Document:

Prepared and filed by St Ives Financial

Exhibit
  10.14(iv)

 

	

 
 	

InterSystems Corporation
 World Headquarters
 One Memorial Drive
 Cambridge, MA 02142-1356
 Tel:               1.617.621.0600
 Fax:              1.617.494.1631
 www.InterSystems.com
 

September 19, 2006

MEDecision Inc.

601 Lee Road

Chesterbrook Corporate Center

Wayne, Pa. 19087

Attn:  John Capobianco

Dear John,

The Value Added Remarketing Agreement in place between MEDecision and InterSystems has expired. By this notice, InterSystems has agreed to keep the current terms and pricing in place until December 31, 2006. It is the goal of both parties to have a new Agreement in place by no later than January 1, 2007. Please feel free to contact me if you have any questions or concerns.

Thank you and regards,

 

  	
        /s/
          Howard Berloff

      	
         

      	
         

      	
        
        

      
	
        

      	 	 	 
	
        Howard
          Berloff

      	
         

      	
         

      	
         

      

Howard Berloff

Contracts Attorney

InterSystems Corporation

1 Memorial Drive

Cambridge Ma. 02142

(Phone): 617-225-3155

(fax): 617-494-1631Exhibit 10.1

    
      

    

    10.1 2006
      PSC

    

    
 

    Republic
      of Guinea

    

    Work
      - Justice - Solidarity

    

     

    Ministry
      of Mines and Geology 

    

     

    Hydrocarbon
      Production Sharing Contract

    

     

    

    Between

    The
      Republic Of Guinea

    and

    SCS
      Corporation

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    Table
      of Contents

     

    
      
        
          	
                  Article
                    1: Definitions

                	
                  4

                
	
                  Article
                    2: Nature And Object Of The Contract

                	
                  6

                
	
                  Article
                    3: Duration Of The Contract

                	
                  7

                
	
                  Article
                    4: Exploration Work And Expenditure Obligations

                	
                  8

                
	
                  Article
                    5: Surrenders

                	
                  9

                
	
                  Article
                    6: Appraisal Of A Discovery

                	
                  10

                
	
                  Article
                    7: Development And Production

                	
                  11

                
	
                  Article
                    8: Natural Gas

                	
                  13

                
	
                  Article
                    9: Annual Work Programs And Petroleum Operations

                	
                  14

                
	
                  Article
                    10: Preference To Local Personnel And
                    Subcontractors

                	
                  15

                
	
                  Article
                    11: Contractor’s Obligations In The Conduct Of Petroleum
                    Operations

                	
                  16

                
	
                  Article
                    12: Contractor’s Rights In The Conduct Of Petroleum
                    Operations

                	
                  18

                
	
                  Article
                    13: Recovery Of Petroleum Costs And Production
                    Sharing

                	
                  20

                
	
                  Article
                    14: Valuation Of Petroleum

                	
                  21

                
	
                  Article
                    15: Participation

                	
                  22

                
	
                  Article
                    16: Taxation

                	
                  23

                
	
                  Article
                    17: Obligation To Supply Domestic Consumption

                	
                  24

                
	
                  Article
                    18: Supervision And Inspection Of Petroleum
                    Operations

                	
                  25

                
	
                  Article
                    19: Information And Reports

                	
                  26

                
	
                  Article
                    20: Accounting And Payments

                	
                  27

                
	
                  Article
                    21: Imports And Exports

                	
                  28

                
	
                  Article
                    22: Foreign Exchange Control

                	
                  29

                
	
                  Article
                    23: Assignments And Transfers

                	
                  30

                
	
                  Article
                    24: Surrender And Termination

                	
                  31

                
	
                  Article
                    25: Force Majeure

                	
                  32

                
	
                  Article
                    26: Applicable Law And Stability Of Conditions

                	
                  33

                
	
                  Article
                    27: Settlement Of Disputes

                	
                  34

                
	
                  Article
                    28: Notices

                	
                  34

                
	
                  Article
                    29: Miscellaneous Provisions

                	
                  35

                
	
                  Article
                    30: Effective Date

                	
                  36

                
	
                  Appendix
                    A

                	
                  37

                

        

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      CONTRACT

       

      BETWEEN

      

      

      The
        Republic of Guinea, hereinafter referred to as the ‘Government’, represented for
        the purposes of this Contract by the ”Ministere
        des Mines et de la Geologie”
        as the
        Minister assigned to the hydrocarbons sector, On the one hand,

      

      AND

      

      SCS
        Corporation, a company incorporated under the laws of Delaware, United States
        of
        America, having its office in Sugar Land, Texas hereinafter referred to as
        “Contractor” On the other hand,

      

      WITNESSETH:

      

      -
        WHEREAS, the Government wishes to promote the exploration and exploitation
        of
        Petroleum within the territory of the Republic of Guinea to contribute to
        the
        economic development of the country;

      

      -
        WHEREAS, the Government, in order to carry out in the best technical and
        economic conditions the Petroleum exploration and exploitation operations
        concerning the Contract Area, wishes to contract the services of a qualified
        contractor;

      

      -
        WHEREAS, the Contractor represents that it has the technical competence and
        financial ability to perform the Petroleum Operations herein described, and
        wishes to carry out such Petroleum Operations under the terms and conditions
        of
        a production sharing contract pursuant to the provisions of the Petroleum
        Code;

      

      NOW
        THEREFORE, the Parties hereby agree as follows:

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        1: DEFINITIONS

      The
        words
        used in this Contract shall have the following meanings;

      

      1.1

      “Calendar
        Year” means a period of twelve (12) consecutive months commencing with the first
        day of January and ending the last day of the following December.

      

      1.2

      “Contract
        Year” means a period of twelve (12) consecutive months commencing on the
        Effective Date or the anniversary date of the Effective Date.

      

      1.3

      “Barrel”
        means a quantity consisting of 158.984 liters at standard atmospheric pressure
        of 1.01325 bars and temperature of fifteen degrees centigrade (15 degrees
        C).

      

      1.4

      “Petroleum
        Code” means the Ordinance N 119/PRG/86 of September 23, 1986 concerning the
        legal and fiscal regime of the exploration and exploitation of Petroleum
        as well
        as the regulations made thereunder.

      

      1.5

      “Contractor”
        means collectively or individually SCS Corporation as well as any company
        to
        which rights and obligations may be transferred pursuant to Article 23
        below.

      

      1.6

      “Contract”
        means this document and its appendices, as well as any extensions or
        modifications hereto which may be mutually agreed by the Parties in accordance
        with the provisions of Article 23 below.

      

      1.7

      “Petroleum
        Costs” means all costs and expenses incurred in carrying out the Petroleum
        Operations under this Contract including and not limited to royalties,
        exploration and development.

      

      1.8

      “Effective
        Date” means the date on which this Contract comes into force and effect, as
        defined in Article 30 below.

      

      1.9

      “Commercial
        Discovery” means the discovery of a Petroleum field which has been duly
        evaluated in accordance with the provisions of Article 6 below, and which
        can be
        produced commercially after taking into account all technical and economic
        data.

      

      1.10

      “Dollar”
        means dollar of the United States of America.

      

      1.11

      “Natural
        Gas” means the dry and wet gas, whether or not associated with Crude Oil, as
        well as all gases produced in association with Petroleum.

      

      1.12

      “Government”
        or “State” means the Republic of Guinea.

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      1.13

      “Petroleum”
        means Crude Oil and Natural Gas.

      

      1.14

      “Minister”
        shall mean the Minister who has been assigned to the hydrocarbons sector.
        

      

      1.15

      “Petroleum
        Operations” means the operations authorized under this Contract, related to the
        exploration, appraisal, development, production, transportation and sale
        of
        Petroleum, and includes Natural Gas processing operations as well as all
        necessary connected operations, but does not include refining and marketing
        of
        petroleum products.

      

      1.16

      “Parties”
        means the Government and the Contractor, and “Party” means either the Government
        or the Contractor.

      

      1.17

      “Exploitation
        Area” means that portion of the Contract Area delimited by a Commercial
        Discovery and defined pursuant to Article 7.2 below.

      

      1.18

      “Crude
        Oil” means all hydrocarbons which are produced in liquid state and at
        atmospheric pressure, at the wellhead, at the separator or after processing,
        asphalt, ozokerites and all other liquid hydrocarbons either in natural
        condition or obtained from Natural Gas by condensation or extraction, including
        inter alia condensates and Natural Gas liquids.

      

      1.19

      “Delivery
        Point” means the FOB point at loading terminal of Crude oil or Natural Gas in
        the Republic of Guinea or any other point agreed upon by the
        Parties.

