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Association of International Petroleum Negotiators June 2006 MODEL FORM INTERNATIONAL STUDY AND BID GROUP AGREEMENT 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 2006 2006 Study and Bid Group Agreement 1 MODEL FORM INTERNATIONAL STUDY AND BID GROUP AGREEMENT 1 AND 2 AGREEMENT RELATING TO PARTICIPATING IN THE STUDY AREA 2006 Study and Bid Group Agreement 2 THIS AGREEMENT is effective as of the day of 20 among a company incorporated in hereafter and a company incorporated in hereafter WHEREAS The Parties believe acreage in the Study Area may become available and The Parties deem it necessary to enter into this Agreement to i jointly pursue the grant or award of exploration development and or production rights in the Study Area and ii share acquisition costs and minimize the individual risks expenses and investments related to the evaluation exploration and or development of acreage that may be acquired In consideration of the premises set out above and provisions set out below the Parties agree as follows ARTICLE 1 DEFINITIONS AND INTERPRETATION 1 1Definitions As used in this Agreement the following words and terms shall have the meaning ascribed to them below Affiliate means a legal entity that Controls is Controlled by or is Controlled by an entity that controls a Party Agreed Interest Rate means interest compounded on a monthly basis at a fluctuating rate per year equal to the one 1 month term London Interbank Offered Rate LIBOR rate for U S dollar deposits as published in London by the Financial Times or if not published by the Financial Times then by The Wall Street Journal plus percent applicable on the first Business Day before the due date of payment and after such date on the first Business Day of each succeeding one 1 month term If such rate is contrary to any applicable law the rate of interest to be charged shall be the maximum rate permitted by the applicable law Agreement means this document together with the Exhibits attached to this document and any extension renewal novation or amendment of this document agreed to in writing by the Parties Application means any application or bid for a Government Contract concerning the Study Area made by the Participating Parties under this Agreement 2006 Study and Bid Group Agreement 3 Application Costs means all actual costs incurred by Operator to carry out the Work in the preparation and submission of an Application including transportation living communication courier reproduction costs and wages and salaries of personnel directly engaged in or attributable to the Work Application Date means ALTERNATIVE 1 TO BE SELECTED IN CASE A BID PROCEDURE HAS BEEN PUBLISHED the last date on which any Application must be submitted under the Bid Procedure ALTERNATIVE 2 TO BE SELECTED IN CASE A BID PROCEDURE HAS NOT BEEN PUBLISHED the following date Bid Area means an area for which an Application is made under the terms of this Agreement OPTION TO BE SELECTED IF A BID PROCEDURE HAS BEEN PUBLISHED Bid Procedure means the bid procedure published by specify name in the specify publication on the day of 20 as amended from time to time Budget means the budget for the Work attached as Exhibit C and any budget that has been approved by the Parties OPTION TO BE SELECTED IF ALTERNATIVE 2 UNDER ARTICLE 8 IS CHECKED including Negotiation Costs Business Day means a Day on which the banks in specify country are customarily open for business Commercial Terms means ALTERNATIVE 1 TO BE SELECTED IF THE GOVERNMENT HAS ANNOUNCED SELECTION CRITERIA 2006 Study and Bid Group Agreement 4 those terms that the Government has indicated will be used to evaluate the applications submitted ALTERNATIVE 2 the minimum work and fiscal terms conditions and commitments that a Party proposes in the process of determining the contents of an Application These minimum work and fiscal terms conditions and commitments may include the drilling of wells seismic acquisitions minimum work expenditures signature or other bonuses production sharing terms production pricing terms cost oil limits and other similar terms Consequential Loss means any loss damages costs expenses or liabilities caused directly or indirectly by any of the following arising out of relating to or connected with this Agreement or the activities carried out under this Agreement i reservoir or formation damage ii inability to produce use or dispose of hydrocarbons iii loss or deferment of income iv punitive damages v environmental damage vi loss of bargain contract expectation or opportunity and vii other indirect damages or losses whether or not similar to the foregoing Control means the ownership directly or indirectly of ALTERNATIVE 1 fifty percent 50 or more ALTERNATIVE 2 more than fifty percent 50 of the voting rights in a legal entity Controls and Controlled by and other derivatives shall be construed accordingly Day means a calendar day Defaulting Party means a Party failing to pay its share of costs under the terms of this Agreement Effective Date of this Agreement shall be the date first written above Government means the government of and any ministry state owned oil company agency authority organization department office political subdivision and or bureau of the Government having jurisdiction over the Study Area Government Contract means an instrument concluded with or issued by the Government and resulting from an Application conferring the rights to explore for develop produce or market oil or gas including any attachments and any extensions renewals or amendments thereto 2006 Study and Bid Group Agreement 5 Gross Negligence means any act or failure to act whether sole joint contributing or concurrent by