Common use of Operating Committee Clause in Contracts

Operating Committee. 7.1 The Operating Committee shall be responsible for the supervision of the Petroleum Operations. The STATE and the CONTRACTOR shall each appoint one (1) full member and one (1) substitute member to the Operating Committee. The substitute members may not vote except in the absence of the full member. Within forty-five (45) Days of the Effective Date, the STATE and the CONTRACTOR shall each notify to the other Party, the name of its full member and the substitute member it has appointed to the Operating Committee. Any Party’s full member or substitute member may be replaced by said Party after having notified the other Party accordingly. Each Party may bring to the Operating Committee meetings, advisors or experts whose presence it considers desirable and which in any event shall be limited to five (5), unless the Parties agree beforehand on another number. Each full member, or, in the absence of a full member, its substitute member, shall be deemed duly authorised to represent and to bind the Party appointing him on any subject which is within the jurisdiction of the Operating Committee. Each entity comprising the CONTRACTOR may send an observer, who shall not have voting rights, to the meetings of the Operating Committee. 7.1.1 The CONTRACTOR shall be responsible for the drafting of the minutes of the meeting, including a record of the decisions made in the meeting, which shall be submitted to the Parties for approval at the end of the meeting. The minutes shall be submitted to the Parties for their comments and approval within fifteen (15) days following the holding of the Operating Committee meeting. 7.1.2 The Operating Committee shall meet at the request of a Party, but in any event, at least every six (6) months, by notification containing the desired agenda, the date, time and place of the planned meeting, sent by one Party to the other Party with at least fifteen (15) Days' prior written notice before the expected date of the meeting. Each Party shall have the right to add topics to the agenda by notifying the other Party at least seven (7) Days prior to the expected date of the meeting. No decision may be made at a meeting on a subject matter that was not written into the agenda for such meeting, unless all Parties shall otherwise unanimously agree thereto. The CONTRACTOR shall prepare all documents and pertinent data necessary to review the items on the agenda. 7.1.3 Each Party shall have one (1) vote on the Operating Committee. The Operating Committee may not validly deliberate unless each of the Parties is represented by a full member or by its substitute member. In the event that a member representing each Party is not present at the time of a meeting of the Operating Committee, the meeting of the Operating Committee shall be postponed to a date set within the next eight (8) Days. The representative who was present must notify the Parties of the new meeting date as well as the time and place where it will be held. 7.1.4 The Operating Committee shall be free, if necessary, to engage experts from time to time in order to carry out special tasks. 7.1.5 Notwithstanding the requirements in Article 7.1.2 above, in the event that a decision that falls within the jurisdiction of the Operating Committee is required while there is a rig standing by or for any other event that requires an immediate response or in which case delay results in significant expense, the Operating Committee may conduct its meeting and execute its vote by fax or email. 7.2 Subject to the provisions of Article 7.3 below, the Operating Committee: 7.2.1 Shall approve all Work Programmes and corresponding Budgets and all amendments that may be made thereto, and shall make certain that the insurance coverage of the Parties is consistent with generally accepted practices in the international petroleum industry and adequate with regard to risks incurred; 7.2.2 Shall approve the methods and procedures established by the Operator to be followed for the efficient conduct of the Petroleum Operations; 7.2.3 Shall have the right, and following the giving of reasonable prior written notice, to access the administrative offices and the work sites of the Petroleum Operations. Such visits, for which the dates and agenda are set by agreement with the Operator, which agreement cannot be withheld without valid reason, must not hamper the normal and safe conduct of Petroleum Operations and shall in any event be at the sole risk and expense of the represented Party(ies). 7.3 Subject to the provisions of this Article 7, all decisions of the Operating Committee shall be unanimous and shall bind the STATE and the CONTRACTOR. 7.3.1 If unanimity cannot be reached, the Operating Committee shall reconvene within fifteen (15) Days in order to settle the unresolved issue. This period may be shortened in case of an emergency. 7.3.2 Notwithstanding the foregoing, the decisions of the Operating Committee shall not require unanimity in the following cases: (i) The STATE shall not have the right to veto decisions or withhold approval pertaining to the Petroleum Operations conducted by the CONTRACTOR pertaining to an Exploration Authorisation, provided that the proposals are not considered to be contrary to current practices and operations in the international petroleum industry; (ii) Any decision pertaining to applications for granting, renewal or relinquishment of Exploration Authorisations, Exploitation Authorisations and Domestic Transportation Authorisations shall be made solely by the CONTRACTOR; (iii) The decision to appraise and/or develop a Discovery shall be the CONTRACTOR's decision alone; (iv) If unanimity cannot be reached on the adoption of the development and production plan and its corresponding Budget, the CONTRACTOR’s proposals shall be deemed to have been duly approved by the Operating Committee, subject to any Party’s right of recourse, at its own expense, to expertise pursuant to the provisions of Article 27.2 hereafter if the said Party believes that adjustments should be made to the development and production plan on matters pertaining to the environment, security, costs, planning or ultimate recovery or that the plan in question is not consistent with the current generally accepted practices in the international petroleum industry. In such case, and unless the Parties agree otherwise, the development and production plan and its corresponding Budget shall be made to conform to the expert’s conclusions and be deemed approved by the Parties. The expert’s expenses shall be considered Petroleum Costs.

