EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (“Agreement”) is entered into and effective as of
April 5, 2017 (the “Effective Date”), by and between Eco-Stim Energy Solutions,
Inc., a Nevada corporation (“Eco-Stim” or “Company”), and Barry Ekstrand
(“Executive”). Executive and the Company are collectively referred to in this
Agreement as the “Parties” and individually as a “Party.”

 

RECITALS:

 

WHEREAS, it is the desire of the Company to employ Executive as its Executive
Vice President—North America;

 

WHEREAS, Executive desires to be employed with the Company on the terms herein
provided;

 

NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the Parties agree as follows:

 

AGREEMENT TERMS:

 

1. Term. The Company shall continue to employ Executive, and Executive accepts
such continued employment, on the terms and conditions set forth in this
Agreement. The “Initial Term” of this Agreement is the period commencing on the
Effective Date and expiring at the earlier to occur of (a) 11:59 p.m. on the
first anniversary of the Effective Date (the “Expiration Date”) or (b) the
Termination Date (as defined in Section 4); provided, however, that, if the
Termination Date has not occurred, the term of this Agreement shall be
automatically renewed for the twelve (12) month period immediately following the
Expiration Date and each twelve (12) month period ending thereafter (each, a
“Renewal Term” and, together with the Initial Term, the “Term”), unless either
the Company or Executive provides written notice to the other Party of his or
its election not to renew this Agreement at least thirty (30) days prior to the
last day of the then-current Term. Executive’s employment hereunder shall be
coterminous with the Term, and termination of Executive’s employment and the
Term shall be simultaneous.

 

2. Duties as Executive of the Company. Subject to this Agreement’s terms,
Executive agrees to serve the Company as its Executive Vice President—North
America and to act in the ordinary course of its business with all the powers
and duties reasonably incident to the position(s) and such other
responsibilities or duties that may be from time to time assigned to Executive
by the Company’s Chief Operating Officer. Executive shall report to the
Company’s Chief Operating Officer.

 

3. Compensation and Related Matters.

 

(a) Base Salary. Executive shall receive an initial Base Salary (defined below)
paid by the Company at the annual rate of $212,000 per year. Executive’s Base
Salary shall be adjusted to $262,000 upon, and effective from and after the date
of, the completion of the first stimulation job in the mid-continent region.
Executive’s Base Salary may be increased annually, effective on January 1 of
each year beginning after the Effective Date, by an amount (if any) to be
determined by Eco-Stim, in its sole discretion. For purposes of this Agreement,
“Base Salary” shall mean Executive’s initial base salary or, the adjusted base
salary then in effect at the time in question. The Base Salary shall be paid,
subject to all applicable withholdings and deductions, in accordance with the
Company’s ordinary payroll practices, as in effect from time to time.

 

   

 

 

(b) Bonus Target. During each full calendar year of the Term, Executive shall be
eligible to receive an annual bonus in an amount, if any, to be determined by
the Board of Directors of Eco-Stim in its sole discretion, up to a maximum of
seventy-five percent (75%) of Executive’s Base Salary (the “Annual Bonus”). The
amount of the Annual Bonus awarded, if any, shall be based on achieving certain
goals related to Company performance and objectives, established and measured by
the Board of Directors of Eco-Stim, in its sole discretion. To receive any
Annual Bonus for a calendar year, Executive must be in “active working status”
at the time such Annual Bonus is scheduled to be paid, except as otherwise
provided in Section 4, below. For purposes of this Agreement, “active working
status” means that the Termination Date has not occurred for any reason and
Executive has not been given notice of termination of his employment for any
reason, and Executive has not resigned his employment or given notice of his
resignation, for any reason.

 

(c) Expenses. Executive shall be entitled to receive prompt reimbursement for
all reasonable business expenses incurred by him, in accordance with the
policies and procedures established by the Company from time to time, in
performing services under this Agreement and during his employment with the
Company, provided that Executive properly accounts for the expenses in
accordance with Company policies. The amount of expenses eligible for
reimbursement during a calendar year shall not affect the expenses eligible for
reimbursement in any other calendar year. Reimbursement of eligible expenses
shall be made on or before the last day of the calendar month following the
calendar month in which the expenses were incurred, provided appropriate
requests with supporting documentation are timely submitted in accordance with,
or as otherwise provided in, the Company’s business expense reimbursement
policy.

 

(d) Benefits. During the Term, Executive shall be eligible to participate in
such retirement and employee benefit plans and arrangements that may be offered
to the Company’s senior executives, subject to and on a basis consistent with
the terms, conditions, and overall administration of such plans and
arrangements, as amended from time to time. Nothing in this Agreement shall be
deemed to confer upon Executive or any other person, including any beneficiary,
any rights under or with respect to any such plan or arrangement or to amend any
such plan or arrangement, and Executive and each other person, including any
beneficiary, shall be entitled to look only to the express terms of any such
plan or arrangement for his or her rights thereunder. Nothing paid to Executive
under any such plan or arrangement presently in effect or made available in the
future shall be deemed to be in lieu of the Base Salary and other benefits
payable to Executive pursuant to this Agreement.

 

(e) Vacation; Sick Leave; Holidays. Executive shall be entitled to twenty (20)
days of vacation and six (6) days of paid sick leave during each year of the
Term, pro-rated for partial years, exclusive of holidays. Executive shall insure
that the scheduling of his vacation does not interfere with the Company’s normal
business operation. Vacation will accrue and may be forfeited as provided by the
terms of the Company’s policy governing vacation, as that policy is updated or
revised from time to time in the Company’s sole discretion. For purposes of this
Section, weekends shall not count as Vacation days. Executive shall also be
entitled to all paid holidays given by the Company.

 

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(f) Proration. The Base Salary payable to Executive hereunder in respect of any
calendar year during which Executive is employed by the Company for less than
the entire year shall be prorated in accordance with the total number of
calendar days in such calendar year during which he is so employed.

 

4. Termination.

 

(a) Definitions.

