Exhibit 10(23)
MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT is made as of December 12, 1995 by
and between FOUNTAIN OIL SERVICES INCORPORATED, a corporation incorporated and
existing under the laws of Bermuda (the "Company"), and XXXXX XXXXXX, an
individual residing in CANADA ("Contractor").
PRELIMINARY STATEMENTS
A. The Company is engaged in the exploration, development, recovery,
production, marketing and sale of oil and gas (the "Business") throughout the
world.
B. Contractor has substantial experience in the Business, and is
available to render general and specific services of a technical, administrative
and/or advisory nature with respect to the Business, and is prepared to provide
such services as and when needed by the Company.
C. The Company desires to obtain the services of Contractor, and
Contractor desires to provide certain services to the Company in the Territory
(as herein defined).
D. The Contractor satisfactorily passes a physical examination acceptable
to the Company with such physical being paid for by the Company.
AGREEMENT
NOW, THEREFORE, in consideration of the agreements contained herein and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. In this Agreement and the Schedules hereto, except where the
context otherwise requires, the words and expressions set forth below shall have
the following meanings:
"Agreement" means this Management Services Agreement, as the same may be
amended, modified or extended from time to time.
"Appointment" means the appointment of the Contractor by the Company pursuant to
this Agreement.
"Business" has the meaning set forth in Recitation A.
"Event of Default" has the meaning set forth in Section 12.
"Inventions" means all inventions, improvements, modifications, processes,
formulae, know-how, designs, models, prototypes, computer programmes, sketches,
drawings, plans or other original matters (whether or not capable of protection
by patent, registered design, copyright, registered trade xxxx or
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other rights in the nature of intellectual property) which the Contractor alone
or with one or more others may make, or discover in the course of the
Appointment and which pertain to the commercial or industrial activities of the
Company or the processes or machinery of the Company for providing the services
or producing or extracting the products of the Company or pertaining to or
resulting from or suggested by any work which the Contractor has done or may
hereafter perform during the Appointment for the Company.
"Manager" means the individual or entity designated from time to time by the
Company as the individual or entity with the responsibility of supervising
Contractor.
"Term" has the meaning set forth in Section 3.
"Territory" means that geographic area located in UKRAINE
2. APPOINTMENT. For and during the Term, and subject to the terms and
conditions hereinafter set forth, Contractor hereby agrees to serve as General
Director of Kashtan Petroleum Ltd.
3. TERM. The term of this Agreement (the "Term") shall commence upon the
execution of this Agreement by each of Contractor and the Company and shall
terminate upon the earliest to occur of (i) three (3) years from the date
hereof, (ii) the mutual agreement of the parties hereto to terminate this
Agreement, (iii) six months notice from either party, (iv) the liquidation or
dissolution of the Company, or (v) the occurrence of an Event of Default.
4. DUTIES. During the Term, the Contractor will:
(a) perform to the best of his/her ability all the duties for KASHTAN
PETROLEUM LTD., including, without limitation, those duties specified in
Schedule 1 and such other functions (being not inconsistent with his
position as GENERAL DIRECTOR) as the Manager may require and, whenever
required so to do, promptly give an account to the Manager or a person duly
authorised by the Manager of all matters with which he is entrusted;
(b) comply promptly with all lawful directions and instructions given by
or with the authority of the Manager;
(c) whenever so required for the proper fulfilment of his duties, work
without further remuneration in excess of the normal hours of work of the
Company, and
(d) attend and work at any premises of the Company wheresoever situated,
and travel and work in the Territory and such other locations as may be
required for the proper fulfilment of his duties.
5. PRESENCE IN THE TERRITORY; VACATION.
(a) Contractor's services shall be rendered principally in Territory. In
furtherance of such services, Contractor shall be located in the Territory
for at least 12 days during, on average, each calendar month.
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(b) During each year of the Appointment, Contractor will be entitled to
reasonable vacations, holidays, and time off when ill, at full pay.
Vacations shall be at such time or times and for such periods, up to an
aggregate of 4 weeks in any such year, as selected by Contractor and
approved by the Manager.
