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EXHIBIT 2.3
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is made and entered into this 4th day of
June, 1997, by and among XXXXXXXXX ENERGY, INC., a Delaware corporation
("PEC"), XXX-XXX DRILLING COMPANY, a Texas corporation ("Xxx-Xxx"), and FIRST
NATIONAL BANK OF ABILENE, N.A., a national banking association (the "Escrow
Agent").
R E C I T A L S:
A. PEC, Xxxxxxxxx Drilling Company, a Delaware
corporation ("PDC"), and Xxx-Xxx have entered into a Asset Purchase Agreement,
dated of even date herewith (the "Asset Purchase Agreement"), providing for the
purchase by PDC from Xxx-Xxx of 21 drilling rigs, related drilling equipment,
and rolling stock related to the contract drilling operations of Xxx-Xxx and a
shop and yard located in Abilene, Texas.
B. The obligations of PEC and PDC to consummate the
transactions contemplated by the Asset Purchase Agreement are subject to the
conditions set forth in Sections 6.1 and 6.3 of the Asset Purchase Agreement,
including, without limitation, the expiration of the applicable waiting period
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 (such conditions
being hereinafter referred to as the "Closing Conditions").
C. The parties have agreed to deposit the Escrow Funds
(as defined in Section 3 hereof) with the Escrow Agent on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter contained, the parties, intending to be legally bound, hereby agree
as follows:
1. Appointment of Escrow Agent. PEC and Xxx-Xxx hereby
appoint the Escrow Agent as the Escrow Agent to hold and disburse the Escrow
Funds (as defined in Section 3 hereof) in accordance with the terms and
conditions of this Escrow Agreement.
2. Delivery and Receipt of Escrow Funds. Simultaneously
with the execution of this Escrow Agreement, PEC has delivered to the Escrow
Agent, to be held under the terms and conditions set forth herein, the sum of
U.S.$19,000,000 (the "Escrow Funds"). Receipt of the Escrow Funds is hereby
acknowledged by the Escrow Agent. The Escrow Agent agrees to deposit the
Escrow Funds in an interest-bearing escrow account with the Escrow Agent.
Interest shall accrue daily on the Escrow Fund at the rate of 4.25%.
3. Disbursement of Escrow Funds. The Escrow Agent shall
hold the Escrow Funds and shall disburse the Escrow Funds only as follows:
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(a) The Escrow Funds (together with any interest
accrued thereon) shall be promptly returned to PEC upon receipt of a written
notice from PEC stating that:
(i) One or more of the Closing
Conditions have not occurred; or
(ii) PEC has received notice from the
Federal Trade Commission ("FTC") or the United States Department of
Justice ("DOJ") that the FTC or DOJ intends to challenge, delay, or
otherwise prevent the consummation of the transactions contemplated by
the Asset Purchase Agreement.
(b) The Escrow Funds (together with any interest
accrued thereon) shall be paid to PEC (or at PEC's direction) upon written
notice from PEC that the closing documents required by the Asset Purchase
Agreement have been executed by Xxx-Xxx and are satisfactory to PEC.
(c) The Escrow Funds (together with any interest
accrued thereon) shall be automatically paid to PEC on the 45th day after the
date of this Agreement (or, if such 45th day is not a business day, on the
first business day after such 45th day), if the Escrow Agent has not previously
received notice from PEC under Section 3(a) or (b) hereof.
4. Interest on Escrow Funds. All interest earned on the
Escrow Funds shall be held by the Escrow Agent and shall inure to the benefit
of and be paid to PEC or as PEC otherwise instructs in writing. The taxpayer
identification number of PEC is 00-0000000.
5. Compensation. The Escrow Agent shall not be entitled
to any compensation for its services hereunder. The Escrow Agent shall be
entitled to reimbursement for its expenses and disbursements (including
reasonable attorneys' fees) incurred in connection with its duties hereunder.
Reimbursement of such expenses and disbursements shall be made solely by
Xxx-Xxx.
