Document:

Employment agreement

 Exhibit 10.1 
  
 EMPLOYMENT AGREEMENT 
  

THIS EMPLOYMENT AGREEMENT, dated effective as of October 4, 2004 (the “Agreement”), is by and between Vertical Health Solutions, Inc.,
a Florida corporation (the “Company”), and Thaddeus J. Shalek. (the “Employee”). 
  
 WHEREAS, the Company is a manufacturer and distributor of nutritional supplements, and to a lesser extent pharmaceuticals, for veterinarians in the
companion animal sector. 
  
 WHEREAS, the Company wishes to assure
itself of the services of Employee for the period provided in this Agreement and Employee is willing to serve in the employ of the Company for such period upon the terms and conditions hereinafter set forth. 
  
 NOW THEREFORE, in consideration of the mutual covenants herein contained, the
parties, intending to be legally bound, hereby agree as follows: 
  
 1.
EMPLOYMENT. The Company hereby agrees to employ Employee upon the terms and conditions herein contained, and Employee hereby accepts such employment for the term described below. Employee agrees to serve as the Chief Financial Officer
of the Company during the term of this Agreement and shall report to the Company’s Board of Directors. In such capacity, Employee shall have such powers and responsibilities consistent with Employee’s position as the Chief Financial
Officer. Throughout the term of this Agreement, Employee shall devote Employee’s best efforts and substantially all of Employee’s business time and services to the business and affairs of the Company. 
  
 2. TERM OF AGREEMENT. The three (3) year initial term of the employment under
this Agreement shall commence as of the date set forth above (the “Effective Date”). After the expiration of such initial three-year period, the term of Employee’s employment hereunder shall automatically be extended without
further action by the parties for successive one (1) year renewal terms, provided that if either party gives the other party at least thirty (30) days advance written notice prior to the expiration of the then current term of such party’s
intention to not renew this Agreement for an additional term, the Agreement shall terminate upon the expiration of the current term. 
  
 3. SALARY AND BONUS 
  
 a. Employee shall receive an annual base salary during the term of this Agreement of $125,000 payable in installments consistent with the Company’s normal payroll
schedule; provided that the annual base salary shall be subject to periodic review and adjustment by the Compensation Committee and/or the Board of Directors of the Company in its discretion. 
  
 b. Employee shall also be eligible to participate in any executive bonus plan created by the
Board of Directors in the same manner and to the same extent as the other executives of the Company in the discretion of the Board of Directors as set forth by the Compensation Committee. 
  
 4. WELFARE AND FRINGE BENEFITS. 
  
 a. Automobile and Other Allowances. During the term hereof, the Company shall also provide Employee with an automobile allowance of up to $500.00 per month.

  
 b. Expenses. The Company shall reimburse Employee for all reasonable
expenses he incurs in promoting the Company’s business, including expenses for travel, entertainment of business associates, service and usage charges for business use of cellular phones, computer equipment and service fees and similar items,
upon presentation by Employee from time to time of an itemized account of such expenditures in a form acceptable to the Company. The Company shall reimburse employee for all reasonable expenses related to the move from Cleveland, Ohio, including but
not limited to packing, transportation of personal items, 

 lodging, food and other expenses incurred in the transition. Also the Company recognizes that the employee will
need reasonable time to move his family, dependent and dependent elderly parents and this time will not be subtracted from vacation time. 
  
 c. Vacation. Employee shall be entitled to an annual vacation of not less than three weeks, during which time his compensation shall be paid in full. 

 
 e. General. Employee and his dependents shall be eligible to participate in such
welfare benefit plans, programs, practices and policies of the Company as are generally applicable to other employees. Without limiting the foregoing, Employee shall be entitled to such other benefits as the Board of Directors and/or the
Compensation Committee of the Board of Directors may from time to time approve for him. 
  
 f. Education: The Company shall reimburse the employee for expenses incurred (books, tuition, fees, travel and lodging, etc.) to maintain his certification as a CPA and CVA and other licenses, organizations and SEC continued education
required for the CFO position. The time used for the education will not be considered as vacation or be treated as any violation of any other provision in this agreement. 
  
