CONSULTING AGREEMENT TEXHOMA ENERGY, INC.
Exhibit
10.5
TEXHOMA
ENERGY, INC.
CONSULTING
AGREEMENT, dated as of July
___, 2007 (this “Agreement”), by and between TEXHOMA ENERGY, INC., a corporation
organized and existing under the laws of the State of Nevada (the “Company”),
and XXXX XXXX (the “Consultant”) (collectively sometimes referred to as the
“Parties” and individually sometimes referred to as a “Party” or “Each
Party”). Unless otherwise indicated, all references to Sections are
to Sections in this Agreement. This Agreement is effective as of the “Effective
Date” set forth in Section 14 below.
WITNESSETH
:
WHEREAS,
the Company desires to obtain the services of Consultant, and Consultant
desires
to be employed by the Company upon the terms and conditions hereinafter set
forth;
NOW,
THEREFORE, in
consideration of the premises and the mutual covenants, agreements, and
considerations herein contained, the Company and the Consultant hereto agree
as
follows:
1.1. Consulting
Services. The Company hereby retains the Consultant as a
Director of the Company, and as Vice President of Operations (“Employment”), to
provide, and the Consultant hereby agrees to provide, financial, petroleum
engineering, management and general business advisory services to the Board
of
Directors (the “Services”) as the Board of Directors may reasonably deem to be
necessary and beneficial to its efficient and effective operation of its
business operations in general. Such Services shall be rendered on a
non-exclusive basis.
1.1. Consulting
Period. (a) The period during which the Consultant shall render
the Services shall commence on July 1 2007 (the “Effective Date”) and shall
continue for a period of twelve (12) months. This Agreement is
renewable on a month to month basis thereafter, with the mutual consent of
each
Party hereto.
2.
Scope of Employment.
(a)
During the Employment, Consultant
will serve as a Director of the Company. In that connection,
Consultant will (i) devote his time, attention, and energies to the business
of
the Company and will diligently and to the best of his ability perform all
duties incident to his employment hereunder; (ii) use his best efforts to
promote the interests and goodwill of the Company; and (iii) perform such
other
duties commensurate with his office as the Board of Directors of the Company
may
from time-to-time assign to him;
(b)
Section 2(a) shall not be construed
as preventing Consultant from (i) serving on corporate, civic or charitable
boards or committees, or (ii) from giving Consultant the ability to consult
with
and assist other companies and individuals so as not to be adverse or compete
with the Company (unless the Board of Directors is aware such competition
or
potential competition with the Company); and
(c)
In connection with Consultant’s
Employment with the Company, Consultant shall travel for and on behalf of
Company to such locations in North America which the Company believes it
is in
the best interest for such Consultant to travel to (the “Travel”), subject to
Consultants availability to travel to such location. Consultant shall
be reimbursed by the Company for any reasonable
business expenses and traveling costs associated with any such
Travel. Consultant shall only be required to Travel (i.e., be away
from his office) for a maximum of twenty-one (21) days (“Travel Days”) for each
year that Consultant is employed by the Company pursuant to this Agreement
(“Maximum Travel Days”). Travel Days shall be defined as days in
which Consultant is unable to work at least eight (8) hours in his office
from
the hours of 8:00 A.M. to 6:00 P.M. Central Standard Time due to such
Travel. In the event that Consultant shall use up such Maximum Travel
Days prior to the end of any twelve (12) month period covered by this Agreement,
Consultant agrees that he will use his best efforts to continue to be available
for Travel as may be required by the Company (“Additional Travel”); provided
that such Consultant is reimbursed at a reasonable rate (in addition to the
compensation provided to Consultant under Section 3(a) below) for such time
and
expense which Consultant is required to spend in connection with such Additional
Travel.
3.
Compensation and Benefits During
Agreement. During the Agreement, the Company shall provide compensation to
Consultant as follows.
(a)
Company shall pay Consultant
compensation of $2,500 per month.
(b) Consultant
shall receive
500,000 restricted shares of the Company’s common stock on or around the date of
his entry into this Agreement in consideration for agreeing to perform the
Services and to be bound by the terms and conditions of this
Agreement.
(c) Consultant
shall receive
500,000 restricted shares of the Company’s common stock on the six (6) month
anniversary date of the Agreement, assuming that Consultant is still employed
under the terms of this Agreement at the expiration of such six (6) month
anniversary date.
