Document:

ex10-12.htm

Exhibit 10.12

 

GUARANTY

 

This Guaranty (the “Guaranty” or the “Agreement”) is made as of November 30, 2010 by Coil Tubing Technology Holdings, Inc., a Nevada corporation ( “Guarantor”) in favor of Jerry Swinford, an individual (“Payee”).  When the context in which words are used in this Agreement indicates that such is the intent, singular words shall
include the plural, and vice versa, and masculine words shall include the feminine and neuter genders, and vice versa.  Captions are inserted for convenience only, are not a part of this Agreement, and shall not be used in the interpretation of this Agreement.  Capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and the Notes, unless the context requires otherwise.

 

Recitals

 

WHEREAS, Coil Tubing Technology, Inc., a Nevada corporation (“Maker”) has previously entered into that certain Intellectual Property Purchase Agreement with Payee, dated as of November 30, 2010, pursuant to which Maker has agreed to purchase certain intellectual property of Payee (the “Purchase Agreement”);

WHEREAS, Maker and Payee have previously entered into an Executive Employment Agreement dated on or around the date hereof (the “Employment Agreement”);

WHEREAS, Maker has entered into that (i) certain Secured Promissory Note in the amount of $475,000 dated November 30, 2010, by Maker, in favor of Payee (the “$475,000 Note”); and (ii) that certain Secured Promissory Note in the amount of $700,000 dated November 30, 2010, by Maker in favor of Payee (the “$700,000 Note”, and together with the $475,000 Note, the “Notes”),
evidencing amounts owed under the Purchase Agreement; and

WHEREAS,                                Payee was unwilling to execute the Purchase Agreement and to enter into the transactions described in the Purchase Agreement without receipt from Guarantor of a guaranty of all of the obligations of Maker under the Notes.

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, receipt of which hereby is acknowledged, Guarantor hereby agrees as follows:

 

1. Guaranty.  Guarantor hereby jointly and severally, unconditionally and irrevocably guarantees to Payee and its successors and assigns (a) the full and punctual payment (in lawful money of the United States and in immediately available funds), as and when due, of all principal, interest, attorneys’ fees, costs, expenses and other amounts which are or may become payable by Maker under the Notes (the “Maker Debt”) and (b) the full and
punctual performance of all other obligations of Maker under the Notes, Purchase Agreement (and exhibits thereto) and Employment Agreement.  The obligations of Maker under the Notes, including the payment obligations regarding the Maker Debt, are referred to in this Guaranty as the “Maker Obligations,” and the covenants and obligations of Guarantor that are described in the preceding sentence and elsewhere in this Guaranty are referred to in this Guaranty as “Guarantor’s Obligations.”

 

  

  

  

2. Certain Rights of Payee.  Guarantor authorizes Payee, without giving notice to Guarantor or obtaining Guarantor’s consent in its individual capacity and without affecting the liability of Guarantor, but subject to obtaining Maker’s written agreement to the extent its written agreement is required, from time to time to:  (a) renew, extend or increase the Maker Debt or any portion thereof; (b) declare all Maker Debt due and payable upon the occurrence of a default under the Notes; (c) make changes in the
dates on which the Maker Debt is payable; (d) otherwise modify the terms of the Maker Debt; (e) amend the Notes in any respect; (f) take and hold additional security for the Maker Debt and exchange, enforce, waive and release any such security; (g) apply such security and direct the order or manner of sale thereof as Payee in its discretion may determine; and (h) add any one or more guarantors of the Maker Debt.

 

3. Guarantor’s Waivers.  Guarantor waives: (a) any defense based upon any legal disability or other defense of Maker or any other guarantor or person or based upon Maker’s cessation for any reason of liability under any of the Notes; (b) any defense based upon any lack of authority of Maker’s officers or other agents acting or purporting to act on behalf of Maker or any defect in the formation of Maker; (c) any defense of Guarantor based upon Payee’s election of any remedy against Guarantor or Maker or both,
including, without limitation, any right to require Payee to proceed against Maker or another person or to proceed against any other security for the Maker Obligations; (d) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in any other respects more burdensome than that of a principal; (e) any right of subrogation, any right to enforce any remedy which Payee may have against Maker and any right to participate in, or benefit from, any security for the Maker Obligations now or hereafter held by Payee; (f) presentment, demand, protest and notice of any kind; (g) the benefit of any statute of limitations affecting the liability of Guarantor hereunder or the enforcement hereof; (h) any right to require Payee to pursue any other remedy in Payee’s power; and (i) any right to revoke this
Guaranty.  Guarantor waives any other circumstance or event, in existence now or in the future, that might otherwise constitute a legal or equitable defense to the enforcement of this Guaranty.

