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    TRANSFER
      AGREEMENT

     

    BY
      AND AMONG

     

    SHUMATE
      INDUSTRIES, INC.,

     

    HEMIWEDGE
      VALVE CORPORATION

     

    AND

     

    TEJAS
      RESEARCH & ENGINEERING, L.P.

     

    

     

    October
      14, 2008

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      TABLE
        OF CONTENTS

       

    

    
      
        	 	 	
                Page

              
	 	 	 
	
                ARTICLE
                  I

              	
                THE
                  TRANSACTIONS

              	
                1

              
	
                1.1

              	
                Assignment
                  and License of the Intellectual Property

              	
                1

              
	
                1.2

              	
                Issuance
                  of Warrants

              	
                1

              
	
                1.3

              	
                No
                  Assumption of Liabilities

              	
                1

              
	 	 	 
	
                ARTICLE
                  II

              	
                THE
                  PURCHASE PRICE

              	
                2

              
	
                2.1

              	
                Purchase
                  Price

              	
                2

              
	 	 	 
	
                ARTICLE
                  III

              	
                CLOSING

              	
                2

              
	
                3.1

              	
                Closing

              	
                2

              
	
                3.2

              	
                Deliveries
                  and Actions by the Sellers

              	
                2

              
	
                3.3

              	
                Deliveries
                  and Actions by Tejas

              	
                3

              
	 	 	 
	
                ARTICLE
                  IV

              	
                REPRESENTATIONS
                  AND WARRANTIES OF THE PARTIES

              	
                4

              
	
                4.1

              	
                Representations
                  and Warranties of the Sellers

              	
                4

              
	
                4.2

              	
                Representations
                  and Warranties of Tejas

              	
                7

              
	 	 	 
	
                ARTICLE
                  V

              	
                COVENANTS

              	
                9

              
	
                5.1

              	
                Reasonable
                  Commercial Efforts

              	
                9

              
	
                5.2

              	
                Confidentiality

              	
                10

              
	
                5.3

              	
                Engineering
                  Support

              	
                11

              
	
                5.4

              	
                Subsequent
                  Financing

              	
                11

              
	
                5.5

              	
                Transfer
                  Taxes

              	
                12

              
	 	 	 
	
                ARTICLE
                  VI

              	
                MISCELLANEOUS

              	
                12

              
	
                6.1

              	
                Nature
                  and Survival of Representations

              	
                12

              
	
                6.2

              	
                Notices

              	
                12

              
	
                6.3

              	
                Successors
                  and Assigns

              	
                13

              
	
                6.4

              	
                Governing
                  Law

              	
                13

              
	
                6.5

              	
                Venue;
                  Service of Process

              	
                13

              
	
                6.6

              	
                Headings

              	
                13

              
	
                6.7

              	
                Counterparts
                  and Facsimile Signatures

              	
                13

              
	
                6.8

              	
                Further
                  Assurances

              	
                14

              
	
                6.9

              	
                Amendment
                  and Waiver

              	
                14

              
	
                6.10

              	
                Entire
                  Agreement

              	
                14

              
	
                6.11

              	
                Severability

              	
                14

              
	
                6.12

              	
                Expenses

              	
                14

              
	
                6.13

              	
                Construction

              	
                15

              
	
                6.14

              	
                Definitions

              	
                15

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

    

     

    SCHEDULES:

     

    
      
        	
                Schedule
                  4.1(c)

              	
                Third
                  Party and Governmental Consents (Sellers)

              
	
                Schedule
                  4.1(f)

              	
                Assets;
                  Encumbrances to be Released at Closing

              
	
                Schedule
                  4.1(h)

              	
                Subsequent
                  Events

              
	
                Schedule
                  4.1(j)

              	
                Capitalization

              
	
                Schedule
                  4.1(k)

              	
                Brokers’
                  Fees

              

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

         

      

    

    TRANSFER
      AGREEMENT

     

    THIS
      TRANSFER AGREEMENT (this “Agreement”)
      is
      entered into this 15th day of October, 2008, by and among Shumate Industries,
      Inc., a Delaware corporation (“Shumate”),
      Hemiwedge Valve Corporation, a Texas corporation and wholly owned subsidiary
      of
      Shumate (“Hemiwedge”
and,
      together with Shumate, the “Sellers”),
      and
      Tejas Research & Engineering, L.P., a Texas limited partnership
      (“Tejas”).
      

     

    WHEREAS,
      the Sellers, directly or indirectly, have designed and developed valve products
      in the energy field services (the “Hemiwedge
      Valve Technology”);

     

    WHEREAS,
      the Sellers desire to transfer to Tejas, and Tejas desires to acquire from
      the
      Sellers, certain of the Sellers’ assets related to the Hemiwedge Valve
      Technology, on the terms and conditions set forth in this Agreement;

     

    WHEREAS,
      Shumate desires to sell to Tejas, and Tejas desires to purchase from Shumate,
      certain common stock purchase warrants of Shumate; and

     

    NOW,
      THEREFORE, in consideration of the mutual covenants contained herein and
      intending to be legally bound hereby, the parties hereto agree as
      follows:

     

    ARTICLE
      I

    THE
      TRANSACTIONS

     

    
      	
              1.1

            	
              Assignment
                and License of the Intellectual Property.
                On the Closing Date (as hereinafter defined), Hemiwedge
                and Tejas shall enter into that certain Intellectual Property Agreement
                dated as of the date hereof (the “Intellectual
                Property Agreement”)
                providing for the assignment of certain intellectual property and
                related
                assets (the “Purchased
                Assets”)
                and the license of certain intellectual property (the “Licensed
                Assets”
                and together with the Purchased Assets, the “Assets”).

