Consulting Agreement
This
Consulting Agreement ("Agreement") is made and entered into as
of September 18, 2007, by Ignis Petroleum Group, Inc, a Nevada
corporation (the "Company"), and Lifestyles Integration, Inc, a Texas
corporation ("Consultant").
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A.
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The
Company is currently engaged in the business of exploration for
and
production of natural gas and oil.
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B.
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The
Company has recently experienced financial difficulties, has
found it
difficult to grow the company, and has lost key executives. The
President
and CEO (“CEO”) has determined it is in the best interest of the Company
to obtain interim executive leadership for the
Company.
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C.
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Consultant
has substantial expertise in executive leadership and consulting
with and
providing management advice to companies involved in the energy
industry
in connection with the formulation of business plans and strategies
enabling growth and analysis of business and operating
procedures.
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D.
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Consultant
has been providing consulting services to the Company since January
31,
2006 pursuant to a Consulting Agreement dated January 24, 2006
(the “Prior
Consulting Agreement”). Although the Prior Consulting Agreement
expired April 30, 2006, the Consultant has continued to provide
consulting
services to the Company under the terms of the Prior Consulting
Agreement
on a month-to-month basis through the date
hereof.
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E.
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Consultant
and the Company have agreed on the terms and conditions pursuant
to which
Consultant will continue to be retained to provide consulting
services to
the CEO. This agreement will document and govern the terms and
conditions of Consultant’s provision of Consulting Services from May 1,
2006 through December 31, 2007 as more fully set forth
below.
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NOW,
THEREFORE, the parties agree as follows:
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Appointment
of Consultant
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By
this
Agreement, the Company appoints Consultant, and Consultant accepts such
appointment, to provide advice and consulting services to the Company’s CEO, in
accordance with the terms and conditions of this Agreement. It is
expressly understood
and agreed that Consultant is
appointed by, and shall report to, the Company’s CEO.
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Consultant
is retained to perform the following consulting services (the
"Services"):
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(a)
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To
review the Company’s current position, assist Company in selecting from
among the available strategic options for stabilization/growth,
and
recommend a path forward;
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(b)
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Support
the Company’s efforts to expand by analyzing and negotiating, under the
CEO’s direction, potential acquisitions using input data provided
by the
Company. Provide Company with scenarios for the potential
future performance of the prospects under the range of conditions
defined
by the Company;
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Generate
structural options for making and financing proposed acquisitions
based on
the Company’s stated objectives and resources. Discuss options
with Company Senior management and document options
selected. Participate in negotiating such documents, under the
CEO’s direction.
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(d)
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Support
the Company in the development of communications materials for
use by
Company Management in presenting to Funding Sources and sellers
of assets
of interest.
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(e)
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Provide
comments and advice to Company Senior Management on negotiating
positions
taken and written communications as requested by Company Senior
management
and negotiate on the company’s behalf, under the CEO’s
direction.
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The
Company expressly acknowledges and agrees that Consultant is retained to
analyze
and provide advice and recommendations regarding the foregoing matters
and
execute tasks given by the CEO under the direction of the CEO, and that
Consultant does not guarantee or warrant any specific results or outcome
of any
of the Services.
It
is
expressly agreed that Consultant will provide services similar to those
typically provided by an Executive Vice President and Chief Operating Officer
(“COO”), however; the Company acknowledges and agrees:
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·
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That
the Consultant’s role is to provide advice to the Company’s management
based on data provided and approved by the
Company.
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The
Company, its board of directors, and officers remain solely responsible
for all business decisions in accordance with the Company’s bylaws and
other applicable law.
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The
Consultant does not accept the legal duties owed by officers
and directors
to the Company’s shareholders, and the Company has not retained the
Consultant to discharge any such
duties.