(d)
The Company shall reimburse
Consultant for business expenses incurred by Consultant in connection with
the
Employment in accordance with the Company’s then-current policies, including any
reimbursement for reasonable Travel expenses as provided in Section 2(c)
above).
(e)
Consultant will be eligible to
participate in any incentive program or discretionary bonus program of the
Company which may be implemented in the future by the Board of
Directors.
(f) Consultant
will be
eligible to participate in any stock option plan of the Company which may
be
approved in the future by the Board of Directors.
4.
Confidential
Information.
(a)
Consultant acknowledges that the
law provides the Company with protection for its trade secrets and confidential
information. Consultant will not disclose, directly or indirectly,
any of the Company’s confidential business information or confidential technical
information to anyone without authorization from the Company’s
management. Consultant will not use any of the Company’s confidential
business information or confidential technical information in any way, either
during or after the Employment with the Company, except as required in the
course of the Employment.
(b)
Consultant will strictly adhere to
any obligations that may be owed to former employers insofar as Consultant’s use
or disclosure of their confidential information is concerned.
(c) Information
will not be
deemed part of the confidential information restricted by this Section 4
if
Consultant can show that: (i) the information was in
Consultant’s possession or within
Consultant’s knowledge before the Company disclosed it to Consultant; (ii) the
information was or became generally known to those who could take economic
advantage of it; (iii) Consultant obtained the information from a
party having the right to disclose it to Consultant without violation of
any
obligation to the Company, or (iv) Consultant is required to disclose the
information pursuant to legal process (e.g., a subpoena), provided that
Consultant notifies the Company immediately upon receiving or becoming aware
of
the legal process in question. No combination of information will be deemed
to
be within any of the four exceptions in the previous sentence, however, whether
or not the component parts of the combination are within one or more exceptions,
unless the combination itself and its economic value and principles of operation
are themselves within such an exception or exceptions.
(d)
All originals and all copies of any
drawings, blueprints, manuals, reports, computer programs or data, notebooks,
notes, photographs, and all other recorded, written, or printed matter relating
to research, manufacturing operations, or business of the Company made or
received by Consultant during the Employment are the property of the
Company. Upon Termination of the Employment, whether or not for
Cause, Consultant will immediately deliver to the Company all property of
the
Company which may still be in Consultant’s possession. Consultant
will not remove or assist in removing such property from the Company’s premises
under any circumstances, either during the Employment or after Termination
thereof, except as authorized by the Company’s management.
(e)
For a period of One (1) year after
the date of Termination of the Employment, Consultant will not, either directly
or indirectly, hire or employ or offer or participate in offering employment
to
any person who at the time of such Termination or at any time during such
one
year period following the time of such Termination was an employee of the
Company without the prior written consent of the Company.
5. Ownership
of Intellectual
Property.
(a)
The Company will be the sole owner
of any and all of Consultant’s Inventions that are related to the Company’s
business, as defined in more detail below.
(b)
For purposes of this Agreement,
“Inventions” means all inventions, discoveries, and improvements (including,
without limitation, any information relating to any techniques, processes,
formulas, developments or experimental work, work in progress, or business
trade
secrets), along with any and all other work product relating
thereto.
(c)
An Invention is “related to the
Company’s business” (“Company-Related Invention”) if it is made, conceived, or
reduced to practice by Consultant (in whole or in part, either alone or jointly
with others, whether or not during regular working hours), whether or not
potentially patentable or copyrightable in the U.S. or elsewhere, and it
either:
(i) involves equipment, supplies, facilities, or trade secret information
of the
Company; (ii) involves the time for which Consultant was or is to be compensated
by the Company; (iii) relates to the business of the Company or to its actual
or
demonstrably anticipated research and development; or (iv) results, in whole
or
in part, from work performed by Consultant for the Company.
(d)
Consultant will promptly disclose
to the Company, or its nominee(s), without additional compensation, all
Company-Related Inventions.
(e)
Consultant will assist the Company,
at the Company’s expense, in protecting any intellectual property rights that
may be available anywhere in the world for such Company-Related Inventions,
including signing U.S. or foreign patent applications, oaths or declarations
relating to such patent
applications, and similar documents.
