Document:

exv10w1

 

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

     THIS EXECUTIVE EMPLOYMENT AGREEMENT, dated as of the 9th day of August,
2007, is between Penn-America Insurance Company, a Pennsylvania corporation with its principal
offices in Bala Cynwyd, PA (the “Company”) and Raymond H. McDowell, an individual residing at 7
Splitrail Lane, Medford, New Jersey (the “Executive”).

     WHEREAS, the Company desires that Executive be employed by the Company in the capacity of
President of the Penn-America Insurance Group; and

     WHEREAS, the parties desire to enter into this Agreement to set forth the terms and conditions
of Executive’s employment.

     NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for
other good and valuable consideration, the receipt of which is mutually acknowledged, the Company
and the Executive agree as follows:

     1. TERM OF EMPLOYMENT; RENEWAL. The Company agrees to employ the Executive and
the Executive accepts employment with the Company for the period commencing as of September 4,
2007 (the “Effective Date”) and ending on December 31, 2011 (such initial period, as extended
below, shall be referred to as the “Employment Term”). The term of this Agreement will
automatically renew at the expiration of the then current term for an additional one-year
period unless, at least one hundred and twenty (120) days prior to the expiration date of
the then current term, either party shall give written notice of non-renewal to the
other, in which event this Agreement shall terminate at the end of the term then in
effect. To the extent that the Executive continues employment with the Company or any Affiliate (as
defined below) following the expiration of the Term, and without having reached agreement on a new
written agreement, the Executive shall be an employee at will and none of the provisions of this
Agreement shall apply other than Sections (6) and(7) hereof.

     2. POSITION AND DUTIES. The Executive shall serve as the President of the Company’s
Penn-America Insurance Group, reporting to the President and Chief Executive Officer (“CEO”) of
United America Indemnity Group, Inc. (“UAIGI”) and shall have such authority and duties, consistent
with such position, as may from time to time be specified by the CEO or the Board of Directors (the
“Board”) of United America Indemnity, Ltd. (“UAI, Ltd.”) At the request of the CEO or Board, the
Executive shall also serve, without additional compensation, as an officer or director of any
Affiliates of the Company that are involved in the business of the Company and/or its Affiliates.
For purposes hereof, an “Affiliate” means any company that is controlled by, under common control
with, or that controls the Company. The Executive’s principal place of business shall be at the
Company’s principal executive offices in Bala Cynwyd, Pennsylvania, subject to business travel.

     3. ENGAGEMENT IN OTHER EMPLOYMENT. The Executive shall devote his business time, energies and
talents to the business of the Company and shall comply with each of the Company’s corporate
governance and ethics guidelines, conflict of interests policies and code of conduct applicable to
all Company employees or senior executives as adopted by the Board from time-to-time. The
Executive first shall obtain the consent of the Board in writing before

 

 

engaging in any other business or commercial activities, duties or pursuits. Notwithstanding
the foregoing, nothing shall preclude the Executive from (i) engaging in charitable activities and
community affairs and (ii) managing his personal investments and affairs.

     4. COMPENSATION.

          (a) ANNUAL DIRECT SALARY. During the term of this Agreement, as compensation for services
rendered to Company under this Agreement while Executive is employed with the Company, the
Executive shall be entitled to receive from the Company an annual direct salary of not less than
$300,000 per year, subject to all applicable federal, state and/or local tax and other
withholdings, commencing as of your date of employment (the “Annual Direct Salary”). Executive’s
Annual Direct Salary shall be payable in substantially equal biweekly installments, and shall be
prorated for any partial employment period. The Annual Direct Salary shall be reviewed by the CEO
and/or Board in April of each year this Agreement is in effect and may be adjusted in the
discretion of the CEO and/or Board after taking into account the prevailing market value of the
position and the then current pay increase practice of the Company. In no event shall the Annual
Direct Salary be decreased without the express written consent of the Executive.

          (b) SIGNING BONUS. Upon his commencement of employment, the Executive shall receive a
“signing bonus” consisting of the following: (i) a cash payment of $400,000, of which $150,000
shall be paid to the Executive within 30 days of his commencement of employment with the Company
and $250,000 shall be paid on or before March 15, 2008, provided that in each case the Executive is
employed by the Company in good standing as of such payment dates or has been terminated by the
Company without “Cause” (as defined herein) prior to March 15, 2008 (collectively, the “Cash
Signing Bonus”). If the Executive resigns or his employment is terminated by the Company for
“Cause” (as defined below), in each case on or before March 15, 2008, the Executive shall repay to
the Company all of the Cash Signing Bonus that he has received as of such date, and the Company may
set-off or deduct from any other amounts due the Executive (or property held by the Company or its
affiliates) amounts owed by the Executive hereunder.

          (c) ANNUAL BONUS. In respect of each full calendar year (commencing with the 2008 accident
year, determined in accordance with generally accepted accident year insurance accounting
methodology consistently applied (and verified by the Company’s independent auditors)) during which
Executive served as the Company’s President during the entirety of such year (Bonus Year), the
Company shall provide Executive with a bonus opportunity of $450,000 (Annual Bonus) determined,
awarded, and paid as follows:

          (d) Bonus Computation. The Annual Bonus shall consist of:

                    (A) One-third (1/3) of each Annual Bonus shall be satisfied by the issuance of restricted
shares of Class A Stock, as of March 15 of the year following the Bonus Year, with such issuance
conditioned on (x) the Executive being actively employed in good standing by the Company as of such
date (or if such date is not a business day, the immediately preceding business day) (valued for
this purpose at the closing price of the Class A Stock on the last trading day of the relevant
Bonus Year as reported in the Wall Street Journal) and (y) the achievement by the Company
for such Bonus Year (in whole or in part, as the case may be) of

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accident year targets and other measures of performance as recommended by the Chairman of UAI,
Ltd. and as approved by the Board. Such restricted shares shall vest and become transferable on
each of the first four (4) anniversaries of the issuance thereof, provided that vesting of such
shares shall cease at such time as (1) Executive resigns from the Company, (2) Executive is
terminated by the Company for Cause, or (3) Executive does not comply with the restrictive
covenants and obligations set forth in Section (7) herein, along with his obligations, if
applicable, under any release which he is required to provide in favor of the Company and those
under any separation agreement to which he is party with the Company and/or its Affiliates
(collectively, the “Post-Termination Obligations”). (The terms of the Restricted Shares shall be
otherwise subject to the UAI Ltd. form of “Restricted Share Agreement” attached hereto). With
respect to the grant and vesting of the bonus restricted shares or the payment of the cash portion
of the bonus as provided for below, the Board’s good faith determination as to the satisfaction of
any accident year targets and/or targets performance measures shall be final and binding.

                    (B) Two-thirds (2/3) in the form of a cash payment, to be paid to the Executive on or before
March 15 following the applicable Bonus Year, subject to the achievement by the Company for such
Bonus Year of accident year targets and other performance measures as recommended by the Chairman
of UAI, Ltd. and as approved by the Board, provided that the Executive is employed in good standing
as of such payment date.

                    (C) If the Executive remains employed in good standing through the expiration of the
Employment Term and is otherwise in compliance with the terms of this Agreement, he may, upon
thirty (30) days’ prior written notice to the Company prior to the expiration of the Employment
Term, elect to accelerate the vesting of any then unvested restricted shares previously granted
pursuant to this Section 4(d) (“End of Employment Term Acceleration Notice”), in which case he
shall remain subject to the previsions of Section (7) hereof (as provided for therein) with respect
to such End of Employment Term Acceleration Notice.

               (e) EQUITY INCENTIVE AWARDS. Provided that the Executive is actively employed in good
standing by the Company at the time of the next meeting of the Board, the CEO shall recommend to
the Board that the Executive be granted an award of (i) 15,000 shares of restricted Class A Stock
of the Company, vesting in one-third equal installments on each anniversary date of the Executive’s
commencement of employment, provided that he is employed in good standing as of such date and his
employment has not been terminated for any reason, and (ii) 20,000 time vested options on the
Company’s Class A Stock, vesting in 25% installments on each anniversary date of the Executive’s
commencement of employment, provided that he is employed in good standing as of such date and his
employment has not terminated for any reasons. Attached hereto are the forms of Restricted Stock
Agreement and Time Vesting Option Agreement and such awards shall be subject to the terms and
conditions of the Company’s form of agreement(s). During the Employment Term, the Executive may be
eligible to receive additional equity incentive awards in UAI, Ltd. as determined by the Board in
its sole discretion. Such equity incentive awards shall be subject to any exercise, vesting or
other restrictions imposed on such restricted stock awards by the Board in its discretion.

               (f) CHANGE OF CONTROL. Upon a change of control of UAI, Ltd. as defined in the Annex attached
hereto, all unvested restricted shares and unvested options held by the Executive shall accelerate
and vest in full (and thereafter become exercisable).

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     5. FRINGE
BENEFITS, VACATION TIME, EXPENSES, AND PERQUISITES.

          (a) EMPLOYEE BENEFIT PLANS. The Executive shall be entitled to participate in or receive
benefits under all corporate employment benefit plans, including, but not limited to, any pension
plan, savings plan, medical or health-and-accident plan or arrangement generally made available by
the Company to similarly situated executives as a group, subject to and on a basis consistent with
the terms, conditions and overall administration of such plans and arrangements.

          (b) The Executive shall be entitled to the number of paid vacation days in each calendar year
determined by the Company from time to time for its senior executive officers, but not less than
four (4) weeks in any calendar year (prorated in any calendar year during which the Executive is
employed hereunder for less than the entire such year in accordance with the number of days in such
calendar year during which he is so employed). The Executive shall also be entitled to all paid
holidays, sick days and personal days given by the Company to its senior executive officers.

          (c) During the term of his employment hereunder, the Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by him (in accordance with the policies
and procedures established by the Company from time to time) in performing services hereunder,
provided that the Executive properly accounts, therefore, in accordance with Company policy.

     6. PROTECTION OF COMPANY INFORMATION. During the period of his employment, or at any later
time following the termination of his employment for any reason, the Executive shall hold in a
fiduciary capacity for the benefit of the Company and its affiliates, and shall not, without the
written consent of the Board, knowingly disclose to any person, other than an employee of the
Company or a person to whom disclosure is reasonably necessary or appropriate in connection with
the performance by the Executive of his duties as an executive of the Company, or use for any
purpose other than to perform his duties hereunder, any “Confidential Information” of the Company
or any of its Affiliates obtained by him while in the employ of the Company. The Confidential
Information protected by this provision shall include all computer software and files, policy
expirations, telephone lists, customer lists, prospect lists, marketing information, information
regarding managing general agents, pricing policies, contract forms, customer information,
copyrights and patents, the identity of Company and Affiliate employees, Company and Affiliate
books, records, files, financial information, business practices, policies and procedures,
underwriting policies and practices of the Company and of any Affiliate of the Company, information
about all services and products of the Company and its Affiliates, names of users or purchasers of
the products or services of the Company or its affiliates, methods of promotion and sale and all
information which constitutes trade secrets under the law of any state in which the Company or any
of its Affiliates does business. No information shall be treated as Confidential Information if it
is generally available public knowledge at the time of disclosure or use by Executive, provided
that information shall not be deemed to be publicly available merely because it is embraced by
general disclosures or because individual features or combinations thereof are publicly available.
The Executive agrees that any breach of the restrictions set forth in this Section will result in
irreparable injury to the Company and/or its Affiliates for which there is

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no adequate remedy at law and the Company and its Affiliates shall, in addition to any other
remedies available to them, be entitled to injunctive relief and specific performance in order to
enforce the provisions hereof and shall be entitled to recover its attorneys’ fees and costs
incurred in connection with seeking such relief or otherwise as a result of a breach by the
Executive of the terms of this section. Notwithstanding the foregoing provisions, if the Executive
is required to disclose any such confidential or proprietary information pursuant to applicable law
or a subpoena or court order, the Executive shall promptly notify the Company, in writing,
of any such requirement so that the Company or the appropriate affiliate may seek an appropriate
protective order or other appropriate remedy or waive compliance with the provisions hereof. The
Executive shall reasonably cooperate with the Company to obtain such a protective order or other
remedy. If such order or other remedy is not obtained prior to the time the Executive is required
to make the disclosure, or the Company waives compliance with the provisions hereof, the Executive
shall disclose only that portion of the confidential or proprietary information which he is advised
by counsel that he is legally required to so disclose. All records, files, memoranda, reports,
customer lists, drawings, plans, documents and the like that the Executive uses, prepares or comes
into contact with during the course of the Executive’s employment shall remain the sole property of
the Company and/or its affiliates, as applicable. The Executive shall execute and deliver the
Company’s standard “work for hire” agreement regarding ownership by the Company of all rights in
its confidential and business materials.

     7. RESTRICTIVE COVENANTS.

          (a) NON-COMPETITION AGREEMENT. The Executive acknowledges and agrees that the insurance
business and operations of the Company and its Affiliates are national in scope, and that the
Company and its Affiliates operates in multiple locations and business segments in the course of
conducting its business. In consideration of this Agreement, the Executive covenants and agrees
that during his employment with the Company, and for a period of twelve (12) months following the
termination of such employment for any reason, the Executive shall not (i) engage, whether as
owner, manager, operator, agent, employee, consultant or otherwise, directly or indirectly, in any
insurance related business competitive with the business of the Company or its Affiliates
(including, without limitation, any insurance business that is comprised of similar lines of
products or coverage or that derives revenues or premiums from similar marketing or production
techniques or through the use of a Producer or Producers, ((as defined below)) (or any reinsurance
business providing services to the foregoing) (a “Competitive Business”), (ii) engage, whether as
an owner, manager, operator, agent, employee, consultant or otherwise, directly or indirectly, in
any insurance related business with a Producer or Producers (as defined below) of the Company or
its Affiliates, or (iii) use any information obtained in the course of the Executive’s employment
by the Company for the purpose of notifying individuals of the Executive’s willingness to provide
services after such termination in competition with the Company or in breach of this Agreement.
Ownership of less than 5% of the securities of any publicly traded company will not violate this
Section 7(a). “Producer” or “Producers” shall mean managing general agents, wholesale general
agents, and other producers or wholesale distributors, retail distributors, or other distributors
of property and casualty insurance business underwritten by the Company. Notwithstanding the
foregoing, if the Executive satisfies the conditions with respect to the delivery of an End of
Employment Term Acceleration Notice, and delivers such notice, the Executive shall remain subject
to the foregoing provisions of this Section 7(a) for a period of six (6) months following the
expiration of the Employment Term.

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In the event that this paragraph or paragraph (c ) below shall be determined by any court of
competent jurisdiction to be unenforceable in part by reason of its being too great a period of
time or covering too great a geographical area, or as a result of the scope of any prohibition or
restriction on post-termination activity being too broad, it shall be in full force and in effect
as to that period of time or geographical area or scope of post-termination activity determined to
be reasonable by the court. To the extent the Executive violates the provisions of this paragraph
and paragraph (c) below the duration of such violations shall not reduce or be applied against the
twelve (12) month post-termination periods set forth therein.

          (b) RETURN OF MATERIALS. Upon termination of employment with the Company, the Executive shall
promptly deliver to the Company all Company or Affiliate property of any kind, including but not
limited to: all electronic or paper documents (including correspondence, manuals, letters, notes,
binders, files, reports and notebooks), computers and other electronic devices, mobile telephones,
computer disks and drives, software, reports and any other document or tangible item that contains
or reflects Confidential Information as defined in Section 6 of this Agreement.

          (c) NON-SOLICITATION OF EMPLOYEES AND CUSTOMERS. Should the Executive’s employment with the
Company be terminated for any reason , for a period of twelve (12) months following such
termination the Executive shall not: (i) contact, recruit, employ, entice, induce or solicit,
directly or indirectly, any employee, officer, director, agent, consultant or independent
contractor employed by or performing services for the Company or any of its Affiliates to leave the
employ of or terminate services to the Company or such Affiliate, including, without limitation,
for the purpose of working with the Executive, with the entity with which the Executive has
affiliated (as an employee, consultant, officer, director, stockholder or otherwise), or with any
other entity; (ii) directly or indirectly, transact or otherwise engage in insurance-related
business with, or seek, either in his individual capacity or on behalf of any other entity, whether
directly or indirectly, to solicit, communicate with or contact or advise, or transact or otherwise
engage in (or provide services with respect to) any insurance-related business with or otherwise
solicit for competitive purposes (x) any party who is or was a customer of the Company or any of
its Affiliates during Executive’s employment by the Company or at any time during the said twelve
(12) month period, or (y) any party who was identified as a prospective customer of the Company or
any of its Affiliates during Executive’s employment by the Company; or (iii) directly or indirectly
engage in or participate in any effort or act to induce any customer of the Company or any of its
Affiliates to take any action which might be disadvantageous to the Company or its Affiliates. For
purposes of this Agreement, “customer” shall include, without limitation, any policyholder,
managing general agent, wholesale general agent, broker, Producer or re-insurer with whom the
Company or its Affiliates has transacted business. Notwithstanding the foregoing, if the Executive
satisfies the conditions with respect to the delivery of an End of Employment Term Acceleration
Notice, and delivers such notice, the Executive shall remain subject to the foregoing provisions of
this Section 7(c) for a period of six (6) months following the expiration of the Employment Term.

          (d) WORK FOR HIRE: All original works of authorship which have been or are made by Executive
within the scope of and during the period of his employment with the Company and which are
protectable by copyright are “works for hire” and the Company or its designee shall own all rights
therein.

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          (e) ASSIGNMENT OF INVENTION: Executive shall disclose promptly in writing to the Company, all
inventions, including discoveries, concepts and ideas, patentable or not, hereafter made or
conceived solely or jointly by Executive during employment with the Company (or its Affiliates), or
within six months after the termination of Executive’s employment, if based on or related to
proprietary information of the Company or its Affiliates known by Executive, provided such
invention, discovery, concepts and ideas relate in some manner to the business or activities of the
Company. Executive agrees that in connection with any invention covered by this paragraph,
Executive shall, on request of the Company, promptly execute a specific assignment of title to the
Company or its Affiliates and do anything else reasonably necessary to enable the Company or its
Affiliates to secure a patent therefore in the United States and foreign countries.

          (f) COOPERATION: Executive agrees to be available to the Company from time to time to answer
questions or provide information relating to Company matters that he worked on during his
employment at the Company or its Affiliates for a period of six (6) months following his
termination of employment for any reason (the “Cooperation Period”). The Company shall make
reasonable efforts to minimize any burden placed on Executive during the Cooperation Period and
shall not unreasonably interfere in Executive’s obligations to any subsequent employer. In the
event that Executive would reasonably be required to incur any cost or expense to communicate with
the Company or travel to any location requested by the Company, the Company shall advance any such
travel or other costs reasonably incurred by Executive to comply with and perform his obligations
during the Cooperation Period.

          The Executive agrees that any breach of the restrictions set forth in Sections 6 and 7 will result
in irreparable injury to the Company for which it shall have no adequate remedy in law and the
Company shall, in addition to any other remedy available to it and in lieu of Section 14 hereof, be
entitled to injunctive relief and specific performance in an action in a court of competent
jurisdiction, as well as all attorney fees and costs incurred as a result of any breach by the
Executive of the provisions hereof. In addition to its other remedies, the Company shall be
entitled to reimbursement from the Executive and/or the Executive’s employer of costs incurred in
securing a qualified replacement as a result of any breach by the Executive of this Section.

          (g) NO FURTHER COMPANY OBLIGATIONS: In the event Executive breaches any of his covenants in
Sections 6 and 7, and in addition to any other remedies available to the Company and its
Affiliates, the Company and its Affiliates shall be released from any obligation to make payments
under Section 9 of this Agreement and (to the extent permitted by applicable law) to provide
benefits or make payments under all employee benefit plans in which Executive participates, and the
Company shall be entitled to reimbursement from the Executive of severance payments made to the
Executive by the Company following termination of employment with the Company.

          (h) REASONABLENESS OF PROVISIONS: The Executive acknowledges and agrees that the terms of
this Section 7: (i) are reasonable in light of all of the circumstances; (ii) are sufficiently
limited to protect the legitimate interests of the Company and its subsidiaries; (iii) impose no
undue hardship on the Executive; and (iv) are not injurious to the public. The Executive further
acknowledges and agrees that (x) the Executive’s breach of the provisions of Section 7 will cause
the Company irreparable harm, which cannot be adequately compensated by

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money damages, and (y) if the Company elects to prevent the Executive from breaching such
provisions by obtaining an injunction against the Executive, there is a reasonable probability of
the Company’s eventual success on the merits. The Executive consents and agrees that if the
Executive commits any such breach or threatens to commit any breach, the Company shall be entitled
to temporary and permanent injunctive relief from a court of competent jurisdiction, without
posting any bond or other security and without the necessity of proof of actual damage, in addition
to, and not in lieu of, such other remedies as may be available to the Company for such breach,
including the recovery of money damages and shall be entitled to recover its attorneys’ fees and
costs incurred in doing so.

     8. TERMINATION.

          (a) The Executive’s employment hereunder shall terminate upon his death, retirement,
resignation, or the expiration of this Agreement. Upon the Executive’s death, any sums then due
him shall be paid to the executor, administrator or other personal representative of the
Executive’s estate.

          (b) If the Executive becomes disabled (as certified by a licensed physician selected by the
Company) and is unable to perform or complete his duties under this Agreement for a period of 180
consecutive days or 180 days within any twelve-month period, the Company shall have the option to
terminate this Agreement by giving written notice of termination to the Executive. Such
termination shall be without prejudice to any right the Executive has under the disability
insurance program maintained by the Company.

          (c) The Company may terminate the Executive’s employment hereunder for Cause. For the
purposes of this agreement, the Company shall have “Cause” to terminate the Executive’s employment
hereunder upon (i) the Executive substantially failing to perform his material duties hereunder
after notice from the Company and failure to cure such violation within 10 days of said notice (to
the extent the Board reasonably determines such failure to perform is curable and subject to
notice) or violating any material Company policies, including, without limitation, the Company’s
corporate governance and ethics guidelines, conflicts of interests policies and code of conduct
applicable to all Company employees or senior executives, (ii) the engaging by the Executive in any
malfeasance, fraud, dishonesty or gross misconduct adverse to the interests of the Company or its
affiliates, (iii) the material violation by the Executive of any of the provisions of Sections 3, 6
or 7 hereof or other provisions of this Agreement, (iv) a breach by the Executive of any
representation or warranty contained herein, (v) the Board’s determination that the Executive has
exhibited incompetence or gross negligence in the performance of his duties hereunder, (vi) receipt
of a final written directive or order of any governmental body or entity having jurisdiction over
the Company requiring termination or removal of the Executive, or (vii) the Executive being charged
with a felony or other crime involving moral turpitude.

          (d) The Company may choose to terminate the Executive’s employment at any time without Cause
or reason.

          (e) The Executive may resign upon ninety (90) days’ advance written notice to the Company and
upon such notice the Company may in its discretion elect to terminate the Executive at any time,
without any payment obligations for the remainder of the ninety (90) day notice period.

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     9. PAYMENTS UPON TERMINATION.

          (a) If the Executive’s employment shall be terminated because of death, disability,
Executive’s resignation other than pursuant to Section 9(b)(ii) below, or for Cause, the Company
shall pay the Executive (or his executor, administrator or other personal representative, as
applicable) his full Annual Direct Salary through the date of termination of employment at the rate
in effect at the time of termination and the Company shall have no further obligations to the
Executive under this Agreement (and the Executive shall not be entitled to payment of any unpaid
bonus or incentive award).

	 	 	 	 	 
	(b)

	 	(i)
	 	If the Executive’s employment is terminated by the Company
without Cause; or
	 
	 	 	 	 
	 

	 	(ii)
	 	If the Executive terminates his employment within
ten (10) business days following: (I) a written notice from the
Company that its principal executive offices are being relocated more
than 90 miles from their current location or that the Executive’s
principal place of employment is transferred to an office location more
than 90 miles from his then current place of employment (unless in
either case the effect of such relocation results in the Executive’s
principal place of employment being less than forty (40) miles from his
principal residence), and (II) the failure of the Company to offer the
Executive a reasonable relocation package to cover direct out-of-pocket
losses (if any) on the sale of the Executive’s primary residence, and
temporary living expenses and moving costs,

then the Company shall pay to the Executive, as full and complete liquidated damages hereunder, an
amount equal to the Executive’s then Annual Direct Salary determined on a monthly basis and
multiplied by twelve (12), with such amount payable in twelve (12) equal monthly installments. The
Company shall also maintain in full force and effect, for the continued benefit of the Executive
for twelve (12) months, any medical or health-and-accident plan or arrangement of the Company in
which the Executive is a participant at the time of such termination of employment; provided that
the Executive shall remain responsible for continuing to pay his share of the costs of such
coverage; provided further that the Company shall not be under any duty to maintain such coverage
if the Executive becomes eligible for coverage under any other employer’s insurance and the
Executive shall give the Company prompt notice of when such eligibility occurs. No payments or
benefits shall be provided hereunder (i) unless and until the Company has first received a signed
general release from the Executive in a form acceptable to the Company releasing the Company and
Affiliates and any other parties identified by the Company and Affiliates therein, and (ii) to the
extent that the Executive has breached any of his post-termination obligations hereunder.

     10. NOTICE. For the purposes of this Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered
or mailed by United States certified mail, return receipt requested, postage prepaid, addressed as
follows:

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	 	If to the Executive:
	 	 	 	Raymond H. McDowell
	 

	 	 	 	 	 	                                        
	 

	 	 	 	 	 	                                        
	 
	 	 	 	 	 	 
	 

	 	If to the Company:
	 	 	 	Penn-America Insurance Company
	 

	 	 	 	 	 	Three Bala Plaza East, Suite 300
	 

	 	 	 	 	 	Bala Cynwyd, PA 19004
	 

	 	 	 	 	 	Attn: General Counsel
	 
	 	 	 	 	 	 
	 

	 	With copy to:
	 	 	 	Fox Paine & Company, LLC
	 

	 	 	 	 	 	950 Tower Lane, Suite 1150
	 

	 	 	 	 	 	Foster City, CA 94404
	 

	 	 	 	 	 	Attn: Saul A. Fox

or to such other address as any party may have furnished to the others in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.

     11. SUCCESSORS. This Agreement shall be binding upon the Executive, his heirs, executors or
administrator, and the Company, and any successor to or assigns of the Company. This Agreement is
not assignable by Executive. This Agreement is assignable by the Company to any Affiliate or to a
successor to or purchaser of the Company’s business.

     12. ENFORCEMENT OF SEPARATE PROVISIONS. Should provisions of this Agreement be ruled
unenforceable for any reasons, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect.

     13. AMENDMENT. This Agreement may be amended or canceled only by mutual agreement of the
parties in writing without consent of any other person and, so long as the Executive lives, no
person other than the parties hereto, shall have any rights under or interest in this Agreement or
the subject matter hereof.

     14. ARBITRATION. In the event that any disagreement or dispute whatsoever shall arise between
the parities concerning this Agreement, such disagreement or dispute shall be submitted to the
Judicial Arbitration and Mediation Services, Inc (“JAMS”) for resolution in a confidential private
arbitration in accordance with the comprehensive rules and procedures of JAMS, including the
internal appeal process provided for in Rule 34 of the JAMS rules with respect to any initial
judgment rendered in an arbitration. Any such arbitration proceeding shall take place in
Philadelphia, Pennsylvania before a single arbitrator (rather than a panel of arbitrators). The
parties agree that the arbitrator shall have no authority to award any punitive or exemplary
damages and waive, to the full extent permitted by law, any right to recover such damages in such
arbitration. Each party shall each bear their respective costs (including attorneys’ fees, and
there shall be no award of attorney’s fees) and shall split the fee of the arbitrator. Judgment
upon the final award rendered by such arbitrator, after giving effect to the JAMS internal appeal
process, may be entered in any court having jurisdiction thereof. If JAMS is not in business or is
no longer providing arbitration services, then the American Arbitration Association shall be
substituted for JAMS for the purposes of the foregoing provisions. Each party agrees that it shall
maintain absolute confidentiality in respect to any dispute between them.

