AMENDED AND RESTATED WAIVER ESCROW AGREEMENT
Exhibit 99.2
AMENDED AND RESTATED WAIVER ESCROW AGREEMENT
This Amended and Restated Waiver Escrow Agreement (this “Agreement”), dated as of the 9th day
of November, 2009, is made by and among PLLL Holdings, LLC, a Delaware limited liability company
(“Holdings”), Parallel Petroleum Corporation, a Delaware corporation (“Parallel”), Citibank, N.A.,
a national banking association, as administrative agent (“Administrative Agent”) for each of the
lenders (collectively, the “Lenders”) that is a signatory to that certain Fourth Amended and
Restated Credit Agreement, as amended or restated, between Parallel and the Lenders (the “Credit
Agreement”), and Citibank, N.A., a national banking association acting through its Agency & Trust
Department, as escrow agent (“Escrow Agent”).
WHEREAS, Holdings, Parallel, the Administrative Agent and the Escrow Agent have previously
entered into that certain Waiver Escrow Agreement, dated as of October 23, 2009 (the “Original
Agreement”) wherein the parties set forth the terms and conditions pursuant to which the Escrow
Agent shall hold the Commitment Amount (as defined below) in escrow and act as Escrow Agent, and
the parties hereto now desire to amend and restate the Original Agreement in its entirety through
this Agreement on the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto agree as follows:
BACKGROUND:
WHEREAS, Holdings, PLLL Acquisition Co. (“Acquisition”) and Parallel entered into an Agreement
and Plan of Merger, dated September 15, 2009, as amended (the “Merger Agreement”) pursuant to which
Acquisition commenced on September 24, 2009 a tender offer (the “Offer”) for all of the outstanding
shares of common stock of Parallel, together with the associated preferred stock purchase rights
(the “Shares”); and
WHEREAS, the purchase by Acquisition pursuant to the Offer of more than 50% of the Shares and
a subsequent merger of Acquisition with and into Parallel pursuant to the Merger Agreement (the
“Merger”) will violate certain provisions of the Credit Agreement; and
WHEREAS, Parallel, the Lenders and the Administrative Agent entered into that certain letter
agreement, dated September 15, 2009 (the “Letter Agreement”) pursuant to which the Lenders
committed subject to certain terms and conditions set forth therein to execute a waiver of
compliance (the “Waiver”) by Parallel of the provisions of the Credit Agreement that would
otherwise be violated by the consummation of the Offer and the Merger; and
WHEREAS, one condition to the execution of the Waiver is that Holdings or an affiliate of
Holdings deposit into an escrow for the benefit of the Lenders and Parallel (the “Escrow”) the
amount of $158,803,125.00 (the “Commitment Amount”), which is the total purchase price for all of
the 10-1/4% Senior Notes of Parallel (the “Senior Notes”) for which Parallel is required to make an
offer to purchase (the “Change of Control Offer”) upon the consummation of the Offer pursuant to
the terms of Section 4.12 of that certain Indenture, dated as of July 31, 2007 (the “Indenture”),
between Parallel and Xxxxx Fargo Bank, National Association, as trustee;
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WHEREAS, Holdings, Parallel and Administrative Agent desire to enter into this Agreement to
set forth the terms and conditions pursuant to which the Escrow Agent shall hold the Commitment
Amount in escrow and act as Escrow Agent; and
WHEREAS, Holdings, Parallel and Administrative Agent wish to appoint Citibank, N.A. as Escrow
Agent and Citibank, N.A. is willing to accept such appointment to act as Escrow Agent, in each case
upon the terms and conditions of this Agreement.
NOW THEREFORE, the parties hereto agree as follows:
1. Creation of Accounts.
(a) The Escrow Agent agrees to establish and maintain two (2) accounts at Citibank, N.A.: (i)
a segregated deposit account for the benefit of Holdings, Administrative Agent and Parallel
(collectively, the “Holdings Escrow Account”) and (ii) a segregated deposit account for the benefit
of Parallel and the Administrative Agent (the “Parallel Deposit Account”). Upon the closing of the
Offer, Holdings caused the Commitment Amount to be delivered to the Escrow Agent in accordance with
instructions provided by the Escrow Agent, and the Escrow Agent is hereby instructed to deposit the
Commitment Amount in the Holdings Escrow Account and to hold in escrow in the Holdings Escrow
Account in accordance with this Agreement the Commitment Amount, together with all earnings
thereon, if any, after the date hereof (the Commitment Amount, inclusive of all earnings thereon,
being referred to as the “Escrow Funds”). The Escrow Agent acknowledged receipt of the Commitment
Amount. Whenever and to the extent Escrow Funds are distributed pursuant to the Equity Issuance
Instructions provided for in Section 3(a) of this Agreement (the “Distributed Funds”), the Escrow
Agent is hereby instructed to deposit such Distributed Funds in the Parallel Deposit Account and to
hold in escrow in the Parallel Deposit Account in accordance with this Agreement the Distributed
Funds together with all earnings thereon, if any, after the date hereof (the Distributed Funds,
inclusive of all earnings thereon, if any, being referred to as the “Deposit Funds”).
(b) In the event any Senior Notes are to be placed into escrow under Section 3(d) of this
Agreement, Holdings and Parallel agree to use commercially reasonable efforts to establish an
investment account (the “Bond Account”) with an escrow agent other than the Escrow Agent named
herein which will perform the functions set forth in Section 3(d) (the “Bond Agent”), and Holdings
and Parallel further agree that Section 3(d) will govern with respect to the Senior Notes and the
Bond Account. The Administrative Agent will assist Holdings and Parallel in connection with
finding a Bond Agent. The Escrow Agent, in such capacity, shall not have any duties or obligations
with respect to Section 3(d), any Senior Notes or the Bond Account. If and when a Bond Account is
established, the Bond Agent will execute and deliver an amendment to this Agreement or an ancillary
agreement agreed upon by Parallel, Holdings, Administrative Agent and the Bond Agent. Unless
otherwise provided in such amendment or ancillary agreement, the Bond Agent shall have all rights
of the Escrow Agent in this Agreement except those directly relating to the Escrow Funds, the
Holdings Escrow Account, the Deposit Funds and the Parallel Deposit Account and those set forth in
Section 5.
