Common use of Participating Interest Clause in Contracts

Participating Interest. (A) Subject to Article 3.2(C), the Participating Interests of the Parties as of the Effective Date are: IPC 13.609% EMANUELLE 24.161 % EMANUELLE PARTNERHSIP 19.161% ILDC 5.000% IDB 5.000 % MODIIN 19.282 % BLUE WATER 8.787% GGR 5.000% (B) If a Party transfers all or part of its Participating Interest pursuant to the provisions of this Agreement and the Contract, the Participating Interests of the Parties shall be revised accordingly. (C) (1) The Participating Interest of Blue Water is subject to divestment as provided in the Structure and Participation Agreement dated April 25, 2010 by and among the Parties other than GGR and PBT Capital Partners LLC ("PBT-CP" and the “PBT Agreement” respectively), and in the event of such divestment, the Participating Interest of Blue Water shall be owned by Emanuelle, Emanuelle Partnership, ILDC and IDB and Modiin (and their respective Affiliates) in proportion to their (and their respective Affiliates') Participating Interests;(2) The Participating Interest of GGR is subject to compliance by GGR with its obligations set forth in the Operating and Participating Agreement dated May 19, 2010 among the Parties (the “GGR Agreement”) and is subject to GGR’s right and option to increase its Participating Interest by 2.5% in the manner provided in the GGR Agreement; (3) the Participating Interest of GGR is subject to GGR's option to increase its Participating Interest by further 2.5% subject to the terms and conditions of the Option Agreement dated May 19, 2010 among GGR, Emmanuelle, IDB-DT (2010) and PBT-CP (the "Option Agreement"). (D) The following shall occur in the event that GGR is removed from its position as Operator pursuant to Section 4.10 (whether for breach or not): (1) in the event that GGR is removed as Operator prior to the later of (a) March 31, 2011; or (b) the date on which GGR provides to Non-Operators its geological model which shall include GGR's designated well location and target objective for the first Exploration Well (the "GGR Model"); then at the option of two (2) or more of the total number of Non- Operators holding a combined Participating Interest of at least fifty one percent (51%), to be exercised by delivery of written notice to GGR from Emanuelle or other representative designated by Non-Operators no later than 10 days following the date of their decision to remove GGR as Operator, GGR's Participating Interest shall be reduced to 1.5% upon GGR being reimbursed by each of the Non-Operators, severally for their proportionate shares, for the aggregate of the following: (a) U.S.$420,000 (i.e., 70% of the Purchase Price paid to Non-Operators by GGR for its Participating Interest pursuant to the GGR Agreement, plus (b) U.S.$ 14,000 as reimbursement to GGR of 70% of its share of accrued costs and expenses paid by GGR to Non-Operators pursuant to the GGR Agreement plus (c) GGR shall be reimbursed 70% of its share of costs and expenses paid to the Joint Account less 70% of any operating fees or other amounts paid by Non- Operators to GGR for its services hereunder. If GGR has acquired the Increased Interest under the GGR Agreement prior to such removal, all amounts in clauses (a), (b) and (c) of the preceding sentence shall be increased to reflect the amounts paid by GGR to Non- Operators and to the Joint Account on account of such Increased Interest. The reimbursement to GGR of the amounts specified in this paragraph shall be made by Emanuelle acting as agent for the Non-Operators upon delivery of the notice of the removal of GGR as Operator, and each Non-Operator shall pay to Emanuelle its proportionate share of such amounts in accordance with each Party's Participating Interest within 10 days of the decision to effect such removal, and the failure to make such payment by any Non-Operator shall be deemed a Default under this Agreement. (2) in the event that GGR is removed as the Operator after March 31, 2011 and after providing the GGR Model but prior to GGR spudding the first Exploration Well, at the option of two (2) or more of the total number of Non-Operators holding a combined Participating Interest of at least fifty one percent (51%), to be exercised by delivery of written notice to GGR from Emanuelle or other representative designated by Non- Operators no later than 10 days following the date of their decision to remove GGR as Operator, GGR's Participating Interest shall upon being reimbursed as set out below, be reduced to a 2.5%! Participating Interest if the Operating Committee approves GGR's suggested location and target for the first Exploration Well and pursuant to the drilling of said Exploration Well a Commercial Discovery is made, in which event GGR shall retain a 2,5% Participating Interest and the Parties (including GGR as to its reduced Participating Interest) shall in addition assign to GGR an undivided 0.4% overriding royalty interest of Petroleum produced, saved and marketed from the said Exploration Well and burdening the Participating Interests of the Parties in the Exploration Well in proportion to their respective ownership at the time of the commencement of the drilling of the Well, but limited to production of Petroleum from the weilbore of such Exploration Well and not to any production of Petroleum from any other well attributable to ownership of Participating Interests in such Exploration Well in the event of any unitization or pooling of interests that may thereafter occur, all as further detailed in the Overriding Royalty Agreement attached hereto as Exhibit D. In the event of a reduction of GGR's Participating Interest pursuant to this paragraph, GGR shall be reimbursed by each of the Non-Operators, severally for their proportionate shares, for the aggregate of the following: (a) U.S.