Operating Committee. 7.1 The 4.1. As soon as possible after the date at which this Contract is coming into force, an Operating Committee shall be responsible for the supervision Committee, consisting of representatives of the Petroleum Operations. The STATE “Contracting Party” and the CONTRACTOR shall each appoint one (1) full member and one (1) substitute member to the Operating Committee. The substitute members may not vote except in the absence representatives of the full member. Within forty-five (45) Days of the Effective Date, the STATE and the CONTRACTOR shall each notify to the other Party, the name of its full member and the substitute member it has appointed to the Operating Committee. Any Party’s full member or substitute member may be replaced by said Party after having notified the other Party accordingly. Each Party may bring to the Operating Committee meetings, advisors or experts whose presence it considers desirable and which in any event shall be limited to five (5), unless the Parties agree beforehand on another number. Each full member, or, in the absence of a full member, its substitute member“DRC”, shall be deemed duly authorised to represent formed for the Permit. The “DRC” and to bind the Party appointing him on any subject which is within the jurisdiction “Contracting Party” shall each nominate three representatives for a period of two years. Representative of the Operating Committee“DRC” will come from the Ministry of Hydrocarbons. Each entity comprising The “Contracting Party” shall have the CONTRACTOR right to replace its representatives at any time, advising the “DRC” of the replacement. The “DRC” and the “Contracting Party” may send an observercause a reasonable number of their staff to participate, who shall not have without voting rightsright, to in the meetings of the Operating Committee. 7.1.1 The CONTRACTOR shall be responsible for the drafting of the minutes of the meeting, including a record of the decisions made in the meeting, which shall be submitted to the Parties for approval at the end of the meeting4.2. The minutes shall be submitted to the Parties for their comments and approval within fifteen (15) days following the holding of the Operating Committee meeting. 7.1.2 The Operating Committee shall meet at study any questions written on its agenda relative to directing, planning and monitoring the request of a Party, but in any event, at least every six (6) months, by notification containing the desired agenda, the date, time and place completion of the planned meeting, sent by one Party to the other Party with at least fifteen (15) Days' prior written notice before the expected date of the meeting. Each Party shall have the right to add topics to the agenda by notifying the other Party at least seven (7) Days prior to the expected date of the meeting. No decision may be made at a meeting on a subject matter that was not written into the agenda for such meeting, unless all Parties shall otherwise unanimously agree thereto. The CONTRACTOR shall prepare all documents and pertinent data necessary to review the items on the agenda. 7.1.3 Each Party shall have one (1) vote on the Operating Committee. The Operating Committee may not validly deliberate unless each of the Parties is represented by a full member or by its substitute memberPetroleum Works. In particular it shall study the event that a member representing each Party is not present at the time of a meeting of the Operating Committee, the meeting of the Operating Committee shall be postponed to a date set within the next eight (8) Days. The representative who was present must notify the Parties of the new meeting date as well as the time and place where it will be held. 7.1.4 The Operating Committee shall be free, if necessary, to engage experts from time to time in order to carry out special tasks. 7.1.5 Notwithstanding the requirements in Article 7.1.2 above, in the event that a decision that falls within the jurisdiction of the Operating Committee is required while there is a rig standing by or for any other event that requires an immediate response or in which case delay results in significant expense, the Operating Committee may conduct its meeting and execute its vote by fax or email. 7.2 Subject to the provisions of Article 7.3 below, the Operating Committee: 7.2.1 Shall approve all Work Programmes and corresponding Budgets and all amendments that may be made theretoBudgets, which are subject to approval, and shall make certain that monitor the insurance coverage completion of the Parties is consistent with generally accepted practices in said Work Programmes and Budgets. In order to complete the international petroleum industry Work Programmes and adequate with regard to risks incurred; 7.2.2 Shall approve meet the methods and procedures established by the Operator to be followed for the efficient conduct of the Petroleum Operations; 7.2.3 Shall have the rightBudgets approved, and following the giving of reasonable prior written notice, to access the administrative offices and the work sites of the Petroleum Operations. Such visits, for which the dates and agenda are set by agreement with the Operator, which agreement cannot be withheld without valid reason, must not hamper the normal and safe conduct of Petroleum Operations and shall in any event be at the sole risk and expense on behalf of the represented Party(ies)“Contracting Party”, shall take all necessary decisions for completing the Petroleum Works in accordance with the terms of the Contract. 7.3 Subject to the provisions of this Article 7, all 4.3. The decisions of the Operating Committee shall be unanimous taken in application of the following regulations: a) for Exploration Works, the Operator shall present to the Operating Committee, on behalf of the “Contracting Party”, the directions and Work Programmes which he intends to execute. The Operating Committee may draw up any recommendations which it deems necessary and which the “Contracting Party” will take into consideration for making useful decisions; b) for Evaluation, Development and Exploitation Works, the Operator shall bind present to the STATE Operating Committee, on behalf of the “Contracting Party”, the directions, Work Programmes and Budgets which it is submitting for approval. The Operating Committee decisions concerning these proposals must be taken unanimously by the representatives present appointed by the “DRC” and the CONTRACTOR“Contracting Party”. 7.3.1 If unanimity cannot be reachedc) for Abandonment Works, any decision taken by the Operating Committee shall reconvene within fifteen (15) Days in order be taken unanimously by the six representatives appointed pursuant to settle the unresolved issue. This period may be shortened in case of an emergencyArticle 4.1. 7.3.2 Notwithstanding d) In the foregoingevent that any question to be determined pursuant to this Contract or otherwise by the Operating Committee could not be unanimously decided by the six representatives or their substitutes nominated pursuant to Article 4.1 at an Operating Committee meeting or if the DRC representatives fail to attend such meeting, examination of the decisions question shall be referred to a second meeting of the Operating Committee which shall be held, upon written notice from the Operator, at least ten (10) days after the date of the first meeting. During this time the “DRC” and the “Contracting Party” shall consult and the Operator shall supply all information and explanations required of it by the “DRC”. It is understood that if during this second meeting the “DRC” and the “Contracting Party” do not require unanimity in reach an agreement concerning the following cases: (i) The STATE decision to be taken or if the “DRC” representatives fail to attend such meeting, it shall not have the right to veto decisions or withhold approval pertaining be up to the Petroleum Operations conducted by “Contracting Party” to take the CONTRACTOR pertaining to an Exploration Authorisation, provided that decision until such time at which the proposals are not considered to be contrary to current practices and operations in entities making up the international petroleum industry; (ii) Any decision pertaining to applications for granting, renewal or relinquishment of Exploration Authorisations, Exploitation Authorisations and Domestic Transportation Authorisations shall be made solely by “Contracting Party” will have recovered all the CONTRACTOR; (iii) The decision to appraise and/or develop a Discovery shall be Cost Oil associated with the CONTRACTOR's decision alone; (iv) If unanimity cannot be reached on the adoption initial phase of the development development. For additional developments under the same Exploitation Permit, unanimous agreement between the “DRC” and production plan and its corresponding Budget, the CONTRACTOR’s proposals shall be deemed to have been duly approved by the Operating Committee, subject to any “Contracting Party’s right of recourse, at its own expense, to expertise pursuant to the provisions of Article 27.2 hereafter if the said Party believes that adjustments ” should be made to the development and production plan on matters pertaining to the environment, security, costs, planning or ultimate recovery or that the plan in question is not consistent with the current generally accepted practices in the international petroleum industry. In such case, and unless the Parties agree otherwise, the development and production plan and its corresponding Budget shall be made to conform to the expert’s conclusions and be deemed approved by the Parties. The expert’s expenses shall be considered Petroleum Costssought.

