Exhibit 10.1
ADVISORY AGREEMENT
THIS ADVISORY AGREEMENT (the "Agreement") is made this 16th day of October 2000,
by and between Xxxxx Xxxxxxxxxx, a Utah resident ("Advisor") and Power
Exploration, Inc., a Nevada Corporation with its offices located in Fort Worth,
Texas (the "Company").
WHEREAS, Advisor and Advisor"s Personnel (as defined below) have
experience in evaluating and effecting acquisitions of oil and gas properties,
acquisitions of oil and gas drilling prospects, and in performing geological and
geophysical duties for oil and gas companies; and
WHEREAS, the Company desires to retain Advisor to advise and assist the
Company in its development on the terms and conditions set forth below.
NOW THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and Advisor
agree as follows:
New Engagement
The Company hereby retains Advisor, effective as of the date
hereof (the "Effective date") and continuing until termination, as
provided herein, to assist the Company in it"s effecting the
purchase of businesses and assets relative to its business and
growth strategy, the introduction of others that may assist the
Company in its plans and future and to assist in the acquisition
of xxxxx and other producing properties (the "Services"). The
Services are to be provided on a "best efforts" basis directly and
through Advisor"s officers or others employed or retained and
under the direction of Advisor ("Advisor"s Personnel"); provided,
however, that the Services shall expressly exclude all legal
advice, accounting services or other services which require
licenses or certification which Advisor may not have.
New Term
This Agreement shall have an initial term of twelve (12) months
(the "Primary Term"), commencing with the Effective Date. At the
conclusion of the Primary Term this Agreement will automatically
be extended on for the same term (the "Extension Period") unless
Advisor or the Company shall serve written notice on the other
party terminating the Agreement. Any notice to terminate given
hereunder shall be in writing and shall be delivered at least
thirty (30) days prior to the end of the Primary Term or any
subsequent Extension Period.
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New Time and Effort of Advisor
Advisor shall allocate time and Advisors Personnel as it deems
necessary to provide the Services. The particular amount of time
may vary from day to day or week to week. Except as otherwise
agreed, Advisor"s monthly statement identifying, in general, tasks
performed for the Company shall be conclusive evidence that the
Services have been performed. Additionally, in the absence of
willful misfeasance, bad faith, negligence or reckless disregard
for the obligations or duties hereunder by Advisor, neither
Advisor nor Advisor"s Personnel shall be liable to the Company or
any of its shareholders for any act or omission in the course of
or connected with rendering the Services, including but not
limited to losses that may be sustained in any corporate act in
any subsequent Business Opportunity (as defined herein) undertaken
by the Company as a result of advice provided by Advisor or
Advisor"s Personnel.
New Compensation
The Company agrees to pay Advisor a fee for the Services
("Advisory Fee") by way of the issuance by the company of One
Hundred Twenty-five Thousand (125,000) shares of the Company"s
common stock as an initial fee: plus all bonuses agreed upon
throughout the duration of this agreement.
New Other Services
If the Company enters into a merger or exchanges securities with,
or purchases the assets or enters into a joint venture with, or
makes an investment in a company introduced by Advisor (a
"Business Opportunity"), the Company agrees to pay Advisor a fee
equal to ten percent (10%) of the value of each Business
Opportunity introduced by Advisor and acquired or otherwise
participated in by the Company (collectively referred to herein,
in each instance, as the "Transaction Fee"), which shall be
payable immediately following the closing of each such
transaction, in shares of the Company"s common stock or in kind if
an acquisition is made at the Company"s option, if paid in cash
the Transaction Fee shall be reduced to five percent (5%).
New Registration of Shares
The Company will issue shares for the above Initial Fee, all
subsequent Bonuses and all Transaction Fees as authorized and
registered under the Company"s Form S-8 Registration Statement
filed December 13, 1999 (1999 Stock Benefit Plan of Power
Exploration, Inc.).
New Costs and Expenses
All third party and out-of-pocket expenses incurred by Advisor in
the performance of the Services or for the settlement of debts
shall be paid by the Company, or Advisor shall be reimbursed if
paid by Advisor on behalf of the Company, within ten (10) days of
receipt of written notice by Consultant, provided that the Company
must approve in advance all such expenses in excess of $500.00 per
month.
New Place of Services
The Services provided by Advisor or Advisor"s Personnel hereunder
will be performed at Advisor"s offices except as otherwise
mutually agreed by Advisor and the Company.
