ASSIGNMENT OF STATE PARTICIPATING
INTEREST IN THE PRODUCTION SHARING CONTRACT FOR
BLOCK F, OFFSHORE REPUBLIC OF EQUATORIAL GUINEA
This Assignment of State Participating Interest in the Production Sharing
Contract for Block F, Offshore Republic of Equatorial Guinea (this "Assignment")
that sets the terms and conditions for the participation of the STATE in Block F
offshore the Republic of Equatorial Guinea (the "STATE") is entered into as of
the 1st day of January, 2000, between Triton Equatorial Guinea, Inc., a Cayman
Islands company ("Triton"), and Energy Africa Equatorial Guinea Limited, an Isle
of Man company ("Energy Africa"), and the STATE represented by the Ministry of
Mines and Energy. Triton and Energy Africa are hereinafter collectively
referred to as the "CONTRACTOR" and the CONTRACTOR and the STATE are sometimes,
depending on the context hereinafter individually referred to as a "Party" and
collectively as the "Parties."
WHEREAS, Triton and the State signed a Production Sharing Contract covering
Block F, offshore Republic of Equatorial Guinea, on March 26, 1997, effective as
of April 14, 1997 (as amended, the "Contract");
WHEREAS, with the approval of the STATE, Triton assigned a fifteen percent (15%)
interest in its rights and obligations in the Contract to Energy Africa as of
June 1, 1999, so that currently Triton holds an eighty-five percent (85%)
interest and Energy Africa holds a fifteen percent (15%) interest in the
Contract;
WHEREAS, at the request of the STATE, the Parties agreed to modify the Contract
effective January 1, 2000 by that certain First Amendment to the Production
Sharing Contract for Block F, offshore Republic of Equatorial Guinea (the "First
Amendment") for the purposes of aligning certain terms thereof as reflected in a
Memorandum of Understanding between the Parties dated December 7, 1999;
WHEREAS, as a consequence of the renegotiation the CONTRACTOR agreed to transfer
to the STATE a five percent (5%) interest during the phases of Development and
Production in each Field discovered and developed, or that may be discovered
and/or developed under the Contract together with all rights and interests
related thereto, provided however, the STATE shall not be required to contribute
cash to fund such costs; and
WHEREAS, the STATE accepts such interest and agrees to become a party to the
existing Joint Operating Agreement for each Field Development and Production
between the entities then comprising the CONTRACTOR (the "Field JOA") on the
terms set forth herein, each Party having in their possession a copy of the
Field JOA.
NOW THEREFORE, in consideration of the terms and conditions set forth herein,
the Parties hereby agree as follows:
ARTICLE 1
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ASSIGNMENT OF INTEREST
1.1 "Participating Interest" means a percentage interest in the rights,
privileges, duties and obligations of the CONTRACTOR under the Contract as
amended from time to time.
1.2 Subject to the terms and conditions set forth in this Assignment:
(a) CONTRACTOR hereby assigns, transfers and conveys to STATE a five percent
(5%) Participating Interest in each Field discovered and/or to be discovered in
the Contract Area, and in the Field JOA corresponding to such Field, these
assignments to become effective upon the approval of the initial development and
production plan for each area of development of such Field; and
(b) The STATE accepts from CONTRACTOR the assignment, transfer and
conveyance of such five percent (5%) Participating Interest in each such Field
and interest in such Field JOA corresponding to this interest. Such acceptance
shall constitute consent by the STATE to the transfer as required by Section
6.1(f) of the Contract.
1.3 The assignment, transfer and conveyance referred to herein shall be free
of all liens, claims, mortgages and encumbrances except those arising out of the
Contract, this Assignment or the Field JOA and subject to Article 4 below, shall
include five percent (5%) of CONTRACTOR's interests in data, materials,
equipment and other assets acquired in connection with all Development and
Production Operations for each Field.
1.4 The assignment, transfer and conveyance referred to herein also shall be
made on a pro rata basis from each entity then comprising CONTRACTOR equal to
its Participating Interest unless otherwise mutually agreed by such entities.
1.5 As of the effective date of each assignment of an interest in a Field,
the Participating Interests of the entities comprising the CONTRACTOR in such
Field shall be:
STATE 5.00%
Triton 80.75%
Energy Africa 14.25%
Triton and Energy Africa, and their respective successors and assigns (if any),
and the STATE shall constitute the "CONTRACTOR" with respect to such Field, in
the sense ascribed to this term in the Contract and shall be bound by all the
covenants contained in the Contract which are binding on the CONTRACTOR
according to their respective Participating Interests, with the exception of the
provisions set forth in Articles 2, 4 and 5 below. If Triton or Energy Africa
transfers, from time to time, all or part of its Participating Interest as
permitted by the Contract and this Assignment after the Amendment Date, but
prior to the assignment to the STATE of the five percent (5%) Participating
Interest in a Field under this Assignment, then the Participating Interest of
Triton and Energy Africa shown above shall be revised accordingly.
ARTICLE 2
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CARRIED PARTICIPATING INTEREST OF THE STATE
2.1 All Petroleum Operations Expenditures, as defined in the Contract shall
continue to be borne and paid by the entities, other than the STATE,
constituting part of the CONTRACTOR in the same ratio as their respective
Participating Interests prior to the assignment referred to in Article 1 above
(e.g., 85% by Triton and 15% by Energy Africa or as to their successor and
assigns). The STATE shall not be required to contribute cash to fund Petroleum
Operations Expenditures.
2.2 The STATE hereby assigns, transfers and conveys to the entities
comprising part of the CONTRACTOR (i.e., Triton and Energy Africa, and their
respective successors and assigns), other than the STATE, in proportion to their
Participating Interests in the Field at the time of the assignment under Article
1 of this Assignment all rights to the recovery of recoverable Petroleum
Operations Expenditures under the Contract and Field JOA in respect of the
STATE's five percent (5%) Participating Interest acquired under Article 1 of
this Assignment.
ARTICLE 3
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JOINT OPERATING AGREEMENT FOR FIELD DEVELOPMENT AND PRODUCTION
3.1 The STATE hereby ratifies and confirms its participation in the Field
JOA with respect to each Field in which it acquires an interest. The Field JOA
shall apply severally, sequentially and automatically to every Field under
development or developed under the Contract.
3.2 Triton and Energy Africa agree amongst themselves as the entities
comprising the CONTRACTOR to conduct operations in each Field pursuant to the
Contract, this Assignment and the Field JOA. The Parties acknowledge that
Triton has been designated as Operator under the Field JOA and such designation
shall not be affected by this Assignment.
3.3 The STATE's participation as a party comprising part of the CONTRACTOR
under the Field JOA with respect to each Field shall be effective as of the
effective date of the assignment of an interest in such Field pursuant to
Article 1 of this Assignment and the STATE as a member of the CONTRACTOR
ratifies and confirms on such effective date the conduct of the operations in
each area of development of a Field pursuant to the Contract.
ARTICLE 4
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TITLE TO EQUIPMENT
Notwithstanding anything contained in Section XI of the Contract and Article 1.3
above, the STATE shall have no rights, titles or interests in any unamortized
equipment of the CONTRACTOR referred to in Section 11.2 of the Contract.
However, any equipment and fixed installations amortized before the expiration
of the Contract shall be treated pursuant to Section 11.1.
ARTICLE 5
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ASSIGNABILITY
5.1 Notwithstanding Section 6.1(e) of the Contract, in the case of the STATE
as the assigning party of the five percent (5%) Participating Interest it
acquired under Article 1 of this Assignment, the right to sell, assign,
transfer, convey or otherwise dispose of any part or all of such Participating
Interest in any Field in the Contract Area, from time to time, is limited solely
to a sale, assignment, transfer, conveyance or disposition to the national oil
company or other wholly-owned STATE entity responsible (among other things) for
the development and production of Hydrocarbon deposits in the Contract Area,
with no other right of assignment except to assignees that meet the requirements
stated in this Article 5.1.
5.2 Notwithstanding Section 6.1(f) of the Contract, the Parties agree that
the STATE shall have no right to sell, assign, transfer, convey or otherwise
dispose of any interest either in the Contract, this Assignment, any Field in
the Contract Area or Field JOA except as provided in Article 5.1 above.
ARTICLE 6
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MISCELLANEOUS
6.1 Each of the Parties shall do all such acts and obtain and execute all
such documents as shall be reasonably required in order to fully perform and
carry out this Assignment.
6.2 This Assignment constitutes the entire agreement among the Parties and
may not be amended or modified except in writing signed by all of the Parties.
In the event of any conflict between the provisions of this Assignment and the
Field JOA with respect to the subject matter covered in this Assignment, the
provisions of this Assignment shall prevail. The terms and phrases contained in
the Contract and used herein shall have the same meaning as in the Contract as
amended unless the context herein otherwise provides.
6.3 This Assignment shall inure to the benefit of and be binding upon the
successors and assigns of the Parties.
6.4 Upon signature by the Parties hereto, this Assignment shall have effect for
all purposes from 1st January 2000.
6.5 This Assignment is written signed in six (6) copies, three (3) in
Spanish and three (3) in English, which shall constitute one original document.
In the event of a conflict between the English and Spanish texts, the Spanish
text shall prevail. The Parties recognize, however, that the Field JOA attached
as Annex A hereto, is written solely in the English language.
6.6 In the event of a dispute arising out of or related to the
interpretation or meaning of this Assignment (excluding the Field JOA attached
hereto as Annex A), the Consultation and Arbitration provisions of Section XIII
of the Contract shall apply.
IN WITNESS WHEREOF, the Parties hereto have executed this Assignment as of the
day and year first above written.
TRITON EQUATORIAL GUINEA, INC.
____________________________________
Name: ______________________________
Title: ______________________________
Date: ______________________________
ENERGY AFRICA EQUATORIAL GUINEA LIMITED
____________________________________
Name: ______________________________
Title: ______________________________
Date: ______________________________
FOR THE REPUBLIC OF EQUATORIAL GUINEA
THE MINISTRY OF MINES AND ENERGY OF
THE REPUBLIC OF EQUATORIAL GUINEA
____________________________________
Name: ______________________________
Title: ______________________________
Date: ______________________________
ANNEX A
ATTACHED TO AND MADE PART OF THE ASSIGNMENT
OF STATE PARTICIPATING INTEREST IN THE PRODUCTION SHARING CONTRACT
FOR BLOCK F, OFFSHORE REPUBLIC OF EQUATORIAL GUINEA, BY AND BETWEEN
TRITON EQUATORIAL GUINEA, INC., ENERGY AFRICA EQUATORIAL GUINEA LIMITED
AND THE REPUBLIC OF EQUATORIAL GUINEA, DATED AS OF JANUARY 1, 2000
JOINT OPERATING AGREEMENT
FOR FIELD DEVELOPMENT AND PRODUCTION
BLOCK F
OFFSHORE EQUATORIAL GUINEA
JOINT OPERATING AGREEMENT
FOR FIELD DEVELOPMENT AND PRODUCTION
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS
ARTICLE 2 - TERM
2.1 Effective Date and Severability
2.2 Survival
2.3 Stand Alone Option
ARTICLE 3 - SCOPE
3.1 Scope
3.2 Participating Interest
3.3 Ownership, Obligations, and Liabilities
3.4 Accounting Procedure
ARTICLE 4 - OPERATOR
4.1 Designation of Operator
4.2 Rights and Duties of Operator
4.3 Employees of Operator
4.4 Information Supplied by Operator
4.5 Settlement of Claims and Lawsuits
4.6 Limitation on Liability of Operator
4.7 Insurance Obtained by Operator
4.8 Commingling of Funds
4.9 Resignation of Operator
4.10 Removal of Operator
4.11 Appointment of Successor
ARTICLE 5 - OPERATING COMMITTEE
5.1 Establishment of Operating Committee
5.2 Powers and Duties of Operating Committee
5.3 Authority to Vote
5.4 Subcommittees and Project Teams
5.5 Notice of Meeting
5.6 Contents of Meeting Notice
5.7 Location and Frequency of Meetings
5.8 Operator's Duties for Meetings
5.9 Voting Procedure
5.10 Record of Votes
5.11 Minutes
5.12 Voting by Notice
5.13 Effect of Vote
ARTICLE 6 - WORK PROGRAMS AND BUDGETS
6.1 Work Program and Budgets
6.2 Discovery and Evaluation
6.3 Development and Production
6.4 Itemization of Expenditures
6.5 Contract Awards
6.6 Authorization for Expenditure Procedure
6.7 Overexpenditures of Work Programs and Budgets
ARTICLE 7 - DEFAULT
7.1 Default and Notice
7.2 Operating Committee Meetings and Data
7.3 Allocation of Defaulted Accounts
7.4 Remedies
7.5 Survival
7.6 No Right of Set Off
ARTICLE 8 - DISPOSITION OF PRODUCTION
8.1 Right and Obligation to Take in Kind
8.2 Offtake Agreement for Crude Oil
8.3 Separate Agreement for Natural Gas
ARTICLE 9 - ABANDONMENT AND DECOMMISSIONING
9.1 Joint Operations Abandonment and Decommissioning
ARTICLE 10 - SURRENDER, EXTENSIONS AND RENEWALS
10.1 Surrender
10.2 Extension of the Term
ARTICLE 11 - TRANSFER OF INTEREST OR RIGHTS
11.1 Obligations
11.2 Consent
11.3 Rights
ARTICLE 12 - WITHDRAWAL FROM AGREEMENT
12.1 Right of Withdrawal
12.2 Complete Withdrawal
12.3 Rights of a Withdrawing Party
12.4 Obligations and Liabilities of a Withdrawing Party
12.5 Emergency
12.6 Assignment
12.7 Approvals
12.8 Abandonment Security
12.9 Withdrawal or Decommissioning by all Parties
ARTICLE 13 - RELATIONSHIP OF PARTIES AND TAX
13.1 Relationship of Parties
13.2 Tax
13.3 United States Tax Election
ARTICLE 14 - CONFIDENTIAL INFORMATION-PROPRIETARY TECHNOLOGY
14.1 Confidential Information
14.2 Continuing Obligations
14.3 Proprietary Technology
14.4 Trades
ARTICLE 15 - FORCE MAJEURE
15.1 Obligations
15.2 Definition of Force Majeure
ARTICLE 16 - NOTICES
ARTICLE 17 - GOVERNING LAW AND DISPUTE RESOLUTION
17.1 Governing Law
17.2 Dispute Resolution
ARTICLE 18 - GENERAL PROVISIONS
18.1 Conflicts of Interest
18.2 Warranties As To No Payments, Gifts and Loans
18.3 Public Announcements
18.4 Successors and Assigns
18.5 Waiver
18.6 Severance of Invalid Provisions
18.7 Contract Translation
18.8 Construction
18.9 Execution by Facsimile
18.10 Entirety
18.11 Modification
EXHIBIT A - ACCOUNTING PROCEDURE
EXHIBIT B - ENGLISH TRANSLATION OF THE CONTRACT, LETTER, AND AMENDMENT
JOINT OPERATING AGREEMENT
FOR FIELD DEVELOPMENT AND PRODUCTION
THIS JOINT OPERATING AGREEMENT FOR FIELD DEVELOPMENT AND PRODUCTION (this
"Agreement") is effective as of the Effective Date, between the Entities
Constituting Part of Contractor in the Field on the Effective Date, i.e., Triton
Equatorial Guinea, Inc., a Cayman Islands company ("Triton"), and Energy Africa
Equatorial Guinea Limited, an Isle of Man company ("Energy Africa") and/or their
respective successors and assigns, which may include the Republic of Equatorial
Guinea. The entities referred to above may sometimes individually be referred
to as "Party" and collectively as the "Parties." Triton and Energy Africa
and/or their successors and assigns as Contractor in the Field are hereinafter
collectively referred to as the Working Interest Parties. The Working Interest
Parties and the State are sometimes hereinafter individually referred to as a
"Party" and collectively as the "Parties."