a person or entity which was intended to cause or which was in reckless disregard of or wanton indifference to the harmful consequences that person or entity knew or should have known such act or failure would have had on the safety or property of another person or entity OPTION Despite the above Gross Negligence shall not include any error of judgment or mistake made by that person or entity in the exercise in good faith of any function authority or discretion conferred on a person or entity under this Agreement Joint Operating Agreement means an operating agreement relating to a Government Contract into which the Participating Parties shall try to enter based on the most recent Model Form International Operating Agreement of the Association of International Petroleum Negotiators AIPN Minimum Material Provisions means the minimum acceptable terms excluding Commercial Terms to be included in a Government Contract including the expected model Government Contract if any and any required conceptual revisions thereof such as neutral rules and venue for dispute settlement stabilization and repatriation of proceeds that a Party determines under Article 6 must be present for that Party to be willing to enter into a Government Contract Negotiations means any discussions or negotiations carried out after the Application Date with the Government for the execution or award of a Government Contract Negotiation Costs means all actual costs incurred in the Negotiations including transportation living communication courier and reproduction costs as well as wages and salaries of personnel directly engaged in or attributable to the Negotiations Non operator means a Party other than the Operator Notice means a written communication in English that is delivered in accordance with this Agreement Operator means a Party designated to be the operator under the terms of this Agreement Operator Personnel means any director or officer of Operator and ALTERNATIVE 1 2006 Study and Bid Group Agreement 6 the person appointed by the Operator to be in charge of the Work an Application or the Negotiations as applicable ALTERNATIVE 2 the person appointed by the Operator to be in charge of the Work an Application or the Negotiations as applicable and all employees of Operator reporting directly to that person Participating Interest means as to any Party the undivided interest of that Party expressed as a percentage of the total interests of all Parties in the rights obligations liabilities and costs derived from the Parties interest in this Agreement as set out in Article 4 Participating Parties means the Parties who choose to participate in a particular Application Parties means all of the signatories to this Agreement and their respective successors and assigns Party means any of the Parties Report means the report prepared by the Operator under the terms of reference set out in Exhibit B Secondee means an employee of a Non operator or its Affiliate who is seconded to Operator to provide services under a Secondment agreement to be negotiated and entered into between Operator and the Non operator Secondment means placement within Operator s organization according to this Agreement of one or more persons who are employed by a Non operator or its Affiliate Study means the study to be conducted according to the terms of reference set out in Exhibit B Study Area means the area specified in Exhibit A Work means all the activities and operations performed under this Agreement including the activities set forth in Exhibit B the preparation of the Study the writing of the Report and the preparation and submission of Applications with the exclusion of the Negotiations 2006 Study and Bid Group Agreement 7 1 2Interpretation Within this Agreement including the recitals and Exhibits except where expressly provided to the contrary 1 2 1The topical headings are used for convenience only and shall not be construed as having any substantive significance or as indicating that all of the provisions of this Agreement relating to any topic are to be found in any particular Article 1 2 2Reference to the singular includes a reference to the plural and vice versa 1 2 3Reference to any gender includes a reference to all other genders 1 2 4Unless otherwise provided reference to any Article or an Exhibit means an Article or Exhibit of this Agreement and 1 2 5 include and including shall mean include or including without limiting the generality of the description preceding such term and are used in an illustrative sense and not a limiting sense ARTICLE 2 OPERATOR 2 1 is designated as Operator and shall carry out all the activities as provided in this Agreement the Work and the Negotiations Operator shall perform its obligations hereunder in a diligent safe and efficient manner in accordance with good and prudent petroleum industry practices as are generally followed by the international petroleum industry under similar circumstances Operator shall neither gain a profit nor suffer a loss because of being the Operator 2 2Subject to any confidentiality restriction and as may be otherwise provided for in Exhibit B Operator shall provide to those Parties who have paid their Participating Interest share of costs reasonable access to all seismic or well data acquired or interpreted under this Agreement Each Party may at its expense obtain copies of this seismic or well data from Operator provided that making those copies does not unduly interfere with the completion of the Study 2 3Each Party designates the following person as its representative to meetings of the Parties held under this Agreement 2 3 1 specify party representative name representative 2 3 2 specify party representative name representative 2 3 