CONSULTING AGREEMENT
This consulting agreement (the "Consulting Agreement") made as of the
9th day of May, 2000, by and between XXXXXXX XXXXX & CO., INC. with an office at
000 Xxxxxxxx Xxxxx Xxxx, Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000 ("PBCI") and
FIELDPOINT PETROLEUM CORP., 0000 Xxxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxx 00000
("FPPC").
WHEREAS, FPPC is an independent oil & gas company; and
WHEREAS, FPPC is a publicly traded entity under the rules of the
NATIONAL ASSOCIATION OF SECURITIES DEALERS and trades on the OTC ELECTRONIC
BULLETIN BOARD; and
WHEREAS, FPPC requires certain financial and business development
services; and
WHEREAS, PBCI is engaged in the business of providing consulting and
business development services and is desirous of performing such services for
FPPC; and
WHEREAS, FPPC and PBCI desire to memorialize their relationship in a
written document; and WHEREAS, the execution of this Agreement has been
approved by the Board of Directors of FPPC.
NOW THEREFORE IN CONSIDERATION OF THE MUTUAL COVENANTS HEREINAFTER
STATED, INTENDED TO BE LEGALLY BOUND, THE PARTIES HAVE AGREED AS FOLLOWS:
1. APPOINTMENT
FPPC hereby appoints PBCI as its non-exclusive consultant and business
development representative and hereby retains PBCI and PBCI accepts such
appointment and agrees to perform the services specified in a competent,
professional, and faithful manner upon the terms and conditions hereinafter set
forth.
2. TERM
The term of this Agreement shall commence upon PBCI's receipt of shares
described in Section 7(a)(I) hereof and continue for five (5) years thereafter,
subject to the right of either party hereto to terminate this Agreement for any
reason upon thirty (30) days written notice to the other party.
3. SERVICES
(a) PBCI shall assist in establishing and advising FPPC with respect to
general business planning, development and implementation of such plans and
strategies including the development and expansion of FPPC's present business
and new business ventures;
(b) PBCI shall assist FPPC in analyzing present corporate financial
needs and possible future financing and advise FPPC with respect to capital
structure;
(c) PBCI shall seek to identify merger, purchase, investment and
similar joint ventures and/or business combination candidates and assist FPPC in
the analysis, development, and completion of potential mergers, acquisitions,
investments and/or joint ventures which FPPC may consider;
(d) PBCI shall act, generally, as financial public relations advisor,
essentially acting as liaison between FPPC and its stockholders, as advisor and
liaison with respect to existing and potential market makers, broker-dealers,
underwriters and investors and as advisor with respect to the planning, design,
development, organization, writing and distribution of communications and
information, including but not limited to press releases, shareholder reports,
company profiles and other documents;
(e) PBCI shall assist in establishing and advising FPPC with respect to
shareholder meetings, interviews of FPPC's officers by the financial media and
interviews of FPPC's officers by analysts, market makers, broker-dealers and
other members of the financial community;
(f) PBCI shall seek to make FPPC, its management, its products and
services and its financial situation and prospects known to the oil & gas
industry, financial press and publications, broker-dealers, mutual funds,
institutional investors, market makers, analysts, investment advisors and other
members of the financial community as well as the financial media and the public
generally;
(g) To the extent requested by FPPC, PBCI shall assist FPPC in securing
funding, including through the exercise of warrants, options, and similar
rights, issued or to be issued;
(h) PBCI shall provide general consulting services on such matters as
may be requested by the Board of Directors of FPPC.
