Document:

kos_Ex10-31

		
			Exhibit 10.31
		

		
			Dated 15  December 2016
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			KOSMOS ENERGY SENEGAL
		

		
			and
		

		
			BP INDONESIA OIL TERMINAL INVESTMENT LIMITED
		

		
			and
		

		
			NORMANDY VENTURES LIMITED
		

		
			 
		

		

		
			SALE AND PURCHASE AGREEMENT
relating to the sale and purchase of shares in
Normandy Ventures Limited
		

		

		
			 
		

		
			 
		

		
			

		 

 

		

		
			CONTENTS
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Page No

				
	
					
						1

					
					
						Interpretation

					
1 
				
	
					
						2

					
					
						Sale and purchase

					
12 
				
	
					
						3

					
					
						Consideration

					
12 
				
	
					
						4

					
					
						First Completion

					
13 
				
	
					
						5

					
					
						Parties’ undertakings prior to Second Completion

					
13 
				
	
					
						6

					
					
						Conditions

					
15 
				
	
					
						7

					
					
						Second Completion

					
18 
				
	
					
						8

					
					
						Deferred Consideration Amounts

					
18 
				
	
					
						9

					
					
						Payment

					
25 
				
	
					
						10

					
					
						Parties’ warranties

					
25 
				
	
					
						11

					
					
						Further assurance

					
28 
				
	
					
						12

					
					
						Variation

					
29 
				
	
					
						13

					
					
						Confidentiality and Announcements

					
29 
				
	
					
						14

					
					
						Notices

					
30 
				
	
					
						15

					
					
						Tax; Costs

					
31 
				
	
					
						16

					
					
						Contracts (Rights of Third Parties) Act 1999

					
33 
				
	
					
						17

					
					
						Counterparts

					
33 
				
	
					
						18

					
					
						Miscellaneous

					
33 
				
	
					
						19

					
					
						Governing law and Dispute Resolution

					
35 
				

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

		
			THIS AGREEMENT is made on 15th December 2016
		

		
			BETWEEN
		

		
			1          Kosmos Energy Senegal, a company existing under the laws of the Cayman Islands (“Kosmos”); and
		

		
			2          BP Indonesia Oil Terminal Investment Limited, a company incorporated in England and Wales  under registered number 09978028 whose registered office is at Chertsey Rd, Sunbury on Thames, Middlesex TW16 7BP UK (the “BP”); and
		

		
			3          Normandy Ventures Limited, a company incorporated in England and Wales under registered number 10520822 whose registered office is at C/o Wilmington Trust SP Services (London) Limited, King’s Arms Yard, London, EC2R 7AF (“JVCo”);
		

		
			each a “Party” and together the “Parties”.
		

		
			WHEREAS:
		

		
			(A)      At the date of this Agreement, JVCo is wholly-owned by Kosmos and Kosmos has subscribed for, and is the legal and beneficial owner of, 10,000 Ordinary Shares which have been issued and allotted by JVCo to Kosmos fully paid.
		

		
			(B)      In order to facilitate the JV Partners’ investments in JVCo, the Seller has agreed to sell, and the Purchaser has agreed to purchase, the Sale Shares on the terms and subject to the conditions of this Agreement.
		

		
			WHEREBY IT IS AGREED as follows:
		

		
			1          Interpretation
		

		
			1.1       In this Agreement:
		

			
					
						 

					
					
						 

				
	
					
						“Affiliate”

					
					
						means a legal entity which Controls, or is Controlled by, or which is Controlled by an entity which Controls, a Party, and “Affiliates” shall be construed accordingly;

				
	
					
						“Answer”

					
					
						Means a written response made by Kosmos to BP in respect of any question or clarification sought by BP in respect of or in relation to the Interests, the Interest Documents or the Senegal Area, as set out in Exhibit G.

				
	
					
						“Anti-Corruption Laws and Obligations”

					
					
						means:

					
						(a)       the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, 1997;

				

		
			 
		

		
			
		

		

		 

		

			3

		

		

			 

		

 

	
					
						

					
						 

					
					
						 

					
						 

					
						 

					
						 

				
	
					
						 

					
					
						 (b)       the Foreign Corrupt Practices Act of 1977 of the United States of America, as amended by the Foreign Corrupt Practices Act Amendments of 1988 and 1998, and as may be further amended and supplemented from time to time;

					
						(c)       the Bribery Act 2010 of the United Kingdom and any regulations or guidance issued pursuant to such legislation, as may be amended and supplemented from time to time; and

					
						(d)       any act, rule or regulation of the United States of America, the United Kingdom, the Republic of Senegal or any other relevant jurisdiction related to prevention of bribery, corruption, or money laundering,

					
						provided that, in the event that a Party acting with respect to this Agreement is outside the jurisdiction or scope of any of the aforementioned laws, such laws shall be interpreted as though such Party were within the jurisdiction and scope of such law;

				
	
					
						“Approval”

					
					
						means the issuance of the approval of the Government required in order to effect the legal assignment and transfer of the Interests from Kosmos to JVCo;

				
	
					
						“Associated Person”

					
					
						means a person acting on behalf of the first Person or the first Person’s Affiliates, whether as personnel of any tier, as an officer, director or under a power of attorney or other similar authorization and specifically including consultants, representatives, agents, employees or other similar persons who have the right or power to act on behalf of the first Person or its Affiliate;

				
	
					
						“BP Warranties”

					
					
						means the warranties set out in Schedule 4;

				
	
					
						“Brent”

					
					
						means the arithmetic average of the high and low spot daily assessments of Brent (Dated) quotations as published in Platt’s Crude Oil Marketwire for the relevant period of time;

				
	
					
						“Business Day”

					
					
						means each calendar day except Saturdays, Sundays, and any other day on which banks are generally closed for business in London, the United Kingdom, and New York City, USA;

				
	
					
						“Commercial Production”

					
					
						means any production from the Senegal Area pursuant to a development and exploitation plan contemplated under and approved in accordance with the Senegal Area JOAs.

				

		
			 
		

		
			
		

		

		 

		

			4

		

		

			 

		

 

	
					
						

					
						 

					
					
						 

				
	
					
						“Completion” 

					
					
						means First Completion or Second Completion, as the context requires; 

				
	
					
						“Completion Date”

					
					
						means the First Completion Date or the Second Completion Date, as the context requires;

				
	
					
						“Conditions”

					
					
						has the meaning given in Clause 6.1;

				
	
					
						“Consideration Amount”

					
					
						means the First Completion Consideration Amount, the Second Completion Consideration Amount or a Deferred Consideration Amount, as the context requires;

				
	
					
						“Contracts”

					
					
						means together the Petroleum Agreements and any extension, renewal or amendment thereto, and all exploration authorizations granted pursuant to the Petroleum Agreements or any successor title that governs all or part of the Senegal Area, as all such instruments and titles are governed by the Hydrocarbon Code;

				
	
					
						“Control”

					
					
						means the ownership directly or indirectly of more than fifty percent (50%) of the voting rights in a legal entity. “Controls”, “Controlled by” and other derivatives shall be construed accordingly;

				
	
					
						“Data”

					
					
						means all accounts, books, data and reports in the possession, custody or control of Kosmos and its Affiliates relating to the Interests including correspondence, petroleum engineering, reservoir engineering, drilling, geoscientific, seismic and all other kinds of technical data and reports, samples, well logs and analyses in whatever form the same are maintained, including third party information, including seismic, which Kosmos or its Affiliates has the right to disclose, acquired pursuant to the Interest Documents, subject to the exclusion of work product of, or attorney-client communications with, legal counsel for Kosmos or any Affiliate of Kosmos;

				
	
					
						“Deferred Consideration Amounts”

					
					
						(a)      the Interim Period Costs Consideration;

					
						(b)      the Exploration & Appraisal Carry Consideration;

					
						(c)      the Development Carry Consideration; and

					
						(d)      the Success Fee Consideration,

				

		
			 
		

		
			
		

		

		 

		

			5

		

		

			 

		

 

	
					
						

					
						 

					
					
						 

				
	
					
						 

					
					
						and each a “Deferred Consideration Amount”;

				
	
					
						“Development Carry Consideration”

					
					
						has the meaning given in Clause 8.4;

				
	
					
						“Disclosure Documents”

					
					
						means the Disclosure Letter and the documents stored in electronic form on a hard drive provided to each Party by Intralinks Inc., that represent the entire contents of Kosmos’s data room at 16.55 (GMT) m. (London time)/ 10.55 am Dallas time (CST) on 12th December 2016;

				
	
					
						“Disclosure Letter”

					
					
						means the letter described as such, dated as of the date of this Agreement and addressed to BP by Kosmos, which sets out certain disclosures against Kosmos’s Warranties;

				
	
					
						“Effective Date” 

					
					
						means 1 July 2016;

				
	
					
						“Eligible Discovery”

					
					
						means a discovery of Hydrocarbons (as defined under the Contracts) in the Senegal Area, other than the Tortue Discovery Area (from the surface to the equivalent of the oldest stratigraphy currently penetrated in the development area in the Guembeul #1A Well) and the Teranga Discovery Area (from the surface to equivalent of the oldest stratigraphy currently penetrated in the development area in the Teranga #1 Well) as shown and described on Exhibit C, Parts 1 and 2;

				
	
					
						“Encumbrances”

					
					
						means all liens, charges (fixed or floating), mortgages, pledges, encumbrances or security or net profit interests or royalty or overriding interests, carried interests, production payments, claims, options, pre-emption rights or equities or any agreement to create any of the foregoing other than (in each case) those arising under the provisions of the Interest Documents and the farm out agreement dated 19 August 2014 and other arrangements between Kosmos and Timis Corporation entered into at the same time as the farm out agreement and as notified in writing on 13th December 2016 on behalf of Kosmos to BP “Encumbrance” and “Encumber” shall be construed accordingly;

				
	
					
						“Exploitation Perimeter”

					
					
						shall have the meaning given to the French term “Périmètre d’Exploitation” in the Contracts, which French term was translated as “Operations Perimeter” in the English version of the Contracts provided to BP;

				

		
			 
		

		
			
		

		

		 

		

			6

		

		

			 

		

 

	
					
						

					
						 

					
					
						 

				
	
					
						“Exploration & Appraisal Carry Consideration”

					
					
						has the meaning given in Clause 8.3;

				
	
					
						“Firm Work Programme (Development)”

					
					
						means the Tortue development studies required to support a late 2017 investment decision on the Tortue area as set out in Exhibit A 2;

				
	
					
						“Firm Work Programme (Exploration and Appraisal)”

					
					
						means the work programme as set out in Exhibit A 1;

				
	
					
						“First Completion”

					
					
						means completion of the sale and purchase of the Sale Shares, and the payment of the First Consideration Amount, in each case pursuant to, and in accordance with, the terms of this Agreement;

				
	
					
						“First Consideration Amount”

					
					
						means US$ 49.99, being the aggregate nominal value of the Sale Shares;

				
	
					
						“Good Industry Practice”

					
					
						means the exercise of that degree of skill, diligence, prudence and foresight which would reasonably and ordinarily be expected to be applied by a skilled and experienced person engaged in the same type of undertaking;

				
	
					
						“Government”

					
					
						means the government of the Republic of Senegal and any political subdivision, agency or instrumentality thereof, including PETROSEN;

				
	
					
						“Government Official”

					
					
						means, whether appointed, elected or otherwise, any:

					
						(a)       minister, civil servant, director, officer, principal, agent or employee or other official of: (i) any government (whether central, federal, state, provincial or local) ministry, body, department, agency, instrumentality or part of any of them; (ii) any public international organization; (iii) any department, agency or body of any government-owned or controlled company, agency, enterprise, joint venture, or partnership; and (iv) any company, agency, enterprise, joint venture, or partnership in which a government owns an interest of more than thirty percent, and/or of any public international organization (such as the World Bank or United Nations);

					
						(b)       person acting in any official, legislative,

				

		
			 
		

		
			
		

		

		 

		

			7

		

		

			 

		

 

	
					
						

					
						 

					
					
						 

					
						 

					
						 

				
	
					
						 

					
					
						administrative or judicial capacity for or on behalf of any government department, agency, body, instrumentality or public international organization, including without limitation any judges or other court officials, military personnel and customs, police, national security or other law enforcement personnel;

					
						(c)       officer or employee of a political party or any person acting in an official capacity on behalf of a political party; and/or

					
						(d)       candidate for political office;

				
	
					
						“Hydrocarbon Code”

					
					
						means Petroleum Code (Law No. 98-05 dated 8 January 1998) as modified and completed;

				
	
					
						“Initial Asset Transfer Agreement”

					
					
						means the agreement dated on or around the date of this Agreement pursuant to which Kosmos agrees to transfer the Initial Interests to JVCo, in the form set out in Part 1 of  Exhibit F; 

				
	
					
						“Initial Asset Transfer Completion”

					
					
						means completion of the transfer of the Initial Interests from Kosmos to JVCo pursuant to the terms of the Initial Asset Transfer Agreement;

				
	
					
						“Initial Asset Transfer Completion Date”

					
					
						means the date on which Initial Asset Transfer Completion occurs pursuant to the terms of the Initial Asset Transfer Agreement;

				
	
					
						“Initial Interests”

					
					
						means an undivided legal and beneficial interest of sixty percent (60%) in the rights and obligations under the Contracts and an undivided interest of sixty percent (60%) participating interest and a sixty-six decimal sixty-seven percent (66.67%) Paying Interest in the rights and obligations under the Senegal JOAs;

				
	
					
						“Interests”

					
					
						means the Initial Interests and the TC Interests;

				
	
					
						“Interest Documents”

					
					
						means the Contracts and the Senegal Area JOAs;

				
	
					
						“Interim Period”

					
					
						means the period commencing from 1 July, 2016 until, but not including the Second Completion Date;

				
	
					
						“Interim Period Costs”

					
					
						means all costs properly incurred by Kosmos directly in relation to JVCo’s Paying Interest share under the Senegal Area JOAs for Joint Operations (as defined under the Senegal Area JOAs) undertaken by Kosmos 

				

		
			 
		

		
			
		

		

		 

		

			8

		

		

			 

		

 

	
					
						

					
						 

					
					
						 

				
	
					
						 

					
					
						pursuant to the terms of the Senegal Area JOAs during the Interim Period if applicable, and determined pursuant to Clause 8.2;

				
	
					
						“Interim Period Costs Consideration”

					
					
						means a cash amount in US dollars which is equal to 49.99 per cent. of the Interim Periods Costs;

				
	
					
						“JV Partners”

					
					
						means Kosmos and BP (each a “JV Partner”);

				
	
					
						“JVCo Group”

					
					
						means JVCo and its subsidiaries from time to time;

				
	
					
						“Kosmos’s Account”

					
					
						means the account information notified by Kosmos to BP from time to time with at least five Business Days’ notice;

				
	
					
						“Kosmos Mauritania”

					
					
						means Kosmos Energy Mauritania, a company existing under the laws of the Cayman Islands;

				
	
					
						“Kosmos Payment Failure”

					
					
						means: (i) any failure by Kosmos to pay any amount owed by Kosmos to BP under this Agreement; or (ii) any failure by the Farmor (as defined in the Mauritania Farmout Agreement) to pay any amount owed by the Farmor to the Farmee (as defined in the Mauritania Farmout Agreement) in respect of the Mauritania Farmout Agreement (other than Article 4.7B thereof);

				
	
					
						“Kosmos Asset Warranties”

					
					
						means the warranties set out in Part 1 of Schedule 3;

				
	
					
						“Kosmos Share Warranties”

					
					
						means the warranties set out in Part 2 of Schedule 3;

				
	
					
						“Kosmos Warranties”

					
					
						means the Kosmos Asset Warranties and the Kosmos Share Warranties;

				
	
					
						“LNG”

					
					
						means processed Natural Gas (as defined under the Contracts) consisting primarily of methane (CH4) in a liquid state at or below its boiling point and at a pressure of approximately one (1) atmosphere;

				
	
					
						“Long Stop Date”

					
					
						means 30 September 2017;

				
	
					
						“Mauritania Area”

					
					
						means the area covered by the Mauritania Contracts, copies of which are included in the Disclosure Documents;

				
	
					
						“Mauritania Contracts”

					
					
						means the Exploration and Production Contracts entered into by Kosmos Mauritania, SMHPM and the Islamic 

				

		
			 
		

		
			
		

		

		 

		

			9

		

		

			 

		

 

	
					
						

					
						 

					
					
						 

				
	
					
						 

					
					
						Republic of Mauritania for the exploration and exploitation of hydrocarbons in the Blocks C6, C8, C12 and C13, offshore Mauritania;

				
	
					
						“Mauritania JOAs”

					
					
						means (a) the three (3) Amended and Restated Joint Operating Agreements each dated 1 December 2014 entered into by Kosmos Mauritania and SMHPM for operations in the Blocks C8, C12 and C13 portions of the Mauritania Area; and (b) the Joint Operating Agreement to be entered into on terms substantially similar to the joint operating agreements set out in (a) above, by Kosmos Mauritania, SMHPM and, if such joint operating agreement has yet to be executed prior to completion of the Mauritania Farmout Agreement, by BP Exploration (West Africa) Limited for operations in the Block C6 portion of the Mauritania Area;

				
	
					
						 “Mauritania Operator”

					
					
						means the operator under the Mauritania Contracts and the Mauritania JOAs;

				
	
					
						“Mauritania Farmout Agreement”

					
					
						means the Farmout Agreement concerning Blocks C6, C8, C12 and C13, Offshore Mauritania between Kosmos Mauritania and BP Exploration (West Africa) Limited of even date with this Agreement;

				
	
					
						“Ordinary Shares”

					
					
						means the ordinary shares of US$ 0.01 in the capital of JVCo;

				
	
					
						“Participating Interest”

					
					
						means as to any party to the Contracts or the Senegal Area JOAs, the undivided interest of such party expressed as a percentage of the total interest of all parties in the rights and obligations derived from the Contracts or the Senegal Area JOAs as the context so requires;

				
	
					
						“Paying Interest”

					
					
						means as to any party to the Senegal Area JOAs, other than PETROSEN, the undivided interest of such party in the payment obligations under the Senegal Area JOAs, including in respect of the Participating Interest share of PETROSEN in the Contracts, until PETROSEN elects to participate in an Exploitation Perimeter from which time the Paying Interests will be aligned with such party’s Participating Interests;

				
	
					
						“Person”

					
					
						means an individual, corporation, company, government entity, state enterprise, or any other legal entity;

				

		
			 
		

		
			
		

		

		 

		

			10

		

		

			 

		

 

	
					
						

					
						 

					
					
						 

				
	
					
						“Petroleum Agreements”

					
					
						means the Hydrocarbon Exploration and Production Sharing Contract granted by the Republic of Senegal dated January 17, 2012 covering the Saint Louis Offshore Profond Block and the Hydrocarbon Exploration and Production Sharing Contract granted by the Republic of Senegal dated January 17, 2012 covering the Cayar Offshore Profond Block;

				
	
					
						“PETROSEN”

					
					
						or La Société des Pétroles du Sénégal means, the oil company of the Republic of Senegal, a company governed by the laws of Senegal and having its registered office in Dakar, at Route du Service Géographique, Hann BP 2016, Senegal;

				
	
					
						“Quarter”

					
					
						means a period of three calendar months each commencing on 1 January, 1 April, 1 July and 1 October of each Calendar Year (as defined in the Contracts);

				
	
					
						“Sale Shares”

					
					
						means 4,999 Ordinary Shares; 

				
	
					
						“Second Completion”

					
					
						means completion of the payment of the Second Consideration Amount pursuant to, and in accordance with, the terms of this Agreement; 

				
	
					
						“Second Completion Date”

					
					
						means the fifth Business Day following the date on which the Conditions are satisfied (or waived in accordance with Clause 6.2);

				
	
					
						“Second Consideration Amount”

					
					
						has the meaning given in Clause 7.2;

				
	
					
						“Senegal Area”

					
					
						means the area covered by the Contracts, as more particularly described in Exhibit D; 

				
	
					
						“Senegal Area JOAs”

					
					
						means the two Joint Operating Agreements, each dated 26 September 2012, entered into by and between PETRO-TIM Limited (Kosmos’ predecessor in title) and, PETROSEN for operations in the Saint Louis Offshore Profond and in the Cayar Offshore Profond portions of the Senegal Area, as amended and supplemented and novated from time to time; 

				
	
					
						“Success Fee Consideration”

					
					
						means a fee per Barrel (as defined under the Contracts) of total production of all liquid Hydrocarbons (as defined under the Contract) in the natural state or obtained from Natural Gas by condensation or separation with an API gravity equal to or greater than 22.3°, but excluding LNG, from each Eligible Discovery calculated on the basis of

				

		
			 
		

		
			
		

		

		 

		

			11

		

		

			 

		

 

	
					
						

					
						 

					
					
						the average price of Brent during the relevant Quarter of production multiplied by:

					
						(i)        in respect of each Barrel up to the aggregate gross cumulative production from all Eligible Discoveries and all Eligible Discoveries (as such term is defined in the Mauritania Farmout Agreement) of one Billion Barrels (1bnbbl), decimal zero zero eight seven five US Dollars (US$ 0.00875), which yields a Success Fee of decimal five two five US Dollars (US$ 0.525) per Barrel of production at a Brent price of sixty Dollars (US$ 60); provided that the Success Fee per Barrel in respect of the first one Billion Barrels (1bnbbl)shall not exceed one Dollar and five cents (US$ 1.05) per Barrel regardless of the average price of Brent; and

					
						(ii)       in respect of each Barrel over and above the aggregate gross cumulative production from all Eligible Discoveries and all Eligible Discoveries (as such term is defined in the Mauritania Farmout Agreement) of one Billion Barrels (1bnbbl), decimal zero zero zero zero eight seven five US Dollars (US$0.0000875), which yields a Success Fee of decimal zero zero five two five US Dollars (US$ 0.00525) per Barrel of production at a Brent price of sixty Dollars (US$ 60); provided that the Success Fee per Barrel in respect of the Barrels over and above one Billion Barrels (1bnbbl) shall not exceed one cent (US$ 0.01) per Barrel regardless of the average price of Brent]

				
	
					
						“Surviving Provisions”

					
					
						means Clauses 1, 10.3, 10.6, 11, 12, 13, 15, 16, 17, 18 (excluding 18.1 and 18.2) and 19; 

				
	
					
						“Tax”

					
					
						means any tax, royalty, levy, charge, impost, duty, fee, deduction, compulsory loan or withholding which is assessed, levied, imposed or collected by the Government tax authorities or any tax authorities of any other jurisdiction and includes any interest, fine, penalty, 

				

		
			 
		

		
			
		

		

		 

		

			12

		

		

			 

		

 

	
					
						

					
						 

					
					
						 

				
	
					
						 

					
					
						charge, fee or other amount imposed in respect of the above and “Taxes” shall be construed accordingly;

				
	
					
						“TC Asset Transfer Agreement”

					
					
						means the agreement dated on or around the date of this Agreement pursuant to which Kosmos agrees to transfer the TC Interests to JVCo, in the form set out in Part 2 of  Exhibit F;

				
	
					
						"TC Asset Transfer Completion"

					
					
						means completion of the acquisition of the TC Interests as contemplated by the TC Asset Transfer Agreement;

				
	
					
						"TC Asset Transfer Completion Date"

					
					
						means the date on which TC Asset Transfer Completion occurs;

				
	
					
						“TC Interests”

					
					
						means an undivided legal and beneficial interest of five percent (5%) in the rights and obligations under the Contracts and an undivided interest of five percent (5%) participating interest and a five decimal fifty-six percent (5.56%) Paying Interest in the rights and obligations under the Senegal JOAs, which interest is separate and distinct from the Initial Interests;

				
	
					
						“TC Option”

					
					
						means the option right of Kosmos to acquire from Timis Corporation the TC Interests pursuant to a Farm-out Agreement entered into between Kosmos and Timis Corporation in relation to interests in the Senegal Area;

				
	
					
						“TC Option Completion”

					
					
						means completion of the acquisition of the TC Interests, as contemplated pursuant to the TC Option;

				
	
					
						“TC Option Completion Date”

					
					
						means the date on which TC Option Completion occurs; and

				
	
					
						“Wholly-Owned Affiliate”

					
					
						means, in relation to any entity, any other entity that is wholly owned and controlled by such entity or that is wholly owned and controlled by a third person which has common control over the first two entities.

				

		
			 
		

		
			1.2       In this Agreement, unless otherwise specified:
		

		
			(A)      “subsidiary” has the meaning given in the UK Companies Act 2006;
		

		
			(B)      references to Clauses are to clauses of this Agreement;
		

		
			(C)      references to “$” and “US$” are to US dollars;
		

		
			(D)      headings to Clauses are for convenience only and do not affect the interpretation of this Agreement; 
		

		
			
		

		
			

		 

		

			13

		

		

			 

		

 

		

		
			(E)      words in the singular shall include the plural and vice versa;
		

		
			(F)       the words "include" and "including" shall be inclusive without limiting the generality of the description proceeding such term and are used in an illustrative sense and not a limiting sense;
		

		
			(G)      performance of an obligation of any kind by a Party must be carried out at that Party’s cost, unless this Agreement states otherwise;
		

		
			(H)      the Schedules and Exhibits form part of this Agreement and have full force and effect as expressly set out in the main body of this Agreement; and
		

		
			(I)        references in this Agreement to any agreement shall, where the context permits, be construed as a reference to such agreement as the same may be supplemented, amended or novated from time to time.
		

		
			2          Sale and purchase
		

		
			2.1       Kosmos shall sell, with full title guarantee, and BP shall purchase, the Sale Shares free from all Encumbrances, together with all rights attached or accruing to them at First Completion, such that, immediately following First Completion, the JV Partners’ respective holdings of Ordinary Shares shall be as follows:
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						JV Partner

					
					
						Ordinary Shares

					
					
						Percentage of Ordinary Share capital

				
	
					
						Kosmos

					
					
						5,001

					
					
						50.01

				
	
					
						BP

					
					
						4,999

					
					
						49.99

				

		
			 
		

		
			2.2       Kosmos waives all rights of pre-emption over any of the Sale Shares conferred upon it by the articles of association of the Company or in any other way.  
		

		
			3          Consideration
		

		
			3.1       The total consideration for the Sale Shares shall be:
		

		
			(A)      the payment by BP of the First Consideration Amount in accordance with Clause 4; 
		

		
			(B)      the payment by BP of the Second Consideration Amount in accordance with Clause 6; and
		

		
			(C)      the payment by BP of the Deferred Consideration Amounts in accordance with Clause 8.
		

		
			
		

		
			

		 

		

			14

		

		

			 

		

 

		

		
			3.2       Any payment made by either JV Partner under this Agreement, including any payments in respect of claims made under this Agreement, shall (so far as possible) be treated as an adjustment to the consideration for the Sale Shares to the extent of the payment.
		

		
			4         First Completion
		

		
			4.1      First Completion shall take place immediately following execution of this Agreement.  
		

		
			4.2      At First Completion:
		

		
			(A)      BP shall pay the First Consideration Amount to Kosmos (or to such person as directed by Kosmos) in accordance with Clause 9;
		

		
			(B)      Kosmos shall deliver to BP (or to such person as directed by BP) duly executed transfers in respect of the Sale Shares in favour of BP (or such person as BP may nominate); 
		

		
			(C)      Kosmos shall procure that the board of directors of JVCo passes a Board resolution approving the transfer of the Sale Shares to BP pursuant to this Agreement and (subject to stamping of the transfers) gives instructions for JVCo to update its register of members to reflect that BP has become the registered holder of the Sale Shares; and 
		

		
			(D)      JVCo shall comply with any other requirements in connection with the transfer of the Sale Shares to which JVCo is subject under applicable law.
		

		
			4.3      Pending registration of the transfer of the Sale Shares, Kosmos shall:
		

		
			(A)      hold the legal title to the Sale Shares on trust for BP; and
		

		
			(B)      on request, provide BP with a voting power of attorney to enable BP to exercise all voting and other rights exercisable by the registered holder of the Sale Shares. 
		

		
			5          Parties’ undertakings prior to Second Completion
		

		
			5.1      The JV Partners shall each exercise all such rights as are respectively available to them in their capacities as shareholders in JVCo to procure that, between the date of this Agreement and Second Completion, neither JVCo (nor any member of the JVCo Group) shall conduct any business or do any act or thing (or omit to do any act or thing) without the prior written consent of both JV Partners, and in particular, but without limitation to the generality of the foregoing, the JV Partners shall procure that neither JVCo (nor any member of the JVCo Group) shall:
		

		
			(A)      alter, amend, vary, terminate, assign any interest under, or waive any rights under, the Initial Asset Transfer Agreement or the TC Asset Transfer Agreement;
		

		
			
		

		
			

		 

		

			15

		

		

			 

		

 

		

		
			(B)      enter into, alter, amend, vary, terminate, assign any interest under, or waive any rights under, any other agreement, contract or commitment;
		

		
			(C)      acquire, dispose of or Encumber any asset;
		

		
			(D)      incur any liability or obligation (whether actual or contingent); or
		

		
			(E)      make any amendment to its capital structure, constitutional documents or tax residence,
		

		
			save if and to the extent the relevant member of the JVCo Group is required by applicable law or regulation, or in order to comply with its obligations under this Agreement, the Initial Asset Transfer Agreement or the TC Asset Transfer Agreement, to do the relevant act or thing (or omit to do the relevant act or thing).
		

		
			5.2      The Parties shall use all reasonable endeavours (acting reasonably and in good faith) to negotiate and agree as soon as reasonably practicable the terms of a legally binding shareholders’ agreement and any relevant ancillary documentation (such as constitutional documents, pro forma shareholder loan agreements and services agreements) reflecting the principles described in Clause 5.3  for the purposes of regulating the management of JVCo and the JVCo Group, the relationship of the JV Partners as shareholders in JVCo and certain aspects of the affairs of, and the JV Partners’ dealings with, the JVCo Group (the “SHA”).  
		

		
			5.3      The Parties agree that the SHA will have the objective of achieving a level of governance and control consistent, insofar as practical, with the level of governance and control that the JV Partners would have, were they to hold their respective proportionate interests in JVCo directly as participating interests in the Contracts and the Senegal Area JOAs, whilst reflecting the principles that:
		

		
			(A)       JVCo is an “Affiliate” of Kosmos for the purposes of all existing contracts, agreements and laws to which Kosmos is party or subject in respect of the Senegal Area;
		

		
			(B)       JVCo exercises its rights under the Senegal Area JOAs and votes as a single block; 
		

		
			(C)       the JV Partners shall have equal representation on the board of directors of JVCo, with all decisions of the JVCo taken on a joint and equal basis by the JV Partners (or their respective representatives), save in respect of (i) matters which the JV Partners agree should be delegated and (ii) decisions in respect of contracts or disputes which concern a JV Partner, in respect of which the relevant JV Partner shall recuse itself (and/or procure that that its representatives recuse themselves) from relevant decision-making;
		

		
			(D)      transfers of Ordinary Shares by the JV Partners will be subject to pre-emption rights and, in the case of Kosmos, will be prohibited to the extent that such transfer would otherwise result in (i) the transfer of the Interests to JVCo being
		

		
			
		

		
			

		 

		

			16

		

		

			 

		

 

		

		
			voided and such Interests being returned to Kosmos pursuant to Article 14.2(b) of the Senegal Area JOAs, or (ii) pre-emption rights over the Interests under a contract or agreement to which Kosmos is party at the date of this Agreement becoming exercisable, unless such rights have been waived;
		

		
			(E)       provisions will be included in the SHA to provide protections to a JV Partner in the event of a funding default or insolvency by the other JV Partner that are equivalent to and give the same economic benefit as the protections that co-venturers would typically enjoy in a joint operating agreement for an unincorporated joint venture; and
		

		
			(F)       Kosmos shall not carry out any business other than that of an oil and gas exploration and production company in Senegal and of holding (directly or indirectly) interests in JVCo and/or the Interests, and matters incidental thereto; and
		

		
			(G)      the provisions of Schedule 1 will be reflected in the SHA and/ or relevant ancillary documentation.
		

		
			5.4       The Parties intend that the SHA will be finalised and entered into on or before Second Completion, but if it is not:
		

		
			(A)       the provisions of Clauses 5.2 and 5.3 shall continue to apply;
		

		
			(B)       the Parties shall proceed to Second Completion, and the Parties’ rights and obligations under this Agreement will not be affected, notwithstanding that the SHA has not been entered into; and
		

		
			(C)       the Parties shall give effect to the objective and principles described in Clause 5.3 and the provisions of Schedule 1.
		

		
			5.5       Kosmos will comply with Schedule 2.
		

		
			5.6       Save as contemplated pursuant to Clauses 4.2 and 6.8, pending Second Completion, neither JV Partner will dispose of any legal or beneficial interest in any Ordinary Shares without the prior written consent of the other JV Partner.
		

		
			6          Conditions
		

		
			6.1       Payment of the Second Consideration Amount and each of the Deferred Consideration Amounts is in all respects conditional upon:
		

		
			(A)      issuance of a decree (Arrête) by the Senegal Minister of Energy and Development of Renewable Energy Resources approving the transfer of Kosmos’s Initial Interests under the Contracts to JVCo (or such approval being deemed effective pursuant to the Contracts) and written approval of such Minister designating JVCo as operator of the Senegal Area and the occurrence of the Initial Asset Transfer Completion; and
		

		
			
		

		
			

		 

		

			17

		

		

			 

		

 

		

		
			(B)       no notice of termination having been given in accordance with Clause 6.8 prior to the date on which the Condition at sub-clause (A) above is satisfied or waived,
		

		
			(the “Conditions” and each a “Condition”).
		

		
			6.2       Each Party shall use commercially reasonable efforts to execute all documents, and do and procure to be done all such acts and things as are reasonably within its power to ensure the Condition in Clause 6.1(A) are satisfied as soon as is reasonably practicable after execution of this Agreement. The Parties shall keep each other informed of progress towards the satisfaction of the Conditions and shall notify one another as soon as is reasonably practicable after they become aware that a Condition has been satisfied.  The Conditions may only be waived by agreement in writing between the JV Partners.  Without prejudice to the generality of the foregoing, Kosmos, or a Kosmos Affiliate (other than JVCo) shall offer to provide the Senegal Minister of Energy and Development of Renewable Energy Resources with a guarantee for JVCo’s Paying Interest share of the amount required under the Contracts.
		

		
			6.3       Notwithstanding any other provision of this Agreement, if, prior to the Second Completion Date, Kosmos or any other person is or becomes the subject of any investigation, inquiry or enforcement proceeding by a governmental, administrative or regulatory body regarding an offence or alleged offence relating to the Interests under any of the Anti-Corruption Laws and Obligations that is likely to result in a material, detrimental impact to the Interests, the Interest Documents or this Agreement, BP shall have the right to terminate this Agreement on notice pursuant to Clause 6.8.
		

		
			6.4       Notwithstanding any period of Force Majeure under Clause 18.1, if each of the Conditions are not satisfied (or waived pursuant to Clause 6.2) on or before the Longstop Date, then either JV Partner shall have the right to terminate this Agreement on notice pursuant to Clause 6.8.
		

		
			6.5       Notwithstanding any other provision of this Agreement, BP shall have the right to terminate this Agreement prior to the Second Completion Date on notice pursuant to Clause 6.8, if: 
		

		
			(A)      any of the Kosmos Asset Warranties (other than the warranties in paragraph 4.6(B), 4.9(BB), 4.11(A) insofar as it relates to the TC Interests, and 4.16D of Schedule 3) was at the date of this Agreement, or has since become, untrue in any material respect and is likely to prevent or inhibit the ability of JVCo to take title to the Interests; or
		

		
			(B)      any of the Kosmos Share Warranties was at the date of this Agreement untrue to an extent which is material in the context of the transactions contemplated by this Agreement; or
		

		
			(C)      Kosmos is in breach of any material undertaking in this Agreement and the breach is incapable of being cured before the Second Completion Date, has continued without cure for a period of 30 days after the notice of breach from
		

		
			
		

		
			

		 

		

			18

		

		

			 

		

 

		

		
			the JVCo or BP or remains uncured two (2) days prior to the Second Completion Date.
		

		
			6.6       If the Government imposes conditions for approval of the assignment and transfer of the Interests or transition of operatorship as contemplated hereunder materially in excess of those which are usually imposed in similar circumstances or if such approval contains unusual and onerous conditions which either JV Partner is not willing to accept, then the JV Partners shall in good faith meet to consider whether to agree to any such conditions for approval by the Government, and if they are unable to agree to such request within 30 days of the notification by the Government of such conditions, the relevant JV Partner shall have the right to terminate this Agreement on notice pursuant to Clause 6.8.
		