6. Duties and Liability of Escrow Agent.
(a) Duties of Escrow Agent. The Escrow Agent
shall be obligated to perform only the duties that are expressly set forth
herein and need not take notice of and shall not act upon any of the provisions
of the Asset Purchase Agreement. The Escrow Agent's duties hereunder shall be
limited to the safekeeping and investment of the Escrow Funds and to the
disbursement of the Escrow Funds (and interest accrued thereon) held by it in
accordance with written instructions by PEC pursuant to Section 3(a) or (b)
hereof or automatically pursuant to Section 3(c) hereof.
(b) Written Instructions of PEC. Notwithstanding
anything to the contrary herein, the Escrow Agent shall, at all times, have
full right and authority to pay over and
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disburse the Escrow Fund (and any interest accrued thereon) in accordance with
the written instructions provided by PEC pursuant to the terms of Section 3
hereof. The Escrow Agent shall be entitled to assume the genuineness of any
signatures contained on (and the accuracy of any statements made in) any notice
received by the Escrow Agent pursuant to Section 3 hereof and to assume that
the person executing such notice was duly authorized to execute such notice on
behalf of PEC and shall otherwise be entitled to rely and act upon such notice
without independent investigation of the authenticity, genuineness, or due
authorization of such notice or of the accuracy of the statements contained
therein.
(c) No Liability of Escrow Agent. The Escrow
Agent shall not be subject to any liability or any claims by PEC or Xxx-Xxx on
account of disbursement of the Escrow Funds and interest accrued thereon in
accordance with the written instructions from PEC pursuant to Section 3(a) or
(b) hereof or automatically pursuant to Section 3(c) hereof.
7. Termination. Upon disbursement of all of the Escrow
Funds (together with all interest accrued thereon), this Agreement and the
duties of the Escrow Agent hereunder shall automatically terminate.
8. Modification of Agreement. This Agreement contains
the entire agreement and understanding of the parties hereto with respect to
the subject matter hereof and may not be altered, modified, or changed in any
manner whatsoever except by a writing signed by all parties hereto.
9. Notices. All notices shall be in writing and may be
either delivered personally or by courier or by being telecopied, telexed, or
other similar method of facsimile transmission or by being sent by registered
or certified mail, postage prepaid, return receipt requested and addressed to
the receiving party at the address set forth below or at such other address as
the receiving party may notify the other parties hereto in accordance with this
Section 9. Notice shall be effective upon receipt.
(a) If to PEC, to:
Xxxxxxxxx Energy, Inc.
0000 Xxxxxx Xxxxxxx
X.X. Xxxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopier No: (000) 000-0000
Attention: A. Xxxxx Xxxxxxxxx, President and
Chief Operating Officer
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With copies to:
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxx & Xxxxxxxxx LLP
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telecopier No: (000) 000-0000
(b) If to the Escrow Agent, to:
First National Bank of Abilene, N.A.
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Telecopier No: (000) 000-0000
Attention: Xxx X. Xxxxx, Executive Vice
President
(c) If to Xxx-Xxx, to:
Xxxxx Xxxxxxxxxx, Chairman of the Board
Xxx-Xxx Drilling Company
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Telecopier No: (000) 000-0000
With copies to:
Xxxxxxx X. Self, III, Esq.
Xxxxxxx & Xxxxx, X.X.
XxxxxxxXxxx Xxxxx, Xxxxx 0000
000 Xxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxx 00000
Telecopier No: (000) 000-0000
10. Successors and Assigns. The terms of this Agreement
shall be binding upon, and the benefits of this Agreement shall inure to, the
successors and assigns of the parties hereto.
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11. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed on its behalf.
XXXXXXXXX ENERGY, INC.
By:
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A. Xxxxx Xxxxxxxxx, President and Chief
Operating Officer
ATTEST:
---------------------------------
Xxxxx X. Xxxxx, Secretary
XXX-XXX DRILLING COMPANY
By:
----------------------------------------
Xxxxx Xxxxxxxxxx, Chairman of the Board
ATTEST:
---------------------------------
Xxxxx Xxxxxx, Secretary
FIRST NATIONAL BANK OF ABILENE, N.A.
By:
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Xxx X. Xxxxx, Executive Vice President
ATTEST:
---------------------------------
, Secretary
