Document:

exv10w1

 

Exhibit 10.1

 

 

EPCM Services Agreement

Between

Bogoso Gold Limited

and

GRD Minproc (Pty) Limited

and

GRD Minproc Limited

06 April 2006

 

 

 

 

Table of Contents

	 	 	 	 	 	 	 
	 	 	 	 	Page No.
	 
	 	 	 	 	 	 
	Formal Instrument of Agreement	 	 	5	 
	 
	 	 	 	 	 	 
	General Conditions	 	 	9	 
	 
	 	 	 	 	 	 
	Particular Conditions	 	 	11	 
	 
	 	 	 	 	 	 
	A.

	 	References From Clauses in the General Conditions
	 	 	12	 
	 
	 	 	 	 	 	 
	B.

	 	Deleted Clauses
	 	 	14	 
	 
	 	 	 	 	 	 
	C.

	 	Additional Clauses
	 	 	14	 
	 
	 	 	 	 	 	 
	45.

	 	Definitions and Interpretation
	 	 	15	 
	 
	 	 	 	 	 	 
	45.1

	 	Definitions (replacing Clause 1)
	 	 	15	 
	45.2

	 	Interpretation (replacing Clause 2)
	 	 	22	 
	45.3

	 	Ambiguous and Inconsistent Terms
	 	 	23	 
	45.4

	 	Matters of Clarification (General)
	 	 	24	 
	45.5

	 	Best Endeavours
	 	 	24	 
	 
	 	 	 	 	 	 
	46.

	 	Appointment, Obligations, Warranties, and Covenants of the
Consultant (replacing Clauses 3, 4 and 5(i), 5(ii)(a) and 5(ii)(b))
	 	 	25	 
	 
	 	 	 	 	 	 
	46.1

	 	Appointment of Consultant
	 	 	25	 
	46.2

	 	Standard of Care
	 	 	25	 
	46.3

	 	Warranties and Covenants
	 	 	25	 
	46.4

	 	Delivery of Services
	 	 	26	 
	46.5

	 	Design Obligations
	 	 	28	 
	46.6

	 	Management of Project Contractors
	 	 	29	 
	46.7

	 	Labour, Environmental, Indigenous, OHS and Quality Assurance Plans
	 	 	31	 
	46.8

	 	Local Content
	 	 	32	 
	46.9

	 	Monthly Reporting
	 	 	33	 
	46.10

	 	Records Open for Inspection and Audit
	 	 	34	 
	 
	 	 	 	 	 	 
	47.

	 	Obligations of the Client
	 	 	34	 
	 
	 	 	 	 	 	 
	47.1

	 	Failure to fulfil Obligations (replacing Clauses 7 and 8)
	 	 	34	 
	47.2

	 	Responsibilities (amending Clause 9)
	 	 	35	 
	47.3

	 	Client provided Personnel, Equipment, Facilities and Services
	 	 	35	 
	 
	 	 	 	 	 	 
	48.

	 	Site
	 	 	35	 
	 
	 	 	 	 	 	 
	48.1

	 	Access
	 	 	35	 
	48.2

	 	Induction Training
	 	 	35	 
	48.3

	 	Safety Requirements
	 	 	36	 
	48.4

	 	Access for the Client, the Client’s Representative and others
and Site Condition
	 	 	37	 
	48.5

	 	Access by Project Contractors
	 	 	38	 
	48.6

	 	Operation of Existing Plant
	 	 	38	 
	48.7

	 	Things of Value or Interest
	 	 	39	 
	 
	 	 	 	 	 	 
	49.

	 	Personnel (Replacing Clauses 11, 12, 13 and 15)
	 	 	39	 
	 
	 	 	 	 	 	 
	49.1

	 	General
	 	 	39	 
	49.2

	 	Key Personnel
	 	 	40	 
	49.3

	 	Non-Solicitation
	 	 	42	 
	49.4

	 	Consultant’s Code of Conduct
	 	 	42	 
	49.5

	 	Privacy
	 	 	42	 
	 
	 	 	 	 	 	 
	50.

	 	Administration (Amending Clause 14)
	 	 	43	 
	 
	 	 	 	 	 	 
	50.1

	 	The Client’s Representative
	 	 	43	 
	50.2

	 	Delegation of the Client’s Representative’s Power
	 	 	43	 
	50.3

	 	Compliance with Directions
	 	 	44	 
	50.4

	 	Consultant’s Representative
	 	 	45	 
	50.5

	 	Delegation of Consultant’s Representative’s Power
	 	 	45	 
	50.6

	 	Consultant’s Acknowledgment
	 	 	45	 
	50.7

	 	Project Control Group
	 	 	46	 
	50.8

	 	Project Management Plan
	 	 	46	 
	 
	 	 	 	 	 	 
	51.

	 	Liability (Replacing Clauses 16 And 18)
	 	 	47	 
	 
	 	 	 	 	 	 
	51.1

	 	Liability of Consultant
	 	 	47	 
	51.2

	 	Liability of Client
	 	 	47	 
	51.3

	 	Maximum Liability
	 	 	47	 
	51.4

	 	Excluded Losses
	 	 	50	 
	51.5

	 	Exclusive Remedies
	 	 	50	 
	51.6

	 	Re-performance of non-complying Services and Indemnity
	 	 	50	 
	51.7

	 	Indemnity and Proportionality
	 	 	51	 
	 
	 	 	 	 	 	 
	52.

	 	Insurance (Replacing Clauses 19 and 20)
	 	 	52	 
	 
	 	 	 	 	 	 
	52.1

	 	Client’s Insurances Required
	 	 	52	 
	52.2

	 	General Provisions regarding the Client’s Insurance	 	 	53	 
	52.3

	 	Consultant’s Insurances Required
	 	 	53	 
	52.4

	 	Project Contractor Insurance
	 	 	54	 
	52.5

	 	Requirements for Insurance
	 	 	54	 
	52.6

	 	Proof of insurance
	 	 	54	 
	52.7

	 	Payment of Excesses
	 	 	54	 
	 
	 	 	 	 	 	 
	53.

	 	Time (Replacing Clause 25)
	 	 	54	 
	 
	 	 	 	 	 	 
	53.1

	 	Instruction to Accelerate
	 	 	54	 

Page 2 of 85

 

	 	 	 	 	 	 	 
	 	 	 	 	Page No.
	 
	53.2

	 	Acceleration
	 	 	55	 
	 
	 	 	 	 	 	 
	54.

	 	Variation to the Scope of Works (Replacing Clauses 23 and 24)
	 	 	55	 
	 
	 	 	 	 	 	 
	54.1

	 	Works Variation
	 	 	55	 
	54.2

	 	Parties to Discuss
	 	 	55	 
	54.3

	 	Client to Determine
	 	 	55	 
	54.4

	 	Time
	 	 	56	 
	54.5

	 	Clarity
	 	 	56	 
	 
	 	 	 	 	 	 
	55.

	 	Variation to the Scope of Services (Replacing Clauses 23 and 24)
	 	 	56	 
	 
	 	 	 	 	 	 
	55.1

	 	Services Variation
	 	 	56	 
	55.2

	 	Value
	 	 	56	 
	55.3

	 	Time
	 	 	56	 
	55.4

	 	Clarity
	 	 	56	 
	55.5

	 	Variations — General
	 	 	57	 
	 
	 	 	 	 	 	 
	56.

	 	Separable Portions
	 	 	57	 
	 
	 	 	 	 	 	 
	56.1

	 	Agreement on Separable Portions
	 	 	57	 
	56.2

	 	Changes relating to Separable Portions
	 	 	57	 
	56.3

	 	Interpretation of Terms
	 	 	57	 
	56.4

	 	Consequences of Separable Portion
	 	 	57	 
	 
	 	 	 	 	 	 
	57.

	 	Suspension of Services (Replacing Clauses 26, 27 and 28)
	 	 	58	 
	 
	 	 	 	 	 	 
	57.1

	 	Suspension by Client or Consultant
	 	 	58	 
	57.2

	 	Recommencement of Services
	 	 	58	 
	57.3

	 	Suspension Costs
	 	 	58	 
	 
	 	 	 	 	 	 
	58.

	 	Force Majeure (Replacing Clauses 26, 27 and 28)
	 	 	59	 
	 
	 	 	 	 	 	 
	58.1

	 	Force Majeure occurrence
	 	 	59	 
	58.2

	 	Cessation
	 	 	59	 
	58.3

	 	Termination resulting from Force Majeure delays
	 	 	59	 
	 
	 	 	 	 	 	 
	59.

	 	Completion of the Project
	 	 	60	 
	 
	 	 	 	 	 	 
	59.1

	 	Practical Completion
	 	 	60	 
	59.2

	 	Final Completion
	 	 	61	 
	 
	 	 	 	 	 	 
	60.

	 	Defects Liability
	 	 	62	 
	 
	 	 	 	 	 	 
	60.1

	 	Consultant to Rectify Defects in the Services
	 	 	62	 
	60.2

	 	Cost of Rectification of Defects
	 	 	63	 
	60.3

	 	Failure to Rectify
	 	 	63	 
	 
	 	 	 	 	 	 
	61.

	 	Termination of Services (Replacing Clauses 26, 27 and 28)
	 	 	63	 
	 
	 	 	 	 	 	 
	61.1

	 	Termination by the Client
	 	 	63	 
	61.2

	 	Actions by Consultant on Termination
	 	 	63	 
	61.3

	 	Payment to Consultant
	 	 	64	 
	61.4

	 	Sole Entitlement
	 	 	64	 
	 
	 	 	 	 	 	 
	62.

	 	Invoicing and Payment (Replacing Clauses 30, 31 and 34)
	 	 	64	 
	 
	 	 	 	 	 	 
	62.1

	 	Client’s Payment Obligations
	 	 	64	 
	62.2

	 	Electronic Funds Transfer
	 	 	65	 
	62.3

	 	Time for and format of Payment Claims
	 	 	65	 
	62.4

	 	Consultant Warranty
	 	 	65	 
	62.5

	 	Payment
	 	 	66	 
	62.6

	 	Payment Adjustment Statement
	 	 	66	 
	62.7

	 	Conditions Precedent to Entitlement to Payment
	 	 	67	 
	62.8

	 	Final Payment Claim
	 	 	67	 
	62.9

	 	Interest on Overdue Payments
	 	 	68	 
	62.10

	 	Set off
	 	 	69	 
	62.11

	 	Client’s Payment of Subcontractors
	 	 	69	 
	62.12

	 	Property and Liens
	 	 	69	 
	62.13

	 	Taxes
	 	 	70	 
	62.14

	 	Disbursements
	 	 	70	 
	62.15

	 	Rates
	 	 	70	 
	 
	 	 	 	 	 	 
	63.

	 	Default by a Party
	 	 	70	 
	 
	 	 	 	 	 	 
	63.1

	 	Default by Consultant
	 	 	70	 
	63.2

	 	Default by Client
	 	 	72	 
	 
	 	 	 	 	 	 
	64.

	 	Insolvency
	 	 	73	 
	 
	 	 	 	 	 	 
	65.

	 	Intellectual Property
	 	 	75	 
	 
	 	 	 	 	 	 
	65.1

	 	Client to Procure
	 	 	75	 
	 
	 	 	 	 	 	 
	66.

	 	Assignment (Replacing Clause 38)
	 	 	75	 
	 
	 	 	 	 	 	 
	66.1

	 	Assignment by Consultant
	 	 	75	 
	66.2

	 	Assignment by Client to Affiliates and Third Parties
	 	 	76	 
	66.3

	 	Assignment by Client to Financing Entities
	 	 	76	 
	66.4

	 	Cooperation with Financing Entities and Insurers
	 	 	76	 
	 
	 	 	 	 	 	 
	67.

	 	Confidentiality (Replacing Clause 42)
	 	 	77	 
	 
	 	 	 	 	 	 
	67.1

	 	Keep Confidential
	 	 	77	 

Page 3 of 85

 

	 	 	 	 	 	 	 
	 	 	 	 	Page No.
	 
	67.2

	 	Extension of Obligations
	 	 	77	 
	67.3

	 	Continuation of Obligations
	 	 	77	 
	 
	 	 	 	 	 	 
	68.

	 	Settlement of Disputes (Replacing Clauses 43.8 and 44)
	 	 	77	 
	 
	 	 	 	 	 	 
	68.1

	 	Failure of Mediation
	 	 	77	 
	68.2

	 	Matters Precedent to Litigation
	 	 	78	 
	68.3

	 	Dispute Resolution not to delay Performance
	 	 	78	 
	 
	 	 	 	 	 	 
	69.

	 	Security
	 	 	78	 
	 
	 	 	 	 	 	 
	69.1

	 	Consultant Security
	 	 	78	 
	69.2

	 	Client Security
	 	 	78	 
	69.3

	 	Interest on Security
	 	 	79	 
	69.4

	 	Security not on Trust
	 	 	80	 
	69.5

	 	Release of Security
	 	 	80	 
	69.6

	 	Dealing with Security
	 	 	80	 
	 
	 	 	 	 	 	 
	70.

	 	Guarantee and Indemnity
	 	 	81	 
	 
	 	 	 	 	 	 
	70.1

	 	Consideration
	 	 	81	 
	70.2

	 	Guarantee
	 	 	81	 
	70.3

	 	Continuing Security
	 	 	81	 
	70.4

	 	Matters Not Affecting Guarantor’s Liability
	 	 	81	 
	70.5

	 	Payment Later Avoided
	 	 	82	 
	70.6

	 	Indemnity on Disclaimer
	 	 	82	 
	70.7

	 	Guarantor Not to Prove in Liquidation or Bankruptcy
	 	 	82	 
	70.8

	 	Guarantor Not to Claim Benefits or Enforce Rights
	 	 	82	 
	70.9

	 	Costs and Expenses
	 	 	82	 
	70.10

	 	Guarantee to Continue on Assignment of Rights
	 	 	83	 
	70.11

	 	Limit of Guarantor’s Liability
	 	 	83	 
	 
	 	 	 	 	 	 
	71.

	 	General
	 	 	83	 
	 
	 	 	 	 	 	 
	71.1

	 	Legal costs
	 	 	83	 
	71.2

	 	Waiver and exercise of rights
	 	 	83	 
	71.3

	 	Severance
	 	 	83	 
	71.4

	 	After hours communications
	 	 	84	 
	71.5

	 	Process service
	 	 	84	 
	71.6

	 	Entire understanding
	 	 	84	 
	71.7

	 	Nature of the Relationship
	 	 	84	 
	71.8

	 	Third Party Rights
	 	 	85	 
	71.9

	 	Effective Date (replacing Clause 21)
	 	 	85	 
	71.10

	 	Jurisdiction
	 	 	85	 
	 
	 	 	 	 	 	 
	Appendix A — Scope of Services	 	 	87	 
	 
	 	 	 	 	 	 
	Appendix B — Personnel, Equipment, Facilities and Services of Others
to be Provided by the Client	 	 	94	 
	 
	 	 	 	 	 	 
	Appendix C — Remuneration and Payment	 	 	96	 
	 
	 	 	 	 	 	 
	Appendix D — Scope of Works	 	 	110	 
	 
	 	 	 	 	 	 
	Appendix E — Insurances	 	 	113	 
	 
	 	 	 	 	 	 
	Appendix F — Key Personnel	 	 	115	 
	 
	 	 	 	 	 	 
	Appendix G — Material Project Contractor	 	 	118	 
	 
	 	 	 	 	 	 
	Appendix H — Client Deliverables (Including Client Approvals)	 	 	120	 
	 
	 	 	 	 	 	 
	Appendix I— Project Budget	 	 	122	 
	 
	 	 	 	 	 	 
	Appendix J — Project Schedule	 	 	124	 
	 
	 	 	 	 	 	 
	Appendix K — Code of Conduct	 	 	126	 
	 
	 	 	 	 	 	 
	Appendix L — Not Used	 	 	132	 
	 
	 	 	 	 	 	 
	Appendix M — Approved Performance Bond	 	 	133	 
	 
	 	 	 	 	 	 
	Appendix N — Deed of Release	 	 	136	 

Page 4 of 85

 

Formal Instrument of Agreement

THIS AGREEMENT made the 06th day of April 2006

Among:

Bogoso Gold Limited of Level 2, No. 1 Milne Close,
P.O. Box 16075, Airport Post Office, Accra, Ghana (“Client”)

And:

GRD Minproc (Pty) Limited, Registration No.
2002/021267/07, of Unit 1, Highbury House, Hampton Office Park
North, 20 Georgian Crescent, Bryanston, South Africa
(“Consultant”)

And:

GRD Minproc Limited, ABN 52 008 992 694 of Level 8,
140 St. Georges Terrace, Perth, Western Australia, 6000
(“Guarantor”)

Recitals:

	A.	 	The Client desires to build the Project, which when designed, constructed and commissioned,
shall meet the following requirements:

	 	(a)	 	the Project shall be a sulphide ore treatment plant;
	 
	 	(b)	 	the Project shall be capable of processing 3.5 million tonnes of sulphide ore
per annum;
	 
	 	(c)	 	except for routine, predictive or preventative maintenance, the Project shall
be capable of continuous operation 24 hours per day, 365 days per year;
	 
	 	(d)	 	except for components that routinely require replacement or repair due to
normal operating conditions, the Project shall have a life expectancy commensurate
with the life of the Bogoso mine; and
	 
	 	(e)	 	the Project or its various components (as the case may be) shall be capable
of operating continuously at the level, rate or capacity specified in the Performance
Warranties in Appendix L.

	B.	 	The Client has requested that the Consultant performs the Services on the terms and
conditions of the Agreement.

	C.	 	The Consultant has agreed to perform the Services on the terms and conditions of the
Agreement.

Page 5 of 85

 

It is Agreed:

	1.	 	In the Agreement, unless the context indicates otherwise, words and expressions shall have
the meanings assigned to them in the Particular Conditions and the General Conditions.

	2.	 	The Agreement is comprised of this Formal Instrument of Agreement together with the following
documents which, unless otherwise stated, are attached to this Formal Instrument of Agreement,
namely:

	 	(a)	 	The Particular Conditions;
	 
	 	(b)	 	The General Conditions; and
	 
	 	(c)	 	The Appendices, namely:

	 	(i)	 	Scope of Services;
	 
	 	(ii)	 	Personnel, Equipment, Facilities & Services of Others to be
provided by the Client;
	 
	 	(iii)	 	Remuneration and Payment;
	 
	 	(iv)	 	Scope of Works;
	 
	 	(v)	 	Insurances;
	 
	 	(vi)	 	Key Personnel;
	 
	 	(vii)	 	Material Project Contractor;
	 
	 	(viii)	 	Client Deliverables (including Client Approvals);
	 
	 	(ix)	 	Project Budget;
	 
	 	(x)	 	Project Schedule;
	 
	 	(xi)	 	Code of Conduct;
	 
	 	(xii)	 	Performance Warranties.
	 
	 	(xiii)	 	Approved Performance Bond; and
	 
	 	(xiv)	 	Deed of Release.

	3.	 	In the event of any ambiguity or discrepancy between anything contained in or between any
documents forming part of the Agreement, the terms of this Formal Instrument of Agreement
shall prevail to the extent of the inconsistency and the remaining documents shall, for the
purposes of construction and interpretation of the Agreement, be construed in

Page 6 of 85

 

	 	 	descending order of precedence having regard to the order in which the documents are set
out in Clause 2 of this Formal Instrument of Agreement.

	4.	 	In consideration of the payments to be made by the Client to the Consultant pursuant to the
Agreement, the Consultant agrees to perform the Services in accordance with the provisions of
the Agreement.

	5.	 	The Client agrees to pay the Consultant, in consideration for the performance of the
Services, such amounts as may become payable under the provisions of the Agreement and to
reimburse all expenses incurred in the performance of the Services at the times and in the
manner provided by the Agreement.

	6.	 	The Agreement may be executed in any number of counterparts. Each counterpart is an original
but the counterparts together are one and the same agreement. The Agreement is binding on the
parties on the exchange of counterparts. A copy of a counterpart sent by facsimile machine or
by electronic mail:

	 	(a)	 	shall be treated as an original counterpart;
	 
	 	(b)	 	is sufficient evidence of the execution of the original; and
	 
	 	(c)	 	may be produced in evidence for all purposes in place of the original.

Page 7 of 85

 

Executed as an Agreement:

	 	 	 	 	 	 	 	 	 	 	 
	For and on behalf of

	 	 	 	 	)	 	 	 	 	 
	Bogoso Gold Limited

	 	 	 	 	)	 	 	 	 	 
	 

	 	 	 	 	)	 	 	 	 	 
	/s/ Peter Bradford

	 	 	 	 	)	 	 	/s/ Mark D. Collopy	 	 
	 	 	 	 	 	 	 
	Signature of Director

	 	 	 	 	)	 	 	Signature of Director	 	 
	 

	 	 	 	 	)	 	 	 	 	 
	Peter Bradford

	 	 	 	 	)	 	 	Mark D. Collopy	 	 
	 	 	 	 	 	 	 
	Name of Director

	 	 	 	 	)	 	 	Name of Director	 	 
	 

	 	 	 	 	)	 	 	 	 	 
	 

	 	 	 	 	)	 	 	 	 	 
	For and on behalf of

	 	 	 	 	)	 	 	 	 	 
	GRD Minproc (Pty) Limited

	 	 	 	 	)	 	 	 	 	 
	 

	 	 	 	 	)	 	 	 	 	 
	/s/ Andrew Sweeney

	 	13/4/06
	 	 	)	 	 	/s/ Roger E.R. Falls
	 	13/4/06
	 	 	 	 	 	 	 
	Signature of Director/Secretary

	 	 	 	 	)	 	 	Signature of Director	 	 
	 

	 	 	 	 	)	 	 	 	 	 
	Andrew Sweeney

	 	13/4/06
	 	 	)	 	 	Roger E.R. Falls
	 	13/4/06
	 	 	 	 	 	 	 
	Name of Director/Secretary

	 	 	 	 	)	 	 	Name of Director	 	 
	 

	 	 	 	 	)	 	 	 	 	 
	For and on behalf of

	 	 	 	 	)	 	 	 	 	 
	The Common Seal of GRD Minproc Limited
was
affixed in accordance with its constitution
 in the
presence of:

	 	 	 	 	)

)

)	 	 	 	 	 
	 

	 	 	 	 	)	 	 	 	 	 
	 	 	 	 	 	 	 
	Signature of Director/Secretary

	 	 	 	 	)	 	 	Signature of Director	 	 
	 

	 	 	 	 	)	 	 	 	 	 
	 	 	 	 	 	 	 
	Name of Director/Secretary

	 	 	 	 	)	 	 	Name of Director	 	 

Page 8 of 85

 

General Conditions

Page 9 of 85

 

General Conditions

The General Conditions shall be the International Federation
of Consulting Consultants (FIDIC) Client / Consultant Model
Services Agreement, third edition (1998) as amended by the
Particular Conditions of Agreement.

Page 10 of 85

 

Particular Conditions

Page 11 of 85

 

Particular Conditions of Contract

	 	 	 	 	 	 	 
	A.	 	References From Clauses in the General Conditions
	 
	 	 	 	 	 	 
	1.

	 	Clause 14:
	 	Representatives:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Client:
	 	Mark Collopy
	 
	 	 	 	 	 	 
	 

	 	 	 	Consultant:
	 	John Hawxby
	 
	 	 	 	 	 	 
	2.

	 	Clause 17:
	 	Duration of liability	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	52 weeks from the end of the Term or 52 weeks from the Date of Practical
Completion of the Project, whichever is the earliest.
	 
	 	 	 	 	 	 
	3.

	 	Clause 22:
	 	Date of Commencement:
	 	21 February 2005
	 
	 	 	 	 	 	 
	 

	 	 	 	Date for Practical Completion:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Oxide Plant:
	 	17 March 2006
	 
	 	 	 	 	 	 
	 

	 	 	 	Sulphide Plant:
	 	30 June 2006.
	 
	 	 	 	 	 	 
	4.	 	Clause 32:	 	Currency of Payments to Consultant:	 	Rand. 
	 
	 	 	 	 	 	 
	5.

	 	Clause 36:
	 	Language(s) of the Agreement:
	 	English
	 
	 	 	 	 	 	 
	 

	 	 	 	Ruling Language:
	 	English
	 
	 	 	 	 	 	 
	 

	 	 	 	Law to which Agreement is subject:
	 	England
	 
	 	 	 	 	 	 
	6.

	 	Clause 37:
	 	Principal place of business:
	 	South Africa.
	 
	 	 	 	 	 	 
	7.	 	Clause 41:	 	Unless advised otherwise in writing, the Client’s particulars for
services or delivery of notices under the Agreement are not set out in
Appendix A, but rather are:
	 
	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Bogoso Gold Limited
	 

	 	 	 	Attention:
	 	Mark Collopy
	 

	 	 	 	Address:
	 	Level 2, No. 1 Milne Close
	 

	 	 	 	 	 	P.O. Box 16075
	 

	 	 	 	 	 	Airport Post Office
	 

	 	 	 	 	 	Accra, Ghana
	 
	 	 	 	 	 	 
	 

	 	 	 	Facsimile No.:
	 	(23) (32) 177-7700
	 

	 	 	 	Electronic Mail Address:
	 	mcollopy@gsrgh.com
	 

	 	 	 	Attention:
	 	General Manager Projects

Page 12 of 85

 

	 	 	 	 	 	 	 
	 

	 	 	 	with a copy to:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Golden Star Resources Ltd.
	 

	 	 	 	Attention:
	 	Peter Bradford
	 

	 	 	 	Address:
	 	10901 W. Toller Drive, Suite 300
	 

	 	 	 	 	 	Littleton, CO 80127
	 

	 	 	 	 	 	USA
	 
	 	 	 	 	 	 
	 

	 	 	 	Facsimile No.:
	 	(303) 830-9094
	 

	 	 	 	Electronic Mail Address:
	 	pbradford@gsr.com
	 

	 	 	 	Attention:
	 	President and CEO
	 
	 	 	 	 	 	 
	 	 	 	 	Unless advised otherwise in writing, the Consultant’s particulars for
delivery of notices under the Agreement are not set out in Appendix A, but
rather are:
	 
	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	GRD Minproc (Pty) Limited
	 

	 	 	 	Attention:
	 	John Hawxby
	 

	 	 	 	Address:
	 	Unit 1, Highbury House, Hampton Office
	 

	 	 	 	 	 	Park North
	 

	 	 	 	 	 	20 Georgian Crescent, Bryanston 2021
	 

	 	 	 	 	 	South Africa
	 
	 	 	 	 	 	 
	 

	 	 	 	Facsimile No.:
	 	(27) (11) 514-0006
	 

	 	 	 	Electronic Mail Address:
	 	john.hawxby@minproc.co.za
	 
	 	 	 	 	 	 
	 	 	 	 	Unless advised otherwise, in writing, the Guarantor’s particulars for
service or delivery of notices under the Agreement are not set out in
Appendix A, but rather are:
	 
	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	GRD Minproc Limited
	 

	 	 	 	Attention:
	 	Ben Zikmundovsky
	 

	 	 	 	Address:
	 	Unit 1, Highbury House, Hampton Office
	 

	 	 	 	 	 	Park North
	 

	 	 	 	 	 	20 Georgian Crescent, Bryanston 2021
	 

	 	 	 	 	 	South Africa
	 
	 	 	 	 	 	 
	 

	 	 	 	Facsimile No.:
	 	(27) (11) 514-0006
	 

	 	 	 	Electronic Mail Address:
	 	ben.zikmundovsky@minproc.co.za
	 
	 	 	 	 	 	 
	 	 	 	 	Notices issued by the Client shall be titled “Notice to Consultant — BSEP
EPCM Contract” or “Notice to Client — Bogoso Sulphide Expansion
Project EPCM Contract”, as the case may be, and such notices shall be
sequentially numbered and shall be preceded by the year of issue, for
example, “yyyy mm dd NT: Bogoso Gold Limited 001” or “yyyy mm dd NT:
Consultant 001”.
	 
