Consulting Agreement - Ivanhoe Energy inc. and Continental Energy Ltd.
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement") is entered into this 15th day of
November 2000, by and between IVANHOE ENERGY INC., a company organized under the
laws of the Yukon, Canada, whose address is 200 Burrard Street, 9th Floor,
Vancouver, BC V6C 3L6 ("Company"), and CONTINENTAL ENERGY LIMITED, Cayman
Islands company, with its registered address at Caledonian House, P. 0. Box 265,
George Town, Grand Cayman Islands ("CONSULTANT").
The Company and the Consultant are sometimes hereinafter referred to
individually as a "PARTY" and collectively as the "PARTIES". The term "Company"
shall also be construed, as the context may require, to include any Affiliate of
the Company in whose name the Project Agreement is obtained. For the purposes of
this Agreement a Person is deemed to be an Affiliate of the Company if that
Person is an Associate of the Company, as herein defined, or if an Associate or
the Company owns a direct or indirect interest in that Person.
WHEREAS:
(A) Company is pursuing a project (herein called the "PROJECT"), either solely
or jointly with others, involving all or any of the following: (i) the
drilling for and the development and production of natural gas from an
offshore natural gas field ("GAS FIELD") in the State of Qatar in the
Middle East ("QATAR"), including all related facilities and services (ii)
the delivery of the natural gas and associated liquids by pipeline from the
Gas Field to receiving and treatment facilities onshore, (iii) the
construction of a natural gas liquids ("NGL") plant onshore, (iv) the
construction of a plant to convert natural gas to ultra-clean liquid fuel
and other products utilizing Syntroleum Corporation's state-of-the-art
Gas-to-Liquids ("GTL") technology, (v) extensions and expansions of the
activities described in (i) through (iv) above and (vi) related or
associated facilities including power generation and desalinization plants.
(B) Company is seeking to obtain an agreement or agreements with the Government
of Qatar ("GOVERNMENT") and/or the Qatar General Petroleum Corporation
("QGPC") and/or other Government agency relating to the Project or any part
thereof (herein individually or collectively called, as the context
requires, the "PROJECT AGREEMENT");
(C) The Company has highly experienced staff with intensive experience in
international oil and gas exploration, development and production, and
international construction projects; and
(D) The management of the Company has previously conducted business with the
principals of the Consultant, and know that Consultant, under their
guidance, and in light of their specific knowledge and information
regarding the infrastructure and methods of operating in Qatar, is capable
to advise and assist the Company, and provide specific technical services,
for the Project and with respect to obtaining and implementing the Project
Agreement; and
(E) The Consultant is a company dedicated to general construction, mechanical
and electrical works, project management, consultancy and procurement, as
well as other disciplines and technical services complementary to the
expertise of the Company, and is willing to advise and assist the Company
as contemplated hereby;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the Parties hereby agree as follows:
1. THE CONSULTANT'S OBLIGATIONS
1.1 The Consultant shall use its reasonable endeavours to provide, in relation
to the Project and in connection with obtaining the Project Agreement, the
following services. The services specified in Sections 1.1.1 and 1.1.2 are
herein collectively called the "SERVICES".
E-7
<PAGE> 2
1.1.1 SERVICES IN OBTAINING THE PROJECT AGREEMENT:
- Assist the Company in communicating to the Government the Company's
experience, capabilities and technical and commercial proposals relative
to, the Project; and
- Advise and assist in communicating to the Government and QGPC,
definition and clarification of the Project, technical and commercial
analyses, and bidding activities required in obtaining the Project
Agreement, including (i) identifying and aiding the Company in liaising
with key departments, agencies within the Government and its officials,
personnel, ministries, departments and municipalities and (ii) analysis
and interpretation of public affairs and Governmental policies in Qatar
in the areas of oil, gas, power, and water projects, foreign investment,
and taxation; and
- Advise about general business contacts, and competitor activities in
Qatar; and
- Such other Services as reasonably requested by the Company and that
Consultant is reasonably able to provide in order to assist in obtaining
the Project Agreement.
1.1.2 ONGOING SERVICES IN CONNECTION WITH THE PROJECT:
During the term of this Agreement, upon the Company's reasonable request,
the Consultant shall use its reasonable endeavours to provide the following
ongoing services to the Company:
- Provide temporary office space, telephone and communication services and
secretarial assistance, for the Company in Qatar before the Company
establishes its own offices and facilities in Qatar; and
- Assist the Company to find satisfactory office space and related
services in Qatar; and
- Advise in maintaining compliance of the Company with contract terms and
conditions, assistance with resolution of contract interpretation,
disputes, modifications due to changes in scope of work, and other
contract administration activities.
- Assist the Company in locating competent and competitive contractors and
suppliers of specialty services, equipment, materials and supplies in
Qatar, in connection with implementing the Project; and
- Such other Services as requested by the Company and that Consultant is
reasonably able to provide in order to assist in and further the
Company's business and activities with respect to the Project in Qatar.
