ASSOCIATION AGREEMENT
between
NAFTA a.s. GBELY
and
DANUBE INTERNATIONAL
PETROLEUM COMPANY
REPRESENTED BY ITS BRANCH IN SLOVAKIA
CONTENTS
Article I. Contracting Association Members
Article II. Name And Location Of The Association
Article III. Purpose And Subject Of The Association
Article IV. Obligations Of The Association Members
Article V. Management Body Of The Association
Article VI. Procedures For Conducting Joint Activity
Article VII. Financial Administration
Article VIII. Ownership Ratio
Article IX. Training Of Local Personnel And Transfer Of Technology
Article X. Operations At ▇▇▇▇▇ And Their Management
Article XI. Confidentiality Agreement
Article XII. Assignment
Article XIII. Force Majeure
Article XIV. Term Of The Agreement
Article XV. Governing Law
Article XV.a Arbitration Clause
Article XVI. Termination (Liquidation) Of The Association
Article XVII. Language Of The Agreement And Working Language
Article XVIII. Date On Which The Agreement Takes Effect
Article XIX. Temporary And Final Conditions
Attachments:
A. Exhibit A: Map Of AMI 1 And AMI 2
B. Exhibit B: Schedule of Activities
C. Definitions
D. Coordinates Of AMI 1 and AMI 2
PARTNERSHIP AGREEMENT
Pursuant to the provisions of Section 829 to Section 841 of Act no. 40/64
Zb. (Civil Code) as amended by Act no. 509/91 Zb., the complete text of which
was issued under Act no. 47/92 Zb., the contracting parties agree as follows:
Article I.
Contracting Association Members
1. NAFTA a.s. Gbely
Address: 908 45 Gbely, Slovakia
(Organization identification no.: 31409 938)
Represented by: ▇▇▇ ▇▇▇▇▇▇▇, Dipl-Ing - General Director of the Company and
Chairman of the Board of Directors
▇▇▇▇▇▇ ▇▇▇▇▇, RNDr. - Member of the Board of Directors
(Hereinafter referred to as "NG")
2. BRANCH IN SLOVAKIA OF DANUBE INTERNATIONAL PETROLEUM COMPANY
Address: Obchodna 21, Bratislava
Represented by: Mrs. ▇▇▇▇▇ Csekes
(Hereinafter referred to as "DIPC")
(Hereinafter jointly the "Association Members")
Article II.
Name and Location of the Association
The Association Members will use the following name when doing business
jointly "NAI:IA - DANUBE."
The location of the Association is Gbely, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇.
(965 Naftarska St., Gbely, Slovakia)
Article III.
Purpose and Subject of the Association
The purpose and subject of the Association as set forth in this Association
Agreement (the "Agreement") is to develop the production of hydrocarbons in
commercial quantities on through a completed joint exploration program for the
Association Members mutual advantage and to conduct further exploration for
hydrocarbons in the two Areas of Mutual Interest ("AMI 1" and "AMI 2"
respectively, refer to Exhibit A). This involves the joint activity of the
Association Members.
DIPC will plan, design, and manage exploration and will act as operator during
the period of the Test Phase. NG will act as field operator during the period
of the first Production Phase and in subsequent Production Phases. In both
Phases, preference will be given to the use of the equipment and personnel of NG
provided the service is technically and economically competitive.
NG represents and warrants that it is the authorized and unencumbered owner of a
license (Law of Geological Work in Slovakia No. 52 Zb /1988 as it is said Nov.
6,1991 no 491 Zb, in Law no 497/91 Zb) in the AMI 1 and AMI 2. This Association
Agreement further specifies that NG exclusively, as Partner to this Agreement,
stipulates the interests that it has in the given area for the purposes and
conditions of this Agreement.