Operating Committee. 7.1 The Operating Committee shall be responsible for the supervision of the Petroleum Operations. The STATE and the CONTRACTOR shall each appoint one (1) full member and one (1) substitute member to the Operating Committee. The substitute members may not vote except in the absence of the full member. Within forty-five (45) Days of the Effective Date, the STATE and the CONTRACTOR shall each notify to the other Party, Party the name of its full member and the substitute member it has appointed to the Operating Committee. Any Party’s full member or substitute member may be replaced by said Party after having notified the other Party accordingly. Each Party may bring to the Operating Committee meetings, meetings advisors or experts whose presence it considers desirable and which in any event shall be limited to five (5), unless the Parties agree beforehand on another number. Each full member, or, in the absence of a full member, its substitute member, shall be deemed duly authorised to represent and to bind the Party appointing him on any subject which is within the jurisdiction of the Operating Committee. Each entity comprising the CONTRACTOR may send an observer, who shall not have voting rights, to the meetings of the Operating Committee. 7.1.1 The CONTRACTOR shall be responsible for the drafting of the minutes of the meeting, including a record of the decisions made in the meeting, which shall be submitted to the Parties for approval at the end of the meeting. The minutes shall be submitted to the Parties for their comments and approval within fifteen (15) days following the holding of the Operating Committee meeting. 7.1.2 The Operating Committee shall meet at the request of a Party, but in any event, at least every six (6) months, by notification containing the desired agenda, the date, time and place of the planned meeting, sent by one Party to the other Party with at least fifteen (15) Days' prior written notice before the expected date of the meeting. Each Party shall have the right to add topics to the agenda by notifying the other Party at least seven (7) Days prior to the expected date of the meeting. No decision may be made at a meeting on a subject matter that was not written into the agenda for such meeting, unless all Parties shall otherwise unanimously agree thereto. The CONTRACTOR shall prepare all documents and pertinent data necessary to review the items on the agenda. 7.1.3 Each Party shall have one (1) vote on the Operating Committee. The Operating Committee may not validly deliberate unless each of the Parties is represented by a full member or by its substitute member. In the event that a member representing each Party is not present at the time of a meeting of the Operating Committee, the meeting of the Operating Committee shall be postponed to a date set within the next eight (8) Days. The representative who was present must notify the Parties of the new meeting date as well as the time and place where it will be held. 7.1.4 The Operating Committee shall be free, if necessary, to engage experts from time to time in order to carry out special tasks. 7.1.5 Notwithstanding the requirements in Article 7.1.2 above, in the event that a decision that falls within the jurisdiction of the Operating Committee is required while there is a rig standing by or for any other event that requires an immediate response or in which case delay results in significant expense, the Operating Committee may conduct its meeting and execute its vote by fax or email. 7.2 Subject to the provisions of Article 7.3 below, the Operating Committee: 7.2.1 Shall approve all Work Programmes and corresponding Budgets and all amendments that may be made thereto, and shall make certain that the insurance coverage of the Parties is consistent with generally accepted practices in the international petroleum industry and adequate with regard to risks incurred; 7.2.2 Shall approve the methods and procedures established by the Operator to be followed for the efficient conduct of the Petroleum Operations; 7.2.3 Shall have the right, and following the giving of reasonable prior written notice, to access the administrative offices and the work sites of the Petroleum Operations. Such visits, for which the dates and agenda are set by agreement with the Operator, which agreement cannot be withheld without valid reason, must not hamper the normal and safe conduct of Petroleum Operations and shall in any event be at the sole risk and expense of the represented Party(ies). 7.3 Subject to the provisions of this Article 7, all decisions of the Operating Committee shall be unanimous and shall bind the STATE and the CONTRACTOR. 7.3.1 If unanimity cannot be reached, the Operating Committee shall reconvene within fifteen (15) Days in order to settle the unresolved issue. This period may be shortened in case of an emergency. 7.3.2 Notwithstanding the foregoing, the decisions of the Operating Committee shall not require unanimity in the following cases: (i) The STATE shall not have the right to veto decisions or withhold approval pertaining to the Petroleum Operations conducted by the CONTRACTOR pertaining to an Exploration Authorisation, provided that the proposals are not considered to be contrary to current practices and operations in the international petroleum industry; (ii) Any decision pertaining to applications for granting, renewal or relinquishment of Exploration Authorisations, Exploitation Authorisations and Domestic Transportation Authorisations shall be made solely by the CONTRACTOR; (iii) The decision to appraise and/or develop a Discovery shall be the CONTRACTOR's decision alone; (iv) If unanimity cannot be reached on the adoption of the development and production plan and its corresponding Budget, the CONTRACTOR’s proposals shall be deemed to have been duly approved by the Operating Committee, subject to any Party’s right of recourse, at its own expense, to expertise pursuant to the provisions of Article 27.2 hereafter if the said Party believes that adjustments should be made to the development and production plan on matters pertaining to the environment, security, costs, planning or ultimate recovery or that the plan in question is not consistent with the current generally accepted practices in the international petroleum industry. In such case, and unless the Parties agree otherwise, the development and production plan and its corresponding Budget shall be made to conform to the expert’s conclusions and be deemed approved by the Parties. The expert’s expenses shall be considered Petroleum Costs.fifteen

Operating Committee. 7.1 The a) To provide for the orderly supervision and direction of all operations under this Agreement, there shall be an Operating Committee set up which is comprised of representatives of each Party to this Agreement; each Party is to appoint one representative and one alternate to serve thereon. Operator's representative shall be responsible for the supervision chairman of the Petroleum Operations. The STATE and the CONTRACTOR shall each appoint one (1) full member and one (1) substitute member to the Operating Committee. The substitute members may not vote except alternate appointed by a Party shall only act in the absence of event the full member. Within forty-five (45) Days of the Effective Date, the STATE and the CONTRACTOR shall each notify to the other Party, the name of its full member and the substitute member it has representative appointed to the Operating Committee. Any Party’s full member or substitute member may be replaced by said such Party after having notified the other Party accordingly. Each Party may bring to the Operating Committee meetings, advisors or experts whose presence it considers desirable and which in any event shall be limited to five (5), unless the Parties agree beforehand on another number. Each full member, or, in the absence of a full member, its substitute member, shall be deemed duly authorised to represent and to bind the Party appointing him on any subject which is within the jurisdiction of the Operating Committee. Each entity comprising the CONTRACTOR may send an observer, who shall not have voting rights, to the meetings of the Operating Committee. 