AGREEMENT
BETWEEN
ATLAS PETROLEUM INTERNATIONAL LIMITED
AND
SUMMIT PARTNERS MANAGEMENT CO.
RELATING TO:
OIL PROSPECTING LICENSE 75
FEDERAL REPUBLIC OF NIGERIA
TABLE OF CONTENTS
ARTICLE 1 2
1.0 DEFINITIONS 2
ARTICLE 2 4
2.0 TERM 4
ARTICLE 3 5
3.0 ASSIGNMENT 5
ARTICLE 4 6
4.0 GOVERNMENT APPROVAL 6
ARTICLE 5 7
5.0 REPRESENTATIONS AND WARRANTIES; INDEMNITY 7
ARTICLE 6 9
6.0 SUMMIT'S OBLIGATIONS 9
ARTICLE 7 10
7.0 PRODUCTION, TAXES AND ROYALTIES 10
ARTICLE 8 12
8.0 CONDITIONS PRECEDENT 12
ARTICLE 9 14
9.0 OTHER AGREEMENTS/LEGISLATION 14
ARTICLE 10 19
10.0 FORCE MAJEURE 19
ARTICLE 11 20
11.0 ASSIGNMENT 20
ARTICLE 12 21
12.0 GOVERNING LAW, ARBITRATION AND LIABILITIES 21
ARTICLE 13 24
13.0 NOTICIES 24
ARTICLE 14 25
14.0 CONFIDENTIALITY 25
ARTICLE 15 27
5.0 MISCELLANEOUS 27
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AGREEMENT
THIS AGREEMENT, made and entered into this l7th day of July, 1992,
between ATLAS PETROLEUM INTERNATIONAL LIMITED, a corporation organized and
existing under the laws of the Federal Republic of Nigeria (hereinafter
referred to as "ATLAS"), and SUMMIT PARTNERS MANAGEMENT CO., a corporation
organized and existing under the laws of the State of Texas, United States of
America (hereinafter referred to as "SUMMIT").
W I T N E S S E T H
WHEREAS, ATLAS has been awarded an Oil Prospecting License covering Block 75
in the Federal Republic of Nigeria, a copy of which is attached to this
Agreement as EXHIBIT "A" (hereinafter referred to as the "OPL"); and
WHEREAS, ATLAS has agreed to assign to SUMMIT an undivided thirty
percent (30%) interest in the OPL; and
WHEREAS, SUMMIT desires to acquire from ATLAS an undivided thirty
percent (30%) interest in the OPL for the consideration and upon the terms
and conditions contained herein; and
WHEREAS, the OPL has been awarded to ATLAS on condition that ATLAS
shall be the Operator of the License Area (as hereinafter defined), which
condition shall further be spelled out in the Operating Agreement (as
hereinafter defined).
NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth below, the Parties do hereby agree as follows:
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ARTICLE 1
1.0 DEFINITIONS
1.1 "AFFILIATE" shall mean, with respect to a Party, a corporation or other
entity that controls or is controlled by such Party or a corporation or other
entity which controls or is controlled by a corporation or other entity which
controls such Party directly or indirectly. For purposes hereof, "control"
shall mean ownership by one corporation or other entity of more than
twenty-five percent (25%) of the voting rights of the other corporation or
other entity.
1.2 "AGREEMENT" shall mean this Agreement between ATLAS and SUMMIT relating
to the OPL.
1.3 "APPROVAL DATE" shall mean the date on which the Assignment is approved
by the Government.
1.4 "THE 30% INTEREST" shall mean the undivided thirty percent (30%) interest
in the OPL to be assigned by ATLAS to SUMMIT hereunder.
1.5 "ASSIGNMENT" shall mean that certain instrument to be executed by ATLAS
and SUMMIT whereby ATLAS assigns The 30% Interest to SUMMIT, which shall be
substantially in the form set forth in EXHIBIT "B" .
1.6 "ASSIGNMENT DATE" shall mean the date on which ATLAS assigns The 30%
Interest to SUMMIT.
1.7 "DOLLARS" or "US$" shall mean the currency of the United States of
America.
1.8 "ECODRILL CONTRACT" shall mean that certain Agreement dated February 7,
1992 between ATLAS and Ecodrill U.S. Inc., covering the OPL.
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1.9 "EXPLORATION COSTS" shall mean Petroleum Costs as such term is defined in
the Operating Agreement.
1.10 "FORCE MAJEURE" shall be as defined in Article 10 below.
1.11 "Government" shall mean the Government of the Federal Republic of
Nigeria.
1.12 "INTERIM MANAGEMENT COMMITTEE" shall be as defined in Article 9.3 below.
1.13 "LICENSE AREA" shall mean that geographical area covered by the OPL, as
more particularly outlined and described in the schedules attached to the OPL
and as reduced from time to time in accordance with the provisions of
Petroleum Decree 1969 and the Petroleum (Drilling and Production) Regulations
1969, as amended. The License Area is shown on EXHIBIT "C" attached to this
Agreement.
