CONSULTANT
ENGAGEMENT AGREEMENT
This Agreement supercedes and replaces the Corporate Advisor Engagement
Agreement, (except as to those shares of Sun River Energy, Inc. previously
issued to Consultant), made the 7th day of May, 2009, by and between Sun River
Energy, Inc. (the "Company"), located at 0000 Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxx
00000 and Energy West Corporation (the "Consultant"), located at 0000 Xxxx
Xxxxxx, Xxxxxx, Xxxxxxxx 00000.
Sun River Energy, Inc. hereby engages Energy West Corporation, as
Consultant, under the following terms and conditions, to be effective as of
October 15, 2009.
WHEREAS, the Company desires professional guidance and advice regarding
Energy Exploration and Development and desires Consultant to aid it in business
matters; and
WHEREAS, Xxxxx X. Xxxxxxxx ("Xxxxxxxx") is employed by Consultant
and has expertise in the area of energy exploration and project development
and implementation;
WHEREAS, Consultant is willing to provide the services of Xxxxxxxx to
act as a part-time advisor and consultant to the Company upon the terms and
conditions set forth in this Agreement. Unless specified otherwise, Xxxxx X.
Xxxxxxxx and Energy West Corporation shall together herein be referred to as
Consultant;
WHEREAS, Consultant is to be hereby engaged to provide the services of
Xxxxxxxx to act as Vice President of Land of Sun River Energy, Inc. on a
part-time basis.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises herein contained, the parties hereto agree as follows:
1. Duties, Scope of Agreement, and Relationship of the Parties
(a) The Company hereby agrees to retain Consultant to provide the
services of Xxxxxxxx as Vice President of Land, consistent with Consultant's
expertise and ability in energy exploration and development, and Consultant
agrees to so act for the Company during the term of this Agreement under the Job
Description attached as Exhibit "B". All parties understand that Consultant and
Xxxxxxxx has many other business interests and will devote as much time as in
his discretion as necessary to perform his duties under this Agreement. In
addition, the Company hereby agrees that Consultant's and Xxxxxxxx'x efforts and
all forms of beneficial interest related to, or otherwise connected to,
Consultant's other business interests are the sole and separate property of
Consultant.
(b) The services rendered by consultant to the company pursuant to this
Agreement shall be as an independent contractor at times and dates convenient to
Consultant and Xxxxxxxx, and this Agreement does not make Consultant or Xxxxxxxx
the employee of the Company for any purpose whatsoever. No right or authority is
granted to Consultant or Xxxxxxxx to assume or to create any obligation or
responsibility, in excess of $2,500.00, express or implied, on behalf of or in
the name of the Company, expect as authorized by Resolution of the Board of
Directors or other management personnel designated by the Company. The Company
shall not withhold for Consultant any federal or state taxes from the amounts to
be paid to consultant hereunder, and Consultant agrees that he will pay all
taxes due on such amounts.
(c) Consultant agrees to make Xxxxxxxx available to Company as Vice
President of Land on a part-time as needed basis upon reasonable request by the
Company. Xxxxxxxx shall provide planning and other advisory services as are
necessary to carryout the business of the Company.
2. Compensation
(a) The Company will pay Consultant a day rate of $600.00 per day for
consulting work performed on Sun River Projects, as directed by the President or
Board. Such day rate shall be billed per each calendar month and paid by Company
on the 15th day of the following month.
(b) In addition to the day rate (a) Company shall deliver to
Consultant the Stock Compensation is detailed in Exhibit "A".
(c) Other forms of compensation may occur depending on the nature of a
specific engagement and only upon the mutual agreement of both parties.
3. Expenses
The Company shall reimburse Consultant for all pre-approved reasonable
and necessary expenses incurred by it in carrying out its duties under this
Agreement including travel. Consultant shall submit related receipts and
documentation with his request for reimbursement.
