CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made this 15th day of
July, 1996, by and between SAGE RESOURCES, INC., a Colorado corporation (the
"Company"), and XXXXXX X. XXXXXX (the "Consultant").
R E C I T A L S
WHEREAS, the Company wishes to engage the Consultant to consult with
respect to certain aspects of its business;
WHEREAS, the Consultant is willing to make available to the Company the
consulting services provided for in this Agreement as set forth below;
A G R E E M E N T
NOW, THEREFORE, in consideration of the promises and the respective
covenants and agreements of the parties herein contained, the parties hereto
agree as follows:
1. TERM.
The term of this Agreement shall commence on the date hereof and end on
September 30, 1996.
2. CONSULTING SERVICES.
(a) For the term of this Agreement, the Consultant agrees
to render, or has rendered, the following consulting services to the
Company:
(i) Strategic planning;
(ii) Preparation of corporate materials; and
(iii) Due diligence regarding potential
acquisition candidates, excluding any of the Company's
subsidiaries or affiliates.
(b) Compensation. In consideration of the consulting services
set forth in paragraph 2(a), and subject to the terms and conditions
set forth herein, the Company hereby agrees to compensate the
Consultant with $1,250, payable by issuing to the Consultant 25,000
shares of Common Stock (the "Shares") of the Company, as of the Closing
Date (as defined below), and to register such shares at the time of
issuance, or immediately thereafter, on Form S-8 under the Securities
Act of 1933, as amended.
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(c) Issuance. Issuance and delivery of the Shares shall
be made at the offices of the Company on September 20, 1996 (the
"Closing Date"). On the Closing Date, the Company shall deliver to the
Consultant:
(i) the certificate or certificates evidencing the
Shares to be issued to the Consultant hereunder, registered in
the name of the Consultant; and
(ii) evidence that the Shares have been registered on
Form S-8, or an appropriately prepared Form S-8 to be filed
upon issuance of the Shares to the Consultant, registering the
resale thereof.
(d) Expenses. During the term of the Consultant's engagement
hereunder, the Consultant shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Consultant in
performing services hereunder, including all travel and living expenses
while away from home on business at the request of and in the service
of the Company, provided that such expenses are incurred and accounted
for in accordance with the policies and procedures established by the
Company, and that any expenses in excess of $500 have been preapproved
in writing by the Company. Notwithstanding the foregoing, the
Consultant shall bear all expenses in connection with the initial
mailing of material describing the Company to brokers and dealers.
3. CONFIDENTIAL INFORMATION.
(a) Confidential Information. In connection with the providing
of consulting services hereunder, the Company may provide the
Consultant with information concerning the Company which the Company
deems confidential (the "Confidential Information"). The Consultant
understands and agrees that any Confidential Information disclosed
pursuant to this Agreement is secret, proprietary and of great value to
the Company, which value may be impaired if the secrecy of such
information is not maintained. The Consultant further agrees that he
will take reasonable security measures to preserve and protect the
secrecy of such Confidential Information, and to hold such information
in confidence and not to disclose such information, either directly or
indirectly, to any person or entity during the term of this Agreement
or any time following the expiration or termination hereof; provided,
however, that the Consultant may disclose the Confidential Information
to an assistant to whom disclosure is necessary for the providing of
services under this Agreement.
(b) Exclusions. For purposes of this paragraph 3, the term
Confidential Information shall not include information which (i)
becomes generally available to the public other than as a result of a
disclosure by the Consultant or his assistants, agents or advisors, or
(ii) becomes available on a non-confidential basis to the Consultant
from a source other than the Company or its advisors, provided that
such source is not known to the Consultant to be bound by a
confidentiality agreement with or other obligation of secrecy to the
Company or another party.
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(c) Government Order. Notwithstanding anything to the contrary
in this Agreement, the Consultant shall not be precluded from
disclosing any of the Confidential Information pursuant to a valid
order of any governmental or regulatory authority, or pursuant to the
order of any court or arbitrator.
