that asset or services or facilities or will receive any payment for any asset or services or facilities of any kind that it has supplied or provided or is liable to supply or provide which is less than the market value of that asset or services or facilities and in consequence of which it is or will be liable to Tax in relation to such excess or undervalue, and for the purposes of this warranty, market value shall be taken to mean market value determined for the purposes of and in accordance with any requirements of applicable transfer pricing legislation and this warranty shall apply only to any transaction or arrangement which falls under the transfer pricing regulation.
18.
Intellectual Property
(A)
Details of all registered Intellectual Property and material unregistered Intellectual Property owned or used by any member of the Sale Group are set out in the Current Rosneft Disclosure Letter and the specified member of the Sale Group:
(i)
is the sole legal and beneficial owner of such Intellectual Property; or
(ii)
uses such Intellectual Property pursuant to and within the terms and provisions of a valid, subsisting written contractual agreement or licence to which it is a party.
(B)
All renewal, application and other official registry fees and steps required for the maintenance, protection and enforcement of the Intellectual Property owned by any member of the Sale Group have been paid or taken.
(C)
Copies of all material licences, agreements and arrangements relating to Intellectual Property entered into by any member of the Sale Group are set out in Folders 1.2.15.19 and 2.2.3.11 of the Rosneft Data Room and no such material licences, agreements or arrangements are capable of termination as a result of the change in the underlying ownership or control of any member of the Sale Group.
(D)
No member of the Sale Group nor, so far as Rosneft is aware, any other party is in material breach of any of the licences, agreements and arrangements disclosed pursuant to Paragraph 19(A).
(E)
So far as Rosneft is aware, no third party is infringing or making unauthorised use of any Intellectual Property or rights in Business Information owned by any member of the Sale Group (or owned by any member of the Retained Group and relating to the business of any member of the Sale Group).
(F)
So far as Rosneft is aware, the activities of the Sale Group do not infringe or make unauthorised use of, and have not infringed or made unauthorised use of, the Intellectual Property of any third party.
(G)
No member of the Retained Group owns or is licensed to use any Intellectual Property or information which is also used by any member of the Sale Group.
(H)
None of the Intellectual Property is the subject of any litigation, dispute, claim, opposition or administrative proceeding and, so far as Rosneft is aware, no such litigation, dispute, claim, opposition or administrative proceeding is expected or reasonably likely.
19.
Information Technology
(A)
Details of all material Information Technology which is owned by any member of the Sale Group or which is used by, or on behalf of, any member of the Sale Group are set out in the Current Rosneft Disclosure Letter and the specified member of the Sale Group:
(i)
is the sole legal and beneficial owner of such Information Technology free from all Encumbrances; or
(ii)
uses such Information Technology pursuant to and within the terms and provisions of a valid, subsisting written contractual arrangement or licence to which it is a party.
(B)
Copies of all material agreements relating to Information Technology entered into by any member of the Sale Group are set out in Folders 1.2.15.19 and 2.2.3.11 in the Rosneft Data Room and no such material agreements are capable of termination as a result of the change in the underlying ownership or control of any member of the Sale Group.
(C)
No member of the Sale Group nor, so far as Rosneft is aware, any other party is in material breach of any of the agreements disclosed pursuant to Paragraph 20(B).
(D)
None of the Information Technology is the subject of any litigation, dispute, claim, opposition or administrative proceeding and, so far as Rosneft is aware, no such litigation, dispute, claim, opposition or administrative proceeding is expected or reasonably likely.
(E)
There has been no material disruption to the commercial activities of the Sale Group (taken as a whole) in the six months prior to the Signing Date which has been caused only by any failure or breakdown of any Information Technology used by the Sale Group.
20.
Anti-corruption
21.1
For the purposes of this Paragraph 21:
“Anti-Corruption Rules” means: (i) all laws, regulations and administrative requirements in the Russian Federation relating to the prevention and/or penalisation of bribery, money laundering and other forms of corrupt behaviour or practices or terrorism and anti-corruption internal policies, by-laws and other similar documents adopted by any member of the Sale Group as disclosed in Folder 4.1 of the Rosneft Data Room; and; (ii) the Company Policy for Combating Involvement in corrupt Practices put into effect at the Company under order dated 31 August 2012 No.199;
“associated person” means any officer, employee, consultant, agent or other person who performs services or otherwise acts for or on behalf of any member of the Sale Group;
“financial or other advantage” means any payment or other advantage in whatever form and however characterised (including any bribe, rebate, pay-off, influence payment, kickback, inducement or gift);
“government official” means: (i) any person that permanently, temporarily or under special authority performs the functions of a representative of any state or municipal authority; (ii) any person that permanently, temporarily or under special authority performs administrative or organisational functions of any public authority, local authority, national or municipal body, the Armed Forces of the Russian Federation or any other military unit of the Russian Federation; (iii) any officer or employee of a commercial organisation that is fully or partially owned by the state or municipal authority; or (iv) any candidate / applicant to fill any public or municipal office or post in the civil or municipal service, including any post in the government;
“public official” means: (i) any official or employee of a public body; or (ii) any candidate / applicant to fill any office in a public body.