1.2 The Company also hereby grants to Consultant or such company as may be
nominated for the purpose with the approval of the Company, or will use its
reasonable efforts to procure that the Consultant or such nominated
company, is granted the right to tender to provide to the Company the
following services in connection with the performance by the Company of its
obligations under the Project Agreement:
1.2.1 Construction and industrial civil engineering;
1.2.2 Maintenance and refurbishing of buildings;
1.2.3 Provision of inspectors and N.D.T. inspection;
1.2.4 Coded welding and repair;
1.2.5 Mechanical and electrical works;
1.2.6 Marine construction, subsea engineering -- onshore and offshore;
1.2.7 Sand / grit blasting, painting;
1.2.8 Scaffolding;
1.2.9 Instrumentation services;
E-8
<PAGE> 3
1.2.10 Fabrication works;
1.2.11 Provision of commissioning and precommissioning engineers and
manpower; and
1.2.12 Provision of materials administration services; coding, inventory
control, procurement, stock review, systems analysis.
1.3 The Consultant shall perform the Services, at all times, with due diligence
and in compliance with all applicable laws and regulations in Qatar.
1.4 The Consultant's advice to the Company in respect of the Services shall be
given orally or in writing. Consultant shall report to Mr. E. L. Daniel, or
to such other individual as the Company may hereafter specify by written
notice to Consultant.
1.5 The Company agrees that the Consultant may retain appropriate Persons to
assist it in providing the Services (subject to the consent of the Company
in each case, which consent shall not be unreasonably withheld). The term
"PERSON" as used in this Agreement, means a corporation, company,
partnership, or business association.
1.6 During the term of this Agreement, Consultant shall do no act which in
relation to the Project conflicts with the business of the Company or which
would, in any way, jeopardize the interests of the Company in relation to
the Project.
2. COMPENSATION
2.1 In consideration for the provision of the Services by the Consultant to the
Company, the Company shall pay to the Consultant the compensation set out in
this Section 2 ("COMPENSATION"). It is clearly agreed that compensation to
Consultant by the Company will be on a successful efforts basis, viz.,
compensation will be paid only for portions of the Project for which the
Company signs the Project Agreement. For the purposes of this Agreement, a
Project Agreement must be effective by its terms in accordance with the laws
of Qatar.
2.1.1 The Company shall pay to Consultant Compensation (herein "CAPITAL
INVESTMENTS COMPENSATION") in an amount in Dollars of the United
States of America (herein "DOLLARS" or "$") equal to two and
one-half percent (2.5%) of the Project Investments. The "PROJECT
INVESTMENTS" mean the capital amount in Dollars that are actually
spent for each phase or stage, or part thereof, of the Project. The
Capital Investments Compensation shall be paid every calendar
quarter commencing when the first capital investments are made in
the Project, after the effective date of the Project Agreement, and
shall continue thereafter as further investments are made; provided,
however, that the Capital Investments Compensation paid to
Consultant shall not exceed Six Million Dollars ($6,000,000.00) per
year after commencement of their payment, with any excess being
carried forward to subsequent years until fully paid.
2.1.2 Consultant shall also be entitled to receive as Compensation ("NCF
COMPENSATION") in an amount in Dollars equal to two and one-half
percent (2.5%) of the Project Net Cash Flow of the Company and of
any transferee, assignee or successor to any of the interest in the
Project or the Project Agreement or the production or revenue
therefrom. "PROJECT NET CASH FLOW" means the net cash flow of the
Company and of any transferee, assignee or successor to any of the
interest in the Project or the Project Agreement or the production
or revenue therefrom, determined by deducting (i) the sum of all
costs and items making up the Syntroleum fees (Columns 3 and 3-A),
Capital Investment Compensation paid to Consultant (Column 5)
Project capital (Column 4) operating expenses (Column 6) natural gas
costs (Column 7) gas royalties (Column 8) signature bonuses for the
Project Agreement (Column 9) finance costs (Column 10) and debt
service costs (Column 11), from (ii) the sum of the Company's profit
share and that of any transferee, assignee or successor to any of
the interest in the Project or the Project Agreement or the
production or revenue therefrom.
E-9
<PAGE> 4
(Column 1) plus cost recovery (Column 2) under the Project Agreement. An example
of the Project Net Cash Flow calculation is shown for illustration purposes on
the attached Exhibit "A" and is the amount shown in the column entitled
"Contract Project NCF". The above Column references are to Exhibit "A".
2.1.2.1 The NCF Compensation does not include any right, title or
interest in and to any of the personal property, fixtures or equipment
of or in the Project; the NCF Compensation is exclusively an interest
in Project Net Cash Flow.
2.1.2.2 The Company shall maintain a net cash flow account for the
Project, (the "NET CASH FLOW ACCOUNT") in accordance with the terms of
this Agreement and good accounting practices; it being the intent that
all expenses and income from the Project be charged and credited to
only one net cash flow account covering the Project. The books of
account and records relating to the Net Cash Flow Account shall at all
reasonable times be open for examination, inspection, copying and audit
by Consultant and Consultant's representatives at Consultant's expense.
