Exhibit 10.4 

 

Fotech / Eco-Stim

April 30, 2014

 

EXCLUSIVE SALES AGREEMENT

 

This Exclusive Sales Agreement dated as of April 30, 2014 (this “Agreement”)
between Fotech Oil & Gas Solutions Limited, an English company, (the “Seller”)
and Eco-Stim Energy Solutions, Inc. a Nevada corporation, (the “Purchaser”)
relates to the granting of exclusivity to the territory of the Argentine
Republic and the United Mexican States (collectively the “Territory”) related to
the possible purchase by the Purchaser and usage of certain products sold by the
Seller including the latest version of the “Helios” data acquisition system and
any further developments of and replacements for that system developed during
the Term of this Agreement (hereinafter referred to as the “Units”), which are
used to perform down-hole monitoring of oil and gas wells using fiber-optics
(hereinafter referred to as the “Services”). In this Agreement the Seller and
the Purchaser may be referred to collectively as the “Parties” or individually
as a “Party”.

 

In consideration of the respective covenants of Seller and Purchaser as
contained in this Agreement, the Parties, intending to be legally bound, hereby
agree as follows:

 

1. DUTIES AND UNDERTAKINGS OF PURCHASER.

 

The Purchaser shall:

 

a. Provide all shipping and logistic services in support of delivery of Units
and/or spare and repair parts in regards to the Units from the Seller, including
the costs associated with shipment, duties and taxes.

 

b. Purchase all Seller-manufactured spare and repair parts in regards to Units
from Seller.

 

c. Support the Seller with the delivery of Services with respect to the Units in
a professional and diligent manner.

 

d. Comply with all applicable laws and regulations in performing its
responsibilities hereunder (including, but not limited to, the U.S. Foreign
Corrupt Practices Act and any applicable national or local laws in the
Territory) in any of its dealings with the Units.

 

e. Make no representations to its customers or any other third party with
respect to Unit specifications or features, except as may be approved in writing
or published by Seller.

 

2. DUTIES AND UNDERTAKINGS OF SELLER.

 

The Seller shall:

 

a. Provide Purchaser with all available information useful for basic in-field
servicing for the Units. Equipment maintenance and servicing will be provided at
the Seller’s UK HQ with shipment costs being borne by the Purchaser.

 

b. Conduct basic system awareness and operator training in North America and the
Territory to Purchaser’s technical team. Reasonable travel expenses and Senior
Engineer day rates, as included in Schedule 3, for Seller’s trainers delivering
the training and travelling to and from the Territory at Purchaser’s request
shall be reimbursed by the Purchaser.

 

c. Provide assistance to the Purchaser in connection with the provision of
services in connection with the Units at standard rates defined in Schedule 3.

 

d. Provide on-site field engineering Services in the Territory at standard rates
defined in Schedule 3.

 

e. Provide remote data analysis and interpretation support from the Seller’s UK
HQ at standard rates defined in Schedule 3.

 

1

 

 

Exhibit 10.4 

 

Fotech / Eco-Stim

April 30, 2014

 

f. Grant (which grant is evidenced hereby) an exclusive license to the Purchaser
allowing the Purchaser the exclusive right to provide in-well monitoring
services utilizing the Seller’s technology (the “Business”) in the Territory for
the term of this Agreement. This license shall continue so long as this
Agreement remains in effect. Notwithstanding the foregoing, owners of equipment
similar to the Units purchased from Seller prior to the date of this Agreement
shall be permitted to continue operating that equipment wherever they so choose.
A complete list of such operators is attached to this Agreement as Schedule 1.
Work with BP plc and its Affiliates in the Territory is expressly excluded from
this agreement.

 

g. For the avoidance of doubt, this exclusive license shall in no way inhibit
Seller from conducting its normal business in the Territory related to pipeline
or “above ground” monitoring. However, the Seller agrees that it will not engage
in any efforts to reprogram or otherwise reconfigure any Units that were sold
into the Territory for pipeline or “above ground” monitoring in a manner that
results in those systems being then used for “sub-surface” in-well monitoring
purposes.

 

h. The Seller shall pass on support requests from existing operators of DAS
equipment in the Territory to the Purchaser and shall not provide support for
“sub surface” in-well monitoring applications without express agreement from the
Purchaser.

 

3. TERRITORY.

 

The Territory may be expanded from time to time, subject to further minimum
guaranteed royalty payments and if so agreed in writing by the Parties, and
added as an amendment to this Agreement between both Parties. Unless prohibited
by a confidentiality arrangement, whenever from time to time during the Term the
Seller receives any written or oral request or proposal from a non-Party to
enter into an exclusive dealing agreement in any area outside the Territory,
Seller shall notify Purchaser thereof, describing the terms and conditions of
the request or proposal in reasonable detail (including, at a minimum the area
proposed, the duration, and the minimum-purchase requirement, if any).
Furthermore, if Seller is willing to accept the request or proposal, Seller
shall give Purchaser the prior right and option to enter into an amendment of
this Agreement expanding the Territory to include such proposed area, provided
that the terms and conditions of such amendment are at least as favorable to
Seller as those described in its notice to Purchaser.