7.1.1 The CONTRACTOR shall be responsible for the drafting of the minutes of the meeting, including a record of the decisions made in the meeting, which shall be submitted to the Parties for approval at the end of the meeting. The minutes shall be submitted to the Parties for their comments and approval within fifteen (15) days following the holding of the Operating Committee meeting. 7.1.2 The Operating Committee shall meet at the request of a Party, but in any event, at least every six (6) months, by notification containing the desired agenda, the date, time and place of the planned meeting, sent by one Party to the other Party with at least fifteen (15) Days' prior written notice before the expected date of the meetingavailable. Each Party shall have the right to add topics to the agenda change its representative and alternate at any time by notifying the other Party at least seven (7) Days prior Parties to the expected date of the meetingthat effect. No decision may be made at a meeting on a subject matter that was not written into the agenda for such meeting, unless all Parties shall otherwise unanimously agree thereto. The CONTRACTOR shall prepare all documents and pertinent data necessary to review the items on the agenda. 7.1.3 Each Party shall have one be entitled to vote through its representative or alternate in proportion to its participating interest from time to time. Other personnel including consultants (1to a maximum of two) vote on the Operating Committee. The of a Party may attend Operating Committee may not validly deliberate unless each of the Parties is represented by a full member or by its substitute membermeetings as observers. In the event that a member representing each Party is not present at the time of a meeting Except as otherwise provided elsewhere in this Agreement and subject to Article X of the Operating CommitteeProcedure, the meeting of the Operating Committee shall be postponed to a date set within the next eight (8) Days. The representative who was present must notify the Parties of the new meeting date as well as the time and place where it will be held. 7.1.4 The Operating Committee shall be free, if necessary, to engage experts from time to time in order to carry out special tasks. 7.1.5 Notwithstanding the requirements in Article 7.1.2 above, in the event that a decision that falls within the jurisdiction of the Operating Committee is required while there is a rig standing by or for any other event that requires an immediate response or in which case delay results in significant expense, the Operating Committee may conduct its meeting and execute its vote by fax or email. 7.2 Subject to the provisions of Article 7.3 below, the Operating Committee: 7.2.1 Shall approve all Work Programmes and corresponding Budgets and all amendments that may be made thereto, and shall make certain that the insurance coverage of the Parties is consistent with generally accepted practices in the international petroleum industry and adequate with regard to risks incurred; 7.2.2 Shall approve the methods and procedures established by the Operator to be followed for the efficient conduct of the Petroleum Operations; 7.2.3 Shall have the right, and following the giving of reasonable prior written notice, to access the administrative offices and the work sites of the Petroleum Operations. Such visits, for which the dates and agenda are set by agreement with the Operator, which agreement cannot be withheld without valid reason, must not hamper the normal and safe conduct of Petroleum Operations and shall in any event be at the sole risk and expense of the represented Party(ies). 7.3 Subject to the provisions of this Article 7, all decisions of the Operating Committee on all matters coming before it shall be unanimous made by a vote of a total participating interest, as provided for in Clauses 5 and shall bind the STATE and the CONTRACTOR15, of at least eighty - five percent (85.0%). 7.3.1 If unanimity cannot be reached, the c) The Operating Committee shall reconvene within fifteen meet whenever requested by the giving of at least thirty (1530) Days days prior written notice by Operator (who shall give such notice when requested by any Party) and shall meet at least once in order each six months commencing with January 1, or July 1, of each calendar year (calendar semester), to settle consider a work program and budget. At the unresolved issuetime of providing notice, Operator shall also supply a reasonably detailed agenda for the meeting and a matter not appearing on said agenda may not be proposed for a vote at the meeting unless all the Parties otherwise agree or unless any Party wishing to propose a matter for a vote notifies all other Parties in writing at least five (5) days prior to the date of such meeting of a matter or matters it intends to propose for a vote at the meeting. This period However, by the unanimous agreement of all Parties any such calendar semester meeting may be shortened cancelled in case of an emergency. 7.3.2 Notwithstanding the foregoingevent it is unnecessary. Except as herein otherwise provided, the decisions of the Operating Committee shall be binding on all Parties. Meetings of the Operating Committee shall be held in Ostrava-Hrabova, Czech Republic at the offices of Operator or at such place as the Parties may unanimously agree. Parties not require unanimity in attendance at a meeting of the following cases: (i) The STATE shall not have the right Operating Committee may, if entitled to veto decisions vote at that meeting, nonetheless cast a written vote or withhold approval pertaining to the Petroleum Operations conducted vote by the CONTRACTOR pertaining to an Exploration Authorisationproxy concerning any matter referred for such meeting, provided that written notice of such vote or proxy is received by the Operator prior to the vote taken by the Operating Committee on such matter at the meeting. At the commencement of the meeting, Operator shall supply to all the Parties present, for their approval, a written summary record of all proposals are not considered to be contrary to current practices and operations in formally tabled for vote. This record shall include the international petroleum industry; (ii) Any decision pertaining to applications for granting, renewal identity of the proposing Party or relinquishment Parties. Minutes of Exploration Authorisations, Exploitation Authorisations and Domestic Transportation Authorisations each meeting shall be made solely prepared by the CONTRACTOR; (iii) The decision to appraise and/or develop a Discovery Operator and copies thereof shall be provided promptly to the CONTRACTOR's decision alone; (iv) If unanimity cannot be reached on the adoption of the development and production plan and its corresponding Budget, the CONTRACTOR’s proposals Parties. Such minutes shall be deemed approved thirty (30) days after receipt by all Parties unless prior thereto a Party has given notice of objection. d) Subject to have been duly approved by the terms of this Agreement the Operating Committee, subject Committee shall have the sole and exclusive right to any Party’s right exercise overall supervision of recourse, at its own expense, and to expertise pursuant to the provisions of Article 27.2 hereafter if the said Party believes that adjustments should be made to the development and production plan on matters pertaining to the environment, security, costs, planning or ultimate recovery or that the plan in question is not consistent with the current generally accepted practices in the international petroleum industry. In such casedetermine, and unless control the Parties agree otherwisemaintenance, exploration operations and development of the development Breclav Block and production plan the production, storage and transport of Petroleum Substances produced and saved therefrom. e) than ten percent (10%) shall contact the Operator or the Operating Committee except through its corresponding Budget shall be made to conform to the expert’s conclusions and be deemed approved by the Parties. The expert’s expenses shall be considered Petroleum Costsdesignated representative.

