CONSULTING AGREEMENT
EXHIBIT
10.1
This
Consulting Agreement (the “Agreement”) is entered into as of the 15th
day of
April 2007 by and between True North Energy Corporation, a Nevada corporation,
with its principal offices at 2 Xxxxx Center, 0000 Xxxxx Xxxxxx, Xxxxxxx, XX
00000 (the “Company”) and Xxxxxxxxx Xxxxxx with an address at 0000 Xxxxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxx 00000 (the “Consultant”).
WHEREAS,
the
Company wishes to engage the Consultant to provide geological technical advisory
and related services to the Company and the Consultant wishes to accept such
engagement, all upon the terms and subject to the conditions contained in this
Agreement;
NOW,
THEREFORE, the
parties hereto, in consideration of the mutual consideration and promises
contained herein and intending to be bound, hereby agree as
follows:
1. Retention
of Consultant.
The
Company hereby retains the Consultant, and Consultant agrees to be retained
by
the Company, upon the terms in, and subject to the conditions of, this
Agreement.
2. Term.
Subject
to Section 7 hereof, the term of this Agreement shall begin on April 15, 2007
(the “Effective Date”) and shall continue for three (3) months thereafter
through and including July 15, 2007.
3. Duties
of Consultant.
During
the term of this Agreement, the Consultant shall assist and advise the Company
with respect to geological and technical matters involving all aspects of the
Company’s oil and gas business, and provide assistance to and work with the
Company’s Chief Executive Officer.
4. Compensation.
As
compensation to the Consultant for the services to be rendered under this
Agreement, the Company shall pay Consultant $8,000 per month in cash ($24,000
on
an aggregate basis) and $8,000 per month in common stock of the Company ($24,000
on an aggregate basis). This Agreement is being given effect as of April 15,
2007, the date on which the Consultant began to render the consulting services
to the Company. No cash or stock has been paid to Consultant to date. Hereafter,
the monthly cash payments for the services will be paid on the 15th
day of
each month starting on May 15th
2007 and
ending with a payment on July 15th
2007. In
connection with the stock compensation, the stock will be promptly issued to
Consultant in a single payment at the end of the term based upon the value
of
the stock on the effective date of this Agreement, April 15, 2007 (the
“Execution Date”). Value shall be based on the closing sale price of the
Company’s common stock on the OTC Bulletin Board on the Execution Date. In
advance of issuance, the Company will file a registration statement on Form
S-8
registering the stock. In the event of early termination of this Agreement
by
either party, the Consultant’s cash payment for the month in which the Agreement
will terminate will be subject to a pro rata adjustment to reflect the number
of
days in such month that the Consultant will be providing consulting services.
In
the event of early termination by the Company “With Cause” or by the Consultant
other than for “Good Reason”, as such terms are defined in Section 7 hereof, the
Consultant’s stock payment will be subject to a pro rata, downward adjustment to
reflect the number of days of the intended six month term during which this
Agreement was in effect. Consultant shall also be entitled to reimbursement
of
reasonable out of pocket business expenses incurred by Consultant in the
performance of this Agreement. Any single expense amount in excess of $1,000
will require advance written approval from the Company.
5. Status
as Independent Contractor.
The
parties intend and acknowledge that the Consultant is acting as an independent
contractor and not as an employee of the Company. The Company shall not be
responsible for any withholding in respect of taxes or any other deductions
in
respect of the fees to be paid to Consultant and all such amounts shall be
paid
without any deduction or withholding. Nothing in this Agreement shall be
construed to create any partnership, joint venture or similar arrangement
between the Company and the Consultant or to render either party responsible
for
any debts or liabilities of the other.
6. Confidentiality.
The
Consultant acknowledges that in connection with the services to be rendered
under this Agreement, the Consultant may be provided with confidential business
information of the Company. The information will include, but not be limited
to,
competitive information pertaining to the Company’s employees, business
partners, land and lease holdings, financial results and drilling and
exploration activities. The Consultant agrees to keep any information or
materials (the “Confidential Information”) in the strictest confidence and not
to disclose or disseminate any such Confidential Information to any person,
firm
or other business entity except to those employees, consultants or other
independent contractors of the Company as shall be necessary or advisable for
the carrying out of the purposes of this Agreement.
