Back to top

REVISED CONSULTING AGREEMENT

Consulting Services Agreement

REVISED CONSULTING AGREEMENT | Document Parties: BMB Munai, Inc | Caspian Energy Consulting Ltd You are currently viewing:
This Consulting Services Agreement involves

BMB Munai, Inc | Caspian Energy Consulting Ltd

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.
Title: REVISED CONSULTING AGREEMENT
Date: 9/16/2008
Industry: Oil and Gas Operations     Sector: Energy

50 of the Top 250 law firms use our Products every day

REVISED CONSULTING AGREEMENT

 

THIS REVISED CONSULTING AGREEMENT (“Revised Agreement”) is entered into as of the 16 th day of September 2008, by and between BMB Munai, Inc., a company organized under the laws of Nevada (“Company”), and Caspian Energy Consulting Ltd, an international business company organized under the laws of British Virgin Islands, (“Consultant”). The Company and the Consultant are sometimes hereinafter referred to individually as a “Party” and collectively as the “Parties.”

 

RECITALS

 

 

(A)

The Company is the contractor under oil and gas exploration Contract No. 482 (“Contract”) with the Republic of Kazakhstan (“ROK”). The Company has interest in pursuing expansion of its oil and gas assets through acquisition of additional contiguous territory under the Contract, acquisition of territory under new contract with the ROK and/or acquisition of territory from private parties (“Acquisition(s)”).

 

 

(B)

The Parties entered into a consulting agreement dated as of November 19, 2007 (“November Agreement”) for services related to the Company’s oil and gas exploration activities.

 

 

(C)

On or about April 15, 2008, the ROK announced the intention to impose an export duty on crude oil production by certain oil exploration and production companies. The export duty was characterized by the ROK as distinct from the rent export tax and therefore, companies holding exploration contracts with the ROK that provided for exemption from rent export tax, such as the Company, would nevertheless be subject to pay the export duty.

 

 

(D)

The Parties acknowledged that the export duty would have the effect of reducing the intended benefits sought by the Company under the terms of the November Agreement. Rather than terminate the November Agreement, the Consultant verbally agreed to negotiate changes to the November Agreement after the final export duty regulations were promulgated by the ROK and the Company began paying export duty. Therefore, the Parties continued to work together under the terms of the November Agreement, subject to their understanding that some of its terms and conditions would be renegotiated.

 

 

(E)

The Consultant successfully negotiated a term extension until January 9, 2013 to the Contract under an Addendum #5 to the Contract executed by ROK on June 28, 2008.

 

 

(F)

The Company became subject to and began paying export duty to the ROK in June 2008. The Parties intend this Revised Agreement to supersede the November Agreement and to set forth the terms, conditions and covenants of their relationship.

 

1

 

 


 

The Parties covenant and agree as follows:

 

1.

THE CONSULTANT'S OBLIGATIONS

 

1.1

During the term of this Revised Agreement, the Consultant shall use its reasonable efforts in providing the following services to the Company, as directed by the Company’s CEO and the managing director of the Company’s subsidiary, Emir Oil, LLP, (collectively, the “Services”):

 

 

(a)

investigate and evaluate potential Acquisition candidates for the Company;

 

 

(b)

advise and confer with the Company’s technical staff regarding potential Acquisition candidates;

 

 

(c)

prepare all documentation and supporting materials for evaluation of potential Acquisition candidates by the Company as required for submission of applications for exploration and/or production contracts with various governmental agencies of the ROK and/or private parties;

 

 

(d)

assist the Company in the negotiation of terms, conditions and covenants of Acquisitions with various governmental agencies of the ROK and/or private parties; and

 

 

(e)

such related and ancillary services as requested by the Company.

 

1.1.1

The Consultant shall perform the Services, at all times, with diligence and in compliance with all applicable laws and regulations of the ROK and the United States of America. Consultant shall be responsible to obtain any necessary licenses or permits required by the Republic of Kazakhstan to perform the services rendered under this Revised Agreement. Consultant shall be responsible to pay for all services rendered by third-parties contracting with the consultant, except as may be otherwise agreed between the Company and Consultant in writing prior to engagement of such third-party service provider.

 

1.1.2

The Consultant's advice to the Company in respect of the Services shall be given orally or in writing. Consultant shall report to Mr. Gamal Kulumbetov, Company CEO and Teolush Tolmakov, general director of Emir Oil, LLP or to such other individuals as the Company may hereafter specify by written notice to Consultant. When requested, and not more than once each calendar quarter, Consultant shall provide Company with a written activities and status report, in which Consultant describes the Services it has performed since the last report. The Parties agree that the decision to consummate an Acquisition will be in the sole discretion of the Company and that the Consultant shall have no right to compensation of any kind in the event the Company elects not to enter into any Acquisition.

