PARTICIPATION AGREEMENT
DATED
MARCH 27, 1998
AMONG
ALLIANCE EGYPTIAN NATIONAL EXPLORATION COMPANY
- -AND- GHP EXPLORATION (EGYPT), LTD. -AND- GHP EXPLORATION
CORPORATION
Central Sinai Participation Agreement
PARTICLPATION AGREEMENT
THIS AGREEMENT MADE AS OF THE 27TH DAY OF MARCH, 1998.
BETWEEN:
ALLIANCE EGYPTIAN NATIONAL EXPLORATION COMPANY, A CAYMAN ISLAND CORPORATION
HAVING AN OFFICE IN THC CITY OF NASSAU,
IN THE BAHAMAS (HEREINAFTER CALLED "ALLIANCE")
- -AND-
GHP EXPLORATION CORPORATION, a YUKON TERRITORY CORPORATION HAVING AN
OFFICE IN THE CITY OF HOUSTON, in THC STATE OF TEXAS, U.S.A.
(HEREINAFTER CALLED "GHP")
- -AND-
GHP EXPLORATION (EGYPT), LTD., a Bermuda corporation having an office in the
City of Houston, in the State of Texas, U.S.A. (hereinafter called "GHP Egypt")
WHEREAS Alliance has become a party to a Concession Agreement originally between
the Government, The Egyptian General Petroleum Corporation ("EGPC") and National
Exploration Company (the "Concession Agreement") with Alliance's interest in the
Concession Agreement ratified by the Government on September 22, 1997;
AND WHEREAS by Deed of Assignment dated September 23, 1997, a 100% working
interest in the Concession was formally deeded to Alliance;
AND WHEREAS Alliance and GHP seek to jointly explore, deve1op and produce
Hydrocarbons in the Concession Area and by this Agreement seek to define and
establish their respective participating interests in the Concession and in the
rights and obligations contained in and under the Concession Agreement;
NOW THEREFORE, in consideration of thc premises and mutual covenants,
agreements and obligations set out below and to be performed, the Parties
agree as follows:
ARTICIE I DEFINITIONS
1. 1 "AFFILIATE" means a company, partnership or other legal entity which
controls, or is controlled by, or which is controlled by an entity which
controls, a Party. Control means the ownership, directly or indirectly, of fifty
percent (50%) or more of the voting rights in a company, partnership or legal
entity.
1.2 "AGREEMENT" means this agreement, together with the Appendices attached to
this agreement and any extension, renewal or amendment hereof agreed to in
writing by the Parties.
1.3 "BUSINESS DAY" means any day other than a Saturday, Sunday or statutory
ho1iday on which chartered banks in Houston, Texas are closed.
1.4 "CLOSING DATE" means the date that this Agreement is executed and delivered
by the Parties scheduled to occur on or about March 27, 1998 or such earlier or
later date as the Parties sha11 agree upon.
1.5 "COMMON SHARES" means the common shares in the capital of GHP to be issued
to accordance with subparagraph 2.1(b);
1.6 "CONCESSION" means the rights held by Alliance pursuant to the Concession
Agreement or otherwise, for the exploration, development and production of
Hydrocarbons in thc Concession Area.
1.7 "CONCESSION AREA" means the area described as Central Sinai Concession,
Block G and specified in the Concession Agreement, as such area may vary from
time to time during the validity of the Concession Agreement.
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1.8 "G&A COSTS" means indirect charges; as contemplated in Section 3.1 of thc
Accounting Procedure attached to the Operating Agreement, including, without
limitation, administrative overhead costs, salaries of support personnel,
office rent, utilities, insurance, business taxes, telephone costs, fax,
printing, stationary, use of computer facilities and technica1 equipment and
other similar overhead costs that provide a real benefit to joint operations.
1.9 "GOVERNMENT" means the government of thc Arab Republic of Egypt and any
political subdivision or agency or instrumentality thereof.
1.10 "HYDROCARBONS" means all substances including liquid and gaseous
hydrocarbons which are subject to and covered by thc Concession Agreement.
1.11 "INITIAL EXPLORATION PERIOD" has the meaning ascribed to that term in
Article III (b) of the Concession Agreement.
1.12 "INITIAL EXPLORATION WORK BUDGET" means the aggregate of costs and
expenses, including G&A Costs, incurred in conducting the Initial Exploration
Work Program.