The planned capital investment for the Test Phase is US $6.64 million divided as
follows:
DIPC 75 %
NG 25 %
The planned capital investment of Production Phase 1 is US $6.8 million divided
as follows:
DIPC 60 %
NG 40 %
1. Subject to JMC approval, the program as shown in Exhibit B will be
implemented. The first quarter shall start on the fist day of the following
month after JMC approval of the schedule of activities. The Test Phase has a
duration of five quarters (see Exhibit B). An environmental base lime study
will be performed during the 1. quarter; DIPC will pay 100% of the cost. An
engineering study of the Test Phase will be performed during the 1. and 2.
quarter; DIPC will pay 100%. Trebisov well #5 (redrill) will be drilled and
tested during the 3. and 4. quarter; or no more than 180 days after the approval
of the JMC. Trebisov #2 (redrill), Lozin #1 (redrill) will be drilled and
tested during the 5. quarter. Also during the 5. quarter, a seismic program
will be completed. The total costs of the ▇▇▇▇▇ and seismic are $6.64 million.
The Production Phase 1 consists of 7 quarters (quarters 6-12). Three additional
▇▇▇▇▇ in quarters 7, 9 and 11 will be drilled in an alternative area of AMI 1.
One well will be drilled in the AMI 2 during the 10. quarter.
2. If upon completion of the Test Phase not all the funds are used, these
remaining funds will be spent as part of the Production Phase 1 in the following
proportion:
DIPC 75 %
NG 25 %
If, however, the work program of the Test Phase exceeds Six Million Six Hundred
Thousand US Dollars (US $6.64 million), the additional funds required to
complete the program will be spent in the following proportion:
DIPC 60%
NG 40%
If upon completion of the Production Phase 1, not all funds were used, these
remaining funds will be spent in the subsequent Production Phase in the
following proportion:
DIPC 60%
NG 40%
If, however, the work program of the Production Phase 1 exceeds Six Million
Eight Hundred Thousand US Dollars ($6.8 million), the additional funds required
to complete the program will be spent in the following proportion:
DIPC 50 %
NG 50%
3. After the JMC approves the budgets, DIPC and NG will deposit their
respective funds twenty (20) days before commencement of operation. Checks,
drafts transfers etc., drawn from the mutual bank subaccount will be signed by
the operator and countersigned by the non-operator.
Deposits to the joint subaccount will be calculated in Sk/Slovak Crowns/ at
the rate in effect on the day the deposit is transferred to the joint subaccount
in compliance with the foreign exchange law.
Further Production Phases will be financed by the Association Members equally.
Article IV.
Obligations of the Association Members
(efforts to accomplish the agreed purpose)
The individual Association Members, realizing that in order to accomplish
the stated purpose and subject of the Association they must make diligent
efforts and make tangible and intangible investments, bind themselves to
accomplish the following:
1. DIPC and NG will commence oil field operations at the field within 180 days
after the Association's Joint Management Committee (or the "JMC") as the
management body of the Association has approved the work program of the
Association drawn up by the operator.
2. DIPC and NG as operators will conduct drilling and production operations
and an exploration program in accordance with the provisions of this Agreement.
3. DIPC will consult with NG concerning locations for ▇▇▇▇▇. The Association
Members will select ▇▇▇▇▇ that have been shown to be the best, technically and
economically. After conclusion of the drilling and production operations, NG
and DIPC will see that the test phase is begun as soon as possible, and on the
basis of the results therefrom will establish the spacing of the production
▇▇▇▇▇ for every economic horizon.
4. In implementing the activity of the Association, DIPC will preferentially
utilize the personnel, goods, services, equipment and servicing of NG, the
Association will also conclude if it should prove necessary to purchase goods or
lease equipment, and will also conclude contracts for oil field operations,
under the condition that the goods, equipment, and services supplied will be
competitive in terms of price, quality, and delivery and service terms.
Otherwise, all contracts may be concluded independently by each partner up to a
sum agreed upon by the JMC. The Association Member, which concludes an
agreement without JMC approval, shall bear all expenses associated with that
agreement.
Article V.
Management Body of the Association
A. The management body of the Association is the JMC. Each Partner names four
representatives to the JMC, who will constitute the JMC. Each Partner shall at
the same time appoint one of his representatives as his chief representative.
