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Exhibit 10.37
2007 CONSULTING AGREEMENT
THIS 2007 CONSULTING AGREEMENT (this "Agreement") is
entered into on this 5th day of March 2007, with an effective
date of November 15, 2006 (the "Effective Date") by and
between Penn Octane Corporation, a Delaware corporation ("Penn
Octane") and Rio Vista Energy Partners L.P., a Delaware limited
partnership ("Rio Vista") (Penn Octane and Rio Vista collectively,
the "Company") and JBR Capital Resources, Inc., a Nevada
Corporation ("Consultant"), as follows:
Agreement
In consideration of the covenants and agreements contained
herein, the parties agree as follows:
Section 1: Engagement of Services
1.1 Services Performed by Consultant . Consultant
shall serve as a special advisor to Penn Octane and Rio Vista and
shall provide the following services (the "Services") to the
Company: assistance with the Company’s acquisition and
disposition of assets, assistance with other transactions involving
the Company, and such other services as may be mutually agreed
between the Company and Consultant. Consultant’s duties may
be reasonably modified at the Company’s discretion from time
to time. Consultant will report directly to the chief executive
officer and the chairman of the board of directors of Penn Octane
and the chief executive officer and the chairman of the board of
managers of the general partner of Rio Vista.
Consultant shall at all times faithfully and diligently perform
the Services under this Agreement and use Consultant’s best
efforts, skill, and attention for the fulfillment of the Services
and the interests of the Company. Consultant shall have discretion
and control of the rendering of the Services and the manner in
which said Services are performed. Consultant shall perform all
such Services under the name and as a representative of the Company
to any third parties engaged in discussions with the Company.
Unless otherwise agreed to by the parties, Consultant shall have no
obligation to work any particular hours or days, nor shall
Consultant be obligated to devote full time to the performance of
the Services.
1.2 Company Affiliates . Consultant acknowledges
and agrees that the Company may, from time to time, request
Consultant to provide the Services or such other related services
to any of the Company’s Affiliates, subject to the terms and
conditions of this Agreement. For purposes of this Agreement,
"Affiliates" shall mean a parent company, or an affiliated or
subsidiary corporation or any other legal entity that is owned,
whether entirely or partially, or controlled by the Company. As
used in this definition, "owned or controlled by" means owns or
holds the right to vote any of the stock or units of such entity,
including without limitation, the Company’s affiliated
limited partnerships and limited liability companies in the United
States and the Company’s affiliated entities in Mexico. To
the extent that the Consultant provides any services to the
Affiliates, such Affiliates would have all the rights and benefits
provided to the Company hereunder, as if such Affiliates were the
Company.
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1.3 Independent Contractor . Consultant enters into this
Agreement as, and shall continue to be, an independent contractor.
Under no circumstances shall Consultant look to the Company as his
employer, or as a partner, agent or principal. There shall be no
tax withholdings taken from any Fees paid to Consultant pursuant to
this Agreement (including, without limitation, FICA, state and
federal unemployment compensation contributions, and state and
federal income taxes), and Consultant shall pay, when and as due,
any and all taxes incurred as a result of Consultant’s
compensation pursuant to this Agreement. Upon request, Consultant
shall provide the Company with proof of such payment.
Consultant will indemnify and hold harmless the Company from and
against all claims, damages, losses and expenses, including
reasonable fees and expenses of attorneys and other professionals,
relating to Consultant’s failure to pay such taxes as well as
any obligation imposed by law on the Company to pay any withholding
taxes, social security, unemployment or disability insurance, or
similar items in connection with compensation received by
Consultant pursuant to this Agreement.
Consultant also understands and agrees that Consultant shall be
solely responsible for complying with all federal, state, and local
laws requiring business permits, certificates, and licenses
required to carry out the Services to be performed by Consultant
under this Agreement. Furthermore, Consultant recognizes that it is
Consultant’s responsibility to obtain all insurance coverage
(including workers’ compensation) for Consultant. Upon
request, Consultant shall provide the Company with proof of such
coverage.
