THIS AGREEMENT MADE AS OF THE 1st DAY OF JULY, 2005
Exhibit
10.17
THIS
AGREEMENT MADE AS OF THE 1st DAY OF JULY, 0000
XXXXXXX:
XXXXXXXX
XXXXXXX OIL LTD.
a
body
corporate
(hereinafter
referred to as "the Company")
OF
THE FIRST PART
-
and
-
EDMONTON
INTERNATIONAL AIRPORT HOTEL LTD.
D/B/A
CONCORDE CONSULTING
a
body
corporate
(hereinafter
referred to as “the Consultant”)
OF
THE SECOND PART
WHEREAS
the
Company is in the business of buying, selling, financing, developing or
otherwise dealing with oil and gas properties
AND
WHEREAS
the
Company has agreed to hire the Consultant to provide the services and expertise
of Xxxxxx Xxxxxxx (hereinafter referred to as “ the Consultant’s
Representative”) to manage and supervise all of the Company’s operations,
projects or joint ventures as the case may be.
AND
WHEREAS
the
Company considers the Consultant and the Consultant Representative to possess
a
unique background that consists of a special skills and expertise in a
combination of areas; such as the oil and gas industry, finance, regulatory,
and
administration areas of the Company’s business.
AND
WHEREAS
the
Company wishes to retain the aforementioned special and unique skills and
expertise of the Consultant and the Consultant’s Representative on a continuing
long term basis.
AND
WHEREAS
although
the Consultant has been providing similar services to the Company since January,
2005, and before that to the Company’s parent, Deep Well Oil & Gas
(hereinafter referred to as “DWOG”), given the recent events with DWOG and that
all parties wish to ensure the continued, undistracted services of the
Consultant for years into the future.
AND
WHEREAS
the
Company and DWOG recognize that a Change in Control (as hereinafter defined)
may
result in the departure or distraction of the Company's key management
personnel, including the Consultant, to the detriment of the Company and its
shareholders;
AND
WHEREAS
the
Board considers that it is imperative and in the best interests of the Company
and its shareholders that notwithstanding any Potential Change in Control (as
hereinafter defined), the Company be able to rely on the Consultant to continue
in its position;
AND
WHEREAS
to
induce the Consultant to remain under contract to the Company and to assure
the
Company of the continued attention and services of the Consultant
notwithstanding any Potential Change in Control, the parties hereto have
determined to enter into this Consulting Agreement;
AND
WHEREAS
it is
recognized by all parties that the more completely and longer that the Company
dominates the Consultant’s available time and resources, to the detriment of
other past, present, and prospective clients, projects and activities of the
Consultant, that it becomes increasingly more difficult for the Consultant
to
retain the level of service to its past and present clients and continue
marketing activities to develop new clients, therefore the Consultant’s present
and future business prospects will suffer as a result of entering into this
Agreement.
NOW
THEREFORE,
in
consideration of the mutual covenants contained herein, the Parties agree as
follows:
| 1 |
EFFECTIVE
DATE
|
Effective
July 1, 2005, the Consultant shall continue to provide the services as in the
past and as set out below and the Consultant’s Representative shall continue to
assume the responsibilities of President, Secretary, and Project Manager on
behalf of the Company with respect to each and every project undertaken by
the
Company until termination of this Agreement in accordance with the terms herein.
In addition, the Consultant and the Consultant’s Representative will be asked to
perform duties for Deep Well Oil & Gas, Inc. who, as of June 7, 2005,
acquired all of the common shares of the Company. It is acknowledged that this
is a continuation of the services supplied to the Company since January, 2005
and to Deep Well Oil & Gas, Inc. before that.
| 2 |
TERMS
OF CONTRACT
|
This
Agreement shall remain effective and the Consultant’s Representative shall
continue to provide his expertise and service as President, Secretary, and
Project Manager for the Company in regards to all matters undertaken on behalf
of the Company until terminated in accordance with the terms
herein.