The following representatives are appointed by DIPC:
1. ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Ph.D.--chief representative
2. ▇▇▇▇▇ Csekes-later replaced by DIPC Slovakia
Representative--vice-chief
representative
3. ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Ph.D.-representative
4. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇-later replaced by DIPC--Slovakia,
Geologist/Engineering-representative
The following representative are appointed by NG:
1. ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇--chief representative
2. Dr. ▇▇▇▇▇ Ostrolucky, Ph.D.-vice-chief representative
3. ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Ph.D.-representative
4. Dipl. Ing. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇--representative
1. Unless otherwise agreed between the Association Members, regular meetings
of the JMC will be held at least once every quarter, and any additional meetings
may be held as necessary at any time at the request of either of the Association
Members by notifying the other Partner by mail, telex thirty (30) days in
advance as to the time, place and matters to be discussed.
2. The JMC is empowered to:
. review, examine and approve the work programs and budgets
proposed by the operators.
. approve or confirm the following matters affecting procurement
and expenditures:
a) approve the inclusion in the budget of any assets if their price
exceeds one hundred and fifty thousand Sk (150,000 Sk), or every individual
order with a value exceeding one hundred and fifty thousand Sk (150,000
Sk).
b) approve the equipment leases or technical subcontracts or service
contracts included in the budget if the price is more than one hundred and
fifty thousand Sk (150,000 Sk).
. review and approve plans and transfer of production operations.
. discuss, review, decide, and approve other matters proposed by
either Associate Member to this Agreement or proposed by a group
of experts or the operator.
. review and examine and approve matters to be submitted to the
relevant authority of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
▇. Decisions of the JMC must be, on the basis of consultation, unanimous. All
decisions adopted unanimously will be deemed official decisions and will be
equally binding on both Association
Members.
If a matter arises on which a unanimous opinion cannot be obtained, the
Association Members may convene a new meeting as soon as possible in an effort
to find a new solution to the advantage of both Association Members. The
Association Members will in all cases work diligently, constructively, and in
good faith in an effort to ensure that all decisions of the JMC are unanimous.
4. If it is urgent that a matter be resolved, or if a decision must be taken
without a meeting being called, the JMC may take a decision by means of telex,
fax, or by circulating documents.
5. The JMC may appoint a group of experts as required.
6. During the time that NG is not acting as operator, NG will be entitled to
send specialist representatives to the administrative and engineering divisions
of DIPC involved in the oil field operations to work alongside the staff of the
operator. DIPC will have the same privilege when NG is the operator.
7. Specific responsibilities and work procedures within the JMC will be
discussed and decided upon by the JMC in accordance with the relevant
stipulations of this Agreement.
8. NG will assist DIPC in handling customs formalities, in acquiring the
various permits and licenses that may be necessary in connection with this
Agreement, in procuring office space and transportation and communications
facilities and in providing the necessary resources for ensuring adequate living
and working conditions for DIPC personnel in the Slovak Republic, in contacts
and coordination with government departments (ministries), in relevant matters
arising from this Agreement in the relevant time frame, as this appears
necessary, and likewise generally provide assistance under necessary and
reasonable circumstances. All costs associated with such assistance will be
charged to the Joint Subaccount.
B. Operator
The Association Members agree that DIPC will act as operator during the
period of Test Phase and during all subsequent drilling and testing operations.
The parties agree that NG will act as operator during the period of producing
operations . NG will take over producing operations from the operator at the
conclusion of the drilling and testing period at each individual well.
1. The duties of the operator will be as follows:
. to utilize appropriate modern technology and commercially proved
experience in such a way as to carry out all oil field operations
in a rational manner, economically and efficiently and in
accordance with sound international practice.
. to draw up work programs and budgets for oil field operations
and carry out approved work programs within budget.
. to be responsible for procuring equipment and supplies and
for concluding subcontracts and contracts for services relating
to drilling-producing operations, in all cases in accord with
the approved work program and budget.
. to keep complete and accurate records of all costs and
expenditures associated with oil field operations and to
maintain the account books in good order.
. to submit reports to the JMC on the progress of the work and
on the overall situation in a timely fashion.
. to make arrangements for regular JMC meetings and to provide
this body with information relating to matters to be reviewed
and approved by the JMC.
2. In the course of conducting drilling-producing operations, the operator
will be responsible only for direct damages, if these occur due to gross
negligence or were intentionally caused by the staff (personnel) of the
operator.
3. In the course of conducting oil field operations, the operator will provide
information, specimens, and reports as provided below:
. the operator will provide the other (non-operator) Partner with
the various types of information and data required under this
Agreement.
