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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.
2
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 connection with the
purchase of the Company to leave the employ of Buyer; (B) in any way interfere
with the relationship between Buyer and any such employee of Buyer; (C) employ
or otherwise engage as an employee, independent contractor or otherwise any such
employee of Buyer; or (D) induce or attempt to induce any customer, supplier,
licensee or other Person to cease doing business with Buyer or in any way
interfere with the relationship between any such customer, supplier, licensee or
other business entity and the Buyer.
(iii) Seller
agrees that he will not, directly or indirectly, solicit the business of any
Person who, to the knowledge of Seller is a customer of the Buyer, whether or
not such Seller had personal contact with such Person, with respect to products
or activities which compete in whole or in part with the Business or the
business thereafter conducted by Buyer by and through the Company.
(b) In the
event of a breach by Seller of any covenant set forth in Subsection 3(a)
of this Agreement, the term of such covenant will be extended by the period of
the duration of such breach;
(c) Seller
will not, at any time during or after the two year period, disparage Buyer, the
Company, the Business formerly conducted by the Company, the business conducted
by Buyer by and through the Company or any shareholder, director, officer,
employee or agent of Buyer; and
(d) Seller
will, for a period of two years after the Closing, within ten days after
accepting any employment, consulting engagement, engagement as an independent
contractor,
