ESCROW AGREEMENT NO. 20101037
Exhibit 10.2
ESCROW AGREEMENT
     THIS ESCROW AGREEMENT (this “Agreement” or the “Escrow Agreement”) is made
and entered into as of November __, 2010, by and among NYTEX FDF Acquisition,
Inc. a Delaware corporation (“NYTEX”), Diana Istre Francis (“Diana Francis”),
Bryan K. Francis (the “Seller Representative”), and The F&M Bank & Trust Company
(the “Escrow Agent”). NYTEX, Diana Francis, Seller Representative and the Escrow
Agent are sometimes referred to herein as the “Parties.”
RECITALS
     A. Pursuant to that certain Membership Interests Purchase Agreement dated
of even date herewith (the “Purchase Agreement”), by and among NYTEX Energy
Holdings, Inc. (“Buyer”), Francis Drilling Fluids, Ltd., Francis Oaks, L.L.C.
(“Oaks”), Seller Representative, Diana Francis, Michael G. Francis and Mackey
Francis (collectively “Owners”), NYTEX (or one of its Affiliates) will acquire
from the Owners all of the outstanding membership interests of Oaks. Unless
otherwise defined herein, capitalized terms used herein shall have the meanings
assigned to them in the Purchase Agreement. A copy of the executed Purchase
Agreement is attached hereto as Exhibit C.
     B. As permitted in Section 12.3 of the Purchase Agreement, Buyer assigned
its rights to purchase all of the outstanding membership interests of Oaks to
NYTEX, its wholly-owned subsidiary.
     C. The Purchase Agreement provides that on the Closing Date, NYTEX, Diana
Francis, Seller Representative and the Escrow Agent shall execute and deliver
this Agreement.
AGREEMENTS
     Section 1. Establishment of Escrow Account; Appointment of Escrow Agent.
          (a) Pursuant to the Purchase Agreement, on the date hereof, NYTEX will
deliver to the Escrow Agent (i) $1,800,000 by wire transfer of immediately
available funds to a non-interest bearing account (the “Escrowed Cash”),
(ii) the Note, and (iii) the Michael Francis Escrow Stock which consists of
625,000 restricted shares of Buyer (together with the Escrowed Cash and the
Note, the “Escrowed Property”), to be deposited in an account designated by the
Escrow Agent as the “Escrow Account.”
          (b) The Escrowed Property shall be held, administered and disposed of
by the Escrow Agent in accordance with the terms and conditions hereinafter set
forth. The Escrow Agent, by executing this Agreement, accepts the appointment as
Escrow Agent and agrees to hold and distribute all Escrowed Property in
accordance with the terms of this Agreement.
          (c) NYTEX shall execute and deliver to the Escrow Agent a certificate
of authorized persons substantially in the form of Exhibit A hereto for the
purpose of establishing the identity of the representatives of NYTEX and
entitled to issue instructions or directions to the Escrow Agent on behalf of
NYTEX. Seller Representative shall be entitled to issue instructions
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or directions to the Escrow Agent on behalf of Michael G. Francis, Mackey
Francis and Bryan Francis (the “Appointing Sellers”). Diana Francis shall be
entitled to issue instructions or directions to the Escrow Agent on behalf of
Diana Francis. Until such time as the Escrow Agent shall receive a new
certificate of authorized persons, the Escrow Agent shall be fully protected
without inquiry in relying on any then current certificate of authorized persons
on file with the Escrow Agent.
     Section 2. Investment of Escrowed Property. The Escrow Agent shall invest
the cash portion of the Escrow Account in a non-interest bearing account unless
otherwise instructed in writing from time to time by a joint written instruction
of all of NYTEX, Diana Francis and Seller Representative. The Escrow Agent shall
not be liable for failure to invest or reinvest funds absent such authorization
and written direction. It is expressly agreed and understood by the Parties that
the Escrow Agent is not providing investment advice or recommendations and that
the Escrow Agent, if instructed to invest by the Parties, shall not in any way
whatsoever be liable for losses on any investments, including, but not limited
to, losses from market risks due to premature liquidation or resulting from
other actions taken pursuant to this Escrow Agreement. NYTEX, Diana Francis and
Seller Representative shall provide the Escrow Agent with their respective
taxpayer identification numbers documented by an appropriate Form W-8 or Form
W-9 upon execution of this Escrow Agreement. Any payments of income shall be
subject to applicable withholding regulations then in force in the United States
or any other jurisdiction, as applicable. The Escrow Agent shall deliver to each
of NYTEX, Diana Francis and Seller Representative promptly following the
conclusion of each fiscal quarter (i.e. March 31, June 30, September 30 and
December 31) a written statement of account with respect to the investment of
the Escrow Account.
     Section 3. Distribution of Escrow Funds. The Escrowed Property is intended
to provide a non-exclusive source of funds to satisfy (i) the adjustment to the
Purchase Price, if any, as set forth in Sections 2.5(d), (e) and (f) of the
Purchase Agreement and (ii) Damages for which Buyer Indemnitees are entitled to
indemnification pursuant to Article IX of the Purchase Agreement. The Escrowed
Property shall be held and disbursed only as follows:
          (a) Purchase Price Adjustment. Within two (2) Business Days from the
Escrow Agent’s receipt of notification by each of NYTEX, Diana Francis and
Seller Representative that the Closing Statement is finally agreed upon pursuant
to the provisions of Sections 2.5(d) and (e) of the Purchase Agreement, the
Escrow Agent shall disburse to NYTEX any monies due to NYTEX under Section
2.5(f) of the Purchase Agreement via wire transfer to an account designated in
writing by NYTEX.
          (b) Indemnification.
               (i) In the event that a Buyer Indemnitee asserts a claim or
claims against any or all of the Sellers which arises out of or relation to any
matter with respect to which such Buyer Indemnitee asserts that it is entitled
to be indemnified by any or all of the Sellers pursuant to Article IX of the
Purchase Agreement (collectively, the “Claims,” each a “Claim”), NYTEX shall
deliver written notice of the Claim (the “Notice of Claim”) to each of Diana
Francis, Seller Representative and Escrow Agent on or prior to the Release Date
(defined below). The Notice of Claim (i) shall state that it is a Notice of
Claim under Section 3(b) of the Escrow
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Agreement, (ii) shall state in reasonable detail the nature of the alleged