		
			6.7       Notwithstanding any period of Force Majeure under Clause 18.1 if any Party receives notice from the Government of a rejection of the transfer of the Initial Interests pursuant to the Initial Asset Transfer Agreement, then either JV Partner shall have the right to terminate this Agreement on notice pursuant to Clause 6.8. 
		

		
			6.8       A JV Partner may terminate this Agreement pursuant to Clause 6.3, 6.4, 6.5, 6.6 or 6.7 (other than the Surviving Provisions) by giving ten (10) days’ notice to the other Parties.  Unless such notice is withdrawn prior to its expiry then, at noon (UK time) (or such other time as the JV Partners may agree in writing) on the Business Day immediately following the expiry of the notice (the “Unwind Time”):
		

		
			(A)      BP shall sell, with full title guarantee, and Kosmos shall purchase, the Sale Shares free from all Encumbrances, together with all rights attached or accruing to them at the Unwind Time and BP shall deliver to Kosmos duly executed transfers in respect of the Sale Shares in favour of Kosmos and share certificates for the Sale Shares in the name of BP (the “Unwind Sale”);
		

		
			(B)      in consideration for the Unwind Sale, Kosmos shall pay BP an amount equal to the First Consideration Amount by telegraphic transfer for same date value in US dollars in immediately available funds to such account at such bank as BP shall have notified to Kosmos; 
		

		
			(C)      if any BP nominees have been appointed as directors of JVCo prior to the Unwind Time, BP shall procure that such nominees resign as directors of JVCo and waive any claims they may have in connection with their loss of office; and
		

		
			(D)      this Agreement shall automatically terminate (whereupon all obligations of the Parties under this Agreement shall terminate) but (for the avoidance of doubt) all rights and liabilities of the Parties which have accrued before termination shall continue to exist, save that any obligation to pay any Consideration Amount which has, as at the date of termination, not been paid shall not survive and shall automatically terminate.
		

		
			6.9       Promptly following completion of the matters set out in Clause 6.8, JVCo shall update its register of members to reflect that Kosmos has become the registered holder of the
		

		
			
		

		
			

		 

		

			19

		

		

			 

		

 

		

		
			Sale Shares and JVCo shall comply with any other requirements in connection with the transfer of the Sale Shares to which JVCo is subject under applicable law;
		

		
			7          Second Completion
		

		
			7.1       Subject always to the provisions of Clause 6.1, Second Completion shall take place on the Second Completion Date.  
		

		
			7.2       At Second Completion, BP shall pay the sum of forty-one million, nine hundred thousand Dollars (US$ 41,900,000) (the “Second Consideration Amount”) to Kosmos (or to such person as directed by Kosmos) in accordance with Clause 9.
		

		
			7.3       On First Completion, Kosmos shall procure that JVCo appoints Jasper Peijs and John Brame as directors of JVCo provided that such directors have consented to act.
		

		
			7.4       On or before Second Completion, but in any event no sooner than five Business Days after signing of this Agreement, BP shall deliver to Kosmos:
		

		
			(A)       a duly executed guarantee from BP Exploration Operating Company Limited in the form set out in Exhibit I Part 1; and
		

		
			(B)       a duly executed “back-to-back” guarantee from BP Exploration Operating Company Limited in the form set out in Exhibit I Part 2.
		

		
			8          Deferred Consideration Amounts
		

		
			8.1       Subject always to the provisions of Clause 6.1, the Parties agree that the Deferred Consideration Amounts shall be payable by BP in accordance with the following provisions of this Clause 8 and Clause 9.
		

		
			8.2      Interim Period Costs Consideration
		

		
			(A)      Kosmos shall keep BP advised of the costs expended by Kosmos during the Interim Period.  Specifically, Kosmos shall provide BP with a written statement of the amount of the Dollar balance resulting from the initial calculation of the Interim Period Costs (the “Monthly Interim Costs Completion Statement”) no later than thirty (30) days following the end of each calendar month during the Interim Period. Kosmos and BP agree that if the information required for such timely preparation of a Monthly Interim Costs Completion Statement is not available, Kosmos’s good faith estimate of such information shall be substituted.
		

		
			(B)      Within sixty (60) days after the Second Completion Date, or within such other period as may be agreed in writing by the Parties, Kosmos shall provide BP with a written statement giving the final amount of the Interim Period Costs (the “Final Completion Statement”).  Upon BP’s request, Kosmos shall provide BP with copies of reports, billing statements and correspondence and any other relevant documentation in Kosmos’s possession in support of the Final Completion Statement within ten (10) Business Days of such request, which
		

		
			
		

		
			

		 

		

			20

		

		

			 

		

 

		

		
			shall be made no later than ten (10) Business Days from the date the Final Completion Statement is supplied to BP.  BP shall have the right, for a period of ninety (90) days following the date of delivery of the Final Completion Statement, to audit the Interim Period Costs on prior notice and during reasonable business hours in Kosmos’s offices; and Kosmos shall provide such confirmation of the said Interim Period Costs as may be requested by BP in order to confirm the amount of Interim Period Costs. Kosmos and BP shall endeavor in good faith to resolve any item of adjustment to the Interim Period Costs in the Final Completion Statement within one hundred twenty (120) days following the date of delivery of the Final Completion Statement.  The agreed amount of the Interim Period Costs shall be subject to no adjustment or amendment. In the event that the Kosmos and BP are unable to agree upon any item of adjustment within the above period, such amount shall be determined in accordance with the procedures for settling disputed invoices under the Senegal Area JOAs.
		

		
			(C)       Kosmos shall provide BP with copies of all operator reports, billing statements and correspondence and any other relevant documentation in support of the Monthly Interim Costs Completion Statement and the Final Completion Statement at the same time such statements are supplied.
		

		
			(D)      The Interim Period Costs Consideration shall be paid by BP to Kosmos in accordance with Clause 9 within five (5) Business Days of the delivery of the Final Completion Statement (pursuant to Clause 8.2(B)), but without prejudice to BP's subsequent rights of audit and dispute under Clause 8.2(B).
		

		
			8.3       Exploration and Appraisal Carry Consideration
		

		
			(A)      The “Exploration and Appraisal Carry Consideration” shall be an amount equal to 50.01 per cent of, Kosmos’s Paying Interest share (prior to Initial Asset Transfer Completion), and JVCo’s Paying Interest share (subsequent to Initial Asset Transfer Completion), of costs otherwise due and payable by Kosmos or JVCo (as applicable) after the Effective Date under the terms of the Senegal Area JOAs (including, for these purposes, Timis Corporation’s remaining interest share of the first one hundred and twenty million Dollars (US$120,000,000) of gross costs (including all general and administration costs and expenses (G&A)) to drill one exploration well or appraisal well (including testing) in the Senegal Area, the costs of which are to be carried pursuant to the TC Option, but excluding Timis Corporation’s remaining interests shares in respect of other costs in respect of the Senegal Area) pursuant to an approved work programme and budget thereunder in connection with all activities other than those activities covered under Clause 8.4 (the “Carried Exploration Costs”) PROVIDED THAT:
		

		
			(i)        the aggregate amount of (x) the Exploration and Appraisal Carry Consideration paid by BP under this Clause and (y) the Exploration and Appraisal Carry (as such term is defined in the Mauritania Farmout Agreement) paid by the Farmee (as such term is defined in the 
		

		
			
		

		
			

		 

		

			21

		

		

			 

		

 

		

		
			Mauritania Farmout Agreement) (but excluding, for these purposes, amounts payable pursuant to Clause 8.3(B)(ii)) (the “Combined Exploration Total”) shall not exceed two hundred and twenty-one million Dollars ($US 221,000,000) (the “Combined Exploration Limit”); 
		

		
			(ii)       if the Mauritania Farmout Agreement terminates in accordance with its terms for any reason other than breach by BP Exploration (West Africa) Limited, the aggregate amount of the Exploration and Appraisal Carry Consideration paid by BP under this Clause (excluding, for these purposes, amounts payable pursuant to Clause 8.3(B)(ii)) (the “Standalone Exploration Total”) shall not exceed fifty-seven million, two hundred thousand Dollars ($US 57,200,000) (the “Standalone Exploration Limit”); and 
		

		
			(iii)      the Exploration and Appraisal Carry Consideration shall only apply in respect of Carried Exploration Costs that are due and payable on or before 31 December 2022.
		

		
			(B)      The Exploration and Appraisal Carry Consideration shall be payable by BP whenever JVCo is required to make any payment in respect of Carried Exploration Costs.  BP will pay the Exploration and Appraisal Carry Consideration in sufficient time for JVCo to make such payments when due.  Kosmos hereby directs BP to pay the Exploration and Appraisal Carry Consideration (other than the payments described in paragraphs (C) and (D) below) direct to JVCo on Kosmos’s behalf and Kosmos hereby undertakes not to revoke such payment direction without BP’s prior written consent.  Payments made by BP direct to JVCo in this way:
		

		
			(i)        shall discharge BP’s obligation to make the relevant payment of Exploration and Appraisal Carry Consideration;
		

		
			(ii)       subject to the payment direction issued by Kosmos pursuant to this Clause 8.3(B) not having previously been revoked, shall be accompanied by an equivalent payment from BP (on its own account) to JVCo equal to 49.99% of JVCo's Paying Interest Share of costs otherwise due and payable by JVCo after the Effective Date under the terms of the Senegal Area JOAs; and
		

		
			(iii)      shall be paid and structured in a tax efficient manner (including by loan or a capital injection or a combination of both) from Kosmos to JVCo and the own account payment made by BP referred to in sub-paragraph (ii) above shall be paid from BP to JVCo and structured in a tax efficient manner (including by loan or a capital injection or a combination of both). 
		

		
			(C)      If the Combined Exploration Total as at 1 January 2023 is less than the Combined Exploration Limit and sub-paragraph (A)(ii) above does not apply, BP shall pay an amount equal to the shortfall by no later than 1 February 2023
		

		
			
		

		
			

		 

		

			22

		

		

			 

		

 

		

		
			either to Kosmos’s Account in accordance with Clause 9 or, at Kosmos’s election, all or a portion of the shortfall will be paid to Kosmos Mauritania under the Mauritania Farmout Agreement with the balance being paid to Kosmos pursuant to this Clause and Clause 9.
		

		
			(D)      If sub-paragraph (A)(ii) above does apply and the Standalone Exploration Total as at 1 January 2023 is less than the Standalone Exploration Limit, BP shall pay an amount equal to the shortfall to Kosmos’s Account in accordance with Clause 9 by no later than 1 February 2023.
		

		
			8.4       Development Carry Consideration
		

		
			(A)      The “Development Carry Consideration” shall be an amount equal to 50.01 per cent of Kosmos’s Paying Interest share (prior to Initial Asset Transfer Completion), and JVCo’s Paying Interest share (subsequent to Initial Asset Transfer Completion), of costs that are properly incurred and due and payable by Kosmos or JVCo (as applicable) after the Effective Date under the terms of the Senegal Area JOAs pursuant to an approved work programme and budget thereunder in connection with achieving Commercial Production of Hydrocarbons (as defined under the Contracts) from the Tortue Discovery Area as shown in Exhibit C, Part 1, including the Firm Work Programme (Development) in Exhibit A 2, or any alternative development in the Senegal Area (the “Carried Development Costs”) PROVIDED THAT:
		

		
			(i)        the aggregate amount of (x) the Development Carry Consideration paid by BP under this Clause and (y) the Development Carry (as such term is defined in the Mauritania Farmout Agreement) paid by the Farmee (as such term is defined in the Mauritania Farmout Agreement) (but excluding, for these purposes, amounts payable pursuant to Clause 8.4(B)(ii)) shall not exceed five hundred and thirty-three million, four hundred thousand Dollars ($US 533,400,000); 
		

		
			(ii)       if the Mauritania Farmout Agreement terminates in accordance with its terms for any reason other than breach by BP Exploration (West Africa) Limited, the aggregate amount of the Development Carry Consideration paid by BP under this Clause (but excluding, for these purposes, amounts payable pursuant to Clause 8.4(B)(ii)) shall not exceed one hundred and eighty-three million, four hundred thousand Dollars ($US 183,400,000); and 
		

		
			(iii)      the Development  Carry Consideration shall only apply in respect of Carried Development Costs that are due and payable on or before the date on which first Commercial Production from a development within an Exploitation Perimeter is achieved from the Senegal Area and/or the Mauritania Area.
		

		
			(B)      The Development Carry Consideration shall be payable by BP whenever JVCo is required to make any payment in respect of Carried Development Costs.  BP
		

		
			
		

		
			

		 

		

			23

		

		

			 

		

 

		

		
			will pay the Development Carry Consideration in sufficient time for JVCo to make such payments when due.  Kosmos hereby directs BP to pay the Development Carry Consideration direct to JVCo on Kosmos’s behalf and Kosmos hereby undertakes not to revoke such payment direction without BP’s prior written consent.  Payments made by BP direct to JVCo in this way:
		

		
			(i)        shall discharge BP’s obligation to make the relevant payment of Development Carry Consideration;
		

		
			(ii)       subject to the payment direction issued by Kosmos pursuant to this Clause 8.4(B) not having previously been revoked shall be accompanied by an equivalent payment from BP (on its own account) to JVCo equal to 49.99% of JVCo's Paying Interest Share of costs otherwise due and payable by JVCo after the Effective Date under the terms of the Senegal Area JOAs; and
		

		
			(iii)      shall be paid and structured in a tax efficient manner (including by loan or a capital injection or a combination of both) from Kosmos to JVCo and the own account payment made by BP referred to in sub-paragraph (ii) above shall be paid from BP to JVCo and structured in a tax efficient manner (including by loan or a capital injection or a combination of both). 
		

		
			(C)      For the avoidance of any doubt, there shall be no double-counting of amounts payable under Clause 8.3 and this Clause 8.4, with the intention that BP shall not be required to pay more than once in respect of the same costs.
		

		
			8.5       Success Fee Consideration
		

		
			(A)      The Success Fee Consideration in respect of each Eligible Discovery shall be paid quarterly by BP, or BP’s Affiliate, to Kosmos, or (at Kosmos’s election) Kosmos’s Affiliate, by electronic transfer in immediately available funds into Kosmos’s Account no later than thirty (30) days following the end of each Quarter after the date Commercial Production exceeds twenty thousand Barrels per day (20mbd) from such Eligible Discovery and  in respect of each Barrel (as defined under the Contracts) of gross production of liquid Hydrocarbons (as defined under the Contracts) in the natural state or obtained from Natural Gas by condensation or separation with an API gravity equal to or greater than 22.3°, but excluding LNG, produced from such Eligible Discovery in the immediately preceding Quarter.
		

		
			(B)      The obligation to pay Success Fee Consideration falling within limb (i) of such definition shall expire on the earlier of (a) when the aggregate gross cumulative production from all Eligible Discoveries and all Eligible Discoveries (as such term is defined in the Mauritania Farmout Agreement) exceeds one Billion Barrels (1bnbbl); and (b) in respect of an Eligible Discovery, fifteen (15) years after the date of first production from such Eligible Discovery.  The obligation to pay Success Fee Consideration falling within limb (ii) of such definition shall
		

		
			
		

		
			

		 

		

			24

		

		

			 

		

 

		

		
			expire five (5) years after the date when the aggregate gross cumulative production from all Eligible Discoveries and all Eligible Discoveries (as such term is defined in the Mauritania Farmout Agreement) exceeds one Billion Barrels (1bnbbl).
		

		
			(C)      If an index is required to be used in the calculation of Brent, and such index ceases to be published, either Kosmos or BP may request the adoption of such substitute index as most closely resembles the original index prior to it ceasing to be published or changing. If the Parties are unable to agree within sixty (60) days of such request, the matter shall be referred for determination under Article 11.2.
		

		
			(D)      To the extent that a Success Fee (as defined in the Mauritania Farmout Agreement) is payable under the Mauritania Farmout Agreement and Success Fee Consideration is payable under this Agreement in respect of the same discovery, there shall be no double-counting of amounts payable under the Mauritania Farmout Agreement with amounts payable under this Agreement with the intention that BP shall not be required to pay more than once in respect of the same production.
		

		
			8.6      Other Costs and Cost Recovery
		

		
			(A)      On and from the Effective Date JVCo shall assume and be liable for its Participating Interest share of costs incurred under the Contracts or Senegal Area JOAs pursuant to their terms.   Any costs for which Kosmos or JVCo would otherwise be liable under the terms of the Senegal Area JOAs between the Effective Date and the Second Completion Date shall be funded by Kosmos (as to 50.01% for its own account and 49.99% on behalf of BP) and 49.99% of such costs shall be paid to Kosmos by BP after the Second Completion Date pursuant to Clause 8.2.
		

		
			(B)      JVCo shall be entitled to recover its Participating Interest share of costs incurred under the Contracts upon commencement of production from the relevant portion of the Senegal Area regardless of whether the costs were incurred before or after the Effective Date. For the avoidance of doubt, such Participating Interest share shall be the Participating Interest held at the time such costs become recoverable under the Contracts after the commencement of production and to the extent that any person (the "Receiving Party") receives the Participating Interest share of costs that should otherwise have been paid to JVCo, the Receiving Party shall pay such sums to JVCo within five (5) Business Days of receipt thereof.
		

		
			8.7      Change in Participating Interest
		

		
			(A)      If JVCo owns less than a 65% Participating Interest as at 01 July 2018 (or such later date as the JV Partners may agree) other than as a result of JVCo selling part or all of its Participating Interest, then:
		

		
			
		

		
			

		 

		

			25

		

		

			 

		

 

		

		
			(i)        the amount payable by BP under Clause 7.2;
		

		
			(ii)       the maximum amount payable by BP pursuant to Clause 8.3(A) (ii);
		

		
			(iii)      the maximum amount payable by BP pursuant to Clause 8.4(A)(ii); and
		

		
			(iv)      the multiplier in limb (i) of the definition of Success Fee Consideration, 
		

		
			shall, in each case, be reduced in proportion to the amount by which the Participating Interest so owned is less than 65%, and:
		

		
			(a)       the maximum amount payable by BP pursuant to Clause 8.3(A)(i) shall be reduced by the same amount by which the maximum amount referred to in (ii) above is reduced; and 
		

		
			(b)       the maximum amount payable by BP pursuant to Clause 8.4(A)(i) shall be reduced by the same amount by which the maximum amount referred to in (iii) above is reduced; and 
		

		
			(c)       all calculations resulting from the reduction in (iv) above shall be applied within the limb(i) of the definition of Success Fee Consideration. 
		

		
			(B)      By way of example, if JVCo owns a 64% Participating interest as at the 01 July 2017, the amounts referred to above would be adjusted as follows:
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Original Amount

					
					
						Revised Amount

				
	
					
						 

					
					
						Clause 7.2

					
					
						$41,900,000

					
					
						$41,300,000

				
	
					
						 

					
					
						Clause 8.3(A)(ii)

					
					
						$57,200,000

					
					
						$56,400,000

				
	
					
						 

					
					
						Clause 8.4(A)(ii)

					
					
						$183,400,000

					
					
						$180,600,000

				
	
					
						 

					
					
						Clause 8.3(A)(i)

					
					
						$221,000,000

					
					
						$220,200,000

				
	
					
						 

					
					
						Clause 8.4(A)(i)

					
					
						$533,400,000

					
					
						$530,600,000

				
	
					
						 

					
					
						Limb (i) of Success Fee Consideration

					
					
						$0.00875

					
					
						$0.00862

				
	
					
						 

					
					
						 

					
					
						$0.525

					
					
						$0.517

				
	
					
						 

					
					
						 

					
					
						$1.05

					
					
						$1.03

				

		
			 
		

		
			(C)       If the Second Consideration Amount has already been paid when the adjustments described above are made, Kosmos shall repay to BP an amount equal to the amount by which the Second Consideration Amount is so adjusted.
		

		
			
		

		
			

		 

		

			26

		

		

			 

		

 

		

		
			(D)      If the Participating Interest of JVCo subsequently increases to or above 65%, the adjustments described above will be reversed and appropriate adjusting payments made.
		

		
			9          Payment
		

		
			Where a Consideration Amount is expressed to be payable in accordance with or pursuant to this Clause 9, the relevant Consideration Amount payable by BP shall be paid to Kosmos (or to such person as Kosmos shall specify in writing) by telegraphic transfer for same date value on the due date for payment in US dollars in immediately available funds to Kosmos’s Account.
		

		
			10        Parties’ warranties
		

		
			10.1     Kosmos’s Warranties and Undertakings
		

		
			Subject to the provisions of this Clause 10, and save as disclosed under the terms of the Kosmos Disclosure Letter, Kosmos warrants and undertakes to BP as at the date of this Agreement that:
		

		
			(A)      the Kosmos Warranties and the warranty at paragraph 1 of Exhibit B are true and accurate in all respects as at the date of this Agreement;
		

		
			(B)      save as provided in Clause 10.1(C), the Kosmos Asset Warranties and the warranty at paragraph 1 of Exhibit B shall be deemed to be repeated at the Initial Asset Transfer Completion Date; and
		

		
			(C)      the Kosmos Asset Warranty at paragraphs 4.6(B), 4.9(BB), 4.16(D) and (insofar as it relates to the TC Interests) 4.11(A) of Part 1 of Schedule 3 shall be deemed to be repeated at the TC Asset Transfer Completion Date.
		

		
			10.2     BP’s Warranties and Undertakings
		

		
			BP warrants and undertakes to Kosmos as at the date of the Agreement that the BP Warranties and the warranty at paragraph 1 of Exhibit B are true and accurate in all respects, and the BP Warranties and the warranty at paragraph 1 of Exhibit B shall be deemed to be repeated at the Second Completion Date.
		

		
			10.3     Breach of Warranty
		

		
			(A)      Each of the JV Partners agrees to indemnify and hold the other JV Partner harmless against any costs, charges, expenses, duties, losses, liabilities and obligations which such other JV Partner pays, suffers or is liable for at any time which arise out of or in connection with the breach by the indemnifying Party of, in the case of Kosmos, any of the Kosmos Share Warranties, or, in the case of BP, any of the BP Warranties.
		

		
			(B)      Kosmos covenants to pay and hold BP harmless against an amount equal to the Relevant Portion of any costs, charges, expenses, duties, losses, liabilities
		

		
			
		

		
			

		 

		

			27

		

		

			 

		

 

		

		
			and obligations ("Relevant Losses") which JVCo pays, suffers or is liable for at any time which arise out of or in connection with the breach by Kosmos of any of the Kosmos Asset Warranties. For these purposes, the Relevant Portion shall be the lesser of (i) 49.99% and (ii) if the proportionate interest in the Ordinary Share capital of JVCo held by BP and its Affiliates is less than 49.99%, an amount equal to BP's (together with its Affiliates') then proportionate interest share of the ordinary shares of JVCo plus the amount of any liability BP has to the acquirer(s) of the Ordinary Shares in respect of the same Relevant Losses.
		

		
			(C)      Kosmos shall have no liability in respect of any claim made by BP for a breach of the Kosmos Warranties, and BP shall have no liability in respect of any claim made by Kosmos for a breach of BP Warranties, unless such claim:
		

		
			(i)        equals or exceeds one million Dollars (US$1,000,000); or
		

		
			(ii)       when aggregated with all other valid claims the Party concerned  may have against the other Party that are each of a value under one million Dollars (US$1,000,000), would mean such aggregate equals or exceeds one million Dollars (US$1,000,000),
		

		
			and in either case the Party concerned shall be entitled to recover the whole amount of the relevant claim(s) not only the amount the relevant claim(s) (alone or aggregated) exceed one million Dollars (US$1,000,000).
		

		
			(D)      Kosmos shall not be liable in respect of a claim for breach of a Kosmos Warranty set out in paragraphs 4.18(A) or 4.18(B) of Schedule 3 Part 1 or the warranty at paragraph 1 of Exhibit B to the extent that, as at the date of this Agreement, BP was actually aware: (i) of the facts or circumstances giving rise to the claim for breach of such Kosmos Warranty or the warranty set out at paragraph 1 of Exhibit B; and (ii) that such facts or circumstances would give rise to a claim for breach of such Kosmos Warranty or the warranty at paragraph 1 of Exhibit B.
		

		
			10.4      Undertakings in relation to breaches
		

		
			(A)      Kosmos undertakes that:
		

		
			(i)        it shall not at any time before the Second Completion Date do (or permit or suffer to subsist or be done) any act or thing which would constitute a breach of any of the Kosmos Asset Warranties or the warranty at paragraph 1 of Exhibit B or which would make any of the Kosmos Asset Warranties untrue or misleading at any time; and
		

		
			(ii)       upon becoming aware before the Second Completion Date of the actual or impending occurrence or non-occurrence of any matter, event or circumstance (including any omission to act) which:
		

		
			
		

		
			

		 

		

			28

		

		

			 

		

 

		

		
			(a)       would or might reasonably be expected to cause or constitute a breach of any Kosmos Asset Warranty or the warranty at paragraph 1 of Exhibit B; 
		

		
			(b)       would or might reasonably be expected to make any of the Kosmos Asset Warranties or the warranty at paragraph 1 of Exhibit B untrue or misleading; 
		

		
			(c)       would have caused or constituted a breach of any Kosmos Asset Warranty or the warranty at paragraph 1 of Exhibit B had it been known to Kosmos before the date of this Agreement; or
		

		
			(d)       would or might reasonably be expected to adversely affect (or has so affected) the Interests,
		

		
			it will immediately give BP notice of such matter, event or circumstance with sufficient details to enable BP accurately to assess its impact. 
		

		
			(B)      BP undertakes that:
		

		
			(i)        it shall not at any time before the Second Completion Date do (or permit or suffer to subsist or be done) any act or thing which would constitute a breach of any of the BP Warranties or the warranty at paragraph 1 of Exhibit B or which would make any of the BP Warranties or the warranty at paragraph 1 of Exhibit B untrue or misleading at any time; and
		

		
			(ii)       upon becoming aware before the Second Completion Date of the actual or impending occurrence or non-occurrence of any matter, event or circumstance (including any omission to act) which:
		

		
			(a)       would or might reasonably be expected to cause or constitute a breach of any BP Warranty or the warranty at paragraph 1 of Exhibit B; 
		

		
			(b)       would or might reasonably be expected to make any of the BP Warranties or the warranty at paragraph 1 of Exhibit B untrue or misleading; 
		

		
			(c)       would have caused or constituted a breach of any BP Warranty or the warranty at paragraph 1 of Exhibit B had it been known to BP before the date of this Agreement; or
		

		
			(d)       would or might reasonably be expected to adversely affect (or has so affected) the Interests,
		

		
			it will immediately give Kosmos notice of such matter, event or circumstance with sufficient details to enable Kosmos accurately to assess its impact.  
		

		
			
		

		
			

		 

		

			29

		

		

			 

		

 

		

		
			10.5     Disclaimer of Other Representations and Warranties
		

		
			(A)      Except for the Kosmos Warranties and the warranty in paragraph 1 of Exhibit B, Kosmos makes no, and disclaims any, warranty or representation of any kind, either express, implied, statutory, or otherwise, including, the accuracy or completeness of any data, reports, records, projections, information, or materials now, heretofore, or hereafter furnished or made available to JVCo or BP in connection with this Agreement.
		

		
			(B)      Except for the BP Warranties and the warranty in paragraph 1 of Exhibit B, BP makes no, and disclaims any, warranty or representation of any kind, either express, implied, statutory, or otherwise, including, without limitation, the accuracy or completeness of any data, reports, records, projections, information, or materials now, heretofore, or hereafter furnished or made available to Kosmos in connection with this Agreement.
		

		
			10.6     Fraud and Wilful Concealment
		

		
			Notwithstanding anything to the contrary herein, nothing in this Agreement shall limit any Party’s liability for fraud or willful concealment.
		

		
			10.7     Set-off 
		

		
			BP is hereby authorized and entitled at any time and from time to time, to the fullest extent permitted by law, to withhold and set-off from any payment otherwise due to be made to Kosmos pursuant to Clauses 6 to 8 of this Agreement or from any payment due to be made by BP’s Affiliate to Kosmos Mauritania pursuant to clauses 4.3 to 4.6 of the Mauritania Farmout Agreement an amount equal to the amount owing pursuant to any and all Kosmos Payment Failures. 
		

		
			11        Further assurance
		

		
			11.1     Each of the JV Partners shall at its own cost, from time to time on request, do or procure the doing of all acts and/or execute or procure the execution of all documents in a form reasonably satisfactory to the other JV Partner which the other JV Partner (acting reasonably) may consider necessary for giving full effect to this Agreement and the transactions contemplated by it.
		

		
			11.2     Each of the JV Partners agrees to co-operate in good faith with the other in order to finalise the structure for the proposed joint venture between them, with the common intention that the Parties will seek to implement a structure that is efficient and cost-effective. The Parties recognise that this may involve changes to the structure currently envisaged in this Agreement, such as the introduction of a new joint venture holding company above JVCo or a new asset-owning subsidiary of JVCo.
		

		
			
		

		
			

		 

		

			30

		

		

			 

		

 

		

		
			12        Variation
		

		
			No variation to or waiver under this Agreement shall be effective unless made in writing and signed by or on behalf of all the Parties.
		

		
			13        Confidentiality and Announcements
		

		
			13.1     Except as otherwise provided in the Contracts and the Senegal Area JOAs, each Party agrees that the existence of and all terms of this Agreement and all information disclosed under this Agreement by either Party (except information in the public domain or lawfully in possession of a Party prior to the date of this Agreement) shall be considered confidential information and shall not be disclosed to any other person or entity without the prior written consent of the other Parties. This obligation of confidentiality shall remain in force during the term of the Contracts and for a period of three (3) years thereafter. Notwithstanding the foregoing, confidential information may be disclosed without consent and without violating the obligations contained in this Clause 13 in the following circumstances:
		

		
			(A)      to an Affiliate provided the Affiliate is bound to the provisions of this Article 9 and the Party disclosing is responsible for the violation of an Affiliate; 
		

		
			(B)      to a governmental agency or other entity when required by the Contracts;
		

		
			(C)      to the extent such information is required to be furnished in compliance with applicable laws or regulations, or pursuant to any legal proceedings or because of any order of any court binding upon a Party; 
		

		
			(D)      to attorneys engaged, or proposed to be engaged, by any Party where disclosure of such information is essential to such attorneys' work for such Party and such attorneys are bound by an obligation of confidentiality;
		

		
			(E)      to contractors and consultants engaged, or proposed to be engaged, by any Party where disclosure of such information is essential to such contractor’s or consultant’s work for such Party;
		

		
			(F)       to a bank or other financial institution to the extent appropriate to a Party arranging for funding;
		

		
			(G)      to the extent such information must be disclosed pursuant to any rules or requirements of any government or stock exchange having jurisdiction over such Party, or its Affiliates; provided that such Party shall comply with the requirements of Clause 13.3;
		

		
			(H)      to its respective employees, subject to each Party taking sufficient precautions to ensure such information is kept confidential; 
		

		
			(I)        to the other parties to the Contracts and the Senegal Area JOAs and the Government; and
		

		
			
		

		
			

		 

		

			31

		

		

			 

		

 

		

		
			(J)        to the other parties, including the Government of the Islamic Republic of Mauritania, to the Mauritania Contracts, solely to the extent as may be required to satisfy the conditions precedent specified in the Mauritania Farmout Agreement.
		

		
			13.2     Disclosure pursuant to Clauses 13.1 (v) and (vi) shall not be made unless prior to such disclosure the disclosing Party has obtained a written undertaking from the recipient party to keep the information strictly confidential for at least as long as the period set out above and to use the information for the sole purpose described in Clauses 13.1(v) and (vi), whichever is applicable, with respect to the disclosing Party.
		

		
			13.3     No public announcement or statement regarding the terms or existence of this Agreement shall be made without prior written consent of all Parties; provided that, notwithstanding any failure to obtain such approval, no Party shall be prohibited from issuing or making any such public announcement or statement to the extent it is necessary to do so in order to comply with the applicable laws, rules or regulations of any government, legal proceedings or stock exchange having jurisdiction over such Party or its Affiliates, however, any such required public announcement or statement shall include only that portion of information which the disclosing Party is advised by written opinion of counsel (including in-house counsel) is legally required.  Such opinion, along with the proposed public announcement or statement, shall be delivered to the other Party no later than two days prior to any such public announcement or statement.
		

		
			14       Notices 
		

		
			14.1     All notices authorized or required between the Parties by any of the provisions of this Agreement shall be:
		

		
			(A)      in writing (in English) and addressed to the relevant Party as set out in this Clause (unless such party gives notice in writing of a change of address or addressee as set out below);
		

		
			(B)      must be signed or in the case of a facsimile, appear to have been signed, by an authorized representative of the sender;
		

		
			(C)      regarded as given and received:
		

		
			(i)        if delivered by hand or by express courier, when delivered to the addressee; or
		

		
			(ii)       if sent by post, three Business Days from and including the date of postage; or
		

		
			(iii)      if sent by facsimile transmission, when the transmission is successfully transmitted as reported by the sender’s machine,
		

		
			but if the delivery or receipt is on a day which is not a Business Day or is after 4.00pm (addressee’s time) it is regarded as received at 9:00am on the following Business Day.
		

		
			
		

		
			

		 

		

			32

		

		

			 

		

 

		

		
			E-mail notification of any notices delivered pursuant to this Article will also be provided for information only.
		

		
			14.2     A facsimile transmission is not regarded as successfully transmitted if the addressee telephones the sender within four (4) hours after the transmission is received or regarded as received under Clause 14.1(C)(iii) and informs the sender that it is not legible or incomplete.  E-mail addresses are provided for convenience only.
		

		
			KOSMOS:
		

			
					
						 

					
					
						 

				
	
					
						Kosmos Energy Senegal

					
					
						 

				
	
					
						c/o Wilmington Trust (Cayman Islands)

					
					
						c/o Kosmos Energy, LLC

				
	
					
						4th Floor, Century Yard

					
					
						8176 Park Lane, Suite 500

				
	
					
						Cricket Square, Hutchins Drive

					
					
						Dallas, TX  75231 USA

				
	
					
						Elgin Avenue, George Town

					
					
						Grand Cayman KY1-1209

				

		
			 
		

			
					
						E-mail: kosmosgeneralcounsel@kosmosenergy.com

				
	
					
						Fax: +1 214 445-9705

				
	
					
						Attn.: General Counsel

				
	
					
						E-mail: SenegalNotifications@kosmosenergy.com

				
	
					
						Fax:  +1 214 445-9705

				
	
					
						Attn.: Jesse Noah, Vice President, Exploration, North Africa

				

		
			 
		

		
			BP:  
		

		
			BP Exploration Operating Company Limited
Lakeview Building
Chertsey Road 
Sunbury-on-Thames 
Middlesex 
TW16 7LN
United Kingdom
		

		
			E-mail: andy.lane@uk.bp.com
Fax: +44 (0) 1932 763043
Attn.:      Andy C. Lane, Head of Business Development, Gas Value Chain
		

		
			JVCo:  
		

		
			Shall be to both JV Partners as above
		

		
			
		

		
			

		 

		

			33

		

		

			 

		

 

		

		
			15        Tax; Costs
		

		
			15.1     Kosmos shall pay, and shall indemnify and hold JVCo and BP harmless against any liability for any capital gains tax (or equivalent tax) which may be, or become, payable in connection with the sale, assignment or transfer of the Interests pursuant to the Initial Asset Transfer Agreement or the TC Asset Transfer Agreement and in respect of any costs (including reasonable legal costs), expenses, loss or damage occasioned by its failure to pay, or any delay in paying, such tax.
		

		
			15.2     BP shall be responsible for payment in a timely fashion of any and all transfer taxes, such as stamp duties and taxes (or equivalent duties and taxes) (including interest, penalties and/or fines thereof) (the “Share Transfer Taxes”) payable on or in respect of the sale and purchase or transfer of the Sale Shares including the execution and enforcement of this Agreement and shall indemnify and hold JVCo and Kosmos harmless in respect of any costs (including reasonable legal costs), expenses, loss or damage occasioned by its failure to pay, or any delay in paying, such Share Transfer Taxes.
		

		
			15.3     The JV Partners shall be responsible for payment to JVCo in a timely fashion of any and all transfer taxes, such as stamp duties and taxes (or equivalent duties and taxes) (including interest, penalties and/or fines thereof) (the “Asset Transfer Taxes”) payable on or in respect of the assignment and transfer of the Interests to JVCo pursuant to the Initial Asset Transfer Agreement or the TC Asset Transfer Agreement. Each JV Partner shall indemnify and hold JVCo and the other JV Partner harmless in respect of any costs (including reasonable legal costs), expenses, loss or damage occasioned by its failure to pay, or any delay in paying, such Asset Transfer Taxes, in each case on the basis that (i) 50.01% of any and all such amounts shall be for the account of Kosmos and (ii) 49.99% any and all such amounts shall be for the account of BP.
		