            

    

     

    
      	
              1.2

            	
              Issuance
                of Warrants.
                On the Closing Date:

            

    

     

    
      	 	
              (a)

            	
              Shumate
                shall deliver (i) to Tejas its Common Stock Purchase Warrants dated
                as of
                the date hereof (“Warrants”)
                to acquire 2,443,269 shares of Shumate’s common stock, par value $.001 per
                share (“Common
                Stock”),
                and (ii) upon the transfer by Tejas to Intervale Capital, LLC, a
                Delaware
                limited liability company (“ICLLC”),
                of the Warrants, to ICLLC Warrants to acquire such number of shares
                of
                Common Stock transferred by Tejas to
                ICLLC;

            

    

     

    
      	 	
              (b)

            	
              Shumate
                and Tejas shall enter into that certain Registration Rights Agreement
                dated as of the date hereof (the “Registration
                Rights Agreement”)
                providing for the registration of the Common Stock that may be acquired
                upon exercise of the Warrants.

            

    

     

    
      	
              1.3

            	
              No
                Assumption of Liabilities.
                Tejas shall
                not assume or be responsible for any claims against or commitments,
                contracts, agreements, obligations or other liabilities of the Sellers,
                whether known or unknown, asserted or unasserted, accrued or unaccrued,
                absolute or contingent, liquidated or unliquidated, due or to become
                due,
                and whether contractual, statutory, or otherwise, and the Sellers
                will at
                all times indemnify and hold Tejas harmless from and against any
                claim
                therefor or liability arising
                therefrom.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II

    THE
      PURCHASE PRICE

     

    
      	
              2.1

            	
              Purchase
                Price.
                The aggregate purchase price to be paid by Tejas to the Sellers in
                consideration of the sale, assignment and transfer of the Assets,
                the sale
                of the Warrants and the consummation of the other transactions
                contemplated herein shall be Three Million Five Hundred Thousand
                and
                No/100 Dollars ($3,500,000.00) (the “Purchase
                Price”).

            

    

     

    ARTICLE
      III

    CLOSING

     

    
      	
              3.1

            	
              Closing.
                The closing of the transactions contemplated by this Agreement (the
                “Closing”)
                shall take place contemporaneously with the execution of this Agreement
                (the “Closing
                Date”)
                at the offices of Tejas’s counsel in Houston, Texas or at such other place
                as may be agreed by the parties. For convenience, the parties agree
                that
                the Closing may take place by the exchange of electronic signatures
                to the
                documents to be executed and delivered at the Closing (the “Closing
                Documents”)
                and delivery of the Purchase Price by wire transfer of immediately
                available funds, followed by the mailing of executed originals of
                the
                Closing Documents, without the need for a face to face
                meeting.

            

    

     

    
      	
              3.2

            	
              Deliveries
                and Actions by the Sellers.
                At the Closing, the Sellers shall deliver, or cause to be delivered,
                to
                Tejas:

            

    

     

    
      	 	
              (a)

            	
              the
                Assets, free and clear of all Encumbrances, other
                than the Permitted Encumbrances (as defined in the Intellectual Property
                Agreement);

            

    

     

    
      	 	
              (b)

            	
              one
                or more bills of sale, assignments or other conveyances, in form
                and
                substance reasonably satisfactory to Tejas (collectively, the
                “Assignments”),
                duly executed by the applicable
                Seller;

            

    

     

    
      	 	
              (c)

            	
              the
                Intellectual Property Agreement, duly executed by
                Hemiwedge;

            

    

     

    
      	 	
              (d)

            	
              the
                (i) Warrants issued to Tejas to acquire 2,443,269 shares of Common
                Stock
                and (ii) upon the transfer by Tejas to ICLLC of such Warrants, Warrants
                issued to ICLLC to acquire such number of shares of Common Stock
                transferred by Tejas to ICLLC, in each case, duly executed by
                Shumate;

            

    

     

    
      	 	
              (e)

            	
              the
                Registration Rights Agreement, duly executed by
                Shumate;

            

    

     

    
      	 	
              (f)

            	
              copies
                of all consents and approvals required in connection with (i) the
                execution, delivery and performance of this Agreement and (ii) the
                sale or
                license of the Assets, including those consents listed on Schedule
                4.1(c),
                in form and substance reasonably satisfactory to
                Tejas;

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (g)

            	
              evidence,
                in form and substance reasonably satisfactory to Tejas, of the release
                of
                all Encumbrances on the Assets, including those listed on Schedule
                4.1(f)(i);
                

            

    

     

    
      	 	
              (h)

            	
              a
                secretary’s certificate or certificates from each of the Sellers, which
                certifies as true, accurate, and complete, as of the Closing Date:
                (i) a
                copy of the resolutions of the board of directors of such Seller,
                authorizing the execution, delivery, and performance by such Seller
                of
                this Agreement and the ancillary agreements described therein, and
                the
                consummation by such Seller of the transactions contemplated hereby
                and
                thereby; (ii) with respect to Hemiwedge, a copy of the resolutions
                of the
                shareholders of Hemiwedge, approving the consummation by Hemiwedge
                of the
                transactions contemplated in this Agreement and the ancillary agreements
                described herein; (iii) the incumbency of the officer or officers
                of such
                Seller authorized to execute this Agreement and any ancillary agreements
                on behalf of such Seller; and (iv) the charter and bylaws, or comparable
                organizational documents, of such Seller;

            

    

     

    
      	 	
              (i)

            	
              a
                certificate issued by the Secretary of State of the state of each
                Sellers’
                jurisdiction of incorporation evidencing the existence and good standing
                of such Seller, as of a recent
                date;

            

    

     

    
      	 	
              (j)

            	
              an
                originally executed copy of the written opinions of Indeglia & Carney
                and Burleson Cooke L.L.P., counsel for the Sellers, as to such matters
                concerning the Sellers and the Closing Documents as Tejas may reasonably
                request, dated as of the Closing, addressed to Tejas, and otherwise
                in
                form and substance reasonably satisfactory to Tejas;
                and

            

    

     

    
      	 	
              (k)

            	
              such
                other documents and instruments as Tejas may reasonably request and
                which
                are deemed by Tejas to be reasonably necessary or advisable to effect
                the
                transactions contemplated herein and by the ancillary agreements.
                