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(c) Upon execution of this Agreement, Holdings, Parallel and Administrative Agent shall each
execute and deliver to the Escrow Agent a certificate of incumbency substantially in the form set
forth for such party in Exhibit A hereto, for the purpose of establishing the identity of the
representative of Holdings, Parallel and Administrative Agent entitled to issue instructions or
directions to the Escrow Agent on behalf of each such party (the person(s) so designated from time
to time, the “Authorized Persons”). In the event of any change in the identity of such
representatives, a new certificate of incumbency shall be executed and delivered to the Escrow
Agent by the appropriate party with a copy simultaneously sent to the other parties hereto. Until
such time as the Escrow Agent shall receive a new incumbency certificate, the Escrow Agent shall be
fully protected in relying without inquiry on any then current incumbency certificate on file with
the Escrow Agent. In the event funds transfer instructions are given (other than in writing at the
time of execution of this Agreement) such funds transfer instructions should contain a selected
test word also evidenced on each certificate of incumbency. Test words must contain at least 8
alphanumeric characters, established at document execution and changed each time a new certificate
of incumbency is executed and delivered in accordance with the above. The parties to this
Agreement acknowledge that these security procedures for funds transfers are commercially
reasonable.
(d) Holdings, Parallel and Administrative Agent acknowledge and agree that all funds held in
the Holdings Escrow Account, the Parallel Deposit Account and all rights with respect thereto
granted under this Agreement are Collateral (as defined in the Credit Agreement) and the
Administrative Agent and the Lenders under the Credit Agreement shall possess all rights thereto
granted to them under the Credit Agreement and the Security Instruments (as defined in the Credit
Agreement) that are a part thereof. Holdings and Parallel agree that they will promptly execute
and deliver to Administrative Agent at its reasonable request all documents, agreements and
instruments necessary or appropriate to carry out the acknowledgement and agreement in the
foregoing sentence. The Escrow Agent, in such capacity, shall have no responsibility, duty,
liability or obligation with respect to the Collateral, the Credit Agreement, other Security
Instruments or any security interest created thereby, and the Escrow Agent is entitled to rely
solely upon the terms of this Agreement.
(e) To help the U.S. government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person who opens an account. When an account is opened, the
Escrow Agent will ask for information that will allow the Escrow Agent to identify relevant
parties. The parties hereby acknowledge such information disclosure requirements and agree to
comply with all such information disclosure requests from time to time from the Escrow Agent.
2. Investment of Escrow Funds and Deposit Funds. (a) The Escrow Agent shall hold
Escrow Funds in the Holdings Escrow Account and any Deposit Funds in the Parallel Deposit Account
in non-interest bearing accounts at Citibank, N.A. with no earnings thereon, unless and until
Holdings gives written instructions to the Escrow Agent that either or both be held in approved
money market funds as directed by Holdings.
(b) The Escrow Agent shall invest the Escrow Funds or Deposit Funds, as the case may be, on
the date of receipt of written instructions from Holdings, provided that such instructions are
received on or before 11:00 a.m. New York City time. Any instructions received
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by the Escrow Agent after 11:00 a.m. New York City time shall be treated as if received on the
following Business Day. For purposes of this Agreement “Business Day” shall mean any day that the
Escrow Agent is open for business.
(c) Any investment direction contained herein may be executed through an affiliated broker
dealer of the Escrow Agent and will be entitled to such usual and customary fee. Neither Citigroup
nor any of its affiliates assume any duty or liability for monitoring the investment rating.
3. Disbursement from Holdings Escrow Account and Parallel Deposit Account. The Escrow
Agent shall continue to hold the Escrow Funds and the Deposit Funds in its possession until
authorized hereunder to distribute them as follows:
(a) pursuant to the joint written instructions in the form of Annex A hereto (the “Equity
Issuance Instructions”) of Holdings and Parallel that Parallel has issued its common stock to
Holdings in exchange for all or a portion of the Escrow Funds, Escrow Agent shall distribute the
amount of the Escrow Funds set forth in the Equity Issuance Instructions from the Holdings Escrow
Account to the Parallel Deposit Account;
(b) pursuant to the joint written instructions in the form of Annex B hereto (the “Note
Purchase Instructions”) of Parallel and Administrative Agent that Parallel is obligated to purchase
Senior Notes pursuant to the Change of Control Offer, Escrow Agent shall distribute the amount of
Deposit Funds set forth in the Note Purchase Instructions from the Parallel Deposit Account to the
Paying Agent under the Indenture as provided in the Note Purchase Instructions;
(c) pursuant to the joint written instructions in the form of Annex C hereto (the “Note
Contribution Instructions”) of Holdings and Administrative Agent that Holdings is obligated to
purchase Senior Notes pursuant to an offer made by Holdings or an affiliate of Holdings (other than
Parallel) to purchase Senior Notes (a “Notes Offer”), Escrow Agent shall distribute the amount of
Escrow Funds set forth in the Note Contribution Instructions from the Holdings Escrow Account to
the party set forth in the Note Contribution Instructions;
(d) in the event that Escrow Funds are distributed pursuant to Section 3(c), (i) immediately
upon the closing of such a Notes Offer, Holdings shall deposit all of the Senior Notes purchased
with the Bond Agent in the Bond Account, (ii) Holdings shall contribute all Senior Notes in the
Bond Account to Parallel and Parallel shall issue its common stock to Holdings in exchange therefor
within 5 days after each acquisition of Senior Notes by Holdings or its affiliates,
and (iii) pursuant to joint written instructions in the form of Annex D hereto (the “Note
Retirement Instructions”) of Holdings and Parallel that Parallel has issued common stock to
Holdings in exchange for the Senior Notes purchased by Holdings or its affiliates, the Bond Agent
shall distribute to Parallel the Senior Notes held in the Bond Account;
(e) pursuant to the joint written instructions in the form of Annex E hereto (the “Release
Date Instructions”) of Holdings and Parallel that either the Change of Control Payment Date (as
defined in the Indenture) with respect to the Change of Control Offer or the date on which the
Change of Control Offer is terminated in accordance with its terms, whichever occurs
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first, has occurred (the earlier thereof to occur, the “Release Date”), the Escrow Agent
shall distribute (i) to Administrative Agent, from the Holdings Escrow Account and the Parallel
Deposit Account, the Parallel Revolving Payment Amount (as hereafter defined) and (ii) to Holdings,
from the Holdings Escrow Account, the Holdings Release Amount (as hereafter defined). The
“Parallel Revolving Payment Amount” shall be an amount (not less than zero) equal to the difference
between (1) the sum of (A) the amount outstanding at the date of determination thereof on the
Revolving Loans under the Credit Agreement and (B) the principal amount outstanding of the Senior
Notes, after taking into account the purchase and retirement of any Senior Notes pursuant to any
written instructions pursuant to the provisions of this Section 3, and (2) $250 million. The
Escrow Agent shall satisfy the distribution required by subsection (i) hereof first from the
Parallel Deposit Account with any balance required satisfied from the Holdings Escrow Account. The
“Holdings Release Amount” shall be the lesser of (Y) the balance remaining in the Holdings Escrow
Account after the distribution of the Parallel Revolving Payment Amount and (Z) $33.8 million. The
Parallel Revolving Payment Amount, when received by the Administrative Agent pursuant to this
Section 3(e), shall be immediately applied by the Administrative Agent to the repayment of the
Revolving Loans in accordance with Section 2(a) of the Credit Agreement. The Escrow Agent shall
conclusively rely on the calculations of the Parallel Revolving Payment Amount and the Holdings
Release Amount specified in the Release Date Instructions, and the Escrow Agent shall have no duty,
obligation, liability or responsibility with respect thereto.