4. PERFORMANCE OF SERVICES
PBCI warrants and agrees:
(a) That it will render the services and perform its responsibilities
under this Agreement in accordance with high professional standards and will
make all reasonable efforts to use high levels of expertise; that the personnel
assigned to perform services under this Agreement shall have the appropriate
skills and expertise to efficiently perform such services; and that in carrying
out its responsibilities under this Agreement, PBCI agrees to assure that its
actions and performance of services are and shall be conducted in compliance
with all applicable laws, rules and regulations, including but not limited to
federal and state securities laws; and PBCI shall disclose to any and all
parties with whom it deals in accordance with its services on behalf of FPPC any
and all of its interest in FPPC, whether direct, indirect, beneficial,
contingent or otherwise;
(b) FPPC shall have no responsibility for the acts and conduct of PBCI
hereunder, whether filing of reports, forms or disclosures, and PBCI hereby
shall defend, indemnify and hold FPPC (which term for this Section 4(b) includes
FPPC's officers, directors, agents, shareholders, attorneys and representatives)
harmless for and against any and all liabilities, actions, claims, suits,
proceedings, demands, investigations, including costs, expenses and counsel
fees, incident to the performance of services by PBCI hereunder or due to any
failure of disclosure by PBCI to third parties as to its interest in FPPC or as
to information concerning FPPC or its failure to comply with all applicable
federal and state securities laws, exchanges' and commissions' rules and
regulations; provided such indemnity shall not apply to the extent any such
liability arises from or is substantially attributable to a negligent act or
material omission by FPPC;
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(c) That it shall not release any financial or other material
information or data about FPPC without first providing same to FPPC;
(d) That it shall not conduct meetings with financial analysts, merger,
acquisition, joint venture, investment opportunities or other business
combination candidates, and potential and existing customers without informing
FPPC in advance of the proposed meeting with the format or agenda of such
meeting and with complete copies of all reports and communications to be made
available at any such meeting to be provided prior thereto to FPPC;
(e) That it shall not release any information or data about FPPC to any
person selected or limited group of people or other entity, in the event PBCI is
or should have been aware that such information is material and has not
otherwise been generally released;
(f) That it shall restrict or cease, as directed by FPPC, all public
relations efforts, including all dissemination of information regarding FPPC
immediately upon receipt of instructions to that affect from FPPC; and after
notice by FPPC of a filing for a proposed public offering of its securities and
during any period of restriction on publicity, PBCI shall not engage in any
public relations efforts not in the normal course without written approval of
securities counsel for FPPC and counsel for underwriters, if any;
(g) PBCI shall not take any action which would in any way adversely
affect the reputation, standing or prospects of FPPC or would cause FPPC to be
in violation of applicable law;
(h) That it shall promptly supply FPPC prior to their use or
dissemination with complete copies of all stockholder reports and
communications; with all data and information to be supplied to any financial
analyst, broker-dealer, market maker, or other member of the financial community
and with all brochures or other materials relating to FPPC, its operations,
management, product, services, finances, proposals, properties, etc. PBCI shall
inform FPPC in advance in writing as to the persons or institutions to whom
release of any of the foregoing information or communications are to be made.
5. DUTIES OF FPPC
FPPC shall provide PBCI, on a regular and timely basis, with all
approved data and information about it, its subsidiaries, its management, its
products and services and its operations and shall advise PBCI of any facts
which would affect the accuracy of any data and information previously supplied
pursuant to this paragraph.
FPPC shall promptly supply PBCI with full and complete copies of all
filings with all federal and state securities agencies; with full and complete
copies of all stockholder reports and communications; with all data and
information supplied to any financial analyst, broker-dealer, market maker or
other member of the financial community and with all brochures or other sales
materials relating to its products or services. FPPC shall inform PBCI as to the
persons or institutions to whom release of any of the foregoing information or
communications have been made.
