CONSULTING AGREEMENT
This
CONSULTING
AGREEMENT (this
“Agreement”) is dated as of the 26th day of October, 2006, by and between
PLATINUM ENERGY RESOURCES, INC., a Delaware corporation (“Platinum”),
and
Xxxxx Xxxxxx (“Xxxxxx”).
WHEREAS,
on
January 26, 2006, Platinum, Tandem Energy Holdings, Inc. (“Tandem”)
and
PER Acquisition Corp. (“PER”)
and
certain stockholders of Tandem, entered into an Agreement and Plan of Merger
(as
amended, the “Merger
Agreement”)
pursuant to which PER was to merge with and into Tandem; and
WHEREAS,
in
connection with the proposed merger, on January 26, 2006, Platinum entered
into
a letter agreement with Xxxxxx pursuant to which Platinum agreed to pay to
Xxxxxx a fee for his services in connection with the proposed merger as well
as
for future consulting services (the “Letter
Agreement”);
and
WHEREAS,
in
connection with the parties’ determination to restructure the proposed
transaction, on October 4, 2006, the Merger Agreement was terminated by the
parties and on October 4, 2006, Platinum, PER, Tandem Energy Corporation
(“TEC”)
and
certain stockholders of Tandem, entered into an Asset Acquisition Agreement
and
Plan of Reorganization (the “Acquisition
Agreement”)
pursuant to which PER will acquire substantially all of the assets and assume
substantially all of the liabilities of TEC (the “Acquisition”);
and
WHEREAS,
in
light of the restructured transaction, on October 26, 2006, the Letter Agreement
was terminated by the parties thereto and the parties acknowledged that,
notwithstanding the termination of the Letter Agreement, Platinum desires to
retain Xx. Xxxxxx’x services in connection with possible business transactions
and Xx. Xxxxxx desired to render such services;
NOW
THEREFORE,
in
consideration of the mutual promises, covenants and agreements herein contained,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
1. Consulting
Services.
Platinum hereby engages Xxxxxx to investigate and evaluate enterprises in the
energy industry, focusing on oil and gas, with a view to possible future
acquisition and, if warranted, to assist in the scheduling of meetings, site
inspections and due diligence investigations between the parties, as applicable
(the “Services”).
Xxxxxx shall perform the duties and responsibilities under this Agreement to
the
best of his abilities in a diligent, trustworthy, businesslike and efficient
manner, and shall report to Xxxx Xxxxxxxxx, Chairman, or Xxxxx Xxxxxxxx,
President of Platinum. Xxxxxx shall also investigate and evaluate such
enterprises as Messrs. Nordlicht or Kostiner or the board of directors of
Platinum may direct during the Term of this Agreement.
2. Term.
Subject
to the provisions of Sections 4, 7 and 8 hereof, which shall remain in effect,
the term of this Agreement (the “Term”)
shall
commence on the closing of the Acquisition (the “Commencement
Date”)
and
terminate on the eighteen month anniversary of the Commencement Date. In the
event that the Acquisition is not consummated, Platinum shall have no liability
to Xxxxxx of any of his affiliates hereunder.
3. Duties.
The
parties agree that Xxxxxx shall devote such portion of his working time,
attention and energy as the parties may from time to time agree upon, provided
that Xxxxxx shall make every effort to investigate and evaluate such enterprises
as Platinum may from time to time direct. Xxxxxx agrees not to engage in any
activities outside of the scope of this engagement that would detract from,
or
interfere with, the fulfillment of his responsibilities or duties under this
Agreement or otherwise clothe him with apparent authority to act on behalf
of
Platinum unless expressly directed. Xxxxxx agrees not to expressly or impliedly
represent himself as an officer, director, employee, agent or representative
of
the Company with the power or authority to negotiate on behalf of, or to
obligate or bind, the Company.
4. Compensation;
Limitations on Transfer.
4.1 For
performance of the Services hereunder, subject to the terms and conditions
hereof, Platinum shall pay to Xxxxxx 714,286 shares of Platinum common stock,
$.0001 par value per share (representing approximately $5 million at a per
share
price of $7 per share)(the “Shares”)
as
follows: (i) 178,573 on the Commencement
Date, and (ii) 178,571 on the six month, 12 month and 18 month anniversary
of
the Commencement Date. Xxxxxx shall not receive any other salary, bonus or
other
remuneration or benefits from Platinum during the Term of this Agreement other
than as specifically set forth in this Agreement and, in his capacity as a
stockholder of Platinum.
4.2 Xxxxxx
acknowledges that the Shares, when issued, shall constitute “restricted
securities” under the Federal securities laws inasmuch as they will be acquired
from Platinum in a transaction not involving a public offering and that, under
such laws and applicable regulations, such Shares may be resold only under
certain limited circumstances. In addition to, and not in limitation of the
restrictions imposed by applicable securities laws, from the Commencement Date
through the eighteen month anniversary of the Commencement Date, Xxxxxx agrees
that he shall not transfer any of the Shares regardless of the availability
of
an applicable exemption to registration and that, from and after the expiration
of the eighteen month period immediately following the Commencement Date through
the third anniversary of the Commencement Date, Xxxxxx agrees that he shall
be
entitled to transfer in the aggregate only up to ten percent of the Shares
per
calendar quarter.
