EXHIBIT 10-15
AMENDED MANAGMENT CONSULTING
SERVICES AGREEMENT
AMONG:
PETROGEN CORP.
AND:
PETROGEN, INC.
AND:
XXXXX X. XXXXXXXX
PETROGEN CORP.
0000 Xxxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx, X.X.X., 00000
Amended Management Consulting Services Agreement
Petrogen Corp.
AMENDED MANAGEMENT CONSULTING
SERVICES AGREEMENT
THIS AMENDED MANAGEMENT CONSULTING SERVICES AGREEMENT is made and dated
for reference effective as at February 12, 2003 (the "'EFFECTIVE DATE") as fully
executed effective on this 18th day of August, 2003.
AMONG:
PETROGEN CORP., a company
incorporated under the laws of the
State of Nevada, U.S.A., and having
an executive office and an address
for notice and delivery located at
0000 Xxxxxxxxx Xxxxxxx. Xxxxx 0000,
Xxxxxxx, Xxxxx, X.X.X., 00000
(the "COMPANY');
OF THE FIRST PART
AND:
PETROGEN, INC., a company
incorporated under the laws of the
State of Colorado, U.S.A., and also
having an executive office and an
address for notice and delivery
located at 0000 Xxxxxxxxx Xxxxxxx,
Xxxxx 0000. Houston. Texas, U.S.A.,
77077
("PETROGEN, INC.");
OF THE SECOND PART
(the Company and Petrogen, Inc.
being hereinafter collectively also
referred to as the "COMPANIES" as
the context so requires).
AND:
XXXXX X. XXXXXXXX, having an
address for notice and delivery
located at 310, 0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx, Xxxxx 00000
(the "CONSULTANT"');
OF THE THIRD PART
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(the Company, Petrogen, Inc. and
the Consultant being hereinafter
singularly also referred to as a
"PARTY" and collectively referred
to as the "PARTIES "' as the
context so requires).
WHEREAS.
A. The Company is a reporting company incorporated under the laws of the State
of Nevada, U.S.A., and has its common shares listed for trading on the NASDAQ
Over-The-Counter Bulletin Board;
B. Petrogen, Inc. is a non-reporting company incorporated under the laws of the
State of Colorado, U.S.A., and, in accordance with the terms and. conditions of
a certain "Share Exchange Agreement", dated for reference effective as at
October 11, 2002 (the "SHARE EXCHANGE AGREEMENT'"), as entered into among the
Company, Petrogen, Inc. and all of the shareholders of Petrogen, Inc., the
Company therein purchased all of the issued and outstanding shares of Petrogen,
Inc. from the shareholders of Petrogen, Inc.;
C. Prior to the completion of the Share Exchange Agreement the Consultant was
the President, Chief Executive Officer, Chairman and a Director of Petrogen,
Inc. and, in accordance with the terms and conditions of a certain pre-existing
consulting arrangement with Petrogen, Inc. (the "UNDERLYING ARRANGEMENT"),
Petrogen, Inc. therein retained the Consultant to provide certain services to
Petrogen, Inc. as Petrogen, Inc.'s President and Chief Executive Officer:
D. In conjunction with the recent completion by the Company of the Share
Exchange Agreement the resulting Company is now involved in the principal
business of Petrogen, Inc.; which is oil and gas development and production
(collectively, the resulting "BUSINESS"); and, as a consequence thereof, the
Companies were thereby desirous of retaining the Consultant as both of the
Companies' respective President and Chief Executive Officer, and the Consultant
was thereby desirous of accepting such positions, in order to provide such
related services to both Companies (collectively, the "GENERAL SERVICES") as may
be necessary and determined during the continuance of the Underlying
Arrangement;
E. As a result, and in conjunction with the completion of the Share Exchange
Agreement, the Parties hereto entered into a certain "Management Consulting
Services Agreement", dated for reference effective as at February 12, 2003 (the
date of closing under the Share Exchange Agreement: the " UNDERLYING
AGREEMENT"), pursuant to which the Companies therein formally retained the
Consultant to provide the General Services to the Companies in accordance with
the terms and conditions therein contained;
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F. Since the introduction of the Parties hereto, together with the entering into
of the Underlying Agreement, the Parties hereby acknowledge and agree that there
have been various discussions, negotiations, understandings and agreements
between them relating to the terms and conditions of the General Services and,
correspondingly, that it is their intention by the terms and conditions of this
"Amended Management Consulting Services Agreement" (the ""AGREEMENT") to hereby
replace, in their entirety, the Underlying Agreement and all such prior
discussions, negotiations, understandings and agreements with respect to the
General Services; and
G. The Parties hereto have agreed to enter into this Agreement which replaces,
in its entirety, the Underlying Agreement, together with all such prior
discussions, negotiations, understandings and agreements, and, furthermore,
which necessarily clarifies their respective duties and obligations with respect
to the within General Services to be provided hereunder, all in accordance with
the terms and conditions of this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSETH that, in consideration of the
mutual covenants and provisos herein contained, THE PARTIES HERETO AGREE AS
FOLLOWS:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires, the following words
and phrases shall have the following meanings:
(a) "ADVANCES" has the meaning ascribed to it in section "3.4"
hcreinbelow;
(b) "'ADDITIONAL OPTIONS"' has the meaning ascribed to it in section
"4.7" herein be low;
(c) "AGREEMENT"" means this Amended Management Consulting Services
Agreement as from time to time supplemented or amended by one or
more agreements entered into pursuant to the applicable provisions
hereof, together with any Schedules attached hereto;
(d) "ARBITRATION ACT" means the COMMERCIAL ARBITRATION ACT (British
Columbia), R.S.B.C. 1996, as amended, as set forth in Article "8"
hereinbelow;
(e) "BENEFITS"' has the meaning ascribed to it in section "4.8"
hereinbelow;
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(f) "BOARD OF DIRECTORS" means the Board of Directors of each or
either of the Company and Petrogen, Inc. as duly constituted from
time to time;
(g) "BONUS'" has the meaning ascribed to it in section "4.3"
hereinbelow;
(h) "BUSINESS"' has the meaning ascribed to it in recital "D."
hereinabove.
(i) "BUSINESS CLAY' means any day during which Canadian Chartered
Banks arc open for business in the City of Vancouver, Province of
British Columbia;
(j) "CHANGE IN CONTROL' means, in relation to section "4.6"
hereinbelow, the occurrence of any of the following events:
(i) the acquisition, whether direct or indirect, of voting shares
of the Company in excess of 20% of the issued and outstanding
voting shares of the Company by a person or group of persons
acting in concert, other than through an Consultant share
purchase plan or Consultant share ownership plan and other
than by persons who are, or who are controlled by, the
existing shareholders of the Company;
(ii) any change or changes in the composition of the Board of
Directors of the Company from the Effective Date such that
less than a majority of the Board of Directors continues to
consist of Directors who are continuing Directors (each a
"CONTINUING DIRECTOR1'). In this regard. Continuing Director
means an individual who is a member of the Board of Directors
as of the Effective Date, or who becomes a member of the
Board of Directors subsequent to the Effective Date with the
approval of a majority of the Directors who were Continuing
Directors as of the Effective Date;
(iii)a merger of the voting shares of the Company where the
voting shares of the resulting merged company are owned or
controlled by shareholders of whom more than 20% are not the
same as the shareholders of the Company immediately prior to
the merger; or
(iv) a sale by the Company of substantially all of the assets of
the Company to an entity that is not controlled by either the
shareholders of the Company or by the Company;
(k) "COMPANIES" means the Company and Petrogen, Inc.;
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(l) "COMPANY means Petrogen Corp. [having changed its name from "Hadro
Resources, Inc." as a consequence of the due and complete closing
of the Share Exchange Agreement), a company incorporated under the
laws of the State of Nevada, U.S.A., or any successor company,
however formed, whether as a result of merger, amalgamation or
other action;
(m) "COMPANY'S NON-RENEWAL NOTICE" has the meaning ascribed to it in
section "3.2" hereinbelow;
(n) "CONSULTANT" means Xxxxx X. Xxxxxxxx;
(o) "EFFECTIVE DATE" has the meaning ascribed to it on the front page
of this Agreement;:
(p) "EFFECTIVE TERMINATION DATE"" has the meaning ascribed to it in
each of sections "3.2", "3.3", "3.4" and "3.5" hereinbelow;
(q) "EXPENSES" has the meaning ascribed to it in section "4.4"
hereinbelow;
(r) "FEE" has the meaning ascribed to it in section "4.1" hereinbelow;
(s) "GENERAL SERVICES"' has the meaning ascribed to it in section "2.