| 3 |
FEES
|
| 3.1 |
The
Company will pay fees to the Consultant in the sum of ONE HUNDRED
AND
EIGHTY THOUSAND ($180,000.00) DOLLARS per annum in Canadian currency
(the
“Fee”) by equal monthly installments of FIFTEEN THOUSAND ($15,000.00)
DOLLARS (the “Monthly Fee”) each commencing on the last day of July, 2005
and continuing thereafter on the last day of each month up to and
including the last day of June, 2007, or until this Agreement is
otherwise
terminated in accordance with the terms set out herein. These Fees
do not
include any fees or remuneration that the Consultant or the Consultant’s
Representative receive for acting as a director of Deep Well Oil
&
Gas, Inc.
|
| 3.2 |
the
Company (directly or through DWOG) will grant the Consultant the
same
participation in all benefits or incentive programs, options, incentive
options, bonuses, deferred remuneration programs as it offers its
most
favoured remunerated senior employee, consultant or
contractor.
|
| 4 |
EXPENSES
|
The
Company shall reimburse the Consultant, at cost, for all third party, travel,
long distance, cellular, meal, meeting, rental, equipment and office expenses
incurred on behalf of the Company. Mileage will be charged at $0.50 per
kilometer escalating in accordance with the Canadian Revenue Agency
guidelines.
| 5 |
TERM
|
The
term
of this Agreement shall be for two (2) years commencing July 1, 2005, and shall
continue until June 30, 2007. At the end of the term herein, the contract shall
automatically renew for an additional six (6) month interval and thereafter
on
perpetual six (6) month intervals until such time as it may be terminated by
either party by way of a written notice delivered to the other party. Such
Notice shall be delivered to the other party at least three (3) months (“Notice
Period”) prior to the date of termination, and this agreement shall remain in
place and enforceable until the end of the Notice Period.
| 6 |
INDEPENDENT
CONTRACTOR
|
The
Consultant shall perform the services as an independent contractor. Nothing
contained in this Agreement shall be deemed to create any association,
partnership, joint venture, or relationship of principal and agent or employer
and employee between the parties hereto or to provide either party with the
right, power or authority, whether express or implied, to create any such duty
or obligation on behalf of the other party. The Consultant also agrees that
it
will not hold itself out as an affiliate of or partner, joint venturer,
co-principal or co-employer with the Company, by reason of the Agreement and
that the Consultant will not knowingly permit any of its employees, agents
or
representatives to hold themselves out as, or claim to be employees of the
Company by reason of the Agreement.
| 7 |
TERMINATION
|
This
Agreement will terminate and cease only upon:
| 7.1 |
receipt
of written notice as set out in Section 5 herein,
or
|
| 7.2 |
upon
the death of the Consultant’s Representative,
or
|
| 7.3 |
if
the Consultant’s Representative becomes physically or mentally disabled to
the extent that he can no longer carry out his duties as set forth
in this
Agreement.