		
			15.4     Except as otherwise stated in this Agreement, each Party shall pay its own costs and expenses in relation to the preparation, execution and carrying into effect of this Agreement and all other documents entered into pursuant to, or in connection with, it.
		

		
			15.5     If, for United States federal income tax purposes, this Agreement and the operations under this Agreement are regarded as a partnership and if the Parties have not agreed to form a tax partnership, each Party elects to be excluded from the application of all of the provisions of Subchapter “K”, Chapter 1, Subtitle “A” of the United States Internal Revenue Code of 1986, as amended (the “Code”), to the extent permitted and authorized by Section 761(a) of the Code and the regulations promulgated under the Code.  JVCo, if it is a U.S. Party, is authorized and directed to execute and file for each Party such evidence of this election as may be required by the Internal Revenue Service, including all of the returns, statements, and data required by United States Treasury Regulations Sections 1.761-2 and 1.6031(a)-1(b)(5) and shall provide a copy thereof to each U.S. Party.  However, if JVCo is not a U.S. Party, the Party who holds the greatest Participating Interest among the U.S. Parties shall fulfill the obligations of JVCo under this Clause 15.5.  Should there be any requirement that any Party give further evidence of this election, each Party shall execute such documents and furnish such other evidence as may be required by the Internal Revenue Service or as may be necessary to evidence this election.
		

		
			

		 

		

			34

		

		

			 

		

 

		

		
			
		

		
			

		 

		

			35

		

		

			 

		

 

		

		
			15.6     No US Party shall give any notice or take any other action inconsistent with the foregoing election described at Clause 15.5.  If any income tax laws of any state or other political subdivision of the United States or any future income tax laws of the United States or any such political subdivision contain provisions similar to those in Subchapter “K”, Chapter 1, Subtitle “A” of the Code, under which an election similar to that provided by Section 761(a) of the Code is permitted, each Party shall make such election as may be permitted or required by such laws.  In making the foregoing election or elections, each U.S. Party states that the income derived by it from operations under this Agreement can be adequately determined without the computation of partnership taxable income. 
		

		
			15.7     Unless approved by every Non-U.S. Party, no activity shall be conducted under this Agreement that would cause any Non-U.S. Party to be deemed to be engaged in a trade or business within the United States under United States income tax laws and regulations.
		

		
			16        Contracts (Rights of Third Parties) Act 1999
		

		
			The Parties do not intend that any term of this Agreement should be enforceable, by virtue of the Contracts (Rights of Third Parties) Act 1999, by any person who is not a party to this Agreement.
		

		
			17        Counterparts
		

		
			This Agreement may be executed in any number of counterparts, and by the Parties on separate counterparts, but shall not be effective until each Party has executed at least one counterpart.  Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute but one and the same instrument.
		

		
			18        Miscellaneous
		

		
			18.1     Force Majeure
		

		
			If as a result of Force Majeure, any Party is rendered unable, wholly or in part, to carry out its rights or obligations under this Agreement, other than the obligation to pay any amounts due, then the rights or obligations of the Party giving such notice, so far as and to the extent that the rights or obligations are affected by such Force Majeure, shall be suspended during the continuance of any inability so caused and for such reasonable period thereafter as may be necessary for the Party to put itself in the same position that it occupied prior to the Force Majeure, but for no longer period.  The Party claiming Force Majeure shall notify the other Parties of the Force Majeure within a reasonable time after the occurrence of the facts relied on and shall keep all Parties informed of all significant developments. Such notice shall give reasonably full particulars of the Force Majeure and also estimate the period of time which the Party will probably require to remedy the Force Majeure.  The affected Party shall use all reasonable diligence to remove or overcome the Force Majeure situation as quickly as possible in a commercially reasonable manner but shall not be obligated to settle any labor dispute except on terms acceptable to it. All such disputes shall be handled within the sole 
		

		
			
		

		
			

		 

		

			36

		

		

			 

		

 

		

		
			discretion of the affected Party.  For the purposes of this Agreement, “Force Majeure” shall have the same meaning as is set out in the Contracts.
		

		
			18.2     BP Payment Default 
		

		
			If BP fails to make any payment (or part thereof) that becomes due and payable pursuant to the terms of this Agreement by the due date for payment it shall pay interest on such sum for the period from and including the due date up to the date of actual payment at the rate per annum which is the aggregate of the one (1) month term, London Interbank Offered Rate (LIBOR rate) for U.S. dollar deposits (as published in London by the Financial Times or if not published, then by The Wall Street Journal) and five (5) percentage points. The interest will accrue from day to day on the basis of the actual number of days elapsed and a 365-day year and shall be payable and compounded monthly.  If the aforesaid rate is contrary to any applicable usury law, the rate of interest to be charged shall be the maximum rate permitted by such applicable law.
		

		
			18.3     Relationship of Parties
		

		
			The rights, duties, obligations and liabilities of the Parties under this Agreement shall be individual, not joint or collective.  It is not the intention of the Parties to create, nor shall this Agreement be deemed or construed to create, a mining or other partnership, or association or a trust.  This Agreement shall not be deemed or construed to authorize any Party to act as an agent, servant or employee for any other Party for any purpose whatsoever except as explicitly set forth in this Agreement.  In their relations with each other under this Agreement, the Parties shall not be considered fiduciaries except as expressly provided in this Agreement.
		

		
			18.4     Joint Preparation
		

		
			Each provision of this Agreement shall be construed as though all Parties participated equally in the drafting of the same. Consequently, the Parties acknowledge and agree that any rule of construction that a document is to be construed against the drafting party shall not be applicable to this Agreement.
		

		
			18.5     Severance of Invalid Provisions
		

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

		
			
		

		
			

		 

		

			37

		

		

			 

		

 

		

		
			18.6     Assignment
		

		
			(A)      Subject to Clauses 18.6(B) and 18.6(C), there shall be no modification or assignment of this Agreement or the rights and obligations under it except by written consent of the Parties.
		

		
			(B)      BP shall be entitled to assign, novate or transfer its rights and obligations under this Agreement to a Wholly-Owned Affiliate of BP, and Kosmos shall sign any documentation reasonably required in order to effect such assignment, novation or transfer.
		

		
			(C)      Subject always to Clause 5.3(D), Kosmos shall be entitled to assign, novate or transfer its rights and obligations under this Agreement to a Wholly-Owned Affiliate of Kosmos, provided that any assignment, novation or transfer of any of Kosmos's obligations under this Agreement shall be subject to and conditional upon Kosmos having first delivered to BP a legally binding and enforceable guarantee from the ultimate parent company of Kosmos and the Wholly-Owned Affiliate (in a form reasonably acceptable to BP) guaranteeing the performance and payment of all obligations and liabilities of Kosmos under this Agreement. Subject to satisfaction of the requirements of this Clause, BP shall sign any documentation reasonably required in order to effect such assignment, novation or transfer. In the event that a Kosmos parent guarantee is delivered to BP in accordance with this Clause, the obligations of Kosmos under Clause 10.7 shall cease to apply from the effective date of such Kosmos parent guarantee.
		

		
			18.7     Priority 
		

		
			In the event of any conflict between the provisions of the main body of this Agreement and its Schedules or Exhibits, the provisions of the main body shall prevail. In the event of any conflict between the Schedules and the Exhibits, the provisions of the Schedules shall prevail.  In the event of any conflict between this Agreement and the Senegal Area JOAs, this Agreement shall prevail. In the event of any conflict between this Agreement and the Contracts, this Agreement shall prevail unless such would be in violation of the laws or regulations of the Republic of Senegal or the terms of the Contracts.
		

		
			18.8     Entirety
		

		
			With respect to the subject matter contained herein, this Agreement and the other agreements to be entered into pursuant to it constitute the entire agreement of the Parties; and supersede all prior understandings and negotiations of the Parties, including the confidentiality agreement made between the Parties dated 5 April 2016.
		

		
			19        Governing law and Dispute Resolution
		

		
			19.1     This Agreement, and any non-contractual rights or obligations arising out of or in connection with it or its subject matter, shall be governed by and construed in accordance with the laws of England and Wales, excluding any choice of law rules which would refer the matter to the laws of another jurisdiction.
		

		
			
		

		
			

		 

		

			38

		

		

			 

		

 

		

		
			19.2      (A)     Any and all claims, demands, causes of action, disputes, controversies and other matters in question arising out of or relating to this Agreement, including any question regarding its breach, existence, validity or termination, which the Parties do not resolve amicably within a period of twenty (20) days from the giving of a notice by one Party to the other Parties notifying the dispute, shall be resolved by three arbitrators in accordance with the Arbitration Rules of the International Chamber of Commerce. Each JV Partner shall appoint one arbitrator within thirty (30) days of the filing of the arbitration, and the two arbitrators so appointed shall select the presiding arbitrator within thirty (30) days after the latter of the two arbitrators have been appointed. If a JV Partner fails to appoint its appointed arbitrator or if the two appointed arbitrators cannot reach an agreement on the presiding arbitrator within the applicable time period, then the remainder of the three arbitrators not yet appointed shall be appointed in accordance with said Rules. The seat of arbitration shall be London, England.  The proceedings shall be in the English language.  The resulting arbitral award shall be final and binding, and judgment upon such award may be entered in any court having jurisdiction thereof.  A dispute shall be deemed to have arisen when either Party notifies the other Parties in writing to that effect.  Any monetary award issued by the arbitrator shall be payable in United States Dollars.  It is expressly agreed that the arbitrators shall have no authority to award special, indirect, consequential, exemplary or punitive damages.  The Parties waive any right to refer any question of law and any right of appeal on the law and/or merits to any court.
		

		
			(B)      All discussions, negotiations and arbitration conducted between the Parties under this Clause (including a settlement resulting from negotiation or an arbitral award, documents exchanged or produced during an arbitration proceeding, and memorials, briefs or other documents prepared for the arbitration) are confidential and may not be disclosed by the Parties, their employees, officers, directors, counsel, consultants, and expert witnesses, except (under Clause 13) to the extent necessary to enforce this Clause or any arbitration award, to enforce other rights of a Party, or as required by law or stock exchange; provided, however, that breach of this confidentiality provision shall not void any settlement or award.
		

		
			IN WITNESS WHEREOF the Parties have entered into this Agreement on the date set out on page 1 above.
		

			
					
						SIGNED by

					
						for and on behalf of

					
						Kosmos Energy Senegal

					
						 

					
					
						)

					
						)

					
					
						/s/ Jason E. Doughty

					
						..................................................

					
						JASON E. DOUGHTY

				
	
					
						SIGNED by

					
						for and on behalf of

					
						BP Indonesia Oil Terminal Investment Limited

					
						 

					
					
						)

					
						)

					
					
						/s/ Andrew Lane

					
						..................................................

					
						ANDREW LANE

				
	
					
						SIGNED by

					
						for and on behalf of

					
						Normandy Ventures Limited

					
					
						)

					
						)

					
					
						/s/ Jason E. Doughty

					
						..................................................

					
						JASON E. DOUGHTY

				

		
			

		 

		

			39

		

		

			 

		

 

		

		
			
		

		
			

		 

		

			40

		

		

			 

		

 

		

		
			SCHEDULE 1
		

		
			1          Acceptance of Prior Terms
		

		
			Subject to the Kosmos Warranties and applicable laws, JVCo hereby ratifies, confirms and accepts the terms of the Contract and the Senegal Area JOAs.
		

		
			2          Firm Work Programme (Exploration and Appraisal) and Firm Work Programme (Development)
		

		
			Notwithstanding articles 5.1.4, 5.6 and 6.7 of the Senegal Area JOAs, the Parties agree that JVCo shall  participate in the Firm Work Programme (Exploration and Appraisal) and Firm Work Programme (Development), unless otherwise mutually agreed.  The Parties agree that JVCo will support an amendment to the Work Program and Budget approved under the Senegal Area JOAs to accomplish the Firm Work Programme (Exploration and Appraisal) and Firm Work Programme (Development). 
		

		
			3          Obligations in Respect of Tortue Development and Senegal JOAs
		

		
			3.1       The Parties support the Tortue development concept for phase 1 proposed and supported by Kosmos and an indicative work program aimed to reach a final investment decision ("FID") by the end of 2017.  Notwithstanding the foregoing, in BP’s view the following key decisions for the first phase development of Tortue require study or screening for the potential full field development ("FFD") solution: (i) location of breakwater and pre-treatment facility; (ii) scope of phase 1 pre-treatment facility; (iii) breakwater configuration capable of expansion; and (iv) LNG cooling solution capable of expansion.  These key decisions will be informed by the following key activities: (i) metocean survey/ report results; (ii) G&G site survey results at breakwater and Tortue sites; (iii) agreement with third party contractors for liquefaction; (iv) FFD concept screening to allow expansion of LNG facilities; (v) FFD concept process safety, environmental studies and operations philosophy; and (vi) FFD flow assurance and water breakthrough risk mitigation studies.  BP proposes (and Kosmos agrees) that these key decisions and their supporting studies and surveys are completed by JVCo by the end of first quarter 2017 so they are able to feed into a prompt FID decision. For the avoidance of doubt, each Party shall have complete discretion (to be exercised as it sees fit) in how it exercises its vote or decision under the SHA in respect of the FID decision.
		

		
			3.2       The Parties shall cause JVCo to use reasonable endeavours to negotiate and agree with PETROSEN a revised joint operating agreement for each of the Saint-Louis Offshore Profond Block and the Cayar Offshore Profond Block to replace the Senegal Area JOAs on the basis of the 2012 model international joint operating agreement published by the Association of International Petroleum Negotiators, with a view to such revised joint operating agreement coming into force as soon as practicable.
		

		
			
		

		
			

		 

		

			41

		

		

			 

		

 

		

		
			4         Option to Sell LNG 
		

		
			4.1      Upon Second Completion, BP offers to work with JVCo and the other parties to the Interest Documents in a possible Tortue development, to develop a LNG marketing strategy and to use its experience and relationships in the market to jointly sell the LNG produced from the Tortue development.  BP is an experienced LNG industry player and already undertakes this role as the operator of other LNG projects also governed by a production sharing contract. 
		

		
			4.2      Additionally, BP’s LNG trading business will offer to purchase some or all of the LNG produced from the Tortue development on a free on board “FoB” basis through a long term LNG purchase agreement.  BP’s LNG trading business believes the natural market for this LNG is in Europe and would plan to offer to purchase on the basis of delivery to the European market. BP’s LNG trading business has industry leading trading capability and track record, and will attempt to divert purchased LNG cargos to other more attractive markets outside of Europe where possible, the benefits of any upside value achieved (net of shipping and regasification costs) will be shared equally between buyer and seller.
		

		
			4.3      The foregoing is subject to applicable law joint selling limitations.
		

		
			4.4      The provisions of this paragraph 4 shall only become effective upon the Second Completion Date.
		

		
			
		

		
			

		 

		

			42

		

		

			 

		

 

		

		
			SCHEDULE 2
		

		
			INTERIM PERIOD OBLIGATIONS
		

		
			During the Interim Period, Kosmos shall: 
		

		
			(A)      having notified BP in advance of the subject matter thereof, consult with BP in relation to any material decision (including any voting matter under the Interest Documents) in connection with the Interests (including decisions relating to the location and timing of any exploration wells), and take due consideration of BP’s representations in respect thereof;
		

		
			(B)      consult with BP in relation to the negotiation of a term sheet, charter agreement, tolling agreement and other definitive agreements with any third party contractors for the liquefaction services, and take due consideration of BP’s representations in respect thereof.  Additionally Kosmos will take all steps within its control to afford BP the opportunity to attend and participate in such negotiations;
		

		
			(C)      not incur, commit to incur or approve or amend any work programme, budget, expenditure or capital commitment relating to the Interests involving expenditure or agree to do any of the foregoing, in any case other than:
		

		
			(i)        any expenditure permitted and approved under the Senegal Area JOAs and disclosed to BP at the date of this Agreement; 
		

		
			(ii)       any expenditure required to carry out the Firm Work Programme (Exploration and Appraisal);
		

		
			(iii)      any expenditure required to carry out the Firm Work Programme (Development);
		

		
			(iv)      any such expenditure in respect of which BP has given its prior approval (not to be unreasonably withheld or delayed);
		

		
			(v)       any expenditure necessitated by any emergency (in which case Kosmos shall consult with BP to the extent practicable in the circumstances);
		

		
			(D)      conduct operations regarding the Initial Interests in the ordinary and usual course, past practice and with the intention that the same be protected and maintained in accordance with Good Industry Practice and all applicable laws;
		

		
			(E)      not (by act or omission) breach any of the provisions of the Contracts or Senegal Area JOAs or new agreements concluded in the Interim Period in accordance with this Schedule (and notify BP in a timely manner of any facts or circumstances of which it is aware or becomes aware which indicate that there has been a breach of any of the Contracts or Senegal Area JOAs by any other party or that such a breach by Kosmos has occurred);
		

		
			
		

		
			

		 

		

			43

		

		

			 

		

 

		

		
			(F)       take all steps within its control (and Kosmos shall procure that its Affiliates take all steps within their control) to maintain and renew all governmental licenses, permits, authorizations, consents and permissions necessary to own and operate the Initial Interests;
		

		
			(G)      not amend, terminate or replace any of the Contracts, Senegal Area JOAs or new agreements concluded in the Interim Period in accordance with this Schedule or waive or surrender any right or grant any consent thereunder, or agree to do any of the foregoing, without the written consent of BP (such consent not to be unreasonably withheld or delayed);
		

		
			(H)      not, without BP’s written consent (not to be unreasonably withheld or delayed), create any Encumbrance in relation to, sell, lease or otherwise dispose of all or any part of, the Interests, or purport to or agree to do any of the same;
		

		
			(I)        in respect of the Interests, not enter into or become a party to any new licenses, operating agreements, farm-in or farm-out agreements, unitization agreements, liquefaction agreements, charterparties, development agreement or any other agreement or undertaking or any of them (by whatever name called) or trade, relinquish, surrender, sell, assign, transfer or amend the Interests (or agree to do any of the foregoing in the future) without the prior written approval of BP (such approval not to be unreasonably withheld or delayed); and
		

		
			(i)        keep BP informed in a timely manner of all material matters in relation to the Interests,
		

		
			(ii)       to the maximum extent permitted by law and confidentiality obligations under agreements, provide BP with copies of all communications with the Government, Senegal Minister of Energy and Development of Renewable Energy Resources and PETROSEN in relation to the Interest Documents, 
		

		
			and Kosmos undertakes to notify BP in writing promptly if it or any of its Affiliates becomes aware of any circumstance arising after the date of the Agreement which is or is reasonably likely to result in a breach of any of the covenants in this Schedule.
		

		
			
		

		
			

		 

		

			44

		

		

			 

		

 

		

		
			SCHEDULE 3
		

		
			KOSMOS WARRANTIES
		

		
			Part 1 – Kosmos Asset Warranties
		

		
			1.         Incorporation and Capacity
		

		
			(A)      Kosmos is duly incorporated with limited liability and validly existing under the laws of the Cayman Islands.
		

		
			(B)      The documents which contain or establish Kosmos’s constitution incorporate provisions which authorise, and all necessary corporate action has been taken to authorise, Kosmos to execute and deliver this Agreement and perform the transaction contemplated by this Agreement, which Agreement will constitute legally binding obligations on Kosmos and not cause Kosmos to violate any applicable law, judgment, order, permit or any other agreement, consent or instrument binding on Kosmos.
		

		
			2.         Performance
		

		
			Subject to fulfilment of the Conditions, the signing and delivery of this Agreement and the performance of any of the transactions contemplated by this Agreement will not contravene or constitute a default under any provision contained in any agreement, instrument, law, judgment, order, licence, permit or consent by which Kosmos or any of its Affiliates or their respective assets is bound or affected or cause any limitation on Kosmos or the powers of its directors, whether imposed by or contained in any document which contains or establishes its constitution or in any law, order, judgment, agreement, instrument or otherwise to be exceeded and which would result in Kosmos being unable to perform its obligations under this Agreement.
		

		
			4.5       Solvency
		

		
			No order has been made, petition presented or meeting convened for the purpose of considering a resolution for the winding up or for the appointment of a liquidator or provisional liquidator of Kosmos.
		

		
			4.6       Sole Ownership
		

		
			(A)      Kosmos is a party to the Interest Documents and the sole legal and beneficial owner of the Initial Interests. Immediately after the Initial Asset Transfer Completion, JVCo shall be a party to the Interest Documents and the sole legal and beneficial owner of the Initial Interests free from Encumbrances.
		

		
			(B)      Kosmos will be the sole legal and beneficial owner of the TC Interests upon TC Asset Transfer Completion free from Encumbrances.
		

		
			
		

		
			

		 

		

			45

		

		

			 

		

 

		

		
			4.7       Right to Assign
		

		
			Following fulfilment of the Conditions, Kosmos will have the right, subject to Approval, to transfer and assign full legal and beneficial ownership of the Initial Interests to JVCo.
		

		
			4.8       No Encumbrance
		

		
			Subject to the provisions of the Interest Documents, no Encumbrance is in existence and in force over the Initial Interests nor, subject as aforesaid, is there in effect any agreement or commitment to create the same; nor are there any other matters which restrict Kosmos’s ability freely to dispose of the Initial Interests.
		

		
			4.9       Interests and Interest Documents
		

		
			(A)      Kosmos has not committed any breach of the Interest Documents nor received notice (in its role as operator under the Contracts and Senegal Area JOAs) and not otherwise aware that any of the other parties to any of the above-mentioned documents has committed any breach.
		

		
			(B)      The Initial Interests and all rights and interests of Kosmos thereunder or deriving therefrom are in full force and effect. Immediately after Initial Asset Transfer Completion, the Initial Interests and all rights and interests of JVCo thereunder or deriving therefrom are in full force and effect.
		

		
			(BB)    Immediately after TC Asset Transfer Completion, the TC Interests and all rights and interests of JVCo thereunder or deriving therefrom are in full force and effect.
		

		
			(C)      No notice has been given to Kosmos or, that Kosmos is aware of, to any party to the Interest Documents (other than Kosmos and JVCo) by the Government of any intention to terminate, amend or revoke the Contracts.
		

		
			(D)      No area under the Contracts is in the course of being surrendered or relinquished in whole or in part, and there is no proposal to do so.
		

		
			(E)       Kosmos has not given any notice of withdrawal from the Contracts.
		

		
			(F)       Kosmos is not aware of any facts which would have a material adverse impact on the value of the Interests.
		

		
			(G)      The Contracts are currently in the first renewal phase of the exploration period and no party to the Contracts has issued a notice under the Contracts to apply for an extension of any current Exploration Period (as defined in the Contracts) or for entry into a new phase of the Exploration Period.
		

		
			(H)      All guarantees required pursuant to the terms of the Contracts have been provided by Kosmos, accepted by the Government and are in full force and effect.
		

		
			
		

		
			

		 

		

			46

		

		

			 

		

 

		

		
			(I)        No vote to remove Kosmos in its capacity as operator under the Contracts or Senegal Area JOAs is pending or has been proposed, and Kosmos, in its capacity as operator under the Contracts or Senegal Area JOAs, has not intimated that it intends to resign as such.
		

		
			4.10     Not Used
		

		
			(A)      The Senegal Area is the accurate delineated area covering the Contracts and is not, in full or in part, subject to any competing or overlaying claim by a third party or group of parties.
		

		
			4.11     No Litigation
		

		
			(A)      Kosmos is not a party to any litigation or arbitration or administrative proceedings in respect of which a writ or summons or other formal pleading has been served or judgement issued, nor is there any claim (whether or not formulated within a formal pleading as aforesaid) or dispute in relation to, and which is likely materially to prejudice or detrimentally affect in any manner, the Interests, and Kosmos is not aware that any such litigation, arbitration, administrative proceedings, claim or dispute are threatened or pending either by or against Kosmos, and there are no facts known to Kosmos which are likely to give rise to any claim or dispute which is likely  so to prejudice or detrimentally affect in any manner the Interests, and none of the parties to the Interest Documents is a party to any litigation, arbitration or administrative proceedings or any claim or dispute or judgment in relation to, and which is likely to prejudice or detrimentally affect in any manner, the Interests.
		

		
			(B)      There are no overlaps, competing claims or disputes in relation to the Senegal Area from any third party.
		

		
			4.12     Insurance
		

		
			(A)      The insurance policies maintained by Kosmos in respect of the Initial Interests have at all material times afforded to Kosmos adequate cover against such risks as companies carrying on the same type of business as Kosmos commonly cover, and the full terms of all such insurance policies are included in the Disclosure Documents.
		

		
			(B)      All premiums due in respect of those insurance policies have been fully paid and there are no circumstances which may lead to liability under any such insurances being avoided by the insurers and none of the insurances is subject to any special or unusual terms or restrictions.
		

		
			(C)      No claim is outstanding under any of the insurances and no circumstances exist which are likely to give rise to any such claim.
		

		
			
		

		
			

		 

		

			47

		

		

			 

		

 

		

		
			4.13     Interest Documents
		

		
			The Interest Documents are the only documents of which Kosmos is aware which govern or relate to the creation, existence and validity of the Interests and are the only agreements to which Kosmos is party relating to the Interests, and Kosmos has made available to BP accurate and complete copies of the Interest Documents, save that, where Kosmos has provided any translation of a document, Kosmos has done so as a courtesy to BP and Kosmos makes no warranty as to the accuracy of such translation. 
		

		
			4.14     Provision of Information
		

		
			(A)      Kosmos has in its possession or has access to all Data and information relating to the Interests (including complete copies of all material geological, geophysical, well and field development data and any other information in the possession of Kosmos or any of its Affiliates relating to the evaluation of the proven, probable and possible reserves in the Senegal Area and on reservoir volume and performance) to which it is entitled under the terms of the Interest Documents and all such Data and information is included in the Disclosure Documents.
		

		
			(B)      Each Answer is true and accurate in every material respect.
		

		
			4.15     No Force Majeure
		

		
			Kosmos is not aware of any force majeure event or other event which would excuse or has excused performance of any of the obligations of Kosmos which have arisen under any of the Interest Documents and this Agreement.
		

		
			4.16     Tax
		

		
			(A)      Kosmos has, since it acquired the Initial Interests, complied with all statutory requirements, regulations, orders, provisions, directions or conditions in relation to the Initial Interests concerning Tax including the making on time of accurate returns and payments and the proper maintenance and preservation of records and Kosmos has not been given any penalty, notice or warning regarding the same.
		

		
			(B)      Kosmos is not involved in any dispute, and is not the subject of any enquiries, with any Tax authority or any other appropriate fiscal authority, whether of the Republic of Senegal or elsewhere, concerning any matter likely to affect the Interests in any way other than routine enquiries of a minor nature following the submission of computations and returns.
		

		
			(C)      All documents under which Kosmos derives title to the Initial Interests and which attract transfer tax have been duly stamped, if required, and are in the possession of Kosmos or under its control.
		

		
			(D)      All documents under which Kosmos derives title to the TC Interest on the TC Option Completion Date and which attract transfer tax have been duly stamped, if required, and are in the possession of Kosmos or under its control.
		

		
			
		

		
			

		 

		

			48

		

		

			 

		

 

		

		
			4.17     Environmental
		

		
			(A)      Kosmos has not been notified of the occurrence of any environmental incident concerning the Interests and operations related thereto.
		

		
			(B)      Kosmos has not received any demands, notices, orders or directives under any environmental laws, whether or not with respect to any breach thereof, nor in relation to any environmental liabilities which require any remedial work, clean up or any other such work, repairs, construction or capital expenditures with respect to the Interests or the operations related thereto or use or ownership thereof which have not been fully complied with.
		

		
			(C)      No complaint has been filed by any governmental department, body or agency or any non-governmental group or organization in respect of the Initial Interests concerning any environmental damage, injury, alleged damage or breach of any legislation, rules, regulations and orders relating to the environment.
		

		
			4.18     Bribery and Anti-Corruption
		

		
			(A)      Neither Kosmos nor any of its Affiliates nor their respective Associated Persons:
		

		
			(i)        has been, is or will be engaged in any activity, practice or conduct related to the Interest Documents or to this Agreement that would constitute a violation of the Anti-Corruption Laws and Obligations either with respect to itself or with respect to BP;
		

		
			(ii)       has paid, offered, promised or authorized the payment, directly or indirectly, of any monies or anything of value to any Government Official (as defined in the Senegal Area JOAs), for the purpose of improperly influencing any act or decision of such Government Official or improperly inducing such Government Official to use his or her influence with a government or instrumentality thereof to obtain or retain business or direct business to any person in connection with the Interest Documents or this Agreement; or 
		

		
			(iii)      Kosmos is not aware that it is the subject of any investigation, inquiry or enforcement proceedings by any government, administrative or regulatory body regarding any offence or alleged offence under the Anti-Corruption Laws and Obligations related to the Interest Documents or this Agreement, and no such investigation, inquiry or proceedings has been threatened, and there are no circumstances likely to give rise to any such investigation, inquiry or proceedings.  Kosmos has made BP aware of an inquiry undertaken by the Senegalese National Anti-Corruption and Fraud Office (OFNAC) which, in Kosmos’s understanding and belief, does not amount to an investigation or inquiry in which Kosmos is the subject.
		

		
			(B)      Kosmos is not aware after due inquiry, that any person:
		

		
			
		

		
			

		 

		

			49

		

		

			 

		

 

		

		
			(i)        has engaged in any activity, practice or conduct related to the Interest Documents or to this Agreement that would violate the terms of the Anti-Corruption Laws and Obligations, even if that person is outside the jurisdiction or scope of those laws; 
		

		
			(ii)       has paid, offered, promised or authorized the payment, directly or indirectly, of any monies or anything of value to any Government Official, for the purpose of improperly influencing any act or decision of such Government Official or improperly inducing such Government Official to use his or her influence with a government or instrumentality thereof to obtain or retain business or direct business to any person in connection with the Interest Documents or this Agreement.
		

		
			(C)      No principal, shareholder (or other equity holder), director, officer or employee of Kosmos is or will become during the term of this Agreement a Government Official in the Republic of Senegal.
		

		
			4.19     No Fees
		

		
			Kosmos has not incurred any obligation or entered into any agreement for any investment banking, brokerage, finder’s fee, commission, agency or similar payment in respect of any transaction contemplated by this Agreement for which BP or JVCo may incur any liability.
		

		
			4.20     Operator
		

		
			(A)      All material permits and licences required to carry out Joint Operations (as defined under the Contracts) are held by Kosmos as operator and valid and subsisting and there has been no material violation thereof.
		

		
			(B)      Kosmos as operator has complied with the Contracts and all applicable laws (including environmental laws) in carrying out the Joint Operations (as defined under the Contracts).
		

		
			(C)      No sole risk activities (as defined under the Senegal Area JOAs) have been approved under the Interest Documents and no notices have been received for sole risk activities, or so far as the Kosmos as operator is aware, are likely to be issued. 
		

		
			4.21     Timis Corporation 
		

		
			No cash payment has been made by, or on behalf of, Kosmos or JVCo to Timis Corporation and, following exercise of the TC Option, JVCo will have no liability to Timis Corporation save in respect of the obligation to carry Timis Corporation in respect of Timis Corporation’s remaining interest share of the first one hundred and twenty million Dollars (US$120,000,000) of gross costs (including all general and administration costs and expenses (G&A)) to drill one well exploration well or appraisal well (including testing) in the Senegal Area for which JVCo will be liable.
		

		
			
		

		
			

		 

		

			50

		

		

			 

		

 

		

		
			Part 2 – Kosmos Share Warranties
		

		
			4.21     Kosmos further warrants to BP at the date of this Agreement that:
		

		
			(A)       JVCo is validly incorporated, in existence and duly registered;
		

		
			(B)       Kosmos is the sole legal and beneficial owner of the Sale Shares;
		

		
			(C)       there is no Encumbrance on, over or affecting the Sale Shares;
		

		
			(D)       there is no agreement or commitment outstanding which calls for the allotment, issue or transfer of, or accords to any person the right to call for the allotment, issue or transfer of, any shares (including Ordinary Shares) or debentures in or securities of JVCo;
		

		
			(E)       the copy of the articles of association of JVCo provided to BP on or before the date of this Agreement is complete and accurate in all respects and fully sets out the rights and restrictions attaching to the share capital of JVCo;
		

		
			(F)       No order has been made, petition presented or meeting convened for the purpose of considering a resolution for the winding up or for the appointment of a liquidator or provisional liquidator of JVCo.
		

		
			(F)       the statutory books (including all registers and minute books) of JVCo have been properly kept and contain an accurate and complete record of the matters which should be dealt with in those books and no notice or allegation that any of them is incorrect or should be rectified has been received; 
		

		
			(G)      all documents which should have been delivered by JVCo to the Registrar of Companies in England and Wales have been properly so delivered; and
		

		
			(H)      JVCo has not conducted any business or entered into any contracts or commitments, and has no assets, obligations or liabilities, save for those arising out of or in connection with its incorporation, this Agreement, the Initial Asset Transfer Agreement or the TC Asset Transfer Agreement.
		

		
			
		

		
			

		 

		

			51

		

		

			 

		

 

		

		
			SCHEDULE 4
		

		
			BP Warranties
		

		
			1          Incorporation and Capacity
		

		
			1.1       BP is duly incorporated with limited liability and validly existing under the laws of England and Wales.
		

		
			1.2       The documents which contain or establish BP’s constitution incorporate provisions which authorize, and all necessary corporate action has been taken to authorize, BP to execute and deliver this Agreement and perform the transaction contemplated by this Agreement, which agreement will constitute legally binding obligations on BP and not cause BP to violate any applicable law, judgment, order, permit or any other agreement, consent or instrument binding on BP.
		

		
			2          Performance
		

		
			Subject to fulfilment of the Conditions, the signing and delivery of this Agreement and the performance of any of the transactions contemplated by this Agreement will not contravene or constitute a default under any provision contained in any agreement, instrument, law, judgment, order, licence, permit or consent by which BP or any of its Affiliates or their respective assets is bound or affected or cause any limitation on BP or the powers of its directors, whether imposed by or contained in any document which contains or establishes its constitution or in any law, order, judgment, agreement, instrument or otherwise to be exceeded and which would result in BP being unable to perform its obligations under this Agreement.
		

		
			3          Solvency
		

		
			No order has been made, petition presented or meeting convened for the purpose of considering a resolution for the winding up or for the appointment of a liquidator or provisional liquidator of BP.
		

		
			4          No Litigation
		

		
			No litigation, arbitration, administrative proceeding, dispute or judgment against BP or to which BP is a party which might by itself or together with any such other proceedings have a material adverse effect on its business, assets or condition and which would materially and adversely affect its ability to observe or perform its obligations under this Agreement and the transactions contemplated hereby, is subsisting or threatened or pending against BP or any of its assets.
		

		
			5         Anti Bribery and Corruption
		

		
			5.1       Neither BP nor any of its Affiliates nor their respective Associated Persons:
		

		
			(A)      has been, is or will be engaged in any activity, practice or conduct related to the Interest Documents or to this Agreement that would constitute a violation of the 
		

		
			
		

		
			

		 

		

			52

		

		

			 

		

 

		

		
			Anti-Corruption Laws and Obligations either with respect to itself or with respect to Kosmos or JVCo;
		

		
			(B)      has paid, offered, promised or authorized the payment, directly or indirectly, of any monies or anything of value to any Government Official (as defined in the Senegal Area JOAs), for the purpose of improperly influencing any act or decision of such Government Official or improperly inducing such Government Official to use his or her influence with a government or instrumentality thereof to obtain or retain business or direct business to any person in connection with the Interest Documents or this Agreement; or 
		

		
			(C)      BP is not aware that it is the subject of any investigation, inquiry or enforcement proceedings by any government, administrative or regulatory body regarding any offence or alleged offence under the Anti-Corruption Laws and Obligations related to the Interest Documents or this Agreement, and no such investigation, inquiry or proceedings has been threatened, and there are no circumstances likely to give rise to any such investigation, inquiry or proceedings.  Kosmos has made BP aware of an inquiry undertaken by the Senegalese National Anti-Corruption and Fraud Office (OFNAC) which, in Kosmos’s understanding and belief, does not amount to an investigation or inquiry in which Kosmos is the subject.
		

		
			5.2       No principal, shareholder (or other equity holder), director, officer or employee of BP is or will become during the term of this Agreement a Government Official in the Republic of Senegal.
		

		
			6          No Fees
		

		
			BP has not incurred any obligation or entered into any Agreement for any investment banking, brokerage, finder’s fee, commission, agency or similar payment in respect of any transaction contemplated by this Agreement for which Kosmos may incur any liability.
		

