CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the %8reement) is made and entered into
effective the date it is signed by the last to sign am set forth
below by and between RAPID RELEASE RESEARCH LLC., (the
"Consultant'); whose principal place of business is 0000 Xxxx Xxx
Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000-0000 and Lakota Energy,
Inc., 0000 Xxxxx Xxxxx Xxxx Xxxxx 000, Xxxxxxx, Xx 00000.
WHEREAS, Consultant is in the business of providing services for
management consulting, business advisory, shareholder information
and public relations; and
WHEREAS, the Client deems it to be in its best interest to retain
Consultant to render to the Client such services may be needed; and
WHEREAS, Consultant is ready, willing and able to render such
consulting and advisory services to the Client as hereinafter
described an the terms and conditions more fully set forth below.
NOW, THEREFORE, in consideration of the mutual promises and
covenants set forth in this Agreement. the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows.
1. CONSULTING SERVICES. The Client hereby retains the Consultant as
an independent public relations and business consultant to the
Client and the Consultant hereby accepts and agrees to such
retention. The Consultant shall render to the Client such services
as set forth on Exhibit A. attached hereto and by reference
Incorporated herein.
It is acknowledged and agreed by the Client that Consultant carries
no professional licenses, other than any that may be listed on
Exhibit A; and is not agreeing to act as a marker-maker or render
legal advice or perform accounting services, nor act as an
investment advisor or broker-dealer within the meaning of applicable
ante and federal securities laws. It is further acknowledged and
agreed by the Client that the services to be provided to the Client
hereunder are presently not contemplated to be rendered in
connection with the offer and sale of Securities in it capital
raising transaction; although Client may request services of
Consultant therefor and We method it basis for compensation if such
additional services are rendered. The services of Consultant shall
not be Exclusive nor shall Consultant be required to render any
specific number of hours or assign specific personnel to the Client
or its projects.
2. INDEPENDENT CONTRACTOR, Consultant agrees to perform its
consulting duties hereto as aft independent contractor. Nothing
contained herein shall be considered as creating An
employer-employee relationship between the parties to this
Agreement. The Client shall not make social security, workers'
compensation or unemployment Insurance payments on behalf of
Consultant. The parties hereto acknowledge and agree that Consultant
cannot guarantee the results or effectiveness of any or the services
rendered or to be rendered by Consultant hereunder. Rather,
Consultant shall conduct its operations and provide its services in
a professional manner and in accordance with good industry practice.
Consultant will use its best efforts and does not promise results.
3. TIME, PLACE AND MANNER OF PERFORMANCE, The Consultant shall be available
for advice and counsel to the officers and directors of the Client at such
reasonable and convenient times and places as may be mutually agreed upon.
Except as Aforesaid, the time, place and manner of performance of the
services hereunder, including the amount of time to be allocated by the
Consultant to any specific service, shall be determined at the sole
discretion of the Consultant.
4. TERM OF AGREEMENT. The term of this Agreement shall be Six (6) months
commencing on the date of this Agreement, both subject to prior termination
as, hereinafter provided.
5. COMPENSATION AND EXPENSES. In full consideration of the services to be
provided for the Client by the Consultant as fully set forth in Exhibit "A",
the Client agrees to compensate Consultant in the manner set forth in
Exhibit "B". In addition, the Client shall reimburse the Consultant for all
preapproved expenses and disbursements Incurred by the Consultant on behalf
of the Client in connection with the performance of consulting services
pursuant to this Agreement, Consultant shall be solely responsible for all
expenses and disbursements anticipated to be made in connection with its
performance under this Agreement. Compensation is not to be prorated over
the term of this Agreement and is non-refundable; Provided, If Consultant is
terminated for cause as provided below, then the Compensation shall be
prorated on a monthly basis,
6. DUTIES AND OBLIGATIONS OF CLIENT
(a) Client shall furnish to Consultant such current information and data as
necessary for Consultant to understand end base its advice to the Client,
and shall provide such current information on a regular basis, including at
a. minimum
(i) Financial Information
Balance Sheet, Income Statement, Cash Flow Analysis and Sales Projections;
Officers and Directors Resumes or Curriculum Vitae; and,
(ii) Shareholder Information;
Shareholder(s) List. Debenture or preferred Stock or Option or Warrant
Agreements which may affect the number of shares to be issued or outstanding.