10

 

     15. COMPLIANCE WITH SECTION 409A AND SECTION 162(m). All bonus and severance payments
hereunder are intended to comply with Sections 162(m) and 409A of the Internal Revenue Code of
1986, as amended (the “Code”), and to the extent applicable shall be governed by the Company’s
incentive award plans and paid in a manner and at such time so as to result in tax deductibility to
the Company and otherwise comply with the provisions of Section 409A.

     16. LAW GOVERNING. This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania.

     17. ENTIRE AGREEMENT. This Agreement supersedes any and all prior agreements, either oral or
in writing, between the parties with respect to the employment of the Executive by the Company and
this Agreement contains all the covenants and agreements between the parties with respect to the
Executive’s employment.

     18. ACKNOWLEDGEMENT. Executive acknowledges that he has carefully read and fully understands
this Agreement and that the Company has provided him sufficient time to discuss such Agreement with
an attorney.

(Remainder of page intentionally left blank)

11

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 	 	 
	ATTEST:

	 	 	 	Penn-America Insurance Company	 	 
	 
	 	 	 	 	 	 
	/s/ Richard S. March
 

	 	 	 	By: /s/ Larry A. Frakes
 

	 	 
	 
	 	 	 	 	 	 
	WITNESS:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Deborah McDowell
 

	 	 	 	/s/ Raymond H. McDowell
 

Raymond H. McDowell
	 	 

12

 

RESTRICTED SHARE AGREEMENT

     THIS AGREEMENT, made as of the ___day of ___, 200___(the “Grant Date”), by and between
United America Indemnity, Ltd., a Cayman Islands exempted company with limited liability whose
office is located c/o Walkers SPV Limited, Walker House, 87 Mary Street, P.O. Box 908GT, George
Town, Grand Cayman, Cayman Islands (the “Company”), and Raymond H. McDowell (the “Participant”),
with an address of 7 Splitrail Lane, Medford, New Jersey.

     1. Grant of Shares. Subject to the restrictions, terms and conditions of the United
America Indemnity, Ltd. Share Incentive Plan (the “Plan”), this Agreement and the Employment
Agreement of August 9, 2007, by and between Penn-America Insurance Company and the Participant (the
“Employment Agreement”), the Company hereby awards to the Participant 15,000 shares of the
Company’s validly issued Class A Stock, par value $.0001 per share (“Common Shares” or the “Plan
Shares”). To the extent required by law, the Participant shall pay the Company the par value
($.0001) for each Share awarded to the Participant simultaneously with the execution of this
Agreement. Pursuant to Section 2 hereof, the Plan Shares are subject to certain restrictions,
which restrictions relate to the passage of time as an employee of the Company and/or its
Affiliates. While such restrictions are in effect (such period, the “Restricted Period”), the Plan
Shares subject to such restrictions shall be referred to herein as “Restricted Shares.”

     2. Restrictions on Transfer. The Participant shall not sell, transfer, pledge,
hypothecate, assign or otherwise dispose of the Plan Shares, except as set forth in the Plan, this
Agreement or the Employment Agreement. Any attempted sale, transfer, pledge, hypothecation,
assignment or other disposition of the Plan Shares in violation of the Plan or this Agreement shall
be void and of no effect and the Company shall have the right to disregard the same on its books
and records and to issue “stop transfer” instructions to its transfer agent.

     3. Restricted Shares.

          3.1 Retention of Certificates. Promptly after the date of this Agreement, the Company
shall issue share certificates representing the Restricted Shares unless it elects to recognize
such ownership through book entry by the transfer agent. The share certificates shall be
registered in the Participant’s name and shall bear any legend required under the Plan. Such share
certificates shall be held in custody by the Company (or its designated agent) until the
restrictions thereon shall have lapsed. Upon the Company’s request, the Participant shall deliver
to the Company a duly signed share power, endorsed in blank, relating to the Restricted Shares. In
the event the Participant receives a share dividend on the Restricted Shares or the Plan Shares of
Restricted Shares are split or the Participant receives any other shares, securities, moneys or
property representing a dividend on the Restricted Shares (other than regular cash dividends on and
after the date of this Agreement) or representing a distribution or return of capital upon or in
respect of the Restricted Shares or any part thereof, or resulting from a split-up,
reclassification or other like changes of the Restricted Shares, or otherwise received in exchange
therefor, and any warrants, rights or options issued to the Participant in respect of the
Restricted Shares (collectively “RS Property”), the Participant will also immediately deposit with
and deliver to the Company any of such RS Property, including any certificates representing shares
duly endorsed in blank or accompanied by share powers duly executed in blank, and such RS Property
shall be subject to the

13

 

same restrictions, including that of this Section 3.1, as the Restricted Shares with regard to
which they are issued and shall herein be encompassed within the term “Restricted Shares.”

          3.2 Rights with Regard to Restricted Shares. The Participant will have the right to
vote the Restricted Shares, to receive and retain all regular cash dividends payable to holders of
Plan Shares of record on and after the transfer of the Restricted Shares (although such dividends
shall be treated, to the extent required by applicable law, as additional compensation for tax
purposes if paid on Restricted Shares), and to exercise all other rights, powers and privileges of
a holder of Common Shares with respect to the Restricted Shares set forth in the Plan, with the
exceptions that: (i) the Participant will not be entitled to delivery of the share certificate or
certificates representing the Restricted Shares until the Restricted Period shall have expired;
(ii) the Company (or its designated agent) will retain custody of the share certificate or
certificates representing the Restricted Shares and the other RS Property during the Restricted
Period; (iii) no RS Property shall bear interest or be segregated in separate accounts during the
Restricted Period; and (iv) the Participant may not sell, assign, transfer, pledge, exchange,
encumber or dispose of the Restricted Shares during the Restricted Period, except as set forth in
the Plan, this Agreement or the Employment Agreement.

          3.3 Vesting. The Restricted Shares shall become vested and cease to be Restricted
Shares in installments as follows, provided that the Participant is continuously employed by the
Company or any of its Affiliates from the Grant Date until the applicable Vesting Date (as
specified below), unless provided otherwise in the Employment Agreement:

	 	 	 	 	 
	Percent of Total	 	 	 	 
	Grant Vested	 	Shares Vested	 	Vesting Date
	33 1/3%
	 	5,000
	 	September 4, 2008
	 	 	 	 	 
	33 1/3%
	 	5,000
	 	September 4, 2009
	 	 	 	 	 
	33 1/3 %
	 	5,000
	 	September 4, 2010

Notwithstanding the foregoing, upon consummation of a Change of Control (as defined in the
Employment Agreement), if the Participant is then employed by the Company or any of its Affiliates
in good standing and has not given notice of resignation, all unvested Restricted Shares shall
vest.

          3.4 Forfeiture. The Participant shall forfeit to the Company, without compensation,
other than repayment of the par value paid for such Plan Shares, any and all unvested Restricted
Shares (but no vested portion of the Plan Shares) and RS Property upon the Participant’s
Termination with the Company and its Affiliates for any reason.

          3.5 Section 83(b). If the Participant properly elects (as required by Section 83(b)
of the Internal Revenue Code of 1986, as amended (the “Code”) within thirty (30) days after the
issuance of the Restricted Shares to include in gross income for federal income tax purposes in the
year of issuance the fair market value of such Plan Shares of Restricted Shares, the

14

 

Participant shall pay to the Company or make arrangements satisfactory to the Company to pay
to the Company upon such election, any federal, state or local taxes required to be withheld with
respect to the Restricted Shares. If the Participant shall fail to make such payment, or otherwise
make arrangements satisfactory to the Company to pay to the Company, upon election, any federal
state or local taxes required to be withheld, the Company shall, to the extent permitted by law,
have the right to deduct from any payment of any kind otherwise due to the Participant any federal,
state or local taxes of any kind required by law to be withheld with respect to the Restricted
Shares. The Participant acknowledges that it is his or her sole responsibility, and not the
Company’s, to file timely and properly the election under Section 83(b) of the Code and any
corresponding provisions of state tax laws if he or she elects to utilize such election.

          3.6 Delivery Delay. The delivery of any certificate representing the Restricted
Shares or other RS Property may be postponed by the Company for such period as may be required for
it to comply with any applicable federal or state securities law, or any national securities
exchange listing requirements and the Company is not obligated to issue or deliver any securities
if, in the opinion of counsel for the Company, the issuance of such Plan Shares shall constitute a
violation by the Participant or the Company of any provisions of any law or of any regulations of
any governmental authority or any national securities exchange.

          3.7 Withholding. Participant acknowledges that the Restricted Shares is subject to
applicable withholding as described in Section 10(e) of the Plan.

     4. Not an Employment Agreement. The issuance of the Plan Shares hereunder does not
constitute an agreement by the Company to continue to employ the Participant during the entire, or
any portion of the, term of this Agreement, including but not limited to any period during which
the Restricted Shares is outstanding.

     5. Power of Attorney. The Company, its successors and assigns, is hereby appointed
the attorney-in-fact, with full power of substitution, of the Participant for the purpose of
carrying out the Company’s rights and obligations with respect to the Restricted Shares and RS
Property under the provisions of this Agreement and taking any action and executing any instruments
which such attorney-in-fact may deem necessary or advisable to accomplish the purposes thereof,
which appointment as attorney-in-fact is irrevocable and coupled with an interest. The Company, as
attorney-in-fact for the Participant, may in the name and stead of the Participant, make and
execute all conveyances, assignments and transfers of the Restricted Shares and RS Property
provided for herein, and the Participant hereby ratifies and confirms all that the Company, as said
attorney-in-fact, shall do by virtue hereof. Nevertheless, the Participant shall, if so requested
by the Company, execute and deliver to the Company all such instruments as may, in the judgment of
the Company, be advisable for the purpose.

     6. Miscellaneous.

          6.1 This Agreement shall inure to the benefit of and be binding upon the parties hereto and
their respective heirs, legal representatives, successors and assigns.

          6.2 Notwithstanding those powers granted the Company pursuant to Section 5 hereof, no
modification or waiver of any of the provisions of this Agreement shall be effective unless agreed
upon, reflected in writing and signed by the parties to this Agreement.

15

 

          6.3 This Agreement may be executed in one or more counterparts, all of which taken together
shall constitute one contract.

          6.4 The failure of any party hereto at any time to require performance by another party of any
provision of this Agreement shall not affect the right of such party to require performance of that
provision, and any waiver by any party of any breach of any provision of this Agreement shall not
be construed as a waiver of any continuing or succeeding breach of such provision, a waiver of the
provision itself, or a waiver of any right under this Agreement.

          6.5 The headings of the sections of this Agreement have been inserted for convenience of
reference only and shall in no way restrict or modify any of the terms or provisions hereof.

          6.6 All notices, consents, requests, approvals, instructions and other communications provided
for herein shall be in writing and validly given or made when delivered, or on the second
succeeding business day after being mailed by registered or certified mail, whichever is earlier,
to the persons entitled or required to receive the same, at the addresses set forth at the heading
of this Agreement or to such other address as either party may designate by like notice. Notices
to the Company shall be addressed to the General Counsel of the Company.

          6.7 This Agreement and the award hereunder are subject to all the restrictions, terms and
provisions of the Plan which are incorporated herein by reference. In the event of an
inconsistency between any provision of the Plan and this Agreement, the terms of the Plan shall
control. The capitalized terms in this Agreement that are not otherwise defined shall have the
same meaning as set forth in the Plan. The Participant and the Company each acknowledges that this
Agreement (together with the Plan and the other agreements referred to herein and therein)
constitutes the entire agreement and supersedes all other agreements and understandings, both
written and oral, among the parties or either of them, with respect to the subject matter hereof;
provided, however, that the Employment Agreement shall control in the event of any conflict between
the Employment Agreement and this Agreement.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 	 	 	 	 	 	 
	UNITED AMERICA INDEMNITY, LTD.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	Title:

	 	 

	 	 	 	 	 	 

Raymond H. McDowell
	 	 

16

 

TIME VESTING SHARE OPTION AGREEMENT

     TIME VESTING SHARE OPTION AGREEMENT (“Agreement”) dated as of the___day of___, 200___(the “Grant
Date”), by and between United America Indemnity, Ltd., a Cayman Islands exempted company with
limited liability whose office is located c/o Walkers SPV Limited, Walker House, 87 Mary Street,
P.O. Box 908GT, George Town, Grand Cayman, Cayman Islands (the “Company”), and Raymond H. McDowell
(the “Participant”).

     WHEREAS, pursuant to the United America Indemnity, Ltd. Share Incentive Plan (the “Plan”), the
Committee (as defined in the Plan) has decided to award share options on the terms and conditions
set forth in this Agreement.

     WHEREAS, these Options are granted to the Participant in accordance with the Employment
Agreement of August 9, 2007, by and between Penn-America Insurance Company and the Participant (the
“Employment Agreement”).

     NOW, THEREFORE, in order to implement the foregoing and in consideration of the mutual
representations, warranties, covenants and agreements contained herein, the parties hereto agree as
follows:

1. Definitions.

     As used in this Agreement, the following terms shall have the meanings ascribed to them below.
Any capitalized term used in this Agreement and not defined herein shall have the meaning ascribed
to it in the Plan.

     “Acquisition” shall have the meaning set forth in Section 6.3.

     “Change of Control” shall have the meaning set forth in the Employment Agreement.

     “Class A Common Shares” shall mean the Class A Common Shares, par value $0.0001 per
share, of the Company, subject to adjustment pursuant to the third paragraph of Section 3 of the
Plan under certain circumstances.

     “Exercise Price” shall have the meaning set forth in Section 2.2, subject to
adjustment pursuant to the third paragraph of Section 3 of the Plan.

     “Grant Date” shall have the meaning set forth in Section 2.1.

     “Options” shall have the meaning set forth in Section 2.1.

     In addition, certain other terms used herein have definitions otherwise ascribed to them
herein.

17

 

     2. Grant and Terms of Options.

     2.1 Grant of Options. The Company hereby grants to the Participant as of the Grant
Date 20,000 Nonqualified Stock Options (the “Options” or “Time Vesting Options”) to purchase one
Class A Common Share per Option on the terms and conditions set forth below, and in reliance upon
the representations and covenants of the Participant set forth below. Unless sooner exercised or
cancelled as provided for in the Plan or this Agreement, the Options shall expire on the tenth
anniversary of the date of this Agreement.

     2.2 Exercise Price. The Exercise Price of the Options is $  per Class A Common
Share subject thereto.

     2.3 Vesting and Exercisability.

          (a) Subject to the terms and conditions herein, the Options shall vest and become
exercisable according to the following schedule:

	 	 	 	 	 
	Percent of Total	 	 	 	 
	Time Vesting	 	 	 	 
	Option Grant	 	Time Vesting	 	 
	Vested	 	Options Vested	 	Vesting Date
	25%
	 	5,000
	 	First Anniversary of Grant Date
	 	 	 	 	 
	25%
	 	5,000
	 	Second Anniversary of Grant Date
	 	 	 	 	 
	25%
	 	5,000
	 	Third Anniversary of Grant Date
	 	 	 	 	 
	25%
	 	5,000
	 	Fourth Anniversary of Grant Date

     Options that are exercisable may be exercised by the Participant only in accordance
with the terms of the Plan, this Agreement and the Employment Agreement, subject to the
termination, expiration, cancellation, lapsing and other provisions contained in each such
document.

          (b) Notwithstanding anything to the contrary in Section 2.3(a) if the Participant is
employed by the Company or any of its Affiliates and in good standing at the time of a
Change in Control, the Options (or a portion thereof) shall accelerate so as to vest and
become exercisable in accordance with the terms of the Employment Agreement, if so provided
under the Employment Agreement.

3. Expiration and Cancellation.

          3.1 Termination of Employment. Upon termination of Employment for any reason
(including Cause) (but other than as provided for herein), vesting ceases, the term of unvested
Options lapses and such unvested Options will expire immediately. If the Participant’s Employment
terminates for Cause, vested Options will also expire immediately. If the

18

 

Participant’s Employment terminates for any reason other than for Cause (including as a result of
the Participant’s resignation), the Options shall expire on the earlier of the following occasions:

               (i) the expiration date determined pursuant to Section 2.1; or

               (ii) the date 90 days after the termination of the Participant’s Employment.

          The Participant may exercise all or part of the Options at any time before its expiration
under this Section 3.1, but only to the extent that the Options have vested and become exercisable
before the Participant’s employment terminated. In the event that the Participant dies after
termination of Employment, but before the expiration of the Options, all of the Options may be
exercised (prior to expiration) by the executors or administrators of the Participant’s estate by
any person who has acquired the Options directly from the Participant by beneficiary designation,
bequest or inheritance, but only to the extent that the Options have vested and become exercisable
before the Participant’s Employment terminated.

          3.2 Cancellation. In the event the Participant (i) violates any covenant provided in
the Employment Agreement or (ii) is terminated for Cause (as defined subclauses (ii) and (vii) of
the “Cause” clause of the Employment Agreement) (a “Forfeiture Event”), all Options will be
cancelled, Class A Common Shares acquired upon the previous exercise of any Options (“Option
Shares”) will be subject to repurchase by the Company at the lower of the Exercise Price or fair
market value, and the Company shall be entitled to repayment by the Participant of any Award Gain
(as defined below) realized as a result of any exercise of any Options or any sale of Option
Shares. If the Participant resigns from employment with the Company or any of its Affiliates, and
if the Company or one of its Affiliates later determines that, while still employed, he had
committed acts that justified termination for Cause (as defined sub-clauses (ii) and (vii) of the
“Cause” clause of the Employment Agreement), then these cancellation and repurchase rights shall
apply.

          (a) Company Repurchase of Shares. Payment with respect to any repurchase of
Option Shares by the Company from the Participant shall take the form of a three-year note
from the Company or its designee, accruing interest at the lowest then applicable rate
mandated by U.S. law, with the principal and interest due on the third anniversary of the
date of purchase (or such later date as may be necessary to permit the Company or its
designee to comply with any applicable borrowing covenants affecting its payment
obligations), and shall be reduced to reflect any outstanding liabilities of the Participant
to the Company or its Affiliates. The Participant promptly shall take all appropriate and
necessary action to facilitate the Company’s purchase of such equity, including the prompt
delivery to the Company (or its designee) of all share certificates or other documents that
the Company may request.

19

 

     (b) Recovery of Award Gain.

     1. The term “Award Gain” shall mean (I) in respect of a given options exercise,
the product of (X) the Fair Market Value per Option Share at the date of such
exercise (without regard to any subsequent change in the market price of such Option
Share) minus the Exercise Price times (Y) the number of Option Shares as to which
the Options were exercised at that date, and (II) in respect of any sale of Option
Shares, the value of any cash or the fair market value of the Option Shares or
property paid or payable to the Participant less any cash or the fair market value
of any Option Shares or property (other than Option Shares or Options which would
have been forfeitable hereunder and excluding any payment of tax withholding) paid
by the Participant to the Company (or its designee) as a condition or in connection
with the acquisition of such Option Shares or amount otherwise included in subclause
(I) above.

     2. The Participant will be obligated to repay to the Company (or its designee),
in cash, within ten (10) business days after demand is made therefore, by the
Company (or its designee), the total amount of Award Gain realized by the
Participant (I) upon each exercise of the Options that occurred on or after (A) the
date that is six (6) months prior to the Forfeiture Event, if the Forfeiture Event
occurred while the Participant was employed by the Company or a subsidiary or
affiliate, or (B) the date that is six (6) months prior to the date that the
Participant’s employment by the Company or a subsidiary or affiliate terminated, if
the Forfeiture Event occurred after the Participant ceased to be so employed, or
(II) upon any sale, transfer or other disposition of the Option Shares.

     (c) Should the Company and/or its Affiliates be required to seek judicial
relief to compel the Participant to comply with the provisions of Section 3.2, the
Company and/or its Affiliates shall be entitled to recover their attorneys’ fees and
costs incurred in doing so from the Participant.

4. Transferability of Plan Shares and Options. 

     The Participant shall not be permitted to sell, assign, transfer, pledge or otherwise encumber
any Options, except as hereinafter provided in Section 6.1 and in accordance with the Articles of
Association of the Company.

5. Participant’s Representations, Warranties and Agreements.

     In connection with the exercise of any Options, the Participant shall make to the Company, in
writing, such representations, warranties and agreements in connection with such exercise and
investment in Class A Common Shares as the Committee shall reasonably request.

20

 

6. Successors.

          6.1 This Agreement is personal to the Participant and, without the prior written consent of
the Company, shall not be transferable by the Participant otherwise than (i) by will or the laws of
descent and distribution, (ii) pursuant to a qualified domestic relations order (as defined in the
Code) or (iii) pursuant to a gift to the Participant’s spouse, children, grandchildren or other
living descendants, whether directly or indirectly or by means of a trust, partnership, limited
liability company or otherwise. This Agreement shall inure to the benefit of and be enforceable by
the Participant’s legal representatives.

          6.2 This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.

          6.3 The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation, scheme of arrangement or otherwise (an “Acquisition”)) to all or substantially all
of the business and/or assets of the Company expressly to assume and to agree to perform this
Agreement in the same manner and to the same extent that the Company would have been required to
perform it if no such succession had taken place (or by substituting for such Options new options,
based upon the shares of such successor, having an aggregate spread between the Fair Market Value
of the underlying shares and the Exercise Price thereof, and the same term, immediately after such
substitution, equal to the spread on, and the term of, such Options immediately before such
substitution but in any case subject to the same terms and conditions, including those applicable
to vesting and exercise, as may otherwise be applicable to the Options granted by the Company), and
the Participant hereby agrees to such assumption (or substitution); provided, however, that the
Company or such successor may, at its option, at the time of or promptly after such Acquisition,
terminate all of its obligations hereunder with respect to the Options by paying to the Participant
or the Participant’s successors or assigns an amount equal to the product of (i) the number of
Options and (ii) the Fair Market Value per share of the shares underlying such Options at the time
of such Acquisition less the amount of such Options’ Exercise Price (but not in excess of such Fair
Market Value per share), in either case, in exchange for the Participant’s Options. As used in
this Agreement, the “Company” shall mean both the Company as defined above and any such successor
that assumes and agrees to perform this Agreement, by operation of law or otherwise.

7. Miscellaneous.

          7.1 This Agreement shall be governed by and construed and enforced in accordance with the laws
of the State of Delaware, without regard to the principles of conflicts of law thereof. The
captions of this Agreement are not part of the provisions hereof and shall have no force or effect.
This Agreement may not be amended or modified except by a written agreement executed by the
parties hereto or their respective successors and legal representatives.

          7.2 Plan Shares may bear legends to the extent the Committee or the Board determines it to be
necessary or appropriate.

          7.3 All notices and other communications under this Agreement shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed if to the Participant, at the address set forth on

21

 

the signature page hereto, and if to the Company: United America Indemnity, Ltd., c/o Walkers
SPV Limited, Walker House, 87 Mary Street, P.O. Box 908GT, George Town, Grand Cayman, Cayman
Islands, Attention: General Counsel, or to such other addresses as either party furnishes to the
other in writing in accordance with this Section 7.3. Notices and communications shall be
effective when actually received by the addressee.

          7.4 The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.

          7.5 No later than the date as of which an amount first becomes includible in the gross income
of the Participant for federal, state, foreign or other income tax purposes with respect to any
Options, the Participant shall pay to the Company, or if appropriate, any of its Affiliates, or
make arrangements satisfactory to the Committee regarding the payment of, any federal, state,
local, foreign or other taxes of any kind required by law to be withheld with respect to such
amount. If approved by the Committee, withholding obligations may be settled with Class A Common
Shares, including Class A Common Shares that are part of the award that gives rise to the
withholding requirement. The obligations of the Company under the Plan shall be conditional on
such payment or arrangements, and the Company and its Affiliates shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment otherwise due to the Participant.
The Committee may establish such procedures as it deems appropriate, including making irrevocable
elections, for the settlement of withholding obligations with Class A Common Shares.

          7.6 The Participant’s or the Company’s failure to insist upon strict compliance with any
provision of, or to assert any right under, this Agreement shall not be deemed to be a waiver of
such provision or right or of any other provision of or right under this Agreement.

          7.7 The Options are granted pursuant to the Plan which is incorporated herein by reference and
the Options shall, except as otherwise expressly provided herein, be governed by the terms thereof.
The Participant hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all
the terms and provisions thereof. The Participant and the Company each acknowledges that this
Agreement (together with the Plan and the other agreements referred to herein and therein)
constitutes the entire agreement and supersedes all other agreements and understandings, both
written and oral, among the parties or either of them, with respect to the subject matter hereof;
provided, however, that the Employment Agreement shall control in the event of any conflict between
the Employment Agreement and this Agreement.

[Remainder of page intentionally left blank.]

22

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 	 	 	 	 	 	 
	UNITED AMERICA INDEMNITY, LTD.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	Title:

	 	 

	 	 	 	 	 	 

Raymond H. McDowell
	 	 
	 

	 	 	 	 	 	 	 	7 Splitrail Lane	 	 
	 

	 	 	 	 	 	 	 	Medford, NJ 08055	 	 

23

 

CHANGE IN CONTROL

For purposes of this Agreement:

          (a) “Change of Control” shall mean (i) the acquisition of all or substantially all of the
assets of UAI, Ltd. by an Unaffiliated Person, (ii) a merger, consolidation, statutory share
exchange or similar form of corporate transaction involving UAI, Ltd. after which the resulting
entity is controlled by an Unaffiliated Person, or (iii) the acquisition by an Unaffiliated Person
of sufficient voting shares of UAI, Ltd. to cause the election of a majority of UAI, Ltd.’s
Directors.

          (b) “Unaffiliated Person shall mean a “person” (as such term is defined in Section 3(a)(9) of
the Securities Exchange Act of 1934 and as such term is used in Section 13(d)(3) and 14(d)(2) of
such Act) or a group of “persons” which is not an Affiliate of Fox Paine & Company, LLC (“Fox
Paine”), the members thereof, or Fox Paine Capital Fund II, L.P.

24exh1019.htm

    
      
        
          

          

        

        
        

      

      
         

        
          

        

      

      
        
        

      

    

    

    Exhibit
      10.19

    

    

    JOINT
      OPERATING AGREEMENT

    

    

    

    BETWEEN

    

    

    

    GUJARAT
      STATE  PETROLEUM CORPORATION LIMITED

    

    

    

    AND

    

    

    

    JUBILANT
      ENPRO LIMITED

    

    

    

    AND

    

    

    GEOGLOBAL
      RESOURCES (INDIA) INC.

