AGREEMENT
This Agreement is between Xxxxxxx Xxxx Xxxx Xxxx
("Xxxx"), a resident of Taipei, and XCL Ltd., a Delaware
corporation, on behalf of itself and all of its subsidiaries
(collectively, "XCL"). Except to the extent specifically
set forth herein, it supersedes all prior agreements between
Wang and XCL concerning compensation to Wang by XCL,
including, without limitation, the letter agreements dated
January 8, 1992 and June 3, 1992, from XCL and addressed to
and accepted by Wang, and is designed to resolve all
disagreements concerning past compensation.
Wang has been instrumental in XCL's obtaining projects
in China and in helping to develop those projects. Wang has
agreed to continue to assist with existing projects and to
help XCL obtain additional projects in China. This
agreement resolves all disagreements concerning prior
success fees due Wang, including, but not limited to, the
purchase of certain of his interests in the Xxxx Xxxx Block,
and sets forth the exclusive methods by which Wang will be
compensated for his past and future contributions to XCL
projects in China.
1. Compensation. Wang is entitled to the following
compensation and interests in XCL or its projects:
a. Retainer. Wang shall be entitled to a cash
retainer in such amount and at such frequency as
the parties may agree from time to time.
b. Profits Interest in Xxxx Xxxx. Xxxx is
entitled to an interest in Xxxx Xxxx equal to 1.5%
of XCL's proceeds from the Xxxx Xxxx Block, under
the terms of that agreement dated effective as of
May 1, 1993, and entitled Revenue Interest
Assignment, by and between XCL-China Ltd. and Wang
(the "Revenue Interest Agreement"). This
Agreement shall not alter or amend the Revenue
Interest Agreement, which shall remain in full
force an effect. Wang shall not be entitled to a
revenue interest in any future XCL projects unless
the parties negotiate and enter into a specific
written agreement granting such an interest.
c. Stock Grant. Wang shall receive 800,000
shares of Common Stock of XCL immediately, and
additional stock of XCL Ltd. in an amount equal to
the value of US $445,000. Upon execution of this
Agreement, XCL shall issue the 800,000 shares of
Common Stock. The remaining Common Stock with a
value of US $445,000 shall be issued to Wang from
time to time, as agreed by the parties, but in any
case, one-half of the balance shall be issued to Wang no
later than February 28, 1998, and the balance
shall be issued to Wang no later than December 31,
1998. Such additional stock shall be valued when
the stock is issued to Wang (based on the average
closing price of the stock over the 20 business
days immediately preceding date of issuance of the
stock). Common Stock issued pursuant to this
section shall not be registered under the US
securities laws, and XCL shall have no obligation
to register such stock. XCL shall have no
obligation to issue the stock hereunder, unless
the issuance of the shares would be exempt from
registration under the US federal and state
securities laws, and Wang shall provide XCL with
such representations and warranties, and agree to
such restrictions on transferability of the shares
as may be reasonable or customary for XCL to
require to establish the availability of such
exemptions from registration. The amounts payable
under this section are to resolve disagreements as
to the purchase of Wang's 3% interest in Xxxx
Xxxx, and in cancellation of any right that Wang
may have had to participate on a similar basis in
any other current or future XCL projects.
d. Stock Warrants. XCL may grant warrants to
purchase its stock to Wang from time to time and
on such terms and conditions as XCL and Wang may
agree in writing from time to time. No offer of
warrants or warrant agreement shall be binding
unless and until it is reduced to writing and
approved by the Board of Directors of XCL Ltd.
e. Reimbursement of Expenses. XCL shall
reimburse such out of pocket expenditures that
Wang may incur in the performance of services
hereunder, provided that such expenses were
incurred in compliance with any XCL mandated
approval or documentation procedures then
applicable.
f. Health Insurance, Other Benefits. Wang is not
entitled to participate any XCL sponsored fringe
benefit plans, including the XCL health insurance
plan. In lieu of such participation, XCL shall
reimburse Wang for the cost of an individual
health insurance policy, up to the maximum of $600
per month.
g. $150,000 Promissory Note. The parties agree
that the $150,000 promissory note dated April 15,
1993 from Wang to XCL has been satisfied in full
by Wang, and XCL shall cancel said note and return
the same to Wang marked "paid". XCL has no
further obligation to advance funds to Wang under
that note or any related agreement. The
forgiveness of this note is to resolve
disagreements between Wang and XCL over the amount
of the Revenue Interest that Wang has in the Xxxx
Xxxx Block, as described in subsection (b), above.