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Consultant
does NOT provide any of the following services and Company explicitly
acknowledges that it has obtained or will obtain the services of others
to
advise Company in these areas;
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(a)
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Legal
services,
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(b)
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Valuation
services
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(c)
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Investment
banking services
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(d)
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Xxxxxxx
services
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(e)
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Environmental
services
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(f)
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Geological/Geophysical
services
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(g)
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Engineering
services
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The
above
list is provided to illustrate services not provided and is not intended
to be
exhaustive.
Therefore
it is mutually agreed that there will be no formal progress reports made
during
the conduct of this engagement. Consultant will maintain close
working contact with the Company’s CEO and provide him with work product
required by him to support the objectives of the Company in the form of
spreadsheets, emails, presentation materials, or other forms as required
to
deliver the Services defined above.
It
is
expressly agreed that Consultant will provide the services of its President
(“President”) to perform the Services. President will devote a
minimum of three working days per week to performing the services excluding
reasonable periods of vacation and public holidays defined by Consultants
policies.
Consultant
and the Company expressly agree that Consultant is an independent contractor,
and all Services performed under this Agreement are performed by Consultant
as
an independent contractor. Consultant shall control the time, manner,
and place of performance of the Services.
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Term;
Termination or Suspension
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(a)
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Except
as provided below, this Agreement, and the Services to be performed
under
it, commenced on May 1, 2006, and shall continue thereafter until
terminated by either party as described below.
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(b)
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The
Company may terminate this Agreement at any time, but the Company
shall
continue to pay the Consultant for the Services through December
1, 2007
unless the termination is for cause. The term “cause” shall
mean:
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(i)
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Consultant
willful failure, neglect, refusal, or nonperformance, at any
time, of
Consultant's duties or obligations set forth in this Agreement
or in
Consultant’s Retention Bonus Agreement with the Company dated June 1, 2007
(the “Retention Bonus Agreement”), or a willful breach by Consultant of
this Agreement or the Retention Bonus
Agreement;
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(ii)
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Consultant
conviction or no contest or guilty plea to or indictment for
(or its
procedural equivalent) a felony or crime involving moral turpitude,
or
Consultant or Consultant’s Employee’s guilty plea or no contest plea to a
lesser included offense or crime in exchange for withdrawal of
a felony
indictment, felony charge by information, or a charged crime
involving
moral turpitude, whether the charge arises under federal, state
or local
law;
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(iii)
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Consultant’s
Employee’s death or disability rendering
Consultant’s employee incapable of performing duties or obligations set
forth in this Agreement or in the Retention Bonus Agreement for
longer
than 4 weeks;
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(iv)
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Consultant
appropriation (or attempted appropriation) of a material business
opportunity of the Company or any of its affiliates, including,
without
limitation, attempting to secure or securing, any personal profit
in
connection with any transaction entered into on behalf of the
Company or
any of its affiliates;
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(v)
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Consultant
commission of an act of fraud, illegality, theft or willful misconduct
toward the Company or any of its affiliates in the course of
employment
with the Company that relates to the Company's or any of its
affiliates'
assets, activities, operations or other
employees;
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(vi)
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Consultant’s
repeated intoxication with alcohol or drugs while on the Company's
premises during regular business hours;
or
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(vii)
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Consultant’s
gross incompetence that has a material adverse impact on the
Company's
finances or operations or a pattern of gross incompetence of
Consultant’s
Employee’s, in each case as determined in good faith by the Board of
Managers of the Company;
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(c)
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After
December 1, 2007, the Company may terminate this Agreement upon
giving 30
days' prior written notice thereof to
Consultant.
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(d)
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After
December 1, 2007, and upon termination or cancellation of this
Agreement,
the Company shall have no liability to Consultant under this
Agreement
except for charges for Services performed by Consultant and accepted
by
the Company prior to receipt of notice of termination or cancellation
and
the 30 day notice period provided for in Paragraph 2(c). The
terms and conditions in this Agreement that by their sense and
context are
intended to survive the performance hereof by either or both
parties
hereunder shall so survive the termination, cancellation, or
completion of
performance of this Agreement.
