Exhibit 10.5
MANAGEMENT AGREEMENT
THIS AGREEMENT made as of and to have effect from the 1st day of July, 2008
BETWEEN:
EXTERRA ENERGY INC., a company duly incorporated under the laws of the State of
Nevada, having its registered office at 1717 St. James Place, Suite 250,
Houston, TX, 77056 USA (hereinafter called the "Company")
OF THE FIRST PART
AND:
PANTERRA CAPITAL INC., of 16149 Morgan Creek Crescent, Surrey, BC, V3S 0J2,
CANADA (hereinafter called the "Consultant")
OF THE SECOND PART
WHEREAS the Company is a publicly reporting issuer who shares trade on the NASD
Over the Counter Bulletin Board; and
WHEREAS the Company wishes to engage the Consultant as Consultant and the
Consultant has agreed to be engaged by the Company on the terms and conditions
hereinafter set forth.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
of the covenants and agreements hereinafter contained, the parties hereto have
agreed as follows:
1. DUTIES AND DEVOTION OF TIME
1.01 The Consultant will provide the services of Mr. John Punzo as CEO to the
Company and Chairman of the Board, therefore the term Consultant shall
refer to Panterra and/or Mr. Punzo interchangeably. It is acknowledged
and agreed by the Consultant that the work of the Consultant is and will
be that of an independent consultant and of such a nature that regular
hours may be impossible and the Consultant may not work a full eight
hours per day and a full five days per week. It is also anticipated that
there will be certain evenings, Saturdays, Sundays and holidays during
which the Consultant will be required to work. The work of the Consultant
is of an advisory and supervisory nature and accordingly the Consultant
agrees that the consideration herein set forth will be in full and
complete satisfaction for the Consultant's work and services, no matter
how or when performed, and the Consultant hereby releases the Company
from any claims for overtime pay or compensation whatsoever which the
Consultant might have by reason of any existing or future legislation or
otherwise.
-2-
1.02 During the term of this agreement, the Consultant will be responsible
for, but not limited to:
a) Management consulting services;
b) the identification, review, negotiation, acquisition and
maintenance of oil & gas properties;
c) locating and securing financing;
d) the negotiation of some contracts;
e) the hiring of personnel;
f) observation of regulatory compliance;
g) liaising with corporate counsel, auditors and transfer agents;
h) conducting shareholder meetings for prospective shareholders;
i) attending to market maintenance; and
j) responding to shareholder and stock broker communications and
inquiries;
k) all other duties, from time to time, required to advance the
corporation.
1.03 In conducting its duties under this agreement, the Consultant will report
to the Company's Board of Directors.
2. TERM
2.01 The effective date of this agreement is the date set out above and the
engagement of the Consultant hereunder will from such date continue for a
period of one (1) year or until terminated in accordance with the terms
and provisions of this agreement. This agreement will automatically renew
for a period of one (1) year upon expiry unless terminated pursuant to
clause 9 of this agreement.
3. REMUNERATION
3.01 The Consultant will faithfully, honestly and diligently provide the
services to the Company as set out above in consideration of which the
Company will pay to the Consultant a monthly fee (the "Monthly Fee")
equal to the sum of:
a) US$12,500.00, payable in cash or common shares at the discretion of
the Consultant. It is agreed that initially US$6,250.00 shall be in cash
each month with the balance of $6,250.00 to be accrued.
3.02 The Company will also issue to the Consultant a total of 1,000,000 common
shares in the equity of the Company at a price of $0.01 per share to be
delivered as follows, 500,000 common shares on July 1st, 2008 and 500,000
common shares on January 1st, 2009. These shares shall be issued under
such terms as is approved by the Directors of the Company and that are
acceptable to such regulatory authorities having jurisdiction.
3.03 The Consultant acknowledges that it is an independent contractor, and as
such is solely responsible for the payment or remittance of all
deductions, taxes and assessments relating to this engagement, and agrees
to save the Company harmless from all liability therefrom.
-3-
4. AMENDMENT OF REMUNERATION PAYABLE
4.01 The remuneration payable to the Consultant may be altered from time to
time during the term of this agreement by mutual agreement between the
parties in writing, executed by the parties hereto.
5. REIMBURSEMENT FOR EXPENSES
5.01 The Consultant and its employees, agents and representatives will be
reimbursed for all reasonable out-of-pocket expenses incurred thereby in
or about the execution of the Company's engagement. Any expense above the
amount of $5000 will be pre-approved by the Company.
6. INTERRUPTION OF COMPANY'S BUSINESS
6.01 If during the term of this agreement the Company discontinues or
interrupts the operations of its business for a period of six months,
then this agreement will automatically terminate without liability on the
part of either of the parties hereto.
7. NOTICE
7.01 Any notice to be given under this agreement will be in writing and will
be deemed to have been given if delivered to, or sent by prepaid
registered post addressed to, the respective addresses of the parties
appearing on the first page of this agreement (or to such other address
as one party provides to the other in a notice given according to this
paragraph). Where a notice is given by registered post, it shall be
conclusively deemed to be given and received on the fifth day after its
deposit in a U.S. post office at any place in the continental United
States.