The Net Cash Flow Account shall be and remain a non-interest bearing
account and is maintained for the sole purpose of accounting for the
NCF Compensation.
2.1.2.3 NCF Compensation shall become payable when the cumulative
Project Net Cash Flow for any calendar quarter, after recovery of
cumulative costs as illustrated in Exhibit "A", becomes positive. NCF
Compensation shall be paid to Consultant on a calendar quarter basis
within thirty (30) days of the end of such quarter. Within thirty (30)
days of the end of each quarter, Company shall furnish a detailed
accounting to Consultant showing all charges and credits made to the
account for such quarter, together with a cumulative summary of credits
and charges made to the account from the effective date of this
Agreement. Without prejudice to any other rights or remedies of
Consultant, overdue payments of Compensation shall bear interest at the
annual rate of three percent (3%) above the base rate for the time
being of Barclays Bank Plc in England (or its successor bank), until
payment.
2.1.2.4 After commencement of payments of NCF Compensation, should
calculation of Project Net Cash Flow for any quarter, as illustrated in
Exhibit "A", become negative, Consultant shall not be entitled to any
NCF Compensation for such quarter. Any deficit for any such quarter
shall be accrued and carried forward and deducted from revenues during
the subsequent quarters until such deficits have been recouped from
Project Net Cash Flow and such deficits shall be taken into
consideration in determining the Project Net Cash Flow from which
Consultant shall be entitled to receive NCF Compensation.
2.2 Any cash payment of Compensation shall be paid to the Consultant and only in
the name of Consultant by direct wire transfer to the Consultant's bank
account which the Consultant shall notify to the Company from time to time.
The Company may rely upon those directions until it receives an affirmative
request by the Consultant to modify those payment directions. Calculation of
amounts in other than Dollars shall be translated into Dollars at the mid
buying and selling exchange rates against Dollars at the close of business
prior to the date of the transaction involving the payment of the other
currencies. The Company shall not be responsible for any transfer or
exchange costs if the Consultant requests payment in a currency other than
Dollars.
2.3 The Consultant shall be responsible for ascertainment and payment of any and
all taxes, fees, duties, imposts, and other charges imposed, by whatever
nation, state, local, or other jurisdiction, whether personal or otherwise,
on the Consultant, its shareholders, directors, officers, employees,
representatives, agents or subcontractors, in respect of Compensation or any
other amounts paid to Consultant by the Company under this Agreement.
2.4 Should any law, decree, or legal requirement, of whatever jurisdiction,
require withholding of tax from payments by the Company to the Consultant
hereunder, the Company shall comply with such requirement to withhold and
shall remit such withholding to the proper tax authorities.
E-10
<PAGE> 5
3. ASSIGNMENT
3.1 The Consultant may assign the right to receive part or all of the payments
to be received from the Company hereunder to (i) any Person that is
controlled by the same shareholders who own the Consultant or (ii) any other
Person with the consent of Company, which consent shall not be unreasonably
withheld. In connection with any assignment by Consultant, Consultant shall
provide such information about the proposed assignee as the Company may
reasonably request.
3.2 The Company may, at any time upon prior written notice to Consultant, assign
its rights or obligations under this Agreement to an Associate (as defined
below); provided-that, prior to such assignment, the Associate enters into
an agreement with Parties in which the Associate assumes the rights and
obligations being assigned; and provided, further, that the Company shall,
unless otherwise agreed in writing by the Parties, remain jointly and
severally liable with such assignee Associate for any payments required to
be made and any other obligations to Consultant under this Agreement.
3.3 For the purposes of this Agreement:
(a) a company or entity shall be deemed to be an "Associate" of another
company or entity if (i) that other company or entity directly or
indirectly controls or is controlled by the first mentioned company
or entity or (ii) the first mentioned company or entity and that
other company or entity are directly or indirectly controlled by the
same company or entity;
(b) "CONTROL" shall mean (i) ownership or control (whether directly or
indirectly) of twenty-five per cent (25%) or more of the equity
share capital, voting capital or voting rights, (ii) power to
control the composition of, or power to appoint, twenty-five per
cent (25%) or more of the members of, the Board of Directors, Board
of Management, or other equivalent or analogous body, or (iii)
entitlement to receive twenty-five per cent (25%) or more of any
(but not necessarily every) income or capital distribution made by
such company or entity (either on liquidation, winding-up, or
dissolution of such company or entity, or otherwise).
3.4.1 If the Company or an Affiliate of the Company has an interest in the
Project Agreement or the Project or the production or revenues
therefrom, and sells, transfers or otherwise disposes of such
interest, either to a third party or to an Affiliate of the Company
("INTEREST TRANSFEREE"), the Company shall procure that prior to
such sale, transfer or disposition, the Interest Transferee enters
into an agreement with the Parties wherein it assumes such payment
and all other obligations to Consultant under this Agreement with
respect to such interest; provided, further, that unless otherwise
agreed by the Parties, the Company shall remain jointly and
severally liable with such Interest Transferee for any payments
required to be made and any other obligations to Consultant under
this Agreement.
