EXHIBIT 10.6
INDEPENDENT CONTRACTOR SERVICES AGREEMENT
THIS AGREEMENT is made and
shall be effective as of the 1st day of April, 2005
BETWEEN:
| |
Sky
Petroleum, Inc., a corporation incorporated in the State of Nevada, United States of
America, with offices in the City of Calgary, in the Province of Alberta, Canada and in
the City of Austin, in the state of Texan, U.S.A. (“Sky” or the
“Corporation”) |
— and —
| |
Xxxxxxx
Xxxxxx, an individual residing in the City of Austin, Texas (“Xxxxxx”) and
acting also for Xxxxxx Advisors, (the “Contractor”) |
WHEREAS the Corporation is
principally engaged in the acquisition, development, exploration and production of oil and
natural gas reserves, among other things;
AND WHEREAS the Corporation
wishes to engage the services and expertise of Xxxxxx, on the terms, conditions and for
the considerations as hereinafter set forth;
AND WHEREAS the Contractor
shall make available to the Corporation the services of Xxxxxx to perform services for the
Corporation;
AND WHEREAS the Parties desire
to enter into this Agreement to set forth their respective rights and obligations;
NOW THEREFORE in consideration of
the premises and the mutual covenants herein contained, and in consideration of the
Contractor providing consulting services to the Corporation, the Corporation and the
Contractor hereby covenant and agree as follows:
| 1.0 |
|
Contract
for Services |
| 1.01 |
|
Subject
to the terms and provisions of this Agreement, the Corporation hereby agrees to contract
for and engage the services of the Contractor, and the Contractor agrees to provide
services of Xxxxxx in accordance with and subject to the provisions of this Agreement it
being clearly provided that the services of Xxxxxx are in all respects dedicated and the
Contractor will procure that Xxxxxx will not engage in activity that conflicts or
diminishes his ability to perform his obligations to the Corporation. |
Execution Version
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| 1.02 |
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Xxxxxx'x
services hereunder shall be provided on the following terms and conditions: |
| |
(a) |
|
Xxxxxx
shall diligently serve the Corporation and cooperate with the Corporation and utilize
maximum professional skill and care to ensure that all services rendered hereunder are to
the satisfaction of the Corporation, acting reasonably; |
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(b) |
|
Xxxxxx’x
duties and responsibilities are enumerated in Appendix “B”. |
| 1.03 |
|
The Parties agree that the Contractor enters into this Agreement as an independent
Contractor, and under no circumstances shall the Contractor or Xxxxxx look to the
Corporation as an employer, partner, agent or principal. Contractor and Xxxxxx acknowledge
that Xxxxxx is not entitled to any benefits accorded to the Corporation’s employees,
including, without limitation, worker’s compensation, disability insurance, vacation
or sick pay. The Contractor and Xxxxxx, jointly and severally hereby agree to indemnify
and save the Corporation harmless from any and all circumstances where Xxxxxx is deemed to
be an employee, including where the Corporation becomes liable for the amounts of
statutory deductions, or all other charges including deductible amounts payable to taxing
authorities, fees, interest or penalties, for example. The Corporation hereby agrees to
indemnify and save the Contractor and Xxxxxx harmless from any and all circumstances where
the Corporation is deemed to be an employer, including where the Contractor becomes liable
for the amounts of statutory deductions, or all other charges including deductible amounts
payable to taxing authorities, fees, interest or penalties, for example. |
| 1.04 |
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Contractor shall pay, when and as due, any and all taxes, duties and other similar charges
assessed or incurred as a result of Xxxxxx’x income for services rendered by Xxxxxx.
