Document:

Exhibit

Ref No: 12/3/274

EXPLORATION RIGHT
Granted in terms of Section 80 of the Mineral and Petroleum Resources Development Act, 2002 
(Act No. 28 of 2002)

    

Ref No: 12/3/274

TABLE OF CONTENTS
	
			
	Clause
	Title
	Page

	 
	 
	 

	 
	Preamble
	4-6

	 
	 
	 

	1.
	Definitions and Interpretations
	6-11

	 
	 
	 

	2.
	Granting of the Right
	11

	 
	 
	 

	3.
	Exploration Area
	11

	 
	 
	 

	4.
	Exclusive Right to Apply for a Production Right in respect of Discoveries
	11-12

	 
	 
	 

	5.
	Rights and Obligations of the Holder
	12

	 
	 
	 

	6
	Commencement, Duration and Renewal
	12-13

	 
	 
	 

	7
	Exploration Fees
	13

	 
	 
	 

	8
	Technical Advisory Committee
	13-15

	 
	 
	 

	9.
	Cancellation or Suspension of the Exploration Right
	15

	 
	 
	 

	10.
	Relinquishment and Voluntary Abandonment of the Exploration Area
	15-16

	 
	 
	 

	11.
	Rights to Minerals and Petroleum
	16

	 
	 
	 

	12.
	Examination of the Exploration Area
	17

	 
	 
	 

	13.
	Records and Samples
	17

	 
	 
	 

	14.
	Reports
	18

	 
	 
	 

	15.
	Annual Exploration Work Programme and Budget
	18-19

	 
	 
	 

	16.
	Discoveries and Testing
	20-22

	 
	 
	 

	17.
	Manner of Conducting Exploration Operations
	22-23

	 
	 
	 

	18.
	Existing Data
	23

	 
	 
	 

	19.
	Environmental Protection and Financial Provision
	24

	 
	 
	 

	20.
	Social and Labour Matters
	24-25

	 
	 
	 

	21.
	Tax
	25

	 
	 
	 

	22.
	Financial Records and Audits
	25

	 
	 
	 

	23.
	Customs Duties
	26

Page 1 of 147

Ref No: 12/3/274

	
			
	 
	 
	 

	24.
	Exchange Control
	26

	 
	 
	 

	25.
	Indemnity and Insurance
	26-27

	 
	 
	 

	26.
	Health and Safety
	27

	 
	 
	 

	27.
	Confidentiality and Public Announcements
	27-29

	 
	 
	 

	28.
	Cession and Sub-contracting
	29

	 
	 
	 

	29.
	Law and Interpretation
	30

	 
	 
	 

	30.
	Obligations of the Grantor
	30

	 
	 
	 

	31.
	State Option
	30-31

	 
	 
	 

	32.
	Vis Major
	31-32

	 
	 
	 

	33.
	Amendments
	32

	 
	 
	 

	34.
	Unitisation
	32-33

	 
	 
	 

	35.
	Special Provisions Relating to Gas Discovery
	33-34

	 
	 
	 

	36.
	Waiver or Lenience
	34

	 
	 
	 

	37.
	Dispute Resolution
	34-36

	 
	 
	 

	38.
	Costs and Value Added Tax
	36

	 
	 
	 

	39.
	Entire agreement
	36

	 
	 
	 

	40.
	Severability
	37

	 
	 
	 

	41.
	Domicilia Citandi et Executandi
	37-38

	 
	 
	 

	42.
	Registration
	38-39

ANNEXURE INDEX

Page 2 of 247

Ref No: 12/3/274

	
			
	Annexure
	Annexure Title
	Pages

	 
	 
	 

	A
	List of farms & Sketch Plan for the Exploration Area
	40

	 
	 
	 

	B
	Exploration Work Programme [Inclusive of the Minimum Work Obligations]
	41

	 
	 
	 

	C
	Relinquishment Schedule
	42

	 
	 
	 

	D
	Schedule of Contributions to the Upstream Training Trust
	43

	 
	 
	 

	E
	A List of Available Data Made Available to the Holder
	44

Page 3 of 347

Ref No: 12/3/274

PROTOCOL NO: 2537/2019
EXPLORATION RIGHT
GRANTED IN TERMS OF SECTION 80 OF THE MINERAL AND PETROLEUM RESOURCES DEVELOPMENT ACT, NO. 28 OF 2002 READ TOGETHER WITH REGULATION 29 PUBLISHED IN THE GOVERNMENT GAZETTE NO. 26275 ON 23 APRIL 2004, PROMULGATED IN TERMS OF SECTION 107 OF THE ACT
PREAMBLE:
	
		
	Whereas
	Buyelwa Patience Sonjica in her capacity as the Minister of Minerals and Energy on the 14th December 2006 delegated the powers conferred on her in the Act, as defined below, to the Director-General in terms of the provisions of section 3(2)(a) and section 103 of the Act, which delegation (reference no. 12/2/7/1/7) remains of full force and effect.

	And
	on 1 July 2009 by Proclamation No 44, 2009 the State President of the Republic of South Africa transferred the administration and the powers and functions entrusted to the Minister of Minerals and Energy by the Act including all amendments thereto, to the Minister of Mineral Resources.

	And
	the Minister has on the 12th day of January 2016 granted the Holder as defined below, an Exploration Right upon the following terms and conditions.

LET IT HEREBY BE KNOWN:
That on this 10th day of January in the year 2019 before me,
HENDRIK MALHERBE OOSTHUIZEN
a Notary Public, duly sworn and admitted, practicing and residing at Cape Town, in the Western Cape Province, Republic of South Africa, and in the presence of the subscribing competent witnesses personally came and appeared:
1.    VILJOEN STORM
In his capacity as the Acting Chief Executive Officer of
SOUTH AFRICAN AGENCY FOR PROMOTION OF PETROLEUM EXPLORATION AND 
EXPLOITATION (SOC) LTD,
Registration No.1999/015715/30
he being duly authorized hereto by a Power of Attorney granted to him at Pretoria on 24 November 2015 by the Director General of the Department of Mineral Resources, which Power of Attorney has this day been exhibited to me, the Notary, and remains filed of record in my protocol with the minute thereto, and herein representing:
THE MINISTER OF MINERAL RESOURCES

Page 4 of 447

Ref No: 12/3/274

(hereinafter together with his successors in title referred to as ‘the Minister’), being duly authorised by virtue of the provisions of Section 3(2)(a) and Section 103 of the Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002) and as such in his capacity representing:
THE REPUBLIC OF SOUTH AFRICA
(hereinafter referred to as “the Grantor”) of the one part, and
2.    OK ENERGY LIMITED
Registration Number 7394765 
A company incorporated under the laws of England and Wales
herein represented by Paul Barrett he being duly authorized thereto under and by virtue of a Resolution signed on the 7th January 2019, a certified copy of the extract of the Minutes of the Meeting has this day been exhibited to me, the Notary, and now remains filed of record in my Protocol. 

(hereinafter together with its successors in title and assigns referred to as “the Holder”),
all jointly hereinafter referred to as “the Parties”.
AND THE APPEARERS DECLARED THAT
	
		
	WHEREAS
	The State, as Grantor is the custodian of the mineral and petroleum resources of the Republic of South Africa;

	AND WHEREAS
	The Holder has applied for an Exploration Right in respect of the Exploration area described below;

	AND WHEREAS
	The Grantor has granted to the Holder this Exploration Right on the terms and conditions set out below.

NOW, THEREFORE, THE GRANTOR HEREBY GRANTS TO THE HOLDER, AND THE HOLDER HEREBY ACCEPTS, THIS EXPLORATION RIGHT SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS:
		
	1.
	Definitions and Interpretation

		
	1.1.
	Unless the context indicates otherwise, or as otherwise defined herein, any expression to which a meaning has been assigned in the Act shall bear, when used in this Exploration Right, the same meaning and apply mutatis mutandis hereto. In this Exploration Right the following words and expressions shall have the corresponding meanings assigned to them:

		
	1.1.1.
	‘the Act’ shall mean the Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002);

		
	1.1.2.
	‘Acquired Data’ shall mean all technical information and data (digital or otherwise) and Samples, directly or indirectly, relating to the Exploration Area that are obtained 

Page 5 of 547

Ref No: 12/3/274

or created by the Holder in the course of Exploration Operations, including drilling, appraisal, production, completion, and abandonment reports; tests (including reservoir analysis); well logs; maps; production rates, records and statistics; and geological and geophysical information and interpretations; but excluding, for the avoidance of doubt, any Existing Data;
		
	1.1.3.
	‘Affiliate’ shall mean another Person which, directly or indirectly, owns, or is owned by, or is owned by a Person which owns, that first-mentioned Person; ‘owns’ and ‘owned’ in  this definition means the beneficial ownership of 50 % (fifty percent) or more of the voting shares or other securities of such person;

		
	1.1.4.
	‘Agency’ shall mean the designated agency as defined in the Act, which currently is the South African Agency for Promotion of Petroleum Exploration and Exploitation SOC Ltd, also known as Petroleum Agency SA;

		
	1.1.5.
	‘Annual Exploration Work Programme’ shall mean the annual work programme for Exploration Operations, inclusive of the estimated budget of costs and expenses of carrying out the same, that the Holder prepares and is approved by the Grantor in accordance with Clause 15;

		
	1.1.6.
	‘Applicable Laws’ shall mean the laws of the Republic of South Africa;

		
	1.1.7.
	‘Appraisal Operations’ shall mean any operation, study, activity, or matter, whether taking place within or outside of the Republic of South Africa, to appraise and evaluate the extent and volume of petroleum within a Discovery made by the Holder in the Exploration Area and to determine whether such Discovery could be a Commercial Discovery, including, if and to the extent applicable, all production of petroleum necessary in connection with completion and testing of any appraisal well (including, if necessary, any long-term production test) and all plugging and abandonment of any appraisal well. The terms ‘to Appraise’ or ‘Appraisal’ shall be construed accordingly;

		
	1.1.8.
	‘Appraisal Programme’ shall mean the appraisal programme for Appraisal Operations, inclusive of the estimated budget of costs and expenses of carrying out the same, that the Holder prepares and is approved by the Grantor in accordance with Clause 16 3;

		
	1.1.9.
	‘Commercial Discovery’ shall mean a Discovery of petroleum within the Exploration Area in such quantities as will permit the economic development thereof, on its own or in combination with other existing Discoveries or as part of a unitised development;

		
	1.1.10.
	‘Days’ shall have the meaning ascribed to it in the Act;

Page 6 of 647

Ref No: 12/3/274

		
	1.1.11.
	‘Development Plan’ shall mean the development plan for the Exploration Area, as amended from time to time, that the Holder prepares and is approved by the Grantor;

		
	1.1.12.
	‘Development Plan Supplement’ shall mean a plan for the further development and production of any additional Commercial Discoveries within the Exploration Area, as amended from time to time, that the Holder prepares and is approved by the Grantor; 

		
	1.1.13.
	‘Discovery’ shall mean the discovery by the Holder of a geological feature within the Exploration Area that is determined by the Holder in accordance with Good International Petroleum Industry Practices to be capable of producing petroleum;

		
	1.1.14.
	‘Environmental Authorisation’ shall have the meaning ascribed to it in terms of the National Environmental Management Act. 1998 (Act 107 of 1998);

		
	1.1.15.
	‘Existing Data’ shall mean all technical information and data provided to the Holder by the Grantor, as set out in Annexure “E” hereto, receipt of which has been acknowledged by the Holder;

		
	1.1.16.
	‘Exploration Area’ shall mean the area within the Republic of South Africa described in Clause 3, excluding those portions relinquished or abandoned from time to time in accordance herewith;

		
	1.1.17.
	‘Exploration Operations’ shall have the meaning ascribed to it in the Act which for purposes of this Exploration Right shall include Appraisal Operations;

		
	1.1.18.
	‘Exploration Work Programme’ shall mean the work programme attached hereto as Annexure B, the Annual Exploration Work Programme and any Appraisal Programme, as it may be amended from time to time, that the Holder prepares and is approved by the Grantor;

		
	1.1.19.
	‘First Renewal Period’ shall mean the first renewal of this Exploration Right granted in terms of Section 81 of the Act read together with Regulation 33;

		
	1.1.20.
	‘Gas’ shall mean any hydrocarbon which at a temperature of 21 (twenty one) degrees Celsius and a pressure of 1 (one) atmosphere, is in a gaseous phase existing in a natural condition in the earth’s crust, regardless of the nature of the host rock, and includes any gas which has in any manner been returned to such natural condition, and includes condensate of such gas, but does not include hydrocarbon gas obtained by destructive distillation or gas arising from a marsh or other surface deposit;

		
	1.1.21.
	‘Good International Petroleum Industry Practices’ shall mean those good, sound and generally accepted prevailing standards, practices, considerations, and 

Page 7 of 747

Ref No: 12/3/274

procedures that are applied by reasonable and prudent companies and operators in the international petroleum industry under conditions and circumstances similar to those experienced in the Exploration Area;
		
	1.1.22.
	‘Government’ shall mean the government of the Republic of South Africa; 

		
	1.1.23.
	‘Granting Date’ shall mean the date on which the granting of this Exploration Right or any renewal thereof (whichever applicable) is communicated to the Holder;

		
	1.1.24.
	‘Grantor’ shall have the meaning attributed thereto in the description of the Parties above;

		
	1.1.25.
	‘Grantor Group’ shall mean collectively, the Department of Mineral Resources (including the Minister), and the Agency (including the Chief Executive Officer), and the directors, officers, employees, agents, representatives and invitees of each of the aforementioned;

		
	1.1.26.
	‘Holder’ shall have the meaning ascribed to it in the preamble and shall include each Holder Party;

		
	1.1.27.
	‘Holder Group’ shall mean, collectively, the Holder, each Holder Party, contractors (of any tier) of the Holder used in connection with Exploration Operations hereunder and directors, officers, employees, agents, representatives, and invitees of each of the aforementioned;

		
	1.1.28.
	‘Holder Party’ shall mean each Holder and each successor in title;

		
	1.1.29.
	‘Income Tax Act’ shall mean the Income Tax Act, 1962 (Act No. 58 of 1962);

		
	1.1.30.
	‘Initial Period’ shall mean a period of 36 (thirty six) months commencing from the date of notarial execution;

		
	1.1.31.
	‘Minimum Work Obligation’ shall mean the minimum work to be conducted by the Holder in respect of each Sub-period (as defined below) and as specified in the attached Annexure B;

		
	1.1.32.
	‘Participating Interest’ shall mean a Holder Party’s undivided share (expressed as a percentage) in all of the rights and obligations of the Holder derived from this Exploration Right;

		
	1.1.33.
	‘Person’ shall mean any natural person and any partnership, incorporated or unincorporated joint venture, corporation, limited liability company, trust, estate, organisation or entity, and any branch, division, political sub-division, instrumentality, authority or agency of any government or state;

		
	1.1.34.
	‘Petroleum’ shall have the meaning ascribed to it in the Act;

Page 8 of 847

Ref No: 12/3/274

		
	1.1.35.
	‘Production Right’ shall have the meaning ascribed to it in Clause 4;

		
	1.1.36.
	‘Quarter’ means a three-month period of a year beginning on 1st January, 1st April, 1st July or 1st October of any year;

		
	1.1.37.
	‘Regulations’ shall mean the Regulations promulgated in terms of Section 107 of the Act;

		
	1.1.38.
	‘Renewal Period’ shall mean that period of time for which this Exploration Right is renewed in terms of Section 81 of the Act read together with Regulation 33;

		
	1.1.39.
	‘Required Data’ shall mean, collectively, all the Acquired Data in its final form generated or recorded and preserved by the Holder in the course of conducting Exploration Operations pursuant to (a) the requirements of the Applicable Laws or (b) a reasonable request by the Grantor or (c) the Agency’s published reporting standards manual;

		
	1.1.40.
	‘Samples’ shall mean physical samples of rock, fluid and other materials acquired by the Holder in the course of conducting Exploration Operations for the purpose of preserving and analysing such samples;

		
	1.1.41.
	‘Second Renewal Period’ shall mean the second renewal of this Exploration Right granted in terms of Section 81 of the Act read together with Regulation 33;

		
	1.1.42.
	‘State’ shall mean the Republic of South Africa;

		
	1.1.43.
	‘Sub-period’ shall mean the First Renewal Period and/or the Second Renewal Period and/or the Third Renewal Period;

		
	1.1.44.
	‘Third Renewal Period’ shall mean the third renewal of this Exploration Right granted in terms of Section 81 of the Act read together with Regulation 33;

		
	1.1.45.
	‘Upstream Training Trust’ shall mean the independent Upstream Training Trust registered under registration number IT 1289/98; and

		
	1.1.46.
	‘Year’ shall mean the period of 12 (twelve) calendar months from the date of notarial execution and each subsequent 12 (twelve) month period thereafter. The terms ‘Yearly,’ ‘Annual,’ or ‘Annually’ shall be construed accordingly.

		
	1.2.
	Interpretation in this Exploration Right

		
	1.2.1.
	Where the context so requires, in this Exploration Right the words: 

		
	1.2.1.1.
	importing the masculine gender shall include the feminine and vice versa,

Page 9 of 947

Ref No: 12/3/274

		
	1.2.1.2.
	‘hereunder,’ ‘herein,’ ‘hereof and words of similar import are references to this Exploration Right as a whole and not to any particular provision of this Exploration Right, unless expressly provided to the contrary, and

		
	1.2.1.3.
	‘include’ and ‘including’ shall mean to be inclusive without limiting the generality of the description preceding such term and are used in an illustrative sense and not a limiting sense.

		
	1.2.2.
	Headings and sub-headings to clauses and sub-clauses are inserted for convenience only and are not to be taken into consideration in the interpretation or construction of this Exploration Right.

		
	1.2.3.
	References to any Clause or Annexure are to a Clause or Annexure (as the case may be) of this Exploration Right unless expressly stated to the contrary.

		
	1.2.4.
	This Exploration Right has been written in English and shall be interpreted and construed in accordance with the English language. All correspondence, communication and documents exchanged between the Grantor and the Holder in connection herewith, whether oral or written, shall be in the English language.

		
	1.2.5.
	Reference to any statute, statutory provision or regulation shall include a reference to that statute, statutory provision or regulation as amended, extended or re-enacted from time to time.