liability, (iii) shall state the amount of the payment that Buyer Indemnitee
claims it is entitled to receive from the Escrowed Property in respect of
Damages arising out of the Claim described in such Notice of Claim and the
identity of the Sellers who are obligated to indemnify the Buyer Indemnitees for
such Damages, and (iv) shall provide a reasonably particularized statement
explaining the basis for such Claim including the calculation of each element of
the alleged Damages. If (A) any Appointing Seller is named as being obligated to
indemnify any of the Buyer Indemnitees in such Notice of Claim, Seller
Representative: and (B) Diana Francis is named as being obligated to indemnify
any of the Buyer Indemnitees in such Notice of Claim, Diana Francis: shall have
the right prior to 5:00 p.m. Central Time on the 15th day following the receipt
by Escrow Agent of the Notice of Claim (the “Dispute Period”) in which to notify
Escrow Agent and NYTEX that he or she disputes the Claim by delivering written
notice of such dispute (the “Notice of Dispute”) to Escrow Agent and NYTEX. The
Notice of Dispute (i) shall state that it is a Notice of Dispute under Section
3(b) of this Escrow Agreement, (ii) may contest all or any portion of the Notice
of Claim based on a dispute concerning the existence of a Claim, Sellers’
liability, all or any portion of the alleged Damages or any other related
matter, (iii) shall state the amount of the Claim that is disputed (the
“Disputed Claim”), and (iv) shall state in reasonable detail the basis for such
dispute.
               (ii) If neither Diana Francis nor Seller Representative properly
delivers a Notice of Dispute within the Dispute Period, each of Diana Francis
and Seller Representative shall (A) have irrevocably waived the right to contest
the distribution of any amounts set forth in the Notice of Claim, (B) be deemed
to have acknowledged and agreed that NYTEX or the specified Buyer Indemnitee is
entitled to payment of such amounts and (C) be deemed to have directed Escrow
Agent to disburse such payment in accordance with NYTEX’s instructions. If Diana
Francis properly delivers a Notice of Dispute within the Dispute Period but
Seller Representative does not, Seller Representative shall (i) have irrevocably
waived the right to contest the distribution of any amounts set forth in the
Notice of Claim, (ii) be deemed to have acknowledged and agreed that NYTEX or
the specified Buyer Indemnitee is entitled to payment of such amounts and
(iii) be deemed to have directed Escrow Agent to disburse such payment in
accordance with NYTEX’s instructions. If Seller Representative properly delivers
a Notice of Dispute within the Dispute Period but Diana Francis does not, Diana
Francis shall (a) have irrevocably waived the right to contest the distribution
of any amounts set forth in the Notice of Claim, (b) be deemed to have
acknowledged and agreed that NYTEX or the specified Buyer Indemnitee is entitled
to payment of such amounts and (c) be deemed to have directed Escrow Agent to
disburse such payment in accordance with NYTEX’s instructions. In any such event
specified above, Escrow Agent shall disburse the undisputed portion of such
Claims out of the Escrowed Property to Buyer within two (2) business days
following the expiration of the Dispute Period. Additionally, if a Notice of
Dispute is properly and timely delivered but only a portion of a Claim is
disputed, then Escrowed Property equal to the undisputed portion of the Claim
shall be promptly disbursed in accordance with NYTEX’s written payment
instructions to Escrow Agent, and Escrowed Property in the amount of the
Disputed Claim shall be held by Escrow Agent until disbursement thereof is
required as provided in Section 3(b)(iii).
               (iii) Escrow Agent shall disburse Escrowed Property being held
subject to a Disputed Claim pursuant to Section 3(b)(i) and (ii) only upon
Escrow Agent’s receipt of either (a) joint written instructions for disbursement
of such funds executed by NYTEX on the
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one hand, and whichever of Seller Representative and/or Diana Francis that has
property disputed the Claim, on the other hand, or (b) a final order of a court
having jurisdiction over the Disputed Claim directing payment of Escrowed
Property in respect of such Disputed Claim (a “Final Determination”) and
accompanied by a letter or other written evidence from the law firm of the
prevailing Party certifying the finality of the order.
               (iv) At no time shall the Escrow Agent permit the Escrowed
Property to be reduced due to disbursement(s) to Seller Representative or Diana
Francis to an amount which is less than the sum of the aggregate dollar amounts
of (a) all Claims for which a Notice of Claim has been delivered to Escrow Agent
but as to which the Dispute Period has not expired, (b) all Disputed Claims
(collectively, “Unresolved Claims”), (c) the undisputed portion of any Claim
which has not yet been paid to NYTEX under Section 3(b)(ii), and (d) any amounts
due but not yet paid to NYTEX under Section 3(a) of this Escrow Agreement.
          (c) Payment Waterfall. All amounts due to NYTEX pursuant to Sections
3(a) and (b) above shall be paid in the following order:
               (i) First, from the Escrowed Cash until depleted;
               (ii) Second, on an equal basis, (A) by reducing the original
principal amount due under the Note until depleted, and (B) from the Michael
Francis Escrow Stock until depleted; and
               (iii) Third, from the remaining Michael Francis Escrow Stock.
Notwithstanding the above, to the extent a Notice of Claim identifies less than
all Sellers as being responsible, the payments made to NYTEX or a Buyer
Indemnitee shall be apportioned and allocated among the Sellers such that the
Seller or Sellers who are not obligated to indemnify a Buyer Indemnitee for
Damages for such Claim are not charged in the payment waterfall above for such
amounts, and the Sellers who are responsible for such amounts shall indemnify
the Sellers who are not responsible for such amounts. To the extent any payment
pursuant to Sections 3(a) or (b) of this Escrow Agreement is made by a reduction
on the amount owed under the Note or from the Michael Francis Escrow Stock under
Section 3(c)(ii) above and all Sellers are liable therefor, the amount of the
Note and the Michael Francis Escrow Stock disbursed on the Release Date shall be
apportioned so that Michael G. Francis and Diana I. Francis shall bear the total
cost of all payments equally. The value of the Michael Francis Escrow Stock
shall be deemed to be $2.00 per share for all purposes hereunder. Upon the