3.4.2 If an Affiliate of the Company enters into the Project Agreement,
the Company shall (i) procure that such Affiliate prior thereto
enters into an agreement with the Parties whereby it assumes the
obligations to Consultant pursuant to this Agreement, (ii) remain
liable for payments of Compensation due to Consultant under this
Agreement and (iii) guarantees that such Affiliate will fulfill and
perform the liabilities and obligations of the Company to Consultant
as provided in this Agreement.
4. TERM: TERMINATION
4.1 This Agreement is effective commencing on the date hereof, and unless
otherwise agreed by the Parties, shall continue for so long as the Company,
or any Affiliate of the Company, (or any original or subsequent transferee,
assignee or successor to any interest of the Company or any Affiliate in the
Project Agreement or the Project or the production therefrom or the revenues
therefrom) is a
E-11
<PAGE> 6
party to or has an interest in the Project Agreement or the Project or in the
production or revenue therefrom. Notwithstanding the foregoing, this Agreement
may be terminated as follows:
4.1.1 By the Company in its absolute discretion by notice to Consultant at
any time prior to the execution of the first of any agreement such
as is described in Recital B above being within the definition of
the Project Agreement, if the Company irrevocably decides not to
pursue the Project and withdraws from the award of the Project
Agreement for itself or any Affiliate, and no Affiliate of the
Company pursues such award for itself or any other Affiliate of the
Company. In the event of such termination, neither Party shall have
any liability to the other in respect of this Agreement or the
attempts to obtain the Project Agreement; provided, however, that
notwithstanding the giving of such notice of withdrawal by the
Company, if the Project Agreement is notice of withdrawal by the
Company, if the Project Agreement is nevertheless entered into by
the Company and/or an Affiliate of the Company, such notice shall be
void and of no effect.
4.1.2 By the Consultant in its absolute discretion by notice to the
Company at any time prior to the execution by the Company of the
Project Agreement, if QGPC enters into an agreement relating to the
Project with any other Person other than the Company or an Affiliate
of the Company; provided, however, that notwithstanding the giving
of such notice of termination by Consultant, if the Project
Agreement is executed by the Company or an Affiliate of the Company,
in which case Consultant's notice shall be void and of no effect.
4.1.3 By the Company by notice to Consultant if the Consultant breaches
the terms and conditions of Section 5.5, and termination for that
reason shall relieve the Company of any outstanding and future
obligations to the Consultant under this Agreement.
4.1.4 For the avoidance of doubt, in the event that the Company or
Affiliate of the Company that has an interest in the Project
Agreement, the Project or the production or revenues therefrom, that
pursuant to Section 3.4.1, sells, transfers, assigns or other
disposes of such interest, this shall not affect entitlement of
Consultant to Compensation as provided in this Agreement from the
Company or such Affiliate. Furthermore, the liquidation, insolvency
or dissolution of the Company or any Associate of the Company, shall
not terminate the obligation to pay Compensation to Consultant.
5. INDEPENDENT CONTRACTOR: RELATIONSHIP OF THE PARTIES
5.1 In the performance of Services hereunder, Consultant shall be and conduct
itself always as an independent contractor, and none of the Consultant's
directors, officers, employees, representatives or agents shall be
considered an employee, agent or servant of the Company. The Consultants
performance of the Services hereunder will be at its own risk and none of
its directors, officers, employees, representatives or agents shall be
entitled to workers compensation or other similar benefits of employment or
insurance protection provided by the Company for its employees. The Company
is interested only in Consultants performance of the Services.
5.2 No director, officer, employee, representative or agent of the Consultant,
nor their respective spouses, heirs, executors, administrators or assigns,
shall claim nor seek to obtain from the Company any benefits or sums with
respect to the illness, disability or death of such director, officer,
employee, representative or agent of the Consultant, whether arising or
occurring during or after the termination or expiration of this Agreement.
The Consultant agrees to indemnify and save the Company harmless from any
and all such claims.
5.3 Neither Party shall have the authority to bind the other Party, or to sign
any instrument or document on its behalf. Likewise, neither Party is
empowered to make commitments for or on behalf of the other Party.
5.4 The Consultant and the Company will act in good faith towards one another in
the conduct of this Agreement.
E-12
<PAGE> 7
5.5 Consultant represents and warrants that neither it nor any of its directors
or officers nor, with its actual knowledge or express or implied consent,
any of its employees, agents or representatives or any person acting on its
behalf, will, except as permitted under the Corruption of Foreign Public
Officials Act of Canada (the "Act"), in order to obtain or retain an
advantage in the course of business, directly or indirectly give, offer to
give or offer a loan, reward, advantage or benefit of any kind to a foreign
public official (a) as consideration for an act or omission by the official
in connection with the performance of the official's duties or functions or
(b) to induce the official to use his or her position to influence any acts
or decisions of the foreign state or public international organization for
which the official performs duties or functions.