		
	1.2.6.
	In the event of any conflict or inconsistency between the provisions of this Exploration Right and the Act, the provisions of the Act shall govern. In the event of any conflict or inconsistency between the provisions of this Exploration Right and any Regulations, the provisions of the Regulations shall govern.

		
	1.2.7.
	In the event of any conflict between the provisions of the main body of this Exploration Right and its Annexures the provisions of the main body of this Exploration Right shall govern.

		
	2.
	Granting of the Right

		
	2.1.
	Subject to the Act, the Regulations and the terms and conditions set forth herein, the Grantor hereby grants to the Holder and the Holder hereby accepts this Exploration Right.

		
	2.2.
	As of the date of notarial execution of this Exploration Right, the Participating Interest of each Holder Party is as follows:

	
		
	OK Energy Limited
	100% share

Page 10 of 1047

Ref No: 12/3/274

		
	3.
	Exploration Area

The Exploration Area, shall comprise of 693 003 (six nine three zero zero three) hectares in extent, situated offshore the Northern and Western Cape Provinces of the Republic of South Africa, which Exploration Area is described in detail on the attached plan marked hereto as Annexure “A”.
		
	4.
	Exclusive Right to Apply for a Production Right in Respect of Discoveries

		
	4.1.
	Subject to the provisions of Section 83 of the Act read together with Regulation 34, the Holder has the exclusive right to apply for and be granted a Production Right in respect of each Commercial Discovery within the Exploration Area provided that any such application for a Production Right has been lodged prior to the expiry date of this Exploration Right. To the extent permissible in terms of the Applicable Laws in force at the time, the Parties undertake to commence negotiation of the terms of such Product Right one year from the date of notarial execution of the Exploration Right, which terms shall thereafter by included as an Annexure to the Exploration Right by way of an amendment to the Exploration Right in accordance with section 102 of the Act

		
	4.2.
	Any area falling within the Exploration Area in respect of which a production right has been granted to the Holder shall, as from the date of the grant of such production right, be severed from and no longer form part of the Exploration Area.

		
	4.3.
	In the case of the severance referred to in 4.2 above, the Holder shall, simultaneous with the granting and or issuing of the new Production Right, submit the necessary amended sketch plan reflecting the new size and extent of the Exploration Area, and the necessary endorsements shall be reflected on the Grantor’s records.

		
	4.4.
	As a part of its application for a Production Right, the Holder shall propose the area to be included in the Production Right, which area shall be at least sufficient to ensure that it encloses the entire formation in which the Commercial Discovery is located, including any likely extensions thereto and any potential additions to the initial Development Plan. In the event that a Commercial Discovery extends beyond the boundary of the Exploration Area into acreage over which no person has an outstanding application for a technical cooperation permit, exploration  right or production right, the Holder shall have the right, to the extent permissible in terms of the Applicable Laws, to apply for a further Production Right to include the full extent of the Commercial Discovery that falls outside the boundary of the Exploration Area.

		
	5.
	Rights and Obligations of the Holder

Page 11 of 1147

Ref No: 12/3/274

		
	5.1.
	Without derogating from the Holder’s rights and obligations in terms of this Exploration Right and Section 5 of the Act. the Holder shall have the right to own and dispose of any and all facilities, materials, equipment, supplies and consumables purchased and/or leased by the Holder for the conduct of Exploration Operations.

		
	5.2.
	Without derogating from the Holder’s other obligations in terms of this Exploration Right, the Holder shall:

		
	5.2.1.
	diligently conduct Exploration Operations in accordance with the Exploration Work Programme;

		
	5.2.2.
	comply with the Environmental Authorisation; and

		
	5.2.3.
	pay all amounts due and payable to the Grantor in terms of the Act, the Regulations, this Exploration Right and the Applicable Laws

		
	5.3.
	Although the Grantor undertakes to make a reasonable attempt to resolve disputes, the Holder acknowledges that the Grantor cannot guarantee that the Holder will at all times be in a position to exercise within the Exploration Area the rights granted in terms of this Exploration Right, and that in certain instances conflicts may arise with other rights holders and or interested and affected parties within or around the Exploration Area In the event of such conflicts the holder will endeavour to resolve these conflicts with such right holders and or interested parties.

		
	6.
	Commencement, Duration and Renewal

		
	6.1.
	This Exploration Right will commence on the Granting Date and, unless abandoned, cancelled, relinquished, suspended, terminated, extended or renewed in accordance herewith, will continue to be in force and effect until the 11 January 2019.

		
	6.2.
	In line with section 82 (2) of the Act the Holder shall, within 90 (ninety) days from the date of notarial execution, or such extended period as the Minister may authorise, commence Exploration Operations in accordance with the Exploration Work Programme. 

		
	6.3.
	In terms of section 81, read with regulation 33, of the Act the applicant has the right to, prior the end of the Initial Period or any Renewal Period, apply to the Minister for the renewal of the Exploration Right.

		
	7.
	Exploration Fees

		
	7.1.
	The Holder shall pay in terms Section 82(2)(e) of the Act read together with Regulation 76 the prescribed exploration fees inclusive of interest to the Agency as from the commencement date.

Page 12 of 1247

Ref No: 12/3/274

		
	7.2.
	All amounts due and payable by the Holder in terms of this Exploration Right shall be paid into the Agency’s nominated Bank account, namely:

Bank Name: ABSA
Branch: Parow
Branch Code: 502110
Account name: Petroleum Agency SA
Account number: 405 103 0832
Account type: Current Account
or such other bank account as the Grantor may from time to time notify the Holder, subject to the Holder conducting due diligence to its satisfaction on such other bank account within 30 (thirty) days of such notification.
		
	7.3.
	Should the Holder fail to pay any amount due and payable hereunder on the due date, the Holder shall be in mora debitoris and shall be liable for and pay interest on such late payment at the rate prescribed in terms of Section 80 of the Public Finance Management Act, 1999 (Act No. 1 of 1999). Interest on outstanding amounts shall be calculated from the due date for payment hereunder to the date of actual payment.

		
	8.
	Technical Advisory Committee

		
	8.1.
	The Parties shall by written notice to each other, within 30 (thirty) days from the date of notarial execution, establish a committee (herein referred to as the Technical Advisory Committee) which shall consist of the following members:

		
	8.1.1.
	a chairman and one other person appointed by the Grantor; and

		
	8.1.2.
	two persons appointed by the Holder.

		
	8.2.
	The membership of the Technical Advisory Committee may be enlarged to include one member for each Holder Party. The Grantor may in such instances enlarge its membership of the Technical Advisory Committee to equal that of the Holder. 

		
	8.3.
	The Grantor and each Holder Party may appoint by written notice to each other, alternate members to act in the place of their representatives. When an alternate member acts in the place of any member he or she shall be deemed to have the powers and shall perform the duties of such member.

		
	8.4.
	Without prejudice to and without derogating from the rights and obligations of the Holder in terms of this Exploration Right, the Act and the Regulations the functions of the Technical Advisory Committee are as follows:

Page 13 of 1347

Ref No: 12/3/274

		
	8.4.1.
	to review the progress of all Exploration Operations, to monitor the implementation thereof and to provide the Holder with advice and recommendations with regard thereto;

		
	8.4.2.
	to review any proposed amendments to the approved Annual Exploration Work Programme submitted by the Holder to the Grantor in terms of Clause 15, to monitor the implementation thereof, and to provide the Holder with advice and recommendations with regard thereto;

		
	8.4.3.
	to review any Appraisal Programme submitted by the Holder to the Grantor in terms of Clause 16, to monitor the implementation thereof, and to provide the Holder with advice and recommendations with regard thereto;

		
	8.4.4.
	to review any proposed Development Plan and provide the Holder with advice and recommendations with regard thereto;

		
	8.4.5.
	to review the accounting of expenditure and the maintenance of operating records and reports kept in connection with Exploration Operations, to monitor the implementation thereof, and to provide the Holder with advice and recommendations with regard thereto; and

		
	8.4.6.
	to offer advice to the Holder in order to promote the efficient carrying out of Exploration Operations.

		
	8.5.
	The Technical Advisory Committee shall meet as and when required but not less than once annually unless otherwise agreed between the members in which case, a 30 (thirty) days’ notice must be given by the Party requesting such meeting.

		
	8.6.
	All meetings shall be held in Cape Town, South Africa or such other place as unanimously agreed to by the members of the Technical Advisory Committee. Except in respect of meetings of the Technical Advisory Committee held in Cape Town, the Holder shall be responsible for all costs and expenses related to attendance by the Grantor and its representatives at such meetings. 

		
	8.7.
	The Grantor shall propose for the Holder’s input, an Agenda for the meeting which Agenda takes into consideration inter alia the holder’s work programme and other exploration right obligations. The aforesaid Agenda and the copies of all the necessary documentation and presentation materials shall be exchanged between the Parties not less than 7 (seven) days prior to the meeting. The Grantor shall not unreasonably deny any additional agenda items or agenda modifications proposed by the Holder if consistent with the Holder’s work programme obligations.

		
	8.8.
	Three members of the Technical. Advisory Committee shall form a quorum: Provided that at least one representative of the Grantor and one representative of the Holder are present.

Page 14 of 1447

Ref No: 12/3/274

		
	8.9.
	Any member of the Technical Advisory Committee shall have the right to bring any expert or advisor to a meeting of the Technical Advisory Committee for the purpose of advising on any matter requiring an expert’s advice.

		
	8.10.
	The proceedings and processes of the Technical Advisory Committee are without prejudice to the rights and obligations of the Grantor or the Grantor Group or the Holder or the Holder Group and are not binding on the Holder.

		
	9.
	Cancellation or Suspension of the Exploration Right

		
	9.1.
	It is recorded that in terms of Section 90 of the Act, the Minister is empowered to cancel or suspend this Exploration Right in the circumstances set out in and in accordance with the provisions of Section 47 of the Act.

		
	9.2.
	Should this Exploration Right be cancelled or suspended in accordance with Section 90 of the Act, the Holder shall not be absolved from those obligations and liabilities that have accrued up to the date of such cancellation or suspension.

		
	9.3.
	Any cancellation or suspension of this Exploration Right by the Grantor shall be without prejudice to the Grantor’s other rights under this Exploration Right or the Applicable Laws and the Grantor reserves the right to claim damages, claim specific performance or claim any other alternative relief.

		
	10.
	Relinquishment and Voluntary Abandonment of the Exploration Area

		
	10.1.
	The Holder shall relinquish contiguous portions of the Exploration Area as set out in and in accordance with the attached Annexure “C”.

		
	10.2.
	Subject to Clause 10.4, the Holder may, upon giving the Grantor not less than 180 (one hundred and eighty) days prior written notice, abandon this Exploration Right by relinquishing the entire Exploration Area to the Grantor. 

		
	10.3.
	Subject to Clause 10.4, the Holder may by giving the Grantor not less than 90 (ninety) days prior written notice relinquish any portion of the Exploration Area. Any portion of the Exploration Area relinquished by the Holder shall comply with the requirements set out in Annexure “C” and shall be accompanied by a sketch plan depicting the area remaining or still covered by the exploration right.

		
	10.4.
	Any relinquishment in terms of Clauses 10.1 and 10.3 or abandonment in terms of Clause 10.2 shall not absolve the Holder of any cost, liability, obligation or expense incurred by the Holder in respect of this Exploration Right prior to the date of such abandonment or relinquishment and the Holder shall remain liable therefor.

Page 15 of 1547

Ref No: 12/3/274

		
	10.5.
	From the date that the Holder has abandoned this Exploration Right or has relinquished a portion or portions of the Exploration Area, the Grantor shall be entitled to grant to any other person any of the rights and permits referred to in the Act in, on, or under the portion or portions so abandoned or relinquished.

		
	10.6.
	Upon abandonment of this Exploration Right, the Holder shall within 3 (three) months furnish the Grantor with a copy of all the Required Data that has not been previously furnished to the Grantor, and all copies of the Existing Data or a certificate to the effect that all such copies have been destroyed.

		
	10.7.
	Upon relinquishment of any portion of the Exploration Area, the Holder shall within 3 (three) months furnish the Grantor with a copy of all the Required Data that has not been previously furnished to the Grantor in respect of those portions of the Exploration Area that have been so relinquished The Holder shall thereafter be entitled to freely use, distribute or dispose of such Required Data in respect of the Exploration Area so abandoned or relinquished.

		
	10.8.
	Upon the abandonment of this Exploration Right or any relinquishment, the Holder shall apply for a closure certificate in terms of Section 43 of the Act in respect of the abandoned or relinquished areas.

		
	11.
	Rights to Minerals and Petroleum

		
	11.1.
	Except as provided for herein in respect of petroleum, this Exploration Right confers no rights to the Holder in respect of any mineral (as defined in the Act) discovered in the Exploration Area. Should the Holder discover any mineral during Exploration Operations, the Holder shall forthwith report such discovery to the Grantor who shall assume the ownership of the said discovery.

		
	11.2.
	The Holder may thereafter, subject to any prior third party rights, apply for the right to explore, prospect for, produce and/or mine such mineral. 

		
	12.
	Examination of the Exploration Area

		
	12.1.
	It is recorded that in terms of Sections 91 and 92 of the Act, the Minister or any person duly authorised by the Minister may enter upon the Exploration Area and conduct routine inspections and exercise such related powers as set out in the Act.

		
	12.2.
	Upon request by the Grantor, in the event of Exploration Operations being conducted offshore, the Holder shall provide free transportation during normal business hours between the Holder’s onshore base and the offshore facilities as well as free accommodation on the offshore facilities to the Minister or any person duly authorised by him or her.

		
	13.
	Records and Samples

Page 16 of 1647

Ref No: 12/3/274

		
	13.1.
	Without derogating from the Holder’s responsibilities in terms of Section 88 of the Act read together with the Regulations, the Holder shall keep current and accurate records of all Acquired Data acquired during the Exploration Operations. Such Acquired Data shall be kept in such form as is reasonably required and approved by the Grantor.

		
	13.2.
	Samples shall be taken by the Holder at regular intervals in accordance with the Applicable Laws and Good International Petroleum Industry Practices. The Holder shall, at its own cost, save and correctly label a representative portion of all Samples in such form as reasonably required and approved by the Grantor. A portion of Samples of any petroleum or other minerals of potential value recovered by the Holder during Exploration Operations shall be forwarded promptly to the Grantor at the Holder’s expense. All Samples acquired by the Holder for its own purpose shall be made available for inspection by the Grantor at all reasonable times.

		
	13.3.
	Prior to the Holder discarding any Samples, the Holder shall obtain the Grantor’s written consent, which consent is to be provided or refused within 30 (thirty) days of the Grantor receiving a request from the Holder. Should the Grantor fail to respond to the Holder within 30 (thirty) days, the Grantor shall be deemed to have provided its consent. Should the Grantor refuse to consent, or otherwise require such Samples, the Holder shall, at its cost, deliver the Samples to the Grantor.

		
	13.4.
	The Holder may export Existing Data, Acquired Data and Samples for processing or laboratory examination or analysis by the Holder or by third parties or for storage outside of the Republic of South Africa, provided that representative Samples (equivalent in quality) and copies of the Acquired Data (equivalent in quality) have first been delivered to the Grantor and provided further that the Grantor’s prior written approval has been obtained by the Holder. Such approval shall not unreasonably be withheld or refused by the Grantor. 

		
	13.5.
	The Holder shall deliver to the Grantor, at the Holder’s expense, digital and where appropriate, paper copies of all Acquired Data and representative Samples as soon as they are acquired or prepared. In this respect the Holder shall adhere to the Grantor’s guidelines with regard to the form, substance and format for preparing and storing the Acquired Data and Samples.

		
	14.
	Reports

		
	14.1.
	The Holder shall keep the Grantor advised of all material developments taking place during the course of Exploration Operations and shall furnish the Grantor with Required Data and such other reports and information as the Grantor may reasonably require.

		
	14.2.
	Without derogating from the generality of Clause 14.1 or the Holder’s reporting obligations in terms of Section 88 of the Act, within 21 (twenty one) days from the end of each Quarter and within 60 (sixty) days from the end of each Year, the Holder shall submit to the Grantor a written report reflecting, for the relevant Quarter or Year, respectively, the progress of Exploration Operations, including the summary of:

Page 17 of 1747

Ref No: 12/3/274

		
	14.2.1.
	the numbers of local persons (classified by race and gender) and expatriate persons employed;

		
	14.2.2.
	the work done and expenditure on Exploration Operations;

		
	14.2.3.
	the site and depth of every well drilled or being drilled;

		
	14.2.4.
	the formations penetrated and particulars regarding any occurrence of petroleum and/or any mineral of potential value encountered; and

		
	14.2.5.
	a statement of compliance with the Environmental Authorisation.

		
	14.3.
	The Grantor and Holder shall each own the Required Data in their possession, whether original or a copy, and after the termination, cancellation or abandonment of this Exploration Right, each Party may freely use, sell, distribute, trade, license or otherwise disclose or dispose of such data.

		
	14.4.
	None of the terms of this Exploration Right shall be construed as requiring the Holder to disclose any of its or its Affiliates’ proprietary technology or information or data licensed by the Holder or its Affiliates under obligations of confidentiality.

		
	14.5.
	Within 3 (three) months from the termination and/or cancellation and/or abandonment of this Exploration Right, the Holder shall furnish the Grantor with a copy of all the Acquired Data not already in the possession of the Grantor and shall return all the Existing Data to the Grantor. 

		
	15.
	Annual Exploration Work Programme and Budget

		
	15.1.
	Not later than 60 (sixty) days from the date of notarial execution, the Holder shall submit and present to the Grantor for approval an Annual Exploration Work Programme for the current Year. Thereafter, at least 90 (ninety) days prior to the commencement of each succeeding Year, the Holder shall submit and present to the Grantor for review and approval its proposed Annual Exploration Work Programme for the next Year or part thereof, as the case may be, in accordance with this Clause and such approval shall not be unreasonably withheld or delayed.

		
	15.2.
	The proposed Annual Exploration Work Programme shall set forth the Exploration Operations, inclusive of the Minimum Work Obligations, to be carried out during the next Year or part thereof, as the case may be, together with a budget of the expected cost thereof. The Annual Exploration Work Programme shall be consistent with and be part and parcel of the Exploration Work Programme attached hereto as Annexure “B”.