8. CONFIDENTIAL INFORMATION
8.01 The parties hereto acknowledge and agree that the Consultant by virtue of
engagement with the Company will have access to confidential and secret
information and therefore the Consultant agrees that during the term of
this agreement and on termination or expiry of the same, for any reason
whatsoever, it will not divulge or utilize to the detriment of the
Company any such confidential or secret information so obtained.
9. TERMINATION OF AGREEMENT
9.01 Notwithstanding any other provision herein, it is understood and agreed
by and between the parties hereto that the Consultant may terminate this
agreement in its entirety by giving the Company not less than 60 days'
written notice of such intention to terminate
9.02 The Company may terminate this agreement in its entirety without cause by
delivering to the Consultant notice of termination in writing and paying
to the Consultant a severance fee as liquidated damages and in lieu of
notice equal to:
a) 6 multiplied by
b) the Monthly Fee paid or payable hereunder for the last whole month
preceding the date of such termination,
-4-
and the Consultant does hereby agree that such notice and severance fee
is sufficient compensation in lieu of notice and damages, and that the
Company will not be liable to pay any further monies, notwithstanding
that such termination of the engagement may be without cause. The
expression "such further monies" will include, without restricting the
generality of the foregoing, holidays, holiday pay, Pension Plan
contributions and any or all other monies arising out of the engagement
of the Consultant.
9.03 This agreement shall terminate on the occurrence of the death of the
Consultant, or in the event of his inability to perform his duties for a
period of 180 consecutive days, unless the Consultant is granted a leave
of absence by the Company
10. INDEPENDENT ACTIVITIES
10.01 Except as expressly provided in paragraph 10.02 hereto, the Consultant
shall have the free and unrestricted right to independently engage in and
receive the full benefit of any and all business endeavours of any sort
whatsoever. In the event the Consultant engages in business activities
which could be construed as competitive to the Company, the Consultant
shall disclose fully to the Board the activity and seek the consent of
the Board to participate therein. In the event Consultant becomes aware
of an opportunity which could benefit the Company, then the Consultant
has a duty to present the opportunity to the Company. The Consultant
shall not be prevented from engaging in or enjoying the benefits of
competing endeavours so long as the endeavours have been fully disclosed
to the Board and the Board has consented.
10.02 The Consultant shall not, directly or indirectly, acquire nor be a
director, officer, control person, consultant or employee of any
corporation or other entity that has acquired or will acquire an interest
in oil or natural gas properties without the prior consent of the
majority of the directors of the Company. Where the directors of the
Company have considered and declined to acquire an interest in any oil or
natural gas property, such consent shall be deemed to have been given.
11. MISCELLANEOUS
11.01 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
11.02 This Agreement shall be governed by and construed in accordance with the
laws of the State of Nevada which shall be deemed to be the proper law
hereof.
11.03 All rights and remedies of either party hereunder are cumulative and are
in addition to, and shall not be deemed to exclude, any other right or
remedy allowed by law. All rights and remedies may be exercised
concurrently.
11.04 Should any part of this Agreement be declared or held invalid for any
reason, such validity shall not affect the validity of the remainder
which shall continue in full force and effect and be construed as if this
Agreement had been executed without the invalid portion and it is hereby
declared the intention of the parties hereto that this Agreement would
have been executed without reference to any portion which may, for any
reason, be hereafter declared or held invalid.
-5-
11.05 No condoning, excusing or waiver by any party hereto of any default,
breach or non-observance by any other party hereto at any time or times
in respect of any covenant, proviso or condition herein contained shall
operate as a waiver of that party's rights hereunder in respect of any
continuing or subsequent default, breach or non-observance, or so as to
defeat or affect in any way the rights of that party in respect of any
such continuing or subsequent default, breach or non-observance, and no
waiver shall be inferred from or implied by anything done or omitted to
be done by the party having those rights.
11.06 This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto or by their successors or permitted
assigns.
11.07 The titles of headings to the respective paragraphs of this Agreement
shall be regarded as having been used for reference and convenience only.
11.08 Time shall be of the essence in this Agreement.
11.09 This Agreement may be executed in several parts in the same form and such
parts as so executed will together constitute one original agreement, and
such parts, if more than one, will be read together as if all the signing
parties hereto had executed one copy of this Agreement.
11.10 This Agreement constitutes the entire agreement between the parties
hereto and supersedes all prior agreements and understandings, oral or
written, by and between any of the parties hereto with respect to the
subject matter hereof.
11.11 This agreement may not be assigned by the Company without the prior
written consent of the Consultant. The parties hereto agree that the
Consultant may assign this agreement to a corporation (in this paragraph,
the "Assignee") provided that the Assignee shall, prior to and as a
condition precedent to such assignment, deliver to the Company its
covenant with and to the Company that:
a) it will, at all times during the remaining term of this agreement,
be wholly-owned by John Punzo;
b) to the extent of the assignment, it agrees to be bound by the
terms and conditions of this agreement as if it had been an
original party thereto; and
c) it will subject any further assignment of the interest acquired to
the restrictions contained in this paragraph.
-6-
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
The Common Seal of Exterra Energy Inc. )
was hereunto affixed in the presence of )
)
)
______________________________________ ) C/S
Ray Ledesma, President
The Common Seal of Panterra Capital Inc.
was hereunto affixed in the presence of )
)
)
______________________________________ ) C/S
John Punzo, President