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EXHIBIT 4.5
BUSINESS CONSULTANT AGREEMENT
AGREEMENT made effective the 25th day of February, 1997, at Houston, Texas,
between Midland Resources, Inc., a Texas Corporation (the "Company"), and
Xxxxxx Xxxxxxx Xxxxxx, (the "Consultant").
In consideration of the mutual promises contained in this contract, the
parties agree as follows:
RECITALS
WHEREAS, the Company has called upon Consultant in the past for advice on
various matters to which the Consultant has expended a significant amount of
time and effort;
WHEREAS, the Company anticipates that it will call upon Consultant in the
future for similar services which it has found to be of benefit;
WHEREAS, the Company and Consultant realize that the demands upon Consultant to
provide the time and attention to respond to Company's requests will extend
beyond those historically given by Consultant and currently assumed or
expected by the Company to be given without compensation;
WHEREAS, the Company and Consultant wish to formalize a consulting arrangement
providing for reasonable compensation to Consultant;
WHEREAS, the Company and Consultant each believe that compensation in the form
of a warrant to purchase stock will allow each to achieve certain objectives;
WHEREAS, it is the desire of the Company to engage the services of the
Consultant to perform for the Company consulting services, including but not
limited to those regarding general financial advice and consulting, due
diligence services including checking and investigating with respect in
individuals, other consultants and businesses, market and marketing research,
analyzing financial strategies both long term and short term, arranging for
introductions of the Company and its representatives to individuals,
consultants, and companies with respect to which Consultant has contacts, and
providing advice to Company personnel in charge of shareholder relations
("Services");
WHEREAS, it is the intent of the Company and Consultant that Consultant act as
an independent contractor and not as an employee; and
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WHEREAS, It is the desire of the Consultant to consult with the Board of
Directors and the officers of the Corporation.
AGREEMENT
Term
1. The respective duties and obligations of the parties to this agreement
shall be for a period of two (2) years, commencing on February 25, 1997 and may
be terminated by either party giving ninety (90) days' written notice to the
other party. If Consultant terminates this agreement for any reason, he shall
forfeit 1/24 th of the compensation provided for herein for each whole month
remaining in the term hereof. If such compensation in the form of a warrant to
purchase common stock has been exercised, such stock shall be returned to the
Company, or if Consultant has sold such stock then Consultant shall purchase
such number of forfeited shares in the market and deliver those shares to the
Company. Termination of this agreement by Consultant due to disability or
death shall not require the forfeiture of any compensation.
Consultations
2. The Consultant shall make himself available to consult with the Board of
Directors and the officers of the Company, at reasonable times, concerning
matters pertaining to Services.
Employment of Assistants
3. The Consultant may, from time to time, retain the aid of assistants or
the services of other persons, companies, or firms that the Consultant deems
reasonably necessary in order to properly perform his duties and obligations
under this agreement. All costs to the Consultant for such services shall be
born by Consultant and not without prior written agreement chargeable to the
Company.
Limited Liability
4. The Consultant shall not be liable to the Company, or to anyone who may
claim any right due to his relationship with the Company, for any acts or
omissions on the part of the Consultant or the agents or employees of the
Consultant in the performance of the Consultant's services under this
agreement, except when such acts or omissions are due to willful misconduct or
culpable negligence. The Company shall hold the Consultant free and harmless
from any obligations, costs, claims, judgments, attorney's fees, or attachments
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arising from or growing out of the services rendered to the Company pursuant to
the terms of this agreement or in any way connected with the rendering of such
services, except when the same shall arise due to the willful misconduct or
culpable negligence of the Consultant and the Consultant is adjudged to be
guilty of or liable due to willful misconduct or culpable negligence by a court
of competent jurisdiction.
Compensation
5. For services rendered under this agreement, the Consultant shall receive
a warrant to purchase fifty thousand shares (50,000) of Company common stock
at per share price of $3.00, for four (4) years substantially in the form of
Exhibit A hereto. Consultant shall at all times be an independent contractor
to the Company.
Minimum Amount of Service
6. The Consultant shall not be required to devote a minimum number of hours
per month to the affairs of the Company. The Consultant shall devote only so
much time to the affairs of the Company as he and the Company mutually
determine. By way of guidance and not in limitation or requirement, Consultant
and Company estimate that over the course of this agreement Consultant will
expend approximately six hundred (600) hours. Consultant may, but shall not
be required to maintain a log of hours expended pursuant to this agreement.