RECITALS
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Triton as "CONTRACTOR" therein, has entered into that certain Production
Sharing Contract (the "Original Contract"), as amended from time to time, with
the Republic of Equatorial Guinea, as "the STATE", executed on March 26, 1997,
effective as of April 14, 1997, covering Block F, offshore Republic of
Equatorial Guinea, more particularly described therein.
With the approval of the Government, Triton assigned a fifteen percent
(15%) interest in its rights and obligations in the Contract to Energy Africa as
of June 1, 1999.
The Parties have participated in renegotiation discussions at the request
of the Government, which discussions were held between representatives of the
Parties in London, England, from November 30, 1999, to December 7, 1999, as a
result of which they have agreed to modify the Original Contract for the purpose
of adjusting certain provisions thereof to reflect the new commercial structure
for production sharing contracts adopted by the Government as reflected in a
Memorandum of Understanding dated December 7, 1999 ("MOU").
As part of the renegotiation the Contractor agreed to transfer to the
Government a five percent (5%) interest in each Field discovered and developed
under the Contract together with all rights and interests related thereto
effective upon approval of the initial Development Plan for each such Field.
The Original Contract has been amended, among other things, by the
Amendment to the Production Sharing Contract for Block F, Offshore Republic of
Equatorial Guinea, dated as of January 1, 2000 (the "Amendment").
The Government has agreed pursuant to the Assignment of State Participating
Interest in the Production Sharing Contract for Block F, Offshore Republic of
Equatorial Guinea (the "Assignment") to accept a five percent (5%) interest in
each Field discovered and developed under the Contract together with all rights
and interests related thereto subject to this Agreement effective with each
assignment under the Assignment on the terms agreed to herein by Triton and
Energy Africa.
AGREEMENTS
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In consideration of the mutual agreements and obligations set out below
between the Entities Constituting Part of Contractor on the Effective Date, the
Parties agree as follows:
ARTICLE 1
---------
DEFINITIONS
The following terms shall have the meaning assigned to them below:
Accounting Procedure means the rules, provisions, and conditions set forth and
---------------------
contained in Exhibit A to this Agreement.
AFE means an authorization for expenditure issued pursuant to Section 6.6.
---
Affiliate means, in relation to any Party, any company or legal entity which (i)
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controls, (ii) is controlled by, or (iii) is controlled by an entity which
controls a Party. For the purpose of this definition, control means ownership,
directly or indirectly, of more than fifty percent (50%) of the voting rights in
a company or legal entity or the possession of the power, directly or
indirectly, to direct or cause the direction of the management or policies of a
Party, whether through or by ownership, contract or otherwise.
Agreed Interest Rate means a floating interest rate, compounded monthly, equal
----------------------
to the lesser of (i) the rate per annum published by The Wall Street Journal (or
if not published by The Wall Street Journal, published by the Financial Times of
London) as the one month LIBOR for U.S. dollar deposits on the first Business
Day prior to the due date of payment and thereafter on the first Business Day of
each succeeding calendar month, plus five percentage (5%) points, or (ii) the
maximum rate permitted by the governing law specified in Section 17.1.
Agreement means this Joint Operating Agreement for Field Development and
---------
Production, together with the Exhibits attached hereto, as amended from time to
time in writing by the Parties.
Applicable Law means the Hydrocarbons Law as defined in the Contract and any
---------------
other statute, decree, order, directives, regulation, or rule (of whatever
nature) as such may be validly issued by the Government and in effect from time
to time, including without limitation, those laws, statutes, rules and
regulations with respect to the exploration, development and production of
Hydrocarbons that govern the Contracts or are incorporated by the terms of such
Contracts.
Business Day means a day on which the banks in Dallas, Texas, U.S.A., are open
-------------
for domestic and international business.
Calendar Quarter means a period of three (3) consecutive calendar months
-----------------
beginning, respectively, on January 1, April 1, July 1, and October 1.
Calendar Year means a period of twelve (12) months commencing with January 1 and
-------------
ending on the following December 31.
Carried Costs means costs directly attributable to the Carried Party, which the
--------------
Working Interest Parties are obligated to bear and pay under the Assignment.
Carried Party means the State or other wholly owned Government entity
--------------
exclusively responsible for the development of Hydrocarbon deposits in a Field
in the Contract Area, who receives the assignment of the five percent (5%)
Participating Interest pursuant to Part B of the Assignment.
Cash Call is defined in the Accounting Procedure.
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Commercial Discovery is defined in the Contract.
---------------------
Completion means an operation intended to complete a well as a producer of
----------
Hydrocarbons in one or more Zones, including the setting of production casing,
perforating, stimulating the well, and production Testing conducted in such
operation. Complete and other derivatives shall be construed accordingly.
--------
Contract means the Production Sharing Contract between The Republic of
--------
Equatorial Guinea and Triton Equatorial Guinea, Inc., executed on March 26,
1997, and effective as of April 14, 1997 (the "Original Contract"), covering
Block F, Offshore the Republic of Equatorial Guinea, as amended by the Letter
and by the Amendment to the Production Sharing Contract For Block F, Offshore
Republic of Equatorial Guinea, dated as of January 1, 2000 (the "Amendment"),
the English translation of which is attached hereto as Exhibit B, and any
extension, renewal or amendment thereof agreed to in writing by the Parties from
time to time.
Contractor means Triton, EA and the Government, and their respective successors
----------
and permitted assigns under the Contract and Assignment from time to time.
Contract Area means the "Contract Area" delineated in Annex A of the Contract
--------------
and described in Annex B of the Contract, as amended from time to time.
Contract Period means all or any of the periods of one (1) or two (2) Contract
----------------
Years described in Section 2.2 of the Contract, as may be further amended from
time to time, including the extension of twelve (12) months provided for in the
Letter and ratified by the Government.
Contract Year is defined in the Contract.
--------------
Crude Oilis defined in the Contract.
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Day means a calendar day unless otherwise specifically provided.
---
"Decommissioning" pursuant to the Oil Industry International Exploration &
---------------
Production Forum (E&P Forum Report No. 10.12/232, December 1995), means platform
decommissioning consisting of three (3) distinct activities: decommissioning,
the shutting down and making safe of the facilities and wells, including purging
and clearing systems of Petroleum and other chemicals; removal of all or part of
the facility, based on environmental, economic and safety considerations; and
disposal and/or recycling of the removed parts, in place, onshore, or in an
approved deep water location. Decommission and other derivatives shall be
------------
construed accordingly.
Default Notice is defined in Section.7.1.
---------------
Defaulting Party is defined in Section.7.1.
-----------------
Deepening means an operation whereby a well is drilled to an objective Zone
---------
below the deepest Zone in which the well was previously drilled, or below the
deepest Zone proposed in the original well proposal (in the applicable Work
Program and Budget or pursuant to Article 6), whichever is deeper. Deepen and
other derivatives shall be construed accordingly.
Delivery Point means that point where Hydrocarbons and title thereto passes to
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each Party from the facilities that are operated for the Joint Account in the
Contract Area to the loading flange of the equipment into which such delivery is
being made.
Development Plan means a plan for the development of Hydrocarbons from a Field,
-----------------
which is described in Section 2.6 of the Contract.
Discovery means the discovery of an accumulation of Hydrocarbons whose existence
---------
until that moment was unproven by drilling.
Effective Date means the date this Agreement comes into effect as stated in
---------------
Section 2.1.
----
EIA means, collectively and/or individually, any of the environmental impact
---
assessments prepared in connection with Operator's conduct of Joint Operations
or any permanent preventative and contingency plans required from time to time
under the Applicable Laws, and any amendments and updates thereto.
Entitlement means a quantity of Hydrocarbons to which a Party has the right and
-----------
obligation to take delivery pursuant to the Contract and the terms of this
Agreement, after adjustment for overlifts and underlifts as contemplated in
Section 8.2.
Entity Constituting Part of Contractor means a legal entity which holds a
------------------------------------------
Participating Interest in a Field as part of Contractor as constituted from time
to time.
Equipping means the installation of equipment for production of a Completed
---------
well, including surface production facilities. Equip and other derivatives
---- ------
shall be construed accordingly.
Exploitation Period is the period described in Section 2.7 of the Contract.
--------------------
Field is defined in the Contract.
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Force Majeure is defined in Section 16.2 of this Agreement.
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G & G Data means geological, geophysical, and geochemical data, aerial
-------------
photographic reconnaissance, field reconnaissance, detailed field mapping, core
hole drilling, and other similar information that is not obtained through a well
bore.
Government means the Government of the Republic of Equatorial Guinea or "State"
----------
as defined in the Contract, including any national, provincial, or local
government in the Republic of Equatorial Guinea and any court, agency,
corporation, or instrumentality thereof.
Gross Negligence means any act or failure to act (whether sole, joint or
-----------------
concurrent) by any person or entity which was intended to cause, or which was in
reckless disregard of or wanton indifference to, harmful consequences such
person or entity knew, or should have known, such failure would have on the
safety or property of another person or entity.
Hydrocarbons means all substances including liquid and gaseous hydrocarbons
------------
which are subject to and covered by the Contract.
Hydrocarbons Law is defined in the Contract.
-----------------
Indemnitees is defined in Section 4.6(B).
-----------
Joint Accounts means the accounts maintained for Joint Operations by Operator in
--------------
accordance with the provisions of this Agreement and the Accounting Procedure.
Joint Operations means those operations and activities under the Contract
-----------------
carried out by Operator pursuant to this Agreement, the costs of which are
chargeable to all Parties.
Joint Property means all wells, facilities, equipment, materials, information,
---------------
funds and the property held for use in Joint Operations.
Letter means collectively, those certain letters dated September 29, 1998,
------
regarding exploration programme for Blocks F and G and Work Program and Budget
for 1998 for Blocks F and G, attached hereto as Exhibit B.
Maximum Efficient Rate ("MER") is defined in the Contract.
---------------------------------
Minimum Work Obligation means those work and/or expenditure obligations
-------------------------
specified in the Contract which must be performed during the then current
Contract phase or period in order to satisfy the obligations of the Contract.
Natural Gas is defined in the Contract.
------------
Net Crude Oil means that portion of the total production of Hydrocarbons
---------------
remaining after payment of Royalty and recovery of Petroleum Operations
Expenditures, which is allocated to the Parties under the terms of Section VII
of the Contract.
Non-Operator(s) means the Party or Parties to this Agreement other than
---------------
Operator.
Operating Committee means the committee constituted in accordance with Section
--------------------
5.1.
Operator means a Party to this Agreement designated as such in accordance with
--------
this Agreement.
Participating Interest means the undivided percentage interest of each Party in
-----------------------
the rights and obligations derived from the Contract and this Agreement.
Party means any of the entities named in the first paragraph to this Agreement
-----
and any respective successors or assigns in accordance with the provisions of
this Agreement.
Petroleum Operations Expenditures means costs and expenses incurred by the
-----------------------------------
Parties and allowed to be recovered pursuant to the Contract.
Plugging Back means a single operation whereby a deeper Zone is abandoned in
--------------
order to attempt a Completion in a shallower Zone. Plug Back and other
----------
derivatives shall be construed accordingly.
Production Bonus means a bonus payable by the Parties under Section 9.3 of the
-----------------
Contract.
Recompletion means an operation whereby a Completion in one Zone is abandoned in
------------
order to attempt a Completion in a different Zone within the existing wellbore.
Recomplete and other derivatives shall be construed accordingly.
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Retained Areas means those portions of the Contract Area retained by Contractor
---------------
as part of the Field during the Exploitation Period in accordance with the
Contract and the Applicable Law.
Reworking means an operation conducted in the wellbore of a well after it is
---------
Completed to secure, restore, or improve production in a Zone that is currently
open to production in the wellbore. Such operations include well stimulation
operations, but exclude any routine repair or maintenance work, or drilling,
Sidetracking, Deepening, Completing, Recompleting, or Plugging Back of a well.
Rework and other derivatives shall be construed accordingly.
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Royalty as defined in the Contract.
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Security is defined in Section 12.8.
--------
Senior Supervisory Personnel means with respect to a Party, any individual who
------------------------------
functions as such Party's designated manager or supervisor responsible for or in
charge of onsite Joint Operations, including drilling, construction and
production and any individual who functions for such Party or one of its
Affiliates at a management level equivalent or superior to such manager, or any
officer or director of such Party or one of its Affiliates.
Sidetracking means the directional control and intentional deviation of a well
------------
from the vertical so as to change the bottom-hole location, unless done to
straighten the hole or to drill around junk in the hole or to overcome other
mechanical difficulties. Sidetrack and other derivatives shall be construed
---------
accordingly.
Special Damages means any costs, expense, or liability for environmental,
----------------
consequential, punitive, special, or indirect damages or losses, including those
arising from business interruption, loss of profits, reservoir or formation
damage, inability to produce Hydrocarbons, pollution control, or environmental
amelioration or reclamation.
State means the Republic of Equatorial Guinea.
----------------------------------------------------
Testing means a well bore operation intended to flow formation fluids to the
-------
surface in order to evaluate the capacity of a Zone to produce Hydrocarbons.
Test and other derivatives shall be construed accordingly.
----
U.S. Party is defined in Section 13.3(C).
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Working Interest Parties means the Parties to this Agreement other than the
--------------------------
Carried Party.
Work Program and Budget means a work program for Joint Operations and budget
--------------------------
therefore as described and approved in accordance with Article 6.
Zone means a geological structure or stratigraphic trap capable of producing
----
Hydrocarbons that may contain one or more separate and distinct lithologic
members trapped by (i) impermeable rock or water barriers and characterized by a
single natural pressure system, or (ii) lithological or structural barriers that
prevent pressure communication.
ARTICLE 2
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TERM
2.1 Effective Date and Severability. This Agreement shall apply severally,
---------------------------------
sequentially and automatically to every Field developed under the Contract. The
"Effective Date" is, for each Field, the approval date of Development Plan for
such Field under the terms of the Contract. It shall continue in effect until
the Contract terminates, and all materials, equipment, and personal property
used in connection with the Operations have been removed and disposed of, and
final settlement has been made among the Parties. The State shall become a
Party to this Agreement for a Field in which it receives a Participating
Interest under the Contract and the Assignment.
2.2 Survival. The Articles and Section of this Agreement referred to in (A)
---------
and (B) below shall survive termination and remain in effect until:
(A) all wells have been properly abandoned and all installations and
facilities Decommissioned in accordance with Article 9 or transferred with all
such obligations to the State under the Contract; and
(B) all obligations, claims, arbitrations, and lawsuits have been
settled or otherwise disposed of in accordance with Section 4.5 and Article 17.
2.3 Stand Alone Option. The Parties recognize that the form of this
--------------------
Agreement, which is an Annex to the Assignment, will be construed and
implemented on a Field by Field basis effective January 1, 2000. The form of
this Agreement, however, may not be satisfactory to one or more of the Parties,
from time to time, particularly for the purpose of raising finance from external
sources to fund Joint Operations for one or more Fields. Should any Party, at
any time, request to the other Parties that this Agreement, as it applies to a
particular Field, be severed from the Contract and recast as a stand alone
agreement, then, in such event, the other Parties shall promptly cooperate with
the requesting Party in achieving the stated purpose and this Agreement shall be
modified as to form, but not as to substance, to show the names of the Parties,
the allocation of the Participating Interest and the Carried Costs by name of
Parties and everything that is necessary and proper to recast the arrangements
herein in the form of a stand alone agreement, including signature lines,
signatures and date of execution.
ARTICLE 3
---------
SCOPE
3.1 Scope.
------
(A) The purpose of this Agreement is to establish the respective rights and
obligations of the Parties with regard to Field operations under the Contract,
including the joint exploration, evaluation, development and production of
Hydrocarbon reserves from the Field.
