Exhibit 10.1
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement"), dated as of January 28, 2003,
(the "Effective Date"), is entered into by and between Fan Energy, Inc., 000
Xxxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, a Nevada corporation
("FNEY"), and Xxxxxx X. Xxxxxx, 0000 Xxxxxx Xxx #X Xxxxxxxxx, XX 00000, an
individual (the "Consultant").
W I T N E S S E T H:
WHEREAS, FNEY desires to have the Consultant perform certain services and
to be assured of the Consultant's services on the terms and conditions
hereinafter set forth; and
WHEREAS, the Consultant desires to perform certain services for FNEY and is
willing to accept such retention by FNEY on those terms and conditions
hereinafter set forth; and
WHEREAS, Consultant has performed certain services for FNEY since January
1, 2002; and
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, FNEY and the Consultant
agree as follows:
(1) Services. The services ("Services") may include, but are not limited
to, the following:
a. Administration. The Consultant will provide FNEY with
administrative services, including, but not limited to, merger and
acquisition consultation, securities documentation, general business
consulting and additional services as mutually agreed upon between the
parties hereto.
b. Marketing. The Consultant may assist FNEY in the marketing and
advertising of FNEY and its products.
c. Networking. The Consultant may provide certain professional
networking opportunities for FNEY. Such opportunities may include
introductions to, and the formulation and maintenance of relationships
with, key business contacts in the United States and Europe.
d. Miscellaneous. In addition to the services set forth above in this
Section 1, the Consultant may provide additional guidance reasonably
related to the administrative and corporate development of FNEY.
(2) Retention. FNEY hereby retains the Consultant to provide the Services
and the Consultant accepts such retention, upon the terms and subject to the
conditions set forth in this Agreement.
(3) Term. The term of this Agreement shall be for a period of one (1) year
from the Effective Date (the "Term").
(4) Duties. During the Term of this Agreement, the Consultant shall perform
such duties as may be assigned to her from time to time by the President and
Chief Executive Officer and/or Board of Directors of FNEY. Notwithstanding
anything herein to the contrary, at all times the relationship of the Consultant
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to FNEY shall be that of independent contractors. Consultant shall allocate time
and Consultant's Personnel as it deems necessary to provide the Services. The
particular amount of time may vary from day to day or week to week. Except as
otherwise agreed, Consultant's monthly statement identifying, in general, tasks
performed for FNEY shall be conclusive evidence that the Services have been
performed. Additionally, in the absence of willful misfeasance, bad faith,
negligence or reckless disregard for the obligations or duties hereunder by
Consultant, neither Consultant nor Consultant's Personnel shall be rendering the
Services, including but not limited to losses that may be sustained in any
corporate act in any subsequent business opportunity undertaken by FNEY as a
result of advice provided by Consultant or Consultants' Personnel.
(5) Consideration. FNEY agrees to pay Consultant $50,000 for services
previously rendered during 2002 in FNEY common stock to be valued at the average
closing bid price for the five business days preceding the effective date
hereof. In addition, FNEY agrees to pay Consultant a $200,000 fee for Services
being rendered in 2003 in FNEY common stock to be valued at the average closing
bid price for the five business days preceding the last day of the prior fiscal
quarter. FNEY shall have the option to pay Consultant cash in lieu of the stock
for the services being rendered in 2003. In the event FNEY elects to pay
Consultant in cash rather than in stock, the cash payment shall represent the
remaining balance due Consultant in connection herewith. Consultant shall be
entitled to receive its stock on a quarterly basis until such time as the
consideration due Consultant under this Section 5 is paid in full. All shares
issued are considered fully earned and non-assessable as of the date issued,
resulting in Consultant's ownership of the foregoing ownership of all issued
shares vesting on the date of issuance. The shares will be registered with the
United States Securities and Exchange Commission on Form S-8.
(6) Expenses. During the Term of this Agreement, and upon submission of
proper invoices, receipts, the Consultant shall be reimbursed by FNEY for all
reasonable business expenses actually and necessarily incurred by the Consultant
on behalf of FNEY in connection with the performance of the Services under this
Agreement.
(7) Representations. The Consultant represents and warrants that he is not
a party to, or bound by, any agreements or commitments, or subject to any
restrictions, including but not limited to agreements related to previous
employment or retention containing confidentiality or non-compete covenants,
which may have a possibility of adversely affecting the performance of her
duties under this Agreement.
(8) Confidentiality. The Consultant acknowledges that as a result of the
performance of her duties under this Agreement, he has and will continue to have
knowledge of, and FNEY to, proprietary and confidential information of FNEY,
including, without limitation, inventions, trade secrets, technical information,
know-how, plans, specifications, methods of operations, financial and marketing
information and the identity of customers and suppliers (collectively, the
"Confidential Information"). Accordingly, the Consultant shall not, at any time,
either during or subsequent to the term of this Agreement, use, reveal, report,
publish, transfer or otherwise disclose any of the Confidential Information to
third parties without the prior written consent of FNEY, except for such
information which is or becomes part of general public knowledge from authorized
sources or information that they are required to disclose by a governmental
agency or law.