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(e)
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The
Consultant may terminate this Agreement upon giving 30 days'
prior written
notice thereof to Company or for good reason. The term “good
reason” shall mean the Company’s breach of this Agreement or the Retention
Bonus Agreement and the continuing breach by the Company after
receiving
written notice by the Consultant giving the Company at least
15 days to
cure such breach. If this Agreement is terminated for good
reason by Consultant prior to December 1, 2007, Company shall
continue to
pay the Consultant for the Services through December 1,
2007.
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(f)
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Upon
termination or cancellation of this Agreement, the Consultant
shall have
no liability to Company under this agreement. The terms and
conditions in this Agreement that by their sense and context
are intended
to survive the performance hereof by either or both parties hereunder
shall so survive the termination, cancellation, or completion
of
performance of this Agreement.
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(g)
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Upon
completion of Consultant's services hereunder or at such other
time as may
be requested by Company, Consultant shall return to Company all
documents,
records, notebooks, including copies thereof, whether prepared
by
Consultant or others, in Consultant's
possession.
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Compensation;
Expenses
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Consultant
acknowledges that he was previously paid, as compensation for
the
performance of the Services during the period from May 1, 2006
through May
31, 2007, the following amounts:
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(i)
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The
sum of $10,000 per month; and
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(ii)
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The
sum of 30,000 shares of the Company’s restricted Common Stock per
month.
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(b)
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As
compensation for the performance of the Services beginning June
1, 2007
and continuing thereafter during the term of this Agreement,
Consultant
shall be paid the following amounts (with the Consultant acknowledging
that he has previously been paid such amounts for services provided
through August 31 2007):
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(i)
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The
sum of $12,500 per month (“Monthly Compensation”), paid in advance to
Consultant for each month during the term of this Agreement,
as
compensation for the Services performed while working three days
per week;
and
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(ii)
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The
sum of $2,083 per day (twice the daily rate implied by the Monthly
Compensation assuming 12 standard work days each month), payable
on
receipt of an invoice from Consultant, as compensation for the
Services
performed for each day worked beyond three days in any given
week;
and
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(iii)
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30,000
shares of the Company’s restricted Common Stock per month, granted in
advance to Consultant for each month during the term of this
Agreement, as
compensation for the Services
performed.
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The
compensation described in this Section 3.1 excludes any amounts payable
to
Consultant under the Retention Bonus Agreement.
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The
Company shall reimburse Consultant for all reasonable and necessary business
and
travel expenses actually incurred by Consultant in performing the services,
subject to receipt of a written request for reimbursement. Expenses
include but are not limited to travel, lodging, meals, copying, printing,
telecommunications, and IT costs. Company may request appropriate
supporting documentation which Consultant will provide, at Company’s expense,
within 7 business days per month of documentation
requested. Consultant may request prepayment of expected expenses
reimbursement not more frequently than once every two (2) weeks during
the term
of this Agreement, and the Company shall pay Consultant within 5 business
days
following receipt of such request. Consultant shall adjust each
request for prepayment of expected expenses by the difference between the
previous periods expected expenses and the expenses actually
incurred. Consultant’s final invoice will, when paid, result in total
expense reimbursements from Company equaling actual expenses
incurred.
All
fees
payable to Consultant under this Agreement shall be made in full, and without
any withholding, deduction, or offset of any state or federal withholding
taxes,
FICA, SDI, or income taxes, nor shall the Company be obligated to pay any
of
Consultant's employees' taxes. Consultant hereby covenants and agrees
that it shall be solely responsible for all taxes, withholding, FICA, SDI,
and
other similar items (both employee and employer portions) with respect
to all
fees paid by the Company under this Agreement, and agrees to indemnify
and hold
the Company harmless with respect to such taxes and
withholding. Neither Consultant nor Principal shall be eligible for,
shall participate in, or shall be entitled to compensation in lieu of any
insurance, benefit, retirement, or other plan or program provided by the
Company
to its employees.