(f)
To the extent that any
Company-Related Invention is eligible under applicable law to be deemed a
“work
made for hire,” or otherwise to be owned automatically by the Company, it will
be deemed as such, without additional compensation to
Consultant. In some jurisdictions, Consultant may have a right,
title, or interest (“Right,” including without limitation all right, title, and
interest arising under patent law, copyright law, trade-secret law, or
otherwise, anywhere in the world, including the right to xxx for present
or past
infringement) in certain Company-Related Inventions that cannot be automatically
owned by the Company. In that case, if applicable law permits
Consultant to assign Consultant’s Right(s) in future Company-Related Inventions
at this time, then Consultant hereby assigns any and all such Right(s) to
the
Company, without additional compensation to Consultant; if not, then Consultant
agrees to assign any and all such Right(s) in any such future Company-Related
Inventions to the Company or its nominee(s) upon request, without additional
compensation to Consultant.
6. Non-competition. As
a
condition to, and in consideration of, the Company’s entering into this
Agreement, and giving Consultant access to certain confidential and proprietary
information, which Consultant 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 6 as applied to Consultant
and
other employees similarly situated to Consultant, and for ten dollars ($10)
and
other good and valuable consideration, the receipt and sufficiency of which
Consultant hereby acknowledges, Consultant acknowledges and hereby agrees
as
follows:
(a)
that Consultant is and will be
engaged in the business of the Company;
(b)
that Consultant has occupied a
position of trust and confidence with the Company prior to the Effective
Date,
and that during such period and the period of Consultant’s Employment under this
Agreement, Consultant has, and 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 is based on the following: (i)
the substantial time, money and effort expended and to be expended by the
Company in developing technical designs, , oil and gas surveys and production
estimations, marketing plans and similar confidential information; (ii) the
fact
that Consultant 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, Consultant 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 and ending nine (9) months following Termination as provided
in
Section 11, Consultant 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,
in any county or State in which
the
Company has oil and/or gas operations, or owns or licenses any oil or gas
properties on the date of such Termination (the “Territory”); provided,
however
(e)
that nothing contained herein shall
be construed to prevent Consultant 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 Consultant
devoting time to the management or operations of such corporation and Consultant
is not otherwise involved in the business of such corporation; and if (ii)
Consultant and his associates (as such term is defined in Regulation 14(A)
promulgated under the Securities Exchange Act of 1934, 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.
7.
Legal Fees and
Expenses. In the event of a lawsuit, arbitration, or other
dispute-resolution proceeding between the Company and Consultant arising
out of
or relating to this Agreement, the prevailing party, in the proceeding as
a
whole and/or in any interim or ancillary proceedings (e.g., opposed motions,
including without limitation motions for preliminary or temporary injunctive
relief) will be entitled to recover its reasonable attorneys’ fees and expenses
unless the court or other forum determines that such a recovery would not
serve
the interests of justice.
8. Successors.
(a)
This Agreement shall inure to the
benefit of and be binding upon (i) the Company and its successors and assigns;
(ii) Consultant and Consultant’s heirs and legal representatives, except that
Consultant’s duties and responsibilities under this Agreement are of a personal
nature and will not be assignable or delegable in whole or in part; and (iii)
Consultant Parties as provided in Section 10.
(b)
The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation,
Acquisition or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform this Agreement
in
the same manner and to the same extent that the Company would be required
to
perform it if no such succession had taken place. As used in this Agreement,
"the Company" shall mean the Company as hereinbefore defined and any successor
to its business and/or assets as aforesaid which assumes and agrees to perform
this Agreement by operation of law, or otherwise.
9. Arbitration.
(a)
Except as set forth in paragraph
(b) of this Section 9 or to the extent prohibited by applicable law, any
dispute, controversy or claim arising out of or relating to this Agreement
will
be submitted to binding arbitration before a single arbitrator in accordance
with the National Rules for the Resolution of Employment Disputes of the
American Arbitration Association in effect on the date of the demand for
arbitration. The arbitration shall take place before a single
arbitrator, who will preferably but not necessarily be a
lawyer. Unless otherwise agreed by the parties, the arbitration shall
take place in the city in which the Company’s principal office space is located
at the time of the dispute or was located at the time of Termination of the
Employment (if applicable). The arbitrator is hereby directed to take
all reasonable measures not inconsistent with the interests of justice to
expedite, and minimize the cost of, the arbitration proceedings.