6. REMUNERATION. The Company shall pay to the Contractor for the Appointment:
(a) a salary, in United States dollars, at the rate of $ 150,000 per
annum to accrue from day to day and be payable by equal monthly instalments
in arrears on or before the last day of each calendar month. Part of the
remuneration may be paid in the Territory as requested from the Contractor
with the amount paid deducted from the total monthly payment made to the
Contractor.
(b) The Company shall pay the Contractor the salary provided for in
Section 6(a), such payments to be made at the Company's local office at
Xxxxxx Xxxxx, 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, XX00, Xxxxxxx.
7. COMPANY TAX POLICY.
7.1 COMPLIANCE WITH TAX LAWS. The Company will use its best efforts to
comply with all laws, rules and regulations (collectively, "Laws")
pertaining to the reporting of the compensation attributable to
Contractor's Appointment in the Territory ("Project Income") and amounts of
money constituting reimbursement of expenses incurred as a result of
Contractor's Appointment in the Territory ("Project Reimbursements") and to
the withholding and remitting of any taxes including, without limitation,
taxes levied by any country, state, municipality, commune or other
governmental authority (collectively, a "Tax" or "Taxes") on Project Income
or Project Reimbursements. The maximum tax shall be mutually agreed
between the parties prior to the signature of the contract and will remain
unchanged for the contract period.
7.2 MAINTENANCE OF CASH FLOW. Should any withholding be determined to be
required with respect to Project Income in the Territory over that which
would have been required to be withheld by Contractor if Contractor had
continued to work in the country of his/her citizenship, as designated in
writing to the Company (the "Contractor's Domicile"), the Company will
increase the amount of, and the monthly payment of, Project Income to the
extent required in order for Contractor's net (after withholding) take-home
pay to not be reduced during the Appointment as a result of such additional
withholding in the Territory. To the extent the Contractor is refunded tax
following increased monthly payment as described above, this tax is to be
repaid to the Company.
7.3 TAX FILINGS. The Company will provide a summary of taxes withheld to
Contractor for use in filing the Contractor's annual tax return. The
filing of the annual tax return is the responsibility of the Contractor as
well as compliance with the tax law both in the territory and in the Base
Domicile Country.
8. EXPENSES. The Company shall reimburse to the Contractor (against receipts
or other appropriate evidence) all reasonable, ordinary and necessary
travelling, entertainment and other out-of-pocket expenses properly incurred in
the course of the Appointment.
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9. COVENANTS AGAINST COMPETITION; CONFIDENTIALITY.
10.1 NON-COMPETITION. During the Term and for a period of three (3) years
following the date of termination of this Agreement, Contractor shall not:
(a) directly or indirectly divert or attempt to divert from the Company
any Business or any related business in which the Company has been actively
engaged during the Term, nor interfere with the relationships of the
Company with its clients or customers;
(b) directly or indirectly own, manage, operate, control, be employed by,
participate in, or be connected in any manner with the ownership,
management, operation or control of, any business or enterprise engaged in
the Business or any related business in which the Company has been actively
engaged during the Term within the Territory or any other geographic area
where the Company does business;
(c) solicit any clients or customers of the Company for any purpose other
than the transacting of business with the Company;
(d) directly or indirectly induce any employee of the Company to terminate
his/her employment, hire any employee of the Company, or in any way
interfere with the relationship of the Company and any employee, agent or
representative; or
(e) at any time during or after the end of the Appointment use the name
Fountain or UK-RAN or any name likely to cause confusion therewith in the
minds of members of the public for the purposes of a business similar to or
competing with any business carried on by the Company whether by using such
name as part of a corporate name or otherwise.