	 	 	 	 	 	 
	 	 	 	 	References to “telex” are to be replaced with “facsimile”.

Page 13 of 85

 

			
	B.	 	Deleted Clauses

The Following Clauses are deleted from the General Conditions and replaced by the stated
Additional Clauses specified below in Section C:

	 	 	 	 	 
	 	 	Clause replaced by
	Clause deleted from General Conditions	 	Additional Clause in Section C
	1

	 	 	45.1	 
	2

	 	 	45.2	 
	3

	 	 	46	 
	4

	 	 	46	 
	5(i), 5(ii)(a) and 5(ii)(b)

	 	 	46	 
	7 and 8

	 	 	47.2	 
	11, 12, 13 and 15

	 	 	49	 
	16 and 18

	 	 	51	 
	19 and 20

	 	 	52	 
	21

	 	 	71.9	 
	23 and 24

	 	54 and 55

	25

	 	 	53	 
	26, 27 and 28

	 	57, 58 and 61

	30, 31 and 34

	 	61 and 62

	38

	 	 	66	 
	42

	 	 	67	 
	43.8 and 44

	 	 	68	 

			
	C.	 	Additional Clauses

Context and interpretation

These Additional Clauses shall be read and interpreted in conjunction with the General
Conditions and all the terms and expressions defined herein shall bear the same meanings
assigned thereto in the General Conditions unless expressly stated or the context indicates
otherwise.

Page 14 of 85

 

	45.	 	Definitions and Interpretation

45.1 Definitions (replacing Clause 1)

	 	 	“Agreed Compensation” means interest at an annual rate of 9% for any amount unpaid by the
Client calculated from the date such amount was due to have been paid until is paid.
	 
	 	 	“Agreement” has the meaning given in Clause 2 of the Formal Instrument of Agreement.
	 
	 	 	“Authorities” means all governmental, semi-governmental, local and other authorities that
exercise jurisdiction over the Services or the Project.
	 
	 	 	“Business Day” means a day other than a Saturday, Sunday or bank or public holiday in Ghana
or South Africa.
	 
	 	 	“Claim” includes any action, suit, claim, demand or proceeding of any nature.
	 
	 	 	“Client Approval” means any licence, permit, consent, approval, determination or
permission, the obtaining of which is specifically agreed by the parties to be part of the
Client’s responsibility in Appendix H.
	 
	 	 	“Client Deliverables” means any thing, document and action specifically identified in the
Agreement as being required to be delivered or procured by the Client or a third party on
behalf of the Client to the Consultant, including without limiting the foregoing those
things, documents and actions listed in Appendix H.
	 
	 	 	“Client’s Representative” means the representative of the Client appointed by the Client
pursuant to Clause 14.
	 
	 	 	“Client Standards and Procedures” means the standards and procedures prescribed from time
to time by the Client with respect to the Project or any part of it.
	 
	 	 	“Code of Conduct” means the Consultant’s code of conduct to apply to the Consultant’s
Personnel and subcontractors whilst in Ghana and on Site, set out in Appendix K, as amended
from time to time.
	 
	 	 	“Consultant Approval” means any licence, permit, consent, approval, determination or
permission that may be required in respect of the Project, except Client Approvals.
	 
	 	 	“Consultant’s Representative” means the representative of the Consultant appointed by the
Consultant pursuant to Clause 14.
	 
	 	 	“Date for Practical Completion” means the date stated in the Particular Conditions pursuant
to Clause 22, as amended or varied in accordance with the Agreement.
	 
	 	 	“Date of Commencement” means the date stated in the Particular Conditions pursuant to
Clause 22.

Page 15 of 85

 

	 	 	“Date of Final Completion” means the date on which the Project reaches Final Completion in
accordance with the Agreement.
	 
	 	 	“Date of Practical Completion” means, in relation to the Project, a Separable Portion or a
part of the Works, the date on which the Project or the Separable Portion or the part of
the Works, respectively, reaches Practical Completion in accordance with the Agreement.
	 
	 	 	“Defective EPCM Services” means:

	 	(a)	 	a failure to perform any part of the Services in accordance with, and to the
standard required by, the Agreement including the standards set out in Appendices A or
K; or
	 
	 	(b)	 	an omission of Services,

	 	 	but does not include defects or omissions arising out of or in connection with:

	 	(c)	 	any negligent act or omission by a third party, including a Project
Contractor, that does not arise as a result of an act or omission by the Consultant;
	 
	 	(d)	 	any negligent act or omission by the Client, including a breach of statute or
breach of duty by the Client;
	 
	 	(e)	 	fair wear and tear;
	 
	 	(f)	 	the Client maintaining or operating the Plant or any equipment outside the
manufacturers’ or vendors’ recommendations, warranty provisions or operating manual
procedures or outside the design criteria or the operating procedures established by
the Consultant in consultation with the Client for the plant and equipment;
	 
	 	(g)	 	any material modifications made to the Plant or equipment by the Client
without the Consultant’s consent, other than for environmental, safety or health
reasons; and
	 
	 	(h)	 	any work or services the same as or similar to the Services or concerning the
same subject matter as the Services which were performed by the Client or on behalf of
the Client by persons other than the Consultant that were not required to be
supervised by the Consultant.

	 	 	“Defects Notification Period” means the period of 52 weeks from the end of the Term or 52
weeks from the Date of Practical Completion of the Project, whichever is the earliest.
	 
	 	 	“Defective Rectification Work” has the meaning given to that term in Clause 60.1.
	 
	 	 	“Design” means any design work (including engineering and drafting work) undertaken by the
Consultant in the performance of the Services.

Page 16 of 85

 

	 	 	“Disbursements” means only those direct expenses and costs incurred with respect to the
Project, paid or payable in cash, and of the type normally charged by the Consultant as a
disbursement on other projects similar to the Project, including:

	 	(a)	 	reasonable living expenses of the Consultant’s Personnel in Ghana;
	 
	 	(b)	 	Project related vehicle rental and insurance expenses;
	 
	 	(c)	 	Project related travel for the Consultant’s Personnel;
	 
	 	(d)	 	expenses of insurances purchased specifically for the Project as directed by
the Client hereunder;
	 
	 	(e)	 	mobilisation and de-mobilisation medical expenses for the Consultant’s
Personnel going to Site;
	 
	 	(f)	 	Project related meals involving the Client or any Project Contractor, if
approved in advance by the Client;
	 
	 	(g)	 	international telephone costs, courier, shipping charges, special postage;
	 
	 	(h)	 	where not supplied by the Client, Site office costs, including stationery,
photocopies, office consumables, network and e-mail facilities, communications,
medical first aid kits and medical consumables; and
	 
	 	(i)	 	where not supplied by Client, Site office furniture and equipment, subject to
Clause 6;
	 
	 	(j)	 	Johannesburg office support, including stationery, photocopies, office
consumables, network and e-mail facilities;

	 	 	but excluding:

	 	(k)	 	costs pertaining to Project Contractors or other contractors, which shall be
direct costs of the Client;
	 
	 	(l)	 	personal protective equipment;
	 
	 	(m)	 	accommodation on Site, unless accommodation is not made available by the
Client;
	 
	 	(n)	 	expenses for equipment, machinery, tools and other assets that the Client
would reasonably expect consultants to have on hand and part of its tools of trade
(but excluding those assets purchased with particular specification for the purpose of
the Project, which shall be Client property pursuant to Clause 6);
	 
	 	(o)	 	materials that are purchased for use in South Africa without specific
reference to any particular project, such as paper, pens and other supplies.

Page 17 of 85

 

	 	 	“Documentation” includes software (including source code and object code versions) manuals,
diagrams, graphs, charts, projections, specifications, estimates, records, concepts,
documents, accounts, plans, formulae, designs, methods, techniques, processes, supplier
lists, price lists, customer lists, market research information, correspondence, letters
and papers of every description including all copies of or extracts from the same.
	 
	 	 	“Dry Commissioning” means those checks and tests to be performed up to Practical Completion
in accordance with Appendix A.
	 
	 	 	“Execution Date” means 06 April 2006.
	 
	 	 	“Existing Plant” means the existing plant, equipment and infrastructure on Site as of the
Date of Commencement.
	 
	 	 	“Final Completion” means (as the case may be) that stage in the execution of the Services
where:

	 	(a)	 	the Defects Notification Period has expired and the Consultant has made good
all Defective EPCM Services that have been advised by the Client to the Consultant
prior to the expiry of the Defects Notification Period; or
	 
	 	(b)	 	the Further Defects Liability Period has expired and the Consultant has made
good all Defective Rectification Work prior to the expiry of the Further Defects
Liability Period.

	 	 	“Financing Entity” means any financial institution or other person providing any debt or
equity financing for the Client in respect of the Project, including by provision of a
letter or letters of credit or other guarantees or insurance in support of those things and
including the holders of, and the agent or trustee representing the holders of, such
instruments.
	 
	 	 	“Force Majeure Event” is any event or circumstance (or combination of events and
circumstances) which occurs in Ghana and:

	 	(a)	 	is beyond the control of the party affected by that event or circumstance or
both;
	 
	 	(b)	 	causes delay in, or prevention of, the performance by the affected party of
any of its obligations under the Agreement; and
	 
	 	(c)	 	cannot be prevented, overcome or remedied by the exercise by the affected
party of a standard of care and diligence consistent with that of a prudent and
competent mining company (in the case of the Client) or construction manager (in the
case of the Consultant),

	 	 	including, without limiting the foregoing, a strike or industrial dispute which affects the
performance of the Works under the Agreement and wet or otherwise inclement weather that
makes the conduct of the Works under the Agreement unsafe or impractical.
	 
	 	 	“Further Defects Liability Period” means 52 weeks.

Page 18 of 85

 

	 	 	“Gold Fields” means Gold Fields of South Africa or its subsidiaries regarding the provision
of technology relating to the BIOX® process.
	 
	 	 	“Government” means, in respect of each place in which the Services are rendered, any
federal, state, provincial, regional or local government and all government,
semi-government, local and other agencies, authorities, departments or instrumentalities of
any of them or corporations established by statute.
	 
	 	 	“Independent Engineer” means Merit Engineers Pty Ltd (ACN 087 781 262), a company
incorporated in Australia.
	 
	 	 	“Intellectual Property Rights” means all industrial and intellectual property rights,
whether registered or unregistered, including, but not limited to, inventions, discoveries,
innovations, technical information, technical data, prototypes, manufacturing processes,
improvements, patent rights, circuitry, drawings, plans, specifications, trade mark rights,
trade names, design rights, copyright (including moral rights), and other monopoly rights,
samples and know-how.
	 
	 	 	“Interconnection Procedures” means the procedures for interconnecting the Existing Plant
with the Oxide Plant and the Sulphide Plant, as determined pursuant to Clause 46.5(b).
	 
	 	 	“Key Personnel” means those personnel identified in Appendix F.
	 
	 	 	“Law” means any legally binding law, legislation, statute, act, rule, order or regulation
which is enacted, issued or promulgated by any Government.
	 
	 	 	“Legislative Requirement” means a requirement imposed by Law and includes, without
limitation:

	 	(a)	 	a requirement to obtain an approval (other than a Client Approval), either
expressly, or by implication through the imposition of a criminal offence for a
failure to do so;
	 
	 	(b)	 	a requirement to give a notice to any Government, or to report something to
any Government;
	 
	 	(c)	 	a requirement to pay a fee, charge or penalty imposed by legislation; and
	 
	 	(d)	 	a requirement to do, not to do, or comply with a matter or thing, either
expressly, or by implication through the imposition of a criminal offence for a
failure to do so.

	 	 	“Material Project Contractor” means those contractors listed in Appendix G.
	 
	 	 	“Ore Commissioning” means those checks and tests (with the use of process materials) to be
performed by the Client after Practical Completion in accordance with Appendix A.

Page 19 of 85

 

	 	 	“Oxide Plant” means those areas in Appendix D numbered 00, 01, 04, 05, 06, 19 (to the
extent required to operate the Oxide Plant) and 22 (to the extent required to operate the
Obotan Mill as an oxide mill).
	 
	 	 	“Payment Claim” has the meaning given to that term in Clause 62.3.
	 
	 	 	“Personnel” includes a person’s officers, directors, employees, contract employees, agents,
sub-contractors and invitees.
	 
	 	 	“Plant” means the Oxide Plant and the Sulphide Plant or either one of them, as the context
may suggest, to be constructed as part of the Project, as further described in the Scope of
Works.
	 
	 	 	“Practical Completion” means that stage in the execution of the Services where the Oxide
Plant or Sulphide Plant, as the case may be, has been engineered, procured and constructed
and is ready to accept the safe introduction of ore, except for minor omissions, minor
defects and outstanding Services that do not prevent the safe introduction of water or ore,
as listed in the punch list agreed between the Client and the Consultant pursuant to Clause
59.1(b), provided that:

	 	(a)	 	if ore is introduced to any Separable Portion or other part of the Plant at
the instruction of the Client, then that Separable Portion or part is deemed to have
achieved Practical Completion for purposes of computing the Defects Notification
Period;
	 
	 	(b)	 	non-critical secondary equipment and structures (such as administration
buildings and the like) need not be complete to achieve Practical Completion; and
	 
	 	(c)	 	if Practical Completion in respect of the whole or any Separable Portion or
other part of the Plant would be achieved but for failure of the Client to meet its
obligations pursuant to the Agreement or the failure of any third party (provided such
failure was not the result of Defective EPCM Services), then Practical Completion will
be deemed to have been achieved for the purposes of computing the Defects Notification
Period.

	 	 	“Pre-commissioning” means those pre-operational checks and tests (without the use of
process materials) to be performed by the Consultant in accordance with Appendix A.
	 
	 	 	“Privacy Law” means any Law that relates to the protection of personal or other information
pertaining to Personnel.
	 
	 	 	“Project” means the Bogoso Sulphide Expansion Project, situated approximately 10km south of
the town of Bogoso in the Western Region of Ghana, as described in the Scope of Works in
respect of which the Client has engaged the Consultant to provide the Services.
	 
	 	 	“Project Budget” means the Project budget in Appendix I.

Page 20 of 85

 

	 	 	“Project Contract” means a contract entered into with a Project Contractor for purposes of
the Project.
	 
	 	 	“Project Contractor” means any consultants, contractors, vendors and suppliers engaged by
the Client at the recommendation of the Consultant to carry out any part of the Project and
includes any Material Project Contractor.
	 
	 	 	“Project Control Group” has the meaning given to that term in Clause 50.7.
	 
	 	 	“Project Management Plan” means the Project management plan to be prepared by the
Consultant in accordance with Clause 50.8.
	 
	 	 	“Project Material” means all Documentation which is:

	 	(a)	 	prepared, or required to be prepared, by or on behalf of the Consultant under
the Agreement;
	 
	 	(b)	 	delivered, or required to be delivered, by or on behalf of the Consultant to
the Client under the Agreement; or
	 
	 	(c)	 	incorporated into any Documentation described in (a) or (b) above.

	 	 	“Project Schedule” means the schedule of various dates as required to be updated hereunder
and the first of which is set out in Appendix J.
	 
	 	 	“Protected Right” means any patent, right, registered design, trademark or name, copyright
or any other lawfully protected right of any person.
	 
	 	 	“Quality Assurance Program” means the program specified in Clause 46.7.
	 
	 	 	“Rectification Work” has the meaning given to that term in Clause 60.1.
	 
	 	 	“Scope of Services” means the scope of services specified in Appendix A, as amended or
varied in accordance with the Agreement.
	 
	 	 	“Scope of Works” means the scope of works specified in Appendix D, as amended or varied in
accordance with the Agreement.
	 
	 	 	“Separable Portion” means any one of the discrete components of the Plant described in the
Scope of Works or agreed pursuant to Clause 56.1.
	 
	 	 	“Services” means the services which the Consultant is required to perform under the
Agreement and as further described in the Scope of Services.
	 
	 	 	“Services Costs” has the meaning given to that term in Clause 62.1.
	 
	 	 	“Services Variation” means any variation in the Services under Clause 55.
	 
	 	 	“Site” means the location at which the Project is to be constructed, as described in the
Scope of Works.

Page 21 of 85

 

	 	 	“Sulphide Plant” means those areas in Appendix D numbered 10, 11, 12, 13, 14, 15, 16, 17,
18, 19 (to the extent that this area does not form part of the Oxide Plant), 21, 22 (to the
extent that this area does not form part of the Oxide Plant) and 23.
	 
	 	 	“Taxes” means any taxes, charges, levies, assessments or other similar costs of any kind,
excluding income, profit, revenue, royalty and other taxes payable in respect of operations
(which taxes shall for the purposes of the Agreement be “Excluded Taxes”), but including
goods and services taxes, value added taxes, withholding taxes, stamp duties and customs
duties.
	 
	 	 	“Term” means the period commencing with the Date of Commencement and ending on the Date of
Final Completion or, if the Agreement is terminated prior to the Project reaching Final
Completion, on the date of such termination.
	 
	 	 	“Total Cost Forecast” means the sum of the Project Budget set out in Appendix I and the
indicative Services Costs set out in Part C of Appendix C.
	 
	 	 	“Works” means the works to be constructed and the temporary works to be carried out in
executing the Project as described in the Scope of Works.
	 
	 	 	“Works Variation” means any change described in the Scope of Works pursuant to Clause 54.

45.2 Interpretation (replacing Clause 2)

	 	 	In the Agreement, unless contrary intention appears:

	 	(a)	 	a reference to:

	 	(i)	 	clauses, schedules and appendices are references to clauses
of and schedules and appendices to the Agreement;
	 
	 	(ii)	 	a person includes a natural person, firm, joint venture
partnership, unincorporated association, corporation and government or
statutory body or authority or other body corporate;
	 
	 	(iii)	 	a party includes the party’s successors and permitted
assigns;
	 
	 	(iv)	 	a document or agreement, including the Agreement, includes a
reference to that document or agreement as novated, altered, supplemented or
replaced from time to time;
	 
	 	(v)	 	writing includes a reference to printing, typing and each
other method of producing words in a visible form;
	 
	 	(vi)	 	any legislation or legislative provision includes any
statutory modification or re-enactment of, or legislative provision
substituted for, and any subordinate legislation issued under that legislation
or legislative provision;

Page 22 of 85

 

	 	(vii)	 	a month or year means calendar month or calendar year
whether or not beginning on the first day of any month or year;
	 
	 	(viii)	 	“U$”, “USD”, “USD$”, “$US”, “dollar” or “$” is a reference to United States
currency;
	 
	 	(ix)	 	“R”, “ZAR” and “Rand” is a reference to South African
currency;
	 
	 	(x)	 	a specific time for the performance of an obligation is a
reference to that time in the country, state, or territory or other place
where that obligation is to be performed; and
	 
	 	(xi)	 	a thing (including a right or obligation) includes a part of
that thing;

	 	(b)	 	headings are for ease of reference only and do not affect the meaning of the
Agreement;
	 
	 	(c)	 	the singular includes the plural and vice versa and words importing a gender
include other genders;
	 
	 	(d)	 	the expression “including” is not a word of limitation;
	 
	 	(e)	 	other grammatical forms of defined words or expressions have corresponding
meanings;
	 
	 	(f)	 	if the date on or by which any act must or may be done under the Agreement is
not a Business Day, the act must or may be done on or by the next Business Day;
	 
	 	(g)	 	where time is to be calculated by reference to a day or event, that day or
the day of that event is excluded;
	 
	 	(h)	 	no provision of the Agreement will be construed adversely to a party solely
on the ground that the party was responsible for the preparation of the Agreement or
provision;
	 
	 	(i)	 	except where otherwise provided, measurements and quantities shall be in
metric units; and
	 
	 	(j)	 	the words “clause 27.1(ii)” and “clause 5(i)” for purposes of Clause 40(i)
shall be read as meaning “Clause 61” and “Clause 46.2,” respectively, while the words
“anything of value” shall be read as meaning anything of material value and shall
specifically exclude meals, entertainment and promotional items valued at less than
US$200.00.

45.3 Ambiguous and Inconsistent Terms

	 	(a)	 	Subject to Clause 3 of the Formal Instrument of Agreement, if the Client’s
Representative reasonably considers, or the Consultant notifies the Client’s
Representative in writing, that there is a conflict, ambiguity, inconsistency or

Page 23 of 85

 

	 	 	 	discrepancy in or between any of the terms of the Agreement, the Independent
Engineer shall direct the interpretation which the parties shall follow. Any
interpretation of the Independent Engineer made under this clause 45.3(a) shall,
except in the case of obvious error or fraud, be final and binding on the parties.
	 
	 	(b)	 	The Independent Engineer, in giving a direction in accordance with Clause
45.3(a), is not required to determine whether or not there is an ambiguity or
inconsistency.
	 
	 	(c)	 	The Consultant shall bear the costs of compliance with a direction under
clause 45.3(a) unless the ambiguity or inconsistency could not have been reasonably
identified by a competent person experienced in projects of a similar character, size
and complexity to the Project. If a direction is given in respect of an ambiguity or
inconsistency that could not have been reasonably identified by a competent person
experienced in projects of a similar character, size and complexity to the Project and
the direction requires the Consultant to perform any additional Services, the
direction will be deemed to be a Services Variation for the purposes of Clause 55.

45.4 Matters of Clarification (General)

	 	(a)	 	Where in the Scope of Services:

	 	(i)	 	an obligation or action is prescribed or required to be
taken, the Consultant shall fulfil that obligation or take that action, unless
it is expressly stated that the Client must take that action;
	 
	 	(ii)	 	a precondition is prescribed in relation to any right or
benefit that the Consultant might become entitled to enjoy, then the
Consultant will only be entitled to the right or benefit if the precondition
is satisfied; or
	 
	 	(iii)	 	a right or benefit is given to the Client, the Client may
enjoy that right or benefit even though the right or benefit is not prescribed
by the General Conditions or the Particular Conditions.

	 	(b)	 	Except where expressly provided to the contrary in the Agreement, no
approval, consent, review, consultation, monitoring, audit or comment made, undertaken
or given by or on behalf of the Client shall lessen or otherwise affect the
Consultant’s obligations under the Agreement or constitute a Services Variation or
Works Variation.

45.5 Best Endeavours

	 	(a)	 	Subject to Clause 45.5(b), where the Agreement requires that the Consultant
use “best endeavours” in the performance of any its obligations under the Agreement,
the Consultant shall, in the performance of the applicable obligation adopt, use or
apply the work practices and methodologies that reflect prudent practicable standards
as would be employed by reputable international professional engineering, procurement
and construction management contractors that are then in current use.

Page 24 of 85

 

	 	(b)	 	Unless the context otherwise requires in the Agreement, the term “best
endeavours” shall only bear the meaning given to that term in Clause 45.5(a).

	46.	 	Appointment, Obligations, Warranties, and Covenants of the Consultant (replacing Clauses
3, 4 and 5(i), 5(ii)(a) and 5(ii)(b))

46.1 Appointment of Consultant

	 	 	The Client appoints the Consultant as an independent contractor of the Client to render the
Services in accordance with the Agreement, which appointment is hereby accepted by
Consultant.

46.2 Standard of Care

	 	(a)	 	The Consultant shall perform the Services with the professional skill, care
and diligence that would be expected of an international professional engineering,
procurement and construction management contractor experienced in projects of a
similar nature to the Project and in the performance of services the same as or
similar to the Services.
	 
	 	(b)	 	The Consultant must ensure that any subcontractor appointed by it to perform
part of the Services performs that part of the Services with the professional skill,
care and diligence expected of a professional consultant experienced in projects of a
similar nature to the Project and in the performance of services of similar nature to
the part of the Services subcontracted to that subcontractor.

46.3 Warranties and Covenants

     The Consultant warrants and covenants to the Client that:

	 	(a)	 	it and its Personnel have the particular skill, experience and ability
necessary to perform the Services and will continue to have them during the Term;
	 
	 	(b)	 	it has examined:

	 	(i)	 	the Scope of Services and the Scope of Work;
	 
	 	(ii)	 	local conditions at the Site and all applicable Laws;
	 
	 	(iii)	 	the Project Schedule; and
	 
	 	(iv)	 	all other information or documents relating to the Project
provided to the Consultant,

	 	 	 	and is satisfied with the sufficiency thereof for the purpose of complying with its
obligations under the Agreement (without the Consultant giving or making any
warranty or representation as to the adequacy of the BIOX® process or the material
characteristics provided by the Client to the Consultant);

Page 25 of 85

 

	 	(c)	 	it is duly incorporated and validly existing under the law of its place of
incorporation and it has full legal capacity and power:

	 	(i)	 	to own its property and assets and to carry on its business;
and
	 
	 	(ii)	 	to enter into the Agreement and to perform its obligations
under the Agreement;
	 
	 	 	 	and it has taken all corporate action that is necessary to authorise its
entry into the Agreement and to perform its obligations under the
Agreement;

	 	(d)	 	there is, in the reasonable opinion of the Consultant, no litigation,
arbitration, mediation, conciliation or administrative proceedings taking place,
pending or threatened against it which (if adversely decided) could have a material
adverse effect on the Consultant’s or the Guarantor’s business, assets or financial
condition or its or the Guarantor’s ability to perform its obligations under the
Agreement;
	 
	 	(e)	 	it has not impugned the reputation of the Client to date, nor will it during
the Term or at any time thereafter, nor will it knowingly do or permit anything which
might damage the name or reputation of the Client or reasonably invite adverse public
criticism or result in the Client being the subject of any official investigation; and
	 
	 	(f)	 	as of the Execution Date, it has no conflict of interest in performing the
Services for the Client and it will ensure that none exist during the Term.

	 	 	The Consultant acknowledges that the Client has executed the Agreement in reliance on the
warranties contained in this Clause 46.3. The warranties contained in this Clause 46.3 will
be treated as if made continuously by the Consultant during the Term.

46.4 Delivery of Services

	 	(a)	 	The Consultant shall:

	 	(i)	 	promptly perform the Services in accordance with the
requirements of the Agreement;
	 
	 	(ii)	 	at all times use its best endeavours to ensure that the
Project:

	 	(A)	 	proceeds at a rate of progress such that each
event stated in the Project Schedule will be completed in accordance
with the corresponding completion or milestone date; and
	 
	 	(B)	 	is completed within the Total Cost Forecast;

	 	(iii)	 	recommend and seek the Client’s approval to undertake all
studies, reviews, investigations and other processes necessary to enable it to
perform the Services as efficiently and cost-effectively as practicable; and

Page 26 of 85

 

	 	(iv)	 	regularly consult with the Client’s Representative throughout
the performance of the Services (including requesting instructions from the
Client’s Representative and seeking comments on, or review or approval, of any
documentation).

	 	(b)	 	Subject to Clause 49.2 and 50.2, the Consultant may enter into subcontracts
for the vicarious performance of its obligations under the Agreement, but the
Consultant shall not subcontract the whole of the Services. The Consultant shall
obtain the written approval (which shall not be unreasonably withheld) of the Client’s
Representative before appointing a subcontractor to perform any part of its
obligations under the Agreement. The Consultant shall manage the performance of each
subcontractor to ensure the quality and timeliness of its performance meet the
requirements of the Agreement. The Consultant’s obligations under the Agreement are
not lessened or otherwise affected by subcontracting the performance of those
obligations.
	 
	 	(c)	 	Where the Client has a right to and terminates the Agreement, upon the
request of the Client, the Consultant shall:

	 	(i)	 	assign the benefit of any subcontracts referred to in Clause
46.4(b); or
	 
	 	(ii)	 	if the benefit of any subcontract cannot be assigned, hold
the subcontract, guarantee or warranty in trust for the Client or the Client’s
nominee (as the case may be).