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Confidentiality
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As
used
in this Agreement, the following words, terms, and phrases shall have the
meanings set forth below:
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(a)
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"Confidential
Information" shall mean and include any and all Information (as
defined in
this Agreement) of the following types: (i) business or financial
information, financial statements, projections, business plans,
or
strategic or marketing plans, market studies, or analyses; (ii)
cost and
expense information, pricing and discount information, gross
or net profit
margins, or analyses; (iii) technical data, specifications, computer
software (including both source code and object code or "executable"
software), databases, and database designs; (iv) processes, transactions,
and transaction procedures; (v) production data, shop drawings,
engineering studies or reports, feasibility studies or manufacturing
studies, parts lists, product specifications, identity of suppliers
or
terms of supply agreements or arrangements, production procedures,
trade
secrets, or secret or proprietary processes and formulae; (vi)
marketing
and customer data (including, but not limited to, identity or
demographic
analyses of customers), focus group reports, "shopping" reports,
and
marketing or advertising studies; (vii) terms, conditions, provisions,
or
obligations of any contracts or agreements to which the Company
is a party
or to which any of its assets are subject, or the identity of
any Person
who is a party to any contract or agreement with the Company;
(viii)
procedural or operational manuals, employee manuals, training
manuals, or
programs; (ix) site selections or review reports, site selection
criteria,
demographic analyses of or regarding any locations of retail
outlets of
the Company, the terms of any lease for any such retail outlet,
or any
summary thereof; (x) the identity of any employee of the Company,
and the
compensation, benefits, or terms of employment of any such employee;
and
(xi) such other information of or regarding the Company that
the Company
actually maintains as confidential or proprietary; provided,
however, that
such information shall be deemed confidential only to the extent
that it
(a) has not been previously disclosed to the public, or (b) is
not
ascertainable from public or published information or trade sources,
or
(c) is not subsequently publicly disclosed (other than by a violation
of
this Agreement). Any Information that is marked or otherwise
identified as "Confidential Information" at the time of Disclosure
shall
be presumed to be Confidential Information for the purposes of
this
Agreement.
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(b)
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"Information"
shall mean and include any data or information Disclosed (as
defined in this Agreement) in the form of (i) any written information,
reports, documents, books, notebooks, memoranda, charts, or graphs;
(ii)
computer tapes, disks, CD-ROM, files, or other mechanical or
electronic
media; (iii) oral statements, representations, or presentations;
(iv)
audio, visual, or audio-visual materials or presentations, including
audiotapes, videocassettes, laser discs, or CDs; and (v) any
other
documentary, written, magnetic, or other permanent or semi-permanent
form.
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(c)
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"Disclose"
or "Disclosure" shall mean and include any delivery, transmittal,
presentation, or representation of Information, by any Person
to any other
Person.
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(d)
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"Person"
shall mean and include any individual or natural person, corporation,
trust, proprietorship, partnership, limited partnership, joint
venture,
limited liability company, limited liability partnership, or
any other
entity.
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In
connection with the performance of the Services by Consultant, the Company
agrees to promptly and fully Disclose to Consultant any Information of
or
regarding the Company, its business, or operations, including Confidential
Information, as Consultant may reasonably request.
Consultant
agrees to retain and maintain in strict
confidence, and to require its representatives, agents, employees, officers,
directors, shareholders, partners, principals, successors, assignees, members,
affiliates, consultants, or professional representatives and advisors to
retain
in confidence any and all Confidential Information of the
Company. Consultant agrees that, without the prior express written
consent of the Company, Consultant shall not,: (i) Disclose any such
Confidential Information to any other Person; (ii) use any such Confidential
Information for the benefit of any Person other than the Company; or (iii)
permit any Confidential Information to be Disclosed to or used by any Person
other than the Company.
