CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement"), effective as
of June 1, 1997, by and between XCL Ltd., a Delaware
corporation., with offices at 110 Rue Jean Lafitte, Lafayette,
Louisiana 70508 (hereinafter the "Company") and R. Thomas
Fetters, 101 Red Brick Circle, Lafayette, LA 70503 (hereinafter
"Consultant").
W I T N E S S E T H:
WHEREAS, Consultant has substantial experience and
ability in oil and gas exploration, development and production;
and
WHEREAS, the Company desires to retain and secure for
itself the experience and ability of Consultant for the purpose
of assisting the Company; and
WHEREAS, the Company and Consultant desire to enter
into a nonexclusive consulting agreement to set forth this
proposed consulting relationship;
NOW, THEREFORE, the parties to this Agreement hereby
agree as follows:
ARTICLE I
Rights and Duties Under Consulting Agreement
1.1 Term of Agreement and Duties. The Company
and Consultant agree that for the period commencing June 1, 1997
and terminating July 31, 1998, Consultant shall consult with
Company management in connection with all aspects of the
Company's exploration, development and production projects.
Thereafter, this contract shall continue on a month to month
basis, until terminated by either party on thirty days written
notice.
1.2 Compensation. For consulting services
performed by Consultant during the term of this Agreement, the
Company shall pay Consultant the sum of $30,000.00, to be paid in
monthly installments of $2,500.00, subject to termination of this
Agreement as provided herein. This payment shall constitute full
payment for all services rendered under this Agreement, but is in
addition to the compensation that Consultant is entitled to as a
member of the Board of Directors of the Company. In addition,
Consultant and the Company may, from time to time, enter into
written agreement whereby Consultant shall be entitled
compensation as a finder's fee on certain specifically identified
projects, and any such compensation shall be in addition to the
compensation paid under this agreement.
1.3 Reimbursement of Expenses. The Company
shall reimburse Consultant for all reasonable and necessary
travel, or other related out-of-pocket expenses actually incurred
by him during the term of this Agreement in carrying out his
duties and responsibilities hereunder.
1.4 Time Requirements under Consulting Agreement.
Subject to the foregoing, Consultant agrees devote the reasonable
time necessary to fulfill his obligations hereunder as agreed to
from time to time by Consultant and the Company.
1.5 Place of Performance of Consulting Services.
Consultant shall perform its services hereunder in Lafayette,
Louisiana and such other places as the Company may direct.
1.6 Indemnification. The Company shall
indemnify Consultant for all liabilities in connection with any
proceeding arising from services performed pursuant to this
Agreement, other than liability arising from the Consultants
gross negligence or willful misconduct.
1.7 Confidentiality of Company's Business.
Consultant acknowledges that the Company's business is highly
competitive and that the Company's books, records and documents,
the Company's technical information concerning its properties and
prospects, all comprise confidential business information and
trade secrets of the Company and are valuable, special, and
unique proprietary assets of the Company ("Confidential
Information"). Consultant further acknowledges that protection
of Company's Confidential Information against unauthorized
disclosure and use is of critical importance to the company in
maintaining its competitive position. Accordingly, Consulting
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, the Company. However, the Consultant's
obligation under this Section 1.7 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 the
Consultant. The provisions of this Section 1.7 shall survive the
termination of this Agreement. Money damages would not be
sufficient remedy for breach of this Section 1.7 by Consultant,
and the Company 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 1.7 by the
Consultant, but shall be in addition to all remedies available at
law or in equity to the Company including the recovery of damages
from the Consultant. For the purposes of this paragraph, the
term Company shall also include affiliates of the Company.
1.8 Conflict of Interest. Consultant agrees to use
his best efforts, skill and abilities so long as Consultant's
Services are retained hereunder to promote the best interest of
Company and its business. As part of the consideration for the
compensation to be paid to Consultant hereunder, and as an
additional incentive for the Company to enter into this
Agreement, Company and Consultant agree to the noncompetitive
provisions of this Section 1.8. During the term of this
Agreement, Consultant agrees that, unless prior written approval
of the President of the Company is obtained, Consultant will not
directly or indirectly for himself or for others consult, advise,
counsel or otherwise assist any customer, supplier, or, as to
operations in China, a direct competitor of the Company or any
subsidiary which, in any manner, would have, or is likely to
have, an adverse effect upon the Company or any subsidiary.