1.13 "INITIAL EXPLORATION WORK PROGRAM" means those work and/or expenditure
obligations specified in the Concession Agreement which must be performed
during the Initial Exploration Period in order to satisfy the obligations of
the Concession Agreement.
1.14 "OPERATING AGREEMENT" means the operating agreement in the form of the
AIPN Model Form of International Operating Agreement and Accounting Procedure
to be negotiated and entered into by thc Parties in accordance with Article
IV.
1.15 "OPERATOR" means "Operator" under the Operating Agreement.
1.16 "PARTICIPATING INTEREST" means the percentage undivided working interest
of each party in the rights and obligations derived under this Agreement, the
Operating Agreement and of the "Contractor" under the Concession Agreement as
set forth in Section 3.1.
1.17 "PARTY OR PARTIES" means, respectively, one or all of the Parties to
this Agreement and any respective permitted successors or assigns.
ARTICLE II EARNING OBLIGATIONS
2.1 From and after the Closing Date, GHP Egypt shall have earned an undivided
twenty-five percent (25%) working interest in the Concession Agreement (the
"GHP Interest") subject to, and provided that GHP and GHP Egypt fulfill their
respective obligations set out below:
(a) On the Closing Date, GHP Egypt shall pay to Alliance U.S. $500,000 by way
of bank draft or wire transfer, as Alliance may direct.
(b) On the Closing Date, subject to thc provisions of Schedule 7.3 and any
relevant securities laws, ru1es and policies. GHP sha11 issue in the name of
Alliance or its Affiliate that number of Common Shares in the capital of GHP
having a market value on the Closing Date equal to U.S. $500,000. The Common
Shares shall be issued at a price equal to the weighted average closing price
of Common Shares of GHP for the twenty (20) trading days immediately prior to
the Closing Date.
(c) GHP Egypt shall pay forty percent (40%) of the Initial Exploration Work
Budget until the earlier of: (i) the completion of the Initial Exploration
Work Program; or
Central Sinai Participation Agreement
(ii) the Initial Exploration Work Budget equals U..S. $8,000,000; from and
after which time GHP Egypt shall pay twenty-five percent (25%) of all costs
and expenses associated with activities conducted by the Operator in thc
Concession Area.
(d) Notwithstanding subparagraph 2.I(c), during each year of the Initial
Exploration Period, GHP Egypt shall pay forty percent (40%) of the G&A Costs
until the G&A Costs equal U.S. $650,000 for such year, from and after which
time GHP Egypt shall pay twenty-five percent (25%) of all further G&A Costs
associated with activities conducted by the Operator in the Concession Area
during that particular year.
(e) On the Closing Date, GHP Egypt shall pay to Bennett Jones Verchere, in
trust. U.S. $250,000 by way of bank draft or wire transfer (the "Escrowed
Monies") for the benefit of Alliance which Escrowed Monies shall, in addition
to the forfeiture contemplated in Section 3.3, be forfeited to Alliance, as a
genuine pre-estimate of liquidated damages and not a penalty, in the event
that GHP Egypt fails to pay any cash call, authorization for expenditure or
invoice issued by the Operator for GHP Egypt's share of the costs and
expenses incurred in conducting the Initial Exploration Work Program. The
Escrowed Monies shall be released to GHP Egypt upon GHP Egypt posting a
letter of guarantee in the amount of U.S. $2,400,000 (the "GHP Guarantee"),
in favour of the Government, in a form contemplated by the Concession
Agreement and acceptable to the Government or upon notification from the
Government that it does not approve the transfer of the GHP Interest. The
Parties acknowledge that it is intended the GHP Guarantee replace forty
percent (40%) of A1liance's outstanding U .S. $6,000,000 letter of guaranteed
in favour of the Government (the" AlIiance Guarantee") such that thc Alliance
Guarantee will be rcduced to U.S. $4,600.000, as may be approved by the
Government. Any amounts paid by GHP Egypt to Bennett Jones Verchere, in
trust, shall be paid in accordance with the provisions of the letter
agreement attached hereto as Schedule 2.1. Upon acceptance of the GHP
Guarantee by thc Government or upon notification from the Government that it
does not approve the transfer of the GHP Interest, Alliance and GHP shall
provide Bcnnett Jones Vcrchere written notice thereof.