(b) Client shall furnish Consultant with full and complete copies of all
filings with all Federal and States securities Agencies. with full and
complete copies of all Shareholder Reports and Communications whether or not
prepared with assistance of Consultant, with all data and information
supplied to any Analyst, Broker/Dealer, Market-Maker, or any other member of
the Financial Community, Including specifically most recently filed Form 10
or Form l5c2(11) or Offering documents (such as 504, 505 fir 506) or Private
Placement Documents.
(c) Client will notify Consultant of any private or public offering of
securities, including 6-8 or Regulation S or A, at least Ten (110) days
prior to making such an offering during the term of this Consulting Agreement.
(d) Client will notify Consultant in writing at least 30 days prior
to any insider ailing of clients stock.
(e) Client will not cause to be affected a change or split of the
Client stock during the terms of this Agreement without prior
written notice to Consultant.
(f) Client shall be responsible for advising Consultant of any
information or facts which would affect the accuracy of any prior
data and information to Consultant so that Consultant.
7. TERMINATION
(a) Without cause. Consultant's relationship with the Client
hereunder may be terminated at any time by mutual written agreement
of the parties hereto.
(b) Without cause. this Agreement shall terminate upon the
dissolution, bankruptcy or insolvency of the Client.
(c) Without cause, and without excusing the Client's obligations
under Section 5 herein above. Consultant shall have the right and
discretion to terminate this Agreement should the Client violate any
law, ordinance, permit or regulation of any governmental entity,
except for violations which either singularly or in the aggregate do
not have or will not have a material adverse effect on the
operations of the Client.
(d) Without cause, this Agreement may be terminated by either party
upon giving written notice to the other party if the other xxxxx Is
In default hereunder and such default is not reasonably cured within
fifteen (IS) days after written notice of such default.
(e) For cause(s) as set forth below, this Agreement may be
terminated by Client after giving written notice specifically
detailing all and any event(s) of default to Consultant, if such
specified event(s) of default Is not reasonably cured within fifteen
(15) days after receipt of written notice of such events of default(s):
(i) Any willful breach of duty by Consultant;
(ii) Any material breach by Consultant of the obligations in
Section 9;
(iii) Any material acts or events which inhibit Consultant from
fully performing its responsibilities under this Agreement in good
faith.
8. WORK PRODUCT. It is agreed that all information And materials
produced for the Client shall be the property or the Consultant,
free and clear of all claims thereto by the Client, and the Client
shall retain no claim of authorship therein,
9. CONFIDENTIALITY. The Consultant recognizes and acknowledges that it
has and will have access to certain confidential information of the Client
and its affiliates that are valuable.
special and unique assets and property lot the Client and such
affiliates The Consultant will not, during the tam of this
Agreement, disclose, without the prior written consent or
authorization of the Client any of such information to any person,
for any region or purpose whatsoever. In this regard, the Client
agrees that ouch authorization or consent to disclose may be
conditioned upon the disclosure being made pursuant to a secrecy
agreement, protective order, provision of stoma, rule, regulation or
procedure under which the confidentiality of the information is
maintained in the hands of the person to whom the information is to
be disclosed or in compliance with the terms of a judicial order or
administrative process.
10. CONFLICT OF INTEREST. The Consultant shall be free to perform
services for other persons, The Consultant will notify the Client of
its performance of consultant services for any other person, which
could conflict with its obligations under the Agreement, Upon
receiving such notice, the Client may terminate this Agreement or
consent to the Consultant's outside consulting activities; failure to
terminate this Agreement. within seven (7) days of receipt of written
notice of conflict, shall constitute the Client's ongoing; consent to
the Consultant's outside consulting services.
11. DISCLAIMER OF RESPONSIBILITY FOR ACTS Of THE CLIENT.
The obligations of Consultant described in this Agreement consist solely
of the furnishing of information and advice to the Client in the form of
services. In no event shall Consultant be required by this Agreement
to represent or make management decisions for the Client, All final
decisions with respect to acts and omissions of the Client or any
affiliates and subsidiaries, shall be those of the Client or such
affiliates and subsidiaries, and Consultant shall under no
circumstances be liable for any expense incurred at lose suffered by
the Client as a consequence of such sets or omissions.
12. INDEMNIFICATION. The Client shall protect. defend, indemnify and
hold Consultant and its assigns and attorneys. accountants,
employees, officers and directors harmless from and against all
losses, liabilities, damages, judgments, claims, counterclaims,
demands, actions, proceedings, costs and expenses (including
reasonable attorneys' fees) of every kind and character resulting
from, relating to or arising out of (a) the inaccuracy,
non-fulfillment or breach of any representation, warranty, covenant
or agreement made by the Client, or (b) any legal action, including
any counterclaim based on any representation, warranty, covenant or
agreement made by the Client herein; or (C) negligence or willful
misconduct by the Client.