5.6 Consultant agrees to cooperate with the Company to provide information
reasonably requested by the Company about Consultant, including but not
limited to, (I) Consultants business history and (ii) the shareholders,
directors and officers of Consultant.
6. CONFLICT OF INTEREST
The Consultant represents and warrants to the Company that its execution of,
and the performance of its obligations under this Agreement does not create
or result in any conflict of interest which the Consultant may have with any
third party in Qatar. However, the Consultant may provide similar services
to third parties that do not prejudice the carrying out of the Services to
the Company. The Consultant shall notify the Company of any possible
conflict of interest, and shall not create nor permit to exist any such
conflict of interest during the term of this Agreement.
7. CONFIDENTIALITY
7.1 Each Party shall keep strictly confidential and shall not disclose any
information concerning this Agreement or the confidential business,
operations, or affairs of the other Party, regardless of how or when such
information is acquired by each Party, except:
(a) to an Associate of the Company;
(b) to a proposed assignee of the Consultant pursuant to Section 3.1;
(c) upon mutual agreement of the Parties to the disclosure of such
information;
(d) to any bank, financial institution or any other Person providing
financing or financial assistance to the Company for the Project;
(e) to any governmental authority or entity of competent jurisdiction or
any stock exchange when required by law or regulations including,
without limitation, any regulation or rule of any regulatory entity,
or securities commission, on which the securities of any Party or an
Associate of a Party are or are to be listed;
(f) as may be required pursuant to Section 8 in relation to an
arbitration or to a court in respect of a dispute or enforcement of
this Agreement;
(g) to legal counsel or independent accountants representing a Party.
7.2 Prior to making an authorized disclosure pursuant to Sections 7.1 (b), (c)
or (d), the Party seeking to disclose such information shall obtain a
written commitment from the Person to which such confidential information is
intended to be disclosed, to the effect that such Person shall treat such
information as confidential. A Party shall be liable for disclosures
contrary to the terms of this Agreement by an Associate to which a Party has
disclosed information that is covered by the confidentiality obligation
hereunder. However, if a Party, or its Associate, is required to disclose
such information to a governmental authority of competent jurisdiction, then
the Party may make such disclosure without having obtained a written
confidentiality commitment from such governmental authority.
E-13
<PAGE> 8
7.3 The confidentiality obligations set forth in this Section 7 shall be
continuing and shall survive the termination or expiration of this
Agreement without limit in time.
8. LIABILITY
8.1 Neither Party shall be liable to the other Party for any claims for,
indirect or consequential damages arising out of or in connection with the
performance or non-performance of this Agreement, including but not limited
to claims for lost profit or business opportunities.
9. FORCE MAJEURE
If either the Consultant or the Company is rendered unable to perform an
obligation required of it hereunder, in whole or in part, due to force
majeure, then upon notice to the other, such Party's performance of such
obligation shall be suspended for the period that it is unable to perform
the obligation. For purposes of this Agreement, "force majeure" shall mean
any act or event beyond the reasonable control of the Party affected,
including, not limited to, a strike, labour dispute, lockout, fire, flood,
tornado, hurricane, earthquake, explosion, act of God or the public enemy,
war (declared or undeclared), blockage, governmental regulation,
governmental treaty, order or decree, insurrections, riots, terrorism, and
other civil disturbances, or epidemics. The performance affected by the
force majeure shall be resumed after the event or cause of force majeure
ends.
10. APPLICABLE LAW AND DISPUTE RESOLUTIONS
10.1 A Party shall not be required to perform any obligation under this
Agreement if the performance of that obligation is prohibited by the laws
of any governmental authority having competent jurisdiction to prevent the
performance of the obligation of that Party.
10.2 This Agreement shall be governed by and interpreted and construed in
accordance with English law.
10.3 Any dispute arising out of and in relation to this Agreement including, but
without limitation, any question relating to its existence, validity and
termination, shall be referred to and finally resolved by arbitration in
accordance with the Rules of Arbitration of the International Chamber of
Commerce ("ICC"), which Rules are deemed to be incorporated herein by
reference. The language of the arbitration shall be English and the venue
of the arbitration shall be in London. The Parties hereto acknowledge that
service of any notices in the course of such arbitration at their addresses
as given in this Agreement shall be sufficient and valid.
The number of Arbitrators shall be three (3). Each Party shall appoint one
Arbitrator, and the two Party appointed Arbitrators shall appoint the
third. If a Party fails to nominate an Arbitrator within thirty (30) days
from the date when the claimants request for arbitration has been
communicated to the other Party, such appointment shall be made by the
International Court of Arbitration of the ICC. If the two Party appointed
Arbitrators fail to nominate a third Arbitrator who shall act as Chairman
within thirty (30) days from the date of appointment of the last appointed
Party Arbitrator, the third Arbitrator shall be selected by the
International Court of Arbitration of the ICC. In all cases, the Chairman
shall be a lawyer fluent in English and shall not be of the same
nationality as the shareholders in each Party representing a majority of
the voting power of that Party.
