Document:

ex10_2.htm

Exhibit 10.2

 

SAGE-FUND, L.P.

ADVISORY AGREEMENT

This ADVISORY AGREEMENT is entered into as of August___, 2007 by and among Steben & Company, Inc., a Maryland corporation (the “General Partner”), Sage Fund, LP, a Maryland limited partnership (the “Partnership”), and Altis Partners (Jersey) Limited, a Jersey, Channel Islands company (the “Advisor”),
whose main business address is Charles House, 2nd Floor, Charles Street, St. Helier, Jersey, Channel Islands, JE3 4SF.

RECITAL

The Partnership wishes to retain the Advisor to manage a commodity trading account of the Partnership (the “Account”) that the Partnership will establish for that purpose; and the General Partner hereby acknowledges receipt of the Advisor’s Commodity Trading Advisor Disclosure Document dated March 2007 (the “Disclosure
Document”), as filed with the Commodity Futures Trading Commission (“CFTC”) and the National Futures Association (“NFA”).

NOW THEREFORE, the parties agree as follows:

1.             Advisor’s Duties

  

  

  

 

(a)            The Advisor will trade “commodities” (as defined in §1(g) below) for the Account, pursuant to the terms and conditions of this Agreement. However, nothing in this Agreement or in the Advisor’s activities for the Partnership shall cause the
Advisor to be a partner of, joint venturer with or have a similar relationship to the General Partner or any other trader for the Partnership.

(b)            The Advisor will use its best efforts to generate profits for the Account, but makes no assurance that the Account will be profitable or not incur losses.

(c)            In managing the Account pursuant to this Agreement and all other accounts which the Advisor manages from time to time, the Advisor will manage the Account and all such other similar accounts in a good faith effort to achieve an equitable treatment of all accounts
under management.

(d)            If position limits restrict the number of positions the Advisor may establish for the Account, it will use its best efforts to allocate transaction orders equitably between the Account and the other accounts it manages.

(e)            The Advisor will place orders for the Account through Calyon Financial, Inc. or such futures commission merchants as is mutually agreed upon by the Advisor and the General Partner, (the “FCM”). The Advisor may select its own executing and/or floor
brokers for execution of trades and give-up to the FCM. The Advisor is not responsible for the brokerage commission rates charged to the Partnership by the FCMs which execute commodity transactions for the Account. All purchases and sales of commodities for the Account shall be for the account and at the risk of the Partnership. All commissions and expenses arising from the trading of, or other transactions in the course of the administration of, the Account shall be charged to the Partnership.

(f)             The Advisor will promptly advise the General Partner of any occurrence that renders the Disclosure Document materially inaccurate or materially incomplete, whether as of the date of the Disclosure Document or a later date. The Advisor will promptly furnish
the General Partner with a copy of any updated or revised version of the Disclosure Document.

(g)            As used in this Agreement, the terms “commodities” and “commodity transactions” shall
mean and include, without limitation, commodities, commodity futures contracts, commodity options, forward contracts and other commodity interests.

  

  

  

 

(h)            The Advisor shall give the Partnership immediate written notice of any proposed material change in the Advisor’s trading systems, methods, models, strategies, or formulae or the manner in which trading decisions are to be made or implemented and shall not
make any such proposed material change without having given the Partnership at least 20 business days prior written notice of such change. The addition and/or deletion of commodity interests from the Partnership’s portfolio managed by the Advisor shall not be deemed a change in the Advisor’s trading systems, methods, models, strategies, or formulae and prior written notice to the Partnership shall not be required.

2.             Compensation

 (a)            The Partnership will pay the Advisor: (i) after the end of each month a management fee of 0.083% of the Account’s Net Assets (as defined in §2(b) below) at the end of the month, (1% annually); and (ii) after the end of each calendar
quarter an incentive fee of 25% of any “Trading Profits” (as defined in §2(c) below) generated by the Advisor in the Account during the quarter. Payment shall be made within 30 days after the month-end for management fees and within 30 days after each calendar quarter-end for incentive fees after an invoice has been provided to the Partnership by the Advisor. 

(b)           “Net Assets” are the amount of Partnership funds actually deposited in the
Account maintained with the FCM plus any Notional Funds which may be allocated to the Advisor increased or decreased by any commodity trading gains or losses (realized and unrealized) in the Account during the month and any interest income earned in the Account during the month and decreased by any accrued but unpaid management or incentive tees from a previous month.

(c)            “Trading Profits” are the sum of: (i) the net of all realized profits and losses on

Account commodity positions liquidated during the quarter, plus (ii) the net of all unrealized profits and losses net of accrued brokerage commissions on Account commodity positions open

  

  

  

 

as of the quarter-end; minus: (iii) the net of all unrealized profits and losses on Account commodity positions open at the end of the previous quarter-end, and (iv) any cumulative net realized losses (which shall not include incentive fee expenses) from the
Advisor’s trading of the Account carried forward from all previous quarters since the last quarter for which an incentive fee was payable to the Advisor, and (v) any management fees paid or accrued to the Advisor, and (vi) a portion of the monthly ongoing operational and administrative costs, fees and expenses of the Partnership (“Ongoing Costs”) of 0.24% per month (2.88% annually). Trading
Profits will be calculated solely on the basis of assets allocated to the Advisor, and incentive fees will not be paid on interest income earned in the account.

