EXHIBIT 10.11
CONSULTING AGREEMENT WITH XXXXXX XXXXXX, CEO AND CFO
CORPORATE ADVISOR / DIRECTOR/CONSULTING
ENGAGEMENT AGREEMENT
AGREEMENT made as of this 1st day of June, 2011 by and between South
Uintah Gas Properties, Inc. (the "Company"), address: 0000 Xxxxxxx Xxxx, Xxxxxx,
Xxxxxxxx 00000, and Xxxxxx X. Xxxxxx (the "Consultant"), address: 0000 X Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
WHEREAS, the Company desires professional guidance and advice regarding
public company and energy and desires Consultant to act as a Board Member and
Chief Financial Officer; and
WHEREAS, Consultant has expertise in the area of public companies and
energy companies and extensive finance background; and is willing to act as an
advisor, consultant, Chief Financial Officer and Board Member to the Company
upon the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises herein contained, the parties hereto agree as follows:
1. DUTIES, SCOPE OF AGREEMENT, AND RELATIONSHIP OF THE PARTIES
(a) The Company hereby agrees to retain Consultant as Board Member and
Chief Financial Officer, and Consultant agrees to act as Board Member and Chief
Financial Officer for the Company during the term of this Agreement. All parties
understand that Consultant has many other business interests and will initially
devote 10 hours per week to Chief Financial Officer related under this
Agreement. In addition, the company understands that consultant's efforts on
behalf of his other interests are the sole and separate property of Consultant.
(b) The services rendered by consultant to the company pursuant to this
Agreement shall be as an independent contractor, and this Agreement does not
make Consultant the employee, agent, or legal representative of the Company for
any purpose whatsoever, including without limitation, participation in any
benefits or privileges given or extended by the Company to its employees. No
right or authority is granted to Consultant to assume or to create any
obligation or responsibility, express or implied, on behalf of or in the name of
the company, except as may be set forth herein. The company shall not withhold
for Consultant any federal or state taxes from the amounts to be paid to
consultant hereunder, and Consultant agrees that he will pay all taxes due on
such amounts.
(i) Consultant will be responsible for the financial books and
records of the Company and will have such authorities as would normally accrue
to a Chief Financial Officer, such as approving contracts, expenditures, signing
checks and otherwise issuing funds, certifying to financial and other Company
information, etc.
(c) Consultant agrees to make available to Company its services as a
Board Member on an as needed basis on reasonable request and 10 hours per week
for Chief Financial Officer related services.
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2. COMPENSATION
(a) The Company will issue 300,000 shares of restricted common stock
and 300,000 warrants as described in Attachment A to Consultant as a retainer
and $5,000 per month beginning July 1, 2011to perform Chief Financial Officer
services. Company shall issue said shares and warrants within sixty (60) days
from the execution of this Agreement by both parties.
(b) Other forms of compensation for additional services may occur
depending on the nature of a specific engagement and only upon the mutual
agreement of both parties.
3. EXPENSES
The Company shall reimburse Consultant for all pre-approved reasonable
and necessary expenses incurred by it in carrying out its duties under this
Agreement. Consultant shall submit related receipts and documentation with his
request for reimbursement.
4. RENEWAL; TERMINATION
(a) This Agreement shall continue in effect for 1 year until terminated
by the parties. Either the Company or the Consultant may terminate this
Agreement by giving the other party thirty (30) days written notice. However,
termination of Consultant by the Company shall not relieve the Company of its
financial obligations to Consultant as defined herein. Death the Consultants
inability to continue performing his duties under the Contract will relieve the
Company of its financial obligations to Consultant as defined herein.
(b) Subject to the continuing obligations of Consultant under Section 5
below, either party may terminate this Agreement at any time if the other party
shall fail to fulfill any material obligation under this Agreement and shall not
have cured the breach within 10 days after having received notice thereof.
(c) Termination or expiration of this Agreement shall not extinguish
any rights of compensation that shall accrue prior to the termination.
5. CONFIDENTIAL INFORMATION
(a) "Confidential Information," as used in this Section 5, means
information that is not generally known and that is proprietary to the Company
or that the Company is obligated to treat as proprietary. This information
includes, without limitation:
(i) Trade secret information about the Company and its
products;
(ii) Information concerning the Company's business as the
Company has conducted it since the Company's
incorporation or as it may conduct it in the future;
and
(iii) Information concerning any of the Company's past,
current, or possible future products, including
(without limitation) information about the Company's
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research, development, engineering, purchasing,
manufacturing, accounting, marketing, selling, or
leasing efforts.
(b) Any information that Consultant reasonably considers Confidential
Information, or that the Company treats as Confidential Information, will be
presumed to be Confidential Information (whether Consultant or others originated
it and regardless of how it obtained it).
(c) Except as required in its duties to the Company, Consultant will
never, either during or after the term of this Agreement, use or disclose
confidential Information to any person not authorized by the Company to receive
it for a period of two (2) years after termination of this Agreement. However,
information in the possession of Consultant as of the Effective Date of this
Agreement, information that is public or becomes public, or information that is
required to be disclosed by a bona fide legal authority is exempt from this
Agreement.
(d) If this Agreement is terminated, Consultant will promptly turn over
to the Company all records and any compositions, articles, devices, apparatus
and other items that disclose, describe, or embody Confidential Information,
including all copies, reproductions, and specimens of the Confidential
Information in its possession, regardless of who prepared them. The rights of
the Company set forth in this Section 5 are in addition to any rights of the
Company with respect to protection of trade secrets or confidential information
arising out of the common or statutory laws of the State of Colorado or any
other state or any country wherein Consultant may from time to time perform
services pursuant to this Agreement. This Section 5 shall survive the
termination or expiration of this Agreement.