All
materials relating to the business and affairs of the Company, including,
without limitation, all manuals, documents, reports, equipment, working
materials, lists of shareholders, customers and clients, and information
collected or prepared by the Company or the Consultant in the course of the
Consultant's engagement, are the property of the Company. Upon the termination
of this Agreement for any reason, the Consultant shall cease the use of such
materials, return them to the Company (including all copies and reproductions
that may have been made or received), and delete related information from all
retrieval systems and databases used by the Consultant
Information
will not be deemed to be Confidential Information restricted by this Section
6
if Consultant can show that: (i) the information was in Consultant’s possession
or within Consultant‘s knowledge before the Company disclosed it to Consultant;
(ii) the information was or became generally known to those who could take
economic advantage of it; (iii) Consultant obtained the information from a
party
having the right to disclose it to Consultant without violation of any
obligation to the Company, or (iv) Consultant is required to disclose the
information pursuant to legal process (e.g., a subpoena), provided that
Consultant notifies the Company immediately upon receiving or becoming aware
of
the legal process in question. No combination of information will be deemed
to
be within any of the four exceptions in the previous sentence, however, whether
or not the component parts of the combination are within one or more exceptions,
unless the combination itself and its economic value and principles of operation
are themselves within such an exception or exceptions.
7. Termination.
Either
party may terminate this Agreement for any reason upon 15 days prior written
notice, including but not limited to termination by the Company “With Cause” or
termination by the Consultant for “Good Reason”.
“With
Cause” shall be (i) Consultant’s willful, material and irreparable breach of
this Agreement, (ii) Consultant’s willful dishonesty, fraud or material
misconduct with respect to the business or affairs of the Company; (iii)
Consultant’s conviction for a felony; (iv) Consultant’s gross negligence in the
performance of his duties hereunder, or (v) Consultant’s intentional
nonperformance of his duties hereunder.
“Good
Reason” shall exist if the Company does not pay any material amount of
compensation due Consultant hereunder within 7 days of the due date thereof
provided that Consultant shall have provided the Company with written notice
of
such default and given the Company 3 business days to cure such
default.
8. Amendments,
Modifications, Waivers, Etc.
No
amendment or modification to this Agreement, nor any waiver of any term or
provision hereof, shall be effective unless it shall be in a writing signed
by
the party against whom such amendment, modification or waiver shall be sought
to
be enforced. No waiver of any term or provision shall be construed as a waiver
of any other term or condition of this Agreement, nor shall it be effective
as
to any other instance unless specifically stated in a writing conforming with
the provisions of this Section 8.
9. Successors
and Assigns.
This
Agreement shall be enforceable against any successors in interest, if any,
to
the Company and the Consultant. Except as specifically provided herein, neither
the Company nor the Consultant shall assign any of their respective rights
or
obligations hereunder without the written consent of the other in each
instance.
10. Counterparts.
This
Agreement may be executed 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.
11. Notices.
Any
notices required or permitted to be given under this Agreement shall be
effective upon receipt at the respective addresses in the recitals to this
Agreement unless the address for notice to either party shall have been changed
by a notice given in accordance with this Section 11.
12. Governing
Law; Venue.
This
Agreement shall be governed by, and construed in accordance with, the
substantive laws of the State of Texas, without regard for principals of
conflicts of laws. Any action under this Agreement shall be brought in the
federal or state court in the City, County and State of Texas.
IN
WITNESS WHEREOF,
the
parties hereto have set their respective hands this 13th
day of
April 2007.
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The
Company:
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The
Consultant:
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TRUE
NORTH ENERGY CORPORATION
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By:
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/s/
Xxxx Folnovic
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/s/
Xxxxxxxxx Xxxxxx
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Xxxx
Folnovic
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Name:
Xxxxxxxxx Xxxxxx
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Title: President
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