|
| 8 |
TERMINATION
AFTER POTENTIAL OR REAL CHANGE IN
CONTROL
|
| 8.1 |
For
the purposes of this section, the following terms have the meanings
indicated:
|
| 8.1.1 |
"Voting
Shares" means any shares of capital stock of the Company or DWOG
entitled
to vote generally in the election of directors of the Company or
DWOG;
|
| 8.1.2 |
"Person"
includes any individual, firm, partnership, trust, trustee, executor,
administrator, legal personal representative, government, governmental
body or authority, corporation or other incorporated or unincorporated
organization;
|
| 8.1.3 |
"Change
in Control" means the occurrence at any time after the date of this
Agreement of any change in the holding, direct or indirect, of Voting
Shares as a result of which a Person, or group of Persons, or Persons
acting jointly or in concert, together with any associate or affiliate
of
any such Person or Persons, are in a position to exercise effective
control of the Company and for the purposes of this Agreement a Person,
or
group of Persons, or Persons acting jointly or in concert, together
with
any associate or affiliate of any such Person or Persons, shall be
deemed
to be in a position to exercise effective control of the Company
or DWOG
if;
|
| 8.1.3.1 |
any
Person, or group of Persons, or Persons acting jointly or in concert,
together with any associate or affiliate of any such Person or Persons,
(other than a trustee or other fiduciary holding securities under
an
employee benefit plan of the Company or DWOG), is or becomes the
beneficial owner, directly or indirectly, of any Voting Shares or
other
securities of DWOG. which directly or following conversion thereof
would
entitle the holder thereof to cast more than 15% of the votes outstanding
which could be cast in an election of directors of
DWOG;
|
| 8.1.3.2 |
pursuant
to a single election or appointment or a series of elections or
appointments over any period of 24 months from June 7, 2005 and after
the
date of this Agreement, those individuals who at the beginning of
such
period constituted the Boards of the Company and DWOG, together with
any
new or additional director or directors whose election or appointment
to
the Boards of the Company or DWOG has been approved by those of such
individuals then remaining as directors from the original Boards,
become
for any reason (other than the death, disability or retirement of
those
individuals, or any of them,) to constitute a minority of the Board
of the
Company or DWOG;
|
| 8.1.3.3 |
the
Board of DWOG by resolution duly adopted by the affirmative vote
of a
majority of the votes cast by the entire Board of DWOG, determines
that
for purposes of this Agreement a change in control of DWOG has occurred;
or
|
| 8.1.3.4 |
the
Company or DWOG disposes of a majority of the capital stock of the
Company
or DWOG which is entitled to vote generally in the election of directors
of the Company or DWOG, as the case may be, or of all or substantially
all
of the business and assets of the Company or DWOG to any Person other
than
a Person who is deemed to be an affiliate of the Company or
DWOG;
|
| 8.1.4 |
"Potential
Change in Control" means the occurrence at any date hereafter of
any one
of the following events:
|
| 8.1.4.1 |
any
Person publicly announces an intention to take actions which, if
carried
out, would constitute a Change in
Control;
|
| 8.1.4.2 |
the
Company or DWOG enters into an agreement or proposes to take action
which,
if carried out, would result in the occurrence of a Change in
Control;
|
| 8.1.4.3 |
any
Person, or group of Persons, or Persons acting jointly or in concert,
together with any associate or affiliate of any such Person or Persons,
acquires a holding, direct or indirect, of Voting Shares and/or other
securities in excess of the number which, directly or following conversion
thereof, would entitle the holders thereof to cast 15% of the votes
attaching to all Voting Shares; or
|
| 8.1.4.4 |
the
Board of the Company or the Board of DWOG, by resolution duly adopted
by
the affirmative vote of a majority of the votes cast by the entire
board
of the Company or DWOG, determines that for purposes of this Agreement
a
Potential Change in Control has
occurred.
|
| 8.1.5 |
"Involuntary
Termination" means any one of the following events if such event
occurs
within 24 months after a Change in
Control:
|
| 8.1.5.1 |
any
actual or express termination by the Company or DWOG of this Agreement
following any Change in Control which is not due to the death of
the
Consultant’s Representative or a condition of total and continuing
disability which renders the Consultant’s Representative incapable of
performing his essential job duties as set out in this Section 7.3
of this
Agreement;
|
| 8.1.5.2 |
any
change in the Consultant's or Consultant’s Representative’s title,
reporting relationship, responsibilities or authority as in effect
immediately prior to any Change in Control which adversely affects
to a
material degree his role in the management of the Company or
DWOG;
|
| 8.1.5.3 |
any
reduction in the Consultant’s Fees paid by the Company as in effect
immediately prior to any Change in Control or, if such Fees has been
subsequently increased at any time or from time to time, any reduction
in
such increased Fees;
|
| 8.1.5.4 |
a
failure or refusal of the Company to renew this Agreement after any
Change
in Control shall have occurred;
|
| 8.2 |
Upon
the occurrence of a Change in Control or a Potential Change in Control
the
Consultant shall have the right, exercisable by notice to the Company
within three months from the date on which the Change in Control
or
Potential Change in Control occurs, to terminate this Agreement.