 

4. Guarantor’s Representations and Warranties.  Guarantor represents, warrants and agrees that: (a) Payee would not have entered into the Purchase Agreement or the Notes but for this Guaranty; (b) there are no conditions precedent to the effectiveness of this Guaranty; and (c) this Guaranty shall continue in full force and effect and shall be binding on Guarantor regardless of whether Payee obtains other collateral or any guaranties from others or takes any other action.  Guarantor consents to Maker’s
execution, delivery and performance of the Notes.

 

5. Subordination.  Guarantor subordinates all present and future indebtedness owing by Maker to Guarantor to the Maker Debt and other obligations under the Notes at any time owing by Maker to Payee.  Guarantor assigns to Payee all such indebtedness owed by Maker to Guarantor as security for this Guaranty.  Guarantor further agrees not to assign all or any part of such indebtedness prior to the full payment and performance of the Maker Obligations.

 

  

  

  

6. Nature of Guarantor’s Liability Under This Guaranty.  This is a guaranty of payment and performance and not merely of collection.  Guarantor’s obligations under this Guaranty are independent of Maker’s obligations to Payee under the Notes.  Payee may bring a separate action to enforce the provisions hereof against Guarantor without taking action against Maker or any collateral or joining Maker as a party to such action.  The obligations of Guarantor under this Guaranty constitute the full
recourse obligations of Guarantor and are enforceable against him and her to the full extent of their assets.

 

7. Event of Default; Payee’s Remedies.

 

(a)           Event of Default.  An “Event of Default” for purposes of this Guaranty means (1) Maker’s or Guarantor’s failure to pay when due any Maker Debt, (2) Maker’s or Guarantor’s failure to perform any other Maker Obligations when due or in accordance with the terms of such obligations, (3) Guarantor’s failure to perform any of Guarantor’s Obligations when due or in accordance with their terms, or (4) the failure to be true of any representation or
warranty of Guarantor that is contained in this Guaranty or any of the documents evidencing the Guarantor’s Obligations, if Guarantor does not remedy in full any such failure described in this sentence within ten days after receipt of written notice from Payee.

 

(b)           Remedies on an Event of Default.  Upon the occurrence of an Event of Default, Payee shall have the immediate right to file an action at law or equity against Guarantor and/or to take control of all or any part of any collateral, with or without judicial process, and without demand of performance, advertisement or notice to Guarantor, which are expressly waived by Guarantor; provided, however, that if any notice is required by law in connection with the exercise by Payee of its rights and remedies, Guarantor agrees that ten days' prior written notice is a reasonable time
and manner for notice.  Furthermore, Payee may exercise all of the other rights and remedies that are provided to it under this Guaranty.

 

 (d)           No Implied Waivers; Cumulative Remedies.  No delay or failure of Payee in exercising any right or remedy under this Guaranty shall operate as a waiver thereof, nor shall any single or partial exercise thereof or any abandonment or discontinuance of steps to enforce such a right or remedy preclude any further exercise thereof or of any other right or remedy.  The rights and remedies of Payee under this Guaranty are cumulative and not exclusive of any rights or remedies which it might otherwise have under applicable law.  Any waiver, permit,
consent or approval of any kind or character on the part of Payee of any Event of Default or any such waiver of any provision of this Guaranty must be in writing and shall be effective only to the extent specifically set forth in writing.  Guarantor acknowledges and agrees that the exercise by Payee of its rights under this Section 7 will not operate to release Guarantor from its personal obligation to pay the Maker Debt until full payment of any deficiency on the Maker Debt has been made in cash.  Furthermore, Guarantor acknowledges and agrees that Payee is not obligated to exercise any of the rights or remedies provided by this Section 7.