Operating Committee. 7.1 The If SIERRA MADRE exercises the Option and makes the Assignment in Clause Second, above, MINERO APOLO and the MAJORITY SHAREHOLDER, as the shareholders of NEXXX xxxxxxxxg the Assignment, agree to timely form an Operating Committee (the "Committee") of the Board of Directors of NEWCO. The Committee shall be responsible have the overall responsibility for the supervision of the Petroleum OperationsDevelopment of the Project. The STATE Committee will be comprised of 4 (four) members, 2 (two) of whom will be appointed by MINERA APOLO and shall include the President of MINERA APOLO, and the CONTRACTOR 2 (two) remaining members shall each appoint one (1be appointed by the MAJORITY SHAREHOLDER and shall include the President of the MAJORITY SHAREHOLDER. The members will exercise their duties and responsibilities as Committee members without any economic compensation. The Committee shall have among its obligations and attributes the following: i) full member and one (1) substitute member The Committee shall decide on the acquisition of any additional concessions to be added to the Operating Project. In no case will MINERA APOLO, or any of its stockholders, employees, advisors or related parties, be permitted to make a new application for any concession which is located in an area of 5 (five) kilometers from the Project, unless approved in advance and in writing by the Committee; ii) If the Committee decides to acquire a new concession located within an area of 5 (five) kilometers from the Project, the concession will be applied for in the name of NEWCO, and any such concession shall form part of the Project and will be subject to conditions of this Agreement; and iii) The Committee will decide on the appropriate exploration and exploitation programs for the Development of the Project, based on the recommendations and direction of the Operator. The Committee shall meet and adopt decisions as follows: i) The Committee shall meet at least once each quarter or more frequently if the Operator so determines; ii) The members of the Committee must be given notice at least 10 (ten) calendar days in advance of the date on which the Committee meeting will be held; iii) The convocation must be notified to the Committee members by fax or any other means that assures its receipt, in Spanish and in English; iv) MINERA APOLO gives as its fax Number to which convocations should be sent the following number in Mexico: (444) 815-1293; v) The MAJORITY SHAREHOLDER gives as its fax xxxxxxx xx xhich convocations should be sent the following numbers in the USA: (609) 219-7493 and (702) 243-1869; vi) If all of the members of the Committee mxxx xxxxxxx x prior convocation, they may make decisions; vii) The Committee may make decisions even when the members do not meet, provided said decisions are ratified in writing by all members who constitute the Committee; viii) In order for a Committee meeting to be valid and for decisions to be taken and binding on the Parties, the members who are the respective Presidents of MINERA APOLO and the MAJORITY SHAREHOLDER must be present. Members of the Committee may not be represented by proxy in meetings; ix) The Committee may take decisions by a majority of votes present, and in the case of deadlock on a decision by the members of MINERA APOLO and the MAJORITY SHAREHOLDER, the MAJORITY SHAREHOLDER shall have the deciding vote based on its 51% (fifty-one percent) equity interest in NEWCO; and x) The decisions that the Committee adopts are binding for the signatories of this Agreement. In addition to other matters prescribed in this Agreement, MINERA APOLO and the MAJORITY SHAREHOLDER agree and shall ensure that the Board of Directors of NEWCO shall approve resolutions on the Project's profits and losses, on expenses and investment budgets, and other matters of importance for the Development of the Project, complying with the provisions contained in this Agreement regarding the functions, liabilities, rights, and obligations of the Parties, according to the following dispositions: i) The MAJORITY SHAREHOLDER will determine the profits and losses of each commercial year in agreement with the accounting principles that govern in Mexico; ii) The commercial years of the Project will be established on an annual basis, and they shall begin on the day 1 of January and end on the day 31 of December of each year, except for the first year that will be irregular and shall run from the date this Agreement is signed to the day 31 of December of 2005; iii) The MAJORITY SHAREHOLDER will prepare and will deliver to the Committee the balance sheet and the other financial statements of the commercial year (" the Annual Balance") at the latest within 3 (three) months following the end of each commercial year. The accounting records and all supporting documentation shall remain at the MAJORITY SHAREHOLDER'S tax address located at San Francisco No. 656-601, Col. Del Valle, 03100, Mexico, D.F. or at axx xxxxxx xxxxxxx xxxx xxx xx properly notified by the MAJORITY SHAREHOLDER; iv) The resolutions approving the Annual Balance, any distribution of profits or their reinvestment or their use in the amortization of losses or in the creation or reconstitution of reserves and on other matters of interest for the Project discussed in the Annual Meeting of the Committee shall be approved by the majority of the participation interests of the Parties. v) The profits and the losses, when the Annual Meeting of the Committee do not decide to apply them to other ends, shall be distributed in accordance with the participation interests of the Parties; vi) No distribution of profits will be decreed if they are not actually made and shown as such in the Annual Balance; vii) The MAJORITY SHAREHOLDER will prepare and deliver to MINERA APOLO a monthly balance at the latest within the month following the end of each calendar month. The accounting records and supporting documentation shall remain at MINERA APOLO'S disposal as, where, and for the use provided at the MAJORITY SHAREHOLDER'S tax address as indicated in section (iii), above, of this Clause; viii) The profit distributions to MINERA APOLO shall be paid to it at the MAJORITY SHAREHOLDER'S tax address indicated in section (iii), above, of this Clause; and ix) The operating and capital budget (hereinbefore and hereinafter called "the Period's Budget") may be annual or for a shorter period, as resolved by the Committee. The substitute members may not vote except MAJORITY SHAREHOLDER shall deliver or send to the Committee the Period's Budget at least 15 (fifteen) calendar days ahead of the x) date on which it will be discussed and approved by the Committee. Once approved, the MAJORITY SHAREHOLDER shall notify the Committee, in the absence writing, at meetings of the full member. Within forty-five (45) Days Committee during the course of the Effective Dateyear, the STATE and the CONTRACTOR shall each notify of any changes to the other PartyPeriod Budget, and any material variances, defined as greater than 20% (twenty percent) of any Period Budget line item or 5% (five percent) of the name of its full member and total Period Budget, which must be approved by the substitute member it has appointed to Committee in advance. The Period's Budget shall include only expenses that benefit the Operating Committee. Any Party’s full member or substitute member may be replaced by said Party after having notified the other Party accordingly. Each Party may bring to the Operating Committee meetings, advisors or experts whose presence it considers desirable and which in any event shall be limited to five (5)Project directly, unless the Parties agree beforehand on another numberdecide otherwise. Each full member, or, in The Project shall not pay charges coming from the absence of a full member, its substitute member, shall be deemed duly authorised to represent and to bind the Party appointing him on any subject which is within the jurisdiction shareholders of the Operating CommitteeParties, different from the ones provided herein or different from the ones expressly and previously authorized by both Parties. Each entity comprising the CONTRACTOR may send an observer, who shall not have voting rights, to the meetings of the Operating Committee. 7.1.1 The CONTRACTOR shall be responsible for the drafting of the minutes of the meeting, including a record of the decisions made in the meeting, which shall be submitted to the Parties for approval at the end of the meeting. The minutes shall be submitted to the Parties for their comments and approval within fifteen (15) days following the holding of the Operating Committee meeting. 7.1.2 The Operating Committee shall meet at the request of a Party, but in any event, at least every six (6) months, by notification containing the desired agenda, the date, time and place of the planned meeting, sent by one Party to the other Party with at least fifteen (15) Days' prior written notice before the expected date of the meeting. Each Party shall have the right to add topics to the agenda by notifying the other Party at least seven (7) Days prior to the expected date of the meeting. No decision may be made at a meeting on a subject matter that was not written into the agenda for such meeting, unless all Parties shall otherwise unanimously agree thereto. The CONTRACTOR shall prepare all documents and pertinent data necessary to review the items on the agenda. 7.1.3 Each Party shall have one (1) vote on the Operating Committee. The Operating Committee may not validly deliberate unless each of the Parties is represented by a full member or by its substitute member. In the event that a member representing each Party is not present at the time of a meeting of the Operating Committee, the meeting of the Operating Committee shall be postponed to a date set within the next eight (8) Days. The representative who was present must notify the Parties of the new meeting date as well as the time and place where it will be held. 7.1.4 The Operating Committee shall be free, if necessary, to engage experts from time to time in order to carry out special tasks. 7.1.5 Notwithstanding the requirements in Article 7.1.2 above, in the event that a decision that falls within the jurisdiction of the Operating Committee is required while there is a rig standing by or for any other event that requires an immediate response or in which case delay results in significant expense, the Operating Committee may conduct its meeting and execute its vote by fax or email. 