     

     

    
 

    WITH
      RESPECT TO THE CONTRACT AREA

    

    

    BLOCK
      : KG-OSN-2001/3

    

    

    
      
        
        

        
          

          

        

      

      
        Page
          2

        
        

      

      
        
        

      

    

    

    
      	 	 	 	
              Page

            
	
              Article
                1

            	 	
              Definitions
                and Interpretation

            	
              5

            
	
              Article
                2

            	 	
              Effective
                Date, Duration and Scope

            	
              8

            
	
              Article
                3

            	 	
              Participating
                Interests and Joint Operations

            	
              9

            
	
              Article
                4

            	 	
              Operator

            	
              10

            
	
              Article
                5

            	 	
              Operating
                Committee

            	
              19

            
	
              Article
                6

            	 	
              Work
                Programmes and Budgets

            	
              22

            
	
              Article
                7

            	 	
              Costs,
                Expenses and Default

            	
              25

            
	
              Article
                8

            	 	
              Ownership
                of Assets

               

            	
              30

            
	
              Article
                9

            	 	
              Information,
                Reports and Confidentiality

               

            	
              31

            
	
              Article
                10

            	 	
              Work
                Programme Commitment

            	
              35

            
	
              Article
                11

            	 	
              Relinquishment

            	
              36

            
	
              Article
                12

            	 	
              Withdrawal

               

            	
              37

            
	
              Article
                13

            	 	
              Sale,
                Transfer and Assignment

            	
              39

            
	
              Article
                14

            	 	
              Force
                Majeure

            	
              44

            
	
              Article
                15

            	 	
              Operations
                by less than all Parties

               

            	
              46

            
	
              Article
                16

            	 	
              Insurance
                and Indemnification

               

            	
              55

            
	
              Article
                17

            	 	
              Disposition
                of Production

               

            	
              57

            
	
              Article
                18

            	 	
              Notices

               

            	
              58

            
	
              Article
                19

            	 	
              Sole
                Expert, Conciliation and Arbitration

               

            	
              59

            
	
              Article
                20

            	 	
              Applicable
                Law

               

            	
              61

            
	
              Article
                21

            	 	
              Relationship
                of Parties, Mutual Indemnities and No Partition

            	
              62

            
	
              Article
                22

            	 	
              General

               

            	
              63

            

    

    
      
        
        

      

      
        Page
          3

        
          

        

      

      
        
        

      

    

    

    
      	 	 	 	 
	
              Exhibit
                "A" Accounting Procedure

            	 
	
              Article
                I

            	 	
              General
                Provisions

            	
              66

            
	
              Article
                II

            	 	
              Basis
                of Charges to the Joint Account

            	
              72

            
	
              Article
                III

            	 	
              Disposal
                of Materials

            	
              73

            
	
              Article
                IV

            	 	
              Inventories

            	
              74

            
	
              Article
                V

            	 	
              Forms
                in which Accounts shall be Maintained

            	
              75

            
	 	 	 	 
	
              Exhibit
                "B" Carried Interest Agreement

            	
              76

            

    

    
      
        
        

      

      
        Page
          4

        
          

        

      

      
        
        

      

    

    JOINT
      OPERATING AGREEMENT

    

    

    THIS
      AGREEMENT is made this 7th day of August 2003 by and between:

    

    
      	
               

            	
              GUJARAT
                STATE PETROLEUM CORPORATION LIMITED, a body corporate established
                under the Companies Act 1956, having its registered office
                at  Block 15, 2nd
                Floor, Udyog
                Bhavan, Sector-11, Gandhinagar – 382 011, INDIA (hereinafter referred to
                as "GSPC" and unless the context otherwise require shall
                include its successors and permitted assignees), of the FIRST
                PART,

            

    

    

    AND

    

    
      	
              2.

            	
              JUBILANT
                ENPRO LIMITED, a body corporate established under the Companies
                Act 1956, having its registered office at 1A, Sector-16A, Institutional
                Area, Noida - 201 301, Uttar Pradesh (hereinafter referred to as
                “JEL” and unless the context otherwise require shall
                include its successors and permitted assignees), of the SECOND
                PART.

            

    

    

    AND

    

    
      	
              3.

            	
              GEOGLOBAL
                RESOURCES (INDIA) INC., a body corporate established under the
                laws of Canada having its registered office at 35-22 Street NW, Calgary,
                Alberta, T2N 4W7, Canada  (hereinafter referred to as
                “GGR” and unless the context otherwise require shall
                include its successors and permitted assignees), of the THIRD
                PART.

            

    

    

    All
      of
      which are collectively referred herein as Parties, which expression shall
      include their successors and such assignees as are permitted under Article
      13
      hereof.

    

    WITNESSETH

    

    WHEREAS,
      the Parties have financial and technical capabilities to explore, develop,
      produce, transport, refine and market the petroleum products and Parties have
      entered into the Production Sharing Contract (hereinafter referred to as
      "Contract") with respect to Contract Area identified as Block
      KG-OSN-2001/3 on 4th
      February, 2003
      with the President of India acting through the Joint Secretary, Ministry of
      Petroleum & Natural Gas (hereinafter referred to as "Government");
      and

    

    WHEREAS,
      the Parties wish to define their respective rights and obligations under this
      Joint Operating Agreement (JOA) (hereinafter referred to as "Agreement") with
      the object to conduct & perform their mutual rights and obligations pursuant
      to the Contract in a manner which is consistent with the provisions of the
      Contract.

    

    NOW,
      THEREFORE, in consideration of the premises and mutual agreements hereinafter
      contained, the Parties agree as follows:

    
      
        
        

      

      
        Page
          5

        
          

        

      

      
        
        

      

    

    

    

    ARTICLE
      1 - DEFINITIONS AND INTERPRETATION

    

    

    Unless
      the context otherwise requires, for the purposes of this Agreement, each term
      listed below shall have the meaning stated therefore, whenever used in this
      Agreement. The words not specifically defined herein but defined in the Contract
      shall have the same meaning herein.

    

    
      	
              1.1

            	
              "Abandonment"
                means all or any action or conduct for the purpose of Site Restoration,
                abandoning Fields, Joint Operations, Joint Property, or any other
                operations and/or property relating thereto under this Agreement
                whether
                by way of discontinuation, demolition, removal, destruction, conversion,
                placement on temporary or permanent care and maintenance, or other
                basis,
                or any action or conduct, necessary to comply with all applicable
                laws,
                Governmental requirements, or Good International Petroleum Industry
                Practices (GIPIP).

            

    

    

    
      	 	
              "Accounting
                Procedure" means the Accounting Procedure attached hereto as
                Exhibit A

            

    

    

    
      	 	
              "Work
                Program" means the work program as given in the
                Contract.

            

    

    

    
      	 	
              "Advance"
                means each payment of cash required to be made pursuant to a cash
                call.

            

    

    

    
      	
              1.5

            	
              "Agreement"
                means this Joint Operating Agreement (JOA) including Exhibits, Schedules,
                Annexures and any amendments
                thereto.

            

    

    

    
      	
               

            	
              "Approved
                Budget" means a budget that has been approved by the Operating
                Committee with respect to the Approved Work
                Programme.

            

    

    

    
      	
               

            	
              "Approved
                Work Programme" means a Work Programme that has been approved by
                the Operating Committee.

            

    

    

    
      	
               

            	
              "AFE"
                means an authorization for expenditure as envisaged in Article 6.6
                hereof.

            

    

    

    
      	
               

            	
              "Budget"
                means a budget formulated in relation to a Work Programme. The term
                "Budget" shall mean, as the context requires, preliminary, proposed
                or
                finally adopted versions thereof, and any revisions or supplements
                thereto.

            

    

    

    
      	
               

            	
              "Business
                Day" means a day on which the banks in India are customarily
                open
                for business.

            

    

    

    
      	
               

            	
              "Cash
                Call" means any request for payment of cash made by the Operator,
                in accordance with an Approved Work Programme and Approved Budget
                to the
                Parties in connection with the Joint Operations (as per the format
                to be
                decided by the Operating
                Committee).

            

    

    

    
      	
              1.12

            	
              “Carried
                Interest Agreement” means the agreement executed between GSPC and GGR on
                27th
                August 2002, a copy of which is enclosed as Exhibit
                “B”

            

    

    

    

    
      
        
        

      

      
        Page
          6

        
          

        

      

      
        
        

      

    

    
      	
              1.13

            	
              "Confidential
                Information" means all legal, financial, commercial, technical
                and other data, knowledge and information (including any and all
                information) obtained and/or acquired by any Party(ies) relating
                to this
                Agreement including but not
                limited to geological, geophysical, seismic and other data, maps,
                models,
                diagrams and modeling exercises and all reports or other documents
                created
                from such data and information and exercises and analyses carried
                out
                using such data and information.

            

    

    

    1.14           "Effective
      Date" means the date as provided in the Contract.

    

    
      	
              1.15

            	
              "Gross
                Negligence" means any act or failure to act (whether sole, joint,
                or concurrent) by a Party which was intended to cause, or which was
                in
                reckless disregard of or wanton indifference to, harmful consequences
                such
                party knew, or should have known, such act or failure would have
                had on
                the safety or property of another person or entity, but shall not
                include
                any error of judgment or mistake made by such Party in the exercise
                in
                good faith or any function, authority or discretion conferred on
                the Party
                under this Agreement.

            

    

    

    
      	
              1.16

            	
              "Joint
                Account" means the set of accounts maintained by the Operator in
                accordance with the provisions of this Agreement to record all revenues,
                expenditure or other monetary transactions conducted
                on behalf of the Parties as provided
                herein.

            

    

    

    
      	
              1.17

            	
              "Joint
                Operations" means those operations and activities, including
                Petroleum Operations, to be carried out by the Operator pursuant
                to and in
                terms of this Agreement.

            

    

    

    
      	
              1.18

            	
              "Joint
                Property" means, at any point in time, the Contract Area, all
                wells, facilities, installations, equipment, materials, information,
                funds
                and the property held for the Joint Account for use in Petroleum
                Operations.

            

    

    

    
      	
              1.19

            	
              "Operator"
                means a Party designated or otherwise appointed under Article 4.2
                of this
                Agreement to conduct Joint Operations or any successor appointed
                under
                this Agreement.

            

    

    

    
      	
              1.20

            	
              "Non-Operator(s)"
                means at any time the Party or Parties to this Agreement other than
                the
                Operator.

            

    

    

    
      	
              1.21

            	
              "Party"
                or "Parties" means Parties to this Agreement and the
                respective successors and permitted assigns of
                each.

            

    

    

    
      	
              1.22

            	
              "Willful
                Misconduct" means an intentional and conscious or reckless
                disregard by the supervisory or management staff or any director
                of any
                Party, of the terms of this Agreement or of Good International Petroleum
                Industrial Practice but shall not include any act or omission reasonably
                required to meet emergency conditions, including without limitation
                the
                safeguarding of life, property and Joint Operations or, for the avoidance
                of doubt, any error of judgment or mistake made by any such person
                in the
                exercise, in good faith of any function, authority or discretion
                conferred
                upon the Party.

            

    

    

    

    
      
        
        

      

      
        Page
          7

        
          

        

      

      
        
        

      

    

    INTERPRETATION

    

    
      	
              1.23

            	
              Unless
                the context otherwise requires, reference to singular shall include
                a
                reference to the plural and vice-versa, and reference to any gender
                shall
                include a reference to all other
                genders.

            

    

    

    
      	
              1.24

            	
              Unless
                the context otherwise requires, reference to an Article or Clause
                shall be
                an Article or Clause of this
                Agreement.

            

    

    

    
      	
              1.25

            	
              In
                the event of any inconsistency between the main body of this Agreement
                and
                any Exhibits attached hereto, the provisions of the
                main body of the Agreement shall
                prevail.

            

    

    

    
      	
              1.26

            	
              Reference
                to any law or regulation having the force of law includes a reference
                to
                that law or regulation from time to time amended, extended or
                re-enacted.

            

    

    

    
      	
              1.27.

            	
              Terms
                used but not defined herein shall have the meaning attributed to
                them
                under the  Contract. In case of any conflict of any
                term/provisions of this Agreement with that of the Contract the provisions
                of the Contract shall prevail and be binding on the Parties to this
                Agreement.

            

    

    

    
      	
              1.28

            	
              Headings
                of the Articles are titles to each of the Articles to this Agreement
                and
                are solely for the convenience of the Parties hereto and shall not
                be used
                with respect to the interpretation of the said
                Articles.

            

    

    

    
      	
              1.29

            	
              Words
                and abbreviations which have well known technical or trade/commercial
                meanings are used in the Agreement in accordance with such
                meanings

            

    

    

     

    
      
        
        

      

      
        Page
          8

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      2 - EFFECTIVE DATE, DURATION AND SCOPE

    

    

    
      	
              2.
                1

            	
              This
                Agreement shall be effective from the Effective Date and shall continue
                in
                effect for the term of the License and any Lease granted including
                their
                extensions and thereafter until a final settlement of all accounts
                among
                the Parties has been made or terminated earlier in accordance with
                the
                terms of this Agreement or
                Contract.

            

    

    

    
      	
              2.2

            	
              The
                scope and purpose of the Joint Operations are limited to the prospecting,
                exploring and drilling for Petroleum; developing, operating, producing
                and
                abandoning the oil and gas fields in the Contract Area; treating,
                field
                processing and transporting of Petroleum produced to the delivery
                point
                and appropriate supporting activities for any of the
                foregoing.

            

    

    

    
      	
              2.3

            	
              Except
                otherwise provided herein, each Party shall share in all costs,
                obligations and benefits in proportion to its Participating Interest
                and
                shall include any interest being carried by any of the
                parties.

            

    

    

    

    

    
      
        
        

      

      
        Page
          9

        
          

        

      

      
        
        

      

    

    

     

    ARTICLE
      3 - PARTICIPATING INTEREST AND JOINT OPERATIONS

    

    

    
      	
              3.1

            	
              The
                Participating Interest of the Parties on the Effective Date shall
                be as
                follows:-

            

    

    

        GSPC                                :           80
      %

    

               
      JEL                          :           10
      %

    

        GGR                                :           10
      %

    

    
      	
              3.2

            	
              The
                Parties agree to undertake and to complete the Work Programme as
                described
                in the Contract.

            

    

    

    
      	
              3.3

            	
              GeoGlobal
                Resources ( India ) Inc.’s  10% participating interest is in
                accordance with Carried Interest Agreement (CIA) signed between GSPC
                and
                GeoGlobal Resource (India ) Inc. dated 27th
                August, 2002
                and Articles specifically  2 & 29 of the Production Sharing
                Contract dated 4th
                February,
                2003. CIA between GSPC and GGR shall be part of this agreement in
                order to
                determine the relationship and rights and obligations of GSPC and
                GGR
                towards each other in terms of GGR’s 10% participating interest vis-à-vis
                Carried Interest Agreement.

            

    

    

    
      	
              3.4

            	
              For
                greater certainty, for the purposes of this Agreement,
                the  Contract and the Carried Interest Agreement as referred in
                Article 3.3 above, GSPC and GGR acknowledge and agree that
                :

            

    

    

    
      	
              3.4.1

            	
              GSPC
                shall be solely liable and agree to pay on behalf of GGR, all of
                GGR’s
                obligations, costs and expenses of whatsoever nature and kind, arising
                out
                of or attributable to, this Agreement and the Contract, including
                without
                limitation, all of GGR’s Participating  Interest share of the
                Contract Cost and any applicable royalty payments to the
                Government.

            

    

    

    

    
      	
              3.4.2

            	
              GSPC
                shall be entitled to recover all of the cost and expenses after deducting
                all statutory  payments, out of the proceeds from sale of oil
                & gas if any from the Contract Area, and as mentioned in Article
                3.4.1, shall also be entitled to recover costs incurred towards GGR’s 10%
                of Participating  Interest Share including applicable royalty
                payment made to Government,  out of
                GGR’s  Participating Interests share of Cost
                Petroleum.

            

    

    

    
      	
              3.4.3

            	
              At
                such time  after GSPC has recovered GGR’s Participating Interest
                Share of all the cost and GGR’s Participating Interest share of the
                applicable royalty payment to the Government, as mentioned in Article
                3.4.1 above, GGR shall be entitled to its Participating Interest
                share of
                joint account, joint property, profit petroleum and proceeds of the
                sale
                thereof.

            

    

     

     

    
 

    
      
        
        

      

      
        Page
          10

        
          

        

      

      
        
        

      

    

    
      	
              3.5

            	
              Reference
                to the term “Participating Interest” and any rights and obligations in
                connection with a party’s Participating Interest under this Agreement
                shall take into account the terms and conditions of the Carried Interest
                Agreement between GSPC and GeoGlobal Resources (India) Inc. dated
                27th
                August 2002.

            

    

    

    

    
      
        
        

      

      
        Page
          11

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      4 - OPERATOR

    

    

    
      	
              4.1

            	
              All
                Joint Operations shall be conducted by the Operator in accordance
                with
                policies, Work Programmes and Budgets approved in accordance with
                the
                provisions of this Agreement, the directions of the Operating Committee
                and in accordance with Good International Petroleum Industry Practices
                (GIPIP).

            

    

    

    
      	
              4.2

            	
              GSPC
                is designated and shall act as the Operator, in accordance with the
                provisions of the Contract and this Agreement. The Parties shall
                provide
                the Operator with such powers of attorney or any other documents
                that it
                may need, from time to time, in order to carry out Joint Operations
                pursuant to this Agreement.

            

    

    

    
      	
              4.3

            	
              Subject
                to Article 4.5, the Operator shall have the right to resign by giving
                not
                less than one hundred and eighty (180) days prior written notice
                to the
                other Parties, or  such shorter period of notice as mutually
                agreed by the Parties.

            

    

    

    
      	
              4.4

            	
              Removal/Change
                of Operator

            

    

    

    
      	
              4.4.1

            	
              Subject
                to Article 4.5, Operator shall be removed forthwith and another Operator
                appointed upon receipt of notice of occurrence of any of the following
                events:

            

    

    

    
      	
              i)  

            	
              An
                order is made by a court or any effective resolution is passed for
                dissolution, liquidation, or winding up of
                Operator;

            

    

    

    
      	
              ii)  

            	
              Operator
                dissolves, liquidates or terminates its corporate
                existence;

            

    

    

    
      	
               

            	
              iii)

            	
              Operator
                becomes insolvent, bankrupt or makes an assignment for

            	
              the
                benefit of creditors;

            

    

    

    
      	
               

            	
              A
                receiver is appointed for a substantial part of Operator's assets;
                or

            

    

    

    
      	
               

            	
              v)

            	
              If
                Operator becomes the holder of Participating Interest of less than
                ten
                percent (10%).

            

    

    

    
      	
              4.4.2

            	
              If
                the Operator has committed a material breach of this Agreement, any
                Party
                may give written notice of such breach to the Operator, specifying
                the
                breach committed.  If it is determined pursuant to Article 19 of
                this Agreement that Operator has committed such material breach and
                further, failed to rectify such breach within sixty (60) days of
                receipt
                of notice from a Party, Operator may be removed by the unanimous
                vote of
                the Parties, other than the Operator and its
                Affiliates.

            

    

    

    
      
        
        

      

      
        Page
          12

        
          

        

      

      
        
        

      

    

    4.5           When
      a change of Operator occurs pursuant to Article 4.3 or Article 4.4:

    

    
      	
               

            	
              i)

            	
              The
                Operating Committee shall meet as soon as possible to appoint a successor
                Operator provided that only the Non-Operators shall have the right
                to vote
                to appoint the successor Operator. Such appointment shall be by the
                unanimous vote of those Parties entitled to
                vote.

            

    

    

    
      	
              ii)  

            	
              The
                Operating Committee shall arrange for the taking of an independent
                inventory of all Joint Property and an audit of the books and records
                of
                the removed Operator. Such inventory and audit shall be completed,
                if
                possible, no later than the effective date of the change of the Operator.
                The liabilities and expenses of such inventory and audit shall be
                charged
                to the Joint Account.

            

    

    

    
      	
              iii)  

            	
              The
                resignation or removal of Operator or replacement by the successor
                Operator shall not become effective prior to receipt of any approval
                of
                the Government, if same is
                required.

            

    

    

    
      	
              iv)  

            	
              Upon
                the effective date of the resignation, or removal or change of the
                Operator, the successor Operator shall succeed to all duties, rights
                and
                authority of Operator. The former Operator shall transfer to the
                successor
                Operator all Joint Property, books of accounts, records and other
                documents maintained by the outgoing Operator pertaining to the Contract
                Area and to Joint Operations. Upon delivery of the above described
                property and data, the former Operator shall be released and discharged
                from all obligations and  liabilities as
                Operator.

            

    

    

    
      	
              v)  

            	
              The
                outgoing Operator shall be liable for all obligations and liabilities
                as
                Operator incurred till the effective date of appointment of the successor
                Operator.

            

    

    

    

    

    POWERS
      AND DUTIES OF OPERATOR

    

    
      	
              4.6  

            	
              Subject
                to Article 4.1, Operator shall perform and carry out the functions
                and
                shall, for this purpose, have the following powers and authorities
                :

            

    

    

    
      	
               

            	
              4.6.01
                Exert its bonafide efforts to explore the Contract Area in accordance
                with
                Good International Petroleum Industry Practices (GIPIP) to discover
                commercial accumulations of
                Petroleum.

            

    

    

    
      	
              4.6.02  

            	
              Subject
                to the provisions of this Agreement and Contract, exercise control
                and
                exclusively manage and carry out the Joint
                Operations.

            

    

    

    
      	
              4.6.03  

            	
              Comply
                with the respective obligations imposed upon the Parties by the laws
                of
                India including the timely filing of reports and payment of all fees,
                levies, taxes, royalty, cess, if any, (except income taxes payable
                by the
                Parties), and charges of every nature payable by the Parties under
                the
                said laws provided that Parties have honoured Cash Calls and funds
                are
                available in Joint Account.

            

    

    

    
      	
              4.6.04  

            	
              Take
                all appropriate steps to obtain, maintain in force, renew or extend
                consents, approvals, and authorizations in accordance with the terms
                of
                this Agreement.

            

    

     

    
 

    
      
        
        

      

      
        Page
          13

        
          

        

      

      
        
        

      

    

    
      	
              4.6.05

            	
              Represent
                the Parties before the Government and any and all courts, administrative
                departments, bureaus and agencies whatsoever in India in matters
                related
                to the Joint Operations, and in so doing prepare and sign, file and
                receive any affidavits, undertakings, contracts, petitions, requests,
                certificates, authorizations, reports or other documents in connection
                therewith; advise the Parties in a timely fashion of any such acts
                which
                in the Operator's opinion may significantly affect the Parties; and
                perform all other acts of a similar nature necessary and proper in
                connection therewith, except to the extent any Party has indicated
                its
                desire to represent itself in connection with any of the foregoing.
                Non-Operators shall be entitled to attend for the purposes of observation,
                meetings between the Operator and the Government and any court appearance
                of the Operator where such meetings or appearances pertain to matters
                relating to this Agreement.

            

    

    

    
      	
               

            	
              4.6.06
                Establish and maintain such relationship with the Government, local
                authorities and with the public as shall be necessary or appropriate
                to
                assure that the Joint Operations are conducted and carried out to
                the best
                advantage of the Parties.

            

    

    

    
      	
               

            	
              4.6.07
                   Prepare and submit to the Operating Committee, Work Programmes
                and Budgets
                as provided in Article 6.

            

    

    

    
      	
               

            	
              4.6.08
                In accordance with the procedure outlined by Operating Committee,
                establish and maintain such offices, installations and facilities
                in India
                or abroad as are necessary, adequate and appropriate for the efficient
                performance of Joint Operations and service
                hereunder.

            

    

    

    
      	
               

            	
              4.6.09
                Establish and maintain such books, records and accounts as are required
                by
                this Agreement and Contract, if any, together with such additional
                books,
                records and accounts as from time to time may be reasonably specified
                by
                the Parties. Maintain such production records, well and reservoir
                data,
                field reserves and rate of production studies and estimates, and
                the like
                as will reflect a thorough and accurate history of Petroleum Operations,
                together with such additional similar records and data as from time
                to
                time may be specified by the Operating Committee or required under
                the
                Agreement.

            

    

    

    
      	
              4.6.10

            	
              Employ,
                administer, use and have sole responsibility for all the selection,
                employment, administration and compensation for all personnel reasonably
                required for the Joint Operations. Also obtain when appropriate,
                such
                occasional or part-time services of experts, consultant, retainers,
                loan
                employees and others as operational requirements may, in Operator's
                opinion, dictate, required while always keeping in mind the Parties
                desire
                to conduct Joint Operations in an efficient and cost effective
                manner.

            

    

     

    
 

    
      
        
        

      

      
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          14

        
          

        

      

      
        
        

      

    

    
      	
              4.6.11

            	
              Acquire
                on behalf of the Parties and utilize in the Joint Operations all
                equipment, materials and supplies necessary or desirable for carrying
                on
                the Joint Operations.

            

    

    

    
      	
               

            	
              4.6.
                12 Acquire such lands, leases, surfaces rights, easements and
                rights-of-way as may be necessary or desirable for the Joint Operations;
                provided, however, that Operator shall not acquire for the Joint
                Operations any lands, surface rights, easements or rights-of-way
                involving
                a total commitment in excess of the equivalent of One hundred thousand
                United Sates Dollars (U.S. $ 100,000) for each such acquisition without
                prior approval of Operating Committee; and provided, further, that
                Operator shall not acquire for the Joint Operations any lease for
                a longer
                period of time than ten (10) years at an annual rental in excess
                of the
                equivalent of fifty thousand United States Dollars (U.S. $50,000)
                without
                prior approval of the Operating
                Committee.

            

    

    

    
      	
              4.6.13  

            	
              Enter
                into contracts with others in its own name as principal or as agent
                for
                the Parties, as appropriate and in the interest of the Parties following
                the procedure, for the performance of services or supply of facilities,
                equipment, materials, or supplies by such others, provided that there
                is a
                reasonable basis to believe that such others shall be competent and
                capable technically and financially, to perform properly their obligations
                under such contracts, and that the selection of such contractors
                is to be
                made on the basis of the Procedure for Acquisition of Goods and Services
                contained in Appendix "F" of the
                Contract.

            

    

    

    
      	
              4.6.14

            	
              In
                case of emergency, Operator may award subcontracts without following
                the
                procedure set out in the Procedure  for Acquisition of Goods and
                Services contained in Appendix “F” of the Contract.  Operator
                shall, however, provide the following information to the other Parties
                at
                the earliest opportunity after the emergency  having been
                occurred – (i) the nature of the emergency and actions taken/proposed to
                be taken by Operator; and (ii) intimation of the transactions entered
                into/proposed to be entered into, together  with the estimated
                financial impact thereof and shall submit written detailed reasons
                for
                awarding such subcontracts along with the actual financial implications
                thereof.

            

    

    

    

    
      	
              4.6.15

            	
              Promptly
                pay and duly discharge all costs and expenses incurred in connection
                with
                the Joint Operations and keep and maintain the Contract Area and
                any
                property acquired for the Joint Operations free of all liens, charges
                and
                encumbrances except as permitted under this Agreement or the Contract
                arising out of the Joint Operations or in connection
                therewith.

            

    

    

    
      	
              4.6.15.1  

            	
              The
                Operator shall obtain and maintain in respect of the Joint Operations
                and
                the Joint Property, insurance as required under this Agreement or
                any
                applicable laws and such other insurance as the Operating Committee
                may
                from time to time determine. All such required insurance shall name
                all
                the Parties having a Participating Interest as additional insured
                with
                appropriate waivers of subrogation.  No other insurance shall be
                carried by the Operator for the Joint Operations.   Each
                Party individually may maintain such additional insurance or
                self-insurance as it deems proper to protect its own interests in
                the
                Joint Operations, the costs of which shall not be charged to the
                Joint
                Account.

            

    

    

    
      	
              4.6.15.2  

            	
              The
                policies of any such insurance shall be endorsed with waivers of
                all
                explicit or implicit rights of subrogation to eventual rights against
                Government and the Non-Operators and, alternatively, to the extent
                possible, the Operator shall have Government and the Non-Operators
                named
                as additional insured.  The Operator shall take care that
                Subcontractors while taking insurance shall have the Parties and
                the
                Government named as additional
                insured.