(B) Without limiting the generality of Section 3.1(A), the following
activities are outside of the scope of this Agreement and are not addressed
herein:
(1) Construction, operation, maintenance, repair and removal of
facilities downstream from the Delivery Point of the Parties' shares of
Hydrocarbons under the offtake agreement provided for in Section 8.2;
(2) Transportation of Hydrocarbons beyond the Delivery Point of the
Parties' shares of Crude Oil under the offtake agreement provided for in Section
8.2 and the transportation of Natural Gas as provided for in Section 8.3;
(3) Marketing and sales of Hydrocarbons, except as expressly provided
in Sections 7.4 and in Article 8;
(4) Acquisition of rights to explore for, evaluate, develop or produce
Hydrocarbons outside of the applicable Field in the Contract Area (other than
as a consequence of unitization with an adjoining field under the terms of the
Contract); and
(5) Exploration, evaluation, development or production of minerals
other than Hydrocarbons, whether inside or outside of the Contract Area.
3.2 Participating Interest.
------------------------
(A) The Participating Interests of the Parties in a Field as of January
1, 2000 upon assignment to the State in accordance with the provisions of the
Assignment are:
State 5.00%
Triton 80.75%
EA 14.25%
If a Party transfers, from time to time, all or part of its Participating
Interest as permitted in the Assignment and Contract after January 1, 2000, but
prior to the Effective Date of this Agreement for a Field, the Participating
Interests of the Parties shown above shall be revised accordingly.
(B) The Carried Costs will be borne as of the Effective Date by the Working
Interest Parties and/or their respective successor and assigns after January 1,
2000 as follows:
Triton 4.25%
EA 0.75%
If a Working Interest Party transfers, from time to time, all or part of its
Participating Interest after January 1, 2000, but prior to the Effective Date of
this Agreement for a Field, the Carried Costs to be borne by the Working
Interest Parties shown above shall be revised accordingly.
(C) If a Party transfers all or part of its Participating Interest pursuant
to the provisions of this Agreement and as permitted in the Assignment and
Contract, the Participating Interests and the Carried Cost share, if applicable,
of the Parties shall be revised accordingly. In the event that the Parties
and/or Participating Interest of the Parties in a Field differs from other
Fields in the Contract Area, then the Parties agree that a separate and distinct
Field JOA shall apply with regard to such Field with differing ownerships for
all purposes, provided however that the cross default provision of Section 7.7
shall apply to all operating agreements to which the Defaulting Party is a
party.
3.3 Ownership, Obligations, and Liabilities. Unless otherwise provided in
------------------------------------------
this Agreement:
(A) Except as otherwise provided in the Assignment with respect to a
Field, all the rights and interests in and under the Contract, all Joint
Property, and any Hydrocarbons produced from the Field and attributable to the
Contractor pursuant to the Contract shall be owned by the Parties in accordance
with their respective Participating Interests;
(B) The obligations of the Parties under the Contract, and all
liabilities and expenses incurred by Operator in connection with Joint
Operations, shall be charged to the Joint Account and all credits to the Joint
Account shall be shared by the Parties, as among themselves, in accordance with
their respective Participating Interests; and
(C) Each Working Interest Party shall bear and pay when due, in
accordance with the Accounting Procedure, its Participating Interest share of
Joint Account and Carried Party's expenses incurred pursuant to this Agreement,
including Cash Calls, billings and accrued interest. The Parties agree that
time is of the essence for payment owing under this Agreement. A Working
Interest Party's payment of any charge under this Agreement shall be without
prejudice to its right to later contest the charge.
3.4 Accounting Procedure. The Accounting Procedure shall govern the accrual
----------------------
and satisfaction of the respective obligations, liabilities, and credits among
the Parties.
ARTICLE 4
---------
OPERATOR
4.1 Designation of Operator. Triton is designated as Operator, and agrees
--------------------------
to act in accordance with the terms and conditions of the Contract and this
Agreement, which terms and conditions shall also apply to any successor
Operator.
4.2 Rights and Duties of Operator.
----------------------------------
(A) Subject to the terms and conditions of this Agreement, Operator
shall have all of the rights, functions, and duties of Contractor related to the
conduct of operations under the Contract, and shall have exclusive charge of and
shall conduct all Joint Operations. Operator may employ independent contractors
or agents (which may include Affiliates of Joint Operator) for such Operations.
(B) Operator shall and is authorized to:
(1) Perform Joint Operations in accordance with the provisions of the
Contract, this Agreement, the approved Work Program and Budget and the
instructions of the Operating Committee not in conflict with this Agreement;
(2) Conduct all Joint Operations in a diligent, safe, and efficient
manner in accordance with good and prudent oilfield practices and conservation
principles generally followed by the international petroleum industry under
similar circumstances;
(3) Subject to Section 4.6 and the Accounting Procedure, neither gain a
profit nor suffer a loss as a result of being the Operator in its conduct of
Joint Operations, provided that Operator may rely upon Operating Committee
approval of specific accounting practices not in conflict with the Accounting
Procedure;
(4) Perform the duties for the Operating Committee set out in Section
5.8, and prepare and submit to the Operating Committee the proposed Work Program
and Budgets and AFEs as provided in Article 6;
(5) Acquire all permits, consents, approvals, surface, or other rights
that may be required for or in connection with the conduct of Joint Operations;
(6) Upon receipt of reasonable advance notice, permit the
representatives of any of the Parties to have reasonable access to the Joint
Operations (at all reasonable times, upon reasonable advance notice, and at
such Parties' own risk and expense) with the right to observe all such Joint
Operations and to inspect all Joint Property associated therewith and to
conduct financial audits as provided in the Accounting Procedure;
(7) Use its reasonable efforts to maintain the Contract in full force
and effect with respect to the Field;
(8) Pay and discharge all liabilities and expenses incurred in
connection with Joint Operations and use its reasonable efforts to keep and
maintain the Joint Property free from all liens, charges, and encumbrances
arising out of Joint Operations;
(9) Pay to the Government for the Joint Accounts, within the periods
and in the manner prescribed by the Contract and all Applicable Laws, all taxes,
fees and other payments pertaining to Joint Operations, but excluding any taxes
measured by the income, equity, or net assets of a Party, or any other taxes,
penalties, fees or assessments which are the individual responsibility of a
Party;
(10) Carry out the obligations of Contractor under the Contract with
respect to the Field, including the preparation and furnishing of reports,
records, and information as may be required pursuant to the Contract;
and
(11) Take all necessary and proper measures for the protection of
life, health. safety, the environment and property in the case of an
emergency and notify the Parties immediately of the details of such
emergency and measures.
(C) Operator shall have the exclusive right and obligation to represent the
Parties, in accordance with the directives of the Operating Committee, in all
dealings with the Government with respect to matters arising under the Contract
and Joint Operations. Operator shall notify the other Parties as soon as
possible in advance of such meetings. Non-Operators shall have the right to
attend such meetings but only in the capacity of observers. Nothing contained
in this Agreement shall restrict any Party from holding discussions with the
Government with respect to any issue peculiar to its particular business
interests arising under the Contract or this Agreement, but in such event such
Party shall promptly advise the other Parties, if possible, before and in any
event promptly after such discussions; provided that such Party shall not be
required to divulge to the other Parties any matters discussed to the extent the
same involve proprietary information on matters not affecting the other Parties.
4.3 Employees of Operator. Subject to the Contract and this Agreement,
------------------------
Operator shall determine the number of employees, the selection of such
employees, the hours of work, and the compensation to be paid all such employees
in connection with Joint Operations. Operator shall employ only such employees,
agents, and contractors as are reasonably necessary to conduct Joint Operations
in accordance with good and prudent international petroleum industry practices.
4.4 Information Supplied by Operator.
------------------------------------
(A) Operator shall provide Non-Operators the following data and reports
as they are currently produced or compiled from Joint Operations for the Field:
(1) A copy of all logs or surveys;
(2) Daily drilling progress reports;
(3) A copy of all Tests and core analysis reports;
(4) A copy of the plugging reports;
(5) Engineering studies, development schedules, and annual progress reports on
development projects;
(6) Field and well performance reports, including reservoir studies, and
reserve estimates;
(7) Copies of all reports relating to Joint Operations furnished by Operator
to the Government;
(8) A copy of the final G & G Data prepared by Operator or contractors,
except magnetic tapes, which shall be stored by Operator and made available on
request for inspection or copying, at the sole expense of the requesting
Non-Operator;
(9) Other reports as frequently as is justified by the activities or as
instructed by the Operating Committee; and
(10) Subject to Section 14.3, such additional information requested by a
Non-Operator, provided that the requesting Non-Operator pays the costs of
preparation of such information and that the preparation of such information
does not unduly burden Operator's administrative and technical personnel.
(B) Operator shall give Non-Operators access at all reasonable times to
all other data acquired in the conduct of Joint Operations. Any Non-Operator
may make copies of such other data at its sole expense.
4.5 Settlement of Claims and Lawsuits.
--------------------------------------
(A) Operator shall promptly notify the Parties of all material claims
or suits that arise out of Joint Operations or relate in any way to Joint
Operations. Operator shall represent the Parties and defend or oppose the claim
or suit. Operator may in its sole discretion compromise or settle any such
claim or suit or any related series of claims or suits for an amount not to
exceed the equivalent of U.S. Dollars One Hundred Thousand (US $100,000.00)
exclusive of legal fees. Operator shall obtain the approval and direction of
the Operating Committee prior to compromising or settling any claim or suite for
an amount in excess of the above stated amount. Each Non-Operator shall have the
right to be represented by its own counsel at its own expense in the settlement,
compromise, or defense of such claims or suits.
(B) Any Non-Operator shall promptly notify the other Parties of any
claim made against such Non-Operator by a third party relating to or which may
affect Joint Operations or other Parties. Such Non-Operator shall defend or
settle any claim affecting Joint Operations in accordance with any directions
given by the Operating Committee. All costs, expenses, and damages as are
payable with respect to such defense or settlement shall be for the Joint
Account.
(C) Notwithstanding Section 4.5(A) and Section 4.5(B), each Party shall have
the right to participate in any such prosecution, defense, or settlement
conducted in accordance with Section 4.5(A) and Section 4.5(B) at its sole cost
and expense; provided always that a Party may not unilaterally settle its
Participating Interest or Carried Cost share of any claim without agreement of
the Operating Committee such settlement will not prejudice the interest of any
other Party or the conduct of Joint Operations.
4.6 Limitation on Liability of Operator.
----------------------------------------
(A) Except as set out in this Section 4.6, NEITHER THE PARTY DESIGNATED
AS OPERATOR NOR ANY OTHER INDEMNITEE (AS DEFINED BELOW) SHALL BEAR (EXCEPT AS A
PARTY TO THE EXTENT OF ITS PARTICIPATING INTEREST) ANY DAMAGE, LOSS, COST,
EXPENSE, OR LIABILITY RESULTING FROM PERFORMING (OR FAILING TO PERFORM) THE
DUTIES AND FUNCTIONS OF THE OPERATOR, AND THE INDEMNITEES ARE HEREBY RELEASED
FROM LIABILITY TO NON-OPERATORS FOR ANY AND ALL DAMAGES, LOSSES, COSTS, EXPENSES
AND LIABILITIES ARISING OUT OF, INCIDENT TO OR RESULTING FROM SUCH PERFORMANCE
OR FAILURE TO PERFORM, EVEN THOUGH CAUSED IN WHOLE OR IN PART BY A PRE-EXISTING
DEFECT, THE NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT), GROSS NEGLIGENCE,
STRICT LIABILITY, OR OTHER LEGAL FAULT OF OPERATOR (OR ANY SUCH INDEMNITEE).
(B) Except as set out in this Section 4.6, THE PARTIES SHALL IN
PROPORTION TO THEIR PARTICIPATING INTERESTS DEFEND AND INDEMNIFY OPERATOR AND
ITS AFFILIATES, AND THEIR RESPECTIVE SHAREHOLDERS, DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS AND CONSULTANTS (COLLECTIVELY THE "INDEMNITEES"), FROM ANY AND
ALL DAMAGES, LOSSES, COSTS, EXPENSES (INCLUDING REASONABLE LEGAL COSTS, EXPENSES
AND ATTORNEYS' FEES) AND LIABILITIES INCIDENT TO CLAIMS, DEMANDS, OR CAUSES OF
ACTION BROUGHT BY OR ON BEHALF OF ANY PERSON OR ENTITY, WHICH CLAIMS, DEMANDS,
OR CAUSES OF ACTION ARISE OUT OF, ARE INCIDENT TO OR RESULT FROM OPERATIONS,
EVEN THOUGH CAUSED IN WHOLE OR IN PART BY A PRE-EXISTING DEFECT, THE NEGLIGENCE
(WHETHER SOLE, JOINT OR CONCURRENT), GROSS NEGLIGENCE, STRICT LIABILITY, OR
OTHER LEGAL FAULT OF OPERATOR (OR ANY SUCH INDEMNITEE).
(C) Nothing in this Section 4.6 shall be deemed to relieve the Party
designated as Operator from its Participating Interest share of any damage,
loss, cost, expense or liability arising out of, incident to or resulting from
Joint Operations.
(D) Notwithstanding Sections 4.6(A) and 4.6(B), if any Senior
Supervisory Personnel of Operator or its Affiliates engage in Gross Negligence
that proximately causes the Parties to incur damage, loss, cost, expense or
liability for claims, demands or causes of action referred to in Sections 4.6(A)
or 4.6(B), then, in addition to its Participating Interest and Carried Cost
share, Operator shall bear only the first U.S. Dollars Five Million
(US$5,000,000.00) of such damages, losses, expenses and liabilities in a
Calendar Year.
(E) NOTWITHSTANDING THE FOREGOING, UNDER NO CIRCUMSTANCES SHALL
OPERATOR OR ANY INDEMNITEE (EXCEPT AS A PARTY TO THE EXTENT OF ITS PARTICIPATING
INTEREST) BEAR ANY SPECIAL DAMAGES.
4.7 Insurance Obtained by Operator.
----------------------------------
(A) Operator shall procure and maintain, or cause to be procured and
maintained, for the Joint Accounts all insurance in the types and amounts
required by the Contract and Applicable Law; if Operator is unable to do so,
Operator shall promptly advise the Operating Committee, and thereupon Operator's
liability to obtain such insurance shall be suspended as to such specific
insurance as to which its inability relates.
(B) Operator shall obtain such further insurance, at competitive rates,
as the Operating Committee may from time to time require.
(C) Any Party may elect not to participate in the coverage and the cost
of any insurance to be procured under Section 4.7(B) provided such Party:
(1) Gives prompt written notice to that effect to Operator;
(2) Does nothing which may interfere with Operator's negotiations for such
insurance for the other Parties; and
(3) Obtains and maintains such insurance (in respect of which an annual
certificate of adequate coverage from a reputable insurance broker shall be
sufficient evidence) or other evidence of financial responsibility which fully
covers its Participating Interest share of the risks that would be covered by
the insurance procured under Section 4.7(B), and which the Operating Committee
determines is acceptable. No such determination of acceptability shall in any
way absolve a non-participating Party from its obligation to meet each Cash Call
including any Cash Call in respect of damages and losses and/or the costs of
remedying the same in accordance with the terms of this Agreement. If such
Party obtains other insurance, such insurance shall contain a waiver of
subrogation in favor of all the other Parties, the Operator and their insurers,
but only in respect of their interests under this Agreement, and shall be
primary as respects any other insurance providing coverage to the other Parties,
the Operator and their insurers. Such waiver of subrogation shall be in favor
of any contractor or subcontractor in respect of which Operator has waived
rights of recourse on behalf of itself and/or the Parties with respect to Joint
Operations; such waivers of subrogation shall extend to the benefit of the
contractors and/or of the subcontractors so protected; or in the absence of such
insurance such Party hereby releases and indemnifies all the other Parties from
any claims or loss and damage that would have been covered by such insurance,
including those within deductibles applying to such insurance with respect to
Joint Operations.