		
			
		

		
			

		 

		

			53

		

		

			 

		

 

		

		
			EXHIBIT A
		

		
			Part 1
		

		
			Firm Work Programme (Exploration and Appraisal)
		

		
			1         Exploration Wells
		

		
			1.1      One  Exploration Well to target outboard basin floor fan fairways in the Senegal Area.
		

		
			(A)      The Exploration Well to be drilled to the top of 106_Albian
		

		
			2         DST
		

		
			A drill stem test (“DST”) within the Tortue Discovery Area, provided the DST may be satisfied in Mauritania
		

		
			3         Wells and Schedule
		

		
			3.1      The objective, design and duration of each Exploration Well and the DST to be determined pursuant to the Senegal Area JOAs, BP, Kosmos and JVCo to consult, including with the Steering Committee, if necessary, on all recommendations to the Operating Committee
		

		
			3.2      It is anticipated that the drilling and testing program for the Exploration Wells and the DST will be continuous and conducted in an agreed order.
		

		
			3.3      The program will commence in 2017, unless mutually agreed otherwise by BP and Kosmos.  If for technical reasons beyond the Parties control the entire program cannot be completed in 2017, then the program will be completed as soon thereafter as practicable.
		

		
			
		

		
			

		 

		

			54

		

		

			 

		

 

		

		
			EXHIBIT A
		

		
			Part 2
		

		
			Firm Work Programme (Development)
		

		
			1          Development Studies
		

		
			1.1       JVCo in cooperation with the Mauritania Operator, without duplication of efforts or costs, shall conduct the following activities:
		

		
			(A)      Studies to establish (a) location of breakwater and pre-treatment facility; (b) scope of phase 1 pre-treatment facility; (c) breakwater configuration capable of expansion; and (d) LNG cooling solution capable of expansion
		

		
			(B)      metocean survey/ report results; 
		

		
			(C)      G&G site survey results at breakwater and Tortue sites; 
		

		
			(D)      Negotiate and finalize  all agreements required with third party contractors on FLNG vessel(s);
		

		
			(E)      concept screening to allow expansion of LNG facilities; 
		

		
			(F)      concept process safety, environmental studies and operations philosophy; 
		

		
			(G)      flow assurance and water breakthrough risk mitigation studies; and
		

		
			(H)      Any other activities or studies to enable an investment decision on Tortue by the end of 2017.
		

		
			2          Schedule
		

		
			JVCo in cooperation with the Mauritania Operator, without duplication of efforts or costs, will aim to complete this program by the end of first quarter 2017 to enable an investment decision on Tortue by the end of 2017.
		

		
			
		

		
			

		 

		

			55

		

		

			 

		

 

		

		
			EXHIBIT B
		

		
			ABC Obligations
		

		
			1          Neither Party nor any of its Affiliates nor their respective Associated Persons:
		

		
			(A)      has been, is or will be engaged in any activity, practice or conduct related to the Interest Documents or to this Agreement that would constitute a violation of the Anti-Corruption Laws and Obligations either with respect to itself or with respect to the other Parties;
		

		
			(B)      has paid, offered, promised or authorized, or will pay, offer, promise or authorize, the payment, directly or indirectly, of any monies or anything of value to any Government Official (as defined in the Senegal Area JOAs), for the purpose of improperly influencing any act or decision of such  Government Official or improperly inducing such Government Official to use his or her influence with a government or instrumentality thereof to obtain or retain business or direct business to any person in connection with the Interest Documents or this Agreement; or 
		

		
			(C)      has been or is  the subject of any investigation, inquiry or enforcement proceedings by any government, administrative or regulatory body regarding any offence or alleged offence under the Anti-Corruption Laws and Obligations related to the Interest Documents or this Agreement, and no such investigation, inquiry or proceedings has been or will be threatened, and to the best of such Party’s knowledge, information and belief (after making reasonable enquiries) there are no circumstances likely to give rise to any such investigation, inquiry or proceedings.  Both Parties are aware of an inquiry undertaken by the Senegalese National Anti-Corruption and Fraud Office (OFNAC) which, in both Parties’ understanding and belief, does not amount to an investigation or inquiry in which a Party is the subject.
		

		
			2          Each Party shall as soon as possible notify the other Parties of any suspected violations, including any investigation or proceeding initiated by a governmental authority relating to an alleged violation of applicable Anti-Corruption Laws and Obligations by such Party, or its Affiliates, or any Associated Persons, concerning operations and activities under the Senegal Area JOAs and the Contracts. Such Party shall use reasonable efforts to keep the other Parties informed as to the progress and disposition of such investigation or proceeding, except that such Party shall not be obligated to disclose to the other Parties any information that would be considered legally privileged. 
		

		
			3          Each Party shall defend, indemnify and hold harmless the other Parties for any claims, damages, losses, penalties, costs (including reasonable legal costs and attorneys’ fees), and liabilities arising from, or related to: 
		

		
			(A)      any breach by such Party of the warranties and undertakings set out in paragraph 1; 
		

		
			
		

		
			

		 

		

			56

		

		

			 

		

 

		

		
			(B)      such Party’s admission of allegations made by a governmental authority concerning operations and/or activities under this Agreement or the Interest Documents [(or any agreements relating thereto)] that such Party or its Associated Persons have violated Anti-Corruption Laws and Obligations applicable to such Party; or 
		

		
			(C)      the final adjudication concerning operations and/or activities under this Agreement or the Interest Documents (or any agreements relating hereto) that such Party or its Affiliates or their directors, officers, employees and personnel have violated Anti-Bribery Laws and Obligations applicable to such Party, such indemnity obligations shall survive termination or expiration of this Agreement.  
		

		
			4          Each Party undertakes to each other Party that, to the extent it has not already done so, it shall: 
		

		
			(A)      Devise and maintain adequate internal controls concerning such Party’s undertakings under paragraph 1; 
		

		
			(B)      design, implement and maintain comprehensive, “best practice” written policies, resources and procedures to ensure compliance with applicable Anti-Corruption Laws and Obligations and which will address, without limitation, sponsorship and donations, gifts and entertainment, hosting of Public Officials, anti-money laundering, whistle-blowing and responding to demands for improper payments or allegations of bribery, in each case in connection with the activities and operations conducted under or in relation to the Interest Documents and this Agreement (“Anti-Corruption Policies”); and
		

		
			(C)      Retain books and records evidencing compliance with these paragraphs 1 -7 for a period of at least six (6) Calendar Years. 
		

		
			5          Each Party shall promptly respond in reasonable detail to any reasonable request from any other Party concerning a notice sent by such Party under paragraph 2 and shall furnish applicable documentary support for such Party’s response, including showing such Party’s compliance with the undertakings set out in paragraph 1.
		

		
			6          Each Party warrants that in connection with the Joint Operations it shall obligate any contractor, including but not limited to any sub-agent, representative or other service provider it may engage, that:
		

		
			(A)      it will conduct appropriate due diligence prior to appointing or engaging such contractor to reasonably assure itself that they are duly qualified to perform the tasks for which they will be engaged and that they are of good reputation; and
		

		
			(B)      it will impose and secure from the contractor when appropriate given the risk, in writing compliance with the Anti-Corruption Laws and Obligations or a similar obligation.
		

		
			
		

		
			

		 

		

			57

		

		

			 

		

 

		

		
			7          Each Party undertakes to the other Party that, from time to time and at the reasonable request of each other Party, it shall:
		

		
			(A)      provide written certification (by providing a certificate of compliance in the form agreed between the Parties and attached at Appendix A and signed by its authorized representative)) that it has complied with its undertakings under paragraph 1; and
		

		
			(B)      in support of such compliance, provide the other Party with reasonable access to its personnel and to the facilities, warehouses and offices directly or indirectly serving the operation of the Senegal Area JOAs and the Contracts and the books, records and other information relating to the Senegal Area JOAs and the Contracts, together with the right, where reasonably requested, to make and retain copies of such books, records and information.
		

		
			
		

		
			

		 

		

			58

		

		

			 

		

 

		

		
			Appendix A to Exhibit B
		

		
			FORM OF CERTIFICATE OF ANTI-BRIBERY COMPLIANCE
		

		
			[Certifying Party Letterhead]
		

		
			To:      [.......................], [.......................], [.......................], and [.......................]
		

		
			Re:      Periodic Certification
		

		
			Dear Sir,
		

		
			Pursuant to paragraph 7 of Exhibit M of the Sale and Purchase Agreement dated [.......................] between Kosmos Energy Senegal, [JVco] Limited and BP ____________ (“Agreement”), the undersigned hereby confirms that throughout the twelve (12) months ending 31st December [.......................], [Certifying Party], its Affiliates and their respective directors, officers, employees and personnel, have complied with their warranties and covenants set out in paragraph 1 of Exhibit B of the Agreement.
		

		
			The certificate is issued by the undersigned duly authorized representative for and on behalf of [Certifying Party] to the best of his or her knowledge after having made due enquiry as to the matters set out above, but without personal liability on the part of such authorized representative.
		

		
			Yours faithfully,
		

		
			Name and Title:...................................................................................................
		

		
			[an executive director or officer of Certifying Party]
		

		
			
		

		
			

		 

		

			59

		

		

			 

		

 

		

		
			EXHIBIT C
		

		
			ELIGIBLE DISCOVERY
		

		
			Part 1
		

		
			Tortue Discovery Area
		

		
			
		

		
			
		

		
			

		 

		

			60

		

		

			 

		

 

		

		
			EXHIBIT C
		

		
			ELIGIBLE DISCOVERY
		

		
			Part 2
		

		
			Teranga Discovery Area
		

		
			
		

		
			
		

		
			

		 

		

			61

		

		

			 

		

 

		

		
			EXHIBIT D
		

		
			SENEGAL AREA
		

		
			
		

		
			
		

		
			

		 

		

			62

		

		

			 

		

 

		

		
			EXHIBIT E
		

		
			Not Used
		

		
			
		

		
			

		 

		

			63

		

		

			 

		

 

		

		
			EXHIBIT F
		

		
			FORM OF ASSET TRANSFER AGREEMENT
		

		
			[To be provided]
		

		
			
		

		
			

		 

		

			64

		

		

			 

		

 

		

		
			EXHIBIT G
		

		
			Questions and Answers
		

		
			[See Attached]
		

		
			
		

		
			

		 

		

			65

		

		

			 

		

 

		

		
			EXHIBIT I
		

		
			Guarantees
		

		
			Part 1 – Guarantee of BP payment obligations under this Agreement
		

		
			
		

		
			

		 

		

			66

		

		

			 

		

 

		

		
			DATED                                         20[  ]
		

		
			BP ENTITY
		

		
			in favour of
		

		
			KOSMOS ENERGY SENEGAL
		

		

		
			GUARANTEE
		

		
			relating to payment obligations of [BP entity] under a sale and purchase agreement dated [ ] December 2016 relating to the sale and purchase of shares in [JVCo] Limited
		

		

		
			
		

		
			

		 

		

			67

		

		

			 

		

 

		

		
			CONTENTS
		

		
			1.      Definitions and Interpretation
		

		
			2.      Guarantee
		

		
			3.      Limitation on Exercise of Guarantor’s Rights
		

		
			4.      Valid Demand under the Guarantee
		

		
			5.      Costs and Expenses
		

		
			6.      No Implied Waivers
		

		
			7.      Amendment to the Agreement
		

		
			8.      Release and Discharge
		

		
			9.      Assignment and Transfer
		

		
			10.    Communications
		

		
			11.    Third Party Rights
		

		
			12.    Governing Law and Jurisdiction
		

		
			
		

		
			

		 

		

			68

		

		

			 

		

 

		

		
			THIS GUARANTEE is made as a Deed the                  day of 20[ ]
		

		
			By:
		

		
			(1)      [BP Exploration Operating Company], a company incorporated in England whose registered office is at [Chertsey Road, Sunbury on Thames, Middlesex TW16 7BP] (the "Guarantor")
		

		
			in favour of:
		

		
			(2)      KOSMOS ENERGY SENEGAL a company incorporated in the Cayman Islands  (the “Beneficiary”)
		

		
			WHEREAS:
		

		
			(A)     The Beneficiary and [INSERT LEGAL NAME OF BP ENTITY WHOSE OBLIGATIONS ARE BEING GUARANTEED] ("BP”), a wholly-owned [direct/indirect] subsidiary of the Guarantor have entered into a sale and purchase agreement dated [ ] December 2016 relating to the sale and purchase of shares in [JVCo] Limited (the "Agreement"); and
		

		
			(B)     The Guarantor has agreed to guarantee for the benefit of the Beneficiary the payment obligations of BP under the Agreement under the terms of conditions of this Guarantee.
		

		
			(C)     The Guarantor and the Beneficiary intend this document to take effect as a deed (even though the Beneficiary may only execute it under hand).
		

		
			NOW THIS DEED PROVIDES as follows.
		

		
			1.        DEFINITIONS AND INTERPRETATION
		

		
			1.1      Definitions
		

		
			In this Guarantee, unless the context otherwise requires:
		

		
			[“Maximum Aggregate Liability” means the Consideration payable under the Agreement and any enforcement costs arising pursuant to this Guarantee.] 
		

		
			“Valid Demand” means a demand issued by the Beneficiary in accordance with Clause 4.
		

		
			1.2      Interpretation of certain references
		

		
			(a)      A reference to a “Clause” is a reference to a clause in this Guarantee.
		

		
			(b)      This “Guarantee” includes this Guarantee as amended, supplemented, novated, restated or replaced by any document from time to time and any document which amends, supplements, novates, restates or replaces this Guarantee.
		

		
			(c)      A “law” includes common or customary law and any constitution, decree, judgment, legislation, order, ordinance, regulation, statute, treaty or other legislative measure, in each case of any jurisdiction whatever.
		

		
			
		

		
			

		 

		

			69

		

		

			 

		

 

		

		
			(d)      Any “obligation” of any Person under this Guarantee or any other document referenced herein is a reference to an obligation expressed to be assumed by that 
		

		
			Person or imposed on that Person under this Guarantee or that other document, as the case may be.
		

		
			(e)      A “Person” includes any individual, company, corporation, firm, partnership, joint venture, association, organisation, trust, state or agency of a state.
		

		
			2.       GUARANTEE
		

		
			2.1     Guarantee
		

		
			As consideration for the Beneficiary’s entry into the Agreement and subject to Clause 2.2, the Guarantor hereby irrevocably and unconditionally guarantees for the benefit of the Beneficiary, that if BP defaults in the payment of any sum due and payable by BP to the Beneficiary under the Agreement, calculated in accordance with the terms of the Agreement, allowing for set-offs or other defences which could have been asserted under the Agreement by BP, the Guarantor shall, within 30 days of receipt of a Valid Demand by the Beneficiary, pay to the Beneficiary such sum (the “Guaranteed Obligations”).
		

		
			2.2     Maximum Aggregate Liability
		

		
			[The Guarantor’s liability to pay the Beneficiary under this Guarantee in aggregate shall not exceed the Maximum Aggregate Liability.]
		

		
			2.3     Guarantor as Principal Debtor
		

		
			As between the Guarantor and the Beneficiary but without affecting BP’s obligations, the Guarantor shall be liable under this Guarantee as if it were the sole principal debtor and not merely a surety. Accordingly, the liability of the Guarantor under this Guarantee shall not be released, affected or discharged by any act, matter or omission which (but for this clause) would have released, affected or discharged the liability of the Guarantor including:
		

		
			(a)      subject to Clause 7, any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of, or any consent to departure from, the terms of such Guaranteed Obligations including but not limited to the grant of time, concession or other indulgence to BP by the Beneficiary or concurring in, accepting or varying any compromise, arrangement or settlement or omitting to claim or enforce payment from a principal debtor or any other Person; or
		

		
			(b)      any present or future guarantee, indemnity, mortgage, charge or other security or right or remedy held by or available to the Beneficiary being or becoming wholly or in part void, voidable or unenforceable on any ground whatsoever or by the Beneficiary from time to time dealing with, varying, realising, releasing or failing to perfect or enforce any of the same; or
		

		
			
		

		
			

		 

		

			70

		

		

			 

		

 

		

		
			(c)      any invalidity, unenforceability, illegality or voidability of the Agreement;  or
		

		
			(d)      any change, restructuring or termination of the corporate structure or existence of BP or the bankruptcy, insolvency, dissolution, reorganisation, moratorium, liquidation or similar proceeding involving BP.
		

		
			2.4      Guarantor’s Obligations Additional
		

		
			This Guarantee shall be in addition to and not in substitution for any other rights, remedy, security or guarantees which the Beneficiary may now or hereafter hold from or on account of BP in respect of BP's obligations under the Agreement and may be enforced without first having recourse to such other rights, remedy, security or guarantees.
		

		
			2.5      Guarantor’s Obligations Continuing
		

		
			The Guarantor’s obligations under this Guarantee are and remain in full force and effect by way of continuing security:
		

		
			(a)      until the earlier of the following:
		

		
			(i)      all sums payable by BP to the Beneficiary under the Agreement have been paid in full; and
		

		
			(ii)     [the Guarantor has paid under this Guarantee an aggregate sum equal to the Maximum Aggregate Liability]; and
		

		
			(b)      notwithstanding absorption, amalgamation or any other changes in the Guarantor’s constitution.
		

		
			2.6      Avoidance of Payments
		

		
			If all or part of any payment received or recovered by the Beneficiary in respect of the Guaranteed Obligations is, on the subsequent bankruptcy, insolvency, corporate reorganisation or other similar event of BP, avoided or set aside under any laws relating to bankruptcy, insolvency, corporate reorganisation or other such similar events, and the amount of such payment is required to be refunded to BP or other persons entitled through BP, such payment shall not be considered as discharging or diminishing the liability of the Guarantor and this Guarantee shall continue to apply as if such amount had at all times remained owing by BP.
		

		
			3.       LIMITATION ON EXERCISE OF GUARANTOR’S RIGHTS
		

		
			Notwithstanding any payment or payments made by the Guarantor hereunder, so long as any Guaranteed Obligation remains outstanding:
		

		
			(a)      the Guarantor hereby irrevocably waives any right of subrogation to the rights of the Beneficiary against BP and any right to be reimbursed or indemnified by BP or by any other guarantor of all or any part of the Guaranteed Obligations; and
		

		
			(b)      if, notwithstanding the foregoing, any amount is received or recovered by the Guarantor as a result of exercising such rights, such amount shall be held by 
		

		
			
		

		
			

		 

		

			71

		

		

			 

		

 

		

		
			the Guarantor in trust for the Beneficiary and shall, forthwith upon receipt by the Guarantor, be paid to the Beneficiary, to be applied against the Guaranteed Obligations in such order as the Beneficiary may determine.
		

		
			4.       DEMAND UNDER THE GUARANTEE
		

		
			Any demand made of the Guarantor under this Guarantee shall:
		

		
			(A)      be made by notice in writing (which notice may not be sent before any grace periods and periods of remediation applicable to the relevant default by BP provided in the Agreement shall have elapsed) stating the reasons for making such demand, identifying the payment obligations under the Agreement which BP has defaulted, and setting out a calculation of the amount owing by BP and under demand; and
		

		
			(B)      be delivered or sent by post or facsimile to the Guarantor at its address as provided under Clause 10.
		

		
			5.       COSTS AND EXPENSES
		

		
			The Guarantor shall pay the Beneficiary within 30 days of written notice all costs and expenses reasonably incurred by the Beneficiary in connection with the enforcement or preservation of its rights hereunder[, provided that in no event shall the Guarantor be liable  to pay any sum where imposition of such liability would result in the Guarantor’s aggregate liability under this Guarantee exceeding the Maximum Aggregate Liability].
		

		
			6.       NO IMPLIED WAIVERS
		

		
			Except as to applicable statutes of limitation, no failure on the part of the Beneficiary to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.
		

		
			7.       RELEASE AND DISCHARGE
		

		
			Subject to Clause 2.5, the Beneficiary undertakes, upon the Guarantor’s request, to:
		

		
			(i)      sign and execute such deeds or instruments as the Guarantor may reasonably require in order to give effect to a discharge of the Guarantor’s obligations under this Guarantee; and
		

		
			(ii)     return the original of this Guarantee to the Guarantor following such discharge.
		

		
			8.       ASSIGNMENT AND TRANSFER
		

		
			(a)      Burden and Benefit
		

		
			
		

		
			

		 

		

			72

		

		

			 

		

 

		

		
			This Guarantee shall be binding upon the Guarantor, its successors and assigns and shall inure to the benefit of the Beneficiary, its successor and assigns.  Any reference in this Guarantee to the Guarantor and the Beneficiary shall be construed to refer to its relevant successors and assigns accordingly.
		

		
			(b)      Transfer by Guarantor
		

		
			The Guarantor shall not (without the prior written consent of the Beneficiary, such consent not to be unreasonably withheld or delayed) assign, novate or transfer to any entity its rights or obligations under this Guarantee.
		

		
			(c)      Transfer by Beneficiary
		

		
			The Beneficiary shall not (without the prior written consent of the Guarantor, such consent not to be unreasonably withheld or delayed) assign, novate or transfer to any entity its rights or obligations under this Guarantee, except the Beneficiary shall, by giving prior written notice to the Guarantor, assign, novate or transfer its rights or obligations under this Guarantee to a Person to whom all its rights with respect to the Guaranteed Obligations have also been transferred in accordance with the Agreement.
		

		
			9.        COMMUNICATIONS
		

		
			9.1      Addresses
		

		
			(a)      Guarantor
		

		
			Any demand or other communication made of the Guarantor under this Guarantee shall be delivered or sent by post or facsimile to the Guarantor at its office located at XXXXX, or to such other address and/or addressed to such other officers as may be provided in writing by the Guarantor to the Beneficiary for such purpose and shall be deemed to have been made when received by the Guarantor.
		

		
			(b)      Beneficiary
		

		
			Any communication made of the Beneficiary under this Guarantee shall be delivered or sent by post or facsimile to the Beneficiary at its office located at [Beneficiary to insert details], Fax Number [Beneficiary to insert details], Attention [Beneficiary to insert details], or to such other address and/or addressed to such other officers as may be provided in writing by the Beneficiary to the Guarantor for such purpose and shall be deemed to have been made when received by the Beneficiary.
		

		
			10.     THIRD PARTY RIGHTS
		

		
			Except as expressly provided for under this Guarantee, a Person who is not the Beneficiary has no right under the Contracts (Rights of third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Guarantee.
		

		
			
		

		
			

		 

		

			73

		

		

			 

		

 

		

		
			11.     GOVERNING LAW AND JURISDICTION
		

		
			This Guarantee shall in all respects be governed by and construed in accordance with the laws of England and each of the Guarantor and the Beneficiary, hereby irrevocably agree that the courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Guarantee, and that any legal action or proceedings arising out of or in connection with this Guarantee may be brought in those courts and each of the Guarantor and the Beneficiary irrevocably submit to the exclusive jurisdiction of each such court.
		

		
			IN WITNESS WHEREOF, this Guarantee has been executed and delivered as a Deed as of the date indicated in the beginning
		

		
			EXECUTED AS A DEED by
		

			
					
						 

					
					
						 

				
	
					
						.................................... 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						[Name, position]

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						as attorney  for and on behalf of

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						BP XXX XXXX XXX XXX 

					
					
						 

					
					
						.................................... 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						under a power of attorney dated [day, month, year]

					
					
						 

					
					
						Signature of Attorney

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						in the presence of

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						.................................... 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Signature of Witness

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Name of Witness:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Address of Witness:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						SIGNED by

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						....................................

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						[Name, position]

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						for and on behalf of

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						[BENEFICIARY]

					
					
						 

					
					
						 

				

		
			 
		

		
			
		

		
			

		 

		

			74

		

		

			 

		

 

		

		
			EXHIBIT I
		

		
			Guarantees
		

		
			Part 2 – Back to back guarantee of Kosmos guarantee 
		

		
			[Note – to be added once Part 1 guarantee is settled with amendments reflecting fact that guarantee is limited to 49.99% of payments made by Kosmos under the Kosmos guarantee given to support JVCo’s obligations]
		

		 

		

			75kos_Ex10-41

		
			Exhibit 10.41
		

		
			ISLAMIC 
		

		
			REPUBLIC
		

		
			OF
		

		
			MAURITANIA
		

		
			HONOR – BROTHERHOOD – 
		

		
			JUSTICE
		

		
			EXPLORATION AND PRODUCTION CONTRACT
		

		
			BETWEEN
		

		
			THE ISLAMIC REPUBLIC OF MAURITANIA
		

		
			AND
		

		
			KOSMOS ENERGY MAURITANIA
		

		
			Bloc C6
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

 

		

		
			INDEX
		

			
					
						ARTICLE 1 :   DEFINITIONS

					
5 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 2 :   SCOPE OF APPLICATION OF THE CONTRACT

					
8 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 3 :   EXPLORATION AUTHORIZATION

					
9 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 4 :   EXPLORATION WORKS OBLIGATION

					
11 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 5 :   ESTABLISHMENT AND APPROVAL OF ANNUAL WORK PROGRAMS

					
13 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 6 :   OBLIGATIONS OF THE CONTRACTOR IN THE CONDUCT OF PETROLEUM OPERATIONS

					
14 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 7 :   RIGHTS OF THE CONTRACTOR IN THE CONDUCT OF PETROLEUM OPERATIONS

					
17 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 8 :   MONITORING OF PETROLEUM OPERATIONS AND ACTIVITY REPORTS – CONFIDENTIALITY

					
18 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 9 :   APPRAISAL OF A DISCOVERY AND GRANTING OF AN EXPLOITATION AUTHORIZATION

					
23 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 10 :  RECOVERY OF PETROLEUM COSTS AND PRODUCTION SHARING

					
28 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 11 :  TAX REGIME

					
30 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 12 :  PERSONNEL

					
32 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 13 :  BONUS

					
33 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 14 :  PRICE AND MEASUREMENT OF HYDROCARBONS

					
34 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 15 :  NATURAL GAS

					
36 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 16 :  TRANSPORT OF HYDROCARBONS BY PIPELINES

					
39 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 17 :  OBLIGATION FOR SUPPLYING THE DOMESTIC MARKET

					
40 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 18 :  IMPORTATION AND EXPORTATION

					
40 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 19 :  FOREIGN EXCHANGE

					
41 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 20 :  BOOK-KEEPING, MONETARY UNIT, ACCOUNTING

					
41 
				
	
					
						 

					
					
						 

					
					
						 

				

		 

		

			2

		

 

	
					
						

					
						ARTICLE 21 :  PARTICIPATION OF THE STATE

					
42 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 22 :  ASSIGNMENT

					
45 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 23 :  OWNERSHIP, USAGE AND ABANDONMENT OF PROPERTY

					
47 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 24 :  LIABILITY AND INSURANCE

					
49 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 25 :  TERMINATION OF THE CONTRACT

					
50 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 26 :  APPLICABLE LAW AND STABILIZATION OF TERMS

					
51 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 27 :  FORCE MAJEURE

					
51 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 28 :  ARBITRATION AND EXPERTISE

					
52 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 29 :  TERMS FOR APPLICATION OF THE CONTRACT

					
53 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 30 :  ENTRY INTO FORCE

					
55 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						APPENDIX 1 :  EXPLORATION PERIMETER

					
57 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						APPENDIX 2 :  ACCOUNTING PROCEDURE

					
59 
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						APPENDIX 3 :  MODEL BANK GUARANTEE

					
81 
				

		
			 
		

		
			
		

		
			

		 

		

			3

		

 

		

		
			BETWEEN
		

		
			The Islamic Republic of Mauritania (hereafter referred to as « the State »), represented for purposes of these presents by the Minister in Charge of Crude Hydrocarbons
		

		
			ON THE ONE HAND,
		

		
			AND
		

		
			Kosmos Energy Mauritania, a company under the Cayman Islands laws, having its registered headquarters at 4th Floor Century Yard, Cricket Square, PO Box 32322, George Town, Grand Cayman KY1, 1209 (hereafter referred to as « the Contractor »), represented herein by Andrew J. INGLIS, having all powers and being endowed with full authority for these purposes.
		

		
			ON THE OTHER HAND,
		

		
			The State and the Contractor being hereafter collectively referred to as « Parties » or individually « Party ».
		

		
			WHEREAS:
		

		
			The State, owner of the deposits and natural accumulations of hydrocarbons contained in the soil and the subsoil of the national territory, wishes to promote the discovery and the production of hydrocarbons in order to promote economic expansion within the framework instituted by Law No. 2010-033 of 20 July 2010 containing the Crude Hydrocarbons Code as thereafter modified;
		

		
			The Contractor wishes to explore and to exploit, within the framework of this exploration-production contract and pursuant to the Crude Hydrocarbons Code, the hydrocarbons which may be contained in the perimeter described in Appendix 1 of this Contract, and has shown it possesses the technical and financial means necessary for this purpose.
		

		
			IT HAS BEEN AGREED AS FOLLOWS:
		

		
			
		

		
			

		 

		

			4

		

 

		

		
			ARTICLE 1 : DEFINITIONS
		

		
			The terms utilized in this text have the following meaning:
		

		
			1.1       « Calendar Year » means a period of twelve (12) consecutive months commencing on the first (1st) of January and terminating on the thirty-first (31st) of the following December.
		

		
			1.2       « Contract Year » means a period of twelve (12) consecutive months beginning on the Effective Date or the anniversary date of said Effective Date.
		

		
			1.3       « Appendices » (also called Annexes) means the appendices to this Contract consisting of:
		

			
	
			
				 §
			

			
	
			
			The Exploration Perimeter constituting Appendix 1

			
	
			
				 §
			

			
	
			
			The Accounting Procedure constituting Appendix 2

			
	
			
				 §
			

			
	
			
			The model bank guarantee constituting Appendix 3

		
			1.4       « Exploration Authorization » means the authorization referred to in Article 3 of this Contract by which the State authorizes the Contractor to carry out, on an exclusive basis, all works of prospection and exploration of Hydrocarbons within the Exploration Perimeter.
		

		
			1.5       « Exploitation Authorization » means the authorization granted to the Contractor to carry out, on an exclusive basis, all works of development and of exploitation of the deposits of Hydrocarbons within the Exploitation Perimeter.
		

		
			1.6       « Barrel» means « U.S. barrel », or 42 American gallons (159 liters) measured at the temperature of 60°F (15.6 °C) and at atmospheric pressure.
		

		
			1.7       « BTU » means the British unit of energy « British Thermal Unit » in such manner that a million BTU (MMBTU) is equal to approximately 1055 joules.
		

		
			1.8       « Annual Budget » means the detailed estimate of the cost of Petroleum Operations defined in an Annual Work Program.
		

		
			1.9       « Crude Hydrocarbons Code » means Law No. 2010-033 of 20 July 2010 containing the Crude Hydrocarbons Code, its amendments and its application texts.
		

		
			1.10     « Environmental Code » means Law No. 2000-045 of 26 July 2000 containing the Environmental Code, its amendments and its application texts.
		

		
			1.11     « Contractor » means collectively or individually the company(ies) signing this Contract as well as any entity or company to which an interest would be assigned in application of Articles 21 and 22 of this Contract.
		

		
			1.12     « Contract » means this text as well as its appendices and amendments.
		

		
			In the case of contradiction between the provisions of this text and those of its appendices, the 
		

		
			
		

		
			

		 

		

			5

		

 

		

		
			provisions of this text shall prevail.
		

		
			1.13     « Petroleum Costs » means all the costs and expenses incurred by the Contractor in execution of Petroleum Operations provided for in this Contract and determined according to the Accounting Procedure, the subject of Appendix 2 to this Contract.
		

		
			1.14     « Effective Date » means the date of entry into force of this Contract such as it is defined in Article 30.
		

		
			1.15     « Dollar » means the dollar of the United States of America ($).
		

		
			1.16     « State » means the Islamic Republic of Mauritania.
		

		
			1.17     « Gross Negligence » means imprudence or negligence of such gravity that it raises a presumption of malicious intent on the part of the person responsible for such action.
		

		
			1.18     « Wet Gas » means Natural Gas containing a fraction of elements becoming liquid at ambient pressure and temperature, justifying the creation of a facility to recover such liquids.
		

		
			1.19     « Natural Gas » means all gaseous hydrocarbons produced from a well, including Wet Gas and Dry Gas which may be associated or non-associated with liquid hydrocarbons and the residual gas which is obtained after extraction of the liquids from Natural Gas.
		

		
			1.20     « Associated Natural Gas » means the Natural Gas existing in a reservoir in a solution with Crude Petroleum or in the form of "Gas Cap" in contact with Crude Petroleum, and which is produced or may be produced in association with the Crude Petroleum.
		

		
			1.21     « Non-Associated Natural Gas » means Natural Gas excluding Associated Natural Gas.
		

		
			1.22     « Dry Gas »  means Natural Gas containing essentially methane, ethane and inert gases.
		

		
			1.23     « Hydrocarbons » means liquid and gaseous or solid hydrocarbons, in particular oil sands and oil shale.
		

		
			1.24     « LIBOR » means the annual interbank rate applicable for the Dollar as published by the Financial Times, The Wall Street Journal or any other comparable publication of reference.
		

		
			1.25     « Ministry » means the Ministry in Charge of Crude Hydrocarbons.
		

		
			1.26     « Minister » means the Minister in Charge of Crude Hydrocarbons.
		

		
			1.27     « Operator » means the company designated in Article 6.2 here below in charge of the conduct and the execution of Petroleum Operations or any company which would later be substituted for it according to applicable terms.
		

		
			1.28     « Petroleum Operations » means all operations of exploration, exploitation, storage, transport and marketing of Hydrocarbons, including therein operations of evaluation/appraisal, development, production, separation, processing up until the Delivery Point, as well as the 
		

		
			
		

		
			

		 

		

			6

		

 

		

		
			remediation of the sites to their prior condition, and, more generally, all other operations directly or indirectly linked to the foregoing, carried out by the Contractor within the framework of this Contract, with the exclusion of refining and distribution of petroleum products.
		

		
			1.29     « Ouguiya » means the currency of the Islamic Republic of Mauritania.
		

		
			1.30     « Exploitation Perimeter » means all or part of the Exploratation Perimeter for which the State, within the context of this Contract, grants to the Contractor an Exploitation Authorization pursuant to the provisions of Article 9 here below.
		

		
			1.31     « Exploration Perimeter » means the surface defined in Appendix 1, reduced, as the case may be, by relinquishments provided for in Article 3 and/or by Exploitation Perimeters, for which the State, in the context of this Contract, grants to the Contractor an Exploration Authorization pursuant to the provisions of Article 2.1 here below.
		

		
			1.32     « Crude Petroleum » means all liquid Hydrocarbons in the natural state or obtained from Natural Gas by condensation or separation as well as asphalt.
		

		
			1.33     « Delivery Point means:
		

			
	
			
				 §
			

			
	
			
			For Crude Petroleum, the loading point F.O.B. of the Crude Petroleum as may be further defined more precisely in the possible lifting agreement(s) the Parties may enter into.

			
	
			
				 §
			

			
	
			
			For Natural Gas, the Delivery Point set by common agreement between the Parties pursuant to Article 15 of this Contract.

		
			1.34     « Remediation Plan » means the document detailing the program of work to be carried out by the Contractor at the expiration, the surrender or the canceling of an Exploitation Authorization, pursuant to Article 23.2 here below.
		

		
			1.35     « Annual Work Program » means the descriptive document, item by item, of the Petroleum Operations to be carried out during the course of a Calendar Year within the framework of this Contract prepared pursuant to the provisions of Articles 4, 5 and 9 here below.
		

		
			1.36     « Affiliated Company » means:
		

		
			a)     Any company or any other entity which controls or is controlled, directly or indirectly, by a company or entity, party to this contract, or
		

		
			b)     Any company or any other entity which controls or is controlled, directly or indirectly, by a company or entity which itself controls directly or indirectly any company or entity, party to this contract.
		

		
			For purposes of this definition, the term « control » means the direct or indirect ownership by a 
		

		
			
		

		
			

		 

		

			7

		

 

		

		
			company or any other entity of a percentage of capital stock or shares greater than fifty percent (50%) of the voting rights at the shareholders’ meeting of another company or entity.
		

		
			1.37     « Third Party » means any natural person or legal entity other than the State, the Contractor and the Affiliated Companies of the Contractor. 
		

		
			1.38     « Quarter » means a period of three (3) consecutive months beginning on the first day of January, April, July or October of each Calendar Year.
		

		
			ARTICLE 2 :  SCOPE OF APPLICATION OF THE CONTRACT
		

		
			Pursuant to the Crude Hydrocarbons Code, the State hereby authorizes the Contractor to carry out on an exclusive basis in the Exploration Perimeter defined in Appendix 1 the appropriate and necessary Petroleum Operations within the framework of this Contract. 
		