 

(1) “Cause” shall mean:

 

(i) Executive’s failure or refusal to substantially perform his material duties,
responsibilities and/or obligations, which failure or refusal to perform (if
curable) is not cured to the reasonable satisfaction of the Company within
thirty (30) days following written notice from the Company to Executive setting
forth the nature of the duties, responsibilities and/or obligations that
Executive has failed or refused substantially to perform; provided that Cause
shall not include Executive’s failure to so perform as a result of Executive’s
incapacity due to his Disability;

 

(ii) any act by Executive involving fraud, misrepresentation, theft,
embezzlement, or dishonesty on a material matter in connection with Executive’s
employment with, or performance of his duties for, the Company; or

 

(iii) conviction of Executive, or a plea by Executive, of guilty or nolo
contendere to, an offense that is a (A) felony or (B) misdemeanor that involves
fraud; or

 

(iv) material breach by Executive, of any of Executive’s obligations under
Section 7 of this Agreement.

 

(2) A “Disability” or “Disabled” shall mean the inability of Executive to
perform the essential functions of his position at the Company by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than three (3) months. Executive shall be considered to have a Disability (i) if
he is determined to be totally disabled by the Social Security Administration or
(ii) if he is determined to be disabled under Eco-Stim’s long-term disability
plan in which Executive participates and if such plan defines “disability” in a
manner that is consistent with the immediately preceding sentence.

 

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(3) A “Good Reason” shall mean that the occurrence of any of the following
without Executive’s express written consent:

 

(i) A material diminution in Executive’s Base Salary;

 

(ii) A change in the location where Executive is expected or required to perform
the majority of Executive’s job duties at the time Executive executes this
Agreement (“Base Location”) to a location that is more than twenty (20) miles
from the Base Location, except for travel reasonably required of Executive on
the Company’s business;

 

(iii) A substantial and adverse diminution in Executive’s duties, authority,
responsibility or position with the Company; or

 

(iv) Any breach by the Company of any material provision of this Agreement.

 

Executive’s resignation for Good Reason shall be effective upon thirty (30)
days’ advance written notice by Executive to the Company; provided, however,
that Good Reason shall cease to exist on the thirtieth (30th) day following the
later of (x) the occurrence of the fact, event, condition or other circumstance
constituting or giving rise to Good Reason or (y) Executive’s knowledge thereof.
During such thirty (30) day notice period, the Company shall have a cure right,
and Executive’s termination for Good Reason will be effective upon expiration of
such cure period only if the fact, event, condition or other circumstance
constituting or giving rise to Good Reason is not cured within such period. Any
such termination by Executive shall not be deemed a breach of the Agreement. If
the Company timely cures the fact, event, condition or other circumstance giving
rise to Good Reason for Executive’s resignation, the notice of termination shall
become null and void.

 

(4) “Termination Date” shall mean the date Executive’s employment with the
Company and this Agreement terminates or is terminated for any reason. To the
extent that any payments or benefits under this Agreement are considered
nonqualified deferred compensation subject to Section 409A (“Code Section 409A”)
of the Internal Revenue Code (the “Code”), to the extent necessary to avoid
additional taxes under Code Section 409A, such termination of employment will
only be considered a termination of employment to the extent it also constitutes
a “separation from service” for purposes of Code Section 409A.

 

(b) Termination Without Cause or for Good Reason: Benefits. In the event the
Company involuntarily terminates Executive’s employment with the Company without
Cause or Executive terminates his employment with the Company for Good Reason
(in each case, a “Termination Event”), this Agreement shall terminate, and, in
full satisfaction of the Company’s obligations under this Agreement, Executive
shall receive the following:

 

(1) Payment of accrued but unpaid Base Salary and unreimbursed business expenses
through the Termination Date in accordance with Sections 3(a) and 3(c). The
accrued but unpaid Base Salary shall be paid to Executive in a lump sum in cash
within six (6) days following the Termination Date. Unreimbursed business
expenses shall be paid to Executive within the time period required by the
Company’s business expense reimbursement policy. In addition, Executive and/or
his eligible dependents shall be eligible to continue group health benefits at
his or their expense as provided by applicable law. The payments and benefits
set forth in this Section 4(b)(1) are referred to, collectively, as the “Accrued
Benefits”; and

 

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(2) Subject to Executive delivering to the Company an executed Release (as
defined below in Section 6) within the time period set forth in such Release,
and Executive not revoking such Release, payment of an amount equal to the Base
Salary payable for one year (the “Severance Payment”), at the rate in effect
immediately before the Termination Event, payable in a lump sum on the first
payroll date on or immediately after the sixtieth (60th) day following the
Termination Date, provided that the Release has become effective on such date in
accordance with its terms.

 

(3) Subject to Executive delivering to the Company an executed Release within
the time period set forth in such Release, and Executive not revoking such
Release, full vesting of all unvested restricted stock and stock options granted
to Executive prior to the Effective Date and outstanding on the Termination
Date; and

 

(4) Subject to Executive (x) delivering to the Company an executed Release
within the time period set forth in such Release, and Executive not revoking
such Release, and (y) timely electing medical benefit continuation pursuant to
the COBRA, payment (or reimbursement of) the cost of medical benefit
continuation (on the same basis and at the same cost as such benefits are
currently provided to executives of the Company) for Executive and any covered
dependents for up to eighteen (18) months or until Executive and/or his covered
dependents are covered by another company’s group health insurance, whichever is
sooner; and provided, further, that if the Company determines in good faith that
its payment of such cost will result in the imposition of excise taxes or
penalties on the Company and/or the insurance carrier with respect to such
medical benefits, then the Company shall not pay (or reimburse) such cost and
the Company shall provide an economically equivalent benefit or payment, to the
extent that such benefit or payment is consistent with applicable law and will
not result in the imposition of such excise taxes or penalties. Executive
covenants and agrees that if he becomes eligible for coverage under another
company’s group health insurance within eighteen (18) months of the Termination
Date, he shall provide written notice to the Company within three (3) business
days of such eligibility.