 

(d)            With regard to the carry-forward loss referred to in §2(c)(iv) above:

(i)             If the Partnership withdraws funds from the Account during a period (whether by reason of redemptions, distributions, reallocations of assets, or the payment of expenses) when there is such a carry-forward loss, the loss shall be reduced, at the time of the withdrawal,
by the percentage obtained by dividing the amount of the withdrawal by the Account’s Net Assets immediately before the withdrawal.

3.             Funding of the Account

(a)            The Partnership may reallocate its assets between the various advisors managing its accounts and withdraw capital from the Account at any time. The Partnership shall promptly notify the Advisor, by telephone or telex, of any such reallocation or withdrawal, and shall
to the extent feasible give the Advisor advance written notice, such notice not to be less than 1 business day, of such reallocation or withdrawal. The Partnership may add capital to the Account at any time with the prior approval of the Advisor and shall promptly notify the Advisor of any such intended action.

(b)            The Partnership, and not the Advisor, shall manage the non-commodity transactions of the Account, such as the purchase of U.S. Treasury bills.

4.             Discretionary Trading and Funds Transfer Authorization

The Partnership hereby authorizes the Advisor to place orders, in the Advisor’s discretion, with the FCM for the execution of commodity transactions for the Account. The Partnership constitutes and appoints the Advisor as its attorney-in-fact for such purpose, with full authority to act on the Partnership’s behalf (except that
the Advisor shall not have any authority to withdraw any funds, securities or other property from the Account). Upon the Advisor’s request, the General Partner shall deliver to the Advisor, and renew when necessary, a Commodity Trading Authorization form to the above effect.

5.             Errors; Account Statements

The Advisor shall promptly notify: (a) the Partnership of any error committed by the Advisor in transmitting Account orders, and (b) the Partnership and the FCM of any Account transaction that the Advisor believes was erroneously executed by the FCM. The General Partner shall instruct the FCM promptly to furnish the Advisor with copies
of all Account confirmations, purchase and sale statements, and monthly account statements.

6.             Advisor’s Representations

The Advisor represents that:

(a)            This Agreement has been duly and validly authorized, executed and delivered on behalf of the Advisor, and when duly executed and delivered by the Partnership and the General Partner, will be a valid and binding contract of the Advisor enforceable in accordance with its
terms.

  

  

  

 

(b)            The Disclosure Document is, in all material respects, accurate and complete as of the date of the Disclosure Document and as of the date of this Agreement, and as of the latter date there has been no material adverse change in the Advisor’s performance since the
date of the Disclosure Document.

7.           General Partner’s and Partnership’s Representations and Covenants

The General Partner and the Partnership represent that:

(a)            This Agreement has been duly and validly authorized, executed and delivered and is a valid and binding contract of the General Partner and the Partnership enforceable in accordance with its terms.

(b)            The Partnership is duly formed and validly existing as a Maryland limited partnership, United States, with full partnership power to carry out its obligations under this Agreement and its Agreement of Limited Partnership.

(c)            The private offering memorandum pursuant to which the Partnership’s limited partnership interests are being offered, as amended and supplemented from time to time, (collectively, the “Memorandum”) will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they are made, not misleading, or omit to state any material information required to be disclosed therein under the Commodity Exchange Act, as amended (the “CEA”), the Securities Act of 1933, as amended (the “1933 Act”), and the rules promulgated thereunder; provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information furnished in writing to the General Partner by the Advisor, including, without limitation, all references to the Advisor and its affiliates (as defined in §13(h) below), controlling persons, shareholders, partners, directors, officers and employees, as well as to such Advisor’s trading approach and performance history.

(d)            The General Partner is duly formed and validly existing as a Maryland corporation with full power and authority to carry out its obligations under this Agreement and is registered with the CFTC as a commodity pool operator and is a member of the NFA.

(e)            The Partnership will make to the Partnership’s limited partners (the “Limited Partners”) all disclosures necessary with respect to the retention of the Advisor to manage the Account to comply with the CEA, the CFTC’s regulations thereunder, the
rules and regulations of the NFA and the applicable state and federal securities laws and regulations.

(f)             The General Partner is deemed to be a Qualified Eligible Person under United States CFTC Rules, specifically section 4.7.

(g)            There arc no actions, suits, proceedings or investigations pending or, to the knowledge of the Partnership, threatened against the Partnership, at law or in equity, or before or by any federal, state, municipal or other governmental department, commission, board, bureau,
agency or instrument or any self-regulatory organization or any commodity exchange.

  

  

  

 

(h)            The Advisor, either alone or in conjunction with the General Partner or its affiliates, is not an organizer or promoter of the Partnership.

(i)             All necessary and appropriate actions have been taken by the Partnership and the General Partner to terminate any other trading managers that previously managed the portions of the Partnership which are being committed to the management of the Advisor pursuant
to this Agreement.

(j)             The Partnership is not required to be registered as an investment company under the Investment Company Act of 1940, as amended.

(k)            The offer and sale of the limited partnership interests will be conducted in accordance with all applicable federal and state laws and regulations.

(l)             The General Partner will be responsible for compliance with the US Patriot Act and related anti-money laundering regulations with respect to the Partnership and its Limited Partners.

(m)           The above representations and warranties shall be continuing during the term of this Agreement and, if at any time, any event has occurred which would make or tend to make any of the foregoing not true, the General Partner will promptly notify the Advisor.

