Exhibit 10.2 Escrow Agreement by and among Force 10 Trading, Inc., Petrex
Corporation, and Weed & Co. L.P.
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made as of October 5, 2001 by and
among Force 10 Trading, Inc., a Nevada corporation ("Force"), PETREX
Corporation, a Nevada corporation, Inc. ("PETREX") and Weed & Co. L.P., a
California limited partnership (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, Force and PETREX are parties to an Agreement and Plan of Reorganization
(the "Merger Agreement") whereby Force will merge into PETREX or a wholly-owned
subsidiary of PETREX and Force's shareholders will receive one share of PETREX
common stock (the "PETREX Shares") for every share of Force common stock (the
"Force Shares") held at the Effective Time. PETREX shall continue as the
surviving corporation (the "Surviving Corporation"). Terms defined within this
Agreement shall have the meanings prescribed to them in the Agreement; and
WHEREAS, Force and PETREX have requested that the Escrow Agent serve as Escrow
Agent for the transaction;
NOW, THEREFORE, in consideration of the covenants and mutual promises contained
herein and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged and intending to be legally bound
hereby, the parties agree as follows:
TERMS OF THE ESCROW
The parties hereby agree to establish an escrow account with the Escrow Agent
not to exceed 120 days (the "Escrow Period"), whereby the Escrow Agent (i) shall
receive and cancel the Force Shares; and (ii) deliver the PETREX Shares to the
Force shareholders, in accordance with the terms and conditions of this
Agreement and the Merger Agreement.
At the initial and any subsequent Closing, upon Escrow Agent's receipt of the
following:
(i) the Force Shares;
(ii) the PETREX Shares;
(iii) evidence satisfactory to PETREX, whose consent shall not be unreasonably
held, that the shareholder's equity of the Surviving Company, as determined by
independent certified public accountants in conformity with accounting
principles generally accepted in the United States of America, exceeds one
million dollars ($1,000,000.00); and
(iv) executed counterparts of this Agreement and the Merger Agreement and
related documents,
it shall telephonically advise Force and PETREX.
At the initial and any subsequent Closing and upon satisfaction of the
conditions set forth in paragraph 1.2 above, the Escrow Agent shall promptly
deliver to the Force shareholders, or their designees, the PETREX Shares and
cancel the Force Shares.
In the event the parties do not satisfy the conditions set forth in paragraph
1.2 above and applicable conditions in this Agreement and the Merger Agreement
within the Escrow Period, the Escrow Agent shall return the Force Shares to
Force and the PETREX Shares to PETREX.
MISCELLANEOUS
No waiver or any breach of any covenant or provision herein contained shall be
deemed a waiver of any preceding or succeeding breach thereof, or of any other
covenant or provision herein contained. No extension of time for performance of
any obligation or act shall be deemed any extension of the time for performance
of any other obligation or act.
All notices or other communications required or permitted hereunder shall be in
delivered via U.S. mail or facsimile transmission directed as follows:
Xxx X. Xxxxxx
President
Force 10 Trading, Inc.
0000 Xxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Xxxxx X. Xxxx
PETREX Corporation
000 X. Xxxxxxxxx Xxxxx
Xx. Xxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
This Escrow Agreement shall be binding upon and shall inure to the benefit of
the permitted successors and permitted assigns of the parties hereto. This
Agreement does not create, and shall not be construed as creating, any rights
enforceable by any person not a party to this Agreement.
This Escrow Agreement is the final expression of, and contains the entire
agreement between, the parties with respect to the subject matter hereof and
supersedes all prior understandings with respect thereto. This Escrow Agreement
may not be modified, changed, supplemented or terminated, nor may any
obligations hereunder be waived, except by written instrument signed by the
parties to be charged or by its agent duly authorized in writing or as otherwise
expressly permitted herein.
Whenever required by the context of this Escrow Agreement, the singular shall
include the plural and masculine shall include the feminine. This Escrow
Agreement shall not be construed as if it had been prepared by one of the
parties, but rather as if both parties had prepared the same. Unless otherwise
indicated, all references to Articles are to this Escrow Agreement.
The parties hereto expressly agree that this Escrow Agreement shall be governed
by, interpreted under and construed and enforced in accordance with the laws of
the State of Nevada. Any action to enforce, arising out of, or relating in any
way to, any provisions of this Escrow Agreement shall only be brought in a state
or Federal court sitting in Orange County, California.
