TECHNOLOGY PURCHASE AGREEMENT BETWEEN SCHLUMBERGER TECHNOLOGY CORPORATION, SCHLUMBERGER CANADA LIMITED, AND SCHLUMBERGER B.V. AND ENVIRO VORAXIAL TECHNOLOGY, INC. AND FLORIDA PRECISION AEROSPACE, INC. Dated as of March 13, 2017

ARTICLE 1 DEFINITIONS  

1

 

1.1

 

Certain Definitions.

 

1

 

1.2

Other Definitional and Interpretive Matters.

4

 

1.3

 

Joint Drafting.

5

 

ARTICLE 2 PURCHASE AND SALE OF ASSETS  

5

 

2.1

 

Purchase and Sale of Assets.

 

5

 

2.2

 

Excluded Assets.

 

5

 

2.3

 

Excluded Liabilities.

 

5

 

2.4

 

Grant-Back License.

 

5

 

2.5

 

No Implied Rights, No Trademark Rights.

 

6

 

2.6

 

Improper Market Entry.

 

6

 

2.7

 

Further Conveyances and Assumptions; Consent of Third Parties.

 

7

 

ARTICLE 3 CONSIDERATION

 

7

 

3.1

 

Consideration.

 

7

 

3.2

 

Payment of Purchase Price at Closing.

 

7

 

3.3

 

Holdback A Non-Exclusive Remedy.

 

8

 

3.4

 

Withholding of Taxes.

 

8

 

ARTICLE 4 CLOSING

 

8

 

4.1

 

Closing.

 

8

 

4.2

 

Closing Date.

 

8

 

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF SELLER

 

8

 

5.1

 

Organization and Good Standing.

 

8

 

5.2

 

Authorization of Agreement.

 

8

 

5.3

 

Conflicts; Consents of Third Parties.

 

8

 

(a)

the Purchased Intellectual Property; and

(b)

all Documents related to the Business or to the Purchased Intellectual Property.

(a)

a non-exclusive, worldwide, royalty-free license (nontransferable, but sublicensable to Sellers' Affiliates), to make, use, sell, offer for sale, and import products and processes embodying the Purchased Intellectual Property outside the Oil-and-Gas Market; and

(b)

a non-exclusive, worldwide, royalty-free license (nontransferable, but sublicensable to Sellers' Affiliates) to make, use, sell, offer for sale, and import products and processes embodying the Purchased Intellectual Property in the Oil-and-Gas Market, but only to the extent necessary to:

(i)

repair or service, but not remanufacture, any goods incorporating the Purchased Intellectual Property that Sellers sold to third Persons prior to Closing or on or after Closing in accordance section 2.4(b)(ii) below; or

(ii)

fulfill, on or after Closing, any obligation identified in Schedule 5.6(j) to deliver goods incorporating the Purchased Intellectual Property;

(c)

a right to use any tangible copies of the Documents or Technology assigned to Purchasers that remain in Sellers' possession, but solely for the purpose of effecting Sellers' rights described in Sections 2.4(a) and 2.4(b) above;

(d)

to the extent the Purchased Intellectual Property is a Copyright, a non-exclusive, worldwide, royalty-free license (nontransferable, but sublicensable to Sellers' Affiliates) to copy and make derivative works, but solely for the purpose of effecting Sellers' rights described in Section 2.4(a) and 2.4(b) above; and

(e)

a non-exclusive, worldwide, royalty free license to use the Marks in commerce for a period of six-months immediately after the Closing Date, but only to the extent necessary to 1) facilitate Sellers' transition to new trademarks and 2) to further Sellers' license rights under Sections 2.4(a) and 2.4(b).

(a)

Two Million Six Hundred Thousand U.S. Dollars ($2,600,000) shall be paid directly to Florida Precision Aerospace, Inc.

(b)

Four Hundred Thousand U.S. Dollars ($400,000) shall be paid directly Enviro Voraxial Technology, Inc.

