Document:

ex10-8.htm

Exhibit 10.8

 

AT-WILL EMPLOYMENT, NON-COMPETITION,

CONFIDENTIAL INFORMATION, INVENTION ASSIGNMENT

AND ARBITRATION AGREEMENT

As a condition of my employment with Coil Tubing Technology, Inc., a Nevada corporation, and/or any of its subsidiaries, affiliates, partners, successors or assigns (together the “Company”), and in consideration of my employment with the Company, ten dollars ($10) and other good and valuable consideration, which I confirm receipt of, and my receipt of the compensation now and hereafter paid to me by the Company, I (the “Employee”) agree to the following:

 

1. At-Will Employment.

 

I understand and acknowledge that while my employment with the Company is subject to the Executive Employment Agreement between myself and the Company, such employment can be terminated by the Company at any time (subject to the Executive Employment Agreement) and therefore, such employment is for an unspecified duration and constitutes "at-will" employment.  I also understand that any representation to the contrary is unauthorized and not valid unless obtained in writing and signed by an authorized corporate representative of the Company.  I acknowledge that this employment relationship may be terminated at
any time, with or without good cause or for any or no cause, at the option either of the Company or myself, with or without notice, subject to the terms and conditions of the Executive Employment Agreement.

 

2. Non-competition.  As a condition to, and in consideration of, the Company’s entering into the Executive Employment Agreement, and giving Employee access to certain confidential and proprietary information, which Employee recognizes is valuable to the Company and, therefore, its protection and maintenance constitutes a legitimate interest to be protected by the provisions of this Section 2 as applied to Employee and other employees similarly situated to Employee, Employee acknowledges and hereby agrees
as follows:

 

A. that Employee is and will be engaged in the business of the Company;

 

B. that during the period of Employee’s employment under the Executive Employment Agreement, Employee will, become familiar with the Company’s trade secrets and with other proprietary and confidential information concerning the Company;

 

C.  that the obligations of this Agreement are directly related to the employment and are necessary to protect the Company’s legitimate business interests; and that the Company’s need for the covenants set forth in this Agreement are based on the following:  (i) the substantial time, money and effort expended and to be expended by the Company in developing technical designs, technology, processes, materials, equipment, marketing plans and similar confidential information; (ii) the fact that Employee will be personally entrusted with the Company’s confidential and proprietary
information; (iii) the fact that, after having access to the Company’s technology and other confidential information, Employee could become a competitor of the Company; and (iv) the highly competitive nature of the Company’s industry, including the premium that competitors of the Company place on acquiring proprietary and competitive information; and

 

  

  

  

D. that for a period commencing on the Effective Date (as defined in the Executive Employment Agreement) and ending twelve (12) months following termination of Employee’s employment (subject to the provisions of the Executive Employment Agreement), Employee will not, directly or indirectly, serve as employee, agent, consultant, stockholder, director, co-partner or in any other individual or representative capacity,
own, operate, manage, control, engage in, invest in or participate in any manner in, act as consultant or advisor to, render services for (alone or in association with any person, firm, corporation or entity), or otherwise assist any person or entity that directly or indirectly engages or proposes to engage in (i) the same, or a substantially similar, type of business as that in which the Company engages; or (ii) the business of distribution or sale of (A) products and services distributed, sold or license by the Company at the time of termination; or (B) products and services proposed at the time of termination to be distributed, sold or licensed by the Company, anywhere within any of the counties within Texas which are encompassed by and/or which any part of would lie within the area
created by drawing a line from the northern most point of McLennan County, Texas, directly east to the Texas/Louisiana border, following the Texas border south to the southernmost tip of Texas, and from the straight line created by drawing a line from the southernmost tip of Texas directly to the southwestern tip of Webb County, Texas and from the northern most tip of Tom Green County, Texas and from the northernmost tip of Tom Green County to the northernmost tip of McLennan County  (collectively, the “Territory”); provided, however

 

E. that nothing contained herein shall be construed to prevent Employee from investing in the stock or securities of any competing corporation listed on any recognized national securities exchange or traded in the over the counter market in the United States, but only if (i) such investment is of a totally passive nature and does not involve Employee devoting time to the management or operations of such corporation and Employee is not otherwise involved in the business of such corporation; and if (ii) Employee and his associates (as such term is defined in Regulation 14(A) promulgated under the Securities
Exchange Act of 1934, as amended, as in effect on the Effective Date), collectively, do not own, directly or indirectly, more than an aggregate of two percent (2%) of the outstanding stock or securities of such corporation.

 

F. The Employee acknowledges that the foregoing restrictions, as well as the duration and the territorial scope thereof as set above, are under all of the circumstances reasonable and necessary for the protection of the Company and its business.

 

3. Confidential Information.

 

A. Company Information.  I agree at all times during the term of my employment and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, firm or corporation without written authorization of the Board of Directors of the Company, any Confidential Information of the Company, except under a non-disclosure agreement duly authorized and executed by the Company.  I understand that
“Confidential Information” means any non-public information that relates to the actual or anticipated business or research and development of the Company, technical data, trade secrets or know-how, including, but not limited to, research, product plans or other information regarding the Company’s products or services and markets therefor, customer lists and customers (including, but not limited to, customers of the Company on whom I called or with whom I became acquainted during the term of my employment), software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances or other business information.  I further understand that Confidential Information does not include any of the
foregoing items which have become publicly known and made generally available through no wrongful act of mine or of others who were under confidentiality obligations as to the item or items involved or improvements or new versions thereof.

 

  

  

  

B. Former Employer Information.  I agree that I will not, during my employment with the Company, improperly use or disclose any proprietary information or trade secrets of any former or concurrent employer or other person or entity and that I will not bring onto the premises of the Company any unpublished document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such employer, person or entity.

 

C. Third Party Information.  I recognize that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes.  I agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out my work for the
Company consistent with the Company’s agreement with such third party.

 

4. Inventions.

 

A. Inventions Retained and Licensed.  I have attached hereto, as Exhibit A, a list describing all inventions, original works of authorship, developments, improvements, and trade secrets which were made by me prior to my employment with the Company (collectively referred to as “Prior Inventions”), which are being purchased by the Company pursuant to an Intellectual Property
Purchase Agreement dated on or around the date hereof, which relate to the Company’s business, products or research and development, and which are not assigned to the Company hereunder, but are subject to the Intellectual Property Purchase Agreement.  If in the course of my employment with the Company, I incorporate into a Company product, process or service a Prior Invention owned by me or in which I have an interest, I hereby grant to the Company a nonexclusive, royalty-free, fully paid-up, irrevocable, perpetual, worldwide license to make, have made, modify, use and sell such Prior Invention as part of or in connection with such product, process or service, and to practice any method related thereto.

 

B. Assignment of Inventions.  I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my right, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or
reduce to practice, or cause to be conceived or developed or reduced to practice, during the entire period of time I am in the employ of the Company (whether before or after the execution of this Agreement) (collectively referred to as “Inventions”).  I further acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of and during the period of my employment with the Company (whether before or after the execution of this Agreement) and which are protectible by copyright are “works made for hire,” as that term is defined in the United States Copyright Act.  Employee understands that this means that the Company
will have the right to undertake any of the actions set forth in section 106 of the United States Copyright Act (17 U.S.C. § 106) with respect to such copyrightable works prepared by Employee within the scope of Employee’s employment.  Employee understands that this includes, without limitation, the right to sell, license, use, reproduce and have reproduced, create derivative works of, distribute, display, transmit and otherwise commercially exploit such copyrightable works by all means without further compensating the Employee.  I understand and agree that the decision whether or not to commercialize or market any invention developed by me solely or jointly with others is within the Company’s sole discretion and for the Company’s sole benefit and that no royalty will be due to me as a result of the Company’s efforts to commercialize or
market any such invention.

