Exhibit 10.5
CONSULTING AGREEMENT
This Consulting Agreement (this
Agreement”) is between Harvest Natural Resources, Inc., a
Delaware corporation (the “Company”), and Kerry R.
Brittain, with a residence at 2403 Hidden Shore Drive, Katy, Texas
75450 (“Consultant”), and is dated on the latest date
set forth beside the signatures of the parties at the end of this
Agreement.
RECITALS :
A. The Company desires to engage
Consultant to render consulting services;
B. The Company and Consultant
wish to memorialize the terms and conditions upon which Consultant
is engaged to provide consulting services to the Company; and
C. The Company and Consultant
anticipate that the level of services Consultant will perform for
the Company after July 15, 2007 will permanently decrease to
no more than 20 percent of the average level of services
performed by Consultant for the Company over the 36-month period
immediately preceding July 16, 2007.
NOW, THEREFORE, the parties
hereto, intending to be legally bound, agree as follows:
1. SERVICES AND NATURE OF RELATIONSHIP
1.1 Engagement
. The Company hereby retains Consultant and Consultant hereby
accepts such appointment and agrees to perform the services covered
by this Agreement with all due skill and care on the terms and
conditions set forth in this Agreement. Consultant’s services
shall be provided in connection with such assignments as the
Company may make from time to time within the area of
Consultant’s expertise.
1.2 Reporting
Relationship and Assignment . Consultant shall
report to the President and Chief Executive Officer of the Company
or his or the Company’s designees.
1.3 Method of
Performing Services . Consultant, as an independent
contractor, shall determine the method, details, and means of
performing any services furnished pursuant to this Agreement, but
the services contemplated herein shall meet the approval of the
Company. Consultant will devote sufficient time, attention and
energies to the business and interests of the Company and
diligently and to the best of his ability perform such duties
incident to this Agreement, and perform such other duties as
requested commensurate with the terms of this Agreement.
1.4 Compliance With Law
and Company Policy. Consultant represents that he is
familiar with the safety and health rules of the Company and its
subsidiaries. Consultant shall comply with all applicable safety
and health rules, and policies, procedures and codes of conduct of
the Company and its subsidiaries, together with all
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applicable federal, state or local safety and health laws, rules,
regulations or orders in which the Company and its subsidiaries do
business.
Consultant acknowledges that he has
been provided copies of, and has read and understands the
Company’s Code of Business Conduct and Ethics (the
“Code”) and the Company’s Compliance Manual, and
Consultant agrees:
(a) to
comply with all policies of the Company and its subsidiaries,
including, without limitation, the Code and the Compliance
Manual;
(b) to
comply with all applicable laws and regulations, including, without
limitation, the laws and regulations of the United States and
Venezuela; and
(c) to
promptly report as provided in the Code any violation or suspected
violation of any law, regulation or Company policy.
This clause will not require the
Company to police Consultant’s compliance with the Code,
laws, regulations or company policies and shall not impose any
obligation on the part of the Company or its affiliates under such
laws, regulations or Company policies. Nothing contained in this
provision shall be interpreted as enlarging the legal duty of the
Company or its affiliates to Consultant or alter the status of
Consultant as set forth in this Agreement.
The preceding paragraphs of this
provision are agreed to by both the Company and Consultant to be of
the highest importance. A breach or violation of any of the terms
of this provision by Consultant will be considered to be a material
breach of this Agreement.
1.5 No Authority to
Bind . Consultant shall have no authority to obligate the
Company in any manner whatsoever in the absence of specific prior
written authority from the President and Chief Executive Officer of
the Company permitting Consultant to do so, including without
limitation incurring expenses or entering into contracts.