(D) The cost of insurance for Joint Operations in which all the Parties
are participating shall be for the Joint Account, and the cost of insurance in
which less than all the Parties are participating pursuant to Section 4.7(C)
shall be charged to the Parties participating in proportion equal to a fraction,
the numerator of which is such Party's Participating Interest and the
denominator of which is the sum of the Participating Interests of the Parties
that are participating in such insurance.
(E) Operator shall, in respect of all insurance obtained pursuant to
this Section 4.7:
(1) Promptly inform the participating Parties when such insurance is
obtained and upon request supply them with copies of the relevant policies when
the same are issued;
(2) Arrange for the participating Parties, according to their
respective Participating Interests, to be named as co-insureds on the relevant
policies with waivers of subrogation in favor of all the Parties and shall be
primary as respects any other insurance providing coverage to the Parties; and
shall be in favor of any contractor or subcontractor in favor of whom the
Operator in its capacity of Operator shall have waived rights or recourse; such
waivers of subrogation shall extend to the benefit of the insurers of the
Parties and/or of the contractors and/or subcontractors so protected; and
(3) Duly file all claims and take all necessary and proper steps to
collect any proceeds and credit any proceeds to the participating Parties in
proportion to their respective Participating Interests.
(F) Operator shall use its reasonable efforts to require all
contractors performing work in respect of Joint Operations to obtain and
maintain any and all insurance pertaining to such work in the types and amounts
required by any Applicable Law, contract or any directive of the Operating
Committee, and shall use its reasonable efforts to require all such contractors
to name the Parties as additional insureds on contractor's insurance policies or
to obtain from their insurers waivers of all rights of recourse against the
Parties.
(G) Each Party may, for its own account and at its own expense, obtain such
additional insurance pertaining to Joint Operations and the Contract as it may
deem advisable; provided however, that the obtaining of such additional
insurance shall not interfere with Operator's placement of insurance in
accordance with the terms of this Section 4.7.
4.8 Commingling of Funds. Operator may commingle with Operator's own funds
---------------------
the monies which Operator receives from or for the Joint Accounts pursuant to
this Agreement. Notwithstanding that monies of a Non-Operator have been
commingled with Operator's funds, the Operator shall account to Non-Operators
for the monies of a Non-Operator advanced or paid to Operator, whether for the
conduct of Joint Operations or as proceeds from the sale of production under
this Agreement. Such monies shall be applied only to their intended use and
shall in no way be deemed to be funds belonging to Operator. Notwithstanding
the foregoing, upon the agreement of all Non-Operators, Non-Operators shall have
the right to request Operator to segregate from Operator's own funds the monies
which Operator receives from the Parties in connection with operations on each
Field, and the Operator shall not unreasonably refuse any such request.
4.9 Resignation of Operator. Subject to Section 4.11, Operator may resign
--------------------------
as Operator at any time by so notifying the other Parties at least one hundred
and twenty (120) Days prior to the effective date of such resignation.
4.10 Removal of Operator.
---------------------
(A) Subject to Section 4.11, Operator shall be removed upon receipt of notice
from any Non-Operator if:
(1) An order is made by a court or an effective resolution is passed
for the reorganization under any bankruptcy law, dissolution, liquidation, or
winding up of Operator;
(2) Operator dissolves, liquidates, is wound up, or otherwise terminates its
existence;
(3) Operator becomes insolvent, bankrupt, or makes an assignment for the
benefit of creditors; or
(4) A receiver is appointed for a substantial part of Operator's assets.
If the removal of Operator is prevented by any applicable bankruptcy
law, but Operator or any trustee acting on behalf of Operator properly elects
under that law to reject or avoid all or any part of this Agreement, Operator
shall be deemed to have resigned without any further action being required on
the part of the Non-Operators.
(B) Subject to Section 4.11, Operator may be removed by the decision of
the Working Interest Parties if Operator has committed a material breach of this
Agreement and has either failed to cure such breach within thirty (30) Days of
receipt of a notice from Working Interest Parties detailing the alleged breach
or failed to diligently pursue the cure to completion. Any decision of Working
Interest Parties to give notice of breach to Operator or to remove Operator
under this Section 4.10(B) shall be made by an affirmative vote of all Working
Interest Parties, excluding any Affiliates of Operator, provided that there are
at least two (2) Non-Affiliated Working Interest Parties.
(C) If Operator together with any Affiliate of Operator is or becomes
the holder of a Participating Interest of less than twenty percent (20%), then
Operator shall be required to promptly notify the other Parties. The Operating
Committee shall then vote within twenty (20) Days of such notification on
whether or not a successor Operator should be named pursuant to Section 4.11.
4.11 Appointment of Successor. When a change of Operator occurs pursuant to
-------------------------
Section 4.9 or Section 4.10:
(A) The Operating Committee shall meet as soon as possible to appoint a
successor Operator pursuant to the voting procedure of Section 5.9. However, no
Party may be appointed successor Operator against its will.
(B) If the Operator disputes commission of or failure to cure a
material breach alleged pursuant to Section 4.10(B), and proceedings are
initiated pursuant to Section 17.2, no successor Operator may be appointed
pending the conclusion or abandonment of such proceedings, subject to the terms
of Section 7.3(B) with respect to Operator's breach of its payment obligations.
(C) If an Operator is removed other than in the case of Section
4.10(C), neither Operator nor any Affiliate of Operator shall have the right to
vote for itself or the Operator on the appointment of a successor Operator.
(D) A resigning or removed Operator shall be compensated out of the
Joint Account for its reasonable expenses directly related to its resignation or
removal, except in the case of Section 4.10(B).
(E) The Operating Committee shall arrange for the taking of an
inventory of all Joint Property and Hydrocarbons, and an audit of the books and
records of the removed Operator. Such inventory and audit shall be completed,
if possible, no later than the effective date of the change of Operator. The
liabilities and expenses of such inventory and audit shall be charged to the
Joint Accounts.
(F) The resignation or removal of Operator and its replacement by the
successor Operator shall not become effective prior to receipt of any necessary
Government approvals.
(G) Upon the effective date of the resignation or removal, the
successor Operator shall succeed to all duties, rights, and authority prescribed
for Operator. The former Operator shall transfer to the successor Operator
custody of all Joint Property, Joint Accounts, records, and other documents
maintained by Operator pertaining to the Field and to Joint Operations. Upon
delivery of the above-described property and data, the former Operator shall be
released and discharged from all obligations and liabilities as Operator
accruing after such date.
ARTICLE 5
---------
OPERATING COMMITTEE
5.1 Establishment of Operating Committee. To provide for the overall
----------------------------------------
supervision and direction of Joint Operations, there is established an Operating
Committee composed of representatives of each Party. Each Party shall appoint
one (1) representative and one (1) alternate representative to serve on the
Operating Committee. Each Party shall as soon as possible after the date of
this Agreement give notice in writing to the other Parties of the name and
address of its representative and alternate representative to serve on the
Operating Committee. Each Party shall have the right to change its
representative and alternate at any time by giving notice to such effect to the
other Parties.
5.2 Powers and Duties of Operating Committee.
----------------------------------------------
(A) The Operating Committee shall have power and duty to authorize and
supervise Joint Operations that are necessary or desirable to fulfill the
Contract and properly exploit the Field in accordance with this Agreement and in
a manner appropriate in the circumstances.
(B) Without limiting the generality of the foregoing, the Operating
Committee shall approve the initial form and all modifications to the following:
(1) the submission of the following matters to the Government; provided
that if such matters are not approved by the Operating Committee and submitted
at least thirty (30) Days before the time limit set forth in the Contract for
submission to the Government, then such matters shall be decided and submitted
by the Operator:
(a) Development Plan(s)-interim and final, including without limitation, the
designation of Retained Areas;
(b) Work Programs and Budgets insofar as they cover Minimum Work Obligations
and the timing, depth, and location of wells, or any other technical details not
specified in the Minimum Work Obligations;
(c) EIAs; and
(d) MER;
(2) Work Programs and Budgets;
(3) The sales, exchanges, or other dispositions of G & G Data or other
engineering, technical, or proprietary data and information related to Joint
Operations;
(4) Surrender of any portion or portions of the Contract Area
encompassing the Field as required by Applicable Law or the Contract; provided
that each such surrender shall be determined in accordance with Section 10.1;
(5) Construction of processing, treatment, compression, gathering,
transportation and other downstream facilities;
(6) Unitization, other than one imposed upon the Parties by the
Government, and the terms thereof; and
(7) Request under Section 6.1(m) of the Contract by Contractor to
State to redress the imbalance resulting from a material change to the
economic or tax condition of the Contract.
5.3 Authority to Vote. The representative of a Party, or in his absence his
-------------------
alternate representative, shall be authorized to represent and bind such Party
with respect to any matter which is within the powers of the Operating Committee
and is properly brought before the Operating Committee. Each such
representative shall have a vote equal to the Participating Interest of the
Party such person represents. Each alternate representative shall be entitled
to attend all Operating Committee meetings but shall have no vote at such
meetings except in the absence of the representative for whom he is the
alternate. In addition to the representative and alternate representative, each
Party may also bring to any Operating Committee meetings such technical and
other advisors as it may deem appropriate.
5.4 Subcommittees and Project Teams. The Operating Committee may establish
---------------------------------
such subcommittees and project teams, including technical subcommittees, as the
Operating Committee may deem appropriate. The functions of such subcommittees
and project teams shall be in an advisory capacity or as otherwise deemed
unanimously by the Parties. Such subcommittees and project teams, if
established, shall be under the control and direction of the Operator. In the
event a project team is established by the Operating Committee to provide
services to the Operator, the amount and invoicing of the costs and expenses, if
any, incurred by the Non-Operator providing personnel to the project team must
be approved by the Operating Committee and shall, to the extent permitted by the
Contract and Applicable Law, be charged to the Joint Account.
Project teams will not be utilized in cases where the costs for the use of
such teams or the contracts to be entered into cannot, in the Operator's
reasonable opinion, be charged to the Joint Account or deductible for tax
purposes and the cost to perform same would have been chargeable to the Joint
Account and deductible for tax purposes had such work been performed by Operator
alone or through a third party contractor other than a Non-Operator.
Notwithstanding the foregoing, the Parties shall attempt to utilize project
teams in a manner that will be chargeable to the Joint Account and deductible
for tax purposes under the Contract.
5.5 Notice of Meeting.
--------------------
(A) Operator may call a meeting of the Operating Committee by giving
notice to the Parties at least fifteen (15) Days in advance of such meeting.
(B) Any Non-Operator with a material agenda may request a meeting of
the Operating Committee by giving proper notice to all the other Parties. Upon
receiving such request, Operator shall call such meeting for a date not less
than fifteen (15) Days nor more than twenty (20) Days after receipt of the
request.
(C) The notice periods above may only be waived with the unanimous
consent of all the Parties.
5.6 Contents of Meeting Notice.
----------------------------
(A) Each notice of a meeting of the Operating Committee as provided by
Operator shall contain:
(1) The date, time and location of the meeting; and
(2) An agenda of the matters and proposals to be considered and
voted upon.
(B) A Party, by notice to the other Parties given not less than seven
(7) Days prior to a meeting, may add additional
matters to the agenda for a meeting.
(C) On the request of a Party, and with the unanimous consent of all
Parties, the Operating Committee may consider at a meeting a proposal not
contained in such meeting agenda.
5.7 Location and Frequency of Meetings. All meetings of the Operating
---------------------------------------
Committee shall be held at Operator's offices in Dallas, Texas, U.S.A., or
elsewhere as may be decided by the Operating Committee, and shall be held at
least once every Calendar Year.
5.8 Operator's Duties for Meetings.
--------------------------------
(A) With respect to meetings of the Operating Committee and any subcommittee,
Operator's duties shall include:
(1) Timely preparation and distribution of the agenda and supporting
materials;
(2) Organization and conduct of the meeting; and
(3) Preparation of a written record or minutes of each meeting.
(B) Operator shall have the right to appoint the chairman of the Operating
Committee, project teams and all subcommittees.
5.9 Voting Procedure. Except as otherwise expressly provided in this
------------------
Agreement, all decisions, approvals, and other actions of the Operating
Committee on all proposals coming before it under this Agreement shall be
decided by the affirmative vote of the representatives of Parties then having
collectively at least seventy percent (70%) of the Participating Interests,
provided always that if there are at that time a total of four (4) or more
Non-Affiliated Parties, the affirmative vote of not less than three (3)
Non-Affiliated Parties shall be required.
5.10 Record of Votes. The chairman of the Operating Committee shall appoint
----------------
a secretary who shall make a record of each proposal voted on and the results of
such voting at each Operating Committee meeting. Each representative shall sign
and be provided a copy of such record at the end of such meeting and it shall be
considered the final record of the decisions of the Operating Committee.
5.11 Minutes. The secretary shall provide each Party with a copy of the
--------
minutes of the Operating Committee meeting within fifteen (15) Days after the
end of the meeting. Each Party shall have fifteen (15) Days after receipt of
such minutes to give notice of its objections to the minutes to the secretary.
A failure to give notice specifying objection to such minutes within said
fifteen (15) Day period shall be deemed to be approval of such minutes. In any
event, the votes recorded under Section 5.10 shall take precedence over the
minutes described above.
5.12 Voting by Notice.
-------------------
(A) In lieu of a meeting, any Party may submit any proposal to the
Operating Committee for a vote by written notice. The proposing Party or
Parties shall notify Operator who shall give each representative notice
describing the proposal so submitted. Each Party shall communicate its vote by
notice to Operator and the other Parties within one of the following appropriate
time periods after receipt of Operator's notice:
(1) Forty-eight (48) hours in the case of operations which involve the
use of a drilling rig that is standing by in the Contract
Area;
(2) Ten (10) Days in the case of approval of a contract award pursuant to
Section 6.5(C)(6);
(3) Fifteen (15) Days in the case of all other proposals.
(B) Except in the case of Section 5.12(A)(1) and 5.12(A)(2), any
Non-Operator may, by a reply notice delivered to all Parties within two (2) Days
of receipt of Operator's notice, request that the proposal be decided at a
meeting rather than by vote by notice. In such an event, that proposal shall be
decided at a meeting duly called for that purpose.
(C) Except as provided in Section 9.1(B), any Party failing to
communicate its vote in a timely manner shall be deemed to have voted against
such proposal.
(D) If a meeting is not requested, then at the expiration of the
appropriate time period specified in Section 5.12(A), Operator shall give each
Party a confirmation notice stating the tabulation and results of the vote.
5.13 Effect of Vote. All decisions taken by the Operating Committee
-----------------
pursuant to this Article, shall be conclusive and binding on all the Parties,
except that once a Joint Operation for the drilling, Deepening, Testing,
Sidetracking, Plugging Back, Completing, Recompleting, Reworking, or Plugging of
a well has been approved and commenced, such operation shall not be discontinued
without the consent of the Operating Committee; provided, however, that such
operation may be discontinued, if:
(1) an impenetrable substance or other condition in the hole is
encountered which in the reasonable judgment of Operator causes the continuation
of such operation to be impractical; or
(2) other circumstances occur which in the reasonable judgment of
Operator causes the continuation of such operation to be unwarranted and after
notice the Operating Committee within the period required under Section
5.12(A)(1) approves discontinuing such operation.
On the occurrence of either of the above, Operator shall promptly notify
the Parties that such operation is being discontinued pursuant to the foregoing.
ARTICLE 6
---------
WORK PROGRAM AND BUDGETS
6.1 Work Program and Budgets.
---------------------------
(A) On or before the 15th Day of July of each Calendar Year, Operator
shall deliver to the Parties a proposed Work Program and Budget detailing the
Joint Operations to be performed in the Contract Area for the following Calendar
Year. Within thirty (30) Days from such delivery, the Operating Committee shall
meet to approve the Work Program and Budget.