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New Independent Contractor
Advisor and Advisor"s Personnel will act as an independent
contractor in the performance of its duties under this Agreement.
Accordingly, Advisor will be responsible for payment of all
federal, state and local taxes on compensation paid under this
Agreement, including income and social security taxes,
unemployment insurance, and any other taxes due relative to
Advisor"s Personnel, and any and all business license fees as may
be required. This Agreement neither expressly nor impliedly
creates a relationship of principal and agent, or employee and
employer, between Advisor"s Personnel and the Company. Neither
Advisor nor Advisor"s Personnel are authorized to enter into any
agreements on behalf of the Company. The Company expressly retains
the right to approve, in its sole discretion, each Asset
Opportunity or Business Opportunity introduced by Advisor, and to
make all final decisions with respect to effecting a transaction
on any Business Opportunity.
New Rejected Asset Opportunity or Business Opportunity
If, during the Primary Term of this Agreement or any Extension
Period, the Company elects not to proceed to acquire, participate
or invest in any Business Opportunity identified and/or selected
by Advisor, notwithstanding the time and expense the Company may
have incurred reviewing such transaction, such Business
Opportunity shall revert back to and become proprietary to
Advisor, and Advisor shall be entitled to acquire or broker the
sale or investment in such rejected Business Opportunity for its
own account, or submit such assets or Business Opportunity
elsewhere. In such event, Advisor shall be entitled to any and all
profits or fees resulting from Advisor"s purchase, referral or
placement of any such rejected Business Opportunity, or the
Company"s subsequent purchase or financing with such Business
Opportunity in circumvention of Advisor.
New No Agency Express or Implied
This Agreement neither expressly nor impliedly creates a
relationship of principal and agent between the Company and
Advisor, or employee and employer as between Advisor"s Personnel
and the Company.
New Termination
The Company and Advisor may terminate this Agreement prior to the
expiration of the Primary Term upon thirty (30) days written
notice with mutual written consent. Failing to have mutual
consent, without prejudice to any other remedy to which the
terminating party may be entitled, if any, either party may
terminate this Agreement with thirty (30) days written notice
under the following conditions:
_ By the Company
_ If during the Primary Term of this Agreement or
any Extension Period, Advisor is unable to
provide the Services as set forth herein for
thirty (30) consecutive business days because
of illness, accident, or other incapacity of
Advisor"s Personnel; or,
_ If Advisor willfully breaches or neglects the
duties required to be performed hereunder; or,
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_ At Company"s option without cause upon 30 days
written notice to Advisor; or
_ By Advisor
_ If the Company breaches this Agreement or fails
to make any payments or provide
information required hereunder; or,
_ If the Company ceases business or, other than
in an Initial Merger, sells a controlling
interest to a third party, or agrees to a
consolidation or merger of itself with or into
another corporation, or enters into such a
transaction outside of the scope of this
Agreement, or sells substantially all of its
assets to another corporation, entity or
individual outside the scope of this agreement;
or,
_ If the Company subsequent to the execution
hereof has a receiver appointed for its
business or assets, or otherwise becomes
insolvent or unable to timely satisfy its
obligations in the ordinary course of,
including but not limited to the obligation to
pay the Initial Fee, the Transaction Fee, or
the Advisory Fee; or,
_ If the Company subsequent to the execution
hereof institutes, makes a general assignment
for the benefit of creditors, has instituted
against it any bankruptcy proceeding for
reorganization for rearrangement of its
financial affairs, files a petition in a court
of bankruptcy, or is adjudicated a bankrupt;
or,
_ If any of the disclosures made herein or
subsequent hereto by the Company to Consultant
are determined to be materially false or
misleading.
In the event Advisor elects to terminate without cause or this
Agreement is terminated prior to the expiration of the Primary
Term or any Extension Period by mutual written agreement, or
by the Company for the reasons set forth in A (i) and (ii)
above, the Company shall only be responsible to pay Advisor
for unreimbursed expenses, Advisory Fee and Transaction Fee
accrued up to and including the effective date of termination.
If this Agreement is terminated by the Company for any other
reason, or by Advisor for reasons set forth in B (i) thru (v)
above, Advisor shall be entitled to any outstanding unpaid
portion of reimbursable expenses, Transaction Fee, if any, and
for the remainder of the unexpired portion of the applicable
term (Primary Term or Extension Period) of the Agreement.