1.14 "MANAGEMENT COMMITTEE" shall be as defined in Article 9.2(d) below.
1.15 "MPMR" shall mean the Ministry of Petroleum and Mineral Resources.
1.16 "OIL MINING LEASE" shall mean an Oil Mining Lease resulting from the OPL
obtained in accordance with the laws of the Federal Republic of Nigeria.
1.17 "OPERATING AGREEMENT" shall mean the Joint Operating Agreement to be
entered into between ATLAS and SUMMIT to govern the conduct of petroleum
operations under the OPL and any Oil Mining Leases resulting therefrom, using
the document attached as EXHIBIT "D" as the basis for negotiations.
1.18 "PARTICIPATING INTEREST" shall mean the undivided interest held at any
given time by ATLAS and, after approval of the Assignment by the Government,
by SUMMIT in and to the OPL, the License Area and the Operating Agreement.
1.19 "PARTY" OR "PARTIES" shall mean ATLAS and/or SUMMIT, individually or
jointly, as the text may require.
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1.20 "PAYOUT" shall mean that point in time when SUMMIT has been paid out of
revenues attributable to the sale of Hydrocarbons produced from the License
Area, after deducting its proportionate share of Royalties and Petroleum
Profits Tax, an amount equal to one hundred percent (100%) of the costs and
expenses paid by SUMMIT pursuant to the terms of this Agreement. After Payout
has occurred, there shall be no reversion to a "before Payout" status.
1.21 "PETROLEUM PROFITS TAX" shall mean the tax imposed upon the sale of
Hydrocarbons under the Petroleum Profits Tax Act of 1959, as amended.
1.22 "ROYALTIES" shall be as defined in Article 7.1(a) below.
1.23 All terms, other than the foregoing terms, which are not defined in this
Agreement but which are defined in the Operating Agreement shall have the
same meaning as expressed in the Operating Agreement.
ARTICLE 2
2.0 TERM
2.1 This Agreement shall be effective as of the date first written above and,
except as otherwise provided in this Agreement, shall continue until the
occurrence of Payout. Thereafter, the rights, duties and obligations of the
Parties with respect to the OPL and the License Area shall be governed by the
terms and provisions of the Operating Agreement.
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ARTICLE 3
3.0 ASSIGNMENT
3.1 (a) Subject to the conditions of this Agreement and in exchange
for the consideration set forth in Article 6 below, ATLAS
hereby agrees to assign The 30% Interest to SUMMIT.
(b) Subject to the conditions of this Agreement, SUMMIT hereby
agrees to accept such assignment of The 30% Interest and to
perform its obligations as set forth in Article 6 below.
3.2 The Assignment shall be free of all liens, claims, mortgages and
encumbrances and shall be thirty percent (30%) of one hundred
percent (100%) of ATLAS' interests in data, materials, equipment
and other assets now owned or hereafter acquired pertaining to or
in connection with the OPL (hereinafter referred to as the
"Assets").
3.3 The Assignment shall be executed contemporaneously with the
execution of this Agreement. The Assignment shall be subject to
approval by the Government and will become effective as of the
Approval Date. Between the Parties, the Assignment and this
Agreement shall be effective as of the Assignment Date, and ATLAS
and SUMMIT shall be bound by this Agreement and shall fully
perform all of their respective obligations under this Agreement,
pending approval of the Assignment by the Government, in
accordance with and subject to the terms of this Agreement.
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3.4 AFTER THE APPROVAL OF THE ASSIGNMENT, the RESPECTIVE PARTICIPATING
INTERESTS OF THE PARTIES in THE OPL SHALL be AS FOLLOWS:
COMPANY PARTICIPATING INTEREST
------- ----------------------
ATLAS 70%
SUMMIT 30%
THE DISPROPORTIONATE SHARING OF REVENUES CONTEMPLATED BY ARTICLE
7.1(e) SHALL in NO WAY AFFECT THE PARTIES' OWNERSHIP OF THEIR
RESPECTIVE PARTICIPATING INTEREST SHARES in THE OPL.
ARTICLE 4
4.0 GOVERNMENT APPROVAL
4.1 As soon as reasonably possible following the execution of the
Assignment, ATLAS shall submit the Assignment to the Government
requesting approval of the Assignment. ATLAS shall promptly provide
SUMMIT with satisfactory evidence of the submission of the Assignment to
the Government. In addition, ATLAS shall keep SUMMIT fully informed with
respect to the status of such approval and shall promptly advise SUMMIT
of any communications to or from the Government relating to the
Assignment. ATLAS agrees to use good faith and reasonable efforts and to
perform all reasonable and required acts in order to obtain the
Government's approval of the Assignment.
4.2 ATLAS shall bear and pay any and all benefit, stamp, transfer and
documentary taxes, filing, registration, recording and notary fees or
similar costs assessed by the Government in connection with the
Assignment, and ATLAS agrees to indemnify and hold SUMMIT harmless from
any such taxes, fees or other costs relating to the Assignment.