		
			2.1       This Contract is entered into for the duration of the Exploration Authorization such as provided for in Article 3 of this Contract, including therein its renewal periods and possible extensions, and, in the case of a commercial discovery, for the duration of the Exploitation Authorizations which will have been granted, such as defined in Article 9.11 here below.
		

		
			2.2       This Contract shall terminate if, at the expiration of all of the exploration phases provided for in Article 3, the Contractor has not notified the State of its decision to develop a commercial Hydrocarbons deposit and applied for an Exploitation Authorization relative to such deposit, pursuant to the provisions of Article 9.5 here below.
		

		
			In the event of the grant of more than one Exploitation Authorization and unless there is an early termination, this Contract will expire upon the expiration of the last current valid Exploitation Authorization.
		

		
			2.3       The expiration, surrender or termination of this Contract for whatever reason it may be, shall not free the Contractor from his obligations under this Contract, which came into being prior to the time of such expiration, surrender or termination, which obligations must be carried out by the Contractor.
		

		
			2.4       The Contractor shall have the responsibility to carry out the Petroleum Operations provided for in this Contract. For their execution he undertakes to comply with good oilfield practice of the international petroleum industry and to comply with norms and standards decreed by Mauritanian regulations in matters of industrial safety, protection of the environment, and operational techniques.
		

		
			
		

		
			

		 

		

			8

		

 

		

		
			2.5       The Contractor shall supply all the financial and technical means necessary for the proper functioning of the Petroleum Operations and shall bear in full all the risks linked to the execution of said Operations, and without prejudice to the provisions of Article 21 of this Contract. The Petroleum Costs borne by the Contractor shall be recoverable by the Contractor pursuant to the provisions of Article 10 here below.
		

		
			2.6       During the period of validity of the Contract, the production resulting from the Petroleum Operations shall be shared between the State and the Contractor pursuant to the provisions of Article 10 here below.
		

		
			ARTICLE 3 :  EXPLORATION AUTHORIZATION
		

		
			3.1       The Exploration Authorization in the Exploration Perimeter defined in Appendix 1 shall be granted to the Contractor for a first phase of four (4) Contract Years.
		

		
			3.2       The Contractor shall have right to renewal of the Exploration Authorization two times, for a period of three (3) Contract Years each time, if he has fulfilled for the preceding exploration phase the work obligations stipulated in Article 4 here below and provided that he furnishes the bank guarantee for the renewal period pursuant to Article 4.6 here below.
		

		
			3.3       In accordance with Article 21of the Crude Hydrocarbon Code, if at the expiration of any phase of the exploration period defined in Article 3.1 or 3.2 here above, works are actually still in progress, the Contractor shall have the right, if he submits an application duly providing supporting information, to a special extension of such phase for a period of time not to exceed twelve (12) months.
		

		
			3.4       If the Contractor discovers one or more deposits of Hydrocarbons for which he cannot present the declaration of commerciality prior to the end of the third phase of the exploration period pursuant to Article 9.5 here below, by reason of the distance of the deposit in relation to possible delivery points on the Mauritanian territory and of the lack of infrastructure of transportation by pipeline, or the lack of a market for the production of the Natural Gas, he may apply for an extension of the Exploration Authorization for a maximum period of three (3) years for deposits of Petroleum or of Wet Gas and five (5) years for deposits of Dry Gas, the Exploration Perimeter being thus reduced to the presumed limits of the deposit(s) in question.
		

		
			3.5       In the case where such an extension is granted, the Contractor must furnish to the Minister within sixty (60) days following the end of each Calendar Year of the period of extension a report showing whether or not the relevant deposit(s) is/are commercial, and, in the case of a deposit of Natural Gas, the results of the works and studies carried out pursuant to Article 15 here below.
		

		
			
		

		
			

		 

		

			9

		

 

		

		
			3.6       For each renewal or extension, other than the extension contemplated by Article 3.3, the Contractor must submit an application to the Minister not later than two (2) months prior to the expiration of the current exploration phase.
		

		
			The renewals shall be granted by decree of the Minister while the extensions shall be granted by decree of the Council of Ministers; such decrees shall take effect starting from the date following the expiration of the preceding period.
		

		
			3.7       The Contractor undertakes to relinquish to the State at least twenty-five percent (25%) of the initial surface area of the Exploration Perimeter at the time of each renewal of same, in such fashion as to not retain during the second phase of the exploration period more than seventy-five percent (75%) of the initial surface area of the Exploration Perimeter and during the third phase of the exploration period, not more than fifty percent (50%) of the initial surface area of the Exploration Perimeter.
		

		
			3.8       For the application of Article 3.7 here above :
		

		
			a)      The surfaces having previously been the subject of a voluntary relinquishment per Article 3.9 here below and the surfaces already covered by Exploitation Authorizations shall be deducted from the area subject to mandatory relinquishment.
		

		
			b)      The Contractor shall have the right to determine the extent, the form and the location of the portion of the Exploration Perimeter which he intends to keep. However, the portion relinquished must consist of a perimeter of simple geometric form, delimited by North-South, East-West lines or by natural limits or frontiers.  The surface relinquishment shall be made according to the land registry grid from one of the borders of the initial or residual Exploration Perimeter and in a contiguous fashion.
		

		
			c)      The application for renewal must be accompanied by a plan containing an indication of the Exploration Perimeter that was kept as well as a report specifying the works carried out since the Effective Date on the relinquished surfaces and the results obtained.
		

		
			3.9       The Contractor may at any time, upon three (3) months’ notice, notify the Minister that he is surrendering all or a portion of the Exploration Perimeter.  In the event of a full surrender, the Exploration Authorization shall terminate automatically on the date of said notification.  In the case of a partial surrender, the provisions of Article 3.8 here above shall be applicable.
		

		
			In all cases, no voluntary surrender during the course of an exploration phase shall reduce the exploration work commitments stipulated in Article 4 here below for said phase, nor does it terminate the corresponding bank guarantee.
		

		
			
		

		
			

		 

		

			10

		

 

		

		
			3.10     Except in the case of extension pursuant to Articles 3.3 and 3.4 here above, upon the expiration of the third phase of the exploration period, the Contractor must relinquish the remaining surface of the Exploration Perimeter, except for areas already comprised within Exploitation Perimeters.
		

		
			Notwithstanding the preceding paragraph and pursuant to the provisions of Article 26.2 of the Crude Hydrocarbons Code, the Exploration Authorization shall remain in effect until Contractor submits a request for an Exploitation Authorization in accordance with the time frames stipulated in Article 9.
		

		
			ARTICLE 4 :  EXPLORATION WORKS OBLIGATION
		

		
			4.1       During the first phase of the exploration period of four (4) Contract Years defined in Article 3.1 here above, the Contractor undertakes to carry out the following work:
		

			
	
			
				 §
			

			
	
			
			Acquire two thousand (2000) sq km 3D seismic;

			
	
			
				 §
			

			
	
			
			Reprocess the existing seimic data acquired by the prvious operator in Contract Area, subject to Contrator receiving such data from the Ministry.

		
			Said works must commence within the twelve (12) months following the Effective Date.
		

		
			4.2       During the second phase of the exploration period of three (3) Contract Years defined in Article 3.2 here above, the Contractor undertakes to carry out the Drilling of one (1) Exploration well to a depth of two thousand five hundred (2500) meters below the mud line.
		

			
	
			
				 §
			

			
	
			
			Said works must commence within the six (6) months following the start of the phase in question.

		
			4.3       During the third phase of the exploration period of three (3) Contract Years defined in Article 3.2 here above, the Contractor undertakes to carry out the Drilling of one (1) Exploration well to a depth of two thousand five hundred (2500) meters below mud line.
		

		
			Said works must commence within the three (3) months following the start of the phase in question.
		

		
			4.4       Each of the above-cited wells shall be carried out up to the minimum depth set forth here above, or to a lesser depth, upon authorization of the Minister, if the pursuit of the well, carried out according to good oilfield practices in the international petroleum industry, is impractical for 
		

		
			
		

		
			

		 

		

			11

		

 

		

		
			one or another of the following reasons:
		

		
			a)   The basement is encountered at a depth that is less than the minimum depth referred to above;
		

		
			b)   The pursuit of the well presents a manifest danger by reason of the existence of an abnormal stratum pressure ;
		

		
			c)   Rock formations are encountered, the hardness of which does not allow the practical advancement of the well carried out with the appropriate means of equipment;
		

		
			d)   Petroliferous formations are encountered which in order to cross through requires for their protection the laying of casings, preventing the attainment of the above-cited minimum depth.
		

		
			In each of the cases cited here above, the Contractor shall inform the Minister and shall be authorized to suspend the well and said well shall be deemed to have been drilled to the minimum depth referred to above.
		

		
			4.5       If the Contractor, either during the course of the first phase of the exploration period, or during the course of the second phase of the exploration period, defined respectively in Articles 3.1 and 3.2 here above, carries out a number of exploration wells greater than the minimum commitments stipulated respectively in Articles 4.1 and 4.2 here above for said phase, the excess wells may be carried over to the following phase(s) of the exploration period and shall be deducted from the minimum work commitments stipulated for said phase(s).
		

		
			For purposes of the application of Articles 4.1 to 4.5 here above, the wells carried out in the context of a program for evaluation of a discovery shall not be considered to be exploration wells, and, in the case of a discovery of Hydrocarbons, only one well per discovery shall be deemed to be an exploration well.
		

		
			4.6       Within the thirty (30) days following the Effective Date, the Contractor must remit to the Minister a bank guarantee issued by an international bank of first order, pursuant to Appendix 3 of  four million Dollars ($4,000,000) covering his minimum work commitments for the first phase of the exploration period defined in Article 4.1 here above.  The guarantee will increase to seven million Dollars ($ 7,000,000) if the Contractor does not achieve the acquisition within six (6) months of the Effective Date.
		

		
			In the case of renewal of the Exploration Authorization, the Contractor also must remit to the Minister, within the thirty (30) days following receipt of the decree from the Minister granting the renewal, a bank guarantee issued by an international bank of first order, pursuant to Appendix 3 of twenty-two million Dollars ($22,000,000) for the second Phase of the 
		

		
			
		

		
			

		 

		

			12

		

 

		

		
			exploration period and of twenty-two million Dollars ($22,000,000) for the third Phase of the exploration period.
		

		
			If on expiration of any phase of the exploration period or in the case of total or partial surrender or termination of the Contract, the exploration works have not reached the minimum commitments of this Article 4, the Minister shall have the right to call the guarantee for an amount equal to the amount of the guarantee after deduction of the estimated cost of the minimum work actually carried out.
		

		
			Such cost shall be calculated on a lump-sum basis in utilizing the following unit costs:
		

		
			a)       three thousand five hundred Dollars ($3500) per square kilometer;
		

		
			b)       twenty-two million Dollars ($22,000,000) per exploration well.
		

		
			Once the payment is made, the Contractor shall be deemed to have fulfilled his minimum exploration work obligations per Article 4 of this Contract; the Contractor may, except in the event of cancellation of the Exploration Authorization for a major failure in performance of this Contract, continue to benefit from the provisions of said Contract and, in the case of an acceptable application, obtain the renewal of the Exploration Authorization. 
		

		
			ARTICLE 5 :  PRESENTATION  AND APPROVAL OF ANNUAL WORK PROGRAMS
		

		
			5.1       Not later than (2) months after the Effective Date, the Contractor shall prepare and submit to the Ministry for approval an Annual Work Program, detailed item by item, including therein the corresponding Annual Budget for all of the Exploration Perimeter, specifying the Petroleum Operations relating to the period running from the Effective Date to the following 31 December.
		

		
			Thereafter, not later than (3) months prior to the start of each Calendar Year, the Contractor shall prepare and submit to the Ministry for approval an Annual Work Program, detailed item by item, including therein the corresponding Annual Budget for all of the Exploration Perimeter, then, if applicable, for the Exploitation Perimeter(s), in specifying the Petroleum Operations which he proposes to carry out over the course of the following Calendar Year.
		

		
			Each Annual Work Program and corresponding Annual Budget shall be itemized between the different activities of exploration, and if applicable, of appraisal for each discovery, of development and of production for each commercial deposit.
		

		
			
		

		
			

		 

		

			13

		

 

		

		
			5.2       If the Ministry deems that revisions or modifications to the Annual Work Program and to the corresponding Annual Budget are necessary and appropriate, it must so notify the Contractor in writing with all supporting documentation deemed appropriate within a time period of sixty (60) days following their receipt.  In such case, the Ministry and the Contractor shall meet as soon as possible in order to study the revisions or modifications requested and establish by common agreement the Annual Work Program and the corresponding Annual Budget in their definitive form, according to good oilfield practice in the international petroleum industry.   The date of adoption of the Annual Work Program and of the corresponding Annual Budget shall be the above-cited mutually agreed date.
		

		
			In the absence of notification by the Ministry to the Contractor of his wish for revision or modification within the time period of the above-referenced sixty (60) days, said Annual Work Program and corresponding Annual Budget shall be deemed accepted by the Ministry upon the date of expiration of said time period.
		

		
			In all cases, each operation of the Annual Work Program, for which the Ministry has not requested revision or modification, must be carried out by the Contractor within the time periods set forth.
		

		
			5.3       The Parties accept that the results obtained during the course of the works taking place, or that special circumstances may justify changes to an Annual Work Program and to the corresponding Budget.  In such case, after notification to the Ministry, the Contractor may make such changes provided that the fundamental objectives of said Annual Work Program are not modified.
		

		
			ARTICLE 6 : OBLIGATIONS OF THE CONTRACTOR IN THE CONDUCT OF PETROLEUM OPERATIONS
		

		
			6.1       Without prejudice to the provisions of Article 21 here below, the Contractor must furnish all necessary funds and purchase or rent all tools, equipment and construction supplies that are indispensable for the execution of Petroleum Operations.  The Contractor is responsible for the preparation and the execution of the Annual Work Programs which are to be carried out in the most appropriate manner in compliance with good oilfield practice in the international petroleum industry.
		

		
			6.2       Upon the Effective Date of this Contract, Kosmos Energy Mauritania is designated as Operator and shall be responsible for the conduct and the execution of the Petroleum Operations.  The Operator, in the name of and on the behalf of the Contractor, shall communicate to the
		

		
			
		

		
			

		 

		

			14

		

 

		

		
			Minister all reports and information referred to in this Contract. Any change of Operator contemplated by the entities of the Contractor must receive the prior approval of the Minister, which approval shall not be withheld without reasonable justification provided therefor.
		

		
			6.3      The Operator must maintain during the term of the Contract in Mauritania, a branch which shall in particular be staffed with a responsible person having authority for the conduct of the Petroleum Operations and to whom any notification with regard to this Contract can be sent.
		

		
			6.4       The Contractor must during the course of the Petroleum Operations take all necessary measures for the protection of the environment.
		

		
			He must in particular, for any Petroleum Operation subject to prior authorization according to the Environmental Code, submit to the Minister, depending on the case, the studies or notices of environmental impact required for this type of operation, carry out the measures and comply with restrictions set forth in the environmental management plan, furnish the declarations and submit himself to the oversight provided for in the Environmental Code
		

		
			The Contractor must moreover take all reasonable measures according to good oilfield practice in the international petroleum industry in order to:
		

		
			a)   Ensure that all of the facilities and equipment utilized for purposes of the Petroleum Operations be at all times in good repair and in conformity with the applicable norms, including therein those which result from international conventions ratified by the Islamic Republic of Mauritania and relative to the prevention of pollution;
		

		
			b)   avoid losses and dumping:
		

		
			-  of Hydrocarbons, including the flaring of Natural Gas, (with the exception of the cases provided for in Article 40 of the law instituting the Crude Hydrocarbons Code, under penalty of a fine which shall be later be determined by a decree taken by the Council of Ministers and which shall not under any circumstances exceed twenty (20) per cent of the then current market price of Natural Gas in Mauritania),
		

		
			The above-cited fine shall not be considered a recoverable Petroleum Cost nor a deductible charge.
		

		
			c)   DOES NOT APPLY.
		

		
			d)   Store the Hydrocarbons produced in the facilities and receptacles constructed for this purpose ;
		

		
			
		

		
			

		 

		

			15

		

 

		

		
			e)   Without prejudice to the provisions of Article 23.2 here below, dismantle facilities which are no longer necessary to the Petroleum Operations and return the sites to their original condition;
		

		
			f)   and, generally, prevent pollution of the soil and of the subsoil, of the water and of the atmosphere, as well as prevent harm to fauna and flora.
		

		
			6.5       The Contractor must, during the course of the Petroleum Operations, take all necessary measures to ensure the safety and protect the health of persons according to good oilfield practices in the international petroleum industry and the Mauritanian regulations in force, and in particular to put into place:
		

		
			a)   Appropriate means for prevention, rapid response and handling of risks, including the risks of blow-out;
		

		
			b)   Measures for information, training and means adapted to the risks encountered, including therein individual protective equipment, fire-fighting materials as well as means of first-aid and prompt evacuation of victims.
		

		
			6.6       All works and facilities set up by the Contractor under this Contract must, according to the nature and circumstances, be constructed, shown with markers and sign posts and equipped in such fashion as to allow at any time and in complete safety free passage within the Exploration Perimeter and the Exploitation Perimeter(s).
		

		
			6.7       While carrying out his right of construction, to execute works, and to maintain all facilities necessary for the purposes of this Contract, the Contractor should not occupy lands situated less than five hundred (500) meters away from any religious buildings, whether cultural or not, burial grounds, walled enclosures, courts and gardens, dwelling places, groups of dwelling places, villages, built-up areas, wells, springs , reservoirs, roads, routes, railways, water conduits, pipelines, works of public utility, civil engineering works, without the prior consent of the Minister. The Contractor shall be required to repair any damages which his works may have caused to occur.
		

		
			6.8       The Contractor commits to granting preference to Mauritanian enterprises and products, on equivalent conditions in terms of price, quantity, quality, terms for payment and timeframe of delivery, and to require his subcontractors to make a similar commitment
		

		
			All contracts of supply, construction or service of a value greater than seven hundred fifty thousand (750,000) Dollars where works of exploration/appraisal are concerned and one million five hundred thousand ($1,500,000) Dollars where works of development/exploitation are concerned, must be the subject of a call for bids from Mauritanian and foreign bidders, 
		

		
			
		

		
			

		 

		

			16

		

 

		

		
			unless there is a prior consent from the Minister.
		

		
			Copies of such contracts entered into during the course of each Quarter shall be sent to the Minister within the thirty (30) days following the end of the relevant Quarter.
		

		
			6.9       The Contractor undertakes to grant preference, on equivalent economic terms, in the purchase of goods necessary for the Petroleum Operations, taking into account rental terms and any other lease arrangements and to require from his subcontractors a similar commitment.
		

		
			To this end, every Annual Budget referred to in Article 5 must specify all the draft rental contracts of an annual value greater than seven hundred fifty thousand (750,000) Dollars.
		

		
			6.10     Without prejudice to the obligation and responsibility of the Contractor in respect of protecting the environment, the Parties agree to collaborate to support the management of environemental risks in a precuationary manner.  To this end, the Contractor agrees to contibute to the financing of the Environmental Committee by the payment of an amount of one hundred thousand Dollars ($100,000) per Calendar Year during the validity of the Exploration Authorization, and, starting from the granting of an Exploitation Authorization, an amount of three hundred fifty thousand Dollars ($350,000) per Calendar Year, and, starting from first commercial production from an Exploitation Authorization, an amount of seven hundred thousand Dollars ($700,000) per Calendar Year. The above-cited payments shall be considered to be recoverable Petroleum Costs with respect to the provisions of Article 10.2 here above and as deductible charges on the Industrial and Commercial Income Tax in conformity with Article 82 of the Crude Hydrocarbons Code.  Contractor shall have the right to be represented on the Environmental Committee for the duration of this Contract and shall appoint one (1) representative for this purpose.
		

		
			ARTICLE 7 :  RIGHTS OF THE CONTRACTOR IN THE CONDUCT OF PETROLEUM OPERATIONS
		

		
			7.1       The Contractor has the exclusive right to carry out Petroleum Operations inside of the Exploration Perimeter or any Exploitation Perimeter resulting therefrom, as long as the Petroleum Operations are in conformity with the terms and conditions of this Contract, of the Crude Hydrocarbons Code as well as with the provisions of the laws and regulations in force in 
		

		
			
		

		
			

		 

		

			17

		

 

		

		
			Mauritania, and that they are executed according to good oilfield practice in the international petroleum industry.
		

		
			7.2       For purposes of the execution of the Petroleum Operations, the Contractor shall benefit from the rights set forth in Article 54 of the Crude Hydrocarbons Code.
		

		
			7.3       The costs, compensation payments, and in general all charges resulting from occupation of lands referred to in Articles 55 to 57 of the Crude Hydrocarbons Code shall be at the expense of the Contractor and shall be recoverable as Petroleum Costs pursuant to the provisions of Article 10.2 here below.
		

		
			7.4       The expiration of an Exploration Authorization or of an Exploitation Authorization, or the obligatory or voluntary relinquishment, partial or total of an Exploration Perimeter or of an Exploitation Perimeter has no effect with regard to the rights resulting from Article 7.2 here above for the Contractor, on works and facilities executed in application of the provisions of this Article 7, provided that said works and facilities continue to be utilized in the framework of the Contractor’s activity on the portion kept or on other exploration or exploitation perimeters in Mauritania.
		

		
			7.5       Subject to the provisions of Articles 6.8 and 6.9 here above, the Contractor has freedom of choice concerning suppliers and subcontractors and shall benefit from the customs regime set forth in Article 18 of this Contract.
		

		
			7.6       Unless there are provisions to the contrary in the Contract, no restriction shall be set upon the entry, the stay, freedom of movement, employment and repatriation of persons and their families as well as their goods, for the employees of the Contractor and those of his subcontractors, subject to compliance with employment legislation and regulations as well as social laws in force in Mauritania.
		

		
			The Ministry shall facilitate the delivery to the Contractor, as well as to his agents, to his subcontractors and to their families, all administrative authorizations which may possibly be required in relation with the Petroleum Operations carried out in the framework of this Contract, including entry and exit visas.
		

		
			ARTICLE 8 :  MONITORING OF PETROLEUM OPERATIONS AND ACTIVITY REPORTS – CONFIDENTIALITY
		

		
			8.1       The Petroleum Operations shall be subject to monitoring by the Ministry pursuant to the 
		

		
			
		

		
			

		 

		

			18

		

 

		

		
			provisions of Title VIII of the Crude Hydrocarbons Code.  The duly mandated representatives of the Ministry shall in particular have the right to monitor the Petroleum Operations, to inspect facilities, equipment, materials, and to audit said procedures, norms, records and books pertaining to the Petroleum Operations.  Said such representatives shall make every effort not to disrupt the normal conduct of Contractor’s operations.
		

		
			In order to allow the exercise of the rights referred to here above, the Contractor shall furnish to the representatives of the Ministry and to the other agents of the State in charge of the supervision of Petroleum Operations reasonable assistance in the matter of means of transport and of lodging.  The reasonable expenses for transport and lodging directly linked to monitoring and inspection shall be at the expense of the Contractor.  Such expenses shall be considered as recoverable Petroleum Costs according to the provisions of Article 10.2 of this Contract and as deductible charges for purposes of the calculation of Industrial and Commercial Income Tax.
		

		
			8.2       The Contractor shall keep the Ministry regularly informed of the status of the Petroleum Operations. He must in particular supply the Ministry with the following programs and information:
		

		
			a)   A work program for any geological or geophysical campaign, at least thirty (30) days before the beginning of the campaign in question and specifying in particular its location, its objectives, the techniques and equipment utilized, the name and address of the enterprise which will carry out the work, the starting date and the projected duration, the number of kilometers of seismic lines, the estimated costs and the safety measures put into place if the usage of explosives is contemplated.
		

		
			b)   A work program for any well, at least thirty (30) days before the spudding of the well in question and specifying in particular its precise location, a detailed description of the works contemplated, including the well techniques and the associated operations, its depth, its geological objective, the start date and the projected duration, the estimated costs of the program, a summary of the geological and geophysical data which prompted the Contractor’s decision, the name and address of the drilling contractor as well as the designation of the well site, the name and address of all other subcontractors recruited for such operation, and the safety measures envisioned.
		

		
			c)   An advance notice of thirty (30) days concerning any abandonment of a producing well and forty-eight (48) hours when it concerns a non-producing well.
		

		
			d)   An advance notice of forty-eight (48) hours concerning any suspension of drilling or resumption of drilling after a suspension of greater than thirty (30) days. 
		

		
			
		

		
			

		 

		

			19

		

 

		

		
			Any accident involving a stoppage of work or material damage or death occurring in the framework of the Petroleum Operations must be immediately notified to the Minister and not later than within twenty-four (24) hours.
		

		
			8.3       The Ministry may require from Contractor the execution, at the expense of the latter, of all work necessary to ensure safety and hygiene within the framework of the Petroleum Operations, pursuant to Article 6.5 here above.
		

		
			8.4       The Ministry shall have access to all original data resulting from Petroleum Operations undertaken by the Contractor within the Exploration Perimeter and Exploitation Perimeter(s) such as geological, geophysical, petrophysical, drilling, reports concerning commencement of exploitation and all other reports generally required for the Petroleum Operations.
		

		
			8.5       The Contractor commits to furnishing to the Ministry the following periodic reports:
		

		
			a)   Daily reports on drilling activities;
		

		
			b)   Weekly reports on geophysical works;
		

		
			c)   Starting from the date of granting of an Exploitation Authorization, within fifteen (15) days following the end of each Quarter, a detailed report on development activities;
		

		
			d)   Starting from the start-up of production, within fifteen (15) days following the end of each month, an exploitation report specifying in particular each of the quantities of Hydrocarbons produced, utilized in Petroleum Operations, stored, lost or flared, and sold, during the course of the preceding month as well as an estimate of each of the quantities in question for the current month.  With regard to Hydrocarbons sold, the report shall specify for each sale the identity of the buyer, the quantity sold and the price obtained;
		

		
			e)   Within the fifteen (15) days following the end of each Quarter, a report relative to Petroleum Operations carried out during the Quarter elapsed, containing in particular a description of the Petroleum Operations carried out and a detailed statement of the Petroleum Costs incurred, categorized in particular by Exploration Perimeter / Exploitation Perimeter and by type;
		

		
			f)   Within the three (3) months following the end of each Calendar Year, a report relative to the Petroleum Operations carried out during the Calendar Year elapsed, as well as a detailed statement of Petroleum Costs incurred, categorized in particular by Exploration Perimeter / Exploitation Perimeter and by type and a statement of the personnel employed by the Contractor, indicating the number of employees, their nationality, their duties, the 
		

		
			
		

		
			

		 

		

			20

		

 

		

		
			total amount of the salaries as well as a report on medical care and instruction given to them.
		

		
			g)   Any other report generally required within the framework of Petroleum Operations.
		

		
			8.6       Moreover, the following reports, data and documents shall be furnished to the Ministry during the month following their drafting or their being obtained:
		

		
			a)   Two (2) copies of the geological reports made in the framework of exploration ;
		

		
			b)   Two (2) copies of geophysical reports made in the framework of exploration.  The Ministry shall have access to the originals of all recordings made (magnetic tapes or other format) and may, upon request, obtain copies;
		

		
			c)   Two (2) copies of reports of commencement and termination of drilling for each of the wells drilled;
		

		
			d)   Two (2) copies of all measures, tests, and well loggings recorded during the course of drilling (drilling termination reports);
		

		
			e)   Two (2) copies of each report of analyses (petrography, biostratigraphy, geochemistry or other) carried out on the core samples, the cuttings or fluids sampled in each one of the wells drilled, including therein raw data and supporting items with media for copying photos pertaining thereto;
		

		
			f)   A representative portion of the core samples taken, well cuttings taken from each well as well as fluid samples collected during the production tests shall also be supplied within reasonable periods of time.
		

		
			g)   Moreover, the Contractor may freely export core samples taken, drill cuttings taken and fluids produced;
		

		
			h)   And in a general fashion, two (2) copies of all other reports generally required for Petroleum Operations. 
		

		
			Reports, studies and other results referred to in this Article 8.6, as well as those referred to in Article 8.5 here above, shall be supplied in a suitable medium in digital and/or hard copy.
		

		
			8.7       The Parties undertake to consider as confidential and to not communicate to Third Parties or to publish, except with the prior consent of the Minister, data and information of a technical nature related to the Petroleum Operations and which would not already be in the public domain, for the entire duration of the Contract.
		

		
			
		

		
			

		 

		

			21

		

 

		

		
			In the case of relinquishment of a surface area or surrender of a perimeter , the Contractor undertakes to consider as confidential and to not communicate to Third Parties or to publish, except with the prior consent of the Minister, the data and information relating to the perimeter in question and which would not already be in the public domain.
		

		
			After the surrender, termination or expiration of the Contract, the Contractor undertakes to consider as confidential and to not communicate to Third Parties or to publish, except with the prior consent of the Minister, the data and information relating to Petroleum Operations and which would not already be in the public domain. 
		

		
			8.8       Notwithstanding the provisions of Article 8.7, the State may communicate the data and information:
		

		
			a)   To all suppliers of services and professional consultants providing services in the framework of the monitoring of Petroleum Operations, after obtaining a similar commitment of confidentiality;
		

		
			b)   To any bank, institution or financial establishment with which an entity of the State solicits or obtains financing, after obtaining a similar commitment of confidentiality;
		

		
			c)   In the framework of any contentious proceeding in a legal, administrative or arbitrational matter.
		

		
			8.9       Notwithstanding the provisions of Article 8.7, the Contractor may communicate the data and information:
		

		
			a)   To any Affiliated Company bound by a similar commitment of confidentiality;
		

		
			b)   To any suppliers of services and professional consultants providing services in the framework of Petroleum Operations, after obtaining a similar commitment of confidentiality;
		

		
			c)   To any company with a bona fide interest in the carrying out of a possible assignment, after obtaining from such company a commitment to keep confidential such information and to utilize it only for the purposes of such assignment;
		

		
			d)   To any bank or financial establishment with which an entity of the Contractor solicits or obtains financing, after obtaining a similar commitment of confidentiality;
		

		
			e)   When and to the extent that the regulations of a recognized stock exchange require the information;
		

		
			
		

		
			

		 

		

			22

		

 

		

		
			f)   Within the framework of any contentious proceeding in a legal, administrative or arbitrational matter.
		

		
			8.10     The Contractor must report to the Minister the soonest possible any information relative to mineral substances encountered during the Petroleum Operations.
		

		
			8.11     The Contractor must participate in the implementation of the Extractive Industries Transparency Initiative (EITI) pursuant to Article 98 of the Crude Hydrocarbons Code.
		

		
			ARTICLE 9 :  APPRAISAL OF A DISCOVERY AND GRANTING OF AN EXPLOITATION AUTHORIZATION
		

		
			9.1       If the Contractor discovers Hydrocarbons in the Exploration Perimeter, he must so notify the Minister in writing the soonest possible and carry out, pursuant to good oilfield practice in the international petroleum industry, the necessary tests.  Within the thirty (30) days following the provisional closure or abandonment of the discovery well, the Contractor must submit to the Minister a report giving all information pertaining to such discovery and formulating recommendations of the Contractor as to whether or not to pursue his appraisal.
		

		
			9.2       If the Contractor wishes to undertake the appraisal works of the above-cited discovery, he must diligently submit to the Minister for approval the appraisal work program, the timetable for execution and the estimate of the corresponding budget, not later than six (6) months following the date of the notification of the discovery referred to in Article 9.1 here above.
		

		
			The Contractor must then commence with maximum diligence the appraisal work pursuant to the program drawn up, it being understood that the provisions of Articles 5.2 and 5.3 here above shall apply to said program.
		

		
			9.3       Within the three (3) months following the completion of the appraisal works, and not later than thirty (30) days prior to the expiration of the third phase of the exploration period defined in Article 3.2, as may be extended pursuant to the provisions of Articles 3.3 and 3.4 here above, the Contractor shall submit to the Minister a detailed report giving all the technical and economic information relative to the deposit so discovered and appraised, and establishing the commercial character or not of the said discovery.  Such report shall in particular include the following information:  the geological and petrophysical, characteristics, and the estimated delimitation of the deposit; the results of the production tests carried out, the nature, properties and volume of Hydrocarbons which it contains, a preliminary technical and economic study on the placement of the deposit into production.
		

		
			9.4       Any quantity of Hydrocarbons produced from a discovery before the discovery has been declared commercial, if it is not utilized for the carrying-out of the Petroleum Operations, or 
		

		
			
		

		
			

		 

		

			23

		

 

		

		
			lost, shall be subject to the provisions of Article 10 of this Contract.
		

		
			9.5       A deposit considered by the Contractor to be commercially exploitable gives him the right to an Exploitation Authorization. In such case, the Contractor shall submit to the Minister, within the three (3) months following the submission of the report referred to in Article 9.3 here above, and not later than thirty (30) days prior to the expiration of the third phase of the exploration period defined in Article 3.2, possibly extended pursuant to the provisions of Articles 3.3 and 3.4 here above, an application for an Exploitation Authorization. Said application shall specify the lateral and stratigraphic delimitation of the Exploitation Perimeter, which shall cover only the presumed limits of the deposit discovered and appraised in the Exploration Perimeter then currently valid and shall be accompanied by technical justifications necessary for said delimitation. The above-cited application for an Exploitation Authorization shall be accompanied by a detailed development and production program, including in particular for the deposit in question :
		

		
			a)   An estimate of the recoverable reserves, proven and probable and of the corresponding production profile, as well as a study of the methods of recovery of hydrocarbons and development of natural gas;
		

		
			b)   A description of the works and facilities required to put the field into production, such as number of wells, facilities required for production, separation, processing, storage and transport of Hydrocarbons;
		

		
			c)   A program and a schedule for carrying out the said works and facilities, including startup date for production ;
		

		
			d)   An estimate of development investments and exploitation costs itemized for each year as well as an economic study confirming the commercial character of the deposit ;
		

		
			e)   The methods for financing such investments by each one of the entities making up the Contractor ;
		

		
			f)   An environmental impact study of the development project, carried out by the Contractor pursuant to the provisions of the Environmental Code.
		

		
			g)   An outline of a Rehabilitation Plan to return the sites to their original condition at the end of exploitation.
		

		
			The Minister may propose revisions or modifications to the development and production program referred to above, as well as to the Exploitation Perimeter applied for, in notifying the Contractor thereof with all justifying supporting data deemed appropriate, within the ninety (90) 
		

		
			
		

		
			

		 

		

			24

		

 

		

		
			days following receipt of the said program.  The provisions of Article 5.2 here above shall apply to said program with regard to its adoption.
		

		
			When the results acquired during the course of development justify changes to the development and production program, said program may be modified in utilizing the same procedure as that referred to here above for its initial adoption.
		

		
			9.6       The Exploitation Authorization shall be granted by the Minister within forty-five (45) days following the date of adoption by the Parties of the development and production program.  The granting of an Exploitation Authorization entails ipso facto the cancellation of the Exploration Authorization inside of the Exploitation Perimeter; however, the Exploration Authorization continues to be valid outside that perimeter until its expiration date, without the minimum exploration work obligation referred to in Article 4 above for the subject phase of the exploration period being modified.
		

		
			9.7       If the Contractor makes several commercial discoveries within the Exploration Perimeter, each of such will give rise, in accordance with Articles 9.5 and 9.6 here above, to a separate Exploitation Authorization corresponding to an Exploitation Perimeter. 
		

		
			9.8       If in the course of work subsequent to the grant of an Exploitation Authorization, it appears that the deposit has an extension greater than that initially provided for in Article 9.5 here above, the Minister shall grant to the Contractor, within the framework of the Exploitation Authorization already granted, the additional portion, provided that the extension is an integral part of the currently valid Exploration Perimeter and that the Contractor supplies the technical justifications for the extension applied for.
		

		
			If it appears that the deposit has an extension less than that initially provided for, the Minister may require the Contractor to relinquish the exterior portion(s) of the boundaries of the deposit.
		

		
			9.9       In the event that a deposit extends beyond the boundaries of the currently valid Exploration Perimeter, the Minister may require the Contractor to exploit such deposit together with the holder of the adjacent perimeter following the provisions of Article 53 of the Crude Hydrocarbons Code. Within the twelve (12) months following the written request of the Minister, the Contractor must submit to him, for approval, a draft development and production program of the relevant deposit drawn up in agreement with the holder of the adjacent perimeter.
		

		
			In the case where the deposit extends over one or more other perimeters which are not under contract, the process of extension of the contractual perimeter may be undertaken, pursuant to the provisions of the Crude Hydrocarbons Code.
		

