Joint Venture Relationship Agreement

Exhibit 10.3

    


    


     

    Joint
      Venture Relationship Agreement

     

    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:

     

    
      	
              i.)

               

            	
              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;

               

            
	
              ii.)

               

            	
              Distributions
                will then be made to investor in accordance with negotiated terms;
                and

               

            
	
              iii.)

               

            	
              Thereafter,
                Valeska and Texhoma will share any remaining distributions 80% to
                Valeska
                and 20% to Texhoma.

               

            


    

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
 

        


        


      

    


    
      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

     

    
      	
              A.

               

            	
              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. 

               

            
	
              B.

               

            	
              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.
                

               

            


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              C.

               

            	
              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.]

               

            
	
              D.

               

            	
              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.

               

            
	
              E.

               

            	
              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.

               

            
	
              F.

               

            	
              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.

               

            
	
              G.

               

            	
              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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    Agreed
      and Accepted this 14th
      day of
      May 2007 by:

    


    


    
      	 	 
	 	
              VALESKA
                ENERGY CORP.

            
	 	 
	 	 
	 	
              By:
                /s/ William M. Simmons

            
	 	
              Print:
                William M. Simmons

               

            
	 	
              Title:
                CEO/President

               

            
	 	
              Date:
                May 15, 2007

               

            
	 	 
	 	 
	 	 
	
              TEXHOMA
                ENERGY, INC.

            	 
	 	 
	 	 
	
              By:
                /s/ Frank A. Jacobs

            	 
	
              Print:
                Frank A. Jacobs

               

            	 
	
              Title:
                CEO, Director

               

            	 
	
              Date:
                May 15, 2007