The Consultant may represent, perform services for, and be employed by such
additional clients, persons, or companies as the Consultant, in his sole
discretion, sees fit.
Arbitration
7. Any controversy between the parties involving the construction or
application of any of the terms, covenants, or conditions of this agreement
shall, on the written request of one party served on the other, be submitted to
arbitration, which shall comply with and be governed by the provisions of the
Texas General Arbitration Act, Texas Revised Civil Statutes, Articles 224
through 238-6. Each of the parties to this agreement shall appoint one person
as an arbitrator to hear and determine the dispute, and each party shall
attempt in good faith to agree with the other as to a third arbitrator; if the
parties should prove unable to agree in this way, then the two arbitrators
already chosen shall select a third impartial arbitrator whose decision shall
be final and conclusive. The expenses of arbitration shall be borne by the
losing party or in such proportion as the arbitrators shall decide.
Confidentiality
8. Consultant understands the Company has public shareholders and
therefore he shall maintain the confidence of and not disclose to any other
person all information provided to
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Consultant that is of a non-public, confidential, or proprietary nature without
the express written consent of Company. Consultant shall undertake to require
any agents he may engage or employ to comply with this provision as though they
were a party hereto. Upon the termination of this agreement Consultant shall
return any such information to Company. Consultant shall not personally trade
based upon any material non-public information that he becomes aware of as a
result directly or indirectly of this agreement.
Remedies
9. If any action at law or in equity is necessary to enforce or interpret
the terms of this agreement, the prevailing party shall be entitled to
reasonable attorney's fees, costs, and necessary disbursements in addition to
any other relief to which it may be entitled.
Texas Law to Apply
10. This agreement shall be construed under and in accordance with the laws
of the State of Texas, and all obligations of the parties created under this
agreement are performable in Xxxxxx County, Texas.
Parties Bound
11. This agreement shall be binding on and inure to the benefit of the
parties to it and their respective heirs, executors, administrators, legal
representatives, successors, and assigns when permitted by this agreement. The
Consultant shall not assign its obligations hereunder without the prior written
consent of the Company, which it may withhold for any reason. The Company's
rights hereunder shall inure to any successor whether by merger, reorganization
or otherwise.
Legal Construction
12. In the event that any one or more of the provisions contained in this
agreement shall for any reason be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect any other provisions, and the agreement shall be construed as if such
invalid, illegal, or unenforceable provision had never been contained in it.
Prior Agreements Superseded
13. This agreement constitutes the sole and only agreement of the parties to
it and supersedes any prior understandings or written or oral agreements
between the parties respecting this subject matter.
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Special Representations by Consultant
14. Consultant understands that the warrant to be given as compensation and
the shares issuable upon the exercise thereof may not be registered under the
federal or state securities laws and therefore maynot be sold or transferred
without registration or an available exemption from registration. Consultant
understands that a legend may be placed upon such warrant and any shares issued
upon its exercise evidencing such restrictions and stop transfer orders may be
placed against such shares. Consultant is sophisticated in business matters
and knowledgeable in securities matters and understands the merits and risks
associated with receipt of such warrant and shares. Consultant is
knowledgeable of the Company and has asked such questions of the Company and
received such answers and other information as he deems necessary to accept the
warrant as compensation.
Special Representation by Company
15. Company will use its best efforts to register the shares issuable upon
the exercise of the Warrant on a Registration Statement on Form S-8, subject in
all respects to the availability of such form for such purpose and such filing
not, in the sole opinion of the Company, being unduly burdensome or expensive.
Executed at Houston, Texas, on the day and year first above written.
COMPANY
Midland Resources, Inc.
By:
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Xxxx X. Xxxxxx III, President
CONSULTANT
Xxxxxx Xxxxxxx Xxxxxx
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(Signature)
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Exhibit A
WARRANT CERTIFICATE
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND NEITHER THE SECURITIES NOR ANY
INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION UNDER SUCH ACT AND THE RULES
AND REGULATIONS THEREUNDER; PROVIDED FURTHER, THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE NOT TRANSFERABLE BY OR FROM THE WARRANT HOLDER NAMED
HEREIN WITHOUT THE EXPRESS WRITTEN CONSENT OF MIDLAND RESOURCES, INC.
