CONSULTING AGREEMENT
Exhibit
10.10
This
Consulting Agreement (the “Agreement”), is made on April 24, 2006 and is
effective as of May 1, 2006 (the “Effective Date”) between Quest Oil
Corporation, a Nevada corporation, (hereinafter referred to as the “Company”)
and Xxxxxxx Xxxx (the “Consultant”).
WHEREAS,
the
Company requires the Services (as defined herein) and as set forth herein;
WHEREAS,
Consultant is qualified to provide the Company with the Services and is
desirous
to perform such Services for the Company; and
WHEREAS,
the
Company wishes to induce Consultant to provide the Services and wishes
to
contract with the Consultant regarding the same and compensate Consultant
in
accordance with the terms herein;
NOW,
THEREFORE,
in
consideration of the mutual covenants hereinafter stated, it is agreed
as
follows:
1. APPOINTMENT.
The
Company hereby engages Consultant and Consultant agrees to render the Services
to the Company as a consultant upon the terms and conditions hereinafter
set
forth.
2. TERM.
Subject
to Section 8(a), the term of this Consulting Agreement shall begin as of
the
date of the Effective Date, and shall terminate 12 months thereafter
(hereinafter, the "Term").
3. SERVICES.
During
the term of this Agreement, Consultant shall provide the Company with the
following “Services.” Services shall be limited to making recommendations and
offering advice to the Company’s Officers, Directors and other key Company
personnel.
a. Company
wishes for Consultant to specifically assist it in the reorganization of
various
debts on the Company’s balance sheet. Additionally and more generally, Company
is desirous of Consultant to assist management in conducting the Company’s
affairs for its Canadian oil and gas leases.
b. Consultant
agrees to provide the Services on a timely basis via: meetings with Company
representatives which may include other professionals; conferences calls
with
Company representatives and other professionals; and/or written correspondence
and documentation. Consultant cannot guarantee the results on behalf of
the
Company, but shall pursue all avenues that it deems reasonable through
its
network of contacts.
4. COMPENSATION. In
connection with this Agreement, the foregoing shall be referred to as
“Compensation.” All Compensation due to be delivered and/or paid to Consultant
pursuant to this Agreement shall be deemed completely earned, due, payable
and
non-assessable as of the date the Compensation is due to or vested in
Consultant. Compensation shall consist of the following:
a. $5,000
in
tradable shares of the Company’s common stock payable every 90
days.
b. Profit
from Operations.
Employee shall receive a Profit from Operations Bonus (“POB”), payable
quarterly, equal to a 1.66%
carried working interest (“CWI”) from all Canadian oil and gas xxxxx
operated
by the Company. The POB shall be derived from (i) new CWI revenues from
new
production, and (ii) increased CWI revenues from existing production, based
on
the trailing three months CWI revenues from the date of the execution of
this
Agreement. The CWI revenue calculation shall be based on the difference
derived
when subtracting (i) taxes, and (ii) royalties from a gross revenue amount.
So
long as this Agreement provides for a POB, the POB shall be paid for the
life of
a particular well.
Example:
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Assume
that an Agreement was Executed on April 1, 2006
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Well
No. 1
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Well
No.2
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January
1 to March 31
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0
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$100,000
in Gross Sales
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April
1 through June 30
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$100,000
in Gross Sales
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$200,000
in Gross Sales
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Assume:
(i) the two xxxxx above were both located in Alberta, Canada
and that
there was a provincial tax equal to 20%; and (ii) there was a
royalty
arrangement with a landowner, paying this person 10%.
Note
that a “Royalty” shall not mean a production cost or a fee to an operator
or other contractor providing services.
Analysis:
In the above example, the Employee with a 1.66% POB would receive,
from
the April 1 to June 30 period, $1,162 from Well 1 and $1,162
from Well 2.
Well 1 would be considered new production and the Well 2 POB
would be
based on the increase in CWI from the preceding three month period.
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5. REPRESENTATIONS
AND WARRANTIES OF COMPANY.
