AGREEMENT AND RELEASE
Exhibit
10.5
THIS
AGREEMENT is entered into on this 31st
day of
May, 2007, by Grifco International, Inc., a Nevada corporation with its
principal place of business in Conroe, Texas (“Grifco”), Xxxxx Xxxx (a.k.a. Xxx
Xxxx), a resident of Conroe, Texas (“Dial”), Coil Tubing Technology, Inc., a
Nevada corporation with its principal place of business in Spring, Texas
(“CTBG”), Coil Tubing Technology Holdings, Inc., a Nevada corporation and a
wholly owned subsidiary of CTBG (“CTT Holdings”), and Xxxxx Xxxxxxxx a resident
of Spring, Texas (“Xxxxxxxx”).
WHEREAS,
in an
effort to enhance the profitability and ultimately the return to shareholders
related to its coil tubing business, in late 2005, Grifco acquired IPMC Holdings
Inc., a public company, and via a merger formed CTBG. In connection with this
transaction, Grifco acquired 75,000,000 shares of the then approximate
100,000,000 outstanding shares of common stock of CTBG. Grifco anticipated
that
subject to obtaining audited financial statements for CTBG, its shares would
be
distributed to its shareholders (resulting in a “spin-off”).
WHEREAS,
difficulties were encountered in finalizing and effecting the distribution
of
CTBG shares to Grifco shareholders. In particular, the auditor refused to issue
an audit opinion regarding CTBG because IPMC had failed to file appropriate
reports with the SEC and it was impossible to obtain the necessary information
in order to bring IPMC (now CTBG) into compliance with those reporting
requirements.
WHEREAS,
in
order to provide Xxxxxxxx with substantial control over CTBG and to reflect
his
continuing efforts on behalf of CTBG, 75,000,000 shares of CTBG common stock
were issued to Xxxxxxxx.
WHEREAS,
various
representations were made in the market place regarding the number of issued
and
outstanding shares of CTBG.
WHEREAS,
Grifco
has made various contributions of capital to CTBG in part to pay for additional
expenses associated with the difficulties associated with the IPMC acquisition,
damages done to CTBG’s equipment while the equipment was in Grifco’s control and
to fund operations while alternatives were evaluated and developed to allow
CTBG
to be a separate, distinct reporting public company.
WHEREAS,
the
parties have developed a two part plan to effect the intent of the initial
acquisition of IPMC. In the very near term, Grifco will distribute its
75,000,000 shares of CTBG to its shareholders. However, because of the reporting
difficulties associated with CTBG and in order to allow shareholders to fully
realize the value of the coil tubing business, CTT Holdings will file an
appropriate registration statement and attempt to register the distribution
of
CTT Holdings shares to CTBG shareholders. The result of these combined
distributions is that the shareholders of CTBG will receive shares of CTT
Holdings, a fully reporting company.
WHEREAS,
to
reflect Xxxxxxxx’x continuing efforts on behalf of CTBG and to allow him to
maintain control over CTBG, its operations and to ease the various corporate
approvals needed to effect the transactions indicated above, on May 7, 2007,
CTBG’s Board of Directors authorized the issuance of 1,000,000 shares of
Preferred Stock. Such Preferred Stock has the right to vote fifty-one percent
(51%) of the shareholder vote on all matters put to a vote of the shareholders.
As such Preferred Stock is intended to allow Xxxxxxxx to control CTBG during
the
time necessary to effect the CTT Holdings’ share distribution and his efforts
will be focused on the
operation and development of the coil tubing business, Grifco has expressed
an
interest in acquiring these shares of Preferred Stock.
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WHEREAS,
there
have been a number of agreements entered into and arrangements made between
the
parties, not all of which have been fully documented or approved. As a result,
this agreement is intended to clarify those arrangements and establish the
parties future rights and obligations.
NOW,
THEREFORE,
in
consideration of the mutual covenants and undertakings set forth in this
Agreement and Release, and for other good and valuable consideration, the
Parties agree as follows:
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1.
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CTBG
will issue to Grifco 1,000,000 shares Series B Preferred Stock. Series
B
Preferred Stock will have no voting rights and will not participate
in the
CTT Holdings share distribution. Series B Preferred Stock, however,
will
be convertible into 20,000,000 shares of CTBG common stock if Grifco
exercises the option to purchase the Series A Preferred Stock held
by
Xxxxxxxx, as described herein below.
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2.
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During
the “Option Period” (defined herein below), Xxxxxxxx hereby grants Grifco
the option to purchase the Series A Preferred Stock he currently
holds for
$100. The “Option Period” is a two (2) year period which starts when
Xxxxxxxx determines that he no longer desires or needs to hold the
Preferred Stock. It is anticipated that the inception of the Option
Period
will occur after the CTT Holdings distribution has been completed
and
there remains no items which require or would be facilitated by Xxxxxxxx
retaining the Preferred Stock. It is further anticipated, especially
should the CTT Holdings share distribution not be consummated, that
the
Option Period will be started once Xxxxxxxx has determined that he
no
longer requires the Preferred Stock and/or control over CTBG. Notice
of
the inception of such period will be provided to Grifco in writing
and
Xxxxxxxx will not unreasonably withhold establishment of the inception
of
the Option Period.
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3.
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Xxxxxxxx
will cancel the 75,000,000 shares of common stock issued to him by
CTBG.
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4.
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Xxxxxxxx
will enter into an employment agreement with CTT Holdings or one
or more
of its subsidiaries for a period of time and on such terms as is
agreeable
to Xxxxxxxx and CTT Holdings. Such employment agreement will include
(but
is not limited to) the following:
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a.
