EXHIBIT 10.1

 

CONSULTING AGREEMENT

 

This CONSULTING AGREEMENT (this “Agreement”) is made and entered into as of June
1, 2014 (the “Effective Date”), by and between Virtus Oil & Gas Corp., a Nevada
corporation (the “Company”), and Brett A. Murray & Associates, Inc., a Colorado
corporation (“Consultant”).

 

RECITALS:

 

A.          The Company is a development stage company seeking oil and gas
exploration opportunities.

 

B.          Consultant provides the services of a professional “landman” for oil
and gas exploration companies and has expertise in exploration and production
activities.

 

C.          On November 14, 2013, the Company entered into an agreement to
purchase an 87.5% working interest in oil and gas leases covering approximately
36,787 acres in Iron County, Utah; and on May 6, 2014, the Company entered into
another agreement to purchase an 87.5% working interest in oil and gas leases
covering approximately 18,690.50 acres in Iron County, Utah (as used herein, the
term “Property” refers to the aggregate 55,477.50 acres in Iron County, Utah
comprised by the two agreements).

 

D.          The Company desires to engage Consultant to provide certain
consulting services with respect to the Property, and Consultant desires to
accept such engagement, on the terms and conditions set forth in this Agreement.

 

AGREEMENT:

 

NOW THEREFORE, in consideration of the mutual covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

 

1.          Engagement. The Company hereby engages Consultant as an independent
consultant to provide certain consulting services with respect to the Property
as more fully described on Exhibit A attached hereto (collectively, the
“Services”). Consultant will provide the Services through one or more of its
employees, as Consultant may determine in its reasonable discretion from time to
time; provided, that the person who shall serve as the principal contact and
provide oversight of all Services shall be its President, Brett A Murray
(“Murray”), along with consultants or employees of Consultant who may provide
occasional administrative services in direct support of Murray’s efforts.
Consultant shall provide no less than forty-five (45) days’ prior written notice
to the Company of any change in its principal contact for the Services. During
the Consulting Term (as defined in Section 3 below), Consultant shall render the
Services to the Company upon the terms and conditions set forth herein. The
Company will not treat Consultant as its employee for federal tax purposes or
any other purposes. Consultant will not allow any of its employees, consultants
or officers to hold himself or herself out as an employee of the Company. This
engagement does not create an agency relationship, and neither Consultant nor
any of its officers, employees or consultants shall have authority to bind the
Company without the Company’s prior consent or authorization (including any
authorization by email). Consultant shall not have the right to participate in
management, policy affairs, day-to-day decisions, or make any statements,
assurances or commitments on the Company’s behalf, other than as reasonably
related to the Services agreed to and described on Exhibit “A.” Consultant and
Murray each hereby consents to have its and his name and bio listed on the
Company’s website and in the Company’s marketing materials.

 

1

 

 

2.          Method of Performance. During the Consulting Term, the principal
contact for Consultant (i.e., initially Murray) shall have the title of “Chief
Operations Officer” of the Company and shall provide the Company with the
Services as more fully described on Exhibit A attached hereto. Consultant, as an
independent contractor, may determine the method, manner and means of performing
the Services to be carried out for the Company. In performing the Services,
Consultant and each of its employees shall (a) act in the Company’s best
interest at all times, (b) conduct themselves at the highest professional
standards of ethics and integrity, (c) use their good faith efforts and skills
to preserve the business of the Company and the goodwill of employees and
persons having business relations with the Company, (d) comply with all written
Company codes of conduct and all written Company policies and procedures that
may be implicated by their provision of the Services, and (e) conduct the
Services in compliance with all applicable state and federal laws.

 

3.          Term. Unless extended pursuant to this Section or terminated earlier
pursuant to Section 4 below, the initial period of Consultant’s engagement under
this Agreement shall expire on the day prior to the one (1) year anniversary of
the Effective Date (the “Initial Term”). Upon expiration of the Initial Term,
this Agreement will automatically renew for consecutive one (1) year terms (each
a “Renewal Term”) unless either party provides the other party written notice of
its intention to not to renew this Agreement at least thirty (30) days prior to
the end of the Initial Term, or at least sixty (60) days prior to the end of any
Renewal Term once the Agreement has been continued beyond the Initial Term. The
period from the Effective Date until the end of the Initial Term, or any
applicable Renewal Term, as the case may be, is hereinafter referred to as the
“Consulting Term.”

 

4.          Termination.

 

(a)          Early Termination. In the event any party fails to comply with any
of the terms of this Agreement and fails to cure such non-compliance to the
reasonable satisfaction of the non-breaching party within fifteen (15) days
after receipt of written notice of such breach, the non-breaching party may
immediately terminate this Agreement.