8.             Indemnification

(a)            By the Advisor. The Advisor agrees to indemnify and hold harmless each of the Partnership and the General Partner and each affiliate thereof against any loss, claim, damage, charge or
liability to which they (or such affiliate) may become subject under the 1933 Act, the CEA or otherwise, insofar as such loss, claim, damage, charge or liability (or actions in respect thereof) arises out of or is based upon (i) any misrepresentation or breach of any warranty, covenant or agreement of the Advisor contained in this Agreement or (ii) any untrue statement of any material fact contained in the Memorandum, or arises out of or is based upon the omission to state in the Memorandum, a material fact required
to be stated therein or necessary to make the statements therein not misleading (in each case under this clause (ii) to the extent, but only to the extent, that such untrue statement or omission was made in reliance upon and in conformity with information furnished and approved by the Advisor for inclusion in the Memorandum), including liabilities under the 1933 Act and the CEA.

(b)            By the Partnership and the General Partner. The Partnership and the General Partner jointly and severally agree to indemnify and hold harmless the Advisor and each of its affiliates against
any loss, claim, damage, charge, or liability to which the undersigned or its controlling persons may become subject, insofar as such loss, claim, damage, charge or liability (or actions in respect thereof) arises out of or is based upon: (i) any misrepresentation or breach of any warranty, covenant or agreement of the Partnership or the General Partner contained in this Agreement; (ii) any untrue statement of any material fact contained in the Memorandum, or arises out of or is based upon the omission to state
in the Memorandum, a material fact required to be stated therein or necessary to make the statements therein not misleading (excluding in each ease under this clause (ii) any untrue statement or omission made in reliance upon and in conformity with information furnished and approved by the Advisor for inclusion in the Memorandum), including liabilities under the 1933 Act and the CEA; (iii) the management of the Account by the Advisor or the fact that the Advisor acted as a trading manager of the Partnership if
the Advisor acted in good faith and in a manner which it reasonably believed to be in or not opposed to the best interests of the Partnership and provided that the Advisor’s conduct does not constitute gross negligence or willful misconduct; (iv) any acts or omissions of the Partnership, the General Partner or any trading manager to the Partnership before the Advisor commenced trading for the Partnership; or (v) any act or omission with respect to the Partnership of any other trading manager of the Partnership.

  

  

  

 

(c)            Limitations. None of the indemnifications contained in this Section shall be applicable to default judgments, confessions of judgment or settlements entered into by any indemnified party
claiming indemnification without the prior consent of the indemnifying party.

(d)            Notice and Defense of Claims. Promptly after receipt by an indemnified party under this section of notice of the commencement of any action, that party will, if a claim in respect thereof
is to be made against an indemnifying party under this Section, notify the indemnifying party of the commencement thereof; but the omission to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party under this Section. In case any such action is sought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, to assume
the defense thereof, with counsel satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation, but shall continue to be liable to the indemnified party in all other
respect as heretofore set forth in this Section.

(e)            Retention of Separate Counsel. If the indemnified party reasonably determines that its interest is or may he adverse to the indemnifying party’s or that there may be a legal defense
available to the indemnified party that is different from, in addition to or inconsistent with a defense available to the indemnifying party, the indemnified party may retain its own counsel and shall be indemnified by the indemnifying party for any expenses reasonably incurred in investigating or defending the action.

(f)            Advances. Expenses incurred by an indemnified party in defending a threatened or asserted claim or a threatened or pending action shall be paid by the indemnifying party in advance of
final disposition or settlement of such matter, if and to the extent that the person on whose behalf such expenses are paid shall agree to reimburse the indemnifying party in the event indemnification is not permitted under this section upon final disposition or settlement.

  

  

  

 

(g)            Survival. The provisions of this Section shall survive the termination or expiration of this Agreement.

(h)            “Affiliate” means general partner, officer, director, employee, or shareholder, and any general partner, officer, director, employee or shareholder of such shareholder.

9.             Term

(a)            Term and Renewal. This Agreement shall continue in effect for a period of one year following the end of the month in which the Partnership shall begin to receive trading advice from the
Advisor hereunder. Thereafter, this Agreement shall be renewed automatically for additional one-year terms unless either the Partnership or the Advisor, upon written notice given prior to the original termination date or any extended termination date, shall notify the other party of his or its intention not to renew.

(b)            Termination. Notwithstanding Section 9(a) hereof, this Agreement shall terminate:

(i)             immediately if the Partnership shall terminate and he dissolved in accordance with its Agreement of Limited Partnership or otherwise; or

(ii)            immediately after receipt by the Advisor from the General Partner or by the General Partner from the Advisor of written notice of termination; or

(iii)           immediately if the Advisor can no longer effectively implement its or his trading strategy on behalf of the Partnership; or

(iv)           immediately, at the discretion of the General Partner, if any of the following events shall occur; (1) the Advisor shall become bankrupt or insolvent; (2) the Advisor shall be unable to use all or any portion of his or its trading systems, methods, models, strategies,
or formulae as in effect on the date of this Agreement, or as refined or modified in the future in accordance herewith, for the benefit of the Partnership for any reason whatsoever; (3) the Advisor’s registration with the CFTC as a commodity trading advisor or the Advisor’s membership in the NFA in such capacity shall expire or shall be revoked, suspended, terminated, not renewed, or limited, conditioned, restricted, or qualified in any material respect; (4) the Advisor shall change or violate any
of the Trading Policies or any administrative policy of the Partnership except with the prior written consent of the Partnership; (5) the Partnership, upon receipt of not less than 20 business days’ prior written notice from the Advisor pursuant to Section 1(h) hereof, shall send written notice to the Advisor stating that the material change proposed by the Advisor in his or its trading systems, methods, models, strategies, or formulae or the manner in which trading decisions are to be made or implemented
is unacceptable to the General Partner; (6) the Advisor shall fail to perform any of its obligations under this Agreement.