      

      1.20

      “Affiliated
        Company” means any company which directly or indirectly controls or is
        controlled by any entity constituting the Contractor, or any company which
        directly or indirectly controls or is controlled by a company or entity which
        itself directly or indirectly controls any entity constituting the Contractor.
        For the purposes of the foregoing definition, “Control” means the direct or
        indirect ownership by a company or any other entity of at least fifty percent
        (50%,) of the shares or interest forming the capital of another company or
        entity conferring upon the owner thereof a majority of voting rights exercisable
        at general meetings of that another Company or entity, or a participation
        giving
        a determining position in the management of another company or
        entity.

      

      1.21

      “Quarter”
        means a period of three (3) consecutive months commencing with the first
        day of
        January, April, July and October.

      

      1.22

      “Contract
        Area” means the area described in Appendix A, being understood that when areas
        are surrendered by the Contractor they shall be deemed as excluded from the
        Contract Area. Conversely, the Exploitation Area(s) shall make an integral
        part
        of the Contract Area during the term of this Contract. The Contract Area
        represented on the attached Map consists of approximately 80,000 Sq. Km.,
        further indicated by reference points on the Map attached to this Contract
        Appendix A.

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      ARTICLE
        2: NATURE AND OBJECT OF THE CONTRACT

      2.1

      This
        Contract is a production sharing and marketing contract whereby the Government
        appoints the Contractor for rendering all the necessary services, on behalf
        of
        the Government, regarding the exploration for and, where applicable, the
        exploitation of Petroleum that may exist in the Contract Area.

      

      The
        Contractor shall act, on an exclusive basis for the Government, to conduct
        and
        execute the Petroleum Operations. It shall supply all technical means
        technologies, equipment and materials as well as the personnel necessary
        for
        operations.

      

      The
        Contractor shall bear, at its sole risk and expense, the full responsibility
        to
        finance the Petroleum Operations, except for the provisions of Article 15
        below.

      

      In
        the
        event of a Commercial Discovery in the Contract Area, the production of
        Petroleum shall be, during the term of the exploitation period, shared between
        the Parties in accordance with the provisions of Article 13 below.

      

      2.2

      The
        object of this Contract is to define the terms and conditions under which
        the
        Contractor shall provide the Government with the services set forth in Article
        2.1 above, as well as the respective rights and obligations of the
        Parties.

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      ARTICLE
        3: DURATION OF THE CONTRACT

      3.1

      This
        Contract shall consist of an exploration period and, in respect of each
        Commercial Discovery, an exploitation period.

      

      3.2

      The
        exploration period consists of a First Exploration Period and a Second
        Exploration Period. The First Exploration Period shall be for two Contract
        Years
        and the Second Exploration Period shall be for four Contract years.

      

      3.3

      The
        Contractor shall begin performing the Petroleum exploration operations within
        two (2) months after the Effective Date.

      

      3.4

      The
        Contractor shall be able to obtain ipso jure, the renewal of the First
        Exploration Period twice for an additional exploration period of one (1)
        Contract Year each time. For each renewal, the Contractor shall notify the
        Minister at least two (2) months prior to the expiry of such exploration
        period.

      

      3.5

      The
        Contractor is authorized to conduct First Exploration Period operations for
        the
        duration of this contract upon notification to the Minister two (2) months
        before the commencement of such work.

      

      3.6

      During
        the First Exploration Period, the Contractor may perform work obligations
        towards the fulfillment of the Second Exploration Period.

      

      3.7

      In
        order
        to enable the Contractor to complete its work, the Minister will grant an
        extension to the Second Exploration Period, for a period of four (4) years,
        upon
        notification made by the contractor at least two (2) months prior to expiry
        of
        the Second Exploration Period.

      

      Upon
        a
        Petroleum discovery made during the Second Exploration Period and the remaining
        time is insufficient to allow the Contractor to undertake the appraisal works
        of
        such discovery, the Minister will grant an extension of two (2) years upon
        notification made by the Contractor at least two (2) months prior to expiry
        of
        the Second Exploration Period.

      

      3.8

      Subject
        to the provisions of Article 24 below, the Exploration Period shall expire
        two
        years after the end of the Second Exploration Period with the exception of
        the
        Exploitation Area(s) as defined in Article 7 below except in the event of
        surrender of the Contract Area as defined in Article 5.1 below in which case
        this Contract will not expire.

      

      3.9

      Following
        the determination by the Contractor of the commerciality of a discovery,
        the
        Exploitation Period with respect to that Commercial Discovery shall commence
        upon the date of adoption of the development plan in accordance with the
        provisions of Article 7 below and shall expire twenty-five (25) years following
        that date.

      

      However,
        where the Contractor at the expiry of the Exploitation Period considers and
        provides the Minister with justifications, that the field is able to continue
        to
        produce commercially, said Exploitation Period shall be extended twice for
        ten
        (10) years each. 

      

      3.10

      The
        Contractor shall have the right to drill more wells in the Exploitation Area
        during the Exploitation Period and where there are more than one Commercial
        Discovery, each of them shall have a different Exploitation
        Period.

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      ARTICLE
        4: EXPLORATION WORK AND EXPENDITURE OBLIGATIONS

      4.1

      The
        Contractor shall carry out the following minimum exploration work and expected
        expenditures:

      

      
        	 	
                (c)

              	
                During
                  the First Exploration Period:

              

      

      

      
        	 	
                i.

              	
                2D
                  or 3D seismic acquisition 

              

      

      

      
        	 	
                ii.

              	
                Evaluation,
                  reinterpretation, reprocessing, AVO analysis, Energy Absorption
                  and High
                  Resolution processing on seismic
                  data

              

      

      

      
        	 	
                iii.

              	
                Estimated
                  expenditure for the above is a minimum of $10
                  Million

              

      

      

      
        	 	
                (d)

              	
                During
                  the Second Exploration Period:

              

      

      

      
        	 	
                i.

              	
                2D
                  or 3D seismic acquisition 

              

      

      

      
        	 	
                ii.

              	
                Evaluation,
                  reinterpretation, reprocessing, AVO analysis, Energy Absorption
                  and High
                  Resolution processing on seismic
                  data

              

      

      

      
        	 	
                iii.

              	
                Estimated
                  expenditure for the above is a minimum of $6
                  Million

              

      

      

      
        	 	
                iv.

              	
                Two
                  (2) exploratory wells with estimated expenditure of $15-20 Million
                  each.
                  Additional wells may be drilled by contractor upon the notification
                  of
                  plan to the Minister

              

      

      

      4.2

      The
        fulfillment of any work obligations shall exempt the Contractor from fulfilling
        the expenditure obligations.

      

      4.3

      Each
        of
        the exploratory wells set forth in this Article shall be drilled to a minimum
        depth of 2,500 meters. However, the Contractor may, after prior notice to
        the
        Minister, discontinue an exploratory well at a lesser depth than initially
        specified for one of the following reasons:

      

      
        	 	
                (d)

              	
                the
                  basement is encountered at a lesser depth than the minimum contractual
                  depth;

              

      

      

      
        	 	
                (e)

              	
                continuation
                  of drilling represents a manifest danger due to the existence of
                  abnormal
                  formation pressure;

              

      

      

      
        	 	
                (f)

              	
                petroleum
                  formations are encountered, the penetration of which requires the
                  placement of casings for protection, and thus, prevents reaching
                  the
                  minimum contractual depth.

              

      

      

      In
        the
        event that any of the above reasons exists, the exploratory well in question
        shall be deemed to have been drilled to the minimum contractual
        depth.

      

      4.4

      If
        the
        Contractor carries out, either during the First Exploration Period or the
        Second
        Exploration Period, exploration works in excess of the minimum work obligations
        in respect of such exploration period, said excess work may be carried forward
        to the following exploration period(s) and shall be deducted from the
        contractual obligations set forth for such exploration period(s),

      

      4.5

      The
        expected exploration expenditure obligations set forth in Article 4.1 above
        are
        expressed in constant Dollars.

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      ARTICLE
        5: SURRENDERS

      5.1

      Immediately
        after the effective date of this Contract, the passage of the “Projet de Loi” by
        the National Assembly, a legal opinion of the Supreme Court certifying the
        validity of this Contract and the issuance of a Presidential decree affirming
        this Contract the Contractor will surrender sixty four percent (64%) of the
        original Contract Area.

      

      5.2

      In
        recognition of the expenditure and work performed by SCS Corporation in the
        past
        the Government shall authorize SCS to participate in any other development
        of
        the surrendered area as referred to in Article 5.1 above on a priority
        non-exclusive basis.