		
	15.3.
	Within 30 (thirty) days from receipt of the proposed Annual Exploration Work Programme, the Grantor shall either, notify the Holder in writing of its approval of the proposed Annual 

Page 18 of 1847

Ref No: 12/3/274

Exploration Work Programme or, reject the same and propose amendments thereto specifying the reasons for such amendments.
		
	15.4.
	Should the Grantor fail to respond with regard to the proposed Annual Exploration Work Programme within 30 (thirty) days from its receipt thereof, the proposed Annual Exploration Work Programme shall be deemed approved by the Grantor.

		
	15.5.
	The Grantor may, within 10 (ten) days from its receipt of the proposed Annual Exploration Work Programme, request the Holder to supply such further information relating to the proposed Annual Exploration Work Programme as may be reasonably required by the Grantor for its review and approval thereof. The Holder, to the extent reasonably possible and practical, shall comply in writing with such request within 10 (ten) days from the date of receipt of such request from the Grantor.

		
	15.6.
	If the Grantor proposes any amendments to the proposed Annual Exploration Work Programme as described above, the Parties shall meet within 15 (fifteen) days from the date on which the proposed amendments are notified to the Holder to discuss the proposed amendments The proposed amendments to the Annual Exploration Work Programme shall be consistent with the Exploration Work Programme.

		
	15.7.
	Following review and consideration of any amendments proposed by the Grantor, the Holder shall within 15 (fifteen) days from the meeting required in terms of Clause 15.6 re-submit to the Grantor for approval a revised Annual Exploration Work Programme, and shall give effect to all amendments to the proposed Annual Exploration Work Programme reasonably requested by the Grantor. 

		
	15.8.
	Should any amendments to the Exploration Work Programme be required, such shall be subject to the provisions of Section 102 of the Act which requires the approval of the Minister.

		
	15.9.
	Any dispute which cannot be resolved between the Parties with regard to the Annual Exploration Work Programme shall be resolved in accordance with Clause 37.

		
	16.
	Discoveries and Testing

		
	16.1.
	If a Discovery is made by the Holder in the Exploration Area, the Holder shall:

		
	16.1.1.
	promptly inform the Grantor by written notice of the fact that such Discovery has been made;

		
	16.1.2.
	cause tests to be made on such Discovery within a reasonable period of time consistent with Good International Petroleum Industry Practices in order to determine whether such Discovery is or could be a Commercial Discovery and is worthy of appraisal. Prior to testing each Discovery, the Holder shall give written notice to the Grantor of the tests the Holder intends to conduct and the Grantor shall 

Page 19 of 1947

Ref No: 12/3/274

have the right to witness such tests. If such tests are being conducted offshore, then the Holder shall, free of charge, provide access, transportation to and from the offshore facilities, including reasonable accommodation facilities on the installation, for not more than 4 (four) of the Grantor’s representatives who will witness the tests; and
		
	16.1.3.
	within 120 (one hundred and twenty) days from having completed and received the results of tests under Clause 16.1.2, furnish the Grantor with a copy of the test results report containing a summary of the Holder’s interpretation of such tests and Holder’s conclusion as to whether or not such Discovery could be a Commercial Discovery and is worthy of appraisal (the Discovery Report’).

		
	16.2.
	All tests and measurements conducted by the Holder for the purpose of establishing the potential existence of a Commercial Discovery shall be carried out in accordance with Good International Petroleum Industry Practices.

		
	16.3.
	If the Holder considers, after providing the Grantor with the Discovery Report that the Discovery could be commercial, then the Holder shall forthwith take such reasonable steps to appraise the Discovery and submit a proposed Appraisal Programme to the Grantor for its approval.

		
	16.4.
	Within 30 (thirty) days from receipt of the proposed Appraisal Programme, the Grantor shall either notify the Holder in writing of its approval of the proposed Appraisal Programme or reject the same and propose amendments thereto specifying the reasons for such amendments.

		
	16.5.
	Should the Grantor fail to respond to the proposed Appraisal Programme within 30 (thirty) days from its receipt thereof, the proposed Appraisal Programme shall be deemed approved by the Grantor.

		
	16.6.
	The Grantor may, within 10 (ten) days from its receipt of the proposed Appraisal Programme, request the Holder to supply such further information relating to the proposed Appraisal Programme as may be reasonably required by the Grantor for its review and approval thereof. The Holder, to the extent reasonably possible and practical, shall comply in writing with such request within 10 (ten) days from the date of receipt of such request from the Grantor.

		
	16.7.
	If the Grantor proposes any amendments to the proposed Appraisal Programme as described above, the Parties shall meet within 15 (fifteen) days from the date on which the proposed amendments are notified to the Holder to discuss the proposed amendments. The proposed amendments to the Appraisal Programme shall be consistent with the objectives of appraising the discovery.

		
	16.8.
	Following review and consideration of any amendments proposed by the Grantor, the Holder shall within 15 (fifteen) days from the meeting required in terms of Clause 16.7, re-submit to 

Page 20 of 2047

Ref No: 12/3/274

the Grantor for approval a revised Appraisal Programme to give effect to all amendments to the proposed Appraisal Programme reasonably requested by the Grantor.
		
	16.9.
	Any dispute which cannot otherwise be resolved between the Parties with regard to the Appraisal Programme shall be resolved between the Parties in accordance with Clause 37.

		
	16.10.
	In the event that operational imperatives (including the immediate availability of a seismic vessel or drilling rig) require such approval to the Appraisal Programme in a shorter timeframe than specified in Clauses 16 4 to 16.8, then the Parties shall use all of their reasonable commercial efforts to complete the approval process in accordance with the aforesaid procedures within a shorter timeframe.

		
	16.11.
	Within 180 (one hundred eighty) days from the completion of such Appraisal Operations, or such further period as agreed between the Parties in writing, the Holder shall deliver to the Grantor (a) a full report containing particulars of the results of such Appraisal Operations, including particulars and preliminary estimates relating to the location and depth of petroleum bearing structures, the composition of petroleum, the estimated recoverable reserves of petroleum, and the estimated daily production potential of petroleum, (b) a declaration by the Holder as to whether or not the Discovery is a Commercial Discovery, and (c) an election by the Holder as to whether or not the Holder intends to develop such Discovery (the ‘Appraisal Report’).

		
	16.12.
	If the Holder notifies the Grantor in the Appraisal Report that the Discovery is a Commercial Discovery, then within 365 (three hundred and sixty-five) days from the date of receipt of the Appraisal Report by the Grantor, the Holder shall submit a proposed Development Plan for such Discovery to the Grantor for its approval.

		
	16.13.
	Within 60 (sixty) days from receipt of the proposed Development Plan, the Grantor shall either notify the Holder in writing of its approval of the proposed Development Plan or reject the same and propose amendments thereto specifying the reasons for such amendments

		
	16.14.
	Should the Grantor fail to so act on the proposed Development Plan within 60 (sixty) days from its receipt thereof, the proposed Development Plan shall be deemed approved by the Grantor.

		
	16.15.
	The Grantor may, within 20 (twenty) days from its receipt of the proposed Development Plan, request the Holder to supply such further information relating to the proposed Development Plan as may be reasonably required by the Grantor for review and approval thereof. The Holder, to the extent reasonably possible and practical, shall comply in writing with such request within 20 (twenty) days from the date of receipt of such request from the Grantor.

		
	16.16.
	If the Grantor proposes any amendments to the proposed Development Plan as described above, the Parties shall meet within 30 (thirty) days from the date on which the proposed amendments are notified to the Holder to discuss the proposed amendments.

Page 21 of 2147

Ref No: 12/3/274

		
	16.17.
	Following review and consideration of any amendments proposed by the Grantor, the Holder shall within 30 (thirty) days from the meeting required in terms of Clause 16 16 (or such longer period as agreed between the Parties), re-submit to the Grantor for approval a revised Development Plan to give effect to all amendments to the proposed Development Plan reasonably requested by the Grantor.

		
	16.18.
	Should any amendments to the Exploration Work Programme be required, such shall be subject to the provisions of Section 102 of the Act which requires the approval of the Minister.

		
	16.19.
	Any dispute which cannot otherwise be resolved between the Parties with regard to the Development Plan shall be resolved in accordance with Clause 37.

		
	17.
	Manner of Conducting Exploration Operations

		
	17.1.
	Without derogating from the provisions of the Applicable Laws and Environmental Authorisation, the Holder shall:

		
	17.1.1.
	execute all Exploration Operations in a proper and workmanlike manner in accordance with Good International Petroleum Industry Practices and, without prejudice to the generality of the foregoing, the Holder shall take all reasonable and practical steps in order to prevent: 

		
	17.1.1.1.
	the escape or waste of petroleum discovered in the Exploration Area:

		
	17.1.1.2.
	damage to petroleum-bearing strata;

		
	17.1.1.3.
	the entrance of uncontrolled water through wells to petroleum-bearing strata;

		
	17.1.1.4.
	the escape of petroleum into any waters or aquifer in the vicinity of the Exploration Area; and

		
	17.1.1.5.
	pollution of the terrestrial or marine environment.

		
	17.1.2.
	promptly inform the Grantor and all other relevant Government departments of the occurrence of any event described in Clauses 17.1.1 to 17.1.5 inclusive;

		
	17.1.3.
	take all actions required under the Environmental Authorisation and all Applicable Laws with respect to any of the incidents referred to Clauses 17.1.1 to 17.1.5 inclusive;

		
	17.1.4.
	promptly notify, upon the completion of any operation or activity within the Exploration Area, the Grantor and all relevant Government departments of any obstruction, including the location, nature and extent thereof, that remains in the Exploration Area;

Page 22 of 2247

Ref No: 12/3/274

		
	17.1.5.
	not flare any petroleum without the Grantor’s prior written approval; and

		
	17.1.6.
	promptly give notices to relevant Government departments, including interested and affected parties, with regard to all Exploration Operations which may be reasonably expected to interfere with the rights of other users of the Exploration Area and shall take all reasonable steps to minimise interference with the rights of other users.

		
	18.
	Existing Data

		
	18.1.
	It is recorded that, at the date of notarial execution of this Exploration Right, no Existing Data has been made available to the Holder.

		
	18.2.
	Any Existing Data or information relating to the Exploration Area that the Grantor has made available or which the Grantor acquires independent of the Holder will be made available for inspection, copying and use by the Holder; provided that the Holder shall pay the Grantor for the costs incurred in copying and preparing such data or information. Should such further data or information be provided to the Holder, such data and information shall be deemed to form part of the Existing Data and Annexure “E” will be amended accordingly. 

		
	18.3.
	Upon terms and conditions to be agreed, the Grantor may assist the Holder in resolving technical problems relating to the Existing Data. Such assistance shall not include interpretation of the Existing Data.

		
	18.4.
	Ownership in all Existing Data vests in the Grantor and is of considerable commercial value to the Grantor. On expiry, cancellation, termination or abandonment of this Exploration Right or relinquishment of the exploration area, all Existing Data in the Holder’s possession, shall forthwith, at the Holder’s cost, be returned to the Grantor. Alternatively the Holder shall submit to the Grantor a certificate to the effect that all such copies have been destroyed

		
	18.5.
	While every effort has been made to verify the quality and accuracy of the Existing Data, the Grantor Group shall not be liable for any error or inaccuracy contained within the Existing Data or any damages of whatsoever nature suffered by the Holder arising from any such error or inaccuracy in the Existing Data.

		
	19.
	Environmental Protection and Financial Provision

		
	19.1.
	The Holder shall conduct all Exploration Operations in accordance with the approved Environmental Authorisation, record of decisions and addendums thereto and in a manner that facilitates the protection and conservation of the natural resources of the Republic of South Africa and of the environment in general.

		
	19.2.
	The financial provision made available by the applicant herein in terms of the Holder Financial Guarantee satisfies the requirements as required by Section 24P of the National 

Page 23 of 2347

Ref No: 12/3/274

Environmental Management Act, 107 of 1998 and must annually be assessed and if necessary adjusted to the satisfaction of the Minister.
		
	20.
	Social and Labour Matters

		
	20.1.
	Without derogating from the Holder’s responsibilities in terms of the Applicable Laws including Section 2(d) and Section 2(f) of the Act, the Holder undertakes:

		
	20.1.1.
	within two (2) years from Execution Date, to find a suitable additional holder who is a Historically Disadvantaged South African, and that is technically, legally and financially qualified to hold a Participating Interest. Such additional holder shall be entitled to receive a Participating Interest up to but not greater than 10% (ten per cent), and shall acquire any such interest at a fair market value price. The Historically Disadvantaged South African, upon taking up such Participating Interest, shall become a party to the relevant joint operating agreement and shall be responsible for its Participating Interest share of the Holder’s financial and other obligations hereunder. The applicable joint operating agreement may, subject to the Grantor approving the inclusion of the relevant provision, require that a Historically Disadvantaged South African may only transfer its Participating Interest to another Historically Disadvantaged South African. Notwithstanding the provisions hereof, if the Holder demonstrates that, despite making a sincere attempt to do so, the Holder is unable to comply with the requirement to find a suitable HDSA partner, the Holder shall be permitted to make an application in terms of section 102 of the Act to extend the time period in which the Holder is required to find a suitable HDSA partner by a further two (2) years. Should the Holder make an application for amendment in terms of section 102 as contemplated in this clause, notwithstanding the failure of the Holder to comply with the provisions of this clause 20.1.1., the Holder shall not be in breach of its obligations under this Exploration Right unless and until such time as the section 102 application has been refused.

		
	20.1.2.
	to employ Historically Disadvantaged South Africans having appropriate qualifications and experience, and or alternatively implement a programme for the future recruitment of such, taking into account the Holder’s operational requirements under this Exploration Right;

		
	20.1.3.
	to implement programmes for the training and skills development of Historically Disadvantaged South Africans;

		
	20.1.4.
	to give preference, in procuring for purposes of use in the exploration operations, the equipment, machinery, materials, instruments, supplies and accessories (all referred to collectively as ‘Goods’) manufactured or produced by Historically Disadvantaged South Africans, provided that such Goods are competitive with like 

Page 24 of 2447

Ref No: 12/3/274

goods manufactured or produced or available outside the Republic of South Africa in respect of cost, quantity and quality and that such Goods can be made available at the time when and the place where required by the Holder;
		
	20.1.5.
	to use contractors and/or sub-contractors who are Historically Disadvantaged South Africans and whose services and standards are competitive with those available outside the Republic of South Africa in terms of price, quality, expertise, and: Provided further that such services can be performed at the place and within the time required by the Holder; and

		
	20.1.6.
	to pay the amounts set out and specified in the attached Annexure “D” to the Upstream Training Trust, to be used by the Trust for the training, education, and obtaining of practical experience for Historically Disadvantaged South Africans and other South Africans in the manner determined by the trustees.

		
	20.2.
	The Holder shall propose a field training programme for graduates who have the appropriate qualifications, to be approved by the Agency, which shall include, but not be limited to the following aspects of oil and gas exploration and production:

(i)    Geophysical and/or geological data acquisition, processing and interpretation;
(ii)    Exploration methods;
(iii)    Drilling and well completions; and
(iv)    Field development and production.
		
	21.
	Tax

		
	21.1.
	The Holder’s tax obligations and benefits shall be as provided for in the Income Tax Act and other Applicable Laws of the Republic of South Africa.

		
	21.2.
	Except to the extent exempted or as directed otherwise, the Holder shall for the duration of this Exploration Right be liable for income tax payments to the State on the annual taxable income derived by it from the sale of Petroleum (referred to in the Income Tax Act as “natural oil”) or any other product of Exploration Operations in accordance with the provisions of the Income Tax Act, including any amendments and regulations issued pursuant thereto.

		
	22.
	Financial Records and Audits

		
	22.1.
	Without derogating from the Holder’s responsibilities under the Applicable Laws, the Holder shall keep in the Republic of South Africa financial records and accounts of all transactions pertaining to this Exploration Right, in accordance with generally accepted accounting practices as applicable in the Republic of South Africa.

Page 25 of 2547

Ref No: 12/3/274

		
	22.2.
	At the Grantor’s request, such financial records and accounts or copies thereof shall be promptly provided to the Grantor. The Grantor or its duly appointed representative shall, at Grantor’s own cost, have the right to audit the Holder’s financial records and accounts relating to transactions for any year within 3 (three) years after the close of such year. The Holder’s financial records and accounts shall be conclusively presumed true and correct unless the Grantor takes written exception to specific costs within the 3 (three) year period.

		
	23.
	Customs duties

Without derogating from the provisions of Clause 29.1, and except to the extent exempted or as directed otherwise, in respect of all goods imported into the Republic of South Africa for purposes of conducting Exploration Operations, the Holder shall comply with the provisions of the Customs and Excise Act, 1964 (Act No. 91 of 1964), including any regulations issued pursuant thereto.
		
	24.
	Exchange Control

Without derogating from the provisions of Clause 29.1 and except to the extent exempted or as directed otherwise, the Holder undertakes to comply with the provisions of the Currency and Exchanges Act, 1933 (Act No. 9 of 1933), including any regulations issued pursuant thereto.
		
	25.
	Indemnity and insurance

		
	25.1.
	The Holder shall for the duration of this Exploration Right take all the necessary and reasonable steps to conduct the Exploration Operations in a manner that safeguards and protects persons from injury or death and prevents damage or destruction of property and the environment.

		
	25.2.
	The Holder hereby undertakes to defend, hold harmless and indemnify the Grantor Group from and against any and all claims, costs, charges, liabilities and expenses, including reasonable legal costs (hereinafter referred to as ‘Claims’), that may be instituted against or suffered by any member of the Grantor Group as a result of injury or death to any person or damage or destruction to any property and/or the environment arising from the negligent and/or unlawful acts and/or omissions of the Holder Group.

		
	25.3.
	Notwithstanding the foregoing, under no circumstances shall the Holder, or their Affiliates be liable to the Grantor Group or any third party, for consequential or indirect damages, losses, expenses or liabilities, loss of profit, loss of production, reservoir or formation damage or other losses whether or not similar to the foregoing and howsoever arising.

