CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made and entered into this 5th
day of May, 1998 by and between McG, Inc., (the "Consultant"), whose principal
place of business is 0000 Xxxxxxxxx #00, Xxxxxxxx, XX 00000 and ARXA
International Energy, Inc. (the "Client"), whose principal place of business is
000 Xxxxxxx Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx XX 00000.
WHEREAS, Consultant is in the business of providing management consulting and
advisory services; and
WHEREAS, the Client deems it to be in its best interest to retain Consultant to
render to the Client management consulting and advisory services, and
WHEREAS, Consultant is ready, willing and able to render such consulting and
advisory services to the Client as hereinafter described on the terms and
conditions more fully set forth below.
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
in this Agreement, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows.
1. CONSULTING SERVICES, The Client hereby retains the Consultant as an
independent consultant to the Client and the Consultant hereby accepts and
agrees to such retention. The Consultant shall render to the Client such
services as set forth on Exhibit A, attached hereto and by reference
incorporated herein.
It is acknowledged and agreed by the Client that Consultant carries no
professional licenses, other than any that may be listed on Exhibit A, and
is not rendering legal advice or performing accounting services, nor acting
as an investment advisor or broker-dealer within the meaning of applicable
state and federal securities laws. It is further acknowledged and agreed by
the Client that the consulting advisory services to be provided to the
Client hereunder shall not be rendered in connection with the offer and
sale of Securities in a capital raising transaction.
2. INDEPENDENT CONTRACTOR Consultant agrees to perform its consulting duties
hereto as an independent contractor. Nothing contained herein shall be
considered to as creating an employer-employee relationship between the
parties to this Agreement, The Client shall not be liable to third parties
for the acts of Consultant or its servants or agents, in performing the
consulting
duties hereunder. The Client shall not be responsible to make social
security, workers' compensation or unemployment insurance payments on
behalf of Consultant and/or Consultant's officers, employees,
representatives and agents. The parties hereto acknowledge and agree
that Consultant cannot guarantee the results or effectiveness of any of
the services rendered or to be rendered by Consultant hereunder. Rather,
Consultant shall use its best efforts to conduct its services and
affairs in a professional manner and in accordance with good industry
practice.
3. TIME, PLACE AND MANNER OF PERFORMANCE, The Consultant shall be available
for advice and counsel to the officers and directors of the Client at such
reasonable and convenient times and places as may be mutually agreed upon.
Except as aforesaid, the time, place and manner of performance of the
services hereunder, including the amount of time to be allocated by the
Consultant to any specific service, shall be determined at the sole
discretion of the Consultant.
4. TERM OF AGREEMENT. The term of this Agreement shall be one (1) year,
commencing on the date of this Agreement, both subject to prior termination
as hereinafter provided.
5. COMPENSATION. In full consideration of the services to be provided for the
Client by the Consultant as fully set forth in Exhibit A, the Client agrees
to compensate Consultant in the manner set forth in Exhibit B.
6. EXPENSES. Consultant shall be solely responsible for all expenses and
disbursements anticipated to be made in connection with its performance
under this Agreement. For all special services requested of Consultant by
Client, Client shall reimburse Consultant for all pre-approved expenses and
disbursements incurred by Consultant in connection with the performance of
such special services.
7. TERMINATION
(a) This Agreement may be terminated by either party upon giving written
notice to the other party.
(b) This Agreement shall terminate upon the dissolution, bankruptcy or
insolvency of the Client.
(c) Without excusing the Client's obligations under Section 5 herein
above. Consultant shall have the right and discretion to terminate this
Agreement should the Client violate any law, ordinance, permit or
regulation of any governmental entity, except for violations which either
singularly or in the aggregate do not have or will not have a material
adverse effect on the
operations of the Client.
(d) Without excusing Consultant's obligations under Paragraph 1, Exhibit A
and Paragraph 9, Client shall have the right and discretion to terminate
this Agreement should any of the following occur:
(i) Any willful breach of duty or habitual neglect of duty by Consultant;
(ii) Any material breach by Consultant of the obligations in Section 9;
(iii) Any material acts or events which inhibit Consultant from fully
performing its responsibilities under this Agreement in good faith.