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      ARTICLE
        6: APPRAISAL OF A DISCOVERY

      6.1

      The
        Contractor shall forthwith notify the Minister of any Petroleum discovery
        made
        within the Contract Area and shall supply the Minister with all information
        related to such discovery.

      

      6.2

      If
        the
        Contractor decides to appraise the above-mentioned discovery, it shall notify
        the Petroleum Operations Management Committee defined in Article 9.2 below,
        with
        a detailed appraisal work program and the corresponding budget for such
        discovery. The provisions of Article 9.5 below shall apply mutatis mutandis
        to
        that appraisal work program as regards its adoption.

      

      6.3

      After
        adoption of the appraisal work program and the corresponding budget, the
        Contractor shall carry out such works with due diligence and in accordance
        with
        the established program.

      

      6.4

      Within
        two (2) months after the appraisal works are completed, the Contractor shall
        supply the Minister with a report establishing whether the discovery is
        commercial and including all information related to the technical and economic
        characteristics of such discovery.

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      ARTICLE
        7: DEVELOPMENT AND PRODUCTION

      7.1

      If
        the
        Contractor considers a discovery to be a Commercial Discovery, it shall,
        within
        six (6) months from the completion of the appraisal works mentioned in Article
        6.4 above, notify to the Petroleum Operations Management Committee referred
        to
        in Article 9.2 below the development plan concerning such Commercial
        Discovery.

      

      7.2

      The
        development plan submitted by the Contractor shall, inter alia,
        contain:

      

      
        	 	
                (i)

              	
                the
                  definition of the Exploitation Area related to the discovery as
                  a
                  contiguous block of 500 square kilometers in a shape defined by
                  the
                  Contractor from the exploration and well
                  data;

              

      

      

      
        	 	
                (j)

              	
                an
                  estimate of the recoverable
                  reserves;

              

      

      

      
        	 	
                (k)

              	
                a
                  production profile;

              

      

      

      
        	 	
                (l)

              	
                the
                  works necessary for the exploitation of the field such as the number
                  of
                  wells;

              

      

      

      
        	 	
                (m)

              	
                the
                  facilities required for the production, treatment, storage and
                  transportation of Petroleum;

              

      

      

      
        	 	
                (n)

              	
                an
                  estimate of the duration of the above-mentioned
                  works;

              

      

      

      
        	 	
                (o)

              	
                an
                  estimate of the development investments and operating
                  costs;

              

      

      

      
        	 	
                (p)

              	
                an
                  economic study supporting the commercial nature of the
                  discovery.

              

      

      

      The
        commercial nature of a discovery shall be determined by the Contractor. A
        discovery may be declared as commercial by the Contractor if, after taking
        into
        account the contractual provisions and the submitted development plan, the
        forecasts of incomes and expenses prepared in accordance with the standards
        used
        in the international petroleum industry confirm its commerciality.

      

      7.3

      Within
        sixty (60) days from the notification of the development plan to the Petroleum
        Operations Management Committee; the latter may notify to the Contractor
        revisions or changes to that development plan. The Contractor will endeavor
        to
        include said revisions or changes in accordance with good international
        petroleum industry practice.

      

      No
        later
        than thirty (30) days after the expiry of the time period referred to above,
        the
        Contractor shall submit the development plan to the Minister, for its adoption
        within thirty (30) days.

      

      The
        date
        of adoption of the development plan shall be the date of its notice given
        by the
        Minister. If the Minister fails to give such notice within the thirty (30)
        day
        period, the development plan submitted by the Contractor shall be deemed
        adopted
        at the date of expiry of said period.

      

      7.4

      The
        Contractor shall commence the physical development works on the field within
        six
        (6) months after the date of adoption of the development plan and shall continue
        them with due diligence.

      

      7.5

      No
        later
        than three (3) months prior to the end of each Calendar Year, the Contractor
        shall notify to the Petroleum Operations Management Committee the annual
        development program, and, as the case may be, the annual production program
        relating to each Exploitation Area, for the following Calendar Year. The
        provision of Article 9.5 below shall apply mutatis mutandis to the annual
        development and production programs as regards their adoption.

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      7.6

      During
        the Exploitation Period of a field, the Contractor shall produce annually
        reasonable quantities of Petroleum from said field in accordance with good
        international petroleum industry practice and taking into consideration,
        inter
        alia, the rules for the proper conservation of fields and the optimal recovery
        of Petroleum reserves under economic conditions.

      

      7.7

      The
        suspension of all production during a continuous period of at least twenty
        four
        (24) months, decided by the Contractor without the agreement of the Government,
        may result in the termination of this Contract pursuant to the provisions
        of
        Article 24.5 below.

      

      7.8

      Where
        a
        field extends beyond the boundaries of the Contract Area, the Minister may,
        as
        the case may be, require the Contractor to exploit said field in association
        with the contractor of the adjacent contract area under the provisions of
        a
        unitization agreement.

      

      Within
        six (6) months after the Minister has notified the Contractor, the later
        shall
        notify the Minister of the development plan relating to the Commercial Discovery
        which shall be prepared in agreement with the contractor of the adjacent
        contract area.

      

      If
        the
        development plan is not submitted to the Minister within the above-mentioned
        time period, or if such plan is not adopted by the Minister, the Minister
        will
        prepare a development plan in accordance with good international petroleum
        industry practice. Said plan shall be adopted by the Contractor, provided
        that
        the conditions imposed by the Minister do not reduce the economic profitability
        of the Contractor as arising from this Contract, and do not require more
        capital
        than normally the Contractor would contribute in the conduct of the Petroleum
        Operations.

      

      7.9

      The
        Contractor shall measure all Petroleum produced, after extraction of associated
        water and foreign substances, by using the measurement appliances and methods
        customarily used in the international petroleum industry. Pursuant to the
        provisions of Article 18 below, the Minister shall have the right to examine
        such measurements and cause to inspect the appliances and methods
        used.

      

      If
        during
        the Exploitation Period the Contractor wishes to modify said appliances and
        methods, it shall notify the Minister.

      

      Where
        the
        appliances and methods used therefore have caused an overstatement or
        understatement of measured quantities, the error shall be deemed to have
        existed
        since the date of the last calibration of the measurement device, unless
        the
        contrary may be justified, and an appropriate adjustment shall be made for
        the
        period said error has existed.

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      ARTICLE
        8: NATURAL GAS

      8.1

      The
        provisions of this Contract shall apply mutatis mutandis to Natural Gas,
        subject
        to the specific provisions set forth below.

      

      8.2

      In
        order
        to enable the Contractor to establish the commercial nature of a non-associated
        Natural Gas discovery duly evaluated in accordance with the provisions of
        Article 6 above, the Second Exploration Period shall be, upon the Contractor’s
        notification to the Minister, extended for the time period necessary to
        establish the commercial nature. Such extension shall only be in respect
        of the
        area of the discovered Natural Gas Field.

      

      8.3

      Any
        associated Natural Gas production which, in the opinion of the Contractor,
        cannot be utilized in Petroleum Operations, nor economically re-injected
        or
        sold, may be flared.

      

      8.4

      If
        the
        Contractor decides to flare associated Natural Gas, or if the Contractor
        decides
        not to exploit its non-associated Natural Gas discovery, the Government may
        produce or allow others to produce, process and dispose of said Natural Gas,
        without any compensation to the Contractor.

      

      In
        such a
        case, the Government shall bear all costs and risks related to the production,
        processing and disposal of said Natural Gas.

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      ARTICLE
        9: ANNUAL WORK PROGRAMS AND PETROLEUM OPERATIONS 

      MANAGEMENT
        COMMITTEE

      9.1

      All
        Petroleum Operations shall be carried out by the Contractor during any Calendar
        Year according to the annual work program and the corresponding budget in
        respect of that Calendar Year.

      

      The
        annual work programs and budgets referred to above shall set apart the
        exploration, appraisal, development and production activities, and shall
        be
        submitted to the Minister in accordance with the provisions of the following
        Articles.

      

      9.2

      In
        order
        to ensure the timely notice of Petroleum Operations, a Petroleum Operations
        Management Committee shall be set up within sixty (60) days of the Effective
        Date.

      

      That
        Committee shall consist on one hand, of two (2) representatives from the
        Minister, and, on the other hand, of two (2) representatives from the Contractor
        

      

      That
        Committee shall be alternatively chaired by a representative of the Contractor
        for two years and thereupon by a representative of the Minister for two years
        in
        continuing sequences and shall meet upon request made by its chairmen. Unless
        otherwise agreed by the Parties, the Committee shall meet in Conakry or
        Houston.

