CONSULTING AGREEMENT
EXHIBIT
10.36
This
CONSULTING
AGREEMENT
(the
“Agreement”) is entered into as of December 21, 2007 by and between TRUE
NORTH ENERGY CORPORATION,
a
Nevada corporation, with its principal offices at 2 Xxxxx Center, 0000 Xxxxx
Xxxxxx, Xxxxxxx, XX 00000 (the “Company”) and PRIME
NATURAL RESOURCES, INC.
with an
address at 0000 XxxxXxxx Xxxx, Xxxxx 0000, Xxxxxxx, XX 00000
(“Prime”).
WHEREAS,
the
Company wishes to engage Prime to provide accounting and related services to
the
Company and the Prime wishes to accept such engagement, all upon the terms
and
subject to the conditions contained in this Agreement;
NOW,
THEREFORE, the
parties hereto, in consideration of the mutual consideration and promises
contained herein and intending to be bound, hereby agree as
follows:
1. Retention
of Prime.
The
Company hereby retains Prime, and Prime agrees to be retained by the Company,
upon the terms in, and subject to the conditions of, this
Agreement.
2. Term.
Subject
to Section 7 hereof, the term of this Agreement shall be deemed to have
commenced on October 1, 2007 (the “Effective Date”) and shall continue in effect
for nine (9) months thereafter through and including June 30, 2008.
3. Duties
of Prime.
During
the term of this Agreement, Prime shall provide such bookkeeping, accounting
and
financial reporting services and work with the Company’s chief executive officer
as may be directed by the Company from time to time. Prime makes NO WARRANTY,
express or implied, as to merchantability, fitness for purpose sold,
description, quality or productiveness concerning the services provided
hereunder.
4. Compensation.
(a) Consulting
Fee: As
compensation to Prime for the services to be rendered under this Agreement,
the
Company shall pay to Prime a consulting fee consisting of a monthly $5,000
cash
payment (the “Cash Consulting Fee”) and grant to Prime an issuance of $45,000 in
common stock of the Company (the “Stock Consulting Fee”) for each calendar year
quarterly period (i.e.,
the
three months ending December 31, 2007, March 31, 2008 and June 30, 2008 and
each
being a “Quarter”).
(b) Payment
of Cash Consulting Fee: This Agreement is being given effect as of October
1,
2007, the date on which the Prime began to render the consulting services to
the
Company. No cash or stock has been paid to Prime to date. Upon execution of
this
Agreement, the Company will pay Prime $15,000 in cash representing the cash
payments due for October, November and December 2007. Thereafter, the Company
will pay the Cash Consulting Fee to Prime monthly in advance no later than
the
20th
day of
the month prior to the month in which services will be performed.
(c) Payment
of Stock Consulting Fee: In connection with the Stock Consulting Fee, the
Company will issue to Prime an amount of stock equal to the Stock Consulting
Fee
no later than ten (10) business days of the completion of each Quarter. The
number of shares to be issued for each such Quarter will be determined by taking
the sum of the shares for each month in such Quarter as the shares for each
such
month are determined by apportioning a number of shares equal to the amount
of
$15,000 as based upon the average closing price of the Company’s common stock on
the OTC Bulletin Board for the last five business days of each month in each
such calendar year quarterly period then ended. In connection with the payment
of the Cash Consulting Fee, Prime shall
be
granted “piggyback” rights pursuant to which Prime may request that the Company
include the stock provided as the Stock Consulting Fee in any registration
statement filed with the Securities and Exchange Commission to register other
common stock of the Parent (other than a registration on Form S-4 or S-8, or
any
successor or other forms promulgated for similar purposes) and, in connection
therewith, the parties have executed that form of registration rights agreement
attached hereto as Exhibit A.
(d) Adjustments:
In the event of early termination of this Agreement by either party, Prime’s
cash payment for the month in which the Agreement will terminate will be subject
to a pro rata adjustment to reflect the number of days in such month that Prime
will be providing consulting services. In the event of early termination by
the
Company “With Cause” or by the Prime other than for “Good Reason,” as such terms
are defined in Section 7 hereof, Prime’s stock payment will be subject to a pro
rata, downward adjustment to reflect the number of days during which this
Agreement was in effect.
(e) Expenses:
The Company shall reimburse Prime for all reasonable out-of-pocket business
expenses incurred by Prime in the performance of this Agreement. Any single
expense amount in excess of $1,000 will require advance written approval from
the Company.
5. Status
as Independent Contractor.
The
parties intend and acknowledge that Prime is acting as an independent
contractor. The Company shall not be responsible for any withholding in respect
of taxes or any other deductions in respect of the fees to be paid to Prime
and
all such amounts shall be paid without any deduction or withholding. Nothing
in
this Agreement shall be construed to create any partnership, joint venture
or
similar arrangement between the Company and Prime or to render either party
responsible for any debts or liabilities of the
6. Indemnity
and Limitation of Liability.
Except
as otherwise arising from or attributable to the gross negligence of Prime,
the
Company shall indemnify, protect, defend and hold Prime and its employees,
officers, directors and shareholders harmless from and against any and all
liabilities, claims and causes of action, including without limitation, all
legal fees and expenses incurred by Prime and its employees, officers, directors
and shareholders in the prosecution, defense, settlement or investigation
thereof, that shall arise or result from the services performed by Prime
hereunder or that may otherwise relate to this Agreement. Neither party hereto
shall be liable to the other for any consequential, special, punitive or
indirect damages arising out of this Agreement. The maximum liability hereunder
of Prime shall be limited to the actual amounts of the Cash Consulting Fee
and
Stock Consulting Fee that it receives from the Company.