 

  

  

  

C. Assignment of Other Rights.  In addition to the foregoing assignment of Inventions to the Company, Employee hereby irrevocably transfers and assigns to the Company: (i) all worldwide patents, patent applications, copyrights, mask works, trade secrets and other intellectual property rights in any Assigned Inventions; and (ii) any and all “Moral Rights” (as defined below) that Employee may have in or with respect to any
Inventions.  Employee also hereby forever waives and agrees never to assert any and all Moral Rights Employee may have in or with respect to any Inventions, even after termination of Employee’s work on behalf of the Company.  “Moral Rights” means any rights to claim authorship of any Inventions, to object to or prevent the modification of any Inventions, or to withdraw from circulation or control the publication or distribution of any Inventions, and any similar right, existing under judicial or statutory law of any country in the world, or under any treaty, regardless of whether or not such right is denominated or generally referred to as a “moral right”.

 

D. Inventions Assigned to the United States.  I agree to assign to the United States government all my right, title, and interest in and to any and all Inventions whenever such full title is required to be in the United States by a contract between the Company and the United States or any of its agencies.

 

E. Maintenance of Records.  I agree to keep and maintain adequate and current written records of all Inventions made by me (solely or jointly with others) during the term of my employment with the Company.  The records will be in the form of notes, sketches, drawings, and any other format that may be specified by the Company.  The records will be available to and remain the sole property of the Company at all times.

 

F. Patent and Copyright Registrations.  I agree to assist the Company, or its designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall
deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto.  I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Agreement.  If the Company is unable because of my mental or physical incapacity or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above, then I hereby irrevocably designate and appoint
the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by me.

 

  

  

  

5. Conflicting Employment.  I agree that, during the term of my employment with the Company, I will not engage in any other employment, occupation or consulting directly related to the business in which the Company is now involved or becomes involved during the term of my employment, nor will I engage in any other activities that conflict with my obligations to the Company.

 

6. Returning Company Documents.  I agree that, at the time of leaving the employ of the Company, I will deliver to the Company (and will not keep in my possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items developed by me pursuant to my employment with the Company or otherwise belonging to the Company, its successors
or assigns, including, without limitation, those records maintained pursuant to Section 4.E.  In the event of the termination of my employment, I agree to sign and deliver the “Termination Certification” attached hereto as Exhibit B.

 

7. Notification of New Employer.  In the event that I leave the employ of the Company, I hereby grant consent to notification by the Company to my new employer about my rights and obligations under this Agreement.

 

8. Solicitation of Employees.  I agree that for a period of twelve (12) months immediately following the termination of my relationship with the Company for any reason, whether with or without cause, I will not either directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees to leave their employment or the Company’s customers to remove or reduce their business with the Company, or take away such employees or customers, or attempt to solicit, induce, recruit, encourage or take away
employees or customers of the Company, either for myself or for any other person or entity.

 

9. Conflict of Interest Guidelines.  I agree to diligently adhere to the Conflict of Interest Guidelines attached as Exhibit C hereto.

 

  

  

  

10. Representations.  I agree to execute any proper oath or verify any proper document required to carry out the terms of this Agreement.  I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to my employment by the Company.  I hereby represent and warrant that I have not entered into, and I will not enter into, any oral or written agreement in conflict herewith.

 

11. Arbitration and Equitable Relief.

 

A. Arbitration.  In consideration of my employment with the Company, its promise to arbitrate all employment-related disputes and my receipt of the compensation, pay raises and other benefits paid to me by the Company, at present and in the future, I agree that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, stockholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from my employment with the Company or
the termination of my employment with the Company, including any breach of this Agreement, will be subject to binding arbitration, to the fullest extent permitted by law.  Disputes which I agree to arbitrate, and thereby agree to waive any right to a trial by jury, include any statutory claims under state or federal law, including, but not limited to, claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, claims of harassment, discrimination or wrongful termination and any statutory claims. I further understand that this agreement to arbitrate also applies to any disputes that the Company may have with me.

 

B. Procedure.  I agree that any arbitration will be administered by the American Arbitration Association (“AAA”) and that the neutral arbitrator will be selected in a manner consistent with its national rules for the resolution of employment disputes. I agree that the arbitrator will have the power to decide any motions brought by any party to the arbitration, including motions for summary judgment and/or adjudication and motions to dismiss and
demurrers, prior to any arbitration hearing.  I also agree that the arbitrator will have the power to award any remedies, including attorneys' fees and costs, available under applicable law.  I understand the Company will pay for any administrative or hearing fees charged by the arbitrator or AAA except that I will pay the first $200.00 of any filing fees associated with any arbitration I initiate. I agree that the arbitrator will administer and conduct any arbitration in a manner consistent with AAA's national rules, to the extent that the AAA's national rules for the resolution of employment disputes do not conflict with applicable law.  I agree that the decision of the arbitrator will be in writing.

 

C. Remedy.  Except as provided by law and this Agreement, arbitration will be the sole, exclusive and final remedy for any dispute between me and the Company.  Accordingly, except as provided for by law and this Agreement, neither I nor the Company will be permitted to pursue court action regarding claims that are subject to arbitration.  Notwithstanding, the arbitrator will not have the authority to disregard or refuse to enforce any lawful Company policy, and the arbitrator will not order or require the Company to
adopt a policy not otherwise required by law which the Company has not adopted.

 

  

  

  

D. Availability of Injunctive Relief.  In addition to any right under applicable law that the Company or I may have to petition a court of competent jurisdiction for provisional relief, I agree that any party may also petition the arbitrator for provisional injunctive relief where either party alleges or claims a violation of the employment, confidential information, invention assignment agreement between me and the Company or any other agreement regarding trade secrets, confidential information, or non-solicitation.  I
understand that any breach or threatened breach of such an agreement will cause irreparable injury and that money damages will not provide an adequate remedy therefor and both parties hereby consent to the issuance of an injunction.  In the event either party seeks injunctive relief, the prevailing party will be entitled to recover reasonable costs and attorneys' fees.

 

E. Administrative Relief.  I understand that this Agreement does not prohibit me from pursuing an administrative claim with a local, state or federal administrative body.  This Agreement does, however, preclude me from pursuing court action regarding any such claim.

 

F. Voluntary Nature of Agreement.  I acknowledge and agree that I am executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else.  I further acknowledge and agree that I have carefully read this Agreement and that I have asked any questions needed for me to understand the terms, consequences and binding effect of this Agreement and fully understand it, including that I AM WAIVING MY RIGHT TO A JURY
TRIAL.  Finally, I agree that I have been provided an opportunity to seek the advice of an attorney of my choice before signing this Agreement.

 

12. General Provisions.

 

A. Governing Law, Consent to Personal Jurisdiction.  This Agreement will be governed by the laws of the State of Texas.  I hereby expressly consent to the personal jurisdiction of the state and federal courts located in Texas for any lawsuit filed there against me by the Company arising from or relating to this Agreement.