	 	(d)	 	Despite Clause 46.4(b), the Consultant is solely responsible for the
performance of the Services. Except to the extent specified in this Clause 46.4(d),
this obligation is not affected by any approval or decision given by the Client or any
Authority. Where the Client’s Representative gives the Consultant a direction which is
not consistent with or would be contrary to the standard of care described in Clause
46.2, the Consultant will be excused from all liability in respect of following such
instruction if at any time within three (3) Business Days from the date the
instruction is given, the Consultant gives the Client’s Representative notice of the
inconsistency and sets out in that notice a non-exhaustive summary of expected adverse
consequences on the Project of complying with such instruction. Nothing in the
preceding sentence will prejudice the Client’s rights under the Agreement to dispute
any notice given by the Consultant under this Clause 46.4(d).
	 
	 	(e)	 	The Consultant acknowledges that, other than as expressly provided elsewhere
in the Agreement, it is the Consultant’s responsibility to make all enquiries, obtain
all information and make all judgements that are relevant to and necessary for the
performance of the Services. The Consultant shall not delay the progress of the
Services or any part of the Services by reason of the Consultant awaiting information
from the Client or the Client’s Representative:

	 	(i)	 	unless the Agreement expressly provides otherwise;

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	 	(ii)	 	unless the Client’s Representative otherwise directs the Consultant; or
	 
	 	(iii)	 	except to the extent that the Consultant cannot reasonably
proceed with the Services without the information.

46.5 Design Obligations

	 	(a)	 	The Consultant shall:

	 	(i)	 	develop and complete the Design, in accordance with the
requirements of the Agreement, including preparing all necessary documents,
information, drawings and plans sufficient for the procurement, installation,
construction, commissioning and completion of the Project;
	 
	 	(ii)	 	ensure to the maximum extent reasonably possible that the
Design:

	 	(A)	 	meets the Client’s requirements for the
Project as set out in the Scope of Services or the Scope of Works;
	 
	 	(B)	 	is free from defects in design and accurate
and complete in all respects;
	 
	 	(C)	 	will minimize the repair and maintenance
costs of the Project and will maximize the life of the Project;
	 
	 	(D)	 	will comply with all applicable Laws;
	 
	 	(E)	 	will enable approvals, certificates and
permits to be quickly and easily obtained from any Authority; and
	 
	 	(F)	 	is otherwise suitable in all respects for the
intended purposes of the Project as specified in the Scope of Services
or Scope of Work so that, when constructed, the Project will be fit
for its intended purpose as specified in the Scope of Services or
Scope of Work; and

	 	(iii)	 	allow a maximum of 10 days for review by the Client’s
Representative of all Design Documentation, prior to the issue of such
documentation to subcontractors or Project Contractors. In the event that the
Client’s Representative has not completed his review within 10 days, the
Consultant may proceed to issue such documentation to subcontractors or
Project Contractors.

	 	(b)	 	The Consultant shall (if applicable), on or about 31 March 2006, submit to
the Client’s Representative for approval Interconnection Procedures for connecting the
Oxide Plant and the Sulphide Plant to the existing infrastructure on Site which shall:

	 	(i)	 	meet the requirements of the Scope of Services;

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	 	(ii)	 	be in a format approved by the Client’s Representative (which
approval shall not be unreasonably withheld).

	 	(c)	 	Neither the Client nor the Client’s Representative undertakes any
responsibility or duty of care to the Consultant to review any Design Documentation
for errors, omissions or compliance with the Agreement. No review of, comments upon,
rejection of, or failure to review or comment upon or reject, any such documentation
will:

	 	(i)	 	relieve the Consultant from, or alter or affect, the
Consultant’s liabilities or responsibilities whether arising out of or in
connection with the Agreement or otherwise according to Law; or
	 
	 	(ii)	 	prejudice the Client’s rights against the Consultant whether
arising out of or in connection with the Agreement or otherwise according to
Law.

	 	(d)	 	The Consultant acknowledges that the Client has not given any warranty or
guarantee or made any representation about the adequacy or suitability of the Scope of
Services or the Scope of Works or the level of completeness of the design of the
Project in the Scope of Services or the Scope of Works.

46.6 Management of Project Contractors

	 	(a)	 	In performing the Services, the Consultant shall manage all Project
Contractors and exercise all powers, duties and discretion conferred upon the Client,
as representative for Client, in a manner that is consistent with the Client’s
contractual obligations and in the Client’s best interests.
	 
	 	(b)	 	The Consultant shall:

	 	(i)	 	identify the scope of each Project Contract and the sequence
of all Project Contracts (in consultation with the Client’s Representative)
and make recommendations to the Client’s Representative regarding the:

	 	(A)	 	pre-purchase of long-lead time items of
machinery, materials and supplies;
	 
	 	(B)	 	availability of materials and labour; and
	 
	 	(C)	 	the tender list for each Project Contract;

	 	(ii)	 	prepare the tender documentation (including finalising the
specifications and drawings) for each Project Contract (using the
Project-developed conditions of tender and contract prepared by the Client)
and ensure that they comply with the Client’s requirements (including, in
particular, those set out (if any) in the Scope of Works);
	 
	 	(iii)	 	submit draft tender documentation to the Client’s
Representative for review in a manner and at a rate which will give the
Client’s

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	 	 	 	Representative a reasonable opportunity (but in any event no more than ten
(10) days) to review that tender documentation before it is issued to
tenderers and, if any tender documentation is rejected by the Client’s
Representative within such period, submit amended tender documentation to
the Client’s Representative, in which case the time period in this Clause
46.6(b)(iii) will reapply;

	 	(iv)	 	finalise each tender list in consultation with the Client’s
Representative in accordance with the relevant procedure in the Project
Management Plan so that it only includes tenderers approved by the Client’s
Representative;
	 
	 	(v)	 	prepare sufficient copies of the finalised tender
documentation for each Project Contract for tendering; and
	 
	 	(vi)	 	issue the tender documentation in accordance with this Clause
46.6(b) to all approved tenderers.

	 	(c)	 	The Consultant shall:

	 	(i)	 	keep the Client’s Representative informed of any pre-tender
meetings;
	 
	 	(ii)	 	provide to the Client’s Representative copies of all
correspondence from and to tenderers for the Project Contracts; and
	 
	 	(iii)	 	have a representative in attendance at the opening of all
tenders for the Project Contracts.

	 	(d)	 	The Consultant shall:

	 	(i)	 	analyse all tenders submitted by tenderers for the Project
Contracts;
	 
	 	(ii)	 	prepare a report recommending to the Client the most suitable
tenderer for each Project Contract;
	 
	 	(iii)	 	recommend, if necessary, that negotiations be entered into
with any preferred tenderer; and
	 
	 	(iv)	 	provide to the Client for its consideration the actual tender
prices for all Project Contracts and how they compare with the cost estimates
(if any) for the Project Contracts in the Total Cost Forecast or in any other
budget or program prepared by the Consultant containing cost estimates of the
Project Contractors.

	 	(e)	 	The Consultant covenants to the Client that neither the Consultant (nor any
affiliated bodies corporate, as defined by the applicable Law in South Africa and
Ghana, of the Consultant) will tender for any of the Project Contracts unless the
Consultant has obtained the prior written approval of the Client.

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	 	(f)	 	The Consultant shall provide all superintendence, co-ordination and
construction management with respect to Project Contractors, including:

	 	(i)	 	administering and making recommendations to the Client in
relation to all changes, extensions of time and all other matters pertaining
to Project Contracts;
	 
	 	(ii)	 	providing all relevant information to the Client’s
Representative, as and when required, and in any event in sufficient time to
enable the Client to carry out its contract administration functions (if any)
under the various Project Contracts;
	 
	 	(iii)	 	monitoring the performance of the Project Contractors under
the Project Contracts with the aim of rectifying all faults, omissions or
other defects prior to the date of practical completion or during the defect
liability periods (as the case may be) in the respective Project Contracts;
and
	 
	 	(iv)	 	if requested by the Client, acting as the Client’s
Representative in relation to the Project Contracts;

with the objective of facilitating each Project Contract being:

	 	(v)	 	completed by the completion date for it in the Project
Schedule; and
	 
	 	(vi)	 	within its planned cost (if any, as stated in the Total Cost
Forecast or in any other budget or program prepared by the Consultant
containing cost estimates of the Project Contracts).

	 	(g)	 	The Consultant shall procure all Works and services in accordance with the
Client’s internal process for obtaining financial authority to place orders and
contracts. Requisitions for the placing of orders for supply or installation of
equipment shall include the terms and conditions of the Project Contracts, the
purchase order letter (if any) and any other documentation advised by the Client’s
Representative.
	 
	 	(h)	 	In the event that a party to a Project Contract invokes any dispute
resolution provisions or notifies the Consultant of an intention to commence any
dispute resolution proceedings, the Consultant shall immediately notify the Client. In
the event of any such notification to the Client the Consultant shall advise the
Client of the facts and circumstances of the dispute known to the Consultant and
endeavour as far as reasonably possible to participate in and achieve on behalf of the
Client a prompt settlement or other resolution of the dispute subject to the
directions of the Client.

46.7 Labour, Environmental, Indigenous, OHS and Quality Assurance Plans

	 	(a)	 	The Consultant shall:

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	 	(i)	 	subsequent to the Date of Commencement, establish (in
consultation with the Client’s Representative) the Quality Assurance Plan for
the performance of the Services and such plan shall be:

	 	(A)	 	appropriate to the materials, fabrication,
components, construction and Site maintenance activities; and
	 
	 	(B)	 	comply with ISO 9000 (2000) or any amended or
substituted requirements which the Client’s Representative may, acting
reasonably, direct in writing;

	 	(ii)	 	give the Client’s Representative access to the Consultant’s
and each subcontractor’s quality systems to enable monitoring and quality
auditing; and
	 
	 	(iii)	 	comply, and ensure its subcontractors comply, with the
Quality Assurance Plan.

	 	(b)	 	The Consultant shall, if directed by the Client’s Representative, prepare and
submit to the Client’s Representative for approval an occupational health and safety
plan and, if approved, comply, and ensure that its subcontractors comply, with any
such plan.
	 
	 	(c)	 	The Consultant shall, upon instruction by the Client, comply and shall ensure
that its subcontractors comply with any documented policy and procedures on health and
safety, environmental matters, community matters and industrial relations matters that
are in use by the Client at the Site.

46.8 Local Content

	 	(a)	 	The Consultant shall, in the performance of its obligations under the
Agreement, as far as it is reasonable and economically practicable:

	 	(i)	 	use labour available within the Bogoso/Prestea catchment
area;
	 
	 	(ii)	 	engage professional services available in the Bogoso/Prestea
catchment area; and
	 
	 	(iii)	 	give manufacturers, suppliers and subcontractors available
in the Bogoso / Prestea catchment area:

	 	(A)	 	a fair and reasonable opportunity to tender
or quote for subcontracts for works, materials, plant, equipment and
supplies; and
	 
	 	(B)	 	proper consideration and, where possible,
preference to those manufacturers, suppliers and subcontractors.

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	 	(b)	 	If the Consultant is not able to use labour, professional services,
manufacturers, suppliers or subcontractors available in the Bogoso / Prestea catchment
area, the Consultant shall give consideration to and, where possible, preference to
labour, professional services, manufacturers, suppliers and subcontractors within
Ghana.
	 
	 	(c)	 	Unless the Client agrees otherwise, the Consultant shall use its best
endeavours to ensure that in every subcontract it enters into for labour, professional
services, workers, materials, plant, equipment or supplies for the performance of the
Services, the other party covenants to be bound by the terms of this Clause 46.8 in
the same way as the Consultant and that it will report to the Consultant on its
implementation of Clause 46.8(a) and Clause 46.8(b).
	 
	 	(d)	 	The requirements of this Clause 46.8 do not affect or limit the Consultant’s
obligations under the Agreement.

46.9 Monthly Reporting

The Consultant shall, by the fourth working day of each month, give a written report (in a
form approved by the Client’s Representative) to the Client’s Representative setting out:

	 	(a)	 	if applicable, details of the progress of tendering for the vendor packages
and the construction packages;
	 
	 	(b)	 	the progress of the Project against the Project Schedule and the effect on
the Project Schedule of any change to the Project, including a curve showing
cumulative actual and forecasted cashflow (including costs for any changes to Project)
against time;
	 
	 	(c)	 	details of any activities which are behind the progress anticipated in the
Project Schedule, any foreseen delays to future activities on the Project Schedule and
the likely effect on the Project Schedule of any actual or foreseen delay;
	 
	 	(d)	 	current claims for changes, variations and extensions of time by Project
Contractors in relation to the Works or Project, including details of dates submitted,
dates approved and any other details the Client’s Representative requires;
	 
	 	(e)	 	the status of all activities on which work is being undertaken;
	 
	 	(f)	 	industrial relations issues affecting (or which may affect) the performance
of the Project;
	 
	 	(g)	 	strategies implemented or proposed to overcome problems, including corrective
action statements for catching up lost time or avoiding potential delays;
	 
	 	(h)	 	a statement of progress claims made under Project Contracts during the period
of the statement containing full and true particulars of all such claims;

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	 	(i)	 	the total amount of costs payable to Project Contractors under their
contracts awarded to date; and
	 
	 	(j)	 	any other matter reasonably required by the Client’s Representative.

46.10 Records Open for Inspection and Audit

	 	(a)	 	The Consultant shall keep and maintain:

	 	(i)	 	the records identified in the Project Management Plan; and
	 
	 	(ii)	 	all other Project Material relating to the Project, at the
Consultant’s address as set out in the Agreement under Clause 41.

	 	(b)	 	The Consultant must ensure that all Project Material relating to the Project,
and the quality system and the records and Project Material referred to in Clause
46.10(a) are available to the Client (or persons nominated by the Client) at all
reasonable times for examination, audit, inspection, transcription and (in respect of
records only) copying.
	 
	 	(c)	 	If the Agreement is terminated, the Consultant shall give the Client any
records and Project Material referred to in Clause 46.10(a) which are necessary for
the orderly continuance of the Project by another person.

47. Obligations of the Client

47.1 Failure to fulfil Obligations (replacing Clauses 7 and 8)

In no event shall the Client or the Client’s Representative be considered to have delayed
the Project or a Separable Portion where — with respect to -:

	 	(a)	 	the Client Approvals, such approvals have been obtained within ten Business
Days of a request from the Consultant to obtain same;
	 
	 	(b)	 	the execution of Project Contracts with Project Contractors, such contracts
have been prepared and presented to the Consultant for execution by the Project
Contractors within ten Business Days of a request from the Consultant to prepare same
(or, where prepared by a Project Contractor, approved by the Client with or without
reasonable modifications within 7 Business Days of a request from the Consultant to do
so), provided such request is made following a recommendation of the Consultant
supported by appropriate information; and
	 
	 	(c)	 	any approval or information requested by the Consultant, the approval or
information is provided within ten Business Days of a request being made by the
Consultant (provided any such request is supported by appropriate information).

Where the Consultant considers that circumstances require a response before the expiry of
such time periods, that opinion shall be indicated in the request to the Client with

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appropriate reasons therefore. In such event, the Client shall respond within a shorter
time period, provided such opinion is reasonably founded.

47.2 Responsibilities (amending Clause 9)

	 	(a)	 	In addition to the obligations stated in Clause 9, the Client will obtain the
Client Approvals.
	 
	 	(b)	 	Clause 9 is amended by deleting “shall do all in his power” and substituting
“shall use reasonable efforts, where requested by the Consultant.”
	 
	 	(c)	 	If the Consultant requests the Client to approve or decide any matter or
thing in connection with the performance of the Services by the Consultant, the Client
shall within a reasonable period of time after the request, notify the Consultant of
its approval or decision (as the case may be).

For the avoidance of doubt in this Clause 47.2(c):

	 	(i)	 	a reasonable period of time shall be determined in the
context of the matter or thing in respect of which the Client’s approval or
decision is sought;
	 
	 	(ii)	 	an approval or decision includes a refusal to approve or
decide (as the case may be).

47.3 Client provided Personnel, Equipment, Facilities and Services

	 	(a)	 	Subject to Clause 47.3(b), the Client shall provide the Personnel, equipment,
facilities and services described in Appendix B for use by the Consultant in
performing the Services.
	 
	 	(b)	 	Where Appendix B states that the Consultant must pay for the use of specific
equipment, facilities or services, the Consultant shall do so.
	 
	 	(c)	 	The Consultant shall comply with the Client’s Representative’s directions
when using the equipment, facilities and services referred to in Clause 47.3(a).

48. Site

48.1 Access

The Consultant shall have non-exclusive continuous access to the Site sufficient to enable
it to carry out its obligations under the Agreement.

48.2 Induction Training

The Consultant:

	 	(a)	 	shall ensure that all of its Personnel undergo induction training required
for the Site in accordance with the Client’s requirements; and

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	 	(b)	 	acknowledges that it:

	 	(i)	 	has made a sufficient allowance in the Services Costs for,
and assumes the risk of any delays arising out of or in connection with, the
induction training required under Clause 48.2(a), provided that any required
induction training is provided within a reasonable time after request by the
Consultant; and
	 
	 	(ii)	 	will not be entitled to make any Claim (insofar as is
permitted by Law) arising out of or in connection with that induction
training.

48.3 Safety Requirements

	 	(a)	 	The Consultant shall:

	 	(i)	 	ensure that the Consultant Personnel, and shall use its best
endeavours to ensure that the Project Contractor Personnel, while upon the
Site comply:

	 	(A)	 	with all obligations of the Consultant under
the Agreement;
	 
	 	(B)	 	all applicable Laws; and
	 
	 	(C)	 	with any Site safety regulations issued from
time to time to the Consultant by the Client’s Representative,

in relation to safety on the Site

	 	(ii)	 	maintain appropriate safety precautions and programs so as to
prevent injury to persons or damage to property on, about or adjacent to the
Site;
	 
	 	(iii)	 	use its best endeavours to ensure that the Project is
performed in a safe manner, including:

	 	(A)	 	erecting and maintaining, as required by
existing conditions and the progress of the performance of the
Project, all safeguards necessary for safety and protection (including
barriers, fences and railings); and
	 
	 	(B)	 	posting danger signs and other warnings
against hazards (including all such signs and other warnings required
by Law) and notifying the Client and other users of any dangerous or
hazardous conditions arising out of the performance of the Project;

	 	(iv)	 	have appropriate first aid facilities available on the Site
at all times; and
	 
	 	(v)	 	not leave any work or partly completed work in an unsafe
condition or in a condition which might cause damage to other work, plant,
machinery or equipment, and continue such work until it is in a safe
condition.

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	 	(b)	 	Despite any other provision of the Agreement to the contrary, if the Client
determines, pursuant to its obligations under Law and to prevent risk of injury or
property damage, that it is necessary for it or any third party to take urgent action
to remedy any safety or operational risk at the Site or any part of the Site that is
under the control of the Consultant, then:

	 	(i)	 	the Client may take any action it considers appropriate to
remedy the safety or operational risk; and
	 
	 	(ii)	 	the Consultant shall indemnify the Client against any damage,
cost, loss or liability the Client suffers or incurs in respect of remedying
the urgent safety or operational risk if, and only to the extent, the urgent
safety and operational risk was caused or contributed by a breach by the
Consultant of its obligations arising out of or in relation to the Agreement.

	 	(c)	 	If any of the Consultant’s Personnel damage property, the Consultant must
promptly make good the damage and pay any compensation which the Law requires the
Consultant to pay.
	 
	 	(d)	 	The Client shall ensure that all contracts with subcontractors and Project
Contractors contain obligations identical to the obligations contained in clauses
48.3(b) and 48.3(c).

48.4 Access for the Client, the Client’s Representative and others and Site Condition

	 	(a)	 	The Consultant shall ensure that:

	 	(i)	 	the Client, the Client’s Representative and any other person
authorised by the Client or the Client’s Representative (including Project
Contractors); and
	 
	 	(ii)	 	any person authorised by Law to have access to the Site for
the purpose of exercising a function or discharging a responsibility which
that person has under Law,

have safe access to any part of the Site that is under the control of the
Consultant at all times during the performance of the Services at the Site,
provided that those persons agree to observe the Consultant’s reasonable safety
requirements.

	 	(b)	 	The Consultant shall:

	 	(i)	 	provide the Client and the Client’s Representative, at all
reasonable times, with access to all workshops and places at the Site
	 
	 	(ii)	 	use reasonable endeavours to ensure that the Project
Contractors provide, and the Consultant will arrange for, the Client and the
Client’s Representative, at all reasonable times, to have access to all
workshops and places at the Site or elsewhere, where work is being prepared or
from

Page 37 of 85

 

	 	 	 	where materials, manufactured articles or machinery are being obtained for
the Project.

	 	(c)	 	The Consultant shall:

	 	(i)	 	subject to Clause 48.4(a), control access to any part of the
Site that is under the control of the Consultant; and
	 
	 	(ii)	 	ensure that any part of the Site that is under the control of
the Consultant is kept in a clean and tidy condition.

48.5 Access by Project Contractors

	 	(a)	 	The Consultant acknowledges that Project Contractors may be present on the
Site during the performance of the Services. The Consultant shall, and shall use its
best endeavours to ensure that all Project Contractors:

	 	(i)	 	co-operate with all other Project Contractors;
	 
	 	(ii)	 	co-ordinate their work with the other Project Contractors’
work to minimise any delays;
	 
	 	(iii)	 	not obstruct, delay or interfere with or damage other
Project Contractors’ work;
	 
	 	(iv)	 	comply with all directions from the Client’s Representative
regarding other Project Contractors and their work; and
	 
	 	(v)	 	allow any other Project Contractors engaged by the Client to
use the amenities, facilities and services which are available for use on the
Site.
	 
	 	(vi)	 	any delay or disruption caused by other Project Contractors
will not affect or limit the Consultant’s obligations or liabilities under the
Agreement.

48.6 Operation of Existing Plant

	 	(a)	 	The Consultant acknowledges that the following requirements are essential to
the Client:

	 	(i)	 	that any interruption to the operation of the Existing Plant
caused by the interconnection of the Project to the Existing Plant is
minimised;
	 
	 	(ii)	 	that (other than as contemplated in Clause 48.6(a)(i) the
Existing Plant and its continued operation are not affected in any way by the
Project; and
	 
	 	(iii)	 	without limiting Clause 48.6(a)(i) or Clause 48.6(a)(ii),
that the Project will fully, effectively and efficiently interface with the
Existing Plant.

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	 	(b)	 	The Consultant shall:

	 	(i)	 	use its best endeavours to perform the Services in a manner
so as to ensure that the requirements stipulated in Clause 48.6(a) are met;
	 
	 	(ii)	 	use its best endeavours to ensure that the Project
Contractors comply with the requirements of the Interconnection Procedures
when carrying out the interconnection works to the Existing Plant;
	 
	 	(iii)	 	at all times comply with the requirements of the Client
Standards and Procedures; and
	 
	 	(iv)	 	without limiting Clause 48.6(b)(i), design the Project and
perform the Services so that all aspects of the Project fully, effectively and
efficiently interface with the Existing Plant.

48.7 Things of Value or Interest

	 	(a)	 	Anything of value or interest (including fossils, artefacts and objects of
antiquity or of archaeological or anthropological interest) found on the Site:

	 	(i)	 	shall be brought immediately to the attention of the Client’s
Representative; and
	 
	 	(ii)	 	will, as between the parties, be the property of the Client.

	 	(b)	 	The Consultant shall, and shall ensure its subcontractors, carry out the
Client’s Representative’s directions in relation to any object referred to in Clause
48.7(a).
	 
	 	(c)	 	The Consultant acknowledges that it has no right or interest in any object
referred to in Clause 48.7(a).

49. Personnel (Replacing Clauses 11, 12, 13 and 15)

49.1 General

	 	(a)	 	The Consultant shall:

	 	(i)	 	provide experienced and skilled Personnel to perform the
Services in accordance with its obligations under the Agreement; and
	 
	 	(ii)	 	ensure that the Services are performed under the supervision
of appropriately qualified and experienced Personnel.

	 	(b)	 	Upon request, the Consultant shall provide resumes for any of the
Consultant’s Personnel or any Project Contractor Personnel.
	 
	 	(c)	 	The Client may, in its absolute discretion, direct the Consultant to remove
from the Site, or from any activity connected with performance of the Services, any of
its

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	 	 	 	Personnel engaged or employed in connection with the performance of the Services
for any of the following reasons:

	 	(i)	 	breach of the Code of Conduct;
	 
	 	(ii)	 	breach of Law;
	 
	 	(iii)	 	gross insubordination or wilful misconduct;
	 
	 	(iv)	 	negligence or incompetence.

The Consultant shall comply with a direction made under this Clause 49.1(c) within
the time specified by the Client.

49.2 Key Personnel

	 	(a)	 	No personnel listed in Appendix F will be replaced or released from
involvement in the Project by the Consultant without the prior written approval of the
Client, in its absolute discretion. If any of the personnel described in Appendix F
leave the employ of the Consultant or are unable to perform their allocated duties for
any period (whether as a result of death, illness or injury or the application of
Clause 49.1(c)), the Consultant will promptly replace such personnel with substitutes
of like skill and experience who are approved by the Client, which approval will not
be unreasonably withheld.
	 
	 	(b)	 	The Consultant acknowledges and agrees that:

	 	(i)	 	the Key Personnel are critical for the management,
supervision and performance of the Services;
	 
	 	(ii)	 	subject to Clause 49.2(e), it will pay to the Client
liquidated damages at the relevant rate and up to the maximum amount, both as
stated in Appendix F, for every day for which a member of the Key Personnel is
removed from or not available for the Services, but for which they are
required to be so available, until the earliest of:

	 	(A)	 	the day that the member of the Key Personnel
is again made available;
	 
	 	(B)	 	the date that the member of the Key Personnel
is replaced with a substitute person approved by the Client’s
Representative;
	 
	 	(C)	 	the date that the Agreement is terminated;
and
	 
	 	(D)	 	the Date of Final Completion;

unless such removal is due to resignation, serious illness, injury or death
of the Key Personnel or is otherwise approved by the Client’s
Representative under Clause 49.2(a) or directed by the Client under Clause
49.1(c);

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	 	(iii)	 	the parties have agreed to specify rates of
liquidated damages to be payable to avoid the difficulty of proving the
precise loss suffered by the Client if the Consultant fails to comply with
its obligations in respect of Key Personnel and agree that the rates of
liquidated damages in Appendix F represent a reasonable, fair and accurate
estimate of the loss that will be suffered by the Client arising out of the
loss of continuity and resulting inefficiencies should a member of the Key
Personnel be removed from the performance of the Services;
	 
	 	(iv)	 	the specified rates of liquidated damages are separate and
cumulative for each member of the Key Personnel; and
	 
	 	(v)	 	if the Client’s entitlement to, and the Consultant’s
liability for, liquidated damages under Clause 49.2(b)(ii) is or becomes void,
voidable or unenforceable for any reason or there is no amount specified in
Appendix F, then the Client will be entitled to recover from the Consultant,
and the Consultant will indemnify the Client against, the costs, losses,
damages and liabilities incurred or suffered by the Client arising out of or
in connection with the Consultant’s failure to provide the Key Personnel in
accordance with the Agreement.

	 	(c)	 	If any person listed in Appendix F as Key Personnel desires to be released
from the Project for reasons other than those referred to in Clause 49.2(a), the
Consultant’s Representative must give the Client’s Representative notice in writing
setting out:

	 	(i)	 	the name of the person;
	 
	 	(ii)	 	the part of the Services performed by that person and the
extent to which those Services have been performed;
	 
	 	(iii)	 	a summary of the reasons why that person desires to be
released from the Project;
	 
	 	(iv)	 	a statement of the impact upon the performance of the
Services or the Project (including its progress) should the person be
released;
	 
	 	(v)	 	the name of the proposed replacement together with a
statement of that person’s experience and qualifications.

	 	 	 	Any notice given under this Clause 49.2(c) must be countersigned by the person who
desires to be released.