hereinbelow;
(t) "INDEMNIFIED PARTY" has the meaning ascribed to it in section
"6.1" hereinbelow:
(u) "OPTIONS" has the meaning ascribed to it in section "4,6"
hereinbelow;
(v) "OPTION PLAN" has the meaning ascribed to it in section "4.6"
hereinbelow;
(w) "OPTION SHARE" has the meaning ascribed to it in section "4.6"
hereinbelow;
(x) "PARTIES" or "PARTY" means, individually and collectively, the
Company, Petrogen, Inc. and/or the Consultant hereto, as the
context so requires, together with each of their respective
successors and permitted assigns as the context so requires;
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(y) "PETROGEN, INC." means Petrogen, Inc., a company incorporated
under the laws of the State of Colorado, U.S.A., or any successor
company, however formed, whether as a result of merger,
amalgamation or other action;
(z) "REGULATORY APPROVAL" means the acceptance for tiling, if
required, of the transactions contemplated by this Agreement by
the Regulatory Authorities;
(aa) "REGULATORY AUTHORITIES" and "'REGULATORY AUTHORITY'" means,
either singularly or collectively as the context so requires, such
regulatory agencies who have jurisdiction over the affairs of
either of the Company, Petrogen, Inc. and/or the Consultant and
including, without limitation, and where applicable, the British
Columbia Securities Commission, the United States Securities and
Exchange Commission, NASDAQ and all regulatory authorities from
whom any such authorization, approval or other action is required
to be obtained or to be made in connection with the transactions
contemplated by this Agreement;
(ab) "RULE" has the meaning ascribed to it in section "4.6"
hereinbelow;
(ac) "SECURITIES ACT'"' has the meaning ascribed to it in section "4.6"
hereinbelow;
(ad) "SEVERANCE PACKAGE" has the meaning ascribed to it in section
"3.2" hereinbelow;
(ae) "'SUBSIDIARY"' means any company or companies of which more than
50% of the outstanding shares carrying votes at all times
(provided that the ownership of such shares confers the right at
all times to elect at least a majority of the directors of such
company or companies) are for the time being owned by or held for
that company and/or any other company in like relation to that
company and includes any company in like relation to the
subsidiary;
(af) "UNDERLYING AGREEMENT" has the meaning ascribed to it in recital
"B."' hereinabove; and
(ag) "VACATION" has the meaning ascribed to it in section "4.5"
hereinbelow.
1.2 INTERPRETATION. For the purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
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(a) the words "HEREIN", "HEREOF" and "HEREUNDER" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, section or other subdivision of this
Agreement;
(b) any reference to an entity shall include and shall be deemed to be
a reference to any entity that is a permitted successor to such
entity; and
(c) words in the singular include the plural and words in the
masculine gender include the feminine and neuter genders, and VICE
VERSA.
ARTICLE 2
REPLACEMENT OF UNDERLYING AGREEMENT AND
GENERAL SERVICES AND DUTIES OF THE CONSULTANT
2.1 REPLACEMENT OF UNDERLYING AGREEMENT. This Agreement constitutes the entire
agreement to date between the Parties hereto and replaces, in its entirety, the
Original. Agreement, together with every previous agreement, discussion,
expectation, negotiation, representation or understanding, whether oral or
written, express or implied, statutory or otherwise, between the Parties with
respect to the subject matter of the Underlying Agreement.
2.2 GENERAL SERVICES. During the continuance of this Agreement the Companies
hereby agree to retain, the Consultant as the Chairman and Chief Executive
Officer of each of the Companies, and the Consultant hereby agrees to be subject
TO the direction and supervision of, and to have the authority as is delegated
to the Consultant by, the Board of Directors of the Company (the "BOARD OF
DIRECTORS") consistent with such positions, and the Consultant also agrees to
accept: such positions in order to provide such, related services as the Board
of Directors shall, from time to time, reasonably assign to the Consultant and
as may be necessary for the ongoing maintenance and development of the
Companies' various Business interests during the continuance of this Agreement
(collectively, the "GENERAL SERVICES"); it being expressly acknowledged and
agreed by the Parties hereto that the Consultant shall commit and provide to the
Companies the General Services on a reasonably full-time basis during the
continuance of this Agreement for which the Company, as more particularly set
forth hereinbelow, hereby agrees to pay and provide to the order and direction
of the Consultant each of the proposed Fee (as hereinafter determined). Bonus
(as hereinafter determined), Expense (as hereinafter determined) payment
reimbursements, Options (as hereinafter determined), Additional Options (as
hereinafter determined), Vacation (as hereinafter determined) pay. Benefits (as
hereinafter determined) and Severance Package (as hereinafter determined) in
accordance with Articles "3" and "4" hereinbelow.
2.3 ADDITIONAL DUTIES RESPECTING THE GENERAL SERVICES. Without in any manner
limiting the generality of the General Services to be provided as set forth in
section "2.2" hereinabove, it is hereby also acknowledged and agreed that
Consultant
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will, during the continuance of this Agreement, devote reasonably all of the
Consultant's consulting time to the General Services of the Consultant as may be
determined, and required by the Board of Directors for the performance of said
General Services faithfully, diligently, to the best of the Consultant's
abilities and in the best interests of the Companies and, furthermore, that the
Consultant's consulting time will be prioritized at all times for the Companies
in that regard.
2.4 ADHERENCE TO RULES AND POLICIES OF THE COMPANIES. The Consultant hereby
acknowledges and agrees to abide by the reasonable rules, regulations,
instructions, personnel practices and policies of the Companies and any changes
therein which, may be adopted from time to time by the same as such rules,
regulations, instructions, personnel practices and policies may be reasonably
applied to the Consultant as the Chairman and Chief Executive Officer of each of
the Companies,
ARTICLE 3
EFFECTIVENESS, TERMINATION AND SEVERANCE
3.1 EFFECTIVENESS OF THE AGREEMENT. This Agreement commences on the Effective
Date as set forth hereinabove, however, is subject, at all. times, to the
Companies' prior receipt, if required, of Regulatory Approval from each of the
Regulatory Authorities to the terms and conditions of and the transactions
contemplated by this Agreement.
