Fill and Sign the Escrow Agreement with Deposit of Earnest Money with Escrow Form

ESCROW AGREEMENT (Deposit of Earnest Money with Escrow Agent in Connection with Planned Purchase of Properties) This Escrow Agreement (the “Escrow Agreement” or the “Agreement”) is effective ______ (the “Effective Date”). It is between ____, a ____ corporation (the “Buyer”), whose address is ______, and ____, a ____ corporation (the “Seller”), whose address is ______, and ____ Bank (the “Escrow Agent”), whose address is ______. Buyer and Seller may be referred to collectively as the “Parties” or individually as a “Party.” Buyer has requested and Seller has agreed to deposit a certain cash sum in an esc row fund to be maintained pursuant to this Escrow Agreement: (i) to evidence and secure the commitment of Buyer to negotiate in good faith toward execution of a mutually sat isfactory written Purchase and Sale Agreement (the “Purchase and Sale Agreement”) with respect to Seller assigning to Buyer those oil and gas properties identified in Exhibit “A”; (ii) upon execution of the Purchase and Sale Agreement, to secure Buyer's performance obligations under the Purchase and Sale Agreement; and, (iii) in consideration of Seller entering into negotiations with Buyer with respect to the Purchase and Sale Agreement. Buyer and Seller desire Escrow Agent to act in the capacity of Escrow Agent under t his Escrow Agreement. In consideration of the mutual covenants and agreements contained in this Escrow Agreement, the Parties agree as follows: 1. Appointment of Escrow Agent. Buyer and Seller appoint Escrow Agent as the escrow agent and Escrow Agent accepts the appointment. 2. Deposit. Upon execution of this Escrow Agreement, Buyer will deliver to Escrow Agent the sum of ____ Dollars ($____) (the “Deposit”) to be held by Escrow Agent in accordance with the terms of this Agreement. Subject to and in accordance with the terms and c onditions of this Agreement, Escrow Agent agrees that it shall receive, hold in escrow, and release or di stribute the Deposit and all earned interest, if any. All interest and other earnings on the Deposit shall become part of the Deposit for all purposes. 3. Investment of the Deposit. Escrow Agent shall invest the Deposit only upon the written request of the Parties specifying the type and identity of the investment to be made . The request shall include all information Escrow Agent may require. Escrow Agent shall not be liable for failure to invest funds absent sufficient written direction. Receipt or investment of t he Deposit shall be confirmed by Escrow Agent as soon as practicable by an account statement unle ss otherwise indicated. Any discrepancies shall be noted by any Party to Escrow Agent withi n a reasonable time prior to the next account statement. Failure to inform Escrow Agent in writing of any discrepancies shall conclusively be deemed confirmation of the accuracy of the account statement in its entirety. Unless otherwise directed, Escrow Agent may use a broker-dea ler of its own selection, including a broker-dealer owned by or affiliated with Escrow Agent or any of it s affiliates. The Parties shall be liable for all brokerage costs and related expe nses incurred under this Agreement. Escrow Agent shall not be liable for and shall be indemnified by the other Parties from all liability for losses on any investments, market risk due to premature l iquidation, or other actions taken in compliance with this Escrow Agreement. Notwithstanding the foregoing, Escrow Agent may, in its discretion, accept directions or instructions whether given orally, by telephone, or by facsimile, which Escrow Agent believe to be genuine, but Escrow Agent shall not be liable for executing, failing to execute, or for any mistake in the execution of any orders except in case of willful default. 4. Disbursement of Deposit. Escrow Agent is authorized to only make disbursements of the Deposit as follows: a. Upon receipt of a written confirmation from Seller and Buyer stating that a Purchase and Sale Agreement has been executed and the contemplated transacti ons has closed, the Deposit to Buyer and any interest earned on the Deposit to Buyer. b. Upon receipt of a written confirmation from Seller and Buyer stating that Buyer has caused the termination of negotiations toward a Purchase and Sale Agreement, the Deposit to Buyer and any interest earned on the Deposit to Seller. c. Upon receipt of a written confirmation from Seller and Buyer stating that Seller has caused the termination of negotiation toward a Purchase and Sale Agreement, the De posit to Buyer and any interest earned on the Deposit to Buyer. d. Upon receipt of a written confirmation from Seller stating that Buyer, through no fault of Seller, fails, refuses, or is unable to close the transactions contemplated by the executed Purchase and Sale Agreement other than as expressly permitted by the Purchase and Sale Agreement, the Deposit and any interest earned on the Deposit to Seller, as agreed l iquidated damages and not as a penalty. e. Upon receipt of a written confirmation from Buyer and Seller stating that Seller, through no fault of Buyer, fails, refuses, or is unable to close the transactions contemplate d by the executed Definitive Agreement other than as expressly permitted by the Purchase a nd Sale Agreement, the Deposit and any interest earned on the Deposit to Buyer, as agreed liquida ted damages and not as a penalty. f. As described on Exhibit “B” to this Escrow Agreement. g. As permitted by this Escrow Agreement, to Escrow Agent. 