Model confidentiality agreement

Association of International Petroleum Negotiators

MODEL

CONFIDENTIALITY AGREEMENT©

November 2007

DISCLAIMER

This model contract has been prepared only as a suggested guide and may not contain all of the provisions that may be required by the parties to an actual agreement. This model contract has not been endorsed by the Association of International Petroleum Negotiators® (AIPN) or by any members of the AIPN. Use of this model contract or any portion or variation thereof shall be at the sole discretion and risk of the user parties. Users of the model contract or any variation thereof are encouraged to seek the advice of legal counsel to ensure that the final document reflects the actual agreement of the parties. The AIPN disclaims any and all responsibilities or liability whatsoever for loss or damages that may result from use of this model contract or portions or variations thereof. All logos and references to the AIPN must be removed from this model contract when used as an actual agreement. ©AIPN 2007®

CONFIDENTIALITY AGREEMENT

THIS AGREEMENT (“Agreement”) is effective ______________________, 20__ (“Effective Date”) between ____________________________, a company organized and existing under the laws of __________________ (“Disclosing Party”), and ______________________________, a company organized and existing under the laws of ____________________ (“Receiving Party”). These parties may also be referred to individually as “Party” or collectively as “Parties”.

ARTICLE 1

DISCLOSURE OF CONFIDENTIAL INFORMATION

In connection with the possible acquisition by Receiving Party of certain rights held by Disclosing Party in the area described in Exhibit A ("Area") under , Disclosing Party is willing, in accordance with the terms and conditions of this Agreement, to disclose to Receiving Party certain information relating to the Area which may include geological and geophysical data, maps, models and interpretations, notes, summaries, commercial, contractual and financial information ("Confidential Information"). The Confidential Information is more fully described in Exhibit "B".

ARTICLE 2

UNDERTAKING NOT TO DISCLOSE

In consideration of the disclosure referred to in Article 1, Receiving Party shall not disclose the Confidential Information to anyone without the prior written consent of Disclosing Party, except as provided in this Agreement.

ARTICLE 3

CERTAIN INFORMATION NOT CONFIDENTIAL

The following shall not constitute Confidential Information:

3.1 information that is already known to Receiving Party as of the Effective Date;

3.2 information that is or becomes available to the public other than through the act or omission of Receiving Party or of any other person to whom Confidential Information is disclosed by the Receiving Party unless public disclosure was made pursuant to Article 4.1;

3.3 information that is acquired independently from a third party representing that it has the right to disseminate such information at the time it is acquired by the Receiving Party; or

3.4 information that is developed by Receiving Party independently of the Confidential Information received from Disclosing Party.

ARTICLE 4

PERMITTED DISCLOSURE BY RECEIVING PARTY

Receiving Party may disclose Confidential Information without the prior written consent of Disclosing Party:

4.1 to the extent the Confidential Information must be disclosed under applicable law, including by stock exchange regulations or by a governmental order, decree, regulation or rule, provided that Receiving Party shall make all reasonable efforts to give prompt written notice to Disclosing Party prior to such disclosure; or

4.2 to the following persons to the extent that Receiving Party needs them to evaluate the Area or any transaction between the Parties in relation to the Area:

4.2.1 employees, officers, and directors of Receiving Party;

4.2.2 employees, officers, and directors of an Affiliated Company of Receiving Party ("Affiliated Company" means any company or legal entity that controls, or is controlled by, or that is controlled by an entity that controls, a Party. "Control" means the direct or indirect ownership of more than fifty (50) percent of the voting rights in a company or other legal entity.);

4.2.3 any consultant or agent retained by Receiving Party or its Affiliated Company; or

4.2.4 any bank, financial institution, or entity funding or proposing to fund participation by Receiving Party in the Area, including any consultant retained by such bank, financial institution, or entity.

0 OPTIONAL PROVISION

Prior to making any disclosures to persons under Article 4.2.3 or Article 4.2.4, however, the Receiving Party shall obtain an undertaking of confidentiality substantially in the same form and content as this Agreement, from each such person; provided, however, that in the case of outside legal counsel, the Receiving Party shall only be required to procure that such legal counsel is bound by an obligation of confidentiality.

ARTICLE 5

OBLIGATION OF RECEIVING PARTY FOR PERMITTED DISCLOSURES

Receiving Party shall be responsible to Disclosing Party for any act or omission of the entities and persons described in Article 4.2 that would have breached this Agreement if the action had been by Receiving Party.

ARTICLE 6

RESTRICTION ON USE OF CONFIDENTIAL INFORMATION

6.1 Receiving Party shall only use or permit the use of the Confidential Information to evaluate the Area and to determine whether to enter into negotiations concerning the acquisition of all or part of the rights of Disclosing Party in the Area.

6.2 The Parties recognize that persons authorized to review the Confidential Information under Article 4.2 may form mental impressions (i.e., impressions not written or otherwise reduced to a record) regarding the Confidential Information. The use of these mental impressions by those persons shall not be a violation of the restriction contained in Article 6.1.

ARTICLE 7

DAMAGES

The liability of the Parties to each other for breach of this Agreement shall be limited to direct actual damages only. Such direct actual damages shall be the sole and exclusive remedy, and all other remedies or damages at law or in equity are waived except such equitable relief as may be granted under Article 12. In no event shall the Parties be liable to each other for any other damages, including loss of profits or incidental, consequential, special, or punitive damages, regardless of negligence or fault.

ARTICLE 8

RETURN OF CONFIDENTIAL INFORMATION

8.1 Receiving Party shall acquire no proprietary interest in or right to the Confidential Information.

8.2 Disclosing Party may demand the return of the Confidential Information at any time upon giving written notice to Receiving Party. Within thirty (30) days of receipt of such notice, Receiving Party shall return all of the original Confidential Information and shall destroy or cause to be destroyed all copies in its possession and in the possession of persons to whom it was disclosed pursuant to this Agreement.

8.3 The provisions of Article 8.2 do not apply to the following:

8.3.1 Confidential Information that is retained in the computer backup system of Receiving Party or a person to whom it was disclosed under Article 4.2 if the Confidential Information will be destroyed in accordance with the regular ongoing records retention process of Receiving Party or such person and if the Confidential Information is not used prior to its destruction; and

8.3.2 Confidential Information that must be retained under applicable law, including by stock exchange regulations or by governmental order, decree, regulation or rule.

ARTICLE 9

EVALUATION MATERIAL

9.1 Information generated by Receiving Party or by a person described in Article 4.2 that is derived in whole or in part from Confidential Information is “Evaluation Material.” Evaluation Material includes models, analyses, estimates of reserves, interpretations, presentations for management, and economic evaluations.

9.2 During the term of this Agreement, Receiving Party shall not disclose Evaluation Material to anyone other than the persons described under Article 4 without the prior written consent of Disclosing Party.

ARTICLE 10

TERM

0 ALTERNATIVE PROVISION 1

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