The Escrow Agent's duties hereunder may be altered, amended, modified or revoked
only by a writing signed by Force, PETREX and the Escrow Agent.
The Escrow Agent shall be obligated only for the performance of such duties as
are specifically set forth herein and may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed by the Escrow
Agent to be genuine and to have been signed or presented by the proper party or
parties. The Escrow Agent shall not be personally liable for any act the Escrow
Agent may do or omit to do hereunder as the Escrow Agent while acting in good
faith, and any act done or omitted by the Escrow Agent pursuant to the advice of
the Escrow Agent's attorneys-at-law shall be conclusive evidence of such good
faith.
The Escrow Agent is hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such order, judgment
or decree, the Escrow Agent shall not be liable to any of the parties hereto or
to any other person, firm or corporation by reason of such decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.
The Escrow Agent shall not be liable in any respect on account of the identity,
authorization or rights of the parties executing or delivering or purporting to
execute or deliver the Merger Agreement or any documents or papers deposited or
called for thereunder.
The Escrow Agent shall be entitled to employ such legal counsel and other
experts as the Escrow Agent may deem necessary properly to advise the Escrow
Agent in connection with the Escrow Agent's duties hereunder, may rely upon the
advice of such counsel, and may pay such counsel reasonable compensation
therefor. THE ESCROW AGENT HAS ACTED AS LEGAL COUNSEL FOR FORCE, AND MAY
CONTINUE TO ACT AS LEGAL COUNSEL FOR FORCE, FROM TIME TO TIME, NOTWITHSTANDING
ITS DUTIES AS THE ESCROW AGENT HEREUNDER. PETREX CONSENTS TO THE ESCROW AGENT IN
SUCH CAPACITY AS LEGAL COUNSEL FOR FORCE AND WAIVES ANY CLAIM THAT SUCH
REPRESENTATION REPRESENTS A CONFLICT OF INTEREST ON THE PART OF THE ESCROW
AGENT. PETREX AND FORCE UNDERSTAND THAT THE ESCROW AGENT IS RELYING EXPLICITLY
ON THE FOREGOING PROVISION IN ENTERING INTO THIS ESCROW AGREEMENT.
The Escrow Agent's responsibilities as escrow agent hereunder shall terminate if
the Escrow Agent shall resign by written notice to Force and PETREX. In the
event of any such resignation, Force and PETREX shall appoint a successor Escrow
Agent.
If the Escrow Agent reasonably requires other or further instruments in
connection with this Escrow Agreement or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.
It is understood and agreed that should any dispute arise with respect to the
delivery and/or ownership or right of possession of the documents or the escrow
funds held by the Escrow Agent hereunder, the Escrow Agent is authorized and
directed in the Escrow Agent's sole discretion (1) to retain in the Escrow
Agent's possession without liability to anyone all or any part of said documents
or the escrow funds until such disputes shall have been settled either by mutual
written agreement of the parties concerned by a final order, decree or judgment
or a court of competent jurisdiction after the time for appeal has expired and
no appeal has been perfected, but the Escrow Agent shall be under no duty
whatsoever to institute or defend any such proceedings or (2) to deliver the
escrow funds and any other property and documents held by the Escrow Agent
hereunder to a state or Federal court having competent subject matter
jurisdiction and located in Orange County, California in accordance with the
applicable procedure therefor.
Force and PETREX agree jointly and severally to indemnify and hold harmless the
Escrow Agent and its partners, employees, agents and representatives from any
and all claims, suits, actions, liabilities, proceedings, costs or expenses in
any way arising from or relating to the duties or performance of the Escrow
Agent hereunder or the transactions contemplated hereby or by the Merger
Agreement other than any such claim, liability, cost or expense to the extent
the same shall have been determined by final, unappealable judgment of a court
of competent jurisdiction to have resulted from the gross negligence or willful
misconduct of the Escrow Agent.
If any provision of this Agreement is invalid, illegal or unenforceable, the
balance of this Agreement shall remain in effect, and if any provision is
inapplicable to any person or circumstance, it shall remain applicable to all
other persons and circumstances.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth above.
PETREX Corporation,
A Nevada corporation
By: /s/ X.X. XxxXxxxxx
Name: X.X. XxxXxxxxx
Title: President
Force 10 Trading, Inc.
A Nevada corporation
By: /s/ Xxx X. Xxxxxx
Name: Xxx X. Xxxxxx
Title: President
ESCROW AGENT:
Weed & Co. L.P.
By: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: Managing Partner