$300,000, i.e., 50% of the Purchase Price paid to them by GGR for its Participating Interest in the License pursuant to the GGR Agreement, plus (b) ▇.▇▇ 10,000 as reimbursement to GGR of 50% of its share of accrued costs and expenses paid by GGR to Non-Operators pursuant to the GGR Agreement, plus (c) GGR shall be reimbursed 50% of its share of costs and expenses paid to the Joint Account less 50% of any operating fees or other amounts paid by Non-Operators to GGR for its services hereunder. If GGR has acquired the Increased Interest under the GGR Agreement prior to such removal, all amounts in clauses (a), (b) and (c) of the preceding sentence shall be increased to reflect the amounts paid by GGR to Non-Operators and to the Joint Account on account of such Increased Interest. The reimbursement to GGR of the amounts specified in this paragraph shall be made by Emanuelle acting as agent for the Non- Operators upon delivery of the notice of the removal of GGR as Operator, and each Non- Operator shall pay to Emanuelle its proportionate share of such amounts in accordance with each Party's Participating Interest within 10 days of the decision to effect such removal, and the failure to make such payment by any Non-Operator shall be deemed a Default under this Agreement. (3) in the event that GGR is removed as the Operator after March 31, 2011 and after providing the GGR Model and prior to GGR completing the drilling of the first Exploration Well, and either (a) the Operating Committee does not approve GGR's suggested location and target objective for the first Exploration Well or (b) the Operating Committee approves GGR's suggested location and target objective for the first Exploration Well however no Commercial Discovery is made at such location pursuant to the drilling of said Exploration Well, then in either such event at the option of two (2) or more of the total number of Non-Operators holding a combined Participating Interest of at least fifty one percent (51%), to be exercised by delivery of written notice to GGR from Emanuelle or other representative designated by Non-Operators no later than 10 days following the date of their decision to remove GGR as Operator, GGR's Participating Interest shall upon being reimbursed as set out below be reduced to 1.5% and GGR shall be reimbursed by each of the Non-Operators, severally for their proportionate shares, for the aggregate of the following (a) U.S,$420,000, i.e., 70% of the Purchase Price paid to them by GGR for its Participating Interest in the License pursuant to the GGR Agreement, plus (b) U.S. $ 14,000 as reimbursement to GGR of 70% of its share of accrued costs and expenses paid by GGR to Non-Operators pursuant to the GGR Agreement, plus (c) GGR shall be reimbursed 70% of its share of costs and expenses paid to the Joint Account less 70% of any operating fees or other amounts paid by Non- Operators to GGR for its services hereunder. If GGR has acquired the Increased Interest under the GGR Agreement prior to such removal, all amounts in clauses (a), (b) and (c) of the preceding sentence shall be increased to reflect the amounts paid by GGR to Non- Operators and to the Joint Account on account of such Increased Interest. The reimbursement to GGR of the amounts specified in this paragraph shall be made by Emanuelle acting as agent for the Non-Operators upon delivery of the notice of the removal of GGR as Operator, and each Non-Operator shall pay to Emanuelle its proportionate share of such amounts in accordance with each Party's Participating Interest within 10 days of the decision to effect such removal, and the failure to make such payment by any Non-Operator shall be deemed a Default under this Agreement. GGR shall not be entitled to receive an overriding royalty interest in the event of removal pursuant to this paragraph. (4) in the event that GGR is removed as the Operator after it completes the drilling of the first Exploration Well at the location and target objective suggested by GGR in the GGR Model following which no Commercial Discovery is made in such Well, then at the option of two (2) or more of the total number of Non-Operators holding a combined Participating Interest of at least fifty one percent (51%), to be exercised by delivery of written notice to GGR from Emanuelle or other representative designated by Non- Operators no later than 10 days following the date of their decision to remove GGR as Operator, GGR's Participating Interest shall be reduced to 1.50% and GGR shall be reimbursed by the Non-Operators in accordance with subparagraph (3) above. GGR shall not be entitled to receive an overriding royalty interest in the event of removal pursuant to this paragraph. (5) in the event that GGR is removed after it completes the drilling of the first Exploration Well following which a Commercial Discovery is made in such Well at the location suggested by