3.2 TERMINATION WITHOUT CAUSE BY THE COMPANY AND SEVERANCE PACKAGE.
Notwithstanding any other provision of this Agreement, this Agreement may be
terminated by the Company at any time after the Effective Date and during the
continuance of this Agreement upon its delivery to the Consultant of prior
written notice of its intention to do so (the "COMPANY'S NOTICE OF
TERMINATION"') at least 60 calendar days prior to the effective date of any such
termination, (the ""EFFECTIVE TERMINATION DATE'"). In. any such event the
Consultant's ongoing obligation to provide the General Services will continue
only until the Effective Termination Date and the Company's shall continue to
pay to the Consultant all. of the amounts otherwise payable to the Consultant
under Article "4" hereinbelow until the Effective Termination Date (and
including for greater certainty, however, without limiting any of the amounts
payable under Article "4" hereinbelow, a pro rata portion of any Fees (as
hereinafter determined), Bonuses (as hereinafter determined), Vacation, (as
hereinafter determined) pay and Benefits (as hereinafter determined)). In this
regard, and in addition to all of the amounts otherwise due and payable to the
Consultant under Article "4" hereinbelow, the Company shall also pay to the
Consultant the following amounts in the following manner, however, subject at
all times to the Consultant's ongoing compliance with the Consultant's
obligations under Article "5" hereinbelow:
(a) an additional severance cash payment equating to an aggregate of
24 months of the monthly Fee then payable by the Company to the
Consultant on the Effective Termination Date: and payable within
10 business days of the Effective Termination Date;
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(b) any Expense payment reimbursements which would then be due and
owing by the Company to the Consultant to the date of the
Effective Termination Date; and, subject to the Consultant's prior
compliance with the provisions of section "4.4" hereinbelow,
payable within 10 business days of the Effective Termination Date;
(c) any Vacation pay which would then be due and owing by the Company
to the Consultant to the date of the Effective Termination Date;
and payable within 10 business days of the Effective Termination
Date;
(d) subject to the provisions of sections "4.6" and "4.7" hereinbelow,
confirmation that all of the Consultant's then issued and
outstanding and vested Options, Additional Options and Follow On
Options in and to the Company as at the Effective Termination Date
are exercisable for a period of five years from the Effective
Termination Date; and
(e) confirmation that all of the Consultant's then Benefits and
Insurance coverage pursuant to Article "6.2" would be extended to
the Consultant for a period ending two years from the Effective
Termination Date;
with the aggregate of each such obligation of the Company to the Consultant
under each of paragraphs "(a)", "(b)", "(c)" "(d)" and "(e)" hereinabove being
herein collectively referred to as the "SEVERANCE PACKAGE".
3.3 TERMINATION WITHOUT CAUSE BY THE CONSULTANT. Notwithstanding any other
provision of this Agreement, this Agreement may be terminated by the Consultant
at any time after the Effective Date and during the continuance of this
Agreement upon the Consultant's delivery to the Company of prior written notice
of its intention to do so at least 30 calendar days prior to the effective date
of any such termination (herein also the "EFFECTIVE TERMINATION DATE"). In any
such event the Company shall pay to the Consultant all of the amounts otherwise
due or payable to the Consultant by the Company pursuant to the Severance
Package and Article "4" hereinbelow until the Effective Termination Date.
3.4 TERMINATION FOR CAUSE BY ANY PARTY AND ADVANCE. Notwithstanding any other
provision of this Agreement, this Agreement may be terminated, by either Party
hereto at any time upon written notice to the other Party of such Party's
intention to do so at least 30 calendar days prior to the effective date of any
such termination (herein also the "EFFECTIVE TERMINATION XXXX"), and damages
sought, if;
(a) the other Party fails to cure a material breach of any provision
of this Agreement within 30 calendar days from its receipt of
written notice from
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said Party (unless such material breach cannot be reasonably cured
within said 30 calendar days and the other Party is actively
pursuing to cure said material breach);
(b) the other Party is willfully non-compliant in the performance of
its respective duties under this Agreement within. 30 calendar
days from its receipt of written notice from said Party (unless
such willful non- compliance cannot be reasonably corrected within
said 30 calendar days and the other Party is actively pursuing to
cure said willful non- compliance);
(c) the other Party commits fraud or serious neglect or misconduct in
the discharge of its respective duties hereunder or under the law;
or
(d) the other Party becomes adjudged bankrupt or a petition for
reorganization or arrangement under any law relating to
bankruptcy, and where any such involuntary petition is not
dismissed within 30 calendar days.
In this regard, and in the event that either of the Companies
terminates this Agreement at any time for cause by providing 30 calendar days'
prior written notice to the Consultant with respect to either of paragraphs
"(a)" or "(b)" only hereinabovc, the Company shall pay to the Consultant all of
the amounts otherwise due or payable to the Consultant by the Company pursuant
to Article "4" hercinbelow until the Effective Termination Date (collectively,
the "ADVANCE"); and. which Advance may then be utilized by the Consultant to
either cure or correct any material breach or willful non-comp!iance consequent
thereon; failing which the Company may then offset or claim any such Advance as
against any other amounts which may then be due and owing by the Company to the
Consultant under the terms and conditions of this Agreement.
In this regard, and in the event that the Consultant terminates this
Agreement at any time for cause by providing 30 calendar days' prior written
notice to the Company with, respect to either of paragraphs "(a)" or "(b)" only
hereinabove, the Company shall also pay to the Consultant all of the amounts
otherwise due or payable to the Consultant by the Company pursuant to Article
"4" hereinbelow until the Effective Termination Date as an Advance. In addition,
and should it then be either agreed by the Company or determined, by arbitration
in accordance with Article "8" hereinbelow that the Consultant had, in fact,
appropriately terminated this Agreement for cause, the Company shall then be
obligated to provide and pay to the Consultant all of the amounts which comprise
the Severance Package in the manner as set forth in section "3.2" hereinabove.
3.5 DISABILITY OR DEATH AND ADVANCE. Notwithstanding any other provision of this
Agreement, this Agreement may be terminated at any time by any Party within 30
calendar days after the death or disability of the Consultant, as a without
fault termination (the resulting effective date of any such termination being
herein also the "EFFECTIVE
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TERMINATION XXXX"). For the purposes of this Agreement the term "DISABILITY"
shall mean the Consultant shall have been unable to provide the General Services
contemplated under this Agreement for a period of 180 calendar days, whether or
not consecutive, during any 360 calendar day period, due to a physical or mental
disability. A determination of disability shall be made by a physician
satisfactory to both the Consultant and the Company; provided that if the
Consultant and the Company do not agree on a physician, the Consultant and the
Company shall each select a physician and these two together shall select a
third physician whose determination as to disability shall be binding on al!
Parties. In the event that the Consultant's employment is terminated by death or
because of disability pursuant to this Agreement, the Company shall pay to the
estate of the Consultant or to the Consultant, as the case may be, all amounts
to which the Consultant would otherwise be entitled under Article "4"
hereinbelow until the Effective Termination Date.
3.6 ADDITIONAL SEVERANCE UPON CESSATION AS PRESIDENT. Notwithstanding any other
provision of this Agreement, and in consideration of the Consultant's agreement
to accept and maintain the responsibilities imposed upon his position as
President of both Companies commencing during the early stages of development
Petrogen, Inc. and continuing from the effective date of the Underlying
Agreement, it is hereby acknowledged and agreed that, should the Consultant's
position as President of the Company cease or be terminated for any reason
whatsoever subsequent to the Effective Date of this Agreement and including,
without limitation, by virtue of the Consultant's resignation as President of
the Company, then the Company shall be obligated to pay to the Consultant an
additional severance cash payment of U.S. $50,000.00 within 10 business days of
the effective date of such cessation or termination as President of the Company.