 5. TERMINATION 
  
 a. Involuntary Termination. The Company may terminate Employee’s employment hereunder at any time by giving written notice to Employee of termination.
However, if Employee’s employment is terminated by the Company during the term of this Agreement pursuant to this Section 5(a), Employee shall be entitled to receive Employee’s base salary accrued through the date of
termination plus one additional year of base salary payable in the same manner as base salary was previously paid to Employee. 
  
 b. Disability. The Company shall be entitled to terminate Employee’s employment immediately if Employee becomes disabled (as defined below). Upon such
termination, the amount Employee shall be entitled to receive from the Company shall be limited to Employee’s base salary accrued through the date of termination and any payments as may be provided under any long-term disability plan or other
disability program or insurance policies maintained or provided by the Company. “Disabled” shall mean that for a period of three (3) consecutive months or an aggregate of four (4) months in any twelve (12) month period Employee is
incapable of fulfilling the duties of his or her position because of physical, mental or emotional incapacity, injury, sickness or disease. Any question as to the existence or extent of the disability upon which Employee and the Company cannot agree
shall be determined by a qualified, independent physician selected by the Company. The determination of any such physician shall be final and conclusive for all purposes. 
  
 c. Termination for Cause. The Company may terminate Employee’s employment hereunder for Cause (as defined below) immediately
without notice. If Employee’s employment is terminated by the Company for Cause, the amount Employee shall be entitled to receive from the Company shall be limited to Employee’s base salary accrued through the date of termination.

  
 For purposes of this Agreement, the term
“Cause” shall be limited to (i) embezzlement, fraud, misappropriation of corporate assets or a breach of the covenants set forth in Sections 9, 10 and 11 below; (ii) Employee being arrested or indicted in connection
with a felony; (iii) Employee being arrested or indicted of any lesser crime or offense committed in connection with the performance of Employee’s duties hereunder or involving moral turpitude; (iv) the habitual failure or refusal by Employee
to perform Employee’s duties hereunder after being provided with written warnings and a reasonable period to cure; or (v) chronic absenteeism. 
  
 d. Voluntary Termination by Employee. If Employee resigns or otherwise voluntarily terminates Employee’s employment before the end of the current term of this
Agreement, other than pursuant to the provisions of Section 5(e) of this Agreement, the amount Employee shall be entitled to receive from the Company shall be limited to Employee’s base salary accrued through the date of
termination. 

 e. Termination for Good Reason by Employee. Employee may terminate this Agreement for “Good Reason” (as
defined below), provided that he shall first provide the Company with prior written notice, which notice shall state with specificity the reason for the termination and provide the Company with thirty (30) days from and after the giving of such
notice to cure the breach. If the Company fails to cure the breach within such thirty days, Employee shall be entitled to receive Employee’s base salary accrued through the date of termination plus one additional year of base salary payable in
the same manner as base salary was previously paid to Employee. For purposes of Section 5(e), the Executive shall have “Good Reason” to terminate his employment hereunder if such termination shall be the result of:

  

	 	(i)	any material demotion regarding Employee’s status, title, authorities or responsibilities (including reporting responsibilities) under this Employment Agreement; or

  

	 	(ii)	any “Cause” as covered in section 5 c. above by any officer of the Company (that would harm the status of the Company or reputation of the Company and/or CFO.)

  
 6. DEATH. If Employee dies during the term of this
Agreement, the Company shall pay to Employee’s estate a lump sum payment equal to the sum of Employee’s base salary accrued through the date of death plus the total unpaid amount of any bonuses earned. In addition, the death benefits
payable by reason of Employee’s death under any retirement, deferred compensation or other employee benefit plan maintained by the Company shall be paid to the beneficiary designated by Employee in accordance with the terms of the applicable
plan or plans. 
  