Contractor will be responsible for all liabilities in respect of all taxes relating to
compensation under this Agreement, and will indemnify the Corporation against all claims,
costs, penalties, or demands made by any governmental authority with respect to any
income, sales or other taxes in relation to the compensation payable under the this
Agreement (“Statutory Deductions”). Xxxxxx acknowledges that he is at all times
personally responsible to pay amounts due in respect of Statutory Deductions, and that
such amounts are subject to the indemnity provided in Section 1.03 herein. |
| 1.05 |
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Contractor agrees to procure and cause Xxxxxx to dedicate his time, attention and best
efforts to further the business and interests of the Corporation during the period of this
Agreement. |
| 1.06 |
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The parties agree that no oral agreement or provision of this Agreement shall be construed
so as to make the Contractor an agent, partner, or servant of the Corporation and the
Contractor has no authority to make any commitments or to take any action which may be
binding upon the Corporation, except for matters |
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within
the scope of duties set out in Schedule “B” hereto, or as may be expressly
authorized in writing by the Corporation. |
| 2.0 |
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Compensation
Arrangements |
| 2.01 |
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The compensation (the “Compensation”) provided to the Contractor by the
Corporation is as has been set forth in Appendix “A” attached hereto. The
parties hereby agree that the compensation arrangements will be the subject of review by
the Corporation eight months after the effective date of this agreement. |
| 3.0 |
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Confidential
Information and Conflict of Interest |
| 3.01 |
|
Contractor hereby agrees and acknowledges that it and Xxxxxx will have access to and will
be entrusted with confidential information concerning the affairs and business of the
Corporation, and agrees that the disclosure of such confidential information may be
detrimental to the Corporation and the shareholders thereof. Contractor acknowledges and
agrees that the right to maintain and preserve confidentiality constitutes a proprietary
right which the Corporation is entitled to protect. Accordingly the Contractor agrees to
execute a Confidentiality Agreement in the form attached hereto as Schedule “C”
at the time of executing this agreement, and agrees to renew, or revise such agreement
from time to time as required by the Corporation, acting reasonably. |
| 3.02 |
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In the event of termination of this Agreement for any reason whatsoever, nothing in this
Agreement shall preclude Contractor or Xxxxxx from pursuing a livelihood in the same
business or sector as that of the Corporation. |
| 4.01 |
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This contract for services and all other rights, benefits, and privileges herein conferred
are personal to the Contractor and accordingly may not be assigned by the Contractor. |
| 5.0 |
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Term
and Termination Provisions |
| 5.01 |
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This Agreement shall continue in full force for an initial term (“Initial Term”)
commencing on the Effective Date and ending on July 31, 2006 unless terminated in
accordance with Section 5.02. |
| 5.02 |
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This
Agreement shall be terminated upon the occurrence of any one of the following events: |
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(a) |
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the
death or incapacity of Xxxxxx; |
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(b) |
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written
notice by the Corporation to terminate this Agreement without cause, prior
to the end of the contract period, upon payment by the |
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Corporation
of a sum equal to six months total compensation as set forth in Appendix “A”;
|
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(c) |
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written
notice by the Corporation to terminate this Agreement with cause; |
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(d) |
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ninety
(90) days written notice by the Contractor of its intention to terminate this
Agreement. |
| 5.03 |
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In the event that the Agreement is terminated pursuant to Clause 5.02 (b), the Corporation
shall immediately pay to Contractor a termination amount equal to the sum of six months
compensation. |
| 5.04 |
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In the event that the Agreement is terminated pursuant to Clause 5.02(d), the Contractor
shall be paid compensation until the last day that services were provided. |
| 5.05 |
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In the event of a Change of Control, the Contractor shall have a period of ninety (90)
days within which to elect to continue to provide services as described herein. In the
event that, within that ninety (90) day period, the Contractor elects not to continue to
provide services to the Corporation, the Contractor shall deliver written notice of such
intention to the Corporation, and shall immediately following delivery of such notice,
receive a lump sum payment as determined in accordance with Article 5.02(b). For the
purposes of this Agreement, the term “Change of Control” means as follows: |
| |
(a) |
|
the
acquisition hereafter, directly or indirectly and by any means whatsoever,
in one transaction or a series of transactions, by any person or by a
group of persons acting jointly or in concert, of that number of voting
shares of the Corporation which is equal to or greater than Fifty Percent
(50%) of the total issued and outstanding voting shares of the Corporation
immediately after such acquisition, but excluding any issue or sale of
shares of the Corporation by way of prospectus or private placement; |
| |
(b) |
|
the
election at a meeting of the Corporation’s shareholders, as Directors
of the Corporation, of a number of persons, who were not included in the
slate for election as Directors proposed to the Corporation’s
shareholders by the Corporation’s prior Board of Directors, and who
would represent a majority of the Board of Directors, or the appointment
as Directors of the Corporation, of a number of persons which would
represent a majority of the Board of Directors, nominated by any holder of
voting shares of the Corporation or by any group of holders of voting
shares of the Corporation acting jointly or in concert and not approved by
the Corporation’s prior Board of Directors; |
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(c) |
|
the
completion of any transaction (including the sale, lease or other transfer
of assets of the Corporation) or the first of a series of transactions
which |
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would
have the same or similar effect or result as any transaction or series of
transactions referred to in subsection (a) and (b) above; or |
| |
(d) |
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a
determination by the Board of Directors of the Corporation that there has been
a change, whether by way of a change in the holding of the voting shares
of the Corporation, in the ownership of the Corporation’s assets or
by any other means, as a result of which any person or any group of
persons acting jointly or in concert is in a position to exercise
effective control of the Corporation. |
| 6.01 |
|
In consideration of the payment of termination compensation as provided herein and the
additional provisions of this Agreement, Contractor and the Corporation agree to forever
release and discharge the other from any and all obligations to pay any further amounts or
benefits to the other with respect to the termination thereof, and upon payment agree to
execute such documentation as may be required, acting reasonably. |
| 7.01 |
|
Upon the expiration of the term set forth herein, this Agreement shall be terminated
unless both the Corporation and Contractor agree to renew this Agreement. Such a renewal
may be verbal but shall be confirmed in writing prior to the end of the then current term.