            

    

     

    
      	
              3.3

            	
              Deliveries
                and Actions by Tejas.
                At the Closing, Tejas shall deliver, or cause to be delivered, to
                the
                Sellers:

            

    

     

    
      	 	
              (a)

            	
              the
                Purchase Price;

            

    

     

    
      	 	
              (b)

            	
              the
                Intellectual Property Agreement, duly executed by
                Tejas;

            

    

     

    
      	 	
              (c)

            	
              the
                Registration Rights Agreement, duly executed by Tejas;
                and

            

    

     

    
      	 	
              (d)

            	
              such
                other documents and instruments as the Sellers may reasonably request
                and
                which are deemed by the Sellers to be reasonably necessary or advisable
                to
                effect the transactions contemplated herein and by the ancillary
                agreements. 

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IV

    REPRESENTATIONS
      AND WARRANTIES OF THE PARTIES

     

    
      	
              4.1

            	
              Representations
                and Warranties of the Sellers.
                The Sellers represent and warrant to Tejas, as of the date hereof,
                as
                follows:

            

    

     

    
      	 	
              (a)

            	
              Organization
                of the Seller.
                The Sellers are duly organized, validly existing and in good standing
                under the laws of their respective jurisdiction of incorporation
                and are
                duly qualified to do business and are in good standing in each
                jurisdiction in which the nature of the business being conducted
                requires
                such Seller to be so qualified.

            

    

     

    
      	 	
              (b)

            	
              Authorization.
                The Sellers have the necessary power and authority to enter into
                and
                deliver this Agreement and to perform their respective obligations
                hereunder. The execution and delivery of this Agreement by the Sellers
                and
                the performance by the Sellers of their respective obligations hereunder
                have been duly authorized by all necessary corporate action. This
                Agreement and all agreements contemplated to be delivered hereunder
                have
                been executed and delivered by each Seller party thereto and constitute
                the legal, valid and binding obligations of the Sellers enforceable
                against each of them in accordance with their terms, subject, however,
                to
                limitations with respect to enforcement imposed by law in connection
                with
                bankruptcy, insolvency and other laws affecting creditors’ rights
                generally.

            

    

     

    
      	 	
              (c)

            	
              Noncontravention.
                Neither the execution and the delivery of this Agreement by the Sellers,
                nor the consummation by the Sellers of the transactions contemplated
                hereby will (with or without the giving of notices or the passage
                of time)
                (i) violate any applicable Law or other restriction of any Governmental
                Authority to which any Seller, the Hemiwedge Technology or the Assets
                are
                subject or any provision of the Sellers’ respective charter or bylaws (or
                other organizational documents) or (ii) except as set forth in
                Schedule
                4.1(c),
                conflict with, result in a breach of, constitute a default under,
                result
                in the acceleration of, create in any party the right to accelerate,
                terminate, modify or cancel, or require any notice under any agreement,
                contract, lease, license, instrument or other arrangement to which
                the
                Sellers are a party or by which the Sellers are bound or to which
                any of
                the Assets is subject which (in the case of clause (ii) only) could
                adversely affect the consummation of the transactions contemplated
                hereby
                or the value of the Assets or result in the imposition of any Encumbrance
                upon any of the Assets. Except as set forth in Schedule
                4.1(c),
                the Sellers do not need to give any notice to, make any filing with
                or
                obtain any authorization, consent or approval of, any Governmental
                Authority or other third party in order for the parties to consummate
                the
                transactions contemplated by this
                Agreement.

            

    

     

    
      	 	
              (d)

            	
              Securities
                and Exchange Commission Filings.
                The information filed with the U.S. Securities and Exchange Commission
                (the “SEC”)
                by or on behalf of Shumate (the “SEC
                Filings”)
                complies as to form in all material respects with the requirements
                of the
                Securities Act of 1933, as amended (the “Securities
                Act”),
                and the Securities Exchange Act of 1934, as amended (the “Exchange
                Act”),
                as applicable. No facts have come to the attention of the Sellers
                that
                have caused any of the Sellers to believe that any such information
                contained any untrue statement of a material fact or omitted to state
                a
                material fact required to be stated therein or necessary to make
                the
                statements therein not misleading.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (e)

            	
              Financial
                Statements. Except
                as may have been corrected or supplemented in a subsequent SEC Filing,
                the
                financial statements of Shumate included in the SEC Filings (the
                “Financial
                Statements”)
                comply in all material respects with applicable accounting requirements
                and the rules and regulations of the SEC with respect thereto as
                in effect
                at the time of filing. Except as may have been corrected or supplemented
                in a subsequent SEC Filing, the Financial Statements have been prepared
                in
                accordance with United States generally accepted accounting principles
                applied on a consistent basis during the periods involved, except
                as may
                be otherwise specified in such Financial Statements or the notes
                thereto,
                or, in the case of unaudited financial statements, as permitted by
                Regulation S-X promulgated under the Securities Act and the Exchange
                Act,
                and fairly present in all material respects the financial position
                of
                Shumate and its consolidated subsidiaries as of and for the dates
                thereof
                and the results of operations and cash flows for the periods then
                ended,
                subject, in the case of unaudited statements, to normal, year-end
                audit
                adjustments and the lack of footnotes.

