Option Agreement
The Democratic Republic of Sao Tome e Principe
and
Environmental Remediation Holding Corporation
CONTENTS
CLAUSE PAGE
1. DEFINITIONS............................................................................................3
2. INTERPRETATION.........................................................................................5
3. RELINQUISHMENT OF RIGHTS BY ERHC.......................................................................5
4. RIGHTS OF ERHC.........................................................................................5
5. JDZ JOINTAUTHORITY AND JOINT MINISTERIAL COUNCIL.......................................................7
6. CONTINUANCE OF MoA.....................................................................................8
7. REPRESENTATIONS AND WARRANTIES.........................................................................8
8. MISCELLANEOUS..........................................................................................9
9. CONFIDENTIALITY.......................................................................................10
10. NOTICES...............................................................................................10
Annex A......................................................................................................13
Administration Agreement.....................................................................................13
Annex B......................................................................................................14
Map ......................................................................................................14
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THIS AGREEMENT is made on the 2nd of April, 2003
BETWEEN:
(1) The Democratic Republic of Sao Tome e Principe ("DRSTP"); 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) DRSTP and ERHC were party to certain arrangements relating to oil, gas
and mineral reserves which were submitted to dispute resolution by
arbitration (the "Arbitration").
(B) In a treaty done on 21 February 2001 (the "Treaty") the Federal
Government of Nigeria ("FGN") and 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").
(C) In the Treaty, FGN and DRSTP agreed to cooperate regarding prior
dealings with third persons in respect of any part of the JDZ in an
equitable manner.
(D) DRSTP and ERHC entered into an agreement on 21 May 2001 in order to
settle the Arbitration (the "MoA").
(E) DRSTP and ERHC have now agreed to further arrangements in relation to
the JDZ and the MoA on the terms of this agreement (the "Agreement").
THE PARTIES AGREE AS FOLLOWS:
1. DEFINITIONS
In this Agreement:
"Administration Agreement" means the agreement set out in Annex A;
"Block" means an area designated as an individual unit for the
exploration and/or production of hydrocarbon within the JDZ under the
JDZ Regulations;
"ERHC Override" means all amounts to which ERHC is entitled pursuant
to clause 3.3 of the MoA;
"ERHC Profit Oil Share" means all amounts to which ERHC is entitled
pursuant to clause 3.1 of the MoA;
"ERHC Signature Bonus Share" means all amounts to which ERHC is
entitled pursuant to clause 3.2 of the MoA;
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"ERHC Working Interest Option" means the option granted to ERHC
pursuant to clause 3.4 of the MoA;
"ExxonMobil" means ExxonMobil Corporation or any affiliate or member
of the ExxonMobil group;
"ExxonMobil Agreement" means the agreement between ExxonMobil and
DRSTP dated 22nd of February, 2003 pursuant to which ExxonMobil is
entitled to certain working interests in the JDZ on a preferential
basis;
"ExxonMobil Preferential Working Interest" or "EPWI" means a working
interest which ExxonMobil is entitled to acquire pursuant to the
ExxonMobil Agreement;
"First Licensing Round" means the first Licensing Round held in
respect of the JDZ;
"Final Relinquishment Date" means the earlier of the date on which:
(a) all working interests to which ERHC has rights pursuant to
this Agreement have been granted by the JDA to or as directed
by ERHC and fully, irrevocably and unconditionally vested in
ERHC; or
(b) the Take-Up Period relating to ERHC's final choice pursuant to
clause 4.1 of this Agreement expires;
"JDA" means the Authority established pursuant to Part Three of the
Treaty;
"JMC" means the Joint Ministerial Council established pursuant to Part
Two of the Treaty;
"JDZ Regulations" means the Treaty and all laws, regulations,
guidelines or similar instruments adopted by the JDA pursuant to the
authority given to the JDA and/or the JMC by 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;
"Map" means the map set out in Annex B;
"Preferential Working Interests" or "PWI" means a paid working
interest acquired by ERHC pursuant to the rights granted in clause 4.1
of this Agreement;
"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 any funds payable to the JDA pursuant to the
JDZ Regulations to acquire the right to sign a production sharing
contract or other grant of rights to explore for and/or exploit the
hydrocarbon resources of the JDZ;
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"Subsidiary" means any entity in respect of which a Party, or any
venture or consortium of which a Party is part, is in a position to
exercise control over corporate decision making and function;
"Take-Up Period" means, in respect of any one of the working interests
to which ERHC has rights pursuant to clause 4.1, a reasonable time
from the date on which the JDA provides a bona fide opportunity as
part of a Licensing Round in accordance with the procedure set out in
the Administration Agreement for ERHC to exercise any or all such
rights;
"Tender Documentation" means the documentation made available relating
to a Licensing Round.