		
			
		

		
			

		 

		

			25

		

 

		

		
			9.10     The Contractor must start up the development operations including the necessary studies, not later than six (6) months following the date of granting of the Exploitation Authorization referred to in Article 9.6 here above and must pursue them with the maximum diligence. The Contractor undertakes to carry out the development and production operations according to good oilfield practice in the international petroleum industry, making it possible to ensure the optimum recovery of Hydrocarbons contained in the deposit. The Contractor undertakes to proceed as soon as possible with studies of assisted recovery in consultation with the Ministry and to utilize such processes if, in the estimation of Contractor, such processes will lead under the economic conditions to an improvement of the rate of recovery. 
		

		
			9.11     The duration of the exploitation period during which the Contractor is authorized to ensure the production of a deposit declared to be commercial is set at twenty-five (25) years if the exploitation is for deposits of Crude Petroleum and thirty (30) years if the exploitation is for deposits of Dry Gas, starting from the date of granting of the corresponding Exploitation Authorization.
		

		
			Upon the expiration of the initial period of exploitation defined here above, the Exploitation Authorization may be renewed for an additional maximum period of ten (10) years upon an application by Contractor providing supporting information submitted to the Minister at least one (1) year prior to said expiration, provided that the Contractor has fulfilled all his contractual obligations during the initial exploitation period and that he proves that additional commercial production from the Exploitation Perimeter remains possible during the additional period applied for.
		

		
			9.12     For any deposit having given rise to the granting of an Exploitation Authorization, the Contractor must, without prejudice to the provisions of Article 21 here below, carry out at his own expense all appropriate and necessary Petroleum Operations to place the deposit into exploitation, in conformity with the adopted development and production program.
		

		
			However if the Contractor believes, on the basis of technical knowledge acquired on such deposit, and can make the accounting proof during the course of the development and production program or during the course of exploitation that producing from such deposit cannot be, or can no longer be, commercially profitable, even though the discovery well and the appraisal works have led to the granting of an Exploitation Authorization pursuant to this Contract, the Minister undertakes to not obligate the Contractor to pursue the works and to 
		

		
			
		

		
			

		 

		

			26

		

 

		

		
			explore with the Contractor, to the extent possible, technical and economic improvements which would permit the Contractor to consider the profitable exploitation of said deposit.  In the case where the Contractor decides not to pursue the exploitation works and if the Minister asks him to, the Contractor shall surrender the relevant Exploitation Authorization and the rights which are attached thereto.
		

		
			9.13     The Contractor may at any time, subject to so notifying the Minister in writing with an advance notice of at least six (6) months, surrender totally or in part an Exploitation Authorization, provided that he has satisfied all obligations provided for in this Contract.
		

		
			9.14     The Contractor undertakes for the duration of the Exploitation Authorizations to produce annually quantities of Hydrocarbons from each deposit according to generally accepted norms in the international petroleum industry in taking principally into consideration the rules for the proper conservation of deposits and the optimal recovery of the reserves of Hydrocarbons under economic conditions for the duration of the relevant Exploitation Authorizations.
		

		
			9.15     The ceasing of production of a deposit for a duration greater than six (6) consecutive months, decided upon by the Contractor without the consent of the Minister, may lead to the cancellation of this Contract within the terms set forth in Article 25 here below.
		

		
			9.16     The Minister may place the Contractor on notice by registered letter with return receipt to remedy the following shortcomings within a time period of three (3) months, if the latter, without duly justified reasons:
		

		
			a)   Has not submitted an appraisal work program for said discovery within the time period referred in Article 9.2 here above ;
		

		
			b)   Has not carried out the appraisal works of said discovery in conformity with the appraisal program  referred to in Article 9.2 here above ;
		

		
			c)   Or has not submitted an application for an Exploitation Authorization within the time period referred to in Article 9.5 here above.
		

		
			If the Contractor has not remedied the above shortcomings within the mentioned time period, the Minister may then demand that he relinquish immediately and without compensation all his rights within the presumed boundaries of said discovery, including the Hydrocarbons which could be produced from it.
		

		
			The State may then carry out all works of appraisal, development and production of such discovery upon condition however that it does not cause damage to the performance of the 
		

		
			
		

		
			

		 

		

			27

		

 

		

		
			Petroleum Operations of the Contractor in the Exploration Perimeter or any Exploitation Perimeter governed by the Contract.
		

		
			ARTICLE 10 :  RECOVERY OF PETROLEUM COSTS AND PRODUCTION SHARING
		

		
			10.1     From the commencement of regular Hydrocarbons production carried out pursuant to an Exploitation Authorization or an early production authorization, that production shall be shared and sold in accordance with the provisions hereafter.
		

		
			10.2     For the recovery of Petroleum Costs, the Contractor shall freely retain each Quarter, and for each Exploitation Authorization, a share of total production equal to fifty-five percent (55%) for Crude Petroleum and sixty-two percent (62%) for Dry Gas, calculated on total production which is not utilized for Petroleum Operations, nor wasted, or, if applicable, a lower percentage of production, or only a lower percentage which would be necessary and would suffice.
		

		
			The value of the share of total production allocated for the petroleum cost recovery of the Contractor as defined in the preceding subparagraph, shall be calculated in accordance with the provisions of Articles 14 and 15 here below.
		

		
			In the course of a Calendar Year, should the Petroleum Costs not yet recovered by the Contractor pursuant to the provisions of this Article 10.2 exceed the equivalent in value of fifty-five percent (55%) with respect to Crude Petroleum and sixty-two percent (62%) with respect to Dry Gas, of the total production calculated as indicated here above, the excess which cannot be recovered for the Calendar Year under consideration shall be carried forward to the following Calendar Year(s) until full recovery of Petroleum Costs or the termination of this Contract.  The recovery of Petroleum Costs for any Quarter shall be scheduled in the order stipulated in the Accounting Procedure.
		

		
			10.3     The volume of Hydrocarbons, related to each Exploitation Authorization, which remains for each Quarter after the Contractor has taken from total production the share necessary to the recovery of Petroleum Costs under the provisions of Article 10.2 here above, shall be shared between the State and the Contractor in the following manner, in the ratio of the applicable figure for the ratio “R” defined as follows:
		

			
					
						Value of « R »

					
					
						    

					
					
						Share of the State

					
					
						    

					
					
						Share of the
Contractor

					
					
						 

				
	
					
						Less than 1

					
					
						 

					
31 
					
					
						%  

					
69 
					
					
						%

				
	
					
						Greater than or equal to 1 and less than 1.5

					
					
						 

					
33 
					
					
						%  

					
67 
					
					
						%

				
	
					
						Greater than or equal to 1.5 and less than 2

					
					
						 

					
35 
					
					
						%  

					
65 
					
					
						%

				
	
					
						Greater than or equal to 2 and less than 2.5

					
					
						 

					
37 
					
					
						%  

					
63 
					
					
						%

				
	
					
						Greater than or equal to 2.5 and less than 3

					
					
						 

					
39 
					
					
						%  

					
61 
					
					
						%

				
	
					
						Greater than or equal to 3

					
					
						 

					
42 
					
					
						%  

					
58 
					
					
						%

				

		
			 
		

		
			
		

		
			

		 

		

			28

		

 

		

		
			For the application of this Article, the ratio « R » means to the ratio of « Cumulative Net Revenue » of Contractor over « Cumulative Investments » in the relevant Exploitation Perimeter, where:
		

		
			« Cumulative Net Revenue » means the sum, calculated from the Effective Date until the end of the preceding Quarter, of the value of Hydrocarbons obtained by Contractor pursuant to the provisions of Articles 10.2 and 10.3 here above ; less the Exploitation Petroleum Costs incurred by the Contractor, as such are defined and determined under the provisions of the Accounting Procedure. 
		

		
			« Cumulative Investments » means the sum, from the Effective Date up until the end of the preceding Quarter, of the Exploration Petroleum Costs and the Development Petroleum Costs incurred by the Contractor as defined and determined under the provisions of the Accounting Procedure.
		

		
			10.4     The State may receive its share of production defined in Article 10.3 here above, either in kind, or in cash.
		

		
			10.5     If the State wishes to receive in kind all of part of its share of production defined in Article 10.3 here above, the Minister shall advise the Contractor in writing not less than ninety (90) days prior to the commencement of the relevant Quarter and specify the exact quantity it wishes to receive in kind during said Quarter and the modalities of delivery, which must be specified in the lifting contract.
		

		
			For this purpose, it is agreed that the Contractor shall not commit to the sale of a part of the State production, for a term which exceeds one hundred and eighty (180) days, unless he shall have obtained the written consent of the Minister.
		

		
			
		

		
			

		 

		

			29

		

 

		

		
			10.6     If the State wishes to receive in cash all or part of its share of production specified in Article 10.3 here above, or if the Minister has failed to notify the Contractor of its decision to take a portion of the State’s production in kind in accordance with Article 10.5 here above, the Contractor is obligated to sell the State share of production which the State wishes to take in cash during the relevant Quarter, and to proceed with the liftings of such share in the course of such Quarter, and to pay the State within thirty (30) days following each lifting, an amount equal to the quantity corresponding to the portion of the State production share, multiplied by the sale price F.O.B., after deduction of the costs attributable to such sales.
		

		
			The Minister shall be entitled to request the settling of the sales of the State share of production effected by the Contractor either in Dollars or in any other convertible currency in which the transaction took place.
		

		
			ARTICLE 11 : TAX REGIME
		

		
			11.1      Each of the entities which make up the Contractor shall be subject to the Industrial and Commercial Income Tax levied on the net profits earned in relation to the Petroleum Operations in accordance with Articles 66 to 74 of the Crude Hydrocarbons Code and the provisions of the Accounting Procedure found in Annex 2 of this Contract.
		

		
			The rate of this tax is set at twenty-seven percent (27%) for the entire duration of the Contract such as defined in Article 2.2 here above.
		

		
			For the purposes of setting the amount of the  Industrial and Commercial Income Tax, the value of Hydrocarbons sold by the Contractor under Articles 10.2 and 10.3 here above to be included in net taxable profit shall be established  in accordance with the provisions of Article 14 here below.
		

		
			11.2     Without prejudice to the provisions of Article 21 here below, the Contractor shall pay to the State the following surface rentals:
		

		
			a)   two Dollars ($2) per square kilometer and per year during the first phase of the exploration period ;
		

		
			b)   three Dollars ($3) per square kilometer and per year during the second phase of the exploration period ;
		

		
			c)   four Dollars ($4) per square kilometer and per year during the third phase of the exploration period and during any extension provided for in Articles 3.3 and 3.4 here above;
		

		
			
		

		
			

		 

		

			30

		

 

		

		
			d)   one hundred seventy Dollars ($170) per square kilometer and per year during the validity of the Exploitation Authorization.
		

		
			The surface rentals referred to in paragraphs a), b) and c) here above shall be paid in advance and per year, not later than the first day of each Contract Year, for the entire Contract Year, according to the extent of the Exploration Perimeter held by the Contractor upon the due date of said rentals.
		

		
			The surface rental relative to an Exploitation Authorization shall be paid in advance and per year, at the beginning of each Calendar Year following the granting of the Exploitation Authorization or for the Calendar Year of said grant, within thirty (30) days of the date of the grant, prorated over time for the remaining duration of the current Calendar Year, according to the extent of the Exploitation Perimeter upon such date.
		

		
			In the case of relinquishment of the surface during the course of a Calendar Year or during the course of an event of Force Majeure, the Contractor shall have no right to any reimbursement of surface rentals already paid.
		

		
			The amounts referred to in this Article 11.2 are not considered recoverable Petroleum Costs under the provisions of Article 10.2 here above, nor are they considered as deductible costs for setting the basis of the Industrial and Commercial Income Tax in accordance with Article 76 of the Crude Hydrocarbons Code.
		

		
			11.3     The Contractor shall be subject to taxes and fees as well as to withholdings at source and other tax obligations applicable to contractors pursuant to Title VI of the Crude Hydrocarbons Code.
		

		
			11.4     The subcontractors of the Contractor as well as the personnel of the Contractor and of his subcontractors shall be subject to the generally applicable tax provisions, subject to the provisions of Title VI of the Crude Hydrocarbons Code which are applicable to them.
		

		
			11.5    The shareholders of the entities making up the Contractor and their Affiliated Companies shall benefit from the exemptions provided for in Article 86 of Title VI of the Crude Hydrocarbons Code. 
		

		
			11.6     Except for taxes, fees and dues provided in Title VI of the Crude Hydrocarbons Code, for special taxes related to the utilization of drinking water or of irrigation water provided for in Article 6 .4 here above, for the surface rentals provided for in Article 11.2 here above, for the bonuses provided for in Article 13 here below andfor the payment referred to in Article 12.2 here below, the Contractor shall not be subject to any tax, fees, royalties, payments and 
		

		
			
		

		
			

		 

		

			31

		

 

		

		
			contributions of any nature whatsoever, be they national, regional or municipal, either in effect now or in the future, which may burden the Petroleum Operations, and of any revenue derived therefrom or more generally, the property, the activities or action of the Contractor, including its facility, its money transfers, and its operation in implementation of this contract, provided, however, that these exemptions are only applicable to Petroleum Operations.
		

		
			Pursuant to Article 83-2o of the Crude Hydrocarbons Code, the rendering of services directly related to Petroleum Operations shall, in particular, be subject to VAT at the rate of zero, when the service rendered, the right transferred or the item rented are reused or exploited in Mauritania, pursuant to Article 177 B of the General Tax Code.
		

		
			The foregoing exemptions in this Article do not cover services actually rendered to Contractor by public Mauritanian administrations and local governmental departments or units.  However, the tariffs levied in such cases on the Contractor, its subcontractors, transporters, customers and agents must be reasonable in relation to the services rendered and must not exceed the tariffs generally applicable for these same services by the same public Mauritanian administrations and local governmental departments or units.   The cost of these services shall be considered recoverable Petroleum Costs in accordance with Article 10.2 of this Contract.
		

		
			ARTICLE 12 :  PERSONNEL
		

		
			12.1     From the beginning of the Petroleum Operations, the Contractor undertakes to ensure the employment on a priority basis, with equal qualification, of Mauritanian personnel and to contribute to the training of such personnel, in order to allow their accession to all employment as qualified workers, supervisors, management, engineers and directors.
		

		
			To this end, the Contractor shall establish in agreement with the Ministry at the end of each Calendar Year, a recruitment plan of Mauritanian personnel and a plan for training and skills improvement in order to attain a greater and greater participation of Mauritanian personnel in the Petroleum Operations.
		

		
			12.2     The Contractor must also contribute to the training and skills improvement of the agents of the Ministry and to the other purposes referred to in Article 80 of the Crude Hydrocarbons Code, according to a plan established by the Ministry at the end of each Calendar Year.
		

		
			
		

		
			

		 

		

			32

		

 

		

		
			To this end, the Contractor shall pay to the State, for said training and job skills improvement plan, an amount of three hundred thousand Dollars ($300,000) per Calendar Year during the validity of the Exploration Authorization, and, starting from the granting of an Exploitation Authorization, an amount of six hundred thousand Dollars ($600,000) per Calendar Year. The above-cited payments shall be considered to be nonrecoverable Petroleum Costs with respect to the provisions of Article 10.2 here above but as deductible charges on the Industrial and Commercial Income Tax in conformity with Article 82 of the Crude Hydrocarbons Code.
		

		
			ARTICLE 13 : BONUSES
		

		
			13.1     The Contractor shall pay to the State a signature bonus in the amount of four million Dollars ($4,000,000) within the thirty (30) days following the Effective Date.
		

		
			13.2     Moreover, the Contractor shall pay to the State the following production bonuses:
		

		
			a)   six million Dollars ($6,000,000) when the regular commercial production of Hydrocarbons extracted from the Exploitation Perimeter(s) reaches for the first time an average rate equal to twenty-five thousand (25,000) Barrels of Crude Petroleum per day during a period of thirty (30) consecutive days;
		

		
			b)   eight million Dollars ($8,000,000) when the regular commercial production of Hydrocarbons extracted from the Exploitation Perimeter(s) reaches for the first time an average rate equal to fifty thousand (50,000) Barrels of Crude Petroleum per day for a period of thirty (30) consecutive days;
		

		
			c)   tweleve million Dollars ($12,000,000) when the regular commercial production of Hydrocarbons extracted from the Exploitation Perimeter(s) reaches for the first time an average rate equal to one hundred thousand (100,000) Barrels of Crude Petroleum per day for a period of thirty (30) consecutive days ;
		

		
			d)   twenty million Dollars ($20,000,000) when the regular commercial production of Hydrocarbons extracted from the Exploitation Perimeter(s) reaches for the first time an average rate equal to one hundred fifty thousand (150,000) Barrels of Crude Petroleum per day for a period of thirty (30) consecutive days.
		

		
			
		

		
			

		 

		

			33

		

 

		

		
			Each of the sums referred to in paragraphs a), b), c) and d) here above shall be paid within the thirty (30) days following the above-cited period of reference.
		

		
			13.3     The sums referred to in Articles 13.1 and 13.2 here above shall not be considered as recoverable Petroleum Costs with respect to the provisions of Article 10.2 here above, nor considered to be deductible charges for the determination of the Industrial and Commercial Income Tax  pursuant to Article 79 of the Crude Hydrocarbons Code.
		

		
			ARTICLE 14 : PRICE AND MEASUREMENT OF HYDROCARBONS
		

		
			14.1     The unitary market price of the Crude Petroleum used in consideration for purposes of Articles 10 and 11 here above shall be the “Market Price” F.O.B. the Delivery Point, expressed in Dollars per Barrel, as determined here below for each Quarter.
		

		
			A Market Price shall be established for each type of Crude Petroleum or blend of Crude Petroleums.
		

		
			14.2    The Market Price applicable to Crude Petroleum lifted in the course of a Quarter shall be calculated at the end of each Quarter under consideration, and shall be equal to the weighted average of prevailing prices obtained by the Contractor and the State in the course of their sale of Crude Petroleum to Third Parties in the course of the Quarter under consideration, adjusted as appropriate to reflect differentials in quality and density, and on the terms of F.O.B. delivery and payment terms provided the quantity sold in such manner to Third Parties in the course of the Quarter under consideration corresponds to no less than thirty percent (30%) of the total of the volumes of Crude Petroleum extracted from the Exploitation Perimeters existing under this Contract, taken as a whole, and sold in the course of the said Quarter.
		

		
			14.3     If such Third Party sales do not take place during the Quarter under consideration, or if they constitute less than thirty percent of the total of the quantities of Crude Petroleum of the Exploitation Perimeter granted under the present Contract taken as a whole and sold in the course of the said Quarter, the Market Price shall be arrived at by comparison with the « Current International Market Price » for the Quarter under consideration of the qualities of Crude Petroleum produced in Mauritania and in neighboring producing countries, taking into account differentials of quality, density, transport and terms of payment.
		

		
			« Current International Market Price »  shall be a reference price based on Dated Brent prices, as such are published in “Platt’s Crude Oil Marketwire” or similar internationally recognized 
		

		
			
		

		
			

		 

		

			34

		

 

		

		
			publication, averaged for the month(s) during which sales were made and adjusted for differences in quality, API  gravity, terms of FOB delivery and payment terms.  If Dated Brent is replaced by another internationally recognized reference crude, the published quotes of the replacement crude shall be used instead.
		

		
			14.4     In particular the following transactions are not taken into account in calculating the Market Price of the Crude Petroleum:
		

		
			a)   Sales in which the buyer is an Affiliated Company of the seller as well as sales between entities making up the Contractor;
		

		
			b)   Sales which include some consideration other than payment in freely-convertible currency or sales attributable in whole or in part to motivations other than the usual economic incentives attached to sales of Crude Petroleum on the international market (such as barter contracts, sales from government to government or to governmental units).
		

		
			14.5     A committee presided over by the Minister or his delegate and including other representatives of the State and those of the Contractor shall meet at the request of its president, at the end of each Quarter, to establish, according to the stipulations of this Article 14, the Market Price of the Crude Petroleum produced, applicable to the Quarter elapsed. The decisions of the committee shall be by unanimous vote.
		

		
			If no agreement can be reached by the committee on a decision within a time period of thirty (30) days after the end of the relevant Quarter, the Market Price of the Crude Petroleum produced shall be definitively determined by an expert of international reputation, appointed by agreement of the Parties, or, if such agreement is not reached, by the International Centre for Expertise of the International Chamber of Commerce.  The expert shall establish the price according to the stipulations of this Article 14 within a time period of twenty (20) days after his appointment.  The costs of expertise shall be shared equally between the Parties.
		

		
			14.6     While awaiting the determination of the price, the Market Price provisionally applicable to a Quarter shall be the Market Price of the preceding Quarter.  Any necessary adjustment shall be made not later than thirty (30) days after the determination of the Market Price for the Quarter under consideration.
		

		
			14.7     The Contractor shall measure all the Hydrocarbons produced after extraction of water and connected substances, in utilizing, with the consent of the Ministry, the instruments and procedures in conformity with the methods in force in the international petroleum industry.  The Ministry shall have the right to examine such measures and to check the instruments and 
		

		
			
		

		
			

		 

		

			35

		

 

		

		
			procedures utilized.
		

		
			If during the course of exploitation the Contractor wishes to modify such instruments and procedures, he must obtain the prior consent of the Ministry.
		

		
			If, during the course of an inspection carried out by the Ministry, it is verified that the measuring instruments are inaccurate and exceed the acceptable tolerances, and that this condition of fact is confirmed by an independent expert, the inaccuracy in question shall be considered as having existed for half of the period since the preceding inspection, unless a different period is demonstrated.  The accounting of the Petroleum Costs and the shares of production and liftings of the Parties shall be the subject of appropriate adjustments within thirty (30) days following receipt of the expert’s report.
		

		
			14.8     For Dry Gas, the provisions of this Article 14 shall apply mutatis mutandis, subject to the provisions of Article 15 here below.
		

		
			ARTICLE 15 :  NATURAL GAS
		

		
			Non-Associated Natural Gas
		

		
			15.1     In the case where a discovery referred to in Article 9.1 here above concerns a deposit of Non-Associated Natural Gas which the Contractor has undertaken to appraise pursuant to Article 9.2 here above, the Minister and the Contractor shall jointly carry out, in parallel with the appraisal works of the discovery in question, a market study intended to evaluate the possible market outlets for such Natural Gas, both on the local and the export markets, as well as the means necessary for its marketing, and shall consider the possibility of a joint marketing of their shares of production.  The study shall in particular determine the quantities for which sale on the local market can be assured as a fuel or as a raw material, the facilities and arrangements necessary for the sale of such Natural Gas to the utilizing enterprises or to the entity of the State in charge of its distribution, as well as the discounted price which shall be determined pursuant to the principles set forth in Article 15.8 here below.
		

		
			For purposes of evaluating the commercial value of the discovery of the Non-Associated Natural Gas, the Contractor shall have the right pursuant to Article 3.4 here above to an extension of his Exploration Authorization.
		

		
			If following the appraisal of a discovery of Non-Associated Natural Gas, it is shown that the development requires specific economic terms in order to make it economically viable in the opinion of each of the two Parties, the Parties may agree, on an exceptional basis, on said terms.
		

		
			
		

		
			

		 

		

			36

		

 

		

		
			15.2     At the end of appraisal works, in the case where the Parties should decide to jointly exploit such Natural Gas in order to supply the local market, or in the case where the Contractor should decide to exploit it for export, the latter shall submit, prior to the end of the Exploration Authorization, an application for an Exploitation Authorization which the Minister shall grant within the terms set forth in Article 9.6 here above.
		

		
			The Contractor shall then proceed with the development and the production of such Natural Gas pursuant to the development and production program submitted to the Minister and approved by the latter within the terms provided for in Article 9.5.  The provisions of this Contract applicable to Crude Petroleum shall apply mutatis mutandis to the Natural Gas, subject to the special provisions provided for in Articles 15.7 to 15.9 here below.
		

		
			In the case where the production is intended in whole or in part for the local market, a supply contract shall be entered into, under the supervision of the Minister, between the Contractor and the enterprise of the State responsible for the distribution of the gas.  The Contract shall define the obligations of the parties in the matter of delivery and lifting of the commercial gas and may contain a clause obligating the purchaser to pay a portion of the price in the event of a default in the lifting of the contractual quantities.
		

		
			15.3     If an appraisal program or application for an Exploitation Authorization has not been submitted within the time periods allowed for in Articles 9.2 and 9.5 here above, the surface comprising the extent of the deposit of Non-Associated Natural Gas shall be, upon the request of the Minister, relinquished to the State, which shall be able to undertake for its own account all works of placement into exploitation of the deposit in question.
		

		
			Associated Natural Gas
		

		
			15.4     In the event of a discovery of a commercially exploitable deposit of Crude Petroleum containing Associated Natural Gas, the Contractor shall indicate in the report provided for in Article 9.3 here above whether he considers that the production of such Associated Natural Gas is likely to exceed the quantities necessary for the purposes of Petroleum Operations relative to the production of Crude Petroleum, including therein the operations of reinjection, and whether it considers that such excess is likely to be produced in marketable quantities.  In the case where the Contractor will have advised the Minister of such an excess amount, the Parties shall jointly evaluate the possible markets for such excess amount, both on the local and the export markets, including therein the possibility of a joint marketing of their shares of production of such excess 
		

		
			
		

		
			

		 

		

			37

		

 

		

		
			amount as well as the means necessary for its marketing.
		

		
			In the case where the Parties should agree to exploit the excess amount of the Associated Natural Gas, or in the case where the Contractor should decide to exploit such amount for export, the Contractor shall indicate in the development and production program referred to in Article 9.5 here above the additional facilities necessary for the development and exploitation of such excess amount and his estimate of the costs pertaining thereto.
		

		
			The Contractor must then proceed with the development and the exploitation of such excess amount pursuant to the development and production program submitted and approved by the Minister within the terms set forth in Article 9.5 here above, and the provisions of this Contract applicable to the Crude Petroleum shall apply mutatis mutandis to the excess quantity of Natural Gas, subject to the special provisions set forth in Articles 15.7 to 15.9 here below.
		

		
			A similar procedure to that described in the paragraph here above shall be followed if the marketing of the Associated Natural Gas is decided upon during the course of the exploitation of a deposit.
		

		
			15.5     In the case where the Contractor should decide not to exploit the excess amount of Associated Natural Gas and if the State should at any time desire to utilize it, the Minister shall so advise the Contractor, in which case:
		

		
			a)   The Contractor shall freely place at the disposal of the State all or a portion of the excess amount which the State desires to lift, at the exit point of the separation facilities;
		

		
			b)   The State shall be responsible for the collection, the processing, compression and transport of such excess amount from the above-mentioned separation facilities, and shall bear all additional costs pertaining thereto;
		

		
			c)   The construction of the facilities necessary for the operations referred to in paragraph b) here above, as well as the lifting of the excess amount by the State, shall be accomplished pursuant to good oilfield practices in the international petroleum industry and in such a manner so as not to impede production, lifting and transport of the Crude Petroleum by the Contractor.
		

		
			15.6     Any excess amount of Associated Natural Gas which is not utilized within the framework of Articles 15.4 and 15.5 here above must be reinjected by the Contractor, unless Contractor technically demonstrates that such reinjection would result in a reduction of maximum oil recovery, in which case Contactor shall be authorized to flare said excess and shall be subject to 
		

		
			
		

		
			

		 

		

			38

		

 

		

		
			the penalty provided for in Article 6.4.
		

		
			Common Provisions
		

		
			15.7     The Contractor shall have the right to dispose of his share of production of Natural Gas, pursuant to the provisions of this Contract. He shall also have the right to proceed with the separation of liquids of all Natural Gas produced, and to transport, store, as well as to sell on the local or export market his share of the liquid Hydrocarbons thus separated, which Hydrocarbons shall be considered as Crude Petroleum for purposes of their sharing between the Parties according to Article 10 here above.
		

		
			15.8     For purposes of this Contract, the Market Price of the Natural Gas, expressed in Dollars per million of BTU, shall be equal:
		

		
			a)   To the price obtained from buyers with regard to export sales of Natural Gas to Third Parties;
		

		
			b)   With regard to sales on the local market of the Natural Gas as a fuel, to a price to be mutually agreed upon between the Minister or the national entity in charge of the distribution of gas on the local market, and the Contractor, on the basis in particular of the market rate of a fuel substitute for Natural Gas.
		

		
			15.9     For purposes of the application of Articles 10.2, 10.3 and 13.2  here above, the quantities of Natural Gas available after deduction of quantities reinjected, flared and those utilized for purposes of the Petroleum Operations shall be expressed in number of Barrels of Crude Petroleum such that one hundred sixty-five (165) cubic meters of Natural Gas measured at a temperature of 15.6°C and at an atmospheric pressure of 1.01325 bars are deemed to be equal to one (1) Barrel of Crude Petroleum, except as otherwise agreed between the Parties.
		

		
			ARTICLE 16 : TRANSPORT OF HYDROCARBONS BY PIPELINES
		

		
			16.1     The Contractor shall have the right, for the validity term of the Contract and within the terms defined in Title V of the Crude Hydrocarbons Code, to process and transport within its own facilities inside of the territory of Mauritania and to cause to be processed and transported, while retaining ownership, the products resulting from its exploitation activities or its share of such products, to points of storage, processing, lifting, or gross consumption.
		

		
			
		

		
			

		 

		

			39

		

 

		

		
			16.2     In the case where agreements having as their purpose to permit or to facilitate transport by pipelines of Hydrocarbons through other states should come to be agreed upon between such states and the Mauritanian State, the latter shall grant to the Contractor without discrimination all the benefits which could result from the execution of such agreements..
		

		
			16.3     Within the framework of its transport operations, the Contractor shall benefit from the rights and shall be subject to the obligations provided for in Title V of the Crude Hydrocarbons Code.
		

		
			ARTICLE 17 : OBLIGATION FOR SUPPLYING THE DOMESTIC MARKET
		

		
			17.1     The Contractor has the obligation of participating in meeting the needs of domestic consumption of Hydrocarbons, except for exports of petroleum products, pursuant to the provisions of Article 41 of the Crude Hydrocarbons Code.
		

		
			17.2     The Minister shall notify the Contractor in writing, not later than the 1st of October of each Calendar Year, the quantities of Hydrocarbons which the State chooses to purchase pursuant to this Article, during the course of the following Calendar Year.  The deliveries shall be made, to the State or to the person designated by the Minister, by quantities and at regular time intervals during the course of said Year, according to terms set by agreement of the parties.
		

		
			17.3     The price of the Hydrocarbons so sold by the Contractor to the State shall be the Market Price established according to the provisions of Articles 14 and 15.8 here above; it shall be payable to the Contractor in Dollars within sixty (60) days from the date of delivery.  A sales contract shall be entered into between the State and the Contractor which shall establish payment procedures and pertaining guarantees.
		

		
			ARTICLE 18 : IMPORTATION AND EXPORTATION
		

		
			18.1     The Contractor shall have the right to import into Mauritania, for its account or for that of its subcontractors, all merchandise, materials, machines, equipment, spare parts and consumable materials necessary for the proper execution of Petroleum Operations and specified in a customs list established by the Ministry, upon the proposal of the Contractor, pursuant to Article 92 of the Crude Hydrocarbons Code.
		

		
			It is understood that the Contractor and his subcontractors undertake to proceed with the importing defined here above only to the extent that said materials and equipment are not 
		

		
			
		

		
			

		 

		

			40

		

 

		

		
			available in Mauritania upon equivalent conditions in terms of price, quantity, quality, terms of payment and time period for delivery.
		

		
			18.2     The imports and re-exports of the Contractor and of his subcontractors are subject to the customs regime set forth in Articles 90 to 96 of the Crude Hydrocarbons Code.
		

		
			18.3     The Contractor, his clients and their transporters shall have, for the duration of the Contract, the right to freely export at the point of exportation chosen for such purpose, free of all customs duties and taxes and at any time whatsoeverand pursuant to the provisions of the Crude Hydrocarbons Code, the portion of Hydrocarbons to which the Contractor is entitled according to the provisions of the Contract, after deduction of all deliveries made to the State pursuant to Article 17. However, the Contractor undertakes, at the request of the State, not to sell the Hydrocarbons produced in Mauritania to countries declared hostile to the State.
		

		
			ARTICLE 19 :  FOREIGN EXCHANGE
		

		
			19.1     The Contractor shall benefit from the rights and is subject to the obligations provided for in Title VII of the Crude Hydrocarbons Code in matters of control of foreign exchange and of protection of investments.
		

		
			ARTICLE 20 :  BOOK-KEEPING, MONETARY UNIT, ACCOUNTING
		

		
			20.1     The records and books of account of the Contractor shall be kept according to the accounting rules generally utilized in the international petroleum industry, pursuant to the regulations in force and with the Accounting Procedure defined in Appendix 2 of this Contract.
		

		
			20.2     The records and books of account shall be kept in the English language and denominated in Dollars. They shall be fully supported by detailed documentation proving the expenses and receipts of the Contractor with respect to this Contract.
		

		
			Such records and books of account shall be utilized in particular to determine Petroleum Costs, and the net profits of the Contractor subject to the Industrial and Commercial Income Tax pursuant to Articles 66 et seq of the Crude Hydrocarbons Code. They must contain the accounts of the Contractor highlighting the sales of Hydrocarbons under the terms of this Contract.
		

		
			For informational purposes, the accounting of profits and balance sheets shall be kept in Ouguiyas.
		

		
			
		

		
			

		 

		

			41

		

 

		

		
			20.3    The originals of the records and accounting books referred to in Article 20.1 here above can be kept at the central headquarters of the Contractor, up until the Contractor is granted the first Exploitation Authorization, with at least one copy in Mauritania. Starting from the month during the course of which such Exploitation Authorization is granted to the Contractor, the originals of said records and accounting books as well as the supporting documents pertaining thereto shall be kept in Mauritania.
		

		
			20.4    The Minister, after having informed the Contractor in writing, may cause to have the records and books of account relative to the Petroleum Operations examined and verified by auditors of his choice or by his own agents, according to the terms specified in the Accounting Procedure.  He shall have a period of three (3) years following the end of a given Calendar Year to carry out the examinations or verifications concerning said Calendar Year and present to the Contractor his objections for any contradictions or errors noted at the time of such examinations or verifications.  The Parties may agree to extend this time period by one additional year if special circumstances so justify it.
		

		
			For Petroleum Costs incurred before the first year of production of Hydrocarbons, the time period of verification and of rectification is extended to the end of the second Calendar Year following the Calendar Year during which the first lifting of Hydrocarbons takes place.
		

		
			The Contractor is required to furnish all necessary assistance to persons appointed by the Minister for this purpose and to facilitate the services they are rendering.  The reasonable expenses for examination and of verification shall be reimbursed to the State by the Contractor and shall be considered to be recoverable Petroleum Costs according to the provisions of Article 10.2 here above.
		

		
			20.5     The sums due to the State or to the Contractor shall be payable in Dollars or in a convertible currency chosen by common agreement between the Parties.
		

		
			In the event of a delay in payment, the sums due shall bear interest at the LIBOR rate +5% starting from the day that they should have been paid up until their payment, with monthly compounding of interest if the payment is more than thirty (30) days late.
		

		
			ARTICLE 21 :  PARTICIPATION OF THE STATE
		

		
			21.1     The State shall acquire on the Effective Date, through the National Enterprise (Société Mauritanienne des Hydrocarbures et de Patrimoine Minier - SMHPM) referred to in Article 6 of the Crude Hydrocarbons Code, a carried interest of ten percent (10%) in the rights and obligations of the Contractor in the Exploration Perimeter.  The entities of the Contractor, other than the National Enterprise, shall finance the share of the latter in all Petroleum Costs corresponding to the exploration Petroleum Operations including 
		

		
			
		

		
			

		 

		

			42

		

 

		

		
			therein the evaluation/appraisal of discoveries made in the Exploration Perimeter, during the entire duration of the Exploration Authorization which is the subject of Article 3 here above.
		

		
			Additionally, to assist the National Enterprise with capacity building the Contractor, other than the National Enterprise, will advance to the National Enterprise, for each Calendar Year during the exploration period until first production is achieved from an Exploration Perimeter, an annual amount of two hundred thousand Dollars ($200,000) reimbursable by the National Enterprise in the event there is exploitation from the the Exploration Perimeter.  The Contractor will not be subject to any tax or charge of any nature on account of this reimbursemnet or any gaains resulting therefrom.  The method of reimbursement of these amounts will be specified in the JOA.
		

		
			The National Enterprise, as an entity of the Contractor, shall benefit on account of and pro rata to its participation from the same rights and benefits and is subject to the same obligations as the other members of the Contractor, subject to the provisions of this Article 21.
		

		
			21.2     The State shall have the option to acquire, through the National Enterprise, a participation in the Petroleum Operations in any Exploitation Perimeter resulting from the Exploration Perimeter within the limits indicated in Article 21.3 here below. 
		