7.2 Subject to the provisions of Article 7.3 below, the Operating Committee: 7.2.1 Shall approve all Work Programmes and corresponding Budgets and all amendments that may be made thereto, and shall make certain that the insurance coverage of the Parties is consistent with generally accepted practices in the international petroleum industry and adequate with regard to risks incurred; 7.2.2 Shall approve the methods and procedures established by the Operator to be followed for the efficient conduct of the Petroleum Operations; 7.2.3 Shall have the right, and following the giving of reasonable prior written notice, to access the administrative offices and the work sites of the Petroleum Operations. Such visits, for which the dates and agenda are set by agreement with the Operator, which agreement cannot be withheld without valid reason, must not hamper the normal and safe conduct of Petroleum Operations and shall in any event be at the sole risk and expense of the represented Party(ies). 7.3 Subject to All the provisions of this Article 7Clause Fifth, all decisions of the Operating Committee as well as Clause Sixth, below, shall be unanimous and shall bind the STATE and the CONTRACTOR. 7.3.1 If unanimity cannot be reached, the Operating Committee shall reconvene within fifteen (15) Days in order to settle the unresolved issue. This period may be shortened in case of an emergency. 7.3.2 Notwithstanding the foregoing, the decisions of the Operating Committee shall not require unanimity set forth in the following cases: (i) The STATE shall not have the right to veto decisions or withhold approval pertaining to the Petroleum Operations conducted corporate records of NEWCO and ratified, as such, by the CONTRACTOR pertaining to an Exploration Authorisation, provided that the proposals are not considered to be contrary to current practices and operations in the international petroleum industry; (ii) Any decision pertaining to applications for granting, renewal or relinquishment NEWCO'S Board of Exploration Authorisations, Exploitation Authorisations and Domestic Transportation Authorisations shall be made solely by the CONTRACTOR; (iii) The decision to appraise and/or develop a Discovery shall be the CONTRACTOR's decision alone; (iv) If unanimity cannot be reached on the adoption of the development and production plan and its corresponding Budget, the CONTRACTOR’s proposals shall be deemed to have been duly approved by the Operating Committee, subject to any Party’s right of recourse, at its own expense, to expertise pursuant to the provisions of Article 27.2 hereafter if the said Party believes that adjustments should be made to the development and production plan on matters pertaining to the environment, security, costs, planning or ultimate recovery or that the plan in question is not consistent with the current generally accepted practices in the international petroleum industryDirectors. In such caseaddition, and unless the Parties agree otherwisethat NEWCO'S articles of incorporation and by-laws, as applicable, shall contain the development following provisions: i) Any increase in NEWCO'S share capital, whether of the fixed or variable capital, must be approved, in advance, by a vote of at least 65% (sixty-five percent) of NEWCO'S shares outstanding at the time, and production plan ii) A unanimous vote of NEWCO'S Board of Directors is required for the authorization of: a) Third party financing agreements, b) Purchase of any third party securities or other non-mining-related obligations, and its corresponding Budget shall be made c) Any changes to conform to the expert’s conclusions NEWCO'S articles of incorporation and be deemed approved by the Parties. The expert’s expenses shall be considered Petroleum Costsby-laws.

Operating Committee. 7.1 The Operating Committee shall be responsible for the supervision of the Petroleum Operations. The STATE and the CONTRACTOR shall each appoint one (1) full member and one (1) substitute member to the Operating Committee. The substitute members may not vote except in the absence of the full member. Within forty-five forty­five (45) Days of the Effective Date, the STATE and the CONTRACTOR shall each notify to the other Party, Party the name of its full member and the substitute member it has appointed to the Operating Committee. Any Party’s full member or substitute member may be replaced by said Party after having notified the other Party accordingly. Each Party may bring to the Operating Committee meetings, meetings advisors or experts whose presence it considers desirable and which in any event shall be limited to five (5), unless the Parties agree beforehand on another number. Each full member, or, in the absence of a full member, its substitute member, shall be deemed duly authorised to represent and to bind the Party appointing him on any subject which is within the jurisdiction of the Operating Committee. Each entity comprising the CONTRACTOR may send an observer, who shall not have voting rights, to the meetings of the Operating Committee. 7.1.1 The CONTRACTOR shall be responsible for the drafting of the minutes of the meeting, including a record of the decisions made in the meeting, which shall be submitted to the Parties for approval at the end of the meeting. The minutes shall be submitted to the Parties for their comments and approval within fifteen (15) days following the holding of the Operating Committee meeting. 7.1.2 The Operating Committee shall meet at the request of a Party, but in any event, at least every six (6) months, by notification containing the desired agenda, the date, time and place of the planned meeting, sent by one Party to the other Party with at least fifteen (15) Days' ’ prior written notice before the expected date of the meeting. Each Party shall have the right to add topics to the agenda by notifying the other Party at least seven (7) Days prior to the expected date of the meeting. No decision may be made at a meeting on a subject matter that was not written into the agenda for such meeting, unless all Parties shall otherwise unanimously agree thereto. The CONTRACTOR shall prepare all documents and pertinent data necessary to review the items on the agenda. 7.1.3 Each Party shall have one (1) vote on the Operating Committee. The Operating Committee may not validly deliberate unless each of the Parties is represented by a full member or by its substitute member. In the event that a member representing each Party is not present at the time of a meeting of the Operating Committee, the meeting of the Operating Committee shall be postponed to a date set within the next eight (8) Days. The representative who was present must notify the Parties of the new meeting date as well as the time and place where it will be held. 7.1.4 The Operating Committee shall be free, if necessary, to engage experts from time to time in order to carry out special tasks. 7.1.5 Notwithstanding the requirements in Article 7.1.2 above, in the event that a decision that falls within the jurisdiction of the Operating Committee is required while there is a rig standing by or for any other event that requires an immediate response or in which case delay results in significant expense, the Operating Committee may conduct its meeting and execute its vote by fax or email. 7.2 Subject to the provisions of Article 7.3 below, the Operating Committee: 7.2.1 Shall approve all Work Programmes and corresponding Budgets and all amendments that may be made thereto, and shall make certain that the insurance coverage of the Parties is consistent with generally accepted practices in the international petroleum industry and adequate with regard to risks incurred;incurred; 7.2.2 Shall approve the methods and procedures established by the Operator to be followed for the efficient conduct of the Petroleum Operations;Operations; 7.2.3 Shall have the right, and following the giving of reasonable prior written notice, to access the administrative offices and the work sites of the Petroleum Operations. Such visits, for which the dates and agenda are set by agreement with the Operator, which agreement cannot be withheld without valid reason, must not hamper the normal and safe conduct of Petroleum Operations and shall in any event be at the sole risk and expense of the represented Party(ies). 7.3 Subject to the provisions of this Article 7, all decisions of the Operating Committee shall be unanimous and shall bind the STATE and the CONTRACTOR. 7.3.1 If unanimity cannot be reached, the Operating Committee shall reconvene within fifteen (15) Days in order to settle the unresolved issue. This period may be shortened in case of an emergency. 7.3.2 Notwithstanding the foregoing, the decisions of the Operating Committee shall not require unanimity in the following cases: (i) The STATE shall not have the right to veto decisions or withhold approval pertaining to the Petroleum Operations conducted by the CONTRACTOR pertaining to an Exploration Authorisation, provided that the proposals are not considered to be contrary to current practices and operations in the international petroleum industry;industry; (ii) Any decision pertaining to applications for granting, renewal or relinquishment of Exploration Authorisations, Exploitation Authorisations and Domestic Transportation Authorisations shall be made solely by the CONTRACTOR;CONTRACTOR; (iii) The decision to appraise and/or develop a Discovery shall be the CONTRACTOR's ’S decision alone;alone; (iv) If if unanimity cannot be reached on the adoption of the development and production plan and its corresponding Budget, the CONTRACTOR’s ’S proposals shall be deemed to have been duly approved by the Operating Committee, subject to any Party’s right of recourse, at its own expense, to expertise pursuant to the provisions of Article 27.2 hereafter if the said Party believes that adjustments should be made to the development and production plan on matters pertaining to the environment, security, costs, planning or ultimate recovery or that the plan in question is not consistent with the current generally accepted practices in the international petroleum industry. In such case, and unless the Parties agree otherwise, the development and production plan and its corresponding Budget shall be made to conform to the expert’s conclusions and be deemed approved by the Parties. The expert’s expenses shall be considered Petroleum Costs.

