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EXHIBIT 10.13
PROFESSIONAL SERVICES RETAINER
CONTRACT
Strategic American Oil
Corporation and Steven L Carter
This
Professional Services Retainer Contract (the "Contract") is dated
for reference as fully executed and effective on this 27
th day of December, 2006 (the "Effective Date"
hereof).
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The parties (each a "Party" and, collectively, the
"Parties") to this Contract are:
(a) Strategic American Oil
Corporation, a Nevada Corporation qualified to do business in the
State of Texas (also the "Company"); and
(b)
Steven L. Carter, a
resident of Portland, San Patricio County, Texas USA (also
"Carter").
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- Carter is a licensed professional
petroleum engineer engaging in the business of developing and
exploiting mineral properties for his own account and performing
engineering services as a consultant to others;
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- The Company is engaged in the business of exploring for,
developing and exploiting deposits of oil, gas and other minerals
and desires to pursue such business in Texas;
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- The Company desires to retain the services of Carter as an
independent contractor to assist the Company in the conduct of its
business and to appoint Carter to serve as Vice-President of
Operations of the Company; and
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- Carter is willing as an independent contractor to provide
certain services to the Company on a non-exclusive basis on the
terms set forth below.
In
consideration of the Premises and the mutual promises and covenants
hereinafter set forth, the Company retains Carter to provide, and
Carter agrees to provide, services to Company upon the following
terms:
1.
Scope of Services : Carter will, during the continuance of
this Contract:
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(a) on
request of the Company from time to time provide engineering and
consulting services to evaluate, and make recommendations
regarding, mineral prospects identified by the Company or presented
to the Company by third parties and to furnish engineering reports
to Company in respect of such prospects;
Professional Services
Retainer Contract
Page 2
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(b)
present to the Company from time to
time mineral prospects originated, acquired or identified by Carter
and recommended to the Company by Carter; and
(c) accept appointment as, and will serve as, the
Vice-President of Operations of the Company, and as such will
coordinate and supervise oil and gas exploration and production
activities of the Company;
(collectively, the "Services" herein).
In
performing Services hereunder, Carter will report to, receive
instructions and requests for Services from, and may rely upon
instructions and requests for Services from, the President of
Company and/or such other person as may be designated to Carter in
writing by the President of the Company, from time to time in the
President's sole and absolute discretion.
2.
Compensation :
For the
Services performed hereunder, and during the Initial Term (as
hereinafter defined) and any Renewal (as hereinafter defined)
during the continuance of this Contract, the Company will pay to
Carter a retainer fee of US $10 t OOO.00 per
month payable on the last day of each month beginning on December
31, 2006 and continuing each month thereafter.
In
addition, during the Initial Term and any Renewal and during the
continuance of this Contract, and subject only to the monetary
limit following for which prior Company approval will be required,
the Company will also reimburse to Carter all direct and reasonable
expenses which are directly incurred by Carter on behalf of the
Company while providing Services to the Company hereunder
(collectively, the "Expenses''), and which Expenses shall include,
but not be limited to, the following:
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(a) a mileage charge of US $0.485 per mile for all
private vehicle travel incurred in providing the
Services;
(b) all commercial air, train, bus or taxi fares
incurred in providing the Services. Air travel outside of the State
of Texas shall be in first class or business class
accommodation;
(c) all third party charges for meals, lodging and
other reasonable travel expenses incurred in providinq the
Services;
(d) actual charges incurred by Carter for cellular
telephone usage by Carter while away from his Corpus Christi, Texas
office, incurred in providing the Services;
(e) all health insurance premiums paid by Carter for
coverage on Carter, unless Carter shall be covered by Company's
health insurance. Carter shall have the right at his election at
any time to choose to be covered by Company's health insurance plan
provided that he meets the eligibility requirements of such plan;
and
Professional Services
Retainer Contract
Page 3
Prior Company approval will be required
in connection with any single Expense to be incurred by Carter in
providing the Services which is in excess of US $l
r OOO. In addition, all of such Expenses shall be invoiced
to the Company by Carter monthly and shall be due and payable by
Company immediately upon receipt of the invoice by the Company. All
sums owed to Carter shall be payable in current Portland, Texas, funds in
Portland, Texas, in such manner as may be directed by Carter to the
Company.