	 	(d)	 	Except where any person listed in Appendix F as Key Personnel desires to be
released from the Project due to serious misconduct by the Client or any of its
Personnel in which case the request will be allowed, the Client’s Representative may
refuse any request made under Clause 49.2(c) if the Client’s Representative considers
(acting reasonably) that the release of the relevant person would have an adverse
impact upon the performance of the Services or the Project (including delay the
progress of the Services or Project) or result in an increase in the

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	 	 	 	Services Costs. The Consultant acknowledges and agrees that in considering any
request made under Clause 49.2(c) the Client’s Representative may meet with the
person named in the request in the absence of the Consultant and may, without the
prior consent of the Consultant, offer that person any lawful benefit as an
enticement to withdraw the request without any decision being made by the Client’s
Representative in respect of the request.
	 
	 	(e)	 	If any person listed in Appendix F as Key Personnel is released from the
Project in accordance with Clause 49.2(d) the Consultant will have no liability to the
Client under Clause 49.2(b).

49.3 Non-Solicitation

	 	 	The parties covenants that, during the Term and for a period of 6 months following end of
the Term, neither party will, either directly or through its subsidiaries and associated
entities, offer employment by way of contract or staff position to any Personnel employed
by the other. Each party further covenants that, should it breach the provisions of this
Clause 49.3 resulting in such offer being taken up, it will pay to the other party an
amount being six times the monthly salary or equivalent monthly payment otherwise payable
by the injured party in respect of each such person the subject of such breach.

49.4 Consultant’s Code of Conduct

	 	 	The Consultant shall:

	 	(a)	 	comply and ensure that all Consultant Personnel comply with the Code of
Conduct;
	 
	 	(b)	 	use reasonable endeavours to ensure that the Project Contractor Personnel
comply with the Code of Conduct; and
	 
	 	(c)	 	if the Consultant desires to amend the Code of Conduct, obtain the Client’s
Representative’s approval before making any amendment.

49.5 Privacy

	 	(a)	 	The Consultant and the Client warrant that they will comply applicable
Privacy Law in relation to the collection, use or disclosure of information pertaining
to Personal.
	 
	 	(b)	 	The Consultant and the Client agree to:

	 	(i)	 	observe applicable Privacy Law for all such information
collected or dealt with by the Consultant or the Client (as the case may be)
under the Agreement;
	 
	 	(ii)	 	take reasonable measures to ensure that such information is
protected against:

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	 	(A)	 	misuse or loss; and
	 
	 	(B)	 	unauthorised access, modification and
disclosure, and that only authorised personnel have access to such
information;

	 	(iii)	 	ensure all personnel involved in collecting or dealing with
such information are adequately trained as to the requirements of the Privacy
Law and the Agreement;
	 
	 	(iv)	 	give the other party reasonable assistance for it to resolve
any inquiry or complaint relating to such information;
	 
	 	(v)	 	promptly follow any reasonable direction of the other party
regarding such information and compliance with the Privacy Law;
	 
	 	(vi)	 	promptly inform the other party of any breach of this Clause
49.5.

50. Administration (Amending Clause 14)

50.1 The Client’s Representative

	 	(a)	 	The Client’s Representative will give directions and carry out all of the
other functions of the Client’s Representative under the Agreement as the agent of the
Client (and not as an independent certifier, assessor or valuer).
	 
	 	(b)	 	The Consultant shall comply with any direction by the Client’s Representative
given or purported to be given under a provision of the Agreement.
	 
	 	(c)	 	Except where the Agreement otherwise provides or in relation to any safety
related issue, the Client’s Representative may only give a direction in writing.
	 
	 	(d)	 	The Client may replace the Client’s Representative by written notice to the
Consultant at any time.
	 
	 	(e)	 	Except where expressly specified otherwise in the Agreement, the Client shall
ensure at all times that in the exercise of the function of the Client’s
Representative under the Agreement, the Client’s Representative act reasonably.
	 
	 	(f)	 	No comment, review, representation or approval by the Client or the Client’s
Representative in respect of the Consultant’s obligations under the Agreement
(including comments on, or review or approval of, any Project Material) will lessen or
otherwise affect the Consultant’s obligations under the Agreement.

50.2 Delegation of the Client’s Representative’s Power

	 	(a)	 	The Client’s Representative may appoint delegates to exercise any of the
Client’s Representative’s functions under the Agreement and may terminate such
appointments.

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	 	(b)	 	The Client shall promptly inform the Consultant in writing of:

	 	(i)	 	any replacement of the Client’s Representative; and
	 
	 	(ii)	 	any delegation by the Client’s Representative of the Client’s
Representative’s function under the Agreement to a nominee, the extent and the
scope of that delegation, and any termination of appointment of delegates.

50.3 Compliance with Directions

	 	(a)	 	If the Consultant fails or refuses to comply with a direction by the Client’s
Representative given in accordance with the Agreement, the Client may notify the
Consultant in writing of:

	 	(i)	 	the Consultant’s failure or refusal to comply with a
direction of the Client’s Representative; and
	 
	 	(ii)	 	except in the case of an emergency or extraordinary
circumstances, a reasonable period of time (but not more than 14 days) for the
Consultant to rectify the failure or refusal.

	 	(b)	 	If the Consultant does not rectify the failure or refusal within the
specified time, then the Client may:

	 	(i)	 	subject to Clause 50.3(c), withhold further payment to the
Consultant until the Consultant complies with the direction or the work the
subject of the direction is carried out under Clause 50.3(a); and
	 
	 	(ii)	 	carry out, or have a third party carry out, the work the
subject of the direction, in which case the cost incurred by the Client will
be a debt due and payable from the Consultant to the Client.

	 	(c)	 	The amount that the Client is entitled to withhold under Clause 50.3(b)(i)
shall:

	 	(i)	 	be 50% of a Payment Claim if at the time of the Consultant’s
failure or refusal referred to in Clause 50.3(b), the Payment Claim that has
been submitted to the Client but not yet paid claims payment of an amount
equal to or less than USD 100,000; or
	 
	 	(ii)	 	be 10% of a Payment Claim if at the time of the Consultant’s
failure or refusal referred to in Clause 50.3(b), the Payment Claim that has
been submitted to the Client but not yet paid claims payment of an amount that
exceeds USD 100,000.

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50.4 Consultant’s Representative

	 	(a)	 	The Consultant’s Representative will give directions and carry out all of the
other functions of the Consultant’s Representative under the Agreement as the agent of
the Consultant.
	 
	 	(b)	 	The Consultant may replace the Consultant’s Representative by written notice
to the Client at any time, provided that any replacement is consented to in writing by
the Owner.
	 
	 	(c)	 	The Consultant warrants that the Consultant’s Representative and any delegate
appointed under Clause 50.5 at all times has or will have authority to act on behalf
of the Consultant in respect of the Agreement.

50.5 Delegation of Consultant’s Representative’s Power

	 	(a)	 	The Consultant’s Representative may appoint delegates to exercise any of the
Consultant’s Representative’s functions under the Agreement and may terminate such
appointments.
	 
	 	(b)	 	The Consultant shall promptly inform the Client in writing of:

	 	(i)	 	any replacement of the Consultant’s Representative; and
	 
	 	(ii)	 	any delegation by the Consultant’s Representative of the
Consultant’s Representative’s functions under the Agreement to a nominee, the
extent and the scope of that delegation, and any termination of appointment of
delegates.

	 	(c)	 	The Consultant’s Representative or the Consultant’s Representative’s delegate
shall be available at all times at the Site when the Consultant is performing the
Services on the Site.

50.6 Consultant’s Acknowledgment

	 	 	The Consultant acknowledges that:

	 	(a)	 	any notice, consent, approval or other communication given or signed by the
Consultant’s Representative or any Consultant’s Representative’s delegate will bind
the Consultant;
	 
	 	(b)	 	matters within the Consultant’s Representative’s knowledge will be deemed to
be within the knowledge of the Consultant; and
	 
	 	(c)	 	any directions given by the Client’s Representative or by a delegate
appointed under Clause 50.2 on behalf of the Client’s Representative to any Key
Personnel will be deemed to have been given to the Consultant.

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50.7 Project Control Group

	 	(a)	 	The Project Control Group is:

	 	(i)	 	the Client’s Representative; and
	 
	 	(ii)	 	the Consultant’s Representative.

	 	(b)	 	The Client’s Representative or the Consultant’s Representative may invite any
other person, whom either person reasonably requires, to attend the Project Control
Group meetings.
	 
	 	(c)	 	The Project Control Group shall meet:

	 	(i)	 	on a monthly basis; and
	 
	 	(ii)	 	at other times which the Client’s Representative directs the
Consultant.

	 	(d)	 	The Consultant shall:

	 	(i)	 	take minutes of all meetings held by the Project Control
Group; and
	 
	 	(ii)	 	provide a copy of those minutes to the Client’s
Representative.

	 	(e)	 	In respect of minutes provided pursuant to Clause 50.7(d)(ii), the Client’s
Representative shall:

	 	(i)	 	if the Client’s Representative disagrees with the minutes,
discuss and amend the minutes to reflect the agreed position or failing
agreement, amend the minutes to reflect the position of the Client’s
Representative but shall record in the text the position of the Consultant’s
Representative; and
	 
	 	(ii)	 	give to the Project Control Group members a copy of the
agreed amended minutes at which point the amended minutes will (except for any
parts of the text of the amended minutes that are not agreed) be deemed to be
the official record of the relevant meeting.

50.8 Project Management Plan

	 	(a)	 	Within 30 days of the Execution Date, the Consultant shall submit to the
Client’s Representative for approval a draft Project Management Plan, which shall
clearly set out:

	 	(i)	 	the Consultant’s:

	 	(A)	 	administration policies;
	 
	 	(B)	 	organisational structure; and
	 
	 	(C)	 	implementation and control procedures;

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	 	(ii)	 	occupational health and safety procedures for the performance
of the Project;
	 
	 	(iii)	 	Site accident notification procedures;
	 
	 	(iv)	 	Site safety and security procedures (including fire
prevention procedures and the like);
	 
	 	(v)	 	procedures for establishing and using Site amenities,
	 
	 	(vi)	 	where required to do so under the Agreement, procedures for
obtaining all approvals required from Authorities or by Law for the
construction, use, operation and maintenance of the Project;
	 
	 	(vii)	 	any matter or subject which the Consultant has, in the
Consultant’s proposal, represented will form part of, or be incorporated in,
the Project Management Plan; and
	 
	 	(viii)	 	any other matters reasonably required by the Client to be included in the
Project Management Plan.

	 	(b)	 	The Client’s Representative may direct the Consultant to modify the draft
Project Management Plan as the Client’s Representative considers appropriate before
giving any approval, in which case the Consultant shall resubmit a modified draft of
the Project Management Plan within seven days of the direction for approval by the
Client’s Representative.
	 
	 	(c)	 	The Consultant shall comply with the Project Management Plan approved by the
Client’s Representative when performing the Services.

51. Liability (Replacing Clauses 16 And 18)

51.1 Liability of Consultant

	 	 	The Consultant shall be liable to the Client should it breach the Agreement.

51.2 Liability of Client

	 	 	The Client shall be liable to the Consultant should it breach the Agreement.

51.3 Maximum Liability

	 	(a)	 	For the purposes of this Clause 51.3:

	 	(i)	 	“Loss” means any cost, damage, expense or other liability;
	 
	 	(ii)	 	“Potentially Recoverable Amount” means the total amount that
would have been recovered under any policy of insurance that is required to be
maintained under the Agreement by the Consultant, but for any acts or
omissions of the Consultant in relation to the applicable policy including a

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	 	 	 	failure to effect or maintain a policy or a failure to diligently pursue a
claim for indemnity under any policy;
	 
	 	(iii)	 	“Event” means the event or occurrence which gives rise to or
which is the cause of or contributes to the Loss;
	 
	 	(iv)	 	“Insurance Proceeds” means any amount received by the
Consultant from an insurer under any policy of insurance that is required to
be maintained under the Agreement by the Consultant (whether in single or
multiple amounts) in respect of an Event or Loss;
	 
	 	(v)	 	“Payable Amount” means the Insurance Proceeds in respect of
an Event or Loss or the Potentially Recoverable Amount in respect of an Event
or Loss; and
	 
	 	(vi)	 	“Total Amount of the Services Costs” means the greater of:

	 	(A)	 	the total amount of the indicative Services
Costs set out Part C of Appendix C; and
	 
	 	(B)	 	the actual amount of the Services Costs paid
to the Consultant.

	 	(b)	 	Subject to Clauses 51.3(c) and despite any other provision of the Agreement
to the contrary, the Consultant’s liability to the Client for any Loss caused by,
arising out of or in connection with the Consultant’s obligations under the Agreement,
including:

	 	(i)	 	any breach of the Agreement by the Consultant;
	 
	 	(ii)	 	any negligent act or omission of the Consultant or its
Personnel in the course of performing the Consultant’s obligations under the
Agreement;
	 
	 	(iii)	 	any breach of or non — compliance with any Law by the
Consultant or its Personnel in the course of performing the Consultant’s
obligations under the Agreement,

	 	 	 	is limited in the aggregate to the following;

	 	(iv)	 	where the Event or Loss is an insured risk under a policy
required to be maintained by the Consultant in accordance with the Agreement,
to the greater of the total amount paid under that policy in respect of the
Event or Loss or the Potentially Recoverable Amount in respect of the Event or
Loss;
	 
	 	(v)	 	where the Event or Loss is an uninsured risk under a policy
required to be maintained by the Consultant in accordance with the Agreement
and the Payable Amount is less than 10% of the Total Amount of the Services
Costs, to the greater of:

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	 	(A)	 	the Payable Amount; and
	 
	 	(B)	 	the amount obtained by deducting the Payable
Amount from 10% of the Total Amount of the Services Costs;

	 	(vi)	 	where neither the Event or Loss are insured risks under any
policy required to be maintained by the Consultant in accordance with the
Agreement, to 10% of the Total Amount of the Services Costs.

	 	 	 	For the avoidance of doubt the Client and the Consultant acknowledge and agree
that:

	 	(i)	 	for the purposes of Clause 51.3(b)(iv) the total amount
payable in respect of an Event or Loss under:

	 	(A)	 	the insurance referred to in Clause 52.3(b)
shall be USD 7 million;
	 
	 	(B)	 	the insurance referred to in Clause 52.3(e)
shall be USD 3.5 million;

	 	(ii)	 	where an Event or Loss is an insured risk under a policy
required to be maintained by the Consultant in accordance with the Agreement
the Consultant shall pay to the Client, the amount of the applicable excess or
deductible together with the Insurance Proceeds;
	 
	 	(iii)	 	where an Event or Loss is an insured risk under a policy
required to be maintained by the Consultant in accordance with the Agreement,
the Consultant shall have no liability to pay any amount to the Client in
respect of that Event or Loss until the relevant insurer pays an amount under
the applicable policy to the Consultant in respect of that Event or Loss,
except:

	 	(A)	 	where it is agreed otherwise by the Client
and the Consultant; or
	 
	 	(B)	 	where the relevant insurer has not paid any
amount because of an act or omission of the Consultant;

	 	(iv)	 	until the liability of the Consultant to the Client arising
out of or in connection with an event or Loss has been satisfied, any
Insurance Proceeds shall be remitted to the Client without any deduction or
set off whatsoever; and
	 
	 	(v)	 	until the Consultant remits any Insurance Proceeds to the
Client in accordance with paragraph (iv) immediately above, the Consultant
holds those Insurance Proceeds on trust for the Client.

	 	(c)	 	The limitation in Clause 51.3(b) does not apply to the liability of the
Consultant referred to in Clause 51.3(b) where that liability arises by reason of any
wilful default, reckless or fraudulent conduct of the Consultant or any of its
Personnel.

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	 	(d)	 	Except in respect of claims for payment made by way of Payment Claims under
Clause 62 and despite any other provision of the Agreement to the contrary, the
Client’s liability to the Consultant in respect of any Claim or Loss is limited in
aggregate to 10% of the Total Amount of the Services Costs.

51.4 Excluded Losses

	 	 	Despite anything in the Agreement expressed or implied to the contrary, to the extent
permitted by law, neither party to the Agreement will be liable to the other for loss of
actual or anticipated profit or revenue, loss of use, loss of income or rent, loss of
business, loss of production, loss of contract, loss of anticipated savings or business,
loss of financial opportunity, financing and holding costs, business interruption, delay
costs, loss by reason of shutdown or increased expense of operation, loss or corruption of
data, loss of goodwill, denial of use of any plant, port or facility, economic loss or any
consequential, special, contingent, penal or indirect loss, damage or expense, whether
arising out of a breach of the Agreement, in contract, in tort (including negligence),
under statute or otherwise at law or in equity.

51.5 Exclusive Remedies

	 	 	To the extent permitted by law, the Client’s and Consultant’s remedies expressly stated in
the Agreement are their sole and exclusive remedies in respect of their respective
liabilities arising out of or in connection with the Agreement (including indemnities and
warranties) or the Project, in tort (including negligence), under statute or otherwise at
law or in equity.

51.6 Re-performance of non-complying Services and Indemnity

	 	(a)	 	If, at any time during the performance of the Services up to and including
the Date of Practical Completion, the Client’s Representative considers any part of
the Services not to be in accordance with the Agreement, or that any defect,
deficiency or non-conformance exists in respect of the Services, the Client’s
Representative may direct the Consultant to re-perform that part of the Services or
rectify that defect, deficiency or non-conformance and may specify the time within
which this must occur.
	 
	 	(b)	 	Subject to Clause 51.6(a), the Consultant shall correct or re-perform any
Services which do not comply with the requirements of the Agreement or rectify any
defect or deficiency in the Services so as to ensure compliance with the requirements
of the Agreement.
	 
	 	(c)	 	The Consultant acknowledges that it is not entitled to be reimbursed (under
the Agreement or otherwise) for any costs incurred by performing its obligations under
this Clause 51.6.
	 
	 	(d)	 	The Client may have the correction or re-performance of the non-compliant
Services, or rectification of any defect, deficiency or non-conformance in respect of
the Services carried out by others at the Consultant’s cost if:

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	 	(i)	 	the Client has directed the Consultant to correct, re-perform
or rectify those matters in accordance with Clause 51.6(a) within a reasonable
period of time (being not less than seven days) as stated in that direction;
and
	 
	 	(ii)	 	the Consultant has failed to correct, re-perform or rectify
those matters within that period.

	 	(e)	 	The Client’s costs under Clause 51.6(d) will be a debt due and payable by the
Consultant to the Client.
	 
	 	(f)	 	The Consultant’s compliance with any direction given by the Client’s
Representative under Clause 51.6(a) will:

	 	(i)	 	not be an admission of liability by the Consultant;
	 
	 	(ii)	 	not prejudice the right of the Consultant to dispute whether
any defect, deficiency or non-conformance exists in respect of the Services
the subject of the direction.

	 	(g)	 	If the Consultant:

	 	(i)	 	complies with a direction given under Clause 51.6(a) and
subsequently disputes whether any defect, deficiency or non-conformance exists
in respect of the Services the subject of the direction; and
	 
	 	(ii)	 	it is agreed between the parties or is determined by a Court
or other person whose decision is binding on the parties that no defect,
deficiency or nonconformance exists in respect of the Services the subject of
the direction,
	 
	 	 	 	then the Consultant shall be entitled to be paid in respect of the services
or work performed by it in complying with the direction in an amount agreed
between the parties or failing agreement, the services or work shall be
considered a Services Variation for the purposes of Clause 55.(d)(ii) and
the amount payable to the Consultant in respect of the services and work
shall be determined in accordance with that Clause.

	 	(h)	 	The Consultant acknowledges and agrees that, except for legal costs and
disbursements incurred and paid by it with respect to a dispute arising under this
Clause 51.6, it is not entitled to make any Claim against the Client for compensation
in connection with a direction given under this Clause 51.6 whether under the
Agreement or otherwise except as provided in this Clause 51.6.

51.7 Indemnity and Proportionality

	 	(a)	 	Subject to Clause 51.7(b), the Consultant shall indemnify the Client against
any cost, damage, expense or loss which the Client suffers or incurs in respect of:

	 	(i)	 	loss of, or damage to, any real or personal property; or

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	 	(ii)	 	the personal injury to, or disease or illness (including
mental illness) affecting, or death of, any person,

	 	 	 	arising out of or in connection with:

	 	(iii)	 	any negligent act or omission of the Consultant or its Personnel;
	 
	 	(iv)	 	any breach by the Consultant of the Agreement; and
	 
	 	(v)	 	the breach of, or failure to comply with, any Law by the
Consultant or its Personnel.

	 	(b)	 	For the purposes of Clause 51.7(a), a reference to the Client includes its
directors, officers, employees, direct contract employees and affiliates and the
Client will be deemed to be acting as agent or trustee on behalf of or for the benefit
of all persons who are or might be its directors, officers, employees, direct contract
employees or affiliates, from time to time as well as on its behalf.

	 	(c)	 	The Consultant’s liability under this Clause 51.7 will be reduced
proportionately to the extent that the cost, damage, expense or loss was contributed
to or caused by the Client, its employees, direct contract employees, agents or
affiliates.

52. Insurance (Replacing Clauses 19 and 20)

52.1 Client’s Insurances Required

	 	 	The Client will maintain or effect and maintain the following insurances for the Term and
any extension of it in the joint names of itself, the Consultant, the Project Contractors
and any lower tier subcontractors, including respective directors, officers, employees and
agents (“Insured”).

	 	(a)	 	Under a Contractors’ All-Risk Insurance Policy, for physical loss of or
damage to the Plant or any works, temporary works and materials or components
incorporated or to be incorporated in respect thereof whilst on or adjacent to the
Site, including inland transit in respect of loss, destruction or damage to the
property. The policy will be for an amount and with an excess as specified in Appendix
E.

	 	(b)	 	Under a Marine/Storage/Handling/Insurance Policy, cover for all materials or
components that will be used for incorporation into the Works or temporary works
against the risks of loss, damage or destruction whilst transported from suppliers’
premises until they are delivered and unpacked at the Site including loading or
unloading to the Site.

	 	(c)	 	Under a Third Party Liability Policy, cover for general third party liability
for an amount and with an excess of not less than the amount specified in Appendix E.
Such insurance policy will cover liability for physical loss or damage to property
(other than the Works and temporary works) and injury or death to persons (not being a
person who is insured under a policy of workers’ compensation or otherwise protected
under an applicable government-controlled workers

Page 52 of 85

 

	 	 	 	compensation fund) arising from or in connection with the execution of the Works,
whilst on or adjacent to the Site.

52.2 General Provisions regarding the Client’s Insurance

	 	 	The Client will provide to the Consultant:

	 	(a)	 	A copy of a certificate evidencing the Client’s insurance policies mentioned
in Clause 52.1, excluding references to premiums and other costs payable by the Client
upon request by the Consultant. If copies of such certificates have not been provided
to the Consultant at the Execution Date, the Consultant may suspend the Services until
such time as they are provided.

	 	(b)	 	A copy of any material variations to or cancellation of the Client’s
insurance if likely to affect the Consultant, the Project Contractors or the
subcontractors.

52.3 Consultant’s Insurances Required

	 	 	The Consultant shall maintain or effect and maintain the following insurances for the Term
and any extension of it:

	 	(a)	 	Workers’ Compensation and any other insurance or government-controlled fund
required by any applicable Law;
	 
	 	(b)	 	Third party liability insurance covering the Consultant’s own premises with a
limit of liability of US$7 million for any one occurrence;
	 
	 	(c)	 	Motor vehicle liability insurance in respect of the Consultant’s mechanically
propelled vehicles used by the Consultant in connection with the performance of the
Services under the Agreement;
	 
	 	(d)	 	Motor vehicle third party liability insurance if required by any applicable
Law;
	 
	 	(e)	 	Professional indemnity insurance for an amount of not less than US$3.5
million for any one claim or in the aggregate for the duration of the Agreement;
	 
	 	(f)	 	Property insurance covering Consultant’s constructional plant (if any),
equipment, buildings and other property not for incorporation in the Works used by the
Consultant in connection with the performance of the Services;
	 
	 	(g)	 	any additional insurance required by applicable Law; and
	 
	 	(h)	 	such other insurance, if available and as the Client may, at its own cost,
require from time to time.

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52.4 Project Contractor Insurance

	 	 	The Consultant shall ensure that all Project Contractors obtain and maintain, where
applicable, the insurances noted in Clauses 52.3(a), 52.3(c), 52.3(d), 52.3(e) and 52.3(f),
as well as all additional insurances that may be required by the Client from time to time.

52.5 Requirements for Insurance

	 	 	All insurances required under the Agreement will be:

	 	(a)	 	underwritten by reputable insurers; and
	 
	 	(b)	 	maintained at least for the Term;

	 	 	and comply with applicable Law.

52.6 Proof of insurance

	 	 	If requested by the Client, the Consultant will produce certificates of currency of the
insurances effected and maintained by the Consultant in accordance with this Clause 52.

52.7 Payment of Excesses

	 	 	Any excesses payable under Clause 52.3, excluding those relating to motor vehicles, shall
be paid by the Consultant.

53. Time (Replacing Clause 25)

53.1 Instruction to Accelerate

	 	 	If the Client’s Representative (acting reasonably) considers that any actual or anticipated
delay has or will arise in relation to:

	 	(a)	 	achieving the Date for Practical Completion;
	 
	 	(b)	 	performance of any part of part of the Services described in the Project
Schedule by the corresponding dates (if any) listed in the Project Schedule;
	 
	 	(c)	 	the performance of the Services generally,

	 	 	the Client’s Representative may:

	 	(d)	 	instruct the Consultant to accelerate the performance of the Services or any
part of the Services by taking those measures which are necessary to overcome or
minimize the extent and effects of some or all of the delay; and
	 
	 	(e)	 	give such an instruction whether or not the cause of delay is due to any act
or omission of the Consultant.

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53.2 Acceleration

	 	 	If the Client’s Representative gives an instruction to the Consultant under Clause 53.1 the
Consultant shall as instructed accelerate the performance of the Services or any specified
part of the Services (as the case may be) to overcome or minimize the extent and effect of
some or all of the delay and the Consultant will be entitled to be paid in accordance with
Clause 62.1.
	 
	 	 	The Consultant acknowledges and agrees that it will not be entitled to make any Claim
against the Client, arising out of, or in connection with, the cause of delay and any
associated instruction to accelerate other than for the amount which is payable by the
Client under this Clause 53.2 and Clause 62.1.

54. Variation to the Scope of Works (Replacing Clauses 23 and 24)

54.1 Works Variation

	 	 	A Works Variation may be:

	 	(a)	 	directed by the Client in writing; or

	 	(b)	 	approved by the Client after being recommended by the Consultant.

54.2 Parties to Discuss

	 	 	If the Works Variation directed or approved pursuant to Clause 54.1 will, in the reasonable
opinion of the Consultant, result in:

	 	(a)	 	a change in the Total Cost Forecast; or
	 
	 	(b)	 	a delay in the Date for Practical Completion;

	 	 	then the Consultant shall promptly provide an estimate including time and costs associated
with the Works Variation and the Client’s Representative and the Consultant’s
Representative (or their delegates) will discuss the effect of the proposed Works
Variation.

54.3 Client to Determine

	 	 	If the Client proceeds with a proposed Works Variation and the Works Variation directly
causes a material change in the Services, it will direct a Services Variation in accordance
with Clause 55.
	 
	 	 	For the purposes of this Clause 54.3 a material change in the Services will occur where the
value of any additional Services to be performed by the Consultant as a direct result of a
Works Variation is equal to or exceeds USD 250.

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54.4 Time

	 	 	Subject to Clause 53, the Consultant will be entitled to an adjustment to the Project
Schedule and Date for Practical Completion for a period equal to the estimated delay in
achieving Practical Completion resulting from the Works Variation.