 7. CHANGE OF CONTROL. 
  
 a. Salary. Upon a Change in Corporate Control (as defined below), if there is a
reduction in the Employee’s base salary, the Employee shall have the option to terminate his Employment and should Employee elect to terminate his Employment, the Company shall be obligated to make a series of twelve (12) monthly payments to
the Employee. Each monthly payment shall be equal to the sum of one-twelfth ( 1/12th) of the Employee’s annual
base salary, as in effect on the date of termination, provided that if the Employee obtains a replacement position with any new employer (including a position as an officer, employee, consultant, or agent, or self-employment as a partner or
sole proprietor), the payments shall be reduced by all amounts the Employee receives as compensation for services performed during such period. 
  
 b. Restricted Stock. Further, upon a Change in Corporate Control, the vesting of any restricted stock granted to the Employee under the terms of the Company’s
Employee Restricted Stock Plan shall become immediately vested in full and exercisable in full. 
  
 c. Definition. For purposes of this Agreement, a “Change in Corporate Control” shall include any of the following events: i. The acquisition in one or more transactions of more than thirty percent
(30%) of the Company’s outstanding Common Stock by any corporation, or other person or group (within the meaning of Section 14(d)(3) of the Securities Exchange Act of 1934, as amended). 
  

	 	i.	Any merger or consolidation of the Company into or with another corporation in which the Company is not the surviving entity, or any transfer or sale of substantially all of the
assets of the Company or any merger or consolidation of the Company into or with another corporation in which the Company is the surviving entity and, in connection with such merger or consolidation, all or part of the outstanding shares of Common
Stock shall be changed into or exchanged for other stock or securities of any other person, or cash, or any other property. 

  

	 	ii	Any person, or group of persons, announces a tender offer for at least thirty percent (30%) of the Company’s Common Stock. 

 d. Limitation. Notwithstanding anything else in this Agreement, the amount of severance compensation payable to
the Employee as a result of a Change in Corporate Control under this Section 7, or otherwise, shall be limited to the maximum amount the Company would be entitled to deduct pursuant to Section 280G of the Internal Revenue Code of 1986,
as amended. 
  
 8. WITHHOLDING. The Company shall, to the extent
permitted by law, have the right to withhold and deduct from any payment hereunder any federal, state or local taxes of any kind required by law to be withheld with respect to any such payment. 
  
 9. PROTECTION OF CONFIDENTIAL INFORMATION. Employee agrees that Employee shall
keep all confidential or proprietary information of the Company or relating to its business (including, but not limited to, information regarding the Company’s customers, vendors, pricing policies, methods of operation, proprietary computer
programs and trade secrets) confidential, and that Employee shall not (except with the Company’s prior written consent), while in the employ of the Company or thereafter, disclose any such confidential information to any person, firm,
corporation, association or other entity, other than in furtherance of Employee’s duties hereunder, and then only to those with a need to know. Employee shall not make use of any such confidential information for Employee’s own purposes or
for the benefit of any person, firm, corporation, association or other entity (except the Company) under any circumstances during or after the term of Employee’s employment. The foregoing shall not apply to any information which, is generally
disclosed to the public by the Company or is otherwise in the public domain at the time of disclosure. 
  
 Employee recognizes that because Employee’s work for the Company shall bring Employee into contact with confidential and proprietary information of
the Company, the restrictions of this Section 9 are required for the reasonable protection of the Company and its investments and for the Company’s reliance on and confidence in Employee. 
  
 Further, Employee agrees that upon request or upon termination of this
Agreement (for any reason), Employee shall deliver to the Company any and all drawings, notes, documents and other materials which he has received from the Company or which have originated from the employment activity. 
  