The
expiry of the Consultant's rights under his Section 8.2 with respect
to
any particular Change in Control or a Potential Change in Control
will not
prevent the Consultant from exercising such right of termination
with
respect to any subsequent occurrence of a Change in Control or a
Potential
Change in Control.
|
| 8.3 |
Upon
the occurrence of an Involuntary Termination the Consultant shall
have the
right, exercisable by notice to the Company within three months from
the
date on which the Involuntary Termination occurs, to terminate this
Agreement. If the Consultant does not terminate this Agreement with
in
such period, his right to terminate the Agreement under this Section
8.3
with respect to such Involuntary Termination shall expire but this
Agreement will otherwise continue in full force and effect. The expiry
of
the Consultant's rights under his Section 8.3 with respect to any
particular Involuntary Termination will not prevent the Consultant
from
exercising such right of termination with respect to any subsequent
occurrence of an Involuntary
Termination.
|
| 8.4 |
If
the Consultant terminates
this Agreement pursuant to Section 8.2 or 8.3, the Consultant shall,
at
the request of the Company, continue its services with the Company
for a
period up to one month following such termination at its then existing
Fee
level to assist the Company in an orderly transition of management.
The
amount paid to the Consultant under this Section 8.4 will not reduce
the
amount payable under Section 8.5
|
| 8.5 |
If
the Consultant terminates this Agreement pursuant to Section 8.2
or 8.3,
the Company shall, within 10 days of notice to the
Company:
|
| 8.5.1 |
pay
to the Consultant all outstanding amounts for past Fees and
expenses;
|
| 8.5.2 |
an
amount equal to the amounts remaining under the Term set out in Section
5
at the rates set out in Section 3.1,
and
|
| 8.5.3 |
an
additional amount equaling :
|
[12
+ YE]
* [CMF ]
Where:
CMF
= the
Consultant's Monthly Fee at the time of the termination, or the Fees at the
time
of a Change in Control, if higher.
YE
= the
number of full years (each year being a period of 12 months) since February
6,
2004
If
[12 +
YE] exceeds 24, it shall be deemed to equal 24.
| 8.6 |
If,
in relation to Termination because of a Change in Control, a Potential
Change in Control or an Involuntary Termination, a dispute arises
regarding:
|
| 8.6.1 |
whether
or not an Involuntary Termination has
occurred;
|
| 8.6.2 |
the
validity, interpretation or enforcement of this Agreement;
or
|
| 8.6.3 |
the
right of the Consultant to receive any remuneration or payments referred
to in this Agreement:
|
the
Company shall, from time to time, on demand by the Consultant, pay all
reasonable legal fees and expenses incurred by the Consultant, acting reasonably
and in good faith, in contesting or disputing the Company's position or seeking
to obtain, enforce or retain any right, benefit or payment provided for in
this
Agreement;
| 8.7 |
The
Company shall use its best efforts to require any successor, whether
direct or indirect to all or substantially all of the business and/or
assets of the Company or DWOG to expressly agree to assume and to
perform
this Agreement in the same manner that the Company would have been
required to perform it if no such succession had occurred. If the
Company
fails to obtain such Agreement prior to the effective date of such
succession, the Consultant shall be entitled to terminate this Agreement
and receive the payments and benefits outlined in Section 8.3Error!