3.7 EFFECT OF TERMINATION. Terms of this Agreement relating to accounting,
payments, confidentiality non-compete, accountability for damages or claims, and
all other matters reasonably extending beyond the terms of this Agreement and to
the benefit of the Parties hereto or for the protection of the Business of the
Companies shall survive the termination of this Agreement, and any matter of
interpretation thereto shall be given a wide latitude in this regard. In
addition, and without limiting the foregoing, each of sections "3.2", "3.3",
"3.4", "3.5" and "3.6" hereinabove shall, survive the termination of this
Agreement.
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ARTICLE 4
GENERAL SERVICES COMPENSATION OF THE CONSULTANT
4.1 FEE. Subject at all times to sections "4.2", "4.3" and "4.4" hereinbelow, it
is hereby acknowledged and agreed that the Consultant shall render the General
Services as defined hereinabove during the continuance of this Agreement and
shall thus be compensated on a monthly basis by the Company from the Effective
Date of this Agreement to the termination of the same by way of the payment by
the Company to the Consultant, or to the further order or direction of the
Consultant as the Consultant may determine, in the Consultant's sole and
absolute discretion, and advise the Company of prior to such payment, of the
gross monthly fee of U.S. $15,000.00 (the "FEE"). In this regard it is hereby
acknowledged and agreed that the within Fee represents the gross Fee which is
presently due and owing by the Company to the Consultant under the terms and
conditions of this Agreement. All such Fees will be due and payable by the
Company to the Consultant, or to the further order or direction of the
Consultant as the Consultant may determine, in the Consultant's sole and
absolute discretion, and advise the Company of prior to any such Fee payment, on
the final business day of the month of then monthly period of service during the
continuance of this Agreement; provided, however, that it is hereby acknowledged
and agreed that only U.S. $7,500.00 of the Fee will actually be paid by the
Company to the order or direction of the Consultant on a monthly basis from the
Effective Date hereof, with the balance of each monthly Fee being accrued,
without interest, until such time as the Company is in a position to be able to
afford to pay the Consultant either the balance of all Fees accrued or the
entire monthly Fee from future finding(s) and/or positive monthly cash flow.
4.2 INCREASE IN THE FEE. IT is hereby acknowledged that the proposed initial Fee
payments under this Agreement were negotiated as between the Parties hereto in
the context of the stage of development of the Companies existing as at the
effective date of the Underlying Agreement. Correspondingly, it is hereby
acknowledged and agreed that the Fee shall be reviewed and renegotiated at the
request of either Party on a reasonably consistent basis during the continuance
of this Agreement and, in the event that the Parties cannot agree, then the Fee
shall be increased on an annual basis by the greater of (i) 15% and (ii) the
percentage which is the average percentage of all increases to management
salaries and fees within the Companies during the previous 1.2-month period. Any
dispute respecting either the effectiveness or magnitude of the final Fee
hereunder shall be determined by arbitration in accordance with Article "8"
hereinbelow.
4.3 BONUS. It is hereby also acknowledged that the Board of Directors shall, in
good faith, consider the payment of reasonable industry standard annual bonuses
(each being a "BONUS") based upon the performance of the Companies and upon the
achievement by the Consultant and/or the Companies of reasonable management
objectives to be reasonably established by the Board of Directors (after
reviewing proposals with respect thereto defined by the Consultant in the
Consultant's capacity as the Chairman and Chief Executive Officer of each of the
Companies, and delivered to the Board of Directors by the Consultant at least 30
calendar days before the beginning of the relevant year of the Company (or
within 90 calendar days following the commencement of the Company's first
calendar year commencing on the Effective Date)). These management objectives
shall consist of both financial and subjective goals and shall be
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specified in writing by the Board of Directors, and a copy shall be given to the
Consultant prior to the commencement of the applicable year. The payment of any
such Bonus shall be payable no later than within 120 calendar days of the
ensuing year after any calendar year commencing on the Effective Date. Any
dispute respecting either the effectiveness or the magnitude of any Bonus
hereunder shall be determined by arbitration in accordance with Article "8"
hereinbelow.
4.4 REIMBURSEMENT OF EXPENSES. It is hereby acknowledged and agreed that the
Consultant shall also be reimbursed for all direct, reasonable expenses actually
and properly incurred by the Consultant for the benefit of the Companies
(collectively, the "'EXPENSES"'); and which Expenses, it is hereby acknowledged
and agreed, shall be payable by the Company to the order, direction and account
of the Consultant as the Consultant may designate in writing, from, time to
time, in the Consultant's sole and absolute discretion, as soon as conveniently
possible after the prior delivery by the Consultant to the Company of written
substantiation on account of each such reimbursable Expense.
4.5 PAID VACATION. It is hereby also acknowledged and agreed that, during the
continuance of this Agreement, the Consultant shall be entitled to six weeks
paid vacation (collectively, the "VACATION") during each and every year during
the continuance of this Agreement. In this regard it is further understood
hereby that the Consultant's entitlement to any such paid Vacation during any
year (including the initial year) during the continuance of this Agreement will
be subject, at all times, to the Consultant's entitlement to only a pro rata
portion of any such paid Vacation time during any year (including the initial
year) and to the effective date upon which, this Agreement is terminated prior
to the end of any such year for any reason whatsoever.
4.6 OPTIONS. Subject to the following, it is hereby further acknowledged and
agreed that, during the continuance of this Agreement, the Consultant will, be
granted, when available and subject to each of the rules and policies of the
Regulatory Authorities and applicable securities legislation, the terms and
conditions of the Company's existing stock option plan (the "OPTION PLAN'1) and
the final determination of the Board of Directors, acting reasonably, an
incentive stock option or stock options in and to the Company (each being an.
"OPTION") for the collective purchase of no less than an aggregate of up to
500,000 common shares of the Company (each an "OPTION SHARE"'); which, incentive
Option or Option(s) will be exercisable for a period of at least ten. years from
the date of granting at such minimum exercise price or prices as may be
determined at such date or dates of granting, or from time to time, in
accordance with the rules and policies of the Regulatory Authorities.
In this regard, and subject also to the following, it is hereby
acknowledged and agreed that the exercise of any such Option(s) shall be
subject, at all times, to such vesting and resale provisions as may then be
contained in the Company's Option Plan and as may be finally determined by the
Board of Directors, acting reasonably. Notwithstanding the foregoing, however,
it is hereby also acknowledged and agreed that:
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(a) in the event that this Agreement is terminated in accordance with
either of sections "3.2", "3.3", "3.4" or "3.5" hereinabove, such
portion of the within and remaining Option(s) which shall have
then vested in the foregoing manner and on the determined
Effective Termination Date shall, notwithstanding the remaining
exercise period of the Option(s), then be exercisable by the
Consultant for a period of five years following such Effective
Termination Date; and
(b) in the event of a Change in Control of the Company, the within
Option(s) shall vest immediately and in priority to any other
vesting provision contained in this Agreement and in any agreement
evidencing the within Option(s) subject, at all times, to the
terms and conditions of the Company's then Option Plan.