 

  

  

  

8. Bankruptcy.  This Guaranty shall continue in full force and effect in the event of any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar proceeding involving Maker or Guarantor, and this Guaranty shall continue in full force and effect notwithstanding any subsequent change in the ownership or assets of Maker.  In any bankruptcy of Maker or other proceeding involving Maker in which the filing of claims is required by law, Guarantor shall file all claims which Guarantor may have against Maker relating
to any indebtedness of Maker to Guarantor and shall assign to Payee all rights of Guarantor thereunder.  If Guarantor does not file any such claim, Payee, as attorney-in-fact for Guarantor, is hereby authorized to do so in the name of Guarantor or, in Payee’s discretion, to assign the claim to a nominee and to cause proof of claim to be filed in the name of Payee’s nominee.  The foregoing power of attorney is coupled with an interest and cannot be revoked.  Payee or its nominee shall have the right, in its reasonable discretion, to accept or reject any plan proposed in such proceeding and to take any other action which a party filing a claim is entitled to do.  In all such cases, whether in administration, bankruptcy or otherwise, the person or persons authorized to pay such claim shall pay to Payee the amount payable on such claim
and, to the full extent necessary for that purpose, Guarantor hereby assigns to Payee all of Guarantor’s rights to any such payments or distributions; provided, however, Guarantor’s obligations hereunder shall not be satisfied except to the extent that Payee receives cash by reason of any such payment or distribution.  If all or any portion of the Maker Debt and other obligations guaranteed hereunder is paid or performed, the obligations of Guarantor hereunder shall continue and shall remain in full force and effect in the event that all or any part of such payment or performance is avoided or recovered directly or indirectly from Payee as a preference, fraudulent transfer or otherwise under the Bankruptcy Code or other similar laws.

 

9. Successors and Assigns.  This Guaranty shall be binding upon, and shall inure to the benefit of, the respective successors and assigns of Guarantor and Payee, provided that the foregoing provision shall not be construed as permitting Guarantor to assign its obligations hereunder.

 

10. Attorneys’ Fees.  If any attorney is engaged by Payee to enforce or defend any provision of this Guaranty, with or without the filing of any legal action or proceeding, Guarantor shall pay to Payee, within ten days after demand therefor, all reasonable attorneys’ fees and costs incurred by Payee in connection therewith (including, without limitation, in any appellate or post-judgment proceedings), together with interest thereon from the date of such demand until paid at the rate of ten percent per annum (or, if lower, at
the maximum rate allowed by applicable law).

 

11. Rules of Construction.  The term “person” as used herein shall include any individual, corporation, trust or other legal entity of any kind whatsoever.  When the context and construction so require, all words used in the singular herein shall be deemed to have been used in the plural and vice versa.  All headings appearing in this Guaranty are for convenience only and shall be disregarded in construing this
Guaranty.  This Guaranty is the result of arms-length negotiations between Guarantor and Payee and their respective attorneys.  Accordingly, neither Guarantor nor Payee shall be deemed to be the author of this Guaranty, and this Guaranty shall not be construed against either party.

 

  

  

  

12. Notices.  All notices required or permitted by this Guaranty to be delivered to Guarantor or Payee shall be delivered in writing, by personal delivery, by overnight courier, by facsimile transmission or by registered or certified mail, return receipt requested, postage prepaid, to the address for such party set forth on the signature page of this Guaranty.  Any such notice shall be deemed given as follows:  (a) if personally delivered, when served; (b) if sent by overnight courier, on the first business day after
delivery to the courier; (c) if sent by facsimile, on the date of transmission if delivered on a business day (or, if not delivered on a business day, on the next business day after transmission); or (d) if sent by registered or certified mail, on the third day after deposit in the mail.

 

13. General Provisions.  If any provision of this Guaranty shall be determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, that portion shall be deemed severed from this Guaranty and the remaining parts shall remain in full force as though the invalid, illegal or unenforceable portion had never been part of this Guaranty.  This Guaranty constitutes the only agreement between Guarantor and Payee with respect to the subject matter hereof and supersedes all previous agreements with respect
thereto.  This Guaranty may be amended or terminated only by an agreement in writing executed by Guarantor and Payee.  This Guaranty may be executed in two counterparts, which together shall constitute but one and the same instrument.  This Guaranty may be executed by facsimile transmission or by e-mail transmission in PDF format.

 

14. Governing Law.  This Guaranty shall be governed by, and construed in accordance with, the internal laws of the State of Texas without giving affect to such state’s conflict-of-law principles.

 

15. Waiver of Jury Trial.  Guarantor and Payee each hereby irrevocably waives all rights that it may have under applicable law to a trial by jury of any issue or claim arising under this Guaranty in any action to enforce or interpret this Guaranty.