 

Equity or equity-based awards granted to Executive on or after the Effective
Date, if any, shall be treated in accordance with, and governed by and subject
to, any applicable plan and award agreement under which they were granted.

 

(c) Termination In Event of Death: Benefits. If Executive’s employment with the
Company is terminated by reason of Executive’s death, this Agreement shall
terminate without further obligation to Executive’s legal representatives under
this Agreement, other than for payment of the Accrued Benefits and the amount of
any Annual Bonus under Section 3(b) that relates to the year prior to
termination and that is unpaid as of the Termination Date (the “Unpaid Annual
Bonus”). The accrued but unpaid Base Salary shall be paid to Executive’s estate
in a lump sum in cash within six (6) days after the Termination Date or by the
next regularly scheduled payday. Payment of any Unpaid Annual Bonus shall be
made at such time as such bonus payments are normally made, but in no event
later than March 15 of the following year. Unreimbursed business expenses shall
be paid to Executive’s estate within the time period required by the Company’s
business expense reimbursement policy. Equity or equity-based awards granted to
Executive, if any, shall be treated in accordance with, and governed by and
subject to, any applicable plan and award agreement under which they were
granted. Executive, if deceased, and his beneficiaries, estate and legal
representatives shall not be entitled to any further payments or benefits
whatsoever pursuant to this Agreement or otherwise.

 

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(d) Termination In Event of Disability: Benefits. If Executive’s employment with
the Company is terminated by reason of Executive’s Disability, this Agreement
shall terminate, and in full and complete satisfaction of its obligations under
this Agreement, the Company shall pay Executive the Accrued Benefits, and the
amount of any Unpaid Annual Bonus. The accrued but unpaid Base Salary shall be
paid to Executive in a lump sum in cash within six (6) days after the
Termination Date. Payment of any Unpaid Annual Bonus shall be made at such time
as such bonus payments are normally made, but in no event later than March 15 of
the following year; provided that the amount of any such Unpaid Annual Bonus
shall be prorated based upon the number of days in such calendar years during
which Executive was employed. Unreimbursed business expenses shall be paid to
Executive within the time period required by the Company’s business expense
reimbursement policy. Equity or equity-based awards granted to Executive, if
any, shall be treated in accordance with, and governed by and subject to, any
applicable plan and award agreement under which they were granted. Executive, if
Disabled, shall not be entitled to any further payments or benefits whatsoever
pursuant to this Agreement.

 

(e) Voluntary Termination by Executive and Termination for Cause: Benefits.
Executive may terminate his employment with the Company by giving thirty (30)
days’ prior written notice of his intent to so terminate; provided, however,
that the Company may designate all or any portion of the 30-day notice period as
non-working notice and pay Executive the Base Salary through the end of such
30-day notice period. Upon such a termination by Executive, or upon termination
of Executive’s employment with the Company for Cause by the Company, this
Agreement shall terminate. In full and complete satisfaction of all obligations
under this Agreement, the Company shall pay to Executive the Accrued Benefits.
The accrued but unpaid Base Salary shall be paid to Executive in a lump sum in
cash within six (6) days after the Termination Date or by the next regularly
scheduled payday. Unreimbursed business expenses shall be paid to Executive
within the time period required by the Company’s business expense reimbursement
policy. Executive shall have no entitlement to any Annual Bonus for the year in
which the Termination Date occurs, any previously unpaid Annual Bonus, or
otherwise. After the Termination Date, Executive shall not be entitled to any
further payments or benefits whatsoever pursuant to this Agreement or otherwise,
including, but not limited to any bonus payments.

 

(f) No Duty to Mitigate Executive shall not be required to mitigate the amount
of any payment provided for in Section 4 of this Agreement by seeking other
employment or otherwise. No payment described in Section 4 of this Agreement
shall be offset or reduced by the amount of any compensation or benefits
provided to Executive in any subsequent employment.

 

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5. Non-Renewal of Agreement. If the Company or Executive elects not to renew
this Agreement under the terms provided in Section 1, this Agreement shall
terminate effective on the last day of the then-current Term. Upon termination
of this Agreement due to non-renewal by Executive, in full satisfaction of its
obligations under this Agreement, the Company shall provide Executive the
Accrued Benefits. Executive shall not be entitled to any further payments or
benefits whatsoever pursuant to this Agreement or otherwise. Upon termination of
this Agreement due to non-renewal by the Company, in full satisfaction of its
obligations under this Agreement, the Company shall provide Executive the
Accrued Benefits and, subject to Executive delivering to the Company an executed
Release within the time period set forth in such Release and Executive not
revoking such Release, the Severance Payment.

 

6. Release Agreement. Notwithstanding any provision of this Agreement to the
contrary, in order to receive the Severance Payment under Section 4(b)(2),
Executive must first execute, deliver to the Company, and not revoke a
reasonable release and hold harmless agreement (on a form provided by the
Company) (“Release”), within the time period specified under the Release,
whereby Executive agrees in return for the Severance Payment, among other things
that may be mutually agreed by the Parties, not to disparage the Company, its
employees, officers, directors and affiliates, and to release and waive any
claim or cause of action that Executive may have against the Company and any of
its affiliates, including, without limitation, for unlawful discrimination or
retaliation; provided, however, such agreement shall not release any claim by
Executive for any payment or benefit that is due under the express terms of this
Agreement at the time the time Executive executes the Release.

 

7. Non-Competition, Non-Solicitation and Confidentiality. Executive hereby
acknowledges and agrees that during Executive’s employment with the Company,
Executive has had and shall continue to have access to some or all of the
Company’s Confidential Information, as defined below.