In this regard, and in accordance with the terms and conditions of the
final form of Option agreement, the Consultant hereby also acknowledges and
agrees that:
(a) NO OBLIGATION TO REGISTER ANY OPTION SHARES: the Consultant
understands that the Company is under no obligation to register
any Option Shares under the United States SECURITIES ACT OF 1933,
as amended (the "SECURITIES ACT'"), and that, in the absence of
any such registration, the Option Shares may not be sold unless
they are sold pursuant to an exemption from registration under the
Securities Act. Furthermore, the Consultant fully understands that
the Option Shares may not be registered under the Securities Act
and that they will be issued in reliance upon an exemption which
is available only if the Consultant acquires such Option Shares
for investment and not with a view to distribution.. The
Consultant is familiar with the phrase "acquired for investment
and not with a view to distribution" as it relates to the
Securities Act and the special meaning given to such term in
various releases of the United States Securities and Exchange
Commission; and
(b) DISPOSITION OF OPTION SHARES: the Company is under no obligation
to comply, or to assist the Consultant in complying with, any
exemption from such registration requirement, including supplying
the Consultant with any information necessary to permit routine
sales of the Option Shares under Rule 144 of the United States
Securities and Exchange Commission (the "RULE "'). The Consultant
also understands that, with respect to the Rule, routine sales of
securities made in reliance upon such Rule only can be made in
limited amounts in accordance with the terms and condition of the
Rule, and. that in cases in which the Rule is inapplicable,
compliance with either Regulation A or another disclosure
exemption under the Securities Act will be required. Thus, the
Option Shares will have to be held indefinitely in the absence of
registration under the Securities Act or an exemption from,
registration. The Consultant also acknowledges and understands
that:
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(i) the Option Shares are restricted securities within the
meaning of Rule 144;
(ii) the exemption from registration under Rule 144 will not be
available in any event for at least one year from the date of
purchase and payment of the Option Shares by the Consultant,
and even then will not be available unless (A) a public
trading market then exists for the common stock of the
Company, (B) adequate Information concerning the Company is
then available to the public and (C) other terms and
conditions of Rule 144 are complied with; and
(iii)any sale of the Option Shares may be made by the Consultant
only in limited amounts in accordance with such terms and
conditions.
The Consultant further acknowledges and understands that, without
in anyway limiting the acknowledgements and understandings as set
forth hereinabove, the Consultant agrees that the Consultant shall
in no event make any disposition of all or any portion of the
Option Shares which the Consultant may acquire hereunder unless
and until;
(iv) there is then in effect a "REGISTRATION STATEMENT" under the
Securities Act covering such proposed disposition and such
disposition is made in accordance with said Registration
Statement; or
(v) (A) the Consultant shall have notified the Company of the
proposed disposition and shall have furnished the Company
with a detailed statement of the circumstances surrounding
the proposed disposition, (B) the Consultant shall have
furnished the Company with an opinion of the Consultant's own
counsel to the effect that such disposition will not require
registration of any such Option Shares under the Securities
Act and (C) such opinion of the Consultant's counsel shall
have been concurred in by counsel for the Company and the
Company shall have advised the Consultant of such
concurrence.
4.7 ADDITIONAL OPTIONS, Subject to each of the terms and conditions as set forth
in section "4.6" hereinabove and in the final form of Option agreement
determining the same, it is hereby also acknowledged and agreed that, subsequent
to the initial year from the Effective Date and during each year during the
ongoing continuance of this Agreement, the Consultant shall also be compensated
by the Company from the commencement of each such year of this Agreement to the
termination of the same by way of the granting by the Company to the Consultant,
again subject to each of the rules and policies of the Regulatory Authorities
and applicable securities legislation, the terms and conditions of the Company's
existing Option Plan and the final determination of the
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Board of Directors, acting reasonably, a further incentive stock option or stock
options in and to the Company (each being an "ADDITIONAL OPTION") for the
collective purchase of not less than a further aggregate of up to 500,000 Option
Shares of the Company for each such year of this Agreement; and which further
incentive Additional Option or Additional Option(s) will be exercisable for a
period of at least ten years from the date of granting at an exercise price per
Option Share underlying any such Additional Option determined at up to 40% below
the then ten-day trading average of the Company's shares on any recognized
exchange in North America immediately prior to the date of granting; and which
Option or Option(s), subject to the final form of Option agreement, shall,
unless otherwise determined by the Board of Directors, acting reasonably, vest
not less than on an equivalent basis quarterly during the first year of the
exercise period of any such Additional Option and based upon the prior
attainment by the Companies of certain development milestones which shall be
agreed to by the Consultant and the Company in advance of the granting of any
such Additional Option. Any dispute respecting either the granting or the terms
of any Additional Options hereunder shall be determined by arbitration in
accordance with Article "8" hereinbelow.
4.8 FOLLOW-ON OPTIONS. IT is hereby further acknowledged and agreed that, during
the continuance of this Agreement, and in addition to the Option, and the
Additional Options hereunder, the Consultant will also be granted, from time to
time and. when applicable, further incentive stock Options in and to the Company
(each such. Option being herein a "FOLLOW-ON OPTION'") equal to 25% of any
incentive stock options which are heretofore granted by the Company after the
Effective Date hereof to any individuals comprising the following executive
positions in and to the Company (collectively, the "EXECUTIVE"'): (that being to
either of the Chairman (currently the Consultant), the Chief Executive Officer
(currently the Consultant), the President (currently Xx. Xxxxxxx Xxxxx), any
Executive Vice-President (currently Messrs. Xxxxxxx Xxxxxxxx and Xxxxxxx
Xxxxxxx); and on the same terms and conditions PRO TANTA. Any dispute respecting
either the effectiveness or magnitude of any such Follow-on Option to be granted
hereunder shall be determined by arbitration in accordance with Article "8"
hereinbelow.
4.9 BENEFITS. It is hereby acknowledged and agreed that, during the continuance
of this Agreement, the Consultant shall be entitled to participate fully in each
of the Companies' respective medical services plans and management and employee
benefits program(s) (collectively, the "BENEFITS7").
ARTICLE 5
ADDITIONAL OBLIGATIONS OF THE CONSULTANT
5.1 REPORTING. At such time or times as may be required by the Board of
Directors of the Company, acting reasonably, the Consultant will provide the
Board of Directors with such information concerning the results of the
Consultant's General Services and activities hereunder for the previous month as
the Board of Directors may reasonably require.
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5.2 NO CONFLICT, NO COMPETITION AND NON-CIRCUMVENTION. During the continuance of
this Agreement, and other than the Consultant's existing relationship with
Petrogen Internationa], Ltd., a non-reporting company affiliated with Petrogen,
Inc., the Consultant shall not engage in any business or activity which
reasonably may detract from or conflict with the Consultant's respective duties
and obligations to the Companies as set forth in this Agreement without the
prior written consent of the Board of Directors of the Company. In addition,
during the continuance of this Agreement and for a period of at least six months
following the termination of this Agreement for any reason whatsoever the
Consultant shall not engage in any business or activity whatsoever which
reasonably may be determined by the Board of Director, in its sole and absolute
discretion, to compete with any portion of the Business interests as
contemplated hereby without the prior written consent of the Board of Directors.
Furthermore, the Consultant hereby acknowledges and agrees, for a period of at
least six months following the termination of this Agreement for any reason
whatsoever, not to initiate any contact or communication directly with either of
the Companies or any of their respective subsidiaries, as the case may be,
together with each of their respective directors, officers, representatives,
agents or employees, without the prior written consent of the Board of Directors
and, notwithstanding the generality of the foregoing, further acknowledges and
agrees, even with the prior written consent of the Board of Directors to such
contact or communication, to limit such contact or communication to discussions
outside the scope of any confidential information (as hereinafter determined).
