Attached files
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| 8-K - CURRENT REPORT - Virtus Oil & Gas Corp. | virtus_8k.htm |
EXHIBIT 10.1
CONSULTING AGREEMENT
This CONSULTING AGREEMENT (this “Agreement”) is made and entered into as of June 1, 2014 (the “Effective Date”), by and between Virtus Oil & Gas Corp., a Nevada corporation (the “Company”), and Brett A. Murray & Associates, Inc., a Colorado corporation (“Consultant”).
RECITALS:
A. The Company is a development stage company seeking oil and gas exploration opportunities.
B. Consultant provides the services of a professional “landman” for oil and gas exploration companies and has expertise in exploration and production activities.
C. On November 14, 2013, the Company entered into an agreement to purchase an 87.5% working interest in oil and gas leases covering approximately 36,787 acres in Iron County, Utah; and on May 6, 2014, the Company entered into another agreement to purchase an 87.5% working interest in oil and gas leases covering approximately 18,690.50 acres in Iron County, Utah (as used herein, the term “Property” refers to the aggregate 55,477.50 acres in Iron County, Utah comprised by the two agreements).
D. The Company desires to engage Consultant to provide certain consulting services with respect to the Property, and Consultant desires to accept such engagement, on the terms and conditions set forth in this Agreement.
AGREEMENT:
NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1. Engagement. The Company hereby engages Consultant as an independent consultant to provide certain consulting services with respect to the Property as more fully described on Exhibit A attached hereto (collectively, the “Services”). Consultant will provide the Services through one or more of its employees, as Consultant may determine in its reasonable discretion from time to time; provided, that the person who shall serve as the principal contact and provide oversight of all Services shall be its President, Brett A Murray (“Murray”), along with consultants or employees of Consultant who may provide occasional administrative services in direct support of Murray’s efforts. Consultant shall provide no less than forty-five (45) days’ prior written notice to the Company of any change in its principal contact for the Services. During the Consulting Term (as defined in Section 3 below), Consultant shall render the Services to the Company upon the terms and conditions set forth herein. The Company will not treat Consultant as its employee for federal tax purposes or any other purposes. Consultant will not allow any of its employees, consultants or officers to hold himself or herself out as an employee of the Company. This engagement does not create an agency relationship, and neither Consultant nor any of its officers, employees or consultants shall have authority to bind the Company without the Company’s prior consent or authorization (including any authorization by email). Consultant shall not have the right to participate in management, policy affairs, day-to-day decisions, or make any statements, assurances or commitments on the Company’s behalf, other than as reasonably related to the Services agreed to and described on Exhibit “A.” Consultant and Murray each hereby consents to have its and his name and bio listed on the Company’s website and in the Company’s marketing materials.
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2. Method of Performance. During the Consulting Term, the principal contact for Consultant (i.e., initially Murray) shall have the title of “Chief Operations Officer” of the Company and shall provide the Company with the Services as more fully described on Exhibit A attached hereto. Consultant, as an independent contractor, may determine the method, manner and means of performing the Services to be carried out for the Company. In performing the Services, Consultant and each of its employees shall (a) act in the Company’s best interest at all times, (b) conduct themselves at the highest professional standards of ethics and integrity, (c) use their good faith efforts and skills to preserve the business of the Company and the goodwill of employees and persons having business relations with the Company, (d) comply with all written Company codes of conduct and all written Company policies and procedures that may be implicated by their provision of the Services, and (e) conduct the Services in compliance with all applicable state and federal laws.
3. Term. Unless extended pursuant to this Section or terminated earlier pursuant to Section 4 below, the initial period of Consultant’s engagement under this Agreement shall expire on the day prior to the one (1) year anniversary of the Effective Date (the “Initial Term”). Upon expiration of the Initial Term, this Agreement will automatically renew for consecutive one (1) year terms (each a “Renewal Term”) unless either party provides the other party written notice of its intention to not to renew this Agreement at least thirty (30) days prior to the end of the Initial Term, or at least sixty (60) days prior to the end of any Renewal Term once the Agreement has been continued beyond the Initial Term. The period from the Effective Date until the end of the Initial Term, or any applicable Renewal Term, as the case may be, is hereinafter referred to as the “Consulting Term.”
