CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is made and entered into
effective the 16th day of October 1998, by and between Xxxxxx X. Vessels (the
"Consultant"), whose principal place of business is 0000 Xxxxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxx 00000, and Double Eagle Petroleum And Mining Co., a Wyoming
corporation (the "Company"), whose principal place of business is 000 Xxxxxxxx
Xxxxx, Xxxxxx, Xxxxxxx 00000, as follows:
1. Consulting Services. (a) The Company hereby retains the Consultant as an
independent consultant to the Company and the Consultant hereby accepts and
agrees to such retention. The Consultant shall render to the Company such
services of an advisory or consultive nature in order to provide the Company
with oil and gas transactions and acquisitions that the Company may be
interested in pursuing.
(b) On and after October 16, 1998, Consultant will provide Company the
first right to participate in all oil and gas transactions in which Consultant
or Consultant's designee has the right to participate, or for which Consultant
is otherwise compensated for finding participants (the "Consultant
Transactions"), except for those transactions arising or occurring from
agreements with the parties or with respect to the areas set forth on Schedule A
attached to and made a part of this Agreement that existed before October 16,
1998. Any such participation by the Company shall be on the same basis that
Consultant is entitled to participate so that any compensation or other
consideration to which Consultant is entitled as a result of and to the extent
of the Company's participation shall be passed on to the Company. To the extent
that Company does not desire to participate in any such transaction, Consultant
will be free to participate or otherwise transfer such participation and to
receive compensation therefor. Prior to participating or otherwise transferring
such participation or receiving compensation therefor with respect to a
Consultant Transaction pursuant to a right that arises or accrues on or after
October 16, 1998, Consultant shall provide written notice to the Company of the
anticipated scope, out-of-pocket costs, and other terms of the Consultant
Transaction. The Company may elect to participate in the proposed Consultant
Transaction by delivering to Consultant written notice of the Company's binding
election to participate setting forth the extent of the Company's participation
on or before the earlier to occur of 30 days after the Company's receipt of
Consultant's written notice or the date that Consultant must commit to the
Consultant Transaction (the "Participation Deadline Date"). If the Company does
not provide the Consultant with the Company's acceptance on or before the
Participation Deadline Date, the Company shall be deemed to have elected not to
participate in the Consultant Transaction. If the Company provides its written
acceptance prior to the Participation Deadline Date, the Consultant shall
promptly provide to the Company all assignments and other documents reasonably
necessary for the Company to participate in the Consultant Transaction and the
Company shall pay to the operator, transferor or other appropriate party with
respect to the Consultant Transaction the consideration required to be paid with
respect to the Company's interest in the Consultant Transaction. Notwithstanding
the foregoing, the Consultant shall not participate in any Consultant
Transaction in which the Company elects to participate in accordance with this
Section 1(b) and in which the Company is prohibited from participating by
parties to the Consultant Transaction other than Consultant unless the Company
gives Consultant the Company's prior written consent to such participation,
which consent shall not be unreasonably withheld. Nothing in this Agreement
shall be deemed to require Consultant to disclose any information that is
subject to confidentiality restrictions imposed by third parties, including
without limitation, information concerning Consultant Transactions.
2. Time, Place and Manner of Performance. The Consultant shall be available
for advice and counsel to the Company at such reasonable and convenient times
and places as may be mutually agreed upon. Consultant has been performing such
services since October 16, 1998 and agrees to be reasonably available to
continue to perform such services through January 31, 2000 at the Company's
request.
3. Term of Agreement. The terms of this Agreement include consultant's
services from and including October 16, 1998 through January 31, 2000 subject,
however, to prior termination as herein provided. Upon the mutual agreement of
the Company and the Consultant prior to the expiration of the then-current term,
this Agreement may be renewed for one or more additional one-year terms subject,
however, to prior termination as herein provided.
4. Compensation. In consideration of Consultant's providing services to the
Company pursuant to the terms of this Agreement, the Company hereby agrees to
compensate Consultant by issuing to the Consultant options to purchase up to
36,500 shares of the Company's restricted common stock. These options will be
exercisable at a purchase price of $1.375 per share until October 16, 2001
according to the terms of the Option Agreement attached to and made a part of
this Agreement as Exhibit B. In the event that this Agreement is renewed,
Consultant shall be entitled to such additional compensation in the form of
options, shares, cash or other compensation as the parties shall mutually agree.
5. Expenses. Consultant will be paid $12,000 per year to cover travel and
other expenses related to such services. All such payments will be based on
reimbursements of receipts submitted to the Company on or before the 15th day
following the end of the fiscal quarter in which such expenses are incurred and
such payments will be made within 30 days after the Company's receipt of
Consultant's receipts and reimbursement request.
6. Termination. This Agreement may be terminated at any time by either the
Company or Consultant without cause upon written notice of termination from the
Company to Consultant or from Consultant to the Company, as the case may be;
provided however, that if this Agreement is terminated by the Company for cause,
the provisions of Section 1(b) of this Agreement shall remain in effect with
respect to any opportunity to participate in Consultant Transactions as to which
Consultant had actual knowledge prior to such termination whether or not
previously disclosed to Company. All accrued obligations of the Consultant and
the Company through the date of termination (with or without cause) shall
survive termination and remain in force until discharged. As used in this
Section 6, termination "for cause" means a termination on account of dishonesty,
disloyalty or insubordination on the part of the Consultant as determined by the
Board of Directors of the Corporation or a Committee of the Board of Directors.