      

      The
        Petroleum Operations Management Committee shall be able to create ad hoc
        operation committees(s) for the purpose of fulfilling the operations of the
        contract. The number of members and definition of scope of the ad hoc
        committee(s) shall be determined by the Petroleum Operations Management
        Committee.

      

      9.3

      Within
        three (3) months from the Effective Date, the Contractor shall notify to
        the
        Petroleum Operations Management Committee of the annual work program and
        the
        corresponding budget for the remaining period of the current Calendar
        Year.

      

      9.4

      For
        the
        following Calendar Year, the Contractor shall submit to the Petroleum Operations
        Management Committee no later than two (2) months prior to the expiry of
        each
        Calendar Year, the annual work program and the corresponding budget for approval
        related to the following Calendar Year.

      

      9.5

      Within
        thirty (30) days from the submission of the annual work program and budget
        to
        the Petroleum Operations Management Committee; the Committee may notify the
        Contractor of revisions or changes to such program or budget. The Contractor
        may
        endeavourer to include said revisions or changes in accordance with good
        international petroleum industry practice. The annual work program and budget
        shall be deemed approved within thirty (30) days after submission by the
        Contractor.

      

      9.6

      After
        the
        adoption of the annual work program and budget by the Petroleum Operations
        Management Committee, the Contractor may make such changes to that program
        and
        budget as would be necessary for the Petroleum Operations and duly accounted
        for, provided that the fundamental objectives of said program are not modified.
        Such possible changes shall be notified in due time to the
        Committee.

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      ARTICLE
        10: PREFERENCE TO LOCAL PERSONNEL AND SUBCONTRACTORS

      10.1

      From
        the
        commencement of Petroleum Operations, the Contractor shall:

      

      
        	 	
                (c)

              	
                give
                  preference to the employment of qualified Guinean citizens as needed
                  in
                  Petroleum Operations;

              

      

      

      
        	 	
                (d)

              	
                contribute
                  to the training of those personnel in order that it may have access
                  to any
                  position of skilled workers, foremen, executives and
                  directors.

              

      

      

      10.2

      The
        Contractor shall prepare at the end of each year, and notify the Minister,
        a
        recruiting program concerning Guinean personnel for the following years with
        a
        view to increasing the participation of Guinean personnel in Petroleum
        Operations.

      

      10.3

      In
        order
        to promote employment of Guinean personnel, the Contractor shall establish
        at
        the end of each year, by notifying the Minister, a training program for Guinean
        citizens in respect of the following year.

      

      The
        training program may, inter alia, include the participation of Guinean citizens
        to courses or training periods organized either in the Republic of Guinea
        or
        abroad, by the Contractor or third parties, as well as the granting of
        scholarships abroad.

      

      10.4

      The
        Contractor and its subcontractors shall give preference to products and
        equipment available in the Republic of Guinea, provided that such goods are
        competitive in price, quality, quantities, and timelines of delivery and
        terms
        of payment, with imported goods.

      

      10.5

      The
        Contractor and its subcontractors shall give preference to Guinean enterprises
        for all service, construction or supply contracts, provided that such services
        are competitive in price, quality, quantities, timelines of delivery and
        terms
        of payment with imported services.

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      ARTICLE
        11: CONTRACTOR’S OBLIGATIONS IN THE CONDUCT OF PETROLEUM OPERATIONS

      11.1

      The
        Contractor shall undertake and carry out Petroleum Operations in accordance
        with
        the provisions of this Contract.

      

      11.2

      The
        Contractor shall carry out Petroleum Operations diligently and in accordance
        with good international petroleum industry practice.

      

      11.3

      The
        Contractor, in carrying out Petroleum Operations, shall use standard methods
        and
        technologies customarily used in the international petroleum industry and
        shall
        take all reasonable measures intended to prevent environment
        pollution.

      

      In
        particular, the Contractor shall:

      

      
        	 	
                (f)

              	
                ensure
                  that all facilities and equipment used in Petroleum Operations
                  are in good
                  order and correctly kept in good
                  repair;

              

      

      

      
        	 	
                (g)

              	
                prevent
                  water from entering any Petroleum bearing strata except where enhanced
                  recovery methods by means of water injection are
                  used;

              

      

      

      
        	 	
                (h)

              	
                avoid
                  losses and discharges of Petroleum produced as well as losses and
                  discharges of mud or any other product used in Petroleum
                  Operations:

              

      

      

      
        	 	
                (i)

              	
                prevent
                  petroleum produced and substances used in Petroleum Operations
                  from
                  contaminating water bearing strata;

              

      

      

      
        	 	
                (j)

              	
                store
                  petroleum produced in facilities constructed for that purpose,
                  and not
                  store Petroleum in earthen reservoir, except temporarily in an
                  emergency.

              

      

      

      11.4

      All
        works
        and facilities erected by the Contractor under this Contract shall, according
        to
        their nature and the circumstances, be built, indicated and marked out so
        as to
        allow at any time free and safe passage to navigation and, without prejudice
        to
        the foregoing, the Contractor shall, in order to facilitate navigation, install
        and keep in good repair sound or optical devices approved by the competent
        Guinean authorities.

      

      11.5

      Where
        the
        Contractor consists of several enterprises, the obligations and liabilities
        of
        those enterprises under this Contract are joint and several.

      

      The
        joint
        operating agreement between those enterprises shall be forthwith submitted
        to
        the Minister.

      

      11.6

      When
        necessary for the fulfillment of the Petroleum Operations, the Contractor
        shall
        set up an office in the Republic of Guinea and appoint a representative in
        charge of the supervision of Petroleum Operations.

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      11.7

      The
        Contractor shall take out, and cause to be taken out by its subcontractors,
        in
        respect of Petroleum Operations, all insurances of the type and for such
        amounts
        in accordance with good international petroleum industry practice, including,
        inter ala, third party liability insurance and insurances to cover damage
        to
        property, installations, equipment and materials, without prejudice to such
        insurances as may be required under good international petroleum
        practices.

      

      11.8

      On
        the
        expiration, surrender or termination date of this Contract with respect to
        all
        or part of the Contract Area, the Contractor shall transfer at no cost to
        the
        Government the ownership of installations, equipment and material used in
        connection with the Petroleum Operations carried out in the area so surrendered.
        Except, in the case, where those facilities, equipment and material are used
        by
        the Contractor for other petroleum operations in the Republic of
        Guinea.

      

      Such
        transfer of ownership shall cause the termination of any security or surety
        related to those facilities, equipment and material, or which those items
        constitute.

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      ARTICLE
        12: CONTRACTOR’S RIGHTS IN THE CONDUCT OF PETROLEUM
        OPERATIONS

      12.1

      According
        to the provisions of this Contract, the Contractor shall have the right to
        take
        all measures and all actions, within or outside the Contract Area, which
        are
        necessary for the carrying out of Petroleum Operations.

      

      12.2

      The
        Contractor shall have the right, on its own responsibility, to use qualified
        subcontractors in order to undertake Petroleum Operations. The Minister will
        be
        noticed of major subcontractors.

      

      12.3

      The
        employees and agents of the Contractor and its subcontractors shall have
        the
        right to enter into any place located within the Contract Area for conducting
        Petroleum Operations. However, during the exploration & exploitation phase,
        other persons may be authorized by the government to enter the Contract Area
        to
        conduct, inter alia, mining works with the exception of any Petroleum
        exploration and exploitation activity, provided that said authorizations
        shall
        not interfere with the carrying out of Petroleum Operations.

      

      12.4

      The
        Contractor may:

      

      
        	 	
                (a)

              	
                use
                  the stones, sand, clay, gypsum, limestone and other analogous substances
                  needed for Petroleum Operations;

              

      

      

      
        	 	
                (b)

              	
                use
                  the water needed for Petroleum Operations, provided that the persons
                  or
                  livestock watering places are not deprived of the water
                  supply.

              

      

      

      12.5

      With
        notice to Minister, the Contractor shall have the right to build, within
        or
        outside the Contract Area, all facilities, works and buildings necessary
        to
        carry out Petroleum Operations, such as roads, transportation means,
        communication facilities, pipelines, storage facilities or port facilities.
        Said
        authorization shall not be unreasonably withheld.

      

      12.6

      Except
        otherwise specifically provided in this Contract, no restriction shall be
        made
        nor tax, fee or duty required for the entry, stay, displacement right,
        employment and repatriation of persons employed by the Contractor and its
        subcontractors and their families.

      

      The
        Government shall facilitate the issue and renewal of visas and residence
        permits
        at a nominal and customary cost for said employees and their
        families.