(b)
To protect inventions, trade
secrets, or other confidential information of Section 4, and/or to enforce
the
non-competition provisions of Section 6, the Company may seek temporary,
preliminary, and/or permanent injunctive relief in a court of competent
jurisdiction, in each case, without
waiving its right to arbitration.
(c)
At the request of either party, the
arbitrator may take any interim measures s/he deems necessary with respect
to
the subject matter of the dispute, including measures for the preservation
of
confidentiality set forth in this Agreement.
(d)
Judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction.
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10.
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Indemnification.
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(a) The
Company agrees to
indemnify and hold harmless Consultant, his nominees and/or assigns (a reference
in this Section 10 to Consultant also includes a reference to Consultant’s
nominees and/or assigns) against any and all losses, claims, damages,
obligations, penalties, judgments, awards, liabilities, costs, expenses and
disbursements (incurred in any and all actions, suits, proceedings and
investigations in respect thereof and any and all legal and other costs,
expenses and disbursements in giving testimony or furnishing documents in
response to a subpoena or otherwise), including without limitation, the costs,
expenses and disbursements, as and when incurred, of investigating, preparing
or
defending any such action, suit, proceeding or investigation that is in any
way
related to the Consultant’s employment with the Company (whether or not in
connection with any action in which the Consultant is a party). Such
indemnification does not apply to acts performed by Consultant, which are
criminal in nature or a violation of law. The Company also agrees that
Consultant shall not have any liability (whether direct or indirect, in contract
or tort, or otherwise) to the Company, for, or in connection with, the
engagement of the Consultant under the Agreement, except to the extent that
any
such liability resulted primarily and directly from Consultant’s gross
negligence and willful misconduct.
(b) These
indemnification
provisions shall be in addition to any liability which the Company may otherwise
have to Consultant or the persons indemnified below in this sentence and
shall
extend to the following: the Consultant, his affiliated entities, partners,
employees, legal counsel, agents, and controlling persons (within the meaning
of
the federal securities laws), and the officers, directors, employees, legal
counsel, agents, and controlling persons of any of them (collectively,
the “Consultant Parties”).
(c) If
any action, suit,
proceeding or investigation is commenced, as to which any of the Consultant
parties propose indemnification under the Agreement, they shall notify the
Company with reasonable promptness; provided however, that any failure to
so
notify the Company shall not relieve the Company from its obligations hereunder.
The Consultant Parties shall have the right to retain counsel of their own
choice (which shall be reasonably acceptable by the Company) to represent
them,
and the Company shall pay fees, expenses and disbursements of such counsel;
and
such counsel shall, to the extent consistent with its professional
responsibilities, cooperate with the Company and any counsel designated by
the
Company. The Company shall be liable for any settlement of any claim against
the
Consultant Parties made with the Company’s written consent, which consent shall
not be unreasonably withheld. The Company shall not, without the prior written
consent of the party seeking indemnification, which shall not be reasonably
withheld, settle or compromise any claim, or permit a default or consent
to the
entry of any judgment in respect thereof, unless such settlement, compromise
or
consent includes, as an unconditional term thereof, the giving by the claimant
to the party seeking indemnification of an unconditional release from all
liability in respect of such claim.
(d) The
indemnification
provided by this Section 10 shall not be deemed exclusive of, or to preclude,
any other rights to which those seeking indemnification may at any time be
entitled under
the
Company's Articles of Incorporation, Bylaws, any law, agreement or vote of
shareholders or disinterested Directors, or otherwise, or under any policy
or
policies of insurance purchased and maintained by the Company on behalf of
Consultant, both as to action in his Employment and as to action in any other
capacity.
(e)
Neither Termination nor completion
of the Employment shall effect these indemnification provisions which shall
then
remain operative and in full force and effect.
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11.
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Termination
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This
Agreement and the consulting
relationship created hereby will terminate (i) upon the disability or death
of
Consultant under Section 11 (a) or 11(b); (ii) with cause under Section 11
(c);
(iii) for good reason under Section 11 (d); (iv) or without cause under Section
11(e).
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(a)
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Disability. Company
shall have the right to terminate the employment of Consultant
under this
Agreement for disability in the event Consultant suffers an injury,
illness, or incapacity of such character as to substantially disable
him
from performing his duties without reasonable accommodation by
Consultant
hereunder for a period of more than sixty (60) consecutive days
upon
Company giving at least thirty (30) days written notice of
termination.
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(b)
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Death.