. during the Test Phase and drilling phase-production operations,
DIPC will have the right to copy and utilize relevant data on the
wellbore and the reservoir, as well as technical information
without obtaining the consent of NG. The expenses involved in
copying materials will be the sole costs related to these
materials that NG will charge to the Joint Subaccount.
. at the request of either party to this Agreement, the operator
will provide all information relating to oil field operations
such as: information on the status of oil field operations, on
production from each well, and on the status of the production
method of the individual ▇▇▇▇▇.
4. The procedure for the gradual takeover of production operations by NG will
be agreed by the JMC for each individual well. The transfer will take place at
the well within fifteen (15) days from the date on which commercial production
begins at each individual well.
Article VI.
Procedures for Conducting Joint Activity
1. The operator of the production operations must draw up a plan for producing
hydrocarbons from each well completed for Commercial Production ("CP Well") for
each calendar year based on the production profile of each well and perform
production operations according to this plan.
2. NG will be responsible for the implementation used to produce hydrocarbons
from each CP Well drilled under this Agreement and also for the transport of the
hydrocarbons to market. Thirty (30) days prior the commencement of commercial
production from each CP Well, NG will submit its procedure for the production
and sale of the hydrocarbons, which will contain the measures which the parties
to this contract will submit to the JMC for approval. All costs arising in
connection with the transport and marketing of produced hydrocarbons will be
charged to the Joint Subaccount and paid from it.
3. Sample testing and analysis of crude oil and gas.
3.1 Sample testing of extracted crude oil will be performed by both the
extractor and an independent inspection organization according to STN (State
Technical Standard) 65 6005.
3.1.1 The analysis of crude oil will be performed on the sample of both
the extracted and the control sample by the extractor for each individual
delivery in this extent:
. Density at 20 0C/kg/m3/according to STN 65 6010 and density
in API degrees.
. Viscosity at 20 .C according to STN 65 6216 c/mPa *s/.
. Distillation test according to ASTM D 86.
. Water content according to STN 65 6062, ASTM 174483 c/ %/.
. Mechanical impurities content according to STN 65 6219/ % /.
. Sulfur content according to STN 65 6127/%/.
. Oil solidification point according to STN 65 6072/. C/.
3.1.2 The control analysis will be done every quarter year (in relation
to the amount in metric tons) by an independent organization as determined by
the JMC in this extent:
. Chromatographic analysis of crude oil.
. Density at 20 .C/kg/m3/according to STN 65 6010 and density in
API degrees.
. Viscosity at 20 .C/mPa * s/.
. Point of ignition/.C/.
. Solidification point /. C/.
. Solidification point of the distillation remainder (above 330 .C)
/.C/.
. Solid paraffin content/ % of mass/.
. Asphalt-pitch substances/ % of mass/.
. Acid value/mg.KOH/g/.
. Molecule weight.
. Refractive index.
. Sulfur content/ % of mass/.
3.2 Sampling of gas will be performed in accordance with STM 38 5561 and
ISO 6712 by the producer NG and the independent organization.
3.2.1 The analysis of natural gas will be performed according to STM 38
6101 by both the
producer NG and the independent organization in this extent:
. Overall chromatographic analysis according to STN 38 5562,
from which follows also percent content of methane, ethane,
propane, i-butane, e-butane, i-pentane, sum of higher
hydrocarbons, nitrogen, and CO2.
. Dew Point according to STN 38 5573
. Burn heat, heat value, density, and relative density
according to STN 38 5572.
. Hydrogen sulfite content /mg/m2/ according to STN 38 5565
or by detection probes in the sense of STN 38 6101, Art.17.
3.2.2 The control measurement of quality will be performed once every
quarter year by an independent organization with an additional determination of
overall sulfur content.
4. Amount of Oil and Gas:
. Content of hydrocarbons extracted from each KT probe will be
measured by measurement instruments used by NG.
. Business measurements will be done by the equipment used by NG.
These will conform to STN and will be approved by the Office
for Standardization and Measurement in Bratislava.
. Measurement conditions will be included in the "Technical
Delivery Conditions" agreed to mutually by the supplier and
the buyer.