Issue Date: FEBRUARY 25, 1997 50,000 Warrants to
Purchase Common Stock
Void after 5:00 P.M.
FEBRUARY 24, 2001 Certificate No. KA-1
WARRANTS TO PURCHASE COMMON STOCK OF
MIDLAND RESOURCES, INC.
Midland Resources, Inc., a Texas corporation (the "Company") ,
hereby certifies that, for value received, XXXXXX XXXXXXX XXXXXX, the holder of
these Warrants (the"Warrants," and each right to purchase a share of Common
Stock, a "Warrant" ) is entitled, subject to the terms set forth below, at any
time, or from time to time, to purchase from the Company 50,000 fully paid and
nonassessable shares of Common Stock of the Company. These Warrants and all
rights hereunder, to the extent such rights shall not have been exercised, shall
terminate and become null and void at 5:00 p.m., Houston, Texas time, on
FEBRUARY 24, 2001 (the "Expiration Date"). For purpose of these Warrants, the
term "Common Stock" shall mean the common stock, par value $0.001 per share of
Midland Resources, Inc. having such rights and privileges as exist on the date
hereof.
These Warrants shall be subject to the following terms and
conditions:
SECTION 1. EXERCISE OF WARRANT; RESERVATION OF COMMON STOCK; EXERCISE PRICE;
ADJUSTMENTS RELATIVE TO EXERCISE OF WARRANT.
A. EXERCISE OF WARRANTS. Subject to the conditions set forth in
this Section 1, the holder of any warrant may, at such holder's option,
exercise such holder's rights under all or any part of the Warrants to purchase
one share of Common Stock in exchange for one Warrant ( the "Warrant Shares")
at a price per share (the "Exercise Price") equal to $3.00, payable in cash, at
any time and from time to time prior to the Expiration Date. The Warrant
Shares and the Exercise Price are subject to certain adjustments set forth in
this Section 1, and the terms "Warrant Shares" and "Exercise Price" as used
herein shall as of any time be deemed to include all such adjustments to be
given effect as of such time in accordance with the terms hereof.
B. RESERVATION OF COMMON STOCK. The Company covenants that,
while these Warrants are exercisable, it shall reserve from its authorized and
unissued Common Stock a
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sufficient number of shares to provide for the delivery of stock pursuant to an
exercise of these Warrants. The Company further covenants that all shares of
Common Stock that may be issued upon the exercise of these Warrants shall, upon
issuance, be duly and validly issued, fully paid and nonassessable, and free
from all taxes, liens, and charges with respect to the purchase and issuance
of the shares.
C. RECAPITALIZATION. (1) The existence of these Warrants shall
not affect in any way the right or power of the Company or its shareholders to
make or authorize any or all adjustments, recapitalization, reorganizations, or
other changes in the Company's capital structure or its business, or any merger
or consolidation of the Company or any issue of bonds, debentures, preferred or
prior preference stocks ahead of or affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.
(2). The consideration payable per share upon exercise shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a subdivision or consolidation of shares
or other capital adjustment, or the payment of a stock dividend or other
increase or decrease in such shares, effected without receipt of consideration
by the Company; provided, however, that any fractional shares resulting from
any such adjustment shall be eliminated for the purposes of such adjustments.
(3). Subject to any required action by the shareholders, if the
Company shall be the surviving or resulting corporation in any merger or
consolidation, the Warrant granted hereunder shall pertain to and apply to the
securities or rights to which a holder of the number of shares of Common Stock
subject to the Warrants would have been entitled. In the event of any merger
or consolidation pursuant to which the Company is not the surviving or
resulting corporation, there shall be substituted for the shares of Common
Stock subject to any unexercised portions of the Warrants, an appropriate
number of shares of each class of stock or other securities of the surviving or
consolidated corporation which were distributed to the shareholders of the
Company in respect of such shares of Common Stock. Provided, however, that the
Warrants may be canceled by the Company as of the effective date of any such
reorganization, merger or consolidation or of any dissolution or liquidation of
the Company by giving notice to the holder hereof of its intention to do so and
by permitting the purchase during the thirty (30) day period next preceding
such effective date of all or any portion of the shares subject to the
Warrants.