The Agreement will terminate without payment or penalty in the event of the
death or disability of Consultant.
7. Confidential Information.
(a) Acknowledgement And Definition. Consultant acknowledges that Consultant
will acquire information and materials from the Company and knowledge about the
Company's business, products, techniques, customers, clients and suppliers.
Consultant further acknowledges that all such knowledge, information and
materials acquired, the existence, terms and conditions of this Agreement, are
and will be the trade secrets and confidential and proprietary information of
Company (collectively, the "Confidential Information"). Confidential Information
will not include, however, (i) any information which is or becomes part of the
public domain through no fault of Consultant or that the Company regularly gives
to third parties without restriction on use or disclosure, (ii) information that
is required to be disclosed by judicial or administrative order or otherwise by
law, provided however that Consultant shall provide the Company with notice
prior to the proposed disclosure and reasonably assist the Company in obtaining
a protective order or to otherwise seek to legally prevent disclosure if
requested by the Company and the Company agrees to reimburse Consultant for
Consultant's reasonable out-of-pocket expenses for that assistance, and (iii)
information that is acquired by Consultant from a third party who was not under
a confidentiality obligation that benefits the Company.
(b) Maintaining Confidentiality. To ensure the continued confidentiality of
the Confidential Information, Consultant agrees as follows:
(i) to hold all Confidential Information in strict confidence; not to
disclose it to others or use it in any way, commercially or otherwise,
except in performing the Consultant's services pursuant to this Agreement;
and not to allow any unauthorized person access to it;
(ii) to take all action reasonably necessary to protect the
confidentiality of the Confidential Information including, without
limitation, implementing and enforcing operating procedures to minimize the
possibility of unauthorized use or copying of the Confidential Information;
and
(iii) that Confidential Information furnished to Consultant by the
Company or produced by Consultant or others in connection with the services
performed pursuant to this Agreement will be and remain the sole property
of the Company. Consultant agrees to return all Confidential Information
and any materials or other property provided by the Company promptly, at
the Company's request, upon expiration of this Agreement, or upon
termination of Consultant's services by Consultant or by the Company for
any reason, whichever occurs first. Consultant agrees not to retain any
Confidential Information or reproductions thereof, or other such property
or materials, after such request, expiration or termination.
(c) Survival. The provisions of this Section 7 shall survive termination of
this Agreement.
8. Nature of Relationship. It is understood and acknowledged by the parties
that the Consultant is being retained by the Company in an independent
contractor capacity and not as an employee or agent. Unless the Company shall
have otherwise consented in writing, Consultant will not enter into any
agreement or incur any obligation on behalf of the Company. Consultant
acknowledges that in performing services pursuant to this Agreement, Consultant
shall be an independent contractor and not an employee of the Company, and, as
such, Consultant shall be responsible for the paying of taxes or any other
amounts payable in respect of the payments to Consultant pursuant to this
Agreement and further that Consultant shall not be entitled to receive any
benefits received by any of the employees of the Company. Except as authorized
by the Company in writing, Consultant shall not hold himself out as acting or
authorized to incur liabilities or obligations for or on behalf of the Company.
Notwithstanding the foregoing, Consultant may, in dealings with third parties,
represent and hold himself out as a consultant retained by the Company to
provide consulting services as provided herein.
9. Conflict of Interest. This Agreement does not restrict Consultant from
performing services for other persons except to the extent that any such other
activities would cause Consultant to breach Consultant's obligations under this
Agreement.
10. Notices and Waiver. Any notices required or permitted to be given under
this Agreement shall be sufficient if in writing and delivered, faxed or sent by
mail to the principal office of each party. Any waiver by the Consultant of a
breach of any provision of this Agreement by the Company shall not operate or be
construed as a waiver of any subsequent breach by the Company.
11. Assignment and Law. This Agreement and the rights and obligations of
the parties hereunder shall inure to the benefit of and shall be binding upon
their successor and assigns but shall not be assignable without consent. 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 enforced in, under and pursuant to the laws of the State of
Colorado, in the courts of Denver, Colorado.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
CONSULTANT COMPANY
Xxxxxx X. Vessels Double Eagle Petroleum And Mining Co.
By:
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Xxxxxx X. Vessels, individually Xxxxxxx X. Xxxxxx, President
SCHEDULE A
(Attached To And Made A Part Of The Consulting Agreement Dated
October 16, 1998 Between Double Eagle Petroleum And Mining Co.
And Xxxxxx X. Vessels)
Consultant Transactions arising or occurring from agreements with the parties or
with respect to the areas set forth below that existed before October 16, 1998
shall not be opportunities covered by the Consulting Agreement to which this
Schedule is attached, and Company shall not have any right or interest in
opportunities or other transactions relating thereto.
1. Red Mountain Exploration, Area of Mutual Interest, Anadarko Basin.
2. Native Power Corporation, Hobbema, Pigeon Lake Reserve.
3. Associated Energy Managers/Energy Income Fund.
4. Energy Holdings PLC/Energy Finance Ltd.
5. Oil, gas and other mineral interests owned by Consultant and/or family
members in the DJ Basin and Texas.
