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    HEMIWEDGE
      INTELLECTUAL PROPERTY AGREEMENT 

     

    This
      HEMIWEDGE INTELLECTUAL PROPERTY AGREEMENT (this “Agreement”) effective as of
      October 14, 2008 (the “Effective Date”), is entered into by and between
Tejas
      Research & Engineering, L.P., a
      Texas
      limited partnership (“TRANSFEREE”), and Hemiwedge Valve Corporation, a Texas
      corporation (“TRANSFEROR”).

     

    RECITALS

     

    
      	
            	A.	
              TRANSFEROR
                has developed and is continuing to develop certain technology and
                intellectual property relating to hemispherical wedge valves and
                specialty
                valves;

            


    

     

    
      	
            	B.	
              TRANSFEREE
                desires to acquire a license in and to such technology and intellectual
                property related to hemispherical wedge valves for designated fields
                of
                use and an assignment of two pending U.S. patent applications related
                to
                specialty valves in exchange for, among other things, a one-time
                cash
                payment.

            


    

     

    In
      consideration of the mutual promises and conditions set forth below and for
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the parties agree as follows:

     

    ARTICLE
      1

     

    DEFINITIONS
      

     

    Section
      1.1  Definitions.
      The
      following definitions shall be applicable to the terms set forth below as used
      in this Agreement, in addition to those terms defined in the preamble
      hereto:

     

    “5,000
      PSI and Surface Safety Valves Field of Use”
      means
      any and all (i) applications for hydrocarbon or oilfield production, injection,
      vent, high pressure drop controllers, blow down, and dump - whether any of
      the
      foregoing is on land, offshore, or subsurface - that are intended for situations
      where the product or service is to be rated for 5,000 psi or greater and (ii)
      surface safety valve applications for a hydrocarbon, oilfield, or geothermal
      well regardless of pressure rating, specifically including all applications
      (whether or not monogrammed) under API Specification 6A, 6B, 6AV1, 11iW and
      11V1. Notwithstanding the foregoing, this field of use does not include valve
      applications for (w) nuclear plants, (x) valves in or under American National
      Standards Institute rating 2500 class, (y) API Specification 6D, and (z)
      standard onshore pipeline valves. 

     

    “Acceptable
      Level of Quality”
      shall
      have the meaning ascribed to the term in Section 2.5(a).

     

    “Agreement”
      shall
      have the meaning ascribed to the term in the preamble.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “API
      Specification” means
      those specifications published by the American Petroleum Institute from time
      to
      time.

     

    “Assigned
      Deliverables”
      shall
      mean all tangible embodiments, in whatever form or medium, related to the
      Hemiwedge Products associated with the Assigned Hemiwedge Intellectual Property,
      including all prototypes, works in progress, data, components, engineering
      plans, algorithms, drawings, calculations, formulas, and programming for
      machining, and specifically including all tools and related components that
      have
      been made or designed for a down hole isolation valve. 

     

    “Assigned
      Hemiwedge Intellectual Property”
      means
      the Hemiwedge Intellectual Property identified on Schedule
      B,
      including reissues, divisions, continuation, continuations-in-part, extensions
      and reexaminations thereof, and including any other patents and patent
      applications, foreign or domestic, claiming priority to any of the foregoing,
      and all rights therein provided by international treaties and
      conventions.

     

    “Combined
      Fields of Use” means
      the
      5,000 PSI and Surface Safety Valves Field of Use, the Down Hole Field of Use,
      the Drilling and Workover Field of Use, and the Offshore and Subsea Field of
      Use.

     

    “Confidential
      Information”
      shall
      have the meaning given to the term in Section 8.1 of this
      Agreement.

     

    “Down
      Hole Field of Use” means
      any
      and all down hole (i.e.,
      below
      the
      surface) applications for hydrocarbon, oilfield, or geothermal applications,
      including (i) completion of a hydrocarbon, oilfield, steam, water or other
      wells, (ii) drilling applications, (iii) production and monitoring applications,
      and (iv) all applications (whether or not monogrammed) under API Specification
      11D1, 11iW, 11V1, 14A, and 14L. 

     

    “Drilling
      and Workover Field of Use” means
      any
      and all applications for the drilling or workover of hydrocarbon, oilfield,
      steam, water or other wells, including oil and gas drilling, whether the
      drilling or workover is (a) at the surface, down hole, or subsea, or (b) on
      a
      drilling, workover or other rig. This field of use specifically includes, but
      is
      not limited to use in or with (i) down hole isolation valves, (ii) marine riser
      isolation valves, (iii) blow out preventors, (iv) choke manifolds, (v) other
      pressure control devices, and (vi) all applications (whether or not monogrammed)
      under API Specification 7K, 8A, 8C, 16A, 16C, 16D and 16RCD.

     

    “Effective
      Date”
      shall
      have the meaning ascribed to the term in the preamble.

     

    “Encumbrance”
      means
      any lien, mortgage, pledge, assignment, security interest, charge or encumbrance
      of any kind (including any agreement to give any of the foregoing, any
      conditional sale or other title retention agreement, and any lease in the nature
      thereof) and any option, trust or other preferential arrangement having the
      practical effect of any of the foregoing.

     

    “Forfeited
      Rights” shall
      have the meaning ascribed to the term in Section 7.1(c).

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Governmental
      Authority”
      means
      any federal, state, municipal, national or other government, governmental
      department, commission, board, bureau, court, agency or instrumentality or
      political subdivision thereof or any entity or officer exercising executive,
      legislative, judicial, regulatory or administrative functions of or pertaining
      to any government or any court, in each case whether associated with a state
      of
      the United States, the United States, or a foreign entity or
      government.

     

    “Hemiwedge
      Cartridge Valves”
means
      valves incorporating a hemispherical wedge, core, driver, cartridge, seat,
      and
      stem.

     

    “Hemiwedge
      Intellectual Property” means
      any
      and all Intellectual Property relating to the Hemiwedge Products, including
      the
      Licensed Hemiwedge Intellectual Property and the Assigned Hemiwedge Intellectual
      Property.

     

    “Hemiwedge
      Products” means
      (a)
valves
      incorporating a hemispherical wedge and specialty valves, including but not
      limited to those described in the Patents listed in Schedule
      A
      and
Schedule
      B,
      and all
      equipment and processes associated therewith, including down hole isolation
      valves (including hydraulic
      and mechanical down
      hole
      isolation valves
      that
      have been or will be designed by or for TRANSFEROR,
      and all
      related components, actuation devices, and running tools that have been or
      will
      be designed relating to down hole isolation valves)
      and
      subsea valves (and any chemical injection valves, tools, and actuation devices
      associated therewith that have been or will be designed by or for TRANSFEROR)
      and any and all Improvements to any of the foregoing and (b) all Technology
      relating to the foregoing. 

     

    “Hemiwedge
      Trademark”
      means
      the word mark “HEMIWEDGE”, including the goodwill of a business symbolized
      thereby or associated therewith, common law rights thereto, and registrations
      and applications for registrations thereof throughout the world, including
      United States Trademark Registration Number 1983828, filed April 27, 1995,
      for
      the word mark “HEMIWEDGE”.

     

    “Improvements”
      means
any
      and
      all improvements, developments, additions, changes,
      and modifications as may be from time to time made or acquired during the term
      of this Agreement by or for TRANSFEROR or its affiliates, consultants,
      sublicensees or assignees, whether or not the foregoing is or would be (a)
      patentable, (b) covered by the Hemiwedge Intellectual Property existing as
      of
      the Effective Date, or (c) in competition with any other Hemiwedge Product,
      provided,
      however,
      this
      does not include improvements of TRANSFEREE.