10.4 Judgment on the award of the arbitrators may be entered in any court having
competent jurisdiction or having jurisdiction over one or more of the
Parties or their assets. Without prejudice to the aforesaid, the Company
and the Consultant each hereby submits itself to the jurisdiction and venue
of the Courts of England for such purpose.
E-14
<PAGE> 9
11. NOTICES
All notices or requests provided for or permitted to be given pursuant to
this Agreement must be in writing, or confirmed in writing as provided
herein, and may be delivered by telecopier, telex, mail or hand. Any notice
hereunder shall be effective upon receipt by the Party to whom such notice
is addressed, and shall be addressed as follows:
IVANHOE ENERGY INC.
Vancouver, British Columbia V6C 3L6
Canada
Attention: , President
Telephone: - -
Facsimile: - -
CONSULTANT:
CONTINENTAL ENERGY LIMITED
Doha, Qatar
Attention:
Telephone: - - -
Facsimile: - -
Each Party shall have the right from time to time during the term of this
Agreement to change its address, telephone, facsimile numbers, and/or the
person to whom communications are to be delivered by notifying the other
Party in writing.
12. MISCELLANEOUS
12.1 This Agreement constitutes the entire agreement between the Parties
relating the subject matter hereof and supersedes all prior discussions,
correspondence, negotiations and agreements, both written and oral,
regarding its subject matter.
12.2 This Agreement may be amended or modified, and any of the terms hereof may
be waived, only by a written instrument duly signed by both the Company and
Consultant or, in the case of a waiver, by the Party waiving compliance.
12.3 This Agreement shall be binding upon and inure solely to the benefit of
each Party hereto, and their respective permitted successors and assigns,
and nothing herein, express or implied, is intended to or shall confer upon
any other Person or Persons any rights, benefits or remedies of any nature
whatsoever under or by any reason of this Agreement.
12.4 Nothing contained herein shall be construed to create an association,
trust, partnership or joint venture between the Parties.
12.5 The headings used herein are for convenience only and are not intended to
be interpretative, definitive, or supplemental to the respective
paragraphs, provisions, or articles. Terms used herein in the singular
include the plural and vice versa, and the use of any gender includes any
or all other genders, as the context requires.
12.6 The waiver by one Party or the failure of the other Party to perform any of
its obligations under this Agreement shall not be deemed to be a waiver of
any subsequent non-performance of that obligation, or the waiver of any
other obligation of the other Party. The failure by either Party to
E-15
<PAGE> 10
enforce at any time or for any period any of the terms of this Agreement
shall not be deemed to constitute a waiver.
12.7 If any provision of this Agreement is found to be void, voidable, illegal,
or otherwise unenforceable under the laws of any jurisdiction, it shall not
affect the legality or validity of all or any of the other provisions of
this Agreement in that jurisdiction or the entirety of the Agreement in any
other jurisdiction where any such provision is not void, voidable, illegal,
or unenforceable.
IN WITNESS WHEREOF, this Agreement is signed in duplicate originals by the
Company and the Consultant and is effective as of the day and year first above
written.
IVANHOE ENERGY INC.
By: /s/ 15/11/2000
------------------------------------------------
, President
CONTINETAL ENERGY LIMITED
By: /s/ 15/11/2000
------------------------------------------------
, Director
E-16
<PAGE> 11
EXHIBIT A
ILLUSTRATIVE CALCULATION OF PROJECT NET CASH FLOW
<TABLE>
<CAPTION>
SYNTROLEUM SYNTROLEUM
TOTAL PRODUCTION GROSS ROYALTY $000 PROJECT ELIGIBLE CR CR
REVENUE FEE CAPEX PAYMENT OPEX GAS COST NCF COSTS LIMIT LIMIT
------- ---------- ----- ---------- ------ -------- ------- -------- ------- ------
MM$ MM$ MM$ MM$ MM$ MM$ MM$ MM$ PERCENT MM$
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2001...................... a 222 (230) 230 59.2%
2002...................... 31 1,154 (1,185) 1,185 59.2%
2003...................... 15 1,440 (1,455) 1,455 59.2%
2004...................... 455 14 761 3 138 (461) 917 59.2% 270
2005...................... 1,366 4 132 9 415 806 559 59.2% 809
2006...................... 1,593 11 484 1,098 495 59.2% 944
2007...................... 1,593 11 484 1,098 495 59.2% 944
2008...................... 1,593 11 484 1,098 495 59.2% 944
2009...................... 1,593 11 484 1,098 495 59.2% 944