GGR in the GGR Model, at the option of two (2) or more of the total number of Non-Operators holding a combined Participating Interest of at least fifty one percent (51%), to be exercised by delivery of written notice to GGR from Emanuelle or other representative designated by Non-Operators no later than 10 days following the date of their decision to remove GGR as Operator, the following shall apply: GGR shall sell its entire Participating Interest to the successor Operator for a price equal to fair market value or if the other Non-Operators together with GGR are selling all or a portion of their interest, then the price shall be equal to GGR's pro rata share of the price payable by the successor Operator as determined by the Non-Operators, The successor Operator shall be a bona fide Operator that is approved by the Government and is not related in any way, directly or indirectly, to the other Participating Interest Owners. (6) In the event that GGR is removed as Operator under any of the circumstances described in paragraphs (1) - (5) above, and the Non-Operators have not elected to exercise any of their above-mentioned options to require GGR to relinquish portions of its Participating Interest, the Parties agree to transfer a pro-rata proportion of their Participating Interests to the successor Operator, at the price agreed by the Parties. (E) If GGR is not removed as Operator prior to the time when the first Exploratory Well is spudded and the Well is drilled at the location and to the target objective suggested by the GGR Model and the Well is not a Commercial Discovery, then at the option of two (2) or more of the total number of Non-Operators ■holding a combined Participating Interest of at least fifty one percent (51%), to be exercised by delivery of written notice to GGR from Emanuelle or other representative designated by Non-Operators no later than 10 days following the date of the plugging and abandoning of the first Exploratory Weil, GGR's Participating Interest shall be reduced to 1.5% and GGR shall not be entitled to reimbursement for any portion of the Purchase Price it paid to the Non-Operators for its Participating Interest or any expenses paid in connection therewith or any overriding royalty interest. (F) All relinquishments or transfers of Participating Interest that occur pursuant to this Article 3.2 shall be made free and clear of any overriding royalties, liens, or financial encumbrances arising by, through or under GGR or its Affiliates, and GGR covenants and agrees to execute any necessary applications, deeds of transfer, and other instruments required by the Government to effect such transfer.

Participating Interest. (A) Subject to Article 3.2(C), the Participating Interests of the Parties as of the Effective Date are: IPC 13.609% EMANUELLE 24.161 % EMANUELLE PARTNERHSIP 19.161% ILDC 5.000% IDB 5.000 % MODIIN 19.282 % BLUE WATER 8.787% GGR 5.000% (B) If a Party transfers all or part of its Participating Interest pursuant to the provisions of this Agreement and the Contract, the Participating Interests of the Parties shall be revised accordingly. (C) (1) The Participating Interest of Blue Water is subject to divestment as provided in the Structure and Participation Agreement dated April 25, 2010 by and among the Parties other than GGR and PBT Capital Partners LLC ("PBT-CP" and the “PBT Agreement” respectively), and in the event of such divestment, the Participating Interest of Blue Water shall be owned by Emanuelle, Emanuelle Partnership, ILDC and IDB and Modiin (and their respective Affiliates) in proportion to their (and their respective Affiliates') Participating Interests;(2) The Participating Interest of GGR is subject to compliance by GGR with its obligations set forth in the Operating and Participating Agreement dated May 19, 2010 among the Parties (the “GGR Agreement”) and is subject to GGR’s right and option to increase its Participating Interest by 2.5% in the manner provided in the GGR Agreement; (3) the Participating Interest of GGR is subject to GGR's option to increase its Participating Interest by further 2.5% subject to the terms and conditions of the Option Agreement dated May 19, 2010 among GGR, Emmanuelle, IDB-DT (2010) and PBT-CP (the "Option Agreement"). (D) The following shall occur in the event that GGR is removed from its position as Operator pursuant to Section 4.10 (whether for breach or not): (1) in the event that GGR is removed as Operator prior to the later of (a) March 31, 2011; or (b) the date on which GGR provides to Non-Operators its geological model which shall include GGR's designated well location and target objective for the first Exploration Well (the "GGR Model"); then at the option of two (2) or more of the total number of Non- Non-Operators holding a combined Participating Interest of at least fifty one percent (51%), to be exercised by delivery of written notice to GGR from Emanuelle or other representative designated by Non-Operators no later than 10 days following the date of their decision to remove GGR as Operator, GGR's Participating Interest shall be reduced to 1.5% upon GGR being reimbursed by each of the Non-Operators, severally for their proportionate shares, for the aggregate of the following: (a) U.S.$420,000 (i.e., 70% of the Purchase Price paid to Non-Operators by GGR for its Participating Interest pursuant to the GGR Agreement, plus (b) U.S.