(d) Injunctive Relief. The Consultant agrees that, since a
violation of this paragraph 3 would cause irreparable injury to the
Company, and that there may not be an adequate remedy at law for such
violation, the Company shall have the right, in addition to any other
remedies available at law or in equity, to enjoin the Consultant in a
court of equity for violating the provisions of this paragraph 3.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the Consultant that as of
the date hereof and as of the Closing Date (after giving effect to the
transactions contemplated hereby):
(a) Existence and Authority. The Company is a corporation duly
organized and validly existing in good standing under the laws of its
jurisdiction of incorporation and has full power and authority to own
its respective property, carry on its respective business as now being
conducted, and enter into and perform its obligations under this
Agreement and to issue and deliver the Shares to be issued by it
hereunder. The Company is duly qualified as a foreign corporation and
is in good standing in all jurisdictions in which it is necessary to be
so qualified to transact business as currently conducted. This
Agreement has been duly authorized by all necessary corporate action,
executed, and delivered by the Company, and constitutes the legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights of creditors generally and to general
principles of equity.
(b) Authorization and Validity of Shares. The Shares have been
duly authorized and are validly issued and outstanding, fully paid and
nonassessable and free of any preemptive rights. The Shares are not
subject to any lien, pledge, security interest or other encumbrance.
(c) Authorization of Agreement. The Company has taken all
actions and obtained all consents or approvals necessary to authorize
it to enter into and perform its obligations under this Agreement, to
issue the Shares to be issued by it and to consummate the transactions
contemplated hereby.
(d) No Violation. Neither the execution or delivery of this
Agreement, the issuance or delivery of the Shares, the performance by
the Company of its obligations under this Agreement, nor the
consummation of the transactions contemplated hereby will conflict
with, violate, constitute a breach of or a default (with the passage of
time or otherwise) under, require the consent or approval of or filing
with any person (other than consents and approvals which have been
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obtained and filings which have been made) under, or result in the
imposition of a lien on or security interest in any properties or
assets of the Company, pursuant to the charter or bylaws of the
Company, any award of any arbitrator or any agreement (including any
agreement with stockholders), instrument, order, judgment, decree,
statute, law, rule or regulation to which the Company is party or to
which any such person or any of their respective properties or assets
is subject.
(e) Registration. The Shares have been, or will be upon the
filing of an S-8 Registration Statement, registered pursuant to the
Securities Act of 1933, as amended, and all applicable state laws.
5. FILINGS.
The Company shall furnish to the Consultant, promptly after the sending
or filing thereof, copies of all reports which the Company sends to its equity
security holders generally, and copies of all reports and registration
statements which the Company files with the Securities and Exchange Commission
(the "Commission"), any other securities exchange or the National Association of
Securities Dealers, Inc. ("NASD").
6. SUPPLYING INFORMATION.
The Company shall cooperate with the Consultant in supplying such
publicly available information as may be reasonably necessary for the Consultant
to complete and file any information reporting forms.
7. INDEMNIFICATION.
(a) The Company shall indemnify the Consultant from and
against any and all expenses (including attorneys' fees), judgments,
fines, claims, causes of action, liabilities and other amounts paid
(whether in settlement or otherwise actually and reasonably incurred)
by the Consultant in connection with such action, suit or proceeding if
(i) the Consultant was made a party to any action, suit or proceeding
by reason of the fact that the Consultant rendered advice or services
pursuant to this Agreement, and (ii) the Consultant acted in good faith
and in a manner reasonably believed by the Consultant to be in or not
opposed to the interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the Consultant did not act in good faith and in a
manner reasonably believed by the Consultant to be in or not opposed to
the best interests of the Company, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct
was unlawful. Notwithstanding the foregoing, the Company shall not
indemnify the Consultant with respect to any claim, issue or matter as
to which the Consultant shall have been adjudged to be liable for gross
negligence or wilful misconduct in the performance of his duties
pursuant to this Agreement unless and only to the extent that the court
in which such action or suit was brought shall determine upon
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application that, despite the adjudication of liability, but in view of
all the circumstances of the case, the Consultant is fairly and
reasonably entitled to indemnity for such expenses which such court
shall deem proper.