2010...................... 1,593 11 484 1,098 495 59.2% 944
2011...................... 1,593 11 404 1,098 495 29.5% 471
2012...................... 1,593 11 484 1,098 495 29.5% 471
2013...................... 1,593 11 484 1,098 495 29.5% 471
2014...................... 1,593 11 484 1,098 495 29.5% 471
2015...................... 1,593 11 484 1,098 495 29.5% 471
2016...................... 1,593 11 484 1,098 495 29.5% 471
2017...................... 1,593 11 484 1,098 495 29.5% 471
2018...................... 1,593 11 484 1,098 495 29.5% 471
2019...................... 1,593 11 484 1,098 495 29.5% 471
2020...................... 1,593 11 404 1,098 495 29.5% 471
2021...................... 1,593 11 404 1,098 495 29.5% 471
2022...................... 1,593 11 484 1,098 495 29.5% 471
2023...................... 1,593 11 484 1,098 495 29.5% 471
2024...................... 1,593 11 484 1,098 495 29.5% 471
2025...................... 1,593 11 404 1,098 495 29.5% 471
2026...................... 1,593 11 484 1,098 495 29.5% 471
2027...................... 1,593 11 484 1,098 495 29.5% 471
2028...................... 1,593 11 484 1,098 495 29.5% 471
2029...................... 1,593 11 484 1,098 495 29.5% 471
2030...................... 1,593 11 484 1,098 495 29.5% 471
------ --- ----- --- ------ ------ ------ ------
Total..................... 41,653 73 3,708 260 12,657 24,935 16,718 15,206
====== === ===== === ====== ====== ====== ======
<CAPTION>
PARTNERS
CF PRE-DEBT
PARTNER'S GOVT SIGNATURE PRE-MGMNT
CR CR PROFIT PROFIT PROFIT PROFIT GAS BONUS GOVT FEE
TAKEN CARRY BBLS BBLS BBLS BBLS ROYALTY PAYMENTS NC = PRE-TAX
------ ----- ------ ------ --------- ------ ------- --------- ------ -----------
MM$ MM$ MM$ SPLIT MM$ MM$ MM$ MM$ MM$ MM$
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2001...................... 230 -- 59.2% -- (230)
2002...................... 1,415 -- 59.2% -- (1,185)
2003...................... 2,870 -- 59.2% -- (1,455)
2004...................... 270 3,517 186 59.2% 110 76 28 (537)
2005...................... 809 3,268 557 59.2% 330 227 227 579
2006...................... 944 2,819 650 59.2% 385 265 285 833
2007...................... 944 2,371 650 59.2% 385 265 285 833
2008...................... 944 1,922 650 54.2% 352 297 297 801
2009...................... 944 1,473 650 54.2% 352 297 297 881
2010...................... 944 1,025 650 54.2% 352 297 297 801
2011...................... 471 1,049 1,123 54.2% 609 514 514 584
2012...................... 471 1,073 1,123 49.2% 553 570 570 528
2013...................... 471 1,098 1,123 49.2% 553 570 570 528
2014...................... 471 1,122 1,123 49.2% 553 570 570 528
2015...................... 471 1,146 1,123 49.2% 553 570 570 528
2016...................... 471 1,171 1,123 49.2% 553 570 570 528
2017...................... 471 1,195 1,123 49.2% 553 570 570 528
2018...................... 471 1,219 1,123 49.2% 553 570 570 528
2019...................... 471 1,244 1,123 49.2% 553 570 570 528
2020...................... 471 1,268 1,123 49.2% 553 570 570 528
2021...................... 471 1,292 1,123 49.2% 553 570 570 528
2022...................... 471 1,317 1,123 49.2% 553 570 570 528
2023...................... 471 1,341 1,123 44.2% 496 826 626 472
2024...................... 471 1,365 1,123 44.2% 496 626 626 472
2025...................... 471 1,390 1,123 44.2% 496 826 626 472
2026...................... 471 1,414 1,123 44.2% 496 626 626 472
2027...................... 471 1,438 1,123 44.2% 496 626 626 472
2028...................... 471 1,463 1,123 44.2% 496 626 626 472
2029...................... 471 1,487 1,123 44.2% 496 626 626 472
2030...................... 471 1,511 1,123 44.2% 496 626 626 472
------ ------ ------ ------ ------ ------
Total..................... 15,206 26,447 12,926 13,521 13,521 11,413
====== ====== ====== ====== ====== ======
</TABLE>
E-17
<PAGE> 12
EXHIBIT A
ILLUSTRATIVE CALCULATION OF PROJECT NET CASH FLOW
<TABLE>
<CAPTION>
PRE-PROMOTE PRE-PROMOTE
PARTNERS CF PARTNERS CF
PRE-MGMNT FEE MGMNT MGMNT MGMNT MGMNT MGMNT W/MGMNT FEE
PRE-DEBT BONUS FEE FEE FEE FEE PRE-DEBT
PRE-TAX PAYMENT3 CAP EARNED PAYMENTS CARRY PRE-TAX
------------- -------- ----- ------ -------- ----- -----------
MM$ MM$ MM$ MM$ MM$ MM$ MM$
<S> <C> <C> <C> <C> <C> <C> <C>
2001............................................. (230.3) 0.0 6.0 5.6 5.6 0.0 (235.8)
2002............................................. (1,185.l) 6.0 28.8 6.0 22.8 (1,191.1)
2003............................................. (1,455.l) 6.0 36.0 6.0 52.8 (1,461.l)
2004............................................. (537.0) 6.0 19.0 6.0 65.9 (543.0)