In the event of termination pursuant to this paragraph the parties shall have no further
obligations to each other except for the obligations set out in Clause 3.01, including
documents executed pursuant thereto which obligations will survive any termination of this
Agreement. |
| 7.02 |
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The parties shall from time to time and at all times do such further acts and execute and
deliver all such further deeds and documents as shall be reasonably required in order to
fully perform the terms of this Agreement. |
| 7.03 |
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The Corporation may elect to offer regular employment to Xxxxxx during the term of this
Agreement or upon the expiration of the term set forth herein. Employment terms would be
negotiated between Xxxxxx and the Corporation at that time. |
| 7.04 |
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This Agreement shall be construed pursuant to the laws in effect in the State of Nevada
and the parties hereto hereby attorn to the Courts of the State of Nevada and if
applicable, the Federal Courts of United States of America. |
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| 8.01 |
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All notices required or allowed to be given under this Agreement shall be made either
personally or by mailing same by prepaid registered post, and any notice mailed as
aforesaid shall be deemed to have been received by the addressees thereof on the fifth
business day following the day of mailing: |
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To the Contractor: |
Xxxxxx Advisors
0000 Xxxxxxxxx Xxxxxxx Xxxx, Xxxx 00
Xxxxxx XX 00000
|
| 8.02 |
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Any
party may from time to time change its address for service hereunder on written notice to
the other party. |
[The Balance of this Page has Intentionally Been Left Blank]
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| 9.01 |
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The parties hereto agree that this Agreement replaces and supersedes any previous
agreements, either verbal or written, and any such previous agreements are hereby
expressly terminated. |
IN WITNESS WHEREOF the parties
hereto have executed this Agreement effective as of the date and year first above written.
|
Per: ___________________________ |
___________________________
Xxxxxxx Xxxxxx |
|
|
Xxxxxx Advisors
Per: _________________________________ |
APPENDIX “A”
COMPENSATION ARRANGEMENT
| 1.01 |
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Contractor
shall provide the services and duties and undertake the responsibilities as outlined
in Appendix "B". The fees will be $10,000 U.S. per month for the term of this
Agreement |
| 2.01 |
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Contractor
agrees to provide Xxxxxx on a regular schedule of five days per week for the duration of
this Agreement. |
| 3.0 |
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Benefits
and Perquisites |
| 3.01 |
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Reasonable
parking expenses near the Corporation's offices. |
| 3.02 |
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Reasonable
business expenses, to be approved by the Corporation; |
| 3.03 |
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Vehicle
expenses, when used for the benefit of the Corporation in carrying out Corporation
duties, to be at $0.45/km (IRS equivalent). |
| 3.04 |
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Additional
benefits as adopted by the Company that will be available to full time employees that may
cover such things as health care, insurance, etc. |
| 3.05 |
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Business
class travel. |
| 4.01 |
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The
Contractor shall be provided with Stock Options by the Corporation as set forth in the
Corporation’s Stock Option Plan subject to the terms and conditions set forth in
such Plan. |
APPENDIX
“B”
Position
and Reporting: Vice President (Corporate Development) reporting to the Chief Executive
Officer.
Duties and
Responsibilities of the Position:
Provide services that are generally
associated with the duties of a senior corporate development executive including, without
limitation:
| (a) |
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at
all times serving the best interests of the Corporation; |
| (b) |
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assisting
the Chief Executive Officerin developing appropriate strategies and business
plans of the Corporation (including principally business development, growth
and marketing strategies and plans) for consideration and approval of the Board
of Directors of the Corporation; |
| (d) |
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representing
the Company to the public and the public markets, for the purposes of seeking
investor capital and in general and assisting the President to do likewise; |
| (g) |
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reporting
to the Chief Executive Officer from time to time regarding corporate
development and investor relations initiatives. |
APPENDIX “C”
CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT
is entered into and shall be effective as of this 1st day of April, 2005
BETWEEN:
| |
Sky
Petroleum, Inc., a body corporate, duly incorporated pursuant to the laws of the State
of Nevada, one of the United States of America, with an office in the City of Calgary, in
the Province of Alberta, (hereafter the Disclosing Party”) |
— and —
| |
Xxxxxxx.
Xxxxxx, on his own
behalf, and on behalf of Xxxxxx Advisors, (hereafter
collectively the “Receiving Party”) |
WHEREAS the Disclosing Party
is prepared to disclose certain information to the Receiving Party in order to enable the
Receiving Party in the position of Vice President (Corporate Development and Investor
Relations) of Sky Petroleum, Inc. to faithfully represent the commercial and business
interest of the Disclosing Party (the “Project”);
AND WHEREAS in the course of
such disclosure confidential, proprietary and commercially sensitive information of the
Disclosing Party will come into the possession of the Receiving Party;
NOW THEREFORE THIS AGREEMENT
WITNESSES that in consideration of the engagement of the Receiving Party by the
Disclosing Party, the covenants and agreements herein contained and other good and
valuable consideration, the Parties hereby agree as follows:
| 1. |
|
The
Receiving Party hereby acknowledges that all information, contracts and
contract terms, statistics, plans and prospects, specifications, presentations,
technical data, geology, geophysics, engineering, financing proposals and
plans, and any and all other material or information of any kind whatsoever
furnished to it by or with the concurrence of the Disclosing Party (hereinafter
called the “Confidential Information”) will be furnished to the
Receiving Party in strictest confidence, and the Receiving Party hereby
covenants with the Disclosing Party that: |
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(a) |
|
it
shall keep the Confidential Information in strictest confidence and will not
disclose or reveal the same to any other person other than in accordance
with the provisions of this Agreement; |
| |
(b) |
|
it
shall not make any copies, duplicates, recordings or other reproductions of
the Confidential Information unless they are reasonably required by the
Receiving Party in relation to the Project and any such copies,
duplicates, recordings or reproductions shall be subject to the terms and
conditions of this Agreement; and |
| |
(c) |
|
it
shall not at any time use the Confidential Information for any purpose not
related to the Project. |
| 2. |
|
The
Receiving Party agrees that the Confidential Information shall be made
available only to those employees and advisors of the Disclosing Party who
are involved in the Project and who need access to the Confidential
Information in performing their responsibilities in respect of the
Project, and the Receiving Party shall cause such employees and advisors
to agree to observe the confidentiality obligations of the Receiving Party
as set forth in this Agreement. |
| 3. |
|
The
Receiving Party agrees that it shall take all reasonable steps as may be
necessary to protect and prevent the disclosure of the Confidential
Information to any unauthorized person by it or its employees or advisors. |
| 4. |
(a) |
|
Upon the
conclusion or termination of the Receiving Parties’ obligations
in relation to the Project and at the request of the Disclosing Party, the
Receiving Party shall return to the Disclosing Party all Confidential
Information provided to it and any and all copies thereof and shall
destroy all extracts, reports, recordings, reproductions and notes
thereof. |
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(b) |
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All
right, title and interest in and to the Confidential Information shall
remain the exclusive property of the Disclosing Party and no license for
or other rights of any kind whatsoever in or to the Confidential
Information or other type or form of intellectual or industrial property
derived there from is granted or can be implied to have been granted at
any time by the disclosure of the Confidential Information by the
Disclosing Party to a Receiving Party. |
| 5. |
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Confidential
Information shall, for the purposes of this Agreement, not include: |
| |
(a) |
|
any
information which was rightfully in the possession of a Receiving Party
prior to the date of disclosure of such information to the Receiving Party
by the Disclosing Party; |
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(b) |
|
any