 

4. AGREEMENT DURATION.

 

This Agreement shall be for an initial period of twelve (12) months commencing
on the date hereof, provided that Purchaser pays Seller a non-refundable fee of
$500,000 (Five Hundred Thousand US Dollars) on or before May 1, 2014 or within 3
days during which banks are open for business in both London and New York
(“Business Days”) following the execution of this agreement (whichever occurs
later), in consideration of the Seller’s exclusivity undertakings above. This
period during which Agreement is in effect (the “Term”) shall be automatically
renewed upon the first anniversary of its commencement date for one (1)
additional twelve (12) month period, provided that the Purchaser pays Seller a
further $750,000 exclusivity fee within 15 calendar days from the applicable
anniversary date plus another $250,000 at the end of the second year if
Purchaser generates sales in that second year of at least $5 million from the
operation of the Units. Further, if sales during the second year exceed $5
million, Purchase shall pay Seller an additional 10% royalty on that portion of
those sales that exceed $5 million in that second year. Lastly, the Purchaser
may extend the agreement for an additional (12) month period at the end of the
second year so long as both parties agree by paying a further $500,000
exclusivity fee. Exclusivity fees are paid on a non-refundable basis. This
Agreement may be terminated earlier in the circumstances described in Section 12
below.

 

5. PRICES, PAYMENT TERMS AND OTHER TERMS AND CONDITIONS OF SALE.

 

a. In the event Purchaser agrees to buy, Purchaser shall purchase the Units from
the Seller at the prices of $250,000 per Unit (the “Purchase Price”). From and
after the end of the first renewal period described in Section 4 above Seller
may increase the Purchase Price by up to five percent (5%) yearly.

 

b. The Purchase Price for the Units purchased by the Purchaser from the Seller
shall be paid within thirty (30) days from the date Purchaser receives the
invoice or shipment of Units by the Purchaser, whichever occurs later. Purchaser
agrees to pay in U.S. Dollars (“$”). The purchase order for the initial order of
two Units and associated equipment and spares is attached hereto as Schedule 2.

 

c. Purchaser’s payment to Seller of the fee(s) specified in Section 4 is in
consideration of the Seller’s exclusivity covenants contained in Sections 2 and
11.

 

2

 

 

Exhibit 10.4 

 

Fotech / Eco-Stim

April 30, 2014

 

d. Purchaser’s purchase orders shall set forth a proposed delivery date which
shall call for delivery to be made within a reasonable time, but not later than
fourteen (14) weeks following receipt and acceptance of the purchase order. If
Seller is unable to comply with Purchaser’s requested delivery date, Seller
shall immediately inform Purchaser, and Seller and Purchaser shall use
reasonable efforts to agree upon an alternative estimated delivery date. Seller
agrees that, in general, the agreed upon estimated delivery date shall be no
later than twelve (12) weeks after the requested delivery date, provided the
purchase order does not exceed by 25% the quantity indicated in the most recent
applicable forecast provided. Notwithstanding the foregoing, shipping or
delivery dates set forth in any purchase order acknowledgement or other document
shall be deemed to be estimates only, and SELLER IN NO EVENT SHALL BE LIABLE TO
PURCHASER FOR ANY DAMAGES, WHETHER DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL,
SPECIAL, OR OTHERWISE, BECAUSE OF ANY DELAYS IN SHIPMENT OR DELIVERY, REGARDLESS
OF THE CAUSE THEREFOR. All shipments made by Seller hereunder shall be F.C.A.,
Seller’s loading dock. All risk of loss of or damage to the Units in transit
shall be borne by Purchaser, commencing with the placement of the Units in the
custody of a carrier or shipping agent at Seller’s loading dock.

 

e. Purchaser shall pay all invoices when due. The payment terms hereunder shall
be net thirty (30) days from the date of invoice or the date of shipment of the
Unit, whichever occurs later. Receipt of any check, draft or other commercial
paper shall not constitute payment unless and until such instrument has been
honored by the appropriate financial institution(s). Purchaser shall not make
deductions of any kind from any payments due Seller, unless a credit memorandum
has been issued by Seller to Purchaser. No payment by Purchaser to Seller of any
lesser amount than that due to Seller shall be deemed to be other than a payment
on account, and no endorsement or statement on any check or in any letter or
other document accompanying any payment shall create an accord and satisfaction.
Seller may accept any payment without prejudice to Seller’s right to recover any
remaining balance or to pursue any other remedy provided in this Agreement or
under applicable law.