(B) The Work Program and Budget agreed pursuant to this Section 6.1
shall include the Minimum Work Obligation required to be carried out during the
Calendar Year in question under the terms of the Contract plus any additional
Joint Operations approved by the Operating Committee. Any approved Work Program
and Budget decided and submitted by Operator to the Government pursuant to
Section 5.2(B)(1)(c) instead of being decided by the Operating Committee
pursuant to Section 5.9, however, shall include only such operations for the
Joint Account as are necessary to maintain the Contract in full force and
effect, including such operations as are necessary to fulfill the Minimum Work
Obligation required for the given Calendar Year.
(C) If the Work Program and Budget is approved by the Operating
Committee, Operator shall take such steps as may be required under the
Contract to secure approval of the Work Program and Budget by the
Government. The Operating Committee shall consider any amendments or
revisions to the Work Program and Budget requested by the Government, and
the Work Program and Budget shall be amended to agree with the changes
requested and agreed to by the Government and by the Operating Committee.
(D) Any approved Work Program and Budget may be revised by the
Operating Committee from time to time. To the extent such revisions are
approved by the Operating Committee, including revisions in connection with the
evaluation of a Discovery or a Development Plan, the Work Program and Budget
shall be amended accordingly; provided, however, that no such revision shall
invalidate a commitment or expenditure already made pursuant to a previous
authorization under the Work Program and Budget.
(E) Subject to Section 6.7, approval of drilling operations in any Work
Program and Budget shall include approval for any expenditures necessary for the
drilling, Testing, Completing and Equipping of the applicable well.
(F) Operator shall submit Operator's recommendation to the Parties in
accordance with Section 5.12(A)(1) on whether to Complete, plug and abandon or
temporarily abandon a well and an AFE for such costs.
6.2 Discovery and Evaluation.
---------------------------
If a Discovery is made, Operator shall deliver any notice of Discovery
required under the Contract and shall as soon as possible submit to the Parties
a report containing available details concerning the Discovery and Operator's
recommendation as to whether the Discovery merits evaluation. Within thirty
(30) Days from receiving the report, the Operating Committee shall determine
whether the Discovery merits evaluation and, if so, the Operator within thirty
(30) Days, shall deliver to the Parties a proposed Evaluation Program. Within
thirty (30) Days from delivery of the Evaluation Program, or earlier if
necessary to meet any applicable deadline under the Contract, the Operating
Committee shall meet to consider, modify and then either approve or reject the
Evaluation Program and revise the then current Work Program and Budget
accordingly. If the Evaluation Program is approved by the Operating Committee,
Operator shall take such steps as may be required under the Contract to secure
approval of the Evaluation Program and the revised current Work Program and
Budget by the Government. In the event the Government requires changes in the
Evaluation Program, the matter shall be resubmitted to the Operating Committee
for further consideration. If the Evaluation Program is approved by the
Operating Committee, such work shall be incorporated into and form a part of the
applicable Work Program and Budget.
6.3 Development and Production.
----------------------------
(A) If the Operating Committee determines that a Discovery is a
Commercial Discovery, the Operator shall, as soon as practicable, deliver to the
Parties a Development Plan together with the revised Work Program and Budget for
the current Year and provisional Work Programs and Budgets for the remainder of
the development of the Discovery, which shall contain, inter alia:
(1) Details of the proposed work to be undertaken, personnel required
and expenditures to be incurred, including the timing of same, on a Calendar
Year basis;
(2) An estimated date for the commencement of production of Hydrocarbons;
(3) A delineation of the proposed Field;
(4) The Delivery Point; and
(5) Any other information requested by the Operating Committee or required
by the Contract.
(B) After receipt of the Development Plan and at least thirty (30) Days
prior to any applicable deadline under the Contract, the Operating Committee
shall meet to consider, modify and then either approve or reject the Development
Plan and the revised Work Program and Budget for the current Calendar Year for
the development submitted by Operator. If the Development Plan is approved by
the Operating Committee, Operator shall, as soon as possible, deliver any notice
required under the Contract and take such other steps as may be required under
the Contract to secure approval of the Development Plan by the Government. In
the event the Government requires changes in the Development Plan, the matter
shall be resubmitted to the Operating Committee for further consideration. If
the Development Plan is approved by the Operating Committee, such work shall be
incorporated into and form part of the annual Work Program and Budgets.
6.4 Itemization of Expenditures.
------------------------------
(A) During the preparation of the proposed Work Programs and Budgets,
Operator shall consult with the Operating Committee or the appropriate
subcommittees regarding the contents of such Work Programs and Budgets.
(B) Each Work Program and Budget submitted by Operator shall contain an
itemized estimate of the costs of Joint Operations and all other expenditures to
be made for the Joint Account during the Calendar Year in question.
6.5 Contract Awards. Subject to the Contract and any Applicable Law:
-----------------
(A) For contracts equal to or less than U.S. Dollars Two Hundred Fifty
Thousand (US $250,000.00), Operator shall award each contract for approved Joint
Operations to the best qualified contractor as determined by cost and ability to
perform the contract, without the obligation to tender for bids and without
informing or seeking the approval of the Operating Committee; except that before
entering into contracts with Affiliates of the Operator exceeding U.S. Dollars
Fifty Thousand (US $50,000.00), Operator shall obtain the approval of the
Operating Committee.
(B) For contracts greater than U.S. Dollars Two Hundred Fifty Thousand
(US $250,000.00) and equal to or less than U.S. Dollars One Million (US
$1,000,000.00), Operator shall follow a competitive bid process in accordance
with Operator's internal regulations, the Contract and Applicable Law, and
inform the Non-Operators of the entity to be awarded the contract, and upon the
request of a Party, provide such Party with a copy of the tender documents and
the final version of the contract.
(C) For contracts greater than U.S. Dollars One Million (US $1,000,000.00),
Operator shall:
(1) Provide the Parties with a list of the entities whom Operator proposes
to invite to tender for the said contract;
(2) Add to such list any entity whom a Party requests to be added within
seven (7) Days of receipt of such list;
(3) Prepare and dispatch the tender documents to the entities on the list
as aforesaid and to Non-Operators;
(4) After the expiration of the period allowed for tendering, consider and
analyze the details of all bids received;
(5) Prepare and circulate to the Parties a competitive bid analysis,
stating Operator's recommendation as to whom the contract should be
awarded, the reasons therefor, and the technical, commercial and
contractual terms to be agreed upon;
(6) Obtain the approval of the Operating Committee to the recommended
contract award as provided under Section 5.9; and
(7) Upon the request of a Party, provide such Party with a copy of the
final version of the contract.
6.6 Authorization for Expenditure Procedure.
---------------------------------------
(A) Prior to incurring any commitment or making any expenditure for the
Joint Accounts that is estimated to be in excess of U.S. Dollars Two Hundred
Fifty Thousand (US $250,000.00), Operator shall send to each Non-Operator
entitled to receive an AFE containing Operator's best estimate of the total
funds required to carry out such work, the estimated timing of expenditures, and
any other available related information as described in Section 6.6(E).
(B) Except as provided under Section 6.6(C) and Section 6.7(B), all
AFEs shall be for informational purposes only. Approval of an operation in the
current Work Program and Budget shall authorize Operator to conduct the
operation (subject to Section 6.6(C) and Section 6.7) without further
authorization from the Operating Committee.
(C) Prior to incurring any commitment or expenditure for the Joint
Accounts, which is subject to the AFE procedure in Section 6.6(A) and is
estimated to be in excess of U.S. Dollars One Million (US $1,000,000.00),
Operator shall obtain the approval of the Operating Committee to an AFE for cost
and technical control purposes. A Party may only vote to disapprove an AFE
issued in furtherance of an approved Work Program and Budget under this Section
6.6(C) if (i) some or all of the costs described in the AFE exceed the line
items in the approved Work Program and Budget by more than is permitted under
Section 6.7, or (ii) the proposed terms of any third party contract described in
the AFE do not approximate fair market terms or (iii) in such Party's good faith
opinion, any material technical specifications contained in the AFE that are not
in the approved Work Program and Budget are imprudent or not consistent with
current economic standards of the international petroleum industry or are not
supported by the known data about the formations being drilled. A Party's vote
shall be considered a vote to approve the AFE unless the Party specifically
describes one or more of the three (3) reasons listed above as the basis for its
vote of disapproval. If the Operating Committee approves an AFE for the
operations within the applicable time period under Section 5.12, Operator shall
be authorized to conduct the operation under the terms of this Agreement. If
the Operating Committee fails to approve an AFE for the operation within the
applicable time period, the operations shall be deemed rejected. When an
operation is rejected under this Section 6.6(C) or an operation is approved for
differing amounts than those provided for in the applicable line items of the
approved Work Program and Budget, the Work Program and Budget shall be deemed to
be revised accordingly.
(D) Notwithstanding the above, Operator shall not be obliged to furnish
an AFE to the Parties with respect to any Minimum Work Obligations, workovers of
wells and general and administrative costs that are listed as separate line
items in an approved Work Program and Budget.
(E) Each AFE proposed by the Operator shall:
(1) Identify the operation by specific reference to the applicable
line items in the Work Program and Budget;
(2) Describe the work in detail;
(3) Contain Operator's best estimate of the total funds required
to carry out such work;
(4) Outline the proposed work schedule;
(5) Provide a timetable of expenditures, if known; and
(6) Be accompanied by such other supporting information as is
necessary for an informed decision.
6.7 Overexpenditures of Work Programs and Budgets.
---------------------------------------------
(A) Operator shall be entitled to incur an overexpenditure for any line
item of an approved Work Program and Budget, or if Section 6.6(C) applies, then
for any AFE, up to ten percent (10%) of the authorized amount for such line item
or AFE item; provided that the cumulative total of all overexpenditures for a
Calendar Year shall not exceed five percent (5%) of the total Work Program and
Budget in question.
(B) At such time that Operator is certain that the limits of Section 6.7(A)
will be exceeded, Operator shall furnish a supplemental AFE for the estimated
overexpenditures to the Operating Committee for its approval, such approval to
be rendered in accordance with the procedures in Section 5.12, and shall provide
the Parties with full details of such overexpenditures. If Operating Committee
does not approve such supplemental AFE, Operator shall not incur the additional
expense covered by such supplemental AFE and the Operation carried thereby shall
immediately cease, unless otherwise agreed by the Operating Committee. Operator
shall promptly give notice of the amounts of overexpenditures when actually
incurred.
(C) The restrictions contained in Article 5 and this Article 6 shall be
without prejudice to Operator's rights to make expenditures as set out in
Section 4.2(B)(11) and Section 12.5.
ARTICLE 7
---------
DEFAULT
7.1 Default and Notice. Any Working Interest Party that fails to pay when
---------------------
due its Participating Interest or Carried Cost share of any Joint Accounts
expenses, including Cash Calls, billings and accrued interest, shall be in
default under this Agreement (a "Defaulting Party"). Operator, or any
non-defaulting Working Interest Party in the case Operator is the Defaulting
Party, shall promptly give written notice of such default to the Defaulting
Party and each of the non-defaulting Working Interest Parties (the "Default
Notice"). The amount not paid by the Defaulting Party shall bear interest from
the date due until paid in full at the Agreed Interest Rate.
7.2 Operating Committee Meetings and Data. Beginning five (5) Business Days
--------------------------------------
from the date of the Default Notice, the Defaulting Party shall not be entitled
to attend Operating Committee, project team and subcommittee meetings or to vote
on any matter coming before the Operating Committee or any subcommittee until
all of its defaults have been remedied (including payment of accrued interest).
Unless agreed otherwise by the non-defaulting Working Interest Parties, the
voting interest of each non-defaulting Working Interest Party during this period
shall be its percentage of the total Participating Interests of the
non-defaulting Working Interest Parties. Any matters requiring a unanimous vote
of the Parties shall not require the vote of the Defaulting Party. In addition,
beginning five (5) Business Days from the date of the Default Notice, and
thereafter while the Defaulting Party remains in default, the Defaulting Party
shall not have access to any data or information relating to Joint Operations.
During this period, the non-defaulting Working Interest Parties shall be
entitled to trade data without such Defaulting Party's consent, and the
Defaulting Party shall have no right to any data received in such a trade unless
and until its default is remedied in full. The Defaulting Party shall be deemed
to have elected not to participate in any Joint Operations that are voted upon
at least five (5) Business Days after the date of the Default Notice but before
all of its defaults have been remedied to the extent such an election would be
permitted by Section 5.13(B) of this Agreement. The Defaulting Party shall be
deemed to have approved, and shall join with the non-defaulting Parties in
taking any other actions voted on during that period.
7.3 Allocation of Defaulted Accounts.
------------------------------------
(A) The Party providing the Default Notice pursuant to Section 7.1
shall include in the Default Notice to each non-defaulting Working Interest
Party a statement of the sum of money that the non-defaulting Working Interest
Party is to pay as its portion (such portion being in the ratio that each
non-defaulting Working Interest Party's Participating Interests bears to the
Participating Interests of all non-defaulting Working Interest Parties) of the
amount in default (excluding interest), subject to the terms of this Section
7.3. If the Defaulting Party remedies its default in full within five (5)
Business Days from the date of the Default Notice, the notifying Party shall
promptly notify each non-defaulting Working Interest Party by telephone and
facsimile, and the non-defaulting Working Interest Parties shall be relieved of
their obligation to pay a share of the amounts in default. Otherwise, each
non-defaulting Working Interest Party shall pay Operator, within five (5)
Business Days after receipt of the Default Notice, its share of the amount which
the Defaulting Party failed to pay. If any non-defaulting Working Interest
Party fails to pay its share of the amount in default as aforesaid, such Party
shall thereupon be a Defaulting Party subject to the provisions of this Article
7. The non-defaulting Working Interest Parties which pay the amount owed by any
Defaulting Party shall be entitled to receive their respective shares of the
principal and interest payable by such Defaulting Party pursuant to this Article
7.
(B) If Operator is a Defaulting Party, then all payments otherwise
payable to Operator for Joint Account costs pursuant to this Agreement shall be
made to the notifying Working Interest Party instead until the default is cured
or a successor Operator appointed. The notifying Working Interest Party shall
maintain such funds in a segregated account separate from its own funds and
shall apply such funds to third party claims due and payable from the Joint
Account of which it has notice, to the extent Operator would be authorized to
make such payments under the terms of this Agreement. The notifying Party shall
be entitled to bill or Cash Call the other Parties in accordance with the
Accounting Procedure for proper third party charges that become due and payable
during such period to the extent sufficient funds are not available. When
Operator has cured its default or a successor Operator is appointed, the
notifying Party shall turn over all remaining funds in the account to Operator
and shall provide Operator and the other Parties with a detailed accounting of
the funds received and expended during this period.
(C) The notifying Party shall not be liable for damages, losses, costs,
expenses or liabilities arising as a result of its actions under Section 7.3(B),
except to the extent Operator would be liable under Section 4.6.
7.4 Remedies.
---------
(A) During the continuance of a default, the Defaulting Party shall not
have a right to its Entitlement, which shall vest in and be the property of the
non-defaulting Working Interest Parties. Operator (or the notifying Party if
Operator is a Defaulting Party) shall be authorized to sell such Entitlement in
an arm's-length sale on terms that are commercially reasonable under the
circumstances and, after deducting all costs, charges and expenses incurred in
connection with such sale, pay the net proceeds to the non-defaulting Working
Interest Parties in proportion to the amounts they are owed by the Defaulting
Party hereunder (and apply such net proceeds toward the establishment of a
reserve fund under Section 7.4(C), if applicable) until all such amounts are
recovered and such reserve fund is established. Any surplus remaining shall be
paid to the Defaulting Party, and any deficiency shall remain a debt due from
the Defaulting Party to the non-defaulting Working Interest Parties. When
making sales under this Section 7.4(A) the non-defaulting Working Interest
Parties shall have no obligation to share any existing market or obtain a price
equal to the price at which their own production is sold.
