exv10w2






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



ESCROW AGREEMENT — Page 1




 









 




 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


ESCROW AGREEMENT — Page 2




 









 




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


ESCROW AGREEMENT — Page 3




 









 




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



ESCROW AGREEMENT — Page 4




 









 




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



ESCROW AGREEMENT — Page 5




 









 




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.



ESCROW AGREEMENT — Page 6




 









 





          (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



ESCROW AGREEMENT — Page 7




 









 




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




ESCROW AGREEMENT — Page 8




 









 






	 	 	 	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


ESCROW AGREEMENT — Page 9




 









 




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





 









 








     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]




 









 





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




 









 





EXHIBIT B




SCHEDULE OF FEES



	 	 	 	 	 	 	 	 	 

	 

	 	Escrow Fees:
	 	 	 	$	6,500	 





EXHIBIT B









 









 








EXHIBIT C




MEMBERSHIP INTERESTS PURCHASE AGREEMENT



See Attached.


EXHIBIT C