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EXHIBIT 10.2
ESCROW AGREEMENT
This Escrow Agreement (herein so called), dated , 1999, made by and
between Xxxxxxxxx Development Corporation, a Delaware corporation ("MD"), and
Bank of America of Texas, N.A. ("Escrow Agent");
WHEREAS, MD will serve as the Managing Partner of Xxxxxxxxx Energy
Partners 99-A L.P. and Xxxxxxxxx Energy Partners 00-A, L.P (the "Partnerships")
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 Partnerships 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 "Programs");
WHEREAS, the Form S-1 Registration Statement (the "Statement") dated ,
1999 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 a Partnership unless at the end of the
subscription period for the Partnership aggregate Subscription Proceeds of over
$1,000,000 have been received and accepted for such 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 a Partnership shall provide MD
with certain information concerning their suitability for investment in a
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 Partnerships,
Escrow Agent shall open a special trust account (the "Account") at Bank of
America of Texas, N.A. for and in the name of Bank of America 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 a 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."
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
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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 a 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 a Partnership,
that portion of accrued and unpaid interest on the Escrow Funds relating to
that Partnership, which Escrow Funds were deposited no fewer than five business
days prior to the termination of the offering of Interests in that Partnership,
attributable to that subscriber as shown on Escrow Agent's records; and (e) to
an account for a Partnership all remaining Escrow Funds attributable to that
Partnership. Notwithstanding the foregoing, no portion of the Escrow Funds may
be paid to a 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
such 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
set forth 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
a Partnership and MD informs the Escrow Agent in writing that aggregate
Subscription Proceeds for Interests in that 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 available to Escrow Agent and are necessary
to make the computations of interest contemplated herein.
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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, 1998; (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 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;
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(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 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
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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:
BANK OF AMERICA OF TEXAS, N.A.
By:
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Address: Attn: Bank of America Trust
0000 Xxxxxx Xxxx
Xxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
XXXXXXXXX DEVELOPMENT CORPORATION
By
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Address: 0000 Xxxxx Xxxxxxxx
Xxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
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