(B) If Operator disposes of any Joint Property or any other credit or
adjustment is made to any Joint Account, while a Party is in default, Operator
(or the notifying Party if Operator is Defaulting Party) shall be entitled to
apply the Defaulting Party's Participating Interest share of the proceeds of
such disposal, credit or adjustment against all amounts owing by the Defaulting
Party to the non-defaulting Working Interest Party hereunder (and toward the
establishment of a reserve fund under Section 7.4(C), if applicable). Any
surplus remaining shall be paid to the Defaulting Party, and any deficiency
shall remain a debt due from the Defaulting Party to the non-defaulting Working
Interest Parties.
(C) The non-defaulting Working Interest Parties shall be entitled to
apply proceeds received under Sections 7.4(A) and 7.4(B) toward the creation of
a reserve fund in an amount equal to the Defaulting Party's Participating
Interest share of (i) the estimated cost to abandon any wells and other property
in which the Defaulting Party participated, (ii) the estimated cost of severance
benefits for local employees upon cessation of Operations and (iii) any other
identifiable costs that the non-defaulting Parties anticipate will be incurred
in connection with the cessation of Operations and as otherwise required under
the Contract.
(D) If a Defaulting Party fails to remedy its default by the sixtieth
(60th) Day following the date of the Default Notice, then, without prejudice to
any other rights available to the non-defaulting Working Interest Parties to
recover amounts owing to them under this Agreement, each non-defaulting Party
shall have the option, exercisable at anytime thereafter until the Defaulting
Party has completely cured its defaults, to require that the Defaulting Party
completely withdraw from the Contract Area, this Agreement and the Contract.
Such option shall be exercised by notice to the Defaulting Party and each
non-defaulting Working Interest Party. If such option is exercised, the
Defaulting Party shall be deemed to have transferred, pursuant to Section 12.6,
effective on the date of the non-defaulting Working Interest Party's notice, all
of its right, title and beneficial interest in and under this Agreement, the
Contract Area, and the Contract to the non-defaulting Working Interest Parties.
The Defaulting Party shall, without delay following any request from the
non-defaulting Working Interest Parties, do any and all acts required to be done
by Applicable Law or regulation in order to render such transfer legally valid,
including, without limitation, obtaining all Government consents and approvals,
and shall execute any and all documents and take such other action as may be
necessary in order to effect a prompt and valid transfer of the interests
described above. The Defaulting Party shall be obligated to promptly remove any
liens and encumbrances which may exist on such transferred interests. For
purposes of this Section 7.4(D), each Party constitutes and appoints each other
Party its true and lawful attorney to execute such instruments and make such
filings and applications as may be necessary to make such transfer legally
effective and to obtain any necessary consents of the Government. Actions under
this power of attorney may be taken by any Party individually without the
joinder of the others. This power of attorney is irrevocable for the term of
this Agreement and is coupled with an interest. If requested, each Party shall
execute a form prescribed by the Operating Committee setting forth this power of
attorney in more detail. In the event all Government approvals are not timely
obtained, the Defaulting Party shall hold its Participating Interest in trust
for the non-defaulting Working Interest Parties who are entitled to receive the
Defaulting Party's Participating Interest. Notwithstanding the terms of Article
7, in the absence of an agreement among the non-defaulting Working Interest
Parties to the contrary, any transfer to the non-defaulting Working Interest
Parties following a withdrawal pursuant to this Section 7.4(D) shall be in
proportion to the Participating Interests of the non-defaulting Working Interest
Parties. The acceptance by a non-defaulting Working Interest Party of any
portion of a Defaulting Party's Participating Interest shall not limit any
rights or remedies that the non-defaulting Working Interest Party has to recover
all amounts (including interest) owing under this Agreement by the Defaulting
Party.
(E) The non-defaulting Working Interest Party shall be entitled to
recover from the Defaulting Party all reasonable attorneys' fees and all other
reasonable costs sustained in the collection of amounts owing by the Defaulting
Party.
(F) The rights and remedies granted to the non-defaulting Working
Interest Parties in this Agreement shall be cumulative, not exclusive, and shall
be in addition to any other rights and remedies that may be available to the
non-defaulting Working Interest Parties, whether at law, in equity or otherwise.
Each right and remedy available to the non-defaulting Working Interest Parties
may be exercised from time to time and so often and in such order as may be
considered expedient by the non-defaulting Working Interest Parties in their
sole discretion.
7.5 Survival. The obligations of the Defaulting Party and the rights of the
---------
non-defaulting Parties shall survive the surrender of the Contract, abandonment
and/or Decommissioning of Joint Operations and termination of this Agreement.
7.6 No Right of Set Off. Subject to the terms of the Assignment and the
------------------------
Contract, each Party acknowledges and accepts that a fundamental principle of
this Agreement is that each Party pays its Participating Interest share and
Carried Cost share of all amounts due under this Agreement as and when required.
Accordingly, any Party which becomes a Defaulting Party undertakes that, in
respect of either any exercise by the non-defaulting Working Interest Parties of
any rights under or the application of any of the provisions of this Article7,
such Defaulting Party hereby waives any right to raise by way of set off or
invoke as a defense, whether in law or equity, any failure by any other Party to
pay amounts due and owing under this Agreement or any alleged claim that such
Party may have against Operator or any Non-Operator, whether such claim arises
under this Agreement or otherwise. Each Party further agrees that the nature
and the amount of the remedies granted to the non-defaulting Parties hereunder
are reasonable and appropriate in the circumstances.
7.7 Cross-Default. Non-Defaulting Parties shall have the rights and
--------------
remedies against a Defaulting Party under this Article 7 and similar default
provision under any other joint operating agreement covering the Contract and
Contract Area to which the Defaulting Party is a party for any default arising
under any one or more such agreements. The creation of more than one Field in
the Contract Area shall in no event affect the scope or efficacy of such rights
and remedies, which scope and effect shall remain unchanged as if separate joint
operating agreements for each Field had not been established.
ARTICLE 8
---------
DISPOSITION OF PRODUCTION
8.1 Right and Obligation to Take in Kind. Except as otherwise provided in
---------------------------------------
this Article 8 or in Article 7, each Party shall have the right and obligation
to take in kind and separately dispose of the share of total production
available to it from any Field pursuant to the Contract and this Agreement in
such quantities and in accordance with such procedures as may be set forth in
the offtake agreement referred to in Section 7.2 or in the special arrangements
for Natural Gas referred to in Section 8.3.
8.2 Offtake Agreement for Crude Oil. If Crude Oil is to be produced from a
---------------------------------
Field, the Parties shall in good faith, and not less than three (3) months prior
to first delivery of Crude Oil, negotiate and conclude the terms of an agreement
to cover the offtake of Crude Oil produced under the Contract. This offtake
agreement shall, to the extent consistent with the Contract and, in particular,
the interest of the Carried Party under the Assignment, make provision for:
(A) The Delivery Point, at which title and risk of loss of
Participating Interest shares of Crude Oil shall pass to the Parties with rights
to such Crude Oil (or as the Parties may otherwise agree);
(B) Operator's regular periodic advice to the Parties of estimates of
total available Crude Oil produced for succeeding periods, quantities of each
grade of Crude Oil and each Party's share for as far ahead as is necessary for
Operator and the Parties to plan offtake arrangements. Such advice shall also
cover for each grade of Crude Oil total available Crude Oil produced and
deliveries for the preceding period, inventory and overlifts and underlifts;
(C) Nomination by the Parties to Operator of acceptance of their shares
of total available production for the succeeding period. Such nominations shall
in any one period be for each Party's entire share of available production
during that period subject to operational tolerances and agreed minimum economic
cargo sizes or as the Parties may otherwise agree;
(D) Elimination of overlifts and underlifts;
(E) If offshore loading or a shore terminal for vessel loading is
involved, risks regarding acceptability of tankers, demurrage and (if
applicable) availability of berths;
(F) Distribution to the Parties of available grades, gravities and
qualities of Hydrocarbons to ensure, to the extent Parties take delivery of
their Entitlements as they accrue, that each Party shall receive in each period
Entitlements of grades, gravities and qualities of Hydrocarbons from each Field
in which it participates similar to the grades, gravities and qualities of
Hydrocarbons received by each other Party from participating in such Field in
that period;
(G) To the extent that distribution of Entitlements on such basis is
impracticable due to availability of facilities and minimum cargo sizes, a
method of making periodic adjustments;
(H) The option and the right of the other Parties to sell an
Entitlement which a Party fails to nominate for acceptance pursuant to Section
8.2 (C) above or of which a Party fails to take delivery, in accordance with
applicable agreed procedures, provided that such failure either constitutes a
breach of Operator's or Parties' obligations under the terms of the Contract,
or is likely to result in the curtailment or shut-in of production. Such
sales shall be made only to the limited extent necessary to avoid disruption
in Joint Operations. Operator shall give all Parties as much notice as is
practicable of such situation and that a sale option has arisen. Any
sale shall be of the unnominated or undelivered Entitlement as the case may
be and for reasonable periods of time as are consistent with the minimum needs
of the industry and in no event to exceed twelve (12) months. The right of
sale shall be revocable at will subject to any prior contractual commitments.
Payment terms for production sold under this option shall be established
in the offtake agreement; and
(I) Carried Party's Participating Interest share of Net Crude Oil
shall be treated separate from and not commingled with the State's share of
Royalty and Net Crude Oil under the Contract.
If an offtake agreement has not been entered into by the date of first
delivery of Crude Oil, the Parties shall be bound by the principles set forth in
this Section 8.2 until an offtake agreement has been entered into. All Crude
Oil which is attributable to the recovery of Petroleum Operations Expenditures
pursuant to the Contract, shall be lifted only by those Working Interest Parties
who contributed to the payment of such Petroleum Operations Expenditures,
including the payment of the Carried Party's share of such Expenditures as
provided under the Assignment.
8.3 Separate Agreement for Natural Gas. The Parties recognize that if
---------------------------------------
Natural Gas is discovered it may be necessary for the Parties to enter into
special arrangements for the disposal of the Natural Gas, which are consistent
with the terms of the Contract.
ARTICLE 9
---------
ABANDONMENT AND DECOMMISSIONING
9.1 Joint Operations Abandonment and Decommissioning.
-----------------------------------------------------
(A) A decision to plug and abandon any well which has been drilled and
to Decommission any installations and facilities which have been constructed as
a Joint Operation shall require the approval of the Operating Committee.
(B) Should any such Party fail to reply within the applicable
period prescribed in Section 5.12(A)(1) or Section 5.12(A)(2), whichever is
applicable, after delivery of notice of the Operator's proposal to plug and
abandon such well, such Party shall be deemed to have consented to the proposed
abandonment.
(C) Any well plugged and abandoned under this Agreement shall be
plugged and abandoned in accordance with Applicable Law and at the cost, risk
and expense of the Parties who participated in the cost of drilling
such well.
ARTICLE 10
----------
SURRENDER, EXTENSIONS AND RENEWALS
10.1 Surrender.
----------
(A) If the Contract requires the Parties to surrender any portion of
the Contract Area, Operator shall advise the Operating Committee of such
requirement at least one hundred and twenty (120) Days in advance of the earlier
of the date for filing irrevocable notice of such surrender or the date of such
surrender. Prior to the end of such period, the Operating Committee shall
determine pursuant to Article 5 the size and shape of the surrendered area,
consistent with the requirements of the Contract. If a sufficient vote of the
Operating Committee cannot be attained, then the proposal supported by a simple
majority of the Participating Interests shall be adopted. If no proposal
attains the support of a simple majority of the Participating Interests, then
the proposal receiving the largest aggregate Participating Interest vote shall
be adopted. In the event of a tie, the Operator shall choose among the
proposals receiving the largest aggregate Participating Interest vote. The
Parties shall execute any and all documents and take such other actions as may
be necessary to effect the surrender. Each Party renounces all claims and
causes of action against Operator and any other Parties on account of any area
surrendered in accordance with the foregoing but against its recommendation if
Hydrocarbons are subsequently discovered under the surrendered area.
(B) A surrender of all or any part of a Field which is not required by
the Contract shall require the unanimous consent of the Working Interest
Parties.
10.2 Extension of the Term.
-------------------------
(A) With regard to a Field, a proposal by any Party to enter into or
extend the term of any Contract Period or Exploitation Period under the
Contract, or a proposal to extend the term of the Contract, shall be brought
before the Operating Committee pursuant to Article 5. A proposal for such
extension that impacts the whole Contract Area, will entail agreement of the
parties to the other joint operating agreement covering the Contract and
Contract Area
(B) With regard to a Field, any Working Interest Party shall have the
right to enter into or extend the term of any Contract Period or Exploitation
Period under the Contract or to extend the term of the Contract, regardless of
the vote taken by the Operating Committee. If any such Party or Parties take
such action, any Party not electing to enter into or to extend shall withdraw
from this Agreement to the extent that such election relates to the whole
Contract Area, to the Retained Area, or to a Field, as the case may be, subject
always to the requirements of Article 12.
ARTICLE 11
----------
TRANSFER OF INTEREST OR RIGHTS
11.1 Obligations.
------------
(A) Subject always to the requirements of the Contract, the transfer of
all or part of a Party's Participating Interest, except transfers pursuant to
Article 7 or Article 12, shall be effective only if it satisfies the terms and
conditions of this Article 11.
(B) Except as provided in the Assignment or in the case of a Party
transferring all of its Participating Interest, no transfer shall be made by any
Party which results in the transferor or the transferee holding a Participating
Interest of less than ten percent (10%), except where otherwise agreed by all
Parties, or holding any interest other than a uniform, undivided Participating
Interest in the Field and this Agreement.
(C) The transferring Party shall, notwithstanding the transfer, be
liable to the other Parties for any obligations, financial or otherwise, which
have vested, matured, or accrued under the provision of the Contract or this
Agreement prior to such transfer. Such obligations shall include any proposed
expenditure approved by the Operating Committee prior to the transferring Party
notifying the other Parties of its proposed transfer (whether such expenditure
is actually expended before or after the transfer date).
(D) The transferee shall have no right in and under the Contract, the
Field, or this Agreement unless and until it obtains any necessary Government
approval and expressly undertakes in an instrument satisfactory to the other
Parties to perform the obligations of the transferor under the Contract and this
Agreement in respect of the Participating Interest being transferred and
furnishes any guarantees required by the Government or the Contract.
(E) A transferee (other than an Affiliate) shall have no rights in and
under the Contract, the Field, or this Agreement unless each Party has consented
in writing to such transfer, which consent shall be denied only if such
transferee fails to establish to the reasonable satisfaction of each such Party
its capability to perform its obligations under the Contract and this Agreement.
(F) Nothing contained in this Article 11 shall prevent a Party from
mortgaging, pledging, charging or otherwise encumbering all or part of its
interest in the Field and in and under this Agreement for the purpose of
security relating to finance provided that:
(1) Such Party shall remain liable for all obligations relating to such
interest;
(2) the encumbrance shall be subject to any necessary approval of the
Government and be expressly subordinated to the rights of the other Parties
under this Agreement;
(3) such Party shall ensure that any such mortgage, pledge, charge or
encumbrance shall be expressed to be without prejudice to the provisions of this
Agreement;
(4) the Parties agree that the mortgagee or pledgee of all or part of a
Party's interest in the Field, may, but shall not be obliged to, perform or
cause to perform such act or take such action or pay such money, or cure any
default hereunder and under the Contract of such Party, if such Party fails to
perform any act hereunder or is otherwise in default hereunder or under the
Contract; and
(5) the foreclosure or other realization of collateral interest under
any such mortgage or pledge shall not be considered a transfer of a
Participating Interest under Section 11.1(F).
11.2 Consent. The Parties shall promptly join in such reasonable actions as
--------
may be necessary or desirable to obtain any consent of the Government in
accordance with Section 12.1(F) of the Contract and shall execute and deliver,
any and all documents reasonably necessary to effect, any such assignment.