(c)

One Million U.S. Dollars ($1,000,000) shall be held back by Purchasers to be paid to Florida Precision Aerospace, Inc., upon completion, as determined solely by Purchasers, of both 1) the complete transfer of the Purchased Intellectually Property to Purchasers and 2) the provision by Sellers of transition information, assets and services ("Transition Items") to Purchasers sufficient to reasonably enable Purchasers to commercialize the Purchased Assets, including the Transition Items identified in and provided in accordance with Schedule 3.2.

(d)

Purchasers may, at their discretion, deduct from the payment due to Sellers under Section 3.2(c) the value of any claims they may have against Sellers pursuant or related to this Agreement; and, to be clear, this right to deduct is not Purchasers' exclusive remedy for claims under this Agreement, nor does it limit Purchasers' other rights in any way whatsoever.

·

Schlumberger Technology Corporation: 85% for all U.S. rights in and to the Purchased Assets;

·

Schlumberger B.V.: 14% for all non-U.S. and non-Canadian rights in and to the Purchased Assets; and

·

Schlumberger Canada: 1% for all Canadian rights in and to the Purchased Assets.

(a)

conflict with, or result in any violation of or default under, or give rise to a right of termination, cancellation or acceleration of any obligation or to a loss of a material benefit,

(b)

give rise to any obligation of Sellers to make any payment, or to the increased, additional, accelerated or guaranteed rights or entitlements of any Person,

(c)

result in the creation of any Liens, or

(d)

otherwise breach or violate any contract, license, or agreement to which Sellers are bound.

(a)

Sellers are the sole and exclusive owners of all right, title and interest in and to all of the Purchased Intellectual Property, free and clear of all Liens. All Purchased Intellectual Property was created solely by or for Sellers (or their predecessors in interest), and Sellers have obtained, through enforceable written agreements, assignment of all rights in and to the Purchased Intellectual Property from those who may have contributed to or participated in the conception or development thereof. Accordingly, no present or former employee, agent or consultant has any right, title, or interest, directly or indirectly, in whole or in part, in any Purchased Intellectual Property.

(b)

Neither the Purchased Assets nor conducting the Business infringes, is a misappropriation of, or violates any intellectual property right of any third Person, and no such claim (i) has ever been threatened or asserted, or (ii) is pending against Sellers. And there are no facts or circumstances, in relation to the Purchased Assets or conducting the Business, that would reasonably form the basis for any claim of infringement, misappropriation, or other violation of any intellectual property right of any third Person

(c)

Except for any patents that have expired due to term, all of Sellers' rights in and to the Purchased Intellectual Property are valid and enforceable. No claims challenging or questioning the validity or enforceability of the Purchased Intellectual Property have been asserted, and there are no facts or circumstances that would reasonably form the basis for any claim challenging the ownership, use, validity or enforceability of the Purchased Intellectual Property.

(d)

No claim that the Purchased Intellectual Property was infringed, misappropriated or otherwise violated has been made by Sellers or Sellers' predecessors in interest.

(e)

No third Person is infringing, violating, misusing or misappropriating any of the Purchased Intellectual Property.

(f)

Except for commercial off-the-shelf licenses, there is no Intellectual Property License with a third Person with respect to the Purchased Assets or in relation to Business.

(g)

No Trade Secret or any other non-public, proprietary information material to the Business or related to the Purchased Intellectual Property has been authorized to be disclosed or has been actually disclosed by Sellers (or a predecessor in interest) to any employee or any third Person, other than pursuant to a non-disclosure agreement restricting the disclosure and use of the Purchased Intellectual Property and as provided on Schedule 5.6(g). Sellers have taken adequate security measures to protect the secrecy, confidentiality and value of all the Trade Secrets of Sellers and any other confidential information, including invention disclosures not covered by any patents owned or patent applications filed or abandoned by Sellers, which measures provide no less than a reasonable degree of care.

(h)

No employee, consultant, independent contractor or other third Person with an obligation of confidentiality to Sellers, as a result of or in the course of such employee's, consultant's or independent contractor's engagement by Sellers, is in default or breach of any material term of any employment agreement, non-disclosure agreement, assignment of invention agreement or similar agreement.

(i)

The consummation of the transactions contemplated hereby will not result in the loss or impairment of Purchasers' right to own or use any of the Purchased Intellectual Property.

