Fill and Sign the On Information About a Prospect

Page 1 of 3 CONFIDENTIALITY AGREEMENT(On Information about a Prospect) This Agreement is entered into between _____, whose address is _____, referred to as “First Party,” and _____, whose address is _____, referred to as “Second Party.” First and Second Party may be referred to in this Agreement in the singular as a “Party,” or coll ectively as the “Parties.” When executed by both Parties, this Agreement shall be deemed effec tive _____, the “Effective Date”. In connection with discussions between First Party and Second Party concerning First Party's potential acquisition of all or an interest in the prospect known as _____ (the “Prospec t”), depicted and described on Exhibit “A,” First Party is being furnished information (the “Information”) which is either nonpublic, confidential, or proprietary in nature and which may include, but is not necessarily limited to, geological and geophysical data, maps, models, interpretations, title information, and commercial, contractual, and financial information. In consideration of being provided access to and furnished the Information, First Party and Second Party agree as follows: 1. For a period of ____ from and after the Effective Date of this Agreement (the “Term”), First Party shall keep the Information strictly confidential and shall not, without Se cond Party's prior written consent, disclose, in whole or in part, the Information to any third party. First Party shall not photocopy or reproduce the Information in any way, and shall not use it other than in connection with the evaluation for the purposes of a potential acquisition of the Prospect. During the Term, First Party shall also keep confidential the fact that discussions are ta king place between First Party and Second Party concerning the Prospect.2. The Information shall remain the property of Second Party and First Party shall, on Second Party's request (written or oral) and within ____ days of such request, return to Second Party the Information in First Party's possession, and shall deliver to Second Party or destroy all analyses, compilations, forecasts, studies, or other documents or materials prepared by First Party pertaining to the Information. 3. The term “Information” as used in this Agreement shall not include information which: (a) is or becomes generally available to the public other than as a result of a di sclosure in violation of this Agreement; or, (b) is or becomes available to First Party on a nonconfidenti al basis from a source, other than Second Party, which is not prohibited from disclosing it to First Party. 4. First Party may disclose the Information to the following persons, only to the extent necessary to evaluate the acquisition of the Prospect: (a) First Party's employees, officers, and directors who need to examine the Information for the purpose of evaluation; (b) any professional consultant retained by First Party for the purpose of evaluating the Information; or, (c) any bank financing First Party's participation in the potential acquisition, includi ng any professional consultants retained by such bank for the purpose of evaluating the Information. However, First Party shall be responsible for ensuring that when the Information is disclosed, all Page 2 of 3 persons to whom the Information is disclosed shall keep the Information confidential in accordance with this Agreement. First Party shall obtain an advance agreement, in writing, of confidentiality from each person to whom any disclosure is made under (b) and (c) above. This advance agreement may be in the form of a ratification of this Agreement. 5. For a period of _____ from and after the Effective Date of this Agreement, or on the date First Party notifies Second Party it has no interest in acquiring any interest in t he Prospect, whichever is earlier, First Party shall not actively seek any direct or indirect interest in any rights to explore for, develop, or produce oil, gas, or other hydrocarbons from the area, lands and any leases included in the Prospect. If, within that period, First Party acquires any direct or i ndirect interest in the area, lands, or any leases within the Prospect, First Party shall im mediately notify Second Party and shall offer Second Party the opportunity to acquire up to ____% of such interest at First Party's actual cost. If, within ____ days after receipt of that noti ce, Second Party has not accepted the offer, the offer shall expire and Second Party shall have no right to acquire any of the interest acquired by First Party. 6. If First Party, or to whomever First Party transmits the Information, becomes legally compelled to disclose any of it, First Party shall promptly notify Second Party so that Sec ond Party may seek a protective order or other appropriate remedy and/or waive compliance wi th this Agreement with respect to that part of the Information subject to such disclosure. If no suc h protective order or other remedy is obtained, or if Second Party waives compliance wit h this Agreement, First Party shall furnish only that portion of the Information which First Party is advised by written opinion of legal counsel that it is legally required to furnish. First Pa rty shall exercise its best efforts to obtain reliable assurances that the information disclose d would remain confidential in accordance with the terms of this Agreement. 7. Neither Second Party nor its officers, directors, employees, or other representatives, make any representations or warranties, express or implied, as to the quality, accuracy, or completeness of the Information. Without limiting the foregoing, First Party expressly acknowledges the inherent risk of error in the acquisition, processing, and interpretation of geological and geophysical data and any analysis based on the Information. Neither Second Party nor its officers, directors, employees, or other representatives, shall have any liabil ity whatsoever with respect to any use of the Information by First Party or any party to whom First Party discloses the Information in accordance with this Agreement. 8. The term “Second Party” as used in this Agreement includes Second Party and all its affiliates. The term “First Party” as used in this Agreement includes First Party a nd all its affiliates. The term “affiliates” includes any corporation, partnership, trust or other e ntity that, to the extent of at least 50%, directly or indirectly owns or controls, is owned or controlled by, and/or is under common ownership or control with such party, or is a limited partnership of which such party or other affiliate thereof is a general partner. 9. This Agreement shall be governed by, construed under, and enforced in accordance with the substantive laws of the State of ____. Every provision of this Agreement is intended to be severable. If any provision is illegal, invalid or unenforceable for any reason, such illegal ity, Page 3 of 3 invalidity, or unenforceability shall not affect the legality, validity or enforceability of the remainder of this Agreement. This Agreement is executed by the Parties as of the dates adjacent to their signatures, but is deemed effective as of the Effective Date stated above. First Party Date Second Party Date [Exhibit “A” – Description of the Prospect]