 

(a) Non-Competition During Employment. Executive hereby agrees that, in
consideration for the Company’s providing Executive with Confidential
Information, during the Term, he will not compete with the Company or any of its
affiliates, including by engaging in the conception, design, development,
production, marketing, or servicing of any product or service that is
substantially similar to the products or services which the Company provides,
and that he will not work for, in any capacity, assist, or become affiliated
with as an owner, founder, shareholder, partner, member, lender, advisor,
director, consultant, contractor, agent, employee, affiliate or co-venturer, or
otherwise act in any capacity, either directly or indirectly, of, in or with
respect to, any individual or business which offers or performs services, or
offers or provides products substantially similar to the services and products
provided by the Company or any of its affiliates; provided, however, Executive
shall not be prevented from owning no more than 2% of any company whose stock is
publicly traded.

 

(b) Conflicts of Interest. Executive agrees that during the Term, he will not
engage, either directly or indirectly, in any activity (a “Conflict of
Interest”) that might adversely affect the Company, including ownership of a
material investment in a competitor of the Company, ownership of a material
interest in any supplier, contractor, distributor, subcontractor, customer or
other entity with which the Company does business or acceptance of any material
payment, service, loan, gift, trip, entertainment, or other favor from a
supplier, contractor, distributor, subcontractor, customer or other entity with
which the Company does business, and that Executive will promptly inform the CEO
or the Eco-Stim Board of Directors as to each offer received by Executive to
engage in any such activity. As used in this Section 7(b), “materiality” shall
be viewed from the perspective of Executive. Executive further agrees to
disclose to the Company any other facts of which Executive becomes aware which
in Executive’s good faith judgment could reasonably be expected to involve or
give rise to a Conflict of Interest or potential Conflict of Interest.

 

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(c) Non-Competition After Termination from Employment. Executive hereby agrees
that, in order to protect the Company’s Confidential Information, it is
necessary to enter into the following restrictive covenant, which is ancillary
to the enforceable promises between the Company and Executive otherwise
contained in this Agreement. Executive hereby agrees that Executive shall not at
any time during the Restricted Period engage in any capacity, whether as an
owner, founder, shareholder, partner, member, lender, advisor, director,
consultant, contractor, agent, employee, affiliate or co-venturer, or otherwise,
either directly or indirectly, in any commercial enterprise, a primary business
of which is to develop, manufacture, sell, lease, or otherwise provide any
product, process, apparatus, service or development competitive with or
substantially similar to any product, process, apparatus, service, or
development sold or provided by the Company or any of its affiliates
(“Competitive Products”) on which Executive worked or about which Executive
learned Confidential Information while employed by the Company anywhere within
Texas, Oklahoma, Argentina, and/or any of the other markets in which the Company
or any of its affiliates has sold Competitive Products or formulated a plan to
sell Competitive Products into a market during the last twelve (12) months of
Executive’s employ. It is understood that the geographical area set forth in
this covenant is divisible so that if this clause is invalid or unenforceable in
an included geographic area, that area is severable and the clause remains in
effect for the remaining included geographic areas in which the clause is valid.
For the purpose of this Agreement, “Restricted Period” means a period of six (6)
months after termination for any reason whatsoever, whether by Executive or the
Company, of Executive’s employment with the Company. The Restricted Period shall
commence at the time Executive’s employment with the Company terminates. The
parties agree that this agreement of non-competition is intended to be
enforceable by the Company only to the extent that Texas law allows such a
contractual limitation and it shall be void beyond such permitted limitations.

 

(d) Confidential Information. Executive agrees that he will not, except as the
Company may otherwise consent or direct in writing, reveal or disclose, sell,
use, lecture upon, publish or otherwise disclose to any third party any
Confidential Information or proprietary information of the Company, or authorize
anyone else to do these things at any time either during or subsequent to his
employment with the Company. This Section 7(d) shall continue in full force and
effect after termination of Executive’s employment and after the termination of
this Agreement. Executive’s obligations under this Section 7(d) with respect to
any specific Confidential Information and proprietary information shall cease
when that specific portion of the Confidential Information and proprietary
information becomes publicly known, in its entirety and without combining
portions of such information obtained separately and shall not apply to
information that may be required by law or an order of any court, agency or
proceeding to be disclosed (but only for the purposes of and to the minimum
extent required by such compelled disclosure, and provided that Executive
promptly notifies the Company of such requirement and provides the Company all
reasonable assistance and cooperation in seeking to oppose such requirement or
obtain protective treatment). It is understood that such Confidential
Information and proprietary information of the Company include matters that
Executive conceives or develops, as well as matters Executive learns from other
employees of the Company. “Confidential Information” is defined to include
information: (1) disclosed to or known by Executive as a consequence of or
through his employment with the Company; (2) not generally known outside the
Company; and (3) that relates to any aspect of the Company or its business,
finances, operation plans, budgets, research, or strategic development.
“Confidential Information” includes, but is not limited to, the Company’s trade
secrets, proprietary information, financial documents, long range plans,
customer or supplier lists, marketing strategy, data bases, costing data,
computer software developed by the Company, investments made by the Company, and
any information provided to the Company by a third party under restrictions
against disclosure or use by the Company or others. Nothing in this Agreement or
otherwise shall prohibit Executive from making a report to any governmental
agency or entity if Executive has a reasonable belief that there has been a
potential violation of federal or state law or regulation or from making other
disclosures that are protected under the whistleblower provisions of any
applicable federal or state law or regulation. No prior authorization to make
any such reports or disclosures is required and Executive is not required to
notify the Company that Executive has made such reports or disclosures.
Executive, however, may not waive the Company’s attorney-client privilege. The
Company and Executive acknowledge that pursuant to 18 U.S.C § 1833(b)(1) a
Company employee shall not be held criminally or civilly liable under any
federal or state trade secret law for the disclosure of a trade secret that (a)
is made (i) in confidence to a federal, state, or local government official,
either directly or indirectly, or to an attorney; and (ii) solely for the
purpose of reporting or investigating a suspected violation of law; or (b) is
made in a complaint or other document filed in a lawsuit or other proceeding, if
such filing is made under seal. The Company and Executive further acknowledge
that, pursuant to 18 U.S.C § 1833(b)(2) if an employee files a lawsuit for
retaliation by the Company for reporting a suspected violation of law, such
employee may disclose the trade secret to his or her attorney and use the trade
secret information in the court proceeding, if the individual (A) files any
document containing the trade secret under seal; and (B) does not disclose the
trade secret, except pursuant to court order.