For the purposes of the foregoing the Consultant hereby recognizes and. agrees
that a breach by the Consultant of any of the covenants herein contained would
result in. irreparable harm and significant damage to the Companies that would
not be adequately compensated for by monetary award. Accordingly, the Consultant
agrees that, in the event of any such breach, in addition to being entitled as a
matter of right to apply to a Court of competent equitable jurisdiction for
relief by way of restraining order, injunction, decree or otherwise as may be
appropriate to ensure compliance with the provisions hereof, the Consultant will
also be liable to the Companies, as liquidated damages, for an amount equal to
the amount received and earned by the Consultant as a result of and with respect
to any such breach. The Parties hereby acknowledge and agree that if any of the
aforesaid restrictions, activities, obligations or periods are considered by a
Court of competent jurisdiction as being unreasonable, the Parties agree that
said Court shall have authority to limit such restrictions, activities or
periods as the Court deems proper in the circumstances. In addition, the Parties
further acknowledge and agree that all restrictions or obligations in this
Agreement are necessary and fundamental to the protection of the Business
interests and are reasonable and valid, and all defenses to the strict
enforcement thereof by the Consultant are hereby waived.
5.3 CONFIDENTIALITY. The Consultant will not, except as authorized or required
by the Consultant's duties hereunder, reveal or divulge to any person or
companies any information, concerning the organization, business, finances,
transactions or other affairs of the Companies or of any of the Companies'
respective subsidiaries which may come to the Consultant's knowledge during the
continuance of this Agreement, and the Consultant will keep in complete secrecy
all confidential information entrusted to the Consultant and will not use or
attempt to use any such information in any manner which may injure or cause loss
either directly or indirectly to the Companies' respective Business interests.
This restriction will continue to apply after the termination of this Agreement
without limit in point of time but will cease to apply to information or
knowledge which may come into the public domain.
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5.4 COMPLIANCE WITH APPLICABLE LAWS. The Consultant will comply with all
Canadian, U.S. and foreign laws, whether federal, provincial or state,
applicable to the Consultant's duties hereunder. and, in addition, hereby
represents and warrants that any information which the Consultant may provide to
any person or company hereunder will, to the best of the Consultant's knowledge,
information and belief, be accurate and complete in all material respects and
not misleading, and will, not omit to state any fact or information which would
be material to such person or company.
5.5 OPINIONS, REPORTS AND ADVICE OF THE CONSULTANT. The Consultant acknowledges
and agrees that all written and oral opinions, reports, advice and materials
provided by the Consultant to the Companies in connection with the Consultant's
engagement hereunder are intended solely for the Companies' benefit and for the
Companies' uses only, and that any such written and oral opinions, reports,
advice and information are the exclusive property of the Companies. In this
regard the Consultant covenants and agrees that the Companies may utilize any
such opinion, report, advice and materials for any other purpose whatsoever and,
furthermore, may reproduce, disseminate, quote from and refer to, in whole or in
part, at any time and in any manner, any such opinion, report, advice and
materials in the Companies' sole and absolute discretion. The Consultant further
covenants and agrees that no public references to the Consultant or disclosure
of the Consultant's role in respect of the Companies may be made by the
Consultant without the prior written consent of the Board of Directors of the
Company in each specific instance and, furthermore, that any such written
opinions, reports, advice or materials shall, unless otherwise required by the
Board, of Directors, be provided by the Consultant to the Companies in a form
and with such substance as would be acceptable for filing with and approval, by
any Regulatory Authority having jurisdiction over the affairs of the Company
from time to time.
5.6 CONSULTANT'S BUSINESS CONDUCT. The Consultant warrants that the Consultant
shall conduct the business and other activities in a manner which is lawful and
reputable and which brings good repute to the Companies, the Business interests
and the Consultant. In particular, and in this regard, the Consultant
specifically warrants to provide the General Services in a sound and
professional manner such that the same meets superior standards of performance
quality within the standards of the industry or as set by the specifications of
the Companies. In the event that either of the Companies has a reasonable
concern that the business as conducted by the Consultant is being conducted in a
way contrary to law or is reasonably likely to bring disrepute to the Business
interests or to the Companies' or the Consultant's reputation, the Companies may
require that the Consultant make such alterations in the Consultant's business
conduct or structure, whether of management or Board representation or
Consultant or sub-licensee representation, as the Board of Directors may
reasonably require, in its sole and absolute discretion, failing which the
Company, in its sole and absolute discretion, may terminate this Agreement upon
30 calendar days' prior written notice to the Consultant. In the event of any
debate or dispute as to the reasonableness of the Board of Directors of the
Company's request or requirements, the judgment of the Board of Directors shall
be deemed correct until such time as the matter has been determined by
arbitration in accordance with Article "8" hereinbelow.
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ARTICLE 6
INDEMNIFICATION, INSURANCE AND LEGAL PROCEEDINGS
6.1 INDEMNIFICATION. The Companies hereby agree to indemnify and save harmless
the Consultant from and against any and all losses, claims., actions, suits,
proceedings, damages, liabilities or expenses of whatever nature or kind and to
the extent allowed by law and including, without limitation, any investigation
expenses incurred by the Consultant, to which the Consultant may become subject
by reason only of the performance by the Consultant of the General Services
under this Agreement; provided, however, that this indemnity shall only apply if
the General Services are performed faithfully, diligently, to the best of the
Consultant's abilities and in the best interests of the Companies. This
indemnity will not. apply in respect of the Consultant in the event and to the
extent that a Court of competent jurisdiction in a final judgment shall
determine that the Consultant was grossly negligent or guilty of willful
misconduct.
In case any action is brought against the Consultant in respect of
which indemnity may be sought against either of the Parties hereto, the
Consultant will give the Company prompt written, notice of any such action of
which the Consultant has knowledge and the Company will undertake the
investigation and defense thereof on behalf of the Consultant, including the
prompt employment of counsel and the payment of ail expenses. Failure by the
Consultant to so notify shall not relieve the Companies of the Companies'
obligation of indemnification hereunder unless (and only to the extent that)
such failure results in a forfeiture by the Companies of substantive rights or
defenses. No admission of liability and no settlement of any action shall be
made without the consent of each of the Parties hereto, such consent not to be
unreasonable withheld. Notwithstanding that the Company will undertake the
investigation and defense of any action, the Consultant will have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel will be at the expense of the
Consultant unless such counsel has been authorized by the Company, the Company
has not assumed the defense of the action within a reasonable period of time
after receiving notice of the action, the named parties to any such action
include that the Consultant shall have been advised by counsel that there may be
a conflict of interest between any Party hereto or there are one or more legal
defenses available to the Consultant which are different from or in addition to
those available to the Companies.
If for any reason other than the gross negligence or bad faith of the
Consultant being the primary cause of the loss claim, damage, liability, cost or
expense, the foregoing indemnification is unavailable to the Consultant or
insufficient to hold the Consultant harmless, the Companies shall contribute to
the amount paid or payable by the Consultant as a result of any and all such
losses, claim, damages or liabilities in such proportion as is appropriate to
reflect not only the relative benefits received by the Companies on the one hand
and the Consultant on the other, but also the relative fault of the Companies
and the Consultant and other equitable considerations which may be relevant.
Notwithstanding the foregoing, the Companies shall in any event contribute to
the amount paid or payable by the Consultant as a result of the loss, claim.,
damage, liability, cost or expense (other than a loss, claim, damage, liability,
cost or expenses, the
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primary cause of which is the gross negligence or bad faith of the Consultant),
any excess of such amount over the amount of the fees actually received by the
Consultant hereunder.