 

 

 

 

[Remainder of page left intentionally blank. Signature page follows.]

 

  

  

  

IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as of the date appearing on the first page of this Guaranty.

 

	  	

Coil Tubing Technology Holdings, Inc.

(A Nevada corporation)

 

By: /s/ Jerry Swinford

 

Its: President

 

Printed Name: Jerry Swinford

 

Address:

 

Attn: Jerry Swinford

19511 Wied Rd. Suite E

Spring, Texas 77388

Phone: (281) 651-0200

Fax: (  )

 

	
AGREED TO AND ACCEPTED:

 

/s/ Jerry Swinford

Jerry Swinford

 

Address:

 

______________________

______________________

______________________

Phone: ______________________

Fax: ______________________ex10-13.htm

Exhibit 10.13

 

CANCELLATION, RESIGNATION, REPAYMENT

AND ISSUANCE AGREEMENT

THIS CANCELLATION, RESIGNATION, REPAYMENT AND ISSUANCE AGREEMENT (this “Agreement”) is made as of the 16th day of November 2010 (the “Effective Date”), by and between Charles Wayne Tynon
(“Tynon”) and Coil Tubing Technology, Inc., a Nevada corporation (“Coil Tubing”) and its majority owned Nevada subsidiary, Coil Tubing Technology Holdings, Inc. (“Holdings”, and collectively with Coil Tubing, the “Company”), each a “Party” and collectively the
“Parties.”

PRELIMINARY STATEMENTS

WHEREAS, on May 28, 2009, Tynon loaned Coil Tubing an aggregate of $250,000 evidenced by a Line of Credit Promissory Note effective May 28, 2009, a copy of which is attached hereto as Exhibit A (the “Note”), which Note accrues interest at the rate of six percent (6%) per annum and is due and payable on June 1, 2011 (the “Maturity Date”) and is convertible
into shares of Coil Tubing’s common stock at the rate of $0.0033333 per share (the “Conversion Rights”);

WHEREAS, the repayment of the Note was secured by a security interest in substantially all of Coil Tubing’s assets, pursuant to and in connection with the Security Agreement dated May 28, 2009, a copy of which is attached hereto as Exhibit B (the “Security Agreement”);

WHEREAS, Tynon and Holdings previously entered into an Executive Compensation and Retention Agreement dated on or around June 16, 2009, to be effective as of June 1, 2009, a copy of which is attached hereto as Exhibit C (the “Compensation Agreement”), pursuant to which Tynon agreed to serve as President and Chief Executive Officer of Holdings;

WHEREAS, pursuant to the Compensation Agreement, Tynon was to receive cash consideration for services rendered pursuant to the terms of the Compensation Agreement, 750,000 shares of Holding’s common stock upon his entry into the Compensation Agreement (the “Sign-On Shares”), as well as shares of common stock at the end of each year that Tynon was employed under the Compensation Agreement equal to 5% of Holdings then issued and outstanding shares of common stock (as otherwise provided for in the Compensation
Agreement)(the “Yearly Shares”);

WHEREAS, Tynon is due 1,140,000 shares in connection with the Yearly Shares owed to Tynon as of December 31, 2009 (collectively with the Sign-On Shares, the “Shares”); and

WHEREAS, Coil Tubing desires to prepay the Note and discharge the Security Agreement, Tynon desires to cancel and exchange the Shares for shares of common stock of Coil Tubing, and Tynon desires to resign from Holdings and terminate the Compensation Agreement on the terms and conditions set forth below.

 NOW, THEREFORE, in consideration for the promises and pledges contained below and other good and valuable consideration, which consideration the Parties acknowledge receipt of, and the premises and the mutual covenants, agreements, and considerations herein contained, the Parties hereto agree as follows:

  

  

  

1.           Repayment of the Note.

In consideration for the Termination and Cancellation, Coil Tubing agrees to repay the Note prior to the Maturity Date (the “Repayment”) in connection with and pursuant to the following repayment schedule:

	
(a)  

	
$32,191.76 shall be paid by Coil Tubing to Tynon within five (5) Business Days from the Parties’ entry into this Agreement; and

 

	
(b)  

	
$32,880.84 shall be paid by Coil Tubing to Tynon on or before the date which is thirty (30) days from the Effective Date (the date of such payment being defined herein as the “Payment Date”).