 

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(e) Work Product; Assignment; Patent and Copyright Registrations; Warranty.
Executive agrees that he has disclosed and will disclose promptly and fully to
the Company all discoveries, developments, concepts, ideas, know how, trade
secrets, designs, inventions, improvements, processes, computer programs,
algorithms, models, graphics, pictorial representations, user interfaces,
functional specifications, reports, spreadsheets, presentations, analyses, works
of authorship, and any improvements, enhancements, or documentation of or to the
same, including any Confidential Information, whether or not patentable, that he
developed, made, worked on or conceived or reduced to practice, individually or
jointly with others prior to the date of this Agreement in any way related or
pertaining to or connected with the present or anticipated business,
development, work or research of the Company, or that he develops, makes, works
on, conceives or reduces to practice, individually or jointly with others in the
course of his work for the Company or with the use of the Company’s time,
materials or facilities in any way related or pertaining to or connected with
the present or anticipated business, development, work or research of the
Company or which result from or are suggested by any work he may do for the
Company and whether produced during normal business hours or on personal time
(collectively the “Work Product”). Work Product shall further include any such
works of authorship, inventions, discoveries, improvements, designs, processes,
software or improvements thereto conceived, made, reduced to practice, developed
or perfected by Executive within six (6) months after termination of Executive’s
employment with the Company.

 

Executive shall make and maintain adequate and current written records and
evidence of all Work Product, including drawings, work papers, graphs, computer
records and any other documents, which shall be considered Company property.

 

(1) Work Made for Hire. Executive acknowledges that all original works of
authorship which are made by Executive (solely or jointly with others) within
the scope of his employment with the Company and which are protectable by
copyright are “works made for hire,” pursuant to United States Copyright Act (17
U.S.C., Section 101). If any of the works of authorship which are made by
Executive (solely or jointly with others) within the scope of his employment
with the Company are held for any reason not to be “works made for hire” for the
Company or if ownership of all right, title and interest in and to such works
has not vested exclusively and immediately in the Company upon creation,
Executive hereby irrevocably assigns, without further consideration, any and all
right, title and interest in and to such works to the Company, including any and
all Intellectual Property Rights with respect thereto.

 

(2) Assignment of Work Product. Executive hereby agrees and confirms that all
right, title and interest, including all Intellectual Property Rights (defined
below), in and to the existing Work Product has been irrevocably (subject to the
provisions of 17 U.S.C. §203, if applicable) assigned at the time of creation,
and/or is hereby irrevocably (subject to the provisions of 17 U.S.C. §203, if
applicable) assigned to the Company, and Executive hereby agrees that all right,
title and interest in future Work Product is and will be automatically and
irrevocably (subject to the provisions of 17 U.S.C. §203, if applicable)
assigned to the Company. Executive has not assigned or otherwise granted any
right in or to the Work Product to any third party and all Work Product is and
shall be the exclusive property of the Company. The Parties intended and intend
that any and all copyright and other Intellectual Property Rights in the Work
Product, including without limitation any and all rights to distribute and
reproduce such Work Product in any and all media throughout the world, are the
sole property of the Company.

 

“Intellectual Property Rights” shall mean, on a world-wide basis, any and all
now known or hereafter known tangible and intangible (i) rights associated with
works of authorship including, without limitation, copyrights, moral rights and
mask-works, (ii) trademark and trade name rights and similar rights, including
all goodwill associated therewith, (iii) trade secret rights and database
rights, (iv) patent rights, all rights associated with designs, algorithms,
computer programs, methods of doing business, ideas, concepts, techniques,
inventions (whether patentable or not), processes and other industrial property
rights, (v) all other intellectual and industrial property rights of every kind
and nature and however designated, whether arising by operation of law,
contract, license or otherwise, and (vi) all registrations, initial
applications, renewals, extensions, continuations, divisions or reissues thereof
now or hereafter existing, made, or in force, both foreign and domestic
(including any rights in any of the foregoing).

 

 8 

 

 

(3) Patent and Copyright Registrations. The Company and its designees solely
shall have the right to use and apply for common law and statutory protections
of the Work Product, including all patents, copyrights, mask work rights, and
other intellectual property rights, in any and all countries and jurisdictions.
Furthermore, Executive agrees to assist the Company, or its designee, at the
Company’s expense, in every proper way to secure the Company’s rights in the
Work Product and any copyrights, patents, mask work rights or other Intellectual
Property Rights relating thereto in any and all countries and jurisdictions,
including the disclosure to the Company of all pertinent information and data
with respect thereto, the execution of all applications, specifications, oaths,
assignments and all other instruments which the Company shall deem necessary in
order to apply for, obtain, perfect and assign such rights in the name of the
Company. Executive further agrees that his obligation to execute or cause to be
executed, when it is in his power to do so, any such instrument or papers shall
continue after the termination of Executive’s employment with the Company. If
the Company is unable, for any reason, to secure Executive’s signature to
execute such instruments or papers relating to the Work Product, then Executive
hereby designates and appoints the Company and its duly authorized officers and
agents as Executive’s agent and attorney in fact, to act for and in Executive’s
stead to record the Company’s ownership interest and to execute and file any
such instruments and papers relating to the Work Product and to do all other
lawfully permitted acts to further the prosecution and issuance of letters
patent or copyright registrations thereon in the Company’s name with the same
legal force and effect as if executed by Executive. The foregoing agency shall
apply to any applications or registrations, including any divisions,
continuations, renewals, reissues, and extensions and other instruments and
papers, as applicable, now existing or hereafter filed or issued. This agency is
coupled with an interest and is irrevocable.

 

(4) Unassigned Inventions. Executive recognizes that the terms of this Agreement
do not require him to assign to the Company any invention that was developed
entirely on his own time without using equipment, supplies, facilities, or trade
secrets belonging to the Company and neither related to the actual or
anticipated business, research or development of the Company, nor resulting from
work performed by Executive for the Company.

