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Noncompetition, Nondisclosure and Nonsolicitation
Agreement
This Noncompetition,
Nondisclosure and Nonsolicitation Agreement (this “
Agreement
”) is made as of February 14, 2008, by and between Best
Energy Services, Inc., a Nevada
corporation (“ Buyer
”), and Tony Bruce (“ Seller
”).
Recitals:
Whereas,
Seller owns all of the issued and outstanding capital stock of
Best Well Service, Inc., a Kansas corporation (the “
Company
”), engaged in the business of operating workover
rigs and the rental of oil field services, including operating
workover rigs and providing ancillary equipment and services
(the “ Business
”);
Whereas,
concurrently with the execution and delivery of this
Agreement, Buyer is purchasing from the Seller the Purchased
Shares, pursuant to the terms and conditions of that certain
stock purchase agreement dated February 14, 2008 (the "
Stock
Purchase Agreement "). Section 2.4(a)(iv) of the Stock
Purchase Agreement requires that a noncompetition agreement be
executed and delivered by Seller at the Closing. Capitalized
terms not expressly defined in this Agreement shall have the
meanings ascribed to them in the Stock Purchase
Agreement;
Whereas,
Buyer believes, and Seller hereby acknowledges, that the
Confidential Information (as hereinafter defined) is extremely
important to the value of the Company and to the success of
the Business and Buyer desires to protect the value of the
Company and the Business by obtaining Seller’s agreement
to refrain from engaging in certain competition with the
Business for a reasonable period of time in a specified
geographical area;
Whereas,
Seller’s covenant not-to-compete and other covenants
contained herein are an important aspect of the Stock Purchase
Agreement, and Buyer would not enter into the Stock Purchase
Agreement absent the covenants not-to-compete and other
covenants contained herein;
Whereas,
Buyer would suffer damages, including the loss of profits, if
Seller, or any of his affiliates, engages, directly or
indirectly, in competition with Buyer or any of its affiliates
in the Business or otherwise violates the covenants contained
herein; and
Whereas, Buyer and Seller
have reached this agreement in good faith through arms-length
negotiations, both with the benefit of representation of
counsel.
Now, Therefore, for and in
consideration of the covenants not-to-compete and other
covenants contained herein and the consideration to be paid
therefore, and other good and valuable consideration, the
receipt and adequ-acy of which consideration are hereby
acknowledged, and of the other promises, covenants and
conditions contained herein, the parties hereto agree as
follows:
1.
Acknowledgments By Seller . Seller acknowledges
that Seller has occupied a position of trust and confidence with
the Company prior to the date hereof and has had access to and has
become familiar with all of the proprietary and confidential
financial, commercial,
technical,
engineering or other information of the Company, whether in
written, oral, visual, or electronic form (collectively the "
Confidential
Information "), including the following: (a) all information
that is a trade secret under applicable trade secret or other law;
(b) all information concerning product specifications, data,
know-how, formulae, compositions, processes, designs, sketches,
photographs, graphs, drawings, samples, inventions and ideas, past,
current and planned research and development, current and planned
manufacturing or distribution methods and processes, customer
lists, current and anticipated customer requirements, price lists,
market studies, business plans, computer hardware, computer
software and database technologies, systems, structures and
architectures; (c) all material information concerning the business
and affairs of the Company (which includes historical and current
financial statements, financial projections and budgets, Tax
Returns and accountants’ materials, historical, current and
projected sales, capital spending budgets and plans, business
plans, strategic plans, marketing and advertising plans,
publications, client and customer lists and files, contracts, the
names and backgrounds of key personnel and personnel training
techniques and materials, however documented), regardless of the
form of the communication; and (d) all notes, analyses,
compilations, studies, summaries and other material prepared by
Seller to the extent containing or based, in whole or in part, upon
any information included in the foregoing.
Seller
acknowledges that (a) the Business is regional in scope; (b)
the products and services of the Business are marketed
throughout Arizona, Colorado, Kansas, Nevada, Oklahoma and
Texas; (c) the Business competes with other businesses that
are or could be located in the contiguous states to Arizona,
Colorado, Kansas, Nevada, Oklahoma and Texas; (d) Buyer has
required that Seller make the covenants set forth in
Section 2
and Section 3
as a condition to Buyer's acquisition of the Business and the
purchase of the Purchased Shares; (e) the provisions of
Section 2
and Section 3
are reasonable and necessary to protect and preserve the
Business and the value of the Company and Buyer's interests in
the Company from and after Closing; and (f) Buyer would be
irreparably damaged if Seller were to breach the covenants set
forth in Section 2
and Section 3
.
2.
Confidential Information . Seller acknowledges and agrees
that the protection of the Confidential Information is necessary to
protect and preserve the Business and the value of the Company.
Therefore, Seller hereby agrees not to disclose to any Persons or
use for his own account or for the benefit of any third party any
Confidential Information, whether or not such information is
embodied in writing or other physical or electronic form or is
retained in the memory of Seller, without Buyer's prior written
consent, unless and to the extent that the Confidential Information
is or becomes generally known to and available for use by the
public other than as a result of Seller's fault or the fault of any
other Person bound by a duty of confidentiality to Buyer or the
Company. Seller agrees to deliver to Buyer at the time of execution
of this Agreement, and at any other time Buyer may request, all
documents, memoranda, notes, plans, records, reports and other
documentation, models, components, devices or computer software or
data, whether embodied in a disk or in other form (and all copies
of all of the foregoing), that contain Confidential Information and
any other Confidential Information that Seller may then possess or
have under his control.
3.
Noncompetition and Nonsolicitation . As an
inducement for Buyer to enter into the Stock Purchase Agreement and
as additional consideration for the consideration to be paid to the
Company under the Stock Purchase Agreement, Seller agrees
that:
(a)
For
a period of two years after the Closing:
(i)
Seller
will not, directly or indirectly, engage or invest in, own, manage,
operate, finance, control or participate in the ownership,
management, operation, financing or control of, be employed or
retained by, associated with or in any manner connected with, or
render services or advice or other aid to, or guarantee any
obligation of, any Person engaged in or planning to become engaged
in the industry or any other business whose products or activities
compete in whole or in part with the Business or the Company prior
to the Closing or the business thereafter conducted by Buyer,
anywhere in Arizona, Colorado, Kansas, Nevada, Oklahoma and Texas
or
any state that is contiguous thereto; provided
, however
, that Seller may purchase or otherwise acquire up to (but not more
than) one percent of any class of securities of any enterprise (but
without otherwise participating in the activities of such
enterprise) if such securities are listed on any national or
regional securities exchange or have been registered under Section
12(g) of the Securities Exchange Act of 1934. Seller agrees that
this covenant is reasonable with respect to its duration,
geographical area and scope.
(ii)
Seller
agrees not to, directly or indirectly, (A) induce or attempt to
induce any employee of the Company who becomes an employee of Buyer
in connect
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