CONSULTANT COMPENSATION AGREEMENT NO. 1
THIS CONSULTANT COMPENSATION AGREEMENT (the "Plan") is made this 3rd
day of November, 1997, among United States Mining & Exploration, Inc., a Utah
corporation ("U.S. Mining"); and Xxxxxxx X. Xxxxxxxxxx, Esq. and Xxxxxxx X.
Xxxxxx, who have executed and delivered this Plan by the execution and
delivery of the Counterpart Signature Pages which are designated as Exhibits
"A" and "B" hereof (collectively, the "Consultants").
WHEREAS, the Board of Directors of U.S. Mining has adopted a written
compensation agreement for compensation of two individual Consultants who are
natural persons; and
WHEREAS, U.S. Mining has engaged the Consultants to provide services
at the request of and subject to the satisfaction of its management; and
WHEREAS, the Consultants have provided services at the request and
subject to the approval of the management of U.S. Mining; and
WHEREAS, a general description of the nature of the services
performed and to be performed by the Consultants and the maximum value of such
services under this Plan are listed in the Counterpart Signature Pages; and
WHEREAS, U.S. Mining and the Consultants intend that this Plan and
the services performed hereunder shall be made, requested and performed in
such a manner that this Plan shall be a "written compensation agreement" as
defined in Rule 405 of the Securities and Exchange Commission ("Commission")
pursuant to which U.S. Mining may issue "freely tradeable" shares (except as
may me limited by "affiliate" status) of its common stock as payment for
services rendered pursuant to an S-8 Registration Statement to be filed with
the Commission by U.S. Mining;
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, it is agreed:
Section 1
Compensation Plan
1.1 Employment. U.S. Mining hereby employs the Consultants and the
Consultants hereby accept such employment, and have and will perform the
services requested by management of U.S. Mining to its satisfaction during the
term hereof. The services performed by the Consultants hereunder have been
and will be personally rendered by the Consultants, and no one acting for or
on
behalf of the Consultants, except those persons normally employed by the
Consultants in rendering services to others, such as secretaries, bookkeepers
and the like.
1.2 Independent Contractors. Regardless of the Consultants' status
as "employees" under Rule 405 of the Commission, all services rendered by the
Consultants hereunder have been rendered as independent contractors, and the
Consultants shall be liable for any FICA taxes, withholding or other similar
taxes or charges, and the Consultants shall indemnify and hold U.S. Mining
harmless therefrom; it is understood and agreed that the value of all such
items has been taken into account by the Consultants in computing the billable
rate for the services the Consultants have rendered and agreed to render to
U.S. Mining.
1.3 Term. All services performed at the request of U.S. Mining by
the Consultants shall have been performed within 120 days from the date
hereof, at which time this Plan shall terminate, unless otherwise provided
herein; provided, however, this Plan may be extended for an additional 120 day
period by written agreement of U.S. Mining and any of the Consultants.
1.4 Payment. U.S. Mining and the Consultants agree that U.S.
Mining shall pay the invoices of the Consultants for the services performed
under this Plan by the issuance of shares of its common stock (taking into
account the two for one forward split effective on October 31, 1997) at a
price of $0.01 per share; provided, however, such shares of common stock shall
be issued pursuant to and shall be subject to the filing and effectiveness of
a Registration Statement on Form S-8 covering such shares with the Commission.
1.5 Invoices for Services. On the completion of rendering the
services performed by the Consultants hereunder, each of the Consultants shall
provide U.S. Mining with a written invoice detailing the services duly
performed. Such invoice shall be paid by U.S. Mining in accordance with
Section 1.4 above, subject to the satisfaction of the management of U.S.
Mining that the services have been performed, and to the extent performed,
that the performance was in a satisfactory manner. The submission of an
invoice for the services performed by each of the Consultants shall be deemed
to be a subscription by the respective Consultants to purchase shares of
common stock of U.S. Mining at the price outlined in Section 1.4 above,
subject only to the filing and effectiveness of a Registration Statement on
Form S-8 covering such shares with the Commission.
1.6 Common Stock Price. To the extent deemed required or necessary
and for all purposes of this Plan, the Consultants shall have an "option"
covering such shares of common stock at the per share price set forth in
paragraph 1.4 above during the term hereof; the Consultants assume the risk of
any decrease in the per share price or value of the shares of common stock of
U.S. Mining that may be issued by U.S. Mining for services performed by the
Consultants hereunder, and the Consultants agree that any such decrease shall
in no way affect the rights, obligations or duties of the Consultants
hereunder.
1.7 Limitation on Services. None of the services rendered by the
Consultants and paid for by the issuance of shares of common stock of U.S.
Mining shall be services related to any "capital raising" transaction.
