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EXHIBIT 10.2
ESCROW AGREEMENT
This Escrow Agreement (herein so called), dated __________, 1997, made
by and between Xxxxxxxxx Development Corporation, a Delaware corporation
("MD"), and NationsBank of Texas, N.A. ("Escrow Agent");
WHEREAS, MD will serve as the Managing Partner of Xxxxxxxxx Energy
Partners 97-A L.P. (the "Partnership") in which general and limited partnership
interests (collectively, the "Interests") are to be offered and sold in an
offering pursuant to the Securities Act of 1933 as amended;
WHEREAS, the Partnership will participate with MD and Xxxxxxxxx Oil
Company ("MOC"), in a program for the purpose of developing oil and gas
prospects through drilling and producing oil and gas thereon (the "Program");
WHEREAS, the Form S-1 Registration Statement (the "Statement") dated
_____________, 1997 relating to the interests to be sold provides that
subscription proceeds for such Interests ("Subscription Proceeds") from
investors who are initially approved by MD will be deposited in an escrow
account with Escrow Agent and may not be contributed to the capital of the
Partnership unless at the end of the subscription period the aggregate
Subscription Proceeds of over $1,000,000 have been received and accepted for
the Partnership and certain other conditions have been met;
WHEREAS, the Statement relating to the Interests to be sold provides
that investors desiring to purchase Interests in the Partnership shall provide
MD with certain information concerning their suitability for investment in the
Partnership by completing the Subscription Agreement (the "Subscription
Agreement"); and
WHEREAS, MD desires that Escrow Agent provide procedures for the
deposit and safekeeping of the Subscription Proceeds and delivery of the
Subscription Agreement to MD subject to the terms of this Escrow Agreement;
NOW, THEREFORE, in consideration of the mutual promises herein set
forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties thereto covenant and
agree as follows:
1. Escrow Period. The term of this Escrow Agreement shall begin on the
effective date of the Statement and shall terminate in accordance with Section
7 below.
2. Escrow Account and Deposit of Escrow Funds. For the Partnership, Escrow
Agent shall open a special trust account (the "Account") at NationsBank of
Texas, N.A. for and in the name of NationsBank of Texas, N.A. as Escrow Agent
under this Escrow Agreement. Following receipt by Escrow Agent of the
Subscription Agreement and Subscription Proceeds for the purchase of Interests
in the Partnership, the Subscription Agreement shall be promptly delivered to
MD and the instruments representing the Subscription Proceeds shall be
deposited and maintained by Escrow Agent in accordance with the terms of this
Escrow Agreement. The Subscription Proceeds so deposited, together with any and
all interest earned thereon, are referred to as the "Escrow Funds."
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3. Duties of Escrow Agent. The Escrow Agent shall have the
following general duties (a) to promptly deliver the Subscription Agreement to
MD; (b) to deposit and safely maintain the Escrow Funds in the Account,
guarding at all times against the commingling thereof with any funds of MD or
its affiliates during the term of this Escrow Agreement; (c) at the direction
of MD, to invest the Escrow Funds in investments that are permissible under
rule 15c2-4 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended, including, without limitation (if
permissible), time deposits, short-term bank certificates of deposit,
short-term governmental obligations and bank money market accounts to be held
by Escrow Agent; (d) to prepare and maintain true and complete records with
respect to the Escrow Funds, including the name of each subscriber and the
portion of the Escrow Funds from time to time attributable to him; and (e) to
disburse the Escrow Funds in accordance with the terms of this Escrow
Agreement.