6.2 INSURANCE. During the continuance of this Agreement it is hereby
acknowledged and agreed that the Company will use its best efforts to seek and
obtain directors' and officers' liability insurance (collectively, the
"INSURANCE") for its Board of Directors and Senior Officers which in no case
shall be less than the insurance which a reasonable and prudent businessman
carrying on a similar line of business would acquire from time to time. In
connection with the foregoing it is hereby further acknowledged and agreed that
any such Insurance shall be placed with a reputable and financially secure
insurance carrier and shall include the Company as an additional insured and
shall provide primary coverage with respect to the activities contemplated by
this Agreement. Furthermore, it is also intended that any such Insurance
policy(ies) shall include severability of interest and cross-liability
provisions and shall provide that the policy(ies) shall not be canceled or
materially altered except upon at least 30 calendar days' prior written notice
to each of the relevant parties thereto.
6.3 NO INDEMNIFICATION. This indemnity will not apply in respect of an
Indemnified Party in the event and to the extent that a Court of competent
jurisdiction in a final judgment shall determine that the Indemnified Party was
grossly negligent or guilty of willful misconduct.
6.4 CLAIM OF INDEMNIFICATION. The Parties hereto agree to waive any right they
might have of first requiring the Indemnified Party to proceed against or
enforce any other right, power, remedy, security or claim payment from any other
person before claiming this indemnity.
6.5 NOTICE OF CLAIM. In case any action is brought against an Indemnified Party
in respect of which indemnity may be sought against either of the Parties
hereto, the Indemnified Party will give both Parties hereto prompt written
notice of any such action of which the Indemnified Party has knowledge and the
relevant Party will undertake the investigation and defense thereof on behalf of
the Indemnified Party, including the prompt employment of counsel acceptable to
the Indemnified. Party affected and the relevant Party and the payment of all
expenses. Failure by the Indemnified Party to so notify shall not relieve the
relevant Party of such relevant Party's obligation of indemnification hereunder
unless (and only to the extent that) such failure results in a forfeiture by the
relevant Party of substantive rights or defenses.
6.6 SETTLEMENT. No admission of liability and no settlement of any action shall,
be made without the consent of each of the Parties hereto and. the consent of
the Indemnified Party affected, such consent not to be unreasonable withheld.
6.7 LEGAL PROCEEDINGS. Notwithstanding that the relevant Party will undertake
the investigation and defense of any action, an Indemnified Party will have the
right to employ separate counsel in any such action and participate in the
defense thereof,
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but the fees and expenses of such counsel will be at the expense of the
Indemnified Party unless:
(a) such counsel has been authorized by the relevant Party;
(b) the relevant Party has not assumed the defense of the action
within a reasonable period of time after receiving notice of the
action;
(c) the named, parties to any such action include that any Party
hereto and the Indemnified Party shall have been advised by
counsel that there may be a conflict of interest between any Party
hereto and the Indemnified Party; or
(d) there are one or more legal defenses available to the Indemnified
Party which are different from or in addition to those available
to any Party hereto.
6.8 CONTRIBUTION. IF for any reason other than the gross negligence or bad faith
of the Indemnified Party being the primary cause of the loss claim., damage,
liability, cost or expense, the foregoing indemnification is unavailable to the
Indemnified Party or insufficient to hold them harmless, the relevant Party
shall contribute to the amount paid or payable by the Indemnified Party as a
result of any and all such losses, claim, damages or liabilities in such
proportion as is appropriate to reflect not only the relative benefits received
by the relevant Party on the one hand and the Indemnified Party on the other,
but also the relative fault of relevant Party and the Indemnified Party and
other equitable considerations which may be relevant. Notwithstanding the
foregoing, the relevant Party shall in any event contribute to the amount paid
or payable by the Indemnified Party, as a result of the loss, claim, damage,
liability, cost or expense (other than, a loss, claim, damage, liability, cost
or expenses, the primary cause of which is the gross negligence or bad faith of
the Indemnified Party), any excess of such amount over the amount of the fees
actually received by the Indemnified Party hereunder.
ARTICLE 7
FORCE MAJEURE
7.1 EVENTS. If either Party hereto is at any time either during this Agreement
or thereafter prevented or delayed in complying with any provisions of this
Agreement by reason of strikes, walk-outs, labor shortages, power shortages,
fires, wars, acts of God, earthquakes, storms, floods, explosions, accidents,
protests or demonstrations by environmental lobbyists or native rights groups,
delays in transportation, breakdown of machinery, inability to obtain necessary
materials in the open market, unavailability of equipment, governmental
regulations restricting normal operations, shipping delays or any other reason
or reasons beyond the control of that Party, then the time limited for the
performance by that Party of its respective obligations hereunder shall be
extended by a period of time equal, in length to the period of each such
prevention or delay.
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7.2 NOTICE. A Party shall within three calendar days give notice to the other
Party of each event OF FORCE MAJEURE under section "7.1" hereinabove, and upon
cessation of such event shall furnish the other Party with notice of that event
together with particulars of the number of days by which the obligations of
that Party hereunder have been extended by virtue of such event OF FORCE MAJEURE
and all preceding events OF FORCE MAJEURE.
ARTICLE 8
ARBITRATION
8.1 MATTERS FOR ARBITRATION. Except for matters of indemnity or in the case of
urgency to prevent material, harm to a substantive right or asset, the Parties
agree that all questions or matters in dispute with respect to this Agreement
shall, be submitted to arbitration pursuant to the terms hereof. This provision
shall not prejudice a Party from seeking a Court order or assistance to garnish
or secure sums or to seek, summary remedy for such matters as counsel may
consider amenable to summary proceedings.
8.2 NOTICE. It shall be a condition precedent to the right of any Party to
submit any matter to arbitration pursuant to the provisions hereof that any
Party intending to refer any matter to arbitration shall have given, not less
than five business days' prior written notice of its intention to do so to the
other Parties together with particulars of the matter in dispute. On the
expiration of such live business days the Party who gave such notice may proceed
to refer the dispute to arbitration as provided for in section "8.3"
hereinbelow.
8.3 APPOINTMENTS. The Party desiring arbitration shall appoint one arbitrator,
and shall notify the other Parties of such appointment, and the other Parties
shall, within five business days after receiving such notice, appoint an.
arbitrator, and the two arbitrators so named, before proceeding to act, shall,
within five business days of the appointment of the last appointed arbitrator,
unanimously agree on the appointment of a third arbitrator, to act with them and
be chairperson of the arbitration herein provided for. If the other Parties
shall fail to appoint an arbitrator within five business days after receiving
notice of the appointment of the first arbitrator, and if the two arbitrators
appointed by the Parties shall be unable to agree on. the appointment of the
chairperson, the chairperson shall be appointed in accordance with the
Arbitration Act. Except as specifically otherwise provided in this section, the
arbitration herein provided for shall be conducted in accordance with such
Arbitration Act. The chairperson, or in the case where only one arbitrator is
appointed, the single arbitrator, shall fix a time and place for the purpose of
hearing the evidence and representations of the Parties, and the chairperson,
shall preside over the arbitration and determine all questions of procedure not
provided for by the Arbitration Act or this section. After hearing any evidence
and representations that the Parties may submit, the single arbitrator, or the
arbitrators, as the case may be, shall make an award and reduce the same to
writing, and deliver one copy thereof to each of the Parties. The expense of the
arbitration shall be paid as specified in the award.