8. WORK PRODUCT. It is agreed that all information and materials produced for
the Client shall be the property of the Consultant, free and clear of all
claims thereto by the Client, and the Client shall retain no claim of
authorship therein. It is expressly understood that the Client has the
unlimited right to use such work product during the term of this Agreement.
9. CONFIDENTIALITY. The Consultant recognizes and acknowledges that it has and
will have access to certain confidential information of the Client and its
affiliates that are valuable, special and unique assets and property of the
Client and such affiliates. The Consultant will not, during the term of
this Agreement, disclose, without the prior written consent or
authorization of the Client, any of such information to any person, for any
reason or purpose whatsoever. In this regard, the Client agrees that such
authorization or consent to disclose may be conditioned upon the disclosure
being made pursuant to a secrecy agreement, protective order, provision of
statute, rule, regulation or procedure under which the confidentiality of
the information is maintained in the hands of the person to whom the
information is to be disclosed or in compliance with the terms of a
judicial order or administrative process.
10. CONFLICT OF INTEREST. The Consultant shall be free to perform services for
other persons. The Consultant will notify the Client of its performance of
consultant services for any other person which could conflict with its
obligations under the Agreement. Upon receiving such notice, the Client may
terminate this Agreement or consent to the Consultant's outside consulting
activities; failure to terminate this Agreement, within seven (7) days of
receipt of written notice of conflict, shall constitute the Client's
ongoing consent to the Consultant's outside consulting services.
11. DISCLAIMER OF RESPONSIBILITY FOR ACTS OF THE CLIENT. The obligations of
Consultant described in this Agreement consist solely of the furnishing of
information and advice to the Client in the form of services. In no event
shall Consultant be required by this Agreement to represent or make
management decisions for the Client. All final decisions with respect to
acts and omissions of the Client or any affiliates and subsidiaries, shall
be those of the Client or such affiliates and subsidiaries, and Consultant
shall under no circumstances be liable for any expense incurred or loss
suffered by the Client as a consequence of such acts or omissions.
12. INDEMNITY BY THE CLIENT. The Client shall protect, defend, indemnify and
hold Consultant and its assigns and attorneys, accountants, employees,
officer and directors harmless from and against all losses, liabilities,
damages, judgments, claims, counterclaims, demands, actions, proceedings,
costs and expenses (including reasonable attorneys' fees) of every kind and
character resulting from, relating to or arising out of (a) the inaccuracy,
non-fulfillment or breach of any representation, warranty, covenant or
agreement made by the Client herein; or (b) any legal action, including any
counterclaim, or breach of representation, warranty, covenant or agreement
made by the Client herein; or (c) negligent or willful misconduct,
occurring during the term thereof with respect to any of the decisions made
by the Client.
INDEMNITY BY THE CONSULTANT. The Consultant shall protect, defend,
indemnify and hold Client and its assigns and attorneys, accountants,
employees, officer and directors harmless from and against all losses,
liabilities, damages, judgments, claims, counterclaims, demands, actions,
proceedings, costs and expenses (including reasonable attorneys' fees) of
every kind and character resulting from, relating to or arising out of (a)
the inaccuracy, non-fulfillment or breach of any representation, warranty,
covenant or agreement made by the Consultant herein; or (b) any legal
action, including any counterclaim, or breach of representation, warranty,
covenant or agreement made by the Consultant herein; or (c) negligent or
willful misconduct, occurring during the term thereof with respect to any
of the decisions made by the Consultant.
13. NOTICES. Any notices required or permitted to be given under this Agreement
shall be sufficient if in writing and delivered or sent by registered or
certified mail to the principal office or each party.
14. WAIVER OF BREACH. Any waiver by either party of a breach of any provision
of this Agreement by the other party shall not operate or be construed as a
waiver of any subsequent breach by any party.
15. ASSIGNMENT. This Agreement and the rights and obligations of the Consultant
hereunder shall not be assignable without the written consent of
the Client.