4. Termination.
(a) Early Termination. In the event any party fails to comply with any of the terms of this Agreement and fails to cure such non-compliance to the reasonable satisfaction of the non-breaching party within fifteen (15) days after receipt of written notice of such breach, the non-breaching party may immediately terminate this Agreement.
(b) Termination for Cause. The Company may immediately terminate this Agreement for “cause” by giving Consultant written notice of such conduct and the Company’s intention to terminate. For purposes of this Agreement, “cause” shall mean, with respect to Consultant (including for this purpose any of the following actions taken by Murray or any other employee), the commission of fraud against the Company, or the misappropriation, theft or embezzlement of the assets of the Company, or the performance of illegal or fraudulent acts, criminal conduct, or willful misconduct materially injurious to the business of the Company.
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(c) No Cause Termination.
(i) During the Initial Term, this Agreement may be terminated at any time by either party by providing the other party with at least thirty (30) days written notice of such party’s intention to terminate this Agreement.
(ii) During any Renewal Term, this Agreement may be terminated at any time by either party by providing the other party with at least sixty (60) days written notice of such party’s intention to terminate this Agreement.
(iii) During any notice period, Consultant agrees to use its reasonable best efforts to continue work for the Company, and the Company agrees to continue compensating Consultant until the termination date with the same compensation as before the notice was given.
(d) Effect of Termination. Upon expiration or termination of this Agreement, neither party shall have any further obligations hereunder, except for obligations incurred prior to the date of expiration or termination, and obligations, promises, or covenants contained herein which expressly extend beyond the term of this Agreement, including, but not limited to Sections 7 and 8 below.
5. Compensation for Services.
(a) Consulting Fee. During the Consulting Term, the Company will pay to Consultant a monthly fee in the amount of Nine Thousand Dollars ($9,000) per month (the “Consulting Fee”) for performing the Services, based upon an estimated average of two (2) days of work per week. The Consulting Fee shall be paid monthly in arrears no later than the fifth (5th) day of the month immediately following the calendar month during which the Services were performed.
(b) Stock Issuance. In addition to the Consulting Fee, the Company will issue to Consultant up to two million (2,000,000) shares of the Company’s common stock, $0.001 par value per share (“Common Stock”), on the following schedule: (i) one hundred twenty five thousand (125,000) shares of Common Stock on the Effective Date; (ii) three hundred seventy five thousand (375,000) shares of Common Stock on the one (1) year anniversary of the Effective Date; and (iii) two hundred fifty thousand (250,000) shares of Common Stock on each six-month anniversary thereafter, up to a total of two million (2,000,000) shares (collectively, the “Shares”). This Agreement must remain in effect on the date Shares are to be issued to Consultant for Consultant to be eligible to receive the Shares. Upon the termination of this Agreement, Consultant will not be eligible to receive any Shares not previously issued to Consultant.
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(c) Commission Compensation. Consultant is eligible to receive commission compensation based on “Transactions” (defined below) entered into between the Company and an “Eligible Contact” (defined below) related to the Property and/or “Other Properties” (defined below).
The term “Transactions” or “Transaction” as used herein refers to the entry by the Company into an agreement or transaction that results in the Company acquiring by lease or purchase a working, royalty, or other ownership interest in any mineral lease or other real property on which minerals are capable of being exploited, or the Company selling or leasing such an interest to a third party for value, including by way of example, any sales agreements, purchase contracts, and mineral leases.
The term “Eligible Contact” as used herein refers to individuals whose original contact with the Company is through introduction by Consultant. Entities who have previously done business with the Company and/or current employees of the Company (regardless of whether such prior business was conducted while the employee was employed by the Company) are not “Eligible Contacts.”
The term “Other Properties” as used herein refers to property that the Company and Consultant agree in writing will be subject to this Section 5(c). The term “Other Properties” does not include the Property, unless there is a sale or other disposition of the Company’s rights in the Property to a third party for value.
With respect to a Transaction or Transactions for the sale, lease, or other disposition of the Property or Other Properties by the Company, the Company will pay to Consultant a commission equal to 8% of the “Net Sale Price” (defined below) paid by the Eligible Contact(s) to the Company. The “Net Sale Price Value” is defined as the gross purchase price paid in cash or drilling commitments by the Eligible Contact(s) to the Company (or its designee) pursuant to the Contract(s), less brokerage and other professional fees associated with the Transaction or Transactions. The 8% commission will be paid by the Company in cash within thirty (30) days after the closing and the Company’s receipt of the proceeds from the Transaction or Transactions.