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ARTICLE 5
5.0 REPRESENTATIONS AND WARRANTIES; INDEMNITY
5.1 ATLAS hereby represents and warrants that:
(a) Its corporate entity has been duly formed and currently
exists in good standing under the laws of the Federal
Republic of Nigeria and that it has full power and
authority to execute and deliver, and to complete its
obligations under, this Agreement; and the person or
persons signing this Agreement and the Assignment on behalf
of ATLAS has the authority to do so.
(b) As of the date of this Agreement and as of the Approval
Date, the OPL will be valid and in full force and effect in
all respects, without variance or amendment. Prior to the
Approval Date, without the prior written approval of SUMMIT
(which approval SUMMIT shall not delay or withhold
unreasonably), ATLAS shall not amend, surrender or withdraw
from the OPL.
(c) To the best of its knowledge, no act or omission of or
affecting ATLAS or affecting the OPL has occurred or will
occur prior to the Approval Date which would entitle the
Government to revoke or modify the OPL.
(d) All of the obligations contained in the OPL requiring
performance on or before the Assignment Date have been
fully and timely performed by ATLAS.
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(e) As of the Assignment Date, The 30% Interest will have good
and defensible title and will not be subject to any
material adverse contractual obligations, or any mortgages,
pledges, liens, burdens or other encumbrances created by
ATLAS and there is no agreement to create the same.
(f) There are no outstanding lawsuits or other proceedings and
there has been no judgment or award given or made by any
court, tribunal or governmental agency which relates to or
is connected with or relating to the OPL and, to the best
of its knowledge, there are no outstanding claims which
would affect the OPL or The 30% Interest being assigned to
SUMMIT pursuant to this Agreement.
(g) No payments were made or will be made, or consideration
given or will be given to obtain the OPL in violation of
Nigerian law or which would be in violation of the laws of
the United States of America or the State of Texas, if
such payments were made or such consideration were given by
SUMMIT.
(h) As of the Assignment Date, ATLAS will be the sole legal and
beneficial owner of The 30% Interest with the right to
sell, transfer and assign the full legal and beneficial
ownership of The 30% Interest to SUMMIT.
(i) The Ecodrill Contract has terminated by its own terms and
is no longer in force effect with respect to any part of
the OPL.
(j) ATLAS shall indemnify and hold SUMMIT harmless from any
costs, expenses, claims, demands, actions or other
liability which SUMMIT may incur as a result of the failure
of any of the representations and/or the breach of any of
the warranties contained in this Article 5.1, including
without limitation those claims, demands or actions that
may be made by Ecodrill U.S., Inc. arising out of the
previous Ecodrill Contract.
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5.2 SUMMIT hereby represents and warrants that:
(a) Its corporate entity has been duly formed and currently
exists in good standing under the laws of the State of
Texas and that it has full power and authority to execute
and deliver, and to complete its obligations under, this
Agreement; and the person or persons signing this Agreement
and the Assignment on behalf of SUMMIT has the authority to
do so.
(b) The execution and delivery of this Agreement by SUMMIT is
authorized by sufficient corporate action and, on the
Assignment Date, SUMMIT will have all necessary corporate
power and authority to execute and accept the Assignment.
(c) SUMMIT has the ability to meet all of its financial
obligations hereunder.
(d) SUMMIT has not gone into liquidation, made an 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.
ARTICLE 6
6.0 SUMMIT'S OBLIGATIONS
6.1 For and in consideration of receiving The 30% Interest from ATLAS,
after SUMMIT has moved a drilling rig into the License Area and is
set to commence actual drilling but prior to commencement of
actual drilling, SUMMIT shall pay to ATLAS the sum of us Dollars
One Million (US$1,000,000.00); provided, however, that SUMMIT
shall have no obligation hereunder to make such payment until all
of the conditions precedent set forth in Article 8.1 have been
fully satisfied (or waived by SUMMIT and ATLAS has obtained the
clearance of all necessary approvals, permits, etc.
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6.2 Prior to Payout, and subject to the terms of Article 7, SUMMIT
shall bear and pay the following costs and expenses:
a. All Exploration Costs incurred for the Joint Account on the
License Area;
b. In the event of a Commercial Discovery of Hydrocarbons, all
costs of all wells incurred on any Oil Mining Lease(s)
resulting from the OPL; and
c. All operating costs incurred on said Oil Mining Lease(s).
6.3 After Payout, all costs and expenses attributable to the License
Area shall be borne and paid by the Parties according to their
respective Participating Interests in accordance with the terms
and provisions of the Operating Agreement.