 10. COVENANT NOT TO COMPETE 
  
 a. Employee hereby agrees that Employee shall not, either during the employment term or
during a period of one (1) year from the time Employee’s employment under this Agreement ceases or is terminated (for whatever reason), engage in any business activities on behalf of any enterprise which competes with the Company. Employee
shall be deemed to be engaged in such competitive business activities if Employee participates in such a business enterprise as an employee, officer, director, consultant, agent, partner, proprietor, or other participant; provided that the ownership
of no more than 2 percent of the stock of a publicly traded corporation engaged in a competitive business shall not be deemed to be engaging in competitive business activities. 
  
 11. OWNERSHIP OF DEVELOPMENTS 
  
 a. All copyrights, patents, trade secrets, or other intellectual property rights associated with any ideas, concepts, techniques, inventions, processes, or works of
authorship develop or created by Employee during the course of performing work for the Company or its clients (collectively, the “Work Product”) shall belong exclusively to the Company and shall, to the extent possible, be
considered a work made by Employee for hire for the Company within the meaning of Title 17 of the United States Code. To the extent the Work Product may not be considered work made by Employee for hire for the Company, Employee agrees to assign and
automatically assigns to the Company at the time of creation of the Work Product, without any requirement of further consideration, any right, title, or interest Employee may have in such Work Product. Upon the request of the Company, Employee shall
take such further actions, including execution and delivery of instruments of conveyance, as may be appropriate to give full and proper effect to such assignment. 

 b. Solely for purposes of Sections 9, 10, 11 and 12 hereof only, the term “Company” also
shall include any existing or future subsidiaries of the Company that are operating during the time periods described herein and any other entities that directly or indirectly, through one or more intermediaries, control, are controlled by or are
under common control with the Company during the periods described herein. 
  
 12.
INJUNCTIVE RELIEF 
  
 a. Employee acknowledges and agrees that it
would be difficult to fully compensate the Company for damages resulting from the breach or threatened breach of the covenants set forth in Sections 9, 10 and 11 of this Agreement and accordingly agrees that the Company shall be
entitled to temporary and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, to enforce such provisions in any action or proceeding instituted in any court having subject matter
jurisdiction, without having to post a bond or other security. This provision with respect to injunctive relief shall not, however, diminish the Company’s right to claim and recover damages. Employee agrees to pay to the Company all costs and
expenses incurred by the Company relating to the enforcement of the terms of Sections 9, 10 and 11 hereof, including reasonable fees and disbursements of counsel (both at trial and appellate proceedings). 
  
 b. It is expressly understood and agreed that although the parties consider the restrictions
contained in this Agreement to be reasonable, if a court determines that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction on the activities of Employee, no such provision of this Agreement
shall be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such extent as such court may judicially determine or indicate to be reasonable. 
  
 c. Employee acknowledges and confirms that (a) the restrictive covenants contained in Sections 9 and 10 hereof are reasonably
necessary to protect the legitimate business interests of the Company, and (b) the restrictions contained in Sections 9 and 10 hereof (including without limitation the length of the term of the provisions of Sections 9 and
10 hereof) are not overbroad, overlong, or unfair and are not the result of overreaching, duress or coercion of any kind. Employee further acknowledges and confirms that Employee’s full, uninhabited and faithful observance of each of
the covenants contained in Sections 9 and 10 hereof shall not cause Employee any undue hardship, financial or otherwise, and that enforcement of each of the covenants contained herein shall not impair Employee’s ability to obtain
employment commensurate with Employee’s abilities and on terms fully acceptable to Employee or otherwise to obtain income required for the comfortable support of Employee and Employee’s family and the satisfaction of the needs of
Employee’s creditors. Employee acknowledges and confirms that Employee’s special knowledge of the business of the Company is such as would cause the Company serious injury or loss if Employee were to use such ability and knowledge to the
benefit of a competitor or were to compete with the Company in violation of the terms of Sections 9 and 10 hereof. Employee further acknowledges that the restrictions contained in Sections 9 and 10 hereof are intended to
be, and shall be, for the benefit of and shall be enforceable by, the Company’s successors and assigns. 
  
 d. If Employee shall be in violation of any provision of Sections 9 and 10, then each time limitation set forth in the applicable section shall be extended for a period of time equal to the period of
time during which such violation or violations occur. If the Company seeks injunctive relief from such violation in any court, then the time limitations shall be extended for a period of time equal to the pendency of such proceeding including all
appeals by Employee. 
  