This agreement will terminate on the Death of the
Consultant.
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(c)
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With
Cause. Company may terminate this Agreement at any time
because of, (i) the conviction of Consultant of an act or acts
constituting a felony involving moral turpitude, dishonesty or
theft or
fraud; or (ii) Consultant’s negligence in the performance of his duties
hereunder.
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(d)
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Good
Reason. The Consultant may terminate his employment for
“Good Reason” by giving Company ten (10) days written notice
if:
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(i)
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he
is assigned, without his express written consent, any duties materially
inconsistent with his positions, duties, responsibilities, or status
with
Company as of the date hereof, or a change in his reporting
responsibilities or titles as in effect as of the date
hereof;
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(ii) his
compensation is reduced; or
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(iii)
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Company
does not pay any material amount of compensation due hereunder
and then
fails either to pay such amount within the ten (10) day notice
period
required for termination hereunder or to contest in good faith
such
notice.
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(e)
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Without
Cause. Company may terminate
this Agreement without cause.
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12. Obligations
of Company Upon Termination.
(a)
In the event of the termination of
Consultant’s employment pursuant to Section 11 (a), (b) or (c), Consultant will
be entitled only to the compensation earned by him hereunder as of the date
of
such termination (plus life insurance or disability benefits).
(b)
In the event of the termination of
Consultant’s employment pursuant to Section 11 (d) or (e), Consultant will be
entitled only to the compensation earned by him hereunder as of the date
of such
termination (plus life insurance or disability benefits), plus any restricted
stock awards which he is due pursuant to the terms of this Agreement, even
if
Consultant is terminated prior to the date such restricted common stock is
due
to him pursuant to Section 3 of this Agreement, above.
13. Other
Provisions.
(a)
All notices and statements with
respect to this Agreement must be in writing. Notices to the Company
shall be delivered to the Chairman of the Board or the Chief Executive Officer
or President of the Company. Notices to Consultant may be delivered
to Consultant in person, by email or fax, or sent to Consultant’s then-current
mailing address as indicated in the Company’s records.
(b)
This Agreement sets forth the
entire agreement of the parties concerning the subjects covered herein; there
are no promises, understandings, representations, or warranties of any kind
concerning those subjects except as expressly set forth in this
Agreement.
(c)
Any modification of this Agreement
must be in writing and signed by all parties; any attempt to modify this
Agreement, orally or in writing, not executed by all parties will be
void.
(d)
If any provision of this Agreement,
or its application to anyone or under any circumstances, is adjudicated to
be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability will not affect any other provision or application of this
Agreement which can be given effect without the invalid or unenforceable
provision or application and will not invalidate or render unenforceable
such
provision or application in any other jurisdiction.
(e)
This Agreement will be governed and
interpreted under the laws of the United States of America and the laws of
the
State of Texas as applied to contracts made and carried out in Texas by
residents of Texas.
(f)
No failure on the part of any party
to enforce any provisions of this Agreement will act as a waiver of the right
to
enforce that provision.
(g)
Section headings are for
convenience only and shall not define or limit the provisions of this
Agreement.
(h)
This Agreement may be executed in
several counterparts, each of which is an original. It shall not be
necessary in making proof of this Agreement or any counterpart hereof to
produce
or account for any of the other counterparts. 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 of this Agreement shall be effective as an
original for all purposes.
[Remainder
of page left intentionally blank. Signature page follows.]
14. Summary
of Terms of
Employment
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Effective
Date
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July
1, 2007
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Term
& Commitment
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One
(1) Year, full-time, renewable
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Office
/ Position
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Director,
Vice President of Operations
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Salary
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$2,500
per month and shares of restricted common stock as provided in
Section 3
above
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This
Agreement contains provisions requiring binding arbitration of
disputes. By signing this Agreement, Consultant acknowledges that
he (i) has read and understood the entire Agreement; (ii) has
received a copy of it (iii) has had the opportunity to ask questions and
consult
counsel or other advisors about its terms; and (iv) agrees to be bound by
it.
Executed
to be effective as of the Effective Date.
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TEXHOMA
ENERGY, INC.,
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CONSULTANT:
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| /s/ Xxxxxx Xxxxx | /s/ Xxxx Xxxx |
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XXX
XXXXX
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XXXX
XXXX
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Chief
Executive Officer
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Consulting Agreement Initials _____ / _____ Page 9