 

(b)          Termination for Cause. The Company may immediately terminate this
Agreement for “cause” by giving Consultant written notice of such conduct and
the Company’s intention to terminate. For purposes of this Agreement, “cause”
shall mean, with respect to Consultant (including for this purpose any of the
following actions taken by Murray or any other employee), the commission of
fraud against the Company, or the misappropriation, theft or embezzlement of the
assets of the Company, or the performance of illegal or fraudulent acts,
criminal conduct, or willful misconduct materially injurious to the business of
the Company.

 

2

 

 

(c)          No Cause Termination.

 

(i)          During the Initial Term, this Agreement may be terminated at any
time by either party by providing the other party with at least thirty (30) days
written notice of such party’s intention to terminate this Agreement.

 

(ii)          During any Renewal Term, this Agreement may be terminated at any
time by either party by providing the other party with at least sixty (60) days
written notice of such party’s intention to terminate this Agreement.

 

(iii)          During any notice period, Consultant agrees to use its reasonable
best efforts to continue work for the Company, and the Company agrees to
continue compensating Consultant until the termination date with the same
compensation as before the notice was given.

 

(d)          Effect of Termination. Upon expiration or termination of this
Agreement, neither party shall have any further obligations hereunder, except
for obligations incurred prior to the date of expiration or termination, and
obligations, promises, or covenants contained herein which expressly extend
beyond the term of this Agreement, including, but not limited to Sections 7 and
8 below.

 

5.          Compensation for Services.

 

(a)          Consulting Fee. During the Consulting Term, the Company will pay to
Consultant a monthly fee in the amount of Nine Thousand Dollars ($9,000) per
month (the “Consulting Fee”) for performing the Services, based upon an
estimated average of two (2) days of work per week. The Consulting Fee shall be
paid monthly in arrears no later than the fifth (5th) day of the month
immediately following the calendar month during which the Services were
performed.

 

(b)          Stock Issuance. In addition to the Consulting Fee, the Company will
issue to Consultant up to two million (2,000,000) shares of the Company’s common
stock, $0.001 par value per share (“Common Stock”), on the following schedule:
(i) one hundred twenty five thousand (125,000) shares of Common Stock on the
Effective Date; (ii) three hundred seventy five thousand (375,000) shares of
Common Stock on the one (1) year anniversary of the Effective Date; and (iii)
two hundred fifty thousand (250,000) shares of Common Stock on each six-month
anniversary thereafter, up to a total of two million (2,000,000) shares
(collectively, the “Shares”). This Agreement must remain in effect on the date
Shares are to be issued to Consultant for Consultant to be eligible to receive
the Shares. Upon the termination of this Agreement, Consultant will not be
eligible to receive any Shares not previously issued to Consultant.

 

3

 

 

(c)          Commission Compensation. Consultant is eligible to receive
commission compensation based on “Transactions” (defined below) entered into
between the Company and an “Eligible Contact” (defined below) related to the
Property and/or “Other Properties” (defined below).

 

The term “Transactions” or “Transaction” as used herein refers to the entry by
the Company into an agreement or transaction that results in the Company
acquiring by lease or purchase a working, royalty, or other ownership interest
in any mineral lease or other real property on which minerals are capable of
being exploited, or the Company selling or leasing such an interest to a third
party for value, including by way of example, any sales agreements, purchase
contracts, and mineral leases.

 

The term “Eligible Contact” as used herein refers to individuals whose original
contact with the Company is through introduction by Consultant. Entities who
have previously done business with the Company and/or current employees of the
Company (regardless of whether such prior business was conducted while the
employee was employed by the Company) are not “Eligible Contacts.”

 

The term “Other Properties” as used herein refers to property that the Company
and Consultant agree in writing will be subject to this Section 5(c). The term
“Other Properties” does not include the Property, unless there is a sale or
other disposition of the Company’s rights in the Property to a third party for
value.

 

With respect to a Transaction or Transactions for the sale, lease, or other
disposition of the Property or Other Properties by the Company, the Company will
pay to Consultant a commission equal to 8% of the “Net Sale Price” (defined
below) paid by the Eligible Contact(s) to the Company. The “Net Sale Price
Value” is defined as the gross purchase price paid in cash or drilling
commitments by the Eligible Contact(s) to the Company (or its designee) pursuant
to the Contract(s), less brokerage and other professional fees associated with
the Transaction or Transactions. The 8% commission will be paid by the Company
in cash within thirty (30) days after the closing and the Company’s receipt of
the proceeds from the Transaction or Transactions.