10.2 CONFIDENTIAL INFORMATION. During the Term of this Agreement and at
all times thereafter, Contractor shall hold in strict confidence, and shall
not disclose to any person or entity (other than partners, officers,
directors and designated employees of the Company), any confidential
information of the Company. For purposes of this Section 10.2, the term
"confidential information" shall include, without limitation, trade
information relating to the Company's research, development, engineering
data, seismic data, surveys, specifications, processes, formulations,
production operations or techniques, planning, purchasing, accounting,
finance, selling, marketing, market research, promotional plans, customers,
suppliers, and other information of a similar nature, which may include
designs, specifications and know-how, in which the Company or its suppliers
or distributors have proprietary interests, and all other information
pertaining to the business of the Company that is not publicly available.
Contractor shall not use such confidential information except for the sole
benefit of the Company.
10.3 PROPERTY OF THE COMPANY. Promptly upon the termination of this
Agreement, Contractor shall surrender to the Company all written materials
(and all copies thereof), and all information stored in computer memories
or on microfiche, magnetic tape or diskette, that are at the time in his
possession or control and that pertain to the business or affairs of the
Company.
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10.4 NOTICE TO THIRD PARTIES. After discussing the matter with
Contractor, the Company shall have the right, subject to applicable law, to
inform any other third party which is participating with Contractor or
receiving from the Contractor information or assistance in violation of
this Agreement, of the terms of this Agreement and of the rights of the
Company hereunder, and that participation by any such person with
Contractor in activities in violation of this Section 10 may give rise to
claims by the Company against such person.
10.5 ENFORCEMENT. In the event of a threatened or actual breach of this
Section 10 by Contractor, it is agreed and acknowledged that damages would
not be an adequate remedy to compensate the Company for the loss of
goodwill and other harm to the business of the Company, and, in such event,
to the extent allowed by applicable law, the Company shall be entitled to a
temporary restraining order, and to temporary and permanent injunctive
relief, to prevent or terminate such anticipated or actual breach
(provided, however, that nothing in this Agreement shall be construed to
limit the damages otherwise recoverable by the Company in any such event).
11. INVENTIONS.
(a) The Contractor will disclose and deliver to the Company for the
exclusive use and benefit of the Company any Inventions promptly upon the
making, devising or discovering of the same, and will give all information
and data in his possession as to the exact mode of working, producing and
using the same and also all such explanations and instructions to the
Company as may in the view of the Manager be necessary to enable the full
and effectual working, production or use of the same and will at the
expense of the Company furnish it with all necessary plans, drawings,
formulae and models.
(b) The Contractor will without charge to but at the expense of the
Company execute and do all acts, matters, documents and things necessary to
enable the Company or its nominee to apply for and obtain protection for
the Inventions in any or all countries and to vest title thereto in the
Company or its nominee absolutely.
(c) During the Appointment and at all times thereafter the Contractor
will (whether by omission or commission) do nothing to affect or imperil
the validity of the protection for the Inventions obtained or applied for
by the Company or its nominee pursuant to Section 11(b). The Contractor
will at the direction and expense of the Company render all assistance
within his/her power to obtain and maintain such protection or application
or any extension thereof.
(d) Nothing in this Agreement shall oblige the Company to seek patent or
other protection for any Invention nor to exploit any Invention.
12. TERMINATION FOR BREACH.
Notwithstanding the provisions of Section 3, the Company may terminate the
Appointment by notice with immediate effect for any of the following
reasons (each an "Event of Default"),
(a) in the Company's reasonable opinion the Contractor fails to adequately
perform duties assigned to him, or
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(b) the Contractor is guilty of dishonesty or of misconduct or
incompetence or wilful neglect of duty or commits any breach of this
Agreement other than a breach which is capable of remedy and is remedied
forthwith by the Contractor at the Company's request; or
(c) the Contractor is convicted of an indictable criminal offense; or
(d) the Contractor becomes bankrupt, declares himself insolvent, applies
for, or has made against him, a receiving order, makes any composition with
his creditors or commits an act of bankruptcy (as defined under any law
with jurisdiction over the Contractor); or
(e) the Contractor is incapacitated for twenty (20) consecutive weeks or
for an aggregate of thirty (30) weeks in any fifty-two (52) consecutive
weeks from performing the duties of the Appointment; or
(f) the Contractor becomes of unsound mind or becomes a patient or is
otherwise admitted to a hospital in connection with any mental health laws
with jurisdiction over the Contractor.