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8.4 AWARD. The Parties agree that the award of a majority of the arbitrators, or
in the case of a single arbitrator, of such arbitrator, shall be final and.
binding upon each of them.
ARTICLE 9
GENERAL PROVISIONS
9.1. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement to date
between the Parties hereto and supersedes every previous agreement, expectation,
negotiation, representation or understanding, whether oral or written, express
or implied, statutory or otherwise, between the Parties with, respect to the
subject matter of this Agreement and including, without limitation, the terms
and conditions of the Underlying Agreement.
9.2 NO ASSIGNMENT. This Agreement may not be assigned by any Party hereto except
with the prior written consent of the other Parties.
9.3 NOTICE. Each notice, demand or other communication required or permitted to
be given under this Agreement shall be in writing and shall be sent by prepaid
registered mail deposited in a recognized post office and addressed to the Party
entitled to receive the same, or delivered to such Party, at the address for
such Party specified on the front page of this Agreement, The date of receipt of
such notice, demand or other communication shall be the date of delivery thereof
if delivered, or, if given by registered mail as aforesaid, shall be deemed
conclusively to be the third business day after the same shall have been so
mailed, except in the case of interruption of postal services for any reason
whatsoever, in which case the date of receipt shall be the date on which the
notice, demand or other communication is actually received by the addressee. Any
Party may at any time and from time to time notify the other Parties in writing
of a change of address and the new address to which notice shall be given to it
thereafter until further change.
9.4 TIME OF THE ESSENCE. Time will be of the essence of this Agreement.
9.5 ENUREMENT, This Agreement will enure to the benefit of and will be binding
upon the Parties hereto and their respective heirs, executors, administrators
and assigns.
9.6 CURRENCY. Unless otherwise stipulated, all payments required to be made
pursuant to the provisions of this Agreement and all money amount references
contained herein are in lawful currency of the United States.
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9.7 FURTHER ASSURANCES. The Parties will from time to time after the execution
of this Agreement make, do, execute or cause or permit to be made, done or
executed, all such further and other acts, deeds, things, devices and assurances
in law whatsoever as may be required to carry out the true intention and to give
full force and effect to this Agreement.
9.8 REPRESENTATION AND COSTS. IT is hereby acknowledged by each of the Parties
hereto that Xxxxxx Xxxxxx, Barristers and Solicitors, and the law office of Xxxx
& Xxxx, PC, act solely for the Companies, and, correspondingly, that the
Consultant has been required by each of Xxxxxx Xxxxxx, the law office of Xxxx &
Xxxx, PC and the Companies to obtain independent legal advice with respect to
its review and execution, of this Agreement. In addition, it is hereby further
acknowledged and agreed by the Parties hereto that Xxxxxx Xxxxxx, Barristers and
Solicitors, and certain or all of its principal owners or associates, from Lime
to time, may have both an economic or shareholding interest in and to Companies
and/or a fiduciary duty to the same arising from either a directorship,
officership or similar relationship arising out of the request of the Companies
for certain of such, persons to act in a similar capacity while acting for the
Companies as counsel. Correspondingly, and even where, as a result of this
Agreement, the consent of each Party hereto to the role and capacity of Xxxxxx
Xxxxxx, Barristers and Solicitors, and its principal owners and associates, as
the case may be, is deemed to have been received, where any conflict or
perceived conflict may arise, or be seen to arise, as a result of any such
capacity or representation, each Party hereto acknowledges and agrees to, once
more, obtain independent legal advice in respect of any such conflict or
perceived conflict and, consequent thereon, Xxxxxx Xxxxxx, Barristers and
Solicitors, together with any such principal owners or associates, as the case
may be, shall be at liberty at any time to resign any such position if it or any
Party hereto is in any way affected or uncomfortable with any such capacity or
representation. Each Party to this Agreement will also bear and pay its own
costs, legal and otherwise, in connection with its respective preparation,
review and execution of this Agreement and, in particular, that the costs
involved in the preparation of this Agreement, and all documentation necessarily
incidental thereto, by Xxxxxx Xxxxxx, Barristers and Solicitors, and the law
office of Xxxx & Xxxx, PC shall be at the cost of the Companies.
9.9 APPLICABLE LAW. The situs of this Agreement is Vancouver, British Columbia,
and. for all purposes this Agreement will be governed exclusively by and
construed and enforced in accordance with the laws and Courts prevailing in the
Province of British Columbia.
9.10 SEVERABILITY AND CONSTRUCTION. Each Article, section, paragraph, term and
provision of this Agreement, and any portion thereof, shall be considered
severable, and if, for any reason, any portion, of this Agreement is determined
to be invalid, contrary to or in conflict with any applicable present or future
law, rule or regulation in a final unappealable ruling issued by any court,
agency or tribunal with valid jurisdiction in a proceeding to which any Party
hereto is a party, that ruling shall not impair the operation of, or have any
other effect upon, such other portions of this Agreement as may remain otherwise
intelligible (all of which shall remain binding on the Parties and continue to
be given full force and effect as of the date upon which the ruling becomes
final).
Amended Management Consulting Services Agreement
Petrogen Corp.
-25-
9.11 CAPTIONS. The captions, section numbers and Article numbers appearing in
this Agreement are inserted for convenience of reference only and shall in no
way define, limit, construe or describe the scope or intent of this Agreement
nor in any way affect this Agreement.
9.12 COUNTERPARTS. This Agreement may be signed by the Parties hereto in as many
counterparts as may be necessary, and via facsimile if necessary, each, of which
so signed being deemed to be an original, and such counterparts together
constituting one and the same instrument and, notwithstanding the date of
execution, being deemed to bear the Effective Date as set forth on the front
page of this Agreement.
9.13 NO PARTNERSHIP OR AGENCY. The Parties have not created a partnership and
nothing contained in this Agreement shall in any manner whatsoever constitute
any Party the partner, agent or legal representative of the other Parties, nor
create any fiduciary relationship between them for any purpose whatsoever.
9.14 CONSENTS AND WAIVERS. No consent or waiver expressed or implied by either
Party in respect of any breach or default by the other in the performance by
such other of its obligations hereunder shall:
(a) be valid unless it is in writing and stated to be a consent or
waiver pursuant to this section;
(b) be relied upon as a consent to or waiver of any other breach or
default of the same or any other obligation;
(c) constitute a general waiver under this Agreement; or
(d) eliminate or modify the need for a specific consent or waiver
pursuant to this section in any other or subsequent instance.
Amended Management Consulting Services Agreement
Petrogen Corp.
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IN WITNESS WHEREOF the Parties hereto have hereunto set their
respective hands and seals as at the Effective Date as hereinabove determined.
The CORPORATE SEAL of
PETROGEN CORP.,
--------------
the Company herein, was hereunto affixed
in the presence of:
/s/ XXX XX. XXXXXXXX
--------------------
Authorized Signatory
The CORPORATE SEAL of
PETROGEN CORP.,
--------------
the Company herein, was hereunto affixed
in the presence of:
/s/ XXX XX. XXXXXXXX
--------------------
Authorized Signatory
SIGNED, SEALED
and DELIVERED by
XXXXX X. XXXXXXXX,
the Consultant herein, in the presence of:
/s/ XXXXX X. XXXXXXXX
---------------------- -----------------------
Witness Signature XXXXX X. XXXXXXXX
----------------------
Witness Address
-----------------------------
Witness Name and Occupation
Amended Management Consulting Services Agreement
Petrogen Corp.