16. APPLICABLE LAW. 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 under and
pursuant to the laws of the State of Texas and that in any action, special
proceeding or other proceeding that may be brought arising out of, in
connection with or by reason of this Agreement, the laws of the State of
Delaware shall be applicable and shall govern to the exclusion of the law
of any other forum, without regard to the jurisdiction on which any action
or special proceeding may be instituted.
17. SEVERABILITY. All agreements and covenants contained herein are severable,
and in the event any of them shall be held to be invalid by any competent
court, the Agreement shall be interpreted as if such invalid agreements or
covenants were not contained herein.
18. ENTIRE AGREEMENT. This Agreement constitutes and embodies the entire
understanding and agreement of the parties and supersedes and replaces all
prior understanding, agreements and negotiations between the parties.
19. WAIVER AND MODIFICATION. Any waiver, alteration, or modification of any of
the provisions of this Agreement shall be valid only if made in writing and
signed by the parties hereto. Each party hereto, may waive any of its
rights hereunder without effecting a waiver with respect to any subsequent
occurrences or transactions hereof.
20. BINDING ARBITRATION As concluded by the parties hereto upon the advice of
counsel, and as evidenced by the signatures of the parties hereto and the
signatures of their respective attorneys, any controversy between the
parties hereto involving the construction or application of any of the
terms, covenants, or conditions of this agreement, shall on the written
request of one party served upon the other, be submitted to arbitration,
and such arbitration shall comply with and be governed by the provisions of
the Texas General Arbitration Act, Articles 224 through 238-6 of the
Revised Civil Statutes of Texas.
21. COUNTERPARTS This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the day and year first above written.
CONSULTANT:
McG, INC.
BY:
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Xxxxx X. Xxxxxxx President
CLIENT:
ARXA International Energy, Inc.
BY:
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L. Xxxxx Xxxx President
Under Texas Law any agreement that contains a binding arbitration clause must
have an attorney for each party sign the agreement. Paragraph 20 in this
agreement contains a binding arbitration clause. With full understanding of this
I waive my rights in having my attorney sign this agreement.
CONSULTANT:
McG, INC.
BY:
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Xxxxx X. Xxxxxxx President
CLIENT:
ARXA International Energy, Inc.
BY:
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L. Xxxxx Xxxx President
EXHIBIT A
Consultant agrees to provide the following services to client:
Consultant shall provide services to Client as an independent management
consultant. Consultant shall make itself available to consult with the board of
directors, officers, employees and representatives and agents of the Client at
reasonable times, concerning matters pertaining to the overall business and
financial operations of the Client, as well as the organization of the
administrative staff of the Client, the fiscal policy of the Client, and in
general, concerning any problem of importance concerning the business affairs of
the Client. Consultant may, at the request of the Client, assist in the
preparation of written reports on financial, accounting, or marketing matters,
review final information, analyze markets and report to the Client's Chief
Executive Officer, President, Vice-Presidents, or Treasurer on proposed
investment opportunities, and develop short and long term strategic business
plans. In addition, Consultant shall provide liaison services to the Client with
respect to the Client's relationships with unaffiliated third parties.
Consultant will not perform any activities that could subject Consultant or
Client to any allegation, of violations of Federal or applicable state
securities law.
Initials:
BCP
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LCF
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EXHIBIT B
Client agrees to compensate Consultant as follows:
For all services rendered by Consultant under this Agreement, Client shall
provide:
300,000 shares of free trading common stock and
option to purchase 100,000 shares at $1.00 (one dollar) per share and
option to purchase 100,000 shares at $1.50 (one dollar and fifty cents)
per share and
option to purchase 300,000 shares at $3.00 (three dollars) per share.
All options expire one year from the date of this Agreement. All options will
be exercisable when the market bid price has maintained 120% of the option
price for ten consecutive trading days. The Client will execute the call in
writing, upon receiving the written notice from the Consultant accompanied by
payment in full for the options exercised. The Consultant shall have 15 market
days to exercise or forfeit the call.
Initials:
BCP
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LCF
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