2005............................................. 579.3 6.0 3.3 6.0 63.2 573.3
2006............................................. 833.4 6.0 0.0 6.0 57.2 827.4
2007............................................. 833.4 6.0 0.0 6.0 51.2 827.4
2008............................................. 801.0 6.0 0.0 6.0 45.2 795.0
2009............................................. 801.0 6.0 0.0 6.0 39.2 795.0
2010............................................. 801.0 6.0 0.0 6.0 33.2 795.0
2011............................................. 584.4 6.0 0.0 6.0 27.2 578.4
2012............................................. 528.3 6.0 0.0 6.0 21.2 522.3
2013............................................. 528.3 6.0 0.0 6.0 15.2 522.3
2014............................................. 528.3 6.0 0.0 6.0 9.1 522.3
2015............................................. 528.3 6.0 0.0 6.0 3.1 522.3
2016............................................. 528.3 6.0 0.0 3.1 0.0 525.1
2017............................................. 528.3 6.0 0.0 0.0 0.0 528.3
2018............................................. 528.3 6.0 0.0 0.0 0.0 528.3
2019............................................. 528.3 6.0 0.0 0.0 0.0 528.3
2020............................................. 528.3 6.0 0.0 0.0 0.0 528.3
2021............................................. 528.3 6.0 0.0 0.0 0.0 528.3
2022............................................. 528.3 6.0 0.0 0.0 0.0 528.3
2023............................................. 472.1 6.0 0.0 0.0 0.0 472.1
2024............................................. 472.1 6.0 0.0 0.0 0.0 472.1
2025............................................. 472.1 6.0 0.0 0.0 0.0 472.1
2026............................................. 472.1 6.0 0.0 0.0 0.0 472.1
2027............................................. 472.1 6.0 0.0 0.0 0.0 472.1
2028............................................. 472.1 6.0 0.0 0.0 0.0 472.1
2029............................................. 472.1 6.0 0.0 0.0 0.0 472.1
2030............................................. 472.1 6.0 0.0 0.0 0.0 472.1
-------- ---- ---- ---------
11,414.1 92.7 92.7 11,321.4
======== ==== ==== =========
<CAPTION>
PRE-PROMOTE W/PROMOTE
PARTNERS CF IVANHOE NCF
DEBT W/MGMNT FEE BLANK BLANK W/MGMNT FEE
LOAN SERVICE DEBT W/FINANCING CAPEX SHARE W/FINANCING
DRAWDOWN PRINCIPAL SERVICE PRE-TAX PROMOTE NCF PRE-TAX
-------- --------- ------- ----------- -------- -------- -----------
MM$ MM$ MM$ MM$ MM$ MM$ MM$
<S> <C> <C> <C> <C> <C> <C> <C>
2001............................................. 161.2 (74.6) (74.6)
2002............................................. 829.6 (361.5) (361.5)
2003............................................. 1,018.5 (442.5) (442.5)
2004............................................. 542.6 74.1 118.0 (192.5) (192.5)
2005............................................. 94.5 174.8 259.1 234.2 234.2
2006............................................. 215.0 278.2 334.2 334.2
2007............................................. 236.6 256.7 334.2 334.2
2008............................................. 260.2 233.1 301.7 301.7
2009............................................. 286.2 207.0 301.7 301.7
2010............................................. 314.8 178.4 301.7 301.7
2011............................................. 346.3 146.9 85.1 85.1
2012............................................. 381.0 112.3 29.0 29.0
2013............................................. 419.1 74.2 29.0 29.0
2014............................................. 268.9 32.3 221.1 221.1
2015............................................. 54.2 5.4 462.7 462.7
2016............................................. 525.1 525.1
2017............................................. 528.3 528.3
2018............................................. 528.3 528.3
2019............................................. 528.3 528.3
2020............................................. 528.3 528.3
2021............................................. 528.3 528.3
2022............................................. 528.3 528.3
2023............................................. 472.1 472.1
2024............................................. 472.1 472.1
2025............................................. 472.1 472.1
2026............................................. 472.1 472.1
2027............................................. 472.1 472.1
2028............................................. 472.1 472.1
2029............................................. 472.1 472.1
2030............................................. 472.1 472.1
-------- ------- ------- ------- -------
2,646.5 3,030.9 1,901.8 9,035.2 9,035.2
======== ======= ======= ======= =======
</TABLE>
E-18