Operating Committee. 7.1 The Operating Committee shall be responsible for the supervision of the Petroleum Operations. The STATE and the CONTRACTOR shall each appoint one (1) full member and one (1) substitute member to the Operating Committee. The substitute members may not vote except in the absence of the full member. Within forty-five (45) Days of the Effective Date, the STATE and the CONTRACTOR shall each notify to the other Party, Party the name of its full member and the substitute member it has appointed to the Operating Committee. Any Party’s full member or substitute member may be replaced by said Party after having notified the other Party accordingly. Each Party may bring to the Operating Committee meetings, meetings advisors or experts whose presence it considers desirable and which in any event shall be limited to five (5), unless the Parties agree beforehand on another number. Each full member, or, in the absence of a full member, its substitute member, shall be deemed duly authorised to represent and to bind the Party appointing him on any subject which is within the jurisdiction of the Operating Committee. Each entity comprising the CONTRACTOR may send an observer, who shall not have voting rights, to the meetings of the Operating Committee. 7.1.1 The CONTRACTOR shall be responsible for the drafting of the minutes of the meeting, including a record of the decisions made in the meeting, which shall be submitted to the Parties for approval at the end of the meeting. The minutes shall be submitted to the Parties for their comments and approval within fifteen (15) days following the holding of the Operating Committee meeting. 7.1.2 The Operating Committee shall meet at the request of a Party, but in any event, at least every six (6) months, by notification containing the desired agenda, the date, time and place of the planned meeting, sent by one Party to the other Party with at least fifteen (15) Days' ’ prior written notice before the expected date of the meeting. Each Party shall have the right to add topics to the agenda by notifying the other Party at least seven (7) Days prior to the expected date of the meeting. No decision may be made at a meeting on a subject matter that was not written into the agenda for such meeting, unless all Parties shall otherwise unanimously agree thereto. The CONTRACTOR shall prepare all documents and pertinent data necessary to review the items on the agenda. 7.1.3 Each Party shall have one (1) vote on the Operating Committee. The Operating Committee may not validly deliberate unless each of the Parties is represented by a full member or by its substitute member. In the event that a member representing each Party is not present at the time of a meeting of the Operating Committee, the meeting of the Operating Committee shall be postponed to a date set within the next eight (8) Days. The representative who was present must notify the Parties of the new meeting date as well as the time and place where it will be held. 7.1.4 The Operating Committee shall be free, if necessary, to engage experts from time to time in order to carry out special tasks. 7.1.5 Notwithstanding the requirements in Article 7.1.2 above, in the event that a decision that falls within the jurisdiction of the Operating Committee is required while there is a rig standing by or for any other event that requires an immediate response or in which case delay results in significant expense, the Operating Committee may conduct its meeting and execute its vote by fax or email. 7.2 Subject to the provisions of Article 7.3 below, the Operating Committee: 7.2.1 Shall approve all Work Programmes and corresponding Budgets and all amendments that may be made thereto, and shall make certain that the insurance coverage of the Parties is consistent with generally accepted practices in the international petroleum industry and adequate with regard to risks incurred; 7.2.2 Shall approve the methods and procedures established by the Operator to be followed for the efficient conduct of the Petroleum Operations; 7.2.3 Shall have the right, and following the giving of reasonable prior written notice, to access the administrative offices and the work sites of the Petroleum Operations. Such visits, for which the dates and agenda are set by agreement with the Operator, which agreement cannot be withheld without valid reason, must not hamper the normal and safe conduct of Petroleum Operations and shall in any event be at the sole risk and expense of the represented Party(ies). 7.3 Subject to the provisions of this Article 7, all decisions of the Operating Committee shall be unanimous and shall bind the STATE and the CONTRACTOR. 7.3.1 If unanimity cannot be reached, the Operating Committee shall reconvene within fifteen (15) Days in order to settle the unresolved issue. This period may be shortened in case of an emergency. 7.3.2 Notwithstanding the foregoing, the decisions of the Operating Committee shall not require unanimity in the following cases: (i) The STATE shall not have the right to veto decisions or withhold approval pertaining to the Petroleum Operations conducted by the CONTRACTOR pertaining to an Exploration Authorisation, provided that the proposals are not considered to be contrary to current practices and operations in the international petroleum industry; (ii) Any decision pertaining to applications for granting, renewal or relinquishment of Exploration Authorisations, Exploitation Authorisations and Domestic Transportation Authorisations shall be made solely by the CONTRACTOR; (iii) The decision to appraise and/or develop a Discovery shall be the CONTRACTOR's ’S decision alone; (iv) If if unanimity cannot be reached on the adoption of the development and production plan and its corresponding Budget, the CONTRACTOR’s ’S proposals shall be deemed to have been duly approved by the Operating Committee, subject to any Party’s right of recourse, at its own expense, to expertise pursuant to the provisions of Article 27.2 hereafter if the said Party believes that adjustments should be made to the development and production plan on matters pertaining to the environment, security, costs, planning or ultimate recovery or that the plan in question is not consistent with the current generally accepted practices in the international petroleum industry. In such case, and unless the Parties agree otherwise, the development and production plan and its corresponding Budget shall be made to conform to the expert’s conclusions and be deemed approved by the Parties. The expert’s expenses shall be considered Petroleum Costs.