 

6. CONFIDENTIALITY

 

All non-public information disclosed by Seller to Purchaser in connection with
this Agreement (collectively, “Confidential Information,” which term
specifically includes, but is not limited to, information related to the Units,
inventions, improvements, software, product roadmaps, product design
information, Seller financial information or sales data, and this Agreement)
shall be treated by Purchaser as Seller’s proprietary and confidential
information and shall not be utilized by Purchaser for any purposes other than
those consistent with the purposes of this Agreement, nor disclosed by Purchaser
to any other person, firm or entity (other than Purchaser’s employees or agents
with a need to know such information and who are bound by a confidentiality
agreement containing terms no less restrictive than the terms in this Section
6), during the Term of this Agreement or within 12 months thereafter, without
the prior written consent of Seller in each instance. Purchaser shall be
responsible for any breach of this Section 6 by such employees or agents. The
restrictions in this Section 6 shall not be applicable to information which, is
possessed by Purchase or in the public domain at the time of its disclosure to
Purchaser hereunder or which thereafter enters the public domain through no
fault of Purchaser or its employees or agents. On any termination or expiration
of this Agreement, or at any time upon request of Seller, Purchaser shall return
to Seller all copies of Confidential Information, regardless of who produced
such copies.

 

Purchaser acknowledges that any breach of its obligations under this Agreement
with respect to the proprietary rights or Confidential Information of Seller or
a violation of Purchaser’s obligations under this Agreement will cause Seller
irreparable injury for which remedies at law are inadequate, and therefore
Seller will be entitled to equitable relief, without the necessity of posting
bond or showing any monetary damages, in addition to all other remedies provided
by this Agreement or available at law.

 

7. OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS.

 

7.1 Purchaser acknowledges the exclusive ownership by Seller of all trademarks,
trade names, trade dress, designs, slogans, logos and copyrighted materials
utilized worldwide in connection with the Units, regardless of whether such
items have been registered (collectively, the “Seller Trademarks”). Purchaser
hereby is granted a limited, non-exclusive, non-transferable privilege of using
Seller Trademarks only in connection with Purchaser’s (i) sales and promotion of
the Units and (ii) performance of Services. All use of Seller Trademarks shall
be in strict conformance with Seller’s trademark usage guidelines in effect from
time to time, which may include the right to prohibit certain types, manner or
content of advertising or promotions. In any instance in which Purchaser
utilizes any Seller Trademarks in advertising or other promotional materials,
such materials shall indicate that Seller Trademarks are owned by Seller. Seller
shall have the continuing right upon request to review all uses of any of Seller
Trademarks as well as the right to inspect (upon reasonable notice) any
materials, properties, products or documentation (whether in written or
electronic form) connected in any way with Purchaser’s use of Seller Trademarks.

 

3

 

 

Exhibit 10.4 

 

Fotech / Eco-Stim

April 30, 2014

 

7.2 Purchaser shall acquire no rights in any Seller Trademarks or any other
Seller Intellectual Property, with the exception of the limited use granted in
Section 7.1 above. However, if any such rights arise by operation of law,
Purchaser shall promptly assign same to Seller, at no charge.

 

7.3 Purchaser agrees that it shall not do, or cause to be done, any acts which
create in Purchaser’s favor any right, title or interest in or to any Seller
Trademark or any other Seller Intellectual Property, or otherwise contest or in
any way dilute, tarnish, impair or tend to impair the value of Seller’s
Trademarks or any other Seller Intellectual Property, or any portion of Seller’s
right, title and interest in or to Seller Trademarks, or any other Seller
Intellectual Property.

 

7.4 Purchaser agrees that at no time during the Term of this Agreement nor at
any time after its expiration or termination shall it adopt, register or use in
any manner whatsoever, without Seller’s prior written consent, any word, symbol
or combination thereof, or any domain name, which in any way imitates,
resembles, or is similar to any Seller Trademark.

 

7.5 Purchaser agrees to use reasonable efforts to protect Seller’s proprietary
rights, and to cooperate in Seller’s efforts to protect its proprietary rights,
in and to Seller Trademarks or any other Seller Intellectual Property. If
Purchaser becomes aware of any infringement or potential infringement of any
Seller Trademarks or any other Seller Intellectual Property in the Territory,
Purchaser shall notify Seller promptly thereof. Seller, at its option, may elect
to prosecute said infringement, but the failure of Seller to do so shall not
affect the validity or terms of this Agreement. As reasonably requested by
Seller, Purchaser shall cooperate fully with Seller in connection with the
prosecution of such infringements at its sole cost and expense.

 

7.6 Upon any termination or expiration of this Agreement, Purchaser shall
discontinue all use of Seller Trademarks, except in connection with Purchaser’s
sales of any remaining Unit inventory or performance of Services using Units
owned by Purchaser, and shall make no claim to any Seller Trademarks or against
the use thereof by Seller or others.