     

    “Intellectual
      Property” means
      all
      rights throughout the world in any and all of the following: (i) Patents, (ii)
      the Hemiwedge Trademark, (iii) copyrights, (iv) trade secrets, (v) software,
      (vi) rights of privacy, and (vii) any and all other intangible or intellectual
      property rights; all rights to sue and recover damages for past, present and
      future infringement, misappropriation, dilution, or other violation of any
      of
      the foregoing; and all licenses to any such intangible or intellectual property
      rights. This definition is intended to include, but not be limited by, the
      definition of intellectual property contained in 11 U.S.C. §101(35A) of the
      United States Bankruptcy Code.

     

    “Law”
      means
      all constitutions, treaties, statutes, laws, ordinances, regulations, rules
      or
      Orders associated with any Governmental Authority.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Licensed
      Deliverables”
      shall
      mean an original or at least one complete copy of all tangible embodiments,
      in
      whatever form or medium, related to the Hemiwedge Products associated with
      the
      Licensed Hemiwedge Intellectual Property as same is applicable to one or more
      of
      the Combined Fields of Use, including prototypes, works in progress, data,
      components, engineering plans, algorithms, drawings, calculations, formulas,
      and
      programming for machining, and further including and all chemical injection
      valves, tools, and actuation devices related to subsea valves. 

     

    “Licensed
      Hemiwedge Intellectual Property”
      means
      all Hemiwedge Intellectual Property, including that identified in Schedule
      A,
      including reissues, divisions, continuation, continuations-in-part, extensions
      and reexaminations thereof, and including any other patents and patent
      applications and trademark applications or registrations, foreign or domestic,
      claiming priority to any of the foregoing, and all rights therein provided
      by
      international treaties and conventions; not
      including, however,
      the
      Assigned Hemiwedge Intellectual Property.

     

    “Offshore
      and Subsea Field of Use” means
      any
      and all applications for drilling, completion, production, monitoring, or
      controlling offshore (including inland waters) or subsea (regardless of water
      depth) wells, including any application (i) offshore, (ii) subsea, or (iii)
      on
      any offshore platform or floating production vessel. This field of use includes
      (a) any and all uses of any subsea valve, (b) any and all applications (whether
      or not monogrammed) under API Specification 17D, 17E and 17F, and (c) all
      applications on platforms, floating production units, and other offshore
      production units under API Specification 6A. 

     

    “Order”
      means
      any order, writ, rule, judgment, injunction, decree, stipulation, determination
      or award entered by or with any Governmental Authority.

     

    “Patents”
      means
      United States and foreign patents, patent applications and statutory invention
      registrations, including reissues, divisions, continuation,
      continuations-in-part, extensions and reexaminations thereof, and all rights
      therein provided by international treaties and conventions.

     

    “Permitted
      Encumbrance”
      means
      the Encumbrance on the Licensed Hemiwedge Intellectual Property and the Licensed
      Deliverables resulting from that certain Amended and Restated Security Agreement
      dated September 30, 2008, among TRANSFEROR, Shumate Industries, Inc, a Delaware
      corporation, Shumate Machine Works, Inc., a Texas corporation, and Stillwater
      National Bank and Trust Company, a national banking association. For clarity,
      the Permitted Encumbrance does not include any Encumbrance on the Assigned
      Hemiwedge Intellectual Property or the Assigned Deliverables.

     

    “Technology”
      means
      know-how and other confidential or proprietary technical, business and other
      information, whether tangible or intangible, including manufacturing and
      production processes and techniques, research and development information,
      drawings (electronic and other), specifications, designs, plans, proposals,
      prototypes, works in progress, technical data, financial, marketing and business
      data, pricing and cost information, business and marketing plans, software,
      customer and supplier lists and information, and databases and any and all
      Improvements thereto.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Transfer
      Agreement”
      shall
      have the meaning ascribed to the term in Section 2.6.

     

    “TRANSFEREE”
      shall
      have the meaning ascribed to the term in the preamble.

     

    “TRANSFEROR”
      shall
      have the meaning ascribed to the term in the preamble.

     

    Section
      1.2  Interpretation.
      

     

    (a)  Any
      reference herein to a party shall include such party’s successors and permitted
      assigns.

     

    (b)  The
      headings and captions contained in this Agreement are for reference purposes
      only and shall not affect in any way the meaning or interpretation of this
      Agreement.

     

    (c)  Wherever
      the context requires, the gender of all words used in this Agreement includes
      the masculine, feminine and neuter. Terms defined in the singular have the
      corresponding meanings in the plural, and vice versa. All references to Articles
      and Sections refer to articles and sections of this Agreement and all references
      to Schedules refer to Schedules to this Agreement, which Schedules are attached
      hereto and made a part hereof for all purposes. The word “includes” or
“including” means “including, but not limited to.” The word “or” will have the
      inclusive meaning represented by the phrase “and/or.” The words “hereof,”
“hereby,” “herein,” “hereunder” and similar terms in this Agreement shall refer
      to this Agreement as a whole and not any particular section or article in which
      such words appear. “Shall” and “will” have equal force and effect. Any reference
      to a statute, regulation or Law shall include any amendment thereof or any
      successor thereto and any rules and regulations promulgated thereunder. Currency
      amounts referenced herein, unless otherwise specified, are in United States
      Dollars. Whenever this Agreement refers to a number of days, such number shall
      refer to calendar days unless business days are specified.

     

    ARTICLE
      2

     

    INTELLECTUAL
      PROPERTY GRANTS; DISCLOSURE AND DELIVERABLES; QUALITY CONTROL


     

    Section
      2.1  License
      of the Licensed Hemiwedge Intellectual Property.
      In
      exchange for the Consideration (provided in Section 2.6), TRANSFEROR hereby
      grants to TRANSFEREE under the Licensed Hemiwedge Intellectual Property an
      exclusive (except as provided in Section 2.4), worldwide, perpetual, fully
      paid
      up, irrevocable, and sublicensable license and right to make, use, sell, offer
      for sale, rent, offer for rent, modify, reproduce, repair, service or otherwise
      commercialize or develop Hemiwedge Products for any and all of the Combined
      Fields of Use.
      For
      clarification, TRANSFEROR reserves the right to use or license others to use
      the
      Hemiwedge Trademark in connection with any and all activities not within the
      Combined Fields of Use. 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Section
      2.2  Assignment
      of the Assigned Hemiwedge Intellectual Property. TRANSFEROR
      hereby irrevocably grants, assigns, and transfers to TRANSFEREE all of
      TRANSFEROR’s right, title, and interest in and to the Assigned Hemiwedge
      Intellectual Property and Technology related thereto, including all income,
      royalties, damages, and payments now or hereafter due or payable with respect
      thereto, and to all causes of action and the right to sue, counterclaim, and
      recover for past, present, and future infringement of the rights assigned under
      this Assignment. TRANSFEROR shall take all reasonable actions and sign
      documents, and cause its employees and consultants to take all reasonable
      actions and sign documents, to evidence and/or further this assignment,
      including the short form assignment, a form of which is included as Schedule
      C.
      

     

    Section
      2.3  Deliverables
      and Disclosure. 

