UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 7, 1997 (May 27, 1997)
ENVIRONMENTAL REMEDIATION HOLDING CORP.
(Exact name of registrant as specified in its charter)
Colorado 33-21567 88-0218499
(State or other jurisdiction (Commission (IRS Employer
of incorporation) file number) Identification No.)
420 Jericho Parkway, Suite 321
Jericho, NY 11753
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 433-4730
<PAGE>
Item 5. Other Events
Memorandum of Agreement Made Between The Government of the Democratic Republic
of Sao Tome and Principe and Environmental Redediation Holding Corp. a U.S.
public company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Environmental Remediation Holding Corp.
(Registrant)
Dated: July 7, 1997
By: /s/Noreen G. Wilson
Noreen G. Wilson
Vice President
AGREEMENT
MEMORANDUM OF AGREEMENT MADE BETWEEN
The Government of the Democratic Republic of Sao Tome and Principe
and
Environmental Remediation Holding Corp.
(a U.S. public company registered in the State of Colorado)
and
Procura Financial Consultants, c.c.
(a closed corporation registered in the Republic of South Africa)
<PAGE>
Oil and Gas Agreement page Two
1. INTERPRETATION
1.1 In this Agreement the following acronyms, words and expressions shall,
where context permits, be deemed to have the following meanings:
1.1.1 "ERHC" means Environmental Remediation Holding Corp.,
1.1.2 "PFC" means Procura Financial Services c.c.
1.1.3 "Agreement" means this Agreement
1.1.4 "Dollar" means United States of America Dollars
1.1.5 "DRSTP" means the Democratic Republic of Sao Tome and Principe
1.1.6 "Effective Date" means the day when this Agreement is signed
1.1.7. "Government" means the Government of DRSTP
1.2 Words importing the singular meaning include, unless the context
otherwise demands, the plural meaning and visa versa.
1.3 The clause headings in this Agreement are for convenience and ease of
reference and shall not affect its construction or interpretation.
1.4 Reference to clauses and sub-clauses are to clauses and sub-clauses of
the Agreement unless the context clearly indicates otherwise.
2. SIGNING OF THE AGREEMENT
2.1 The Government herewith grants ERHC/PFC the right to perform a full
and complete evaluation and feasibility study of the oil, gas and
mineral reserves located within the territory of Sao Tome and Principe
and its surrounding waters. The Government will cooperate fully and
grant authority to ERHC/PFC to perform all aspects of said evaluation
and study, with all costs to be borne by ERHC/PFC but all information
to be shared with the Government. and further that,
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Oil and Gas Agreement page Three
2.1.1 In accordance with the terms and conditions of this Agreement the
Government agrees to grant certain oil concessions to ERHC/PFC after
review by all Parties to this Agreement of the Resulting data.
2.1.2 ERHC/PFC upon the granting of the oil concession will enter into a
joint venture agreement with the Government to create an oil company
for the benefit of all the parties.
2.1.3 The Government will grant ERHC/PFC the authority to enter into
negotiation on behalf of the Government with major oil companies
located in the United States and abroad for the oil leases rights in
DRSTP. The Government will have the right to have up to three
representatives at any negotiations.
2.1.4 The Government will have final approval of all oil concessions and
leases negotiated by ERHC/PFC under this Agreement.
2.2 This Agreement shall be irrevocable, subject only to the suspensive
conditions set out in paragraph 2.4 below.
2.3 This Agreement is subject to the following suspensive conditions
expressly set out in paragraph 2.4 below:
2.4 The coming into effect of this Agreement is subject to the suspensive
conditions that ERHC/PFC shall within forty-five ( 45 ) days of the
effective date of this Agreement: transfer the sum of five ($5,000,000)
million dollars U.S. to the Government in accordance with the terms and
conditions set forth. ERHC/PFC shall also within forty-five (45)
days of the effective date of this Agreement will open offices, begin
work on the feasibility studies and evaluations necessary to determine
the best location of the oil, gas and minerals on DRSTP
2.5 The Government hereby agrees that the statutory promoter for the oil
gas and mineral concessions/leases shall be ERHC/PFC as detailed in
section 2.6 below.