(f) pursuant to the written instructions of the Administrative Agent that the Lenders are
entitled pursuant to Section 14 of the Credit Agreement to set-off and apply the Escrow Funds and
the Deposit Funds to the repayment of indebtedness owed to the Lenders under the Credit Agreement
as though the Escrow Funds and the Deposit Funds are deposits and investment property held by a
Lender or an affiliate of a Lender for the credit or account of Parallel under said Section 14, the
Escrow Agent shall distribute to Administrative Agent all of the Escrow Funds and the Deposit Funds
from their respective accounts in accordance with the instructions provided by the Administrative
Agent. The Administrative Agent shall send a copy of such instructions to Holdings and Parallel;
(g) in the event that the Escrow Agent shall be uncertain as to its duties or rights hereunder
or shall receive instructions with respect to the Escrow Funds or Deposit Funds which, in its sole
determination, are in conflict either with other instructions received by it or with any provision
of this Agreement, it shall be entitled to hold the Escrow Funds or Deposit Funds, or any portion
thereof, in the Holdings Escrow Account or the Parallel Deposit Account, as the case may be,
pending the resolution of such uncertainty to the Escrow Agent’s sole satisfaction, by final
judgment of a court or courts of competent jurisdiction or otherwise, or the Escrow Agent, at its
sole option, may dispose of the Escrow Funds or the Deposit Funds (and any other amounts that
thereafter become part of the Holdings Escrow Account or the Parallel Deposit Account, as the case
may be) with a court of competent jurisdiction pursuant to Section 7 hereof; and
(h) prior to the disbursement of funds from the Holdings Escrow Account or the Parallel
Deposit Account, as the case may be, Escrow Agent may, in its discretion and without any obligation
to do so, seek confirmation of any instructions by telephone callback to the party or parties
providing the instruction through their designated representative(s) as set forth in
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Exhibit A. To ensure the accuracy of the instructions it receives, the Escrow Agent may
record such call backs.
4. Termination. This Agreement shall terminate and be of no further force and effect
on December 31, 2009 or such earlier date on which the final disbursement of the Escrow Funds and
the Deposit Funds has been made hereunder, whether by written direction or otherwise (either such
date, the “End Date”), subject, however, to the survival of obligations specifically contemplated
in this Agreement to survive. Any Escrow Funds and Deposit Funds remaining in the Holdings Escrow
Account or the Parallel Deposit Account on the End Date shall be distributed by the Escrow Agent to
a segregated deposit account to be established by Parallel at Citibank, N.A. After distribution of
any Escrow Funds or Deposit Funds pursuant to this Section 4, the Escrow Agent, in such capacity,
shall not have any further duties or obligations under this Agreement. Parallel, Holdings and
Administrative Agent agree that such account shall be pledged by Parallel to Administrative Agent,
for the benefit of Lenders, to secure Parallel’s obligations under the Credit Agreement and related
loan documents, pursuant to a security agreement in form and substance acceptable to Citibank, N.A.
Said security agreement will provide, among other things, that withdrawals from such account will
be permitted only for the purpose of redeeming and retiring outstanding Senior Notes until all of
the Senior Notes are fully redeemed and retired, at which time any remaining funds in said account
may be used at Parallel’s discretion.
5. Fees. Parallel agrees to pay the Escrow Agent’s fees and expenses as outlined in
Exhibit B attached hereto when due. In the event fees and expenses, or any other obligations owed
to the Escrow Agent (or its counsel), are not paid to the Escrow Agent when due, Escrow Agent is
hereby authorized to pay said fees, expenses and other amounts from the Holdings Escrow Account or
the Parallel Deposit Account.
6. Indemnification. Holdings and Parallel covenant and agree, jointly and severally,
to indemnify the Escrow Agent and its employees, officers and directors (each, an “Indemnified
Party”) for, hold each Indemnified Party harmless from, and defend each Indemnified Party against,
any and all claims, losses, actions, liabilities, costs, damages and expenses of any nature
incurred by any Indemnified Party arising out of or in connection with this Agreement or with the
administration of its duties hereunder, including but not limited to attorney’s fees and expenses,
tax liabilities (including any taxes, interest and penalties but excluding any income tax
liabilities associated with the Escrow Agent’s fees), any liabilities or damages that may result
from any inaccuracy or misrepresentation made in any tax certification provided to the Escrow
Agent, and other costs and expenses of defending or preparing to defend against any claim of
liability, except to the extent such loss, liability, damage, cost and expense shall be caused by
the Indemnified Party’s own gross negligence or willful misconduct. The foregoing indemnification
and agreement to hold harmless shall survive the termination of this Agreement and the resignation
or removal of the Escrow Agent.