 

B. Entire Agreement.  This Agreement, along with the Executive Employment Agreement and Intellectual Property Purchase Agreement, sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and supersedes all prior discussions or representations between us including, but not limited to, any representations made during my interview(s) or relocation negotiations, whether written or oral.  No modification of or amendment to this Agreement, nor any waiver of any rights under
this Agreement, will be effective unless in writing signed by an authorized officer of the Company (other than me) and me.  Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.  This Agreement prevails and supersedes in the event there is any inconsistency between this Agreement and any other offer letter, unless the offer letter expressly provides otherwise.

 

C. Severability.  If one or more of the provisions in this Agreement are deemed void by law, then the remaining provisions will continue in full force and effect.

 

  

  

  

D. Successors and Assigns.  This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.

 

	
Date: 11/30/10

	 	
Signature

	 

 

	
  

	
/s/Jason Swinford

Jason Swinford

	
  

	
Name of Employee (typed or printed)

 

 

 

 

 

  

  

  

EXHIBIT A

 

LIST OF PRIOR INVENTIONS

 

AND ORIGINAL WORKS OF AUTHORSHIP

 

	

 

Title

 

	

 

Date

 

	

 

Identifying Number

or Brief Description

 

	  	  	  
	● 2 7/8 Motor Head Assembly	Complete	Generic Un-Patented
	● 2 1/8 Motor Head Assembly	Complete	Generic Un-Patented
	● 1 11/16 Motor Head Assembly	Complete	Generic Un-Patented
	● 1 1/4 Coil Tubing Connector	Complete	Generic Un-Patented
	● 1 1/2 Coil Tubing Connector	Complete	Generic Un-Patented
	● 1 1/4 Slip Connectors	  	Generic Un-Patented
	● 1 1/2 Slip Connectors	  	Generic Un-Patented
	● 1 3/4 Slip Connectors	  	Generic Un-Patented
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  

               ü                No inventions or improvements

 

                                Additional Sheets Attached

 

Signature of Employee: /s/ Jason Swinford

 

Print Name of Employee: Jason Swinford

 

Date: 11/18/10

  

  

  

EXHIBIT B

 

 

TERMINATION CERTIFICATION

 

This is to certify that I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items belonging to Coil Tubing Technology, Inc., a Nevada corporation, and/or its subsidiary, affiliate, partner, successor or assigns (together, the “Company”).

 

I further certify that I have complied with all the terms of the Company’s At Will Employment, Non-Competition, Confidential Information, Invention Assignment And Arbitration Agreement  signed by me, including the reporting of any inventions and original works of authorship (as defined therein), conceived or made by me (solely or jointly with others) covered by that agreement.

 

I further agree that, in compliance with the At-Will Employment, Non-Competition, Confidential Information, Invention Assignment, and Arbitration Agreement, I will preserve as confidential all trade secrets, confidential knowledge, data or other proprietary information relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, data bases, other original works of authorship, customer lists, business plans, financial information or other subject matter pertaining to any business of the Company or any of its employees, clients, consultants or licensees.

 

I agree that for a period of twelve (12) months immediately following the termination of my relationship with the Company for any reason, whether with or without cause, I shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees to leave their employment or customers to remove or reduce their business with, or take away such employees or customers, or attempt to solicit, induce, recruit, encourage or take away employees or customers of the Company, either for myself or for any other person or entity.

 

 

	
Date:                                         

	 	
Signature

	 

 

	
  

	
Jason Swinford

	
  

	
Name of Employee (typed or printed)

 

 

  

  

  

EXHIBIT C

 

CONFLICT OF INTEREST GUIDELINES

 

It is the policy of Coil Tubing Technology, Inc., a Nevada corporation (the “Company”) to conduct its affairs in strict compliance with the letter and spirit of the law and to adhere to the highest principles of business ethics.  Accordingly, all officers, employees and independent contractors must avoid activities which are in conflict, or give the appearance of being in conflict, with these principles and with the interests of the Company.  The following are potentially compromising situations which must be avoided.  Any exceptions must be reported to an authorized officer of the Company
(other than me) and written approval for continuation must be obtained.

 

1. Revealing confidential information to outsiders or misusing confidential information.  Unauthorized divulging of information is a violation of this policy whether or not for personal gain and whether or not harm to the Company is intended.  (The At Will Employment, Non-Competition, Confidential Information, Invention Assignment And Arbitration Agreement  elaborates on this principle and is binding).

 

2. Accepting or offering substantial gifts, excessive entertainment, favors or payments which may be deemed to constitute undue influence or otherwise be improper or embarrassing to the Company.

 

3. Participating in civic or professional organizations that might involve divulging confidential information of the Company.

 

4. Initiating or approving personnel actions affecting reward or punishment of employees or applicants where there is a family relationship or is or appears to be a personal or social involvement.

 

5. Initiating or approving any form of personal or social harassment of employees.

 

6. Investing or holding outside directorship in suppliers, customers, or competing companies, including financial speculations, where such investment or directorship might influence in any manner a decision or course of action of the Company.

 

7. Borrowing from or lending to employees, customers or suppliers.

 

8. Acquiring real estate of interest to the Company.

 

9. Improperly using or disclosing to the Company any proprietary information or trade secrets of any former or concurrent employer or other person or entity with whom obligations of confidentiality exist.

 

10. Unlawfully discussing prices, costs, customers, sales or markets with competing companies or their employees.

 

  

  

  

11. Making any unlawful agreement with distributors with respect to prices.

 

12. Improperly using or authorizing the use of any inventions which are the subject of patent claims of any other person or entity.

 

13. Engaging in any conduct which is not in the best interest of the Company.

 

Each officer, employee and independent contractor must take every necessary action to ensure compliance with these guidelines and to bring problem areas to the attention of higher management for review.  Violations of this conflict of interest policy may result in discharge without warning.ex10-9.htm

Exhibit 10.9

 

INTELLECTUAL PROPERTY PURCHASE AGREEMENT

 

This Intellectual Property Purchase Agreement (this “Agreement”) is made and entered into on the 30th day of November, 2010, by and among Jerry Swinford, an individual (the “Seller”), and Coil Tubing Technology, Inc., a Nevada
corporation (the “Purchaser”), each a “Party” and collectively the “Parties.”

W I T N E S S E T H:

WHEREAS, the Seller desires to sell to the Purchaser certain assets of Seller, as described in greater detail on Exhibit A, attached hereto (the “Assets”) and Purchaser desires to purchase and acquire such Assets from the Seller subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the respective representations and warranties hereinafter set forth and of the mutual covenants and agreements contained herein, the Parties hereto agree as follows:

Construction of Terms. As used in this Agreement, the terms “herein,” “herewith,” “hereof” and “hereunder” are references to this Agreement, taken as a whole; the term
“includes” or “including” shall mean “including, without limitation;” the word “or” is not exclusive; and references to a “Section,” “subsection,” “clause,”
“Exhibit,” “Appendix,” “Schedule,” “Annex” or “Attachment” shall mean a Section, subsection, clause, Exhibit, Appendix, Schedule, Annex or Attachment of this Agreement, as the case may be, unless in any such case the context requires otherwise. Exhibits, Appendices, Schedules, Annexes or Attachments to any document shall be deemed incorporated by reference in such document. All references to or definitions of any
agreement, instrument or other document (a) shall include all documents, instruments or agreements issued or executed in replacement thereof, and (b) except as otherwise expressly provided, shall mean such agreement, instrument or document, or replacement or predecessor thereto, as modified, amended, supplemented and restated through the date as of which such reference is made. All references to a law, regulation or ordinance include any amendment or modification thereof. The singular shall include the plural and the masculine shall include the feminine, and vice versa. References to “days” shall mean calendar days.