 

2

 

 


1.1.3

The Consultant shall act on a non-exclusive basis. The Company reserves the right to act on its own accord or with other consultants to identify prospects and properties and to purchase such properties. If the Company acting independent of the Consultant negotiates the acquisition of a property and the Company has not been introduced to the property through the efforts of the Consultant, such property acquisition will not be covered by this Revised Agreement and Consultant shall not be entitled to compensation with respect to such property, unless the board of directors of the Company agrees otherwise in writing. The Consultant may request and obtain from the Company written confirmation that a particular property will be subject to this Revised Agreement at any time after the prospective property has been identified by the Consultant. Such confirmation by the Company will be conclusive evidence that the Consultant will be entitled to Compensation under this Revised Agreement.

 

2.

COMPENSATION FOR EXPLORATION CONTRACT TERM EXTENSION

 

2.1

The Parties hereby agree that in lieu of “Bonus Shares” to be paid Consultant under the November Agreement, the Consultant will be issued shares for its services in connection with the June 28, 2008 Contract extension as follows:

 

 

(a)

The Consultant will be issued a total of 1,250,000 common shares of the Company.

 

 

(b)

The shares will be restricted shares and subject to the public resale restrictions of Rule 144 promulgated under the U.S. Securities Act of 1933.

 

 

(c)

The shares will be issued as soon as reasonably practical after the execution of this Revised Agreement and will be deemed fully earned and vested on delivery to the Consultant.

 

3.

COMPENSATION FOR TERRITORY EXTENSION

 

3.1       In the event that the Services performed by the Consultant result in the Company’s making one or more Acquisitions during the term of this Revised Agreement, the Consultant will be paid total compensation as follows:

 

 

(a)

a cash payment in the amount of four million dollars ($4,000,000 USD) shall be paid to the Consultant according to the following schedule:

 

 

i.

$1,000,000 shall be paid on the effective date of an Acquisition by the Company (“Closing Date”);

 

 

ii.

$1,000,000 shall be paid on the date six months after the Closing Date; and

 

 

iii.

$2,000,000 shall be paid on the date twelve months after the Closing Date; and

 

3

 

 


 

(b)

a share payment in restricted common shares of the Company shall be made to the Consultant based upon the value of the Acquisition property, which will be determined as follows:

 

 

i.

The value of the Acquisition property will be determined by reference to a 3D seismic study and a reserve/resource report of the Acquisition property by a petroleum engineering firm acceptable to the Company. If in the opinion of the Company there is no acceptable seismic study or engineering report on the Acquisition property at the Closing Date, then the Company will commission and complete, at its cost, the seismic study and engineering report within one year after the Closing Date;

 

 

ii.

The acquisition value (“Acquisition Value”) will be equal to the total barrels of resources and reserves, as defined and determined by the engineering report, multiplied by the following values:

A. Resources at $.50 USD per barrel;

 

B. Probable reserves at $1.00 USD per barrel; and

 

 

C. Proved reserves at $2.00 USD per barrel.

 

The number of shares to be issued to the Consultant shall be the Acquisition Value divided by the higher of $6.50 or the average closing price of the Company’s trading shares for the five trading days prior to the issuance of the reserve/resource report, provided that in no event shall the total number of shares earned under this Section 3 exceed more than a total of 4,000,000 shares. The Parties acknowledge and agree that the shares will not be registered with the SEC and will be deemed restricted shares. If there is no trading market for the shares at the date the share payment is to be made, then the Company, at its election, may pay the Consultant cash equal to the number of shares issuable multiplied by $6.50.

 

 

(c)

Notwithstanding the foregoing provisions of Section 3.1(a) and (b), in the event that an Acquisition is made with the ROK and the ROK charges any signing bonus or other upfront charge to the Company then the compensation payable to the Consultant shall be reduced by the amount of the signing bonus or other upfront charge to the Company. All amounts charged for signing bonus or other upfront charges shall be credited against the compensation payable under Section 3, as it becomes payable by the Company to the Consultant, as determined by the Company.

 

 

(d)

The compensation payable to the C


SITE SEARCH

AGREEMENTS / CONTRACTS

Document Title:

Entire Document: (optional)

Governing Law:(optional)
 

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Close this window