4. Renewal; Termination
(a) This Agreement shall continue in effect for 6 months and
thereafter, if not then terminated, shall be renewed annually until terminated
by the parties. Either the Company or the Consultant may terminate this
Agreement by giving the other party fifteen (15) days written notice. However,
termination of Consultant by the Company shall not relieve the Company of its
financial obligations to Consultant as defined herein.
(b) Subject to the continuing obligations of Consultant under Section 5
below, either party may terminate this Agreement at any time if the other party
shall fail to fulfill any material obligation under this Agreement and shall not
have cured the breach within ten (10) days after having received notice thereof.
(c) Termination or expiration of this Agreement shall not extinguish
any rights of compensation that shall accrue prior to the termination.
5. Confidential Information
(a) "Confidential Information," as used in this Section 5, means
information that is not generally known and that is proprietary to the Company
or that the Company is obligated to treat as proprietary. This information
includes, without limitation:
(i) Trade secret information about the Company and its
products;
(ii) Information concerning the Company's business as
the Company has conducted it since the Company's
incorporation or as it may conduct it in the future;
and
(iii) Information concerning any of the Company's past,
current, or possible future products, including
(without limitation) information about the Company's
research, development, engineering, purchasing,
manufacturing, accounting, marketing, selling, or
leasing efforts.
(b) Any information that Consultant reasonably considers Confidential
Information, or that the Company treats as Confidential Information, due to its
unique nature purchased or developed by the Company, not available in the public
domain or licensed or copyrighted information will be presumed to be
Confidential Information (whether Consultant or others originated it and
regardless of how obtained).
(c) Except as required in its duties to the Company, Consultant or
Xxxxxxxx will never, either during or after the term of this Agreement,
intentionally use or disclose such aforedescribed Confidential Information to
any person not authorized by the Company to receive it.
(d) If this Agreement is terminated, Consultant and Xxxxxxxx will
promptly turn over to the Company all records and any compositions, articles,
devices, apparatus and other items that disclose, describe, or embody
Confidential Information, including all copies, reproductions, and specimens of
the Confidential Information in its possession, regardless of who prepared them.
The rights of the Company set forth in this Section 5 are in addition to any
rights of the Company with respect to protection of trade secrets or
confidential information arising out of the common or statutory laws of the
State of Colorado or any other state or any country wherein Consultant may from
time to time perform services pursuant to this Agreement. This Section 5 shall
survive the termination or expiration of this Agreement.
6. False or Misleading Information
The Company warrants that it will provide Consultant with accurate
financial, corporate, and other data required by Consultant and necessary for
full disclosure of all facts relevant to any efforts required of Consultant
under this Agreement. Such information shall be furnished promptly upon request.
If the Company fails to provide such information, or if any information provided
by the Company to Consultant shall be false or misleading, or if the Company
omits or fails to provide or withholds relevant material information to
Consultant or to any professionals engaged pursuant to paragraph 5(d) above,
then, in such event, any and all fees paid hereunder will be retained by
Consultant as liquidated damages and this Agreement shall be null and void and
Consultant shall have no further obligation hereunder. Further, by execution of
this Agreement, the Company hereby indemnifies Consultant and Xxxxxxxx from any
and all costs for expenses or damages incurred, and holds Consultant and
Xxxxxxxx harmless from any and all claims and/or actions that may arise out of
providing false or misleading information or by omitting relevant information in
connection with the efforts required of Consultant under this Agreement.
7. Consultant's Best efforts and No Warranty of Information
Consultant shall use its best efforts to use and provide reliable
information and business techniques associated with the oil and gas business.
However, Consultant makes no warranty as to the completeness or interpretation
of such information, nor does Consultant warrant such information with regard to
errors or omissions contained therein. Any reserve estimates, price
calculations, price forecasts, exploration potential predictions or similar
information provided by Consultant are, or may well be estimates only, and
should not be considered predictions of actual results. Mineral title opinions
shall not be Consultant's responsibility.