 

ARTICLE I

 SALE AND PURCHASE OF ASSETS

 

1.1 Sale and Purchase.  Subject to the terms and conditions contained herein, Seller hereby agrees to sell, transfer, assign, convey and deliver to Purchaser, and Purchaser agrees to accept from Seller, all of Seller’s right, title and interest in and to the Assets, as set forth in greater detail on Exhibit A, attached hereto, free and clear of any liens, pledges, security interests, claims or encumbrances of any kind, except for those specifically assumed
hereunder.  Purchaser shall also assume any and all liabilities, costs, expenses, responsibilities and payments associated with, incurred by Seller in connection or which affect the Assets (the “Assumed Liabilities”), which Assumed Liabilities shall become the sole responsibility of Purchaser following the Closing and the consummation of the transactions contemplated herein.  The Parties agree that the components of the Assets shall have the values assigned to such components as set forth on Exhibit A.  Any and all assets or intellectual property of Seller not included in the Assets shall remain the sole and exclusive property of Seller.

 

  

  

  

1.2 The Purchase Price.

 

(a) The total purchase price for the Assets (the “Purchase Price”) shall be $1,200,000, which shall be payable to the Seller by the Purchaser at the Closing as follows:

 

(1) $25,000 upon the Parties execution of this Agreement (the “Cash Payment”);

 

(2) The Purchaser shall issue Seller a Secured Promissory Note in the amount of $475,000 payable on January 25, 2011, in the form of Exhibit B, attached hereto (the “First Note”); and

 

(3) The Purchaser shall issue Seller a Secured Promissory Note in the amount of $700,000 payable in fifty-four monthly payments, beginning on February 15, 2011 (as set forth in greater detail in such note), in the form of Exhibit C, attached hereto (the “Second Note” and together with the First Note, the “Notes”).

 

(4) The First Note and the Second Note shall be guarantied by Coil Tubing Technology Holdings, Inc. (“Holdings”), the Purchaser’s majority-owned subsidiary, pursuant to the Guaranty, attached hereto as Exhibit D (the “Guaranty”).

 

1.3 Grant of a Security Interest.  As security for (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 Purchaser under the Notes and (b) the full and punctual performance of all other obligations of Purchaser under the Notes, Purchaser hereby grants to Seller a continuing and first-priority security interest (the
“Security Interest”) in the following (collectively, the “Collateral”): all right, title and interest of Purchaser in and to the Assets; all cash and other consideration paid or payable with respect to the Assets; all of Purchaser’s books and records pertaining to the foregoing; and all proceeds from sales, transfers or other dispositions of the foregoing, as described in greater detail in the Notes.

1.4 Change of Control and Payment of Notes.  In the event the Purchaser issues, sells, exchanges or transfers 25% or more of the Purchaser’s then outstanding shares of common stock or voting securities in any Change of Control transaction (each a “Change in Control Transaction”), the Purchaser agrees to use any and all of such funds received in connection with such Change in Control Transaction to pay down amounts owed to Seller, (i)
first under the First Note, if any amount of the First Note is outstanding; and (ii) second under the Second Note.

  

  

  

(a) A “Change in Control” for purposes of this Agreement shall mean any of the following events:

(1) any person (as that term is used in Rule 13d-5 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or group (as that term is used in Sections 3(a)(9) and 13(d)(3) of the Exchange Act) who is not, as of the date of this Agreement, the beneficial owner of securities of the Purchaser representing 25% or more of the combined voting power or common stock of the Purchaser's then outstanding securities becomes the beneficial owner of securities of the Purchaser representing 25% or more of the
combined voting power or common stock of the Purchaser's then outstanding securities;

(2) the shareholders of the Purchaser approve a merger or consolidation of the Purchaser with any other entity, other than (i) a merger or consolidation which would result in the voting securities of the Purchaser outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 75% of the combined voting power of the voting securities of the Purchaser or such surviving entity outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a
recapitalization of the Purchaser (or similar transaction) in which no person who did not own more than 50% of the combined voting power of the Purchaser's securities acquires no more than 50% of the combined voting power of the Purchaser's then outstanding securities; or

(3) the shareholders of the Purchaser approve a plan of complete liquidation of the Purchaser or an agreement for the safe or disposition by the Purchaser of all or substantially all of the Purchaser's assets.

 

ARTICLE II 

 CLOSING; CONDITIONS TO CLOSING; DELIVERIES

 

2.1  Closing.  The closing of this transaction (the “Closing”) shall be held on November
30, 2010, at the offices of Purchaser or at such other time and place upon which the Parties shall mutually agree.

 

2.2 Conditions to Purchaser’s Obligation. Purchaser’s obligation hereunder to purchase and pay for the Assets is subject to the satisfaction, on or before the Closing, of the following conditions, any of which may be waived, in whole or in part, by Purchaser in its sole discretion, and Seller and its officers and Directors shall use their best efforts to cause such conditions to be fulfilled:

 

(a) Representations and Warranties Correct; Performance.  The representations and warranties of Seller contained in this Agreement (including the exhibits and schedules hereto) shall be true, complete and accurate when made and on and as of the date hereof.  Seller shall have duly and properly performed, complied with and observed its covenants, agreements and obligations contained in this Agreement to be performed, complied with and observed on or before the Closing.

 

  

  

  

(b) Purchase Permitted by Applicable Laws.  The purchase of the Assets to be acquired by Purchaser hereunder shall not be prohibited by any applicable law or governmental regulation and shall not subject Purchaser or its affiliates to any tax (not otherwise expressly assumed by Purchaser under this Agreement), penalty, liability or other onerous condition under or pursuant to any applicable law or governmental regulation.

 

(c) Proceedings; Receipt of Documents.  All corporate and other proceedings taken or required to be taken by Seller in connection with the transactions contemplated hereby and all documents incident thereto shall have been taken and shall be reasonably satisfactory in form and substance to Purchaser, and Purchaser shall have received all such information and such counterpart originals or certified or other copies of such documents as Purchaser may reasonably request.

 

(d) Seller’s Closing Deliveries.  Seller shall have delivered, or caused to be delivered, to Purchaser the following, unless the delivery of which has been (i) waived by Purchaser; or (ii) the delivery of which will be made by the Seller subsequent to Closing:

 

(1) documents evidencing title to any Assets for which title or ownership documents exist and any other documentation as may be reasonably requested by Purchaser evidencing the purchase by Purchaser of the Assets;

 

(2) a bill of sale, an assignment of patents, and other title documentation relating to the transfer of the Assets;

 

(3) documents, if any, evidencing the rights to any intellectual property rights associated with the Assets;

 

(4) an executed copy of the Executive Employment Agreement between the Purchaser and Seller (the “Employment Agreement”), on mutually agreeable terms;

 

(5) an executed copy of the First Note;

 

(6) an executed copy of the Second Note;

 

(7) an executed copy of the Guaranty;

 

(8) an executed copy of the Voting Agreement by and between the Seller and Herbert C. Pohlmann, on mutually agreeable terms (the “Voting Agreement”); and

 

(9) all materials and/or documents listed with the Assets, as attached hereto as Exhibit A, if any;

 

  

  

  

(e) No Adverse Decision.  There shall be no action, suit, investigation or proceeding pending or threatened by or before any court, arbitrator or administrative or governmental body which seeks to restrain, enjoin, prevent the consummation of or otherwise affect the transactions contemplated by this Agreement or questions the validity or legality of any such transactions or seeks to recover damages or to obtain other relief in connection with any such transactions.