Consultant
expressly agrees and acknowledges that the obligation of Consultant pursuant
to
Section 4.3 of this Agreement shall continue, notwithstanding the expiration
of
this Agreement, the completion of the Services, and/or any termination
of this
Agreement by either Consultant or the Company, so long as Consultant, has
any
knowledge, possession, or control of, or access to, any Confidential Information
of the Company. Upon the completion of the Services, or any other
termination or expiration of this Agreement, for any reason, Consultant
shall,
if required to do so by the Company, promptly return to the Company (without
retaining copies, in any medium) any and all Confidential Information of
the
Company in the possession or control of Consultant.
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Indemnification.
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General
Agreement for Indemnification.
The
Company hereby agrees to indemnify, defend and hold Consultant harmless
from and
against all claims, liabilities, losses, damages and expenses as they are
incurred, including legal fees and disbursements of counsel and the costs
of
Consultant’s professional time, relating to or arising out of any transaction or
matter which is related to the subject matter of this Agreement, including
any
legal proceeding in which Consultant may be required or agree to participate
but
in which it is not a party. THIS INDEMNITY SHALL APPLY TO
MATTERS THAT ARISE OUT OF THE NEGLIGENCE, STRICT LIABILITY OR OTHER GUILT
OR
RESPONSIBILITY BY SUCH CONSULTANT OR CONSULTANT’S EMPLOYEE; PROVIDED, HOWEVER,
THAT THIS INDEMNITY SHALL NOT APPLY TO MATTERS ARISING OUT OF THE GROSS
NEGLIGENCE, WILLFUL MISCONDUCT, OR BREACH OF THIS AGREEMENT BY SUCH CONSULTANT
OR CONSULTANT’S EMPLOYEE.
Consultant
agrees to notify the Company of the commencement of any action for which
indemnification is sought hereunder, but the failure so to notify the Company
will not relieve the Company from liability hereunder unless and to the
extent
such failure prejudices the Company or results in the forfeiture by the
Company
of any rights and/or defenses. The Company shall, upon notice to
Consultant, be entitled to assume the defense of any action for which
indemnification is sought hereunder with counsel of the Company’s own choice at
the Company’s expense (in which case the Company shall not thereafter be
responsible for the fees and expenses of any separate counsel retained
by
Consultant except as set forth below), provided, however, that such counsel
shall be satisfactory to Consultant. The Company shall continue to be
responsible for any reasonable costs incurred by Consultant for investigation
requested by the Company or for providing evidence as a witness in such
proceeding. Notwithstanding the Company’s election to assume the
defense of such action, Consultant shall have the right to employ separate
counsel and to participate in the defense of such action, and the Company
shall
bear the reasonable fees, costs and expenses of such separate counsel if
(i) the
use of counsel chosen by the Company to represent Consultant would present
such
counsel with a conflict of interest, or such counsel fails to make a
determination that it has no conflict of interest with respect to its
representation of Consultant; (ii) the actual or potential defendants in,
or
targets of, any such action include both the Company and Consultant, and
Consultant shall have reasonably concluded that there may be legal defenses
available to Consultant which are different from or additional to those
available to the Company (in which case the Company shall not have the
right to
assume the defense of such action on Consultant’s behalf); (iii) the Company
shall not have employed counsel satisfactory to Consultant to represent
Consultant within a reasonable time after notice of the institution of
such
action; or (iv) the Company shall authorize Consultant to employ separate
counsel at the Company’s expense. The Company shall not settle any
proceeding without the consent of Consultant, unless such settlement includes
a
provision releasing Consultant from all liability in respect to the claims
against Consultant.
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Survival
and Succession.
The
Company’s obligation to indemnify Consultant as provided in paragraph 5.1 shall
survive the termination of this Agreement. Further, this Agreement,
in its entirety, shall inure to the benefit of and be binding on the successors
and assigns of the Company and Consultant, and the indemnity agreement
set forth
in Paragraph 5.1 hereof shall extend to and inure to the benefit of any
affiliates, stockholders and employees of Consultant and any successors,
assigns, heirs and personal representatives of any such person or
entity.