5. Representations
and Warranties of Xxxxxx.
Xxxxxx
hereby represents and warrants to Platinum with respect to the acquisition
of
Shares as compensation hereunder as follows:
5.1 Xxxxxx
has been given access to such documents, records, and other information and
has
had adequate opportunity to ask questions of, and receive answers from,
Platinum’s officers and representatives concerning Platinum’s business,
operations, financial condition, assets, liabilities, and all other matters
relevant to his investment in the shares to be issued to him as compensation
hereunder. Xxxxxx acknowledges that he has received no representations or
warranties from Platinum or its officers or representatives in making this
investment decision other than as set forth in this Agreement.
5.2 Xxxxxx
understands that acquisition of Shares of Platinum common stock is a speculative
investment involving a high degree of risk. Xxxxxx is aware that there is no
guarantee that Xxxxxx will realize any gain from accepting the Shares as
compensation. Xxxxxx is acquiring the Shares for his own account (or for one
or
more separate accounts maintained by him), for investment and not with a view
to
the distribution thereof in violation of the Securities Act of 1933, as amended,
and any applicable securities laws of any state.
5.3 Xxxxxx
represents that he is an “accredited investor” as defined in Rule 501(a) of
Regulation D promulgated under the Securities Act of 1933, as amended. Xxxxxx
is
financially able to bear the economic risk of this decision to accept the shares
as compensation, including the ability to hold the Shares indefinitely or to
afford a complete loss of his investment in the Shares. Xxxxxx
has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the shares and
has the capacity to protect his own interests in connection with such
investment. Xxxxxx acknowledges and understands that Platinum has never paid
dividends on the Shares and does not anticipate paying dividends in the
foreseeable future.
5.4 Xxxxxx
acknowledges that the certificates for the securities comprising the Shares
that
Xxxxxx will receive will contain legends substantially as follows:
THE
SHARES THAT ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH
RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR PLATINUM ENERGY
RESOURCES, INC. (THE “COMPANY”) RECEIVES AN OPINION OF COUNSEL FOR THE COMPANY
THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE.
THE SHARES THAT ARE REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND
CONDITIONS OF AN AGREEMENT BETWEEN THE COMPANY AND XX. XXXXX XXXXXX, DATED
AS OF
OCTOBER 26, 2006.
Xxxxxx
acknowledges that the Shares must be held indefinitely unless subsequently
registered under the Securities Act of 1933, as amended, unless an exemption
from such registration is available. Xxxxxx is aware of the provisions of
Rule 144 promulgated under the Securities Act of 1933, as amended, that
permit limited resale of securities purchased in a private placement subject
to
the satisfaction of certain conditions. Xxxxxx expressly acknowledges and agrees
that Platinum is relying upon Xxxxxx’x representations contained in this
Agreement.
6. Termination.
6.1 Xxxxxx’x
consultancy hereunder shall terminate prior to the scheduled end of the Term
upon the mutual agreement of Platinum and Xxxxxx. Notwithstanding any
termination of Xxxxxx’x consultancy for any reason, Xxxxxx will continue to be
bound by the confidentiality provisions contained herein.
6.2 All
issuances of Shares to be made hereunder shall be conditioned upon Xxxxxx’x
compliance with his confidentiality obligations contained herein. Platinum
will
not be obligated to continue any such issuances to Xxxxxx in the event that
Xxxxxx breaches the terms of this Agreement.
7. Confidentiality.
7.1 Xxxxxx
covenants and agrees that he shall not
at
any time, during or after the Term, reveal, divulge, or make known to any person
or use for his own account any Platinum Confidential Information As used herein,
the term “Confidential Information” shall be deemed to include information
obtained by Xxxxxx that relates to the past, present, or future business
activities of Platinum or its affiliates including, without limitation,
information relating to prospects and financial condition.
7.2 Xxxxxx
acknowledges that (a) the Confidential Information was developed at great
expense and that the Confidential Information is critical to the condition
(financial or otherwise) and competitive survival of that party, and (b) a
violation of any of the provisions of this Section 7 could result in irreparable
injury to such party; and, therefore, Xxxxxx agrees that Platinum shall be
entitled to equitable relief, including injunction and specific performance,
in
the event of any breach of any of the provisions of this Section 7, in addition
to all other remedies available to such party at law or in equity.
8. No
Conflict; Release.
8.1 Xxxxxx
hereby represents and warrants to Platinum that (a) this Agreement constitutes
Xxxxxx’x legal and binding obligation, enforceable against him in accordance
with its terms, (b) his execution and performance of this Agreement does not
and
will not breach any other agreement, arrangements, understanding, obligation
of
confidentiality, employment relationship to which he is a party or by which
he
is bound or any law, rule or regulation, and (c) during the Term, he will not
enter into any agreement, either written or oral, in conflict with this
Agreement or his obligations hereunder.