 

(f) Approvals and Consents.  Seller shall have duly obtained all authorizations, consents, rulings, approvals, licenses, franchises, permits and certificates, or exemptions therefrom, by or of all federal, state and local governmental authorities and non-governmental administrative or regulatory agencies having jurisdiction over the Parties hereto, this Agreement, the Assets, or the transactions contemplated hereby.

 

2.3 Conditions to the Obligation of Seller.  The obligation of Seller to consummate the transactions contemplated hereby is subject to the fulfillment of the following conditions on or prior to the Closing, any of which may be waived, in whole or in part, by Seller in its sole discretion, and Purchaser shall use its best efforts to cause such conditions to be fulfilled:

 

(a) Representations and Warranties Correct; Performance. The representations and warranties of Purchaser in this Agreement shall be true, complete and accurate when made on and as of the Closing.  Purchaser shall have duly and properly performed, complied with and observed each of its covenants, agreements and obligations contained in this Agreement to be performed, complied with and observed on or before the Closing.  Purchaser shall have delivered to Seller a certificate signed by Purchaser, dated the date hereof, to such
effect.

 

(b) Purchase Permitted by Applicable Laws.  The purchase of and payment for the Assets to be delivered by Seller hereunder shall not be prohibited by any applicable law or governmental regulation.

 

(c) Proceedings; Receipt of Documents.  All corporate and other proceedings taken or required to be taken by Purchaser in connection with the transactions contemplated hereby and all documents incident thereto shall have been taken and shall be reasonably satisfactory in form and substance to Seller, and Seller shall have received all of such information and such counterpart originals or certified or other copies of such documents as Seller may reasonably request.

 

(d) Purchaser’s Closing Deliveries.  Purchaser shall have delivered, or caused to be delivered, to Seller the following:

 

(1) resolutions of the Purchaser’s Board of Directors approving this Agreement and the transactions contemplated herein;

 

(2) the Cash Payment;

 

(3) an executed copy of the First Note;

 

  

  

  

(4) an executed copy of the Second Note;

 

(5) an executed copy of the Guaranty;

 

(6) an executed copy of the Subordination Agreement attached hereto as Exhibit E;

 

(7) resolutions of Holding’s Board of Directors approving Holding’s entry into and the transactions contemplated by the Guaranty;

 

(8) an executed copy of the Employment Agreement; and

 

(9) an executed copy of the Voting Agreement.

 

(e) No Adverse Decision.  There shall be no action, suit, investigation or proceeding pending or threatened by or before any court, arbitrator or administrative or governmental body which seeks to restrain, enjoin, prevent the consummation of or otherwise affect the transactions contemplated by this Agreement or questions the validity or legality of any such transactions or seeks to recover damages or to obtain other relief in connection with any such transactions.

 

ARTICLE III

SELLER’S REPRESENTATIONS AND WARRANTIES

 

Seller represents and warrants to Purchaser as follows:

 

3.1 Authority. Seller has full authority to execute and to perform this Agreement in accordance with its terms and the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby does not and will not result in a breach, violation or default or give rise to an event which with the giving of notice or after the passage of time, or both, would result in a breach, violation or default of any of the terms or provisions of any indenture,
agreement, judgment, decree or other instrument or restriction to which Seller is a party or by which Seller or any of the Assets may be bound or affected.

 

3.2 Title to Assets.

 

(a)  Seller has good and marketable title to all of the Assets and the full right and power to transfer the Assets.  The Assets are owned by Seller free and clear of all mortgages, pledges, liens, security interests, encumbrances, conditional sale agreements, charges, claims and restrictions of any kind and nature known to Seller, other than what has previously been disclosed to Purchaser; and Purchaser will acquire good and valid title to the Assets free and clear of all mortgages, pledges, liens, security interests, encumbrances, conditional sale agreements, charges, claims and restrictions of
any kind and nature known to Seller, other than what has previously been disclosed to Purchaser; and

 

  

  

  

(b) Seller has no present or future obligation or requirement to compensate any person with respect to any of the Assets, whether by the payment of royalties or not, or whether by reason of the ownership, use, license, lease, sale or any commercial use or any disposition whatsoever of any of the Assets.

 

3.3 Compliance With Law.  Seller is not in violation of any laws, governmental orders, rules or regulations, whether federal, state or local, to which it or any of its assets or properties are subject, which may have a material adverse affect as to the Assets.

 

3.4 Absence of Changes.

 

(a) At the time of Closing there will not be any obligation or liability for the payment of money (whether absolute, accrued, contingent or otherwise and whether due or to become due) created or incurred, any transaction, contract or commitment entered into by Seller or any obligation or liability (whether absolute, accrued, contingent or otherwise and whether due or to become due) created or incurred, or any transaction, contract or commitment entered into by Seller affecting the Assets other than those specifically agreed to in writing by the Purchaser and/or which are part of the Assumed Liabilities;
and

 

(b)   No lien of record or guarantee, affecting the Assets (each a “Lien”), if any, will remain at Closing.

 

3.5 Litigation.  To the knowledge of Seller there are no actions, suits, proceedings or investigations (including any purportedly on behalf of Seller) pending or, to the knowledge of Seller, threatened against or affecting the Assets; Seller is not operating under, subject to, in violation of or in default with respect to, any judgment, order, writ, injunction or decree of any court or federal, state, municipal or other governmental department, commission, board, agency or instrumentality domestic or foreign in connection with the
Assets.  No inquiries have been made directly to Seller by any governmental agency which might form the basis of any such action, suit, proceeding or investigation, or which might require Seller to undertake a course of action which would involve any expense in connection with the Assets.

 

3.6 Taxes.  Seller has filed, or caused to be filed, with the appropriate U.S. federal, state, local and foreign governmental agencies all required tax and information returns.  Seller does not have any liability, contingent or otherwise, for any taxes, excise taxes, assessments, charges, penalties or interest, including, without limitation, any which may arise as a result of the this Agreement (but not including sales taxes, if any, payable as a result of the sale of the Assets as contemplated by this Agreement), other than
amounts adequately reserved for.  Seller has not received directly or indirectly notice of, nor is it otherwise aware of any tax audit or examination; Seller is not a party directly or indirectly to any action or proceeding by any governmental authority for assessment or collection of taxes, excise taxes, charges, penalties or interest, nor has any claim for assessment and collection been asserted against Seller directly or indirectly; nor has Seller executed a waiver of any statute of limitations with respect thereto.  Seller has not received notices nor is otherwise aware of any deficiencies, adjustments or changes in assessments with respect to any such taxes.  No extensions of time are in effect for the assessment of deficiencies for such taxes in respect of any period.

