Administration Agreement
The Nigeria - Sao Tome and Principe Joint Development Authority
And
Environmental Remediation Holding Corporation
CONTENTS
CLAUSE PAGE
1. DEFINITIONS............................................................................................3
2. INTERPRETATION.........................................................................................5
3. IMPLEMENTATION OF ERHC'S RIGHTS........................................................................5
4. REPRESENTATIONS AND WARRANTIES.........................................................................7
5. MISCELLANEOUS..........................................................................................8
6. NOTICES................................................................................................9
7. CONFIDENTIALITY.......................................................................................10
Annex A......................................................................................................12
Option Agreement.............................................................................................12
Annex B......................................................................................................38
Exercise Notice..............................................................................................38
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THIS AGREEMENT is made on the 7th Day of April, 2003
BETWEEN:
(1) The Nigeria and Sao Tome and Principe Joint Development Authority
established by a treaty done on 21 February 2001 between the Federal
Government of Nigeria and the Democratic Republic of Sao Tome e
Principe (the "JDA"); and
(2) Environmental Remediation Holding Corporation a company incorporated
in the State of Colorado in the United States of America with a place
of business at Xxxxx 0000, 0000 Xxxxxxxxxx, Xxxxxxx, Xxxxx, XXX
("ERHC"),
(each a "Party").
WHEREAS:
(A) In a treaty done on 21 February 2001 (the "Treaty") the Federal
Government of Nigeria ("FGN") and the Democratic Republic of Sao Tome
e Principe ("DRSTP") agreed to jointly develop the natural resources
of an area of the exclusive economic zones between their respective
territories in respect of which their maritime claims overlap (the
"JDZ").
(B) In the Treaty, FGN and DRSTP agree to cooperate regarding prior
dealings with third persons in respect of any part of the JDZ in an
equitable manner.
(C) DRSTP and ERHC entered into an agreement in relation to prior dealings
on 21 May 2001 (the "MoA").
(D) On 2 April 2003 ERHC and DRSTP agreed to further arrangements in
respect of the JDZ and the MoA on the terms of the Option Agreement.
OF) on 4 April 2003 the JMC approved the entry by the JDA into this
agreement with ERHC (the "Agreement") in order to implement and
administer ERHC's rights in respect of the JDZ pursuant to the MoA and
the Option Agreement.
THE PARTIES AGREE AS FOLLOWS:
1. DEFINITIONS
In this Agreement:
"Block" means an area designated as an individual unit for the
exploration and/or production of hydrocarbons within the JDZ under the
JDZ Regulations;
"ERHC Selections" means the Blocks in respect of which ERHC wishes to
exercise its rights pursuant to the Option Agreement to acquire
working interests in the JDZ and in respect of which it has so
notified the JDA in writing;
"Exercise Notice" means the notice set out in Annex B;
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"ExxonMobil" means ExxonMobil Corporation or any affiliate or member
of the ExxonMobil group or any of their successors or assigns;
"ExxonMobil Agreement" means the agreement between DRSTP and
ExxonMobil dated 22 February 2003 pursuant to which ExxonMobil is
entitled to acquire certain working interests in the JDZ on a
preferential basis;
"ExxonMobil Information Date" means the date on which ExxonMobil first
receives information from JDA in order to enable ExxonMobil to
exercise its rights pursuant to the ExxonMobil Agreement;
"ExxonMobil Selections" means the Blocks in respect of which
ExxonMobil wishes to exercise its rights pursuant to the ExxonMobil
Agreement to acquire working interests in the JDZ and in respect of
which it has so notified the JDA in writing;
"ExxonMobil Selection Date" means the date on which JDA notifies ERHC
in writing of the ExxonMobil Selections;
"Final Information Date" means the date one week after the ExxonMobil
Information Date;
"JDZ Regulations" means the Treaty and all laws, regulations,
guidelines or similar instruments adopted by JDA pursuant to JDA given
to JDA by the Treaty;
"JMC" means the Joint Ministerial Council established pursuant to the
Treaty;
"Licensing Round" means any process administered by the JDA in which
persons bid and/or apply for and/or are awarded licences to explore
for and/or exploit the hydrocarbon resources of the JDZ;
"Option Agreement" means the agreement between DRSTP and ERHC dated 2
April 2003 pursuant to which ERHC is entitled to acquire certain
working interests in the JDZ on a basis preferential to the Licensing
Round;
"PSC" means any production sharing agreement or other grant of rights
entered into between a person or persons and JDA to explore for and/or
exploit hydrocarbon resources and/or to acquire working interests or
similar rights in the JDZ;
"Signature Bonus" means amounts payable by a person to JDA to acquire
the right to sign a PSC;
"Successful Bid" means the bid made by a person during a Licensing
Round to acquire a PSC in respect of a Block which JDA has accepted;
"Tender Documentation" means the documentation made available relating
to a Licensing Round.