5. Tax Matters. Each Party shall provide Escrow Agent with its taxpayer identification number documented by an appropriate Form W-8 or W-9 or certification of foreign taxpayer exemption within ____ days after the Effective Date and prior to any investment of the Deposit. Failure to provide those forms may prevent or delay final disbursement of the Deposit or may incur a penalty and cause Escrow Agent to be required to withhold tax on any interest paya ble under the terms of this Agreement. Any payments of income shall be subject to applic able United States withholding regulations then in force. 6. Scope of Undertaking. Escrow Agent's duties and responsibilities shall be purely ministerial and shall be limited to those expressly set forth in this Escrow Agreem ent. Escrow Agent is not a principal, participant, or beneficiary of any transaction underlying this Esc row Agreement and shall have no duty to inquire beyond the terms and provisions of this Agreement. Escrow Agent shall have no responsibility or obligation of any kind in connection with this Escrow Agreement or the Deposit, and shall not be required to deliver all or part of the Deposit or take any action with respect to any matters that might arise in connection with this Agreement or the Deposit, other than to receive, hold, invest, and deliver the Deposit. Escrow Agent shall not be required to exercise any discretion. Escrow Agent shall exercise the degree of care and skill of a prudent man under the circumstances in the conduct of his own affairs and shal l not be liable for any error in judgment, any act or omission, any mistake of law or fact, or for anyt hing it may do or refrain from doing, except for its own willful misconduct or gross negligence. It is the intention of the Parties that Escrow Agent shall never be required to use, advance, or risk its own funds or otherwise incur financial liability in the performance of any of its duties or the exercise of any of its rights and powers under this Agreement. 7. Reliance and Liability. Escrow Agent may rely on and shall not be liable for acting or refraining from acting upon any written notice, instruction or request or other paper furnished to it and reasonably believed by it to be genuine and to have been signed or presented by the proper Party or Parties. Escrow Agent is not responsible or liable in any manner whatever for the sufficiency, correctness, genuineness, or validity of the subject matter of all or part of thi s Escrow Agent, its form or execution, or for the identity or authority of any person executing, or depositing the Agreement. Escrow Agent shall be responsible for holding, investing, and disbursing the Deposit pursuant to this Escrow Agreement, but in no event shall Escrow Agent be liable for any exemplary or consequential damages in excess of Escrow Agent's fee. E scrow Agent shall have no liability for any loss arising from any cause beyond its control, incl uding, but not limited to, the following: (a) the act, failure, or neglect of any other Party or any agent or correspondent prudently selected by Escrow Agent for the remittance of funds; (b) any delay, error, omission, or default of any mail, courier, telegraph, cable, or wireless agency or operator; or, (c) the acts or edits of any government or governmental agency or other Party or entity exercising governmental powers. 8. Right of Interpleader. Should any controversy arise involving one or both of the Parties or any other person, firm or entity with respect to this Escrow Agreement or the Deposit, or should a substitute escrow agent fail to be designated as provided in Section 15., or if E scrow Agent should be in doubt as to what action to take, Escrow Agent shall have the right, but not the obligation, either to (a) withhold delivery of the Deposit until the controversy is resolved, a ny conflicting demands are withdrawn, or its doubt is resolved, or (b) institute a bill of interpl eader in any court of competent jurisdiction to determine the rights of the Parties. The right of Escrow Agent to institute a bill of interpleader shall not, however, be deemed to modify the manner in which Escrow Agent is entitled to make disbursements of the Deposit as provided for in this Agreement other than to tender the Deposit into the registry of the court. In the event it is a Party to any dispute, Escrow Agent shall have the additional right to refer the controversy t o binding arbitration. Should a bill of interpleader be instituted, Escrow Agent be threatene d with litigation, or become involved in litigation or binding arbitration in connection with t his Escrow Agreement or the Deposit, then, as between themselves and Escrow Agent, the Parties to this Agreement jointly and severally agree to pay to Escrow Agent, from the Deposit, its a ttorney's fees and any and all other disbursements, expenses, losses, costs, and damages of Escrow Agent in connection with or resulting from the threatened or actual litigation or arbitra tion prior to any disbursement of the Deposit. 9. Indemnification. The other Parties to this Agreement agree to jointly and severally indemnify Escrow Agent, its officers, directors, partners, employees, agents and counsel (each an “Indemnified Party”) against, and hold each Indemnified Party harmless from any and all l osses, costs, damages, expenses, claims and attorney's fees, including but not limited to cost s of investigation, litigation, tax liability or loss on investments, suffered or incurred by any Indemnified Party in connection with or arising from or out of this Escrow Agreement, except those acts or omissions that may result from the willful misconduct or negligence of an Indemnified Party. 