 

8. WARRANTIES.

 

8.1 Limited Warranty on Units. Seller Units are warranted to Purchaser only
against defects in material and workmanship for a period of three hundred
sixty-five (365) days from the date of delivery to Purchaser. This warranty
shall be void if a Unit is altered or used in conjunction with other equipment
which was not designed to interface with that Unit or if the Unit has been
damaged or subjected to improper or abnormal use or if any parts or media are
improperly installed or replaced.

 

8.2 No Other Warranties. EXCEPT AS EXPRESSLY SET FORTH ABOVE IN ARTICLE 8.1, ALL
EXPRESS AND IMPLIED WARRANTIES, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT, ARE HEREBY EXPRESSLY
EXCLUDED AND DISCLAIMED. Without limiting the generality of the foregoing, no
oral or written statements, technical information or recommendations relating to
the Units provided by Seller or its personnel shall constitute a guarantee or
warranty and should not be relied upon as such.

 

8.3 Procedures for Remedying Defective Units. In the event that a Unit sold is
found to be defective within the warranty period, Purchaser shall give notice
and satisfactory proof of such defect within a reasonable period of time after
discovery of the defect. Purchaser’s sole remedy in the event of a breach of the
limited warranty set forth in Section 8.1, and Seller’s sole obligation
therefore, shall be to repair or replace the defective Unit. Units returned must
be packaged in the original or comparable packing or shipping container. In the
event the Unit is not so packaged, or if shipping damage is evident, it will not
be accepted for service under warranty. Replacement or repaired Units shall be
shipped to Purchaser at Seller’s expense. Additional costs for expedited
shipment will be the responsibility of Purchaser. If Seller determines that the
Unit returned for warranty service is not defective or within warranty,
Purchaser will pay all handling and transportation costs.

 

4

 

 

Exhibit 10.4 

 

Fotech / Eco-Stim

April 30, 2014

 

8.4 No Warranty to Customers. If Purchaser elects to offer a warranty to its
customers with respect to the Units, or if any warranty obligations are imposed
by applicable laws or regulations in the Territory or any other jurisdiction,
said warranty shall be in Purchaser’s name only, Purchaser shall be responsible
for satisfying all such additional obligations and Purchaser shall not represent
to any of its customers (either expressly or by implication) that Seller has any
responsibility under such warranty.

 

9. OTHER SERVICES.

 

The Seller will provide technical assistance from the UK, US or Canada. The
Seller shall provide all Units ordered by Purchaser within a mutually agreed
upon delivery date. If Purchaser requests technical assistance in the Territory,
Purchaser agrees to pay the travel costs of Seller’s trainer(s) and a daily rate
as per Schedule 3.

 

Seller shall at Purchaser’s request provide references to prospective customers
outside the U.S. and Canada.

 

Purchaser shall introduce Seller to potential customers outside the Territory to
the extent Purchaser encounters them from time to time. Seller shall use
reasonable efforts to promote Seller’s Technology in Purchaser’s targeted
markets outside the Territory.

 

10. SEVERABILITY.

 

In the event that one or more provisions of this Agreement are deemed invalid,
the validity of the remaining provisions of the Agreement shall not be affected
thereby.

 

11. FURTHER EXCLUSIVITY.

 

Seller hereby agrees that it shall not market or sell to any Person (other than
BP plc and its Affiliates and the Persons listed on Schedule 1 and their
respective Affiliates) engaged in the Business in the Territory (or to any
Affiliate of such a Person) the Units or any other products that are competitive
with or similar in functionality to the Units (unless such Person is a Global
company and the marketing and sales effort relates to areas outside of the
Territory) and any violation of this covenant by the Seller shall be a material
breach of this Agreement. If Seller engages in a marketing or sales effort with
a Global company, Seller must expressly communicate that Purchaser maintains an
exclusive license in the Territory.

 

12. TERMINATION.

 

12.1 Termination by Seller. Seller may terminate this Agreement at any time in
the event that:

 

a. Purchaser defaults in any payment due to Seller and such default continues
un-remedied for a period of fifteen (15) days following written notice of such
default;

 

b. Purchaser fails to perform any other obligation, warranty, duty or
responsibility or is in default with respect to any term or condition undertaken
by Purchaser under this Agreement, and, if curable, such failure or default
continues un-remediated for a period of thirty (30) days following written
notice of such failure or default.