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, successors in
title and/or any venture or consortium of which it is part.
2.4 $ means United States Dollars.
3. RELINQUISHMENT OF RIGHTS BY ERHC
ERHC agrees to relinquish its rights pursuant to the MoA in respect
of:
(a) the ERHC Signature Bonus Share;
(b) the ERHC Profit Oil Share;
(c) the ERHC Override; and
(d) the ERHC Working Interest Option,
(together, the "Relinquished Rights") in accordance with the procedure
set out in clause 6.
4. RIGHTS OF ERHC
4.1 In consideration of the relinquishment by ERHC pursuant to clause 3
and subject to this clause 4, DRSTP grants to ERHC the rights to:
(a) nominate a Block and acquire a 15% working interest in that Block
("Choice 1 Interest ");
(b) nominate a second Block and acquire a 15% working interest in
that Block ("Choice 2 Interest");
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(c) nominate a third Block and acquire a 20% working interest in that
Block ("Choice 3 Interest");
(d) nominate a fourth Block and acquire a 30% working interest in
that Block ("Choice 4 Interest");
(e) nominate a fifth Block and acquire a 25% working interest in that
Block ("Choice 5 Interest"); and
(f) nominate a sixth Block and acquire 20% working interest in that
Block ("Choice 6 Interest"),
all of which will be chosen from Blocks that correlate substantially
to the nine Blocks shown on the Map.
4.2 DRSTP and ERHC acknowledge that the rights granted to ERHC pursuant to
clause 4.1 of this Agreement are options that, if not exercised, will
lapse upon the expiry of their respective Take-Up Periods in
accordance with the terms of this Agreement.
4.3 Subject to clause 4.4, DRSTP undertakes that the only condition,
criteria, restriction or further requirement that ERHC must observe or
meet in order to exercise its rights under this Agreement and properly
and fully acquire any or all of the working interests referred to in
clause 4.1 is payment of the Signature Bonuses in the amounts set out
in Column 2 of the table hereunder, as well as all applicable taxes,
fees and charges adopted by the JMC and implemented by the JDA in
accordance with the procedure set out in the JDZ Regulations. For the
avoidance of doubt, ERHC will be beneficiary of not less favourable
treatment than the one that is granted to others:
------------------------------- ---------------------------------
Column 1 Column 2
Block Signature Bonus Payable
------------------------------- ---------------------------------
Choice 1 Interest $0.00
------------------------------- ---------------------------------
Choice 2 Interest 100% of that proportion of the
Signature Bonus for that Block
payable in respect of ERHC's 15%
PWI.
------------------------------- ---------------------------------
Choice 3 Interest $0.00
------------------------------- ---------------------------------
Choice 4 Interest $0.00
------------------------------- ---------------------------------
Choice 5 Interest $0.00
------------------------------- ---------------------------------
Choice 6 Interest 100% of that proportion of the
Signature Bonus for that Block
payable in respect of ERHC's 20%
PWI.
------------------------------- ---------------------------------
4.4 Subject to any obligation to purchase an initial 3-D seismic survey
from a specified seismic vendor, as may be set out in the terms and
conditions of a PSC by the JDA, the Parties agree that ERHC shall have
the right to conduct seismic activity in any Block it may select under
this Agreement.
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4.5 DRSTP agrees that notwithstanding the holding of any Licensing Round
the processes set out in the Administration Agreement will be the
processes by which ERHC or its nominee will be entitled to acquire full
and proper title to each PWI.
4.6 ERHC agrees that it will not exercise its right to acquire:
(a) the Choice 1 Interest in a Block where ExxonMobil has exercised a
right to acquire an EPWI of 40%;
(b) the Choice 2 Interest in a Block where ExxonMobil has exercised a
right to acquire an EPWI of 40%;
(c) the Choice 3 Interest in a Block where ExxonMobil has exercised a
right to an EPWI of either 25% or 40%;
(d) the Choice 4 Interest in a Block where ExxonMobil has exercised a
right to an EPWI of either 25% or 40%;
(e) the Choice 5 Interest in a Block where ExxonMobil has exercised a
right to an EPWI of either 25% or 40%; or
(f) the Choice 6 Interest in a Block where ExxonMobil has exercised a
right to an EPWI of either 25% or 40%,
but nothing in this Agreement will be taken to preclude ERHC from
bidding for and/or acquiring interests other than or in addition to a
PWI ("Additional Interest") in any Block where ExxonMobil has
exercised a right to acquire an EPWI provided that, in respect of the
Additional Interest, ERHC follows the normal processes and guidelines
for acreage bidding.