		
			In such case, the National Enterprise shall be the beneficiary, on account of and pro rata to its participation, of the same rights and subject to the same obligations as those of the Contractor defined in this Contract, subject to the provisions of this Article 21.
		

		
			In order to avoid any ambiguity, the participation of the State in the Exploration Perimeter shall continue to be carried by the entities of the Contractor pursuant to the provisions of Article 21.1 here above.
		

		
			21.3     In the case of the exercise by the State of the option of participation in an Exploitation Perimeter mentioned in Article 21.2 here above, such participation may not be less than ten percent (10% ) and may not exceed eighteen percent ( 18%).
		

		
			21.4     Not later than six (6) months starting from the date of the grant of an Exploitation Authorization, the Minister must notify the Contractor in writing of the decision of the State to exercise its option of participation in specifying the percentage chosen within the limit set forth in Article 21.3 here above.
		

		
			
		

		
			

		 

		

			43

		

 

		

		
			Said participation shall take effect starting from the date of receipt of notification of the exercise of the option of the State.
		

		
			In order to avoid any ambiguity, the State shall have no participation in Petroleum Operations in any Exploitation Perimeter from the Exploration Perimeter if he does not exercise the option mentioned in Article 21.2 here above.
		

		
			21.5     Starting from the effective date of its participation, which is the subject of Articles 21.2 to 21.4 here above, the State shall finance the Petroleum Costs in the relevant Exploitation Perimeter pro rata to its participation.
		

		
			The State shall reimburse to the entities of the Contractor, other than the National Enterprise, pursuant to Article 21.6 here below, pro rata to its participation, the Petroleum Costs not yet recovered relative to said Exploitation Perimeter and incurred since the Effective Date (with the exclusion of exploitation Petroleum Costs (OPEX) and financing costs), up until the date of receipt of notification referred to in Article 21.4 here above.
		

		
			The Contractor shall not be subject to any tax of any type whatsoever, by reason of such reimbursements or possible added value pertaining thereto.
		

		
			21.6     The State shall assign and shall continue to assign to the Contractor thirty percent (30%) of the share of production to which it is entitled from its participation and as recovery of Petroleum Costs pursuant to Article 10.2 here above and the Accounting Procedure constituting Appendix 2, until the cumulative value of such transfers or reimbursements, appraised according to the provisions of Articles 14 and 15 here above, is equal to one hundred fifteen percent (115%) of the Petroleum Costs prior to the Effective Date of the participation and referred to in the second paragraph of Article 21.5 here above.
		

		
			21.7     In order to remove any ambiguity, the reimbursement of the exploration Petroleum Costs stipulated in Articles 21.5 and 21 .6 here above, does not in any way include the sums paid by the Contractor with respect to Article 13 of this Contract.
		

		
			21.8     The reimbursements which will be made by the State with respect to the provisions of Articles 21.5 and 21.6 here above, shall be paid in kind by the State which shall transfer to the entities of the Contractor, other than the National Enterprise, each Quarter at the Delivery Point the percentage of its quarterly share of production of Hydrocarbons
		

		
			
		

		
			

		 

		

			44

		

 

		

		
			stipulated in said Articles.
		

		
			However, the State reserves the option to make said reimbursements in Dollars for which the payment in full must take place within a time period of ninety (90) days starting from the effective date of the participation referred to in Article 21.4 here above.
		

		
			In the event that the payment of all said reimbursements within the time periods provided here above does not take place, the reimbursement in kind such as referred to in Articles 21.5 and 21.6 here above shall apply.
		

		
			21.9     The practical methods of participation of the State stipulated in Article 21.1 here above as well as the rules and obligations of the entities of the Contractor, including therein the National Enterprise, shall be determined in an association contract (JOA), substantially conforming to the AIPN model JOA, which shall be entered into between these entities and shall enter into force not later than ninety (90) days starting from the Effective Date.  Said association contract (JOA) shall be amended as necessary and in particular to take into account, if applicable, the exercise by the State of its participation, which is the subject of Article 21.2 here above.
		

		
			21.10   The National Enterprise, on the one hand, and the other entities making up the Contractor on the other hand, shall not be jointly and severally liable for the obligations resulting from this Contract vis-a-vis the State. The National Enterprise shall be individually responsible vis-à-vis the State for its obligations such as provided in this Contract.  Any default of the National Enterprise to execute any of its obligations shall not be considered as a default of the other entities making up the Contractor and shall in no event be invoked by the State in order to cancel this Contract. The association of the National Enterprise to the Contractor, shall not under any circumstance cause void nor affect the rights of the other entities constituting the Contractor to have recourse to the arbitration clause provided in Article 28 here below.
		

		
			ARTICLE 22 :  ASSIGNMENT
		

		
			22.1     The rights and obligations resulting from this Contract may not be assigned to a Third Party, wholly or in part, by any of the entities making up the Contractor, without the prior approval of the Minister.
		

		
			
		

		
			

		 

		

			45

		

 

		

		
			If within the three (3) months following notification to the Minister of a proposed assignment accompanied by the necessary information to prove the technical and financial means of the assignee as well as the terms and conditions of assignment, the Minister has not given notice of his opposition with reasonable justification, such assignment shall be deemed to have been approved by the Minister.
		

		
			Starting from the date of approval, the assignee shall acquire the status of a member of the Contractor and must satisfy the obligations imposed upon the Contractor by this Contract.
		

		
			Each of the entities making up the Contractor may freely and at any time assign all or a portion of its interests under the Contract to an Affiliated Company or to another entity of the Contractor provided that the Minister is notified beforehand.
		

		
			22.2     Likewise, the Contractor, or any entity of the Contractor, shall be required to submit for prior approval of the Minister:
		

		
			a)   Any plan which would be likely to lead, in particular through a new allocation of capital stock, to a change of the direct control of the Contractor or of an entity comprising the Contractor. In particular the following shall be considered as elements of control of the Contractor, or of an entity comprising the Contractor:  a change in the allocation of capital stock, the nationality of the majority shareholders, as well as the statutory provisions relative to the registered office and the rights and obligations attached to the company shares with respect to the majority required at the shareholder meetings.  However, the transfers of company shares to Affiliated Companies may be freely made subject to prior declaration to the Minister for information and application of the provisions of Article 24.4 here below, if applicable.  As for transfer of company shares to Third Parties, transfers shall not be subject to the approval of the Minister unless they result in the transfer of greater than thirty percent (30%) of the capital of the enterprise.
		

		
			b)   Any plan to pledge as security property and facilities earmarked for Petroleum Operations.
		

		
			The plans referred to in paragraphs a) and b) shall be notified to the Minister.  If within a time period of three (3) months, the Minister has not notified the Contractor or one of the entities in question of his opposition with reasonable justification to said plans, the plans shall be deemed approved.
		

		
			
		

		
			

		 

		

			46

		

 

		

		
			22.3     When the Contractor is made up of several entities, it shall furnish to the Minister, within the month following its signature, a copy of the association agreement (JOA) binding the entities and of all modifications which could be made to said agreement, in specifying the name of the enterprise appointed as Operator for the Petroleum Operations. Any change of Operator shall be submitted to the approval of the Minister, pursuant to the provisions of Article 6.2 here above.
		

		
			22.4     The transfers made in violation of the provisions of this Article 22 shall be null and void.
		

		
			ARTICLE 23 : OWNERSHIP, USAGE AND ABANDONMENT OF PROPERTY
		

		
			23.1    The Contractor shall be the owner of property, moveable and immoveable, which he will have acquired for purposes of the Petroleum Operations, and shall retain the full usage thereof, as well as the right to export them or to transfer them to Third Parties during the entire term of the Contract, provided that the State may acquire for free, at the request of the Minister, all or a portion of the property belonging to the Contractor which will have been utilized for the Petroleum Operations and for which the acquisition costs will have been fully recovered pursuant to Article 10 here above in the following cases:
		

		
			a)   Upon expiration, surrender or termination of this Contract ;
		

		
			b)   In the event of surrender or of expiration of an Exploitation Authorization, with regard to the works and facilities situated in the Exploitation Perimeter and the equipment earmarked exclusively for Petroleum Operations in the Exploitation Perimeter in question, unless the Contractor wishes to utilize such property for the Petroleum Operations in other Exploitation Perimeters resulting from the Exploration Perimeter.
		

		
			23.2     Upon the expiration, surrender or termination of any Exploitation Authorization, the Contractor must proceed with all operations necessary to rehabilitate its original condition in conformity with a Remediation Plan drawn up and financed within the following terms:
		

		
			a)   No less than ninety (90) days after the commencement of commercial production pursaunt to an  approved development program for a deposit, the Contractor shall prepare and submit to the Minister for approval a Remediation Plan of the site, in conformity with good oilfield practices of the international petroleum industry, which he proposes to carry out at the end of production operations, as well as the corresponding budget.  Each Calendar Year the Contractor shall incorporate into the Remediation Plan the necessary revisions to take into account the changes of technical and financial parameters. The revised
		

		
			
		

		
			

		 

		

			47

		

 

		

		
			Remediation Plan shall become the new Remediation Plan which shall be taken into account for the calculation of the payments on the sequestered account ;
		

		
			b)   The Remediation Plan shall include a detailed description of the works of removal and/or of securing of infrastructure such as the platforms, the storage facilities, the wells, pipes, gathering lines, etc., necessary for the protection of the environment and of persons;
		

		
			c)   The Minister may, in consultation with the Minister in charge of the Environment, propose revisions or modifications to the Remediation Plan, notifying the Contractor thereof in writing with all appropriate justifying supporting information, within the ninety (90) days following receipt of said Plan. The provisions of Article 5.2 here above shall apply to said Plan with regard to its adoption.  When the results acquired during the course of exploitation justify changes to the Remediation Plan, said Plan and the corresponding budget may be modified in conformity with the adoption procedure described here before;
		

		
			d)   For purposes of financing the operations set forth in the Remediation Plan, the Contractor shall open, as of the adoption of this Plan, a sequestered account with a top tier international banking establishment acceptable to the Minister, which he will fund starting from the Quarter following the adoption of the Remediation Plan via annual payments of amounts and according to a schedule, based on an amortization of the unit of production basis or otherwise determined in agreement with the Minister ;
		

		
			e)   The funds paid into the sequestered account shall be treated as recoverable Petroleum Costs according to the terms set forth in Article 10.2 here above, and shall be considered to be deductible charges for the determination of the tax on industrial and commercial profits.  Such funds, as well as the interest received on the sequestered account, shall be earmarked exclusively for the payment of expenses linked to the operations of the Remediation Plan ;
		

		
			f)   The Contractor shall notify the Minister, with an advance notice of one hundred eighty (180) days, of his intention to start up the operations set forth in the Remediation Plan, unless the Minister notifies Contractor within thirty (30) days following the above-cited opinion that:
		

		
			(i) the exploitation of the deposit of the Exploitation Perimeter in question shall be pursued by the State or by a Third Party, or
		

		
			(ii) the State wishes to retain the facilities for justifiable reasons.
		

		
			
		

		
			

		 

		

			48

		

 

		

		
			In the two cases cited in i) and ii) here above, the sequestered account shall be transferred to  the successor responsible party and Contractor is relieved of all liability with regard to the Remediation Plan and the sequestered account pertaining to the deposit in question;
		

		
			g)   In the case where the expenses necessary for the execution of the Rehabilitation Plan are greater than the amount available in the sequestered account, the excess amount shall be entirely at the expense of the Contractor;
		

		
			h)   The Contractor shall pay to the State upon completion of Rehabilitation Plan any residual amount of the sequestered account not utilized for the carrying out of the Rehabilitation Plan and which will have been recovered under this Article 10.2 here above.
		

		
			ARTICLE 24 : LIABILITY AND INSURANCE
		

		
			24.1     The Contractor shall indemnify and hold harmless any person, including the State, for any damage or loss that the Contractor, his employees or his subcontractors and their employees may cause to the person, property or rights of other persons, by reason of or during Petroleum Operations.
		

		
			In the event the liability of the State is implicated by reason of or during the course of Petroleum Operations, the Minister must so advise the Contractor, who shall conduct the defense in this regard and shall indemnfiy the State for any sum which the latter is required to pay or any expense pertaining thereto which he has borne or which is incurred subseqent of a claim.
		

		
			24.2     The Contractor shall obtain and maintain in force, and shall cause his subcontractors to obtain and to maintain in force, all insurance coverages relative to Petroleum Operations of the type and amounts in use in the international petroleum industry, in particular (a) general third party liability coverage, (b) coverage for environmental risks pertaining to the Petroleum Operations, (c) coverage for employee work-related accidents, (d) any other insurance coverage required by the regulations in force.
		

		
			The insurance coverages in question shall be obtained from top tier insurance companies pursuant to the applicable regulations.
		

		
			The Contractor shall provide the Minister with certifications proving the obtaining of insurance coverage and the maintenance in force of the above-cited insurance coverages.
		

		
			24.3     When the Contractor is made up of several entities, the obligations and responsibilities of the latter under this Contract shall be, without prejudice to the provisions of Article 21 here above,
		

		
			
		

		
			

		 

		

			49

		

 

		

		
			joint and several with the exception of their obligations pertaining to the Industrial and Commercial Income Tax.
		

		
			24.4     If one of the entities of the Contractor assigns all or a portion of his rights and obligations in connection with this Contract to an Affiliated Company, whenever the latter displays a lower level of financial and technical qualification, the parent company shall submit for the approval of the Minister a commitment guaranteeing the proper execution of the obligations arising from this Contract.
		

		
			ARTICLE 25 :  TERMINATION OF THE CONTRACT
		

		
			25.1     This Contract may be terminated, without compensation, in any of the following cases:
		

		
			a)   Serious and/or continued violation by the Contractor of the provisions of this Contract, of the Crude Hydrocarbons Code, or of the regulations in force applicable to the Contractor;
		

		
			b)   Failure to remit a bank guarantee pursuant to Article 4.6 here above; 
		

		
			c)   Delay of more than three (3) months of a payment due to the State;
		

		
			d)   Cessation of development works of a deposit for six (6) consecutive months without the consent of the Minister;
		

		
			e)   After the startup of production on a deposit, cessation of his exploitation for a period of greater than six (6) months, decided upon by the Contractor without the consent of the Minister;
		

		
			f)   Non-execution by the Contractor within the time period prescribed by an arbitral award rendered pursuant to the provisions of Article 28 here below;
		

		
			g)   Bankruptcy, receivership or liquidation of the property of the Contractor.
		

		
			25.2     Except for the case set forth in subparagraph g) here above, the Minister may only pronounce the forfeiture provided for in Article 25.1 here above after having placed the Contractor on notice, by registered letter with return receipt, to remedy the violation in question within the allowed time period specified in the notice from the time of receipt of such.
		

		
			25.3     If there is a failure by the Contractor to remedy the violation which was the subject of the termination notice within the time period allowed, the termination of this Contract may be pronounced.
		

		
			
		

		
			

		 

		

			50

		

 

		

		
			Any dispute as to the justification of the termination of the Contract pronounced by the Minister is open to recourse to arbitration pursuant to the provisions of Article 28 here below. In such a case, the Contract shall remain in force until an arbitral award confirms the justifiability of such termination, in which case the Contract will definitively terminate.
		

		
			The termination of this Contract shall automatically entail the withdrawal of the Exploration Authorization and of the currently valid Exploitation Authorizations.
		

		
			ARTICLE 26 : APPLICABLE LAW AND STABILIZATION OF TERMS
		

		
			26.1     This Contract is governed by the laws and regulations of the Islamic Republic of Mauritania, supplemented by general principles of the laws of international commerce.
		

		
			26.2     The Contractor shall be subject at all times to the laws and regulations in force in the Islamic Republic of Mauritania.
		

		
			26.3     No legislative or regulatory provision occurring after the Effective Date of the Contract may be applied to the Contractor which would have as a direct or an indirect effect to diminish the rights of the Contractor or to increase his obligations under this Contract and the legislation and regulations in force upon the Effective Date of this Contract, without the prior agreement of the Parties.
		

		
			However, it is agreed that the Contractor cannot, with reference to the preceding paragraph, oppose the application of the legislative and regulatory provisions which are generally applicable, adopted after the Effective Date of the Contract, in the matter of safety of persons and of protection of the environment or employment law
		

		
			ARTICLE 27 :  FORCE MAJEURE
		

		
			27.1     Any obligation resulting from this Contract which would be totally or partially impossible for a Party to carry out, other than payments for which it is responsible to pay, shall not be considered to be a violation of this Contract if said non-execution results from a case of Force Majeure, provided however that there is a direct link of cause and effect between impediment and the case of Force Majeure invoked.
		

		
			
		

		
			

		 

		

			51

		

 

		

		
			27.2     For purposes of this Contract the following should be understood to be a case of Force Majeure :  any event which is unforeseeable, irresistible or outside of the will of the Party invoking it, such as earthquake, accidents, strike, guerilla actions, acts of terrorism, blockade, riot, insurrection, civil unrest, sabotage, acts of war, the Contractor being subject to any law, regulation, or any other cause outside of his control and which has as a result of delaying or rendering momentarily impossible the execution of all or a portion of his obligations.  The intention of the Parties is that the term Force Majeure be given the interpretation the most in conformity with the principles and customs of international law and with the practices of the international petroleum industry.
		

		
			27.3     When a Party considers itself prevented from carrying out any of its obligations by reason of a case of Force Majeure, it must immediately so notify the other Party in writing specifying the elements of the type to establish the case of Force Majeure and to take, in agreement with the other Party, all appropriate and necessary provisions in order to allow a return to the normal execution of obligations affected by the Force Majeure after the case of Force Majeure ceases.
		

		
			The obligations, other than those affected by the Force Majeure, must continue to be fulfilled pursuant to the provisions of this Contract.
		

		
			27.4     If, following a case of Force Majeure, the execution of any of the obligations of this Contract was delayed, the duration of the delay resulting therefrom, increased by the delay which may be necessary for the repair of all damage caused by the case of Force Majeure, shall be added to the time period stipulated in this Contract for the execution of said obligation as well as to the duration of the currently valid Exploration Authorization and of any Exploitation Authorizations.
		

		
			ARTICLE 28 : ARBITRATION AND EXPERTISE
		

		
			28.1     In the event of a dispute between the State and the Contractor concerning the interpretation or the application of the provisions of this Contract, the Parties shall make good faith effort to resolve such dispute amicably.
		

		
			With regard to the Market Price, the provisions of Article 14.5 here above shall apply.
		

		
			The Parties may also agree to submit any other dispute of a technical nature to an expert appointed by common agreement or by the International Centre for Expertise of the International Chamber of Commerce (“ICC”).
		

		
			If, within a time period of ninety (90) days starting from the date of notification of a dispute, the Parties are not able to reach an amicable solution or following the proposal of an expert, said dispute shall be submitted at the request of the most diligent Party to the ICC for arbitration 
		

		
			
		

		
			

		 

		

			52

		

 

		

		
			following the rules set by the Rules of Arbitration of the ICC.
		

		
			28.2     The location of the arbitration shall be Paris (France). The languages utilized during the proceedings shall be the French and English languages and the applicable law shall be the Mauritanian law, as well as the rules and customs of applicable international law in the matter.
		

		
			The arbitrational court shall be made up of three (3) arbitrators.  No arbitrator shall be a national of the countries of which the Parties are nationals.
		

		
			The award of the court is rendered on a definitive and irrevocable basis.  It is binding upon the Parties and is immediately executory.
		

		
			The expenses of arbitration shall be borne in equal part by the Parties, subject to the decision of the court concerning their allocation.
		

		
			The Parties formally and without reservation waive any right to attack such award, to impede its recognition and its execution by any means whatsoever.
		

		
			28.3     The Parties shall conform to any protective measures ordered by the arbitrational court.  Without prejudice to the power of the arbitrational court to recommend protective measures, each Party may solicit provisional or protective measures in application of the pre-arbitration emergency procedure rules of the ICC.
		

		
			28.4     The introduction of an arbitrational procedure shall entail the suspension of the contractual provisions with respect to the subject of the dispute, but shall leave in place all other rights and obligations of the Parties with respect to this Contract.
		

		
			28.5     Without prejudice to the provisions of Article 21 here above, the costs and expert fees referred to in Article 28.1 here above shall be borne by the Contractor up until the grant of the first Exploitation Authorization and thereafter half by each of the Parties. Such costs shall be considered as recoverable Petroleum Costs with regard to Article 10 of this Contract.
		

		
			ARTICLE 29 : TERMS FOR APPLICATION OF THE CONTRACT
		

		
			29.1     The Parties agree to cooperate in all ways possible in order to achieve the objectives of this Contract.
		

		
			The State shall facilitate the Contractor in the exercise of his activities in granting to him all permits, authorizations, licenses and access rights necessary for the carrying out of the Petroleum Operations, and in placing at his disposal all appropriate services to said Operations of the Contractor , of his employees and agents on national territory.
		

		
			Any application for the above-cited permits, authorizations, licenses and rights shall be 
		

		
			
		

		
			

		 

		

			53

		

 

		

		
			submitted to the Minister who shall transmit it, if applicable to the relevant Ministries and entities, and shall ensure its follow-up.  Such applications may not be refused without a legitimate reason and shall be diligently handled in a manner so as to not unduly delay the Petroleum Operations.
		

		
			29.2     All notices or other communications related to this Contract must be sent in writing and shall be considered to have been validly made from the time they are, hand delivered against receipt, to the qualified representative of the concerned Party at the place of its principal establishment in Mauritania, or delivered in a stamped envelope, by registered mail with return receipt, or sent by telecopy confirmed by letter, and after confirmation of receipt by the recipient, at the address chosen by them and deemed authentic indicated here below :
		

		
			For the Ministry :
		

		
			Department of Crude Hydrocarbons
		

		
			BP : 4921
		

		
			Nouakchott- Mauritania
		

		
			TEL/FAX : +222 524 43 07
		

		
			For the Contractor :
		

		
			Kosmos Energy Mauritania
		

		
			c/o Wilmington Trust
		

		
			4th Floor, Century Yard
		

		
			Cricket Square, Hutchins Dr. 
		

		
			Elgin Avenue, George Town
		

		
			Grand Cayman KY1-1209
		

		
			Cayman Islands
		

		
			Telephone       :  +1-345-814-6703
		

		
			FAX                :  +1-345-527-2105
		

		
			Attention         :   Andrew Johnson
		

		
			Email: mauritanianotifications@kosmosenergy.com
		

		
			With Copy to:
		

		
			Kosmos Energy Mauritania
		

		
			c/o Kosmos Energy, LLC.
		

		
			Attention: General Counsel
		

		
			8176 Park Lane, Suite 500
		

		
			Dallas, TX 75231
		

		
			
		

		
			

		 

		

			54

		

 

		

		
			Fax:       +1 214-445-9705
		

		
			Email: KosmosGeneralCounsel@kosmosenergy.com
		

		
			The notices shall be considered as having been made upon the date of confirmation of the receipt.
		

		
			29.3     The State and the Contractor may at any time change their authorized representatives or choice of domicile mentioned in Article 29.2 here above, subject to having so notified with an advance notice of at least ten (10) days.
		

		
			29.4     This Contract may not be modified except by common agreement of the Parties and by the execution of an approved amendment entering into force within the terms provided in Article 30 here below.
		

		
			29.5     Any waiver by the State of the execution of an obligation of the Contractor must be done in writing and signed by the Minister, and no possible waiver can be considered as a precedent if the State declines to act upon any of its rights which are recognized by this Contract.
		

		
			29.6     Titles appearing in this Contract are inserted for purposes of convenience and of reference and in no way shall define, nor limit, nor describe the scope or the purpose of the provisions of the Contract.
		

		
			29.7     Appendices 1, 2 and 3 attached hereto are an integral part of this Contract.  However, in the event of conflict, the provisions of this Contract shall prevail over those of the Appendices.
		

		
			ARTICLE 30 : ENTRY INTO FORCE
		

		
			Once signed by the Parties, this Contract shall be approved by decree made in the Council of Ministers and shall enter into force upon the date of publication of the said decree in the Official Journal, said date being designated under the name Effective Date and rendering said Contract binding upon the Parties.
		

		
			In witness whereof, the Parties have signed this Contract in two (2) original copies.
		

		
			Nouakchott, on            11 OCT 2016             
		

		
			
		

		

		 

		

			55

		

 

	
					
						

					
						 

					
					
						 

					
					
						 

				
	
					
						FOR

					
					
						    

					
					
						FOR

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						THE ISLAMIC REPUBLIC

					
					
						 

					
					
						THE CONTRACTOR

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						OF MAURITANIA

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						THE MINISTER OF PETROLEUM,

					
					
						 

					
					
						PRESIDENT DIRECTEUR GENERAL

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ENERGY AND MINES

					
					
						 

					
					
						KOSMOS ENERGY MAURITANIA

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						/s/ Mohamed Abdel Vetah

					
					
						 

					
					
						/s/ Andrew G. Inglis

				
	
					
						Mohamed ABDEL VETAH

					
					
						 

					
					
						Andrew G. INGLIS

				

		
			 
		

		
			
		

		
			

		 

		

			56

		

 

		

		
			APPENDIX 1 : EXPLORATION PERIMETER
		

		
			Attached and being an integral part of the Contract between the Islamic Republic of Mauritania and the Contractor.
		

		
			On the Effective Date, the initial Exploration Perimeter includes a surface area deemed to be equal to four thousand three hundred (4,300) km2,
		

		
			Such Exploration Perimeter is represented on the attached map with the indicated coordinates.
		

		
			MAP OF THE EXPLORATION PERIMETER
		

		
			
		

		
			

		 

		

			57

		

 

		

		
			
		

		
			
		

		
			

		 

		

			58

		

 

		

		
			APPENDIX 2 : ACCOUNTING PROCEDURE
		

		
			Attached to and an integral part of the Contract between the Islamic Republic of Mauritania and Contractor.
		

		
			ARTICLE 1:  GENERAL PROVISIONS
		

		
			1.1       Purpose
		

		
			The purpose of this Accounting Procedure is to set the rules and methods of accounting for the verification of Petroleum Costs to provide for their recovery and for the purpose of sharing production in accordance with Article 10 of the Contract, as well as the rules to determine net profits of the Contractor for purposes of calculating the tax on industrial and commercial profits.
		

		
			1.2       Statements
		

		
			The accounts, books and registers of the Contractor shall be maintained consistent with the rules of the applicable accounting plan in Mauritania and the practices and methods in use in the international petroleum industry.
		

		
			Pursuant to the provisions of Article 20.2 of the Contract, the accounts, books and registers of the Contractor shall be kept in the English language using the Dollar as the unit of account.
		

		
			Anytime, whenever it is necessary to convert into Dollars expenses and revenue paid or received in any other currency, these currencies shall be valued on the basis of the rate of exchange quoted on the foreign-exchange market of Paris, in accordance with terms determined by mutual agreement.
		

		
			1.3       Interpretation
		

		
			The definitions of words which appear in this Appendix 2 are the same as those of the corresponding words as they appear in the Contract.
		

		
			The word « Contractor », has the meaning given to it by the Contract, and may sometimes refer to the Operator when the Contractor is made up of several entities and when Petroleum Operations are conducted by the Operator on behalf of all these entities, or sometimes the reference is to each of these entities whenever the obligation of each individual entity is being addressed.
		

		
			
		

		
			

		 

		

			59

		

 

		

		
			ARTICLE 2:  ACCOUNTING FOR PETROLEUM COSTS
		

		
			2.1       General rules and principles.  Classes and groupings
		

		
			2.1.1    The Contractor shall at all times keep books of account specially reserved and organized for the booking of Petroleum Costs ; they shall detail the expenses actually incurred by it and giving rise to recovery consistent with the provisions of the Contract and of this Appendix, the recovered Petroleum Costs, progressively as the production intended for such purpose becomes available, as well as the amounts which must be properly deducted or which have the effect of reducing  the Petroleum Costs.
		

		
			2.1.2    The accounting of Petroleum Costs must highlight at all times and for each Exploration Perimeter and for each Exploitation Perimeter derived therefrom :
		

			
	
			
				 §
			

			
	
			
			The full amount of the Petroleum Costs paid by Contractor from Effective Date;

			
	
			
				 §
			

			
	
			
			The full amount of the Petroleum Costs recovered;

			
	
			
				 §
			

			
	
			
			The amounts which diminish or otherwise are a deduction from Petroleum Costs and the type of operations related to these amounts;

			
	
			
				 §
			

			
	
			
			The balance of Petroleum Costs not yet recovered.

		
			2.1.3    The accounting for Petroleum Costs shall comprise as debit entries all expenses actually incurred and directly related to Petroleum Operations in accordance with the Contract and the provisions of this Appendix, and considered chargeable to Petroleum Costs.
		

		
			These expenses which have been actually incurred must:
		

			
	
			
				 §
			

			
	
			
			Be actually incurred by Contractor ;

			
	
			
				 §
			

			
	
			
			Be necessary to the proper carrying out of Petroleum Operations ;

			
	
			
				 §
			

			
	
			
			Be properly incurred and supported by items and documents which allow an effective audit by the Ministry.

		
			2.1.4    The accounting for Petroleum Costs shall include as credit entries the amount of recovered Petroleum Costs as and when this recovery takes place, and as and when the amounts are collected, the revenue and miscellaneous products which are to be deducted from or operate to diminish the Petroleum Costs.
		

		
			2.1.5    The original text of contracts, invoices and other documents which support the Petroleum Costs must be available for examination by the Ministry and produced whenever it requests it.
		

		
			
		

		
			

		 

		

			60

		

 

		

		
			2.1.6       Petroleum Costs are recovered in accordance with the following:
		

		
			a)       The priority order arranged by the type of costs:
		

			
	
			
				 §
			

			
	
			
			Exploitation Petroleum Costs ;

			
	
			
				 §
			

			
	
			
			Development Petroleum Costs ; 

			
	
			
				 §
			

			
	
			
			Exploration Petroleum Costs;

		
			As these categories of Petroleum Costs are defined in Articles 3.2, 3.3 and 3.4 of this Appendix.
		

		
			b)       Priority based on geographic considerations:
		

			
	
			
				 §
			

			
	
			
			Petroleum Costs incurred in an Exploitation Perimeter shall be the first to be recovered from the production extracted from that perimeter consistent with the order of priorities stipulated in paragraph a) here above ;

			
	
			
				 §
			

			
	
			
			Petroleum Costs incurred outside of an Exploitation Perimeter shall be recovered in second priority from the production extracted from that perimeter consistent with the priority order specified in paragraph a) here above.

		
			Petroleum Costs incurred in the Exploitation Perimeters, other than that in question shall be recovered before the Petroleum Costs incurred in the Exploration Perimeter and in accordance with the order of priority stipulated in subparagraph a) here above.
		

		
			Each entity which makes up the Contractor is entitled to its cost recovery upon commencement of production.
		

		
			2.1.7     Accounting for Petroleum Costs must be true and accurate ; it must be organized and the books must be kept and submitted in such manner that they can be easily grouped together and make the relevant Petroleum Costs clearly apparent, in particular as they relate to the following expenses:
		

			
	
			
				 §
			

			
	
			
			exploration

			
	
			
				 §
			

			
	
			
			appraisal

			
	
			
				 §
			

			
	
			
			development

			
	
			
				 §
			

			
	
			
			production of Crude Petroleum,

			
	
			
				 §
			

			
	
			
			production of Natural Gas,

		
			
		

		
			

		 

		

			61

		

 

		

			
	
			
				 §
			

			
	
			
			transportation of Hydrocarbons and storage thereof,

			
	
			
				 §
			

			
	
			
			ancillary activities, auxiliary or subordinate, and separate from them,

			
	
			
				 §
			

			
	
			
			as well as the amounts paid in the sequestered account in accordance with Article 23.2 of the Contract.

		
			2.1.8    For each of the activities here above listed, the accounting of Petroleum Costs must clearly show the following expenses:
		

		
			a)   Related to tangible assets, in particular those which refer to the purchase, creation, construction or carrying out of:
		

			
	
			
				 §
			

			
	
			
			land parcels,

			
	
			
				 §
			

			
	
			
			buildings (workshops, offices, storage areas, dwellings, laboratories, etc....),

			
	
			
				 §
			

			
	
			
			facilities for loading and storage,

			
	
			
				 §
			

			
	
			
			access roads and general infrastructure works,

			
	
			
				 §
			

			
	
			
			facilities to transport Hydrocarbons (pipelines, tankers, etc.),

			
	
			
				 §
			

			
	
			
			general equipment,

			
	
			
				 §
			

			
	
			
			specific equipment and facilities,

			
	
			
				 §
			

			
	
			
			vehicles for use of transport and civil engineering machinery,

			
	
			
				 §
			

			
	
			
			materiel and tools (the normal useful life of which exceeds one year),

			
	
			
				 §
			

			
	
			
			successful drilling,

			
	
			
				 §
			

			
	
			
			other tangible assets.

		
			b)   Related to intangible assets, particularly those which relate to:
		

			
	
			
				 §
			

			
	
			
			Surface investigation of geological or geophysical nature and related to laboratory work (studies, reprocessing, etc.),

			
	
			
				 §
			

			
	
			
			Nonproductive exploration wells which are not utilized in furtherance of the development plan,

			
	
			
				 §
			

			
	
			
			Other intangible assets.

		
			c)   Related to raw materials consumables;
		

		
			
		

		
			

		 

		

			62

		

 

		

		
			d)   Operational for functioning expenses :
		

		
			Involved here are expenses of whatever nature, excepting the overhead referred to below, and which are not accounted for in subparagraphs a) to c) above of this Article 2.1.8, and which are directly connected to the study, progress and the implementation of Petroleum Operations ;
		

		
			e)   Non operating expenses or overhead :
		

		
			Involved here are expenses borne by the Contractor related to Petroleum Operations and connected to management or to administration of the said operations.
		

		
			2.1.9    Moreover, the accounting of Petroleum Costs must show, for each category of expenses listed or defined in subparagraphs a) to d) of Article 2-1-8 above, all payments made to the following:
		

			
	
			
				 §
			

			
	
			
			The Operator, for goods and services which it has itself furnished;

			
	
			
				 §
			

			
	
			
			For the entities which make up the Contractor, the goods and services which they have supplied themselves;

			
	
			
				 §
			

			
	
			
			Affiliated Companies;

			
	
			
				 §
			

			
	
			
			Third Parties.

		
			2.2       Analysis of expenses and methodology for attribution
		

		
			2.2.1    The principles for attribution and the usual analytical methods of the Contractor in the matter of itemizing and of reintegrating must be applied in a homogeneous manner, which is fair and does not discriminate against its activities taken as a whole. They must be submitted to the Ministry on its request.
		

		
			The Contractor must inform Ministry of any change made by it in its principles and methodology.
		

		
			2.2.2    Tangible assets constructed, manufactured, created or brought about by the Contractor in the furtherance of Petroleum Operations and dedicated to these operations as well as their normal maintenance shall be accounted for at the acquisition cost of construction, manufacturing, creation, or realization.
		

		
			2.2.3    Equipment, materials and consumables required for Petroleum Operations and not including those referred to above shall be:
		

		
			a)   Either acquired for immediate use, subject to the time spent in transport, and if necessary, the temporary storage by Contractor (provided they shall not have been 
		

		
			
		

		
			

		 

		

			63

		

 

		

		
			commingled with his own inventory). This equipment, materials and consumables acquired by the Contractor shall be valued, for their charging Petroleum Costs, at their landed price in Mauritania.
		

		
			“The Landed price in Mauritania”  includes the following items, which shall be accounted for in accordance with the analytic methodology of Contractor:
		

			
	
			
				 §
			

			
	
			
			Purchase price less discounts and rebates,

			
	
			
				 §
			

			
	
			
			Transport costs, insurance, transit costs, handling and customs (and other possible taxes and fees) from the storage site of the vendor to that of the Contractor or to the place they are utilized, as may be applicable,

		
			b)   Or supplied by the Contractor from its own inventory
		

			
	
			
				 §
			

			
	
			
			New equipment and materials other than consumables, supplied by the Contractor from its own inventory, shall be valued for accounting purposes at the  weighted purchase price calculated pursuant to the provisions of subparagraph a) of this Article 2.2.3, hereafter  « net cost ».

			
	
			
				 §
			

			
	
			
			Materials and equipment which are depreciable and already used supplied by the Contractor from his own inventory or which originate from other activities he may have had, including those of Affiliated Companies, shall be valued for purposes of booking Petroleum Costs, in accordance with the following schedule:

			
	
			
				 ·
			

			
	
			
			New Material (Condition « A »): New Material, never used : 100% (one hundred percent) of the net cost.