 13. SEPARABILITY. If any provision of this
Agreement shall be declared to be invalid or unenforceable, in whole or in part, such invalidity or unenforceability shall not affect the remaining provisions hereof which shall remain in full force and effect. 

 14. ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the heirs and
representatives of Employee and the assigns and successors of the Company, but neither this Agreement nor any rights hereunder shall be assignable or otherwise subject to hypothecation by Employee. 
  
 15. ENTIRE AGREEMENT. This Agreement represents the entire agreement of the
parties and shall supersede any and all previous contracts, arrangements or understandings between the Company and Employee. The Agreement may be amended at any time by mutual written agreement of the parties hereto. 
  
 16. GOVERNING LAW; VENUE. This Agreement shall be construed, interpreted, and
governed in accordance with the laws of the State of Florida, other than the conflict of laws provisions of such laws. Hillsborough or Pinellas County, Florida shall be the proper venues for any litigation arising out of this Agreement. 

 
 17. COUNTERPARTS. This Agreement may be executed in one or more counterparts
all of which taken together shall constitute one and the same instrument. 
  
 18.
NOTICE. Any notice or other communication which is required or permitted under this Agreement shall be in writing and shall be deemed to have been given, delivered, or made, as the case may be (notwithstanding lack of actual receipt by
the addressee) (i) on the date sent if delivered personally or by cable, telecopy, telegram, telex, or facsimile (which is confirmed), (ii) three (3) business days after having been deposited in the United States mail, certified or registered,
return receipt requested, sufficient postage affixed and prepaid, or (iii) one (1) business day after having been deposited with a nationally recognized overnight courier service (such as by way of example, but not limitation, U.S. Express Mail,
Federal Express, or Airborne), to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): 
  

			
	 If to the Company:
	  	 Vertical Health Solutions, Inc.
 855 Dunbar
Ave.
 Oldsmar, FL 34677
 Attention: Chief Executive
Officer

  

	
	 Tel: (727) 548-8345
 Fax: (727) 548-7134

  

	
	 With Copy to: Sichenzia, Friedman & Ross

  
 1065
Avenue of the Americas 
 New York, NY 10018 
 Attention: Tom Rose 
  

					
	 If to the Employee:
	 	 	  	 Thaddeus J. Shalek
 14160 Uhlin Drive
 Middleburg Heights, Ohio 44130
 Tel: (440) 884-3113
 Tel: (216) 642-9140
 Fax : (216) 520-1952

 IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed, and the Employee
has hereunto set Employee’s hand, as of the day and year first above written. 
  

			
	VERTICAL HEALTH SOLUTIONS, INC.
		
	By:	 	 /s/ STEPHEN M. WATTERS

	Name:	 	Stephen M. Watters
	Title:	 	Chief Executive Officer
	Date:	 	October 4, 2004

  

			
	EMPLOYEE:
		
	 	 	 /s/ THADDEUS J. SHALEK

	Name:	 	Thaddeus J. Shalek
	Date:	 	October 4, 2004Transitional Services Agreement

 EXHIBIT 10.1 
  
 TRANSITIONAL SERVICES AGREEMENT 
  
 THIS TRANSITIONAL SERVICES AGREEMENT (this “Agreement”) is entered into as of October 1, 2004 (the “Execution Date”), by
and between TXU Gas Company LP (“TXU Gas”) and Atmos Energy Corporation (“Atmos Energy”). TXU Gas and Atmos Energy are referred to collectively as the “Parties” and individually as a
“Party”. 
  
 WHEREAS, the Parties desire that TXU
Gas continue to provide the services set forth in this Agreement to Atmos Energy for a transition period after the Execution Date. 
  