 

(f) Non-Solicitation. To protect the Company’s Confidential Information, and in
the event of Executive’s termination of employment for any reason whatsoever,
whether by Executive or the Company, it is necessary to enter into the following
restrictive covenant, which is ancillary to the enforceable promises between the
Company and Executive otherwise contained in this Agreement. Executive covenants
and agrees that during Executive’s employment and for a period of six (6) months
from the date of termination of Executive’s employment for any reason whatsoever
(the “Non-Solicitation Period”), Executive will not, directly or indirectly,
either individually or as an owner, founder, shareholder, partner, member,
lender, advisor, director, consultant, contractor, agent, employee, affiliate or
co-venturer, or otherwise act in any capacity, of, in or with respect to, any
individual or business, except on behalf of the Company, solicit business, or
attempt to solicit business, or sell, lease, transfer, license, promote, or
otherwise market products or services competitive with products or services sold
by the Company, to the Company’s clients, suppliers or customers, or those
individuals or entities with whom the Company did business, including those
individuals or entities that the Company actively solicited for business with
Executive’s participation, during Executive’s employment. Executive further
agrees that during Executive’s employment and for the Non-Solicitation Period,
Executive will not, either directly or indirectly, or by acting in concert with
others, solicit or influence any employee of the Company or any of its
affiliates or independent contractor engaged by the Company or any of its
affiliates to end his or her employment or engagement with the Company or accept
employment or engagement with any entity in competition with the Company.

 

 9 

 

 

(g) Return of Documents, Equipment, Etc. All writings, records, and other
documents and things comprising, containing, describing, discussing, explaining,
or evidencing any Confidential Information, and all equipment, components,
parts, tools, and the like in Executive’s custody or possession that have been
obtained or prepared in the course of Executive’s employment with the Company
shall be the exclusive property of the Company, shall not be copied and/or
removed from the premises of the Company, except in pursuit of the business of
the Company, and shall be delivered to the Company, without Executive retaining
any copies, upon notification of the termination of Executive’s employment or at
any other time requested by the Company. The Company shall have the right to
retain, access, and inspect all property of Executive of any kind in the office,
work area, and on the premises of the Company upon termination of Executive’s
employment and at any time during employment by the Company to ensure compliance
with the terms of this Agreement.

 

(h) Reaffirmation of Obligations. Upon termination of Executive’s employment
with the Company, Executive, if requested by Company, shall reaffirm in writing
Executive’s recognition of the importance of maintaining the confidentiality of
the Company’s Confidential Information and proprietary information, and reaffirm
any other obligations set forth in this Agreement.

 

(i) Prior Disclosure. Executive represents and warrants that Executive has not
used or disclosed any Confidential Information he may have obtained from the
Company prior to signing this Agreement, in any way inconsistent with the
provisions of this Agreement.

 

(j) No Previous Restrictive Agreements. Executive represents that, except as
disclosed in writing to the Company, Executive is not bound by the terms of any
agreement with any previous employer or other party to refrain from using or
disclosing any trade secret or confidential or proprietary information in the
course of Executive’s employment by the Company or to refrain from competing,
directly or indirectly, with the business of such previous employer or any other
party. Executive further represents that Executive’s performance of all the
terms of this Agreement and Executive’s work duties for the Company does not and
will not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by Executive in confidence or in trust prior to
Executive’s employment with the Company, and Executive will not disclose to the
Company or induce the Company to use any confidential or proprietary information
or material belonging to any previous employer or other party.

 

(k) Breach; Remedies and Representations. Executive agrees that any breach of
Sections 7(a) through (k) above will cause irreparable damage to the Company,
which cannot be remedied solely by money damages, and that in addition to any
other remedies the Company may have, the Company is entitled to obtain
injunctive relief against Executive to prevent the breach or threatened breach
of any of Executive’s obligations thereunder. Nothing herein, however, shall be
construed as limiting the Company’s right to pursue any other available remedy
at law or in equity, including recovery of damages and termination of this
Agreement and/or any termination or offset against any payments that may be due
pursuant to this Agreement. Executive acknowledges that Executive is
sophisticated in business, that the restrictions and remedies set forth in this
Section 7 do not create an undue hardship on Executive and will not prevent
Executive from earning a livelihood. Executive understands and agrees that the
Company has a legitimate business interest in protecting the Confidential
Information provided to Executive during the course of Executive’s employment
and the goodwill associated with the client and other business relationships
introduced to Executive and developed during Executive’s employment with the
Company. Executive further acknowledges that Executive has had a sufficient
period of time within which to review this Agreement with an attorney of
Executive’s choice and Executive has done so to the extent he desired. Executive
and the Company agree that the restrictions and remedies contained in this
Agreement are reasonable and necessary to protect the Company’s legitimate
business interests regardless of the reason for or circumstances giving rise to
such termination and that Executive and the Company intend that such
restrictions and remedies shall be enforceable to the fullest extent permissible
by law.

 

 10 

 

 

(l) Enforceability. The agreements contained in this Section 7 are independent
of the other agreements contained herein. Accordingly, failure of the Company to
comply with any of its obligations outside of this Section do not excuse
Executive from complying with the agreements contained herein.

 

(m) Survivability. The agreements contained in this Section 7 shall survive the
termination of this Agreement for any reason.

 

(n) Post-Employment Notice Obligations. During the Term and continuing through
the Restricted Period and the Non-Solicitation Period, Executive agrees to
notify any person or entity with whom Executive seeks or accepts employment or
engagement, of Executive’s obligations under this Section 7. The Company
similarly may notify any subsequent employer of Executive’s obligations under
this Section 7 and Executive releases and holds the Company harmless in
connection with such disclosure and the consequences thereof. In addition,
during the Restricted Period and the Non-Solicitation Period, Executive agrees
to notify the Company, in writing, not less than 3 business days before
commencing employment or engagement with a third party and provide the following
information: (i) the name and address of the third party and (ii) Executive’s
new title and general description of Executive’s new job duties and
responsibilities.