            

    

     

    
      	 	
              (f)

            	
              Assets.
                Except as set forth on Schedule
                4.1(f),
                the Sellers are the sole and exclusive owner of, and have good and
                marketable title to, each of the Assets, free and clear of all
                Encumbrances except for the Encumbrances, if any, listed on Schedule
                4.1(f)
                and which will be removed at or prior to the Closing, and are exclusively
                entitled to possess and dispose of same. At Closing, the Sellers
                will
                transfer to Tejas sole and exclusive, and good and marketable, title
                to
                all of the Assets, free and clear of any and all Encumbrances. There
                are
                no outstanding agreements or options to sell which grant to any Person
                other than Tejas the right to purchase or otherwise acquire any of
                the
                Assets. 

            

    

     

    
      	 	
              (g)

            	
              Intellectual
                Property.
                Neither Shumate nor any of its Affiliates have any right, title or
                interest in or to the Hemiwedge Intellectual Property, or the Technology
                and Deliverables (as such terms are defined in the Intellectual Property
                Agreement) associated therewith.

            

    

     

    
      	 	
              (h)

            	
              Subsequent
                Events. Except
                as set forth on Schedule
                4.1(h),
                since June 30, 2008, there has not been any change that constitutes,
                and
                no event or events have occurred which have resulted in or constitute,
                or
                would reasonably be expected to result in or constitute, a material
                adverse effect on the Hemiwedge Valve Technology or the Assets. Without
                limiting the foregoing, since that date, none of the following has
                occurred:

            

    

     

    
      	 	
              (i)

            	
              the
                Sellers have not sold, leased, transferred or assigned any of the
                Assets;

            

    

     

    
      	 	
              (ii)

            	
              no
                Encumbrance has been imposed upon any of the Assets;
                and

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (iii)

            	
              the
                Sellers have not committed to do any of the
                foregoing.

            

    

     

    
      	 	
              (i)

            	
              Legal
                Proceedings.
                There is no complaint or petition in which relief is sought involving,
                affecting, or relating to the ownership, operation or use of the
                Assets or
                that would prevent, delay or make illegal the transactions contemplated
                by
                this Agreement, and there is no litigation, action, suit, proceeding
                or
                investigation by any Governmental Authority pending or threatened
                against
                (orally or in writing), involving, affecting or relating to the Sellers,
                the Assets, the Hemiwedge Valve Technology or the transactions
                contemplated by this Agreement.

            

    

     

    
      	 	
              (j)

            	
              Capitalization;
                Reservation of Common Stock.
                The authorized common stock of Shumate consists of 50,000,000 shares
                of
                Common Stock, of which, as of the date hereof, (i) 22,013,879 shares
                of
                Common Stock are issued and outstanding and (ii) 2,443,269 shares
                of
                Common Stock have been reserved and are available solely for issuance
                and
                delivery to Tejas and/or its designated nominee, as applicable, upon
                the
                exercise of the Warrants. Except as set forth in Schedule
                4.1(j),
                there are no rights or obligations which are convertible into,
                exchangeable for, or exercisable to acquire any Common Stock. 

            

    

     

    
      	 	
              (k)

            	
              Brokers’
                Fees.
                Except as set forth in Schedule
                4.1(k),
                the Sellers have not incurred any obligation or liability, contingent
                or
                otherwise, for brokers’ or finders’ fees in respect of the matters
                provided for in this Agreement for which Tejas could become
                liable.

            

    

     

    
      	 	
              (l)

            	
              Asset
                Assignment and License Process.
                The Sellers have been engaged in ongoing discussions with various
                prospective financiers, corporate and strategic partners, purchasers,
                and
                licensors with respect to the Assets, pursuant to which the Sellers
                have
                sought to achieve the highest value and best price for the sale,
                assignment and/or license of the Assets. The Assets were marketed
                for
                approximately six months. The offer made by Tejas represented the
                highest
                value and best price for the Assets. The negotiation of the assignment
                and
                license of the Assets to Tejas was conducted in good faith and on
                an arms’
                length basis.

            

    

     

    
      	 	
              (m)

            	
              Accuracy
                of Information Furnished.
                No representation, warranty, statement or information contained in
                this
                Agreement (including the various Schedules attached hereto) or any
                agreement executed in connection herewith or in any certificate delivered
                pursuant hereto or thereto or made or furnished to Tejas or their
                respective representatives by or on behalf of the Sellers, contains
                or
                shall contain any untrue statement of a material fact or omits or
                shall
                omit any material fact necessary to make the information contained
                therein
                not misleading. The Sellers have provided Tejas with true, accurate
                and
                complete copies of all documents listed or described in the various
                Schedules attached hereto.

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
              4.2

            	
              Representations
                and Warranties of Tejas.
                Tejas hereby represents and warrants to the Sellers, as of the date
                hereof, as follows:

            

    

     

    
      	 	
              (a)

            	
              Organization
                of Tejas.
                Tejas is duly organized, validly existing and in good standing under
                the
                laws of its jurisdiction of organization and is duly qualified to
                do
                business and is in good standing in each jurisdiction in which the
                nature
                of its business being conducted requires it to be so
                qualified.

            

    

     

    
      	 	
              (b)

            	
              Authorization.
                Tejas has the necessary power and authority to enter into and deliver
                this
                Agreement and to perform its obligations hereunder. The execution
                and
                delivery of this Agreement by Tejas and the performance by Tejas
                of its
                obligations hereunder have been duly authorized by all necessary
                action.
                This Agreement and all agreements contemplated to be delivered hereunder
                constitute the legal, valid and binding obligations of Tejas enforceable
                against it in accordance with their terms, subject, however, to
                limitations with respect to enforcement imposed by law in connection
                with
                bankruptcy, insolvency and other laws affecting creditors’ rights
                generally.