7. Interpleader. Escrow Agent shall be entitled to refrain from taking any action
contemplated by this Agreement in the event that it becomes aware of any disagreement between the
parties hereto as to any facts or as to the happening of any contemplated event precedent to such
action, and in any such event, the Escrow Agent shall not be 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 so
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refuse to act and refrain from acting until (i) the rights of all parties having or claiming
an interest in the escrow property shall have been fully and finally adjudicated by a court of
competent jurisdiction, or all differences and doubts shall have been resolved by agreement among
all of the parties, and (ii) the Escrow Agent shall, in the case of adjudication by a court of
competent jurisdiction, have received a final order, judgment or decree by such court of competent
jurisdiction, which order, judgment or decree is not subject to appeal, and in the case of
resolution of differences and doubts by agreement, have received a notice in writing signed by each
of the parties setting forth in detail the agreement.. In the event that (i) any dispute shall
arise between the parties with respect to the disposition or disbursement of any of the assets held
hereunder, or (ii) Escrow Agent shall be uncertain as to how to proceed in a situation not
explicitly addressed by the terms of this Agreement whether because of conflicting demands by the
other parties hereto or otherwise, Escrow Agent shall be permitted to interplead all of the assets
held hereunder into a court of competent jurisdiction, and thereafter be fully relieved from any
and all liability or obligation with respect to such interpleaded assets. The parties hereto other
than Escrow Agent further agree to pursue any redress or recourse in connection with such a
dispute, without making Escrow Agent a party to the same. The costs and expenses (including
reasonable attorneys’ fees and expenses) incurred by the Escrow Agent in connection with such
proceeding shall be paid by, and be the joint and several obligation of, Holdings and Parallel.
8. Tax on Earnings. (a) As between Holdings and Parallel, for purposes of federal and
other taxes based on income, Parallel shall be treated as the owner of the Escrow Funds and the
Deposit Funds and Parallel shall report all income, if any, that is earned on or derived from the
Escrow Funds or the Deposit Funds, as the case may be, as its income in the taxable year or years
in which such income is properly includable and pay any taxes attributable thereto.
(b) Holdings and Parallel agree that, for tax reporting purposes, the Escrow Funds and the
Deposit Funds shall be reported in the year of disbursement on a Form 1099-B, if applicable, in
relation to principal and on a Form 1099-INT for interest earned or on a Form 1099-DIV for
dividends earned in the case of money market investments. Holdings and Parallel agree that this
Agreement does not relieve them of their obligation for tax information reporting under Section
6041 of the Internal Revenue Code of 1986, as amended from time to time (the “Code”), and the
Treasury regulations thereunder, as well as the obligation to report amounts of imputed interest
income to the extent required pursuant to Code Section 483 or Section 1272. The Escrow Agent shall
not be responsible for determining or reporting such imputed interest.
(c) Holdings and Parallel shall upon the execution of this Agreement provide the Escrow Agent
with a duly completed and properly executed original IRS Form W-9 (or applicable Form W-8, in the
case of a non-U.S. person) certifying such party’s U.S. tax identification number if Form W-9 is
provided, or status as a beneficial owner of the escrow property if a Form W-8 is provided.
Holdings and Parallel understand that, in the event valid U.S. tax forms, or other relevant forms,
are not provided to the Escrow Agent, the tax law may require withholding of tax on disbursements
and on a portion of any interest or other income earned on the investment of the escrow property.
(d) Should the Escrow Agent become liable for the payment of taxes, including withholding
taxes relating to any funds, including interest and penalties thereon, held by it pursuant to this
Agreement or any payment made hereunder, Holdings and Parallel agree, jointly
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and severally, to reimburse the Escrow Agent for such taxes, interest and penalties upon
demand. Without limiting the foregoing, the Escrow Agent shall be entitled to deduct such taxes,
interest and penalties from the Escrow Funds and the Deposit Funds in accordance with Section 5
hereof.
(e) Holdings and Parallel acknowledge and agree that none of the payments under this Agreement
are for compensation for services performed by an employee or independent contractor of any of
them.
(f) Citigroup, Inc., its affiliates, and its employees are not in the business of providing
tax or legal advice to any taxpayer outside of Citigroup, Inc. and its affiliates. This Agreement
and any amendments or attachments are not intended or written to be used, and cannot be used or
relied upon, by any such taxpayer or for the purpose of avoiding tax penalties. Any such taxpayer
should seek advice based on the taxpayer’s particular circumstances from an independent tax
advisor.
(g) This Section 8 may be amended by the Escrow Agent as necessary and upon notice to
Holdings, Parallel and the Administrative Agent to conform to tax and regulatory requirements and
any other changes to the current applicable governmental tax laws. The Escrow Agent’s rights under
this Section shall survive the termination of this Agreement or the resignation or removal of the
Escrow Agent.
9. Ministerial Duties and Liability of Escrow Agent. Escrow Agent shall have only
those duties as are specifically provided herein, which shall be deemed purely ministerial in
nature, and shall under no circumstances be deemed a fiduciary or trustee for any of the parties to
this Agreement, and no duties, responsibilities or obligations of the Escrow Agent shall be
inferred or implied. Escrow Agent will not have any responsibility or liability for any actions or
omissions of the Bond Agent. Escrow Agent shall neither be responsible for, nor chargeable with,
knowledge of the terms and conditions of any other agreement, instrument or document between the
other parties hereto, in connection herewith, including without limitation, the Merger Agreement,
the Credit Agreement, the Letter Agreement, the Waiver, or the Indenture, and the Escrow Agent
shall not be responsible for determining or compelling compliance therewith or be otherwise bound
thereby. This Agreement sets forth all matters pertinent to the escrow contemplated hereunder, and
no additional obligations of Escrow Agent shall be inferred from the terms of this Agreement or any
other agreement. Escrow Agent shall not be liable for any action taken or omitted hereunder if
taken or omitted by it in good faith. Escrow Agent shall also be fully protected in relying upon
any written notice, demand, instruction, certificate, or other document which it in good faith
believes to be genuine and shall have no obligation to verify the truth, authenticity, validity or
accuracy thereof. The Escrow Agent may act in reliance upon any signature believed by it to be
genuine and may assume that any person purporting to make any statement or execute any document in
connection with the provisions hereof has been duly authorized to do so. IN NO EVENT SHALL ESCROW
AGENT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY DAMAGES OR EXPENSES ARISING OUT OF THE SERVICES
PROVIDED HEREUNDER, EXCEPT TO THE EXTENT THAT A COURT OF COMPETENT JURISDICTION DETERMINES THAT
SUCH DAMAGES OR EXPENSES DIRECTLY RESULTED FROM ESCROW AGENT’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. UNDER NO CIRCUMSTANCES SHALL ESCROW AGENT BE RESPONSIBLE FOR INDIRECT, SPECIAL,
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CONSEQUENTIAL, OR PUNITIVE DAMAGES, EVEN IF ESCROW AGENT HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES.