1.8 Delivery of Shares. On submission of an invoice for services
actually performed by the respective Consultants, and duly verified to the
satisfaction of U.S. Mining, and subject to the filing and effectiveness of a
Registration Statement on Form S-8 of the Commission covering such shares, one
or more stock certificates representing such shares shall be delivered to the
respective Consultants at the addresses listed on the Counterpart Signature
Pages, unless another address shall be provided to U.S. Mining in writing
prior to the issuance of such shares.
1.9 Adjustments in the Number of Shares of Common Stock and Price
Per Share. U.S. Mining and the Consultants agree that the per share price of
shares of common stock that may be issued by U.S. Mining to the Consultants
for services performed under this Plan has been arbitrarily set by U.S.
Mining; however, in the event U.S. Mining shall undergo a merger,
consolidation, reorganization, recapitalization, declare a stock dividend of
its shares of common stock or cause to be implemented a forward or reverse
stock split (the forward split of October 31, 1997, has already been taken
into effect) which affects the present number of issued and outstanding shares
of common stock of U.S. Mining prior to the issuance of shares to the
Consultants, that the per share price and the number of shares issuable to the
Consultants for services actually rendered hereunder after such event shall be
appropriately adjusted to reflect any such event.
1.10 Effective Date. The Effective Date of the Plan for each of the
Consultants shall be the date set forth on the respective Counterpart
Signature Pages.
Section 2
Representations and Warranties of U.S. Mining
U.S. Mining represents and warrants to, and covenants with, the
Consultants as follows:
2.1 Corporate Status. U.S. Mining is a corporation duly organized,
validly existing and in good standing under the laws of the State of Utah and
is licensed or qualified as a foreign corporation in all states in which the
nature of its business or the character or ownership of its properties makes
such licensing or qualification necessary.
2.2 Compensation Plan. The Board of Directors of U.S. Mining has
duly adopted a Compensation Plan as defined in Rule 405 of the Commission
pursuant to which U.S. Mining may issue "freely tradeable" shares of its
common stock as payment for services rendered, subject to the filing and
effectiveness of an S-8 Registration Statement to be filed with the Commission
by U.S. Mining.
2.3 Registration Statement on Form S-8. U.S. Mining shall engage
the services of a competent professional to prepare and file a Registration
Statement on Form S-8 with the Commission to cover the shares of common stock
to be issued under the Plan; shall cooperate with such professional in every
manner whatsoever to the extent reasonably required or necessary so that such
Registration Statement shall be competently prepared, which such Registration
Statement shall not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading, and
which such Registration Statement shall become effective immediately upon its
filing; such Registration Statement shall be prepared at the sole cost and
expense of U.S. Mining; and U.S. Mining will provide to the Consultants prior
to the issuance and delivery of any such shares of common stock a copy of such
Registration Statement, the Compensation Plan adopted by its Board of
Directors, all quarterly, annual or current reports or other documents
incorporated by reference into such Registration Statement and any other
similar reports filed or publicly disseminated following the effective date of
any such Registration Statement.
2.4 Federal and State Securities Laws, Rules and Regulations. U.S.
Mining shall fully comply with any and all federal or state securities laws,
rules and regulations governing the issuance of any such shares of common
stock.
2.5 Limitation on Services. U.S. Mining shall not request the
Consultants to perform any services in connection with any "capital raising"
transaction under this Plan.
2.6 Reports With the Commission. U.S. Mining is required to file
reports with the Commission pursuant to Section 13 of the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and U.S. Mining has or will file
with the Commission all reports required to be filed by it forthwith, and
shall continue to file such reports with the Commission so long as required,
but for a period of not less than one year; and such reports are or will be
true and correct in every material respect.
2.7 Corporate Authority and Due Authorization. U.S. Mining has
full corporate power and authority to enter into this Plan and to carry out
its obligations hereunder. Execution of this Plan and performance by U.S.
Mining hereunder have been duly authorized by all requisite corporate action
on the part of U.S. Mining, and this Plan constitutes a valid and binding
obligation of U.S. Mining and performance hereunder will not violate any
provision of the Articles of Incorporation, Bylaws, agreements, mortgages or
other commitments of U.S. Mining.
Section 3
Representations and Warranties of the Consultants
Each of the Consultants represents and warrants to, and covenants
with, U.S. Mining as follows:
3.1 Employment. Each of the Consultants hereby accepts employment
by U.S. Mining for the services performed pursuant to this Agreement. The
services performed by the Consultants hereunder have been personally rendered
by the Consultants, and no one acting for or on behalf of the Consultants.
3.2 Accredited Investors. Each of the Consultants represents and
warrants that, by reason of income, net assets, education, background and
business acumen, the Consultants have the experience and knowledge to evaluate
the risks and merits attendant to an investment in shares of common stock of
U.S. Mining, either singly or through the aid and assistance of a competent
professional, and are fully capable of bearing the economic risk of loss of
the total investment of services; further, they are "accredited investors" as
that term is defined under the 1933 Act or the rules and regulations
promulgated thereunder.
