STRATEGIC CONSULTING SERVICES AGREEMENT
This Strategic Consulting Services
Agreement (this “Agreement”), dated as of April
13, 2009 (the “Effective
Date”), is entered into between Xxxxxxx X. Xxxxxx (“CL”) and MGMT Energy, Inc., a
Nevada corporation (“MGMT”).
WHEREAS, MGMT wishes to engage
CL to provide the Services (as defined below) on the terms and conditions set
forth herein and CL wishes to be so retained;
NOW THEREFORE, in
consideration of the premises and of the mutual covenants, conditions and
agreements contained herein, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
ARTICLE
ONE
SERVICES
1.1 Strategic
Consulting Services. MGMT hereby
engages CL to perform the services set forth in Schedule 1 hereto (the “Consulting Services”) for the benefit of
MGMT, and CL agrees to perform such Consulting Services, on the terms and
conditions set forth herein.
1.2 Other
Services. MGMT may, from
time to time, engage CL to perform other services for the benefit of MGMT
(“Other
Services”). The scope of, the applicable fee for, and
any additional terms and conditions relating to any such Other Services shall be
reflected in a Services Addendum to this Agreement in the form of Exhibit A hereto, which shall
be signed by both parties as a condition to effectiveness.
1.3 Reporting. MGMT
shall have the right to request written reports at any time during the term of
this Agreement, which shall be furnished within five (5) days after such
request, describing the progress, status of, and other matters pertaining to the
Consulting Services and any Other Services provided pursuant to this Agreement
(collectively, the “Services”) as MGMT shall
request. MGMT may freely utilize all such information arising out of the
performance of the Services under this Agreement in any manner
desired.
ARTICLE
TWO
COMPENSATION
2.1 Compensation.
(a) Consulting
Services. In consideration for the Consulting Services,
MGMT will issue to CL (or CL’s designees, the “Designees”) an aggregate of
402,100 shares of its restricted common stock promptly following the execution
and delivery of this Agreement (the “Shares”). CL
hereby instructs the Company to issue certificates for the Shares in the
following amounts and to the following persons and entities:
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Xxxxxxx
X. Xxxxxx
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100,525
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CSL
Energy Fund, L.P.
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268,402
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CSL
Energy Master Fund, L.P.
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33,173
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(b) Other
Services. If MGMT, in its sole discretion, engages CL to
perform any Other Services, MGMT will pay to CL the fee specified for such Other
Services in the applicable Services Addendum (the “Other Services
Fee”).
2.2 Reimbursement. MGMT will
reimburse CL for any and all reasonable expenses incurred by CL in
connection with CL's performance of the Consulting Services and any Other
Services during the Term; provided, however,
that any such expenses must be pre-approved by MGMT and otherwise adhere to
control procedures implemented by MGMT. All requests for reimbursement for
expenses must be accompanied by documentation in form and detail reasonably
satisfactory to MGMT. MGMT will reimburse CL for expenses incurred in
compliance with this Section
2.2 within fifteen (15) days following MGMT’s receipt of CL’s invoice and
other documentation therefor.
ARTICLE
THREE
REPRESENTATIONS,
WARRANTIES AND COVENANTS
3.1 Representations
and Warranties. Each party
represents and warrants to the other that:
(a) It has not entered into any
agreement, whether written or oral, in conflict with this Agreement;
and
(b) It has the full power and authority
to enter into this Agreement and perform its obligations hereunder.
3.2 CL’s
Covenants. CL:
(a) shall act as an independent
contractor with no authority to obligate MGMT by contract or
otherwise;
(b) shall exercise only such powers and
perform such duties as may from time to time be assigned to CL by
MGMT;
(c) shall devote such time and effort
as is reasonably necessary to provide the Services;
(d) shall perform the Services in a
timely manner in accordance with standard practices in the industry and all
applicable laws, including, but not limited to, all applicable securities laws
and regulations; and
(e) shall not assign or subcontract
performance of this Agreement or any of the Services to any person, firm,
company or organization without MGMT’s prior written consent, which may be given
or withheld in MGMT’s sole discretion.
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ARTICLE
FOUR
CONFIDENTIAL
INFORMATION
4.1 Confidentiality. CL acknowledges
and agrees that the information, observations and data obtained by him and his
agents and employees during the course of performing the Services, including,
but not limited to, the results and proceeds of the Services, trade secrets,
know how, technical and business information, models, techniques, formula,
processes, samples, inventions and ideas, business plans, financial data and
business relations (“Confidential Information”),
whether or not marked as proprietary or confidential, are MGMT’s valuable,
special and unique assets. CL therefore agrees that he will not, nor
will he permit any of his agents or employees to, disclose to any person or
entity any of the Confidential Information, without MGMT’s prior written
consent, unless and to the extent that (a) the Confidential Information becomes
generally known to and available for use by the public otherwise than as a
result of CL’s acts or omissions to act, or (b) such disclosure is required to
be produced pursuant to an order of a court of competent jurisdiction or a valid
subpoena, provided that CL promptly notifies MGMT of such required disclosure
and reasonably cooperates with MGMT’s efforts to contest or limit the scope of
such disclosure.