7. Confidentiality.
Prime
acknowledges that in connection with the services to be rendered under this
Agreement, Prime may be provided with confidential business information of
the
Company. The information will include, but not be limited to, competitive
information pertaining to the Company’s employees, business partners, land and
lease holdings, financial results and drilling and exploration activities.
Prime
agrees to keep any information or materials (the “Confidential Information”) in
the strictest confidence and not to disclose or disseminate any such
Confidential Information to any person, firm or other business entity except
to
those employees, Prime’s or other independent contractors of the Company as
shall be necessary or advisable for the carrying out of the purposes of this
Agreement.
All
materials relating to the business and affairs of the Company, including,
without limitation, all manuals, documents, reports, equipment, working
materials, lists of shareholders, customers and clients, and information
collected or prepared by the Company or Prime in the course of Prime's
engagement, are the property of the Company. Upon the termination of this
Agreement for any reason, Prime shall cease the use of such materials, return
them to the Company (including all copies and reproductions that may have been
made or received), and delete related information from all retrieval systems
and
databases used by Prime
Information
will not be deemed to be Confidential Information restricted by this Section
6
if Prime can show that: (i) the information was in Prime’s possession or within
Prime‘s knowledge before the Company disclosed it to Prime; (ii) the information
was or became generally known to those who could take economic advantage of
it;
(iii) Prime obtained the information from a party having the right to disclose
it to Prime without violation of any obligation to the Company, or (iv) Prime
is
required to disclose the information pursuant to legal process (e.g., a
subpoena), provided that Prime notifies the Company immediately upon receiving
or becoming aware of the legal process in question. No combination of
information will be deemed to be within any of the four exceptions in the
previous sentence, however, whether or not the component parts of the
combination are within one or more exceptions, unless the combination itself
and
its economic value and principles of operation are themselves within such an
exception or exceptions.
8. Termination.
Either
party may terminate this Agreement for any reason upon 30 days prior written
notice, including but not limited to termination by the Company “With Cause” or
termination by the Prime for “Good Reason”.
“With
Cause” shall be (i) Prime’s willful, material and irreparable breach of this
Agreement, (ii) Prime’s willful dishonesty, fraud or material misconduct with
respect to the business or affairs of the Company; (iii) Prime’s conviction for
a felony; (iv) Prime’s gross negligence in the performance of his duties
hereunder, or (v) Prime’s intentional nonperformance of his duties
hereunder.
“Good
Reason” shall exist if the Company does not pay any material amount of
compensation due Prime hereunder within seven (7) days of the due date thereof
provided that Prime shall have provided the Company with written notice of
such
default and given the Company 3 business days to cure such default.
9. Amendments,
Modifications, Waivers, Etc.
No
amendment or modification to this Agreement, nor any waiver of any term or
provision hereof, shall be effective unless it shall be in a writing signed
by
the party against whom such amendment, modification or waiver shall be sought
to
be enforced. No waiver of any term or provision shall be construed as a waiver
of any other term or condition of this Agreement, nor shall it be effective
as
to any other instance unless specifically stated in a writing conforming with
the provisions of this Section 8.
10. Successors
and Assigns.
This
Agreement shall be enforceable against any successors in interest, if any,
to
the Company and the Prime. Except as specifically provided herein, neither
the
Company nor the Prime shall assign any of their respective rights or obligations
hereunder without the written consent of the other in each
instance.
11. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
12. Notices.
Any
notices required or permitted to be given under this Agreement shall be
effective upon receipt at the respective addresses in the recitals to this
Agreement unless the address for notice to either party shall have been changed
by a notice given in accordance with this Section 11.
13. Governing
Law; Dispute Resolution.
This
Agreement shall be governed by, and construed in accordance with, the
substantive laws of the State of Texas, without regard for principals of
conflicts of laws. Any claims, demands, differences, causes of action, disputes,
or controversies arising out of or in connection with this Agreement shall,
as
far as possible, be settled amicably. Failing an amicable settlement within
thirty (30) days of the written notification by one Party to the other of such
difference or dispute, such difference or dispute shall be referred to
arbitration. The arbitration shall be governed by, be conducted under, and
finally settled in conformance with the Rules of American Arbitration
Association in effect on the date of this Agreement. The arbitral panel shall
be
composed of three arbitrators. Each Party shall appoint one arbitrator within
thirty (30) days of the filing of the arbitration, and the two arbitrators
so
appointed shall then select the presiding arbitrator within thirty (30) days
after the latter of the two arbitrators have been appointed. If a Party fails
to
appoint its Party-appointed arbitrator or if the two Party-appointed arbitrators
cannot reach an agreement on the presiding arbitrator within the specified
time
period, then the President of the American Arbitration Association shall
nominate the remainder of the three arbitrators not yet appointed. The
arbitration shall take place in Houston, Texas and the proceedings shall be
in
the English language.
IN
WITNESS WHEREOF,
the
parties hereto have set their respective hands this 21st
day of
December 2007.
| TRUE NORTH ENERGY CORPORATION | PRIME
NATURAL
RESOURCES,
INC.
|
|||
| By: | /s/ Xxxx Folnovic | /s/ Xxxx X. Xxxxx | ||
|
Name: Xxxx Folnovic |
Name: Xxxx X. Xxxxx |
|||
|
Title: President
|
Title: Chief Financial Officer | |||