            

    

     

    
      	 	
              (c)

            	
              Noncontravention.
                Neither the execution and the delivery of this Agreement by Tejas,
                nor the
                consummation by Tejas of the transactions contemplated hereby will
                (with
                or without the giving of notices or the passage of time) (i) violate
                any applicable Law or other restriction of any Governmental Authority
                to
                which Tejas is subject or any provision of its charter or bylaws
                (or other
                organizational documents) or (ii)  conflict with, result in a breach
                of, constitute a default under, result in the acceleration of, create
                in
                any party the right to accelerate, terminate, modify or cancel, or
                require
                any notice under any agreement, contract, lease, license, instrument
                or
                other arrangement to which Tejas is a party or by which Tejas is
                bound.
                Tejas does not need to give any notice to, make any filing with or
                obtain
                any authorization, consent or approval of, any Governmental Authority
                or
                other third party in order for the parties to consummate the transactions
                contemplated by this Agreement.

            

    

     

    
      	 	
              (d)

            	
              Brokers’
                Fees.
                Tejas has not incurred any obligation or liability, contingent or
                otherwise, for brokers’ or finders’ fees in respect of the matters
                provided for in this Agreement for which the Sellers could become
                liable.

            

    

     

    
      	 	
              (e)

            	
              Information
                on Shumate.
                Tejas has received and had the opportunity to review all documents
                and any
                other information requested from Shumate, has been given full and
                complete
                access to information regarding Shumate, and has utilized such access
                to
                Tejas’s satisfaction for the purpose of obtaining such information
                regarding Shumate as Tejas has reasonably requested; and, particularly,
                Tejas has been given reasonable opportunity to ask questions of,
                and
                receive answers from, representatives of Shumate concerning the terms
                and
                conditions of the offering of the Warrants and to obtain any additional
                information, to the extent reasonably
                available.

            

    

     

    
      	 	
              (f)

            	
              Information
                on Tejas.
                Tejas is an “accredited investor”, as such term is defined in Regulation D
                promulgated by the Commission under the Securities Act, is experienced
                in
                investments and business matters, has made investments of a speculative
                nature and, with its representatives, has such knowledge and experience
                in
                financial, tax and other business matters as to enable Tejas to utilize
                the information made available by Shumate to evaluate the merits
                and risks
                of and to make an informed investment decision with respect to the
                proposed purchase. Tejas has the authority and is duly and legally
                qualified to purchase and own the Securities. Tejas is able to bear
                the
                risk of such investment for an indefinite period and to afford a
                complete
                loss thereof. 

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (g)

            	
              Investment
                Intent.
                On the Closing Date, Tejas will purchase the Warrants as principal
                for its
                own account for investment only and not with a view toward, or for
                resale
                in connection with, the public sale or any distribution thereof,
                other
                than, as soon as practicable following Tejas’s receipt of the Warrants, to
                transfer the Warrants to Intervale Capital, LLC, a Delaware limited
                liability company.

            

    

     

    
      	 	
              (h)

            	
              Compliance
                with Securities Act.
                Tejas understands and agrees that neither the Warrants nor the shares
                of
                Common Stock issuable upon exercise thereof (the “Warrant Shares”) have
                been registered under the Securities Act or any applicable state
                securities laws, by reason of their issuance in a transaction that
                does
                not require registration under the Securities Act (based in part
                on the
                accuracy of the representations and warranties of Tejas contained
                herein),
                and that the Warrants and the Warrant Shares must be held indefinitely
                unless a subsequent disposition is registered under the Securities
                Act or
                any applicable state securities laws or is exempt from such
                registration.

            

    

     

    
      	 	
              (i)

            	
              Warrant
                Legend.
                The Warrants shall bear the following
                legend:

            

    

     

    “THIS
      WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
      BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
      LAWS. THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT
      MAY
      NOT BE SOLD, OFFERED FOR SALE, PLEDGED, TRANSFERRED, HYPOTHECATED OR OTHERWISE
      DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER OR
      EXEMPTION FROM SUCH ACT AND ALL APPLICABLE STATE SECURITIES LAWS OR AN OPINION
      OF COUNSEL REASONABLY SATISFACTORY TO SHUMATE INDUSTRIES, INC. THAT SUCH
      REGISTRATION IS NOT REQUIRED. A COPY OF THE WARRANT IS AVAILABLE AT THE OFFICES
      OF THE COMPANY.”

     

    
      	 	
              (j)

            	
              Warrant
                Shares Legend.
                The Warrant Shares shall bear the following
                legend:

            

    

     

    “THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THE SHARES
      REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
      TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
      EFFECTIVE REGISTRATION STATEMENT UNDER OR EXEMPTION FROM SUCH ACT AND ALL
      APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO SHUMATE INDUSTRIES, INC. THAT SUCH REGISTRATION IS NOT
      REQUIRED.”

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (k)

            	
              Communication
                of Offer.
                The offer to sell the Warrants was directly communicated to Tejas
                by
                Shumate. At no time was Tejas presented with or solicited by any
                leaflet,
                newspaper or magazine article, radio or television advertisement,
                or any
                other form of general advertising or solicited or invited to attend
                a
                promotional meeting otherwise than in connection and concurrently
                with
                such communicated offer.

            

    

     

    
      	 	
              (l)

            	
              Restricted
                Securities.
                Tejas understands that the Securities have not been registered under
                the
                Securities Act and Tejas will not sell, offer to sell, assign, pledge,
                hypothecate or otherwise transfer any of the Warrants unless pursuant
                to
                an effective registration statement under the Securities Act.
                Notwithstanding anything to the contrary contained in this Agreement,
                Tejas may transfer (without restriction and without the need for
                an
                opinion of counsel) the Securities to its Affiliates (as defined
                below)
                provided that each such Affiliate is an “accredited investor” under
                Regulation D and such Affiliate agrees to be bound by the terms and
                conditions of this Agreement. 