 NOW, THEREFORE, in consideration of the foregoing, the Parties agree as follows: 
  
 ARTICLE I 
 SERVICES 
  
 1.1 The Services. TXU Gas shall
provide or cause to be provided to Atmos Energy the Services set forth in Schedule 1. The Party providing or causing to be provided the Services hereunder shall be referred to herein as the “Service Provider” and the Party
receiving such Services shall be referred to herein as the “Service Recipient.” 
  
 1.2 Service Parameters. The Service Provider shall provide and the Service Recipient shall accept the Services, to the extent, but only to the
extent, that such Services were provided (by the Service Provider or by employees transferred to the Service Provider) immediately prior to the Execution Date, unless otherwise mutually agreed by the Parties. The Service Provider shall only be
obligated to provide the Services under the personnel availability conditions that such Services were provided by the Service Provider immediately prior to the Execution Date. Furthermore, the Services will be available only for purposes of
supporting the conduct of business substantially in the manner it was conducted immediately prior to the Execution Date, unless otherwise mutually agreed by the Parties. 
  
 1.3 Impracticability. The Service Provider shall not be required to provide any Service to the extent the performance
of such Service (a) becomes impracticable, in any material respect, as a result of a cause or causes outside the reasonable control of the Service Provider, (b) would require the Service Provider to violate any applicable laws, rules, or
regulations, or (c) would result in the breach of any agreement or other applicable contract existing on the Execution Date. 
  
 1.4 Information to be Furnished to Service Provider. The Service Recipient agrees to provide the Service Provider in a timely manner with
information necessary for, or reasonably requested by, the Service Provider to provide the Services required to be provided by the Service Provider hereunder. 
  

1.5 Additional Resources. In providing the Services, the Service Provider shall not be obligated to (a) hire any additional employees, (b)
maintain the employment of any specific employee, or (c) purchase, lease or license any additional equipment or materials. 

 ARTICLE II 
 TERM AND TERMINATION 
  
 Term. The Services shall commence on the date this Agreement is executed and continue for an initial term of one (1) year, and month to month thereafter until canceled by either Party with at least thirty (30) days’ prior
written notice. 
  
 ARTICLE III 
 COMPENSATION 
  
 3.1 Charges For Services. The charge for each Service will be calculated upon TXU Gas’ actual costs to provide such Service, provided that the
total cost of all Services provided hereunder, unless otherwise mutually agreed by the Parties, will not exceed $26,000,000 for the initial term of one (1) year as set forth in Section 2.1. 
  
 3.2 Payment Terms. The Service Provider shall bill the Service
Recipient monthly for all charges pursuant to this Agreement. Such bills shall be accompanied by reasonable documentation supporting such charges. Such invoices shall be paid within ten (10) days after receipt. Late payments shall bear interest at
the lesser of: (i) the Prime Rate as reported under “Money Rates” in the Wall Street Journal plus 4%, or (ii) the maximum rate allowed by law. The Service Provider may suspend its performance of this Agreement at any time, and for
such time, as undisputed charges due to the Service Provider remain outstanding more than thirty (30) days after the receipt of any such invoice. The term of this Agreement shall not be extended by the amount of time of any suspension under this
Section 3.2. 
  
 ARTICLE IV 
 GENERAL OBLIGATIONS; STANDARD OF CARE 
  
 4.1 Performance Standards. The Service Provider shall, to the extent applicable, use its reasonable commercial efforts to provide the Services in
accordance with its policies, procedures, and practices in effect immediately prior to the Execution Date and, in providing the Services, shall exercise the same degree of care and skill as it exercises in performing similar services for itself.

  
 4.2 DISCLAIMER OF WARRANTIES. EXCEPT AS
OTHERWISE SET FORTH HEREIN, THE SERVICE PROVIDER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE
SERVICES OR OTHER DELIVERABLES PROVIDED BY IT HEREUNDER. 
  