(f) If the Government notifies Alliance that it does not approve the transfer
of the GHP Interest, GHP Egypt shall be responsible and liable for forty
percent (40%) of the Alliance Guarantee and shall, upon receipt by GHP Egypt
of the Escrowed Monies, pay to Alliance by way of bank draft or wire
transfer, forty percent (40%) of the amount required to be on deposit in
support of the Alliance Guarantee or such other security as is reasonably
acceptable to Alliance (such as a letter of credit in favour of Alliance).
Alliance shall reimburse GHP Egypt such amount deposited by GHP to support
the Alliance Guarantee or release such other security us may be posted upon
release of the Alliance Guarantee by the Government.
(g) As soon as practical after receipt of any necessary Government approvals
of the transfer of the GHP Interest, GHP or GHP Egypt shall post thc GHP
Guarantee with the Government. Until the GHP Guarantee has been accepted by
the Government or until GHP Egypt is required to deposit funds or post
security with A1liance as provided in Article 2.1 (f) above, in addition to
thc other payments contemplated in paragraph 2.1, GHP Egypt shall pay to
Alliance in posting the Alliance Guarantee.
2.2 On the Closing Date, Alliance shall transfer the GHP Interest to GHP
Egypt by way of assignment substantially similar to the form of assignment
attached hereto as Exhibit " A" and made a part hereof (the "Assignment").
Alliance and GHP Egypt shall execute the Assignment and Alliance shall
deliver the Assignment to GHP Egypt. The transfer of thc GHP Interest to GHP
Egypt and the Assignment is subject to the approval of the Government which
the Parties agree to use all reasonable efforts to obtain as soon as
practical after the Closing Date.
Central Sinai Participation Agreement
ARTICLE III PARTICIPATING I NTERESTS
3.1
(a) Subject to the terms and conditions set forth in Article II and subparagraph
3.1(c) below, all the rights and interests of the Parties in the Concession and
under the Concession Agreement and this Agreement shall be owned by the Parties,
as among themselves, in accordance with the following participating interests:
Alliance 75%
GHP Egypt 25%
(the "Participating Interests").
(b ) Subject to the terms and conditions set forth in Article II, the
obligations of the Parties under the Concession Agreement and this Agreement
and all liabilities, costs and expenses incurred by Operator in connection
with activities conducted in the Concession Area. shall be shared by the
Parties, as among themselves, in accordance with their respective
Participating Interests.
(c) Notwithstanding the Parties' Participating Interests, GHP Egypt and
Alliance agree that forty percent (40%) of the Hydrocarbons a1located to thc
Contractor for recovery of costs provided for in Article VII of the
Concession Agreement shall be received by GHP Egypt until such time as the
value of such forty percent (40%) of such Hydrocarbons (as determined by the
proceeds received or due to GHP Egypt from the sale of such Hydrocarbons)
equals the aggregate of all costs incurred by GHP Egypt pursuant to
Subparagraph 2.1 (c) hereof that are eligible for cost recovery in accordance
with the Concession Agreement. Thereafter, such Hydrocarbons shall bc shared
in proportion to the Parties' Participating Interests.
3.2 Upon execution and delivery of this Agreement, AlIiance, GHP and GHP
Egypt shall use all reasonable efforts to have the GHP Interest formally
recognized by the Government by way of execution of a deed of assignment or
in such other manner as the Government shall require. Until formal
recognition of the GHP Interest by the Government is achieved, Alliance
agrees that it holds the GHP Interest in trust for the benefit of, and on
behalf of, GHP Egypt.
3.3 If GHP Egypt fails to completely meet any of its earning obligations set
forth in Article II, thirty (30) days after receipt of written notification
from Alliance of any such failure, the GHP Interest shall be automatica1ly
forfeited and revert back to Alliance, unless GHP Egypt has remedied such
failure within such thirty (30) day period. Any such forfeiture and reversion
is a genuine pre-estimate of liquidated damages and not a penalty, and shall
be without compensation or reimbursement for any amount paid to the date of
such failure and this Agreement shall be terminated from and as of such date.
Central Sinai Participation Agreement
ARTICLE IV BUDGET
4.1 As soon as practical after the Closing Date, Alliance and GHP Egypt shall
agree on an estimate for the Initial Exploration Work Budget. Any such
estimate shall not reduce the earning obligations of GHP Egypt set forth in
Article II. Subject to the terms and conditions of the Concession Agreement
and the Operating Agreement, the Parties shall mutually agree to an annual
budget of costs and expenses for each year of the Initial Exploration Period,
which annual budgets shall implement thc agreed estimated Initial Exploration
Work Budget.