			
	
			
				 ·
			

			
	
			
			Material in good condition (Condition « B »): Material in good condition and still utilizable for its original purpose without repair: 75% (seventy-five percent) of the net cost of the new material as defined here above.

			
	
			
				 ·
			

			
	
			
			Other used material  (Condition  « C »): Material which is still utilizable for its original purpose, but only after repair and upgrading: 50% (fifty percent) of the  net cost of the new material as defined here above.

			
	
			
				 ·
			

			
	
			
			Material in poor condition (Condition « D »): Material not utilizable for its original purpose but still usable for another purpose: 25% (twenty-five percent) of net cost of the new material as defined here above.

		
			
		

		
			

		 

		

			64

		

 

		

			
	
			
				 ·
			

			
	
			
			Junk and scrap (Condition « E »): Materials unusable and not repairable: applicable price for junk.

		
			2.2.3.1 The Operator does not guarantee the quality of the new material referred to above beyond the warranty furnished by the manufacturer or seller of the subject material.  In the event of defective new material, Contractor will do its best to seek reimbursement or compensation from the manufacturer or the reseller; however, the corresponding credit shall only be booked after receipt of reimbursement for indemnification;
		

		
			2.2.3.2 In the event used material referred to above is defective, the Contractor shall credit the account of the Petroleum Costs with the amount which it will have actually received as compensation.
		

		
			2.2.3.3 Utilization of materials, equipment and facilities which are Contractor’s own property
		

		
			Materials, equipment and facilities which are Contractor’s own property and which are temporarily put into use to carry out Petroleum Operations, shall be charged to Petroleum Costs at a rental amount covering the following:
		

		
			a)   Maintenance and repairs,
		

		
			b)   A share of depreciation pro rata to the time period utilized for Petroleum Operations, calculated by applying to the original costs (initial cost before revaluation), a rate which shall not exceed the one provided by Article 4.2 here below.
		

		
			c)   The expenses of transport and operations and all other expenses have not been otherwise charged.
		

		
			The invoiced price shall exclude any excess cost, arising in particular from breakdown or abnormal or inappropriate use of the same equipment and facilities in furtherance of the Contractor’s activities which are not Petroleum Operations.
		

		
			In all events, costs charged as Petroleum Costs for use of this equipment and facilities shall not exceed those in common usage in Mauritania by Third Parties, nor shall they result in a cascading charge of expenses and profit margins.
		

		
			The Contractor shall maintain detailed statement of materials, equipment and facilities which are owned by it and used in Petroleum Operations, it shall indicate the description and serial number of each unit, the maintenance expenses, the relevant repairs, and the dates on which each item has been dedicated to and then withdrawn from Petroleum Operations.  This statement must delivered to the Ministry not later than March 1st of every year.
		

		
			
		

		
			

		 

		

			65

		

 

		

		
			2.3       Operational expenses 
		

		
			2.3.1    Expenses of this type shall be charged to Petroleum Costs at the Contractor’s actual cost for the charges for services involved, such as this price appears in the Contractor’s accounts consistent with the applicable provisions of this Appendix.  These expenses include in particular:
		

		
			2.3.2    The taxes, fees and imposts due and payable in Mauritania under applicable regulations and the provisions of the Contract and directly related to Petroleum Operations.
		

		
			Surface rentals, the BIC tax and the bonuses provided for respectively in Articles 11 and 13 of the Contract, as well as any other charge the recovery of which is disallowed by the provisions of this Contract or of this Appendix, shall not be charged to Petroleum Costs.
		

		
			2.3.3    Personnel expenses and environment of the personnel
		

		
			2.3.3.1 Principles
		

		
			To the extent that they correspond to actual work and services and that they are not excessive with regard to the importance of the responsibilities exercised, to the work carried out, and to the customary practices, such expenses cover all payments made to employ and and provide benefits to personnel working in Mauritania and hired for the conduct and execution of the Petroleum Operations or for their supervision.  Such personnel includes persons recruited locally by the by the Contractor and those placed at the Contractor’s disposal by the Affiliated Companies, the other Parties or Third Parties.
		

		
			Such expenses are also deductible when they are connected to fixed premises of the Contractor abroad, when the activity of such premises is carried out exclusively for the benefit of the Petroleum Operations of the Contractor in Mauritania .
		

		
			2.3.3.2 Expense Items
		

		
			The expenses of personnel and personnel benefits shall include, on the one hand, all sums paid or reimbursed on account of such personnel referred to here above, under legal and regulatory texts, collective agreements, employment contracts and the internal policies of the Contractor and, on the other hand, expenses paid for the benefit of such personnel:
		

		
			a)   Salaries and pay for active employment or holidays, overtime, bonuses and other compensation;
		

		
			b)   Employer contributions pertaining thereto resulting from legal and regulatory texts, collective agreements and terms of employment;
		

		
			c)   Expenses paid for the benefit of the personnel; these represent, in particular:
		

		
			
		

		
			

		 

		

			66

		

 

		

			
	
			
				 §
			

			
	
			
			Expenses for medical and hospital assistance, social security and all other social expenses particular to the Contractor ;

			
	
			
				 §
			

			
	
			
			Expenses for transportation of employees, their families and their personal effects, when the assumption of such expenses is provided for in the employment contract;

			
	
			
				 §
			

			
	
			
			Expenses for lodging of personnel, including therein provision of services related thereto, when the assumption of such expenses by the employer is provided for in the employment contract (water, gas, electricity, telephone) ;

			
	
			
				 §
			

			
	
			
			Compensation paid upon the time of moving in and of departure of the salaried personnel;

			
	
			
				 §
			

			
	
			
			Expenses paid to administrative personnel rendering the following services:  management and recruitment of local personnel, management of expatriate personnel, personnel training, maintenance and operation of offices and lodging, when such expenses are not included in overhead or under other expense categories;

			
	
			
				 §
			

			
	
			
			Expenses for office rental or their expense for occupancy, the expense of collective administrative services (secretarial services, furniture, office supplies, telephone, etc.).

		
			2.3.3.3 Terms for booking charges
		

		
			Personnel costs correspond:
		

			
	
			
				 §
			

			
	
			
			Either to direct expenses charged to the corresponding Petroleum Costs account,

			
	
			
				 §
			

			
	
			
			Or to indirect or common expenses charged to the Petroleum Costs account based upon data fromanalytical accounting and determined pro rata to the time dedicated to the Petroleum Operations.

		
			2.3.4    Expenses paid by reason of the provision of services supplied by Third Parties, the entities comprising the Contractor and the Affiliated Companies shall include in particular:
		

		
			2.3.4.1 Services rendered by Third Parties and by the Parties are booked at the Contractor’s actual book costs, which means the price invoiced by the vendors, including all taxes, fees, and ancillary costs, if applicable; the actual costs shall be reduced by any rebates, discounts, kickbacks, or promotions the Contractor may have secured either directly or indirectly.
		

		
			
		

		
			

		 

		

			67

		

 

		

		
			2.3.4.2 The technical assistance rendered to the Contractor by its Affiliated Companies:  consisting of  services and actions for the benefit of the Petroleum Operations and emanate from the departments and services of these Affiliated Companies who are engaged in the following activities:
		

			
	
			
				 §
			

			
	
			
			Geology,

			
	
			
				 §
			

			
	
			
			Geophysics,

			
	
			
				 §
			

			
	
			
			Engineering,

			
	
			
				 §
			

			
	
			
			Drilling and production,

			
	
			
				 §
			

			
	
			
			Deposits and reservoir studies,

			
	
			
				 §
			

			
	
			
			Economic studies,

			
	
			
				 §
			

			
	
			
			Technical contracts,

			
	
			
				 §
			

			
	
			
			Laboratories,

			
	
			
				 §
			

			
	
			
			Purchases and transport in transit (except for charges comprised of those referred to in 2.2.3 here above),

			
	
			
				 §
			

			
	
			
			Designs,

			
	
			
				 §
			

			
	
			
			Some administrative and legal services related to studies or to well-defined or occasional projects and which are not part of ordinary and regular business, nor of the legal proceedings referred to in 2.3.8 below.

		
			Technical assistance is generally the subject of service contracts entered into between the Contractor and its Affiliated Companies.
		

		
			The costs of technical assistance rendered by the Affiliated Companies are booked at actual cost for the Affiliated Company which renders the service.  This actual cost includes, in particular, personnel expenses, the cost of raw materials, materials and consumables utilized, the cost of maintenance and repair, the cost of insurance, taxes, a portion of the amortization of general investments calculated on the original acquisition cost or of the construction of related tangible items and of any other expenses which are related to these services and have not been otherwise booked elsewhere.
		

		
			However, the price excludes any surcharges arising from, in particular, fixed assets or a non-regular or cyclical use of materials, facilities and equipment at an Affiliated Company.
		

		
			
		

		
			

		 

		

			68

		

 

		

		
			In all cases, expenses related to these services must not exceed those which are normally incurred for similar services by technical service companies and independent laboratories.  They must not result in cascading charges from profit margins.
		

		
			Moreover, all of these services, including analytical studies, must be supported by reports to be submitted at the request of the Ministry.  They must be the subject of written orders issued by the Contractor, and also of itemized invoices.
		

		
			2.3.4.3 Whenever the Contractor utilizes in Petroleum Operations, materiel, equipment or facilities which are the sole property of an entity which makes up the Contractor, the Contractor must charge the Petroleum Costs pro rata the usage time, and the corresponding entry must be determined in accordance with the customary methods and the principles defined in 2.3.4.2 above.  This entry includes, in particular:
		

			
	
			
				 §
			

			
	
			
			A portion of the annual depreciation calculated on the original “landed Mauritanian price” defined in 2.2.3 here above;

			
	
			
				 §
			

			
	
			
			A portion of the start-up cost, of insurance coverage, of ordinary maintenance, of financing, and of periodic checkups.

			
	
			
				 §
			

			
	
			
			Warehousing costs

			
	
			
				 §
			

			
	
			
			Warehousing costs and handling costs (expenses incurred for personnel and for management of the services) are charged to Petroleum Costs pro rata the value of the items taken out of inventory.

			
	
			
				 §
			

			
	
			
			Transportation expense:  expenses of transport of personnel, of materiel or of equipment intended and dedicated to Petroleum Operations shall be booked as Petroleum Costs if they are not already included in the preceding paragraphs and if they have not been accounted in actual costs.

		
			2.3.5    Damages and waste which impact jointly-owned properties
		

		
			All expenses necessary to repair and restore to working condition equipment which has suffered damages or losses arising from fires, floods, storms, theft, accidents or any other cause, shall be booked in accordance with the principles defined in this Appendix.
		

		
			Amounts recovered from insurance companies for these damages and losses shall be booked as a credit to Petroleum Costs.
		

		
			2.3.6    Maintenance expenses
		

		
			Maintenance expenses (routine maintenance and exceptional maintenance) of the materiel, 
		

		
			
		

		
			

		 

		

			69

		

 

		

		
			equipment and facilities dedicated to Petroleum Operations shall be booked to Petroleum Costs at actual cost.
		

		
			2.3.7    Insurance premiums and expenses related to the settlement of casualty losses shall be charged to Petroleum Costs:
		

		
			a)   Premiums and expenses related to mandatory insurance and to those arising under policies to cover the Hydrocarbons produced, the persons and the properties dedicated to Petroleum Operations or the third-party liability insurance of the Contractor within the purview of the said operations;
		

		
			b)   Expenses incurred by the Contractor as the result of a casualty which arose from Petroleum Operations, and those incurred in the settlement of all losses, claims, damages and other related costs which are not covered by the insurance policies;
		

		
			c)   Expenses disbursed in settlement of losses, claims, damages or legal proceedings which are not compensated by insurance and which do not relate to risk which the Contractor was required to insure against.  The amounts recovered from insurance policies and guarantees are accounted for as provided for in Article 2.6.2 g) here below;
		

		
			2.3.8    Legal costs
		

		
			Petroleum Costs can be charged with expenses related to adversary legal proceedings, investigation, and settlement of disputes and claims (requests for reimbursement or compensation), which arise from Petroleum Operations or which become necessary in order to protect or recover properties, including, in particular, the fees of lawyers and experts, legal costs, investigation costs, cost of gathering evidence, as well as amounts disbursed in settlement of the disputes or the final settlement of any proceedings or claim.
		

		
			Whenever these services are rendered by personnel of the Contractor, a compensatory payment shall be included in the Petroleum Costs which corresponds to time expended and costs actually incurred.  The price charged in such manner shall not exceed that which would have been paid to Third Parties for identical or analogous services.
		

		
			2.3.9    Interest, fees, and financial charges
		

		
			The following are chargeable to Petroleum Costs : interest penalties for late payment incurred by the Contractor and related to borrowings from Third Parties as well as advances and loans from Affiliated Companies, to the extent that these borrowings and advances are used to finance the Petroleum Costs and related exclusively to petroleum development operations of a commercial deposit (excluded here are Petroleum Operations related to exploration and appraisal), and provided they do not exceed seventy percent (70%) of the total amount of these 
		

		
			
		

		
			

		 

		

			70

		

 

		

		
			petroleum development costs.  These borrowings and advances must be submitted for the approval of the Ministry.
		

		
			In the case where such financing is secured by Affiliated Companies, the acceptable interest rates must not exceed the rate normally charged on the international financial markets for similar loans.
		

		
			2.3.10  Foreign-exchange losses
		

		
			Foreign-exchange losses related to borrowings and debts incurred by the Contractor under this Contract are chargeable to Petroleum Costs.
		

		
			2.3.11  Disbursements related to expenses, verifications and audits of the Ministry, pursuant to the provisions of the Contract, are chargeable to Petroleum Costs.
		

		
			2.3.12  Payments related to other expenses, including payments to Third Parties for the transport of Hydrocarbons to the Delivery Point shall be included in the Petroleum Costs.  Involved here are all payments made or losses incurred related to or caused by the proper execution of the Petroleum Operations, provided the charge to Petroleum Costs is not disallowed under provisions of this Contract or of this Appendix, and provided they are not similar to expenses which the Ministry has disallowed and provided these expenses have received the approval of the Ministry.  Moreover, except for contrary provisions in the law, the Contractor is at liberty, if it wishes, to make contributions of an economic, social, cultural or sport-related nature, with the mandatory exclusion of financing political activities.  These contributions shall be debited to the Petroleum Costs account.
		

		
			2.4       Overhead
		

		
			These expenses pertain to those Petroleum Costs which have not been otherwise accounted for.  They pertain to:
		

		
			2.4.1    Expenses incurred outside of Mauritania
		

		
			The Contractor shall add a reasonable sum on account of foreign overhead necessary to carry out the Petroleum Operations and borne by the Contractor and its Affiliated Companies, in such amount as they reflect the cost of the services rendered to the Petroleum Operations.
		

		
			The amounts must be supported by accounting entries and copies of reports related to the services and works carried out; if an arbitrary sharing is utilized, there must be proof by means of supportive explanations and presentation of the rules utilized to arrive at such.
		

		
			The amounts charged are considered provisional amounts arrived at on the basis of the Contractor’s experience, and they shall be adjusted annually in relation to the Contractor’s real costs, but they must not exceed the following caps:
		

		
			
		

		
			

		 

		

			71

		

 

		

			
	
			
				 ·
			

			
	
			
			Before grant of the first Exploitation Authorization : three percent (3%) of the Petroleum Costs excluding overhead;

			
	
			
				 ·
			

			
	
			
			On the grant of the first Exploitation Authorization : one and one-half percent (1.5%) of Petroleum Costs not including financial costs and overhead.

		
			These percentages are applied to expenses, not including overhead, which are chargeable to Petroleum Costs for the Calendar Year under consideration.
		

		
			2.4.2    Expenses disbursed inside of Mauritania
		

		
			These expenses cover payment related to the following activities and services:
		

			
	
			
				 §
			

			
	
			
			General management and general secretarial services;

			
	
			
				 §
			

			
	
			
			Information and communication ;

			
	
			
				 §
			

			
	
			
			General administration (law department, insurance, taxes, computer services) ;

			
	
			
				 §
			

			
	
			
			Accounting and budget ;

			
	
			
				 §
			

			
	
			
			Internal audit.

		
			They must include services which have actually been required to advance the Petroleum Operations and which correspond to actual services rendered in Mauritania  by the Contractor or the Affiliated Companies.  They must not result in cascading of of costs margins.
		

		
			The amount must be actual amounts, whenever direct expenses are involved, and they must be amounts arrived at by sharing whenever indirect expenses are involved.  In the latter case, the rules for sharing must be clearly defined and the amounts must be supported by analytical accounting.
		

		
			2.5       Expenses not chargeable to Petroleum Costs
		

		
			Payments paid in settlement of expenses, charges or costs not directly chargeable to Petroleum Operations, and those for which the deduction or charging for is disallowed by the provisions of the Contract or of this Appendix, or those which are not necessary for the conduct of Petroleum Operations, shall not be taken into account and shall not give rise to recovery.
		

		
			Involved here are these types of payments:
		

		
			a)   Costs of a capital increase;
		

		
			b)   Expenses related to activities downstream of the Delivery Point, particularly marketing costs;
		

		
			c)   The expenses which relate to the period prior to the Effective Date;
		

		
			
		

		
			

		 

		

			72

		

 

		

		
			d)   Auditing expenses disbursed by the Contractor further to special relationships between the entities which make up the Contractor;
		

		
			e)   Expenses borne for meetings, studies and work carried out in furtherance of the association which ties together the entities which make up the Contractor and the purpose of which is not the proper conduct of the Petroleum Operations;
		

		
			f)   Interest, late payment fees, and financial charges other than those the chargeability of which is authorized pursuant to Article 2.3.9 of this Appendix.
		

		
			g)   Foreign-exchange losses incurred other than those which are chargeable under the provisions of this Contract.
		

		
			h)   Foreign-exchange losses which constitute a loss of earnings tied to risks related to the Contractor’s own capital and self-financing by it.
		

		
			2.6       Items to be booked as a credit to Petroleum Costs
		

		
			The following must be credited to the Petroleum Costs account, in particular:
		

		
			2.6.1    The proceeds from the quantities of Hydrocarbons which the Contractor takes in furtherance of the provisions of Article 10.2 of the Contract, multiplied by the related Market Price as defined in Article 14 of the Contract.
		

		
			2.6.2    All other receipts, revenues, proceeds, connected profits, whether ancillary or accessory, directly or indirectly tied to Petroleum Operations, including in particular those derived from:
		

		
			(A) The sale of associated substances;
		

		
			(B) The transport and storage of products owned by Third Parties in the facilities dedicated to the Petroleum Operations;
		

		
			(C) Reimbursements originating from insurance companies;
		

		
			(D) Settlements arising out transactions or liquidations;
		

		
			(E) Transfers or rentals already declared under Petroleum Costs
		

		
			(F) Discounts, rebates, allowances and promotions received which have not been charged as a deduction from the actual costs of the properties to which they relate.
		

		
			(G) Any other income or receipts similar to those listed above that are usually deducted from Petroleum Costs.
		

		
			2.7       Materiel, equipment and facilities sold by the Contractor
		

		
			
		

		
			

		 

		

			73

		

 

		

		
			2.7.1    The materials, equipment, facilities, and consumables which are not used or are not usable shall be withdrawn from Petroleum Operations ; they must be either downgraded or considered as « junk and waste », or bought back by the Contractor for his own needs, or sold to Third Parties or to Affiliated Companies.
		

		
			2.7.2    In the event of adisposal to the entities which make up the Contractor or to their Affiliated Companies, the prices shall be arrived at pursuant to the provisions of 2-2-3.b of this Appendix, or, should they exceed those which would be applicable under the provisions of that article, their price must be agreed by the Parties. Whenever the use of an item of property related to Petroleum Operations has been temporary and it does not fall under the price reduction referred to in the above article, the said item shall be valued so that the Petroleum Costs are debited of a net amount which is equivalent to the value of the service rendered.
		

		
			2.7.3    The sales to Third Parties of materials, equipment, facilities and consumables shall be effected by Contractor at the best possible price.  All reimbursements or compensation granted to a buyer for a defective piece of equipment shall be debited to the Petroleum Costs account to the extent and at the time such are actually paid by the Contractor.
		

		
			2.7.4    Whenever an asset is used for the benefit of a Third Party or the Contractor for activities which are not within the scope of this Contract, the amounts due in exchange therefor must be calculated at a rate which is not less than actual costs, unless the Ministry agrees otherwise.
		

		
			ARTICLE 3:  DETERMINATION OF THE RATIO « R »
		

		
			3.1       For the purpose of arriving at the value of the “R” ratio in application of Article 10.3 of the Contract, the Petroleum Costs which impact the calculation of Net Cumulative Revenues and of Cumulative Investments shall be categorized and recorded separately according to the following categories.
		

		
			3.2       Exploration Petroleum Costs
		

		
			They are the Petroleum Costs incurred in the exploration Petroleum Operations inside an Exploration Perimeter, included in an Annual Work Program approved pursuant to the provisions of the Contract, and they shall include, without limitation:
		

		
			3.2.1    Geochemical, geophysical, paleontological, geological, topographical studies and the seismic campaigning as well as studies and interpretations related thereto.
		

		
			3.2.2    Coring, exploration wells, appraisal wells and wells drilled to supply water.
		

		
			3.2.3    Labor costs, materiel, supplies and services used to service exploration wells or appraisal wells of a discovery and which are not completed as producers.
		

		
			
		

		
			

		 

		

			74

		

 

		

		
			3.2.4    Equipment utilized exclusively to enhance and justify the objectives listed in Articles 3.2.1, 3.2.2 and 3.2.3 here above, including access roads and acquired geological and geophysical information.
		

		
			3.2.5    That portion of the Petroleum Costs incurred in construction of facilities and equipment, the overhead chargeable to exploration Petroleum Costs as such is derived from a fair allocation of the Petroleum Costs taken as a whole (including overhead) between exploration Petroleum Costs and the Petroleum Costs taken as a whole, with exception of overhead.
		

		
			3.2.6    All the other Petroleum Costs incurred for the purpose of exploration between the Effective Date and the startup of the commercial production of Hydrocarbons that are not included in Article 3.3 here below.
		

		
			3.3       Petroleum Costs of Development
		

		
			They are the Petroleum Costs incurred in development Petroleum Operations related to an Exploitation Authorization, and they include, without limitation:
		

		
			3.3.1    Development and production wells, including water-injection wells and gas-injection wells drilled for the purpose of enhancing recovery of Hydrocarbons as well as those intended to sequester and conserve natural gas.
		

		
			3.3.2    The wells which have been completed by setting casing or equipment after a well has been drilled with intent to complete it as a producer well or a water-injection well or a gas-injection well drilled for the purpose of increasing the recovery rate of Hydrocarbons as well as those wells the purpose of which is sequestration and conservation of natural gas.
		

		
			3.3.3    The costs of equipment related to production, transport and storage to the Delivery Point, such as pipelines, flow-lines, processing and production units, equipment on the well-head, underwater equipment, systems to increase recovery of Hydrocarbons, offshore platforms, production floating unit and/or production and storage floating units (FPO and FPSO), storage facilities, export terminals, port installations and auxiliary equipment, as well as access roads in relation to production activities.
		

		
			3.3.4    Engineering studies and design studies related to the equipment referred to in Article 3.3.3.
		

		
			3.3.5    The cost of construction, the overhead chargeable to Development Costs, as these are calculated according to the ratio of Development Costs over total Petroleum Costs, excluding overhead.
		

		
			3.3.6    Financial charges pertaining to the financing of Development Costs are excluded.
		

		
			3.4       Exploitation Petroleum Costs
		

		
			
		

		
			

		 

		

			75

		

 

		

		
			These are the Petroleum Costs incurred in an Exploitation Perimeter consequent to the startup of commercial Hydrocarbons production and which are neither exploration costs nor development costs nor overhead.
		

		
			Exploitation costs include more particularly the reserves built up for the purpose of meeting losses or charges, including the reserve to fund the Rehabilitation Plan, which reserve has been paid in full to the sequestered account opened for the purpose of financing rehabilitation of the site works in accordance with Article 23.2 of the Contract.
		

		
			The portion of overhead which has not been allocated to either exploration or development costs shall be included in exploitation costs.
		

		
			3.5       It is understood that depreciation of assets as calculated for the determination of taxable profits pursuant to the provisions of Article 4 here below are not Petroleum Costs and consequently, they do not enter into the determination of the Ratio “R”.
		

		
			ARTICLE 4:  CHARGES WHICH ARE DEDUCTIBLE FOR DETERMINATION OF THE
		

		
			INDUSTRIAL AND COMMERCIAL INCOME TAX 
		

		
			4.1       Deductible charges
		

		
			In accordance with Article 70 of the Crude Hydrocarbons Code, the charges which are deductible for the determination of the Industrial and Commercial Income Tax are made up of the following items, within the limits prescribed by this Accounting Procedure, and excluding those charges which are non-deductible as specified in Title 6 of the Crude Hydrocarbons Code and of costs non-chargeable to Petroleum as specified in Article 2.5 here above of this Appendix:
		

			
	
			
				 §
			

			
	
			
			The exploitation Petroleum Costs, as defined in the provisions of this Accounting Procedure ;

			
	
			
				 §
			

			
	
			
			The overhead in accordance with the provisions of Article 2-4 here above of this Appendix;

			
	
			
				 §
			

			
	
			
			Depreciation of assets which make up the development Petroleum Costs in according with the provisions of Article 4.2 below;

			
	
			
				 §
			

			
	
			
			Interest, interest for late payments, and financial charges, in accordance with the Article 2.3.9 here above ;

		
			
		

		
			

		 

		

			76

		

 

		

			
	
			
				 §
			

			
	
			
			Loss or wastage of materials and property arising out of destruction or casualty, uncollectible debts, and compensation paid to Third Parties on account of legal liability (unless these damages were caused by the Gross Negligence of the Contractor) ;

			
	
			
				 §
			

			
	
			
			Reserves which are reasonable and justified created for the purpose of meeting losses or clearly defined charges which the prevailing circumstances make probable;

			
	
			
				 §
			

			
	
			
			The non-recovered portion of deficits related to previous years within a limit of five (5) years following the fiscal year that shows a deficit.

		
			4.2       Depreciation of fixed assets
		

		
			Fixed assets of the Contractor that are required for Petroleum Operations are depreciated according to a straight-line dereciation method.
		

		
			The minimum span of the depreciation period shall be:
		

			
	
			
				 §
			

			
	
			
			ten (10) Calendar Years for assets related to the transport of Hydrocarbons production by pipeline;

			
	
			
				 §
			

			
	
			
			five (5) Calendar Years for the other fixed assets.

		
			The period of depreciation shall begin with the Calendar Year during which the said fixed assets have been acquired, or from the Calendar Year during which the fixed assets were placed into normal service if such latter year is after, pro rata temporis, the first Calendar Year in question.
		

		
			4.3       Exploration Petroleum Costs
		

		
			The petroleum Exploration Costs incurred by the Contractor for the Exploration Perimeter, including particularly the expenses of geological and geophysical exploration studies and the expenses of exploration drilling and appraisal of a discovery (excluding productive wells, which shall be considered assets which fall under the provisions of Article 4.2 here above of this Appendix), are considered charges deductible in full from the year they are entered on the books or they may be depreciated at the rate chosen by the Contractor.
		

		
			ARTICLE 5:  INVENTORIES
		

		
			5.1       Frequency
		

		
			The Contractor shall keep a permanent inventory in both quantity and value of all property used in Petroleum Operations and he shall, with reasonable frequency, and not less than once a year, proceed to take a physical inventory as required by the Parties.
		

		
			
		

		
			

		 

		

			77

		

 

		

		
			5.2       Notification
		

		
			Written notification of the intention to take a physical inventory must be sent by the Contractor not less than ninety days (90) days prior to the commencement of the taking of such inventory, so that the Ministry and the entities which make up the Contractor may if they wish be represented at their own expense during the taking of said inventory.
		

		
			5.3       Information
		

		
			Should the Ministry or an entity which makes up the Contractor not be represented when an inventory is taken, such Party will remain bound by the result of the inventory taken by the Contractor, who must furnish to said Party a copy of the said inventory.
		

		
			ARTICLE 6:  STATEMENTS OF OPERATIONS AND WORK, STATUS REPORTS
		

		
			6.1       Principles
		

		
			Other than the statements and supply of information provided for elsewhere, the Contractor must submit to the Ministry under terms, conditions and timelines indicated below, the details of its operations and works carried out as they have been booked in its accounts, documents, reports and statements which it must keep in relation to the Petroleum Operations.
		

		
			6.2       Statement of variations in fixed assets accounting and in inventory of materiel and consumables.
		

		
			This statement must be received by the Ministry not later than the fifteenth day (15th) day of the first month of each calendar Quarter. In particular, it shall state, for the preceding quarter what was acquired and created by way of fixed assets, of materiel and of consumables required for Petroleum Operations, for each deposit, and by major categories, as well as disposal of these items (assignments, wastage and losses, destruction, discarding and junk).
		

		
			6.3       Statement of the quantities of Crude Petroleum and of Natural Gas which have been transported during each month
		

		
			Such statement must reach the Ministry not later than the fifteenth (15th) day of each month.  For each deposit, it shall indicate the quantities of Crude Petroleum and of Natural Gas which have been transported in the course of the preceding month, between the field and the point of export or delivery, as well as the identification of the pipeline utilized and the cost of transport paid, whenever transport was carried out by Third Parties.  The statement must also show how the products transported in such manner are shared between the Parties.
		

		
			
		

		
			

		 

		

			78

		

 

		

		
			6.4       Statement of the recovery of Petroleum Costs
		

		
			This statement must reach the Ministry not later than the fifteenth (15th) day of each month.  It shall show, for the preceding month, the breakdown of the Petroleum Costs account and must reflect, in particular, the following:
		

			
	
			
				 §
			

			
	
			
			The Petroleum Costs which remain to be recovered as of the end of the preceding month;

			
	
			
				 §
			

			
	
			
			The Petroleum Costs related to activities during the month in question;

			
	
			
				 §
			

			
	
			
			The Petroleum Costs recovered in the course of the month indicating in particular quantities and value of production involved for this purpose;

			
	
			
				 §
			

			
	
			
			The amounts which are booked to reduce or diminish Petroleum Costs in the course of the month in question;

			
	
			
				 §
			

			
	
			
			The unrecovered Petroleum Costs as of the end of that month.

		
			6.5       Statement of the determination of the ratio « R »
		

		
			This statement must reach the Ministry not later than the fifteenth (15th) day of the first month of each Quarter.  It shall highlight each of the factors which enter into the determination of the “R” ratio as defined in Article 3 of this Accounting Procedure, as well as the resulting value of the ratio, which ratio is applicable during the subject Quarter.
		

		
			6.6       Inventories of Crude Petroleum and of Natural Gas
		

		
			This statement must reach the Ministry not later than the fifteenth (15th) day of each month.  It shall specify for the preceding month and for each storage location:
		

			
	
			
				 §
			

			
	
			
			Inventory at the commencement of the month;

			
	
			
				 §
			

			
	
			
			Addition to inventory in the course of the month;

			
	
			
				 §
			

			
	
			
			Withdrawals from inventories during the course of the month;

			
	
			
				 §
			

			
	
			
			Theoretical level of the inventory at the end of the month;

			
	
			
				 §
			

			
	
			
			Inventory at the end of the month taken by measurement;

			
	
			
				 §
			

			
	
			
			An explanation for discrepancies, if any.

		
			6.7       Tax returns
		

		
			The Contractor shall supply the Ministry with a copy of all returns which the entities which make up the Contractor are required to file with the Tax Administrations responsible for determining tax 
		

		
			
		

		
			

		 

		

			79

		

 

		

		
			basis; and in particular, those which pertain to the BIC tax on together with all annexes, documents, and supporting information attached thereto.
		

		
			6.8       Statement of payments of taxes and fees
		

		
			Not later than the fifteenth (15th) day of the first month of each Quarter, the Contractor shall prepare and submit to the Ministry a statement showing taxes, fees, and dues of any kind paid by it in the course of the preceding calendar Quarter; it shall detail precisely the nature of the tax, fee and dues involved (surface rentals, customs duties, etc.), the kind of payment involved (on account, balances, corrections, etc.), the date and the amount of each payment, the designation of the tax collector responsible for the collection, and other further useful information.
		

		
			6.9       Special provisions
		

		
			The statements, lists, and information referred to in Articles 6.2 to 6.8 shall be produced and submitted in accordance with printed forms issued by the Ministry, after consultation with the Contractor.
		

		
			The Ministry may, as needed, request that the Contractor furnish it with all other statements, reports and information that the Ministry deems useful.
		

		
			
		

		
			

		 

		

			80

		

 

		

		
			APPENDIX 3:  MODEL BANK GUARANTEE
		

		
			Attached and being an integral part of the Contract between the Islamic Republic of Mauritania and the Contractor (On letterhead of the Bank)
		

		
			To the Honorable Minister in Charge of Crude Hydrocarbons,
		

		
			Nouakchott
		

		
			Mauritania
		

		
			Amount : -----
		

		
			In letters : ----------------------------------------
		

		
			We have been informed that, upon the date of -----, the Mauritanian State entered into an exploration-production contract with the Contractor constituted by the following entities:
		

		
			Kosmos Energy Mauritania
		

		
			----------------------------------------
		

		
			Grand Cayman
		

		
			----------------------------------------
		

		
			Kosmos Energy Mauritania --------, address -------- is the Principal and has been so designated here below.
		

		
			Pursuant to Article 4.6  of this Contract, a bank guarantee of proper discharge of the minimum work obligations, for work committed to the first phase of the Exploration Period of the contract,  must be  remitted to the State.
		

		
			That said, we (name of bank -------------, address ---------------) referred to hereafter as «the Bank», upon instructions from the Principal, commit ourselves through this Guarantee, in an irrevocable fashion, to pay to the Mauritanian State, independently of the validity and legal merits under the Contract in question and without raising any exception, nor objection arising from the said Contract, upon your first demand, any amount up to the maximum amount cited above in this letter of of guarantee, upon receipt  by ourselves of a demand for payment duly signed and a written confirmation on your part certifying that the Contractor has not fulfilled the minimum work obligations above-mentioned and specifying the nature as well of the estimated cost of the work not executed.
		

		
			For reasons of identification, your written demand for payment will only be considered valid if it reaches us through the intermediary of our corresponding bank located in Mauritania (name-------, address ----------), accompanied by a declaration of the latter certifying that it proceeded with the verification of your signature.
		

		
			Your call is also acceptable to the extent that it is fully transmitted to us by the bank in question by means of a telex/SWIFT confirming that it has sent us the original by registered mail or by another courier service and that the signature appearing there was verified by the latter. 
		

		
			The amount of the Guarantee shall be reduced by the amount of the expenditures made by ________, upon receipt by the Bank of a copy of a work completion statement signed by the Mauritanian State and attesting to said expenditures and to the resulting new Guarantee amount, in accordance with the model in Annex A.
		

		
			
		

		
			

		 

		

			81

		

 

		

		
			Our guarantee is valid up until the --------------------------------- (provide for 6 months after the end of the phase in question of the Exploration Period) and shall terminate automatically and entirely if your demand for payment or the telex/SWIFT does not reach us at the address here above by such date at the latest, whether it is a business day or not.
		

		
			All the bank fees in connection with this guarantee are at the expense of the Principal.
		

		
			This guarantee is subject to the « Uniform Rules for Demand Guarantees of the ICC » of the International Chamber of Commerce (ICC Publication in force No. 758).
		

			
	
			
				 ·
			

			
	
			
			Signature of the authorized representative and seal of the Bank

		
			Annex A
		

		
			Model notification of expenditure and reduction of guarantee to be used
		

		
			Notification of expenditure and reduction of guarantee
		

		
			To the Minister in Charge of Crude Hydrocarbons
		

		
			Mauritanian State
		

		
			Nouakchott
		

		
			Mauritania
		

		
			Purpose:  Notification of expenditure and reduction of guarantee amount ref. XXXX
		

		
			Honorable Minister,
		

		
			We refer to the Exploration and Production Contract signed on ____, as well as the bank guarantee of proper discharge in the initial amount of USD ___given by _____on _____ under reference no. _____.
		

		
			On ____ the amounts expended were USD____.  Accordingly the amount of said guarantee is reduced to ____ (numbers plus letters).
		

		
			Polite closure statement
		

		
			Date:
		

		
			Signature of Contracting Entity
		

		
			Confirmation of Principal (KOSMOS ENERGY)
		

		
			"Stamp of the Minister in charge of Hydrocarbons, authorized signature
		

		
			Preceded by the statement “Agreed for the reduction of the guarantee in question in the amount of XXXX”
		

		
			NAME + FUNCTION + STAMP of the Minister"
		

		
			 
		

		 

		

			82

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00267-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00267-of-00352.parquet"}]]