11.3 Rights. Each Party shall have the right, subject to the provisions of
-------
Section 11.1 and 11.2, to freely transfer its Participating Interest; provided,
however, that the Carried Party shall only have the right to sell, assign,
transfer, convey or otherwise dispose of any part or all of its rights and
interests and obligations under the Contract and/or in any Field in the Contract
Area to the national oil company of the Republic of Equatorial Guinea or other
wholly owned Government entity exclusively responsible for the development of
Hydrocarbon deposits in the Contract Area.
ARTICLE 12
----------
WITHDRAWAL FROM AGREEMENT
12.1 Right of Withdrawal.
----------------------
(A) Subject to the provisions of this Article 12, any Party may withdraw
from this Agreement, the Contract, and a Field in the Contract Area by giving
notice to all other Parties stating its decision to withdraw. Such notice shall
be unconditional and irrevocable when given, except as may be provided in
Section 12.7.
(B) Notwithstanding Section 12.1(A), during the Exploration Period, a Party
shall not have the right to withdraw from this Agreement and the Contract until
the Minimum Work Obligations for the current Contract Period have been
fulfilled.
(C) The effective date of withdrawal for a withdrawing Party shall be the
end of the calendar month following the calendar month in which the notice of
withdrawal is given, provided that if all Parties elect to withdraw, the
effective date of withdrawal for each Party shall be the date determined by
Section 12.9.
12.2 Complete Withdrawal.
---------------------
(A) Within thirty (30) Days of receipt of each withdrawing Party's
notification, each of the other Parties may also give notice that it desires to
withdraw from this Agreement and the Contract. Should all Working Interest
Parties give notice of withdrawal, the Parties shall proceed to abandon the
Field and terminate the Contract insofar as it relates to the Field and this
Agreement. If less than all of the Working Interest Parties give such notice of
withdrawal, then the withdrawing Parties shall take all steps to withdraw from
the Contract, this Agreement, and any Fields in the Contract Area on the
earliest possible date and execute and deliver all necessary instruments and
documents to assign their Participating Interest to the Working Interest Parties
which are not withdrawing, without any compensation whatsoever, in accordance
with the provisions of Section 12.6.
(B) Any Party withdrawing under Section 10.2 or this Article 12, shall
withdraw from the entirety of the Field, and thus abandon to the other Parties
not joining in its withdrawal all its rights to Hydrocarbons produced after the
effective date of such withdrawal and all rights in such associated Joint
Property.
12.3 Rights of a Withdrawing Party. A withdrawing Party shall have the
----------------------------------
right to receive its Entitlement of Hydrocarbons produced through the effective
date of its withdrawal and shall retain the right to (and responsibility for)
its Participating Interest share of subsequent audit adjustment relating to
periods prior to such effective date. The withdrawing Party shall be entitled
to receive all information to which such Party is otherwise entitled under this
Agreement until the effective date of its withdrawal. After giving its
notification of withdrawal, a Party shall not be entitled to vote on any matters
coming before the Operating Committee, other than matters for which such Party
has financial responsibility.
12.4 Obligations and Liabilities of a Withdrawing Party.
---------------------------------------------------------
(A) A withdrawing Party, prior to its withdrawal, shall satisfy all
obligations and liabilities it has incurred or attributable to it prior to such
withdrawal regardless of when they are actually incurred, including (i) any
expenditures budgeted and/or approved by the Operating Committee prior to its
written notification of withdrawal (development projects included), (ii)
emergency expenditures as described in Sections 4.2(B)(11) and 12.5 and (iii)
all other obligations and liabilities of the Parties or Consenting Parties, as
applicable, with respect to acts or omissions under this Agreement prior to its
withdrawal for which such Party would have been liable, had it not withdrawn
from this Agreement and the Contract. If such obligations and liabilities are
not identified or identifiable at the time of withdrawal the withdrawing Party
shall nonetheless remain liable therefor. Furthermore, any liens, charges and
other encumbrances which the withdrawing Party placed on such Party's
Participating Interest prior to its withdrawal shall be fully satisfied or
released, at the withdrawing Party's expense, prior to its withdrawal.
(B) Notwithstanding the foregoing, a withdrawing Party shall not be
liable for any operations or expenditures (participation in which, or liability
therefor, is not mandatory hereunder except as a sole consequence of the binding
effect of a Operating Committee decision) it voted against in a properly
constituted Operating Committee vote if it delivers notification of its
withdrawal within five (5) Days (or within twenty-four (24) hours if the
drilling rig to be used in such operation is standing by on the Contract Area)
of the Operating Committee vote approving such operation or expenditure. A
Party voting against voluntary entering or extending a Contract Period,
Exploration Period or Exploitation Period shall not be liable for the Minimum
Work Obligations associated therewith provided that it sends notification of its
withdrawal within thirty (30) Days of such vote pursuant to Section 10.2.
(C) The obligations and liabilities for which a withdrawing Party
remains liable shall specifically include its share of any costs of
Decommissioning wells, or portion of wells, field flowlines, pipelines,
structures and facilities in which it participated (or was required to bear a
share of the costs pursuant to Section 12.4(A)), to the extent such costs of
Decommissioning are payable by the Parties under the Contract.
12.5 Emergency. If a well goes out of control or a fire, blow out, sabotage
----------
or other emergency occurs prior to the effective date of a Party's withdrawal,
the notification of withdrawal shall become effective only after the emergency
has been contained and the withdrawing Party has paid, or has provided, security
satisfactory to the Parties for its Participating Interest share of the costs of
such emergency.
12.6 Assignment. A withdrawing Party shall assign its Participating
-----------
Interest free of cost to each of the non-withdrawing Working Interest Parties in
the proportion which each of their Participating Interests (prior to the
withdrawal) bears to the total Participating Interests of all the
non-withdrawing Working Interest Parties (prior to the withdrawal), unless the
non-withdrawing Working Interest Parties agree otherwise. The expenses
associated with the withdrawal and assignments shall be borne by the withdrawing
Party.
12.7 Approvals. A withdrawing Party shall promptly join in such actions as
----------
may be necessary or desirable to obtain any Government approvals required
in connection with the withdrawal and assignments, and any penalties or expenses
incurred by the Parties in connection with such withdrawal shall be borne by the
withdrawing Party. If the Government does not approve a Party's withdrawal and
assignment to the other Parties, then the withdrawing Party shall at its option
either (1) retract its notice of withdrawal by notice to the other Parties and
remain a Party as if such notice of withdrawal had never been sent or (2) hold
its Participating Interest in trust for the sole and exclusive benefit of the
non-withdrawing Working Interest Parties with the right to be reimbursed by the
non-withdrawing Working Interest Parties for any subsequent costs and
liabilities incurred by it for which it would not have been liable, had it
successfully withdrawn.
12.8 Abandonment Security.
----------------------
(A) As a condition to the effectiveness of its withdrawal, a
withdrawing Party shall provide Security reasonably satisfactory to the other
Parties to satisfy any such obligations or liabilities which were approved or
accrued prior to notice of withdrawal, but which become due after its
withdrawal, including Security to cover the costs of any abandonment and
Decommissioning and the special reserve account under the Contract, if
applicable.
(B) Failure to provide Security shall constitute default under this
Agreement.
(C) "Security" means a standby letter of credit issued by a bank or an on
demand bond issued by a corporation, such bank or corporation having a credit
rating indicating it has sufficient worth to pay its obligations in all
reasonably foreseeable circumstances, or, failing the provision of either of
those, cash deposited in an escrow account with withdrawal rights granted to
Operator.
12.9 Withdrawal or Decommissioning by all Parties. In the event all Parties
---------------------------------------------
decide to withdraw, the Parties agree that they shall be bound by the terms and
conditions of this Agreement for so long as may be necessary to wind up the
affairs of the Parties with the Government, to satisfy any requirements of
Applicable Law and to facilitate the sale, disposition or Decommissioning of the
Joint Property.
ARTICLE 13
----------
RELATIONSHIP OF PARTIES AND TAX
13.1 Relationship of Parties. The rights, duties, obligations, and
--------------------------
liabilities of the Parties under this Agreement shall be individual, not joint
or collective. It is not the intention of the Parties to create, nor shall this
Agreement be deemed or construed to create a mining or other partnership, joint
venture, association or trust. This Agreement shall not be deemed or construed
to authorize any Party to act as an agent, servant or employee for any other
Party for any purpose whatsoever except as explicitly set forth in this
Agreement. In their relations with each other under this Agreement, the Parties
shall not be considered fiduciaries, except as expressly provided in Sections
7.4(D) and 12.7.
13.2 Tax. Each Party shall be responsible for reporting and discharging its
----
own tax measured by the income of the Party and the satisfaction of such Party's
share of all contract obligations under the Contract and under this Agreement.
Each Party shall protect, defend and indemnify each other Party from any and all
loss, cost or liability arising from the indemnifying Party's failure to report
and discharge such taxes or satisfy such obligations. The Parties intend that
all income and all tax benefits (including, but not limited to, deductions,
depreciation, credits and capitalization) with respect to the expenditures made
by the Parties hereunder will be allocated by the Government tax authorities to
the Parties based on the share of each tax item actually received or borne by
each Party. If such allocation is not accomplished due to the application of
the laws and regulations of the Government or other Government action, the
Parties shall attempt to adopt mutually agreeable arrangements that will allow
the Parties to achieve the financial results intended. Operator shall provide
each Party, in a timely manner, with such information with respect to Joint
Operations as such Party may reasonably request for preparation of its tax
returns or responding to any audit or other tax proceeding.
13.3 United States Tax Election.
------------------------------
(A) If for United States federal income tax purposes, this Agreement
and the operations under this Agreement are regarded as a partnership (and if
the Parties have not agreed to form a tax partnership), the Parties elect to be
excluded from the application of all of the provisions of Subchapter "K",
Chapter 1, Subtitle "A" of the United States Internal Revenue Code of 1986, as
amended (the "Code") as permitted and authorized by Section 761(a) of the Code
and the regulations promulgated under the Code. There being no U.S Party at the
time of the execution of this Agreement, no Party is designated as the tax
matters party. Should any person become a Party to this agreement at a future
date and should that person be a U.S. Party (or should any current Party become
a U.S. Party), such person may elect, to the extent required by Section
6231(a)(7) of the Code, to be designated as the tax matters party by giving
written notice to the other Parties to the Agreement. Such person shall remain
the tax matters party as long as it is a Party to the agreement and is
authorized and directed to execute and file for each U.S. Party such evidence of
this election as may be required by the Internal Revenue Service, including
specifically, but not by way of limitation, all of the returns, statements, and
the data required by United States Treasury Regulations Section 1.761-2 and
1.6031-1(d)(2), and shall provide a copy thereof to each U.S. Party. Should
there be any requirement that any U.S. Party give further evidence of this
election, each U.S. Party shall execute such documents and furnish such other
evidence as may be required by the Internal Revenue Service or as may be
necessary to evidence this election.
(B) No U.S. Party shall give any notice or take any other action
inconsistent with the election made above. If any income tax laws of any state
or other political subdivision of the United States or any future income tax
laws of the United States or any such political subdivision contain provisions
similar to those in Subchapter "K," Chapter 1, Subtitle "A" of the United States
Internal Revenue Code of 1986, under which an election similar to that provided
by Section 761 of the Code is permitted, the Parties shall make such election as
may be permitted or required by such laws. In making the foregoing election,
each U.S. Party states that the income derived by it from operations under this
Agreement can be adequately determined without the computation of partnership
taxable income.
(C) For the purposes of this Article 13, "U.S. Party" shall mean any
Party, which is subject to the income tax law of the United States of America in
respect of operations under this Agreement.
(D) No activity shall be conducted under this Agreement that would
cause any Party that is not a U.S. Person (within the meaning of Section
7701(a)(30) of the Code) to be deemed to be engaged in a trade or business
within the United States of America under applicable tax laws and regulations.
(E) A Party which is not a U.S. Party shall not be required to do any
act or execute any instrument which might subject it to the taxation
jurisdiction of the United States of America.
ARTICLE 14
----------
CONFIDENTIAL INFORMATION -
PROPRIETARY TECHNOLOGY
14.1 Confidential Information.
--------------------------
(A) Subject to the provisions of the Contract, the Parties agree that
all information and data acquired or obtained by any Party in respect of Joint
Operations shall be considered confidential and shall be kept confidential and
not be disclosed during the term of the Contract to any person or entity not a
Party to this Agreement, except:
(1) To an Affiliate, provided such Affiliate maintains confidentiality as
provided in this Article 14;
(2) To a Government agency or other entity when required by the Contract;
(3) To the extent such data and information is required to be furnished
in compliance with any Applicable Laws, or pursuant to any legal proceedings or
because of any order of any court binding upon a Party;
(4) Subject to Section 14.1(B), to potential contractors, insurers,
consultants and attorneys employed by any Party where disclosure of such data or
information is essential to such contractor's, insurer's or consultant's or
attorney's work;
(5) Subject to Section 14.1(B), to a bona fide prospective transferee
of a Party's Participating Interest (including an entity with whom a Party or
its Affiliates is conducting bona fide negotiations directed toward a merger,
consolidation or the sale of a majority of its or an Affiliate's shares);
(6) Subject to Section 14.1(B), to a bank or other financial
institution to the extent appropriate to a Party arranging for funding;
(7) To the extent such data and information must be disclosed pursuant
to any rules or requirements of any government or stock exchange having
jurisdiction over such Party, or its Affiliates;
(8) To its respective employees and attorneys for the purposes of Joint
Operations, subject to each Party taking customary precautions to ensure such
data and information is kept confidential; and
(9) Any data or information which, through no fault of a Party, becomes
a part of the public domain.
(B) Disclosure as pursuant to Sections 14.1(A)(4), (5), and (6) shall
not be made unless prior to such disclosure the disclosing Party has obtained a
written undertaking from the recipient party to keep the data and information
strictly confidential and not to use or disclose the data and information except
for the express purpose for which disclosure is to be made.
14.2 Continuing Obligations. Any Party ceasing to own a Participating
------------------------
Interest during the term of this Agreement shall nonetheless remain bound by the
obligations of confidentiality in Section 14.1 and any disputes shall be
resolved in accordance with Article 17.
14.3 Proprietary Technology. Nothing in this Agreement shall require a
------------------------
Party to divulge proprietary technology to the other Parties; provided that
where the cost of development of proprietary technology has been charged to the
Joint Account, such proprietary technology shall be disclosed to all Parties
bearing a portion of such cost and may be used by such Party or its Affiliates
in other operations.
14.4 Trades. Notwithstanding the foregoing provisions of this Article 14,
-------
Operator may, with approval of the Operating Committee, make well trades and
data trades for the benefit of the Parties who participated in the cost of the
data that was traded. Operator shall cause any third party to such trade to
enter into an undertaking to keep the traded data confidential.
ARTICLE 15
----------
FORCE MAJEURE
15.1 Obligations. If as a result of Force Majeure any Party is rendered
------------
unable, wholly or in part, to carry out its obligations under this Agreement,
other than the obligation to pay any amounts due or to furnish security, then
the obligations of the Party giving such notice, so far as and to the extent
that the obligations are affected by such Force Majeure, shall be suspended
during the continuance of any inability so caused and for such reasonable period
thereafter as may be necessary for the Party to put itself in the same position
that it occupied prior to the Force Majeure, but for no longer period. The Party
claiming Force Majeure shall notify the other Parties of the Force Majeure
within a reasonable time after the occurrence of the facts relied on and shall
keep all Parties informed of all significant developments. Such notice shall
give reasonably full particulars of the Force Majeure, and also estimate the
period of time which the Party will probably require to remedy the Force
Majeure. The affected Party shall use all reasonable diligence to remove or
overcome the Force Majeure situation as quickly as possible in an economic
manner, but shall not be obligated to settle any labor dispute except on terms
acceptable to it and all such disputes shall be handled within the sole
discretion of the affected Party.