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2. INTERPRETATION
2.1 The headings and paragraphs in this Agreement are for ease of
reference only and are to be ignored in construing its substantive
provisions.
2.2 Words denoting the singular shall include the plural and vice versa.
2.3 A reference to a Party includes its permitted assignees and/or
successors in title and/or any venture or consortium of which it is
part.
3. IMPLEMENTATION OF ERHC'S RIGHTS
3.1 The JDA acknowledges that:
(a) It is fully aware of the terms and the rights granted to ERHC by
DRSTP in respect of the JDZ pursuant to the Option Agreement
attached to this Agreement at Annex A;
(b) ERHC has subject to certain restrictions on choice set out in the
Option Agreement been granted rights by DRSTP under the Option
Agreement to:
(i) nominate a Block and acquire a 15% working interest in that
Block;
(ii) nominate a second Block and acquire a 15% working interest
in that Block;
(iii) nominate a third Block and acquire a 20% working interest
in that Block;
(iv) nominate a fourth Block and acquire a 30% working interest
in that Block;
(v) nominate a fifth Block and acquire a 25% working interest in
that Block; and
(vi) nominate a sixth Block and acquire 20% working interest in
that Block;
(c) Subject to any obligation to purchase an initial 3-D seismic
survey as set out in clause 4.4 of the Option Agreement, ERHC
will not be subject to any further condition, criteria,
restriction or further requirement in order to exercise the
rights granted to it pursuant to the Option Agreement and
properly and fully acquire any or all of those working interests
except the payment of certain Signature Bonuses and applicable
taxes, fees and charges as set out in clause 4.3 of the Option
Agreement; and
(d) the arrangements set out in the Option Agreement were approved by
the JMC on 4 April 2003,
and the JDA agrees to do all things necessary to enable ERHC to
properly exercise and enjoy the rights granted to it pursuant to the
Option Agreement, including (but not limited to) observing the
provisions of this clause 3.
3.2 Following the acceptance by it of Successful Bids in respect of every
Block for which a PSC is to be awarded during a Licensing Round the
JDA will, subject to clause 3.9, so notify ERHC in accordance with
clause 3.3 and, contemporaneously with such notification, provide all
material information relating to every Successful Bid including (but
not limited to) details of:
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(a) any Signature Bonus and all other financial payments and
commitments;
(b) all finally agreed terms and conditions of the PSC and any other
relevant contractual agreements;
(c) the identities of all relevant parties and the Block to which
each Successful Bid relates; and
(d) any future work or other commitment.
3.3 The notification and information described in clause 3.2 will be
delivered to ERHC by the earlier of:
(a) ten days from the acceptance by the JDA of the last of the
Successful Bids to which clause 3.2 refers; and
(b) the ExxonMobil Information Date.
3.4 Prior to the Final Information Date, ERHC may at any time request any
further information it reasonably requires from the JDA in respect of
any Successful Bid and the JDA will use its best endeavours to
promptly provide such information.
3.5 The JDA will inform ERHC of the ExxonMobil Selections as soon as
possible but in any event no later than seven days after receiving
them.
3.6 ERHC agrees to notify the JDA of the ERHC Selections by forwarding one
notice substantially in the form of the Exercise Notice to the JDA in
respect of each of them and the JDA agrees that no further action is
required by ERHC in order to properly exercise and enjoy the rights
granted to it under the Option Agreement.