8. Miscellaneous
(a) Successors and Assigns. This Agreement is binding on and
ensures to the benefit of the - Company. Company cannot
assign this Agreement without Consultant's written
agreement.
(b) Modification. This Agreement may be modified or amended only
by a writing signed by both the - Company and Consultant.
(c) Governing Law. The laws of Colorado will govern the
validity, construction, and performance of this Agreement.
Any legal proceeding related to this Agreement will be
brought in an appropriate Colorado court, and both the
Company and Consultant hereby consent to the exclusive
jurisdiction of that court for this purpose.
(d) Construction. Wherever possible, each provision of this
Agreement will be interpreted so that it is valid under the
applicable law. If any provision of this Agreement is to any
extent invalid under the applicable law, that provision will
still be effective to the extent it remains valid. The
remainder of this Agreement also will continue to be valid,
and the entire Agreement will continue to be valid in other
jurisdictions.
(e) Waivers. No failure or delay by either the Company or
Consultant in exercising any right or remedy under this
Agreement will waive any provision of the Agreement, nor
will any single or partial exercise by either the Company or
Consultant of any right or remedy under this Agreement
preclude either of them from otherwise or further exercising
these rights or remedies, or any other rights or remedies
granted by any law or any related document.
(f) Captions. The headings in this Agreement are for convenience
only and do not affect this Agreement's interpretation.
(g) Entire Agreement. This Agreement supersedes all previous and
contemporaneous oral negotiations, commitments, writings,
and understandings between the parties concerning the
matters in this Agreement.
(h) Notices. All notices and other communications required or
permitted under this Agreement shall be in writing and sent
by registered first-class mail, postage prepaid, and shall
be effective five days after mailing to the addresses stated
below. These addresses may be changed at any time by like
notice.
In the case of the Company:
Sun River Energy, Inc.
Attention: Xxxxxx Xxxxx
c/o 0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Ph: 303-422-8127
Fx: 000-000-0000
Email:
In the case of Consultant:
Energy West Corporation
c/o Xxxxx X. Xxxxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Ph. 303-795-5858
Fx. 000-000-0000
E-mail: xxxxxxxxx@xxxxxxxxxxxxxx.xxx
(i) Indemnification. Company agrees to and shall defend,
indemnify and hold harmless both Consultant and Xxxxxxxx,
their affiliates, companies, partnerships, employees and
invitees, from and against all Losses which arise from or in
connection with Consultant's services and duties under this
Agreement. "Losses" shall mean any actual losses, costs,
expenses (including court costs, reasonable fees and
expenses of attorneys, expert witnesses and costs of
investigation), liabilities, damages, demands, suits,
claims, and sanctions of every kind and character (including
civil fines) arising from, related to or reasonably incident
to said services and duties, including injury to or death of
a person or damage to or loss of property, real or personal,
which may be asserted against Consultant as a direct or
indirect result of his provision of services and duties to
Company.
(j) Conflicts of Interest. Company acknowledges that Consultant
and Xxxxxxxx are engaged in the business of providing
petroleum consulting for other oil and gas companies within
the United State and Canada. In the event Consultant or
Xxxxxxxx are requested by Company to provide advice and
guidance on or about geographical areas that may create a
potential conflict of interest between Consultant's other
business matters and the Company's operations, Consultant or
Xxxxxxxx shall not be required by Company to render advice
and guidance on such an area. Company and Consultant and
Xxxxxxxx shall use their best efforts to notify each other
of any potential conflicts of interests. In any event,
Consultant's and Xxxxxxxx'x general knowledge that Company
plans to engage, or is actively engaging, in oil and gas
exploration within an area shall in no way preclude
Consultant, Xxxxxxxx or their business entities, from
performing land services or consulting for other oil and gas
companies within the same area.
(k) Mediation and Arbitration. All claims, demands, disputes and
controversies in connection with this Agreement that may
arise between the Parties as to this Agreement shall first
be submitted to a mutually agreed neutral third party for
mediation. If mediation is not successful then dispute shall
be settled by arbitration. Such arbitration shall be
governed by the commercial arbitration rules of American
Arbitration Association. All mediation and/or arbitration
shall take place in Denver, Colorado.