  

  

  

 

10.           Arbitration

The parties agree that all controversies which may arise in connection with any transaction contemplated by this Agreement or the construction, performance or breach of this Agreement or any other agreement between the parties hereto, whether entered into prior, on or subsequent to the effective date of this Agreement, shall be determined
by arbitration, and in accordance with the rules then obtaining of the NFA, or if no such rules are then in effect, then the rules then obtaining of the Chicago Board of Trade; provided, however, that (a) the arbitrator(s) shall be experienced in the matters to be under dispute, (b) the authority of the arbitrator(s) shall be limited to construing and enforcing the terms and conditions of this Agreement as expressly set forth herein,
and (c) the arbitrator(s) shall state the reasons for the award in a written opinion. The award of the arbitrator(s), or a majority of them, shall be final, and judgment upon the award may be confirmed and entered in any court, state or federal, having jurisdiction.

11.           Miscellaneous

(a)            Complete Agreement. This Agreement constitutes the entire agreement between the parties with respect to the matters referred to herein, and no other agreement, verbal or otherwise, shall
be binding as between the parties unless it is in writing and signed by the party against whom enforcement is sought.

(b)            Assignment. This Agreement may not be assigned by either party without the prior written consent of the other party, such consent not to be unreasonably withheld or delayed. This Agreement
shall inure to the benefit of the parties hereto and their respective successors and assigns.

(c)            Amendment; Waiver. This Agreement may not be amended except by the written consent of the parties. No waiver of any provision of this Agreement may be implied from any course of dealing
between the parties or from any failure by a party to assert its rights under this Agreement on any occasion or series of occasions.

(d)            Severability. If any provision of this Agreement, or the application of any provision to any person or circumstance, shall be held to be inconsistent with any law, ruling, rule or regulation,
the remainder of this Agreement, or the application of the provision to persons or circumstances other than those as to which it is held inconsistent, shall not he affected thereby.

(e)            Notices. All notices required or desired to be delivered under this Agreement shall be in writing and shall he effective when delivered personally on the day delivered, or, when given
by registered or certified mail, postage prepaid, return receipt requested, on the day of receipt, addressed as follows (or to such other address as the party entitled to notice shall designate):

	
  
	
If to the Partnership
	
Steben & Company, Inc.

	
  
	
and the General Partner:
	
2099 Gaither Road, Suite 200

Rockville, Maryland 20850 United States

Attention: Kenneth E. Steben, President

	
  
	
If to the Advisor:
	
At the address on page 1 above.

  

  

  

 

(f)             Survival. The provisions of this Agreement shall survive the termination of this Agreement with respect to any matter arising while this Agreement was in effect.

(g)            Governing Law. This Agreement shall be governed by and construed in accordance with New York law (excluding the law thereof which requires the application of, or reference to, the law
of any other jurisdiction).

(h)            Property Right of the Advisor. The Partnership, the General Partner and their employees or agents acknowledge that commodity interest trading advice provided and trading strategies used
by the Advisor are confidential property rights belonging to it; the Partnership further agrees, unless authorized by the Advisor, that such advice will not be disseminated in whole or in part, directly or indirectly, to any of the Limited Partners, brokers, brokers’ customers, employees, agents, officers, directors or any others, except as necessary to conduct the business of the Partnership or except as required by any applicable law or regulation. Nothing contained in this Agreement shall require the
Advisor to disclose the confidential or proprietary details of its trading systems or strategies.

(i)             Limit on Liability. Except as otherwise set forth herein, the Advisor shall not be liable to the Partnership, its partners or any of their respective successors or permitted assigns
except by reason of its acts or omissions taken or omitted due to bad faith, willful misconduct or gross negligence or for not having acted in good faith in the reasonable belief that its actions were taken in, or not opposed to, the best interests of the Partnership. The foregoing sentence is intended to limit the liability of the Advisor, and nothing therein shall expressly or impliedly create any liability, duty or responsibility on the part any person.

(j)             Agreement Not Exclusive. The Advisor’s present business is advising with respect to the purchase and sale of commodity interests. The services provided by the Advisor hereunder
are not to be deemed exclusive. The Partnership and General Partner acknowledge that, subject to the terms of this Agreement, the Advisor may render advisory, consulting and management services to other clients for which it may charge fees similar or different from those charged to the Partnership. The Advisor shall be free to advise others and manage other accounts during the term of this Agreement and to use the same or different information, computer programs and trading strategies which it obtains, produces
or utilizes in the performance of services for the Partnership.

(k)            Right to Approve Offering Materials. The Partnership and the General Partner each agree that it shall not place reference to the Advisor, this Agreement or the transactions or arrangements
contemplated herein in the Offering Memorandum without the prior written approval of the Advisor.