 

c. A receiver is appointed for the Purchaser or its property, Purchaser makes an
assignment for the benefit of its creditors, any proceedings are commenced by,
for or against the Purchaser under any bankruptcy, insolvency, composition or
debtor’s relief law, or the Purchaser is liquidated or dissolved; or

 

d. Seller undergoes a Change in Control. For the purposes of this Agreement, a
Party shall be deemed to have undergone a “Change in Control” if: 50% or more of
the outstanding voting securities of that Party are sold or otherwise
transferred to any “Person” other than one which was an “Affiliate” (each as
defined in Section 13 below) of that Party during each of the 180 days preceding
that transfer; that Party is merged or consolidated with or into another
corporation and as a result of such merger or consolidation less than 50% of the
outstanding voting securities of the surviving or resulting corporation are not
owned in the aggregate by the Persons who were shareholders of that Party
immediately prior to such merger or consolidation; that Party sells
substantially all of its assets to another Person (other than a corporation
which is its wholly owned subsidiary); or the individuals who constitute that
Party’s Board of Directors or managers or (if that Party’s management is not
vested in one or more managers) members on the date set out at the beginning of
this Agreement (its “Incumbent Management”) cease for any reason to constitute
at least a majority thereof, provided that any individual becoming a director,
manager, or (if applicable) member after that date whose election, or nomination
for election, by the holders of that Party’s equity securities, was approved by
a vote of at least three-quarters of the directors, managers or (if applicable)
members comprising the Incumbent Management shall be deemed to be a member of
the Incumbent Management for the purposes of this clause.

 

5

 

 

Exhibit 10.4 

 

Fotech / Eco-Stim

April 30, 2014

 

12.2 Termination by the Purchaser. The Purchaser may terminate this Agreement in
the event that:

 

a. Seller fails to perform any material obligation, warranty, duty or
responsibility or is in default with respect to any material term or condition
undertaken by the Seller under this Agreement and such failure or default
continues unresolved for a period of thirty (30) days following written notice
of such failure or default; or

 

b. Purchaser undergoes a Change in Control.

 

12.3 Orders After Termination Notice. Upon any expiration or termination of this
Agreement, any orders outstanding and unshipped as of the expiration or
termination date shall be filled by Seller in accordance with this Agreement.
After any notice of termination of this Agreement is given, Seller will be
entitled (during any period allowed for cure) to reject all or part of any
orders received from Purchaser after notice but prior to the effective date of
termination. Notwithstanding any credit terms made available to Purchaser prior
to that time, any order that Seller elects to fill after notice of termination
is given shall be paid for by certified or cashier’s check prior to shipment.

 

12.4 Surviving Obligations. Notwithstanding anything to the contrary herein, the
termination of this Agreement shall not affect Purchaser’s obligations to
satisfy any outstanding indebtedness to Seller, and shall not relieve Purchaser
of any of its other obligations hereunder with respect to the Units remaining in
Purchaser’s inventory, including without limitation, the restrictions of Section
2.12 above. Further, Sections 6, 7, 13 and 14 of this Agreement shall survive
termination for any reason.

 

Subject to any specific provisions in this Agreement excusing either Party’s
performance or limiting its liability, each Party shall be excused from any
failure or delay in performance (with the exception of any failure or delay by
Purchaser in making payments to Seller) resulting directly or indirectly from
inability to obtain raw materials, transit failure or delay, labor problems or
disputes, governmental orders or restrictions, fire, flood, or other acts of
nature, accident, war, civil disturbances, or any other cause(s) beyond such
Party’s reasonable control.

 

12.5 Change in Control of Seller; Notice. If Seller proposes to enter into
discussions or negotiations with any Person (a “Prospective Transferee”)
concerning any transaction that would constitute a Change in Control of Seller
(a “Transfer”), Seller shall, not fewer than five (5) Business Days before
entering into any “no shop” or other legally-binding agreement to negotiate
exclusively with the Prospective Transferee, give a written notice to the
Purchaser stating that it is conducting such discussions or negotiations. Seller
need not identify the Prospective Transferee. Seller shall not in any way be
obligated to enter into any type of exclusivity period or stand-still agreement
with Purchaser as a result of this notification.

 

13. ASSIGNMENT, GOVERNING LAW AND DISPUTE RESOLUTION

 

13.1 Assignment; “Affiliate”. Neither Party may assign this Agreement without
the prior written consent of the other, except to an Affiliate. Throughout this
Agreement, “Affiliate” means any Person that, directly or indirectly, controls,
or is Controlled by or under common control with, another person; “Person” means
an individual or a partnership, joint venture, corporation, trust, other legal
entity, or unincorporated organization; and “Control” (including the terms
“Controlled by” and “under common control with”), as used with respect to any
Person, means the power to direct or cause the direction of the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise. Without limiting the generality
of the foregoing, (i) a Person shall conclusively be presumed to Control any
partnership, joint venture, corporation, trust, other legal entity if he or it
directly or indirectly owns 50% or more of the entity’s outstanding equity
shares or interests or 50% or more of the outstanding securities entitled to
vote in elections of the entity’s directors or managers, either directly or
indirectly through one or more Controlled entities, and (ii) control of the
general partner of a limited partnership shall constitute Control of such
limited partnership as well.