(j)

Except as provided in Schedule 5.6(j) (which the parties may amend, upon agreement, via a written instrument), there are no contracts or other obligations related to the Purchased Intellectual Property or the Business (whether, for the sake of clarity, in the Oil-and-Gas Market or not) requiring purchases from or sales to a particular Person.

(k)

Schedule 5.6(k) sets forth a complete and accurate list of (i) all Software that is owned exclusively by Sellers and is material to the operation of the Business and (ii) all Software that is used by Sellers in the Business that is not exclusively owned by Sellers, excluding Software available on reasonable terms through commercial distributors for a license fee of no more than $1,000.

(a)

Upon the Closing Date and until the three-year anniversary thereof, Sellers, their future Affiliates, and "Key Shareholders" (as provided on Schedule 7.1(a)) shall not

participate or cause participation in the Oil-and-Gas Market in relation to the Business, except to the extent necessary to:

(i)

repair or service, but not remanufacture, any goods Sellers sold to third Persons prior to Closing or on or after Closing in accordance with 7.1(a)(ii) below;

(ii)

fulfill, on or after Closing, any obligation identified in Schedule 5.6(j) to deliver goods or services; or

(iii)

continue an existing business expressly identified on Schedule 7.1(b) as an exception for a particular one of Sellers or a particular Key Shareholder.

(b)

Sellers shall take all reasonable measures to ensure the confidentiality and prevent the improper use of all Trade Secrets. To that end, Sellers, their future Affiliates, and employees, directors, or officers thereof, shall be bound to not disclose or use the Trade Secrets unless such disclosure or use is necessary to employ a right under a license granted to Sellers pursuant to this Agreement. And, in the event of such disclosure or use, using at least a reasonable degree of care, Sellers shall ensure the receiving Person shall and can maintain the secrecy, and police any improper use, of the disclosed Trade Secrets.

(c)

The covenants and undertakings contained in this Section 7.1 relate to matters which are of a special, unique and extraordinary character, and a violation or threatened violation of any of the terms of this Section 7.1 will cause irreparable injury to the Purchasers, the amount of which cannot be adequately compensated. Therefore, Purchasers will be entitled to an injunction, restraining order or other equitable relief from any court of competent jurisdiction in the event of any actual or threatened breach of this Section 7.1. The rights and remedies provided by this Section 7.1 are cumulative and in addition to any other rights and remedies which Purchasers may have hereunder or at law or in equity. In the event that Purchasers were to seek damages for any breach of this Section 7.1, the portion of the Purchase Price which is allocated by the parties to the foregoing covenant shall not be considered a measure of or limit on such damages.

(d)

The parties hereto agree that, if any court of competent jurisdiction in a final nonappealable judgment determines that a specified time period, a specified geographical area, a specified business limitation or any other relevant feature of this Section 7.1 is unreasonable, arbitrary or against public policy, then a lesser time period, geographical area, business limitation or other relevant feature which is determined to be reasonable, not arbitrary and not against public policy may be enforced against the applicable party.

(a)

Except as required under applicable Law, by the applicable rules of the respective stock exchange on which Purchasers or Sellers (or an Affiliate of either) list securities, or reasonably necessary to further the transactions contemplated by this Agreement, neither Sellers nor Purchasers shall issue any press release or public

announcement concerning this Agreement or the transactions contemplated hereby without obtaining the prior written approval of the other party hereto.

(b)

Except as required under applicable Law, by the applicable rules of the respective stock exchange on which Purchasers or Sellers (or an Affiliate of either) list securities, or reasonably necessary to further the transactions contemplated by this Agreement, Purchasers and Sellers agree that the terms of this Agreement shall not be disclosed or otherwise made available to the public.

(a)

to an Affiliate of one or more of the Purchasers;

(b)

to a customer of one or more of the Purchasers, or a customer of an Affiliate thereof; or

(c)

pursuant to a sale of assets or a business that employs the Purchased Intellectual Property.