4.2 Access. CL agrees to
limit the access to Confidential Information to only those persons under CL's
direct control who, with MGMT’s knowledge and consent, are responsible for
performing the Services set forth in Article One.
4.3 Return of
Information. Upon the
expiration or termination of this Agreement, CL will promptly return to MGMT all
materials, records, documents, and other MGMT Confidential Information in
tangible form. CL shall retain no copies except as required by law of
such materials and information and, if requested by MGMT, will delete all
Confidential Information stored on any computer or other electronic
device.
4.5 Third
Party Information. CL shall not, in connection with the
Services to be performed under this Agreement, disclose to MGMT any information,
which is confidential or proprietary to CL, or any third party.
4.6 Federal
Securities Laws. CL acknowledges and agrees that he is aware,
and will advise his employees and agents that the United States securities laws
may prohibit a person or entity that has material, non-public information
concerning matters of the type covered by this agreement from (a) purchasing or
selling securities of a company that may be, or may be affiliated with, a party
to a transaction of the type contemplated by this agreement, or (b) from
communicating such information to any other person or entity under circumstances
in which it is reasonably foreseeable that such person or entity is likely to
purchase or sell such securities.
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ARTICLE
FIVE
INDEMNITY;
LIMITATION OF LIABILITY
5.1 Indemnity.
(a) MGMT will indemnify and
hold harmless CL and his affiliates, and their respective officers, directors,
employees and agents (each, a “CL Party”), against any and
all losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses and disbursements (and any and all actions, suits,
proceedings and investigations in respect thereof and any and all legal and
other costs, expenses and disbursements in giving testimony or furnishing
documents in response to a subpoena or otherwise), including, without
limitation, the costs, expenses and disbursements, reasonably incurred, as and
when incurred, of investigating, preparing or defending any such action, suit,
proceeding or investigation (whether or not in connection with litigation in
which a CL Party is a party), directly or indirectly, caused by, relating to,
based upon, arising out of, or in connection with this Agreement or CL's
performance hereunder, except to the extent caused by a breach by a CL Party of
this Agreement or the gross negligence or willful misconduct of a CL
Party.
(b) CL will indemnify and
hold harmless MGMT and its affiliates, and their respective officers, directors,
employees and agents (each, an “MGMT Party”) against any and
all losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses and disbursements (and any and all actions, suits,
proceedings and investigations in respect thereof and any and all legal and
other costs, expenses and disbursements in giving testimony or furnishing
documents in response to a subpoena or otherwise), including, without
limitation, the costs, expenses and disbursements, reasonably incurred, as and
when incurred, of investigating, preparing or defending any such action, suit,
proceeding or investigation (whether or not in connection with litigation in
which MGMT is a party), directly or indirectly, caused by, relating to, based
upon, arising out of, or in connection with a breach by a CL Party of this
Agreement or a CL Party’s gross negligence or willful misconduct.
ARTICLE
SIX
TERM
AND TERMINATION
6.1 Term. Unless earlier terminated
pursuant to this Article
Six, the term of this Agreement shall be for a period of twenty-four (24)
months from the Effective Date (the “Term”).
6.2 Termination. This Agreement
may be terminated by either party upon 30 days prior written notice to the other
party.
6.3 Effect of
Termination. Upon the
expiration or termination of this Agreement, the provisions of this Agreement
shall terminate, except that the following provisions shall survive: Section 2.2, Article Four, Article Five, and Section 6.3, and Article Seven. The
expiration or termination of this Agreement shall not adversely affect the
rights or remedies of any party that accrued prior thereto.
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ARTICLE
SEVEN
MISCELLANEOUS
7.1 Relationship
of the Parties. Each of CL and MGMT hereby agree that CL will
perform the Services as an independent contractor, retaining control over and
responsibility for its own operations and personnel. Without limiting the
foregoing, CL acknowledges and agrees that neither he nor his employees or
agents shall have any right to any compensation or benefits that MGMT grants to
its employees, including any salary, pension, stock, bonus, profit sharing,
health or other benefits that are available to employees of MGMT, and CL will be
solely responsible for all insurance, employment taxes, FICA taxes and all
obligations to governments or other organizations arising out of this Agreement,
and acknowledges that no income, social security or other taxes will be withheld
or accrued by MGMT on CL’s behalf. CL will be responsible for making
appropriate filings and payments to the federal, state and local taxing
authorities, including payments of all taxes due on compensation received
hereunder, estimated income payments, employment and self-employment taxes, if
applicable.
7.2 Waiver. None of the terms of this
Agreement may be waived except by an express agreement in writing signed by the
party against whom enforcement of such waiver is sought. The failure
or delay of either party in enforcing any of its rights under this Agreement
shall not be deemed a continuing waiver of such right.
7.3 Entire
Agreement. This
Agreement constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements and understandings
among the parties (whether written or oral) relating to said subject
matter.
7.4 Amendments. This Agreement
may not be released, discharged, amended or modified in any manner except by an
instrument in writing signed by a duly authorized officer of MGMT and
CL.
7.5 Assignment. MGMT has
specifically contracted for the Services of CL and, therefore, CL may not assign
or delegate CL's obligations under this Agreement, either in whole or in part,
without the prior written consent of MGMT, in its sole discretion.