Consultant understands that the foregoing restrictions may
limit Consultant's ability to engage in a business similar to the
Company's business during the period provided for above, but
acknowledges that Consultant will receive sufficiently high
remuneration and other benefits from the Company hereunder to
justify such restrictions. The Company shall be entitled to
enforce the provisions of this Section 1.8 by resorting to
appropriate legal and equitable action.
It is expressly understood and agreed that the Company and
Consultant consider the restrictions contained in this Section
1.8 to be reasonable and necessary for the purposes of preserving
and protecting the goodwill and Confidential Information and
proprietary information of the Company. Nevertheless, if any of
the aforesaid 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 therein set forth to be modified by such court
so as to be reasonable and enforceable and, as so modified by the
court, to be fully enforced.
1.9 Independent Contractor:
(i) The parties hereby agree that the services
rendered by Consultant in the fulfillment of the terms
and obligations of this Agreement shall be as an
independent contractor and not as an employee, and with
respect thereto, Consultant is not entitled to the
benefits provided by the Company to its employees
including, but not limited to, group insurance and
participation in the Company s employee benefit and
pension plan. Further, Consultant is not an agent,
partner, or joint venture of the Company. Consultant
shall not represent himself to third persons to be
other than an independent contractor of the Company,
nor shall he permit himself to offer or offer or agree
to incur or assume any obligations or commitments in
the name of the Company or for the Company without the
prior written consent and authorization of the Company.
Consultant warrants that the services to be provided
hereunder will not cause of conflict with any other
duties or obligations of Consultant to third parties.
Consultant shall not subcontract or assign any of the
work to be performed hereunder without obtaining the
prior written consent of the Company, provided,
however, nothing contained herein shall prohibit
Consultant from incorporating and rendering services
hereunder as a corporation.
(ii) Consultant shall be responsible for payment of
all taxes including Federal, State and local taxes
arising out of the Consultant's activities under this
Agreement, including by way of illustration but not
limitation, Federal and State income tax, Social
Security tax, Unemployment Insurance taxes, and any
other taxes or business license fees as required.
1.10 Termination: This Agreement may be
terminated at any time by either party, without cause, and
without any liability to the other party, by providing the other
party thirty (30) days written notice of termination. In case of
termination of this Agreement under this provision, all
compensation under this Agreement shall cease except as to the
pro rata portion of the term of this Agreement that is prior to
the effective date of the termination.
ARTICLE II
Miscellaneous
2.1 Succession. This Agreement shall inure to
the benefit of and be binding upon the Company, its successors
and assigns, and upon Consultant. Consultant shall be prohibited
from assigning this Agreement without prior written approval of
the Company.
2.2 Notice. Any notice to be given to the
Company hereunder shall be deemed sufficient if addressed to the
Company in writing and personally delivered or mailed by
certified mail to its office at the address set forth above. Any
notice to be given to Consultant hereunder shall be sufficient if
addressed to it in writing and personally delivered or mailed by
certified mail to its address set forth above. Either party may,
by notice as aforesaid, designate a different address for the
receipt of notice.
2.3 Amendment. This Agreement may not be
amended or supplemented in any respect, except by a subsequent
written instrument entered into by both parties hereto.
2.5 Severability. In the event any provision of
this Agreement shall be held to be illegal, invalid or
unenforceable for any reasons, the illegality, invalidity, or
unenforceablity thereof shall not affect the remaining provisions
hereof, but such illegal, invalid, or unenforceable provision
shall be fully severable and this Agreement shall be construed
and enforced as if the illegal, invalid, or unenforceable
provision had never been included herein.
2.6 Headings. The titles and headings of
Articles and Sections are included for convenience of reference
only and are not to be considered in connection with the
construction or enforcement of the provisions hereof.
2.7 Governing Law. This Agreement shall be
governed in all respects by the laws of the State of Louisiana.
IN WITNESS WHEREOF, the parties have executed this
Agreement effective as of the 1st day of June, 1997.
XCL LTD.
By:___________________________
Title:__________________________
______________________________
R. THOMAS FETTERS