 

With respect to a Transaction or Transactions for the purchase, lease, or other
acquisition of Other Properties by the Company, the Company will pay to
Consultant a commission equal to 8% of the Net Purchase Price (defined below)
paid by the Company to the Eligible Contact(s). The “Net Purchase Price Value”
is defined as the gross purchase price paid in cash or drilling commitments by
the Company pursuant to the Contract(s), less brokerage and other professional
fees associated with the Transaction or Transactions. The 8% commission will be
paid by the Company to Consultant in cash at the same time as the Company’s
other payments are due pursuant to the Transaction or Transactions.

 

With respect to lease agreements on the Property, the Company will assign to
Consultant a 1% overriding royalty interest free and clear of all transportation
expenses and other deductions.

 

4

 

 

(d)          No Benefits. Consultant is an independent contractor and, as such,
Consultant shall not be entitled to participate in any employment-related
benefits that may be provided by the Company, including but not limited to,
workers’ compensation insurance, unemployment compensation insurance, vacation
or sick pay, pension or profit sharing benefits, or any type of health, life or
disability insurance.

 

(e)          Business Expense Reimbursement. Consultant will be reimbursed for
all customary and reasonable expenses actually incurred by it in the performance
of the Services as set forth in this Section 5(e). Consultant must obtain prior
written approval from the CEO of the Company to be reimbursed for a single
expense in excess of $1,000, or aggregate quarterly expenses in excess of
$5,000. Consultant must provide the Company with receipts, or other sufficient
documentation, regarding expenses to receive reimbursement. Such reimbursement
will be paid by the Company within ten (10) business days of receiving proper
documentation from Consultant.

 

6.          Representations and Warranties. Each of Consultant and Murray
represents and warrants to the Company as of the Effective Date as follows:

 

(a)          The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by Consultant. This Agreement has been duly executed and
delivered by Consultant, and constitutes a legal, valid and binding obligation
of Consultant enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws and subject
to the limitations imposed by law or equitable principles affecting the
availability of specific performance, injunctive relief and other equitable
remedies. Consultant is not contractually prohibited from providing the Services
to the Company;

 

(b)          Consultant is acquiring the Shares for investment for his own
account, not as a nominee or agent, and not with the view to, or for resale in
connection with, any distribution thereof;

 

(c)          Consultant has no present intention of selling, granting any
participation interest in, or otherwise distributing the Shares;

 

(d)          Consultant has received all information he considers necessary or
appropriate for deciding whether to acquire the Shares;

 

(e)          Consultant has had an opportunity to ask questions and receive
answers from the Company regarding the Company’s business, management, financial
affairs and the terms and conditions of the issuance of the Shares;

 

(f)          Consultant is sophisticated and well-informed and has such
knowledge and experience in financial and business matters in general, and in
investments in businesses similar to the Company in particular, as are necessary
to enable him to evaluate the merits and risks of an investment in the Company;

 

5

 

 

(g)          Consultant has no need for liquidity in his investment in the
Company and he is able to bear the risk of such investment for an indefinite
period.  Consultant’s present financial condition is such that he is under no
present or contemplated future need to dispose of any portion of the Shares; and

 

(h)          Consultant understands that the Shares have not been registered
under the Securities Act of 1933, as amended, that the Shares are “restricted
securities” under applicable U.S. securities laws and that, pursuant to these
laws, Consultant must hold the Shares indefinitely, unless (i) the sale or other
transfer of the Shares has been registered with the Securities Exchange
Commission and qualified by state authorities, or (ii) an exemption from such
registration and qualification requirements is available.

 

7.          Consultant Obligations. Consultant shall be solely liable for and
shall bear all costs and expenses arising from (i) the breach of any covenant,
obligation, representation or warranty of Consultant under this Agreement; (ii)
the negligence or willful misconduct of Consultant in connection with
Consultant’s performance of the Services during the Consulting Term; and/or
(iii) the Company’s treatment of Consultant as an independent contractor rather
than treating Consultant as an employee for tax purposes. Notwithstanding
anything to the contrary in this Agreement or the constituent documents of the
Company, the Company shall have no obligation to indemnify or defend Consultant
with respect to any such cost or expense.