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      ARTICLE
        13: RECOVERY OF PETROLEUM COSTS AND PRODUCTION SHARING

      

      13.1

      The
        Contractor shall pay to the Government a royalty of ten percent (10%) based
        on
        the valuation of the petroleum products produced and sold
        hereunder.

      

      13.2

      The
        Contractor shall have the unrestricted right to receive, each Calendar Year,
        for
        the purposes of recovery of Petroleum Costs, a maximum share of seventy five
        percent (75%) of the production from the Contract Area not lost or used in
        Petroleum Operations.

      

      13.3

      Petroleum
        Costs shall be recoverable as follows:

      

      
        	 	
                (d)

              	
                Petroleum
                  Costs incurred during the carrying out of Petroleum Operations
                  in respect
                  of the Contract Area shall be recoverable either in the Calendar
                  Year in
                  which these Petroleum Costs are incurred or in the Calendar Year
                  in which
                  the first Commercial Discovery in the Contract Area is put into
                  production, whichever is the later.

              

      

      

      
        	 	
                (e)

              	
                To
                  the extent that, in a Calendar Year, recoverable Petroleum Costs
                  exceed
                  the value of the percentage set forth in Article 13.2 above, the
                  excess
                  shall be carried forward in the next succeeding years until said
                  Petroleum
                  Costs are fully recovered.

              

      

      

      
        	 	
                (f)

              	
                As
                  Petroleum Costs decrease the amount available for Production Share
                  may
                  increase. 

              

      

      

      13.4

      For
        each
        Exploitation Area, after determination of the share of Petroleum production
        allocated to recovery of Petroleum Costs by the Contractor pursuant to the
        provisions of Article 13.1, 13.2 and 13.3 above, the Contractor shall receive,
        as its remuneration, a percentage of the remaining production after royalty
        during each Calendar Year. For this purpose, said remaining production shall
        be
        shared between the Government and the Contractor as follows:

      
        	 	 	 
	
                Increments
                  of daily production (in Barrels per day)

              	
                Government
                  Share

              	
                Contractor
                  Share 

              
	
                From
                  0 to 2000

              	
                25%

              	
                75%

              
	
                From
                  2001 to 5000

              	
                30%

              	
                70%

              
	
                From
                  5001 to 100000

              	
                40%

              	
                60%

              
	
                Over
                  100001

              	
                60%

              	
                40%

              

      

      

      For
        the
        purpose of this Article 13.4, “daily production” means the average production
        rate in the Contract Area during the Quarter in question less the portion
        of
        production necessary for the recovery of Petroleum Costs.

      

      13.5

      Recovery
        of Petroleum Costs and production sharing shall be done each Quarter on an
        accumulative basis. Where actual quantities and recoverable Petroleum Costs
        are
        not known at the date of calculation, provisional estimates based on the
        annual
        work program and budget in respect of the Calendar Year in question as
        stipulated in Article 9 above shall be used. Within two (2) months from the
        and
        of each Calendar Year, the actual amounts regarding recovery of Petroleum
        Costs
        and production sharing for said Calendar Year shall be determined as well
        as any
        necessary adjustments.

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      13.6

      The
        Government shall decide whether to take in kind or cash the remaining share
        of
        production to which it is entitled, after the recovery of Petroleum Costs.
        If
        the Government decides to take its share of production in kind, in whole
        or in
        part, the Minister shall notify the Contractor at least three (3) months
        before
        the commencement of each half of Calendar Year, specifying the precise quantity
        he elects to take during the following half of a Calendar Year.

      

      If
        the
        Government decides to convert to cash its share of production, in whole or
        in
        part, the Contractor shall pay the Government the value of that production
        calculated according to Article 14 below. That payment shall be made monthly
        within thirty (30) days after the end of the month to which it relates and
        the
        Contractor shall have title on said share of production at the Delivery
        point.

      

      It
        is
        understood that the Contractor shall not enter into any sale commitment in
        respect of the Government’s share of production for a term of more than six (6)
        months without the Minister’s written consent.

      

      13.7

      For
        the
        purpose of Article 13.5 above, one hundred and sixty five (165) cubic meters
        of
        Natural Gas at a temperature of fifteen (15) degrees centigrade and pressure
        of
        one atmosphere shall be deemed to be equivalent to one (1) Barrel of Crude
        Oil.

      

      13.8

      For
        the
        purposes of this Article, the value of Petroleum produced shall be the value
        established according to Article 14 below.

      

      13.9

      Except
        otherwise agreed, the Contractor shall have title to Petroleum to which it
        is
        entitled under this Contract at the Delivery Point.

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

      ARTICLE
        14: VALUATION OF PETROLEUM

      14.1

      For
        the
        purposes of this Contract and, in particular, for the purposes of Article
        13
        above, the unit selling price of Crude Oil at the Delivery Point shall be
        denominated in U.S. Dollars and calculated each Quarter as follows:

      

      
        	 	
                (d)

              	
                If
                  Crude Oil from Contract Area is sold to Third Parties by the Contractor,
                  the unit price of Crude Oil shall be calculated on the basis of
                  the
                  weighted average of the F.O.B. realized selling prices obtained
                  by the
                  Contractor during said Quarter from Third Parties in sales at arm’s length
                  not involving swap, barter or discount, but taking into account
                  differentials concerning quality, gravity, transportation and terms
                  of
                  payment;

              

      

      

      
        	 	
                (e)

              	
                in
                  the absence of such sales of Crude Oil during said Quarter but
                  if there
                  have been sales of Guinean Crude Oil to Third Parties made by another
                  contractor, the provisions of paragraph (a) above shall apply mutatis
                  mutandis;

              

      

      

      
        	 	
                (f)

              	
                in
                  the absence of sales of Guinean Crude Oil during said Quarter,
                  the unit
                  price of Crude Oil shall be calculated on the basis of the F.O.B.
                  realized
                  selling prices obtained during that Quarter on the international
                  market in
                  arm’s length transactions for Crude Oils from neighboring countries
                  or
                  from the region, taking into account the conditions of sales as
                  well as
                  differentials concerning quality, gravity, transportation and terms
                  of
                  payment.

              

      

      

      For
        the
        purpose of this Article, “Third Parties” means any person which is neither an
        Affiliated Company nor a Party to this Contract.

      

      14.2

      The
        Contractor will establish the selling price of Crude Oil in accordance with
        article 14.1 above. The Contractor will submit the calculated price within
        ten
        (10) days after the end of said Quarter for approval by the Minister. If
        the
        Minister disagrees to the selling price established by the Contractor he
        shall
        notify the Contractor in writing within ten (10) days, otherwise the price
        is
        deemed to be approved. In the event the Minister and Contractor cannot mutually
        agree on the unit selling price of Crude Oil within thirty (30) days from
        the
        end of said Quarter, the unit selling price of Crude Oil produced shall be
        determined by an internationally recognized expert, appointed by mutual
        agreement between the Parties or, failing such agreement, upon request by
        the
        most diligent Party, which shall be notified to the other Party, by the
        International Center for Technical Expertise from the International Chamber
        of
        Commerce. The expert shall determine the price within twenty (20) days from
        his
        appointment and his conclusion shall be final and binding upon the
        Parties.

      

      14.3

      Pending
        the determination of Crude Oil price, the provisional unit selling price
        in
        respect of a Quarter shall be the unit selling price of the preceding Quarter.
        Any necessary adjustment shall be made within thirty (30) days after the
        unit
        selling price for the Quarter in question is established.

      

      14.4

      For
        the
        purpose of this Contract, the value of Natural Gas sold shall be the realized
        price obtained by the Contractor for the sale of said Natural
        gas.

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      ARTICLE
        15: PARTICIPATION

      15.1

      Upon
        the
        date of adoption of the development plan concerning a Commercial Discovery
        mentioned in Article 7.3 above, the Government has the option of participating
        in the risks and results of the Petroleum Operations related to the Exploitation
        Area of that Commercial Discovery. 

      

      To
        this
        end, the Government may require a working interest in said Exploitation Area
        of
        up to fifteen percent (15%), either directly or through a national company
        designated by the Government for this purpose.

      

      15.2

      The
        Government shall exercise its option to participate by written notice to
        the
        Contractor within three (3) months from the date the development plan is
        adopted. Such notice shall specify the working interest that the Government
        elects to acquire.

      

      When
        the
        Government exercises its option to participate, the entities constituting
        the
        Contractor shall transfer, each one in proportion to its participating interest,
        a percentage of their interest in said Exploitation Area so that the total
        interest transferred is equal to the level of participation decided by the
        Government.

      

      15.3

      The
        effective date of the Government participation shall be the date of adoption
        of
        the development plan.

      

      15.4

      Within
        three (3) months from the date of notice of the option to participate, the
        Government shall enter into any existing joint operating agreement previously
        established by the Contractor.