ARTICLE 7
7.0 PRODUCTONS, TAXES AND ROYALTIES
7.1 Upon evidence of the successful completion of a commercially viable well on
the License Area and the sale of Hydrocarbons produced therefrom, revenues from
the sale of Hydrocarbons shall be applied and/or distributed in the following
manner and order of priority:
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(a) Payment of royalties and other obligations to the MPMR
pursuant to the terms of the OPL and/or any Oil Mining
Leases resulting therefrom ("Royalties");
(b) Payment of Petroleum Profits Taxes and any other taxes
charged to the Parties, whether attributable to operations
on the License Area or to the Hydrocarbons sold therefrom;
(c) Payment of all actual ongoing costs, fees and expenses of
any kind whatsoever, including but not limited to general
administrative and overhead costs and interest expense,
incurred in connection with (i) the exploration,
development, operation or maintenance of the OPL and the
License Area for the production of Hydrocarbons, and (ii)
the lifting, handling, gathering, producing, treating,
storing, marketing or transporting of Hydrocarbons from the
OPL/Oil Mining Leases and the License Area (such costs,
fees and expenses are hereinafter referred to as "Costs");
(d) Distribution into a reserve fund such funds as may be
necessary to pay anticipated future Costs, the amount of
such reserve to be established and/or adjusted from time to
time by the Management Committee; and
(e) Any remaining revenues shall be distributed to the Parties
as follows:
(i) Until Payout, ATLAS shall receive forty percent
(40%) and SUMMIT shall receive sixty percent (60%)
of such remaining revenues; and
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(ii) After Payout, ATLAS shall receive seventy percent
(70%) and SUMMIT shall receive thirty percent (30% )
of all revenues in accordance with the terms and
provisions of the Operating Agreement.
7.2 Prior to Payout, neither Party shall have the right to take in
kind any of the Hydrocarbons produced from any and all Oil Mining
Leases resulting from the OPL. All such production shall be
marketed and sold under the direction of the Management Committee
in accordance with the terms of the Operating Agreement. Royalties
and Petroleum Profits Taxes shall be allocated to the Parties in
the same proportion as revenues are being allocated to them under
Article 7.1 (e) above.
7.3 After Payout, ATLAS and SUMMIT shall each be entitled to take and
receive their respective Participating Interest shares of all
Hydrocarbons produced from any and all Oil Mining Leases resulting
from the OPL in accordance with the terms and provisions of the
Operating Agreement.
7.4 After Payout, ATLAS and SUMMIT shall separately pay Royalties and
Petroleum Profits Tax on the share of Hydrocarbons actually
received by each Party.
ARTICLE 8
8.0 CONDITIONS PRECEDENT
8.1 SUMMIT's obligation to make any payments or the performance by
SUMMIT of its other obligations under this Agreement shall be
subject to the prior satisfaction of the following conditions:
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(a) Execution and delivery of the Assignment by ATLAS to SUMMIT
and approval of such Assignment by the Government;
(b) Recording of the OPL and the Assignment from ATLAS to
SUMMIT in the appropriate records;
(c) Appropriate action by the Government acceptable to SUMMIT's
to legally permit and authorize SUMMIT to own up to a
thirty percent (30%) interest in the OPL and any resulting
Oil Mining Lease(s) and to share in any Hydrocarbons
produced therefrom and the revenues from the sale of such
Hydrocarbons;
(d) Assurances satisfactory to SUMMIT by the Government that
SUMMIT and its successors and assigns may freely export and
sell their share of Hydrocarbons produced from any Oil
Mining Lease(s) resulting from the OPL and may retain
abroad the proceeds of such sales; and
(e) The negotiation and execution of a mutually acceptable
Operating Agreement between ATLAS and SUMMIT in accordance
with the provisions of Article 9.1 and 9.2 below.
8.2 If any of the conditions set forth in Article 8.1 have not been
satisfied in the sole opinion of SUMMIT or waived in writing by
SUMMIT within a period of thirty (30) days from the date of this
Agreement, SUMMIT shall have the right and option, but not the
obligation, to terminate this Agreement by giving written notice
to ATLAS. In any event, failure by ATLAS to satisfy such
conditions relieves SUMMIT of its obligations hereunder until such
conditions are satisfied by ATLAS or waived by SUMMIT.
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ARITCLE 9
9.0 OTHER AGREEMENTS/LEGISLATION
9.1 The activities of the Parties in the License Area shall be
governed by the terms of the OPL and the Operating Agreement. The
Parties shall use their best efforts to negotiate and execute the
Operating Agreement within thirty (30) days after the date of this
Agreement. If the Operating Agreement has not been executed within
that period, SUMMIT and ATLAS each shall have the right and
option, but not the obligation, to elect to terminate this
Agreement. In any event, SUMMIT shall be relieved of its
obligations hereunder until the Operating Agreement has been
executed.
9.2 The Operating Agreement shall include, among other things, the
following provisions:
(a) ATLAS shall be the Operator of the License Area on behalf
of ATLAS and SUMMIT.
(b) ATLAS, as Operator of the License Area, shall delegate to
SUMMIT the authority under the Operating Agreement to
obtain or provide services and technical and operational
expertise necessary or appropriate for the conduct of
operations on the License Area, including without
limitation the recruitment of necessary experts and
technical personnel. The Patties will use good faith
efforts to employ Nigerian personnel and companies to the
extent the same are available and qualified, and the
Patties shall vigorously pursue transfer of technology
until the number of expatriate personnel is reduced to the
barest minimum in compliance with Nigerian law.