 

6

 

 

Exhibit 10.4 

 

Fotech / Eco-Stim

April 30, 2014

 

13.2 Governing Law. This Agreement shall be governed and construed in all
respects in accordance with the laws of the State of Texas without regard to the
conflicts of law principles thereof. The United Nations Convention on Contracts
for the International Sale of Goods is hereby expressly excluded.

 

13.3 Arbitration. The Parties agree that all controversies and disputes of any
kind or nature relating in any way to this Agreement, the Units or the Services
as defined in this Agreement, or the Parties’ dealings in connection herewith,
including, without limitation, disputes relating to the negotiations,
inducements to enter into, or the execution of this Agreement, and/or the
interpretation, enforceability, performance, breach, termination or validity of
any provision of this Agreement, shall be submitted to final and binding
arbitration before Judicial Arbitration and Mediation Services (“JAMS”). The
Parties further agree that any disagreement as to whether a particular type of
dispute is subject to arbitration shall, regardless of the nature of the
dispute, be decided exclusively by an arbitrator, and not by a court, it being
the Parties’ intention that no dispute or controversy relating in any manner
whatsoever to this Agreement, the Units or Services as defined in this
Agreement, or their dealings hereunder shall be submitted to litigation in state
or federal court. Each Party agrees that the award of the arbitrator shall be
final and non-appealable and shall be the sole and exclusive remedy between or
among them regarding any and all claims, counterclaims, issues and accountings
presented to the arbitrator, irrespective of the magnitude thereof. All
arbitration proceedings shall be conducted pursuant to JAMS’ Comprehensive
Arbitration Rules and Procedures (the “JAMS Rules”), held in Houston, Texas, and
before one neutral arbitrator domiciled in Houston, Texas. The Parties hereby
consent to the jurisdiction of Texas and waive any objections or argument
regarding the venue of a proceeding including confirmation proceedings, being
based in Houston, Texas. The neutral arbitrator shall be selected in accordance
with JAMS Rules. The arbitrator shall have the authority to award any remedy or
relief that a court of competent jurisdiction could order or grant, including,
without limitation, the issuance of an injunction. Notwithstanding the
foregoing, the Parties expressly agree that either Party may seek a temporary
restraining order or temporary injunction in the state district courts of Harris
County, Texas, as allowed under Texas law, but the award, if any, of final
injunctive relief shall be made solely by the arbitrator. The arbitrator shall
resolve in the award the extent to which the Parties shall bear the arbitration
costs and any award of attorneys’ fees for the prevailing Party. The prevailing
Party shall constitute the Party who recovered substantially all of the relief
requested in the demand for arbitration or answer, as amended. The arbitration,
including but not limited to the arbitration award, shall be governed by the
Federal Arbitration Act, 9 U.S.C. § 1 et seq., and judgment upon the award
rendered by the arbitrator(s) may be confirmed and entered by any court having
competent jurisdiction over the Parties or their assets. The Party seeking
confirmation or enforcement of the arbitration award shall be entitled to
recover from the court in which such petition is pending all costs, fees, and
expenses, including attorneys’ fees, associated with such a petition.

 

13.4 Submission to Jurisdiction. SUBJECT IN ALL RESPECTS TO THE IMMEDIATELY
PRECEDING PARAGRAPH, ANY DISPUTE, CONTROVERSY OR CLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE BREACH, TERMINATION OR VALIDITY HEREOF,
INCLUDING A REQUEST FOR A TEMPORARY RESTRAINING ORDER OR TEMPORARY INJUNCTION
SHALL BE BROUGHT IN ANY STATE COURT LOCATED WITHIN THE STATE OF TEXAS, COUNTY OF
HARRIS, AND EACH OF THE PARTIES HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION
OF SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING AND WAIVES ANY OBJECTION TO
VENUE LAID THEREIN.

 

14. INDEMNIFICATION.

 

14.1 Scope. During the performance of this Agreement, the indemnity obligations
of the Parties shall apply to events at any geographic location where this
Agreement is being performed by Seller and/ or Purchaser or, following the
delivery date where the Unit is being used by or for the benefit of Purchaser.

 

14.2 Purchaser’s Indemnification. Subject to the provisions of Section 14.4,
Purchaser agrees to and does hereby indemnify and hold harmless Seller, Seller’s
subsidiaries, affiliates and predecessors, and the officers, directors,
shareholders, representatives, employees, agents, successors and assigns of all
such entities (collectively, the “Seller Indemnified Parties”), from and against
any and all damages, liabilities, settlements, costs and other expenses payable
by Seller Indemnified Parties to third parties by reason of the assertion of any
claim or the institution of any litigation against them during the Term of this
Agreement or subsequent to its termination, which is directly or indirectly
based upon or related to (i) any acts or omissions of Purchaser, its employees
or agents in the marketing, sale and/or distribution of the Units (ii) any
warranty claims referenced in Section 8.4 or (iii) any modification of the Units
other than by Seller or combination of the Units with any material, apparatus or
equipment not authorized by Seller.