(a)

Sellers shall have performed, in all material respects, its covenants and agreements contained in this Agreement required to be performed on or prior to the Closing Date, and Purchasers shall have received a written certification from Sellers to such effect;

(b)

the representations and warranties of Sellers in Article 5 and as contained elsewhere in this Agreement shall be continuously true and correct as of the date of this Agreement and as of the Closing Date as though made as of such date;

(c)

Sellers shall have obtained necessary corporate approval, including from shareholders of any class or series of Sellers' stock necessary for such approval, to adopt and approve this Agreement and the transactions contemplated by this Agreement;

(d)

Sellers shall have obtained a duly executed Termination, Assignment, Settlement And General Release Agreement—as set forth in the form provided as Exhibit B—from named inventor on U.S. Patent Nos. 6,248,231 and 7,727,386 ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), and fulfilled all obligations regarding payment of funds to ▇▇▇▇▇▇▇ thereunder; and

(e)

Since the execution of this Agreement, the value or condition of the Purchased Assets has not been substantially and materially reduced.

(a)

a duly executed Non-Competition Agreement in the form of Exhibit C hereto signed by each of the Key Shareholders;

(b)

a duly executed ▇▇▇▇ of Sale and Intellectual Property Assignment and Grant-Back License Agreement in the form of Exhibit A hereto signed by Sellers;

(c)

a duly executed Termination, Assignment, Settlement And General Release Agreement from ▇▇▇▇▇▇▇, and evidence establishing payment of funds due to and acceptance of those funds by ▇▇▇▇▇▇▇;

(d)

a duly executed Supply Agreement in the form of Exhibit D hereto signed by Sellers; and

(e)

such other documents as Purchasers may reasonably request.

(a)

a duly executed Supply Agreement in the form of Exhibit D hereto signed by Purchasers;

(b)

a duly executed ▇▇▇▇ of Sale and Intellectual Property Assignment and Grant-Back License Agreement in the form of Exhibit A hereto signed by Purchasers; and

(c)

evidence establishing the wire transfer referred to in Section 3.2 hereof.

(a)

any and all losses, liabilities, obligations, costs, expenses (including attorneys' fees), and damages (individually, a "Loss" and, collectively, "Losses") based upon, attributable to or resulting from the failure of any representation or warranty of Sellers set forth in this Agreement or in any Seller Document, to be true and correct in all respects at the date hereof and at the Closing Date;

(b)

any and all Losses based upon, attributable to or resulting from the breach of any covenant or other agreement on the part of Sellers under this Agreement or any Seller Document;

(c)

any and all Losses based upon Sellers' conduct of the Business prior to Closing, or Sellers' exercise of its rights, on or after Closing, pursuant Section 2.4 hereunder,

(d)

any and all Losses based upon Sellers' or their future Affiliates' conduct with respect to a third Person prior to or after Closing, and

(e)

any and all Losses arising out of, based upon or relating to any Excluded Asset or any Excluded Liabilities.

(a)

In the event that any Legal Proceedings shall be instituted or that any claim or demand ("Claim") shall be asserted by any third Person in respect of which payment may be sought under Section 11.1 hereof, the indemnified party shall reasonably and promptly cause written notice of the assertion of any Claim of which it has knowledge which is covered by this indemnity to be forwarded to the indemnifying party. If the indemnified party defends any Claim, then the indemnifying party shall reimburse the indemnified party for the expenses of defending such Claim upon submission of periodic bills. The indemnifying party may participate, at his or its own expense, in the defense of such Claim. The parties hereto agree to cooperate fully with each other in connection with the defense, negotiation or settlement of any such Claim.

(a)

After any final judgment or award shall have been rendered by a Governmental Body of competent jurisdiction and the expiration of the time in which to appeal therefrom, or a settlement shall have been consummated, or the indemnified party and the indemnifying party shall have arrived at a mutually binding agreement with respect to a Claim hereunder, the indemnified party shall forward to the indemnifying party notice of any sums due and owing by the indemnifying party pursuant to this Agreement with respect to such matter and the indemnifying party shall be required to pay all of the sums so due and owing to the indemnified party by wire transfer of immediately available funds within ten (10) business days after the date of such notice.

(b)

The failure of the indemnified party to give reasonably prompt notice of any Claim shall not release, waive or otherwise affect the indemnifying party's obligations with respect thereto except to the extent that the indemnifying party can demonstrate actual loss and prejudice as a result of such failure.