FUEL NATION
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is entered into effective
as of June 6th, 2001(the "Effective Date") by and between FUELNATION Inc. (the
"Company") whose address is 0000 Xxxxx Xxxxx Xxxxxxx, Xxxxx 000, Xxxx Xxxxx,
Xxxxxxx 00000, and Xxxxx Xxx Xx., doing business as Veritas Venture Lab
("Consultant"), whose address is Four Xxxxxxxx Xxxxxx, Xxxxx 0, Xxxxxxxxx, XX
00000.
Consulting Relationship. During the term of this Agreement, Consultant
will provide consulting services (the "Services") to the Company as described on
Exhibit A attached hereto, as needed and as requested by the Company. Consultant
shall use Consultant's best efforts to perform the Services in a manner
satisfactory to the Company.
Fees. As consideration for the Services to be provided by Consultant
and other obligations, the Company shall pay to Consultant the consideration
specified in Exhibit B attached hereto (the "Consideration").
Support. As additional consideration for the Services to be provided by
Consultant under this Agreement, the Company will provide Consultant with such
support facilities and space as may be required in the Company's judgment to
enable Consultant to perform the Services properly.
Expenses. The Company shall reimburse Consultant on a monthly basis for
reasonable travel and out-of-pocket expenses incurred by Consultant in
connection with its activities under this Agreement. Before incurring any
expense greater than one thousand dollars ($1,000), Consultant shall secure the
prior verbal consent of the Company.
Term and Termination. Consultant shall serve as a consultant to the
Company for a period commencing on the Effective Date, until this Agreement is
terminated by either party, for any reason with or without cause, upon thirty
(30) days' written notice to the other party.
Supervision of Consultant's Services. All services to be performed by
Consultant, including but not limited to the Services, will be as agreed between
Consultant and one of the Company's officers. Consultant will be required to
report to a Officer concerning the Services performed under this Agreement. The
nature and frequency of these reports will be left to the discretion of the
officers.
Consulting or other Services for Competitors. The Company understands
that Consultant does not presently perform or intend to perform, during the term
of this Agreement, consulting or other services for any company, person or
entity whose business or proposed business in any way involves products or
services which could reasonably be determined to be competitive with the
products or services or proposed products or services of the Company. If,
however, Consultant desires to perform such services at any time after the
Effective Date and prior to termination of this Agreement, Consultant agrees to
notify the Company in writing in advance (specifying the identity of the entity
or the person) and provide information sufficient to allow the Company to
determine if such consulting would conflict with projects or products of the
Company. If the Company determines that such business is in competition with
that conducted by the Company, this Agreement shall, at the option of the
Company upon written notice to Consultant, terminate immediately.
Proprietary Agreement. Consultant shall sign, or has signed, a
Proprietary Information Agreement for Consultant substantially in the form
attached to this Agreement as Exhibit C (the "Proprietary Agreement"), prior to
or on the date on which Consultant's consulting relationship with the Company
commences.
Conflicts with this Agreement. Consultant represents and warrants that
neither Consultant nor any of Consultant's partners, employees or agents is
under any pre-existing obligation in conflict or in any way inconsistent with
the provisions of this Agreement. Consultant warrants that Consultant has the
right to disclose or use all ideas, processes, techniques and other information,
if any, which Consultant has gained from third parties, and which Consultant
discloses to the Company in the course of performance of this Agreement, without
liability to such third parties. Consultant represents and warrants that
Consultant has not granted any rights or licenses to any intellectual property
or technology that would conflict with Consultant's obligations under this
Agreement. Consultant will not knowingly infringe upon any copyright, patent,
trade secret or other property right of any former client, employer or third
party in the performance of the services required by this Agreement.
License and Assignment of Rights. To the extent that Consultant has
intellectual property rights of any kind in any pre_existing works which are
subsequently incorporated in any work or work product produced in rendering the
Services, Consultant hereby grants the Company a royalty-free, irrevocable,
world_wide, perpetual, non_exclusive license (with the right to sublicense) to
make, have made, copy, modify, make derivative works of, use, sell, license,
disclose, publish, or otherwise disseminate or transfer such subject matter.
Consultant agrees that all inventions, original works of authorship,
developments, concepts, know-how, improvements or trade secrets which are made
by Consultant (solely or jointly with others) within the scope of and during the
period in which Consultant is providing Services to the Company are "works made
for hire" (to the greatest extent permitted by applicable law) belonging to the
Company and Consultant is compensated therefor by such amounts paid to
Consultant under this Agreement, unless regulated otherwise by the mandatory law
of the State of Massachusetts. To the extent there are any conflicts between
this Section 10 and the Proprietary Agreement, the terms of the Proprietary
Agreement shall prevail.
Miscellaneous.
Amendments and Waivers. Any term of this Agreement may be amended or
waived only with the written consent of the parties. Sole Agreement. This
Agreement, including the Exhibits hereto, constitute the sole agreement of the
parties and supersedes all oral negotiations and prior writings with respect to
the subject matter hereof.
Notices. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient upon receipt, when delivered
personally or by a nationally-recognized delivery service (e.g., Federal Express
or UPS), or forty-eight (48) hours after being deposited in the U.S. mail as
certified or registered mail with postage prepaid, if such notice is addressed
to the party to be notified at such party's address.