2.6 It is agreed that statutory rights and obligations of ERHC/PFC as it
applies to the Plan of Action for the oil, gas and mineral concessions
shall be as follows;
2.6.1 PLAN OF ACTION PHASE I
a). $10,000,000 USD will be available for Phase I within
forty-five (45) days of the effective date of this Agreement;
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Oil and Gas Agreement page Four
b). ERHC/PFC will use USD $5,000,000 for Feasibility Studies,
Offices and Staff;
c). USD $5 000,000 shall be set aside and released to the
Government upon the funding of ERHC/PFC within 45 days from
the signing of this agreement between the Government and
ERHC\PFC.
2.6.2. ERHC\PFC will send a team of U.S.A. oil experts to Sao Tome &
Principe to evaluate and determine the most appropriate
locations for the feasibility studies.
2.6.3. ERHC/PFC will make available and share all information and
data gathered upon completion of the studies.
2.6.4 PLAN OF ACTION PHASE II (60 - 210 days)
a) ERHC\PFC will have up to one hundred million USD
(USD $100,000,000) available for the development of the oil.
b) The feasibility study, which shall be available to the
Government, shall include but not limited to the following
reports :
. SEISMIC INTERACTION
. SEDIMENTOLOGY AND RESERVE CHARACTERISTICS
. BIOSTATGRAPHY
. GEOCHEMISTRY
. PETROGRAPHIES AND DIAGNOSTICS
2.6.5 PLAN OF ACTION PHASE III (210 - 330 days)
a). ERHC\PFC will determine the best location to drill the first
test well after review and evaluation of the feasibility data.
b) ERHC\PFC estimates that they will drill two( 2) test wells and
two (2 ) prove-up wells at a minimum cost of $5 000 000,00
USD per well.
c). The Government and ERHC\PFC will begin working on a joint
venture between the parties settling issues as to the
structure of the joint venture and the location of the
Government and ERHC\PFC oil concessions.
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Oil and Gas Agreement page Five
d) The Government and ERHC/PFC will design the structure, terms
and conditions of the concessions which will be offered to
other oil companies.
e). ERHC will design an Environmental program, including but not
limited to the policies and procedures, which will be followed
by any oil company to which the Government grants, sell or
leases to any oil concession. These conditions and procedures
will ensure the safety of the Government and the people's land
and will meet or exceed international environmental standards.
In addition, each oil or gas company receiving a concession
will be required to begin drilling within certain time frames
to be established.
2.6.6 PLAN OF ACTION PHASE IV
a) Begin oil operations and drilling additional wells to increase
production; and;
b) Complete negotiation with major oil companies.
3. JOINT VENTURE
3.1.1 ERHC/PFC shall perform the following upon completion of the
feasibility studies
a) ERHC/PFC shall share all data complied from the feasibility
studies with the Government and develop the concession
boundaries.
b) ERHC/PFC will assist and represent DRSTP in its negotiations
with major oil companies wishing to obtain a lease(s) and
develop oil and gas production.
c) ERHC/PFC and the Government will develop and monitor an
Environmental Program prior to the granting of any concession
to major oil companies to protect against environmental damage
d) ERHC/PFC will monitor the concessions granted to assure the
oil fields are developed and not held by a company for future
development only.
e) The Government and ERHC/ PFC will retain the best oil and gas
concession for themselves and enter into a joint venture for
the development of such concessions as set forth in paragraph
3.2 below.
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Oil and Gas Agreement page Six
f) ERHC/PFC will negotiate on behalf of DRSTP with the major oil
companies the remaining concessions to be leased and developed
and will retain a 5% override to be paid by the oil companies
for ERHC/PFC services. The percentage of each lease retained
by DRSTP will be negotiated on a concession by concession
basis and approved by DRSTP.