The Escrow Agent shall not be required to expend or risk any of its own funds or otherwise
incur any financial or other liability in the performance of any of its duties hereunder and the
Escrow Agent shall not be obligated to take any legal or other action hereunder which might in its
judgment involve or cause it to incur any expense or liability unless it shall have been furnished
with indemnification satisfactory to the Escrow Agent.
The Escrow Agent shall be under no duty to afford the escrow property any greater degree of
care than it gives its own similar property. The Escrow Agent shall not be liable for any damage,
loss or injury resulting from any action taken or omitted in the absence of gross negligence or
willful misconduct.
Notwithstanding any other provision of the Agreement, the Escrow Agent shall not be liable for
the acts or omissions of any nominees, correspondents, designees, agents, subagents or
subcustodians, or for the investment or reinvestment of any escrow property, or any liquidation of
such investment or reinvestment, executed in accordance with the terms of this Agreement,
including, without limitation, any liability for any delays (not resulting from its gross
negligence or willful misconduct as adjudicated by a court of competent jurisdiction) in the
investment or reinvestment of the escrow property, any loss of interest incident to any such
delays, or any loss or penalty as a result of the liquidation of any investment before its stated
maturity date.
The recitals contained in this Agreement shall be taken as the statements of Holdings,
Parallel and the Administrative Agent, and the Escrow Agent shall have no liability therefor.
10. Choice of Counsel, Agents and Mergers. Escrow Agent shall have the right, but not
the obligation, to consult with counsel of its choice and shall not be liable for any action taken
or omitted to be taken by Escrow Agent in good faith in accordance with the opinion or advice of
such counsel. Escrow Agent shall have the right to perform any of its duties hereunder through
agents, attorneys, custodians or nominees. Any banking association or corporation into which
Escrow Agent may be merged, converted or with which Escrow Agent may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which Escrow Agent shall be a
party, or any banking association or corporation to which all or substantially all of the corporate
trust business of Escrow Agent shall be transferred, shall succeed to all Escrow Agent’s rights,
obligations and immunities hereunder without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.
11. Resignation or Removal of Escrow Agent. Escrow Agent may resign as such following
the giving of thirty (30) days prior written notice to the other parties hereto. Similarly, Escrow
Agent may be removed and replaced following the giving of thirty (30) days prior written notice to
Escrow Agent by Parallel with the written consent of Administrative Agent, provided that Parallel
proposes a new Escrow Agent reasonably acceptable to Holdings and Administrative Agent. In either
event, the duties of Escrow Agent shall terminate (30) days after the date of such notice (or as of
such earlier date as may be mutually agreeable); and Escrow Agent shall then deliver the balance of
the moneys or assets then in its possession to a successor
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escrow agent appointed by Parallel and reasonably acceptable to Holdings as evidenced by a
written notice filed with Escrow Agent. If a successor escrow agent has not accepted such
appointment by the end of such 30-day period, the Escrow Agent may deliver the escrow property to
the Administrative Agent. The Escrow Agent shall deduct any outstanding fees, expenses and other
amounts from the Escrow Funds or the Deposit Funds prior to transferring any moneys or assets to a
successor escrow agent or to the Administrative Agent, and upon delivery of the escrow property to
the successor escrow agent or the Administrative Agent, the Escrow Agent shall have no further
duties, responsibilities or obligations hereunder.
12. Attachment of Escrow Funds or Deposit Funds; Compliance with Legal Orders. In the
event that any escrow property under this Agreement shall be attached, garnished or levied upon by
any court order, or the delivery thereof shall be stayed or enjoined by an order of a court, or any
order, judgment or decree shall be made or entered by any court order affecting the property
deposited under this Agreement, Escrow Agent is hereby expressly authorized, in its sole
discretion, to obey and comply with all writs, orders or decrees so entered or issued, which it is
advised by legal counsel of its own choosing is binding upon it, whether with or without
jurisdiction, and in the event that Escrow Agent obeys or complies with any such writ, order or
decree it shall not be liable to any of the parties hereto or to any other person, by reason of
such compliance notwithstanding such writ, order or decree being substantially reversed, modified,
annulled, set aside or vacated.
13. Notices and Instructions. All claims, notices, instructions, requests, demands,
or other communications hereunder shall be in writing and be given in person, by facsimile
transmission or Federal Express or comparable overnight courier service, and shall become effective
(a) on delivery if given in person, (b) when receipt is acknowledged if sent by facsimile
transmission, or (c) on the date of delivery if sent by reputable courier service; provided, that
notices to the Escrow Agent shall only be deemed given upon actual receipt by the Escrow Agent.
All claims, notices, instructions, requests, demands and other communications to the Escrow Agent
must be received on or before 11:00 a.m. New York City time. Any such communications received by
the Escrow Agent after 11:00 a.m. New York City time shall be treated as if received on the
following Business Day.
Notices shall be addressed as follows:
| (a) | If to Holdings: | |||
| PLLL Holdings, LLC | ||||
| Address: 0 Xxxx 00xx Xxxxxx | ||||
| Xxx Xxxx, Xxx Xxxx 00000 | ||||
| Attention: Xxx Xx | ||||
| Facsimile: 000 000-0000 | ||||
| Telephone: 000 000-0000 | ||||
| With a copy to: | ||||
| Akin Gump Xxxxxxx Xxxxx & Xxxx LLP | ||||
| Address: Xxx Xxxxxx Xxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Attention: Xxxx Xxxxxxxxx | ||||
| Facsimile: 000-000-0000 |
||||
| Telephone: 000-000-0000 |
10
| (b) | If to Parallel: | |||
| Parallel Petroleum Corporation | ||||
| Address: 0000 X. Xxx Xxxxxx, Xxxxx 000 | ||||
| Xxxxxxx, XX 00000 | ||||
| Attention: Xxxxxx X. Xxxxxx | ||||
| Facsimile: 000-000-0000 | ||||
| Telephone: 000-000-0000 | ||||
| With a copy to: | ||||
| Xxxxx, Xxxxxxxx & Xxxxx, PC | ||||
| Address: 000 X. Xxxxxxxxxx, Xxxxx 000 | ||||
| Xxxxxxx, XX 00000 | ||||
| Attention: Xxxxx Xxxxxxx | ||||
| Facsimile: 000-000-0000 | ||||
| Telephone: 000-000-0000 | ||||
| (c) | If to Administrative Agent: | |||
| Citibank, N.A. | ||||
| Address: 0000 X. Xxx Xxxxxx, Xxxxx 000 | ||||
| Xxxxxxx, XX 00000 | ||||
| Attention: Xxxxx X. Xxxxxxx | ||||
| Facsimile: 000-000-0000 | ||||
| Telephone: 000-000-0000 | ||||
| (d) | If to Escrow Agent: | |||
| Citibank, N.A. | ||||
| Address: 000 Xxxxxxxxx Xxxxxx, 00 Xx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Attention: Xxxxxxx Xxxxx, Director | ||||
| Facsimile: 000-000-0000 | ||||
| Telephone: 000-000-0000 |
or to such other address as any party may from time to time specify by notice to the other parties
given in accordance with this Section 13.