      

      If
        there
        is no existing joint operating agreement the Government and Contractor shall
        enter into a new joint operating agreement.

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      ARTICLE
        16: TAXATION

      16.1

      The
        Contractor shall be subject to the tax on industrial and trading profits
        as
        provided for in the in the Petroleum Code.

      

      16.2

      For
        the
        purposes of the tax legislation of the Republic of Guinea, the share of
        Petroleum which the Contractor is entitled to take under Article 13.2, 13.3,
        and
        13.4 above shall be deemed to include both the recovery of Petroleum Costs
        and
        the net profit after payment of the tax on industrial and trading profits
        of the
        Contractor under this Contract.

      

      The
        share
        of production which the Government is entitled to take under Article 13.1,
        13.2
        and 13.4 above shall therefore include the portion necessary to pay all tax
        on
        industrial and trading profits due by the Contractor. The Government undertakes
        to pay and discharge on this portion the tax on industrial and trading profits
        for and on behalf of the Contractor.

      

      For
        the
        determination of the taxable income of the Contractor, the annual gross income
        of the Contractor derived from the sales of the share of Petroleum which
        the
        Contractor is entitled to take under Article 13.2, 13.3 and 13.4 above shall
        be
        increased by the value of the portion of Petroleum which is necessary for
        the
        payment of the tax on industrial and trading profits as provided for in this
        Article.

      

      Within
        three (3) months after the date the Contractor files its income tax return
        to
        the Government, the Minister will furnish the Contractor with proper receipts
        and other documents certifying that the Contractor has complied with all
        its tax
        obligations under this Article.

      

      Nota
        Bene:

      

      If
        necessary, the Government would be prepared to consider changes to the wording
        of this Article in order to prevent possible double taxation problems, provided
        that such changes do not have adverse financial consequences for the
        government.

      

      16.3

      Expatriate
        employees of the Contractor and its subcontractors shall be exempt from the
        general income tax provided for in the General Income Tax Code (“impot general
        sur le revenu prevu au Code des Contributions Directes”).

      

      16.4

      Foreign
        subcontractors of the Contractor having no permanent establishment in the
        Republic of Guinea shall be exempt from the tax on industrial and trading
        profits derived from services rendered to the Contractor that are directly
        necessary for Petroleum Operations.

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

      ARTICLE
        17: OBLIGATION TO SUPPLY DOMESTIC CONSUMPTION

      17.1

      The
        Contractor shall have the option to supply by priority the Crude Oil domestic
        consumption of the Republic of Guinea if the Government is unable to meet
        that
        consumption with the share(s) of production to which it is
        entitled.

      

      17.2

      The
        quantity of Crude Oil the Contractor shall have the option to sell to the
        Republic of Guinea shall be notified by the Minister to the Contractor at
        least
        three (3) months prior to the commencement of each Quarter. Said quantity
        shall
        not exceed the maximum amount calculated for each Quarter according to the
        following formula:

      

                    
        C 

      A
        =
        Bx   -  
        -E 

                    
        D

      

      where:

      

      A
        means
        the maximum amount of Crude Oil the Contractor shall sell to the Government
        for
        said Quarter;

      

      B
        means
        the domestic consumption of the Republic of Guinea for said Quarter, with
        the
        exception of, Crude Oil refined for the purpose of its export, if
        any;

      

      C
        means
        the total Crude Oil production from the Contract Area for said
        Quarter;

      

      D
        means
        the total Crude Oil production in the Republic of Guinea for said
        Quarter;

      

      E
        means
        the quantity of Crude Oil produced from the Contract Area during said Quarter
        and to which the Government is entitled under Articles 13.1, 13.4 and 15.4
        above.

      

      For
        the
        purposes of this Article, the Government or the national Company when they
        participate in Petroleum Operations as provided for in Article 15 above shall
        be
        considered as entities constituting the Contractor.

      

      17.3

      When
        the
        Contractor supplies Crude Oil to the Government for domestic consumption
        in the
        Republic of Guinea, the price paid by the Government shall be determined
        in
        accordance with the provisions of Article 14 above.

      

      Such
        sales shall be invoiced monthly to the Government and shall be paid in Dollars
        within two (2) months after the receipt of the invoice, unless otherwise
        agreed
        by the Parties.

      

      Any
        late
        payment shall bear interest at a rate determined by average lending rates
        normally charged by local banks at that time; from the date said payment
        should
        have been paid.

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

      ARTICLE
        18: SUPERVISION AND INSPECTION OF PETROLEUM OPERATIONS

      18.1

      The
        Contractor shall notify the Minister as soon as practicable of all projected
        Petroleum Operations, such as geological survey, seismic survey, commencement
        of
        drilling, installation of a platform, etc. In the event the Contractor decides
        to abandon a well, it shall so notify the Minister.

      

      Upon
        notification by Contractor of any Petroleum Operation, the Minister shall
        provide the Contractor with required authorization to conduct such Petroleum
        Operation without any duty, tax or fee. Thirty (30) days after notification
        to
        the Minister the Petroleum Operation is deemed authorized.

      

      18.2

      One
        or
        more duly authorized representatives of the Minister shall have the right,
        at
        reasonable intervals, to inspect the facilities, equipment, material, records
        and books related to Petroleum Operations, provided that such inspection
        shall
        not unduly delay the proper conduct of said operations.

      

      18.3

      In
        order
        to permit the exercise of the above-mentioned rights, the Contractor shall
        provide to the representatives of the Minister reasonable assistance as regards,
        inter alia, transportation and accommodation. Transportation and accommodation
        costs and expenses directly connected with the supervision and inspection
        shall
        be borne by the Government.

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

      ARTICLE
        19: INFORMATION AND REPORTS

      19.1

      The
        Contractor shall record and keep in accordance with good international petroleum
        industry practice all information and data resulting from Petroleum Operations
        and, as soon as practicable, shall furnish to the Minister a copy of all
        information, data, documents, reports and interpretations obtained or prepared
        in the course of Petroleum Operations, and consisting of, inter
        alia:

      

      
        	 	
                (a)

              	
                Geological
                  studies and synthesis reports as well as the maps and documents
                  related
                  thereto;

              

      

      

      
        	 	
                (b)

              	
                Geophysical
                  studies, measurements and interpretation reports, along with the
                  maps,
                  profiles, sections and other documents related thereto and, upon
                  request
                  by the Minister, a copy of the records made. In any event, the
                  Minister
                  shall be supplied with these records at the expiry of the
                  Contract;

              

      

      

      
        	 	
                (c)

              	
                The
                  well location reports, well completion reports, measurements, analyses
                  or
                  other results concerning any activity charged to the Petroleum
                  Costs
                  account under this Contract. The Contractor shall also supply the
                  Minister
                  with a representative portion of the cores, cutting and samples
                  of fluids
                  produced during production tests. All maps, sections, profiles
                  and all
                  other geophysical or geological documents shall be delivered to
                  the
                  Minister on an appropriate transparent support in view of later
                  reproduction. At the Minister’s request, the Contractor shall communicate
                  to him any other information in its possession relating to Petroleum
                  Operations.

              

      

      

      19.2

      In
        addition, the Contractor shall prepare and furnish to the Minister the following
        periodic reports:

      

      
        	 	
                (a)

              	
                daily
                  reports concerning drilling and production
                  activities;

              

      

      

      
        	 	
                (b)

              	
                monthly
                  reports on geophysical activities;

              

      

      

      
        	 	
                (c)

              	
                within
                  thirty (30) days from the end of each Quarter, a report concerning
                  Petroleum Operations during the previous Quarter and which shall
                  contain,
                  inter alia, a detailed description of Petroleum Operations carried
                  out and
                  a detailed statement of Petroleum Costs
                  incurred;

              

      

      

      
        	 	
                (d)

              	
                within
                  sixty (60) days from the end of each Calendar Year, or on any other
                  date
                  agreed by the Parties, a report concerning Petroleum Operations
                  carried
                  out during the previous Calendar Year and which shall contain,
                  inter alia,
                  a detailed description of Petroleum Operations carried out and
                  a detailed
                  statement of Petroleum Costs
                  incurred.

              

      

      

      19.3

      All
        reports, documents and data the Minister is provided for by the Contractor
        under
        this Article shall be considered as confidential for fifteen (15) years after
        their submission.

      

      However,
        the Minister may supply his employees or persons acting on his behalf with
        such
        information, and these persons shall abide by the above confidentiality clause.
        In addition, the Minister may use any information obtained, for the purpose
        of
        preparing and publishing such reports as may be required by applicable laws
        as
        well as reports of a general nature.