3.3 Suitability of Investment. Prior to the execution of this
Plan, each of the Consultants shall have provided the services outlined in the
respective Counterpart Signature Pages to U.S. Mining, and the Consultants,
singly, or through the advice of a competent professional, fully believe that
an investment in shares of common stock of U.S. Mining is a suitable
investment for the Consultants.
3.4 Limitation on Services. None of the services rendered by the
Consultants and paid for by the issuance of shares of common stock of U.S.
Mining shall be services related to any "capital raising" transaction.
3.5 Authority and Authorization. Each of the Consultants has full
power and authority to enter into this Plan and carry out the obligations
hereunder. Execution of this Plan and performance by the Consultants
hereunder constitutes a valid and binding obligation of the Consultants and
performance hereunder will not violate any other agreement to which any of the
Consultants is a party.
Section 4
Indemnity
U.S. Mining and the Consultants agree to indemnify and hold the
other harmless for any loss or damage resulting from any misstatement of a
material fact or omission to state a material fact by the other contained
herein or contained in the S-8 Registration Statement of U.S. Mining to be
filed hereunder, to the extent that any misstatement or omission contained in
the Registration Statement was based upon information supplied by the other.
Section 5
Termination
Prior to the performance of services hereunder, this Plan may be
terminated (1) by mutual consent of U.S. Mining and the respective Consultants
in writing; (2) by either the Directors of U.S. Mining or the respective
Consultants if there has been a material misrepresentation or material breach
of any warranty or covenant by the other party; and (3) shall automatically
terminate at the expiration of the term hereof, provided, however, all
representations and warranties shall survive the termination hereof; provided,
further, however, that any obligation of U.S. Mining to pay for any services
actually rendered by the Consultants hereunder shall survive any such
termination.
Section 6
General Provisions
6.1 Further Assurances. At any time, and from time to time, after
the execution hereof, each party will execute such additional instruments and
take such action as may be reasonably requested by the other party to carry
out the intent and purposes of this Plan.
6.2 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been given if delivered in person or
sent by prepaid first-class registered or certified mail, return receipt
requested, as follows:
If to U.S. Mining: 5525 south 000 Xxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
If to Consultants: The addresses listed on the
Counterpart Signature Pages
6.3 Entire Agreement. This Plan constitutes the entire agreement
between the parties and supersedes and cancels any other agreement,
representation, or communication, whether oral or written, between the parties
hereto relating to the transactions contemplated herein or the subject matter
hereof.
6.4 Headings. The section and subsection headings in this Plan
are inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Plan.
6.5 Governing law. This Plan shall be governed by and construed
and enforced in accordance with the laws of the State of Utah, except to the
extent pre-empted by federal law, in which event (and to that extent only),
federal law shall govern.
6.6 Assignment. Neither U.S. Mining nor the Consultants can assign
any rights, duties or obligations under this Plan, and in the event of any
such assignment, such assignment shall be deemed null and void.
6.7 Counterparts. This Plan may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Plan effective
the day and year first above written.
UNITED STATES MINING & EXPLORATION, INC.,
a Utah corporation
By /s/ Xxxxxx Xxxx, President
EXHIBIT "A"
CONSULTANT COMPENSATION AGREEMENT NO. 1
COUNTERPART SIGNATURE PAGE
THIS COUNTERPART SIGNATURE PAGE for that certain Consultant
Compensation Agreement No. 1 among United States Mining & Exploration, Inc.
and the undersigned Consultant is executed as of the date set forth
hereinbelow.
Consultant:
Xxxxxxx X. Xxxxxxxxxx, Esq
000 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Date: November 3, 1997 /s/ Xxxxxxx X. Xxxxxxxxxx
Number of Shares and
Maximum Value
of Services
General Description of Services to be Performed
Non-capital raising legal services. 32,000 shares
$320
EXHIBIT "B"
CONSULTANT COMPENSATION AGREEMENT NO. 1
COUNTERPART SIGNATURE PAGE
THIS COUNTERPART SIGNATURE PAGE for that certain Consultant
Compensation Agreement No. 1 among U.S. Mining and the undersigned Consultant
is executed as of the date set forth hereinbelow.
Consultant:
Xxxxxxx X. Xxxxxx
0000 Xxxxx 000 Xxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
Date: November 3, 1997 /s/ Xxxxxxx X. Xxxxxx
Number of Shares
Maximum Value
of Services
General Description of Services to be Performed
Non-capital raising legal services, 244,410 shares
including, but not limited to "due $2,444
diligence," conferences with directors
of the acquired company and other evaluations
all as set forth in his letter to the Company