(l)             Independent Contractor. This Agreement is not a contract of employment, and nothing contained herein shall be construed to create an exclusive relationship or the relationship of
employer or agent and principal or a joint venture or partnership between the parties hereto, except as otherwise expressly set forth herein. Each of the Partnership, the General Partner and the Advisor is an independent contractor and shall be free to exercise its judgment and discretion with regard to the conduct of its business except as otherwise limited herein.

  

  

  

 

(m)           Counterparts. This Agreement may be executed in one or more counterparts, including via facsimile, all of which together shall constitute one original Agreement. Signatures of representatives
of the parties as received by facsimile machine shall constitute “original” signatures. Any reproduction of this Agreement by reliable means will be considered an original of this contract.

(n)            Headings. Headings to sections and subsections in this Agreement are for the convenience of the parties and are not a part of or affect the meaning of this Agreement.

IN WITNESS WHEREOF this Advisory Agreement has been executed for and on behalf of the undersigned as of the date first above written.

	
The Partnership:
	  	
The Advisor:

	  	  	  	  	  
	
Sage Fund, L.P.
	  	
Altis Partners (Jersey) Limited

	  	  	  	  	  
	
By:
	/s/ Kenneth E. Steben	  	
By:
	/s/ 
	  	
Kenneth E. Steben, President
	  	
Name:

	  	
Steben & Company, Inc.
	  	
Title

	  	  	  	  	  
	
Steben & Company, Inc.
	  	  	  
	 	 	 	 
	
By:
	/s/ Kenneth E. Steben	  	  	  
	  	
Kenneth E. Steben, President
	  	  	  
	  	
Steben & Company, Inc.ex10_9.htm

Exhibit 10.9

 
Employment Agreement

 

James Ledbetter

 

 

 

 

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this "Agreement") by and between ERHC Energy Inc, a Colorado corporation ("Company"), and James Ledbetter ("Employee") is effective from December 18 2006.

 

The Company and the Employee agree as follows:

 

1.      Employment. Subject to the provisions for termination as hereinafter provided, Employee's employment with Company shall be pursuant to the terms of this Agreement and shall be for the period commencing on December 18
2006 (the "date of Commencement") and expiring 24 months after the date of Commencement, which period is hereinafter called "the Primary Term."

 

2.      Renewal. Subject to the provisions for termination as hereinafter provided, the Company and the Employee may, at any time before the expiration of the Primary Term, mutually agree that the Employment shall be renewed
at the expiration of the Primary Term on the same terms and conditions as are contained herein or on such other terms and conditions as the Company and the Employee may then mutually agree.

 

3.      Duties. The Employee shall serve as Vice-President Technical of the Company and shall faithfully and diligently perform such duties and responsibilities as shall be assigned to the position from time to time by the
Board of Directors of the Company ("the Board"). The Employee shall devote his full time and attention to his employment with the Company. The Employee may, with the written approval of the Board or the President/CEO, serve in a non-executive capacity on the boards of directors of not more than two other companies or corporations.

 

4.      Compensation and Benefits.

 

(a)     Salary. During the employment term, the Company will pay Employee a monthly gross salary of $19,166.67 ("Salary"). The Salary is payable monthly, less state and federal withholding, social security, and other standard payroll
deductions as shall be required to be withheld by applicable law or regulations, and shall be payable to Employee in accordance with the policies of the Company as from time to time in effect.

 

(b)     Incentive Compensation. Subject to the provisions contained in Paragraph 5 hereof, the Employee shall receive incentive compensation in the form of an option (the "Option") to purchase up to 1,000,000 originally issued shares
of Rule 144 restricted stock in the Company ("Stock"). The Option shall vest in the Employee and become exercisable on the "Vesting Date" which shall be the last day of the 12th consecutive calendar month after the date of Commencement provided always that the grant of the Option hereby is subject to the terms and conditions contained in the Company's 2004 Compensatory Stock Option Plan 2004. The exercise price per share of stock subject
to the Option shall be the closing price of the Company stock on the date of Commencement (the "Strike Price"). It is also understood and agreed that the Option granted aforesaid shall not in any circumstances vest in the Employee unless the Employee shall at the Vesting Date have attained to the satisfaction of the Board such performance targets as may have been fixed by the Board within three months of the date of Commencement of this Agreement. For the purpose of performance targets based on stock price performance,
it is hereby agreed that the baseline price for assessing stock price performance is the Strike Price.  The Employee shall be responsible for all federal, state and local taxes applicable to or arising from any incentive compensation accruing to the Employee.

  

  

  

 

(c)     Vehicle Allowance. The Employee shall be entitled to a reasonable monthly vehicle allowance as may be approved by the Board at the Board's discretion.

 

(d)     General Business Expenses. Subject to sub-paragraphs (e) and (g) of this paragraph 4, the Company shall pay or reimburse the Employee for all authorized reasonable
expenses authorized under Company's reimbursement policies that are necessarily incurred by the Employee during the Employment in the performance of the Employee's service under this Agreement. Such payment shall be made upon presentation of such documents as the Company customarily requires of its employees prior to making such payments or reimbursements.

 

(e)     Travel expenses. Where travel by commercial carriage is required by the Employee for the purposes of performance of the Employee's duties under this Agreement,
the Employee shall be entitled to travel on that class of ticket that is commonly known as "business class." The Employee may undertake travel by a higher class of ticket only where there is no business class ticket available.