10. Compensation and Reimbursement of Expenses. Escrow Agent shall be compensated in accordance with the fee schedule attached to this Agreement. The Parties joi ntly and severally agree to pay the fees of and expenses incurred by Escrow Agent in performing its obligations or enforcing its rights under this Agreement and to reimburse Escrow Agent for all fees and expenses, including reasonable attorneys' fees, incurred by Escrow Agent in connection with the preparation, operation, administration, and enforcement of this Escrow Agreement and its obligations. In the event the Parties, for any reason, fail to make these payments, all fees and expenses shall be paid from and charged to the Deposit by Escrow Agent, without notice, prior to any disbursement. 11. Lien. Escrow Agent is given a lien on all the rights, title, and interests of the Part ies in the Deposit, to protect Escrow Agent's rights, including without limitation, rights of payment and to indemnity and reimbursement, as provided in this Agreement. This lien may be enforce d by Escrow Agent without notice or by setoff or appropriate foreclosure proceedings. 12. Notice. Any notice, instrument, or other communications required or permitted to be given by one of the Parties to the other under this Escrow Agreement shall be considered properly given if in writing and (a) delivered against receipt, (b) mailed by registere d or certified mail, return receipt requested and postage prepaid, (c) sent by overnight courier, express prepaid, or, (d) sent by facsimile in each case addressed as follows: If to Escrow Agent: If to Buyer: If to Seller: All notices shall be deemed to have been received by the Parties to whom the noti ces are directed (a) upon delivery, if delivered personally or by facsimile, (b) three (3) days afte r the date of transmittal, if sent by mail, or (c) one (1) business day after being deposited with an ove rnight courier. Any Party to this Escrow Agreement may change the address to which communications are to be directed by giving written notice to the other Party in the manner provided in this section. 13. Consultation with Legal Counsel. Escrow Agent may consult with its own or other counsel satisfactory to it concerning any question relating to its duties or responsibili ties or otherwise in connection with this Agreement and shall not be liable for any action taken, suffered, or omitted by it in good faith upon the advice of counsel. 14. Choice of Laws; Cumulative Rights. This Escrow Agreement and the Deposit shall be construed under and governed by the laws of the State of ____ , including its conflict of law rules. 15. Resignation. Escrow Agent may resign upon ____ days' prior notice to the Parties. Upon the effective date of the resignation, Escrow Agent shall deliver the Deposit to a ny substitute escrow agent designated by the Parties. If the Parties fail to designate a substitute escrow agent within ____ days after the giving of notice, Escrow Agent may institute a bil l of interpleader as contemplated by Section 8 above. Escrow Agent's sole responsibility after t he notice period expires shall be to safely keep the Deposit to deliver it to a designa ted substitute escrow agent, if any, or in accordance with the directions of a final order or judgment of a court of competent jurisdiction, at which time Escrow Agent's obligations shall cease and terminate. 16. Severability. If one or more of the provisions of this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect under applicable la w, that invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, and this Escrow Agreement shall be construed as if the invalid, illegal, or unenforceable provision ha d never been contained in the Agreement. 17. Termination. Upon disbursement of all the Deposit as specified in Section 4. above, this Escrow Agreement shall terminate. However, the provisions of Section 9. shall remain in ful l force and effect for so long as Escrow Agent may have any liability. 18. General. The section headings contained in this Escrow Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Esc row Agreement. This Escrow Agreement may be executed simultaneously in three or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The terms and provisions of this Escrow Agreement constit ute the entire agreement between the Parties. This Escrow Agreement or any of its provision m ay be amended, modified, waived, or terminated only by written instrument duly signed by the Partie s or their successors and assigns. This Escrow Agreement shall inure to the benefit of and be binding on the Parties, and their respective heirs, devisees, executors, administrators, personal representatives, successors, trustees, receivers and assigns. Nothing in this Escrow Agreement, express or implied, is intended to confer upon any other person rights or remedies under or by reason of this Escrow Agreement. Neither the existence of this Escrow Agreement nor the disbursement of all or part of the Deposit shall be construed or interpreted as a limita tion or waiver of any rights, remedies, or claims any of the Parties may have under any agreeme nts, at law, in equity, or otherwise. The Parties and Escrow Agent have executed this Escrow Agreement to be effective as of the Effective Date stated above. Buyer Seller Escrow Agent EXHIBIT “A” Description of Properties that are to be the Subject of the Purchase and Sale Agreement. EXHIBIT “B” Direction for Disbursement of Deposit (Section 4.f) in Addition to those Provided for in Section 4.a-d)