3.2 OUTLINE OF THE JOINT VENTURE OIL AND GAS COMPANY
3.2.1 ERHC/PFC will enter into a joint venture with DRSTP for the
establishment of an oil company as follows:
a) DRSTP and ERHC/PFC shall retain the bes t concessions for the
development of an oil company.
b) DRSTP and ERHC/PFC will retain a minimum of four concessions
for the development of an oil company. (A standard land
concession is 640 acres and standard oil lease off shore is
5000 acres.)
c) ERHC/PFC shall provide all necessary funding for the
development of said concessions. The Government of DRSTP will
not be required to obtain or guarantee any funding for this
Project.
d) The joint venture partners will each receive 40% of the
profits from production (ERHC/PFC 40% DRSTP 40%) with 20% of
production being set aside for repayment of ERHC/PFC
investment, overhead and management costs.
e) ERHC/PFC agrees to set aside one ($1.00) dollars per barrel
sold for the education of DRSTP students to be trained in the
United States in the oil industry or any other such
educational area as designated by the Government. As engineers
and managers are trained, ERHC/PFC will phase out ERHC/PFC
personal and the Government will operate the oil company at
the end of this Agreement. This set aside for education will
be paid by ERHC/PFC only.
4. TAXES
4.1 ERHC/PFC shall be personally excluded from any and all taxes, duties
and revenue impositions of what ever nature while operating for and on
behalf of or in conjunction
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Oil and Gas Agreement page Seven
with the Government of DRSTP, with regard to the development and
economic activates conducted within in the scope and time frame of this
Agreement and Joint Venture.
5. ERHC/PFC is authorized to promulgate rules and regulations assuring the
ordered, secure and harmonious development and functioning of the oil,
gas and mineral concessions the content of which shall be subject to
prior Government approval.
6. DURATION OF AGREEMENT
6.1 The duration of this Agreement, shall be for twenty-five ( 25 ) years
calculated from the effective date. The duration of the Joint Venture
and ERHC/PFC management shall be for twenty-five years.
6.2 This Agreement at the option of the Government of DRSTP, may be
repetitively renewable for periods of ten (10) years, subject to
continued adequate performance in terms of this Agreement. It is agreed
that Government will indicate its intent with regard to possible
renewal, at least three (3) calendar years before expiration of any
contract term.
7. CALCULATION OF THE TIME LAPSED
7.1 The running of all time periods agreed and to in this Agreement will be
interrupted and suspended so as not to jeopardize the interests of
ERHC/PFC, whenever the Government or any of its agencies is in default
or behind schedule with regard to obligations it must legally meet, and
when thereby it is made legally impossible or unduly risky for ERHC/PFC
to perform as agreed.
8. CANCELLATION OF CONCESSION CONVENTION THROUGH NON-PERFORMANCE
8.1 Should ERHC/PFC not have substantially and constructively commenced
with the development of the oil, gas and mineral reserve properties in
accordance with General Principals set forth in this Agreement and its
time-table does not provide justification for such non-performance,
then the Agreement may be declared by the Government to have
automatically lapsed, in which case ERHC/PFC shall forfeit to the
Government all rights to interest in and benefit from this Agreement.
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Oil and Gas Agreement page Eight
8.2 If the Government determines that ERHC/PFC has breached its Agreement,
ERHC/PFC must be notified in writing and presented to the
administration of ERHC/PFC with the terms and conditions of the breach.
Thereafter ERHC/PFC shall have ninety (90) days to cure the breech
prior to the termination of the Agreement.
9. UNDERTAKING BY THE GOVERNMENT
9.1 The Government undertakes to make available to ERHC/PFC within fourteen
days of being requested in writing any map or data in its possession
pertaining to including but not limited to geography, topography, oil
studies, gas studies, mineral studies and maritime studies which may be
utilized in the planning of its development and for the studies to be
undertaken. ERHC/PFC shall undertakes to treat such information and
data with utmost confidentiality and not to communicate it with third
parties without prior approval.