14. Amendment. This Agreement may not be amended or modified except by a written
agreement executed by Holdings, Parallel, Administrative Agent and Escrow Agent.
15. Governing Law. (a) The parties agree (pursuant to section 5-1401 of the General
Obligations Law of the State of New York) that, to the extent such laws would otherwise not apply,
this Agreement (including this choice-of-law provision) and the rights and obligations of the
parties to this Agreement shall be governed by, construed in accordance with,
11
and all controversies and disputes arising under, in connection with or in relation to this
Agreement shall be resolved pursuant to, the laws of the State of New York applicable to contracts
made and to be wholly performed in the State of New York.
(b) The parties irrevocably and unconditionally submit to the exclusive jurisdiction of the
federal and state courts located in the Borough of Manhattan, City, County and State of New York,
for any proceedings commenced regarding this Agreement, including, but not limited to, any
interpleader proceeding. The parties irrevocably submit to the jurisdiction of such courts for the
determination of all issues in such proceedings and irrevocably waive any objection to venue or
inconvenient forum for any proceeding brought in any such court.
16. Force Majeur. Notwithstanding anything contained in this Agreement to the
contrary, the Escrow Agent shall not incur any liability for not performing any act or fulfilling
any obligation hereunder by reason of any occurrence beyond its control (including, without
limitation, any provision of any present or future law or regulation or any act of any governmental
authority, any act of God or war or terrorism, or the unavailability of the Federal Reserve Bank
wire services or any electronic communication facility).
17. Use of Name. No printed or other material in any language, including
prospectuses, notices, reports, and promotional material which mentions “Citibank”, or “Citigroup”
or “Citi” by name or the rights, powers, or duties of the Escrow Agent under this Agreement shall
be issued by any of the other parties hereto, or on such party’s behalf, without the prior written
consent of the Escrow Agent; provided that this Agreement may be filed as an exhibit to Parallel’s
periodic reports filed with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, and such reports may contain summary descriptions of this Agreement.
18. Successors and Assigns. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and assigns and heirs and
legal beneficiaries.
19. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same
instrument. A faxed signature hereto shall be as legally binding as a signed original hereto.
20. Waiver of Conflicts of Interests. Holdings and Parallel hereby acknowledge and
agree that Citibank, N.A. is acting in multiple capacities under this Agreement and that Citibank,
N.A. may act in its discretion and best interests regardless of such multiple capacities, and
Holdings and Parallel each hereby waive and release any and all claims or causes of action relating
to any potential conflicts of interest arising from Citibank, N.A. acting in multiple capacities
hereunder.
[Signature Page Follows]
12
IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to be executed by
its duly authorized officer effective as of the day and year first above written.
| PLLL HOLDINGS, LLC | ||||||
| By: | /s/ Xxxxxx Xxxxxx
|
|||||
| Printed Name: | Xxxxxx Xxxxxx | |||||
| Title: | Vice President | |||||
| PARALLEL PETROLEUM CORPORATION | ||||||
| By: | /s/ Xxxxxx X. Xxxxxx
|
|||||
| Printed Name: | Xxxxxx X. Xxxxxx | |||||
| Title: | CFO | |||||
| CITIBANK, N.A., as Administrative Agent | ||||||
| By: | /s/ Xxxxx
X. Xxxxxxx |
|||||
The undersigned hereby accepts the terms and provisions of the foregoing Agreement and agrees
to accept, hold, deal with and dispose of any property comprising the Escrow Funds and the Deposit
Funds in accordance with the foregoing Agreement.
| ESCROW AGENT | ||||||
| CITIBANK, N.A. | ||||||
| By: | /s/ Xxxxxxx
Xxxxx |
|||||
13
EXHIBIT A
CERTIFICATE OF INCUMBENCY — PARALLEL
Pursuant to the Amended and Restated Waiver Escrow Agreement, dated as of November 9, 2009
(the “Agreement”), by and among PLLL Holdings, LLC, a Delaware limited liability company
(“Holdings”), Parallel Petroleum Corporation, a Delaware corporation (“Parallel”), Citibank, N.A.,
a national banking association, as administrative agent (“Administrative Agent”) for each of the
lenders (collectively, the “Lenders”) that is a signatory to that certain Fourth Amended and
Restated Credit Agreement, as amended, between Parallel and the Lenders (the “Credit Agreement”)
and Citibank, N.A., a national banking association acting through its Agency & Trust Department, as
escrow agent (“Escrow Agent”), the undersigned hereby certifies that the following named person is
duly appointed, qualified and authorized by Parallel to furnish the Escrow Agent with directions
and instructions on behalf of Parallel relating to any matter concerning the Agreement and the
funds and/or property held pursuant thereto, including, but not limited to, verifying the content
of any wire disbursement instruction.
| Specimen Signature | ||||||||||||||
Name |
||||||||||||||
Title |
||||||||||||||
Phone |
||||||||||||||
E-mail Address |
||||||||||||||
TEST WORD
IN WITNESS WHEREOF, this Certificate of Incumbency has been executed as of the ___ day of
, 200___.