3. Additional
Compensation: Right and Option :
As additional compensation to Carter,
and in order to induce Carter to enter into this
Contract:
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(a) the Company hereby grants to Carter the right
r upon execution of this Contract, to purchase and
acquire 500 r OOO common shares (each a "Sharer') of the
common capital stock of the Company for its par value; US $0.001
per Share; and Carter tenders herewith the price of such Shares; US
$500 in cash; and the Company hereby acknowledges receipt and
acceptance of such payment and agrees promptly to issue and deliver
to Carter a certificate or certificates representing 500
r OOO fully paid and non-assessable Shares of common
capital stock of the Company which Carter understands will be
"restricted stock" within the meaning as set forth under the United
States Securities Act of 1933, as amended (the "Securities Act'');
and
(b)
during the Initial Term and any Renewal and during
the continuance of this Contract the Company hereby grants to
Carter the further right and option (herein the "Option"), at
Carter's sale election, to purchase and acquire up to an additional
600,000 shares of the common capital stock of the Company (each an
"Option Share": and all or any part), which Carter also understands
to be restricted stock, for a purchase price of U.S. $0.35 per
Option Share; with such Option being exercisable by Carter during
the Initial Term and any Renewal and during the continuance of this
Contract on orafter 5:00 p.m. (Portland, Texas, U.S.A., time) on
each of the following dates and in the following
denominations:
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(i) Carter shall have the initial right and Option to
acquire up to an initial 100,000 of such Option Shares at any time
on or after the Effective Date of this Contract;
(ii) Carter shall have the additional right and Option to
acquire up to an additional 125,000 of such Option Shares at any
time on or after the date which is four months after the Effective
Date of this Contract;
Professional Services
Retainer Contract
Page 4
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(iii)
Carter shall have the further right
and Option to acquire up to a further 125,000 of such Option Shares
at any time on or after the date which is 12 months after the
Effective Date of this Contract;
(iv) Carter
shall have the additional right and Option to acquire up to an
additional 125,000 of such Option Shares at any time on or after
the date which is 18 months after the Effective Date of this
Contract; and
(v)
Carter shall have the
final right and Option to acquire up to the final 125,000 of such
Option Shares at any time on or after the date which is 23 months
after the Effective Date of this Contract;
Notwithstanding
any other provision of this Agreement, Carter's right to acquire
such Option Shares under the Option shall expire at the end of the
Initial Term and any Renewal of this Contract unless this Contract
is further renewed. In this regard Carter acknowledges that the
Company makes no representations as to any resale or other
restriction affecting the Shares, the Option and the Option Shares
underlying the exercise of the same and that it is contemplated
that the Shares and the Option being issued by the Company to
Carter are in reliance upon the registration and prospectus
exemptions contained in certain sections of the Securities Act and
regulations thereunder which impose a trading restriction in the
United States on the Shares, the Option and on the Option Shares
underlying the exercise of the same for a period of up to 24 months
from the date of issuance of the Shares, the Option and the date of
issuance of the Option Shares upon exercise. Carter also
acknowledges that the obligation of the Company to issue the Shares
and the Option Shares will be subject to the Company being
satisfied that an exemption from applicable registration and
prospectus requirements is available under the Securities Act and
all applicable securities laws, in respect of Carter and the
shares, the Option and the Option Shares; and the Company shall be
relieved of any obligation whatsoever to issue any Shares or Option
Shares if the Company reasonably determines that suitable
exemptions are not available to it.