5. JDZ JOINTAUTHORITY AND JOINT MINISTERIAL COUNCIL
5.1 DRSTP undertakes that:
(a) this Agreement is approved by the JMC prior to or at the meeting
of the JMC where the JMC authorises the First Licensing Round to
be carried out;
(b) evidence which is reasonably satisfactory to ERHC of the approval
contemplated by clause 5(a) is provided to ERHC in writing within
seven days of being given;
(c) the execution by the JDA of the Administration Agreement is
approved by the JMC prior to or at the meeting of the JMC where
the JMC authorises the First Licensing Round to be carried out;
(d) evidence which is reasonably satisfactory to ERHC of the approval
contemplated by clause 5(c) is provided to ERHC within seven days
of being given;
(e) the JDA executes an agreement in the form of the Administration
Agreement prior to commencement of the Licensing Round; and
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(f) nothing in the JDZ Regulations or in any other relevant law,
regulation, rule, agreement or arrangement prevents, amends, or
is in any way inconsistent with the rights granted to ERHC
pursuant to this Agreement.
5.2 DRSTP acknowledges that the JDA has continuing obligations to comply
with the Administration Agreement and undertakes that the JDA performs
all such continuing obligations.
6. CONTINUANCE OF MoA
The parties agree that:
(a) relinquishment, because of expiry of a Take-Up Period in respect
of a choice of working interest pursuant to clause 4.1, will only
occur when ERHC is no longer in a position to exercise a future
right in such choice;
(b) subject to clause 6 (a), upon the vesting in ERHC of, or earlier
expiry of the Take-Up Period in relation to, any of the working
interests to which ERHC is entitled pursuant to clause 4, the
amounts to which ERHC is entitled pursuant to the Relinquished
Rights will be reduced by the amounts of any Signature Bonuses
waived by DRSTP in relation to such working interests in
accordance with this Agreement;
(c) the Relinquished Rights will only be relinquished in accordance
with this clause 6, and prior to the Final Relinquishment Date
all rights granted to ERHC pursuant to the MoA which have not
been relinquished will continue in full force and effect and be
enforceable by ERHC;
(d) on the Final Relinquishment Date, all rights in the Relinquished
Rights which have not been relinquished pursuant to this clause 6
will be relinquished in full by ERHC; and
(e) following the Final Relinquishment Date, all provisions of the
MoA which do not relate to the rights relinquished by ERHC
pursuant to this Agreement will remain in full force and effect
and, in particular, nothing in this Agreement is intended to
affect or amend the rights granted to ERHC pursuant to the MoA in
respect of the exclusive economic zone of DRSTP.
7. REPRESENTATIONS AND WARRANTIES
7.1 ERHC represents and warrants that:
(a) it is a duly formed corporate entity and currently exists in good
standing under the laws of its place of incorporation and it has
full power and authority to execute this Agreement;
(b) it 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; and
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(c) it has access to 2-D seismic survey covering the JDZ under a duly
executed Data Use Licence.
7.2 DRSTP represents, warrants and undertakes that:
(a) the number, designation, boundaries and respective sizes of the
Blocks will not be materially different to those shown on the
Map;
(b) the person or persons executing this Agreement on its behalf have
full authority to commit DRSTP to this Agreement;
(c) no laws, regulations, rules, contracts or agreements are
currently in existence that prohibit the enforcement of or
conflict with any of the terms of this Agreement;
(d) neither ExxonMobil nor any of its affiliates has or will be
granted any preferential right other than the right to acquire a
working interest of 40% in one Block and 25% in each of two
further Blocks; and
(e) neither DRSTP nor the JDA has entered into any contract or
agreement, or granted any other rights to another party
(including ExxonMobil) which would hinder or prohibit the
implementation and enforcement of, or in any way conflict with,
the terms of this Agreement or otherwise diminish ERHC's rights
under this Agreement and DRSTP will not, and undertakes that the
JDA will not, enter into any such contract or arrangement or
grant any such rights.