The Consultant shall protect, defend, indemnify and hold harmless
the Client and its assigns and attorneys, accountants, employees,
officers arid directors harmless from arid against all losses,
liabilities, damages, judgments, claims, counterclaims, demands,
actions, proceedings, costs and expenses (including reasonable
attorneys' fees) of every kind and character resulting from,
relating to or wising out of (a) the inaccuracy, non-fulfillment or
breach of any representation warranty covenant or agreement made by
the Consultant herein except those based on information furnished by
the Client or Its representatives; or (b) any legal action,
including any counterclaim, based on any representation, warranty,
covenant or agreement made by the Consultant herein; or (c)
negligent or willful misconduct by the Consultant.
13. NOTICES. Any notices required or permitted to be given under
this Agreement shall be sufficient if in writing and delivered or
sent by:
(a) Registered or Certified Mail to the principal office of the
other party, postage prepaid with return receipt requested deposited
in a proper receptacle of the United States Postal Service or its
successors. Said notice shall be addressed to the Intended
recipient. A written notice sent in conformity with this provision
%hall be deemed delivered as of the date shown "delivered" on the
return receipt; or.
(b) Transmitted by Prepaid Telegram or by Telephone Facsimile
Transmission if receipt is acknowledged by the addressee. Notice so
transmitted by telegram or facsimile transmission &hall be effective
only if receipt of transmission is acknowledged by an appropriate machine
or written confirmation, and such notice shall be deemed effective
on the next business day after transmission; or,
(c) Notice given In any other manner shall be effective only
if and when proven to have been received by the addressee.
For purposes or notice, the address of each party shall be the
address set forth above; Provided, however, that each party shall
have the right to change his respective address for notices
hereunder to another location(s) within the continental United
States by giving 30 days' written notice to the other party in the
manner set forth hereinabove.
14. WAIVER OF BREACH. Any waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or
be construed as a waiver of any subsequent breach by any party.
15. ASSIGNMENT. This Agreement and the rights and obligations of the
Consultant hereunder shall not be assignable without the written consent
of the Client.
16. APPLICABLE LAW. It is the intention of the parties hereto that
this Agreement and the performance hereunder and all suits and
special proceedings hereunder be construed in accordance with and
under and pursuant to the laws of the State of Texas and that in any
action, special proceeding or other proceeding that may be brought
arising out of, in connection with or by reason of this Agreement,
the laws of the State of Texas shall be applicable and shall govern
to the exclusion of the law of any other forum, without regard to
the jurisdiction an which any action or special proceeding may be
instituted.
17. SEVERABILITY. All agreements and covenants contained herein are
severable, and in the event any of them shall be hold to be invalid
by any competent court, the Agreement shall be interpreted as if
such invalid agreements or covenants were not contained herein.
18. ENTIRE AGREEMENT This Agreement constitutes and embodies the
entire understanding and agreement of the parties and supersedes and
replaces all prior understanding, agreements and negotiations
between the parties.
19. WAIVER AND MODIFICATION. Any waiver. alteration, or modification
of any of the provisions of this Agreement shall be valid only if made
in writing and signed by the parties hereto.
Each party hereto, may waive any of its rights hereunder without
affecting a waiver with respect to any subsequent occurrences or
transactions hereof.
20. BINDING ARBITRATION. As concluded by the panics hereto, any
controversy between the panics hereto involving any dispute or claim
by, through or under, or the construction or application of any
terms, Covenants or conditions of, this agreement, shall on rho
written request of ant party served upon the other, be submitted to
arbitration, and such arbitration shall comply with and be governed
by the provisions of the Federal Arbitration Act as it may be
amended; Provided, that Arbitration shall be conducted In Xxxxxx
County, Texas and be conducted by the American Arbitration
Association ("AAA"), The FAA rules shall apply, and the AAA rules
shall apply if nor in conflict with the FAA rules. All evidence
shall be subject to the Federal Rules of Civil Evidence.
21. COUNTERPARTS AND FACSIMILE SIGNATURE. This Agreement may be
executed simultaneously in two or more counterparts, each of which
shall be deemed an original, but all of which taken together shall
constitute one and the same instrument. Execution and delivery of
this Agreement by exchange of facsimile copies bearing the facsimile
signature of a party, hereto shall constitute a valid and binding
execution and delivery of this Agreement by much party. Such
facsimile copies shall constitute enforceable original documents,
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement, effective as of the date act forth above.