| PARALLEL PETROLEUM CORPORATION: | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Telephone Number: | ||||
A-1
Execution Copy
EXHIBIT A (continued)
CERTIFICATE OF INCUMBENCY — HOLDINGS
Pursuant to the Amended and Restated Waiver Escrow Agreement, dated as of November 9, 2009
(the “Agreement”), by and among PLLL Holdings, LLC, a Delaware limited liability company
(“Holdings”), Parallel Petroleum Corporation, a Delaware corporation (“Parallel”), Citibank, N.A.,
a national banking association, as administrative agent (“Administrative Agent”) for each of the
lenders (collectively, the “Lenders”) that is a signatory to that certain Fourth Amended and
Restated Credit Agreement, as amended, between Parallel and the Lenders (the “Credit Agreement”)
and Citibank, N.A., a national banking association acting through its Agency & Trust Department, as
escrow agent (“Escrow Agent”), the undersigned hereby certifies that the following named persons,
acting singly and requiring only one signature, are duly appointed, qualified and authorized by
Holdings to furnish the Escrow Agent with directions and instructions on behalf of Holdings
relating to any matter concerning the Agreement and the funds and/or property held pursuant
thereto, including, but not limited to, verifying the content of any wire disbursement instruction.
| Specimen Signature | ||||||||||||||
Name |
||||||||||||||
Title |
||||||||||||||
Phone |
||||||||||||||
E-mail Address |
||||||||||||||
TEST WORD
IN WITNESS WHEREOF, this Certificate of Incumbency has been executed as of the ___ day of
, 200_.
| PLLL HOLDINGS, LLC: | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Telephone Number: | ||||
A-2
EXHIBIT A (continued)
CERTIFICATE OF INCUMBENCY – ADMINISTRATIVE AGENT
Pursuant to the Amended and Restated Waiver Escrow Agreement, dated as of November 9, 2009
(the “Agreement”), by and among PLLL Holdings, LLC, a Delaware limited liability company
(“Holdings”), Parallel Petroleum Corporation, a Delaware corporation (“Parallel”), Citibank, N.A.,
a national banking association, as administrative agent (“Administrative Agent”) for each of the
lenders (collectively, the “Lenders”) that is a signatory to that certain Fourth Amended and
Restated Credit Agreement, as amended, between Parallel and the Lenders (the “Credit Agreement”)
and Citibank, N.A., a national banking association acting through its Agency & Trust Department, as
escrow agent (“Escrow Agent”), the undersigned hereby certifies that the following named persons,
acting singly and requiring only one signature, are duly appointed, qualified and authorized by the
Administrative Agent to furnish the Escrow Agent with directions and instructions on behalf of the
Administrative Agent relating to any matter concerning the Agreement and the funds and/or property
held pursuant thereto, including, but not limited to, verifying the content of any wire
disbursement instruction.
| Specimen Signature | ||||||||||||||
Name |
||||||||||||||
Title |
||||||||||||||
Phone |
||||||||||||||
E-mail Address |
||||||||||||||
TEST WORD
IN
WITNESS WHEREOF, this Certificate of Incumbency has been executed as of the ___ day of
, 200_.
| CITIBANK, N.A.: | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Telephone Number: | ||||
A-3
EXHIBIT B
ESCROW AGENT FEE SCHEDULE
ESCROW AGENT FEE SCHEDULE
| $ | 15,000.00 | |||
Quarterly Escrow fee due beginning on December 31, 2009 and at
the end of each fiscal quarter thereafter To be paid by Parallel Petroleum Corporation |
$ | 15,000.00 | ||
| $ | 1,000.00 | |||
Out of pocket expenses, including attorneys’ fees and expenses To be paid by Parallel Petroleum Corporation |
At cost | |||
A-4
ANNEX A — EQUITY ISSUANCE INSTRUCTIONS
[___], 2009
VIA FACSIMILE: 000-000-0000
Citibank, N.A., as Escrow Agent
000 Xxxxxxxxx Xxxxxx, 00 XX
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxx, Director
000 Xxxxxxxxx Xxxxxx, 00 XX
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxx, Director
Re: Joint Written Instructions on Release of Escrow Funds Pursuant to Common Stock Issuance
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Waiver Escrow Agreement, dated as of
November 9, 2009 (the “Agreement”), by and among PLLL Holdings, LLC, a Delaware limited liability
company (“Holdings”), Parallel Petroleum Corporation, a Delaware corporation (“Parallel”),
Citibank, N.A., a national banking association, as administrative agent (“Administrative Agent”)
for each of the lenders (collectively, the “Lenders”) that is a signatory to that certain Fourth
Amended and Restated Credit Agreement, as amended, between Parallel and the Lenders (the “Credit
Agreement”) and Citibank, N.A., a national banking association acting through its Agency & Trust
Department, as escrow agent (“Escrow Agent”). Capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Agreement.
Pursuant to Section 3(a) of the Agreement, Parallel has issued common stock to Holdings in exchange
for the sum of $[___] of the Escrow Funds, and Holdings and Parallel hereby instruct the Escrow
Agent to immediately distribute such sum from the Holdings Escrow Account to the Parallel Deposit
Account.
Test Word:
| Very truly yours, | ||||||
| PLLL HOLDINGS, LLC | ||||||
| By: | ||||||
| Name: | , in [his] | |||||
| capacity as Holdings’ Representative | ||||||
| PARALLEL PETROLEUM CORPORATION | ||||||
| By: | ||||||
| Name: | , in [his] | |||||
| capacity as Parallel’s Representative | ||||||
A-5
ANNEX B – NOTE PURCHASE INSTRUCTIONS
[___], 2009
VIA FACSIMILE: 000-000-0000
Citibank, N.A., as Escrow Agent
000 Xxxxxxxxx Xxxxxx, 00 XX
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxx, Director
000 Xxxxxxxxx Xxxxxx, 00 XX
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxx, Director
| Re: | Joint Written Instructions on Release of Deposit Funds Pursuant to Change of Control Offer |
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Waiver Escrow Agreement, dated as of
November 9, 2009 (the “Agreement”), by and among PLLL Holdings, LLC, a Delaware limited liability
company (“Holdings”), Parallel Petroleum Corporation, a Delaware corporation (“Parallel”),
Citibank, N.A., a national banking association, as administrative agent (“Administrative Agent”)
for each of the lenders (collectively, the “Lenders”) that is a signatory to that certain Fourth
Amended and Restated Credit Agreement, as amended, between Parallel and the Lenders (the “Credit
Agreement”) and Citibank, N.A., a national banking association acting through its Agency & Trust
Department, as escrow agent (“Escrow Agent”). Capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Agreement.