 

  

  

  

3.7 Brokers.  There has been no broker or finder involved in any manner in the consummation of any transactions contemplated hereby, and Seller agrees to indemnify Purchaser, its officers, directors and affiliates against and hold Purchaser, its officers, directors and affiliates harmless from any claim made by a party for a broker’s or finder’s fee or other similar payment based upon any agreements, arrangements or understandings made by the Seller.

 

3.8 No Untrue Representation or Warranty.  No representation or warranty contained in this Agreement or any attachment, written statement, schedule, exhibit, certificate or instrument furnished or to be furnished to Purchaser by Seller pursuant hereto, or in connection with the transactions contemplated hereby, contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary to make the statements contained herein or therein not misleading.

ARTICLE IV 

 REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser hereby represents and warrants to Seller as follows:

 

4.1 Organization and Good Standing.  Purchaser is a corporation duly organized and validly existing under the laws of the State of Nevada.

 

4.2 Authority.  Purchaser has full authority or capacity to execute and to perform this Agreement in accordance with its terms; the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby does not and will not result in a breach, violation or default or give rise to an event which, with the giving of notice or after the passage of time, would result in a breach, violation or default of any of the terms or provisions or of any indenture, agreement, judgment, decree or other instrument or
restriction to which Purchaser is a party or by which Purchaser may be bound or affected; and no further authorization or approval, whether of governmental bodies or otherwise, is necessary in order to enable Purchaser to enter into and perform the same; and this Agreement constitutes a valid and binding obligation enforceable against Purchaser in accordance with its terms.

 

4.3 Brokers.  There has been no broker or finder involved in any manner in the consummation of any transactions contemplated hereby, and Purchaser agrees to indemnify Seller against and hold Seller harmless from any claim made by a party for a broker’s or finder’s fee or other similar payment based upon any agreements, arrangements or understanding made by Purchaser.

 

4.4 No Untrue Representation or Warranty.  No representation or warranty contained in this Agreement or any attachment, written statement, schedule, exhibit, certificate or instrument furnished or to be furnished to Seller by Purchaser pursuant hereto, or in connection with the transactions contemplated hereby, contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary to make the statements contained herein or therein not misleading.

 

  

  

  

ARTICLE V 

COVENANTS OF THE PARTIES

 

5.1 Further Assurances.  Seller agrees that, at any time after the Closing, upon the request of Purchaser, Seller will do, execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered, all such further acknowledgments, deeds, assignments, bills of sale, transfers, conveyances, instruments, consents and assurances as may reasonably be required for the better assigning, transferring, granting, conveying, assuring and confirming to Purchaser, their successors and assigns, the Assets to be sold or assigned
to Purchaser as provided herein.

 

5.2 Cooperation.  The Parties shall cooperate with each other fully with respect to actions required or requested to be undertaken with respect to tax audits, administrative actions or proceedings, litigation and any other matters that may occur after the Closing, and each Party shall maintain and make available to the other Party upon request all corporate, tax and other records required or requested in connection with such matters.

 

5.3 Publicity.  Each of the Parties hereto agrees that no publicity release or announcement concerning the transactions contemplated hereby or the terms and conditions of this Agreement shall be issued without the advance approval of the form and substance thereof by each of the Parties.

 

ARTICLE VI

SURVIVAL; INDEMNIFICATION

 

6.1 Survival of Covenants, Representations and Warranties.  All representations and warranties and covenants set forth in this Agreement shall survive and remain in effect for one year following the Closing. The Parties shall be entitled to rely upon the representations and warranties, without any obligation of independent verification and to enforce any remedies available to it for a breach of the representations, warranties or covenants at any time.

 

6.2 Indemnity Against Claims.

 

(a) Seller hereby jointly and severally agrees to indemnify and hold Purchaser, its officers, directors, partners, employees, attorneys, affiliates and assigns (collectively the “Purchaser Indemnified Parties”), harmless from and against the following:

 

(1) Excluding the Assumed Liabilities and any other liability expressly assumed by Purchaser hereunder in writing, any and all liabilities, losses, damages, claims, costs and reasonable expenses suffered by the Purchaser Indemnified Parties (whether awarded against the Purchaser Indemnified Parties or paid by the Purchaser Indemnified Parties in settlement of a claim as provided in Section 6.2 or otherwise suffered), (A) incurred or created in connection with the Assets prior to the Closing from any action taken by Seller which constituted willful misconduct, bad faith or gross negligence, or (B) resulting
from any material misrepresentation, material breach of any warranty, or material non-fulfillment of any covenant or agreement on the part of Seller contained in this Agreement or in any written statement, attachment, schedule, exhibit or certificate furnished or to be furnished by Seller to Purchaser pursuant hereto; and

 

  

  

  

(2) Any and all actions, suits, proceedings, demands, assessments or judgments, costs and reasonable expenses (including reasonable attorneys’ fees) incident to any of the foregoing.

 

(b) Purchaser hereby agrees to indemnify and hold the Seller, his employees, attorneys, affiliates and assigns (collectively the “Seller Indemnified Parties” and collectively with the Purchaser Indemnified Parties, the “Indemnified Parties”), harmless from and against the following:

 

(1) Any and all liabilities, losses, damages, claims, costs and reasonable expenses suffered by the Seller Indemnified Parties (whether awarded against the Seller Indemnified Parties or paid by the Seller Indemnified Parties in settlement of a claim as provided in Section 6.2 or otherwise suffered), (A) incurred or created in connection with the Assets (whether incurred or created prior to or subsequent to the Closing or resulting from any action taken by Seller or Purchaser subsequent to or prior to the Closing, except for actions of Seller which constitute willful misconduct, bad faith or gross
negligence), (B) relating to the Assumed Liabilities and any other liabilities of the Seller expressly assumed by the Purchaser herein, or (C) resulting from any material misrepresentation, material breach of any warranty, or material non-fulfillment of any covenant or agreement on the part of Purchaser contained in this Agreement or in any written statement, attachment, schedule, exhibit or certificate furnished or to be furnished by Purchaser pursuant hereto; and

 

(2) Any and all actions, suits, proceedings, demands, assessments or judgments, costs and reasonable expenses (including reasonable attorneys’ fees) incident to any of the foregoing.

 

(c) The amount of any loss subject to indemnification hereunder shall be calculated net of any amounts which have been previously recovered by the Indemnified Parties under insurance policies or other collateral sources, and the Indemnified Parties hereby covenant that they will not release any such collateral sources from any obligations they may have.  In the event any such insurance proceeds or other payments are not received before any claim for indemnification is paid pursuant to this Agreement, then the Indemnified Parties shall have the right (but not the obligation) to exclusively pursue such
collateral sources, provided they do so with reasonable diligence, and in the event they receive any recovery, then the amount of such recovery shall be applied first to reimburse the Indemnified Party for their out of pocket expenses expended in pursuing such recovery, second to refund any payment made which would not have been paid had such recovery from the collateral source been obtained prior to such payment, and third, any excess to the Indemnified Parties.