      

      Notwithstanding
        the foregoing provisions, the Minister may publish any information which
        relates
        to an area on which the Contractor has no longer exclusive rights.

      

      19.4

      The
        Contractor shall give notice to the Minister of any discovery of mineral
        substance.

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      ARTICLE
        20: ACCOUNTING AND PAYMENTS

      20.1

      The
        Contractor shall keep accounts in accordance with good international
        practice.

      

      20.2

      The
        registers and accounting books shall be kept in the English and French languages
        and in Dollars. Such registers shall be used, inter alia, to establish the
        amount of Petroleum Costs, the recovery of said costs, the production sharing
        and for the filing of the Contractor’s tax return.

      

      For
        informational purposes only, the accounts and balance sheets may be also
        kept in
        Guinean Francs.

      

      20.3

      Whenever
        it is necessary to convert into a currency the expenses and receipts expressed
        in another freely convertible currency, the expenses and receipts shall be
        valued on the basis of the arithmetical average of the daily closing rates
        for
        the sale of said currency during the month when the expenses were paid and
        the
        receipts collected.

      

      The
        exchange rates to be applied in order to make the conversions provided for
        in
        this Article shall be those quoted on the Paris foreign exchange
        market.

      

      20.4

      The
        registers and accounting books shall be materially supported by detailed
        documents proving the expenses and receipts of the Contractor under this
        Contract.

      

      20.5

      The
        government shall have the right to examine and audit the registers and
        accounting books concerning Petroleum Operations and shall have two (2) years
        following the end of an accounting year to carry out examination or audit
        and to
        submit to the Contractor any discrepancy or error encountered during that
        examination or audit.

      

      The
        absence of a claim by the Government within the above-mentioned two (2) years’
period shall terminate the right for the Government to make any objection,
        contestation or claim in respect of the accounting year in
        question.

      

      20.6

      All
        sums
        due to the Government or the Contractor under this Contract shall be paid
        in
        Dollars or other convertible currency agreed to by the Parties.

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

      ARTICLE
        21: IMPORTS AND EXPORTS

      21.1

      Subject
        to the provisions of Article 10 above, the Contractor and its subcontractors
        shall have the right to import into the Republic of Guinea:

      

      
        	 	
                (a)

              	
                the
                  equipment, machinery and vehicles necessary for Petroleum Operations,
                  in
                  respect of which all import duties and taxes shall be
                  suspended;

              

      

      

      
        	 	
                (b)

              	
                the
                  materials, spare parts and consumable items necessary for Petroleum
                  Operations, exempt from all import duties and
                  taxes.

              

      

      

      21.2

      The
        expatriate employees of the Contractor and its subcontractors as well as
        their
        families shall have the right to import into the Republic of
        Guinea.

      

      
        	 	
                (a)

              	
                the
                  personal effects and household goods as well as the food stuffs
                  they need,
                  free of all import duties and
                  taxes,

              

      

      

      
        	 	
                (b)

              	
                one
                  (1) automobile per expatriate employee for his own use, in respect
                  of
                  which all import duties and taxes shall be
                  suspended.

              

      

      

      21.3

      Subject
        to the provisions of Article 10 above, the Contractor, its subcontractors,
        their
        expatriate employees and their families may export from the Republic of Guinea,
        free of all export duties and taxes, the goods imported under Articles 21.1
        and
        21.2 above which are no longer needed for Petroleum Operations.

      

      21.4

      The
        goods
        imported under Articles 21.1 and 21.2 above which are no longer directly
        assigned to the Petroleum Operations or to the personal use of the expatriate
        employees may be sold in the Republic of Guinea by the Contractor, its
        subcontractors, or their expatriate employees, provided however that prior
        notice is given to the Minister. In this case, the seller shall fulfill all
        formalities prescribed by the Customs regulations in force and shall pay
        the
        duties and taxes which are applicable at the date of transaction, except
        if the
        aforementioned goods are transferred to other holders of Petroleum contracts
        concluded with the Government or a national company.

      

      21.5

      During
        the validity of this Contract, the Contractor shall have the unrestricted
        right
        to export, at the point exportation chosen for this purpose, exempt from
        all
        export duties and taxes, the share of Petroleum to which the Contractor is
        entitled under the provisions of this Contract.

      

      21.6

      All
        imports and exports made under this Contract shall be subject to the formalities
        required by customs.

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

      ARTICLE
        22: FOREIGN EXCHANGE CONTROL

      22.1

      The
        Contractor shall be subject to foreign exchange control regulations in force
        in
        the Republic of Guinea, it being however understood that the Government
        guarantees during the term of this Contract, to the Contractor and its
        subcontractors, and with respect to Petroleum Operations under this Contract,
        the following benefits:

      

      
        	 	
                (f)

              	
                the
                  right to open and operate bank accounts outside the Republic of
                  Guinea;

              

      

      

      
        	 	
                (g)

              	
                the
                  right to receive, retain on those foreign accounts all funds acquired
                  or
                  borrowed abroad, including the proceeds of sales of Petroleum made
                  by the
                  Contractor, within the limit of the amounts which exceed their
                  domestic
                  requirements concerning their operations in the Republic of Guinea,
                  as
                  well as the right to freely dispose of such excess funds
                  abroad;

              

      

      

      
        	 	
                (h)

              	
                the
                  right to freely remit outside the Republic of Guinea the proceeds
                  of sales
                  of Petroleum to which the Contractor is entitled under this Contract,
                  the
                  dividends and other proceeds of any kind arising from Petroleum
                  Operations;

              

      

      

      
        	 	
                (i)

              	
                the
                  right to pay directly abroad the foreign enterprises which provide
                  for
                  goods and services necessary to carry out Petroleum Operations;
                  and

              

      

      

      
        	 	
                (j)

              	
                with
                  respect to carrying out the Petroleum Operations, the right to
                  convert
                  national currency and foreign convertible currencies, through banks
                  and
                  agents installed in the Republic of Guinea and duly authorized,
                  at
                  exchange rates which are no less favorable to the Contractor or
                  its
                  subcontractors than either the daily rate or the rate generally
                  applicable
                  in the Republic of Guinea to other enterprises on the day the exchange
                  transactions occur.

              

      

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

      ARTICLE
        23: ASSIGNMENTS AND TRANSFERS

      23.1

      The
        Contractor, or each entity constituting the Contractor, shall not assign
        part or
        all of its rights and obligations arising from this Contract without the
        prior
        notification to the Minister.

      

      Within
        thirty (30) days after notice to the Minister of the intended assignment,
        the
        assignment shall be deemed authorized by the Minister.

      

      Then,
        the
        assignee shall be bound by the terms and conditions of this
        Contract.

      

      23.2

      If
        the
        Contractor or an entity constituting the Contractor notifies the Minister
        of an
        intended assignment to an Affiliate, the Minister shall authorize that
        assignment, provided that the assignee accepts to be bound by the terms and
        conditions of this Contract.

      

      23.3

      In
        accordance with the provisions of Article 11.5 above, where a partial assignment
        is notified, the Contractor and the assignee shall be jointly and severally
        liable for all obligations hereunder as from the date of such
        authorization.

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

      ARTICLE
        24: SURRENDER AND TERMINATION

      24.1

      The
        Contractor, upon giving three (3) months’ prior notice to the Minister, may at
        any time surrender its rights in respect of the entire Contract Area or any
        portion thereof, subject to the provisions of Article 24.2 below.

      

      Surrender
        during an exploration period shall not reduce the exploration work obligations
        for that exploration period as provided for in Article 4 above.

      

      24.2

      In
        addition, the Contractor, upon giving twelve (12) months’ prior notice to the
        Minister, may at any time surrender its rights in respect of whole or part
        of an
        Exploitation Area, provided however that all the obligations under this Contract
        have been fulfilled at the date of surrender.

      

      24.3

      Surrender
        pursuant to Article 24.1 and 24.2 above, shall not exempt the Contractor
        of any
        obligation under this Contract incurred before the effective date of such
        surrender.

      

      24.4

      Subject
        to the provisions of Article 24.3 above, surrender in respect of the whole
        Contract Area shall terminate this Contract.

      

      24.5

      The
        Government may terminate this Contract in any of the following
        events:

      

      
        	 	
                (d)

              	
                material
                  breach by the Contractor of the provisions of the Petroleum Code
                  or this
                  Contract;

              

      

      

      
        	 	
                (e)

              	
                failure
                  of the Contractor to make a payment to the Government for a period
                  exceeding three (3) months;

              

      

      

      
        	 	
                (f)

              	
                failure
                  of the Contractor to comply, within the prescribed period laid
                  down with
                  any final arbitral award rendered in accordance with the provisions
                  of
                  Article 27 below; or

              

      

      

      The
        Government will pronounce the termination only after having given the Contractor
        written notice to remedy such default within three (3) months from the date
        of
        such notification. Should there be no remedy within the prescribed period;
        the
        Government may terminate the Contract.