            

    

     

    
      	 	
              (m)

            	
              No
                Governmental Review.
                Tejas understands that no United States federal or state agency or
                any
                other governmental or state agency has passed on or made recommendations
                or endorsement of the Securities or the suitability of the investment
                in
                the Warrants nor have such authorities passed upon or endorsed the
                merits
                of the offering of the Warrants.

            

    

     

    ARTICLE
      V

    COVENANTS

     

    
      	
              5.1

            	
              Reasonable
                Commercial Efforts.
                Each party will use its reasonable commercial efforts to take all
                actions
                and to do all things necessary, proper or advisable to consummate,
                make
                effective and comply with all of the terms of this Agreement and
                the
                transactions contemplated hereby (including satisfaction, but not
                waiver,
                of the closing deliveries required by ARTICLE
                III).

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
              5.2

            	
              Confidentiality. 

            

    

     

    
      	 	
              (a)

            	
              Each
                party acknowledges that in performing this Agreement, the party may
                be
                provided with and have access to the other party’s confidential
                information, including, without limitation, technical information
                (such as
                software, algorithms, technology, and trade secrets relating to the
                Assets), processes, product plans and sales information, that the
                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 the other party prior to
                the
                Closing Date. However, “Confidential Information” shall not include
                information that (i) is or becomes available to the public through
                no
                wrongful act of the receiving party, (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, or (iv) is independently developed for the receiving
                party.

            

    

     

    
      	 	
              (b)

            	
              For
                a period of five (5) years from the Closing 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.

            

    

     

    
      	 	
              (c)

            	
              The
                obligation of each party to maintain the other 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) the disclosure of
                which
                has been consented to by the other party in writing, or (iii) the
                disclosure of which is required by a court of competent jurisdiction
                or
                other Governmental Authority or otherwise as required by applicable
                Law or
                regulation of a national securities exchange on which the securities
                of
                such party may then be listed.

            

    

     

    
      	 	
              (d)

            	
              Before
                any party discloses any of the other party’s Confidential Information
                pursuant to Section
                5.2(c)(iii),
                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
                V.
                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.

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (e)

            	
              Each
                party shall promptly inform the other party if it becomes aware of
                any
                reason, whether under applicable law, policy or otherwise, that it
                will,
                or might become compelled to, use the other party’s Confidential
                Information other than as contemplated by Section
                5.2(b)
                or
                disclose Confidential Information in violation of the confidentiality
                restrictions in this ARTICLE
                V.

            

    

     

    
      	
              5.3

            	
              Engineering
                Support. 

            

    

     

    
      	 	
              (a)

            	
              At
                the reasonable request of Tejas, the Sellers shall provide engineering
                support, including the use of the Sellers’ design engineers, application
                engineers and technical specialists (collectively, the “Engineering
                Support”),
                to Tejas as follows:

            

    

     

    
      	 	
              (i)

            	
              From
                time to time after the date hereof, the Sellers shall provide up
                to 500
                hours of Engineering Support to Tejas, at no charge to
                Tejas.

            

    

     

    
      	 	
              (ii)

            	
              From
                time to time after the number of hours of Engineering Support set
                forth in
                clause (i) above have been provided by the Sellers, the Sellers shall
                continue to provide up to 1,000 hours of Engineering Support to Tejas,
                at
                an agreed charge of (x) $100 per hour for Engineering Support provided
                by
                design engineers and application engineers and (y) the lesser of
                $100 per
                hour and the then current market rate
                per hour for Engineering Support provided by technical
                specialists.

            

    

     

    
      	 	
              (iii)

            	
              From
                time to time after the aggregate number of hours of Engineering Support
                set forth in clauses (i) and (ii) above has been provided by the
                Sellers,
                the Sellers shall continue to provide Engineering Support to Tejas
                on a
                reasonable basis on commercial terms and at market rates for comparable
                services.

            

    

     

    
      	 	
              (b)

            	
              All
                payments to be made pursuant to this Section
                5.3
                hereunder by Tejas shall be due and payable thirty (30) days after
                receipt
                by Tejas of an invoice identifying such amounts
                owed.

            

    

     

    
      	
              5.4

            	
              Subsequent
                Financing.
                The
                Sellers hereby agree that, in the event that during the period commencing
                on the date hereof and ending on October 14, 2011, any Seller or
                any of
                its respective affiliates shall desire to raise capital through the
                issuance of debt or equity securities, or enter into any other arrangement
                having the practical effect of the foregoing (any such transaction,
                a
                “Subsequent
                Financing”),
                ICLLC shall be given not less than fifteen (15) business days prior
                written notice of any proposed Subsequent Financing. ICLLC or its
                affiliates who exercise their rights pursuant to this Section
                5.4
                shall have the right during the fifteen (15) business days following
                receipt of the notice to provide, arrange, place, underwrite and/or
                otherwise participate in such Subsequent Financing in accordance
                with the
                terms and conditions set forth in the notice of Subsequent Financing.
                In
                the event such terms and conditions are modified in a manner that
                is more
                advantageous to an investor during the notice period, ICLLC shall
                be given
                prompt notice of such modification and shall have the right during
                the
                seven (7) business days following the notice of modification to exercise
                such right. The Sellers acknowledge that ICLLC and its affiliates
                reserve
                the right not to participate in any Subsequent Financing and that
                the
                foregoing is not a commitment by ICLLC or its affiliates to participate
                in
                any Subsequent Financing; such a commitment would arise only under
                a
                separate written agreement acceptable to the Sellers and ICLLC and/or
                its
                affiliates, as applicable.

            

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
              5.5

            	
              Transfer
                Taxes.
                The Sellers shall bear and pay any and all applicable sales and use
                Taxes
                and similar transfer Taxes payable in connection with the sale,
                assignment, transfer or license of the Assets. The Sellers, at their
                own
                expense, shall file all necessary Tax Returns and other documentation
                with
                respect to such Taxes, if required by applicable
                law.