     

    (a)  Deliverables.
      TRANSFEROR hereby sells, transfers, assigns, conveys and delivers to TRANSFEREE
      all of TRANSFEROR’S right, title and interest in and to the Assigned
      Deliverables and the Licensed Deliverables. Concurrently with the execution
      of
      this Agreement, or at a time(s) or place(s) determined by TRANSFEREE, TRANSFEROR
      will deliver to TRANSFEREE, in a manner and form as requested by TRANSFEREE,
      (1)
      all Licensed Deliverables necessary for TRANSFEREE to exercise fully its license
      under Section 2.1 of this Agreement, and (2) all Assigned Deliverables.
      Thereafter, and as soon as reasonably practicable, TRANSFEROR will deliver
      to
      TRANSFEREE all Licensed Deliverables and Assigned Deliverables regarding
      Improvements for TRANSFEREE to exercise fully its license under Section 2.1
      of
      this Agreement and its assignment under Section 2.2 of this
      Agreement.

     

    (b)  Disclosure.
      Concurrently with the execution of this Agreement, or at a time(s) or place(s)
      determined by TRANSFEREE, TRANSFEROR shall disclose to TRANSFEREE all the
      Technology related to the Hemiwedge Products to the extent necessary for
      TRANSFEREE to exercise fully its license under Section 2.1 of this Agreement
      and
      its assignment under Section 2.2 of this Agreement. Thereafter, and as soon
      as
      reasonably practicable, TRANSFEROR shall disclose to TRANSFEREE all Technology
      regarding Improvements to the extent necessary for TRANSFEREE to exercise fully
      its license under Section 2.1 and its assignment under Section 2.2 of this
      Agreement.

     

    Section
      2.4  TRANSFEREE’S
      Grantback Licenses. 

     

    (a)  License
      for Hemiwedge Cartridge Valves.
      TRANSFEREE grants to TRANSFEROR under the Licensed Hemiwedge Intellectual
      Property the non-exclusive, royalty-free, and sublicenseable right to make,
      use,
      sell, offer for sale, rent, offer for rent, modify, reproduce, or otherwise
      commercialize or develop Hemiwedge Cartridge Valves (i) for a production
      manifold above water on a production platform or vessel in Canadian waters
      only,
      and (ii) in connection with offshore platforms and other floating production
      vessels with TRANSFEROR’s ANSI class and API Specification 6D product
      line.

     

    (b)  License
      for Sale of Mud Diverter Valves.
      TRANSFEREE grants to TRANSFEROR under the Licensed Hemiwedge Intellectual
      Property the non-exclusive, royalty-free, and sublicenseable right to make,
      use,
      sell, offer for sale, rent, or offer for rent Hemiwedge Products consisting
      of
      above-ground mud diverter valves within ANSI class product specifications for
      a
      period of eighteen (18) months from the Effective Date; provided,
      however,
      that
      the parties shall share equally the profits (defined as net revenue minus cost
      of goods sold and sales commissions) from all TRANSFEROR’s sales or rentals of
      such mud diverter valves to any third party other than Black Gold Rental Tools,
      Inc., of Corpus Christi, Texas (“Black Gold”). For clarity, TRANSFEROR shall
      have the rights to all profits from sales or rentals of such mud diverter valves
      to Black Gold.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (c)  License
      of Specialty Valves Outside the Combined Fields of Use.
      TRANSFEREE grants to TRANSFEROR under the Assigned Hemiwedge Intellectual
      Property the non-exclusive, royalty-free, and sublicenseable right to make,
      use,
      sell, offer for sale, rent, offer for rent, modify, reproduce, or otherwise
      commercialize or develop Hemiwedge Products for any and all uses outside of
      any
      and all of the Combined Fields of Use.

     

    Section
      2.5  Quality
      Control Regarding the Hemiwedge Trademark. 

     

    (a)  TRANSFEROR
      recognizes and acknowledges that TRANSFEREE offers quality goods and services,
      and TRANSFEREE agrees that it will maintain or exceed such quality in the future
      in connection with its use of the Hemiwedge Trademark pursuant to this
      Agreement. Consistent therewith, TRANSFEROR acknowledges that if TRANSFEREE
      makes products that meet or exceed the level of quality of its other goods
      when
      it makes the Hemiwedge Products to be offered in connection with the Hemiwedge
      Trademark, TRANSFEROR will deem such products to be of an acceptable level
      of
      quality (hereinafter “Acceptable Level of Quality”). TRANSFEREE may make changes
      to the Hemiwedge Products to be offered in connection with the Hemiwedge
      Trademark in accordance with this provision so long as any changes meet or
      exceed the Acceptable Level of Quality. Any and all rights in the Hemiwedge
      Trademark arising from TRANSFEREE’s exercise of its rights hereunder shall inure
      to TRANSFEROR’s benefit.

     

    (b)  Upon
      receiving a request from TRANSFEROR, such requests not to exceed once per year,
      with reasonable notice, but not less than sixty (60) days, TRANSFEREE shall
      provide a sample of the Hemiwedge Products to be offered in connection with
      the
      Hemiwedge Trademark or permit TRANSFEROR to inspect and review at the business
      location of the TRANSFEREE during normal business hours a reasonable sample
      of
      proposed uses of the Hemiwedge Trademark for the purposes of assuring the
      Acceptable Level of Quality and proper use of the Hemiwedge Trademark.
      TRANSFEREE and TRANSFEROR agree to work in good faith with each other to correct
      or remedy uses of the Hemiwedge Trademark that may, for some reason, not meet
      the Acceptable Level of Quality set by the TRANSFEROR as defined in this
      provision; and, if the parties cannot reach an agreement, the parties agree
      to
      work in good faith with each other to discontinue TRANSFEREE’s use of the
      Hemiwedge Trademark until an agreement can be reached. 

     

    Section
      2.6  Consideration.
      The
      parties acknowledge that each party is providing good and valuable
      consideration, including the consideration set forth in the that certain
      Agreement dated as of October 14, 2008, among Shumate Industries, Inc., a
      Delaware corporation, TRANSFEROR, and TRANSFEREE (“the Transfer Agreement”), and
      other consideration specified herein. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      3

     

    ASSIGNABILITY

     

    Section
      3.1  Transferee.
      TRANSFEREE may, freely and without approval from TRANSFEROR, assign, transfer,
      or otherwise convey its rights or delegate its obligations hereunder, all
      without accounting to TRANSFEROR. 

     

    Section
      3.2  Transferor.
      TRANSFEROR may, freely and without approval from TRANSFEREE, assign, transfer,
      or otherwise convey its rights or delegate its obligations hereunder,
provided,
      however, that
      TRANSFEROR shall immediately give notice of such conveyance to
      TRANSFEREE.

     

    Section
      3.3  No
      Release.
      No
      assignment by TRANSFEREE or TRANSFEROR of its rights or obligations that is
      permitted under this Article 3 shall operate to release, discharge or otherwise
      affect the rights and obligations of any other party who is not so assigning
      its
      rights or obligations or the rights or obligations of the assigning party which
      are not so assigned.

     

    ARTICLE
      4

     

    TERM
      AND TERMINATION;
      SURVIVAL

     

    Section
      4.1  Term.
      This
      Agreement is effective as of the Effective Date and shall extend until the
      last
      of the Licensed or Assigned Hemiwedge Intellectual Property expires or is
      terminated, unless otherwise terminated pursuant to Section 4.2.

     

    Section
      4.2  Termination.
      This
      Agreement may be terminated upon the occurrence of any of the following
      events:

     

    (a)  the
      TRANSFEREE unilaterally giving TRANSFEROR thirty (30) days written notice,
      provided,
      however,
      that
      TRANSFEROR’s grantback rights provided by Section 2.4(c) shall survive such
      termination; or 

     

    (b)  
      both
      parties giving mutual written agreement;

     

    Section
      4.3  Survivability.
      The
      parties’ rights and obligations under Articles 5, 6, 7, 8, 9, 10, and 11 shall
      survive termination or expiration of this Agreement.