		
	25.4.
	The Holder shall within 10 (ten) days from the date of notarial execution obtain and maintain sufficient insurance during the term of this Exploration Right to address the risks related to 

Page 26 of 2647

Ref No: 12/3/274

Exploration Operations and support the indemnities given by the Holder under this Exploration Right. Without derogating from the Holder’s responsibilities, the Holder, with the prior written approval of the Grantor, may implement a policy of self-insurance in respect of certain risks related to Exploration Operations. Without derogating from the generality of the foregoing such insurance shall specifically provide for:
		
	25.4.1.
	all risks in respect of any property or equipment used in connection with Exploration Operations;

		
	25.4.2.
	pollution liability;

		
	25.4.3.
	third-party liability and public liability:

		
	25.4.4.
	removal of wrecks and cleaning-up operations pursuant to an accident in the course of or as a result of Exploration Operations; 

		
	25.4.5.
	the Holder’s liability to its contractors, employees, consultants and agents engaged in Exploration Operations; and

		
	25.4.6.
	any other risk of whatever nature as is customary to insure against in the international petroleum industry or in accordance with the Good International Petroleum Industry Practices.

		
	25.5.
	Without derogating from the Holder’s responsibilities in terms of the Applicable Laws or this Exploration Right, the amounts, type and terms of the insurance referred to in Clause 25.4 above shall be determined in consultation with the Grantor.

		
	25.6.
	The obligations of the Holder Parties under this Exploration Right, including any obligations and liability under this Clause 25 and under Clause 21 shall be several and not joint and several. Each Holder Party shall be liable for their respective share of all such obligations and liabilities based on their respective Participating Interest.

		
	25.7.
	Subject to the Applicable Laws, the Grantor hereby undertakes to defend, hold harmless and indemnify the Holder Group from and against any and all Claims, that may be instituted against or suffered by any member of the Holder Group as a result of injury or death to any person or damage or destruction to any property and/or the environment arising from the negligent and/or unlawful refusal by the Grantor to permit the Holder to adequately respond to the situation in question.

		
	26.
	Health and Safety

		
	26.1.
	The Holder undertakes while conducting Exploration Operations to comply with the Applicable Laws in respect of all health and safety matters; and

Page 27 of 2747

Ref No: 12/3/274

		
	26.2.
	Where any emergency or incident arising from Exploration Operations causes or has the potential to cause death and/or injury to persons or damage to and/or destruction of property and/or the environment, the Holder shall in consultation with the responsible Government departments take such action as may be prescribed under the Applicable Laws or where not prescribed take such prudent and necessary action in accordance with the Good International Petroleum Industry Practices.

		
	27.
	Confidentiality and Public Announcements

		
	27.1.
	The Acquired Data and the Existing Data together with all programmes, tests, analyses, results, books, statements, records, returns, plans, information and correspondence between the Parties which the Holder is or may from time to time be required to furnish under the provisions of this Exploration Right (hereinafter collectively referred to as ‘Confidential Information’) shall be  treated as confidential by the Holder and shall not be disclosed by the Holder to any person without the prior written consent of the Grantor, except that the Grantors consent shall not be required in the following circumstances:

		
	27.1.1.
	where the Holder is required by law, regulation, decree, rule or order applicable to the Holder or its Affiliates to disclose such Confidential Information;

		
	27.1.2.
	where the Holder discloses Confidential Information to any Affiliate of any Holder Party:  Provided that such Holder Party informs its Affiliates of the confidential nature of information so disclosed and guarantees the adherence of such Affiliates to the confidentiality restrictions as set out in this Clause;

		
	27.1.3.
	to the extent that such Confidential Information has to be produced at legal or arbitral proceedings or because an order from a court or arbitral panel of competent jurisdiction has compelled the production of such Confidential Information;

		
	27.1.4.
	where the Holder discloses Confidential information to prospective or actual contractors, consultants, advisors, and attorneys employed by any Holder Party or its Affiliates where disclosure of such Confidential Information is essential to such person’s services for such Holder Party: Provided that, prior to disclosure, such contractor, consultant, advisor, lender, and attorney provides the Holder Party with a written undertaking of confidentiality that is not less restrictive than the confidentiality restrictions set out in this Clause, provided that in the case of an attorney, compliance with professional obligations of confidence shall be sufficient to represent compliance with this clause 27.1.4;

		
	27.1.5.
	where the Holder discloses Confidential Information to a bank or other financial institution to the extent appropriate to Holder arranging for funding: Provided that, prior to disclosure, such person provides the Holder Party with a written undertaking 

Page 28 of 2847

Ref No: 12/3/274

of confidentiality that is not less restrictive than the confidentiality restrictions set out in this Clause;
		
	27.1.6.
	to the extent that such Confidential Information must be disclosed pursuant to any rules or requirements of any recognised stock exchange on which the securities of any Holder Party or its Affiliates are or are to be listed;

		
	27.1.7.
	where the Holder discloses Confidential Information to a bona fide prospective assignee or assignees to whom the Holder’s or any of the Holder Party’s rights and obligations under this Exploration Right are proposed to be assigned;

		
	27.1.8.
	to the extent that any Confidential Information, through no fault of the Holder, has become or becomes part of public domain; or

		
	27.1.9.
	where the Holder discloses Confidential Information as part of an exchange with third parties for the geological, geophysical, geochemical and any other technical or scientific data, reports and information (either raw, processed or interpreted) pertaining to their petroleum operations in respect of other acreage within the Republic and subject to their execution of suitable confidentiality arrangements. In this event the Grantor shall be apprised of the extent of the proposed exchange.

		
	27.2.
	Except as may be required by laws, rules, regulations or decrees (including that of a stock exchange) applicable to the Holder or its Affiliates, the Holder shall make no public announcement with regard to this Exploration Right or any matter related thereto, unless the Holder has furnished the Grantor with a copy of the intended public announcement and the Grantor has given its prior written approval, which approval shall not be unreasonably withheld or delayed.

		
	27.3.
	If the Grantor desires to issue any press release, media statement, or interview on any petroleum Discovery, estimated petroleum reserves, and/or any well drilling operations, tests, and/or results relating to the Exploration Operations hereunder, the Grantor shall give written notice thereof to the Holder at least three (3) days in advance to enable the Holder to comply with disclosure rules and requirements imposed on any Holder Party or its Affiliates by the laws, regulations or rules of the relevant countries in which such Holder Party is incorporated or doing business or in which the securities of such Holder Party or its Affiliates are or are to be listed or traded.

		
	27.4.
	When a public announcement or statement becomes required by law or necessary or desirable because of impending danger to or loss of life, damage to property or pollution as a result of Operations, either Party is authorised to issue and make such announcement or statement without prior notice or prior approval of the other Party where such prior notice and approval is impractical. In such a case the Party making the announcement or statement shall promptly furnish the other Party with a copy of such announcement or statement.

Page 29 of 2947

Ref No: 12/3/274

		
	28.
	Cession and Sub-contracting

		
	28.1.
	It is recorded that this Exploration Right may not be ceded, transferred, let, sub-let, assigned, alienated or otherwise disposed of without the written consent of the Minister in terms of Section 11 of the Act.

		
	28.2.
	The Holder may from time to time appoint one or more independent sub-contractors to carry out any portion of the Annual Exploration Work Programme and/or Exploration Work Programme, provided that the Holder shall always remain liable to the Grantor for the compliance with and observance of its obligations in terms of this Exploration Right.

		
	29.
	Law and Interpretation

		
	29.1.
	The Holder shall comply with all Applicable Laws.

		
	29.2.
	Without derogating from the provisions of Section 4 of the Act, this Exploration Right shall be governed, construed and interpreted in accordance with the laws of the Republic of South Africa.

		
	29.3.
	It is recorded that the Grantor and the Holder are not partners nor is it the intention of the Parties to create a partnership and that Exploration Operations to be carried out in terms of this Exploration Right are at the sole cost, risk and expense of the Holder.

		
	30.
	Obligations of the Grantor

		
	30.1.
	If, at any time or from time to time from the should be any change enacted or prescribed to any national legislation and/or regulations affecting petroleum exploration or production (“legislative changes”) which in any way materially limits and/or directly or indirectly adversely affects any rights hereby granted to the Holder, then the Parties shall consult with each other and conduct negotiations in the utmost good faith to agree on an equitable arrangement to take account of the impact of such changes, and failing agreement either party shall be entitled to refer the matter to arbitration as provided for herein.

		
	30.2.
	Terms relating to fiscal stability, will be established through contracts between the Holder and the Minister of Finance as provided for in the Income Tax Act and the Mineral and Petroleum Resources Royalty (Act No. 28 of 2008).

		
	31.
	State Option

		
	31.1.
	Subject always to the obligations of the Grantor contained in Clause 30, the State has the option, within 90 (ninety) days from the date of notarial execution of a Production Right, or in the event that the Holder exercises its option under clause 35.1. within 90 (ninety) Days after the expiry of the Gas Market Development Period, to acquire a percentage of the 

Page 30 of 3047

Ref No: 12/3/274

Participating Interest (“State Option”) in accordance with the provisions of the Applicable Laws prevailing at the time of the granting of a Production Right governing State Option requirements.
		
	31.2.
	Should the State elect to exercise such State Option it must notify the Holder in writing, within 90 (ninety) days of notarial execution of a Production Right or in the event the Holder exercises its option under Clause 35.1.1, within 90 (ninety) Days after the expiry of the Gas Market Development Period:

		
	31.2.1.
	that it has elected to exercise the State Option: and 

		
	31.2.2.
	of the percentage of the Participating Interest, up to a maximum allowed in accordance with the provisions of the Applicable Laws prevailing at the time of the granting of a Production Right governing State Option requirements, that it has elected to acquire

		
	31.3.
	Upon the exercise of the State Option in the manner contemplated in Clause 31.2, the State shall become a member of the Holder Group to the extent of its Participating Interest and the State shall also become a party to any joint operating agreement relating to the Production Right. The State shall pay its Participating Interest share of all costs and expenses in relation to the approved production work programme in respect of the production area, excluding any costs and expenses related to any previous and/or further Exploration or Appraisal Operations conducted within the production area.

		
	31.4.
	The State shall have the right at any time, on giving written notice to the Holder, to assign all or any part of its Participating Interest to any technically and- financially competent third party. Such assignment by the State will not require the consent of the Holder or any Holder Party. The assignment shall only become effective after the assignee consents to and executes the joint operating agreement applicable to this Exploration Right and/or any Production Right. The terms of such joint operating agreement shall neither limit the State in the exercise of any of its rights and obligations as Grantor nor impose additional obligations on the State in its capacity as Grantor merely because the State is also member of the Holder Group.

		
	31.5.
	Notwithstanding the foregoing provisions of this Clause 31, if the Holder has divested part of its Participating Interest prior to the exercise by the State of the State Option, then the percentage Participating Interest to be acquired by the State under the State Option shall be divided pro-rata among all of the Holder(s) of a Participating Interest and the foregoing provisions of this Clause 31 shall apply pari passu with respect thereto.

		
	32.
	Vis Major

Page 31 of 3147

Ref No: 12/3/274

		
	32.1.
	Any act, cause, thing or event outside the control of the Parties, including acts of God, war, insurrection, civil commotion, blockade, strikes, flood, storm, lightning, fire or earthquake which prevents any of the Parties from fulfilling its obligations under this Exploration Right shall be regarded as a vis major event and any such failure on the part of any of the Parties as a consequence of the vis major event shall not constitute a breach hereof.

		
	32.2.
	Financial inability, ordinary hardship and inconvenience on the part of the Holder, howsoever caused or arising, shall not be regarded as a vis major event.

		
	32.3.
	If the Holder by reason of a vis major event as contemplated in Clause 32.1 is prevented from fulfilling its obligations or enjoying its rights under this Exploration Right, the Holder shall in writing promptly notify the Grantor thereof and the Holder shall take all reasonable steps to investigate and remove the cause thereof. The Holder shall promptly notify the Grantor in writing as soon as the vis major event ends and the Holder shall as soon as is reasonably practicable thereafter resume the Exploration Work Programme.

		
	32.4.
	Upon the Holder notifying the Grantor of the end of the vis major, the duration of this Exploration Right shall automatically be extended for the equivalent period of time that the Holder was prevented from fulfilling its obligations or enjoying its rights under this Exploration Right by reason of such vis major. The Holder’s notice of the end of the vis major must declare the Holder’s intention to resume the Exploration Work Programme and state the length of the extension time. Such extension period shall be calculated from the date that the Holder first notified the Grantor in writing of the vis major event until the date that the vis major event has ended.

		
	32.5.
	In the event of the automatic extension envisaged in clause 32.4 above, the Holder shall present the original copy of this Exploration Right for an endorsement reflecting such extension and the Grantor shall make the same endorsement on the office copy.

		
	33.
	Amendments

		
	33.1.
	It is recorded that in terms of Section 102 of the Act, this Exploration Right may not be amended or varied without the written consent of the Director General (being the delegate of the Minister).

		
	33.2.
	The aforesaid amendment or variation shall be in writing and effective once the aforesaid consent has been given.

		
	34.
	Unitisation

		
	34.1.
	In the event that the rights held by the holders under two or more exploration rights and/or mining leases and/or production rights and/or prospecting leases or sub-leases extend over different areas which geologically form part of the same petroleum-bearing area within the 

Page 32 of 3247

Ref No: 12/3/274

Republic of South Africa, the Grantor may by notice in writing require the holders of such rights to prepare a proposal for the production of that petroleum-bearing area as a unit. Such proposal shall be submitted to the Grantor within the period specified in the said notice which shall not be less than 180 (one hundred and eighty) days.
		
	34.2.
	The unitisation proposal referred to in Clause 34.1 shall maximise the exploration and/or production for the benefit of all holders of interests in the unitised area.

		
	34.3.
	The Grantor may, if no unitisation proposal is submitted, or if the Grantor is not satisfied with the unitisation proposal submitted in terms of Clause 34.2, the matter shall be referred to [a  committee of up to three independent experts selected by the Grantor, the Holder and the holders of any other rights subject to a unitization proposal in accordance with this clause 34.

		
	34.4.
	The parties shall submit materials to the independent Expert within 30 (thirty) days of appointment and the Expert shall render a decision within 90 (ninety) days of appointment based on the following principles:

		
	34.4.1.
	all relevant technical data and production experience should be used in any equity determination/redetermination;

		
	34.4.2.
	the equity determination/redetermination process should require an initial tract participation, one equity determination and at least one equity redetermination, subject to the unanimous agreement of the unit participants not to pursue a scheduled redetermination; and

		
	34.4.3.
	equity parameters should be developed on a fair and equitable basis, consistent with sound engineering, technical, and economic principles and Good International Petroleum Industry Practices.

		
	34.5.
	The decision of the independent Expert shall be binding on the parties.

		
	35.
	Special Provisions Relating to Gas Discovery

		
	35.1.
	If the Holder discovers petroleum, the economic development of which the Holder believes can only be accomplished if Gas produced as the primary or secondary product is sold commercially, then the Holder shall have the option, exercisable upon written notice to the Grantor at the time that the Holder makes an application to the Grantor for a production right, to have the production right suspended for a period of up to 5 (five) years (hereinafter referred to as the “Gas Market Development Period”) commencing from the date of notarial execution of the Production Right during which period the Holder shall conduct studies to determine whether the Gas can be commercially produced. In such circumstances, the Development 

Page 33 of 3347

Ref No: 12/3/274

Plan and proposed production programme submitted in support of the application for the Production Right shall be deemed to be preliminary
		
	35.2.
	Not less than 90 (ninety) days prior to the expiry of the Gas Market Development Period the Holder shall advise the Grantor in writing either that:

		
	35.2.1.
	the Gas can be commercially developed and produced, in which case the Holder shall proceed with implementation of the Development Plan and proposed production programme, duly amended if necessary; or

		
	35.2.2.
	the Gas cannot be commercially developed and produced, in which case the Holder shall be deemed to have abandoned the Production Right with effect from 90 (ninety) days after Grantor has been; and 

		
	35.2.3.
	failure to give notice in the timely manner shall be construed as notice that the Gas cannot be developed and produced commercially.

		
	35.3.
	The grant of any extension to the Gas Market Development Period shall be at the sole discretion of Grantor.

		
	35.4.
	The activities envisaged to be relevant during a Gas Market Development Period do not include Exploration Operations.

		
	36.
	Waiver or Lenience

Any failure by either the Grantor or the Holder to exercise any of the rights that they have whether in terms of this Exploration Right, the Act or the Regulations, or any lenience granted by them In terms thereof shall not constitute a waiver of such rights or a variation to the terms and conditions of this Exploration Right.
		
	37.
	Dispute Resolution

		
	37.1.
	Should any difference or dispute arise between the Parties to this Exploration Right concerning;

		
	37.1.1.
	the conclusion, interpretation, application and execution of this Exploration Right;

		
	37.1.2.
	the authority of any signatory to the Exploration Right to conclude the Exploration Right on behalf of the party that he or she purports to represent;

		
	37.1.3.
	any alleged breach or repudiation of the Exploration Right;

		
	37.1.4.
	whether the Exploration Right is void or voidable at the instance of any Party;

		
	37.1.5.
	any rectification of the Exploration Right, and/or;

Page 34 of 3447

Ref No: 12/3/274

		
	37.1.6.
	any other matter arising from this Exploration Right,

(each, a “Dispute”), then either Party shall be entitled to deliver to the other a written notice recording the existence and, in brief, the nature of the Dispute (“the Dispute Notice”). The Dispute shall be deemed to have arisen on the date when a Dispute Notice is delivered to either Party. The Parties shall make every reasonable effort to resolve the Dispute on its merits by negotiation in good faith and shall, for that purpose, attend at least one meeting with each other. Such negotiations shall take place within 21 (twenty one) days of the Dispute arising, unless the Parties otherwise agree in writing, and shall endure for no longer than 7 (seven) days from the date of commencement thereof or such extended period as the Parties may agree in writing. 
		
	37.2.
	If the Parties are unable to resolve the Dispute despite compliance with Clause 37.1, then the Dispute may at the instance of either Party be referred to and fully, finally and exclusively settled by arbitration, in terms of the provisions hereof.

		
	37.3.
	The proceedings, records and the award of the arbitration shall be in the English language. The venue for and seat of the arbitration shall be Cape Town, Republic of South Africa or such other place in the Republic of South Africa as may be agreed between the Parties. The Parties hereby waive irrevocably their right to institute any form of appeal, review or recourse to any court of competent jurisdiction insofar as such waiver may be validly made.