 4.3 Indemnification by the Service Recipient. With respect to the Services provided under this Agreement, the Service Recipient shall indemnify, defend, and hold harmless the Service Provider, as applicable, its officers, employees,
agents, and consultants from and against any and all liabilities that arise out of, or result from, the provision of Services by the Service Provider in accordance with this Agreement, other than liabilities arising solely from the gross negligence
or willful misconduct of the Service Provider or its agents or employees. Additionally, each Party will maintain policies of insurance with coverages, limits and deductibles that are reasonable and customary within the industry. 
  

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 4.4 Good Faith Cooperation. The Parties will use good faith efforts to cooperate with each other
in all matters relating to the provision and receipt of the Services. 
  
 4.5 Confidentiality. It is understood that from time to time in the performance of this Agreement, that the Parties may receive, or have access to, confidential or proprietary information of the other Party. As such, each Party
agrees to keep any such information confidential and not to disclose such confidential information to third parties. Notwithstanding the forgoing, each Party will have the right to make such disclosures, if any, to governmental agencies, courts of
law and to its affiliates, attorneys, auditors and accountants, as may be reasonably necessary. In the event a Party is required to provide such confidential information in a proceeding before a governmental agency or court of law, then such Party
will immediately notify the other Party, who may seek a protective order or confidentiality agreement, whichever is applicable, and the Party in possession of such confidential information will fully cooperate with the other Party in such efforts.
In the event a Party discloses such confidential information to its affiliates, attorneys, auditors or accountants, then such Party will nevertheless continue to have the obligation to protect such confidential information of the other Party, and
will remain liable for any failure to do so. 
  
 ARTICLE V

 RELATIONSHIP BETWEEN THE PARTIES 
  
 The relationship between the Parties established under this Agreement with respect to Services provided is that of independent contractors, and neither
Party shall be deemed an employee, agent, partner, or joint venturer of or with the other. The Service Provider will, subject to reimbursement pursuant to Article III, be solely responsible for the payment of any employment-related taxes, insurance
premiums, or employment benefits in respect of the performance of the Services by the Service Provider personnel under this Agreement. 
  
 ARTICLE VI 
 SUBCONTRACTORS 
  
 The Service Provider may engage one or more subcontractors to perform all or
any portion of its duties under this Agreement, provided that the Service Provider remains responsible for the performance of each such subcontractor in accordance with this Agreement, and the charges for the Services delegated to a subcontractor
shall be the lesser of (a) the amount charged by the subcontractor or (b) the amount that would have been payable to the Service Provider under Article III above if the Service Provider had provided such Services. 
  
 ARTICLE VII 
 FORCE MAJEURE 
  
 The Service Provider will be excused for any failure or delay in performing any of its obligations under this Agreement if such failure or delay is caused by Force Majeure. For the purposes of this Agreement, “Force Majeure” means
any circumstance or event beyond the 
  

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 reasonable control of the Party relying upon such event or circumstance, including, without limitation: any act of God;
any accident, explosion, fire, ice, earthquake, lightning, tornado, hurricane, or other severe weather condition or calamity; any civil disturbance, labor dispute, or labor or material shortage or interruption; any sabotage or acts of terrorism; any
acts of a public enemy, uprising, insurrection, civil unrest, war, or rebellion; or any action or restraint by court order or public or governmental authority or lawfully established civilian authorities. 
  
 ARTICLE VIII 
 MISCELLANEOUS 
  
 8.1 Entire Agreement. This Agreement and the Schedule attached hereto constitute the entire agreement between the Parties with respect to the subject matter hereof and thereof and shall supersede all prior written and oral and all
contemporaneous oral agreements and understandings with respect to the subject matter hereof and thereof. 
  
 8.2 Governing Law. This Agreement shall be governed and construed and enforced in accordance with the laws of the State of Texas as to all matters,
without regard to principles of conflicts of laws that would require the application of the law of another state. 
  
 8.3 Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. 
  
