Joint Venture Relationship Agreement Between Valeska Energy Corp. And Texhoma Energy, Inc.
Exhibit 10.3
Between
Valeska
Energy Corp.
And
Texhoma
Energy, Inc.
The
purpose of this Agreement is to set forth the terms of a Joint Venture
relationship between Valeska Energy Corp., a Nevada Corporation (“Valeska”),
and
Texhoma Energy, Inc., a Nevada Corporation (“Texhoma”).
1.
Basic
Transaction.
Valeska
and Texhoma will jointly form a new Texas limited partnership (the “JV”),
of
which Valeska will serve as the initial general partner. Valeska may (i) cause
funds to be invested, (ii) arrange financial and strategic partnerships and
co-investment, and (iii) bring acquisition opportunities to the JV and assist
in
asset disposition. Texhoma will primarily source investment opportunities to
the
JV. In all cases, Texhoma shall have the right to veto any proposed deal that
goes into the JV.
2.
Co-Investment
Rights.
Valeska
will have co-investment rights in deals booked through this JV.
3.
Affiliate
Transactions.
The JV
will retain Valeska to provide services to the JV, including, without
limitation, management, technical, and related services.
4.
Partnership
Distributions.
Distributions by the JV will be made in the following order of
priority:
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i.)
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Subject
to the approval of the investor, Valeska and Texhoma will each be
entitled
to receive on a pro rata basis from the first cash distributed to
equity
owners, an amount equal to 8% percent to Valeska and 2% to Texhoma
(ten
percent (10.0%) between them), of the total cash and assets invested
in,
or through the JV by any person or entity;
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ii.)
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Distributions
will then be made to investor in accordance with negotiated terms;
and
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iii.)
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Thereafter,
Valeska and Texhoma will share any remaining distributions 80% to
Valeska
and 20% to Texhoma.
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5. Put
Option.
Upon
the formation of the JV and continuing until its winding up and termination
or
the prior written consent of both parties, Valeska shall have
the
unrestricted right to require Texhoma to purchase its interest
in the JV in exchange for shares in Texhoma at any time and from time to time.
[The
parties will negotiate the manner in which Valeska’s interest will be valued for
exchange purposes, along with any other procedural requirements to be met in
connection with such an exchange, and will formalize their agreement on the
matter in the JV operating agreement or a separate document ancillary
thereto.]
For
purposes of this agreement and in the absence of a superseding agreement, the
exchange valuation shall be deemed to be 30% greater than the gross acquisition
cost of any property acquired by the JV and the Put shall be exchangeable into
common shares at market price.6. Texhoma
will allow Valeska to participate on the same economic terms, as if in
the
JV, on any business Texhoma conducts that Valeska arranges funding and/or an
acquisition, directly or indirectly.
CONFIDENTIALITY
and NON-CIRCUMVENTION
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A.
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Confidentiality
of Proposed Transactions.
Except as and to the extent required by law, without the prior written
consent of the other party, neither Valeska nor Texhoma shall, and
each
shall direct its representatives not to, directly or indirectly,
make any
public comment, statement or communication with respect to, or otherwise
disclose or permit the disclosure of the existence of discussions
regarding, a possible transaction between the parties or any of the
terms,
conditions or other aspects of the transaction proposed in this Letter.
If
a party is required by law to make any such disclosure, it shall
first
provide to the other party the content of the proposed disclosure,
the
reason that such disclosure is required by law, and the time and
place
that the disclosure will be made.
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B.
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Confidential
Information.
All information furnished by one party (the “Protected
Party”)
to the other party (the “Receiving
Party”)
in connection with this Letter and the transactions contemplated
hereby
(the “Confidential
Information”)
shall be kept confidential by the Receiving Party, and shall be used
by it
only in connection with this Letter and the transactions contemplated
hereby, except to the extent that such information (i) is already
lawfully known to the Receiving Party when received; (ii) thereafter
becomes lawfully obtainable from other sources; (iii) is required to
be disclosed to the Receiving Party’s affiliates, lenders, auditors or
counsel, provided
that such persons agree to be bound by the provisions of this Section
B;
or (iv) is required by law, regulation, state or federal bank
regulators or court order to be disclosed by the Receiving Party,
provided
that the Receiving Party which is required to make the disclosure
uses its
best efforts to provide sufficient notice to permit the Protected
Party to
take legal action to prevent the disclosure. In the event that the
transactions contemplated by this Letter shall fail to be consummated,
each Receiving Party shall promptly cause all originals and copies
of
documents or extracts thereof containing any such information and
data as
to such Protected Party to be returned to the Protected Party or
destroyed
and shall cause an officer to so certify to the Protected Party.
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C.
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Non-Circumvention.
The parties recognize that in the course of negotiating the structure
and
operation of the JV, Valeska may advise Texhoma of the identity of
certain
clients, agents, brokers, buyers, sellers, investors, and/or other
entities or individuals interested in entering into business transactions
with Texhoma without previous business connections to Texhoma, and
that
Texhoma may advise Valeska of the identity of certain clients, agents,
brokers, buyers, sellers, investors, and/or other entities or individuals
interested in entering into business transactions with Valeska without
previous business connections to Valeska (collectively the “Third
Parties”).
During the term of this Letter and for a period of two years following
the
termination hereof, Valeska will not directly or indirectly transact
business with or contact any Third Party identified by Texhoma and
disclosed to Valeska prior to obtaining the written consent of Texhoma
for
any such contracts or transactions, and Texhoma will not directly
or
indirectly transact business with or contact any Third Party identified
by
Valeska and disclosed to Texhoma prior to obtaining the written consent
of
Valeska for any such contracts or transactions. [Each party agrees
that it
shall consent to the transaction of business with the Third Parties
as
required by the foregoing in the event that the party requesting
such
consent provides the consenting party with mutually-agreeable monetary
commission in connection with such transaction, including without
limitation commissions paid as a percentage of the requesting party’s net
profit from such transaction.]
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D.
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Costs.
Valeska and Texhoma shall be responsible for and bear all of their
own
respective costs and expenses incurred at any time in connection
with
pursuing or consummating the proposed transactions. However both
parties
agree to pay one half of the legal costs incurred for the preparation
of
the Partnership and related documents.
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E.
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Entire
Agreement.
The Agreement constitutes the entire agreement between the parties,
superseding all prior oral or written agreements, understandings,
representations and warranties, and courses of conduct or dealing
between
the parties on the subject matter hereof. Except as otherwise provided
herein, this Agreement may be amended or modified only by a writing
executed by all of the parties.
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F.
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Governing
Law.
This Agreement shall be governed by and construed in accordance with
the
internal laws of the State of Texas without regard to conflicts of
law.
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G.
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Termination.
This Agreement shall automatically terminate on December 31, 2009.
Upon
termination, the parties shall have no further obligations hereunder,
except as stated in Paragraphs B and
C of this Agreement, which shall survive any such
termination.
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[Remainder
of page intentionally left blank]
Agreed
and Accepted this 14th
day of
May 2007 by:
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VALESKA
ENERGY CORP.
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By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Print:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title:
CEO/President
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Date:
May 15, 2007
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TEXHOMA
ENERGY, INC.
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By:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Print:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title:
CEO, Director
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Date:
May 15, 2007
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