$ 14,000 U.S.$14,000 as reimbursement to GGR of 70% of its share of accrued costs and expenses paid by GGR to Non-Operators pursuant to the GGR Agreement plus (c) GGR shall be reimbursed 70% of its share of costs and expenses paid to the Joint Account less 70% of any operating fees or other amounts paid by Non- Non-Operators to GGR for its services hereunder. If GGR has acquired the Increased Interest under the GGR Agreement prior to such removal, all amounts in clauses (a), (b) and (c) of the preceding sentence shall be increased to reflect the amounts paid by GGR to Non- Non-Operators and to the Joint Account on account of such Increased Interest. The reimbursement to GGR of the amounts specified in this paragraph shall be made by Emanuelle acting as agent for the Non-Operators upon delivery of the notice of the removal of GGR as Operator, and each Non-Operator shall pay to Emanuelle its proportionate share of such amounts in accordance with each Party's ’s Participating Interest within 10 days of the decision to effect such removal, and the failure to make such payment by any Non-Operator shall be deemed a Default under this Agreement. (2) in the event that GGR is removed as the Operator after March 31, 2011 and after providing the GGR Model but prior to GGR spudding the first Exploration Well, at the option of two (2) or more of the total number of Non-Operators holding a combined Participating Interest of at least fifty one percent (51%), to be exercised by delivery of written notice to GGR from Emanuelle or other representative designated by Non- Non-Operators no later than 10 days following the date of their decision to remove GGR as Operator, GGR's Participating Interest shall upon being reimbursed as set out below, be reduced to a 2.5%! % Participating Interest if the Operating Committee approves GGR's suggested location and target for the first Exploration Well and pursuant to the drilling of said Exploration Well a Commercial Discovery is made, in which event GGR shall retain a 2,52.5% Participating Interest and the Parties (including GGR as to its reduced Participating Interest) shall in addition assign to GGR an undivided 0.4% overriding royalty interest of Petroleum produced, saved and marketed from the said Exploration Well and burdening the Participating Interests of the Parties in the Exploration Well in proportion to their respective ownership at the time of the commencement of the drilling of the Well, but limited to production of Petroleum from the weilbore wellbore of such Exploration Well and not to any production of Petroleum from any other well attributable to ownership of Participating Interests in such Exploration Well in the event of any unitization or pooling of interests that may thereafter occur, all as further detailed in the Overriding Royalty Agreement attached hereto as Exhibit D. In the event of a reduction of GGR's ’s Participating Interest pursuant to this paragraph, GGR shall be reimbursed by each of the Non-Operators, severally for their proportionate shares, for the aggregate of the following: (a) U.S.$300,000, i.e., 50% of the Purchase Price paid to them by GGR for its Participating Interest in the License pursuant to the GGR Agreement, plus (b) ▇.▇▇ 10,000 U.S$10,000 as reimbursement to GGR of 50% of its share of accrued costs and expenses paid by GGR to Non-Operators pursuant to the GGR Agreement, plus (c) GGR shall be reimbursed 50% of its share of costs and expenses paid to the Joint Account less 50% of any operating fees or other amounts paid by Non-Operators to GGR for its services hereunder. If GGR has acquired the Increased Interest under the GGR Agreement prior to such removal, all amounts in clauses (a), (b) and (c) of the preceding sentence shall be increased to reflect the amounts paid by GGR to Non-Operators and to the Joint Account on account of such Increased Interest. The reimbursement to GGR of the amounts specified in this paragraph shall be made by Emanuelle acting as agent for the Non- Non-Operators upon delivery of the notice of the removal of GGR as Operator, and each Non- Non-Operator shall pay to Emanuelle its proportionate share of such amounts in accordance with each Party's ’s Participating Interest within 10 days of the decision to effect such removal, and the failure to make such payment by any Non-Operator shall be deemed a Default under this Agreement. (3) in the event that GGR is removed as the Operator after March 31, 2011 and after providing the GGR Model and prior to GGR completing the drilling of the first Exploration Well, and either (a) the Operating Committee does not approve GGR's suggested location and target objective for the first Exploration Well or (b) the Operating Committee approves GGR's suggested location and target objective for the first Exploration Well however no Commercial Discovery is made at such location pursuant to the drilling of said Exploration Well, then in either such event at the option of two (2) or more of the total number of Non-Operators holding a combined Participating Interest of at least fifty one percent (51%), to be exercised by delivery of written notice to GGR from Emanuelle or other representative designated by Non-Operators no later than 10 days following the date of their decision to remove GGR as Operator, GGR's Participating Interest shall upon being reimbursed as set out below be reduced to 1.5% and GGR shall be reimbursed by each of the Non-Operators, severally for their proportionate shares, for the aggregate of the following (a) U.S,$420,000U.S.