 

8. Reformation. If a court concludes that any time period or the geographic area
specified in Sections 7(c) or (g) of this Agreement are unenforceable, then the
time period will be reduced by the number of months, or the geographic area will
be reduced by the elimination of the overbroad portion, or both, so that the
restrictions may be enforced in the geographic area and for the time to the
fullest extent permitted by law.

 

9. Director and Officer Positions. Executive agrees that, upon termination of
employment, for any reason, Executive will immediately tender his resignation
from any and all Board or officer positions held with the Company and/or any of
its direct or indirect parents or subsidiaries.

 

 11 

 

 

10. Indemnification & D&O

 

(a) Claims. The Company shall, to the maximum extent not prohibited by law,
indemnify Executive if Executive is made, or threatened to be made, a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the
right of the Company to procure a judgment in its favor (collectively, a
“Proceeding”), by reason of the fact that Executive is or was an employee,
director or officer of the Company or an affiliate, or is or was serving in any
capacity at the request of the Company for any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, against
judgments, fines, penalties, excise taxes, amounts paid in settlement and costs,
charges and expenses (including attorneys’ fees and disbursements) paid or
incurred in connection with any such Proceeding.

 

(b) Non-Exclusivity. The right to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this Section 10
shall not be deemed exclusive of any other rights which Executive may now or
hereafter have under any law, bylaw, constituent document, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in
Executive’s official capacity and as to action in another capacity while holding
such office.

 

(c) Continuation of Rights. The right to indemnification and reimbursement or
advancement of expenses provided by, or granted pursuant to, this Section 10
shall continue as to Executive after Executive has ceased to be a director,
officer, or employee of the Company and shall inure to the benefit of the heirs,
executors and administrators of Executive’s estate, both with respect to
proceedings that are threatened, pending or completed at the date of such
termination and with respect to proceedings that are threatened, pending or
completed after the date.

 

(d) Enforcement. The right to indemnification and reimbursement or advancement
of expenses provided by, or granted pursuant to, this Section 10 shall be
enforceable by Executive in any court of competent jurisdiction. The burden of
proving that such indemnification or reimbursement or advancement of expenses is
not appropriate shall be on the Company. Neither the failure of the Company
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that such indemnification or reimbursement or advancement of expenses is
proper in the circumstances nor an actual determination by the Company
(including its board of directors, independent legal counsel, or its
stockholders) that Executive is not entitled to such indemnification or
reimbursement or advancement of expenses shall constitute a defense to the
action or create a presumption that Executive is not so entitled. Executive
shall also be indemnified for any expenses incurred in connection with
successfully establishing Executive’s right to such indemnification or
reimbursement or advancement of expenses, in whole or in part, in any
proceeding.

 

(e) Other Services. If Executive serves (i) an affiliate of the Company, or (ii)
any employee benefit plan of the Company or any corporation referred to in
clause (i), in any capacity, then Executive shall be deemed to be doing so at
the request of the Company.

 

 12 

 

 

11. Assignment. In entering into this Agreement, the Company is relying on the
unique personal services of Executive; services from another person will not be
an acceptable substitute. Executive may not assign this Agreement or any of the
rights or obligations set forth in this Agreement without the written consent of
the Company; provided, however, Executive may assign any right to receive
payment under this Agreement. Any attempted assignment by Executive in violation
of this Section 11 shall be void. This Agreement, and any rights and obligations
hereunder, shall be assigned by the Company to a successor by merger or a
purchaser of substantially all of the assets of the Company.

 

12. Tax Withholding. The payments and benefits under this Agreement may be
compensation and as such may be included in either Executive’s W-2 earnings
statements or 1099 statements. The Company may withhold from any amounts payable
under this Agreement such federal, state or local taxes as the Company shall
determine are required to be withheld pursuant to any applicable law or
regulation.

 

13. Binding Agreement. Executive understands that his obligations under this
Agreement are binding upon Executive’s heirs, successors, personal
representatives, and legal representatives.

 

14. Notices. All notices required or permitted to be given pursuant to this
Agreement shall be in writing and shall be delivered by hand or sent by
facsimile or sent, postage prepaid, by registered, certified or express mail or
overnight courier service and shall be deemed given when so delivered by hand or
facsimile, or if mailed, three days after mailing (one business day in the case
of express mail or overnight courier service) to the parties at the following
addresses or facsimiles (or at such other address for a party as shall be
specified by like notice):

 

  If to Executive:  

Barry Ekstrand

8815 Black Cherry Crossing

Katy, TX 76494

          If to the Company:   Eco-Stim Energy Solutions, Inc.       2930 West
Sam Houston Pkwy. South, Ste. 275       Houston, TX 77042       Attn: Chief
Executive Officer

 

Executive hereby agrees to provide the Company with prompt written notice of any
change in Executive’s address for so long as this Agreement remains in effect.
Notices delivered by facsimile shall have the same legal effect as if such
notice had been delivered in person.

 

15. Waiver. No waiver by either Party to this Agreement of any right to enforce
any term or condition of this Agreement, or of any breach hereof, shall be
deemed a waiver of such right in the future or of any other right or remedy
available under this Agreement.

 

16. Entire Agreement. Except as may be provided in any indemnification agreement
between Executive and the Company and/or FracRock International, Inc.
(“FracRock”), the predecessor of the Company’s subsidiary, EcoStim
International, Inc., and any plan and/or award agreement under which Executive
was granted any equity or equity-based award with the Company and its
subsidiaries and their respective predecessors, the terms of this Agreement are
intended by the Parties to be the final expression of their agreement with
respect to the employment of Executive by the Company and supersede all prior
understandings and agreements, whether written or oral, including, but not
limited to, the Prior Employment Agreement. In the event of a conflict between
this Agreement and any such indemnification agreement, it is intended that the
agreement that grants Executive greater rights shall govern. Notwithstanding the
foregoing, this Agreement will not in any way affect any equity or equity-based
awards that may be granted to Executive, which are governed by the applicable
plan and/or award agreements under which they were granted, except to the extent
expressly provided for in such agreement or plan. The Parties further intend
that this Agreement shall constitute the complete and exclusive statement of its
terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative, or other legal proceeding to vary the terms of this
Agreement.

