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Exhibit
99.4
CONFIDENTIALITY,
NON-SOLICITATION
AND
NON-COMPETITION AGREEMENT
This
Confidentiality, Non-Solicitation and Non-Competition Agreement (this
“Agreement”),
is
made and entered into as of June 23, 2008, between South Texas Oil Company,
a
Nevada corporation (the “Company”),
and
Michael Pawelek (“Pawelek”).
WHEREAS,
Company
desires to employ Pawelek and Pawelek wishes to be employed by
Company;
WHEREAS,
concurrently with their entering into this Agreement, Company and Pawelek are
entering into an Employment Agreement of even date herewith (the “Employment
Agreement”),
setting forth the terms of Pawelek’s employment by Company;
WHEREAS,
Company
and Pawelek desire that this Agreement take effect only if the Employment
Agreement has not been, in accordance with the procedures set forth in Article
XII of Company’s By-Laws, duly approved by the Board of Directors of Company and
duly ratified by the required vote of Company’s stockholders prior to the close
of business on the ninetieth (90th) day after the date hereof (the “Ninetieth
Day”);
WHEREAS,
as a
material inducement to Company to enter into the Employment Agreement and in
order to protect the value and goodwill of Company’s business, Pawelek has
agreed to enter into this Agreement, which is a material condition of Company’s
entry into, and a required delivery under, the Employment
Agreement;
WHEREAS,
in the
course of his employment by Company and/or other Affiliate Companies (as defined
below), Pawelek will have access to, and Pawelek will become familiar with,
acquire knowledge of, and develop or maintain, Company’s Confidential
Information (as defined below) and business relationships, whether currently
existing or to be developed in the future, which Pawelek recognizes permits
Company to enjoy a competitive advantage, and disclosure and/or use thereof
by
competitors, potential competitors and/or any third-party would cause
irreparable harm to Company.
NOW
THEREFORE,
in
consideration of Pawelek’s employment with Company and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged
by
the parties, the parties hereto agree as follows:
1. EFFECTIVE
DATE.
This
Agreement shall become effective, if at all, at the close of business on the
Ninetieth Day; provided
that,
this
Agreement shall not become effective and shall be void ab initio and neither
Company nor Pawelek shall have any obligations hereunder, if, in accordance
with
the procedures set forth in Article XII of the Company’s By-Laws, the Employment
Agreement is ratified by the required vote of the Company’s stockholders
(“Shareholder
Ratification”)
on
or
prior to the Ninetieth Day, as provided therein.
South
Texas Oil Company
Pawelek
Non-Comp Agreement
June
2008
2. CONFIDENTIAL
INFORMATION.
(a) Pawelek
acknowledges that during his employment with Company, Pawelek will have access
to and possession of trade secret, confidential information, and proprietary
information (collectively, as defined more extensively below, “Confidential
Information”)
of
Company, its parents, subsidiaries and affiliates and their respective
customers, suppliers and other third party that do business with them. Pawelek
recognizes and acknowledges that this Confidential Information is valuable,
special and unique to Company’s business, is owned solely by and is the
exclusive property of Company, is to be used only for Company’s benefit, and
that access to and knowledge thereof are essential to the performance of
Pawelek’s duties to Company. During his employment with Company and thereafter,
Pawelek shall keep secret and shall not use or disclose, reveal, transfer,
reproduce, sell, capitalize upon or take advantage of such Confidential
Information relating to Company, its subsidiaries, affiliates, customers,
suppliers or other third party that do business with it except at the request
of
Company, and in addition, Pawelek shall exercise all reasonable efforts and
precautions to prevent such disclosure, breach of confidentiality, or other
conduct or action inconsistent herewith; provided,
however,
that
Confidential Information may be disclosed to the extent (i) required by law
or
court order or (ii) generally available to the public other than by unauthorized
disclosure.
(b) The
term
“Confidential
Information,”
means
information in whatever form be it written, digital, graphic, electronically
stored, orally transmitted or memorized concerning:
(i) Company’s
business or operations plans, strategies, portfolio, prospects or
objectives;
(ii) Company’s
structure, products, product development, technology, distribution, sales,
services, support and marketing plans, practices, and operations;
(iii) the
prices, costs, and details of Company’s services;
(iv) research
and development, new products, licenses, operations or plans;
(v) trade
secrets, proprietary information, trade and service marks, inventions, mask
works, ideas, processes, formulas, source and object codes, data, programs,
other works of authorship, know-how, discoveries, developments, designs,
schematics, manuals, drawings, computer disks and programs, techniques, Pawelek
suggestions, development tools, computer printouts and improvements (hereinafter
referred to as “Inventions”);
(vi) customers
and customer lists, including (A) present customers, customer files and records,
(B) potential customers, and (C) present and potential prospects or targets
(including without limitation, the identities of customers, names, addresses,
contact, persons and the customers’ business status or needs) that the Company
has identified as potential customers, prospects or targets prior to the
termination of Pawelek’s employment with Company;
South
Texas Oil Company
Pawelek
Non-Comp Agreement
June
2008
2
(vii) information
regarding the skills, compensation and benefits of other employees of
Company;
(viii) non-publicly
reported financial matters, financial records, unpublished financial statements,
financial condition, results of Company’s operations and related information
about Company;
(ix) any
other
financial, commercial, business or technical information related to any of
the
products or services made, developed or sold by Company or its
customers.