 

(f)      Annual Vacation. Subject to the provisions of paragraph 5 hereof, the Employee shall be entitled to a vacation of five (5) weeks in every consecutive
period of 12 months from the date of Commencement provided always that the specific dates on which the vacation is taken shall be approved by the Board or the President/CEO. The accrual and payment of the Employee's salary shall not be affected or withheld by reason of the fact only that the Employee is on vacation in accordance herewith.

 

(g)     Relocation Allowance. The Company will reimburse to the Employee the cost of the Employee's relocation to Houston up to a maximum reimbursement of $10,000.
"Employee's relocation" in the preceding sentence includes relocation of the Employee and of the Employee's spouse, dependents and household items as well as any other relocation efforts or activities undertaken by the Employee in respect or as a result of the Employment.

 

(h)     Other Benefits. Other than the compensation and benefits specified in the preceding sub-paragraphs of paragraph 4 hereof, the Employee disclaims, disavows
and relinquishes any entitlement to any other allowances and benefits from the Company provided that the Employee may contribute to and benefit from mutual compensation schemes that are generally open to participation by all employees of the company.

 

5.      Termination of Employment.

 

(a)     The Employee's status as an employee of the Company will terminate immediately and automatically upon the earliest to occur of: (i) the death or "Disability" (as defined below) of the Employee; (ii) the discharge of the Employee by the Company "For Cause" (as defined below); (iii) termination
of this Agreement by notice by the Employer or Company as stated herein or (iv) the expiration, without renewal, of the Employment term.

 

The Employee hereby accepts such employment subject to the terms and conditions hereof.

  

  

  

(b)     As used herein, "For Cause" shall mean any one or more of the following: (i) material or repeated violations by the Employee (after notice thereof from the Company) of the terms of this Agreement or the Employee's material or repeated failure (after notice thereof from the Company) to
perform the Employee's duties in a manner consistent with the Employee's position; (ii) excessive absenteeism on the part of the Employee not related to illness or disability; (Hi) the Employees indictment for a felony or conviction of a misdemeanor involving moral turpitude; (iv) the Employee's commission of fraud, embezzlement, theft or other acts involving dishonesty, or crimes constituting moral turpitude, in any case whether or not involving the Company, that in the opinion of the Board, renders the Employee's
continued employment harmful to the Company; (v) substance abuse on the part of the Employee; or (vi) knowing and material failure by the Employee to comply with applicable laws, regulations and policies relating to the business of the Company or its Affiliates; or (vii) the Employee acting in bad faith relative to the Company's business interests. In the event the Company terminates this Agreement For Cause, Employee shall be entitled to receive only that Salary earned and Benefits accrued up to the date of
termination.

 

(c)     As used herein, "Disability" shall mean a physical or mental incapacity of the Employee that, in the good faith determination of the Company has prevented the Employee from performing the essential functions of his office and position or functions assigned the Employee by the Company
for 30 consecutive days or for a period of more than 60 days in the aggregate in any 12-month period and that, in the determination of the Company after consultation with a medical doctor appointed by the Company, may be expected to prevent the Employee for any period of time thereafter from devoting the Employee's full time and energies (or such lesser time and energies as may be acceptable to the Company in its sole discretion) to the Employee's duties as provided hereunder. The Employee's employment hereunder,
except as otherwise agreed to in writing between the Company and the Employee, shall cease as of the date of such determination. The Employee agrees to submit to medical examinations, at the Company's sole cost and expense, to determine whether a Disability exists pursuant to reasonable requests that the Company may make from time to time. In the event this Agreement is terminated by the Company under sub-paragraph 5 (a) (i) hereof, Employee or his legal representatives, as applicable, shall be entitled to receive
any outstanding Salary earned and Benefits then accrued, up to the date of the employee's death, or the date of termination in the event of disability, as applicable.

 

(d)     Additional Grounds for Termination by Company. The Company may terminate Employee's employment: (i) upon the bankruptcy or insolvency of Company; or (ii) in connection with the dissolution or liquidation of the Company.
In event of termination by the company under this sub-paragraph 5(d), the Company shall be obligated to Employee for the payment, at the times and upon the terms provided for herein, of the Employee's Salary for the number of full months remaining in the Primary Term of this Agreement, together with all unpaid Benefits awarded or accrued up to the date of termination.

 

(e)     Termination without Cause by Company. Notwithstanding the foregoing, Company shall have the right to terminate this Agreement and Employee's employment with the Company, without cause, at any time and such termination shall
become effective upon written notice by the Board to the Employee or at such later time as may be specified in the notice. If such termination occurs:

  

  

  

(i)     within 6 (six) months from the date of Commencement of the Primary Term, the Employee shall be entitled to the amount that would have accrued as his Salary for 1 (one) month from the date of termination;

 

(ii)    after the first 6 months from the date of Commencement of the Primary Term but before the expiration of 12 months from the date of Commencement of the Primary Term, the Employee shall be entitled to the amount that would have accrued as his Salary for 3 (three) months from the date of termination;

 

(iii)   after 12 months from the date of Commencement of the Primary Term, the Employee shall be entitled to any incentive compensation accrued up to the date of termination plus the amount that would have accrued as his Salary for 6 (six) months provided that if the period from the date of termination to the
expiration of the Primary Term is less than 6 (six) months, the Employee shall only be entitled to the amount that would have accrued as his Salary for the period left till the date of expiration of the Primary Term.