ARTICLE V OPERATING AGREEMENT AND OPERATOR
5.1 The Parties shall use all reasonable efforts to execute and deliver the
Operating Agreement within thirty (30) days of the Closing Date and the
Operating Agreement shall be effective as of and from the Closing Date.
Notwithstanding the participating interests of Alliance and GHP Egypt in the
Operating Agreement, the costs and expenses of the Initial Exploration Work
Budget shall be paid in accordance with Section 2.l(c) and (d).
5.2 The Parties agree that the Operator shall be Alliance. The Operator shall
conduct all operations in accordance with the provisions of the Concession
Agreement, the Operating Agreement and the directions and instructions of the
Operating Committee created under the Operating Agreement.
5.3 The Operating Agreement shall govern the operations on the Concession
including, but not limited to, the design and implementation of any seismic
and drilling programs. Under the Operating Agreement, there shall be created
an Operating Company which shall provide overall supervision and direction of
all operations and which shall, without limitation, have the right to approve
all key agreements with consultants and contractors in connection with the
Concession.. GHP Egypt shall be entitled to have one of its technical
personnel work with the personnel of Alliance in the formulation of the
seismic and drilling programs.
5.4 Article IV(c) of the Concession Agreement provides for a joint committee
to be established by EGPC and the Contractor, referred to as the "Exploration
Advisory Committee". The Exploration Advisory Committee consists of six
members, three of whom shall be appointed by EGPC and three of whom shall be
appointed by Contractor. Alliance shall provide for one of its three members
to be a representative of GHP Egypt, subject to approval by EGPC. Alliance
shall consult with GHP Egypt and consider GHP Egypt's input, regarding all
meetings and negotiations with the Egyptian Government and shall keep GHP
Egypt informed of all matters relative thereto, including but not limited to
budgets and work programs.
ARTICLE VI RELATIONSHIP OF THE PARTIES
6.1 The rights, duties, obligations and liabilities of the Parties under this
Agreement shall he individual, not joint or collective. This Agreement shall
not be deemed or construed to authorize any Party to act as an agent, servant
or employee for any other party for any purpose whatsoever except as
explicitly set forth in this Agreement, the Concession Agreement, or the
Operating Agreement. In their relations with each other under this Agreement,
the Parties shall not be considered fiduciaries of each other except as
expressly provided in this Agreement.
Central Sinai Participation Agreement
ARTICLE VII REPRESENTATIONS AND WARRANTIES
7.1 Alliance, GHP and GHP Egypt each represent and warrant to each other, as
to itself only, that:
(a) it is a corporation duly incorporated and validly subsisting under the
laws of the jurisdiction of its incorporation;
(b) it has all requisite corporate capacity and authority to enter into this
Agreement and to perform its obligations in accordance with the terns of this
Agreement;
(c) this Agreement is a valid and binding agreement enforceable against such
party in accordance with thc terms of this Agreement, subject to bankruptcy ,
insolvency, reorganization, arrangement. moratorium or other similar laws
relating to or affecting the rights of creditors and subject to general
principles of equity;
(d) it is not the subject of an order for liquidation or winding up, nor has
it entered into a scheme or arrangement with its creditors or any class of
them, nor has any official manager, receiver and/or trustee been appointed in
respect of it or its property or assets; and
(e) it has duly executed and delivered this Agreement.
7.2 Alliance represents and warrants to GHP and GHP Egypt that:
(a) there have been no actions taken in relation to the Concession, by or on
behalf of Alliance, that would cause GHP, GHP Egypt or Alliance to be in
violation of the FOREIGN CORRUPT PRACTICES ACT of the United States of
America;
(b) it is qualified to carry on business in The Arab Republic of Egypt;
(c) the Concession Agreement is in full force and effect and has been
ratified by the Government as being in full force and effect, and, to the
best of its knowledge after due inquiry , it has not received any notice of
c1aim by the Government that it will or may terminate the Concession
Agreement and subject to receiving consent from the Government for the
transfer of the GHP Interest, it has no knowledge, information or belief of
any cause for such termination;
(d) Alliance owns a 100% working interest in the Concession Agreement and
has been formally recognized by the Government as owning a 100% working
interest in the Concession Agreement;
(e) there has been material compliance with the Concession Agreement and all
applicable laws and all taxes, rentals, charges and other payments required
in connection with thc Concession Agreement and any applicable laws have been
fully paid;
(f) to the best of its knowledge, other than the obligation to complete the
Initial Exploration Work Program, there are no outstanding obligations under
the Concession Agreement;
Central Sinai Participation Agreement
(g) there are no mortgages, charges, liens, encumbrances or adverse interests
of any nature whatsoever against or relating to the Concession Agreement or
the GHP Interest created by, through or under Alliance other than those
contained in the Concession Agreement;
(h) to the best of its knowledge after due inquiry, Alliance has not received
notice of any pending or threatened litigation, arbitration or other claim
related to the Concession Agreement or the Concession Area;
(i) it is not aware of any facts which may give rise to any proceeding, and
is not involved in or aware of any dispute with any person or entity ,
prejudicial to the exercise of any rights related to the GHP Interest; and
(j) the statements set forth in Schedule 7.2 are true and correct in all
material respects.