1.4 Agency . It is expressly understood and agreed
that Consultant shall only represent the Company to the extent
expressly authorized by this Agreement, and in no other way, and
that Consultant shall not be an agent of the Company. In this
regard, Consultant shall have no authority to enter into any
agreements or other binding obligations on the Company’s
behalf without the prior specific written authorization of the
Company, and that Consultant shall not hold himself out as an
officer, employee or agent of the Company; provided, however, that
Consultant may hold himself out as a representative of the Company
as specifically authorized by this Agreement or otherwise by the
Company.
Section 2: Compensation
2.1 Payment of Fees . In consideration of the
Services rendered by Consultant to the Company and/or to the
Affiliates, the Company agrees to pay the following fees ("Fees")
to Consultant:
(a) an amount equal to $2,000.00 per day of Services, each
such day of Services to be authorized in advance by the Company. No
Fees shall be due or payable for days of Services unless authorized
or approved by the Company. Consultant shall (i) submit each
invoice for Services to the Company for review and approval,
(ii) furnish a reasonably detailed description of Services for
each day covered by an invoice, (iii) furnish separate
invoices for Services performed on behalf of Penn Octane and on
behalf of Rio Vista, and (iv) deliver all invoices to the
Company within thirty (30) days following the month in which the
Services were performed. Subject to the foregoing, Fees under this
Section 2.1(a) will be due and payable to Consultant
thirty (30) days following the receipt by the Company of
Consultant’s approved invoice for Services; and
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(b) an amount equal to two percent (2%) of the net proceeds
to the Company resulting from a sale of assets to a third party
introduced to the Company by Consultant. Net proceeds shall equal
the total purchase price for the assets, subject to any adjustments
contained the purchase and sale agreement, net of transaction
costs. Purchase price adjustments shall not include payment of
intercompany debt, and transaction costs shall not include taxes or
other costs not directly related to the sale. Fees under this
Section 2.1(b) will be due and payable to Consultant
thirty (30) days following the receipt by the Company of such
net proceeds. Consultant shall be entitled to Fees with respect to
any such sale of assets that occurs after the Effective Date and on
or before ninety (90) days following any termination or
expiration of this Agreement. Consultant shall not be entitled to
any Fees with respect to any sale of assets that (i) occurs
more than ninety (90) days following any termination or
expiration of this Agreement or more than one year following the
Effective Date, whichever first occurs, or (ii) is made at any
time to a third party not introduced to the Company by Consultant.
For purposes of this paragraph, TransMontaigne Product Services
Inc. and its affiliates shall be deemed to be a third party
introduced to the Company by Consultant.
Penn Octane will be responsible for payment of Fees only with
respect to Services relating to Penn Octane. Rio Vista will be
responsible for payment of Fees only with respect to Services
relating to Rio Vista. With respect to Services relating to both
Penn Octane and Rio Vista, the Fees will be shared equally by Penn
Octane and Rio Vista unless otherwise determined by the Company.
Rio Vista will reimburse Penn Octane for any Fees that Penn Octane
pays to Consultant on Rio Vista’s behalf.
In the event of any disagreement between the Company and
Consultant with regard to the calculation of Fees, the amount of
Fees shall be conclusively determined by the Company’s
independent public accountants within thirty (30) days
following written request by either the Company or Consultant, and
the Fees will be due and payable ten (10) days following such
determination.
Nothing contained in this Agreement shall preclude the Company
from paying additional fees or compensation to Consultant in
connection with the completion of any transaction relating to the
Services. Any understanding regarding such additional fees or
compensation will be memorialized in a separate written agreement
between the parties. No additional fees shall be due or owing by
Company to Consultant in the absence of such a separate
agreement.