 

8.          Confidential Information. The Company will provide Consultant and
its employees, including Murray, with certain Confidential Information (as
defined below) in order to allow Consultant to perform the Services. Each of
Consultant and Murray acknowledges that the Confidential Information is the
property of the Company. Therefore, neither Consultant nor Murray shall disclose
or permit to be disclosed, without the prior written consent of the Board of
Directors or Chief Executive Officer of the Company, any Confidential
Information other than as necessary to perform the Services. Each of Consultant
and Murray agrees that during the Consulting Term and following the termination
of this engagement with the Company for any reason, they will not directly or
indirectly use any Confidential Information for any reason other than the
advancement of the Company’s business interests. For purposes of this Agreement,
the term “Confidential Information” means, collectively, all information and
data regarding the Company and its officers, directors, managers, shareholders,
partners, employees, affiliates, joint venturers, agents, representatives,
independent contractors, subcontractors, clients, customers, vendors, suppliers,
developers, lenders, investors, budgets, research, analysis, studies, real and
personal properties, intellectual properties, licenses, license agreements,
projects, expenses, fees, charges, pricing, assets, services, computer hardware
and software, data files, spreadsheets, operations, financial statements,
marketing plans, methods, processes, business plans, and financial performance,
at any time obtained by Consultant in connection with Consultant’s engagement by
the Company. Notwithstanding the foregoing, the term Confidential Information
shall not include any information that (a) is or becomes generally available to
the public (other than as a result of violation of this Agreement by Consultant
or any of its employees), or (b) Consultant receives on a nonconfidential basis
from a source other than the Company that is not known by Consultant to be bound
by an obligation of secrecy or confidentiality. If Consultant is requested in
any legal proceeding to disclose any Confidential Information, Consultant agrees
to give the Company reasonable notice of such request so that the Company may
seek an appropriate protective order. If Consultant is nonetheless compelled to
disclose any Confidential Information by a court, subpoena, legal proceeding or
governmental body having the authority to order such disclosure, Consultant may
disclose the Confidential Information without liability hereunder; provided,
however, that Consultant gives the Company written notice of the Confidential
Information to be disclosed as far in advance of its disclosure as is
practicable and, upon the Company’s request, Consultant uses its good faith
efforts to obtain assurances that confidential treatment will be accorded to the
Confidential Information.

 

6

 

 

9.          Return of Property to the Company. Upon the termination of this
engagement with the Company for any reason, Consultant agrees to promptly return
to the Company all Company-owned property in its possession or control or the
possession or control of any employee, including without limitation, all
Confidential Information. After the termination of this engagement with the
Company, Consultant will not retain copies of any Confidential Information or
any other documents or property belonging to the Company.

 

10.          Independent Contractor Status. Consultant shall be an independent
contractor and not an employee, agent, joint venturer, or partner of the Company
by virtue of this Agreement. Nothing in this Agreement shall be interpreted or
construed as creating or establishing the relationship of employer and employee
between the Company, on the one hand, and Consultant on the other hand. Neither
Consultant nor the Company has any authority to act for or on behalf of the
other, nor to bind the other to any contract or in any other manner without the
express approval in writing of the other. The Company shall not be required to
pay on account of Consultant or any of its employees any costs, expenses or
claims associated with the payment, on account of Consultant, of any
unemployment tax or other employees’ taxes required under law to be paid with
respect to Consultant (or such employees); nor shall the Company be required to
withhold any monies from any payments made hereunder to Consultant for income
tax purposes or with respect to any other applicable deductions required by law.

 

11.          Choice of Law. The parties agree that this Agreement shall be
construed under the substantive laws of the State of Texas, without regard to
its conflicts of law principles.

 

12.          Jurisdiction and Venue. Any judicial proceeding brought by or
against either of the parties to this Agreement on any dispute arising out of
this Agreement or any matter relating thereto shall be brought in any federal or
state court sitting or having jurisdiction in Dallas County, Texas, and by
execution and delivery of this Agreement, each of the parties hereto hereby
accepts for itself the exclusive jurisdiction and venue of the aforesaid courts
as trial courts, and irrevocably agrees to be bound by any final non-appealable
judgment rendered in connection with this Agreement. The provisions of this
Section 12 shall survive expiration or termination of this Agreement, regardless
of the cause of such termination.

 

13.          Severability. If any provision of this Agreement is declared or
found to be illegal, unenforceable, or void, in whole or in part, then all
parties will be relieved of all obligations thereunder, but only to the extent
such provision is illegal, unenforceable, or void. The parties intend that this
Agreement will be deemed amended by modifying any such illegal, unenforceable,
or void provision to the extent necessary to make it legal and enforceable while
preserving its intent, or if such is not possible, by substituting therefor
another provision that is legal and enforceable and achieves the same
objectives. Notwithstanding the foregoing, if the remainder of this Agreement
will not be affected by such declaration or finding and is capable of
substantial performance, then each provision not so affected will be enforced to
the extent permitted by law.