7.3 GHP presents and warrants to Alliance that:
(a) the rights, privileges, restrictions and conditions attaching to the Common
Shares are as set out in Schedule "7.3" attached hereto;
(b) the Common shares have been du1y authorized and are reserved for issuance
and upon c1osing will be issued to Alliance as fully paid and non-assessable;
(c) the authorized capital of GHP as of the Closing Date will consist of an
unlimited nunber of common shares of which 17,715,888 common shares are
issued and outstanding as at the date hereof;
(d) subject to the by-laws and articles of GHP , the Common Shares at the
Closing Date will be free of any liens, pledges, voting trusts, proxies,
adverse claims or other encumbrances of any kind; and
(e) as at the data hereof, no person, firm or corporation has any agreement
or option, or any right or privilege (whether pre-emptive or contractual)
capable of becoming an agreement or option, for the purchase, subscription or
issuance of any shares in the capital of GHP or for any securities
convertible or exchangeable for such shares, other than the 3.888 million
special warrants (convertible into 3.888 million common shares and 1.944
million common share purchase warrants), 2.4 million share purchase warrants
and 2.130 million options to purchase common shares outstanding as the date
hereof;
(f) GHP is a reporting issuer under the SECURITIES ACT (Ontario) and to the
knowledge of GHP is not in default of any requirement of securities or
corporate laws, regulations, orders, notices and policies;
(g) no securities commission or similar regulatory authority has issued any
order preventing or suspending trading in any securities of GHP;
(h) the issued and outstanding common shares in the capital of GHP are listed
and posted for trading on the Canadian Dealing Network; and
(i) application has been made, and approval has been received from thc
Ontario Securities Commission in of the completion of the transactions
contemplated by this Agreement, a copy or which approval is attached hereto
as part of Schedule 7.3.
Central Sinai Participation Agreement
7.4 GHP and GHP Egypt each represent and warrant to A11iance that:
(a) it will use all reasonable efforts to qualify GHP Egypt to carry on
business in The Arab Republic of Egypt within 90 days of the Closing Date;
and
(b) it is experienced in the international oil and gas industry and it is aware
of the inherent risks associated with international petroleum operations.
It has made an independent investigation or the legal, tax, business and
other risks and consequences of this transaction and the nature and extent,
if any, of the petroleum, natural gas and other hydrocarbon reserves in the
Concession Area.
7.5 The representations and warranties set forth in Article VII shall survive
the completion of the sale and purchase herein provided for and shall
continue in full force and effect for the benefit of each Party for a period
of 12 month from the date hereof.
7.6 Alliance makes no representation or warranty except as and to the extent
set forth in Sections 7.1 and 7.2. Except as set forth in this Agreement,
Alliance disclaims and shall not be liable for any covenant, representation
or warranty (whether in contract or in tort) which may have been made in any
document or instrument relative hereto, or in any statement or information
made or communicated to GHP and GHP Egypt in any manner including, without
limitation any opinion, information or advice which may have been provided to
GHP and GHP Egypt. GHP and GHP Egypt confirm that they have only relied upon
the representations and warranties contained in Sections 7.1 and 7.2 and not
on any covenants, representations or warranties outside this Agreement. GHP
and GHP Egypt acknowledge and confirm that they have performed their own due
diligence and, except for such reliance, have relied, and will continue to
rely, upon their own engineering, other evaluations and projections the same
relate to the GIIP Interest and on their own inspections of all other
physical property and assets which comprise the GHP Interest.