4. Payment of Escrow Funds. The Escrow Funds, or portions
thereof, shall be paid out by Escrow Agent in accordance with written
instructions from MD as follows: (a) to each subscriber, if any, whose
subscription has been rejected by MD within five business days after the
clearance of those Escrow Funds, that portion of the Escrow Funds attributable
to that subscriber as shown on Escrow Agent's records, including any interest
earned thereon; (b) to each subscriber, if any, whose Subscription Proceeds
have not been contributed to the Partnership prior to the termination of the
offering period for Interests in the Partnership, and any subscriber who may be
rejected as an Investor Partner subsequent to the period described in
Subsection (a) of this Section 4, that portion of the Escrow Funds attributable
to the rejected subscriber as shown on Escrow Agent's records together with any
interest attributable thereto (as calculated by MD); (c) to each subscriber, if
any, whose subscription has been reduced, that portion of the Escrow Funds
equal to the amount of such reduction attributable thereto as shown on Escrow
Agent's records; (d) to MD for distribution to each subscriber within 60 days
of closing of the Partnership, that portion of accrued and unpaid interest on
the Escrow Funds relating to the Partnership, which Escrow Funds were deposited
no fewer than five business days prior to the termination of the offering of
Interests in the Partnership, attributable to that subscriber as shown on
Escrow Agent's records; and (e) to an account for the Partnership all remaining
Escrow Funds attributable to the Partnership. Notwithstanding the foregoing, no
portion of the Escrow Funds may be paid to the Partnership unless the Escrow
Agent shall have the excess of $1,000,000 in Escrow Funds with respect to the
Partnership and MD informs the Escrow Agent in writing that aggregate
Subscription Proceeds for Interests in the Partnership of $1,000,000 or more
have been received and cleared from subscribers that MD initially approves as
suitable to be Investor Partners (as such term is defined in the Statement) in
the Partnership. Notwithstanding the provisions of this Section 4, or any other
provision of this Escrow Agreement, after the Escrow Agent shall have in excess
of $1,000,000 in Escrow Funds with respect to the Partnership and MD informs
the Escrow Agent in writing that aggregate Subscription Proceeds for Interests
in the Partnership of $1,000,000 or more have been received and cleared by
Escrow Agent, upon the written request of MD, Escrow Agent shall disburse all
or any portion of the Escrow Funds to an account established by MD for the
Partnership.
Notwithstanding anything contained herein to the contrary, it is
expressly contemplated by MD and the Escrow Agent that MD shall be solely
responsible for all computations and disbursements of interest and the
preparation and mailing of all forms with respect thereto, including without
limitation Form 1099 as is contemplated in Subsections (b), (c), and (d) of
this Section 4. The Escrow Agent shall deliver to MD from time to time such
records and information which are
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available to Escrow Agent and are necessary to make the computations of interest
contemplated herein.
5. Expenses and Compensation. All expenses incurred by Escrow
Agent in connection with this Escrow Agreement and the compensation of Escrow
Agent set forth in Exhibit 1 hereto shall be charged to MD and MD agrees to pay
promptly all such expenses and compensation following receipt of an invoice
therefor.
6. Escrow Agent. MD and Escrow Agent agree that the following
provisions shall control with respect to the rights, duties, liabilities,
privileges and immunities of Escrow Agent: (a) Escrow Agent is not a party to,
and is not bound by, any agreement or other document out of which this Escrow
Agreement may rise; (b) Escrow Agent is not responsible or liable in any manner
whatsoever for the sufficiency, correctness, genuineness, or validity of the
subject matter of this Escrow Agreement; (c) Escrow Agent shall be protected in
acting upon any written notice, request, waiver, consent, certificate, receipt,
authorization, agreement, power of attorney, or other instrument that Escrow
Agent in good faith believes to be genuine and what it purports to be.
As between MD and the Escrow Agent, MD agrees to indemnify the Escrow
Agent and its officers, directors, employees, agents and attorneys
(collectively, the "Indemnified Parties") against and hold the Indemnified
Parties harmless from any and all losses, costs, damages, expenses, claims, and
attorney's fees suffered or incurred by the Indemnified Parties as a result of,
in connection with or arising from or out of the acts of omissions of any
Indemnified Party in performance of or pursuant to this Escrow Agreement,
except such acts or omissions as may result from such Indemnified Party's
willful misconduct or gross negligence.
All protections and indemnitees benefitting the Escrow Agent (and any
other Indemnified Party) are cumulative of any other rights it (or they) may
have by law or otherwise, and shall survive the termination of the Escrow
Agreement or the resignation or removal of the Escrow Agent.
7. Termination. This Escrow Agreement shall terminate upon the
first to occur of any one of the following: December 31, 1997; (a) the full
disbursement of the Escrow Funds with respect to the final Partnership; (b) the
written agreement of termination by MD and Escrow Agent; or (c) the
dissolution, insolvency, or involuntary bankruptcy of MD or an affiliate
thereof.