54.5 Clarity

	 	 	Nothing in this Clause 54 shall lessen or otherwise affect the Consultant’s obligations
under the Agreement.

55. Variation to the Scope of Services (Replacing Clauses 23 and 24)

55.1 Services Variation

	 	 	A Services Variation may be:

	 	(a)	 	directed by the Client in writing; or
	 
	 	(b)	 	approved by the Client after being recommended by the Consultant.

	 	 	Services Variations may include additions to, or omissions from, the Scope of Services. If
the Services Variation requires the omission of any Services, the Client may have the
omitted Services carried out by others. If the Consultant receives a direction in
accordance with Clause 55.1, it shall perform its obligations under the Agreement in
accordance with the varied Scope of Services.
	 
	 	 	The Client shall, and shall cause the Client’s Representative to, exercise the powers of
the Client under this Clause 55.1 reasonably, professionally, in good faith and not for any
improper or punitive purpose.

55.2 Value

	 	 	The services to be performed by the Consultant as a result of a Services Variation will be,
subject to Clauses 51.6 and 60. Subject to Clauses 51.6 and 60, the Client will pay the
Consultant for Services Variations in accordance with Clause 55.5.

55.3 Time

	 	 	Subject to Clause 53, the Consultant will be entitled to an adjustment to the Project
Schedule and Date for Practical Completion for a period equal to the estimated delay in
achieving Practical Completion resulting from the Services Variation.

55.4 Clarity

	 	 	Nothing in this Clause 55 shall lessen or otherwise affect the Consultant’s obligations
under the Agreement.

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55.5 Variations — General

	 	(a)	 	If the Consultant receives a direction in accordance with Clause 55.1, it
shall perform its obligations under the Agreement in accordance with varied Scope of
Services.
	 
	 	(b)	 	For any additional Services it is required to perform pursuant to Clause
55.1, the Consultant’s only entitlement to compensation will be for an increase in
Services Costs as is calculated and paid in accordance with Clause 62.1.

56. Separable Portions

56.1 Agreement on Separable Portions

	 	 	In addition to the Separable Portions described in the Agreement, if any, the Client and
the Consultant may agree:

	 	(a)	 	that any part of the Works shall be a Separable Portion; and
	 
	 	(b)	 	on the respective Dates for Practical Completion for the new Separable
Portion and the resultant Separable Portion.

	 	 	It is agreed that the Oxide Plant and Sulphide Plant are Separable Portions as of the Date
of Commencement.

56.2 Changes relating to Separable Portions

	 	 	The Client and the Consultant may agree that any part of the Works or the Plant shall
become included within a Separable Portion or shall be removed from a Separable Portion and
be included as part of another Separable Portion.

56.3 Interpretation of Terms

	 	 	The interpretations of the terms “Date for Practical Completion”, “Date of Practical
Completion” and “Practical Completion” apply separately to each Separable Portion and, in
relation to each Separable Portion, references in the Agreement to “the Work” and “the
Plant” mean so much thereof as is comprised in the relevant Separable Portion.

56.4 Consequences of Separable Portion

	 	 	The Client will:

	 	(a)	 	direct a Works Variation in accordance with Clause 54 as a result of any
creation (other than those Separable Portions identified in Clause 56.1) of or change
in relation to a Separable Portion if that creation or change increases the Works; and
	 
	 	(b)	 	if, as a consequence of such Works Variation, there is a material
modification to the Scope of Services, direct a Services Variation in accordance with
Clause 55.

Page 57 of 85

 

	 	 	For the purposes of this Clause 56.4 a material change in the Scope Services will occur
where the value of any additional Services to be performed by the Consultant as a direct
result of a Works Variation is equal to or exceeds USD 250.

57. Suspension of Services (Replacing Clauses 26, 27 and 28)

57.1 Suspension by Client or Consultant

	 	 	The whole or any part of the Services may be suspended:

	 	(a)	 	by the Client, for such time and in such manner and for such reason as the
Client may consider necessary and suspension will be effected by written notice to the
Consultant; or

	 	(b)	 	by the Consultant for reasons of safety or, subject to the Consultant having
given notice in accordance with Clause 63.2, where the Client has failed to pay the
Consultant in accordance with Clause 62 of the Agreement.

57.2 Recommencement of Services

	 	 	If the Services are suspended in accordance with Clause 57.1 or any other reason, the
Client may, as soon as it is reasonable, direct the Consultant to recommence the whole or
the relevant part of the Services and the Consultant will comply with such direction as
soon as practicable provided that if the suspension is due to the Client’s failure to pay
the Consultant such direction to recommence may only be given after the Client has paid the
Consultant in accordance with Clause 62.

57.3 Suspension Costs

	 	(a)	 	Subject to Clause 57.3(e), any reasonable cost or expense (including to the
extent not covered by the Services Costs, any reasonable demobilization and
remobilization costs) incurred by the Consultant by reason of the suspension will be
borne and paid for by the Client, provided, however, that should any Consultant
Personnel be redeployed by the Consultant to other projects, then the Client shall not
be obligated to pay to the Consultant the costs associated with such personnel and, in
any event, the Client shall only be responsible for the cost of any such personnel for
a period not exceeding 30 days.
	 
	 	(b)	 	Subject to Clause 53, the parties acknowledge that any such suspension will
result in a Works Variation, Services Variation and extension to the Date for
Practical Completion.
	 
	 	(c)	 	The Consultant will mitigate the effect of suspension as soon as possible
after the Services are suspended in accordance with Clause 57.1.
	 
	 	(d)	 	If the suspension continues for more than 30 calendar days it shall be
considered a Force Majeure event and Clause 58.3(a) shall apply as if the figure “120”
had been replaced with “30”.

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	 	(e)	 	The Client will not be liable to pay to the Consultant any Services Costs or
any other cost or expense incurred or paid by it in connection with a suspension of
the Services where that suspension was caused by any act or omission of the Consultant
or its Personnel.

58. Force Majeure (Replacing Clauses 26, 27 and 28)

58.1 Force Majeure occurrence

	 	(a)	 	The Consultant or the Client (as the case may be) shall give prompt notice of
a Force Majeure Event to the other including reasonable details of:

	 	(i)	 	the Force Majeure Event;
	 
	 	(ii)	 	the effect of the Force Majeure Event on the performance of
the Services; and
	 
	 	(iii)	 	the likely duration of the delay in performance of the
Services and the likely delay in the Date for Practical Completion.

	 	(b)	 	The parties will use reasonable endeavours to remove or relieve any Force
Majeure Event and to minimise the delay caused by any such event.

58.2 Cessation

	 	 	After Force Majeure Event has ceased, the Client may:

	 	(a)	 	direct a Works Variation in accordance with Clause 54 as a result of the
Force Majeure Event; and

	 	(b)	 	direct a Services Variation accordance with Clause 55 as a result of the
Force Majeure Event.

58.3 Termination resulting from Force Majeure delays

	 	(a)	 	If a Force Majeure Event delays the Project for more than 120 days, either
party may terminate the Agreement by giving 14 days notice to the other party.

	 	(b)	 	If the Agreement is terminated under this Clause 58.3, the Client will pay to
the Consultant:

	 	(i)	 	all the Services Costs due and unpaid at the date of
termination; and
	 
	 	(ii)	 	reasonable costs incurred in demobilising all of the
Consultant’s Personnel and equipment to their place or origin in South Africa
or Australia (as the case may be) and in terminating any contract with a
subcontractor or other agreement, arrangement or commitment undertaken by the
Consultant for the purpose of providing the Services.

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	 	(c)	 	The Consultant acknowledges and agrees that it is not entitled to make any
Claim (whether under the Agreement or otherwise) against the Client for compensation
in connection with the termination of the Agreement under this Clause 58.3 except as
otherwise provided in this Clause 58.3.

59. Completion of the Project

59.1 Practical Completion

	 	(a)	 	Once the Project (or Separable Works) has in the opinion of the Consultant
reached Practical Completion following the completion of Dry Commissioning in
accordance with the standards set during Pre-Commissioning, the Consultant will in
writing request the Client to issue a certificate stating that the Project (or a
Separable Portion) has reached Practical Completion (“Certificate of Practical
Completion”).
	 
	 	(b)	 	Within 7 days of the receipt of the request pursuant to Clause 59.1(a), the
Client’s Representative and the Consultant’s Representative will meet, inspect the
Plant and agree to a punch-list of any minor omissions, defects and outstanding
Services which do not prevent the safe introduction of water or ore to the Plant (or a
Separable Portion).
	 
	 	(c)	 	Within 14 days of the receipt of the request pursuant to Clause 59.1(a), the
Client will issue to the Consultant the Certificate of Practical Completion along with
the punch-list agreed pursuant to Clause 59.1(b) or give to the Consultant in writing
reasons for not issuing the Certificate of Practical Completion, including particulars
of any omissions or defects in the Services or Works or outstanding Services or Works
required to be remedied or completed for the Project (or a Separable Portion) to
achieve Practical Completion.
	 
	 	(d)	 	If the Client does not issue the Certificate of Practical Completion or does
not provide written reasons for not providing the Certificate of Practical Completion
within the 14 days required pursuant to Clause 59.1(c) then the Project (or a
Separable Portion) is deemed to have reached Practical Completion on the date of the
Consultant’s written request under Clause 59.1(a).
	 
	 	(e)	 	Notwithstanding any other provision of this Clause 59.1, if Practical
Completion would have been achieved but for:

	 	(i)	 	failure of the Client to meet its obligations pursuant to the
Agreement; or
	 
	 	(ii)	 	any defect in or failure of the Biox® process as provided by
Goldfields,
	 
	 	 	 	the Project or a Separable Portion (as the case may be) will be deemed to
have reached Practical Completion on the date of the Consultant’s written
request under Clause 59.1(a).

Page 60 of 85

 

	 	(f)	 	The Client will allow the Consultant access to the Site and reasonable time
to rectify omissions or defects in the Services or to complete outstanding parts of
the Services as required pursuant to this Clause 59.1.
	 
	 	(g)	 	The Client shall not use any part or all of the Works (other than as a
temporary measure which is either specified in the Agreement or agreed by both
parties) for commercial purposes, unless and until the Client has issued a Certificate
of Practical Completion for that part or all of the Works. However, if the Client does
use any part or all of the Works for commercial purposes before the Certificate of
Practical Completion is issued, any part which is used shall be deemed to have reached
Practical Completion on the date on which it was used by the Client.
	 
	 	(h)	 	If the Consultant incurs cost or expenses as a result of the Client using a
part of the Works, other than such as is specified in the Agreement or agreed by the
Consultant, the Client shall reimburse the cost and expenses of the Consultant
resulting from such use.

59.2 Final Completion

	 	(a)	 	When the Project has in the opinion of the Consultant reached Final
Completion, the Consultant will in writing request the Client to issue a certificate
stating that the Project has reached Final Completion (“Certificate of Final
Completion”).
	 
	 	(b)	 	Within 14 days of the receipt of the request pursuant to Clause 59.2(a), the
Client will issue to the Consultant the Certificate of Final Completion or give to the
Consultant written reasons for not issuing the Certificate of Final Completion,
including particulars of any defects or omissions in the Services or the Works
required to be completed for the Project to reach Final Completion.
	 
	 	(c)	 	If the Client does not issue the Certificate of Final Completion or provide
written reasons for not providing the Certificate of Final Completion within the 14
days required pursuant to Clause 59.2(b) then the Project is deemed to have reached
Final Completion on the date of the Consultant’s written request under Clause 59.2(a).
	 
	 	(d)	 	Notwithstanding the other provisions of this Clause 59.2, if at any time the
Client wishes to issue a Certificate of Final Completion, notwithstanding any
omissions or defects in the Services, the Client may nevertheless at its absolute
discretion issue a Certificate of Final Completion and the Project will be deemed to
have reached Final Completion on the date of issue of such a Certificate of Final
Completion or such earlier date nominated by the Client.
	 
	 	(e)	 	Notwithstanding any other paragraph of this Clause 59.2, if Final Completion
would be achieved but for failure of the Client to meet its obligations pursuant to
the Agreement, the Project will be deemed to have reached Final Completion on the date
of the Consultant’s written request under Clause 59.2(a).

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	 	(f)	 	The Client will allow the Consultant access to the Site and reasonable time
to rectify omissions or defects in the Services or to complete outstanding parts of
the Services as required pursuant to this Clause 59.2.

60. Defects Liability

60.1 Consultant to Rectify Defects in the Services

	 	(a)	 	Subject to Clauses 60.1(b) and 60.1(d), the Consultant shall:

	 	(i)	 	rectify any Defective EPCM Services; and,
	 
	 	(ii)	 	where any defects or omissions in the Works have been caused
or contributed to by any Defective EPCM Services, arrange for the relevant
Project Contractors to rectify any defects or omissions in the Works,

	 	 	 	(“Rectification Work”).
	 
	 	(b)	 	Subject to Clause 60.1(d), the Consultant shall not be required to perform
the Rectification Work (including rectification of any hidden defects or omissions in
the Works) if notice containing details of the Rectification Work is not given by the
Client to the Consultant prior to the expiry of the Defects Notification Period.
	 
	 	(c)	 	For the avoidance of doubt, the Defects Notification Period of a Separable
Portion or part of the Works which has reach or deemed to have reached Practical
Completion pursuant to Clause 59.1 will commence on the date that Practical Completion
was reached or deemed to have reached Practical Completion pursuant to Clause 59.1.
	 
	 	(d)	 	Where the Consultant has performed any Rectification Work, there shall be a
separate Further Defects Liability Period in respect of each item of Rectification
Work. The separate Further Defects Liability Period shall commence on the date that
the Consultant completes or causes the completion of the relevant Rectification Work.
The Consultant shall:

	 	(i)	 	insofar as the Rectification Work consists of Defective EPCM
Services, rectify any defects or omissions in the Rectification Work; or
	 
	 	(ii)	 	where any defects or omissions in the Rectification Work
performed by Project Contractors have been caused or contributed to by any
Defective EPCM Services, arrange for the relevant Project Contractors to
rectify any defects or omissions in the Rectification Work,

	 	 	 	(“Defective Rectification Work”)
	 
	 	 	 	provided that notice containing details of the Defective Rectification Work is
given by the Client to the Consultant prior to the expiry of the Further Defects
Liability Period.

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60.2 Cost of Rectification of Defects

	 	 	The Consultant shall bear the cost of performance of Rectification Work and the Defective
Rectification Work which cost shall be limited to the limits of liability in clause 51.
The Consultant is not liable for:

	 	(a)	 	the cost of any Project Contractor’s work; or
	 
	 	(b)	 	aspects of Plant design that are attributable to intellectual property
conferred by Gold Fields.

60.3 Failure to Rectify

	 	 	Where the Consultant is given notice under Clause 60.1(a) or Clause 60.1(d) and fails to
perform the Rectification Work or the Defective Rectification Work (as the case may be),
the Client may have the Rectification Work or Defective Rectification Work carried out by
others and the Client’s costs incurred under this Clause 60.3 shall be a debt due and
payable by the Consultant to the Client.

61. Termination of Services (Replacing Clauses 26, 27 and 28)

61.1 Termination by the Client

	 	(a)	 	In addition to any other rights of termination contained in the Agreement,
the Client may (acting reasonably) at any time terminate the Agreement by giving
notice to the Consultant to that effect. The Client shall, and shall cause the
Client’s Representative to, exercise the powers of the Client under this Clause 61.1
reasonably, professionally, in good faith and not for any improper or punitive
purpose.
	 
	 	(b)	 	Termination of the Agreement pursuant to this Clause 61.1 will become
effective immediately after the notice has been served on the Consultant.

61.2 Actions by Consultant on Termination

	 	 	In the event of termination of the Agreement, whether under Clause 61.1 or otherwise, the
Consultant will immediately after receipt of the notice of termination:

	 	(a)	 	stop performance of the Services and, if required by the Client, the Works;
	 
	 	(b)	 	not place any further orders nor enter into any further contracts in respect
of the Services and, if required by the Client, the Works;
	 
	 	(c)	 	take all reasonable steps to protect the Works and other property in the
possession of the Consultant in which the Client has or may acquire an interest;
	 
	 	(d)	 	remove from the Site all the Consultant’s Personnel, plant, machinery,
vehicles and equipment and other things brought on to the Site by or on behalf of the
Consultant or the Consultant’s Personnel, unless otherwise agreed with the Client;

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	 	(e)	 	take any other action relating to the Services and the Works which the Client
may reasonably require;
	 
	 	(f)	 	hand over all Documentation; and
	 
	 	(g)	 	do all things reasonably possible to reduce expenses or costs to the Client
consequent upon such termination.

61.3 Payment to Consultant

	 	 	In the event of termination of the Agreement pursuant to Clause 61.1, the Client will pay
to the Consultant:

	 	(a)	 	all the Services Costs due and unpaid at the date of termination; and
	 
	 	(b)	 	reasonable costs incurred in demobilising all of the Consultant’s Personnel
and equipment to their place of origin in South Africa or Australia (as the case may
be) and in terminating any contract with any subcontractor or other agreement,
arrangement or commitment undertaken by the Consultant for the specific purpose of
providing the Services.

	 	 	If the Agreement is terminated under Clause 61.1 each party retains any rights it has
against the other party in respect of any past breach.

61.4 Sole Entitlement

	 	 	Where the Agreement is terminated in accordance with Clause 61.1, the Consultant
acknowledges and agrees that it is not entitled to any other compensation or to make any
other Claim against the Client, except as provided in Clause 61.3.

62. Invoicing and Payment (Replacing Clauses 30, 31 and 34)

62.1 Client’s Payment Obligations

	 	(a)	 	Except where expressly specified otherwise in the Agreement, as total
compensation for its performance of the Services, the Client shall pay the Consultant
the aggregate of the following amounts:

	 	(i)	 	the Disbursements;
	 
	 	(ii)	 	for each hour spent by any of its officers, directors,
employees and contract employees engaged in the performance of the Services in
the positions specified in Part A of Appendix C, the corresponding hourly rate
for each position as specified in Part A in Appendix C,

	 	 	 	(“Services Costs”).
	 
	 	(b)	 	The Consultant will not be entitled to be paid, and must not charge for, any
Services Costs incurred due to the failure of the Consultant to:

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	 	(i)	 	exercise reasonable care and diligence in the performance of
the Services;
	 
	 	(ii)	 	perform the Services in a reasonably expeditious and cost
effective manner.

	 	(c)	 	The estimated total Services Costs as at the Execution Date is the amount
specified in Part C of Appendix C.
	 
	 	(d)	 	Subject to Clause 62.9 and any other right to set off which the Client may
have, the Client must pay the Consultant the Services Costs in accordance with the
Agreement.

62.2 Electronic Funds Transfer

	 	 	The Client will make payment to the Consultant by electronic funds transfer into the
Consultant’s bank account.

62.3 Time for and format of Payment Claims

	 	(a)	 	Subject to Clause 62.7, the Consultant shall give the Client’s Representative
a claim for payment on account of the Services Costs and any other amounts payable by
the Client to the Consultant under the Agreement (“Payment Claim”) by both electronic
mail and in tangible form by the fourth Business Day of each month with a copy by
electronic mail to the Client’s Treasurer.
	 
	 	(b)	 	The Payment Claim shall be in the format approved in writing by the Client’s
Representative which shall as a minimum:

	 	(i)	 	set out the amount of the Services Costs and the other
amounts that the Consultant asserts are payable to the Consultant in
accordance with the Agreement;
	 
	 	(ii)	 	detail the relevant period of the Term for the Payment Claim;
	 
	 	(iii)	 	describe in detail the part of the Services performed during
the relevant period for the Payment Claim;
	 
	 	(iv)	 	set out amounts paid previously under the Agreement;
	 
	 	(v)	 	provide an individual reference number for the Client to
quote with remittance of payment; and
	 
	 	(vi)	 	include any other information directed by the Client’s
Representative.

62.4 Consultant Warranty

	 	 	By making a Payment Claim, the Consultant warrants to the Client that:

	 	(a)	 	the Consultant has completed the Services which are the subject of the
Payment Claim;

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	 	(b)	 	there are no defects known to the Consultant in the Services which are the
subject of the Payment Claim at the time the Payment Claim was submitted;
	 
	 	(c)	 	any remuneration and other amounts payable by the Consultant to any of its
Personnel by Law or under an industrial instrument in respect of the Services have
been paid;
	 
	 	(d)	 	its subcontractors have been paid all amounts due and payable to them for
services performed or material supplied by them in respect of the Services which was
the subject of the Payment Claim;
	 
	 	(e)	 	the Consultant has, unless there are lawful or reasonable grounds for not so
doing, complied with all of the obligations imposed on the Consultant by any
subcontract in relation to the Services; and
	 
	 	(f)	 	subject to any Claims that may have arisen within the 14-day period prior to
the Payment Claim, the Consultant is not aware of any Claim against the Client which
is not identified in the Payment Claim or in an earlier Payment Claim or notice of
which has not been previously given to the Client.

62.5 Payment

	 	(a)	 	Within 14 days of receipt of the Payment Claim, the Client shall pay to the
Consultant or the Consultant shall pay to the Client, as the case may be, the full
amount shown in the Payment Claim.
	 
	 	(b)	 	A payment made pursuant to the Agreement:

	 	(i)	 	of prejudice the right of either party to dispute whether the
paid amount is the amount properly due and payable;
	 
	 	(ii)	 	will not be evidence of the value of the Services;
	 
	 	(iii)	 	will not be evidence that the Services have been performed
satisfactorily; and
	 
	 	(iv)	 	will not be an admission of liability on the part of the
Client.

62.6 Payment Adjustment Statement

	 	(a)	 	Within fourteen (14) days of receipt of a Payment Claim under Clause 62.3,
the Client’s Representative may give the Consultant on behalf of the Client a payment
adjustment statement in respect of the Payment Claim or any previous Payment Claim
which states:

	 	(i)	 	the value of the Services performed by the Consultant in
accordance with the Agreement as at the date of the Payment Claim;
	 
	 	(ii)	 	the amount already paid to the Consultant;

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	 	(iii)	 	the amount the Client is entitled to retain, deduct,
withhold or set off under the Agreement as well as a summary of the reasons
for the retention, deduction, withholding or setting off;
	 
	 	(iv)	 	notification of any additional information required by the
Client’s Representative; and

	 	(b)	 	On receipt of the Payment Adjustment Statement, the Consultant must issue a
credit note to the Client and shall incorporate the adjustment on the next Payment
Claim.
	 
	 	(c)	 	If the Consultant fails to make a Payment Claim in accordance with the
Agreement, the Client’s Representative may nevertheless issue a payment statement
under this Clause 62.6.
	 
	 	(d)	 	The Client shall, and shall cause the Client’s Representative to, exercise
the powers of the Client under this Clause 62.6 reasonably, professionally, in good
faith and not for any improper or punitive purpose.

62.7 Conditions Precedent to Entitlement to Payment

	 	 	If, at the time that the Consultant submits a Payment Claim under Clause 62.3, the
Consultant has not:

	 	(a)	 	provided security or the amount (if any) required under Clause 69;
	 
	 	(b)	 	effected the insurance required by Clause 52 and (if requested) provided
evidence of this to the Client’s Representative;
	 
	 	(c)	 	paid all subcontractors as warranted under Clause 62.4(d); and
	 
	 	(d)	 	in the case of a Final Payment Claim, submitted a duly executed Deed of
Release as required under Clause 62.8(a)(ii);

	 	 	then:

	 	(e)	 	the Consultant will not be entitled to payment of;
	 
	 	(f)	 	the Client’s Representative will not be obliged to include in any payment
statement under Clause 62.6; and
	 
	 	(g)	 	the Client will not be liable to pay,

	 	 	any amount included in the Payment Claim.

62.8 Final Payment Claim

	 	(a)	 	Within two months after the expiry of the later of the Defects Notification
Period or the Further Defects Liability Period, the Consultant shall deliver to the
Client’s Representative:

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	 	(i)	 	a final payment claim under Clause 66.3 entitled ‘Final
Payment Claim’; and
	 
	 	(ii)	 	a duly executed deed of release in the form of the deed of
release in Appendix N.

	 	(b)	 	The Consultant shall include in the Final Payment Claim:

	 	(i)	 	a complete statement of accounts, including any changes to
the Scope of Services;
	 
	 	(ii)	 	all money that the Consultant considers to be due from the
Client arising out of or in connection with the Services or any alleged breach
of contract;
	 
	 	(iii)	 	confirmation that all documentation, approvals of all
Authorities and deliverables as required by the Agreement have been lodged
with the Client’s Representative; and
	 
	 	(iv)	 	a certificate stating that all wages and other charges have
been paid and that no monies are due or owing by the Consultant to any of its
Personnel other than any Personnel disclosed in the certificate.

	 	(c)	 	The Consultant shall provide with the Deed of Release (as required by Clause
62.8(a)) details of how the amount claimed (“Amount Claimed”) is calculated including:

	 	(i)	 	separate identification of each claim and the amount of each
claim which is part of the Amount Claimed;
	 
	 	(ii)	 	which clause, if any, of the Agreement the Consultant relies
upon to support an entitlement to each claim;
	 
	 	(iii)	 	if based on breach of contract, what obligation, if any, of
the Agreement the Client has breached and which the Consultant relies upon to
support an entitlement to each claim; and
	 
	 	(iv)	 	a description of the other acts, defaults and omissions that
the Consultant relies upon to support any entitlement to a claim.

	 	(d)	 	After expiration of the two month period in Clause 62.8(a), any Claim which
the Consultant could have made against the Client but which has not been made in the
Final Payment Claim, whether or not a Final Payment Claim is delivered, is barred.

62.9 Interest on Overdue Payments

	 	 	If any money due to either party remains unpaid after the date on which the money should
have been paid, then the party responsible for the payment must, following a written
request by the other party for payment of interest, pay to the other party Agreed

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	 	 	Compensation on the unpaid amount from, but not including the date on which the money was
due.

62.10 Set off

	 	 	The Client may set off or deduct from any payments due to the Consultant:

	 	(a)	 	any debt or other moneys due from the Consultant to the Client; and/or
	 
	 	(b)	 	any money or any claim to money that the Client may have against the
Consultant (including liquidated damages), which are due or which will become due
under the Agreement.

62.11 Client’s Payment of Subcontractors

	 	(a)	 	If the Consultant owes any subcontractor of the Consultant money in
connection with the Services, and

	 	(i)	 	that money has been outstanding under the relevant
subcontract for more than 14 days; and
	 
	 	(ii)	 	the Consultant cannot satisfy the Client’s Representative
that there is a valid reason (which shall include a genuine dispute between
the Consultant and a subcontractor of the Consultant) for that outstanding
money not having been paid, the Client may pay the subcontractor the
outstanding amount, and:
	 
	 	(iii)	 	call upon the security for the outstanding amount in
accordance with Clause 691 (without limiting the unconditional nature of the
security); or
	 
	 	(iv)	 	the outstanding amount so paid will be a debt due and
immediately payable from the Consultant to the Client.

	 	(b)	 	No debt by the Client will be taken to have accrued in favour of the
Consultant in respect of any payment by the Client of an outstanding amount in
accordance with Clause 62.11(a).
	 
	 	(c)	 	The Client is entitled to withhold from any payment which would otherwise be
due to the Consultant under the Agreement any amount owing to a subcontractor by the
Consultant under Clause 62.11(a).

62.12 Property and Liens

	 	 	The Consultant must not (insofar as is permitted by Law) assert any right to a lien over
the Site or Project (or part thereof) or take any steps whatsoever to lodge or register a
lien over the Site or Project (or part thereof) under, or in pursuance of, any relevant
Law.

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62.13 Taxes

	 	(a)	 	The Consultant is and remains liable for payment of any Taxes connected to
the Services. If any Tax is imposed, the Consultant shall pay the full amount to the
relevant Authority or person and indemnifies the Client against any failure to do so.
If any exemptions, reductions, allowances, rebates or other privileges in relation to
Taxes (other than Taxes imposed on the Consultant’s income or non-Project operations
of the Consultant) may be available to the Consultant or the Client, the Consultant
shall adjust any payments due to reflect any such savings or refunds (including
interest awarded) to the maximum allowable extent.