5. Setting the price of the produced hydrocarbons:
. The prices of the various types of hydrocarbons will be
calculated as the price F.O.B. place of delivery.
. The price of the oil produced from all ▇▇▇▇▇ under this
Agreement will be cited in Sk/ton.
. The price of gas produced from all ▇▇▇▇▇ under this Agreement
will be cited in Sk/m3.
6. Marketing:
. Unless the Association Members agree otherwise, the
Association will be responsible to negotiate and conclude
the marketing of all the hydrocarbons.
7. Transportation of the hydrocarbons.
. Hydrocarbons from all ▇▇▇▇▇ will be assigned for
transportation to the place of sale by any transport
system of NG.
8. Production of hydrocarbons:
. The Association Members will make reasonable efforts to
ensure that all ▇▇▇▇▇ produce the maximum efficient amount.
9. The procedure for shutting down nonproductive ▇▇▇▇▇ and rehabilitation
after the conclusion of commercial activity will be determined in a mutual
agreement between the Association Members.
Article VII.
Financial Administration
1. The Association Members have agreed that gross revenues and gross expenses
accounting shall be done monthly.
2. JMC shall decide on the use of the Association's free financial means.
3. All gross revenues and gross expenses are to be split equally between the
Association Members after the accounting period, which ends on Dec. 31 of that
year.
4. A double entry account is kept by the Association, pursuant to Act 563/91
Zb.
Article VIII.
Ownership Ratio
A. Property acquired by joint activity becomes the joint property of all
Association Members. The proportions for acquired property are as follows:
DIPC 50%
NG 50%
B. Financial resources, current financing of the joint project, and sole risk.
1. All financial resources required for drilling-production operations and
resources for the defined exploration program will be provided as follows:
a) during the Test Phase and the possible Production Phase 1, all
expenses will be covered by DIPC and NG as described in Article III of this
Agreement until the minimum investment allocated to the work program of the
Test Phase or Production Phase 1 is exhausted.
b) following the exhaustion of the minimum investment for the work
program of the Test Phase - as specified in Article III of this Agreement -
the two Association Members will share the financing according to the
arrangement for the Production Phase 1 as specified in Article III of this
Agreement.
c) following the exhaustion of all possible investment resources
allocated to the production program of the Production Phase 1 as specified
in Article III, the two Association Members will finance further work in
equal measure.
2. Operating costs, as well as all maintenance and repair investments, that
will be required for production operation, will be financed from the subaccount
of the Association; if there are insufficient funds in this subaccount, the
operator will determine the amount required and request financial contributions
from both NG and DIPC proportional to their commitments as described in Article
III of this Agreement. It is not permitted to commence any operation until
funds adequate to pay for it are available in the subaccount.
3. If, during the Production Phase of operations, production falls below the
level necessary to maintain commercial operation, DIPC will be entitled to
implement as soon as possible, after first obtaining the Agreement of NG, the
following decisions:
. to take other technical measures to increase production from
the CP Well; or,
. to declare that commercial production from the given CP Well
has ceased.
4 NG will administer the Association. Administration is understood to mean
maintaining the joint subaccount of the Association, and all accounting,
personnel, and inventory records. The costs associated with administration will
be charged to the Association. Association expenses also include the costs
associated with establishing the Association and with its activity (JMC meetings
and the like).
5. Any party to this Agreement may submit proposal for any drilling, testing
and production operation or exploration well to the JMC for approval. If the
JMC does not unanimously approve the operation, the Party proposing the
operation may undertake the work at its own cost and risk. If the work results
in a CP Well, that Party bearing the sole risk shall:
. Recover 200% of the direct investment in a well drilled into
an existing field from the production from the wellbore.
. Recover 400% the direct investment in a new field wildcat.
Article IX.
Training Local Personnel and Transfer of Technology
In the course of implementing this Agreement, DIPC will apply its
appropriate and modern technology and experience with management, including its
own technology, i.e., patents, know-how, or other technology. DIPC may, as
required, train NG personnel and transfer technology, know-how and experience,
as well as data or information, as the Association Members agree, to NG and its
affiliates, on the condition of appropriate confidentiality and protection of
patent rights, in accordance with Slovak regulations.
