exv10w3






EXHIBIT 10.3




PERSONNEL SERVICES AGREEMENT




     This Personnel Services Agreement (this “Agreement”) is entered into this 26th day
of June, 2008, to be effective as of the Effective Date (as defined below) by and between CRUSADER
MANAGEMENT CORPORATION, an Oklahoma corporation (“CMC”) and CRUSADER ENERGY GROUP INC., a Nevada
corporation (the “Company”) (collectively, the “Party” or “Parties”).



     WHEREAS, the Company desires to retain CMC to provide substantially all of the employee
services necessary to operate the businesses of the Company and its subsidiaries as well as certain
other administrative services, and CMC desires to provide such services, on the terms and
conditions set forth herein.



     NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises and
obligations contained herein, the Parties hereto agree as follows:



     1. Services. CMC shall, during the term of this Agreement, provide to the Company
such employee services as are necessary from time to time to operate the businesses of the Company
and its subsidiaries and to provide to the Company and its subsidiaries such additional
administrative services as are set forth in Exhibit A hereto (the “Services”). Excluded
from the Services provided under this Agreement shall be the services of such management employees
with whom the Company shall contract directly. CMC covenants not to hold itself out to the public
as an employee leasing organization, personnel service, or contract labor firm. CMC shall provide
direction and control over its employees providing the Services consistent with the plans, policies
and procedures of CMC as amended from time to time in its reasonable discretion. The Company may
also provide such direction and control as is necessary to the conduct of its day-to-day operations
and in order to comply with governmental regulations and its own policies and procedures.
References to the “Company” in the Agreement shall, as applicable, refer to the Company and its
subsidiaries or to any one or more of the Company and its subsidiaries.



     2. Employee Compensation. CMC shall be responsible for the payment of wages, the
reimbursement of expenses, and the payment of any other compensation to all of its employees. CMC
shall implement procedures that comply with rules and regulations governing the reporting and
payment of all federal and state taxes on payroll wages paid under this Agreement including, but
not limited to: (i) federal income tax withholding provisions of the Internal Revenue Code; (ii)
state and/or local income tax withholding provisions, if applicable; (iii) the Federal Insurance
Contributions Act; (iv) the Federal Unemployment Tax Act; and (v) applicable state unemployment
provisions. In addition, CMC shall be the rated employer for unemployment compensation purposes
with respect to its employees. The Company shall not be the employer of such employees and shall
not be responsible to such employees for their compensation.



 









 





     3. Employee Benefits. CMC shall establish for its employees such employee benefit
plans, welfare plans, policies and procedures (“Employee Benefit Plans”) as it desires. The
Company shall have no liability or obligations with respect to such Employee Benefit Plans.
Management employees retained by the Company shall be allowed to participate in the Employee
Benefit Plans of CMC.



     4. Fees and Expenses. In consideration of the Services, the Company shall, on a
monthly basis, pay CMC an amount equal to 100% of CMC’s actual general and administrative expenses,
including all labor costs, travel and entertainment expenses, costs and expenses for professional
services (including all legal, consulting, engineering, land, geology, accounting and information
costs and expenses), taxes (except income taxes), licensing and permitting fees and expenses and
all occupancy costs, including telephone, rent, office supplies, postage, office equipment,
insurance costs and other similar costs and expenses and all other costs generally considered
general and administrative expenses or overhead incurred by CMC.



     5. Ownership of Certain Property; Preservation of Rights.




     (a) CMC hereby agrees that the Services to be performed by its employees for the
Company shall be considered work made for hire as defined in the Copyright Act of 1976, 17
U.S.C. Section 101, that is owned exclusively by the Company under Section 201(b) of such
Act, which vests copyright ownership of work for hire in the customer for whom the work is
performed. In addition, the Company shall be entitled to the ownership of all other
intellectual property rights arising during the performance of the Services, including, but
not limited to, inventions, whether patentable or not, and patents resulting therefrom,
trade secrets and other proprietary information. CMC shall have an irrevocable,
royalty-free license in perpetuity from the Company for any copyright or other intellectual
property developed by its employees in the performance of the Services; provided that CMC
shall have no such license with respect to the property described in clause (b) below.




     (b) CMC shall ensure that the Company is the owner of (and CMC shall have no interest
in other than the right to use in connection with its provision of Services) all: (i)
seismic data, (ii) well log data, (iii) confidential information regarding, and analyses
with respect to, prospects or other matters related to the Company, (iv) financial
statements and other accounting information, (vi) reserve reports, (vii) consultants’
reports, regarding the Company’s business or assets, (viii) rights with respect to the
purchase of or participation in any prospects, and (ix) other similar information, rights
and property.