            

    

     

    
 

    
      
        
        

      

      
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          15

        
          

        

      

      
        
        

      

    

    
      	
              4.6.15.3  

            	
              Each
                Party shall be solely liable for any loss or damage or liability
                of
                whatsoever nature when such loss, damage or liability is caused by
                such
                Party's Gross Negligence or Willful Misconduct and in such event
                such
                Party shall indemnify the other Parties against all claims in respect
                of
                any loss or damage so arising.

            

    

    

    
      	
              4.6.15.4  

            	
              Subject
                to Article 4.6.15.3 and to Article 4.9.1, all damage, loss and liability
                incurred in the Joint Operations which are not completely covered
                by
                insurance policies procured or furnished under Article 4.6.15.1 shall
                be
                borne by the Parties in proportion to their respective Participating
                Interests.

            

    

    

    
      	
               

            	
              4.6.16  Open,
                maintain and operate a bank account or accounts  as may be
                appropriate for the Joint
                Operations.

            

    

    

    
      	
              4.6.17

            	
              Keep
                the Parties informed regarding the Joint Operations and
                prepare  and submit reports, technical studies and production
                forecasts,

            	
              including
                significant changes in production forecasts, and other data and
                information as required under this
                Agreement.

            

    

    

    
      	
              4.6.18

            	
              Subject
                to Article 9, allow at the sole risk and expense of the concerned
                Party(s), authorized representatives of the Parties full access to
                Joint
                Operations, data and information pertaining to Joint Operations including
                derivative maps, reports, books, records, accounts at all reasonable
                times
                and conduct audits as provided for in the Accounting Procedure at
                the sole
                risk and expense of the concerned Party
                (s).

            

    

    

    
      	
              4.6.19

            	
              Give
                timely notice to the Parties prior to physically demarcating the
                location
                of a Well (including coordinates, and all other relevant information),
                as
                well as reasonable advance notice of the commencement of drilling
                operations and give notice of proposed
                testing.

            

    

     

    
 

    
      
        
        

      

      
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          16

        
          

        

      

      
        
        

      

    

    
      	
              4.6.20

            	
              Take
                prompt and necessary action and measures to protect and safeguard
                life,
                health, the environment and property and interests of the Parties
                and the
                Joint Operations.

            

    

    

    
      	
              4.6.21

            	
              Make
                such recommendations from time to time to the Operating Committee
                for the
                efficient carrying out of the Joint Operations, as Operator may consider
                advisable.

            

    

    

    
      	
               

            	
              4.6.22
                Perform duties for the Operating Committee set out in Article 5,
                submit
                Work Programmes, Budgets and AFEs as provided in Article 6 and perform
                such additional operations and services as Operating Committee may
                from
                time to time direct.

            

    

    

    
      	
              4.7

            	
              Operator
                undertakes to carry out each Joint Operations programme within the
                limits
                of the Approved Work Programme and Approved Budget in accordance
                with the
                Good International Petroleum Industry Practices (GIPIP) and shall
                not
                undertake any operations hereunder not included in the Approved Work
                Programme or make any expenditure as to a Year in excess of the amounts
                budgeted in the Approved Budget except as
                follows:

            

    

    

    
      	
              4.7.1  

            	
              If
                necessary to carry out an Approved Work Programme, Operator is authorized
                to make expenditure in excess of the Approved Budget up to but not
                exceeding ten percent (10%) of each budget
                item.

            

    

    

    
      	
              4.7.2  

            	
              Operator
                in a Year is also authorized to make expenditures for operations
                in the
                Contract Area not included in Approved Work Programme or not provided
                in
                an Approved Budget, limited, however, to a total not exceeding one
                hundred
                thousand United States Dollars (US $ 100,000) provided that the
                expenditures are not for purposes
                previously rejected by the Operating Committee and
                provided such expenditures shall be reported promptly to the Operating
                Committee by the Operator. Once the itemized report of such expenditures
                has been approved by the Operating Committee, the amount of expenditure
                limit shall be increased back to one hundred thousand United States
                Dollars (U.S. $100,000).

            

    

    

    

    
      	
              4.7.3  

            	
              Operator
                shall annually submit a forecast of operating expenses (also called
                operating expenditure budget) to Operating Committee. Should actual
                or
                anticipated operating expenses for any annual period be in excess
                of such
                forecast by ten percent (10%) or two hundred thousand United States
                Dollars (U.S. $200,000), whichever is less, appropriate explanation
                of the
                over expenditure shall be presented to the Operating Committee as
                soon as
                such overrun is evident and Operating Committee shall determine corrective
                actions to be taken, if any. Operator shall furnish to the Parties
                quarterly statements of actual versus budgeted expenditures with
                appropriate explanations for
                variances.

            

    

    

    
      	
              4.8

            	
              Operator
                shall promptly provide the Parties all duplicate samples, properly
                packed,
                of rocks and fluids collected during operations.  Operator shall
                always be mindful in the conduct of Petroleum Operations of the rights
                and
                interest of India.

            

    

     

    
 

    
      
        
        

      

      
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          17

        
          

        

      

      
        
        

      

    

    
      	
              4.9

            	
              If
                a claim is made against any Non-Operator or if any Party is sued
                on
                account of any matter arising from operations hereunder over which
                such
                Party has no control because of the rights given to the Operator
                by this
                Agreement, such Party shall immediately notify all other Parties
                and the
                claim or suit shall be treated as any other claim or suit involving
                operations hereunder.  Operator shall (except in the case of
                class actions) without admission of liability, either compromise,
                settle
                or defend claims and litigation (to the extent not covered by insurance)
                arising out of Joint Operations provided, however, that Operator
                shall not
                pay or waive rights to more than the equivalent of one hundred thousand
                United States Dollars (US $100,000) in full settlement of any claim
                or
                suit without approval of the Operating Committee. Any claim or litigation
                involving an amount in excess of the equivalent of two hundred fifty
                thousand United States Dollars (US$ 250,000) shall be reported promptly
                to
                the Operating Committee and shall not be settled without approval
                of the
                Operating Committee. The above is without prejudice to the legal
                rights
                available to a Party to  be represented by their own counsel at
                their expense to participate in the defense of any such claim, demand,
                suit, or action. Any costs and expenses incurred shall be treated
                as part
                of the Joint Account.

            

    

    

    
      	
              4.9.1  

            	
              The
                Operator shall not be liable to the Parties or any of them for any
                loss or
                damage arising in connection with the conduct by the Operator of
                Joint
                Operations hereunder, and, further each Party shall, to the extent
                of its
                Participating Interest, indemnify the Operator against any action,
                claim
                or demand arising in connection therewith except in the case of any
                loss
                or damage or any action, claim or demand, aforesaid arising directly
                out
                of Gross Negligence or Wilful Misconduct on the part of the
                Operator.

            

    

    

    
      	
              4.9.2  

            	
              In
                the event a claim, demand, action is made by the Government or any
                third
                party or arising out of a liability is made against or incurred by
                or
                demanded from any Party who is not the Operator under the terms of
                this
                Agreement, then such Party shall upon receipt of any such claim or
                demand
                or upon receipt of notification of such suit or action, promptly
                report
                the same to the Operator and all of the other Parties and provide
                therewith details of such claim, demand, suit or action. Any compromise,
                settlement or waiver of any rights in respect of any such claim,
                demand,
                suit or action made by such Party without the prior approval of the
                Operating Committee, shall be solely to the account of such Party
                and the
                other Parties hereto shall not be responsible or liable therefor
                or any
                part thereof. The aforesaid is without prejudice to legal rights
                as may be
                available to the Parties to be represented by their own counsel at
                their
                expense in the participation or defense of any such claim, demand,
                suit or
                action.

            

    

    

    
      	
              4.10  

            	
              Each
                of the Parties shall obtain and maintain, in respect of its Participating
                Interest share of any liability to third parties which may arise
                in
                connection with the Joint Operations, such insurance or other evidence
                of
                ability to meet  any such liability as shall from time to time
                be mutually agreed by the Parties. Each of the Parties shall, as
                and when
                required by the Operator, produce to it such evidence as it shall
                reasonably require to establish that such insurance or such ability
                exists
                and is being maintained.

            

    

     

    
 

    
      
        
        

      

      
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          18

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              4.11

            	
              The
                Parties agree that non-operating party may desire to second their
                personnel to JV operation.  Such secondment of personnel by a
                Non-Operating party to Operator’s organizations shall be subject to a
                terms and conditions which shall be mutually agreed to and covered
                under a
                separate agreement/arrangement between Operator and concerned
                non-operating party:

            

    

    

    
      	
               

            	
              4.12

            	
              The
                Parties agree that costs incurred by the Operator in relation with
                the
                performance of its obligations under Article 4 shall be chargeable
                to the
                Joint Account.

            

    

    

    
      
        
        

      

      
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          19

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      5 - OPERATING COMMITTEE

    

    

    
      	
              5.1

            	
              To
                provide for the overall supervision and direction of Joint Operations,
                there shall be established an Operating Committee consisting of one
                (1)
                representative of each of the Parties to this Agreement. The nominee
                of
                the Operator shall be the convenor and chairman of the Operating
                Committee.

            

    

    

    Each
      Party shall within two weeks of the signing of this Agreement notify the other
      Party (s) in writing of the name and address of its representative and may
      at
      any time and from time to time replace its representative by notice to the
      other
      Party and may designate one or more alternate representatives to act in the
      absence of its representative. A representative shall be deemed authorized
      to
      bind the Party nominating such representative for the purposes of this
      Agreement.

    

    The
      Operating Committee is the coordinating body for the direction, control and
      administration of the Joint Operations. The principal functions of the Operating
      Committee shall be:

    

    
      	
              5.1.1

            	
              To
                establish policies from time to time governing various aspects or
                activities of the Joint Operations.

            

    

    

    
      	
              5.1.2

            	
              To
                review, approve and revise annual Work Programmes and corresponding
                Budgets, as proposed by the
                Operator.

            

    

    

    
      	
              5.1.3

            	
              To
                appoint such technical, financial, accounting, legal or other
                sub­committees as the representatives may deem appropriate for
                studies, analyses, reports, etc., on matters pertaining to the Joint
                Operations.

            

    

    

    5.
      1.4                      To
      review reports on Joint Operations conducted in the Contract Area.

    

    
      	
              5.1.5

            	
              To
                review and approve any proposal for the appraisal of an area and
                to
                delineate any Discovery.

            

    

    

    
      	
              5.1.6

            	
              To
                review, revise and approve Work Programmes and Budgets for Exploration,
                Development and Production Operations as defined herein and as proposed
                by
                the Operator.

            

    

    

    5.1.7                      To
      review and approve Exploration Wells and locations (including location of
      Wellsrequired for any purposes whatsoever).

    

    5.1.8                      To
      review and approve Well stimulation programmes.

    

    5.1.9                      To
      review and determine the area to be relinquished

     

    

    
      
        
        

      

      
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          20

        
          

        

      

      
        
        

      

    

     

    
      	
              5.1.10

            	
              To
                approve appointment of Subcontractors for carrying out any Petroleum
                Operations by Operator beyond the authority vested in the Operator
                under
                this Agreement.

            

    

    

    5.1.11                      To
      review and approve the declaration of a Discovery as a Commercial
      Discovery.

    

    5.1.12                      To
      review and approve any proposed plan for joint development.

    

    5.1.13                      To
      review and determine the area that may be voluntarily relinquished.

    

    
      	
              5.1.14

            	
              To
                review and approve such other matters with respect to Joint Operations
                in
                the Contract Area as may be referred to the Operating Committee by
                any
                member of the Operating Committee.

            

    

    

    
      	
              5.1.15

            	
              Any
                other matter which is required by the terms of this Agreement to
                be
                approved by the Operating
                Committee.

            

    

    

    
      	
              5.2

            	
              Unless
                otherwise agreed, the Operating Committee shall meet at least once
                every
                three months at the office of the Operator or elsewhere as the Parties
                shall unanimously decide. The Operator shall call such meetings and
                shall
                give at least twenty (20)  days prior notice  of the
                time and date of each meeting, together with the agenda and all supporting
                data/information etc. Additional meetings may be requested and convened
                by
                any Party.  A Party which wishes to hold an additional meeting
                shall give notice at least twenty (20) days before the proposed meeting
                date, specifying the proposed time, place and agenda of the meeting.
                In
                case of emergency, a meeting shall be convened whenever necessary,
                upon
                such notice as shall be reasonable in the circumstances. Matters
                not
                included in the agenda may be taken up with the unanimous consent
                of all
                Parties (whether present at the meeting or
                otherwise).

            

    

    

    
      	
              5.3  

            	
              The
                Chairman of the Operating Committee, who shall preside over the meeting
                and prepare the minutes, shall be a representative of the Operator.
                The
                minutes shall include the names of the representatives present, the
                Parties they represent and any formal action taken by the Operating
                Committee. The minutes shall be deemed correct and approved when
                the
                Operator receives written, telex or facsimile approval from the Parties.
                The Chairman shall maintain a permanent file of all Operating Committee
                determinations.

            

    

    

    
      	
              5.4  

            	
              Any
                of the Parties may submit matters for determination without holding
                a
                meeting provided such matters are submitted by facsimile, telex or
                acknowledged telegram to the other Parties. In such event, the
                other  Parties shall vote by giving advice by facsimile, telex
                or acknowledged telegram of such vote to the submitting Party within
                thirty (30) days with copies to all the other parties unless the
                communication relates to the deepening, completing, sidetracking,
                plugging
                back, reworking, coring, testing or abandoning of a well on which
                drilling
                equipment is located, in which case each Party shall vote within
                forty
                eight (48) hours. A failure to vote shall be deemed to be a negative
                response.

            

    

     

    
 

    
      
        
        

      

      
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          21

        
          

        

      

      
        
        

      

    

    
      	
              5.5  

            	
              Each
                representative or alternate representative at the cost and expense
                of the
                Party he represents, shall be entitled to have present at any Operating
                Committee meeting such reasonable number of advisors as he may desire
                and
                which are appropriate to the Joint Operations matters under
                consideration.

            

    

    

    
      	
              5.6  

            	
              Subject
                to Article 11 of this Agreement, all decisions of the Operating Committee
                shall be made by unanimous vote.  In case of difference of
                opinion all decision shall be taken by affirmative vote of 70% or
                more of
                the participating interest with each party voting according to its
                participating interest and such decisions shall be final and binding
                on
                the Parties.

            

    

    

    
      	
              5.7  

            	
              The
                lodging, food, transportation and incidental costs incurred by
                representatives on the Operating Committee to attend meetings of
                the
                Operating committee shall be borne by the respective Parties they
                represent.

            

    

    

    
      
        
        

      

      
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          22

        
          

        

      

      
        
        

      

    

     

    ARTICLE-
      6 - WORK PROGRAMMES AND BUDGETS

    

    
      	
              6.1

            	
              On
                or before the 30th
                day of
                November of each Year Operator shall submit to the Parties a
                proposed Work Programme and Budget for the Contract Area for the
                subsequent Year, which Work Programme and Budget shall include as
                a
                minimum the work and expenditure required to be performed or incurred
                during such Year. At the same time as that Year's Work Programme
                and
                Budget are submitted, a provisional Work Programme for the next succeeding
                Year shall be presented by the Operator. Operator shall submit to
                the
                Parties a proposed Work Programme and Budget as soon as possible
                after the
                execution of this Agreement for the remainder of the Year in which
                this
                Agreement is executed.

            

    

    

    
      	
              6.2

            	
              On
                or before the 31st
                day of
                December of each Year, the Operating Committee shall agree upon and
                adopt a Work Programme and Budget for the subsequent Year which shall
                include as a minimum the work and expenditure required to be performed
                or
                incurred under the Contract during such Year. At the time of agreeing
                upon
                and adopting a Work Programme and Budget, the Operating Committee
                shall
                provisionally consider, but not act upon or adopt, a Work Programme
                for
                the next succeeding Year. As soon as possible after the adoption
                of a Work
                Programme and Budget, Operator shall provide a copy thereof to each
                Party.

            

    

    

    
      	
              6.3

            	
              Each
                Budget shall be subdivided into two major functional categories,
                i.e.
                exploration/ appraisal versus development & production, and within
                each of those by sub-categories further broken down by programmed
                activity  and individual projects. Purchases of materials and
                supply inventory not specifically made for an Approved Budget project
                shall be budgeted as a separate item. Each individual project costing
                more
                than one hundred thousand United States Dollars (U.S. $100,000) per
                program shall be either labeled as "Firm" or "To Mature" depending
                upon
                the degree of complete details furnished at the time of budget
                presentation.

            

    

    

    
      	
              6.4

            	
              For
                a project to be considered "Firm" within the Budget, it will require
                program description, objectives, cost estimates and economic justification
                sufficiently complete and in such detail as to allow thorough evaluation
                of the project.

            

    

    

    
      	
              6.5  

            	
              Projects
                that do not meet this presentation standard at the time of Budget
                formulation may also be included in the Budget to receive approval
                in
                principle, and shall be labeled as "To Mature". Such projects must
                be
                subsequently fully justified to the Operating Committee and receive
                its
                specific approval prior to the physical commencement of the
                project.

            

    

    

    
      	
              6.6  

            	
              Operator
                shall submit to the parties holding a Participating Interest (except
                if
                such interest is being carried by another party) for prior approval
                Authorization For Expenditure Requests ("AFEs") covering each individual
                project within the Approved Budget in the following categories and
                shall
                obtain approval prior to undertaking the following
                projects:

            

    

    
      
        
        

      

      
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          23

        
          

        

      

      
        
        

      

    

    

    6.6.1  (a)                      Licenses
      - any initial cash   payment for a license.

    

    
      	
               

            	
              6.6.1  (b)

            	
              Exploration
                - quarterly projects for geological and geophysical work, core drilling
                and concession rentals after any initial payment, and overhead charges
                applicable to geological and geophysical operations.  Under
                special circumstances Operator shall obtain separate approval for
                major
                geological or geophysical projects, which are in themselves in excess
                of
                one hundred thousand United States Dollars (U.S.
                $100,000).

            

    

    

    6.6.1  (c)                      Drilling:

    

    
      	
              i)  

            	
              Each
                Exploration and

            

    

    ii)           delineation
      Well.

    
      	
               

            	
              iii)

            	
              Deepening
                of any Well below original target depth, involving exploratory
                footage.

            

    

    
      	
               

            	
              iv)

            	
              Workovers
                in excess of two hundred thousand United States Dollars (U.S. $200,000)
                for any Well, including deepening in to development
                zones.

            

    

    

    6.6.1  (d)                      Plant
      and equipment:

    

    
      	
              i)  

            	
              Individual
                construction projects and equipment purchases exceeding one hundred
                thousand United States Dollars (U.S. $100,000)
                each.

            

    

    

    
      	
               

            	
              ii)

            	
              Equipping
                of Wells exceeding two hundred thousand United States Dollars (U.S.
                $200,000). Equipping of Wells includes generally the purchase and
                installation of equipment and material for lifting, heating, storing
                and
                otherwise handling production.

            

    

    

    
      	
               

            	
              iii)

            	
              Projects
                and purchases costing less than one hundred thousand United States
                Dollars
                (U.S. $100,000) each shall be approved by Operator but shall be included
                for information purposes in approval requests submitted monthly to
                the
                Parties.

            

    

    

    
      	
               

            	
              iv)

            	
              Storehouse
                stocks - quarterly commitments for purchases of advance materials
                for
                projects not yet approved.

            

    

    

    v)           Unusual
      commitments of any kind.

    

    
      	
              6.6.2

            	
              The
                AFEs shall be based on the best current estimates in hand and shall
                be
                developed prior to the availability of firm contract rates. Operator
                shall
                also submit supplements for approval when it is anticipated that
                AFEs will
                be overextended by more than ten percent
                (10%).

            

    

     

    
 

    
      
        
        

      

      
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          24

        
          

        

      

      
        
        

      

    

    
      	
              6.6.3

            	
              Approval
                of an AFE shall be confirmed within ten (10) days by returning a
                signed
                copy of the AFE to the Operator failing which it shall be deemed
                to have
                been approved.

            

    

    

    
      
        
        

      

      
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          25

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      7 - COSTS, EXPENSES AND DEFAULT

    

    

    
      	
              7.
                1

            	
              Subject
                to the provisions of Article 3, all costs and expenses incurred by
                the
                Operator on behalf of the Parties in carrying out Joint Operations
                under
                this Agreement (whether or not specifically mentioned herein) shall
                be
                borne and paid by the Parties in proportion to their Participating
                Interests.

            

    

    

    
      	
              7.2

            	
              In
                the event of any conflict between this Agreement and the applicable
                provisions contained in the Accounting Procedure or in any supplemental
                accounting instructions approved by the Operating Committee, the
                applicable provisions in the body of this Agreement shall govern
                to the
                extent of such conflict.

            

    

    

    
      	
              7.3

            	
              The
                terms and provisions of the Accounting Procedure may be changed or
                modified as agreed in writing by the Parties from
                time to time .

            

    

    

    
      	
              7.4

            	
              Audits
                of Operator's accounts and records relating to the accounting made
                under
                this Agreement shall be conducted as provided for in the Accounting
                Procedure.

            

    

    

    
      	
              7.5

            	
              Inventories
                of Joint Operations assets shall be taken as provided for in the
                Accounting Procedure.

            

    

    

    7.6           Default

    

    
      	
              7.6.1

            	
              If
                any Party (hereinafter called the "Defaulting Party") fails to pay
                in part
                or full its share of any Cash Call by the date of payment thereof
                as
                provided in the Accounting Procedure (the Due
                Date):

            

    

    

    
      	
               

            	
              a)

            	
              The
                Operator shall notify all Parties of such default no later than the
                fifth
                (5th)
                Business Day from the Due Date.

            

    

    

    
      	
               

            	
              b)

            	
              The
                Parties with a Participating Interest other than the Defaulting Party
                (hereinafter called the "Non-Defaulting Parties") shall contribute,
                as
                hereinafter provided, to the amount in
                default.

            

    

    

    
      	
               

            	
              c)

            	
              If
                the Defaulting Party fails to remedy its default within ten (10)
                days of
                the Due Date, the Operator shall notify the Non-Defaulting Parties
                of the
                amount in default and shall make further Cash Call to each of the
                Non-Defaulting Parties, with a copy to the Defaulting Party, based
                on the
                proportions that such Non-Defaulting Party's Participating Interest
                bears
                to the total of the Participating Interest of the Non-Defaulting
                Parties.

            

    

    

    
      	
               

            	
              d)

            	
              Unless
                the Operator notifies the Non-Defaulting Parties that such default
                has
                been remedied, each of the Non-Defaulting Parties shall pay the amount
                specified in the Cash Call issued pursuant to (c) above not later
                than
                twenty (20) days from date of receipt of such notice, and shall continue
                to pay, in addition to its share of subsequent Cash Call, the same
                proportions of that part of all subsequent Cash Calls attributable
                to the
                Defaulting party until such time as the Defaulting Party has remedied
                its
                default as hereinafter provided.

            

    

    

    
      	
               

            	
              e)

            	
              The
                Operator shall promptly notify the Parties whenever a default has
                been
                remedied.

            

    

     

    
 

    
      
        
        

      

      
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          26

        
          

        

      

      
        
        

      

    

    
      	
              7.6.2

            	
              The
                Defaulting Party shall-have the right to remedy its default up to
                the time
                of transfer of its Participating Interest under Article 7.7 by payment
                of
                the amount due together with interest thereon calculated at the LIBOR
                rate
                on the Due Date plus two percent (2%) per annum from and including
                the Due
                Date for the Calendar Month in which the Due Date falls and thereafter
                at
                the LIBOR rate ruling on the first day of each subsequent Calendar
                Month
                plus two percent (2%), such interest being compounded on a Calendar
                Monthly basis throughout the period of the default. All interest
                received
                by the Operator shall be paid to the Non-Defaulting Parties as well
                as any
                funds advanced in respect of the amount in default
                refunded.

            

    

    

    
      	
              7.6.3

            	
              The
                Non-Defaulting Parties shall at all times have a lien to the extent
                of
                default on the Defaulting Party's Participating Interest share and
                property held pursuant to this Agreement and the Defaulting Party's
                share
                of Petroleum produced to secure the payment, in full, of the amount
                in
                default together with interest as provided in Article 7.6.2 and,
                in the
                event of a sale of Petroleum by the Defaulting Party, for the purpose
                of
                enforcing such lien, shall have the right to require the purchaser
                of the
                Defaulting Party's share of Petroleum to make payment in respect
                thereof
                to the Operator or whomsoever it nominates until the Non-Defaulting
                Parties have recovered, in full, the amount in default together with
                interest as provided in Article 7.6.2. Such purchaser shall be entitled
                to
                rely upon information given to it by the Operator for and on behalf
                of the
                Parties as to the amount in default and interest due, and the Operator
                or
                whomsoever it nominates, shall be empowered to give such purchaser
                a full
                and complete receipt in respect of such
                payment.

            

    

    

    
      	
              7.6.4

            	
              All
                sums which may become payable to Non-Defaulting Parties under Article
                7.6.3 shall be paid by the Operator to them (to a designated bank
                account
                of the Non-Defaulting Party's choice) as soon as possible, and any
                residual balance shall be paid promptly to the Defaulting Party.
                Any
                foreign exchange gains or losses as calculated by the Operator shall
                be
                for the account of the Defaulting
                Party.

            

    

    

    
      	
              7.6.5

            	
              The
                Defaulting Party shall remain liable and obligated for its Participating
                Interest share of all costs and obligations that in any way relate
                to the
                abandonment of Petroleum Operations. Any sums paid in respect of
                abandonment by the Non-Defaulting Parties on behalf of the Defaulting
                Party (together with interest thereon pursuant to Clause 7.6.2) shall
                remain a debt due and owing by the Defaulting
                Party.

            

    

     

    
 

    
      
        
        

      

      
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          27

        
          

        

      

      
        
        

      

    

    7.7           Continuation
      of Default

    

    
      	
              7.7.1

            	
              After
                any default has continued for thirty (30) Business Days from the
                date of
                written notice of Default under Article 7.6 and for as long thereafter
                as
                the Defaulting Party remains in default on any payment due under
                this
                Agreement, the Defaulting Party shall not be entitled to vote on
                any
                matter coming before the Operating Committee during the period such
                default continues. Unless agreed otherwise by the Non-Defaulting
                Parties,
                the voting interest of each Non-Defaulting Party shall be in the
                proportion which its Participating Interest bears to the total of
                the
                Participating Interest of all the Non-Defaulting Parties. Any matter
                requiring unanimous vote of the Parties shall be deemed to exclude
                the
                Defaulting Party. Notwithstanding the foregoing, the Defaulting Party
                shall be deemed to have approved, and shall join with the Non-Defaulting
                Parties in taking any action to maintain and preserve the
                Contract.

            

    

    

    
      	
              7.7.2

            	
              In
                the event that the default continues for more than ninety (90) days
                (the
                "Default Period") and the Defaulting Party does not pay the amount
                in
                default plus accrued interest by the end of such time, a proportion
                of the
                Participating Interest of such Defaulting Party shall, at the sole
                election of the Non-Defaulting Parties be forfeited to the Non-Defaulting
                Parties to reflect the ratio that the Participating Interest of the
                Defaulting Party bears to the cumulative contribution made by the
                Defaulting Party to the cumulative contribution made plus amount
                in
                default of the Defaulting Party.

            

    

    

    Following
      such forfeiture the reduced Participating Interest of the Defaulting Party
      shall
      be in accordance of the following formula, except that in the case of a default
      on the first Cash Call made on a Party, ten percent (10%) of the Participating
      Interest of the Defaulting Party shall stand forfeited:-

    

    A           =           [B/(B+C)]                                x           
      D           where:

    

    A           =           the
      reduced Participating Interest of the Defaulting Party.