(The rest of the page left intentionally blank.)
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the October 21, 2009.
"The Company" "Consultant"
SUN RIVER ENERGY, INC. ENERGY WEST CORPORATION
By: By:
------------------- ----------------------------
Xxxxx X. Xxxxxxxx, President
Exhibit A
Term Sheet - Stock Grants
I. Stock Grants.
A. Future additional Grants shall occur as follows:
1. Vesting. Subject to continuation of engagement under this or
a subsequent agreement, (i) Company will grant 25,000 shares
at the end of 1st calander quarter of engagement hereunder
and, (ii) an additional 25,000 shares each calendar quarter
thereafter, contingent on the continuation of engagement for
at least 6 months of the term. Vesting will be accelerated
on a Change in Control, for that current quarter.
2. Consultant will enter into a six (6) month lock-up agreement
with Company, to be released upon reasonable written notice,
in discretion of Company; provided that any stock granted to
Consultant shall vest and be "free to trade" within six (6)
from the date said stock has been earned by Consultant.
3. Company shall provided Consultant with a stock certificate
of the above-described shares within thirty (30) days from
the date said shares are granted to Consultant.
4. In addition to the grants of stock and other remuneration
specified in this Agreement, Company shall also grant
Consultant options to purchase the Company's common stock as
follows:
a. Upon execution of this Agreement, Company shall grant
Consultant an option to purchase 50,000 shares of the
Company's common stock at the Fair Market Value ("FMV")
share price. The FMV of this option shall be equal to
the closing share price as of the effective date of
this Agreement.
b. Provided this Agreement remains in effect, Company
shall at the end of each of the next four (4)
successive calendar quarters grant Consultant an option
to purchase up to 20,000 shares at a FMV share price
equal to closing share price as of end date of each
such calendar quarter.
c. All such options shall be granted for a term of sixty
(60) months and shall be available to be exercised by
Consultant at any time during said term without any
trading restrictions.
d. All such options shall be granted on Fair Marker Value
basis and shall not be considered by Company as
"non-qualified" options.
II. Change in Control.
A. For purpose of the options, "Change in Control" means: (a) the consummation
of a merger or consolidation of the Company with or into another entity or
any other transaction, the stockholders of the Company immediately prior to
such merger, consolidation or other transaction own or beneficially own
immediately after such merger, consolidation or other transaction 50% or
more of the voting power of the outstanding securities of each of (i) the
continuing or surviving entity and (ii) any direct or indirect parent
entity of such continuing or surviving entity; (b) the sale, transfer or
other disposition of all or substantially all of the Company's assets to a
Person which is not owned or controlled by the Company or its stockholders
immediately prior to such sale, transfer or other disposition; (c)
individuals who, immediately following the effective date of this
Agreement, constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board; provided, however,
that any individual becoming a director thereafter whose election, or
nomination for election by the Company's shareholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board; or (d) any transaction as a result of which any Person is
the "Beneficial Owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing at least
20% of the total voting power represented by the Company's then outstanding
voting securities. For purposes of this definition of Change in Control,
the term "Persons" means, acting individually or as a group, an individual
or a corporation, limited liability company, partnership, joint venture,
trust, unincorporated organization, association, government agency or
political subdivision thereof or other entity.
Exhibit B
Job Description
A. Consultant will manage Sun River's land and lease right acquisition
programs.
B. In the event that additional personnel is required to perform land
operations, for instance the hiring of consultants for brokerage or other
land-related services, Consultant agrees to manage the activities of such
consultants. Consultant shall not hire additional personnel without the
approval of the Board of Sun River or other management personnel designated
by the Company.
C. The Consultant agrees to provide a quarterly report as to the services
provided and the projects that the Consultant has worked on, on the
Company's behalf.