(9) Limitation of Liability. IN NO EVENT SHALL CONSULTANT BE LIABLE TO FNEY
UNDER THIS AGREEMENT OR OTHERWISE FOR CONSEQUENTIAL, EXEMPLARY, INCIDENTAL,
PUNITIVE, OR SPECIAL DAMAGES, INCLUDING LOST PROFITS, EVEN IF FNEY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN ANY EVENT, THE LIABILITY OF
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CONSULTANT TO FNEY FOR ANY REASON AND UPON ANY CAUSE OF ACTION WHATSOEVER SHALL
BE LIMITED TO THE COMPENSATION THEN PREVIOUSLY PAID TO CONSULTANT BY FNEY OR THE
CORRECTION OF ANY ALLEGED DEFAULT UNDER THIS AGREEMENT AT THE SOLE DISCRETION OF
FNEY.
(10) Miscellaneous.
(a) Entire Agreement. This Agreement sets forth the entire
understanding of the parties and merges and supersedes any prior or
contemporaneous agreements between the parties pertaining to the subject
matter hereof.
(b) Waivers and Modification. No modification of this Agreement or
waiver of any term or condition herein shall be effective unless it refers
to this Agreement, explicitly states that it intends to modify this
Agreement or to waive a term or condition herein, is in writing, and is
signed by both parties hereto. Terms contrary or in addition to the terms
of this Agreement in any document or correspondence shall have no effect
whatsoever unless said document or correspondence meets the aforesaid
conditions. Any waiver of any term or condition of this Agreement, or of
the breach of any covenant, representation, or warranty contained herein,
in any one instance, shall not operate or be deemed to be or construed as a
further or continuing waiver of such term, condition, or breach of
covenant, representation, or warranty, nor shall any failure to exercise,
or delay in exercising, any right, remedy, or power under this Agreement
operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, or power under this Agreement preclude any other or
further exercise thereof, or the exercise of any other right, remedy, or
power provided herein or by law or in equity.
(c) Successors and Assigns. Neither party shall have the right to
assign this Agreement, or any rights or obligations hereunder, without the
consent of the other party; provided, however, that upon the sale of all or
substantially all of the assets, business and goodwill of FNEY to another
company, or upon the merger or consolidation of FNEY with another company,
this Agreement shall inure to the benefit of, and be binding upon, FNEY
purchasing such assets, business and goodwill, or surviving such merger or
consolidation, as the case may be, in the same manner and to the same
extent as though such other company were FNEY. Subject to the foregoing,
this Agreement shall inure to the benefit of, and be binding upon, the
parties hereto and their legal representatives, heirs, successors and
permitted assigns.
(d) Severability. If any provision of this Agreement is held to be
invalid or unenforceable by a court of competent jurisdiction, such
invalidity or unenforceability shall not affect the validity and
enforceability of the other provisions of this Agreement and the provision
held to be invalid or unenforceable shall be enforced as nearly as possible
according to its original terms and intent to eliminate such invalidity or
unenforceability.
(e) Continuing Obligations. Rights and obligations theretofore
accruing but not satisfied as of the termination of this Agreement shall
remain in full force and effect until satisfied in accordance with this
Agreement.
(f) Force Majeure. The Consultant shall not be in default to FNEY
under this Agreement for any delay or failure to perform due to causes
beyond Consultant's reasonable control.
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(g) Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
(h) Communications. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed
to have been given at the time personally delivered or when mailed in any
United States post office enclosed in a registered or certified postage
prepaid envelope and addressed to the addresses set forth below, or to such
other address as any party may specify by notice to the other party;
provided, however, that any notice of change of address shall be effective
only upon receipt.
To FNEY: Fan Energy, Inc.
000 Xxxxx 00xx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telephone: 000.000.0000
Telecopier: 602.267.7400
To the Consultant: Xxxxxx X. Xxxxxx
0000 Xxxxxx Xxx #X
Xxxxxxxxx, XX 00000
Telephone: 000.000.0000
Telecopier: 909.471.0829
(i) Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by arbitration
administered by the American Arbitration Association ("AAA") in accordance
with its Commercial Rules (including its Emergency Interim Relief
Procedures] and its supplementary procedures for Securities Arbitration,
and judgment on the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof. The matter shall be heard in Florida by
a panel of three (3) AAA arbitrators, one picked by the Investor, one
picked by the Seller, and the third agreed to by the two selected
arbitrators. The Seller and the Investor, for themselves and their
respective successors in interest, hereby irrevocably consent to such
jurisdiction, venue and binding arbitration, and hereby irrevocably waive
any claim of forum non-conveniens or right to change such venue or to
litigate the underlying dispute in court.
(j) Governing Law. This Agreement is made and executed and shall be
governed by the laws of the State of Arizona, without regard to the
conflicts of law principles thereof.
(k) No Third-Party Beneficiaries. Each of the provisions of this
Agreement is for the sole and exclusive benefit of the parties hereto and
shall not be deemed to be for the benefit of any other person or entity.