15.2 Definition of Force Majeure. For the purposes of this Agreement,
-------------------------------
"Force Majeure" shall mean circumstances beyond the reasonable control of the
Party concerned, including those circumstances and limitations to such
circumstances described in Section 17.1 of the Contract.
ARTICLE 16
----------
NOTICES
Except as otherwise specifically provided, all notices authorized or required
between the Parties by any of the provisions of this Agreement, shall be in
writing, in English and delivered in person or by courier service or by any
electronic means of transmitting written communications which provides written
confirmation of complete transmission, and addressed to such Parties as
designated below. Oral communication does not constitute notice for purposes of
this Agreement, and telephone numbers for the Parties are listed below as a
matter of convenience only and for purposes of Section 7.3(A). The originating
notice given under any provision of this Agreement shall be deemed delivered
only when received by the Party to whom such notice is directed, and the time
for such Party to deliver any notice in response to such originating notice
shall run from the date the originating notice is received. The second or any
responsive notice shall be deemed delivered when received. "Received" for
purposes of this Article 16 shall mean actual delivery of the notice to the
address of the Party to be notified specified in accordance with this Article
16. Each Party shall have the right to change its address at any time and/or
designate that copies of all such notices be directed to another person at
another address, by giving written notice thereof to all other Parties.
Triton Equatorial Guinea, Inc.
c/o Triton Energy
6688 North Central Expressway, Suite 1400
Dallas, Texas 75206
United States
Attention: Mr. Brian Maxted
Telecopy: 1-(214) 365-9011
Telephone: 1-(214) 696-7554
Energy Africa Equatorial Guinea Limited
5 Parliament Square
Castletown
Isle of Man IM9 1LA
Attention: Company Secretary
Telecopy: 011-44-1624827301
Telephone: 011-44-1624827310
with copy to:
Energy Africa Equatorial Guinea Limited
c/o Energy Africa Limited
21st Floor, Metlife Centre
7 Coen Steytler Avenue
P. O. Box 5544
Cape Town 8001
Republic of South Africa
Attention: Mr. Adrian Nel
Telecopy: 011-27-21-400-7660
Telephone: 011-27-21-400-7600
Republic of Equatorial Guinea
c/o Ministry of Mines & Energy
Malabo Bioko Norte
Republic of Equatorial Guinea
Attention: Minister
Telecopy: 011-(240)-9-3353
Telephone: 011-(240)-9-3567, -3405, - 2086
ARTICLE 17
----------
GOVERNING LAW AND DISPUTE RESOLUTION
17.1 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED,
---------------
INTERPRETED AND APPLIED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, USA,
EXCLUDING ANY CHOICE OF LAW RULES WHICH WOULD REQUIRE THE APPLICATION OF THE
LAWS OF ANOTHER JURISDICTION.
17.2 Dispute Resolution.
--------------------
(A) Any dispute, controversy or claim of any and every kind or type,
whether based on contract, tort, statute, regulation or otherwise arising out of
or in relation to or in connection with this Agreement, the relationship of the
Parties, the obligations of the Parties, or the operations carried out under
this Agreement, including without limitation any dispute as to the existence,
construction, validity, interpretation, negotiation, performance,
non-performance, enforceability or breach of this Agreement, that cannot be
settled within thirty (30) Days after written notice from one Party to the
others, shall be exclusively and finally settled by binding arbitration, it
being the intention of the Parties that this is a broad form of arbitration
agreement designed to encompass all possible disputes among the Parties relating
to the project that is the subject of the Parties' agreement.
(B) The arbitration shall be conducted and finally settled by a three
(3) person arbitration tribunal. Each side shall appoint an arbitrator of its
choice within thirty (30) Days of the end of the period in Section 17.2(A). The
Party-appointed arbitrators shall in turn appoint a presiding arbitrator of the
tribunal, who is an attorney (at the time is admitted to practice law in the
State of Texas) and is familiar with the international petroleum practices and
agreements, within thirty (30) Days following appointment of both
Party-appointed arbitrators. If the Party-appointed arbitrators cannot reach
agreement on a presiding arbitrator of the tribunal and/or one Party refuses to
appoint its Party-appointed arbitrator within said thirty (30) Day period, the
appointing authority for the implementation of such procedure shall be the Vice
President or the President of the London Court of International Arbitration
("LCIA") who shall appoint an independent arbitrator who does not have any
financial interest in the dispute, controversy or claim and who meets the legal
qualifications above. All decisions and awards by the arbitration tribunal
shall be made by majority vote. The Arbitration Rules of LCIA as amended from
time to time (the "LCIA Rules") shall govern the arbitration in all respects.
(C) If there are only two (2) parties to a dispute or if the parties
can be conveniently grouped together into two (2) groups based upon a common
interest and common position in the dispute, then each party or group shall
appoint one arbitrator, within thirty (30) Days of receipt of notice of the
commencement of the arbitration, or within thirty (30) Days of the receipt of
notice from the LCIA of its grouping of the parties to the dispute, and the two
(2) arbitrators so selected shall select the third, and presiding, arbitrator
within thirty (30) Days after the later of the two (2) arbitrators is appointed
by the parties.
If there are three (3) Parties to a dispute who cannot be grouped
together based on a common interest and common position in the dispute, or if
there are three groups of Parties, then each Party or group shall appoint one
arbitrator within thirty (30) Days of receipt of notice of the commencement of
the arbitration, or within thirty (30) Days of the receipt of notice from the
LCIA of its grouping of the Parties to said dispute, and these three (3)
arbitrators shall constitute the arbitral tribunal and shall select one of their
members to be the presiding arbitrator.
If there are four (4) or more Parties who cannot be grouped together
based on a common interest and common position in the dispute, or if there are
four (4) groups of Parties or more, then the LCIA shall appoint all three (3)
arbitrators taking into account the qualifications agreed herein, and these
three (3) arbitrators shall select one of their members to be the presiding
arbitrator.
If the Parties cannot agree within thirty (30) Days after the
commencement of the arbitration that they will be grouped together, or how they
will be grouped, for purposes of the appointment of an arbitrator, then any
Party may request that the LCIA decide whether, and how, to group the Parties
for the purposes of appointing an arbitrator, and such decision will be binding
on the Parties.
(D) Unless otherwise expressly agreed in writing by the Parties to the
arbitration proceedings:
(1) The arbitration proceedings shall be held in London, England, and
shall be administered by the LCIA;
(2) The arbitration proceedings shall be conducted in the English
language and the arbitrator(s) shall be fluent in the English language;
(3) The arbitrator or arbitral tribunal, as the case may be, shall be and
remain at all times wholly independent and impartial;
(4) The arbitration proceedings shall be conducted under LCIA Rules, as
amended from time to time;
(5) Any procedural issues not determined under the arbitral rules
selected pursuant to Section 17.2(C) shall be determined by the law of the
place of arbitration;
(6) The costs of the arbitration proceedings (including attorneys' fees
and costs) shall be borne in the manner determined by the arbitral tribunal;
(7) The decision of the majority of the arbitrators shall be reduced to
writing; final and binding without the right of appeal; the sole and exclusive
remedy regarding any claims, counterclaims, issues or accountings presented to
the arbitrators; made and promptly paid in U.S. dollars free of any deduction or
offset; and any costs or fees incident to enforcing the award, shall to the
maximum extent permitted by law, be charged against the Party resisting such
enforcement;
(8) Special Damages shall not be allowed except those payable to third
parties that are allocated by the arbitral award;
(9) The award shall include interest from the date of any breach or
violation of this Agreement, as determined by the arbitral award, and from the
date of the award until paid in full, at the Agreed Interest Rate;
(10) Judgment upon the award may be entered in any court having
jurisdiction over the person or the assets of the party owing the judgment or
application may be made to such court for a judicial acceptance of the award and
an order of enforcement, as the case may be;
(11) If the Parties to this Agreement or others who are bound to this
or another similar arbitration agreement initiate multiple arbitration
proceedings, the subject matters of which are related by common questions of law
or fact and which could result in conflicting awards or obligations, then the
Parties hereby agree that all such proceedings may be consolidated into a single
arbitral proceeding;
(12) For purposes of allowing the arbitration provided in this Article
17, the enforcement and execution of any arbitration decision and award, and the
issuance of any attachment or other interim remedy, any governmental body or
agency which is a Party to this Agreement agrees to waive all sovereign immunity
by whatever name or title with respect to disputes, controversies or claims
arising out of or in relation to or in connection with this Agreement or the
operations carried out under this Agreement; and
(13) The arbitration shall proceed in the absence of a party who, after
due notice, fails to answer or appear. An award shall not be made solely on the
default of a party, but the arbitrator(s) shall require the party who is present
to submit such evidence as the arbitrator(s) may determine is reasonably
required to make an award.
ARTICLE 18
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GENERAL PROVISIONS
18.1 Conflicts of Interest.
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(A) Each Party undertakes that it shall avoid any conflict of interest
between its own interests (including the interests of Affiliates) and the
interests of the other Parties in dealing with suppliers, customers and all
other organizations or individuals doing or seeking to do business with the
Parties in connection with activities contemplated under this Agreement.
(B) The provisions of the preceding paragraph shall not apply to:
(1) A Party's performance which is in accordance with the local
preference laws or policies of the Government; or
(2) A Party's acquisition of products or services from an Affiliate,
or the sale thereof to an Affiliate, made in accordance with rules and
procedures established by the Operating Committee.
18.2 Warranties As To No Payments, Gifts and Loans. Each of the Parties
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warrants that neither it nor its Affiliates has made or will make with respect
to the matters provided for hereunder, any offer, payment, promise to pay or
authorization of the payment of any money, or any offer, gift, promise to give
or authorization of the giving of anything of value, directly or indirectly, to
or for the use of benefit of any official or employee of the Government or to or
for the use of benefit of any political party, official, or candidate for the
purpose of (i) influencing an official act or decision of the person; (ii)
inducing that person to do or omit to do any act in violation of his or her
lawful duty; or (iii) inducing that person to use his or her influence with the
Government to affect any Government decision unless such offer, payment, gift,
promise or authorization is authorized by the written laws or regulations of the
Republic of Equatorial Guinea. Each of the Parties further warrants that
neither it nor its Affiliates has made or will make any such offer, payment,
gift, promise or authorization to or for the use or benefit of any other person
if the Party knows, has a firm belief, or is aware that there is a high
probability that the other person would use such offer, payment, gift, promise
or authorization for any of the purposes described in the preceding sentence.
The foregoing warranties do not apply to any facilitating or expediting payment
to secure the performance of routine Government action. Routine Government
action, for purposes of this Section 18.2, shall not include, among other
things, Government action regarding the terms, assignment, award or continuation
of the Contract. Each Party shall respond promptly and in reasonable detail, to
any notice from any other Party or its auditors pertaining to the above stated
warranty and representation and shall furnish documentary support for such
response upon request for such other Party.
18.3 Public Announcements.
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(A) Operator shall be responsible for the preparation and release of
all public announcements and statements regarding this Agreement or the Joint
Operations; provided that, no public announcement or statement shall be issued
or made unless prior to its release all the Parties have been furnished with a
copy of such statement or announcement and the approval of at least two (2)
non-affiliated Parties holding fifty percent (50%), or more, of the
Participating Interests has been obtained. Where a public announcement or
statement becomes necessary or desirable because of danger to or loss of life,
damage to property or pollution as a result of activities arising under this
Agreement, Operator is authorized to issue and make such announcement or
statement without prior approval of the Parties, but shall promptly furnish all
the Parties with a copy of such announcement or statement.
(B) If a Party wishes to issue or make any public announcement or
statement regarding this Agreement or the Joint Operations, it shall not do so
unless prior to its release, such Party furnishes all the Parties with a copy of
such announcement or statement, and obtains the approval of at least two (2)
non-affiliated Parties holding fifty percent (50%) or more of the Participating
Interests; provided that, notwithstanding any failure to obtain such approval,
no Party shall be prohibited from issuing or making any such public announcement
or statement if it is necessary to do so in order to comply with the applicable
laws, rules or regulations of any government, legal proceedings or stock
exchange having jurisdiction over such Party as set forth in Sections 14.1(A)(3)
and (7).
(C) Notwithstanding Section 18.3(A) and Section 18.3(B), any public
announcement or statement regarding this Agreement or the Joint Operations shall
be in accordance with the terms of the Contract.
18.4 Successors and Assigns. Subject to the limitations on transfer
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contained in Article 11 and the Assignment, this Agreement shall inure to the
benefit of and be binding upon the permitted successors and assigns of the
Parties.
18.5 Waiver. No waiver by any Party of any one or more defaults by another
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Party in the performance of this Agreement shall operate or be construed as a
waiver of any future default or defaults by the same Party, whether of a like or
of a different character. Except as expressly provided in this Agreement no
Party shall be deemed to have waived, released or modified any of its rights
under this Agreement unless such Party has expressly stated, in writing, that it
does waive, release or modify such right.
18.6 Severance of Invalid Provisions. If and for so long as any provision
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of this Agreement shall be deemed to be judged invalid for any reason
whatsoever, such invalidity shall not affect the validity or operation of any
other provision of this Agreement except only so far as shall be necessary to
give effect to the construction of such invalidity, and any such invalid
provision shall be deemed severed from this Agreement without affecting the
validity of the balance of this Agreement.
18.7 Contract Translation. The Parties agree that the English version of
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the Contract attached hereto as Exhibit B shall be, as among the Parties, the
official version of the Contract for purposes of applying this Agreement.
18.8 Construction. In construing this Agreement:
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(A) No consideration shall be given to the captions of the Articles,
Sections, or Subsections which are inserted for convenience in locating the
provisions of this Agreement and not as an aid in its construction;
(B) No consideration shall be given to the fact or presumption that one
Party had a greater or lesser hand in drafting this Agreement;
(C) Examples shall not be construed to limit, expressly or by
implication, the matter they illustrate;
(D) The word "includes" and its derivatives means "includes, but is
not limited to" and corresponding derivative expressions;
(E) A defined term has its defined meaning throughout this Agreement
and each exhibit, attachment, and schedule to this Agreement, regardless of
whether it appears before or after the place where it is defined;
(F) The plural shall be deemed to include the singular, and vice versa;
(G) Each gender shall be deemed to include the other genders;
(H) Each exhibit, attachment, and schedule to this Agreement is a
part of this Agreement, but if there is any conflict or inconsistency between
the main body of this Agreement and any exhibit, attachment, or schedule, the
provisions of the main body of this Agreement shall prevail;
(I) The terms "herein," "hereunder," "hereof," "hereby," and similar
termsrefer to this Agreement as a whole and not to an article, section or
subsection unless expressly otherwise limited; and
(J) Each reference to an Article, Section or Subsection refers to an
Article, Section or Subsection of this Agreement unless expressly otherwise
provided.
18.9 Execution by Facsimile. The Parties agree that the signature of a Party
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to this Agreement transmitted by facsimile machine shall be accepted as an
original signature. A Party shall promptly furnish an original signature page
of this Agreement if requested by another Party.
18.10 Entirety. This Agreement is the entire agreement of the Parties and
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supersedes all prior understandings and negotiations of the Parties. Each Party
hereto does hereby expressly warrant and represent that no promise nor
agreement, which is not herein expressed has been made to it in connection with
this Agreement and that neither Party is relying upon any statement nor
representation of any employee or agent of the other Parties other than as
provided herein. Each party is relying upon its own judgment and has been
represented by its own legal counsel in connection with the execution and
understanding of the legal consequences hereof.
18.11 Modification. Except as provided in Sections 10.2(B) and 18.6, there
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shall be no modification of this Agreement or the Contract except by written
consent of all Parties.
IN WITNESS of their agreement Triton and Energy Africa have caused its duly
authorized representative to sign this instrument to be effective as of the
Effective Date.
TRITON EQUATORIAL GUINEA, INC.
By: ______________________________________
Name:
Title:
ENERGY AFRICA EQUATORIAL GUINEA LIMITED
By: ______________________________________
Name:
Title:
