REOSTAR ENERGY CORP - Exhibit 10.7






EXHIBIT 10.7










  


EMPLOYEE CONFIDENTIALITY AND PROPERTY AGREEMENT 







As part of the consideration to be paid to Mark S. Zouvas, hereinafter
("Zouvas") by ReoStar Energy Corporation, hereinafter ("the Company")
and as a consideration of his employment by the Company, Zouvas agrees to the
provisions set forth below. "The Company", as used in this agreement, includes
not only the Company itself but also any subsidiaries.




	1. 	Non-Competition and Non-Solicitation.
      




	 	A.    Employ, attempt
      to employ or solicit for employment by any other person or entity, any Company
      employee.
	 	 
	 	B.    Encourage any vendor,
      supplier, independent contractor or any other person or entity to end their
      relationship or to stop doing business with Company.
	 	 
	 	C.    Directly or indirectly
      solicit or attempt to solicit to obtain business from any of Company's customers
      with whom Zouvas had contact or about whom Zouvas acquired knowledge while
      employed by Company.




	2. 	Scope of Employment 




Zouvas and Company mutually agree that the scope of the employee's
services to the Company are as follows:

 

	 	A.    Zouvas will become
      President and Chief Executive Officer for the Company. As the President
      and Chief Executive Officer, Zouvas will be in charge of all day to day
      operations of the Company, including but not limited to, overseeing all
      other employees, hiring and termination of said employees, negotiations
      concerning any business contracts, agreements or decisions in the ordinary
      course of business that do not need authorization from the Board of Directors.
      


 





	3. 	Reasonableness of Terms. 




	 	A.    Zouvas has carefully
      read and considered the provisions of this Agreement and, having done so,
      agrees that the terms set forth therein are fair and reasonable and are
      reasonably required for the protection of the interests of the Company,
      its officers, members, and other employees.
	 	 
	 	B.    In the event that,
      notwithstanding the foregoing, any part of this Agreement shall be held
      to be invalid or unenforceable, the remaining parts thereof shall nevertheless
      continue to be valid and enforceable as though the invalid or unenforceable
      parts had not been included.




	4. 	Consideration. 




	 	A.    In consideration
      for this Agreement, the Company hereby agrees to give to Zouvas an annual
      salary of $120,000.00 (One Hundred Twenty Thousand Dollars). Zouvas will
      not receive an initial restricted stock grant.
	 	 
	 	B.    This Agreement
      shall be binding upon, and shall inure to the benefit of, the Company and
      Zouvas, and their respective heirs, personal and legal representatives,
      successors and assigns. 




	5. 	Trade Secrets and Confidential Information
      


 


	 	A.    Trade secrets as
      used in this agreement means all or any part of any Company pattern, customer
      list or related customer information, sales or marketing plan, financial
      data, design, process procedure, formula, compilation of information, improvement
      or invention, that is (i) known to Company only, (ii) is considered and
      treated within the Company and by the Company as confidential, Company,
      and (iii) gives the Company an advantage over the competitors who do not
      know or use it.


 






  

 


	 	 
	 	B.    Confidential Information,
      as used in this Agreement, means all non-public and proprietary information
      or technology used in the Company's business. Information that can be readily
      reproduced from publicly available sources is not Confidential Information.
      Confidential Information includes both written and unwritten information,
      patentable or non-patentable information, and copyrightable or non-copyrightable
      information. Subject to the foregoing limitations, Confidential Information
      includes (i) information that belongs to the Company, (ii) the Confidential
      Information of any entity controlling, controlled by, or under common control
      with, the Company; and (iii) information confidentially provided to the
      Company by its customers or others. Confidential Information includes, without
      limitation; customer data, customer account information, and customer lists;
      sales records; invoices; contracts; information contained in customer files;
      information provided by customers and pertaining to their finances, operations
      or finances or operations of third parties; Trade Secrets; financial statements
      or financial information; current or contemplated future business plans;
      designs; performance specifications; marketing plans; strategies or schematics;
      pricing; and computer data, documentation, or algorithms. 
	 	 
	 	Zouvas acknowledges that the Company is engaged
      in an industry with rapidly emerging technology and know-how. Zouvas acknowledges
      that Trade Secrets and Confidential Information are valuable and unique
      assets of the Company or of the customers or others that furnished such
      Confidential Information to the Company. Zouvas and Company acknowledge
      that Zouvas may be provided access to Trade Secrets and Confidential Information
      during the course of employment, that to the extent that such access is
      granted, it will advance the Zouvas's career, and that use of Trade Secrets
      and Confidential Information for any purpose other than the sole benefit
      of the Company is wrong and would cause irreparable harm to the Company.
      Accordingly, Zouvas agrees: 




	 	(1) 	To hold all Trade Secrets and Confidential
      Information in strictest confidence and, unless Company gives Zouvas prior
      written consent to do so, not to disclose or use any such Trade Secrets
      and Confidential Information (except for use as required in performance
      of his or her duties for the Company) either during employment or after
      termination of his or her employment. 
	 	 	 
	 	(2) 	During and after employment, never to use Trade
      Secrets or Confidential Information other than in the course of employment
      for the Company; 
	 	 	 
	 	(3) 	During and after employment, to use all reasonable
      measures to prevent the unauthorized use of Trade Secrets and Confidential
      Information by others. 
	 	 	 