(l) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(m) Contra Proferentem Waived. This Agreement was drafted by the
Consultant. However, all parties to this Agreement have been or have had
the opportunity to be represented by legal counsel, and hereby waive
application of the rule of contract construction which provides that terms
shall be construed against the drafting party.
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(n) Independent Contractor. Consultant and Consultant's Personnel will
act as an independent contractor in the performance of its duties under
this Agreement. Accordingly, Consultant will be responsible for payment of
all federal, state, and local taxes on compensation paid under this
Agreement, including income and social security taxes, unemployment
insurance, and any other taxes due relative to Consultant's Personnel, and
any and all business license fees as may be required. This Agreement
neither expressly nor impliedly creates a relationship of principal and
agent, or employee and employer, between Consultant's Personnel and FNEY.
Neither Consultant nor Consultant's Personnel are authorized to enter into
any agreements on behalf of FNEY. FNEY expressly retains the right to
approve, in its sole discretion, each business opportunity introduced by
Consultant, and to make all final decisions with respect to effecting a
transaction or any business opportunity.
(o) No Agency Express or Implied. This Agreement neither expressly nor
impliedly creates a relationship of principal and agent between FNEY and
Consultant, or employee and employer as between Consultant's Personnel and
FNEY.
(p) Termination. FNEY and Consultant may terminate this Agreement
prior to the expiration of the Term upon thirty (30) days written notice
with mutual written consent. Failing to have mutual consent, without
prejudice to any other remedy to which the terminating party may be
entitled, if any, either party may terminate this Agreement with thirty
(30) days written notice under the following conditions:
(1) By FNEY.
(i) If during the Primary Term of this Agreement or any
Extension Period, Consultant is unable or fails to provide
the Services as set forth herein for thirty (30) consecutive
business days because of illness, accident, or other
incapacity of Consultant's Personnel; or,
(ii) If Consultant willfully breaches or neglects the
duties required to be performed hereunder; or,
(iii) At Company's option without cause upon 30 days
written notice to Consultant; or
(2) By Consultant.
(i) If FNEY breaches this Agreement or fails to make
any payments or provide information required hereunder; or,
(ii) If FNEY ceases business or sells a controlling
interest to a third party, or agrees to a consolidation or
merger of itself with or into another corporation, or enters
into such a transaction outside of the scope of this
Agreement, or sells substantially all of its assets to
another corporation, entity or individual outside of the
scope of this Agreement; or,
(iii) If FNEY subsequent to the execution hereof has a
receiver appointed for its business or assets, or otherwise
becomes insolvent or unable to timely satisfy its
obligations in the ordinary course of, including but not
limited to the obligation to pay the Consultancy Fee; or,
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(iv) If FNEY subsequent to the execution hereof
institutes, makes a general assignment for the benefit of
creditors, has instituted against it any bankruptcy
proceeding for reorganization for rearrangement of its
financial affairs, files a petition in a court of
bankruptcy, or is adjudicated a bankrupt; or,
(v) If any of the disclosures made herein or subsequent
hereto by FNEY to Consultant are determined to be materially
false or misleading.
In the event Consultant elects to terminate without
cause or this Agreement is terminated prior to the
expiration of the Term by mutual written agreement, or by
FNEY for the reasons set forth in 1(i) and (ii) above, FNEY
shall only be responsible to pay Consultant for
un-reimbursed expenses, Consultancy Fee earned and accrued
up to and including approved upon the effective date of
termination. If this Agreement is terminated by FNEY for any
other reason, or by Consultant for reasons set forth in 2(i)
through (v) above, Consultant shall be entitled to any
outstanding unpaid portion of approved reimbursable
expenses, and for the remainder of the un-expired portion of
the applicable term of the Agreement.
(q) Indemnification. Subject to the provisions herein, FNEY and
Consultant agree to indemnify, defend and hold each other harmless from and
against all demands, claims, actions, losses, damages, liabilities, costs
and expenses, including without limitation, interest, penalties and
attorneys' fees and expenses asserted against or imposed or incurred by
either party by reason of or resulting from any action or a breach of any
representation, warranty, covenant, condition, or agreement of the other
party to this Agreement. FNEY acknowledges and affirms that it will not
request, require or otherwise induce Consultant to become involved in any
activities whatsoever that would result in Consultant violating any
provisions of the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, including, but not limited to, the
provisions of Form S-8, Regulations S-K and S-B, and FNEY agrees to
indemnify and hold harmless Consultant from any violation thereof.
(r) Authority. By signing below, each person executing this Agreement
on behalf of a party hereby personally warrants that said person has the
express authority to so execute this Agreement and bind said party hereto.
IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the date set forth above.
By: By:
/s/ Xxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxx
----------------------- ----------------------
Xxxxx X. Xxxxxx Xxxxxx X. Xxxxxx
President 0000 Xxxxxx Xxx #X
Fan Energy, Inc. Xxxxxxxxx, XX 00000
000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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