		
	37.4.
	Notwithstanding the referral of such Dispute to arbitration, the Parties shall, to the extent possible, proceed with the carrying out of their respective obligations under this Exploration Right, unless such obligations are directly in dispute, provided that the foregoing undertaking shall be without prejudice to other rights and remedies available to either Party at law or in equity.

		
	37.5.
	The provisions of this Clause 37 shall survive the termination of this Exploration Right.

		
	37.6.
	The arbitration shall commence by a written notice (“the Arbitration Notice”) to that effect delivered by the Party demanding the arbitration (“the Plaintiff) to the other (“the Respondent”). No Arbitration Notice shall be delivered after the lapse of 90 (ninety) days after the terminations of any negotiations set out in Clause 37.1 above. Any Dispute, if not resolved and not thereafter made subject to arbitration, may at any time be raised again, commencing with the procedure set out in Clause 37.1 above. In the Arbitration Notice, the Plaintiff shall set out,

		
	37.6.1.
	a short summary of the nature of the Dispute;

		
	37.6.2.
	the relief claimed by the Plaintiff;

Page 35 of 3547

Ref No: 12/3/274

		
	37.6.3.
	the identity and curriculum vitae of an independent arbitrator proposed by the Plaintiff.

		
	37.7.
	Within 21 (twenty one) days after delivery of the Arbitration Notice, the Respondent shall deliver a written reply to the Plaintiff setting out the identity and particulars of an independent arbitrator proposed by it. If the Respondent shall not deliver such reply, the Plaintiff shall nevertheless be entitled to proceed with the arbitration as set out herein.

		
	37.8.
	There shall be 3 (three) arbitrators, appointed as set out herein, and all decisions, rulings and/or awards of the arbitrators shall be by majority decision amongst them. No person who has any pecuniary or any other interest, directly or indirectly, in either of the Parties, shall serve as arbitrator.

		
	37.9.
	The third arbitrator (or the second and third arbitrators if the Respondent shall not have delivered a reply as provided for in Clause 37.7), shall be appointed by the Secretariat of the ICC International Court of Arbitration (or its successor in title).

		
	37.10.
	The arbitrators shall determine the practical measures necessary to conduct the arbitration and shall issue directives in that regard to the Parties and/or their representatives, from time to time, as may be required. The arbitrators shall be entitled to award costs against any party on any scale as otherwise provided for in the Rules of the High Court of the Republic of South Africa and shall, in the case of any disagreement between the Parties about the amount of such costs, be entitled to retain the services of an independent legal costs consultant to determine the amount of any such costs. The costs, fees and charges of the arbitrators shall be borne by the Parties in equal proportion and shall be payable by them on presentation of invoices in that regard. Any order as to costs which may be made by the arbitrators shall operate as between the Parties only and shall not affect their obligation to the arbitrators as set out herein.

		
	37.11.
	Save as set out above and as may be otherwise agreed between the parties, the proceedings shall be conducted subject to and in accordance with the rules of the Arbitration Foundation of Southern Africa (“AFSA”).

		
	38.
	Costs and Value Added Tax

		
	38.1.
	All taxes, levies, stamp duties, transfer costs, transfer duties and registration costs arising directly or indirectly out of or related to this Exploration Right shall be for the account of and promptly paid by the Holder.

		
	38.2.
	All amounts due and payable by the Holder in terms of this Exploration Right, the Act and Regulations are exclusive of statutory value added tax. Statutory value added tax at the prevailing rate in accordance with the Value Added Tax Act (Act No. 89 of 1991), except as 

Page 36 of 3647

Ref No: 12/3/274

provided for by the terms of that Act, shall be added to all applicable amounts due and payable by the Holder.
		
	39.
	Entire Agreement

Subject to the Act, the Regulations, Applicable Laws, this Exploration Right and the Annexures attached hereto (those Annexures being and forming an integral part of this Exploration Right) contain the entire and sole agreement between the parties and supersede all prior negotiations, representations, understandings, agreements and communications of whatsoever nature between the Parties with respect to such Exploration Area, whether oral or written, express or implied. 
		
	40.
	Severability

Any provision within this Exploration Right which is not enforceable or which contravenes the Applicable Laws of the Republic of South Africa shall be severed from this Exploration Right and be of no force or effect without prejudice to the other provisions of this Exploration Right which shall remain in force and effect
		
	41.
	Domicilia Citandi et Executandi

		
	41.1.
	All notices, requests and reports provided for herein shall be in writing and shall be delivered either by hand to an authorised representative of the receiving Party, or sent by courier or telefax to the addresses below in the Republic of South Africa: Provided that if given by telefax a copy thereof shall then be sent immediately by prepaid registered mail:

If to the Grantor:
Minister of Mineral Resources
	
		
	Physical address:
	Postal address:

	Trevenna Campus 
Cnr Meintjes & Schoeman Streets 
PRETORIA 
0001 
Tel number +27 (0)12 444 3000
	Private Bag X59 
ARCADIA 
PRETORIA 
0007 
Fax number: +27 (0)12 444 3145

And copy to the Agency:
South African Agency for the Promotion of Petroleum Exploration and Exploitation (Proprietary) Limited
Attention: Chief Executive Officer

Page 37 of 3747

Ref No: 12/3/274

	
		
	Physical address:
	Postal address:

	7 Mispel Street 
BELLVILLE 
7530 
Western Cape 
 
Tel number +27 (0)21 938 3500
	P. O. Box 5111 
TYGERVALLEY 
7536 
 
 
Fax number: +27 (0)21 938 3553

If to the Holder:
	
		
	Physical address:
	Postal address:

	151 Kingston Road 
Oxford, OX2, 6RP 
United Kingdom 
 
Tel number +44 01865516910
	151 Kingston Road 
Oxford, OX2, 6RP 
United Kingdom

		
	41.2.
	Each Party, including the Agency, may change its address to a different address in the Republic: Provided that it gives the other Parties at least 15 (fifteen) days prior notice.

		
	41.3.
	All notices, requests and reports sent by prepaid registered post shall be deemed received by addressee within five (5) days of dispatch and all notices, requests and reports sent by telefax during ordinary business hours shall be deemed to have been received within 12 (twelve) hours of transmission or if transmitted outside ordinary business hours, then on the next business day. Those delivered by hand or sent by courier shall be deemed to have been received at the time of actual delivery.

		
	41.4.
	Each Party also chooses the physical address specified above as its domicilium citandi et executandi for all purposes under this Exploration Right, including service of process.

		
	42.
	Registration

It is recorded that in terms of Section 82 of the Act, the Holder must lodge this Exploration Right for registration at the Mineral and Petroleum Titles Registration Office within 60 (sixty) days from the notarial execution and, in the event of each renewal of this Exploration Right, within 60 (sixty) days of such renewal.

Page 38 of 3847

Ref No: 12/3/274

Thus done and signed at Bellville on 10th JANUARY 2019 in the presence of the undersigned witnesses:
AS WITNESS:
	
					
	1.
	/s/
	 
	 

	 
	 
	 
	/s/ Viljoen Störm

	 
	 
	 
	For and on behalf of the Grantor: South African Agency for Promotion of Petroleum Exploration and Exploitation (SOC) Ltd

	2.
	/s/
	 
	 

	 
	 
	 
	/s/ Paul Barrett

	 
	 
	 
	For and on behalf of the Holder: 
OK Energy Limited

	 
	 
	 
	 
	Quod Attestor

	 
	 
	 
	/s/ Hendrik Malherbe Oosthuizen

	 
	 
	 
	Notary Public

	 
	 
	 
	Seal: 
HENDRIK MALHERBE OOSTHUIZEN 
Notary Public 
WESTERN CAPE

Page 39 of 3947

Ref No: 12/3/274

Annexure A 
 
 
Sketch Plan for the Exploration Area

Page 40 of 4047

Ref No: 12/3/274

Annexure B 
 
 
Exploration Work Programme

Page 41 of 4147

Appendices for Northern Cape Ultra Deep Exploration Right Application
B.    Exploration Right Work Programme
Minimum proposed work programme is:
1.    Acquire 500 Line Km new 2D In-fill Data
2.    Purchase 800 Line Km Multi-Client Seismic
3.    Integrate new seismic into Kingdom Project
4.    Seismic Interpretation and Update Structural Maps
5.    Update Basin Model
6.    Generate Prospect Maps
Contingent Work Programme is:
1.    Acquire 1000 km2 3D seismic
2.    Multi-Beam Bathymetry
3.    Boat or Airborne acquired Full Tensor Gravity
4.    Seafloor Sampling for Geochemical Analysis

        

    
    

	
														
	
	 

	 
	 
	2014
	2015
	2016

	 
	 
	1st Qtr
	2nd Qtr
	3rd Qtr
	4th Qtr
	1st Qtr
	2nd Qtr
	3rd Qtr
	4th Qtr
	1st Qtr
	2nd Qtr
	3rd Qtr
	4th Qtr

	Seismic

	Purchase 700 Line km 2D multi-client seismic
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Acquire 500 Line km 2D in-fill seismic
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Satellite Seep Studies
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	1000 sq km 3D seismic
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Multi-Beam Bathymetry
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Boat or Airborne Acquired Full Tensor Gravity
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Seafloor Sampling
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	G&G
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Integrate new seismic into Kingdom Project
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Seismic Interpretation and Update Structural Maps
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Update Basin Model
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Generate Prospect Maps
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Engineering

	Economic modeling
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Environmental Assessment

	Environ. Assess, for Exploration Programme
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	G&A

	Travel
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Legal
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Forward Programme

	Decision on forward programme
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 

	 
	 
	 
	Firm
	 
	 
	 
	Contingent
	 
	 
	 
	 
	 

	
					
	Phase 1 Exploration Work Programme Costs Northern Cape Ultra Deep

	Work Programme
	 
	Cost Category
	Est. costs- USD
	Total-USD

	 
	 
	 
	 
	 

	Seismic, Geochemical, Gravity, Bathymetry

	Purchase c. 800 Line km 2D seismic
	 
	Purchase
	360 000

	Acquire 500 Line km 2D in-fill seismic
	 
	Purchase
	275 000

	1000 sq km 3D seismic
	 
	Contingent
	 

	Multi-Beam Bathymetry
	 
	Contingent
	 

	Boat or Airborne Acquired Full Tensor Gravity
	 
	Contingent
	 

	Seafloor Sampling
	 
	Contingent
	 

	Total Seismic cost
	 
	 
	 
	635 000

	 
	 

	G&G

	Integrate new seismic into Kingdom Project
	 
	Labour
	20 000

	Seismic Interpretation and Update Structural Maps
	 
	Labour
	40 000

	Update Basin Model
	 
	Labour
	50 000

	Generate Prospect Maps
	 
	Labour
	40 000

	Total G&G costs
	 
	 
	 
	150 000

	 
	 

	Engineering

	Economic modeling
	 
	consultants
	40 000

	Total Engineering cost
	 
	 
	 

	 
	40 000

	Environmental Assessment
	 

	Environ. Assess, for Exploration Programme
	 
	consultants
	100 000

	Total Environmental Assessment
	 
	 
	 
	100 000

	 
	 

	Travel

	S. Africa
	 
	travel
	30 000

	Total Travel
	 
	 
	 
	30 000

	 
	 

	Legal

	Licence, JOA, Ministry and Mining Code
	 
	consultants
	80 000

	Total Legal
	 
	80 000

	 
	 

	Total Exploration Work Programme Costs
	1 035 000

Ref No: 12/3/274

Annexure C 
 
 
Relinquishment Schedule
	
		
	At the end of ...
	% of the original extent of the Exploration Area

	 
	 

	The Initial Period
	Not less than 15%

	 
	 

	The First Renewal Period
	Not less than 15%

	 
	 

	The Second Renewal Period
	Not less than 15%

Page 45 of 4547

Ref No: 12/3/274

Annexure D 
 
 
 
 
Schedule of contributions to the Upstream Training Trust
	
		
	On granting and each subsequent renewal
	100 000

Page 46 of 4647

Ref No: 12/3/274

Annexure E 
 
Existing Data made available to the Holder

Page 47 of 4747EX-10.23

 Exhibit 10.23 

*Certain identified information has been excluded from this exhibit because it is 

both (i) not material and (ii) would be competitively harmful if publicly disclosed. 

The redacted confidential portions of the exhibit are marked by [***]. 

COMMERCIAL & DISTRIBUTION AGREEMENT 

between 
 Siemens Healthcare
Diagnostics Inc. 
 and 

Universal Biosensors Pty Ltd. 
 This
Commercial and Distribution Agreement, dated as of September 18, 2019 (the “Distribution Agreement”) is between Siemens Healthcare Diagnostics Inc., incorporated in California and whose registered office is at 511 Benedict Avenue,
Tarrytown, New York 10591 (“SHDI”) and Universal Biosensors Pty Ltd. (“UBI”), whose registered office is at 1 Corporate Avenue, Rowville, Victoria 3178, Australia, (collectively, “UBI” and together with SHDI, the
“Parties”). 
 Background 

WHEREAS, on September 9, 2011, UBI and SHDI entered into a Collaboration Agreement and a Letter Agreement, on September 20, 2012 a
Supplemental Agreement, on December 12, 2014 a Xprecia Stride Letter Agreement, and subsequent various amendments to the Collaboration Agreement (such amendments together with the Collaboration agreement collectively, the “Collaboration
Agreement”) under which, among other things, UBI and SHDI agreed to collaborate together on UBI’s development of a Stride Strip Product to be used in conjunction with an associated Stride Instrument for SHDI to sell in the hospital point-of-care coagulation market subject to the terms and conditions set forth in the Supply Agreement; 

WHEREAS, on September 9, 2011, UBI and SHDI entered into a Collaboration Agreement and a Letter Agreement, on September 20, 2012 a
Supplemental Agreement, on December 12, 2014 a Xprecia Stride Letter Agreement, and subsequent various amendments to the Collaboration Agreement (collectively, the “Collaboration Agreement”); and whereas on September 20, 2012,
SHDI and UBI entered into a Supply Agreement (the “Supply Agreement,” and collectively with the Collaboration Agreement, the “Agreements”); 

WHEREAS, the Parties now wish to amend the commercial relationship between the Parties and enter into this Distribution Agreement whereby,
among other commercial terms, SHDI shall provide UBI with Stride Instruments as described herein after the execution of this Distribution Agreement (the “Execution Date”) for UBI to distribute; and 

WHEREAS, [***]. 
 Now,
THEREFORE, in consideration of the mutual promises, the Parties hereto agree as follows: 
 ARTICLE 1    DEFINITIONS 

“Execution Date” shall mean the date of execution of this Agreement. 

 “Field” shall have the meaning given in Exhibit 1 attached. 

[***] 
 [***] 

“Prime Instruments” shall mean the handheld analyzer developed by UBI and manufactured for SHDI (also often referred to as the Prime reader
or meter) [***]. 
 “Prime Product” shall mean collectively the Prime Instrument, the Prime Strip Product, and any Prime Product
Accessories. 
 “Prime Strip Product” shall mean [***]. 

[***] 
 “Specifications” shall mean [***]. 

“Stride Instruments” shall mean the handheld analyzer developed by UBI and manufactured for SHDI (also often referred to as the Stride reader
or meter) that is capable of reading and reporting results for Stride Strip Products and contains the XPRECIA STRIDE brand name. 
 “Stride Strip
Product” shall mean a PT/INR strip product manufactured by UBI for SHDI and containing the XPRECIA STRIDE brand name. 
 “Stride
Product” shall mean collectively the Stride Instrument, Stride Strip Product, and any Stride Product Accessories, including LQC kits (as defined below).  

“Territory” shall mean global territory, unless otherwise explicitly stated. 

All currency in this Distribution Agreement is in United States Dollars, unless otherwise explicitly stated. 

 Other terms are defined below: 

ARTICLE 2    DISTRIBUTION ARRANGEMENT BETWEEN THE PARTIES 
  

	2.1	 Distribution Rights 

SHDI hereby relinquishes its exclusive right to commercialize and distribute the Stride Product and Prime Product, and all components thereof individually or
collectively, to the professional Point of Care market segment, except SHDI retains non-exclusive distribution and other rights set forth in the Agreements only to the extent necessary to fulfill existing
contracts for the Stride Product [***]. SHDI relinquishes all distribution and other rights to the Stride Product and the Prime Product, and all components thereof individually or collectively, under the Agreements for all applicable markets upon
the Execution Date. For the avoidance of doubt, the rights transferred to UBI pursuant to this Distribution Agreement include, among other things, any rights and/or obligations necessary to seek regulatory registration and approval with respect to
the Stride Product, the Prime Product, or any other product, and all components thereof individually or collectively, in jurisdictions whether or not the Stride Product or Prime Product is currently sold there, or where additional or further
regulatory registrations and/or approvals are or become necessary, which rights shall include but not be limited to: (i) disclosing any information necessary to the relevant regulatory entity, (ii) completing and submitting any required
documentation related to the registration and approval, and (iii) any other action UBI shall determine in its sole discretion is necessary with respect to seeking such registration or approval. [***]. 

SHDI agrees to comply with the following obligations to enable UBI to fulfill its role as a distributor: 

 

	2.2	 SHDI’s Distribution Arrangement Obligations 

 

	(a)	 Within five (5) days of the Execution Date, SHDI shall send a letter to [***] stating that that SHDI
consents to [***] manufacturing any brand of instruments for UBI [***]. UBI acknowledges that SHDI is not responsible for [***] agreement to UBI’s manufacturing terms. 

 

	(b)	 After the [***], Siemens is no longer responsible for any Stride Instruments and/or alternative instrument
(excluding the Stride Instruments described in 2.2(d) below) that [***] manufactures for UBI, and SHDI will not be involved in any relationship going forward between UBI and [***], although Siemens will provide any necessary support to UBI and [***]
to the extent it is able to do so. 

  

	(c)	 Within five (5) days of the Execution Date, SHDI shall provide to UBI in writing the information listed
and as agreed to in Exhibit 2 to this Distribution Agreement. 

  

	(d)	 [***]. Except as for matters directly related to actions mandated by the SHDI quality/regulatory system or by
regulatory authorities, SHDI shall in no way discourage its customers from using the Stride Product or any components thereof. 