13. DISCIPLINARY RULES, GRIEVANCE PROCEDURES AND HEALTH AND SAFETY. A copy of
the disciplinary rules and grievance procedures applying to the Contractor, and
of a document setting out the Company's policy on health and safety at work, has
been handed to Contractor on the signing hereof (and he hereby acknowledges
receipt thereof). A copy of the disciplinary rules and grievance procedures
applying to the Contractor and the document setting out the Company's policy on
health and safety at work may be examined by the Contractor during normal
working hours in the office of the Corporate Secretary of the Company.
14. POST-TERMINATION PROVISIONS. Any provision of this Agreement which
contemplates or is capable of operation after the termination of the Appointment
shall apply notwithstanding termination of the Appointment for whatever reason.
15. RELATIONSHIP OF PARTIES. The parties agree that Contractor is an
independent contractor. Nothing contained herein shall be deemed or construed
as creating a joint venture, franchise, partnership, agency, employment or
similar relationship between Contractor and the Company. Both parties agree
that, except as specifically provided herein, Contractor may not undertake any
obligation on behalf of the Company and may not legally bind the Company in any
manner.
16. CONTRACTOR'S RIGHT TO CONTRACT. Contractor represents and warrants to the
Company (i) that this Agreement constitutes his valid and binding obligation,
enforceable against him in accordance with its terms; (ii) that neither the
execution or delivery of this Agreement nor the performance by him of any of his
covenants hereunder will constitute a default under any contract, agreement or
obligation to which he is a party or by which he or any of his properties is
bound; (iii) that there are no lawsuits, arbitration actions or other
proceedings (equitable, legal, administrative or otherwise) pending or (to the
best of his knowledge) threatened which could adversely affect the validity or
enforceability of this Agreement or his obligation or ability to perform his
obligations hereunder; and (iv) that no consent, approval or authorization of,
or notification to, any governmental entity or any person or entity is required
in connection with the execution, delivery or performance of this Agreement by
him.
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17. NOTICE. Any notices or other communications required or permitted to be
given hereunder or otherwise in connection herewith shall be in writing and
shall be sent to the parties at the following addresses or at such other
addresses as shall be specified by the parties by like notice:
To the Company: Fountain Oil Incorporated
x/x Xxxxx Xxx
Xxxxxxxxxxxx 00,
0000 Xxxxx, Xxxxxx
Telephone: x00 00 00 00 00
Facsimile: x00 00 00 00 00
With a copy to: Akin, Gump, Strauss, Hauer, Xxxx & Dassesse
c/o Xxxxxxx X. Xxxxxxxxx
Avenue Xxxxxx 65, bte. 7
0000 Xxxxxxxx, Xxxxxxx
Telephone: (000) 000 0000
Facsimile: (000) 000 0000
To Contractor: Xxxxx Xxxxxx
Suite 1500 000 - 0xx Xxxxxx
X.X. Xxxxxxx, Xxxxxxx X0X0X0, Xxxxxx
Telephone: x0 000 000 0000
Facsimile: x0 000 000 0000
With a copy to:
XxXxxxx Thomson
x/x Xxxxxx Xxxxxxx
Xxxxx 0000 - 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Telephone: x0 000 000 0000
Facsimile: x0 000 000 0000
Such notices or other communications shall be deemed to have been duly given and
received (i) on the day of sending if sent by personal delivery, cable,
telegram, facsimile transmission or telex, (ii) on the third calendar day after
the day of sending if sent by Federal Express or other express delivery service
or (iii) on the fifth calendar day after the day of sending if sent by
registered or certified mail (return receipt requested).
18. AMENDMENTS. Any amendment to the provisions of this Agreement shall be in
writing and signed by the parties hereto or their duly authorised
representatives.
19. SEVERABILITY. Each provision hereof is severable from this Agreement, and
if one or more provisions hereof are declared invalid the remaining provisions
shall nevertheless remain in full force and effect. If any provision of this
Agreement is so broad, in scope or duration or otherwise as to be unenforceable,
such provision shall be interpreted to be only so broad as is enforceable.