request of the Escrow Agent, upon the submission of the Note and the Michael
Francis Escrow Stock to NYTEX as payment of amounts due hereunder to NYTEX, to
the extent such amounts do not exhaust the value of the Escrowed Property, NYTEX
agrees to issue a replacement Note and replacement stock certificates for the
Michael Francis Escrow Stock in the then current remaining amounts and deliver
them to the Escrow Agent for holding such Escrowed Property hereunder.
          (d) On the nine-month anniversary of the date of this Escrow Agreement
(the “First Distribution Date”), Escrow Agent shall disburse up to 250,000
shares of the Michael Francis Escrow Stock to Seller Representative. The amount
of shares to be disbursed on the First Distribution Date shall be reduced by the
aggregate dollar amount (on a $2.00 per share
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basis) of (i) any Unresolved Claims, (ii) the amount of any Purchase Price
adjustment amount under Section 3(a) that has not been paid and disbursed to
Buyer out of the Escrowed Property or otherwise resolved, and (iii) the
aggregate amount of the Escrowed Property distributed by Escrow Agent in
accordance with the terms and conditions of this Escrow Agreement on or prior to
the First Distribution Date.
          (e) Release Date. Subject to Section 3(b)(iv) of the Escrow Agreement,
on the date that is 18 months from the Closing Date (the “Release Date”), the
remaining Escrowed Property, if any, shall be disbursed to Diana Francis (in the
case of the Note), Seller Representative (in the case of the Michael Francis
Escrow Stock) and, subject to any adjustments or allocations required under
Section 3(c) above, 56.9% of the remaining Escrowed Cash to Seller
Representative and 43.1% of the remaining Escrowed Cash to Diana Francis. NYTEX
shall provide written instructions to the Escrow Agent to effect such
disbursements. The Escrow Agent shall have no duty to independently monitor,
determine or verify compliance with the provisions of the Purchase Agreement in
the event of any distribution hereunder.
          (f) Buyer will make the quarterly payments of principal due under the
Note to the Escrow Agent. All Parties agree that any such payments will be
considered part of the Note for all purposes and shall not be classified as
Escrowed Cash.
     The Escrowed Property shall only be disbursed by the Escrow Agent in
accordance with the requirements of this Section 3, Section 5(j) and Section
5(l) hereof.
     Section 4. No Distribution of Expenses. None of NYTEX, Diana Francis or
Seller Representative shall be entitled to reimbursement out of the Escrowed
Property for any costs and expenses incurred by them in connection with
exercising their rights or performing their duties under this Agreement.
     Section 5. The Escrow Agent. To induce the Escrow Agent to act hereunder,
it is further agreed by NYTEX, Diana Francis and Seller Representative that:
          (a) The Escrow Agent shall not be required to invest any Escrowed
Property held hereunder except as directed in this Agreement. Uninvested
Escrowed Property held hereunder shall not earn or accrue interest.
          (b) This Agreement expressly sets forth all the duties of the Escrow
Agent with respect to any and all matters pertinent hereto. No implied duties or
obligations shall be read into this Agreement against the Escrow Agent. The
Escrow Agent shall not be bound by the provisions of any agreement among the
other Parties hereto except this Agreement.
          (c) The 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 for any of the Parties to this
Agreement. The Escrow Agent will never be required to advance its own funds or
incur personal financial liability in performing its duties under this
Agreement. The Escrow Agent shall have the right to perform any of its duties
hereunder through agents, attorneys, custodians or nominees. This Agreement sets
forth all matters pertinent to the Escrow Account contemplated hereunder, and no
additional obligations of the Escrow Agent shall be inferred from the terms of
this Agreement or any other
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Agreement. IN NO EVENT SHALL THE ESCROW AGENT BE LIABLE, DIRECTLY OR INDIRECTLY,
FOR ANY DAMAGES OR EXPENSES ARISING OUT OF THE SERVICES PROVIDED HEREUNDER,
INCLUDING ITS OWN NEGLIGENCE, BUT EXCLUDING ITS OWN BAD FAITH, GROSS NEGLIGENCE
AND WILLFUL MALFEASANCE. IN NO EVENT SHALL THE ESCROW AGENT BE LIABLE, DIRECTLY
OR INDIRECTLY, TO ANY PARTY FOR SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, OR
LOST PROFITS OR LOSS OF BUSINESS, ARISING UNDER OR IN CONNECTION WITH THIS
AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH LOSSES OR DAMAGES AND
REGARDLESS OF THE FORM OF ACTION. Without limiting the foregoing, the Escrow
Agent shall in no event be liable in connection with its investment or
reinvestment of any cash held by it hereunder in good faith, in accordance with
the terms hereof, including without limitation, any liability for any delays
(not resulting from its gross negligence or willful misconduct) in the
investment or reinvestment of the Escrowed Property or any loss of interest
incident to any such delays. This Section 5(c) shall survive notwithstanding any
termination of this Agreement or the resignation or removal of the Escrow Agent.
          (d) THE ESCROW AGENT IS HEREBY SEVERALLY, AND NOT JOINTLY, INDEMNIFIED
AND HELD HARMLESS BY NYTEX, DIANA FRANCIS AND SELLER REPRESENTATIVE FROM ALL
LOSSES, LIABILITIES, COSTS AND EXPENSES, INCLUDING ATTORNEY FEES AND EXPENSES,
WHICH MAY BE INCURRED BY IT AS A RESULT OF ITS ACCEPTANCE OF THE ESCROW ACCOUNT
OR ARISING FROM THE PERFORMANCE OF ITS DUTIES HEREUNDER, UNLESS SUCH LOSSES,
LIABILITIES, COSTS AND EXPENSES RESULTED FROM THE ESCROW AGENT’S BAD FAITH,
GROSS NEGLIGENCE OR WILLFUL MALFEASANCE. SUCH INDEMNIFICATION SHALL SURVIVE THE
ESCROW AGENT’S RESIGNATION OR REMOVAL, OR THE TERMINATION OF THIS AGREEMENT.
          (e) The Escrow Agent shall be entitled to rely in good faith upon any
order, judgment, certification, demand, notice, instrument or other writing
delivered to it hereunder in accordance with the terms hereof without being
required to determine the authenticity or the correctness of any fact stated
therein or the propriety or validity or the service thereof. The Escrow Agent
may act in reliance upon any instrument or signature believed by it in good
faith to be genuine and may assume that any person purporting to give receipt or
advice or make any statement or execute any document in connection with the
provisions hereof has been duly authorized to do so.
          (f) The Escrow Agent may act pursuant to the advice of counsel with