 

  

  

  

6.3 Notice of Claim, Assumption of Defense and Settlement of Claims.

 

(a) Any person entitled to indemnification under this Agreement (the “Indemnitee”) shall promptly give notice (an “Indemnification Notice”) in accordance with Section 6.3 hereof to the parties required to provide indemnification (collectively the “Indemnifying Party”) after the Indemnitee shall have knowledge of any demands,
claims, actions or causes of action (singly, a “Claim” and hereinafter referred to collectively as “Claims”) which might give rise to a Claim by the Indemnitee against the Indemnifying Party stating the nature and basis of said Claim and amount thereof, to the extent known.  A failure to give notice hereunder shall not relieve the Indemnifying Party from any obligation hereunder unless such failure to give notice shall materially and adversely affect Indemnifying Party’s ability to defend the Claim.  Each such Indemnification Notice shall specify in reasonable detail the nature and amount of the Claim and shall, to the extent available to the Indemnitee, include such
supporting documentation as shall reasonably be necessary to apprise the Indemnifying Party of the facts giving rise to the Claim.  After the delivery of an Indemnification Notice certifying that the Indemnitee has incurred or had asserted against it any liabilities, claims, losses, damages, costs or expenses for which indemnity may be sought in accordance with the terms of this Article VI (the “Damages”), the Indemnitee shall make a claim in an amount equal to the incurred Damages or asserted Damages, as the case may be (which, in the case of any asserted Damages shall include the Indemnitee’s reasonably estimated cost of the defense thereof, hereinafter the “Estimated Defense
Costs”) and the Indemnifying party shall promptly reimburse the Indemnitee for the Damages for which the Indemnitee has incurred and not been indemnified.  In the event the amount of such Damages are not promptly reimbursed by Indemnifying Party as aforesaid, the amount of such unreimbursed Damages shall accrue interest at a rate equal to two percent (2%) above the applicable prime rate of Citibank, N.A.

 

(b) With respect to any third party Claims made subsequent to the Closing, the following procedures shall be observed:

 

(1) Promptly after delivery of an Indemnification Notice in respect of a Claim, the Indemnified Party may elect, by written notice to the Indemnitee, to undertake the defense thereof with counsel reasonably satisfactory to the Indemnitee and at the sole cost and expense of the Indemnifying Party.  In the event the Indemnifying Party elects to assume the defense of any such Claim, it shall not, except as provided in Section 6.3(b)(2), be liable to the Indemnitee for any legal fees, costs and expenses incurred by the Indemnitee after the date thereof, in connection with such defense.  The
Indemnitee shall have the right to participate in, but not control the conduct of, any such action through counsel of its own choosing, at its own expense.

 

(2) Unless and until the Indemnifying Party assumes the defense of the third party Claim as provided in Section 6.3(b)(1), or in the event the Indemnifying Party ceases to conduct such defense, the Indemnified Party may defend against the third party Claim in any manner it reasonably may deem appropriate, at the expense of the Indemnifying Party.

 

  

  

  

(3) Failure by the Indemnifying Party to notify the Indemnitee of its election to defend any such action within 30 days of receipt of the Indemnification Notice shall be deemed a waiver by the Indemnifying Party of its right to defend such action.  If the Indemnifying Party assumes the defense of any such Claim, its obligations hereunder as to such Claim shall be limited to taking all steps necessary in the defense or settlement of such Claim and to holding the Indemnitee harmless from and against any and all losses, damages, expenses and liabilities awarded in any such proceeding or arising out of
any settlement approved by the Indemnifying Party or any judgment in connection with such Claim.

 

(4) The Indemnifying Party shall not, in the defense of any such Claim, consent to the entry of any judgment or enter into any settlement with respect to the third party Claim without the prior written consent of Indemnitee (which consent shall not be unreasonably withheld, conditioned or delayed), except that no consent of the Indemnitee shall be required if the judgment or proposed settlement (1) involves only the payment of money damages to be paid by the Indemnifying Party and does not impose any injunction or other equitable relief upon the Indemnitee, (2) includes as an unconditional term
thereof a full dismissal of the litigation or proceeding with prejudice and the delivery by the claimant or plaintiff to the Indemnitee of a release from all liability with respect to such claim or litigation, and (3) does not by its terms attribute liability to the Indemnitee.

 

(5) In no event will the Indemnitee consent to the entry of any judgment or enter into any settlement with respect to the third party Claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, conditioned or delayed.

 

(6) The Indemnitee will cooperate fully with the Indemnifying Party in the conduct of any proceeding as to which the Indemnifying Party assumes the defense hereunder.  Such cooperation shall include but not necessarily be limited to, assisting with discovery and investigation by (1) providing the Indemnifying Party and its counsel access to all books and records of the Indemnitee to the extent reasonably related to such proceeding, (2) furnishing information about the Indemnitee to the Indemnifying Party and their counsel, (3) making employees available to counsel to the Indemnifying
Party, and (4) preserving the existence of and maintaining all books and records of the Indemnitee or any other Indemnified Party that is an entity that may reasonably be deemed to be potentially relevant to any such proceeding until the proceeding is finally concluded.

 

6.4 Remedies Cumulative.  The remedies provided to an Indemnified Party herein shall be cumulative and shall not preclude an Indemnified Party from asserting any other rights or seeking any other remedies against an Indemnifying Party or his or its respective heirs, successors or assigns.  The asser­tion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent or subsequent assertion or employment of any other appropriate right or remedy.

 

  

  

  

ARTICLE VII 

 CONFIDENTIALITY

 

7.1 Confidentiality.  At all times after the Closing, the Parties hereto shall retain in strictest confidence, and shall not disclose to any third parties or use for their benefit (other than in order to fulfill the terms and conditions of this Agreement and the transactions contemplated by this Agreement) or for the benefit of others any confidential information comprising or related to the other parties hereto and their affiliates including, without limitation, intellectual property, trade secrets, customer lists, marketing plans or
strategies, product development techniques or plans, or technologies, in connection with the Assets, Purchaser or any affiliate thereof (collectively “Confidential Information”), except as otherwise required by law or in the Company’s public filings.  Confidential Information shall not include information which (i) is or becomes part of the public domain without breach of this Agreement, (ii) was known to the receiving party on a non-confidential basis prior to disclosure by the other party, (iii) is independently received by the receiving party without the use of confidential information, or (iv) is explicitly approved for release by written authorization of the disclosing party.  In the event that the receiving party is legally required to disclose any confidential
information, the receiving party shall promptly notify the disclosing party of such requirement and, if requested by the disclosing party, shall reasonably cooperate in the disclosing party’s efforts to prevent or limit such disclosure.  The requirements of this Section 7.1 shall terminate as to Seller in the event of Purchaser’s default in the payment of the Notes and the Seller’s purchase of the Collateral at any public sale as described in the Notes.

 

7.2 Enforceability.

 

(a)  It is the desire and intent of the Parties that the provisions of Article VII shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought.  If any particular provision or portion of Article VII shall be adjudicated to be invalid or unenforceable in any jurisdiction, Article VII shall be deemed amended to delete therefrom such provision or portion adjudicated to be invalid or unenforceable, such amendment to apply only with respect to the operation of this subsection (b) in the particular jurisdiction
in which such adjudication is made.  The Seller agrees that it would be difficult to measure the damages to Purchaser and its affiliates from the breach by the Seller of the provisions of Article VII, that injury to Purchaser from such breach would be impossible to calculate, and that monetary damages would therefore be an inadequate remedy; accordingly, the Seller agrees that Purchaser shall be entitled, in addition to all other remedies it might have, to injunctions or other appropriate orders to restrain any such breach without showing or proving any actual damages.