8.2 Xxxxxx,
on behalf of himself, his agents, representatives, attorneys, assigns, heirs,
executors, and administrators, hereby unconditionally and irrevocably remises,
releases and forever discharges Platinum, Tandem Energy Holdings, Inc., Tandem
Energy Corporation and Shamrock Energy Corporation and their respective past,
present and future officers, stockholders, directors, employees,
representatives, attorneys, agents, successors, divisions, companies,
subsidiaries, parents and affiliates (and past, present and future agents,
directors, officers, stockholders, employees, representatives and attorneys
of
such divisions, companies, subsidiaries and affiliates), or any of them
(collectively, the “Releasees”), of and from any and all suits, claims, demands,
interest, costs, attorneys’ fees, expenses, actions and causes of action,
rights, liabilities, obligations, promises, contracts, controversies, losses
and
debts of any nature whatsoever that Xxxxxx, or his heirs, successors, legal
representatives or assigns, now has, owns or holds, or at any time heretofore
ever had, owned or held, or could have owned or held, whether known or unknown,
suspected or unsuspected. This release specifically includes any and all
contracts and agreements by and between any of the Releasees and Xxxxxx and/or
any of his affiliates, all of which are hereby released,
waived, terminated and discharged and any such contracts or agreements shall
be
null and void and of no further effect as between the parties thereto, except
for the Finder’s Agreement and the Termination Agreement, each dated even date
herewith. Xxxxxx further covenants and agrees that he shall forever forbear
from
pursuing and does hereby waive and withdraw any legal proceedings,
administrative or judicial, against the Releasees asserting any claim of any
arising out of or that may have existed at any time on or prior to the date
of
this Agreement. Xxxxxx represents that he has not assigned any asserted or
unasserted claims to any person or entity and acknowledges that Platinum enters
into this Agreement in reliance on that representation. Nothing herein shall
preclude Xxxxxx from enforcing the terms of this Agreement.
9. Status
as an Independent Contractor.
Platinum and Xxxxxx acknowledge and agree that Xxxxxx shall be acting as an
independent contractor only in performing the Services and not as an employee,
agent or joint venturer of or with Platinum, and shall have no authority to
obligate or bind Platinum. The parties acknowledge that, except as otherwise
agreed to by Xxxxxx and Platinum, any taxes that may be due and owing with
respect to the compensation to Xxxxxx hereunder shall be the sole responsibility
of Xxxxxx.
10. Miscellaneous.
10.1 Successors
and Assigns; Entire Agreement; No Assignment; Severability.
This
Agreement shall bind and inure to the benefit of the parties hereto and their
respective successors or heirs, distributes and personal representatives. This
Agreement contains the entire agreement between the parties with respect to
the
subject matter hereof and supersedes other prior and contemporaneous
arrangements or understandings, whether written or oral, with respect thereto.
This Agreement may not be assigned without the prior written consent of the
other party. If any portion of this Agreement is deemed unenforceable, such
provision shall be enforced to the fullest extent permitted by law and the
remainder of this Agreement shall remain in full force and effect.
10.2 Notices.
All
notices, consents and other communications under this Agreement shall be in
writing and shall be deemed to have been duly given (a) when delivered by hand
or (b) five (5) business days after being mailed, prepaid postage, certified
mail, return receipt requested as follows: If to the Company: Platinum Energy
Resources, Inc., 00 Xxxxxxxx Xxxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000 Attention:
Xxxxx Xxxxxxxx, President, facsimile (000) 000-0000. If to Xxxxxx: Xxxxx X.
Xxxxxxxx Esq., Law Offices of Xxxxx X. Xxxxxxxx P.C., 0000 000xx
Xxxxxx,
Xxxxxxx, Xxxxx 00000, facsimile (000) 000-0000.
10.3 Changes;
No Waiver.
The
terms and provisions of this Agreement may not be modified or amended, or any
of
the provisions hereof waived, temporarily or permanently, without the prior
written consent of each of the parties hereto. A waiver or failure to enforce
the terms of this Agreement or any similar agreement by a party in one instance
shall not constitute a waiver of its rights hereunder with respect to other
violations of this or any other agreement.
10.4 Governing
Law.
This
Agreement and (unless otherwise provided) all amendments hereof and waivers
and
consents hereunder shall be governed by the internal law of the State of New
York, without regard to the conflicts of law principles thereof.
10.5 Counterparts;
Facsimile Signatures.
This
Agreement may be executed in separate counterparts, each of which is deemed
to
be an original and all of which taken together constitute one and the same
agreement. This Agreement may be executed by any party by delivery of a
facsimile signature, which signature shall have the same force and effect as
an
original signature. Any party which delivers a facsimile signature shall
promptly thereafter deliver an originally executed signature to the other
party(ies); provided,
however,
that
the failure to deliver an original signature page shall not affect the validity
of any signature delivered by facsimile.
IN
WITNESS WHEREOF,
the
parties have executed this Consulting Agreement as of the date first above
written.
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PLATINUM
ENERGY RESOURCES, INC.
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| By: | /s/ Xxxxx Xxxxxxxx | |
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Name: Xxxxx Xxxxxxxx |
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| Title: Chief Executive Officer | ||
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CONSULTANT:
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| /s/ Xxxxx Xxxxxx | ||
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Xxxxx Xxxxxx |
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