Tynon also agrees to cancel and terminate any Conversion Rights effective as of the Effective Date of this Agreement.  “Business Day” means a day other than (i) a Saturday, (ii) a Sunday or (iii) a day on which commercial banks in the City of Houston, Texas are authorized or required to be closed for business. Tynon shall have no rights to the Security Agreement, which, along with the Note, shall automatically be terminated and all rights thereunder relinquished by Tynon upon the Payment Date.

2.           Resignation and Termination of Compensation Agreement.

In consideration for the Repayment and the issuance to Tynon of the Coil Tubing Shares (defined below), Tynon agrees to resign as President, Chief Executive Officer and from any other position whatsoever that Tynon holds with Holdings, to terminate the Compensation Agreement, and to waive, forgo and forever release Coil Tubing for any and all requirements thereunder (except as specifically provided below) and all compensation or consideration due to Tynon pursuant to the terms of the Compensation Agreement effective as of the Effective Date, whether in connection with the Yearly Shares, any of the obligations of Coil Tubing upon termination of the Compensation
Agreement (as provided in Section 6(b) of the Compensation Agreement) or otherwise, other than the payment of his annual salary (as provided for in the Compensation Agreement) through the Effective Date (collectively the “Termination”).  Tynon and Coil Tubing agree that the indemnification rights and confidential information requirements of the Compensation Agreement (as set forth in Sections 7 and 8 therein) shall survive the Termination.

3.           Cancellation of Shares.

(a)           In consideration for the Repayment and the issuance to Tynon of the Coil Tubing Shares (defined below), Tynon agrees, that effective upon the Effective Date, Tynon shall take whatever action necessary to cancel the Shares (provided that the Parties confirm that no certificates have ever been issued evidencing such Shares)(the “Cancellation”).  For the sake of clarity and in an abundance of caution, Tynon further agrees to waive, release and relinquish any and all rights to the Shares and hereby
confirms the Cancellation of such Shares effective as of the Effective Date.

  

  

  

(b)             The Parties agree that the Company’s Transfer Agent shall be able to rely on this Agreement and the terms and conditions herein to affect the Cancellation, as well as the other transactions contemplated by this Agreement.  Tynon agrees to supply the Transfer Agent with whatever documentation and confirmations that the Transfer Agent may reasonably request from time to time to affect the Cancellation.

(c)             Tynon agrees that he will have no rights to the Shares or any other Yearly Shares or other securities due to Tynon pursuant to the terms of the Compensation Agreement, or any rights in connection therewith subsequent to the Cancellation.

4.           Issuance of Coil Tubing Shares.

In consideration for the Termination and the Cancellation, Coil Tubing agrees to issue Tynon three million (3,000,000) restricted shares of Coil Tubing’s common stock (the “Coil Tubing Shares”), which shares shall be issued and delivered to Tynon within five (5) Business Days of the Effective Date.

5.           Consideration.

Each of the Parties agrees and confirms by signing below that they have received valid consideration in connection with this Agreement and/or will receive valid consideration pursuant to and in connection with the transactions contemplated herein.

6.           Representations and Warranties of Tynon.

Tynon hereby represents, confirms, acknowledges and warrants to Coil Tubing as follows:

	
(a)  

	
Tynon has such knowledge and experience in financial and business matters that Tynon is capable of evaluating the merits and risks of an investment in Coil Tubing and the suitability of the Coil Tubing Shares as an investment for Tynon;

	
(b)  

	
Due to Tynon’s position as Chief Executive Officer and President of Holdings (which is the operating subsidiary of Coil Tubing), Tynon has access to, is aware of and/or has reviewed similar information regarding Coil Tubing’s operations, financial position, results of operations, assets, liabilities, and risks associated with its operations, as would be found in a Registration Statement filing under the Securities Act of 1933, as amended (the “Act”);

	
(c)  

	
Tynon is acquiring the Coil Tubing Shares for his own account for long-term investment and not with a view toward resale, fractionalization or division, or distribution thereof, and he does not presently have any reason to anticipate any change in his circumstances, financial or otherwise, or particular occasion or event which would necessitate or require his sale or distribution of the Coil Tubing Shares;

	
(d)  

	
Tynon is able to bear the economic risk of the investment in the Coil Tubing Shares and Tynon has sufficient net worth to sustain a loss of Tynon’s entire investment in Coil Tubing without economic hardship if such a loss should occur;