$420,000, i.e., 70% of the Purchase Price paid to them by GGR for its Participating Interest in the License pursuant to the GGR Agreement, plus (b) U.S. $ 14,000 as reimbursement to GGR of 70% of its share of accrued costs and expenses paid by GGR to Non-Operators pursuant to the GGR Agreement, plus (c) GGR shall be reimbursed 70% of its share of costs and expenses paid to the Joint Account less 70% of any operating fees or other amounts paid by Non- Non-Operators to GGR for its services hereunder. If GGR has acquired the Increased Interest under the GGR Agreement prior to such removal, all amounts in clauses (a), (b) and (c) of the preceding sentence shall be increased to reflect the amounts paid by GGR to Non- Non-Operators and to the Joint Account on account of such Increased Interest. The reimbursement to GGR of the amounts specified in this paragraph shall be made by Emanuelle acting as agent for the Non-Operators upon delivery of the notice of the removal of GGR as Operator, and each Non-Operator shall pay to Emanuelle its proportionate share of such amounts in accordance with each Party's ’s Participating Interest within 10 days of the decision to effect such removal, and the failure to make such payment by any Non-Operator shall be deemed a Default under this Agreement. GGR shall not be entitled to receive an overriding royalty interest in the event of removal pursuant to this paragraph. (4) in the event that GGR is removed as the Operator after it completes the drilling of the first Exploration Well at the location and target objective suggested by GGR in the GGR Model following which no Commercial Discovery is made in such Well, then at the option of two (2) or more of the total number of Non-Operators holding a combined Participating Interest of at least fifty one percent (51%), to be exercised by delivery of written notice to GGR from Emanuelle or other representative designated by Non- Non-Operators no later than 10 days following the date of their decision to remove GGR as Operator, GGR's Participating Interest shall be reduced to 1.50% and GGR shall be reimbursed by the Non-Operators in accordance with subparagraph (3) above. GGR shall not be entitled to receive an overriding royalty interest in the event of removal pursuant to this paragraph. (5) in the event that GGR is removed after it completes the drilling of the first Exploration Well following which a Commercial Discovery is made in such Well at the location suggested by GGR in the GGR Model, at the option of two (2) or more of the total number of Non-Operators holding a combined Participating Interest of at least fifty one percent (51%), to be exercised by delivery of written notice to GGR from Emanuelle or other representative designated by Non-Operators no later than 10 days following the date of their decision to remove GGR as Operator, the following shall apply: GGR shall sell its entire Participating Interest to the successor Operator for a price equal to fair market value or if the other Non-Operators together with GGR are selling all or a portion of their interest, then the price shall be equal to GGR's ’s pro rata share of the price payable by the successor Operator as determined by the Non-Operators, . The successor Operator shall be a bona fide Operator that is approved by the Government and is not related in any way, directly or indirectly, to the other Participating Interest Owners. (6) In the event that GGR is removed as Operator under any of the circumstances described in paragraphs (1) - – (5) above, and the Non-Operators have not elected to exercise any of their above-mentioned options to require GGR to relinquish portions of its Participating Interest, the Parties agree to transfer a pro-rata proportion of their Participating Interests to the successor Operator, at the price agreed by the Parties. (E) If GGR is not removed as Operator prior to the time when the first Exploratory Well is spudded and the Well is drilled at the location and to the target objective suggested by the GGR Model and the Well is not a Commercial Discovery, then at the option of two (2) or more of the total number of Non-Operators ■holding a combined Participating Interest of at least fifty one percent (51%), to be exercised by delivery of written notice to GGR from Emanuelle or other representative designated by Non-Operators no later than 10 days following the date of the plugging and abandoning of the first Exploratory WeilWell, GGR's Participating Interest shall be reduced to 1.5% and GGR shall not be entitled to reimbursement for any portion of the Purchase Price it paid to the Non-Operators for its Participating Interest or any expenses paid in connection therewith or any overriding royalty interest. (F) All relinquishments or transfers of Participating Interest that occur pursuant to this Article 3.2 shall be made free and clear of any overriding royalties, liens, or financial encumbrances arising by, through or under GGR or its Affiliates, and GGR covenants and agrees to execute any necessary applications, deeds of transfer, and other instruments required by the Government to effect such transfer.