8. Miscellaneous.
(a) All notices, demands, requests, and other
communications required or permitted hereunder shall be in writing and shall be
deemed to be delivered when actually received at the address of the addressee
set forth below its name on the signature page of this Escrow Agreement. The
rights and obligations under this Escrow Agreement may not be assigned or
delegated by any party hereto without the prior written consent of the other
party hereto. This Escrow Agreement constitutes the entire agreement and
supersedes all other prior agreements and understandings, whether oral or
written, between the parties hereto with respect to the subject matter hereof;
(b) The Escrow Agent may consult with and rely on the
advice of counsel satisfactory to it at any time in respect to any question
relating to its duties and responsibilities
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hereunder or otherwise in connection herewith, and shall not be liable for any
action taken suffered, or omitted by the Escrow Agent in good faith upon the
advice of such counsel, and shall be fully protected in doing so, and shall be
fully compensated for all costs and expenses in doing so. The Escrow Agent may
act through its officers, employees, agents and attorneys;
(c) Any check included in the Escrow Funds shall be
collected by the Escrow Agent and the proceeds held as part of the Escrow
Funds. No monies shall be disbursed by the Escrow Agent until it has collected
funds. The Escrow Agent may pay out monies held in escrow by its check. The
Escrow Agent shall not be obligated to take any legal action to enforce payment
of any item deposited with it in escrow;
(d) The Escrow Agent shall not be liable for any action
that it may do or refrain from doing in connection herewith, except on account
of its own gross negligence or willful misconduct;
(e) The Escrow Agent's only duty, liability and
responsibility shall be to deliver the Subscription Agreements to MD and to
hold the property as herein directed and to pay and deliver the same to such
persons and under such conditions as are herein set forth;
(f) Should any controversy arise between any party with
respect to this agreement, the Escrow Agreement shall have the right to
institute a xxxx of interpleader in any court of competent jurisdiction to
determine the rights of the parties. Should a xxxx of interpleader be
instituted, or should the Escrow Agent become involved in litigation in any
manner whatsoever on account of this Agreement or the escrow deposit made
hereunder, the obligor, its successors and assigns shall pay the Escrow Agent
reasonable attorneys' fees incurred by the Escrow Agent and shall indemnify and
save the Escrow Agent harmless from any other disbursements, expenses, losses,
costs and damages in connection with and resulting from such litigation, except
such amounts as shall have been caused by the Escrow Agent's gross negligence
or willful misconduct;
(g) The Escrow Agent shall be obligated to perform only
such duties as are expressly set forth herein, and no implied covenants or
obligations shall be inferred from this Agreement;
(h) The Escrow Agent, or any successor to it hereafter
appointed, may at any time resign by giving prior written notice in writing to
the other parties hereto and shall be discharged from its duties hereunder upon
the appointment of a successor Escrow Agent as hereinafter provided. In the
event of any such resignation, a successor Escrow Agent shall be appointed by
the written consent of the parties hereto. In the event that the parties hereto
fail to appoint a successor Escrow Agent within 30 days of the Escrow Agent's
resignation, the Escrow Agent shall have the right to petition a court of
competent jurisdiction to appoint a successor Escrow Agent. Any successor
Escrow Agent shall deliver to the parties hereto a written instrument accepting
the appointment hereunder, and thereupon it shall succeed to all the rights and
duties of the Escrow Agent hereunder and shall be entitled to receive all of
the Escrow Funds then held by the predecessor Escrow Agent hereunder;
(i) THIS ESCROW AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCEPT
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THAT THE PORTIONS OF THE TEXAS TRUST CODE, SECTION 111.001, ET SEQ. OF THE
PROPERTY CODE, V.A.T.S. CONCERNING FIDUCIARY DUTIES AND LIABILITIES OF TRUSTEES
SHALL NOT APPLY TO THIS AGREEMENT. THE PARTIES EXPRESSLY WAIVE SUCH DUTIES AND
LIABILITIES, IT BEING THEIR INTENT TO CREATE SOLELY AN AGENCY RELATIONSHIP AND
HOLD ESCROW AGENT LIABLE ONLY IN THE EVENT OF ITS GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT IN ORDER TO OBTAIN THE LOWER FEE SCHEDULE RATES AS SPECIFICALLY
NEGOTIATED WITH ESCROW AGENT. ANY LITIGATION CONCERNING THE SUBJECT MATTER OF
THIS AGREEMENT SHALL BE EXCLUSIVELY PROSECUTED IN THE COURTS OF DALLAS COUNTY,
TEXAS, AND ALL PARTIES CONSENT TO THE EXCLUSIVE JURISDICTION AND VENUE OF THOSE
COURTS.
IN WITNESS WHEREOF, the undersigned parties have caused this Escrow
Agreement to be signed and attested to by its duly authorized officers, all as
of the date first written above.
ESCROW AGENT:
NATIONSBANK OF TEXAS, N.A.
By:
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Address: Attn: NationsBank Trust
0000 Xxxxxx Xxxx
Xxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
XXXXXXXXX DEVELOPMENT CORPORATION
By:
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Xxxx Xxx Xxxxxxx, Treasurer
Address: 0000 Xxxxx Xxxxxxxx
Xxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
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