(4). No adjustment of the Exercise Price shall be made in an
amount that is less than 1% of the Exercise Price, but any such lesser
adjustment shall be carried forward and made at the time of and together with
the next subsequent adjustment.
SECTION 2. METHOD OF EXERCISE OF WARRANTS.
These Warrants may be exercised by the delivery of this
Certificate, along with the Warrant Exercise Form attached hereto as Exhibit
"A" duly executed by the holder, to the Company at its principal office,
accompanied by payment of the Exercise Price for the number of shares of Common
Stock specified. The Warrants may be exercised for less than the full number
of shares of Common Stock called for hereby by delivery of this Certificate in
the manner and at the place provided above, accompanied by payment for the
number of shares of Common Stock being purchased. If the Warrants should be
exercised in part only, the Company shall, upon surrender of this Certificate
for cancellation, execute and deliver a new Certificate evidencing the right of
the
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holder to purchase the balance of the shares purchasable hereunder. Upon
receipt by the Company of this Certificate at the principal office of the
Company, in proper form for exercise, accompanied by the full Exercise Price in
cash or certified or bank cashier's check, the holder shall be deemed to be the
holder of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such Common Stock shall not then be
actually delivered to the holder.
As soon as practicable after the exercise of these Warrants in
whole or in part and, in any event, within ten days thereafter, the Company at
its expense will cause to be issued in the name of and delivered to the holder
a certificate or certificates for the number of fully paid and nonassessable
shares of Common Sock (and a certificate representing the balance of any
unexercised Warrants) to which the holder shall be entitled upon such exercise.
Each certificate for shares of Common Stock so delivered shall be in such
denominations as may be requested by the holder and shall be registered in the
name of the holder or such other name as the holder may designate.
SECTION 3. RIGHTS OF HOLDER.
These Warrants do not entitle the holder to any voting rights, to
any other rights of a stockholder of the Company, or to any other rights
whatsoever, except for the rights specified in this Certificate. No dividends
are or shall be payable, or shall accrue, on or with respect to these Warrants
or any interest represented by these Warrants or on the shares that may be
purchased upon the exercise hereof until or unless, and except to the extent
that, these Warrants are exercised.
SECTION 4. NOTICE.
Any and all notices concerning these Warrants shall be given to
the holder of this Warrant by publication and/or by written notice to the
address of the holder on the warrant register for the Warrants maintained by
the Company. No notice or notices concerning these Warrants are required
except as specified in this Certificate.
SECTION 5. MUTILATED OR MISSING WARRANT CERTIFICATES.
Upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant
Certificate, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification and upon surrender and cancellation of this
Warrant Certificate (if mutilated) the Company will execute and deliver a new
Warrant Certificate of like tenor and date.
SECTION 6. MISCELLANEOUS.
A. GOVERNING LAW. These Warrants shall be performable in,
subject to and construed in accordance with the laws of the State of Texas.
B. RESTRICTIVE LEGEND. The Holder hereof, upon exercise of
these Warrants, understands and agrees that the share(s) certificate(s) to be
issued will bear a restrictive legend similar to the legend contained hereon
and stop transfer restrictions will be placed against such shares until
compliance with the legend is determined to the satisfaction of the Company.
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IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed, as of the day and year first above written.
MIDLAND RESOURCES, INC.
By:
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Xxxx X. Xxxxxx III,
President
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EXHIBIT "A"
WARRANT EXERCISE FORM
DATE: _______________, 19__
TO: MIDLAND RESOURCES, INC.
The undersigned, the holder of the attached Warrants, hereby irrevocably
elects to exercise all or part of the purchase right represented by such
Warrants for, and to purchase thereunder, ________________________ shares of
Common Stock, Par Value $0.001 Per Share of Midland Resources, Inc. (the
"Company") and herewith makes payment of $__________________ to the Company,
evidenced by delivery of _________________________________________, and
requests that the certificate of such shares be issued in the name of, and be
delivered to, _______________________________________________________________ ,
whose address is _____________________________________________________________
______________________________________________________________________________.
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(Name of Holder)
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(Authorized Signatory)
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(Address)
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