New Indemnification
Subject to the provisions herein, the Company and Advisor agree to
indemnify, defend and hold each other harmless from and against
all demands, claims, actions, losses, damages, liabilities, costs
and expenses, including without limitation, interest, penalties
and attorneys" fees and expenses asserted against or imposed or
incurred by either party by reason of or resulting from any action
or a breach of any representation, warranty, covenant, condition,
or agreement of the other party to this Agreement.
New Remedies
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Advisor and the Company acknowledge that in the event of a breach
of this Agreement by either party, money damages would be
inadequate and the non-breaching party would have no adequate
remedy at law. Accordingly, in the event of any controversy
concerning the rights or obligations under this Agreement, such
rights or obligations shall be enforceable in a court of equity by
a decree of specific performance. Such remedy, however, shall be
cumulative and nonexclusive and shall be in addition to any other
remedy to which the parties may be entitled.
New Miscellaneous
Subsequent Events. Advisor and the Company each agree to
notify the other party if, subsequent to the date of this
Agreement, either party incurs obligations which could
compromise its efforts and obligations under this
Agreement.
Amendment. This Agreement may be amended or modified at
any time and in any manner only by an instrument in
writing executed by the parties hereto.
Further Actions and Assurances. At any time and from time
to time, each party agrees, at its or their expense, to
take actions and to execute and deliver documents as may
be reasonably necessary to effectuate the purposes of this
Agreement.
Waiver. Any failure of any party to this Agreement to
comply with any of its obligations, agreements, or
conditions hereunder may be waived in writing by the party
to whom such compliance is owed. The failure of any party
to this Agreement to enforce at any time any of the
provisions of this Agreement shall in no way be construed
to be a waiver of any such provision or a waiver of the
right of such party thereafter to enforce each and every
such provision. No waiver of any breach of or
noncompliance with this Agreement shall be held to be a
waiver of any other or subsequent breach or noncompliance.
Assignment. Neither this Agreement nor any right created
by it shall be assignable by either party without the
prior written consent of the other or as stated herein.
Notices. Any notice or other communication required or
permitted by this agreement must be in writing and shall
be deemed to be properly given when delivered in person to
an officer of the other party, when deposited in the
United States mails for transmittal by certified or
registered mail, postage prepaid, or when deposited with a
public telegraph company for transmittal, or when sent by
facsimile transmission charges prepared, provided that the
communication is addressed:
In the case of the Company: Power Exploration, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000-0000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Attn: Xxx Xxxxxxx
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In the case of Advisor: Xxxxx Xxxxxxxxxx
000 X. Xxxx Xx., Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Or to such other person or address designated in writing by the
Company or Advisor to receive notice.
Headings. The section and subsection headings in this
Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this
Agreement.
Governing Law. This Agreement was negotiated and is being
contracted for in Texas, and shall be governed by the laws
of the State of Texas, and the United States of America,
notwithstanding any conflict-of-law provision to the
contrary.
Binding Effect. This Agreement shall be binding upon the
parties hereto and inure to the benefit of the parties,
their respective heirs, administrators, executors,
successors, and assigns.
Entire Agreement. This Agreement contains the entire
agreement between the parties hereto and supersedes any and
all prior agreements, arrangements, or understandings
between the parties relating to the subject matter of this
Agreement. No oral understandings, statements, promises, or
inducements contrary to the terms of this Agreement exist.
No representations, warranties, covenants, or conditions,
express or implied, other than as set forth herein, have
been made by any party.
Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in
full force and effect.
Counterparts. A facsimile, telecopy, or other reproduction
of this Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same instrument, by one or more parties hereto and such
executed copy may be delivered by facsimile or similar
instantaneous electronic transmission device pursuant to
which the signature of or on behalf of such party can be
seen. In this event, such execution and delivery shall be
considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties agree to
execute an original of this Agreement as well as any
facsimile, telecopy or other reproduction hereof.
Time is of the Essence. Time is of the essence of this
Agreement and of each and every provision hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date above written.
The "Company" "Advisor"
Power Exploration, Inc. Xxxxx Xxxxxxxxxx
A Nevada Corporation A Utah Resident
By: /s/ Xxx Xxxx Xxxxxxx By: /s/ Xxxxx Xxxxxxxxxx
---------------------------- --------------------------
Name: Xxx Xxxx Xxxxxxx Name: Xxxxx Xxxxxxxxxx
Title: President, CEO
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