Reference source not found.
as
if the Consultant had terminated this Agreement upon an Involuntary
Termination.
|
| 8.8 |
The
parties confirm that the provisions of this Article 8 are reasonable
and
that the total amounts payable as outlined herein are reasonable
estimates
of the damages which will be suffered by the Consultant in the event
of a
Change in Control, Potential Change in Control or an Involuntary
Termination and shall not be construed as a penalty and shall not
be
reduced if the Consultant shall secure, or shall not pursue, alternative
consulting engagements following the termination of this Agreement
under
this Article 8.
|
| 9 |
CONSULTANT’S
DUTIES
|
The
Consultant covenants and agrees that it will provide the services of the
Consultant’s Representative on a non-exclusive basis that will:
| 9.1 |
serve
the needs of the Company for a President, Secretary, and Project
Manager
of the Company’s business.
|
| 9.2 |
serve
the needs of DWOG for Chief Financial Officer and
Secretary.
|
| 10 |
NOTICE
|
Notices
served in accordance with the provisions of the Agreement shall be in writing
and served in person to the other party or mailed postage prepaid:
To
the
Company:
Suite
510, Royal Bank Building,
00000
Xxxxxx Xxxxxx
Xxxxxxxx,
Xxxxxxx
X0X
0X0
To
the
Consultant:
Concorde
Consulting
c/o
XX
Xxx 00000
Xxxxxxxx,
XX X0X 0X0
Attention:
Xxxxxx Xxxxxxx
| 11 |
INDEMNITY
|
The
Company and DWOG shall continue the existing indemnity for the Consultant and
the Consultant’s Representative in the form as attached as Schedule
“A”.
| 12 |
COMPLETE
AGREEMENT
|
This
Agreement expresses the final Agreement between the Consultant and the Company
with respect to all matters herein and no representations, inducements, promises
or agreements or otherwise between the parties not embodied herein shall be
of
any force and effect. This Agreement shall not be altered, amended or qualified
except by a memorandum in writing, signed by both the Consultant and the
Company, and any alteration, amendment or qualification thereof shall be null
and void and shall not be binding upon any such party unless made and recorded
as aforesaid.
| 13 |
RETURN
OF PROPERTY
|
Upon
any
termination of this Agreement the Consultant shall at once deliver or cause
to
be delivered to the Company all books, documents effects, money, securities
or
other property belonging to the Company or for which the Company is liable
to
others, which are in the possession, charge, control or custody of the
Consultant and the Company and DWOG shall at once deliver or cause to be
delivered to the Consultant all books, documents effects, money, securities
or
other property belonging to the Consultant or for which the Consultant is liable
to others, which are in the possession, charge, control or custody of the
Company or DWOG. Recognizing that both Parties many have an interest in certain
notes, papers and documents, then a copy shall be provided to the other
Party.
| 14 |
ENUREMENT
|
This
Agreement shall enure to the benefit of and be binding upon the permitted
successors and assigns of the parties hereto.
| 15 |
GOVERNING
LAW
|
This
Agreement shall be construed and enforced in accordance with, and the rights
of
the parties shall be governed by, the laws of Alberta.
| 16 |
CONSTRUCTION
|
In
this
Agreement, except as otherwise expressly provided, all words and personal
pronouns relating thereto shall be read and construed as the number and gender
of the party or parties referred to in each case require and the verb shall
be
read and construed as agreeing with the required word and pronoun.
| 17 |
HEADINGS
|
The
division of this Agreement into paragraphs and the use of headings is for
convenience of reference only and shall not modify or affect the interpretation
or construction of this Agreement or any of its provisions.
| 18 |
TAXES
|
The
Consultant hereby warrants to the Company that it is, or will be, registered
for
GST and that its GST number will be on all invoices.
IN
WITNESS WHEREOF
the
Parties hereto have properly executed this Agreement as of the effective date
first above written.
NORTHERN
ALBERTA OIL LTD.
Per:
/s/
Xxxxx Xxxx
EDMONTON
INTERNATIONAL AIRPORT HOTEL LTD.
D/B/A
CONCORDE CONSULTING
Per:
/s/
Xxxxxx Xxxxxxx
Acknowledged
to by;
DEEP
WELL OIL & GAS, INC.
Per:
/s/
Xxxxx X. Xxxxxx