 

7

 

 

Exhibit 10.4 

 

Fotech / Eco-Stim

April 30, 2014

 

14.3 Seller’s Indemnification. Subject to the provisions of Section 14.4 below,
Seller agrees to and does hereby indemnify and hold harmless Purchaser,
Purchaser’s subsidiaries, affiliates and predecessors, and the officers,
directors, shareholders, employees, agents, successors and assigns of all such
entities (collectively, the “Purchaser Indemnified Parties”), from and against
any and all damages, liabilities, settlements, costs and other expenses payable
by the Purchaser Indemnified Parties to third parties by reason of the assertion
of any claim or the institution of any litigation against them during the term
of this Agreement or subsequent to its termination, which is directly or
indirectly based upon or related to (i) any acts or omissions of Seller, its
employees or agents in the marketing, sale and/or distribution of the Units
provided that this shall not apply to defects in material or workmanship or (ii)
alleging that a Unit infringes any patent, copyright or other intellectual
property right of that third party. As a condition to Seller’s obligation,
Purchaser is required to comply with all of its obligations relating to its use
of Seller Intellectual Property. Notwithstanding the foregoing, Seller will have
no liability in connection with any such claimed infringement unless (a) the
Unit was manufactured by Seller in accordance with Seller’s designs and is used
by Purchaser in the same form, state, condition, manner and purpose for which it
was sold to Purchaser by Seller, and (b) such alleged infringement does not
arise in whole or in part from Purchaser’s modification of the Unit or any use
of same with other material, apparatus, equipment or software not authorized by
Seller or from any other act or omission on Purchaser’s part. As to any such
asserted claim, Seller shall have the right, in its sole discretion, to do any
of the following with respect to any infringing Unit then in Purchaser’s
inventory: (1) replace the infringing Unit with a non-infringing product; (2)
modify the infringing Unit so that it no longer is infringing; or (3) require
Purchaser to return the infringing Unit and reimburse Purchaser for the price
which Purchaser paid therefore together with Purchaser’s costs of
transportation.

 

14.4 Indemnification Procedures. The obligation of indemnification set forth in
Sections 14.2 and 14.3 above are subject to this Section 14.4. A Party claiming
indemnification (the “‘Indemnified Parties”) shall timely notify the
indemnifying Party of any claim or litigation that is subject to indemnification
hereunder. If the indemnifying Party is Seller, it shall have the exclusive
right to assume the defense, at its expense, of, and shall defend and/ or
settle, any such claim or litigation. If the indemnifying Party is Purchaser, it
shall have the obligation to defend and/or settle the claim or litigation;
provided that Seller reserves the right, without being required to do so, and
without waiver of any indemnity hereunder, to defend any claim, action or
lawsuit coming within the scope of Section 14.2. If the indemnifying Party fails
to notify the Indemnified Parties in writing that it will assume the defense of
the subject claim or litigation within ten (30) days following receipt of notice
thereof, or thereafter fails to diligently defend or attempt to settle said
claim or litigation, the Indemnified Parties shall have the right to assume
their own defense, and/ or settle or compromise any such claim or litigation and
the indemnifying Party shall be obligated to reimburse the Indemnified Parties
for any and all reasonable expenses (including but not limited to attorneys’
fees) incurred in the defense of such claim or litigation, in addition to the
indemnifying Party’s other indemnity obligations hereunder set forth in Section
14, including for any settlement affected by the Indemnified Parties.

 

14.5 Limit of liability. Nothing in this agreement shall limit or exclude the
Seller’s liability for any claim, cause of action, damage or loss, for which
Seller is not permitted to limit or exclude liability under applicable law.
Subject to the foregoing and notwithstanding any other term, provision or
condition of this Agreement, Seller’s liability, for any claim, cause of action,
damage or loss, whether sounding in contract, tort, express or implied warranty,
statute, or otherwise, shall be limited to the total amount paid by Purchaser to
Seller hereunder, which sum Purchaser and Seller agree is a reasonable
liquidation and limitation of damages in light of anticipated or any actual harm
resulting from a breach of this Agreement or from any other claims asserted
under any of the foregoing legal theories, the difficulties of proof of loss and
the inconvenience or non-feasibility of otherwise obtaining an adequate remedy.
In all events, the parties agree that the above sum is not unreasonably large,
given the circumstances of the parties’ dealings with each other, and shall not
be construed as a penalty.