2. Independent Contractor. The parties agree that the
services rendered by Wang under this agreement shall be as
an independent contractor, and not an employee.
Accordingly, Wang is not entitled to benefits provided by
XCL to its employees. Further, Wang is not an agent,
partner or joint venturer of XCL's. Wang shall not
represent himself to third person to be other than an
independent contractor; he shall not offer or agree to incur
or assume any obligations or commitments in XCL's name
without the prior written consent and authorization of XCL.
Wang shall be free to perform services for others (whether
inside of or out side of China) provided that either such
services do not conflict with the interests of XCL, or, in
the case of a new oil or gas exploration or development
project, Wang has offered the project to XCL, and XCL has
declined to participate in the project, and has specifically
agreed that Wang may proceed with the project for his own
account, or for the account of others.
3. Conflict of Interest. Wang agrees to use his best
efforts, skill and abilities so long as he is providing he
services hereunder to promote the best interest of XCL and
its business. As part of the consideration for the
compensation to be paid to WANG hereunder, and as an
additional incentive for XCL to enter into this Agreement,
the parties agree that, during the term of this Agreement
and for a period of two (2) years following the termination
of this Agreement, Wang agrees that, unless he is given
prior written approval of XCL (which XCL may withhold for
any reason or no reason at all) Wang shall not directly or
indirectly, for himself or for others, consult, advise,
counsel or otherwise assist any business or venture (current
or potential) in any matter relating to the oil and gas
business in The Peoples' Republic of China in any manner
that could have an adverse effect upon XCL. It is expressly
understood and agreed that the parties consider the
restrictions contained in this section to be reasonable and
necessary for the purposes of preserving and protecting
XCL's goodwill and confidential and proprietary information.
The parties agree that money damages are inadequate to
compensate XCL for a breach of this section, and XCL shall
be entitled to enforce the provisions of the section by
resorting to appropriate legal and equitable action. If any
of the restrictions are found by a court having jurisdiction
to be unreasonable, or over broad as to geographic area or
time, or otherwise unenforceable, the parties intend for the
restrictions to be modified by the court so as to be
reasonable and enforceable to the maximum extent possible,
and, as so modified by the court, to be fully enforced.
4. Confidentiality. Wang acknowledges that XCL's
business is highly competitive and that XCL's books, records
and documents, XCL's technical information, geological
information, the names of and other information concerning
XCL's business affiliates, all comprise confidential
business information and trade secrets of XCL and are
valuable, special, and unique proprietary assets of XCL
("Confidential Information"). Wang further acknowledges
that protection of XCL's Confidential Information against
unauthorized disclosure and use is of critical importance to
XCL in maintaining its competitive position. Accordingly,
Wang hereby agrees that he will not, at any time during or
after the term of this Agreement, make any disclosure of any
Confidential Information, or make any use thereof, except
for the benefit of, and on behalf of, XCL. However, Wang's
obligation under this section shall not extend to
information which is or becomes part of the public domain or
is available to the public by publication or otherwise than
through Wang. The provisions of this section shall survive
the termination of this Agreement. Money damages would not
be sufficient remedy for breach of this section by Wang, and
XCL shall be entitled to specific performance and injunctive
relief as remedies for such breach or any threatened breach.
Such remedies for a breach of this section by Wang are not
exclusive, but shall be in addition to all remedies
available at law or in equity to XCL including the recovery
of damages from Wang. For the purposes of this paragraph,
the term XCL shall also include affiliates of XCL's.
IN WITNESS WHEREOF, the parties have executed this
Agreement effective as of the ____ day of ___________, 1997.
XCL LTD.
By:___________________
its:____________________
______________________
XXXXXXX XXXX XXXX XXXX