(b) The Consultant shall indemnify the Company from and
against any and all expenses (including attorneys' fees), judgments,
fines, claims, causes of action, liabilities and other amounts paid
(whether in settlement or otherwise actually and reasonably incurred)
by the Company in connection with such action, suit or proceeding if
(i) the Company was made a party to any action, suit or proceeding by
reason of the fact that the Consultant rendered advice or services
pursuant to this Agreement, and (ii) the Consultant did not act in good
faith and in a manner reasonably believed by the Consultant to be in or
not opposed to the interests of the Company, and, with respect to any
criminal action or proceeding, did not reasonably believe his conduct
was lawful. Notwithstanding the foregoing, the Consultant shall not
indemnify the Company with respect to any claim, issue or matter as to
which the Company shall have been adjudged to be liable for gross
negligence or wilful misconduct in connection with the performance of
the Consultant's duties pursuant to this Agreement unless and only to
the extent that the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability, but in view of all the circumstances of the case, the
Company is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper.
8. INDEPENDENT CONTRACTOR STATUS.
It is expressly understood and agreed that this is a consulting
agreement only and does not constitute an employer-employee relationship.
Accordingly, the Consultant agrees that the Consultant shall be solely
responsible for payment of his own taxes or sums due to the federal, state or
local governments, overhead, workmen's compensation, fringe benefits, pension
contributions and other expenses. It is further understood and agreed that
Consultant is an independent contractor and that the Company shall have no right
to control the activities of the Consultant other than during the express period
of time in which the Consultant is performing services hereunder, and that such
control by the Company is solely predicated upon the consulting services
provided hereunder and not because of any presumed employer-employee
relationship. The Consultant shall have no authority to bind the Company.
The parties further acknowledge that the Consultant's services
hereunder are not exclusive, but that the Consultant shall be performing
services, and undertaking other responsibilities, for and with other entities or
persons, which may directly or indirectly compete with the Company. Accordingly,
the services of the Consultant hereunder are on a part-time basis only, and the
Company shall have no direction, control of, or interest in, the Consultant's
services which are not covered by the terms of this Agreement. The Company
hereby waives any conflict of interest which now exists or may hereafter arise
with respect to Consultant's current employment and future employment.
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9. NOTICE.
All notices provided by this Agreement shall be in writing and shall be
given by facsimile transmission, overnight courier, by registered mail or by
personal delivery, by one party to the other, addressed to such other party at
the applicable address set forth below, or to such other address as may be given
for such purpose by such other party by notice duly given hereunder.
Notice shall be deemed properly given on the date of delivery.
To Consultant: Xxxxxx X. Xxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
To the Company: Xxxxxxxx Xxxxxxx, President
Sage Resources, Inc.
00 Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, XX 00000
10. MISCELLANEOUS.
(a) Waiver. Any term or provision of this Agreement may be
waived at any time by the party entitled to the benefit thereof by a
written instrument duly executed by such party.
(b) Entire Agreement. This Agreement contains the entire
understanding between the parties hereto with respect to the
transactions contemplated hereby, and may not be amended, modified, or
altered except by an instrument in writing signed by the party against
whom such amendment, modification, or alteration is sought to be
enforced. This Agreement supersedes and replaces all other agreements
between the parties with respect to any services to be performed by the
Consultant on behalf of the Company.
(c) Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Utah.
(d) Binding Effect. This Agreement shall bind and inure
to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
(e) Construction. The captions and headings contained herein
are inserted for convenient reference only, are not a part hereof and
the same shall not limit or construe the provisions to which they
apply. References in this Agreement to "paragraphs" are to the
paragraphs in this Agreement, unless otherwise noted.
(f) Expenses. Each party shall pay and be responsible
for the costs and expenses, including, without limitation, attorney's
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fees, incurred by such party in connection with the negotiation,
preparation and execution of this Agreement and the transactions
contemplated hereby.
(g) Assignment. No party hereto may assign any of its rights
or delegate any of its obligations under this Agreement without the
express written consent of the other party hereto.
(h) No Rights to Others. Nothing herein contained or implied
is intended or shall be construed to confer upon or give to any person,
firm or corporation, other than the parties hereto.
(i) Counterparts. This Agreement may be executed
simultaneously in two counterparts, each of which shall be deemed an
original, but both of which together shall constitute one and the same
agreement, binding upon both parties hereto, notwithstanding that both
parties are not signatories to the original or the same counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.
THE "COMPANY"
SAGE RESOURCES, INC.
By: /s/Xxxxxxxx Xxxxxxx
Its: President
THE "CONSULTANT"
XXXXXX X. XXXXXX
By: /s/Xxxxxx X. Xxxxxx
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