respect to any matter relating to this Agreement and shall not be liable for any
action taken or omitted in good faith in accordance with such advice.
          (g) The Escrow Agent does not have any interest in the Escrowed
Property deposited hereunder but is serving as escrow holder only and having
only possession thereof. Any payments of income from the Escrow Account shall be
subject to withholding regulations then in force with respect to United States
taxes. It is understood that the Escrow Agent shall be responsible for income
reporting only with respect to income earned on investment of the Escrowed
Property and is not responsible for any other reporting. This Section 5(g) shall
survive notwithstanding any termination of this Agreement or the resignation or
removal of the Escrow Agent.
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          (h) The Escrow Agent makes no representation as to the validity,
value, genuineness or the collectability of any security or other document or
instrument held by or delivered to it.
          (i) The Escrow Agent shall not be called upon to advise any Party as
to the wisdom in selling or retaining or taking or refraining from taking any
action with respect to any securities or other property deposited hereunder.
          (j) The Escrow Agent (and any successor escrow agent) may at any time
resign as such by delivering the Escrowed Property to any successor escrow agent
jointly designated by the other Parties hereto in writing or to any court of
competent jurisdiction. The resignation of the Escrow Agent will take effect on
the date (the “Resignation Date”) which is the earlier to occur of: (i) the date
a successor is appointed (including a court of competent jurisdiction) or
(ii) the date which is 30 days after the date of delivery of its written notice
of resignation to the other Parties hereto. Upon the appointment of a successor
escrow agent, such successor escrow agent shall deliver written notice to each
of NYTEX, Diana Francis and Seller Representative on the appointment of such
successor escrow agent. If at the Resignation Date the Escrow Agent has not
received a designation of a successor escrow agent, the Escrow Agent’s sole
responsibility after the Resignation Date shall be to safekeep the Escrowed
Property until receipt of a designation of successor escrow agent or a joint
written disposition instruction by the other Parties hereto.
          (k) The Escrow Agent shall have no responsibility for the contents of
any writing of any third party contemplated herein as a means to resolve
disputes and may rely in good faith without any liability upon the contents
thereof.
          (l) In the event of any disagreement between NYTEX, on the one hand,
and Seller Representative and Diana Francis, on the other hand, resulting in
adverse claims or demands being made in connection with the Escrowed Property,
or in the event that the Escrow Agent in good faith is in doubt as to what
action it should take hereunder, the Escrow Agent shall be entitled to retain
the Escrowed Property until the Escrow Agent shall have received (i) a Final
Determination (as defined below) directing delivery of the Escrowed Property or
(ii) a written agreement executed by each of NYTEX, Diana Francis and Seller
Representative directing delivery of the Escrowed Property, in which event the
Escrow Agent shall disburse the Escrowed Property in accordance with such Final
Determination or agreement. A “Final Determination” shall mean a final,
non-appealable judgment of a court of competent jurisdiction and shall be
accompanied by an opinion of counsel to the effect that such judgment is a
final, non-appealable judgment of a court of competent jurisdiction. The Escrow
Agent shall act on such Final Determination or agreement without further
question.
          (m) The Parties shall compensate the Escrow Agent for its services
hereunder in accordance with Exhibit B attached hereto on the following basis:
NYTEX — 50%; Seller Representative — 28.45%; and Diana Francis — 21.55%. In
addition, each of NYTEX, Seller Representative and Diana Francis shall reimburse
the Escrow Agent on the same relative basis
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for all of its reasonable out-of-pocket expenses, including attorneys’ fees,
travel expenses, telephone and facsimile transmission costs, postage, copying
charges and the like (collectively, the “Fees”). All of the compensation and
reimbursement obligations set forth in this Section 5(m) shall be paid upon
demand by the Escrow Agent. The obligations of the Parties under this Section
5(m) shall survive any termination of this Agreement and the resignation or
removal of the Escrow Agent. The Escrow Agent shall have, and is hereby granted,
a prior lien upon the Escrowed Property with respect to its unpaid fees,
non-reimbursed expenses and unsatisfied indemnification rights, superior to the
interests of any other persons or entities and is hereby granted the right to
set off and deduct any unpaid fees, non-reimbursed expenses and unsatisfied
indemnification rights from the Escrowed Property.
          (n) The Parties hereto authorize the Escrow Agent, for any securities
held hereunder, to use the services of any United States central securities
depository it deems appropriate, including, but not limited to, the Depositary
Trust Company and the Federal Reserve Book Entry System.
          (o) Any banking association or corporation into which the Escrow Agent
may be merged, converted or with which the Escrow Agent may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Escrow Agent shall be a Party, or any banking association or corporation to
which all or substantially all of the corporate trust business of the Escrow
Agent shall be transferred, shall succeed to all the Escrow Agent’s rights,
obligation 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.
     Section 6. Notices. All notices, requests, consents, waivers, and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given if: (a) transmitted by facsimile,
upon acknowledgment of receipt thereof in writing by facsimile or otherwise;
(b) personally delivered, upon delivery or refusal of delivery; (c) mailed by
registered or certified United States mail, return receipt requested, postage
prepaid, upon delivery or refusal of delivery; or (d) sent by a nationally
recognized overnight delivery service, upon delivery or refusal of delivery. All
notices, consents, waivers, or other communications required or permitted to be
given hereunder shall be addressed to the respective Party to whom such notice,
consent, waiver, or other communication relates at the following addresses:

