Exhibit 10.9
XXXXXX X. XXXX,
A PROFESSIONAL CORPORATION
2010 BIRNAM WOOD DRIVE
SANTA BARBARA, CA. 93108-2206
(000) 000-0000
March 13, 1998
Xx. Xxxxx Xxxxxxxxx, Chairman
And Chief Executive Officer
Saba Petroleum Company
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxx, Xx. 93455
Re: Representation of Saba Petroleum Company
Dear Xx. Xxxxxxxxx:
When accepted by you, this letter will constitute an agreement for the
representation of Saba Petroleum Company and its subsidiaries (collectively,
"Saba") by the undersigned, Xxxxxx X. Xxxx, A Professional Corporation ("Hill"),
and the written fee agreement required under California law. This letter will
also modify the terms of representation set forth in the letter between Saba and
Hill dated March 18, 1997 and shall be effective as of March 13,1998. The terms
of the engagement are as follows:
1. Saba engages Hill to represent Saba in its proposed business combination
with Omimex Resources, Inc., which shall include assisting management with
the negotiation and execution of agreements in respect of such combination
and to hire and supervise outside counsel for Xxxx, to direct the
performance of legal services by such outside counsel, all in respect of
such business combination.
2. Xxxx shall compensate Hill for March representation at the rate of $10,000
payable on March 31, 1998. Payment for further representation shall be as
provided in section 3 of this letter.
1. 3. Xxxx'x responsibility shall be for the completion of the business
combination between Saba and Omimex Resources, Inc. and its incidental
responsibility shall be to assist and oversee the preparation of
Saba's Form 10-K for the year 1997 and the preparation of the
registration statement on form S-1 presently pending. Xxxxx Xxxxxx
shall assume responsibility for the completion of the latter two
projects and Xxxx shall cooperate with Xxxxxx in the latter's efforts.
In addition, Xxxx shall provide advice to Xx. Xxxxxx with respect to
general Saba matters during the period ending May 30, 1998. Hill shall
be paid $100,000 for his services if a combination with Omimex is
completed and $50,000 if that transaction aborts. Payment shall be
made on closing of the transaction, if such is the case, or on or
before December 31, 1998 if the transaction aborts. If the transaction
has not closed by December 31, 1998, it shall be deemed that it has
aborted. Saba will reimburse Saba shall reimburse Hill for its out of
pocket expenses which have been incurred for the benefit of Saba,
including telephone (other than local) charges, travel, postage and
other expenses on a monthly basis.
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179816.02
4. At March 1, 1998, Xxxx was indebted to Hill in the following amounts, which
together with interest as provided below, will be paid to Hill by Xxxx on
December 31, 1998 or the closing of any loan or financing transaction, whichever
shall first occur:
a. Accrued and deferred portion of monthly retainer to February 28,
1998, thirty - one thousand, seven hundred fifty dollars ($31,750); b.
Four thousand, five hundred dollars ($4,500) representing Xxxx'x
portion of the payment of a gross of thirty thousand dollars ($30,000)
due
under Saba's agreements with Hamar II Associates, LLC and Amerada
Xxxx Corporation; and c. Twenty-five thousand dollars ($25,000) as an
accrued bonus.
The sum of such amounts is Sixty One Thousand, Two Hundred Fifty Dollars
($61,250). Interest shall accrue on the unpaid balance of such amounts from
March 1, 1998 until paid at Saba's existing bank borrowing rate, which is
WSJ prime plus two percentage points, but such interest shall not exceed
the usury limit in the state of California.
5. Saba will, on a monthly basis, reimburse Hill for a portion of its car
expenses in the amount of $400 per month until the end of the calendar
year 1998, the last payment to be made in January 1999.
6. Xxxxxx X. Xxxx, the shareholder of Hill, has at the request of Xxxx
acted as a director of Saba and a vice-president of Saba until the end
of the year 1997. As such, Xxxx has granted Xxxxxx X. Xxxx options to
purchase 125,00 shares of Saba's common stock. Such options were
orally agreed to be cancelled on March 15, 1998 and replaced with
replaced by a grant of twenty thousand shares (20,000) of fully paid
common stock valued at the closing price on the last trading day
preceding and an option, presently vested and expiring on March 15,
1999, to purchase thirty thousand (30,000) shares of the common stock
at the closing price on March 13, 1998. On said date, the closing
price of the common stock was $3.875 per share. Saba shall cause the
shares and options to be granted as soon as practicable, but prior to
April 30, 1998 and shall use its best efforts to cause both the common
stock granted and the shares underlying such options to be registered
with the Securities and Exchange Commission as soon as is reasonably
practicable. Xxxx shall report the grant of the shares to Xxxxxx X.
Xxxx on a form 1099 at the above price.
Xxxx is advised that it should have this letter of agreement reviewed
by counsel other than Xxxx, so that Xxxx may have an unbiased and disinterested
opinion as to the contents and effect thereof. After such review and
consideration as Saba determines is appropriate, kindly sign and return one copy
of this letter to the undersigned, and it will constitute the retention and fee
agreement required by the Rules of Professional Conduct.
Very truly yours,
Xxxxxx X. Xxxx, A Professional Corporation
By_________________________________
Xxxxxx X. Xxxx, its president
ACCEPTED AND AGREED TO
on this ___ day of March 1998.
SABA PETROLEUM COMPANY
By________________________________
Xxxxx Xxxxxxxxx, Chief Executive Officer