With respect to a Transaction or Transactions for the purchase, lease, or other acquisition of Other Properties by the Company, the Company will pay to Consultant a commission equal to 8% of the Net Purchase Price (defined below) paid by the Company to the Eligible Contact(s). The “Net Purchase Price Value” is defined as the gross purchase price paid in cash or drilling commitments by the Company pursuant to the Contract(s), less brokerage and other professional fees associated with the Transaction or Transactions. The 8% commission will be paid by the Company to Consultant in cash at the same time as the Company’s other payments are due pursuant to the Transaction or Transactions.
With respect to lease agreements on the Property, the Company will assign to Consultant a 1% overriding royalty interest free and clear of all transportation expenses and other deductions.
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(d) No Benefits. Consultant is an independent contractor and, as such, Consultant shall not be entitled to participate in any employment-related benefits that may be provided by the Company, including but not limited to, workers’ compensation insurance, unemployment compensation insurance, vacation or sick pay, pension or profit sharing benefits, or any type of health, life or disability insurance.
(e) Business Expense Reimbursement. Consultant will be reimbursed for all customary and reasonable expenses actually incurred by it in the performance of the Services as set forth in this Section 5(e). Consultant must obtain prior written approval from the CEO of the Company to be reimbursed for a single expense in excess of $1,000, or aggregate quarterly expenses in excess of $5,000. Consultant must provide the Company with receipts, or other sufficient documentation, regarding expenses to receive reimbursement. Such reimbursement will be paid by the Company within ten (10) business days of receiving proper documentation from Consultant.
6. Representations and Warranties. Each of Consultant and Murray represents and warrants to the Company as of the Effective Date as follows:
(a) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by Consultant. This Agreement has been duly executed and delivered by Consultant, and constitutes a legal, valid and binding obligation of Consultant enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws and subject to the limitations imposed by law or equitable principles affecting the availability of specific performance, injunctive relief and other equitable remedies. Consultant is not contractually prohibited from providing the Services to the Company;
(b) Consultant is acquiring the Shares for investment for his own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof;
(c) Consultant has no present intention of selling, granting any participation interest in, or otherwise distributing the Shares;
(d) Consultant has received all information he considers necessary or appropriate for deciding whether to acquire the Shares;
(e) Consultant has had an opportunity to ask questions and receive answers from the Company regarding the Company’s business, management, financial affairs and the terms and conditions of the issuance of the Shares;
(f) Consultant is sophisticated and well-informed and has such knowledge and experience in financial and business matters in general, and in investments in businesses similar to the Company in particular, as are necessary to enable him to evaluate the merits and risks of an investment in the Company;
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(g) Consultant has no need for liquidity in his investment in the Company and he is able to bear the risk of such investment for an indefinite period. Consultant’s present financial condition is such that he is under no present or contemplated future need to dispose of any portion of the Shares; and
(h) Consultant understands that the Shares have not been registered under the Securities Act of 1933, as amended, that the Shares are “restricted securities” under applicable U.S. securities laws and that, pursuant to these laws, Consultant must hold the Shares indefinitely, unless (i) the sale or other transfer of the Shares has been registered with the Securities Exchange Commission and qualified by state authorities, or (ii) an exemption from such registration and qualification requirements is available.
7. Consultant Obligations. Consultant shall be solely liable for and shall bear all costs and expenses arising from (i) the breach of any covenant, obligation, representation or warranty of Consultant under this Agreement; (ii) the negligence or willful misconduct of Consultant in connection with Consultant’s performance of the Services during the Consulting Term; and/or (iii) the Company’s treatment of Consultant as an independent contractor rather than treating Consultant as an employee for tax purposes. Notwithstanding anything to the contrary in this Agreement or the constituent documents of the Company, the Company shall have no obligation to indemnify or defend Consultant with respect to any such cost or expense.
