Second Amended and Restated Agreement for Sale

ESCROW AGREEMENT

EXHIBIT “”
TO OPERATING AGREEMENT

, (referred to as “First Party”), and , (referred to as “Second Party”) are parties to an Operating Agreement (the “Agreement”) dated , in which First Party agreed to deposit in escrow on or before , its share of the AFE cost for the drilling of the Well, as provided for in the Agreement.

In consideration of this, it is agreed by First and Second Party (sometimes collectively referred to as the “Parties”), and the party selected to retain custody of all escrow funds (the “Escrow Agent”) as follows:

1. On or before , First Party shall deposit or shall wire funds in the amount of , to and made payable to Escrow Agent.

2. All escrow funds received by the Escrow Agent may be invested in certificates of deposit, repurchase agreements, or other short term investments as First Party shall advise Escrow Agent in writing. Escrow Agent shall not be liable for losses on any investments made by it pursuant to and in compliance with those instructions.

3. Escrow Agent is to hold the escrow funds paid into the escrow account under the terms of this Escrow Agreement. Second Party shall furnish Escrow Agent, monthly, with a joint billing statement. Escrow Agent shall, within ten (10) business days from receipt of a joint billing statement, forward the amount specified directly to Second Party out of escrow funds.

4. Escrow Agent shall, monthly, forward to the Parties a summary of all joint interest billings.

5. In the event First Party elects to participate in any completion attempt, it shall deposit , within two (2) business days after that election. Failure to deposit this sum within two (2) business days of its election to participate in the completion attempt shall be deemed an election by First Party to not participate in the completion attempt. The procedure for the payment of completion expenses shall be identical to the procedure provided above for the payment of drilling expenses.

6. In the event the escrow funds are not fully disbursed, the undersigned Parties shall notify Escrow Agent that the remaining Escrow Funds, plus accrued interest, shall be paid to First Party as directed by instructions executed by both Parties.

In the handling of the escrow funds, statements, summaries, and notices, and in determining the disposition to be made of them, Escrow Agent shall be governed entirely by these instructions and shall not be responsible for the validity, sufficiency, or legality of any of these items. Escrow Agent is authorized to act on written authority from an attorney-in-fact for the Parties provided written evidence of authority is first furnished to the Escrow Agent or any officer of the Parties or its parent, of the level of Vice President or higher. The Escrow Agent is authorized and directed to deliver the subject matter of the escrow to First Party in accordance with the written instructions of the Parties.

Where directions or instructions from more than one of the Parties are required, the directions or instructions may be given by separate instruments of similar tenor.

It is further agreed by the Parties that:

1. The Escrow Agent is not a party to, is not bound by, or charged with notice of any other agreement out of which this escrow may arise.

2. The Escrow Agent is acting as a depository only, and is not responsible or liable in any manner whatsoever for the sufficiency, correctness, genuineness, or validity of the subject matter of the escrow, or any part of it, does not warrant title or validity of the funds or of the genuineness of the signatures, for the form of those signatures, or for the identity of authority of any person acting on behalf of any Party to this Agreement.

3. In the event the Escrow Agent becomes involved in litigation in connection with this escrow, all Parties agree, jointly and severally, to indemnify and save the Escrow Agent harmless from all loss, costs, damages, expenses and reasonable attorneys’ fees suffered or incurred by the Escrow Agent as a result of the litigation. The obligation of the Parties under this paragraph shall be performable at the office of the Escrow Agent in .

4. The Escrow Agent shall be protected in acting on written notice, request, waiver, consent, certificate receipt, authorization, power of attorney, or other paper or document which the Escrow Agent, in good faith, believes to be genuine and what it purports to be.

5. The Escrow Agent shall not be liable for anything which it may do or refrain from doing in connection with this Escrow Agreement, provided that it acts in good faith.

6. The Escrow Agent may consult with legal counsel in the event of any dispute or question as to the construction of any of the provisions of this Escrow Agreement or its duties under it, and it shall incur no liability and shall be fully protected in acting in accordance with the opinion and instructions of counsel.

7. In the event of any disagreement between any of the Parties to this Escrow Agreement or between them or any of them and any other person, resulting in adverse claims or demands being made in connection with the subject matter of this escrow, or in the event that the Escrow Agent, in good faith, shall be in doubt as to what action it should take, the Escrow Agent may, at its option, refuse to comply with any claims or demands on it, or refuse to take any other action, so long as the disagreement continues or the doubt exists, and in any event, the Escrow Agent shall not be or become liable in any way or to any person for its failure or refusal to act, and the Escrow Agent shall be entitled to continue to refrain from acting until: (i) the rights of all Parties shall have been fully and finally adjudicated by a court of competent jurisdiction; or, (ii) all differences shall have been adjusted and all doubt resolved by agreement among all of the interested persons, and the Escrow Agent shall have been notified of that, in writing, signed by all persons. The rights of the Escrow Agent under this paragraph are cumulative of all other rights which it may have by law or otherwise.

8. Escrow Agent shall not be liable for any act or thing done or caused to be done by it pertaining to this Escrow Agreement, except for gross negligence or willful misconduct.

9. The Parties agree to indemnify, defend, and hold the Escrow Agent harmless from and against any and all loss, damage, tax, liability, and expense that may be incurred by the Escrow Agent arising out of or in connection with its acceptance of appointment as Escrow Agent under the terms of this Agreement, including the legal costs and expenses of defending itself against any claim or liability in connection with its performance under this Agreement.

10. This Escrow Agreement shall be governed by and construed in accordance with the laws of the State of .

11. Escrow Agent will be paid by First Party according to its regular schedule of fees for acting as Escrow Agent.

This Escrow Agreement has been executed on the dates set opposite the respective signatures of the Parties.

The undersigned bank as Escrow Agent acknowledges receipt of the items described above, and agrees to hold, deal with, and dispose of them in accordance with this Agreement.