3Each of the representatives may appoint an alternate to act in the place of that representative Any representative or alternate shall have the authority to bind the Party that such person represents 2006 Study and Bid Group Agreement 8 2 4All meetings shall be called by Operator and shall be held at Operator s offices located in specify location of Operator offices where meetings are to be held Any Party may instruct the Operator to call a meeting Operator shall chair all meetings 2 5Operator shall provide the Report to the Parties as soon as reasonably possible but no later than seventy five 75 Days before the Application Date 2 6Operator shall be allowed to incur the costs as set out in the Budget Operator shall be allowed to exceed the Budget by up to ten percent 10 without the prior approval of the Parties provided that any excess expenditures are necessary to complete the Work or Negotiations 2 7Operator shall obtain the unanimous approval of all Parties before hiring any business or professional consultant 2 8The Operator shall promptly notify all Parties or all Participating Parties as applicable of any relevant communication or information received from the Government regarding or affecting the Bid Procedure or any of the Applications submitted under this Agreement 2 9Operator shall determine the number of employees Secondees and contractors the selection of those persons their hours of work and except for Secondees the compensation to be paid to those persons Except in situations requiring particular expertise or involving projects of a technical operational or economically challenging nature there shall be no Secondment Any Secondment shall be subject to the following process and provisions 2 9 1Any Party may propose Secondment for a designated purpose related to the Work Any proposal for Secondment must include the 2 9 1 1 designated purpose and scope of Secondment including duties responsibilities and deliverables 2 9 1 2 duration of the Secondment 2 9 1 3 number of Secondees and minimum expertise qualifications and experience required 2 9 1 4 work location and position within Operator s organization of each Secondee and 2 9 1 5 estimated costs of the Secondment 2006 Study and Bid Group Agreement 9 2 9 2If a proposed Secondment meets the minimum requirements under this Article 2 9 Operator shall as soon as reasonably practicable and in Operator s sole discretion approve or reject any such proposed Secondment 2 9 3Although each Secondee shall report to and be directed by Operator each Secondee shall remain at all times the employee of the Party or its Affiliate nominating that Secondee 2 9 4Any Secondment under this Agreement shall be subject to a separate secondment agreement to be negotiated and entered into between Operator and the employer of the Secondee which secondment agreement shall be consistent with this Article 2 9 1 2 9 5All costs related to Secondment and Secondees that are within the Budget related to the Secondment position shall be charged to the Parties according to their respective Participating Interests 2 9 6If any Secondee acting as the personnel of Operator engages in Gross Negligence that proximately causes the Parties to incur damage loss cost expense or liability for claims demands or causes of action then all damages losses costs expenses and liabilities shall be allocated to the Party who nominated that Secondee in an equivalent manner and to the same extent liability for Gross Negligence is allocated to Operator under this agreement ARTICLE 3 DISCLOSURE OF INFORMATION 3 1 ALTERNATIVE 1 If a Party believes that disclosure of information to the other Parties would be advantageous for the purpose of carrying out the Work or the Negotiations that Party shall disclose the information to the other Parties Each Party which discloses information hereby represents that it has the right to do so but makes no representations or warranties express or implied as to the quality accuracy and or completeness of the information disclosed under this Article ALTERNATIVE 2 The Parties shall disclose to each other all relevant technical and interpretive information pertaining to the Study Area that can be disclosed without violating obligations of 1 NOTE A model Secondment Agreement may be acquired through the AIPN 2006 Study and Bid Group Agreement 10 confidentiality to third parties but this duty of disclosure shall not apply to interpretive materials involving technology deemed by the Party to be proprietary Each Party which discloses information hereby represents that it has the right to do so but makes no representations or warranties express or implied as to the quality accuracy and or completeness of the information disclosed under this Article ARTICLE 4 PARTICIPATING INTERESTS 4 1The Parties shall have the following Participating Interests under this Agreement insert Party s name Insert Participating Interest insert Party s name Insert Participating Interest The Participating Interests may be adjusted as provided in this Agreement or as may otherwise be agreed by the Parties from time to time 4 2Unless otherwise provided in this Agreement all the rights and interests in and under this Agreement shall be owned by the Parties according to their respective Participating Interests 4 3Unless otherwise provided in this Agreement the obligations of the Parties under this Agreement and all liabilities and costs incurred under this Agreement shall be shared by the Parties according to their respective Participating Interests 4 4It is not the intention of the Parties to create nor shall this Agreement be deemed or construed to create a mining or other partnership joint vent
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