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6. REPRESENTATION AND INDEMNIFICATION
FPPC shall be deemed to have made a continuing representation of the
accuracy of any and all material facts, information and data which it supplies
to PBCI and acknowledges its awareness that PBCI will rely on such continuing
representation in disseminating such information and otherwise performing its
consulting functions. However, nothing herein is to be construed as alleviating
PBCI's due diligence obligations; and provided further nothing herein is to be
construed that information that subsequently changes or is updated was not
accurate at the time. Other than its knowledge of changes or updated materials,
PBCI, in the absence of notice in writing from FPPC, will rely on the continuing
accuracy of material, information and data. FPPC shall defend, indemnify and
hold PBCI (which term for this Section 6 includes PBCI's officers, directors,
agents, shareholders, attorneys and representatives) harmless for any and all
liabilities, actions, claims, suits, proceedings, demands, investigations,
including costs, expenses and counsel fees, incident to the providing to PBCI by
FPPC of materially false facts, information or data concerning itself or its
operations; provided such indemnity shall not apply to the extent any liability
arises from or is substantially attributable to a negligent act or material
omission by PBCI.
7. COMPENSATION
a) For the services of PBCI hereunder, FPPC agrees to pay to PBCI up to
510,000 shares of FPPC common stock, including warrants, for services rendered
under this Agreement and in lieu of PBCI's normal retainer. Said shares and
warrants are to be issued and are deemed earned upon the occurrence of the
following events:
i) 160,000 shares of restricted FPPC common stock due
upon execution of this Agreement, in such
denominations and form acceptable to PBCI;
ii) Warrants, in the form annexed as Exhibit "A" to this
Agreement, expiring May 8, 2005 and entitling PBCI or
its designees to purchase 350,000 shares at a
purchase price of $1.68 per share. Said warrants are
exercisable into a the specified number of common
shares as described below, upon FPPC achieving the
following milestones:
a) 150,000 warrants upon the successful
exercise of at least 500,000 of the
currently outstanding Class A warrants, held
by clients of X.X. XxXxx Securities;
b) 200,000 warrants upon FPPC completing an
equity funding of at least a gross amount of
$5 million.
b) In addition to the payments provided in subsection 7(a) hereof, PBCI
shall be entitled to additional success fees in connection with any
acquisitions, divestitures, financing and other similar transactions not so
defined in subsection 7(a) above when consummated by FPPC in which PBCI has been
involved for purposes of negotiation or evaluation on behalf of FPPC. Any
transaction which is so initiated, notwithstanding consummation date, within two
(2) years of the termination of this Agreement shall be subject to this success
fee, which success fee to be negotiated between the parties, and agreed to in
writing via an instrument separate from this Agreement.
c) As further inducement to PBCI to serve FPPC as provided in Section 3
above, FPPC covenants and agrees that, as more fully set forth in Exhibit "A",
upon written request of PBCI, FPPC shall cause to be filed a Registration
Statement under the Securities Act of 1933, as amended, registering the shares
acquired via the warrant exercise. The aforementioned registrations will be at
the expense of FPPC.
8. EXPENSES
PBCI is expected to incur reasonable out-of-pocket expenses, including
telephone charges, for providing the services for FPPC as provided herein.
Reimbursement for such expenses shall be subject to such reasonable budget
previously approved by FPPC. Any anticipated significant expenses (significant
encompasses any expenses exceeding $500.00) must be submitted to FPPC for prior
written approval.
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For other expenses on behalf of FPPC other than out-of-pocket expenses,
such as third party work (lay-outs, xxxx-ups, printing, art, photograph or
graphics), for FPPC annual reports, interim shareholder reports, product
brochures, press releases, etc. FPPC shall either pay such third-party vendors
or reimburse PBCI if previously approved by FPPC as to the vendor and the work.
9. RELATIONSHIP OF PARTIES
PBCI is responsible for compensation of its agents, employees and
representatives, as well as all applicable withholding therefrom and taxes
thereon. This Agreement does not establish any partnership, joint venture or
other business entity or association between the parties and neither party is
intended to have any interest in the business or property of the other except
for the issuance of shares to PBCI as set forth in Section 7 hereto. Except as
expressly agreed herein neither party shall have the authority to obligate,
commit or bind the other in any manner whatsoever, except that should PBCI
desire to subcontract services, FPPC shall be notified in writing and approve of
such subcontractor relationship before any services are rendered or compensation
is assigned to subcontractor.