Any
notices to be given under this Agreement shall be in writing, sent by registered
or certified mail, postage prepaid, return receipt requested,, addressed
to such
party as follows:
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(a)
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Notices
to the Company:
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Ignis
Petroleum Group, Inc
One
Legacy Town Center
0000
Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxx,
Xxxxx 00000
Attn.:
Xxxxxxx Xxxxxx, President and CEO
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Notices
to Consultant:
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Lifestyles
Integration, Inc.
0000
Xxxxxxx Xx.
Xxxxxx,
Xxxxx 00000
Attn.:
Xxxx Xxxxxx
Notices
sent in accordance with this Section shall be deemed effective on the date
of
dispatch. Any changes in the information set forth in this Section
shall be upon notice to the other party delivered in the manner set forth
above.
This
Agreement, as supplemented by the Retention Bonus Agreement, constitutes
the
entire understanding between the parties, and supersedes all prior agreements
and negotiations, whether oral or written. There are no other agreements
between
the parties, except as set forth in this Agreement and the Retention Bonus
Agreement. No supplement, modification, waiver, or termination of
this Agreement shall be binding unless in writing and executed by all parties
to
this Agreement.
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Neither
this Agreement nor any rights, benefits, or obligations under it may be
assigned
by any party to this Agreement without the prior express written consent
of the
other party. Subject to the foregoing, this Agreement shall inure to
the benefit of and be binding upon all of the parties to this Agreement
and
their respective executors, administrators, successors, and permitted
assigns.
In
the
event any of the provisions of this Agreement are found by a court of competent
jurisdiction to be invalid, illegal, or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not be
affected.
The
headings of the Sections contained in this Agreement are for reference
purposes
only, and shall not affect the meaning or interpretation of this
Agreement. The parties have been advised by counsel in connection
with this Agreement. This Agreement shall be construed and
interpreted in accordance with the
plain meaning
of its language, and not for or against either party, and as a whole, giving
effect to all of the terms, conditions, and provisions of this
Agreement.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of Texas.
This
Agreement may be executed in two or more counterparts, which shall together
constitute one and the same agreement.
In
the
event that any party to this Agreement shall commence any suit or action
to interpret
or enforce this Agreement, the
prevailing party in such action shall recover that party's costs and expenses
incurred in connection with the suit or action, including attorney fees
and
costs of appeal, if any.
Limitation
of Liability
The
Company further agrees that if Consultant should be liable for loss or
damage of
any kind, including any claim of loss or damage arising out of the failure
of
Consultant to discharge Consultant’s duties under this Agreement, other than
that arising out of the willful misconduct or gross negligence by Consultant
or
Consultant’s employee, Consultant’s liability will be limited to a sum equal to
$20,000.00 and that the provisions of this paragraph will apply if loss
or
damage, irrespective of cause or origin, results directly or indirectly,
to
persons or property from the performance of obligations imposed by this
Agreement, or from negligence, active or otherwise, of Consultant, its
agents
and employees. The Company must provide Consultant written notice of any
claim
of loss or damage, irrespective of cause or origin, including any claim
of loss
or damage arising out of the failure of Consultant to discharge Consultant’s
duties under this Agreement, within Four weeks of the act or omission of
Consultant that the Company contends was the cause of any such loss or
damage. Any such claim for loss or damage on the part of the Company
against Consultant for which timely written notice is not provided as required
by this paragraph is expressly waived by the Company.
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COMPANY
By:
Xxxxxxx X. Xxxxxx
/s/
Xxxxxxx X. Xxxxxx
Its:
President and CEO
CONSULTANT
/s/
Xxxx
X. Xxxxxx
Xxxx
X.
Xxxxxx
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