      

      Any
        dispute as to whether any grounds exist to justify the termination pronounced
        by
        the Government may be subject to arbitration under Article 27 below. In the
        case
        of any such dispute, this Contract shall remain in force until the execution
        by
        the Parties of the arbitral award, without prejudice to the provisions of
        Article 24.3 above.

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

      ARTICLE
        25: FORCE MAJEURE

      25.1

      Where
        either Party is prevented from performing its Contractual obligations (other
        then the obligations to make payments of money) or may only perform them
        with
        delay, the non-performance or delay in performance shall not be considered
        as a
        breach to this Contract if such non-performance or delay is caused by a case
        of
        Force Majeure; provided, however, that there is a direct link between the
        non-performance and the case of Force Majeure invoked.

      

      25.2

      For
        the
        purposes of this Contract, any event unforeseeable and beyond the control
        of a
        Party, such as weather, earthquake, strike, riot, insurrection, civil war,
        sabotage, act of war or conditions resulting from war may be considered as
        a
        case of Force Majeure. The intent of the Parties is that Force Majeure shall
        be
        interpreted in conformity with the principles and customary rules of
        international law.

      

      25.3

      When
        either Party considers it is prevented from performing any of its obligations
        by
        the occurrence of a case of Force Majeure, such Party shall:

      

      
        	 	
                (a)

              	
                forthwith
                  notify the other Party of the occurrence thereof and state the
                  reasons
                  therefore;

              

      

      

      
        	 	
                (b)

              	
                take
                  all actions which ere useful and necessary to permit the normal
                  resumption
                  of the performance of the concerned obligations upon termination
                  of the
                  event constituting the case of Force
                  Majeure.

              

      

      

      25.4

      If
        as a
        result of Force Majeure, the performance of any contractual obligation is
        delayed, that delay together with such period as may be necessary for the
        repair
        of any damage caused during such delay shall be added to the period allowed
        in
        this Contract for the performance of that obligation, as well as to the duration
        of this Contract.

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

      ARTICLE
        26: APPLICABLE LAW AND STABILITY OF CONDITIONS

      26.1

      The
        laws
        of Guinea shall apply to this Contract, to operations made under this Contract,
        to individuals and entities which operate under this Contract in this respect
        within the territory of the Republic of Guinea.

      

      26.2

      The
        Contractor shall be subject at any time to the laws and regulations in force
        in
        the Republic of Guinea.

      

      26.3

      This
        Contract is executed by the Parties in accordance with the laws and regulations
        in force at the date of its signing, and on the basis of the provisions of
        said
        laws and regulations, as regards, inter alia, the economic, fiscal and financial
        provisions of this Contract.

      

      Consequently,
        where new laws and regulations modify the provisions of the laws and regulations
        in force at the date of signing of this Contract or and where such modifications
        shall bring about a material change concerning the respective economic situation
        of the Parties resulting from the original provisions of this Contract, the
        Parties shall in good faith enter into an agreement with a view to modifying
        these provisions in order to restore the economic balance as intended at
        the
        signing of this Contract.

      

      In
        the
        event the Parties, in spite of their efforts, are unable to reach an agreement,
        the provisions of Article 27 below shall apply.

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

      ARTICLE
        27: SETTLEMENT OF DISPUTES

      27.1

      In
        the
        event of any dispute between the Government and the Contractor arising out
        of,
        or in relation to, or in connection with, the interpretation or execution
        of the
        provisions of this Contract, the Parties shall make their best efforts to
        settle
        such dispute amicably.

      

      If
        no
        settlement is reached by the Parties within three (3) months after the date
        of
        notice of the dispute by either Party to the other, the dispute shall, be
        referred for arbitration to the International Center for Settlement of
        Investment Disputes in accordance with the rules set forth by the Convention
        on
        the Settlement of Investment Disputes between States and Nationals of Other
        States signed and ratified by the Government of the Republic of
        Guinea.

      

      27.2

      The
        place
        of arbitration shall be London (England), the French and English language
        shall
        be used in the arbitral proceedings, and the applicable law shall be the
        principles and rules of international law applicable on the
        subject.

      

      The
        Parties shall execute the award of the arbitral tribunal without appeal or
        any
        other remedy.

      

      27.3

      The
        Parties shall conform in any circumstances to any measure prescribed or
        recommended by the arbitrators, being understood that any request to arbitration
        shall suspend the contractual provisions concerning the subject matter of
        the
        dispute but all other rights and obligations of the Parties arising from
        the
        other provisions of this Contract shall not be suspended.

      

      ARTICLE
        28: NOTICES

      28.1

      Any
        notice or other communication regarding this Contract shall be in writing
        and
        shall be considered as received as soon as they are delivered by hand, by
        registered mail with acknowledgement of receipt, or sent by telegram or telex
        to
        the following addresses:

      

      To
        the
        Government:

      ”Ministere
        des Mines et de la Geologie”

      Conakry

      Republic
        of Guinea

      

      To
        the
        Contractor:

      SCS
        Corporation

      One
        Sugar
        Creek Center, Suite 125

      Sugar
        Land, Texas 77478

      U.S.A.

      Tel:
        713
        353 9400

      Fax:
        713
        353 9421

      

      28.2

      The
        Government and the Contractor may at any time change its authorized
        representative or its address herein on giving the other at least ten (10)
        days
        notice in writing to such effect.

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

      ARTICLE
        29: MISCELLANEOUS PROVISIONS

      29.1

      Headings
        in this Contract are inserted for purposes of convenience and reference and
        in
        no event shall define, restrict or describe the scope or object of the Contract
        or of any of its clauses.

      

      29.2

      Appendix
        A #1 is attached an integral part of this Contract.

      

      29.3

      This
        Contract shall not be modified except in writing and with the mutual agreement
        of the Parties.

      

      29.4

      Any
        waiver of the Government concerning the performance of an obligation of the
        Contractor shall be in writing and signed by the Minister, and no waiver
        shall
        be implied if the Minister does not exercise a remedy under this
        Contract.

      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

      ARTICLE
        30: EFFECTIVE DATE

      30.1

      This
        Contract shall be effective on the date of execution of this contract by
        the
        Republic of Guinea and this date shall be referred to as the Effective
        Date.

      

      IN
        WITNESS WHEREOF, the Parties have signed this Contract in 6 copies.

      

      Effective
        Date: September 22, 2006

       

       

      /s/
        Dr.
        Ousmane Sylla

       

      Dr.
        Ousmane Sylla

      Ministre
        des Mines et de la Geologie 

      Date:
        September 22, 2006

       

       

      For
        the
        Contractor:

       

       

      /s/Famourou
        Kourouma

       

      Famourou
        Kourouma

      Vice
        President

      SCS
        Corporation

      Date:
        September 22, 2006

       

       

      Witnessed
        by:

       

       

      /s/Madikaba
        Camara

       

      Madikaba
        Camara 

      Minister
        of Finance

      
        
          
          

        

        
          37

          
            

          

        

        
          
          

        

      

      APPENDIX
        A

      Attached
        to and made part of this Contract between the Government of the Republic
        of
        Guinea and the Contractor.

      

      CONTRACT
        AREA

      

      The
        Contract Area represented on the attached map consists of an area deemed
        equal
        to approximately 80,000 sq. km.

      

      The
        points indicated on this map are defined hereinafter with WGS 84 (World Geodetic
        System 1984) datum.

      

      
        	
                Point

              	
                Latitude
                  

              	
                Longitude
                  

              
	
                A

              	
                10:49:55:N

              	
                15:10:33:W

              
	
                B

              	
                10:39:49:N

              	
                15:20:32:W

              
	
                C

              	
                10.39:49:N

              	
                15.34:16:W

              
	
                D

              	
                09.23:27:N

              	
                17:35:00:W

              
	
                E

              	
                08.30:00:N

              	
                17.30:00:W

              
	
                F

              	
                08.10:00:N

              	
                16:30:00:W

              
	
                G

              	
                08.35:00:N

              	
                15:30:00:W

              
	
                H

              	
                08.10:30:N

              	
                14:21:12:W

              
	
                I

              	
                09:00:50:N

              	
                13:23:54:W

              

      

      

      The
        coastal boundary is the line between Point A and Point I wherever the water
        depth is greater than 25 meters.

      

      

       

       

      38

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