            

    

     

    ARTICLE
      VI

    MISCELLANEOUS

     

    
      	
              6.1

            	
              Nature
                and Survival of Representations.
                The representations and warranties of Tejas and the Sellers contained
                in
                this Agreement shall survive the Closing indefinitely.
                

            

    

     

    
      	
              6.2

            	
              Notices.
                All notices, demands, requests, consents, approvals, and other
                communications required or permitted hereunder shall be in writing
                and,
                unless otherwise specified herein, shall be (i) personally served,
                (ii)
                deposited in the mail, registered or certified, return receipt requested,
                postage prepaid, (iii) delivered by reputable air courier service
                with
                charges prepaid, or (iv) transmitted by hand delivery or facsimile,
                addressed as set forth below or to such other address as such party
                shall
                have specified most recently by written notice. Any notice or other
                communication required or permitted to be given hereunder shall be
                deemed
                effective (a) upon hand delivery or delivery by facsimile, with accurate
                confirmation generated by the transmitting facsimile machine, at
                the
                address or number designated below (if delivered on a business day
                during
                normal business hours where such notice is to be received), or the
                first
                business day following such delivery (if delivered other than on
                a
                business day during normal business hours where such notice is to
                be
                received) or (b) on the second business day following the date of
                mailing
                by express courier service, fully prepaid, addressed to such address,
                or
                upon actual receipt of such mailing, whichever shall first occur.
                The
                addresses for such communications shall be: (i) if to Shumate to:
                Shumate
                Industries, Inc., 1011 Beach Airport Road, Conroe, Texas 77301, Attn:
                President, CEO, telecopier number: (936) 539-2990, (ii) if to Hemiwedge
                to: c/o Shumate Industries, Inc., 1011 Beach Airport Road, Conroe,
                Texas
                77301, Attn: President, CEO, telecopier number: (936) 539-2990, and
                in the
                case of clause (i) and (ii) above, with a copy by telecopier only
                to:
                Indeglia & Carney, telecopier number: (949) 851-5940, Attn: Marc A.
                Indeglia, and (iii) if to Tejas to: Tejas Research & Engineering,
                L.P., 9185 Six Pines Drive, The Woodlands, Texas 77380, Attn: Thomas
                Hill,
                telecopier number: (403) 466-8063, with an additional copy by telecopier
                only to: (x) Intervale Capital, LLC, telecopier number: (713) 961-0361,
                Attn: Curtis W. Huff and (y) Fulbright & Jaworski, L.L.P., telecopier
                number: (713) 651-5246, Attn: Gene G. Lewis.
                Tejas and the Sellers agree to promptly advise the other parties
                hereto of
                any change of address from that so set
                forth.

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	
              6.3

            	
              Successors
                and Assigns.
                This Agreement, and all rights and powers granted hereby, will bind
                and
                inure to the benefit of the parties hereto and their respective successors
                and assigns, but neither this Agreement nor any of the rights, interests,
                or obligations hereunder shall be assigned by any of the parties
                hereto
                without the prior written consent of the other parties hereto. Except
                as
                set forth in the next preceding sentence, this Agreement is not intended
                to confer upon any other Person except the parties hereto any rights
                or
                remedies hereunder. The parties hereto hereby agree that ICLLC shall
                be a
                third party beneficiary to this Agreement and shall have the right
                to
                enforce Sections
                1.2(a)(ii),
                3.2(a)(ii)
                and 5.4.
                Notwithstanding the forgoing, Tejas shall have an absolute right
                to assign
                its rights in whole or in part (a) under this Agreement at any time
                prior
                to Closing to any of its Affiliates without the Sellers’ prior written
                approval and (b) under Section
                5.3
                at
                any time to any assignee or sublicensee of the Hemiwedge Valve Technology
                so long as such assignment does not materially increase the obligations
                of
                the Sellers to provide Engineering Support pursuant to Section
                5.3(a)(i)
                or
                5.3(a)(ii).

            

    

     

    
      	
              6.4

            	
              Governing
                Law.
                This Agreement shall be governed by, and construed in accordance
                with, the
                laws of the State of Texas (without giving effect to conflict of
                laws
                principles thereof).

            

    

     

    
      	
              6.5

            	
              Venue;
                Service of Process.
                With respect to any suit, action or proceeding (“Proceeding”)
                arising out of or relating to this Agreement each of the parties
                hereto
                hereby irrevocably (i) submits to the exclusive jurisdiction of the
                United
                States District Court for the Southern District of Texas and waives
                any
                objection to venue being laid therein whether based on the grounds
                of
                forum
                non conveniens
                or
                otherwise and hereby agrees not to commence any such Proceeding other
                than
                before the United States District Court for the Southern District
                of
                Texas; provided,
                however,
                that a party may commence any Proceeding in a court other than the
                United
                States District Court for the Southern District of Texas solely for
                the
                purpose of enforcing an order or judgment issued by the United States
                District Court for the Southern District of Texas and (ii) consents
                to
                service of process in any Proceeding by the mailing of copies thereof
                by
                registered or certified mail, postage prepaid, or by recognized
                international express carrier or delivery service, to the Company
                or
                Holders at their respective addresses referred to in Section
                6.2
                hereof; provided,
                however,
                that nothing herein shall affect the right of any party hereto to
                serve
                process in any other manner permitted by
                law.

            

    

     

    
      	
              6.6

            	
              Headings.
                The headings preceding the text of the sections and subsections hereof
                are
                inserted solely for convenience of reference and shall not constitute
                a
                part of this Agreement, nor shall they affect its meaning, construction,
                or effect.

            

    

     

    
      	
              6.7

            	
              Counterparts
                and Facsimile Signatures.
                This Agreement may be executed in any number of counterparts, each
                of
                which when so executed shall be deemed to be an original and, all
                of which
                taken together shall constitute one and the same Agreement. In the
                event
                that any signature is delivered by facsimile transmission, such signature
                shall create a valid binding obligation of the party executing (or
                on
                whose behalf such signature is executed) the same with the same force
                and
                effect as if such facsimile signature were the original
                thereof.