     

    ARTICLE
      5

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Section
      5.1  Representations
      and Warranties of Transferor.

     

    (a)  TRANSFEROR
      has the full right, power, and authority to enter into this Agreement and
      perform this Agreement in accordance with its terms.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (b)  This
      Agreement has been duly authorized, executed and delivered by TRANSFEROR and
      constitutes the legal, valid and binding obligation of TRANSFEROR, enforceable
      against TRANSFEROR in accordance with its terms.

     

    (c)  TRANSFEROR’S
      entry into this Agreement and performance of its obligations hereunder does
      not
      (i) violate or contravene any Law, Order, license, consent or other
      authorization from any Governmental Authority applicable to TRANSFEROR or to
      the
      Hemiwedge Products or Hemiwedge Intellectual Property, (ii) conflict with
      TRANSFEROR’S organizational documents, (iii) conflict with, constitute a breach
      or default under any other agreement or instrument to which TRANSFEROR is a
      party or by which it is bound, or (iv) result in the creation or imposition
      of
      any Encumbrance on the Hemiwedge Products or Hemiwedge Intellectual Property
      as
      a result of any other agreement or instrument to which TRANSFEROR is a party
      or
      by which it is bound.

     

    (d)  TRANSFEROR
      represents that the Hemiwedge Intellectual Property is free and clear of any
      Encumbrances, except for the Permitted Encumbrance, and that TRANSFEROR (i)
      has
      all right, title and interest, except for the Permitted Encumbrance, in and
      to
      the Hemiwedge Intellectual Property, and the Technology and Deliverables
      associated therewith, (ii) has the right to license to TRANSFEREE the Licensed
      Hemiwedge Intellectual Property in the Combined Fields of Use, and (iii) has
      the
      right to assign the Assigned Hemiwedge Intellectual Property. 

     

    (e)  The
      Hemiwedge Intellectual Property is subsisting and, to TRANSFEROR’s knowledge, is
      valid and enforceable, and, to TRANSFEROR’s knowledge, use of the Hemiwedge
      Products does not infringe, misappropriate, or otherwise violate any third
      party
      Intellectual Property rights.

     

    (f)  No
      third
      party has filed or threatened to file any claim, lawsuit, charge, complaint,
      or
      other action alleging that the Hemiwedge Intellectual Property is invalid or
      unenforceable or that any of the Hemiwedge Products infringes any third party
      Intellectual Property rights.

     

    (g)  TRANSFEROR
      is not aware of any third party infringing, misappropriating, or otherwise
      violating the Hemiwedge Intellectual Property, and TRANSFEROR has not filed
      or
      threatened to file any claim, lawsuit, charge, complaint, or other action
      against any third party alleging that such third party is infringing,
      misappropriating, or otherwise violating the Hemiwedge Intellectual
      Property.

     

    (h)  The
      Hemiwedge Intellectual Property is all the Intellectual Property and Hemiwedge
      Products applicable to operating in the Combined Fields of Use.

     

    (i)  None
      of
      the Hemiwedge Intellectual Property is subject to any maintenance fees, taxes,
      or administrative actions falling due within ninety (90) days after the Closing
      Date.

     

    (j)  The
      rights granted to TRANSFEREE pursuant to this Agreement and the exercise by
      TRANSFEREE or its successors or assigns of any or all of same do not impose
      on
      TRANSFEREE any past due, current, or future obligations, including licenses,
      sublicenses, or payment of royalties, fees, or other payments to any third
      party, including Soderberg Research and Development, Inc., Inprop, Inc.,
      Jeannette Soderberg, At Balance Americas LLC, or Hunt Valve Company, Inc.,
      or
      any of their successors or assigns.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (k)  TRANSFEROR
      has been engaged in ongoing discussions with various prospective financiers,
      corporate and strategic partners, purchasers, and licensors with respect to
      the
      Hemiwedge Intellectual Property and Deliverables transferred herein, pursuant
      to
      which TRANSFEROR has sought to achieve the highest value and best price for
      the
      sale, assignment and/or license of same. Such Hemiwedge Intellectual Property
      and Deliverables were marketed for approximately six months. The offer made
      by
      TRANSFEREE represented the highest value and best price for such Hemiwedge
      Intellectual Property and Deliverables. The negotiation of the rights
      transferred herein to Tejas was conducted in good faith and on an arms’ length
      basis.

     

    Section
      5.2  Representations
      and Warranties of Transferee.

     

    (a)  TRANSFEREE
      has the full right, power, and authority to enter into this Agreement and
      perform this Agreement in accordance with its terms.

     

    (b)  This
      Agreement has been duly authorized, executed and delivered by TRANSFEREE and
      constitutes the legal, valid and binding obligation of TRANSFEREE, enforceable
      against TRANSFEREE in accordance with its terms.

     

    (c)  TRANSFEREE’s
      entry into this Agreement and performance of its obligations hereunder does
      not
      (i) violate or contravene any Law, Order, license, consent or other
      authorization from any Governmental Authority applicable to TRANSFEREE or (ii)
      conflict with TRANSFEREE’s organizational documents.

     

    ARTICLE
      6

     

    INDEMNIFICATION;
      DUTY TO DEFEND

     

    Section
      6.1  By
      TRANSFEROR.
      TRANSFEROR agrees to defend, indemnify and hold harmless TRANSFEREE, its
      sublicensees and its affiliates, successors and assigns, and the officers,
      directors, employees and agents of each of them, from and against any and all
      claims, threatened claims, damages, losses, expenses, obligations, liabilities,
      actions, suits, including without limitation, interest and penalties, reasonable
      attorneys’ fees and costs and all amounts paid in settlement of any claim,
      action or suit, asserted by third parties against TRANSFEREE that arise out
      of,
      result from or are related to: (i) the violation of any statute, regulation
      or
      rule of Law by TRANSFEROR in the performance of its obligations under this
      Agreement; (ii) a breach or alleged breach of any representation, covenant,
      or
      warranty made by TRANSFEROR in this Agreement; (iii) activities taking place
      at
      TRANSFEROR’s facilities and that do not involve TRANSFEREE; (iv) a breach or
      alleged breach by TRANSFEROR of any of the other terms or conditions of this
      Agreement, (v) TRANSFEREE’s exercise of the rights granted in Sections 2.1 and
      2.2 of this Agreement (provided
      that
      under
      this subsection 6.1(v), the parties shall share equally the first two hundred
      fifty thousand dollars ($250,000) of liability, after which TRANSFEROR shall
      pay
      for all liability hereunder up to one-million five-hundred thousand dollars
      ($1,500,000), and in no event shall TRANSFEROR incur liability for any amounts
      exceeding one million five hundred thousand dollars ($1,500,000) under this
      subsection 6.1(v)), or (vi) the negligence or other wrongdoing of TRANSFEROR
      or
      its affiliates or any employee or agent of TRANSFEROR or its affiliates.


     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Section
      6.2  By
      TRANSFEREE.
      TRANSFEREE agrees to defend, indemnify and hold harmless TRANSFEROR and its
      affiliates, successors and assigns, and the officers, directors, employees
      and
      agents of each of them, from and against any and all claims, threatened claims,
      damages, losses, expenses, obligations, liabilities, actions, suits, including
      without limitation, interest and penalties, reasonable attorneys’ fees and costs
      and all amounts paid in settlement of any claim, action or suit, asserted by
      third parties against TRANSFEROR that arise out of, result from or are related
      to: (i) the violation of any statute, regulation or rule of Law by TRANSFEREE
      in
      the performance of its obligations under this Agreement; (ii) a breach or
      alleged breach of any representation, covenant, or warranty made by TRANSFEREE
      in this Agreement; (iii) activities taking place at TRANSFEREE’s facilities and
      that do not involve TRANSFEROR; (iv) a breach or alleged breach by TRANSFEREE
      of
      any of the other terms or conditions of this Agreement, or (v) the negligence
      or
      other wrongdoing of TRANSFEREE or its affiliates or any employee or agent of
      TRANSFEREE or its affiliates. 