 8.4 Notices. Any
notice, demand, offer, request, or other communication required or permitted to be given by either Party pursuant to the terms of this Agreement shall sent to the other Party’s address set forth below, and will be deemed to be received: (i)
when placed in the United States Mail, postage pre-paid, if mailed; or (ii) when actually received, if delivered by any other means: 
  

			
	 TXU Gas Company LP
	 	 Atmos Energy Corporation

	 1601 Bryan Street
	 	 1800 Three Lincoln Centre

	 42nd
Floor
	 	 5430 LBJ Freeway

	 Dallas, Texas 75201
	 	 Dallas, Texas 75240

  
 8.5 Assignability;
Third-Party Beneficiaries. Neither Party may, directly or indirectly, in whole or in part, whether by operation of law or otherwise, assign or transfer this Agreement, without the other Party’s prior written consent, which consent will not
be unreasonably withheld; provided, however, either Party may transfer its interests, rights and obligations under this Agreement without consent to (i) any parent, (ii) any affiliate, (iii) any individual, bank, trustee, company or corporation as
security for any note, notes, bonds or other obligations or securities of such assignor; or (iv) any party that acquires all or substantially all of the transferring Party’s assets. Each Party shall cause the transferee of any assets necessary
for the provision of any Services hereunder or of any documents or records to which either party may be entitled to access hereunder to be bound by the terms of this Agreement with respect thereto. This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective legal representatives and permitted successors and assigns, and nothing in this Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement. 
  

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 8.6 Severability. If any term or other provision of this Agreement is determined by a
nonappealable decision by a court, administrative agency or arbitrator to be invalid, illegal, or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to either Party. Upon such determination that any term or other provision is invalid, illegal,
or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby
are fulfilled to the fullest extent possible. 
  
 8.7 Failure
Or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the part of either Party hereto in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty, or agreement herein, nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or of any other right. All rights and remedies existing under this Agreement are cumulative to,
and not exclusive of, any rights or remedies otherwise available. 
  
 8.8 Amendment. No change or amendment will be made to this Agreement except by a written instrument signed on behalf of each of the Parties hereto. 
  
 8.9 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one
and the same Agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties. 
  

 5 

 IN WITNESS WHEREOF, the Parties have signed this Transitional Services Agreement effective as of the
Execution Date. 
  

			
	TXU Gas Company LP
		
	By:	 	TXU Gas Management Company LLC,
	 	 	Its General Partner
		
	 By:
	 	 /s/  MIKE McCALL

	 Title:
	 	 President

	
	Atmos Energy Corporation
		
	 By:
	 	 /s/  J. PATRICK REDDY

	 Title:
	 	 Senior Vice President and Chief Financial Officer

  

 6 

 Schedule 1: Services 
  

	•	Billing and Customer Information Services 

  
   The processing of information and data for customer accounts, calculations, preparation of bill print-ready files, and other
  activities in support of related processes. 
  

	•	Bill Printing and Mailing 

  
   The preparation of bills for mailing to customers and the mailing of bills complete with inserts, where appropriate. 
  

	•	Remittance Processing 

  
   The collection and clearing of payments by customer account. 
  

	•	Collections 

  
   The process of providing support to collect funds from past due customer accounts. 
  

	•	Customer Care Services 

  
   The handling of all customer communications. 
  

	•	New Construction Management 

  
   The process of working with contractors and builders to establish the customer’s premises in the System (as defined below) and
  schedule work orders for gas underground and gas meter installation. 
  

	•	Reporting 

  
   Information reports as currently provided or available. 
  

	•	Account Manager Services 

  
   A single point of contact within TXU Gas or its designee for handling requests from Atmos and providing information to Atmos. 
  

	•	Software Services 

  
   Normal quarterly updates of TXU Energy’s computer networks, software, and databases used to provide Customer Services (the
“System”), that have been   transferred to Atmos Energy. 
  

	•	System Changes 

  
   Any changes to the System that are reasonably necessary to comply with regulatory requirements applicable to the TXU Gas   assets
transferred to Atmos Energy.

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