	 	(b)	 	Except for Excluded Taxes, it is agreed that:

	 	(i)	 	the Services Costs excludes the Taxes prevailing at the date
of the Agreement;
	 
	 	(ii)	 	the Services Costs will be increased by the amount of the
Taxes;
	 
	 	(iii)	 	the Consultant will be entitled to include in any Payment
Claim (as defined in Clause 62.3) the amount of any Taxes paid by the
Consultant in the period to which the Payment Claim relates.

	 	(c)	 	Except for Excluded Taxes, if any rate of Tax is increased or decreased or a
new Tax is introduced or an existing Tax is abolished or any change in interpretation
or application of any Tax occurs in the course of performance of the Agreement, an
adjustment will be made to the Services Costs to reflect any such change regardless of
whether this results in the Services Costs increasing or decreasing.
	 
	 	(d)	 	When the Client has approved (whether under this Clause 62 or otherwise)
payment to the Consultant and part or all of that payment consists of Taxes, the
Client may withhold and deduct from that payment those Taxes if the Client is required
to withhold or deduct those Taxes by any Authority.

62.14 Disbursements

	 	 	The Consultant shall only be entitled to recover Disbursements as disbursements, unless the
Client agrees to other specific disbursements.

62.15 Rates

	 	 	The rates itemized in Part A of Appendix C are fixed for the Term.

63. Default by a Party

63.1 Default by Consultant

	 	(a)	 	If the Client considers that the Consultant:

	 	(i)	 	is in breach of or in default under the Agreement; or

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	 	(ii)	 	has breached a warranty which it has given to the Client
under the Agreement;

	 	 	 	the Client may give the Consultant a notice:

	 	(iii)	 	specifying the alleged breach of or default under the Agreement;
	 
	 	(iv)	 	specifying the time and date by which the Consultant shall
rectify the breach or default (or overcome their effects); and
	 
	 	(v)	 	requiring the Consultant to show cause in writing why the
Client should not exercise its rights under Clause 63.1(d).

	 	(b)	 	If the Client gives the Consultant a notice referred to Clause 63.1(a), the
Consultant shall:

	 	(i)	 	comply with the notice;
	 
	 	(ii)	 	give the Client a program to rectify the relevant default or
remedy the breach (or overcome their effects) in accordance with the terms of
the Client’s notice.

	 	(c)	 	If the Consultant fails to rectify a default or remedy a breach (or overcome
their effects) in accordance with the terms of a notice referred to in Clause 63.1(a):

	 	(i)	 	the Client may take any action it considers appropriate to:

	 	(A)	 	rectify that default; or
	 
	 	(B)	 	remedy that breach; and

	 	(ii)	 	the Consultant shall indemnify the Client against any damage,
cost, loss or liability it suffers or incurs in respect of that default or
breach, except to the extent such damage, cost, loss or liability arises from
the negligence of the Client.

	 	(d)	 	If the Consultant is in breach of any material obligation under the
Agreement, the Client may, by written notice to the Consultant after it has previously
given the Consultant a notice under Clause 63.1(a) and the Consultant has not complied
with that notice, with immediate effect:

	 	(i)	 	suspend payment to the Consultant under the Agreement; or
	 
	 	(ii)	 	terminate the Agreement.

	 	(e)	 	Subject to Clause 50.3(c), if the Consultant is in breach of any obligation
under the Agreement that is not a material obligation, the Client may, by written
notice to the Consultant after it has previously given the Consultant a notice under
Clause 63.1(a) and the Consultant has not complied with that notice, deduct or

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	 	 	 	withhold from any Payment Claim that the Client has at that time approved for payment an
amount, not exceeding 10% of the relevant Payment Claim, whether for damages or
otherwise which, in the Owner’s reasonable estimate, is due or will become due
under the Agreement.

	 	(f)	 	Subject to the Client’s accrued and other rights under the Agreement or Law,
in the event of termination of the Agreement pursuant to Clause 63.1(d), the Client
will pay to the Consultant:

	 	(i)	 	all the Services Costs due and unpaid at the date of
termination; and
	 
	 	(ii)	 	reasonable costs incurred in demobilising all of the
Consultant’s Personnel and equipment to their place of origin in South Africa
or Australia (as the case may be) and in terminating any contract with any
subcontractor or other agreement, arrangement or commitment undertaken by the
Consultant for the specific purpose of providing the Services.

	 	(g)	 	Except as provided in Clause 63.1(f), the Consultant acknowledges and agrees
that where the Agreement is terminated in accordance with this Clause 63.1, the
Consultant is not entitled to make any Claim against the Owner in respect of the
termination including for any loss, cost, damage, expense or other liability.

63.2 Default by Client

	 	(a)	 	If the Client:

	 	(i)	 	breach of any material obligation under the Agreement,
	 
	 	(ii)	 	fails to pay the Consultant as required under the Agreement,
or
	 
	 	(iii)	 	fails to pay Project Contractors as required under the
Project Contracts,

	 	 	 	then the Consultant may by notice specify the default and state its intention to
exercise any one of the remedies under Clause 63.2(b)(i) or Clause 63.2(b)(ii).

	 	(b)	 	If the Client fails to remedy such default within 14 days of receiving the
notice from the Consultant, the Consultant may (without prejudice to any other rights
or remedies it has under the Agreement) upon notice to the Client exercise all or any
of the following remedies:

	 	(i)	 	suspend performance of the Services until the default has
been remedied; or
	 
	 	(ii)	 	in the case of Clause 63.2(a)(i) or Clause 63.2(a)(ii), by
way of a 30 Business Day notice terminate the Agreement.

	 	(c)	 	Subject to the Client’s accrued and other rights under the Agreement or Law,
in the event of termination of the Agreement pursuant to Clause 63.2(b)(ii), the
Client will pay to the Consultant:

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	 	(i)	 	all the Services Costs due and unpaid at the date of
termination; and
	 
	 	(ii)	 	reasonable costs incurred in demobilising all of the
Consultant’s Personnel and equipment to their place of origin in South Africa
or Australia (as the case may be) and in terminating any contract with any
subcontractor or other agreement, arrangement or commitment undertaken by the
Consultant for the specific purpose of providing the Services.

64. Insolvency

	 	(a)	 	If in relation to a party (“Insolvent Party”):

	 	(i)	 	notice is given of a meeting of creditors with a view to the
party entering a deed of company arrangement;
	 
	 	(ii)	 	a controller or administrator is appointed;
	 
	 	(iii)	 	the party enters a deed of company arrangement wit
creditors;
	 
	 	(iv)	 	an application is made to a court for the winding up of the
party and not stayed within 21 days;
	 
	 	(v)	 	a winding up order is made in respect of the party;
	 
	 	(vi)	 	the party resolves by special resolution that it be wound up
voluntarily (other than for a members’ voluntary winding-up);
	 
	 	(vii)	 	a mortgagee of any property of the party takes possession of
that property;
	 
	 	(viii)	 	a receiver or a receiver and manager of any property of the party is
appointed; or
	 
	 	(ix)	 	the party takes or suffers in any place, any step or action
analogous to any of those mentioned in subparagraphs (i) to (viii),

	 	 	then the other party may (without prejudice to any other rights or remedies it has under
the Agreement):

	 	(x)	 	terminate the Agreement by way of a 3 Business Day notice to
the Insolvent Party, its manager, receiver, trustee, liquidator, administrator
or any other person in whom the affairs of the Insolvent Party may have become
vested; or
	 
	 	(xi)	 	give to the manager, receiver, trustee, liquidator,
administrator or other person in whom the Insolvent Party’s affairs have
vested, the option of continuing to carry out the Agreement subject to the
provision of a guarantee satisfactory to the other party for the due and
proper performance of the unexpired portion of the Agreement. The option in
this

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	 	 	 	clause is exercisable within 14 days of its receipt. If such option is not
so exercised, it lapses, unless extended by the other party.

	 	(b)	 	In the event of termination of the Agreement pursuant to Clause 64(a)(x) by
the Consultant, the Client will:

	 	(i)	 	to the extent (if any) permitted by Law; and
	 
	 	(ii)	 	subject to the rights and powers of any of the persons
described in Clauses 64(a)(ii), 64(a)(iii), 64(a)(vii) and 64(a)(viii); and
	 
	 	(iii)	 	subject to the rights and powers (whether under any
instrument or otherwise) of the persons who appointed of any of the persons
described in Clauses 64(a)(ii), 64(a)(iii), 64(a)(vii) and 64(a)(viii),

	 	 	 	pay to the Consultant:

	 	(iv)	 	all the Services Costs due and unpaid at the date of termination; and

	 	(v)	 	all reasonable costs incurred in demobilising all of the
Contractor’s Personnel and equipment to their point of origin in either South
Africa or Australia (as the case may be) and in terminating any contract with
any subcontractor of the Consultant or other contract or agreement entered
into by the Consultant for the specific purpose of performing the Services.

	 	(c)	 	In the event of termination of the Agreement pursuant to Clause 64(a)(x) by
the Client, the Consultant will:

	 	(i)	 	to the extent (if any) permitted by Law; and
	 
	 	(ii)	 	subject to the rights and powers of any of the persons
described in Clauses 64(a)(ii), 64(a)(iii), 64(a)(vii) and 64(a)(viii); and
	 
	 	(iii)	 	subject to the rights and powers (whether under any
instrument or otherwise) of the persons who appointed of any of the persons
described in Clauses 64(a)(ii), 64(a)(iii), 64(a)(vii) and 64(a)(viii),

	 	 	 	pay to the Client:

	 	(iv)	 	all moneys which the Client may be entitled to from the
Consultant under or in accordance with the Agreement as at the date of
termination; and

	 	(v)	 	all moneys paid to others in accordance with an express
provision of the Agreement prior to or on the date of termination.

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65. Intellectual Property

65.1 Client to Procure

	 	(a)	 	Except as otherwise provided in the Agreement, the Client will procure all
third party Intellectual Property Rights necessary for the lawful completion and
operation of the Project.
	 
	 	(b)	 	Subject to Clause 65.1(c), and to the extent permitted by Law, the ownership
of any Protected Right, any new invention or any improvement to an existing patent
made or developed by the Consultant (or by those for whom it is responsible) during
the Agreement and for the purposes of the Agreement shall be the property of the
Client (“New IP”). The Client gives the Consultant a royalty-free, irrevocable and
non-exclusive licence to use the New IP and any improvements thereto, subject to Law
and any prior third party rights restricting such licence.
	 
	 	(c)	 	The Consultant remains the owner of any Protected Right used in the
performance of the Services, which are in existence at the Date of Commencement or
come into existence after the Date of Commencement and are created for a purpose other
than the Services (“Background IP”). The Consultant shall own the Protected Rights in
any improvements to the Background IP. The Consultant gives the Client a royalty-free,
irrevocable and non-exclusive licence to use the Background IP and any improvements
thereto for any purpose connected with the Project including repair, maintenance or
expansion of the Project.

66. Assignment (Replacing Clause 38)

66.1 Assignment by Consultant

	 	 	The Consultant may, with the prior written approval of the Client not to be unreasonably
withheld (which approval may be subject to the Consultant first demonstrating to the Client
that all of the Consultant’s Key Personnel as identified in Appendix F will transfer to the
assignee and after the assignment continue to perform the Services in their same positions
and with their same authorities as they had prior to the assignment), assign all or part of
its right, title, and interest in the Agreement to any parent, subsidiary or affiliated
company of the Consultant, provided that:

	 	(a)	 	the Consultant shall then remain jointly and severally liable with the
assignee for all obligations and liabilities of the Consultant under the Agreement;
	 
	 	(b)	 	the Client may at its sole option have recourse against either or both the
assignee and the Consultant for any and all obligations or liabilities of the
Consultant; and
	 
	 	(c)	 	there is no adverse affect on the validity or enforceability of the guarantee
and indemnity referred to in Clause 70 or any Security previously delivered by or on
behalf of the Consultant to the Client under Clause 69, and that both the guarantee
and indemnity in Clause 70 and all security under Clause 69 remain valid and
enforceable by the Client in accordance with the provisions of the Agreement.

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66.2 Assignment by Client to Affiliates and Third Parties

	 	(a)	 	The Client may, with the prior written approval of the Consultant not to be
unreasonably withheld, assign all or part of its right, title, and interest in the
Agreement to any parent, subsidiary or affiliated company, partnership or joint
venture of the Client, provided that all outstanding amounts properly due and owing to
the Consultant at that time have been paid and that such parent, subsidiary or
affiliated company, partnership or joint venture of the Client reasonably demonstrates
that it is able to meet the payment obligations of the Client under the Agreement.
	 
	 	(b)	 	The Client may assign all or part of its right, title, and interest in the
Agreement to any other third party with the prior written approval of the Consultant,
which consent will not be withheld provided that all outstanding amounts properly due
and owing to the Consultant at that time have been paid and that such third party
reasonably demonstrates that it is able to meet the payment obligations of the Client
under the Agreement.

66.3 Assignment by Client to Financing Entities

	 	 	Without the prior consent of the Consultant, the Client may assign all or part of its
right, title, and interest in the Agreement to any Financing Entity. The Consultant shall
execute and deliver to the Client a consent to and acknowledgement of assignment on
reasonable terms as may be required by the Financing Entities, to be effective only when
all outstanding amounts properly due and owing to the Consultant at that time have been
paid. Any Financing Entity may, in connection with any default under any financing document
related to the Project, assign any rights assigned to it under this Clause 66.3 to any
third party provided that all outstanding amounts properly due and owing to the Consultant
at that time have been paid and that such third party reasonably demonstrates that it is
able to meet the payment obligations of the Client under the Agreement. The Consultant
agrees that, upon receipt of written notice of such assignment, it shall, if requested by a
Financing Entity, deliver all Project Material required to be delivered to the Client under
the Agreement to the Financing Entity or its assignee at such address as Financing Entity
shall specify to the Consultant in writing.

66.4 Cooperation with Financing Entities and Insurers

	 	(a)	 	The Consultant acknowledges and agrees that any Financing Entity and any and
all insurers, and their respective representatives, have the right to review, inspect,
audit and monitor the performance of the Services and the Works, the Site, any item of
equipment (including equipment under fabrication), materials, supplies, tools, other
items, design, engineering, service, or workmanship to be provided under the
Agreement, and to observe all tests and all other aspects of the Project. The
Consultant shall allow all of them reasonable access during normal working hours to
its offices, the Site, the Works (including equipment under fabrication) and the
Project, as reasonably requested by any of the Client, a Financing Entity and
insurers. The Consultant shall incorporate such rights of review, inspection, audit
and monitoring in all subcontracts.

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	 	(b)	 	The Consultant shall, if it proposes any Project Contract, include provisions
in the Project Contract that allow representatives of the Financing Entity and
insurers to inspect, review and monitor the progress of the Project and conformance
with the requirements of the Agreement.

67. Confidentiality (Replacing Clause 42)

67.1 Keep Confidential

	 	 	All information exchanged between the parties under or in relation to the Agreement is
confidential to them and may not be disclosed to any person except:

	 	(a)	 	if required by Law or the rules of a relevant stock exchange;
	 
	 	(b)	 	to employees, Project Contractors or consultants for the purposes of
tendering for or entering into a contract with Project Contractors or consultants;
	 
	 	(c)	 	with the consent of the party who supplied the information and the consent of
the Client, which may not be unreasonably withheld;
	 
	 	(d)	 	if the information is in the public domain at the Date of Commencement, or
comes into the public domain after the Date of Commencement other than as a result of
a breach of the Agreement;
	 
	 	(e)	 	if the information is already known or in the possession of the recipient
without restrictions relating to disclosure before the date of receipt; or
	 
	 	(f)	 	if the information is obtained from a source other than the party who
supplied the information, provided that the source was not subject to any prohibition
against disclosure.

67.2 Extension of Obligations

	 	 	The parties will ensure that the provisions of this clause are extended to their employees,
agents or contractors.

67.3 Continuation of Obligations

	 	 	The obligations imposed in this Clause 67 continued for a period of four years after the
Date of Final Completion.

68. Settlement of Disputes (Replacing Clauses 43.8 and 44)

68.1 Failure of Mediation

	 	 	If the parties fail to reach agreement within 28 days of the Mediator being appointed, or
such other period as the parties may agree, then both parties shall be entitled to take any
action necessary to have the dispute determined by litigation.

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68.2 Matters Precedent to Litigation

	 	 	Each party expressly agrees not to commence any action in any court in relation to a
dispute (other than where a party seeks urgent injunctive or declaratory relief) unless and
until all of the provisions of Clause 43 and Clause 68.1 have been met.

68.3 Dispute Resolution not to delay Performance

	 	 	Despite the existence of a dispute between the parties:

	 	(a)	 	the Consultant shall proceed without delay to continue to perform the
Services; and
	 
	 	(b)	 	both parties must perform their other obligations under the Agreement.

69. Security

69.1 Consultant Security

	 	(a)	 	Within seven days after the date of execution of the Agreement, the
Consultant shall deliver to the Client:

	 	(i)	 	two performance bonds in the form in Appendix M in favour of
the Client; or
	 
	 	(ii)	 	in any other form agreed in writing by the Client’s
Representative.

	 	(b)	 	The security shall be:

	 	(i)	 	collectively for ten percent of the total Services Costs
identified in Appendix C with each performance bond being for five percent of
the total Services Costs identified in Appendix C;
	 
	 	(ii)	 	in a form and in terms approved by the Client if not in the
form in Appendix M; and
	 
	 	(iii)	 	issued by a bank, insurance company or other financial
institution in South Africa approved by the Client.

	 	(c)	 	Any security provided by the Consultant under this Clause 69.1 shall be
available to the Client and any security that does not consist of money may be
converted into money whenever the Client is entitled to the payment of moneys by the
Consultant under or in accordance with the Agreement, or, whenever the Client is
entitled to reimbursement of any monies paid to others under or in accordance with the
Agreement, in all such cases as if the security were a sum of money due to the Client
by the Consultant.

69.2 Client Security

	 	(a)	 	Within seven days after the date of execution of the Agreement, the Client
shall deliver to the Consultant:

Page 78 of 85

 

	 	(i)	 	two performance bonds in the form in Appendix M in favour of
the Consultant; or
	 
	 	(ii)	 	in any other form agreed in writing by the Consultant’s
Representative.

	 	(b)	 	The security shall be:

	 	(i)	 	collectively for ten percent of the total Services Costs
identified in Appendix C with each performance bond being for five percent of
the total Services Costs identified in Appendix C;
	 
	 	(ii)	 	in a form and in terms approved by the Consultant if not in
the form in Appendix M; and
	 
	 	(iii)	 	issued by a bank, insurance company or other financial
institution in South Africa approved by the Consultant.

	 	(c)	 	Any security provided by the Client under this Clause 69.2 shall be available
to the Consultant and any security that does not consist of money may be converted
into money whenever:

	 	(i)	 	the Client does not pay any amount due to the Consultant
under Clause 62.5 within the period specified in Clause 62.5; and
	 
	 	(ii)	 	within 14 days after the Consultant gives a notice to the
Client under Clause 63.2(a) the amount remains unpaid.

69.3 Interest on Security

	 	(a)	 	A party is not obliged to pay the other party interest on:

	 	(i)	 	any security; or
	 
	 	(ii)	 	subject to the Clause 69.3(b), the proceeds of any security
if it is converted into cash.

	 	(b)	 	If a party makes a call upon any security held by that party under this
Clause 69.3 (“calling party”) and obtains cash as a consequence, the calling party
will, following a written request by the other party for payment of interest, pay
simple interest, at the rate of Agreed Compensation, on the amount of any cash
obtained in excess of the sum to which the calling party is entitled at the time of
such call.

	 	(c)	 	The sum attracting interest will be further reduced by any unsatisfied
amounts which subsequently become payable under the Agreement by the Consultant to the
Client or by the Client to the Consultant (as the case may be) at the time such
amounts become payable.

Page 79 of 85

 

69.4 Security not on Trust

	 	 	Neither the Client or the Consultant hold any security or the proceeds or money referred to
in Clause 69.3 on trust for each other.

69.5 Release of Security

	 	 	The Client and the Consultant shall each release:

	 	(a)	 	one of the performance bonds (or one half of the other form of security)
provided in accordance with Clause 69.1 or Clause 69.2 (as the case may be) within 21
days of the Date of Practical Completion of the Sulphide Plant; and

	 	(b)	 	the other performance bond (or the other half of the other form of security)
provided in accordance with Clause 69.1 or Clause 69.2 (as the case may be) within 21
days of the later of:

	 	(i)	 	the expiry of the Defects Notification Period or any Further
Defects Liability Period; and
	 
	 	(ii)	 	the Client or the Consultant (as the case may be) having
complied with all its obligations under the Agreement.

	 	(c)	 	If prior to the date to be determined in accordance with Clause 69.5(b)
(“release date”) any security delivered to the Client by the Consultant under Clause
69.1 expires, the Consultant shall provide further security which:

	 	(i)	 	is a performance bond in the form of Appendix M in favour of
the Client or is otherwise in a form agreed in writing by the Client’s
Representative;
	 
	 	(ii)	 	is for two and a half percent of the total Services Costs;
	 
	 	(iii)	 	does not expire for three years from the date it is
delivered to the Client.

	 	 	 	Any further security delivered under this Clause 69.5(c) by the Consultant to the
Client shall be released by the Client on the release date.

69.6 Dealing with Security

	 	 	Each party shall not, and warrants that it will not, take any steps to:

	 	(a)	 	injunct or otherwise restrain the issuer of a security referred in to in
Clause 69.1 and Clause 69.2 from making a payment under it; or
	 
	 	(b)	 	restrain, hinder or in any way obstruct the other party from, when so
entitled, calling on or otherwise exercising its rights under a security.

Page 80 of 85

 

70. Guarantee and Indemnity

70.1 Consideration

	 	(a)	 	The Guarantor has requested the Client to enter into the Agreement with the
Consultant and the Client does so in consideration of this guarantee and indemnity.

	 	(b)	 	The Guarantor acknowledges that it has been given a copy of the Agreement and
has and full opportunity to consider its provisions before entering into this
guarantee and indemnity.

70.2 Guarantee

	 	 	The Guarantor guarantees to the Client prompt performance of all of the obligations of the
Consultant contained or implied in the Agreement. If the obligation is to pay money, the
Client may immediately recover the money from the Guarantor as a liquidated debt without
first commencing proceedings or enforcing any other right against the Consultant or any
other person.

70.3 Continuing Security

	 	 	This guarantee and indemnity is a continuing security, and is not discharged or
prejudicially affected by any settlement of accounts, but remains in full force until a
final release is given by the Client.

70.4 Matters Not Affecting Guarantor’s Liability

	 	 	The Guarantor’s liability under Clauses 70.2 is not affected by:

	 	(a)	 	the granting of time, forbearance or other concession by the Client to the
Consultant or the Guarantor;
	 
	 	(b)	 	any delay or failure by the Client to take action against the Consultant or
the Guarantor;
	 
	 	(c)	 	an absolute or partial release of the Consultant or the Guarantor or a
compromise with the Consultant or any Guarantor;
	 
	 	(d)	 	a variation, novation, renewal or assignment of the Agreement by the Client
whether or not this increases the liability of the Consultant or the liability of the
Guarantor under the Agreement;
	 
	 	(e)	 	the termination of the Agreement;
	 
	 	(f)	 	the fact that the Agreement is wholly or partially void, voidable or
unenforceable;
	 
	 	(g)	 	the non-execution of the Agreement by one or more of the persons named as the
Guarantor or the unenforceability of the guarantee or indemnity against one or more of
the Guarantors; or

Page 81 of 85

 

	 	(h)	 	the exercise or purported exercise by the Client of its rights under the
Agreement.

70.5 Payment Later Avoided

	 	 	The Guarantor’s liability is not discharged by a payment to the Client which is later
avoided by law. If that happens, the Client, the Consultant and the Guarantor will be
restored to their respective rights and obligations as it the payment had not been made.

70.6 Indemnity on Disclaimer

	 	 	It a liquidator or trustee in bankruptcy disclaims the Agreement, the Guarantor indemnifies
the Client against any resulting loss.

70.7 Guarantor Not to Prove in Liquidation or Bankruptcy

	 	 	Until the Client has received all money payable to it by the Consultant:

	 	(a)	 	the Guarantor must not prove or claim in any liquidation, bankruptcy,
composition, arrangement or assignment for the benefit of creditors of the Consultant;
and
	 
	 	(b)	 	the Guarantor must hold any claim it has and any dividend it receives on
trust for the Client.

70.8 Guarantor Not to Claim Benefits or Enforce Rights

	 	 	Until the Guarantor’s liability under the Agreement is discharged the Guarantor may not,
without the consent of the Client:

	 	(a)	 	claim the benefit or seek the transfer (in whole or in part) of any other
guarantee, indemnity or security held or taken by the Client;
	 
	 	(b)	 	make a claim or enforce a right against the Consultant or any other guarantor
or against the estate or any of the property of any of them, except for the benefit of
the Client;
	 
	 	(c)	 	raise a set-off or counterclaim available to it or the Consultant against the
Client in reduction of its liability under this guarantee and indemnity.

70.9 Costs and Expenses

	 	(a)	 	The Guarantor agrees to pay or reimburse the Client on demand for:

	 	(i)	 	its costs, charges and expenses of making, enforcing and
doing anything in connection with this guarantee and indemnity, including all
costs actually payable by the Client to its legal representatives (whether
under a costs agreement or otherwise); and
	 
	 	(ii)	 	all Taxes which are payable in connection with this guarantee
and indemnity or any payment, receipt or other transaction contemplated by it.

Page 82 of 85

 

	 	(b)	 	Money paid to the Client by the Guarantor must be applied first against
payment of costs, charges and expenses under this Clause 70.9(a) and then against
other obligations under this guarantee and indemnity.

70.10 Guarantee to Continue on Assignment of Rights

	 	 	If the Client assigns its rights under the Agreement in accordance with Clause 66, the
benefit of the guarantee and indemnity in this Clause 70 extends to the assignee and
continues concurrently for the benefit of the Client regardless of the assignment unless
the Client releases the Guarantor in writing.

70.11 Limit of Guarantor’s Liability

	 	 	Despite any other provision of this Clause 70 to the contrary, the Client and the Guarantor
acknowledge and agree that the Guarantor’s liability to the Client under this Clause
(whether for payment of money or otherwise) shall not exceed the liability of the
Consultant to the Client under the Agreement.

71. General

71.1 Legal costs

	 	 	Except as expressly stated otherwise in the Agreement, each party will pay its own legal
and other costs and expenses of negotiating, preparing, executing and performing its
obligations under the Agreement.

71.2 Waiver and exercise of rights

	 	(a)	 	A single or partial exercise or waiver by a party of a right relating to the
Agreement does not prevent any other exercise of that right or the exercise of any
other right.
	 
	 	(b)	 	The non-exercise of, or a delay in exercising, any power or right of a party
does not operate as a waiver of that power or right, nor does any single exercise of a
power or right preclude any other or further exercise of it or the exercise of any
other power or right by that party or Consultant.
	 
	 	(c)	 	A power or right of a party may only be waived in writing by the party.
	 
	 	(d)	 	The Agreement may only be varied, or its provisions waived, in writing by the
Client and the Consultant.

71.3 Severance

	 	 	Each provision of the Agreement will be deemed to be separate and severable from the others
of them. If any provisions of the Agreement are determined to be invalid or unenforceable
in any jurisdiction, such determination and the consequential severance (if any) will not
invalidate the rest of the Agreement, which will remain in full force and

Page 83 of 85

 

	 	 	effect as if such provision had not been made a part thereof, nor will it affect the
validity or enforceability of such provision in any other jurisdiction.