     

    Section
      6.3  Process.
      In each
      case for which a party seeks indemnification under the provisions of Sections
      6.1 or 6.2, the party claiming indemnification (“Indemnitee”) must promptly
      notify the party providing indemnification (“Indemnitor”) in writing of any such
      claim. The Indemnitor shall be permitted to fully control the defense and any
      settlement of the claim. However, Indemnitor shall not, without Indemnitee’s
      written consent, settle any such claim if the settlement arises from or is
      part
      of any criminal action, suit or proceeding or contains a stipulation to or
      admission or acknowledgment of any liability or wrongdoing (whether in contract,
      tort or otherwise) on the part of the Indemnitee’s or any of Indemnitee’s
      affiliates. Indemnitee shall cooperate fully in the defense of such claim and
      may appear at its own expense through counsel in matters for which Indemnitor
      has assumed the defense.

     

    Section
      6.4  NOTWITHSTANDING
      ANYTHING ELSE IN THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER
      FOR ANY PUNITIVE OR EXEMPLARY OR ADDITIONAL DAMAGES OR ANY INCIDENTAL OR
      CONSEQUENTIAL DAMAGES INCLUDING, WITHOUT LIMITATION, ANY LOST OPPORTUNITY,
      LOSS
      OF USE, LOSS OF RIGHTS FROM UNTIMELY COMPLETION, BUSINESS INTERRUPTION, LOST
      PRODUCTS OR LOST PROFITS, WHICH RESULT FROM ACTIVITIES ARISING UNDER
      THIS AGREEMENT. 

     

    ARTICLE
      7

     

    INTELLECTUAL
      PROPERTY PROSECUTION, MAINTENANCE, AND LITIGATION; OWNERSHIP OF IMPROVEMENTS
      

     

    Section
      7.1  Intellectual
      Property Prosecution and Maintenance.  

     

    (a)  TRANSFEREE
      shall have the right, in its own name and at its own expense, to prepare, file,
      prosecute, and maintain the Assigned Hemiwedge Intellectual
      Property.

     

    (b)  TRANSFEROR
      shall have the first right, in its own name and at its own expense, to prepare,
      file, prosecute, and maintain the Licensed Hemiwedge Intellectual Property.
      

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (c)  TRANSFEROR
      shall provide written notice as soon as possible to TRANSFEREE if TRANSFEROR
      decides not to prosecute, to abandon, not to pursue foreign rights claiming
      priority to earlier rights, or to otherwise cause or allow any of its rights
      in
      the Licensed Hemiwedge Intellectual Property to be forfeited (collectively
      “Forfeited Rights”), and in any event not less than thirty (30) days before any
      governmental, procedural, or administrative deadline bringing about or
      triggering such Forfeited Rights. If TRANSFEREE receives notice from TRANSFEROR
      of a decision to allow Forfeited Rights, or if TRANSFEREE is aware of a deadline
      less than thirty (30) days away that would result in Forfeited Rights,
      TRANSFEREE shall have the right, in its own name and at its own expense, to
      prepare, file, prosecute, and maintain any of the Licensed Hemiwedge
      Intellectual Property applicable to or usable in any of the Combined Fields
      of
      Use in which TRANSFEROR intends to allow Forfeited Rights or has failed to
      take
      action within thirty (30) days of a deadline that would result in Forfeited
      Rights. If TRANSFEREE prosecutes and maintains any of the licensed Hemiwedge
      Intellectual Property, TRANSFEREE shall grant to TRANSFEROR a royalty free
      license to use any patents rights not within the Combined Fields of
      Use.

     

    (d)  If
      TRANSFEREE exercises its rights under Section 7.1(c), TRANSFEROR shall: (i)
      take
      all necessary actions, sign documents, and generally assist TRANSFEREE in
      maintaining and/or obtaining the Licensed Hemiwedge Intellectual Property,
      and
      (ii) immediately assign and cause its employees and consultants to assign such
      Intellectual Property to TRANSFEREE, subject to any licenses relating to same.
      

     

    (e)  TRANSFEROR
      hereby irrevocably constitutes and appoints TRANSFEREE as its true and lawful
      attorney-in-fact with full power of substitution, in the name of TRANSFEROR
      or
      otherwise, and on behalf of and for the benefit of TRANSFEREE, to execute and
      deliver such further agreements, documents, certificates and other instruments
      of conveyance, assignment and transfer reasonably necessary to vest in
      TRANSFEREE all of TRANSFEROR’s right, title and interest in and to the Licensed
      Hemiwedge Intellectual Property described in the previous subsections; to
      institute and prosecute, in the name of TRANSFEROR or otherwise, all proceedings
      that TRANSFEREE may deem proper in order to assert or enforce any claim, right
      or title of any kind in and to such Licensed Hemiwedge Intellectual Property
      and
      the Hemiwedge Products; to defend and compromise any and all actions, suits
      or
      proceedings in respect of any part thereof; and to do all such acts and things
      in relation thereto as TRANSFEREE shall deem advisable. TRANSFEROR agrees that
      the foregoing powers are coupled with an interest and shall be irrevocable
      by
      TRANSFEROR or by its dissolution or in any manner or for any
      reason.

     

    Section
      7.2  Intellectual
      Property Litigation. TRANSFEREE
      shall have the right and sole discretion, in TRANSFEROR’s name (if required by
      Law, but otherwise in TRANSFEREE’s name) to sue third parties for past, present,
      and future infringement, misappropriation, or other violations of the Licensed
      Hemiwedge Intellectual Property in the Combined Fields of Use and TRANSFEROR
      shall fully and timely cooperate and assist TRANSFEREE in connection with any
      such suit or action. All damages, awards, and settlement recoveries shall belong
      to TRANSFEREE. In the event that TRANSFEREE cannot pursue, without TRANSFEROR,
      any desired action for violation of the Licensed Hemiwedge Intellectual
      Property, then TRANSFEROR agrees to be joined as a party to such action. In
      such
      an event, TRANSFEROR will pay for its costs, including its attorneys’ fees, and
      any recovery will be first used to pay TRANSFEROR’S and TRANSFEREE’S litigation
      costs and, to the extent funds remain, the parties will discuss and agree upon
      an allocation of the remaining funds between the parties based upon at least
      the
      following factors: each party’s level of involvement in the action, the field(s)
      of use of the third party violator, and the impact of any such action across
      the
      various fields of use. TRANSFEROR further shall fully and timely cooperate
      with
      TRANSFEREE in connection with any suit or action involving the Assigned
      Hemiwedge Intellectual Property. 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Section
      7.3  Notice
      of Infringement.
      TRANSFEROR shall give TRANSFEREE prompt written notice of any suspected
      infringement of the Hemiwedge Intellectual Property in any of the Combined
      Fields of Use that may come to TRANSFEROR’s attention. 

     

    Section
      7.4  Ownership
      of Intellectual Property for Improvements. 

     

    (a)  By
      Transferee.
      TRANSFEREE shall own any improvements, developments, additions, changes, and
      modifications, including Intellectual Property relating thereto, as may be
      from
      time to time made during the term of this Agreement by or for TRANSFEREE or
      its
      affiliates (excluding TRANSFEROR to the extent TRANSFEROR becomes an affiliate
      of TRANSFEREE), consultants, sublicensees or assignees. 