  

	(e)	 SHDI hereby appoints UBI exclusively to distribute and receive payment for approximately [***] Stride
Instruments, which shall come in the manufacturer’s final box packaging, that are currently in SHDI’s inventory. UBI may distribute the Stride Instruments directly or through

	 	
UBI-appointed distributors. Projected inventory is subject to changes based upon [***]. The final inventory amount shall be contained on Exhibit 2. For
each instrument less than [***] provided by SHDI, SHDI shall pay to UBI [***] per instrument for each instrument. For each instrument less than [***] provided by SHDI, SHDI shall pay to UBI [***] per instrument for each instrument.

  

	(f)	 SHDI shall provide UBI the Stride Instruments referenced above in Section 2.2(d) as follows:

 1. UBI shall place purchase orders in writing at times to be determined solely by UBI, such purchase orders shall in no
case be for fewer than [***]. 
 2. After receipt of such written purchase order, SHDI shall have no longer than [***] (the “Lead
Time”) to deliver the order to the country of destination designated by UBI, provided that any additional time required to clear customs in any jurisdiction that requires such clearance shall not be included in the [***]. 

3. All purchase orders to be delivered to a facility designated by UBI. SHDI shall ship Stride Instruments to UBI in increments of [***] at a
time pursuant to the installment schedule determined by the Parties and at UBI’s cost to a designated facility of UBI’s choosing. The address of such designated facility to be provided to SHDI within [***] from the Execution Date of the
Agreement or with the first purchase order whichever is sooner. 
 4. [***]. 

5. After the end of [***], SHDI shall ship any remaining Stride Instruments as described in Section 2.2(d) to the designated UBI
facility. 
  

	(g)	 In addition to UBI’s right to sell, market, and distribute Stride Instruments, [***], SHDI hereby appoints
UBI to market and sell to customers the Stride Strip Products, including those bearing Siemens’ brand, directly or through UBI-appointed distributors in connection with the sale by UBI or any partner of
its choosing, of the Stride Instruments as set forth in clause (d) above. UBI can also sell non-Siemens branded strips that are compatible with the Stride Instrument in connection with the Stride
Instruments referenced in clause (d) above at its discretion, [***]. [***]. 

  

	(h)	 UBI shall have the right to use the SHDI brand in connection with its sales, distribution, and marketing of
Stride Products, or any components thereof, [***]. [***], provide service and support for the distribution and sale of all Stride Products, or any components thereof, to SHDI customers. [***]. For the avoidance of doubt, UBI may sell non-Siemens branded strips to any customers who are still using Siemens-branded instruments [***]. During all times that UBI is selling the Stride Product, UBI will adhere to the current arrangement in terms of
quality assurance. 

  

	(i)	 During the [***], SHDI will make available to UBI for purchase an adequate number (which number shall be
determined between the Parties) of [***] for the Stride Product which have been sold by UBI. If SHDI is unable to continue supplying UBI with [***] beyond [***], SHDI will assist UBI in its efforts to establish uninterrupted supply of [***] beyond
[***] with the supplier of [***]. [***]. 

	(j)	 SHDI will support UBI in its efforts to identify and appoint distributors [***]. [***]. 

 

	(k)	 SHDI to collaborate with UBI on customer transition as may be agreed between the Parties’ designated
marketing and sales representatives. 

  

	(l)	 SHDI shall purchase at least [***] during [***] at the contractually stated strip price contained in Exhibit 2.
SHDI shall make a [***] prepayment for such [***] to UBI in cash to a bank account specified by UBI on or before [***]. This amount shall be applied by UBI against all invoices delivered by UBI to SHDI for [***] after the Execution Date of this
Distribution Agreement. After the [***] is fully deducted from invoices payable by SHDI to UBI, SHDI will make payment on any invoices for Stride Strip Product purchases delivered by UBI to SHDI in cash promptly upon receipt thereof.

  

	(m)	 SHDI’s commitment to purchase [***] shall terminate when SHDI has completed payment for [***] at the
contractually stated strip price contained in Exhibit 2, which in any event shall occur no later than the end of [***]. The Parties acknowledge that SHDI may have contractual commitments that extend beyond [***]. In such circumstances, the Parties
agree to discuss in good faith how to manage such customers and reach an amicable outcome for the Parties and the applicable customer, including Siemens shall have the option to purchase additional [***] at the contractual price contained herein for
a reasonable time beyond [***]. 

  

	(n)	 [***] shall have a minimum shelf life of [***] when received by SHDI. SHDI shall provide a [***] forecast of
anticipated [***] purchasing needs with only [***] of such forecast binding on the Parties. 

  

	2.3	 UBI’s Distribution Arrangement Obligations 

 

	(a)	 UBI represents that it (with its principals and employees) possesses the technical know-how, resources, infrastructure, and ability to sell the Stride Instruments manufactured by or for SHDI and intends to sell the Stride Instruments and Stride Strip Products described in section 2.2.(e) on the
terms set forth herein and in the Territory independently and not through a sales agent or other representative of any third-party other than SHDI. 

  

	(b)	 SHDI is desirous of having UBI sell the Stride Instruments in such Territory on the terms and conditions set
forth herein. 

  

	2.4	 UBI’s Stride Strip Product Supply Obligations 

UBI’s supply of Stride Strip Products is controlled by the Parties’ Supply Agreement which remains in effect except as otherwise modified. In the
event there is a conflict between this Distribution Agreement and the Supply Agreement, this Distribution Agreement shall control and prevail. 

	2.5	 Failure to Supply Event to Enforce Bank Guarantee 

If UBI fails to deliver to SHDI the full quantity of [***] requested by Siemens to be delivered in such month, to the extent such Purchase Order is submitted
by SHDI with sufficient lead-time as set forth in Section 4.1 of the Supply Agreement, is consistent with Siemens’ forecasts, which forecasts shall have been delivered to and accepted by UBI as of the terms of the Supply Agreement, and
does not exceed UBI’s supply commitment; and except to the extent such failure or delay is caused by Force Majeure or by SHDI’s failure or delay in delivering any applicable [***] in sufficient quantity necessary to produce the quantity of
such [***] requested, then, UBI will endeavor to advise SHDI in advance of any inability to make full and timely delivery of [***]which SHDI has ordered. UBI has an opportunity to cure such failed supply within [***], assuming opportunity to
cure is not deemed futile. If the supply issue is not cured within [***], a Failure to Supply Event has occurred and SHDI shall be entitled to enforce the Bank Guarantee (defined below) attached hereto as Exhibit 3. For the avoidance of doubt,
Section 1.12 of the Parties’ Supply Agreement is not replaced by this Section and shall still be binding on the Parties. 
 ARTICLE
3    MANUFACTURING CHANGE REQUESTS BY UBI 
 UBI shall at all times retain all manufacturing rights with respect to the Stride Strip
Product, including all rights to subcontract its manufacturing and/or relocate its manufacturing facility and/or change its strip manufacturing procedures (“Manufacturing Changes”). [***]. [***]. The Parties shall negotiate in good faith
to resolve any issues with Manufacturing Changes. 
  

	3.1	 Manufacturing Process and Calibrations 

UBI intends to implement a master lot/working lot calibration process, and shall seek SHDI’s prior review and approval, which approval or denial shall not
be unreasonably withheld or delayed and shall be delivered no later than three (3) months after any such request by UBI. 
  

	3.2	 Manufacturing Process and Shelf Life 

UBI intends to implement [***] expiration extensions providing at least [***] shelf life for the [***] and shall seek SHDI’s prior review and approval,
which approval or denial shall be delivered no later than [***] from such request by UBI. [***]. 
  

	3.3	 Last-Time Buy 

SHDI may make a last time buy by [***]. Last time buy means the last purchase by SHDI which may consist of quantities of [***] higher than forecasted volumes
due to SHDI’s requirement to provide the [***] to the end of its life cycle. Such quantities to be agreed to by the Parties and shall be within the production capacity of UBI. 

ARTICLE 4    PRODUCT REGISTRATION 

SHDI commits to maintain any required and already obtained regulatory product registrations for the [***] in countries where SHDI currently generates revenue
from sales of the Stride Product. [***], UBI is responsible for any product registrations for any non-Siemens branded Stride Instrument or alternative instrument. The Parties shall designate representatives to
coordinate such filings between the Parties [***]. 

	4.1	 Re-registration 

UBI acknowledges that a UBI Manufacturing Change may require SHDI to re-register the Stride Product in certain
jurisdictions, which may involve additional resource commitments and expenses for SHDI. At least [***] prior to implementing any Manufacturing Change, the Parties shall discuss UBI’s proposed Manufacturing Change(s), and if: (i) the
aggregate of all such reasonable registration related costs incurred by SHDI over the [***] for the Manufacturing Change(s) would exceed [***] and (ii) SHDI does not withhold approval pursuant to Article 3 above, UBI will reimburse Siemens for
any reasonable registration related expenses incurred and documented by Siemens that exceed [***] and/or UBI may propose other solutions for the Parties to consider and negotiate in good faith. [***]. 

ARTICLE 5    OPERATIONS 
  

	5.1	 Acceptance of Stride Instrument Supplied by SHDI 

 

	(a)	 All orders for the Stride Instrument that SHDI receives from UBI are subject to acceptance by SHDI. UBI will
place orders and place delivery schedules with SHDI for its requirements in accordance with the agreed upon Lead Time. SHDI’s Lead Time may be amended from time to time upon no less than [***] days prior written notice from SHDI to UBI so that
adequate inventory is maintained, and only upon agreement of all Parties. UBI should attempt, as a matter of course, to determine the availability of [***] before making any binding commitment to supply to customers. 

 

	(b)	 SHDI will use commercially reasonable efforts to fill the accepted orders as promptly as practicable, subject,
however, to any delays caused by other orders or requirements, transportation conditions, labor or material shortages, governmental restrictions or embargo, strikes, riots, fires, acts of God, or any other cause beyond the reasonable control of
SHDI. In all cases SHDI will endeavor to advise UBI in advance of any inability to make full and timely delivery of any Stride Instruments which UBI has ordered. 

 

	5.2	 Delivery 

  

	(a)	 All Stride Instruments ordered by UBI shall be packed for shipment and storage in accordance with SHDI’s
standard commercial practices, provided that SHDI packages, labels, stores, and supplies shall be in compliance and in accordance with: (i) all applicable local, state, federal and national laws, regulation, rules, guidelines and procedures,
including but not limited to the U.S. Federal Food, Drug and Cosmetic Act, as amended, and the regulations issued thereunder; (ii) applicable standards relating to current good manufacturing practices for the type of Stride Instrument furnished
hereunder promulgated by any governmental authority having jurisdiction over the manufacture and sale of such products, in the form of laws, statutes, regulations, or guidance documents; and (iii) the Stride Instrument product Specifications.
SHDI shall bear all costs associated with label printing, labeling, and packaging of the Stride Instrument. 

  

	(b)	 [***]. Accordingly, UBI agrees to properly disclose and appropriately reflect the credit or reduction in price
in any costs claimed or charges made to Medicare, Medicaid or other federal or state health insurance programs which reimburse the products and require such disclosure. 

	5.3	 Acceptance of Stride Instruments 

 

	(a)	 UBI shall inspect all shipments of Stride Instruments received from SHDI for conformity with its orders. UBI
shall notify SHDI and the carrier if any of the Stride Instruments are damaged, missing or not in conformity with UBI’s order (“Non-Conforming”), as soon as possible, and no later than eight
(8) calendar days after receipt of the Stride Instruments. UBI’s failure to do so will be deemed a waiver of any such claims, except in the case of latent defects not discoverable by normal incoming inspection procedures. The Stride
Instrument will be held by UBI at UBI’s risk. 

  

	(b)	 Upon receipt of UBI’s notification that any Stride Instrument is
Non-Conforming, SHDI may elect to inspect the Stride Instrument. If SHDI agrees that the Stride Instrument is Non-Conforming and that such defect or Non-Conformity is attributable to SHDI shall replace or correct such Stride Instrument or if replacement is not possible, SHDI shall reimburse UBI, as UBI’s sole remedy. 

 

	(c)	 Unless SHDI has expressly authorized or permitted the return of any Stride Instrument Products hereunder, SHDI
shall not be obligated to accept from UBI any Stride Instruments returned, nor to make any exchange thereof. 

  

	(d)	 Except in the case of damage or defect attributable to SHDI as notified to SHDI pursuant to this Article 5 or
warranty claims, UBI shall not make any claims against SHDI for any Non-Conforming Stride Instruments. 

ARTICLE 6    OUTSTANDING PAYMENT OBLIGATIONS 

As promptly as practicable after the Execution Date, (i) UBI shall extinguish [***] of outstanding purchase orders related to the Collaboration Agreement
and (ii) SHDI shall extinguish [***] that was paid to UBI pursuant to Section 3.2 of the Supply Agreement. 
 ARTICLE
7    BUSINESS DEVELOPMENT SUPPORT 
 SHDI will support UBI in good faith in the establishment of an agreement with another partner,
[***]. Such support will include, but is not limited to, [***]. [***]. [***]. 
 ARTICLE 8    UBI PERFORMANCE GUARANTEE 

A performance guarantee [***] shall be held in a UBI bank account with Commonwealth Bank of Australia, [***]. SHDI shall be under no obligation to
deliver the Stride Instruments referenced herein in section 2.2(d), (e), and (f), until SHDI’s receipt of a fully-effectuated Bank Guarantee from UBI. In the event that this Distribution Agreement is terminated due to a breach of this
Distribution Agreement by UBI, (such breach either not disputed by UBI or admitted by UBI or breach finally determined in accordance with the dispute resolution procedures in Article 14 of the Supply Agreement) or due to UBI’s insolvency as set
forth in Section 17.1(b), the Bank Guarantee shall survive such termination. 

 ARTICLE 9    [***] 

 

	9.1	 [***] 

[***]. [***]. [***]. [***]. [***]. [***]. [***]. [***]. 
  

	9.2	 [***] 

[***]. 
 ARTICLE 10    TERM 

This Distribution Agreement shall commence on the Execution Date and shall continue in full force and effect until [***], unless extended by mutual written
agreement by the Parties’ or their authorized representatives, unless sooner terminated as provided herein. 
 ARTICLE
11    INTELLECTUAL PROPERTY LICENSES 
  

	11.1	 [***] 

  

	(a)	 [***]. [***] . 

  

	(b)	 [***]. [***]. 

  

	(c)	 [***]. 

  

	(d)	 [***]. 

  

	(e)	 [***]. [***]. [***]. 

 

	(f)	 [***]. [***]. 

  

	11.2	 [***] 

  

	(a)	 [***]. [***]. [***]. [***]: 

[***]. [***]. [***]. [***]. [***]. [***]. [***]. [***]. 

ARTICLE 12    CONFIDENTIALITY 
  

	12.1	 Parties’ Confidential Information 

 

	(a)	 This Distribution Agreement, its terms, and the negotiations leading to this agreement are confidential. No
Party shall disclose or cause to be disclosed this Distribution Agreement, the terms of this agreement, or any drafts or communications relating to the negotiation of this Agreement to any person not a Party to this Distribution Agreement without
the written consent of all Parties. Notwithstanding anything contained within this Section 12, each Party may share this Distribution Agreement, its terms, and any drafts or the negotiations leading to this Agreement, with its respective
lawyers, advisors, consultants, accountants and auditors on a need to know basis provided these individuals agree to use and maintain the information in a confidential manner consistent with the provisions contained in this Agreement.

	(b)	 The parties acknowledge that, as a result of this Distribution Agreement, each may become acquainted with the
confidential or proprietary data (“Confidential Information”) of the other party, including data concerning a party’s services, products, business methods, financial information, projections, technology, databases, customer,
distributors, supplier, and employee information, Trade Secrets (as defined below), and other information the secrecy of which is valued by the disclosing party. The receiving party shall: (i) hold the disclosing party’s Confidential
Information in strict confidence; (ii) refrain from disclosing Confidential Information to any third parties or to its own employees or consultants other than those who need to know the Confidential Information, who are aware of the
confidential nature of the Confidential Information, and who have a confidentiality obligation to the receiving party; and (iii) use the Confidential Information only as authorized under this Agreement. 

 

	(b)	 Notwithstanding anything to the contrary in this Agreement, the receiving party will have no obligation with
respect to any Confidential Information which: (i) is already known to the receiving party without any confidentiality undertaking (as evidenced by reasonable supporting documentation in existence as of the date of receipt of the Confidential
Information); (ii) is or becomes publicly known through no fault of the receiving party; (iii) is developed by the receiving party independently of the Confidential Information (as evidenced by reasonable supporting documentation); (iv) is
approved for release in writing by disclosing party; (v) is required to be disclosed by law or in connection with a request of a court or governmental agency, provided, however, that the receiving party will provide the disclosing party
with at least ten calendar days’ advance written notice prior to disclosure to permit the disclosing party to obtain a protective order or other similar relief; or (vi) is, to the receiving party’s knowledge, rightfully received from
a third party having no secrecy or confidentiality obligation to the disclosing party. 

  

	(c)	 The receiving party’s obligations under this Distribution Agreement will apply to Confidential Information
during the term of this Agreement; provided, however, that for any Confidential Information constituting a trade secret as defined under the California Uniform Trade Secrets Act (“Trade Secret”), as now in force or hereafter amended, or
any similar successor law, the receiving party’s obligations will continue to apply to the Confidential Information, [***], for so long as the Confidential Information continues to constitute a Trade Secret. 

 

	(d)	 All documents and other tangible materials embodying Confidential Information (including reports, marketing
materials, and other work product prepared by receiving party based wholly or partly on Confidential Information), irrespective of media, will be, at the disclosing Party’s option, promptly returned to the disclosing Party or destroyed by the
receiving party (such destruction to be certified by the receiving party) upon thirty (30) calendar days’ notice by the disclosing party. 

  

	(e)	 In the event either Party desires to disclose the existence of this Agreement or the terms of this Agreement to
any third-party not authorized herein, the Party desiring to disclose such information, shall request permission from the other Party in writing. The confidentiality obligations set forth in this Article 12 continue beyond the termination or
expiration of this Distribution Agreement. 

 ARTICLE 13    Facilities, Books and Records 

 

	13.1	 Audit Rights 

  

	(a)	 SHDI (or a third party retained by SHDI) shall be entitled to conduct an audit of UBI upon reasonable prior
notice, to ensure UBI’s performance under this Agreement or any related agreement, provided that SHDI shall not be entitled to conduct more than one (1) audit every year. 