8. Confidential Information. The Company will provide Consultant and its employees, including Murray, with certain Confidential Information (as defined below) in order to allow Consultant to perform the Services. Each of Consultant and Murray acknowledges that the Confidential Information is the property of the Company. Therefore, neither Consultant nor Murray shall disclose or permit to be disclosed, without the prior written consent of the Board of Directors or Chief Executive Officer of the Company, any Confidential Information other than as necessary to perform the Services. Each of Consultant and Murray agrees that during the Consulting Term and following the termination of this engagement with the Company for any reason, they will not directly or indirectly use any Confidential Information for any reason other than the advancement of the Company’s business interests. For purposes of this Agreement, the term “Confidential Information” means, collectively, all information and data regarding the Company and its officers, directors, managers, shareholders, partners, employees, affiliates, joint venturers, agents, representatives, independent contractors, subcontractors, clients, customers, vendors, suppliers, developers, lenders, investors, budgets, research, analysis, studies, real and personal properties, intellectual properties, licenses, license agreements, projects, expenses, fees, charges, pricing, assets, services, computer hardware and software, data files, spreadsheets, operations, financial statements, marketing plans, methods, processes, business plans, and financial performance, at any time obtained by Consultant in connection with Consultant’s engagement by the Company. Notwithstanding the foregoing, the term Confidential Information shall not include any information that (a) is or becomes generally available to the public (other than as a result of violation of this Agreement by Consultant or any of its employees), or (b) Consultant receives on a nonconfidential basis from a source other than the Company that is not known by Consultant to be bound by an obligation of secrecy or confidentiality. If Consultant is requested in any legal proceeding to disclose any Confidential Information, Consultant agrees to give the Company reasonable notice of such request so that the Company may seek an appropriate protective order. If Consultant is nonetheless compelled to disclose any Confidential Information by a court, subpoena, legal proceeding or governmental body having the authority to order such disclosure, Consultant may disclose the Confidential Information without liability hereunder; provided, however, that Consultant gives the Company written notice of the Confidential Information to be disclosed as far in advance of its disclosure as is practicable and, upon the Company’s request, Consultant uses its good faith efforts to obtain assurances that confidential treatment will be accorded to the Confidential Information.
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9. Return of Property to the Company. Upon the termination of this engagement with the Company for any reason, Consultant agrees to promptly return to the Company all Company-owned property in its possession or control or the possession or control of any employee, including without limitation, all Confidential Information. After the termination of this engagement with the Company, Consultant will not retain copies of any Confidential Information or any other documents or property belonging to the Company.
10. Independent Contractor Status. Consultant shall be an independent contractor and not an employee, agent, joint venturer, or partner of the Company by virtue of this Agreement. Nothing in this Agreement shall be interpreted or construed as creating or establishing the relationship of employer and employee between the Company, on the one hand, and Consultant on the other hand. Neither Consultant nor the Company has any authority to act for or on behalf of the other, nor to bind the other to any contract or in any other manner without the express approval in writing of the other. The Company shall not be required to pay on account of Consultant or any of its employees any costs, expenses or claims associated with the payment, on account of Consultant, of any unemployment tax or other employees’ taxes required under law to be paid with respect to Consultant (or such employees); nor shall the Company be required to withhold any monies from any payments made hereunder to Consultant for income tax purposes or with respect to any other applicable deductions required by law.
11. Choice of Law. The parties agree that this Agreement shall be construed under the substantive laws of the State of Texas, without regard to its conflicts of law principles.
12. Jurisdiction and Venue. Any judicial proceeding brought by or against either of the parties to this Agreement on any dispute arising out of this Agreement or any matter relating thereto shall be brought in any federal or state court sitting or having jurisdiction in Dallas County, Texas, and by execution and delivery of this Agreement, each of the parties hereto hereby accepts for itself the exclusive jurisdiction and venue of the aforesaid courts as trial courts, and irrevocably agrees to be bound by any final non-appealable judgment rendered in connection with this Agreement. The provisions of this Section 12 shall survive expiration or termination of this Agreement, regardless of the cause of such termination.
13. Severability. If any provision of this Agreement is declared or found to be illegal, unenforceable, or void, in whole or in part, then all parties will be relieved of all obligations thereunder, but only to the extent such provision is illegal, unenforceable, or void. The parties intend that this Agreement will be deemed amended by modifying any such illegal, unenforceable, or void provision to the extent necessary to make it legal and enforceable while preserving its intent, or if such is not possible, by substituting therefor another provision that is legal and enforceable and achieves the same objectives. Notwithstanding the foregoing, if the remainder of this Agreement will not be affected by such declaration or finding and is capable of substantial performance, then each provision not so affected will be enforced to the extent permitted by law.