     

    (b)  By
      Transferee - Applicable Exclusively to One or More of the Combined Fields of
      Use.
      TRANSFEREE shall own any and all rights, including Intellectual Property,
      relating to Improvements to the Hemiwedge Technology or to the Hemiwedge
      Products to the extent such Improvements can be segregated exclusively to any
      one or more of the Combined Fields of Use. In this regard, TRANSFEROR, as soon
      as reasonably practicable, shall assign, and cause its employees and consultants
      to assign to TRANSFEREE such Intellectual Property and the related
      Improvements.

     

    (c)  By
      Transferor - Exclusively Outside the Combined Fields of Use.
      TRANSFEROR shall own any and all right, including Intellectual Property,
      relating to Improvements to the Hemiwedge Technology or the Hemiwedge Products
      to the extent such Improvements can be segregated to uses outside the Combined
      Fields of Use. 

     

    (d)  By
      Transferor - Applicable Both Inside and Outside the Combined Fields of
      Use.
      TRANSFEROR shall own any and all rights, including Intellectual Property,
      relating to Improvements to the Hemiwedge Technology or to the Hemiwedge
      Products to the extent such Improvements cannot be segregated exclusively to
      any
      one or more of the Combined Fields of Use or exclusively outside the Combined
      Fields of Use. TRANSFEROR, however, hereby grants to TRANSFEREE under such
      Intellectual Property an exclusive (in a manner consistent with Sections 2.1
      and
      2.4), worldwide, perpetual, fully paid up, irrevocable, and sublicensable
      license and right to make, use, sell, offer for sale, rent, offer for rent,
      modify, reproduce, repair, service or otherwise commercialize or develop such
      Improvements to the Hemiwedge Technology or to the Hemiwedge Products for any
      and all of the Combined Fields of Use.

     

    (e)  Assigned
      Intellectual Property.
      Notwithstanding any of the foregoing, TRANSFEREE shall own any and all rights,
      including Intellectual Property, relating to Improvements to the Hemiwedge
      Technology or to the Hemiwedge Products that relate to the Assigned Hemiwedge
      Intellectual Property.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      8

     

    CONFIDENTIALITY

     

    Section
      8.1  Confidential
      Information.
      Each
      party acknowledges that in performing this Agreement the party may be provided
      with and have access to another party’s confidential information, including,
      without limitation, technical information (such as software, algorithms,
      Technology, and trade secrets relating to Hemiwedge Products), processes,
      product plans and sales information, that the other party treats as proprietary,
      confidential or of substantial value and which value would be impaired if
      improperly used or disclosed to third parties (“Confidential
      Information”).
      The
      parties acknowledge that Confidential Information may include any of the
      foregoing which has been provided to or by another party prior to the Effective
      Date. 

     

    Section
      8.2  Treatment
      of Confidential Information.
      For a
      period of twenty (20) years from the Effective Date, each party shall maintain
      the other party’s Confidential Information in confidence and not disclose the
      other party’s Confidential Information to any person other than to its officers,
      fiduciaries, employees, agents or consultants who have a business need to know
      such Confidential Information, who have been informed of the confidential nature
      of such Confidential Information and who are, either by nature of their
      positions or duties or pursuant to written agreement, subject to substantially
      equivalent restrictions with respect to the use and disclosure of the
      Confidential Information as are set forth in this Agreement.

     

    Section
      8.3  Permitted
      Disclosures.
      The
      obligation of each party to maintain another party’s Confidential Information in
      confidence shall not apply to any Confidential Information (i) that becomes
      publicly available (other than by reason of a disclosure by a party in violation
      of this Agreement), (ii) was in the possession of the receiving party prior
      to
      the time it was disclosed hereunder, (iii) is independently made available
      as a
      matter of right to the receiving party by a third party, (iv) is independently
      developed by or for the receiving party, which independent development is
      supported by sufficient evidence, (v) the disclosure of which has been consented
      to by the other party in writing, or (vi) the disclosure of which is required
      by
      a court of competent jurisdiction or other governmental authority or otherwise
      as required by Law or regulation of a national securities exchange on which
      the
      securities of such party may then be listed.

     

    Section
      8.4  Notice
      of and Limits on Disclosure.
      Before
      any party discloses any of another party’s Confidential Information pursuant to
      Section 8.3(vi), such party shall as soon as practicable, and in any event
      prior
      to making any such disclosure, notify the other party of the specific
      Confidential Information proposed to be disclosed and of the court order,
      subpoena, interrogatories, government order or other reason that requires
      disclosure of the Confidential Information so that the other party may seek
      a
      protective order or other remedy to protect the confidentiality of the
      Confidential Information or waive compliance with the applicable provisions
      of
      this Article 8. Such party shall also consult with the other party on the
      advisability of taking steps to eliminate or narrow the requirement to disclose
      the Confidential Information and shall otherwise cooperate with the efforts
      of
      the other party to obtain a protective order or other remedy to protect the
      Confidential Information. If a protective order or other remedy cannot be
      obtained, such party may disclose only that Confidential Information that its
      counsel advises in writing (which writing shall also be addressed and delivered
      to the other party) is legally required to be disclosed.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    Section
      8.5  Notice
      of Other Uses of Confidential Information.
      Each
      party shall promptly inform the other party if it becomes aware of any reason,
      whether under Law, policy or otherwise, that it will, or might become compelled
      to, use the other party’s Confidential Information or disclose Confidential
      Information in violation of the confidentiality restrictions in this Article
      8
      other than as contemplated by Section 8.2.

     

    ARTICLE
      9

     

    GOVERNING
      LAW, JURISDICTION, AND DISPUTE RESOLUTION

     

    Section
      9.1  Governing
      Law and Jurisdiction.
      This
      Agreement is governed by and construed under the Laws of the State of Texas
      as
      applied to agreements among the residents of such state made and to be performed
      entirely within such state. To the fullest extent permitted by applicable Law
      and subject to the dispute resolution provisions of Section 9.2, the parties
      hereby agree that any claim, action or proceeding by any party hereto based
      on,
      arising out of or in connection with this Agreement must be brought only in
      the
      Federal or State Courts of the State of Texas located in Houston, Texas, unless
      said courts do not have subject matter jurisdiction, then in such other
      appropriate federal or state court located in the State of Texas, and not in
      any
      other state or federal court in the United States of America or any court in
      any
      other country. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A
      TRIAL
      BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT
      OR
      THE TRANSACTIONS CONTEMPLATED HEREBY. The parties acknowledge that in the event
      of any breach of this provision by any party, the other party will have no
      adequate remedy at Law and is entitled to injunctive relief to enforce the
      terms
      of this Section 9.1. 

     

    Section
      9.2  Dispute
      Resolution.

     

    (a)  The
      parties have entered into this Agreement in good faith and in the belief that
      it
      is mutually advantageous to them. It is with that same spirit of cooperation
      that they agree to attempt to resolve any dispute amicably without the necessity
      of litigation or arbitration. Accordingly, if a dispute arises between or among
      the parties relating to this Agreement (a “Dispute”), they will first refer the
      Dispute to the authorized officers of the parties to this Agreement prior to
      the
      commencement of arbitration proceedings or legal action.

