Exhibit
10.19


 


Exclusive Sales Agreement


 


This Exclusive Sales Agreement (“Agreement”)
is made on this 31st day of August, 2009, between Power Hydraulics LLC, located at 1632 Broad Street,
Lake Charles, LA 70601, United States, “Power Hydraulics”) and Tianjin New Highland Science and Technology
Development Company, Ltd (“Tianjin New Highland”), located at No. 86 ATNHe Road, DaGang, TianJin 300270,
China, People’s Republic of China.


 


Whereas, Power Hydraulics has certain rights
to patents (US Patent Numbers 5,413,184,
5,853,056 and 6,125,949) and is the owner or licensee of certain lateral
hydraulic jet drilling technology and
is the manufacturer of relevant equipments developed for usage with said
patents and protected intellectual technology.


 


Whereas, Tianjin New Highland desires to obtain an exclusive authorization
to purchase and use lateral hydraulic jet drilling equipment
manufactured by Power Hydraulics within the territory of the People’s Republic
of China


 


Whereas, the parties wish to enter into this
exclusive sale agreement within the territory of the People’s Republic of
China.


 


Now, therefore, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and
agreed to, both parties hereto agree to the following terms and conditions:


 


I.         Definition.


 


The definition of “Exclusive Sale” or “Exclusive
Purchase’ shall mean for purposes hereof that Tianjin New Highland shall be the
only party which can purchase or use any of Power Hydraulics’ radial jetting
products (“Power Hydraulics’ Products”) from
Power Hydraulics within the territory of the People’s Republic of Chinn


 


II.        Appointment and Territories.


 


1.         Power Hydraulics hereby authorizes Tianjin New Highland to purchase, and Tianjin New Highland agrees to
be the exclusive purchaser of Power Hydraulics Products within the territory of
the People’s Republic of China Tianjin New Highland has agreed to exclusively
purchase radial jetting products from Power Hydraulics.


 


2.         Tianjin New Highland’s right of exclusive purchase shall remain in
force permanently after the date of this Agreement, unless terminated by one of the Parties, in which case the
Party who declares termination must inform the other Party by written notice at
least three (3) months prior to formal termination


 


III.       Products.  Tianjin New
Highland shall purchase Power Hydraulics Products under written purchase orders or manufacturing agreements (hereafter
referred to as “Purchase Documents”), in which description(s), specification(s), package(s) and quantities
are shown Tianjin New Highland’s Purchase Document shall be in writing and
signed by authorized personnel and may be sent to Power Hydraulics by facsimile or e-mail Power Hydraulics 


 

















 


shall confirm
receipt, agree to the specification and terms, and notify Tianjin New Highland
after receiving Tianjin New Highland’s
Purchase Documents that Power Hydraulics accepts the  Purchase Documents. 
No manufacture or shipments
or goods by Power Hydraulics shall be made until Power Hydraulics has confirmed
Purchase Documents covering said manufacture or shipment.


 


IV.      Price.  The
price of all products, services and training will be mutually agreed upon
between Power Hydraulics and Tianjin New Highland prior to the signing or
acceptance of any purchase Documents.


 


V.        Delivery Time, Port of
Loading and Port of
Destination.   The delivery time to the port, the port of loading and the port of destination will be mutually agreed upon m a
purchase order or manufacturing contract. 
Unless otherwise stated in purchase documents, Power Hydraulics Products
are FOB Lake Charles.


 


VI.      Payment Terms.  The payment
terms will be mutually agreed upon in a written purchase docurrient.


 


VII.     Power Hydraulics’ Rights and Obligations.


 


1.         Power Hydraulics has the right to demand that Tianjin New Highland
make payments in accordance with Purchase Documents, and if payment is not
received within thirty (90) days of an agreed upon payment schedule, Power
Hydraulics, at its sole discretion, may declare Tianjin New Highland in default and terminate this Purchase
Document, upon written notice.


 


2.         Power Hydraulics shall guarantee that the quality of Power Hydraulics
Products meets the mutually agreed upon specifications (“Good Quality”)
detailed in a purchase document, and shall provide Tianjin New Highland with
products according to the mutually agreed upon times and quantities specified
in the purchase document submitted by Tianjin New Highland to, and accepted by,
Power Hydraulics.


 


3.         Power Hydraulics shall provide Tianjin New Highland timely technical
support that goes with the Power Hydraulics Products according to the Purchase
Documents and manufacturer’s warranty.


 


VIII.    Tianjin New Highland’s Rights and Obligations.


 


1.         Tianjin New Highland is the exclusive purchaser and shall have the
exclusive rights in the People’s Republic of China for the purchase and use of
Power Hydraulics Products.