 

It is hereby agreed that any payment to which the Employee is entitled under this paragraph 5(e) shall be deemed to be the Employee's full and final termination entitlement including but not limited to severance remuneration (and hereinafter called "Termination Entitlement") in the circumstances. The Company shall have
the option of paying the Termination Entitlement in monthly installments as it customarily pays the Employee's Salary.

 

(f)     Termination by Employee. The Employee may terminate this Agreement at any time by giving the Company three months' prior notice in writing whereupon the Employment shall terminate at the expiration of the notice. Any termination
of this Agreement by the Employee shall entitle the Company to discontinue payment of all Compensation and Benefits, described in Paragraph 4 of this Agreement, accruing from and after the date of termination, and without limitation, the Employee will not be entitled to receive any incentive compensation not then vested in accordance with Paragraph 4 of this Agreement.

 

6.      Confidential Information. The Employee shall hold, both during the Employment and for a period of three (3) years thereafter, in a fiduciary capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its subsidiaries or corporate affiliates and their respective businesses and operations, including, without limitation, customer lists, pricing, bid strategy, business strategies, computer files and addresses, and corporate planning, which shall have been obtained by the Employee during the Employee's employment (whether prior to or after the date hereof) and which shall not have become public knowledge (other than by acts of the Employee or his representatives
in violation of this Agreement or by third parties in violation of an obligation of confidentiality to Company). The Employee agrees (i) that, without the prior written consent of the Company or as may be otherwise required by law or legal process, he will not communicate or divulge any such information, knowledge or data to any party other than the Company and (ii) to deliver promptly to the Company upon its written request any confidential information, knowledge or data in his possession, whether produced by
the Company or any of its subsidiaries and corporate and joint ventures or any past, current or prospective activity of the Company or any of its subsidiaries and joint ventures. The obligations of the Employee set forth in this Paragraph 6 shall apply during the Employment and shall survive termination of this Agreement and/or the termination of the Employee's services for a period of three (3) years thereafter, regardless of the reason for such termination.

  

  

  

7.      No Soliciting. While Employee is employed by the Company and for two (2) years following the termination of Employee's employment with the Company, the Employee shall not request, induce or attempt to influence any
customers of the Company that have done business with or potential customers which have been in contact with the Company to curtail or cancel any business they may transact with the Company or request, induce or attempt to influence any employee of the Company to terminate his or her employment with the Company. The obligations of the Employee set forth in this Paragraph 7 shall apply during the Employment and shall survive termination of this Agreement and/or the termination of the Employee's services under
this Agreement for a period of two (2) years thereafter, regardless of the reason for such termination.

 

8.      Limited Covenant Not to Compete.

 

(a)     While Employee is employed by the Company and for a period of two (2) years following the Employment Term, the Employee will not, directly or indirectly, own, manage, operate, control, be employed by, participate in, or be connected in any manner with the ownership, management, operation
or control of any company or other business enterprise (all of which are hereinafter referred to as "entity") engaged in competition with the Company in the Federal Republic of Nigeria, the Joint Development Zone established by treaty between the Federal Government of Nigeria and the Democratic Republic of Sao Tome and Principe or within the Exclusive Economic Zone of the Democratic Republic of Sao Tome and Principe, so long as the Company and its Parent or any of its Affiliates or joint ventures is engaged in
such business; provided, however, that nothing contained herein shall prohibit the Employee from making investments in any entity which has securities listed in any national securities exchange or quoted on a daily listing of over-the-counter-market securities provided that at any one time the Employee and members of the Employee's immediate family do not own more than two percent (2%) of any voting securities of such entity.

 

(b)     As part of the consideration for the compensation and benefits to be paid to the Employee hereunder; to protect the trade secrets and confidential information of Company and its affiliates that have been and will in the future be disclosed or entrusted to the Employee, the business goodwill
of the Company and its affiliates that has been and will in the future be developed in the Employee, or the business opportunities that have been and will in the future be disclosed or entrusted to the Employee by the Company and its affiliates; and, as an additional incentive for the Company to enter into this Agreement, the Company and the Employee agree to the non-competition obligations hereunder. The obligations of the Employee set forth in this Section 8 shall apply during the Employment and shall survive
termination of this Agreement and/or the termination of the Employee's services under this Agreement for a period of two (2) years.

 

9.      Statements Concerning the Company. The Employee shall refrain, both during the Employment and following the termination of Employee's employment by the Company for any reason, from publishing any oral or written statement
about the Company, any of its affiliates, or any of such entities' officers, employees, agents or representatives that are slanderous, libelous or defamatory; or that disclose private or confidential information about the Company, any of its affiliates, or any of such entities' business affairs, officers, employees, agents or representatives; or that constitute an intrusion into the seclusion or private lives of the Company, any of its affiliates, or any of such entities' officers, employees, agents or representative
or that give rise to unreasonable publicity about the private lives of the Company, any of its affiliates, or any of such entities' officers, employees, agents or representatives; or that place the Company, any of its affiliates, or any of such entities' officers, employees, agents or representatives in a false light before the public; or that constitute a misappropriation of the name or likeness of the Company, any of its affiliates, or any of such entities, officers, employees, agents or representatives. A
violation or threatened violation of this prohibition may be enjoined by the courts. The rights afforded the Company and its affiliates under this provision are in addition to any and all rights and remedies otherwise afforded by law. The obligations of the Employee set forth in this paragraph 9 shall apply during the Primary Term and shall survive termination of this Agreement and/or the termination of the Employee's services, regardless of the reason for such termination.