CLIENT:
LAKOTA ENERGY, INC.
BY: /s/Xxx Xxxxxxxx
R.K. (Xxx) Xxxxxxxx
Its Authorized Officer
Signed Date: 8-9-99
CONSULTANT
RAPID RELEASE RESEARCH, LLC.
BY: /s/Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, President
Its Authorized Officer
Signed Date: 8-6-99
"EXHIBIT A"
Consultant shall provide services to Client as an independent
management consultant Consultant shall make itself available to
consult with the board of directors officers, employees and
representatives and agents of the Client at reasonable times,
concerning matters, pertaining to the overall business and financial
operations of the Client, a well as the organization of the
administrative staff of the Client, the fiscal policy of the Client,
and in general, concerning any problem of importance concerning the
business affairs of the Client, Consultant may, at the request of
the Client, assist in the preparation of written reports on
financial, accounting, or marketing matters, review final
information, analyze markets rind report to the Client's Chairman of
the Board of Directors or Chief Executive Officer or President or a
Vice-President or Treasurer on proposed investment opportunities,
and develop short and long term strategic business plans. In
addition, Consultant shall provide liaison services to the Client
with respect to the Client's relationships with unaffiliated third
parties. Consultant does net undertake as part of this Agreement to
provide loans, investments or financing for the Client, although
such financial benefits may be made available to Client during the
course of Consultant's engagement. Consultant will not perform any
activities that could subject Consultant or Client to violations of
Federal or applicable state securities law.
"EXHIBIT B"
Client shall compensate Consultant for its services tendered by
Consultant under this Agreement, as follows:
I. Client shall pay to Consultant's affiliate, Jacob International,
Inc., a fee equal to Four Point Nine Percent (4.9%) of the total issued
and outstanding common shares of the Client. Based on 4.9% of Lakota's
issued and outstanding common stock, the total amount of stock would be
1,715,000 shares, to be delivered in accordance with the following
Performance Compensation Schedule:
A. Upon signing, Lakota will deliver to Jacob International,
Inc., 428,000 common shares and two certificates in the name of
Jacob International, Inc., one for 428,000 and one for 857,000
common shares shall be delivered to an Escrow Agent designated by
Lakota who shall be irrevocably instructed and directed to deliver
the shares as follows:
1. When Lakota's common stock closes at a price of SO-50 or
higher for five (5) consecutive trading days, Lakota will cause
the Escrow Agent to deliver to Jacob International, Inc.,
428,000 common shares. provided such closing prior to the termination
of this Agreement.
2. When Lakota's common stock closes at a price of $1.00 or higher for
five (5) consecutive trading days, Lakota will cause the Escrow
Agent to deliver to Jacob International, Inc., 857,000 common shares;
provided such closing prices to the termination of this Agreement.
3. The shares shall be delivered to the person named below as Escrow
Agent on at before (10) business days after exercise of the Non-Qualified
Stock Option. The Escrow Agent shall be Xxxxx Xxxxxxxx, whose address is
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxx, XX, 00000 (Telephone
000-000-0000; Fax 000-000-0000). The Consultant shall execute a stock
proxy execute a stock proxy an the escrowed stock in favor of the designee
of the Client to be effective while the stock is held La escrow. The
escrowed shares shall be returned to the Client if the Consultant is
not in compliance with this Agreement. The Escrow Agent shall be subject
to the written instructions of the Client and the Consultant until the
termination of this agreement, the Client lad consultant may change
or remove the Escrow Agent by written instrument, and the Client may
appoint another Escrow Agent with the written consent of the Consultant
the Client shall compensate the Escrow Agent for any expenses or costs
incurred for handling the Escrow.
B. THE SHARES TO RE ISSUED HEREUNDER OR TO BE RECEIVED BY
CONSULTANT OR ITS AFFILIATE HEREUNDER SHALL BE SUBJECT TO
RESTRICTIONS AS TO TRANSFER UNDER RULE 144 PROMULGATED BY THE
SECURITIES EXCHANGE COMMISSION ("SEC"). All of the above stock so
issued will come with "piggyback registration rights" to be included
in any Registration Statement undertaken by Lakota Energy, Inc.
Consultant shall have the right to "Piggyback" on any registration or
offering by the Client without cost or expense. The shares thereupon
shall be unrestricted as to t transferability and the Certificates
shall not bear any legends or restrictions.