information which was in the public domain prior to the date of disclosure of
such information to the Receiving Party by the Disclosing Party; |
| |
(c) |
|
any
information which becomes part of the public domain by publication or otherwise
except by an unauthorized act or omission on the part of the Receiving Party; |
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(d) |
|
any
information which is supplied to the Receiving Party by a third party who is
under no obligation to the Disclosing Party to maintain such information in
confidence; and |
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(e) |
|
any
information which is developed by a receiving party independently of the
disclosures made by the Disclosing Party under this Agreement. |
| 6. |
|
In
the event that the Receiving Party or any employees or advisors under the
Receiving Party’s control are required by a court or other legal tribunal
to disclose any of the Confidential Information, the Receiving Party shall
provide the Disclosing Party with prompt written notice of such requirement so
that the Disclosing Party may seek a protective order or other appropriate
remedy. In the absence of a protective order or other appropriate remedy being
sought or obtained by the Disclosing Party, the Receiving Party may disclose
only that portion of the Confidential Information which their legal counsel
advises them, in writing, that they are legally required to disclose. Further,
the Receiving Party shall cooperate with the Disclosing Party in obtaining an
appropriate protective order or other reliable assurance that confidential
treatment will be given to the Confidential Information by such court or other
legal tribunal. |
| 7. |
(a) |
|
The Receiving Party acknowledges that the provisions contained herein are
reasonable in the circumstances and necessary for the adequate economic
protection of the Disclosing Party. The Receiving Party further acknowledges
that the breach by it of any of the provisions herein contained would cause
irreparable harm to the Disclosing Party which would not be adequately
compensated for by damages and, accordingly, in the event of such breach, the
Receiving Party acknowledges and agrees that the Disclosing Party shall be
entitled in its discretion to commence proceedings for injunctive relief. |
| |
(b) |
|
The
provisions of this paragraph shall not be construed so as to derogate from any
other remedy which the Disclosing Party may have in the event of such breach
whether at law, equity or pursuant to the terms of this Agreement. |
| 8. |
|
This
Agreement constitutes the entire agreement between the parties hereto as to the
subject matter of Confidential Information and merges all prior discussions
between |
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the
parties hereto, and neither of the parties hereto shall be bound by any terms, conditions,
representations or undertakings in relation to Confidential Information other than as
expressly set forth herein. |
| 9. |
|
This
Agreement shall enure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns, provided however that
the Receiving Party shall not be entitled to assign this Agreement or any of
its obligations hereunder to any other person(s) without the prior written
consent of the Disclosing Party. The Disclosing Party shall be entitled to
assign this Agreement or any of its obligations hereunder to any of its
subsidiaries or affiliates without the consent of the Receiving Party. Any
other assignment by the Disclosing Party shall require the prior written
consent of the Receiving Party. |
| 10. |
|
Notwithstanding
anything else in this Agreement, the provisions of this Agreement shall
continue to apply until the expiry of five (5) years from the date of the
termination of the Consulting Agreement entered into between the Parties. |
| 11. |
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This
Agreement shall not be varied, altered or amended except by a document in
writing signed by all the parties hereto. |
| 12. |
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This
Agreement shall be governed by and construed in accordance with the laws of the
State of Nevada. |
| 13. |
|
If
any provision of this Agreement is determined to be invalid or unenforceable in
whole or in part, such validity or unenforceability shall attach only to such
provision and all other provisions hereof shall continue in full force and
effect. |
| 14. |
|
Notwithstanding
anything herein to the contrary, for the purposes of this Agreement,
Confidential Information shall also be deemed to include the existence of this
Agreement as well as the fact that the parties hereto have had or will have any
discussions relating to the Project. |
| 15. |
|
The
Receiving Party agrees to indemnify and hold harmless the Disclosing Party and
its affiliates, subsidiaries, employees, directors and officers from and
against all claims, demands, damages, losses, costs, expenses, actions or other
liability of every kind and description whatsoever incurred by the Disclosing
Party or its affiliates, subsidiaries, employees, directors or officers
resulting from the disclosure or use of the Confidential Information by the
Receiving Party or any of its employees or advisors, other than in accordance
with the terms of this Agreement. |
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Balance of this page has intentionally been left blank]
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IN WITNESS WHEREOF the parties
hereto have executed this Confidentiality Agreement as of the day and year first above
written.
| |
Sky Petroleum, Inc.,
Per: _____________________________
Xxxxxx Advisors
Per: _____________________________
Xxxxxxx Xxxxxx
Per: _____________________________
|