 

7

 

 

14.          Waiver. No delay or omission by either party to this Agreement to
exercise any right or power under this Agreement will impair such right or power
or be construed as a waiver thereof. A waiver by any party to this Agreement of
any of the covenants to be performed by any other party or any breach thereof
will not be construed to be a waiver of any succeeding breach thereof or of any
other covenant contained in this Agreement. All remedies provided for in this
Agreement will be cumulative and in addition to and not in lieu of any other
remedies available to either party at law, in equity or otherwise.

 

15.          No Assignment. Neither this Agreement nor any right or interest
hereunder shall be assignable by Consultant or its beneficiaries or legal
representatives without the Company’s prior written consent. This Agreement may
not be assigned by the Company except with Consultant’s prior written consent.
Any attempted assignment without the requisite consent shall be void and of no
effect.

 

16.          Notices. Any notices, consents, demands, requests, approvals and
other communications to be given under this Agreement by either party to the
other shall be deemed to have been duly given if given in writing and personally
delivered or sent by mail (registered or certified) or by a nationally
recognized overnight delivery service, the business day on which the notice is
actually received by the party, or if given by certified mail, return receipt
requested, postage prepaid, five (5) business days after posted with the United
States Postal Service, addressed as follows:

 

(a)           if to the Company, to:

 

Virtus Oil & Gas Corp.

1517 San Jacinto Street

Houston, Texas 77002

Attention: Rupert Ireland, President and Chief Executive Officer

 

or to such other address as the Company may have advised Consultant in writing;
and

 

(b)           if to Consultant, to:

 

Brett A. Murray

Brett A. Murray & Associates, Inc.

210 W. Hargreaves St.

Holyoke, CO 80734

970-854-2667

970-854-2807 Fax

Bam@brettamurray.com

 

or to such other address as Consultant may have advised the Company in writing.

 

8

 

 

17.          Entire Agreement. This Agreement represents the entire agreement
relating to the relationship between the Company and Consultant. No prior or
subsequent promises, representations, or understandings relative to any terms or
conditions of Consultant’s engagement are to be considered binding or part of
this Agreement unless expressly agreed to in a writing signed by the parties.

 

18.          Amendment. This Agreement may be amended only in a writing signed
by the Company and Consultant.

 

19.          Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original for all purposes and all
of which shall be deemed collectively to be one agreement. Signatures given by
facsimile or portable document format (or similar format) shall be binding and
effective to the same extent as original signatures.

 

20.          Acknowledgment. By signing below, the parties certify and represent
that they have carefully read and considered the foregoing Agreement and fully
understand all provisions of this Agreement and understand the consequences of
signing this Agreement, and have signed this Agreement voluntarily and without
coercion, undue influence, threat, or intimidation of any kind or type
whatsoever.

 

[The Remainder of This Page Is Intentionally Left Blank.]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

 

IN WITNESS WHEREOF, the Company and Consultant have executed this Agreement as
of the Effective Date.

 

COMPANY: VIRTUS OIL & GAS CORP.   a Nevada corporation       By:  /s/ Rupert
Ireland     Name: Rupert Ireland
Title: President and Chief Executive Officer

 

CONSULTANT: BRETT A. MURRAY & ASSOCIATES, INC.   a Colorado corporation      
By:  /s/ Brett A. Murray     Name: Brett A. Murray
Title: President

 

AGREED AS TO SECTIONS 1, 2, 6 and 8:

 

 

/s/ Brett A. Murray

Brett A. Murray, Individually

 

 

 

 

 

10

 

 

EXHIBIT A

 

SERVICES

During the Consulting Term, Consultant shall provide the following Services:

 

(a)negotiating for the acquisition or divestiture of mineral rights, without any
obligation to execute such agreements on behalf of the Company;

(b)negotiating business agreements that provide for the exploration for and/or
development of minerals, without any obligation to execute such agreements on
behalf of the Company;

(c)determining ownership in minerals through the research of public and private
records;

(d)reviewing the status of title, curing title defects and otherwise reducing
title risk associated with ownership in minerals;

(e)managing rights and/or obligations derived from ownership of interests in
minerals;

(f)unitizing or pooling of interests in minerals; and

(g)performing such other duties as may from time to time be assigned by the
President of the Company.

The parties agree to use good faith efforts to reach agreement on any additional
services which the Company may require of Consultant beyond the scope of the
above-mentioned Services.

 

 

 

 

 

11