Pursuant to Section 3(b) of the Agreement, Parallel is obligated to purchase Senior Notes pursuant
to the Change of Control Offer, and Parallel and the Administrative Agent hereby instruct the
Escrow Agent to distribute $[___] of the Deposit Funds from the Parallel Deposit Account to [insert
name of the Paying Agent under the Indenture] on or before [ ].
[Insert wiring or other distribution instructions]
Test Word:
| Very truly yours, | ||||||
| PARALLEL PETROLEUM CORPORATION | ||||||
| By: | ||||||
| Name: | , in [his] | |||||
| capacity as Parallel’s Representative | ||||||
| CITIBANK, N.A., as Administrative Agent | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
A-6
ANNEX C — NOTE CONTRIBUTION INSTRUCTIONS
[___], 2009
VIA FACSIMILE: 000-000-0000
Citibank, N.A., as Escrow Agent
000 Xxxxxxxxx Xxxxxx, 00 XX
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxx, Director
000 Xxxxxxxxx Xxxxxx, 00 XX
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxx, Director
| Re: | Joint Written Instructions on Release of Escrow Funds Pursuant to Notes Offer |
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Waiver Escrow Agreement, dated as of
November 9, 2009 (the “Agreement”), by and among PLLL Holdings, LLC, a Delaware limited liability
company (“Holdings”), Parallel Petroleum Corporation, a Delaware corporation (“Parallel”),
Citibank, N.A., a national banking association, as administrative agent (“Administrative Agent”)
for each of the lenders (collectively, the “Lenders”) that is a signatory to that certain Fourth
Amended and Restated Credit Agreement, as amended, between Parallel and the Lenders (the “Credit
Agreement”) and Citibank, N.A., a national banking association acting through its Agency & Trust
Department, as escrow agent (“Escrow Agent”). Capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Agreement.
Pursuant to Section 3(c) of the Agreement, Holdings is obligated to purchase Senior Notes pursuant
to an Offer made by Holdings or an affiliate of Holdings, and Holdings and the Administrative Agent
hereby instruct the Escrow Agent to distribute $[___] of the Escrow Funds from the Holdings Escrow
Account to [___] on or before [
] in accordance with the following instructions.
[Insert wiring or other distribution instructions]
Test Word:
| Very truly yours, | ||||||
| PLLL HOLDINGS, LLC | ||||||
| By: | ||||||
| Name: | , | in [his] | ||||
| capacity as Holdings’ Representative | ||||||
| CITIBANK, N.A., as Administrative Agent | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
A-7
ANNEX D — NOTE RETIREMENT INSTRUCTIONS
[___], 0000
[Xxxx Xxxxx]
[Address]
[Address]
| Re: | Joint Written Instructions on Release of Senior Notes Pursuant to Common Stock Issuance |
Dear [___]:
Reference is made to that certain Amended and Restated Waiver Escrow Agreement, dated as of
November 9, 2009 (the “Agreement”), by and among PLLL Holdings, LLC, a Delaware limited liability
company (“Holdings”), Parallel Petroleum Corporation, a Delaware corporation (“Parallel”),
Citibank, N.A., a national banking association, as administrative agent (“Administrative Agent”)
for each of the lenders (collectively, the “Lenders”) that is a signatory to that certain Fourth
Amended and Restated Credit Agreement, as amended, between Parallel and the Lenders (the “Credit
Agreement”) and Citibank, N.A., a national banking association acting through its Agency & Trust
Department, as escrow agent (“Escrow Agent”). Capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Agreement.
Pursuant to Section 3(c) of the Agreement, Holdings has purchased Senior Notes pursuant to a Notes
Offer made by Holdings or an affiliate of Holdings. Pursuant to Section 3(d) of the Agreement,
Holdings has deposited the Senior Notes with Bond Agent in the Bond Account and Parallel has issued
common stock to Holdings in exchange for the Senior Notes purchase by Holdings. Holdings and
Parallel hereby instruct the Bond Agent to immediately distribute the Senior Notes from the Bond
Account to Parallel.
| Very truly yours, | ||||||
| PLLL HOLDINGS, LLC | ||||||
| By: | ||||||
| Name: | , | in [his] | ||||
| capacity as Holdings’ Representative | ||||||
| PARALLEL PETROLEUM CORPORATION | ||||||
| By: | ||||||
| Name: | , | in [his] | ||||
| capacity as Parallel’s Representative | ||||||
A-8
ANNEX E — RELEASE DATE INSTRUCTIONS
[___], 2009
VIA FACSIMILE: 000-000-0000
Citibank, N.A., as Escrow Agent
000 Xxxxxxxxx Xxxxxx, 00 XX
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxx, Director
000 Xxxxxxxxx Xxxxxx, 00 XX
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxx, Director
| Re: | Certification and Joint Written Instructions on Distribution of Proceeds on Release Date |
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Waiver Escrow Agreement, dated as of
November 9, 2009 (the “Agreement”), by and among PLLL Holdings, LLC, a Delaware limited liability
company (“Holdings” ), Parallel Petroleum Corporation, a Delaware corporation (“Parallel”),
Citibank, N.A., a national banking association, as administrative agent (“Administrative Agent”)
for each of the lenders (collectively, the “Lenders”) that is a signatory to that certain Fourth
Amended and Restated Credit Agreement, as amended, between Parallel and the Lenders (the “Credit
Agreement”) and Citibank, N.A., a national banking association acting through its Agency & Trust
Department, as escrow agent ( “Escrow Agent”). Capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Agreement.
Holdings and Parallel hereby certify that (i) the Parallel Revolving Payment Amount is $[___], (ii)
the Holdings Release Amount is $[___] and (iii) the Release Date has occurred. Pursuant to Section
3(e) of the Agreement, Holdings and Parallel hereby instruct the Escrow Agent to distribute, on
___, 2009, the Parallel Revolving Payment Amount to the Administrative Agent in accordance
with the following wire instructions and the Holdings Release Amount to Holdings in accordance with
the following wire instructions.
[insert wire instructions]
Test Word:
| Very truly yours, | ||||||
| PLLL HOLDINGS, LLC | ||||||
| By: | ||||||
| Name: | , | in [his] | ||||
| capacity as Holdings’ Representative | ||||||
| PARALLEL PETROLEUM CORPORATION | ||||||
| By: | ||||||
| Name: | , | in [his] | ||||
| capacity as Parallel’s Representative | ||||||
A-9