     

    (b)  If
      the
      authorized officers of the parties are unable to reach agreement with respect
      to
      a Dispute within forty five (45) days after such Dispute is referred to them
      pursuant to paragraph (a) above, such Dispute shall be resolved by binding
      arbitration administered pursuant to American Arbitration Association rules
      then
      applicable for commercial disputes. Such arbitration shall be conducted by
      a
      single arbitrator, who shall be such individual as the parties may agree upon
      within thirty (30) days after a party serves notice requiring an arbitration
      of
      a Dispute. If the parties cannot agree upon an arbitrator within such thirty
      (30) day period, then a single arbitrator shall be selected by the American
      Arbitration Association. In any controversy subject to arbitration, the
      arbitrator may grant any relief, legal or equitable, interim or final, that
      may
      be granted by a court of competent jurisdiction. The decision of the arbitrator
      shall be final and binding and no appeal shall be made therefrom. Any
      arbitration shall take place in Houston, Texas, or as otherwise agreed by the
      parties. This clause shall survive the termination of this Agreement and shall
      be governed by the Federal Arbitration Act.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (c)  Specific
      Performance.
      Notwithstanding the foregoing dispute resolution procedures, the parties
      acknowledge and agree that any breach by any party of the provisions of Articles
      2, 3, 6, 7, and 8 may cause irreparable injury for which monetary damages would
      not be adequate. Accordingly, such provisions may be enforced by the parties
      by
      specific performance without first proceeding pursuant to paragraph (a) or
      (b)
      above. 

     

    ARTICLE
      10

     

    NOTICES

     

    Any
      notice or other communication that a party desires to give to another party
      shall be in writing, and made be made by personal delivery, delivery by
      electronic mail, by registered or certified mail (postage prepaid), by
      facsimile, or by overnight commercial courier service, addressed to the party
      at
      its address, e-mail address, or facsimile number set forth below. Notice shall
      be effective as follows: upon the date of delivery if by personal delivery
      or
      delivery by electronic mail; upon three (3) calendar days after deposit in
      any
      United States mail box if by registered or certified mail; upon confirmed
      transmission if by facsimile; or upon one (1) business day following the date
      so
      mailed by courier if by overnight commercial courier service. Any party may
      designate a different address to which notices or demands shall thereafter
      be
      directed by written notice given in the manner hereinabove required and directed
      to the other parties at its respective address as set forth herein.

     

    To
      TRANSFEREE:

     

    Tejas
      Research & Engineering, LP

    9185
      Six
      Pines Drive

    The
      Woodlands, TX 77380

    Attention:
      Tom Hill

    Facsimile:
      403-466-8063

    Confirm:
      281-466-8700 

     

    With
      a
      copy to:

     

    Fulbright
      & Jaworski L.L.P.

    1301
      McKinney, Suite 5100

    Houston,
      Texas 77010

    Attention:
      Gene G. Lewis

    Facsimile:
      (713) 651-5246

    Confirm:
      (713) 651-5151

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    To
      TRANSFEROR:

     

    Hemiwedge
      Valve Corporation

    1011
      Beach Airport Road

    Conroe,
      Texas 77301

    Attention:
      President, Ken Chickering 

    Facsimile:
      936-539-2990 

    Confirm:
      kenc@hemiwedge.com

     

    With
      a
      copy to:

     

    BURLESON
      COOKE, L.L.P.

    2040
      North Loop 336 West, Suite 123

    Conroe,
      Texas 77304 

    Attention:
      Dr. Claude E. Cooke Jr.

    Facsimile:
      936-494-0102

    Confirm:
      713-358-1700

     

    ARTICLE
      11

     

    MISCELLANEOUS

     

    Section
      11.1  Executory
      Contract.
      The
      parties agree that this contract is an executory contract as that term is used
      in the bankruptcy provisions of the United States Code, including 11 U.S.C.
      Section 365(n), due to the mutual on-going obligations of the
      parties.

     

    Section
      11.2  Amendments.
      This
      Agreement may be modified or amended at any time by an approval in writing
      signed by the parties.

     

    Section
      11.3  Entire
      Agreement.
      This
      Agreement, along with the Transfer Agreement and the other agreements
      contemplated thereby and delivered contemporaneously herewith, constitutes
      the
      entire agreement between the parties relating to the subject matter hereof
      and
      supersedes any prior agreement or understanding between them.
      In the
      event of any inconsistency or conflict between this Agreement and such other
      agreements, the provisions of this Agreement shall control. 

     

    Section
      11.4  Successors
      and Assigns. This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective successors and permitted assigns.

     

    Section
      11.5  Severability.
      If
      any
      provision of this Agreement, or the application of such provision to any person
      or circumstance, shall be held invalid, the remainder of this Agreement, or
      the
      application of such provision to persons or circumstances other than those
      to
      which it is held invalid, shall not be affected thereby.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    Section
      11.6  Counterpart
      Execution; Facsimile Execution. Separate
      copies of this Agreement may be executed by the parties hereto, with the same
      effect as though all parties had signed the same copy of this Agreement.
      Facsimile signatures shall have the same effect as manually executed
      signatures.

     

    Section
      11.7  Further
      Assurances. Each
      party hereto agrees to execute, with acknowledgment or affidavit, if required,
      any and all documents and writings which may be necessary or expedient in
      connection with the execution of this Agreement and the achievement of its
      purposes.
      Each of
      TRANSFEROR and TRANSFEREE shall execute and deliver from time to time such
      further agreements, documents, certificates and other instruments of conveyance,
      assignment and transfer and shall use reasonable efforts to take or cause to
      be
      taken such other actions as may be reasonably necessary to vest all of
      TRANSFEROR’s right, title and interest in and to the Assigned Hemiwedge
      Intellectual Property, Assigned Deliverables, and Licensed Deliverables in
      TRANSFEREE, including using reasonable efforts to obtain the approval, waiver
      or
      consent of any person.

     

    Section
      11.8  Waiver.
      The
      rights and remedies of the parties to this Agreement are cumulative and not
      alternative. Neither the failure nor any delay by any party in exercising any
      right, power, or privilege under this Agreement will operate as a waiver of
      such
      right, power, or privilege, and no single or partial exercise of any such right,
      power, or privilege will preclude any other or further exercise of such right,
      power, or privilege or the exercise of any other right, power, or
      privilege.

     

    Section
      11.9  Savings
      Clause.
      Should
      TRANSFEROR, voluntarily or involuntarily, become subject to the protection
      of
      the United States bankruptcy Laws or similar Laws of another jurisdiction,
      TRANSFEREE shall be entitled to all of the benefits of such bankruptcy Laws.
      Pending the assumption or rejection of this Agreement, TRANSFEROR shall perform
      all of its obligations under this Agreement and as required by such bankruptcy
      Laws. If TRANSFEROR or any trustee rejects this Agreement pursuant to such
      bankruptcy Laws, TRANSFEREE may elect to retain its license rights under this
      Agreement for the duration of this Agreement and the license granted herein.
      If
      TRANSFEREE elects to retain its license rights hereunder, TRANSFEREE may freely
      exercise its rights under this Agreement and any supplementary agreement and
      TRANSFEROR shall comply fully with its delivery and disclosure obligations
      pursuant to Section 2.3 inasmuch as the Assigned Deliverables, Licensed
      Deliverables, and Technology are integral to TRANSFEREE’s license rights
      pursuant to Section 2.1 and assignment rights under Section 2.2. TRANSFEROR
      and/or the trustee shall not interfere with the rights of TRANSFEREE as provided
      in this Agreement.

     

     

    [SIGNATURES
      BEGIN ON THE FOLLOWING PAGE]

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      undersigned have executed this Agreement.