9.2 The Government undertakes to waive for and on behalf of ERHC/PFC its
successors and or assigns such goods, all duties and taxes with
regard to the importation and utilization of essential materials,
equipment and services including persons e mployed by ERHC/PFC (non
DRSTP citizens) required for the studies and development to be
undertaken concerning the establishment of the oil, gas and mineral
reserves during the term of this Agreement.
9.3 The Government undertakes to expeditiously pass legislation in respect
to this Agreemen with regard to the study and development of the oil,
gas and mineral industries.
10. AGREEMENT WITH REGARD TO THE MANAGEMENT OF THIS AGREEMENT
10.1 As regards administration of business for the joint venture and any
other contract or agreement with the Government.
a) The currency of record shall be the United States Dollar
b) No restriction shall apply with regard to the free
repatriation of funds generated from the Joint Venture of this
Agreement.
<PAGE>
Oil and Gas Agreement page Nine
c) The language of record shall be English and Portuguese.
d) The Rights to this Agreement stipulate that the only
commercial law applicable, shall be international commercial
practice ( the international lex mercatoria ) primarily as
codified by International Chamber of Commerce in Paris, and
that where deemed necessary because of lacunae in the
international lex mercatoria, the latter may be amplified by
reference to the commercial law of England. Furthermore the
parties stipulate that all disputes between the Government and
ERHC/PFC will not be receivable by any DRSTP court of law, but
must obligatorily be submitted for binding arbitration under
the rules of the International Chamber of Commerce of Paris.
11. INTERPRETATION OF THIS AGREEMENT AND RESOLUTION OF DISPUTE BETWEEN THE
GOVERNMENT, ERHC/PFC WITH REGARD TO ITS TERMS, CONTENT AND APPLICATION.
11.1 The Government, ERHC/PFC herewith irrevocably agree that any dispute,
controversy or claim arising out of or relating to this Agreement, or
the breach, termination or invalidity thereof, shall be settled by
arbitration in accordance with the UNCITRAL Arbitration Rules at
present in force. The appointing authority for such arbitration shall
be the President of the International Chamber of Commerce in Paris.
The number of arbitrators shall be one. The place of arbitration shall
be Geneva, Switzerland. The language to be used in arbitral proceedings
shall be English and Portuguese.
11.2 All parties irrevocably bind themselves to accept the decision of such
arbitration as final, and to faithfully implement it.
11.3 Wherever in this agreement specific provision is made for the
application of the law of the DRSTP, such law shall govern; otherwise,
this Agreement shall in all respects be governed by and interpreted in
accordance with generally recognized principles of international law.
11.4 All notices and correspondences of an official nature shall be received
by the Government at the office of the Minister of Social Equipment
and Environment in Sao Tome City, and ERHC/PFC at the law office of
James A Griffin, Esq. 420 Jericho Turnpike Suite 321, Jericho New York
USA 11753. and Procura Financial Consultants c.c. at P.O. Box 73192
Lynnwood Ridge 0040 South Africa. Such notices and correspondence shall
be valid if delivered by hand, in writing and or against an authorized
signature of receipt.
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Oil and Gas Agreement page Ten
11.5 This Agreement records the entire agreement between the parties. No
addition, alteration or deletion shall be valid unless reduced to
writing and signed by both parties in front of competent witnesses.
11.6 The parties hereby warrant acknowledge and affirm that they are
authorized by their respective governing bodies, ministries, corporate
and or business entities to enter into and execute this Agreement.
THUS DONE AND SIGNED AT SAO TOME CITY ON THIS 27th DAY OF MAY, 1997
/s/Raul Braganca Neyo [SEALED]
PRIME MINISTER
For and on behalf of the Government of the Democratic Republic of Sao Tome and
Principe.
THUS DONE AND SIGNED AT SAO TOME CITY ON THIS 27th DAY OF MAY, 1997
/s/ Noreen G. Wilson
Noreen G. Wilson Vice President
For and on behalf of Environmental Remediation Holding Corp.
/s/ Barend J. Hofmer
Barend J. Hofmeyr Director
For and on behalf of Procura Financial Consultants c.c.