“unlawful” in relation to any financial or other advantage, means that the offer, giving, promise, request or acceptance of, or agreement to receive, such financial or other advantage is or is reasonably likely to be in breach of Anti-Corruption Rules;
21.2
Except as disclosed in the Current Rosneft Disclosure Letter, none of the members of the Sale Group, their respective officers, directors or employees has, and so far as Rosneft is aware, none of the Sale Group’s other associated persons has, at any time directly or indirectly:
(A)
offered, given, promised or paid any unlawful financial or other advantage to any person; or
(B)
requested, agreed to receive or accepted any unlawful financial or other advantage or acted or omitted to act (or influenced another to act or omit to act) in anticipation or in consequence of doing so; or
(C)
made or offered to make any payment, or given or offered to give anything of value, to any government official or public official, in order to secure any improper advantage or to obtain or retain business for the Sale Group.
21.3
The Sale Group has such systems and controls as are necessary to ensure compliance by it and its associated persons with Anti-Corruption Rules and, so far as Rosneft is aware, there has been no breach by the Sale Group or any of its associated persons of any such systems or controls.
21.4
Except as disclosed in the Current Rosneft Disclosure Letter, neither Rosneft nor any member of the Sale Group has within the last six years received any enquiry regarding or report or complaint of, or initiated any investigation or disciplinary proceedings in connection with, any breach or possible breach of Anti-Corruption Rules by any member of the Sale Group or any of its associated persons.
21.5
Except as disclosed in the Current Rosneft Disclosure Letter, neither Rosneft nor any member of the Sale Group has within the last six years, been subject to any investigation, inquiry, enforcement proceedings or sanction relating to any member of the Sale Group by any Authority relating to Anti-Corruption Rules.
21.
Broker fees
No member of the Sale Group is liable for any finder's fee, brokerage or other commission or advisers' fees, costs or expenses in connection with this Agreement or any other Transaction Document.
22.
Effect of the acquisition
The entry into and performance of this Agreement and other Transaction Documents will not:
(A)
result in any member of the Sale Group losing the benefit of any of the Relevant Properties, any Land Rig or any other material asset or material right or privilege which it now enjoys;
(B)
conflict with, or result in a breach of, or give rise to an event of default under, or require the consent of any person under any agreement, contract, arrangement, judgment, order, decree, award, demand, ruling, injunction or decision to which any member of the Sale Group is subject or bound; or
(C)
result in any payment or other benefit to any employee of any member of the Sale Group.
23.
Compliance with Laws
So far as Rosneft is aware, no member of the Sale Group has any liability, or is liable to give up or surrender any right or asset, as a result of any fraudulent act or omission on the part of any member of the Sale Group or any employee of the Sale Group in their capacity as such an employee.
24.
Competition
25.1
So far as Rosneft is aware, no member of the Sale Group is or has over the course of the last five years:
(A)
insofar as it may materially affect the business of the Sale Group, the NADL Group or the Seadrill Group, been a party to or is or has been concerned in any agreement or arrangement or is conducting or has conducted itself (whether by omission or otherwise) in a manner which:
(i)
infringes any anti-trust legislation in any jurisdiction in which any member of the Sale Group has assets or carries or intends to carry on business or where its activities may have an effect; or
(ii)
is unenforceable or void (whether in whole or in part) or renders any other member of the Sale Group or any Key Employees liable to civil, criminal or administrative proceedings by virtue of any anti-trust legislation or any undertakings given or orders made under such legislation in any jurisdiction in which any member of the Sale Group has assets or carries on business;
(B)
given an undertaking to, or is subject to any order of or investigation by, or has received any request for information from, any court or Authority (including any national competition authority and any sectoral regulator) under any anti-trust legislation in any jurisdiction in which any member of the Sale Group has assets or carries on business; or
(C)
received notice that any enforcement actions by any Authority are in progress or contemplation relating to any breach of any relevant statutory or licence requirements or conditions of the Sale Group.

Part B
Orenburg Warranties
1.
The Company is the sole owner of the Orenburg Shares, the Orenburg Shares have been lawfully acquired and there are no Encumbrances existing or threatening to occur with respect to the Orenburg Shares.
2.
The waivers of all members of Orenburg, other than the Orenburg Sellers (and of Orenburg, as appropriate), from their pre-emptive rights to purchase the Orenburg Shares or part thereof in connection with the Orenburg Acquisition were duly obtained and were not revoked before the Orenburg Completion Date.
3.
Orenburg is the sole owner of 100% (one hundred per cent.) of the shares in the Orenburg Subsidiary (hereinafter, the “Orenburg Subsidiary Shares”), the Orenburg Subsidiary Shares have been lawfully acquired and there are no Encumbrances existing or threatening to occur with respect to the Orenburg Subsidiary Shares and there are no agreements, understandings or commitments creating such Encumbrances.