    

    
      	
               

            	
              B

            	
              =

            	
              the
                total contributions to the Joint Operations costs of the Defaulting
                Party
                up to but not including the amount in
                default.

            

    

    

    C           =           the
      amount in default.

    

    D           =           Participating
      Interest of the Defaulting Party.

    

    Such
      forfeiture shall not restore the Defaulting Party's powers andrights forfeited
      under Article 7.7.1 until such Defaulting Party has paid the first Cash Call
      following

    including
      the obligations related thereto, in proportion to their Participating Interests
      or in such other proportion as unanimously agreed by them. The Defaulting Party
      shall execute such documents as are necessary to transfer its Participating
      Interest at its sole cost.

     

    
 

    
      
        
        

      

      
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          28

        
          

        

      

      
        
        

      

    

    
      	
              7.7.3

            	
              Notwithstanding
                the provisions of Article 7.7.2, in the event that as a result of
                a
                forfeiture by the Defaulting Party of a part of its Participating
                Interest
                pursuant to the provisions of Article 7.7.2, the remaining Participating
                Interest of the Defaulting Party falls below ten percent (10%), or
                as
                permitted under the Contract, the Non-Defaulting Parties shall assume
                such
                Participating Interest of the Defaulting Party in proportion to their
                Participating Interest or in such other proportion as unanimously
                agreed
                by them, subject to the approval of Management Committee / Govt.
                of
                India.

            

    

    

    
      	
               

            	
              7.7.4  (i)  The
                Defaulting Party shall be deemed to have surrendered its Participating
                Interest in the Contract and each of the Non-Defaulting Parties shall
                have
                the right to request the transfer to it and to acquire, with effect
                from
                the date of default, subject to any necessary consent of the Government,
                as beneficial owner and free of any liens, charges and encumbrances,
                the
                Participating Interest of the Defaulting
                Party.

            

    

    

    
      	
               

            	
              (ii)  The
                Defaulting Party shall promptly join in such actions as may be required
                to
                obtain any necessary consent of the Government and shall do such
                acts and
                execute such documents as may be necessary to transfer its Participating
                Interest in the Contract to the other Parties in the proportions
                agreed
                and all rights, title and interest derived there from in and under
                this
                Agreement, and in any Petroleum produced and Joint Property. All
                costs and
                expenses relating to such transfer shall be for the account of the
                Defaulting Party.

            

    

    

    
      	
               

            	
              (iii)
                Each Party hereby irrevocably appoints the Operator (and any successor
                Operator) to act, in the event of default by such Party in the
                circumstances described in that clause, as its lawful attorney to
                do such
                acts and execute such documents as may be necessary to transfer all
                of its
                interest in accordance with the provisions
                thereof.

            

    

    

    7.8           Forfeiture
      to be Without Prejudice to Other Remedies and No Right of
      Set  off

    

    
      	
              7.8.1

            	
              The
                foregoing provisions, including but not limited to the transfer of
                Defaulting Party's Participating Interest, are without prejudice
                to any
                other remedies or rights which the Non-Defaulting Parties may have
                against
                the Defaulting party with respect to a
                default.

            

    

    

    
      	
              7.8.2

            	
              Each
                Party acknowledges and accepts that a fundamental principle of
                this  Agreement is that each Party pays its Participating
                Interest share of all amounts due under this Agreement as and when
                required.  Accordingly, any Party which becomes a Defaulting
                Party undertakes that, in respect of either any exercise by the
                Non-Defaulting Parties of any rights under or the application of
                any of
                the provisions of this Article 7, such Party hereby waives any right
                to
                raise by way of set off or invoke as a defense, whether in law or
                equity,
                any failure by any other Party to pay amounts due and owing under
                this
                Agreement or any alleged claim that such Party may have against Operator
                or any Non-Operator, whether such claim arises under this Agreement
                or
                otherwise.  Each Party further agrees that the nature and the
                amount of the remedies granted to the Non-Defaulting Parties hereunder
                are
                reasonable and appropriate in the
                circumstances.

            

    

     

    
 

    
      
        
        

      

      
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          29

        
          

        

      

      
        
        

      

    

    
      	
              7.9

            	
              Any
                Party may make an additional contribution on behalf of another Party
                so as
                to satisfy a Cash Call of such other Party in accordance with this
                Article.

            

    

    

    

    
      
        
        

      

      
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          30

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      8 - OWNERSHIP OF ASSETS

    

    

    
      	
              8.1

            	
              Subject
                to Article 2 and 8.3 hereunder, all assets acquired by Operator for
                the
                Joint Operations shall be owned by the Parties in proportion to their
                respective contributions to the costs of acquisition of such
                assets.

            

    

    

    
      	
              8.2

            	
              Unless
                the Operating Committee previously authorizes otherwise, Operator
                shall
                acquire for the Joint Operations only such assets as are reasonably
                estimated to be required in carrying out the Joint Operations provided
                for
                in Approved Work Programmes and Budgets, or revisions thereof, it
                being
                intended that Operator shall not unreasonably stockpile materials
                and
                equipment for future use without the approval of the Operating
                Committee.

            

    

    

    
      	
              8
                3

            	
              Whenever
                Operator considers that any Joint Operations' asset is no longer
                needed in
                carrying out the Joint Operations, Operator shall notify the Parties
                and
                such surplus assets shall be disposed of as provided in Article III
                of the
                Accounting Procedure.

            

    

    

    
      	
              8.4

            	
              Any
                Party may delegate to Operator the authority to sell and dispose
                of such
                asset and the proceeds of any such sale shall reflect the percentage
                ownership, which the Parties have in such
                assets.

            

    

    

    
      	
              8.5  

            	
              Operator
                may also utilize in the Joint Operations equipment owned and made
                available by any Party and charges to the Joint Account for use of
                such
                separately-owned equipment shall be made as provided
                in Section 3 of the Accounting Procedure of the
                Contract.

            

    

    

    
      	
              8.6  

            	
              In
                connection with work to be carried out pursuant to an Approved Work
                Programme and Approved Budget, the Operator, or any Affiliate of
                the
                Operator, may, subject to the provisions of the Contract, supply
                all
                necessary material and services whether owned, leased or otherwise,
                from
                its own resources and shall charge the costs thereof to the Joint
                Account
                in accordance with Section 3.1.8 of the Accounting Procedure of
                Contract.

            

    

    

    

    
      
        
        

      

      
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          31

        
          

        

      

      
        
        

      

    

    

     

    ARTICLE
      9 - INFORMATION, REPORTS AND CONFIDENTIALITY

    

    9.1           Operator
      shall furnish to the Parties data, information and following
      reports:

    

    
      	
              9.1.1

            	
              Daily
                Well progress report (for Exploration and Appraisal Wells) which
                shall
                include for the day concerned, a brief description of the
                work  performed, the number of feet drilled, the type and depth
                of the formation penetrated, the size and landed depth of any casing
                landed, the type and results of any tests made, and such other Well
                information  or data  as  the Parties from
                time to time may reasonably
                specify.

            

    

    

    
      	
              9.1.2

            	
              During
                drilling, daily reports of cumulative Well
                costs.

            

    

    

    
      	
              9.1.3  

            	
              Monthly
                report of Joint Operations, which shall include a summary of services,
                and
                all Exploration, Appraisal, drilling and testing operations performed
                during the period covered by such
                report.

            

    

    

    
      	
              9.1.4  

            	
              Immediate
                reports on Well developments of significance, such as blow-out or
                Discovery, and immediate notice of special events of importanceto
                the
                Joint Operations, such as fire, accident, sabotage or acts of God
                involving loss of life or serious property damage; strikes and riots;
                significant competitor activities; or Government actions threatening
                or
                adversely affecting the rights and interests of the Parties. Such
                immediate reports or notices shall be given by telex, telegraph,
                telephone
                or equivalent means and confirmed in
                writing.

            

    

    

    
      	
              9.1.5  

            	
              A
                comprehensive final report upon the completion of each significant
                phase
                in the operations.

            

    

    

    
      	
              9.1.6

            	
              Such
                other reports as the Parties may from time to time request as to
                all  lands,  concessions,  surface  rights,
                easements, rights-of-way,  facilities, equipment, materials and
                supplies acquired by or disposed of by Operator pursuant to this
                Agreement.

            

    

    

    
      	
              9.1.7

            	
              Copies
                of well logs, well completion reports, Core Analysis Reports and
                the
                G&G studies

            

    

    

    
      	
              9.2

            	
              Subject
                to Article 9.3, the Parties shall have full access at their sole
                cost and
                risk at all reasonable times to all of the Joint Operations and
                may:

            

    

    

    
      	
              9.2.1

            	
              Inspect
                all records, books and accounts, data studies, logs, surveys, files,
                maps
                and other information kept by or available to
                Operator;

            

    

    

    9.2.2                      Receive
      samples of cores, Well cuttings and Petroleum;

    

    
      	
              9.2.3

            	
              Have
                copies made (first copy at Joint Operations expense) of all data
                or
                information, including laboratory analyses and
                maps;

            

    

    

    
      	
               

            	
              Have
                special  studies performed by Operator (at such requesting
                Party's expense, unless approved by Operating Committee) to the extent
                when studies do not interfere with or delay
                Operator's  performance of its duties under this Agreement;
                and

            

    

    

    
      	
              9.2.5

            	
              Request
                and receive from Operator forecasts, schedules, statements or status
                reports where reasonable and where not otherwise provided for in
                this
                Agreement, preparation costs of which shall be for such  Party's
                account unless approved by the Operating
                Committee.

            

    

    

    
      	
              9.3

            	
              Nothing
                in this Agreement shall require any Party to divulge proprietary
                technology to the other Parties, and subject to Article 22 of the
                Contract, the following principles as to utilization and protection
                of
                proprietary technology in the Joint Operations shall
                apply:

            

    

    

    
      	
              9.3.1

            	
              Operator
                may from time to time utilize its proven proprietary technology at
                Joint
                Operations expense in the conduct of Joint Operations and subject
                to
                Article 9.3.2, may take such reasonable precautions as Operator deems
                necessary or desirable (including agreement with or commitments from
                its
                employees, contractors and agents against such disclosure) to prevent
                disclosure of or entitlement to its proprietary technology including
                improvements and inventions resulting from use hereunder to
                others.

            

    

    

    

    
      	
              9.3.2

            	
              Non-Operators
                shall have access to basic field data obtained through Operator's
                utilization of such proprietary technology and to
                final maps, data, information and conclusions resulting from any
                such
                utilization, with entitlement to copies of such basic and final data,
                interpretations, maps, information and conclusions as provided for
                in this
                Agreement.

            

    

    

    
      	
              9.3.3

            	
              Any
                Party may at its own expense utilize its proprietary technology in
                developing from Joint Operations field data whatever information
                or
                conclusions it desires without the obligations to disclose such
                information, its result or conclusions to the Parties without adversely
                affecting Joint Operations.

            

    

    

    
      	
              9.3.4

            	
              Each
                Party utilizing proprietary technology as mentioned in this Article
                9.3
                shall hold all other Parties free and harmless from all third party
                claims, charges and damages arising out of such utilization,
                including  but not limited to claims based on patent
                infringement.

            

    

    

    
      	
              9.3.5

            	
              Should
                future difficulties or controversies between the Parties occur regarding
                application of the principles of this Article 9.3, the Parties shall
                consult in good faith with the view to best possible utilization
                of
                proprietary technology in the Joint Operations, giving due regard
                to each
                party's right to protect the proprietary nature of its technology
                and the
                Parties' right and need for access to data and information as well
                as to
                final results for justifiable determinations of programmes and
                budgets.

            

    

     

    
 

    
      
        
        

      

      
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              9.4

            	
              Except
                as otherwise provided herein, each Party undertakes to treat as
                confidential, and prevent disclosure to any third party of any and
                all
                information and data obtained in the Joint Operations and relating
                to the
                Contract Area or to operations undertaken pursuant to this
                Agreement.

            

    

    

    
      	
              9.4.1

            	
              In
                consideration a Party (Disclosing Party) allowing the receiving Party
                (Receiving Party) access to the Confidential Information, the Receiving
                Party agrees to keep the Confidential Information confidential and
                acknowledges that the Disclosing Party considers the information
                disclosed
                to the Receiving Party to be proprietary. The Receiving Party shall
                not
                disclose the Confidential Information to any one except in accordance
                with
                the following terms:

            

    

    

    
      	
               

            	
              a)

            	
              The
                Receiving Party agrees to keep the Confidential Information strictly
                confidential and subject to sub-clause (b) to (d) inclusive, below,
                agrees
                not to disclose such Confidential Information to any person in any
                manner
                or mode whatsoever (including by means of photocopy or reproduction)
                without the prior written consent of the Disclosing Party, such consent
                not being unreasonably withheld.

            

    

    

    
      	
               

            	
              b)

            	
              The
                Receiving Party may disclose the Confidential Information without
                the
                prior written consent of the Disclosing Party to the extent such
                information

            

    

    

    
      	
               

            	
              i)

            	
              is
                already in the public domain or comes into the public domain other
                than
                through a breach of the terms of this Agreement by the Receiving
                Party or
                by any person to whom disclosure of Confidential Information by the
                Receiving Party is permitted pursuant to sub-Clause (c) or (d) below;
                or

            

    

    

    
      	
               

            	
              ii)

            	
              is
                required to be disclosed under applicable law or by a governmental
                order,
                decree, regulation or rule binding upon the Receiving Party provided
                that,
                as soon as practicable, the Receiving Party shall give prior written
                notice to the Disclosing Party that such disclosure is required and
                consults with the Disclosing Party on whether, and if so
                what  action should be taken to resist the
                requirement.

            

    

    

    
      	
               

            	
              c)

            	
              The
                Receiving Party may disclose the Confidential Information without
                the
                prior written consent of the Disclosing Party to the Receiving Party's
                Affiliate.

            

    

    

    
      	
               

            	
              d)

            	
              The
                Receiving Party may also disclose the Confidential Information without
                the
                prior written consent of the Disclosing Party to such of the following
                persons who have a clear need to access it for the purpose of evaluating,
                negotiating or advising on matters arising out of this Agreement
                e.g.
                employees, officers and directors of the Receiving
                Party.

            

    

     

    
 

    
      
        
        

      

      
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          33

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              e)

            	
              The
                Receiving Party may also disclose the Confidential Information without
                prior
                intimation  to  any  professional  adviser
                or financial institution retained  by the Receiving Party for
                the purpose of

            	
              evaluating
                the Confidential Information or evaluating, financing, negotiating
                or
                advising on matters arising out of this
                Agreement.

            

    

    

    
      	
               

            	
              f)

            	
              Prior  to  making  any  disclosure
                of Confidential  Information as permitted under sub-Clause (c),
                (d) or (e) above, the Receiving Party shall procure an undertaking
                that
                the proposed  recipient  of
                such  Confidential Information is made  aware of the
                terms of this Article and adheres to and be bound by the terms of
                this
                Article as if they were a party to the extent  of Agreement
                contained in this Article.

            

    

    

    
      	
              9.4.2

            	
              Notwithstanding   anything
                contained hereinabove, the provisions of this Article  shall
                continue and bind the Parties for a period not exceeding five(5)
                years
                from the date of termination of the
                Agreement.

            

    

    

    

    
      
        
        

      

      
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          34

        
          

        

      

      
        
        

      

    

     

    

    ARTICLE
      10 - WORK PROGRAMME COMMITMENT

    

    

    The
      Parties shall carry out the Work Programme as given in the Contract. In case
      of
      Minimum Work Programme, the Operator is authorized to take all decisions and
      actions necessary as per the commitment made in the
      Contract.

    

    

    
      
        
        

      

      
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          35

        
          

        

      

      
        
        

      

    

    

     

    ARTICLE
      11 - RELINQUISHMENT

    

    

    
      	
              11.1

            	
              When
                it becomes necessary pursuant to the terms of the Contract to relinquish
                portions of the Contract Area:

            

    

    

    
      	
               

            	
              11.1.1
                The Parties holding a Participating Interest shall make reasonable
                best
                efforts to reach agreement on the area proposed to be relinquished
                one  hundred  twenty  (120)  days  before
                such relinquishment is required to be made. If such Parties are unable
                to
                reach unanimous agreement ninety (90) days prior to the date on which
                the
                area or areas must be relinquished, the following procedure shall
                be
                observed, provided all selections of the area or areas to be relinquished
                are within the requirements and restrictions of the
                Contract:

            

    

    

    
      	
               

            	
              a)

            	
              In
                the event Parties holding at least seventy percent   (70%) of
                the total Participating Interests agree on an area or areas to be
                relinquished, such area or areas shall be
                relinquished.

            

    

    

    
      	
               

            	
              b)

            	
              In
                respect to any area or areas to be relinquished on which the Parties
                holding at least  seventy percent  (70%) of the
                total  Participating Interests cannot agree, each Party shall
                select a proportionate part of the remaining area or areas to be
                retained
                equal to its Participating
                Interest.

            

    

    

    
      	
              11.1.2

            	
              The
                Operator shall proceed in a timely manner to relinquish the area
                or areas
                determined in accordance with the foregoing procedures and pursuant
                to Act
                and Rules.

            

    

    

    
      
        
        

      

      
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    ARTICLE
      12 - WITHDRAWAL

    

    

    
      	
              12.1

            	
              Any
                Party may withdraw from this Agreement at any time provided that
                during
                any Exploration Phase, no Party shall withdraw until all the Exploration
                Operations obligations have been met and
                completed.

            

    

    

    
      	
              12.2

            	
              The
                Party desiring to withdraw (hereinafter called the "Withdrawing Party")
                shall give notice of intention to withdraw to the other Parties at
                least
                forty five (45) days in advance of the date of withdrawal and such
                notice
                shall contain:

            

    

    

    
      	
              12.2.1

            	
              Designation
                of the effective date for withdrawal, which shall be the last day
                of a
                Calendar Month;

            

    

    

    
      	
              12.2.2

            	
              An
                offer to assign, without compensation, to the other Parties having
                a
                Participating Interest all of the Withdrawing Party's right, title
                and
                interest in the Contract Area and all Joint Property; such offer
                to be
                conditioned on the receiving Parties assumption, subject to Article12.4,
                of all future obligations related to the right, title and interest
                offered.

            

    

    

    
      	
              12.2.3

            	
              The
                other Parties shall have thirty (30) days from date of receipt of
                such
                notice to notify the Withdrawing Party whether they accept the offer
                and
                elect to receive the assignment provided for in Article
                12.2.2.

            

    

    

    
      	
               

            	
              (a)

            	
              If
                one or more of the other Parties having a Participating Interest
                give
                notice of acceptance and election to receive such an assignment within
                such thirty (30) day period, the Parties shall promptly execute and
                deliver and do and perform all acts and things necessary and appropriate
                to effect such assignment. If more than one of the other Parties
                elect to
                receive the assignment, the Withdrawing Party interest shall be
                apportioned among the assignees in the proportion that the Participating
                Interest of each (prior to assignment) bears to the total of the
                Participating Interest of all such assignees unless another apportionment
                is agreed to by all the assignees.

            

    

    

    
      	
               

            	
              (b)

            	
              If
                none of the other Parties having a Participating Interest gives notice
                of
                its acceptance and election to receive such an assignment within
                the
                thirty (30) day period, the Parties shall promptly cause Operator
                to wind
                up the Joint Operations (unless the existing Parties mutually agree
                otherwise to continue the Joint Operations) and the Parties shall
                do and
                perform all acts and things necessary and appropriate to this end,
                including termination of the Contract, subject to approval of Operating
                Committee. In such event all Parties, including the
                Withdrawing  Party, shall continue to be responsible for their
                respective ParticipatingInterest share of all financial and other
                obligations hereunder and under the Contract until the Contract is
                terminated without further obligation of the Parties and final settlement
                has been made among the Parties.

            

    

     

    
 

    
      
        
        

      

      
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              12.2.4

            	
              In
                the event of an assignment under Article 12.2.3 (a), the Withdrawing
                Party
                shall be responsible for its financial obligations accrued under
                the
                Contract and this Agreement  until the Contract
                is  terminated, including but not limited to payment of its full
                share of costs and expenses as to any particular Well, geophysical
                survey
                or other individual project investment for which they were committed
                either under the terms of the Contract or through an Approved Work
                Programme or Budget which has been commenced  (or funds therefor
                committed) before such date of notice of withdrawal, even though
                completion thereof may post date such date of notice, except to the
                extent
                such obligations shall be assumed or paid by any third party which
                acquired from the remaining Party or Parties within three
                (3)  months of the effective date of withdrawal all or part of
                the interest assigned by the Withdrawing Party. The Withdrawing Party
                shall not be obligated for any obligations or commitments undertaken
                by
                the remaining Parties after the date of giving notice of withdrawal,
                but
                the Withdrawing Party shall be obligated for its Participating Interest
                share of any obligations which may accrue under the Contract prior
                to the
                date of notice.

            

    

    

    
      	
              12.
                3

            	
              The
                Withdrawing Party shall remain liable and obligated for its Participating
                Interest share of all expenditure accruing to the Joint Account under
                any

            	
              relevant
                programme and budget prior to the date on which the notice of withdrawal
                was given, and also to pay all reasonable costs and expenses incurred
                by
                the other Parties in connection with such
                withdrawal.

            

    

    

    
      	
              12.4

            	
              A
                Withdrawing Party shall not be allowed to withdraw from the Contract
                and
                this Agreement if its Participating Interest is subject to any lien,
                charges or encumbrance other than those arising under the Contract
                unless
                the other Parties are willing to accept the assignment subject to
                the
                additional lien, charges or
                encumbrance.

            

    

    

    
      	
              12.5

            	
              In
                the event a Party or Parties elect to receive an assignment of the
                Withdrawing Party's interest, all cost of the assignment, including
                notarial and registration fees and transfer taxes, shall be the sole
                obligation of such

            	
              Party
                or Parties in the proportion of the Participating Interest each receives
                to the total Participating Interest assigned and such Party or Parties
                shall indemnify the Withdrawing Party against and hold it harmless
                from
                any further costs, expenses or liabilities incurred under the Contract
                from the date of notice.

            

    

    

    

    
      
        
        

      

      
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    ARTICLE
      13 - SALE, TRANSFER AND ASSIGNMENT

    

    

    
      	
               

            	
              13.1

            	
              The
                right to sell, assign or transfer a Participating Interest (including
                any
                Participating Interest in accordance with any Carried Interest Agreements
                / Arrangements), in whole or in part, shall be subject to the consent
                of
                other Parties which consent shall not be unreasonably withheld and
                to the
                terms of the Contract and Article 11 and 12 and the
                following  provisions of Article
                13.

            

    

    

    
      	
               

            	
              13.2

            	
              Any
                Party shall have the right at any time, with  or without
                compensation, to sell ,transfer and/or assign to an Affiliate all
                or part
                of its right, title and interest in the Contract Area and in and
                under  this Agreement provided that (i) proposed assignee
                expressly assumes all of the Party's obligation with respect to such
                Participating Interest;  (ii)  such Affiliate is
                technically and financially competent to undertake the obligations
                of the
                Assignor and (iii) Assignee provides an unconditional bank guarantee
                to
                the extent of committed and additional Work
                Programme.

            

    

    

    13.3           Obligation
      to make First Offer

    

    
      	
              13.3.1

            	
              If  any
                Party ("Transferring Party") desires to Transfer to any person other
                than
                an Affiliate, all or any part of its Participating
                Interest  ("Sale Interest"),  it shall notify each of
                the other Parties (“Non Transferring Parties”) in writing of its desire to
                Transfer such Sale Interest by way of a written notice  (“Sale
                Notice”)  and the following conditions shall apply
                :

            

    

    

    A.           Where
      the Transferring Party has a Third Party Offer

    

    
      	
               

            	
              (i)

            	
              Where
                the Transferring Party has a bona fids offer from a responsible
                prospective purchaser (herein referred to as “Third Party Offer”) then the
                Sale Notice shall set forth the key terms and conditions of such
                Third
                Party Offer.  The Non Transferring Parties receiving such Sale
                Notice shall have the right and option for a period of  30
                (thirty) Business Days from the date of receipt of the Sale Notice
                (“Offer
                Period”) within which to agree, by a written notice (“Acceptance
                Notice”)  to acquire the Sale Interest in the proportion that
                their respective Participating Interests bear to the total Participating
                Interests of the Non Transferring Parties or in such other proportion
                that
                they may agree (within the Offer Period), at the price and upon the
                key
                terms and conditions as set forth in such Sale Notice or on terms
                equivalent to the key terms set forth in the Sale Notice, and these
                equivalent terms shall be indicated in the Acceptance
                Notice.  Upon receipt of the Acceptance Notice(s) for all or
                part of the Sale Interest, the agreement for sale shall be completed
                and
                the Transferring Party shall transfer and complete the sale  of
                the Sale Interest specified in the Acceptance Notice(s), to such
                Non
                Transferring Party(ies) within the period specified in  Article
                13.3.2 below and in the event the Non Transferring Party(ies) failes
                to
                complete such  transfer within such
                period,   the  Transferring  Party  shall  be  entitled   to  accept   the   Third   Party  Offer    and
                complete   the   sale   to  such   Third   Party  on   the   same
                terms and conditions as those set out in the Third Party
                Offer.  If no Non Transferring Party or Parties gives an
                Acceptance Notice that it or they elect or elects to acquire the
                Sale
                Interest within the Offer Period or alternatively a Non Transferring
                Party
                or Parties confirm in writing that it or they are not interested
                in
                issuing an Acceptance Notice , then the Transferring Party shall
                be free
                to accept the Third Party Offer and complete the sale on the same
                terms
                and conditions as those set out in the Third Party
                Offer.

            

    

     

    
 

    
      
        
        

      

      
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              (ii)

            	
              In
                the event only on of the Non Transferring Parties gives an Acceptance
                Notice, within the Offer Period, that it elects to acquire the Sale
                Interest then the Transferring Party shall transfer and complete
                the sale
                of the Sale Interest specified in the Acceptance Notice, to such
                Non
                Transferring Party within the period specified in Article 13.3.2
                below   and in the event the Non  Transferring
                Party fails to complete such transfer within such period, the Transferring
                Party shall be entitled to accept the Third Party Offer
                and  complete the sale to such third party on the same terms and
                conditions as those set out in the Third Party
                Offer.

            

    

    

    
      	
               

            	
              (iii)

            	
              The
                Transferring Party shall be entitled to sell such part of the Sale
                Interest in respect of which Acceptance Notices have not been received,
                to
                the third party from whom the Third Party Offer has been received,
                on
                terms and conditions specified in the Third Party
                Offer.

            

    

    

    
      	
               

            	
              B.

            	
              Where
                the Transferring Party does not have a Third Party
                Offer

            

    

    

    
      	
               

            	
              (i)

            	
              Where
                the Transferring Party does not have a Third Party Offer, then the
                Sale
                Notice shall request offers from the Non Transferring Parties for
                acquisition of the Sale Interest.  Pursuant to such Sale Notice,
                each of the Non Transferring Parties shall have a period of 30 (thirty)
                Business Days from the date of receipt of the Sale Notice to indicate
                if
                they are interest in acquiring all or part of the Sale Interest (“Proposal
                Period”) and shall accordingly, within the Proposal Period, make a firm
                and definite offer in writing (“Offer Notice”) to the Transferring
                Party.  The Offer Notice shall contain the terms of the offer,
                including as to price, and shall also indicate whether the offer
                is for
                purchase of all or part of the Sale
                Interest.

            

    

    

    
      	
               

            	
              (ii)

            	
              In
                the event more than one of the Non Transferring Parties send Offer
                Notices, then the Transferring Party shall be entitled to consider
                only,
                what it considers, the most favorable, beneficial and commercially
                acceptable offer(s) and shall negotiate such offer with the concerned
                Non
                Transferring Party or Parties, as the case may
                be.