Carter
also acknowledges that neither the Shares, the Option nor any of
the Option Shares underlying the exercise of the same have been
registered under the Securities Act or any state securities laws,
and, furthermore, that the Shares, the Option and any Option Shares
underlying the exercise of the same must be held indefinitely
unless subsequently registered under the Securities Act or an
exemption from such registration is available. Carter also
acknowledges that the certificate(s) representing the Shares any
Option Shares will be stamped with the following legend (or
substantially equivalent language) restricting transfer in the
following manner if such restriction is required by the appropriate
regulatory authorities:
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"The securities represented by this certificate
have not been registered under the United States Securities Act of
1933, as amended, or the laws of any state, and have been issued
pursuant to an exemption from registration pertaining to such
securities and pursuant to a representation by the security holder
named hereon that said securities have been acquired for purposes
of investment and not for purposes of distribution. These
securities may not be offered, sold, transferred, pledged or
hypothecated in the absence of registration, or the availability of
an exemption from such registration. The stock transfer agent has
been offered to effectuate transfers only in accordance with the
above instructions.";
Professional Services
Retainer Contract
Page 5
and Carter consents
to the Company making a notation on its records or giving
instructions to any transfer agent of the Company in order to
implement the restrictions on transfer set forth and described
hereinabove.
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Carter also acknowledges that:
(c) the
Shares, the Option and any Option Shares are presently restricted
securities within the meaning of "Rule 144/1 promulgated under
the Securities Act;
(d)
the exemption from
registration under Rule 144 will not be available in any event for
at least one year from the date of issuance of the Shares, the
Option and any Option Shares to Carter and even then will not be
available unless (i) a public trading market then exists for the
common stock of the Company and (ii) other terms and condition of
Rule 144 are complied with; and
(e) any
sale of the Shares or Option Shares may be made by Carter only in
limited amounts in accordance with such terms and conditions.
The
number of Option Shares covered by Option granted to Carter as set
forth above refer to shares of common stock of Company as they
exist on the date of this Contract; and the number of Option Shares
covered by such Option and the Option price thereof shall be
proportionately adjusted for any stock split, stock dividend,
recapitalization, reorganization, liquidating distribution or other
transaction changing the par value, nature or rights of the
Company's common stock as it now exists or converting such stock
into other securities, so that Carter will receive the benefit of
any such change in shares of the Company's common stock in the same
manner as if he had been a shareholder of the Option Shares at the
time of each such event.
4.
Independent Contractor :
In
performing the Services to the Company hereunder, Carter shall be
an independent contractor and not a common-law employee of Company.
Carter shall perform such Services on his own time and schedule at
the place or places of his choice. He shall not be under the
supervision or direction of the Company or of any employee or
officer of Company as to the manner of performing such Services
hereunder; however, in performing the Services hereunder Carter
will report to, receive instructions and requests for Services
from, and may rely upon instructions and requests for Services
from, the President of Company. The Company is mainly interested in
the results obtained by Carter and not the methods or manner of
performing the Services utilized by carter as long as such Services
are performed faithfully, diligently, to the best of Carter's
abilities and in the best interests of the Company. Carter shall
not receive, nor be provided With, any benefits by the Company
except only as expressly set forth herein. It is expected that
Carter will not be subject to any withholding tax from the Company
as a consequence of this Contract.
Professional Services
Retainer Contract
Page 6
5.
Non-Exclusive Services
:
Performing Services hereunder shall not
be Carter's only business activity; and the Company does not have
exclusive rights to Carter's Services. Carter shall be free to
continue to engage in business for his own account in respect of
all properties in which Carter currently owns an interest and/or
for which Carter is an operator without limitation and without
obligation to Company in respect thereto. In this regard, and those
purposes, it is hereby acknowledged and agreed that Carter is
currently engaged in and/or is involved with others in respect of
the development of certain projects which are inclusive of those
identified on Schedule I attached hereto, and Carter shall be free
to continue to deal with, and engage in business in respect of,
each such project which is set forth in Schedule I without
limitation and without obligation in respect thereto.
Carter shall devote so much of his
time, energy and efforts to performance of Services under this
Contract as shall be reasonably required timely to perform such
Services as are requested by Company according to the scope of such
Services and schedule as shall be agreed between the Parties from
time to time.
6.
Confidentiality :
Carter will not, except as authorized
or required by Carter's duties hereunder, reveal or divulge to any
person or entity any information concerning the organization,
business, finances, transactions or other affairs of the Company or
of any of the Company's respective subsidiaries which may come to
Carter's knowledge during the continu
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