8. MISCELLANEOUS
8.1 DRSTP agrees that:
(a) should any law, regulation or rule be issued or promulgated into
law or any other act or thing be done by DRSTP or the JDA
(including without limitation any amendment to the JDZ
Regulations or issuance of a new rule in respect of the JDZ)
which have the effect of diminishing the economic value of or
materially adversely affecting ERHC's rights pursuant to this
Agreement or the MoA; and/or
(b) if the acreage of any Block offered in a Licensing Round is
materially less than that indicated on the Map,
DRSTP shall compensate ERHC either financially or through alternative
commercial arrangements that are reasonably acceptable to ERHC in
order to maintain the economic value to ERHC of such rights both
individually and in aggregate.
8.2 This agreement and all negotiations leading to it shall be governed by
the laws of England and Wales and the courts of England and Wales
shall have exclusive jurisdiction.
8.3 ERHC's interest in this Agreement shall be assignable in whole or in
part by ERHC to a Subsidiary without the consent of DRSTP, however
ERHC will give notice of any such assignment to DRSTP within 45 days
of such assignment being completed. The prior written consent of DRSTP
will be required if an assignment is made to a party which is not a
Subsidiary of ERHC, which consent will not be unreasonably withheld or
delayed by DRSTP.
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8.4 DRSTP undertakes to:
(a) grant all such approvals, 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; and
(b) if reasonably requested by ERHC in writing, forward to ERHC
evidence of such approvals, documents, permits and/or things
relevant to its rights and entitlements under this Agreement in a
form reasonably satisfactory to ERHC.
8.5 DRSTP acknowledges that the actions being undertaken by it in this
Agreement are commercial actions and do not in any way or in any part
constitute an Act of State.
9. CONFIDENTIALITY
9.1 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) to all potential bidders in a Licensing Round to ensure bidding
transparency.
10. NOTICES
10.1 Any notice or other communication to be given by one Party to the
other in connection with this Agreement will be in writing and will be
given by letter or facsimile addressed to the recipient and forwarded
to the address or facsimile number of such other Party as follows:
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DRSTP:
The Honourable Minister
Ministry of Public Works, Infrastructure, Natural Resources
and the Environment
P. O. Box 130
Sao Tome
Telephone Number: x000 000 000
Facsimile Number: x000 000 000
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
10.2 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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IN WITNESS WHEREOF
Signed by )
His Excellency, Xxxxxxx Xxxxxx Xxxxxx )
Minister of Public Works, Infrastructure, )
Natural Resources and the Environment )
for and on behalf of: )
The Democratic Republic of Sao Tome e Principe: )
Signed by )
Xx Xxxxx Mba )
President and Chief Executive Officer )
for and on behalf of:
Environmental Remediation Holding Corporation:
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Annex A
Administration Agreement
Administration Agreement
The Nigeria - Sao Tome and Principe Joint Development Authority
And
Environmental Remediation Holding Corporation
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CONTENTS
CLAUSE PAGE
1. DEFINITIONS...........................................................................................15
2. INTERPRETATION........................................................................................17
3. IMPLEMENTATION OF ERHC'S RIGHTS.......................................................................17
4. REPRESENTATIONS AND WARRANTIES........................................................................19
5. MISCELLANEOUS.........................................................................................20
6. NOTICES...............................................................................................21
7. CONFIDENTIALITY.......................................................................................22
Annex A......................................................................................................24
Option Agreement.............................................................................................24
Annex B......................................................................................................25
Exercise Notice..............................................................................................25
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THIS AGREEMENT is made on 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 ______ 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 _______,
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 its undertakings and obligations
pursuant to this Agreement do not constitute acts of state, and
irrevocably waives any rights of sovereign immunity which it or any of
its assets may have in connection with the performance or enforcement
of any rights or obligation under this Agreement.
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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... )
Executive Director (Sao Tome and Principe) )
The Joint Development Authority )
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Annex B
Exercise Notice
Exercise Notice
By this notice, Environmental Remediation Holding Corporation ("ERHC")
informs the Nigeria-Sao Tome and Principe Joint Development Authority
("the Authority") that it wishes to exercise its rights under the Option
Agreement entered into between ERHC and the Democratic Republic of Sao
Tome e Principe on [ ] and acknowledged and implemented by the Authority
pursuant to the Administration Agreement between ERHC and the Authority
dated [ ] in respect of:
a [ ] % working interest
in [ ] Block
in the Nigeria-Sao Tome and Principe Joint Development Zone.
Signed for and on behalf of ERHC:
[ ]
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[MAP OF JOINT DEVELOPMENT ZONE]
[GRAPHIC OMITTED]
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