(c) The Parties shall enter into a mutually agreeable initial
work program in compliance with the terms of the OPL,
pursuant to which the Parties will conduct operations on
the License Area, including without limitation geological
and geophysical operations, seismic studies, drilling and
completion operations, seismic studies and any other
necessary or appropriate operations in connection with the
License Area.
(d) ATLAS and SUMMIT shall form a management committee (the
"Management Committee") which shall serve as the decision-
making body for the Parties. The Management Committee,
which shall consist of seven members, shall exercise
overall supervision and control of all
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matters pertaining to the License Area. Each Party shall
appoint three representatives to serve on the Management
Committee. In addition, until Payout, SUMMIT shall be
entitled to appoint one additional representative who must
be approved by ATLAS, and after Payout ATLAS will be
entitled to appoint such additional representative. The
representatives shall be authorized to attend, represent
and exercise the rights, powers and authorities of, and
bind the Patties with respect to any matter within the
authority or power of the Management Committee. Any member
of the Management Committee may delegate its voting
authority to any other member.
(e) The Management Committee shall, among other things, have
the authority to do the following:
(i) approve plans for the exploration of the License
Area, the drilling and completion of wells thereon
and the production of Hydrocarbons therefrom; and
(ii) approve a regularly prepared budget to govern
activities with respect to the License Area;
provided, however, that any such budget must be
unanimously approved by the Management Committee.
(f) The positions of Managing Director, Operations Manager,
Financial Director and Financial Controller shall be
established and their duties, authority and
responsibilities shall be fully described in the Operating
Agreement. The Managing Director and the Operations Manager
shall manage, administer and operate all day-to-day
business and affairs on the License Area. ATLAS shall be
entitled to appoint the Managing Director and SUMMIT shall
be entitled to appoint the Operations Manager.
(g) Prior to Payout, SUMMIT shall be entitled to appoint the
Financial Director and ATLAS shall be entitled to appoint
the Financial Controller. After Payout, such Financial
Director shall be appointed by ATLAS and the Financial
Controller shall be appointed by SUMMIT. The Financial
Director shall establish the primary banking relationship
for the Parties with a Swiss bank such as Union Bank of
Switzerland, or such other bank as the Financial Director
may from time to time select with the approval
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of the Management Committee. All transactions with respect
to the License Area shall be conducted in Dollars, except
to the extent otherwise required under the OPL.
(h) For the period during which both ATLAS and SUMMIT own an
interest in the License Area, (i) SUMMIT agrees that
neither it nor any of its Affiliates shall enter into the
Oil and Gas Business in the Federal Republic of Nigeria;
and (ii) ATLAS agrees that neither it nor any of its
Affiliates shall acquire any right or interest in the Oil
and Gas Business in the Federal Republic of Nigeria unless
ATLAS or its Affiliates first offer to SUMMIT the right to
acquire an undivided thirty percent (30%) of such right or
interest to be acquired by ATLAS in the Oil and Gas
Business. ATLAS shall promptly notify SUMMIT in writing of
each and every proposed acquisition and SUMMIT shall have
thirty (30) days after receipt of each notice within which
to elect to participate in the acquisition described in
such notice. For purposes hereof, "Oil and Gas Business"
means (i) the acquisition and ownership of any oil and gas
properties or interests of any kind whatsoever ("Oil and
Gas Interests"); (ii) the exploration, development or
operation of Oil and Gas Interests; (iii) the marketing,
gathering, compression, treating or processing of oil and
gas production; or (iv) the transportation of oil and gas
production.
9.3 In the case of a conflict between the provisions of this
Agreement and the Operating Agreement, except as otherwise
specifically provided in the Operating Agreement, the provisions
of this Agreement shall govern as between the Parties.
9.4 To facilitate the orderly conduct of operations on the License
Area under the OPL pending the execution of the Operating
Agreement, the Parties shall establish an interim management
committee (the "Interim Management Committee") upon execution of
this Agreement which shall serve as the decision-making body for
the Parties until execution of the Operating Agreement. The
Interim Management Committee shall exercise overall supervision
and control of all matters pertaining to the License Area. Each
Party shall appoint one representative to serve on the Interim
Management Committee. Each representative
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shall be deemed authorized to attend, represent and exercise the
rights, powers and authorities of, and bind that Party with
respect to any matter within the authority or power of the Interim
Management Committee.
9.5 Either member of the Interim Management Committee may convene a
meeting of the Interim Management Committee upon three (3) days'
advance written notice. Proposals for activities on the License
Area shall be in writing and shall, to be effective, be approved
by all members of the Interim Management Committee.