  (i)   if to NYTEX:         NYTEX FDF Acquisition, Inc.
12222 Merritt Drive, Suite 1850
Dallas, TX 75251
Attn: Kenneth Kase Conte, Chief Financial Officer
Fax: (972) 770-4701

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      With a copy to:

      Strasburger & Price, LLP
901 Main Street, Suite 4400
Dallas, TX 75202
Attn: Kevin Woltjen, Esq.
Fax: (214) 659-4025

  (ii)   if to Diana Francis, to:         Hunter, Hunter & Sonnier LLC
1807 Lake Street
Lake Charles, Louisiana 70601
Attention: Shayna L. Sonnier
Fax: (337) 439-2505     (iii)   if to Seller Representative, to:         Bryan
Francis
Francis Drilling Fluids, Ltd.
205 Jasmine Road
Crowley, Louisiana 70526
Fax: (337) 783-0059         With a copy to:         Stubbs Law Firm, LLC
1018 Harding Street, Suite 103
Lafayette, Louisiana 70503
P.O. Box 51201
Attn: William P. Stubbs, Esq.
Fax: (337) 233-9771     (iv)   if to the Escrow Agent, to:         The F&M Bank
& Trust Company
1330 South Harvard
Tulsa, Oklahoma 74112
Attn: Reta Penington, Vice President/International Manager, CDCS
Fax: (918) 743-6256