7.6 Severability. If any provision
of this Agreement is, becomes, or is deemed invalid, illegal or unenforceable in
any jurisdiction, such provision shall be deemed amended to conform to the
applicable laws so as to be valid and enforceable, or, if it can not be so
amended without materially altering the intention of the parties hereto, it
shall be stricken and the remainder of this Agreement shall remain in full force
and effect.
7.7 Headings. Article and Section headings
contained in the Agreement are included for convenience only and are not to be
used in construing or interpreting this Agreement.
7.8 Notices. All notices
provided for in this Agreement shall be in writing and shall be deemed effective
when either served by personal delivery or sent by express, registered or
certified mail, postage prepaid, return receipt requested, to the other party at
the corresponding mailing address set forth below or at such other address as
such other party may hereafter designate by written notice in the manner
aforesaid.
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7.9 Counterparts. This Agreement
may be executed in any number of counterparts, each of which shall be an
original and all of which together shall constitute one and the same document,
binding on all parties notwithstanding that each of the parties may have signed
different counterparts.
7.10 Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada, without giving effect to
conflict of law rules.
7.11 Investment
Representations. CL represents and warrants to MGMT on behalf
of himself and the Designees (the “Investors”) that: each
Investor is an “accredited investor” as defined in Rule 501 of Regulation D
promulgated under the Securities Act of 1933, as amended (the “Securities Act”), is
financially able to bear the economic risks of acquiring the Shares and the
other transactions contemplated hereby, and has no need for liquidity in this
investment. Each Investor has such knowledge and experience in financial and
business matters in general, and with respect to businesses of a nature similar
to the business of MGMT, so as to be capable of evaluating the merits and risks
of, and making an informed business decision with regard to, the acquisition of
the Shares. Each Investor is acquiring the Shares solely for his or its own
account and not with a view to or for resale in connection with any distribution
or public offering thereof, within the meaning of any applicable securities laws
and regulations, unless such distribution or offering is registered under the
Securities Act or an exemption from such registration is available. Each
Investor has (i) received all the information he has deemed necessary to make an
informed investment decision with respect to the acquisition of the Shares,
including the information MGMT has filed publicly with the Securities and
Exchange Commission (the “SEC”), (ii) had an opportunity
to make such investigation as he or it has desired pertaining to MGMT and the
acquisition of an interest therein, and to verify the information which is, and
has been, made available to him or it and (iii) had the opportunity to ask
questions of MGMT concerning its business and operations. Each
Investor has received no public solicitation or advertisement with respect to
the offer or sale of the Shares. Each Investor realizes that the Shares are
“restricted securities” as that term is defined in Rule 144 promulgated by the
SEC under the Securities Act, the resale of the Shares is restricted by federal
and state securities laws and, accordingly, the Shares must be held indefinitely
unless their resale is subsequently registered under the Securities Act or an
exemption from such registration is available for their resale. Each Investor
understands that any resale of the Shares by him or it must be registered under
the Securities Act (and any applicable state securities law) or be effected in
circumstances that, in the opinion of counsel for MGMT at the time, create an
exemption or otherwise do not require registration under the Securities Act (or
applicable state securities laws). Each Investor acknowledges and consents that
certificates now or hereafter issued for the Shares will bear a legend
substantially as follows:
“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”) OR ANY APPLICABLE STATE SECURITIES LAWS. SUCH
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND MAY NOT BE OFFERED FOR
SALE, SOLD, DELIVERED AFTER SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FILED BY THE ISSUER WITH THE SECURITIES AND
EXCHANGE COMMISSION COVERING SUCH SECURITIES UNDER THE SECURITIES ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT
REQUIRED.”
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Each
Investor understands that the Shares are being sold to pursuant to the exemption
from registration and that MGMT is relying upon the representations made herein
as one of the bases for claiming the exemption.
[SIGNATURE
PAGE FOLLOWS]
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IN WITNESS WHEREOF, the
parties have entered into this Agreement on the date first above
written.
| XXXXXXX X. XXXXXX | MGMT ENERGY, INC. | |||
| a Nevada corporation | ||||
| By: Xxxxxxx X. Xxxxxx | By: Xxxx Xxxx | |||
| Title: Chief Financial Officer | ||||
| Address for Notice: | Address for Notice: | |||
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Schedule
1
Consulting
Services
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Serve
as Member of the Board of Advisors
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Develop
long term corporate strategic plans with management input and direction
from the Company’s Board
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Provide
introductions to potential investors and strategic
partners
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Provide
technical analysis of properties /
projects
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Assist
in financial modeling of properties /
projects
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Analyze
financial and operating information for management to facilitate
decision-making and provide input for corrective action, where
applicable.
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Review
and provide advice on all SEC filings, investor materials, and marketing
materials.
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Attachment
A
Services
Addendum
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Scope
of Other Services:
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Other
Services Fee:
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Other
Terms and Conditions:
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Acknowledged
and agreed by:
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By:
______________________
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Date:
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XXXXXXX
X. XXXXXX
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By:
______________________
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Date:
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