 

(b) The undertakings and covenants of the Seller contained in Article VII are an integral part of the transactions set forth in this Agreement and the consideration paid by Purchaser pursuant to this Agreement shall be consideration not only for the Assets but also for such undertakings and covenants.

 

  

  

  

ARTICLE VIII

 GENERAL PROVISIONS

 

8.1 Notices.  All notices, requests, demands and other communications hereunder shall be in writing and shall be delivered:  (a) personally; (b) by facsimile transmission; (c) by a commercial overnight delivery service (e.g., Federal Express, UPS, Airborne, etc.) and paid for by the sender; or (d) by certified, registered or express mail, postage prepaid.  Any such notice shall be deemed given when so delivered:  (i) personally, upon such service or delivery; (ii) if sent by
facsimile transmission, on the day so transmitted, if the sender calls to confirm that such notice has been received by facsimile and has a printed report which indicates that such transmission was, in fact, sent to the facsimile number indicated below; (iii) if sent by commercial overnight delivery service, on the date reflected by such service as delivered to the addressee; or (iv) if mailed by certified or registered mail, five business days after the date of deposit in the United States mail.  In each instance, such notice, request, demand or other communications shall be addressed as follows:

(a) in the case of the Seller:

Jerry Swinford

19511 Wied Rd. Suite E

Spring, Texas 77388

Phone: (281) 651-0200

Fax: (  )

 

with a copy to:

The Loev Law Firm, PC

Attn: David M. Loev, Esq.

6300 West Loop South, Suite 280

Bellaire, Texas 77401

Telephone: (713) 524-4110

Fax: (713) 524-4122

(b) in the case of Purchaser:

Coil Tubing Technology, Inc.

Attn: _____________

19511 Wied Rd. Suite E

Spring, Texas 77388

Phone: (281) 651-0200

Fax: (  )

with a copy to:

The Loev Law Firm, PC

Attn: David M. Loev, Esq.

6300 West Loop South, Suite 280

Bellaire, Texas 77401

Telephone: (713) 524-4110

Fax: (713) 524-4122

 

or to such other address or to such other person as Purchaser or Seller, shall have last designated by written notice given as herein provided.

 

  

  

  

8.2 Modification.  This Agreement and the exhibits and schedules annexed hereto contain the entire agreement between the Parties hereto and (i) there are no agreements, warranties or representations which are not set forth herein and (ii) all prior negotiations, agreements and understandings are superseded hereby.  This Agreement may not be modified or amended except by an instrument in writing duly signed by or on behalf of the Parties hereto.

 

8.3 Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the local laws of the State of Texas applicable to agreements made and to be performed entirely within the State, without regard to conflict of laws principles.  Seller and Purchaser hereby irrevocably consent and submit to the jurisdiction of any State or Federal court located in Harris, Texas over any action or proceeding arising out of any dispute between Seller and Purchaser, and waive any right they have to bring an action
or proceeding with respect thereto in any other jurisdiction.  Each Party further irrevocably consents to the service of process against them in any such action or proceeding by the delivery of a copy of such process at the address set forth above.

 

8.4 Binding Effect; Assignment.  This Agreement shall be binding upon the Parties and inure to the benefit of the successors and assigns of the respective Parties hereto; provided, however, that this Agreement and all rights hereunder may not be assigned by either Party without the prior written consent of  the other Party.

 

8.5 Counterparts.  This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  A copy of this Agreement signed by one Party and faxed 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.

 

8.6 Section Headings.  The section headings in this Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.

 

 

  

  

  

8.7 Transaction Expenses.  Each Party shall be responsible for the payment of any and all of its own expenses, including without limitation the fees and expenses of counsel, accountants and other advisers, arising out of or relating directly or indirectly to the transactions contemplated by this Agreement, whether or not such transactions are consummated in whole or in part.

 

8.8 Waiver.  The waiver of one breach or default hereunder shall not constitute the waiver of any other or subsequent breach or default.

 

8.9 No Agency.  This Agreement shall not constitute either Party the legal representative or agent of the other, nor shall either Party have the right or authority to assume, create, or incur any liability or any obligation of any kind, express or implied, against or in the name of or on behalf of the other Party.

 

8.10 Severability of Invalid Provision.   If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect.  Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

 

8.11 Construction. Each Party acknowledges that its legal counsel participated in the preparation of this Agreement and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting Party shall not be applied in the interpretation of this Agreement to favor any Party against the other.

 

8.12 Waiver of Conflict.  The Loev Law Firm, PC (the “Law Firm”) has exclusively represented the Purchaser in the preparation of this Agreement (and the exhibits hereto, including the Voting Agreement and the Employment Agreement), and has not undertaken to assist or render legal advice to any other Party in regards to this Agreement. Each other Party hereto (including the Seller) does hereby acknowledge that the Law Firm has directed that he
seek outside counsel and business advice other than from the Law Firm, as to the effects, consequences and legalities of this Agreement.

 

8.13 Gender and Plural Terms.  The singular shall include the plural where indicated by the context and all words and personal pronouns relating thereto shall be read and construed so as to give them proper meaning  within the context in which they are used.

 

 

 

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

 

  

  

  

 

IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement the day and date first above written.

	
 

PURCHASER:

 

Coil Tubing Technology, Inc. 

 

By: /s/ Jerry Swinford

 

Printed Name: Jerry Swinford

 

Its: President

 

 

 

	
 

SELLER:

 

/s/ Jerry Swinford

Jerry Swinford

 

 

 

 

 

 

 

  

  

  

EXHIBIT A

ASSETS

The following Patents shall be included in the Assets:

	
Type of Intellectual Property

	
Registered Number (or Provisional Number)

	
Valuation For the Purposes of the Agreement

	  	  	  
	
Subterranean Rotation Inducing Device and Method

	
No. 5584342

	
$250,000

	  	  	  
	  	  	  
	
Jet Motor For Providing Rotation In A Downhole Tool

 

	
U.S. Patent # 7686102

Singapore  Patent  # 146369

	
$300,000

	  	  	  
	
Rotation Tool

	
No. 11/848,614

	
$200,000

	  	  	  
	
Drilling Jar

 

	
No. 12/437,525

	
$250,000

	  	  	  
	
Jet Hammer

	
No. 12/480,680

	
$200,000

	  	  	  
	  	
TOTALS

	
$1,200,000

 

All intellectual property rights associated with or related to the Assets, including but not limited to:

(i)           Technical documentation reflecting engineering, maintenance, servicing and production data, design data, plans, specifications, drawings, technology, know how, trade secrets, confidential business information, research and development, servicing and maintenance processes, customer and supplier lists, pricing and cost information and business and marketing plans and proposals, relating to the Assets or to the maintenance of Assets and all documentary evidence thereof, including without limitation the technical information incorporated in such documentation; and

(ii)           To the extent that intellectual property is entered in pertinent patent, copyright and trademark registers or offices, to the full extent permitted by law, all related files in Seller’s direct and indirect possession and all documents, certificates and declarations necessary to enable Purchaser to register such intellectual property in its name.

All rights, liabilities, requirements, and obligations of Seller under any agreements, documents, understandings or contracts, associated with the Assets.

The goodwill of Seller relating to the Assets, all information in the possession of Seller relating to the operations of the Assets, the exclusive right of the Purchaser to represent itself as carrying on the business of the Assets as well as all corporate business opportunities of Seller relating to the Assets.

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