The
Company hereby represents, warrants and agrees as follows:
a. This
Agreement has been authorized, executed and delivered by the Company and,
when
executed by the Consultant will constitute the valid and binding agreement
of
the Company enforceable against the Company in accordance with its terms,
except
as enforcement thereof may be limited by bankruptcy, insolvency or
reorganization, moratorium or other similar laws relating to or affecting
creditors’ rights generally or by general equitable principles.
b. The
financial statements, audited and unaudited (including the notes thereto)
provided to Consultant, (the “Financial Statements”), will present fairly the
financial position of the Company as of the dates indicated and the results
of
operations and cash flows of the Company for the periods specified. Such
Financial Statements will be prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved except as otherwise stated therein.
c. The
Company is validly organized, existing and with active status under the
laws the
State of Nevada.
d. The
securities to be issued to Consultant, if any, have all been authorized
for
issuance and when issued, delivered and tendered to the Consultant by the
Company will be validly issued, fully paid and non-assessable.
e. Since
date of the most recent of the Financial Statements, there has not been
any (A)
material adverse change in the business, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company, (B) transaction
that is material to the Company, except transactions in the ordinary course
of
business, (C) obligation that is material to the Company, direct or contingent,
incurred by the Company, except obligations incurred in the ordinary course
of
business, (D) change that is material to the Company or in the common shares
or
outstanding indebtedness of the Company, or (E) dividend or distribution
of any
kind declared, paid, or made in respect of the common shares.
f. The
Company shall be deemed to have been made a continuing representation of
the
accuracy of any and all facts, material information and data which it supplies
to Consultant and acknowledges its awareness that Consultant will rely
on such
continuing representation in disseminating such information and otherwise
performing its advisory functions. Consultant in the absence of notice
in
writing from the Company, will rely on the continuing accuracy of material,
information and data supplied by the Company. Consultant represents that
he has
knowledge of and is experienced in providing the aforementioned
services.
6. INDEMNIFICATION.
The
Company agrees to indemnify the Consultant and hold it harmless against
any
losses, claims, damages or liabilities incurred by the Consultant, in connection
with, or relating in any manner, directly or indirectly, to the Consultant
rendering the Services in accordance with the Agreement, unless it is determined
by a court of competent jurisdiction that such losses, claims, damages
or
liabilities arose out of the Consultant’s breach of this Agreement, sole
negligence, gross negligence, willful misconduct, dishonesty, fraud or
violation
of any applicable law. Additionally, the Company agrees to reimburse the
Consultant immediately for any and all expenses, including, without limitation,
attorney fees, incurred by the Consultant in connection with investigating,
preparing to defend or defending, or otherwise being involved in, any lawsuits,
claims or other proceedings arising out of or in connection with or relating
in
any manner, directly or indirectly, to the rendering of any Services by
the
Consultant in accordance with the Agreement (as defendant, nonparty, or
in any
other capacity other than as a plaintiff, including, without limitation,
as a
party in an interpleader action). The Company further agrees that the
indemnification and reimbursement commitments set forth in this paragraph
shall
extend to any controlling person, strategic alliance, partner, member,
shareholder, director, officer, employee, agent or subcontractor of the
Consultant and their heirs, legal representatives, successors and assigns.
The
provisions set forth in this Section shall survive any termination of this
Agreement.
7. COMPLIANCE
WITH SECURITIES LAWS.
The
Company understands that any and all compensation outlined in this Agreement
shall be paid solely and exclusively as consideration for the aforementioned
consulting efforts made by Consultant on behalf of the Company as an independent
contractor. The Parties to be performing the services outlined in this
Agreement
are natural persons. Consultant’s engagement does not involve the marketing of
any Company securities nor is Consultant being hired to raise money for
the
Company.
8. MISCELLANEOUS.
a. Termination:
This
Agreement may be terminated by either Party for any reason at any time
(hereinafter referred to as a “Termination”).
b. Modification:
This
Agreement sets forth the entire understanding of the Parties with respect
to the
subject matter hereof. This Agreement may be amended only in writing signed
by
both Parties.
c. Notices:
Any
notice required or permitted to be given hereunder shall be in writing
and shall
be mailed or otherwise delivered in person to the Parties at the addresses
set
forth above.
d. Waiver:
Any
waiver by either party of a breach of any provision of this Agreement shall
not
operate as or be construed to be a waiver of any other breach of that provision
or of any breach of any other provision of this Agreement. The failure
of a
party to insist upon strict adherence to any term of this Consulting Agreement
on one or more occasions will not be considered a waiver or deprive that
party
of the right thereafter to insist upon adherence to that term of any other
term
of this Consulting Agreement.