Article X.
Operations at ▇▇▇▇▇ and Their Management
1. The production period of each CP Well begins on the date on which
commercial production commences from the given well and will continue until such
time as the production from the CP Well falls to a level at which production
does not cover operating costs.
2. In the event that the partners agree to temporary interruption of
production of a CP Well, the relevant period for halting production and the
organization of maintenance operations during the period of interruption will be
proposed by the operator and agreed by the JMC. If the JMC should not agree on
renewing production after the expiration of the period of the interruption as
determined by the JMC, then the partner who wishes to restore production will
have the right to carry out restoration at its own risk and expense and to the
benefit from producing the CP Well under the condition set forth in Article
VIII.B.
3. After the completion of drilling-production operations at any wellbore,
should it become evident that a level of production sufficient to be commercial
cannot be obtained from all the horizons drilled - based on joint interpretation
and agreed by the JMC - a plug will be placed in the well and the well will be
abandoned in compliance with relevant legal regulations.
Article XI.
Confidentiality Agreement
1 While the Association is active, all Association Members are obligated to
keep and protect business secrets concerning all circumstances of a commercial,
production, or technical nature associated with the Association that have actual
or even potential tangible or intangible value and are not generally known in
the relevant business circles.
2. Violation of commercial confidentiality is behavior whereby the violator of
the confidentiality agreement without authorization conveys to another person
commercial information accessible to him or to another that can be taken
advantage of by competitors and about which he has learned:
a) by being informed of the information or by becoming aware of it
from technical proposals, instructions, drawings, models, samples, studies,
and the like based on his participation in the Association, or based on
some other relationship to it,
b) or by his own or another's behavior contrary to the law.
3. Violation of these provisions on maintaining business confidentiality
constitutes the factual basis for unfair competition, and the JMC has the right
to decide on utilizing legal remedies to protect against such unfair
competition.
4. With exception of cases directly stated by Slovak Law/tax, safety and
health at work, fire, environment standards, Annual report of NG, etc./, the
Member of the Association shall not disclose any information about the
Association without prior written approval of the other
Member.
In case DIPC will request information, which is subject of state, military
or other secret as specified by Slovak law, this information will be handed over
to DIPC only after approval of the state organs.
Article XII.
Assignment
1. DIPC may concede a part or all of its rights and obligations under this
Agreement to an affiliate under the condition that NG agrees to this in advance
and in accordance with the following provisions:
a) the acquirer (company) shall provide NG with a copy of the
written Agreement relating to that portion of the rights and obligations to
be acquired.
b) the acquirer (company) shall guarantee to NG, in writing, the
performance of the acquired rights and obligations.
c) no such assignment shall interfere with the conduct of oil field
operations.
2. Any Partner, who will be DIPC, may assign a portion or all of its rights
and obligations arising under this Agreement to any other third party on the
condition that such assignment shall be reviewed and approved by NG within
thirty (30) days.
Article XIII.
Force Majeure
1. Except for the disbursement of any payments under this Agreement, no party
to this Agreement shall be deemed a Party in default in the performance of any
obligation if the impossibility of or delay thereof is due to the following
circumstances:
a) performance of any obligations under this Agreement is prevented,
delayed, or postponed due to any event or combination of events that the
affected Partner could not foresee, or having been foreseen, were beyond
his ability to control.
b) any event or combination of events is a direct cause that
prevents, delays, or hinders the affected Partner from performing its
obligations under this Agreement.
c) if, in the event of such an event or combination of events
occurring, the Partner makes every reasonable effort to deal with the cause
or causes that prevent, delay, or hinder fulfillment of its obligations,
and if the affected Partner immediately or as soon as practically possible
after cessation of these causes continues in fulfillment of its obligations
under this Agreement.
2. The affected Partner must notify the other Partner of the onset of any
instance of force majeure and its cessation. The Partner affected by the action
of force majeure must provide the other Partner, within a reasonable time, of
reports submitted to the relevant authorities, or other evidence of the action
of force majeure, if this is necessary.
3. In the event of the event of force majeure, the Association Members will
immediately begin consultations in an effort to find an appropriate solution
that will minimize the effects of the action of force majeure.