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20. NO WAIVER. The failure to enforce at any time any of the provisions of
this Agreement or to require at any time performance by the other Party of any
of the provisions hereof shall in no way be construed to be a waiver of such
provisions or to affect the validity of this Agreement, or any part thereof, or
the right of either Party thereafter to enforce each and every such provision in
accordance with the terms of this Agreement.
21. ENTIRE AGREEMENT. This Agreement contains the entire agreement between the
parties with respect to the appointment of Contractor by the Company and
supersedes any and all prior understandings, agreements or correspondence
between the parties.
22. GOVERNING LAW. This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of New York.
23. ARBITRATION. Any dispute, controversy or claim arising out of or relating
to this Agreement, or the breach, termination or invalidity thereof, which
cannot be settled in an amicable way shall be settled by arbitration in
accordance with the UNCITRAL Rules as at present in force. The place of
arbitration shall be Oslo, Norway. The appointing authority shall be the
Chamber of Commerce in Oslo. Judgment upon the award rendered by the
arbitrators, or at least a majority of them, may be entered in any court having
jurisdiction thereof. The arbitrator(s) shall be selected pursuant to said
rules, with a preference for use of three arbitrators selected under said rules.
All arbitral proceedings shall be in English. Each Party hereto shall bear its
own costs of such arbitration or litigation, including reasonable attorneys'
fees.
24. ASSIGNMENT. Neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof may be assigned or delegated by
Contractor without the prior written consent of the Company.
25. INTERPRETATION. All references to sections, schedules and exhibits are to
sections, schedules and exhibits in or to this Agreement unless otherwise
specified. The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Where the context permits,
the singular includes the plural and vice versa and one gender includes any
gender. Words importing individuals shall be treated as importing corporations
and vice versa and words importing whole shall be treated as including a
reference to any part thereof.
26. MONETARY TERMS. All amounts expressed in dollars or "$" in this Agreement
shall mean dollars of the United States of America.
27. COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same instrument.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, this Agreement is executed effective as of the date first
set forth above.
COMPANY:
FOUNTAIN OIL SERVICES INCORPORATED
By: /s/Xxxx X. Trulsvik
Name: Xxxx X. Trulsvik
Title: Executive Vice President
CONTRACTOR:
By : /s/Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
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SCHEDULE 1
SPECIFIC DUTIES
Subject to the decisions, directions and guidelines given by the Board and/or
the Manager, the General Director has the responsibility for the overall
performance of Kashtan Petroleum Ltd. in carrying out its operations in a
profitable and environmental friendly manner. This overall responsibility
includes but is not limited to:
* Preparation of all documents for Board consideration, hereunder;
** Proposals related to Kashtan Petroleum Ltd.'s strategy, operational
plans, new business opportunities and annual budgets.
** Implement appropriate accounting standards and provide regular
progress report as required by the Board and/or the Manager
** Propose annual accounts and annual reports
** Prepare documents on other issues of major importance for Kashtan
Petroleum Ltd. or other issues as requested by the Board or the
Manager.
* Properly execute the decisions made by the Board and promptly comply with
all lawful directions and instructions given by the Manager, hereunder;
** Execution of plans and budgets approved by the Board in compliance
with the Administrative Procedures approved by the Board and/or the
Manager.
* Assuming the overall responsibility for the daily operation of Kashtan
Petroleum Ltd., hereunder;
** Daily supervision of the operational activities of Kashtan Petroleum
Ltd., and making sure that these activities are carried out in
accordance with decisions, guidelines or instructions given by the
Board and/or the Manager, applicable law, general industry practices
and international environmental standards
** Preparation of regular reports as requested by the Board and/or the
Manager and the authorities.
** Recruiting to and development of an appropriate operating organisation
in line with development plans approved by the Board
** Represent Kashtan Petroleum Ltd. towards 3rd. parties and the
authorities
** Other responsibilities as may be delegated to the General Director
from the Board and/or the Manager from time to time.
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