(c)
Pawelek does not have an obligation to treat any information as Confidential
Information that is: (A) in the public domain through no act, omission or fault
of Pawelek; (B) within the legitimate possession of Pawelek prior to the date
hereof, with no confidentiality obligations to a third party; (C) lawfully
received from a third party having rights in the information without
restriction, and without notice of any restriction against its further
disclosure or use; (D) independently developed by Pawelek without breaching
this
Agreement; or (E) disclosed or used by Pawelek with the prior written consent
of
the Company. If Confidential Information is required or requested to be produced
by law,
court
order, governmental authority or other third party, Pawelek
shall immediately notify the Company of that requirement or request and shall
assist the Company in obtaining a protective order or other appropriate relief
to prevent such production. The
burden of establishing the existence of these exceptions shall be
Pawelek’s.
(d)
Pawelek further recognizes that Company has received and in the future may
receive from third parties confidential or proprietary information
(“Third Party
Information”)
subject to a duty on Company’s part to maintain the confidentiality of such
information and to use it only for certain limited purposes, and Pawelek shall
disclose all such Third Party Information to Company. During his employment
with
Company and thereafter, Pawelek shall hold Third Party Information in the
strictest confidence and shall not disclose to anyone (other than Company
personnel who need to know such information in connection with their work for
Company) or use, except in connection with work for Company, Third Party
Information unless expressly authorized by Company in writing.
(e)
Pawelek further agrees to store and maintain all Confidential Information and
Third Party Information in a secure place. On the termination of his employment
with Company, Pawelek agrees to deliver all records, data, information, and
other documents produced or acquired during his employment with Company, and
all
copies thereof, to Company. Such material at all times shall remain the
exclusive property of Company, unless otherwise agreed to in writing by Company.
Upon termination of the employment, Pawelek agrees to make no further use of
any
Confidential Information on his or her own behalf or on behalf of any other
person or entity other than Company.
(f)
During his employment with Company and thereafter, Pawelek shall not improperly
use or disclose any confidential information or trade secrets, if any, of any
former employer or any other person to whom Pawelek has an obligation of
confidentiality, and shall not bring onto the premises of Company any
unpublished documents or any property belonging to any former employer or any
other person to whom Pawelek has an obligation of confidentiality unless
consented to in writing by that former employer or person.
South
Texas Oil Company
Pawelek
Non-Comp Agreement
June
2008
3
(g)
In
the event that Pawelek is required to disclose any Confidential Information
pursuant to an order, regulation, ruling, governmental request, summons or
subpoena, Pawelek shall promptly notify Company of such pending disclosure
and
assist Company (at Company’s expense) in seeking a protective order or in
objecting to such request, summons or subpoena with regard to the Confidential
Information.
(h)
Pawelek agrees to cooperate with Company, whether during Pawelek’s employment
with Company or thereafter, in the prosecution or defense of all threatened
claims or actual litigation in which Company or any other Affiliate Companies
or
other of its affiliates is or may become a party, whether now pending or
hereafter brought, in which Pawelek has knowledge of relevant facts or issues.
Pawelek shall be promptly reimbursed reasonable out-of-pocket expenses
(including legal fees) incurred by him due to his cooperating with the
prosecution or defense of any litigation for the Company any other Affiliate
Companies or other of its affiliates provided that he provides Company Affiliate
Companies or other of its affiliates, as applicable, with reasonable
documentation of such expenses.
3. NON-COMPETE
AND NON-SOLICITATION.
(a) Non-Competition.
Pawelek
will, as a result of his employment with Company, be involved with and exposed
to substantial business resources and assets of Company and certain other
Affiliate Companies and will develop additional contacts and relationships
with
numerous individuals and companies, which are also involved in the business
of
Company or businesses related thereto. Such individuals and organizations will
have business and contractual relationships with Company and/or certain other
Affiliate Companies and other of its affiliates that will be a valuable asset
thereof. Pawelek also recognizes and agrees with Company that the services
which
Pawelek will render during the term of employment are unique, special and of
extraordinary character, that Company will be substantially dependent upon
such
services to develop and market its products and to earn a profit, and that
the
application of Pawelek’s knowledge and services to any competitive business
would be substantially detrimental to Company. Accordingly, in consideration
for
employment by Company and compensation and other benefits, including any
compensation Pawelek may receive pursuant to this Agreement after his employment
is terminated, Pawelek shall not, directly or indirectly (whether as an
employee, officer, executive, director, manager, stockholder, member, lender,
consultant or any other capacity), during the period of his employment with
Company or during the Non-Comp Period, engage in any business or activity or
otherwise compete anywhere in the United States, with any business or activity
that is competitive with any business or activity en