     

    


     

    TRANSFEROR:

     

    Hemiwedge
      Valve Corporation

    


    By: ________________________________

    Name:
      Matthew C. Flemming

    Title:
      Chief Financial Officer

     

    TRANSFEREE:

     

    Tejas
      Research & Engineering, L.P.

    


    By: ________________________________

    Name:
      Thomas Hill

    Title:
      Chief Executive Officer

     

    
      
        
        

      

      
        SIGNATURE
          PAGE TO INTELLECTUAL PROPERTY AGREEMENT

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      A –
      LICENSED HEMIWEDGE INTELLECTUAL PROPERTY

     

    
      	
            	a.	
              U.S.
                Patent Number 4,962,911, titled “Hemiwedge Valve”
                (expired)

            


    

     

    
      	
            	b.	
              U.S.
                Patent Number 5,333,834, titled “Valve
                Driver”

            


    

     

    
      	
            	c.	
              U.S.
                Patent Number 5,507,469, titled “Valve Actuator System for Initial Torque
                Reduction”

            


    

     

    
      	
            	d.	
              U.S.
                Patent Number 7,357,145, titled “High-pressure, Hemi-wedge Cartridge
                Valve”

            


    

     

    
      	
            	e.	
              U.S.
                Patent Application Publication Number 2008/0093575, titled “Rotatable
                Wedge Valve Mechanism And Method For
                Manufacture”

            


    

     

    
      	
            	f.	
              U.S.
                Patent Application Publication Number 2008/0099076, titled “Rotatable
                Wedge Cartridge Valve Mechanism And Method For Assembly And
                Disassembly”

            


    

     

    
      	
            	g.	
              U.S.
                Patent Application Publication Number 2008/0179558 (U.S. Patent
                Application Serial Number 11/699518), titled “Self-adjusting Seat For
                Rotary Valve” (abandoned)

            


    

     

    
      	
            	h.	
              WO2008/051886,
                titled “Rotatable Wedge Valve Mechanism And Method For
                Manufacture”

            


    

     

    
      	
            	i.	
              WO2008/055050,
                titled “Rotatable Wedge Cartridge Valve Mechanism And Method For Assembly
                And Disassembly”

            


    

     

    
      	
            	j.	
              WO1996/035068
                (PCT/US96/05980), titled “Valve Actuator System for Initial Torque
                Reduction” (expired)

            


    

     

    
      	
            	k.	
              WO1994/023228
                (PCT/US94/03360), titled “Valve Driver”
                (expired)

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      B –
      ASSIGNED HEMIWEDGE INTELLECTUAL PROPERTY

     

    
      	
            	a.	
              U.S.
                Patent Application Serial Number 12/049765, titled “Hydraulic
                Bi-Directional Rotary Isolation
                Valve”

            


    

     

    
      	
            	b.	
              U.S.
                Patent Application Serial Number 12/112092, titled “Mechanical
                B-Directional Isolation Valve”

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
      C –
      SHORT FORM ASSIGNMENT

     

    ASSIGNMENT

     

    THIS
      ASSIGNMENT,
      is made
this
      ____
      day
      of October,
      2008,
      by
      Hemiwedge
      Valve Corporation, a Texas corporation (hereinafter referred to as
      Assignor);

     

    WHEREAS,
      Assignor is the owner of certain new and useful inventions as described in
      each
      patent or patent application listed below (herein “Inventions”): 

     

    United
      States of America application serial number 12/0497,65, titled “Hydraulic
      Bi-Directional Rotary Isolation Valve”; and United States of America application
      serial number 12/112,092, titled “Mechanical B-Directional Isolation Valve”;
      and

     

    WHEREAS,
      Tejas
      Research & Engineering, L.P., a Texas limited partnership (herein called
“Assignee”), is desirous of acquiring the entire right, title and interest in
      and to said Inventions, including said pending patent applications anywhere
      in
      the world, and in and to any Letters Patent of the United States to be obtained
      therefore and thereon.

     

    NOW,
      THEREFORE,
      for
      good and sufficient consideration, the receipt of which is hereby acknowledged,
      Assignor has sold, assigned, transferred and set over, and by these presents
      does sell, assign, transfer and set over, unto Assignee, its successors, legal
      representatives and assigns, the entire right, title and interest in and to
      the
      above-mentioned Inventions, including said pending applications anywhere in
      the
      world, and in and to any Letters Patent to be obtained therefore and thereon,
      and in and to any and all direct and indirect divisions, continuations and
      continuations-in-part of said application(s), and any and all Letters Patent
      in
      the United States
      and all
      foreign countries which may be granted therefore and thereon, and reissues,
      reexaminations and extensions of said Letters Patent, and all rights of action
      on account of past, present and future infringement of said patents and like
      protection, and all rights under the International Convention for the Protection
      of Industrial Property, the same to be held and enjoyed by Assignee, for its
      own
      use and benefit and the use and benefit of its successors, legal representatives
      and assigns, to the full end of the term or terms for which Letters Patent
      may
      be granted and/or extended, as fully and entirely as the same would have been
      held and enjoyed by Assignor, had this sale and assignment not been
      made.

     

    AND
      for the
      same consideration, Assignor hereby represents and warrants to Assignee, its
      successors, legal representatives and assigns, that, at the time of execution
      and delivery of these presents, except for any rights, titles and/or interests
      that have arisen to Assignee under law or that have already been transferred
      to
      Assignee, Assignor is the sole and lawful owners of the entire right, title
      and
      interest in and to the said Inventions, including said pending applications
      anywhere in the world, and in and to any Letters Patent to be obtained therefore
      and thereon, and that the same are unencumbered and that Assignor has good
      and
      full right and lawful authority to sell and convey the same as herein set
      forth.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    AND
      for the
      same consideration, Assignor hereby covenants and agrees to and with Assignee,
      its successors, legal representatives and assigns, that Assignor will sign
      all
      papers and documents, take all lawful oaths and do all acts necessary or
      required to be done for the procurement, maintenance, enforcement and defense
      of
      any Letters Patent and applications for Letters Patent for said Inventions,
      whenever counsel of Assignee, or counsel of its successors, legal
      representatives and assigns, shall advise: that any proceedings in connection
      with said Inventions, patent applications, or Letters Patent, including but
      not
      limited to interference proceedings, is lawful and desirable; or, that any
      division, continuation or continuation-in-part of any application for Letters
      Patent, or any reissue, reexamination or extension of any Letters Patent, to
      be
      obtained thereon, is lawful and desirable.

     

    AND
      Assignor
      hereby requests the Commissioner of Patent and Trademarks to issue said Letters
      Patent of the United States to Assignee, as Assignee of said Inventions and
      any
      Letters Patent issued or to be issued thereon, for the sole use and benefit
      of
      Assignee, its successors, legal representatives and assigns.

     

    AND
      Assignor
      hereby grants the following individuals the power to insert on this Assignment
      any further identification which may be necessary or desirable to comply with
      the rules of the United States Patent and Trademark Office for recordation
      of
      this document: 

     

    FULBRIGHT
      & JAWORSKI L.L.P.

     

    All
      practitioners at Customer Number 26271.

     

    
      	
              Date:

            	 	 	 
	 	 	 	
              Printed
                Name:

            
	 	 	 	 


    

     

    
      	 THE STATE OF TEXAS	 '
	 	 
	 COUNTY OF HARRIS	 '


    

     

    Before
      me, the undersigned authority, on this ____ day of October, 2008, personally
      appeared _______________________, who being by me first duly sworn declared
      that
      he is _______________________ and acknowledged to me that he executed the
      foregoing Assignment for the purposes therein expressed.

     

    (Notary
      Seal)

     

    
      	 	 
	 	
               Notary
                Public, State of
                Texas