 

	(b)	 SHDI can conduct an audit of UBI if SHDI has obtained good faith information which indicates that UBI: 

  

	 	(i)	 may have breached any of its obligations, representations or warranties under this Agreement; or

  

	 	(ii)	 may have good cause to terminate the Agreement in accordance with this Distribution Agreement.

  

	(c)	 UBI agrees to fully cooperate in any audit to which it may be subject and agrees to keep and make available in
the case of audit, books and records relating to its obligations under this Distribution Agreement. 

  

	(d)	 UBI agrees to make available its facilities and warehouses available for audit and inspection pursuant to the
terms in this Article. 

  

	(e)	 UBI’s failure to comply with this Article shall constitute a material breach for purposes of this
Agreement. Notwithstanding any other provision or this Agreement, the rights of SHDI hereunder shall be specifically enforceable in any court of competent jurisdiction. 

ARTICLE 14    OTHER OBLIGATIONS OF THE PARTIES 
  

	14.1	 Insurance 

The Parties shall procure and maintain in full force and effect during the term of this Distribution Agreement valid insurance policies, through an insurance
carrier possessing at least an A.M. Best Rating of “A-“, in connection with its activities as contemplated hereby, which policies shall provide for appropriate insurance in a reasonable amount of
coverage, but in no event less than the following limits: 
  

	(a)	 [***]. 

  

	(b)	 [***]. [***]. [***]. [***]. 

 

	14.2	 Compliance with Applicable Law 

 

	(a)	 The Parties shall comply with the U.S. Foreign Corrupt Practices Act, U.S. and
non-U.S. anti-bribery and anti-corruption laws, the Anti-Kick Back law, and all other laws, rules and regulations applicable to this Agreement and to all transactions and activities contemplated by or to be
performed hereunder. 

  

	(b)	 The Parties shall perform their duties under this Distribution Agreement in compliance with all applicable laws
and regulations and conduct themselves in a manner that will reflect favorably at all times on the other Party and the Stride Product, and not engage in any deceptive, misleading, or unethical practice that might have a commercially detrimental
effect on same. 

  

	(c)	 UBI shall provide immediate notification to SHDI upon discovery of any potential violation of SHDI Business
Conduct Guidelines attached hereto and fully incorporated herein, the U.S. Foreign Corrupt Practices Act, any U.S. or non-U.S. anti-bribery and anti-corruption laws, the Anti-Kick Back law, or any other laws,
rules and regulations applicable to this Agreement. Further, UBI shall cooperate with SHDI in any investigation regarding such potential violations. 

  

	(d)	 The Parties agree to fully comply with the requirements set forth by any applicable legislation in the
Territory. [***]. [***]. 

  

	(e)	 UBI shall be responsible for its own taxes incurred, and Siemens shall be responsible for its own taxes
incurred, whether in the Territory or any other country, now or hereafter imposed with respect to the transactions contemplated hereunder. 

  

	14.3	 SDHI Business Conduct Guidelines 

 

	(a)	 UBI has read and understands the SHDI Supplier Code of Conduct, attached hereto as Exhibit 4, and agrees to
comply with this program with respect to its obligations under this Distribution Agreement, and such guidelines are incorporated herein. 

ARTICLE 15    RECALLS 
 If SHDI
decides to institute a recall of any Stride Instrument from the marketplace (“Product Recall”), whether mandated by local governmental authorities, or instituted by voluntary action, or to undertake any other form of Field Corrective
Action (“FCA”) with respect to any Stride Instrument or any component thereof (including software) for safety checks or modifications or, as applicable, installation of appropriate upgrades, software fixes, or related items, then upon
notification by SHDI, UBI shall implement the Product Recall (or FCA) as instructed by SHDI. UBI shall inform its customers of the Stride Instrument and end users of the Product Recall (or FCA) in a timely manner and in accordance with the
instructional materials provided by SHDI. All reasonable out-of-pocket costs associated with the Product Recall including without limitation, the cost of parts required
for such activities and the associated labor costs shall be borne by the party responsible for the Product Recall. Irrespective of the case of the Product Recall, the Parties shall fully cooperate with each other in implementing and managing the
Product Recall. If necessary, UBI shall reasonably comply with all medical vigilance or post-market surveillance requirements applicable in the Territory for Product-related corrective actions of the type contemplated herein. [***]. 

ARTICLE 16    Additional Obligations of the Parties/Representations and Warranties 

 

	16.1	 Additional Obligations of UBI 

 

	(a)	 [***], UBI shall remove the branding on Siemens’ Stride and Prime Products described in section 2.2(d)
that have not been sold to or placed [***] to customers (and may replace it with branding of UBI’s choice) and may remove certain packaging and replace batteries for Siemens’ Stride and Prime Products. [***], UBI shall not modify the
Stride Products, including packaging, labeling, inserts or instructions, apart from batteries, for use, in any way without the prior written consent of SHDI. 

  

	(b)	 UBI shall store and distribute the Stride Products while containing SHDI and/or XPRECIA STRIDE and/or STRIDE
brand in accordance with the conditions shown on the Product’s labeling. 

  

	(c)	 UBI shall transfer to end customers as soon as reasonably possible all information provided by SHDI and only to
the extent such information is in fact provided by SHDI at SHDI’s cost and is necessary for the safe use of the Stride Instrument, including instructions for use, material safety data sheets, customer bulletins and other mandatory safety
related documents. 

	(d)	 UBI shall communicate all technical support bulletins to the designated recipient(s) at UBI as they become
available. Information contained in technical support bulletins are written specifically for use by qualified support staff and shall be considered confidential and not communicated to third parties without consent from SHDI. 

 

	(e)	 UBI agrees to provide to its customers a UBI warranty, a copy of which shall also be provided to SHDI for its
records. 

  

	(g)	 UBI shall, subject to applicable data protection laws, make available to SHDI upon request all documentation
and information related to performance of this Agreement. 

  

	16.2	 Additional Obligations of SHDI 

 

	(a)	 SHDI, or its manufacturing partner, shall manufacture, package, label, store, and supply Stride Products in
compliance and in accordance with: (i) all applicable local, state, federal and national laws, regulation, rules, guidelines and procedures, including but not limited to the U.S. Federal Food, Drug and Cosmetic Act, as amended and the
regulations issued there under; (ii) applicable standards relating to current good manufacturing practices for the type of Stride Products furnished hereunder promulgated by any governmental authority having jurisdiction over the manufacture
and sale of such Stride Products, in the form of laws, statutes, regulations, or guidance documents; and (iii) the Stride Products Specifications. [***]. 

 

	(b)	 SHDI shall notify UBI immediately in writing should SHDI become aware of any defect or condition which may
render any of the Stride Products in violation of the Food, Drug and Cosmetic Act or any other applicable law. 

  

	(c)	 SHDI shall notify the appropriate federal, state and local authorities of any customer complaints or other
occurrences regarding the Stride Products which are required to be so reported in accordance with SHDI compliant procedures as contained in the Parties’ Quality Agreement. SHDI shall be responsible for evaluating all complaints regarding the
Stride Products. For complaints from SHDI’s customers, SHDI shall be responsible for responding to the complaint(s). For UBI customers, UBI shall forward customer complaints to Siemens and Siemens shall provide the results of its applicable
evaluation to UBI to inform UBI’s response to its customer(s). If a customer complaint is related to the Stride Strip Product, UBI is responsible for evaluating the complaint. 

 

	16.3	 SHDI Representations and Warranties 

 

	(a)	 [***]. The provisions of the warranty provided by SHDI and attached hereto (“SHDI Warranty”) are
UBI’s sole and exclusive remedy in respect of any claim for Stride Products, but excluding the Stride Strip Products, defect or breach of warranty. 

  

	(b)	 To the extent any nonperformance of the Stride Product is caused by the nonperformance of the Stride Strip
Product, SHDI representations and warranties shall not apply. 

  

	(c)	 SHDI represents and warrants that: (i) it has the full right, power, and corporate authority to enter into
this Agreement and to make the promises set forth in this Agreement and there are no outstanding agreements, assignments or encumbrances in existence inconsistent with the provisions of this Agreement; (ii) no actions are threatened or pending
before any court or governmental authority or other tribunal relating to the Stride Product that would affect SHDI’s ability to perform its obligations hereunder; (iii) the Stride Product will not contain

	 	
any material other than those specifically listed in the Product specification; (iv) the Stride Product and SHDI’s manufacturing processes and methods do not infringe on the
intellectual rights of any third party, and; (v) its employees, agents or representatives performing services or supplying products, parts, or raw materials in connection with the Stride Product and/or this Agreement, are not now nor have ever
been: (a) convicted of a criminal offense related to health care; or (b) excluded, debarred, or otherwise ineligible for participation in a U.S. “Federal health care program” as defined in 42 U.S.C.
‘1320a-7b(f) (or any applicable successor statutory section) or in any other government payment program. SHDI hereby further certifies that it will immediately notify UBI upon its receipt of any
indication, whether or not official, that SHDI, its employees, agents or representatives performing services or supplying products, parts, or raw materials in connection with the Stride Product and/or this Agreement, shall be excluded from any U.S.
Federal health care program, as defined above, for any reason during the Term. 

  

	(d)	 OTHER THAN AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE SUPPLY AGREEMENT, THE PARTIES EACH HEREBY DISCLAIM
ALL WARRANTIES, EXPRESS AND IMPLIED, IN CONNECTION WITH THIS AGREEMENT AND THE PRODUCTS, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, CLEAR TITLE, OR
NON-INFRINGEMENT. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE ENTIRE LIABILITY OF EITHER PARTY IN RELATION TO ANY PRODUCTS AND / OR ANY ASSOCIATED ADVICE OR SERVICES, WHETHER BY REASON OF ANY
REPRESENTATION (UNLESS FRAUDULENT) OR ANY IMPLIED WARRANTY, CONDITION OR OTHER TERM OR ANY DUTY AT COMMON LAW (INCLUDING TORT AND NEGLIGENCE) OR UNDER THE AGREEMENT SHALL NOT EXCEED THE PRICE OF THE RELEVANT PRODUCTS. 

 

	(e)	 SHDI specifically warrants to UBI that the Stride Product as of the date of shipment to UBI or its designee and
until expiration of the Product’s label expiration date: (a) conform to the applicable Specifications and claims made by SHDI for the Stride Products; (b) comply with all legal standards; and (c) are free from defects in design,
workmanship and materials. 

 ARTICLE 17    TERMINATION 

Section 17.1    Right to Terminate 
  

	(a)	 Either party may terminate this Agreement in writing with immediate effect if the other party neglects or fails
to perform, observe, or correct a material breach of its obligations under this Agreement to the non-breaching party within thirty (30) calendar days of written notice indicating the nature of the breach.
The non-breaching party may terminate this Agreement immediately upon notice to the breaching party if the material breach triggering such termination is not curable. 

 

	(b)	 This Agreement may be terminated by either party with immediate effect if a regulatory authority of competent
jurisdiction has determined the other Party shall be subject to insolvency or bankruptcy proceedings or the other Party has initiated insolvency and/or bankruptcy proceedings. In the event that UBI becomes insolvent during [***] and has not
fulfilled its [***] obligations equal to [***], then SHDI may seek from UBI reimbursement of the outstanding monetary amount equal to the volume [***] that have not been supplied, whether or not this Distribution Agreement has already terminated.

	(c)	 This Agreement may be terminated by either Party with immediate effect if the other party consolidates, merges
or sells all or substantially all of its assets to a direct competitor of the other Party without the other Party’s prior written consent, or assigns or attempts to assign this Agreement without the other Party’s prior written consent.

  

	(d)	 Any post-termination rights of a Party as contained in the Parties’ Supply Agreement are incorporated
herein. 

  

	(e)	 [***]. [***]. 

  

	17.2	 Applicability of Terms After Termination 

 

	(a)	 In the event of a breach of this Agreement by UBI where UBI does not dispute such breach, UBI shall, at
SHDI’s request: 

  

	 	(i)	 [***] 

  

	 	(ii)	 [***] 

  

	 	(iii)	 [***]. 

  

	(b)	 Applicability of Terms after Termination: 

 

	 	(i)	 In the event of termination or expiration, this Agreement shall, remain applicable to any orders for Products
which UBI has previously placed with SHDI. In the event that termination occurs due to UBI’s breach, SHDI shall fill UBI’s previously orders solely at SHDI’s discretion. 

Article 18    Limitation on Liability/Indemnification 
  

	18.1	 Limitation on Liability 

Except as provided in the Bank Guarantee, in no event shall either Party’s liability hereunder exceed the actual loss or damage sustained by the other
party, up to the purchase price of the Products giving rise to such loss or damage during the year in which the loss or damage occurred. NEITHER PARTY SHALL BE LIABLE FOR ANY LOSS OF USE, REVENUE OR ANTICIPATED PROFITS, COST OF SUBSTITUTE
PRODUCTS OR SERVICES, LOSS OF STORED, TRANSMITTED OR RECORDED DATA, OR FOR ANY INDIRECT, INCIDENTAL, UNFORESEEN, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE SALE OR USE OF THE PRODUCTS.
This provision does not affect third party claims for personal injury arising as a result of a Party’s negligence or, or a Party’s indemnification obligations for third-party claims to the extent set out in this Agreement. THE FOREGOING
IS A SEPARATE, ESSENTIAL TERM OF THIS AGREEMENT AND SHALL BE EFFECTIVE UPON THE FAILURE OF ANY REMEDY, EXCLUSIVE OR NOT. 
  

	18.2	 UBI Indemnification 

UBI’s indemnification obligations under the Collaboration Agreement Section 17.2 are incorporated herein. UBI will also defend and otherwise hold
harmless SHDI from any third-party claim, loss, damage, or liability (“Third-Party Claim”) that is due to: (i) UBI’s misrepresentations or omissions 

 
with respect to the Products; (ii) UBI’s failure to perform any covenants of UBI in this Agreement; and (iii) UBI’s violation of law. Notwithstanding the foregoing, in no
event will UBI’s indemnification obligations apply to any Third-Party Claim caused by SHDI’s acts or omissions. 
  

	18.3	 SHDI Indemnification 

SDHI’s indemnification obligations under the Collaboration Agreement Section 17.1 are incorporated herein. SHDI will also defend and otherwise hold
harmless UBI from any Third-Party Claim that is due to: (i) SHDI’s misrepresentations or omissions with respect to [***]; (ii) SHDI’s failure to perform any covenants of SHDI in this Agreement; and (iii) SHDI’s violation of
law. Notwithstanding the foregoing, in no event will SHDI’s indemnification obligations apply to any Third-Party Claim caused by UBI’s acts or omissions. 
  

	18.4	 Indemnification Procedures 

If either Party believes that it may be entitled to indemnification under this Agreement (an “Indemnified Party”), it shall give written notice to
the Party obligated to indemnify it (an “Indemnifying Party”) with reasonable promptness upon becoming aware of any Third-Party Claim or other facts upon which a claim for indemnification will be based. Such notice shall set forth such
information with respect thereto as is then reasonably available to the Indemnified Party. The Indemnifying Party shall have the right to control the defense of any such Third-Party Claim, including the selection and management of counsel reasonably
satisfactory to the Indemnified Party. The Indemnified Party shall cooperate in such defense and make available all records, materials and witnesses reasonably requested by the Indemnifying Party in connection therewith at the Indemnifying
Party’s expense. If the Indemnifying Party shall have assumed the defense of the Third-Party Claim with counsel reasonably satisfactory to the Indemnified Party, the Indemnifying Party shall not be liable to the Indemnified Party for any legal
or other expenses (other than for reasonable costs of investigation) subsequently incurred by the Indemnified Party in connection with the defense thereof. The Indemnifying Party shall not be liable for any Third-Party Claim settled without its
consent, which consent shall not be unreasonably withheld or delayed. The Indemnifying Party shall obtain the written consent of the Indemnified Party prior to ceasing to defend, settling or otherwise disposing of any Third-Party Claim if as a
result thereof the Indemnified Party would become subject to injunctive or other equitable relief or if the Indemnified Party may reasonably object to such disposition of such Third-Party Claim based on an adverse effect on the Indemnified Party.

  

	18.5	 Indemnification of Infringement Claims 

[***]. [***]. [***]. [***]. [***]. [***]. [***]. 

Section 18.6    Dispute Resolution 

The Parties agree that any dispute arising under or relating to the Parties’ rights and obligations under this Distribution Agreement shall be resolved in
accordance with Article 14 of the Parties’ Supply Agreement and are hereby incorporated by reference in this Supply Agreement. 

 The provisions set forth in this Article 18 shall survive the termination or expiration of this Distribution
Agreement. 
 ARTICLE 19    INTERPRETATION AND ENFORCEMENT 

Section 19.1    Notices 
 All
notices required under this Agreement shall be sent by registered or recorded delivery air mail letter, postage pre-paid and return receipt requested, or by a reputable international courier providing proof of
delivery, and shall be deemed duly given on the day on which the notice is received, unless otherwise expressly specified herein. 
 Notices shall be
addressed: 
 In the case of SHDI, to: 

Siemens Healthcare Diagnostics Inc. 

Attn.: Head of Point of Care, Laboratory Diagnostics    ] 

Address: 2 Edgewater Drive, Norwood, MA 02062 

or to such other person or address as SHDI may from time to time furnish to UBI. 

With a copy to: 
 Siemens
Healthcare Diagnostics Inc. 
 Legal Department 

Attn.: General Counsel 
 511
Benedict Avenue 
 Tarrytown, NY 10591 

In the case of UBI, to: 
 UBI
Name: Universal Biosensors Pty, Ltd. 
 Attn.: Chief Financial Officer 

Address: 1 Corporate Avenue Rowville VIC 3178 

or to such other person or address as UBI may from time to time furnish to SHDI. 

 

	19.2	 UBI Not Agent or Legal Representative 

In fulfilling its obligations under this Agreement, each party will be acting as an independent contractor. Nothing contained in this Agreement will be
construed to place the Parties in a relationship of employee and employer, joint venturers, or principal and agent. Neither Party is authorized to assume or undertake any obligation of any kind, express or implied, on behalf of the other Party. Each
Party will control and be responsible for its own business operations, insurance, and the compensation, wages, taxes, withholding, benefits, and conditions of employment of its personnel. Without limiting the generality of the foregoing, the Parties
specifically acknowledge that each Party is acting as an independent entity hereunder and not as a sales agent or other representative of the other Party. This Agreement does not authorize or appoint either Party as the agent or legal representative
of the other Party for any purpose whatsoever. Neither Party is granted any right or authority, and the Parties hereby expressly disclaim any right or authority and agrees not to represent to any Party a right or authority, to create or assume any
obligation or responsibility, express or implied, on behalf of or in the name of the other Party or to bind the other Party in any manner. 