ARTICLE XIV.
Term of the Agreement
The term of the Agreement is twenty-five (25) years.
ARTICLE XV.
Governing Law
1. The validity, interpretation, and implementation of this Agreement are
governed by the law of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
▇. If, however, after this Agreement becomes effective, a material change
should occur in the economic benefits to DIPC resulting from the announcement of
new laws, decrees, rules and regulations, or due to any alteration to an
applicable law, decree, rule or regulation by the government of the Slovak
Republic, then the parties to this Agreement will immediately discuss these
alterations and revise and amend the relevant provisions of the Agreement in
such a way that the economic benefits to DIPC will be preserved in a reasonable
fashion. All alterations to the Agreement are subject to unanimous approval by
the JMC.
3. All Association Members are governed by Slovak law, and Slovak legal
procedure is mandatory for them.
Article XV.a
Arbitration Clause
The Association Members have agreed, that any dispute arising from this
Agreement shall be solved by The Vienna Arbitration Court In Vienna.
Article XVI.
Termination (liquidation) of the Association
1. The Association may be terminated or liquidated:
a) by the unanimous decision of the JMC.
b) upon achieving the purpose of the Association.
c) upon expiration of the term for which the Association was established.
2. Upon termination of the Association the property acquired by joint activity
is divided equally among the Association Members. The division will be made no
later than sixty days from the date of termination of the Association and will
be made by NG. NG shall have the right to buy out the share of DIPC first, for
the market value.
Article XVII.
Language of the Agreement and Working Language
1. The text of the Agreement, its attachments and supplementary documents, if
attached to this Agreement, will be written both in Slovak and in English, with
both language versions having equal legal force and effectiveness.
2. The Association Members agree that both Slovak and English will be used as
working languages.
After the effective date of this Agreement, technical documentation and
information relating to oil field operations conducted under this Agreement
shall generally be written in English and in Slovak.
Documents and information relating to administrative matters will be
written in Slovak and in English. Production forms and other reports and
notices will be printed in both Slovak and English and will be filled out in
Slovak and English.
3. All notices related to this Agreement must be in writing and will be valid
only if received by every party to this Agreement. Notices and documents of the
Association Members must be delivered personally, or sent by mail as registered
or air mail, or must be sent by fax, telegraph, or cable to the addresses below:
NG: DIPC:
908 45 GBELY ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇▇▇ ▇▇▇ ▇▇▇ Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇▇▇ ▇▇▇ ▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
RNDr. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
Director of Geology President
Article XVIII.
Date on Which the Agreement Takes Effect
This Association Agreement shall become effective on the date on which it
is signed (the Effective Date) by both Association Members. All attachments to
this Agreement must be in writing; otherwise they are invalid. They form an
integral part of the Agreement. If there is a conflict between the Agreement
and an attachment the text of the Agreement prevails.
In other matters the Agreement is subject to provisions of the Civil Code
(Section 829 - Section 041).
Article XIX.
Temporary and Final Conditions
1. The Association Members have read the Agreement and declare that they are
signing it voluntarily and not under compulsion and not under conspicuously
disadvantageous conditions. As acknowledgment of their Agreement with its
entire contents the partners hereto set their signatures.
Each Partner shall receive two copies of the Agreement in Slovak and two
copies in English.
2. Attachments to the Agreement are as follows:
A. EXHIBIT A: MAP OF AM1 1 AND AM1 2
B. EXHIBIT B: SCHEDULE OF ACTIVITIES
C. DEFINITIONS
D. COORDINATES OF AMI I AND AMI 2
Signatures
BRANCH 1N SLOVAKIA OF
NAFTA a.s. GBELY DANUBE INTERNATIONAL
PETROLEUM COMPANY
Stamp of Nafta Gbely Represented by the Head
of the Branch in Slovakia
signature illegible signature illegible
RNDr. .▇▇▇▇▇ ▇▇▇▇▇
member of the Board of Directors
signature illegible
Ing. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Member of the Board of Directors
over: notarized signatures of Csekesova ▇▇▇▇▇. Ing. ▇▇▇▇▇. Ing. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLD. Bratislava, Notary Public 13.07. 1 995
signatures of Notary's representative