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Issuance
of CTT Holdings Preferred Stock which will include voting provision
allowing Xxxxxxxx to vote fifty-one percent (51%) of the votes cast
on all
matters voted on by CTT Holding’s
shareholders.
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b.
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Such
Preferred Stock will be convertible to common stock of CTT Holdings
based
on an earn-out or vesting schedule.
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x.
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Xxxxxxxx
will be eligible to participate in any stock option or similar stock
purchase plan established by CTT
Holdings.
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x.
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Xxxxxxxx
will be eligible to participate in any 401(k) or similar retirement
plan
established by CTT Holdings.
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2
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5.
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The
parties agree to execute any or all documents necessary to carry
out or
complete the terms of or the intent of this Agreement and Release.
The
parties further agree to execute any or all documents which are reasonably
determined to be necessary by Xxxxxxxx or his legal counsel to clarify
the
agreements or transactions between the parties. Without altering
the
generality of the foregoing, documents which are to be executed pursuant
to this agreement include:
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a.
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Restatement
and Novation of Agreement for Exchange of Common Stock entered in
November
2005 by Grifco and IPMC Holdings,
Inc
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b.
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Assignment
of Patent from Grifco to Xxxxxxxx, or his designee or Cancellation
of
Assignment of Patent by Xxxxxxxx to Grifco signed in connection with
sale
of CTT Holdings to Grifco in April
2005.
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c.
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Any
additional assignments necessary to clarify ownership of intellectual
property related to coil tubing
business.
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d.
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Any
corporate documents related to maintenance or clarification of corporate
formalities of CTBG. These documents do not include, unless the parties
agree otherwise subsequently, the documents necessary to bring CTBG
into
compliance with its reporting requirements with the SEC.
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In
consideration of the items sums set out above, the representations, agreements
and releases in this Agreement and other good and valuable consideration, the
sufficiency of which is hereby acknowledged and confessed, Grifco on behalf
of
itself, its shareholders, directors, officers, attorneys, agents, employees,
heirs, predecessors, successors, affiliates, and assigns, RELEASES, ACQUITS
and
FOREVER DISCHARGES CTBG, CTT Holdings and Xxxxxxxx along with their
shareholders, directors, officers, attorneys, agents, employees, heirs,
predecessors, successors, affiliates, from any and all claims, demands and
causes of action of any nature whatsoever, whether arising under any contract
or
in tort, or arising under any state or regulation or under common law, which
were or which could have been asserted in, or which arise from or in any way
relate to the various activities by the parties, or which arise from or relate
to any of the events giving rise thereto, and including all damage and other
events arising therefrom.
In
consideration of payment of the sums set out above, the representations,
agreements and releases in this Agreement and other good and valuable
consideration, the sufficiency of which is hereby acknowledged and confessed,
Dial (a.k.a. Xxx Xxxx) on behalf of himself, his attorneys-in-fact, agents,
heirs, predecessors, successors, affiliates, and assigns, RELEASES, ACQUITS
and
FOREVER DISCHARGES CTBG, CTT Holdings and Xxxxxxxx along with their
shareholders, directors, officers, attorneys, agents, employees, heirs,
predecessors, successors, affiliates, from any and all claims, demands and
causes of action of any nature whatsoever, whether arising under any contract
or
in tort, or arising under any state or regulation or under common law, which
were or which could have been asserted in, or which arise from or in any way
relate to the various activities by the parties, or which arise from or relate
to any of the events giving rise thereto, and including all damage and other
events arising therefrom.
Grifco
and Dial understand, agree, and acknowledge that this Agreement releases any
and
all claims that they may have, whether or not asserted, for any claims,
interests or damages of any kind whatsoever, whether known or unknown, as a
result of or in any way related to the various activities
by the parties. Grifco and Dial further understand, agree, and acknowledge
that
they may hereafter discover claims or facts in addition to or different from
those they now know or believe to be true with respect to the matters described
and released herein. Nevertheless, it is their intention to fully, finally
and
forever release CTBG, CTT Holdings and Xxxxxxxx from all claims relative to
such
matters, which now exist or which may exist in the future. In furtherance of
such intention, this Agreement shall be and remain in effect as a full and
complete release of all such claims.
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The
Parties expressly warrant and represent (i)
that
each has the capacity to execute this Agreement; (ii)
that
each has not assigned any interest or lien right to any person or entity;
(iii)
that
before executing this Agreement, each was fully informed of its terms, contents,
conditions and effects regarding the same; (iv)
that in
entering into this Agreement no promise or representation of any kind has been
made to either party hereby released or anyone acting for either of them,
separate and apart from those in this Agreement; and (v)
that in
entering into this Agreement, each has relied solely and completely upon their
own judgment which was formed with advice from their own counsel. The Parties
acknowledge, understand, and agree that each will be solely responsible for
the
payment of any fees related to this Agreement or the matters addressed herein.
IN
WITNESS WHEREOF, the
parties hereto, intending to be legally bound hereby, have each caused to be
affixed hereto its or his/her hand and seal the day indicated.
EXECUTED
on this 31st
day of
May,
2007.
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Grifco
International, Inc.
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/s/
Xxxxx Xxxx
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Xxxxx
Xxxx, President
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Coil
Tubing Technology, Inc.
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/s/
Xxxxx Xxxxxxxx
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Xxxxx
Xxxxxxxx, President
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/s/
Xxxxx Xxxxxxxx
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Xxxxx
Xxxxxxxx, President
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Xxxxx
Xxxx, Personally
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/s/
Xxxxx Xxxx
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Xxxxx
Xxxx
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Xxxxx
Xxxxxxxx, Personally
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/s/
Xxxxx Xxxxxxxx
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Xxxxx
Xxxxxxxx
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