9.6 ATLAS shall obtain all necessary or appropriate licenses, permits
or other official (or unofficial) clearances to permit the
exploration and development of the License Area (OPL 75) and the
marketing of Hydrocarbons therefrom, including without limitation
(a) approvals from the MPMR and other necessary or appropriate
governmental agencies to ensure that production from the License
Area participates pro rata under any production or sales
limitation imposed by OPEC or any like organization, and (b) an
oil allocation contract for the benefit of the Parties, where
possible.
ARTICLE 10
10.0 FORCE MAJEURE
10.1 No Party hereto shall be liable for any failure to perform, or
delay in performing, any of its obligations hereunder, other than
its obligations to pay money, to the extent that such performance
has been delayed, prevented or otherwise hindered by an event of
"Force Majeure." For purposes hereof, the term "Force Majeure"
shall include, but not limited to, hostilities, restraints of
rulers or people, revolution, civil commotion, strike, labor
disturbances, epidemic, accident, fire, lightning, f1ood, wind,
storm, earthquake, explosion, blowout, crater, blockade or
embargo, lack of or failure of transportation facilities or any
law, proclamation, regulation or ordinance, demand or requirement
of any government or any government agency having or claiming to
have jurisdiction over the Parties hereto, or any act of God, or
any other act of Government, act of omission of supplier or any
other cause, whether of the same or different nature, existing or
future, that is beyond the control and without the fault or
negligence of the Party assessing benefit of this Article.
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10.2 If Force Majeure causes a suspension of an obligation of any
Party, that Party shall give notice as soon as reasonably possible
to the other Party stating the date and extent of the suspension
and the nature of the Force Majeure. Any Party whose obligation
has been suspended shall take all reasonable steps to remove the
Force Majeure situation and shall resume the performance of that
obligation as soon as reasonably possible after the removal of the
Force Majeure and shall so notify the other Party. Force Majeure
as to one obligation is not, PER SE, Force Majeure as to any other
obligations.
10.3 The settlement of strikes and lockouts shall be entirely within
the discretion of the affected Party, and the requirement that
Force Majeure shall be remedied with all reasonable dispatch,
shall not require the settlement of strikes or lockouts by
acceding to the demands of the opposing party when such a course
is deemed inadvisable in the discretion of the affected Party.
ARTICLE 11
11.0 ASSIGNMENT
11.1 Neither Party may assign, transfer or otherwise dispose of all
its rights or obligations hereunder, except to an Affiliate,
without the prior written consent of the other Party. Any assignee
or successor shall be bound by the terms of this Agreement, and
any assignment shall be subject to any required approvals by the
MPMR. In the event a Party makes an assignment to an Affiliate,
the Party shall promptly notify the other Party of such
assignment.
11.2 At any time after the earlier to occur of (a) the date which is
ninety (90) days after completion or abandonment of three (3)
wells drilled on the License Area, and (b) December 31, 1993,
SUMMIT shall have the option to withdraw from this Agreement and
reassign its Participating Interest to ATLAS (or its designee) and
thereafter SUMMIT shall have no further rights or obligations
hereunder; provided, however, that SUMMIT shall be entitled to
continue to receive its Participating Interest share of revenues
attributable to the sale of Hydrocarbons from wells drilled on the
License Area prior to the date of its election to reassign.
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11.3 In the event that SUMMIT elects to reassign its Participating
Interest to ATLAS(or its designee) pursuant to Article 11.2 above,
ATLAS hereby agrees to accept such reassignment and to protect,
indemnify and hold SUMMIT harmless from and against any and all
costs, expenses and liabilities arising after the date of SUMMIT's
election to reassign in connection with the License Area, whether
under the OPL, any Oil Mining Lease resulting therefrom, this
Agreement, the Operating Agreement, or otherwise. SUMMIT hereby
agrees to protect, indemnify and hold ATLAS harmless from and
against any and all costs and expenses arising from obligations
contracted for by SUMMIT prior to the date of SUMMIT's election to
reassign.
ARTICLE 12
12.0 GOVERNING LAW, ARBITRATION AND LIABILITIES
12.1 This Agreement shall be governed by and construed in accordance
with the laws of the Federal Republic of Nigeria, except such
provisions hereof which would require the application of the laws
of another jurisdiction. For purposes of enforcing any arbitration
award rendered pursuant to the provisions of Article 12.2 below,
(a) SUMMIT hereby appoints the Secretary of State of the State of
Texas in Austin, Texas, as its agent for service of process and
hereby waives any claim of lack of jurisdiction of the courts of
Texas over SUMMIT or any award, and agrees that any such award
shall be enforceable in Texas; and (b) ATLAS hereby appoints the
Attorney General of the Federal Republic of Nigeria as its
agent for service of process and hereby waives any claim of lack
of jurisdiction of the courts of the Federal Republic of Nigeria
over ATLAS or any such award, and agrees that any such award shall
be enforceable in the Federal Republic of Nigeria.