4.
As at the Orenburg Completion Date, the Orenburg Sellers had full right and authority to sell the Orenburg Shares.
5.
Orenburg and the Orenburg Subsidiary are duly incorporated and existing and there are no grounds for winding up or dissolution of Orenburg or the Orenburg Subsidiary.
6.
All applicable tax obligations of Orenburg and the Orenburg Subsidiary have been duly satisfied by Orenburg or the Orenburg Subsidiary, in due time, to the extent required by applicable law and in all jurisdictions.
7.
All accounting books, records and other statements of Orenburg and the Orenburg Subsidiary are up-to-date and are kept in accordance with applicable law in all material respects.
8.
The financial statements and tax returns of Orenburg and the Orenburg Subsidiary are kept and filed in accordance with applicable law in all material respects.
9.
There are no current guarantees, warranties, or indemnities other than indemnities made under drilling contracts in the normal course of business, or security obligations made by Orenburg or the Orenburg Subsidiary with respect to the obligations of any person, other than Orenburg, the amount of which in each case (separately or jointly under several interrelated obligations) exceeds RUB 15,000,000.
10.
There are no actual obligations of Orenburg or the Orenburg Subsidiary that have occurred in the normal course of business the amount of which, in each case, exceeds RUB 15,000,000  (separately or jointly under several interrelated obligations) and there are no other actual obligations of Orenburg or the Orenburg Subsidiary the amount of which, in each case, exceeds RUB 15,000,000  (separately or jointly under several interrelated obligations) other than those disclosed.
11.
Orenburg and the Orenburg Subsidiary have no accounts payable the amount of which, in each case, exceeds RUB 15,000,000  (separately or jointly under several interrelated obligations) other than those disclosed.
12.
Orenburg’s and the Orenburg Subsidiary’s assets constitute all assets necessary to efficiently operate the business of Orenburg and the Orenburg Subsidiary in all material respects.
13.
Each agreement with respect to a transaction the value of which exceeds RUB 25,000,000, to which any of Orenburg or the Orenburg Subsidiary is a party, is valid and enforceable and is complied with by Orenburg or the Orenburg Subsidiary and, to the best of Rosneft’s knowledge, by its counterparty in all material respects.
14.
There are no agreements entered into by Orenburg or the Orenburg Subsidiary with any member of the Retained Group, other than as disclosed.
15.
There are no current proceedings with respect to Orenburg or the Orenburg Subsidiary the amount of which exceeds RUB 15,000,000  and there are no written notices of pending proceedings with respect to Orenburg or the Orenburg Subsidiary the amount of which exceeds RUB 15,000,000  other than those disclosed.
16.
Orenburg and the Orenburg Subsidiary are solvent and do not qualify for insolvency as defined by Russian law.
17.
All immovable property and Material Orenburg Movable Property is owned by Orenburg or the Orenburg Subsidiary (as applicable) under full unencumbered ownership title or lease (and there are no agreements, understandings or commitments creating such Encumbrances) other than disclosed and/or otherwise lawfully operated and is suitable for use for its intended purposes and is in good repair and technical condition subject to normal depreciation.
18.
The total amount payable by Orenburg and the Orenburg Subsidiary under all agreements entered into with any employees or other natural persons does not exceed RUB 15,000,000  for any period of 12 months (other than salaries payable to such employees in the normal course of business).
19.
Each of Orenburg and the Orenburg Subsidiary has all licenses and other permits required to carry out its business in all material respects.
20.
Orenburg and the Orenburg Subsidiary have complied and continue to comply with environment protection laws in all material respects and Orenburg and the Orenburg Subsidiary have no environmental obligations such as fines and penalties assessed by environmental authorities in the course of inspections or outstanding orders of inspecting environmental authorities.
21.
Orenburg and the Orenburg Subsidiary have made no guarantees or indemnities other than indemnities made under drilling contracts in the normal course of business, warranties or other securities with respect to the obligations of their subsidiaries or third parties, under which outstanding indebtedness exists.
22.
The value of Orenburg’s assets comprising immovable property located in the Russian Federation constitutes no more than 50% (fifty per cent.) of the Orenburg asset value.
23.
Orenburg and the Orenburg Subsidiary have not disposed of or Encumbered any property after 1 January 2014 (other than any property disposable in the normal course of business).
24.
Lease Agreements No. ДА-212/32-14/250 and No. ДА-212/33-14/251 entered into by Orenburg with respect to drilling rigs, the lease agreements with respect to which (No. ДЛ212/01-12 and No. ДЛ212/02-12) were terminated in 2014, have been made on the terms and conditions not less favourable than the terms and conditions of other lease agreements entered into by Orenburg and the Orenburg Subsidiary effective as at 1 January 2014.
25.
Orenburg Seller 1 obtained conditional consent of the FAS No. ЦА/12008/14 dated March 31, 2014 to effect the Orenburg Acquisition.