 

8

 

 

Exhibit 10.4 

 

Fotech / Eco-Stim

April 30, 2014

 

Purchaser agrees that its liability under this Agreement shall be limited to the
total amount paid by Purchaser to Seller hereunder, and agrees to waive, release
and discharge Seller from any and all claims sounding in negligence, in excess
of said amount. Purchaser acknowledges that it has carefully read this partial
waiver of rights and fully understands that it is a release of liability of all
legal actions sounding in negligence.

 

THE FOREGOING PARAGRAPH CONSTITUTES A PARTIAL WAIVER AND RELEASE OF NEGLIGENCE
CLAIMS TO WHICH PURCHASER WILL BE BOUND.

 

Purchaser further waives any rights it has to any claim, cause of action, damage
or loss in excess of the amount paid by Purchaser to Seller hereunder, under the
Deceptive Trade Practices-Consumer Protection Act, Section 17.41 et seq.,
Business & Commerce Code, a law that gives consumers special rights and
protections. Purchaser hereby acknowledges that Purchaser has consulted with an
attorney of Purchaser’s selection, and Purchaser voluntarily consents to this
waiver.

 

15. NOTICES.

 

All notices and other communications given or made pursuant to this Agreement
shall be in writing and shall be (a) sent by an overnight courier service that
provides proof of receipt, (b) mailed by registered or certified mail (postage
prepaid, return receipt requested) to the Parties at the addresses specified
below:

 

  If to Seller, to:

Fotech Solutions Ltd

Unit 1, Blue Prior Business Park,

Redfields Lane,

Church Crookham, GU52 0RJ

United Kingdom

 

Attn: CEO

        If to Purchaser, to:

Eco-Stim Energy Solutions, Inc.

2930 W. Sam Houston Pkwy N. Suite 275

Houston Texas

USA 77043

 

Attn: President

 

IN WITNESS WHEREOF, THIS AGREEMENT IS EXECUTED BY THE PARTIES;

 

For Seller:   For: Purchaser:           By: /s/ Chris Shannon   By: /s/ J. Chris
Boswell Name: Chris Shannon   Name: By: J. Chris Boswell Title: CEO   Title:
Title: President and CEO   Fotech Oil & Gas Solutions Limited     Eco-Stim
Energy Solutions, Inc.           Date     Date  

 

9

 

 

Exhibit 10.4 

 

Fotech / Eco-Stim

April 30, 2014

 

SCHEDULE 1

 

LIST OF CURRENT OPERATORS IN TERRITORY

 

1) Baker Hughes Inc.

 

2) BP

 

3) Chevron Corp.

 

4) FMC Technologies

 

5) Inversion Technologies Inc.

 

6) Petrospec Engineering

 

7) Weatherford (BP only)

 

S-1 - 1

 

 

Exhibit 10.4 

 

Fotech / Eco-Stim

April 30, 2014

 

SCHEDULE 2

 

Purchase Order

 

[image_001.jpg] 

 

S-2 - 1

 

  

Exhibit 10.4 

 Fotech / Eco-Stim

April 30, 2014

 

SCHEDULE 3

 

Standard Pricing for 2014

 

Equipment Purchase Options Purchase Overview Description USD Helios HSI unit HSi
(40km max) > High performance DAS unit. $250,000 Redundancy Options Data Storage
3TB External     $435 High Speed Data Logger High-speed (real time) logging
capability for full fibre length Purchase $18,060 Additional Hardware Apollo DPU
Data processing unit Computer with custom analysis code used for the processing
of logged data. Purchase $39,600 Spares 5 year Helios spares module, per unit.

> Optics Chassis spares: rear fans, front fans, keyswitch, PSU, fan controller,
micro controller battery, fan filters.

 

> Compute Chassis spares: GPU card, disk drives, front fans, rear fans, Power
supply.

$29,205 Rental (HSI) 1 week

Helios HS unit rental only. Price does not include the cost of other equipment.

 

POA for non-Helios items

$8,250 Short-term lease (rate is pcm) $29,500 Long-term lease (12 months rate is
PCM) $20,625 Installation and Support Labour Senior Engineer In-use $1,850
Stand-by $1,030 Junior Engineer In-use $1,550 Stand-by $1,030 Data Structuring &
Report Generation [Price is a guide only] $15,675 Data Analysis [Price is a
guide only] $12,790 T&S Cost of travel to client location (e.g initial flights,
ferry or train costs) Estimated cost based on fully flexible return flight from
UK $4,950 T&S Tier 1 (as defined below) T&S includes hotel, car, food, for costs
incurred whilst on site or travelling to site. Does not include cost of travel
to client location (e.g initial flights, ferry or train costs) $330 T&S Tier 2
(as defined below) $455 Field Installation Equipment Field Kit rental (per day)
Kit includes splicing equipment, OSA, Oscilloscope, Spectrum Analyser, hand
tools $327

 

Country Ratings:   Tier 1 Countries UK, Europe, USA & Canada Tier 2 Countries
Rest of World

 

S-3 - 1