ARTICLE VIII TERM AND TERMINATION
8.1 This Agreement shall commence and have effect as of the Closing Date and
shall continue in effect until the earlier of:
(i) the Concession Agreement is terminated; or
(i) this Agreement is terminated pursuant to paragraph 3.3; or
(ii) others as agreed by the Parties.
ARTICLE IX OPERATIONS INDEMNITY
9.1 Alliance shall defend, indemnify and hold GHP Egypt, its directors,
officers, employees, agents and representatives harmless from and against any
and all claims, demands, causes of action, judgments and liabilities of every
kind and character arising out of or in connection with any operations or
activities conducted by Alliance pursuant or in relation to the Concession
Agreement prior to January 20, 1998.
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ARTICLE X DATA
10.1 Within thirty (30) days after thc Closing Date and subject to any
consents required from the Government, Alliance shall provide GHP Egypt with
one copy of all geophysical, geological and other data corresponding to the
Concession Agreement and the Concession Area. GHP Egypt shall bear the cost
of any reproduction necessary for providing data to GHP Egypt. Alliance shall
provide GHP Egypt with an invoice for such reproduction costs and GHP Egypt
shall pay undisputed amounts on such invoice within thirty (30) days of
receipt. GHP Egypt sha11 keep all such data confidential in accordance with
Article XIV.
ARTICLE XI DISPUTE RESOLUTION
11.1 Any disputes arising under this Agreement shall be resolved by
arbitration in the London Court of International Arbitration, by three
arbitrators, under the Rules of the London Court of International Arbitration.
ARTICLE XII NOTICES
12.1 All notices, requests, demands, and other communication hereunder shall
be in writing and shall be furnished to the Parties at the addresses listed
below. Notices shall be deemed to have been given if delivered personally,
transmit1cd by telecopy or sent by courier service. Any such communication
shall be deemed to be received when delivered personally (including by
courier service) or sent by telecopier upon receipt or confirmation of
successful telecopy transmission.
(a) to Alliance:
c/o Alliance International Petroleum Inc.
Churchill House
#9 West Hill Street
Nassau, Bahamas
Fax No.: (242) 356-0507
(b) to GHP Egypt:
1900 West Loop South Suite 900
Houston, Texas 77027 U.S.A.
Fax No.: (713) 626-9374
(c) to GHP:
1900 West Loop South
Suite 900
Houston, Texas 77027 U.S.A.
Fax No.: (713) 626-9374
Central Sinai Participation Agreement
ARTICLE XIII FURTHER DOCUMENTATION
13.1 This Agreement and the Operating Agreement supersede all prior
agreements, understandings and commitments, whether oral or writing, between
the Parties concerning the subject matter and in particular, the Memorandum
of Understanding between the Parties dated January 20, 1998. The terms of
this Agreement and the Operating Agreement express and constitute the entire
agreement between the Parties and no implied covenant, representation,
warranty or liability of any kind is created or shall be created by reason of
these presents or anything herein contained. In the event of any conflict
between the provisions of this Agreement and the Concession Agreement the
provisions of the latter shall prevail.
ARTICLE XIV CONFIDENTIALITY
14.1
(a) Subject to the provisions of the Concession Agreement, thc Parties agree
that all information and data acquired or obtained by any Party in respect
of the Concession or the rights and obligations granted under the
Concession Agreement shall be considered confidential and shall be kept
confidential and not be disclosed during the term of this Agreement to any
person or entity not a Party except:
(i) to an Affiliate, provided such Affiliate maintains confidentiality as
provided in this Article XIV;
(ii) to a governmental agency or other entity when required by the
Concession Agreement;
(iii) to the extent such data and information is required to be furnished in
compliance with any applicable laws or regulations, or pursuant to any
legal proceedings or because of any order of any court binding upon a
Party;
(iii) to prospective or actual contractors, consultants and attorneys
employed by the Operator or any Party where disclosure of such data or
information is essential to such contractor's, consultant's or
attorney's work;
(iv) to a bona fide prospective transferee of a Party's Participating
Interest (including an entity with whom a Party or its Affiliates are
conducting bona fide negotiations directed toward a merger,
consolidation or the sale of a majority of its or an Affiliate's
shares);
(v) to a bank or other financial institution to the extent appropriate to a
Party arranging for funding;
(vii) to the extent such data and information must be disclosed pursuant to
any rules or requirements of any government or stock exchange having
jurisdiction over such Party, or its Affiliates;
(vi) any data or information which, through no fault of a Party, becomes a
part of the public domain; or
(ix) to a broker providing insurance.