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14. Waiver. No delay or omission by either party to this Agreement to exercise any right or power under this Agreement will impair such right or power or be construed as a waiver thereof. A waiver by any party to this Agreement of any of the covenants to be performed by any other party or any breach thereof will not be construed to be a waiver of any succeeding breach thereof or of any other covenant contained in this Agreement. All remedies provided for in this Agreement will be cumulative and in addition to and not in lieu of any other remedies available to either party at law, in equity or otherwise.
15. No Assignment. Neither this Agreement nor any right or interest hereunder shall be assignable by Consultant or its beneficiaries or legal representatives without the Company’s prior written consent. This Agreement may not be assigned by the Company except with Consultant’s prior written consent. Any attempted assignment without the requisite consent shall be void and of no effect.
16. Notices. Any notices, consents, demands, requests, approvals and other communications to be given under this Agreement by either party to the other shall be deemed to have been duly given if given in writing and personally delivered or sent by mail (registered or certified) or by a nationally recognized overnight delivery service, the business day on which the notice is actually received by the party, or if given by certified mail, return receipt requested, postage prepaid, five (5) business days after posted with the United States Postal Service, addressed as follows:
(a) if to the Company, to:
Virtus Oil & Gas Corp.
1517 San Jacinto Street
Houston, Texas 77002
Attention: Rupert Ireland, President and Chief Executive Officer
or to such other address as the Company may have advised Consultant in writing; and
(b) if to Consultant, to:
Brett A. Murray
Brett A. Murray & Associates, Inc.
210 W. Hargreaves St.
Holyoke, CO 80734
970-854-2667
970-854-2807 Fax
Bam@brettamurray.com
or to such other address as Consultant may have advised the Company in writing.
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17. Entire Agreement. This Agreement represents the entire agreement relating to the relationship between the Company and Consultant. No prior or subsequent promises, representations, or understandings relative to any terms or conditions of Consultant’s engagement are to be considered binding or part of this Agreement unless expressly agreed to in a writing signed by the parties.
18. Amendment. This Agreement may be amended only in a writing signed by the Company and Consultant.
19. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original for all purposes and all of which shall be deemed collectively to be one agreement. Signatures given by facsimile or portable document format (or similar format) shall be binding and effective to the same extent as original signatures.
20. Acknowledgment. By signing below, the parties certify and represent that they have carefully read and considered the foregoing Agreement and fully understand all provisions of this Agreement and understand the consequences of signing this Agreement, and have signed this Agreement voluntarily and without coercion, undue influence, threat, or intimidation of any kind or type whatsoever.
[The Remainder of This Page Is Intentionally Left Blank.]
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IN WITNESS WHEREOF, the Company and Consultant have executed this Agreement as of the Effective Date.
| COMPANY: | VIRTUS OIL & GAS CORP. | |
| a Nevada corporation | ||
| By: | /s/ Rupert Ireland | |
| Name: Rupert Ireland Title: President and Chief Executive Officer | ||
| CONSULTANT: | BRETT A. MURRAY & ASSOCIATES, INC. | |
| a Colorado corporation | ||
| By: | /s/ Brett A. Murray | |
| Name: Brett A. Murray Title: President | ||
AGREED AS TO SECTIONS 1, 2, 6 and 8:
/s/ Brett A. Murray
Brett A. Murray, Individually
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EXHIBIT A
SERVICES
During the Consulting Term, Consultant shall provide the following Services:
| (a) | negotiating for the acquisition or divestiture of mineral rights, without any obligation to execute such agreements on behalf of the Company; |
| (b) | negotiating business agreements that provide for the exploration for and/or development of minerals, without any obligation to execute such agreements on behalf of the Company; |
| (c) | determining ownership in minerals through the research of public and private records; |
| (d) | reviewing the status of title, curing title defects and otherwise reducing title risk associated with ownership in minerals; |
| (e) | managing rights and/or obligations derived from ownership of interests in minerals; |
| (f) | unitizing or pooling of interests in minerals; and |
| (g) | performing such other duties as may from time to time be assigned by the President of the Company. |
The parties agree to use good faith efforts to reach agreement on any additional services which the Company may require of Consultant beyond the scope of the above-mentioned Services.
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