3.7 ERHC may notify the JDA of each of the ERHC Selections together or
separately, but in any event will complete this process of
notification by the later of:
(a) the date 45 days after the Final Information Date; and
(b) the date 15 days after the ExxonMobil Selection Date.
3.8 Following receipt by the JDA of an Exercise Notice notifying the JDA
of an ERHC Selection, the JDA will within ninety days of such receipt:
(a) grant all such approvals and/or do all such things as may be
necessary for ERHC to obtain title which is proper and effective
against all third parties and in respect of the JDZ Regulations
to each and all of the interests to which it relates pursuant to
the Option Agreement; and
(b) forward to ERHC evidence of such approvals and/or things in a
form reasonably satisfactory to ERHC.
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3.9 The obligations of the JDA pursuant to clause 3.2 of this Agreement
will cease upon the date on which all working interests to which ERHC
has rights pursuant to the Option Agreement have been granted by the
JDA to or as directed by ERHC and fully, irrevocably and
unconditionally vested in ERHC.
3.10 The JDA will include in all Tender Documentation information which is
accurate and sufficient to notify all bidders and otherwise interested
persons regarding:
(a) ERHC's rights in respect of the JDZ pursuant to the Option
Agreement; and
(b) the exercise and implementation of those rights pursuant to the
Option Agreement and this Agreement.
4. REPRESENTATIONS AND WARRANTIES
4.1 ERHC represents that it:
(a) is a duly formed corporate entity and currently exists in good
standing under the laws of its place of incorporation, and that
it has full power and authority to execute this Agreement; and
(b) has not gone into liquidation, made a general assignment for the
benefit of creditors, declared or been declared bankrupt or
insolvent by a competent court or had a receiver appointed in
respect of the whole or any part of its assets and has no plans
to do so.
4.2 The JDA represents, warrants and undertakes that:
(a) the person or persons executing this Agreement on its behalf has
or have full authority to commit the JDA to this Agreement and
the obligations set out in it and has or have the requisite
approvals of the JMC to do so;
(b) no obligations of confidentiality to any person or persons do or
will prevent or in any way restrict its ability to provide all
the information contemplated by clause 3.2 of this Agreement;
(c) all Successful Bids will be bids which the JDA, acting
reasonably, considers to be bona fide and made by technically and
financially competent persons;
(d) none of the JDZ Regulations nor any contracts or agreements to
which the JDA is a party are currently in existence, nor have any
rights been granted by the JDA to any other person, including
ExxonMobil, that would hinder or prohibit the implementation
and/or enforcement of, or are in any way inconsistent with, any
of the terms of this Agreement;
(e) in the event that any JDZ Regulations or any other rule,
regulation or order are issued or promulgated into law, or any
contract, agreement or arrangement is entered into by the JDA,
the JDA will ensure that all such JDZ Regulations, rules,
regulations, orders, contracts, agreements or arrangements are
consistent with rights of ERHC pursuant to this Agreement and
Option Agreement; and
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(f) it is not, and will not become, subject to any obligations of
confidentiality which prevent it from performing any of the
provisions of this Agreement.
5. MISCELLANEOUS
5.1 This agreement and all negotiations leading to it shall be in English
language and governed by the laws of England and Wales and the courts
of England and Wales shall have exclusive jurisdiction.
5.2 For any dispute arising out of or in connection with the Agreement,
including any question of existence, validity or termination, the JDA
and ERHC shall first make every effort to reach an amicable settlement
by direct negotiation. In case of failure to reach an amicable
settlement, the dispute shall be referred to and finally resolved by
arbitration under the UNCITRAL arbitration rules. The tribunal shall
consist of three arbitrators, one appointed by the JDA, one appointed
by ERHC and the third by a unanimous decision of the Parties. The place
of arbitration shall be London, England. The tribunal may hold hearings
at locations other than London for the convenience of the Parties. The
language of arbitration shall be English. Each Party shall bear its own
costs and expenses of arbitration.
