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Exhibit 10.8
Consulting Agreement (Xxxx Xxxxx)
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CONSULTING AGREEMENT
This Agreement is entered into this the 1st day of April 1998, by and
between Lone Star International Energy, Inc., ("Lone Star"), 000 Xxxxx Xxxx,
Xxxxxxx Xxxxx, Xxxxx 00000, and Xxxx X. Xxxxx, ("Xxxxx"), 00 XX 0xx Xxxxxx,
Xxxxxx Xxxxx, Xxxxxxx 00000.
RECITALS
WHEREAS, Lone Star is a public company with its stock trading on the
NASDAQ Bulletin Board under the symbol "LNST", and is engaged in the oil and gas
production and development business and through its wholly owned subsidiary,
Energy Reclaim Refrigeration, Inc. ("Energy"), in the development and
manufacturing of certain patented alternative energy devices; and,
WHEREAS, Xxxxx is engaged in the private consulting business and has
over his career gained experience and knowledge in the public companies arena,
including funding, mergers and acquisitions, risk management, and securities
regulations; and,
WHEREAS, Lone Star wishes to retain the services of Xxxxx to serve as a
consultant to its corporate management regarding his areas of knowledge and
experience, and Xxxxx desires to establish a relationship with Lone Star and to
provide certain services as a consultant.
NOW THEREFORE, in consideration of the following terms and conditions,
the parties hereby agree as follows:
1. Lone Star shall retain the services of Xxxxx as a consultant
to corporate management, to provide such services as may be
directed by such management from time to time, including, but
not limited to:
a. Assist in promoting Lone Star's Montana oil and gas
property, with particular emphasis on locating
potential partners for the development. Xxxxx will
limit this activity to simply identifying the
potential sources, but the details of the particular
investment shall be negotiated by Lone Star's
management.
b. Negotiate on behalf of Lone Star with the holders of
the currently outstanding debentures (i.e. Xxxxx
Xxxxx), for the purpose of securing a resolution to
the debenture issue that will be more favorable to
Lone Star, and will have the potential of helping to
provide positive news to the market eliminating the
fears of major dilution to current shareholders with
the intent in securing a more stable market support
and share price.
c. Assist Lone Star in its efforts to increase market
support for its stock.
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d. Assist Lone Star in formulating a possible plan of
corporate reorganization that may involve a merger
and/or spin-off of Energy as a separate public
vehicle. This may include the research and location
of potential suitable merger candidates, as well as
assisting management in its analysis of options
presented to Lone Star by others, or generated
internally.
e. Assist Lone Star upon request in securing a
settlement of outstanding litigation against the
company. This may include assisting Lone Star in the
pursuit of its claim against Merit Capital.
f. At the request of Lone Star, consult with and assist
in advising and developing strategies with the
companies outside securities and litigation counsel.
g. Provide such other services as may be requested from
time to time by Lone Star.
2. As consideration for the foregoing services, Lone Star agrees
that Xxxxx shall be paid as follows:
a. An initial non-refundable cash retainer of $5,000.00,
payable upon execution of this agreement, together
with a secondary retainer of $50,000.00 which may be
payable in cash or stock or a combination thereof, at
the sole discretion of Lone Star. In the event stock
is used, Lone Star agrees to make available shares
that are registered as S-8 free trading shares, with
the number of shares to be determined by the market
price of such securities on the date payment is to be
made, or as otherwise agreed by the parties. Such
secondary retainer to be paid upon the effective date
of this agreement or at such other time as may be
mutually agreed by the parties.
b. Options to secure shares of Lone Star stock equal to
250,000 shares at $1.50 per share, exercisable within
2 years from the effective date hereof, together with
options to secure 250,000 shares at $3.00 per share
exercisable within 3 years from the effective date
hereof. The options granted herein shall carry
registration rights in accordance with an S-3
Registration.
3. It is understood that Xxxxx shall be responsible for all of
his reasonable and necessary fees and expenses including
travel, meals, telephone, etc. incurred in connection with his
services performed hereunder. In the event Lone Star request
services of Xxxxx that would involve the expenditure of
significant expenses, (i.e. international travel), Lone Star
shall approve such expenses in advance, and shall provide an
expense advance to cover same.
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4. The parties acknowledge that during the term of this agreement
and in the course of the discharge of his duties hereunder,
Xxxxx may have access to and become acquainted with
information concerning the operation and processes of Lone
Star, including without limitation, financial, personnel,
sales, scientific and other information that is owned by Lone
Star and regularly used in the operation of its business.
Xxxxx specifically agrees that he shall not knowingly or
willfully misuse, misappropriate, or disclose any such
information directly or indirectly to any other person or use
it in any way, either during the term of this agreement or at
any other time thereafter, except as required in the course of
his duties hereunder, or as requested by a governmental agency
with proper authority.
5. This agreement shall have a primary term of one year from the
effective date. Lone Star reserves the right to terminate this
agreement at any time and for any reason upon 30 days written
notice to Xxxxx. Such notice shall be considered given upon
being deposited in the U.S. Mail, postage prepaid, and
addressed to Xxxxx at the address first herein mentioned.
6. This Agreement shall be governed by the laws of the State of
Texas, and any disputes which may arise shall be submitted to
arbitration with venue in Tarrant County, Texas. The parties
agree that any ruling made through the arbitration procedures
in effect in Tarrant County, Texas, shall be binding so as to
resolve any matters in controversy.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first above mentioned.
Lone Star International Energy, Inc.
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Xxxxxxx Xxxxx,
President
Consultant:
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Xxxx X. Xxxxx
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