12.2 Any dispute arising out of or relating to this Agreement,
including any question regarding its existence, validity or
termination, shall be settled before an arbitration committee
composed of two arbitrators, one to be appointed by ATLAS and one
to be appointed by SUMMIT, in accordance with the Rules of
Reconciliation and Arbitration of the International Chamber of
Commerce, and judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof. The place
of
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arbitration shall be Geneva, Switzerland, and all proceedings
shall be conducted in the English language. A dispute shall be
deemed to have arisen when any Party gives notice to the other
Party to that effect.
12.3 Notwithstanding any other provisions of this Agreement, in no
event shall any Party be liable to the other Party for loss of
prospective profits, or special, indirect or consequential
damages, in connection with this Agreement or with respect to any
operations related thereto.
12.4 Subject to the other provisions of this Agreement, the OPL, any
Oil Mining Lease resulting therefrom, the Operating Agreement, the
Participating Interests of the Parties shall be owned and held
severally and not jointly or collectively, in undivided interests,
and each Party waives for itself, and for and on behalf of its
successors and assigns, all rights of partition.
12.5 Each Party is solely and individually responsible for any and all
taxes which may become due with respect to that Party's earnings
or income resulting from the operations contemplated under this
Agreement, as well as from any other source (including its own
depreciation and amortization policy); provided that each Party
shall indemnify, defend and hold harmless each other Party from
and against any loss, cost or liability arising from that Party's
obligations.
12.6 The obligations and liabilities of the Parties are several and
not joint.
12.7 It is the intention of the Parties that this Agreement shall not
be regarded as a partnership, and the Parties agree that the
Agreement shall not be construed to create the relationship
between the Parties of a tax partnership. Each Party acknowledges
that there is no obligation to jointly compute or report any item
of income, gain, loss, credit or deduction. All items of income,
gain, loss, credit or deduction derived by each Party under the
Agreement may and shall be separately determined for their
separate accounts without the requirement or necessity for
computing partnership income or loss. Each Party elects exclusion
from the application of all of the provisions of Subchapter K,
Chapter 1, Subtitle A of the United States Internal Revenue Code
of 1986, as amended (the "Code"). SUMMIT is authorized, after due
consultation with ATLAS, to execute and file on behalf of each
Party the elections, statements and related documents with
appropriate officers of the United States Internal Revenue Service
which may be
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necessary and desirable under the provisions of Section 761 of
the Code and the regulations thereunder to perfect exclusion from
the provisions of Subchapter K.
ARTICLE 13
13.0 NOTICES
13.1 Any notice to be given hereunder shall be in writing and may be
delivered by hand, sent by certified or registered mail or
transmitted by cable or facsimile to the relevant address get
forth below, or such other address as may be communicated by the
relevant Party to the other Party from time to time. Any notice,
communication or delivery hereunder shall be deemed to have been
duly made when personally delivered to, or when a cable or
facsimile bas been received at, the address indicated below; or if
mailed, when received by the Party charged with such notice at the
address indicated below.
13.2 The relevant addresses for all notices shall be as follows:
If to ATLAS :
Atlas Petroleum International Limited
No. IB Ibiyinka Olorunibe Close
Off Ahmodu Ojikuta Street
Victoria Island
Lagos
Nigeria
Attention: Alhaji Ndanusa
Telephone No.: (234)(1)615296
Facsimile No.: (234)(1)615689
If to SUMMIT:
Summit Partners Management Co.
2200 Ross Avenue, Suite 4300E, LB170
Dallas, Texas 75201 U.S.A.
Attention: Don V. Ingram
Telephone No.: (214) 220-4300
Facsimile No.: (214) 220-4349
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ARTICLE 14
14.0 CONFIDENTIALITY
14.1 Upon execution of this Agreement, SUMMIT shall be entitled to all
data and information developed with respect to the OPL or the
License Area. In this regard, ATLAS shall make available to
SUMMIT: (a) copies of all decrees, permits, licenses, contracts,
agreements and any other documents relating to the OPL or the
License Area, including any English translations of the same: (b)
all geological and geophysical data, maps, models, interpretations
and other technical data relating to the OPL or the License Area;
and any work programs and/or budgets relating to the OPL or the
License Area which have been submitted to the Government, together
any and all correspondence or other communications with Government
regarding the same.
14.2 The Parties agree to keep the terms of this Agreement,
commercial, contractual and financial information with respect to
or pertaining to the OPL or the License Area, as well as all data
and information referred to in Article 14.1 (hereinafter referred
to as the "Information"), strictly confidential and shall not
disclose the information to any third party other than an
Affiliate, or its attorneys, or agencies delegated by the Federal
Republic of Nigeria, without the prior written consent of the
other Party and, when the OPL or applicable Nigerian laws so
requires, the Government.
14.3 The obligation of confidentiality in Article 14.2 shall not apply
to:
(a) Information which becomes available to any Party or its
respective Affiliates from a third party as a matter of
right without restriction of disclosure;
(b) Information which is, or which becomes, part of the public
domain; and
(c) Information requested by governmental, judicial or
financial authorities under the laws, rules or regulations
of the United States of America or the Federal Republic of
Nigeria.