71.4 After hours communications

	 	 	If a communication is given:

	 	(a)	 	after 5.00 pm in the place of receipt; or
	 
	 	(b)	 	on a day which is not a Business Day in the place of receipt,

	 	 	it is taken as having been given on the next Business Day.

71.5 Process service

	 	 	Any process or other document relating to litigation, administrative or arbitral
proceedings relating to this document may be served by any method contemplated by Clause 41
or in accordance with any applicable Law.

71.6 Entire understanding

	 	(a)	 	The Agreement contains the entire understanding between the parties as to the
subject matter of the Agreement.

	 	(b)	 	All previous negotiations, understandings, representations, warranties,
memoranda or commitments concerning the subject matter of the Agreement are merged in
and superseded by the Agreement and are of no effect. No party is liable to any other
party in respect of those matters.
	 
	 	(c)	 	No oral explanation or explanation by e-mail or information provided by any
party to another:

	 	(i)	 	affects the meaning or interpretation of the Agreement; or
	 
	 	(ii)	 	constitutes any collateral agreement, warranty or
understanding between any of the parties.

71.7 Nature of the Relationship

	 	(a)	 	Nothing in the Agreement constitutes a joint venture, agency, partnership or
other fiduciary relationship between the Client and the Consultant.
	 
	 	(b)	 	The Consultant acknowledges that it has no authority to bind the Client.
	 
	 	(c)	 	At all times when performing its obligations under the Agreement, the
Consultant is deemed to be an independent contractor and not an employee or agent of
the Client.
	 
	 	(d)	 	The Consultant must not act outside the scope of the authority conferred on
it under the Agreement.

Page 84 of 85

 

71.8 Third Party Rights

	 	 	The Agreement shall be binding on and enure to the benefit of the lawful successors of each
party and every other person having rights under it by virtue of the Agreements (Rights of
Third Parties) Act 1999. Except as provided in this Clause 71.8, nothing in the Agreement
confers any rights on any person under the Agreements (Rights of Third Parties) Act 1999.
The exceptions provided for in this Clause 71.8 are each indemnified person named in Clause
51.7 of the Agreement, who may respectively enforce the rights in his, her or its favour
set out in such provision, subject to and in accordance with the Agreements (Rights of
Third Parties) Act 1999 and any express limits of liability set out in the Agreement.

71.9 Effective Date (replacing Clause 21)

	 	 	The Agreement shall be effective as of 21 February 2005.

71.10 Jurisdiction

	 	 	The parties irrevocably submit to the exclusive jurisdiction of the Courts exercising
jurisdiction in England, and any court that may hear appeals from any of those courts, for
any proceeding in connection with the Agreement, subject only to the right to enforce a
judgment in any court in any other jurisdiction.

Page 85 of 85exv10w1

 

	 	 	 	 	 	 	 	 	 	 	 
	PRIOR
	 	LOAN NUMBER
	 	ACCT. NUMBER
	 	AGREEMENT DATE
	 	CREDIT LIMIT
	 	MATURITY DATE
	 	 	 	 	 	 	 	 	 	 	 
	OBLIGATION	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	INFORMATION
	 	7200001800
	 	103476
	 	01/03/00
	 	$9,000,000.00
	 	09/30/07
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	LOAN NUMBER
	 	ACCT. NUMBER
	 	MODIFICATION DATE
	 	CREDIT LIMIT
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	7200001800
	 	103476
	 	08/01/06
	 	$50,000,000.00
	 	 	 	 	 	 	 	 	 	 	 
	AMENDED
	 	MATURITY DATE
	 	INDEX (w/margin)
	 	INTEREST RATE
	 	INITIALS
	 	 	 	 	 	 	 	 	 	 	 
	OBLIGATION	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	INFORMATION	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	07/31/10
	 	Wall Street Journal

Prime minus 1.125%
	 	7.125%
	 	DJ
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Creditor Use Only	 	 	 	 

DEBT MODIFICATION AGREEMENT

DATE AND PARTIES: The date of this Debt Modification Agreement (Modification) is August 1, 2006.
The parties and their addresses are:

LENDER:

AMERICAN NATIONAL BANK

400 EAST 1ST STREET, SUITE 110

CASPER, WYOMING 82601

Telephone: (307) 234-5300

BORROWER:

DOUBLE EAGLE PETROLEUM CO.

A MARYLAND Corporation

777 OVERLAND TRAIL

CASPER, Wyoming 82602

	1.	 	DEFINITIONS. In this Modification, these terms have the following meanings:

A. Pronouns. The pronouns “I,” “me,” and “my” refer to each Borrower signing this
Modification, individually or together with their heirs, executors, administrators,
successors, and assigns. “You” and “Your” refer to the Lender, with its participants or
syndicators, successors and assigns, or any person or entity that acquires an interest in the
Modification or Prior obligation.

B. Amended Obligation. Amended Obligation is the resulting agreement that is created when
the Modification amends the Prior Obligation. It is described above in the AMENDED
OBLIGATION INFORMATION section.

C. Loan. Loan refers to this transaction generally. It includes the obligations and duties
arising from the terms of all documents prepared or submitted in association with the Prior
Obligation and this modification, such as applications, security agreements, disclosures,
notes, agreements, and this Modification.

D. Modification. Modification refers to this Debt Modification Agreement.

E. Prior Obligation. Prior Obligation refers to my existing agreement described above in the
PRIOR OBLIGATION INFORMATION section, and any previous extensions, renewals, modifications or
substitutions of it.

 

 

	2.	 	BACKGROUND. You and I have previously entered into a Prior Obligation. As of the date of
this Modification, the outstanding, unpaid balance of the Prior Obligation is $3,114,171.72.
Conditions have changed
since the execution of the Prior Obligation instruments. In response, and for value
received, you and I agree to modify the terms of the Prior Obligation, as provided for in
this Modification.
	 
	3.	 	TERMS. The Prior Obligation is modified as follows:

A. Promise to Pay. My promise to pay is modified to read:

	 	(1)	 	PROMISE TO PAY. For value received, I promise to pay you or your
order, at your address, or at such other location as you may designate, amounts
advanced from time to time under the terms of this Loan up to the maximum
outstanding principal balance of $50,000,000.00 (Principal), plus interest from
the date of disbursement, on the unpaid outstanding Principal balance until this
Loan is paid in full and Lender has no further obligations to make advances to
you under this Loan.

          My Credit Limit has been increased by $41,000,000.00 with an initial Borrowing Base
established at $25,000,000.

B. Interest. Our agreement for the payment of interest is modified to read:

	 	(1)	 	INTEREST. Interest will accrue on the unpaid Principal balance of
this Loan at the rate of 7.125 percent (Interest Rate) until August 2, 2006,
after which time it may change as described in the Variable Rate subsection.

	 	(a)	 	Maximum Interest Amount. Any amount assessed or
collected as interest under the terms of this Loan will be limited to the
maximum lawful amount of interest allowed by state or federal law,
whichever is greater. Amounts collected in excess of the maximum lawful
amount will be applied first to the unpaid principal balance. Any
remainder will be refunded to me.
	 
	 	(b)	 	Statutory Authority. The amount assessed or
collected on this Loan is authorized by the Wyoming usury laws under Wyo.
Stat. § 40-14-358.
	 
	 	(c)	 	Accrual. Interest accrues using an Actual/360 days
counting method.
	 
	 	(d)	 	Variable Rate. The Interest Rate may change during
the term of this transaction.

	 	(1)	 	Index. Beginning with the first Change
Date, the Interest Rate will be based on the following index: the
base rate on corporate loans posted by at least 75% of the nation’s
30 largest banks known as the Wall Street Journal Prime Rate.

	 	 	 	The Current Index is the most recent index figure available on each
Change Date. You do not guaranty by selecting this Index, or the margin,
that the Interest Rate on the loan will be the same rate you charge on
any other loans or class of loans you make to me or other borrowers. If
this Index is no longer available, you will substitute a similar index.
You will give me notice of your choice.

	 	(2)	 	Change Date. Each date on which the
Interest Rate may change is called a Change Date. The Interest Rate
may change August 2, 2006 and daily thereafter.
	 
	 	(3)	 	Calculation of Change. On each Change
Date you will calculate the Interest Rate, which will be the Current
Index minus 1.125 percent. The result of this calculation will be
rounded to the nearest .001 percent. Subject to any limitations,
this will be the Interest Rate until the next Change Date. The new
Interest Rate will become effective on each Change Date. The
Interest Rate and other charges on the Loan will never exceed the
highest rate or charge allowed by law for the Loan.

 

 

	 	(4)	 	Effect of Variable Rate. A change in the
Interest Rate will have the following effect on the payments: The
amount of scheduled payments will change.

C. Maturity and Payments. The maturity and payment provisions are modified to read:

	 	(1)	 	PAYMENT. I agree to pay all accrued interest on the balance
outstanding from time to time in regular payments beginning August 31, 2006, then
on the same day of each month thereafter. A final payment of the entire unpaid
outstanding balance of Principal and Interest will be due July 31, 2010.

	 	 	 	Payments will be rounded to the nearest $.01. With the final payment I also agree to
pay any additional fees or charges owing and the amount of any advances you have made
to others on my behalf. Payments scheduled to be paid on the 29th,
30th or 31st day of a month that contains no such day will,
instead, be made on the last day of such month.

	 	(2)	 	Maturity. The maturity provision is modified to read:

	 	(a)	 	Maturity Date. Consistent with our existing periodic
payment arrangement, except any scheduled, final payment, I agree that the
entire outstanding balance of Principal and accrued interest is due on, or
before, July 31, 2010.

D. Fees and Charges. As additional consideration for your consent to enter into this
Modification Agreement, I agree to pay, or have paid these additional fees and charges:

	 	(1)	 	Nonrefundable Fees and Charges. The following fees are earned when
collected and will not be refunded if I prepay this Loan before the scheduled
maturity date.
	 
	 		 	• Loan. A(n) Loan fee of $58,000.00 payable from separate funds on or
before today’s date. (.25% of commitment less a credit of $4,500.00 paid on
the current facility.)

	4.	 	CONTINUATION OF TERMS. Except as specifically amended by this Modification, all of the terms
of the Prior Obligation shall remain in full force and effect.
	 
	5.	 	WAIVER. I waive all claims, defenses, setoffs, or counterclaims relating to the Prior
Obligation, or any document securing the Prior Obligation, that I may have. Any party to the
Prior Obligation that does not sign this Modification, shall remain liable under the terms of
the Prior Obligation unless released in writing by you.
	 
	6.	 	REASONS FOR MODIFICATION. THIS DEBT MODIFICATION IS TO:
(1) CHANGE THE INTEREST RATE TO WALL STREET JOURNAL PRIME MINUS 1.125%, ADJUSTING DAILY.
(2) EXTEND THE MATURITY DATE TO JULY 31, 2010.
(3) INCREASE THE CREDIT LIMIT OF THIS REVOLVING LINE OF CREDIT TO $50,000,000.00, WITH AN INITIAL
BORROWING BASE OF $25,000,000.00.
(4) TO ADD COVENANTS LISTED ON THE COMMERCIAL LOAN AGREEMENT AMENDMENT. EXHIBIT “B” NEW
COVENANTS.
	 
	7.	 	ADDITIONAL TERMS. A MORTGAGE ADDENDUM TO INCLUDE ADDITIONAL PROPERTIES TAKEN AS SECURITY IS
A PART OF THIS AGREEMENT AND ATTACHED. ANY THIRD PARTY LEGAL FEES IN EXCESS OF $5,000,00 WILL
BE PAID BY DOUBLE EAGLE PETROLEUM CO. THIS DEBT MODIFICATION AGREEMENT IS A CONTINUATION AND
SUBSTITUTION OF THAT PROMISSORY NOTE DATED JANUARY 3, 2000 AND ANY AMENDMENTS AND
MODIFICATIONS THERETO AND REPRESENTS A CONTINUATION OF THE INDEBTEDNESS EVIDENCED THEREBY.

 

 

	 	 	LOAN BALANCES REFERRED TO IN THIS AGREEMENT MAY BE THE BALANCES IN EFFECT AS OF THE DATE THIS
AGREEMENT WAS PREPARED. ALL TERMS AND CONDITIONS, EXCEPT AS SPECIFICALLY MODIFIED HEREIN, OF
THE PRIOR OBLIGATIONS ARE HEREBY RATIFIED AND CONFIRMED. CONSENT BY LENDER TO THIS
MODIFICATION DOES NOT WAIVE LENDER’S RIGHT TO REQUIRE STRICT PERFORMANCE OF THE PRIOR
OBLIGATIONS, AS MODIFIED, NOR
OBLIGATE LENDER TO MAKE ANY FUTURE MODIFICATIONS. BORROWER AFFIRMS THAT THE LENDER HAS FULLY
PERFORMED ITS OBLIGATIONS IN REGARD TO THE INDEBTEDNESS HEREBY BEING MODIFIED, AND THAT
BORROWER HAS NO DEFENSES TO PAYMENT OR RIGHT OF OFFSET AGAINST PAYMENTS OTHERWISE DUE.

	8.	 	SIGNATURES. By signing, I agree to the terms contained in this Modification. I also
acknowledge receipt of a copy of this Modification.
	 
	 	 	BORROWER:

	 	 	 	 	 	 	 	 	 
	 	 	DOUBLE EAGLE PETROLEUM CO.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By
	 	 
	 	 
	 	 	 	 	STEPHEN H. HOLLIS, PRESIDENT	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	 
	 	 
	 	 	 	 	LONNIE BROCK, CHIEF FINANCIAL OFFICER	 	 

	 	 	LENDER:

	 	 	 	 	 	 	 	 	 
	 	 	AMERICAN NATIONAL BANK	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By
	 	 
	 	 
	 	 	 	 	DALLEN JUELFS, PRESIDENT	 	 

 

 

AUTHORIZATION

By Corporation

	1.	 	ENTITY CERTIFICATIONS. I, STEPHEN H. HOLLIS, PRESIDENT and LONNIE BROCK, CHIEF FINANCIAL
OFFICER certify that:

A. I am designated to act on behalf of DOUBLE EAGLE PETROLEUM CO., Federal Tax Identifying
Number 83-0214692 (Corporation).

B. I am authorized and directed to execute an original or a copy of this Authorization to
Financial Institution, and anyone else requiring a copy.

C. Corporation is properly formed and validly existing under the laws of Maryland and that
Corporation has the power and authority to conduct business and other activities as now being
conducted.

D. Corporation has the power and authority to adopt and provide this Authorization and to
confer the powers granted in this Authorization; the designated Agents have the power and
authority to exercise the actions specified in this Authorization; and Corporation properly
adopted these authorizations and appointed the Agents and me to act on its behalf.

E. Corporation will not use any trade or fictitious name without Financial Institution’s
prior written consent and will preserve Corporation’s existing name, trade names, fictitious
names and franchises.

F. Corporation will notify Financial Institution before reorganizing, merging, consolidating,
recapitalizing, dissolving or otherwise materially changing ownership, management or
organizational form. Corporation will be fully liable for failing to notify Financial
Institution of these material changes.

	2.	 	GENERAL AUTHORIZATIONS. I certify Corporation authorizes and agrees that:

A. American National Bank (Financial Institution) is designated to provide Corporation the
financial accommodations indicated in this Authorization.

B. All prior transactions obligating Corporation to Financial Institution by or on behalf of
Corporation are ratified by execution of this Authorization.

C. Any agent, while acting on behalf of Corporation, is authorized, subject to any expressed
restrictions, to make all other arrangements with Financial Institution which are necessary
for the effective exercise of the powers indicated within this Authorization.

D. The signatures of the Agents are conclusive evidence of this authority to act on behalf of
Corporation.

E. Unless otherwise agreed to in writing, this Authorization replaces any earlier related
Authorization and will remain effective until Financial Institution receives and records an
express written notice of its revocation, modification or replacement. Any revocation,
modification or replacement of this Authorization must be accompanied by documentation,
satisfactory to Financial Institution, establishing the authority for the change.

F. Corporation agrees not to combine proceeds from collateral securing any debts owed to
Financial Institution with unrelated funds.

G. Financial Institution may verify credit history of Corporation by obtaining a credit
report from a credit reporting agency or any other necessary means.

 

 

	3.	 	SPECIFIC AUTHORIZATIONS. The following persons (Agents) are authorized to act on behalf of
Corporation in fulfilling the purposes of this Authorization:

	 	 	 	 	 	 	 	 	 
	Name and Title	 	Signature	 	 	 	Facsimile Signature	 	 
	 
	 	 	 	 	 	 	 	 
	STEPHEN H. HOLLIS, PRESIDENT

	 	 

	 	 
	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	LONNIE BROCK, CHIEF FINANCIAL OFFICER

	 	 

	 	 
	 	 

	 	 

Corporation authorizes and directs the designated Agents to act, as indicated, on Corporation’s
behalf to:

A. Borrow money or obtain other credit or financial accommodation from Financial Institution
on behalf of and in the name of Corporation on the terms agreed to with Financial
Institution. The designated agents may execute and endorse promissory notes, acceptances or
other evidences of indebtedness.

B. Grant a security interest, lien or other encumbrance to Financial Institution in any or
all real or personal property that Corporation now owns or may acquire in the future for the
payment or performance of all debts, liabilities and obligations of every type and
description owed now or in the future by Corporation to Financial Institution.

This power may only be exercised by STEPHEN H. HOLLIS and LONNIE BROCK and requires 2
authorized signatures.

C. Receive and acknowledge receipt for funds, whether payable to the order of Corporation or
an Agent, without additional certification as to the use of the proceeds.

This power may only be exercised by STEPHEN H. HOLLIS and LONNIE BROCK and requires 2
authorized signatures.

D. Periodically amend, restructure, renew, extend, modify, substitute or terminate any
agreements or arrangements with Financial Institution that relate to this Authorization.

This power may only be exercised by STEPHEN H. HOLLIS and LONNIE BROCK and requires 2
authorized signatures.

E. Execute other agreements that Financial Institution may require, and perform or cause to
be performed any further action necessary to carry out the purposes of this Authorization.

This power may only be exercised by STEPHEN H. HOLLIS and LONNIE BROCK and requires 2
authorized signatures.

 

 

	4.	 	INTERPRETATION. Whenever used, the singular includes the plural and the plural includes the
singular. The section headings are for convenience only and are not to be used to interpret
or define the terms of this Authorization.

SIGNATURES. By signing under seal, I certify and agree to the terms contained in this
Authorization on behalf of Corporation on August 1, 2006. I also acknowledge receipt of a copy of
this Authorization.

	 	 	AUTHORIZATION’S SIGNER:

	 	 	 	 	 	 	 	 	 	 
	 	 	DOUBLE EAGLE PETROLEUM CO.	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By
	 	 
	 	(Seal)
	 	 	 	 	STEPHEN H. HOLLIS, PRESIDENT	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By
	 	 
	 	(Seal)
	 	 	 	 	LONNIE BROCK, CHIEF FINANCIAL OFFICER	 	 	 

Notary or Acknowledgment Here (Optional)

 

 

Double Eagle Petroleum Co. #7200001800

Part of Modification Agreement dated 08/01/06

Exhibit “A”

CURRENT COVENANTS

	1.	 	Annual audited financial statements will be received by March 31st of each year. Quarterly
(10Q’s) will be provided within 45 days of each quarter end.
	 
	2.	 	A Current Ratio of 1:1 will be maintained and calculated as follows: (cash + accounts
receivable + availability on the line of credit shall be equal to or greater than current
liabilities). Should the borrower fall out of compliance on this covenant, a period of six
months will be allowed to remedy the situation before the loan is considered to be in default.
This ratio will be reviewed on a quarterly basis. The remedy period begins as of the quarter
end being reviewed.
	 
	3.	 	No unencumbered oil and gas properties are to be pledged as security without American
National Bank’s written consent.
	 
	4.	 	The existing line of credit, loan #7200001800 may be utilized by American National Bank to
advance on any demands from third party beneficiaries up to an aggregate amount of $250,000.
This requirement includes, but is not limited to, Letter of Credit #338 in the amount of
$32,000, Letter of Credit #356 in the amount of $12,379.25, and Letter of Credit #358 in the
amount of $21,389. Demand can be made by American National Bank at any time. Availability
against this line of credit will be reduced by the sum of all outstanding Letters of Credit.
	 
	5.	 	The engineering reports will govern the proposed lendable amount under a 65% margined loan to
value. (65% of the NPV 10% using pricing allowed by bank policy). Annual independent
engineering will be required on or before March 31st of each year.
	 
	6.	 	Standard loan agreements as set forth in the original loan agreement dated 01-03-2000 will be
ongoing (see attached Exhibit “AI”).

Double Eagle Petroleum Co.

	 	 	 	 	 	 	 
	 

Stephen H. Hollis, President

	 	 
	 	 

Lonnie Brock, CFO
	 	 

 

 

Page 1 of 2

Double Eagle Petroleum Co. #7200001800

Part of Modification Agreement dated 08/01/06

Exhibit “B”

NEW COVENANTS

	1.	 	The next Borrowing Base Review will be conducted 12/06 and June and December of every year
thereafter.
	 
	2.	 	The annual review will be conducted each June in conjunction with the Borrowing Base review.
	 
	3.	 	There will be an annual fee invoiced of .125% on the committed amount as of August 1st
 of each year.
	 
	4.	 	An unused commitment fee equal to .375% per annum of the difference between the average
Borrowing Base and the average outstanding balance will be invoiced quarterly. Example:
$10,000;000 average unused for three months x .375%/4 = an additional fee of $9,375 for the
quarter.
	 
	5.	 	A monthly summary of gas and oil production, operating expenses and budget variances as
prepared in-house will be provided to American National Bank within 45 days of each month end.
	 
	6.	 	The negative pledge agreement (#3 of Exhibit “A”) will include the assets of Eastern Washakie
Midstream, LLC.
	 
	7.	 	Hedging or forward sales in excess of 85% of the proved developed and producing oil and gas
production will not be allowed without American National Bank’s written consent.
	 
	8.	 	Stockholder’s equity will not drop below $22,500,000 as determined from quarterly financials.
A six month period from the end of the quarter will be provided to remedy this before it is
considered a breach of the covenant.
	 
	9.	 	At least 80% of the proved producing properties will continue to be held as security at
American National Bank as determined by annual reviews each June.
	 
	10.	 	The bank account officer will conduct a field inspection of the Cow Creek, Doty Mountain and
the Pipeline owned by Eastern Washakie Midstream, LLC (Rawlins and Baggs) areas prior to
funding this credit facility in excess of $9,000,000 and annually thereafter.
	 
	11.	 	Double Eagle Petroleum Co. will continue using American National Bank for their primary
operating accounts during the term of this commitment.

Initials ______

 

 

Page 2 of 2

Exhibit “B”

Double Eagle Petroleum Co. #7200001800

Part of Modification Agreement dated 08/01/06

	12.	 	Any assets sold in excess of $500,000 will require notification to American National Bank.
Asset sales in excess of $1,000,000 will require written consent from American National Bank
	 
	13.	 	Hedging services as provided by the Bank of Oklahoma will be available to Double Eagle
Petroleum Co. however this is not a requirement of this credit facility. General terms and
conditions of this “‘Hedging Service” are set forth in Exhibit “B1”. In the event Double
Eagle elects to exercise an agreement for these services with Bank of Oklahoma, the following
requirements will be made:

	 	a.	 	(Cross Default) A breach by the Borrower of any terms of any ISDA
Master Agreement or any schedules or annexes thereto (collectively the “ISDA
Agreement”) shall constitute a breach of the terms the Credit Documents (as defined in
the ISDA Agreement).
	 
	 	b.	 	(Early Termination) For avoidance of doubt and notwithstanding any other
provisions contained herein or contained in the ISDA Agreement, in addition to any
other remedies to which the Bank may be entitled, upon Termination (as defined in the
ISDA Agreement) of the ISDA Agreement, the Bank shall have the right to (i) immediately
liquidate all Specified Transactions between the Borrower and the Bank and (ii) setoff
against obligations owed by the Borrower to the Rank any amounts owed the Borrower by
the Bank.
	 
	 	c.	 	(Perfecting Collateral) Any obligation owed by the Borrower to the Bank
arising under the ISDA Agreement shall (i) be deemed to be an advance against the line
of credit established by the Credit Documents for the purpose of determining the amount
of available credit remaining upon which the Borrower may draw, if any; and, (ii) upon
notice to the Borrower by the Bank, shall also be deemed funds borrowed under the
Credit Documents.

Double Eagle Petroleum Co.

	 	 	 	 	 	 	 
	 

Stephen H. Hollis, President

	 	 
	 	 

Lonnie Brock, CFO
	 	 

 

 

Double Eagle Petroleum Co. #7200001800

Part of Modification Agreement dated 08/01/06

Exhibit “Bl”

HEDGING

1.0 Definitions:

     “Borrower and/or Bank of Oklahoma National Association (“BOK”) Hedging Obligations”
means Hedging Obligations incurred by Borrower to BOK in connection with any one or more hedging
transactions of Borrower arranged through BOK and as to which BOK is acting as the counterparty.

     “Extended Hedging Repayment Date” means, with respect to any Borrower/BOK Hedging
Obligation payable on any particular Hedging Settlement Date, such later date (if any such later
date is agreed to by the parties in the relevant confirmation or other document delivered pursuant
to or in connection with the TSDA Agreement) to which Borrower’s obligation to make payment or
delivery is extended.

     “Hedging Loan” has the meaning given such term in Section 1.1 below.

     “Hedging Obligations” means, with respect to any Person, all liabilities of such
Person under commodity hedge, commodity swap, exchange, collar or cap agreements, fixed price
agreements and all other agreements and arrangements designed to protect such Person against
changes in interest rates and currency exchange rates and fluctuations in the price of oil, gas,
hydrocarbons or other commodities.

     “Hedging Settlement Date” means, with respect to any Borrower/BOK Hedging Obligation,
the first date upon which, under the ISDA Agreement (and without consideration of any extensions
granted thereunder or in connection therewith), payment or delivery is due from Borrower to BOK for
any amount payable in respect of such Borrower/BOK Hedging Obligation.

     “ISDA Agreement” means an ISDA Master Agreement hereafter entered into between
Borrower and BOK governing hedging transactions arranged by BOK on behalf of Borrower and as to
which BOK is named as the counterparty.

     “Maturity Date (Hedging)” means the earlier of: (a) August 1, 2006, or (b) such date
on which the Hedging Loan is due and payable in full by reason of the occurrence of an Event of
Default, provided that, upon the request of Borrower, BOK may, in its sale discretion, extend said
date to a date not later than December 31, 2012 by giving written notice of such extension to
Borrower, but nothing contained in this Agreement, the Note or any other Loan Document shall be
deemed to commit or require BOK to grant any such extension.

     “Maximum Hedging Amount” means $10,000,000, as such amount may be increased or
decreased from time to time in the sole discretion of BOK; provided that nothing contained in this
Agreement, the ISDA Agreement or any other Loan Document shall be deemed to commit or require BOK
to grant any increase in such amount or to retrain from decreasing such amount.

 

 

     Section 1.1. The Hedging Loan. (a) Subject to the other terms and conditions of this
Agreement, BOK agrees to make short-ten extensions of credit to Borrower, each such credit
extension to be in an amount equal to the amount of the applicable Borrower/BOK Hedging Obligation
and for the time period from the applicable Hedging Settlement Date for that Borrower/BOK Hedging
Obligation to the Extended Hedging Repayment Date for that Borrower/BOK Hedging Obligation.