Any Party by written notice to the other Parties pursuant to this Section 6 may
change the address or the persons to whom notices or copies thereof shall be
directed.
     Section 7. Waivers; Amendments. Any waiver by any Party hereto of any
breach of or failure to comply with any provision of this Agreement by any other
Party hereto shall be in writing and shall not be construed as, or constitute, a
continuing waiver of such provision, or a
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waiver of any other breach of, or failure to comply with, any other provision of
this Agreement. This Agreement may only be modified by a writing signed by all
of the Parties hereto.
     Section 8. Construction. The headings in this Agreement are solely for
convenience of reference and shall not be given any effect in the construction
or interpretation of this Agreement. Unless otherwise stated, references to
Sections are references to Sections of this Agreement.
     Section 9. Assignment. Neither this Agreement nor any of the rights,
interests, or obligations hereunder shall be assigned by any of the Parties
hereto, whether by operation of law or otherwise; provided, however, that
(a) each of NYTEX, Diana Francis and Seller Representative may assign any of its
rights or delegate any of its duties under this Agreement to any Affiliate (as
defined in the Purchase Agreement) of such Party upon written notice delivered
to each other Party hereto, including the Escrow Agent; provided, further, that
no such assignment shall relieve the assigning Party of its obligations
hereunder; and (b) NYTEX may assign its rights, but not its obligations, under
this Agreement to any of its financing sources.
     Section 10. Termination. This Agreement shall terminate at the time of the
final distribution by the Escrow Agent of all Escrowed Property and Interest in
accordance with the provisions of this Agreement or by written mutual agreement
of NYTEX and Seller Representative.
     Section 11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute a single instrument. A facsimile or other copy of a
signature, including execution and delivery of the Agreement by electronic
exchange bearing the copies of a Party’s signature, shall be deemed an original
for purposes of this Agreement.
     Section 12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without regard to
the choice-of-laws or conflicts-of-laws provisions thereof.
     Section 13. Severability. The invalidity, legality or enforceability of any
provisions of this Agreement shall in no way affect the validity, legality or
enforceability of any other provision; and if any provision is held to be
unenforceable as a matter of law, the other provisions shall not be affected
thereby and shall remain in full force and effect.
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ESCROW AGREEMENT — Page 10