D. The parties acknowledge that the recent trading volume is not an a
fair indication of value for this transaction, It is hereby agreed
that the value of the stock for this transaction, based on the
number of shares and recent trading volume: is No Dollars and 2/100
cents ($.02) per share.
II. Client shall reimburse Consultant for reasonable "Costs" Incurred
of expended for and on behalf of the Client for those costs which the
Client for those costs which the Client approves in advance.
Consultant agrees to maintain written records of the time and effort or
costs incurred or expended by it on behalf of Client, which records shall
be available to Client upon request, "Costs" shall include, among those
items normally considered to be "costs", the actual sum or sums paid
or incurred by Consultant for or on behalf of Client for document
production, photocopying ,facsimile transmission, long distance telephone,
postage, delivery service, filing fees, publication costs, bond premiums,
computer time and charges, electronic, database and communications costs,
library charges, travel and transportation charges. Costs shall be
billed at the amount actually incurred to third party providers, or
if the cost is incurred "in-house", at the usual and regular charges for
the service provided made to other like clients or according to the fee and
charge schedule published or utilized from time to time by the
Consultant (which at the present time is the same as used by third
party providers such as Kinko's or Copy Club.) If the Consultant incurs or
expands costs for any item or items which are or can be used by other clients,
Consultant, in his sole discretion, may make a reasonable allocation of such
costs incurred or expended and Client agrees to pay such allocated amount
to Consultant.
III. Additional Compensation. In the Course of its services to Client,
Consultant may consult regarding various financial and/or strategic
options for consideration by Client. Such options may include
without limitation, acquisitions, asset sales or purchases, mergers,
consolidations, joint ventures, of other business combinations,
recapitalization, spin-offs, and equity and debt financing through
public offerings, Private placements, institutional borrowing or
otherwise, in each case involving Client and a third party or parties
introduced by Consultant an the other hand ("Transactions"). The parties
agree that the name of the third party or parties introduced by Consultant
hereunder shall be listed on a schedule which shall be annexed to
this Agreement.
(1) If one or more Transactions are consummated during the period
commencing on the date hereof and ending two (2) years from the date
this Agreement is terminated, then for each such Transaction. Client
shall pay to Consultant additional compensation for Consultant's
services for such Transaction(s), a fee equal to:
i. Ten (10%) percent of the first One Million Dollars and No Cents
($1,000,000.00) of aggregate consideration; and,
ii. Five Percent (5%) of the second One Million Dollars and No
Cents ($1,000,000.00 ) of aggregate consideration; and,
iii. Four Percent (4%) of the third One Million Dollars and No Cents
(1,000,000.00) of aggregate consideration, and,
iv. Three Percent (3%) of the fourth One Million Dollars and No Cents
($1,000,000.00) of aggregate consideration; and,
v. Two Percent (2%) of the fifth One Million Dollars and No
Cents ($1,000,000.00) of aggregate consideration; and,
vi. One Percent (1%) of all amounts in excess of Six Million
Dollars and No Cents ($6,000,000.00) of aggregate consideration.
The term "Aggregate Consideration", its used herein, of the
Transaction, payable at the time and from time to time as such
consideration is received. For purposes hereof aggregate
consideration shall mean the total value of all cash, securities,
notes, rights under escrow arrangements, and any other consideration
paid or payable, directly or indirectly, in connection with a
Transaction, as well as institutional debt for borrowed money which
is being assumed in connection therewith. If a portion of
Consideration includes contingent payments, aggregate consideration
shall also include One Hundred Percent (100%) of the face value of
such payments, when and if made, in which event that portion of the
fee payable to Consultant hereunder shall be evidenced by a
promissory note(s) ("Note") secured by the contingent payment, said
Note payable to Consultant coincident with payment of such
contingent payments. Should regulatory requirements and/or economic
constraints indicate a lower percentage fee, then Client shall not
enter into any financing arrangement with a party named in the
schedule hereto without the prior written consent of Consultant, if
any of the aggregate consideration is to be made in the form other
than cash or good funds, then the Client shall deliver to Consultant
an assignment of a prorata portion of the aggregate consideration in
whichever form such aggregate consideration is to be paid (for
example, $1,000,000 cash and $1,000,000 note will be paid to
Consultant as follows:
Total compensation due: 10% of $1,000,000 and 5% of $1,000,000 -
$l50,000.
Cash portion (50% of $150,000) =$75,000 Cash at Closing
Deferred portion (50% of $ 150,000)=$75,000 Note