2.2 Expenses . Consultant shall provide receipts
for all actual, reasonable travel and other out-of-pocket expenses
incurred by Consultant as necessary in connection with the
performance of the Services by Consultant. Consultant agrees to
submit to the Company such documentation as may be necessary to
substantiate all such expenses and reimbursements for deduction by
the Company as reasonable and necessary under Section 162 of
the Internal Revenue Code. No expense claim submitted by Consultant
more than ninety (90) days after incurred shall be
reimbursed.
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2.3 Taxes. Fees do not include taxes. To the extent that
Consultant is required to pay any federal, state or local income,
sales, use, property or value-added taxes based upon the Fees
and/or the Services provided under this Agreement, such taxes shall
be the sole responsibility of Consultant.
Section 3: Term; Termination
3.1 Term . The initial term of this Agreement
shall be six (6) months beginning on the Effective Date unless
terminated sooner in accordance with the provisions of this
Section 3.1 . This Agreement shall automatically renew
for an additional six (6) months at the end of each 6-month
term unless terminated upon written notice to the other party at
least thirty (30) days before the end of such term. Each of
the Company and Consultant may terminate this Agreement, with or
without cause, at any time upon thirty (30) days’
written notice to the other party. Notwithstanding the foregoing,
the Company may revoke the authority of Consultant to act as a
representative of the Company at any time upon written notice to
Consultant. The provisions of this Agreement specified in
Section 10.12 shall survive the expiration or
termination of this Agreement.
3.2 Final Payments . Following termination of this
Agreement in accordance with Section 3.1 , any accrued,
but unpaid, Fees shall be shall be paid to Consultant in accordance
with Section 2.1 . Within thirty (30) days
following the date of such termination, Consultant shall submit a
final expense reimbursement request to the Company in accordance
with Section 2.2 .
Section 4: Confidentiality.
4.1 Duty to Maintain Confidential Information.
(a) The Company and the Affiliates have previously
furnished to Consultant, and may continue to furnish to Consultant,
such information, proprietary data and access to the
Company’s personnel and records (all such information and
access, "Information") as reasonably necessary and/or appropriate
for Consultant to perform the Services, the confidentiality of
which gives the Company and the Affiliates a competitive advantage
in its business. As used herein, the term "Information" is to be
broadly construed and includes, but is not limited to,
(i) presentations, ideas, trade secrets, processes, systems,
techniques, formulas, source and object code, data, programs,
know-how, flowcharts, methods, compounds, diagrams, drawings,
models, specifications, improvements, discoveries, developments,
designs, and other works of authorship, whether patented or
registered for trademark or copyright protections, if any, (ii)
information regarding marketing, sales, licensing, accounting,
product or service development, assets, competitive analyses,
unpublished financial statements, budgets, forecasts, prices,
costs, business plans, research and development plans, clients,
client marketing, research and any other confidential client
activity, suppliers, and employees, (iii) information relating
to potential acquisitions, dispositions and financing of the
Company and Affiliates, and (iv) any other information of the
type which the Company and/or the Affiliates have a legal
obligation to keep confidential or which the Company and/or
Affiliate treats as confidential or proprietary, whether or not
owned or developed by the Company or the Affiliates. The term
"Information" shall also include any and all such Information
pertaining to the Company, its Affiliates, and their respective
customers and suppliers.
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(b) During the time that this Agreement remains in effect
and at all times thereafter, Consultant agrees:
(1) to keep the Information confidential and not to copy,
publish, transmit, or disclose to others or allow any other party
to copy, publish, transmit, or disclose to others, any Information,
except in accordance with Consultant’s fiduciary duty to the
Company pursuant to this Agreement and in furtherance of the
interests of the Company and the Affiliates;
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(2) to use the Information exclusively for the purpose of
performing the Services under this Agreement and for no other
purpose; and
(3) that the Information is, shall be, and shall remain the
exclusive property of the Company and the Affiliates, and
Consultant shall neither have nor acquire any right, title, or
interest therein.
(c) The foregoing confidentiality obligations of Consultant
shall not apply to any information that is (i) a matter of
public knowledge (from a source or sources other than Consultant),
(ii) independently developed by
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