 


2.         Tianjin New Highland has the right to request Power Hydraulics to
provide Power Hydraulics Products in a timely
manner in sufficient quantities and of Good Quality and timely technical
support for the Power Hydraulics Products in a manner generally accepted
in the industry.


 


3.         Tianjin New Highland has a right, before payment or acceptance, to
inspect product, shipped by Power Hydraulics at any reasonable place and time
and in any reasonable manner.  When Power
Hydraulics is required or authorized to send the products to 


 


2

















 


Tianjin New Highland, the
inspection may be after their arrival.  Expenses of inspection may be borne by
Tianjin New Highland but shall
be recovered from Power Hydraulics if the
goods do not conform to the Purchase Documents and are rejected.


 


4.         If the
goods or the tender of delivery by Power Hydraulics fail in any material
respect  to conform to the Purchase
Documents, Tianjin New Highland may


 


(a)      reject the whole; or


 


(b)      accept the whole, or


 


(c)      accept any commercial unit or units and reject the rest


 


5.         Tianjin New Highland is solely responsible for providing the fully detailed requirements for China-specific specifications to
Power Hydraulic Products so products shall comply with the import laws of the
People’s Republic of China, however, in the event of refusal of entry into the
People’s Republic of China and/or required re-export of Power Hydraulics
products subject to this agreement, due to non-compliance on the part of Power
Hydraulics with the specifications provided to them by Tianjin New Highland
causing customs or other relevant agencies of the People’s Republic of China
prevent entry, Power Hydraulics shall arrange for and pay for the said
re-export.  Power Hydraulics shall also
compensate Tianjin New Highland for any ordinary and reasonable costs or fees associated with such non-compliance incurred
by Tianjin New Highland, including any consequential damages suffered by
Tianjin New Highland due to its inability to use the Power Hydraulics Products
within the known operating limitations. 
In any case, the total compensation shall not to exceed $100,000.00 per
purchase document.


 


6.         Tianjin New Highland shall make payment to Power Hydraulics according to every purchase document and
fulfill its obligations under this Agreement.


 


IX.      Default


 


Any material breach
by either Party shall he regarded as a default. 
The breaching Party may be responsible for all ordinary or reasonable
damages and loses arising from its default.


 


X.        Governing Law
and Dispute Resolution


 


All terms and
conditions of this Agreement shall be governed by the laws of the State of
Louisiana, the United States of America. 
Any dispute arising from or in connection with this Agreement shall be
settled by arbitration in Lake Charles, Louisiana or any other mutually agreed
upon location or jurisdiction.  The
arbitration shall be final and binding on the Parties.


 


Each Party to the
admiration shall cooperate with each other Party to the arbitration in making
full disclosure of and providing complete access to all information and
documents requested by such other Party in connection with such arbitral
proceedings, subject only to any confidentiality obligations binding on such
Party.  During the course of the arbitral
panel’s adjudication of the Dispute, this Agreement shall continue to be
performed except with respect to the part in dispute and under adjudication.


 


3

















 


XI.      Language and Explanation of the Agreement


 


This
Agreement shall be executed in English and translated into Chinese, but the
English version shall prevail over the Chinese version with regard to the interpretation
of this contract.


 


XII.     Other Terms


 


1.         Each
Party agrees not to disclose any Confidential Information of the other Party
and to maintain such Confidential Information in strictest confidence, to take
all reasonable precautions to prevent its unauthorized dissemination and to
refrain from sharing any or all of the information with any third party for any
reason whatsoever except as required by court order, both during and after the
termination of this Agreement.  Without
limiting the scope of this duty, each Party agrees to limit its internal
distribution of the Confidential Information of the other party only on a “need
to know” basis and solely in connection with the performance of this Agreement,
and to take steps to ensure that the dissemination is so limited.


 


2.         This
Agreement shall come into effect from the date that both parties sign.


 


3.         This
Agreement shall be in duplicate to be held by each Party.  Each copy shall have equal legal effect.


 


4

















 


The Parties hereto execute this Agreement as
of the date set forth above.


 


 


Power Hydraulics, LLC


 


 


	
  /s/Daniel J. Jacobson

  	
   

  
	
   

  	
   

  
	
  (Name of Authorized Signatory)

  	
   

  
	
   

  	
   

  
	
  Name: Daniel J.
  Jacobson

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Position:
  Director

  	
   

  



 


5

















 


Tianjin New Highland Science and Technology Development Company, Limited


 


 


	
  /s/ Guoqiang Xin

  	
   

  
	
   

  	
   

  
	
  (Name of Authorized Signatory)

  	
   

  
	
   

  	
   

  
	
  Name: Guoqiang Xin

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Position: CEO

  	
   

  



 


6