  

  

  

 

10.    Property of the Company. All memoranda, lists, notes, records, manuals and related documents and other documents or papers (and all copies thereof) relating to the Company or its Affiliates, including such items stored in computer
memories, microfiche or by any other means, made or compiled by or on behalf of Employee, or made available to the Employee relating to the Company and its Affiliates, shall be the property of the Company and its Affiliates, and shall be delivered to the Company and its Affiliates promptly upon termination of the Employee's employment with the Company and its Affiliates or at any other time upon request; provided, however, that Employee's address books,
diaries, and rolodex files shall be deemed to be property of Employee.

 

11.    Injunctive Relief. If Employee breaches or threatens to breach Sections 6, 7, 8, 9 or 10 hereof, Employee specifically acknowledges that such breach or breaches shall be conclusively presumed to cause irreparable harm to the Company,
its affiliates, officers or directors entitling it to all equitable relief available at law or in equity including but not limited to a temporary restraining order, a temporary injunction and a permanent injunction. Employee stipulates and acknowledges that monetary recovery alone shall not be sufficient to compensate the Company in such events and waives proof thereof. Employee also waives the necessity for the Company to post a bond in any action sought to enforce the provision of this Agreement. Whenever a
bond is mandatory notwithstanding contractual exclusion otherwise, the minimum amount permitted by law shall be applicable.

 

12.    Binding Effect.

 

(a)     This Agreement shall be binding upon and inure to the benefit of the Company and any of its successors and assigns.

 

(b)     This Agreement is personal to the Employee and shall not be assignable by the Employee without the consent of the Company (there being no obligation to give such consent) other than such rights or benefits as are transferred by will or the laws of descent and distribution.

 

(c)     The Company will require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the assets or business of the Company (i) to assume unconditionally and expressly this Agreement and (ii) to agree to perform all
of its obligations under this Agreement in the same manner and to the same extent as would have been required of the Company had no assignment or succession occurred, such assumption to be set forth in a writing reasonably satisfactory to the Employee. In the event of any such assignment or succession, the term "Company" as used in this Agreement shall refer also to such successor or assign.

  

  

  

13.    Notices. Any notice or other communication required under this Agreement shall be in writing, shall be deemed to have been given and received when delivered in person, or, if mailed, shall be deemed to have been given when deposited
in the United States mail, registered or certified, return receipt requested, with proper postage prepaid, and shall be deemed to have been received on the third business day thereafter, and shall be addressed as follows:

 

If to the Company, addressed to:

The President/CEO ERHC

Energy Inc 5444 Westheimer

Road, Houston, TX 77056

United States of America Tel:

713 626 4700 Fax: 713 626 4704

 

If to the Employee, addressed to:

 

James Ledbetter

331 W Birch Dr

Mustang, OK 73064

 

Fax No.:

 

or such other address as to which any party hereto may have notified the other in writing.

 

14.    Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Texas, exclusive of any conflict of law rules which may refer to the laws of the another jurisdiction.

 

15.    Entire Agreement. This Agreement and the documents referred to herein, contain or refer to the entire arrangement or understanding between the Employee and the Company relating to the employment of the Employee by the Company,
and all prior negotiations, communications, commitments, agreements, and understandings, written or verbal, are merged and incorporated herein. This Agreement supercedes any other employment or non-competition agreements existing between the parties. No provision of the Agreement may be modified or amended except by an instrument in writing signed by or for both parties hereto. The parties hereto acknowledge, stipulate and agree that this Agreement was jointly prepared, negotiated and drafted by the parties and
their respective counsel, and agree that the presumption of a favorable interpretation for the non-drafting party in the event of ambiguity or any other matter of interpretation shall not apply.

 

16.    Severability. If any term or provision of this Agreement, or the application thereof to any person or circumstance, shall at any time or to any extent be invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law.

  

  

  

 

17.    Waiver of Breach. The waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach thereof.

 

18.    Remedies Not Exclusive. No remedy specified herein shall be deemed to be such party's exclusive remedy, and accordingly, in addition to all of the rights and remedies provided for in this Agreement, the parties shall have all
other rights and remedies provided to them by applicable law, rule or regulation.

 

19.    Beneficiaries. Whenever this Agreement provides for any payment to be made to the Employee or his estate, such payment may be made instead to such beneficiary or beneficiaries as the Employee may have designated in writing and
filed with the Company. The Employee shall have the right to revoke any such designation from time to time and to re-designate any beneficiary or beneficiaries by written notice to the Company.

 

20.    Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. Facsimile signatures shall have
the effect of delivered originals.

 

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

 

	  	
EMPLOYER:

	 	 
	  	
ERHC Energy Inc

	 	 
	  	  	  
	  	
By:
	
/s/ Nicolae Luca

	  	
Name:
	
Nicolae Luca

	  	
Title:
	
Interim   CEO

	  	  	  
	  	  	  
	  	
EMPLOYEE:

	  	  
	  	
/s/ James M Ledbetter

	  	
11/14/2006

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