            

    

     

    
 

    
      
        
        

      

      
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              (iii)

            	
              Subject
                to sub-clause (v) below, in the event the Transferring Party arrives
                at an
                agreement with one or more of the Non Transferring Parties, then
                the
                agreement for sale of the Sale Interest shall stand completed and
                the
                Transferring Party shall transfer and complete the sale of the
                Participating Interest to such Non Transferring Party(ies) within
                the
                period specified in Article 13.3.2 below and in the event a Non
                Transferring Party fails to complete such transfer within such period,
                the
                Transferring Party shall be entitled to transfer and sell the
                Participating Interest to a third
                party.

            

    

    

    
      	
               

            	
              (iv)

            	
              In
                the event the terms offered in the Offer Notices are not acceptable
                to the
                Transferring Party, then the Transferring Party shall be entitled
                to
                negotiate with a third party to explore whether it can obtain better
                terms
                and if the Transferring Party then receives a Third Party Offer,
                the
                Transferring Party shall issue a Sale Notice in terms of Article
                13.3.1
                A(i) above to the Non Transferring Parties and allow them an opportunity,
                within 15( fifteen) days of the aforesaid Sale Notice, to match such
                Third
                Party Offer and in the vent the Non Transferring Parties match such
                Third
                Party Offer, then the agreement for sale shall be completed and the
                entire
                or part of the Sale Interest, as the case may be, shall be sold to
                such
                Non Transferring Parties in  the  proportion that
                their respective Participating Interests bear to the
                total        that they may agree,
                and the balance Sale Interest, if any, may be transferred to such
                third
                Party that has made the Third Party Offer.  This sale to the Non
                Transferring Parties shall be completed within the period specified
                in
                Article 13.3.2 below and in the event a Non Transferring Party fails
                to
                complete such transfer within such period, the Transferring Party
                shall be
                entitled to accept the Third Party Offer and complete the sale on
                the same
                terms and conditions as those set out in the Third Party
                Offer.

            

    

    

    
      	
               

            	
              (v)

            	
              In
                the event the Transferring Party arrives at an understanding on the
                terms
                and conditions with one or more of the Non Transferring Parties (“Final
                Non Transferring Parties”) for sale of the entire or part of the Sale
                Interest, then, before completing the agreement with such Non Transferring
                Party or Parties, the Transferring Party shall be entitled to negotiate
                with a third party to explore whether it can obtain better terms
                and if
                the Transferring Party then receives a Third Party Offer, the Transferring
                Party shall issue a Sale Notice in terms of Article 13.3.1 A(i) above
                to
                the Final Non Transferring Parties and allow them an opportunity,
                within
                15 (fifteen) days of the aforesaid Sale Notice, to match such Third
                Party
                Offer and in the event the Final Non Transferring Parties match such
                Third
                Party Offer, then the agreement for sale shall be complete and the
                entire
                or part of the Sale Interest, as the case  may be, shall be sold
                to such Final Non Transferring Parties in the proportion that their
                respective Participating Interests bear to the total Participating
                Interests of the Non Transferring Parties or in such other proportion
                that
                they may agree, and the balance Sale Interest, if any, may be transferred
                to such third Party that has made the Third Party Offer. This sale
                to the
                Final Non Transferring Parties shall be completed within the period
                specified in Article 13.3.2 below and in the event a Final Non
                Transferring Party fails to complete such transfer within such period,
                the
                Transferring Party shall be entitled to accept the Third Party Offer
                and
                complete the sale on the same terms and conditions as those set out
                in the
                Third Party Offer.

            

    

    

    
      	
               

            	
              (vi)

            	
              Any
                transfer of Participating Interest to a third party in terms of this
                Article 13.3.1B shall be at a price and on other commercial terms
                no more
                favorable to the third

            

    

    
      
        
        

      

      
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    party
      than the price and terms of proposals received from the Non Transferring Parties
      or Final Non Transferring Parties, as the case may be.

    

    
      	
              13.3.2

            	
              Any
                transfer of Participating Interest by a Transferring Party to a Third
                Party or to a Non Transferring Party or to a Final Non Transferring
                Party,
                as the case may be, in terms of Article 13.3.1 above, shall be completed,
                other than such time period as may be required for receipt of Government
                approvals, within 120 days following the end of the Offer Period/
                Proposal
                Period (as the case may be).

            

    

    

    
      	
              13.3.3

            	
              Notwithstanding
                anything contained herein, any Party whose Participating Interest
                is being
                carried by any other Party shall not have any right of first refusal
                as
                per the terms of this Article 13.3 against any other
                Party.

            

    

    

    
      	
              13.3.4

            	
              The
                Parties intend to apply the principles of Article 13.3in good faith
                and be
                bound by the spirit as well as the terms thereof and, in particular
                but
                without limitation a fair cash equivalent shall be placed on any
                non-cash
                consideration offered to the Transferee by an other Party or a third
                party, supported, if requested by any Party, by a report from an
                internationally recognized independent chartered
                accountant

            

    

    

    
      	
              13.4

            	
              No
                assignment, sale or transfer of Participating Interest shall be effective
                unless the assignee/transferee shall

            	
              have
                agreed in writing to be bound by all the terms and provisions contained
                in
                this Agreement and the Contract which shall include the assumption
                of all
                the assigning Party's rights and obligations under this Agreement
                and the
                Petroleum Exploration License (PEL) on and from the date of the
                Assignment.

            

    

    

    
      	
              13.5  

            	
              Each
                Party and third party where relevant, shall bear its own costs related
                to
                the transaction of sale and purchase of Participating Interest as
                envisaged in this Article 13.     All
                costs,   charges, fees, taxes, cess, duties etc. leviable
                on the sale, transfer and/or assignment provided for in this Article
                13,
                including  notaries and registration fees, tax or other expense
                of whatsoever kind and nature, shall be the to the account of the
                buyer of
                the Participating Interest.

            

    

    

    
      	
              13.6

            	
              All
                the Parties shall execute and deliver all documents, do and perform
                all
                acts and things necessary and appropriate to validly effect the sales
                and
                assignments provided in this Article
                13.

            

    

    

    
      	
              13.7

            	
              Nothing
                contained in this Article 13 shall prevent a Party from mortgaging,
                pledging, charging or otherwise encumbering all or part of its interest
                in
                the

            	
              Contract
                Area and in and under this Agreement for the purpose of security
                relating
                to raising of finance so as to meet its obligations under this Agreement
                provided that:

            

    

    

    (1)           such
      Party shall remain liable for all obligations relating to such
      interest;

    
      	
               

            	
              (2)

            	
              the
                encumbrance shall be subject to any necessary approval of the
                Government;

            

    

    
      	
               

            	
              (3)such
                Party shall  ensure that any such mortgage, pledge, charge or
                encumbrance shall be expressed to be without prejudice and subject
                to the
                provisions  of this
                Agreement.

            

    

    
      
        
        

      

      
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              (4)

            	
              any
                encumbrance sought to be created shall be expressly subordinated
                to the
                rights or the other Parties under the Contract and this
                Agreement

            

    

    

    
      	
              13.8

            	
              Notwithstanding
                any other provision of Article 13, an assignment or transfer shall
                not be
                made where the Participating Interest to be retained by the proposed
                assignor or the percentage interest of assignee shall be less than
                ten per
                cent (10%) of the total Participating Interest of all the Parties
                or as
                provided under the Contract, except where the Government, on the
                recommendations of the Management Committee may, in special circumstances,
                so permit.

            

    

    

     

    
      
        
        

      

      
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    ARTICLE
      14 - FORCE MAJEURE

    

    

    
      	
              14.1

            	
              Any
                non-performance or delay in performance by any Party hereto of any
                of its
                obligations under this Agreement or in fulfilling any condition of
                any
                license or lease granted to such Party, or in meeting any requirement
                of
                the Act, the Rules or any license or lease issued thereunder, shall,
                except for the payment of money due under this Agreement or under
                the Act
                and the Rules or any law, be excused if, and to the extent that,
                such
                non-performance or delay in performance is caused by Force Majeure
                as
                defined in this Article.

            

    

    

    
      	
              14.2

            	
              For
                the purpose of this Agreement, the term Force Majeure means any cause
                or
                event, other than the non-availability of funds, whether similar
                to or
                different from those enumerated herein, lying beyond the reasonable
                control of, and unanticipated or enforceable by, and not brought
                about at
                the instance of, the Party claiming to be affected by such event,
                or
                which, if anticipated or foreseeable, could not be avoided or provided
                for, and which has caused the non-performance or delay in performance.
                Without limitation to the generality of the foregoing, the term Force
                Majeure shall include natural phenomena or calamities, earthquakes,
                typhoons, fires, wars declared or undeclared, hostilities, invasions,
                blockades, riots, strikes, insurrection and civil
                disturbance.

            

    

    

    
      	
              14.3

            	
              Where
                a Party is claiming suspension of its obligations on account of Force
                Majeure, it shall promptly, but in no case later than seven (7) days
                after
                the occurrence of the event of Force Majeure, notify the other Parties
                in
                writing giving full particulars of the Force Majeure, the estimated
                duration thereof, the obligations affected and the reasons for its
                suspension.

            

    

    

    
      	
              14.4

            	
              A
                Party claiming Force Majeure shall exercise reasonable diligence
                to seek
                to overcome the Force Majeure event and to mitigate the effects thereof
                on
                the performance of its obligations under this Agreement provided,
                however,
                that the settlement of strikes or differences with employees shall
                be
                within the discretion of the Party having the difficulty. The Party
                affected shall promptly notify the other Parties as soon as the Force
                Majeure event has been removed and no longer prevents it from complying
                with the obligations which have been suspended and shall thereafter
                resume
                compliance with such obligations as soon as
                possible.

            

    

    

    
      	
              14.5

            	
              The
                Party asserting the claim of Force Majeure shall have the burden
                of
                proving that the circumstances constitute valid grounds of Force
                Majeure
                under this Article and that such Party has exercised reasonable diligence
                and efforts to remedy the cause of any alleged Force
                Majeure.

            

    

    

    
      	
              14.6

            	
              Where
                Party is prevented from exercising any rights or performing any
                obligations under this Agreement due to Force Majeure, the time for
                the
                performance of the obligations affected thereby and for performance
                of any
                obligation or the exercise of any right dependent thereon, and the
                term of
                any Exploration Phase or this Agreement, may be extended by such
                additional period as may be agreed between the Parties. In case of
                difference, the decision of operator shall be final and
                binding.

            

    

     

    
 

    
      
        
        

      

      
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              14.7

            	
              Notwithstanding
                anything contained hereinabove, if an event of Force Majeure occurs
                and is
                likely to continue for a period of thirty (30) days, the Parties
                shall
                meet to discuss the consequences of the Force Majeure and the course
                of
                action to be taken to mitigate the effects thereof or to be adopted
                in the
                circumstances. In case no solution  emerges, matter shall be
                referred for decision by a sole expert in terms of the Contract who
                shall
                decide the matter within three (3) months from the date of acceptance
                to
                act as sole expert.

            

    

    

    

    

    
      
        
        

      

      
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    ARTICLE
      15 - OPERATIONS BY LESS THAN ALL PARTIES

    

    
      	
              15.1

            	
              Limitation
                on Applicability

            

    

    

    
      	
               

            	
              (A)

            	
              Subject
                to the Contract, any operation beyond the Minimum Work Obligation
                can be
                proposed as a Joint Operation.  In the event of difference of
                opinion among the Parties for conducting the operation as Joint Operation,
                the same may be conducted as Exclusive Operation by the willing Parties
                subject to provisions of Article 15.  All operations shall be
                conducted as Joint Operations under Article 5, or as Exclusive Operations
                under this Article. No Exclusive Operation shall be conducted which
                conflicts with Joint Operations.  Determination as to whether or
                not a conflict exists shall be made by the unanimous vote of the
                Operating
                Committee.  If the Operating Committee cannot agree, the matter
                can be referred to a sole expert or
                arbitration.

            

    

    

    
      	
               

            	
              (B)

            	
              Except
                as otherwise herein provided, operations which are required to fulfil
                the
                Minimum Work Obligations must be proposed and conducted as Joint
                Operations under Article 5, and shall not be proposed or conducted
                as
                Exclusive  Operations under this
                Article.

            

    

    

    
      	
               

            	
              (C)

            	
              No
                Party may propose or conduct an Exclusive Operation under this Article,
                unless and until such Party has properly exercised its right to propose
                an
                Exclusive Operation pursuant to this
                Agreement.

            

    

    

    15.2           Procedure
      to Propose Exclusive Operations

    

    
      	
              (A)  

            	
              Subject
                to Article 15.1, if any Party proposes to conduct an Exclusive Operation,
                such Party shall give notice of the proposed operation to all
                Parties.  Such notice shall specify that such operation is
                proposed as an Exclusive Operation, the work to be performed, the
                location, the objectives, and estimated cost of such
                operation.

            

    

    

    
      	
              (B)  

            	
              Any
                Party entitled to receive such notice shall have the right to participate
                in the proposed operation.

            

    

    

    
      	
               

            	
              (1)

            	
              For
                proposals to deepen, test, complete, sidetrack, plug back, recomplete
                or
                rework involving the use of a drilling rig that is standing by in
                the
                Contract Area, any such Party wishing to exercise such right must
                so
                notify Operator within twenty-four (24) hours after receipt of the
                notice
                proposing the Exclusive Operation.

            

    

    

    
      	
               

            	
              (2)

            	
              For
                proposals to develop a Discovery, any Party wishing to exercise such
                right
                must so notify the Party proposing to develop within twenty (20)
                days
                after receipt of the notice proposing the Exclusive
                Operation.

            

    

     

    
 

    
      
        
        

      

      
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              (3)

            	
              For
                all other proposals, any such Party wishing to exercise such right
                must so
                notify Operator within ten (10) days after receipt of the notice
                proposing
                the Exclusive Operation.

            

    

    

    
      	
              (C)  

            	
              Failure
                of a Party to whom a proposal notice is delivered to properly reply
                within
                the period specified above shall constitute an election by that Party
                not
                to participate in the proposed
                operation.

            

    

    

    
      	
              (D)  

            	
              If
                all Parties properly exercise their rights to participate, then the
                proposed operation shall be conducted as a Joint Operation.  The
                Operator shall commence such Joint Operations as promptly as practicable
                and conduct it with due diligence.

            

    

    

    
      	
              (E)  

            	
              If
                less than all Parties entitled to receive such proposal notice properly
                exercise their rights to participate,
                then:

            

    

    

    
      	
               

            	
              (1)

            	
              The
                Party proposing the Exclusive Operation, together with any other
                Consenting Parties, shall have the right exercisable for the applicable
                notice period set out in Article 15.2(B), to instruct Operator (subject
                to
                Article 15.9(G)) to conduct the Exclusive
                Operation.

            

    

    

    
      	
               

            	
              (2)

            	
              If
                the Exclusive Operation is conducted, the Consenting Parties shall
                bear
                the sole liability and expense of such Exclusive Operation with each
                Consenting Party bearing a fraction of such liability and expense,
                the
                numerator of which is such Consenting Party's Participating Interest
                as
                stated in Article 3.1 and the denominator of which is the aggregate
                of the
                Participating Interests of the Consenting Parties as stated in Article
                3.1, or in such other proportion totaling one hundred percent (100%)
                of
                such liability and expense as the Consenting Parties may
                agree.

            

    

    

    
      	
               

            	
              (3)

            	
              If
                such Exclusive Operation has not been commenced within one hundred
                and
                eighty (180) days (excluding any extension specifically agreed by
                all
                Parties or allowed by the force majeure provisions of Article 14),
                the
                right to conduct such Exclusive Operation shall terminate.  If
                any Party still desires to conduct such Exclusive Operation, written
                notice proposing such operation must be resubmitted to the Parties
                in
                accordance with Article 5, as if no proposal to conduct an Exclusive
                Operation had been previously made.

            

    

    

    
      	
              15.3

            	
              Responsibility
                for Exclusive Operations

            

    

    

    
      	
               

            	
              (A)

            	
              The
                Consenting Parties shall bear in accordance with the Participating
                Interests agreed under Article 15.2(E) the entire cost and liability
                of
                conducting an Exclusive Operation and shall indemnify the Non-Consenting
                Parties from any and all costs and liabilities incurred incident
                to such
                Exclusive Operation (including but not limited to all costs, expenses
                or
                liabilities  for environmental, consequential, punitive or any
                other  similar indirect damages or losses arising from business
                interruption, reservoir or formation damage, inability to produce
                petroleum, loss of profits, pollution control and environmental
                amelioration or rehabilitation) and shall keep the Contract Area
                free and
                clear of all liens and encumbrances of every kind created by or arising
                from such Exclusive Operation.

            

    

     

    
 

    
      
        
        

      

      
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          47

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (B)

            	
              Notwithstanding
                Article 15.3(A) each Party shall continue to bear its Participating
                Interest share of the cost and liability incident to the operations
                in
                which it participated, including but not limited to plugging and
                abandoning and restoring the surface location, but only to the extent
                those costs were not increased by the Exclusive
                Operation.

            

    

    

    
      	
               15.4

            	
              Consequences
                of Exclusive Operations

            

    

    

    
      	
               

            	
              (A)

            	
              With
                regard to any Exclusive Operation, for so long as a Non-Consenting
                Party
                has the option to reinstate the rights it relinquished under Article
                15.4(B) below, such Non-Consenting Party shall be entitled to have
                access
                concurrently with the Consenting Parties, to all data and other
                information relating to such Exclusive Operation, other than G&G Data
                obtained in an Exclusive Operation. If a Non-Consenting Party desires
                to
                receive and acquire the right to use such G&G data, then such
                Non-Consenting Party shall have the right to do so by paying to the
                Consenting Parties its Participating Interest share as set out in
                Article
                3.1 of the cost incurred in obtaining such G&G
                Data.

            

    

    

    
      	
               

            	
              (B)

            	
              With
                regard to any Exclusive Operations and subject to Article
                15.4(C)  and Article 15.7 below, each Non-Consenting Party shall
                be deemed to have relinquished to the Consenting Parties, and the
                Consenting Parties shall be deemed to own, in proportion to their
                respective Participating Interests in any Exclusive
                Operation:

            

    

    

    

    
      	
               

            	
              (1)

            	
              All
                of each such Non-Consenting  Party's right to participate in
                further operations in the well or deepened or sidetracked portion
                of a
                well in which the Exclusive Operation was conducted and any Discovery
                made
                or appraised in the course of such Exclusive Operation;
                and

            

    

    

    
      	
               

            	
              (2)

            	
              All
                of each  such Non-Consenting Party's right pursuant to the
                Contract to take and dispose of Hydrocarbons produced and
                saved:

            

    

    

    
      	
               

            	
              (a)

            	
              From
                the well or deepened or sidetracked portion of a well in which such
                Exclusive Operation was conducted,
                and

            

    

    

    
      	
               

            	
              (b)

            	
              From
                any wells drilled to appraise or develop a Discovery made or appraised
                in
                the course of such Exclusive
                Operation.

            

    

    

    
      	
               

            	
              (C)

            	
              A
                Non-Consenting Party shall have the following and only the following
                options to reinstate the rights it relinquished pursuant to Article
                15.4(B):

            

    

     

    
 

    
      
        
        

      

      
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          48

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (1)

            	
              If
                the Consenting Parties decide to appraise a Discovery made in the
                course
                of an Exclusive Operation, the Consenting Parties shall submit to
                each
                Non-Consenting Party shall submit to each Non-Consenting Party the
                approved appraisal program.  For thirty (30) days (or
                forty-eight (48) hours if the drilling rig which is to be used in
                such
                appraisal program is standing by in the Contract Area) from receipt
                of
                such appraisal program, each Non-Consenting Party shall have option
                to
                reinstate the rights it relinquished pursuant to Article 15.4(B)
                and to
                participate in such appraisal
                program.  The  Non-Consenting  Party may
                exercise such option by notifying Operator within the period specified
                above that such Non-Consenting Party agrees to bear its Participating
                Interest share of the expense and liability of such appraisal program,
                to
                pay the lump sum amount as set out in Article 15.5(A) and to pay
                the Cash
                Premium as set out in Article
                15.5(B).

            

    

    

    
      	
               

            	
              (2)

            	
              If
                the Consenting Parties decide to develop a Discovery made or appraised
                in
                the course of an Exclusive Operation, the Consenting Parties shall
                submit
                to the Non-Consenting Parties a Development Plan substantially in
                the form
                intended to be submitted to the Government under the
                Contract.  For sixty (60) days from receipt of such Development
                Plan or such lesser period of time prescribed by the Contract, each
                Non-Consenting Party shall have the option to reinstate the rights
                it
                relinquished pursuant to Article 15.4(B) and to participate in such
                Development Plan.  The Non-Consenting Party may exercise such
                option by notifying the Party proposing to act as Operator  for
                such Development Plan within the period specified above that such
                Non-Consenting party agrees to bear its Participating Interest share
                of
                the liability and expense of such Development Plan and such future
                operating and producing costs, to pay the lump sum amount as set
                out in
                Article 15.5(A) and to pay the Cash premium as set out in Article
                15.5(B).

            

    

    

    
      	
               

            	
              (D)

            	
              If
                a Non-Consenting Party does not properly and in a timely manner exercise
                such option, including paying in a timely manner in accordance with
                Article 15.5 all lump sum amounts and Cash Premiums,if any, due to
                the
                Consenting Parties, such Non-Consenting  Party shall have
                forfeited the options as set out in Article 15.4(C) and the right
                to
                participate in the proposed program, unless such program, plan or
                operation is materially modified or expanded. (In which case a new
                notice
                and option shall be given to such Non-Consenting Party under Article
                15.4(C)).

            

    

    

    
      	
               

            	
              (E)

            	
              A
                Non-Consenting Party shall become a Consenting Party with regard
                to an
                Exclusive Operation at such time as the Non-Consenting Party gives
                proper
                notice pursuant to Article 15.4(C); provided that such Non-Consenting
                Party shall in no way be deemed to be entitled to any lump sum amount
                Cash
                Premium paid incident to such Exclusive Operation.  The
                Participating Interest of such  Non-Consenting  Party
                in such Exclusive Operation shall be its Participating Interest set
                out in
                Article 3.1.  The Consenting Parties shall contribute in
                proportion to their respective Participating Interests in such Exclusive
                Operation, the Participating Interest of the Non-Consenting party.
                If all
                Parties participate in the proposed operation, then
                such  operation shall be conducted as a Joint Operation pursuant
                to Article 5.

            

    

     

    
 

    
      
        
        

      

      
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          49

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (F)

            	
              If
                after the expiry of the period in which a Non-Consenting Party may
                exercise its option to participate in a Development Plan, the Consenting
                Parties desire to proceed with the said Development Plan, the Party
                chosen
                by the Consenting Parties to act as Operator for such development
                shall
                give notice to the Government under the appropriate provision of
                the
                Contract requesting a meeting to advise the Government that the Consenting
                Parties consider Discovery to be a Commercial
                Discovery.  Following such meeting such Operator for such
                development shall apply for Development Area. Unless the Development
                Plan
                is materially modified or expanded prior to the commencement of operations
                under such plan, each Non-Consenting Party to such Development Plan
                shall
                not participate in such Development  Area covering such
                development  and shall forfeit all interests in such Development
                Area.  Such Non-Consenting Party shall be deemed to have
                withdrawn from this  Agreement to the extent it relates to such
                Development Area, even if the Development Plan is modified or expanded
                subsequent to the commencement of operations under such Development
                Plan
                and shall be further deemed to have forfeited any right to participate
                in
                the construction and ownership of facilities outside such Development
                Area
                designed solely for the use of such Development
                Area.

            

    

    

    
      	
              15.5

            	
              Premium
                to Participate in Exclusive
                Operations

            

    

    

    
      	
               

            	
              (A)

            	
              Within
                thirty (30) days of the exercise of its option under Article 15.4(C),
                each
                such Non-Consenting Party shall pay in immediately available funds
                to the
                Consenting Parties who took the risk of such Exclusive Operations
                in
                proportion to their respective Participating Interests in such Exclusive
                Operations a lump sum amount payable in the currently designated
                by such
                Consenting Parties. Such lump sum amount shall be equal to such
                Non-Consenting Party's Participating Interest share of all liabilities
                and
                expenses, including overhead, that were incurred in Exclusive Operations
                relating to the Discovery, or Well, as the case may be, in which
                the
                Non-Consenting Party desires to reinstate the rights it relinquished
                pursuant to Article 15.4(B), and that were not previously paid by
                such
                Non-Consenting Party.

            

    

    

    
      	
               

            	
              (B)

            	
              In
                addition to Article 15.5(A), if a Cash Premium is due, then within
                thirty
                (30) days of the exercise of its option under Article 15.4(C) each
                such
                Non-Consenting Party shall pay in immediately available funds, in the
                currency designated  by the Consenting parties who took the risk
                of such Exclusive  Operations, to such Consenting Parties in
                proportion to their respective Participating Interests a Cash Premium
                equal to the total of:

            

    

    

    
      	
               

            	
              (1)

            	
              Two
                hundred percent (200%) of such Non-Consenting Party's Participating
                Interest share of all liabilities and expenses, including overhead,
                that
                were incurred in any Exclusive Operations relating to the obtaining
                of the
                portion of the G&G Data which pertains to the Discovery, and that were
                not previously paid by such Non-Consenting Party;
                plus

            

    

     

    
 

    
      
        
        

      

      
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          50

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (2)

            	
              Four
                Hundred percent (400%) of such Non-Consenting Party's Participating
                Interest share of all liabilities and expenses,
                including  overhead, that were incurred  in any
                Exclusive Operations relating to the drilling, deepening, testing,
                completing, sidetracking, plugging back, re-completing and reworking
                of
                the Exploration Well which made the Discovery in which the Non-Consenting
                Party desires to reinstate the rights it relinquished pursuant to
                Article
                15.4(B), and that were not previously  paid by such
                Non-Consenting party; plus

            

    

    

    
      	
               

            	
              (3)

            	
              Two
                Hundred percent (200%) of such Non-Consenting Party's Participating
                Interest share of all liabilities and expenses, including overhead,
                that
                were incurred in any Exclusive Operations relating to the drilling,
                deepening, testing, completing, sidetracking, plugging back, re-completing
                and reworking of the Appraisal Well(s) which delineated the Discovery
                in
                which the Non-Consenting Party desires to reinstate the rights it
                relinquished pursuant to Article 15.4(B), and that were not previously
                paid such Non-Consenting Party;

            

    

    

    
      	
              15.6

            	
              Order
                of Preference of
                Operations

            

    

    

    
      	
               

            	
              (A)

            	
              Except
                as otherwise specifically provided in this Agreement, if any Party
                desires
                to propose the conduct of an operation that will conflict with an
                existing
                proposal for an Exclusive Operation, such Party shall have the right
                exercisable for five (5) days, or twenty-four (24) hours if the drilling
                rig to be used is standing by in the Contract Area, from receipt
                of the
                proposal for the Exclusive Operation,  to deliver to all Parties
                entitled to participate in the proposed operation such Party's alternative
                proposal.  Such alternative proposal shall contain the
                information required under Article
                15.2(A).

            

    

    

    
      	
               

            	
              (B)

            	
              Each
                Party receiving such proposals shall elect by delivery of notice
                to
                Operator within the appropriate response period set out in Article
                15.2(B)
                to participate in one of the competing proposals.  Any party not
                notifying Operator within the response period shall be deemed to
                have
                voted against the proposal.