	 	(4) 	During and after employment to take common
      sense precautions to protect Company Trade Secrets and Confidential Information,
      such as never discussing them in public places like elevators, airplanes,
      or restaurants; personal conversations; and never carelessly handling documents
      containing such Trade Secrets or Confidential Information; and 
	 	 	 
	 	(5) 	To advise the Company's Manager immediately
      if anyone from outside the Company attempts to cause Zouvas to disclose
      Company Trade Secrets or Confidential Information. 




	 	All Trade Secrets and Confidential Information
      belong solely to the Company or, as applicable, to its customers or others
      who confidentially provide such information to the Company. Other than documents
      being used for the work-in-progress by the Zouvas, no copies of any written
      or computer-readable Trade Secrets or Confidential Information shall be
      made or removed from the Company's offices by the Zouvas without prior written
      consent of the Company. Zouvas understands that his or her unauthorized
      disclosure of Trade Secrets or Confidential Information may result in discipline,
      up to and including termination of his or her employment. 

      

      During and after employment, Zouvas agrees that he or she shall continue
      to be bound by the obligations in this Agreement following termination of
      his or her employment with the Company.





  






  



 
	 	The confidentiality obligations in this section
      do not prohibit disclosure to the extent necessary to comply with a court
      order, or subpoena, or any other obligation imposed by law. However, should
      Zouvas receive a court order, subpoena or request from a government agency
      pertaining to information that appears to be Confidential Information, Zouvas
      must immediately, and at least five (5) business days prior to disclosing
      such Confidential Information, notify the Manager by fax and by mail that
      Zouvas has received a request to provide Confidential Information and transmit
      to him by fax and by mail a copy of the subpoena, court order, or government
      request received. 
	 	 
	 	 C.    Trade secrets and
      confidential information of others that Zouvas may have obtained from
      previous employees will not be disclosed to the Company by the Zouvas without
      the consent of the prior employer. Zouvas agrees that if he or she is bound
      by confidentiality terms from a prior employer that Zouvas will use his
      or her best efforts to not violate those terms and to ensure that no claim
      can be made against the Company for a violation of those terms. If Zouvas
      believes that he or she has violated the terms of a prior confidentiality
      agreement, inadvertently or not, Zouvas shall promptly notify the Company
      of the incident.

      

      D.    No solicitation of Employees. During employment
      and for a period of twelve (12) months thereafter, Zouvas shall not, directly
      or indirectly, solicit for employment any employee of the Company. 

      

      E.    Safeguarding Company Property. All Company equipment,
      computers, software, books, personnel data, graphics materials, and other
      property shall remain the sole property of the Company even if Zouvas is
      allowed to remove it from the office. Zouvas agrees to safeguard all such
      property in his or her possession and to return it to Company in good condition
      upon request or upon termination of employment. Zouvas understands that
      he or she may be held financially responsible if such property is not returned
      or is not returned in good condition or working order (less normal wear).
      




	6. 	Inventions/Copyrights 




The Company will be the sole owner on a worldwide basis of any
and all ideas for inventions, improvements, technology, valuable discoveries,
and trade secrets (hereinafter referred to as Intellectual Property), whether
patentable or not, that are developed, created, conceived, discovered, learned
and/or made by the employee alone or jointly with others during his or her employment
by the Company after the date of this Agreement. This paragraph applies to Intellectual
Property made or conceived by the Zouvas during working hours, or to Intellectual
property that is related to business or activities of the Company or that Zouvas
conceives as a result of his or her employment by the Company. Zouvas hereby agrees
to promptly disclose to the Company all such Intellectual Property, made, conceived
or reduced to practice by Zouvas during his or her employment with the Company
occurring after the date of this Agreement. Any claim or cause of action of the
Zouvas against the Company, whether based on this agreement or otherwise will
not constitute a defense to the enforcement by the Company of the provisions of
this Agreement. 



All Intellectual Property made or conceived by the Zouvas prior to the date of
this Agreement with the Company is excluded from the scope of this Agreement.




Zouvas further agrees that Company owns the copyright and all other intellectual
property rights in works of authorship, computer programs and all other materials
prepared by Zouvas during his or her employment with the Company that relate to
Company business. . 



	7. 	Governing Law. 




Construction and interpretation of this Agreement shall at all
times and in all respects be governed by the laws of the State of Texas, and this
Agreement is entered into in Tarrant County. The parties to this Agreement consent
to the exclusive jurisdiction and venue of the federal and state courts located
in Texas, for any action arising out of or relating to this Agreement.

 





 



	8. 	Entire Agreement. 




This Agreement contains the entire agreement and understanding by and between
the Company and Zouvas with respect to the matters that are included in this Agreement,
and no representations, promises, agreements or understandings, written or oral,
not herein contained shall be of any force or effect. No change or modification
hereof shall be valid or binding unless the same is in writing and signed by the
party intended to be bound. 



	9. 	No Waiver. 




No waiver of any provision of this Agreement shall be valid unless
the same is in writing and signed by the party against whom such waiver is sought
to be enforced; moreover, no failure to enforce a provision by the Company shall
be deemed a waiver of that or any other term; and a valid waiver of any provision
of this Agreement at any time shall not be deemed a waiver of any other provision
of this Agreement. 



	10. 	Headings. 




The headings used herein are for the convenience of the parties
only and shall not be used to define, enlarge or limit any term of this Agreement.






ReoStar Energy Corporation 



Dated: __________________________ 







_________________________________ 

M.O. Rife III 

Chairman of the Board of Directors 

ReoStar Energy Corporation





Mark S. Zouvas 



Dated: __________________________ 







_________________________________ 

Mark S. Zouvas 

President & Chief Executive Officer 

ReoStar Energy Corporation