Operating Committee. 7.1 The Operating Committee shall be responsible based in Iceland and composed of MERCK representatives and deCODE representatives and shall exist for the supervision [**] after termination or expiration of the Petroleum OperationsResearch Program Term. The STATE Operating Committee shall perform the following functions (i) approve and, as the need arises, determine the necessity to remove personnel working on the Research Program, (ii) prepare the Budget, (iii) formulate and the CONTRACTOR shall each appoint one adjust Work Plans, (1iv) full member and one select Compounds; (1v) substitute member to the Operating Committee. The substitute members may not vote except in the absence oversee progress of the full member. Within fortyResearch Program and exchange of data between the Parties; and (vi) appoint sub-five (45) Days committees of equal representation to fulfill any of the Effective Date, the STATE and the CONTRACTOR shall each notify to the other Party, the name of its full member and the substitute member it has appointed to the Operating Committee. Any Party’s full member or substitute member may be replaced by said Party after having notified the other Party accordinglyenumerated tasks set forth in this Section 2.5.1(b). Each Party may bring shall have 1 vote. Each Party shall appoint its representatives to the Operating Committee from time to time, and may substitute one or more of its representatives, in its sole discretion, effective upon notice to the other Party of such change. These representatives shall have, individually or collectively, appropriate technical credentials, experience and knowledge, and ongoing familiarity with the Research Program. Additional representatives or consultants may from time to time, by mutual consent of the Parties, be invited to attend Operating Committee meetings, advisors or experts whose presence it considers desirable and which in any event shall be limited to five (5), unless the Parties agree beforehand on another number. Each full member, or, in the absence case of consultants subject to such consultant’s written agreement to comply with the requirements of Section 4.1. Any member of the Operating Committee may designate a full member, its substitute member, shall be deemed duly authorised to represent attend and to bind perform the Party appointing him on functions of that member at any subject which is within the jurisdiction meeting of the Operating Committee. Each entity comprising the CONTRACTOR may send an observer, who shall not have voting rights, to the meetings of the Operating Committee. 7.1.1 The CONTRACTOR shall be responsible for the drafting of the minutes of the meeting, including a record of the decisions made in the meeting, which shall be submitted to the Parties for approval at the end of the meeting. The minutes shall be submitted to the Parties for their comments A chairperson and approval within fifteen (15) days following the holding secretary of the Operating Committee meeting. 7.1.2 The Operating Committee shall meet at serve co-terminus one (1) year terms, commencing on the request of a PartyCollaboration Date or an anniversary thereof, but in any event, at least every six (6) months, by notification containing as the desired agenda, the date, time and place of the planned meeting, sent by one Party to the other Party with at least fifteen (15) Days' prior written notice before the expected date of the meetingcase may be. Each Party deCODE shall have the right to add topics to name the agenda by notifying the other Party at least seven (7) Days prior to the expected date of the meeting. No decision may be made at a meeting on a subject matter that was not written into the agenda for such meeting, unless all Parties shall otherwise unanimously agree thereto. The CONTRACTOR shall prepare all documents chairperson and pertinent data necessary to review the items on the agenda. 7.1.3 Each Party MERCK shall have one (1) vote on the right to name the secretary of the Operating Committee. The Operating Committee may not validly deliberate unless each of the Parties is represented by a full member or by its substitute member. In the event that a member representing each Party is not present at the time of a meeting of the Operating Committee, the meeting Decisions of the Operating Committee shall be postponed to a date set within made unanimously by the next eight (8) Daysmembers. The representative who was present must notify the Parties of the new meeting date as well as the time and place where it will be held. 7.1.4 The Operating Committee shall be free, if necessary, to engage experts from time to time in order to carry out special tasks. 7.1.5 Notwithstanding the requirements in Article 7.1.2 above, in In the event that a decision that falls within the jurisdiction of the Operating Committee is required while there is a rig standing by cannot or for any other event that requires does not, after good faith efforts, reach agreement on an immediate response or in which case delay results in significant expenseissue, the Operating Committee may resolution and/or course of conduct its meeting and execute its vote by fax or email. 7.2 Subject shall be referred to the provisions of Article 7.3 below, the Operating Executive Committee: 7.2.1 Shall approve all Work Programmes and corresponding Budgets and all amendments that may be made thereto, and . Each Party shall make certain that the insurance coverage of the Parties is consistent with generally accepted practices in the international petroleum industry and adequate with regard to risks incurred; 7.2.2 Shall approve the methods and procedures established by the Operator to be followed for the efficient conduct of the Petroleum Operations; 7.2.3 Shall have the right, and following the giving of reasonable prior written notice, to access the administrative offices and the work sites of the Petroleum Operations. Such visits, for which the dates and agenda are set by agreement with the Operator, which agreement cannot be withheld without valid reason, must not hamper the normal and safe conduct of Petroleum Operations and shall in any event be at the sole risk and expense of the represented Party(ies). 7.3 Subject bear its own expenses related to the provisions attendance of this Article 7, all decisions of the Operating Committee shall be unanimous such meetings by its representatives and shall bind the STATE and the CONTRACTORinvitees. 7.3.1 If unanimity cannot be reached, the Operating Committee shall reconvene within fifteen (15) Days in order to settle the unresolved issue. This period may be shortened in case of an emergency. 7.3.2 Notwithstanding the foregoing, the decisions of the Operating Committee shall not require unanimity in the following cases: (i) The STATE shall not have the right to veto decisions or withhold approval pertaining to the Petroleum Operations conducted by the CONTRACTOR pertaining to an Exploration Authorisation, provided that the proposals are not considered to be contrary to current practices and operations in the international petroleum industry; (ii) Any decision pertaining to applications for granting, renewal or relinquishment of Exploration Authorisations, Exploitation Authorisations and Domestic Transportation Authorisations shall be made solely by the CONTRACTOR; (iii) The decision to appraise and/or develop a Discovery shall be the CONTRACTOR's decision alone; (iv) If unanimity cannot be reached on the adoption of the development and production plan and its corresponding Budget, the CONTRACTOR’s proposals shall be deemed to have been duly approved by the Operating Committee, subject to any Party’s right of recourse, at its own expense, to expertise pursuant to the provisions of Article 27.2 hereafter if the said Party believes that adjustments should be made to the development and production plan on matters pertaining to the environment, security, costs, planning or ultimate recovery or that the plan in question is not consistent with the current generally accepted practices in the international petroleum industry. In such case, and unless the Parties agree otherwise, the development and production plan and its corresponding Budget shall be made to conform to the expert’s conclusions and be deemed approved by the Parties. The expert’s expenses shall be considered Petroleum Costs.