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Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Massachusetts, without giving effect to the principles of conflict of laws.
Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded, and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.
Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.
Arbitration. Any dispute or claim arising out of or in
connection with any provision of this Agreement, excluding Sections 8 and 10
hereof, will be finally settled by binding arbitration in Cambridge,
Massachusetts in accordance with the rules of the American Arbitration
Association by one arbitrator appointed in accordance with said rules. The
arbitrator shall apply Massachusetts law, without reference to rules of
conflicts of law or rules of statutory arbitration, to the resolution of any
dispute. Judgment on the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof. Notwithstanding the foregoing, the parties
may apply to any court of competent jurisdiction for preliminary or interim
equitable relief, or to compel arbitration in accordance with this paragraph,
without breach of this arbitration provision. This Section 11(g) shall not apply
to the Proprietary Agreement.
Advice of Counsel. EACH PARTY acknowledges that, in executing
this Agreement, SUCH PARTY has had the opportunity to seek the advice of
INDEPENDENT legal counsel, and HAS read and understood all of the terms and
provisions of this Agreement. This Agreement shall not be construed against any
party by reason of the drafting or preparation hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date written by their signatures below.
COMPANY
FUELNation, Inc.,
By
Xxxxxxxxxxx X. Xxxxxxxxx
CONSULTANT
Veritas Venture Lab
By
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Xxxxx Xxx Xx.
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EXHIBIT A
DESCRIPTION OF CONSULTING SERVICES
Consultant will perform the following tasks:
The VVL consulting team will assist in efforts to close the acquisition of
Xxxxxxx Oil as per instructions from Xxxxx Xxxxxxxxx.
Coordinate with Xxxx Xxxxxx to consolidate the mid- year 2001 financials of
Xxxxxxx, Star, and FUELNation as they become available. The completed financial
statements will be forwarded to FUELNation's accountant Xxx Xxxxxxxx. (As
discussed, this will be a gratis final deliverable per our December agreement).
Update the business plan to reflect the transportation roll-up story and how the
implementation of the R2R system will increase efficiency, improve margins, and
create additional value from purchased assets. This will include market research
on the petroleum marketing industry, i.e. industry fragmentation, identification
of acquisition candidates, growth forecasts, industry metrics and financing
strategies, technological impacts, operational synergies, and exit strategies.
As you have noted, there is significant skepticism about roll-up plays in
general, so we need to tell a compelling story about why our strategy will work
in this industry.
Develop the rollout strategy for the R2R system. This will essentially be a
sales and marketing plan for the implementation of the R2R technology both
domestically and internationally. We will identify the target market, potential
customers, and determine the best strategies for selling and installing the
system in as many sites as possible. We will explore the advisability of a
direct sales effort, joint ventures with large oil companies, technology
partners, Xxxxxx Root etc. and the resources that will be required to implement
the plan.
Develop strategic investment banking relationships. To implement this strategy,
FUELNation will need strong investment banking partners to develop, finance and
facilitate the proposed acquisition strategy. Our team will identify the
appropriate bankers and develop relationships. We should allocate some
additional funds (outside this contract) to assist us in market research and
financing strategies.
Create management and organization structure. This will entail the creation of a
management plan and organization chart for FUELNation, identification and
recruitment of key personnel to execute its business strategy and to give the
Company credibility in the marketplace and on Wall Street. We will structure
management and organization around the Company's three primary components:
technology, services, and operations.
Prepare presentations and meetings. We will develop high quality presentations
for investors and others that will explain the compelling FUELNation story
succinctly. We will also be prepared to meet with and make presentations to
potential investors, clients and associates.
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Site visits to Boca Raton and Xxxxxxx Oil. We believe it is important for our
team to observe the R2R system installed and operating as well as meeting the
key members of the technology team. A site visit to Xxxxxxx Oil will also assist
us in evaluating the roll-up scenario, determining the acquisition synergies and
identifying acquisition targets. The expenses for these trips will be submitted
for approval in advance when they exceed one thousand dollars, per the written
consulting agreement.
The time line and deliverables schedule will be determined during the course of
discussions between Consultant and Company, from time to time.
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Exhibit "B"
CONSIDERATION
Consultant shall be compensated for its services, such that the Company is
hereby authorized to issue 1,000,000, shares of stock of the Company to the
Consultant as consideration for services performed for up to a two year period,
of which 50,000 shares will be issued immediately. The Company shall pay the
Consultant as follows: said common shares of FUELNation stock payable upon valid
invoicing of Consultant for providing its services to Company as described in
exhibit "A," based on the current average market price of the Company's public
traded shares (the prior week's average trading price) times a discount of 65%,
times the applicable number of shares of said common stock, as this relates to
the approved dollar amount invoiced by the Consultant from time to time. (For
example, if the Consultant presented an acceptable invoice for $200,000 then
this amount would be grossed up by 65%, which equates to $307,692; Therefor, if
the average trading price of the Company's common stock was at $2.00 per share
then, the company would deliver 153,846 shares of its common stock to the
Consultant, rounded down as no fractional shares will be issued. ($200,000
divided by 0.65, then divided by $2.00, which equates to 153,846 shares).
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