  

  

  

	
(e)  

	
There are substantial restrictions on the transferability of the Coil Tubing Shares; the Coil Tubing Shares will not be, and Tynon has no right to require that the Coil Tubing Shares be registered under the Act; there may not be any public market for the Coil Tubing Shares; Tynon may not be able to use the provisions of Rule 144 of the Act with respect to the resale of the Coil Tubing Shares; and accordingly, Tynon may have to hold the Coil Tubing Shares indefinitely and it may not be possible for Tynon to liquidate Tynon’s Coil Tubing Shares. Tynon agrees that the Coil Tubing Shares shall not be sold, transferred, pledged or hypothecated unless such sale is exempt from registration under the Act. Tynon also acknowledges
that Tynon shall be responsible for compliance with all conditions on transfer imposed by any blue sky or securities law administrator and for any expenses incurred by Coil Tubing for legal or accounting services in connection with reviewing a proposed transfer; and

	
(f)  

	
Tynon has carefully considered and has, to the extent he believes such discussion is necessary, discussed with his professional, legal, tax and financial advisors, the suitability of an investment in the Coil Tubing Shares for his particular tax and financial situation and that Tynon and his advisers, if such advisors were deemed necessary, have determined that the Coil Tubing Shares are a suitable investment for him;

	
(g)  

	
Tynon understands and agrees that a legend will be placed on any certificate(s) or other document(s) evidencing the Coil Tubing Shares in substantially the following form:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES ACT.  THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS (I) THEY SHALL HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES ACT, OR (II) THE CORPORATION SHALL HAVE BEEN FURNISHED WITH AN OPINION OF COUNSEL, SATISFACTORY TO COUNSEL FOR THE CORPORATION, THAT REGISTRATION IS NOT REQUIRED UNDER ANY SUCH ACTS."

7.           Former Shell Coil Tubing Status.

(a)           Coil Tubing represents to Tynon that, pursuant to Rule 144 of the Act (“Rule 144”), a “shell company” is defined as a company that has no or nominal operations; and, either no or nominal assets; assets consisting solely of cash and cash equivalents; or assets consisting of any amount of cash and cash equivalents and nominal other assets.

  

  

  

(b)           As such, Coil Tubing acknowledges that it was once a “shell company” pursuant to Rule 144, and resales of its securities pursuant to Rule 144 may not be made until all of the following criteria set forth in Rule 144(i)(2) have been met: (1) Coil Tubing has ceased to be a shell company, (2) Coil Tubing is subject to Section 13 or 15(d) of the Coil Tubing Shares Exchange Act of 1934, as amended (the “Exchange
Act”), (3) Coil Tubing has filed all of its required periodic reports (other than 8-k’s) for the prior one year period, and (4) a period of at least twelve months has elapsed from the date “Form 10 like information” was filed with the Coil Tubing Shares and Exchange Commission (the “Commission”) reflecting Coil Tubing’s status as a non-shell company.

(c)    Because none of Coil Tubing’s securities can be resold pursuant to Rule 144, until at least a year after Coil Tubing has complied with Rule 144(i)(2), the Coil Tubing Shares will have no liquidity until and unless such Coil Tubing Shares are registered with the Commission, an exemption for sales can be relied upon other than Rule 144 and/or until a year after Coil Tubing has complied with the requirements of Rule 144(i)(2) as described above.  As a result, Tynon may never be able to sell the Coil Tubing Shares.

(d)           Coil Tubing has advised Tynon that it may be substantially more difficult or impossible for Coil Tubing to fund its operations and pay its consultants with Coil Tubing’s securities instead of cash.  Furthermore, Coil Tubing represents that it will be substantially more difficult for Coil Tubing to obtain funding through the sale of debt or equity securities unless Coil Tubing agrees to register such securities with the Commission, which could cause Coil Tubing to expend additional resources in the future.  Coil Tubing’s status as a former
“shell company” is highly likely to prevent Coil Tubing from raising any additional funds, engaging consultants, using Coil Tubing’s securities to pay for any acquisitions (although none are currently planned), which could cause the value of Coil Tubing’s securities, if any, to decline in value or become worthless.  Furthermore, as Coil Tubing may not ever comply with Rule 144(i)(2), Tynon may be forced to hold such Coil Tubing Shares indefinitely.