            

    

    

    
      	
               

            	
              (C)

            	
              The
                proposal receiving the largest aggregate Participating Interest vote
                shall
                have priority over all other competing proposals.  In the case
                of a tie vote, the Operator shall choose among the proposals receiving
                the
                largest aggregate Participating Interest vote.  Operator shall
                deliver notice of such result to all Parties entitled to participate
                in
                the operation within five (5) days of the end of the response period,
                or
                twenty-four (24) hours if the drilling rig to be used is standing
                by in
                the Contract Area.

            

    

     

    
 

    
      
        
        

      

      
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          51

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (D)

            	
              Each
                Party shall then have two (2) days (or twenty-four (24) hours if
                the
                drilling rig to be used is standing by in the Contract Area) from
                receipt
                of such notice to elect by delivery of notice to Operator whether
                such
                party will participate in such Exclusive Operation, or will relinquish
                its
                interest pursuant to Article 15.4(B).  Failure by a Party to
                deliver such notice within such period shall be deemed an election
                not to
                participate in the prevailing
                proposal.

            

    

    

    

    
      	
              15.7

            	
              Stand
                By Costs

            

    

    

    
      	
               

            	
              (A)

            	
              When

            	
              an
                operation has been performed, all tests have been conducted and the
                results of such tests furnished to the Parties, stand by costs incurred
                pending response to any Party's notice proposing an Exclusive Operation
                for deepening, testing, sidetracking, completing, plugging back,
                re-completing, reworking or other further operation in such well
                (including the period required under Article 15.6 to resolve competing
                proposals) shall be charged and borne as part of the operation just
                completed.  Stand by costs incurred subsequent to all Parties
                responding, or expiration of the response time permitted, whichever
                first
                occurs, shall be charged to and borne by the Parties proposing the
                Exclusive Operation in proportion to their Participating Interests,
                regardless of whether such Exclusive Operation is actually
                conducted.

            

    

    

    
      	
               

            	
              (B)

            	
              If
                a further operation is proposed while the drilling rig to be utilized
                is
                on location, any Party may request and receive up to five (5) additional
                days after expiration of the applicable response period specified
                in
                Article 15.2(B) within which to respond by notifying Operator that
                such
                party agrees to bear all stand by costs and other costs incurred
                during
                such extended response period Operator may require such Party to
                pay the
                estimated stand by time in advance as a condition to extending the
                response period. If more than one Party requests such additional
                time to
                respond to the notice, stand by costs shall be allocated between
                such
                Parties on a day-to-day basis in proportion in their Participating
                Interests.

            

    

    

    
      	
              15.8

            	
              Deepening,
                Completing, Sidetracking, Plugging Back or
                Re-completing

            

    

    

    If
      the
      Consenting Parties decide to deepen, complete, sidetrack, plug back or
      re-complete an Exclusive Well and such further operation  was not
      included in the original proposal for such Exclusive Well, the Consenting
      Parties shall submit to the Non-Consenting Parties the approved AFE for
      such  further operation.  For thirty (30) days (or
      forty-eight (48) hours if the drilling rig which is to be used in such operation
      is standing by in the Contract Area) from receipt of such AFE, each
      Non-Consenting Party shall have the option to reinstate the rights it
      relinquished pursuant to Article 15.4(B) and to participate in such
      operation.  The Non-Consenting Party may exercise such option by
      notifying the Operator within the period specified above that such
      Non-Consenting Party agrees to bear its Participating Interest share of the
      liability and expense of such further operation, to pay the lump sum amount
      as
      set out in Article 15.5(A).

     

    
 

    
      
        
        

      

      
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          52

        
          

        

      

      
        
        

      

    

    A
      Non-Consenting Party shall not be entitled to reinstate its rights in any other
      type of operation.

    

    
      	
              15.9

            	
              Miscellaneous

            

    

    

    
      	
               

            	
              (A)

            	
              Each
                Exclusive Operation shall be carried out by the Operator on behalf
                of and
                at the expense of the Consenting Parties.  For Exclusive
                Operations, the Consenting Parties shall act as the Operating Committee,
                subject to the provisions of this Agreement applied mutatis mutandis
                to
                such Exclusive Operation and subject to the terms and conditions
                of the
                Contract

            

    

    

    
      	
               

            	
              (B)

            	
              The
                computation of liabilities and expenses incurred in Exclusive Operations,
                including the liabilities and expenses of Operator for conducting
                such
                operations, shall be made in accordance with the principles set out
                in the
                Accounting Procedure.

            

    

    

    
      	
               

            	
              (C)

            	
              Operator
                shall maintain separate books, financial records and accounts for
                Exclusive Operations which shall be subject to the same rights of
                audit
                and examination as the Joint Account and related records, all as
                provided  in the Accounting Procedure.  Said rights of
                audit and examination shall extend to each of the Consenting Parties
                and
                each of the Non-Consenting Parties so long as the latter are, ore
                may be,
                entitled to elect to participate in such
                operations.

            

    

    

    
      	
               

            	
              (D)

            	
              Operator,
                regardless  of whether it is participating in an Exclusive
                Operation, if it is conducting that Exclusive Operation for the Consenting
                Parties, shall be entitled to request cash advances and shall not
                be
                required to use its own funds to pay any cost and expense and shall
                not be
                obliged to commence or continue Exclusive Operations until cash advances
                requested have been made, and the Accounting Procedure shall apply
                to
                Operator in respect of any Exclusive Operations conducted by
                it.

            

    

    

    
      	
               

            	
              (E)

            	
              Should
                the submission of a Development Plan be approved in accordance with
                Article 5, or should any Party propose a development in accordance
                with
                Article 15, with either proposal not calling for the conduct of additional
                appraisal drilling, and should any Party wish to drill an additional
                Appraisal Well prior to development, then the Party proposing the
                Appraisal Well as an Exclusive Operation shall be entitled to proceed
                first, but without the right to future reimbursement of costs or
                to any
                Premium,   pursuant to Article 15.5.  If, as the
                result of drilling such Appraisal Well as an Exclusive Operation,
                the
                Party proposing to apply for a Development Area decides to not develop
                the
                reservoir, then each Non-Consenting Party who voted in favour of
                such
                Development Plan prior to the drilling of such Appraisal Well shall
                pay to
                the Consenting Parties the amount such Non-Consenting Party would
                have
                paid had such Appraisal Well been drilled as a Joint
                Operation.

            

    

    

    
      	
               

            	
              (F)

            	
              In
                the case of any Exclusive Operation for deepening, testing, completing,
                sidetracking, plugging back, re-completing or reworking, the Consenting
                Parties shall be permitted to use, free of cost, all casing, tubing
                and
                other equipment in the well, that is not needed for Joint Operations,
                but
                the ownership of all such equipment shall remain unchanged.  On
                abandonment of a Well after such Exclusive Operation, the Consenting
                Parties shall account for all such equipment to the Parties who shall
                receive their respective Participating Interest shares, in value,
                less the
                cost of salvage.

            

    

     

    
 

    
      
        
        

      

      
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          53

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (G)

            	
              If
                the Operator is a Non-Consenting Party to an Exclusive Operation
                to
                develop a Discovery, then subject to obtaining any necessary Government
                approvals the Operator may resign, but in any event shall resign
                on the
                request of the Consenting Parties, as Operator for the Development
                Area
                for such Discovery and the Consenting Parties shall select a Party
                to
                serve as Operator.

            

    

    
      
        
        

      

      
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          54

        
          

        

      

      
        
        

      

    

     

    

    ARTICLE
      16 - INSURANCE AND INDEMNIFICATION

    

    
      	
              16.1

            	
              nsurance

            

    

    

    
      	
              16.1.1

            	
              The
                Operator shall, for the benefit and protection of the Parties hereto,
                and
                in accordance with the requirement of Contract and in accordance
                with the
                Good International Petroleum Industry Practices obtain such insurance
                with
                reputable insurers upon reasonable and competitive terms from the
                Joint
                Account in relation to Petroleum Operations as may be required under
                the
                Contract, applicable laws, rules and regulations together with such
                other
                insurances which the Operator may determine necessary for the Joint
                Operations.  Such insurance policies shall include the
                Government as additional insured and shall waive subrogation against
                the
                Government.

            

    

    

    
      	
              16.1.2

            	
              The
                said insurance shall, without prejudice to the generality of
                foregoing,  cover the following as specifically required under
                the Article 24.1.1 of the Contract:

            

    

    

    
      	
               

            	
              a)

            	
              Loss
                or damage to all installations, equipment and other assets for so
                long as
                they are used in or in connection with Petroleum Operations provided,
                however, that if for  any reason the Contractor fails to insure
                any such installations, equipment or assets, it shall replace any
                loss
                thereof or repair any damage caused
                thereto;

            

    

    

    
      	
               

            	
              b)

            	
              Loss,
                damage or injury caused by pollution in the course of or as a result
                of
                Petroleum Operations;

            

    

    

    
      	
               

            	
              c)

            	
              Loss
                of property or damage or bodily injury suffered by any third party
                in the
                course of or as a result of Petroleum Operations for which the Contractor
                may be liable;

            

    

    

    
      	
               

            	
              d)

            	
              Any
                claim for which the Government may be liable relating to the loss
                of
                property or damage or bodily injury suffered by any third party in
                the
                course of or as a result of Petroleum Operations for which the Contractor
                is liable to indemnify the Government, or the State
                Government;

            

    

    

    
      	
               

            	
              e)

            	
              With
                respect to Petroleum Operations offshore, the cost of removing wrecks
                and
                cleaning up operations following any accident in the course of or
                as a
                result of Petroleum Operations;

            

    

    

    
      	
               

            	
              f)

            	
              The
                Contractor's and/or the Operator's liability to its employees engaged
                in
                Petroleum Operations.

            

    

     

    
 

    
      
        
        

      

      
        Page
          55

        
          

        

      

      
        
        

      

    

    
      	
              16.1.3

            	
              The
                Operator shall duly file within time all claims with respect to insurance
                arranged and maintained by the Operator and shall take all necessary
                and
                proper steps to collect the
                proceeds.

            

    

    

    
      	
              16.1.4

            	
              The
                Operator shall at all times require its Subcontractors engaged in
                the
                Joint Operations under this Agreement to obtain and maintain all
                such
                insurances pertaining to such work as they may be required to carry
                by
                virtue of any applicable law or regulation, Contract  and such
                other  insurances as the Operator may deem
                advisable.

            

    

    

    
      	
              16.1.5

            	
              Each
                Party may for its own account and at its own expense, obtain such
                insurance pertaining to the Joint Operations conducted and materials
                acquired under this Agreement as it may deem advisable, provided,
                however,
                that obtaining of such insurance shall not in any way directly interfere
                with Operator's placement or insurance for the Joint Account in accordance
                with the terms of this Article hereof.  The Operator shall use
                its best efforts to facilitate, in cooperation with the Non- Operator
                Party, the orderly settlement of claims by their respective
                insurers.

            

    

    

    
      	
              16.1.6

            	
              All
                damages, losses and liabilities incurred in the Joint Operations
                which are
                not recoverable from insurance procured for the Joint Account under
                this
                Article shall be charged to the Joint
                Account.

            

    

    

    
      	
              16.1.7

            	
              Operator
                shall supply a copy of all insurance to all the Parties and continue
                to
                supply all the relevant information in this regard to the Parties,
                and
                keep all insurance valid during the course of Petroleum Operations,
                provided such insurance is available and approved by the Operating
                Committee. In the event Operator fails to procure requisite insurance
                under this Article, Operator shall be liable for all risk and
                consequences.

            

    

    

    
      	
              16.1.8

            	
              Subject
                to Article 4.7 of the Contract, the Contractor shall indemnify, defend
                and
                hold the Government and State Government harmless against all claims,
                losses, and damages of any nature whatsoever, including, without
                limitation, claims for loss or damage to property or injury or death
                to
                persons caused by or resulting from any Petroleum Operation conducted
                by
                or on behalf of the Contractor.

            

    

    

    

    
      
        
        

      

      
        Page
          56

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      17 - DISPOSITION OF PRODUCTION

    

    
      	
               

            	
              17.1

            	
              Subject
                to the provisions hereof, each Party shall directly own and receive
                in
                kind its Participating Interest share of Contractor's entitlement
                of each
                grade and quality of all Petroleum produced and saved from the Contract
                Area and subject to relevant Article of the Contract and to procedures
                of
                this Article 17, each Party shall separately and at its own expense
                take
                and dispose of its full share of  Petroleum from the Delivery
                Point.

            

    

    

    
      	
               

            	
              17.2

            	
              Petroleum
                produced and saved from the Contract Area shall delivered  by
                Operator to the Parties at the Delivery
                Point.

            

    

    

    
      	
               

            	
              17.3

            	
              It
                is the intent of the Parties that they shall act in concert and jointly
                as
                sellers and shall therefore, not less than six (6) months prior to
                the
                start of commercial production, in good faith negotiate or authorize
                the
                Operator to negotiate  a Petroleum offtake agreement with
                potential buyers and such Petroleum offtake agreement shall provide,
                among
                other things, detailed terms and procedures
                for:

            

    

    

    
      	
               

            	
              17.3.1

            	
              Short-term
                production forecasts,

            

    

    

    
      	
               

            	
              17.3.2

            	
              Frequency
                of Petroleum nominations and period
                involved,

            

    

    

    
      	
               

            	
              17.3.3

            	
              Ocean
                tanker nominations,

            

    

    

    
      	
               

            	
              17.3.4

            	
              Lifting
                tolerances,

            

    

    

    
      	
               

            	
              17.3.5

            	
              Under
                lift/ Over lift,

            

    

    

    
      	
               

            	
              17.3.6

            	
              Demurrage,
                and

            

    

    

    
      	
               

            	
              17.3.7

            	
              Penalties
                assessable to any Party or the buyer(s) which causes a production
                loss due
                to its failure to perform.

            

    

    

    Notwithstanding
      the above, in the event any of the Parties decides for any reason whatsoever
      not
      to participate jointly and in concert with the remaining Parties, as aforesaid,
      then such dissenting Party shall be entitled to enter into an independent
      Petroleum offtake agreement on its own at its own cost and risk.

    

    

    
      
        
        

      

      
        Page
          57

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      18 - NOTICES

    

    
      	
              18.1

            	
              Any
                notice or other communication provided for in this Agreement shall
                be in
                writing and shall be deemed to have been properly given or delivered
                when
                delivered in person to an authorized representative of the Party
                to whom
                it is addressed, or when sent by air mail, electronic mail, facsimile,
                telex, telegram or cable to the Party at its address hereinafter
                specified:

            

    

    

    
      	
               

            	
              a)

            	
              Managing
                Director

            

    

    Gujarat
      State Petroleum Corporation Ltd.

    Block
      No.15, 2nd
      Floor

    Udyog
      Bhavan, Sector-11

    Gandhinagar
      - 382 011

    Gujarat.

    

    Tel  #                      :           91-79-
      3236371 / 3238651

    Fax
      #                      :           91-79--3236375

    

    b)           President

    Jubilant
      Enpro Ltd.

    1A,
      Sector-16A, Institutional Area

    Noida
      -
      201 301

    Uttar
      Pradesh

    

    Tel  #                      :           91-120-2511005

    Fax
      #                      :           91-120-2511009

    

    c)           President
      / C.E.O

    GeoGlobal
      Resources (India) Inc.

    35-22
      Street NW

    Calgary,
      Alberta

    T2N
      4W7

    

    Tel
      #                      :           1-403-261-1942

    Fax
      #                      :           1-403-770-7394

    

    and
      shall
      be effective from the date of receipt thereof.

    

    
      	
              18.2

            	
              Any
                Party may from time to time change its address under this Article
                on
                fifteen (15) days notice to the other Party
                (ies).

            

    

    

    

    
      
        
        

      

      
        Page
          58

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      19 - SOLE EXPERT, CONCILIATION AND ARBITRATION

    

    
      	
              19.1

            	
              The
                Parties shall use their best efforts to settle amicably all disputes,
                differences or claims arising out of or in connection with any of
                the
                terms and conditions of this Agreement or concerning the interpretation
                or
                performance thereof.

            

    

    

    
      	
              19.2

            	
              Matters
                which, by the terms of this Agreement, the Parties have agreed to
                refer to
                a sole expert and any  other matters which the Parties may agree
                to so refer, may be referred to  a sole expert who shall be an
                independent and impartial person of international standing with relevant
                qualifications and experience, appointed by agreement between the
                Parties
                and who shall not, by virtue of nationality,
                personal  connection or commercial interest, have a conflict
                between his/ her own interest and his/ her duty as a sole
                expert.  In the event that the Parties fail or are unable, to
                agree on a sole expert within thirty (30) days or such longer period
                as
                may be mutually agreed by Parties, the sole expert shall be appointed
                by a
                body or an institution or an agency or a person, mutually agreed
                by
                Parties.  In case, there is no agreement on the body or an
                institution or an agency or a person for appointing sole expert or
                such
                body or institution or agency or person fails to appoint a sole expert
                within thirty (30) days or such longer period as may be mutually
                agreed by
                Parties, the sole expert shall be appointed by the Chief Justice
                of India
                or by a person authorized by him.  Any sole expert appointed
                shall be acting as an expert and not as an arbitrator and the decision
                of
                the sole expert on matters referred to him/ her shall be final and
                binding
                on the Parties and shall not be subject to
                arbitration.

            

    

    

    
      	
              19.3

            	
              Subject
                to the provisions of this Agreement, the Parties hereby agree that
                any
                controversy, difference, disagreement or claim for damages, compensation
                or otherwise (hereinafter in this Clause referred to as "dispute")
                arising
                between the Parties, which cannot be settled amicably within ninety
                (90)
                days after the dispute arises, may (except for those referred to
                in
                Article 19.2, which may be referred to a sole expert) be submitted
                to
                conciliation  or an arbitral tribunal for final decision as
                hereinafter provided.

            

    

    

    
      	
              19.4

            	
              The
                arbitral tribunal shall consist of three arbitrators.  Each
                Party to the dispute shall appoint one arbitrator and the Party or
                Parties
                shall so advise the other Parties.  The two arbitrators
                appointed by the Parties shall appoint the third
                arbitrator.

            

    

    

    
      	
              19.5

            	
              Any
                Party may, after appointing an arbitrator, request the other Party(ies)
                in
                writing to appoint the second arbitrator.  If such other Party
                fails to appoint an arbitrator within thirty (30) days of receipt
                of the
                written request to do so, such arbitrator may, at the request of
                the first
                Party, be appointed by the applicable Chief Justice or by a person
                authorized by him within thirty (30) days of the date of receipt
                of such
                request, from amongst persons who are not nationals of the country
                of any
                of the Parties to the arbitration
                proceedings.

            

    

    

    
      	
              19.6

            	
              If
                the two arbitrators appointed by or on behalf of the Parties fail
                to agree
                on the appointment of the third arbitrator within thirty (30) days
                of the
                appointment of second arbitrator and if the Parties do not otherwise
                agree, at the request of either Party, the third arbitrator shall
                be
                appointed in accordance with Arbitration and Conciliation Act,
                1996.

            

    

    
      	
              19.7

            	
              If
                any of the arbitrators fails or is unable to act, his successor shall
                be
                appointed by the Party or person who originally appointed such in
                the
                manner set out in this Article as if he was the first
                appointment.

            

    

     

    
 

    
      
        
        

      

      
        Page
          59

        
          

        

      

      
        
        

      

    

    
      	
              19.8

            	
              The
                decision of the arbitral tribunal, and, in the case of difference
                among
                the arbitrators, the decision of the majority, shall be final and
                binding
                upon the Parties.

            

    

    

    
      	
              19.9

            	
              The
                arbitration agreement contained in this Article 19 shall be governed
                by
                the Arbitration and Conciliation Act, 1996 (Arbitration
                Act).  Arbitration proceedings shall be conducted in accordance
                with the rules for arbitration provided in Arbitration Act and the
                United
                Nations Commission on International Trade Law (UNCITRAL) rules may
                apply
                to the extent where corresponding rules are not provided in the
                Act.

            

    

    

    
      	
              19.10

            	
              The
                right to arbitrate disputes under this Agreement shall survive expiry
                or
                the termination of this Agreement.

            

    

    

    
      	
              19.11

            	
              Prior
                to submitting a dispute to arbitration, the Parties may by mutual
                agreement submit the matter for conciliation in accordance with Part
                III
                of the Arbitration and Conciliation Act, 1996.  No arbitration
                proceedings shall be instituted while conciliation proceedings are
                pending
                provided that a Party may  initiate arbitration proceedings in
                the event that dispute has not been resolved by conciliation within
                twenty
                one (21) days of the date of agreement by the Parties to submit such
                dispute to conciliation.

            

    

    

    
      	
              19.12

            	
              The
                venue of the sole expert, conciliation or arbitration proceedings
                pursuant
                to this Article, unless the Parties agree otherwise, shall be New
                Delhi,
                India and shall be conducted in the English language.  Insofar
                as practicable, the Parties shall continue to implement the terms
                of this
                Agreement notwithstanding the initiation of arbitral
                proceeding  before a sole expert, conciliator or arbitral
                tribunal and any pending claim or
                dispute.

            

    

    

    
      	
              19.13

            	
              The
                fees and expenses of a sole expert or conciliator appointed by the
                Parties
                shall be borne equally by the Parties.  The cost and expenses of
                arbitrator appointed by  a Party in accordance with the
                provision of this Article shall be borne by the respective Party
                and the
                cost and expenses of third arbitrator and liability thereof shall
                be at
                the discretion of the arbitrators.

            

    

    

    
      	
              19.13

            	
              Notwithstanding
                anything contrary contracted herein above, in the event of dispute
                among
                Government Company(s) and with the Government, such disputes shall
                be
                settled in accordance with guidelines issued on the subject by Government
                from time to time.

            

    

    

    
      
        
        

      

      
        Page
          60

        
          

        

      

      
        
        

      

    

    

     

    ARTICLE
      20 - APPLICABLE LAW

    

    

    This
      Agreement shall be governed by, construed, interpreted and applied in accordance
      with the  laws of Republic of India, both substantive and procedural.
      The Courts in New Delhi, India, shall have exclusive jurisdiction in all matters
      arising under this Agreement.

    

    

    
      
        
        

      

      
        Page
          61

        
          

        

      

      
        
        

      

    

    

     

    ARTICLE
      21 - RELATIONSHIP OF PARTIES, MUTUAL INDEMNITIES AND NO
      PARTITION

    

    21.1           Several
      Liability

    

    
      	
              21.1.1

            	
              The
                rights, covenants, obligations and responsibilities of the Parties
                pursuant to or arising under this Agreement unless other stated shall
                be
                several to the extent of their respective Participating Interests
                and nor
                joint and several.

            

    

    

    
      	
              21.1.2

            	
              Each
                Party shall be individually responsible for its own covenants, obligations
                and responsibilities to the extent of its Participating Interest
                except as
                herein expressly provided. Subject to Article 15.2 and
                4.9.01,  in the event a claim, demand, action or liability is
                made against or incurred by or demanded from any Party under the
                terms of
                or pursuant to the Contract or this Agreement in excess of its
                Participating  Interest, such Party shall have the right of
                recovery of such  excess by contribution from each of the
                Parties in proportion to their respective Participating
                Interests.

            

    

    

    
      	
              21.1.3

            	
              Further,
                and except as expressly provided in this Agreement, nothing herein
                contained shall be construed to create an association, trust or
                partnership between the Parties.

            

    

    

    
      	
              21.1.4

            	
              No
                Party shall be under the control of, or be the agent of or have a
                right or
                power to bind any other Party  without its express written
                consent, except as herein expressly
                provided.

            

    

    

    21.2           Mutual
      Indemnities

    

    Subject
      to
      the                                provisions
      of this Agreement, each Party shall indemnify and keep indemnified each of
      the
      other Parties from every claim, demand, action, liability or loss resulting
      from
      each and every breach or default by the indemnifying Party of any of its
      obligations under the Agreement.

    

    21.3           No
      Partition

    

    Unless
      unanimously agreed by the Parties no Party shall seek to partition any Joint
      Property, whether by court order or otherwise.

    

    
      
        
        

      

      
        Page
          62

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      22 - GENERAL

    

    22.1           Waiver

    

    
      	
               

            	
              No
                waiver by any Party of any provision of this Agreement, no consent
                to or
                departure therefrom shall be binding unless made expressly and confirmed
                in writing by authorized representatives of the Parties. Further,
                any such
                waiver or consent shall relate only to such matter, non­compliance or
                breach as it expressly relates to and for the purpose for which it
                is
                given and shall not apply to any subsequent or other matter, non
                compliance or breach. No default or delay on the part of either Party
                in
                exercising any rights, power or privilege hereunder shall operate
                as a
                waiver thereof or of any rights or remedies
                hereunder.

            

    

    

    22.2           Amendments

    

    
      	
               

            	
              This
                Agreement may be amended or varied only by an instrument in writing
                executed by authorized representatives of all the
                Parties.

            

    

    

    22.3           Language

    

    The
      English language shall be the language of this Agreement and shall be used
      in
      all communications between the Parties as well as in the Arbitral
      proceedings.

    

    22.4           Conflict
      of Interest

    

    
      	
              22.4.1

            	
              Each
                Party undertakes that it shall avoid any conflict of interest between
                its
                own interests (including the interests of Affiliates) and the interests
                of
                the other Parties in dealing with suppliers, customers and all other
                organizations or individuals doing or seeking to do business with
                the
                Parties in connection with activities contemplated under this
                Agreement.

            

    

    

    22.4.2                      The
      provisions of the preceding paragraph shall not apply to:

    

    
      	
               

            	
              (a)

            	
              A
                Party's performance, which is in accordance with the local preference
                laws
                or policies of the host government;
                or

            

    

    

    
      	
               

            	
              (b)

            	
              A
                Party's acquisition of products or services from an Affiliate, or
                the sale
                thereof to an Affiliate, made in accordance with the terms
                of this
                Agreement.

            

    

    

    22.5           Public
      Announcements

    

    
      	
              22.5.1

            	
              Operator
                shall be responsible for the preparation and release of all public
                announcements and statements regarding this Agreement or the Joint
                Operations; provided that, no public announcement or statement shall
                be
                issued or made unless prior to its release all the Parties have been
                furnished with a copy of such
                statement

            

    

    
      
        
        

      

      
        Page
          63

        
          

        

      

      
        
        

      

    

    or
      announcement and the
      approval                                                                           of
      Parties has been obtained. Where a public announcement or statement becomes
      necessary or desirable because of danger to or loss of life, damage to property
      or pollution as a result of activities arising under this Agreement, Operator
      is
      authorized to issue and make such announcement or statement, without prior
      approval of the Parties, but shall promptly furnish all the Parties with a
      copy
      of such announcement or statement.

    

    
      	
              22.5.2

            	
              If
                a Party wishes to issue or make any public announcement or statement
                regarding this Agreement or the Joint Operations, it shall not do
                so
                unless prior to its release, such Party furnishes all the Parties
                with a
                copy of such announcement or statement, and obtains the approval
                of all
                the Parties or at least two (2) non-affiliated Parties holding fifty
                percent (50%) or more of the Participating Interests; provided that,
                notwithstanding any failure to obtain such approval, no Party shall
                be
                prohibited from issuing or making any such public announcement or
                statement if it is necessary to do so in order to comply with
                the  applicable laws, rules or regulations, legal proceedings or
                stock exchange having jurisdiction over such party
                .

            

    

    

    22.6           Severance
      of Invalid Provisions

    

    If
      and
      for so long as any provision of this Agreement is deemed or declared to be
      invalid for any reason whatsoever, such invalidity shall not affect the validity
      or operation of any other provision of this Agreement except only so far as
      shall be necessary to give effect to the construction of such invalidity, and
      any such invalid provision shall be deemed severed from this Agreement without
      affecting the validity of the balance of this Agreement.