5.3 Where ERHC transfers to a technically and financially qualified person
any or all of the working interests to which this Agreement relates in
accordance with the Option Agreement, the JDA will within fourteen
days:
(a) grant all such approvals and/or do all such things as may be
necessary to recognise and give effect to such arrangement or
transfer; and
(b) forward to ERHC and/or the transferee or transferees evidence of
such approvals and/or things in a form reasonably satisfactory to
ERHC.
5.4 Each Party undertakes to execute all such documents, permits or
agreements, and do all such things and acts as may be necessary to give
effect to the intention of this Agreement.
5.5 The JDA agrees that if an arrangement of any kind is being negotiated
or agreed between DRSTP and ERHC pursuant to clause 8.1 of the Option
Agreement, the JDA will co-operate with any reasonable request of ERHC
to assist in the resolution of that process, the development of
alternative arrangements as contemplated by that provision and the
implementation within the JDZ of any relevant arrangements agreed. ERHC
will bear any out-of-pocket costs and expenses incurred by the JDA in
undertaking this process.
5.6 The JDA hereby acknowledges that actions and obligations pursuant to
this Agreement that it may undertake in respect of itself or any of its
assets are commercial actions and do not in any way or in any part
constitute an Act or Acts of State.
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6. NOTICES
6.1 Any notice or other communication to be given by one Party to the
other in connection with this Agreement will be addressed to the
recipient and forwarded to the address or facsimile number of such
other Party as follows:
JDA:
The Chairman of the Executive Board
Joint Development Authority
Xxxx 0000 Xxxxx Xxxx Xxxxxxxx
Xxxx XX, Xxxxx
Xxxxxxx
Telephone Number: x000 0 000 0000
Facsimile Number: x000 0 000 0000
ERHC:
The President and Chief Executive Officer
Environmental Remediation Holding Corporation
0000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxx, 00000
Xxxxxx Xxxxxx of America
Telephone Number: x0 000 000 0000
Facsimile Number: x0 000 000 0000
6.2 Any notice, communication or information to be given by any Party to
any other Party in connection with this agreement shall be in writing
and shall be given by letter or facsimile except that:
(a) the notification and all information which the JDA provides to
ERHC pursuant to clause 3.2 of this Agreement will be forwarded
to ERHC by courier unless the Parties agree otherwise; and
(b) Exercise Notices will be forwarded by ERHC to the JDA by courier
unless the parties agree otherwise.
6.3 Unless actual receipt is proved to have occurred at any other time a
notice, communication or information shall be deemed to have been
received:
(a) in the case of delivery by hand, when delivered;
(b) in the case of a courier, on the fifth day following despatch;
(c) in the case of post, on the twenty first business day following
the day of posting; or
(d) in the case of facsimile, on acknowledgement by the addressee's
facsimile receiving equipment (where such acknowledgement occurs
before 17.00 hours local time of the recipient on the day of
acknowledgement) and in any other case on the day following the
day of acknowledgement by the sender's facsimile transmission
equipment.
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7. CONFIDENTIALITY
Neither Party nor their agents or employees will divulge the contents
of this Agreement or any information relating to it without the
consent of the other Party, however this clause will not apply to
information which is in the public domain other than as a breach of
this Agreement or which is divulged:
(a) as required by law, regulation, security exchange rules or public
listing requirements;
(b) to a court, arbitrator or tribunal in the course of proceedings
to which the discloser is a party;
(c) to employees, agents or consultants of a Party to the extent that
such disclosure is reasonably necessary;
(d) to prospective or actual commercial partners, investors or
financiers (and their employees, agents and consultants) who owe
appropriate duties of confidentiality to the discloser; or
(e) pursuant to clause 3.10 of this Agreement.
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IN WITNESS WHEREOF
Signed by )
Xx Xxxxxxxx Xxxx )
Chairman of the Executive Board )
for and on behalf of:
The Joint Development Authority
Signed by )
Xx Xxxxx Mba )
President and Chief Executive Officer )
for and on behalf of:
Environmental Remediation Holding Corporation
Witnessed by )
Mr. Xxxxxx dos Xxxxxx )
Executive Director (Sao Tome and Principe) )
The Joint Development Authority )
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