14.4 Nothing in Article 14.2 shall prevent a Party from disclosing
Information to:
(a) Employees, Affiliates, consultants, contractors and
sub-contractors to the extent required for the efficient
conduct of operations on the License Area, provided such
Information is disclosed on terms which provide for the
Information to be treated as confidential by the recipient
and, in the
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case of disclosures to consultants, contractors and
sub-contractors, the Party making disclosure obtains
form such individuals or entities prior to making
disclosure a written confidentiality undertaking no less
restrictive than the obligation of the disclosing Party
under Article 14.1;
(b) Any bank or financial institution from which a Party may
seek financing, after receiving from it a confidentiality
agreement; and
(c) Any recognized stock exchange upon whicl1 the shares of the
disclosing Party, or an Affiliate, are listed, provided
that the Party is required to reveal such Information by
applicable Jaw or regulation, and to shareholders to the
extent a Party must disclose Information in an annual or
periodic report.
ARTICLE 15
15.0 MISCELLANEOUS
15.1 The captions and headings for the Articles of this Agreement are
made for convenience only and shall not be interpreted or
construed so as to limit or in any way or change the substantive
provisions of any part of this Agreement.
15.2 None of the rights, requirements or provisions of this Agreement
shall be deemed to have been waived by any Party by reason of such
Party's failure to enforce any right or remedy granted it
hereunder or to take advantage of any default, and each Party
shall at all times hereunder have the right to require the strict
compliance of the other Parties to the provisions of this
Agreement.
15.3 Except as otherwise provided herein, this Agreement constitutes
the entire understanding of the Parties with respect to the
subject matter hereof and supersedes all prior negotiations and
agreements, whether oral or written, of the Parties.
15.4 The Parties acknowledge that SUMMIT is subject to the laws of the
United States of America and the Parties agree to use their best
efforts to ensure that no actions under this Agreement or the
Operating Agreement shall be taken or permittes which are in
contravention of such laws.
15.5 Each Party shall do all such further acts and execute and deliver
all such further documents, as shall be reasonably required, in
order to fully perform and carry out this Agreement.
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15.6 This Agreement shall inure to the benefit of, shall bind, and
shall be enforceable by and against each Party and its respective
successors and assigns.
15.7 Each of the Parties represents and warrants to the other that it
has not made any arrangement or in any way incurred any liability
for a finder's fee or any other remuneration to a broker, finder
or agent whereby the other Party hereto might become liable for
any such fee or other remuneration, and if any such fee or any
remuneration becomes payable by any Party hereto as a result of
any arrangements made by the other Party, the Party which has made
such arrangement agrees to protect, defend, indemnify and hold
hann1ess the other Party hereto to the full extent of such
liability.
IN WITNESS WHEREOF, the duly authorized representatives of the Parties hereto
have executed this Agreement in triplicate originals on the day, month and year
first written above.
SUMMIT PARTNERS MANAGEMENT CO.
By: Don V. Ingram, President By: Scott C. Larsen, Senior Vice
President
ATLAS PETROLEUM INTERNATIONAL LIMITED
By: Prince Arthur Eze, Chairman By: Alhaji Ndanusa, Vice Chairman
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Exhibit "A"
[copy of letter dated March 27, 1991 from the Nigerian Minister of Petroleum
Resources to The Group Chairman, Atlas Petroleum Int. Ltd. Re : Grant of Oil
Prospecting License: Authorization to Commence Operation in OPL 75]
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EXHIBIT "B" ASSIGNMENT
FOR GOOD AND VALUABLE CONSIDERATION, ATLAS PETROLEUM INTERNATIONAL LIMITED,
being a corporation organized and existing under the laws of the Federal
Republic of Nigeria ("ATLAS"), hereby assigns to SUMMIT PARTNERS MANAGEMENT
CO., a corporation organized and existing under the laws of the State of
Texas ("SUMMIT"), an undivided thirty percent (30% ) interest in and to the
rights, privileges, benefits, duties, burdens and obligations in and under
Oil Prospecting License 75, dated March 27, 1991, hereinafter the "OPL ".
After Government approval of this Assignment, the parties to the OPL and
their interests shall be as follows:
COMPANY PARTICIPATING INTEREST
- ------- ----------------------
SUMMIT 30%
ATLAS 70%
This Assignment shall become effective as of the date signed, subject to the
written consent and approval of the Minister of Petroleum and Mineral
Resources.
IN WITNESS WHEREOF, the parties have executed this Assignment on this 17th
day of July, 1992, but effective as of the date set forth above.
SUMMIT PARTNERS MANAGEMENT CO.
By: By:
----------------------------- -----------------------------
Don V. Ingram, President Scott C. Larsen, Senior Vice
President
ATLAS PETROLEUM INTERNATIONAL LIMITED
By: By:
----------------------------- -----------------------------
Prince Arthur Eze, Chairman Alhaji Ndanusa, Vice Chairman
APPROVED on this day of 1992.
By:
----------------------------
Title:
----------------------------
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