10. DISCLOSURE OF INFORMATION
PBCI acknowledges that, in and as a result of the Agreement, it will be
making use of, acquiring and/or adding to confidential or proprietary
information and of a special and unique nature and value to FPPC, including, but
not limited to, the nature and material terms of business opportunities and
proposals available to FPPC, the names and addresses of FPPC customers and
suppliers, operating procedures, methods and systems, financial records of FPPC
and other information, data and documents now existing or later acquired by PBCI
regardless of whether any such information, data or documents qualify as a
"trade secret" under applicable federal or state laws (collectively, the
"Confidential Information"). As a material inducement to FPPC to enter into this
Agreement, and to pay to PBCI the compensation referred to in Section 7 hereof,
along with other considerations provided herein, PBCI covenants and agrees that
it shall not at any time during the term or following any termination of this
Agreement, directly or indirectly, divulge or disclose or use for any purpose
whatsoever (except for the sole and exclusive benefit of FPPC as reasonably
required in connection with its duties to or as otherwise required by law), any
Confidential Information which has been obtained by or disclosed to it as a
result of this Agreement or its retention hereunder. In accordance with the
foregoing, PBCI further agrees that it will at no time retain or remove from the
premises of FPPC records of any kind or description whatsoever for any purpose
whatsoever unless authorized by FPPC and will return all of the foregoing to
FPPC upon FPPC request or upon any termination or expiration of this Agreement.
In the event of a breach of threatened breach by PBCI of any of the provisions
of this Section 11, FPPC, in addition to and not in limitation of any other
rights, remedies or damages available to it at law or in equity, shall be
entitled to a permanent injunction in order to prevent or to restrain any such
breach by PBCI or its agents, partners, representatives, servants, employers,
employees and/or any and all persons directly or indirectly acting for or with
PBCI.
11. TRANSFER OF INTEREST AND DUTIES.
The parties hereto agree that in the event FPPC is sold or merged with
another corporation, then, and in that case, this Agreement may be assigned by
FPPC to said merged or acquiring corporation, and PBCI hereby agrees to be bound
by this Agreement even though FPPC shall be merged with another.
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12. APPLICABLE LAW; SEVERABILITY.
This Agreement shall be governed by and construed pursuant to the laws
of the State of New Jersey, where it is made and executed. If any terms or part
of this Agreement shall be determined to be invalid, illegal or unenforceable in
whole or in part, the validity of the remaining part of such term of the
validity of any other term of this Agreement shall not in any way be affected.
All provisions of this Agreement shall be construed to be valid and enforceable
to the full extent permitted by law.
13. BINDING PROVISIONS AND PERFORMANCE.
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their successors in interest of any kind whatsoever, and all
such parties agree to be bound by the provisions contained herein. Except as
expressly provided herein, this Agreement does not create, and shall not be
construed as creating, any rights enforceable by any person not a party hereto.
14. AMENDMENT.
No amendment or variation of the terms of this Agreement shall be valid
unless made in writing and signed by the parties hereto.
15. ENTIRE AGREEMENT.
This Agreement represents the entire agreement between the parties
hereto with respect to the subject matter hereof.
16. NOTICES.
Any notice required or permitted to be given hereunder shall be in
writing and shall be mailed by first-class pre-paid mail or otherwise delivered
in person or by facsimile with hardcopy to follow by first-class pre-paid mail
at the address of such party set forth in the preamble to this Agreement or to
such other address or facsimile telephone number as the party shall have
furnished in writing to the other party.
17. WAIVER.
Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of that provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions will not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term of any other term of this Agreement.
IN WITNESS WHEREOF, the Consulting Agreement has been executed by the
Parties as of the date first written above.
Xxx Xxxxxx, President Xxxxxxx X. Xxxxxxxxx, President
FIELDPOINT PETROLEUM CORP. XXXXXXX XXXXX & CO., INC.
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