            

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	
              6.8

            	
              Further
                Assurances.
                The parties hereby agree to perform, execute or deliver, or cause
                to be
                performed, executed or delivered, such further acts, assurances and
                instruments as either party may reasonably require to complete or
                perfect
                the conveyance and transfer to Tejas of all of the Sellers’ right, title
                and interest in and to the Assets free and clear of any and all
                Encumbrances consistent with this Agreement, and to do any and all
                such
                further acts and things as may be reasonably necessary to effect
                completely the intent of this
                Agreement.

            

    

     

    
      	
              6.9

            	
              Amendment
                and Waiver.
                The parties may by mutual written agreement amend this Agreement
                in any
                respect; and any party, as to such party, may (a) extend the time
                for the
                performance of any of the obligations of any other party; (b) waive
                any
                inaccuracies in representations by any other party; (c) waive compliance
                by any other party with any of the agreements contained herein and
                performance of any obligations by such other party; and (d) waive
                the
                fulfillment of any condition that is precedent to the performance
                by such
                party of any of its obligations under this Agreement. To be effective,
                any
                such amendment or waiver must be in writing and be signed by the
                party
                against whom enforcement of the same is
                sought.

            

    

     

    
      	
              6.10

            	
              Entire
                Agreement.
                This Agreement and the Schedules hereto, each of which is hereby
                incorporated herein, and the other documents executed and delivered
                pursuant hereto and contemporaneously herewith, set forth all of
                the
                representations, warranties, promises, covenants, agreements, conditions,
                and undertakings between the parties hereto with respect to the subject
                matter hereof, and supersede all prior and contemporaneous agreements
                and
                understandings, inducements or conditions, express or implied, oral
                or
                written. 

            

    

     

    
      	
              6.11

            	
              Severability.
                If any term, provision, covenant or restriction of this Agreement
                is held
                by a court of competent jurisdiction to be invalid, illegal, void
                or
                unenforceable, the remainder of the terms, provisions, covenants
                and
                restrictions set forth herein shall remain in full force and effect
                and
                shall in no way be affected, impaired or invalidated, and the parties
                hereto shall use their commercially reasonable efforts to find and
                employ
                an alternative means to achieve the same or substantially the same
                result
                as that contemplated by such term, provision, covenant or restriction.
                It
                is hereby stipulated and declared to be the intention of the parties
                that
                they would have executed the remaining terms, provisions, covenants
                and
                restrictions without including any of such that may be hereafter
                declared
                invalid, illegal, void or
                unenforceable.

            

    

     

    
      	
              6.12

            	
              Expenses.
                Except as otherwise expressly agreed herein, Tejas, on the one hand,
                and
                the Sellers, on the other hand, will bear their own costs and expenses
                (including legal fees and expenses) incurred in connection with this
                Agreement and the transactions contemplated
                hereby.

            

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	
              6.13

            	
              Construction.
                Whenever 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, all references to Annexes refer to annexes
                to
                this Agreement and all references to Schedules refer to Schedules
                to this
                Agreement, which Exhibits and Schedules are attached hereto and made
                a
                part hereof for all purposes. A “party” means any of Tejas and the
                Sellers, and the “parties” means all of them. 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.

            

    

     

    
      	
              6.14

            	
              Definitions.
                The following definitions shall be applicable to the terms set forth
                herein:

            

    

     

    
      	 	
              (a)

            	
              “Affiliate”
                shall mean, as applied to any Person, any other Person that directly
                or
                indirectly through one or more intermediaries, controls or is controlled
                by, or is under common control with, that
                Person.

            

    

     

    
      	 	
              (b)

            	
              “Governmental
                Authority”
                shall mean 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.

            

    

     

    
      	 	
              (c)

            	
              “Law”
                shall mean all constitutions, treaties, statutes, laws, ordinances,
                regulations, rules or Orders associated with any Governmental
                Authority;

            

    

     

    
      	 	
              (d)

            	
              “Order”
                shall mean any order, writ, rule, judgment, injunction, decree,
                stipulation, determination or award entered by or with any Governmental
                Authority; and

            

    

     

    
      	 	
              (e)

            	
              “Person”
                shall include an individual, a partnership, a limited liability company,
                a
                corporation, an association, a joint stock company, a trust, a joint
                venture, an unincorporated organization or any federal, state, county
                or
                municipal governmental or quasi-governmental agency, department,
                commission, board, bureau, instrumentality or similar entity, foreign
                or
                domestic, having jurisdiction over any Seller or
                Tejas.

            

    

     

    [SIGNATURES
      BEGIN ON THE FOLLOWING PAGE]

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
      and
      year first above written.

     

     

    
      	 	SHUMATE INDUSTRIES, INC.,
for
              itself and as sole shareholder of Hemiwedge Valve
              Corporation
	 	 	 
	 	 	 
	 	By:
              	 
	 	Name: Matthew
              C. Flemming
	 	Title: Chief
              Financial Officer

    

     

     

    
      
        	 	HEMIWEDGE
                VALVE CORPORATION
	 	 	 
	 	 	 
	 	By:
                	 
	 	Name: Matthew
                C. Flemming
	 	Title: Chief
                Financial Officer

      

       

       

      
        
          	 	TEJAS
                  RESEARCH & ENGINEERING, L.P.
	 	 	 
	 	 	 
	 	By:
                  	 
	 	Name: Thomas Hill
	 	Title: Chief Executive
                  Officer

        

         

        
          
            
            

          

          
            
              SIGNATURE
                PAGE TO TRANSFER AGREEMENTUnassociated Document

    Execution
      Version

     

     

    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

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