    
      
        
        

      

      
        Page
          64

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF  the Parties have caused this Agreement to be executed
      by their duly authorized officers and representatives as of the day and year
      first above written.

    

    

    

    Signed
      by

    

    

    

    For
      and
      on behalf of

    Gujarat
      State Petroleum Corporation Ltd.

    

    In
      presence
      of                                (1)

    

    

    (2)

    

    

    

    

    For
      and
      on behalf of

    Jubilant
      Enpro Ltd.

    

    

    In
      presence
      of                                (1)

    

    

    (2)

    

    

    

    

    

    For
      and
      on behalf of

    GeoGlobal
      Resource (India) Inc.

    

    In
      presence
      of                                (1)

    

    

    (2)

    

    

    

    

    
      
        
        

      

      
        Page
          65

        
          

        

      

      
        
        

      

    

    EXHIBIT  "A"

    

    ACCOUNTING
      PROCEDURE

    

    

    ARTICLE
      I

    

    GENERAL
      PROVISIONS

    

    
      	
              1.1  

            	
              DEFINITIONS

            

    

    

    The
      definitions contained in Article 1 of the Operating Agreement to which this
      Accounting Procedure is attached shall also be applicable
      herein.  Furthermore, as and when used in this Accounting Procedure
      the terms listed below shall have the following meaning:

    

    
      	
               

            	
              A.

            	
              The
                "said Agreement" means the Operating Agreement of which this Exhibit
                is a
                part.

            

    

    

    
      	
               

            	
              B.

            	
              "Material"
                shall mean all material, supplies and equipment acquired or held
                for use
                in Joint Operations.

            

    

    

    C.           "Outsider"
      or "Outsiders" means parties other than Operator and Non-Operators.

    

    
      	
               

            	
              D.

            	
              Other
                terms used in this Accounting Procedure which are defined or described
                in
                said Agreement shall have the same meaning given them in said
                Agreement.

            

    

    

    1.2           Inconsistency

    

    In
      the
      event of any inconsistency or conflict between the provisions of this Accounting
      Procedure and the other provisions of the Agreement, the other provisions of
      the
      Agreement shall prevail.  The accounts will be in conformity with
      accounting principles/standards and guidelines issued by the Institute of
      Chartered Accountants of India from time to time.

    

    1.3           Revision
      of the Accounting Procedure

    

    By
      mutual
      agreement between the Operator and the Non-Operators, this Accounting Procedure
      may be revised from time to time, in writing, signed by the Parties, stating
      the
      date upon which the amendments shall become effective.

    

    
      	
              2.  

            	
              JOINT
                ACCOUNT RECORDS AND CURRENCY
                EXCHANGE

            

    

    

    Operator
      shall maintain accounting records for the Joint Account in the English language
      in accordance with generally accepted accounting practices used in the petroleum
      industry and in such a manner that all expenditures will be segregated or can
      be
      allocated to appropriate areas in connection with the Petroleum Operations.
      Joint Account records shall be maintained in the Operator's office in India,
      and
      stated in United States Dollars and Indian Rupees.  Expenditures other
      than United States Dollars or Indian Rupees shall be translated into United
      States Dollars and charged as United States Dollar
      expenditures.  Unless mutually agreed otherwise by the Parties,
      translation of non United States Dollars expenditure into United States Dollars
      and United States Dollar expenditures into Indian Rupees shall be as
      follows:

     

    
 

    
      
        
        

      

      
        Page
          66

        
          

        

      

      
        
        

      

    

    
      	
              (A)  

            	
              Expenditure
                of currencies purchased by the Operator for the Joint Account with
                Unites
                States Dollars shall be translated back into United States Dollars
                at the
                rate of exchange at which the currency was purchased with individual
                currency purchased deemed to be utilized on a first in/ first out
                basis to
                provide the funds expended.

            

    

    

    
      	
              (B)  

            	
              Indian
                Rupees advanced pursuant to Indian Rupee calls shall be translated
                into
                United States Dollars at the monthly average of the daily mean of
                the
                buying and selling rates of exchange as quoted by State Bank of India
                (or
                any other financial body as may be mutually agreed by the Parties)
                for the
                Month in which the revenues, costs, expenditures, receipts or income
                are
                recorded.  However, in case of any single non-US
                Dollar transaction in excess of the equivalent of fifty thousand
                United
                States Dollar (US $ 50,000), the conversion into United States Dollars
                shall be performed on the basis of the average of the applicable
                rates for
                the day on which the transaction
                occurred.

            

    

    

    
      	
              (C)  

            	
              Expenditures
                of United States Dollars advanced pursuant to United States Dollar
                Cash
                Calls shall be translated into Indian Rupees using the applicable
                exchange
                rate for the month of disbursement based on the current procedure
                that the
                Operator uses to translate United States Dollars as specified in
                clause
                (B) above.

            

    

    

    The
      intent of the procedures outlined in Paragraph 2 of this Article I is to
      minimize any gain or loss on exchange chargeable to the Joint
      Account.

    

    It
      is
      agreed, however, that any loss or gain resulting from the exchange of currency
      required for the use of the Joint Operations or from the translation above
      listed, shall be charged or credited to the Joint Account.  The matter
      of translation rates shall be reconsidered if it is determined that the above
      methods result in inequities, or burdensome administration, or do not provide
      the proper value for stating expenditure under the terms of the
      Agreement.

    

    3.           ADVANCES
      AND CASH CALLS

    

    
      	
              (A)  

            	
              Upon
                approval of Work Programmes and Budgets and subject to Article 4.7
                of the
                Agreement, Operator shall have the right at its option to require
                the
                Parties to advance their share of Joint Operations net cash requirements
                by submitting to the Parties, on or before the first day of any month
                an
                itemized estimate by Budget categories of such requirements for the
                succeeding month.

            

    

    

    
      	
              (B)  

            	
              Each
                such Cash Call shall be equal to the Operator's estimate of the money
                to
                be spent to perform its duties under the Approved Work Programme
                and
                Approved Budget for the month concerned and shall specify the currency
                or
                currencies in which the money shall be expended.  The Parties
                shall pay their Participating Interest share of the cash requirements
                within thirty (30) days after receipt of the estimates or by the
                first
                Business Day of the month for which advances are required, whichever
                is
                the later.  A reconciliation between estimates and actual cash
                requirements shall be made by Operator at the close of each Calendar
                Month
                and any differences shall be adjusted in the subsequent cash requirement
                request.

            

    

     

    
 

    
      
        
        

      

      
        Page
          67

        
          

        

      

      
        
        

      

    

    
      	
              (C)  

            	
              A
                Party shall have the right to make payment in the currency required
                to be
                expended by the Operator where such Party's share of the payment
                required
                is US $ 100,000 (United States Dollars one hundred thousand) or
                more.  The principles referred to in para 2 of this Article
                shall apply in relation to the exchange rate to be used by the Operator
                where a Party exercises its right pursuant to this subparagraph
                (C).

            

    

    

    
      	
              (D)  

            	
              For
                information purposes the Cash Call shall contain an estimate of the
                funds
                required for the succeeding two
                months.

            

    

    

    
      	
              (E)  

            	
              In
                the event that Operator subsequently determines that due to unanticipated
                expenditures the estimated monthly requirements submitted to the
                Parties
                are inadequate, Operator shall have the right to require the Parties
                to
                advance a portion of additional requirements by submitting an itemized
                estimate by Budget categories of such requirements.  Each Party
                shall pay its proportional share of such advance within thirty (30)
                Business Days after receipt of such notice or the date of requirement
                specified by the Operator whichever is
                later.

            

    

    

    
      	
              (F)  

            	
              Each
                Cash Call shall indicate the AFE pursuant to which it is made. If
                a Party
                believes that the Cash Call exceeds the AFE to which it relates such
                Party
                may within five (5) Business Days of receipt of such Cash Call send
                notice
                to all other Parties including the Operator advising that it believes
                that
                all or a part of the Cash Call exceeds the applicable AFE and providing
                its reasons therefor. If within a further three (3) days all Non-Operators
                agree that all or a part of the Cash Call does not fall within an
                AFE then
                that part of Cash Call on which the Non-Operators have unanimously
                agreed
                exceeds the AFE shall be invalidated. The Parties shall not be subject
                to
                Articles 7.6 and 7.7 for failing to pay within the time required
                that part
                of a Cash Call invalidated pursuant to this provision and in such
                event
                within a further five (5) Business Days the Operating Committee shall
                meet
                to resolve the issue.

            

    

    

    
      	
              (G)  

            	
              Where
                separate Joint Operations bank accounts are maintained as provided
                in para
                3(K) of Article I of this Accounting Procedure, any interest earned
                from
                deposits of cash advances will be for the benefit of the individual
                Parties' account in proportion to their contributions. However, any
                Party
                may require that funds it has advanced in excess of its proportionate
                share of actual cash required by the Joint Operations, should said
                excess
                funds exceed fifty thousand United States Dollars (U.S.$50,000) or
                their
                equivalent in Indian Rupees, be returned in the currency of their
                original
                denomination within a period of fifteen (15) Business Days from the
                date
                of receipt of the request at the Party's expense. If the Operator
                does not
                make arrangements in good faith to return such funds in fifteen (15)
                Business Days then the Operator shall pay the Party requesting the
                refund
                the difference between the interest specified in Article 7.6.2 of
                the
                Agreement and the interest earned on the bank account of the Joint
                Account.

            

    

     

    
 

    
      
        
        

      

      
        Page
          68

        
          

        

      

      
        
        

      

    

    
      	
              (H)  

            	
              If
                the Operator does not request advance funds from the Parties, then
                the
                monthly billing referred to in Paragraph 4(A) of Article I shall
                be paid
                by the Parties in accordance with their Participating Interests within
                thirty (30) days after receipt
                thereof.

            

    

    

    
      	
              (I)  

            	
              Cash
                requirements shall be specified by the Operator in United States
                Dollars
                and/or in Indian Rupees as required for the Joint Operations and
                the
                Parties shall advance their share of United States Dollars and Indian
                Rupees as so specified.

            

    

    

    
      	
              (J)  

            	
              Subject
                to paragraph 3(E) of this Article I, if any Party fails to pay in
                full its
                share of any Cash Call by the due date as provided above, it shall
                be in
                default, and Article 7.6 and 7.7 of the Agreement shall
                apply.

            

    

    

    
      	
              (K)  

            	
              Funds
                under the said Agreement held by Operator outside of India shall
                be
                segregated into a separate bank account or accounts, and shall not
                be
                commingled with Operator's other funds. Funds under the Agreement
                held by
                the Operator within India shall be held in separate bank accounts
                maintained solely for the respective purposes of the Joint Account.
                A
                monthly statement summarizing receipts, disbursements, transfers
                to each
                Joint Account and beginning and ending balances thereof shall be
                provided
                by the Operator to the Parties.

            

    

    

    
      	
              (L)  

            	
              The
                Operator shall endeavor to maintain funds in bank accounts for the
                Joint
                Account at a level consistent with that required for the prudent
                conduct
                of Joint Operations.

            

    

    

    4.           STATEMENTS
      AND BILLINGS

    

    
      	
               

            	
              (A)

            	
              Unless
                otherwise agreed by the Parties, Operator shall render monthly to
                all the
                Parties, by the twenty fifth (25th) day of each Month, a billing
                statement
                of the costs and expenditure incurred during the prior Month, indicating
                by appropriate classification the nature thereof and the portion
                of such
                costs charged to each of the
                Parties.

            

    

    

    These
      statements shall contain the following information:

    

                          (a)           
      advances of funds setting forth the currencies received from each
      Party;

    

    (b)           the
      share of each Party in total expenditures on a cash and accrual
      basis;

    

    (c)           
      the current cash balance of each Party; and

     

    
 

    
      
        
        

      

      
        Page
          69

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (d)

            	
              a
                summary of costs, credits and expenditure on current month, year
                to date,
                and inceptions to date basis or other periodic basis, as agreed by
                the
                Parties for each activity of the Approved Work Programme and Approved
                Budget.

            

    

    

    
      	
               

            	
              (B)

            	
              Each
                Party shall be responsible for preparing its own accounting and tax
                reports to meet the requirements of India and other applicable countries.
                Operator, to the extent that the information is reasonably available
                from
                the Joint Account records, shall provide in a timely manner, Non-Operators
                with the necessary statements to facilitate the discharge of such
                responsibility.

            

    

    

    
      	
               

            	
              (C)

            	
              The
                "cash" rather than "accrual" basis for accounting shall be used in
                charging the Joint Account. "Cash" basis as used herein means that
                expenditures for the Joint Operations are regarded as applicable
                to the
                period in which cash disbursements are made, whereas "accrual" basis
                means
                that expenses are regardless of when paid. For Non-Operator's internal
                accounting purposes, the Operator shall reflect accruals applicable
                to the
                Joint Account as memorandum items.

            

    

    

    
      	
              (M)  

            	
              The
                billing statement is to be accompanied by billing schedules which
                shall be
                schedules dividing such expenditures and income into main classifications
                of expenditure as indicated by Approved Budget and AFEs. The billing
                schedule shall also show cumulative totals of all payments linked
                to AFEs
                Budget categories and Programmes.

            

    

    

    5.           ADJUSTMENTS

    

    Payments
      of any such bills shall not prejudice the right of Non-Operators to protest
      or
      question the correctness thereof. Subject to the exception noted in paragraph
      6
      of this Article I, all statements rendered to Non-Operators by Operator during
      any Year shall be presumed to be true and correct after twenty seven (27) months
      following the end of such Year, unless within said twenty seven (27) month
      period any Non-Operator requests for adjustment. Failure on the part of
      Non-Operators to make claim on Operator for adjustment within such period shall
      establish the correctness thereof and preclude the filing of exceptions thereto
      or making of claims for adjustment thereon. No adjustment favorable to the
      Operator shall be made unless it is made within the same prescribed period.
      The
      provisions of this paragraph shall not prevent any adjustments resulting from
      amongst others, physical inventory of property as provided for in Article IV
      hereof, and exchange gains or losses as contemplated by Article I
      (2).

    

    6.           AUDITS

    

    Non-Operators,
      upon written notice to the Operator, shall have the right to audit Operator's
      accounts and records relating to the accounting hereunder for any Year within
      twelve (12) month period following the end of such Year; provided, however,
      that
      Non-Operators must take written exception to and make claim upon the Operator
      for all discrepancies disclosed by said audit within the said twelve (12) month
      period. Non-Operators shall make every reasonable effort to conduct audits
      in a
      manner, which will result in a minimum of inconvenience to the Operator. Audits
      by Non-Operators shall be at Non-Operators' expense.

    

    
      
        
        

      

      
        Page
          70

        
          

        

      

      
        
        

      

    

    At
      the
      conclusion of each such audit, the Non-Operators and the Operator shall endeavor
      to settle outstanding matters and a written report shall be circulated to all
      the Non-Operators and the Operator within three (3) months of the conclusion
      of
      the audit and shall also be placed before the Operating Committee. In addition,
      a written statement of settlement reached between the Non-Operators and the
      Operator after the outstanding matters have been settled between the
      Non-Operators and the Operator shall be placed before the Operating Committee.
      The report shall include all claims arising from such audit together with
      comments pertinent to the operations of the accounts and records. The Operator
      shall reply to the report in writing as soon as possible and in any event not
      later than three (3) months following the receipt of such report.

    

    Should
      the Non-Operator consider that the report or reply requires further
      investigation of any item therein, the Non-Operator shall have the right to
      conduct further investigation in relation to such matter notwithstanding that
      such period of twenty four (24) months has expired. Such further investigations
      shall be commenced within thirty (30) days and be concluded within sixty (60)
      days of receipt of such reply or report.

    

    Notwithstanding
      that the said period of twenty four (24) months may have expired, if evidence
      exists that the Operator has been guilty of Wilful Misconduct, the Non-Operators
      shall have the right to conduct further audits in respect of any earlier
      period.

    

    All
      adjustments resulting from audit agreed between Operator and Non-Operators
      conducting the audit shall be rectified promptly in the Joint Account by the
      Operator and reported to other Non-Operators as well as to the Operating
      Committee. If any dispute shall arise in connection with an audit, it shall
      be
      discussed by the Parties and if a settlement between the Operator and the
      Non-Operators or among the Parties is not unanimously agreed, the item or items
      in dispute shall be referred to arbitration.

    

    
      	
               

            	
              Operator
                will get accounts audited in three months from closure of financial
                years
                and submit the same to non-operating
                partners.

            

    

    

    
      	
               

            	
              Operator
                shall also file tax returns or returns/forms as applicable under
                Indian
                Laws.

            

    

    

    

    
      
        
        

      

      
        Page
          71

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II - BASIS OF CHARGES TO THE JOINT ACCOUNT

    

    

    The
      Operator shall fully charge the Joint Account with all direct costs and expenses
      incurred in accordance with all Approved Work Programmes and Budgets and the
      provisions of this Agreement and in connection with Contract, Materials and
      Joint Operations. Without in any way limiting the generality of the foregoing,
      chargeable direct and indirect costs shall include all costs set forth in
      Sections 2 and 3 of the Accounting Procedure annexed to the Contract and all
      costs and expenses incurred by the Operator as a result of carrying another
      party’s interest and any other costs approved by the Operating
      Committee.

    

     

    
      
        
        

      

      
        Page
          72

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      III - DISPOSAL OF MATERIALS

    

    

    The
      Operator shall be under no obligation to purchase for its owe account surplus,
      new or second hand Material. The disposition of major items of surplus equipment
      and Material, such as derricks, tanks, engines, pumping units and tubular goods
      shall be subject to determination by the Operating Committee, provided the
      Operator shall have the right to dispose of normal accumulations of junk and
      scrap material either by transfer or sale for the Joint Properties, subject
      to
      relevant provisions of the Agreement.

    

    1.           MATERIAL
      PURCHASED BY OPERATOR OR NON-OPERATOR

    

    Material
      purchased by either Operator or Non-Operators for use in operations outside
      this
      Agreement shall be credited by Operator to the Joint Account for the month
      in
      which the Material is removed by the purchaser.

    

    2.           DIVISION
      IN KIND

    

    Division
      of Material in kind, if made between Operator and Non-Operators, shall be in
      proportion to their respective interests in such Material. Each Party shall
      thereupon be charged individually with its share of the agreed value of Material
      received or receivable by each Party, and corresponding credits shall be made
      by
      Operator to the Joint Account. Such credits shall appear in the monthly
      statement of Joint Operations.

    

    3.           SALE
      TO OUTSIDERS

    

    Sale
      to
      Outsiders of Material from the Joint Properties shall be credited by the
      Operator to the Joint Account at the net amount collected by the Operator from
      vendee. If such sale is priced lower than the basis stipulated in Section 3.1.8
      of the Accounting Procedure annexed to the Contract, then such sale shall be
      approved by the Operating Committee prior to such sale. Any claims by vendee
      for
      defective Materials or otherwise shall be charged back to the Joint Account
      if
      and when paid by the Operator.

     

    
      
        
        

      

      
        Page
          73

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      IV - INVENTORIES

    

    

    1.           PERIODIC
      INVENTORIES, NOTICE AND REPRESENTATION

    

    Unless
      otherwise agreed by the Parties, the Operator shall take physical inventory
      of
      Joint Account assets as are ordinarily considered controllable by operators
      of
      oil and gas properties at the following intervals:

    

    A.           Storehouse
      stocks - annually.

    
      	
               

            	
              B.

            	
              Other
                assets - cyclical basis so that all controllable assets shall be
                inventoried at intervals of not more than five (5)
                years.

            

    

    
      	
               

            	
              C.

            	
              Completed
                construction projects - within sixty (60) days following physical
                completion of project.

            

    

    

    Written
      notice of intention to take inventory shall be given by the Operator at least
      thirty (30) days before any inventory is to begin so that the Non-Operators
      may
      be represented when any inventory is taken.

    

    Failure
      of the Non-Operators to be represented at an inventory shall bind the
      Non-Operators to accept the inventory taken by the Operator.

    

    2.           RECONCILIATION
      AND ADJUSTMENT OF INVENTORIES

    

    Reconciliation
      of inventory with charges to the Joint Account shall be made by the Operator,
      and the Operator shall furnish the Non-Operators a copy of the inventory and
      a
      price list of overages and shortages. Inventory adjustments shall be made by
      the
      Operator to the Joint Account for overages and shortages except that any
      particular item exceeding twenty five thousand United States Dollars (US
      $25,000) or class of Material adjustment exceeding fifty thousand United States
      Dollars (US $50,000) or net total adjustments of both overages and shortages
      for
      any particular inventory exceeding in the aggregate an amount equivalent to
      one
      hundred thousand United States Dollars (US $100,000) shall require the approval
      of the Non-Operator(s). The Operator shall be held accountable to the
      Non-Operator(s) only for shortages due to lack of reasonable
      diligence.

    

    3.           SPECIAL
      INVENTORIES

    

    Special
      inventories may be taken, at the expenses of the purchaser, whenever there
      is
      any sale or change of interest in the Joint Properties; and it shall be the
      duty
      of the Party selling to notify all other Parties hereto as quickly as possible
      after the transfer of interest takes place. In such cases, both the seller
      and
      the purchaser shall be represented and shall be governed by the inventory so
      taken.

    

    
      
        
        

      

      
        Page
          74

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      V - FORM IN WHICH ACCOUNTS SHALL BE MAINTAINED

    

    

    The
      form
      of the accounts as required for the purpose of complying with provisions of
      the
      Agreement shall include:

    

    
      	
              1.

            	
              Accounts
                recorded through Operator's Uniform Chart of Accounts or an equivalent
                system of accounts. A manual of Operator's accounts shall be maintained
                at
                Operator's office in India.

            

    

    

    
      	
              2.

            	
              Statements
                produced from the Operator's accounts of income and expenditure.
                Such
                statements produced from the Operator's accounts must be developed
                over
                time to reflect actual progress and
                circumstances.

            

    

    
      
        
        

      

      
        Page
          75

        
          

        

      

      
        
        

      

    

    EXHIBIT  -
      B

    CARRIED
      INTEREST AGREEMENT

    

    

    THIS
      AGREEMENT MADE this 27 day of August, 2002.

    

    BETWEEN:

    

    Gujarat
      State Petroleum Corporation Limited, a company incorporated in India
      and  having its registered office at Block 15, Second Floor, Udyog
      Bhavan, Sector 11, Gandhinagar, Gujarat 382011, India (hereinafter referred
      to
      as “GSPC)

    

    OF
      THE
      FIRST PART

    

    AND:

    

    GeoGlobal
      Resources (India) Inc, a company incorporated in Alberta, Canada, and
      having its registered office at 35 – 22 Street NW, Calgary, Alberta, T2N 4W7,
      Canada ,(hereinafter referred to as “GGR)

    

    OF
      THE
      SECOND PART

    

    

    

    Whereas
      the broad principles and special provisions to be incorporated in
      the
      joint operating agreement referred to in clauses 5.1 of the Joint Bidding
      Agreement are as follows:

    

    
      	
               

            	
              (a)   Subject
                to clause (e) of this Agreement, GSPC shall be the Operator if Production
                Sharing Contract is awarded with respect to the Bid made jointly
                by the
                parties.  GSPC shall perform petroleum operations on behalf of
                the parties pursuant to the terms of mutually agreed joint operating
                agreement effective as of the date of signing the Production Sharing
                Contract for exploration block no. KG-OSN-2001/3 offered under NELP-III,
                or completion of all three exploration phases which ever is
                earlier.  The Non operating party, GGR shall be carried for 100%
                of all of its share of any costs during the Exploration phase prior
                to the
                start date of initial commercial production. However, all of GGR’s share
                of any capital costs for the development phase will be paid back
                to GSPC
                as operator without interest and repayment of these costs shall be
                prorated over the forecast production life or ten years whichever
                is
                less.

            

    

    

    Now
      therefore this agreement
      witnesseth that in consideration of the mutual covenants and agreements
      herein contained, the parties hereto agree as follows:

    

     

    
      
        
        

      

      
        Page
          76

        
          

        

      

      
        
        

      

    

    Carried
      Working Interest

     

    

    The
      interest retained by GGR in the
      said exploration block as provided in this agreement shall be a carried working
      interest, that is to say:

    

    (a)           GSPC
      covenants and agrees that upon being successful in the development of the said
      block, GGR shall be entitled to and have earned a 10% carried working
      interest;

    

    (b)           GSPC
      shall advance and pay for the joint account of the parties, all costs and
      expenses which are made by GSPC pursuant to the terms of this agreement
      including, without in any way whatsoever limiting the generality of the
      foregoing, all costs and expenses of whatsoever nature or kind for exploration
      phase carried out on the said block, for development of an operations on the
      said block for the discovery and recovery of petroleum substances (which for
      the
      purposes of this agreement includes all petroleum, natural gas and related
      hydrocarbons and such other substances as are granted by the said
      block);

    

    (c)           after
      deducting all royalties payable under the said block, GSPC shall be entitled
      to
      recover all such costs and expenses out of the production if any, from wells
      drilled by GSPC on the said block pursuant to the terms hereon;

    

    (d)           GGR
      shall not be entitled to receive any share of production of petroleum substances
      until GSPC has recovered GGR’s share of the costs and expenses that were paid by
      GSPC as aforesaid and after such costs and expenses have been recovered, GGR
      shall be entitled to a 10% interest in all wells drilled on the said block,
      in
      all equipment placed in and on the said block and in all petroleum substances
      produced from wells drilled by GSPC on the said block;

    

    (e)           if
      petroleum substances are not produced from the said block or if production
      ceases before GSPC has recovered all of GGR’s share of costs and expenses, it is
      understood and agreed that GSPC shall bear all of the aforesaid costs and
      expenses and that GGR shall have no obligation or liability to pay, repay or
      bear any portion thereof;

    

    (f)           it
      is understood and agreed that any and all rental payments made in respect of
      the
      said block shall be borne and paid solely by GSPC and shall not be charged
      to
      the  joint account.

    

    (g)           all
      costs and expenses and all income in connection with the said block shall be
      computed and accounted for in accordance with the standard industry accepted
      accounting principals and agreements.

    

    

    Termination:

    

    The
      term of this Agreement shall
      commence on the date of this Agreement and shall be a period equal  to
      the same term of the Exploration Period of Block KG-OSSN-2001/3 offered under
      NELP-III and the joint operating agreement referred to above.

    

    
      
        
        

      

      
        Page
          77

        
          

        

      

      
        
        

      

    

    Amendment:

     

    No
      amendment to this Agreement shall be valid and binding unless set forth in
      writing and duly executed by the parties.

     

    

    Governing
      Law and Arbitration:

    

    
      	
              a)  

            	
              The
                laws of India shall govern this Agreement. GSPC and GGR submit to
                the  exclusive jurisdiction of its courts at
                Delhi.

            

    

    

    
      	
              b)  

            	
              Any
                dispute arising in connection with or with respect to validity of
                this
                agreement shall be finally resolved through Arbitration in accordance
                with
                the rules under Arbitration & Conciliation Act, 1996
                .  Proceedings of Arbitration  shall be held in New
                Delhi and conducted in English
                language.

            

    

    

    

    

    EXECUTED
      in Gandhinagar

    

    

    

    

    Signed
      for and on behalf
      of                                                                                                

    
      	
               

            	
              Gujarat
                State Petroleum Corporation Limited
                by:

            

    

    

    

    
      	
               

            	
              Witness:

            

    

    

    

    

    
      	
               

            	
              Signed
                for and on behalf of

            

    

    
      	
               

            	
              GeoGlobal
                Resources (India) Inc. by:

            

    

    

    

    

    
      	
               

            	
              Witness:

            

    

    
      
        
        

      

      
        Page
          78

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