(e) Consultant agrees to enter into a 16(b) Plan for any sales of
shares of company, subject to the Plans approval by the company in writing.
6. FALSE OR MISLEADING INFORMATION
The Company warrants that it will provide Consultant with accurate
financial, corporate, and other data required by Consultant and necessary for
full disclosure of all facts relevant to any efforts required of Consultant
under this Agreement. Such information shall be furnished promptly upon request.
If the Company fails to provide such information, or if any information provided
by the Company to Consultant shall be false or misleading, or if the Company
omits or fails to provide or withholds relevant material information to
Consultant or to any professionals engaged pursuant to paragraph 5(d) above,
then, in such event, any and all fees paid hereunder will be retained by
Consultant as liquidated damages and this Agreement shall be null and void and
Consultant shall have no further obligation hereunder. Further, by execution of
this Agreement, the Company hereby indemnifies Consultant from any and all costs
for expenses or damages incurred, and holds Consultant harmless from any and all
claims and/or actions that may arise out of providing false or misleading
information or by omitting relevant information in connection with the efforts
required of Consultant under this Agreement.
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7. CONSULTANT'S BEST EFFORTS AND NO WARRANTY OF INFORMATION
Consultant shall use its best efforts to use reliable information and
scientific techniques associated with the oil and gas business. However,
Consultant makes no warranty as to the completeness or interpretation of such
information, nor does Consultant warrant the information with regard to errors
or omissions contained therein. Any reserve estimates, price calculations, price
forecasts, exploration potential predictions or similar information provided by
Consultant are, or may well be, estimates only and should not be considered
predictions of actual results.
8. MISCELLANEOUS
(a) SUCCESSORS AND ASSIGNS. This Agreement is binding on and ensures to
the benefit of the Company. Company cannot assign this Agreement without
Consultant's written agreement.
(b) MODIFICATION. This Agreement may be modified or amended only by a
writing signed by both the Company and Consultant.
(c) GOVERNING LAW. The laws of Colorado will govern the validity,
construction, and performance of this Agreement. Any legal proceeding related to
this Agreement will be brought in an appropriate Colorado court, and both the
Company and Consultant hereby consent to the exclusive jurisdiction of that
court for this purpose.
(d) CONSTRUCTION. Wherever possible, each provision of this Agreement
will be interpreted so that it is valid under the applicable law. If any
provision of this Agreement is to any extent invalid under the applicable law,
that provision will still be effective, to the extent it remains valid. The
remainder of this Agreement also will continue to be valid, and the entire
Agreement will continue to be valid in other jurisdictions.
(e) WAIVERS. No failure or delay by either the Company or Consultant in
exercising any right or remedy under this Agreement will waive any provision of
the Agreement, nor will any single or partial exercise by either the Company or
Consultant of any right or remedy under this Agreement preclude either of them
from otherwise or further exercising these rights or remedies, or any other
rights or remedies granted by any law or any related document.
(f) CAPTIONS. The headings in this Agreement are for convenience only
and do not affect this Agreement's interpretation.
(g) ENTIRE AGREEMENT. This Agreement supersedes all previous and
contemporaneous oral negotiations, commitments, writings, and understandings
between the parties concerning the matters in this Agreement.
(h) NOTICES. All notices and other communications required or permitted
under this Agreement shall be in writing and sent by registered first-class
mail, postage prepaid, and shall be effective five days after mailing to the
addresses stated below. These addresses may be changed at any time by like
notice.
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In the case of the Company:
South Uintah Gas Properties, Inc.
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
In the case of Consultant:
Xxxxxx X. Xxxxxx
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
000-000-0000
xxxxxx.xxxxxx@xxxxxxxxxxx.xxx
(i) INDEMNIFICATION. Company agrees to indemnify and hold harmless
Consultant from any and all claims, actions, liabilities, costs, expenses,
including attorney fees arising from claims made against Consultant in
connection with Company's possession or use of advice, guidance, materials,
information, data or other services provided by Consultant under this Agreement.
(j) CONFLICTS OF INTEREST. Company acknowledges that Consultant is
engaged in the business of providing consulting for other companies in the oil
and gas industry within the North America and Asia. In the event Consultant is
requested by Company to provide advice and guidance on or about issues that may
create a potential conflict of interest between Consultant's other business
matters and the Company's operations, Consultant shall not be required by
Company to render advice and guidance on such an area. Company and Consultant
shall use their best efforts to notify each other of any potential conflicts of
interests. In any event, Consultant's general knowledge that Company plans to
engage, or is actively engaging, related to the oil and gas industry shall in no
way preclude Consultant, or Consultant's business entities, from providing
services or consulting for other oil and gas companies within the same area.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
"The Company" "Consultant"
SOUTH UINTAH GAS PROPERTIES, INC. XXXXXX X. XXXXXX
By: By:
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EXHIBIT A
TERM SHEET
INITIAL WARRANTS AWARD
WARRANTS. Subject to the Vesting Requirements of the Consulting
Agreement and this Exhibit, Company will grant Consultant warrants to purchase
up to 300,000 shares of Company common stock, with 100,000 at $1.00 per share
and 200,000 at $3 per share in the form attached hereto as Exhibit B.
1. The warrants will be vested in Consultant and exercisable on
the first anniversary of the grant date.
2. Warrants will have a term of 3 years.
3. Company agrees to register the Company's shares subject to the
warrant on Form S-8 or such other registration form as may be
available, and the company shall provide a cashless exercise
procedure.
4. Consultant agrees to execute a lock-up agreement if any
financing for the Company so requires.