 

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     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed as of the date first written above.

            DIANA FRANCIS:

          Diana Istre Francis            SELLER REPRESENTATIVE:

          Bryan K. Francis            NYTEX:

NYTEX FDF ACQUISITION, INC.
      By:           Michael K. Galvis, President              ESCROW AGENT:

THE F&M BANK & TRUST COMPANY
      By:           Name:           Title:      

[SIGNATURE PAGE TO ESCROW AGREEMENT]

 

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EXHIBIT A
CERTIFICATE AS TO AUTHORIZED SIGNATURES

         
 
  Account Name:   FDF Escrow Account
 
  Account Number:   ___________

The specimen signatures shown below are the specimen signatures of the
individuals who have been designated as Authorized Representatives of NYTEX FDF
Acquisition, Inc.(“NYTEX”), and are authorized to sign on behalf of NYTEX.

      Name / Title   Specimen Signature
 
   
Michael G. Galvis
   
 
   
Name
  Signature
 
   
President
   
 
Title
   
 
   
Kenneth Conte
   
 
   
Name
  Signature
 
   
Vice President and Chief Financial Officer
   
 
Title
   

EXHIBIT A

 

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EXHIBIT B
SCHEDULE OF FEES

                 
 
  Escrow Fees:       $ 6,500  

EXHIBIT B

 

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EXHIBIT C
MEMBERSHIP INTERESTS PURCHASE AGREEMENT
See Attached.
EXHIBIT C