e. Severability:
If any
provision of this Agreement is invalid, illegal, or unenforceable, the
balance
of this Consulting Agreement shall remain in effect. If any provision is
inapplicable to any person or circumstance, it shall nevertheless remain
applicable to all other persons and circumstances. If any compensation
provision
is deemed unenforceable or illegal, then in the case of the delivery of
common
stock to the Consultant, Consultant shall be entitled to receive a cash
benefit
equal to the value of the common stock that would have been tendered had
such a
provision not been illegal or unenforceable.
f. Arbitration:
Any
dispute or other disagreement arising from or out of this Agreement shall
be
submitted to arbitration under the rules of the American Arbitration Association
and the decision of the arbiter(s) shall be enforceable in any court having
jurisdiction thereof. Arbitration shall occur only in San Diego County,
CA. The
interpretation and the enforcement of this Agreement shall be governed
by
California Law as applied to residents of the State of California relating
to
contracts executed in and to be performed solely within the State of California.
g. Governing
Law:
The
subject matter of this Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada (without reference to its
choice
of law principles), and to the exclusion of the law of any other forum,
without
regard to the jurisdiction in which any action or special proceeding may
be
instituted. EACH PARTY HERETO AGREES TO SUBMIT TO THE PERSONAL JURISDICTION
AND
VENUE OF THE STATE AND/OR FEDERAL COURTS LOCATED IN THE COUNTY OF SAN DIEGO,
CALIFORNIA FOR RESOLUTION OF ALL DISPUTES ARISING OUT OF, IN CONNECTION
WITH, OR
BY REASON OF THE INTERPRETATION, CONSTRUCTION, AND ENFORCEMENT OF THIS
AGREEMENT, AND HEREBY WAIVES THE CLAIM OR DEFENSE THEREIN THAT SUCH COURTS
CONSTITUTE AN INCONVENIENT FORUM. AS A MATERIAL INDUCEMENT FOR THIS AGREEMENT,
EACH PARTY SPECIFICALLY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY ISSUES
SO
TRIABLE. If it becomes necessary for any party to institute legal action
to
enforce the terms and conditions of this Agreement, the prevailing party
shall
be awarded reasonable attorneys fees, expenses and costs.
h. Specific
Performance:
The
Company and the Consultant shall have the right to demand specific performance
of the terms, and each of them, of this Agreement.
i. Execution
of the Agreement:
The
Company, the party executing this Agreement on behalf of the Company, and
the
Consultant, have the requisite corporate power and authority to enter into
and
carry out the terms and conditions of this Agreement, as well as all
transactions contemplated hereunder. All corporate proceedings have been
taken
and all corporate authorizations and approvals have been secured which
are
necessary to authorize the execution, delivery and performance by the Company
and the Consultant of this Agreement. This Agreement has been duly and
validly
executed and delivered by the Company and the Consultant and constitutes
a valid
and binding obligation, enforceable in accordance with the respective terms
herein. Upon delivery of this Agreement, this
Agreement, and the other agreements and exhibits referred to herein, will
constitute the valid and binding obligations of Company,
and
will be enforceable in accordance with their respective terms. Delivery
may take
place via facsimile transmission.
j. Joint
Drafting and Reliance on Independent Counsel.
This
Agreement shall be deemed to have been drafted jointly by the Parties hereto,
and no inference or interpretation against any one party shall be made
solely by
virtue of such party allegedly having been the draftsperson of this Agreement.
The Parties have each conducted sufficient and appropriate due diligence
with
respect to the facts and circumstances surrounding and related to this
Agreement. The Parties expressly disclaim all reliance upon, and prospectively
waive any fraud, misrepresentation, negligence or other claim based on
information supplied by the other Party, in any way relating to the subject
matter of this Agreement.
k. Acknowledgments
and Assent.
The
Parties agree that they have read this Agreement and understand the content
herein, and freely and voluntarily assent to all of the terms
herein.
SIGNATURE
PAGE
IN
WITNESS WHEREOF, this Agreement has been executed by the Parties as of
the date
first above written.
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QUEST
OIL CORPORATION, INC.
_________________________________
By:
Xxx Xxxxxx
Its:
Chief Financial Officer
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___________________________________
By:
Xxxxxxx Xxxx
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A
FACSIMILE COPY OF THIS AGREEMENT SHALL HAVE THE SAME LEGAL EFFECT AS AN
ORIGINAL
OF THE SAME.