	19.3	 Entire Agreement 

This Distribution Agreement, including the Supply Agreement, including the Exhibits hereto which are incorporated as an integral part of this Distribution
Agreement, constitutes the entire agreement and understanding of the Parties relating to the subject matter hereof, and supersedes all prior agreements, oral or written, and all negotiations, conversations or discussions heretofore had between SHDI
and UBI related to this Distribution Agreement. No modification of or amendment to this Distribution Agreement, nor any waiver of any rights under this Distribution Agreement, will be effective unless set forth in writing signed by authorized
representatives of both Parties. 
  

	19.4	 Assignment 

  

	(a)	 UBI shall not, either in whole or in part, assign any rights, duties or obligations under this Agreement or
subcontract any part or all of UBI’s obligations hereunder to any third party without the express prior written approval of SHDI, which shall not be unreasonably withheld or delayed. Irrespective of SHDI’s approval, UBI remains solely
responsible for the proper selection and supervision of its assignees and subcontractors. 

  

	(b)	 Without prejudice to SHDI’s discretion to grant such approval or not, SHDI will in no case grant such
approval unless the third party enters into an agreement with UBI whereby such third party agrees to be bound by compliance provisions at least equivalent to those required by this Agreement. 

 

	(c)	 SHDI may assign this Agreement at its discretion provided it gives UBI at least thirty (30) days prior
written notice. 

  

	19.5	 No Implied Waiver 

The failure of either Party at any time to require performance by the other Party of any provision hereof shall not affect in any way the full right to require
such performance at any time thereafter. Furthermore, the waiver by either Party of a breach of any provision hereof shall not be taken or held to be a waiver of the provision itself. 

 

	19.6	 Controlling Law 

The validity, interpretation and performance of this Agreement shall be controlled, governed, enforced and construed in accordance with the substantive laws of
New York without regard to its provisions on conflicts of law. The United Nations Convention on Contracts for the International Sale of Goods (CISG) shall not apply. 
  

	19.7	 Dispute Resolution 

The Parties agree that any dispute arising under or relating to the Parties’ rights and obligations under this Distribution Agreement shall be resolved in
accordance with Article 14 of the Parties’ Supply Agreement. 
  

	19.8	 Severability 

In the event that any provision of this Distribution Agreement is adjudicated invalid, illegal or unenforceable, such adjudication will not affect the
validity, legality or enforceability of any other provision of this Distribution Agreement. The Parties shall replace the invalid, illegal or unenforceable provision by a valid, legal and enforceable provision which economically best meets the
intention of the Parties. 

	19.9	 Force Majeure 

The obligations of either Party to perform under this Distribution Agreement shall be excused during each period of delay caused by matters such as strikes,
shortages of power or raw material, government orders or acts of God, which are reasonably beyond the control of the Party obligated to perform. 
  

	19.10	 Counterparts 

This Distribution Agreement shall be executed in two (2) or more counterparts in the English language, and each such counterpart shall be deemed an
original hereof. In case of any conflict between the English version and any translated version of this Agreement, the English version shall govern. 

Dated: September 18, 2019 
  

											
	Siemens Healthcare Diagnostics Inc.	 		 		 	UBI:
						
	By:	 	 /s/ Vivek
Mehrotra                                        

	 		 		 	By:	 	 /s/ Craig
Coleman                                        

	Name:	 	Vivek Mehrotra	 		 		 	Name:	 	Craig Coleman
	Title:	 	Head Finance POC	 		 		 	Title:	 	Director
						
	By:	 	 /s/ Christoph Pedain
	 		 		 	By:	 	 /s/ Salesh Balak

	Name:	 	Christoph Pedain	 		 		 	Name:	 	Salesh Balak
	Title:	 	Head POC	 		 		 	Title:	 	CFO

 List of Exhibits: 

			
		
	Exhibit 1:	  	Definition of Field for Distribution License
		
	Exhibit 2:	  	SHDI Information, including Pricing Information
		
	Exhibit 3:	  	Bank Guarantee
		
	Exhibit 4:	  	Supplier/Distributor Code of Conduct
		
	Exhibit 5:	  	[***]

 EXHIBIT 1 

Definition of Field for Distribution License 

“Field” shall mean [***]. [***]. [***]. 

[***]. 

 EXHIBIT 5 

[***] 
 [***]. [***]. [***]. [***]. 

[***]. [***]. [***]. [***]. [***]. 
 [***]. 

[***]. [***]. [***]. 
 [***]. 

[***]. 
 [***]. 

[***]. 
 [***]. [***]. [***]. 

[***]. [***]. 

 *Certain identified information has been excluded from this exhibit because it is 

both (i) not material and (ii) would be competitively harmful if publicly disclosed. 

The redacted confidential portions of the exhibit are marked by [***]. 

CONFIDENTIAL SETTLEMENT AND TERMINATION AGREEMENT 

This Confidential Settlement and Termination Agreement, dated as of September 18, 2019, consistent with and as structured on the agreed
upon Settlement Term Sheet, executed on September 8, 2019 (the “Settlement Term Sheet”), attached hereto (the “Settlement Agreement”) is entered into by and between Universal Biosensors, Inc. and Universal Biosensors Pty Ltd
(collectively, “UBI”), on the one hand, and Siemens Healthcare Diagnostics Inc. (“SHDI”), on the other hand (each a “Party” and together the “Parties”). 

WHEREAS, on September 9, 2011, UBI and SHDI entered into a Collaboration Agreement and a Letter Agreement, on September 20,
2012 a Supplemental Agreement, on December 12, 2014 a Xprecia Stride Letter Agreement, and subsequent various amendments to the Collaboration Agreement (collectively, the “Collaboration Agreement”) under which UBI and SHDI agreed to,
among other things, collaborate together on UBI’s development of a PT/INR test strip and associated reader (the PT/INR test strip and the associated reader shall hereinafter be collectively referred to as the “Stride Product”), for
UBI to modify the test strip and develop certain additional coagulation-related test strips and a second reader (collectively, the “Prime Product”), and for SHDI to obtain regulatory approval, commercialize, market, and sell in the
hospital point-of-care coagulation market the Stride Product and the Prime Product, subject to the terms and conditions set forth in the Collaboration Agreement; and

 WHEREAS, on September 20, 2012, SHDI and UBI entered into a Supply Agreement addressing, among other things, UBI’s sale
and SHDI’s purchase of certain products from UBI pursuant to the Collaboration Agreement (the “Supply Agreement,” and collectively with the Collaboration Agreement, the “Agreements”); and 

 WHEREAS, since 2018, SHDI and UBI have been engaged in a dispute regarding their
respective obligations under the Collaboration Agreement and Supply Agreement; and 
 WHEREAS, on November 12, 2018, pursuant to
section 14.1 of the Collaboration Agreement, UBI filed a request for non-binding mediation under the International Institute for Conflict Prevention & Resolution Mediation Procedure (the
“Mediation”); and 
 WHEREAS, during the course of the Mediation, each Party alleged certain respective claims and defenses
against the other Party; and each Party denies the allegations/claims asserted by the other Party; and 
 WHEREAS, as set forth
herein, the Parties now desire to amicably resolve the disputes encompassed in the Mediation without resort to arbitration on those disputes, as well as any and all other disputes between the Parties that could potentially arise out of,
concern, or relate in any way to the Agreements and/or the parties’ relationship created by the Agreements (the “Disputes”); 

NOW THEREFORE, in consideration of the recitals set forth above and the promises made in this Settlement Agreement, and for other good
and valuable consideration, the receipt and the legal sufficiency of which is hereby acknowledged, and intending to be legally bound, the Parties agree as follows: 

1.    Payment. UBI shall pay to SHDI Eleven Million United States Dollars ($11,000,000.00 USD) [***], mutual
termination of the Collaboration Agreement, and for other just and adequate consideration as set forth in this Settlement Agreement, as follows: 

a)    Eleven Million Dollars ($11,000,000.00 USD) shall be paid by UBI to SHDI, Point of Care Business (the
“Settlement Payment”) not later than five (5) days after the execution of this Settlement Agreement (the date of execution of this Settlement Agreement shall be referred to as the “Execution Date”) by wire transfer to the
following bank account: 
 [***] 

 2.    Market Rights. In consideration of the terms contained in
this Settlement Agreement, and upon SHDI’s receipt of the Settlement Payment, SHDI relinquishes its exclusive right to commercialize and distribute UBI’s Stride and Prime Products to the professional Point of Care market segment, except
SHDI retains certain non-exclusive distribution and other rights as agreed to by the Parties [***], and except as otherwise may be agreed to by the Parties in any subsequent distribution arrangement. For the
avoidance of doubt, the rights transferred to UBI pursuant to this Settlement Agreement include, among other things, any rights and/or obligations necessary to seek regulatory registration and approval in jurisdictions whether or not the Stride or
Prime Product is currently sold there, or where additional or further regulatory registrations and/or approvals are or become necessary. [***]. 

3.    UBI’s Release. In consideration of the terms contained in this Settlement Agreement, and
upon SHDI’s receipt of the Settlement Payment, with respect to events from the beginning of time to the date of this Settlement Agreement, UBI, on behalf of itself, its predecessors, parents, successors, affiliates, subsidiaries, assigns,
beneficiaries, heirs, agents, officers, directors, shareholders, employees, attorneys, and representatives, and all persons acting by, through, under, or in concert with them, and each of them (the “UBI Releasors”), fully release and
forever discharge SHDI, together with its respective predecessors, parents, successors, affiliates, subsidiaries, assigns, beneficiaries and heirs, and all of its respective current and former directors, officers, employees, insurers, agents,
attorneys, and representatives (the “SDHI Releasees”), from all known and unknown claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, debts, judgments, suits, rights, demands, fees,
and expenses 

 
(including attorney’s fees and costs actually incurred), of any nature whatsoever, whether in law or in equity, whether based on contract, statute, regulation, tort or otherwise, whether or
not apparent or yet to be discovered, under or related to the Agreements or any transactions thereunder, their negotiation, execution, performance, any breaches thereof, or their termination, or the relationship between the Parties created by the
Agreements, but excluding any claims relating to the enforcement of this Settlement Agreement, which are expressly reserved. To the extent that California or other law may be applicable, the UBI Releasors hereby agree that the provisions of
Section 1542 of the Civil Code of the State of California and all similar federal or state laws, rights, rules or legal principles of any other jurisdiction which may be applicable hereto, to the extent they apply to any of the matters released
herein, are hereby knowingly and voluntarily waived and relinquished by the UBI Releasors, to the fullest extent that such rights and benefits pertaining to the matters released herein may be waived, and the UBI Releasors hereby agree and
acknowledge that this waiver is an essential term of this release, without which the release provided to the UBI Releasees by SHDI Releasors (each defined below) would not have been given. This release shall not affect UBI’s indemnification
obligations under Section 17.2 of the Collaboration Agreement with respect to third party claims which may be raised against SHDI by third parties after the Execution Date and during [***], and further, does not affect any of UBI’s ongoing
obligations under the Parties’ Supply Agreement, which remains in effect except as otherwise modified. 

4.    SHDI’s Release. In consideration of the terms contained in this Settlement Agreement, and
upon SHDI’s receipt of the Settlement Payment, with respect to events from the beginning of time to the date of this Settlement Agreement, SHDI, on behalf of itself, its predecessors, parents, 

 
successors, affiliates, subsidiaries, assigns, beneficiaries, heirs, agents, officers, directors, shareholders, employees, attorneys, and representatives, and all persons acting by, through,
under, or in concert with them, and each of them (the “SDHI Releasors”), fully release and forever discharge UBI, together with its respective predecessors, parents, successors, affiliates, subsidiaries, assigns, beneficiaries and heirs,
and all of its respective current and former directors, officers, employees, insurers, agents, attorneys, and representatives (the “UBI Releasees”), from all known and unknown claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, debts, judgments, suits, rights, demands, fees, and expenses (including attorney’s fees and costs actually incurred), of any nature whatsoever, whether in law or in equity, whether based on
contract, statute, regulation, tort or otherwise, whether or not apparent or yet to be discovered, under or related to the Agreements or any transactions thereunder, their negotiation, execution, performance, any breaches thereof, or their
termination, or the relationship between the Parties created by the Agreements, but excluding any claims relating to the enforcement of this Settlement Agreement, which are expressly reserved. To the extent that California or other law may be
applicable, the SDHI Releasors hereby agree that the provisions of Section 1542 of the Civil Code of the State of California and all similar federal or state laws, rights, rules or legal principles of any other jurisdiction which may be
applicable hereto, to the extent they apply to any of the matters released herein, are hereby knowingly and voluntarily waived and relinquished by the SDHI Releasors, to the fullest extent that such rights and benefits pertaining to the matters
released herein may be waived, and the SDHI Releasors hereby agree and acknowledge that this waiver is an essential term of this release, without which the release provided to the SDHI Releasees by the UBI Releasors would not have been given. This
release shall not affect SHDI’s indemnification obligations under Section 17.1 of the Collaboration Agreement with respect to third party claims which may be raised 

 
against UBI by third parties after the Execution Date and during [***], and further, does not affect any of SHDI’s ongoing obligations under the Parties’ Supply Agreement, which remains
in effect except as otherwise modified. 
 5.    Supply Agreement. The Parties agree that the Supply Agreement
shall remain in effect except as otherwise modified herein or in a separate writing signed by the Parties subsequent to or contemporaneous with the Execution Date. 

6.    Collaboration Agreement. The Parties agree that the Collaboration Agreement shall be terminated upon the
Execution Date, with no further obligations owing by either Party under it, except that, as set forth herein, each Party’s indemnification obligations in Sections 17.1 and 17.2 of the Collaboration Agreement shall survive. 

7.    Confidentiality. This Settlement Agreement, its terms, and the negotiations leading to this Settlement
Agreement are confidential. No Party shall disclose or cause to be disclosed the Settlement Term Sheet or this Settlement Agreement, the terms of those agreements, or any communications relating to the negotiation of those agreements to any person
not a Party to those agreements without the written consent of all Parties. Notwithstanding anything contained within this Section 7, each Party may share the Settlement Term Sheet and this Settlement Agreement, their terms, and the
negotiations leading to those agreements, with its respective lawyers, advisors, consultants, accountants and auditors on a need to know basis provided these individuals agree to use and maintain the information in a confidential manner consistent
with the provisions contained in this Settlement Agreement. 
 8.    Public Announcements. The Parties agree to
consult with each other reasonably and in good faith with respect to the text and timing of press releases related to this Settlement Agreement and any other subject matter related to this Settlement Agreement, prior to the issuance thereof, except
that 

 
a Party may issue such press releases and/or disclosures as it determines are reasonably necessary to comply with applicable law (including disclosure requirements of the U.S. Securities and
Exchange Commission or with the requirements of any stock exchange on which securities issued by a Party or its Affiliates are traded). In the event of a public announcement that a Party determines is necessary or prudent to comply with applicable
law, to the extent practicable under the circumstances, the Party making such announcement shall use commercially reasonable efforts to provide the other Party with a copy of the proposed text of such announcement sufficiently in advance of the
scheduled release to afford such other Party a reasonable opportunity to review and comment upon the proposed text. 

9.    Representations. The Parties hereto each represent and warrant that: 

a)    it is legally entitled and authorized to settle the claims being released herein; 

b)    it is authorized to bind the persons and entities on whose behalf it is releasing the claims described herein; 

c)    it has made no assignment or other transfer of any interest that it has in the claims being released pursuant to
this Settlement Agreement; and 
 d)    it has read and fully understands the provisions of this Settlement Agreement
to such Party’s satisfaction; and 
 e)    it is represented by counsel, or alternatively, had an opportunity to
consult with legal counsel of its choosing before executing this Settlement Agreement. 

10.    Attorneys’ Fees. Each Party is responsible for its own legal fees and costs incurred
through the Execution Date.  

 11.    Entire Agreement. This Settlement Agreement is the
complete agreement between the Parties regarding the matters described herein, there being no prior or other contemporaneous agreement or promise of any kind that modifies, supplements or alters it, except as may be otherwise set forth herein. This
Settlement Agreement supersedes all previous communications, negotiations, representations or agreements (whether oral or written) that may have been made between the Parties, including but not limited to the Settlement Term Sheet and all prior
settlement term sheets with the exception of the Standstill Agreement Extension dated as of August 15, 2019, but only until [***] is received by SHDI, at which time the Standstill Agreement Extension shall be replaced as well. This Settlement
Agreement shall be binding upon and shall inure to the benefit of the Parties and each of their respective successors and assigns. 

12.    Governing Law. This Settlement Agreement shall be governed by, interpreted under, and enforced in accordance
with the laws of the State of New York, without regard to the principles of conflicts of laws. 

13.    Counterparts. This Settlement Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument. 
 14.    Execution.
A photocopy of the fully executed original of this Settlement Agreement shall be deemed to be an original for any and all purposes. 
 IN
WITNESS WHEREOF, the Parties, each intending to be legally bound hereby, have caused this Settlement Agreement to be executed, on their own or through their respective duly authorized officers. 

Dated: September 18, 2019 

									
	UNIVERSAL BIOSENSORS PTY LTD	 		 	UNIVERSAL BIOSENSORS, INC.
					
	Print Name:	 	Salesh Balak	 		 	Print Name:	 	Craig Coleman
	Print Title:	 	CFO	 		 	Print Title:	 	Director
	Signature:	 	 /s/ Salesh
Balak                                        

	 		 	Signature:	 	 /s/ Craig
Coleman                                    

			
	SIEMENS HEALTHCARE DIAGNOSTICS INC.	 		 	SIEMENS HEALTHCARE DIAGNOSTICS INC.
					
	Print Name:	 	Vivek Mehrotra	 		 	Print Name:	 	Christoph Pedain
	Print Title:	 	Head Finance POC	 		 	Print Title:	 	Head POC
	Signature:	 	 /s/ Vivek Mehrotra
	 		 	Signature:	 	 /s/ Christoph Pedain

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00301-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00301-of-00352.parquet"}]]