8.           Mutual Representations, Covenants and Warranties.

(a)    The Parties have all requisite power and authority, corporate or otherwise, to execute and deliver this Agreement and to consummate the transactions contemplated hereby and thereby. The Parties have duly and validly executed and delivered this Agreement and will, on or prior to the consummation of the transactions contemplated herein, execute, such other documents as may be required hereunder and, assuming the due authorization, execution and delivery of this Agreement by the Parties hereto and thereto, this Agreement constitutes, the legal, valid and binding obligation of the Parties
enforceable against each party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and general equitable principles.

(b)    The execution and delivery by the Parties of this Agreement and the consummation of the transactions contemplated hereby and thereby do not and shall not, by the lapse of time, the giving of notice or otherwise:  (a) constitute a violation of any law; or (b) constitute a breach or violation of any provision contained in the Articles of Incorporation or Bylaws, or such other document(s) regarding organization and/or management of the Parties, if applicable; or (c) constitute a breach of any provision contained in, or a default under, any governmental approval, any writ,
injunction, order, judgment or decree of any governmental authority or any contract to which either Party is a party or by which either Party is bound or affected.

  

  

  

	
9.

	
Further Assurances.

The Parties agree that, from time to time, each of them will take such other action and to execute, acknowledge and deliver such contracts, deeds, or other documents (a) as may be reasonably requested and necessary or appropriate to carry out the purposes and intent of this Agreement; and/or (b) to effect or evidence the Cancellation of the Shares.

10.           Construction.

The Parties acknowledge that each of them has had the benefit of legal counsel of its own choice and has been afforded an opportunity to review this Agreement with its legal counsel and that this Agreement shall be construed as if jointly drafted by the Parties hereto.

11.           Miscellaneous.

	
(a)  

	
Benefit and Burden.  This Agreement shall inure to the benefit of, and shall be binding upon, the Parties hereto and their successors and permitted assigns.

	
(b)  

	
Amendments and Waiver.  No amendment, modification, restatement or supplement of this Agreement shall be valid unless the same is in writing and signed by the Parties hereto.  No waiver of any provision of this Agreement shall be valid unless in writing and signed by the Party against whom that waiver is sought to be enforced.

	
(c)  

	
Construction.  In this Agreement words importing the singular number include the plural and vice versa; words importing the masculine gender include the feminine and neuter genders.

	
(d)  

	
Assignment.  All of the terms, provisions and conditions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the Parties hereto and their respective successors and permitted assigns.

	
(e)  

	
Severability.  Should any clause, sentence, paragraph, subsection, Section or Article of this Agreement be judicially declared to be invalid, unenforceable or void, such decision will not have the effect of invalidating or voiding the remainder of this Agreement, and the Parties agree that the part or parts of this Agreement so held to be invalid, unenforceable or void will be deemed to have been stricken herefrom by the Parties, and the remainder will have the same force and effectiveness as if such stricken part or parts had never been included herein.

	
(f)  

	
Applicable Law.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

  

  

  

	
(g)  

	
Entire Agreement.  This Agreement sets forth all of the promises, agreements, conditions, understandings, warranties and representations among the Parties with respect to the transactions contemplated hereby and thereby, and supersedes all prior agreements, arrangements and understandings between the Parties, whether written, oral or otherwise.

	
  

	
(i)

	
Effect of Facsimile and Photocopied Signatures. This Agreement may be executed in several counterparts, each of which is an original.  It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts.  A copy of this Agreement signed by one party and (a) faxed to another party or (b) scanned and emailed to another party, shall be deemed to have been executed and delivered by the signing party as though an original.  A photocopy or PDF of this Agreement shall be effective as an original for all purposes.

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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the day and year first above written to be effective as of the Effective Date.

	  	  
	  	
“TYNON”

	  	  
	  	
/s/ Charles Wayne Tynon

	  	
Charles Wayne Tynon

	  	  
	  	  
	  	  
	  	
“COIL TUBING”

	  	  
	  	
Coil Tubing Technology, Inc.

	  	  
	  	  
	  	
By: /s/ Jerry Swinford

	  	
Jerry Swinford

	  	
Chief Executive Officer

	  	  
	  	  
	  	  
	  	
“HOLDINGS”

	  	  
	  	
Coil Tubing Technology Holdings, Inc.

	  	  
	  	  
	  	
By: /s/ Jerry Swinford

	  	
Jerry Swinford

	  	
Executive Vice President

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