     (c) CMC shall ensure that the Company shall be the client (as opposed to CMC being the
client) of any attorneys providing legal services with respect to the Company businesses and
assets. CMC shall take all steps necessary for the Company to maintain the attorney client
privilege with respect to any communications among the Company, CMC and any attorneys.



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     (d) In the event of a sale or transfer of the Company or the termination of this
Agreement, CMC shall promptly return to the Company or to the Company’s successor all books,
records and other property belonging to the Company.



     6. Records. Each Party shall at all reasonable times have access to the other Party’s
books, records, files and other statements, documents or instruments reasonably relating to the
Services. The Company shall have the right to audit CMC’s books and record with respect to the
provision of Services.



     7. Term. This Agreement shall have an initial term until December 31, 2009, and then
shall continue month to month indefinitely unless one of the Parties shall give at least 30 days’
advance written notice of termination.



     8. Notices. All notices and other communications hereunder shall be in writing and
shall be delivered and sent by hand, by fax, by first class mail or by overnight courier to the
Parties at the following address:



     If to CMC:


CRUSADER MANAGEMENT CORPORATION

4747 Gaillardia Parkway

Oklahoma City, OK 73142

Phone: (405) 285-7555

Fax: (405) 285-7522

Attn: David D. Le Norman




     If to the Company:


CRUSADER ENERGY GROUP INC.

4747 Gaillardia Parkway

Oklahoma City, OK 73142

Phone: (405) 285-7555

Fax: (405) 285-7522

Attn: David D. Le Norman




     9. Assignment. Neither Party may assign any of its rights or obligations hereunder to
any other person without the prior written consent of the other Party.



     10. Amendment. This Agreement may only be amended in a writing signed by both Parties
hereunder.



     11. No Third Party Beneficiaries. This Agreement shall not benefit or create any
right or cause of action in or on behalf of any person or entity who is not a party to this
Agreement except that the subsidiaries of the Company shall be entitled to receive Services from
CMC.



     12. Successors. This Agreement and all of the obligations and benefits hereunder
shall inure to the successors and lawful assigns of the Parties.



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     13. Mutual Cooperation. The Parties will provide each other with such assistance as
may reasonably be required by either of them in connection with the performance of all obligations
under this Agreement.



     14. Counterparts. This Agreement may be executed and delivered by each Party hereto
in separate counterparts, each of which when so delivered shall be deemed an original and both of
which taken together shall constitute one and the same agreement.



     15. Governing Law. All issues concerning the construction, validity, interpretation
and enforcement of this Agreement shall be governed by and construed in accordance with the laws of
the State of Oklahoma.



     16. Severability. In the event that any portion of this Agreement is declared invalid
and not binding on the Parties hereto in a final decree or order issued by a court of competent
jurisdiction, such declaration shall in no way affect the validity of the other portions of this
Agreement to which such declaration of invalidity does not relate.



     17. Entire Agreement. The terms and conditions hereof constitute the entire agreement
between the Parties hereto with respect to the subject matter of this Agreement and supersede all
previous communications, either oral or written and representations or warranties of any kind
whatsoever, except as expressly set forth herein or in this Agreement and the other transaction
documents. No modifications of this Agreement or waiver of the terms or conditions hereof shall be
binding upon either Party unless approved in writing by an authorized representative of such Party.



     18. Limitation of Liability. Neither Party shall be liable to the other for any
special or consequential damages arising from or connected with its performance hereunder or any
breach of its obligations hereunder.



     19. Independent Contractor. For all purposes of this Agreement, CMC shall at all
times act as and be deemed to be an independent contractor, and shall not act as nor be deemed to
be an employee or agent, of the Company.



(Signatures on following page)




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     IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written
above.



	 	 	 	 	 
	 	CRUSADER MANAGEMENT CORPORATION

 	 
	 	By:  	/s/ DAVID D. LE NORMAN
 	 
	 	 	David D. Le Norman, President 	 
	 
	 	CRUSADER ENERGY GROUP INC.

 	 
	 	By:  	/s/ DAVID D. LE NORMAN
 	 
	 	 	David D. Le Norman, President 	 



Signature Page to Personnel Services Agreement





 









 








Exhibit A





     CMC shall rent the office facilities to be used by the Company in Oklahoma City, Oklahoma.