 

 13 

 

 

17. Modification of Agreement. This Agreement may not be changed or modified or
released or discharged or abandoned, in whole or in part, except by an
instrument in writing signed by Executive and an officer or other authorized
executive of the Company.

 

18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to the conflicts
of laws principles thereof.

 

19. Jurisdiction and Venue. With respect to any litigation regarding this
Agreement, Executive and the Company agree to venue in the state or federal
courts in Harris County, Texas, and agrees to waive and does hereby waive any
defenses and/or arguments based upon improper venue and/or lack of personal
jurisdiction. By entering into this Agreement, Executive and the Company agree
to personal jurisdiction in the state and federal courts in Harris County,
Texas.

 

20. Interpretation; Counterparts. No provision of this Agreement is to be
interpreted for or against any Party because that Party drafted such provision.
Whenever the words “include,” “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation.” The words “hereof,” “hereto,” “hereby,” “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
term “or” is not exclusive. The word “extent” in the phrase “to the extent”
shall mean the degree to which a subject or other thing extends, and such phrase
shall not mean simply “if.” The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms. All
pronouns and any variations thereof refer to the masculine, feminine or neuter
as the context may require. Any agreement, instrument or law defined or referred
to herein means such agreement, instrument or law as from time to time amended,
modified or supplemented, unless otherwise specifically indicated. This
Agreement may be executed in two or more counterparts (including by facsimile or
portable document file (PDF) signatures), each of which shall be deemed an
original and all such counterparts shall constitute one and the same instrument.

 

 14 

 

 

21. Compliance With Section 409A.

 

(a) Delay in Payments. Notwithstanding anything to the contrary in this
Agreement, if upon the Termination Date, any stock of the Company is publicly
traded on an established securities market within the meaning of Code Section
409A, and in the opinion of reputable outside counsel engaged by the Company and
acceptable to Executive, Executive is a “specified employee” within the meaning
of Code Section 409A and the deferral of any amounts otherwise payable under
this Agreement as a result of Executive’s termination of employment is necessary
in order to prevent any accelerated or additional tax to Executive under Code
Section 409A, then the Company will defer the payment of any such amounts
hereunder until the earlier of: (i) the date that is six (6) months following
the date of Executive’s termination of employment with the Company, or (ii) the
date of Executive’s death, at which time any such delayed amounts will be paid
to Executive in a single lump sum.

 

(b) Section 409A. It is the intention of the Parties that all payments and
benefits under this Agreement (and any amendment hereto) shall be made and
provided in a manner that is either exempt from or intended to avoid taxation
under Code Section 409A, to the extent applicable. Any ambiguity in this
Agreement (or any amendment hereto) shall be interpreted to comply with the
above. Executive acknowledges that the Company has made no representations as to
the treatment of the compensation and benefits provided hereunder and Executive
has been advised to obtain his own tax advice. Each amount or benefit payable
pursuant to this Agreement (and any amendment hereto) shall be deemed a separate
payment for purposes of Code Section 409A.

 

(c) Reimbursement. To the extent that the reimbursement of any expenses or the
provision of any in-kind benefits pursuant to this Agreement is subject to Code
Section 409A, (A) the amount of such expenses eligible for reimbursement, or
in-kind benefits to be provided hereunder during any one calendar year shall not
affect the amount of such expenses eligible for reimbursement or in-kind
benefits to be provided hereunder in any other calendar year; provided, however,
that the foregoing shall not apply to any limit on the amount of any expenses
incurred by Executive that may be reimbursed or paid under the terms of the
Company’s medical plan, if such limit is imposed on all similarly situated
participants in such plan; (B) all such expenses eligible for reimbursement
hereunder shall be paid to Executive no later than December 31st of the calendar
year following the calendar year in which such expenses were incurred or such
earlier date as provided under the Company’s policies; and (C) Executive’s right
to receive any such reimbursements or in-kind benefits shall not be subject to
liquidation or exchange for any other benefit.

 

(d) Reformation. If the Company determines that any compensation or benefits
provided by this Agreement may result in the application of Code Section 409A,
the Company shall, in consultation with Executive, modify the Agreement in the
least restrictive manner necessary in an effort to exclude such compensation
from the definition of “deferred compensation” within the meaning of such Code
Section 409A or in an effort to comply with the provisions of Code Section 409A,
other applicable provision(s) of the Code and/or any rules, regulations or other
regulatory guidance issued under such statutory provisions, without any
diminution in the value of the payments or benefits to Executive.
Notwithstanding the foregoing, the Company shall not be required to assume any
increased economic burden.

 

 15 

 

 

(e) Overall Compliance. In the event that it is reasonably determined by the
Company and Executive that, as a result of Code Section 409A, any of the
payments that Executive is entitled to under the terms of this Agreement or any
nonqualified deferred compensation plan (as defined under Section 409A) may not
be made at the time contemplated by the terms hereof or thereof, as the case may
be, without causing Executive to be subject to an income tax penalty and
interest, the Company will make such payment on the first day that would not
result in Executive incurring any tax liability under Section 409A.

 

(f) Consultation with Tax Advisor. Executive is hereby advised to consult
immediately with his own tax advisor regarding the tax consequences of this
Agreement, including the consequences of Code Section 409A.

 

 16 

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement in multiple copies,
effective as of the date first written above.

 

EXECUTIVE: COMPANY:       Eco-Stim Energy Solutions, Inc.       /s/ Barry
Ekstrand   By: /s/ J. Christopher Boswell  

Barry Ekstrand

    J. Christopher Boswell          

Date:

4/21/17   

Date:

4/21/17

 

 17