1.6 Status as
Independent Consultant . Consultant acknowledges and agrees
that, in performing services pursuant to this Agreement, Consultant
shall be serving as an independent contractor. Consultant agrees
that Consultant is not and will not become an employee of the
Company or any of its subsidiaries while this Agreement is in
effect. Consultant agrees that the provision of services pursuant
to this Agreement will not entitle Consultant to any rights or
benefits afforded to the employees of the Company and its
subsidiaries, including such benefits as worker’s
compensation insurance, health insurance, sick leave, retirement
benefits or any other employment benefit. Consultant agrees that
the indemnification provisions of Section 5.1 shall apply to
any claims relating to the subject matter of this
Section 1.5.
1.7 Payment of
Taxes . Consultant agrees that he is solely responsible for
paying when due all income taxes, including estimated taxes, as a
result of or in connection with the compensation paid by the
Company to Consultant for services
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rendered
under this Agreement. The Company shall issue applicable U.S. or
other tax forms or reports to Consultant with respect to the
compensation paid pursuant to this Agreement. Consultant hereby
indemnifies, and undertakes to defend the Company and hold it free
and harmless from and against any demands or claims for any taxes,
interest or penalties assessed by any taxing authority with respect
to sums paid to Consultant pursuant to this Agreement.
2. TERM AND TERMINATION
2.1 Term. This
Agreement shall become effective on July 16, 2007. The term of
this Agreement shall commence on July 16, 2007, and shall
continue through June 30, 2008 (the “Term”).
2.2
Termination. This Agreement may be terminated by
either party at any time for material breach by the other party,
upon ten (10) days written notice, if the breaching party has
failed to remedy the breach leading to the termination during that
ten (10) day period.
3. FEES AND EXPENSES
The Company shall compensate
Consultant for services rendered pursuant to this Agreement as
follows:
3.1 Rates . The
Company agrees to compensate Consultant for services provided
pursuant to this Agreement at the rate of $200 per hour of service
rendered under this Agreement, except when providing services
requiring travel outside of Houston, in which case the rate will be
$2,000 per day including travel time.
3.2 Expense
Reimbursements . The Company agrees to reimburse Consultant
for reasonable business expenses incurred by Consultant in
performing services pursuant to this Agreement; provided, however,
that Consultant shall have furnished the Company promptly with
receipts or other documentation concerning any reimbursable
business expenses.
3.3 Timing of
Payments. Consultant shall provide the Company with a
statement describing his services and indicating the number of
hours (or, in the case of travel outside of Houston, the number of
days) of service he has provided under this Agreement in each
calendar month within ten (10) days after the end of that
calendar month. The Company shall pay Consultant the amount shown
on any such statement within thirty (30) days after receipt.
Payments to Consultant for reimbursement for expenses incurred
shall be made within thirty (30) days after the
Company’s receipt of an expense statement.
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4. ADDITIONAL COVENANTS BY CONSULTANT
4.1 Property of the
Company .
4.1.1 Consultant covenants and agrees that upon the
termination of this Agreement for any reason or, if earlier, upon
the Company’s request, he shall promptly return all Property
which had been entrusted or made available to Consultant by the
Company.
4.1.2 The term “Property” shall mean all
records, files, memoranda, reports, price lists, drawing, plans,
sketches, keys, codes, computer hardware and software and other
property of any kind or description prepared, used or possessed by
Consultant during the term of this Agreement relating to the
Company or its business, operations or prospects (and any
duplicates of any such property) together with any and all
information, ideas, concepts, discoveries, and inventions and the
like conceived, made, developed or acquired at any time by
Consultant individually or with others during the term of this
Agreement relating to the Company or its business, operations or
prospects.
4.2 Confidential
Information . Except as required in the performance of
Consultant’s obligations hereunder, or otherwise specifically
required by law, or with the prior written consent of the Company
on a case-by-case basis, Consultant shall hold confidential and
shall not in any manner disclose, use for personal benefit, or
directly or indirectly use for the benefit of any other person,
Confidential Information (defined below) that has come or shall
hereafter come into Consultant’s possession. Consultant
recognizes the importance to the Company of protecting its
Confidential Information without regard to the passage of time, and
further recognizes that this restriction shall continue in full
force and effect during the Term of this Agreement and for a period
of five (5) years after the end of the Term, except as to
Confidential Information whic
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