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(b) Disclosure as pursuant to Section 14(a)(iv), (v), (vi) (ix) shall not be
made unless prior to such disclosure the disclosing Party or the Operator, as
thc case may be, has obtained a written undertaking from the recipient party
to keep the data and information strictly confidential for at least three (3)
years and not to use or disclose the data and information except for the
express purpose for which disclosure is to be made.
14.2 Any Party ceasing to own a Participating Interest during the term of
this Agreement shall nonetheless remain bound by the obligations of
confidentiality in this Article XIV and any disputes shall be resolved in
accordance with Article XI.
ARTICLE XV ASSIGNMENT OF PARTICIPATING INTERESTS
15.1 No Party may assign all or an undivided portion of its Participating
Interest or any of such Party's rights or obligations hereunder unless it has
obtained the prior written consent of the other Parties, such consent not to
be unreasonably withheld.
15.2 GHP and GHP Egypt acknowledge and consent to Alliance being in
discussions with third parties to find additional participants to farmin and
contribute to the Initial Exploration Work Program. GHP Egypt consents to any
assignment or disposition resulting therefrom on the condition that the terms
and conditions of Article XII of the Operating Agreement arc complied with.
ARTICLE XVI MISCELLANEOUS
16.1 This Agreement shall enure to the benefit of and shall be binding upon
the Parties hereto and their respective successors and assigns as permitted.
16.2 Time shall be the essence of this Agreement.
16.3 Each Party shall prepare and submit any and all filing in relation to
this Agreement required or such Party by any government agency having
jurisdiction. Each party shall in a timely fashion provide the other with
copies of all such filings by the Party .
16.4 Thc Parties shall execute, acknowledge and deliver such other
instruments or documents and shall take such other actions as may be
necessary to carry out their respective obligations under this Agreement or
to consummate the transactions contemplated by this Agreement.
16.5 No amendment to this Agreement shall be valid unless it is in writing,
signed by all Parties.
16.6 If any provision of this Agreement, or the application thereof to any
particular circumstance, is held or deemed invalid, thc remaining provisions
or this Agreement and the application of thc provisions to circumstance other
than those as to which it has been held or deemed to bc inva1id, shall not be
affected by the invalidity.
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16.7 The failure of a Party to insist upon strict performance of a provision
of this Agreement, irrespective of the length of time for which the failure
continues, shall not constitute a waiver of that Party's right to demand
strict compliance thereafter. No consent or waiver, express or implied, to or
of any breach or default in the performance of any provision of this
Agreement shall constitute a consent to or waiver of any other breach or
default, whether of a like or different character.
16.8 Headings are used for reference purposes only and do not constitute a
part of this Agreement, nor are they interpretive thereof. In the event of
any conflict between the provisions of this Agreement and a Schedule to this
Agreement, the provisions of this Agreement shall prevail.
16.9 This Agreement may be executed in several counterparts, each of which
when so executed shall be deemed to be an original and such counterparts
together shall constitute one and the same instrument which shall be
sufficiently evidenced by any such original counterpart. The parties shall be
entitled to rely upon delivery of an executed facsimile copy of this
Agreement and such facsimile copy shall be legally effective to create a
valid and binding agreement among the Parties.
16.10 GHP unconditionally and irrevocably guarantees, for the benefit of
Alliance only, the punctual and complete performance by GHP Egypt of all of
the obligations of GHP Egypt stated in this Agreement and agrees to be liable
to Alliance in respect of such obligations to the same extent as if they were
obligations of GHP to Alliance.
16.11 There shall be no third party beneficiaries of this Agreement.
ARTICLE XVII GOVERNING LAW
17.1 This Agreement shall in all respects be subject to and be interpreted,
construed and enforced in accordance with the laws of England, without regard to
conflicts of law rules.
IN WITNESS WHEREOF the Parties have caused this Agreement to be executed by
their respective duly authorized officers as of the date first above written.
GHP EXPLORATION (EGYPT) LTD. ALLIANCE EGYPTIAN NATIONAL
EXPLORATION COMPANY
Per: Per:
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Per: Per:
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GHP EXPLORATION CORPORATION
Per:
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Per:
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Central Sinai Participation Agreement