     (b) BOK shall not have any obligation to make any credit extension to Borrower in connection
with any Borrower/BOK Hedging Obligation: (1) which arises on or after the Maturity Date (Hedging),
(2) which relates to a hedging transaction not arranged through BOK or as to which BOK is not
acting as the counterparty, or (3) if, immediately after such credit extension, the aggregate
amount of all credit extensions. from BOK to Borrower in connection with Borrower/BOK Hedging
Obligations would exceed the Maximum Hedging Amount

     (c) Each credit extension from BOK to Borrower in connection with Borrower/BOK Hedging
Obligations pursuant to the terms of this Section 1.1 shall be entitled to all benefits of the
Security Documents and shall be subject to all terms of this Agreement and any and all other
applicable Loan Documents.

     (d) Any and all credit extensions from BOK to Borrower in connection with Borrower/BOK Hedging
Obligations pursuant to the terms of this Section 1.1 shall be herein collectively referred to as
the “Hedging Loan”.

     Section 1.2. The Note; ISDA Agreement; Interest. (a) Borrower’s obligation to repay
the Revolving Loan, with interest thereon, shall be evidenced by the Note. Borrower’s obligation
to repay the Hedging Loan, with interest, if any, thereon, shall be evidenced by the ISDA
Agreement. In the event any provision contained in the Note or the ISDA Agreement conflicts with
a provision contained in this Agreement, the provisions of this Agreement shall control.

     (b)(l) Except as otherwise provided in (3) below, interest on the Revolving Loan shall
accrue at a fluctuating annual rate equal to the Prime Rate plus the Prime Rate Spread. (2)
Except as otherwise provided in (3) below, interest on the Hedging Loan shall accrue as
described in the ISDA Agreement; provided that, as to any Borrower/BOK Hedging Obligation,
Borrower shall not be required to pay interest for the time period from the Hedging
Settlement Date for that Borrower/BOK Hedging Obligation to the Extended Hedging Repayment
Date for that Borrower/BOK Hedging Obligation. (3) From and after the occurrence, and during
the continuance, of any Event of Default hereunder, interest on the Loans shall accrue, from
the date of occurrence of the Event of Default until the date the Event of Default is cured,
at a fluctuating annual rate equal to the Prime Rate plus three percentage points per annum.

     (c) If BOK determines that market conditions so warrant, upon notice from BOK to Borrower,
Borrower shall pay to BOK a margin use fee in an amount of up to four percent per annum of the
margin BOK is required to post in connection with hedging transactions arranged by BOK for the
benefit of Borrower.

 

 

	 	 	 	 	 	 	 	 	 	 	 
	LOAN NUMBER

	 	LOAN NAME
	 	ACCT. NUMBER
	 	AGREEMENT DATE
	 	INITIALS
	 
	 	 	 	 	 	 	 	 	 	 
	7200001800

	 	Double Eagle
Petroleum and
Mining Co.
	 	 	0109	 	 	01/03/00
	 	CB
	 
	 	 	 	 	 	 	 	 	 	 
	NOTE AMOUNT

	 	INDEX (w/Margin)
	 	RATE
	 	MATURITY DATE
	 	LOAN PURPOSE
	 
	 	 	 	 	 	 	 	 	 	 
	$3,000,000.00

	 	Wall Street Journal

Prime
	 	 	8.5	%	 	01/03/01
	 	Commercial

COMMERCIAL LOAN AGREEMENT

Revolving Draw Loan

DATE AND PARTIES. The date of this Commercial Loan Agreement (Agreement) is January 3, 2000. The
parties and their addresses are as follows:

     LENDER:

AMERICAN NATIONAL BANK

201 East 2nd, Suite 25

Casper, Wyoming 82601

     BORROWER:

DOUBLE EAGLE PETROLEUM AND MINING CO.

a Wyoming Corporation

777 Overland Trail

Casper, Wyoming 82601

1. DEFINITIONS. For the purposes of this Agreement, the following terms have the following
meanings.

     A. Accounting Terms. In this Agreement, any accounting terms that are not specifically defined
will have their customary meanings under generally accepted accounting principles.

     B. Insiders. Insiders include those defined as insiders by the United States Bankruptcy Code,
as amended; or to the extent left undefined, include without limitation any officer, employee,
stockholder or member, director, partner, or any immediate family member of any of the foregoing,
or any person or entity which, directly or indirectly, controls, is controlled by or is under
common control with me.

     C. Loan. The Loan refers to this transaction generally, including obligations and duties
arising from the terms of all documents prepared or submitted for this transaction.

     D. Pronouns. The pronouns “I”, “me” and “my” refer to every Borrower signing this Agreement,
individually or together, and their heirs, successors and assigns. “You” and “your” refers to the
Loan’s lender, any participants or syndicators, or any person or company that acquires an interest
in the Loan and their successors and assigns.

     E. Property. Property is any property, real, personal or intangible, that secures my
performance of the obligations of this Loan.

 

 

2. MULTIPLE ADVANCES. In accordance with the terms of this Agreement and other Loan documents, you
will provide me with a revolving draw note and the maximum outstanding principal balance will not
exceed $3,000,000.00 (Principal).

3. ADDITIONAL TERMS ON ADVANCES. Further advances under said Promissory Note will be made upon the
request of the borrower(s) and approval of a Loan Officer of the Lender.

4. OBLIGATORY ADVANCES. You will make all Loan advances subject to this Agreement’s terms and
conditions.

5. REQUESTS FOR ADVANCES. I authorize you to honor a request for an advance, made in writing or by
telephone, from me or any persons I authorize to make these requests on my behalf until you receive
my written revocation of this authority). My requests for on advance must specify the advance’s
requested amount and date and be accompanied with ail agreements, documents, end instruments that
you normally require for the particular type of Loan.

Requests for an advance received by you from me or my authorized agent before 5:00 pm will be made
on any day that you are open for business, on the day of which the advance is requested, in the
amount of at least $100,00. Advances will be made no more frequently than daily.

My requests are a warranty that I am in compliance with all the Loan documents. I will indemnify
you and hold you harmless for your reliance on any request for advances that you reasonably believe
to be genuine. I will indemnify you and hold you harmless when the person making any request
represents that I authorized this person to request an advance even when this person is
unauthorized or this person’s signature is not genuine.

On my fulfillment of this Agreement’s terms and conditions, you will disburse the advance in any
manner as you and I agree. Your records will be conclusive evidence as to the amount of advances,
the Loan’s unpaid principal balances and the accrued interest. A check or other charge presented
against this account in excess of the balance may be treated by you, at your option, as a request
for an advance under this Agreement. Any payment by you of any check, share draft or other charge
may, at your option, constitute an advance on the Loan to me.

6. MATURITY DATE. I agree to fully repay the Loan by January 3, 2001.

7. CONDITIONS. I will satisfy all of the following conditions before you either issue any
promissory notes or make any advances under this Agreement.

          A. No Default. There has not been a default under this Agreement or other Loan documents nor
would a default result from making the Loan or any advance.

          B. Information. You have received all documents, information, certifications and warranties as
you may require, all properly executed, if appropriate, on forms acceptable to you. This includes,
but is not limited to, the documents and other items listed in the Loan Checklist Report which is
hereby incorporated by reference into this Agreement.

          C. Inspections. You have made all inspections that you consider necessary and are satisfied
with this inspection.

          D. Conditions and Covenants. I will have performed and complied with all conditions required
for an advance and all covenants in this Agreement and any other Loan documents.

 

 

          E. Warranties and Representations. The warranties and representations contained in this
Agreement are true and correct at the time of making the requested advance.

          F. Financial Statements. My most recent financial statements and other financial reports,
delivered to you, are current, complete, true and accurate in all material respects and fairly
represent my financial condition.

          G. Bankruptcy Proceedings. No proceeding under the United States Bankruptcy Code has been
commenced by or against me or any of my affiliates.

8. WARRANTIES AND REPRESENTATIONS. I make to you the following warranties and representations which
will continue as long as this Loan is in effect, except when this Agreement provides otherwise.

          A. Power. I am duly organized, and validly existing and in good standing in all jurisdictions
in which I operate. I have the power and authority to enter into this transaction and to carry on
my business or activity as it is now being conducted and, as applicable, am qualified to do so in
each jurisdiction in which I operate.

          B. Authority. The execution, delivery and performance of this Loan and the obligation
evidenced by the Note are within my powers, have been duly authorized, have received all necessary
governmental approval, will not violate any provision of law, or order of court or governmental
agency, and will not violate any agreement to which I am a party or to which I am or any of my
property is subject.

          C. Name and Place of Business. Other than previously disclosed in writing to you I have not
changed my name or principal place of business within the last 10 years and have not used any other
trade or fictitious name. Without your prior written consent, I do not and will not use any other
name and will preserve my existing name, trade names and franchises.

          D. Loan Purpose. This Loan is for Commercial purposes.

          E. No Other Liens. I own or lease all property that I need to conduct my business and
activities. I have good and marketable title to all property that I won or lease. All of my
Property is free and clear of all liens, security interests, encumbrances and other adverse claims
and interests, except those to you or those you consent to in writing.

          F. Compliance With Laws. I am not violating any laws, regulations rules, orders, judgments or
decrees applicable to me or my property, except for those which I am challenging in good faith
through proper proceedings after providing adequate reserves to fully pay the claim and its
challenge should I lose.

          G. Legal Dispute. There are no pending or threatened lawsuits, arbitrations or other
proceedings against me or my property that singly or together may materially and adversely affect
my property, operations, financial condition, or business.

          H. Adverse Agreements. I am not a party to, nor am I bound by, any agreement that is now or
is likely to become materially adverse to my business, property or operations.

          I. Other Claims. There are no outstanding claims or rights that would conflict with the
execution, delivery or performance by me of the terms and conditions of this Agreement or the other
Loan documents. No outstanding claims or rights exist that may result in a lien on the Property,
the Property’s proceeds and the proceeds of proceeds, except liens that were disclosed to and
agreed to by you in writing.

 

 

          J. Solvency. I am able to pay my debts as they mature, my assets exceed my liabilities and I
have sufficient capital for my current and planned business and other activities. I will not become
insolvent by the execution or performance of this Loan.

9. FINANCIAL STATEMENTS. I will prepare and maintain my financial records using consistently
applied generally accepted accounting principles then in effect. I will provide you with financial
information in a form that you accept and under the following terms.

          A. Certification. I represent and warrant that any financial statements that I provide you
fairly represents my financial condition for the stated periods, is current, complete, true and
accurate in and in all material respects, includes all of my direct or contingent liabilities and
there has been no material adverse change in my financial condition, operations or business since
the date the financial information was prepared.

          B. Frequency. Annually, I will provide to you my financial statements, tax returns, annual
internal audit reports or those prepared by independent accountants as soon as available or at
least within 75 days after the close of each of my fiscal years. Any annual financial statements
that I provide you will be compiled statements.

               (1) Interim Financial Reports. Each fiscal quarter, I will provide to you my financial
statements, internal audit reports or those prepared by independent accountants, tax
reports, statements of cash flow, budgets and forecasts, certificates and schedules of
Property as soon as available or at least within 60 days after the close of this business
period. Any interim financial statements that I provide you will be compiled statements.

          C. SEC Reports. I will provide you with true and correct copies of all reports, notices or
statements that I provide to the Securities and Exchange Commission, any securities exchange or my
stockholders, owners, or the holders of any material indebtedness as soon as available or at least
within 60 clays after issuance.

          D. Requested Information. I will provide you with any other information about my operations,
financial affairs and condition within 60 days after your request.

          E. Additional Financial Statements Term. During the term of the loan I will provide the
following information within the timeframes outlined: (1) Quarterly 10-Q statements shall be due to
the Lender within 60 days following each quarter end. (2) Annual 10-K statements shall be due to
the Lender within 75 days following fiscal year end.

10. COVENANTS. Until the Loan and all related debts, liabilities and obligations are paid and
discharged, I will comply with the following terms, unless you waive compliance in writing.

          A. Participation. I consent to you participating or syndicating the Loan and sharing any
information that you decide is necessary about me and the Loan with the other participants or
syndicators.

          B. Inspection. Upon reasonable notice I will permit you or your agents to enter any of my
premises and any location where my Property is located during regular business hours to do the
following.

               (1 ) You may inspect, audit, check, review and obtain copies from my books, records,
journals, orders, receipts, and any correspondence and other business related data,

               (2) You may discuss my affairs, finances and business with anyone who claims to be my
creditor.

 

 

               (3) You may inspect my Property, audit for the use and disposition of the Property’s
proceeds and proceeds of proceeds; or do whatever you decide is necessary to preserve and
protect the Property and your interest in the Property.

After prior notice to me, you may discuss my financial condition and business operations with my
independent accountants, if any, or my chief financial officer and I may be present during these
discussions. As long as the Loan is outstanding, I will direct all of my accountants and auditors
to permit you to examine my records in their possession and to make copies of these records. You
will use your best efforts to maintain the confidentiality of the information you or your agents
obtain, except you may provide your regulator, if any, with required Information about my financial
condition, operation and business or that of my parent, subsidiaries or affiliates.

          C. Business Requirements. I will preserve and maintain my present existence and good standing
in the jurisdiction where I am organized and all of my rights, privileges and franchises. I will do
all that is needed or required to continue my business or activities as presently conducted, by
obtaining licenses, permits and bonds everywhere I engage in business or activities or own, lease
or locate my property. I will obtain your prior written consent before I cease my business or
before I engage in any new line of business that is materially different from my present business.

          D. Compliance with Laws. I will not violate any laws. regulations, rules, orders, judgments or
decrees applicable to me or my Property, except for those which I challenge in good faith through
proper proceedings after providing adequate reserves to fully pay the claim and its appeal should I
lose. Laws include without limitation the Federal Fair Labor Standards Act requirements for
producing goods, the federal Employee Retirement income Security Act of 1974’s requirements for the
establishment, funding and management of qualified deferred compensation plans for employees,
health and safety laws, environmental laws, tax laws, licensing and permit laws. On your request, I
will provide you with written evidence that I have fully and timely paid my taxes, assessments and
other governmental charges levied or imposed on me, my income or profits and my property. Taxes
include without limitation sales taxes, use taxes, personal property taxes, documentary stamp
taxes, recordation taxes, franchise taxes, income taxes. withholding taxes, FICA taxes and
unemployment taxes. I will adequately provide for the payment of these taxes, assessments and other
charges that have accrued but are not yet due and payable.

          E. New Organizations. I will obtain your written consent and any necessary changes to the Loan
documents before I organize or participate in the organization of any entity, merge into or
consolidate with anyone, permit anyone else to merge into me, acquire all or substantially all of
the assets of anyone else or otherwise materially change my legal structure, management, ownership
or financial condition.

          F. Dealings with Insiders. I will not purchase, acquire or lease any property or services
from, or sell, provide or lease any property or services to, or permit any outstanding loans or
credit extensions to, or otherwise deal with, any Insiders except as required under contracts
existing at the time I applied for the Loan and approved by you or as this Agreement otherwise
permits. I will not change or breach these contracts existing at Loan application so as to cause an
acceleration of or an increase in any payments due.

          G. Other Debts. I will pay when due any and all other debts owed or guaranteed by me and will
faithfully perform, or comply with all the conditions and obligations imposed on me concerning the
debt or guaranty.

          H. Other liabilities. I will not incur, assume or permit any debt evidenced by notes, bonds or
similar obligations, except: debt in existence on the date of this Agreement and fully disclosed to
you; debt subordinated in payment to you on conditions and terms acceptable to you; accounts
payable incurred in the ordinary course of my business and paid under customary trade terms or
contested in good faith with reserves satisfactory to you.

 

 

          I. Notice to You. I will promptly notify you of any material change in my financial condition,
of the occurrence of a default under the terms of this Agreement, or a default by me under any
agreement between me and any third party which materially and adversely effects my property,
operations, financial condition or business.

          J. Certification of No Default. On your request, my chief financial officer or my independent
accountant will provide you with a written certification that to the best of their knowledge no
event of default exists under the terms of this Agreement or the other Loan documents, and that
there exists no other action, condition or event which with the giving of notice or lapse of time
or both would constitute a default. As requested, my chief financial officer or my independent
accountant will also provide you with computations demonstrating compliance with any financial
covenants and ratios contained in this Agreement. If an action, condition or event of default does
exist, the certificate must accurately and fully disclose the extent and nature of this action,
condition or event and state what must be done to correct it.

          K. Use of Loan Proceeds. I will not permit the loan proceeds to be used to purchase, carry,
reduce, or retire any loan incurred to purchase or carry any margin stock.

          L. Dispose of No Assets. Without your prior written consent or as the Loan documents permit, I
will not sell, lease, assign, transfer, dispose of or otherwise distribute all or substantially all
of my assets to any person other than in the ordinary course of business for the assets’
depreciated book value or more.

          M. No Other Liens. I will not create, permit or suffer any lien or encumbrance upon any of my
properties for or by anyone, other than you, except for nonconsensual liens imposed by law arising
out of the ordinary
course of business on obligations that are not overdue or which I am contesting in good faith
after making appropriate reserves; valid purchase money security interests on personal property; or
any other liens specifically agreed to by you in writing.

          N. Guaranties. I will not guaranty or become liable in any way as surety, endorser other than
as endorser of negotiable instruments in the ordinary course of business) or accommodation endorser
or otherwise for the debt or obligations of any other person or entity, except to you or as you
otherwise specifically agree in writing.

          O. No Default under Other Agreements. I will not allow to occur, or to continue unremedied,
any act, event or condition which constitutes a default, or which, with the passage of time or
giving of notice, or both, would constitute a default under any agreement, document, instrument or
undertaking to which I am a party or by which I may be bound.

          P. Legal Disputes. I will promptly notify you in writing of any threatened or pending
lawsuit, arbitration or other proceeding against me or any of my property, not identified in my
financial statements, or that singly or together without proceedings may materially and adversely
affect my property, operations, financial condition or business. I will use my best efforts to
bring about a favorable and speedy result of any of these lawsuits, arbitrations or other
proceedings.

          Q. Other Notices. I will immediately provide you with any information that may materially and
adversely affect my ability to perform this Agreement and of its anticipated effect.

          R. No Change in Capital. I will not release, redeem, retire, purchase or otherwise acquire,
directly or indirectly, any of my capital stock or other equity security or partnership interest,
or make any change in my capital structure, except to the extent required by any agreements signed
prior to this Agreement and disclosed to you or with your prior written consent.

 

 

          S. Loan Obligations. I will make full and timely payment of all principal and interest
obligations, and comply with the other terms and agreements contained in this Agreement and in the
other Loan documents.

          T. Insurance. I will obtain and maintain insurance with insurers, in amounts and coverages
that are acceptable to you and customary with industry practice. This may include without
limitation insurance policies for public liability, fire, hazard and extended risk, workers
compensation, and, at your request, business interruption and/or rent loss insurance. At your
request, I will deliver to you certified copies of all of these insurance policies, binders or
certificates. I will obtain and maintain a mortgagee or loss payee endorsement for you when these
endorsements are available, I will immediately notify you of cancellation or termination of
insurance, I will require all insurance policies to provide you with at least 10 days prior written
notice to you of cancellation or modification. I consent to you using or disclosing information
relative to any contract of insurance required by the Loan for the purpose of replacing this
insurance. I also authorize my insurer and you to exchange all relevant information related to any
contract of insurance required by any document executed as part of this Loan.

          U. Property Maintenance. I will keep all tangible and intangible property that I consider
necessary or useful in my business in good working condition by making all needed repairs,
replacements and improvements and by making all rental, lease or other payments due on this
property,

          V. Property Loss. I will immediately notify you, and the insurance company when appropriate,
of any material casualty, loss or depreciation to the Property or to my other property that affects
my business.

          W. Additional Covenants. (1) Borrower will provide to lender semi-annual production reports
(as of July 1st and January 1st; due to Lender thirty (30) days following) on the monthly
production of the oil fields. Included with the production reports shall be a listing of the
monthly lease operating expenses associated with production. The production reports will be
completed by a petroleum engineer that meets the lender’s requirements, as determined by Lender,
for a qualified evaluation engineer. (2) During the term of this Promissory Note Borrower will
maintain a minimum Debt to Worth ratio of 1:1X. (3) During the term of this
Promissory Note the maximum loan amount will not exceed the lesser of Three Million Dollars
($3,000,000), or the Borrowing Base. The initial commitment and Borrowing Base amount is One
Million Four Hundred Thousand Dollars ($1,400,000,00). Committment is defined as the lesser of the
face amount of the Promissory Note or the Borrowing Base as determined by the Lender from time to
time. The Lender, in accordance with its normal credit approval process, must approve increases in
the Borrowing Base Amount before the Borrower may use any increase In the Commitment Amount. (4)
At the time Lender and Borrower agree to the release of certain wells, Borrower will provide Lender
with full legal descriptions specific to the 1/4 section for release purposes.

11. DEFAULT. I will be in default if anyone or more of the following occur.

          A. Payments. I fail to make a payment in full when due.

          B. Insolvency or Bankruptcy. I make an assignment for the benefit of creditors or become
insolvent, either because my liabilities exceed my assets or I am unable to pay my debts as they
become due; or I petition for protection under federal, state or local bankruptcy, insolvency or
debtor relief laws, or am the subject of a petition or action under such laws and fail to have the
petition or action dismissed within a reasonable period of time not to exceed 60 days.

          C. Business Termination, I merge, dissolve, reorganize, end my business or existence, or a
partner or majority stockholder dies or is declared incompetent.

 

 

          D. Failure of Condition or Term. I fail to pay, or perform any condition or to keep any
promise or covenant on this or any debt or agreement I have with you.

          E. Misrepresentation. I make any verbal or written statement or provide any financial
information that is untrue, inaccurate, or conceals a material fact at the time it is made or
provided.

          F. Judgment. I fail to pay or discharge any judgment against me for the payment of money,
unless, within 10 days of its entry, the judgment is satisfied or a stay of enforcement is granted
pending an appeal.

          G. Forfeiture. The Property is used in a manner or for a purpose which threatens confiscation
by a legal authority.

          H. Name Change. I change my name or assume an additional name without notifying you before
making such a change.

          I. Property Transfer. I transfer all or a substantial part of my money or property.

          J. Material Change. Without first notifying you, there is a material change in my business,
including ownership, management and financial conditions.

          K. Property Loss. The Property is damaged, destroyed or stolen.

          L. Additional Security or Guaranty. I fail to provide any additional security or guaranty that
you may require.

          M. Insurance. I fail to keep the Property insured, if required.

          N. Other Instruments. A default occurs under the terms of any instrument evidencing or
pertaining to the Loan,

          0. Insecurity. Anything else happens that causes you to reasonably believe that you will have
difficulty collecting the amount I owe you or significantly impairs the value of the Property.

12. REMEDIES. After I default, and after you give any legally required notice and opportunity to
cure the default, you may at your option do anyone or more of the following.

          A. Acceleration. You may make all or any part of the amount owing by the terms of the Loan
immediately due.

          B. Additional Security. You may demand security, additional security, or additional parties to
be obligated to pay the Loan.

          C. Sources. You may use any and all remedies you have under state or federal law or in any
instrument securing the Loan.

          D. Insurance Benefits. You may make a claim for any and all insurance benefits or refunds that
may be available on my default.

          E. Payments Made On My Behalf. Amounts advanced on my behalf will be immediately due and may
be added to the balance owing under the terms of the Loan, and accrue interest at the highest
post-maturity interest rate.

 

 

          F. Termination. You may terminate my right to obtain advances and may refuse to make any
further extensions of credit.

          G. Attachment. You may attach or garnish my wages or earnings.

          H. Set-Off. You may use the right of set-off. This means you may set-off any amount due and
payable under the terms of the Loan against any right I have to
receive money from you. My right to
receive money from you includes any deposit or share account balance I have with you; any money
owed to me on an item presented to you or in your possession for collection or exchange; and any
repurchase agreement or other non-deposit obligation. “Any amount due and payable under the terms
of the Loan” means the total amount to which you are entitled to demand payment under the terms of
the Loan at the time you set-off.

          Subject to any other written contract, if my right to receive money from you is also owned by
someone who has not agreed to pay the Loan, your right of set-off will be limited to my
proportionate interest in the obligation. In the absence of reasonable proof of net contributions,
my proportionate interest equals the amount of such obligation divided equally by all parties
having present rights to receive such money.

          Your right of set-off does not apply to an account or other obligation where my rights arise
only in a representative capacity. It also does not apply to any Individual Retirement Account or
other tax-deferred retirement account.

          You will not be liable for the dishonor of any check or share draft when the dishonor occurs
because you set-off against any of my accounts. I agree to hold you harmless from any such claims
arising as a result of your exercise of your right of set-off.

          I. Waiver. Except as otherwise required by law, by choosing anyone or more of these remedies
you do not give up your right to use any other remedy. You do not waive a default if you choose
not to use a remedy. By electing not to use any remedy, you do not waive your right to later
consider the event a default and to use any remedies if the default continues or occurs again.

13. COLLECTION EXPENSES AND ATTORNEYS’ FEES. On or after Default, to the extent permitted by law, I
agree to pay all expenses of collection, enforcement or protection of your rights and remedies
under this Agreement. Expenses include, but are not limited to, attorneys’ fees, court costs and
other legal expenses. These expenses are due and payable immediately. If not paid immediately,
these expenses will bear interest from the date of payment until paid in full at the highest
interest rate in effect as provided for in the terms of this Loan. All fees and expenses will be
secured by the Property I have granted to you, if any. To the extent permitted by the
United States Bankruptcy Code, I agree to pay the reasonable attorneys’ fees you incur to collect
this debt as awarded by any court exercising jurisdiction under the Bankruptcy Code.

14. APPLICABLE LAW. This Agreement is governed by the laws of Wyoming, the United States of
America and to the extent required, by the laws of the jurisdiction where the Property is located.
In the event of a dispute, the exclusive forum, venue and place of jurisdiction will be in Wyoming,
unless otherwise required by law.

15. JOINT AND INDIVIDUAL LIABILITY AND SUCCESSORS. My obligation to pay this Loan is independent of
the obligation of any other person who has also agreed to pay it. You may sue me alone, or anyone
else who is obligated on this Loan, or any number of us together, to collect this Loan. Extending
this Loan or new obligations under this Loan, will not affect my duty under this Loan and I will
still be
obligated to pay this Loan. The duties and benefits of this Loan will bind and benefit
the successors and assigns of you and me.

 

 

16. AMENDMENT, INTEGRATION AND SEVERABILITY. This Agreement may not be amended or modified by oral
agreement. No amendment or modification of this Agreement is effective unless made in writing and
executed by you and me. This Agreement is the complete and final expression of the understanding
between you and me. If any provision of this Agreement is unenforceable, then the unenforceable
provision will be severed and the remaining provisions will still be enforceable.

17.
INTERPRETATION. Whenever used, the singular includes the plural and the plural includes the
singular. The section headings are for convenience only and are not be used to interpret or define
the terms of this Agreement.

18. NOTICE, FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Unless otherwise required by law, any
notice will be given by delivering it or mailing it by first class mail to the appropriate party’s
address listed in the DATE AND PARTIES section, or to any other address designated in writing.
Notice to one party will be deemed to be notice to all parties. I will inform you in writing of
any change in my name, address or other application information. I will provide you any financial
statement or information you request. All financial statements and information I give you will be
correct and complete. I agree to sign, deliver, and file any additional documents or
certifications that you may consider necessary to perfect, continue, and preserve my obligations
under this Loan and to confirm you lien status on any property. Time is of the essence.

19. SIGNATURES. By signing, I agree to the terms contained in this Agreement. I also acknowledge
receipt of a copy of this Agreement.

 

 

	 	 	 	 	 
	BORROWER:	 	 
	 
	 	 	 	 
	 

	 	Double Eagle Petroleum and Mining Co.	 	 
	 
	 	 	 	 
	 

	 	 

Stephen H. Hollis, President
	 	 
	 
	 	 	 	 
	 

	 	 

D. Steven Degenfelder, Vice President
	 	 
	 
	 	 	 	 
	LENDER:	 	 
	 
	 	 	 	 
	 

	 	American National Bank	 	 
	 
	 	 	 	 
	 

	 	 

Cary Brus, Vice President

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